Document:

exv10w5

 

Exhibit 10.4

REGISTRATION RIGHTS AGREEMENT

               REGISTRATION RIGHTS AGREEMENT, dated as of June 23, 2004, between
Allegiance Telecom, Inc., (“Allegiance”), Allegiance Telecom Company Worldwide
(“Allegiance Worldwide”), Allegiance Telecom Liquidating Trust (the “Trust”, and
together with Allegiance and Allegiance Worldwide, the “Allegiance Parties”) and
XO Communications, Inc., a Delaware corporation (the “Company”).

RECITALS

               WHEREAS, the Trust will acquire shares of Common Stock, par value
$.01 per share, of the Company (the “Common Stock”) to be issued pursuant to
that certain Asset Purchase Agreement (the “Purchase Agreement”), dated as of
February 18, 2004, between the Company and Allegiance as debtor-in-possession
and Allegiance Worldwide as debtor-in-possession;

               WHEREAS, pursuant to their Joint Plan of Reorganization of,
confirmed by order of the Bankruptcy Court for the Southern District of New York
on June 23, 2004, Allegiance and Allegiance Worldwide will transfer the Common
Stock to the Trust established thereunder to hold, sell or distribute to their
pre-petition creditors in accordance with its terms; and

               WHEREAS, the Company has agreed, pursuant to the Stipulation and
Order, entered on June 23, 2004, to grant the Trust registration rights upon the

terms and subject to the conditions hereinafter set forth; and

               NOW, THEREFORE, in consideration of the foregoing premises and
for other good and valuable consideration, the parties hereby agree as follows:

          SECTION 1. DEFINITIONS. As used in this Agreement, the following terms
have the respective meanings set forth below:

               COMMISSION: shall mean the Securities and Exchange Commission or
any other federal agency at the time administering the Securities Act;

               EXCHANGE ACT: shall mean the Securities Exchange Act of 1934, as
amended;

               MARKET STAND-OFF PERIOD: has the meaning defined in Section 5(a).

               PERSON: shall mean an individual, partnership,joint-stock
company, corporation, trust or unincorporated organization, and a government or
agency or political subdivision thereof;

               REGISTER, REGISTERED and REGISTRATION: shall be deemed to refer
to registration effected by preparing and filing a registration statement in
compliance with the Securities Act (and any post-effective amendments filed or
required to be filed) and the declaration or ordering of effectiveness of such
registration statement;

 

 

               REGISTRABLE SECURITIES: shall mean (A) shares of Common Stock
issued pursuant to the Purchase Agreement held by the Trust and (B) any stock of
the Company issued as a dividend or other distribution with respect to, or in
exchange for or in replacement of, the shares of the Common Stock referred to in
clause (A) held by the Trust;

               REGISTRATION EXPENSES: shall mean all expenses incurred by the
Company in compliance with Section 2(a), (b) and (c) hereof, including, without
limitation, all registration and filing fees, printing expenses, fees and
disbursements of counsel for the Company (other than blue sky fees and
expenses), and the expense of any special audits incident to or required by any
such registration (but excluding the compensation of regular employees of the
Company, which shall be paid in any event by the Company);

               SECURITY, SECURITIES: shall have the meaning set forth in Section
2(1) of the Securities Act;

               SECURITIES ACT: shall mean the Securities Act of 1933, as
amended; and

               SELLING EXPENSES: shall mean all underwriting discounts and
selling commissions applicable to the sale of Registrable Securities and all
fees and disbursements of counsel for the Trust, blue sky fees and expenses,
including blue sky fees and expenses of counsel for the Company.

          SECTION 2. INVESTMENT REPRESENTATIONS.

               (A) PRIVATE PLACEMENT EXEMPTION. Each of the Allegiance Parties
understands that the Common Stock has not been registered under the Securities
Act, nor qualified under any state securities laws, and that it has been offered
and sold pursuant to an exemption from such registration and qualification based
in part upon the representations of each of the Allegiance Parties contained
herein.

               (b) KNOWLEDGE OF OFFER. Each of the Allegiance Parties is
familiar with the business and operations of the Company and has been given the
opportunity to obtain from the Company all information that it has requested
regarding its business plans and prospects.

               (c) KNOWLEDGE AND EXPERIENCE; Ability to Bear Economic Risks.
Each of the Allegiance Parties has such knowledge and experience in financial
and business matters that it is capable of evaluating the merits and risks of
its investment in the Company. Each of the Allegiance Parties is able to bear
the economic risk of its investment in the Company (including a complete loss of
its investment).

               (d) LIMITATIONS ON DISPOSITION. Each of the Allegiance Parties
understands that it must bear the economic risk of this investment indefinitely
unless its Common Stock is registered pursuant to the Securities Act or an
exemption from such registration is available, and unless the disposition of
such Common Stock is qualified under applicable state securities laws or an
exemption from such qualification is available. Each of the Allegiance Parties
further understands that there is no assurance that any exemption from the
Securities Act will be available, or, if available, that such exemption will
allow it to transfer any or all of the Common Stock, in the amounts, or at the
time such Allegiance Party might propose.

 

 

               (e) INVESTMENT PURPOSE. Each of the Allegiance Parties is
acquiring the Common Stock solely, for its own account for investment and not
with a view toward the resale, transfer, or distribution thereof, nor with any
present intention of distributing the Common Stock. No other Person has any
right with respect to the Stock received by any of the Allegiance Parties, nor
has any of the Allegiance Parties agreed to give any Person any such shares of
Common Stock or right in the future.

               (f) ACCREDITED INVESTOR. Each of the Allegiance Parties is an
“accredited investor” as such term is defined in Rule 501 (a) promulgated under
the Securities Act and was not formed for the sole and specific purpose of
making the investment contemplated by this Agreement.

               (g) CAPACITY. Each of the Allegiance Parties has the requisite
corporate power and authority to enter into this Agreement and to consummate the
transactions contemplated by this Agreement. The execution and delivery of this
Agreement by each of the Allegiance Parties and the consummation by each such
party of the transactions contemplated hereby have been duly authorized by all
necessary corporate action on the part of each such Allegiance Party. This
Agreement has been duly executed and delivered by each of the Allegiance Parties
and, assuming this Agreement constitutes the valid and binding obligation of the
Company, constitutes the valid and binding obligation of each of the Allegiance
Parties, enforceable against each such Allegiance Party in accordance with its
terms.

          SECTION 3. REGISTRATION RIGHTS.

