EXHIBIT 4.13
AMENDMENT NO. 1 TO
EXECUTIVE STOCK AGREEMENT AND
EMPLOYMENT AGREEMENT AND CONSENT
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This Amendment No. 1 to Executive Stock Agreement and Employment Agreement
and Consent (this "Amendment") is entered into as of this 21/st/ day of August,
1998, between Focal Communications Corporation, a Delaware corporation (the
"Company"), Xxxxxx Xxxxxx ("Executive"), Xxxxx X. Xxxx, Xxxx X. Xxxxxxxx, Xxxxxx
X. Xxxxxx, Xx., Madison Dearborn Capital Partners, L.P., Frontenac VI, L.P. and
Battery Ventures III, L.P. (collectively with Executive, the "Stockholders").
Capitalized terms not otherwise defined in this Agreement are used herein with
the meanings assigned to such terms in the Stock Purchase Agreement, dated
November 27, 1996, by and among the Company and the other parties thereto (as
amended, the "Stock Purchase Agreement") or the Executive Stock Agreement (as
hereinafter defined), as the case may be.
WHEREAS, the Company and the Executive wish to amend the provisions of the
Executive Stock Agreement and Employment Agreement, dated November 27, 1996, by
and between the Company and the Executive (the "Executive Stock Agreement") as
provided in paragraph 1 of this Amendment;
WHEREAS, the Stockholders collectively own all of the Institutional
Investor Stock and at least a majority of the Executive Stock; and
WHEREAS, the Stockholders wish to consent to the amendment (as provided in
paragraph 1 of this Amendment) for purposes of the Stock Purchase Agreement;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties to this Amendment
hereby agree as follows:
1. Amendments to Executive Stock Agreement. Pursuant to Section 9(h) of
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the Executive Stock Agreement:
(a) Paragraph 2(d) of the Executive Stock Agreement is hereby amended
and restated to read in its entirety as follows:
"(d) Acceleration upon a Public Offering. At the closing
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of a Public Offering, if the Executive is then employed by the
Company, there will vest the number of Unvested Shares which were
scheduled to vest within 12 months following such closing, and
on each anniversary of the Closing hereunder following the closing
of a Public Offering, if the Executive is then employed by the
Company, there will vest 20% of the original Unvested Shares (so
that the
vesting schedule set forth in paragraph 2(a) above shall have been
effectively accelerated by one year)."
(b) The first two sentences of paragraph 2(e) of the Executive Stock
Agreement are hereby deleted and replaced with the following:
"(e) Acceleration upon Death or Disability. If Executive's
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employment with the Company or any of its Subsidiaries
terminates by reason of Executive's death or Disability, all
Unvested Shares shall become Vested Shares."
(c) Paragraph 2(f) of the Executive Stock Agreement is hereby
amended by adding the following sentence at the end of such section:
"Any Unvested Shares which the Company (or its assignees
pursuant to paragraph 3(e) hereof) has elected to repurchase
in the Repurchase Notice provided for in paragraph 3(b) below
but for which a closing in accordance with paragraph 3(g) below
has not occurred within the time frame set forth in paragraph
3(g) (as modified by paragraph 3(h), if applicable or extended
by request of or agreement by the Executive) for a reason other
than Executive's failure to perform his obligations under this
paragraph 3 shall thereafter be deemed Vested Shares for
all purposes of this Agreement and the Stockholders Agreement."
(d) Paragraph 3(c)(ii) of the Executive Stock Agreement is hereby
amended and restated in its entirety to read as follows:
"(ii) The Repurchase Price for shares of Vested Executive
Stock repurchased hereunder shall be the fair market value
of such shares on the date of the Repurchase Notice
(determined according to the method set forth in paragraph
3(d) below)."
(e) Paragraph 3(h) of the Executive Stock Agreement is hereby
amended and restated in its entirety as follows:
"(h) Restrictions. All repurchases of Executive Stock by the
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Company shall be subject to applicable restrictions contained
in the Delaware General Corporation Law and in the Company's
and its Subsidiaries debt and equity financing agreements.
