EXHIBIT 10.47
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This Amended and Restated Employment Agreement (the "Agreement") by and
between Motient Corporation, a corporation organized under the laws of the State
of Delaware ("Company"), and Xxxxxx Xxxxxxx ("Employee") is hereby entered into
effective as of March 8, 2006, and amends and restates the Employment Agreement
entered into as of November 21, 2005 (the "Effective Date").
RECITALS
WHEREAS, the Company desires to employ Employee as Vice President,
General Counsel and Secretary of the Company (or, at the discretion of the
Company, as Vice President, General Counsel and Secretary of TerreStar Networks
Inc. ("TerreStar") and Motient Communications Inc. ("Communications")), and
Employee desires to accept employment with the Company as such (or, at the
discretion of the Company, as Vice President, General Counsel and Secretary of
TerreStar and Communications) all on the terms and conditions set forth in this
Agreement; and
NOW, THEREFORE, in consideration of the mutual promises, terms,
covenants and conditions set forth herein and the performance of each, it is
hereby agreed as follows:
AGREEMENTS
1. Employment and Duties.
(a) The Company hereby employs Employee as Vice President, General
Counsel and Secretary of the Company to be headquartered in Lincolnshire,
Illinois. As such, Employee shall have responsibilities, duties and authority
reasonably accorded to, expected of, and consistent with Employee's position as
the Vice President, General Counsel and Secretary. Employee hereby accepts this
employment upon the terms and conditions herein contained and, subject to
paragraph 1(c), agrees to devote substantially all of his time, attention and
efforts to promote and further the business and interests of the Company and its
subsidiary entities (including joint ventures) or any other entity within the
current or future ownership structure. Employee agrees and acknowledges that the
Company may designate Employee as Vice President, General Counsel and Secretary
of TerreStar and Communications rather than as Vice President, General Counsel
and Secretary of the Company; provided that the Company shall do so in the event
that the Company's investment in TerreStar becomes the Company's primary asset,
or in the event that the Company merges with or into TerreStar. In such event,
Employee shall receive compensation (including but not limited to salary, bonus
and stock option grants) equivalent to other TerreStar Senior Vice Presidents,
without regard to past compensation paid to Employee, and without prejudice to
any term of this Agreement more favorable to Employee than such TerreStar
compensation package.
(b) The Company and Employee agree that this Agreement may be assigned
to any majority-owned subsidiary of the Company or any other majority-owned
entity (in either case, and including any successor in interest through merger
or otherwise, the "Successor Employer") within the current or future ownership
structure. In the event of any such assignment, the Company and the Successor
Employer shall each be directly and jointly and severally responsible for the
timely and full satisfaction of all obligations of the Company as set forth in
this Agreement. References to the Company shall include and also mean each
Successor Employer.
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(c) Subject to the specific terms of this Agreement, Employee shall
faithfully adhere to, execute and fulfill all lawful policies established by the
Company.
(d) Employee shall not, during the term of his employment hereunder,
engage in any other business activity pursued for gain, profit or other
pecuniary advantage. The foregoing limitations shall not be construed as
prohibiting Employee from making personal investments in such form or manner as
will neither require his services in the operation or affairs of the companies
or enterprises in which such investments are made.
2. Compensation. For all services rendered by Employee, the Company
shall pay to Employee the following compensation:
(a) Base Salary. The base salary payable to Employee during the term
shall be not less than $175,000 per year, payable in accordance with the
Company's normal payroll procedures, but not less frequently than monthly. Such
base salary will be increased by four (4%) percent annually during the term of
this Agreement and may be increased by a larger amount from time to time, at the
discretion of the Company's Board of Directors in light of the Employee's
position, responsibilities and performance, and, as increased from time to time,
may not be reduced.
(b) Benefits. Employee shall be entitled to retirement and health and
welfare benefits as provided by the Company from time to time to, and on a basis
which is as least as favorable as that provided to, other similarly situated
employees of the Company.
