Exhibit 10.29

 

EARTHLINK, INC.

 

AMENDED AND RESTATED

CHANGE-IN-CONTROL ACCELERATED VESTING

AND SEVERANCE PLAN

 

THIS EARTHLINK, INC. AMENDED AND RESTATED CHANGE-IN-CONTROL ACCELERATED VESTING
AND SEVERANCE PLAN (this “Plan”), of EarthLink, Inc., a Delaware corporation
(“Employer”), and its Affiliates (as defined below) for the benefit of the
eligible employees described herein, is effective as of the 3rd day of February,
2010.  This Plan replaces and supersedes the terms of the Plan as in effect
prior to this amendment and restatement.

 

WITNESSETH:

 

WHEREAS, the Employees (as defined below) are currently employed by Employer or
an Affiliate (as defined below); and

 

WHEREAS, Employer and its Affiliates previously established the Plan to provide
certain security to the Employees in connection with their employment with the
Employer or an Affiliate in the event of a Change in Control of the Employer (as
defined below); and

 

WHEREAS, in Section 14 of the Plan, Employer generally reserved the right to
amend the Plan from time to time, and in Section 17 of the Plan the Employer
reserved specifically the right to amend the Plan as appropriate to address
Section 409A of the Code (as defined below); and

 

WHEREAS, the Employer now desires to amend and restate the Plan to clarify
certain provisions under Section 409A of the Code.

 

NOW, THEREFORE, Employer and its Affiliates hereby amend and restate the Plan as
set forth below.

 

1.                                       Definitions.

 

For purposes of this Plan:

 

(A)           “AFFILIATE” MEANS ANY ENTITY WITH WHOM THE EMPLOYER WOULD BE
CONSIDERED A SINGLE EMPLOYER UNDER CODE SECTIONS 414(B) OR 414(C) (EXCEPT THAT,
FOR PURPOSES OF DETERMINING WHETHER A TERMINATION OF EMPLOYMENT HAS OCCURRED,
THE LANGUAGE “AT LEAST 50%” SHALL BE SUBSTITUTED FOR “AT LEAST 80%” EACH PLACE
IT APPEARS THEREIN).

 

(B)           “BENEFICIAL OWNERSHIP” MEANS BENEFICIAL OWNERSHIP AS THAT TERM IS
USED IN RULE 13D-3 PROMULGATED UNDER THE EXCHANGE ACT.

 

(C)           “BENEFICIARY” SHALL MEAN THE PERSON OR ENTITY AN EMPLOYEE
DESIGNATES, BY WRITTEN INSTRUMENT DELIVERED TO THE EMPLOYER OR AN AFFILIATE, TO
RECEIVE THE BENEFITS PAYABLE UNDER THIS

 

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PLAN AFTER THE EMPLOYEE’S DEATH.  IF AN EMPLOYEE FAILS TO DESIGNATE A
BENEFICIARY, OR IF NO DESIGNATED BENEFICIARY SURVIVES THE EMPLOYEE, SUCH
BENEFITS SHALL BE PAID:

 

(1)           TO EMPLOYEE’S SURVIVING SPOUSE; OR

 

(2)           IF THERE IS NO SURVIVING SPOUSE, TO EMPLOYEE’S LIVING DESCENDANTS
PER STIRPES; OR

 

(3)           IF THERE IS NEITHER A SURVIVING SPOUSE NOR LIVING DESCENDANTS, TO
EMPLOYEE’S ESTATE.

 

(D)           “BENEFIT CATEGORY” SHALL MEAN ONE OF THE FOLLOWING BENEFIT
CATEGORIES:  (1) THE GOLD BENEFIT CATEGORY, (2) THE SILVER BENEFIT CATEGORY OR
(3) THE BRONZE BENEFIT CATEGORY.  FOR PURPOSES OF THIS PLAN, THE GOLD BENEFIT
CATEGORY SHALL INCLUDE THE CHIEF EXECUTIVE OFFICER AND PRESIDENT OF THE
EMPLOYER; THE SILVER BENEFIT CATEGORY SHALL INCLUDE THE CHIEF FINANCIAL OFFICER
OF THE EMPLOYER AND ANY OTHER OFFICER OF THE EMPLOYER OR ANY AFFILIATE WHOSE
POSITION IS DESIGNATED BY THE EMPLOYER THROUGH ITS BOARD OF DIRECTORS AS AN
EXECUTIVE OFFICER AND INCLUDED WITHIN THE SILVER BENEFIT CATEGORY; AND THE
BRONZE BENEFIT CATEGORY SHALL INCLUDE THE VICE PRESIDENTS CLASSIFIED JOBS OF THE
EMPLOYER OR ANY AFFILIATE.  NOTWITHSTANDING THE FOREGOING, THE CHIEF EXECUTIVE
OFFICER, PRESIDENT AND CHIEF FINANCIAL OFFICER OF ANY AFFILIATE SHALL BE
INCLUDED IN THE SILVER BENEFIT CATEGORY PROVIDED THE POSITION WAS INCLUDED IN
THE SILVER BENEFIT CATEGORY PRIOR TO MAY 8, 2008 AND DIRECTOR BAND JOBS OF THE
EMPLOYER OR ANY AFFILIATE SHALL BE INCLUDED IN THE BRONZE BENEFIT CATEGORY
PROVIDED THE POSITION WAS IN THE BLUE ZONE BAND AND INCLUDED IN THE BRONZE
BENEFIT CATEGORY PRIOR TO MAY 8, 2008, PROVIDED IN EITHER CASE ONLY WITH RESPECT
TO AN EMPLOYEE WHO RECEIVED PRIOR TO MAY 8, 2008 A NOTICE OF ELIGIBILITY TO
PARTICIPATE IN THE PLAN.  IF THE EMPLOYER DESIGNATES ADDITIONAL QUALIFYING
POSITIONS, THEN THE EMPLOYER ALSO SHALL SPECIFY INTO WHICH BENEFIT CATEGORY THAT
QUALIFYING POSITION WILL BE INCLUDED.  THE EMPLOYEE’S BENEFIT CATEGORY SHALL BE
DETERMINED BASED ON THE EMPLOYEE’S QUALIFYING POSITION AT THE TIME OF THE CHANGE
IN CONTROL OF THE EMPLOYER, AND ANY EMPLOYEE IN MORE THAN ONE QUALIFYING
POSITION SHALL BE DEEMED FOR PURPOSES OF THIS PLAN TO BE IN ONLY THE QUALIFYING
POSITION THAT WOULD ENTITLE SUCH EMPLOYEE TO THE GREATEST BENEFITS UNDER THIS
PLAN.

 

(E)           “BENEFITS SEVERANCE PERIOD” SHALL MEAN (1) FOR AN EMPLOYEE IN THE
GOLD BENEFIT CATEGORY, THE ONE AND ONE-HALF YEARS, (2) FOR AN EMPLOYEE IN THE
SILVER BENEFIT CATEGORY, THE ONE AND ONE-HALF YEARS, AND (3) FOR AN EMPLOYEE IN
THE BRONZE BENEFIT CATEGORY, THE ONE YEAR, BEGINNING IN EACH CASE ON THE
EMPLOYEE’S TERMINATION OF EMPLOYMENT.

 

(F)            “BONUS TARGET” SHALL MEAN THE ANNUAL INCENTIVE BONUS PAYABLE TO
THE EMPLOYEE AT THE GREATER OF THE RATE IN EFFECT ON (1) THE DATE THE CHANGE IN
CONTROL OF THE EMPLOYER OCCURS OR (2) THE DATE OF THE EMPLOYEE’S TERMINATION OF
EMPLOYMENT UNDER THE CIRCUMSTANCES DESCRIBED IN SECTION 2(A).

 

(G)           “BUSINESS COMBINATION” MEANS A REORGANIZATION, MERGER OR
CONSOLIDATION OF THE EMPLOYER.

 

(H)           “CASH SEVERANCE” SHALL MEAN A LUMP-SUM CASH PAYMENT EQUAL TO
(1) FOR AN EMPLOYEE IN THE GOLD BENEFIT CATEGORY, ONE HUNDRED AND FIFTY PERCENT
(150%) OF THE SUM OF THE EMPLOYEE’S SALARY AND BONUS TARGET, (2) FOR AN EMPLOYEE
IN THE SILVER BENEFIT CATEGORY, ONE HUNDRED AND FIFTY PERCENT (150%) OF THE SUM
OF THE EMPLOYEE’S SALARY AND BONUS TARGET, AND (3) 

 

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FOR AN EMPLOYEE IN THE BRONZE BENEFIT CATEGORY, ONE HUNDRED PERCENT (100%) OF
THE SUM OF THE EMPLOYEE’S SALARY AND BONUS TARGET.

 

(I)            “CAUSE” SHALL EXIST WHERE THE EMPLOYEE’S TERMINATION OF
EMPLOYMENT IS BY THE EMPLOYER OR AN AFFILIATE UPON (1) THE EMPLOYEE’S WILLFUL
AND CONTINUED FAILURE TO SUBSTANTIALLY PERFORM HIS OR HER EMPLOYMENT DUTIES
(OTHER THAN ANY FAILURE ON ACCOUNT OF A DISABILITY), AFTER A WRITTEN NOTICE IS
DELIVERED TO THE EMPLOYEE BY AN EXECUTIVE OFFICER OF THE EMPLOYER OR AFFILIATE
WHICH EMPLOYS EMPLOYEE OR THE PERSON IN CHARGE OF THE HUMAN RESOURCES FUNCTION
OF SUCH EMPLOYER OR AFFILIATE (OR IF THE EMPLOYEE IS THE CHIEF EXECUTIVE OFFICER
OR PRESIDENT OF THE EMPLOYER, THE CHAIRMAN OF THE COMPENSATION COMMITTEE OF THE
BOARD OF DIRECTORS OF THE EMPLOYER) THAT SPECIFICALLY IDENTIFIES THE MANNER IN
WHICH SUCH EXECUTIVE OFFICER OR PERSON IN CHARGE OF THE HUMAN RESOURCES FUNCTION
(OR SUCH CHAIRMAN) BELIEVES THAT THE EMPLOYEE HAS FAILED TO SUBSTANTIALLY
PERFORM HIS OR HER EMPLOYMENT DUTIES AND AFTER A REASONABLE OPPORTUNITY IS
AFFORDED TO THE EMPLOYEE TO CURE HIS OR HER PERFORMANCE FAILURE(S), OR (2) THE
EMPLOYEE WILLFULLY ENGAGING IN MISCONDUCT THAT IS MATERIALLY INJURIOUS TO THE
EMPLOYER OR AN AFFILIATE, MONETARILY OR OTHERWISE.  FOR PURPOSES OF THIS
DEFINITION, NO ACT, OR FAILURE TO ACT, ON THE EMPLOYEE’S PART WILL BE CONSIDERED
“WILLFUL” UNLESS DONE, OR OMITTED TO BE DONE, BY THE EMPLOYEE NOT IN GOOD FAITH
AND WITHOUT REASONABLE BELIEF THAT HIS OR HER ACT OR OMISSION WAS IN THE BEST
INTEREST OF THE EMPLOYER OR AN AFFILIATE.  NOTWITHSTANDING THE ABOVE, THE
EMPLOYEE WILL NOT BE DEEMED TO HAVE HAD A TERMINATION OF EMPLOYMENT FOR CAUSE
UNLESS AND UNTIL HE OR SHE HAS BEEN GIVEN A COPY OF THE NOTICE OF TERMINATION
FROM AN EXECUTIVE OFFICER OR PERSON IN CHARGE OF THE HUMAN RESOURCES FUNCTION
(OR IN CASE OF THE CHIEF EXECUTIVE OFFICER OR PRESIDENT OF THE EMPLOYER, THE
CHAIRMAN OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS), AFTER
REASONABLE NOTICE TO THE EMPLOYEE AND AN OPPORTUNITY FOR HIM OR HER, TOGETHER
WITH HIS OR HER COUNSEL, TO BE HEARD BEFORE (1) THE CHIEF EXECUTIVE OFFICER OF
THE EMPLOYER, OR (2) IF THE EMPLOYEE IS AN OFFICER OF THE EMPLOYER OR AN
AFFILIATE WHO HAS BEEN ELECTED OR APPOINTED BY THE BOARD OF DIRECTORS OF THE
EMPLOYER OR AFFILIATE, AS THE CASE MAY BE, TO SUCH OFFICE, THE BOARD OF
DIRECTORS OF THE EMPLOYER OR AFFILIATE, OR (3) IN ALL CASES NOT INVOLVING AN
ELECTED OFFICER AND WHERE THE CHIEF EXECUTIVE OFFICER OF THE EMPLOYER OTHERWISE
DIRECTS OR DELEGATES THIS RESPONSIBILITY, THE EXECUTIVE OFFICER OR PERSON IN
CHARGE OF THE HUMAN RESOURCES FUNCTION OR A DIRECT REPORT TO SUCH CHIEF
EXECUTIVE OFFICER TO WHOM SUCH RESPONSIBILITY WAS DELEGATED, FINDING THAT IN THE
GOOD FAITH OPINION OF THE CHIEF EXECUTIVE OFFICER, OR, IN THE CASE OF AN ELECTED
OFFICER, FINDING THAT IN THE GOOD FAITH OPINION OF TWO-THIRDS OF THE APPLICABLE
BOARD OF DIRECTORS, OR, IN ALL OTHER CASES, FINDING THAT IN THE GOOD FAITH
OPINION OF THE APPLICABLE EXECUTIVE OFFICER OR PERSON IN CHARGE OF THE HUMAN
RESOURCES FUNCTION OR A DIRECT REPORT TO THE CHIEF EXECUTIVE OFFICER TO WHOM
SUCH RESPONSIBILITY WAS DELEGATED, THAT THE EMPLOYEE COMMITTED THE CONDUCT SET
FORTH ABOVE IN CLAUSES (1) OR (2) OF THIS DEFINITION AND SPECIFYING THE
PARTICULARS OF THAT FINDING IN DETAIL.

