Document:

Exhibit
10.18

 

AMENDMENT
TO CREDIT AGREEMENT

 

THIS
AMENDMENT TO CREDIT AGREEMENT (the “Agreement”) is made
and entered into as of this 30th day of September, 2005, by and between
SUNTRUST BANK, in its capacity as Administrative Agent for the Lenders (as such
terms are defined below), and WATSON WYATT & COMPANY, a Delaware
corporation (the “Borrower”).

 

RECITALS

 

A.                                   Pursuant
to that certain Amended and Restated Revolving Credit Agreement dated as of July 11,
2005, by and between the Borrower, the several Lenders and other financial
institutions and lenders from time to time party hereto (the “Lenders”),
SunTrust Bank, in its capacity as administrative agent for the Lenders (the “Administrative
Agent”), as issuing Lender (the “Issuing Lender”) and as swingline lender (the “Swingline
Lender”) (as amended from time to time, the “Credit Agreement”), the Lenders
have agreed to make Revolving Credit Loans from time to time in a principal
amount of up to $300,000,000 (the “Loans”). 
Capitalized terms not otherwise defined herein shall have the meanings
given such terms in the Credit Agreement.

 

B.                                     The
Borrower has requested that the Lenders make certain amendments to the Credit
Agreement.

 

C.                                     The
Lenders are willing to make certain amendments to the Credit Agreement on the
terms and conditions set forth herein.

 

AGREEMENT

 

In
consideration of the Recitals and of the mutual promises and covenants
contained herein, the Administrative Agent, Issuing Bank, Swingline Lender,
Lenders and the Borrower agree as follows:

 

1.                                       Amendments to Credit Agreement.  The Credit Agreement is hereby amended to
delete the definition of “Adjusted Tangible Net Worth” in Section 1.1
of the Credit Agreement in its entirety and replace such definition with the
following:

 

“Adjusted Tangible Net Worth” shall
mean, as of any date, Consolidated Tangible Net Worth as of such date, plus (i) an amount equal to the
negative adjustment to Parent Guarantor’s total stockholders’ equity, if any,
for “accumulated other comprehensive loss” subsequent to March 31, 2005, minus (ii) an amount equal to the
positive adjustment to Parent Guarantor’s total stockholders’ equity, if any,
for “accumulated other comprehensive income” subsequent to March 31, 2005;
provided that the aggregate net amount added or subtracted for “accumulated
other comprehensive loss (or income)” subsequent to March 31, 2005, shall
not exceed $90,000,000.

 

2.                                       Representations and Warranties.  The Borrower hereby represents and warrants
to the Lenders as follows:

 

(a)                                  Corporate Power; Authorization.  The Borrower has the corporate power, and has
been duly authorized by all requisite corporate action, to execute and deliver
this 

 

 

Agreement and to perform
its obligations hereunder.  This
Agreement has been duly executed and delivered by the Borrower.

 

(b)                                 Enforceability.  This Agreement is the legal, valid and
binding obligation of the Borrower, enforceable against the Borrower in
accordance with its terms.

 

(c)                                  No Violation.  The Borrower’s execution, delivery and
performance of this Agreement do not and will not (i) violate any law,
rule, regulation or court order to which the Borrower is  subject; (ii) conflict with or result in
a breach of the Borrower’s Articles of Incorporation or Bylaws or any agreement
or instrument to which the Borrower is party or by which it or its properties
are bound, or (iii) result in the creation or imposition of any lien,
security interest or encumbrance on any property of the Borrower, whether now
owned or hereafter acquired, other than liens in favor of the Lenders.

 

(d)                                 Obligations Absolute.  The obligation of the Borrower to repay the
Loans, together with all interest accrued thereon, is absolute and
unconditional, and there exists no right of set off or recoupment, counterclaim
or defense of any nature whatsoever to payment of the Obligations.

 

3.                                       Effect and Construction of Agreement.  Except as expressly provided herein, the
Credit Agreement and the Loan Documents shall remain in full force and effect
in accordance with their respective terms, and this Agreement shall not be
construed to:

 

(i)                                     waive
or impair any rights, powers or remedies of the Lenders under the Credit
Agreement and the Loan Documents; or

 

(ii)                                  constitute
an agreement by the Lenders or require the Lenders to waive additional defaults
or make further amendments to the Credit Agreement.

