Exhibit 10.5

 

EARTHLINK, INC.

2006 EQUITY AND CASH INCENTIVE PLAN

 

Restricted Stock Unit Agreement

 

No. of Restricted Stock

Units Awarded Hereunder:                                               

 

THIS RESTRICTED STOCK UNIT AGREEMENT (this “Agreement”) dated as of the       
day of                     , 200    , between EarthLink, Inc., a Delaware
corporation (the “Company”), and                                        (the
“Participant”) is made pursuant and subject 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.

 

1.             GRANT OF RESTRICTED STOCK UNITS.  PURSUANT TO THE PLAN, THE
COMPANY, ON                           , 200      (THE “DATE OF GRANT”), GRANTED
TO THE PARTICIPANT                     RESTRICTED STOCK UNITS, EACH RESTRICTED
STOCK UNIT CORRESPONDING TO ONE SHARE OF THE COMMON STOCK OF THE COMPANY (THIS
“AWARD”).  SUBJECT TO THE TERMS AND CONDITIONS OF THE PLAN, EACH RESTRICTED
STOCK UNIT REPRESENTS AN UNSECURED PROMISE OF THE COMPANY TO DELIVER, AND THE
RIGHT OF THE PARTICIPANT TO RECEIVE, ONE SHARE OF THE COMMON STOCK OF THE
COMPANY AT THE TIME AND ON THE TERMS AND CONDITIONS SET FORTH HEREIN.  AS A
HOLDER OF RESTRICTED STOCK UNITS, 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)           EXPIRATION DATE.  THIS AWARD SHALL EXPIRE AT 11:59 P.M. ON
                                 , 200     (THE “EXPIRATION DATE”).  IN NO EVENT
SHALL THE EXPIRATION DATE BE LATER THAN 10 YEARS FROM THE DATE OF GRANT.

 

(B)           VESTING OF AWARD.

 

(I)            IN GENERAL.  EXCEPT AS OTHERWISE PROVIDED BELOW,
                             PERCENT (     %) OF THE OUTSTANDING RESTRICTED
STOCK UNITS SHALL BECOME EARNED AND PAYABLE ON THE FIRST ANNUAL ANNIVERSARY OF
THE DATE OF GRANT AND AN ADDITIONAL                         PERCENT (      %) OF
THE RESTRICTED STOCK UNITS SHALL BECOME PAYABLE ON EACH SUBSEQUENT ANNUAL
ANNIVERSARY THEREAFTER UNTIL ONE HUNDRED PERCENT (100%) OF THE RESTRICTED STOCK
UNITS HAVE BECOME EARNED AND PAYABLE, PROVIDED THE PARTICIPANT HAS BEEN
CONTINUOUSLY EMPLOYED BY, OR PROVIDING SERVICES TO, THE COMPANY OR AN AFFILIATE
FROM THE DATE OF GRANT UNTIL EACH SUCH TIME.

 

(II)           VESTING DATE.  OUTSTANDING RESTRICTED STOCK UNITS SHALL BE
FORFEITABLE UNTIL THEY BECOME EARNED AND PAYABLE AS DESCRIBED ABOVE.  EACH DATE
UPON WHICH RESTRICTED STOCK UNITS BECOME EARNED AND PAYABLE SHALL BE REFERRED TO
AS A “VESTING DATE” WITH RESPECT TO SUCH NUMBER OF RESTRICTED STOCK UNITS.

 