               (a) FORM S-3 REGISTRATION. The Company represents and warrants
that it currently qualifies for registration on Form S-3 for secondary sales,
and covenants and agrees that, during the Shelf Period (as defined below), it
will continue to file all reports required by the Exchange Act necessary to
maintain such qualification. So long as the Company remains qualified for the
use of Form S-3 for secondary sales, the Company shall use its best efforts to
prepare, file and cause the effectiveness of a Registration Statement on Form
S-3 for all of the Registrable Securities (provided that the Trust shall have
informed the Company in writing of its intended method of disposition of the
Registrable Securities), and (provided that Rule 415, or any successor rule
under the Securities Act, at the time permits an offering on a continuous or
delayed basis, and provided further that applicable rules under the Securities
Act governing the obligation to file a post-effective amendment permit, in lieu
of filing a post-effective amendment which (y) includes any prospectus required
by Section 10(a) of the Securities Act or (z) reflects facts or events
representing a material or fundamental change in the information set forth in
the registration statement, the incorporation by reference of information
required to be included in (y) and (z) above to be contained in periodic reports
filed pursuant to Section 12 or 15(d) of the Exchange Act in the registration
statement) the Company will use its best efforts to maintain the effectiveness
of such registration for three years following the Closing under the Asset
Purchase Agreement, or until such time as all such Registrable Securities are
sold or are otherwise eligible for sale without registration (such period, the
“Shelf Period”); provided, however, that (A) such three year period shall be
extended for a period of time equal to the period during which the Trust
refrains from selling any securities included in such registration in accordance
with provisions in Section 3 and 5(a) and for any time necessary to make
corrections to the applicable prospectus pursuant to Section 6(b); provided that
the Company shall not be obligated to effect, or take any action to effect or

 

 

maintain the effectiveness of, any such registration pursuant to this Section
3(a):

               (i) during a Market Stand-Off Period; or

               (ii) In any jurisdiction in which the Company would be
required to execute a general consent to service of process in
effecting such registration, qualification or compliance, unless the
Company is already subject to service in such jurisdiction and except
as may be required by the Securities Act or applicable rules or
regulations thereunder.

               (b) S-1 REGISTRATION. In the event that the Company becomes
ineligible to use Form S-3 and cannot certify its reasonable, good faith
expectation that it will regain such eligibility within 90 days, upon request of
the Trust, the Company will as soon as practicable, use its best efforts to
effect a registration of sales of the Registrable Securities on another
appropriate form (including, without limitation, the execution of an undertaking
to file post-effective amendments, appropriate qualification under applicable
blue sky or other state securities laws and appropriate compliance with
applicable regulations issued under the Securities Act) as would permit or
facilitate the sale and distribution of all or such portion of such Registrable
Securities in such manner as the Trust shall specify to the Company in writing;
provided that the Company shall not be obligated to effect, or take any action
to effect, any such registration pursuant to this Section 3(b):

               (i) In any particular jurisdiction in which the Company would
be required to execute a general consent to service of process in
effecting such registration, qualification or compliance, unless the
Company is already subject to service in such jurisdiction and except
as may be required by the Securities Act or applicable rules or
regulations thereunder; or

               (ii) After the Company has effected three (3) such
registrations pursuant to this Section 3(b) and such registrations have
been declared or ordered effective and the sales of such Registrable
Securities shall have closed; or

               (iii) During a Market Stand-Off Period.

               (iv) The Company will use its best efforts to keep such
registration effective for a period of one hundred twenty (120) days or
until the Trust has completed the distribution described in the
registration statement relating thereto, whichever first occurs;
provided however, that such 120-day period shall be extended for a
period of time equal to the period during which the Trust refrains from
selling any securities included in such registration in accordance with
provisions in Section 3 and 5(a) and for any time necessary to make
corrections to the applicable prospectus pursuant to Section 6(b).
Notwithstanding the foregoing, if the Company’s ineligibility to use
Form S-3 for secondary offerings is the result of a breach of the first
sentence of Section 3(a), and (provided that Rule 415, or any successor
rule under the Securities Act, at the time permits an offering on a
continuous or delayed basis) the Company will use its best efforts to
maintain the effectiveness of such registration for three years
following the Closing under the Asset Purchase Agreement, or until such
time as all such Registrable Securities are sold or are otherwise

 

 

eligible for sale without registration (such period, the “Shelf
Period”); provided that the Company shall not be obligated to effect,
or take any action to effect or maintain the effectiveness of, any such
registration under the conditions set forth in Section 3(a)(i) and
(ii); provided, further, that (A) such three year period shall be
extended for a period of time equal to the period during which the
Trust refrains from selling any securities included in such
registration in accordance with provisions in Section 3 and 5(a) and
for any time necessary to make corrections to the applicable prospectus
pursuant to Section 6(b).

               (v) The registration statement filed pursuant to the request
of the Trust may, subject to the provisions of Section 3(b)(vii) below,
include other securities of the Company which are held by Persons (not
including the Company or any of its officers, directors or other
entities controlled by Mr. Carl Icahn) who, by virtue of agreements
with the Company, are entitled to include their securities in any such
registration (“Other Stockholders”).

               (vi) If Other Stockholders request such inclusion, the Trust
shall offer to include the securities of such Other Stockholders in the
underwriting and may condition such offer on their acceptance of the
further applicable provisions of this Section 3. The Trust and the
Company shall (together with all Other Stockholders proposing to
distribute their securities through such underwriting) enter into an
underwriting agreement in customary form with the representative of the
underwriter or underwriters selected for such underwriting by the Trust
and reasonably acceptable to the Company. Notwithstanding any other
provision of this Section 3(b), if the representative advises the Trust
in writing that marketing factors require a limitation on the number of
 shares to be underwritten, the number of shares included in the
registration by the Trust and each Other Stockholder shall be reduced
on a pro rata basis (based on the number of shares held by the Trust
and Other Stockholder), by such minimum number of shares as is
necessary to comply with such request. No Registrable Securities or any
other securities excluded from the underwriting by reason of the
underwriter’s marketing limitation shall be included in such
registration. If any Other Stockholder who has requested inclusion in
such registration as provided above disapproves of the terms of the
underwriting, such Person may elect to withdraw therefrom by written
notice to the Company, the underwriter and the Trust. The securities so
withdrawn shall also be withdrawn from registration. If the underwriter
has not limited the number of Registrable Securities or other
securities to be underwritten, the Company and officers and directors
of the Company may include its or their securities for its or their own
account in such registration if the representative so agrees and if the
number of Registrable Securities and other securities which would
otherwise have been included in such registration and underwriting will
not thereby be limited.

               (c) EXPENSES OF REGISTRATION. All Registration Expenses incurred
in connection with any registration, qualification or compliance pursuant to
this Section 3 shall be borne by the Company. All Selling Expenses shall be
borne by the Trust.

               (d) TERMINATION. The registration rights set forth in this

 

 

Section 3 shall not be available to the Trust if, (i) in the opinion of counsel
to the Company, all of the Registrable Securities then owned by the Trust could
be sold in any 90-day period pursuant to Rule 144 (without giving effect to the
provisions of Rule 144(k)) or (ii) all of the Registrable Securities held by the
Trust have been sold in a registration pursuant to the Securities Act or
pursuant to Rule 144.

          SECTION 4. RULE 144 REPORTING. With a view to making available the
benefits of certain rules and regulations of the Commission which may permit the
sale of restricted securities to the public without registration, the Company
agrees to:

               (a) make and keep public information available as those terms are
understood and defined in Rule 144 under the Securities Act (“Rule 144”), at all
times;

               (b) use its best efforts to file with the Commission in a timely
manner all reports and other documents required of the Company under the
Securities Act and the Exchange Act at any time after it has become subject to
such reporting requirements; and

               (c) so long as the Trust owns any Registrable Securities, furnish
to the Trust upon request, a written statement by the Company as to its
compliance with the reporting requirements of Rule 144, and of the Securities
Act and the Exchange Act, a copy of the most recent annual or quarterly report
of the Company, and such other reports and documents so filed as the Trust may
reasonably request in availing itself of any rule or regulation of the
Commission allowing the Trust to sell any such securities without registration.

          SECTION 5. COVENANTS.

