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x | Definitive Proxy Statement |
¨ | Definitive Additional Materials |
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21, 2019
1. | To elect the |
2. | To hold anon-binding advisory vote to approve executive compensation; |
3. |
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To approve our |
4. | To ratify the selection of Ernst & Young LLP as our registered public accounting firm for the fiscal year ending June 30, |
5. | To transact such other business as may properly come before the annual meeting, including any postponements or adjournments thereof. |
21, 2019.
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October 15, 2018
Portsmouth, New Hampshire
By order of the Board of Directors, | ||||
Joseph L. Mullen | ||||
Chairman of the Board of Directors |
Table of Contents | ||||
Page | ||||
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18, 2019.
21, 2019.
4.
file with the corporate secretary of the company, at or before the taking of the vote, a written notice of revocation bearing a later date than the proxy;
execute a later dated proxy relating to the same shares and deliver it to the corporate secretary of the company before the taking of the vote;
vote again by telephone or internet; or
attend the annual meeting and vote in person. Your attendance at the annual meeting, if you do not vote, will not be sufficient to revoke a proxy.
Shares Beneficially Owned | Options Included in Shares Beneficially Owned | |||||||||||||||
Name and Address of Beneficial Owner | Number | Percent | Number | |||||||||||||
5% Stockholders | ||||||||||||||||
BlackRock, Inc. | 5,273,594 | (1) | 12.4% | — | ||||||||||||
55 East 52nd Street | ||||||||||||||||
New York, NY 10055 | ||||||||||||||||
The Vanguard Group, Inc. | 3,596,028 | (2) | 8.4% | — | ||||||||||||
100 Vanguard Blvd. | ||||||||||||||||
Malvern, PA 19355 | ||||||||||||||||
Executive officers and Directors | ||||||||||||||||
Robert A. Eberle | 424,711 | (3) | 1.0% | — | ||||||||||||
Richard D. Booth | 122,667 | (4) | * | — | ||||||||||||
Norman J. DeLuca | 97,767 | (5) | * | — | ||||||||||||
John F. Kelly | 69,425 | (6) | * | — | ||||||||||||
Nigel K. Savory | 141,801 | (7) | * | — | ||||||||||||
Kenneth J. D’Amato | 15,000 | (8) | * | — | ||||||||||||
Peter Gibson | 21,000 | (8) | * | — | ||||||||||||
Jennifer M. Gray | 13,500 | (8) | * | — | ||||||||||||
Paul H. Hough | 9,000 | (8) | * | — | ||||||||||||
Jeffrey C. Leathe | 9,000 | (8) | * | — | ||||||||||||
Joseph L. Mullen | 69,855 | (8) | * | — | ||||||||||||
Benjamin E. Robinson III | 13,000 | (8) | * | — | ||||||||||||
All executive officers and directors as a group (12 persons) | 1,006,726 | 2.4% | — |
Shares Beneficially Owned | Options Included in Shares Beneficially Owned | ||||||||
Name and Address of Beneficial Owner | Number | Percent | Number | ||||||
5% Stockholders | |||||||||
BlackRock, Inc. | 5,712,147 | (1) | 13.1 | % | — | ||||
55 East 52nd Street | |||||||||
New York, NY 10055 | |||||||||
The Vanguard Group, Inc. | 4,369,979 | (2) | 10.0 | % | — | ||||
100 Vanguard Blvd. | |||||||||
Malvern, PA 19355 | |||||||||
Capital World Investors | 3,735,113 | (3) | 8.5 | % | — | ||||
333 South Hope Street | |||||||||
Los Angeles, CA 90071 | |||||||||
Executive officers and Directors | |||||||||
Robert A. Eberle | 497,681 | (4) | 1.1 | % | — | ||||
Richard D. Booth | 120,705 | (5) | * | — | |||||
Norman J. DeLuca | 87,638 | (6) | * | — | |||||
John F. Kelly | 65,340 | (7) | * | — | |||||
Nigel K. Savory | 177,375 | (8) | * | — | |||||
Kenneth J. D'Amato | 20,000 | (9) | * | — | |||||
Peter Gibson | 26,000 | (9) | * | — | |||||
Jennifer M. Gray | 16,500 | (9) | * | — | |||||
Paul H. Hough | 14,000 | (9) | * | — | |||||
Jeffrey C. Leathe | 14,000 | (9) | * | — | |||||
Joseph L. Mullen | 74,855 | (9) | * | — | |||||
Benjamin E. Robinson III | 15,500 | (9) | * | — | |||||
All executive officers and directors as a group (12 persons) | 1,129,594 | 2.6 | % | — |
* | Represents less than 1% of the outstanding shares of common stock. |
(1) | These shares are held by subsidiaries of BlackRock, Inc. BlackRock, Inc. has sole voting power over |
(2) | The Vanguard Group, Inc. has sole voting power over |
(3) | Capital World Investors, a division of Capital Research and Management Company, has sole voting power and sole dispositive power over all 3,735,113 shares. Capital World Investors divisions of Capital Research and Management Company and Capital International Limited collectively provide investment management services under the name Capital World Investors. Capital World Investors holds common stock of Bottomline on behalf of SMALLCAP World Fund, Inc. This information is based on the Schedule 13G filed by Capital World Investors on February 14, 2019. |
(4) | Includes prior awards of restricted stock, of which |
(5) | Includes prior awards of restricted stock, of which |
(6) | Includes prior awards of restricted stock, of which |
(7) | Includes prior awards of restricted stock, of which |
(8) | Includes prior awards of restricted stock, of which |
(9) | Includes prior awards of restricted stock, of which 5,000 shares were unvested as of August 31, |
Name Robert A. Eberle Kenneth J. D’Amato Jeffrey C. Leathe Peter Gibson Joseph L. Mullen Jennifer M. Gray Paul H. Hough Benjamin E. Robinson III Member of leadership development and compensation committee. Member of nominations and corporate governance committee. Member of audit committee.IIIII DIRECTORSPeter GibsonPaul H. Hough, and Mr. Joseph L. MullenBenjamin E. Robinson III are currently serving as Class IIIII directors. The Class IIIII directors elected this year will serve as members of our Board of Directors until the 20212022 annual meeting of stockholders and until their respective successors are elected and qualified. Proxies cannot be voted cumulatively.nominateshas nominated, Ms. Gray, Mr. GibsonHough, and Mr. MullenRobinson III forre-election as directors. The persons named in the enclosed proxy will vote tore-elect Ms. Gray, Mr. GibsonHough, and Mr. MullenRobinson III as Class IIIII directors unless the proxy is marked otherwise. Ms. Gray, Mr. GibsonHough, and Mr. MullenRobinson III have indicated their willingness to serve on our Board of Directors, if elected; however, if any nominee should be unable to serve, the person acting under the proxy may vote the proxy for a substitute nominee designated by our Board of Directors. Our Board of Directors has no reason to believe that Ms. Gray, Mr. GibsonHough, and Mr. MullenRobinson III would be unable to serve if elected.IIIII director nominees and directors whose terms will continue after the annual meeting. The information presented includes their years of service as a director as well as information each director has given us about his or her age, all positions he or she holds at the company, principal occupation and business experience for at least the last five years and names of other publicly-held companies of which he or she currently serves as a director. In addition to the information presented below in respect of each director’s specific experience, qualifications and skills that lead the Board to the conclusion that he or she should serve as a director, we also believe that each director has a reputation for integrity, honesty and high ethical standards. Class I directors (terms expiring in 2020) Mr. Eberle, age 57,58, has served as a director since 2000 and has served as our Chief Executive Officer since November 2006 and our President since August 2004.2006. Mr. Eberle served as our Chief Operating Officer from April 2001 to November 2006 and as our Chief Financial Officer from September 1998 to August 2004. He has also held the title of President. Prior to his tenure at Bottomline, Mr. Eberle served as Executive Vice President of Telxon Corporation, a mobile computing and wireless data company. In addition, Mr. Eberle has served on the boards of a number of technology companies. We believe Mr. Eberle’s qualifications to serve on our Board include his more than two decades of experience in the technology industry, including his current role as our Chief Executive Officer, and his proven performance as our Chief Executive Officer since 2006. Mr. D’Amato, age 57,58, has served as a director since 2014 and lead director since 2015. Mr. D’Amato has been employed with Manulife Asset Management since 2010 and currently serves as Chief Administrative Officer and Senior Managing Director, Global Investments. Previously Mr. D’Amato served as Chief Operating Officer at Evergreen Investment Management Company from 1999 to 2009. From 1998 to 1999, Mr. D’Amato served as Investment Manager at DDJ Capital Management and from 1989 to 1998 held several positions at Hord Crystal Corporation including President, Chief Executive Officer and Board Member, Vice President of Manufacturing and Chief Financial Officer.Mr. D’Amato’s qualifications to serve on our Board include his background as an executive officer in the asset management industry for several firms, his knowledge of capital markets and investment strategies and his general business acumen. Further, given his current position as an officer in an investment firm, we believe Mr. D’Amato brings a particularly focused shareholder perspective to our Board.Board making him well suited to serve as lead director. # * Mr. Leathe, age 62,63, has served as a director since 2005. From 2016 to present, Mr. Leathe has been Chairman of PureHoney Technologies, Inc., a contract research firm involved in drug discovery. From June 2011 to October 2016, Mr. Leathe served as Chairman and Chief Executive Officer of Lantos Technologies, Inc., a medical imaging company. From December 2009 through February 2011, Mr. Leathe served as Chairman and Chief Executive Officer of Biocius Life Sciences, Inc. and from May 2007 to December 2009 served as Senior Vice President and Chief Financial Officer of Biotrove, Inc., companies involved in drug discovery research and clinical diagnostic testing. Since November 2004, Mr. Leathe has served as Principal of Leathe & Associates, LLC, a private financial planning and investment advisory firm, and is a registered investment advisor (RIA). From 1990 to 2003, Mr. Leathe served as Executive Vice President, Chief Financial Officer and Treasurer of Apogent Technologies, a publicly-held manufacturer of healthcare and life sciences research products. Mr. Leathe is also a certified public accountant (CPA). We believe Mr. Leathe’s qualifications to serve on our Board include his business experience as a senior executive officer and 13 years as an executive officer of a public company, including his experience as a principal financial officer of a public company and as a CPA. † *Class II directors to be elected at the annual meeting (terms expiring in 2021, if elected)2021) Mr. Gibson, age 58,59, has served as a director since May 2016. From 2011 to 2018, Mr. Gibson servedas Co-Chief Executive Officer at Knowledgent Group, a data science and analytics consultancy firm focused on financial services, life sciences and healthcare.healthcare, which was acquired by Accenture in January 2019. From 2007 to 2009 Mr. Gibson served as a Vice President at EMC Corporation and from 1999 to 2009 Mr. Gibson servedas Co-President of BusinessEdge Solutions, an IT consultingfirm co-founded by Mr. Gibson and subsequently sold to EMC Corporation, which focused predominantly on the financial services, telecommunications and life sciences industries. Mr. Gibson currently serves on the Board of Trustees of Long Island University. Mr. Gibson’s qualifications to serve on our Board include his experience with data science and data analytics, which are increasingly important focus areas for innovative technology offerings, his experience growing and selling technology firms, his general business acumen and executive experience and his current and prior experience in the technology industry. † # Mr. Mullen, age 66,67, has served as a director since 1996. Mr. Mullen has served as our Chairman since May 2007, and served as our Vice Chairman from November 2006 to May 2007. Mr. Mullen served as our Chief Executive Officer from August 2002 to November 2006. From2006, as our President from September 2000 to August 2004, Mr. Mullen servedand as President of Bottomline, and he served asour Chief Operating Officer from September 2000 to April 2001. From 1977 to 1989, Mr. Mullen held a variety of positions at IBM Corporation. We believe Mr. Mullen’s qualifications to serve on our Board include his experience in the technology industry, particularly his expertise around payments and paymentmethodologies. Further, given Mr. Mullen’s prior executive experience within Bottomline, he has a deep understanding of our company and our operations. Class III directors to be elected at the annual meeting (terms expiring in 2019)2022, if elected) Ms. Gray, age 43,44, has served as a director since 2012. Since 2008, Ms. Gray has served as the Founder and Chief Executive Officer of Market Street Talent, Inc., an information technology staffing and consulting company. Ms. Gray’s qualifications to serve on our Board include her background as an entrepreneur and technology executive, her demonstrated ability to create innovative and successful companies and her extensive experience with technology talent recruitment and retention. † # Mr. Hough, age 59,60, has beenserved as a director since April 2017. Mr. Hough served as Executive Vice President, Deputy Chief Financial Officer at American Express from 2014 to August 2018. Between 2009 and 2014, Mr. Hough served as Executive Vice President, Group Financial Officer, Global Consumer, Small Business, Merchant and Network Businesses and between 2007 and 2009, Mr. Hough served as Executive Vice President, Chief Financial Officer, Business to Business Group at American Express. Prior to 2007, Mr. Hough held several financial and general management positions at American Express. Mr. Hough’s qualifications to serve on our Board include his experience in the payments industry, his extensive financial experience and background and his 34 year career at American Express in a number of senior leadership roles. # Mr. Robinson, age 54,55, has served as a director since May 2016. Since 2016, Mr. Robinson has served as College Chair for the College of Business for Johnson & Wales University, Charlotte. Mr. Robinson served as Senior Vice President, Chief Administration Officer from 2013 to 2015 and as Chief Strategist from 2011 to 2012 at Prudential Annuities. From 2010 to 2011 he served as Chief Strategist at Prudential Group Insurance. From 2002 to 2010 Mr. Robinson held various positions at Bank of America including as Global Planning and Services Executive, Senior Vice President, Debit Strategy Executive, Senior Vice President, Chief Privacy Executive and Senior Vice President, Strategy Management Executive. From 1997 to 2002, Mr. Robinson held a number of executive positions at Mastercard including President and Chief Executive Officer, Mastercard Cardholder Solutions, Chief Privacy Officer and Vice President of Public Affairs. Mr. Robinson is a member of the Executive Leadership Council and the Society of International Business Fellows. Earlier in his career, Mr. Robinson was a Congressional Advisor to the U.S. House of Representatives Committee on Banking, Finance and Urban Affairs. Mr. Robinson was appointed by Federal Reserve Board Chairman Alan Greenspan to serve as a member of the Federal Reserve Board, Consumer Advisory Council from 2003 to 2005, and Ebony Magazine named him one of America's Future Leaders. Mr. Robinson’s qualifications to serve on our Board include his significant senior leadership experience at large, global multi-national companies, and his senior executive experience and his significant accomplishments and recognition in the financial services industry. *† # *
we are acquired through a merger or consolidation which results in the company’s voting shares before the transaction retaining less than 50% of the voting power of the company or the acquiring entity after the transaction;20182019 and as a management director he received no compensation for his services as a director.In February 2018, our Board, upon the recommendation of the leadership development and compensation committee, modified the compensation payable tonon-employee directors by increasing (i) the annual restricted stock award from 4,000 sharescommon stock to 5,000 shares of our common stock and (ii) the annualfees, as set forth below, paid to our lead director andnon-employee directors who serve as a chair or member of the audit committee, leadership development and compensation committee or the nominations and corporate governance committee.Each of ournon-employee directors receives a restricted stock award of 5,000 shares of our common stock upon his or her initial election to the Board and on the date of each annual meeting of stockholders thereafter, provided that he or she is serving as a director of Bottomline at that time. Each of these awards vests in full on the first anniversary of its respective grant date. During fiscal 2018,2019, each of our directors other than Mr. Eberle received a restricted stock award for 5,000 shares of our common stock.EquityFor purposes of this provision,Pursuant to the restricted stock agreement, a change in control is deemed to have occurred if:
we are liquidated; or
2019.
Eachnon-employee director other than Mr. Mullen receives an annual fee of $25,000 payable on the date of our annual meeting of stockholders.
Eachnon-employee director who serves as a member of the audit committee, other than the chairperson of such committee, receives an annual fee of $5,000.
Eachnon-employee director who serves as a member of the leadership development and compensation committee or the nominations and corporate governance committee, other than the chairperson of such committee, receives an annual fee of $2,500.
The chairperson of the audit committee receives an annual fee of $20,000.
The chairperson of the leadership development and compensation committee and the chairperson of the nominations and corporate governance committee each receives an annual fee of $5,000.
Our lead director receives an annual fee of $15,000.
November 19, 2020, a change in control of Bottomline occurs, Mr. Mullen’s restricted stock will fully vest. Mr. Mullen is also eligible to be reimbursed by us for reasonable business expenses and, until he reaches age 70, to participate in our standard U.S. health insurance plan. Name Kenneth J. D’Amato Peter Gibson Jennifer M. Gray Paul H. Hough Jeffrey C. Leathe Joseph L. Mullen Benjamin E. Robinson III As of June 30, 2016"2016 Letter Agreement)Agreement") with Mr. Mullen. The 2016 Letter Agreement extends the term of Mr. Mullen’s prior letter agreement with us for an additional three years, through November 19, 2020.2018.Fiscal 2018 Non-Employee Director Compensation2019. Fees Earned or Paid
in Cash ($) Stock Awards
($) (1) All Other
Compensation ($) Total ($) 50,000 169,430 219,430 30,000 169,430 199,430 32,500 169,430 201,930 25,000 169,430 194,430 47,500 169,430 216,930 115,000 (2 ) 169,430 18,945 (3 ) 303,375 31,500 169,430 200,930 Fiscal 2019 Non-Employee Director Compensation Name Fees Earned or Paid in Cash ($) Stock Awards ($) (1) All Other Compensation ($) Total ($) Kenneth J. D'Amato 50,000 280,650 330,650 Peter Gibson 30,000 280,650 310,650 Jennifer M. Gray 32,500 280,650 313,150 Paul H. Hough 27,500 280,650 308,150 Jeffrey C. Leathe 47,500 280,650 328,150 Joseph L. Mullen 115,000 (2) 280,650 19,306 (3) 414,956 Benjamin E. Robinson III 28,500 280,650 309,150 (1) 2018,2019, each of ournon-employee directors held 5,000 shares of unvested common stock.stock that were granted on November 15, 2018 and that will vest on the first anniversary of the grant date. The amounts reported in this column are computed based on the closing price of our common stock on the date the awards were granted (the grant date fair value). A restricted stock award of 4,000 shares of our common stock which was granted on November 16, 2017 and an award of 1,000 shares of our common stock was granted on February 8, 2018 to each of ournon-employee directors. Each of these awards will vest in full on the first anniversary of their respective grant date.
