Exhibit 10.4

 

BOTTOMLINE TECHNOLOGIES (DE), INC.

 

Restricted Stock Agreement

Granted Under 2000 Incentive Plan

 

AGREEMENT made August 25, 2005, between Bottomline Technologies (de), Inc., a
Delaware corporation (the “Company”), and Joseph L. Mullen (the “Participant”).

 

For valuable consideration, receipt of which is acknowledged, the parties hereto
agree as follows:

 

1. Purchase of Shares.

 

In consideration of services rendered to the Company by the Participant, the
Company shall issue to the Participant, subject to the terms and conditions set
forth in this Agreement and in the Company’s 2000 Incentive Plan (the “Plan”),
93,000 shares (the “Shares”) of common stock, $.001 par value per share, of the
Company (“Common Stock”). The Shares will be held in book entry by the Company’s
transfer agent in the name of the Participant for that number of Shares issued
to the Participant. The Participant agrees that the Shares shall be subject to
the forfeiture provisions set forth in Section 2 of this Agreement and the
restrictions on transfer set forth in Section 4 of this Agreement.

 

2. Vesting.

 

(a) In the event that the Participant ceases to be an employee, officer or
director of, or advisor or consultant to, the Company or any parent or
subsidiary of the Company, for any reason or no reason, prior to August 26,
2009, any Unvested Shares (as defined below) shall be forfeited immediately and
automatically to the Company. Notwithstanding anything herein to the contrary,
if the Shares do not vest on or before the occurrence of one or more of the
events set forth in this Section 2, the Shares shall automatically be forfeited
to the Company. The foregoing provisions shall be subject to the provisions of
that certain Amended and Restated Employment Agreement, dated as of November 21,
2002, between the Company and the Participant, as amended by letter agreement
dated September 30, 2005 and as further amended and/or restated from time to
time (the “Employment Agreement”).

 

(b) “Unvested Shares” means the total number of Shares multiplied by the
Applicable Percentage at the time the Shares are forfeited. Except as provided
in the Employment Agreement or in the Plan, the “Applicable Percentage” shall be
(i) 100% during the period ending on August 25, 2006, (ii) 75% less 6.25% for
each three months that Participant is an employee, officer or director of, or
advisor or consultant to, the Company or any parent or subsidiary of the Company
from and after August 26, 2006 and (iii) 0% on or after August 26, 2009.

 

3. Automatic Sale Upon Vesting.

 

(a) Upon any reduction in the Applicable Percentage, the Company shall sell, or
arrange for the sale of, such number of the Shares no longer subject to
forfeiture under Section 2 as a result of such reduction in the Applicable
Percentage as is sufficient to generate

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net proceeds sufficient to satisfy the Company’s minimum statutory withholding
obligations with respect to the income recognized by the Participant upon the
lapse of the forfeiture provisions (based on minimum statutory withholding rates
for federal and state tax purposes, including payroll taxes, that are applicable
to such income), and the Company shall retain such net proceeds in satisfaction
of such tax withholding obligations.

 

(b) The Participant hereby appoints the President and the Secretary of the
Company, and each of them acting singly, his or her attorney in fact, to sell
the Participant’s Shares in accordance with this Section 3. The Participant
agrees to execute and deliver such documents, instruments and certificates as
may reasonably be required in connection with the sale of the Shares pursuant to
this Section 3.

 

(c) The Participant represents to the Company that, as of the date hereof, he or
she is not aware of any material nonpublic information about the Company or the
Common Stock. The Participant and the Company have structured this Agreement to
constitute a “binding contract” relating to the sale of Common Stock pursuant to
this Section 3, consistent with the affirmative defense to liability under
Section 10(b) of the Securities Exchange Act of 1934 under Rule 10b5-1(c)
promulgated under such Act.

 

4. Restrictions on Transfer.

 

(a) The Participant shall not sell, assign, transfer, pledge, hypothecate or
otherwise dispose of, by operation of law or otherwise (collectively “transfer”)
any Shares, or any interest therein, until such Shares have vested, except that
the Participant may transfer such Shares (i) to or for the benefit of any
spouse, children, parents, uncles, aunts, siblings, grandchildren and any other
relatives approved by the Board of Directors (collectively, “Approved
Relatives”) or to a trust established solely for the benefit of the Participant
and/or Approved Relatives, provided that such Shares shall remain subject to
this Agreement (including without limitation the restrictions on transfer set
forth in this Section 4 and the forfeiture provisions contained in Section 2)
and such permitted transferee shall, as a condition to such transfer, deliver to
the Company a written instrument confirming that such transferee shall be bound
by all of the terms and conditions of this Agreement or (ii) as part of the sale
of all or substantially all of the shares of capital stock of the Company
(including pursuant to a merger or consolidation), provided that, in accordance
with the Plan and except as otherwise provided herein, the securities or other
property received by the Participant in connection with such transaction shall
remain subject to this Agreement.

 

(b) The Company shall not be required (i) to transfer on its books any of the
Shares which have been transferred in violation of any of the provisions set
forth in this Agreement or (ii) to treat as owner of such Shares or to pay
dividends to any transferee to whom such Shares have been transferred in
violation of any of the provisions of this Agreement.

