Exhibit 10.11
EMPLOYMENT AGREEMENT
AGREEMENT, dated as of the 21st day of November, 2005, by and between
Loral Space & Communications Inc., a Delaware corporation (the "Company"), Xxxx
X. Xxxxxx, a resident of New York, NY (the "Executive") and those subsidiaries
of the Company signatory hereto solely for purposes of Section 11(m) hereof.
WHEREAS, the Company desires to engage the services of the Executive
and the Executive desires to be employed by the Company on the terms and
conditions hereinafter set forth; and
WHEREAS, the Company desires to be assured that all proprietary and
confidential information of the Company will be preserved for the exclusive
benefit of the Company;
NOW, THEREFORE, in consideration of such employment and the mutual
covenants herein contained, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and the
Executive agree as follows:
Section 1. Employment and Position. The Company hereby employs the
Executive as its President & Chief Operating Officer, and the Executive hereby
accepts such employment under and subject to the terms and conditions
hereinafter set forth.
Section 2. Term. The term of employment under this Agreement shall begin on
the Effective Date, as such term is defined in the Debtors' Fourth Amended Joint
Plan of Reorganization Under Chapter 11 of the Bankruptcy Code, dated June 3,
2005, as modified (the "Plan of Reorganization"), and, unless sooner terminated
as provided in Section 6, shall conclude on the second (2nd) anniversary of the
Effective Date (the "Term"). At the Executive's request within the last six
months preceding the expiration of the Term, the Company shall, to the extent
practicable within two weeks after any such request but without any obligation,
provide the Executive with notice regarding whether the Company intends to renew
or extend the Term under this Agreement, terminate the employment relationship
between the parties on or shortly after the expiration of the Term or continue
the Executive's employment on an "at will" basis with no guaranteed term. Unless
the Executive's employment with the Company is terminated upon the expiration of
the Term or the Term under this Agreement is renewed or extended, the Executive
shall be employed by the Company after the Term on an "at will" basis.
Section 3. Duties. The Executive shall perform services in a managerial
capacity in a manner consistent with the Executive's position as President &
Chief Operating Officer, subject to the general supervision of the Chief
Executive Officer of the Company or his designee. The Executive hereby agrees to
devote his full business time to the faithful performance of such duties and to
the promotion and forwarding of the business and affairs of the Company for the
Term, provided, however, that Executive shall be permitted to engage in (i)
other activities of a civic, religious, political or charitable nature, (ii)
managing investments of the Executive and the Executive's family in securities,
mutual funds or other collective investment funds, limited partner interests
or similar passive investments, (iii) corporate directorships and other business
activities described in Schedule I attached hereto, or (iv) such other
activities as may hereafter be specifically approved in writing, which in each
case and in the aggregate do not materially interfere with the performance of
his obligations hereunder, provided, further, however, that Executive may not
engage in any such activities that would result in the Executive being in
Competition (as defined in Section 8(d) below).
Section 4. Compensation.
(a) Salary. In consideration of the services rendered by the Executive
under this Agreement, the Company shall pay the Executive a base salary (the
"Base Salary") at the rate of $1,248,000 per calendar year. The Base Salary
shall be paid in such installments and at such times as the Company pays its
salaried executives and shall be subject to all necessary withholding taxes,
FICA contributions and similar deductions. The Board of Directors (the "Board")
of the Company may review from time to time the Base Salary payable to Executive
hereunder and may, in its sole discretion, increase but not decrease, the
Executive's salary rate. Any such increased salary shall be and become the "Base
Salary" for purposes of this Agreement.
(b) Annual Bonus. The Company shall maintain an annual Management Incentive
Bonus program ("MIB Program") for certain executives, and Executive shall be a
participant in the MIB Program and shall be entitled to an annual bonus to the
extent payable under such program ("Annual Bonus"). The Executive's target
annual bonus opportunity under the MIB Program shall be forty percent (40%) of
the Executive's Base Salary (the "Target Annual Bonus"). The Annual Bonus for
the 2005 fiscal year under the MIB Program shall be earned and determined in
accordance with the terms and conditions heretofore established by the
Compensation Committee of the Board of Directors of Loral Space & Communications
Ltd. With respect to the Annual Bonus for the 2006 fiscal year or any subsequent
fiscal year, the Board shall, in its discretion, establish the terms and
conditions of the MIB Program and may amend the MIB Program (other than by
reducing the Target Annual Bonus percentage set forth above) accordingly. The
Annual Bonus shall be paid on or before March 15 of the year following the year
to which the Annual Bonus relates.
