Exhibit 10.5


 


AMENDMENT NO. 1 TO


STOCK OPTION AGREEMENT


 


AMENDMENT
NO. 1 (this “Amendment”), effective as of March 4, 2008 by and between
AboveNet, Inc., a Delaware corporation having its principal offices at 360
Hamilton Avenue, White Plains, New York 
10601 (the “Company”), and Michael Doris (the “Optionee”).


 


WHEREAS, the Company and Optionee entered into a
Stock Option Agreement dated as of September 10, 2003 (the “Option
Agreement”);


 


WHEREAS, as of the date of this
Amendment, pursuant to the Option Agreement, the  Optionee’s option to purchase 16,500 Option
Shares (as defined in the Option Agreement) has previously vested;


 


WHEREAS, the Company and the Optionee
desire to amend the Option Agreement to provide for a cashless exercise of the
Option under certain circumstances;


 


NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto hereby amend the Option
Agreement as follows:


 


Section 5
of the Option Agreement is hereby amended by inserting a new subsection (c) immediately
following Section 5(b):


 


“(c) Upon termination of the Optionee’s employment
by the Company without Cause, and provided that the Optionee executes and
delivers the Separation of Employment and General Release Agreement annexed to
the Optionee’s Employment Agreement dated as of August 31, 2003 as
amended, the Optionee shall be entitled to the following:  The Company agrees to offer the Optionee the
right to exercise the Option through a “cashless exercise” (as described
below), provided that such offer shall only remain in effect until the earlier
of (i) three (3) years from the date of termination of the Optionee’s
employment by the Company without Cause and (ii) the date an effective
registration statement covering the sale and resale of the Common Stock
pursuant to the Option has been filed and become effective (the “Election
Period”), after which time the offer shall expire and may no longer be
elected.  If within the Election Period
the Optionee elects a cashless exercise of the Option in whole or in part, by
the delivery of a written notice of exercise by the Optionee to the Company at
its principal office stating the number of Option Shares as to which the Option
is being exercised, the Company shall (i) satisfy the Exercise Price by
reducing the number of Option Shares issued to the Optionee upon exercise by
the largest whole number of shares with a Fair Market Value that does not
exceed the aggregate Exercise Price and (ii) reduce the number of Option
Shares issued upon exercise of the Option in an amount sufficient to meet the
Company’s estimate of the Optionee’s actual federal and state tax triggered by
such exercise.  For such estimate, the
Company will utilize a 35% federal tax rate and a 7.35% state tax rate.  From the proceeds, the amount necessary to
cover the Optionee’s minimum withholding taxes will be remitted by the Company
directly to the federal and state tax authorities.  The difference between that amount and the
Company’s estimate of the Optionee’s actual tax will be remitted to the
Optionee.  Any election to cause the
Company to repurchase shares necessary to cover 


 

















 


applicable
taxes with shares of Common Stock to engage in a cashless exercise of the
Option shall be irrevocable once made. The Optionee understands that the Option
Shares are not currently registered under the 1933 Act and that the issuance to
the Optionee of any Option Shares can only be accomplished through an
applicable exemption.”


 


2.             Section 7 of the Option
Agreement is hereby amended by adding new subsection (c) immediately after
Section 7(b):


 


“(c)         The
Optionee agrees to provide the Company any reasonable certificate or
representation that may be necessary in order for the Company to determine that
any issuance of the Option Shares is exempt from registration under the 1933
Act.”


 


Except as expressly set
forth in this Amendment, the Option Agreement shall remain in full force and
effect and together with this Amendment shall constitute the entire agreement
between the Company and the Optionee with respect to the subject matter set
forth therein and herein and supersede all prior agreements between such
parties with respect to such subject matter. 
This Amendment may be executed in counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.


 


IN
WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date
first above written.


 


	
   

  	
  AboveNet, Inc.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Robert Sokota

  
	
   

  	
   

  	
  Name:
  

  	
  Robert
  Sokota

  
	
   

  	
   

  	
  Title:
  

  	
  SVP,
  General Counsel and Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Michael Doris

  
	
   

  	
   

  	
  Michael
  Doris