EMPLOYMENT AGREEMENT
Exhibit
10.2
Execution
Copy
This
EMPLOYMENT AGREEMENT (the “Agreement”) is made as of September 2, 2008
(the “Effective Date”), by and between Arbinet-thexchange, Inc. a Delaware
corporation with its headquarters located in New Brunswick, New Jersey (the
“Employer”), and Xxxxx X. X’Xxxxxxx (the “Executive”). In consideration of the
mutual covenants contained in this Agreement, the Employer and the Executive
agree as follows:
1. Employment.
The
Employer agrees to employ the Executive and the Executive agrees to be employed
by the Employer on the terms and conditions set forth in this
Agreement.
2. Capacity.
Subject
to the terms and conditions of this Agreement, the Executive shall serve the
Employer as Chief Executive Officer and President and shall have the duties,
responsibilities and authority customary for such positions. The Executive
shall
report directly to the Board of Directors of Employer (the “Board of Directors”)
and shall also serve the Employer in such additional offices incidental to
such
position as the Executive may be requested by the Board of Directors. In such
capacity or capacities, the Executive shall perform such services and duties
in
connection with the business, affairs and operations of the Employer as may
be
assigned or delegated to the Executive from time to time by or under the
authority of the Board of Directors. During the term of this Agreement, the
Board of Directors shall nominate the Executive for reelection as a member
of
the Board of Directors at the annual meeting of stockholders of the Employer
following which the Executive's term as a director expires; provided that the
Executive shall be, at the time of such nomination, the Chief Executive Officer
and President of the Employer; provided further that the Executive agrees to
resign as a director of the Employer upon termination of the Executive's
employment in accordance with Section 6 hereof. During the Transition Period
(as
defined below) Executive shall be permitted to devote up to ten (10) hours
per
week performing duties for his former employer.
3. Relocation.
(a) The
Executive understands and agrees that this position is a full-time based at
the
Employer’s headquarters in New Brunswick, New Jersey.
(b) From
the
date hereof until September 30, 2008 (the “Transition Period”) the
Executive agrees to be available during the regular workweek, excluding
Employer-wide holidays and business travel as necessitated in connection with
the Executive’s responsibilities hereunder. During the Transition Period, the
Executive may perform his duties either remotely or in any of the Employer’s
offices, at the Executive’s sole discretion.
(c) From
October 1, 2008 until June 30, 2009, the Executive agrees to perform his duties
from, and be present at, any of the Employer’s offices during the regular
workweek, excluding Employer-wide holidays and business travel as necessitated
in connection with the Executive’s responsibilities hereunder.
(d) The
Executive shall maintain a permanent residence in the New Jersey area no later
than July 1, 2009.
(e) Any
failure to meet the requirements of this Section 3 due to (i) vacation time
taken pursuant to this Agreement or the Employer’s vacation policy, or (ii)
travel incidental to the Executive performing his obligations under this
Agreement, shall not be deemed a breach of Section 3(b) or Section
3(c).
4. Compensation
and Benefits.
The
regular compensation and benefits payable to the Executive under this Agreement
shall be as follows:
(a) Salary.
For all
services rendered by the Executive under this Agreement, the Employer shall
pay
the Executive an initial annual salary (the “Salary”) of not less than Three
Hundred Forty Thousand Dollars ($340,000), during the initial twelve (12) months
of employment, subject to annual merit increases based upon annual formal
reviews by the Board of Directors or the Compensation Committee of the Board
of
Directors (the “Compensation Committee”), provided,
that
the Salary is at all time subject to increase from time to time in the
discretion of the Board of Directors or the Compensation Committee. The Salary
shall be payable in periodic installments in accordance with the Employer’s
usual practice for its senior executives.
(b) Bonus.
