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EARTHLINK SHARED SERVICES, LLC
2014 SHORT-TERM INCENTIVE BONUS PLAN
THIS 2014 SHORT-TERM INCENTIVE BONUS PLAN (this “Plan”)
of EarthLink Shared Services, LLC, a
Delaware limited liability company (the “Company”),
for the benefit of the eligible employees described herein, is
adopted as of the 17th day of February 2014. This Plan replaces and supersedes the terms of the EarthLink Shared
Services, LLC 2013 Short-Term Incentive Bonus Plan (the “2013 Plan”) as in effect prior to the adoption of this Plan.
WITNESSETH:
WHEREAS, the Board of Directors of the Company has approved the Plan as set forth herein.
NOW, THEREFORE, the Company hereby establishes the Plan as set forth below.
1. STATEMENT OF PURPOSE
1.1
Statement of Purpose
. The purpose of the Plan is to encourage the creation of shareholder value by
establishing a direct link between Adjusted EBITDA (as defined below), Total Free Cash Flow (as defined below),
Revenue (as defined below) and other Corporate Performance Objectives (as defined below) achieved and the incentive
compensation of Participants in the Plan.
Participants contribute to the success of EarthLink Holdings Corp (“Earthlink”)
and its Affiliates (as defined
below) through the application of their skills and experience in fulfilling the responsibilities associated with their
positions. EarthLink and its Affiliates desire 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 earnings (or losses) from continuing operations before interest income or expense
and other, net, income taxes, depreciation and amortization, excluding stock-
based compensation expense, gain (loss) on
investments, net, impairment of goodwill and intangible assets, and restructuring, acquisition and integration-
related
costs of EarthLink and its Affiliates. The calculation of Adjusted EBITDA shall include any compensation expense
attributable to the Bonus Awards to be paid under the Plan.
“ Affiliate ”
means any entity that is part of a controlled group of corporations or is under common control with
EarthLink within the meaning of Code Sections 1563(a), 414(b) or 414(c), except that, in making any such
determination, fifty percent (50%) shall be substituted for eighty percent (80%) each place it appears under such Code
Sections and related regulations.
“ Bonus Award ” means the sum of (a) the Participant’s Performance Bonus and (b) the Participant’
s
Discretionary Bonus, if any, for the Bonus Period.
“ Bonus Period ”
means the period beginning January 1 and ending December 31 of the calendar year, 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 EarthLink or any of its Affiliates or any supervisory personnel of the Participant;