(c) Performance Bonus. Employee shall be entitled to Performance
Bonuses as follows:
(i) For 2005, Employee shall be paid a Performance Bonus of $89,300,
which amount the Company acknowledges and agrees that Employee has earned by
services rendered by Employee to the Company through (and including) the
Effective Date and that the payment of such amount is unconditional. The
aforesaid amount shall be paid to the Employee on the first to occur of: (1) the
Closing (as defined below); (2) termination of Employee's employment, without
regard to whether such termination is effected by the Employee or the Company,
is effected with or without Cause or Good Reason (as discussed below), or does
or does not entitle Employee to Severance Payment (as discussed below); or (3)
December 31, 2005.
(ii) Employee will be eligible to receive for each Company fiscal year
after 2005 a performance bonus of up to a maximum of thirty-five percent (35%)
of Base Salary upon the achievement of performance goals to be established in a
Bonus Plan at a later date (or based upon the achievement of other Company-wide
performance objectives established by the Company, if no such Bonus Plan
exists).
(d) Vacation/Holidays. Employee is entitled to paid time off ("PTO"),
pursuant to the policies of the Company then in place; provided that such amount
of PTO shall not be less than twenty (20) days per annum.
(e) Deferrals. The Company shall not take or fail to take any action,
which action or failure to act, either alone or together with other facts and
conditions, would result in adverse tax treatment of the Employee under Section
409A of the Internal Revenue Code of 1986, as amended (the "Code"), and the
Treasury regulations thereunder. This shall include, but shall not be limited
to, the deferral of payments or other events as necessary to comply with Section
409A(a)(2)(B) of the Code, to the extent applicable.
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3. Term; Termination; Rights on Termination; Severance Payment.
(a) The term of this Agreement shall begin on the Effective Date and
continue for two (2) years. The term shall be automatically extended each year
for another twelve months, unless either party gives notice three (3) months in
advance of its termination date of his or its intent to terminate the Agreement,
or unless terminated sooner as specifically provided herein.
(b) This Agreement and Employee's employment may be terminated in any
of the following ways:
(i) Death. The death of Employee shall immediately terminate this
Agreement and no Severance Payment as defined below will be due Employee's
estate;
(ii) Disability. If Employee becomes entitled to receive benefits under
an insured long-term disability plan of the Company that includes its officers,
either the Employee or the Company may terminate Employee's employment hereunder
with no Severance Payment due Employee;
(iii) By Company with Cause. The Company may terminate this Agreement
and Employee's employment upon written notice to Employee for "Cause," which
shall be: (1) Employee's willful failure in the performance or nonperformance of
any of Employee's duties and responsibilities hereunder; (2) Employee's
dishonesty or fraud with respect to the business, reputation or affairs of the
Company; (3) Employee's conviction of a felony crime involving moral turpitude;
or (4) Employee's willful failure to abide by any substantial lawful policy or
directive of the Company. Employee's absence during a required or permitted
leave of absence shall not constitute Cause. The Company recognizes that the
audit committee of the board of directors of the Company has investigated
certain matters that are substantially similar to ongoing litigation in Delaware
initiated by affiliates of Xxxxx Xxxxxxx. Based on this investigation, the
Company hereby agrees that no wrongdoing has occurred with respect to the
allegations in such lawsuits, and in no event shall such allegations give rise
to a termination of the Employee for "Cause." Prior to termination of Employee
for "Cause" pursuant to clauses (1) or (4) above, Company shall, to the extent
reasonably practicable, grant Employee five (5) business days' written notice to
cure any defect giving rise to such "Cause". In the event of a termination for
Cause, Employee shall have no right to receive any Severance Payment, as defined
below;
(iv) By Company Without Cause. The Company may terminate this Agreement
and Employee's employment without Cause upon written notice to Employee. In the
event of a termination by the Company Without Cause, the Employee will be
entitled to any Severance Payment as defined below;
(v) By Employee Without Good Reason. Employee may, without Good Reason
(as hereinafter defined), resign or otherwise terminate this Agreement and
Employee's employment effective upon written notice is provided to the Company.