 

In the event
of any inconsistency between the terms of this Agreement and the Credit
Agreement or any of the Loan Documents, this Agreement shall govern.  The Borrower acknowledges that it has
consulted with counsel and with such other experts and advisors as it has
deemed necessary in connection with the negotiation, execution and delivery of
this Agreement.  This Agreement shall be
construed without regard to any presumption or rule requiring that it be
construed against the party causing this Agreement or any part hereof to be
drafted.

 

4.                                       Miscellaneous.

 

(a)                                  Further Assurance.  The Borrower agrees to execute such other and
further documents and instruments as the Lenders may request to implement the
provisions of this Agreement.

 

(b)                                 Benefit of Agreement.  This Agreement shall be binding upon and
inure to the benefit of and be enforceable by the parties hereto, their
respective successors and assigns.  No
other person or entity shall be entitled to claim any right or benefit
hereunder, including, without limitation, the status of a third-party
beneficiary of this Agreement.

 

 

(c)                                  Integration.  This Agreement, together with the Credit
Agreement, and the Loan Documents, constitutes the entire agreement and understanding
among the parties relating to the subject matter hereof, and supersedes all
prior proposals, negotiations, agreements and understandings relating to such
subject matter.  In entering into this
Agreement, the Borrower acknowledges that it is relying on no statement,
representation, warranty, covenant or agreement of any kind made by the Lenders
or any employee or agent of the Lenders, except for the agreements of the
Lenders set forth herein.

 

(d)                                 Severability.  The provisions of this Agreement are intended
to be severable.  If any provisions of
this Agreement shall be held invalid or unenforceable in whole or in part in
any jurisdiction, such provision shall, as to such jurisdiction, be ineffective
to the extent of such invalidity or enforceability without in any manner
affecting the validity of enforceability of such provision in any other
jurisdiction or the remaining provisions of this Agreement in any jurisdiction.

 

(e)                                  Governing Law.  This Agreement shall be governed by and
construed in accordance with the internal substantive laws of the State of New
York, without regard to the choice of law principles of such state.

 

(f)                                    Counterparts; Telecopied Signatures.  This Agreement may be executed in any number
of counterparts and by different parties to this Agreement on separate
counterparts, each of which, when so executed, shall be deemed an original, but
all such counterparts shall constitute one and the same agreement.  Any signature delivered by a party by facsimile
transmission shall be deemed to be an original signature hereto.

 

(g)                                 Notices.  Any notices with respect to this Agreement
shall be given in the manner provided for in Section 10.1 of the Credit
Agreement.

 

(h)                                 Amendment.  No amendment, modification, rescission,
waiver or release of any provision of this Agreement shall be effective unless
the same shall be in writing and signed by the parties hereto.

 

{Remainder of page intentionally left
blank — signatures appear on the following page}

 

 

IN WITNESS
WHEREOF, the parties hereto have executed this Agreement as of the day and year
first above written.

 

	
   

  	
  SUNTRUST BANK

  
	
   

  	
  as Administrative Agent, as Issuing Lender
  and

  
	
   

  	
  as Swingline Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WATSON WYATT & COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Michael J.
  O’Boyle

  
	
   

  	
  Treasurer

  

 

 

	
   

  	
  US BANK, NATIONAL ASSOCIATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Revolving Commitment: $35,000,000

  

 

 

	
   

  	
  COMERICA BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Revolving Commitment: $35,000,000

  

 

 

	
   

  	
  MANUFACTURERS AND TRADERS TRUST

  COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Revolving Commitment: $35,000,000

  

 

 

	
   

  	
  HSBC BANK USA, NA

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Revolving Commitment: $35,000,000

  

 

 

	
   

  	
  COMMERZBANK, NEW YORK BRANCH

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Revolving Commitment: $25,000,000

  

 

 

	
   

