EMPLOYMENT AGREEMENT
EXHIBIT
10.1
This
EMPLOYMENT AGREEMENT (the “Agreement”), is entered into
effective as of August 9, 2007 (“Effective Date”), by and between The
DIRECTV Group, Inc., a Delaware corporation (the “Company”), and Xxxxx
Xxxxx (“Executive”).
WHEREAS,
prior to the Effective Date, the Executive has served the Company in an
executive capacity as President and Chief Executive Officer, pursuant to
the
terms of an employment agreement between the Company and the Executive executed
on March 16, 2004 but effective as of January 1, 2004 (the “Prior
Agreement”); and
WHEREAS,
the Company and the Executive desire to continue such employment relationship
and enter into this Agreement, which will, except as otherwise set forth
herein,
supersede the Prior Agreement and set forth the terms and conditions under
which
the Company will continue to employ Executive to render services to the Company
and its affiliates; and
WHEREAS,
the material terms and conditions of Executive's continued employment, as
set
forth in this Agreement, have been approved by the Compensation Committee
(the
“Compensation Committee”) of the Board of Directors of the Company (the
“Board”) and the Board at meetings held on August 8, 2007.
NOW,
THEREFORE, in consideration of the promises and mutual agreements
hereinafter contained, the parties agree as follows:
1. Employment.
Duties and
Acceptance
1.1 Employment
by the Company
. The
Company agrees to continue to employ Executive to render exclusive and full-time
services to the Company and its subsidiaries for the Term of Employment (as
hereinafter defined), subject to the terms of this Agreement. During
the Term of Employment, Executive shall serve as, and his title shall be,
President and Chief Executive Officer of the Company. In such
capacity, the Executive shall have all powers, duties and responsibilities
that
are customary for a president and chief executive officer of a company of
a
similar size, type and nature to the Company, including the power and authority
to supervise and determine the business, affairs and operations of the Company
and its subsidiaries, including the authority to appoint, supervise, and
remove
subordinate officers of the Company and its subsidiaries. During the
Term of Employment, Executive shall have such additional duties, but only
to the
extent consistent with such position, as may be assigned to him from time
to
time by the Board. In such capacity, Executive shall report
exclusively to the Board. In addition, during the Term of Employment,
Executive shall continue to be designated a director of the Company and of
each
material subsidiary of the Company, and shall serve in such capacity or
capacities without additional compensation.
1.2 Acceptance
of Employment by Executive
. Executive
accepts such employment and agrees to devote his full time and attention
as
necessary to fulfill all of the duties of his employment hereunder and shall
render the services described above. Without the prior written
consent of the Company, Executive agrees that he will not, directly or
indirectly, engage in any other business activities or pursuits so long as
he is
performing services for the Company, whether on his own behalf or on behalf
of
any other person, firm or corporation, except for making passive investments
in
accordance with Section 4.1.1 hereof. Notwithstanding the foregoing,
Executive may continue to serve as a director of News Corporation (pending
his
resignation), British Sky Broadcasting Group plc., and Colgate University
and as
a director of such other companies as shall be agreed to by the Nominating
and
Corporate Governance Committee or the Board.
1.3 Place
of Employment
. Executive's
principal place of employment shall be at the Company's offices in New York,
subject to such travel as the rendering of the services hereunder may require,
and shall include working at the Company’s offices in El Segundo,
California.
2. Term
of Employment
. The
term of employment under this Agreement shall be the period commencing on
the
Effective Date and ending on December 31, 2010 (the “Term of
Employment”).
3. Compensation
and Benefits.
2.1 Compensation
. As
compensation for all services to be rendered pursuant to this Agreement,
the
Company shall pay Executive as follows:
2.1.1 Base
Salary
. Executive
shall be paid, on regular pay dates as now in effect or shall then be in
effect
under Company policy, at the rate of $2,222,000 per annum (“Base Salary”)
subject to increase effective as of each January 1 during the Term of
Employment, beginning on January 1, 2008, based on the increase, if any,
in the
Consumer Price Index for all Urban Consumers for the New York City area (or
any
successor Consumer Price Index) based on data published by the Bureau of
Labor
Statistics of the United States Department of Labor for the preceding
year.