 

(J)            “CHANGE IN CONTROL” OF THE EMPLOYER MEANS THE OCCURRENCE OF ANY
OF THE FOLLOWING EVENTS:

 

(1)           THE ACCUMULATION IN ANY NUMBER OF RELATED OR UNRELATED
TRANSACTIONS BY ANY PERSON OF BENEFICIAL OWNERSHIP OF MORE THAN FIFTY PERCENT
(50%) OF THE COMBINED VOTING POWER OF THE EMPLOYER’S VOTING STOCK; PROVIDED THAT
FOR PURPOSES OF THIS SUBPARAGRAPH (1), A CHANGE IN CONTROL WILL NOT BE DEEMED TO
HAVE OCCURRED IF THE ACCUMULATION OF MORE THAN FIFTY PERCENT (50%) OF THE VOTING
POWER OF THE EMPLOYER’S VOTING STOCK RESULTS FROM ANY ACQUISITION OF VOTING
STOCK (A) DIRECTLY FROM THE EMPLOYER THAT IS APPROVED BY THE INCUMBENT BOARD,
(B) BY THE EMPLOYER, (C) BY ANY EMPLOYEE BENEFIT PLAN (OR RELATED TRUST)
SPONSORED OR MAINTAINED BY THE

 

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EMPLOYER OR ANY SUBSIDIARY, OR (D) BY ANY PERSON PURSUANT TO A BUSINESS
COMBINATION THAT COMPLIES WITH CLAUSES (A) AND (B) OF SUBPARAGRAPH (2) BELOW; OR

 

(2)           CONSUMMATION OF A BUSINESS COMBINATION, UNLESS, IMMEDIATELY
FOLLOWING THAT BUSINESS COMBINATION, (A) ALL OR SUBSTANTIALLY ALL OF THE PERSONS
WHO WERE THE BENEFICIAL OWNERS OF VOTING STOCK OF THE EMPLOYER IMMEDIATELY PRIOR
TO THAT BUSINESS COMBINATION BENEFICIALLY OWN, DIRECTLY OR INDIRECTLY, AT LEAST
FIFTY PERCENT (50%) OF THE THEN OUTSTANDING SHARES OF COMMON STOCK AND AT LEAST
FIFTY PERCENT (50%) OF THE COMBINED VOTING POWER OF THE THEN OUTSTANDING VOTING
STOCK ENTITLED TO VOTE GENERALLY IN THE ELECTION OF DIRECTORS OF THE ENTITY
RESULTING FROM THAT BUSINESS COMBINATION (INCLUDING, WITHOUT LIMITATION, AN
ENTITY THAT AS A RESULT OF THAT TRANSACTION OWNS THE EMPLOYER OR ALL OR
SUBSTANTIALLY ALL OF THE EMPLOYER’S ASSETS EITHER DIRECTLY OR THROUGH ONE OR
MORE SUBSIDIARIES) IN SUBSTANTIALLY THE SAME PROPORTIONS RELATIVE TO EACH OTHER
AS THEIR OWNERSHIP, IMMEDIATELY PRIOR TO THAT BUSINESS COMBINATION, OF THE
VOTING STOCK OF THE EMPLOYER, AND (B) AT LEAST SIXTY PERCENT (60%) OF THE
MEMBERS OF THE BOARD OF DIRECTORS OF THE ENTITY RESULTING FROM THAT BUSINESS
COMBINATION HOLDING AT LEAST SIXTY PERCENT (60%) OF THE VOTING POWER OF SUCH
BOARD OF DIRECTORS WERE MEMBERS OF THE INCUMBENT BOARD AT THE TIME OF THE
EXECUTION OF THE INITIAL AGREEMENT OR OF THE ACTION OF THE BOARD OF DIRECTORS
PROVIDING FOR THAT BUSINESS COMBINATION AND AS A RESULT OF OR IN CONNECTION WITH
SUCH BUSINESS COMBINATION, NO PERSON HAS A RIGHT TO DILUTE EITHER OF SUCH
PERCENTAGES BY APPOINTING ADDITIONAL MEMBERS TO THE BOARD OF DIRECTORS OR
OTHERWISE WITHOUT ELECTION OR OTHER ACTION BY THE STOCKHOLDERS; OR

 

(3)           A SALE OR OTHER DISPOSITION OF ALL OR SUBSTANTIALLY ALL OF THE
ASSETS OF THE EMPLOYER, EXCEPT PURSUANT TO A BUSINESS COMBINATION THAT COMPLIES
WITH CLAUSES (A) AND (B) OF SUBPARAGRAPH (2); OR

 

(4)           APPROVAL BY THE SHAREHOLDERS OF THE EMPLOYER OF A COMPLETE
LIQUIDATION OR DISSOLUTION OF THE EMPLOYER, EXCEPT PURSUANT TO A BUSINESS
COMBINATION THAT COMPLIES WITH CLAUSES (A) AND (B) OF SUBPARAGRAPH 2; OR

 

(5)           THE ACQUISITION BY ANY PERSON OF THE RIGHT TO CONTROL THE
EMPLOYER.

 

(K)           “CODE” MEANS THE INTERNAL REVENUE CODE OF 1986, AMENDED, AND ANY
SUCCESSOR THERETO.

 

(L)            “CONTROL” MEANS THE POSSESSION, DIRECT OR INDIRECT, OF THE POWER
TO DIRECT OR CAUSE THE DIRECTION OF THE MANAGEMENT AND POLICIES OF THE EMPLOYER
(A) THROUGH THE OWNERSHIP OF SECURITIES WHICH PROVIDE THE HOLDER WITH SUCH POWER
EXCLUDING VOTING RIGHTS ATTENDANT WITH SUCH SECURITIES OR (B) BY CONTRACT.

 

(M)          “EMPLOYEE” SHALL MEAN A FULL-TIME COMMON-LAW EMPLOYEE OF EMPLOYER
OR AN AFFILIATE WHO IS EMPLOYED BY THE EMPLOYER OR AN AFFILIATE AND SELECTED TO
PARTICIPATE IN THE PLAN AND WHO HOLDS A QUALIFYING POSITION IN THE EMPLOYER OR
AN AFFILIATE AT ALL TIMES FROM INITIAL PARTICIPATION IN THE PLAN THROUGH THE
CHANGE IN CONTROL OF THE EMPLOYER.  ALL FULL-TIME COMMON-LAW EMPLOYEES OF THE
EMPLOYER OR AN AFFILIATE WHO WERE EMPLOYED BY THE EMPLOYER OR AN AFFILIATE AND
WHO HELD A QUALIFYING POSITION IN THE EMPLOYER OR AN AFFILIATE IMMEDIATELY PRIOR
TO MAY 8, 2008, AND HAVE BEEN CONTINUOUSLY EMPLOYED SINCE THAT TIME, PARTICIPATE
IN THE PLAN AS OF SUCH MAY 8, 2008 DATE, SUBJECT TO COMPLIANCE WITH THE OTHER
TERMS AND CONDITIONS OF THE PLAN. 

 

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ALL FULL-TIME COMMON-LAW EMPLOYEES OF THE EMPLOYER OR AN AFFILIATE WHO WERE
EMPLOYED BY THE EMPLOYER OR AN AFFILIATE AND WHO HELD A QUALIFYING POSITION IN
THE EMPLOYER OR AN AFFILIATE BEGINNING ON AND AFTER MAY 8, 2008 (AND ARE NOT
DESCRIBED IN THE PRECEDING SENTENCE) SHALL PARTICIPATE IN THE PLAN AS OF THE
DATE THE EMPLOYER SELECTS SUCH INDIVIDUAL FOR PARTICIPATION, SUBJECT TO
COMPLIANCE WITH THE OTHER TERMS AND CONDITIONS OF THE PLAN.  A FULL-TIME COMMON
LAW EMPLOYEE ONLY INCLUDES AN INDIVIDUAL WHO RENDERS PERSONAL SERVICES TO THE
EMPLOYER OR AN AFFILIATE AND WHO, IN ACCORDANCE WITH THE ESTABLISHED PAYROLL
ACCOUNTING AND PERSONNEL POLICIES OF THE EMPLOYER OR AN AFFILIATE, IS
CHARACTERIZED BY THE EMPLOYER OR AN AFFILIATE AS A FULL-TIME COMMON LAW
EMPLOYEE.  NOTWITHSTANDING THE FOREGOING, INDEPENDENT CONTRACTORS ARE NOT
EMPLOYEES FOR PURPOSES OF THIS PLAN.  MOREOVER, NOTWITHSTANDING THE FOREGOING,
AN EMPLOYEE DOES NOT INCLUDE A PERSON WHOM THE EMPLOYER OR AN AFFILIATE HAS
IDENTIFIED ON ITS PAYROLL, PERSONNEL OR TAX RECORDS AS AN INDEPENDENT CONTRACTOR
OR A PERSON WHO HAS ACKNOWLEDGED IN WRITING TO THE EMPLOYER OR AN AFFILIATE THAT
SUCH PERSON IS AN INDEPENDENT CONTRACTOR WHETHER OR NOT A COURT, THE INTERNAL
REVENUE SERVICE OR ANY OTHER ENTITY ULTIMATELY DETERMINES SUCH CLASSIFICATION TO
BE CORRECT AS A MATTER OF LAW.  EXHIBIT A ATTACHED HERETO SHALL CONTAIN THE
NAMES OF EACH EMPLOYEE AND HIS OR HER QUALIFYING POSITION AND BENEFIT CATEGORY. 
THE EMPLOYER SHALL UPDATE EXHIBIT A AS NECESSARY TO ALWAYS REFLECT THE EMPLOYEES
PARTICIPATING IN THE PLAN.  NOTWITHSTANDING ANY OTHER PROVISION OF THIS PLAN, AN
INDIVIDUAL WHO IS COVERED UNDER AND PARTICIPATES IN THE EARTHLINK, INC.
ACCELERATED VESTING AND COMPENSATION CONTINUATION PLAN SHALL NOT BECOME AN
EMPLOYEE AND PARTICIPATE IN THIS PLAN UNLESS AND UNTIL HE OR SHE WAIVES AND
RELEASES ANY AND ALL RIGHTS TO BENEFITS AND COVERAGE HE OR SHE HAS UNDER THE
EARTHLINK, INC. ACCELERATED VESTING AND COMPENSATION CONTINUATION PLAN.

 

(N)           “EXCHANGE ACT” MEANS THE SECURITIES EXCHANGE ACT OF 1934,
INCLUDING AMENDMENTS, OR SUCCESSOR STATUTES OF SIMILAR INTENT.

 

(O)           “FOR GOOD REASON” MEANS THE EMPLOYEE’S TERMINATION OF EMPLOYMENT
IS BY THE EMPLOYEE OTHER THAN ON DEATH OR ON ACCOUNT OF DISABILITY AND BASED ON:

 

(1)           WITH RESPECT TO AN EMPLOYEE IN EITHER THE GOLD OR SILVER BENEFIT
CATEGORY, THE ASSIGNMENT TO THE EMPLOYEE OF DUTIES INCONSISTENT WITH HIS OR HER
POSITION AND STATUS WITH THE EMPLOYER OR AFFILIATE AS THEY EXISTED IMMEDIATELY
PRIOR TO A CHANGE IN CONTROL OF THE EMPLOYER, OR A SUBSTANTIAL CHANGE IN HIS OR
HER TITLE, OFFICES OR AUTHORITY, OR IN THE NATURE OF HIS OR HER OTHER
RESPONSIBILITIES, AS THEY EXISTED IMMEDIATELY PRIOR TO A CHANGE IN CONTROL OF
THE EMPLOYER, EXCEPT IN CONNECTION WITH THE EMPLOYEE’S TERMINATION OF EMPLOYMENT
FOR CAUSE OR ON ACCOUNT OF DISABILITY OR AS A RESULT OF HIS OR HER DEATH OR BY
THE EMPLOYEE OTHER THAN FOR GOOD REASON; OR

 

(2)           WITH RESPECT TO AN EMPLOYEE IN THE BRONZE BENEFIT CATEGORY, THE
ASSIGNMENT TO THE EMPLOYEE OF DUTIES REQUIRING SKILLS AND EXPERIENCE THAT ARE
INCONSISTENT WITH THE SKILLS AND EXPERIENCE REQUIRED FOR HIS OR HER DUTIES WITH
THE EMPLOYER IMMEDIATELY PRIOR TO A CHANGE IN CONTROL OF THE EMPLOYER, EXCEPT IN
CONNECTION WITH THE EMPLOYEE’S TERMINATION OF EMPLOYMENT FOR CAUSE OR ON ACCOUNT
OF DISABILITY OR AS A RESULT OF HIS OR HER DEATH OR BY EMPLOYEE OTHER THAN FOR
GOOD REASON; OR

 

(3)           A REDUCTION BY THE EMPLOYER OR AN AFFILIATE IN THE EMPLOYEE’S BASE
SALARY AS IN EFFECT ON THE DATE OF THIS PLAN OR AS HIS OR HER SALARY MAY BE
INCREASED FROM TIME TO TIME, WITHOUT EMPLOYEE’S WRITTEN CONSENT; OR

 

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(4)           A REDUCTION BY THE EMPLOYER OR AN AFFILIATE IN THE TARGET CASH
BONUS PAYABLE TO THE EMPLOYEE UNDER ANY INCENTIVE COMPENSATION PLAN(S), AS IT
(OR THEY) MAY BE MODIFIED FROM TIME TO TIME, IN EFFECT IMMEDIATELY PRIOR TO A
CHANGE IN CONTROL OF THE EMPLOYER, OR A FAILURE BY THE EMPLOYER OR AN AFFILIATE
TO CONTINUE THE EMPLOYEE AS A PARTICIPANT IN THE INCENTIVE COMPENSATION
PLAN(S) ON AT LEAST THE BASIS OF THE EMPLOYEE’S PARTICIPATION IMMEDIATELY PRIOR
TO A CHANGE IN CONTROL OF THE EMPLOYER OR TO PAY THE EMPLOYEE THE AMOUNTS THAT
HE OR SHE WOULD BE ENTITLED TO RECEIVE IN ACCORDANCE WITH SUCH PLAN(S); OR

 

(5)           THE EMPLOYER OR AN AFFILIATE REQUIRING THE EMPLOYEE TO BE BASED
MORE THAN THIRTY-FIVE (35) MILES FROM THE LOCATION WHERE HE OR SHE IS BASED
IMMEDIATELY PRIOR TO A CHANGE IN CONTROL OF THE EMPLOYER, EXCEPT FOR TRAVEL ON
THE EMPLOYER’S OR AFFILIATE’S BUSINESS THAT IS REQUIRED OR NECESSARY TO
PERFORMANCE OF HIS OR HER JOB AND SUBSTANTIALLY CONSISTENT WITH HIS OR HER
BUSINESS TRAVEL OBLIGATIONS PRIOR TO THE CHANGE IN CONTROL OF THE EMPLOYER, OR
IF THE EMPLOYEE CONSENTS TO THAT RELOCATION, THE FAILURE BY THE EMPLOYER OR AN
AFFILIATE TO PAY (OR REIMBURSE THE EMPLOYEE FOR) ALL REASONABLE MOVING EXPENSES
INCURRED BY THE EMPLOYEE OR TO INDEMNIFY THE EMPLOYEE AGAINST ANY LOSS REALIZED
IN THE SALE OF HIS OR HER PRINCIPAL RESIDENCE IN CONNECTION WITH THAT
RELOCATION; OR