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(C)           SETTLEMENT OF AWARD.  SUBJECT TO THE TERMS OF THIS SECTION 2 AND
SECTION 3 BELOW, AND EXCEPT TO THE EXTENT THE PARTICIPANT DEFERS RECEIPT OF SUCH
SHARES OF COMMON STOCK PURSUANT TO SECTION 8 BELOW, THE COMPANY SHALL ISSUE TO
THE PARTICIPANT ONE SHARE OF COMMON STOCK FOR EACH RESTRICTED STOCK UNIT THAT
HAS BECOME EARNED AND PAYABLE UNDER SECTION 2(B) ABOVE AND SHALL DELIVER TO THE
PARTICIPANT CERTIFICATES REPRESENTING SUCH SHARES AS SOON AS PRACTICABLE AFTER
THE RESPECTIVE VESTING DATE.  AS A CONDITION TO THE SETTLEMENT OF THE AWARD, THE
PARTICIPANT SHALL BE REQUIRED TO PAY ANY REQUIRED WITHHOLDING TAXES ATTRIBUTABLE
TO THE AWARD IN CASH OR CASH EQUIVALENT ACCEPTABLE TO THE COMMITTEE.  HOWEVER,
THE COMPANY IN ITS DISCRETION MAY, BUT IS NOT REQUIRED TO, ALLOW THE PARTICIPANT
TO SATISFY ANY SUCH APPLICABLE WITHHOLDING TAXES (I) BY ALLOWING THE PARTICIPANT
TO SURRENDER SHARES OF COMMON STOCK THAT THE PARTICIPANT ALREADY OWNS (BUT ONLY
FOR THE MINIMUM REQUIRED WITHHOLDING), (II) THROUGH A CASHLESS TRANSACTION
THROUGH A BROKER, (III) BY SUCH OTHER MEDIUM OF PAYMENT AS THE COMMITTEE SHALL
AUTHORIZE OR (IV) BY ANY COMBINATION OF THE ALLOWABLE METHODS OF PAYMENT SET
FORTH HEREIN.

 

3.             TERMINATION OF AWARD.  NOTWITHSTANDING ANY OTHER PROVISION OF
THIS AGREEMENT, OUTSTANDING RESTRICTED STOCK UNITS THAT HAVE NOT BECOME EARNED
AND PAYABLE PRIOR TO THE EXPIRATION DATE SHALL EXPIRE AND MAY NOT BECOME EARNED
AND PAYABLE AFTER SUCH TIME.  ADDITIONALLY, ANY RESTRICTED STOCK UNITS THAT HAVE
NOT BECOME EARNED AND PAYABLE ON OR BEFORE THE TERMINATION OF THE PARTICIPANT’S
EMPLOYMENT WITH THE COMPANY AND ANY AFFILIATE SHALL EXPIRE AND MAY NOT BECOME
EARNED AND PAYABLE AFTER SUCH TIME.

 

4.             SHAREHOLDER RIGHTS.  THE PARTICIPANT SHALL NOT HAVE ANY RIGHTS AS
A SHAREHOLDER WITH RESPECT TO SHARES OF COMMON STOCK SUBJECT TO ANY RESTRICTED
STOCK UNITS UNTIL ISSUANCE OF THE CERTIFICATES REPRESENTING SUCH SHARES OF
COMMON STOCK.  THE COMPANY MAY INCLUDE ON ANY CERTIFICATES REPRESENTING SHARES
OF COMMON STOCK ISSUED PURSUANT TO THIS AWARD SUCH LEGENDS REFERRING TO ANY
REPRESENTATIONS, RESTRICTIONS OR ANY OTHER APPLICABLE STATEMENTS AS THE COMPANY,
IN ITS DISCRETION, SHALL DEEM APPROPRIATE.

 

