FORM OF NON-QUALIFIED STOCK OPTION AGREEMENT
THIS AGREEMENT, dated as of ___________ ___, 199__, is made by and
between KMC Telecom Holdings, Inc., a Delaware corporation hereinafter referred
to as the "Corporation", and ____________________, an employee of the
Corporation or a Subsidiary (as defined below) or Affiliate (as defined below)
of the Corporation, hereinafter referred to as "Optionee".
WHEREAS, the Corporation wishes to afford the Optionee the opportunity
to purchase shares of its Common Stock, par value $.01 per share (the "Common
Stock");
WHEREAS, the Corporation wishes to carry out the Plan (as hereinafter
defined), the terms of which are hereby incorporated by reference and made a
part of this Agreement; and
WHEREAS, the Committee (as hereinafter defined), appointed to
administer the Plan, has determined that it would be to the advantage and best
interest of the Corporation and its stockholders to grant the Non-Qualified
Options provided for herein to the Optionee as an incentive for increased
efforts during his term of office with the Corporation or its Subsidiaries or
Affiliates, and has advised the Corporation thereof and instructed the
undersigned officers to issue said Options;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, receipt of which is hereby
acknowledged, the parties hereto do hereby agree as follows:
Article I
DEFINITIONS
Whenever the following terms are used in this Agreement, they shall
have the meaning specified in the Plan or below unless the context clearly
indicates to the contrary.
SECTION 1.1 - AFFILIATE
"Affiliate" shall mean, with respect to the Corporation, any
corporation directly or indirectly controlling, controlled by, or under common
control with, the Corporation or any other entity designated by the Board of
Directors of the Corporation in which the Corporation or an Affiliate has an
interest.
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SECTION 1.2 - CAUSE
"Cause" shall mean, except if such term or similar term is defined in
an employment agreement between the Corporation and the Optionee, in which case
the employment agreement definition shall apply in lieu of this Section 1.2, (a)
the commission of an act of fraud or embezzlement (including the unauthorized
disclosure of confidential or proprietary information of the Corporation or any
of its subsidiaries which results in financial loss to the Corporation or any of
its Affiliates), (b) the conviction of a felony, (c) willful misconduct as an
employee of the Corporation or any of its Affiliates which is reasonably likely
to result in material injury or financial loss to the Corporation or any of its
Affiliates or (d) the willful failure to render services to the Corporation or
any of its Affiliates in accordance with his employment which failure amounts to
a material neglect of duties to the Corporation or any of its subsidiaries that
is not corrected by the Optionee, to the satisfaction of the Corporation, in its
sole discretion, within 30 days after the Corporation provides Optionee with
written notice of its intention to terminate his employment for Cause by virtue
of this section (d). Any voluntary termination of employment by the Optionee (i)
within 40 days after having received the written notice provided in section (d)
or (ii) after the Corporation first has reason to believe that the Optionee has
committed a felony and before any final judicial determination regarding such
felony, shall be deemed to be a termination of Optionee's employment by the
Corporation for Cause.
SECTION 1.3 - CODE
"Code" shall mean the Internal Revenue Code of 1986, as amended.
SECTION 1.4 - COMMITTEE
"Committee" shall mean the Compensation Committee of the Corporation.
SECTION 1.5 - COMMON STOCK
"Common Stock" shall mean the Corporation's common stock, par value
$.0l per share.
SECTION 1.6 - COST
"Cost" shall mean the exercise price per share paid to exercise the
option, as adjusted for stock splits, subdivisions, combinations, Common Stock
dividends and similar transactions.
SECTION 1.7 - GRANT DATE
"Grant Date" shall mean the date on which the Options provided for in
this Agreement were granted or, if earlier, the date the Optionee's employment
with the Company or any Affiliate began, but in no event earlier than January 1,
1995.
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SECTION 1.8 - MANAGER STOCKHOLDER'S AGREEMENT
"Manager Stockholder's Agreement" shall mean a Manager Stockholder's
Agreement substantially in the form annexed hereto as Exhibit A.
SECTION 1.9 - OPTIONS
"Options" shall mean the non-qualified options to purchase Common
Stock granted under this Agreement.
SECTION 1.10 - OPTION SHARES
"Option Shares" shall mean any Common Stock issuable or issued by the
Company upon exercise of any Option, as adjusted as a result of any stock
dividend, stock split, merger, consolidation, reorganization or other
recapitalization.
SECTION 1.11 - PERMANENT DISABILITY
The Optionee shall be deemed to have a "Permanent Disability" if the
Optionee is unable to engage in the activities required by the Optionee's job by
reason of any medically determined physical or mental impairment which has
lasted for a continuous period of not less than 12 months.
SECTION 1.12 - PLAN
"Plan" shall mean the 1998 Stock Purchase and Option Plan for Key
Employees of KMC Telecom Holdings, Inc. and Affiliates, as amended from time to
time.
SECTION 1.13 - PRONOUNS
The masculine pronoun shall include the feminine and neuter, and the
singular the plural, where the context so indicates.
SECTION 1.14 - PUBLIC OFFERING
"Public Offering" shall mean a sale of shares of the Corporation's
common stock to the public pursuant to a registration statement under the
Securities Act of 1933, as amended, that has been declared effective by the
Securities and Exchange Commission (other than a registration statement on Form
S-4 or Form S-8, or any successor or other forms promulgated for similar
purposes, or a registration statement in connection with an offering to
employees of the Corporation and its Affiliates).
SECTION 1.15 - QUALIFIED PUBLIC OFFERING
"Qualified Public Offering" shall mean the first offer for sale of
Common Stock, in any single transaction or series of related transactions,
pursuant to an effective registration statement filed by the Company under the
Securities Act of 1933, as amended, in which the Company receives aggregate
gross proceeds (before deduction of underwriting discounts and expenses of sale)
of at least $40,000,000, provided that, the price per share at which such shares
are sold in the offering (before deduction of underwriting discounts and
expenses of sale) is at least four (4) times the Conversion Price of the
Company's Series A Convertible Preferred Stock (it being acknowledged that, as
of May 31, 1998, such Conversion Price was $20.63 per share) which would then be
in effect if determined pursuant to the terms of the Series A Convertible
Preferred Stock in effect (whether or not any shares of such stock are then
outstanding).
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SECTION 1.16 - RETIREMENT
"Retirement" shall mean the voluntary termination of employment by the
Optionee after the later of (i) having been employed by the Corporation for a
period of 5 years following the Grant Date or by an Affiliate for a period of 5
years from the later of (a) January 1, 1995 or (b) the date Optionee first
rendered service to the Affiliate and (ii) the date on which the sum of (a) the
Optionee's years of service (calculated as in (i) above) and (b) the Optionee's
age, equals or exceeds 65, unless the Committee shall have provided, prior to
the Grant Date or thereafter, that some other lesser age, period of service,
combination thereof or other terms or conditions shall constitute "Retirement".
SECTION 1.17 - SECRETARY
"Secretary" shall mean the Secretary of the Corporation.
SECTION 1.18 - SUBSIDIARY
"Subsidiary" shall mean any corporation in an unbroken chain of
corporations beginning with the Corporation if each of the corporations, or
group of commonly controlled corporations (other than the last corporation in
the unbroken chain), then owns stock possessing 50% or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.
ARTICLE II
GRANT OF OPTIONS
SECTION 2.1 - GRANT OF OPTIONS
For good and valuable consideration, on and as of the date hereof the
Corporation irrevocably grants to the Optionee an Option to purchase any part or
all of an aggregate of the number of shares set forth with respect to each such
Option on the signature page hereof of its $.0l par value Common Stock upon the
terms and conditions set forth in this Agreement.
SECTION 2.2 - EXERCISE PRICE
Subject to Section 2.4, the exercise price of the shares of stock
covered by the Options shall be at the price per share, without commission or
other charge, as follows:
- shares (representing 60 percent of the shares hereunder) shall be at $20
- shares (representing 20 percent of the shares hereunder) shall be at $30
- shares (representing 20 percent of the shares hereunder) shall be at $40
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SECTION 2.3 - CONSIDERATION TO THE CORPORATION
In consideration of the granting of these Options by the Corporation,
the Optionee agrees to render faithful and efficient services to the Corporation
or a Subsidiary or Affiliate, with such duties and responsibilities as the
Corporation shall from time to time prescribe but subject to the employment
agreement, if any, between the Company and the Optionee. Nothing in this
Agreement or in the Plan shall confer upon the Optionee any right to continue in
the employ of the Corporation or any Subsidiary or Affiliate or shall interfere
with or restrict in any way the rights of the Corporation and its Subsidiaries
or Affiliates, which are hereby expressly reserved, to terminate the employment
of the Optionee at any time for any reason whatsoever, with or without cause.
Notwithstanding the foregoing, any termination shall be subject to the
employment agreement, if any, between the Company and the Optionee.
SECTION 2.4 - ADJUSTMENTS IN OPTIONS PURSUANT TO MERGER, CONSOLIDATION, ETC.
Subject to Section 9 of the Plan, in the event that the outstanding
shares of the stock subject to an Option are, from time to time, changed into or
exchanged for a different number or kind of shares of the Corporation or other
securities of the Corporation by reason of a merger, consolidation,
recapitalization, Change of Control, reclassification, stock split, stock
dividend, combination of shares, or otherwise, the Committee shall make an
appropriate and equitable adjustment in the number and kind of shares and/or the
amount of consideration as to which or for which, as the case may be, such
Option, or portions thereof then unexercised, shall be exercisable. Any such
adjustment made by the Committee shall be final and binding upon the Optionee,
the Corporation and all other interested persons.