If Employee resigns or otherwise terminates his employment without Good Reason,
Employee shall have no right to receive any Severance Payment as defined below;
and
(vi) By Employee for Good Reason. Employee shall have "Good Reason" to
terminate his employment hereunder upon the occurrence of any of the following
events, unless Employee agrees in a writing executed contemporaneously with or
after the occurrence of the event that it shall not constitute "Good Reason":
(1) Employee is demoted by means of a material reduction in authority,
responsibilities or duties to a position of less stature or importance within
the Company than the position described in paragraph 1(a) hereof, (2) Employee
terminates his employment (for any reason) within ninety (90) days following a
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Change of Control (as defined below), (3) Employee is required to work from a
location not in the greater Chicago area for an average of more than three days
per week, including travel time to and from such location, over the course of
any calendar month, or (4) any breach by Company of the terms of this Agreement.
Prior to termination of employment for "Good Reason" pursuant to clauses (1),
(3) or (4) above, Employee shall be required to grant Company five (5) business
days' written notice to cure the event or condition giving rise to such "Good
Reason." In the event the Employee terminates his employment for Good Reason,
Employee will be entitled to Severance Payment as defined below.
(vii) Change of Control. A "Change of Control" means the occurrence of
any of the following events; provided that in no event shall the Closing
(hereinafter defined) constitute a Change of Control:
(1) any person or group of persons (as defined in Section 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended and in effect from time
to time (the "Exchange Act")) (other than persons who are stockholders of the
Company immediately prior to the transaction) together with its affiliates,
excluding employee benefit plans of the Company, is or becomes, directly or
indirectly, the "beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act) of securities of the Company representing 40% or more of the combined
voting power of the Company's then outstanding securities;
(2) the dissolution or liquidation of the Company or a merger,
consolidation, or reorganization of the Company with one or more other entities
in which the Company is not the surviving entity, or the sale of substantially
all of the assets of the Company to another person or entity;
(3) any transaction (including without limitation a merger or
reorganization in which the Company is the surviving entity) which results in
any person or entity (other than persons who are shareholders of the Company or
affiliates immediately prior to the transaction) owning more than 50% of the
combined voting power of all classes of securities/interests of the Company; or
(4) individuals who at the beginning of any two-year period constitute
the board of directors, plus new directors of the Company whose election or
nomination for election by the Company's shareholders is approved by a vote of
at least two-thirds of the directors of the Company still in office who were
directors of the Company at the beginning of such two-year period, cease for any
reason during such two-year period to constitute at least two-thirds of the
members of the board of directors.
(c) As used herein, "Severance Payment" shall mean the product of x and
y, where:
"x" means the remainder of twenty-four (24) after subtracting the lesser
of (i) twelve (12) or (ii) the number of whole months from the Effective Date to
the date Employee's employment under this Agreement is terminated for any
reason, and
"y" means the sum of (i) the Employee's monthly base salary (as in
effect on the date of the termination of employment giving rise to the Severance
Payment), (ii) the total amount of bonus (both Performance and Discretionary
Bonus) paid to Employee under this Agreement, divided by the number of whole
months from the Effective Date to the date Employee's employment under this
Agreement is terminated, and (iii) $610 (which amount (1) shall be increased by
twelve (12%) percent each year on the anniversary of the Effective Date, and (2)
as adjusted, is intended to compensate Employee for the approximate monthly
value of employee benefits lost by Employee due to the termination).
(d) Upon termination of this Agreement for any reason provided above, in
addition to the above payments, if any, Employee shall be entitled to receive
all compensation earned and all benefits and reimbursements due through the
effective date of termination. All other rights and obligations of the Company
and Employee under this Agreement shall cease as of the effective date of
termination, except that the Employee's obligations under paragraphs 7, 8, 9,
and 10 herein shall survive such termination if applicable in accordance with
their terms.
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(e) Unless otherwise required by paragraph 2(e), the Severance Payment
shall be paid to Employee in a single lump sum by no later than ten (10) days
following the termination giving rise to such Severance Payment.
