EARTHLINK SHARED SERVICES, LLC

2016 SHORT-TERM INCENTIVE BONUS PLAN

THIS 2016 SHORT-TERM INCENTIVE BONUS PLAN (this “Plan”) of EarthLink Shared
Services, LLC, a Delaware limited liability company (the “Company”), for the
benefit of the eligible employees described herein, is adopted as of the 16th
day of February 2016. This Plan replaces and supersedes the terms of the
EarthLink Shared Services, LLC 2015 Short-Term Incentive Bonus Plan (the “2015
Plan”) as in effect prior to the adoption of this Plan.

WITNESSETH:

WHEREAS, the Board of Directors of the Company has approved the Plan as set
forth herein.

NOW, THEREFORE, the Company hereby establishes the Plan as set forth below.
1.STATEMENT OF PURPOSE
1.1    Statement of Purpose. The purpose of the Plan is to encourage the
creation of shareholder value by establishing a direct link between the
achievement of designated Corporate Performance Objectives (as defined below)
and the incentive compensation of Participants in the Plan.
Participants contribute to the success of EarthLink Holdings Corp. (“EarthLink”)
and its Affiliates (as defined below) through the application of their skills
and experience in fulfilling the responsibilities associated with their
positions. EarthLink and its Affiliates desire to benefit from the contributions
of the Participants and to provide an incentive bonus plan that encourages the
sustained creation of shareholder value.
2.    DEFINITIONS
2.1    Definitions. Capitalized terms used in the Plan shall have the following
meanings:
“Adjusted EBITDA” means net income (or loss) from continuing operations before
interest income (expense) and other, net, income tax benefit, depreciation and
amortization, including or excluding one or more of stock-based compensation
expense under ASC 718, gains (losses) of equity affiliates (net), gain (loss) on
investments (net), impairment of goodwill and long-lived assets, restructuring,
acquisition and integration-related costs, loss on extinguishment of debt and/or
loss from discontinued operations, net of tax. The calculation of Adjusted
EBITDA shall include any compensation expense attributable to the Bonus Awards
to be paid under the Plan.
“Affiliate” means any entity that is part of a controlled group of corporations
or is under common control with EarthLink within the meaning of Code Sections
1563(a), 414(b) or 414(c), except that, in making any such determination, fifty
percent (50%) shall be substituted for eighty percent (80%) each place it
appears under such Code Sections and related regulations.
“Bonus Award” means the sum of (a) the Participant’s Performance Bonus and (b)
the Participant’s Individual Bonus, if any, for the Bonus Period.
“Bonus Period” means the period beginning January 1 and ending December 31 of
the calendar year, in respect of which the Corporate Performance Objectives are
measured and the Participants’ Bonus Awards, if any, are to be determined.
“Business Churn” means monthly recurring revenues associated with subscribers
that discontinued service during the period divided by total monthly recurring
revenues for the period (with recurring revenues meaning revenues that can be
reliably anticipated every thirty (30) days).
“Business New Billed Revenue” means monthly recurring revenue billing for the
first time in the applicable period either for new customers or new services for
existing customers.
“CAPEX and Restructuring” means purchases of property and equipment plus
restructuring, acquisition and integration-related costs (including or excluding
(i) system conversions, rebranding costs and integration-related consulting and
employee costs; (ii) severance, retention and other employee termination costs
associated with restructuring, acquisition and integration activities and with
certain voluntary employee separations; (iii) facility-related costs, such as
lease termination and asset impairments; and (iv) transaction-related costs,
which are direct costs incurred to effect a business combination, such as
advisory, legal, accounting, valuation and other professional fees).
“Cause” has the same definition as under any employment or service agreement
between the Employer and the Participant or, if no such employment or service
agreement exists or if such employment or service agreement does not contain any
such definition, Cause means (i) the Participant’s willful and repeated failure
to comply with the lawful directives of the Board of Directors of EarthLink or
any of its Affiliates or any supervisory personnel of the Participant; (ii) any
criminal act or act of dishonesty or willful misconduct by the Participant that
has a material adverse effect on the property, operations, business or
reputation of EarthLink or any of its Affiliates; (iii) the material breach by
the Participant of the terms of any confidentiality, non-competition,
non-solicitation or other such agreement that the Participant has with EarthLink
or any of its Affiliates or (iv) acts by the Participant of willful malfeasance
or gross negligence in a matter of material importance to EarthLink or any of
its Affiliates.
