**Exhibit 10.3**

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EARTHLINK, INC.2006 EQUITY AND CASH INCENTIVE PLAN

Executive Retention Incentive Award Agreement

 

StatedDollar Value of Executive Retention Incentive Award

GrantedHereunder:  $                

 

THIS EXECUTIVE RETENTION INCENTIVE AWARD AGREEMENT(this “Agreement”) dated as of the 17th day of February, 2009, betweenEarthLink, Inc., a Delaware corporation (the “Company”), and                       (the “Participant”) is made pursuant and subject to the provisions of theCompany’s 2006 Equity and Cash Incentive Plan (the “Plan”), a copy of which isattached hereto.  All terms used hereinthat are defined in the Plan have the same meaning given them in the Plan,except that the term “Change in Control” shall have the same meaning given it inthe EarthLink Inc. Change-In-Control Accelerated Vesting and Severance Plan(the “CIC Plan”).

 

# 1.                                       Grant of IncentiveAward.  Pursuant to the Plan, theCompany, on February 3 2009 (the “Date of Grant”), granted to theParticipant an Incentive Award (as defined in the Plan) with a stated dollarvalue of $                    (this “Award”).  Subject to the terms andconditions of the Plan, this Award represents an unsecured promise of theCompany to pay, and the right of the Participant to receive, up to $                  ,payable in cash, shares of the Common Stock of the Company or a combinationthereof, at the time and on the terms and conditions set forth herein.  As the holder of the Award, the Participanthas only the rights of a general unsecured creditor of the Company.

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# 2.                                       Terms andConditions.  This Awardis subject to the following terms and conditions:

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## (a)                                  Vesting ofAward.

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### (i)                                     In General.

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##### (A)                              This Award shall becomeearned and payable as to fifty percent (50%) of its stated dollar value as ofthe end of 2009, provided the Participant has been continuously employed by, orproviding services to, the Company or an Affiliate from the Date of Grant throughthe end of 2009.

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##### (B)                                The remaining fifty percent(50%) of the stated dollar value of the Award shall become earned and payable infull as of the end of 2010, provided the Participant has been continuouslyemployed by, or providing services to, the Company or an Affiliate from theDate of Grant through the end of 2010.

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### (ii)                                  Termination of Employment Onor After a Change in Control.

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##### (A)                              Notwithstandingthe foregoing, if at any time on or after a Change in Control the Participant’semployment is terminated (1) by the Company or an Affiliate for any reasonother than Cause (as such term is defined 

 

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##### in the CIC Plan) and other than “On Accountof Disability” (as such term is defined in the CIC Plan) or death or (2) bythe Participant “For Good Reason” (as such term is defined in the CIC Plan),then, to the extent the outstanding Award has not become earned and payable infull, one hundred percent (100%) of the remaining stated dollar value of theoutstanding Award shall become earned and payable in full as of the end of theyear in which occurs the termination of the Participant’s employment.

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### (iii)                               PositionElimination.

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##### (A)                              Notwithstanding theforegoing, if at any time before a Change in Control and during 2009, theParticipant’s employment is terminated by the Company or an Affiliate as theresult of a position elimination, and the Participant is entitled to receivebenefits under any position elimination and severance plan maintained by theCompany or any Affiliate, the Award shall become earned and payable, as of theend of 2009, with respect to that percentage of its stated dollar value thatequals fifty percent (50%) multiplied by a fraction, the numerator of whichequals the number of full or partial months of 2009 during which theParticipant remained continuously employed by, or providing services to, theCompany or an Affiliate and the denominator of which is twelve (12). Notwithstandingthe immediately preceding sentence, however, if the Participant’s employment isterminated as a result of a position elimination during 2009 (and theParticipant is eligible to receive benefits as described above) and a Change inControl occurs thereafter and before the end of 2009, one hundred percent(100%) of the remaining stated dollar value of the Award shall become earnedand payable in full as of the end of 2009.

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##### (B)                                Notwithstanding the foregoing,if at any time before a Change in Control and during 2010, the Participant’semployment is terminated by the Company or an Affiliate as a result of aposition elimination, and the Participant is entitled to receive benefits underany position elimination severance plan maintained by the Company or anyAffiliate, 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 theremaining fifty percent (50%) multiplied by a fraction, the numerator of whichis the number of full or partial months of 2010 during which the Participantremained continuously employed by, or providing services to, the Company or anAffiliate and the denominator of which is twelve (12). Notwithstanding theimmediately preceding sentence, however, if the Participant’s employment isterminated as a result of a position elimination during 2010 (and theParticipant is eligible to receive benefits as described above) and a Change inControl occurs thereafter and before the end of 2010, one hundred percent(100%) of the remaining stated dollar value of the Award shall become earnedand payable in full as of the end of 2010.

