Exhibit 10.32
SECOND AMENDMENT TO EMPLOYMENT AGREEMENT
This is the second amendment (the "Second Amended Agreement") to that certain
letter agreement (the "Agreement") dated as of the 8th day of August, 2000,
between Mpower Communications Corp., a Nevada corporation (the "Company") and
Xxxxxx X. Xxxxxx ("Executive"), and also an amendment to the first amended
agreement dated as of September 20, 2002 (the "First Amended Agreement").
The Company and Executive, for and in consideration of the promises, terms and
conditions contained herein, do hereby agree to make the following amendments to
the Agreement and First Amended Agreement.
1. Section 2(b) of the First Amended Agreement is hereby deleted in its
entirety, and replaced by the following:
"(b) TERMINATION WITHOUT CAUSE; RESIGNATION FOR GOOD REASON. In the event that
(A) the Company terminates your employment hereunder without Cause, (B) you
resign for Good Reason or (C) the Company fails to extend the Term for at least
one additional one-year period as described herein, you shall be entitled to the
following: (i) the payments and benefits described immediately above in
sub-section (a) and (ii) a severance benefit (the "SEVERANCE BENEFIT") equal to
two times (a) the Fixed Salary paid immediately preceding the Termination Date
and (b) the "HIGHEST BONUS", where the Highest Bonus equals the highest Annual
Bonus paid by the Company to you during the period from twelve (12) months
immediately preceding the Effective Date through the Termination Date, provided,
however, that you shall have no right to have paid or payable from the Trust
adopted by Company on October 23, 2001 pursuant to a Trust Agreement with HSBC
Bank USA as trustee (the "OLD TRUST"), any portion of your Severance Benefit (i)
attributable to any increase in your Fixed Salary after March 31, 2002, or (ii)
otherwise in excess of the Severance Benefit or other severance payment that you
would have been eligible to receive if your employment with the Company had
terminated as of March 31, 2002 under circumstances entitling you to a Severance
Benefit or other severance payment. Payment of the Severance Benefit shall be
contingent upon your execution of a waiver and release of claims (a "RELEASE")
in favor of the Company and its affiliates and their respective employees and
agents, substantially in the form set forth in Appendix A. The Severance Benefit
shall be paid by the Company in a lump sum, no later than two (2) business days
after the expiration of the Revocation Period, as defined in the Release."
2. Section 2 of the First Amended Agreement is amended to add the following:
"Parachute Payment Reduction. In the event that any amount or benefit paid,
distributed or otherwise provided to the Executive by the Company whether
pursuant to this Agreement or otherwise constitute a "parachute payment" within
the meaning of Section 280G (b)(2) of the Internal Revenue Code of 1986, as
amended (the "CODE"), and the amount of the parachute payment, reduced by all
federal, state and local taxes applicable thereto, including the excise tax
imposed pursuant to Section 4999 of the Code, is less than the amount the
Executive would receive if the Executive were paid three times his base amount,"
as defined in Section 280G(b)(3) of the Code, less $1.00, reduced by all
federal, state and local taxes applicable thereto, then the aggregate of the
amounts constituting the parachute payment shall be reduced to an amount that
will equal three times the Executive's base amount less $1.00. The
determinations to be made with respect to this Section shall be made, at the
Company's expense, by the accounting firm that is the Company's independent
accounting firm (the "ACCOUNTING FIRM"). If a determination is made by the
Accounting Firm that a reduction in the aggregate of all payments due to a
Executive is required by this Section, the Executive shall have the right to
specify the portion of such reduction, if any, that will be made under this
Agreement and each plan or program of the Company. If the Executive does not so
specify within 60 days following the date of a determination by the Accounting
Firm pursuant to the preceding sentence, the Company shall determine, in its
sole discretion, the portion of such reduction, if any to be made under this
Retention Plan and each plan or program of the Company."
Except as amended by this Second Amended Agreement, all terms and condition of
the Agreement shall remain in full force and effect. Moreover, it is the
intention of the parties hereto that if this Second Amended Agreement is void,
becomes voidable, or otherwise is or becomes unenforceable as drafted, then the
Agreement and First
Amended Agreement shall continue in full force and effect, in accordance with
the terms and conditions thereof immediately prior to the execution of this
Second Amended Agreement. This Second Amended Agreement may be executed in any
number of counterparts which together shall constitute one instrument, shall be
governed by and construed in accordance with the laws and decisions of the State
of New York applicable to contracts made and to be performed therein without
giving effect to the principles of conflict of laws.
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IN WITNESS WHEREOF, the parties have duly executed this Second Amended
Agreement as of this 19th day of March, 2003.
MPOWER COMMUNICATIONS CORP.
By: /s/ Xxxxx X. Xxxx
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Xxxxx X. Xxxx
Chairman and CEO
/s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
