Earthlink 2006 Annual Report Download - page 95

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EARTHLINK, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Restricted Stock Units
The following table summarizes the Company’s restricted stock units as of and for the year ended December 31, 2006:
The fair value of restricted stock units is determined based on the closing trading price of EarthLink’s common stock on the grant date.
The weighted-average grant date fair value of restricted stock units granted during the years ended December 31, 2004, 2005 and 2006 was
$8.90, $9.49 and $7.89, respectively. As of December 31, 2006, there was $7.0 million of total unrecognized compensation cost related to
nonvested share-based compensation arrangements. That cost is expected to be recognized over a weighted-average period of 3.1 years. The
total fair value of shares vested during the years ended December 31, 2004, 2005 and 2006 was $0.1 million, $0.1 million and $1.2 million,
respectively, which represents the closing price of the Company’s common stock on the vesting date multiplied by the number of restricted
stock units that vested.
12. Profit Sharing Plans
The Company sponsors the EarthLink, Inc. 401(k) Plan (“Plan”),
which qualifies as a deferred salary arrangement under Section 401(k) of
the Internal Revenue Code. Under the Plan, participating employees may defer a portion of their pretax earnings up to the Internal Revenue
Service annual contribution limit. The Company makes a matching contribution of 50% of the first 6% of base compensation that a participant
contributes to the Plan. The Company’s matching contributions vest over four years from the participant’s date of hire. The Company
contributed $3.0 million, $2.8 million and $2.8 million during the years ended December 31, 2004, 2005 and 2006, respectively.
94
Weighted
Average
Restricted
Grant Date
Stock Units
Fair Value
Nonvested as of December 31, 2005
658,000
$
9.81
Granted
831,000
7.89
Vested
(165,000
)
9.29
Forfeited
(144,000
)
9.52
Nonvested as of December 31, 2006
1,180,000
8.57