EXHIBIT 10.4*
CONFIDENTIAL TREATMENT REQUESTED BY
EASYLINK SERVICES INTERNATIONAL CORPORATION
UNDER RULE 24b-2
*CONFIDENTIAL TREATMENT
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.
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This Amended and Restated Employment Agreement (the “Agreement”) is entered into
on April 1, 2008 (the “Effective Date”) between, EasyLink Services International
Corporation (the “Company”) and John Mecke (“Mecke”). This Agreement amends,
restates and supersedes the Employment Agreement (the “Original Agreement”)
between the Company and Mecke effective as of December 1, 2007 (the “Original
Effective Date”).
In consideration of the mutual covenants and conditions set forth herein, the
parties hereby agree as follows:
1. Employment. The Company hereby employs Mecke in the capacity of Vice
President of Worldwide Product Management. Mecke 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.
Mecke 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 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 of one year, commencing
on the Original Effective Date and ending on the first anniversary of such date
(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
the first anniversary of the Original Effective Date and each anniversary
thereafter, the Employment Period shall automatically extend for an additional
one year upon each such anniversary. Mecke’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 Mecke’s duties hereunder, the Company shall
pay Mecke (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).

 

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3.2 Annual Cash Incentive. Mecke 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 Mecke’s employment subsequent to Fiscal
2008. If the Company fails to negotiate a new Cash Incentive Plan for any year
after Fiscal 2008, 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 15th 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 Mecke the benefits as described on
Exhibit B attached hereto.
3.4 Reimbursement of Expenses. Mecke 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 Mecke 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 Mecke for
such actual and reasonable expenses no later than the last day of the calendar
year following the calendar year in which Mecke incurs the reimbursable expense.
3.5 Equity Grants. The parties incorporate the terms of Exhibit A attached
hereto regarding equity grants, provided however, that upon any Change in
Control of the Company as defined in Section 4 of this Agreement or if Mecke’s
employment is terminated under Sections 5.1(b), (d) or (e) of this Agreement,
any of Mecke’s equity grants that have 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 40% 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 40% of the combined voting power of such corporation’s
outstanding voting securities.
5. Termination.
5.1 Termination Events. Mecke’s employment hereunder will terminate upon the
occurrence of any of the following events:
(a) Death;
(b) Disability: If Mecke 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 Mecke or his personal representative
setting forth specifically the nature of the disability and the resulting
performance failures and Mecke’s failure to cure the cited performance failures
within ten days of receipt of such notice, the Company may discharge Mecke;
(c) Cause: As used in this Agreement, “Cause” shall mean:

  (i)  
Mecke’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 Mecke for Cause, the Board shall give a written statement
of findings to Mecke setting forth specifically the grounds on which Cause is
based, and Mecke shall have a period of ten days thereafter to respond in
writing to the Board’s findings; or

  (ii)  
Mecke’s willful and continued failure to substantially perform his duties with
the Company (other than any failure resulting from 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 Mecke specifying the nature of the misconduct or performance
deficiency and giving Mecke 20 days to cure such deficiency. For purposes of
this subsection (ii), no act or failure to act on Mecke’s part shall be
considered “willful” if done, or omitted to be done, by Mecke in good faith and
with reasonable belief that Mecke’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 the Employee in good faith and in the best interests of the Company;

(d) Without Cause: The Board may terminate Mecke by issuing at least 30 days’
advance written notice, subject to the severance provisions set forth below;
(e) By Mecke With Cause: Mecke 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 Mecke provided,
however, that Mecke 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, Mecke then must terminate his employment within
12 months of the initial existence of the condition; or

 

