EX-10.16 2 dex1016.htm 2000 STOCK INCENTIVE PLAN 2000 Stock Incentive Plan

Exhibit 10.16

 

BOTTOMLINE TECHNOLOGIES (de), INC.

 

2000 STOCK INCENTIVE PLAN

 

1. Purpose

 

The purpose of this 2000 Stock Incentive Plan (the “Plan”) of Bottomline Technologies (de), Inc., a Delaware corporation (“Bottomline” or the “Company”), is to advance the interests of the Company’s stockholders by enhancing the Company’s ability to attract, retain and motivate persons who make (or are expected to make) important contributions to the Company by providing such persons with equity ownership opportunities and performance-based incentives and thereby better aligning the interests of such persons with those of the Company’s stockholders. Except where the context otherwise requires, the term “Company” shall include any of the Company’s present or future parent or subsidiary corporations as defined in Sections 424(e) or (f) of the Internal Revenue Code of 1986, as amended, and any regulations promulgated thereunder (the “Code”) and any other business venture (including, without limitation, joint venture or limited liability company) in which the Company has a significant interest, as determined by the Board of Directors of the Company (the “Board”).

 

2. Eligibility

 

All of the Company’s employees, officers, directors, consultants and advisors (and any individuals who have accepted an offer for employment) are eligible to be granted options or restricted stock awards (each, an “Award”) under the Plan. Each person who has been granted an Award under the Plan shall be deemed a “Participant”.

 

3. Administration and Delegation.

 

(a) Administration by Board of Directors. The Plan will be administered by the Board. The Board shall have authority to grant Awards and to adopt, amend and repeal such administrative rules, guidelines and practices relating to the Plan as it shall deem advisable. The Board may correct any defect, supply any omission or reconcile any inconsistency in the Plan or any Award in the manner and to the extent it shall deem expedient to carry the Plan into effect and it shall be the sole and final judge of such expediency. All decisions by the Board shall be made in the Board’s sole discretion and shall be final and binding on all persons having or claiming any interest in the Plan or in any Award. No director or person acting pursuant to the authority delegated by the Board shall be liable for any action or determination relating to or under the Plan made in good faith.

 

(b) Appointment of Committees. To the extent permitted by applicable law, the Board may delegate any or all of its powers under the Plan to one or more committees or subcommittees of the Board (a “Committee”). All references in the Plan to the “Board” shall mean the Board or a Committee of the Board to the extent that the Board’s powers or authority under the Plan have been delegated to such Committee.

 

4. Stock Available for Awards.

 

(a) Number of Shares. Subject to adjustment under Section 8, Awards may be made under the Plan for a number of shares of common stock, $.001 par value per share, of the Company (the “Common Stock”) equal to the sum of:

 

  (1) 1,350,000 shares of Common Stock (the “Initial Shares”); plus

 

  (2) such additional number of shares of Common Stock (up to 800,000 shares) as is equal to the sum of (x) the number of shares of Common Stock reserved for issuance under the

Company’s 1997 Stock Incentive Plan (the “Existing Plan”) that remain available for grant under the Existing Plan immediately prior to the adoption of this Plan by the Board and (y) the number of shares of Common Stock subject to awards granted under the Existing Plan which awards expire, terminate or are otherwise surrendered, canceled, forfeited or repurchased by the Company at their original issuance price pursuant to a contractual repurchase right (subject, however, in the case of Incentive Stock Options (as hereinafter defined) to any limitations of the Code); plus

 

  (3) an annual increase to be added on the first day of each of the Company’s fiscal years during the period beginning in fiscal year 2001 and ending on the second day of fiscal year 2010 equal to the lesser of (i) 5 million shares of Common Stock, (ii) a number of shares of Common Stock which, when added to the Initial Shares that remain available for grant under the Plan, is equal to 12% of the outstanding shares on such date or (iii) an amount determined by the Board.

 

If any Award expires or is terminated, surrendered or canceled without having been fully exercised or is forfeited in whole or in part (including as the result of shares of Common Stock subject to such Award being repurchased by the Company at the original issuance price pursuant to a contractual repurchase right) or results in any Common Stock not being issued, the unused Common Stock covered by such Award shall again be available for the grant of Awards under the Plan, subject, however, in the case of Incentive Stock Options, to any limitations under the Code. Shares issued under the Plan may consist in whole or in part of authorized but unissued shares or treasury shares.

 

(b) Per-Participant Limit. Subject to adjustment under Section 7, the maximum number of shares of Common Stock with respect to which Awards may be granted to any Participant under the Plan shall be 1,000,000 shares per calendar year. The per-Participant limit described in this Section 4(b) shall be construed and applied consistently with Section 162(m) of the Code (“Section 162(m)”).

 

5. Stock Options.

 

(a) General. The Board may grant options to purchase Common Stock (each, an “Option”) and determine the number of shares of Common Stock to be covered by each Option, the exercise price of each Option and the conditions and limitations applicable to the exercise of each Option, including conditions relating to applicable federal or state securities laws, as it considers necessary or advisable. An Option which is not intended to be an Incentive Stock Option (as hereinafter defined) shall be designated a “Nonstatutory Stock Option”.