“Change in Control” means the occurrence of any of the following events:
(a)    the accumulation in any number of related or unrelated transactions by
any person of beneficial ownership (as such term is used in Rule 13d-3
promulgated under the Securities Exchange Act of 1934, as amended) of more than
fifty percent (50%) of the combined voting power of EarthLink’s voting stock;
provided that, for purposes of this subsection (a), 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 EarthLink’s voting stock results from any acquisition of
voting stock (i) directly from EarthLink that is approved by the Incumbent
Board, (ii) by EarthLink, (ii) by any employee benefit plan (or related trust)
sponsored or maintained by EarthLink or any of its Affiliates, or (iv) by any
person pursuant to a merger, consolidation, or reorganization (a "Business
Combination") that would not cause a Change in Control under clauses (i) and
(ii) of subsection (b) below; or
(b)    consummation of a Business Combination, unless, immediately following
that Business Combination, (i) all or substantially all of the persons who are
the beneficial owners of voting stock of EarthLink 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 EarthLink or all or substantially all of
EarthLink’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
EarthLink, and (ii) at least fifty percent (50%) of the members of the Board of
Directors of the entity resulting from that Business Combination holding at
least fifty percent (50%) 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 the right to dilute either such percentages by appointing
additional members to the Board of Directors or otherwise without election or
action by the shareholders; or
(c)    a sale or other disposition of all or substantially all the assets of
EarthLink, except pursuant to a Business Combination that would not cause a
Change in Control under clauses (i) and (ii) of subsection (b) above, or
(d)    a complete liquidation or dissolution of EarthLink, except pursuant to a
Business Combination that would not cause a Change in Control under clauses (i)
and (ii) of subsection (b) above.
“Code” means the Internal Revenue Code of 1986, as amended.
“Committee” means the Leadership and Compensation Committee of the Board of
Directors of EarthLink which will administer the Plan.
“Compensation” means the Participant’s actual wages earned during the Bonus
Period, excluding incentive payments, salary continuation, bonuses, income from
equity awards, stock options, restricted stock, restricted stock units, deferred
compensation, commissions, and any other forms of compensation over and above
the Participant’s actual wages earned during the Bonus Period.
“Consumer Churn” means the average monthly number of subscribers that
discontinued service during the period divided by the average number of
subscribers for the period.
“Corporate Performance Bonus Multiplier” means either (i) zero (0) or (ii) the
percentage from fifty percent (50%) to two hundred percent (200%) that applies
to determine the Participant’s Bonus Award for the Bonus Period. The Committee
shall establish the Corporate Performance Bonus Multipliers that relate to the
levels of Corporate Performance Objectives that must be achieved during the
Bonus Period to calculate the Participant’s Bonus Award.
“Corporate Performance Objectives” means Net New Billed Revenue, Adjusted
EBITDA, CAPEX and Restructuring, Business Churn, Business New Billed Revenue and
Consumer Churn, of EarthLink, any Affiliate of EarthLink, product, division,
business unit, service line, customer type, segment or geographic basis,
individually, alternatively, or any combination, subset or component, in such
amounts as the Committee shall determine in its sole discretion for the Bonus
Period that must be achieved for the Participant’s Corporate Performance Bonus
Multiplier for the Bonus Period to be greater than zero (0). Notwithstanding the
foregoing, the Committee may establish Corporate Performance Objectives based
upon any of the business criteria with respect to which Awards (as defined
therein) that are intended to constitute qualified performance-based
compensation under EarthLink’s 2011 Equity and Cash Incentive Plan, EarthLink’s
2016 Equity and Cash Incentive Plan or any other such plan may be based. The
Committee shall adjust the Corporate Performance Objectives as the Committee in
its sole discretion may determine is appropriate in the event of unbudgeted
acquisitions or divestitures or other unexpected fundamental changes in the
business of EarthLink, any business unit or any product to fairly and equitably
determine the Bonus Awards and to prevent any inappropriate enlargement or
dilution of the Bonus Awards. In that respect, the Corporate Performance
Objectives may be adjusted to reflect, by way of example and not of limitation,
(i) unanticipated asset write-downs or impairment charges, (ii) litigation or
claim judgments or settlements thereof, (iii) changes in tax laws, accounting
principles or other laws or provisions affecting reported results, (iv) accruals
for reorganization or restructuring programs, or extraordinary, unusual,
infrequently occurring or non-reoccurring items, (v) acquisitions or
dispositions or (vi) foreign exchange gains or losses. To the extent any such
adjustments affect any Bonus Award, the intent is that the adjustments shall be
in a form that allows the Bonus Award to continue to meet the requirements of
Section 162(m) of the Code for deductibility to the extent intended to
constitute qualified performance-based compensation.
“Disability” has the same definition as under any employment or service
agreement between the Employer and the Participant or, if no such employment or
service agreement exists or if such employment or service agreement does not
contain any such definition, Disability means where the Participant is
“disabled” or has incurred a “disability” in accordance with the policies of the
Employer that employs the Participant in effect at the applicable time.
“Distribution” means the payment of the Bonus Award under the Plan.
“Distribution Date” means the date on which the Distribution occurs.
“EarthLink” means EarthLink Holdings Corp., a Delaware corporation, and any
successor thereto.
“EBITDA” means net income (loss) from continuing operations before interest
income (expense) and other, net, income tax benefit, depreciation and
amortization.
“Effective Date” means January 1, 2016.
