Exhibit 10.4
EARTHLINK, INC.
Retention Incentive Award
Agreement
Stated Dollar Value of Retention
Incentive Award
Granted Hereunder:
$2,200,000
THIS RETENTION INCENTIVE AWARD
AGREEMENT (this “Agreement”) dated as of the 17th day
of February, 2009, between EarthLink, Inc., a Delaware
corporation (the “Company”), and Rolla P. Huff (the
“Participant”) is a stand-alone incentive award that is
made outside of but subject by this reference to the provisions of
the Company’s 2006 Equity and Cash Incentive 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, except that the term “Change
in Control Event” shall have the meaning given it in the
Employment Agreement dated December 30, 2008 between the
Participant and the Company (the “Employment
Agreement”).
1.
Grant of
Incentive Award . Pursuant to the Plan,
the Company, on February 3 2009 (the “Date of
Grant”), granted to the Participant an Incentive Award (as
defined in the Plan) with a stated dollar value of $2,200,000 (this
“Award”). Subject to the terms and conditions of
the Plan, this Award represents an unsecured promise of the Company
to pay, and the right of the Participant to receive, up to
$2,200,000, payable in cash, shares of the Common Stock of the
Company or a combination thereof, at the time and on the terms and
conditions set forth herein. As the holder of the Award, the
Participant has only the rights of a general unsecured creditor of
the Company.
2.
Terms and
Conditions . This Award is subject
to the following terms and conditions:
(a)
Vesting of
Award .
(i)
In
General .
(A)
This Award shall become earned and
payable as to fifty percent (50%) of its stated dollar value as of
the end of 2009, provided the Participant has been continuously
employed by, or providing services to, the Company or an Affiliate
from the Date of Grant through the end of 2009.
(B)
The remaining fifty percent (50%)
of the stated dollar value of the Award shall become earned and
payable in full as of the end of 2010, provided the Participant has
been continuously employed by, or providing services to, the
Company or an Affiliate from the Date of Grant through the end of
2010.
(ii)
Termination of
Employment On or After a Change in Control Event
.
(A)
Notwithstanding the foregoing, if
at any time on or after a Change in Control Event the
Participant’s employment is terminated (1) by
the
Company or an Affiliate for any
reason other than Cause and other than on account of “Total
Disability” (as such term is defined in the Employment
Agreement) or death or (2) by the Participant for “Good
Reason” (as such term is defined in the Employment
Agreement), then, to the extent the outstanding Award has not
become earned and payable in full, one hundred percent (100%) of
the remaining stated dollar value of the outstanding Award shall
become earned and payable in full as of the end of the year in
which occurs the termination of the Participant’s
employment.
(iii)
Termination of
Employment Other Than On or After a Change in Control
Event .
(A)
Notwithstanding the foregoing, if
at any time before a Change in Control Event and during 2009, the
Participant’s employment is terminated (1) by the
Company or an Affiliate for any reason other than Cause and other
than on account of Total Disability or death or (2) by the
Participant for Good Reason, the Award shall become earned and
payable, as of the end of 2009, with respect to that percentage of
its stated dollar value that equals fifty percent (50%) multiplied
by a fraction, the numerator of which equals the number of full or
partial months of 2009 during which the Participant remained
continuously employed by, or providing services to, the Company or
an Affiliate and the denominator of which is twelve (12).
Notwithstanding the immediately preceding sentence, however, if the
Participant’s employment is terminated (1) by the
Company or an Affiliate for any reason other than Cause and other
than on account of Total Disability or death or (2) by the
Participant for Good Reason and a Change in Control Event occurs
thereafter and before the end of 2009, one hundred percent (100%)
of the remaining stated dollar value of the Award shall become
earned and payable in full as of the end of 2009.
(B)
Notwithstanding the foregoing, if
at any time before a Change in Control Event and during 2010, the
Participant’s employment is terminated (1) by the
Company or an Affiliate for any reason other than Cause and other
than on account of Total Disability or death or (2) by the
Participant for Good Reason, the Award shall become earned and
payable, as of the end of 2010, with respect to that percentage of
its stated dollar value that equals the remaining fifty percent
(50%) multiplied by a fraction, the numerator of which is the
number of full or partial months of 2010 during which the
Participant remained continuously employed by, or providing
services to, the Company or an Affiliate and the denominator of
which is twelve (12). Notwithstanding the immediately preceding
sentence, however, if the Participant’s employment is
terminated (1) by the Company or an Affiliate for any reason
other than Cause and other than on account of Total Disability or
death or (2) by the Participant for Good Reason and a Change
in Control Event occurs thereafter and before the end of 2010, one
hundred percent (100%) of the remaining stated dollar value of the
Award shall become earned and payable in full as of the end of
2010.
2
(iv)
Vesting
Date . The Award shall be
forfeitable until it becomes earned and payable as described
above. Each date upon which the Award or any portion thereof
becomes earned and payable shall be referred to as a “Vesting
Date” with respect to the applicable stated dollar amount of
the Award.
(b)
Settlement of
Award . Subject to the terms
of this Section 2 and Sections 3 and 15 below, the Company
shall pay to the Participant the stated dollar value of the Award
that has become earned and payable under
Section 2(a) above as the Company may determine within
the 90 days following the applicable Vesting Date. Payment
shall be made in a single lump sum in cash, shares of Common Stock
of the Company (to the extent available for payment) or any
combination thereof, as the Company in its sole discretion shall
determine. As a condition to the settlement of the Award, the
Participant shall be required to pay any required withholding taxes
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