(c) Stock Options. The Company agrees to grant to the Executive an option
to purchase 120,000 shares of common stock of the Company (the "Option")
pursuant to the terms of the Company's 2005 Stock Incentive Plan (the "Stock
Option Plan"). Except as set forth in the Option Agreement (defined below), the
Option shall have a per share exercise price equal to $19.00. Such Option shall
be granted on or about the thirtieth (30th) day following the Effective Date.
The Option shall have such other terms and conditions as set forth in the Option
Agreement attached hereto as Exhibit A (the "Option Agreement").
Section 5. Benefits. In addition to the compensation detailed in Section 4
of this Agreement, the Executive shall be entitled to the following additional
benefits:
(a) Paid Vacation. The Executive shall be entitled to twenty (20) days paid
vacation per calendar year in accordance with the Company's vacation policy in
effect
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from time to time, such vacation shall extend for such periods and shall be
taken at such intervals as shall be appropriate and consistent with the proper
performance of the Executive's duties hereunder.
(b) Welfare Plans. During the Term, the Executive and/or the Executive's
family, as the case may be, shall be eligible for participation in and shall
receive all benefits under welfare benefit plans, programs, practices and
policies provided generally by the Company to similarly situated executives of
the Company (including, without limitation, any medical, prescription, dental,
disability, salary continuance, employee life, group life, accidental death and
travel accident insurance plans and programs that may be provided by the Company
from time to time). Such plans, programs, practices and policies are subject to
change from time to time by the Company.
(c) Other Benefit Plans. During the Term, the Executive shall be entitled
to participate in all savings, retirement and pension plans (including the
Company's Supplemental Executive Retirement Plan ("SERP")), programs, practices
and policies applicable generally to similarly situated executives of the
Company as determined by the Board from time to time. Such plans, programs,
practices and policies are subject to change from time to time by the Company.
(d) Perquisites and Other Benefits. During the Term, the Executive shall be
entitled to such additional perquisites and fringe benefits appertaining to his
position in accordance with any practice established by the Board. During the
Term, Executive shall be entitled to receive all benefits under any individual
welfare benefit arrangements (including life insurance coverage) or other
benefit arrangements currently in effect for such Executive in a manner
consistent with past practice, and such arrangements are listed on Schedule I
attached hereto.
(e) Reimbursement of Expenses. The Company shall reimburse the Executive
for all reasonable and necessary expenses actually incurred by the Executive
directly in connection with the business affairs of the Company and the
performance of his duties hereunder, upon presentation of proper receipts or
other proof of expenditure and subject to such reasonable guidelines or
limitations provided by the Company from time to time. The Executive shall
comply with such reasonable limitations and reporting requirements with respect
to such expenses as the Board may establish from time to time.
(f) Indemnification. In addition to indemnification obligations of the
Company pursuant to Section 8.7 of the Plan of Reorganization and the terms of
any officers' liability insurance carried by the Company, the Executive (and his
heirs, executors and administrators) shall be indemnified by the Company and its
successors and assigns pursuant to a separate Indemnification Agreement in the
form attached hereto as Exhibit B. The Executive shall be an insured person
under or otherwise covered by directors and officers liability insurance in an
amount consistent with past practice. The obligations of the Company pursuant to
this Section shall survive the expiration of the Term or Executive's voluntary
or involuntary termination or resignation for Good Reason.
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Section 6. Termination. This Agreement shall terminate at the end of the
Term. The Executive's employment may end earlier as follows:
(a) Death. The employment of the Executive shall automatically terminate
upon the death of the Executive.
