EXHIBIT 10.55
FIRST AMENDMENT TO EMPLOYMENT AGREEMENT
AND
AMENDMENT TO STOCK OPTION AGREEMENTS
This First Amendment to Employment Agreement dated as of September 11, 2000
(hereinafter referred to as "Amendment"), is by and between FirstWorld
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Communications, Inc., a Delaware corporation (the "Company") and Xxxx Xxxxxx
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("Executive") (collectively, the "Parties").
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RECITALS
A. The Parties have previously entered into an Employment Agreement dated
as of December 7, 1998 (hereinafter referred to as "Employment
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Agreement").
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B. The Parties have previously entered into the Employee Stock Option
Agreements dated April 15, 1999 and December 31, 1999, (hereinafter
collectively referred to as "Prior Option Agreements").
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C. Pursuant to the terms of following amendments, the Parties mutually
desire to: 1) extend the period of employment of Executive through and
including August 31, 2001 under the same terms and conditions as
contained in the Employment Agreement; 2) grant additional options,
and under certain circumstances provide for a longer period in which
to exercise options; and 3) increase in the Executive's bonus
opportunity.
AGREEMENT
IN CONSIDERATION of the foregoing, the mutual covenants contained herein
and other good and valuable consideration, the sufficiency of which is hereby
acknowledged, the Parties hereby agree to amend the Employment Agreement as
follows:
1. Section 2 Term of the Employment Agreement is deleted in its entirety
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and amended to read as follows:
Term. The period of employment of Executive by Company hereunder (the
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"Employment Period") shall commence on December 7, 1998 (the
"Commencement Date") and shall continue through August 31, 2001. The
Employment Period may be sooner terminated by either party in
accordance with Section 5 of this Agreement.
2. Section 4(c) Annual Bonus of the Employment Agreement is deleted in
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its entirety and amended to read as follows:
Annual Bonus. The Board's Compensation Committee (the "Compensation
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Committee") or its delegate shall review Executive's performance at
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least once quarterly during each year of the Employment Period to
review the Executive's performance pursuant to the procedures and
terms of Company's Quarterly Bonus Plan ("Bonus Plan"), as in effect
from time to time. The percentage of Executive's Salary to be used
for calculations under the Bonus Plan shall be an amount equal to 50%
of the Executive's Base Salary. The Executive's Bonus shall be paid
pursuant to the terms and conditions of the Bonus Plan.
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3. Additional Grant of Stock Options ("New Option Agreement"):
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Effective as of the date of this Amendment ("Option Grant Date"),
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Executive shall be awarded a stock option (the "Stock Option") to
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purchase Twenty-Five Thousand (25,000) shares of the Company's Series
B Common Stock, par value $.0001 per share (the "Common Stock"). The
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shares of Common Stock subject to the Stock Option shall vest in
increments of Ten Thousand (10,000) shares on August 1, 2001; Seven
Thousand Five Hundred (7,500) shares on August 1, 2002; and Seven
Thousand Five Hundred (7,500) shares on August 1, 2003. The Purchase
Price for the Common Stock covered by the Option shall be equal to the
fair market value of the Common Stock as measured by the closing price
of a share of Common Stock on NASDAQ on the trading date of the
Commencement Date. The Stock Option will be granted under the 1999
Equity Incentive Plan of FirstWorld Communications, Inc. (the "Plan")
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and the terms and conditions of the Stock Option will be determined in
accordance with the Plan; provided however, to the extent such terms
of the Plan or the New Option Agreement conflict with the terms of the
Employment Agreement, as amended, the terms of the Employment
Agreement will control. To the extent permissible under applicable
law and the Plan, the Stock Option granted under the New Option
Agreement will be granted as incentive stock options.