 

(b) Incentive Stock Options. An Option that the Board intends to be an “incentive stock option” as defined in Section 422 of the Code (an “Incentive Stock Option”) shall only be granted to employees of Bottomline or its subsidiaries (as defined in Section 424(f) of the Code) and shall be subject to and shall be construed consistently with the requirements of Section 422 of the Code. The Company shall have no liability to a Participant, or any other party, if an Option (or any part thereof) which is intended to be an Incentive Stock Option is not an Incentive Stock Option.

 

(c) Exercise Price. The Board shall establish the exercise price at the time each Option is granted and specify it in the applicable option agreement.

 

(d) Duration of Options. Each Option shall be exercisable at such times and subject to such terms and conditions as the Board may specify in the applicable option agreement.

 

(e) Exercise of Option. Options may be exercised by delivery to the Company of a written notice of exercise signed by the proper person or by any other form of notice (including electronic notice) approved by the Board together with payment in full as specified in Section 5(f) for the number of shares for which the Option is exercised.

 

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(f) Payment Upon Exercise. Common Stock purchased upon the exercise of an Option granted under the Plan shall be paid for as follows:

 

(1) in cash or by check, payable to the order of the Company;

 

(2) except as the Board may, in its sole discretion, otherwise provide in an option agreement, by (i) delivery of an irrevocable and unconditional undertaking by a creditworthy broker to deliver promptly to the Company sufficient funds to pay the exercise price and any required tax withholding or (ii) delivery by the Participant to the Company of a copy of irrevocable and unconditional instructions to a creditworthy broker to deliver promptly to the Company cash or a check sufficient to pay the exercise price and any required tax withholding;

 

(3) if the Common Stock is registered under the Securities Exchange Act of 1934 (the “Exchange Act”), by delivery of shares of Common Stock owned by the Participant valued at their fair market value as determined by (or in a manner approved by) the Board in good faith (“Fair Market Value”), provided (i) such method of payment is then permitted under applicable law and (ii) such Common Stock, if acquired directly from the Company was owned by the Participant at least six months prior to such delivery;

 

(4) to the extent permitted by the Board, in its sole discretion by (i) delivery of a promissory note of the Participant to the Company on terms determined by the Board, or (ii) payment of such other lawful consideration as the Board may determine; or

 

(5) by any combination of the above permitted forms of payment.

 

(g) Substitute Options. In connection with a merger or consolidation of an entity with the Company or the acquisition by the Company of property or stock of an entity, the Board may grant Options in substitution for any options or other stock or stock-based awards granted by such entity or an affiliate thereof. Substitute Options may be granted on such terms as the Board deems appropriate in the circumstances, notwithstanding any limitations on Options contained in the other sections of this Section 5 or in Section 2.

 

6. Restricted Stock.

 

(a) Grants. The Board may grant Awards entitling recipients to acquire shares of Common Stock, subject to the right of the Company to repurchase all or part of such shares at their issue price or other stated or formula price (or to require forfeiture of such shares if issued at no cost) from the recipient in the event that conditions specified by the Board in the applicable Award are not satisfied prior to the end of the applicable restriction period or periods established by the Board for such Award (each, a “Restricted Stock Award”).

 

(b) Terms and Conditions. The Board shall determine the terms and conditions of any such Restricted Stock Award, including the conditions for repurchase (or forfeiture) and the issue price, if any.

 

(c) Stock Certificates. Any stock certificates issued in respect of a Restricted Stock Award shall be registered in the name of the Participant and, unless otherwise determined by the Board, deposited by the Participant, together with a stock power endorsed in blank, with the Company (or its designee). At the expiration of the applicable restriction periods, the Company (or such designee) shall deliver the certificates no longer subject to such restrictions to the Participant or if the Participant has died, to the beneficiary designated, in a manner determined by the Board, by a Participant to receive amounts due or exercise rights of the Participant in the event of the Participant’s death (the “Designated Beneficiary”). In the absence of an effective designation by a Participant, Designated Beneficiary shall mean the Participant’s estate.

 

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7. Adjustments for Changes in Common Stock and Certain Other Events

 

(a) Changes in Capitalization. In the event of any stock split, reverse stock split, stock dividend, recapitalization, combination of shares, reclassification of shares, spin-off or other similar change in capitalization or event, or any distribution to holders of Common Stock other than a normal cash dividend, (i) the number and class of securities available under this Plan, (ii) the per-Participant limit set forth in Section 4(b), (iii) the number and class of securities and exercise price per share subject to each outstanding Option, and (iv) the repurchase price per share subject to each outstanding Restricted Stock Award shall be appropriately adjusted or substituted Awards may be made, if applicable). The Board may make any determinations with respect to the effect of any such adjustment, which determinations shall be final, binding and conclusive. If this Section 7(a) applies and Section 7(c) also applies to any event, Section 7(c) shall be applicable to such event, and this Section 7(a) shall not be applicable.

