Exhibit 10.3
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 Peter Fortune (the
“Executive”) is made as of October 10, 2005 (the
“Effective Date”).
WHEREAS, the Board of Directors of
the Company (the “Board”) has determined that
appropriate steps should be taken to reinforce and encourage the
continued employment and dedication of the Company’s key
personnel without distraction from the possibility of a change in
control of the Company and related events and
circumstances.
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.
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;
(b) has willfully and persistently
failed to attend to material duties or obligations reasonably
imposed on him under this Agreement or the Service Agreement with
the Executive dated March 11, 1999, which failure continues
for 21 days following written notice thereof from the Board to the
Employee referencing this Section 1.3(b) and describing in
reasonable detail the nature of the Employee’s failure under
this Section 1.3(b);
(c) 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, which
breach is described in reasonable detail in a written notice
referencing this Section 1.3(c) from the Board to the Employee
and which breach of a material obligation would have an adverse
effect on the Company (collectively “Company
Agreements”); or
(d) 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
only under clause (a) or (d) of this
Section 1.3.
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
2
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 Employment Period
(as defined below) if a Change in Control has not occurred during
the Initial Period, (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. “Employment
Period” shall mean the period commencing as of the Effective
Date and continuing in effect through November 21, 2008 (the
“Initial Period”), such period to be automatically
renewed for successive three year periods (each, a “Renewal
Period” and, together with the Initial Period, the
“Employment Period”). The Initial Period or the Renewal
Period, as the case may be, shall not renew for a successive period
if at least one year prior to the end of the Initial Period or the
Renewal Period, as the case may be, written notice is provided by
the Employee or the Company, as the case may be, referencing this
Section 2 and the non-renewal of this Agreement; provided,
that, if a Change in Control of the Company (as defined in
Section 1 of this Agreement) shall have occurred during the
Employment Period, the Employment Period and this Agreement shall
continue in effect for a period of not less than one year from the
date on which such Change in Control occurred and any notice of
non-renewal pursuant to this Section 2 shall be deemed null
and void.
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 subsequentl
