EXHIBIT 4.14
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 X. Xxxxxx, Xx. ("Executive"), Xxxxx X. Xxxx, Xxxx X.
Xxxxxxxx, Xxxxxx Xxxxxx, 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
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closing 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
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Executive's 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
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by the 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
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terminated sooner 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
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any 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:________________________________________________
Xxxx X. Xxxxxxxx Its:_________________________________________
_________________________ 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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