Exhibit 10.1
Arbinet-thexchange,
Inc.
Non-Qualified Stock Option
Agreement
Granted Under 2004 Stock
Incentive Plan
1.
Grant of Option
.
This Non-Qualified Stock Option Agreement (the
“Agreement”) evidences the grant by Arbinet-thexchange,
Inc., a Delaware corporation (the “Company”), on
September 2, 2008 (the “Grant
Date”) to Shawn F. O’Donnell,
an employee of the Company (the “Participant”), of an
option to purchase, in whole or in part, on the terms provided
herein and in the Company’s 2004 Stock Incentive Plan, as
amended (the “Plan”), a total of 375,000 shares (the
“Shares”) of common stock, $0.001 par value per share,
of the Company (“Common Stock”) at $3.71 per Share.
Unless earlier terminated, this option shall expire at 5:00 p.m.,
Eastern time, on September 2, 2018 (the “Final Exercise
Date”).
It is intended that the option evidenced by this
Agreement shall not be an incentive stock option as defined in
Section 422 of the Internal Revenue Code of 1986, as amended, and
any regulations promulgated thereunder (the “Code”).
Except as otherwise indicated by the context, the term
“Participant”, as used in this option, shall be deemed
to include any person who acquires the right to exercise this
option validly under its terms.
(a) Subject to the terms of Section 2(b) and
Section 2(c) hereof below, this option will become exercisable
(“vest”) as to 25% of the original number of Shares on
the first anniversary of the Grant Date and pro-rata thereafter on
a monthly basis at the end of each successive month following the
first anniversary of the Grant Date until the fourth anniversary of
the Grant Date.
(b) Prior to first anniversary of the Grant Date,
if the Participant is discharged by the Company without
“Cause” (as defined below) this option will vest as to
that percentage of the original number of Shares equal to the
product of (i) 2.0833 and (ii) the number of full calendar months
served by the Participant pursuant to the Employment Agreement
dated as of the date hereof by and between the Participant and the
Company (the “Employment Agreement”).
“Cause” shall have the meaning, and be subject to the
terms, set forth in the Employment Agreement.
(c) Except as set forth below, in the case of a
Change of Control (as defined below) of the Company, this option
shall terminate on the effective date of such transaction, unless
provision is made in connection with such transaction for the
assumption of this option or the substitution for this option of a
new option of the successor corporation or parent thereof, with
appropriate adjustment as to the number and kind of shares and the
per share exercise price, as provided in the Plan. In the event of
a Change of Control, the Company shall give written notice thereof
to the Participant at least twenty (20) days prior to the effective
date of any such transaction or the record date on which
stockholders of the Company entitled to participate in such
transaction shall be determined, whichever shall first occur. In
the event of such Change of Control, (i) the Company shall have the
option (in its sole discretion) to make or provide for a cash
payment to the Participant, in exchange for the cancellation
thereof, in an amount equal to the difference between (A) the
consideration payable, or otherwise to be received by stockholders,
per share of Common Stock pursuant to a Change of Control (the
“Sale Price”), multiplied by the number of Shares
subject to this option (to the extent then exercisable (after
taking into account any acceleration hereunder) at prices not in
excess of the Sale Price) and (B) the aggregate exercise price of
this option; and (ii) any unexercised portion of this option,
whether or not then vested and exercisable, shall be exercisable in
full for at least fifteen (15) days prior to the date of such
termination whether or not otherwise exercisable during such
period; provided , however , that in no event shall
this option be exercisable after the Final Exercise
Date.
For purposes of
this Agreement, a “Change of Control” shall
mean:
(i) a merger, consolidation or other reorganization
approved by the Company’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, direct