  	
  SUMITOMO MITSUI BANKING

  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Revolving Commitment: $25,000,000

  

 

 

	
   

  	
  NATIONAL CITY BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Revolving Commitment: $20,000,000

  

 

 

	
   

  	
  MIZUHO CORPORATE BANK, LTD.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Revolving Commitment: $20,000,000

  

 

 

	
   

  	
  THE NORINCHUKIN BANK, NEW YORK

  BRANCH

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Revolving Commitment: $15,000,000

  

 

 

PARENT GUARANTOR
ACKNOWLEDGEMENT, CONSENT AND RATIFICATION

 

The
undersigned, WATSON WYATT & COMPANY HOLDINGS, a Delaware corporation
(the “Guarantor” ), (a) is a guarantor pursuant to that certain Parent
Guaranty Agreement dated as of June 30, 2004 by such Guarantor in favor of
SUNTRUST BANK, a Georgia banking corporation, as administrative agent (the “Administrative
Agent”) for the several banks and other financial institutions (the “Lenders”)
from time to time party to the Credit Agreement
described in the foregoing Amendment to Credit Agreement (the “Amendment”), (b) hereby
acknowledges and consents to the amendments described in the Amendment, (c) ratifies
and confirms such Parent Guaranty Agreement as being in full force and effect
and reaffirms its obligations thereunder, as modified, after giving effect to
the Amendment.

 

 

	
   

  	
  GUARANTOR:

  
	
   

  	
   

  
	
   

  	
  WATSON WYATT & COMPANY

  HOLDINGS

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Michael J. O’Boyle

  
	
   

  	
  Treasurer

  

 

 

SUBSIDIARY GUARANTOR
ACKNOWLEDGEMENT, CONSENT AND RATIFICATION

 

The
undersigned, WATSON WYATT INSURANCE CONSULTING, INC., a Delaware corporation
(the “Guarantor” ), (a) is a guarantor pursuant to that certain Subsidiary
Guaranty Agreement dated as of June 30, 2004 by such Guarantor in favor of
SUNTRUST BANK, a Georgia banking corporation, as administrative agent (the “Administrative
Agent”) for the several banks and other financial institutions (the “Lenders”)
from time to time party to the Credit Agreement
described in the foregoing Amendment to Credit Agreement (the “Amendment”), (b) hereby
acknowledges and consents to the amendments described in the Amendment, (c) ratifies
and confirms such Subsidiary Guaranty Agreement as being in full force and
effect and reaffirms its obligations thereunder, as modified, after giving
effect to the Amendment.

 

 

	
   

  	
  GUARANTOR:

  
	
   

  	
   

  
	
   

  	
  WATSON WYATT INSURANCE

  CONSULTING, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Michael J. O’Boyle

  
	
   

  	
  Treasurer

  

 

 

SUBSIDIARY GUARANTOR
ACKNOWLEDGEMENT, CONSENT AND RATIFICATION

 

The
undersigned, WATSON WYATT INVESTMENT CONSULTING, INC., a Delaware corporation
(the “Guarantor” ), (a) is a guarantor pursuant to that certain Subsidiary
Guaranty Agreement dated as of June 30, 2004 by such Guarantor in favor of
SUNTRUST BANK, a Georgia banking corporation, as administrative agent (the “Administrative
Agent”) for the several banks and other financial institutions (the “Lenders”)
from time to time party to the Credit Agreement
described in the foregoing Amendment to Credit Agreement (the “Amendment”), (b) hereby
acknowledges and consents to the amendments described in the Amendment, (c) ratifies
and confirms such Subsidiary Guaranty Agreement as being in full force and
effect and reaffirms its obligations thereunder, as modified, after giving
effect to the Amendment.