The
Executive shall be entitled to participate in an annual incentive program
established by the Board of Directors or the Compensation Committee with such
terms as may be established by the Board of Directors or the Compensation
Committee and mutually and reasonably agreed by the Executive;
provided,
that,
(i) for the fiscal year ending December 31, 2008, Executive will have the
opportunity to earn up to One Hundred Thirteen Thousand Dollars ($113,000)
based
upon the achievement of the performance objectives as mutually and reasonably
agreed by the Executive and the Board of Directors or the Compensation
Committee; and (ii) beginning with the fiscal year ending December 31, 2009,
the
Executive will have the opportunity to earn up to One Hundred Percent (100%)
(the “Target Percentage”) of his Salary then in effect in bonus compensation
annually based upon the achievement of both corporate performance and individual
performance objectives, as determined by the Board of Directors or the
Compensation Committee and mutually and reasonably agreed by the
Executive.
(c) Regular
Benefits.
The
Executive shall also be entitled to participate in any qualified retirement
plans, deferred compensation plans, supplemental retirement plans, stock option
and incentive plans, stock purchase plans, medical insurance plans, life
insurance plans, disability income plans, retirement plans, vacation plans,
expense reimbursement plans and other benefit plans which the Employer may
from
time to time have in effect for all or most of its senior executives. Such
participation shall be subject to the terms of the applicable plan documents,
generally applicable policies of the Employer, applicable law and the discretion
of the Board of Directors, the Compensation Committee or any administrative
or
other committee provided for in or contemplated by any such plan. Nothing
contained in this Agreement shall be construed to create any obligation on
the
part of the Employer to establish any such plan or to maintain the effectiveness
of any such plan that may be in effect from time to time.
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(d) Equity
Grant:
Executive is currently a participant in the Employer’s 2004 Stock Option Plan,
as amended (the “2004 Plan”) and has existing stock options which were
previously granted to him as a member of the Board of Directors (“Director
Grant”). The stock options issued pursuant to the Director Grant shall continue
to vest in accordance with the terms of the 2004 Plan. Concurrent with the
execution of this Agreement, and subject to the approval of the Board of
Directors or the Compensation Committee, the Employer shall also grant the
Executive an option to purchase 375,000 shares of the Employer’s common stock
(the “2008 Grant”). In the event of a Change of Control (as defined below), the
Executive shall become fully vested in the 2008 Grant in accordance with the
terms of the Option Agreement (as defined below). Concurrent with the execution
of this Agreement, the Employer and the Executive shall enter into a
Non-Qualified Stock Option Agreement which is attached hereto as Exhibit
A
(the
“Option Agreement”). The vesting terms to be included in the Option Agreement
shall provide that if the Executive’s employment is terminated by the Employer
without Cause (as defined below) during the first twelve (12) months following
the date of this Agreement, the 2008 Grant shall become vested as to that
percentage of shares equal to the product of (i) 2.0833 and (ii) the number
of
full calendar months served by the Executive pursuant to this
Agreement.
(e) Additional
Benefits.
The
Employer shall provide the following additional benefits to the
Executive:
(i) Vacation.
(A) For
fiscal year 2008, the Executive shall be entitled, as of the date hereof, to
eight (8) working days’ paid vacation to be taken at such time or times as may
be agreed with the Board of Directors. Following the Transition Period, it
is
further agreed that the Executive shall be entitled to work remotely for five
(5) days during fiscal year 2008.
(B) Beginning
with fiscal year 2009, the Executive shall be entitled to 20 working days’ paid
vacation during each calendar year to be taken at such time or times as may
be
agreed with the Board of Directors. The Executive shall accrue five (5) vacation
days as of the first day of each calendar quarter.
(C) The
Executive may not, without the prior consent of the Board of Directors, carry
forward any unused part of his vacation entitlement to a subsequent calendar
year. Any vacation entitlement that has not been used by the end of the calendar
year or carried forward to the next calendar year shall be forfeited without
pay.
(D) Upon
termination of his employment for whatever reason the Executive shall be
compensated for any accrued, but unused, vacation. For the purposes of
calculating such payment in lieu or such repayment, a day’s paid vacation shall
be taken to be the Executive’s Salary divided by 260.
(E) It
is
agreed that the Executive shall be entitled to, at his option, take either
a
working day paid vacation or a working day unpaid to attend board of directors
meetings of the companies listed on Exhibit
B.
(ii) Reimbursement
of Business Expenses.