               (a) MARKET STAND-OFF. Each of the Allegiance Parties agrees that
it will not sell or otherwise transfer or dispose of any Registrable Securities
held by such Allegiance Party during the period referred to below (a “Market
Stand-Off Period”):

               (i) in connection with an underwritten offering of equity or
equity-linked securities (such as convertible securities or warrants,
but not including a registration of securities in a Rule 145
transaction or with respect to an employee benefit plan)) of the
Company, as requested by the Company and the Company’s underwriter for
a period starting with the date of filing of, and ending on the date 90
days immediately following the effective date of, the applicable
registration statement, provided that (i) the executive officers (as
defined for purposes of Rule 16a-1 under the Exchange Act) and all the
directors of the Company enter into similar agreements and (ii) the
Company is actively employing in good faith all reasonable efforts to
cause such registration statement to become effective. The Company may
only delay or suspend an offering pursuant to this Section 5(a)(i) for
a period of not more than sixty (60) days, if a filing of any other
registration statement is not made within that period and the Company
may only exercise that right once in any twelve (12) month period.

               (ii) if the Company determines in its good faith judgment that
the filing of a registration statement under Section 3 or the use of
any related prospectus would require the disclosure of material
information that the Company has a bona fide business purpose for

 

 

preserving as confidential or the disclosure of which would impede the
Company’s ability to consummate a significant transaction, and that the
Company is not otherwise required by applicable securities laws or
regulations to disclose, upon written notice of such determination by
the Company, until the date upon which the Company notifies the
Allegiance Parties in writing that suspension of such rights for the
grounds set forth in this Section 5(a)(ii) is no longer necessary,
provided that (A) (x) the Company may not declare more than three
Market Stand-Off Periods in any 12month period pursuant to this clause
(ii), (y) the aggregate Market Stand-Off Period pursuant to this clause
(ii) in any 12-month period shall not exceed 90 days, and (z) the
Market Stand-Off Period pursuant to this clause (ii) may not be used to
extend the 90-day period contemplated by clause (i) above to a total
continuous Market Stand-Off period exceeding 150 days in the aggregate
and (B) unless the registration statement in question is a shelf
registration statement for a delayed or continuous offering, then if
the Company declares a Market Stand-Off period during the first 60 days
following the effectiveness thereof, each day of such Market Stand-Off
period will be counted as 1 1/2 days against the 90-day period
contemplated by clause (i) above. The Company agrees to give such
notice as promptly as practicable following the date that such
suspension of rights is no longer necessary.

               (b) SUPPLEMENTAL UNDERTAKING. If requested by the underwriters,
the Allegiance Parties shall execute a separate agreement to the effect set
forth in Section 5(a)(i). The Company may impose stop-transfer instructions with
respect to the shares (or securities) subject to the foregoing restriction until
the end of said 180-day period. The provisions of this Section 5(b) shall be
binding upon any transferee who acquires Registrable Securities.

               (c) RESTRICTIONS ON TRANSFER. Each of the Allegiance Parties
agrees that none of the Registrable Securities shall be transferred, sold,
assigned, pledged, hypothecated, or otherwise disposed or encumbered, either
voluntarily or involuntarily, directly or indirectly, except pursuant to an
effective registration under the Securities Act, or in a transaction which, in
the opinion of counsel experienced in such matters and reasonably satisfactory
to the Company, qualifies as an exempt transaction under the Securities Act and
the rules and regulations promulgated thereunder.

               (d) INFORMATION SUPPLIED BY THE TRUST. The Trust shall furnish to
the Company information regarding itself and the distribution proposed by such
Trust as the Company may reasonably request in writing and as shall be
reasonably required in connection with any registration, qualification or
compliance referred to in Section 3.

          SECTION 6. REGISTRATION PROCEDURES. In the case of each registration
effected by the Company pursuant to Section 3, the Company will keep the Trust
advised in writing as to the initiation of each registration and as to the
completion thereof. At its own expense, the Company will:

               (a) furnish such number of prospectuses and other documents
incident thereto as the Trust from time to time may reasonably request;

               (b) notify the Trust when a prospectus relating to the
registration statement is required to be delivered under the Securities Act of
the happening of any event as a result of which the prospectus included in such
registration statement, as then in effect, includes an untrue statement of a

 

 

material fact or omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in the light of the
circumstances then existing; and

               (c) furnish, on the date that such Registrable Securities are
delivered to the underwriters for sale, if such securities are being sold
through underwriters or, if such securities are not being sold through
underwriters, on the date that the registration statement with respect to such
securities becomes effective, (1) an opinion, dated as of such date, of the
counsel representing the Company for the purposes of such registration, in form
and substance as is customarily given to underwriters in an underwritten public
offering and reasonably satisfactory the Trust, addressed to the underwriters,
if any, and to the Trust and (2) a letter, dated as of such date, from the
independent certified public accountants of the Company, in form and substance
as is customarily given by independent certified public accountants to
underwriters in an underwritten public offering and reasonably satisfactory to
the Trust, addressed to the underwriters, if any, and if permitted by applicable
accounting standards, to the Trust.

          SECTION 7. INDEMNIFICATION.

               (a) The Company will indemnify the Trust, as applicable, each of
its officers, directors and partners, and each Person controlling the Trust,
with respect to each registration which has been effected pursuant to Section 3,
and each underwriter, if any, and each person who controls any underwriter,
against all claims, losses, damages and liabilities (or actions in respect
thereof) arising out of or based on any untrue statement (or alleged untrue
statement) of a material fact contained in any prospectus, offering circular or
other document (including any related registration statement, notification or
the like) incident to any such registration, qualification or compliance, or
based on any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, or any violation by the Company of the Securities Act or the
Exchange Act or any rule or regulation thereunder applicable to the Company and
relating to action or inaction required of the Company in connection with any
such registration, qualification or compliance, and will reimburse the Trust,
each of its officers, directors and partners, and each Person controlling the
Trust, each such underwriter and each Person who controls any such underwriter,
for any legal and any other expenses reasonably incurred in connection with
investigating and defending any such claim, loss, damage, liability or action,
provided that the Company will not be liable in any such case to the extent that
any such claim, loss, damage, liability or expense arises out of or is based on
any untrue statement or omission based upon written information furnished to the
Company by the Trust or underwriter and stated to be specifically for use
therein.

               (b) The Trust will indemnify the Company, each of its directors
and officers and each underwriter, if any, of the Company’s securities covered
by such a registration statement, each person who controls the Company or such
underwriter, each Other Stockholder and each of their officers, directors, and
partners, and each person controlling such Other Stockholder against all claims,
losses, damages and liabilities (or actions in respect thereof) arising out of
or based on any untrue statement (or alleged untrue statement) of a material
fact contained in any such registration statement, prospectus, offering circular
or other document made by the Trust, or any omission (or alleged omission) to
state therein a material fact required to be stated therein or necessary to make

 

 

the statements by the Trust therein not misleading, and will reimburse the
Company and such Other Stockholders, directors, officers, partners, persons,
underwriters or control persons for any legal or any other expenses reasonably
incurred in connection with investigating or defending any such claim, loss,
damage, liability or action, in each case to the extent, but only to the extent,
that such untrue statement (or alleged untrue statement) or omission (or alleged
omission) is made in such registration statement, prospectus, offering circular
or other document in reliance upon and in conformity with written information
furnished to the Company by the Trust and stated to be specifically for use
therein; provided, however, that the obligations of the Trust hereunder shall be
limited to an amount equal to the net proceeds to the Trust of securities sold
as contemplated herein.

