SECOND AMENDMENT TO EMPLOYMENT AGREEMENT
Exhibit
10.1
SECOND
AMENDMENT TO
This
Second Amendment to Employment Agreement (this “Amendment”) is made and entered
into this 30th day of
December, 2010, by and between Xxxx X. Xxxxxx (“Xxxxxx”) and Arbinet Corporation
(the “Employer”).
WITNESSETH
WHEREAS, Xxxxxx and the
Employer entered into an Employment Agreement made as of October 1, 2009, as
amended by the First Amendment to Employment Agreement made as of August 9, 2010
(as amended, the “Agreement”); and
WHEREAS, Xxxxxx and the
Employer desire to amend the Agreement to clarify that the benefits and payments
payable upon termination of Xxxxxx’x employment under certain circumstances do
not constitute non-qualified deferred compensation subject to Section 409A of
the Internal Revenue Code of 1986, as amended.
NOW, THEREFORE, in
consideration of the promises and mutual covenants and agreements contained
herein and other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereto agree as follows:
1. Section 4(e)(iii)(A) of the Agreement
is deleted in its entirety and restated to read as follows:
(iii) Commuting, Living and
Relocation Expenses. Xxxxxx will be entitled to the following
reimbursements for commuting, living and relocation expenses; provided, however,
that the following rules apply, in accordance with the Employer’s policies and
procedures for its senior management employees: (i) in no event shall any
reimbursement be paid after the last day of the taxable year following the
taxable year in which the expense was incurred; (ii) the amount of reimbursable
expenses incurred in one tax year shall not affect the expenses eligible for
reimbursement in any other tax year; and (iii) the right to reimbursement for
expenses is not subject to liquidation or exchange for any other
benefit.
(A) Until
the earliest of Xxxxxx’x termination of employment with Employer or its
successor (as the case may be) or May 31, 2011 or Xxxxxx’x relocation to the
Herndon, Virginia area, Xxxxxx shall be entitled to reimbursement by the
Employer for up to Five Thousand Five Hundred Dollars ($5,500) per month of
Xxxxxx’x reasonable and documented out-of-pocket expenses incurred by him for
living expenses in the Herndon, Virginia area and travel to and from Xxxxxx’x
residence in Connecticut.
2. Section 7(b) of the Agreement is
deleted in its entirety and restated to read as follows:
(b) Termination by the Employer
Without Cause Before a Change of Control. In the event of
termination of Xxxxxx’x employment with the Employer before a Change of Control
pursuant to Section 6(c) above and subject to Xxxxxx’x agreement to a release of
any and all legal claims in a form reasonably satisfactory to the Employer and
Xxxxxx (excluding any indemnification or other obligations hereunder which
survive termination of this Agreement) (the “Release”), and such Release
becoming effective and irrevocable prior to the day that is the forty-fifth
(45th) day
following the effective date of the termination of Xxxxxx’x employment, the
Employer shall provide to Xxxxxx the following termination benefits
(“Termination Benefits”):
(i) a
lump sum payment equal to twelve (12) months of Xxxxxx’x Salary at the rate then
in effect pursuant to Section 4(a); and
(ii) a
lump sum payment of an amount equal to any employer contribution that would have
been made by the Employer pursuant to any continuation of group health plan
benefits to the extent authorized by and consistent with 29 U.S.C. § 1161 et
seq. (commonly known as “COBRA”) for twelve (12) months or until Xxxxxx
commences employment, if earlier, subject to payment of premiums by Xxxxxx at
the active employees’ rate.
The
payments provided for in Section 7(b) shall be payable to Xxxxxx on or before
the forty-fifth (45th) day
following the effective date of the termination of Xxxxxx’x
employment. The Employer's liability for severance pursuant to
Section 7(b) shall be reduced by the amount of any severance pay paid to Xxxxxx
pursuant to any severance pay plan or stay bonus plan. However, Xxxxxx shall not
be obligated to mitigate the amount of any payment provided for in this
Agreement by seeking employment or otherwise and such amounts shall not be
reduced by any compensation or earnings Xxxxxx may receive from a future
employer following termination of his employment with
Employer. Notwithstanding the foregoing, nothing in this Section 7(b)
shall be construed to affect Xxxxxx'x right to receive COBRA continuation at
Xxxxxx'x own cost to the extent that the Xxxxxx may continue to be entitled to
COBRA continuation after the Xxxxxx’x right to cost sharing under Section
7(b)(i) ceases. Xxxxxx shall be obligated to give prompt notice of the date of
commencement of any employment during the benefits continuation period and shall
respond promptly to any reasonable inquiries concerning any employment in which
Xxxxxx engages during the benefits continuation period.
3. Section 7(d) of the Agreement is
deleted in its entirety and restated to read as follows:
(d) Termination by the Employer
without Cause or by Xxxxxx for Good Reason following a Change of
Control. In the event of termination of Xxxxxx’x employment
with the Employer pursuant to Section 6(b) or Section 6(c) above within twelve
(12) months following a Change of Control and subject to Xxxxxx’x execution of
the Release, and such Release becoming effective and irrevocable prior to the
day that is the forty-fifth (45th) day
following the effective date of the termination of Xxxxxx’x employment, the
Employer shall provide to Xxxxxx the following termination benefits
(“Termination Benefits”):
(i) a
lump sum payment equal to twelve (12) months of Xxxxxx’x Salary at the rate then
in effect pursuant to Section 4(a); and
(ii) a
lump sum payment of an amount equal to any employer contribution that would have
been made by the Employer pursuant to any continuation of group health plan
benefits to the extent authorized by and consistent with 29 U.S.C. § 1161 et
seq. (commonly known as “COBRA”) for twelve (12) months or until Xxxxxx
commences employment, if earlier, subject to payment of premiums by Xxxxxx at
the active employees’ rate.
