Exhibit 10.3

RESTRICTED STOCK AWARD AGREEMENT

UNDER THE ARBINET-THEXCHANGE, INC.

2004 STOCK INCENTIVE PLAN, AS AMENDED

Name of Participant:                                                   

No. of Shares:                                                   

Grant Date:                                                   

Final Acceptance Date:                                                   

Pursuant to the Arbinet-thexchange, Inc. 2004 Stock Incentive Plan as amended
through the date hereof (the “Plan”), Arbinet-thexchange, Inc. (the “Company”)
hereby grants a Restricted Stock Award (an “Award”) to the Participant named
above. Upon acceptance of this Award, the Participant shall receive the number
of shares of Common Stock, par value $0.001 per share (the “Stock”), of the
Company specified above, subject to the restrictions and conditions set forth
herein and in the Plan (the “Restricted Stock”).

1. Acceptance of Award. The Participant shall have no rights with respect to
this Award unless he shall have accepted this Award prior to the close of
business on the Final Acceptance Date specified above by (i) signing and
delivering to the Company a copy of this Award Agreement, and (ii) delivering to
the Company a stock power endorsed in blank. Upon acceptance of this Award by
the Participant, the shares of Restricted Stock so accepted shall be issued and
held by the Company’s transfer agent in book entry form, and the Participant’s
name shall be entered as the stockholder of record on the books of the Company.
Thereupon, the Participant shall have all the rights of a stockholder with
respect to such Stock, including voting and dividend rights, subject, however,
to the restrictions and conditions specified in Section 2 below.

2. Restrictions and Conditions.

(a) Any book entries for the shares of Restricted Stock granted herein shall
bear an appropriate legend, as determined by the Board or Committee (as defined
in the Plan) in its sole discretion, to the effect that such shares are subject
to restrictions as set forth herein and in the Plan.

(b) Shares of Restricted Stock granted herein may not be sold, assigned,
transferred, pledged or otherwise encumbered or disposed of by the Participant
prior to vesting.

(c) If the Participant ceases to be an employee or director of, or consultant or
advisor to, the Company or a subsidiary (an “Eligible Participant”) for any
reason (including death) prior to vesting of shares of Restricted Stock granted
herein, all shares of Restricted Stock shall immediately and automatically be
forfeited and returned to the Company.

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3. Vesting of Restricted Stock. The restrictions and conditions in Section 2 of
this Agreement shall lapse on the Vesting Date or Dates specified in the
following schedule so long as the Participant remains an Eligible Participant on
the relevant Vesting Date. If a series of Vesting Dates is specified, then the
restrictions and conditions in Section 2 shall lapse only with respect to the
number of shares of Restricted Stock specified as vested on such Date.

 

Number of Shares Vested

  

Vesting Date

                                 

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  (    %)   

                     

                                 

  (    %)   

                     

                                 

  (    %)   

                     

                                 

  (    %)   

                     

Subsequent to such Vesting Date or Dates, the shares of Stock on which all
restrictions and conditions have lapsed shall no longer be deemed Restricted
Stock. Restricted Stock may be subject to accelerated vesting in accordance with
Section 6 below.

4. Dividends. Dividends on shares of Restricted Stock shall be paid currently to
the Participant.

5. Reorganization Event.

(a) Upon the occurrence of a Reorganization Event (as defined in the Plan) other
than a liquidation or dissolution of the Company, if the Award is assumed or
otherwise continued by the Company’s successor, the rights of the Company under
this Award shall inure to the benefit of the Company’s successor and shall apply
to the cash, securities or other property which the Stock was converted into or
exchanged for pursuant to such Reorganization Event in the same manner and to
the same extent as they applied to the Stock subject to the Award. Upon the
occurrence of a Reorganization Event involving the liquidation or dissolution of
the Company, except to the extent specifically provided to the contrary in the
instrument evidencing this Award or any other agreement between a Participant
and the Company, all restrictions and conditions on this Award then outstanding
shall automatically be deemed terminated or satisfied.

(b) This Agreement shall not in any way affect the right of the Company to
adjust, reclassify, reorganize or otherwise change its capital or business
structure or to merge, consolidate, dissolve, liquidate or sell or transfer all
or any part of its business or assets.

6. Change in Control.

(a) Any shares of Restricted Stock subject to this Award at the time of a Change
in Control (as defined below) may be assumed by the successor entity or
otherwise continued in full force and effect or may be replaced with a cash
incentive program of the successor entity which preserves the fair market value
of any shares of Restricted Stock subject to the Award at the time of the Change
in Control and provides for subsequent payout of that value in accordance with
the vesting schedule applicable to the Award. In the event of such assumption or
continuation of the Award or such replacement of the Award with a cash incentive
program, no accelerated vesting of the shares of Restricted Stock shall occur at
the time of the Change in Control, except to the limited extent otherwise
provided in Section 6(c) below.

 

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(b) In the event the Award is assumed or otherwise continued in effect, the
shares of Restricted Stock subject to the Award will be appropriately adjusted
immediately after the consummation of the Change in Control to reflect the
transaction. To the extent the actual holders of the outstanding Stock receive
cash consideration for their Stock in consummation of the Change in Control, the
successor corporation may, in connection with the assumption or continuation of
the shares of Restricted Stock subject to the Award at that time, substitute one
or more shares of its own common stock with a fair market value equivalent to
the cash consideration paid per share of Stock in the Change in Control
transaction, provided such common stock is readily traded on an established
securities exchange.

