March 10, 1999
Mr. J. Xxxxxx Xxxxx
Dear Xx. Xxxxx:
Reference is made to the Stock Option Agreement between J.
Xxxxxx Xxxxx and IntelCom Group Inc. (now known as ICG Holdings (Canada)
Co. (the "Company"), dated as of November 13, 1995 (the "Agreement"),
which grants Xx. Xxxxx an option to purchase an aggregate 200,000 Common
Shares, no par value, of the Company at $10.00 per share. The Agreement
was assumed by ICG Communications, Inc., a Delaware corporation and the
parent corporation of the Company ("ICG"), pursuant to the terms of an
Agreement and Support Agreement, dated as of June 27, 1996, between the
Company and ICG. In addition, the Agreement was previously amended by
letter agreement dated September 10, 1996, whereby Section 5.
Non-transferability of Option was deleted in its entirety, and was further
amended by letter agreement dated October 27, 1998, pursuant to which "S&P
500 Index" references in the Agreement were replaced by references to the
"Xxxxxxx 2000 Index."
The Company, ICG and Xx. Xxxxx hereby further amend Sections
6, 7 and 9 of the Agreement to provide that the Option (as such term is
defined in the Agreement) shall expire on the tenth anniversary of the
original date of grant and shall neither be forfeited due to the
Employee's voluntary termination of employment, retirement, disability or
death nor be subject to earlier termination thereof. In order to effect
such amendments,
a) Section 6(a) shall read in its entirety as follows:
(a) If the Employee at any time ceases to be an employee of the
Company and of any Parent or Subsidiary by reason of his discharge for
Good Cause (as defined below), the Option shall forthwith terminate
and the Employee shall forfeit all rights hereunder. If, however, the
Employee for any other reason ceases to be such an employee, the
Option may, subject to the provisions of Section 8 hereof, be
exercised by the Employee to the same extent the Employee would have
been entitled under Section 3 hereof to exercise the Option on the day
next preceding the date of such cessation of employment, at any time
within the period ending ten (10) years after the Date of Grant, at
the end of which period the Option, to the extent not then exercised,
shall
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terminate and the Employee shall forfeit all rights hereunder, even if
the Employee subsequently returns to the employ of the Company or any
Parent or Subsidiary. In no event, however, may the Option be
exercised after the expiration of the term provided in Section 4
hereof. For purposes of this Agreement, "Good Cause" shall mean (i)
the Employee's willful or gross misconduct or willful or gross
negligence in the performance of his duties for the Company or for any
parent or subsidiary corporation of the Company after prior written
notice of such misconduct or negligence and the continuance thereof
for a period of 30 days after receipt by the Employee of such notice,
(ii) the Employee's intentional or habitual neglect of his duties for
the Company or for any parent or subsidiary corporation of the Company
after prior written notice of such neglect, or (iii) the Employee's
theft or misappropriation of funds of the Company or of any parent or
subsidiary corporation of the Company or commission of a felony.
b) Section 7 shall read in its entirety as follows:
7.Exercise Upon Death or Disability. (a) If the Employee dies
while he is employed by the Company or by any parent or subsidiary
corporation of the Company (or within three (3) months after his
retirement from the Company), and on or after the first date upon
which he would have been entitled to exercise the Option under the
provisions of Section 3 hereof, the Option may, subject to the
provisions of Sections 5 and 8 hereof, be exercised with respect to
all or any part of the shares of Common Stock as to which the deceased
Employee had not exercised the Option at the time of his death (but
only to the extent the Option was exercisable at such time), by the
estate of the Employee (or by the person or persons who acquire the
right to exercise the Option by written designation of the Employee)
at any time within the period ending ten (10) years after the Date of
Grant, at the end of which period the Option, to the extent not then
exercised, shall terminate and the estate or other beneficiaries shall
forfeit all rights hereunder. In no event, however, may the Option be
exercised after the expiration of the term provided in Section 4
hereof.
