Exhibit
10.32


 


EARTHLINK,
INC.


 


2009 SHORT-TERM
INCENTIVE BONUS PLAN


 


1.                                      STATEMENT OF PURPOSE


 


1.1                                 Statement of
Purpose.  The purpose of the EarthLink, Inc.
2009 Short-Term Incentive Bonus Plan (the “Plan”) is to encourage the creation
of shareholder value by establishing a direct link between Adjusted EBITDA (as
defined below) and, in certain cases, Revenue (as defined below) achieved and
the incentive compensation of Participants in the Plan.


 


Participants contribute to
the success of EarthLink, Inc. (the “Company”) through the application of
their skills and experience in fulfilling the responsibilities associated with
their positions. The Company desires 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 EBITDA excluding stock-based compensation expense under SFAS No. 123(R),
facility exit and restructuring costs, net losses of equity affiliates, gain
(loss) on investments, net, impairment of goodwill and intangible assets.


 


“Bonus Award” means the
Participant’s Performance Bonus or such lesser amount as the Committee in its
sole discretion may determine as of a result of the failure by the individual
Participant to achieve desired individual performance levels for the Bonus
Period.


 


“Bonus Period(s)”
means (i) for Management Participants, the 2009 calendar year and (ii) for
all other Participants, the period beginning January 1, 2009 and ending June 30,
2009 and the period beginning July 1, 2009 and ending December 31,
2009, in respect of which the Corporate Performance Objectives are measured and
the Participants’ Bonus Awards, if any, are to be determined.


 


“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 any Employer 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 any Employer; (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 any Employer or (iv) acts by the Participant of willful
malfeasance or gross negligence in a matter of material importance to any
Employer.


 


“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
the Company’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 the Company’s voting stock
results from any acquisition of voting stock (i) directly from the Company
that is approved by the Incumbent Board, (ii) by the Company, (ii) by
any employee benefit plan (or related trust) sponsored or maintained by the Company
or any Employer, 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 the Company
immediately prior to that Business Combination beneficially own, directly or
indirectly, at least fifty percent (50%) of the then outstanding shares of
common stock and at least fifty percent (50%) of the combined voting power of
the then outstanding voting stock entitled to vote generally in the election of
directors of the entity resulting from that Business Combination (including,
without limitation, an entity that as a result of that transaction owns the
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 voting stock of the Company, and (ii) 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 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 the Company, 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)                                 approval by the shareholders of the Company of a
complete liquidation or dissolution of the Company, except pursuant to a
Business Combination that would not cause a Change in Control under clauses (i) and
(ii) of subsection (b) above; or


 


(e)                                  the acquisition by any person,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of the Company (i) through the ownership of
securities which provide the holder with such power, excluding voting rights
attendant with such securities, or (ii) by contract; provided the Change
in Control will not be deemed to have occurred if such power was acquired (x) directly
from the Company in a transaction approved by the Incumbent Board, (y) by
any employee benefit plan (or related trust) sponsored or maintained by the
Company or any Employer or (z) by any person pursuant to a Business
Combination that would not cause a Change in Control under clauses (i) and
(ii) of subsection (b) above.


 


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“Code” means the
Internal Revenue Code of 1986, as amended.


 


“Committee” means the
Leadership and Compensation Committee of the Board of Directors of the Company 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.


 


“Common Stock” means
the common stock, $.01 par value per share, of the Company.


 


“Corporate Performance
Objectives” means Adjusted EBITDA and, in certain cases, Revenues in such
amounts as the Committee shall determine in its sole discretion for each Bonus
Period that must be achieved for the Participant’s Performance Bonus Multiplier
for the Bonus Period to be greater than zero (0). The Committee shall adjust
the Corporate Performance Objectives as the Committee in its sole discretion may
determine is appropriate in the event of unanticipated circumstances, unbudgeted
acquisitions or divestitures, or other unexpected changes 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 the impairment of any tangible or intangible assets, litigation or
claim judgments or settlements, changes in tax law, accounting principles or
other such laws or provisions affecting reported results, business
combinations, reorganizations and/or restructuring programs, reductions in
force and early retirement incentives and any other extraordinary, unusual, infrequent
or non-reoccurring items separately identified in the financial statements
and/or notes thereto in accordance with generally accepted accounting
principles.  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.


 


“Disability” means
where the Participant is “disabled” or has incurred a “disability” in
accordance with the policies of the Employer that employs the Employee in
effect at the applicable time.


 


“Distribution” means
the payment of cash under the Plan.


 


“Distribution Date”
means the date on which the Distribution occurs.


 


“EBITDA” means income
(loss) from continuing operations before interest income (expense) and other,
net, income, taxes, depreciation and amortization.