 

(b) Liquidation or Dissolution. In the event of a proposed liquidation or dissolution of the Company, the Board shall upon written notice to the Participants provide that all then unexercised Options will (i) become exercisable in full as of a specified time at least 10 business days prior to the effective date of such liquidation or dissolution and (ii) terminate effective upon such liquidation or dissolution, except to the extent exercised before such effective date. The Board may specify the effect of a liquidation or dissolution on any Restricted Stock Award or other Award granted under the Plan at the time of the grant of such Award.

 

(c) Reorganization and Change in Control Events.

 

  (1) Definitions

 

  (a) A “Reorganization Event” shall mean:

 

  (i) any merger or consolidation of the Company with or into another entity as a result of which the Common Stock is converted into or exchanged for the right to receive cash, securities or other property; or

 

  (ii) any exchange of shares of the Company for cash, securities or other property pursuant to a share exchange transaction.

 

  (b) A “Change in Control Event” shall mean:

 

  (i) the acquisition by an individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a “Person”) of beneficial ownership of any capital stock of the Company if, after such acquisition, such Person beneficially owns (within the meaning of Rule 13d-3 promulgated under the Exchange Act) 50% or more of either (x) the then-outstanding shares of common stock of the Company (the “Outstanding Company Common Stock”) or (y) the combined voting power of the then-outstanding securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); provided, however, that for purposes of this subsection (i), the following acquisitions shall not constitute a Change in Control Event: (A) any acquisition directly from the Company (excluding an acquisition pursuant to the exercise, conversion or exchange of any security exercisable for, convertible into or exchangeable for common stock or voting securities of the Company, unless the Person exercising, converting or exchanging such security acquired such security directly from the Company or an underwriter or agent of the Company), (B) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any

 

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corporation controlled by the Company, or (C) any acquisition by any corporation pursuant to a Business Combination (as defined below) which complies with clauses (x) and (y) of subsection (iii) of this definition; or

 

  (ii) such time as the Continuing Directors (as defined below) do not constitute a majority of the Board (or, if applicable, the Board of Directors of a successor corporation to the Company), where the term “Continuing Director” means at any date a member of the Board (x) who was a member of the Board on the date of the initial adoption of this Plan by the Board or (y) who was nominated or elected subsequent to such date by at least a majority of the directors who were Continuing Directors at the time of such nomination or election or whose election to the Board was recommended or endorsed by at least a majority of the directors who were Continuing Directors at the time of such nomination or election; provided, however, that there shall be excluded from this clause (y) any individual whose initial assumption of office occurred as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents, by or on behalf of a person other than the Board; or

 

  (iii) the consummation of a merger, consolidation, reorganization, recapitalization or share exchange involving the Company or a sale or other disposition of all or substantially all of the assets of the Company (a “Business Combination”), unless, immediately following such Business Combination, each of the following two conditions is satisfied: (x) all or substantially all of the individuals and entities who were the beneficial owners of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of the then-outstanding shares of common stock and the combined voting power of the then-outstanding securities entitled to vote generally in the election of directors, respectively, of the resulting or acquiring corporation in such Business Combination (which shall include, without limitation, a corporation which as a result of such transaction owns the Company or substantially all of the Company’s assets either directly or through one or more subsidiaries) (such resulting or acquiring corporation is referred to herein as the “Acquiring Corporation”) in substantially the same proportions as their ownership of the Outstanding Company Common Stock and Outstanding Company Voting Securities, respectively, immediately prior to such Business Combination and (y) no Person (excluding the Acquiring Corporation or any employee benefit plan (or related trust) maintained or sponsored by the Company or by the Acquiring Corporation) beneficially owns, directly or indirectly, 50% or more of the then-outstanding shares of common stock of the Acquiring Corporation, or of the combined voting power of the then-outstanding securities of such corporation entitled to vote generally in the election of directors (except to the extent that such ownership existed prior to the Business Combination).

 

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  (2) Effect on Options

 

  (a) Reorganization Event. Upon the occurrence of a Reorganization Event (regardless of whether such event also constitutes a Change in Control Event), or the execution by the Company of any agreement with respect to a Reorganization Event (regardless of whether such event will result in a Change in Control Event), the Board shall provide that all outstanding Options shall be assumed, or equivalent options shall be substituted, by the acquiring or succeeding corporation (or an affiliate thereof); provided that if such Reorganization Event also constitutes a Change in Control Event, except to the extent specifically provided to the contrary in the instrument evidencing any Option or any other agreement between a Participant and the Company one-quarter (25%) of the number of shares subject to the Option which were not already vested shall be vested upon the occurrence of such Reorganization Event and the remaining three-quarters of such number of shares shall continue to become vested in accordance with the original vesting schedule set forth in such option, with three-quarters of the number of shares that would otherwise have become vested on each subsequent vesting date in accordance with the original schedule becoming vested on each subsequent vesting date. For purposes hereof, an Option shall be considered to be assumed if, following consummation of the Reorganization Event, the Option confers the right to purchase, for each share of Common Stock subject to the Option immediately prior to the consummation of the Reorganization Event, the consideration (whether cash, securities or other property) received as a result of the Reorganization Event by holders of Common Stock for each share of Common Stock held immediately prior to the consummation of the Reorganization Event (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding shares of Common Stock); provided, however, that if the consideration received as a result of the Reorganization Event is not solely common stock of the acquiring or succeeding corporation (or an affiliate thereof), the Company may, with the consent of the acquiring or succeeding corporation, provide for the consideration to be received upon the exercise of Options to consist solely of common stock of the acquiring or succeeding corporation (or an affiliate thereof) equivalent in fair market value to the per share consideration received by holders of outstanding shares of Common Stock as a result of the Reorganization Event.