2.1.2 Annual
Bonus
. For
each fiscal year ending during the Term of Employment, commencing with the
fiscal year ending December 31, 2007, Executive shall be eligible to receive
an
annual cash bonus (the “Bonus”) pursuant to The DIRECTV Group, Inc.
Amended and Restated Executive Officer Cash Bonus Plan (the “Cash Plan”), based
on the achievement of certain targets related to the performance of the Company
and its subsidiaries (collectively, “DIRECTV”), established with the
approval of the Compensation Committee. If Executive achieves the
target in any such fiscal year, Executive's annual bonus for such fiscal
year
shall be 150% of his Base Salary (the “Target Bonus”), subject to
increase or decrease based on annual performance, as determined by the
Compensation Committee, provided that the maximum Bonus payable to the Executive
for any fiscal year shall not exceed the amount permitted under the Cash
Plan
based upon objective criteria set by the Compensation Committee with respect
to
such fiscal year during the first 90 days of such fiscal year.
2.1.3 Equity
Awards
. Effective
at the close of business on August 13, 2007 (the “Grant Date”), Executive
shall be granted equity awards under The DIRECTV Group, Inc. Amended and
Restated 2004 Stock Plan (the “Stock Plan”) having an aggregate value on
the Grant Date approximately equal to $20 million (determined as described
below), consisting of (a) an award of restricted stock units (the “RSU
Award”) and (b) an award of options for Company common stock (the “Stock
Option Award”), each as described below:
(a) RSU
Award: The RSU Award shall be evidenced by the Performance Stock
Unit Award Agreement substantially in the form approved by the Compensation
Committee (the “Award Agreement”) which shall provide for the issuance of
a target number of restricted Stock Units equal to the amount determined
by
dividing $10 million by the average closing market price on the New York
Stock
Exchange for Company common stock for the 90 days prior to the Grant Date,
and
rounding up to the nearest hundred (100) units.
(b) Stock
Option Award: The Stock Option Award shall be evidenced by the
Non-Qualified Stock Option Agreement substantially in the form approved by
the
Compensation Committee (the “Option Agreement”) which shall provide for
non-qualified options to purchase, at an exercise price equal to the fair
market
value (the closing market price on the New York Stock Exchange) of a share
of
Company common stock on the Grant Date, such number of shares of Company
common
stock as have a Black-Scholes value of $10 million at the Grant Date, using
the
same valuation methodology as used by the Company in its audited financial
statements, rounded up to the nearest hundred (100) shares.
2.2 Employee
Benefit Plans; Perquisites.
2.2.1 Participation
in Employee Benefit Plans. During the Term of Employment,
Executive shall be entitled to participate in all benefit plans or arrangements
presently in effect or hereafter adopted by the Company applicable to executive
officers of the Company, including, but not limited to, any pension, group
medical, dental, disability and life insurance, or other similar benefit
plans.
2.2.2 Perquisites. During
the Term of Employment, the Executive shall be authorized to use the corporate
jet maintained by the Company (if the Company continues to maintain such
corporate jet) as required by Executive and otherwise the Company shall pay,
or
reimburse Executive, for first-class air travel for Executive, as required
in
the performance of his duties hereunder.
2.3 Business
Expenses. During the Term of Employment, the Company shall pay,
or reimburse the Executive for, all expenses reasonably incurred by him in
connection with his performance of his duties hereunder.
3. Termination
of
Employment
3.1 Termination
Due to Death or Disability
.
(a) The
Term
of Employment and Executive’s employment hereunder shall terminate upon
Executive’s death and may be terminated by the Company if Executive suffers a
Disability (as defined on Exhibit A hereto).
(b) Upon
termination of Executive’s employment hereunder for either Disability or death,
Executive or Executive’s estate or beneficiaries (as the case may be) shall be
entitled to receive:
(i) an
amount
equal to Executive’s Base Salary through the last day of the Term of Employment
(determined as if such death or Disability did not occur), payable in a lump
sum
cash payment to the extent permitted under Section 409A of the Internal Revenue
Code of 1986, as amended (the “Code”), and, to the extent not so
permitted, in substantially equal installments, at such times and in such
manner
as is in accordance with the Company’s regular payroll practices;
(ii) payment
of the pro-rated portion of the Target Bonus for the year in which such
termination on account of death or Disability occurs, payable promptly, but
in
no event later than March 15 following the last day of the fiscal year in
which
Executive's termination on account of death or Disability occurred;
(iii) acceleration,
vesting and immediate issuance of 100% of the shares of Company common stock
associated with the RSU Award, at “target”, as provided in the Award
Agreement;
(iv) immediate
acceleration and vesting of the Stock Option Award, with the options to remain
exercisable throughout the period ending on the Expiration Date, as
provided in the Option Agreement; and
(v) such
other or additional benefits to which Executive may be entitled in accordance
with applicable employee benefit plans of the Company.