“Employee” means a common law employee of an Employer who is classified as
“exempt” on the Employer’s payroll, personnel or tax records. A common law
employee of an Employer only includes an individual who renders personal
services to the Employer and who, in accordance with the established payroll,
accounting and personnel policies of the Employer, is characterized by the
Employer as an “exempt” common law employee. An Employee does not include (i)
any person whom the Employer has identified on its payroll, personnel or tax
records as an independent contractor or (ii) any person who has acknowledged in
writing to the Employer that such person is an independent contractor, whether
or not in case of both (i) and (ii) a court, the Internal Revenue Service or any
other authority ultimately determines such classification to be correct or
incorrect as a matter of law or (iii) any person who is classified other than as
“exempt” on the Employer’s payroll, personnel or tax records.
“Employer” means EarthLink, the Company and any Affiliate of EarthLink who
employs one or more Employees.
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“Incumbent Board” means a Board of Directors of EarthLink at least a majority of
whom consist of individuals who either are (a) members of EarthLink’s Board of
Directors as of the Effective Date of the adoption of this Plan or (b) members
who become members of EarthLink’s Board of Directors subsequent to the date of
the adoption of this Plan whose election, or nomination for election by
EarthLink’s shareholders, was approved by a vote of at least sixty percent (60%)
of the directors then comprising the Incumbent Board (either by specific vote or
by approval of a proxy statement of EarthLink 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 office occurs as a
result of an actual or threatened election contest (within the meaning of Rule
14a-11 of the Securities Exchange Act of 1934, as amended) with respect to the
election or removal of directors or other action or threatened solicitation of
proxies or consents by or on behalf of a person other than the Board of
Directors of EarthLink.
“Individual Bonus” means the dollar amount which results from multiplying the
Participant’s Compensation for the Bonus Period by the product of (a) the
Participant’s Target Bonus Percent, (b) the Participant’s Corporate Performance
Bonus Multiplier, (c) twenty percent (20%) and (d) the Participant’s Individual
Performance Factor (using two hundred percent (200%) as the Participant’s
Individual Performance Factor unless reduced as set forth in the following
sentence). Notwithstanding the foregoing, the Participant’s Individual
Performance Factor may be reduced, but not below zero (0), if the Participant’s
individual performance for the Bonus falls below that expected for an Individual
Performance Factor of two hundred percent (200%).
“Individual Performance Factor” means the percentage from zero percent (0%) to
two hundred percent (200%) as the Committee in its sole discretion may determine
based upon the Committee’s assessment of the Participant’s individual
performance for the Bonus Period.
“Management” means the Employees or Participants, as applicable, who are the
executive officers of EarthLink, the Company or any other Affiliate of EarthLink
or otherwise subject to the reporting and other provisions of Section 16 of the
Exchange Act, individually or as a group, as designated by the Board of
Directors of EarthLink.
“Maximum Bonus Award” means the maximum Bonus Award, denoted as a dollar amount,
which can be earned and paid to the Participant for the Bonus Period as
established by the Committee, which cannot exceed in any event the dollar amount
which results from multiplying the Participant’s Compensation for the Bonus
Period by the product of (a) the Participant’s Target Bonus Percent, (b) the
Participant’s Corporate Performance Bonus Multiplier and (c) one hundred and
twenty percent (120%).
“Net New Billed Revenue” means New Billed Revenue net of lost recurring revenue
driven by the cancellation or downgrade of products or services.
“New Billed Revenue” means incremental recurring revenue initiated by the
delivery of new or upgraded products or services.
“Participant” means an Employee of an Employer who is selected to participate in
the Plan.
“Performance Bonus” means the dollar amount which results from multiplying the
Participant’s Compensation for the Bonus Period by the product of (a) the
Participant’s Target Bonus Percent, (b) the Participant’s Corporate Performance
Bonus Multiplier and (c) eighty percent (80%).
“Plan” means this EarthLink Shared Services, LLC 2016 Short-Term Incentive Bonus
Plan, in its current form and as it may be hereafter amended.
“Target Bonus Percent” means the percent of the Participant’s Compensation that
will be earned as a Performance Bonus (using one hundred percent (100%) in lieu
of eighty percent (80%)) where the Corporate Performance Objectives that are
achieved for the Bonus Period result in a Corporate Performance Bonus Multiplier
of one hundred percent (100%). The Target Bonus Percent for each Participant
shall be established consistent with the Participant’s position in the
Employer’s compensation structure.
3.    ADMINISTRATION OF THE PLAN
3.1    Administration of the Plan. The Committee shall be the sole administrator
of the Plan and shall have full authority to formulate adjustments and make
interpretations under the Plan as it deems appropriate. The Committee shall also
be empowered to make any and all of the determinations not herein specifically
authorized which may be necessary or desirable for the effective administration
of the Plan. Any decision or interpretation of any provision of this Plan
adopted by the Committee shall be final and conclusive. Benefits under this Plan
shall be paid only if the Committee determines, in its sole discretion, that the
Participant or Beneficiary is entitled to them. None of the members of the
Committee shall be liable for any act done or not done in good faith with
respect to this Plan. The Company shall bear all expenses of administering this
Plan.