If any such restrictions prohibit the repurchase of Executive
Stock hereunder which the Company is otherwise entitled or
required to make, the time periods provided in this paragraph
3 shall be suspended for a period of time not exceeding six
months in the aggregate, and the Company may make such
repurchases (subject to compliance with
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paragraph 3(b) and the other sections of this paragraph 3,
as modified by this paragraph 3(h), if applicable) as soon
as it is permitted to do so under such restrictions, unless
by such time such Repurchase Option has terminated pursuant
to paragraph 3(i) or has been deemed forfeited pursuant to
this paragraph 3(h). Notwithstanding anything in this
paragraph 3 to the contrary, any repurchase of Executive
Stock by the Company and/or its assignees hereunder for which
a closing in accordance with paragraph 3(g) below has not
occurred within the time frame set forth in paragraph 3(g)
(as modified by the paragraph 3(h), if applicable, or extended
by request of or agreement by the Executive) for a reason other
than Executive's failure to perform his obligations under this
paragraph 3 shall be deemed forfeited and neither the Company
nor its assignees shall have any right to repurchase such shares
hereunder."
(f) Paragraph 3(i) of the Executive Stock Agreement is hereby amended
and restated in its entirety to read as follows:
"(i) Termination of Repurchase Option. Unless terminated sooner
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pursuant to the terms of the following sentence, all rights
under this paragraph 3 of the Company and/or its assignees to
repurchase Vested Executive Stock (but not Unvested Shares),
whether or not exercised, shall terminate at the closing of a
Public Offering. To the extent not terminated sooner pursuant
to the terms of the immediately preceding sentence, all rights
under this paragraph 3 of the Company and/or its assignees to
repurchase Executive Stock (whether Vested Shares or Unvested
Shares), whether or not exercised, shall terminate upon a
Qualified Sale of the Company."
(h) The definition of "Noncompete Compensation" set forth in the
fourth sentence of paragraph 7(c) of the Executive Stock Agreement is
hereby amended and restated to read in its entirety as follows:
"Noncompete Compensation" shall consist of 100% of the salary
that Executive received under paragraph 5(d) above as
compensation from the Company and its Subsidiaries immediately
prior to Termination (Executive's "Previous Salary") together
with the continuation of the medical benefits that the Company
provided to Executive immediately prior to Termination
(Executive's "Previous Benefits"); provided that if at any
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time during the Noncompetition Period Executive obtains other
employment (i) with comparable medical benefits to Executive's
Previous Benefits, Executive's Noncompete Compensation shall
during the period of such employment not include the continued
provision of medical benefits, and (ii) with a salary exceeding
100% of Executive's Previous Salary, Executive's
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Noncompete Compensation shall during the period of such
employment be reduced (but not below zero) by the amount
of such excess."
2. Consent. For all purposes of the Stock Purchase Agreement (including,
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without limitation, Sections 4C(xii), 4E and 4G thereof), each of the
Stockholders consents to the amendment set forth in paragraph 1 of this
Amendment.
3. Counterparts. This Amendment may be executed in multiple
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counterparts, each of which shall be an original and all of which taken together
shall constitute one and the same agreement.
4. Descriptive Headings. The descriptive headings of this Amendment are
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inserted for convenience only and do not constitute a part of this Amendment.
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of
the date first above written.
MADISON DEARBORN CAPITAL
__________________________
Xxxxx X. Xxxx PARTNERS, L.P.
By: Madison Dearborn Partners, L.P., its General
Partner
By: Madison Dearborn Partners, Inc., its General
Partner
By:_____________________________________________
__________________________ Its:_______________________________________
Xxxx X. Xxxxxxxx
FRONTENAC VI, L.P.
__________________________
Xxxxxx Xxxxxx By: Frontenac Company, its General Partner
By:_____________________________________________
Its:_______________________________________
BATTERY VENTURES III, L.P.
__________________________
Xxxxxx X. Xxxxxx, Xx. . By: Battery Partners III, L.P., its General
Partner
By:_____________________________________________
Its:_______________________________________
FOCAL COMMUNICATIONS CORPORATION
By:_____________________________________________
Its:_______________________________________
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