EXHIBIT 4.11
AMENDMENT NO. 1 TO
EXECUTIVE STOCK AGREEMENT AND
EMPLOYMENT AGREEMENT AND CONSENT
--------------------------------
This Amendment No. 1 to Executive Stock Agreement and Employment Agreement
and Consent (this "Amendment") is entered into as of this 21st day of August,
1998, between Focal Communications Corporation, a Delaware corporation (the
"Company"), ▇▇▇▇▇ ▇. ▇▇▇▇ ("Executive"), ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇
▇. ▇▇▇▇▇▇, ▇▇., 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
---------------------------------------
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 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
-------------------------------------
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
------------
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
2
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 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 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
3
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,
-------
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
------------
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
--------------------
inserted for convenience only and do not constitute a part of this Amendment.
[remainder of page intentionally left blank]
4
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of
the date first above written.
__________________________ MADISON DEARBORN CAPITAL
▇▇▇▇▇ ▇. ▇▇▇▇ PARTNERS, L.P.
By: Madison Dearborn Partners, L.P., its General
Partner
By: Madison Dearborn Partners, Inc., its General
Partner
__________________________ By:_______________________________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Its:________________________________________
__________________________ FRONTENAC VI, L.P.
▇▇▇▇▇▇ ▇▇▇▇▇▇ By: Frontenac Company, its General Partner
By:_______________________________________________
Its:________________________________________
___________________________ BATTERY VENTURES III, L.P.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇. . By: Battery Partners III, L.P., its General
Partner
By:_______________________________________________
Its:________________________________________
FOCAL COMMUNICATIONS CORPORATION
By:_______________________________________________
Its:________________________________________
5