The
payments provided for in Section 7(d) shall be payable to Xxxxxx on or before
the forty-fifth (45th) day
following the effective date of the termination of Xxxxxx’x
employment. The Employer's liability for severance pursuant to
Section 7(d) shall be reduced by the amount of any severance pay paid to Xxxxxx
pursuant to any severance pay plan or stay bonus plan of the Employer. However,
Xxxxxx shall not be obligated to mitigate the amount of any payment provided for
in this Agreement by seeking employment or otherwise and such amounts shall not
be reduced by any compensation or earnings Xxxxxx may receive from a fixture
employer following termination of his employment with Employer. Notwithstanding
the foregoing, nothing in this Section 7(d) shall be construed to affect
Xxxxxx'x right to receive COBRA continuation entirely at Xxxxxx'x own cost to
the extent that the Executive may continue to be entitled to COBRA continuation
after the Executive's right to cost sharing under Section 7(d)(i) ceases. Xxxxxx
shall be obligated to give prompt notice of the date of commencement of any
employment during the benefits continuation period and shall respond promptly to
any reasonable inquiries concerning any employment in which Xxxxxx engages
during the benefits continuation period.
4. Section 7(f) of the Agreement is
deleted in its entirety and restated to read as follows:
(f) Payment of Termination
Benefits. The Termination Benefits do not constitute
non-qualified deferred compensation subject to Section 409A (“Section 409A”) of
the Internal Revenue Code of 1986, as amended (the “Code”) pursuant to Treas.
Reg. §1.409A- (1)(b)(4) and §1.409A- (1)(b)(9)(iii) in that they are payable
within the “short-term deferral” period or only upon an involuntary separation
of service of Xxxxxx. If any of the Termination Benefits do
constitute non-qualified deferred compensation subject to Section 409A, then the
following interpretations apply to Sections 6(b) and (d): (i) any
termination of Xxxxxx’x employment triggering payment of the benefits under
Sections 6(b) or (d) must constitute a “separation from service”
under Section 409A(a)(2)(A)(i) of the Code and Treas. Reg. §1.409A-1(h) before
distribution of such benefits can commence; (ii) to the extent that the
termination of Xxxxxx’x employment does not constitute a separation of service
under Section 409A(a)(2)(A)(i) of the Code and Treas. Reg. §1.409A-1(h) (as the
result of further services that are reasonably anticipated to be provided by
Xxxxxx to the Employer at the time Xxxxxx’x employment terminates), any benefits
payable under Sections 6(b) or (d) that constitute deferred compensation under
Section 409A of the Code shall be delayed until after the date of a subsequent
event constituting a separation of service under Section 409A(a)(2)(A)(i) of the
Code and Treas. Reg. §1.409A-1(h). For purposes of clarification,
this Section 6(f) shall not cause any forfeiture of benefits on Xxxxxx’x part,
but shall only act as a delay until such time as a “separation from service”
occurs; (iii) if Xxxxxx is a “specified employee” (as that term is used in
Section 409A of the Code and regulations and other guidance issued thereunder)
on the date his separation from service becomes effective, any benefits payable
under Sections 6(b) or (d) that constitute non-qualified deferred compensation
subject to Section 409A of the Code shall be delayed until the earlier of (A)
the business day following the six-month anniversary of the date his separation
from service becomes effective, and (B) the date of Xxxxxx’x death, but only to
the extent necessary to avoid the imposition of accelerated or increased income
taxes, excise taxes or other penalties under Section 409A of the
Code. On the earlier of (A) the business day following the six-month
anniversary of the date his separation from service becomes effective, and (B)
Xxxxxx’x death, the Employer shall pay Xxxxxx in a lump sum the aggregate value
of the non-qualified deferred compensation that the Employer otherwise would
have paid Xxxxxx prior to that date under Sections 6(b) or (d) of this
Agreement, plus simple interest on such amount calculated at the short-term
applicable federal rate in effect on the date of Xxxxxx’x separation from
service; (iv) it is intended that each installment of the payments
and benefits provided under Sections 6(b) and (d) of this Agreement shall be
treated as a separate “payment” for purposes of Section 409A of the Code; and
(v) neither the Employer nor Xxxxxx shall have the right to accelerate or defer
the delivery of any such payments or benefits except to the extent specifically
permitted or required by Section 409A.
5. The parties hereby agree that the
Agreement will continue to be in full force and effect as modified by the terms
of this Amendment.
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of page intentionally left blank.]
IN WITNESS WHEREOF, the
parties have executed this Amendment as of the day and year first written
above.
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ARBINET
CORPORATION
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By:
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/s/ Xxxxx X. X’Xxxxxxx
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| Name: Xxxxx X. X’Xxxxxxx | |||
| Title: President and Chief Executive Officer | |||
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XXXX
X. XXXXXX
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/s/ Xxxx X. Xxxxxx
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