5.             TRANSFERABILITY.  EXCEPT AS PROVIDED HEREIN, THIS AWARD IS
NONTRANSFERABLE EXCEPT BY WILL OR THE LAWS OF DESCENT AND DISTRIBUTION.  IF THIS
AWARD IS TRANSFERRED BY WILL OR THE LAWS OF DESCENT AND DISTRIBUTION, THE AWARD
MUST BE TRANSFERRED IN ITS ENTIRETY TO THE SAME PERSON OR PERSONS OR ENTITY OR
ENTITIES.  NOTWITHSTANDING THE FOREGOING, THE PARTICIPANT, AT ANY TIME PRIOR TO
THE PARTICIPANT’S DEATH, MAY TRANSFER ALL OR ANY PORTION OF THIS AWARD TO THE
PARTICIPANT’S CHILDREN, GRANDCHILDREN, SPOUSE, ONE OR MORE TRUSTS FOR THE
BENEFIT OF SUCH FAMILY MEMBERS OR A PARTNERSHIP IN WHICH SUCH FAMILY MEMBERS ARE
THE ONLY PARTNERS, ON SUCH TERMS AND CONDITIONS AS ARE APPROPRIATE FOR SUCH
TRANSFEREES TO BE INCLUDED IN THE CLASS OF TRANSFEREES WHO MAY RELY ON A FORM
S-8 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 TO SELL SHARES
RECEIVED PURSUANT TO THE AWARD.  ANY SUCH TRANSFER WILL BE PERMITTED ONLY IF (I)
THE PARTICIPANT DOES NOT RECEIVE ANY CONSIDERATION FOR THE TRANSFER AND (II) THE
COMMITTEE EXPRESSLY APPROVES THE TRANSFER.  ANY TRANSFEREE TO WHOM THIS AWARD IS
TRANSFERRED SHALL BE BOUND BY THE SAME TERMS AND CONDITIONS THAT GOVERNED THE
AWARD DURING THE TIME IT WAS HELD BY THE PARTICIPANT (WHICH TERMS AND CONDITIONS
SHALL STILL BE READ FROM THE PERSPECTIVE OF THE PARTICIPANT); PROVIDED, HOWEVER,
THAT SUCH TRANSFEREE MAY NOT TRANSFER THE AWARD EXCEPT THAN BY WILL OR THE LAWS
OF DESCENT AND DISTRIBUTION.  ANY SUCH TRANSFER SHALL BE EVIDENCED BY AN
APPROPRIATE WRITTEN DOCUMENT THAT THE PARTICIPANT EXECUTES AND THE PARTICIPANT
SHALL DELIVER A COPY THEREOF TO THE COMMITTEE ON OR BEFORE THE EFFECTIVE DATE OF
THE TRANSFER.  NO RIGHT OR INTEREST OF THE PARTICIPANT OR ANY TRANSFEREE

 

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IN THIS AWARD SHALL BE LIABLE FOR, OR SUBJECT TO, ANY LIEN, LIABILITY OR
OBLIGATION OF THE PARTICIPANT OR TRANSFEREE.

 

6.             CASH DIVIDENDS.  FOR SO LONG AS THE PARTICIPANT HOLDS OUTSTANDING
RESTRICTED STOCK UNITS, IF THE COMPANY PAYS ANY CASH DIVIDENDS ON ITS COMMON
STOCK, THEN THE COMPANY IN ITS DISCRETION (A) MAY PAY THE PARTICIPANT IN CASH
FOR EACH OUTSTANDING RESTRICTED STOCK UNIT COVERED BY THIS AWARD AS OF THE
RECORD DATE FOR SUCH DIVIDEND, LESS ANY REQUIRED WITHHOLDING TAXES, THE PER
SHARE AMOUNT OF SUCH DIVIDEND OR (B) MAY INCREASE THE NUMBER OF OUTSTANDING
RESTRICTED STOCK UNITS COVERED BY THIS AWARD BY THE NUMBER OF RESTRICTED STOCK
UNITS, ROUNDED DOWN TO THE NEAREST WHOLE NUMBER, EQUAL TO (I) THE PRODUCT OF THE
NUMBER OF THE PARTICIPANT’S OUTSTANDING RESTRICTED STOCK UNITS AS OF THE RECORD
DATE FOR SUCH DIVIDEND MULTIPLIED BY THE PER SHARE AMOUNT OF THE DIVIDEND
DIVIDED BY (II) THE FAIR MARKET VALUE OF A SHARE OF COMMON STOCK ON THE PAYMENT
DATE OF SUCH DIVIDEND.  IN THE EVENT THE COMPANY AWARDS ADDITIONAL RESTRICTED
STOCK UNITS PURSUANT TO THIS SECTION 6, SUCH RESTRICTED STOCK UNITS SHALL BE
SUBJECT TO THE SAME TERMS AND CONDITIONS SET FORTH IN THE PLAN AND HEREIN AS THE
OUTSTANDING RESTRICTED STOCK UNITS WITH RESPECT TO WHICH THEY WERE GRANTED. 
NOTWITHSTANDING THE FOREGOING, THE COMPANY IN ITS SOLE DISCRETION MAY CHOOSE NOT
TO PAY THE CASH AMOUNTS DESCRIBED ABOVE AND NOT TO INCREASE THE NUMBER OF
OUTSTANDING RESTRICTED STOCK UNITS COVERED BY THIS AWARD, AND THIS SECTION 6
SHALL NOT CONSTITUTE ANY AGREEMENT OR COMMITMENT THAT THE COMPANY TAKE ANY SUCH
ACTIONS.  THE ADDITIONAL PAYMENTS OR AWARDS, IF ANY, PURSUANT TO THIS SECTION 6
SHALL BE TREATED AS A SEPARATE ARRANGEMENT.  IF THE COMPANY IS TO PAY THE
PARTICIPANT SUCH CASH OR INCREASE THE NUMBER OF RESTRICTED STOCK UNITS COVERED
BY THE AWARD AS A RESULT OF ANY SUCH CASH DIVIDENDS, THEN THE CASH SHALL BE
PAID, OR THE RESTRICTED STOCK UNITS SHALL BE INCREASED, AS APPLICABLE, NO LATER
THAN THE 15TH DAY OF THE THIRD MONTH FOLLOWING THE CALENDAR YEAR IN WHICH THE
RELEVANT CASH DIVIDENDS WERE PAID.