(b) In the event that the employment of the Employee by the
Company and any parent or subsidiary corporation of the Company is
terminated by reason of the Disability (as defined below) of the
Employee on or after the first date upon which he would have been
entitled to exercise the Option under the provisions of Section 3
hereof, the Option may, subject to the provisions of Sections 5 and 8
hereof, be exercised with respect to all or any part of the shares of
Common Stock as to which he had not exercised the Option at the time
of his Disability (but only to the extent the Option was exercisable
at such time) by the Employee, at any
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time within the period ending ten (10) years after the Date of Grant,
at the end of which period the Option, to the extent not then
exercised, shall terminate and the Employee shall forfeit all rights
hereunder even if the Employee subsequently returns to the employ of
the Company or any parent or subsidiary corporation of the Company. In
no event, however, may the Option be exercised after the expiration of
the term provided in Section 4 hereof. For purposes of this Agreement,
"Disability" shall have the same meaning as the term "permanent and
total disability" under Section 22(e)(3) of the Internal Revenue Code
of 1986, as amended (the "Code").
e) The third sentence of Section 9 is hereby deleted such that
Section 9 shall read in its entirety as follows:
9.Merger or Consolidation, Etc. of the Company. Upon (a) the
merger or consolidation of the Company with or into another
corporation, if the agreement of merger or consolidation does not
provide for (i) the continuance of this Option, or (ii) the
substitution of new option(s) for this Option, or for the assumption
of such Option by the surviving corporation, (b) the dissolution,
liquidation, or sale of substantially all the assets of the Company or
(c) if applicable to the Employee, a Change in Control of the
Corporation (as defined herein), the Employee shall have the right
immediately prior to the effective date of such merger, consolidation,
dissolution, liquidation, sale of assets or Change in Control of the
Corporation, to exercise this Option (to the extent not exercised and
not otherwise expired or terminated) in whole or in part without
regard to any installment provision that may have been made part of
the terms and conditions of this Option. The Company, to the extent
practicable, shall give advance notice to the Employee of such merger,
consolidation, dissolution, liquidation, sale of assets or Change in
Control of the Corporation. As used herein, a "Change in Control of
the Corporation" shall be deemed to have occurred if any person
(including any individual, firm, partnership or other entity) together
with all Affiliates and Associates (as defined under Rule 12b-2 of the
General Rules and Regulations promulgated under the Securities
Exchange Act of 1934, as amended) of such person, but excluding (i) a
trustee or other fiduciary holding securities under an employee
benefit plan of the Company or any subsidiary of the Company, (ii) a
corporation owned, directly or indirectly, by the stockholders of the
Company in substantially the same proportions as their ownership of
the Company, (iii) the Company or any subsidiary of the Company or
(iv) only as provided in the immediately following sentence, the
Employee, together with all Affiliates and Associates of the Employee,
is or becomes the Beneficial Owner (as defined in Rule 13d-3
promulgated under the Exchange Act), directly or indirectly, of
securities of the
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Company representing 40% or more of the combined voting power of the
Company's then outstanding securities, such person being hereinafter
referred to as an Acquiring Person. The provisions of clause (iv) of
the immediately preceding sentence shall apply only with respect to
the Option(s) held by the Employee who, together with his Affiliates
or Associates, if any, is or becomes the direct or indirect Beneficial
Owner of the percentage of securities set forth in such clause.
Except as previously amended and as modified above, the
Agreement shall continue in full force and effect. Please indicate your
agreement to the foregoing amendment by executing the acknowledgment to
this letter in the space provided below.
Very truly yours,
ICG HOLDINGS (CANADA), CO.
(successor to IntelCom Group Inc. and
ICG Holdings (Canada), Inc.)
By: /s/ Xxx Xxxxxx
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H. Xxx Xxxxxx, Executive Vice
President
ICG COMMUNICATIONS, INC.
By: /s/ Xxx Xxxxxx
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H. Xxx Xxxxxx, Executive Vice
President
ACCEPTED AND AGREED TO AS OF
the 10th day of March, 1999.
/s/ J. Xxxxxx Xxxxx
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J. Xxxxxx Xxxxx