Exhibit 10.3


 


EARTHLINK, INC.


                                  
PLAN


 


Nonqualified Stock Option Agreement


 


No. of
shares subject to

Nonqualified Stock Option: 
                              


 


THIS
NONQUALIFIED STOCK OPTION AGREEMENT (this “Agreement”) dated as of the
      day of
          ,
         by and between
EarthLink, Inc., a Delaware corporation (the “Company”),
and
                                  
(“Participant”) is made pursuant and
subject to the provisions of the
                                  
(the “Plan”), a copy of which is available
from the Company upon request.  All terms
used herein that are defined in the Plan have the same meaning given them in
the Plan.


 


1.                                       Grant
of Option.  Pursuant to the Plan, the
Company, on
                      
(the “Date of Grant”), granted to
Participant, subject to the terms and conditions of the Plan and subject
further to the terms and conditions herein set forth, the right and option to
purchase from the Company all or any part of an aggregate
of              shares
of Common Stock (the “Option Shares”)
at the option price of
           per
share, such option price per share being not less than the Fair Market Value of
a share of the Common Stock on the Date of Grant (or, in case of a Ten Percent
Shareholder as described in the Plan, not less than 110 percent of the
Fair Market Value of a share of the Common Stock on the Date of Grant).  This Option is exercisable as hereinafter
provided.


 


2.                                       Terms
and Conditions.  This Option is
subject to the following terms and conditions:


 


(a)                                  Expiration
Date.  This Option shall expire at
           on
            ,
         (the “Expiration
Date”).  In no event shall the
Expiration Date be later than 10 years from the Date of Grant (or, in case of a
Ten Percent Shareholder as described in the Plan, five years from the Date of
Grant).


 


(b)                                 Exercise
of Option.  Except as provided in the
Plan and in paragraphs 3, 4, 5, 6 or 7, this Option shall vest and become
exercisable on the sixth (6th) annual anniversary of the Date of
Grant; provided, however, if on or before
                
any of the following events occur, then this Option shall additionally vest as
indicated:


 


1.                              ;


 





















 


2.                              ;


 


3.                              ;
and


 


4.                              .


 


In the event of a
“Change in Control,” as defined in the Change-in-Control Accelerated Vesting
and Severance Plan, effective April 19, 2001 (the “CIC Plan”), and the
termination of Participant’s employment with the Company within
one (1) year after the effective date of the “Change of Control” for
any reason other than cause, death, disability or voluntary resignation, the
Option Shares that would have vested (if the Participant’s employment had not terminated)
in the Participant hereunder in the calendar quarter in which the Participant’s
employment is terminated (excluding any severance pay period) as determined by
the Compensation Committee of the Board of Directors of the Company, shall be
accelerated and vested in the Participant on the last day of the Participant’s
employment with the Company.  The terms
of the CIC Plan applicable to accelerated vesting of option shares shall not be
applicable to the Option Shares.


 


Once this Option has
become exercisable in accordance with the preceding, it shall continue to be
exercisable until the earlier of the termination of the Participant’s rights
hereunder pursuant to paragraphs 3, 4, 5, 6 or 7 or until the Expiration
Date.  A partial exercise of this Option
shall not affect the Participant’s right to exercise this Option with respect
to the remaining shares, subject to the conditions of the Plan and this
Agreement.


 


(c)                                  Method
of Exercise and Payment for Shares. 
This Option shall be exercised by delivering written notice to the
attention of the Company’s Secretary at the Company’s principal office located
at
                        .  The exercise date shall be (i) in the
case of notice by mail, the date of postmark, or (ii) if delivered in
person, the date of delivery.  Such
notice shall be accompanied by payment of the Option price in full, in cash or
cash equivalent acceptable to the Administrator, or, if the Administrator in
its discretion permits, (i) by the surrender of shares of Common Stock
that the Participant has owned for at least six months with an aggregate Fair
Market Value (determined as of the preceding business day) which, together with
any cash or cash equivalent the Participant pays, is not less than the Option
price of the number of shares of Common Stock for which the Option is being
exercised, (ii) by a cashless exercise through a broker, (iii) by
delivery of the full recourse, interest-bearing promissory note of the
Participant, (iv) by such other medium of payment as the Administrator in
its discretion shall authorize or (v) by any combination of the
aforementioned methods of payment.


 


2





















 


(d)                                 Nontransferability.  This Option is nontransferable except by will
or by the laws of descent and distribution. 
During Participant’s lifetime, only Participant may exercise this
Option. No right or interest of a Participant in this Option shall be liable
for, or subject to, any lien, obligation or liability of the Participant.


 


3.                                       Exercise
in the Event of Death.  This Option
shall be exercisable for all or part of the number of shares of Common Stock
that the Participant is entitled to purchase pursuant to paragraph
2(a) and (b) as of the date of Participant’s death, reduced by the
number of shares for which the Participant previously exercised the Option, in
the event the Participant dies while employed by the Company or any Subsidiary
and prior to the Expiration Date and prior to the termination of the
Participant’s rights under paragraphs 4, 5, 6 or 7.  In that event, Participant’s estate, or the
person or persons to whom his rights under this Option shall pass by will or
the laws of descent and distribution may exercise this Option.  In that event, the Participant’s estate or
such persons may exercise this Option during the remainder of the period
preceding the Expiration Date or within 180 days of the date Participant dies,
whichever is shorter.