(2) | Consists of cash compensation paid to Mr. Mullen in his role as Chairman pursuant to the 2016 Letter Agreement. |
(3) | Represents medical and dental insurance premiums paid by the company on behalf of Mr. Mullen. |
enable us to attract, retain and motivate the best possible executive talent by ensuring that our compensation packages are competitive with those offered by similarly situated companies;2018,2019, several discretionaryspecial awards for cash bonuses andof restricted stock were awarded by the leadership development and compensation committee based on their review. These are discussed in the detailed discussion that follows.20182019 named executive officers, Messrs. Eberle, Booth, DeLuca, Kelly and Savory.
align our executive compensation with our corporate strategies and business objectives;
promote the achievement of key strategic and financial performance measures; and
align executives’ incentives with the creation of stockholder value.
base salary;
cash bonuses;
restricted stock awards;
insurance, retirement and other employee benefits; and
severance and change in control benefits.
Name | 2019 Annual Bonus Opportunity | |||
Robert A. Eberle | $ | 477,360 | ||
Richard D. Booth | $ | 200,000 | ||
Nigel K. Savory (1) | $ | 174,690 | ||
Norman J. DeLuca | $ | 200,000 | ||
John F. Kelly | $ | 135,000 |
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(1) | Mr. Savory’s bonus opportunity is in British Pounds Sterling which, for this presentation, was converted to U.S. dollars at the average exchange rate of |
In November 2009,
the committee approved quarterly bonus amounts that were
leadership development and compensation committee.
Name | 2014 Cash Bonus (1) | 2015 Cash Bonus (1) | 2016 Cash Bonus (1) | 2017 Cash Bonus (1) | 2018 Cash Bonus (1) | |||||||||||||||
Robert A. Eberle | $ | 160,350 | $ | 204,500 | $ | 5,000 | $ | 168,000 | $ | 397,300 | ||||||||||
Richard D. Booth (2) | $ | — | $ | 45,000 | $ | 30,000 | $ | 83,000 | $ | 170,000 | ||||||||||
Nigel K. Savory (3) | $ | 152,625 | $ | 135,625 | $ | 65,570 | $ | 70,723 | $ | 154,568 | ||||||||||
Norman J. DeLuca (4) | $ | — | $ | 87,000 | $ | 30,000 | $ | 83,000 | $ | 370,000 | ||||||||||
John F. Kelly (4) | $ | — | $ | 49,000 | $ | 17,500 | $ | 61,500 | $ | 103,500 |
Name | 2015 Cash Bonus (1) | 2016 Cash Bonus (1) | 2017 Cash Bonus (1) | 2018 Cash Bonus (1) | 2019 Cash Bonus (1) | |||||||||||||||
Robert A. Eberle | $ | 204,500 | $ | 5,000 | $ | 168,000 | $ | 397,300 | $ | 90,000 | ||||||||||
Richard D. Booth (2) | $ | 45,000 | $ | 30,000 | $ | 83,000 | $ | 170,000 | $ | 53,000 | ||||||||||
Nigel K. Savory (3) | $ | 135,625 | $ | 65,570 | $ | 70,723 | $ | 154,568 | $ | 96,080 | ||||||||||
Norman J. DeLuca | $ | 87,000 | $ | 30,000 | $ | 83,000 | $ | 370,000 | $ | 53,000 | ||||||||||
John F. Kelly | $ | 49,000 | $ | 17,500 | $ | 61,500 | $ | 103,500 | $ | 36,000 |
(1) | As has occurred in the past, our executives declined certain cash bonus amounts that they would have otherwise earned under our compensation framework in order to make additional funds available to other employees. For fiscal 2019, Mr. Eberle earned a total bonus of $306,852 under his bonus structure but he recommended, and the leadership development and compensation committee approved, bonus payments substantially lower than he had earned in order to allocate funds more broadly to our employee base and to other corporate initiatives. |
(2) | Mr. Booth was appointed Chief Financial Officer and Treasurer on April 29, 2015. |
(3) | Mr. Savory was paid in British Pounds Sterling, which for purposes of this presentation were converted to U.S. Dollars at the average exchange rate for the twelve months ended June 30, |
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executives are approved by the leadership development and compensation committee. Since awards of restricted stock are issued at no cost to the executive, they have abuilt-in value at the time the awards are made. Accordingly, we generally grant fewer shares of restricted stock than the number of stock options or other types of equity awards that might have been issued for a similar purpose, which helps to reduce dilution to our stockholders. To maximize the long-term incentives for our executives and to minimize the dilutive effect on existing stockholders, we consider it likely that future equity awards to our executives will continue to be in the form of restricted stock rather than stock options. the company’s performance;To date,an additionala one year holding period after the vesting date before any sale or transfer of shares that have vested may take place, other than the sale of shares to cover minimum statutory tax obligations in respect of the vesting of such shares. Additionally, any award granted to any individual on or after November 16, 2016 will provide that no part of such award will vest or become exercisable prior to the first anniversary of the date such award is made or granted, except that an award may provide that it may immediately vest (or become immediately exercisable) in whole or in part upon the recipient’s death, disability, termination from the company other than for cause or upon the occurrence of a change in control event. Except in the case of death or disability and certain severance and change in control situations, vesting typically ceases on the date of termination of employment. Other than the ability to sell or transfer the shares prior to vesting, restricted stock awards generally entitle the recipient to full rights as a stockholder at the time of the award; however, consistentaward. Consistent with company policy, holders of unvested restricted shares are not entitled to receive dividends on these shares.
the executive’s individual performance;
the total compensation being paid to the executive;
the executive’s anticipated contributions to Bottomline’s future performance;
the executive’s scope of responsibility;
the executive’s current position with Bottomline;
the number and size of equity awards granted to comparable executive officers by peer group companies; and
in the case of executives other than Mr. Eberle, Mr. Eberle’s recommendations concerning individual performance, role changes and other factors.
2018.
Our year over year sustained operating performance;
The leadership Mr. Eberle had contributed to our business over the past two years, particularly through successfully transitioning our revenue model to a higher content of recurring revenue, providing a strategic plan for continued growth and value creation, ensuring execution against the company’s strategic plans and positioning the business for long term growth and value creation.
Our product strategy and execution against that product strategy, including the steps that Mr. Eberle had taken to increase the capabilities of our technology solutions and product sets to further enhance the competitive position in our target markets.
The responses to ourall-employee survey where the substantial majority of respondents provided very positive scores with respect to our ability to delight customers, our ability to foster relationships with customers such that customers would recommend our products and services to others and our employees’ willingness to recommend our company to a colleague or friend as a place to work.
Financial resultsChief Executive Officer for the first six months of fiscal 2018, including subscription and transaction revenue growth of 15%.
The performance of our stock, which appreciated 38% during the first six months of fiscal 2018.
Based on these factors, the leadership development and compensation committee approved a discretionaryspecial award of restricted stock award of 60,000 shares to Mr. Eberle, with such award to bewhich was granted on July 1, 2018. In May 2018, the leadership development and compensation committee met again and changed the grant date of the discretionary award from July 2018 to May 2018.
31, 2019.
Name | 2018 Shares Granted | |||||||
Robert A. Eberle | 170,000 | (1) | ||||||
Richard D. Booth | 36,561 | (2) | ||||||
Nigel K. Savory | 48,000 | |||||||
Norman J. DeLuca | 30,000 | |||||||
John F. Kelly | 55,000 | (3) |
Name | 2019 Shares Granted | |||
Robert A. Eberle | 160,000 | (1) | ||
Richard D. Booth | 35,000 | |||
Nigel K. Savory | 98,000 | (2) | ||
Norman J. DeLuca | 36,000 | |||
John F. Kelly | 10,000 |
(1) | Includes |
(2) | Includes |
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eligible to participate in all of our employee benefit plans, in each case on the same terms as our other employees. 2020. Name and Principal Position Robert A. Eberle, President and Chief Executive Officer Richard D. Booth Chief Financial Officer and Treasurer Nigel K. Savory Managing Director, Europe (5) Norman J. DeLuca Managing Director, Banking Solutions John F. Kelly General Manager, Legal Solutions Represents discretionary bonus awards to Mr. Eberle and Mr. DeLuca in fiscal The amounts reported in this column are computed based on the closing price of our common stock on the date the awards were granted (the grant date fair value) The amounts in this column reflect cash bonus awards paid to our named executive officers under our cash bonus program. See “Compensation Discussion and Analysis-Components of our Executive Compensation Program-Cash Bonuses” above for a description of this program. These amounts consist of: our matching contributions to each executive’s retirement savings plan account; the purchase discount from the market price of our common stock at the date of purchase under our employee stock purchase plan; the portion of premiums paid by us for supplemental executive long-term disability insurance for Mr. Eberle and Mr. Savory; and automobile allowances and private medical insurance premiums paid by us on Mr. Savory’s behalf. Mr. Savory was paid in British Pounds Sterling, which for purposes of this presentation were converted to U.S. Dollars at the average exchange rate for the twelve months ended June 30, 2019, 2018 and 2017 of 1.294, 1.347 and 2018,2019, none of our executives or directors pledged company shares.will beis subject to a one year holding period before any sale or transfer of shares that have vested may take place, other than the sale of shares to cover minimum statutory tax obligations in respect of the vesting of such shares, but otherwise we do not have any equity ownership guidelines for our executives.recycling for options and stock appreciation rights.recycling. As such, (i) any shares of our common stock delivered to satisfy payment of the exercise price of an award or any applicable tax withholding obligation (including shares retained from the award creating the tax obligation) will not be added back to the number of shares available for the future grant of awards under the plan, (ii) shares of our common stock repurchased by us on the open market using the proceeds from the exercise of an award will not increase the number of shares available for future grant of awards under the plan, and (iii) the full number of shares subject to a stock appreciation right multiplied by the percentage of the stock appreciation right actually exercised will count against the number of shares available for grant, regardless of the number of shares actually issued to settle the stock appreciation right upon exercise.2018,2019, we provided supplemental executive long-term disability insurance to Mr. Eberle and Mr. Savory. In addition, we paid the premiums for private medical insurance and provided an automobile allowance to Mr. Savory. We anticipate that we will continue to provide these benefits in the fiscal year ending June 30, 2019. Fiscal Year Salary ($) Bonus ($) (1) Stock Awards
($) (2) Non-Equity
Incentive Plan
Compensation
($) (3) All Other
Compensation
($) (4) Total ($) 2018 $ 384,167 $ 239,000 $ 5,890,600 $ 158,300 $ 31,380 $ 6,703,447 2017 $ 370,000 $ — $ 2,410,100 $ 168,000 $ 19,532 $ 2,967,632 2016 $ 370,000 $ — $ 3,096,500 $ 5,000 $ 18,138 $ 3,489,638 2018 $ 287,083 $ — $ 1,169,878 $ 170,000 $ 24,990 $ 1,651,951 2017 $ 280,000 $ — $ 438,200 $ 83,000 $ 10,707 $ 811,907 2016 $ 280,000 $ — $ — $ 30,000 $ 12,956 $ 322,956 2018 $ 270,074 $ — $ 1,366,080 $ 154,568 $ 32,442 $ 1,823,164 2017 $ 237,116 $ — $ 1,424,150 $ 70,723 $ 28,613 $ 1,760,602 2016 $ 277,321 $ 2,098 $ 1,870,600 $ 63,472 $ 32,629 $ 2,246,120 2018 $ 282,083 $ 200,000 $ 853,800 $ 170,000 $ 8,197 $ 1,514,080 2017 $ 275,000 $ — $ 1,007,860 $ 83,000 $ 6,625 $ 1,372,485 2016 $ 275,000 $ — $ 1,013,400 $ 30,000 $ 6,000 $ 1,324,400 2018 $ 282,083 $ — $ 2,266,900 $ 103,500 $ 7,847 $ 2,660,330 2017 $ 275,000 $ — $ 197,190 $ 61,500 $ 6,913 $ 540,603 2016 $ 275,000 $ — $ 251,460 $ 17,500 $ 6,338 $ 550,298 Name and Principal Position Fiscal Year Salary ($) Bonus ($) (1) Stock Awards ($) (2) Non-Equity Incentive Plan Compensation ($) (3) All Other Compensation ($) (4) Total ($) Robert A. Eberle, 2019 $ 391,950 $ — $ 7,846,800 $ 90,000 $ 44,633 $ 8,373,383 Chief Executive Officer 2018 $ 384,167 $ 239,000 $ 5,890,600 $ 158,300 $ 31,380 $ 6,703,447 2017 $ 370,000 $ — $ 2,410,100 $ 168,000 $ 19,532 $ 2,967,632 Richard D. Booth 2019 $ 291,450 $ — $ 1,829,100 $ 53,000 $ 35,497 $ 2,209,047 Chief Financial Officer 2018 $ 287,083 $ — $ 1,169,878 $ 170,000 $ 24,990 $ 1,651,951 and Treasurer 2017 $ 280,000 $ — $ 438,200 $ 83,000 $ 10,707 $ 811,907 Nigel K. Savory 2019 $ 269,831 $ — $ 4,859,980 $ 96,080 $ 35,577 $ 5,261,468 Managing Director, 2018 $ 270,074 $ — $ 1,366,080 $ 154,568 $ 32,442 $ 1,823,164 Europe (5) 2017 $ 237,116 $ — $ 1,424,150 $ 70,723 $ 28,613 $ 1,760,602 Norman J. DeLuca 2019 $ 286,425 $ — $ 1,881,360 $ 53,000 $ 5,114 $ 2,225,899 Managing Director, 2018 $ 282,083 $ 200,000 $ 853,800 $ 170,000 $ 8,197 $ 1,514,080 Banking Solutions 2017 $ 275,000 $ — $ 1,007,860 $ 83,000 $ 6,625 $ 1,372,485 John F. Kelly 2019 $ 286,425 $ — $ 522,600 $ 36,000 $ 4,914 $ 849,939 General Manager, 2018 $ 282,083 $ — $ 2,266,900 $ 103,500 $ 7,847 $ 2,660,330 Legal Solutions 2017 $ 275,000 $ — $ 197,190 $ 61,500 $ 6,913 $ 540,603 (1) 2018 and a length of service award for Mr. Savory in fiscal year 2016.(2) .(3) (4) (5) 2016 of 1.347, 1.268, and 1.483, respectively, U.S. Dollars per British Pound Sterling.
Name Robert A. Eberle Richard D. Booth Nigel K. Savory Norman J. DeLuca John F. Kelly Amounts in these columns show estimates of possible threshold, target and maximum cash award amounts under our cash bonus program for fiscal Annual restricted stock awards to our named executive officers are typically approved by the leadership development and compensation committee in May, with an effective grant date of not earlier than July 1, the first date of our fiscal year. If an executive is not employed by us on July 1, they will not receive the award. Reflects an estimate of the minimum amount that would have been earned if the minimum targets for all of the quarterly and annual metrics were achieved and a portion of the designated key management objectives were met. Reflects an estimate of the amount that would have been earned if the targeted quarterly and annual metrics were achieved and a majority of the designated key management objectives were met. Reflects an estimate of the maximum amount that would have been earned if the maximum targets for all of the quarterly and annual metrics were achieved and the designated key management objectives were met in full. Reflects awards of restricted stock. These shares vest as to 25% of the shares on the first anniversary of the date of grant and 6.25% of the shares each quarter thereafter, with the exception of the shares granted to Mr. Eberle. Mr. Eberle’s shares vest as to approximately 23.5% of the shares on the first anniversary of the date of grant and approximately 5.9% of the shares each quarter thereafter. In addition, as described below under “Employment and20182019 under any plan, contract, authorization or arrangement pursuant to which cash, securities, similar instruments or other property may bereceived. Non-equity incentive plan awards were made pursuant to our cash bonus program described in our Compensation Discussion and Analysis under the caption “Cash Bonuses”.20182019 Grants of Plan-Based Awards Estimated Possible Payouts Under Non-
Equity Incentive Plan Awards (1) Grant Date Date of
Leadership
Development
and
Compensation
Committee
Action (2) Threshold
($) (3) Target
($) (4) Maximum
($) (5) All Other Stock
Awards: Number
of Shares of Stock
or Units (#) (6) Grant Date Fair
Value of Stock
Awards ($) (7) 5/17/2018 5/17/2018 60,000 2,760,000 7/21/2017 5/18/2017 110,000 3,130,600 117,000 351,000 468,000 11/30/2017 11/16/2017 26,561 885,278 7/21/2017 5/18/2017 10,000 284,600 40,000 150,000 200,000 7/21/2017 5/18/2017 48,000 1,366,080 36,369 136,384 181,845 7/21/2017 5/18/2017 30,000 853,800 40,000 150,000 200,000 5/17/2018 5/17/2018 40,000 1,840,000 7/21/2017 5/18/2017 15,000 426,900 27,000 101,250 135,000 Estimated Possible Payouts Under Non-Equity Incentive Plan Awards (1) Name Grant Date Date of Leadership Development and Compensation Committee Action (2) Threshold ($) (3) Target
($) (4) Maximum ($) (5) All Other Stock Awards: Number of Shares of Stock or Units (#) (6) Grant Date Fair Value of Stock Awards ($) (7) Robert A. Eberle 7/2/2018 5/17/2018 100,000 5,226,000 5/31/2019 2/13/2019 60,000 2,620,800 95,472 358,020 477,360 Richard D. Booth 7/2/2018 5/17/2018 35,000 1,829,100 40,000 150,000 200,000 Nigel K. Savory 7/2/2018 5/17/2018 48,000 2,508,480 2/14/2019 2/13/2019 50,000 2,351,500 34,938 131,018 174,690 Norman J. DeLuca 7/2/2018 5/17/2018 36,000 1,881,360 40,000 150,000 200,000 John F. Kelly 7/2/2018 5/17/2018 10,000 522,600 27,000 101,250 135,000 (1) 2018.2019. Actual amounts paid are disclosed and reported in the Summary Compensation Table under the captionNon-Equity Incentive Plan Compensation. Actual amounts paid may vary substantially from the figures shown in this table due to the factors discussed in Compensation Discussion and Analysis under the caption “Cash Bonuses”.(2) (3) (4) (5) (6)
Other Agreements and Potential Payments Upon Termination or Change in Control”, the vesting of the shares granted to our named executive officers may be accelerated following employment termination or a change in control under certain circumstances. |
(7) | Calculated by multiplying the number of shares of stock by the closing price per share of our common stock on the grant date, which was $52.26 for awards granted on July 2, 2018, $47.03 for the award granted on February 14, 2019 and $43.68 for the award granted on May 31, 2019. These values do not reflect the values that our named executive officers will realize on the award vesting dates, which value will ultimately be dependent on our stock price on the vesting date. |
2019. Name Robert A. Eberle Richard D. Booth Nigel K. Savory Norman J. DeLuca John F. Kelly These shares vest as to 25% of the shares on the first anniversary of the date of grant and 6.25% of the shares each quarter thereafter, with the exception of the shares granted to Mr. Eberle on or after July 1, Calculated by multiplying the number of unvested shares by 2018.20182019 Outstanding Equity Awards at FiscalYear-End Stock Awards Stock Award Grant Date Number of Shares
or Units of Stock
That Have Not
Vested (#)(1) Market Value of Shares
or Units of Stock That
Have Not Vested ($)(2) 5/17/2018 60,000 2,989,800 7/21/2017 110,000 5,481,300 7/1/2016 64,705 3,224,250 7/10/2015 34,375 1,712,906 7/1/2014 6,250 311,438 11/30/2017 26,561 1,323,535 7/21/2017 10,000 498,300 7/1/2016 11,250 560,588 4/6/2015 20,000 996,600 7/21/2017 48,000 2,391,840 7/1/2016 36,562 1,821,884 12/8/2015 9,375 467,156 7/1/2015 12,500 622,875 7/1/2014 3,062 152,579 7/21/2017 30,000 1,494,900 7/1/2016 25,875 1,289,351 7/10/2015 11,250 560,588 11/20/2014 2,500 124,575 5/17/2018 40,000 1,993,200 7/21/2017 15,000 747,450 7/1/2016 5,062 252,239 7/1/2015 2,812 140,122 11/20/2014 500 24,915 Stock Awards Name Stock Award Grant Date Number of Shares or Units of Stock That Have Not Vested (#)(1) Market Value of Shares or Units of Stock That Have Not Vested ($)(2) Robert A. Eberle 5/31/2019 60,000 2,654,400 7/2/2018 100,000 4,424,000 5/17/2018 45,882 2,029,820 7/21/2017 64,705 2,862,549 7/1/2016 38,823 1,717,530 7/10/2015 6,875 304,150 Richard D. Booth 7/2/2018 35,000 1,548,400 11/30/2017 20,936 926,209 7/21/2017 5,625 248,850 7/1/2016 6,250 276,500 Nigel K. Savory 2/14/2019 50,000 2,212,000 7/2/2018 48,000 2,123,520 7/21/2017 27,000 1,194,480 7/1/2016 20,312 898,603 12/8/2015 3,125 138,250 7/1/2015 2,500 110,600 Norman J. DeLuca 7/2/2018 36,000 1,592,640 7/21/2017 16,875 746,550 7/1/2016 14,375 635,950 7/10/2015 2,250 99,540 John F. Kelly 7/2/2018 10,000 442,400 5/17/2018 30,000 1,327,200 7/21/2017 8,437 373,253 7/1/2016 2,812 124,403 7/1/2015 562 24,863 (1) 2016. Such2016 which shares vest as to approximately 23.5% of the shares on the first anniversary of the date of grant and approximately 5.9% of the shares each quarter thereafter. In addition, as described below under “Employment and Other Agreements and Potential Payments Upon Termination or Change in Control”, the vesting of the shares granted to our named executive officers may be accelerated following employment termination or a change in control under certain circumstances.(2) $49.83,$44.24, the closing price per share of our common stock on the Nasdaq Global Select Market on June 29, 2018.