               (c) Each party entitled to indemnification under this Section 7
(the “Indemnified Party”) shall give notice to the party required to provide
indemnification (the “Indemnifying Party”) promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom; provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or any litigation resulting
therefrom, shall be approved by the Indemnified Party (whose approval shall not
unreasonably be withheld) and the Indemnified Party may participate in such
defense at such party’s expense (unless the Indemnified Party shall have
reasonably concluded that there may be a conflict of interest between the
Indemnifying Party and the Indemnified Party in such action, in which case the
fees and expenses of counsel shall be at the expense of the Indemnifying Party),
and provided further that the failure of any Indemnified Party to give notice as
provided herein shall not relieve the Indemnifying Party of its obligations
under this Section 7 unless the Indemnifying Party is materially prejudiced
thereby. No Indemnifying Party, in the defense of any such claim or litigation
shall, except with the consent of each Indemnified Party, consent to entry of
any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect to such claim or
litigation. Each Indemnified Party shall furnish such information regarding
itself or the claim in question as an Indemnifying Party may reasonably request
in writing and as shall be reasonably required in connection with the defense of
such claim and litigation resulting therefrom.

               (d) If the indemnification provided for in this Section 7 is held
by a court of competent jurisdiction to be unavailable to an Indemnified Party
with respect to any loss, liability, claim, damage or expense referred to
herein, then the Indemnifying Party, in lieu of indemnifying such Indemnified
Party hereunder, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such loss, liability, claim, damage or expense
in such proportion as is appropriate to reflect the relative fault of the
Indemnifying Party on the one hand and of the Indemnified Party on the other in
connection with the statements or omissions which resulted in such loss,
liability, claim, damage or expense, as well as any other relevant equitable
considerations. The relative fault of the Indemnifying Party and of the
Indemnified Party shall be determined by reference to, among other things,
whether the untrue (or alleged untrue) statement of a material fact or the
omission (or alleged omission) to state a material fact relates to information
supplied by the Indemnifying Party or by the Indemnified Party and the parties’
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.

 

 

               (e) Notwithstanding the foregoing, to the extent that the
provisions on indemnification and contribution contained in the underwriting
agreement entered into in connection with any underwritten public offering
contemplated by this Agreement are in conflict with the foregoing provisions,
the provisions in such underwriting agreement shall be controlling.

               (i) The foregoing indemnity agreement of the Company and the
Trust is subject to the condition that, insofar as they relate to any
loss, claim, liability or damage arising out of a statement made in or
omitted from a preliminary prospectus but eliminated or remedied in the
amended prospectus on file with the Commission at the time the
registration statement in question becomes effective or the amended
prospectus filed with the Commission pursuant to Commission Rule 424(b)
(the “Final Prospectus”), such indemnity or contribution agreement
shall not inure to the benefit of any underwriter or the Trust if a
copy of the Final Prospectus was furnished to the underwriter and was
not furnished to the Person asserting the loss, liability, claim or
damage at or prior to the time such action is required by the
Securities Act.

SECTION 8. MISCELLANEOUS.

               (a) DIRECTLY
OR INDIRECTLY. Where any provision in this Agreement refers to action to be taken by any Person, or which such Person is prohibited
from taking, such provision shall be applicable whether such action is taken
directly or indirectly by such Person.

               (b) GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed entirely within such State.

               (c) SECTION HEADINGS. The headings of the sections and
subsections of this Agreement are inserted for convenience only and shall not be
deemed to constitute a part thereof.

               (d) NOTICES.

               (i) All communications under this Agreement shall be in
writing and shall be delivered by hand or facsimile or mailed by
overnight courier or by registered or certified mail, postage prepaid:

               (1) if to the Company, to: 11111 Sunset Hills Road
Reston, Virginia 20190 (facsimile: (703) 547-2479), Attention:
General Counsel, or at such other address as it may have
furnished in writing to the Allegiance Parties, with a copy to
Willkie Farr & Gallagher LLP, 787 Seventh Avenue, New York, NY
10019 (facsimile: (212) 728-8111), Attention: Bruce R. Kraus,
Esq.

               (2) if to the Allegiance or Allegiance Worldwide, to
[                                        ]: or at such other address or facsimile
number as may have been furnished the Company in writing.

               (3) if to the Trust, to: [                                        ], or
at such other address or facsimile number as may have been
furnished the Company in writing.

 

 

               (ii) Any notice so addressed shall be deemed to be given: if
delivered by hand or facsimile, on the date of such delivery; if mailed
by overnight courier, on the first business day following the date of
such mailing; and if mailed by registered or certified mail, on the
third business day after the date of such mailing.

               (e) REPRODUCTION OF DOCUMENTS. This Agreement and all documents
relating thereto, including, without limitation, any consents, waivers and
modifications which may hereafter be executed may be reproduced by the
Allegiance Parties by any photographic, photostatic, microfilm, microcard,
miniature photographic or other similar process and the Allegiance Parties may
destroy any original document so reproduced. The parties hereto agree and
stipulate that any such reproduction shall be admissible in evidence as the
original itself in any judicial or administrative proceeding (whether or not the
original is in existence and whether or not such reproduction was made by the
Allegiance Parties in the regular course of business) and that any enlargement,
facsimile or further reproduction of such reproduction shall likewise be
admissible in evidence.

               (f) SUCCESSORS AND ASSIGNS. Except as otherwise provided in this
Agreement, no party hereto shall assign this Agreement or any rights or
obligations hereunder without the prior written consent of the other parties
hereto and any such attempted assignment without such prior written consent
shall be void and of no force and effect. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the
parties. The rights of the Trust under this Agreement may be assigned to no more
than 10 purchasers of Registrable Securities, provided that each such assignee
shall promptly execute and deliver to the Company a written undertaking assuming
the obligations of the Trust under this Agreement, and provided further that if,
at any time, there is more than one holder of Registrable Securities, demands,
requests and determinations otherwise made by the Trust shall be made by the
holders of a majority of the Registrable Securities at the time outstanding.

               (g) ENTIRE AGREEMENT; AMENDMENT AND WAIVER. This Agreement
constitutes the entire understanding of the parties hereto and supersedes all
prior understanding among such parties. This Agreement may be amended, and the
observance of any term of this Agreement may be waived, with (and only with) the
written consent of the Company. and the Trust.

               (h) SEVERABILITY. In the event that any part or parts of this
Agreement shall be held illegal or unenforceable by any court or administrative
body of competent jurisdiction, such determination shall not affect the
remaining provisions of this Agreement which shall remain in full force and
effect.

               (i) COUNTERPARTS. This Agreement may be executed in two or more
counterparts (including by facsimile), each of which shall be deemed an original

and all of which together shall be considered one and the same agreement.

               IN WITNESS WHEREOF, the undersigned have executed this Agreement
as of the date first set forth above.

XO COMMUNICATIONS, INC.