Article III
PERIOD OF EXERCISABILITY
SECTION 3.1 - COMMENCEMENT OF EXERCISABILITY
(a) The Option shall become exercisable as to 10% of the shares
subject to the Option on the sixth month anniversary of the Grant Date and shall
become exercisable as to an additional 10% of the shares upon each six month
anniversary thereafter; provided, however, that subject to the foregoing
schedule, the portion of the Option which shall first become exercisable shall
be those shares exercisable at $20 per share; thereafter, commencing in the
fourth year after grant, the shares with an exercise price of $30 per share
shall become exercisable and, commencing in the fifth year after grant, the
shares with an exercise price of $40 per share shall become exercisable. (b)
Notwithstanding any other provision of this Agreement, no Option shall become
exercisable as to any additional shares of Common Stock following the
termination of employment of the Optionee for any reason and any Option or
portion thereof which is not exercisable as of the Optionee's termination of
employment shall be immediately cancelled.
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SECTION 3.2 - ACCELERATION OF EXERCISABILITY
The exercisability of the Option shall be accelerated as follows:
(a) In the event of a Qualified Public Offering, the 10% of the shares
subject to the Option which would have become exercisable at the next six month
anniversary of the Grant Date shall become immediately exercisable. The
remaining portion of the shares subject to the Option shall continue to become
exercisable as to each 10% of the shares subject to the Option, following the
Qualified Public Offering, upon each six month anniversary of the Grant Date so
that the final unvested 10% of the shares subject to the Option shall become
exercisable six months earlier than originally scheduled.
(b) The Option shall become exercisable immediately following a Change
of Control as to the greater of (i) 25% of the shares subject to the Option as
of the Grant Date or (ii) 50% of the unvested shares subject to the Option, but
only to the extent such Option has not otherwise terminated (75% of the unvested
shares if the sale price per share is between $60 - $79.99 and 100% of the
unvested shares if the sale price per share is $80 or greater) (in either (i) or
(ii), starting with the shares with the lowest exercise price). The remaining
Options shall continue to vest in accordance with the terms of this Agreement
and the Plan.
SECTION 3.3 - EXPIRATION OF OPTIONS
The Options may not be exercised to any extent by the Optionee after
the first to occur of the following events:
(a) The tenth anniversary of the Grant Date; or
(b) The first anniversary of the date of the Optionee's termination of
employment by reason of death, Permanent Disability or Retirement; or
(c) The first business day which is fifteen calendar days after the
earlier of (i) 75 days after termination of employment of the Optionee for
any reason other than for death, Permanent Disability, Retirement or Cause
or (ii) the delivery of notice by the Corporation, after termination of
Optionee's employment, that it does not intend to exercise its call right
pursuant to Section 5.3; or
(d) The date the Option is terminated pursuant to the Manager
Stockholder's Agreement;
(e) The date of an Optionee's termination of employment by the
Corporation for Cause; or
(f) If the Committee so determines pursuant to Section 9 of the Plan,
the effective date of either the merger or consolidation of the Corporation
into another Person, a Change of Control, or the recapitalization,
reclassification, liquidation or dissolution of the Corporation. At least
ten (10) days prior to the effective date of such merger, consolidation,
exchange, acquisition, recapitalization, reclassification, liquidation or
dissolution, the Committee shall give the Optionee notice, in writing, of
such event if the Option has then neither been fully exercised nor become
unexercisable under this Section 3.2.
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ARTICLE IV
EXERCISE OF OPTIONS
SECTION 4.1 - PERSON ELIGIBLE TO EXERCISE
During the lifetime of the Optionee, only he may exercise an Option or
any portion thereof. After the death of the Optionee, any exercisable portion of
an Option may, prior to the time when an Option becomes unexercisable under
Section 3.3, be exercised by his personal representative or by any person
empowered to do so under the Optionee's will or under the then applicable laws
of descent and distribution.
SECTION 4.2 - PARTIAL EXERCISE AND PERIODS OF UNEXERCISABILITY
Any exercisable portion of an Option or the entire Option, if then
wholly exercisable, may be exercised in whole or in part at any time, or from
time to time, prior to the time when the Option or portion thereof becomes
unexercisable under Section 3.3; provided, however, that any partial exercise
shall be for whole shares of Common Stock only; provided, further, that
notwithstanding any other provision of this Agreement, no Option shall be
exercisable during: a) the 40 day period commencing on the date the Corporation
provides written notice to the Optionee that it intends to terminate Optionee's
employment pursuant to provision (d) of the definition of Cause if the Optionee
does not cure; or b) the period between the time the Corporation first has
reasonable cause to believe that Optionee has committed a felony and any final
judicial determination regarding such felony.
SECTION 4.3 - MANNER OF EXERCISE
An Option, or any exercisable portion thereof, may be exercised solely
by delivering to the Secretary or his office all of the following prior to the
time when the Option or such portion becomes unexercisable under Section 3.3:
(a) Notice in writing signed by the Optionee or the other person then
entitled to exercise the Option or portion thereof, stating that the Option
or portion thereof is thereby exercised, such notice complying with all
applicable administrative rules established by the Committee. In the event
such rules are materially modified by the Committee such Optionee shall be
notified in writing;
(b) Full payment (in cash, by check, unrestricted shares of the
Company held for at least six months (but only following a Public Offering)
or by a combination thereof) for the shares with respect to which such
Option or portion thereof is exercised;
(c) A bona fide written representation and agreement, in a form
satisfactory to the Committee, signed by the Optionee or other person then
entitled to exercise such Option or portion thereof, stating that the
shares of stock are being acquired for his own account, for investment and
without any present intention of distributing or reselling said shares or
any of them except as may be permitted under the Securities Act of 1933, as
amended (the "Act"), and then applicable rules and regulations thereunder,
and that the Optionee or other person then entitled to exercise such Option
or portion thereof will indemnify the Corporation against and hold it free
and harmless from any loss, damage, expense or liability resulting to the
Corporation if any sale or distribution of the shares by such person is
contrary to the representation and agreement referred to above; provided,
however, that the Committee may, in its discretion, take whatever
additional actions it deems appropriate to ensure the observance and
performance of such representation and agreement and to effect compliance
with the Act and any other federal or state securities laws or regulations;
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(d) Full payment to the Corporation of all amounts which, under
federal, state or local law, it is required to withhold upon exercise of
the Option;
(e) An executed Manager Stockholder's Agreement, or appropriate proof
that a Manager Stockholder's Agreement has been previously executed by the
Optionee; and
(f) In the event the Option or portion thereof shall be exercised
pursuant to Section 4.1 by any person or persons other than the Optionee,
appropriate proof of the right of such person or persons to exercise the
option.
Without limiting the generality of the foregoing, the Committee may require an
opinion of counsel reasonably acceptable to it to the effect that any subsequent
transfer of shares acquired on exercise of an Option does not violate the Act,
and. may issue stop-transfer orders covering such shares, provided such
stop-transfer orders remain in effect only so long as is required to Permit the
Company to remain in compliance with the Act. Share certificates evidencing
stock issued on exercise of this Option shall bear an appropriate legend
referring to the provisions of subsection (c) above and the agreements herein.
The written representation and agreement referred to in subsection (c) above
shall, however, not be required if the shares to be issued pursuant to such
exercise have been registered under the Act, and such registration is then
effective in respect of such shares.
In addition, after the occurrence of a Public Offering, the
Corporation shall pay the interest expenses incurred by the Optionee in
connection with any loan from a broker incurred by the Optionee in order to
exercise his Option; provided, however, that the Corporation shall only
reimburse the interest relating to such loan outstanding for a period not to
exceed 5 business days.
SECTION 4.4 - CONDITIONS TO ISSUANCE OF STOCK CERTIFICATES
The shares of stock deliverable upon the exercise of an Option, or any
portion thereof, may be either previously authorized but unissued shares or
issued shares which have then been reacquired by the Corporation. Such shares
shall be fully paid and nonassessable. The Corporation shall not be required to
issue or deliver any certificate or certificates for shares of stock purchased
upon the exercise of an Option or portion thereof prior to fulfillment of all of
the following conditions:
(a) The obtaining of approval or other clearance from any state or
federal governmental agency which the Committee shall, in its absolute
discretion, determine to be necessary or advisable; and
(b) The lapse of such reasonable period of time following the exercise
of the Option as the Committee may from time to time establish for reasons
of administrative convenience.
SECTION 4.5 - RIGHTS AS STOCKHOLDER
The holder of an Option shall not be, nor have any of the rights or
privileges of, a stockholder of the Corporation in respect of any shares
purchasable upon the exercise of the Option or any portion thereof unless and
until certificates representing such shares shall have been issued or, upon the
determination of a court of competent jurisdiction, should have been issued by
the Corporation to such holder.
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ARTICLE V
MISCELLANEOUS
SECTION 5.1 - ADMINISTRATION
The Committee shall have the power, such power to be exercised
reasonably, to interpret the Plan and this Agreement and to adopt such rules for
the administration, interpretation and application of the Plan as are consistent
therewith and herewith and to interpret or revoke any such rules. All such
actions taken and all interpretations and determinations made by the Committee
shall be final and binding upon the Optionee, the Corporation and all other
interested persons. No member of the Committee shall be personally liable for
any action, determination or interpretation made in good faith with respect to
the Plan or the Options. In its absolute discretion, the Board of Directors may
at any time and from time to time exercise any and all rights and duties of the
Committee under the Plan and this Agreement.
