Earthlink 2008 Annual Report Download - page 179

local withholding taxes and any sums owing to the Company shall be deducted from severance pay and benefits due under this Plan.
Delay in Payment for Specified Employees
Notwithstanding any other provision of this Plan, if an otherwise eligible employee is a Specified Employee (as defined below), and if the
severance package payable to such Specified Employee hereunder is not otherwise exempt from Section 409A of the Code, then, to the extent
necessary to comply with Section 409A, no payments may be made hereunder (including, if necessary, any payments for COBRA benefits)
before the date which is six months after the Specified Employee’s separation from service within the meaning of Section 409A or, if earlier, the
date of death of the Specified Employee. Because the amounts paid pursuant to this Plan will be paid in all events by the 15th day of the third
month following the end of the calendar year in which employee’s right to the payments vest, all amounts payable hereunder should be exempt
from Section 409A. These Specified Employee six-month delay provisions will only be applicable if it is subsequently determined that the
amounts paid pursuant to this Plan are not exempt from Section 409A.
For purposes of this Plan, “Specified Employee” means an employee who is (i) an officer of the Company having annual compensation greater
than $135,000 (with certain adjustments for inflation after 2005), (ii) a five-percent owner of the Company or (iii) a one-percent owner of the
Company having annual compensation greater than $150,000. For purposes of this Section, no more than 50 employees (or, if lesser, the greater
of three or 10 percent of the employees) shall be treated as officers. Employees who (i) normally work less than 17 1/2 hours per week,
(ii) normally work not more than 6 months during any year, (iii) have not attained age 21 or (iv) are included in a unit of employees covered by
an agreement which the Secretary of Labor finds to be a collective bargaining agreement between employee representatives and the Company
(except as otherwise provided in regulations issued under the Code) shall be excluded for purposes of determining the number of officers. For
purposes of this Section, the term “five- percent owner” (“one-percent owner”) means any person who owns more than five percent (One
percent) of the outstanding stock of the Company or stock possessing more than five percent (one percent) of the total combined voting power of
all stock of the Company. For purposes of determining ownership, the attribution rules of Section 318 of the Code shall be applied by
substituting “five percent” for “50 percent”
in Section 318(a)(2) and the rules of Sections 414(b), 414(c) and 414(m) of the Code shall not apply.
For purposes of this Section, the term “compensation” has the meaning given such term by Section 414(q)(4) of the Code. The determination of
whether the employee is a Specified Employee will be based on a December 31 identification date such that if the employee satisfies the above
definition of Specified Employee at any time during the 12-month period ending on December 31, he will be treated as a Specified Employee if
he has a termination of employment during the 12-month period beginning on the first day of the fourth month following the identification date.
This definition is intended to comply with the specified employee rules of Section 409A(a)(2)(B)(i) of the Code and shall be interpreted
accordingly.
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