 

7.             CHANGE IN CAPITAL STRUCTURE.  THE TERMS OF THIS AWARD SHALL BE
ADJUSTED IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF THE PLAN AS THE
COMMITTEE DETERMINES IS EQUITABLY REQUIRED IN THE EVENT THE COMPANY EFFECTS ONE
OR MORE STOCK DIVIDENDS, STOCK SPLITS, SUBDIVISIONS OR CONSOLIDATIONS OF SHARES
OR OTHER SIMILAR CHANGES IN CAPITALIZATION.

 

8.             DEFERRAL OF COMMON STOCK.  IF THE PARTICIPANT IS ELIGIBLE TO
PARTICIPATE IN THE DEFERRED COMPENSATION PROGRAM, THEN THE PARTICIPANT MAY ELECT
TO DEFER THE RECEIPT OF COMMON STOCK ISSUABLE PURSUANT TO THIS AWARD IN
ACCORDANCE WITH RULES THE COMMITTEE PRESCRIBES FOR THE DEFERRED COMPENSATION
PROGRAM.  IF THE PARTICIPANT ELECTS TO DEFER THE RECEIPT OF COMMON STOCK
HEREUNDER, THE SHARES OF COMMON STOCK SHALL BE DEFERRED AND CREDITED UNDER THE
DEFERRED COMPENSATION PROGRAM AND SHALL BECOME PAYABLE AND ISSUABLE PURSUANT TO
THE TERMS AND AT SUCH TIME OR TIMES AS SET FORTH IN THE DEFERRED COMPENSATION
PROGRAM, BUT WILL BE PAID, IF AT ALL, ONLY IN SHARES OF COMMON STOCK.

 

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9.             NOTICE.  ANY NOTICE OR OTHER COMMUNICATION GIVEN PURSUANT TO THIS
AGREEMENT, OR IN ANY WAY WITH RESPECT TO THE AWARD, SHALL BE IN WRITING AND
SHALL BE PERSONALLY DELIVERED OR MAILED BY UNITED STATES REGISTERED OR CERTIFIED
MAIL, POSTAGE PREPAID, RETURN RECEIPT REQUESTED, TO THE FOLLOWING ADDRESSES:

 

If to the Company:

EarthLink, Inc.

 

1375 Peachtree Street - Level A

 

Atlanta, Georgia 30309

 

Attention: General Counsel

 

 

If to the Participant:

 

 

 

 

 

 

 

 

 

10.           NO RIGHT TO CONTINUED EMPLOYMENT OR SERVICE.  NEITHER THE PLAN,
THE GRANTING OF THIS AWARD NOR ANY OTHER ACTION TAKEN PURSUANT TO THE PLAN OR
THIS AWARD CONSTITUTES OR IS EVIDENCE OF ANY AGREEMENT OR UNDERSTANDING, EXPRESS
OR IMPLIED, THAT THE COMPANY OR ANY AFFILIATE WILL RETAIN THE PARTICIPANT AS AN
EMPLOYEE OR OTHER SERVICE PROVIDER FOR ANY PERIOD OF TIME OR AT ANY PARTICULAR
RATE OF COMPENSATION.