4. Consistent with Section 4(d) Stock Options of Executive's Employment
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Agreement, Section 5.3 Change in Control of the Prior Option Agreements shall
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read as follows:
Change in Control. Notwithstanding any terms in the Plan to the
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contrary, this Option Agreement, the Employment Agreement, as amended,
or otherwise, all of the Options granted hereunder shall become vested
and exercisable immediately prior to such transaction in the event of
the sale of all or substantially all of the Company's assets or a
merger or consolidation in which the Company is not the surviving
entity, or the Company's stockholders prior to the transaction own
less than 50% of the voting power of the Company's outstanding
securities immediately following the transaction.
5. Section 5.3 of the New Option Agreement shall read as follows:
Change in Control and Accelerated Vesting. Notwithstanding any terms
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in the Plan to the contrary, this Option Agreement, the Employment
Agreement, as amended, or otherwise, all of the Options granted
hereunder shall become vested and exercisable immediately prior to
such transaction in the event of the sale of all or substantially all
of the Company's assets or a merger or consolidation in which the
Company is not the surviving entity, or the Company's stockholders
prior to the transaction own less than 50% of the voting power of the
Company's outstanding securities immediately following the
transaction. In addition, upon termination of Executive's employment
by the Company without Cause or by the Executive for Good Reason prior
to the expiration of the Employment Period, those Options granted
hereunder that would otherwise become vested on or before August 31,
2001 shall become vested and exercisable.
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6. Section 3.3(c) Expiration of Option of the Prior Option Agreements
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shall read as follows:
If the Optionee's employment is terminated by the Company without
Cause or by the Optionee for Good Reason, pursuant to Optionee's
Employment Agreement, as amended, the expiration of the later to occur
of: (i) August 31, 2001, or (ii) thirty (30) days from the Date of
Termination of Employment.
Executive understands that amending the Prior Option Agreements to extend
the opportunity to exercise the Options may adversely affect his tax
consequences under such Prior Option Agreements.
7. Section 3.3(c) Expiration of Option of the New Option Agreement shall
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read as follows:
If the Optionee's employment is terminated by the Company without
Cause or by the Optionee for Good Reason, pursuant to Optionee's
Employment Agreement, as amended, the expiration of the later to occur
of: (i) August 31, 2001, or (ii) ninety (90) days from the Date of
Termination of Employment.
8. Section 12 Notice of the Employment Agreement is amended to read as
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follows:
Notice. For the purposes of this Agreement, notices, demands and all
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other communications provided for in this Agreement shall be in
writing and shall be deemed to have been duly given when delivered
either personally or by United States certified or registered mail,
return receipt requested, postage prepaid, addressed as follows:
If to Executive: Xxxx Xxxxxx
00000 Xxxxxxx Xxxx
Xxxxxx, XX 00000
If to the Company: FirstWorld Communications, Inc.
0000 Xxxx Xxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxxx Xxxxxxx, XX 00000
Attn: General Counsel
Facsimile: (000) 000-0000
or to such other address as any party may have furnished to the others
in writing in accordance herewith, except that notices of change of
address shall be effective only upon receipt.
9. Executive acknowledges that he may be employed by a subsidiary of the
Company, however, the Company will remain liable for all obligations contained
in the Employment Agreement.
10. The Employment Agreement and the Prior Option Agreements are deemed
amended to reflect the changes contemplated by this Amendment. Except as
expressly modified herein, the Employment Agreement and Prior Option Agreements
shall remain in full force and effect in accordance with their terms and
conditions.
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11. Capitalized terms in this Amendment that are not otherwise defined
herein shall have the same meaning as in the Employment Agreement, the Prior
Option Agreements or the New Option Agreement.
12. The Parties agree to execute, deliver and amend such documents as are
reasonably necessary accomplish the Parties' intent hereunder.
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IN WITNESS WHEREOF, the Parties hereto have executed this Amendment on the
date first above written.
FIRSTWORLD COMMUNICATIONS, INC.,
a Delaware corporation
By: /s/ Xxxxx X. Xxxxxxx /s/ Xxxx Xxxxxx
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Name: Xxxxx X. Xxxxxxx Xxxx Xxxxxx
Title: Executive Vice President and
Acting Chief Operating Officer
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