 

 

	 	 	 	 	 
	 	 	 
	 	By:  	                                                     /s/ William Garrahan
 	 
	 	 	Name:  	William Garrahan 	 
	 	 	Title:  	Acting CFO 	 
	 

ALLEGIANCE TELECOM, INC.,

as debtor-in-possession

	 	 	 	 	 
	By:

	 	/s/ Mark B. Tresnowski	 	 
	

	 	 	 	 
	

	 	Name: Mark B. Tresnowski	 	 
	

	 	Title: Executive Vice President	 	 

ALLEGIANCE TELECOM COMPANY WORLDWIDE,

as debtor-in-possession

	 	 	 	 	 
	By:

	 	/s/ Mark B. Tresnowski	 	 
	

	 	 	 	 
	

	 	Name: Mark B. Tresnowski	 	 
	

	 	Title: Executive Vice President	 	 

ALLEGIANCE TELECOM LIQUIDATING TRUST

	 	 	 	 	 
	By:

	 	/s/ Eugene I. Davis	 	 
	

	 	 	 	 
	

	 	Name: Eugene I. Davis	 	 
	

	 	Title: Plan Administratorexv10w1

 

Exhibit 10.1

CIENA CORPORATION

2003 EMPLOYEE STOCK PURCHASE PLAN (AS AMENDED)

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page
	1. SHARES SUBJECT TO THE PLAN	 	 	4	 
	 
	 	 	 	 	 	 	 	 
	2. ADMINISTRATION	 	 	4	 
	 
	 	 	 	 	 	 	 	 
	3. INTERPRETATION	 	 	4	 
	 
	 	 	 	 	 	 	 	 
	4. ELIGIBLE EMPLOYEES	 	 	4	 
	 
	 	 	 	 	 	 	 	 
	5. PARTICIPATION IN THE PLAN	 	 	5	 
	 
	 	 	 	 	 	 	 	 
	6. PAYROLL DEDUCTIONS	 	 	5	 
	 
	 	 	 	 	 	 	 	 
	7. RECORD OF PAYROLL DEDUCTIONS	 	 	5	 
	 
	 	 	 	 	 	 	 	 
	8. OFFERING AND PURCHASE PERIODS	 	 	5	 
	 
	 	 	 	 	 	 	 	 
	9. RIGHTS TO PURCHASE COMMON STOCK; PURCHASE PRICE	 	 	5	 
	 
	 	 	 	 	 	 	 	 
	10. TIMING OF PURCHASE; PURCHASE LIMITATION	 	 	6	 
	 
	 	 	 	 	 	 	 	 
	11. ISSUANCE OF STOCK CERTIFICATES	 	 	6	 
	 
	 	 	 	 	 	 	 	 
	12. WITHHOLDING OF TAXES	 	 	6	 
	 
	 	 	 	 	 	 	 	 
	13. ACCOUNT STATEMENTS	 	 	6	 
	 
	 	 	 	 	 	 	 	 
	14. PARTICIPATION ADJUSTMENT	 	 	7	 
	 
	 	 	 	 	 	 	 	 
	15. CHANGES IN ELECTIONS TO PURCHASE	 	 	7	 
	 
	 	 	 	 	 	 	 	 
	16. TERMINATION OF EMPLOYMENT	 	 	7	 
	 
	 	 	 	 	 	 	 	 
	17. RETIREMENT	 	 	7	 
	 
	 	 	 	 	 	 	 	 
	18. LAY-OFF, AUTHORIZED LEAVE OF ABSENCE OR DISABILITY	 	 	8	 
	 
	 	 	 	 	 	 	 	 
	19. DEATH	 	 	8	 
	 
	 	 	 	 	 	 	 	 
	20. TERMINATION OF PARTICIPATION	 	 	9	 
	 
	 	 	 	 	 	 	 	 
	21. ASSIGNMENT	 	 	9	 
	 
	 	 	 	 	 	 	 	 
	22. APPLICATION OF FUNDS	 	 	9	 
	 
	 	 	 	 	 	 	 	 
	23. NO RIGHT TO CONTINUED EMPLOYMENT	 	 	9	 
	 
	 	 	 	 	 	 	 	 
	24. AMENDMENT OF PLAN	 	 	9	 
	 
	 	 	 	 	 	 	 	 
	25. EFFECTIVE DATE; TERM AND TERMINATION OF THE PLAN	 	 	9	 
	 
	 	 	 	 	 	 	 	 
	26. EFFECT OF CHANGES IN CAPITALIZATION	 	 	10	 

2

 

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page
	

	 	(a)
	 	Changes in Stock
	 	 	10	 
	 
	 	 	 	 	 	 	 	 
	

	 	(b)
	 	Reorganization in Which the Company Is the Surviving Corporation
	 	 	10	 
	 
	 	 	 	 	 	 	 	 
	

	 	(c)
	 	Reorganization in Which the Company Is Not the Surviving Corporation or
Sale of Assets or Stock
	 	 	10	 
	 
	 	 	 	 	 	 	 	 
	

	 	(d)
	 	Adjustments
	 	 	10	 
	 
	 	 	 	 	 	 	 	 
	

	 	(e)
	 	No Limitations on Company
	 	 	11	 
	 
	 	 	 	 	 	 	 	 
	27. GOVERNMENTAL REGULATION	 	 	11	 
	 
	 	 	 	 	 	 	 	 
	28. STOCKHOLDER RIGHTS	 	 	11	 
	 
	 	 	 	 	 	 	 	 
	29. RULE 16B-3	 	 	11	 
	 
	 	 	 	 	 	 	 	 
	30. PAYMENT OF PLAN EXPENSES	 	 	11	 

3

 

CIENA CORPORATION

2003 EMPLOYEE STOCK PURCHASE PLAN

     The Board of Directors of Ciena Corporation (the “Company”) has adopted this 2003
Employee Stock Purchase Plan (the “Plan”) to enable eligible employees of the Company
and its participating Affiliates (as defined below), through payroll deductions, to
purchase shares of the Company’s common stock, par value $0.01 per share (the “ Common
Stock”). The Plan is for the benefit of the employees of the Company and any
participating Affiliates. The Plan is intended to benefit the Company by increasing
the employees’ interest in the Company’s growth and success and encouraging employees
to remain in the employ of the Company or its participating Affiliates. The
provisions of the Plan are set forth below:

	1.  	SHARES SUBJECT TO THE PLAN.

     Subject to adjustment as provided in Section 26 below, the aggregate number of
shares of Common Stock that may be made available for purchase by participating
employees under the Plan is 25,000,000 shares; provided, that, beginning on December
31, 2005 and on each December 31 thereafter (the “Determination Date) there shall be
added to the Plan an additional 4,000,000 shares; and provided further that, the
number of shares so added on the Determination Date each year shall be reduced to the
extent necessary that the total number of shares available for purchase under the Plan
shall not at any time exceed 25,000,000. The shares issuable under the Plan may, in
the discretion of the Board of Directors of the Company (the “Board”), be authorized
but unissued shares, treasury shares or issued and outstanding shares that are
purchased in the open market.

	2.  	ADMINISTRATION.

     The Plan shall be administered under the direction of the Compensation Committee
of the Board (the “Committee”). No member of the Board or the Committee shall be
liable for any action or determination made in good faith with respect to the Plan.

	3.  	INTERPRETATION.

     It is intended that the Plan will meet the requirements for an “employee stock
purchase plan” under Section 423 of the Internal Revenue Code of 1986 (the “Code”),
and it is to be so applied and interpreted. Subject to the express provisions of the
Plan, the Committee shall have authority to interpret the Plan, to prescribe, amend
and rescind rules relating to it, and to make all other determinations necessary or
advisable in administering the Plan, all of which determinations will be final and
binding upon all persons.