 

11.           AGREEMENT TO TERMS OF PLAN AND AGREEMENT.  THE PARTICIPANT HAS
RECEIVED A COPY OF THE PLAN, HAS READ AND UNDERSTANDS THE TERMS OF THE PLAN AND
THIS AGREEMENT, AND AGREES TO BE BOUND BY THEIR TERMS AND CONDITIONS.

 

12.           TAX CONSEQUENCES.  THE PARTICIPANT ACKNOWLEDGES THAT (I) THERE MAY
BE ADVERSE TAX CONSEQUENCES UPON ACQUISITION OR DISPOSITION OF THE SHARES OF
COMMON STOCK ISSUED PURSUANT TO THIS AWARD AND (II) PARTICIPANT SHOULD CONSULT A
TAX ADVISER PRIOR TO SUCH ACQUISITION OR DISPOSITION.  THIS AWARD IS INTENDED TO
BE EXEMPT FROM CODE SECTION 409A, EXCEPT TO THE EXTENT THE AWARD IS DEFERRED
UNDER THE DEFERRED COMPENSATION PROGRAM PURSUANT TO SECTION 15.12 OF THE PLAN. 
HOWEVER, THE PARTICIPANT IS SOLELY RESPONSIBLE FOR DETERMINING TAX CONSEQUENCES
OF THE AWARD AND FOR SATISFYING THE PARTICIPANT’S TAX OBLIGATIONS WITH RESPECT
TO THE AWARD (INCLUDING, BUT NOT LIMITED TO, ANY INCOME OR EXCISE TAXES
RESULTING FROM THE APPLICATION OF CODE SECTION 409A), AND THE COMPANY SHALL NOT
BE LIABLE IF THIS AWARD IS SUBJECT TO CODE SECTION 409A.

 

13.           BINDING EFFECT.  SUBJECT TO THE LIMITATIONS STATED ABOVE AND IN
THE PLAN, THIS AGREEMENT SHALL BE BINDING UPON AND INURE TO THE BENEFIT OF THE
DISTRIBUTEES, LEGATEES AND PERSONAL REPRESENTATIVES OF THE PARTICIPANT AND THE
SUCCESSORS OF THE COMPANY.

 

14.           CONFLICTS.  IN THE EVENT OF ANY CONFLICT BETWEEN THE PROVISIONS OF
THE PLAN AND THE PROVISIONS OF THIS AGREEMENT, THE PROVISIONS OF THE PLAN SHALL
GOVERN.  ALL REFERENCES HEREIN TO THE PLAN SHALL MEAN THE PLAN AS IN EFFECT ON
THE DATE HEREOF.

 

15.           COUNTERPARTS.  THIS AGREEMENT MAY BE EXECUTED IN A NUMBER OF
COUNTERPARTS, EACH OF WHICH SHALL BE DEEMED AN ORIGINAL, BUT ALL OF WHICH
TOGETHER SHALL CONSTITUTE ONE IN THE SAME INSTRUMENT.

 

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16.           MISCELLANEOUS.  THE PARTIES AGREE TO EXECUTE SUCH FURTHER
INSTRUMENTS AND TAKE SUCH FURTHER ACTIONS AS MAY BE NECESSARY TO CARRY OUT THE
INTENT OF THE PLAN AND THIS AGREEMENT.  THIS AGREEMENT AND THE PLAN SHALL
CONSTITUTE THE ENTIRE AGREEMENT OF THE PARTIES WITH RESPECT TO THE SUBJECT
MATTER HEREOF.

 

17.           GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF
THE STATE OF DELAWARE, EXCEPT TO THE EXTENT FEDERAL LAW APPLIES.

 

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IN WITNESS WHEREOF, the Company has caused this Agreement to be signed by a duly
authorized officer, and the Participant has affixed his signature hereto.

 

 

COMPANY:

 

 

 

EARTHLINK, INC.

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

PARTICIPANT:

 

 

 

 

 

 

[Participant’s Name]

 

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