SECTION 5.2 - OPTIONS NOT TRANSFERABLE
Except as provided in the Manager Stockholder's Agreement, neither the
Options nor any interest or right therein or part thereof shall be liable for
the debts, contracts or engagements of the Optionee or his successors in
interest or shall be subject to disposition by transfer, alienation,
anticipation, pledge, encumbrance, assignment or any other means whether such
disposition be voluntary or involuntary or by operation of law by judgment,
levy, attachment, garnishment or any other legal or equitable proceedings
(including bankruptcy), and any attempted disposition thereof shall be null and
void and of no effect; provided, however, that this Section 5.2 shall not
prevent transfers by will or by the applicable laws of descent and distribution.
SECTION 5.3 - CORPORATION'S OPTION TO PURCHASE UPON TERMINATION OF EMPLOYMENT
(a) Upon any termination of Optionee's employment, the Corporation
shall have the right for 75 days following the date of such termination to give
notice to the Optionee and the Optionee shall be required to sell, on one
occasion, within 60 days of the receipt of such notice, a specified portion of
the Option and Option Shares then held by the Optionee at a specified price as
follows:
(i) If the Optionee is terminated without Cause or due to death,
Permanent Disability or Retirement, the Optionee shall be required to sell to
the Company 50% of the Option and Option Shares then held by the Optionee at a
price equal to:
(A) with respect to Option being sold to the Company, the excess of
(a) the Fair Market Value, at the time of the termination of Optionee's
employment, of the shares to be received upon exercise of the Option (not
including any shares as to which the Option was not exercisable) over (b) the
aggregate exercise price for those shares; and
(B) with respect to the Option Shares being sold to the Company, the
Fair Market Value of the shares, at the time of the termination of Optionee's
employment;
(ii) If the Optionee voluntarily terminates employment, the Optionee
shall be required to sell to the Company all the Option and Option Shares then
held by the Optionee at a price equal to:
(A) with respect to Option being sold to the Company, the excess of
(a) the Fair Market Value, at the time of the termination of Optionee's
employment, of the shares to be received upon exercise of the Option (not
including any shares as to which the Option was not exercisable) over (b) the
aggregate exercise price for those shares; and
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(B) with respect to the Option Shares being sold to the Company, the
Fair Market Value of the shares, at the time of the termination of Optionee's
employment;
(iii) If the Optionee is terminated by the Company for Cause, the
Optionee shall be required to sell to the Company all or any portion of the
Option Shares then held by the Optionee at a price equal to the lesser of Cost
or Fair Market Value.
(b) If the Company exercises its right under (a) above, the Optionee
shall receive payments for such Option and/or Option Shares as follows:
(i) If the Optionee is terminated without Cause or due to death,
Permanent Disability or Retirement, the Optionee shall receive payment in cash;
provided, however' that if the Company cannot make such payment in cash, the
Company's shareholders shall have the ability to exercise the rights specified
in (a) above.
(ii) If the Optionee is terminated for Cause, the Optionee shall
receive, at the Company's discretion, payment in the form of cash or Company
notes; any such Company notes will bear interest, payable semi-annually, at a
rate of prime plus 1% per annum and shall mature on the later of (A) the fifth
anniversary of the issuance thereof and (B) the earliest date permitted under
the terms of any indebtedness of the Company or its subsidiaries outstanding at
the time of such issuance.
(iii) If the Optionee voluntarily terminates employment, the Optionee
shall receive, at the Company's discretion, payment in the form of cash or 50%
in the form of cash and 50% in the form of Company notes; any such Company notes
will bear interest, payable semi-annually, at a rate of prime plus 1% per annum
and shall mature on the later of (A) the fifth anniversary thereof and (B) the
earliest date permitted under the terms of any indebtedness of the Company or
its subsidiaries outstanding at the time of such issuance; i) PROVIDED, HOWEVER,
that if the Optionee does not violate the noncompete provisions of the Manager
Stockholder's Agreement, the note shall be paid, if earlier than the date
specified in the immediately preceding clause of this paragraph (iii), at the
conclusion of the Noncompete Period (including extensions) (as defined in the
Manager Stockholder's Agreement).
SECTION 5.4 - SHARES TO BE RESERVED
The Corporation shall at all times during the term of the Options
reserve and keep available such number of shares of stock as will be sufficient
to satisfy the requirements of this Agreement.
SECTION 5.5 - NOTICES
Any notice to be given under the terms of this Agreement to the
Corporation shall be addressed to the Corporation in care of its Secretary, and
any notice to be given to the Optionee shall be addressed to him at the address
given beneath his signature hereto. By a notice given pursuant to this Section
5.5, either party may hereafter designate a different address for notices to be
given to him. Any notice which is required to be given to the Optionee shall, if
the Optionee is then deceased, be given to the Optionee's personal
representative if such representative has previously informed the Corporation of
his status and address by written notice under this Section 5.5. Any notice
shall have been deemed duly given three days after the date when enclosed in a
properly seated envelope or wrapper addressed as aforesaid and sent via
certified or registered mail, return receipt requested.
SECTION 5.6 - TITLES
Titles are provided herein for convenience only and are not to serve
as a basis for interpretation or construction of this Agreement.
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SECTION 5.7 - APPLICABILITY OF PLAN AND MANAGER STOCKHOLDER'S AGREEMENT
The Option and the shares of Common Stock issued to the Optionee upon
exercise of the Options shall be subject to all of the terms and provisions of
the Plan and the Manager Stockholder's Agreement, to the extent applicable to
the Options and such shares. In the event of any conflict between this Agreement
and the Plan, the terms of the Plan shall control. In the event of any conflict
between this Agreement and the employment agreement, if any, between the Company
and the Optionee, the terms of the employment agreement shall control; provided,
that such employment agreement, and any amendments thereto, has been approved by
the Committee. In the event of any conflict between this Agreement or the Plan
and the Manager Stockholder's Agreement, the terms of the Manager Stockholder's
Agreement shall control.
SECTION 5.8 - AMENDMENT
This Agreement may be amended only by a writing executed by the
parties hereto which specifically states that it is amending this Agreement.
SECTION 5.9 - GOVERNING LAW
The laws of the State of New York shall govern the interpretation,
validity and performance of the terms of this Agreement regardless of the law
that might be applied under principles of conflicts of laws.
SECTION 5.10 - JURISDICTION
Any suit, action or proceeding against the Optionee with respect to
this Agreement, or any judgment entered by any court in respect of any thereof,
may be brought in any court of competent jurisdiction in the State of New York,
and the Optionee hereby submits to the non-exclusive jurisdiction of such courts
for the purpose of any such suit, action, proceeding or judgment. The Optionee
hereby irrevocably waives any objections which he may now or hereafter have to
the laying of the venue of any suit, action or proceeding arising out of or
relating to this Agreement brought in any court of competent jurisdiction in the
State of New York, and hereby further irrevocably waives any claim that any such
suit, action or proceeding brought in any such court has been brought in any
inconvenient forum. No suit, action or proceeding against the Corporation with
respect to this Agreement may be brought in any court, domestic or foreign, or
before any similar domestic or foreign authority other than in a court of
competent jurisdiction in the State of New York, and the Optionee hereby
irrevocably waives any right which he may otherwise have had to bring such an
action in any other court, domestic or foreign, or before any similar domestic
or foreign authority. The Corporation hereby submits to the jurisdiction of such
courts for the purpose of any such suit, action or proceeding.
SECTION 5.11 - CANCELLATION OF KMC TELECOM, INC. OPTIONS
The Optionee hereby agrees, that in consideration of the Options
granted hereunder, that any and all options granted to the Optionee pursuant to
the 1996 Stock Purchase and Option Plan for Key Employees of KMC Telecom, Inc.
and Affiliates shall become null and void and of no force or effect upon
approval of the Plan by the stockholders of the Company.
IN WITNESS WHEREOF, this Agreement has been executed and delivered by
the parties hereto.
KMC TELECOM HOLDINGS, INC.
By ______________________________
Name:
Title:
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Aggregate number of shares of Common
Stock for which the Option granted
--------------------------------- hereunder is exercisable:
Optionee
--------------------------------- ------------------
---------------------------------
Address
Optionee's Taxpayer
Identification Number:
--------------------
EXHIBIT A
---------
MANAGER STOCKHOLDER'S AGREEMENT
This Manager Stockholder's Agreement (this "Agreement") is entered
into as of ____________ __, 199_ between KMC Telecom Holdings, Inc., a Delaware
corporation (the "COMPANY") , (the "Manager"), Nassau Capital Partners L.P.
("Nassau Capital"), NAS Partners I L.L.C. ("NAS" and, together with Nassau
Capital, "Nassau") and Xxxxxx X. Xxxxxx ("HNK")
RECITALS
The Company has established the 1998 Stock Purchase and Option Plan
for Key Employees of KMC Telecom Holdings, Inc. and Affiliates (the Option
Plan"), providing for, among other things, the grant of options ("Options") to
purchase Common Stock, par value $.01 per share, of the Company ("Common
Stock").
Effective as of the date hereof, the Company is granting Options to
the Manager, certain of which ("Replacement Options") are being granted in
replacement of options ("Predecessor Options") to purchase Class C Common Stock,
par value $.01 per share, of KMC Telecom, Inc. ("KMC"), a wholly owned
subsidiary of the Company, heretofore granted to the Manager under the 1996
Stock Purchase and Option Plan of KMC Telecom, Inc. and Affiliates (the
"Predecessor Plan") .