2019 2019. date which for fiscal 2019 ranged from $43.35 to $72.09. Name Robert A. Eberle Richard D. Booth Nigel K. Savory Norman J. DeLuca John F. Kelly any person becomes the beneficial owner of more than 50% of the voting power of our outstanding securities;20182018.closing pricemarket value of our common stockthe underlying shares on the vesting date.20182019Stock Vested Stock Awards Number of Shares
Acquired on Vesting (#) Value Realized on
Vesting ($) 104,045 3,218,692 28,750 905,820 60,000 1,871,044 41,000 1,331,068 18,688 668,855 Stock Awards Name Number of Shares Acquired on Vesting (#) Value Realized on Vesting ($) Robert A. Eberle 119,045 6,308,809 Richard D. Booth 35,000 1,890,804 Nigel K. Savory 56,562 3,078,354 Norman J. DeLuca 36,125 2,002,615 John F. Kelly 21,563 1,070,744
our stockholders approve a merger or consolidation of Bottomline, subject to certain limited exceptions; or
our stockholders approve a plan of liquidation or a sale of all or substantially all of our assets.
a felony conviction;
willful and persistent failure to attend to material duties or obligations;
the breach of confidentiality,non-competition or similar material obligations by Mr. Eberle; or
an act or omission which would constitute a crime involving Bottomline’s property.
we enter into an agreement that would cause a change in control;
any person publicly announces an intention to take any action which, if consummated, would constitute a change in control; or
our Board of Directors adopts a resolution to the effect that, for purposes of the employment agreement, a potential change in control has occurred.
agreement, if Mr. Booth’s employment is terminated by the company without cause or by Mr. Booth for good reason, each as defined below, and subject to Mr. Booth’s execution of a general release of potential claims against the company, (i) the company has agreed to pay Mr. Booth a lump sum amount equal to 12 months of Mr. Booth’s then-current base salary and an amount equal to Mr. Booth’s target bonus then in effect and (ii) any restricted stock or other equity awards that would have vested during the 12 months following the termination date will automatically vest. In addition, if Mr. Booth’s employment is terminated by the company within 12 months following a change in control as defined below, any restricted stock or other equity awards will vest in full.
any person becomes the beneficial owner of more than 50% of the voting power of our outstanding securities;
our stockholders approve a merger or consolidation of Bottomline, subject to certain limited exceptions; or
a felony conviction;
willful and persistent failure to attend to material duties or obligations;
the breach of confidentiality,non-competition or similar material obligations by Mr. Booth; or
an act or omission which would constitute a crime involving Bottomline’s property.
material breach of the terms of the agreement;we assumed in connection with our acquisition of Checkpoint Holdings, Ltd., which is now our wholly owned subsidiary, Bottomline Technologies Europe Limited. This service agreement was amended on February 18, 2011. as amended, remains in effect, absent our termination of Mr. Savory for cause or due to incapacity, until terminated by at least six months’ written notice by us or by at least 12 months’ written notice by Mr. Savory. We also have the right to terminate the agreement on less than six months’ written notice, but in lieu of notice, we are required to pay Mr. Savory his salary and other contractual benefits under the service agreement for the duration of the period for which notice was not given. In addition, if in connection with our termination of his employment Mr. Savory executes a satisfactory compromise agreement with us, he will be entitled to a severance payment equivalent to six months’ base salary and car allowance plus a sum equivalent to six months’ bonus entitlement calculated on a pro rata basis according to the level of bonuses actually paid to him over the preceding period of 12 months. If we terminate the service agreement for cause or due to Mr. Savory’s incapacity, we are not required to pay Mr. Savory any compensation other than accrued compensation, although Mr. Savory will be entitled to the equity acceleration described below in the event of his termination due to incapacity.
serious misconduct or willful neglect in the discharge of his duties under the agreement;
conviction of a criminal offense which in our reasonable opinion materially or adversely affects Mr. Savory’s ability to continue as an employee or officer of the company;
acts of fraud or material dishonesty; or
deliberate discrimination or harassment on grounds on race, religion, creed, sex or disability.
a significant change in Mr. Savory’s duties;
a reduction in his base compensation;
a relocation of his place of work by more than 50 miles; or
a breach by Bottomline of any material provision of the service agreement.
any person becomes the beneficial owner of more than 50% of the voting power of our outstanding securities;
our stockholders approve a merger or consolidation of Bottomline, subject to certain limited exceptions; or
our stockholders approve a plan of liquidation or a sale of all or substantially all of our assets.
provided in connection with the change of control that is consistent with the underlying plan that covers the stock options. Additionally, for 12 months after the date of termination Mr. Kelly will continue to receive standard employment benefits for himself and his family at least equal to those that would have been provided to Mr. Kelly if his employment had not been terminated. Name Richard D. Booth Nigel K. Savory Norman J. DeLuca John F. Kelly Assumes no change in control takes place. This amount would be reduced by any bonus amounts previously paid to the named executive officer for fiscal Calculated by multiplying the number of shares subject to accelerated vesting by For purposes of calculating Mr. Eberle’s bonus in a termination without cause scenario, we have assumed his earned bonus equals his maximum bonus opportunity. Assumes that we make a severance payment in lieu of six months’ notice and that Mr. Savory enters into a compromise agreement with us in connection with the termination of his employment. Mr. Savory is paid in British Pounds Sterling. For purposes of this presentation, salary, target bonus and benefits were converted to U.S. Dollars at the average exchange rate for the twelve months ended June 30, , within 12 months following a “change in control” (each term as defined in the agreement), then (i) Mr. Kelly will be entitled to payment of an amount equal to the sum of any accrued but unpaid base salary through the date of termination, an amount equal to his base salary for the six months prior to the date of termination (Salary Severance)("Salary Severance"), 50% of his annual bonus opportunity for the most recently completed fiscal year, apro-rated portion of his annual bonus opportunity for the current fiscal year, the amount of any compensation previously deferred by Mr. Kelly (together with any accrued interest or earnings thereon), an amount equal to 50% of the commissions paid to Mr. Kelly over the previous 12 month period and any accrued but unpaid vacation pay (collectively, the Accrued Obligations)"Accrued Obligations") and (ii) all shares of restricted stock will vest and all outstanding stock options will become exercisable in full until the earlier of the second anniversary of the date of termination or the expiration of the original term of the stock option, subject to any contrary treatment29, 2018,28, 2019, the last business day of fiscal 2018.2019. Base Salary ($) Bonus ($)(2) Accelerated
Vesting of
Restricted
Stock ($)(3) Benefits
($) Total ($) Robert A. Eberle –change in control — — 13,719,694 — 13,719,694 –involuntary termination or termination without cause prior to a potential change in control, ornon-renewal of employment agreement by company (1)(4) 780,000 936,000 13,719,694 66,892 15,502,586 –involuntary termination or termination without cause upon or after a potential change in control or change in control (4) 1,170,000 1,404,000 13,719,694 66,892 16,360,586 –termination as a result of death or disability — 468,000 13,719,694 — 14,187,694 –involuntary termination without cause or by Mr. Booth with good reason (1) 290,000 200,000 1,744,050 — 2,234,050 –involuntary termination within 12 months of a change in control 290,000 200,000 3,379,023 — 3,869,023 –termination without cause prior to a change in control or termination without cause or for good reason within 12 months following a change in control (5) (6) 276,135 77,284 5,456,334 23,495 5,833,248 –termination for incapacity (6) — — 5,456,334 5,456,334 –change in control — — 3,469,414 — 3,469,414 –termination without cause or for good reason within 12 months following a change in control 142,500 67,500 3,157,926 19,288 3,387,214 –death or disability within 12 months following a change in control — 67,500 — — 67,500 Name Base Salary ($) Bonus ($)(2) Accelerated Vesting of Restricted Stock ($)(3) Benefits ($) Total ($) Robert A. Eberle –change in control — — 13,992,448 — 13,992,448 –involuntary termination or termination without cause prior to a potential change in control, or non-renewal of employment agreement by company (1)(4) 795,600 954,720 13,992,448 71,264 15,814,032 –involuntary termination or termination without cause upon or after a potential change in control or change in control (4) 1,193,400 1,432,080 13,992,448 71,264 16,689,192 –termination as a result of death or disability — 477,360 13,992,448 — 14,469,808 Richard D. Booth –involuntary termination without cause or by Mr. Booth with good reason (1) 295,800 200,000 1,548,400 — 2,044,200 –involuntary termination within 12 months of a change in control 295,800 200,000 2,999,959 — 3,495,759 Nigel K. Savory –termination without cause prior to a change in control or termination without cause or for good reason within 12 months following a change in control (5) (6) 283,515 48,040 6,677,453 24,776 7,033,784 –termination for incapacity (6) — — 6,677,453 6,677,453 Norman J. DeLuca –change in control — — 3,074,680 — 3,074,680 John F. Kelly –termination without cause or for good reason within 12 months following a change in control 145,350 67,500 2,292,119 19,324 2,524,293 –death or disability within 12 months following a change in control — 67,500 — — 67,500 (1) (2) 2018.(3) $49.83,$44.24, the closing price per share of our common stock on the Nasdaq Global Select Market on June 29, 2018.(4) (5) (6) 20182019 of 1.3471.294 U.S. Dollars per British Pound Sterling.
time. 2019. Jennifer M. Gray, Peter Gibson Jeffrey C. Leathe Plan Category Total Consists of the following equity compensation plans: the 1998 Director Plan, the 2000 Employee Stock Purchase Plan, as amended (the “2000 ESPP”), Consists of The amount reported consists of outstanding stock options issued by Andera, Inc. under the Andera, Inc. 2010 Stock Option/Stock Issuance Plan (the “Andera Plan”) and assumed by the company, on anas-converted basis (the “Assumed Awards”). Each Assumed Award continues to have the same terms and conditions in effect prior to the acquisition of Andera, except that the number of shares to be received upon exercise of such option and the exercise price of such options were adjusted in accordance with the transactionfour years or more. From June 30, 2017 to June 30, 2018 the fair value of our common stock appreciated by 94%. As a result, the value reported as compensation for fiscal 2018 for our Chief Executive Officer exceeds historical compensation levels due in large part to share price appreciation.88%94% of the total annual compensation reported for our Chief Executive Officer for fiscal 20182019 relates to awards of restricted stock that have not yet vested. These awards were valued based on the closing price of our common stock on the date the awards were issued to our Chief Executive Officer. For fiscal 2018,2019, the annual total compensation of our median employee (other than our Chief Executive Officer) was $96,645$97,764 and, as disclosed in the Summary Compensation Table, the annual total compensation of our Chief Executive Officer was $6,703,447.$8,373,383. Based on this information, which has been calculated in a manner consistent with the methodology discussed below, we estimated a ratio of 6986 to 1 for the annual total annual compensation of our Chief Executive Officer to the median of the annual total compensation of all other employees for fiscal 2018.as discussed below.Excluded Jurisdiction Employees Excluded Jurisdiction Employees Belgium 1 Ireland 1 Canada 20 Kosovo 13 China 3 Malaysia 2 France 5 Netherlands 2 Germany 3 Singapore 26 Indonesia 6 Thailand 3 Excluded Jurisdiction Employees Excluded Jurisdiction Employees Belgium 1 Ireland 1 Canada 20 Kosovo 13 China 3 Malaysia 2 France 5 Netherlands 2 Germany 3 Singapore 26 Indonesia 6 Thailand 3 20182019 was applied to any compensation denominated in a foreign currency.Tax Act)"Tax Act"), Section 162(m) of the Code and guidance issued thereunder generally disallowed a tax deduction to public companies for certain compensation in excess of $1 million paid to the company’scompany's Chief Executive Officer and the three most highly compensated executive officers other than the Chief Executive Officer and the Chief Financial Officer. Certain compensation, including qualified performance-based compensation, was not subject to the deduction limit if certain requirements were met.inas of fiscal 2019, the Tax Act eliminateseliminated the qualified performance-based compensation exception in excess of $1 million under Section 162(m) of the Code, subject to transition relief for certain binding contracts in effect on November 2, 2017, provided they are not materially modified. The Tax Act also expandsexpanded the definition of covered employees to include the Chief Financial Officer plus any individual who has previously been a covered employee in a tax year after December 31, 2016, even after the individual no longer holds the position.LeadershipDevelopment and Compensation Committee Report JenniferChairman Peter Jeffrey2018,2019, Ms. Gray and Messrs. Gibson and Leathe each served as members of the leadership development and compensation committee of our Board of Directors. During fiscal 2018,2019, no executive officer of Bottomline served as a director or member of the compensation committee (or other committee serving an equivalent function) of any other entity whose executive officer served as a director or member of our leadership development and compensation committee.2018:2019: (a) (b) (c) Number of securities to
be issued upon exercise of
outstanding options,
warrants and rights Weighted-average
exercise price of
outstanding options,
warrants and rights Number of securities
remaining available for
future issuance under
equity compensation
plans (excluding securities
reflected in column (a)). Equity compensation plans approved by security holders (1) 56,698 $ 10.86 5,603,283 (2 ) Equity compensation plans not approved by security holders (3) 2,591 6.86 16,827 59,289 $ 10.69 5,620,110 (a) (b) (c) Plan Category Number of securities to be issued upon exercise of outstanding options, warrants and rights Weighted-average exercise price of outstanding options, warrants and rights Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)). Equity compensation plans approved by security holders (1) 13,511 $ 12.80 6,320,975 (2 ) Equity compensation plans not approved by security holders (3) 1,502 6.85 35,020 Total 15,013 $ 12.20 6,355,995 (1) and the 2009 Stock Incentive Plan and the 2018 Israeli Special Purpose Stock Plan. Shares of common stock are available for future issuance only under the 2000 ESPP, and the 2009 Stock Incentive Plan and the 2018 Israeli Special Purpose Stock Plan.(2) 1,943,5681,817,603 shares issuable under the 2000 ESPP in connection with current and future offering periods under such plan, and 3,659,7154,484,492 shares currently issuable under the 2009 Stock Incentive Plan and 18,880 shares currently issuable under the 2018 Israeli Special Purpose Stock Plan.(3) terms. Please see the Registration Statement on FormS-8 filed by the company with the SEC on May 12, 2014 and “Andera Plan” below for additional information regarding the Andera Plan.