The
Employer shall reimburse the Executive for all reasonable expenses incurred
by
him in performing services during the term of this Agreement, in accordance
with
the Employer’s policies and procedures for its senior executive officers, as in
effect from time to time.
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(iii) Commuting,
Living and Relocation Expenses.
(A) During
the Transition Period, the Executive shall be entitled to reimbursement by
the
Employer for reasonable and documented out-of-pocket expenses incurred by him
for living expenses in the New Jersey area and weekly travel to and from the
Executive’s residence in the Dallas, Texas area.
(B) After
the
Transition Period and until the earlier of July 1, 2009 or the
Executive’s relocation to the New Jersey area, the Executive shall be entitled
to reimbursement by the Employer for up to Twelve Thousand Dollars ($12,000)
per
month of the Executive’s reasonable and documented out-of-pocket expenses
incurred by him for living expenses in the New Jersey area and travel to and
from the Executive’s residence in the Dallas, Texas area.
(C) The
Executive shall be entitled to reimbursement for up to Seventy-Five Thousand
Dollars ($75,000) of the Executive’s documented relocation and moving expenses
related to his relocation to the New Jersey area.
(iv) Indemnification.
From
and after the date hereof, Executive will be included under the Employer’s
directors and officers liability insurance policy, with the same coverage as
is
provided to other directors or officers of the Employer in respect of their
service to the Employer, and such coverage will continue without interruption
for so long as the Employer, or its successors and assigns, maintains such
coverage for its officers and directors.
(v) Legal
Fees.
The
Employer shall reimburse the Executive for all reasonable and documented
attorney and professional fees incurred by the Executive in connection with
the
negotiation and review of the terms of employment and this
Agreement.
(f) Exclusivity
of Salary and Benefits.
The
Executive shall not be entitled to any payments or benefits other than those
provided under this Agreement.
5. Extent
of Service.
During
the Executive’s employment under this Agreement, the Executive shall, subject to
the direction and supervision of the Board of Directors, devote the Executive’s
full business time, best efforts and business judgment, skill and knowledge
to
the advancement of the Employer’s interests and to the discharge of the
Executive’s duties and responsibilities under this Agreement. The Executive
shall not engage in any other business activity, except as may be approved
by
the Board of Directors; provided
that
nothing in this Agreement shall be construed as preventing the Executive
from:
(a) investing
the Executive’s assets in any company or other entity in a manner not prohibited
by Section 8(d) and in such form or manner as shall not require any material
activities on the Executive’s part in connection with the operations or affairs
of the companies or other entities in which such investments are
made;
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(b) engaging
in religious, charitable or other community or non-profit activities that do
not
impair the Executive’s ability to fulfill the Executive’s duties and
responsibilities under this Agreement; or
(c) serving
as a member of the board of directors of one public and one private company,
including the company listed on Exhibit
B
attached
hereto; provided
that at
no time during the term of this Agreement may the Executive serve as a member
of
the board of directors for more than one (1) private company and one (1) other
public company, excluding the Employer.
6. Termination.
The
Executive’s employment under this Agreement shall terminate under the following
circumstances set forth in this Section 6.
(a) Termination
by the Employer for Cause.
The
Executive’s employment under this Agreement may be terminated by the Employer
for Cause (as defined below) without further liability on the part of the
Employer effective immediately upon a vote of the Board of Directors and written
notice to the Executive. Only the following shall constitute “Cause” for such
termination:
(i) the
Executive’s willful misconduct in the performance of his duties to the
Employer;
(ii) the
Executive’s conviction of or plea of guilty or any plea other than “not guilty”
to a felony;
(iii) the
violation by the Executive of any material provision of this Agreement, which
is
not cured within thirty (30) days after written notice is given to the Executive
by the Employer specifying the events or circumstances allegedly giving rise
to
such breach;
(iv) the
Executive’s failure to maintain a permanent residence in the New Jersey area by
no later than July 1, 2009; or
(v) the
Executive’s dishonesty, misappropriation or fraud with regard to the property of
the Employer or its affiliates.
(b) Termination
by the Executive for Good Reason.