The Company also is granting, or will grant, Options to certain other
individuals who are or will be key employees or directors of, or persons having
a unique relationship with, the Company or one of its affiliates (collectively,
the "Other Managers") , each of whom is entering into, or will enter into, an
agreement substantially in the form of this Agreement (the "Other Manager
Agreements").
The Company is a party to an Amended and Restated Stockholders
Agreement dated as of October 31, 1997 (as amended from time to time, the
"Stockholders Agreement") with certain stockholders of the Company (such
stockholders as are, from time to time, parties to the Stockholders Agreement
being referred to collectively as the "Existing Stockholders").
The Company also is a party to a Warrant Registration Rights Agreement
dated as of January 26, 1998 (as amended or supplemented from time to time, the
"Registration Rights Agreement") with Xxxxxx Xxxxxxx & Co. Incorporated,
pursuant to which the Company has granted certain registration rights to the
record holders of the warrants to purchase shares of Common Stock referred to
therein (the "Warrants") and the holders of Stock (or other securities) received
upon exercise thereof (the "Warrant Holders").
2
The Company and the Manager wish to make provision for certain terms
of ownership of Capital Stock (as herein defined) by the Manager as a result of
the exercise of Options, Consistent with the Company's obligations under the
Stockholders Agreement and the Registration Rights Agreement.
Accordingly, the parties hereto agree as follows:
1. DEFINITIONS. As used herein, the following terms shall have the
following meanings:
"ACT" shall have the meaning ascribed to such term in section 2(a).
"AFFILIATE" shall mean, with respect to the Company, any person or
entity directly or indirectly controlling, controlled by, or under common
control with, the Company, and/or any other person or entity designated by the
Board of Directors of the Company in which the Company or an Affiliate has an
interest.
"BUYOUT NOTICE" shall have the meaning ascribed to such term in
Section 5.
"CAPITAL STOCK" shall mean capital stock, share capital and/or other
equity participations of the Company, including, without limitation, partnership
interests, and/or conversion privileges, warrants, options and/or other rights
to acquire such capital stock, share capital and/or other equity participations.
"CAUSE" shall mean, except if such term or a similar term is defined
in an employment agreement between the Company and the Manager, in which case
such employment agreement definition shall apply in lieu of this definition, (a)
the commission of an act of fraud or embezzlement (including the unauthorized
disclosure of confidential or proprietary information of the Company or any of
its subsidiaries which results in financial loss to the Company or any of its
Affiliates), (b) the conviction of a felony, (c) willful misconduct as an
employee of the Company or any of its Affiliates which is reasonably likely to
result in material injury or financial loss to the Company or any of its
Affiliates or (d) the willful failure to render services to the Company or any
of its Affiliates in accordance with the Manager's employment which failure
amounts to a material neglect of duties to the Company or any of its Affiliates
that is not corrected by the Manager, to the satisfaction of the Company, in its
sole discretion, within 30 days after the Company provides the manager with
written notice of its intention to terminate the Manager's employment for Cause
by virtue of this clause (d). Any voluntary termination of employment by the
Manager (i) within 40 days after having received the written notice provided in
clause (d) above or (ii) after the Company first has reason to believe that the
Manager has committed a felony and before any final judicial determination
regarding such felony shall be deemed to be a termination of the Manager's
employment by the Company for Cause.
3
"COMMON STOCK" shall have the meaning ascribed to such term in the
Recitals of this Agreement.
"COMMON STOCK EQUIVALENTS" means any security or obligation which is
by its terms convertible into shares of Common Stock and any option, warrant or
other subscription or purchase right with respect to Common Stock.
"COMPANY" shall have the meaning ascribed to such term in the
introductory paragraph of this Agreement.
"CUSTODY AGREEMENT AND POWER OF ATTORNEY" shall have the meaning
ascribed to such term in Section 9.
"DEFAULT" shall mean an event of default or an event that, with notice
or lapse of time or both, would become an event of default under any
indebtedness for borrowed money of the Company or any of its subsidiaries.
"EXCHANGE ACT" shall have the meaning ascribed to such term in Section
8 (b).
"EXISTING STOCKHOLDERS" shall have the meaning ascribed to such term
in the Recitals of this Agreement.
"FULLY DILUTED" or "FULLY DILUTED BASIS" shall mean, at any date as of
which the number of shares of Common Stock is to be determined, such number of
shares determined on a basis that includes all shares of Common Stock
outstanding at such date and the maximum shares of Common Stock issuable in
respect of Common Stock Equivalents (giving effect to the then current
respective conversion prices) and other rights to purchase (directly or
indirectly) shares of Common Stock or Common Stock Equivalents, outstanding on
such date, whether or not such rights to convert, exchange or exercise
thereunder are presently exercisable.
"GRANT DATE" shall mean the date that Options were granted to the
Manager or, if earlier, the date the Manager's employment with the Company or
any of its Affiliates began, but in no event earlier than January 1, 1995.
"HNK" shall have the meaning ascribed to such term in the introductory
paragraph of this Agreement.
"KMC" shall have the meaning ascribed to such term in the Recitals of
this Agreement.
4
"MANAGEMENT GROUP" shall mean the Manager and the Other Managers.
"MANAGER" shall have the meaning ascribed to such term in the
introductory paragraph of this Agreement.
"MANAGER AGREEMENTS" shall mean this Agreement and the other Manager
Agreements.
"MANAGER'S ESTATE" shall have the meaning ascribed to such term in
Section 2.
"NAS" shall have the meaning ascribed to such term in the introductory
paragraph of this Agreement.
"NASSAU" shall have the meaning ascribed to such term in the
introductory paragraph of this Agreement.
"NASSAU CAPITAL" shall have the meaning ascribed to such term in the
introductory paragraph of this Agreement.
"NONCOMPETE EXTENSION PERIOD" shall have the meaning ascribed to such
term in Section 23.
"NONCOMPETE PERIOD" shall have the meaning ascribed to such term in
Section 23.
"OPTION PLAN" shall have the meaning ascribed to such term in the
Recitals of this Agreement.
"OPTIONS" shall have the meaning ascribed to such term in the Recitals
of this Agreement.
"OTHER MANAGER AGREEMENTS" shall have the meaning ascribed to such
term in the Recitals of this Agreement.
"OTHER MANAGERS" shall have the meaning ascribed to such term in the
Recitals of this Agreement.
"PREDECESSOR OPTIONS" shall have the meaning ascribed to such term in
the Recitals of this Agreement.
"PREDECESSOR PLAN" shall have the meaning ascribed to such term in the
Recitals of this Agreement.
"PRIME RATE" shall mean the prime rate of interest as indicated, from
time to time, in the Money Tables section of THE WALL STREET JOURNAL.
"PRINCIPAL BUSINESS ACTIVITIES" shall have the meaning ascribed to
such term in Section 23.
5
"PRINCIPAL HOLDERS" shall mean, collectively, Nassau and HNK (to the
extent participating in a transaction described in Section 4).
"PUBLIC OFFERING" shall mean an offer for sale of Common Stock
pursuant to an effective registration statement filed under the Act.
"QUALIFIED PUBLIC OFFERING" shall mean the first offer for sale of
Common Stock, in any single transaction or series of related transactions,
pursuant to an effective registration statement filed by the Company under the
1933 Act in which the Company receives aggregate gross proceeds (before
deduction of underwriting discounts and expenses of sale) of at least
$40,000,000, provided that, the price per share at which such shares are sold in
the offering (before deduction of underwriting discounts and expenses of sale)
is at least four (4) times the Conversion Price of the Company's Series A
Convertible Preferred Stock which would then be in effect if determined pursuant
to the terms of the Series A Convertible Preferred Stock in effect as of October
31, 1997, whether or not any shares of such stock are then outstanding (it being
acknowledged that, as of May 31., 1998, such Conversion Price was $20.63 per
share).
"REGISTRABLE MANAGEMENT SECURITIES" shall mean (i) Common Stock
comprising any portion of the Stock; (ii) any Common Stock owned by the Other
Managers; and (iii) any shares of Capital Stock of the Company issued or
issuable with respect to the Common Stock referred to in clauses (i) and (ii) by
way of a stock dividend or stock split or in connection with a combination of
shares, recapitalization, merger, consolidation or other reorganization. As to
any particular Registrable Management Securities, once issued such securities
shall cease to be Registrable Management Securities when (i) such securities
shall have been registered under the Act and the registration statement with
respect to the sale of such securities shall have become effective under the Act
and such securities sold thereunder or such securities shall have been sold
under circumstances in which all applicable conditions of Rule 144 (or any
similar provision then in force) under the Act are met or may be sold pursuant
to Rule 144(k), (ii) such securities shall have been otherwise transferred, new
certificates for them not bearing a legend restricting further transfer shall
have been delivered by the Company and subsequent disposition of such securities
shall not require registration or qualification of such securities under the Act
or state securities or blue sky laws then in force in a preponderance of states
or (iii) such securities shall cease to be outstanding.
