Earthlink 2008 Annual Report Download - page 285

HELIO, Inc. Equity Incentive Plan
In February 2006, the Company adopted the Amended and Restated Helio, Inc. Equity Incentive Plan, which is an amendment and
restatement of the November 2005 Helio, Inc. Equity Incentive Plan (the “Plan”). The terms of the Plan provide for grants of non-qualified
stock options (“NSOs”) and other stock-
related awards and performance awards that may be settled in cash, stock or other property. Employees,
officers, directors, outside consultants and service providers are eligible for awards under the Plan. NSOs shall have a term of no more than
10 years from the date of grant and an exercise price of no less than the estimated fair market value per share on the date of grant. Options
granted to an individual who, at the time of grant of such option, owns stock representing more than 10% of the voting power of all classes of
stock of the Company, shall have an exercise price equal to no less than 110% of the fair market per share on the date of grant. The vesting
period for NSOs is generally four years from the date of grant, however, certain employees were issued stock options subject to the Company
achieving future, specific member and Company financial performance milestones (the “Performance Options”).
The Plan is administered by the
Company’s board of directors. As of December 31, 2005, there was an aggregate of 10,205,000 shares of Class A Common Stock reserved for
issuance under the Plan. In April 2006, the board of directors and stockholders of the Company approved a 4,000,000 share increase in the
number of shares reserved for issuance under the Plan. As of December 31, 2007, an aggregate 14,205,000 shares of Class A Common Stock
were reserved for issuance under the Plan.
Stock-Based Compensation Before Adoption of SFAS No. 123(R)
The Company’s combined financial statements as of and for the twelve months ended December 31, 2006 and 2007 reflect the impact
of FAS 123(R). Stock-based compensation expense recognized during the twelve months ended December 31, 2006 and 2007 includes:
• Compensation expense for stock-based awards granted to employees subsequent to January 1, 2006 based on the grant date fair
value estimated in accordance with the provisions of FAS No. 123(R) of approximately $0.4 million and $0.9 million, respectively;
and,
• Compensation expense for stock-based awards granted to employees prior to January 1, 2006 based on the grant date fair value
estimated in accordance with the provisions of FAS No. 123(R) of approximately $1.0 million and $0.9 million, respectively.
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