The
Executive’s employment under this Agreement may be terminated by the Executive
for Good Reason (as defined below). For purposes of this Agreement, “Good
Reason” shall mean that that the Executive has complied with the Good Reason
Process (as defined below) following the occurrence of any of the following
events:
(i) a
material diminution or other substantive adverse change, not consented to by
the
Executive, in the nature or scope of the Executive’s responsibilities,
authorities, powers, functions or duties;
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(ii) an
involuntary reduction in the Executive’s Salary or target bonus except for
across-the-board reductions similarly affecting all or substantially all senior
management employees;
(iii) a
breach
by the Employer of any of its other material obligations under this Agreement;
(iv) a
material change in the geographic location at which the Executive must perform
his services; or
(v) any
requirement that Executive report to someone other than the Board of Directors.
“Good
Reason Process” shall mean that: (A) the Executive reasonably determines that a
“Good Reason” event has occurred; (B) the Executive notifies the Employer in
writing of the occurrence of the Good Reason event within 90 days of the
occurrence of such event; (C) the Executive cooperates with the Employer’s
efforts, for a period not less than 30 days following such notice, to modify
the
Executive’s employment situation in a manner acceptable to the Executive and the
Employer; and (D) notwithstanding such efforts, one or more of the Good Reason
events continues to exist and has not been modified in a manner acceptable
to
the Executive. If the Employer cures the Good Reason event in a manner
acceptable to the Executive during the thirty (30) day period, Good Reason
shall
be deemed not to have occurred.
(c) Termination
by the Employer without Cause.
Subject
to the payment of Termination Benefits (as defined below), the Executive’s
employment under this Agreement may be terminated by the Employer without Cause
upon written notice to the Executive.
(d) Death.
The
Executive’s employment with the Employer shall terminate upon his
death.
(e) Disability.
If the
Executive shall be disabled so as to be unable to perform the essential
functions of the Executive’s then existing position or positions under this
Agreement with or without reasonable accommodation for a period of 30
nonconsecutive days or more within any six (6) month period, the Board of
Directors may, upon ten (10) days prior written notice, terminate the
Executive’s employment hereunder. Notwithstanding any such termination, the
Executive shall continue to receive the Executive’s full Salary (less any
disability pay or sick pay benefits to which the Executive may be entitled
under
the Employer’s policies) and benefits under Section 4 of this Agreement (except
to the extent that the Executive may be ineligible for one or more such benefits
under applicable plan terms) for a period of time equal to six (6) months,
and
the Executive’s employment may be terminated by the Employer at any time
thereafter. If any question shall arise as to whether during any period the
Executive is disabled so as to be unable to perform the essential functions
of
the Executive’s then existing position or positions with or without reasonable
accommodation, the Executive may, and at the request of the Employer shall,
submit to the Employer a certification in reasonable detail by a physician
selected by the Employer to whom the Executive or the Executive’s guardian has
no reasonable objection as to whether the Executive is so disabled or how long
such disability is expected to continue, and such certification shall for the
purposes of this Agreement be conclusive of the issue. The Executive shall
cooperate with any reasonable request of the physician in connection with such
certification. If such question shall arise and the Executive shall fail to
submit such certification, the Employer’s determination of such issue shall be
binding on the Executive. Nothing in this Section 6(e) shall be construed to
waive the Executive’s rights, if any, under existing law including, without
limitation, the Family and Medical Leave Act of 1993, 29 U.S.C. §2601
et
seq.
and the
Americans with Xxxxxxxxxxxx Xxx, 00 X.X.X. §00000 et
seq.
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7. Compensation
Upon Termination.
(a) Termination
Generally.
If the
Executive’s employment with the Employer is terminated for any reason during the
term of this Agreement, the Employer shall pay or provide to the Executive
(or
to his authorized representative or estate) any earned but unpaid Salary, unpaid
expense reimbursements, accrued but unused vacation and any vested benefits
the
Executive may have under any employee benefit plan of the Employer (the “Accrued
Benefit”).
(b) Termination
by the Employer Without Cause Before a Change of Control.