"RETIREMENT" shall mean the voluntary termination of employment by the
Manager after the later of (i) having been employed by the Company for a period
of 5 years following the Grant Date or by an Affiliate for a period of 5 years
from the later of (a) January 1, 1995 or (b) the date the Manager first rendered
service to the Affiliate and (ii) the date on which the sum of (a) the Manager's
years of service (calculated as in (i) above) and (b) the Manager's age, equals
or exceeds 65, unless the Compensation Committee of the Board of Directors of
the Company shall have provided, prior to the Grant Date or thereafter, that
some other lesser age, period of service, combination thereof or other terms or
conditions shall constitute "Retirement".
6
"SEC" shall have the meaning ascribed to such term in Section 8(b).
"RULE 144" shall have the meaning ascribed to such term in Section
2(c).
"SERIES A CONVERTIBLE PREFERRED STOCK" shall mean the Company's Series
A Cumulative Convertible Preferred Stock, par value $.01 per share.
"STOCK" shall mean all Capital Stock now owned or hereafter
acquired by the Manager pursuant to any Option.
"STOCKHOLDERS AGREEMENT" shall have the meaning ascribed to such term
in the Recitals of this Agreement.
"SUBJECT MATTER" shall have the meaning ascribed to such term in
Section 23.
"TAG-ALONG NOTICE" shall have the meaning ascribed to such term in
Section 4.
"TAG-ALONG PURCHASER" shall have the meaning ascribed to such term in
Section 4.
"TAG-ALONG SHARES" shall have the meaning ascribed to such term in
Section 4.
"THIRD PARTY PURCHASER" shall have the meaning ascribed to such term
in Section 5.
2. MANAGER'S REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
(a) Unless the shares of Common Stock to be acquired upon the exercise
of the Options are then registered under the Act (as hereinafter defined): the
manager hereby represents and warrants that the Manager will be acquiring, at
the time of exercise (or other acquisition), the Common Stock issuable upon
exercise of the Options (and any other Stock acquired from time .to time by the
Manager) for investment for the Manager's own account and not with a view to, or
for resale in connection with, the distribution or other disposition thereof.
The Manager agrees and acknowledges that the Manager will not, directly or
indirectly, offer, transfer, sell, assign, pledge, hypothecate or otherwise
dispose of any shares of the Stock unless such transfer, sale, assignment,
pledge, hypothecation or other disposition complies with this Agreement and all
applicable provisions of state securities laws and (i) the transfer, sale,
assignment, pledge, hypothecation or other disposition is pursuant to an
effective registration statement under the Securities Act of 1933, as amended,
and the rules and regulations in effect thereunder (the "Act") or (ii) (A)
counsel for the manager (which may be the Company's counsel) shall have
furnished the Company with an opinion, reasonably satisfactory in form and
substance to the Company, that no such registration is required because of the
availability of an exemption from registration under the Act and (B) if the
Manager is a citizen or resident of any country other than the United States, or
the Manager desires to effect any such transaction in any such country, counsel
for the Manager (which may be the Company's counsel) shall have furnished the
7
Company with an opinion, reasonably satisfactory in form and substance to the
Company, that such transaction will not violate the laws of such country.
Notwithstanding the foregoing, the Company acknowledges and agrees that any of
the following transfers are deemed to be in compliance with the Act and this
Agreement and no opinion of counsel is required in connection therewith: (x) a
transfer made pursuant to Section 4, 5 or 6 hereof; (y) a transfer upon the
death of the Manager to the Manager's executors, administrators, testamentary
trustees, legatees or beneficiaries (the "Manager's Estate") or a transfer to
the executors, administrators, testamentary trustees, legatees or beneficiaries
of a person who has become a holder of Stock in accordance with the terms of
this Agreement, provided that prior to any such transfer the transferee agrees
in a writing reasonably satisfactory to the Company to be bound by the
provisions of this Agreement to the same extent as if such transferee were the
Manager; and (z) a transfer made in compliance with the federal securities laws
to a trust or custodianship the beneficiaries of which may include only the
Manager, the Manager's spouse and/or the Manager's lineal descendants (a
"Manager's Trust").
(b) The certificate (or certificates) representing the Stock shall
bear the following legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE
TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR
OTHERWISE DISPOSED OF UNLESS SUCH TRANSFER, SALE, ASSIGNMENT,
PLEDGE, HYPOTHECATION OR OTHER DISPOSITION COMPLIES WITH THE
PROVISIONS OF THE MANAGER STOCKHOLDER'S AGREEMENT DATED AS OF
_____________ ____, 199__ BETWEEN KMC TELECOM HOLDINGS, INC.
("THE COMPANY") AND __________________________ (A COPY OF
WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY). EXCEPT AS
OTHERWISE PROVIDED IN SUCH AGREEMENT, NO TRANSFER, SALE,
ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION OF THE
SHARES REPRESENTED BY THIS CERTIFICATE MAY BE MADE EXCEPT IN
COMPLIANCE WITH ALL APPLICABLE PROVISIONS OF STATE SECURITIES
LAWS AND (A) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND THE RULES
AND REGULATIONS IN EFFECT THEREUNDER (THE "ACT") OR (B) IF (I)
THE COMPANY HAS BEEN FURNISHED WITH A SATISFACTORY OPINION OF
COUNSEL FOR THE HOLDER ACCEPTABLE TO THE COMPANY THAT SUCH
TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER
DISPOSITION IS EXEMPT FROM THE PROVISIONS OF SECTION 5 OF THE
ACT AND (II) IF THE HOLDER IS A CITIZEN OR RESIDENT OF ANY
COUNTRY OTHER THAN THE UNITED STATES, OR THE HOLDER DESIRES TO
EFFECT ANY SUCH TRANSACTION IN ANY SUCH COUNTRY, THE COMPANY
HAS BEEN FURNISHED WITH A SATISFACTORY OPINION OF COUNSEL FOR
THE HOLDER ACCEPTABLE TO THE COMPANY THAT SUCH TRANSACTION
WILL NOT VIOLATE THE LAWS OF SUCH COUNTRY."
8
(c) Unless the Stock is then registered under the Act, the Manager
acknowledges that the Manager has been advised that (i) the Stock has not been
registered under the Act, (ii) the Stock must be held indefinitely and the
Manager must continue to bear the economic risk of the investment in the Stock
unless the Stock is subsequently registered under the Act or an exemption from
such registration is available and the Stock is disposed of in accordance with
this Agreement, (iii) it is not anticipated that there will be any public market
for the Stock, (iv) Rule 144 promulgated under the Act ("Rule 144") is not
currently available with respect to the sales of any securities of the Company,
and the Company has made no covenant to make such Rule available, (v) when and
if shares of the Stock may be disposed of without registration in reliance on
Rule 144, such disposition can be made only in limited amounts in accordance
with the terms and conditions of such Rule, (vi) if the Rule 144 exemption is
not available, public sale without registration will require compliance with
Regulation A or some other exemption under the Act, (vii) a restrictive legend
in the form heretofore set forth shall be placed on the certificates
representing the Stock and (viii) a notation shall be made in the appropriate
records of the Company indicating that the Stock is subject to restriction on
transfer and, if the Company should at some time in the future engage the
services of a stock transfer agent, appropriate stop transfer restrictions will
be issued to such transfer agent with respect to the Stock.
(d) If any shares of the Stock are to be disposed of in accordance
with an exemption from registration under the Act (other than pursuant to Rule
144), the Manager shall promptly notify the Company of such intended disposition
and shall deliver to the company at or prior to the time of such disposition
such documentation as the Company may reasonably request in connection with such
sale and, in the case of a disposition pursuant to Rule 144, shall deliver to
the Company an executed copy of any notice on Form 144 required to be filed with
the Securities and Exchange Commission.
(e) The Manager agrees that, if any shares of Capital Stock are
offered to the public pursuant to an effective registration statement under the
Act, the Manager will not effect any public sale or distribution of any shares
of Stock not covered by such registration statement during any period (i)
required by the managing underwriter and (ii) agreed to by the Existing
Stockholders with respect to their shares of Capital Stock.
(f) The Manager represents and warrants that the Manager has received
and reviewed a copy of the Company's Prospectus dated July 13, 1998; the Manager
further represents and warrants that the Manager has been given the opportunity
to obtain any information or documents and to ask questions and receive answers
about such documents, the Company and the business and prospects of the Company
which the Manager deems necessary to evaluate the merits and risks related to
the Manager's investment in the Stock and to verify the information received as
indicated in this Section 2(f), and the Manager has relied solely on such
information.
9
(g) The Manager further represents and warrants that (i) the Manager's
financial condition is such that the Manager can afford to bear the economic
risk of holding the Stock for an indefinite period of time and has adequate
means for providing for the Manager's current needs and personal contingencies,
(ii) the Manager can afford to suffer a complete loss of the Manager's
investment in the Stock, (iii) all information which the manager has provided to
the Company concerning the Manager and the Manager's financial position is
correct and complete as of the date of this Agreement, (iv) the Manager
understands and has taken cognizance of all risk factors related to the purchase
of the Stock, and (v) the Manager's knowledge and experience in financial and
business matters are such that the Manager is capable of evaluating the merits
and risks of the Manager's purchase of the Stock as contemplated by this
Agreement.
3. RESTRICTION ON TRANSFER.
The Manager agrees that sell, assign, pledge, hypothecate options. The
Manager agrees that sell, assign, pledge, hypothecate shares of Stock at any
time prior the Manager will not transfer, or otherwise dispose of any the
Manager will not transfer, or otherwise dispose of any to registration of the
sale of such shares of Stock, except for: (a) transfers permitted by clauses (x)
, (y) and (z) of Section 2 (a); (b) a sale of shares of Capital Stock pursuant
to an effective registration statement under the Act filed by the Company; and
(c) a sale of shares of Stock pursuant to Rule 144 (if then available) following
the lapse of the Company's right to purchase such shares of Stock under the
circumstances referred to in Section 6. No transfer of any such shares in
violation hereof shall be made or recorded on the books of the Company and any
such transfer shall be void and of no effect.