4.    ELIGIBILITY
4.1    Establishing Participation. Each Employee whose position in the
Employer’s compensation structure entitles him or her to participate in the Plan
shall participate in the Plan for the applicable Bonus Period except that (a)
the Committee must approve the members of Management, if any, who shall be
entitled to participate in the Plan for the Bonus Period and (b) no Employee who
is eligible for commission or incentive-based compensation (in lieu of wages or
base salary) shall be eligible to participate in the Plan. The Committee shall
retain the discretion to name as a Participant any otherwise-eligible member of
Management hired or promoted after the commencement of the Bonus Period.
5.    AMOUNT OF BONUS AWARDS
5.1    Establishment of Bonuses.
(a)    Initial Determinations. The Committee shall establish generally for each
Participant the Target Bonus Percent, the Corporate Performance Bonus Multiplier
and the Maximum Bonus Award that will apply with respect to the designated
levels of achievement of the Corporate Performance Objectives for the Bonus
Period. The Corporate Performance Bonus Multiplier and Maximum Bonus Award for
each Participant will be based on the achievement of such Corporate Performance
Objectives as the Committee shall designate, which may include the achievement
of one or more Corporate Performance Objectives or any combination of Corporate
Performance Objectives as the Committee may select.
(b)    Corporate Performance Objectives. The Committee shall establish the
Corporate Performance Objectives that must be achieved to determine each
Participant’s Corporate Performance Bonus Multiplier for the Bonus Period. To
the extent the Corporate Performance Objectives are not achieved, the Corporate
Performance Bonus Multiplier shall be zero (0). The Corporate Performance
Objectives to be achieved must take into account and be calculated with respect
to the full accrual and payment of the Bonus Awards under the Plan.
The Corporate Performance Objectives must be established in writing no later
than the earlier of (i) ninety (90) days after the beginning the period of
service to which they relate and (ii) before the lapse of twenty-five percent
(25%) of the period of service to which they relate; they must be uncertain of
achievement at the time they are established; and the achievement of the
Corporate Performance Objectives must be determinable by a third party with
knowledge of the relevant facts. The Corporate Performance Objectives may be
stated with respect to EarthLink’s, an Affiliate’s, a product’s, a division's, a
business unit’s, a service line's, a customer type's, and/or a segment's or
geographic area's Corporate Performance Objectives individually, alternatively,
and/or any combination, subset or component of the foregoing or any combination
subset or component or variation of Corporate Performance Objectives with
respect to which Awards (as defined therein) that are intended to constitute
qualified performance-based compensation may be based under EarthLink’s 2011
Equity and Cash Incentive Plan, EarthLink’s 2016 Equity and Cash Incentive Plan,
or under any other such plan under which awards intended to constitute qualified
performance-based compensation may be based, as the Committee may designate. The
Corporate Performance Objectives may, but need not, be based upon an increase or
positive result under the aforementioned business criteria and could include,
for example and not by way of limitation, maintaining the status quo or limiting
the economic losses (measured, in each case, by reference to the specific
business criteria). The Corporate Performance Objectives may not include solely
the mere continued employment of the Participant. However, Bonus Awards may
become payable contingent on the Participant’s continued employment at the time
the Bonus Award becomes payable, in addition to the Corporate Performance
Objectives described above.
(c)    Individual Performance Levels. The Committee shall establish the
individual performance levels that must be achieved to determine each
Participant’s Individual Performance Factor and Individual Bonus for the Bonus
Period. The individual performance levels may be established at the same time as
the Committee establishes the Corporate Performance Objectives or any other time
during the Bonus Period or the Committee may determine each Participant’s
Individual Bonus after review of the Participant’s individual performance level
for the Bonus Period.
5.2    Calculation of Bonus Awards.
(a)    Timing of the Calculation. The calculations necessary to determine the
Bonus Awards for the Bonus Period shall be made no later than the fifteenth day
of the third month following the end of the Bonus Period for which the Bonus
Awards are to be calculated. Such calculation shall be carried out in accordance
with this Section 5.2.
(b)    Calculation. Following the end of the Bonus Period, each Participant’s
Performance Bonus, if any, shall be calculated, as the Committee in its sole
discretion may determine. Following the end of the Bonus Period, each
Participant’s Individual Bonus, if any, also shall be calculated, and the
Participant’s Individual Bonus for the Bonus Period shall be either the
Participant’s Individual Bonus using an Individual Performance Factor of two
hundred percent (200%) or such lesser Individual Performance Factor as the
Committee in its sole discretion may determine as set forth in Section 5.2(d)
and (e) below. Notwithstanding any other provision of the Plan, the
Participant’s Bonus Award may not exceed the Participant’s Maximum Bonus Award.