In the
event of termination of the Executive’s employment with the Employer before a
Change of Control pursuant to Section 6(c) above and subject to the Executive’s
agreement to a release of any and all legal claims in a form satisfactory to
the
Employer (excluding any indemnification or other obligations hereunder which
survive termination of this Agreement), the Employer shall provide to the
Executive the following termination benefits (“Termination Benefits”):
(i) a
lump
sum payment equal to one (1) times the Executive’s Salary at the rate then in
effect pursuant to Section 4(a) within twenty (20) days following termination
of
the Executives employment;
(ii) an
amount
equal to any employer contribution that would have been made by the Employer
pursuant to any retirement plan of the Employer on the Executive’s behalf had
the Executive remained employed by the Employer during the twelve-month period
following the date of termination, assuming the Executive contributed the
maximum amount to the plan; and
(iii) 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 the Executive commences employment, if earlier, subject to payment of
premiums by the Executive at the active employees’ rate.
Notwithstanding
the foregoing, the amounts paid to the Executive under Section 7(b)(ii) and
Section 7(b)(iii) shall not exceed Twenty-Five Thousand Dollars ($25,000) in
the
aggregate. Notwithstanding the foregoing, nothing in this Section 7(b) shall
be
construed to affect the Executive’s right to receive COBRA continuation entirely
at the Executive’s 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(b)(iii) ceases. The Executive 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 the Executive engages during the benefits continuation
period.
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The
Executive shall not be obligated or required to mitigate the amount of any
payment provided for in this Agreement either by seeking employment or
otherwise, and such amounts shall not be reduced by any remuneration the
Executive may earn from other employment following his termination from the
Employer.
(c) Termination
by the Employer with Cause.
If the
Executive’s employment is terminated by the Employer with Cause under Section
6(a), the Employer shall have no further obligation to the Executive other
than
payment of his Accrued Benefit.
(d) Termination
by the Employer Without Cause or by the Executive for Good Reason following
a
Change of Control.
In the
event of termination of the Executive’s employment with the Employer pursuant to
either Section 6(b) or Section 6(c) above within twelve (12) months
following a Change of Control and subject to the Executive’s agreement to a
release of any and all legal claims in a form satisfactory to the Employer
(excluding any indemnification or other obligations hereunder which survive
termination of this Agreement), the Employer shall provide to the Executive
the
following termination benefits (“Termination Benefits”):
(i) a
lump
sum payment equal to one (1) times the Executive’s Salary at the rate then in
effect pursuant to Section 4(a) within twenty (20) days following termination
of
the Executive’s employment;
(ii) a
lump
sum payment equal to the bonus compensation paid to the Executive in the
immediately preceding fiscal year;
(iii) an
amount
equal to any employer contribution that would have been made by the Employer
pursuant to any retirement plan of the Employer on the Executive’s behalf had
the Executive remained employed by the Employer during the twelve-month period
following the date of termination, assuming the Executive contributed the
maximum amount to the plan; and
(iv) 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 the Executive commences employment, if earlier, subject to payment of
premiums by the Executive at the active employees’ rate.
Notwithstanding
the foregoing, the amounts paid to the Executive under Section 7(d)(iii) and
Section 7(d)(iv) shall not exceed Twenty-Five Thousand Dollars ($25,000) in
the
aggregate. Notwithstanding the foregoing, nothing in this Section 7(d) shall
be
construed to affect the Executive’s right to receive COBRA continuation entirely
at the Executive’s 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)(iv) ceases. The Executive 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 the Executive engages during the benefits continuation
period.
The
Executive shall not be obligated or required to mitigate the amount of any
payment provided for in this Agreement either by seeking employment or
otherwise, and such amounts shall not be reduced by any remuneration the
Executive may earn from other employment following his termination from the
Employer.
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(e) Definition
of Change of Control.