 


4.                                       Exercise
in the Event of Disability.  This
Option shall be exercisable for all or part of the number of shares of Common
Stock that the Participant is entitled to purchase pursuant to paragraph
2(a) and (b) as of the date Participant becomes Permanently and
Totally Disabled (as defined below), reduced by the number of shares for which
the Participant previously exercised the Option, if the Participant becomes
permanently and totally disabled within the meaning of
Section 22(e)(3) of the Code (“Permanently and Totally
Disabled”) while employed by the Company or any Subsidiary and prior
to the Expiration Date and prior to the termination of the Participant’s rights
under paragraphs 3, 5, 6 or 7.  In
that event, the Participant may exercise this Option during the remainder of
the period preceding the Expiration Date or within 180 days of the date he
ceases to be employed by the Company or any Subsidiary on account of being
Permanently and Totally Disabled, whichever is shorter.  The Administrator, in its sole discretion,
shall determine whether Participant is Permanently and Totally Disabled for
purposes of this paragraph 4.


 


5.                                       Exercise
in the Event of Retirement.  This
Option shall be exercisable for all or part of the number of shares of Common
Stock that the Participant is entitled to purchase pursuant to
paragraph 2(a) and (b) as of the date Participant Retires (as defined
below), reduced by the number of shares for which the Participant previously
exercised the Option, if the Participant Retires (as defined below) while
employed by the Company or any Subsidiary and prior to the Expiration Date and
prior to the termination of Participant’s rights under paragraphs 3, 4, 6
or 7.  In that event, the Participant may
exercise this Option during the remainder of the period preceding the
Expiration Date or within 30 days of the date the Participant Retires,
whichever is shorter.  For purposes of
this Agreement, the Participant Retires whenever the Participant terminates
employment with the Company or any Subsidiary on account of retirement under
any tax-qualified retirement plan of the Company in which the Participant
participates.


 


6.                                       Exercise
After Termination of Employment. 
This Option shall be exercisable for all or part of the number of shares
that the Participant is entitled to purchase pursuant to


 


3





















 


paragraph 2(a) and
(b) as of the date Participant ceases to be employed by the Company or any
Subsidiary, reduced by the number of shares for which the Participant
previously exercised the Option, if the Participant ceases to be employed by
the Company or any Subsidiary other than on account of death or Disability or
because he Retires prior to the Expiration Date and prior to the termination of
Participant’s rights under paragraphs 3, 4, 5 or 7.  In that event, the Participant may exercise
this Option during the remainder of the period preceding the Expiration Date or
until the date that is 30 days after the date he ceases to be employed by the
Company or any Subsidiary other than on account of death or Disability or
because he Retires, whichever is shorter.


 


7.                                       Termination
of Employment for Cause. 
Notwithstanding any other provision of this Agreement, all rights
hereunder will be immediately discontinued and forfeited, and the Company shall
not have any further obligation hereunder to the Participant and the Option
will not be exercisable for any number of shares of Common Stock (even if the
Option previously became exercisable), on and after the time the Participant is
discharged from employment with the Company or any Subsidiary for Cause.


 


8.                                       Investment
Representations.  In connection with
the acquisition of this Option, the Participant represents and warrants as
follows:


 


(a)                                  The
Participant is acquiring this Option and, upon exercise of the Option, will be
acquiring shares of Common Stock for investment for his own account, not as a
nominee or agent, and not with a view to or for resale in connection with, any
distribution thereof.


 


(b)                                 The
Participant has a pre-existing business or personal relationship with the
Company or one of its directors, officers or controlling persons and by reason
of his business or financial experience, has, and could be reasonably assumed
to have, the capacity to evaluate the merits and risks of purchasing shares of
Common Stock and to make an informed investment decision with respect thereto
and to protect Participant’s interest in connection with the acquisition of
this Option and shares of Common Stock.


 


9.                                       Minimum
Exercise.  This Option may not be
exercised for less than          shares
of Common Stock unless it is exercised for the full number of shares that
remain subject to the Option.


 


10.                                 Fractional
Shares.  Fractional shares shall not
be issuable hereunder, and when any provision hereof may entitle Participant to
a fractional share, such fraction shall be disregarded.


 


11.                                 Change
in Capital Structure.  The terms of
this Option shall be adjusted in accordance with the terms and conditions of
the Plan as the Administrator determines is equitably required in the event the
Company effects one or more stock dividends, stock split-ups, subdivisions or
consolidations of shares or other similar changes in capitalization.


 


4





















 


12.                                 No
Right to Continued Employment.  This
Option does not confer upon Participant any right with respect to continuance
of employment by the Company or any Subsidiary, nor shall it interfere in any
way with the right of the Company or any Subsidiary to terminate his employment
at any time.


 


13.                                 Participant
Bound by Plan.  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 legatees, distributees, transferees and personal
representatives of 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.                                 Governing
Law.  The laws of the State of
Delaware shall govern this Agreement, except to the extent federal law applies.


 


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


 


	
   

  	
  COMPANY:

  
	
   

  	
   

  
	
   

  	
  EARTHLINK,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  PARTICIPANT:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Participant

  
				



 


5