THIRD AMENDMENT TO STOCKHOLDERS' AGREEMENT
THIS THIRD AMENDMENT TO STOCKHOLDERS' AGREEMENT (this "Amendment") is
dated as of ____________ , 1998 and is made and entered into by and among the
undersigned parties.
RECITALS
The undersigned parties, constitute the "Majority Investors,"
"Majority Shareholders" and the "Company" under that certain Stockholders'
Agreement, dated as of September 25, 1996, and amended by that First Amendment
to Shareholders' Agreement dated as of August 29, 1997 and the Second Amendment
to Stockholder's Agreement dated January __, 1998 (the "Stockholders'
Agreement")
The undersigned desire to amend the Stockholders' Agreement under
Section 5.3 thereof.
AGREEMENT
Therefore, for good and valuable consideration the receipt and sufficiency
of which are hereby acknowledged, the parties hereto hereby agree as follows:
1. CERTAIN DEFINED TERMS. Unless otherwise expressly defined in this
Amendment, capitalized terms used in this Amendment have the respective meanings
assigned to them in the Stockholders' Agreement.
2. AMENDMENTS TO THE STOCKHOLDERS' AGREEMENT. Effective as of the date
hereof, the Stockholders' Agreement is hereby amended as follows:
a. The definition of Employee Option, appearing in Section 1.1 of
the Stockholders' Agreement is hereby amended in its entirety to read as
follows:
EMPLOYEE OPTION: Any option to purchase Common Stock for cash which
is granted by or with the approval of the Board of Directors or the
Compensation Committee (to the extent such committee is authorized by
the Board of Directors to grant such options) to any director,
officer, employee or consultant of the Corporation or any subsidiary
of the Corporation pursuant to either (i) the Corporation's 1993 Stock
Option Plan or the Corporation's 1994 Stock Option Plan as in effect
on the Closing Date, (ii) any other option plan adopted by the
Corporation after the Closing Date with the prior approval of the
Majority Investors, in each case as the same may be amended from time
to time with the prior approval of the Majority Investors, or (iii)
any stock option plan in the form approved by the Board of Directors
for the issuance of Common Stock which shall not exceed 82,000 shares
of Common Stock (as adjusted for stock splits, combinations,
recapitalization, reorganizations and similar transactions) provided
that the options granted pursuant to such plans shall not be issued
with an exercise
price per share of Common Stock less than the lesser of (a) $77 (as
adjusted for stock splits, combinations, recapitalizations,
reorganizations and other similar transactions) or (b) the Conversion
Price at the time of issuance, without the consent of the Series B
Director.
b. Section 3.8(a)(iii) of the Stockholders' Agreement is amended by
deleting the words "Compensation Committee" therein and inserting "Board of
Directors or the Compensation Committee (to the extent such committee is
authorized by the Board of Directors to grant such options)" in their
place.
c. Section 3.8(a)(xi) of the Stockholders' Agreement is amended by
deleting the words "Compensation Committee" where such words appear and
inserting "Board of Directors" in their place.
d. Section 3.13 of the Stockholders' Agreement is amended in its
entirety to read as follows:
Section 3.13. AUDIT, COMPENSATION AND VALUATION COMMITTEES.
Unless the Majority Investors otherwise agree, the Board of Directors
shall have an audit committee (the "Audit Committee"), a compensation
committee (the "Compensation Committee") and a valuation committee
(the "Valuation Committee"), each of which shall have three members
one of whom shall be the Series B Director, and at least one other of
whom shall be a Disinterested Outside Director and, so long as the
directors of the Company include directors designated pursuant to
SECTION 3.1(a), one of the directors designated pursuant to SECTION
3.1(a). The Audit Committee will have the authority and
responsibility for making recommendations to the Board of Directors
for the selection, engagement or discharge of independent auditors,
reviewing with the independent auditors the plan and results of the
auditing engagement, reviewing the Company's systems of internal
accounting controls, directing investigations in matters within the
scope of its functions and performing any and all other such functions
customarily performed by audit committees of public companies. The
Compensation Committee will have the authority and responsibility for
making recommendations to the Board of Directors in respect of
establishing and administering the stock, incentive and other employee
benefit plans of the Company, establishing and changing the
compensation of executive officers, approving or amending existing and
proposed employment agreements between the Company and its executive
officers and performing any and all other such functions customarily
performed by compensation committees of public companies. The
Valuation Committee shall have the authority and responsibilities as
described in the Series B Certificate of Designation. None of the
Audit Committee, Compensation Committee or Valuation Committee shall
have the authority to exercise any powers of the Board of Directors
except to the extent authorized by the Board of Directors pursuant to
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a resolution adopted with the concurrence of the Series B Director,
or, if there is no Series B Director, the Series C Director, or, if
there is no Series C Director, the Majority Investors. The
requirement of the Board of Directors to designate each of the Audit
Committee, the Compensation Committee and the Valuation Committee as
set forth in this SECTION 3.13 shall terminate on the earlier of the
date on which (i) all of the shares of Senior Preferred Stock held by
the Investors are converted into Common Stock of the Company or (ii)
the Investors no longer hold any shares of Senior Preferred Stock.
3. REAFFIRMATION. The undersigned parties acknowledge that the
Stockholder's Agreement, as amended hereby, remains in full force and effect and
is hereby ratified and affirmed.
IN WITNESS WHEREOF, the undersigned have duly executed and delivered this
Third Amendment to Stockholders' Agreement as of the date first above written.
"Company"
NEXT GENERATION NETWORK, INC.
By:____________________________
Xxxxxx X. Xxxxxxxx, Chief Executive Officer
"Majority Shareholders"
___________________________________
XXXXXX X. XXXXX
___________________________________
XXXXXX X. XXXXXXXX
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"Majority Investors"
21ST CENTURY COMMUNICATIONS
PARTNERS, L.P.
By: SANDLER INVESTMENT
PARTNERS, L.P., General Partner
By: SANDLER CAPITAL MANAGEMENT, General Partner
By: MJDM MEDIA CORP., General Partner
By: _________________________________
President
21ST CENTURY COMMUNICATIONS T-E
PARTNERS, L.P.
By: SANDLER INVESTMENT
PARTNERS, L.P., General Partner
By: SANDLER CAPITAL MANAGEMENT,
General Partner
By: MJDM MEDIA CORP., General Partner
By: _________________________________
President
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21ST CENTURY COMMUNICATIONS
FOREIGN PARTNERS, L.P.
By: SANDLER INVESTMENT
PARTNERS, L.P., General Partner
By: SANDLER CAPITAL
MANAGEMENT, General Partner
By: MJDM MEDIA CORP., a General Partner
By: __________________________________
President
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