	4.  	ELIGIBLE EMPLOYEES.

     Any employee of the Company and its designated Affiliates as determined by the
Board of Directors may participate in the Plan, except the following, who are
ineligible to participate: (a) an employee who has been employed by the Company or
any of its participating Affiliates for less than three months as of the beginning of
an Offering Period (as defined in Section 7 below); (b) an employee whose customary
employment is for less than five months in any calendar year; (c) an employee whose
customary employment is less than 21 hours per week; and (d) an employee who, after
exercising his or her rights to purchase shares under the Plan, would own shares of
Common Stock (including shares that may be acquired under any outstanding options)
representing five percent or more of the total combined voting power of all classes of
stock of the Company. The term “participating Affiliate” means any company or other
trade or business that is a subsidiary of the Company (determined in accordance with
the principles of Sections 424(e) and (f) of the Code and the regulations thereunder).
The Board may at any time in its sole discretion, if it deems it advisable to do so,
terminate the participation of the employees of a particular participating Affiliate.

4

 

	5.  	PARTICIPATION IN THE PLAN.

     An eligible employee may become a participating employee in the Plan by
completing an election to participate in the Plan on a form provided by the Company
and submitting that form to the Benefits Department of the Company. The form will
authorize payroll deductions (as provided in Section 6 below) and authorize the
purchase of shares of Common Stock for the employee’s account in accordance with the
terms of the Plan. Enrollment will become effective upon the first day of the first
Offering Period. Enrollment in this Plan is limited to one Offering Period at a time.

	6.  	PAYROLL DEDUCTIONS.

     At the time an eligible employee submits his or her election to participate in
the Plan (as provided in Section 5 above), the employee shall elect to have deductions
made from his or her pay, on each pay day following his or her enrollment in the Plan,
and for as long as he or she shall participate in the Plan. The deductions will be
credited to the participating employee’s account under the Plan. An employee may not
during any Offering Period change his or her amount or percentage of payroll deduction
for that Offering Period, nor may an employee withdraw any contributed funds, other
than in accordance with Sections 15 through 20 below.

	7.  	RECORD OF PAYROLL DEDUCTIONS.

     The Company and participating Affiliates will cause to be maintained a record of
amounts credited to each participating employee authorizing a payroll deduction
pursuant to Section 6. The Company will not credit interest on the balance of the
employees’ accounts during the Offering Period.

	8.  	OFFERING AND PURCHASE PERIODS.

     The Offering Periods and Purchase Period shall be determined by the Committee.
The initial Offering Period shall commence on March 16, 2003 and end on March 15,
2005, and every Offering Period thereafter, shall commence on the six month
anniversary of the commencement of the prior Offering Period and shall be a 24-month
period until changed by the Committee. All individuals who are participating in the
Plan on the last day of an Offering Period shall automatically be deemed to have
elected to participate in the next Offering Period. The initial Purchase Period shall
commence on March 16, 2003 and end on September 15, 2003, and every Purchase Period
thereafter, shall commence immediately after the prior Purchase Period ends and shall
be a six month period until changed by the Committee; provided,
however, that if at the beginning of any Offering Period, the fair market
value of Common Stock shall be less than the fair market value of Common Stock on the
first day of any prior Offering Period which has not yet terminated, all individuals
who are participating in the Plan for that prior Offering Period shall be
automatically terminated from that prior Offering Period and be deemed to have elected
to participate in the current Offering Period. All payroll deduction forms for the
prior Offering Period will be deemed to apply to the current Offering Period.

	9.  	RIGHTS TO PURCHASE COMMON STOCK; PURCHASE PRICE.

     Rights to purchase shares of Common Stock will be deemed granted to participating
employees as of the first trading day of each Offering Period. The purchase price of
each share of Common Stock (the “Purchase Price”) shall be the lesser of 85 percent of
the fair market value of the Common Stock (i) on the trading day immediately preceding
the first trading day of the Offering Period or (ii) on the last trading day of the
Purchase Period, unless the Purchase Price is otherwise established by the Committee;
provided that in no event shall the Purchase Price be less than the amount
determined pursuant to subparagraphs (i) and (ii) above or the par value of the Common
Stock. For purposes of the Plan, “fair market value” means the value of each share of
Common Stock subject to the Plan determined as follows: if on the determination date
the shares of Common Stock are listed on an established national or regional stock
exchange, are admitted to quotation on the National Association of Securities Dealers
Automated Quotation System, or are publicly traded on an established securities
market, the fair market value of the

5

 

shares of Common Stock shall be the closing price of the shares of Common Stock on
such exchange or in such market (the exchange designated by the Board if there is more
than one such exchange or market) on the determination date (or if there is no such
reported closing price, the fair market value shall be the mean between the highest
bid and lowest asked prices or between the high and low sale prices on such trading
day) or, if no sale of the shares of Common Stock is reported for such trading day, on
the next preceding day on which any sale shall have been reported. If the shares of
Common Stock are not listed on such an exchange, quoted on such System or traded on
such a market, fair market value shall be determined by the Board in good faith.

	10.  	TIMING OF PURCHASE; PURCHASE LIMITATION.

     Unless a participating employee has given prior written notice terminating such
employee’s participation in the Plan, or the employee’s participation in the Plan has
otherwise been terminated as provided in Sections 16 through 20 below, such employee
will be deemed to have exercised automatically his or her right to purchase Common
Stock on the last trading day of the Purchase Period (except as provided in Section 15
below) for the number of shares of Common Stock which the accumulated funds in the
employee’s account at that time will purchase at the Purchase Price, subject to the
participation adjustment provided for in Section 14 below and subject to adjustment
under Section 26 below. Notwithstanding any other provision of the Plan, no employee
may purchase in any one calendar year under the Plan and all other “employee stock
purchase plans” of the Company and its participating Affiliates shares of Common Stock
having an aggregate fair market value in excess of $25,000, determined as of the first
trading date of the Offering Period as to shares purchased during such period.
Effective upon the last trading day of the Purchase Period, a participating employee
will become a stockholder with respect to the shares purchased during such period, and
will thereupon have all dividend, voting and other ownership rights incident thereto.
Notwithstanding the foregoing, no shares shall be sold pursuant to the Plan unless the
Plan is approved by the Company’s stockholders in accordance with Section 25 below.

	11.  	ISSUANCE OF STOCK CERTIFICATES.

     As of the last trading day of the Purchase Period, a participating employee will
be credited with the number of shares of Common Stock purchased for his or her account
under the Plan during such Offering Period. Shares purchased under the Plan will be
held in the custody of an agent (the “Agent”) appointed by the Committee. The Agent
may hold the shares purchased under the Plan in stock certificates in nominee names
and may commingle shares held in its custody in a single account or stock certificate
without identification as to individual participating employees. A participating
employee may, at any time following his or her purchase of shares under the Plan and
after the expiration of the qualifying holding period, by written notice instruct the
Agent to have all or part of such shares reissued in the participating employee’s own
name and have the stock certificate delivered to the employee.

	12.  	WITHHOLDING OF TAXES.

     To the extent that a participating employee realizes ordinary income in
connection with a sale or other transfer of any shares of Common Stock purchased under
the Plan, the Company may withhold amounts needed to cover such taxes from any
payments otherwise due and owing to the participating employee or from shares that
would otherwise be issued to the participating employee hereunder. Any participating
employee who sells or otherwise transfers shares purchased under the Plan within two
years after the beginning of the Offering Period in which the shares were purchased
must within 30 days of such transfer notify the Payroll Department of the Company in
writing of such transfer.

	13.  	ACCOUNT STATEMENTS.

     The Company will cause the Agent to deliver to each participating employee a
statement for each Purchase Period during which the employee purchases Common Stock
under the Plan, but no more frequently than every six months, reflecting the amount of
payroll deductions during the Purchase Period, the number of shares purchased for the
employee’s account, the price per share of the shares purchased

6

 

for the employee’s account and the number of shares held for the employee’s account at
the end of the Purchase Period.

