Exhibit 10.1


 


AMENDED AND RESTATED


EMPLOYMENT AGREEMENT


 


THIS AMENDED AND RESTATED
EMPLOYMENT AGREEMENT (this “Agreement”) between EARTHLINK, INC., a Delaware
corporation (the “Company”), and ROLLA HUFF (referred to herein as “You”) is
entered into on December 30, 2008. 
This Agreement amends, restates and supersedes the Employment Agreement
between the Company and You dated June 25, 2007 (the “Previous Agreement”).


 


RECITALS


 


1.                                       The Company is engaged in the business of providing
integrated communication services and related value added services to
individual consumers and business customers throughout the States of the United
States; and


 


2.                                       The Company previously determined that, in view of Your
knowledge, expertise and experience in the integrated communication services
and related value-added services industries, Your services as the Chief
Executive Officer and President of the Company would be of great value to the
Company, and accordingly, the Company desired to enter into the Previous
Agreement with You on the terms set forth therein in order to secure Your
services; and


 


3.                                       You desired to serve as the Chief Executive Officer and
President of the Company on the terms set forth in the Previous Agreement; and


 


4.                                       The Company and You now desire to amend and restate the
Previous Agreement, as set forth herein, to address Section 409A of the
Code (as defined below) and the final regulations issued thereunder.


 


NOW,
THEREFORE, in consideration of Your employment by the Company,
the above premises and the mutual agreements hereinafter set forth, You and the
Company agree as follows:


 


1.                      Definitions.


 


(a)                                                  “Affiliate” means any trade or business with whom the
Company would be considered a single employer under Sections 414(b) or 414(c) of
the Code (except that, for purposes of determining Your Termination of
Employment, the language “at least fifty percent (50%)” shall be used instead
of “at least eighty percent (80%)” each place it appears in Sections 414(b) or
414(c) of the Code).


 


(b)                                                 “Beneficial Ownership” means beneficial ownership as
that term is used in Rule 13d-3 promulgated under the Securities Exchange
Act of 1934, as amended.


 


(c)                                                  “Business Combination” means a reorganization, merger
or consolidation of the Company.


 

















 


(d)                                                 “Business of the Company” means the business of
providing integrated communication services and related value added services to
individual consumers and business customers.


 


(e)                                                  “Cause” means (i) Your commission of any act of
fraud or dishonesty relating to and adversely affecting the business affairs of
the Company; (ii) Your conviction of any felony; or (iii) Your
willful and continued failure to perform substantially Your duties owed to the
Company after written notice specifying the nature of such non-performance and
a reasonable opportunity to cure such non-performance.  No act or omission shall be considered “willful”
unless it is done or omitted in bad faith or without reasonable belief that the
action or omission was in the best interests of the Company.


 


(f)                                                    “Change in Control Event” of the Company 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 Company’s Voting Stock; provided that for purposes of this
subparagraph (1), a Change in Control Event will not be deemed to have occurred
if the accumulation of more than fifty percent (50%) of the voting power of the
Company’s Voting Stock results from any acquisition of Voting Stock (a) by
the Company, (b) by any employee benefit plan (or related trust) sponsored
or maintained by the Company or any Affiliate, or (c) 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 Company immediately prior to that
Business Combination beneficially own, directly or indirectly, more than fifty
percent (50%) of the then outstanding shares of common stock and more than
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 Company or all or
substantially all of the Company’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
common stock and Voting Stock of the Company, 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 


 


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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 Company, except
pursuant to a Business Combination that complies with clauses (a) and (b) of
subparagraph (2) above; or


 


(4)                                  Approval by the shareholders
of the Company of a complete liquidation or dissolution of the Company, except
pursuant to a Business Combination that complies with clauses (a) and (b) of
subparagraph 2 above.


 


(g)                                                 “Code” means the Internal Revenue Code of 1986, as
amended, and any regulations promulgated thereunder.


 


(h)                                                 “Company” shall mean EarthLink, Inc.


 


(i)                                                     “Confidential Information” means any and all
non-public information concerning, relating to and/or in the possession of the
Company and/or its Affiliates and/or the Business of the Company treated as
confidential or secret by the Company and/or its Affiliates (that is, such
business information is subject to efforts by the Company and/or its Affiliates
that are reasonable under the circumstances to maintain its secrecy) that does
not constitute a Trade Secret, including, without limitation, information
concerning the Company’s or an Affiliate’s financial position and results of
operations (including revenues, assets, net income, etc.), annual and long
range business plans, product and service plans, marketing plans and methods,
employee lists and information, in whatever form and whether or not computer or
electronically accessible.


 


(j)                                                     “Eligible Earnings” has the same meaning given to
that term in the Company’s bonus plan and payroll policies.