Purpose. The Andera Plan allowsprovide Eligible Participants (as defined below) whothe Acquisition Date in compliance with applicable law, including the rules and regulations of Nasdaq (or any stock exchange or quotation system on which the company’s shares are selected to receive awardsthen listed or quoted).Plan the opportunity to acquirePlan. The company assumed a total of 107,336 shares on an equity interest in the company. The Board believes that equity incentives are a significant factor in retaining and motivating employees who joined the company through the Andera acquisition whose present and potential contributions are important to the company.Key Provisions.•◦ Eligible Participants: Employees, directors, consultants and advisors of the company or a subsidiary of the company hired after April 3, 2014 (the “Acquisition Date”) or individuals employed by Andera prior to the Acquisition Date in compliance with applicable law, including the rules and regulations of Nasdaq (or any stock exchange or quotation system on which the company’s shares are then listed or quoted).
|
Unvested options to purchase 28,462 shares of Andera common stock that were outstanding immediately prior to the Acquisition Date and that were assumed by the company and converted |
into options to purchase the company’s common stock subject to the same vesting and other conditions that applied to the Andera options immediately prior to the acquisition. All options were granted at fair market value on the date of grant pursuant to the terms of the Andera Plan. |
◦ | 69,392 shares of unvested Andera common stock that were outstanding immediately prior to the Acquisition Date and that were assumed by the company and converted into the company’s common stock subject to the same vesting and other conditions that applied to the Andera restricted common stock immediately prior to the acquisition. |
◦ | 9,482 shares available for future issuance under the Andera Plan. |
indirect interest on behalf of related persons and, therefore, are not related person transactions for purposes of this policy: interests arising solely from the related person’s position as an executive officer of another entity (whether or not the person is also a director of such entity) that is a participant in the transaction, where (a) the related person and all other related persons own in the aggregate less than a 10% equity interest in such entity, (b) the related person and his or her immediate family members are not involved in the negotiation of the terms of the transaction and do not receive any special benefits as a result of the transaction, and (c) the amount involved in the transaction equals less than the greater of $200,000 or 25% of the annual consolidated gross revenues of the other entity that is a party to the transaction; andDuring 2018, wereare employed by the company. Joseph L. Mullen is a member of our Board of Directors. The compensation packages for Jason Mullen and Bob Mullen are comparable to the compensation of Bottomline employees holding similar positions, and they are entitled to participate in other employment benefits that are standard for all of Bottomline’s employees. The total compensation earned during 2018,fiscal 2019, including base salary, commissions, bonus and equity compensation (based on grant date stock values), did not exceed $400,000$500,000 for either of these individuals.
a transaction that is specifically contemplated by provisions of Bottomline’s charter or bylaws.
$70,000.
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Our audit committee provides the principal oversight in respect of financial reporting and internal financial controls.
Our leadership development and compensation committee provides the principal oversight in respect of our executive compensation policies and programs and the development of the company’s senior leadership.
Our nominations and corporate governance committee provides the principal oversight in respect of our Board organization, membership and structure, succession planning for our directors and chief executive officer and corporate governance.
Base salaries, including those of our executive officers, are fixed and based on the respective responsibility of the individual. Base salaries are designed to provide a steady income, regardless of our stock price performance,
Short-term compensation opportunities, which are predominantly cash bonuses, including cash bonuses to our executive officers, are first based on company-wide objectives rather than on the objectives of a specific operating geography or operating segment. We believe this encourages decision making that is in the best interest of our company and stockholders as a whole. Further, we believe that considering the operating performance of the company as a whole is a balanced approach for assessing performance. For example, using company-wide metrics encourages decision making that considers more than just revenue targets, thus ensuring that our focus is not purely on sales levels without regard to cost structure.
Long-term compensation opportunities are predominantly equity-based awards such as restricted stock, that generally vest over four years. We believe that this encourages our employees, including our executive officers, to make decisions that are in the best long-term interests of our company as a whole since the ultimate value of these awards is realized through a sustained stock price and stock price appreciation over the long-term.
appointing, approving the compensation of, and assessing the independence of our registered public accounting firm;sixfour meetings, including by telephone conference, during fiscal 2018.2019. The leadership development and compensation committee of our Board of Directors held fourfive meetings, including by telephone conference, during fiscal 2018.2019. The audit committee of our Board of Directors held 11 meetings, including by telephone conference, during fiscal 2018.2019. The nominations and corporate governance committee of our Board of Directors held twothree meetings during fiscal 2018.2019. Our directors regularly meet without management present during our Board meetings.year 2018,2019, all of our directors attended at least 75% of the aggregate of the meetings of the Board of Directors and meetings of the committees on which they served, if any, during the period that they served on our Board of Directors or any such committees. We encourage our directors to attend our annual meeting of stockholders. Messrs. Eberle, D’Amato, Hough, Leathe and Mullen and Ms. GrayAll members of our Board of Directors attended our 20172018 annual meeting of stockholders.or the Exchange Act,(the "Exchange Act"), and in the case of all members of the leadership development and compensation committee, the independence requirements under Rule10C-1 of the Exchange Act.
overseeing the work of our registered public accounting firm, including through the receipt and consideration of certain reports from the registered public accounting firm;
reviewing and discussing with management and our registered public accounting firm our annual and quarterly financial statements and related disclosures;
monitoring our internal control over financial reporting, disclosure controls and procedures and code of business conduct and ethics;
establishing procedures for the receipt and retention of accounting related complaints and concerns;
preparing the audit committee report required by SEC rules which is included in this proxy statement.
annually reviewing and approving corporate goals and objectives relevant to chief executive officer compensation;
overseeing the performance of our chief executive officer and our other executive officers;
determining the chief executive officer’s compensation;
reviewing and approving the compensation of our other executive officers;
overseeing and administering our incentive compensation and equity-based plans;
reviewing and making recommendations to the Board with respect to director compensation; and
reviewing and monitoring the development of executive officers and the broader senior leadership team.
identifying individuals qualified to become Board members;
recommending to the Board the persons to be nominated for election as directors and to each of the Board’s committees;
developing and recommending to the Board corporate governance principles; and
overseeing the evaluation of the Board.
Reports Act, with the exception of one Form 4, which was filed late on September 11, 2019 on behalf of Mr. Kelly to report the sale of 2,078 shares of common stock. 2019. have also recommended, subject to stockholder ratification, the selection of Ernst & Young LLP as Bottomline’s registered independent public accounting firm for the fiscal year ending June 30, 2020. Jeffrey C. Leathe, Chairman Kenneth J. Benjamin E. Robinson III Type of Fee Audit Fees (1) Audit-Related Fees (2) Tax Fees (3) All Other Fees (4) Represents fees for professional services rendered in connection with the audit of our financial statements and the audit of internal controls for the fiscal year indicated, audit procedures associated with businesses that we acquired, reviews of the financial statements included in each of our quarterly reports on Form10-Q during the fiscal year indicated, and services performed in connection with certain registration statements we filed. Represents accounting and financial reporting consultations. Represents fees for tax consulting For the fiscal years ended June 30, 20192020 Annual Meeting.”Beneficial Ownership Reporting ComplianceAct.20182019 with management, including the quality, not just the acceptability, of the accounting principles, the reasonableness of significant judgments, and the clarity of disclosures contained in the financial statements and schedule.such other matters as are required to be discussed with Ernst & Young LLP under standardsthe matters to be discussed by the applicable requirements of the Public Company Accounting Oversight Board including AS 1301: Communications with Audit Committees, rules ofand the SEC, and other applicable regulations.SEC. In addition, the committee has received the written disclosures and the letter from Ernst & Young LLP required by applicable requirements of the Public Company Accounting Oversight Board regarding Ernst & Young LLP’s communications with the audit committee concerning independence and has discussed with Ernst & Young LLP its independence from management and Bottomline, including the compatibility of anynon-audit services with its independence. The Audit Committee has concluded that the provision of audit andnon-audit services by Ernst &Young LLP to Bottomline and its affiliates is compatible with Ernst & Young LLP’s independence.2018.20182019 for filing with the SEC. The committee and the Board of Directors2019. Jeffrey KennethD’Amato Benjamin For fiscal 2018, audit fees include an estimate of amounts not yet billed. Fiscal Year Ended
June 30, 2018 Fiscal Year Ended
June 30, 2017 $ 1,414,785 $ 1,142,088 $ 78,700 $ 33,400 $ 109,395 $ 159,507 $ 24,306 $ 219,913 Type of Fee Fiscal Year Ended
June 30, 2019 Fiscal Year Ended
June 30, 2018Audit Fees (1) $ 1,345,676 $ 1,414,785 Audit-Related Fees (2) $ 255,000 $ 78,700 Tax Fees (3) $ 5,000 $ 109,395 All Other Fees (4) $ 30,909 $ 24,306 (1) (2) (3) services relating principally to international tax planning.(4) 20182019 and June 30, 2017,2018, fees represent consulting services related to structuring alternatives for certain of our debt arrangements and an annual fee for access to an accounting and financial reporting research tool.
The audit committee, in assessing the on-going independence of Ernst & Young LLP, also considers the relationship of non-audit fees to audit fees. use of restricted stock as a significant portion of our executives’ compensation, which directly links executive and stockholder interests and rewards executives for sustained appreciation in our stock price while minimizing dilution to our stockholders; specifically approved in advance by the audit committee or the engagement is entered into pursuant to one of thepre-approval procedures described below.
a cash bonus program that is linked predominantly to corporate performance, including the achievement of financial, strategic and operational objectives;
executive salaries and cash bonuses that are competitive with similarly situated executive officers based on a peer group analysis that is updated annually; and
minimal use of executive-only perquisites (none of our executive officers receive, nor do we have any present plan to provide, payment for personal aircraft, financial planning, supplemental retirement plans, retirement benefits or deferred compensation arrangements (other than our 401(k) plan), country club dues, security services, estate or tax planning or split dollar life insurance policies).
“
"
On September 13, 2018, our Board of Directors adopted, subject to stockholder approval, an amendment to our 2009 Stock Incentive Plan (the “2009 Plan”) to increase the number of shares of our common stock authorized for issuance under the 2009 Plan by 2,200,000 shares, which would increase the number of shares that may be issued under the 2009 Plan to 14,950,000 and provide that any or all of the shares can be used for the issuance of incentive stock options. We are asking our stockholders to approve this amendment at the annual meeting. Our 2009 Plan was originally adopted by our Board of Directors on November 19, 2009 and was amended on November 17, 2011, November 14, 2013, November 20, 2014, September 15, 2016, November 17, 2016 and November 16, 2017.
The approvalStock Incentive Plan, which we refer to as the Prior Plan, which expires by our stockholdersits terms on November 18, 2019. Upon the expiration of the amendment ofPrior Plan, all then outstanding awards under the 2009Prior Plan will allow usremain in effect, but no additional awards may be made under the Prior Plan.
that are subsequently terminated, surrendered, cancelled or forfeited or repurchased by us pursuant to a contractual repurchase right will become available for grant under the 2019 Plan. For the avoidance of doubt, there are no other available shares, or shares subject to awards outstanding under any plan other than the Prior Plan, the Andera Plan (from which we do not intend to grant awards), and our 2018 Israeli Special Purpose Stock Incentive Plan (the shares of which are not being transferred to the 2019 Plan).
If the 2019 Plan is not approved, we will not be able to make long-term equity incentive awards under a stockholder-approved equity incentive plan after the expiration of the Prior Plan on November 18, 2019. Therefore, we consider approval of the 2019 Plan vital to our future success.
Accordingly, our board of directors believes adoption of the 2019 Plan is in the best interests of the company and its stockholdersNo liberal share recycling. Shares of common stock delivered to satisfy the exercise price of an award made under the 2019 Plan or to satisfy the tax withholding obligations with respect to awards made under the 2019 Plan will not increase the number of shares available for the future grant of awards under the 2019 Plan and shares purchased by us on the open market using proceeds from the exercise of an award will also not increase the number of shares available for future grant of awards. |
Fungible Share Pool. Full-value awards count against the share limit under the 2019 Plan as 1.28 shares for each share of common stock subject to the award. |
No Repricing of Awards. The 2019 Plan prohibits the direct or indirect repricing of stock options or stock appreciation rights (“SARs”) without stockholder approval (unless otherwise permitted under the terms of the 2019 Plan in connection with certain changes in capitalization and reorganization events). |
No Discounted Options or SARs. All options and SARs must have an exercise or measurement price not less than the fair market value of the underlying common stock on the date of grant. |
No Reload Options or SARs. No options or SARs granted under the 2019 Plan may contain a provision entitling the award holder to the automatic grant of additional options or SARs in connection with any exercise of the original option or SAR. |
No Dividend Equivalents on Options or SARs. No options or SARs granted under the 2019 Plan may provide for the payment or accrual of dividend equivalents. |
Dividends and Dividend Equivalents on Restricted Stock, Restricted Stock Units and Other Stock-Based Awards not Paid Until Award Vests. Any dividends or dividend equivalents paid with respect to restricted stock, restricted stock units (“RSUs”) or other stock-based awards will be subject to the same restrictions on transfer and forfeitability as the award with respect to which it is paid. |
Minimum Vesting Requirements. No part of any award made under the 2019 Plan will vest or become exercisable before the first anniversary of the date such award is made or granted, except that an award may provide that it will immediately vest or become immediately exercisable, in whole or in part, upon a participant’s death, disability, termination from employment by us other than for Cause (as defined in the 2019 Plan) or upon the occurrence of a Change in Control Event (as defined in the 2019 Plan). |
CEO Grants and Minimum Holding Period. Any award made to our chief executive officer must have a vesting schedule of three years or more and is subject to an additional one year holding period before any sale or transfer of shares that have vested under the award may take place other than sales to cover statutory tax obligations in respect of the vesting of such shares. | |||
Independent Committee Administers Awards to Non-Employee Directors. Awards granted to non-employee directors must be granted and administered by a committee of the board of directors, all of the members of which are independent directors as defined by Section 5605(a)(2) of the Nasdaq Stock Market Marketplace Rules. |
Dilution
The information below excludes our 2000 Employee Stock Purchase Plan. With respect to all of our stock incentive plans as of August 31, 2018:
Total number
1,524 outstanding options to purchase shares of common stock; with a weighted-average remaining term of 3.3191 years and a weighted-average exercise price of $7.5922 per share; and |
2,421,026 shares of unvested restricted stock; and |
3,944,380 shares available for future award grants, as follows: |
Total number of shares available for grantfuture award grants under the Andera Plan was 16,827; however,(from which we do not intend to issuegrant awards)
Stock options covering 49,237 shares were outstanding;
o the weighted average exercise price of such options was $10.8083;
o the weighted average remaining term of such options was 1.14 years; and
Total number of shares underlying outstanding full value awards (i.e., awards that are not options or stock appreciation rights) was 2,772,837.
The 2009 Plan is, and the 2009 Plan, as amended, is intended to be, a broad-based plan that allows for the issuance of equity awards throughout our organization. In fiscal 2018, 72% of all equity awards issued by the company were issued to individuals other than executive officers.
The additional 2,200,000 shares that we are requesting to add to the 2009 Plan was based upon careful consideration of the equity compensation needs of the company, including an assessment of the number of shares likely to be neededavailable for future equity grants. As described below, the company also considered the potential
dilution to our stockholders that would result from their approval of the amendment of the 2009 Plan. The company believes that approving the additional 2,200,000 shares of common stock for issuanceaward grants under the 20092018 Israeli Plan as amended, is appropriate and in the best interests of stockholders given our current expectations on hiring and employee retention demands created by recent business growth, the highly competitive environment in which we recruit and retain employees, the dilution rate of our peers and our historical rate of issuing equity awards. Our Board of Directors and our management will carefully consider all proposed
rate.”
Fiscal Year | Options Granted | Restricted Stock Granted | Total Granted (2) | Basic Weighted Average Number of Common Shares Outstanding | Gross Burn Rate (1) | |||||||||||||||
2018 | — | 1,231,000 | 3,078,000 | 38,227,000 | 8.05 | % | ||||||||||||||
2017 | — | 942,000 | 2,355,000 | 37,842,000 | 6.22 | % | ||||||||||||||
2016 | — | 1,061,000 | 2,653,000 | 37,957,000 | 6.99 | % | ||||||||||||||
Three-Year Average | — | 1,078,000 | 2,695,333 | 38,009,000 | 7.09 | % |
Fiscal Year | Options Granted | Actual Restricted Stock Granted | Effect with Burn Rate Multiplier (2) | Basic Weighted Average Number of Common Shares Outstanding | Gross Burn Rate (1) | |||||||||||||
2019 | 0 | 1,279,000 | 3,198,000 | 40,612,000 | 7.88 | % | ||||||||||||
2018 | 0 | 1,231,000 | 3,078,000 | 38,227,000 | 8.05 | % | ||||||||||||
2017 | 0 | 942,000 | 2,355,000 | 37,842,000 | 6.22 | % | ||||||||||||
Three-Year Average | 0 | 1,151,000 | 2,877,000 | 38,894,000 | 7.40 | % |
(1) | “Gross Burn Rate” is defined as the number of shares underlying equity awards granted in the year divided by the basic weighted average number of common shares outstanding. |
(2) | “ |
We believe that our future success depends, in large part, upon our continued ability to attract and retain exceptional employee talent. This includes providing long term retention vehicles, such as equity compensation, which serve to retain and motivate those individuals who are expected to make important contributions to the company by providing them with equity ownership opportunities that align their interests with those of the company’s shareholders. Stock-based incentive compensation encourages and rewards employee performance by increasing the value of their compensation if our stock performance improves. Vesting requirements also encourage long-term retention, which is beneficial to our growth and success. We need additional shares under the 2009 Plan to ensure that we have the continued ability to use equity compensation to motivate existing high-performing employees, hire additional, qualified employees and align the interests of our employees, directors, consultants and advisors with those of our stockholders. Accordingly, the Board of Directors believes the proposed amendment of the 2009 Plan is in the best interests of the company and its stockholders and recommends a vote “FOR” the amendment of the 2009 Plan.
If our stockholders approve the amendment to the 2009 Plan, the 2009 Plan will remain unchanged in all respects other than (i) theincrease to the number of shares of our common stock authorized for issuance under the 2009 Plan by 2,200,000 shares to 14,950,000 shares and (ii) the increase in the number of shares of common stock that may be issued as incentive stock options to 14,950,000 shares. Below
Shares Issuable
After giving effect References to our board of directors in this summary include the proposed amendment, upCommittee or any similar committee appointed by our board of directors to 14,950,000 shares of common stock (subject to adjustment inadminister the event of stock splits and other similar events) will be authorized for issuance pursuant to awards granted under the 2009 Plan, plus such additional number of shares of common stock as is equal to the number of shares of common stock subject to awards granted under the company’s 1998 Director Stock Option Plan, the company’s 2000 Stock Incentive Plan and the company’s 1997 Stock Incentive Plan (Amended & Restated), 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, to any limitations of the Internal Revenue Code of 1986, as amended (the “Code”)).
2019 Plan.
Awards; Shares Available for Awards; Share Counting Rules
Incentive Stock The 2019 Plan provides that to the extent a share that is subject to an award granted under the Prior Plan that counted as 1.28 shares against the Prior Plan’s share reserve is made available for the award of future grants under the 2019 Plan, the share reserve of the 2019 Plan will be credited with 1.28 shares. Otherwise, each share of common stock subject to an award under the Prior Plan that becomes available for grant under the 2019 Plan will increase the 2019 Plan’s share reserve by one share.