4. Existing Motient Options. As of the Effective Date, Employee is the
holder of certain outstanding and unexpired compensatory options (the "Existing
Motient Options") entitling Employee to purchase shares of common stock of the
Company. To the extent the terms of the Existing Motient Options do not already
so provide, the Company agrees to amend them (without any other changes or
amendments to the detriment of Employee's rights thereunder) so that as of and
after the Effective Date:
(a) The vesting of Employee's right to exercise the Existing Motient
Options and his rights to the underlying stock to be acquired under the Existing
Motient Options shall be accelerated so that Employee shall become fully vested
in all such rights as of the first of the following to occur:
(i) the Closing, as defined below;
(ii) a Change of Control, as defined in this Agreement; or
(iii) the Employee becoming entitled to a Severance Payment under this
Agreement.
The Company currently anticipates entering into one or more
transactions that would serve to create two distinct public entities, one of
which would control TerreStar and one of which would control Mobile Satellite
Ventures LP ("MSV"), by way of merger, acquisition, sale, spin-off or other
strategic transaction. As used herein, the term "Closing" shall refer to the
closing of such transaction(s).
(b) The expiration of the Existing Motient Options following the
termination of this Agreement for or upon any reason other than for Cause and,
in turn, the Employee's right to exercise each of his Existing Motient Options,
shall be extended until the later of:
(i) the fifteenth (15th) day of the third month following the date on
which the Existing Motient Option would have otherwise expired, or
(ii) December 31 of the calendar year in which the Existing Motient
Option would have otherwise expired.
5. Existing TerreStar Options. As of the Effective Date, Employee is
the holder of certain outstanding and unexpired compensatory options ("Existing
TerreStar Options") granted pursuant to the TerreStar Networks Inc. 2002 Stock
Incentive Plan, which, subject to vesting, entitle Employee to purchase shares
of common stock of TerreStar Networks Inc. ("TerreStar"). To the extent the
terms of the Existing TerreStar Options do not already so provide, the Company
agrees to cause the amendment of such options (without any other changes or
amendments to the detriment of Employee's rights thereunder) so that as of and
after the Effective Date:
(a) The vesting of Employee's right to exercise the Existing TerreStar
Options and his rights to the underlying share of TerreStar stock to be acquired
under such options shall be accelerated so that Employee shall become fully
vested in all such rights as of the first of the following to occur:
(i) the Closing, as defined in this Agreement;
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(ii) a Change of Control, as defined in this Agreement; or
(iii) the Employee becoming entitled to a Severance Payment under this
Agreement.
(b) The expiration of the Existing TerreStar Options following the
termination of this Agreement for or upon any reason other than termination for
Cause and, in turn, the Employee's right to exercise each of his Existing
TerreStar Options, shall be extended until the later of:
(i) the fifteenth (15th) day of the third month following the date on
which the Existing TerreStar Option would have otherwise expired, or
(ii) December 31 of the calendar year in which the Existing TerreStar
Option would have otherwise expired.
6. Motient Stock. As of the Effective Date, the Company shall grant to
Employee pursuant to the Motient Corporation 2004 Restricted Stock Plan 15,000
restricted shares of common stock of the Company (the "Motient Restricted
Shares"), which under the term of the grant, shall vest as of the Closing.
Employee and the Company hereby agree that the Closing would constitute a Change
of Control, as such term is defined in the Restricted Stock Agreement. Except
for those items to be completed when the necessary information is available
(including the grant number and date of grant), the Restricted Stock Agreement
containing the terms and conditions of the grant of the Motient Restricted
Shares shall be identical in substance, and substantially similar in form, to
Exhibit A, attached hereto and incorporated by reference.
7. Return of Company Property. All records, designs, patents, business
plans, financial statements, manuals, memoranda, lists and other property
delivered to or compiled by Employee by or on behalf of the Company or its
representatives, vendors or customers which pertain to the business of the
Company shall be and remain the property of the Company and be subject at all
times to its discretion and control. Likewise, all correspondence, reports,
records, charts, advertising materials and other similar data pertaining to the
business, activities or future plans of the Company or which is collected by
Employee shall be delivered promptly to the Company without request by it upon
termination of Employee's employment.