 

 

	
   

  	
  GUARANTOR:

  
	
   

  	
   

  
	
   

  	
  WATSON WYATT INVESTMENT

  CONSULTING, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Michael J. O’Boyle

  
	
   

  	
  Treasurer

  

 

 

SUBSIDIARY GUARANTOR
ACKNOWLEDGEMENT, CONSENT AND RATIFICATION

 

The
undersigned, WYATT DATA SERVICES, INC., a Delaware corporation (the “Guarantor”
), (a) is a guarantor pursuant to that certain Subsidiary Guaranty
Agreement dated as of June 30, 2004 by such Guarantor in favor of SUNTRUST
BANK, a Georgia banking corporation, as administrative agent (the “Administrative
Agent”) for the several banks and other financial institutions (the “Lenders”)
from time to time party to the Credit Agreement
described in the foregoing Amendment to Credit Agreement (the “Amendment”), (b) hereby
acknowledges and consents to the amendments described in the Amendment, (c) ratifies
and confirms such Subsidiary Guaranty Agreement as being in full force and
effect and reaffirms its obligations thereunder, as modified, after giving
effect to the Amendment.

 

 

	
   

  	
  GUARANTOR:

  
	
   

  	
   

  
	
   

  	
  WYATT DATA SERVICES, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Michael J. O’Boyle

  
	
   

  	
  Treasurer

  

 

 

SUBSIDIARY GUARANTOR
ACKNOWLEDGEMENT, CONSENT AND RATIFICATION

 

The undersigned,
WATSON WYATT INTERNATIONAL, INC., a Nevada corporation (the “Guarantor” ), (a) is
a guarantor pursuant to that certain Subsidiary Guaranty Agreement dated as of June 30,
2004 by such Guarantor in favor of SUNTRUST BANK, a Georgia banking
corporation, as administrative agent (the “Administrative Agent”) for the
several banks and other financial institutions (the “Lenders”) from time to
time party to the Credit Agreement
described in the foregoing Amendment to Credit Agreement (the “Amendment”), (b) hereby
acknowledges and consents to the amendments described in the Amendment, (c) ratifies
and confirms such Subsidiary Guaranty Agreement as being in full force and
effect and reaffirms its obligations thereunder, as modified, after giving
effect to the Amendment.

 

 

	
   

  	
  GUARANTOR:

  
	
   

  	
   

  
	
   

  	
  WATSON WYATT INTERNATIONAL,

  INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Michael J. O’Boyle

  
	
   

  	
  Treasurer

  

 

 

 

PLEDGOR
ACKNOWLEDGEMENT, CONSENT AND RATIFICATION

 

The
undersigned, WATSON WYATT & COMPANY HOLDINGS, a Delaware corporation
(the “Pledgor” ), (a) is a pledgor pursuant to that certain Pledge
Agreement dated as of June 30, 2004 by such Pledgor Guarantor in favor of
SUNTRUST BANK, a Georgia banking corporation, as administrative agent (the “Administrative
Agent”) for the several banks and other financial institutions (the “Lenders”)
from time to time party to the Credit Agreement
described in the foregoing Amendment to Credit Agreement (the “Amendment”), (b) hereby
acknowledges and consents to the amendments described in the Amendment, (c) ratifies
and confirms such Pledge Agreement as being in full force and effect and
reaffirms its obligations thereunder, as modified, after giving effect to the
Amendment.

 

	
   

  	
  PLEDGOR:

  
	
   

  	
   

  
	
   

  	
  WATSON WYATT & COMPANY

  HOLDINGS

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Michael J. O’Boyle

  
	
   

  	
  TreasurerExhibit 10.1

 

EARTHLINK, INC.

                    PLAN

Incentive
Stock Option Agreement

No. of shares subject to

Incentive Stock Option:

THIS INCENTIVE STOCK
OPTION AGREEMENT (this “Agreement”) dated as of the      
day of                ,
20     , by and between EarthLink, Inc., a Delaware
corporation (the “Company”), and                     
(“Participant”) is made pursuant and subject to the provisions of the                     
Plan (the “Plan”), a copy of which is attached hereto.  All terms used herein that are defined in the
Plan have the same meaning given them in the Plan.

