CONFIDENTIAL
TREATMENT REQUESTED BY
EASYLINK SERVICES INTERNATIONAL CORPORATION
UNDER RULE 24b-2
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.
SECOND AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
This Second Amended and Restated Employment
Agreement (the “Agreement”) is entered into on
September 28, 2009 (the “Effective Date”) between
EasyLink Services International Corporation (the
“Company”) and Glen E. Shipley (“Shipley”).
This Agreement amends, restates and supersedes the Amended and
Restated Employment Agreement (the “Prior Agreement”)
between the Company and Shipley entered into on April 1, 2008,
as amended.
In consideration of the mutual covenants and
conditions set forth herein, the parties hereby agree as
follows:
1. Employment. The Company hereby employs Shipley in the
capacity of Chief Financial Officer. Shipley accepts such
employment and agrees to perform such services as are customary to
such office and as shall from time to time be assigned to him by
the Company’s Chief Executive Officer and/or Board of
Directors of the Company (the “Board”). Shipley will
perform his duties so as to cause the Business of the Company to be
operated in accordance with an annual operating plan and budget
developed jointly by the Board and the Company’s management
and approved by the Board. For purposes of this Agreement, the
“Business” of the Company is to provide
business-to-business supply chain data interchange in multiple
electronic formats.
2. Term. The employment hereunder shall be for a period
commencing on the Effective Date and ending on November 1,
2010 (the “Employment Period”). Unless either party
elects not to extend the term of this Agreement by so notifying the
other in writing at least 30 days prior to November 1,
2010 and November 1 of each year thereafter, the Employment Period
shall automatically extend for an additional one year period upon
November 1 of each such year. Shipley’s employment will be on
a full-time basis requiring the devotion of such amount of his
productive time as is necessary for the efficient operation of the
Business of the Company.
3.
Compensation and Benefits.
3.1 Salary. For the performance of Shipley’s duties
hereunder, the Company shall pay Shipley an annual base salary in
the amount as provided on Exhibit A, a copy of which is
attached hereto and incorporated herein by reference, payable in
accordance with the Company’s standard payroll policies,
which may be changed from time to time (but in no case less
frequently than monthly).
3.2 Annual Cash Incentive.
Shipley will also have the
opportunity to earn an annual cash incentive pursuant to the terms
of Exhibit A attached hereto (the “Annual Cash
Incentive”). The Company agrees to negotiate in good faith a
new Annual Cash Incentive Plan for each year of Shipley’s
employment subsequent to Fiscal 2010. If the Company and Shipley
fail to agree upon a new Cash Incentive Plan for any year after
Fiscal 2010, then the Annual Cash Incentive in effect for the
preceding year will govern. Notwithstanding any of the provisions
of this Agreement, the Annual Cash Incentive, to the extent payable
for any fiscal year of the Company, will be paid no later than the
15 th
day of the third month following the
end of the fiscal year of the Company to which the Annual Cash
Incentive relates.
3.3 Benefits. The Company shall provide to Shipley the
benefits as described on Exhibit B attached hereto.
3.4 Reimbursement of Expenses.
Shipley shall be entitled to be
reimbursed for all actual and reasonable expenses, including but
not limited to, expenses for travel, meals and entertainment,
incurred by Shipley in connection with and reasonably related to
the furtherance of the Company’s Business, per Company travel
guidelines in effect from time to time. Subject to the Company
travel guidelines in effect from time to time, the Company will
reimburse Shipley for such actual and reasonable expenses no later
than the last day of the calendar year following the calendar year
in which Shipley incurs the reimbursable expense.
3.5 Equity Grants. The parties incorporate the terms of
Exhibit A attached hereto regarding the equity grants
described therein, provided however, that upon any Change of
Control of the Company as defined in Section 4 of this
Agreement or if Shipley’s employment is terminated under
Sections 5.1(a), (b), (d) or (e) of this Agreement,
any of Shipley’s equity-based incentive compensation (whether
granted pursuant to this Agreement or otherwise) that has not yet
vested will vest immediately.