For
purposes of this Agreement, a “Change of Control” shall mean:
(i) a
merger,
consolidation or other reorganization approved by the Employer’s stockholders,
unless securities representing more than fifty percent (50%) of the total
combined voting power of the voting securities of the successor corporation
are
immediately thereafter beneficially owned, directly or indirectly and in
substantially the same proportion, by the persons who beneficially owned the
Employer’s outstanding voting securities immediately prior to such transaction;
or
(ii) a
stockholder-approved liquidation, dissolution, sale, transfer or other
disposition of all or substantially all of the Employer’s assets;
or
(iii) the
closing of any transaction or series of related transactions pursuant to which
any person or any group of persons comprising a “group” within the meaning of
Rule 13d-5(b)(1) of the Securities Exchange Act of 1934 Act, as amended (the
“Exchange Act”) (other than the Employer or a person that, prior to such
transaction or series of related transactions, directly or indirectly controls,
is controlled by or is under common control with, the Employer) becomes directly
or indirectly the beneficial owner (within the meaning of Rule 13d-3 of the
Exchange Act) of securities possessing (or convertible into or exercisable
for
securities possessing) more than fifty percent (50%) of the total combined
voting power of the Employer’s securities (as measured in terms of the power to
vote with respect to the election of Board members) outstanding immediately
after the consummation of such transaction or series of related transactions,
whether such transaction involves a direct issuance from the Employer or the
acquisition of outstanding securities held by one or more of the Employer’s
existing stockholders.
(f) Payment
of Termination Benefits.
Anything in this Agreement to the contrary notwithstanding, if at the time
of
the Executive’s termination of employment, the Executive is considered a
“specified employee” within the meaning of Section 409A(a)(2)(B)(i) of the
Internal Revenue Code of 1986, as amended (the “Code”), and if any payment that
the Executive becomes entitled to under this Agreement is considered deferred
compensation subject to interest and additional tax imposed pursuant to Section
409A(a) of the Code as a result of the application of Section 409A(a)(2)(B)(i)
of the Code, then no such payment shall be payable prior to the date that is
the
earlier of (i) six (6) months after the Executive’s separation from service, or
(ii) the Executive’s death, and the initial payment shall include a catch-up
amount covering amounts that would otherwise have been paid during the first
six-month period but for the application of this Section 7(f). Any such deferred
payment shall earn simple interest calculated at the short-term applicable
federal rate in effect on the date of the Executive’s separation from service.
The parties intend that this Agreement will be administered in accordance with
Section 409A of the Code. The parties agree that this Agreement may be amended,
as reasonably requested by either party, and as may be necessary to fully comply
with Section 409A of the Code and all related rules and regulations in order
to
preserve the payments and benefits provided hereunder without additional cost
to
either party.
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8. Confidential
Information, Noncompetition and Cooperation.
(a) Confidential
Information.
As used
in this Agreement, “Confidential Information” means information belonging to the
Employer which is of value to the Employer in the course of conducting its
business and the disclosure of which could result in a competitive or other
disadvantage to the Employer. Confidential Information includes, without
limitation, financial information, reports, and forecasts; inventions,
improvements and other intellectual property; trade secrets; know-how; designs,
processes or formulae; software; market or sales information or plans; customer
lists; and business plans, prospects and opportunities (such as possible
acquisitions or dispositions of businesses or facilities) which have been
discussed or considered by the management of the Employer. Confidential
Information includes information developed by the Executive in the course of
the
Executive’s employment by the Employer, as well as other information to which
the Executive may have access in connection with the Executive’s employment.
Confidential Information also includes the confidential information of others
with which the Employer has a business relationship. Notwithstanding the
foregoing, Confidential Information does not include (i) information in the
public domain, unless due to breach of the Executive’s duties under Section 8(b)
or (ii) otherwise known by the Executive other than by reason of his employment
hereunder; provided
that the
source of such information is not known by the Executive to have disclosed
such
information in violation of an obligation of confidentiality owed to the
Employer.
(b) Confidentiality.
The
Executive understands and agrees that the Executive’s employment creates a
relationship of confidence and trust between the Executive and the Employer
with
respect to all Confidential Information. At all times, both during the
Executive’s employment with the Employer and after its termination, the
Executive will keep in confidence and trust all such Confidential Information,
and will not use or disclose any such Confidential Information without the
written consent of the Employer, except as may be necessary in the ordinary
course of performing the Executive’s duties to the Employer.