(c)    Written Determination. For purposes of the Bonus Awards, the Committee
shall certify in writing whether the Corporate Performance Objectives have been
achieved. The Bonus Awards payable under this Plan are intended to constitute
Awards under EarthLink’s 2011 Equity and Cash Incentive Plan, EarthLink’s 2016
Equity and Cash Incentive Plan or under any other plan under which Bonus Awards
intended to constitute qualified performance-based compensation may be paid (as
the Committee shall designate), to the maximum extent possible. Accordingly, the
Bonus Awards hereunder also will be subject to the terms of EarthLink’s 2011
Equity and Cash Incentive Plan, EarthLink’s 2016 Equity and Cash Incentive Plan
or such other plan, to the extent applicable, including without limitation with
respect to the maximum dollar amount of the Bonus Awards that may be paid to any
Participant with respect to any particular time period. Any Bonus Awards or
portions thereof that do not constitute Awards (as defined therein) under
EarthLink’s 2011 Equity and Cash Incentive Plan, EarthLink’s 2016 Equity and
Cash Incentive Plan or such other plan shall be deemed separate Bonus Awards
that are granted under this Plan but outside of EarthLink’s 2011 Equity and Cash
Incentive Plan, EarthLink’s 2016 Equity and Cash Incentive Plan or any other
such plan.
(d)    Negative Discretion. Notwithstanding any other provision of the Plan, the
Participant’s Individual Performance Factor may be reduced to less than two
hundred percent (200%), but not below zero (0), if the Participant’s individual
performance for the Bonus Period falls below that expected of such Participant.
Management may determine, for Participants who are not Management Participants,
if any such Participant’s Individual Performance Factor should be reduced based
upon Management’s assessment of the Participant’s individual performance for the
Bonus Period. The Committee shall determine in its discretion whether any
Individual Performance Factor for any Management Participant should be reduced
based upon the Committee’s assessment of the Management Participant’s individual
performance for the Bonus Period. Any reduction of a Participant’s Individual
Performance Factor under this Section 5.2(d) shall be at the sole and absolute
discretion of the Committee.
(e)    Reduction of Maximum Individual Bonuses. Unless the Committee
specifically provides otherwise, in no event will the sum of all Individual
Bonuses to be paid under the Plan for the Bonus Period exceed the sum of all
Individual Bonuses that would be paid under the Plan based on Individual
Performance Factors of one hundred percent (100%) for all Participants. So, it
generally is expected that some or all Participants’ Individual Bonuses will be
reduced as necessary in order to satisfy the foregoing limitation. To the extent
one or more Participants are to receive Individual Bonuses that exceed the sum
of such Participants’ Individual Bonuses based on Individual Performance Factors
in excess of one hundred percent (100%), one or more other Participants
generally will have to receive Individual Bonuses based on Individual
Performance Factors less than one hundred percent (100%). If the total of all
Individual Bonuses to be paid under the Plan for the Bonus Period, after
reductions by the Committee, still exceed the sum of all Individual Bonuses that
would be paid under the Plan based on Individual Performance Factors of one
hundred percent (100%) for all Participants for the Bonus Period, unless the
Committee specifically provides otherwise, all Individual Bonuses will be
reduced, pro rata, but not below zero (0), as necessary to satisfy such
limitation. Notwithstanding the foregoing, the Committee may provide that one or
more Participant’s Individual Bonuses may be based on Individual Performance
Factors in excess of one hundred percent (100%) without a corresponding
reduction in the Individual Bonuses and Individual Performance Factors of other
Participants.
6.    PAYMENT OF AWARDS
6.1    Eligibility for Payment. Except as otherwise set forth in Sections 7.1
and 8.1 of this Plan, Bonus Awards shall not be paid to any Participant who is
not employed by an Employer on the date the Distribution is to be made, and a
Participant who terminates employment with all Employers shall not be eligible
to receive any Distribution for (i) the Bonus Period that includes such
termination of employment, (ii) any prior Bonus Period to the extent not paid
before such termination of employment nor (iii) any future Bonus Periods.
6.2    Timing of Payment. Any Distribution to be paid for a Bonus Period shall
be paid no later than the 15th day of the third month following the end of the
Bonus Period.
6.3    Payment of Award. The amount of the Bonus Award to be paid pursuant to
this Section 6 to a Participant who is employed by the Company shall be paid in
one lump sum cash payment by the Employer.
6.4    Taxes; Withholding. To the extent required by law, the Employer shall
withhold from all Distributions made hereunder any amount required to be
withheld by Federal and state or local government or other applicable laws. Each
Participant shall be responsible for satisfying in cash or cash equivalent
acceptable to the Committee any income and employment tax withholdings
applicable to any Distribution to the Participant under the Plan.
7.    CHANGE IN CONTROL
7.1    Payment upon Termination of Employment on or after a Change in Control.
If at any time on or after a Change in Control occurs the Participant’s
employment with all Employers is terminated by an Employer for any reason other
than Cause, death or Disability, then, the Participant shall be entitled to
receive for the Bonus Period that includes the date of the Participant’s
termination of employment the Bonus Award that would result based on actual
business results for the entire Bonus Period taking into account the Corporate
Performance Objectives achieved during the Bonus Period, calculated on the same
basis as other similarly-situated Participants, and assuming for each Management
Participant an Individual Bonus based on an Individual Performance Factor of no
less than one hundred percent (100%), or such greater or lesser percent if
established prior to the Change in Control, except that the Bonus Award for that
Bonus Period shall be based solely upon the Participant’s Compensation for that
Bonus Period through the time of termination of employment; provided, however,
that Participant shall only be entitled to receive such Bonus Award for the
Bonus Period that includes the date of the Participant’s termination of
employment if the Participant’s termination of employment occurs after the first
calendar quarter of the Bonus Period and prior to payment of the Bonus Award for
the Bonus Period in which the Participant’s employment is so terminated. Each
Participant described above also shall be entitled to receive any Bonus Award
payable for any Bonus Period that ended before the termination of the
Participant’s employment on the same basis as the Bonus Award for the Bonus
Period that includes the date of the Participant’s termination of employment.
