Exhibit 10.1
SEPARATION AND TRANSITION
SERVICES AGREEMENT
THIS SEPARATION AND TRANSITION SERVICES
AGREEMENT (the “Agreement”) is made and entered into by
and between John B. Wynne, Jr. (“Wynne”) and Arbinet
Corporation (“Arbinet”) (collectively, the
“Parties”).
WHEREAS, Wynne’s employment with Arbinet
is hereby terminated, without cause, effective November 15,
2009;
WHEREAS, Arbinet desires that Wynne provide
Arbinet certain Transition Services as hereinafter described;
and
WHEREAS, Arbinet has offered Wynne valuable
consideration over and above Wynne’s normal benefits on
termination in exchange for Wynne entering into this
Agreement.
NOW THEREFORE, in consideration of the mutual
promises contained herein, it is agreed as follows:
1. The
Parties acknowledge and agree that Wynne’s employment with
Arbinet is hereby terminated, without cause, effective November 15,
2009 (the “Termination Date”). Wynne shall
remain as Chief Financial Officer of Arbinet until the Termination
Date or until a successor is appointed, whichever is
earlier. Wynne acknowledges and agrees that Arbinet has
no obligation to re-employ Wynne at any time in the future and, if
Wynne should seek employment with Arbinet at some future date, that
Arbinet may choose to decline Wynne’s request for future
employment, without consequence to Arbinet.
2. (a) On
the Termination Date, in accordance with his employment letter
dated October 16, 2006 and as amended on April 23, 2008 (the
“Employment Letter”), Arbinet shall pay Wynne severance
pay in a lump sum payment, less applicable deductions and
withholdings, of $300,000, which is comprised of (i) 12 months base
salary at a rate of $275,000 and (ii) reimbursement for COBRA
payments for a period of one year plus an amount equal to potential
employer contributions to Arbinet’s retirement plan for one
year, which amount cannot exceed $25,000. In addition,
on the Termination Date, Arbinet will pay to Wynne (1) the salary
which would otherwise be payable to Wynne under the Employment
Letter from the date hereof through the Termination Date but which
has not been paid as of the Termination Date, less applicable
deductions and withholding; (2) any accrued but unused vacation pay
as of the Termination Date, less applicable deductions and
withholdings; and (3) reimbursement of reasonable business expenses
incurred by Wynne prior to the Termination Date, to be paid in
accordance with Arbinet’s policy for reimbursement of
employee business expenses.
(b) On
the earlier of March 31, 2010 or the date that bonus awards are
paid to the other senior executive officers of Arbinet under the
2009 Short-Term Cash Incentive Bonus Plan (the “Bonus
Plan”), Arbinet shall pay Wynne as severance pay, in a lump
sum payment less applicable deductions and withholdings, an amount
equal to (i) 91.66 percent (91.66%) of Wynne’s target bonus
under the Bonus Plan (the “Target”), based on
Arbinet’s achievement of the corporate performance metrics
for the Bonus Plan (the “Objectives”), as determined by
the Board of Directors of Arbinet (the “Board”) or the
Compensation Committee of the Board of Directors of Arbinet (the
“Compensation Committee”), or (ii) in the event the
Board or the Compensation Committee exercises its discretion under
the Bonus Plan and awards to the other senior executive officers of
Arbinet other than the President and Chief Executive Officer (the
“Executive Officers”) bonus awards based on such
discretion and not entirely on a mathematical calculation of
achievement of the Objectives, 91.66 (91.66%) percent
of the Target times the average percentage of the
target bonuses awarded to the Executive Officers.
(c) On
the Effective Date (as hereinafter defined), Arbinet shall grant,
pursuant to a Restricted Stock Award Agreement (the
“September 2009 Restricted Stock Agreement”), Wynne
17,500 shares of restricted common stock of Arbinet (the
“Shares”) under the 2004 Stock Incentive Plan, as
amended (the “2004 Plan”), which Shares shall fully
vest on the Termination Date, in consideration for the
acknowledgement and agreement by Wynne that he hereby irrevocably
and unconditionally waives any and all rights, claims or causes of
action of any nature whatsoever that he has, had, may have or may
have had to claim that (i) a “Change in Control” under
the 2004 Plan, the Equity Agreements (as hereinafter defined)
and/or the Employment Letter has occurred prior to the date hereof
because of a change in the composition of the Board over a period
of thirty-six (36) consecutive months or less such that a majority
of the Board members ceases, by reason of one or more contested
elections for Board membership, to be comprised of individuals who
either (1) have been Board members continuously since the beginning
of such period or (2) have been elected or nominated for election
as Board members during such period by at least a majority of the
Board members described in clause (1) who were still in office at
the time the Board approved such election or nomination (the
“Board Change in Control Provision”) and (ii) a
“Change in Control” under the 2004 Plan, the Equity
Agreements and/or the Employment Letter has occurred from the
period beginning on the date hereof and ending on March 31, 2010
because of the Board Change in Control Provision (subsections (i)
and (ii) together shall hereinafter be referred to as the
“Equity Awards Claim”).
(d) Subsequent
to the Termination Date, Arbinet acknowledges and agrees that it
will engage Wynne as a consultant through March 31, 2010 (the
“Transition Period”). Wynne’s services
in his capacity as a consultant will be limited to advice with
respect to historical accounting and financial reporting activities
(the “Transition Services”) as assigned by the
President and Chief Executive Officer. The Parties
acknowledge and agree that as full and adequate compensation for
the Transition Services, Arbinet shall pay Wynne at the rate of
$5,000 per month for Transition Services performed by Wynne at
Arbinet’s request (“Transition
Compensation”). In the event Wynne is assigned to
spend more than 15 hours per month on the Transition Services,
Arbinet shall compensate Wynne at the rate of $350 per hour for the
additional hours over 15 hours. The Transition
Compensation and the assigned time shall be prorated for the month
of November 2009. Arbinet shall not exercise general
supervision or control over the time, place or manner in which
Wynne provides Transition Services hereunder and, in performing
Transition Services pursuant to this Agreement, Wynne shall be
acting and shall act at all times as an independent contractor only
and not as an employee, agent, partner or joint venture of or with
Arbinet. Wynne acknowledges that he is solely
responsible for the payment of all Federal, state, local and
foreign taxes that are required by applicable laws or regulations
to be paid with respect to the Transition Compensation. During the
Transition Period, all Equity Awards (as hereinafter defined) shall
continue to vest per the terms of the applicable Equity
Agreements. Additionally, Wynne acknowledges and agrees
that any and all rights or remedies he has, had, may have or may
have had with respect to any unvested Equity Awards are terminated
as of the end of the Transition Period. Arbinet shall
reimburse Wynne for all reasonable expenses incurred by him in
performing services during the Transition Period, all such
reimbursements to be made in accordance with Arbinet’s
policies and procedures for its senior executive officers, as in
effect from time to time. Wynne may be asked to execute
Arbinet’s AGREEMENT TO PROTECT ARBINET’S CONFIDENTIAL
INFORMATION, INTELLECTUAL PROPERTY AND BUSINESS RELATIONSHIPS for
the pendency of the Transition Period.
3. Arbinet
shall become obligated to pay the severance pay set forth in
Paragraphs 2(a) and 2(b), grant the Shares pursuant to Paragraph
2(c) and engage Wynne as a con
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