Exhibit 10.32


 


EARTHLINK, INC.


 


2010 SHORT-TERM INCENTIVE BONUS PLAN


 


1.            STATEMENT OF PURPOSE


 


1.1           Statement of Purpose.  The purpose of the EarthLink, Inc. 2010
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, Net Sent to Billing (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.  Additionally, to the extent any Bonus Award
to be paid to any Participant pursuant to the Plan is paid in shares of Common
Stock, the calculation of Adjusted EBITDA shall exclude any compensation
expense attributable to Bonus Awards paid in shares of Common Stock.


 


“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 2010 calendar year and
(ii) for all other Participants, the period beginning January 1, 2010
and ending June 30, 2010 and the period beginning July 1, 2010 and
ending December 31, 2010, 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 


 


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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.


 


“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, Net Sent to
Billing 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, by way of example and not of limitation,
(i) the impairment of any tangible or intangible assets,
(ii) litigation or claim judgments or settlements, (iii) changes in
tax law, accounting principles or other such laws or provisions affecting
reported results, (iv) mergers, acquisitions, business combinations, reorganizations
and/or restructuring programs, (v) reductions in force and early
retirement incentives, (vi) a Change in Control and (vii) 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 to the extent intended.


 


“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 the Bonus Award 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.


 


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“Effective Date”
means January 1, 2010.


 


“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.  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.


 


“Net Sent to Billing”
means “Gross Sent to Billing” minus “Churn” where (i) Gross Sent to
Billing means incremental recurring revenue initiated by the delivery of new or
upgraded products or services and (ii) Churn means the loss of recurring
revenue driven by the cancellation or downgrade of products or services.  For network products/services, sent to
billing status is triggered by meeting predefined customer acceptance criteria
and is determined by the project managers on the provisioning team.  For all other products, sent to billing
status is triggered by the delivery and installation of the equipment and is
determined by the service activation group.


 


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“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. 2010 Short-Term Incentive Bonus Plan, in its current form
and as it may be hereafter amended.


 


“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.


 


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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 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 Adjusted EBITDA or Net Sent
to Billing 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



 


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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 to the maximum
extent possible.  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 constitute Awards (as
defined therein) under 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 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, 2010
and ending June 30, 2010 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, 2010 and ending
December 31, 2010 (subject to the provisions of Section 6.1 above).


 


6.3           Payment of Award.  The amount of the Bonus Award to be paid
pursuant to this Section 6 to a Participant who is employed by the Company
shall be paid in one lump sum cash payment by the Company except that the
Company, in its sole discretion, may elect to pay part or all of the amount of
any Bonus Award payable to such Participant for the Bonus Period that exceeds
the Participant’s Target Aggregate Bonus for such Bonus Period in shares of
Common Stock in lieu of cash.  The amount
of the Bonus Award to be paid pursuant to this Section 6 to a Participant
who is employed by an Affiliate shall be paid in one lump sum cash payment by
the Affiliate that employs the Participant except that the Affiliate, in its
sole discretion, may elect to pay part or all of the amount of the Bonus Award
payable to such Participant in shares of Common  


 


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Stock in lieu of cash.  In the event part or all of any Bonus Award
is to be paid in shares of Common Stock, the number of shares to be delivered
shall be equal to the dollar amount of the Bonus Award otherwise payable
divided by the closing price of a share of Common Stock on the last trading day
immediately before the date of the Distribution.  Shares of Common Stock to be delivered under
this Plan may be paid under the 2006 Equity and Cash Incentive Plan or under
any other plan under which shares of Common Stock are otherwise available.


 


6.4           Taxes; Withholding.  To the extent required by law, the Employer
shall withhold from all Distributions made hereunder any amount required to be
withheld by Federal and state or local government or other applicable laws.
Each Participant shall be responsible for satisfying in cash or cash equivalent
acceptable to the Company any income and employment tax withholdings applicable
to any Distribution to the Participant under the Plan. The Company, to the
extent applicable law permits, may permit the Participant to pay applicable tax
withholdings by withholding shares of Common Stock that the Participant
otherwise would receive upon the Distribution but only to satisfy the
Participant’s minimum required tax withholdings.


 


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 Employer’s estimate of the Bonus
Award that is reasonably likely to be payable for the entire Bonus Period
taking into account the Corporate Performance Objectives achieved during the
Bonus Period through the time of the Participant’s termination of employment
(annualized or otherwise forecasted for the entire Bonus Period 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, provided however that Participant shall only be
entitled to receive such Bonus Award for the Bonus Period that includes the
date of the Participant’s termination of employment if the Participant’s
termination of employment occurs after the first calendar quarter of the
calendar year.  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 under the Plan if the Participant had remained
employed or, if earlier, no later than the time they are required to be paid
under any position elimination and severance plan maintained by the Company or
any Affiliate in which Participant participates at the time of termination of
the Participant’s employment.