 

(6)           THE FAILURE BY THE EMPLOYER OR AN AFFILIATE TO CONTINUE IN EFFECT
ANY MATERIAL RETIREMENT OR COMPENSATION PLAN, PERFORMANCE SHARE PLAN, STOCK
OPTION PLAN, LIFE INSURANCE PLAN, HEALTH AND ACCIDENT PLAN, DISABILITY PLAN OR
ANOTHER BENEFIT PLAN IN WHICH THE EMPLOYEE IS PARTICIPATING IMMEDIATELY PRIOR TO
A CHANGE IN CONTROL OF THE EMPLOYER (OR PROVIDE PLANS PROVIDING HIM OR HER WITH
SUBSTANTIALLY SIMILAR BENEFITS), THE TAKING OF ANY ACTION BY THE EMPLOYER OR AN
AFFILIATE THAT WOULD ADVERSELY AFFECT THE EMPLOYEE’S PARTICIPATION OR MATERIALLY
REDUCE HIS OR HER BENEFITS UNDER ANY OF THOSE PLANS OR DEPRIVE HIM OR HER OF ANY
MATERIAL FRINGE BENEFIT ENJOYED BY THE EMPLOYEE IMMEDIATELY PRIOR TO A CHANGE IN
CONTROL OF THE EMPLOYER, OR THE FAILURE BY THE EMPLOYER OR AN AFFILIATE TO
PROVIDE THE EMPLOYEE WITH THE NUMBER OF PAID VACATION DAYS TO WHICH HE OR SHE IS
THEN ENTITLED IN ACCORDANCE WITH NORMAL VACATION PRACTICES IN EFFECT IMMEDIATELY
PRIOR TO A CHANGE IN CONTROL OF THE EMPLOYER; OR

 

(7)           THE FAILURE BY THE EMPLOYER OR AN AFFILIATE TO OBTAIN THE
ASSUMPTION OF THE AGREEMENT TO PERFORM THIS PLAN BY ANY SUCCESSOR; OR

 

(8)           ANY PURPORTED TERMINATION OF EMPLOYMENT THAT IS NOT EFFECTED
PURSUANT TO A NOTICE OF TERMINATION SATISFYING THE REQUIREMENTS OF A TERMINATION
OF EMPLOYMENT FOR “CAUSE.”

 

NOTWITHSTANDING THE FOREGOING, FOR PURPOSES OF SECTION 3 OF THE PLAN REGARDING
ACCELERATED VESTING OF OUTSTANDING RESTRICTED STOCK UNITS ONLY, “FOR GOOD
REASON” MEANS THE EMPLOYEE’S TERMINATION OF EMPLOYMENT IS BY THE EMPLOYEE OTHER
THAN ON DEATH OR ON ACCOUNT OF DISABILITY AND BASED ON:

 

(I)            WITH RESPECT TO AN EMPLOYEE IN EITHER THE GOLD OR SILVER BENEFIT
CATEGORY, THE ASSIGNMENT TO THE EMPLOYEE OF DUTIES MATERIALLY INCONSISTENT WITH
HIS OR HER POSITION AND STATUS WITH THE EMPLOYER OR AFFILIATE AS THEY EXISTED
IMMEDIATELY PRIOR TO A CHANGE IN CONTROL OF THE EMPLOYER, OR A SUBSTANTIAL
DIMINUTION IN HIS OR HER TITLE, OFFICES OR AUTHORITY, OR IN THE NATURE OF HIS OR
HER OTHER RESPONSIBILITIES, AS THEY EXISTED IMMEDIATELY PRIOR TO A CHANGE IN
CONTROL OF THE EMPLOYER, EXCEPT IN CONNECTION WITH THE EMPLOYEE’S

 

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TERMINATION OF EMPLOYMENT FOR CAUSE OR ON ACCOUNT OF DISABILITY OR AS A RESULT
OF HIS OR HER DEATH OR BY THE EMPLOYEE OTHER THAN FOR GOOD REASON; OR

 

(II)           WITH RESPECT TO AN EMPLOYEE IN THE BRONZE BENEFIT CATEGORY, THE
ASSIGNMENT TO THE EMPLOYEE OF DUTIES REQUIRING SKILLS AND EXPERIENCE THAT ARE
MATERIALLY INCONSISTENT WITH THE SKILLS AND EXPERIENCE REQUIRED FOR HIS OR HER
DUTIES WITH THE EMPLOYER IMMEDIATELY PRIOR TO A CHANGE IN CONTROL OF THE
EMPLOYER, EXCEPT IN CONNECTION WITH THE EMPLOYEE’S TERMINATION OF EMPLOYMENT FOR
CAUSE OR ON ACCOUNT OF DISABILITY OR AS A RESULT OF HIS OR HER DEATH OR BY
EMPLOYEE OTHER THAN FOR GOOD REASON; OR

 

(III)          A MATERIAL REDUCTION BY THE EMPLOYER OR AN AFFILIATE IN THE
EMPLOYEE’S BASE SALARY AS IN EFFECT ON THE DATE OF THIS PLAN OR AS HIS OR HER
SALARY MAY BE INCREASED FROM TIME TO TIME, WITHOUT EMPLOYEE’S WRITTEN CONSENT;
OR

 

(IV)          A MATERIAL REDUCTION BY THE EMPLOYER OR AN AFFILIATE IN THE TARGET
CASH BONUS PAYABLE TO THE EMPLOYEE UNDER ANY INCENTIVE COMPENSATION PLAN(S), AS
IT (OR THEY) MAY BE MODIFIED FROM TIME TO TIME, IN EFFECT IMMEDIATELY PRIOR TO A
CHANGE IN CONTROL OF THE EMPLOYER, OR A FAILURE BY THE EMPLOYER OR AN AFFILIATE
TO CONTINUE THE EMPLOYEE AS A PARTICIPANT IN SUCH INCENTIVE COMPENSATION
PLAN(S) ON A BASIS THAT IS NOT MATERIALLY LESS THAN THE EMPLOYEE’S PARTICIPATION
IMMEDIATELY PRIOR TO A CHANGE IN CONTROL OF THE EMPLOYER OR TO PAY THE EMPLOYEE
THE AMOUNTS THAT HE OR SHE WOULD BE ENTITLED TO RECEIVE IN ACCORDANCE WITH SUCH
PLAN(S); OR

 

(V)           THE EMPLOYER OR AN AFFILIATE REQUIRING THE EMPLOYEE TO BE BASED
MORE THAN THIRTY-FIVE (35) MILES FROM THE LOCATION WHERE HE OR SHE IS BASED
IMMEDIATELY PRIOR TO A CHANGE IN CONTROL OF THE EMPLOYER, EXCEPT FOR TRAVEL ON
THE EMPLOYER’S OR AFFILIATE’S BUSINESS THAT IS REQUIRED OR NECESSARY TO
PERFORMANCE OF HIS OR HER JOB AND SUBSTANTIALLY CONSISTENT WITH HIS OR HER
BUSINESS TRAVEL OBLIGATIONS PRIOR TO THE CHANGE IN CONTROL OF THE EMPLOYER.

 

Additionally, for purposes of Section 3 of the Plan regarding accelerated
vesting of outstanding restricted stock units, Employee must give Employer
notice of any event or condition that would constitute “For Good Reason” within
thirty (30) days of the event or condition which would constitute “For Good
Reason,” and upon receipt of such notice the Company shall have thirty (30) days
to remedy such event or condition, and if such event or condition is not
remedied within such thirty (30)-day period, any Termination of Employment by
the Employee “For Good Reason” must occur within sixty (60) days after the
period for remedying such condition or event has expired.

 

(P)           “INCUMBENT BOARD” MEANS A BOARD OF DIRECTORS AT LEAST A MAJORITY
OF WHOM CONSIST OF INDIVIDUALS WHO EITHER ARE (A) MEMBERS OF THE EMPLOYER’S
BOARD OF DIRECTORS AS OF APRIL 19, 2001 OR (B) MEMBERS WHO BECOME MEMBERS OF THE
EMPLOYER’S BOARD OF DIRECTORS SUBSEQUENT TO SUCH DATE WHOSE ELECTION, OR
NOMINATION FOR ELECTION BY THE EMPLOYER’S SHAREHOLDERS, WAS APPROVED BY A VOTE
OF AT LEAST SIXTY PERCENT (60%) OF THE DIRECTORS THEN COMPRISING THE INCUMBENT
BOARD (EITHER BY A SPECIFIC VOTE OR BY APPROVAL OF THE PROXY STATEMENT OF THE
EMPLOYER IN WHICH THAT PERSON IS NAMED AS A NOMINEE FOR DIRECTOR, WITHOUT
OBJECTION TO THAT NOMINATION), BUT EXCLUDING, FOR THAT PURPOSE, ANY INDIVIDUAL
WHOSE INITIAL ASSUMPTION OF

 

7

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OFFICE OCCURS AS A RESULT OF AN ACTUAL OR THREATENED ELECTION CONTEST (WITHIN
THE MEANING OF RULE 14A-11 OF THE EXCHANGE ACT) WITH RESPECT TO THE ELECTION OR
REMOVAL OF DIRECTORS OR OTHER ACTUAL OR THREATENED SOLICITATION OF PROXIES OR
CONSENTS BY OR ON BEHALF OF A PERSON OTHER THAN THE BOARD OF DIRECTORS.

 

(Q)           “ON ACCOUNT OF DISABILITY” SHALL EXIST WHERE THE EMPLOYEE’S
TERMINATION OF EMPLOYMENT RESULTS FROM THE EMPLOYEE BEING “DISABLED” AS A RESULT
OF A “DISABILITY” IN ACCORDANCE WITH THE POLICIES OF THE EMPLOYER OR AFFILIATE
THAT EMPLOYED THE EMPLOYEE IN EFFECT AT THE TIME OF THE CHANGE IN CONTROL OF THE
EMPLOYER.

 

(R)            “PERSON” MEANS ANY INDIVIDUAL, ENTITY OR GROUP WITHIN THE MEANING
OF SECTION 13(D)(3) OR 14(D)(2) OF THE EXCHANGE ACT.

 

(S)           “QUALIFYING POSITION” SHALL MEAN ANY ONE OF THE FOLLOWING: 
(1) THE CHIEF EXECUTIVE OFFICER OR PRESIDENT OF THE EMPLOYER; (2) THE CHIEF
FINANCIAL OFFICER OF THE EMPLOYER AND ANY OTHER OFFICER OF THE EMPLOYER OR ANY
AFFILIATE WHO IS DESIGNATED BY THE EMPLOYER THROUGH ITS BOARD OF DIRECTORS AS AN
EXECUTIVE OFFICER AND BEING IN A QUALIFYING POSITION; (3) THE VICE PRESIDENTS
CLASSIFIED JOBS OF THE EMPLOYER OR ANY AFFILIATE; (4) DIRECTOR BAND JOBS OF THE
EMPLOYER OR ANY AFFILIATE THAT WERE BANDED IN THE BLUE ZONE BAND AND THE CHIEF
EXECUTIVE OFFICER, PRESIDENT AND CHIEF FINANCIAL OFFICER OF ANY AFFILIATE,
PROVIDED IN EITHER CASE ONLY WITH RESPECT TO AN EMPLOYEE IN A QUALIFYING
POSITION PRIOR TO MAY 8, 2008 AND WHO RECEIVED A PRIOR NOTICE OF ELIGIBILITY TO
PARTICIPATE IN THE PLAN, AND (5) ANY OTHER POSITION OR JOB CLASSIFICATION THAT
THE EMPLOYER HEREAFTER DESIGNATES AS BEING A QUALIFYING POSITION.

 

(T)            “RETIREMENT PLAN” SHALL MEAN ANY QUALIFIED OR SUPPLEMENTAL
EMPLOYEE PENSION BENEFIT PLAN, AS DEFINED IN SECTION 3(2) OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”), CURRENTLY MADE
AVAILABLE BY EMPLOYER OR AN AFFILIATE IN WHICH EMPLOYEE PARTICIPATES.

 

(U)           “SALARY” SHALL MEAN THE EMPLOYEE’S BASE SALARY AT THE GREATER OF
THE RATE IN EFFECT ON (1) THE DATE THE CHANGE IN CONTROL OF THE EMPLOYER OCCURS
OR (2) THE DATE OF THE EMPLOYEE’S TERMINATION OF EMPLOYMENT UNDER CIRCUMSTANCES
DESCRIBED IN SECTION 2(A).