No options granted under the 2019 Plan may provide for the payment or accrual of dividend equivalents.
The 2019 Plan provides that the measurement price of an SAR may not be less than the fair market value of our common stock on the date the SAR is granted (provided, however, that if our board of directors approves the grant of an SAR effective as of a future date, the measurement price may not be less than 100% of the fair market value on such future date) and that SARs may not be granted with a term in excess of 10 years. No SARs granted under the 2019 Plan may contain a provision entitling the participant to the automatic grant of additional SARs in connection with any exercise of the original SAR. No SARs granted under the 2019 Plan may provide for the payment or accrual of dividend equivalents.
award. Any dividends (whether paid in cash, stock or property) declared and paid by us with respect to shares of restricted stock will be paid to the participant only if and when such shares become free from the restrictions on transferability and forfeitability that apply to such shares. No interest will be paid on any such unvested dividends.
Other Stock and Cash-Based Awards. Under the 2009 Plan,participant in a manner that complies with Section 409A of the Board of DirectorsCode. A participant has no voting rights with respect to any RSUs. An RSU award agreement may provide the participant with the right to grantreceive an amount equal to any dividends or other Awards based upondistributions declared and paid on an equal number of outstanding shares of our common stock. Any such dividend equivalents may be settled in cash and/or shares of our common stock having such termsas set forth in the applicable award agreement and conditionswill be subject to the same restrictions on transfer and forfeitability as the BoardRSUs with respect to which such dividend equivalents are paid. No interest will be paid on any such dividend equivalents.
Dividends and Dividend Equivalents
As a policy, we require participants in our 2009 Planstock-based award with respect to waive their rights to accumulate orwhich they are paid. No interest will be paid any dividend or dividend equivalent on any unvested Award.
such dividend equivalents.
Except as the Board of Directors may otherwise determine or provide in an Award,
However, except with respect to awards that are subject to Section 409A of the Code, our board of directors may permit or provide in an award for the gratuitous transfer of the award by the participant to or for the benefit of any immediate family member, family trust or other entity established for the benefit of the participant and/or an immediate family member thereof if we would be eligible to use a Form S-8 under the Securities Act of 1933, as amended for the registration of the sale of the common stock subject to such award to the proposed transferee. Further, we are not required to recognize any transfer until such time as the permitted transferee has, as a condition to the transfer, delivered to us a written instrument in form and substance satisfactory to us confirming that such transferee will be bound by all of the terms and conditions of the award. None of the restrictions described in this paragraph prohibit a transfer from the participant to us.
Employees,
subsidiary corporations, and employees of any other entities the employees of which are eligible to receive incentive stock options under the Code.
effect or may adopt in the future.
Name and Position | Number of Shares of Restricted Stock | Number of Stock Options | ||||||
Robert A. Eberle | 890,000 | — | ||||||
President and Chief Executive Officer | ||||||||
Richard D. Booth | 136,561 | — | ||||||
Chief Financial Officer and Treasurer | ||||||||
Norman J. DeLuca | 262,000 | — | ||||||
Managing Director, Banking Solutions | ||||||||
John F. Kelly | 194,500 | — | ||||||
General Manager, Legal Solutions | ||||||||
Nigel K. Savory | 375,000 | — | ||||||
Managing Director, Europe | ||||||||
All Executive Officers (5 persons) | 1,858,061 | — | ||||||
All Non Executive Directors (7 persons) | 147,000 | — | ||||||
Each nominee for election as a director: | ||||||||
Peter Gibson | 13,000 | — | ||||||
Joseph L. Mullen | 31,000 | — | ||||||
All employees and former directors, but excluding all current executive officers and current non executive directors (1) | 6,242,206 | 5,000 |
|
$41.24.
SubjectCommittee to any applicable limitations contained in the 2009 Plan, the Board of Directors, the leadership development and compensation committee, or any other committee to whom the Board of Directors delegates authority, as the case may be, selects the recipients of Awards and determines (i) the number of shares of common stock covered by options and the dates upon which such options become exercisable, (ii) the exercise price of options (which may not be less than 100% of fair market valueadminister certain aspects of the common stock), (iii)2019 Plan, including the durationgranting of options (which may not exceed 10 years), and (iv) the number of shares of common stock subjectawards to any SAR, restricted stock award, restricted stock unit award or other stock- or cash-basedexecutive officers. Awards and the terms and conditions of such Awards, including conditions for repurchase, issue price and repurchase price.
To the extent permitted by applicable law and under the 2009 Plan, the Board of Directors may delegate to one or more officers of the company the power to grant options and other Awards that constitute rights under Delaware law to employees or officers of the company and to exercise such other powers under the 2009 Plan as the Board of Directors may determine. The Board of Directors fixes the terms of the Awards to be granted to such officers (including the exercise price of the Awards, which may include a formula by which the exercise price will be determined) and the maximum number of shares subject to such Awards that the officers may grant. No officer will be authorized to grant awards to any “executive officer” or “officer” of the company, as such terms are defined under the Exchange Act.
Discretionary Awards tonon-employee directors will onlymust be granted and administered by a committee of the board of directors, all of the members of which are independent directors as defined by Section 5605(a)(2) of the Nasdaq Stock Market rules.
Marketplace Rules.
Adjustments and Reorganization Events
The Board of Directors is required to make equitable adjustments in connection with the 2009 Plan and any outstanding Awards to reflect stock splits, stock dividends, recapitalizations, spin-offs andspin-off or other similar changeschange in capitalization or event, or any dividend or distribution to holders of companyour common stock, other than an ordinary cash dividends. dividend, we are required to make equitable adjustments (or make substituted awards, as applicable), in the manner determined by our board of directors, to (i) the number and class of securities
(c) anyour liquidation or dissolutiondissolution.
Restricted Stock
. Upon the occurrence of aThe 2009 Plan also contains provisions addressing
restricted stock unit award. Additionally, eachaward of restricted stock or RSUs. Additionally, each award of restricted stock unit awardor RSUs will immediately become free from all conditions or restrictionsvested if, on or prior to the second anniversary of the date of the consummation of the Change in Control Event, the participant’s employment with the companyus or the acquiring or succeeding corporation is terminated for Good Reason by the participant or is terminated without Cause by the companyus or the acquiring or succeeding corporation.
The Board
If any Award expires or is terminated, surrendered, cancelled or forfeited, the unused shares of common stock covered by such Award will again be available for grant under the 2009 Plan, subject, however, in the case of incentive stock options, to any limitations under the Code.
Fungible Share Pool
Subject to adjustment in the event of stock splits and other similar events, any Award that is not a full-value award (as defined below) will be counted against the 2009 Plan share limits as one share for each share of common stock subject to such Award and any Award that is a full-value award will be counted against the 2009 Plan share as 1.28 shares for each one share of common stock subject to such full-value award.“Full-value award” means any restricted stock award or other stock-based award with a per share price or per unit purchase price lower than 100% of fair market value on the date of grant. To the extent a share that was subject to an Award that counted as one share is returned to the 2009 Plan, each applicable share reserve will be credited with one share. To the extent that a share that was subject to an Award that counts as 1.28 shares is returned to the 2009 Plan, each applicable share reserve will be credited with 1.28 shares.
Share Counting
Shares of common stock repurchased by the company on the open market using the proceeds from the exercise of an Award shall not increase the number of shares available for future grant of Awards.
Substitute Awards
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 of Directors may grant Awards in substitution for any options or other stock or stock-based awards granted by such entity or an affiliate thereof. Substitute Awards may be granted on such terms, as the Board of Directors deems appropriate in the circumstances, notwithstanding any limitations on Awards contained in the 2009 Plan. Substitute Awards will not count against the 2009 Plan’s overall share limit, except as may be required by the Code.
Limitation on Repricing
Except in connection with a corporate transaction involving the company (including, without limitation, any stock dividend, stock split, extraordinary cash dividend, recapitalization, reorganization, merger, consolidation,split-up,spin-off, combination, or exchange of shares), the terms of outstanding Awards may not, without stockholder approval, be amended to reduce the exercise price of outstanding options or SARs or cancel outstanding options or SARs in exchange for cash, other Awards or options or SARs with an exercise price that is less than the exercise price of the original options or SARs. The company would not take any action that would constitute a repricing under the Nasdaq rules without prior shareholder approval.
same type, identically.
various jurisdictions.
No Award
In this event, the board of directors will consider whether to adopt alternative arrangements based on its assessment of our needs.
Options.
A participant will not have income upon the grant of an incentive stock option. Also, except as described below, a participant will not have income upon exercise of an incentive stock option if the participant has been employed byA participant will not have income upon the grant of anon-statutory nonstatutory stock option. A participant will have compensation income upon the exercise of anon-statutory nonstatutory stock option equal to the value of the stock on the day the participant exercised the option less the exercise price. Upon sale of the stock, the participant will have capital gain or loss equal to the difference between the sales proceeds and the value of the stock on the day the option was exercised. This capital gain or loss will be long-term if the participant has held the stock for more than one year and otherwise will be short-term.
Rights.
A participant will not have income upon the grant of a stock appreciation right. A participant generally will recognize compensation income upon the exercise ofAwards.
A participant will not have income upon the grant of restricted stock unless the participant makes an election under Section 83(b) of the CodeUnits.
A participant will not have income upon the grant of a restricted stock unit. A participant is not permitted to make a Section 83(b) election with respect to a restricted stock unit award. When the restricted stock unit vests, the participant will have income on the vesting date in an amount equal to the fair market value of the stock on the vesting date less the purchase price, if any. When the stock is sold, the participant will have capital gain or loss equal to the sales proceeds less the value of the stock on the vesting date. Any capital gain or loss will be long-term if the participant held the stock for more than one year and otherwise will be short-term.Awards.
The tax consequences associated with any other stock-basedUs.
There will be no tax consequences toOn September 13, 2018, the Board of Directors of the company adopted, subject to stockholder approval, the company’s 2018 Israeli Special Purpose Stock Incentive Plan (the “Israeli Plan”). Up to 200,000 shares of our common stock (subject to adjustment in the event of stock splits and other similar events) may be issued pursuant to awards granted under the Israeli Plan.
The Israeli Plan is intended to provide the company a mechanism to specially recognize the unique contributions of critical members of the company’s cyber fraud and risk management team located in Israel. Cyber fraud experience is in high demand in Israel and around the world. The company is committed to rewarding and retaining employees that are critical to the continued success of our cyber fraud offerings throughout the world.
The Board of Directors believes that the future success of the company depends, in large part, upon the ability of the company to maintain a competitive position in attracting, retaining and motivating key personnel. Accordingly, the Board of Directors believes adoption of the Israeli Plan is in the best interests of the company and its stockholders and recommends a vote “FOR” the approval of the Israeli Plan and the reservation of 200,000 shares of our common stock for issuance thereunder.
Description of the Israeli Plan
The following is a brief summary of the Israeli Plan, a copy of which is attached as Appendix B to this Proxy Statement.
Types of Awards
The Israeli Plan provides for the grant of stock options, stock appreciation rights, restricted stock, restricted stock units and other stock-based awards as described below (collectively, “Awards”).
Stock Options. Optionees receive the right to purchase a specified number of shares of common stock at a specified option price and subject to such other terms and conditions as are specified in connection with the option grant. Options may not be granted at an exercise price less than 100% of the fair market value of the common stock on the date of grant. Options may not be granted for a term in excess of ten years. The Israeli Plan permits the following forms of payment of the exercise price of options: (i) payment by cash, check or in connection with a “cashless exercise” through a broker, (ii) subject to certain conditions, surrender to the company of shares of common stock, (iii) subject to certain conditions, by delivery of a notice of “net exercise” to the company, (iv) subject to certain conditions, delivery to the company of a promissory note, (v) any other lawful means, or (vi) any combination of these forms of payment. Options may not contain provisions entitling recipients to the automatic grant of additional options in connection with any exercise of the original option.
Stock Appreciation Rights.A stock appreciation right, or SAR, is an award entitling the holder, upon exercise, to receive an amount in common stock, determined by reference to appreciation, from and after the date of grant, in the fair market value of a share of common stock. SARs may be granted independently or in tandem with an option.
Restricted Stock Awards.Restricted stock awards entitle recipients to acquire shares of our common stock, subject to the right of the company to repurchase all or part of such shares from the recipient in the event that the conditions specified in the applicable Award are not satisfied prior to the end of the applicable restriction period established for such Award.
Restricted Stock Unit Awards. Restricted stock unit awards entitle the recipient to receive shares of common stock to be delivered at the time such shares vest pursuant to the terms and conditions established by the Board of Directors.
Other Stock-Based Awards. Under the Israeli Plan, the Board of Directors has the right to grant other Awards based upon our common stock having such terms and conditions as the Board of Directors may determine, including the grant of shares based upon certain conditions, the grant of Awards that are valued in whole or in part by reference to, or otherwise based on, shares of common stock, and the grant of Awards entitling recipients to receive shares of common stock to be delivered in the future.
Dividends and Dividend Equivalents
Under the Israeli Plan, participants shall not accumulate or be paid any dividend or dividend equivalent on any unvested Award.
Transferability of Awards
During the life of the participant, Awards are exercisable only by the participant.
Subject to the provisions of Section 102 of the Israeli Income Tax Ordinance [New Version], 1961, as amended (the “Tax Ordinance”), as long as Awards under Section 102 of the Tax Ordinance are held by a Trustee, as defined below, Awards may 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.
Eligibility to Receive Awards
All of the company’s Israeli Employees are eligible to be granted Awards under the Israeli Plan. Any Israeli person, including an advisor, contractor andsub-contractor, engaged by the company to render services to it who is not an Employee (“Consultant”) (as such terms are defined and interpreted for purposes of FormS-8 (or any successor form)) is also eligible to be granted Awards under the Israeli Plan. Each person who is granted an Award under the Israeli Plan and who is a resident of the State of Israel or deemed to be resident of the State of Israel for tax purposes is deemed a “participant.”
For the purposes of the Israeli Plan, “Employee” means any Israeli person, including officers and directors (“Directors”), employed or engaged by the company, who is not a Controlling Stockholder (as defined in Section 102 of the Tax Ordinance). Neither service as a Director nor payment of director’s fees by the company will be sufficient to constitute “employment” by the company.
The maximum number of shares with respect to which Awards may be granted to any participant under the Israeli Plan may not exceed 1,000,000 shares per calendar year. For purposes of this limit, the combination of an option in tandem with SAR is treated as a single award.
Plan Benefits
All employees of Bottomline who are employees in Israel are eligible to receive Awards under the Israeli Plan, which as of June 30, 2018, included approximately 90 persons. The granting of Awards under the Israeli Plan is discretionary, and the company cannot now determine the number or type of Awards to be granted in the future to any particular person or group.
On August 31, 2018 the closing price of our common stock on the Nasdaq Global Select Market was $65.97.
Administration
The Israeli Plan is administered by the Board of Directors. The Board of Directors has the authority to adopt, amend and repeal the administrative rules, guidelines and practices relating to the Israeli Plan and to interpret the provisions of the Israeli Plan. Pursuant to the terms of the Israeli Plan, the Board of Directors may delegate authority under the Israeli Plan to one or more committees or subcommittees of the Board of Directors.
Subject to any applicable limitations contained in the Israeli Plan, the Board of Directors, the leadership development and compensation committee, or any other committee to whom the Board of Directors delegates authority, as the case may be, selects the recipients of Awards and determines (i) the number of shares of common stock covered by any options issued and the dates upon which such options become exercisable, (ii) the exercise price of such options (which may not be less than 100% of fair market value of the common stock), (iii) the duration of options (which may not exceed 10 years), and (iv) the number of shares of common stock subject to any SAR, restricted stock award, restricted stock unit award or other stock-based Awards and the terms and conditions of such Awards, including conditions for repurchase, issue price and repurchase price.
To the extent permitted by applicable law and under the Israeli Plan, the Board of Directors may delegate to one or more officers of the company the power to grant options and other Awards that constitute rights under Delaware law to employees or officers of the company and to exercise such other powers under the Israeli Plan as the Board of Directors may determine. The Board of Directors fixes the terms of the Awards to be granted by such officers (including the exercise price of the Awards, which may include a formula by which the exercise price will be determined) and the maximum number of shares subject to such Awards that the officers may grant. No officer will be authorized to grant awards to any “executive officer” or “officer” of the company, as such terms are defined under the Exchange Act.
Discretionary Awards tonon-employee directors will only be granted and administered by a committee, all of the members of which are independent directors as defined by Section 5605(a)(2) of the Nasdaq Stock Market rules.
The Israeli Plan provides that no part of any Award made or granted shall vest or become exercisable prior to the first anniversary of the date such Award is made or granted, except that an Award may provide that it shall immediately vest or become immediately exercisable, in whole or in part, upon a participant’s death, disability, termination from employment by the company other than for Cause (as defined in the Israeli Plan), or upon the occurrence of a Change in Control Event (as defined in the Israeli Plan).
Adjustments and Reorganization Events
The Board of Directors is required to make equitable adjustments in connection with the Israeli Plan and any outstanding Awards to reflect stock splits, stock dividends, recapitalizations, spin-offs and other similar changes in capitalization or any dividend or distribution to holders of company common stock other than ordinary cash dividends. The Israeli Plan also contains provisions addressing the consequences of any Reorganization Event, which is defined as (i) any merger or consolidation of the company with or into another entity as a result of which all of the common stock of the company is converted into or exchanged for the right to receive cash, securities or other property, or is cancelled or (b) any transfer or disposition of all of the common stock of the company for cash, securities or other property pursuant to a share exchange or other transaction or (c) any liquidation or dissolution of the company. In connection with a Reorganization Event, the Board of Directors may take any one or more of the following actions as to all or any outstanding Awards other than restricted stock or restricted stock unit Awards on such terms as the Board of Directors determines: (i) provide that Awards will be assumed, or substantially equivalent Awards will be substituted, by the acquiring or succeeding corporation (or an affiliate thereof), (ii) upon written notice, provide that all unexercised options or other unexercised Awards will terminate immediately prior to the consummation of such Reorganization Event unless exercised within a specified period following the date of such notice, (iii) provide that outstanding Awards will become exercisable, realizable or deliverable, or restrictions applicable to an Award will lapse, in whole or in part prior to or upon such Reorganization Event, (iv) 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 surrendered in the Reorganization Event (the “Acquisition Price”), make or provide for a cash payment to an Award holder equal to the excess, if any, of (A) the Acquisition Price times the number of shares of common stock subject to the holder’s Awards (to the extent the exercise price does not exceed the Acquisition Price) over (B) the aggregate exercise price of all such outstanding Awards and any applicable tax withholdings, in exchange for the termination of such Awards, (v) provide that, in connection with a liquidation or dissolution of the
company, Awards will convert into the right to receive liquidation proceeds (if applicable, net of the exercise price thereof and any tax withholdings) and (vi) any combination of the foregoing. The Board of Directors is not obligated by the Israeli Plan to treat all Awards, all Awards held by a participant in the Israeli Plan or all Awards of the same type identically.