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(f) By Mecke Without Cause: Mecke 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 Mecke’s prior written consent, that results in:
(1) A material diminution in Mecke’s authority, duties or responsibilities;
(2) A material diminution in Mecke’s base compensation;
(3) A material diminution in the authority, duties or responsibilities of the
supervisor to whom Mecke is required to report;
(4) A material diminution in the budget over which Mecke retains authority; and
(5) A material change in the geographic location of the Company, as located at
the time of this Agreement, at which Mecke performs his duties.
5.2 Effects of Termination.
(a) Upon termination of Mecke’s employment hereunder for any reason, the Company
will promptly (but in no event later than 30 days after termination of
engagement) pay Mecke all compensation owed to Mecke and unpaid through the date
of termination (including, without limitation, salary and employee expense
reimbursements).
(b) In addition, if Mecke’s employment is terminated under Sections 5.1 (b), (d)
or (e), the Company shall also pay Mecke an aggregate severance amount equal to
12 months of Mecke’s then-applicable base monthly salary plus any target Annual
Cash Incentive that would have accrued for the fiscal year in which the
termination occurred, which aggregate amount shall be paid in equal, or as
nearly equal as practicable, installments in accordance with the Company’s
then-existing standard payroll policies (including payroll deductions) as if the
payments were being made in equal installments over the following 12 months (no
less frequently than monthly), starting with the first payroll payment date
following Mecke’s termination of employment until the 15th day of the
third-month period following the end of (i) the calendar year or (ii) the fiscal
year of the Company, whichever is later, which includes the termination of
Mecke’s employment, at which time all remaining amounts shall be paid in a
single lump sum no later than such 15th day of the third month following the end
of (i) the calendar year or (ii) the fiscal year of the Company, whichever is
later, in which Mecke’s employment terminates, or, if earlier, after all such
payments have been made.
(c) The Company shall have the right to offset against any damages resulting
from a breach by Mecke of Section 5.3 or Section 6 of this Agreement, in which
case, such offset shall be applied in full against the payments remaining to be
paid to Mecke, from earliest to latest, and then to recover any amounts
previously paid.

 

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5.3 Restrictive Covenants. Upon termination of Mecke’s employment hereunder for
any reason, Mecke agrees that for the one-year period following the termination
of employment, Mecke will not:
(a) directly or indirectly, within a ten-mile radius of Mecke’s office at the
Company, whether for his own account or as an individual, employee, director,
consultant or advisor, or in any other capacity whatsoever, provide services
that are substantially similar to the services he provided to the Company to any
person, firm, corporation or other business enterprise that competes with the
Business of the Company, unless he obtains the prior written consent of the
Board;
(b) directly or indirectly encourage or solicit, or attempt to encourage or
solicit, on behalf of any person, firm, corporation or other business enterprise
that competes with the Business of the Company, any individual to leave the
Company’s employ for any reason or interfere in any other manner with the
employment relationships at the time existing between the Company and its
current or prospective employees; or
(c) induce or attempt to induce, on behalf of any person, firm, corporation or
other business enterprise that competes with the Business of the Company, any
provider, payor, customer, supplier, distributor, licensee or other business
relation of the Company with whom Mecke dealt at any time during the two-year
period preceding his termination of employment to cease doing business with the
Company or in any way interfere with the existing business relationship between
any such customer, supplier, distributor, licensee or other business relation
described above and the Company.
Mecke acknowledges that monetary damages will not be sufficient to compensate
the Company for any economic loss that may be incurred by reason of breach of
the foregoing restrictive covenants. Accordingly, in the event of any such
breach, the Company shall, in addition to any remedies available to the Company
at law, be entitled to obtain equitable relief in the form of an injunction
precluding Mecke from continuing to engage in such breach.
In the event that any of the foregoing restrictive covenants are too broad to be
enforceable, the parties request and agree that they may be reduced to such
lesser breadth as may be necessary to make them enforceable. The covenants in
this Section 5.3 shall be construed as an agreement independent of any other
agreement between the parties. Mecke agrees that the existence of any claim or
cause of action of Mecke against the Company, whether predicated upon this
Agreement or otherwise, shall not constitute a defense to the enforcement by the
Company of these covenants.
6. Confidentiality. During the term of this Agreement and for 36 months after
Mecke’s termination of employment with the Company, Mecke will continue to be
bound by the terms of that certain Confidentiality Agreement entered into
between Mecke and the Company on or about December 1, 2007.
7. General Provisions.
7.1 Assignment. Mecke may not assign or delegate any of his rights or
obligations under this Agreement. The Company may assign its rights and
obligations under this Agreement to any successor to the Company through merger,
consolidation, sale or the like.