 

(V)           “SPECIFIED EMPLOYEE” MEANS AN EMPLOYEE (AS THAT TERM IS USED IN
CODE SECTION 416) WHO IS (I) AN OFFICER OF THE EMPLOYER HAVING ANNUAL
COMPENSATION GREATER THAN $135,000 (WITH CERTAIN ADJUSTMENTS FOR INFLATION AFTER
2005), (II) A FIVE-PERCENT OWNER OF THE EMPLOYER OR (III) A ONE-PERCENT OWNER OF
THE EMPLOYER HAVING ANNUAL COMPENSATION GREATER THAN $150,000.  FOR PURPOSES OF
THIS SECTION, NO MORE THAN 50 EMPLOYEES (OR, IF LESSER, THE GREATER OF THREE OR
10 PERCENT OF THE EMPLOYEES) SHALL BE TREATED AS OFFICERS.  EMPLOYEES WHO
(I) NORMALLY WORK LESS THAN 17 1/2 HOURS PER WEEK, (II) NORMALLY WORK NOT MORE
THAN 6 MONTHS DURING ANY YEAR, (III) HAVE NOT ATTAINED AGE 21 OR (IV) ARE
INCLUDED IN A UNIT OF EMPLOYEES COVERED BY AN AGREEMENT WHICH THE SECRETARY OF
LABOR FINDS TO BE A COLLECTIVE BARGAINING AGREEMENT BETWEEN EMPLOYEE
REPRESENTATIVES AND THE EMPLOYER (EXCEPT AS OTHERWISE PROVIDED IN REGULATIONS
ISSUED UNDER THE CODE) SHALL BE EXCLUDED FOR PURPOSES OF DETERMINING THE NUMBER
OF OFFICERS.  FOR PURPOSES OF THIS SECTION, THE TERM “FIVE-PERCENT OWNER” 
(“ONE-PERCENT OWNER”) MEANS ANY PERSON WHO OWNS MORE THAN FIVE PERCENT (ONE
PERCENT) OF THE OUTSTANDING STOCK OF THE EMPLOYER OR STOCK POSSESSING MORE THAN
FIVE PERCENT (ONE PERCENT) OF THE TOTAL COMBINED VOTING POWER OF ALL STOCK OF
THE EMPLOYER.  FOR PURPOSES OF DETERMINING OWNERSHIP, THE ATTRIBUTION RULES OF
SECTION 318 OF

 

8

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THE CODE SHALL BE APPLIED BY SUBSTITUTING “FIVE PERCENT” FOR “50 PERCENT” IN
SECTION 318(A)(2) AND THE RULES OF SECTIONS 414(B), 414(C) AND 414(M) OF THE
CODE SHALL NOT APPLY.  FOR PURPOSES OF THIS SECTION, THE TERM “COMPENSATION” HAS
THE MEANING GIVEN SUCH TERM BY SECTION 414(Q)(4) OF THE CODE.  THE DETERMINATION
OF WHETHER THE EMPLOYEE IS A SPECIFIED EMPLOYEE WILL BE BASED ON A DECEMBER 31
IDENTIFICATION DATE SUCH THAT IF THE EMPLOYEE SATISFIES THE ABOVE DEFINITION OF
SPECIFIED EMPLOYEE AT ANY TIME DURING THE 12-MONTH PERIOD ENDING ON DECEMBER 31,
HE WILL BE TREATED AS A SPECIFIED EMPLOYEE IF HE HAS A TERMINATION OF EMPLOYMENT
DURING THE 12-MONTH PERIOD BEGINNING ON THE FIRST DAY OF THE FOURTH MONTH
FOLLOWING THE IDENTIFICATION DATE.  THIS DEFINITION IS INTENDED TO COMPLY WITH
THE SPECIFIED EMPLOYEE RULES OF SECTION 409A(A)(2)(B)(I) OF THE CODE AND SHALL
BE INTERPRETED ACCORDINGLY.

 

(W)          “TERMINATION OF EMPLOYMENT” MEANS THE TERMINATION OF THE EMPLOYEE’S
EMPLOYMENT WITH THE EMPLOYER AND ALL AFFILIATES; PROVIDED, HOWEVER, THAT THE
EMPLOYEE WILL NOT BE CONSIDERED AS HAVING HAD A TERMINATION OF EMPLOYMENT IF
(I) THE EMPLOYEE CONTINUES TO PROVIDE SERVICES TO THE EMPLOYER OR ANY AFFILIATE
(WHETHER AS AN EMPLOYEE OR AS AN INDEPENDENT CONTRACTOR) AT AN ANNUAL RATE THAT
IS MORE THAN 20 PERCENT OF THE LEVEL OF SERVICES RENDERED, ON AVERAGE, DURING
THE IMMEDIATELY PRECEDING 36 MONTHS OF EMPLOYMENT (OR, IF EMPLOYED LESS THAN 36
MONTHS, SUCH LESSER PERIOD) OR (II) THE EMPLOYEE IS ON MILITARY LEAVE, SICK
LEAVE OR OTHER BONA FIDE LEAVE OF ABSENCE (SUCH AS TEMPORARY EMPLOYMENT BY THE
GOVERNMENT) SO LONG AS THE PERIOD OF SUCH LEAVE DOES NOT EXCEED SIX MONTHS, OR
IF LONGER, SO LONG AS THE INDIVIDUAL’S RIGHT TO REEMPLOYMENT WITH THE EMPLOYER
OR ANY AFFILIATE IS PROVIDED EITHER BY STATUTE OR BY CONTRACT.  IF THE PERIOD OF
LEAVE (I) ENDS OR (II) EXCEEDS SIX MONTHS AND THE EMPLOYEE’S RIGHT TO
REEMPLOYMENT IS NOT PROVIDED EITHER BY STATUTE OR BY CONTRACT, THE EMPLOYEE’S
TERMINATION OF EMPLOYMENT WILL BE DEEMED TO OCCUR ON THE FIRST DATE IMMEDIATELY
FOLLOWING SUCH TIME IF NOT REEMPLOYED BY THE EMPLOYER OR ANY AFFILIATE BEFORE
SUCH TIME AND ELIGIBILITY FOR PAYMENTS AND BENEFITS HEREUNDER WILL BE DETERMINED
AS OF THAT TIME.  FOR PURPOSES OF THIS SECTION, TERMINATION OF EMPLOYMENT SHALL
BE CONSTRUED CONSISTENT WITH THE REQUIREMENTS FOR A “SEPARATION FROM SERVICE”
WITHIN THE MEANING OF SECTION 409A OF THE CODE.

 

(X)            “VOTING STOCK” MEANS THE THEN OUTSTANDING SECURITIES OF AN ENTITY
ENTITLED TO VOTE GENERALLY IN THE ELECTION OF MEMBERS OF THAT ENTITY’S BOARD OF
DIRECTORS.

 

(Y)           “WELFARE PLAN” SHALL MEAN ANY HEALTH AND DENTAL PLAN, DISABILITY
PLAN, SURVIVOR INCOME PLAN, LIFE INSURANCE PLAN OR SIMILAR PLAN, AS DEFINED IN
SECTION 3(1) OF ERISA, CURRENTLY MADE AVAILABLE BY THE EMPLOYER OR AN AFFILIATE
IN WHICH AN EMPLOYEE PARTICIPATES.

 

2.                                       Benefits Upon Termination of
Employment.

 

(A)           THE FOLLOWING PROVISIONS WILL APPLY IF AND ONLY IF, AT ANY TIME
WITHIN EIGHTEEN (18) MONTHS AFTER A CHANGE IN CONTROL OF THE EMPLOYER OCCURS,
(I) THE EMPLOYEE HAS A TERMINATION OF EMPLOYMENT BY THE EMPLOYER OR AN AFFILIATE
FOR ANY REASON OTHER THAN CAUSE, ON ACCOUNT OF DISABILITY OR DEATH, OR (II) THE
EMPLOYEE VOLUNTARILY HAS A TERMINATION OF EMPLOYMENT FOR GOOD REASON:

 

(1)           EMPLOYER OR AN AFFILIATE SHALL PAY EMPLOYEE CASH SEVERANCE IN ONE
LUMP SUM PAYMENT, SUBJECT TO ALL APPLICABLE WITHHOLDINGS AND EMPLOYMENT TAXES
AND SUBJECT TO REDUCTIONS PURSUANT TO SECTIONS 4 AND 16 OF THIS PLAN, AS SOON AS
PRACTICAL (AND WITHIN 30 DAYS)

 

9

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AFTER THE EMPLOYEE’S TERMINATION OF EMPLOYMENT, SUBJECT TO ANY REQUIRED DELAYS
UNDER SECTIONS 2(A)(4) OR 4 BELOW.

 

(2)           THE EMPLOYER OR AN AFFILIATE SHALL PAY ANY AND ALL AMOUNTS WITH
RESPECT TO COBRA CONTINUATION COVERAGE THAT THE EMPLOYEE ELECTS UNDER ANY
WELFARE PLAN OF THE EMPLOYER OR AN AFFILIATE FOR HIM OR HER OR HIS OR HER SPOUSE
OR DEPENDENTS THROUGH THE BENEFITS SEVERANCE PERIOD, INCLUDING ALL ATTENDANT
ADMINISTRATIVE FEES AND EXPENSES, HOWEVER DESCRIBED OR DENOMINATED.  ALL SUCH
PAYMENTS SHALL BE MADE, NO LESS FREQUENTLY THAN MONTHLY, IN SUCH MANNER AS TO
PERMIT EMPLOYEE TO CONTINUE HIS OR HER COBRA COVERAGE ON A TIMELY BASIS;
PROVIDED THAT THE COMPANY WILL MAKE ALL SUCH PAYMENTS AS SOON AS
ADMINISTRATIVELY PRACTICABLE, SUBJECT TO ANY REQUIRED DELAYS UNDER SECTIONS
2(A)(4) OR 4 BELOW.

 

(3)           THE EMPLOYEE OR HIS BENEFICIARY, OR ANY OTHER PERSON ENTITLED TO
RECEIVE BENEFITS WITH RESPECT TO THE EMPLOYEE UNDER ANY RETIREMENT PLAN, WELFARE
PLAN, OR OTHER PLAN OR PROGRAM MAINTAINED BY EMPLOYER OR ANY AFFILIATE IN WHICH
EMPLOYEE PARTICIPATES AT THE DATE OF THE EMPLOYEE’S TERMINATION OF EMPLOYMENT,
SHALL RECEIVE ANY AND ALL BENEFITS ACCRUED UNDER ANY SUCH RETIREMENT PLAN,
WELFARE PLAN OR OTHER PLAN OR PROGRAM TO THE DATE OF THE EMPLOYEE’S TERMINATION
OF EMPLOYMENT, THE AMOUNT, FORM AND TIME OF PAYMENT OF SUCH BENEFITS TO BE
DETERMINED BY THE TERMS OF SUCH RETIREMENT PLAN, WELFARE PLAN, OR OTHER PLAN OR
PROGRAM.

 

(4)           NOTWITHSTANDING ANY OTHER PROVISION OF THIS PLAN, HOWEVER, IF THE
EMPLOYEE IS A SPECIFIED EMPLOYEE ON TERMINATION OF EMPLOYMENT AND IF THE
BENEFITS AND PAYMENTS UNDER THIS PLAN ARE NOT OTHERWISE EXEMPT FROM CODE
SECTION 409A, THEN TO THE EXTENT NECESSARY TO COMPLY WITH SECTION 409A NO
PAYMENTS MAY BE MADE HEREUNDER (INCLUDING, IF NECESSARY, ANY COBRA PAYMENTS OR
REIMBURSEMENTS) BEFORE THE DATE WHICH IS SIX MONTHS AFTER THE SPECIFIED
EMPLOYEE’S TERMINATION OF EMPLOYMENT OR, IF EARLIER, THE DATE OF DEATH OF THE
SPECIFIED EMPLOYEE.  IN THE EVENT ANY SUCH PAYMENTS ARE OTHERWISE DUE TO BE MADE
IN INSTALLMENTS OR PERIODICALLY PRIOR TO THE EARLIER OF SIX MONTHS AFTER THE
SPECIFIED EMPLOYEE’S TERMINATION OF EMPLOYMENT OR, IF EARLIER, THE DATE OF DEATH
OF THE SPECIFIED EMPLOYEE, THE PAYMENTS WHICH WOULD OTHERWISE HAVE BEEN MADE
SHALL BE ACCUMULATED AND PAID IN A LUMP SUM AS SOON AS SUCH PERIOD ENDS, AND THE
BALANCE OF THE PAYMENTS SHALL BE MADE AS OTHERWISE SCHEDULED.  IN THE EVENT ANY
BENEFITS ARE REQUIRED TO BE DEFERRED HEREUNDER, ANY SUCH BENEFITS MAY BE
PROVIDED DURING SUCH DEFERRAL PERIOD AT EMPLOYEE’S EXPENSE, WITH EMPLOYEE TO BE
REIMBURSED FROM THE EMPLOYER ONCE THE DEFERRAL PERIOD ENDS, AND THE BALANCE OF
THE BENEFITS SHALL BE PROVIDED AS OTHERWISE SCHEDULED.

 

(B)           IF THE EMPLOYEE HAS A TERMINATION OF EMPLOYMENT BY THE EMPLOYER OR
AN AFFILIATE OR BY THE EMPLOYEE OTHER THAN UNDER THE CIRCUMSTANCES SET FORTH IN
SECTION 2(A), INCLUDING WITHOUT LIMITATION ON THE DEATH OR ON ACCOUNT OF
DISABILITY OF THE EMPLOYEE, BY THE EMPLOYER OR AN AFFILIATE FOR CAUSE OR BY THE
EMPLOYEE OTHER THAN FOR GOOD REASON, THEN THE EMPLOYEE’S COMPENSATION SHALL BE
PAID THROUGH THE DATE OF HIS OR HER TERMINATION OF EMPLOYMENT (NO LESS
FREQUENTLY THAN MONTHLY AND CONSISTENT WITH EMPLOYER’S CUSTOMARY PAYROLL
PRACTICES), AND THE EMPLOYER AND ITS AFFILIATES SHALL HAVE NO FURTHER OBLIGATION
WITH RESPECT TO THE EMPLOYEE UNDER THIS PLAN.  SUCH TERMINATION OF EMPLOYMENT
SHALL HAVE NO EFFECT UPON AN EMPLOYEE’S OTHER RIGHTS, INCLUDING BUT NOT LIMITED
TO RIGHTS UNDER ANY RETIREMENT PLAN, WELFARE PLAN OR OTHER PLAN OR PROGRAM IN
WHICH EMPLOYEE PARTICIPATES, THE AMOUNT, FORM AND TIME OF PAYMENT OF SUCH
BENEFITS TO BE DETERMINED BY THE TERMS OF SUCH RETIREMENT PLAN, WELFARE PLAN, OR
OTHER PLAN OR PROGRAM.

 

10

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(C)           THIS SECTION 2 SHALL HAVE NO EFFECT, AND EMPLOYER SHALL HAVE NO
OBLIGATIONS HEREUNDER WITH RESPECT TO, AN EMPLOYEE WHO HAS A TERMINATION OF
EMPLOYMENT FOR ANY REASON AT ANY TIME OTHER THAN WITHIN EIGHTEEN (18) MONTHS
AFTER A CHANGE IN CONTROL OF THE EMPLOYER OCCURS UNDER THE CIRCUMSTANCES
DESCRIBED IN SECTION 2(A) ABOVE.

 

(D)           THE EMPLOYER OR AFFILIATE THAT EMPLOYS THE EMPLOYEE ON HIS OR HER
TERMINATION OF EMPLOYMENT WILL FUND THE PAYMENTS TO BE MADE UNDER THE PLAN TO
SUCH EMPLOYEE FROM ITS GENERAL ASSETS.

 

(E)           EXHIBIT B ATTACHED HERETO PROVIDES A SUMMARY OF THE BENEFITS TO
WHICH AN EMPLOYEE WILL BE ENTITLED BASED ON THE BENEFIT CATEGORY FOR WHICH SUCH
EMPLOYEE QUALIFIES.  IN THE EVENT OF ANY CONFLICT BETWEEN SUCH SUMMARY AND THE
TERMS OF SECTION 2 OF THE PLAN, THE PROVISIONS OF SECTION 2 OF THE PLAN SHALL
GOVERN.