Upon the occurrence of a Reorganization Event other than a liquidation or dissolution of the company, the repurchase and other rights of the company under each outstanding restricted stock or restricted stock unit award will inure to the benefit of the company’s successor and will, unless the Board determines otherwise, apply to the cash, securities or other property which our 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 or restricted stock unit award. However, the Board may provide for termination or deemed satisfaction of such repurchase or other rights under the instrument evidencing any restricted stock or restricted stock unit award or any other agreement between a participant and the company, either initially or by amendment. Upon the occurrence of a Reorganization Event involving the liquidation or dissolution of the company, except to the extent specifically provided to the contrary in the instrument evidencing any restricted stock or restricted stock unit award or any other agreement between a participant and the company, all restrictions and conditions on all restricted stock or restricted stock unit awards then outstanding will automatically be deemed terminated or satisfied.
The Israeli Plan also contains provisions addressing the consequences of a Change in Control Event (as defined in the Israeli Plan). In connection with a Change in Control Event, except as provided to the contrary in an instrument evidencing an option or any other agreement between a participant and the company, the vesting schedule of each option will be accelerated in part so that the number of shares that would have otherwise become vested on any date within one year after the date of the Change in Control Event will immediately become vested. Subject to the following sentence, the remaining shares will continue to become vested in each case one year in advance of the original vesting schedule set forth for such option. Additionally, each option will be immediately exercisable in full if, on or prior to the second anniversary of the date of the consummation of the Change in Control Event, the participant’s employment with the company or the acquiring or succeeding corporation is terminated for Good Reason (as defined in the Israeli Plan) by the participant or is terminated without Cause (as defined in the Israeli Plan) by the company or the acquiring or succeeding corporation. In addition, in connection with a Change in Control Event, except as provided to the contrary in an instrument evidencing a restricted stock or restricted stock unit award or any other agreement between a participant and the company, the vesting schedule of each restricted stock or restricted stock unit award will be accelerated in part so that the number of shares that would have otherwise become free from conditions or restrictions on any date within one year after the date of the Change in Control Event will immediately become free from conditions or restrictions. Subject to the following sentence, the remaining shares will continue to become free from conditions or restrictions in each case one year in advance of the original schedule set forth for such restricted stock or restricted stock unit award. Additionally, each restricted stock or restricted stock unit award will immediately become free from all conditions or restrictions if, on or prior to the second anniversary of the date of the consummation of the Change in Control Event, the participant’s employment with the company or the acquiring or succeeding corporation is terminated for Good Reason by the participant or is terminated without Cause by the company or the acquiring or succeeding corporation.
The Board of Directors may at any time provide that any Award will 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.
If any Award expires or is terminated, surrendered, cancelled or forfeited, the unused shares of common stock covered by such Award will again be available for grant under the Israeli Plan.
Fungible Share Pool
Subject to adjustment in the event of stock splits and other similar events, any Award that is not a full-value award (as defined below) will be counted against the Israeli Plan share limits as one share for each share of
common stock subject to such Award and any Award that is a full-value award will be counted against the Israeli Plan share as 1.28 shares for each one share of common stock subject to such full-value award.“Full-value award” means any restricted stock award or other stock-based award with a per share price or per unit purchase price lower than 100% of fair market value on the date of grant. To the extent a share that was subject to an Award that counted as one share is returned to the Israeli Plan, each applicable share reserve will be credited with one share. To the extent that a share that was subject to an Award that counts as 1.28 shares is returned to the Israeli Plan, each applicable share reserve will be credited with 1.28 shares.
Share Counting
Shares of common stock repurchased by the company on the open market using the proceeds from the exercise of an Award shall not increase the number of shares available for future grant of Awards.
Substitute Awards
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 of Directors may grant Awards in substitution for any options or other stock or stock-based awards granted by such entity or an Affiliate thereof. Substitute Awards may be granted on such terms, as the Board of Directors deems appropriate in the circumstances, notwithstanding any limitations on Awards contained in the Israeli Plan. Substitute Awards will not count against the Israeli Plan’s overall share limit.
For the purposes of the Israeli Plan, “Affiliate” means any person or entity (i) that holds at least 10% of the issued share capital of the company or of its voting power, (ii) in which the company holds at least 10% of the issued share capital or voting power, or (iii) in which a company under clause (i) above also holds at least 10% of its issued share capital or voting power.
Limitation on Repricing
Except in connection with a corporate transaction involving the company (including, without limitation, any stock dividend, stock split, extraordinary cash dividend, recapitalization, reorganization, merger, consolidation,split-up,spin-off, combination, or exchange of shares), the terms of outstanding Awards may not, without stockholder approval, be amended to reduce the exercise price of outstanding options or SARs or cancel outstanding options or SARs in exchange for cash, other Awards or options or SARs with an exercise price that is less than the exercise price of the original options or SARs. The company would not take any action that would constitute a repricing under the Nasdaq rules without prior shareholder approval.
Amendment or Termination
No Award may be made under the Israeli Plan after November 15, 2028 but Awards previously granted may extend beyond that date. The Board of Directors may at any time amend, suspend or terminate the Israeli Plan; provided that no amendment requiring stockholder approval under any applicable legal, regulatory or listing requirement will become effective until such stockholder approval is obtained. No Award will be made that is conditioned upon stockholder approval of any amendment to the Israeli Plan.
Israeli Taxation
The Israeli Plan is intended to comply with the requirements set by Israeli law in general, and in particular with the provisions of the Tax Ordinance, as may be amended or replaced from time to time. Subject to the provisions of the Tax Ordinance and applicable law:
All grants of Awards to Israeli Employees, directors and office holders of the company, other than to a Controlling Stockholder, shall be of 102 Awards; and
All grants of Awards to Israeli Consultants, contractors or Controlling Stockholders of the company shall be of 3(i) Awards.
For the purposes of the Israeli Plan, “102 Award” means a grant of an Award to an Israeli Employee, Director or other office holder of the company, other than to a Controlling Stockholder, pursuant to the provisions of Section 102 of the Tax Ordinance, the 102 Rules, and any other regulations, rulings, procedures or clarifications promulgated thereunder; provided, however, that no such Award shall be settled in cash (unless a special approval from the Israeli Tax Authority is obtained).
For the purposes of the Israeli Plan, “3(i) Award” means a grant of an Option or Restricted Stock Unit (“RSU”) to an Israeli Consultant, contractor or a Controlling Stockholder of the company pursuant to the provisions of Section 3(i) of the Tax Ordinance and the rules and regulations promulgated thereunder.
The following is a summary of the Israeli income tax consequences that generally will arise with respect to Awards granted under the Israeli Plan. This summary is general and does not purport to be comprehensive. It is based on the Israeli tax laws in effect as of the date of this proxy statement. Changes to those laws could alter the tax consequences described below.
According to the Company’s tax route election, 102 Awards granted under the Israeli Plan to Employees will be subject to the “Capital Gains Tax Route” of Section 102 of the Tax Ordinance.
Awards granted under the Israeli Plan to participants who are not Employees do not qualify under the Capital Gains Tax Route, and are generally subject to Section 3(i) of the Tax Ordinance.
The Capital Gains Tax Route generally provides for a reduced tax rate of 25% on gains realized upon the sale of the Award’s underlying shares or their transfer and release from the Trustee (the “Taxation Date”), subject to the fulfillment of certain procedures and conditions, including, (i) filing of the Israeli Plan with the Israeli Tax Authority at least 30 days prior to any grant of 102 Awards; (ii) deposit of such Awards (or shares issued upon their exercise) for a requisite period of time (currently, 24 months from the date of grant) (the “Holding Period”) with a trustee approved by the Israeli Tax Authority (the “Trustee”). Notwithstanding the above, in any event where the exercise price of the underlying shares subject to the Awards is less than the fair market value of the underlying shares at the time of grant of the Awards (calculated as the average value of a company’s shares on the 30 trading days preceding the date of grant), such amount will be deemed ordinary income of the Award holder, taxed, on the Taxation Date, at the applicable marginal tax rate (up to 50% in 2018, including surtax) together with health insurance and social security insurance payments.
If the requirements of Section 102 for the allocation of Awards according to the Capital Gains Tax Route are not met (for example, upon sale of the underlying shares prior to the lapse of the Holding Period), the benefit attributed to the Award holder as a result of the grant of such Awards will be taxed as ordinary income at applicable marginal income tax rates (together with health insurance and social security insurance payments).
For as long as the restricted stock or the shares issued upon exercise of Awards are registered in the name of the Trustee, the voting rights with respect to such shares will remain with the Trustee.
Under the Capital Gains Tax Route, a company, or its Israeli subsidiary, as the case may be, is generally not entitled to recognize a deduction for Israeli tax purposes on the gain recognized by the Award holder upon sale of the shares underlying the Awards or release from trust (except for such amount that will be deemed ordinary income of the Award holder as explained above).
The Israeli subsidiary of the Company will be required to withhold applicable tax (and social security and national health insurance charges, if applicable) at source on behalf of the Award holder and may be required to pay social security and national health insurance charges.
Generally, with respect to a holder of an Award under Section 3(i) of the Tax Ordinance that is not registered for trade, the taxable event shall take place on the date of exercise of the Award into shares, and the
benefit will be classified as ordinary income subject to marginal tax rates (if the participant is an individual) or corporate tax rates (if the participant is a corporation) (together with health insurance and social security insurance payments). Restricted Stock granted to anon-Employee will be taxed on its issuance date as ordinary income.
The Board recommends a vote FOR Proposal 4.
PROPOSAL 5—RATIFICATION OF THE SELECTION OF REGISTERED PUBLIC ACCOUNTING FIRM
4.
the enclosed proxy card, in the enclosed postage-prepaid envelope, or vote by phone or internet according to the instructions on the proxy card, as promptly as possible. If the shares you own are held in “street name” by a bank or broker, please follow the voting instructions provided to you by your bank or broker. If you are a stockholder of record and attend the meeting in person, you may vote your stock personally even if you have sent in your proxy card or voted by phone or internet. If you hold your shares in street name and wish to vote in person at the annual meeting, please contact your bank or broker for instructions.
By order of the Board of Directors, | |||
/s/ Joseph L. Mullen | |||
Joseph L. Mullen | |||
Chairman of the Board of Directors |
18, 2019
AMENDMENT NO. 7 TO 2009
The 2009 Stock Incentive Plan of Bottomline Technologies (de), Inc., pursuant to Section 11(d) thereof, is hereby amended as follows:
Section 4(a)(1) is hereby amended by deleting the first sentence thereof and inserting the following new first sentence to read in its entirety as follows:
“(1)Authorized Number of Shares. Subject to adjustment under Section 9, Awards may be made under the Plan for up to (i) 14,950,000 shares of common stock, $0.001 par value per share, of the Company (the “Common Stock”), plus (ii) such additional number of shares of Common Stock as is equal to the number of shares of Common Stock subject to awards granted under the Company’s 1998 Director Stock Option Plan, the Company’s 2000 Stock Incentive Plan and the Company’s 1997 Stock Incentive Plan (Amended & Restated) (collectively, the “Existing Plans”) 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).”
Section 5(b) is hereby amended by deleting the third sentence thereof and inserting the following new third sentence to read in its entirety as follows:
“No more than 14,950,000 shares of Common Stock may be issued in the form of Incentive Stock Options under the Plan.”
Approved by the Annual Meeting Committee of the Board of Directors on October 8, 2018, pursuant to delegated authority granted by the Board of Directors on September 13, 2018.
Approved by Stockholders on , 2018.
BOTTOMLINE TECHNOLOGIES (de), INC.
2009 STOCK INCENTIVE PLAN
1. | Purpose |
2. | Eligibility |
3. | Administration and Delegation |
(d) Non-Employee Directors
4. | Stock Available for Awards |
Code. Shares of Common Stock issued under the Plan may consist in whole or in part of authorized but unissued shares or treasury shares.
SAR shall be treated as a single Award. The per Participant limit described in this Section 4(b) shall be construed and applied consistently with Section 162(m) of the Code or any successor provision thereto, and the regulations thereunder (“Section 162(m)”).
5. | Stock Options |
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;
(6)
(6) | by any combination of the above permitted forms of payment. |
(g) Limitation on Repricing. Except in connection with a corporate transaction involving the Company (including, without limitation, any stock dividend, stock split, extraordinary cash dividend, recapitalization, reorganization, merger, consolidation,split-up,spin-off, combination, or exchange of shares), the terms of outstanding Awards may not, without stockholder approval be amended to reduce the exercise price of outstanding Options orcanceled option, (3) cancel outstanding Options in exchange for a cash other Awards or Options or SARspayment any outstanding Option with an exercise price that is less thanper share above the exercise pricethen-current Fair Market Value of the original Options.
Common Stock, or (4) take any other action under the Plan that constitutes a “repricing” within the meaning of the rules of Nasdaq.
6. | Stock Appreciation Rights |
(except to the extent designated by the Board in connection with a Reorganization Event or a Change in Control Event) and will be exercisable in accordance with the procedure required for exercise of the related Option; (ii) the SAR will terminate and no longer be exercisable upon the termination or exercise of the related Option, except to the extent designated by the Board in connection with a Reorganization Event or a Change in Control Event and except that a SAR granted with respect to less than the full number of shares covered by an Option will not be reduced until the number of shares as to which the related Option has been exercised or has terminated exceeds the number of shares not covered by the SAR; (iii) the Option will terminate and no longer be exercisable upon the exercise of the related SAR; and (iv) the SAR will be transferable only with the related Option.
(2) Independent SARs. A SAR not expressly granted in tandem with an Option will become exercisable at such time or times, and on such conditions, as the Board may specify in the SAR Award.
(c) Measurement Price. The Board shall establish the measurement price of each SAR and specify it in the applicable SAR agreement. The measurement price shall not be less than 100% of the Fair Market Value on the date the SAR is granted; provided that if the Board approves the grant of a SAR with a measurement price to be determined on a future date, the measurement price shall be not less than 100% of the Fair Market Value on such future date.
(d) Duration of SARs. Each SAR shall be exercisable at such times and subject to such terms and conditions as the Board may specify in the applicable SAR agreement;provided, however, that no SAR will be granted with a term in excess of 10 years.
(e) Exercise of SARs. SARs 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 Company, together with any other documents required by the Board.
(f) Limitation on Repricing. Except in connection with a corporate transaction involving the Company (including, without limitation, any stock dividend, stock split, extraordinary cash dividend, recapitalization, reorganization, merger, consolidation,
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(a) General. The Board may grant Awards entitling recipients to acquire shares of Common Stock (“Restricted 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. Instead of granting Awards for Restricted Stock, the Board may grant Awards entitling the recipient to receive shares of Common Stock or cash to be delivered at the time such Award vests (“Restricted Stock Units”) (Restricted Stock and Restricted Stock Units are each referred to herein as a “Restricted Stock Award”).
(b) Terms and Conditions for All Restricted Stock Awards. The Board shall determine the terms and conditions of a Restricted Stock Award, including the conditions for vesting and repurchase (or forfeiture) and the issue price, if any; provided, however, that the minimum vesting period of any Restricted Stock Award made on or after November 17, 2016 shall be at least one year.
(c) Additional Provisions Relating to Restricted Stock.
(1) Dividends. Participants holding shares of Restricted Stock will be entitled to all ordinary cash dividends paid with respect to such shares, unless otherwise provided by the Board. Unless otherwise provided by the Board, if any dividends or distributions are paid in shares, or consist of a dividend or distribution to holders of Common Stock other than an ordinary cash dividend, the shares, cash or other property will be subject to the same restrictions on transferability and forfeitability as the shares of Restricted Stock with respect to which they were paid. Each dividend payment will be made no later than the end of the calendar year in which the dividends are paid to shareholders of that class of stock or, if later, the 15th day of the third month following the date the dividends are paid to shareholders of that class of stock.
(2) Stock Certificates. The Company may require that any stock certificates issued in respect of shares of Restricted Stock shall be deposited in escrow 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.
(d) Additional Provisions Relating to Restricted Stock Units.
(1) Settlement. Upon the vesting of and/or lapsing of any other restrictions (i.e., settlement) with respect to each Restricted Stock Unit, the Participant shall be entitled to receive from the Company one share of Common Stock or an amount of cash equal to the Fair Market Value of one share of Common Stock, as provided in the applicable Award agreement. The Board may, in its discretion, provide that settlement of Restricted Stock Units shall be deferred, on a mandatory basis or at the election of the Participant in a manner that complies with Section 409A of the Code.
(2) Voting Rights. A Participant shall have no voting rights with respect to any Restricted Stock Units.
(3) Dividend Equivalents. To the extent provided by the Board, in its sole discretion, a grant of Restricted Stock Units may provide Participants with the right to receive an amount equal to any dividends or other distributions declared and paid on an equal number of outstanding shares of Common Stock (“Dividend Equivalents”). Dividend Equivalents may be paid currently or credited to an account for the Participants, may be settled in cash and/or shares of Common Stock and may be subject to the same restrictions on transfer and forfeitability as the Restricted Stock Units with respect to which paid, as determined by the Board in its sole discretion, subject in each case to such terms and conditions as the Board shall establish, in each case to be set forth in the applicable Award agreement.
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(a) General. Other Awards of shares of Common Stock, and other Awards that are valued in whole or in part by reference to, or are otherwise based on, shares of Common Stock or other property, may be granted hereunder to Participants (“Other Stock-Based-Awards”), including without limitation Awards entitling recipients to receive shares of Common Stock to be delivered in the future. Such Other Stock-Based Awards shall also be available as a form of payment in the settlement of other Awards granted under the Plan or as payment in lieu of compensation to which a Participant is otherwise entitled. Other Stock-Based Awards may be paid in shares of Common Stock or cash, as the Board shall determine. The Company may also grant other Awards denominated in cash rather than shares of Common Stock (“Cash-Based Awards”).
(b) Terms and Conditions. Subject to the provisions of the Plan, the Board shall determine the terms and conditions of each Other Stock-Based Award or Cash-Based Awards, including any purchase price applicable thereto.
