Earthlink 2005 Annual Report Download - page 90

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EARTHLINK, INC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table summarizes the status of the Company’s stock options and warrants as of December 31, 2005:
Restricted Stock Units
During the years ended December 31, 2003, 2004 and 2005, the Company issued approximately 24,000, 467,000 and 240,000 restricted
stock units, respectively, to its non-employee directors and certain key employees. The weighted average fair value of these restricted stock
units for the years ended December 31, 2003, 2004 and 2005 was $8.90, $9.49 and $10.31 per unit, respectively. The restricted stock units vest
and become exercisable over four to six years from the date of grant and resulted in deferred compensation of $0.2 million, $4.4 million and
$2.5 million, respectively, which the Company is amortizing to operating expense on a straight-line basis over the vesting period of the
restricted stock units.
Deferred Compensation Plan
During the year ended December 31, 2003, the Company adopted the Deferred Compensation Plan for Directors and Certain Key
Employees (the “Deferred Compensation Plan”). The Deferred Compensation Plan permits members of the Board of Directors and eligible
employees to elect to defer receipt of shares of common stock pursuant to vested restricted stock units and various cash consideration, such as
directors’ fees and bonuses. The cash consideration is converted into phantom share units at the closing price on the date the consideration
would otherwise be paid, and vested restricted stock units are converted into phantom share units on a one-for-one basis. Phantom share units
are fully vested at the date of grant and are converted to common stock upon the occurrence of various events. During the years ended
December 31, 2004 and 2005, the Company issued approximately 17,000 and 10,000 phantom share units, respectively, and approximately
8,000 and 18,000 phantom share units were outstanding as of December 31, 2004 and 2005, respectively.
89
Stock Options and Warrants Outstanding
Stock Options and
Warrants Exercisable
Weighted
Average
Weighted
Weighted
Remaining
Average
Average
Range of
Number
Contractual
Exercise
Number
Exercise
Exercise Prices
Outstanding
Life
Price
Exercisable
Price
(in thousands)
(in thousands)
$ 1.17 to $ 5.10
1,216
5.34
$
4.62
518
$
3.97
5.31 to 6.13
1,924
6.74
5.73
1,217
5.71
6.31 to 8.90
1,259
6.25
7.80
870
7.75
9.01 to 9.24
2,150
8.62
9.03
552
9.01
9.25 to 9.64
2,418
7.37
9.58
1,341
9.63
9.83 to 10.06
2,706
4.80
10.05
2,435
10.06
10.36 to 10.38
2,608
9.29
10.36
185
10.38
10.51 to 13.43
2,048
8.31
11.00
581
11.37
13.49 to 51.44
3,579
4.02
25.30
3,579
25.30
$ 1.17 to $51.44
19,908
6.65
$
11.87
11,278
$
13.94