 

5. Restrictive Legends.

 

All Shares subject to this Agreement shall be subject to the following
restriction, in addition to any other restrictions that may be required under
federal or state securities laws:

 

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“The shares of stock represented by this certificate are subject to forfeiture
provisions and restrictions on transfer set forth in a certain Restricted Stock
Agreement between the corporation and the registered owner of these shares (or
his predecessor in interest), and such Agreement is available for inspection
without charge at the office of the Secretary of the corporation.”

 

6. Provisions of the Plan.

 

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

 

7. [Reserved].

 

8. Withholding Taxes; Section 83(b) Election.

 

(a) The Participant acknowledges and agrees that the Company has the right to
deduct from payments of any kind otherwise due to the Participant any federal,
state or local taxes of any kind required by law to be withheld with respect to
the issuance of the Shares to the Participant or the lapse of the forfeiture
provisions.

 

(b) The Participant has reviewed with the Participant’s own tax advisors the
federal, state, local and foreign tax consequences of this investment and the
transactions contemplated by this Agreement. The Participant is relying solely
on such advisors and not on any statements or representations of the Company or
any of its agents. The Participant understands that the Participant (and not the
Company) shall be responsible for the Participant’s own tax liability that may
arise as a result of this investment or the transactions contemplated by this
Agreement.

 

THE PARTICIPANT AGREES NOT TO FILE AN ELECTION UNDER SECTION 83(B) OF THE CODE
WITH RESPECT TO THE PURCHASE OF THE SHARES.

 

9. Miscellaneous.

 

(a) No Rights to Employment. The Participant acknowledges and agrees that the
vesting of the Shares pursuant to Section 2 hereof is earned only by continuing
service as an employee at the will of the Company (not through the act of being
granted the Shares hereunder). The Participant further acknowledges and agrees
that the transactions contemplated hereunder and the vesting schedule set forth
herein do not constitute an express or implied promise of continued engagement
as an employee or consultant for the vesting period, for any period, or at all.

 

(b) Severability. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement, and each other provision of this Agreement shall be severable
and enforceable to the extent permitted by law.

 

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(c) Waiver. Any provision for the benefit of the Company contained in this
Agreement may be waived, either generally or in any particular instance, by the
Board of Directors of the Company.

 

(d) Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the Company and the Participant and their respective heirs,
executors, administrators, legal representatives, successors and assigns,
subject to the restrictions on transfer set forth in Section 4 of this
Agreement.

 

(e) Notice. Each notice relating to this Agreement shall be in writing and
delivered in person or by first class mail, postage prepaid, to the address as
hereinafter provided. Each notice shall be deemed to have been given on the date
it is received. Each notice to the Company shall be addressed to it at its
offices at 325 Corporate Drive, Portsmouth, New Hampshire 03801 (Attention:
President). Each notice to the Participant shall be addressed to the Participant
at the Participant’s last known address.

 

(f) Pronouns. Whenever the context may require, any pronouns used in this
Agreement shall include the corresponding masculine, feminine or neuter forms,
and the singular form of nouns and pronouns shall include the plural, and
vice versa.

 

(g) Entire Agreement. This Agreement and the Plan constitute the entire
agreement between the parties, and supersede all prior agreements and
understandings, relating to the subject matter of this Agreement.

 

(h) Amendment. This Agreement may be amended or modified only by a written
instrument executed by both the Company and the Participant.

 

(i) Governing Law. This Agreement shall be construed, interpreted and enforced
in accordance with the internal laws of the State of Delaware without regard to
any applicable conflicts of laws.

 

(j) Continuance of Employment. The issuance of the Shares hereunder is in
consideration of the Participant’s continuing employment by the Company or any
subsidiary; provided, however, nothing in this Agreement shall confer upon the
Participant the right to continue in the employ of the Company or any subsidiary
or affect the right of the Company or any subsidiary to terminate the
Participant’s employment at any time in the sole discretion of the Company or
any subsidiary, with or without cause.

 

(k) Interpretation. The interpretation and construction of any terms or
conditions of the Plan, or of this Agreement or other matters related to the
Plan by the Compensation Committee of the Board of Directors of the Company
shall be final and conclusive.

 

(l) Participant’s Acknowledgments. The Participant acknowledges that he or she:
(i) has read this Agreement; (ii) has been represented in the preparation,
negotiation, and execution of this Agreement by legal counsel of the
Participant’s own choice or has voluntarily declined to seek such counsel;
(iii) understands the terms and consequences of this Agreement; (iv) is fully
aware of the legal and binding effect of this Agreement; and (v) understands
that the

 

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law firm of Wilmer Cutler Pickering Hale and Dorr LLP, is acting as counsel to
the Company in connection with the transactions contemplated by the Agreement,
and is not acting as counsel for the Participant.

 

(m) Delivery of Certificates. Subject to Section 3, the Participant may request
that the Company deliver the Shares in certificated form with respect to any
Shares that have ceased to be subject to forfeiture pursuant to Section 2.

 

[Remaining of Page Intentionally Left Blank]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.

 

 

BOTTOMLINE TECHNOLOGIES (DE), INC.

 

 

By:  /s/    JOSEPH LEO BARRY                        

        Name:  Joseph Leo Barry

        Title:  Chairman, Compensation Committee

 

 

/s/    JOSEPH L. MULLEN                                     

Joseph L. Mullen

 

Address:  60 Tidewater Farm Road

                 Greenland, NH 03840

 

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