exv10w1







	 	 	 	 	 



Exhibit 10.1









XO Holdings, Inc.

2009 Annual Executive Bonus Plan




I. Overview





This document describes the terms of the 2009 Annual Executive Bonus Plan for XO Holdings, Inc
and its subsidiaries (“XOH” or the
“Company”). The 2009 Annual Executive Bonus Plan (the “Plan”)
rewards eligible executive officers for their contributions to the Company’s success in meeting
Corporate Goals, Functional Unit Goals and Individual Goals. This document sets forth how the
Plan works and how it is administered.



II. Plan Administration




The Plan is provided by XOH at its sole discretion. The XOH Human Resources Department is
principally responsible for the Plan design, ongoing Plan administration, and support to
management in Plan communications. The Compensation Committee of the XOH Board of Directors
(“Compensation Committee”), is responsible for establishing performance metrics and determining
whether a bonus will be paid pursuant to the Plan. The Compensation Committee may, at its sole
discretion, and without prior notice, modify, change, alter or terminate the Plan or determine
whether or not a Plan bonus will be paid. No bonus payment is payable without the authorization
and final approval by the Compensation Committee.



III. Bonus Period




The period over which bonuses may be earned under the Plan is XOH’s 2009 fiscal year, beginning
on January 1, 2009 and ending on December 31, 2009 (the
“Bonus Period”). The performance goals
applicable to the Bonus Period will be as specified by the Compensation Committee and may vary
from year to year.



IV. Eligibility Requirements




An executive officer is eligible to participate in the Plan only if all of the following criteria
are met:




	 	•	 	Designated as eligible to participate by the Compensation Committee;
	 
	 	•	 	Occupies an eligible position for a minimum of three consecutive months during the
applicable Bonus Period;
	 
	 	•	 	Renders overall satisfactory work performance; and
	 
	 	•	 	On XOH’s payroll and actively employed on the date of the Plan bonus payment,
which, if applicable, will occur during the subsequent fiscal year.





An
executive officer who is selected to participate in the Plan is
referred to as a “participant”.




 









 





			
	 	 	 
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The following individuals are ineligible to participate in the Plan, except as
otherwise specified by the Compensation Committee:




	 	•	 	Executive officers hired, rehired or moved into a bonus-eligible
position on or after October 1 of the Bonus Period;
	 
	 	•	 	Otherwise-eligible executive officers who either voluntarily or
involuntarily discontinue employment at XOH prior to the date of any
bonus payment; and/or
	 
	 	•	 	Any person, regardless of his or her position or title, to the
extent not designated as eligible to participate by the Compensation
Committee.





V. Plan Funding Level and Corporate Goals




XOH’s corporate performance will be evaluated using the following financial
metrics: Cash Flow; Adjusted EBITDA; and Revenue. Other and/or additional
financial metrics may be applicable from time to time, as specified by the
Compensation Committee. Subject to Compensation Committee approval,
achievement of the applicable financial metrics will determine whether the Plan
is funded and bonuses are paid for the Bonus Period. The combination of
achievement of all metrics results in the Plan Funding Level
percentage (“PFL”)
specified by the Compensation Committee. XOH reserves the right to set one or
more minimum thresholds for the Plan’s corporate financial metrics; if XOH’s
actual performance relative to these metrics does not exceed the applicable
minimum threshold(s), there will be no bonus payout with respect to the Bonus
Period. Subject to Compensation Committee approval, XOH also reserves the
right to increase the size of the bonus pool available for the Bonus Period to
account for financial performance materially exceeding the applicable target
performance levels.



VI. Individual Performance Goals




Unless the Compensation Committee determines otherwise, for all eligible
participants (other than the CEO) individual performance objectives will be
jointly established by each of the Plan’s participants and the CEO. Individual
goals will include various specific and measurable objectives set at the
beginning of the Bonus Period and intended to support the overall corporate
goals. The individual goals may be weighted based upon the relative
importance. Periodic assessment of each participant’s performance relative to
his or her individual performance objectives will be conducted by the CEO.



