Exhibit 99.5


 


STOCK UNIT AGREEMENT


 


STOCK UNIT AGREEMENT (“Agreement”) effective as
of October 27, 2008 (“Grant Date”), by and between AboveNet, Inc.
(the “Company”) and Joseph Ciavarella (the “Participant”).


 


WHEREAS, the Company believes it
desirable that the Participant be provided additional incentive to advance the
interests of the Company through a grant of stock units under the AboveNet, Inc.
2008 Equity Incentive Plan (the “Plan”);


 


NOW, THEREFORE, the parties agree as
follows:


 


1.             Grant of Stock Units.


 


Pursuant
to the Plan and on the terms and subject to the conditions set forth herein and
therein, the Company hereby grants to the Participant 35,000 stock units (the “Stock
Units”). Each Stock Unit constitutes a right to receive from the Company one
share (each a “Unit Share” and collectively the “Unit Shares”) of the Company’s
Common Stock, $.01 par value per share (the “Common Stock”), subject to
adjustment as provided in the Plan. Capitalized terms that are not defined in
this Agreement shall have the respective meanings given in the Plan.


 


2.             Vesting; Delivery of Unit Shares.


 


The
Stock Units vest (i.e., are not subject to forfeiture) as follows: (a) 30%
of the Stock Units shall vest and the underlying Unit Shares shall be delivered
to the Participant on November 16, 2009; (b) 10% of the Stock Units
shall vest and the underlying Unit Shares shall be delivered on November 15,
2010; and (c) 60% of the Stock Units shall vest and the underlying Unit
Shares shall be delivered on November 15, 2011. The Stock Units are
subject to earlier vesting as set forth in Sections 4(a), 4(b), 4(d) and 4(e).
The Unit Shares are subject to earlier delivery only as set forth in Section 4(a) (death)
and Section 4(e) (Change of Control).


 


3.             Withholding.


 


The
Company’s obligation to deliver Unit Shares under this Agreement shall be
subject to the payment by the Participant of any applicable federal, state and
local withholding tax. The Company shall, to the extent permitted by law, have
the right to deduct from any payment of any kind otherwise due to the
Participant any federal, state or local taxes required to be withheld with
respect to the vesting of the Stock Units or the delivery of the Unit Shares.


 


4.             Termination of Employment; Change of Control.


 


(a)           In the event of the
Participant’s death prior to the vesting of all Stock Units granted under this
Agreement, any unvested Stock Units, if any, shall immediately vest and the
underlying Unit Shares shall be immediately delivered to the Participant’s
beneficiary or beneficiaries.


 

















 


(b)         Upon the termination of Participant’s
Continuous Service with the Company as a result of a Disability, any unvested
Stock Units shall immediately vest.


 


(c)          In the event of the termination of the
Participant’s Continuous Service by the Company for Cause or by the Participant
other than for Good Reason, any unvested Stock Units shall immediately be
forfeited.


 


(d)         Upon the termination of the Participant’s
Continuous Service by the Company without Cause or by the Employee for Good
Reason, any unvested Stock Units shall immediately vest.


 


(e)          In the event of a Change of Control,
any unvested Stock Units shall immediately vest and the underlying Unit Shares
of all vested Stock Units shall be immediately delivered to the Participant.


 


(f)          The parties may not accelerate the
delivery of any Stock Units before the dates set forth above.


 


5.             Transfer of Stock Units; Limitations on Delivery of Unit Shares; Put Right.


 


(a)           The Stock Units are not transferable
otherwise than by will or the laws of descent and distribution. Any attempt to
transfer the Stock Units in contravention of this subparagraph (a) is void
ab initio. The Stock
Units shall not be subject to execution, attachment or other process.


 


(b)           In the event that on the date of
delivery, any of the following shall be true (1) the Unit Shares may not
be sold by the Participant at such time under Rule 144 of the Securities
Act of 1933, as amended (the “Securities Act”), or pursuant to a currently
effective registration statement under the Securities Act, (2) the
Participant is unable to sell the stock underlying his Unit Shares due to any
Company imposed trading restriction or the Participant otherwise is in
possession of material, non-public information regarding the Company or its
securities or (3) the Company’s shares are not listed on a national stock
exchange, the Company shall be obligated, following notice from the Participant
as provided below, to repurchase such number of Unit Shares at the Fair Market
Value of the Unit Shares on the date of such repurchase as required to meet the
Company’s required minimum tax withholding with respect to the delivered Unit
Shares (based on minimum statutory withholding rates for federal, state and
local purposes, including payroll taxes, that are applicable to such
supplemental taxable income). Notwithstanding the immediately preceding
sentence, in the event the Internal Revenue Service determines that the fair
market value of the Unit Shares is greater than the Fair Market Value as
determined under the Plan and the Participant has incurred additional liability
for income taxes, the Fair Market Value for purposes of this subparagraph (b) shall
be increased to the value determined by the Internal Revenue Service. The
Participant must give his notice to the Company of his election to exercise the
right to require the Company to repurchase a portion of the Unit Shares not
less than two (2) business days before the delivery date. In the event
such Participant does not exercise such right, he shall be deemed to have
elected to forego such right.


 


2

















 


6.             No
Rights in Unit Shares.


 


The Participant shall have none of the rights of a
shareholder with respect to particular Unit Shares unless and until such Unit
Shares are issued and delivered to him under this Agreement.


 


7.             No
Right to Employment.


 


Nothing contained herein shall be deemed to confer
upon the Participant any right to remain as an employee of the Company. The
Company reserves the right to dismiss the Participant free from any liability
hereunder, or any claim under the Plan, except as specifically provided in this
Agreement.


 


8.             Governing
Law/Jurisdiction.


 


This Agreement shall be governed by and construed in
accordance with the laws of the State of New York without reference to
principles of conflict of laws.


 


9.             Miscellaneous.


 


This Agreement cannot be changed or terminated
orally. The Company at any time, and from time to time, may amend the terms of
this Agreement; provided, however, that the rights under this Agreement shall not be impaired by any such
amendment unless (i) the Company requests the consent of the Participant
and (ii) the Participant consents in writing. This Agreement and the Plan
contain the entire agreement between the parties relating to the subject matter
hereof. In the event of any conflict between the provisions of this Agreement
and those of the Plan, the provisions of the Plan shall control. The paragraph
headings herein are intended for reference only and shall not affect the interpretation
hereof.


 


IN WITNESS WHEREOF, the
parties have executed this Agreement as of the day and year first above
written.


 


 


	
   

  	
  /s/
  Joseph Ciavarella

  
	
   

  	
  Joseph
  Ciavarella

  
	
   

  	
  Participant

  
	
   

  	
   

  
	
   

  	
  ABOVENET,
  INC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Robert Sokota

  
	
   

  	
   

  	
  Name:

  	
  Robert Sokota

  
	
   

  	
   

  	
  Title:

  	
  SVP & General Counsel

  



 


3