 

Notwithstanding the foregoing, if the acquiring or succeeding corporation (or an affiliate thereof) does not agree to assume, or substitute for, such Options, then the Board shall, upon written notice to the Participants, provide that all Options will become exercisable in full as of a specified time prior to the Reorganization Event and will terminate immediately prior to the consummation of such Reorganization Event, except to the extent exercised by the Participants before the consummation of such Reorganization Event; provided, however, that in the event of a Reorganization Event under the terms of which holders of Common Stock will receive upon consummation thereof a cash payment for each share of Common Stock surrendered pursuant to such Reorganization Event (the “Acquisition Price”), then the Board may instead provide that all outstanding Options shall terminate upon consummation of such Reorganization Event and that each Participant shall receive, in exchange therefor, a cash payment equal to the amount (if any) by which (A) the Acquisition Price multiplied by the number of shares of Common Stock subject to such outstanding Options (whether or not then exercisable), exceeds (B) the aggregate exercise price of such Options. To the extent all or any portion of an Option becomes exercisable solely as a result of the first sentence of this paragraph, upon exercise of such Option the Participant shall receive shares

 

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subject to a right of repurchase by the Company or its successor at the Option exercise price. Such repurchase right (1) shall lapse at the same rate as the Option would have become exercisable under its terms and (2) shall not apply to any shares subject to the Option that were exercisable under its terms without regard to the first sentence of this paragraph.

 

  (b) Change in Control Event that is not a Reorganization Event. Upon the occurrence of a Change in Control Event that does not also constitute a Reorganization Event, except to the extent specifically provided to the contrary in the instrument evidencing any Option or any other agreement between a Participant and the Company, the vesting schedule of such Option shall be accelerated in part so that one-quarter (25%) of the number of shares that would otherwise have first become vested on any date after the date of the Change in Control Event shall immediately become vested. The remaining three-quarters of such number of shares shall continue to become vested in accordance with the original vesting schedule set forth in such Option, with three-quarters of the number of shares that would otherwise have become vested on each subsequent vesting date in accordance with the original schedule becoming vested on each such subsequent vesting date.

 

  (3) Effect on Restricted Stock Awards

 

  (a) Reorganization Event that is not a Change in Control Event. Upon the occurrence of a Reorganization Event that is not a Change in Control Event, the repurchase and other rights of the Company under each outstanding Restricted Stock Award shall inure to the benefit of the Company’s successor and shall apply to the cash, securities or other property which the Common Stock was converted into or exchanged for pursuant to such Reorganization Event in the same manner and to the same extent as they applied to the Common Stock subject to such Restricted Stock Award.

 

  (b) Change in Control Event. Upon the occurrence of a Change in Control Event (regardless of whether such event also constitutes a Reorganization Event), except to the extent specifically provided to the contrary in the instrument evidencing any Restricted Stock Award or any other agreement between a Participant and the Company, the vesting schedule of all Restricted Stock Awards shall be accelerated in part so that one-quarter of the number of shares that would otherwise have first become free from conditions or restrictions on any date after the date of the Change in Control Event shall immediately become free from conditions or restrictions. Subject to the following sentence, the remaining three-quarters of such number of shares shall continue to become free from conditions or restrictions in accordance with the original schedule set forth in such Restricted Stock Award, with three-quarters of the number of shares that would otherwise have become free from conditions or restrictions on each subsequent vesting date in accordance with the original schedule becoming free from conditions or restrictions on each subsequent vesting date.

 

(4) Limitations. Notwithstanding the foregoing provisions of this Section 7(c), if the Change in Control Event is intended to be accounted for as a “pooling of interests” for financial accounting purposes, and if the acceleration to be effected by the foregoing provisions of this Section 7(c) would preclude accounting for the Change in Control Event as a “pooling of interests” for financial accounting purposes, then no such acceleration shall occur upon the Change in Control Event.

 

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8. General Provisions Applicable to Awards

 

(a) Transferability of Awards. Except as the Board may otherwise determine or provide in an Award, Awards shall not be sold, assigned, transferred, pledged or otherwise encumbered by the person to whom they are granted, either voluntarily or by operation of law, except by will or the laws of descent and distribution, and, during the life of the Participant, shall be exercisable only by the Participant. References to a Participant, to the extent relevant in the context, shall include references to authorized transferees.