Following
such termination of
Executive’s employment due to death or Disability, except as set forth in this
Section 4.1(b), Executive shall have no further rights to any compensation
or
any other benefits under this Agreement.
3.2 Termination
by the Company for Cause or by Executive Resignation without Effective
Termination
(a) For
the
purposes of this Agreement, “Cause” and “Effective Termination” shall be as
defined on Exhibit A hereto.
(b) The
Term
of Employment and Executive’s employment hereunder may be terminated by the
Company for Cause and shall terminate automatically upon Executive’s resignation
without Effective Termination; provided that Executive will be required
to give the Company at least 60 days advance written notice of a resignation
without Effective Termination, unless otherwise approved by the
Board. In the event the Company terminates Executive's employment for
Cause or if Executive resigns without Effective Termination, Executive shall
be
entitled to receive only:
(i) Base
Salary through the date of termination;
(ii) any
Target Bonus earned, but unpaid, as of the date of termination for the
immediately preceding fiscal year, and
(iii) such
other or additional benefits to which Executive may be entitled in accordance
with applicable employee benefit plans of the Company.
Following
such termination of
Executive’s employment by the Company for Cause or resignation by Executive
without Effective Termination, except as set forth in this Section 4.2(b),
Executive shall have no further rights to any compensation or any other benefits
under this Agreement.
3.3 Termination
by the Company without Cause or Resignation by the Executive for Effective
Termination
.
(a) The
Term
of Employment and Executive’s employment hereunder may be terminated by the
Company without Cause or by Executive’s resignation for Effective
Termination.
(b) If
Executive’s employment is terminated by the Company without Cause (other than by
reason of death or Disability) or if Executive resigns for Effective
Termination, then subject to Executive’s execution, delivery and non-revocation
of a release of claims against the Company and its affiliates, on a form
reasonably satisfactory to the Company, Executive shall be entitled to receive,
in full discharge of all of the Company's obligations to Executive:
(i) an
amount
equal to the greater of (x) Base Salary and Target Bonus for the balance
of the
Term of Employment and (y) one times Base Salary and Target Bonus, payable
in
substantially equal installments, at such times and in such manner as is
in
accordance with the Company’s regular payroll practices;
(ii) acceleration,
vesting and immediate issuance of 100% of the shares of Company common stock
associated with the RSU Award and with Executive’s 0000 XXX Award, at “target”,
as provided in the Award Agreement;
(iii) immediate
acceleration and vesting of the Stock Option Award, with the options to remain
exercisable throughout the period ending on the Expiration Date, as provided
in
the Option Agreement; and
(iv) such
other or additional benefits to which Executive may be entitled in accordance
with applicable employee benefit plans of the Company.
Following
such termination of Executive’s employment by the Company without Cause (other
than for death or Disability) or resignation by Executive for Effective
Termination, except as set forth in this Section 4.3(b), Executive shall
have no
further rights to any compensation or any other benefits under this
Agreement.
3.4 Continued
Employment Beyond Expiration of the Term of Employment. Unless
the parties otherwise agree in writing, continuation of Executive’s employment
with the Company beyond the expiration of the Term of Employment shall be
deemed
an employment at-will and, except as provided below, shall not be deemed
to
extend any of the terms of this Agreement and Executive’s employment may
thereafter be terminated by either Executive or the Company; provided,
that the provisions of Section 4.1 shall survive any termination of this
Agreement or Executive’s termination of employment hereunder.
(a) Sections
2.1.1, 2.1.2, 2.2, 2.3, and 4.1 hereof shall apply following the expiration
of
the Term of Employment during which Executive is an at-will employee (the
“Post Term Period”).
(b) If,
during the Post Term Period, Executive’s employment is terminated by the Company
for Cause or Executive resigns other than due to an Effective Termination,
Executive will be entitled to such compensation and benefits as set forth
in
Section 3.2(b) of this Agreement.