(b) Disability. In the event of any physical or mental disability of the
Executive rendering the Executive substantially unable to perform his duties
hereunder for a period of at least 120 days out of any twelve-month period and
the further determination that the disability is permanent with regard to the
Executive's ability to return to work in his full capacity, the Executive's
employment shall be terminated on account of the Executive's disability. Any
determination of permanent disability shall be made by the Board in consultation
with a qualified physician or physicians selected by the Board and reasonably
acceptable to the Executive. The failure of the Executive to submit to a
reasonable examination by such physician or physicians shall act as an estoppel
to any objection by the Executive to the determination of disability by the
Board.
(c) By the Company For Cause. The employment of the Executive may be
terminated by the Company for Cause (as defined below) at any time effective
upon written notice to the Executive; provided, however, that if such
termination is based upon any event set forth in clauses (iii), (iv), (v), (vi)
or (vii) below, Executive shall be given not less than ten (10) days prior
written notice by the Board of the intention to terminate him for Cause, such
notice to state in detail the particular act or acts or failure or failures to
act that constitute the grounds on which the proposed termination for Cause is
based, and Executive shall have ten (10) days after the date that such written
notice has been given to Executive in which to address the Board regarding any
such alleged act or failure to act. If the Board makes a determination that
Cause exists, the termination shall be effective on the date immediately
following the expiration of the ten (10) day notice period. For purposes hereof,
the term "Cause" shall mean that the Board has determined reasonably, in good
faith and based on credible evidence that one or more of the following has
occurred:
(i) the Executive shall have been after the Effective Date convicted
of, or shall have pleaded guilty or nolo contendere to, any felony or any
other crime that would have constituted a felony under the laws of the
State of New York;
(ii) the Executive shall have been indicted for any felony or any
other crime that would have constituted a felony under the laws of the
State of New York in connection with or arising from the Executive's
employment with the Company;
(iii) the Executive shall have breached any material provision of
Section 8 hereof;
(iv) the Executive shall have committed any fraud, embezzlement,
misappropriation of funds, or breach of fiduciary duty against the Company,
in each case of a material nature;
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(v) the Executive shall have engaged in any willful misconduct
resulting in or reasonably likely to result in a material loss to the
Company or substantial damage to its reputation;
(vi) the Executive shall have willfully breached in any material
respect any material provision of the Company's Code of Conduct and, to the
extent any such breach is curable, the Executive shall have failed to cure
such breach within ten (10) days after written notice of the alleged breach
is provided to the Executive; or
(vii) the Executive shall have willfully breached in any material
respect any material provision of Section 3 hereof.
(d) By the Company without Cause. The Company may terminate the Executive's
employment at any time without Cause effective upon written notice to the
Executive.
(e) By the Executive Voluntarily. The Executive may terminate his
employment at any time effective upon at least thirty (30) days prior written
notice to the Company.
(f) By the Executive for Good Reason. The Executive may terminate his
employment for Good Reason by providing the Company thirty (30) days' written
notice setting forth in reasonable specificity the event that constitutes Good
Reason, within sixty (60) days of the occurrence of such event. During such
thirty (30) day notice period, the Company shall have a cure right (if curable),
and, if not cured within such period, Executive's termination will be effective
upon the expiration of such cure period. For this purpose, the term "Good
Reason" shall mean:
(i) the assignment to the Executive of any duties inconsistent in any
substantial respect with the Executive's position, authority or
responsibilities or any duties which are illegal or unethical or any
material diminution of any of the Executive's significant duties;
(ii) any reduction in Base Salary, the Target Annual Bonus or any of the
benefits described in Section 5 of this Agreement to the extent not
permitted under Section 5;
(iii) the relocation by the Company of the Executive's primary place of
employment with the Company to a location not within a thirty (30)
mile radius of such place of employment as of the Effective Date;
provided, however, that such relocation shall not be considered Good
Reason if such location is closer to the Executive's home than the
Executive's primary place of employment as of the Effective Date;
(iv) other material breach of this Agreement by the Company; or
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(v) the failure of the Company to obtain the assumption in writing of its
obligation to perform this Agreement by any successor to all or
substantially all of the assets of the Company.