 

(b) Documentation. Each Award shall be evidenced in such form (written, electronic or otherwise) as the Board shall determine. Each Award may contain terms and conditions in addition to those set forth in the Plan.

 

(c) Board Discretion. Except as otherwise provided by the Plan, each Award may be made alone or in addition or in relation to any other Award. The terms of each Award need not be identical, and the Board need not treat Participants uniformly.

 

(d) Termination of Status. The Board shall determine the effect on an Award of the disability, death, retirement, authorized leave of absence or other change in the employment or other status of a Participant and the extent to which, and the period during which, the Participant, the Participant’s legal representative, conservator, guardian or Designated Beneficiary may exercise rights under the Award.

 

(e) Withholding. Each Participant shall pay to the Company, or make provision satisfactory to the Board for payment of, any taxes required by law to be withheld in connection with Awards to such Participant no later than the date of the event creating the tax liability. Except as the Board may otherwise provide in an Award, if the Common Stock is registered under the Exchange Act, Participants may satisfy such tax obligations in whole or in part by delivery of shares of Common Stock, including shares retained from the Award creating the tax obligation, valued at their Fair Market Value; provided, however, that the total tax withholding where stock is being used to satisfy such tax obligations cannot exceed the Company’s minimum statutory withholding obligations (based on minimum statutory withholding rates for federal and state tax purposes, including payroll taxes, that are applicable to such supplemental taxable income). The Company may, to the extent permitted by law, deduct any such tax obligations from any payment of any kind otherwise due to a Participant.

 

(f) Amendment of Award. The Board may amend, modify or terminate any outstanding Award, including but not limited to, substituting therefor another Award of the same or a different type, changing the date of exercise or realization, and converting an Incentive Stock Option to a Nonstatutory Stock Option, provided that the Participant’s consent to such action shall be required unless the Board determines that the action, taking into account any related action, would not materially and adversely affect the Participant.

 

(g) Conditions on Delivery of Stock. The Company will not be obligated to deliver any shares of Common Stock pursuant to the Plan or to remove restrictions from shares previously delivered under the Plan until (i) all conditions of the Award have been met or removed to the satisfaction of the Company, (ii) in the opinion of the Company’s counsel, all other legal matters in connection with the issuance and delivery of such shares have been satisfied, including any applicable securities laws and any applicable stock exchange or stock market rules and regulations, and (iii) the Participant has executed and delivered to the Company such representations or agreements as the Company may consider appropriate to satisfy the requirements of any applicable laws, rules or regulations.

 

(h) Acceleration. The Board may at any time provide that any Award shall become immediately exercisable in full or in part, free of some or all restrictions or conditions, or otherwise realizable in full or in part, as the case may be.

 

9. Miscellaneous

 

(a) No Right To Employment or Other Status. No person shall have any claim or right to be granted an Award, and the grant of an Award shall not be construed as giving a Participant the right to continued employment or any other relationship with the Company. The Company expressly reserves the right at any time to dismiss or otherwise terminate its relationship with a Participant free from any liability or claim under the Plan, except as expressly provided in the applicable Award.

 

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(b) No Rights As Stockholder. Subject to the provisions of the applicable Award, no Participant or Designated Beneficiary shall have any rights as a stockholder with respect to any shares of Common Stock to be distributed with respect to an Award until becoming the record holder of such shares. Notwithstanding the foregoing, in the event the Company effects a split of the Common Stock by means of a stock dividend and the exercise price of and the number of shares subject to such Option are adjusted as of the date of the distribution of the dividend (rather than as of the record date for such dividend), then an optionee who exercises an Option between the record date and the distribution date for such stock dividend shall be entitled to receive, on the distribution date, the stock dividend with respect to the shares of Common Stock acquired upon such Option exercise, notwithstanding the fact that such shares were not outstanding as of the close of business on the record date for such stock dividend.

 

(c) Effective Date and Term of Plan. The Plan shall become effective on the date on which it is adopted by the Board, but no Award granted to a Participant that is intended to comply with Section 162(m) shall become exercisable, vested or realizable, as applicable to such Award, unless and until the Plan has been approved by the Company’s stockholders to the extent stockholder approval is required by Section 162(m) in the manner required under Section 162(m) (including the vote required under Section 162(m)). No Awards shall be granted under the Plan after the completion of ten years from the earlier of (i) the date on which the Plan was adopted by the Board or (ii) the date the Plan was approved by the Company’s stockholders, but Awards previously granted may extend beyond that date.

 

(d) Amendment of Plan. The Board may amend, suspend or terminate the Plan or any portion thereof at any time, provided that to the extent required by Section 162(m), no Award granted to a Participant that is intended to comply with Section 162(m) after the date of such amendment shall become exercisable, realizable or vested, as applicable to such Award, unless and until such amendment shall have been approved by the Company’s stockholders as required by Section 162(m) (including the vote required under Section 162(m)).