 


(k)                                                  “Good Reason” means, with respect to Your Termination
of Employment, any of the following acts or omissions that are not cured within
thirty (30) days after written notice of such act or omission is delivered to
the Company, the Chairman of the Board of Directors and the Chairman of the
Leadership and Compensation Committee of the Board of Directors (which notice
must be given no later than ninety (90) days after the initial occurrence of
such event):


 


(1)                                  without Your
express written consent (i) the assignment to You of any duties materially
inconsistent in any respect with Your position, authority, duties or
responsibilities as contemplated by Section 2, (ii) the requirement
by the Company that You report to any officer or employee other than directly
to the Board of Directors of the Company, or (iii) any other action by the
Company that results in a significant diminution in such position, authority,
duties or responsibilities, provided, however, that, without limiting the
foregoing, the occurrence of a Non-Public Change in Control Event
(regardless of your consent thereto) shall in and of itself be deemed to result
in a significant diminution in 


 


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your position, authority, duties and/or
responsibilities as contemplated by Section 2;


 


(2)                                  without Your
express written consent, any failure by the Company to comply in any material
respect with any of the provisions of Section 4(a), (b) and (d) of
this Agreement;


 


(3)                                  any requirement
that You relocate outside of, or any relocation of the Company’s principal
executive office outside of, the metropolitan area of Atlanta, Georgia; or


 


(4)                                  any breach by
the Company of any other material provision of this Agreement.


 


A termination by You shall not constitute termination for Good Reason
unless You resign within two (2) years after the initial occurrence of
such uncured event.


 


(l)                                                     “Incumbent Board” means a Board of Directors
consisting of individuals who either are (a) members of the Company’s
Board of Directors on the date hereof or (b) members who become members of
the Company’s Board of Directors subsequent to the date hereof whose election,
or nomination for election by the Company’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 Company 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 actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board of Directors.


 


(m)                                               “Non-Public Change in Control Event” means any
Change in Control Event that is not a Public Change in Control Event.


 


(n)                                                 “Person” means any individual, entity or group within
the meaning of Section 13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934, as amended.


 


(o)                                                 “Public Change in Control Event” means any Change in
Control Event as defined in clause (f) above where (i) the Person that
accumulates Beneficial Ownership of more than fifty percent (50%) of the
combined voting power of the Company’s Voting Stock has, or such Person is a
direct or indirect subsidiary of a Person that has, a class of common stock (or
depositary receipts or other certificates representing common equity interests)
traded on a U.S. national securities exchange or quoted on NASDAQ or another
established over-the-counter trading market in the United States or which will
be so traded or quoted when issued or exchanged in connection with such Change
in Control Event or (ii) upon the consummation of such Change in Control
Event, the Voting Stock of the Company will remain trading 


 


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on a U.S.
national securities exchange or quoted on NASDAQ or another established
over-the-counter trading market in the United States.


 


(p)                                                 “Specified Employee” means an employee who is (i) an
officer of the Company or an Affiliate having annual compensation greater than
$145,000 (with certain adjustments for inflation after 2008), (ii) a
five-percent owner of the Company or (iii) a one-percent owner of the
Company 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, (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 Company or an Affiliate (except as otherwise
provided in regulations issued under the Code) or (v) who have not
completed six months of service shall be excluded for purposes of determining
the number of officers for this determination. 
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 Company or stock possessing more than five percent
(one percent) of the total combined voting power of all stock of the
Company.  For purposes of determining
ownership, the attribution rules of Section 318 of 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 You
are a Specified Employee will be based on a December 31 identification
date such that if You satisfy the above definition of Specified Employee at any
time during the 12-month period ending on December 31, You will be treated
as a Specified Employee if You have 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.


 


(q)                                                 “Termination of Employment” means the termination of
Your employment and service with the Company and all Affiliates.  You will not be considered as having had a
Termination of Employment if (i) You continue to provide services to the
Company or any Affiliate as an employee or independent contractor at an annual
rate that is more than 20 percent of the services rendered, on average, during
the immediately preceding 36 months of employment (or, if employed less than 36
months, such lesser period) or (ii) You are on military leave, sick leave
or other bona fide leave of absence so long as the period of such leave does
not exceed six months, or if longer, so long as Your right to reemployment with
the Company or any Affiliate is provided either by statute or by contract.  If the period of leave (i) ends or (ii) exceeds
six months and Your right to reemployment is not provided either by statute or
by contract, the Termination of Employment will be deemed to occur on the first
date immediately following such six-month period if not reemployed by the
Company or any Affiliate before such time and eligibility for 


 


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payments
and benefits hereunder will be determined as of that time.  Termination of Employment shall be construed
consistent with the meaning of a “separation from service” under Section 409A
of the Code.