 

3.                                       Accelerated Vesting of Options and
Restricted Stock Units.

 

(A)           (I)            IN THE EVENT NO PROVISION IS MADE FOR THE
CONTINUANCE, ASSUMPTION OR SUBSTITUTION BY THE EMPLOYER OR ITS SUCCESSOR IN
CONNECTION WITH A CHANGE IN CONTROL OF THE EMPLOYER OF OUTSTANDING STOCK OPTIONS
THE EMPLOYER OR AN AFFILIATE GRANTED BEFORE THE CHANGE IN CONTROL OF THE
EMPLOYER, THEN CONTEMPORANEOUSLY WITH THE CHANGE IN CONTROL OF THE EMPLOYER, ALL
OUTSTANDING STOCK OPTIONS THAT THE EMPLOYER OR ANY AFFILIATE PREVIOUSLY GRANTED
TO AN EMPLOYEE IN EITHER THE GOLD OR SILVER BENEFIT CATEGORY SHALL BE
EXERCISABLE IN FULL, IF NOT THEN ALREADY FULLY EXERCISABLE, IN ACCORDANCE WITH
THE TERMS OF SUCH OPTIONS AND THE APPLICABLE PLANS PURSUANT TO WHICH THEY WERE
GRANTED, NOTWITHSTANDING ANY PROVISIONS IN THE STOCK OPTIONS OR PLANS TO THE
CONTRARY REGARDING THE EXERCISABILITY OF SUCH OPTIONS.  IF PROVISION IS MADE FOR
THE CONTINUANCE, ASSUMPTION OR SUBSTITUTION BY THE EMPLOYER OR ITS SUCCESSOR IN
CONNECTION WITH THE CHANGE IN CONTROL OF THE EMPLOYER OF OUTSTANDING STOCK
OPTIONS THE EMPLOYER OR AN AFFILIATE GRANTED BEFORE THE CHANGE IN CONTROL OF THE
EMPLOYER, THEN ON THE EMPLOYEE’S TERMINATION OF EMPLOYMENT ON OR AFTER A CHANGE
IN CONTROL OF THE EMPLOYER OCCURS, ALL OUTSTANDING STOCK OPTIONS THAT THE
EMPLOYER OR ANY AFFILIATE PREVIOUSLY GRANTED TO AN EMPLOYEE IN EITHER THE GOLD
OR SILVER BENEFIT CATEGORY SHALL BE EXERCISABLE IN FULL, IF NOT THEN ALREADY
FULLY EXERCISABLE, IN ACCORDANCE WITH THE TERMS OF SUCH OPTIONS AND THE
APPLICABLE PLANS PURSUANT TO WHICH THEY WERE GRANTED, NOTWITHSTANDING ANY
PROVISIONS IN THE STOCK OPTIONS OR PLANS TO THE CONTRARY REGARDING THE
EXERCISABILITY OF SUCH STOCK OPTIONS.

 

(II)           IN THE EVENT NO PROVISION IS MADE FOR THE CONTINUANCE, ASSUMPTION
OR SUBSTITUTION BY THE EMPLOYER OR ITS SUCCESSOR IN CONNECTION WITH A CHANGE IN
CONTROL OF THE EMPLOYER OF OUTSTANDING STOCK OPTIONS THE EMPLOYER OR AN
AFFILIATE GRANTED BEFORE THE CHANGE IN CONTROL OF THE EMPLOYER, THEN
CONTEMPORANEOUSLY WITH THE CHANGE IN CONTROL OF THE EMPLOYER, ALL OUTSTANDING
STOCK OPTIONS THAT THE EMPLOYER OR ANY AFFILIATE PREVIOUSLY GRANTED TO AN
EMPLOYEE IN THE BRONZE BENEFIT CATEGORY SHALL BE EXERCISABLE, IN ACCORDANCE WITH
THE TERMS OF SUCH OPTIONS AND THE APPLICABLE PLANS PURSUANT TO WHICH THEY WERE
GRANTED, NOTWITHSTANDING ANY PROVISIONS IN THE STOCK OPTIONS OR PLANS TO THE
CONTRARY REGARDING THE EXERCISABILITY (AND ONLY EXERCISABILITY) OF SUCH OPTIONS,
ON AT LEAST THE BASIS THEY WOULD HAVE BEEN EXERCISABLE HAD EMPLOYEE REMAINED
EMPLOYED WITH THE EMPLOYER OR ANY AFFILIATE FOR TWENTY-FOUR (24) MONTHS AFTER
THE CHANGE IN CONTROL OF THE EMPLOYER OCCURS, IF NOT THEN ALREADY EXERCISABLE TO
SUCH EXTENT.  IF PROVISION IS MADE FOR THE CONTINUANCE, ASSUMPTION OR
SUBSTITUTION BY THE EMPLOYER OR

 

11

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ITS SUCCESSOR IN CONNECTION WITH THE CHANGE IN CONTROL OF THE EMPLOYER OF
OUTSTANDING STOCK OPTIONS THE EMPLOYER OR AN AFFILIATE GRANTED BEFORE THE CHANGE
IN CONTROL OF THE EMPLOYER, THEN ON THE EMPLOYEE’S TERMINATION OF EMPLOYMENT ON
OR AFTER A CHANGE IN CONTROL OCCURS, ALL OUTSTANDING STOCK OPTIONS THAT THE
EMPLOYER OR ANY AFFILIATE PREVIOUSLY GRANTED TO AN EMPLOYEE IN THE BRONZE
BENEFIT CATEGORY SHALL BE EXERCISABLE, IN ACCORDANCE WITH THE TERMS OF SUCH
OPTIONS AND THE APPLICABLE PLANS PURSUANT TO WHICH THEY WERE GRANTED,
NOTWITHSTANDING ANY PROVISIONS IN THE STOCK OPTIONS OR PLANS TO THE CONTRARY
REGARDING THE EXERCISABILITY (AND ONLY EXERCISABILITY) OF SUCH STOCK OPTIONS, ON
AT LEAST THE BASIS THEY WOULD HAVE BEEN EXERCISABLE HAD EMPLOYEE REMAINED
EMPLOYED WITH THE EMPLOYER OR AN AFFILIATE FOR TWENTY-FOUR (24) MONTHS AFTER THE
CHANGE IN CONTROL OF THE EMPLOYER OCCURS, IF NOT THEN ALREADY EXERCISABLE TO
SUCH EXTENT.

 

(III)          IT IS DEEMED UNDER THIS PLAN THAT THE EMPLOYER OR AN AFFILIATE
CONSISTENT WITH THE PLANS AND AGREEMENTS GOVERNING THE APPLICABLE STOCK OPTIONS
ACCELERATED THE EXERCISABILITY OF SUCH OUTSTANDING STOCK OPTIONS AT SUCH TIME
AND ON SUCH BASIS.  NOTWITHSTANDING ANY OTHER PROVISION OF THIS PLAN, THIS
SECTION 3 ONLY IMPACTS THE EXERCISABILITY AND VESTING OF THE APPLICABLE STOCK
OPTION; IT IS NOT INTENDED TO NOR DOES IT EXTEND THE TERMS OR EXPIRATION DATES
OF THE APPLICABLE STOCK OPTIONS.

 

(IV)          NOTWITHSTANDING ANY OF THE FOREGOING, FOR PURPOSES OF THIS
SECTION 3 ONLY, AN EMPLOYEE IN THE BRONZE BENEFIT CATEGORY WHO PREVIOUSLY
PARTICIPATED IN THE EARTHLINK, INC. ACCELERATED VESTING AND COMPENSATION
CONTINUATION PLAN AND WHO ELECTED TO PARTICIPATE IN THIS PLAN AND WAIVE ANY AND
ALL RIGHTS TO BENEFITS HE OR SHE HAD UNDER THE EARTHLINK, INC. ACCELERATED
VESTING AND COMPENSATION CONTINUATION PLAN SHALL BE TREATED FOR PURPOSES OF THIS
SECTION 3 AS IF HE OR SHE WERE IN THE SILVER BENEFIT CATEGORY SOLELY FOR
PURPOSES OF THE ACCELERATED VESTING OF STOCK OPTIONS.  EXHIBIT C ATTACHED HERETO
SHALL SHOW THE NAMES OF EACH EMPLOYEE WHO IS INCLUDED IN THE FOREGOING POSITION
AND WHO IS ENTITLED TO THE TREATMENT DESCRIBED IN THIS SECTION 3(A)(IV) IF THEY
BECOME AN EMPLOYEE UNDER THIS PLAN.

 

(V)           EXHIBIT B ATTACHED HERETO PROVIDES A SUMMARY OF THE ACCELERATED
VESTING TO WHICH AN EMPLOYEE WILL BE ENTITLED BASED ON THE BENEFIT CATEGORY FOR
WHICH SUCH EMPLOYEE QUALIFIES.  IN THE EVENT OF ANY CONFLICT BETWEEN SUCH
SUMMARY AND THE TERMS OF SECTION 3 OF THE PLAN, THE PROVISIONS OF SECTION 3 OF
THE PLAN SHALL GOVERN.

 

(B)           (I)            IN THE EVENT NO PROVISION IS MADE FOR THE
CONTINUANCE, ASSUMPTION OR SUBSTITUTION BY THE EMPLOYER OR ITS SUCCESSOR IN
CONNECTION WITH A CHANGE IN CONTROL OF THE EMPLOYER OF OUTSTANDING RESTRICTED
STOCK UNITS THE EMPLOYER OR AN AFFILIATE GRANTED BEFORE THE CHANGE IN CONTROL OF
THE EMPLOYER, THEN CONTEMPORANEOUSLY WITH THE CHANGE IN CONTROL OF THE EMPLOYER,
ALL OUTSTANDING RESTRICTED STOCK UNITS THAT THE EMPLOYER OR ANY AFFILIATE
PREVIOUSLY GRANTED TO AN EMPLOYEE IN EITHER THE GOLD OR SILVER BENEFIT CATEGORY
SHALL BE EARNED AND PAYABLE IN FULL, IF NOT THEN ALREADY FULLY EARNED AND
PAYABLE, IN ACCORDANCE WITH THE TERMS OF SUCH RESTRICTED STOCK UNITS AND THE
APPLICABLE PLANS PURSUANT TO WHICH THEY WERE GRANTED, NOTWITHSTANDING ANY
PROVISIONS IN THE RESTRICTED STOCK UNITS OR PLANS TO THE CONTRARY REGARDING
THEIR BECOMING FULLY EARNED AND PAYABLE; PROVIDED THAT A RESTRICTED STOCK UNIT
THAT CONTAINS PERFORMANCE CRITERIA SHALL NOT BECOME FULLY EARNED AND PAYABLE IF
THE DATE, IF ANY, FOR ATTAINMENT OF THE PERFORMANCE CRITERIA ON WHICH SUCH
RESTRICTED STOCK UNIT WOULD HAVE BECOME FULLY EARNED AND PAYABLE HAS PASSED AS
OF THE DATE OF THE CHANGE OF CONTROL.  IF PROVISION IS MADE FOR THE CONTINUANCE,
ASSUMPTION OR SUBSTITUTION BY THE EMPLOYER OR ITS SUCCESSOR IN CONNECTION WITH
THE CHANGE IN CONTROL OF THE EMPLOYER OF OUTSTANDING RESTRICTED STOCK UNITS THE
EMPLOYER OR AN

 

12

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AFFILIATE GRANTED BEFORE THE CHANGE IN CONTROL OF THE EMPLOYER, THEN ON THE
EMPLOYEE’S TERMINATION OF EMPLOYMENT ON OR AFTER A CHANGE IN CONTROL OF THE
EMPLOYER OCCURS, ALL OUTSTANDING RESTRICTED STOCK UNITS THAT THE EMPLOYER OR ANY
AFFILIATE PREVIOUSLY GRANTED TO AN EMPLOYEE IN EITHER THE GOLD OR SILVER BENEFIT
CATEGORY SHALL BE EARNED AND PAYABLE IN FULL, IF NOT THEN ALREADY FULLY EARNED
AND PAYABLE, IN ACCORDANCE WITH THE TERMS OF SUCH RESTRICTED STOCK UNITS AND THE
APPLICABLE PLANS PURSUANT TO WHICH THEY WERE GRANTED, NOTWITHSTANDING ANY
PROVISIONS IN THE RESTRICTED STOCK UNITS OR PLANS TO THE CONTRARY REGARDING
THEIR BECOMING FULLY EARNED AND PAYABLE; PROVIDED THAT A RESTRICTED STOCK UNIT
THAT CONTAINS PERFORMANCE CRITERIA SHALL NOT BECOME FULLY EARNED AND PAYABLE IF
THE DATE, IF ANY, FOR ATTAINMENT OF THE PERFORMANCE CRITERIA ON WHICH SUCH
RESTRICTED STOCK UNIT WOULD HAVE BECOME FULLY EARNED AND PAYABLE HAS PASSED AS
OF THE DATE OF THE CHANGE OF CONTROL.