 

(e) Governing Law. The provisions of the Plan and all Awards made hereunder shall be governed by and interpreted in accordance with the laws of the State of Delaware, without regard to any applicable conflicts of law.

 

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BOTTOMLINE TECHNOLOGIES (de), INC.

 

Stock Option Agreement

Granted Under 2000 Stock Incentive Plan

 

1. Grant of Option.

 

This agreement evidences the grant by Bottomline Technologies (de), Inc., a Delaware corporation (the “Company”), on                      (the “Grant Date”) to                      , an employee of the Company (the “Participant”), of an option to purchase, in whole or in part, on the terms provided herein and in the Company’s 2000 Stock Incentive Plan (the “Plan”), a total of                      shares (the “Shares”) of common stock, $.001 par value per share, of the Company (“Common Stock”) at $                     per share. Unless earlier terminated, this option shall expire on                      (the “Final Exercise Date”).

 

It is intended that the option evidenced by this agreement (or a portion thereof, as identified in the accompanying “Notice of Grant of Stock Option Agreement”) shall be an incentive stock option as defined in Section 422 of the Internal Revenue Code of 1986, as amended and any regulations promulgated thereunder (the “Code”). Except as otherwise indicated by the context, the term “Participant”, as used in this option, shall be deemed to include any person who acquires the right to exercise this option validly under its terms.

 

2. Vesting Schedule.

 

This option will become exercisable (“vest”)                     .

 

The right of exercise shall be cumulative so that to the extent the option is not exercised in any period to the maximum extent permissible it shall continue to be exercisable, in whole or in part, with respect to all shares for which it is vested until the earlier of the Final Exercise Date or the termination of this option under Section 3 hereof or the Plan.

 

3. Exercise of Option.

 

(a) Form of Exercise. Each election to exercise this option shall be made using the enclosed exercise notice or a similar form provided by the Company, which shall be completed and signed by the Participant, and received by the Company at its principal office, accompanied by this agreement, and payment in full in the manner provided in the Plan. The Participant may purchase less than the number of shares covered hereby, provided that no partial exercise of this option may be for any fractional share or for fewer than ten whole shares.

 

(b) Continuous Relationship with the Company Required. Except as otherwise provided in this Section 3, this option may not be exercised unless the Participant, at the time he or she exercises this option, is, and has been at all times since the Grant Date, an employee, officer or director of, or consultant or advisor to, the Company or any parent or subsidiary of the Company as defined in Section 424(e) or (f) of the Code (an “Eligible Participant”).

 

(c) Termination of Relationship with the Company. If the Participant ceases to be an Eligible Participant for any reason, then, except as provided in paragraphs (d) and (e) below, the right to exercise this option shall terminate three months after such cessation (but in no event after the Final Exercise Date), provided that this option shall be exercisable only to the extent that the Participant was entitled to exercise this option on the date of such cessation.

 

(d) Exercise Period Upon Death or Disability. If the Participant dies or becomes disabled such that the Participant is qualified for long-term disability by the Company’s then Long-Term Disability insurance provider prior to the Final Exercise Date while he or she is an Eligible Participant, this option shall become exercisable in full on the termination date of the Participant. There shall be a period of two years following the date of termination to exercise this option, provided that this option shall not be exercisable after the Final Exercise Date.

 

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(e) Discharge for Cause. If the Participant, prior to the Final Exercise Date, is discharged by the Company for “cause” (as defined below), the right to exercise this option shall terminate immediately upon the effective date of such discharge. “Cause” shall mean willful misconduct by the Participant or willful failure by the Participant to perform, in any material respect, his or her responsibilities to the Company, including, without limitation, breach of any non-disclosure or non-competition obligations.

 

4. Withholding.

 

No Shares will be issued pursuant to the exercise of this option unless and until the Participant pays to the Company, or makes provision satisfactory to the Company for payment of, any federal, state or local withholding taxes required by law to be withheld in respect of this option.

 

5. Nontransferability of Option.

 

This option may not be sold, assigned, transferred, pledged or otherwise encumbered by the Participant, either voluntarily or by operation of law, except by will or the laws of descent and distribution, and, during the lifetime of the Participant, this option shall be exercisable only by the Participant.

 

6. Disqualifying Disposition.

 

If the Participant disposes of Shares acquired upon exercise of this option within two years from the Grant Date or one year after such Shares were acquired pursuant to exercise of this option, the Participant shall notify the Company in writing of such disposition.

 

7. Provisions of the Plan.

 

This option is subject to the provisions of the Plan, a copy of which is furnished to the Participant with this option.

 

IN WITNESS WHEREOF, the Company has caused this option to be executed under its corporate seal by its duly authorized officer. This option shall take effect as a sealed instrument.

 

    BOTTOMLINE TECHNOLOGIES (de), INC.

Date:                     

  

By:

  

 

   

Name:

  

Joseph L. Mullen

   

Title:

  

Chief Executive Officer

 

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BOTTOMLINE TECHNOLOGIES (de), INC.