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### (iv)                              Vesting Date.  The Award shall be forfeitable until itbecomes earned and payable as described above. Each date upon which the Award or any portion 

 

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### thereof becomes earned and payable shall bereferred to as a “Vesting Date” with respect to the applicable stated dollaramount of the Award.

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## (b)                                 Settlement ofAward.  Subject to the terms of this Section 2and Sections 3 and 15 below, the Company shall pay to the Participant the stateddollar value of the Award that has become earned and payable under Section 2(a) aboveas the Company may determine within the 90 days following the applicableVesting Date.  Payment shall be made in asingle lump sum in cash, shares of Common Stock of the Company (to the extentavailable for payment under the Plan) or any combination thereof, as theCompany in its sole discretion shall determine. As a condition to the settlement of the Award, the Participant shall berequired to pay any required withholding taxes attributable to the Award incash 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 applicablewithholding taxes by any other medium of payment as the Committee shallauthorize.

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# 3.                                       Termination ofAward.  Notwithstanding any otherprovision of this Agreement, the portion of the Award that have not becomeearned and payable as of the latest time set forth above, or on or before thetermination of the Participant’s employment with the Company and any Affiliate,shall expire and may not become earned and payable after such time, except asdescribed in Sections 2(a)(ii) and (iii) above.

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# 4.                                       ShareholderRights.  The Participant shall not haveany rights as a shareholder with respect to shares of Common Stock that may bedelivered with respect to the Award until issuance of the shares of CommonStock that are to be paid with respect to such Award.  The Company may include on any certificatesrepresenting shares of Common Stock issued pursuant to this Award such legendsreferring to any representations, restrictions or any other applicablestatements as the Company, in its discretion, shall deem appropriate.

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# 5.                                       Transferability.  Except as provided herein, this Award isnontransferable except by will or the laws of descent and distribution.  If this Award is transferred by will or thelaws of descent and distribution, the Award must be transferred in its entiretyto the same person or persons or entity or entities.  Notwithstanding the foregoing, theParticipant, at any time prior to the Participant’s death, may transfer all orany 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 inwhich such family members are the only partners, on such terms and conditionsas are appropriate for such transferees to be included in the class oftransferees who may rely on a Form S-8 registration statement under theSecurities Act of 1933 to sell shares received pursuant to the Award.  Any such transfer will be permitted only if (i) theParticipant does not receive any consideration for the transfer and (ii) theCommittee expressly approves the transfer. Any transferee to whom this Award is transferred shall be bound by thesame terms and conditions that governed the Award during the time it was heldby the Participant (which terms and conditions shall still be read from theperspective of the Participant); provided, however, that such transferee maynot transfer the Award except than by will or the laws of descent anddistribution.  Any such transfer shall beevidenced by an appropriate written document that the Participant and thetransferee execute and the Participant shall deliver a copy thereof to theCommittee on or before the effective date of the transfer.  No right or interest of the Participant

 

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# or any transferee in this Award shall beliable for, or subject to, any lien, liability or obligation of the Participantor transferee.

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# 6.                                       RestrictiveCovenants.

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(a)                                  In return forthis Award, the Participant agrees that during Participant’s employment, andfor a period of eighteen (18) calendar months following Participant’stermination of employment, that Participant will not, directly or indirectly, (i)(A) solicit,induce, recruit, or cause any employee of the Company or its Affiliates toresign employment with the Company or its Affiliates, or (B) participatein making hiring decisions, encourage the hiring of, or aid in the hiringprocess of any such employee on behalf of any employer other than the Companyand its Affiliates, or (ii) solicit any actual or prospective customers ofthe Company and its Affiliates with whom Participant had material business-relatedcontact while performing services for the Company and its Affiliates for thepurpose of selling products or services that compete with the business of theCompany.

 

(b)                                 This Award is conditionedupon the Participant’s compliance with the provisions of this Section 6.  In the event the Participant shall materiallybreach the provisions of this Section 6 and not cure or cease (asappropriate) such material breach within ten (10) days of receipt ofnotice thereof from the Company, the vesting and payments above shall terminateand Participant shall return to the Company the gross amount of all cashpayments paid in connection with this Award. Termination of such vesting andpayments shall not be the Company’s sole and exclusive remedy for a breach ofthis Section 6.  In addition, theCompany shall be entitled to damages and injunctive relief to enforce this Section 6in the event of a breach by the Participant.

