Earthlink 2010 Annual Report Download - page 120

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Table of Contents
EARTHLINK, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Classification
In 2009, the Company began paying quarterly cash dividends on its common stock. The Company currently intends to pay regular quarterly
dividends on its common stock. Under the terms of the indenture governing the EarthLink Notes, the Company's payment of cash dividends
requires an adjustment to the conversion rate for the EarthLink Notes. In addition, as a result of the adjustment, the EarthLink Notes may be
surrendered for conversion for a period of time between the declaration date and the record date, as defined in the indenture, for the
consideration provided for in the indenture. As a result, the Company classified the EarthLink Notes as a current liability in the Consolidated
Balance Sheet as of December 31, 2009. On November 15, 2011, holders of the EarthLink Notes have the right under the governing indenture to
require the Company to repurchase the EarthLink Notes. As a result, the Company classified the EarthLink Notes as a current liability in the
Consolidated Balance Sheet as of December 31, 2010.
11. Shareholders' Equity
Shareholder Rights Plan
During 2002, the Board of Directors adopted a shareholder rights plan (the "Rights Plan"). In connection with the Rights Plan, the Board of
Directors also declared a dividend of one right for each outstanding share of EarthLink's common stock for stockholders of record at the close of
business on August 5, 2002.
Each right entitles the holder to purchase one one-
thousandth (1/1000) of a share (a "Unit") of EarthLink's Series D Junior Preferred Stock
at a price of $60.00 per Unit upon certain events. Generally, in the event a person or entity acquires, or initiates a tender offer to acquire, at least
15% of EarthLink's then outstanding common stock, the rights will become exercisable for common stock having a value equal to two times the
exercise price of the right, or effectively at one-half of EarthLink's then-
current stock price. The rights are redeemable under certain
circumstances at $0.01 per right and will expire, unless earlier redeemed, on August 6, 2012.
Share Repurchases
Since the inception of the Company's share repurchase program, the Board of Directors has authorized a total of $750.0 million for the
repurchase of EarthLink's common stock. As of December 31, 2010, the Company had $145.9 million available under the current authorizations.
The Company may repurchase its common stock from time to time in compliance with the Securities and Exchange Commission's regulations
and other legal requirements, including through the use of derivative transactions, and subject to market conditions and other factors. The share
repurchase program does not require the Company to acquire any specific number of shares and may be terminated by the Board of Directors at
any time.
The following table summarizes share repurchases during the years ended December 31, 2008, 2009 and 2010 pursuant to the share
repurchase program, which have been recorded as treasury stock:
113
Year Ended December 31,
2008 2009 2010
(in thousands)
Number of shares repurchased
3,805
3,592
103
Aggregate purchase price
$
31,856
$
22,340
$
851