Notwithstanding anything in this Agreement to the contrary, any
determination by the non-employee directors of the Board regarding the action
the Company shall take with respect to (a) any personal claims of any of the
Company's or its affiliates' officers (including Executive) or directors against
the Company or any of its affiliates for indemnification arising from or in
connection with alleged acts or omissions that occurred on or prior to the date
of the commencement of the chapter 11 cases of Loral Space & Communications Ltd.
and certain of its affiliates on July 15, 2003; and (b) the Shared Services
Agreement or the Management Agreement, each of even date herewith, by and among
the Company, Loral Skynet Corporation and Space Systems/Loral, Inc., shall not
constitute Good Reason.
Section 7. Termination Payments and Benefits.
(a) Voluntary Termination, Termination For Cause. Upon any termination of
employment during the Term either (i) by the Executive without Good Reason under
Section 6(e), or (ii) by the Company for Cause as provided in Section 6(c), all
payments, salary and other benefits hereunder shall cease at the effective date
of termination. Notwithstanding the foregoing, the Executive shall be entitled
to receive from the Company (i) all salary earned or accrued through the date
the Executive's employment is terminated, (ii) reimbursement for any and all
monies advanced in connection with the Executive's employment for reasonable and
necessary business expenses incurred by the Executive through the date the
Executive's employment is terminated, (iii) all other payments and benefits to
which the Executive may be entitled under the terms of any applicable
compensation arrangement or benefit plan or program of the Company, including
any earned and accrued, but unused vacation pay and benefits under and in
accordance with the terms and provisions of the SERP, but excluding any
entitlement to severance under any Company severance policy generally applicable
to the Company's salaried employees, and (iv) excluding any accrued and unpaid
Annual Bonus for the immediately preceding year (collectively, "Accrued
Benefits").
(b) Death. In the event of a termination due to the Executive's death
during the Term, the Company shall have no further obligations to the Executive
or his beneficiaries other than to pay to the Executive's designated beneficiary
or, if no beneficiary has been designated by the Executive, to his estate (i)
all Accrued Benefits, plus (ii) any Base Salary through the end of the calendar
month in which the Executive's death occurred, plus (iii) any accrued and unpaid
Annual Bonus for the immediately preceding year, and (iv) at the times the
Company pays its executives bonuses in accordance with its general payroll
policies, an amount equal to that portion of the Annual Bonus which but for the
Executive's death would have been earned by the Executive during the year of his
death, pro rated based on a formula, the denominator of which shall be 365 and
the numerator of which shall be the number of days during the year of his death
during which the Executive was employed by the Company on an active status (the
Accrued Benefits and the payment of the amounts set forth in clauses (iii) and
(iv) of this Section 7(b) are collectively referred to as "Enhanced Accrued
Benefits"). In
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addition, any unvested stock options under the Stock Option Plan and any
deferred compensation under the Option Agreement that would have become vested
on the next date of vesting applicable thereto shall become vested and shall
remain exercisable or be paid as provided under the terms of the applicable plan
or agreement as to a portion thereof based on a formula, the denominator of
which shall be 365 and the numerator of which shall be the number of days during
the year of his death during which the Executive was employed by the Company on
an active status. The Executive's medical, prescription and dental coverage
shall continue for the benefit of the Executive's family members through the end
of the Term.
(c) Termination without Cause or for Good Reason. In the event that the
Executive's employment is terminated during the Term by the Company without
Cause or by the Executive for Good Reason, the Executive shall be entitled to
receive as his exclusive right and remedy in respect of such termination, (i)
all Enhanced Accrued Benefits, (ii) severance pay equal to the greater of (A)
the amount set forth on Schedule II hereto, or (B) the remaining amount of Base
Salary the Executive would have received had the Executive been employed through
the end of the Term ("Severance Payments"), with such Severance Payments to be
paid in a lump sum as soon as practicable on or after termination (but not later
than three business days after the release described in Section 7(f) becomes
effective and not revocable). In addition, all unvested stock options under the
Stock Option Plan and all deferred compensation under the Option Agreement shall
become fully vested and shall remain exercisable or be paid as provided under
the terms of the applicable plan or agreement, and the Executive shall continue
to be covered, upon the same terms and conditions applicable generally to
similarly situated executives who remain employed with the Company, by the same
or equivalent medical, dental and life insurance coverage as in effect for the
Executive immediately prior to the termination of his employment, until the
earlier of (A) the expiration of a period of months determined by dividing the
lump sum amount of severance pay he receives pursuant to clause (ii) of the
preceding sentence by the Executive's monthly salary rate in effect on his date
of termination, or (B) the date the Executive has commenced new employment and
has thereby become eligible for comparable benefits, subject to the Executive's
rights under COBRA. For avoidance of doubt, if the Executive is offered
employment consistent with the terms of this Agreement with the person that
acquires all or substantially all of the assets or stock of New FSS or New SSL
(as such terms are defined in the Plan of Reorganization), any affiliate that
directly or indirectly owns such acquirer, or any successor to the acquirer or
any such affiliate and such person assumes this Agreement, the Executive shall
not be treated as having a termination of employment without Cause or for Good
Reason, regardless of whether the Executive refuses the offer of employment, by
reason of the sale of such assets or stock.
