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Exhibit 10.6
BOTTOMLINE TECHNOLOGIES (de), INC.
Executive Retention Agreement
THIS EXECUTIVE RETENTION AGREEMENT (the "Agreement") by and
between Bottomline Technologies (de), Inc., a Delaware corporation
(the "Company"), and Kevin Donovan (the "Executive") is made as of
November 16, 2006 (the "Effective Date") and supersedes the
executive retention agreements executed on October 4,
2006.
WHEREAS, the Company recognizes that, as is the case with many
publicly-held corporations, the possibility of a change in control
of the Company exists and that such possibility, and the
uncertainty and questions which it may raise among key personnel,
may result in the departure or distraction of key personnel to the
detriment of the Company and its stockholders, and
NOW, THEREFORE, as an inducement for and in consideration of the
Executive remaining in its employ, the Company agrees that the
Executive shall receive the severance benefits set forth in this
Agreement in the event the Executive’s employment with the
Company is terminated under the circumstances described below
subsequent to a Change in Control (as defined in
Section 1.1).
1. Key Definitions.
As used herein, the following terms shall have the following
respective meanings:
1.1 " Change in Control " means an event or occurrence
set forth in any one or more of subsections (a) through
(c) below:
(a) any "person," as such term is used in Sections 13(d)
and 14(d) of the Securities Exchange Act 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;
(b) 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
(c) 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.
1.2 " Change in Control Date " means the first date
during the Term (as defined in Section 2) on which a Change in
Control occurs.
1.3 " Cause " means the discharge resulting from a
determination by a vote of the Board that the Employee:
(a) has been convicted of a felony involving dishonesty, fraud,
theft or embezzlement or any other felony; or
(b) 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.
1.4 " Good Reason " means:
(a) 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
after notice thereof from the Employee to the Board setting forth
in reasonable detail the respects in which the Employee believes
such assignments or duties are significantly inconsistent with the
Employee’s prior duties;
(b) a reduction in the Employee’s then base
compensation;
(c) 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
(d) any breach by the Company of any material provision of this
Agreement; provided that none of the foregoing shall constitute
Good Reason to the extent the Employee has agreed in writing
thereto. The right of the Employee to terminate his at will
employment as a result of Good Reason 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.
1.5 " Disability " means the Executive shall have been
unable to perform the Executive’s duties with the Company for
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.
2. Term of Agreement . This Agreement, and all rights and
obligations of the parties hereunder, shall take effect upon the
Effective Date and shall expire upon the first to occur of
(a) the expiration of the Term (as defined below) if a Change
in Control has not occurred during the Term, (b) the
termination of the Executive’s employment with the Company
prior to the Change in Control Date, (c) the date 12 months
after the Change in Control Date, if the Executive is still
employed by the Company as of such later date, or (d) the
fulfillment by the Company of all of its obligations under
Sections 4 and 5.2 if the Executive’s employment with
the Company terminates within 12 months following the Change in
Control Date. "Term" shall mean the period commencing as of the
Effective Date and continuing in effect through June 30, 2009,
subject to automatic one-year extensions unless prior notice is
given by the Company.
3. Employment Status; Termination Following Change in
Control .
3.1 Not an Employment Contract . The Executive
acknowledges that this Agreement does not constitute a contract of
employment or impose on the Company any obligation to retain the
Executive as an employee and that this Agreement does not prevent
the Executive from terminating employment at any time. If the
Executive’s employment with the Company terminates for any
reason and subsequently a Change in Control shall occur, the
Executive shall not be entitled to any benefits hereunder.
3.2 Termination of Employment .
(a) If the Change in Control Date occurs during the Term, any
termination of the Executive’s employment by the Company or
by the Executive within 12 months following the Change in Control
Date (other than due to the death of the Executive) shall be
communicated by a written notice to the other party hereto (the
"Notice of Termination"), given in accordance with Section 7.
Any Notice of Termination shall: (i) indicate the specific
termination provision (if any) of this Agreement relied upon by the
party giving such notice, (ii) to the extent applicable, set
forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of the Executive’s employment
under the provision so indicated and (iii) specify the Date of
Termination (as defined below). The effective date of an employment
termination (the "Date of Termination") shall be the close of
business on the date specified in the Notice of Termination (which
date may not be less than 15 days or more than 120 days after the
date of delivery of such Notice of Termination), in the case of a
termination other than one due to the Executive’s death, or
the date of the Executive’s death, as the case may be. In the
event the Company fails to satisfy the requirements of this
Section 3.2(a) regarding a Notice of Termination, the
purported termination of the Executive’s employment pursuant
to such Notice of Termination shall not be effective for purposes
of this Agreement.
(b) The failure by the Executive or the Company to set forth in
the Notice of Termination any fact or circumstance which
contributes to a showing of Good Reason or Cause shall not waive
any right of the Executive or the Company, respectively, hereunder
or preclude the Executive or the Company, respectively, from
asserting any such fact or circumstance in enforcing the
Executive’s or the Company’s rights hereunder.
(c) Any Notice of Termination for Cause given by
the Company must be given within 10 days of the occurrence of the
event(s) or circumstance(s) which constitute(s) Cause.
4. Benefits to Executive .
4.1 Compensation and Stock Acceleration . If the Change
in Control Date occurs during the Term and the Executive’s
employment with the Company terminates within 12 months following
the Change in Control Date, the Executive shall be entitled to the
following benefits:
(a) Termination Without Cause or for Good Reason . If the
Executive’s employment with the Company is terminated by the
Company (other than for Cause, Disability or Death) or by the
Executive for Good Reason within 12 months following the Change in
Control Date, then the Executive shall be entitled to the following
benefits:
(i) each outstanding option to purchase shares of Common Stock
of the Company held by the Executive shall become immediately
exercisable in full;
(ii) each vested option (including any options vesting as a
result of acceleration) to purchase shares of common stock of the
Company shall be exercisable by the Executive over the period
outlined in the Company’s change in control provisions as
approved by the Board of Dir
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