(c) If,
during the Post Term Period, Executive’s employment is terminated by the Company
without Cause (other than for death or Disability) or Executive resigns due
to
an Effective Termination, in either case prior to Executive’s attainment of age
60, then subject to Executive’s execution, delivery and non-revocation of a
release of claims against the Company and its affiliates, on a form reasonably
satisfactory to the Company, Executive shall be entitled to receive, in full
discharge of all of the Company's obligations to Executive:
(i) an
amount
equal to one times Base Salary and Target Bonus, payable in equal installments
in accordance with the Company’s regular payroll practices; and
(ii) such
other or additional benefits to which Executive may be entitled in accordance
with applicable employee benefit plans of the Company.
Following
such termination of Executive’s at-will employment by the Company following the
expiration of the Term of Employment, except as set forth in this Section
4.4,
Executive shall have no further rights to any compensation or any other benefits
under this Agreement.
3.5 Calculation
of Bonus
. For
purposes of Section 3.1(b)(ii) above, the pro-rated portion of the annual
bonus
referenced in such section shall be determined by multiplying such annual
bonus
by a fraction, the numerator of which shall be the number of days during
such
fiscal year that Executive was employed and the denominator of which shall
be
365.
3.6 No
Mitigation
. If
Executive's employment hereunder is terminated , the Company's payment
obligations shall be absolute and unconditional, Executive shall not be
obligated to mitigate his damages, and there shall be no offset against any
amounts due Executive under this Agreement on account of any remuneration
attributable to any subsequent employment that Executive may
obtain.
3.7 Notice
of Termination. Any purported termination of employment by the
Company or by Executive (other than due to Executive’s death) shall be
communicated by written Notice of Termination to the other party hereto in
accordance with Section 6.1 hereof. For purposes of this Agreement, a
“Notice of Termination” shall mean a notice which shall indicate the specific
termination provision in this Agreement relied upon and shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis
for
termination of employment under the provision so indicated.
3.8 Board/Committee
Resignation. Upon termination of Executive’s employment for any
reason, Executive agrees to resign, as of the date of such termination and
to
the extent applicable, from the Board (and any committees thereof) and the
Board
of Directors (and any committees thereof) of any of the Company’s subsidiaries
or affiliates.
4. Certain
Covenants of
Executive
4.1 Covenants
Against Competition
. Executive
acknowledges that the services to be furnished by Executive hereunder and
the
rights and privileges granted to the Company by Executive are of a special,
unique, unusual, extraordinary and intellectual character which give them
a
peculiar value, the loss of which cannot be reasonably or adequately compensated
in damages in any action at law, and a breach or threatened breach by Executive
of any of the provisions contained in this Section 4.1 will cause the Company
irreparable injury and damage. In order to induce the Company to enter into
this
Agreement, Executive covenants and agrees that:
4.1.1 Non-Compete
. Executive
agrees that, while employed by the Company and thereafter until the later
of (x)
December 31, 2010 and (y) 12 months following any termination of employment,
he
will not, in any manner directly or indirectly, own, manage, operate, join,
control or participate in the ownership, management, operation or control
of, or
be employed by, or connected in any manner with, in any capacity (including,
without limitation, as an employee, consultant, officer, director, partner,
advisor or joint venturer), or provide services to or on behalf of, any
corporation, firm or business, or any affiliate of any corporation, firm
or
business, that directly or indirectly engages in any business which competes
with the Company or any of its affiliates in the multi-channel video programming
distribution business in the United States or in Latin America (whether
satellite, cable, telephone or other method of distribution). The
foregoing does not prohibit Executive’s ownership of less than five percent (5%)
of the outstanding common stock of any company whose shares are publicly
traded
on a national stock exchange, are reported on NASDAQ, or are regularly traded
in
the over-the-counter market by a member of a national securities
exchange.
4.1.2 Code
of Ethics and Business Conduct
. Executive
agrees to abide by the provisions of the Company’s Code of Ethics and Business
Conduct (receipt of which is hereby acknowledged) at all times during his
employment with the Company.