Such Bonus Awards shall be paid at the normal time of the bonus payout as if the
Participant had remained employed but in no event later than the 15th day of the
third month following the end of the Bonus Period. If at any time on or after a
Change in Control occurs the Participant’s employment with all Employers is
terminated by an Employer for any reason other than Cause, death or Disability,
the Participant shall not be entitled to receive a Bonus Award for the Bonus
Period that includes the date of the Participant’s termination of employment if
the Participant’s termination of employment occurs during the first calendar
quarter of the Bonus Period.
8.    TERMINATION OF EMPLOYMENT
8.1    Payment after Termination of Employment. If before a Change in Control
occurs the Participant’s employment with all Employers is terminated by an
Employer, such that the Participant is entitled to receive benefits under any
severance plan maintained by an Employer, or pursuant to any agreement between
the Employer and the Participant, then, if the Participant’s employment is
terminated by an Employer after the first calendar quarter of the Bonus Period
and prior to payment of the Bonus Award for the Bonus Period in which the
Participant’s employment is terminated, the Participant shall be entitled to
receive for the Bonus Period that includes the date of the Participant’s
termination of employment the Bonus Award that would result based on actual
business results for the entire Bonus Period, taking into account the Corporate
Performance Objectives achieved during the Bonus Period, and actual individual
performance levels achieved for the entire Bonus Period, calculated on the same
basis as other similarly-situated Participants, except that the Bonus Award for
that Bonus Period shall be based solely upon the Participant’s Compensation for
that Bonus Period through the time of termination of employment. Each
Participant described above also shall be entitled to receive any Bonus Award
payable for any Bonus Period that ended before the termination of the
Participant’s employment on the same basis as the Bonus Award for the Bonus
Period that includes the date of the Participant’s termination of employment.
Such Bonus Awards shall be paid at the normal time of the bonus payout as if the
Participant had remained employed but in no event later than the 15th day of the
third month following the end of the Bonus Period. If before a Change in Control
occurs the Participant’s employment with all Employers is terminated by an
Employer, such that the Participant is entitled to receive benefits under any
severance plan maintained by an Employer, if the Participant’s employment is
terminated by an Employer during the first calendar quarter of the Bonus Period,
the Participant shall not be entitled to receive any Bonus Award for the Bonus
Period that includes the date of the Participant’s termination of employment.
9.    MISCELLANEOUS
9.1    Unsecured General Creditor. Participants and their beneficiaries, heirs,
successors and assigns shall have no legal or equitable rights, interests, or
other claim in any property or assets of the Employer. Any and all assets shall
remain general, unpledged, unrestricted assets of the Employer. The Employer’s
obligation under the Plan shall be that of an unfunded and unsecured promise to
pay cash or shares of Common Stock in the future, and there shall be no
obligation to establish any fund, any security or any other restricted asset in
order to provide for the payment of amounts under the Plan.
9.2    Obligations to the Employer. If a Participant becomes entitled to a
Distribution under the Plan, and, if, at the time of the Distribution, such
Participant has outstanding any debt, obligation or other liability representing
an amount owed to any Employer, then the Employer may offset such amounts owing
to it or any other Employer against the amount of any Distribution. Such
determination shall be made by the Committee. Any election by the Committee not
to reduce any Distribution payable to a Participant shall not constitute a
waiver of any claim for any outstanding debt, obligation, or other liability
representing an amount owed to the Employer.
9.3    Nonassignability. Neither a Participant nor any other person shall have
any right to commute, sell, assign, transfer, pledge, anticipate, mortgage or
otherwise encumber, transfer, hypothecate or convey in advance of actual receipt
the amounts, if any, payable hereunder, or any part thereof, which are, and all
rights to which are, expressly declared to be unassignable and nontransferable.
No part of a Distribution, prior to actual Distribution, shall be subject to
seizure or sequestration for the payment of any debts, judgments, alimony or
separate maintenance owed by a Participant or any other person, nor shall it be
transferable by operation of law in the event of the Participant’s or any other
persons bankruptcy or insolvency, except as set forth in Section 9.2 above.
9.4    Employment or Future Pay or Compensation Not Guaranteed. Nothing
contained in this Plan nor any action taken hereunder shall be construed as a
contract of employment or as giving any Participant or any former Participant
any right to be retained in the employ of an Employer or receive or continue to
receive any rate of pay or other compensation, nor shall it interfere in any way
with the right of an Employer to terminate the Participant’s employment at any
time without assigning a reason therefore.