 


“Effective Date”
means January 1, 2009.


 


“Employee” means a
full-time common law employee of an Employer. 
A full-time 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 a full-time, common law employee.  


 


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An
Employee does not include any person whom the Employer has identified on its
payroll, personnel or tax records as an independent contractor or a person who
has acknowledged in writing to the Employer that such person is an independent
contractor, whether or not a court, the Internal Revenue Service or any other
authority ultimately determines such classification to be correct or incorrect
as a matter of law.


 


“Employer” means EarthLink, Inc.
(also referred to as the “Company”) and any other entity that is part of a
controlled group of corporations or is under common control with the Company
within the meaning of Sections 1563(a), 414(b) or 414(c) of the Code,
except that, in making any such determination, fifty percent (50%) shall be
substituted for eighty percent (80%) each place therein.


 


“Incumbent Board”
means a Board of Directors of the Company at least a majority of whom consist
of individuals who either are (a) members of the Company’s Board of
Directors as of the Effective Date of the adoption of this Plan or (b) members
who become members of the Company’s Board of Directors subsequent to the date
of the adoption of this Plan 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 specific vote
or by approval of a 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 action or threatened solicitation of proxies
or consents by or on behalf of a person other than the  Board of Directors of the Company.


 


“Management” means
the executive officers of EarthLink, Inc., individually or as a group,
whose positions are in the Red Zone of the Career Band System.


 


“Maximum Bonus Award”
means the maximum bonus award, denoted as a dollar amount, that can be earned
and paid to the Participant for the Bonus Period as established by the Committee.


 


“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 the Participant’s Target Bonus Percent
and the Participant’s Performance Bonus Multiplier.


 


“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 Performance Bonus for the Bonus Period.  The Committee shall establish the Performance
Bonus Multipliers that relate to the levels of Corporation Performance Objectives
that must be achieved during the Bonus Period to calculate the Participant’s Performance
Bonus.


 


“Plan” means this EarthLink, Inc.
2009 Short-Term Incentive Bonus Plan, in its current form and as it may be
hereafter amended.


 


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“Revenues” means
revenues as reported on the Company’s financial statements filed with the
Securities and Exchange Commission.


 


“Target Aggregate Bonus”
means the Bonus Award that would be earned if the Participant’s Performance
Bonus Multiplier were one hundred percent (100%).


 


“Target Bonus Percent”
means the percent of the Participant’s Compensation that will be earned as a Performance
Bonus where the Corporate Performance Objectives that are achieved for the Bonus
Period result in a Performance Bonus Multiplier of one hundred percent (100%).  The Target Bonus Percent for each Participant’s
position shall be established by the Committee.


 


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.  The Committee
shall select each Employee who shall participate in the Plan for each Bonus
Period by name, position or zone within the Career Band System.  The Committee shall retain the discretion to
name as a Participant any Employee hired or promoted after the commencement of
the Bonus Period.


 


5.                                      AMOUNT OF BONUS AWARDS


 


5.1                                 Establishment
of Bonuses.


 


(a)                                  Initial
Determinations.  For each
Bonus Period, the Committee shall establish generally for each Participant the
Target Bonus Percent and the Performance Bonus Multiplier that will apply with
respect to the designated levels of achievement of the Corporate Performance Objectives.
 The Performance Bonus Multiplier 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)                                 Performance
Objectives.  For each
Bonus Period, the Committee shall establish the Corporate Performance Objectives
that must be achieved to determine each Participant’s Performance Bonus Multiplier
for the Bonus Period. To the extent the Corporate Performance Objectives are
not achieved, the Performance Bonus Multiplier shall be zero (0).  The 


 


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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 the Company’s,
an Affiliate’s, a product’s, and/or a business unit’s Revenue, Adjusted EBITDA
and/or any combination of the foregoing as the Committee may designate.  The Corporate Performance Conditions 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).


 


5.2                                 Calculation of
Bonus Awards.


 


(a)                                  Timing of the
Calculation.  The calculations
necessary to determine the Bonus Awards for the Bonus Period most recently
ended 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 each Bonus Period, each Participant’s
Performance Bonus shall be calculated, and the Participant’s Bonus Award shall
be either the Participant’s Performance Bonus or such lesser amount as the
Committee in its sole discretion may determine as set forth in Section 5.2(d).  Notwithstanding any other provision of the
Plan, the Participant’s Bonus Award may not exceed the Maximum Bonus Award.


