EXHIBIT 10.22
ENTRUST TECHNOLOGIES,
INC.
CHANGE IN CONTROL BONUS INCENTIVE
PLAN
SECTION 1. ESTABLISHMENT AND
PURPOSE
1.1 Effective Date and
Establishment of the Plan . The Company hereby establishes the
Entrust Technologies, Inc. Change in Control Bonus Incentive Plan,
as amended from time to time, to permit the awarding of bonuses to
eligible Employees, based on the consideration the Company or the
Company’s shareholders receive upon a Change in Control (as
defined in Section 2.5 below).
The Plan shall become effective on
January 26, 2004 and shall continue until terminated by the Company
pursuant to Section 7.
1.2 Purpose . The Board
recognizes that the possibility of a Change in Control of the
Company exists from time to time and that such possibility, and the
uncertainty, instability and questions that it may raise for and
among key Employees, may result in the premature departure or
significant distraction of such personnel to the material detriment
of the Company and its shareholders. Therefore, in order to align
the interests of the Company’s shareholders with the
Company’s key Employees, the Company has established the Plan
to provide such Employees with the opportunity to increase their
total compensation through the payment of cash bonuses in the event
of Change in Control.
SECTION 2. DEFINITIONS
As used in the Plan, the following
terms shall have the meanings set forth below (unless otherwise
expressly provided).
2.1 “ Award”
means an award of the opportunity to receive a cash bonus payable
upon the consummation of a Change in Control.
2.2 “ Bonus Award
Agreement ” means a written agreement in a form approved
by the Administrator to be entered into by the Company and the
Participant as provided in Section 3 and Section 5.3.
2.3 “ Board ”
means the Board of Directors of the Company.
2.4
“Cause” shall
exist :
(a) if the Participant Willfully and
materially breaches any confidentiality, non-solicitation or
non-disparagement agreement he may have with the
Company;
(b) if the Participant is convicted
of, or pleads nolo contendere to, a felony that materially
prejudices the Company;
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(c) in the event of Participant’s Willful
failure to attempt in good faith to perform the duties of the
Participant’s employment after receipt of written notice from
the Board and an opportunity to cure such failure; or
(d) in the event of
Participant’s Willful failure to attempt in good faith to
follow any legal and proper Board directive, after receipt of
written notice from the Board and a reasonable opportunity to cure
such non-adherence or failure to act.
2.5 “ Change in
Control” shall be deemed to have occurred if:
(a) any Person other than (A) the
Company or, (B) any trustee or other fiduciary holding securities
under any employee benefit plan of the Company, or (C) any company
owned, directly or indirectly, by the stockholders of the Company
immediately prior to the occurrence with respect to which the
evaluation is being made in substantially the same proportions as
their ownership of the common stock of the Company, becomes the
Beneficial Owner (except that a Person shall be deemed to be the
Beneficial Owner of all shares that any such Person has the right
to acquire pursuant to any agreement or arrangement or upon
exercise of conversion rights, warrants or options or otherwise,
without regard to the sixty day period referred to in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of
the Company or any Significant Subsidiary (as defined below),
representing 25% of the combined voting power of the
Company’s or such subsidiary’s then outstanding
securities; or
(b) during any period of two
consecutive years, individuals who at the beginning of such period
constitute the Board, and any new director (other than a director
designated by a person who has entered into an agreement with the
Company to effect a transaction described in clause (i), (iii), or
(iv) of this paragraph) whose election by the Board or nomination
for election by the Company’s stockholders was approved by a
vote of at least two-thirds of the directors then still in office
who either were directors at the beginning of the two-year period
or whose election or nomination for election was previously so
approved but excluding for this purpose any such new director whose
initial assumption of office occurs as a result of either an actual
or threatened election contest (as such terms are used in Rule
14a-11 of Regulation 14A promulgated under the Exchange Act) or
other actual or threatened solicitation of proxies or consents by
or on behalf of an individual, corporation, partnership, group,
associate or other entity or Person other than the Board, cease for
any reason to constitute at least a majority of the Board;
or
(c) the consummation of a merger or
consolidation of the Company or any subsidiary owning directly or
indirectly all or substantially all of the consolidated assets of
the Company (a “Significant Subsidiary”) with any other
entity, other than a merger or consolidation which would result in
the voting securities of the Company or a Significant Subsidiary
outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting
securities of the surviving or resulting entity) more than 50% of
the combined voting power of the surviving or resulting entity
outstanding immediately after such merger or consolidation;
or
(d) the stockholders of the Company
approve a plan or agreement for the sale or disposition of all or
substantially all of the consolidated assets of the Company
(other
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than such a sale or disposition immediately
after which such assets will be owned directly or indirectly by the
Company’s stockholders in substantially the same proportions
as their ownership of the Company’s common stock immediately
prior to such sale or disposition) in which case the Board shall
determine the effective date of the Change in Control resulting
therefrom.
For purposes of this
definition:
(i) The term “Beneficial
Owner” shall have the meaning ascribed to such term in Rule
13d-3 under the Exchange Act (including any successor to such
Rule).
(ii) The term “Person”
shall have the meaning ascribed to such term in Section 3(a)(9) of
the Exchange Act and used in Sections 13(d) and 14(d) thereof,
including “group” as defined in Section 13(d)
thereof.
2.6 “ Code ”
means the Internal Revenue Code of 1986, as amended.
2.7 “ Committee ”
means the individual or individuals as designated by the Board to
administer the Plan who are independent directors immediately prior
to a Change in Control.
2.8 “Common
Stock” means the common stock of the Company or such
other class or kind of shares or other securities resulting from
the application of Section 7.
2.9 “Common Stock Price
Targets” means the price of Common Stock on the date of a
Change in Control under which a bonus is payable.
2.10 “ Company ”
means Entrust Technologies, Inc., a Maryland corporation, and any
successor thereto.
2.11 “ Effective Date
” means the date the Plan becomes effective, as set forth in
Section 1.1 herein.
2.12 “ Employee ”
means an officer or other key employee of the Company or a
Subsidiary including a director who is such an employee.
2.13 “ E