4.1.3 Non-Solicitation. Executive
shall not, while employed by the Company and thereafter until the later of
(x)
December 31, 2010 and (y) 12 months following any termination of employment,
directly or indirectly (i) induce, solicit or attempt to induce or solicit
any
executive, professional or administrative employee of the Company or any
of its
affiliates, to leave the Company or its affiliates or to render services
for any
other person, firm or corporation or (ii) induce or attempt to induce any
key
programming or equipment supplier, or key distributor, to terminate or
materially adversely change its relationship with the Company or any of its
affiliates.
4.1.4 Property
of the Company
. Executive
acknowledges that the relationship between the parties hereto is exclusively
that of employer and employee, and that the Company’s obligations to him are
exclusively contractual in nature. The Company and/or its affiliates
shall be the sole owner or owners of all the fruits and proceeds of Executive’s
services hereunder, including, but not limited to, all ideas, concepts, formats,
suggestions, developments, arrangements, designs, packages, programs, scripts,
audio visual materials, promotional materials, photography and other
intellectual properties and creative works which Executive may prepare, create,
produce or otherwise develop in connection with and during his employment
hereunder, including, without limitation, all copyrights and all rights to
reproduce, use, authorize others to use and sell such properties or works
at any
time or place for any purpose, free and clear of any claims by Executive
(or
anyone claiming under him) of any kind of character whatsoever (other than
Executive’s right to compensation hereunder). Executive agrees that
he will have no right in or to such properties or works and shall not use
such
properties or works for his own benefit or the benefit of any other
person. Executive shall, at the request of the Company, execute such
assignments, certificates, applications, filings, instruments or other
documents, consistent herewith, as the Company may from time to time reasonably
deem necessary or desirable to evidence, establish, maintain, perfect, protect,
enforce or defend its right, title and interest in or to any such properties
or
works.
4.1.5 Confidential
Information
. With
the exception of Executive's personal files, all memoranda, notes, records
and
other documents made or compiled by Executive, or made available to him during
his employment with the Company concerning the business or affairs of the
Company or its affiliates shall be the Company's property and shall be delivered
to the Company on the termination of this Agreement or at any other time
on
request. Executive shall keep in confidence and shall not use for
himself or others, or divulge to others, any information concerning the business
or affairs of the Company or its affiliates which is not otherwise publicly
available and which is obtained by Executive as a result of his employment,
including, but not limited to, trade secrets or processes and information
deemed
by the Company to be proprietary in nature, including, without limitation,
financial information, programming or plans of the Company or its affiliates,
unless disclosure is permitted by the Company or required by law.
4.1.6 Right
to Use Name
. The
Company and its affiliates shall have the right to use Executive's biography,
name and likeness in connection with their business, including in advertising
its products and services, but not for use as a direct or indirect
endorsement.
4.1.7 Cooperation
. Executive
agrees that while employed by the Company and at any time thereafter, he
will
cooperate in the Company's defense or prosecution against any threatened
or
pending litigation or in any investigation or proceeding by any governmental
agency or body (or any appeal from any such litigation, investigation or
proceeding) that relates to any events or actions which occurred during the
Term
of Employment or any Post Term Period.
4.1.8 Survival
. The
covenants set forth above in this Section 5.1 (the “Restrictive
Covenants”) shall survive the termination of this Agreement.
4.2 Severability
of Covenants
. If
any court determines that any of the Restrictive Covenants, or any part thereof,
is invalid or unenforceable, the remainder of the Restrictive Covenants shall
not thereby be affected and shall be given full effect, without regard to
the
invalid portions.
4.3 Blue-Pencilling
. If
any court construes any of the Restrictive Covenants, or any part thereof,
to be
unenforceable because of the duration of such provision or the area covered
thereby, such court shall have the power to reduce the duration or area of
such
provision and, in its reduced form, such provision shall then be enforceable
and
shall be enforced.
5. Executive
Representation. Executive represents and warrants to the Company
that the execution and delivery of this Agreement by Executive and the Company
and the performance by Executive of his duties hereunder shall not constitute
a
breach of, or otherwise contravene, the terms of any employment agreement
or
other agreement or policy to which Executive is a party or otherwise
bound.
6. Other
Provisions
6.1 Notices
. Any
notice or other communication required or which may be given hereunder shall
be
in writing and shall be deemed to have been duly given when delivered by
hand or
overnight courier or two days after it has been mailed by United States express
or registered mail, return receipt requested, postage prepaid, addressed
to the
respective addresses set forth below:
|
(a) If
to the Company, to:
|
The
DIRECTV Group, Inc.