8. Inventions. Employee shall disclose promptly to the Company any and
all significant conceptions and ideas for inventions, improvements and valuable
discoveries, whether patentable or not, which are conceived or made by Employee,
solely or jointly with another, during the period of employment or within one
year thereafter, if conceived during employment, and which are directly related
to the business of the Company and which Employee conceives as a result of his
employment by the Company. Employee hereby assigns and agrees to assign all his
interests therein to the Company or its nominee. Whenever requested to do so by
the Company, Employee shall execute any and all applications, assignments or
other instruments that the Company shall deem necessary to apply for and obtain
letters patent of the United States or any foreign country or to otherwise
protect the Company's interest therein.
9. Trade Secrets. Employee agrees that he will not, during or after the
term of this Agreement, disclose the specific terms of the Company's
relationships or agreements with their significant vendors or customers or any
other significant and material trade secret of the Company, whether in existence
or proposed, to any person, firm, partnership, corporation or business for any
reason or purpose whatsoever, and except as required to be disclosed under
applicable securities or other laws, or as such terms or secrets are otherwise
in the public domain independent of any actions taken by Employee.
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10. Confidentiality.
(a) Employee acknowledges and agrees that all Confidential Information
(as defined below) of the Company is confidential and a valuable, special and
unique asset of the Company that gives the Company an advantage over its actual
and potential, current and future competitors. Employee further acknowledges and
agrees that Employee owes the Company a fiduciary duty to preserve and protect
all Confidential Information from unauthorized disclosure or unauthorized use,
that certain Confidential Information constitutes "trade secrets" under
applicable laws and, that unauthorized disclosure or unauthorized use of the
Company's Confidential Information would irreparably injure the Company.
(b) Both during the term of Employee's employment and after the
termination of Employee's employment for any reason (including wrongful
termination), Employee shall hold all Confidential Information in strict
confidence, and shall not use any Confidential Information except for the
benefit of the Company, in accordance with the duties assigned to Employee.
Employee shall not, at any time (either during or after the term of Employee's
employment), disclose any Confidential Information to any person or entity
(except other employees of the Company who have a need to know the information
in connection with the performance of their employment duties), or copy,
reproduce, modify, decompile or reverse engineer any Confidential Information,
or remove any Confidential Information from the Company's premises, without the
prior written consent of the Board of Directors of the Company, or permit any
other person to do so. Employee shall take reasonable precautions to protect the
physical security of all documents and other material containing Confidential
Information (regardless of the medium on which the Confidential Information is
stored). This Agreement applies to all Confidential Information, whether now
known or later to become known to Employee.
(c) Upon the termination of Employee's employment with the Company for
any reason, and upon request of the Company at any other time, Employee shall
promptly surrender and deliver to the Company all documents and other written
material of any nature containing or pertaining to any Confidential Information
and shall not retain any such document or other material. Within five days of
any such request, Employee shall certify to the Company in writing that all such
materials have been returned.
(d) As used in this Agreement, the term "Confidential Information"
shall mean any information or material known to or used by or for the Company
(whether or not owned or developed by the Company and whether or not developed
by Employee) that is not generally known to any person in the same business as
the Company. Confidential Information includes, but is not limited to, the
following: all trade secrets of the Company; all non-public information that the
Company has marked as confidential or has otherwise described to Employee
(either in writing or orally) as confidential; all non-public information
concerning the Company's products, services, prospective products or services,
research, product designs, prices, discounts, costs, marketing plans, marketing
techniques, market studies, test data, customers, customer lists and records,
suppliers and contracts; all business records and plans; all personnel files;
all financial information of or concerning the Company; all information relating
to the Company's operating system software, application software, software and
system methodology, hardware platforms, technical information, inventions,
computer programs and listings, source codes, object codes, copyrights and other
intellectual property; all technical specifications; any proprietary information
belonging to the Company; all Company computer hardware or software manuals; all
Company training or instruction manuals; and all Company data and all computer
system passwords and user codes.
11. No Prior Agreements. Employee hereby represents and warrants to the
Company that the execution of this Agreement by Employee, his employment by the
Company and the performance of his duties hereunder will not violate or be a
breach of any agreement with a former employer, client or any other person or
entity. Further, Employee agrees to indemnify the Company for any claim,
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including, but not limited to, reasonable attorneys' fees and expenses of
investigation, by any such third party that such third party may now have or may
hereafter come to have against the Company based upon or arising out of any
non-competition agreement, invention or secrecy agreement between Employee and
such third party which was in existence as of the date of this Agreement.