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(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 dividend or distribution to holders of Common Stock other than an ordinary cash dividend, (i) the number and class of securities available under the Plan, (ii) thesub-limits and share counting rules set forth in Sections 4(a) and 4(b), (iii) the number and class of securities and exercise price per share of each outstanding Option, (iv) the share- andper-share provisions and the measurement price of each SAR, (v) the number of shares subject to and the repurchase price per share subject to each outstanding Restricted Stock Award and (vi) the share- andper-share-related provisions and the purchase price, if any, of each outstanding Other Stock-Based Award, shall be equitably adjusted by the Company (or substituted Awards may be made, if applicable) in the manner determined by the Board. Without limiting the generality of 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 an outstanding 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.
(b) Reorganization Events.
(1) Definition. A “Reorganization Event” shall mean: (a) any merger or consolidation of the Company with or into another entity as a result of which all of the Common Stock of the Company is converted into or exchanged for the right to receive cash, securities or other property or is cancelled, (b) any transfer or disposition of all of the Common Stock of the Company for cash, securities or other property pursuant to a share exchange or other transaction or (c) any liquidation or dissolution of the Company.
(2) Consequences of a Reorganization Event on Awards Other than Restricted Stock Awards. In connection with a Reorganization Event, the Board may take any one or more of the following actions as to all or any (or any portion of) outstanding Awards other than Restricted Stock Awards on such terms as the Board determines: (i) provide that Awards shall be assumed, or substantially equivalent Awards shall be substituted, by the acquiring or succeeding corporation (or an affiliate thereof), (ii) upon written notice to a Participant, provide that the Participant’s unexercised Awards will terminate immediately prior to the consummation of such Reorganization Event unless exercised by the Participant within a specified period following the date of such notice, (iii) provide that outstanding Awards shall become exercisable, realizable, or deliverable, or restrictions applicable to an Award shall lapse, in whole or in part prior to or upon such Reorganization Event, (iv) 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 surrendered in the Reorganization Event (the “Acquisition Price”), make or provide for a cash payment to a Participant equal to the excess, if any, of (A) the Acquisition Price times the number of shares of Common Stock subject to the Participant’s Awards (to the extent the exercise price does not exceed the Acquisition Price) over (B) the aggregate exercise price of all such outstanding Awards and any applicable tax withholdings, in exchange for the termination of such Awards, (v) provide that, in connection with a liquidation or dissolution of the Company, Awards shall convert into the right to receive liquidation proceeds (if applicable, net of the exercise price thereof and any applicable tax withholdings) and (vi) any combination of the foregoing. In taking any of the actions permitted under this Section 9(b), the Board shall not be obligated by the Plan to treat all Awards, all Awards held by a Participant, or all Awards of the same type, identically.
For purposes of clause (i) above, an Option shall be considered 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 value (as determined by the Board) to the per share consideration received by holders of outstanding shares of Common Stock as a result of the Reorganization Event.
(3) Consequences of a Reorganization Event on Restricted Stock Awards. Upon the occurrence of a Reorganization Event other than a liquidation or dissolution of the Company, 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, unless the Board determines otherwise, 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;provided,however, that the Board may provide for termination or deemed satisfaction of such repurchase or other rights under the instrument evidencing any Restricted Stock Award or any other agreement between a Participant and the Company, either initially or by amendment. Upon the occurrence of a Reorganization Event involving the liquidation or dissolution of the Company, 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, all restrictions and conditions on all Restricted Stock Awards then outstanding shall automatically be deemed terminated or satisfied.
(c) Change in Control Events.
(1) Definitions.
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(I) the acquisition by an individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934 (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 Rule13d-3 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: (1) 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), (2) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company, or (3) 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 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); or
(IV) the liquidation or dissolution of the Company.
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(2) Effect on Options. Notwithstanding the provisions of Section 9(b), 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 each Option shall be accelerated in part so that the number of shares that would otherwise have become vested on any date within one year after the date of the Change in Control Event shall immediately become vested. Subject to the following sentence, the remaining shares shall continue to become vested in each case one year in advance of the original vesting schedule set forth for such Option. Additionally, each Option shall be immediately exercisable in full if, on or prior to the second anniversary of the date of the consummation of the Change in Control Event, the Participant’s employment with the Company or the acquiring or succeeding corporation is terminated for Good Reason by the Participant or is terminated without Cause by the Company or the acquiring or succeeding corporation.
(3) Effect on Restricted Stock Awards. Notwithstanding the provisions of Section 9(b), 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 each Restricted Stock Award shall be accelerated in part so that the number of shares that would otherwise have become vested on any date within one year after the date of the Change in Control Event shall immediately become vested. Subject to the following sentence, the remaining shares shall continue to become vested in each case one year in advance of the original vesting schedule set forth for such Restricted Stock Award. Additionally, each Restricted Stock Award shall immediately become free from all conditions or restrictions if, on or prior to the second anniversary of the date of the consummation of the Change in Control Event, the Participant’s employment with the Company or the acquiring or succeeding corporation is terminated for Good Reason by the Participant or is terminated without Cause by the Company or the acquiring or succeeding corporation.
(4) Effect on SARs and Other Stock-Based Awards. The Board may specify in an Award at the time of the grant the effect of a Change in Control Event on any SAR and Other Stock-Based Award.
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(a) Transferability of Awards. 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 or, other than in the case of an Incentive Stock Option, pursuant to a qualified domestic relations order, and, during the life of the Participant, shall be exercisable only by the Participant;provided, however, that the Board may permit or provide in an Award for the gratuitous transfer of the Award by the Participant to or for the benefit of any immediate family member, family trust or other entity established for the benefit of the Participant and/or an immediate family member thereof if, with respect to such proposed transferee, the Company would be eligible to use a FormS-8 for the registration of the sale of the Common Stock subject to such Award under the Securities Act of 1933, as amended; provided, further, that the Company shall not be required to recognize any such transfer until such time as the Participant and such permitted transferee shall, as a condition to such transfer, deliver to the Company a written instrument in form and substance satisfactory to the Company confirming that such transferee shall be bound by all of the terms and conditions of the Award. 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, termination or other cessation of employment, 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, or the Participant’s legal representative, conservator, guardian or Designated Beneficiary, may exercise rights under the Award.
(e) Withholding. The Participant must satisfy all applicable federal, state, and local or other income and employment tax withholding obligations before the Company will deliver stock certificates or otherwise recognize ownership of Common Stock under an Award. The Company may decide to satisfy the withholding obligations through additional withholding on salary or wages. If the Company elects not to or cannot withhold from other compensation, the Participant must pay the Company the full amount, if any, required for withholding or have a broker tender to the Company cash equal to the withholding obligations. Payment of withholding obligations is due before the Company will issue any shares on exercise or release from forfeiture of an Award or, if the Company so requires, at the same time as payment of the exercise price unless the Company determines otherwise. If provided for in an Award or approved by the Board in its sole discretion, a Participant may satisfy such tax obligations in whole or in part by delivery (either by actual delivery or attestation) of shares of Common Stock, including shares retained from the Award creating the tax obligation, valued at their Fair Market Value;provided, however, except as otherwise provided by the Board, 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). Shares used to satisfy tax withholding requirements cannot be subject to any repurchase, forfeiture, unfulfilled vesting or other similar requirements.
(f) Amendment of Award. Except as otherwise provided inSection 11(d) with respect to actions requiring shareholder approval, 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. The Participant’s consent to such action shall be required unless (i) the Board determines that the action, taking into account any related action, would not materially and adversely affect the Participant’s rights under the Plan or (ii) the change is permitted under Section 9 hereof.
(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.
(i) MinimumOne-Year Vesting. The terms and conditions of any Award made or granted on or after November 17, 2016 shall provide that no part of such Award shall vest or become exercisable prior to the first anniversary of the date such Award is made or granted, except that an Award may provide that it shall immediately vest or become immediately exercisable, in whole or in part, upon a Participant’s death, disability, termination from employment by the Company other than for Cause, or upon the occurrence of a Change of Control Event.
(j) CEO Grants and Minimum Holding Period. Any Award made or granted on or after November 17, 2016 to the Company’s Chief Executive Officer shall (i) have a vesting schedule of more than four years, and (ii) be subject to an additional one year holding period before any sale or transfer of shares that shall have vested may take place, other than as provided for in Section 10(e) relative to the sale of shares to cover minimum statutory tax obligations in respect of the vesting of such shares.
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(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.
(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.
(c) Effective Date and Term of Plan. The Plan shall become effective on the date the Plan is approved by the Company’s stockholders (the “Effective Date”). No Awards shall be granted under the Plan after the expiration of 10 years from the Effective Date, 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 (i) 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 the Company’s stockholders approve such amendment if required by Section 162(m) (including the vote required under Section 162(m)); (ii) no amendment that would require stockholder approval under the rules of the Nasdaq Stock Market (“Nasdaq”) may be made effective unless and until the Company’s stockholders approve such amendment; and (iii) if the Nasdaq amends its corporate governance rules so that such rules no longer require stockholder approval of Nasdaq “material amendments” to equity compensation plans, then, from and after the effective date of such amendment to the Nasdaq rules, no amendment to the Plan (A) materially increasing the number of shares authorized under the Plan (other than pursuant to Section 4(c) or 9), (B) expanding the types of Awards that may be granted under the Plan, or (C) materially expanding the class of participants eligible to participate in the Plan shall be effective unless and until the Company’s stockholders approve such amendment. In addition, if at any time the approval of the Company’s stockholders is required as to any other modification or amendment under Section 422 of the Code or any successor provision with respect to Incentive Stock Options, the Board may not effect such modification or amendment without such approval. Unless otherwise specified in the amendment, any amendment to the Plan adopted in accordance with this Section 11(d) shall apply to, and be binding on the holders of, all Awards outstanding under the Plan at the time the amendment is adopted, provided the Board determines that such amendment does not materially and adversely affect the rights of Participants under the Plan. No Award shall be made that is conditioned upon stockholder approval of any amendment to the Plan.
(e) Authorization ofSub-Plans. The Board may from time to time establish one or moresub-plans under the Plan for purposes of satisfying applicable securities or tax laws of various jurisdictions. The Board
shall establish such sub-plans by adopting supplements to the Plan containing (i) such limitations on the Board’s discretion under the Plan as the Board deems necessary or desirable or (ii) such additional terms and conditions not otherwise inconsistent with the Plan as the Board shall deem necessary or desirable. All supplements adopted by the Board shall be deemed to be part of the Plan, but each supplement shall apply only to Participants within the affected jurisdiction and the Company shall not be required to provide copies of any supplement to Participants in any jurisdiction which is not the subject of such supplement.
(f) Non U.S. Employees. Awards may be granted to Participants who arenon-U.S. citizens or residents employed outside the United States, or both, on such terms and conditions different from those applicable to Awards to Participants employed in the United States as may, in the judgment of the Board, be necessary or desirable in order to recognize differences in local law or tax policy. The Board also may impose conditions on the exercise or vesting of Awards in order to minimize the Board’s obligation with respect to tax equalization for Participants on assignments outside their home country. The Board may approve such supplements to or amendments, restatements or alternative versions of the Plan as it may consider necessary or appropriate for such purposes, without thereby affecting the terms of this Plan as in effect for any other purpose, and the Secretary or other appropriate officer of the Company may certify any such document as having been approved and adopted in the same manner as this Plan.
(g) Compliance with Section 409A of the Code. Except as provided in individual Award agreements initially or by amendment, if and to the extent any portion of any payment, compensation or other benefit provided to a Participant in connection with his or her employment termination is determined to constitute “nonqualified deferred compensation” within the meaning of Section 409A of the Code and the Participant is a specified employee as defined in Section 409A(a)(2)(B)(i) of the Code, as determined by the Company in accordance with its procedures, by which determination the Participant (through accepting the Award) agrees thathe or she is bound, such portion of the payment, compensation or other benefit shall not be paid before the day that is six months plus one day after the date of “separation from service” (as determined under Section 409A of the Code) (the “New Payment Date”), except as Section 409A of the Code may then permit. The aggregate of any payments that otherwise would have been paid to the Participant during the period between the date of separation from service and the New Payment Date shall be paid to the Participant in a lump sum on such New Payment Date, and any remaining payments will be paid on their original schedule.
The Company makes no representations or warranty and shall have no liability to the Participant or any other person if any provisions of or payments, compensation or other benefits under the Plan are determined to constitute nonqualified deferred compensation subject to Section 409A of the Code but do not to satisfy the conditions of that section.
(h) Limitations on Liability.Notwithstanding any other provisions of the Plan, no individualacting as a director, officer, other employee, or agent of the Company will be liable to any Participant, former Participant, spouse, beneficiary, or any other person for any claim, loss, liability, or expense incurred in connection with the Plan, nor will such individual be personally liable with respect to the Plan because of any contract or other instrument he or she executes in his or her capacity as a director, officer, other employee, or agent of the Company. The Company will indemnify and hold harmless each director, officer, other employee, or agent of the Company to whom any duty or power relating to the administration or interpretation of the Plan has been or will be delegated, against any cost or expense (including attorneys’ fees) or liability (including any sum paid in settlement of a claim with the Board’s approval) arising out of any act or omission to act concerning this Plan unless arising out of such person’s own fraud or bad faith.
(i) 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, excludingchoice-of-law principles of the law of such state that would require the application of the laws of a jurisdiction other than such state.
Appendix B
BOTTOMLINE TECHNOLOGIES (de), INC.
2018 ISRAELI SPECIAL PURPOSE STOCK INCENTIVE PLAN
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The purpose of this 2018 Israeli Special Purpose 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 are expected to make important contributions to the Company and by providing such persons with equity ownership opportunities that are intended to better align the interests of such persons with those of the Company’s stockholders. Except where the context otherwise requires, the term “Company” shall include the Company and 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 thereunder (the “Code”) and any other business venture (including, without limitation, joint venture or limited liability company) in which the Company has a controlling interest, as determined by the Board of Directors of the Company (the “Board”).
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All of the Company’s Israeli employees, officers, and directors (“Directors”)are eligible to be granted options, stock appreciation rights (“SARs”), restricted stock, restricted stock units and other stock-based awards (each, an “Award”) under the Plan. Any Israeli person, including an advisor, contractor andsub-contractor, engaged by the Company to render services to it, who is not an Employee (“Consultant”)(as such terms are defined and interpreted for purposes of FormS-8 (or any successor form)) are also eligible to be granted Awards. Each person who is granted an Award under the Plan and who is a resident of the State of Israel or deemed to be resident of the State of Israel for tax purposes is deemed a “Participant.”
For the purposes of this Plan, “Employee” means any person, including officers and Directors, employed or engaged by the Company. Neither service as a Director nor payment of director’s fees by the Company will be sufficient to constitute “employment” by the Company.
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(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 construe and interpret the terms of the Plan and any Award agreements entered into under the Plan. 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.
(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 or the officers referred to in Section 3(c) to the extent that the Board’s powers or authority under the Plan have been delegated to such Committee or officers.
(c) Delegation to Officers. To the extent permitted by applicable law, the Board may delegate to one or more officers of the Company the power to grant Options and other Awards that constitute rights under Delaware law (subject to any limitations under the Plan) to employees or officers of the Company or any of its
present or future subsidiary corporations and to exercise such other powers under the Plan as the Board may determine, provided that the Board shall fix the terms of the Awards to be granted by such officers (including the exercise price of the Awards, which may include a formula by which the exercise price will be determined) and the maximum number of shares subject to such Awards that the officers may grant; provided further, however, that no officer shall be authorized to grant Awards to any “executive officer” of the Company (as defined by Rule3b-7 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) or to any “officer” of the Company (as defined by Rule16a-1 under the Exchange Act). The Board may not delegate authority under this Section 3(c) to grant restricted stock, unless Delaware law then permits such delegation.
(d) Awards toNon-Employee Directors. Discretionary Awards tonon-employee directors will only be granted and administered by a Committee, all of the members of which are independent directors as defined by Section 5605(a)(2) of the Nasdaq Marketplace Rules.
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(a) Number of Shares; Share Counting.
(1) Authorized Number of Shares. Subject to adjustment under Section 9, Awards may be made under the Plan for up to 200,000 shares of common stock, $0.001 par value per share, of the Company (the “Common Stock”).
(2) Fungible Share Pool. Subject to adjustment under Section 9, any Award that is not a Full-Value Award shall be counted against the share limits specified in Section 4(a)(1) as one share for each share of Common Stock subject to such Award and any Award that is a Full-Value Award shall be counted against the share limits specified in Section 4(a)(1) as 1.28 shares for each one share of Common Stock subject to such Full-Value Award.“Full-Value Award” means any Restricted Stock Award or other Stock-Based Award with a per share price or per unit purchase price lower than 100% of Fair Market Value (as defined below) on the date of grant. To the extent a share that was subject to an Award that counted as one share is returned to the Plan pursuant to Section 4(a)(3), each applicable share reserve will be credited with one share. To the extent that a share that was subject to an Award that counts as 1.28 shares is returned to the Plan pursuant to Section 4(a)(3), each applicable share reserve will be credited with 1.28 shares.
(3) Share Counting. For purposes of counting the number of shares available for the grant of Awards under the Plan, (i) all shares of Common Stock covered by independent SARs shall be counted against the number of shares available for the grant of Awards; (ii) if any Award (A) 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 (B) 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;provided, however, in the case of a 102 Award (as defined in section 12(a) below), the foregoing shall be subject to any limitations under the Code; and provided further, in the case of independent SARs, that the full number of shares subject to any stock-settled SAR shall be counted against the shares available under the Plan and against the sublimits listed in the first clause of this Section in proportion to the portion of the SAR actually exercised regardless of the number of shares actually used to settle such SAR upon exercise; (iii) shares of Common Stock delivered (either by actual delivery, attestation, or net exercise) to the Company by a Participant to (A) purchase shares of Common Stock upon the exercise of an Award or (B) satisfy tax withholding obligations (including shares retained from the Award creating the tax obligation) shall not be added back to the number of shares available for the future grant of Awards; and (iv) shares of Common Stock repurchased by the Company on the open market using the proceeds from the exercise of an Award shall not increase the number of shares available for future grant of Awards.
(b) Per-Participant Limit. Subject to adjustment under Section 9, 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 per calendar year. For purposes of the foregoing limit, the combination of an Option in tandem with an SAR shall be treated as a single Award.
(c) Substitute Awards. 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 Awards in substitution for any options or other stock or stock-based awards granted by such entity or an Affiliate thereof. Substitute Awards may be granted on such terms as the Board deems appropriate in the circumstances, notwithstanding any limitations on Awards contained in the Plan. Substitute Awards shall not count against the overall share limit set forth in Section 4(a)(1) or any sublimits contained in the Plan.