 

(II)           IN THE EVENT NO PROVISION IS MADE FOR THE CONTINUANCE, ASSUMPTION
OR SUBSTITUTION BY THE EMPLOYER OR ITS SUCCESSOR IN CONNECTION WITH A CHANGE IN
CONTROL OF THE EMPLOYER OF OUTSTANDING RESTRICTED STOCK UNITS THE EMPLOYER OR AN
AFFILIATE GRANTED BEFORE THE CHANGE IN CONTROL OF THE EMPLOYER, THEN
CONTEMPORANEOUSLY WITH THE CHANGE IN CONTROL OF THE EMPLOYER, ALL OUTSTANDING
RESTRICTED STOCK UNITS THAT THE EMPLOYER OR ANY AFFILIATE PREVIOUSLY GRANTED TO
AN EMPLOYEE IN THE BRONZE BENEFIT CATEGORY SHALL BE EARNED AND PAYABLE, IN
ACCORDANCE WITH THE TERMS OF SUCH RESTRICTED STOCK UNITS AND THE APPLICABLE
PLANS PURSUANT TO WHICH THEY WERE GRANTED, NOTWITHSTANDING ANY PROVISIONS IN THE
RESTRICTED STOCK UNITS OR PLANS TO THE CONTRARY REGARDING THEIR BECOMING FULLY
EARNED AND PAYABLE ON AT LEAST THE BASIS THEY WOULD HAVE BEEN EARNED AND PAYABLE
HAD EMPLOYEE REMAINED EMPLOYED WITH THE EMPLOYER OR ANY AFFILIATE FOR
TWENTY-FOUR (24) MONTHS AFTER THE CHANGE IN CONTROL OF THE EMPLOYER OCCURS, IF
NOT THEN ALREADY EARNED AND PAYABLE TO SUCH EXTENT; PROVIDED THAT A RESTRICTED
STOCK UNIT THAT CONTAINS PERFORMANCE CRITERIA SHALL NOT BECOME FULLY EARNED AND
PAYABLE IF THE DATE, IF ANY, FOR ATTAINMENT OF THE PERFORMANCE CRITERIA ON WHICH
SUCH RESTRICTED STOCK UNIT WOULD HAVE BECOME FULLY EARNED AND PAYABLE HAS PASSED
AS OF THE DATE OF THE CHANGE OF CONTROL OR OCCURS MORE THAN TWENTY-FOUR (24)
MONTHS AFTER THE DATE OF THE CHANGE IN CONTROL.  IF PROVISION IS MADE FOR THE
CONTINUANCE, ASSUMPTION OR SUBSTITUTION BY THE EMPLOYER OR ITS SUCCESSOR IN
CONNECTION WITH THE CHANGE IN CONTROL OF THE EMPLOYER OF OUTSTANDING RESTRICTED
STOCK UNITS THE EMPLOYER OR AN AFFILIATE GRANTED BEFORE THE CHANGE IN CONTROL OF
THE EMPLOYER, THEN ON THE EMPLOYEE’S TERMINATION OF EMPLOYMENT ON OR AFTER A
CHANGE IN CONTROL OCCURS, ALL OUTSTANDING RESTRICTED STOCK UNITS THAT THE
EMPLOYER OR ANY AFFILIATE PREVIOUSLY GRANTED TO AN EMPLOYEE IN THE BRONZE
BENEFIT CATEGORY SHALL BE EARNED AND PAYABLE, IN ACCORDANCE WITH THE TERMS OF
SUCH RESTRICTED STOCK UNITS AND THE APPLICABLE PLANS PURSUANT TO WHICH THEY WERE
GRANTED, NOTWITHSTANDING ANY PROVISIONS IN THE RESTRICTED STOCK UNITS OR PLANS
TO THE CONTRARY REGARDING THEIR BECOMING EARNED AND PAYABLE, ON AT LEAST THE
BASIS THEY WOULD HAVE BEEN EARNED AND PAYABLE HAD EMPLOYEE REMAINED EMPLOYED
WITH THE EMPLOYER OR AN AFFILIATE FOR TWENTY-FOUR (24) MONTHS AFTER THE CHANGE
IN CONTROL OF THE EMPLOYER OCCURS, IF NOT THEN ALREADY EARNED AND PAYABLE TO
SUCH EXTENT; PROVIDED THAT A RESTRICTED STOCK UNIT THAT CONTAINS PERFORMANCE
CRITERIA SHALL NOT BECOME FULLY EARNED AND PAYABLE IF THE DATE, IF ANY, FOR
ATTAINMENT OF THE PERFORMANCE CRITERIA ON WHICH SUCH RESTRICTED STOCK UNIT WOULD
HAVE BECOME FULLY EARNED AND PAYABLE HAS PASSED AS OF THE DATE OF THE CHANGE OF
CONTROL OR OCCURS MORE THAN TWENTY-FOUR (24) MONTHS AFTER THE DATE OF THE CHANGE
IN CONTROL.

 

(III)          IT IS DEEMED UNDER THIS PLAN THAT THE EMPLOYER OR AN AFFILIATE
CONSISTENT WITH THE PLANS AND AGREEMENTS GOVERNING THE APPLICABLE RESTRICTED
STOCK UNITS ACCELERATED SUCH RESTRICTED STOCK UNITS BECOMING EARNED AND PAYABLE
AT SUCH TIME AND ON SUCH BASIS.  NOTWITHSTANDING ANY OTHER PROVISION OF THIS
PLAN, THIS SECTION 3 ONLY IMPACTS THE VESTING OF THE

 

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APPLICABLE RESTRICTED STOCK UNITS; IT IS NOT INTENDED TO NOR DOES IT EXTEND THE
TERMS OR EXPIRATION DATES OF THE APPLICABLE RESTRICTED STOCK UNITS.

 

(IV)          NOTWITHSTANDING ANY OF THE FOREGOING, FOR PURPOSES OF THIS
SECTION 3 ONLY, AN EMPLOYEE IN THE BRONZE BENEFIT CATEGORY WHO PREVIOUSLY
PARTICIPATED IN THE EARTHLINK, INC. ACCELERATED VESTING AND COMPENSATION
CONTINUATION PLAN AND WHO ELECTED TO PARTICIPATE IN THIS PLAN AND WAIVE ANY AND
ALL RIGHTS TO BENEFITS HE OR SHE HAD UNDER THE EARTHLINK, INC. ACCELERATED
VESTING AND COMPENSATION CONTINUATION PLAN SHALL BE TREATED FOR PURPOSES OF THIS
SECTION 3 AS IF HE OR SHE WERE IN THE SILVER BENEFIT CATEGORY SOLELY FOR
PURPOSES OF THE ACCELERATED VESTING OF RESTRICTED STOCK UNITS.  EXHIBIT C
ATTACHED HERETO SHALL SHOW THE NAMES OF EACH EMPLOYEE WHO IS INCLUDED IN THE
FOREGOING POSITION AND WHO IS ENTITLED TO THE TREATMENT DESCRIBED IN THIS
SECTION 3(B)(IV) IF THEY BECOME AN EMPLOYEE UNDER THIS PLAN.

 

(V)           EXHIBIT B ATTACHED HERETO PROVIDES A SUMMARY OF THE ACCELERATED
VESTING TO WHICH AN EMPLOYEE WILL BE ENTITLED BASED ON THE BENEFIT CATEGORY FOR
WHICH SUCH EMPLOYEE QUALIFIES.  IN THE EVENT OF ANY CONFLICT BETWEEN SUCH
SUMMARY AND THE TERMS OF SECTION 3 OF THE PLAN, THE PROVISIONS OF SECTION 3 OF
THE PLAN SHALL GOVERN.

 

(C)           NOTWITHSTANDING SUBSECTIONS (A) AND (B) ABOVE, ACCELERATED VESTING
OF OUTSTANDING STOCK OPTIONS AND RESTRICTED STOCK UNITS ONLY APPLIES WITH
RESPECT TO THE EMPLOYEE IN CONNECTION WITH (I) A CHANGE IN CONTROL OF EMPLOYER
IF EMPLOYEE HAS REMAINED EMPLOYED WITH THE EMPLOYER OR AN AFFILIATE UNTIL THE
CHANGE IN CONTROL OR (II) EMPLOYEE’S TERMINATION OF EMPLOYMENT ON OR AFTER A
CHANGE IN CONTROL IF, AT ANY TIME WITHIN EIGHTEEN (18) MONTHS AFTER A CHANGE IN
CONTROL OF THE EMPLOYER OCCURS, (A) THE EMPLOYEE HAS A TERMINATION OF EMPLOYMENT
BY THE EMPLOYER OR ANY AFFILIATE FOR ANY REASON OTHER THAN CAUSE, ON ACCOUNT OF
DISABILITY OR DEATH, OR (B) THE EMPLOYEE VOLUNTARILY HAS A TERMINATION OF
EMPLOYMENT FOR GOOD REASON.

 

4.                                       Release and Setoff.

 

Notwithstanding any other provision of this Plan, payments shall be made under
the Plan to any Employee or his Beneficiary only after the Employee executes a
release and waiver containing such terms and conditions as the Employer and its
Affiliates may reasonably require, including non-solicitation, non-competition
and confidentiality provisions on or within 21 days, (45 days in the event of a
group termination) after the Employee’s Termination of Employment, but not prior
to such Termination of Employment.  Each Employee’s right to participate under
this Plan and to receive benefits hereunder (including the benefits described in
Section 3 of the Plan) is contingent upon the Employee’s agreement to this
Section 4 and his or her continued compliance with any agreements entered into
hereunder.  The Employer and its Affiliates also may reduce and set-off any
payments to or with respect to an Employee pursuant to this Plan by any amount
the Employee or his Beneficiary may owe to Employer or any Affiliate. 
Notwithstanding any other provision of this Plan, no payments shall be made or
benefits provided pursuant to this Plan during the first 30 days (60 days in the
event of a group termination) after the Employee’s Termination of Employment and
any payments or benefits that are to be provided in that period shall be
accumulated and paid (or provided or reimbursed) in a lump sum as soon as such
period ends.

 

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5.                                       Death.

 

If an Employee has a Termination of Employment under circumstances described in
Section 2(a), then upon the Employee’s subsequent death, all unpaid amounts
payable to the Employee under Section 2(a)(1) or (2) shall be paid to his
Beneficiary.  Any death benefits owing under Section 2(a)(3) shall be paid as
specified by the applicable Retirement Plan, Welfare Plan or other plan or
program.

 

6.                                       Claim for Benefits.

 

(A)           EMPLOYEES DO NOT NEED TO COMPLETE A CLAIM FOR BENEFITS TO OBTAIN
BENEFITS UNDER THE PLAN.  HOWEVER, EMPLOYEES WHO DISPUTE THE AMOUNT OF, OR THEIR
ENTITLEMENT TO, PLAN BENEFITS MUST FILE A CLAIM WITH THE EMPLOYER TO OBTAIN PLAN
BENEFITS.  ANY CLAIM BY AN EMPLOYEE WHO DISPUTES THE AMOUNT OF, OR HIS OR HER
ENTITLEMENT TO, PLAN BENEFITS MUST BE FILED IN WRITING WITHIN NINETY (90) DAYS
OF THE EVENT THAT THE EMPLOYEE IS ASSERTING CONSTITUTES AN ENTITLEMENT TO SUCH
PLAN BENEFITS.  FAILURE BY THE EMPLOYEE TO SUBMIT SUCH CLAIM WITHIN THE NINETY
(90)-DAY PERIOD SHALL BAR THE EMPLOYEE FROM ANY CLAIM FOR BENEFITS UNDER THE
PLAN AS A RESULT OF THE OCCURRENCE OF SUCH EVENT.

 

(B)           CLAIMS FOR BENEFITS SHALL BE FILED IN WRITING WITH THE EMPLOYER. 
WRITTEN NOTICE OF THE DECISION ON SUCH CLAIM SHALL BE FURNISHED TO THE CLAIMANT
WITHIN NINETY (90) DAYS OF RECEIPT OF SUCH CLAIM UNLESS SPECIAL CIRCUMSTANCES
REQUIRE AN EXTENSION OF TIME FOR PROCESSING THE CLAIM.  IF THE EMPLOYER NEEDS AN
EXTENSION OF TIME TO PROCESS A CLAIM, WRITTEN NOTICE WILL BE DELIVERED TO THE
CLAIMANT BEFORE THE END OF THE INITIAL NINETY (90) DAY PERIOD.  THE NOTICE OF
EXTENSION WILL INCLUDE A STATEMENT OF THE SPECIAL CIRCUMSTANCES REQUIRING AN
EXTENSION OF TIME AND THE DATE BY WHICH THE EMPLOYER EXPECTS TO RENDER ITS FINAL
DECISION.  HOWEVER, THAT EXTENSION MAY NOT EXCEED NINETY (90) DAYS AFTER THE END
OF THE INITIAL PERIOD.  IF THE EMPLOYER REJECTS A CLAIM FOR FAILURE TO FURNISH
NECESSARY MATERIAL OR INFORMATION, THE WRITTEN NOTICE TO THE CLAIMANT WILL
EXPLAIN WHAT MORE IS NEEDED AND WHY, AND WILL TELL THE CLAIMANT THAT THE
CLAIMANT MAY REFILE A PROPER CLAIM.

 

(C)           THE EMPLOYER SHALL PROVIDE PAYMENT FOR THE CLAIM ONLY IF THE
EMPLOYER DETERMINES, IN ITS SOLE DISCRETION, THAT THE CLAIMANT IS ENTITLED TO
THE CLAIMED BENEFIT.

 

(D)           IF ANY PART OF A CLAIM FOR BENEFITS UNDER THIS PLAN IS DENIED, THE
EMPLOYER WILL PROVIDE THE CLAIMANT WITH A WRITTEN NOTICE STATING (I) THE
SPECIFIC REASON OR REASONS FOR THE DENIAL; (II) THE SPECIFIC REFERENCE TO
PERTINENT PLAN PROVISIONS ON WHICH THE DENIAL WAS BASED; (III) A DESCRIPTION OF
ANY ADDITIONAL MATERIAL OR INFORMATION NECESSARY FOR THE CLAIMANT TO PERFECT THE
CLAIM AND AN EXPLANATION OF WHY SUCH MATERIAL OR INFORMATION IS NECESSARY; AND
(IV) APPROPRIATE INFORMATION AS TO THE STEPS TO BE TAKEN IF THE CLAIMANT WISHES
TO SUBMIT A CLAIM FOR REVIEW, INCLUDING A STATEMENT OF THE CLAIMANT’S RIGHT TO
BRING A CIVIL ACTION UNDER SECTION 502(A) OF ERISA FOLLOWING AN ADVERSE BENEFIT
DETERMINATION ON REVIEW.

 

(E)           THE FULL VALUE OF ANY PAYMENT MADE ACCORDING TO THE PLAN SATISFIES
THAT MUCH OF THE CLAIM AND ALL RELATED CLAIMS UNDER THE PLAN.

 

(F)            IF A CLAIM IS DENIED, THE CLAIMANT MAY APPEAL THE DENIAL BY
DELIVERING A WRITTEN NOTICE TO THE EMPLOYER SPECIFYING THE REASONS FOR THE
APPEAL.  THAT NOTICE MUST BE DELIVERED

 

15

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WITHIN SIXTY (60) DAYS AFTER RECEIVING THE NOTICE OF DENIAL.  THE CLAIMANT MAY
SUBMIT WRITTEN COMMENTS, DOCUMENTS, RECORDS AND OTHER INFORMATION RELATING TO
THE CLAIMANT’S CLAIM FOR BENEFITS.  THE CLAIMANT WILL BE PROVIDED, UPON REQUEST
AND FREE OF CHARGE, REASONABLE ACCESS TO, AND COPIES OF, ALL DOCUMENTS, RECORDS
AND OTHER INFORMATION RELEVANT TO THE CLAIMANT’S CLAIM FOR BENEFITS.  THE
EMPLOYER’S REVIEW WILL TAKE INTO ACCOUNT ALL SUCH WRITTEN COMMENTS, DOCUMENTS,
RECORDS AND OTHER INFORMATION THE CLAIMANT SUBMITS RELATING TO THE CLAIM,
WITHOUT REGARD TO WHETHER SUCH INFORMATION WAS SUBMITTED OR CONSIDERED
INITIALLY.