12. Assignment; Binding Effect. Employee understands that he has been
selected for employment by the Company on the basis of his personal
qualifications, experience and skills. Employee agrees, therefore, that he
cannot assign all or any portion of his performance under this Agreement.
Subject to the preceding and paragraph 1(b), this Agreement shall be binding
upon, inure to the benefit of and be enforceable by the parties hereto and their
respective heirs, legal representatives, successors and assigns.
13. No Mitigation or Offset. Employee shall not be required to mitigate
the amount of any Company payment provided for in this Agreement by seeking
other employment or otherwise. The amount of any payment required to be paid to
Employee by the Company pursuant to this Agreement shall not be reduced by any
amounts that are owed to the Company by Employee, or by any setoff,
counterclaim, recoupment, defense or other claim, right or action.
14. Release. Notwithstanding anything in this Agreement to the
contrary, upon termination of employment hereunder, Employee shall not be
entitled to receive any payments pursuant to this Agreement unless Employee and
Company have executed a mutual general release of all claims each may have
against the other and its affiliates in a form of release reasonably mutually
acceptable to all parties thereto, and such release has become final; provided
that in no event shall the Company be released from any indemnification
obligations to the Employee arising by virtue of the Company's Articles of
Incorporation or otherwise required by law; and further provided, that Employee
may waive Company's obligation to execute such release in Employee's sole
discretion.
15. Complete Agreement. Employee has no oral representations,
understandings or agreements with the Company or any of its officers, directors
or representatives covering the same subject matter as this Agreement. This
written Agreement is the final, complete and exclusive statement and expression
of the agreement between the Company and Employee and of all the terms of this
Agreement. This written Agreement may not be later modified except by a further
writing signed by a duly authorized officer of the Company and Employee, and no
term of this Agreement may be waived except by writing signed by the party
waiving the benefit of such term. Without limiting the generality of the
foregoing, either party's failure to insist on strict compliance with this
Agreement shall not be deemed a waiver thereof.
16. Notice. Whenever any notice is required hereunder, it shall be
given in writing addressed as follows:
To the Company: Motient Corporation
000 Xxxxxxxxxxxxx Xxxxxxx
Xxxxxxxxxxxx, Xxxxxxxx
Attention: Human Resources
Facsimile: 000-000-0000
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To Employee: Xxxxxx Xxxxxxx
Notice shall be deemed given and effective on the earlier of three days
after the deposit in the U.S. mail of a writing addressed as above and sent
first class mail, certified, return receipt requested, or when actually
received. In addition, notice must be e-mailed on the date of mailing. Either
party may change the address for notice by notifying the other party of such
change in accordance with this paragraph 16.
17. Severability; Headings. If any portion of this Agreement is held
invalid or inoperative, the other portions of this Agreement shall be deemed
valid and operative and, so far as is reasonable and possible, effect shall be
given to the intent manifested by the portion held invalid or inoperative. The
paragraph headings herein are for reference purposes only and are not intended
in any way to describe, interpret, define or limit the extent or intent of the
Agreement or of any part hereof.
18. Governing Law. This Agreement shall in all respects be construed
according to the laws of the State of Illinois, without regard to its conflicts
of law provisions.
19. Counterparts. This Agreement may be executed simultaneously in two
or more counterparts, each of which shall be deemed an original and all of which
together shall constitute but one and the same instrument.
20. Employee's Legal Expenses. The Company will pay to Employee an
amount equal to his actual reasonable legal expenses incurred in successfully
negotiating and documenting this Agreement and all collateral agreements,
including tax advice related thereto.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective for all purposes as of the Effective Date.
Motient Corporation
By: /s/ Xxx Xxxxxx
---------------------------------------
Name: Xxxxxxx Xxxxxx
Title: Chairman, Compensation Committee
EMPLOYEE:
/s/ Xxx Xxxxxxx
--------------------------------------------
Name: Xxxxxx Xxxxxxx
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