1.                                   Grant of Incentive Stock Option. 
Pursuant to the Plan, the Company, on                ,
20      (the “Date of Grant”), granted to Participant,
subject to the terms and conditions of the Plan and subject further to the
terms and conditions herein set forth, the right and option to purchase from
the Company all or any part of an aggregate of           
shares of Common Stock at the option price of $          
per share, such option price per share being not less than the Fair Market
Value of a share of the Common Stock on the Date of Grant (or, in case of a Ten
Percent Shareholder as described in the Plan, not less than 110 percent of the
Fair Market Value of a share of the Common Stock on the Date of Grant). This
Option is to be treated as an Incentive Stock Option; except, however, if the
aggregate Fair Market Value, determined at the time of grant, of shares of
Common Stock with respect to which Participant may exercise Incentive Stock
Options for the first time during any calendar year under the Plan and any
other plan of the Company exceeds $100,000, the Incentive Stock Options that
cause the limitation to be exceeded shall be treated as Nonqualified Stock
Options. . This Incentive Stock Option is exercisable as hereinafter provided.

 

2.                                       Terms and Conditions. 
This Incentive Stock Option is subject to the following terms and
conditions:

(a)                                  Expiration Date. 
This Incentive Stock Option shall expire at 11:59 p.m. on                ,
20      (the “Expiration Date”).  In no event shall the Expiration Date be
later than 10 years from the Date of Grant (or, in case of a Ten Percent
Shareholder as described in the Plan, five years from the Date of Grant).

(b)                                 Exercise of Option. 
Except as provided in the Plan and in paragraphs 3, 4, 5, 6 or 7, this
Incentive Stock Option shall be exercisable with respect to Twenty-Five Percent
(25%) of the shares of Common Stock subject to the Option on the first annual
anniversary of the Date of Grant and then with respect to another Six and One
Quarter Percent (6.25%) of the Shares of Common Stock subject to this Option on
each quarterly (three-month) anniversary thereafter until this Option has
become exercisable with respect to One Hundred Percent (100%) of the shares of
Common Stock subject to this Option, provided Participant is still employed by

 

 

the Company or any Subsidiary at each such time.  Once this Incentive Stock Option has become
exercisable in accordance with the preceding sentence, it shall continue to be
exercisable until the earlier of the termination of the Participant’s rights
hereunder pursuant to paragraphs 3, 4, 5, 6 or 7 or until the Expiration
Date.  A partial exercise of this
Incentive Stock Option shall not affect Participant’s right to exercise this
Incentive Stock Option with respect to the remaining shares, subject to the
conditions of the Plan and this Agreement.

(c)                                  Method of Exercise and Payment for Shares. 
This Incentive Stock Option shall be exercised by delivering written
notice to the attention of the Company’s Secretary or his designee at the
Company’s principal office located at 1375 Peachtree Street, Level A, Atlanta,
GA 30309.  The exercise date shall be (i)
in the case of notice by mail, the date of postmark, or (ii) if delivered in
person, the date of delivery.  Such
notice shall be accompanied by payment of the Option price in full, in cash or
cash equivalent acceptable to the Administrator, or, if the Administrator in
its discretion permits, (i) by the surrender of shares of Common Stock
that Participant has owned for at least six months with an aggregate Fair
Market Value (determined as of the preceding business day) which, together with
any cash or cash equivalent Participant pays, is not less than the Option price
of the number of shares of Common Stock for which the Incentive Stock Option is
being exercised, (ii) by a cashless exercise through a broker, (iii) by
such other medium of payment as the Administrator in its discretion shall
authorize or (iv) by any combination of the aforementioned methods of
payment.

(d)                                 Nontransferability. 
This Incentive Stock Option is nontransferable except by will or by the
laws of descent and distribution.  During
Participant’s lifetime, only Participant may exercise this Incentive Stock
Option. No right or interest of Participant in this Incentive Stock Option
shall be liable for, or subject to, any lien, obligation or liability of the
Participant.

(e)                                  Shareholder Rights. 
Participant shall not have any rights as a shareholder with respect to
shares of Common Stock subject to this Incentive Stock Option until the proper
exercise of such Incentive Stock Option, the payment of the Option price and
any applicable withholding taxes, and the issuance to Participant of the certificates
representing the shares of Common Stock for which the Incentive Stock Option is
exercised.