9.5    Gender, Singular and Plural. All pronouns and any variations thereof
shall be deemed to refer to the masculine, feminine, or neuter, as the identity
of the person or persons may require. As the context may require, the singular
may be read as the plural and the plural as the singular.
9.6    Captions. The captions to the articles, sections, and paragraphs of this
Plan are for convenience only and shall not control or affect the meaning or
construction of any of its provisions.
9.7    Applicable Law. This Plan shall be governed and construed in accordance
with the laws of the State of Georgia.
9.8    Validity. In the event any provision of the Plan is held invalid, void,
or unenforceable, the same shall not affect, in any respect whatsoever, the
validity of any other provision of the Plan.
9.9    Notice. Any notice or filing required or permitted to be given to the
Committee shall be sufficient if in writing and hand delivered, or sent by
registered or certified mail, to the principal office of EarthLink, directed to
the attention of the President and CEO of EarthLink. Such notice shall be deemed
given as of the date of delivery or, if delivery is made by mail, as of the date
shown on the postmark on the receipt for registration or certification.
9.10    Compliance. No Distribution shall be made hereunder except in compliance
with all applicable laws and regulations (including, without limitation,
withholding tax requirements), any listing agreement with any stock exchange to
which EarthLink is a party, and the rules of all domestic stock exchanges on
which EarthLink’s shares of capital stock may be listed. The Committee shall
have the right to rely on an opinion of its or EarthLink’s counsel as to such
compliance. No Distribution shall be made hereunder unless the Employer has
obtained such consent or approval as the Employer may deem advisable from
regulatory bodies having jurisdiction over such matters.
9.11    No Duplicate Payments. The Distributions payable under the Plan are the
maximum to which the Participant is entitled in connection with the Plan. To the
extent the Participant and the Employer are parties to any other agreements or
arrangements relating to the Participant’s employment that provide for payments
of any bonuses under this Plan on termination of employment, this Plan shall be
construed and interpreted so that the Bonus Awards and Distributions payable
under the Plan and such other agreements or arrangements are only paid once; it
being the intent of this Plan not to provide the Participant any duplicative
payments of Bonus Awards. To the extent a Participant is entitled to a bonus
payment calculated under this Plan and under any other agreement or arrangement,
which would result in a duplicative payment of the Bonus Award or Distribution,
no Bonus Award or Distribution will be payable hereunder if the payment under
the other agreement or arrangement is not reduced by any duplicative payment
under this Plan.
9.12    Confidentiality. The terms and conditions of this Plan and the
Participant’s participation hereunder shall remain strictly confidential. The
Participant may not discuss or disclose any terms of this Plan or its benefits
with anyone except for Participant’s 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.
9.13    Temporary Leaves of Absence. The Committee in its sole discretion may
decide to what extent leaves of absence for government or military service,
illness, temporary disability or other reasons shall, or shall not be, deemed an
interruption or termination of employment.
9.14    Compensation Recoupment Policy. Notwithstanding any other provision of
this Plan, any Bonus Award received by the Participant and/or shares of Common
Stock issued and/or cash paid hereunder, and/or any amount received with respect
to any sale of any such shares of Common Stock, shall be subject to potential
cancellation, recoupment, rescission, paycheck or other action in accordance
with the terms of EarthLink’s Compensation Recoupment Policy, as it may be
amended from time to time. By acceptance of the Bonus Award, the Participant
agrees and consents to EarthLink’s application, implementation and enforcement
of (a) the Compensation Recoupment Policy or any similar policy established by
EarthLink or any Affiliate that may apply to the Participant and (b) any
provision of applicable law relating to cancellation, rescission, payback or
recoupment of compensation, and expressly agrees that EarthLink may take such
actions as are necessary to effectuate the Compensation Recoupment Policy, any
similar policy (as applicable to the Participant) or applicable law without
further consent or action being required by the Participant. To the extent that
the terms of this Plan and the Compensation Recoupment Policy or any similar
policy conflict, then the terms of such policy shall prevail.
10.    AMENDMENT AND TERMINATION OF THE PLAN
10.1    Amendment. Except as set forth in Section 10.3 below, the Committee in
its sole discretion may at any time amend the Plan in whole or in part.
10.2    Termination of the Plan.
(a)    Employer’s Right to Terminate. Except as set forth in Section 10.3 below,
the Committee may at any time terminate the Plan, if it determines in good faith
that the continuation of the Plan is not in the best interest of EarthLink and
its shareholders. No such termination of the Plan shall reduce any Distributions
already made.
(b)    Payments upon Termination of the Plan. Upon the termination of the Plan
under this Section, Awards for future Bonus Periods shall not be made. With
respect to the Bonus Period in which such termination takes place, the Employer
will pay to each Participant the Participant’s Bonus Award, if any, for such
Bonus Period, less any applicable withholdings, only to the extent the Committee
provides for any such payments on termination of the Plan (in which case all
such payments will be made no later than the 15th day of the third month
following the end of the Bonus Period that includes the effective date of
termination of the Plan).
