| I.           Overview                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
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|  This      document describes the terms of the 2010 Annual Executive Bonus Plan for      XO Holdings, Inc and its subsidiaries (“XOH” or the      “Company”).  The      2010 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 Plan is      administered by XOH’s Human Resources Department, subject to the      supervision of XOH’s CEO, COO, CFO and SVP HR, the Bonus Plan Committee or      “BPC”, at the direction of the Compensation Committee of the XOH Board of      Directors (“Compensation      Committee”). The 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 of the Board of      Directors. In      the event of a claim or dispute brought forth by a participant, the      decision of the Compensation Committee as to the facts in the case and the      meaning and intent of any provision of the Plan, or its application, shall      be final, binding and conclusive.  |
| III.           Bonus      Period                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|  The      period over which bonuses may be earned under the Plan is XOH’s 2010      fiscal year, beginning on January 1, 2010 and ending on December 31, 2010      (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, is expected to 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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| 2010 Annual      Executive Bonus Plan | 2 of  5 |
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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 1st      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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
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| 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 performancelevels.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| 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. 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 the 2010      Corporate 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 XOH 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.  Final bonus awards require the approval      of the Compensation Committee.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |

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| 2010 Annual      Executive Bonus Plan | 3 of  5 |
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|  Achievement      of the 2010 XOH Goals does not guarantee an individual bonus payout, and      no bonus attributable to individual goals will be paid unless all three      plan funding level corporate goals are met. Final bonus awards require      approval by the 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, regardless of the level of      individual contribution.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
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| VIII.           COMPUTATION      AND DISBURSEMENT OF FUNDS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|  As      soon as practicable after the close of the 2010 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,      2011.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 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 be determined 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. 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 BonusPeriod. ·          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. |

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| 2010 Annual      Executive Bonus Plan | 4 of  5 |
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| ·          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. 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, 2011. 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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| 2010 Annual      Executive Bonus Plan | 5 of  5 |
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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. |
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