proginet8k100708ex101.htm


    
      

      

    

    


    Exhibit
10.1

    


    


    October
7, 2008

    


    


    Steve
Flynn

    13 Watch
Hill Road

    Pleasantville,
NY 10570

    


    Dear
Steve,

    


    On behalf
of Proginet Corporation, I am pleased to offer you the position of Chief
Operating Officer, reporting to me. For your reference, I have included a copy
of your job description.

    


    The
proposed terms of employment with Proginet Corporation are as
follows:

    


    I.       
 Salary and
Bonus

    


         Your
starting salary will be $10,417 per semi-monthly pay period, which is equivalent
to $250,000 on an annualized basis.

    


         You
will be eligible for a quarterly performance bonus with an annual target amount
of $150,000. The bonus amount to be paid will be determined based upon the
achievement of agreed upon objectives, established by the CEO and approved by
the Board of Directors, as part of the annual business plan process. These
objectives will be weighted so that fifty percent of the target amount is based
on your performance under your Revenue and Profitability Targets and fifty
percent is based on the achievement of specific objectives, of which $75,000 is
guaranteed in your first year of employment.

    


         All
salary, bonus and draw payments are subject to normal withholdings.

    


    II.      
 Stock
Options

    


    
      	
               
      

            	
              o

            	
              As
      part of your compensation package, subject to the approval of the Board of
      Directors and shareholder approval of the amendments to the 2000 Stock
      Option Plan, you will be granted stock options to purchase 100,000 shares
      of Proginet Corporation common stock at a grant price, at the closing
      price on the OTC BB on the signature date of this agreement, which are
      fully vested.

            


    

    
      	
               
      

            	
              o

            	
              After
      180 days from signature date of this agreement, subject to the approval of
      the Board of Directors and shareholder approval of the amendments to the
      2000 Stock Option Plan, you will also be granted stock options to
      purchase 100,000 shares of Proginet Corporation common stock at a grant
      price, at the closing price on the OTC BB on such date, which are also
      fully vested.

            


    

    
      	
               
      

            	
              o

            	
              Additionally,
      on the signature date of this agreement, subject to the approval of the
      Board of Directors and shareholder approval of the amendments to the 2000
      Stock Option Plan, you will be granted stock options to purchase up to
      300,000 shares of Proginet Corporation common stock at a grant price based
      on the closing price on the OTC BB on the signature date of this
      agreement.  Such options will vest based upon the following
      schedule:

            


    


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    


    
      	
              Proginet
      Corporation Fiscal Year

            	
              Options

            	
              Vesting
      Date, if performance criteria has been met

            
	
              Fiscal
      Year 2009

            	
              up
      to 100,000

            	
              50%,
      7/31/2009

            
	
              50%,
      7/31/2010

            
	
              Fiscal
      Year 2010

            	
              up
      to 100,000

            	
              50%,
      7/31/2010

            
	
              50%,
      7/31/2011

            
	
              Fiscal
      Year 2011

            	
              up
      to 100,000

            	
              50%,
      7/31/2011

            
	
              50%,
      7/31/2012

            


    

    


    


    III.    
  Benefits
Package

    


         Beginning
on the first day of the month following three months of continuous employment
from your start date, you are eligible to participate in a comprehensive
benefits program including medical, dental, life and disability
insurance.

    


         You
will have the opportunity to select from various supplemental medical programs
offered through AFLAC. Furthermore, you will also be eligible to participate in
a 401(k) Plan and Pre-Tax Flexible Spending Plan. Currently, Proginet matches
50% of the first 6% contributed by the employee to its 401(k) Plan, subject to
IRS limitations.

    


    IV.   
   Compensated
Absences

    


         From
your date of hire through December 31, 2008, you will receive 5 (five) days of
vacation per month. Thereafter, you will receive 25 days of paid vacation on an
annual basis. You are also entitled to personal time off and sick leave in
accordance with Proginet Corporation Human Resource Employee Manual and
Procedure Guide.

    


    V.   
    Other Employment Related
Documents

    


         As
a public company, all employees are also required to sign Proginet’s
Confidentiality and Non-Competition Agreement, Code of Business Conduct and
Ethics Agreement and Insider Trading Policy Agreement upon joining
Proginet.

    


    In addition, because you will be a
Section 16 Officer, Proginet Corporation requests that, within (1) business day
of signing this letter, you

    


    
      	
               
      

            	
              a.

            	
              sign
      Proginet Corporation’s standard form power of attorney to facilitate the
      filing of Forms 3, 4 and 5 by Proginet Corporation on your behalf,
      and

            


    

    
      	
               
      

            	
              b.

            	
              either
      provide your existing SEC Central Index Key (CIK) information or sign a
      completed Form ID to obtain a
CIK.

            


    


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    VI.      
Change of Ownership
Control

    


         If
a Change of Ownership Control occurs during your tenure at Proginet Corporation,
all options previously granted shall vest immediately.