 

(G)           THE EMPLOYER WILL ADVISE THE CLAIMANT IN WRITING OF THE FINAL
DETERMINATION AFTER REVIEW.  THE DECISION ON REVIEW WILL BE WRITTEN IN A MANNER
CALCULATED TO BE UNDERSTOOD BY THE CLAIMANT, AND IT WILL INCLUDE SPECIFIC
REASONS FOR THE DECISION AND SPECIFIC REFERENCES TO THE PERTINENT PROVISIONS OF
THE PLAN OR RELATED DOCUMENTS ON WHICH THE DECISION IS BASED.  SUCH WRITTEN
NOTIFICATION ALSO WILL INCLUDE A STATEMENT THAT THE CLAIMANT IS ENTITLED TO
RECEIVE, UPON REQUEST AND FREE OF CHARGE, REASONABLE ACCESS TO, AND COPIES OF,
ALL DOCUMENTS, RECORDS AND OTHER INFORMATION RELEVANT TO THE CLAIMANT’S CLAIM
FOR BENEFITS, THE CLAIMANT’S RIGHT TO OBTAIN THE INFORMATION ABOUT SUCH
PROCEDURES AND A STATEMENT OF THE CLAIMANT’S RIGHT TO BRING A CIVIL ACTION UNDER
SECTION 502(A) OF ERISA FOLLOWING A DENIAL ON REVIEW.  THE WRITTEN DECISION WILL
BE RENDERED WITHIN SIXTY (60) DAYS AFTER THE REQUEST FOR REVIEW IS RECEIVED,
UNLESS SPECIAL CIRCUMSTANCES REQUIRE AN EXTENSION OF TIME FOR PROCESSING.  IF AN
EXTENSION IS NECESSARY THE EMPLOYER WILL FURNISH WRITTEN NOTICE OF THE EXTENSION
TO THE CLAIMANT BEFORE THE END OF THE 60-DAY PERIOD AND INDICATE THE SPECIAL
CIRCUMSTANCES REQUIRING THE EXTENSION OF TIME.  THE EXTENSION NOTICE WILL
INDICATE THE DATE BY WHICH THE EMPLOYER EXPECTS TO RENDER A DECISION.  THE
DECISION WILL THEN BE RENDERED AS SOON AS POSSIBLE, BUT NO LATER THAN ONE
HUNDRED TWENTY (120) DAYS AFTER RECEIPT OF THE REQUEST FOR REVIEW.

 

(H)           IF THE EMPLOYER HOLDS REGULARLY SCHEDULED MEETINGS AT LEAST
QUARTERLY, THE TIME PERIODS FOR RENDERING THE WRITTEN DECISION DESCRIBED IN THE
PRECEDING PARAGRAPH SHALL NOT APPLY AND THE EMPLOYER SHALL INSTEAD MAKE A
BENEFIT DETERMINATION NO LATER THAN THE DATE OF THE MEETING OF THE EMPLOYER THAT
IMMEDIATELY FOLLOWS THE PLAN’S RECEIPT OF A REQUEST FOR REVIEW, UNLESS THE
REQUEST FOR REVIEW IS FILED WITHIN 30 DAYS PRECEDING THE DATE OF SUCH MEETING. 
IN SUCH CASE, A BENEFIT DETERMINATION MAY BE MADE BY NO LATER THAN THE DATE OF
THE SECOND MEETING FOLLOWING THE PLAN’S RECEIPT OF THE REQUEST FOR REVIEW.  IF
SPECIAL CIRCUMSTANCES REQUIRE A FURTHER EXTENSION OF TIME FOR PROCESSING, A
BENEFIT DETERMINATION WILL BE RENDERED NO LATER THAN THE THIRD MEETING OF THE
EMPLOYER FOLLOWING THE PLAN’S RECEIPT OF THE REQUEST FOR REVIEW.  IF SUCH AN
EXTENSION OF TIME FOR REVIEW IS REQUIRED BECAUSE OF SPECIAL CIRCUMSTANCES, THE
EMPLOYER WILL PROVIDE THE CLAIMANT WITH WRITTEN NOTICE OF THE EXTENSION,
DESCRIBING THE SPECIAL CIRCUMSTANCES AND THE DATE AS OF WHICH THE BENEFIT
DETERMINATION WILL BE MADE, PRIOR TO THE COMMENCEMENT OF THE EXTENSION.  THE
EMPLOYER WILL NOTIFY THE CLAIMANT OF THE BENEFIT DETERMINATION AS SOON AS
POSSIBLE, BUT NOT LATER THAN FIVE DAYS AFTER THE BENEFIT DETERMINATION IS MADE.

 

(I)            IN NO EVENT SHALL AN EMPLOYEE OR OTHER CLAIMANT BE ENTITLED TO
CHALLENGE A DECISION OF THE EMPLOYER IN COURT OR IN ANY OTHER ADMINISTRATIVE
PROCEEDING UNLESS AND UNTIL THESE CLAIM REVIEW AND APPEAL PROCEDURES HAVE BEEN
COMPLIED WITH AND EXHAUSTED.  THE CLAIMANT SHALL HAVE NINETY (90) DAYS FROM THE
DATE OF RECEIPT OF THE EMPLOYER’S DECISION ON REVIEW IN WHICH TO FILE SUIT
REGARDING A CLAIM FOR BENEFITS UNDER THE PLAN.  IF SUIT IS NOT FILED WITHIN SUCH
90-DAY PERIOD, IT SHALL BE FOREVER BARRED.  THE DECISIONS MADE HEREUNDER SHALL
BE FINAL AND BINDING ON EMPLOYEES AND ANY OTHER PARTY.

 

16

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7.                                       Administration of the Plan.

 

The Employer through its Board of Directors shall interpret and administer the
Plan.  The Employer shall establish rules for the administration of the Plan. 
The Employer shall have the discretionary authority to construe the terms of the
Plan and shall determine all questions arising in its administration,
interpretation and application, including those concerning eligibility for
benefits.  All determinations of the Employer shall be final and binding on all
Employees and Beneficiaries.  The Employer may appoint a committee or an agent
or other representative to act on its behalf and may delegate to such committee
or agent or representative any of its powers hereunder.  Any action that such
committee or agent or representative takes shall be considered to be the action
of the Employer, when the committee or agent or representative is acting within
the scope of the authority that the Employer delegated to it, and the Employer
shall be responsible for all such actions.  If the Employer appoints a committee
or other agent or representative to act on its behalf, the Employer will pay all
the expenses relating to such administration, and, as permitted by law, the
Employer will indemnify and save each committee member or agent or
representative harmless against expenses, claims, and liabilities arising out of
being such committee member or agent or representative within the time, if any,
required by Section 409A of the Code.  The Employer also may employ such
accountants, counsel, specialists and other advisory clerical persons as it
deems necessary or desirable in connection with administration of the Plan.  The
Employer is entitled to rely conclusively on any opinions from its accountants
or counsel.  The Employer will keep all books of account, records and other data
necessary for proper administration of the Plan.

 

8.                                       Employee Assignment.

 

No interest of any Employee, his or her spouse or any Beneficiary under this
Plan, or any right to receive any payment or distribution hereunder, shall be
subject in any manner to sale, transfer, assignment, pledge, attachment,
garnishment, or other alienation or encumbrance of any kind, nor may such
interest or right to receive a payment or distribution be taken, voluntarily or
involuntarily, for the satisfaction of the obligations or debts of, or other
claims against, the Employee or his or her spouse or Beneficiary, including
claims for alimony, support, separate maintenance, and claims in bankruptcy
proceedings.

 

9.                                       Benefits Unfunded.

 

All rights under this Plan of the Employees and their spouses and Beneficiaries,
shall at all times be entirely unfunded, and no provision shall at any time be
made with respect to segregating any assets of Employer or any Affiliate for
payment of any amounts due hereunder.  The Employees, their spouses and
Beneficiaries shall have only the rights, if any, of general unsecured creditors
of Employer and its Affiliates.

 

10.                                 Applicable Law.

 

This Plan shall be construed and interpreted pursuant to the laws of the State
of Delaware (other than its choice-of-law rules), except to the extent those
laws are superceded by the laws of the United States of America.

 

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11.                                 No Employment Contract.

 

Nothing contained in this Plan shall be construed to be an employment contract
between an Employee and the Employer or an Affiliate.  The creation, continuance
or change of this Plan or any payment hereunder does not give any person a
non-statutory legal or equitable right against the Employer or an Affiliate to
remain employed by the Employer or an Affiliate.  This Plan does not modify the
terms of any Employee’s employment.

 

12.                                 Severability.

 

In the event any provision of this Plan is held illegal or invalid, the
remaining provisions of this Plan shall not be affected thereby.

 

13.                                 Successors.

 

The Plan shall be binding upon and inure to the benefit of the Employer, its
Affiliates, the Employees and their respective heirs, representatives and
successors.

 

14.                                 Amendment and Termination.

 

Notwithstanding any other provision of this Plan, the Employer shall have the
right (i) to declare that an individual who previously was selected to
participate as an Employee in the Plan shall no longer participate as an
Employee in the Plan, (ii) to amend the Plan from time to time and (iii) to
terminate the Plan at any time; provided that (A) during any period in which the
Employer is involved in discussions with a third party about a transaction that
would result in a Change in Control of the Employer (and before the complete
abandonment of such discussions without the transaction being consummated),
(B) during any period the Employer has become a party to a definitive agreement
to consummate a transaction that would result in a Change in Control of the
Employer (and before the complete termination of such agreement without the
transaction being consummated) and (C) at any time on or after a Change in
Control of the Employer occurs, without the affected Employee’s consent (i) the
Employer may not declare that an individual who previously was selected to
participate as an Employee in the Plan no longer participates as an Employee in
the Plan, (ii) no amendment may be made that diminishes any Employee’s rights
under the Plan and (iii) the Plan may not be terminated until all benefits that
become payable under the Plan are paid in full.  An amendment may be made
retroactively to the Plan if it is necessary to make this Plan conform to
applicable law.  Upon termination of the Plan, the Plan shall no longer be of
any further force or effect, and neither the Employer, any Affiliate nor any
Employee shall have any obligations or rights under this Plan.  Likewise, the
rights of any individual who was an Employee and whose designation as an
Employee is revoked or rescinded by the Employer (to the extent permitted under
the Plan) shall cease upon such action.

 

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15.                                 Notice.

 

Notices under this Plan shall be in writing and sent by registered mail, return
receipt requested, to the following addresses or to such other address as the
party being notified may have previously furnished to the other party by written
notice:

 

If to Employer:

 

EarthLink, Inc.

1375 Peachtree Street, N.W.

Suite 7 North

Atlanta, Georgia 30309-2935

Attention: Chief People Officer

 

If to an Employee:

 

The address last indicated on the records of Employer.

 

16.                                 Excise Tax.

 

Despite any other provisions of this Plan to the contrary, if the receipt of any
payments or benefits under this Plan would subject an Employee to tax under Code
Section 4999, the Employer may determine whether some amount of payments or
benefits would meet the definition of a “Reduced Amount.”  If the Employer
determines that there is a Reduced Amount, the total payments or benefits to the
Employee hereunder must be reduced to such Reduced Amount, but not below zero. 
If the Employer determines that the benefits and payments must be reduced to the
Reduced Amount, the Employer must promptly notify the Employee of that
determination, with a copy of the detailed calculations by the Employer.  All
determinations of the Employer under this Section are final, conclusive and
binding upon the Employee.  It is the intention of the Employer and the Employee
to reduce the payments under this Plan only if the aggregate Net After Tax
Receipts to the Employee would thereby be increased.  Any such reduction shall
first reduce any non-cash benefits on a pro-rata basis and then reduce any cash
payments on a pro-rata basis.  As a result of the uncertainty in the application
of Code Section 4999 at the time of the initial determination by the Employer
under this Section, however, it is possible that amounts will have been paid
under the Plan to or for the benefit of an Employee which should not have been
so paid (“Overpayment”) or that additional amounts which will not have been paid
under the Plan to or for the benefit of an Employee could have been so paid
(“Underpayment”), in each case consistent with the calculation of the Reduced
Amount.  If the Employer, based either upon the assertion of a deficiency by the
Internal Revenue Service against the Employer or the Employee, which the
Employer believes has a high probability of success, or controlling precedent or
other substantial authority, determines that an Overpayment has been made, any
such Overpayment must be treated for all purposes as a loan which the Employee
must repay to the Employer together with interest at the applicable Federal rate
under Code Section 7872(f)(2); provided, however, that no such loan may be
deemed to have been made and no amount shall be payable by the Employee to the
Employer if and to the extent such deemed loan and payment would not either
reduce the amount on which the Employee is subject to tax under Code Section 1,
3101 or 4999 or generate a refund of such taxes.  If the Employer, based upon
controlling precedent or other substantial authority, determines that an

 

19

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Underpayment has occurred, the Employer must pay the amount of the Underpayment
to the Employee as soon as administratively practicable (and within 30 days)
after the final determination of Underpayment has been made.  For purposes of
this Section, (i) “Net After Tax Receipt” means the Present Value of a payment
under this Plan net of all taxes imposed on the Employee with respect thereto
under Code Sections 1, 3101 and 4999, determined by applying the highest
marginal rate under Code Section 1 which applies to the Employee’s taxable
income for the applicable taxable year; (ii) “Present Value” means the value
determined in accordance with Code Section 280G(d)(4) and (iii) “Reduced Amount”
means the largest aggregate amount of all payments and benefits under this Plan
which (a) is less than the sum of all payments and benefits under this Plan and
(b) results in aggregate Net After Tax Receipts which are equal to or greater
than the Net After Tax Receipts which would result if the aggregate payments and
benefits under this Plan were any other amount less than the sum of all payments
and benefits to be made under this Plan.

 

17.                                 Miscellaneous.

 

(A)           THE FAILURE OF THE EMPLOYER OR AN AFFILIATE TO ENFORCE ANY
PROVISIONS OF THE PLAN SHALL IN NO WAY BE CONSTRUED TO BE A WAIVER OF THOSE
PROVISIONS, NOR IN ANY WAY EFFECT THE VALIDITY OF THE PLAN OR ANY PART THEREOF,
OR THE RIGHT OF THE EMPLOYER OR AN AFFILIATE THEREAFTER TO ENFORCE SUCH
PROVISION.

