Exhibit 4.2
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AMENDMENT NO. 1 TO THE CONSULTING AGREEMENT BETWEEN RCN CORPORATION AND XXXXXX
XXXXX, XX.
THIS AMENDMENT is made as of July 2, 2002 to the Consulting Agreement dated as
of September 20, 2001 by and between RCN Corporation, a Delaware Corporation
(the "Company") and Xxxxxx Xxxxx, Xx. (the "Consultant").
WHEREAS, the Company and the Consultant have entered into a Consulting Agreement
(the "Agreement") as of September 20, 2001; and
WHEREAS, recognizing that the Compensation Committee of the Board of Directors
of the Company (the "Committee") has authorized the Company to amend the
Agreement to provide that (i) the initial strike price of the 250,000 Outperform
Stock Options referred to in the Agreement will be $1.21, (ii) such OSOs would
be granted and fully vested upon the death or disability of Consultant, as well
as upon Committee determination that the performance objectives relating to such
Options have been achieved, and (iii) the performance objectives are hereby
established and approved by the Committee;
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. The following shall be added at the end of Section 3(b): "If the Consultant
shall cease to provide consulting services to the Company prior to the
termination date of this agreement, by reason of Disability of death, the
250,000 Outperform Stock Options shall be granted and shall be fully vested and
exercisable as of such date, and, as applicable, the Consultant, his executor,
administrator, guardian or legal representative, a person who acquired the
Outperformance Options pursuant to a qualified domestic relations order, a
Family Member (as defined in General Instructions A.1(a)(5) to Form S-8 under
the Securities Act of 1933, as amended and any successor thereto) who acquired
the Outperformance Options by gift, any person to whom the Outperformance
Options are transferred by will or the laws of descent and distribution, the
trustee or directors of a trust or foundation created or established by the
Consultant, or an authorized representative of a charitable organization (as
described in Internal Revenue Code Section 501(c)(3)) which acquired the
Outperformance Options pursuant to the terms of a trust or foundation created or
established by the Consultant, shall have the right, until the Termination Date,
to exercise the Outperformance Options, subject to any other limitation
contained in the option agreement on the exercise of the Outperformance Options
in effect on the date of exercise. "Disability" shall mean a determination, by
the physician treating Consultant for such illness or condition, that the
Consultant is unable to perform the ordinary functions of such Consultant's
position as a result of mental or physical disability.
The initial exercise price referred to in the third sentence of Section 3(b) of
the Agreement is hereby changed from $1.95 to $1.21.
The performance objectives which are to be met as a condition to the granting
and vesting of the 250,000 Outperform Stock Options are attached hereto as
Exhibit A.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the
day and year first written above.
RCN CORPORATION
By: /s/ Xxxxx X. XxXxxxx
Xxxxx X. XxXxxxx
Chairman and Chief Executive Officer
/s/ Xxxxxx Xxxxx, Xx.
Xxxxxx Xxxxx, Xx.
Exhibit A
Xxxxxx Xxxxx, Xx. -- Objectives for 2002
* Reviewing and assisting management in structuring a new 10 year lower
trajectory plan -- assuming no outside financing
* Reviewing and assisting management in preparing detailed 5 year business plan
from the bottom up for each market
* Assist the CEO and management in new agreement with senior secured lenders
that fits into lower trajectory plan
* Consulting with the CEO regarding positioning the company for continued
growth in 2003 and achieving company-wide EBITDA positive status
* Consult with CEO and management regarding redesigning Finance department to
both cut costs and refocus the department from external to internal reporting
* Assist the CEO and management regarding designing and marketing at least one
new product "connection"
* Consult with the CEO and management regarding cutting corporate overhead
* Assist the CEO and actively participate regarding a plan to reduce debt by an
additional $250 million