 

Incentive Stock Option Agreement

Granted Under 2000 Stock Incentive Plan

 

1. Grant of Option.

 

This agreement evidences the grant by Bottomline Technologies (de), Inc., a Delaware corporation (the “Company”), on «Grant_Date» (the “Grant Date”) to «First_Name» «Middle_Name» «Last_Name» an employee of the Company (the “Participant”), of an option to purchase, in whole or in part, on the terms provided herein and in the Company’s 2000 Stock Incentive Plan (the “Plan”), a total of «No_of_Shares» shares (the “Shares”) of common stock, $.001 par value per share, of the Company (“Common Stock”) at «Grant_Price» per Share. Unless earlier terminated, this option shall expire on «Expiration_Date» (the “Final Exercise Date”).

 

2. Vesting Schedule.

 

This option will become exercisable (“vest”)                                 .

 

The right of exercise shall be cumulative so that to the extent the option is not exercised in any period to the maximum extent permissible it shall continue to be exercisable, in whole or in part, with respect to all shares for which it is vested until the earlier of the Final Exercise Date or the termination of this option under Section 3 hereof or the Plan.

 

3. Exercise of Option.

 

(a) Form of Exercise. Each election to exercise this option shall be made using the enclosed exercise form or a similar form provided by the Company, which shall be completed and signed by the Participant, and received by the Company at its principal office, accompanied by this agreement, and payment in full in the manner provided in the Plan. The Participant may purchase less than the number of shares covered hereby, provided that no partial exercise of this option may be for any fractional share or for fewer than ten whole shares.

 

(b) Continuous Relationship with the Company Required. Except as otherwise provided in this Section 3, this option may not be exercised unless the Participant, at the time he or she exercises this option, is, and has been at all times since the Grant Date, an employee, officer or director of, or consultant or advisor to, the Company or any parent or subsidiary of the Company as defined in Section 424(e) or (f) of the United States Internal Revenue Code of 1986 (an “Eligible Participant”).

 

(c) Termination of Relationship with the Company. If the Participant ceases to be an Eligible Participant for any reason, then, except as provided in paragraphs (d) and (e) below, the right to exercise this option shall terminate three months after such cessation (but in no event after the Final Exercise Date), provided that this option shall be exercisable only to the extent that the Participant was entitled to exercise this option on the date of such cessation.

 

(d) Exercise Period Upon Death or Disability. If the Participant dies or becomes disabled such that the Participant is qualified for long-term disability by the Company’s then Long-Term Disability insurance provider prior to the Final Exercise Date while he or she is an Eligible Participant, this option shall become exercisable in full on the termination date of the Participant. There shall be a period of two years following the date of termination to exercise this option, provided that this option shall not be exercisable after the Final Exercise Date.

 

(e) Discharge for Cause. If the Participant, prior to the Final Exercise Date, is discharged by the Company for “cause” (as defined below), the right to exercise this option shall terminate immediately upon the effective date of such discharge. “Cause” shall mean willful misconduct by the Participant or willful failure by the Participant to perform, in any material respect, his or her responsibilities to the Company, including, without limitation, breach of any non-disclosure or non-competition obligations.

 

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4. Withholding.

 

(a) The grant of this Option is subject to the Optionee entering into an Election with the Company or any Affiliate in the form attached to this Agreement marked Attachment A. In the event that the Optionee fails to enter into the Election as required by the terms of this Agreement, by signing and returning Attachment A to the Company within a period of 28 days of the date of receipt of this Agreement, this Option shall terminate and shall thereupon become null and void.

 

(b) The Company and any other company from time to time employing a Participant, or any one or more of them, (in either case, the “Relevant Person”) shall have the right, prior to the delivery of the Option Shares otherwise deliverable to a Participant pursuant to the exercise of an Option, (a) to require the Participant to remit to or at the direction of the Relevant Person an amount sufficient to satisfy all United Kingdom and/or other taxes or other amounts required to be withheld or accounted for by the Relevant Person (including employees’ social security contributions or any employers’ social security contributions for which the Participant is liable) in connection with the grant, holding and/or exercise of the Option, (b) to reduce the number of Shares otherwise deliverable to the Participant by an amount equal in value to the amount of all such taxes required to be so withheld or accounted for, or (c) to deduct the amount of such taxes from cash payments otherwise to be made to the Participant. The Board may make such arrangements and determinations in this regard, consistent with the Plan, as it may in its absolute discretion consider to be appropriate.

 

5. Nontransferability of Option.

 

This option may not be sold, assigned, transferred, pledged or otherwise encumbered by the Participant, either voluntarily or by operation of law, except by will or the laws of descent and distribution, and, during the lifetime of the Participant, this option shall be exercisable only by the Participant.

 

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6. Disqualifying Disposition.

 

If the Participant disposes of Shares acquired upon exercise of this option within two years from the Grant Date or one year after such Shares were acquired pursuant to exercise of this option, the Participant shall notify the Company in writing of such disposition.

 

7. Provisions of the Plan.

 

This option is subject to the provisions of the Plan, a copy of which is furnished to the Participant with this option.