4. TAG-ALONG RIGHT.
(a) If the Principal Holders intend to transfer (in a transaction in
which each of the Principal Holders that then owns Capital Stock is
participating) to any third party (the "TAG-ALONG PURCHASER") , in one
transaction or a series of related transactions (excluding securities offerings
registered under the Act) , shares of Capital Stock constituting, in the
aggregate, more than 20% of the total number of shares of Common Stock then
outstanding on a Fully Diluted Basis (in the first instance of such a transfer)
, then the Principal Holders shall permit each member of the Management Group,
at such member's option, to transfer, for the same consideration, and on the
same terms and conditions, if any, upon which the Principal Holders intend to
transfer such shares, a number of shares of Common Stock (including shares
subject to then exercisable Options and Options that will become exercisable as
a result of such transaction or series of transactions) then owned by such
member of the Management Group determined in accordance with this Section 4(a)
(the "INITIAL TAG-ALONG SHARES") . Each member of the Management Group shall
have the right, pursuant to this Section 4(a), to sell pursuant to the offer by
the Tag-Along Purchaser, a percentage of the shares of Common Stock (including
shares subject to then exercisable options) held by such member equal to the
Applicable Percentage.
10
(b) For purposes hereof, the "APPLICABLE PERCENTAGE" shall be
determined as follows:
(i) if such transaction or series of related transactions
constitutes the first instance in which the rights under Section 4(a)
apply, the Applicable Percentage shall be equal to the percentage of
the holdings of Capital Stock (on a Fully Diluted Basis) being
transferred in such transaction or series of related transactions by
the Principal Holder transferring the smaller percentage of its
aggregate holdings of Capital Stock (the "APPLICABLE HOLDER");
provided that the Applicable Percentage shall be zero if the number of
shares proposed to be transferred in such transaction or series of
related transactions by the Principal Holders in the aggregate (when
combined with all prior transactions or series of transactions of a
type to which Section 4(a) applies) is not greater than 20% of the
total number of shares of Common Stock outstanding on a Fully Diluted
Basis;
(ii) if such transaction or series of related transactions does
not constitute the first instance in which the rights under Section
4(a) apply, the Applicable Percentage shall be equal to the percentage
of the holdings of Capital Stock (on a Fully Diluted Basis) being
transferred in such transaction or series of related transactions by
the Applicable Holder; provided that the Applicable Percentage shall
be zero if the percentage of the moldings of Capital Stock (on a Fully
Diluted Basis) being transferred in such transaction or series of
related transactions by the Applicable Holder is not greater than five
percent.
(c) Not less than 15 Business Days prior to any proposed transfer
pursuant to this Section 4, the Principal Holders shall deliver to each member
of the Management Group written notice thereof (the "TAG-ALONG NOTICE") , which
notice shall set forth the consideration to be paid by the Tag-Along Purchaser
and the other terms and conditions, if any, of such transaction. If any member
of the Management Group elects to transfer some or all of the Tag-Along Shares
pursuant to this Section 4, then such member shall so notify the Principal
Holders within 10 Business Days after the date of the Tag-Along Notice, and, at
the Principal Holders' request not less than two Business Days prior to the
proposed transfer, such member of the Management Group shall deliver to counsel
to the Principal Holders, to be held in escrow, certificates representing such
Tag-Along Shares (and/or other appropriate documentation to permit the exercise
of Options), duly endorsed or with duly completed and executed stock powers
attached, in proper form for transfer, together with a limited power-of-attorney
authorizing the Principal Holders to transfer the Tag-Along Shares to the
Tag-Along Purchaser (in accordance with the terms and conditions set forth in
the Tag Along Notice) and to execute all other documents required to be executed
in connection with such transaction.
(d) If, within 90 Business Days after delivery by a member of the
Management Group to the Principal Holders of the certificates and related
documents described in paragraph (c) , no transfer of shares held by the
Principal Holders and Tag-Along Shares in accordance with the provisions of this
Section 4 shall have been completed, or if earlier the Principal Holders shall
determine not to proceed with such transfer, then the Principal Holders' counsel
shall promptly return to the members of the Management Group, in proper form,
all certificates representing the Tag-Along Shares and the limited
power-of-attorney previously delivered by the members of the Management Group to
the Principal Holders.
11
(e) Concurrently with the consummation of the transfer of the
Tag-Along Shares pursuant to this Section 4, the Principal Holders shall remit
or cause to be remitted to each member of the Management Group the consideration
with respect to the Tag-Along Shares so transferred and shall furnish such other
evidence of the completion of such transfer and the terms and conditions (if
any) thereof as may reasonably be requested by such member of the Management
Group.
(f) The provisions of this Section 4 shall remain in effect,
notwithstanding any return to any member of the Management Group of Tag-Along
Shares as provided herein.
5. BRING ALONG RIGHT.
If the Company or one or more of the Existing Stockholders receives a
bona fide offer from a person or persons not then an Affiliate or Affiliates (a
"Third Party Purchaser") to purchase Capital Stock representing more than 50% of
the total number of shares of Common Stock then outstanding on a Fully Diluted
Basis, then the Company shall have the right to deliver a written notice (a
"Buyout Notice") to the Manager which shall state (i) that the Company or such
Existing Stockholders propose to effect such transaction, (ii) the proposed
purchase price per share of Capital Stock to be paid by the Third Party
Purchaser, and (iii) the name or names of the Third Party Purchaser, and which
attaches a copy of all writings between the Company or such Existing
Stockholders and the other parties to such transaction necessary to establish
the terms of such transaction. The manager agrees that, upon receipt of a Buyout
Notice, the Manager shall be obligated to sell a percentage of the Manager's
shares of Stock equal to the Bring Along Percentage (as defined below) upon the
terms and conditions of such transaction (and otherwise take all necessary
action to cause consummation of the proposed transaction); PROVIDED, HOWEVER,
that the Manager shall only be obligated as provided above in this Section 5 if
(i) more than 50% of the total number of shares of Common Stock then outstanding
on a Fully Diluted Basis actually is sold to the Third Party Purchaser pursuant
to the terms contained in the Buyout Notice, (ii) the manager receives the same
per share (or per share equivalent) consideration as such Existing Stockholders
receive in the transaction and (iii) the consideration received by the Manager
is in the form of cash or a combination of cash and securities that will become
freely tradable in the public securities markets within 180 days of receipt of
such consideration by the Manager. The Bring Along Percentage shall be the
percentage of the total number of shares of Common Stock outstanding on a Fully
Diluted Basis that is actually sold to the Third Party Purchaser pursuant to the
terms contained in the Buyout Notice; provided that if, after giving effect to
such sale, the Existing Stockholders would own not more than twenty percent of
the fully-diluted common equity interests in the Company, the Bring Along
Percentage shall be one hundred percent.
6. THE COMPANY'S OPTION TO REPURCHASE CAPITAL STOCK AND OPTIONS OF
MANAGER.
If the Manager's active employment with the Company and its affiliates
is terminated for any reason whatsoever, the Company shall have the right to
purchase shares of Stock then held by the Manager, the manager's Estate or a
Manager's Trust, and make provision with respect to the termination or
cancellation of all Options and payments in respect thereof, all as provided in
accordance with the terms of the Option Plan and any option agreements executed
and delivered thereunder.
7. CANCELLATION OF PREDECESSOR OPTIONS.
In further consideration of the transactions contemplated hereby
(including, without limitation, the grant of the options) the Manager hereby
agrees that all of the Manager's Predecessor options (together with any right,
title or interest of the Manager in or to any other grant or award under the
Predecessor Plan) shall be automatically cancelled and of no further force or
effect, without further action by any party hereto, at such time as the Option
Plan, the initial grant of options to the Manager and this Agreement are duly
approved by the affirmative vote of holders of Capital Stock then entitled to
cast a majority of the votes entitled to be cast by all holders of Capital Stock
then outstanding.
12
8. THE COMPANY'S REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
(a) The Company represents and warrants to the Manager that this
Agreement has been duly authorized, executed and delivered by the Company.
(b) After the Company consummates an initial Public offering, (i) the
Company shall diligently use reasonable efforts to register the options and the
Common Stock to be acquired on exercise thereof on a Form S-8 Registration
Statement or any successor to Form S-8 to the extent that such registration is
then available with respect to such Options and Common Stock and (ii) the
Company will file the reports required to be filed by it under the Act and the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the rules
and regulations adopted by the securities and Exchange Commission ("SEC")
thereunder, to the extent required from time to time to enable the Manager to
sell shares of Common Stock without registration under the Act within the
limitations of the exemptions provided by (A) Rule 144 under the Act, as such
Rule may be amended from time to time, or (B) any similar rule or regulation
hereafter adopted by the SEC. Notwithstanding anything contained in this Section
9(b), the Company may deregister under Section 12 of the Exchange Act if it is
then permitted to do so pursuant to the Exchange Act and the rules and
regulations thereunder. Nothing in this Section 8(b) shall be deemed to limit in
any manner the restrictions on sales of Stock contained in this Agreement.
9. "PIGGYBACK" REGISTRATION RIGHTS.