(d) Termination due to Disability. In the event that the Executive's
employment is terminated during the Term due to the Disability of the Executive,
the Company shall have no further obligation to the Executive other than to pay
the Executive (in addition to any disability insurance payments to which the
Executive is entitled pursuant to Section 5 above) all Enhanced Accrued
Benefits. In addition, any unvested stock options under the Stock Option Plan
and any deferred compensation under the Option Agreement that would have become
vested on the next date of vesting
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applicable thereto shall become vested and shall remain exercisable or be paid
as provided under the terms of the applicable plan or agreement, as to a portion
thereof based on a formula, the denominator of which shall be 365 and the
numerator of which shall be the number of days during the year of his Disability
during which the Executive was employed by the Company on an active status.
(e) No Other Benefits. Except as specifically provided in this Section 7,
the Executive shall not be entitled to any other compensation, severance or
other benefits from the Company or any of its subsidiaries or affiliates upon
the termination of this Agreement or the Executive's employment for any reason
whatsoever. Payment by the Company of all Accrued Benefits, Enhanced Accrued
Benefits and Severance Payments (if applicable) and contributions to the cost of
the Executive's confirmed participation in the Company's group medical, dental
and life insurance plans that may be due to the Executive under the applicable
termination provision of this Section 7 shall constitute the entire obligation
of the Company to the Executive. Notwithstanding anything contained in this
Agreement to the contrary, the Executive (or his beneficiary or estate) shall be
entitled, under all circumstances, to payment of all amounts under and in
accordance with the terms and provisions of the SERP, including, without
limitation, whether or not the Executive is employed by the Company.
(f) Condition. The Company will not be required to make the payment and
provide the benefits stated in this Section 7 unless the Executive executes and
delivers to the Company a waiver and release agreement in the form attached
hereto as Exhibit C and such waiver and release is not unilaterally revocable by
the Executive.
(g) Resignation from Company Offices. In the event of the Executive's
termination of employment for any reason, the Executive shall resign and shall
be deemed to have resigned immediately from the Board (if the Executive is then
a member of the Board) and any and all other directorships, offices and
positions with, on behalf of, or relating to the Company or any of its
subsidiaries, effective as of the date of the Executive's termination of
employment with the Company.
Section 8. Restrictive Covenants.
(a) Proprietary Information. In the course of service to the Company, the
Executive will have access to confidential specifications, know-how, strategic
or technical data, marketing research data, product research and development
data, manufacturing techniques, confidential customer lists, sources of supply
and trade secrets, all of which are confidential and may be proprietary and are
owned or used by the Company, or any of its subsidiaries or affiliates. Such
information shall hereinafter be called "Proprietary Information" and shall
include any and all items enumerated in the preceding sentence and coming within
the scope of the business of the Company or any of its subsidiaries or
affiliates as to which the Executive may have access, whether conceived or
developed by others or by the Executive alone or with others during the
Executive's period of service with the Company, whether or not conceived or
developed during regular working hours. Proprietary Information shall not
include any records, data or information which are in the public domain during
Executive's service with the Company or after the Executive's service with the
Company has terminated, provided the
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same are not in the public domain as a consequence of disclosure by the
Executive in violation of this Agreement.