Unless the Compensation Committee determines otherwise, at the end of the Bonus
Period, the evaluation of each participant’s performance (other than the CEO)
against the pre-established performance objectives will be conducted by the
CEO. Individual performance objectives are subject to revision during a Bonus
Period to address changes in corporate priorities or objectives, as determined
by the CEO and the Compensation Committee.



For the CEO, individual performance objectives will be jointly established by
the CEO and the Compensation Committee. Individual goals will include various
specific and measurable objectives set at the beginning of the Bonus Period and
intended to support the overall corporate goals. Individual goals may be
weighted based upon their relative importance. Periodic assessment of the
CEO’s performance relative to his or her individual performance
objectives will be conducted by the Compensation Committee.




 









 





			
	 	 	 
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At the end of the Bonus Period, the evaluation of the CEO’s performance against
the pre-established performance objectives will be conducted by the
Compensation Committee. Individual performance objectives are subject to
revision during a Bonus Period to address changes in corporate priorities or
objectives, as determined by the Compensation Committee.



VII. Annual Bonus Target and Determination of Individual Awards




The Annual
Bonus Target (“ABT”) will be a percentage of a participant’s
eligible base salary for the applicable Bonus Period. Eligible Base Salary is
defined in Section IX. Bonus targets are as specified by the Compensation
Committee; however, individual payouts may be greater than or less than the
ABT.



The bonus pool will be determined by the plan funding level linked to corporate
performance goals discussed in Section V for the Bonus Period, subject to
authorization and approval by the Compensation Committee. Fifty percent (50%)
of an employee’s Individual Bonus Award will be based upon the achievement of
the XOC Cash Flow, Adjusted EBITDA, and Revenue Goals and the applicable
Business Unit goals. The other fifty percent (50%) of an employee’s Individual
Award will be based upon individual performance. These combined factors will
determine potential bonus payouts on an individual basis.



XOH’s achievement of the specified performance objectives for the Bonus Period
does not guarantee an individual payout. Final bonus awards require approval
by XOH’s Compensation Committee. If XOH’s financial performance does not meet
or exceed any minimum thresholds established by the Compensation Committee for
the Bonus Period, the Plan will not be funded and, unless otherwise authorized
by the Compensation Committee, no bonus will be payable to any Plan
participant, irrespective of the level of individual contribution.



VIII. COMPUTATION AND DISBURSEMENT OF FUNDS




As soon as practicable after the close of the 2009 fiscal year, the Corporate
Controller shall calculate the financial performance and the proposed payout
under the Plan based upon the achievement of the financial performance
measures. The proposed payout shall be presented to the Compensation Committee
for final approval. Once approved, payment of the Financial Awards shall be
made within 30 days after completion of such approval but not later than
December 31, 2010.



IX. Administration Rules and Definitions




Eligible Base Salary




Bonus award calculations will be based upon the participant’s base salary in
effect as of the end of the Bonus Period. A participant’s base salary shall
determine before both (a) deductions for taxes or employee benefits, and
(b) deferrals of compensation pursuant to any XOH-sponsored benefit plans. The following are exceptions:




	 	•	 	In cases of grade/target change that occur during the Bonus
Period, the base salary in effect at the end of each time period will be
used to compute the target bonus award for each respective portion of the
Bonus Period.
	 
	 	•	 	In cases of changes in work schedule, (i.e., 35 to 40 hours or
vice versa), the base salary in effect at the end of each time period
will be used to compute the annual target bonus award.






 









 





			
	 	 	 
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Prorated Bonus Awards




In order to be eligible to receive a bonus award for the Bonus Period, a
participant must be employed in a bonus-eligible position for a minimum of
three months during that Bonus Period, except as otherwise provided by the
Compensation Committee. A bonus payout will be based on the amount of time the
eligible participant is actively and continuously employed in a bonus eligible
position during the Bonus Period.




	 	•	 	New Hires and Rehires – Bonus award will be prorated based upon
the number of months employed during the Bonus Period. For example, a
participant initially hired on July 1st would be eligible for
50% of the annual bonus award. In the case of rehires, there is no
credit for prior service and the rehire date must occur prior to October
1st in order for the participant to be eligible under the Plan
for the Bonus Period.
	 
