EXHIBIT 10.4
AMENDMENT TO EMPLOYMENT AGREEMENT
THIS IS AN AMENDMENT (the "AMENDMENT") to that certain Employment
Agreement (the "AGREEMENT"), dated as of the 25th day of April, 2002 by and
among MPOWER COMMUNICATIONS CORP., a Nevada corporation (the "COMPANY"), and S.
Xxxxxxx Xxxxxxxxx ("EXECUTIVE"). Terms defined in the Agreement and not
otherwise defined herein have the meaning given to them in the 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.
1. Section 1 of the Agreement is amended, in its entirety, to read
as follows:
"EMPLOYMENT TERM. Subject to earlier termination in accordance with
the provisions hereof, this Agreement, as modified by as amendment
dated as of September 18, 2002 (the "AMENDMENT") shall become
effective as of the date of the Amendment (the "EFFECTIVE DATE") and
the term of your employment with the Mpower Communications
Corporation (the "COMPANY") pursuant to this Agreement (the "TERM")
shall expire on September 18, 2003; provided, however, that the Term
shall automatically be extended for an additional one-year period on
September 18, 2003 (the "EXTENSION DATE") unless at least 60 days
prior to the Extension Date, either party shall give notice to the
other in accordance with this Agreement of a desire not to extend
the Term."
2. Section 3.01 of the Agreement is amended to delete the phrase
"$225,000" in the second line thereof and replace it with the phrase "$300,000."
3. Section 3.04 of the Agreement is deleted in its entirety, and is
replaced by the following:
"(a) Not later than September 18, 2002 (the "GRANT DATE"), Executive
shall be granted stock options to purchase 100,000 shares of the
Company's common stock (the "NEW OPTIONS"). Such New Options shall
(i) have an exercise price equal to $.22 per share, (ii) vest in
three (3) equal installments on each of the first three
anniversaries of the Grant Date, (iii) have a term (the "TERM") of
(10) years from the Grant Date, (iv) remain exercisable, to the
extent vested on the Termination Date, for five (5) years after the
termination of Executive's employment with the Company for any
reason, but in no event after the expiration of the Term, and (v) be
non-qualified options within the meaning of the Internal Revenue
Code.
(b) All of Executive's unexercised stock options as of the Effective
Date, other than the New Options (the "EXISTING OPTIONS") shall be
amended so that they remain exercisable, to the extent vested on the
Termination Date, for five (5)
years after the termination of Executive's employment with the
Company for any reason, but in no event later than 10 years after
the date they were granted."
4. Section 4.02 of the Agreement, from sub-section (ii) through the
end of the paragraph, is amended read as follows:
"(ii) a severance benefit (the "SEVERANCE BENEFIT") equal to two
times (a) the Fixed Salary immediately preceding the Termination
Date and (b) the "HIGHEST BONUS", where the Highest Bonus equals the
greater of the Annual Bonus paid by the Company to Executive (x)
during the twelve (12) month period immediately preceding the
Termination Date, or (y) during the twelve (12) month period
immediately preceding the Effective Date"); provided, however, that
Executive 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
his Severance Benefit (i) attributable to any increase in
Executive's Fixed Salary after March 31, 2002, or (ii) otherwise in
excess of the Severance Benefit or other severance payment that
Executive would have been eligible to receive if his employment with
the Company had terminated as of March 31, 2002 under circumstances
entitling him to a Severance Benefit or other severance payment.
Payment of the Severance Benefit shall be contingent upon
Executive's 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."
5. Section 4.04 of the Agreement is deleted in its entirety, and
Section 6 of the Agreement is amended to add the following to the definition of
"Good Reason":
"(iii) any resignation by Executive, for any reason, occurring not
earlier than 90 days or later than 270 days after a Change of
Control; and (iv) the relocation of Executive's principal place of
business to a location that is more than 35 miles from Executive's
principal place of business on the Effective Date.
For the purposes of this Agreement, a "CHANGE OF CONTROL"
shall be deemed to have occurred if: (i) by any method, transaction,
or series of related transactions, more than 50% of the outstanding
shares of the Company or beneficial ownership thereof are acquired
by persons other than the members of the Board, those persons who
were more than 5% stockholders of the Company prior to the Effective
Date, employees of the Company and any of their immediate family
members and affiliates, and there is a change in the membership of
the Board, such that fewer than 50% of the members of the Board are
persons who served in such position prior to the change in
ownership; (ii) there is a merger or consolidation of the Company in
which the Company is not the continuing or surviving entity or
pursuant to which the Company's shares are converted into cash,
securities or other property; or (iii) the Company sells, leases or
exchanges
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all or substantially all of its assets or the Company's stockholders
approve the liquidation or dissolution of the Company."
6. Miscellaneous. Except as modified this Amendment, all terms and
conditions of the Agreement shall remain in full force and effect. It is the
intention of the parties hereto that if this Amendment is void, becomes
voidable, or otherwise is or becomes unenforceable as drafted, then the
Agreement shall continue in full force and effect, in accordance with the terms
and conditions thereof immediately prior to the execution of this Amendment.
This Amendment 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 Agreement as
of this 20th day of September , 2002.
MPOWER COMMUNICATIONS CORP.
By: /s/ Xxxxx X. Xxxx
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Xxxxx X. Xxxx
Chairman and CEO
/s/ S. Xxxxxxx Xxxxxxxxx
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S. Xxxxxxx Xxxxxxxxx
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