10.3    Amendment or Termination after a Change in Control. Notwithstanding any
other provision of the Plan, the Committee may not amend or terminate the Plan
in whole or in part, or change eligibility for participation in the Plan, on or
after a Change in Control to the extent any such amendment or termination, or
change in eligibility for participation in the Plan, would adversely affect the
Participants’ rights hereunder or result in Bonus Awards not being paid
consistent with the terms of the Plan in effect prior to such amendment or
termination for the Bonus Period in which the amendment or termination of the
Plan takes place and any prior Bonus Period, and assuming for each Management
Participant an Individual Bonus based on an Individual Performance Factor of no
less than one hundred percent (100%), or such greater or lesser percent if
established prior to the Change in Control, for any such Bonus Period.
11.    COMPLIANCE WITH SECTION 409A
11.1    Tax Compliance. This Plan is intended to be exempt from the applicable
requirements of Section 409A of the Code and shall be construed and interpreted
in accordance therewith. The Committee may at any time amend, suspend or
terminate this Plan, or any payments to be made hereunder, as necessary to be
exempt from Section 409A of the Code. Notwithstanding the preceding, no Employer
shall 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 Bonus Award or Distribution to be made under
this Plan is subject to taxes, penalties or interest as a result of failing to
comply with Section 409A of the Code. The Distributions under the Plan are
intended to satisfy the exemption from Section 409A of the Code for “short-term
deferrals.”
12.    CLAIMS PROCEDURES
12.1    Filing of Claim. If a Participant becomes entitled to a Bonus Award or a
Distribution has otherwise become payable, and the Participant has not received
the benefits to which the Participant believes he is entitled under such Bonus
Award or Distribution, then the Participant must submit a written claim for such
benefits to the Committee within ninety (90) days of the date the Bonus Award
would have become payable (assuming the Participant is entitled to the Bonus
Award) or the claim will be forever barred.
12.2    Appeal of Claim. If a claim of a Participant is wholly or partially
denied, the Participant or his duly authorized representative may appeal the
denial of the claim to the Committee. Such appeal must be made at any time
within thirty (30) days after the Participant receives written notice from the
Committee of the denial of the claim. In connection therewith, the Participant
or his duly authorized representative may request a review of the denied claim,
may review pertinent documents and may submit issues and comments in writing.
Upon receipt of an appeal, the Committee shall make a decision with respect to
the appeal and, not later than sixty (60) days after receipt of such request for
review, shall furnish the Participant with a decision on review in writing,
including the specific reasons for the decision, as well as specific references
to the pertinent provisions of the Plan upon which the decision is based.
Notwithstanding the foregoing, if the Committee has not rendered a decision on
appeal within sixty (60) days after receipt of such request for review, the
Participant’s appeal shall be deemed to have been denied upon the expiration of
the sixty (60)-day review period.
12.3    Final Authority. The Committee has discretionary and final authority
under the Plan to determine the validity of any claim. Accordingly, any decision
the Committee makes on the Participant’s appeal shall be final and binding on
all parties. If a Participant disagrees with the Committee’s final decision, the
Participant may bring suit, but only after the claim on appeal has been denied
or deemed denied. Any such lawsuit must be filed within ninety (90) days of the
Committee’s denial (or deemed denial) of the Participant’s claim or the claim
will be forever barred.
13.    COMPLIANCE WITH SECTION 162(M)
13.1    Section 162(m) Compliance. It is the intent of the Company that the Plan
and any Bonus Awards payable under the Plan to Participants who are or may
become persons whose compensation is subject to Section 162(m) of the Code and
that are intended to constitute qualified performance-based compensation satisfy
any applicable requirements of Section 162(m) of the Code to qualify as
qualified performance-based compensation. Any provision, application or
interpretation of the Plan inconsistent with this intent shall be disregarded or
deemed to be amended to the extent necessary to conform to such requirements.
Bonus Awards may only become payable if the applicable Corporate Performance
Objectives are achieved. No Bonus Awards may become payable if the applicable
threshold levels of the Corporate Performance Objectives are not achieved, and
the Maximum Bonus Award that can become payable to any Participant for any Bonus
Period is based on the applicable levels of the Corporate Performance Objectives
that are achieved. Any Bonus Award that is intended to constitute qualified
performance-based compensation that is only nominally or partially contingent on
achieving the Corporate Performance Objectives may not be awarded under the
Plan. However, an Employer may pay a bonus, or other types of compensation,
inside or outside the Plan, which may or may not be deductible. In no event,
however, may any Management Participant be entitled to a Bonus Award under the
Plan under two arrangements, where payment of the other bonus that is not
intended to be qualified performance-based compensation is contingent upon the
failure to meet the Corporate Performance Objectives upon which the
Participant’s Bonus Award that is intended to constitute qualified
performance-based compensation is based. The provisions of the Plan may be
bifurcated by the Committee at any time, so that certain provisions of the Plan
required in order to satisfy the requirements of Section 162(m) of the Code are
only applicable to Participants whose compensation is subject to 162(m) of the
Code.

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