Exhibit 10.3


 


EARTHLINK, INC.

EQUITY PLAN FOR NON-EMPLOYEE DIRECTORS


(as
amended effective May 8, 2008)


 


Restricted
Stock Unit Agreement


 


No. of Restricted
Stock


Units Awarded Hereunder:


 


THIS RESTRICTED
STOCK UNIT AGREEMENT (this “Agreement”) dated as of the
       day
of          ,
20    , between EarthLink, Inc., a Delaware
corporation (the “Company”), and
                    
(the “Participant”) is made pursuant and subject to the provisions of the
Company’s Equity Plan for Non-Employee Directors (as amended effective May 8,
2008) (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.                                        Award
of Units.  Pursuant to the Plan, the
Company, on
              
    , 20     (the “Date of Award”),
awarded to the Participant
           Restricted Stock
Units, each Restricted Stock Unit corresponding to one share of the Company’s
$0.01 par value Common Stock (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 $0.01 par value common stock of
the Company (the “Common Stock”) 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           
    ,         (the “Expiration
Date”).


 


(b)                                 Vesting
of Award.


 


(i)                                     In
General.  Except as otherwise
provided below, one hundred percent (100%) of the outstanding Restricted Stock
Units shall become nonforfeitable and payable on the first annual anniversary
of the Date of Award, provided the Participant is still serving as a
Non-Employee Director at such time.


 


(ii)                                  Change in Control.  Outstanding Restricted Stock Units that are
not then nonforfeitable and payable shall become nonforfeitable and payable
immediately before the consummation of a Change in Control, provided the
Participant is still serving as a Non-Employee Director at such time.


 


(iii)                               Vesting
Date.  Outstanding Restricted Stock
Units shall be forfeitable until they become nonforfeitable and payable as
described above.  The date upon 


 

















 


which
Restricted Stock Units become nonforfeitable and payable shall be referred to
as the “Vesting Date” with respect to such number of Restricted Stock Units.


 


(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 9
below,  the Company shall issue to
the Participant one share of Common Stock for each Restricted Stock Unit that
becomes nonforfeitable and payable under Section 2(b) above and shall
deliver to the Participant certificates representing such Shares as soon as
practicable after the 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 Board.  The
Company may allow the Participant to satisfy any such applicable withholding
taxes (i) by allowing the Participant to deliver shares of Common Stock
that the Participant already owns and, if necessary to avoid adverse accounting
consequences, has held for at least six months valued at their Fair Market
Value by a “net” settlement procedure on the day preceding such date (but only
for the minimum required withholding), (ii) through a cashless exercise
through a broker, (iii) by such other medium of payment as the Company
shall authorize, or (iv) by any combination of the allowable methods of
payment set forth herein.


 


3.                                        Termination
of Award.  Outstanding Restricted
Stock Units that have not become nonforfeitable and payable prior to the
Expiration Date shall expire and may not become nonforfeitable and payable
after such time.  Additionally, any
Restricted Stock Units that have not become nonforfeitable and payable on or
before the termination of the Participant’s service as a director of the
Company shall expire and may not become nonforfeitable 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.                                        Nontransferability.  Except as described below, 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 a Permitted Transferee.  In that event, the Permitted Transferee will
be entitled to all the rights of the Participant with respect to the
transferred Award (except that such Permitted Transferee may not assign the
Award other than by will or the laws of descent and distribution), and such
portion of the Award shall continue to be subject to all of the terms,
conditions and restrictions applicable to the Award as set forth herein and in
the Plan immediately prior to the effective date of the transfer.  Any such transfer will be permitted only if (i) the
Participant does not receive any consideration for the transfer and (ii) the
Board expressly approves the transfer. 
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 Board on or prior to the effective date of the 


 


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transfer.  No right or interest of the Participant in
this Award shall be liable for, or subject to, any lien, liability or
obligation of the Participant.


 


6.                                        Representation.  In connection with the acquisition of this
Award, the Participant represents and warrants that it is the Participant’s
intent to continue to serve as a director of the Company for the remainder of
Participant’s term as a director during which this Award is granted.


 


7.                                        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 7, 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 7
shall not constitute any agreement or commitment that the Company take any such
actions.


 


8.                                        Change
in Capital Structure.  The terms of
this Award shall be adjusted in accordance with the terms and conditions of the
Plan if the Company effects one or more stock dividends or stock splits.  If there is a subdivision or consolidation of
shares or other similar change in capitalization other than as a result of
stock dividends or stock splits, the Board may adjust the terms of this Award
to the extent the Board in its discretion may consider appropriate.


 


9.                                        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 Board 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.


 


10.                                  Golden
Parachute Provisions.


 


(a)                                If
any payment to the Participant hereunder or in conjunction with any other
payment pursuant to any other agreement, policy, plan or program would subject
the Participant to an excise tax imposed by Code Section 4999 or to any
similar tax imposed by state or local law or any related interest or penalties
(such tax or taxes, together with any such interest or penalties, being hereinafter
collectively referred to as the “Excise Tax”), then the payments 


 


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provided under
this Agreement shall be reduced (but not below zero) if, and only to the extent
that, such reduction will allow the Participant to receive a greater “Net After
Tax Amount” than the Participant would receive absent any such reduction.  “Net After Tax Amount” means the amount of
any Parachute Payments (as defined in (b) below) or Capped Payments (as
defined in (c) below), as applicable, net of taxes imposed under Code
Sections 1, 3101(b) and 4999 and any State or local income taxes
applicable to the Participant on the date of payment.  The determination of the Net After Tax Amount
shall be made using the highest combined effective rate imposed by the
foregoing taxes on income of the same character as the Parachute Payments or
Capped Payments, as applicable, in effect on the date of payment.