(b) Non-Use and Non-Disclosure. The Executive shall not during the Term or
at any time thereafter (i) disclose any Proprietary Information to any person
other than (A) the Company, (B) the Company's or its affiliates' directors,
officers or employees who, in the reasonable judgment of the Executive, need to
know such Proprietary Information, (C) such other persons to whom the Executive
has been specifically instructed to make disclosure by the Board; and in all
such cases only to the extent required in the course of the Executive's service
to the Company or (D) as required by law, or (ii) use any Proprietary
Information, directly or indirectly, for his own benefit or for the benefit of
any other person or entity.
(c) Return of Documents. All notes, letters, documents, records, tapes and
other media of every kind and description containing Proprietary Information and
any copies, in whole or in part, thereof (collectively, the "Documents"),
whether or not prepared by the Executive, shall be the sole and exclusive
property of the Company. The Executive shall safeguard all Documents and shall
surrender to the Company at the time his employment terminates, or at such other
time or times as the Board or its designee may specify, all Documents then in
the Executive's possession or control.
(d) Non-Competition. At all times during the Executive's employment with
the Company or any affiliate during the Term, and for a period of twelve (12)
months following the termination during the Term of employment with the Company
or any affiliate for any reason (the "Restricted Period"), the Executive will
not engage in Competition (as defined below) with the Company. For purposes of
this Agreement, "Competition" shall mean engaging in, or otherwise directly or
indirectly being employed by, or acting as a consultant or adviser (paid or
unpaid) to, or being a director, officer, employee, principal, agent,
stockholder, member, owner or partner of (i) Boeing, Lockheed, Alcatel Space or
Astrium, (ii) PanAmSat, SES Astra, Intelsat, New Skies Satellites, (iii) any
business similar to the businesses described in clause (i) or (ii) above that
competes with the services provided by the Company, (iv) any business that
competes with a business that the Company engages in as of the date of the
Executive's termination of employment with the Company, as described or
otherwise contemplated in the Company's business plan for the year of such
termination of employment, or (v) any business that competes with a business
that the Company is, to the knowledge of the Executive, preparing to engage in
as of the date of the Executive's termination of employment with the Company,
and any transferee of or successor to any of the foregoing businesses.
Notwithstanding anything to the contrary in this Agreement, the Executive may,
directly or indirectly, own, solely as an investment, securities of a business
enterprise in Competition with the Company or its subsidiaries which are
publicly traded on a national or regional stock exchange or on the
over-the-counter market if the Executive (i) is not a controlling person of or a
member of a group which controls such business enterprise and (ii) does not,
directly or indirectly, own five percent (5%) or more of any class of securities
of such business enterprise.
(e) Non-Solicitation of Employees. At all times during the Restricted
Period, the Executive will not directly or indirectly solicit or in any manner
encourage employees
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of the Company or any affiliate who were employed by the Company within the
six-month period prior to the termination of the Executive's employment with the
Company or any affiliate to leave its employ and will not offer or cause to be
offered employment to any such person; provided, however, that the restrictions
in this paragraph shall not apply to (i) general solicitations that are not
specifically directed to employees of the Company or any affiliate and (ii) any
administrative support staff.
(f) Non-Solicitation of Customers or Suppliers. At all times during the
Restricted Period, the Executive will not knowingly solicit or in any manner
encourage, directly or indirectly, customers of or suppliers to the Company or
any affiliate who were customers of or suppliers to the Company or any affiliate
within the twelve-month period prior to the termination of the Executive's
employment with the Company or any affiliate to terminate or diminish their
relationship with the Company or any affiliate.
(g) Reasonableness. The Executive has carefully considered the nature,
extent and duration of the restrictions and obligations contained in this
Agreement, including, without limitation, provisions of this Section 8 and
acknowledges and agrees that such restrictions are fair and reasonable in all
respects to protect the legitimate interests of the Company and its affiliates
and that these restrictions are designed for the reasonable protection of the
business of the Company and that of its affiliates.