	14.  	PARTICIPATION ADJUSTMENT.

     If in any Purchase Period the number of unsold shares that may be made available
for purchase under the Plan pursuant to Section 1 above is insufficient to permit
exercise of all rights deemed exercised by all participating employees pursuant to
Section 9 above, a participation adjustment will be made, and the number of shares
purchasable by all participating employees will be reduced proportionately. Any funds
then remaining in a participating employee’s account after such exercise will be
refunded to the employee.

	15.  	CHANGES IN ELECTIONS TO PURCHASE.

     (a) A participating employee may, at any time prior to the fifth business day
before the last day of the Purchase Period, by written notice to the Company, direct
the Company to cease payroll deductions (or, if the payment for shares is being made
through periodic cash payments, notify the Company that such payments will be
terminated), in accordance with the following alternatives:

          (i) The employee’s option to purchase shall be reduced to the number of shares
which may be purchased, as of the last day of the Purchase Period, with the amount
then credited to the employee’s account; or

          (ii) Withdraw the amount in such employee’s account and terminate such employee’s
option to purchase.

     (b) Any participating employee may decrease his or her payroll deduction or
periodic cash payments, to take effect as soon as administratively practicable by
delivering to the Company a new form regarding election to participate in the Plan
under Section 5 above.

     (c) Any participating employee may increase his or her payroll deduction or
periodic cash payments, to take effect on the first day of the next following Offering
Period by delivering to the Company a new form regarding election to participate in
the Plan under Section 5 above.

	16.  	TERMINATION OF EMPLOYMENT.

     In the event a participating employee voluntarily leaves the employ of the
Company or a participating Affiliate, otherwise than by retirement under a plan of the
Company or a participating Affiliate, or is terminated by the Company prior to the
last day of the Purchase Period, the amount in the employee’s account will be
distributed and the employee’s option to purchase will terminate.

	17.  	RETIREMENT.

     In the event a participating employee who has an option to purchase shares leaves
the employ of the Company or a participating Affiliate because of retirement under a
plan of the Company or a participating Affiliate the participating employee may elect,
within 60 days after the date of such retirement or termination, but, in no event,
later than the end of the current Purchase Period, one of the following alternatives:

     (a) The employee’s option to purchase shall be reduced to the number of shares
which may be purchased, as of the last day of the Purchase Period, with the amount
then credited to the employee’s account; or

     (b) Withdraw the amount in such employee’s account and terminate such employee’s
option to purchase.

7

 

     In the event the participating employee does not make an election within the
aforesaid 60-day period, he or she will be deemed to have elected subsection 17(b)
above.

	18.  	LAY-OFF, AUTHORIZED LEAVE OF ABSENCE OR DISABILITY.

     Payroll deductions for shares for which a participating employee has an option to
purchase may be suspended during any period of absence of the employee from work due
to lay-off, authorized leave of absence or disability or, if the employee so elects,
periodic payments for such shares may continue to be made in cash.

     If such employee returns to active service prior to the last day of the Purchase
Period, the employee’s payroll deductions will be resumed and if said employee did not
make periodic cash payments during the employee’s period of absence, the employee
shall, by written notice to the Company’s Payroll Department within 10 days after the
employee’s return to active service, but not later than the last day of the Purchase
Period, elect one of the following alternatives:

     (a) The employee’s option to purchase shall be reduced to the number of shares
that can be purchased with the amount, if any, then credited to the employee’s account
plus the aggregate amount, if any, of all payroll deductions to be made thereafter; or

     (b) Withdraw the amount in the employee’s account and terminate the employee’s
option to purchase.

     A participating employee on lay-off, authorized leave of absence or disability on
the last day of the Purchase Period shall deliver written notice to his or her
employer on or before the last day of the Purchase Period, electing one of the
alternatives provided in the foregoing clauses (a) or (b) of this Section 18. If any
employee fails to deliver such written notice within 10 days after the employee’s
return to active service or by the last day of the Purchase Period, whichever is
earlier, the employee shall be deemed to have elected subsection 18(b) above.

     If the period of a participating employee’s lay-off, authorized leave of absence
or disability shall terminate on or before the last day of the Purchase Period, and
the employee shall not resume active employment with the Company or a participating
Affiliate, the employee shall receive a distribution in accordance with the provisions
of Section 17 of this Plan.

	19.  	DEATH.

     In the event of the death of a participating employee while the employee’s option
to purchase shares is in effect, the legal representatives of such employee may,
within 60 days after the employee’s death (but no later than the last day of the
Purchase Period) by written notice to the Company or participating Affiliate, elect
one of the following alternatives:

     (a) The employee’s option to purchase shall be reduced to the number of shares
which may be purchased, as of the last day of the Purchase Period, with the amount
then credited to the employee’s account; or

     (b) Withdraw the amount in such employee’s account and terminate such employee’s
option to purchase.

     In the event the legal representatives of such employee fail to deliver such
written notice to the Company or participating Affiliate within the prescribed period,
the election to purchase shares shall terminate and the amount, then credited to the
employee’s account shall be paid to such legal representatives.

8

 

	20.  	TERMINATION OF PARTICIPATION.

     A participating employee will be refunded all moneys in his or her account, and
his or her participation in the Plan will be terminated if either (a) the Board elects
to terminate the Plan as provided in Section 25 below, or (b) the employee ceases to
be eligible to participate in the Plan under Section 4 above. As soon as practicable
following termination of an employee’s participation in the Plan, the Company will
deliver to the employee a check representing the amount in the employee’s account and
a stock certificate representing the number of whole shares held in the employee’s
account. Once terminated, participation may not be reinstated for the then current
Offering Period, but, if otherwise eligible, the employee may elect to participate in
any subsequent Offering Period.

	21.  	ASSIGNMENT.

     No participating employee may assign his or her rights to purchase shares of
Common Stock under the Plan, whether voluntarily, by operation of law or otherwise.
Any payment of cash or issuance of shares of Common Stock under the Plan may be made
only to the participating employee (or, in the event of the employee’s death, to the
employee’s estate). Once a stock certificate has been issued to the employee or for
his or her account, such certificate may be assigned the same as any other stock
certificate.

	22.  	APPLICATION OF FUNDS.

     All funds received or held by the Company under the Plan shall be deposited with
the Agent for the account of the participating employees. Participating employees’
accounts will not be segregated.

	23.  	NO RIGHT TO CONTINUED EMPLOYMENT.

     Neither the Plan nor any right to purchase Common Stock under the Plan confers
upon any employee any right to continued employment with the Company or any of its
participating Affiliates, nor will an employee’s participation in the Plan restrict or
interfere in any way with the right of the Company or any of its participating
Affiliates to terminate the employee’s employment at any time.

	24.  	AMENDMENT OF PLAN.

     The Board may, at any time, amend the Plan in any respect (including an increase
in the percentage specified in Section 9 above used in calculating the Purchase
Price). An amendment to the Plan shall be contingent on approval of the stockholders
of the Company only to the extent required by applicable law, regulations or rules or
as provided by the Board.