 


(r)                                                    “Total Disability” means Your inability, through
physical or mental illness or accident, to perform the majority of Your usual
duties and responsibilities hereunder (as such duties are constituted on the
date of the commencement of such disability) in the manner and to the extent
required under this Agreement for a period of at least ninety (90) consecutive
days.  Total Disability shall be deemed
to have occurred on the first day following the expiration of such ninety (90)
day period.


 


(s)                                                  “Trade Secrets”
means any and all information concerning, relating to and/or in the possession
of, the Company and/or its Affiliates and/or the Business of the Company that
qualifies as a trade secret as defined by the laws of the State of Georgia on
the date of this Agreement and as such laws are amended from time to time
thereafter.


 


(t)                                                    “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.


 


2.                      Employment; Duties.


 


(a)                                                  The Company agrees to employ You as Chief Executive Officer
and President of the Company with the duties and responsibilities generally
associated with such position and such other reasonable additional
responsibilities and positions as may be added to Your duties from time to time
by the Board of Directors consistent with Your position.


 


(b)                                                 During Your employment hereunder, You shall (i) diligently
follow and implement all Company employee policies and all management policies
and decisions communicated to You by the Board of Directors; and (ii) timely
prepare and forward to the Board of Directors all reports and accountings as
may be reasonably requested of You.


 


3.                     Term.  The term hereof commenced on June 25, 2007, shall
continue for a period of three (3) years from such date and shall be
automatically extended from year-to-year thereafter unless terminated in
accordance with Section 6 hereof (the “Term”).


 


4.                      Compensation.


 


(a)                                                  (1)  You shall be paid an annual base salary of not
less than Eight Hundred Thousand Dollars ($800,000) per year (the “Base Salary”).  The Base Salary shall accrue and be due and payable
in equal, or as nearly equal as practicable, biweekly installments and the
Company may deduct from each such installment all amounts required to be
deducted and withheld in accordance with applicable federal and state income,
FICA and other withholding tax requirements.


 


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(2)  The Base Salary shall be reviewed
by the Board of Directors at least once during each year of the Term and may be
increased from time to time and at any time by the Board of Directors.  The Base Salary shall in no event be reduced
or decreased below the highest level attained at any time by You, unless You
and the Board of Directors agree to implement a salary reduction program for
cost abatement purposes.


 


(3)  As the Term begins on other than
the first business day of a calendar month and as the Term hereof shall
terminate on other than the last day of a calendar month, Your compensation for
such month shall be prorated according to the number of days during such month
that occur within the Term.


 


(b)                                                 For each fiscal year of the Company, You shall be entitled
to receive an annual target bonus opportunity in an amount equal to one hundred
percent (100%) of Your Eligible Earnings (the “Annual Target Bonus”), with the
ability to earn 50 percent (50%) (threshold) to One Hundred Fifty Percent
(150%) (maximum) of Your Annual Target Bonus if the bonus criteria for such
annual period, as set by the Board of Directors of the Company, are satisfied
(the “Target Bonus Payment”); provided that if such bonus criteria are not
satisfied, no Annual Target Bonus shall be payable.  The criteria to earn Your Annual Target Bonus
and other levels between the threshold and maximum for each year of the Term
shall be based upon good faith negotiations between You and the Board of
Directors.  All Target Bonus Payments
that become payable shall be paid to You in accordance with the applicable
bonus plan but in no event later than 21⁄2 months after the end of the fiscal year
of the Company to which Your Target Bonus Payments relate.


 


(c)                                                  While You are performing the services described herein, the
Company shall reimburse You for all reasonable and necessary expenses incurred
by You in connection with the performance of Your duties of employment
hereunder in accordance with the Company’s expense reimbursement policy, as
applied to the Company’s executive officers, as soon as administratively
practicable but no later than 2 1⁄2 months after the end of the year in which You
incur the reimbursable expense.


 


(d)                                                 Pursuant to this Section 4(d), You shall participate in
the Change-In-Control Accelerated Vesting and Severance Plan amended and
restated effective December 15, 2008 and any plan(s) or program(s) that
supersede, replace and/or supplement such plan, as in effect from time to time
(the “AV/SP”), at the highest and most beneficial level of participation
provided under the AV/SP.  With respect
to each individual benefit, or category of similar benefit, provided to You
under each of the AV/SP and this Agreement, the two (2) benefits shall not
be cumulative, and You shall be entitled to receive each such benefit, or
category of benefit, under the terms of the AV/SP or the terms of this
Agreement, whichever would be the greater amount or value to You, except that
the timing and manner of payment of such benefits shall be consistent with the
terms of this Agreement, regardless of whether the amount or value of the
benefits You are entitled to receive are determined under the AV/SP or this
Agreement.  The restrictions on cumulation
of benefits in this Section 4(d), and the application of the terms of the
AV/SP to 


 


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benefits
provided thereunder, shall not apply to Your right to qualify for and
participate in the AV/SP at the highest and most beneficial level of
participation.


