UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 17, 2007
EasyLink Services Corporation
(Exact name of registrant as specified in its charter)
Delaware 000-26371 13-3787073
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
33 Knightsbridge Road, Piscataway, New Jersey 08854
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (732) 652-3500
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
2007 Executive Incentive Plan
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On May 17, 2007, the Compensation Committee of the Board of Directors adopted a
2007 Executive Incentive Plan for the Company. The Company's 2007 executive
incentive compensation is based on achieving specified revenue and EBITDA
objectives. Officers and key management employees are eligible to participate
upon the recommendation of the Chief Executive Officer and the approval of the
Compensation Committee of the Board of Directors. Under the plan, a target award
based on percentage of base salary has been established for each participant,
which varies from 10% to 75% of base salary for the participant. The participant
may receive a bonus from 0% to 200% of the target award based upon the actual
level of under-achievement and/or over-achievement of the revenue and EBITDA
performance objectives.
At the discretion of the Compensation Committee, payments under the plan may be
made in cash or stock or a combination of cash and stock. All bonus payments
will be net of applicable withholding taxes. If bonus award payments under the
plan are made in shares of common stock instead of cash, then the value of the
shares issued in payment of the bonus is not treated as an expense item in the
EBITDA calculation for this purpose. All transaction expenses incurred in
connection with exploring or consummating strategic alternatives will also be
excluded from the EBITDA calculation.
The Compensation Committee retains full authority to approve final amounts,
which may be higher or lower than plan results. The Compensation Committee may
also approve the use of individual objectives as part of a participant's
performance criteria under the Plan. For 2007, the Compensation Committee has
determined that the absence of a going concern qualification in the report of
the Company's independent auditor on the Company's 2007 annual financial
statements is an individual objective for certain executives and is a
consideration in the determination of their 2007 bonus.
If there occurs a significant beneficial or adverse change in economic
conditions, the indications of growth or recession in the Company's business
segments, the nature of the operations of the Company, or applicable laws,
regulations or accounting practices, or other unanticipated matters which, in
the Company's judgment, have a substantial positive or negative effect on the
performance of the Company, the Compensation Committee may modify or revise the
performance objectives. These significant changes might, for example, result
from acquisitions or dispositions of assets or mergers.
Employees terminating prior to the payout date are not eligible for payment of
an award unless termination is due to retirement or economic reduction in force
or Change of Control.
Should a "Change of Control" occur during the year, participants will receive an
award in accordance with the Plan pro-rated through the date of the Change in
Control. The award will be based upon the Company's cumulative performance to
the budgeted Revenue and EBITDA objectives which are the basis for the full year
2007 Plan. Following a Change of Control, new objectives may be established by
the Chief Executive Officer for the remainder of the year consistent with
transition objectives such that eligible employees will have an opportunity to
earn their full year target bonus. If new objectives are not set after the
Change of Control for the remaining months of the year, then current Plan
objectives will apply.
The form of the 2007 Executive Incentive Plan is included in this filing as
Exhibit 10.1 and is incorporated by reference herein. The foregoing summary of
the terms of the 2007 Executive Incentive Plan is not complete and is qualified
in its entirety by reference to Exhibit 10.1 to this filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. Description
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10.1 2007 Executive Incentive Plan
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
EASYLINK SERVICES CORPORATION
(Registrant)
Date: May 22, 2007 By: /s/ Michael A. Doyle
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Name: Michael A. Doyle
Title: Vice President and Chief Financial Officer
EXHIBIT INDEX
Exhibit No. Description
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10.1 2007 Executive Incentive Plan