Earthlink 2008 Annual Report Download - page 26

Table of Contents
Holders of the Notes have the right to require us to repurchase the Notes on November 15, 2011, November 15, 2016 and November 15,
2021 or upon the occurrence of a fundamental change prior to maturity. Upon conversion of the Notes, we are required to deliver cash equal to
the lesser of the aggregate principal amount of the Notes to be converted and the total conversion obligation. We may use cash, shares of
common stock or a combination thereof, at our option, for the remainder, if any, of the conversion obligation. We may not have sufficient funds
to make the required cash payment upon conversion or to purchase or repurchase the Notes in cash at such time or the ability to arrange
necessary financing on acceptable terms. In addition, the requirement to pay the fundamental change repurchase price, including the related
make whole premium, may discourage a change in control of our company.
Provisions of our second restated certificate of incorporation, amended and restated bylaws and other elements of our capital structure could
limit our share price and delay a change of management.
Our second restated certificate of incorporation, amended and restated bylaws and shareholder rights plan contain provisions that could
make it more difficult or even prevent a third party from acquiring us without the approval of our incumbent board of directors. These
provisions, among other things:
•
divide the board of directors into three classes, with members of each class to be elected in staggered three
-
year terms;
•
limit the right of stockholders to call special meetings of stockholders; and
• authorize the board of directors to issue preferred stock in one or more series without any action on the part of stockholders.
These provisions could limit the price that investors might be willing to pay in the future for shares of our common stock and significantly
impede the ability of the holders of our common stock to change management. In addition, we have adopted a rights plan, which has anti-
takeover effects. The rights plan, if triggered, could cause substantial dilution to a person or group that attempts to acquire our common stock on
terms not approved by the board of directors. These provisions and agreements that inhibit or discourage takeover attempts could reduce the
market value of our common stock.
Item 1B. Unresolved Staff Comments.
None.
Item 2. Properties.
We lease various properties in the United States with expiration dates through 2014. We use these properties for operations, data centers
and executive and administrative purposes. Our corporate headquarters is in Atlanta, Georgia where we occupy approximately 125,000 square
feet under a lease that will expire in 2014. We occupy 55,000 square feet in Pasadena, California for operations and corporate offices under a
lease that will expire in 2014 and 53,000 square feet in Vancouver, Washington for operations and corporate offices under a lease that will expire
in 2012. We also own a data center facility in Atlanta, Georgia.
We currently have facilities in excess of our needs as a result of our 2007 corporate restructuring plan, and have entered into or plan to enter
into various sublease agreements for our unused office and technical space. We believe the facilities we are retaining are suitable and adequate
for our business operations. For additional information regarding our obligations under property leases, see Note 15 in our Notes to Consolidated
Financial Statements included in Item 8 of Part II of this Annual Report on Form 10-K.
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