 

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7.2 Entire Agreement. This Agreement contains the entire agreement between the
parties with respect to the subject matter hereof and supersedes any and all
prior agreements between the parties relating to such subject matter, including
without limitation that certain Employment Agreement dated December 1, 2007.
7.3 Modifications. This Agreement may be changed or modified only by an
agreement in writing signed by the party against whom enforcement is sought.
7.4 Successors and Assigns. The rights and duties under this Agreement shall
inure to the benefit of, and be binding upon, the parties hereto and their
successors and assigns, legal representatives, heirs, legatees, distributees,
assigns and transferees by operation of law, whether or not any such person or
entity shall have become a party to this Agreement and have agreed in writing to
join and be bound by the terms and conditions hereof.
7.5 Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Georgia.
7.6 Severability; Partial Invalidity. If any provision of this Agreement or any
instrument or document delivered in connection herewith is held to be illegal,
invalid or unenforceable under present or future laws effective during the term
of this Agreement (the “Offending Provision”), the Offending Provision shall be
fully severable; this Agreement shall be construed and enforced as if the
Offending Provision had never comprised a part of this Agreement; and the
remaining provisions of this Agreement shall remain in full force and effect and
shall not be affected by the Offending Provision or by its severance from this
Agreement. Furthermore, in lieu of the Offending Provision, there shall be added
automatically as a part of this Agreement a provision as similar in terms to the
Offending Provision as may be possible and be legal, valid and enforceable.
7.7 Further Assurances. The parties will execute such further instruments and
take such further actions as may be reasonably necessary to carry out the intent
of this Agreement.
7.8 Notices. Any notices or other communications required or permitted hereunder
shall be in writing and shall be deemed received by the recipient when delivered
personally or, if mailed, five (5) days after the date of deposit in the United
States mail, certified or registered, postage prepaid and addressed, in the case
of the Company, to:
6025 The Corners Parkway
Suite 100
Norcross, Georgia 30092
and, in the case of Mecke, to:
5312 Ashley Trace
Atlanta, Georgia 30360
or to such other address as either party may later specify by at least ten
(10) days’ advance written notice delivered to the other party in accordance
herewith.

 

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7.9 No Waiver. The failure of either party to enforce any provision of this
Agreement shall not be construed as a waiver of that provision, nor prevent that
party thereafter from subsequently enforcing that provision of any other
provision of this Agreement.
7.10 Legal Fees and Expenses. In the event of any disputes under this Agreement,
each party shall be responsible for his or its own legal fees and expenses that
may be incurred in resolving such dispute.
7.11 Counterparts. This Agreement may be executed in counterparts, each of which
shall be deemed to be an original, but all of which together shall constitute
one and the same instrument.
7.12 Omnibus 409A Provision. This Agreement is intended to be exempt from
treatment as deferred compensation under Section 409A of the Internal Revenue
Code (the “Code”) and shall be construed and interpreted in accordance
therewith. All rights to payments under this Agreement shall be treated as
rights to receive a series of separate payments to the fullest extent permitted
by Section 409A of the Code. Notwithstanding the preceding, the Company shall
not be liable to Mecke or any other person if the Internal Revenue Service or
any court or other authority having jurisdiction over such matter determines for
any reason that any payment under this Agreement is subject to taxes, penalties
or interest as a result of failing to comply with Section 409A of the Code.
Notwithstanding any of the provisions of this Agreement, if Mecke is a
“specified employee” (within the meaning of Section 409A of the Code), and any
payments hereunder are not otherwise exempt from Section 409A of the Code, then,
to the extent necessary to comply with Section 409A of the Code, no payments may
be made hereunder before the date which is six months after the date of Mecke’s
“separation from service” within the meaning of Section 409A of the Code or, if
earlier the date of Mecke’s death. Because the amounts payable hereunder will be
made in all events no later than the 15th day of the third month following the
end of (i) the calendar year or (ii) the fiscal year of the Company in which
Mecke terminates employment, whichever is later, then all amounts payable
hereunder should be exempt from Section 409A of the Code as a short-term
deferral. Consequently, this “specified employee” six-month delay provision will
only be applicable if it is subsequently determined that the amounts to be paid
pursuant to this Agreement are not exempt from Section 409A of the Code. For
purposes hereof, termination of employment shall be read to mean a “separation
from service” within the meaning of Section 409A of the Code where it is
reasonably anticipated that no further services would be performed after such
date or that the level of bona fide services Mecke would perform after that date
(whether as an employee or an independent contractor) would permanently decrease
to no more than 20 percent of the average level of bona fide services performed
over the immediately preceding 36-month period.