 

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Attachment A

 

Joint election to transfer the National Insurance Liability

 

Employees of Bottomline Technologies Europe Limited

 

Introduction

 

As an employee of Bottomline Technologies Europe Limited (the “Company”), you are eligible to participate in both the Bottomline Technologies (de) Inc Stock Amended & Restated 1997 Plan and the 2000 Stock Incentive Plan (the “Plans”). Any options, which are granted to you under these Plans, are subject to income tax and employees National Insurance Contributions when you exercise them and purchase shares. In addition, the Company is currently liable to pay employer’s National Insurance (by virtue of section 4(4)(a) of the Social Security Contributions and Benefits Act 1992 (the “Secondary Contribution”)), on any gains, which you make when you exercise, assign or release your options under the Plan.

 

The grant of all options will be subject to you agreeing to jointly enter into an agreement whereby you agree to accept liability for these secondary contributions. Accordingly, and by signing the declaration contained in this agreement, you agree that when you exercise, assign or release your options you will be liable to pay the whole of any Secondary Contribution, which is due on any gain, which you make.

 

The terms of this agreement shall be subject to the approval of the Board of Inland Revenue.

 

The Terms of the Agreement

 

This agreement relates to the following options (the “Option(s)”): -

 

Number of Shares Subject to Option

  

Grant Date

  

Option Exercise Price

«No_of_Shares»   «Grant_Date»   «Grant_Price»

 

1. You will accept liability for the whole of the Secondary Contribution which is payable under section 4(4)(a) of the Social Security Contributions and Benefits Act 1992.

 

2. The Secondary Contribution will be paid to the Company, or Bottomline Technologies (de) Inc., within 7 days from the end of the income tax month (beginning on the 6th of the calendar month and ending on the 5th of the calendar month) in which the exercise, assignment or release of the Option occurs.

 

3. In respect of the exercise of the Option, the Secondary Contribution will be collected by you authorizing the Bottomline designated stockbroker to sell sufficient stock to cover the amount of income tax and social charges, including Secondary Contributions, from the sales proceeds for which you are liable in connection with the exercise, assignment or release of the Options, or if requested by you in writing and agreed in advance with the Company by:

 

  (a) deduction from your salary or any other money which may be due to you; or

 

  (b) you providing the Company with cleared funds by cheque, bank transfer or by any other method that you and the Company agree to be appropriate at the relevant time.

 

Payment of the Secondary Contribution as described in Paragraph 3(a) or 3(b) above be made within the deadline specified in Paragraph 2 above.

 

4. Following the exercise of the Option, stock certificates will only be issued to you once the Secondary Contribution has been paid in full.

 

5. This joint election shall continue in full force and effect in the event that you leave the Company or seconded abroad.

 

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6. Following the provision of your authority to the stockbroker and receipt of sales proceeds upon the exercise, assignment or release of the Option, income tax and Secondary Contribution will be deducted from the amount receivable by you from the Bottomline designated stockbroker and the net amount will be paid to you accordingly.

 

7. Where payment is due from the Company or Bottomline Technologies (de) Inc. for assignment or release of the share options, you authorise a deduction of the Secondary Contribution sufficient to cover the liability from such payment. Where any agreement is made between you and a third party for the assignment or release of the Option, and payment is to be made from a third party, you authorise the third party to withhold an amount sufficient to cover the Secondary Contribution due from the payment and such amount will be paid to the Company within 7 days following the assignment or release of the Option.

 

8. This agreement shall cease to have affected in the event that: -

 

  (i) the Options lapse or are otherwise not capable of being exercised;

 

  (ii) it is revoked jointly by both parties;

 

  (iii) the Company gives you notice that the agreement shall terminate;

 

  (iv) the Board of Inland Revenue serves notice upon the Company that approval for the agreement has been withdrawn.

 

Declaration

 

I hereby agree to be bound by the terms detailed in paragraphs 1 to 8 of this agreement and in particular acknowledge that by signing this agreement, I am consenting to: -

 

1. accept liability for and to pay the whole of any Secondary Contributions which may be payable upon the exercise, assignment or release of the Options; and

 

2. the Company deducting some or all of the Secondary Contribution from my salary or other payment due to me.

 

         

«First_Name» «Middle_Name» «Last_Name»

         

Date

 

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Declaration

 

The Company hereby agrees to be bound by the terms detailed in paragraphs 1 to 8 of this agreement and in particular acknowledges that by signing this agreement, it is consenting to: -

 

  1. ensure that proper procedures are in place to collect any Secondary Contributions which may be payable upon the exercise, assignment or release of the Options; and

 

  2. the Company makes payment to the Collector of Taxes by no later than 14 days after the end of the tax month in which the exercise, assignment or release of the option occurred.

 

Signed for and on behalf of Bottomline Technologies (de) Inc, acting as authorized signatory for and on behalf of Bottomline Technologies Europe Limited.

 

          
Joseph L. Mullen           Date

Chief Executive Officer

            

 

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