 

(B)           THE BENEFITS PROVIDED UNDER THIS PLAN ARE IN ADDITION TO AND NOT
IN LIEU OF ANY OTHER SIMILAR BENEFITS THAT THE EMPLOYER OR ANY AFFILIATE MAY
SPECIFY FROM TIME TO TIME IN ANY EMPLOYEE HANDBOOK OR IN ANY OTHER AGREEMENT
BETWEEN THE EMPLOYEE AND THE EMPLOYER OR AN AFFILIATE.  ADDITIONALLY, THE
BENEFITS THAT THIS PLAN PROVIDES SHALL NOT BE REDUCED OR OFFSET BY ANY OTHER
PAYMENTS OR BENEFITS THAT THE EMPLOYEE MAY RECEIVE FROM ANY OTHER THIRD PARTY OR
OTHER EMPLOYER AFTER THE EMPLOYEE’S TERMINATION OF EMPLOYMENT.

 

(C)           WHENEVER ANY BENEFITS BECOME PAYABLE UNDER THE PLAN, THE EMPLOYER
AND ITS AFFILIATES SHALL HAVE THE RIGHT TO WITHHOLD SUCH AMOUNTS AS ARE
SUFFICIENT TO SATISFY ANY APPLICABLE FEDERAL, STATE OR LOCAL WITHHOLDING, TAX,
EXCISE TAX OR SIMILAR REQUIREMENTS.

 

(D)           THE TERMS OF AN EMPLOYEE’S BENEFITS ARE AS SET FORTH IN THIS
DOCUMENT, WHICH CANNOT BE CHANGED BY THE PROMISES OF ANY INDIVIDUAL EMPLOYEE OR
MANAGER.  ONLY THE EMPLOYER MAY CHANGE THE TERMS OF THE PLAN, AND THEN ONLY
THROUGH A WRITTEN AMENDMENT.  NO PROMISES (ORAL OR WRITTEN) THAT ARE CONTRARY TO
THE TERMS OF THE PLAN AND ITS WRITTEN AMENDMENTS ARE BINDING UPON THE PLAN OR
THE EMPLOYER.

 

(E)           THE TERMS AND CONDITIONS OF THIS PLAN AND THE EMPLOYEES’ BENEFITS
UNDER THE PLAN SHALL REMAIN STRICTLY CONFIDENTIAL.  EMPLOYEES MAY NOT DISCUSS OR
DISCLOSE ANY TERMS OF THIS PLAN OR ITS BENEFITS WITH ANYONE EXCEPT THEIR
ATTORNEYS, ACCOUNTANTS AND IMMEDIATE FAMILY MEMBERS WHO SHALL BE INSTRUCTED TO
MAINTAIN THE CONFIDENTIALITY AGREED TO UNDER THIS PLAN, EXCEPT AS MAY BE
REQUIRED BY LAW.

 

(F)            BENEFITS UNDER THE PLAN ARE NOT CONSIDERED ELIGIBLE EARNINGS FOR
THE EMPLOYER’S 401(K) PLAN OR ANY OTHER BENEFIT PROGRAM.

 

20

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(G)           THIS PLAN IS INTENDED TO COMPLY WITH THE APPLICABLE REQUIREMENTS
OF SECTION 409A OF THE CODE AND SHALL BE CONSTRUED AND INTERPRETED IN ACCORDANCE
THEREWITH.  THE EMPLOYER MAY AT ANY TIME AMEND, SUSPEND OR TERMINATE THIS PLAN,
OR ANY PAYMENTS TO BE MADE HEREUNDER, AS NECESSARY TO BE IN COMPLIANCE WITH
SECTION 409A OF THE CODE.  FOR PURPOSES OF THIS PLAN, ALL RIGHTS TO PAYMENTS AND
BENEFITS HEREUNDER SHALL BE TREATED AS RIGHTS TO RECEIVE A SERIES OF SEPARATE
PAYMENTS AND BENEFITS TO THE FULLEST EXTENT ALLOWED BY SECTION 409A OF THE CODE.
NOTWITHSTANDING THE PRECEDING, THE EMPLOYER AND ALL AFFILIATES SHALL NOT BE
LIABLE TO ANY EMPLOYEE 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 AMOUNT UNDER THIS PLAN IS SUBJECT TO TAXES, PENALTIES OR
INTEREST AS A RESULT OF FAILING TO COMPLY WITH CODE SECTION 409A OF THE CODE.

 

(H)           THIS PLAN IS INTENDED TO BE A “WELFARE PLAN” AND NOT A “PENSION
PLAN” AS DEFINED IN ERISA SECTIONS 3(1) AND 3(2), RESPECTIVELY.  ACCORDINGLY,
THE PLAN MUST BE INTERPRETED AND ADMINISTERED IN A MANNER THAT IS CONSISTENT
WITH THAT INTENT.

 

21

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IN WITNESS WHEREOF, Employer has caused this instrument to be executed in its
name by its duly authorized officer, all as of the day and year first above
written.

 

 

 

EARTHLINK, INC.

 

 

 

 

 

By:

 

 

Title:

 

 

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EARTHLINK, INC.

CHANGE-IN-CONTROL ACCELERATED VESTING AND SEVERANCE PLAN

SUMMARY PLAN DESCRIPTION

 

NAME OF PLAN:

 

EarthLink, Inc. Change-in-Control Accelerated Vesting and Severance Plan

 

NAME, ADDRESS, AND TELEPHONE NUMBER OF SPONSOR AND PLAN ADMINISTRATOR:

 

EarthLink, Inc. (“Employer”)

1375 Peachtree Street, N.W.

Suite 7 North

Atlanta, Georgia 30309-2935

(404) 815-0770

 

The Employer administers the Plan.

 

EMPLOYER IDENTIFICATION NUMBER:

 

58-2511877

 

PLAN NUMBER ASSIGNED TO THIS PLAN:

 

501

 

ORIGINAL EFFECTIVE DATE:

 

April 19, 2001

 

PLAN YEAR:

 

Calendar year beginning on January 1 of each year and ending on December 31.

 

FISCAL YEAR FOR MAINTAINING PLAN RECORDS:

 

Calendar year beginning on January 1 of each year and ending on December 31.

 

TYPE OF WELFARE PLAN:

 

The Plan is a severance pay plan that provides benefits to certain Employees in
the event of termination of their employment due to certain specified reasons.

 

TYPE OF ADMINISTRATION OF THE PLAN:

 

The Employer administers the Plan as described in Section 7.

 

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PROVISIONS FOR ELIGIBILITY REQUIREMENTS:

 

The Plan generally describes eligibility requirements in Sections 2 and 3.

 

DESCRIPTION OF PLAN BENEFITS:

 

The Plan generally describes conditions for payment of benefits and the amount
of such benefits in Sections 2 and 3.

 

SOURCES OF CONTRIBUTIONS TO THE PLAN AND FUNDING MEDIUM:

 

The general assets of the Employer or the Affiliate that employs Employee shall
fund the severance pay from the Plan.

 

PROCEDURES FOR PRESENTING CLAIMS AND REDRESS OF DENIED CLAIMS:

 

Section 6 provides detailed instructions for filing a claim and redress of a
denied claim.

 

AGENT FOR SERVICE OF PROCESS:

 

EarthLink, Inc.

1375 Peachtree Street, N.W.

Suite 7 North

Atlanta, Georgia 30309-2935

Attention: Chief People Officer

 

In addition to the agent listed above, service of process may be made upon the
Employer itself.

 

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YOUR RIGHTS UNDER ERISA

 

The following statement is required by law to be included in this Summary Plan
Description:

 

As a participant in the EarthLink, Inc. Change-in-Control Accelerated Vesting
and Severance Plan (the “Plan”) you are entitled to certain rights and
protections under the Employee Retirement Income Security Act of 1974, as
amended (“ERISA”).  ERISA provides that all Plan participants shall be entitled
to:

 

Examine, without charge, at the Employer’s office and at other specified
location, such as worksites, all Plan documents and a copy of the latest Annual
Report (Form 5500 series) filed by the Plan with the U.S. Department of Labor
and available at the Public Disclosure Room of the Pension and Welfare Benefit
Administration.

 

Obtain, upon written request to the Employer, copies of all Plan documents
governing the operation of the Plan and copies of the latest Annual Report
(Form 5500 series) and an updated summary plan description.  The Employer may
make a reasonable charge for the copies.

 

Receive a summary of the Plan’s annual financial report.  The Employer is
required by law to furnish each Employee with a copy of this summary annual
report.

 

In addition to creating rights for Plan participants, ERISA imposes duties upon
the people who are responsible for the operation of the Plan.  The people who
operate your Plan, called fiduciaries, have a duty to do so prudently and in the
interest of you and other Plan participants.  No one, including your employer or
any other person, may fire you or otherwise discriminate against you in any way
solely in order to prevent you from obtaining a benefit or exercising your
rights under ERISA.  If your claim for a benefit is denied, in whole or in part,
you must receive a written explanation of the reason for the denial.  You have
the right to have the Plan review and reconsider your claim.  Under ERISA, there
are steps you can take to enforce the above rights.  For instance, if you
request materials from the Plan and do not receive them within 30 days, you may
file suit in a federal court.  In such a case, the court may require the
Employer to provide the materials and pay you up to $110 a day until you receive
the materials, unless the materials were not sent because of reasons beyond the
control of the Employer.  If you have a claim for benefits which is denied or
ignored, in whole or in part, you may file suit in a state or federal court.  If
it should happen that Plan fiduciaries misuse the Plan’s money, or if you are
discriminated against for asserting your rights, you may file suit in a federal
court.  The court will decide who should pay court costs and legal fees.  If you
are successful, the court may order the person you have sued to pay these costs
and fees.  If you lose, the court may order you to pay these costs and fees.  If
you have any questions about your Plan, you should contact the Employer.  If you
have any questions about this statement or about your rights under ERISA, you
should contact the nearest office of the Pension and Welfare Benefits
Administration, U.S. Department of Labor, listed in your telephone directory or
the Division of Technical Assistance and Inquiries, Pension and Welfare Benefits
Administration, U.S. Department of Labor, 200 Constitution Avenue, N.W.,

 

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Washington, D.C. 20210.  You may also obtain certain publications about your
rights and responsibilities under ERISA by calling the publications hotline of
the Pension and Welfare Benefits Administration.

 

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Exhibit B

 

Benefits

 

Gold and Silver
Benefit Category

 

Bronze
Benefit Category

Cash Severance

 

Lump sum cash payment of 1.5 times the sum of employee’s salary plus bonus
target, if within 18 months after a change in control the company terminates
employee’s employment without cause or employee voluntarily terminates his or
her employment for good reason; no cash severance if termination of employment
is on account of the employee’s death or disability.

 

Lump sum cash payment equal to the sum of employee’s salary plus bonus target,
if within 18 months after a change in control the company terminates employee’s
employment without cause or employee voluntarily terminates his or her
employment for good reason; no cash severance if termination of employment is on
account of the employee’s death or disability.

COBRA Benefits

 

Company will pay all amounts payable with respect to the employee’s elected
COBRA coverage (including coverage for spouse and dependents) for 1.5 years from
the termination of the employee’s employment, if within 18 months of the change
in control the company terminates employee’s employment without cause or
employee voluntarily terminates his or her employment for good reason; no paid
COBRA benefits if the termination of employment is on account of the employee’s
death or disability.

 

Company will pay all amounts payable with respect to the employee’s COBRA
coverage (including coverage for spouse and dependents) for 1 year from the
termination of the employee’s employment, if within 18 months of the change in
control the company terminates employee’s employment without cause or employee
voluntarily terminates his or her employment for good reason; no paid COBRA
benefits if termination of employment is on account of the employee’s death or
disability.

Accelerated vesting of outstanding stock options

 

If stock options are assumed or continued after a change in control, all
outstanding stock options granted on or before the change in control will vest
and be exercisable in full, if not already fully vested, on termination of
employee’s employment, if within 18 months of the change in control the company
terminates employee’s employment without cause or employee voluntarily
terminates his or her employment for good reason; no such vesting if the
termination of employment is on account of the employee’s death or disability;
if options are not assumed or continued after the change in control, all
outstanding stock options are vested and exercisable in full contemporaneously
with the change in control, if not already fully vested, provided employee
remains employed until the change in control.

 

If stock options are assumed or continued after a change in control, all
outstanding stock options granted on or before the change in control will vest
and be exercisable at least as much as if the employee had remained employed for
24 months after the change in control occurs, if not already vested to such
extent, if within 18 months of the change in control the company terminates
employee’s employment without cause or employee voluntarily terminates his or
her employment for good reason; no such vesting if the termination of employment
is on account of the employee’s death or disability; if options are not assumed
or continued after the change in control, all outstanding stock options are
vested and exercisable at least as much as if the employee had remained employed
for 24 months after the change in control occurs, if not already vested to such
extent, provided employee remains employed until the change in control.
Individuals in the Bronze benefit category are grandfathered into the vesting
under the Silver benefit category if they participated in the Accelerated
Vesting and Compensation Continuation Plan and elected to participate in this
Plan.

Accelerated vesting of outstanding restricted stock units

 

If restricted stock units are assumed or continued after a change in control,
all outstanding restricted stock units granted on or before the change in
control will vest and be earned and payable in full, if not already fully

 

If restricted stock units are assumed or continued after a change in control,
all outstanding restricted stock units granted on or before the change in
control will vest and be earned and payable at least as much as if the

 

1

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Benefits

 

Gold and Silver
Benefit Category

 

Bronze
Benefit Category

 

 

vested, on termination of employee’s employment, if within 18 months of the
change in control the company terminates employee’s employment without cause or
employee voluntarily terminates his or her employment for good reason; no such
vesting if the termination of employment is on account of the employee’s death
or disability; if restricted stock units are not assumed or continued after the
change in control, all outstanding restricted stock units are vested and earned
and payable in full contemporaneously with the change in control, if not already
fully vested, provided that employee remains employed until the change in
control, except that restricted stock units that contain performance criteria
will not vest if the date for attainment of those criteria has passed.

 

employee had remained employed for 24 months after the change in control occurs,
if not already vested to such extent, if within 18 months of the change in
control the company terminates employee’s employment without cause or employee
voluntarily terminates his or her employment for good reason; no such vesting if
the termination of employment is on account of the employee’s death or
disability; if restricted stock units are not assumed or continued after the
change in control, all outstanding restricted stock units are vested and earned
and payable at least as much as if the employee had remained employed for 24
months after the change in control occurs, if not already vested to such extent,
provided that employee remains employed until the change in control, except that
restricted stock units that contain performance criteria will not vest if the
date for attainment of those criteria has passed or occurs more than 24 months
after the change in control. Individuals in the Bronze benefit category are
grandfathered into the vesting under the Silver benefit category if they
participated in the Accelerated Vesting and Compensation Continuation Plan and
elected to participate in this Plan.

 

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