 

# 7.                                       Notice.  Any notice or other communication givenpursuant to this Agreement, or in any way with respect to the Award, shall bein writing and shall be personally delivered or mailed by United Statesregistered or certified mail, postage prepaid, return receipt requested, to thefollowing addresses:

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If to the Company:                                                                                             EarthLink, Inc.1375 Peachtree Street - Level A Atlanta, Georgia 30309Attention:  General Counsel

 

If to the Participant:

 

 

 

# 8.                                       No Right toContinued Employment or Service.  Neither the Plan, the granting of this Awardnor any other action taken pursuant to the Plan or this Award constitutes or isevidence of any agreement or understanding, express or implied, that theCompany or any Affiliate will retain the Participant as an employee or otherservice provider for any period of time or at any particular rate ofcompensation.

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# 9.                                       Agreement toTerms of Plan and Agreement.  The Participant has received a copy of thePlan, has read and understands the terms of the Plan and this Agreement, andagrees to be bound by their terms and conditions with respect to this Award.

 

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# 10.                                 TaxConsequences.  TheParticipant acknowledges that (i) there may be tax consequences upon paymentof the Award and upon any acquisition or disposition of shares of Common Stockissued pursuant to this Award and (ii) Participant should consult a taxadviser regarding the tax consequences of this Award.  The Participant is solely responsible fordetermining the tax consequences of the Award and for satisfying theParticipant’s tax obligations with respect to the Award (including, but notlimited 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.

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# 11.                                 Binding Effect.  Subject to the limitations stated above andin the Plan, this Agreement shall be binding upon and inure to the benefit ofthe distributees, legatees and personal representatives of the Participant andthe successors of the Company.

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# 12.                                 Conflicts.  In the event of any conflict between theprovisions of the Plan and the provisions of this Agreement, the provisions ofthe Plan shall govern.  All referencesherein to the Plan shall mean the Plan as in effect on the date hereof.

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# 13.                                 Counterparts.  This Agreement may be executed in a number ofcounterparts, each of which shall be deemed an original, but all of whichtogether shall constitute one in the same instrument.

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# 14.                                 Miscellaneous.  The parties agree to execute such furtherinstruments and take such further actions as may be necessary to carry out theintent of the Plan and this Agreement. This Agreement and the Plan shall constitute the entire agreement of theparties with respect to the subject matter hereof.

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# 15.                                 Section 409A.  For purposes of this Agreement, all rights topayments hereunder shall be treated as rights to receive a series of separatepayments and benefits to the fullest extent allowed by Section 409A of theCode.  For purposes of this Agreement,termination of employment shall be construed consistently with a “Terminationof Employment” (as defined in the CIC Plan). Additionally, if the Participant is a Specified Employee (as defined inthe CIC Plan) as of Participant’s Termination of Employment, and if the amountsthat Participant is entitled to receive hereto are not otherwise exempt from Section 409Aof the Code, then to the extent necessary to comply with Section 409A ofthe Code, no payment that is triggered on the Participant’s Termination ofEmployment (such as those under Sections 2(a)(ii) and (iii) above) maybe made hereunder until after the date which is six (6) months after theParticipant’s Termination of Employment or, if earlier, the Participant’s dateof death.  Any such amount that wouldotherwise have been required to be paid during such six (6) months afterthe Participant’s Termination of Employment or, if earlier, until the Participant’sdate of death shall be paid in one lump sum payment as soon as administrativelyfeasible after the date which is six (6) months after the Participant’s Terminationof Employment or, if earlier, the Participant’s date of death.  Any remaining amount shall be paid asotherwise scheduled.  This Agreement isintended to comply with the applicable requirements of Section 409A of theCode and shall be construed and interpreted in accordance therewith.  The Company may at any time amend, suspend orterminate this Agreement, or any payments to be made hereunder, as necessary tobe in compliance with Section 409A of the Code to avoid the imposition ofany potential taxes, penalty or interest as a result of failing to comply with Section 409Aof the Code.

 

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# 16.                                 Governing Law.  This Agreement shall be governed by the lawsof the State of Delaware, except to the extent federal law applies.

 

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INWITNESS WHEREOF, the Company has caused this Agreement to be signed by a dulyauthorized officer, and the Participant has affixed his signature hereto.

 
|   | COMPANY:        |
|--------|-----------------|
|   |            |
|   | EARTHLINK, INC. |
|   |            |   |
|   |            |   |
|   | By:             |   |
|   | Name:           |   |
|   | Title:          |   |
|   | PARTICIPANT:    |
|   |            |
|   |            |
|   |            |

 

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