4. Change of Control.
For the purposes of this Agreement,
the term “Change of Control” shall mean a change in the
beneficial ownership of the Company’s voting stock pursuant
to which:
(a) any “person,” including a
“syndicate” or “group” as those terms are
used in Section 13(d)(3) of the Securities Exchange Act of 1934, is
or becomes the beneficial owner, directly or indirectly, of
securities of the Company representing 50% or more of the combined
voting power of the Company’s then outstanding “Voting
Securities,” which is any security that ordinarily possesses
the power to vote in the election of the board of directors of a
corporation without the happening of any precondition or
contingency;
(b) the Company is merged or consolidated
with another corporation and immediately after giving effect to the
merger or consolidation less than 50% of the outstanding Voting
Securities of the surviving or resulting entity are then
beneficially owned in the aggregate by either the shareholders of
the Company immediately prior to such merger or consolidation, or,
if a record date has been set to determine the shareholders of the
Company entitled to vote on such merger or consolidation, the
shareholders of the Company as of such record date; or
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(c) the Company transfers substantially all
of its assets to another corporation, other than a corporation of
which the Company owns, directly or indirectly, at least 50% of the
combined voting power of such corporation’s outstanding
voting securities.
5.1 Termination Events. Shipley’s employment hereunder will
terminate upon the occurrence of any of the following
events:
(b) Disability: If Shipley is unable
perform the duties assigned to him hereunder for a continuous
period exceeding 90 days by reason of injury, physical or
mental illness or other disability, which condition has been
certified by a physician, then, upon written notice to Shipley or
his personal representative setting forth specifically the nature
of the disability and the resulting performance failures and
Shipley’s failure to cure the cited performance failures
within ten days of receipt of such notice, the Company may
discharge Shipley;
(c) Cause: As used in this Agreement,
“Cause” shall mean:
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(i)
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Shipley’s conviction of (or
pleading guilty or nolo contendere to) a felony or any misdemeanor
involving dishonesty or moral turpitude; provided, however, that
prior to discharging Shipley for Cause, the Board shall give a
written statement of findings to Shipley setting forth specifically
the grounds on which Cause is based, and Shipley shall have a
period of ten days thereafter to respond in writing to the
Board’s findings; or
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(ii)
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Shipley’s willful and
continued failure to substantially perform his duties with the
Company (other than any failure resulting from death, illness or
disability) that has, or can reasonably be expected to have, a
direct and material adverse monetary effect on the Company,
provided that the Board has tendered written notice to Shipley
specifying the nature of the misconduct or performance deficiency
and giving Shipley 20 days to cure such deficiency. For purposes of
this subsection (ii), no act or failure to act on Shipley’s
part shall be considered “willful” if done, or omitted
to be done, by Shipley in good faith and with reasonable belief
that Shipley’s action or omission was in the best interest of
the Company. Any act, or failure to act, based upon authority given
pursuant to a resolution duly adopted by the Board or based upon
the advice of counsel for the Company shall be conclusively
presumed to be done, or omitted to be done, by Shipley in good
faith and in the best interests of the Company;
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(d) Without Cause: The Board may terminate
Shipley by issuing at least 30 days’ advance written
notice, subject to the severance provisions set forth
below;
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(e) By Shipley With Cause: Shipley may
terminate his employment due to either (i) a material default
by the Company in the performance of any of its obligations
hereunder, or (ii) an Adverse Change in Duties (as defined
below), which default or Adverse Change in Duties remains
unremedied by the Company for a period of 30 days following
its receipt of written notice thereof from Shipley; provided,
however, that Shipley must provide written notice to the Company of
the condition which would constitute cause for terminating his
employment hereunder within 90 days of the initial existence
of the condition, and, assuming such default or Adverse Change in
Duties remains unremedied by the Company after the 30-day period
set forth above, Shipley then must terminate his employment within
12 months of the initial existence of the condition;
or
(f) By Shipley Without Cause: Shipley may
terminate his employment for any reason upon the furnishing of at
least 30 days’ advance written notice to the
Board.
As used herein, “Adverse Change in
Duties” means an action or series of actions taken by the
Company, without Shipley’s prior written consent, that
results in:
(1) A material diminution in
Shipley’s authority, duties or responsibilities;
(2) A material diminution in
Shipley’s base compensation;
(3) A material diminution in the authority,
duties or responsibilities of the supervisor to whom Shipley is
required to report;
(4) A material diminution in the budget
over which Shipley retains authority; and
(5) A material change in the geographic
location of the Company, as located at the time of this Agreement,
at which Shipley performs his duties.
5.2 Effects
of Termination and Change of Control.
(a) Upon termination of Shipley’s
employment hereunder for any reason, the Company will promptly (but
in no event later than 30 days after termination of
employment) pay Shipley all compensation owed to Shipley and unpaid
through the date of termination (including, without limitation,
salary and employee expense reimbursements).
(b) In addition, upon any Change of Control
of the Company as defined in Section 4 of this Agreement or if
Shipley’s employment is terminated under Sections 5.1
(a), (b), (d) or (e), the Company shall also pay Shipley a
severance amount equal to the product of (i) two, times
(ii) the sum of (A) Shipley’s
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