Exhibit 10.10
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement"), made as of the 30th day of
September 1998, is entered into by Bottomline Technologies (de), Inc., a
Delaware corporation with its principal place of business at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (the "Company"), and ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇, residing at ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (the "Employee").
The Company desires to employ the Employee, and the Employee desires to be
employed by the Company. In consideration of the mutual covenants and promises
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, the parties
agree as follows:
1. Term of Employment. The Company hereby agrees to employ the
Employee, and the Employee hereby accepts employment with the Company, upon the
terms set forth in this Agreement, for the 36 month period commencing on
September 30, 1998 (the "Commencement Date") and ending on September 30, 2001,
unless sooner terminated in accordance with the provisions of Section 5 or
extended by mutual written agreement of the parties hereto (such period, the
"Employment Period"); provided that, if a Change in Control of the Company (as
defined in Section 4) shall have occurred during the Employment Period, the
Employment Period and this Agreement shall continue in effect for a period of
not less than 24 months beyond the date which such Change in Control occurred.
The Company will notify the Employee whether it intends to extend the Employment
Period at least 60 days prior to the end of the Employment Period.
2. Title; Capacity. During the Employment Period, the Employee shall
serve as Executive Vice President, Chief Financial Officer and Treasurer of the
Company. During the Employment Period, the Employee shall be subject to the
supervision of, and shall have such authority as is delegated to him by, the
Chief Executive Officer of the Company (the "CEO") and/or the Board of Directors
of the Company (the "Board" or "Board of Directors"). The Employee hereby
accepts such employment and agrees to undertake the duties and responsibilities
normally inherent in such position and such other duties and responsibilities as
the CEO and/or the Board shall from time to time reasonably assign to him.
During the Employment Period, the Employee shall, subject to the direction and
supervision of the CEO and/or the Board, devote his full business time, best
efforts, business judgment, skill and knowledge to the advancement of the
Company's business and interests and to the discharge of his duties and
responsibilities hereunder. The Employee agrees to abide by the rules,
regulations, instructions, personnel practices and policies of the Company and
any changes therein which may be adopted from time to time by the Company.
3. Compensation and Benefits.
3.1 Salary and Bonus. The Company shall pay the Employee, in arrears in
installments consistent with the Company's usual payroll practices, an annual
base salary of $175,000. The Company agrees to review the Employee's annual
base salary on each anniversary of the Commencement Date and may consider a
merit increase in such annual base salary for the ensuing contract year based
upon the performance of the Employee during the prior year. In the event that
the Employee is, or is to be, employed for less than a full payroll installment
period, such installment of the annual base salary shall be appropriately
adjusted. The Employee shall
-2-
be eligible to receive an annual bonus based upon his performance. For
performance during the Company's fiscal year ending June 30, 1999, the Employee
shall be eligible to receive a bonus of up to $50,000.
3.2 Fringe Benefits. The Employee shall be entitled to participate in
all employee benefit programs that the Company establishes and makes available
to its executive officers from time to time (such as life insurance, health
insurance, dental insurance, long-term disability insurance and retirement
programs whether such programs are qualified, nonqualified and/or pretax
contribution programs). The Employee shall be entitled to three weeks paid
vacation per year, to be taken at reasonable times.
3.3 Reimbursement of Expenses. The Company shall reimburse the Employee
for all reasonable travel, entertainment and other expenses incurred or paid by
the Employee in connection with, or related to, the performance of his duties,
responsibilities or services under this Agreement, in accordance with expense
reimbursement policies of the Company, upon presentation by the Employee of
documentation, expense statements, vouchers and/or such other supporting
information as the Company may reasonably request.
3.4 Stock Incentives. Concurrently with the execution and delivery of
this Agreement by the Employee and the Company or shortly thereafter, the
Company and the Employee have executed and delivered, or will execute and
deliver, an Incentive Stock Option Agreement and a Nonstatutory Stock Option
Agreement pursuant to which the Employee shall be granted options to purchase up
to an aggregate of 54,000 shares of the Company's Common Stock, at an exercise
price of $30.00 per share (collectively, with any future grants of stock
options, the "Stock Options"), such stock options being subject to the terms and
conditions of the respective Stock
-3-
Option agreements and Section 6 of this Agreement. In addition, the Employee
shall be eligible to receive grants of stock options and other awards and
benefits pursuant to such employee stock option and other stock-based employee
benefit plans as the Company may maintain from time to time during the
Employment Period with respect to its key employees of like stature and
compensation, and such amounts as may be determined by the Board of Directors in
its discretion.