(a) Whenever the Company proposes to register any of its equity
securities (including, without limitation, the Common Stock) under the Act
(other than pursuant to a registration statement on Form S-8 or S-4 or any
successor forms), and the form used may be used for the registration of
Registrable Management Securities (a "Piggyback Registration"), the Company will
give prompt written notice to all members of the Management Group holding
Registrable Management Securities of its intent to effect such registration and
(subject to the further provisions of this Section 9) will include in such
registration all Registrable Management Securities with respect to which the
Company has received requests for inclusion therein within 20 days after receipt
of the Company's notice.
(b) The Registration Expenses (as defined in the Stockholders
Agreement) of the holders of Registrable Management Securities will be paid by
the Company in all Piggyback Registrations.
(c) If a Piggyback Registration is an underwritten primary
registration on behalf of the Company, the Company will include in such
registration all Registrable Management Securities requested to be included in
such registration; provided, that if the managing underwriters advise the
Company in writing that in their opinion the number of securities requested to
be included in such registration exceeds the number which can be sold in such
offering without adversely affecting the marketability of the offering, the
Company will include in such registration, in the following order of priority,
(i) first, the securities the Company proposes to sell, (ii) second, to the
extent so required by the provisions of the Stockholders Agreement, the
registrable securities requested to be included in such registration by the
Existing Stockholders, (iii) third, to the extent so required by the provisions
of the Registration Rights Agreement, the registrable securities requested to be
included in such registration by the Warrant Holders, (iv) fourth, if such
Public Offering is the initial Public offering, such additional registrable
securities requested to be included in such registration by any Existing
Stockholder as may be required (in the reasonable estimation of the managing
underwriters) to assure that the net proceeds of sale of such registrable
securities (when added to the net proceeds of sale of registrable securities
subject to the priority set forth in clause (ii) above) are equal to the
aggregate purchase price paid for all Capital Stock then owned by such Existing
Stockholder, (v) fifth, the Registrable Management Securities requested to be
included in such registration, the registrable securities requested to be
included in such registration by the Existing Stockholders (to the extent not
then subject to the priority set forth in clause (ii) or clause (iv) above) and
the registrable securities requested to be included in such registration by the
Warrant Holders (to the extent not then subject to the priority set forth in
clause (iii) or clause (iv) above, pro rata among the holders of such securities
on the basis of the number thereof owned by each holder and requested to be
included therein and (vi) sixth, other securities, if any, requested to be
included in such registration.
13
(d) If a Piggyback Registration is an underwritten secondary
registration on behalf of the Company, the Company will include in such
registration all Registrable Management Securities requested to be included in
such registration; provided, that if the managing underwriters advise the
Company in writing that in their opinion the number of securities requested to
be included in such registration exceeds the number which can be sold in such
offering without adversely affecting the marketability of the offering, the
Company will include in such registration, in the following order of priority,
(i) first, to the extent so required by the provisions of the Stockholders
Agreement, the registrable securities requested to be included in such
registration by the Existing Stockholders, (ii) second, to the extent so
required by the provisions of the Registration Rights Agreement, the registrable
securities requested to be included in such registration by the Warrant Holders,
(iii) third, if such Public Offering is the initial Public offering, such
additional registrable securities requested to be included in such registration
by any Existing Stockholder as may be required (in the reasonable estimation of
the managing underwriters) to assure that the net proceeds of sale of such
registrable securities (when added to the net proceeds of sale of registrable
securities subject to the priority set forth in clause (i) above) are equal to
the aggregate purchase price paid for all Capital Stock then owned by such
Existing Stockholder, (iv) fourth, the Registrable Management Securities
requested to be included in such registration, the registrable securities
requested to be included in such registration by the Existing Stockholders (to
the extent not then subject to the priority set forth in clause (i) or clause
(iii) above) and the registrable securities requested to be included in such
registration by the Warrant Holders (to the extent not then subject to the
priority set forth in clause (ii) or clause (iii) above, pro rata among the
holders of such securities on the basis of the number thereof owned by each
holder and requested to be included therein and (v) fifth, other securities, if
any, requested to be included in such registration.
(e) If any Piggyback Registration is an underwritten offering, the
investment banker(s), underwriters) and manager(s) for the offering or
distribution will be selected by the Company.
(f) The Manager hereby agrees to be, and any Manager's Trust or
Manager's Estate shall be, bound by all of the obligations applicable to
Existing Stockholders under Section 6 of the Stockholders Agreement.
(g) In connection with the exercise of the Manager's rights under this
Section 9, the Manager will, if requested by the Company, execute and deliver a
reasonable custody agreement and power of attorney with respect to the shares of
Stock to be registered pursuant to this Section 9 a "Custody Agreement and Power
of Attorney"). The Custody Agreement and Power of Attorney will provide, among
other things, that the Manager will deliver to and deposit in custody with the
custodian and attorney-in-fact named therein a certificate or certificates
representing such shares of Stock (duly endorsed in blank by the registered
owner or owners thereof or accompanied by duly executed stock powers in blank)
and irrevocably appoint said custodian and attorney-in-fact as the Manager's
agent and attorney-in-fact to act under the Custody Agreement and Power of
Attorney on the manager's behalf with respect to the matters specified therein.
(h) The Manager agrees that he will execute such other agreements as
the Company may reasonably request to further evidence and implement the
provisions of this Section 9.
14
10. RIGHTS TO NEGOTIATE REPURCHASE PRICE.
Nothing in this Agreement shall be deemed to restrict or prohibit the
Company from purchasing shares of Capital Stock or stock options from the
Manager, at any time, upon such terms and conditions, and for such price, as may
be mutually agreed upon between the parties hereto, whether or not at the time
of such purchase circumstances exist which specifically grant the Company the
right to purchase shares of Stock or the Company has the right to pay the Option
Excess Price under the terms of this Agreement.
11. BROKER LOAN PROGRAM.
Following the initial Public Offering of Common Stock, the Company
will use reasonable efforts to assist in the establishment of a customary broker
loan program for the purpose of facilitating the exercise of Options.
12. NOTICE OF CHANGE OF BENEFICIARY.
Immediately prior to any transfer of Stock to a manager's Trust, the
Manager shall provide the Company with a copy of the instruments creating the
Manager's Trust and with the identity of the beneficiaries of the Manager's
Trust. The Manager shall notify the Company immediately prior to any change in
the identity of any beneficiary of the Manager's Trust.
13. EXPIRATION OF CERTAIN PROVISIONS.
The provisions contained in Sections 4, 5 and 6 of this Agreement and
the portion of any other provision of this Agreement which incorporates the
provisions of Sections 4, 5 and 6, shall terminate and be of no further force or
effect with respect to any shares of Stock sold by the Manager, as permitted by
this Agreement, either pursuant to an effective registration statement filed by
the Company pursuant to Section 9 hereof or in accordance with all applicable
requirements of Rule 144.
The provisions contained in Sections 2(e), 3, 4, 5 and 6 of this
Agreement, and the portion of any other provisions of this Agreement which
incorporate the provisions of such Sections, shall terminate and be of no
further force or effect upon the consummation of a Qualified Public Offering.
14. RECAPITALIZATIONS, ETC.
The provisions of this Agreement shall apply, to the full extent set
forth herein with respect to the Stock or the options, or any capital stock,
partnership units or any other security evidencing ownership interests in any
successor or assignee of the Company (whether by merger, consolidation, sale of
assets or otherwise) which may be issued in respect of, in exchange for, or
substitution of Stock or options, by reason of any stock dividend, split,
reverse split, combination, recapitalization, liquidation, reclassification,
merger, consolidation or otherwise.
15. MANAGER'S EMPLOYMENT BY THE COMPANY.
Nothing contained in this Agreement or in any other agreement entered
into by the Company and the Manager, contemporaneously with the execution of
this Agreement (i) obligates the Company or any subsidiary or Affiliate of the
Company to employ the Manager in any capacity whatsoever or (ii) prohibits or
restricts the Company (or any such subsidiary or Affiliate) from terminating the
employment, if any, of the Manager at any time or for any reason whatsoever,
with or without cause, and the Manager hereby acknowledges and agrees that
neither the Company nor any other person has made any representations or
promises whatsoever to the Manager concerning the Manager's employment or
continued employment by the Company.
15
16. STATE SECURITIES LAWS.
The Company hereby agrees to use all reasonable efforts to comply with
all state securities or "blue sky" laws which might be applicable to the
issuance of the Options to the Manager.
17. BINDING EFFECT.
The provisions of this Agreement shall be binding upon and accrue to
the benefit of the parties hereto and their respective heirs, legal
representatives, successors and assigns. In the case of a transferee permitted
under Section 2(a) hereof, such transferee shall be deemed the Manager
hereunder; provided, however, that no transferee (including without limitation,
transferees referred to in Section 2(a) hereof) shall derive any rights under
this Agreement unless and until such transferee has delivered to the Company a
valid undertaking and becomes bound by the terms of this Agreement.
18. AMENDMENT.
This Agreement may be-amended only by a written instrument signed by
the parties hereto.