(h) Remedies. The Executive recognizes that any breach of this Section 8
shall cause irreparable injury to the Company or its affiliates, inadequately
compensable in monetary damages. Accordingly, in addition to any other legal or
equitable remedies that may be available to the Company, Executive agrees that
the Company or its affiliates shall be able to seek and obtain injunctive relief
in the form of a temporary restraining order, preliminary injunction, or
permanent injunction against the Executive to enforce this Agreement. To the
extent that any damages are calculable resulting from the breach of this
Agreement, the Company and its affiliates shall also be entitled to recover
damages. Any recovery of damages by the Company and its affiliates shall be in
addition to and not in lieu of the injunctive relief to which the Company and
its affiliates are entitled. Without limiting the rights of the Company and its
affiliates under this Section 8 or any other remedies that may be available to
them, if a court of competent jurisdiction determines that the Executive has
breached any of the provisions of this Section 8, the Company or its affiliates
will have the right to cease making any payments or providing any benefits
otherwise due to Executive under the terms and conditions of this Agreement, and
the right to recover the Annual Bonus that may have been paid as part of the
Enhanced Accrued Benefits and the Severance Payment that the Executive may have
received under this Agreement.
Section 9. Severable Provisions. The provisions of this Agreement are
severable and the invalidity of any one or more provisions shall not affect the
validity of any other provision. In the event that a court of competent
jurisdiction shall determine that any provision of this Agreement or the
application thereof is unenforceable in whole or in part because of the duration
or scope thereof, the parties hereto agree that said court in making such
determination shall have the power to reduce the duration and scope of such
provision to the extent necessary to make it enforceable, and that the Agreement
in its reduced form shall be valid and enforceable to the full extent permitted
by law.
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Section 10. Notices. All notices hereunder, to be effective, shall be in
writing and shall be delivered by hand or mailed by certified mail, postage and
fees prepaid, as follows:
If to the Company: Loral Space & Communications Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel
If to the Executive: Xxxx X. Xxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
or to such other address as a party may notify the other pursuant to a notice
given in accordance with this Section 10. All notices to any person shall be
deemed given when actually received by the person.
Section 11. Miscellaneous.
(a) Amendment. This Agreement may not be amended or revised except by a
writing signed by the parties.
(b) Assignment and Transfer. The provisions of this Agreement shall be
binding on and shall inure to the benefit of any such successor in interest to
the Company. Neither this Agreement nor any of the rights, duties or obligations
of the Executive shall be assignable by the Executive, nor shall any of the
payments required or permitted to be made to the Executive by this Agreement be
encumbered, transferred or in any way anticipated, except as required by
applicable laws. This Agreement shall not be terminated solely by reason of the
merger or consolidation of the Company with any corporate or other entity or by
the transfer of all or substantially all of the assets of the Company to any
other person, corporation, firm or entity. However, all rights of the Executive
under this Agreement shall inure to the benefit of and be enforceable by the
Executive's personal or legal representatives, estates, executors,
administrators, heirs and beneficiaries. All amounts payable to the Executive
hereunder shall be paid, in the event of the Executive's death, to the
Executive's estate, heirs or representatives.
(c) Withholding. The Company shall be entitled to withhold from any amounts
to be paid or benefits provided to the Executive hereunder any federal, state,
local, or foreign withholding or other taxes or charges which it is from time to
time required to withhold. The Company shall be entitled to rely on an opinion
of counsel if any question as to the amount or requirement of any such
withholding shall arise.
(d) Waiver of Breach. A waiver by the Company or the Executive of any
breach of any provision of this Agreement by the other party shall not operate
or be construed as a waiver of any other or subsequent breach by the other
party.
(e) Survival of Certain Provisions. Provisions of this Agreement shall
survive any termination of employment and the expiration of the Term if so
provided herein or if
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necessary or desirable fully to accomplish the purposes of such provision,
including, without limitation, the obligations of the Company under Section 7
hereof if the Executive is terminated during the Term and the obligations of the
Executive under Section 8 hereof.
(f) Attorney's Fees. In the event that any action is brought to enforce any
of the provisions of this Agreement, or to obtain money damages for the breach
thereof, all expenses (including reasonable attorneys' fees) shall be paid by
the party incurring such fees or expenses; provided, however, that the Company
shall reimburse Executive for such fees and expenses to the extent that the
Executive prevails on any issues raised in such action.