 


(e)                                                  You shall receive paid vacation during each twelve (12)
month period of Your employment in accordance with the Company’s vacation
policy.  To the extent that You do not
use Your accrued vacation during such twelve (12) month period, any remaining
accrued vacation shall be subject to the carryover restrictions applicable in
the Company’s normal vacation policies.


 


5.                     Equity Rights.


 


(a)                                                  Upon execution of the Previous Agreement, You received
100,000 RSUs which shall vest in accordance with the terms of the EarthLink, Inc.
2006 Equity and Cash Incentive Plan, with 50,000 RSUs vesting on June 25,
2009, 25,000 RSUs vesting on June 25, 2010 and 25,000 RSUs vesting on June 25,
2011, assuming Your continued employment until each such time, or as otherwise
vested pursuant to Section 6.  Upon execution of the Previous
Agreement, You also received (1) 700,000 stock options which vested as of September 30,
2007 and (ii) 800,000 stock options which vest over a period of four years
in accordance with the terms of the EarthLink, Inc. 2006 Equity and Cash
Incentive Plan, with 300,000 stock options vesting on December 31, 2008
and the remaining 500,000 stock options vesting on a monthly basis between January 1,
2009 and June 25, 2011, assuming Your continued employment until each such
time, or as otherwise vested pursuant to Section 6.


 


(b)                                                 The stock options and restricted stock units granted by the
Company to You from time to time are hereinafter collectively called the “Stock
Options and RSUs.”  You shall be given
the period permitted under Your respective Stock Option agreements, which shall
contain the material terms provided in the form attached to this Agreement, to
exercise Your Stock Options after Your termination of employment.


 


(c)                                                  Vested Stock Options shall be exercisable for ninety (90)
days following termination of employment, provided that if You are prohibited
from exercising vested stock options during such ninety (90) day period due to
having material non-public information about the Company, such exercise period
shall be extended until ten (10) days following the date that You no
longer have material non-public information about the Company, but in no event
shall the vested Stock Options be exercisable beyond their latest expiration
date as set forth in the respective Stock Option agreements.


 


6.                      Termination.


 


(a)                                                  A Termination of Employment shall occur only as follows:


 


(1)                                  For Cause immediately by the
Company; or


 


(2)                                  At Your option for Good
Reason; or


 


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(3)                                  At Your option upon thirty
(30) days prior written notice of termination delivered by You to the Company;
or


 


(4)                                  For any reason by the
Company upon three (3) calendar months prior written notice of termination
delivered to You, except during a period of Your disability that may qualify as
the period for qualification for Your Termination of Employment due to Your
Total Disability as set forth in Section 6(a)(6); or


 


(5)                                  By the Company upon Your
death; or


 


(6)                                  By the Company because of
Your Total Disability upon thirty (30) days prior written notice of termination
delivered to You.


 


(b)                                                 If You have a Termination of Employment that is (i) by
the Company for other than “Cause,” Your death or Your Total Disability, or (ii) by
You for “Good Reason,” You shall be paid an amount equal to (a) two
hundred percent (200%) of the sum of (i) Your Base Salary as of the
effective date of Your Termination of Employment and
(ii) Your Annual Target Bonus for the year in which Your Termination of
Employment occurs, less (b) the amount of the Non-Compete Payment.  Subject to Section 19
below, such amount shall be paid in a lump sum as
soon as administratively practicable (and within thirty (30) days) after Your Termination of Employment.  In the event of such Termination of
Employment, You shall become immediately vested in all Your outstanding Stock
Options and RSUs, and for eighteen (18) months following Termination of
Employment the Company shall pay, no less frequently than monthly, all costs of
health care continuation coverage for which You and Your spouse and dependents
are eligible under the Consolidated Omnibus Budget Reconciliation Act of 1986.


 


(c)                                                  If You have a Termination of Employment on account of Your
death or Your Total Disability, You shall be paid (i) one hundred percent
(100%) of Your Base Salary as of the effective date of Your Termination of
Employment, such amount to be paid in a lump sum as
soon as administratively practicable (and within thirty (30) days) after Your Termination of Employment (subject to any delay in
payments that may be required by Section 19), and (ii) Your Annual
Target Bonus for the year in which Your Termination of Employment occurs, such
Annual Target Bonus to be determined in accordance with Section 4(b) and
to be payable in accordance with the last sentence of Section 4(b).


 


(d)                                                 If You have a Termination of Employment by the Company for
Cause or by You for reasons other than for “Good Reason,” the Company will have
no obligations to pay You any amount beyond the effective date of such
Termination of Employment whether as Base Salary, Annual Target Bonus or
otherwise or to provide You with any benefits arising hereunder or otherwise
except as required by law.


