EXHIBIT 10.50
MAGELLAN INTERNATIONAL, INC.
April 7, 1997
Xxxxxx Electronics Corporation
0000 Xxxxxx Xxxxxxx
Xxxx. X00
Xxx Xxxxxxx, XX 00000-0000
Attention: Xxxxxxx X. Xxxxx, Vice Chairman
and Chief Financial Officer
Xx. Xxxxxxx X. Xxxxxx
c/x Xxxxxx Electronics Corporation
0000 Xxxxxx Xxxxxxx
Xxxx. X00
Xxx Xxxxxxx, XX 00000-0000
RE: TERMS OF ASSIGNMENT OF XXXXXXX X. XXXXXX ("EXECUTIVE") TO PANAMSAT
CORPORATION
Gentlemen:
This letter will confirm the agreements among Magellan International, Inc.
(to be known as PanAmSat Corporation) ("PanAmSat"), Xxxxxx Electronics
Corporation ("Xxxxxx") and the Executive concerning the Executive's employment
by Xxxxxx and his assignment to PanAmSat. Pursuant to an agreement (the
"Reorganization Agreement") dated September 20, 1996 among Xxxxxx
Communications, Inc. and certain of its affiliates ("HCI"), PanAmSat and a
corporation named PanAmSat Corporation which is to be renamed PanAmSat
International Systems, Inc. ("OldPAS"), the parties will engage in a business
combination (the "Transaction") which will result in the acquisition by PanAmSat
of all the issued and outstanding stock of OldPAS and certain assets of HCI
comprising the Galaxy Business, as defined in the Reorganization Agreement. It
is the desire of the parties that the Executive serve PanAmSat as its Executive
Vice President and Chief Financial Officer, and it is the intention of the
parties that the Executive shall ultimately be employed by PanAmSat in such
capacity. For an interim period of time, it is in the interests of the parties
that the Executive continue to be employed by Xxxxxx and assigned on a full-time
basis to PanAmSat as provided below. Accordingly, it is agreed as follows:
1. EMPLOYMENT OF EXECUTIVE BY XXXXXX AND ASSIGNMENT TO PANAMSAT. Xxxxxx
agrees to assign to PanAmSat, and PanAmSat agrees to accept from Xxxxxx, the
full-time services of the Executive who will hold the office and title of
Executive Vice President and Chief Financial Officer of PanAmSat. During the
term of this Agreement, Executive shall
April 7, 1997 Page 2
continue to be an employee of Xxxxxx, shall be maintained on the payroll of
Xxxxxx and, except as provided herein, shall be maintained on the benefits
programs of Xxxxxx, shall be under the sole direction and control of PanAmSat
and shall report directly to the President and Chief Executive Officer.
Executive accepts the assignment to PanAmSat, will devote all of his business
time and energy to the duties of the office of Executive Vice President and
Chief Financial Officer other than transition matters for HE as agreed to from
time to time by the Chief Executive Officer of PanAmSat, and will be located in
the offices of PanAmSat at Greenwich, Connecticut.
2. TERM. This Agreement shall commence on the closing of the Transaction
and shall continue for a period not to exceed one year (the "Term"). At any
time during the Term, the Executive may elect by written notice to Xxxxxx and
PanAmSat to terminate this assignment and to be employed by PanAmSat directly,
which notice shall be effective on the first day of the next succeeding pay
period. If the assignment of Executive is in effect upon the expiration of the
Term, subject to Section 5, the Executive shall be transferred to the employ of
PanAmSat as provided below and this Agreement shall terminate and expire. The
assignment of Executive to PanAmSat hereunder and any subsequent employment of
Executive by PanAmSat shall be terminable by either party for any reason or no
reason.
3. BASE COMPENSATION AND BENEFITS. PanAmSat shall pay to Xxxxxx monthly
during the Term an amount equal to the following:
a. The sum of $23,222, representing one-twelfth of an annual base salary
of $280,000 (as same may be adjusted upwards by the Compensation Committee of
PanAmSat's Board of Directors at such time as the salaries of other executive
officers of PanAmSat are adjusted);
b. An amount equal to the lesser of (i) Xxxxxx' monthly cost of
providing medical and health insurance, life/disability insurance and other
welfare benefits ("Welfare Benefits") to Executive or (ii) the amount which
PanAmSat would have paid if Executive had elected to receive all Welfare
Benefits for which he would have been eligible had he been a direct employee of
PanAmSat;
c. The amount which Xxxxxx pays into any retirement plan for the benefit
of the Executive as a match against Executive's contribution, not to exceed 4%
of Executive's compensation. Following Executive's direct employment by
PanAmSat, Executive will participate in PanAmSat's 401(k) plan; and
d. All direct expenses paid by Xxxxxx in respect of Executive's
employment, such as the employer's contribution for FICA.
