AMENDMENT NO. 1 TO AMENDED AND RESTATED EMPLOYMENT AGREEMENT
EXHIBIT
10.5*
CONFIDENTIAL TREATMENT REQUESTED
BY
UNDER RULE 24b-2
*CONFIDENTIAL
TREATMENT
CONFIDENTIAL
PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO THE RULES AND REGULATIONS
OF THE SECURITIES AND EXCHANGE COMMISSION. “X” HAS BEEN USED TO IDENTIFY
INFORMATION WHICH IS SUBJECT TO A CONFIDENTIAL TREATMENT REQUEST.
AMENDMENT
NO. 1 TO
AMENDED
AND RESTATED EMPLOYMENT AGREEMENT
This
Amendment No. 1 to Amended and Restated Employment Agreement (this “Amendment”)
is entered into on August 27, 2010 between EasyLink Services International
Corporation (the “Company”) and Xxxxx X. Xxxxxx (“Xxxxxx”). This
Amendment amends the Amended and Restated Employment Agreement (the “Agreement”)
between the Company and Xxxxxx entered into on September 28, 2009.
In
consideration of the mutual covenants and conditions set forth herein, the
parties hereby agree as follows:
1. Amendment to Exhibit A.
Exhibit A attached to the Agreement is hereby amended by adding the
following immediately after the section entitled “ANNUAL CASH INCENTIVE FOR
FISCAL 2010”:
“ANNUAL CASH INCENTIVE FOR
FISCAL 2011
You shall
have the opportunity to earn an Annual Cash Incentive for Fiscal 2011 based on
the Company’s and your personal performance during Fiscal 2011. The
Company, through the Compensation Committee of the Board of Directors, retains
the right to adjust your Annual Cash Incentive plan at any time as business
circumstances or other factors reasonably dictate.
Your targeted Annual
Cash Incentive for Fiscal 2011
is $50,000 (“Target Annual
Cash Incentive for
2011”). With
respect to the Annual Cash Incentive for Fiscal 2011, the Compensation Committee
will determine the payout of this amount based on a combination of 50% payout on
satisfaction of item 1 of the Company objectives relating to Company revenue
(the “Company Revenue Bonus for 2011”) and 50% payout on item 2 of the Company
objectives relating to Company EBITDA (the “Company EBITDA Bonus for 2011”), as
provided below:
COMPANY
OBJECTIVES
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1.
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Total
revenue of $[XXXXXXXX] (the “2011 Revenue Target”) – The Company Revenue
Bonus for 2011 will be earned if the Company achieves a minimum total
revenue for Fiscal 2011 equal to the 2011 Revenue Target, in accordance
with and subject to the following. None of the Company Revenue
Bonus for 2011 will be earned if the Company achieves total revenue for
Fiscal 2011 equal to or less than 90% of the 2011 Revenue
Target. If the Company achieves total revenue for Fiscal 2011
greater than 90% and less than or equal to 100% of the 2011 Revenue
Target, then the percentage of the Company Revenue Bonus for 2011 earned
will equal approximately (i) 10, times (ii) a percentage equal to (a) the
actual amount of total revenue for Fiscal 2011 divided by the 2011 Revenue
Target, minus (b) 0.9. If the Company achieves total revenue
for Fiscal 2011 in excess of 100% of the 2011 Revenue Target, then the
percentage of the Company Revenue Bonus for 2011 earned will equal 100%
plus an amount (the “Additional Company Revenue Bonus for 2011”) equal to
6.8% of the Company Revenue Bonus for 2011 for every .1% by which the
total revenue for Fiscal 2011 exceeds the 2011 Revenue
Target.
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2.
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EBITDA
of $[XXXXXXXX] (the “2011 EBITDA Target”) – The Company EBITDA Bonus for
2011 will be earned if the Company achieves a minimum EBITDA for Fiscal
2011 equal to the 2011 EBITDA Target, in accordance with and subject to
the following. None of the Company EBITDA Bonus for 2011 will
be earned if the Company achieves EBITDA for Fiscal 2011 equal to or less
than 90% of the 2011 EBITDA Target. If the Company achieves
EBITDA for Fiscal 2011 greater than 90% and less than or equal to 100% of
the 2011 EBITDA Target, then the percentage of the Company EBITDA Bonus
for 2011 earned will equal approximately (i) 10, times (ii) a percentage
equal to (a) the actual amount of EBITDA for Fiscal 2011 divided by the
2011 EBITDA Target, minus (b) 0.9. If the Company achieves
EBITDA for Fiscal 2011 in excess of 100% of the 2011 EBITDA Target, then
the percentage of the Company EBITDA Bonus for 2011 earned will equal 100%
plus an amount (the “Additional Company EBITDA Bonus for 2011”) equal to
6.8% of the Company EBITDA Bonus for 2011 for every .1% by which the
EBITDA for Fiscal 2011 exceeds the 2011 EBITDA Target. For
purposes of this paragraph, EBITDA shall mean net profit before taxes,
interest expense (net of capitalized interest expense), depreciation
expense and amortization expense, all in accordance with GAAP, excluding
stock-based compensation expense, cumulative effect of accounting changes
and one-time, nonrecurring items.”
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2. No Other Amendments. Except as
expressly set forth in this Amendment, the Agreement remains in full force and
effect.
2
IN
WITNESS WHEREOF, the parties have executed this Amendment as of the day and year
first above written.
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/s/ Xxxxx X. Xxxxxx
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Xxxxx
X. Xxxxxx
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By:
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/s/ Xxxx X. Xxxxxxx
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Name:
Xxxx X. Xxxxxxx
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Title:
CFO
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