    


    VII.    
 Termination

    


         If,
in the event:

    


    
      	
               
      

            	
              a.

            	
              Proginet
      Corporation terminates your employment for any reason other than Cause,
      your death, or Disability, or

            


    

    
      	
               
      

            	
              b.

            	
              you  terminate
      your employment following a Constructive
  Termination,

            


    

    


    then
subject to your delivery of a signed release of claims in a form reasonably
satisfactory to Proginet Corporation, you  will be entitled
to:

    


    
      	
              i.

            	
              Continuation
      for a period of six months of your base salary, paid in accordance with
      Proginet Corporation's payroll
practices,

            


    

    
      	
              ii.

            	
              Continuation
      for a period of three months of the exercisability of your then
      outstanding Proginet Corporation stock options,
  and

            


    

    
      	
              iii.

            	
              Continuation
      of your then existing and subscribed to benefits for six
      months.

            


    

    


         In
the event of termination for Cause, you will not be entitled to any such
payments, salary, bonus, or benefits.

    


    VIII.   
At-Will
Employment

    


          If
you choose to accept this offer, please understand your employment is
voluntarily entered into and is for no specific period. As a result, you are
free to resign at any time, for any reason, or for no reason. Similarly,
Proginet Corporation is free to conclude its at-will employment relationship
with you at any time, with or without cause.

    


        Steve,
we trust that you agree with the Proginet Board of Directors, that you have a
great contribution to make to Proginet Corporation. We are confident that you
will find working at Proginet a rewarding experience. We look forward to a
favorable reply and the opportunity of working with you to create a successful
company.

    


        You
will also find enclosed, the Chief Operating Officer Job Description and
Variable Compensation Plan for Fiscal Year 2009.

    


         To
indicate your acceptance of this offer of employment, please sign and date this
confirmation form and return it to Proginet Corporation. This letter, along with
the Proginet Corporation Human Resource Employee Manual and Procedure Guide and
other policy documents applicable to Proginet Corporation employees and the Plan
Documents governing the health and welfare benefit plans, all which you will
receive shortly, sets forth the terms of your employment with Proginet
Corporation and supersedes any prior representations or agreements, whether
written or oral.

    


         Importantly,
your employment with Proginet Corporation is contingent on a background check.
The terms and conditions in the Proginet Corporation Human Resource Employee
Manual and Procedure Guide and the Plan Documents are subject to change at any
time by Proginet Corporation and/or Board of Directors, subject to requirements
of federal, state or local law. This letter may only be modified by a written
agreement signed by you and the President and CEO of Proginet
Corporation.

    
 

    
      
         


      

      
         


        
          

        

      

      
         


      

    


    


    This
offer will expire at noon Eastern Daylight Time on October 31,
2008.

    


    


    


    
      	 	 
	
              Sandy
      Weil

            	 
	
              President
      & CEO

            	 


    

    


    Please
indicate acceptance of this offer by returning this form with your
signature.

    


    I agree
to and accept the enclosed offer of employment with Proginet Corporation. I
agree that my start date will be on or about November 1, 2008.

    


    


    


    
      	 
      	 
      	 
      
	
              Steve
      Flynn

            	 
      	
              Date
      of Acceptance

            
	 
      	 
      	 
      


    

    


    


    Encl.


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    Certain
Definitions

    


    For
purposes of this letter, we have identified certain definitions for your
review:

    


    "Cause"
means only: the commission of a felony by you intended to result in your
substantial personal enrichment at Proginet Corporation’s expense, conviction of
a crime involving moral turpitude, or willful failure to perform your duties to
Proginet Corporation, which failure is deliberate, results in injury to Proginet
Corporation, and continues for more than 15 days after written notice is given
to you. For purposes of this definition, no act or omission is considered to
have been "willful" unless it was not in good faith and you had knowledge at the
time that the act or omission was not in the best interests of Proginet
Corporation.

    


    "Change
of Ownership Control" means any sale of all or substantially all of Proginet
Corporation’s assets, or any merger, consolidation, or stock sales that results
in the holders of Proginet Corporation’s capital stock immediately prior to such
transaction owning less than 50% of the voting power of Proginet Corporation’s
capital stock immediately after such transaction.

    


    "Constructive
Termination" means a material diminution of duties, a change in title or
reporting relationship, a change greater than 25 miles in the location of your
designated work place for Proginet Corporation, a reduction in base salary, or
the failure of any successor to the assets or business through any Change of
Ownership Control to fully assume all obligations of Proginet Corporation under
this agreement.

    


    "Disability"
means an illness, injury or other incapacitating condition as a result of which
you are unable to perform your duties at Proginet Corporation for any six (6)
consecutive months. In any such event, Proginet Corporation, in its sole
discretion, may terminate your employment by giving you notice of termination
for Disability. you  agree to submit to such medical examinations as
may be necessary to determine whether a Disability exists, pursuant to such
reasonable requests made by Proginet Corporation from time to time, and any
determination as to the existence of a Disability shall be made by a physician
selected by Proginet Corporation.