(c) Upon the closing of the Change in Control, the restrictions shall lapse with
respect to fifty percent (50%) of the shares of Restricted Stock at the time
subject to this Award, subject to the Company’s collection of withholding taxes.
The remaining shares of Restricted Stock shall continue to vest equally over the
remaining vesting term as set forth in Section 3; provided that in the event the
Participant ceases to be an Eligible Participant because of termination of the
service relationship by the Company other than for Cause within twelve
(12) months following the closing of the Change in Control, then the
restrictions shall lapse with respect to all of the shares of Restricted Stock,
subject to the Company’s collection of the applicable withholding taxes pursuant
to the provisions of Section 9.

(d) If the shares of Restricted Stock subject to this Award at the time of the
Change in Control are not so assumed or otherwise continued in effect or
replaced with a cash incentive program in accordance with Section 6(a) above,
then the restrictions on the shares of Restricted Stock shall lapse immediately
prior to the closing of the Change in Control, subject to the Company’s
collection of the applicable withholding taxes pursuant to the provisions of
Section 9.

(e) For purposes of this Agreement, a “Change in Control” of the Company shall
mean a change in ownership or control of the Company effected through any of the
following transactions:

(i) a merger, consolidation or other reorganization approved by the Company’s
stockholders, unless securities representing more than 50% of the total combined
voting power of the voting securities of the successor corporation are
immediately thereafter beneficially owned, directly or indirectly and in
substantially the same proportion, by the persons who beneficially owned the
Company’s outstanding voting securities immediately prior to such transaction,
or

(ii) a stockholder-approved sale, transfer or other disposition of all or
substantially all of the Company’s assets, or

(iii) the closing of any transaction or series of related transactions pursuant
to which any person or any group of persons comprising a “group” within the
meaning of Rule 13d-5(b)(1) of the Exchange Act (other than the Company or a
person that, prior to such

 

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transaction or series of related transactions, directly or indirectly controls,
is controlled by or is under common control with, the Company) becomes directly
or indirectly the beneficial owner (within the meaning of Rule 13d-3 of the
Exchange Act) of securities possessing (or convertible into or exercisable for
securities possessing) more than 50% of the total combined voting power of the
Company’s securities (as measured in terms of the power to vote with respect to
the election of members of the board of directors) outstanding immediately after
the consummation of such transaction or series of related transactions, whether
such transaction involves a direct issuance from the Company or the acquisition
of outstanding securities held by one or more of the Company’s existing
stockholders.

(f) For purposes of this Agreement, “Cause” shall mean willful misconduct by the
Participant or willful failure by the Participant to perform his
responsibilities to the Company (including, without limitation, breach by the
Participant of any provision of any employment, consulting, advisory,
nondisclosure, non-competition or other similar agreement between the
Participant and the Company), as determined by the Company, which determination
shall be conclusive. The Participant shall be considered to have been discharged
for “cause” if the Company determines, within 30 days after the Participant’s
resignation, that discharge for cause was warranted.

7. Incorporation of Plan. Notwithstanding anything herein to the contrary, this
Agreement shall be subject to and governed by all the terms and conditions of
the Plan. Capitalized terms in this Agreement shall have the meaning specified
in the Plan, unless a different meaning is specified herein.

8. Transferability. This Agreement is personal to the Participant, is
non-assignable and is not transferable in any manner, by operation of law or
otherwise, other than by will or the laws of descent and distribution.

9. Tax Withholding. The Participant shall, not later than the date as of which
the receipt of this Award becomes a taxable event for Federal income tax
purposes, pay to the Company or make provisions satisfactory to the Company for
payment of any Federal, state, and local taxes required by law to be withheld on
account of such taxable event. The Participant may elect to have such tax
withholding obligation satisfied, in whole or in part, by authorizing the
Company to withhold from shares of Stock to be issued.

10. Election Under Section 83(b). The Participant and the Company hereby agree
that the Participant may, within 30 days following the acceptance of this Award
as provided in Section 1 hereof, file with the Internal Revenue Service and the
Company an election under Section 83(b) of the Internal Revenue Code. In the
event the Participant makes such an election, he agrees to provide a copy of the
election to the Company. The Participant acknowledges that he is responsible for
obtaining the advice of his own tax advisors with regard to the Section 83(b)
election and he is relying solely on such advisors and not on any statements or
representations of the Company or any of its agents with respect to such
election.

11. No Obligation to Continue Employment. Neither the Company nor any subsidiary
is obligated by or as a result of the Plan or this Agreement to continue the
Participant in employment and neither the Plan nor this Agreement shall
interfere in any way with the right of the Company or any subsidiary to
terminate the employment of the Participant at any time.

 

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12. Notices. Notices hereunder shall be mailed or delivered to the Company at
its principal place of business and shall be mailed or delivered to the
Participant at the address on file with the Company or, in either case, at such
other address as one party may subsequently furnish to the other party in
writing.

13. Amendment. This Agreement may be amended or modified only by a written
instrument executed by both the Company and the Participant.

14. Governing Law. This Agreement shall be construed, interpreted and enforced
in accordance with the internal laws of the State of New Jersey without regard
to any applicable conflicts of laws.

15. Participant’s Acknowledgments. The Participant acknowledges that he: (i) has
read this Agreement; (ii) has been represented in the preparation, negotiation
and execution of this Agreement by legal counsel of the Participant’s own choice
or has voluntarily declined to seek such counsel; (iii) understands the terms
and consequences of this Agreement; and (iv) is fully aware of the legal and
binding effect of this Agreement.

 

ARBINET-THEXCHANGE, INC. By:  

 

Name:   Title:  

The foregoing Agreement is hereby accepted and the terms and conditions thereof
hereby agreed to by the undersigned.

 

Dated:  

 

   

 

      Participant’s Signature       Participant’s name and address:      

 

     

 

     

 

 

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