 


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7.                     Confidential Information and
Trade Secrets.  You
acknowledge that the nature of Your engagement by the Company is such that You
shall have access to the Confidential Information and the Trade Secrets, each
of which has great value to the Company, provides the Company a competitive
advantage, and constitutes the foundation upon which the Business of the
Company is based.  You agree to hold all
of the Confidential Information and the Trade Secrets in confidence and to not
use, disclose, publish or otherwise disseminate any of such Confidential
Information and the Trade Secrets to any other person, except to the extent
such disclosure is (i) necessary to the performance of this Agreement and
in furtherance of the Company’s best interests, (ii) required by applicable
law, (iii) as a result of portions of the Confidential Information and/or
the Trade Secrets becoming lawfully obtainable from other sources, (iv) authorized
in writing by the Company, or (v) necessary to enforce this
Agreement.  The restrictions set forth in
this Section 7 shall remain in full force and effect (a) with respect
to the Confidential Information, for the three (3) year period following
the effective date of Your Termination of Employment, and with respect to the
Trade Secrets, until the Trade Secrets no longer retain their status or qualify
as trade secrets under applicable law. 
Upon Your Termination of Employment, You shall deliver to the Company
all documents, records, notebooks, work papers, and all similar material
containing Confidential Information and Trade Secrets, whether prepared by You,
the Company or anyone else.


 


8.                      Inventions and Patents.  All inventions, designs, improvements, patents, copyrights
and discoveries conceived by You during the term of this Agreement which are
useful in or directly or indirectly relate to the business of the Company or to
any experimental work carried on by the Company, shall be the property of the
Company.  You agree to promptly and fully
disclose to the Company all such inventions, designs, improvements, patents,
copyrights and discoveries (whether developed individually or with other
persons) and at the Company’s expense, to take all steps necessary and
reasonably required to assure the Company’s ownership thereof and to assist the
Company in protecting or defending the Company’s proprietary rights therein.


 


9.                      Restrictive Covenants.


 


(a)                                                  Non-Competition.  You agree that during Your employment, and
for a period of eighteen (18) calendar months following Termination of
Employment, You shall not perform within the 50 states of the United States of
America any services which are in competition with the Business of the Company
during Your employment, or following Your Termination of Employment any
services which are in competition with a Material line of Business engaged in
by the Company at the time of Your Termination of Employment, and which are the
same as or similar to those services You performed for the Company under this
Agreement; provided, however, if the other business competitive with the
Business of the Company has multiple lines, divisions, segments or units, some
of which are not competitive with the Business of the Company, nothing herein
shall prevent You from being employed by or providing services to such line,
division, segment or unit that is not competitive with the Business of the
Company.  For purposes of this Section 9(a),
“Material” means a line of Business that represents 20% or more of the Company’s
consolidated revenues or adjusted EBITDA for the four fiscal quarters immediately
preceding Your Termination of Employment.


 


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(b)                                                 Non-Recruitment.  You agree that during Your employment and for
a period of eighteen (18) calendar months following Termination of Employment,
You will not, directly or indirectly:  (1) solicit,
induce, recruit, or cause a Restricted Employee to resign employment with the
Company or its Affiliates, or (2) participate in making hiring decisions,
encourage the hiring of, or aid in the hiring process of a Restricted Employee
on behalf of any employer other than the Company and its Affiliates.  As used herein, “Restricted Employee” means
any employee of the Company or its Affiliates with whom You had material
business-related contact while performing services under this Agreement, and
who is:  (1) a member of executive
management; (2) a corporate officer of the Company or any of its
Affiliates, or (3) any employee of the Company or any of its Affiliates
engaged in product or service development or product or service management.


 


(c)                                                  Effect of Breach.  The obligation of the Company to continue to
fulfill its payment and benefit obligations to You pursuant to Sections 6(b), 6(c) and
9(d) is conditioned upon Your compliance with the provisions of this Section 9
and Sections 7 and 8.  Accordingly,
in the event that You shall materially breach the provisions of this Section 9
and/or Sections 7 and/or 8 and not cure or cease (as appropriate) such
material breach within ten (10) days of receipt of notice thereof from the
Company (the “Default Date”), the Company’s obligations under Sections 6(b), 6(c) and
9(d) shall terminate and You shall promptly (within thirty (30) days after
the Default Date) refund to the Company a prorata portion of the amounts
previously paid to You pursuant to Sections 6(b), 6(c) and 9(d) equal
to a fraction, the numerator of which is the number of full months from the
Default Date to the eighteen-month (18-month) anniversary of Your Termination
of Employment, and the denominator of which is eighteen (18).  Termination of the Company’s obligations
under Sections 6(b), 6(c) or 9(d) shall not be the Company’s sole and
exclusive remedy for a breach of this Section 9 and/or Sections 7
and/or 8.  In addition to the remedy
provided in this Section 9(c), the Company shall be entitled to seek
damages and injunctive relief to enforce this Section 9 and
Sections 7 and 8, in the event of a breach by You of this Section 9
and/or Sections 7 and/or 8.