 


(b)                                 The
independent accounting firm that the Company, in its sole discretion, engages
(the “Accounting Firm”) will first determine the amount of any “Parachute
Payments” that are payable to the Participant. 
“Parachute Payment” means a payment that is described in Code Section 280G(b)(2),
determined in accordance with Code Section 280G and the regulations
promulgated or proposed thereunder.  The
Accounting Firm also will determine the Net After Tax Amount attributable to
the Participant’s total Parachute Payments.


 


(c)                                  The
Accounting Firm will next determine the largest amount of payments that may be
made to the Participant without subjecting the Participant to the Excise Tax
(the “Capped Payments”).  Thereafter, the
Accounting Firm will determine the Net After Tax Amount attributable to the
Capped Payments.


 


(d)                                 The
Participant then will receive the total Parachute Payments or the Capped
Payments, whichever provides the Participant with the higher Net After Tax
Amount.  If the Participant will receive
the Capped Payments (i.e. some amount less than the total Parachute Payments),
the total Parachute Payments will be adjusted by first reducing the amount of
any benefits under this Agreement or the noncash benefits under any other plan,
agreement or arrangement (with the source of the reduction to be directed by
the Participant) and then by reducing the amount of any cash benefits under any
other plan, agreement or arrangement (with the source of the reduction to be
directed by the Participant).  The
Accounting Firm will notify the Participant and the Company if it determines
that the Parachute Payments must be reduced and will send the Participant and
the Company a copy of its detailed calculations supporting that determination.


 


(e)                                  As
a result of the uncertainty in the application of Code Sections 280G and 4999
at the time that the Accounting Firm makes its determinations under this Section 10,
it is possible that amounts will have been paid or distributed to the
Participant that should not have been paid or distributed under this Section 10
(“Overpayments”), or that additional amounts should be paid or distributed to
the Participant under this Section 10 (“Underpayments”).  If the Accounting Firm determines, based on
either the assertion of a deficiency by the Internal Revenue Service against
the Company or the Participant, which assertion the Accounting Firm believes
has a high probability of success or controlling precedent or substantial
authority, that an Overpayment has been made, that Overpayment will be treated
for all purposes as a loan that the Participant must repay to the Company
together with interest at the applicable federal rate under Code Section 7872(f)(2);
provided, however, that no loan will be deemed to have been made and no amount
will be payable by the Participant to the Company unless, and then only to the
extent that, the deemed loan and payment would either reduce the amount on
which the 


 


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Participant is
subject to tax under Code Sections 1, 3101 or 4999 or generate a refund of such
taxes.  If the Accounting Firm determines,
based upon controlling precedent or other substantial authority, that an
Underpayment has occurred, the Accounting Firm will notify the Participant and
the Company of that determination and the amount of that Underpayment will be
paid to the Participant promptly by the Company.


 


(f)                                    The
fees and expenses of the Accounting Firm for its services in connection with
the determinations and calculations contemplated by the preceding subsections
shall be borne by the Company.  If such
fees and expenses are initially paid by Participant, the Company shall
reimburse Participant the full amount of such fees and expenses within five
business days after receipt from Participant of a statement therefor and
reasonable evidence of Participant’s payment thereof.


 


(g)                                 The
Company and Participant shall each provide the Accounting Firm access to and
copies of any books, records and documents in the possession of the Company or
Participant, as the case may be, reasonably requested by the Accounting Firm,
and otherwise cooperate with the Accounting Firm in connection with the
preparation and issuance of the determinations and calculations contemplated by
the preceding subsections.  Any
determination by the Accounting Firm shall be binding upon the Company and the
Participant.


 


(h)                                 The
federal, state and local income or other tax returns filed by the Participant
shall be prepared and filed on a consistent basis with the determination of the
Accounting Firm with respect to the any such Excise Tax payable by Participant.  The Participant, at the request of the
Company, shall provide the Company true and correct copies (with any
amendments) of the Participant’s federal income tax returns as filed with the
Internal Revenue Service and corresponding state and local tax returns, if
relevant, as filed with the applicable taxing authority, and such other
documents reasonably requested by the Company, evidencing such conformity.


 


11.                                  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:                                                                                                                                             


                                                      


                                                      


 


12.                                  No
Right to Continued 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 


 


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agreement or
understanding, express or implied, that the Company will retain the Participant
as a director for any period of time or at any particular rate of compensation.


 


13.                                  Participant
Bound by Plan.  The Participant
hereby acknowledges receipt of a copy of the Plan and agrees to be bound by all
the terms and provisions of the Plan.


 


14.                                  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.


 


15.                                  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.


 


16.                                  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.


 


17.                                  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.


 


18.                                  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:

  	
   

  
	
   

  	
  Rolla
  P. Huff

  
	
   

  	
  Chief
  Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PARTICIPANT:

  
	
   

  	
   

  
	
   

  	
   

  



 


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