 

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year first above written

              /s/ John Mecke           John Mecke
 
            EasyLink Services International Corporation
 
       
 
  By:   /s/ Thomas J. Stallings
 
       
 
      Name: Thomas J. Stallings
 
      Title: CEO

 

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EXHIBIT A
2008 Compensation Plan
Mr. John Mecke, Vice President Worldwide Product Management
SALARY
The Company shall pay you a salary of $200,000 annually. The Company, through
the Compensation Committee of the Board of Directors, will review your salary
annually and, in its sole discretion, may increase but not decrease your salary
as appropriate, subject to the approval of the Compensation Committee of the
Board of Directors.
ANNUAL CASH INCENTIVE
You shall have the opportunity to earn a cash incentive based on the Company’s
and your personal performance during Fiscal 2008. The Company, through the
Compensation Committee of the Board of Directors, retains the right to adjust
your cash incentive plan at any time as business circumstances or other factors
reasonably dictate.
Your targeted annual incentive compensation (“Bonus”) for Fiscal 2008 is
$100,000. Payment of 2008 incentive compensation will be at fiscal year end (but
no later than as set forth in your Employment Agreement) and will based on a
combination of 25% payout on personal objectives and 75% payout on Company
objectives as noted below:
COMPANY OBJECTIVES

  1.  
Total revenue of $[XXXXXXXX] — half of the executive’s Company Bonus will be
earned if the Company achieves a minimum of $[XXXXXXXX] in total revenue for FY
2008. Bonus payout starts at 91% of plan and is linear for performance to 100%;
thereafter the executive will be eligible to receive an additional 1% for each
additional 10% in revenue above the plan.

  2.  
Operating income of $[XXXXXXXX] — the other half of the executive’s Company
based performance bonus will be earned if the Company achieves a minimum of
$[XXXXXXXX] in operating income for FY 2008. Bonus payout starts at 91% of plan
and is linear for performance to 100%; thereafter the executive will be eligible
to receive an additional 1% for each additional 10% in operating income above
the plan.

PERSONAL OBJECTIVES
To be determined.
Payment of 2008 Bonus will be at fiscal year end and will be determined by the
Compensation Committee of the Board of Directors prior to the end of Fiscal
2008.

 

 

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LONG TERM STOCK INCENTIVE
On execution of your Original Agreement, you received a one time grant of 30,000
restricted shares of the Company’s class A common stock. The restricted shares
are to vest one third (1/3 or 10,000 options) at the end of the first year
following grant and monthly thereafter for twenty-four (24) months. The
restricted stock grant was granted pursuant to the terms of, and evidenced by, a
written agreement entered into between you and the Company.

 

 

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EXHIBIT B
Benefits
You will be eligible to participate in benefit plans and/or programs which the
Company may offer to its employees or executives from time to time. Your
eligibility for such plans and/or programs will be determined by the terms of
such plans and/or programs. Among the benefits currently offered by the Company
to its employees are medical and dental insurance, a stock option plan and a
401k plan, which are described below. Please be advised, however, that the
Company reserves the right to amend, modify, or terminate any of its benefits
plans and/or programs at any time in its sole discretion. You will be eligible
for three weeks vacation in accordance with the Company’s accrual policy.
Medical Insurance. Currently, the Company offers its employees medical
insurance. The Company currently contributes a portion of your premium for
employee coverage, and you will be responsible for contributing for additional
family coverage through pre-tax payroll deduction.
Dental Insurance. The Company presently offers its employees dental insurance.
The Company currently contributes a portion of your premium for employee
coverage, and you will be responsible for contributing for additional family
coverage through pre-tax payroll deduction.
401k Plan. The Company presently offers its employees a 401k plan with a Company
match to be determined annually by the Compensation Committee of the Board of
Directors. You may elect to contribute pre-tax deferrals through payroll
deduction pursuant to the terms of the 401k plan.