 


(d)                                                 Compensation for Restrictive Covenants.  In consideration of
Your obligations under this Section 9, upon Your Termination of Employment
other than on account of Your death or Total Disability or by the Company for “Cause”
or by You for reasons other than “Good Reason,” You shall be paid an amount
equal to one million five hundred thousand dollars ($1,500,000) (the “Non-Compete
Payment”).  Subject to Section 19
below, such amount shall be paid in a lump sum as
soon as administratively practicable (and within thirty (30) days) after Your Termination of Employment.


 


10.               Remedies.


 


(a)                                                  The parties hereto agree that the services to be rendered by
You pursuant to this Agreement, and the rights and privileges granted to the
Company pursuant to this Agreement, are of a special, unique, extraordinary and
intellectual character, which gives them a peculiar value; the loss of which
cannot be reasonably 


 


11

















 


or
adequately compensated in damages in any action at law, and that a breach by
You of any of the terms of this Agreement will cause the Company great and
irreparable injury and damage.  You
hereby agree that the definition of the Business of the Company set forth in Section 1
is correct, that the Company and its Affiliates conduct business throughout the
50 states of the United States of America and beyond, and that these
restrictions are reasonably necessary to protect the legitimate business
interests of the Company.  You hereby
expressly agree that the Company shall be entitled to the remedies of
injunction, specific performance and other equitable relief to prevent a breach
of this Agreement by You.  This Section 10
shall not be construed as a waiver of any other rights or remedies which the
Company may have for damages or otherwise.


 


(b)                                                 In the event of any dispute over the interpretation or
application of this Agreement, the Company shall reimburse You for Your
reasonable attorneys’ fees and costs incurred in connection with that dispute
unless the Company is determined, by final judgment of a court of competent jurisdiction,
to be the prevailing party on all or substantially all of the issues in
dispute, which reimbursement shall be made promptly (and within thirty (30)
days) following final judgment.


 


11.               Construction and Severability.  The parties hereto agree that the provisions of this
Agreement shall be presumed to be enforceable, and any reading causing
unenforceability shall yield to a construction permitting enforcement.  In the event a court should determine not to
enforce a provision of this Agreement due to overbreadth, violation of public
policy, or similar reasons, the parties specifically authorize such reviewing
court to enforce said covenant to the maximum extent reasonable, whether said
revisions be in time, territory, scope of prohibited activities, or other
respects.  If any single covenant,
provision, word, clause or phrase in this Agreement shall be found
unenforceable, it shall be severed and the remaining covenants and provisions
enforced in accordance with the tenor of the Agreement.


 


12.               Assignment.  This Agreement and the rights and obligations of the
hereunder may not be assigned by either party hereto without the prior written
consent of the other party hereto.


 


13.               Notices.  Except as otherwise specifically provided herein, any notice
required or permitted to be given to You pursuant to this Agreement shall be
given in writing, and personally delivered or mailed to You by certified mail,
return receipt requested, at the address set forth below Your signature on this
Agreement or at such other address as You shall designate by written notice to
the Company given in accordance with this Section 13, and any notice
required or permitted to be given to the Company, the Chairman of the Board of
Directors or the Chairman of the Leadership and Compensation Committee of the
Board of Directors shall be given in writing, and personally delivered or
mailed to that recipient by certified mail, return receipt requested, addressed
to the appropriate recipient at the address set forth under the signature of the
Executive Vice President of the Company or his designee on this Agreement or at
such other address as the Company shall designate by written notice to You
given in accordance with this Section 13. 
Any notice complying with this Section 13 shall be deemed received
upon actual receipt by the addressee.


 


12

















 


14.              Waiver.  The waiver by either party hereto of any breach of this
Agreement by the other party hereto shall not be effective unless in writing,
and no such waiver shall operate or be construed as the waiver of the same or
another breach on a subsequent occasion.


 


15.              Governing Law.  This Agreement and the rights of the parties hereunder shall
be governed by and construed in accordance with the laws of the State of
Georgia.


 


16.              Beneficiary.  All of the terms and provisions of this Agreement shall be
binding upon and inure to the benefit of and be enforceable by the parties
hereto and their respective successors, heirs, executors, administrators and
permitted assigns.


 


17.              Entire Agreement.  This Agreement embodies the entire agreement of the parties
hereto relating to Your employment by the Company in the capacity herein stated
and, except as specifically provided herein, no provisions of any employee manual,
personnel policies, Company directives or other agreement or document shall be
deemed to modify the terms of this Agreement. 
No amendment or modification of this Agreement shall be valid or binding
upon You or the Company unless made in writing and signed by the parties
hereto.  All prior understandings and
agreements relating to Your employment by the Company, in whatever capacity,
are hereby expressly terminated.