4. Change in Control of the Company; Potential Change in Control. The
Company recognizes that a Potential Change in Control of the Company (as defined
below) and/or a Change in Control of the Company (as defined below) and the
uncertainties which may arise among its senior executives in connection
therewith could result in the departure or distraction of its senior executives
to the detriment of the Company and its stockholders. Accordingly, in order to
induce the Employee to remain in the employ of the Company and to secure for the
Company and its stockholders the benefits of the Employee's continued attention
and dedication during the tenancy of any Potential Change in Control of the
Company or Change in Control of the Company, including the Employee's assessment
of, and advice to the Company's Board of Directors regarding, whether any
Potential Change in Control and/or Change in Control proposal would be in the
best interest of the Company and its stockholders, the Company has determined
that it is in the best interest of the Company and its stockholder to provide to
the Employee the extended severance benefits contained in this Agreement.
4.1 Change in Control of the Company. A "Change in Control of the
Company" shall occur or be deemed to have occurred only if any one or more of
the following events occur: (i) any "person," as such term is used in Sections
13(d) and 14(d) of the Securities Exchange Act
-4-
of 1934, as amended (the "Exchange Act") (other than the Company, any trustee or
other fiduciary holding securities under an employee benefit plan of the
Company, or any corporation owned directly or indirectly by the stockholders of
the Company in substantially the same proportion as their ownership of stock of
the Company) is or becomes the "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of the Company
representing 50% or more of the combined voting power of the Company's then
outstanding securities (ii) the stockholders of the Company approve a merger or
consolidation of the Company with any other corporation, other than (A) a merger
or consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) more than 80% of the combined voting power of the voting
securities of the Company or such surviving entity outstanding immediately after
such merger or consolidation or (B) a merger or consolidation effected to
implement a recapitalization of the Company (or similar transaction) in which no
"person" (as hereinabove defined) acquires more than 50% of the combined voting
power of the Company's then outstanding securities; or (iii) the stockholders of
the Company approve a plan of complete liquidation of the Company or an
agreement for the sale or disposition by the Company of all or substantially all
of the Company's assets.
4.2 Potential Change in Control of the Company. A "Potential Change in
Control of the Company" shall be deemed to have occurred if:
(i) the Company enters into an agreement, the consummation of which
would result in the occurrence of a Change in Control of the Company;
-5-
(ii) any person (including the Company) publicly announces an
intention to take or to consider taking actions which if consummated would
constitute a Change in Control of the Company; or
(iii) the Board adopts a resolution to the effect that, for purposes
of this Agreement, a Potential Change in Control of the Company has
occurred.
5. Employment Termination. The employment of the Employee by the Company
shall terminate upon the occurrence of any of the following:
5.1 Expiration of the Employment Period in accordance with Section 1.
5.2 At the election of the Company, for cause, immediately upon written
notice by the Company to the Employee. For the purposes of this Agreement,
prior to a Change in Control of the Company,"for cause" shall mean the discharge
resulting from a determination by a vote of the Board that the Employee:
(i) has been convicted of a felony involving dishonesty, fraud, theft
or embezzlement or any other felony;
(ii) has failed or refused, in any material respect, to follow
reasonable written policies or directives established by the CEO and/or the
Board, which failure or refusal continues for 21 days following written
notice thereof to the Employee;
(iii) has willfully and persistently failed to attend to material
duties or obligations reasonably imposed on him under this Agreement, which
failure continues for 21 days following written notice thereof to the
Employee;
(iv) has breached any of his material obligations under any agreement
between the Employee and the Company which imposes confidentiality,
proprietary information, assignment of invention(s), non-competition or
similar obligations on the Employee, as may be in effect from time to time
(collectively "Company Agreements"); or
-6-
(v) has performed or failed to act, which if he were prosecuted and
convicted for such performance or failure would constitute a crime or
offense involving money or property of the Company (in either case in an
amount or at a value in excess of $5,000), or which would constitute a
felony in the jurisdiction involved.
For purposes of this Agreement, after a Change in Control of the Company,
"for cause" shall mean the discharge resulting from a determination by a vote of
the Board under clause (i) or (v) of this Section 5.2.
