Exhibit 10.4


 


EARTHLINK, INC.

STOCK INCENTIVE PLAN


(as amended effective October 23, 2003)


 


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 Stock Incentive Plan (as amended effective October 23, 2003)
(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                   
    , 200     (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                      ,
200     (the “Expiration Date”).  In no event shall the Expiration Date be
later than 10 years from the Date of Award.


 


(b)                                 Vesting
of Award.


 


(i)                                     In
General.  Except as otherwise
provided below,                           
percent (      %) of the outstanding Restricted
Stock Units shall become nonforfeitable and payable on the         
annual anniversary of the Date of Award 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 nonforfeitable and payable, provided the Participant is still
an Employee of the Company or any Subsidiary
at each 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 an Employee of the Company or any
Subsidiary at such time.


 


(iii)                               Vesting
Date.  Outstanding Restricted Stock
Units shall be forfeitable until they become nonforfeitable and payable as
described above.  Each date upon which
Restricted Stock Units become nonforfeitable and payable shall be referred to
as a “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 8
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 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.  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 has owned
for at least six months valued at their Fair Market Value on the day preceding
such date, (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 employment with the
Company and any Subsidiary 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 transfer 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


 


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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 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.                                       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.


 


7.                                       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.


 


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
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.


 


9.                                       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
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


 


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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 9,
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 9
(“Overpayments”), or that additional amounts should be paid or distributed to
the Participant under this Section 9 (“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 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


 


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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.


 


10.                                 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:


 


 


 


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


 


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12.                                 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.


 


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.


 


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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