 


18.               Excise Tax.


 


(a)                                                  If any payment or distribution by the Company and/or any
Affiliate of the Company to or for Your benefit, whether paid or payable or
distributed or distributable pursuant to the terms of this Agreement or
otherwise pursuant to or by reason of any other agreement, policy, plan,
program or arrangement, including without limitation any stock option, stock
appreciation right or similar right, or the lapse or termination of any
restriction on or the vesting or exercisability of any of the foregoing (a “Payment”),
would be subject to the excise tax imposed by Section 4999 of the Code or
to any similar tax imposed by state or local law, or any interest or penalties
with respect to such tax (such tax or taxes, together with any such interest
and penalties, being hereafter collectively referred to as the “Excise Tax”),
then the payments and benefits payable or provided under this Agreement (or
other Payments as described below) shall be reduced (but not below the amount
of the payments or benefits provided under this Agreement) if, and only to the
extent that, such reduction will allow You to receive a greater Net After Tax
Amount than You would receive absent such reduction.


 


(b)                                                 The Accounting Firm will first determine the amount of any
Parachute Payments (as defined below) that are payable to You.  The Accounting Firm also will determine the
Net After Tax Amount (as defined below) attributable to Your total Parachute
Payments.


 


(c)                                                  The Accounting Firm will next determine the largest amount
of Payments that may be made to You without subjecting You to the Excise Tax
(the “Capped Payments”).  Thereafter, the
Accounting Firm will determine the Net After Tax Amount attributable to the
Capped Payments.


 


13

















 


(d)                                                 You then will receive the total Parachute Payments or the
Capped Payments or such other amount less than the total Parachute Payments,
whichever provides You with the higher Net After Tax Amount, but in no event
will any such reduction imposed by this Section 18 be in excess of the
amount of payments or benefits payable or provided under this Agreement.  If You will receive the Capped Payments or
some other amount lesser than the total Parachute Payments, the total Parachute
Payments will be adjusted by first reducing the amount of any noncash benefits
under this Agreement or any other plan, agreement or arrangement on a pro rata
basis and then by reducing the amount of any cash benefits under this Agreement
or any other plan, agreement or arrangement on a pro rata basis.  The Accounting Firm will notify You and the
Company if it determines that the Parachute Payments must be reduced and will
send You and the Company a copy of its detailed calculations supporting that
determination.


 


(e)                                                  As a result of the uncertainty in the application of Code
Sections 280G and 4999 at the time that the Accounting Firm makes its
determinations under this Section 18, it is possible that amounts will
have been paid or distributed to You that should not have been paid or
distributed under this Section 18 (“Overpayments”), or that additional
amounts should be paid or distributed to You under this Section 18 (“Underpayments”).  If the Accounting Firm determines, based on
either the assertion of a deficiency by the Internal Revenue Service against
the Company or You, which assertion the Accounting Firm believes has a high
probability of success or controlling precedent or substantial authority, that
an Overpayment has been made, that Overpayment will be treated for all purposes
as a debt ab initio that You must
repay to the Company together with interest at the applicable Federal rate
under Code Section 7872; provided, however, that no debt will be deemed to
have been incurred by You and no amount will be payable by You to the Company
unless, and then only to the extent that, the deemed debt and payment would either
reduce the amount on which You are subject
to tax under Code Section 4999 or generate a refund of tax imposed under
Code Section 4999.  If the Accounting Firm determines, based upon
controlling precedent or substantial authority, that an Underpayment has
occurred, the Accounting Firm will notify You and the Company of that
determination and the amount of that Underpayment will be paid to You promptly
(and no later than thirty (30) days after the final determination of the
Underpayment) by the Company.


 


(f)                                                    For purposes of this Section 18, the following terms
shall have their respective meanings:


 


(i)                                     “Accounting Firm” means the·
independent accounting firm engaged by the Company in the Company’s sole
discretion.


 


(ii)                                  “Net After Tax Amount” means
the amount of any Parachute Payments, Capped Payments or other payments
described in this Section 18, as applicable, net of taxes imposed under
Code Sections 1, 3101(b) and 4999 and any State or local income taxes
applicable to You on the date of payment. 
The determination of the Net After Tax Amount shall be made using the
highest 


 


14

















 


combined effective rate imposed by the foregoing taxes on income of the
same character as the Parachute Payments or Capped Payments, as applicable, in
effect on the date of payment.


 


(iii)                               “Parachute Payment” means a
payment that is described in Code Section 280G(b)(2), determined in
accordance with Code Section 280G and the regulations promulgated or
proposed thereunder.