3.                                       Exercise in the Event of Death. 
This Incentive Stock Option shall be exercisable for all or part of the
number of shares of Common Stock that Participant is entitled to purchase
pursuant to paragraph 2(a) and (b) as of the date of Participant’s death,
reduced by the number of shares for which Participant previously exercised the
Incentive Stock Option, in the event Participant dies while employed by the Company
or any Subsidiary and prior to the Expiration Date and prior to the termination
of the Participant’s rights under paragraphs 4, 5, 6 or 7.  In that event, this Incentive Stock Option
may be exercised by Participant’s estate, or the person or persons to whom Participant’s
rights under this Incentive Stock Option shall pass by will or the laws of
descent and distribution.  In that event,
Participant’s estate or such persons may exercise this Incentive Stock Option
during the remainder of the period preceding the Expiration Date or within 180
days of the date Participant dies, whichever is shorter.

4.                                       Exercise in the Event of Disability. 
This Incentive Stock Option shall be exercisable for all or part of the
number of shares of Common Stock that Participant is entitled to 

 

 

2

 

purchase pursuant to paragraph 2(a) and (b) as of the
date Participant becomes Permanently and Totally Disabled (as defined below),
reduced by the number of shares for which Participant previously exercised the
Incentive Stock Option, if Participant becomes permanently and totally disabled
within the meaning of Section 22(e)(3) of the Code (“Permanently and
Totally Disabled”) while employed by the Company or any Subsidiary and prior to
the Expiration Date and prior to the termination of Participant’s rights under
paragraphs 3, 5, 6 or 7.  In that
event, Participant may exercise this Incentive Stock Option during the
remainder of the period preceding the Expiration Date or within 180 days of the
date he ceases to be employed by the Company or any Subsidiary on account of
being Permanently and Totally Disabled, whichever is shorter.  The Administrator, in its sole discretion,
shall determine whether Participant is Permanently and Totally Disabled for
purposes of this paragraph 4.

5.                                       Exercise in the Event of Retirement. 
This Incentive Stock Option shall be exercisable for all or part of the
number of shares of Common Stock that Participant is entitled to purchase
pursuant to paragraph 2(a) and (b) as of the date Participant Retires (as
defined below), reduced by the number of shares for which Participant
previously exercised the Incentive Stock Option, if Participant Retires (as
defined below) while employed by the Company or any Subsidiary and prior to the
Expiration Date and prior to the termination of Participant’s rights under
paragraphs 3, 4, 6 or 7.  In that
event, Participant may exercise this Option during the remainder of the period
preceding the Expiration Date or within 30 days of the date Participant
Retires, whichever is shorter.  For
purposes of this Agreement, Participant Retires whenever Participant terminates
employment with the Company or any Subsidiary on account of retirement under
any tax-qualified retirement plan of the Company in which Participant
participates.

6.                                       Exercise After Termination of Employment. 
This Incentive Stock Option shall be exercisable for all or part of the
number of shares that Participant is entitled to purchase pursuant to paragraph
2(a) and (b) as of the date Participant ceases to be employed by the Company or
any Subsidiary, reduced by the number of shares for which Participant
previously exercised the Incentive Stock Option, if Participant ceases to be
employed by the Company or any Subsidiary other than on account of death or
Disability or because he Retires prior to the Expiration Date and prior to the
termination of Participant’s rights under paragraphs 3, 4, 5 or 7.  In that event, Participant may exercise this
Incentive Stock Option during the remainder of the period preceding the
Expiration Date or until the date that is 30 days after the date Participant
ceases to be employed by the Company or any Subsidiary other than on account of
death or Disability or because Participant Retires, whichever is shorter.

7.                                       Termination of Employment for Cause. 
Notwithstanding any other provision of this Agreement, all rights
hereunder will be immediately discontinued and forfeited, and the Company shall
not have any further obligation hereunder to Participant and the Option will
not be exercisable for any number of shares of Common Stock (even if the Option
previously became exercisable), on and after the time Participant is discharged
from employment with the Company or any Subsidiary for Cause.