5.3 Thirty days after the death or disability of the Employee. As used in
this Agreement, the term "disability" shall mean the Employee shall have been
unable to perform the services contemplated under this Agreement for a period of
90 days, whether or not consecutive, during any 360-day period, due to a
physical or mental disability. A determination of disability shall be made by a
physician satisfactory to both the Employee and the Company; provided, that if
the Employee and the Company do not agree on a physician, the Employee and the
Company shall each select a physician and these two together shall select a
third physician, whose determination as to disability shall be binding on all
parties.
5.4 At the election of the Employee, as a result of Involuntary
Termination (as defined below), immediately upon written notice by the Employee
to the Company. For the purposes of this Section 5.4, "Involuntary Termination"
shall mean:
(i) the continued assignment to the Employee of any duties or the
continued significant change in the Employee's duties, either of which is
substantially inconsistent with the Employee's duties immediately prior to
such assignment or change for a period of thirty (30) days after notice
thereof from the Employee to the CEO setting forth in
-7-
reasonable detail the respects in which the Employee believes such
assignments or duties are significantly inconsistent with the Employee's
prior duties;
(ii) a reduction in the Employee's base compensation;
(iii) the imposition of a requirement by the Company, any person in
control of the Company or any successor to the Company, that the location
at which the Employee performs his principal duties for the Company or any
successor to the Company be changed to a new location outside a radius of
50 miles from the then current location; or
(iv) any breach by the Company of any material provision of this
Agreement that continues uncured for 30 days following written notice
thereof; provided that (A) none of the foregoing shall constitute
Involuntary Termination to the extent the Employee has agreed in writing
thereto; and (B) after a Change in Control of the Company, the 30-day cure
periods described in clauses (i) and (iv) shall not apply.
The right of the Employee to terminate his employment as a result of an
Involuntary Termination shall not be affected by the Employee's disability, or
the fact that the Employee at such time may have an offer of employment from
another employer or any other reason for terminating his employment with the
Company.
5.5 At the election of the Company, without cause, upon 60 days' prior
written notice to the Employee.
5.6 At the election of the Employee, other than as a result of an
Involuntary Termination, upon 30 days prior written notice to the Company.
6. Effect of Termination.
-8-
6.1 Termination by the Company for Cause or by the Employee other than as
a result of an Involuntary Termination. In the event the Employee's employment
is terminated by the Company pursuant to Section 5.2 or by the Employee pursuant
to Section 5.6, the Company shall pay to the Employee the base salary and
benefits (excluding any bonuses) through the last day of his actual employment
by the Company.
6.2 Termination for Death or Disability. If the Employee's employment is
terminated by death or because of disability pursuant to Section 5.3, the
Company shall pay to the estate of the Employee or to the Employee, as the case
may be, the base salary and benefits to which the Employee would otherwise be
entitled under Section 3 through the last day of his actual employment
(including the maximum bonus that the Employee would have been entitled to under
the Company's executive bonus program for the then current period).
6.3 Involuntary Termination.
6.3.1 Prior to a Potential Change in Control of the Company. In the
event that the Employee's employment is terminated by the Employee as a result
of Involuntary Termination prior to a Potential Change in Control of the Company
or after the termination of a Potential Change in Control of the Company
transaction that is not consummated, (i) the Company shall pay to the Employee,
within ten (10) business days after the termination of the Employee's
employment, an amount equal to his then annual base salary (including the
maximum bonus that the Employee would have been entitled to under the Company's
executive bonus program for the then current period); (ii) the Company shall
continue to provide benefits as then in effect for a period of 12 months (other
than benefits associated with any Company bonus plan), commencing with the first
day following the effective date of termination; and (iii) the Employee's right
to
-9-
exercise the Stock Options shall become immediately exercisable in full upon
the date of such termination.
6.3.2 Upon or After a Potential Change in Control of the Company. In
the event that the Employee's employment is terminated by the Employee as a
result of Involuntary Termination upon or after the occurrence of a Potential
Change in Control of the Company, for so long as such Potential Change in
Control of the Company transaction is not terminated prior to consummation or
after the Change in Control of the Company, (i) the Company shall pay to the
Employee, within ten (10) business days after the termination of the Employee's
employment, an amount equal to two times his then annual base salary (including
the maximum bonus that the Employee would have been entitled to under the
Company's executive bonus program for the then current period); (ii) the Company
shall continue to provide benefits as then in effect for a period of 24 months
(other than benefits associated with any Company bonus plan), commencing with
the first day following the effective date of termination; and (iii) the
Employee's right to exercise the Stock Options shall become immediately
exercisable in full upon the date of such termination.