0000
X. Xxxxxxxx Xxxxxxx
Xx
Xxxxxxx, XX 00000
Attention:
Corporate Secretary
Telecopy:
(000) 000-0000
|
|
(b) If
the Executive, to:
|
Xxxxx
Xxxxx
00
Xxxxxxxxxxx Xxxx
Xxx
Xxxxxx, XX 00000
|
Such
addresses may be changed by written notice sent to the other party at the
last
recorded address of that party. Notice of change of address shall be
effective only upon receipt.
6.2 Entire
Agreement. This Agreement contains the entire understanding of
the parties with respect to the employment of Executive by the
Company. There are no restrictions, agreements, promises, warranties,
covenants or undertakings between the parties with respect to the subject
matter
herein other than those expressly set forth herein. This Agreement
supersedes all prior agreements and understandings (including verbal agreements)
between Executive and the Company and/or its affiliates regarding the terms
and
conditions of Executive’s employment with the Company and/or its affiliates
including, without limitation, the Prior Agreement. The 2004 Stock
Plan Performance Stock Unit Award Agreement dated as of March 16, 2004, and
the
2004 Stock Plan Non-Qualified Stock Option Agreement dated as of March 16,
2004
between the Company and Executive, shall each remain in effect in accordance
with their respective terms, except that references in each such agreement
to
the “Employment Agreement” shall mean this Agreement, rather than the Prior
Agreement.
6.3 Waivers
and Amendments
. This
Agreement may be amended, modified, superseded, canceled, renewed or extended,
and the terms and conditions hereof may be waived, only by a written instrument
signed by the parties or, in the case of a waiver, by the party waiving
compliance. No delay on the part of any party in exercising any
right, power or privilege hereunder shall operate as a waiver thereof, nor
shall
any waiver on the part of any party of any right, power or privilege hereunder,
nor any single or partial exercise of any right, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege hereunder.
6.4 Governing
Law; Consent to Jurisdiction
. This
Agreement shall be governed by and construed in accordance with the laws
of the
State of New York applicable to agreements made within the State of New York,
without regard to its conflict of law rules which are deemed applicable
herein. The parties hereto agree that any controversy which may arise
under this Agreement or out of the relationship established by this Agreement
would involve complicated and difficult factual and legal issues and that,
therefore, any action brought by the Company against Executive or brought
by
Executive, alone or in combination with others, against the Company, whether
arising out of this Agreement or otherwise, shall be determined by a judge
sitting without a jury.
6.5 Assignment
. This
Agreement and the Executive's rights and obligations hereunder may not be
assigned by Executive. Any purported assignment or delegation by
Executive in violation of the foregoing shall be null and void ab initio
and of
no force and effect. The Company may assign this Agreement and its
rights, together with its obligations hereunder, to an affiliate of the Company
or to a person or entity which is a successor in interest to substantially
all
of the business operations of the Company. Upon such assignment, the
rights and obligations of the Company hereunder shall become the rights and
obligations of such affiliate or successor person or entity.
6.6 Successors;
Binding Agreement. This Agreement shall inure to the benefit of
and be binding upon personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and
legatees.
6.7 Section
409A of the Code. Notwithstanding anything herein to the
contrary, (i) if, at the time of the Executive’s termination of employment with
the Company, the Executive is a “specified employee” as defined in Section 409A
of the Code, and the deferral of the commencement of any payments or benefits
otherwise payable hereunder as a result of such termination of employment
is
necessary in order to prevent the imposition of any accelerated or additional
tax under Section 409A of the Code, then the Company will defer the commencement
of the payment of any such payments or benefits hereunder (without any reduction
in such payments or benefits ultimately paid or provided to the Executive)
until
the date that is six months following the Executive’s termination of employment
with the Company (or the earliest date as is permitted under Section 409A
of the
Code) and (ii) if any other payments of money or other benefits due to the
Executive hereunder would cause the application of an accelerated or additional
tax under Section 409A of the Code, such payments or other benefits shall
be
deferred if deferral will make such payment or other benefits compliant under
Section 409A of the Code, or otherwise such payment or other benefits shall
be
restructured, to the extent possible, in a manner, determined by the
Compensation Committee or the Board, that does not cause such an accelerated
or
additional tax or result in an additional cost to the Company. The
Company shall consult with its legal counsel and tax accountants in good
faith
regarding the implementation of the provisions of this Section 7.7, which
shall
be done only in a manner that is reasonably acceptable to the Executive;
provided, however, that neither the Company, any subsidiary or other
affiliate of the Company, nor any of their employees or representatives shall
have any liability to the Executive with respect thereto.