8.                                       Investment Representations. 
In connection with the acquisition of this Option, Participant
represents and warrants as follows:

(a)                                  Participant is acquiring this Option and,
upon exercise of the Option, will be acquiring shares of Common Stock for
investment for Participant’s own account,

 

 

3

 

not as a nominee or agent, and not with a view to or
for resale in connection with, any distribution thereof.

(b)                                 Participant has a pre-existing
business or personal relationship with the Company or one of its directors,
officers or controlling persons and by reason of Participant’s business or
financial experience, has, and could be reasonably assumed to have, the
capacity to evaluate the merits and risks of purchasing shares of Common Stock
and to make an informed investment decision with respect thereto and to protect
Participant’s interest in connection with the acquisition of this Option and
shares of Common Stock.

9.                                       Minimum Exercise.  This Incentive Stock Option may not be
exercised for less than       shares of Common Stock
unless it is exercised for the full number of shares that remain subject to the
Incentive Stock Option.

10.                                 Fractional Shares.  Fractional shares shall not be issuable
hereunder, and when any provision hereof may entitle
Participant to a fractional share, such fraction shall be disregarded.

11.                                 Tax Withholding and
Reporting.  Participant is
responsible for satisfying in cash or cash equivalent any income and employment
(including without limitation Social Security and Medicare) tax withholding
obligations attributable to participation in the Plan as a result of the grant
or exercise.  The Company shall comply
with all such reporting and other requirements relating to the administration
of the Plan and the grant, exercise and vesting of this Incentive Stock Option
as applicable law requires.

12.                                 Change in
Capital Structure.  The
terms of this Incentive Stock Option shall be adjusted in accordance with the
terms and conditions of the Plan as the Administrator determines is equitably
required in the event the Company effects one or more stock
dividends, stock split-ups, subdivisions or consolidations of shares or other
similar changes in capitalization.

13.                                 Notification Upon
Sale.  Participant shall give written
notice to the Company’s Secretary at the Company’s principal office located at 1375
Peachtree Street, Level A, Atlanta, GA 30309, if Participant
sells or otherwise disposes of any shares of Common Stock acquired under this
Incentive Stock Option before the expiration of the later of the two-year
period beginning on the Date of Grant or the one-year period beginning on the
date that Participant exercised this Incentive Stock Option with respect to
such shares.

14.                                 No Right
to Continued Employment.  This Incentive Stock Option does not confer
upon Participant any right with respect to continuance of
employment by the Company or any Subsidiary, nor shall it interfere in any way
with the right of the Company or any Subsidiary to terminate Participant’s employment
at any time.

15.                                 Participant Bound
by Plan.  Participant hereby
acknowledges receipt of a copy of the Plan and agrees to be bound by all the terms
and provisions of the Plan as it may be amended from time to time in accordance
with the terms thereof, provided that no such amendment shall deprive
Participant, without Participant’s consent, of this Incentive Stock Option or
any rights thereunder.  Pursuant to the
Plan, the Company’s Board of Directors is authorized to adopt rules and
regulations not inconsistent with the Plan as it shall deem appropriate and
proper.  A copy of this Plan in its
present form is available on the Company’s intranet site at                    .

 

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16.                                 Binding Effect.  Subject to the limitations stated above and
in the Plan, this Agreement shall be binding upon and inure to the benefit of
the legatees, distributees, transferees and personal representatives of
Participant and the successors of the Company.

17.                                 Conflicts.  In the event
of any conflict between the provisions of
the Plan and the provisions of this
Agreement, the provisions of the Plan shall govern.  All references herein to the Plan shall mean
the Plan as in effect on the date hereof.

18.                                 Governing Law. 
This Agreement shall be governed by the laws of the State of Delaware, except to the extent federal
law applies.

                                                IN WITNESS WHEREOF, the Company has
caused this Agreement to be signed by a duly authorized officer, and
Participant has affixed his signature hereto.

 

	
   

  	
  COMPANY:

  
	
   

  	
   

  	
   

  
	
   

  	
  EARTHLINK,
  INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PARTICIPANT:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SEAL)

  
	
   

  	
  Participant

  
	
   

  	
   

  	
   

  
				

 

 

5

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