2005 EXECUTIVE INCENTIVE PLAN

 

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                                                                    EXHIBIT 10.1

 

                   2005 EXECUTIVE INCENTIVE COMPENSATION PLAN

 

 

         The following summary highlights key features of EasyLink Services's

Executive Incentive Compensation Plan (the "Plan").

 

I.       PURPOSE

 

         The Plan has been designed to motivate and reward key management

         employees whose efforts impact the performance of EasyLink Services

         Incorporated (the "Company") through the achievement of pre-established

         financial and individual objectives.

 

         Performance under the Plan is measured on the fiscal year and payments

         under the Plan are made annually.

 

II.      ELIGIBILITY

 

         Officers and key management employees may be eligible to participate in

         the plan, upon the recommendation by the Chief Executive Officer of the

         Company and approval by the Compensation Committee of the Board of

         Directors.

 

III.     AWARD CRITERIA

 

         The Compensation Committee of the Board of Directors must approve the

         Company performance objectives that are used to determine awards paid

         under this plan. For Fiscal Year (FY) 2005, the financial performance

         measures under the Plan will be:

 

                 Revenue

                 EBITDA

 

         In general, 100% of performance under this Plan will be based on

         financial objectives. As more fully described in Article VII, at the

         discretion of the Compensation Committee, up to 25% of any individual's

         award may be based on subjective factors such as individual performance

         or achievement of other goals not stated in the Plan. In addition, the

         Compensation Committee may, at its discretion, increase any

         individual's award by up to 25% of the award based on such factors.

         Accordingly, each Participant is eligible to receive no less than 75%

         of the award that would have been earned solely on the basis of

         financial performance of the Company (in the event that the minimum

         level of the individual's performance or other goals are not achieved),

         and is eligible for up to 125% of such award (in the event that the

         maximum level of the individual's performance or other goals are

         achieved).

 

IV.      TARGET AWARDS

 

         A Target Award percentage is established for each position eligible to

         participate in the Plan. Target Awards (TA's) may range from 10% to

         75%, depending on position, of each participant's base pay in effect

         at the conclusion of the performance period (or pro rata at the time of

         becoming a participant).

 

         Generally, the participants receive the TA when performance under the

         Plan meets, but does not exceed, the pre-established performance

         objectives.

 

 

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         Bonus eligible positions and respective target awards as a percentage

         of base salary are as follows:

 

                  Position                               Target Award

                  --------                               ------------

         Level One Executive                                  75%

         Level Two Executive                                  50%

         Level Three Executive                                30%

         Level Four Executive                                 20%

         Level Five Executive                                 10%

 

 

         Level One Executive - President and Chief Executive Officer

         Level Two Executive - Business unit managers with P&L responsibility

         including Executive Vice President and General Manager of TDS and TMS

         business units and Managing Director & VP International

         Level Three Executive - Direct reports to the CEO that have significant

         operating responsibility or key staff positions including EVP and

         General Counsel, SVP Corporate Development, VP & CFO, VP & Corporate

         Controller, VP Operations, VP Quality, VP Marketing and VP Telecom &

         Facilities.

         Level Four Executives - Vice Presidents reporting to Level Three

         Executives; VP Product Marketing

         Level Five Executives - Director level positions reporting to first