(c) Documents,
Records, etc.
All
documents, records, data, apparatus, equipment and other physical property,
whether or not pertaining to Confidential Information, which are furnished
to
the Executive by the Employer or are produced by the Executive in connection
with the Executive’s employment will be and remain the sole property of the
Employer. The Executive will return to the Employer all such materials and
property as and when requested by the Employer. In any event, the Executive
will
return all such materials and property immediately upon termination of the
Executive’s employment for any reason. The Executive will not retain any such
material or property or any copies thereof after such termination.
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(d) Noncompetition
and Nonsolicitation.
During
the term of this Agreement and for one (1) year thereafter, the Executive (i)
will not, directly or indirectly, whether as owner, partner, shareholder,
consultant, agent, employee, co-venturer or otherwise, engage, participate,
assist or invest in any Competing Business (as defined below); (ii) will refrain
from directly or indirectly employing, attempting to employ, recruiting or
otherwise soliciting, inducing or influencing any person to leave employment
with the Employer (other than terminations of employment of subordinate
employees undertaken in the course of the Executive’s employment with the
Employer); and (iii) will refrain from soliciting or encouraging any customer
or
supplier to terminate or otherwise modify adversely its business relationship
with the Employer. The Executive understands that the restrictions set forth
in
this Section 8(d) are intended to protect the Employer’s interest in its
Confidential Information and established employee, customer and supplier
relationships and goodwill, and agrees that such restrictions are reasonable
and
appropriate for this purpose. For purposes of this Agreement, the term
“Competing Business” shall mean a business conducted anywhere in any
jurisdiction where the Employer and/or its affiliates conduct such business
as
of the date Executive’s employment terminates, and shall be deemed to include,
without limitation, any business activity or jurisdiction which is covered
by or
included in a written proposal or business plan existing on the date of the
termination of the Executive’s employment with the Employer, which is directly
competitive with any business which the Employer or any of its affiliates
conducted at any time during the employment of the Executive. Notwithstanding
the foregoing, (i) the Executive may own up to one percent (1%) of the
outstanding stock of a publicly held corporation which constitutes or is
affiliated with a Competing Business, and (ii) the companies listed on
Exhibit
B
hereto
shall not be deemed to be a Competing Business.
(e) Third-Party
Agreements and Rights.
The
Executive hereby confirms that the Executive is not bound by the terms of any
agreement with any previous employer or other party which restricts in any
way
the Executive’s use or disclosure of information or the Executive’s engagement
in any business. The Executive represents to the Employer that the Executive’s
execution of this Agreement, the Executive’s employment with the Employer and
the performance of the Executive’s proposed duties for the Employer will not
violate any obligations the Executive may have to any such previous employer
or
other party. In the Executive’s work for the Employer, the Executive will not
disclose or make use of any information in violation of any agreements with
or
rights of any such previous employer or other party, and the Executive will
not
bring to the premises of the Employer any copies or other tangible embodiments
of non-public information belonging to or obtained from any such previous
employment or other party.
(f) Litigation
and Regulatory Cooperation.
During
and after the Executive’s employment, the Executive shall cooperate fully with
the Employer in the defense or prosecution of any claims or actions now in
existence or which may be brought in the future against or on behalf of the
Employer which relate to events or occurrences that transpired while the
Executive was employed by the Employer. The Executive’s full cooperation in
connection with such claims or actions shall include, but not be limited to,
being available to meet with counsel to prepare for discovery or trial and
to
act as a witness on behalf of the Employer at mutually convenient times. During
and after the Executive’s employment, the Executive also shall cooperate fully
with the Employer in connection with any investigation or review of any federal,
state or local regulatory authority as any such investigation or review relates
to events or occurrences that transpired while the Executive was employed by
the
Employer. The Employer shall reimburse the Executive for any reasonable
out-of-pocket expenses incurred in connection with the Executive’s performance
of obligations pursuant to this Section 8(f).
(g) Injunction.