	 	•	 	Leaves of Absence — Time taken during a leave of absence is not
credited toward eligibility for a bonus award; therefore, awards will be
prorated for the length of time on leave of absence. Furthermore, bonus
payments are not considered earned and payable unless and until the
participant returns to work, with the exception of Military Leave. If
the leave of absence lasts nine months or more during the Bonus Period,
the participant will not have met the three-month eligibility required to
earn a bonus for that Bonus Period.
	 
	 	•	 	Promotions and Demotions – If the action results in a movement
from one bonus-eligible position to another bonus-eligible position (with
either a higher or lower bonus target) a pro-rated bonus award will be
calculated. The bonus award will be calculated separately by factoring
the time in each bonus eligible position by the corresponding bonus
target and base pay during the participant’s tenure in each position.
However, if a participant is both promoted and later demoted during the
Bonus Period, the participant’s entire bonus eligibility and bonus target
percent will be determined by the lower grade.
	 
	 	•	 	Status Change






	 	o	 	Change in employment status – The bonus award is not
payable unless the participant has occupied a bonus-eligible
position for at least three months during the Bonus Period
and meets all eligibility criteria during the last full
quarter of the Bonus Period, i.e., from Oct 1st
through December 31st. The bonus award will be
based upon the base salary in effect at the end of the
applicable time period and the annual bonus target while in the bonus-eligible position.




 









 











			
	 	 	 
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	 	o	 	Bonus-eligible position to a non-bonus eligible position –
The bonus award is prorated based upon the time in a
bonus-eligible position as long as the participant was in
the position for a minimum of three months during the Bonus
Period. A participant must occupy a bonus-eligible position
prior to October 1st in order to be eligible to
receive a bonus payment for the Bonus Period.
	 
	 	o	 	Non-bonus-eligible position to a bonus-eligible position –
The bonus award will be prorated based on the time worked,
the corresponding bonus target, and the salary in effect at
the end of the period while in the bonus-eligible position
as long as the participant was in the eligible position for
a minimum of three months during the Bonus Period. A
participant must move into the bonus-eligible position prior
to October 1st in order to be eligible to receive
a bonus payment for the Bonus Period.





If pro-rated awards are granted, the awards shall be paid within 30 days
following the final approval of bonus awards for the Bonus Period, but not
later than December 31, 2010.




Termination




If a participant’s termination of employment occurs prior to the date the bonus
awards are actually paid, the participant will not be entitled to any bonus
payment for the Bonus Period during which the termination occurs, except as
otherwise provided by the Plan or directed by the Compensation Committee.
Bonuses are not considered earned until they are approved by the Compensation
Committee and are actually paid by XOH. Consequently, a participant whose
employment with the Company is voluntarily or involuntarily terminated prior to
the actual bonus payment date will be deemed ineligible for a bonus payment,
except as otherwise provided by the Plan and the Compensation Committee.



Other




In the event of a situation not covered or clarified by the Plan guidelines,
the Compensation Committee will make the final determination regarding
eligibility and bonus calculations. No bonus payments will be made under the
Plan without prior approval by the Compensation Committee. Bonus awards are
subject to any applicable FICA, federal, state and local withholding
requirements as well as pretax employee contributions to the Company’s 401(k)
plan in effect at the time of bonus payment. Employment at XOH is terminable
at will by either the Company or its employees and is for no definite period of
time. Nothing in this Plan constitutes, nor should it be construed as, a
commitment to employment for a specific duration or at all. The existence of
this Plan does not provide any employee the right to continued employment with
XOH or continued participation in any compensation or bonus plan.



No right under the Plan shall be assignable, either voluntarily or
involuntarily by the way of encumbrance, pledge, attachment, level or change of
any nature (except as may be required by state or federal law).




 









 





			
	 	 	 
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Nothing in the Plan shall require the Company to segregate or set aside any
funds or other property for the purpose of paying any portion of an award. No
Participant, beneficiary or other person shall have any right, title or
interest in any amount awarded under the Plan prior to the payment of such
award to him or her.



XOH determines, at its sole discretion, whether bonuses will be paid. XOH
reserves the right to amend and/or terminate this or any other bonus, reward,
and recognition plan at any time without notice. This Plan is not a promise,
guarantee, announcement, contract or agreement that a bonus will be paid, nor
is it a contract of employment.