6.8 Withholding
Taxes. The Company may withhold from any amounts payable under
this Agreement such Federal, state and local taxes as may be required to
be
withheld pursuant to any applicable law or regulation.
6.9 Counterparts
. This
Agreement may be executed in two or more counterparts, each of which shall
be
deemed an original but all of which together shall constitute one and the
same
instrument.
6.10 Headings
. The
headings in this Agreement are for reference purposes only and shall not
in any
way affect the meaning or interpretation of this Agreement.
IN
WITNESS WHEREOF, the parties have executed this Agreement on the
Effective Date, after approval of this Agreement by the Compensation Committee
and the Board of Directors of the Company, with effect as of the Effective
Date.
THE
DIRECTV GROUP, INC.
By:
/s/ Xxxxxxx X.
Xxx
Name: Xxxxxxx
X. Xxx
Title: Chairman
of the Compensation Committee
/s/
Xxxxx Xxxxx
Xxxxx
Xxxxx
Exhibit
A
DEFINITIONS
“Cause”
shall mean: (i) Executive’s willful and continued failure to perform his
material duties with respect to the Company as provided hereunder (other
than
due to Disability); (ii) the commission of any fraud, misappropriation or
misconduct by Executive that causes demonstrable material injury, monetarily
or
otherwise, to the Company or any affiliate; (iii) Executive’s conviction of, or
plea of guilty or nolo contendere to, a felony; (iv) the failure by
Executive to comply, in any material respect, with any applicable restrictive
covenants; or (v) the failure by Executive to comply with any other undertaking
set forth in his employment agreement or any other agreement Executive has
with
the Company or any affiliate or any breach by Executive thereof, if such
failure
or breach is reasonably likely to result in a demonstrable material injury
to
the Company or any affiliate, in each case, that is not cured, to the extent
curable, within 30 days of written notice from the Company
or otherwise satisfactorily explained.
The
cessation of employment of Executive shall not be deemed to be for Cause
unless
and until there shall have been delivered to Executive a copy of a resolution
duly adopted by the affirmative vote of seventy-five percent (75%) of the
entire
membership of the Board (excluding, however, Executive, to the extent he
is a
member of the Board at such time) at a meeting of the
Board called and held for such purpose (after reasonable notice is provided
to
Executive and Executive is given an opportunity, together with counsel, to
be
heard before the Board) finding that, in the good faith opinion of the Board,
Cause exists and specifying the particulars thereof in detail.
“Disability”
shall mean Executive’s inability to perform all of his material duties under the
Agreement for more than 180 days in any 360 day period as a result of physical
or mental incapacity or illness which is reasonably likely to continue
indefinitely. Any question as to the existence of the Disability of
Executive as to which Executive and the Company cannot agree shall be determined
in writing by a qualified independent physician mutually acceptable to Executive
and the Company. If Executive and the Company cannot agree as to a
qualified independent physician, each shall appoint such a physician and
those
two physicians shall select a third who shall make such determination in
writing. The determination of Disability made in writing to Executive
and the Company shall be final and conclusive for all purposes of the
Agreement.
“Effective
Termination” shall mean the occurrence of any of the following,
without Executive’s consent: (i) Executive is required to report to any person
or group, other than the Board or the Board is not the Board of Directors
of a
public company; (ii) a reduction in Executive’s base salary or bonus
opportunity; (iii) the assignment to Executive by the Company of duties
inconsistent with, or the significant reduction of the titles, powers, duties
and functions associated with his positions, titles or offices; or (iv) the
relocation of Executive’s principal office to a location more than 50 miles from
the New York City or Los Angeles metropolitan area; provided, that any
of the events described in clauses (i) – (iv) above shall constitute an
Effective Termination only if the Company fails to cure such event within
30
days after receipt from Executive of written notice of the event which
constitutes an Effective Termination; and provided further, that
Executive shall cease to have a right to terminate due to Effective Termination
on the 60th day
following the later of the occurrence of the event or Executive’s knowledge
thereof, unless he ha