6.4 Termination Without Cause.
6.4.1 Prior to a Potential Change in Control of the Company. In the
event that the Employee's employment is terminated by the Company pursuant to
Section 5.5 prior to a Potential Change in Control of the Company or after the
termination of a Potential Change in Control of the Company transaction that is
not consummated, (i) the Company shall pay to the Employee, within ten (10)
business days after the termination of the Employee's employment, an amount
equal to his then annual base salary (including the maximum bonus that the
Employee
-10-
would have been entitled to under the Company's executive bonus program for the
then current period); (ii) the Company shall continue to provide benefits as
then in effect for a period of 12 months (other than benefits associated with
any Company bonus plan), commencing with the first day following the effective
date of termination; and (iii) the Employee's right to exercise the Stock
Options shall become immediately exercisable in full upon the date of such
termination.
6.4.2 Upon or After a Potential Change in Control of the Company. In
the event that the Employee's employment is terminated by the Company pursuant
to Section 5.5 upon or after a Potential Change in Control of the Company, for
so long as such Potential Change in Control of the Company transaction is not
terminated prior to consummation, or after the Change in Control of the Company
(i) the Company shall pay to the Employee, within ten (10) business days after
the termination of the Employee's employment, an amount equal to two times his
then annual base salary (including any bonuses that were earned and had vested
prior to such termination, but that were not paid to the Employee by the Company
prior to such termination); (ii) the Company shall continue to provide benefits
as then in effect for a period of 24 months (other than benefits associated with
any Company bonus plan), commencing with the first day following the effective
date of termination; and (iii) the Employee's right to exercise the Stock
Options shall become immediately exercisable in full upon the date of such
termination.
6.5 No Duty to Mitigate. The Employee shall not be required to mitigate
the amount of any payment provided for in this Section 6 nor shall the amount of
any payment provided for in this Section 6 be reduced by any compensation earned
by the Employee as a result of employment by another employer or by retirement;
provided, that the Company shall not provide
-11-
any non-cash benefit otherwise receivable by the Employee if an equivalent
benefit is actually received by the Employee. The Employee agrees to report
receipt of any non-cash benefit received by the Employee.
6.6 Violation of Company Agreements. Notwithstanding any other provision
of this Agreement, the Company shall not be required to make any payments or
provide any benefits to the Employee under this Section 6 if the Employee shall
have breached any of his material obligations under any Company Agreement.
6.7 Survival. The provisions of Section 6 shall survive the termination
of this Agreement.
6.8 No offset. Upon or after the occurrence of a Potential Change in
Control of the Company, for so long as such Potential Change in Control of the
Company transaction is not terminated prior to consummation, or after a Change
in Control of the Company, the Company shall have no right to offset any amounts
owed by the Employee to the Company against any amounts owed by the Company to
the Employee under this Agreement.
7. Successors; Binding Agreement. The Company will require any
successor (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business or assets of the Company
expressly to assume and agree to perform this Agreement. Failure of the Company
to obtain an assumption of this Agreement upon the effectiveness of any such
succession shall be a breach of this Agreement and shall entitle the Employee,
upon the effectiveness of any such succession, to compensation from the Company
in the same amount as the Employee would be entitled hereunder if the Employee
had terminated his employment as a result of Involuntary Termination upon or
after the occurrence of a Potential
-12-
Change in Control of the Company. As used in this Agreement, "Company" shall
mean the Company as defined above and any successor to its business or assets as
aforesaid which assumes and agrees to perform this Agreement by operation of
law, or otherwise.
8. Notices. All notices required or permitted under this Agreement shall
be in writing and shall be deemed effective upon personal delivery or three days
after deposit in the United States Post Office, by registered or certified mail,
postage prepaid, return receipt requested, addressed to the other party at the
address shown above (and, in the case of any notice to the Company, with a copy
to ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Esq., ▇▇▇▇ and ▇▇▇▇ LLP, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇ 02109), or at such other address or addresses as either party
shall designate to the other in accordance with this Section 8.
9. Pronouns. Whenever the context may require, any pronouns used in this
Agreement shall include the corresponding masculine, feminine or neuter forms,
and the singular forms of nouns and pronouns shall include the plural, and vice
----
versa.