Additionally, PanAmSat will reimburse Xxxxxx for all costs paid by Xxxxxx
in connection with the relocation of Executive to Connecticut consistent with
PanAmSat's relocation policy, a copy of which is attached to this letter as
Exhibit A (the "Relocation
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April 7, 1997 Page 3
Policy"), subject to a limit of $100,000. All expenses of Executive in excess of
$100,000 under the Relocation Policy as administered by PanAmSat shall be paid
by Xxxxxx.
Executive's business travel and entertainment expenses incurred in the service
of PanAmSat will be paid or reimbursed directly to Executive upon presentation
of expense reports in accordance with PanAmSat's business expense policies.
4. BONUS COMPENSATION; STOCK OPTIONS; RESIDUAL XXXXXX' PLANS.
4.1 PanAmSat Plans. In addition to the sums payable to Xxxxxx under
Section 3 above, PanAmSat shall make a payment to Xxxxxx for the account of the
Executive equal to the amount which would have been paid to Executive if he had
been employed by PanAmSat under PanAmSat's annual incentive plan ("AIP")
applicable to executive officers of PanAmSat for the calendar year 1997, which
payment will be made at the same time as PanAmSat pays bonuses to its executive
officers for 1997. It is anticipated that the target bonus for Executive under
the AIP for 1997 would be $160,000. Xxxxxx will pay any bonus paid to it by
PanAmSat to the Executive. If Executive becomes an employee of PanAmSat during
1998, he will be eligible to participate in the AIP for the entire calendar year
as if he had been an employee from January 1, 1998. Additionally, PanAmSat
shall make an initial award as of the closing of the Transaction of stock
options to Executive directly, as an independent contractor, for 25,000 shares
of PanAmSat common stock which shall be exercisable at the price and upon the
same terms and conditions as shall be applicable to options granted to other
senior executives of PanAmSat as of the closing of the Transaction.
Notwithstanding the foregoing, all stock options so granted to Executive shall
terminate in the event Executive ceases to serve as Executive Vice President and
Chief Financial Officer of PanAmSat.
4.2 Xxxxxx Plans. The parties acknowledge that Executive has residual
benefits under the following Xxxxxx plans which relate to his employment by
Xxxxxx prior to the closing of the Transaction:
a. Stock options for the purchase of GMH stock;
b. Payments under the long term achievement plan ("LTAP") of Xxxxxx
which will be made in 1998, 1999 and 2000 in respect of awards made in 1995,
1996 and 1997 (prior to the closing of the Transaction).
The benefits described in clauses a. and b. of this Section 4.2 shall survive
the execution of this Agreement and Executive's employment with PanAmSat, but
shall terminate in accordance with the plans in the event Executive ceases to be
employed by Xxxxxx or any of its affiliates or PanAmSat. Other than the awards
and incentives referred to in this Section and other than the compensation
referred to in Section 3 of this Agreement, Xxxxxx will not grant further
compensation, bonuses, incentives or awards to Executive following the closing
of the Transaction or with respect to any period during the Term of this
Agreement or Executive's subsequent employment by PanAmSat.
April 7, 1997 Page 4
5. EMPLOYMENT OF EXECUTIVE BY PANAMSAT. Unless Executive or PanAmSat has
given 30 days' written notice to the other that employment with PanAmSat will
not commence upon the expiration of the Term, then upon the expiration of the
Term, executive shall become an employee of PanAmSat and shall be paid a salary
at an annual rate equal to the annual rate in effect under Section 3a.
Additionally, Executive shall be eligible for participation in all plans and
benefits maintained by PanAmSat for its executive officers including, but not
necessarily limited to the AIP, stock option plan, deferred compensation plan,
401(k) retirement plan and Welfare Benefits.
6. MISCELLANEOUS.
6.1 This Agreement shall be governed by and construed in accordance with
the laws of the State of Connecticut.
6.2 This Agreement constitutes the entire agreement of the parties
concerning its subject matter and all prior agreements and understandings,
whether oral or in writing, are merged herein and superseded hereby. This
Agreement shall be binding upon and enure to the benefit of the parties and
their permitted successors and assigns and may be amended only by a written
instrument signed by the parties.
6.3 This Agreement is personal to the parties and may not be assigned or
delegated without the express written consent of the parties.
6.4 This Agreement may be signed in counterparts all of which when taken
together shall constitute one Agreement.
6.5 If any provision of this Agreement is determined to be illegal or
unenforceable, such provision shall not affect the legality or enforceability of
the remaining provisions, it being the intention of the parties that each
provision is severable from each other provision.
If the foregoing terms and conditions re acceptable, please sign a copy of
this letter where indicated and return it to the undersigned whereupon this
letter shall be a binding agreement between us.
Very truly yours,
MAGELLAN INTERNATIONAL,
INC.
By /s/ Xxxxxxx X. Xxxxx
--------------------
Accepted and agreed to this April 18, 1997
April 7, 1997 Page 5
XXXXXX ELECTRONICS CORPORATION
By /s/ Xxxxxx X. Xxxxx
----------------------------------------
Agreed to and accepted this April 9, 0000
Xxxxxxx X. Xxxxxx
-----------------------------------------
Xxxxxxx X. Xxxxxx