 


(g)                                                 The fees and expenses of the Accounting Firm for its
services in connection with the determinations and calculations contemplated by
the preceding subsections shall be borne by the Company.  If such fees and expenses are initially paid
by You, the Company shall reimburse You the full amount of such fees and
expenses within five business days after receipt from You of a statement
therefore and reasonable evidence of Your payment thereof but in no event later
than the end of the year immediately following the year in which You incur such
reimbursable fees and expenses.


 


(h)                                                 The Company and You shall each provide the Accounting Firm
access to and copies of any books, records and documents in the possession of
the Company or You, as the case may be, reasonably requested by the Accounting
Firm, and otherwise cooperate with the Accounting Firm in connection with the
preparation and issuance of the determinations and calculations contemplated by
the preceding subsections.  Any determination
by the Accounting Firm shall be binding upon the Company and You.


 


(i)                                                     The federal, state and local income or other tax returns
filed by You shall be prepared and filed on a consistent basis with the
determination of the Accounting Firm with respect to the Excise Tax payable by
You.  You, at the request of the Company,
shall provide the Company true and correct copies (with any amendments) of Your
federal income tax return as filed with the Internal Revenue Service and
corresponding state and local tax returns, if relevant, as filed with the
applicable taxing authority, and such other documents reasonably requested by
the Company, evidencing such conformity.


 


(j)                                                     All payments to be made to You under this Section 18
must be paid no earlier than when the applicable taxes are to be remitted and
by the end of Your taxable year next following the year in which the taxes that
are the subject of the audit or litigation are remitted to the taxing
authorities or, where no such taxes are remitted, the end of Your taxable year
following the year in which the audit is completed or there is a final and
non-appealable settlement or the resolution of the litigation.


 


19.               Tax Liabilities and Code Section 409A.  Any payments or benefits that You receive
pursuant to this Agreement shall be subject to reduction for any applicable
employment or withholding taxes. 
Notwithstanding any other provision of this Plan, if You are a Specified
Employee as of Your Termination of Employment, and if the amounts that You are
entitled to receive pursuant to Section 6 or Section 9 are not
otherwise exempt from Section 409A of the 


 


15

















 


Code, then to
the extent necessary to comply with Section 409A, no payments for such
amounts may be made under this Agreement (including, if necessary, any payments
for welfare or other benefits in which case You may be required to pay for such
coverage or benefits and receive reimbursement when payment is no longer
prohibited) before the date which is six (6) months after Your Termination
of Employment or, if earlier, Your date of death.  All such amounts, which would have otherwise
been required to be paid over such six (6) months after Your Termination
of Employment or, if earlier, until Your date of death, shall be paid to You in
one lump sum payment as soon as administratively feasible after the date which
is six (6) months after Your Termination of Employment or, if earlier,
Your date of death.  All such remaining
payments shall be made as if they had begun as set forth in this
Agreement.  For purposes of this
Agreement, Your rights to payments shall be treated as rights to receive a
series of separate payments to the fullest extent allowable under Section 409A
of the Code.  This Agreement is intended
to comply with the applicable requirements of Section 409A of the Code and
shall be construed and interpreted in accordance therewith.  The Company may at any time amend, suspend or
terminate this Agreement, or any payments to be made hereunder, as necessary to
be in compliance with Section 409A of the Code to avoid the imposition on
You of any potential excise taxes relating to Section 409A.  To the extent that You incur liability for
excise taxes, penalties or interest under Section 409A of the Code because
any nonqualified deferred compensation plan of the Company fails to comply with
Section 409A, the Company will make a special reimbursement payment to You
equal to the sum of (i) Your liability for excise taxes, penalties or
interest under Section 409A and (ii) all taxes attributable to the
special reimbursement payment, at the time such taxes, penalties and interest
are required to be remitted to the applicable authorities.


 


IN WITNESS WHEREOF, You and the
Company have executed and delivered this Agreement as of the date first shown
above.


 


	
  YOU:

  	
   

  	
  THE
  COMPANY:

  
	
   

  	
   

  	
   

  
	
  ROLLA
  HUFF

  	
   

  	
  EARTHLINK,
  INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Rolla P. Huff

  	
   

  	
  By:

  	
  /s/
  Susan D. Bowick

  
	
   

  	
   

  	
   

  
	
  Address:

  	
  1375
  Peachtree Street

  	
   

  	
  Name:

  	
  Susan
  D. Bowick

  
	
   

  	
  7-North
  Atlanta, GA 30309

  	
   

  	
  Title:

  	
  Chairperson
  - Leadership and  Compensation
  Committee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address:

  	
  1375
  Peachtree Street

  
	
   

  	
   

  	
   

  	
  7-North
  Atlanta, GA 30309

  
							



 


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