The
Executive agrees that it would be difficult to measure any damages caused to
the
Employer which might result from any breach by the Executive of the promises
set
forth in this Section 8, and that in any event money damages would be an
inadequate remedy for any such breach. Accordingly, the Executive agrees that
if
the Executive breaches, or proposes to breach, any portion of this Agreement,
the Employer shall be entitled, in addition to all other remedies that it may
have, to an injunction or other appropriate equitable relief to restrain any
such breach without showing or proving any actual damage to the
Employer.
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9. Consent
to Jurisdiction.
The
parties hereby consent to the jurisdiction of the Superior Court of the State
of
New York and the United States District Court for the District of New York.
Accordingly, with respect to any such court action, the parties: (a) submit
to
the personal jurisdiction of such courts; (b) consent to service of process;
and
(c) waive any other requirement (whether imposed by statute, rule of court,
or
otherwise) with respect to personal jurisdiction or service of
process.
10. Integration.
This
Agreement constitutes the entire agreement between the parties with respect
to
the subject matter hereof and supersedes all prior agreements between the
parties with respect to any related subject matter.
11. Assignment;
Successors and Assigns, etc.
Neither
the Employer nor the Executive may make any assignment of this Agreement or
any
interest herein, by operation of law or otherwise, without the prior written
consent of the other party; provided
that the
Employer may assign its rights under this Agreement without the consent of
the
Executive in the event that the Employer shall effect a reorganization,
consolidate with or merge into any other corporation, partnership, organization
or other entity, or transfer all or substantially all of its properties or
assets to any other corporation, partnership, organization or other entity.
This
Agreement shall inure to the benefit of and be binding upon the Employer and
the
Executive, their respective successors, executors, administrators, heirs and
permitted assigns.
12. Enforceability.
If any
portion or provision of this Agreement (including, without limitation, any
portion or provision of any section of this Agreement) shall to any extent
be
declared illegal or unenforceable by a court of competent jurisdiction, then
the
remainder of this Agreement, or the application of such portion or provision
in
circumstances other than those as to which it is so declared illegal or
unenforceable, shall not be affected thereby, and each portion and provision
of
this Agreement shall be valid and enforceable to the fullest extent permitted
by
law.
13. Waiver.
No
waiver of any provision hereof shall be effective unless made in writing and
signed by the waiving party. The failure of any party to require the performance
of any term or obligation of this Agreement, or the waiver by any party of
any
breach of this Agreement, shall not prevent any subsequent enforcement of such
term or obligation or be deemed a waiver of any subsequent breach.
14. Notices.
Any
notices, requests, demands and other communications provided for by this
Agreement shall be sufficient if in writing and delivered in person or sent
by a
nationally recognized overnight courier service or by registered or certified
mail, postage prepaid, return receipt requested, to the Executive at the last
address the Executive has filed in writing with the Employer or, in the case
of
the Employer, at its main offices, attention of the Chairman of the Board of
Directors, and shall be effective on the date of delivery in person or by
courier or three (3) days after the date mailed.
12
15. Amendment.
This
Agreement may be amended or modified only by a written instrument signed by
the
Executive and by a duly authorized representative of the Employer.
16. Governing
Law.
This is
a New York contract and shall be construed under and be governed in all respects
by the laws of the State of New York, without giving effect to the conflict
of
laws principles of such State. With respect to any disputes concerning federal
law, such disputes shall be determined in accordance with the law as it would
be
interpreted and applied by the United States Court of Appeals for the Second
Circuit.
17. Counterparts.
This
Agreement may be executed in any number of counterparts, each of which when
so
executed and delivered shall be taken to be an original; but such counterparts
shall together constitute one and the same document.
*remainder
of page has intentionally been left blank*
13
IN
WITNESS WHEREOF, this Employment Agreement has been executed as a sealed
instrument by the Employer, by its duly authorized officer, and by the
Executive, as of the Effective Date.
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ARBINET-THEXCHANGE,
INC.
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By:
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/s/ Xxxx X. Xxxxxx |
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Name:
Xxxx X. Xxxxxx
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Title:
Director
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|
EXHIBIT
A
Please
See Attached
EXHIBIT
B
Board
of Directors
1. Shared
Technologies