-----
10. Entire Agreement. This Agreement along with Stock Options constitutes
the entire agreement between the parties with respect to the subject matter
hereof and supersedes all prior agreements and understandings, whether written
or oral, relating to the subject matter of such agreements; provided, however,
that the provisions contained herein relating to Stock Options are in addition
to and intended to supplement the terms and conditions of such Stock Options;
provided, further that in the case of any conflict between the terms provided
herein and the terms of any Stock Option or any document issued or entered into
in connection with any such Stock Option or the terms of any plan governing any
such Stock Option, the terms provided herein shall govern.
-13-
11. Amendment. This Agreement may be amended or modified only by a
written instrument executed by both the Company and the Employee.
12. Governing Law. This Agreement shall be construed, interpreted and
enforced in accordance with the laws of the State of New Hampshire, without
giving effect to conflict of laws provisions.
13. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of both parties and their respective successors and
assigns, including any corporation with which or into which the Company may be
merged or which may succeed to its assets or business and the Employee's heirs,
estate administrator, executor and personal representative, provided, however,
that the obligations of the Employee are personal and shall not be assigned by
him.
14. Legal Fees. The Company shall pay all legal fees and related expenses
incurred by the Employee protecting, obtaining or enforcing any right or benefit
accruing to the Employee hereunder after a Potential Change in Control of the
Company which has not been terminated or after a Change in Control of the
Company.
15. Taxes.
(a) All payments to be made to the Employee under this Agreement will be
subject to required withholding of federal, state and local income and
employment taxes.
(b) In the event that the Company undergoes a "Change in Ownership or
Control" (as defined below), the Company shall determine after receipt of each
"Contingent Compensation Payment" (as defined below) by the Employee, the
amount, if any, of the excise tax (the "Excise Tax") payable pursuant to Section
4999 of the Internal Revenue Code of 1986, as amended (the "Code") by the
Employee with respect to each such payment. Within 7 days of the receipt of
-14-
each Contingent Compensation Payment by the Employee, the Company shall make a
cash payment (the "Gross-Up Payment") to the Employee in an amount equal to the
sum of (i) the amount of the Excise Tax payable with respect to the Contingent
Compensation Payment and (ii) the amount necessary to pay all additional taxes
imposed on (or economically borne by) the Employee (including the Excise Taxes,
state and federal income taxes and all applicable withholding taxes)
attributable to the receipt of the Gross-Up Payment. For purpose of the
preceding sentence, all taxes attributable to the receipt of the Gross-Up
Payment shall be computed assuming the application of the maximum tax rates
provided by law. For purposes of this Section 15, the final determination of
(i) which amounts are properly characterized as Contingent Compensation
Payments, (ii) the Excise Tax payable with respect to the Contingent
Compensation Payments, and (iii) the amount of any taxes attributable to the
receipt of the Gross-Up Payment shall be made by the Employee.
(c) For purposes of this Section 15, the following terms shall have the
meaning given them in this subsection (c):
(i) "Change in Ownership or Control" shall mean a change in the
ownership or effective control of the Company or in the ownership of a
substantial portion of the assets of the Company determined in accordance
with Section 280G(b)(2) of the Code.
(ii) "Contingent Compensation Payment" shall mean any payment (or
benefit) in the nature of compensation that is made or supplied to a
"disqualified individual" (as defined in Section 280G(c) of the Code) and
that is contingent (within the meaning of Section 280G(b)(2)(A)(i) of the
Code) on a Change in Ownership or Control of the Company.
-15-
16. Miscellaneous.
16.1 No delay or omission by either party in exercising any right under
this Agreement shall operate as a waiver of that or any other right. A waiver
or consent given by either party on any one occasion shall be effective only in
that instance and shall not be construed as a bar or waiver of any right on any
other occasion.
16.2 The captions of the sections of this Agreement are for convenience of
reference only and in no way define, limit or affect the scope or substance of
any section of this Agreement.
16.3 In case any provision of this Agreement shall be invalid, illegal or
otherwise unenforceable, the validity, legality and enforceability of the
remaining provisions shall in no way be affected or impaired thereby.
16.4 This Agreement may be executed in several counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year set forth above.
BOTTOMLINE TECHNOLOGIES (de), INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President, Chief Executive Officer
and Chairman
EMPLOYEE:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-16-