 


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 


 


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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 Employer’s estimate of the Bonus
Award that is reasonably likely to be payable for the entire Bonus Period
taking into account the Corporate Performance Objectives achieved during the
Bonus Period through the time of the Participant’s termination of employment
(annualized or otherwise forecasted for the entire Bonus Period 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, provided however that Participant shall only be entitled
to receive such Bonus Award for the Bonus Period that includes the date of the
Participant’s position elimination if the Participant’s position elimination
occurs after the first calendar quarter of the calendar year.  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 under the Plan no later than the time
they would have been paid had the Participant remained employed or, if earlier,
no later than the time they are required to be paid under any position
elimination and severance plan maintained by the Company or any Affiliate in
which Participant participates at the time of termination of the Participant’s
employment.


 


9.            MISCELLANEOUS


 


9.1           Unsecured General Creditor.  Participants and their beneficiaries, heirs,
successors and assigns shall have no legal or equitable rights, interests, or
other claim in any property or assets of the Employer. Any and all assets shall
remain general, unpledged, unrestricted assets of the Employer. The Employer’s
obligation under the Plan shall be that of an unfunded and unsecured promise to
pay cash or shares of Common Stock in the future, and there shall be no
obligation to establish any fund, any security or any other restricted asset in
order to provide for the payment of amounts under the Plan.


 


9.2           Obligations to the Employer.  If a Participant becomes entitled to a
Distribution under the Plan, and, if, at the time of the Distribution, such
Participant has outstanding any debt, obligation or other liability
representing an amount owed to any Employer, then the Employer may offset such
amounts owing to it or any other Employer against the amount of any
Distribution. Such determination shall be made by the Committee. Any election
by the Committee not to reduce any Distribution payable to a Participant shall
not constitute a waiver of any claim for any outstanding debt, obligation, or
other liability representing an amount owed to the Employer.


 


9.3           Nonassignability.  Neither a Participant nor any other person
shall have any right to commute, sell, assign, transfer, pledge, anticipate,
mortgage or otherwise encumber, transfer, hypothecate or convey in advance of
actual receipt the amounts, if any, payable hereunder, or any part thereof,
which are, and all rights to which are, expressly declared to be unassignable
and nontransferable. No part of a Distribution, prior to actual Distribution,
shall be subject to seizure or sequestration for the payment of any debts,
judgments, alimony or separate maintenance owed by a Participant or any other
person, nor shall it be transferable by operation of law in the event of the  


 


9

















 


Participant’s or any other
persons bankruptcy or insolvency, except as set forth in Section 9.2
above.


 


9.4           Employment or Future Pay or
Compensation Not Guaranteed.  Nothing contained in this Plan
nor any action taken hereunder shall be construed as a contract of employment
or as giving any Participant or any former Participant any right to be retained
in the employ of an Employer or receive or continue to receive any rate of pay
or other compensation, nor shall it interfere in any way with the right of an
Employer to terminate the Participant’s employment at any time without
assigning a reason therefore.


 


9.5           Gender, Singular and Plural.  All pronouns and any variations thereof shall
be deemed to refer to the masculine, feminine, or neuter, as the identity of
the person or persons may require. As the context may require, the singular may
be read as the plural and the plural as the singular.


 


9.6           Captions.  The captions to the articles, sections, and
paragraphs of this Plan are for convenience only and shall not control or
affect the meaning or construction of any of its provisions.


 


9.7           Applicable Law.  This Plan shall be governed and construed in
accordance with the laws of the State of Georgia.


 


9.8           Validity.  In the event any provision of the Plan is
held invalid, void, or unenforceable, the same shall not affect, in any respect
whatsoever, the validity of any other provision of the Plan.


 


9.9           Notice.  Any notice or filing required or permitted to
be given to the Committee shall be sufficient if in writing and hand delivered,
or sent by registered or certified mail, to the principal office of 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 


 


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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 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.


 


9.14         Clawback Provision.  Notwithstanding any other provision of the
Plan, the Participant shall reimburse or return to the Employer (i) the
gross aggregate amount of any cash Distribution that the Participant previously
received under the Plan, (ii) any shares of Common Stock that the
Participant previously received under the Plan, (iii) an amount equal to
any dividends the Participant previously received with respect to any shares of
Common Stock that must be returned to the Employer and (iv) any and all
other amounts the Participant received or earned that are attributable to a
Distribution under the Plan, to the extent required under applicable law or any
clawback or compensation recoupment policy that the Employer may adopt.


 


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).


 


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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 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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