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 Thomas J. Stallings
(“Stallings”). This Agreement amends, restates and
supersedes the Amended and Restated Employment Agreement (the
“Prior Agreement”) between the Company and Stallings
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 Stallings in the
capacity of Chief Executive Officer. Stallings 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 Board of Directors of the Company (the “Board”).
Stallings 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 Stallings 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. Stallings’ 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 Stallings’ duties
hereunder, the Company shall pay Stallings (i) 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.
Stallings will receive 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 Stallings’
employment subsequent to Fiscal 2010. If the Company fails to
negotiate 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 Stallings the
benefits as described on Exhibit B attached hereto.
3.4 Reimbursement of Expenses.
Stallings 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 Stallings 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 Stallings for such actual and reasonable expenses no
later than the last day of the calendar year following the calendar
year in which Stallings 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 Stallings’ employment is terminated under
Sections 5.1(a), (b), (d) or (e) of this Agreement,
any of Stallings’ 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; or
(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. Stallings’ employment hereunder will
terminate upon the occurrence of any of the following
events:
(b) Disability: If Stallings 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 Stallings or
his personal representative setting forth specifically the nature
of the disability and the resulting performance failures and
Stallings’ failure to cure the cited performance failures
within ten days of receipt of such notice, the Company may
discharge Stallings;
(c) Cause: As used in this Agreement,
“Cause” shall mean:
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(i)
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Stallings’ 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 Stallings for Cause, the Board shall give a
written statement of findings to Stallings setting forth
specifically the grounds on which Cause is based, and Stallings
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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Stallings’ 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 Stallings
specifying the nature of the misconduct or performance deficiency
and giving Stallings 20 days to cure such deficiency. For
purposes of this subsection (ii), no act or failure to act on
Stallings’ part shall be considered “willful” if
done, or omitted to be done, by Stallings in good faith and with
reasonable belief that Stallings’ 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
Stallings in good faith and in the best interests of the
Company;
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(d) Without Cause: The Board may terminate
Stallings by issuing at least 30 days’ advance written
notice, subject to the severance provisions set forth
below;
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(e) By Stallings With Cause: Stallings 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 Stallings; provided,
however, that Stallings 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, Stallings then must terminate his employment
within 12 months of the initial existence of the condition;
or
(f) By Stallings Without Cause: Stallings
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 Stallings’ prior written consent, that
results in:
(1) A material diminution in
Stallings’s authority, duties or responsibilities;
(2) A material diminution in
Stallings’s base compensation;
(3) A material diminution in the authority,
duties or responsibilities of the supervisor to whom Stallings is
required to report;
(4) A material diminution in the budget
over which Stallings retains authority; and
(5) A material change in the geographic
location of the Company, as located at the time of this Agreement,
at which Stallings performs his duties.
5.2 Effects
of Termination and Change of Control.
(a) Upon termination of Stallings’
employment hereunder for any reason, the Company will promptly (but
in no event later than 30 days after termination of
employment) pay Stallings all compensation owed to Stallings 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
Stallings’ employment is terminated under Sections 5.1
(a), (b), (d) or (e), the Company shall also pay Stallings a
severance amount equal to the product of (i) two, times
(ii) the sum of (A) Stallings
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