19. APPLICABLE LAW.
The laws of the State of New York applicable to contracts made and to
be performed therein shall govern the interpretation, validity and performance
of the terms of this Agreement. Any suit, action or proceeding against the
Manager, with respect to this Agreement, or any judgment entered by any court in
respect of any thereof, may be brought in an court of competent jurisdiction in
the State of New York, as the Company may elect in its sole discretion, and the
Manager hereby submits to the non-exclusive jurisdiction of such courts for the
purpose of any such suit, action, proceeding or judgment. By the execution and
delivery of this Agreement, the Manager appoints The Corporation Trust Company
(or such other qualified corporate agent as the Company may designate), at its
office in New York, New York as the Manager's agent upon which process may be
served in any such suit, action or proceeding. Service of process upon such
agent, together with notice of such service given to the Manager in the manner
provided in Section 22 hereof, shall be deemed in every respect effective
service of process upon him in any suit, action or proceeding. Nothing herein
shall in any way be deemed to limit the ability of the Company to serve any such
writs, process or summonses in any other manner permitted by applicable law or
to obtain jurisdiction over the Manager, in such other jurisdictions and in such
manner, as may be permitted by applicable law. The Manager hereby irrevocably
waives any objections which the Manager may now or hereafter have to the laying
of the venue of any suit, action or proceeding arising out of or relating to
this Agreement brought in any court of competent jurisdiction in the State of
New York, and hereby further irrevocably waives any claim that any such suit,
action or proceeding brought in any such court has been brought in any
inconvenient forum. No suit, action or proceeding against the Company with
respect to this Agreement may be brought in any court, domestic or foreign, or
before any similar domestic or foreign authority other than in a court of
competent jurisdiction in the State of New York, and the Manager hereby
irrevocably waives any right which the Manager may otherwise have had to bring
such an action in any other court, domestic or foreign, or before any similar
domestic or foreign authority. The Company hereby submits to the jurisdiction of
such courts for the purpose of any such suit, action or proceeding.
16
20. ASSIGNABILITY OF CERTAIN RIGHTS BY THE COMPANY.
The Company shall have the right to assign any or all of its rights or
obligations to purchase shares of Stock pursuant to the Option Plan and Section
6 hereof.
21. MISCELLANEOUS.
In this Agreement all references to "dollars" or $ are to United
States dollars. If any provision of this Agreement shall be declared illegal,
void or unenforceable by any court of competent jurisdiction, the other
provisions shall not be affected, but shall remain in full force and effect.
22. NOTICES.
All notices and other communications provided for herein shall be in
writing and shall be deemed to have been duly given if delivered by hand
(whether by overnight courier or otherwise) or sent by registered or certified
mail, return receipt requested, postage prepaid, to the Party to whom it is
directed:
(a) if to the Company or HNK:
KMC Telecom Holdings, Inc.
0000 Xxxxx 000
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attn: Chief Executive Officer
Telecopier No: (000) 000-0000
with a copy to:
Xxxxxx Xxxx & Xxxxxx
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx Xxxxxxx, Esq.
Telecopier No: (000) 000-0000/7899
(b) if to the Manager:
with a copy to:
Attn:
17
(c) if to Nassau:
Nassau Capital L.L.C.
00 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Attn: Xxxx X. Xxxxxxx
Telecopier No: (000) 000-0000
with a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxxx, Xx., Esq.
Telecopier No: (000) 000-0000
or at such other address as each party shall have specified by
notice in writing to the other.
23. COVENANT NOT TO COMPETE; CONFIDENTIAL INFORMATION.
(a) In consideration of the Company entering into this Agreement with
the Manager, the Manager hereby agrees, for so long as the Manager is employed
by the Company or one of its Affiliates and for a period of six (6) months after
the date of termination of the Manager's employment (the "Noncompete Period"),
that the Manager shall not (i) directly or indirectly, as an employee, agent,
manager, director, officer, stockholder, partner or otherwise, own, manage,
operate, control, be employed by, participate in or be connected in any manner
whatsoever with the ownership, management, operation or control of any business
in competition with the principal business activities in which the Company is
engaged, or has material plans to engage in, at the time of the termination of
the manager's employment, (ii) solicit from any company, or any division,
department or subsidiary of any company, or any individual employed by any of
the foregoing, any business relating to services similar to the services which
were performed by the Company relating to the Company's principal business
activities, its joint venturers or affiliates for such company during the
Manager's employment by the Company or its Affiliates or (iii) request or cause
any company to cancel or terminate any business relationship with the Company,
its joint venturers or affiliates, or directly or indirectly solicit or
otherwise cause any employee to terminate such employee's relationship with the
Company, its joint venturers or affiliates. At the Company's option, the
Noncompete Period may be extended for an additional three (3) month period (the
"Noncompete Extension Period") if within one month of the termination of the
Noncompete Period the Company gives the Manager notice of such extension and the
Company pays the Manager an amount equal to one-fourth the Manager's annual base
salary as of the date of termination of employment. Such amount shall be paid in
installments in a manner consistent with the then current salary payment
policies of the Company. At the Company's option, the Noncompete Extension
Period may be extended for an additional three (3) month period pursuant to the
provisions of the two preceding sentences. For purposes of this Section 23,
"principal business activities" of the Company shall mean those business
activities of the Company pursuant to which the Company has derived during the
preceding twelve month period, or reasonably expects to derive within twelve
months of the termination of the Manager's employment, ten percent (10%) or more
of its consolidated revenues.
18
(b) The manager shall promptly and fully disclose to the Company, and
with all Necessary detail for development, marketing; sale and installation, any
and all know-how, discoveries, inventions, improvements, ideas, writings,
formulae, processes and methods (whether copyrightable, patentable or otherwise)
made, received, conceived, acquired or written by the Manager (whether or not at
the request or upon the suggestion of the Company) during the term of the
Manager's employment, solely or jointly with others, in or relating to any
activities of the Company or an affiliate known to the Manager as a consequence
of the Manager's employment (collectively referred to herein as the "Subject
Matter").
(c) The Manager hereby assigns and transfers, and agrees to assign and
transfer, to the Company, all right, title and interest in and to the Subject
Matter, and the Manager further agrees' to execute, acknowledge and deliver all
such further papers, including applications for copyrights and patents, as may
be necessary to obtain copyrights or patents for any thereof in any and all
countries and to vest title thereto to the Company. The Manager shall assist the
Company in obtaining such copyrights or patents during the period of this
Agreement and any time thereafter and to testify in any prosecution or
litigation involving any of the Subject Matter.
(d) The Manager shall not, during the period of this Agreement, or at
any time thereafter, directly or indirectly, disclose or permit to be known, to
any person, f inn or cooperation, any trade-secrets or confidential information
acquired by him during the course of or as an incident to the employment
hereunder, relating to the Company, its officers or directors, any company which
the Manager has knowledge of or dealt with in the course of his employment by
the Company, or any joint venture or affiliate of the Company, or in which any
of the foregoing has a beneficial interest, including, but not limited to, the
business affairs of each of the foregoing. Such confidential information shall
include, but is not limited to, the Subject Matter as well as information
relating to agreements, research, methods, writings, manuals, developments,
marketing and any other document embodying such confidential information.
Confidential information shall not include any information that (i) is in the
public domain other than by reason of a breach hereof; or (ii) was in the
possession of the Manager at the time of the disclosure; or (iii) was obtained
by the Manager in good faith from a third party entitled to disclose it; or (iv)
was required to be disclosed by a court of competent jurisdiction or a
governmental authority with authority over the Company, in which case the
Manager shall use the Manager's best efforts, prior to such disclosure, to give
timely notice of such requirement to the Board of Directors of the Company which
shall have the right to object to such disclosure or seek confidential treatment
of the confidential information.
(e) All names of actual or potential clients which have been solicited
or are on any mailing lists, rolodex, files or directories in the possession or
under the control of the Manager (whether in written, electronic or other
formats), and all information and documents relating to the Company or its joint
venturers or affiliates, shall be the-exclusive property of the Company and the
Manager shall use the Manager's best efforts to prevent any publication or
disclosure thereof. Upon termination of the Manager's employment with the
Company, all names of actual or potential customers, documents, records,
reports, writings and other similar documents containing confidential
information, or trade-secrets including copies thereof, then in the Manager's
possession or control shall be promptly returned to the Company.
19
(f) Notwithstanding clauses (a) and (d) above, if at any time a court
holds that the restrictions stated in such clauses (a) and (d) are unreasonable
or otherwise unenforceable under circumstances then existing, the parties hereto
agree that the maximum period, scope or geographic area determined to be
reasonable under such circumstances by such court will be substituted for the
stated period, scope or area. The Manager and the Company recognize that the
services to be rendered by the Manager are of a special, unique, unusual,
extraordinary and intellectual character involving a high degree of skill and
having a peculiar value, the loss of which may cause the Company immediate and
irreparable harm which cannot be adequately compensated in damages. In the event
of a breach or threatened breach by the Manager of this Agreement, the Manager
consents that the Company shall be entitled to injunctive relief, both
preliminary and permanent, without bond, and the Manager will not raise the
defense that the Company has an adequate remedy at law. In addition, the Company
shall be entitled to any other legal or equitable remedies as may be available
under law. The remedies provided in this Agreement shall be deemed cumulative
and the exercise of one shall not preclude the exercise of any other remedy at
law or in equity for the same event or any other event.
20
IN WITNESS WHEREOF, the undersigned have executed, or caused to be
executed, this Agreement as of the date first above written.
KMC TELECOM HOLDINGS, INC.
By:___________________________________
Name:
Title:
______________________________________
Name:
NASSAU CAPITAL PARTNERS L.P.
By: Nassau Capital L.L.C., its
General Partner
By:______________________________
Name:
Title:
NAS PARTNERS I L.L.C.
By:__________________________________
Name:
Title:
XXXXXX X. XXXXXX
_____________________________________