	25.  	EFFECTIVE DATE; TERM AND TERMINATION OF THE PLAN.

     The Plan shall be effective as of the date of adoption by the Board, which date
is set forth below, subject to approval of the Plan by a majority of the votes present
and entitled to vote at a duly held meeting of the shareholders of the Company at
which a quorum representing a majority of all outstanding voting stock is present,
either in person or by proxy; provided, however, that upon approval of the
Plan by the shareholders of the Company as set forth above, all rights to purchase
shares granted under the Plan on or after the effective date shall be fully effective
as if the shareholders of the Company had approved the Plan on the effective date. If
the shareholders fail to approve the Plan on or before one year after the effective
date, the Plan shall terminate, any rights to purchase shares granted hereunder shall
be null and void and of no effect and all contributed funds shall be refunded to
participating employees. The Board may terminate the Plan at any time and for any
reason or for no reason, provided that such termination shall not impair any rights of
participating employees that have vested at the time of termination. In any event,
the Plan shall, without further action of the Board, terminate ten (10) years after
the date of adoption of the Plan by the Board or, if earlier, at such time as all
shares of Common Stock that may be made available for purchase under the Plan pursuant
to Section 1 above have been issued.

9

 

	26.  	EFFECT OF CHANGES IN CAPITALIZATION.

	 	(a)  	Changes in Stock.

     If the number of outstanding shares of Common Stock is increased or decreased or
the shares of Common Stock are changed into or exchanged for a different number or
kind of shares or other securities of the Company by reason of any recapitalization,
reclassification, stock split, reverse split, combination of shares, exchange of
shares, stock dividend, or other distribution payable in capital stock, or other
increase or decrease in such shares effected without receipt of consideration by the
Company occurring after the effective date of the Plan, the number and kinds of shares
that may be purchased under the Plan shall be adjusted proportionately and accordingly
by the Company. In addition, the number and kind of shares for which rights are
outstanding shall be similarly adjusted so that the proportionate interest of a
participating employee immediately following such event shall, to the extent
practicable, be the same as immediately prior to such event. Any such adjustment in
outstanding rights shall not change the aggregate Purchase Price payable by a
participating employee with respect to shares subject to such rights, but shall
include a corresponding proportionate adjustment in the Purchase Price per share.

	 	(b)  	Reorganization in Which the Company Is the Surviving Corporation.

     Subject to Subsection (c) of this Section 26, if the Company shall be the
surviving corporation in any reorganization, merger or consolidation of the Company
with one or more other corporations, all outstanding rights under the Plan shall
pertain to and apply to the securities to which a holder of the number of shares of
Common Stock subject to such rights would have been entitled immediately following
such reorganization, merger or consolidation, with a corresponding proportionate
adjustment of the Purchase Price per share so that the aggregate Purchase Price
thereafter shall be the same as the aggregate Purchase Price of the shares subject to
such rights immediately prior to such reorganization, merger or consolidation.

	 	(c)  	Reorganization in Which the Company Is Not the Surviving Corporation
or Sale of Assets or Stock.

     Upon any dissolution or liquidation of the Company, or upon a merger,
consolidation or reorganization of the Company with one or more other corporations in
which the Company is not the surviving corporation, or upon a sale of all or
substantially all of the assets of the Company to another corporation, or upon any
transaction (including, without limitation, a merger or reorganization in which the
Company is the surviving corporation) approved by the Board that results in any person
or entity owning more than 80 percent of the combined voting power of all classes of
stock of the Company, the Plan and all rights outstanding hereunder shall terminate,
except to the extent provision is made in writing in connection with such transaction
for the continuation of the Plan and/or the assumption of the rights theretofore
granted, or for the substitution for such rights of new rights covering the stock of a
successor corporation, or a parent or subsidiary thereof, with appropriate adjustments
as to the number and kinds of shares and exercise prices, in which event the Plan and
rights theretofore granted shall continue in the manner and under the terms so
provided. In the event of any such termination of the Plan, all current Purchase
Periods and Offering Periods shall be deemed to have ended on the last trading day
prior to such termination, and in accordance with Section 10 above the rights of each
participating employee then outstanding shall be deemed to be automatically exercised
on such last trading day. The Board shall send written notice of an event that will
result in such a termination to all participating employees not later than the time at
which the Company gives notice thereof to its stockholders.

	 	(d)  	Adjustments.

     Adjustments under this Section 26 related to stock or securities of the Company
shall be made by the Committee, whose determination in that respect shall be final,
binding, and conclusive.

10

 

	 	(e)  	No Limitations on Company.

     The grant of a right pursuant to the Plan shall not affect or limit in any way
the right or power of the Company to make adjustments, reclassifications,
reorganizations or changes of its capital or business structure or to merge,
consolidate, dissolve or liquidate, or to sell or transfer all or any part of its
business or assets.

	27.  	GOVERNMENTAL REGULATION.

     The Company’s obligation to issue, sell and deliver shares of Common Stock
pursuant to the Plan is subject to such approval of any governmental authority and any
national securities exchange or other market quotation system as may be required in
connection with the authorization, issuance or sale of such shares.

	28.  	STOCKHOLDER RIGHTS.

     Any dividends paid on shares held by the Company for a participating employee’s
account will be transmitted to the employee. The Company will deliver to each
participating employee who purchases shares of Common Stock under the Plan, as
promptly as practicable by mail or otherwise, all notices of meetings, Proxy
Statements, proxies and other materials distributed by the Company to its
stockholders. Any shares of Common Stock held by the Agent for an employee’s account
will be voted in accordance with the employee’s duly delivered and signed proxy
instructions. There will be no charge to participating employees in connection with
such notices, proxies and other materials.

	29.  	RULE 16B-3.

     Transactions under this Plan are intended to comply with all applicable
conditions of Rule 16b-3 or any successor provision under the Securities Exchange Act
of 1934, as amended. If any provision of the Plan or action by the Board fails to so
comply, it shall be deemed null and void to the extent permitted by law and deemed
advisable by the Board. Moreover, in the event the Plan does not include a provision
required by Rule 16b-3 to be stated herein, such provision (other than one relating to
eligibility requirements, or the price and amount of awards) shall be deemed
automatically to be incorporated by reference into the Plan.

	30.  	PAYMENT OF PLAN EXPENSES.

     The Company will bear all costs of administering and carrying out the Plan;
provided however, participating employees shall bear all costs incurred
subsequent to the issuance of stock certificates pursuant to Section 11.

*     *
    *

     This Plan was duly adopted and approved by the Board of Directors of the Company
by resolution at a meeting held on the 24th of January, 2003.

	 	 	 	 	 
	

	 	/S/ Russell B. Stevenson, Jr.	 	 
	

	 	Secretary of the Company	 	 

     This Plan was duly approved by the stockholders of the Company at a meeting of
the stockholders held on the 12th of March, 2003.

	 	 	 	 	 
	

	 	/S/ Russell B. Stevenson, Jr.	 	 
	

	 	Secretary of the Company	 	 

11

 

*    
*     *

     This Plan, as amended, was duly adopted and approved by the Board of Directors of
the Company by resolution at a meeting held on the 8th of December, 2004, and by
unanimous written consent of the Compensation Committee of the Board of Directors on
the 3rd day of March, 2005.

	 	 	 	 	 
	

	 	/S/ Russell B. Stevenson, Jr.	 	 
	

	 	Secretary of the Company	 	 

     This Plan, as amended, was duly approved by the stockholders of the Company at a
meeting of the stockholders held on the 16th of March, 2005.

	 	 	 	 	 
	

	 	/S/ Russell B. Stevenson, Jr.	 	 
	

	 	Secretary of the Company	 	 

12

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