 


(c)                                  Written
Determination.  For the
Performance Bonus, which is based on the achievement of Corporate Performance Objectives,
the Committee shall certify in writing whether such Corporate Performance Objectives
have been achieved.  The Bonus Awards
payable under this Plan are intended to constitute Awards (as defined therein)
under the Company’s 2006 Equity and Cash Incentive Plan.  Accordingly, the Bonus Awards hereunder also will
be subject to the terms of the 2006 Equity and Cash Incentive Plan to the
extent applicable.  Any Bonus Awards or
portions thereof that do not comply with the terms of such 2006 Equity and Cash
Incentive Plan shall be deemed separate Bonus Awards that are granted under
this Plan but outside of the 2006 Equity and Cash Incentive Plan.


 


(d)                                 Negative
Discretion. 
Notwithstanding any other provision of the Plan, the Participant’s Performance
Bonus may be reduced, but not below zero (0), if the Participant’s individual
performance for the Bonus Period falls below that expected of such Participant.
Management “subject to the approval of the Committee” may determine if any
Participant’s Performance Bonus should be reduced to determine the Participant’s
Bonus Award as a result of the Participant’s failure to achieve required
individual performance levels during the Bonus Period. The Committee shall
determine in its discretion whether any Performance Bonuses for Management Participants
should be reduced to determine the Participant’s Bonus Award for 


 


6

















 


failure
to achieve the desired individual performance levels during the Bonus Period.
Any reduction of a Participant’s Performance Bonus shall be at the sole and
absolute discretion of the Committee.


 


6.                                      PAYMENT OF AWARDS


 


6.1                                 Eligibility for
Payment.  Except as otherwise set forth
in Sections 7.1 and 8.1 of this Plan or under any other agreement between the
Employer and the Participant or any other benefit plan of the Employer, 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, except that (i) the amount of any Bonus Award payable to
a Participant for the Bonus Period beginning January 1, 2009 and ending June 30,
2009 that exceeds the Participant’s Target Aggregate Bonus for such Bonus
Period shall be paid at the time Distributions are to be made for the Bonus
Period beginning July 1, 2008 and ending December 31, 2009 (subject
to the provisions of Section 6.1 above).


 


6.3                                 Payment of
Award.  The amount of the Bonus Award
to be paid to the Participant pursuant to this Section 6 shall be paid in
one lump sum cash payment by the Employer that employs the Participant.


 


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 the Federal and any state or
local government or other applicable laws.


 


7.                                      CHANGE IN CONTROL


 


7.1                                 Payment After a
Change in Control.  If at any
time 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 greater of
(i) the Participant’s Target Aggregate Bonus for the Bonus Period or (ii) the
Bonus Award that would result based on the Corporate Performance Objectives
achieved during the Bonus Period through the time of the Participant’s
termination of employment (annualized or otherwise adjusted considering progress
towards goals and the portion of the Bonus Period preceding the Participant’s
termination of employment compared to 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.  In that event, the Participant also shall be
entitled to receive any Bonus Award payable for any Bonus Period that ended
before the termination of the Participant’s employment.  Such Bonus Awards shall be paid no later than
the time they would have been paid if the Participant had remained employed.


 


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8.                                      POSITION ELIMINATION


 


8.1                                 Payment after a
Position Elimination.  If before a
Change in Control occurs the Participant’s employment with all Employers is
terminated by an Employer as a result of a position elimination, such that the
Participant is entitled to receive benefits under any position elimination and
severance plan maintained by the Company or any Affiliate, then, the Participant
shall be entitled to receive for the Bonus Period that includes the date of the
Participant’s termination of employment as a result of a position elimination,
the Bonus Award that would result based on the Corporate Performance Objectives
achieved during the Bonus Period through the time of the Participant’s
termination of employment (annualized or otherwise adjusted considering progress
toward goals and the portion of the Bonus Period preceding the Participant’s
termination of employment compared to 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 the position elimination.  In that event, the Participant also shall be
entitled to receive any Bonus Award payable for any Bonus Period that ended
before the termination of the Participant’s employment.  Such Bonus Awards shall be paid no later than
the time they would have been paid had the Participant remained employed.


 


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 money 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.


 


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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 the
Company, directed to the attention of the President and CEO of the Company.
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 the Company is a party, and the rules of all domestic
stock exchanges on which the Company’s shares of capital stock may be listed.
The Company shall have the right to rely on an opinion of its 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 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 under any other agreement or
arrangement 


 


9

















 


that would constitute a
duplicative payment of the Bonus Award or Distribution; to the extent of that
duplication, no Bonus Award or Distribution will be payable hereunder.


 


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.


 


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 the Company 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 on
or after a Change in Control to the extent any such amendment or termination
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.


 


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 Company 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, neither the Company nor any Employer shall be liable to any Employee
or any other 


 


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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.


 


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