For the purposes of this Plan, “Affiliate” means any person or entity (i) that holds at least 10% of the issued share capital of Bottomline or of its voting power, (ii) in which Bottomline holds at least 10% of the issued share capital or voting power, or (iii) in which a company under clause (i) above also holds at least 10% of its issued share capital or voting power.
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(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.
(b) Exercise Price. The Board shall establish the exercise price of each Option and specify the exercise price in the applicable option agreement. The exercise price shall be not less than 100% of the Fair Market Value (as defined below) on the date the Option is granted; provided that if the Board approves the grant of an Option with an exercise price to be determined on a future date, the exercise price shall be not less than 100% of the Fair Market Value on such future date.
(c) 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;provided, however, that no Option will be granted with a term in excess of 10 years.
(d) Exercise of Options. 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 Company, together with payment in full as specified in Section 6(e) for the number of shares for which the Option is exercised. Shares of Common Stock subject to the Option will be delivered by the Company as soon as practicable following exercise.
(e) 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 may otherwise be provided in the applicable 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) to the extent provided for in the applicable option agreement or approved by the Board, in its sole discretion, by delivery (either by actual delivery or attestation) 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 (“Fair Market Value”), provided (i) such method of payment is then permitted under applicable law, (ii) such Common Stock, if acquired directly from the Company, was owned by the Participant for such minimum period of time, if any, as may be established by the Board in its discretion and (iii) such Common Stock is not subject to any repurchase, forfeiture, unfulfilled vesting or other similar requirements;
(4) to the extent provided for in the applicable Option agreement or approved by the Board in its sole discretion, by delivery of a notice of “net exercise” to the Company, as a result of which the Participant would receive the number of shares of Common Stock underlying the Option so exercised reduced by the number of shares of Common Stock equal to the aggregate exercise price of the Option divided by the Fair Market Value on the date of exercise;
(5) to the extent permitted by applicable law and provided for in the applicable Option agreement or approved 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
(6) by any combination of the above permitted forms of payment.
(f) Limitation on Repricing. Except in connection with a corporate transaction involving the Company (including, without limitation, any stock dividend, stock split, extraordinary cash dividend, recapitalization, reorganization, merger, consolidation,split-up,spin-off, combination, or exchange of shares), the terms of outstanding Awards may not, without stockholder approval be amended to reduce the exercise price of outstanding Options or cancel outstanding Options in exchange for cash, other Awards or Options or SARs with an exercise price that is less than the exercise price of the original Options.
(g) No Reload Options. No Option granted under the Plan shall contain any provision entitling the Participant to the automatic grant of additional Options in connection with any exercise of the original Option.
(h) No Dividend Equivalents. No option shall provide for the payment or accrual of dividend equivalents.
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(a) General. The Board may grant Awards consisting of SARs entitling the holder, upon exercise, to receive an amount of Common Stock determined by reference to appreciation, from and after the date of grant, in the Fair Market Value of a share of Common Stock over the measurement price established pursuant to Section 6(c). The date as of which such appreciation is determined shall be the exercise date.
(b) Grants. SARs may be granted in tandem with, or independently of, Options granted under the Plan.
(1) Tandem Awards. When SARs are expressly granted in tandem with Options, (i) the SAR will be exercisable only at such time or times, and to the extent, that the related Option is exercisable (except to the extent designated by the Board in connection with a Reorganization Event or a Change in Control Event) and will be exercisable in accordance with the procedure required for exercise of the related Option; (ii) the SAR will terminate and no longer be exercisable upon the termination or exercise of the related Option, except to the extent designated by the Board in connection with a Reorganization Event or a Change in Control Event and except that a SAR granted with respect to less than the full number of shares covered by an Option will not be reduced until the number of shares as to which the related Option has been exercised or has terminated exceeds the number of shares not covered by the SAR; (iii) the Option will terminate and no longer be exercisable upon the exercise of the related SAR; and (iv) the SAR will be transferable only with the related Option.
7. | Restricted Stock; Restricted Stock Units |
RSUs may include performance-based awards.
(2) shares of Restricted Stock Certificates. Subject(“
Stock specified in the Award agreement or (if so provided in the applicable Award agreement or otherwise determined by the Board) an amount of cash equal to the Fair Market Value of such number of shares or a combination thereof. The Board may provide that settlement of RSUs shall be deferred, on a mandatory basis or at the election of the Participant, in a manner that complies with Section 409A of the Code or any successor provision thereto, and the regulations thereunder (“
Section 409A”).
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(“
Dividend Equivalents”). Dividend Equivalents will be credited to an account for the Participant, may be settled in cash and/or shares of Common Stock as set forth in the applicable Award agreement, and shall be subject to the same restrictions on transfer and forfeitability as the RSUs with respect to which paid. No interest will be paid on Dividend Equivalents.Stock or cash, as the Board shall determine.
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of (A) the Acquisition Price times the number of shares of Common Stock subject to the Participant’s Awards (tovested portion of the extentAward (after giving effect to any acceleration of vesting that occurs upon or immediately prior to such Reorganization Event) multiplied by (B) the excess, if any, of (I) the Acquisition Price over (II) the exercise, price does not exceed the Acquisition Price) over (B) the aggregate exercisemeasurement or purchase price of all such outstanding AwardsAward and any applicable tax withholdings, in exchange for the termination of such Awards,Award, (v) provide that, in connection with a liquidation or dissolution of the Company, Awards shall convert into the right to receive liquidation proceeds (if applicable, net of the exercise, measurement or purchase price thereof and any applicable tax withholdings) and (vi) any combination of the foregoing. In taking any of the actions permitted under this Section 9(b), the Board shall not be obligated by the Plan to treat all Awards, all Awards held by a Participant, or all Awards of the same type, identically.
(A) | A “Change in Control Event” shall mean: |
shall not constitute a Change in Control Event: (1) 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), (2) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company, or (3) 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
vote generally in the election of directors (except to the extent that such ownership existed prior to the Business Combination); or
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10. | General Provisions Applicable to Awards |
the Award by the Participant to or for the benefit of any immediate family member, family trust or other entity established for the benefit of the Participant and/or an immediate family member thereof if with respect to such proposed transferee, the Company would be eligible to use a FormS-8 under the Securities Act for the registration of the sale of the Common Stock subject to such Award under the Securities Act of 1933, as amended;to such proposed transferee; provided further, that the Company shall not be required to recognize any such permitted transfer until such time as the Participant and such permitted transferee shall, as a condition to such transfer, deliver to the Company a written instrument in form and substance satisfactory to the Company confirming that such transferee shall be bound by all of the terms and conditions of the Award. References to a Participant, to the extent relevant in the context, shall include references to authorized transferees.
For the avoidance of doubt, nothing contained in this Section 10(a) shall be deemed to restrict a transfer to the Company.
shares have been satisfied, including any applicable securities laws and regulations 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.
11. | Miscellaneous |
Award.
In accepting an Award under the Plan, the Participant agrees to be bound by any clawback policy that the Company has in effect or may adopt in the future.
(e)
been or will be delegated, against any cost or expense (including attorneys’ fees) or liability (including any sum paid in settlement of a claim with the Board’s approval) arising out of any act or omission to act concerning this Plan unless arising out of such person’s own fraud or bad faith.
(f)
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(a) Definitions:
“3(i) Award” means a grant of an Option or Restricted Stock Unit (“RSU”) to an Israeli Consultant, contractor or a Controlling Stockholder of the Company pursuant to the provisions of Section 3(i) of the Tax Ordinance and the rules and regulations promulgated thereunder, or any other section of the Tax Ordinance that will be relevant for such issuance in the future.
“102 Award” means a grant of an Award to an Israeli Employee, Director or other office holder of the Company, other than to a Controlling Stockholder, pursuant to the provisions of Section 102 of the Tax Ordinance, the 102 Rules, and any other regulations, rulings, procedures or clarifications promulgated thereunder, or under any other section of the Tax Ordinance that will be relevant for such issuance in the future;provided, however, that no such Award shall be settled in cash (unless a special approval from the Israeli Tax Authority is obtained).
“102(c) Award” means a 102 Award that will not be subject to a Taxation Route, as detailed in Section 102(c) of the Tax Ordinance.
“102 Rules” means the Israeli Income Tax Rules (Tax Relief in Issuance of Shares to Employees), 2003.
“Beneficial Participant” means the Participant for the benefit of whom the Trustee holds an Award in Trust.
“Capital Gains Route” means the capital gains tax route under Section 102(b)(2) of the Tax Ordinance.
“Controlling Stockholder” means a “controlling shareholder” of the Company, as such term is defined in Section 32(9)(a) of the Tax Ordinance.
“Exercised Share” means a Common Stock issued upon exercise of an Award or vesting of an Award, as applicable, or, if applicable, a freely transferable Common Stock issued to a Participant not resulting from another type of Award.
“MinimumTrust Period” means the minimum period of time required under a Taxation Route for Awards and/or Exercised Shares to be held in Trust in order for the Beneficial Participant to enjoy to the fullest extent the tax benefits afforded under such Taxation Route, as prescribed at any time by Section 102 of the Tax Ordinance.
“Ordinary Income Route” means the ordinary income route under Section 102(b)(1) of the Tax Ordinance.
“Rights” means rights issued in respect of Exercised Shares, including bonus shares.
“Taxation Route” means each of the Ordinary Income Route or the Capital Gains Route.
“TaxOrdinance” means the Israeli Income Tax Ordinance [New Version], 1961, as amended.
“Trust” means the holding of an Award or Exercised Share by the Trustee in trust for the benefit of the Beneficial Participant, pursuant to the instructions of a Taxation Route.
“Trustee” means a trustee designated by the Board in accordance with the provisions of Section 12(d) below and, with respect to 102 Awards, approved by the Israeli Tax Authorities.
(b) General. This Plan is intended to comply with the requirements set by the Israeli law in general, and in particular with the provisions of the Israeli Tax Ordinance, as may be amended or replaced from time to time.
(c) Grant of Awards and Issuance of Shares.Subject to the provisions of the Tax Ordinance and applicable law:
(1) All grants of Awards to Israeli Employees, Directors and office holders of the Company, other than to a Controlling Stockholder, shall be of 102 Awards; and
(2) All grants of Awards to Israeli Consultants, contractors or Controlling Stockholders of the Company shall be of 3(i) Awards.
(d) Trust.
(1) General.
(a) In the event Awards are deposited with a Trustee, the Trustee shall hold each such Award and any Exercised Shares in Trust for the benefit of the Beneficial Participant.
(b) In accordance with Section 102 of the Tax Ordinance, the tax benefits afforded to 102 Awards (and any Exercised Shares) in accordance with the Ordinary Income Route or Capital Gains Route, as applicable, shall be contingent upon the Trustee holding such 102 Awards for the applicable Minimum Trust Period.
(c) With respect to 102 Awards granted to the Trustee, the following shall apply:
(i) A Participant granted 102 Awards shall not be entitled to sell the Exercised Shares or to transfer such Exercised Shares (or such 102 Awards) from the Trust prior to the lapse of the Minimum Trust Period; and
(ii) Any and all Rights shall be issued to the Trustee and held thereby until the lapse of the Minimum Trust Period, and such Rights shall be subject to the Taxation Route which is applicable to such Exercised Shares.
(d) Notwithstanding the aforesaid, Exercised Shares or Rights may be sold or transferred, and the Trustee may release such Exercised Shares or Rights from Trust, prior to the lapse of the Minimum Trust Period, provided however, that tax is paid or withheld in accordance with Section 102 of the Tax Ordinance and Section 7 of the 102 Rules, and any other provision in any other section of the Tax Ordinance and any regulation, ruling, procedure and clarification promulgated thereunder, that will be relevant, from time to time.
(e) The Company shall register the Exercised Shares issued to the Trustee pursuant to the Plan, in the name of the Trustee for the benefit of the Israeli Participants, in accordance with any
applicable laws, rules and regulations, until such time that such Shares are released from the Trust as herein provided, or shall act in any other manner in accordance with applicable law, ruling or guidelines of the Israeli Tax Authority.
(f) Subject to the terms hereof, at any time after the Awards are exercised or vested, with respect to any Exercised Shares the following shall apply:
(i) Upon the written request of any Beneficial Participant, the Trustee shall release from the Trust the Exercised Shares issued, on behalf of such Beneficial Participant,provided, however, that the Trustee shall not so release any such Exercised Shares to such Beneficial Participant unless the latter, prior to, or concurrently with, such release, provides the Trustee with evidence, satisfactory in form and substance to the Trustee, that payment of all taxes, if any, required to be paid upon such release has been secured.
(ii) Alternatively, subject to the terms hereof, provided the Shares are listed on a Stock Market, upon the written instructions of the Beneficial Participant to sell any Exercised Shares, the Company and/or the Trustee shall use their reasonable efforts to effect such sale and shall transfer such Shares to the purchaser thereof concurrently with the receipt of, or after having made suitable arrangements to secure, the payment of the proceeds of the purchase price in such transaction. The Company and/or the Trustee, as applicable, shall withhold from such proceeds any and all taxes required to be paid in respect of such sale, shall remit the amount so withheld to the appropriate tax authorities and shall pay the balance thereof directly to the Beneficial Participant, reporting to such Beneficial Participant the amount so withheld and paid to said tax authorities.
(2) Dividends. Subject to the provisions of Section 7 above and to any applicable law, tax ruling or guidelines of the Israeli Tax Authority, as applicable, for so long as Shares deposited with the Trustee on behalf of a Beneficial Participant are held in Trust, the cash dividends, if any, paid or distributed with respect thereto shall be distributed directly to such Beneficial Participant, subject further to any applicable taxation on distribution of dividends, and when applicable subject to the provisions of Section 102 of the Tax Ordinance, the 102 Rules and the regulations or orders promulgated thereunder.
(3) Bonus Shares. Subject to the provisions of Section 7 above, if the Company distributes bonus shares to all its stockholders and the date of distribution of such bonus shares or the record date for determining the right to receive such bonus shares is after the date on which Exercised Shares are registered in the name of the Trustee for the Beneficial Participant, the Company will transfer to the Trustee the type of bonus shares and such number of bonus shares calculated according to the number of Exercised Shares then-registered in the name of the Trustee for the benefit of the Beneficial Participant on the date of the distribution or the record date (as applicable), and the Trustee will hold the bonus shares in Trust for the Beneficial Participants.
(e) Sale. In the event of a sale of all or substantially all of the shares of Common Stock of the Company, with respect to Shares held in Trust, the Trustee will follow the instructions of the Board with respect to any shares held in Trust by the Trustee, and will make such transfers as instructed by the Board on the terms so instructed, including instructions with respect to the Company’s obligation (i) to withhold at the source all taxes required to be paid upon release of the Shares from the Trust and to provide the Trustee with evidence, satisfactory to the Trustee, that such taxes indeed have been paid; and (ii) to transfer the consideration for any Shares sold (less applicable tax and compulsory payments) directly to the Participants.
(f) Limitations of Transfer. In addition to the provisions of Section 10(a) of the Plan, as long as Awards and/or Shares are held by the Trustee on behalf of the Participant, all rights of the Participant over the Shares are personal, cannot be transferred, assigned, pledged or mortgaged, other than by will or pursuant to the laws of descent and distribution.
(g) Taxation.
(1) The Trustee shall not be required to release any sharea jurisdiction other than such state.
(2) With regards to 102 Awards, any provision of Section 102 of the Tax Ordinance, the 102 Rules and the regulations or orders promulgated thereunder, which is necessary in order to receive and/or to preserve any tax treatment pursuant to Section 102 of the Tax Ordinance, which is not expressly specified in the Plan, shall be considered binding upon the Company and the Israeli Participant.
(3) In the event a 102(c) Award is granted to a Participant, if the Participant’s employment or service is terminated, for any reason, such Participant shall provide the Company, to its full satisfaction, with a guarantee or collateral securing the future payment of all Taxes required to be paid upon the sale of the Exercised Shares received upon exercise of such 102(c) Award, all in accordance with the provisions of Section 102 of the Tax Ordinance, the 102 Rules and the regulations or orders promulgated thereunder.
(h) Cessation of Service. It is hereby clarified that the cessation of service of a Participant who is an Employee shall be the cessation of the employee-employer relationship between the Israeli Participant and the Company.
***
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q IF YOU HAVE NOT VOTED VIA THE INTERNETOR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.q
* Each to be elected as a Class II director of the Company to serve until the 2021 Annual Meeting of Stockholders.
For | Against | Abstain | For | Against | Abstain | |||||||||||||
2. | Non-binding advisory vote to approve executive compensation. | ☐ | ☐ | ☐ | 3. | Approval of the amendment to the Company’s 2009 Stock Incentive Plan to increase the number of shares of common stock authorized thereunder from 12,750,000 to 14,950,000. | ☐ | ☐ | ☐ | |||||||||
For | Against | Abstain | For | Against | Abstain | |||||||||||||
4. | Approval of the Company’s 2018 Israeli Special Purpose Stock Incentive Plan and the authorization to issue 200,000 shares of common stock thereunder. | ☐ | ☐ | ☐ | 5. | Ratification of the selection of Ernst & Young LLP as the Company’s registered public accounting firm for the current fiscal year. | ☐ | ☐ | ☐ |
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q IF YOU HAVE NOT VOTED VIA THE INTERNETOR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. q
Proxy — BOTTOMLINE TECHNOLOGIES (de), INC.
PROXY FOR THE 2018 ANNUAL MEETING OF STOCKHOLDERS to be held on November 15, 2018
This Proxy is solicited on behalf of the Board of Directors of Bottomline Technologies (de), Inc.
You hereby authorize Joseph L. Mullen, Robert A. Eberle and Richard D. Booth, or any of them, with full power of substitution, as Proxies to represent and vote all of your shares of common stock of Bottomline Technologies (de), Inc. that you are entitled to vote at the 2018 Annual Meeting of Stockholders of the company to be held on Thursday, November 15, 2018 or at any postponement or adjournment of that meeting. You hereby revoke all proxies previously given.
This proxy, when properly executed, will be voted in the manner that you direct on this proxy card.If no such directions are given, the Proxies will vote your shares in accordance with the recommendations of the Board of Directors set forth on this proxy card. In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the Annual Meeting.
Please vote, date and sign on the reverse side of this proxy card and return it promptly in the enclosed postagepre-paid envelope.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
SEE REVERSE SIDE