(g) Entire Agreement. This Agreement, the Stock Option Plan, the Option
Agreement, the Indemnification Agreement referred to in Section 5(f) hereof, the
Certificates of Incorporation of the Company and of each of its affiliates, the
SERP, the Plan of Reorganization and the Stipulation and Agreement among the
Debtors and their Directors and Officers in Respect of Certain Indemnification
Claims constitute the entire understanding of the parties with respect to the
subject matter hereof and supercede all prior negotiations, understandings,
discussions, and agreements, whether written or oral, between them.
(h) Captions. Captions herein have been inserted solely for convenience of
reference and in no way define, limit or describe the scope or substance of any
provision of this Agreement.
(i) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and shall have the same
effect as if the signatures hereto and thereto were on the same instrument.
(j) Governing Law. This Agreement shall be construed under and enforced in
accordance with the laws of the State of New York.
(k) Jurisdiction and Choice of Forum. The Executive and the Company
irrevocably submit for any disputes arising under or in connection with this
Agreement to the exclusive jurisdiction of any state or federal court located in
the State of New York. Both the Executive and the Company (i) acknowledge that
the forum stated in this Section has a reasonable relation to this Agreement and
to the relationship between the Executive and the Company, (ii) waive, to the
extent permitted by law, any objection to personal jurisdiction or the laying of
venue of any action or proceeding in the forum stated in this section, (iii)
agree not to commence any such action or proceeding in any forum other than the
forum stated in this section and (iv) agree that, to the extent permitted by
law, a final and non-appealable judgment in any such action or proceeding in any
such court will be conclusive and binding on the Executive and the Company.
However, nothing in this Agreement precludes the Executive or the Company from
bringing any action or proceeding in any court for the purposes of enforcing the
provisions of this section.
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(l) Acknowledgement of Representation. The Executive and the Company
acknowledge that they have been represented by counsel of their own choosing and
have received a full and complete explanation of their rights and obligations
under this Agreement and, therefore, in the event of a dispute over the meaning
of this Agreement or any provision thereof, neither party shall be entitled to
any presumption of correctness in favor of the interpretation advanced by such
party or against the interpretation advanced by the other party.
(m) Guarantee. (i) Each of Loral Skynet Corporation and Space
Systems/Loral, Inc. (each a "Guarantor") hereby irrevocably and unconditionally
guarantees the due and punctual payment and performance of all obligations of
the Company under this Agreement; provided, however, that a Guarantor's
guarantee obligation hereunder shall terminate and cease to have any force or
effect immediately upon (x) such Guarantor ceasing to be a direct or indirect
subsidiary or parent of the Company or (y) the sale of all or substantially all
of such Guarantor's assets pursuant to an Approved Transaction (as defined
below) in which a Guarantor does not receive all or substantially all of the
consideration of such sale.
(ii) Notwithstanding anything in this Agreement to the contrary and
for as long as the Guarantor's obligations hereunder are in effect, the
Executive hereby acknowledges and agrees that at any time a Guarantor may
effectuate, and this Agreement shall not in any way prohibit or restrict the
Guarantor from effectuating, and the Executive shall not have any right or claim
with respect to, rely upon, or challenge (a) any transfer by the Guarantor of
any or all of its funds, assets or other property to either: (i) the Company or
any of its direct or indirect subsidiaries or their successors (each a "Group
Entity"), including by way of dividend, distribution, payment, lease, sale,
assignment, transfer, merger, consolidation or otherwise, or (ii) any other
person, pursuant to a transaction that the Guarantor's Board of Directors
determines in good faith to effect in furtherance of a legitimate business
purpose of the Guarantor or any Group Entity (an "Approved Transaction") or (b)
the liquidation or dissolution of a Guarantor.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
LORAL SPACE & COMMUNICATIONS INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
/s/ Xxxx X. Xxxxxx
----------------------------------------
Xxxx X. Xxxxxx
13
LORAL SKYNET CORPORATION (solely for purposes of Section 11(m) hereof)
By: /s/ Xxxxxxx X. Xxxxxxxx
---------------------------------
Name:
-------------------------------
Title:
------------------------------
SPACE SYSTEMS/LORAL, INC. (solely for purposes of Section 11(m) hereof)
By: /s/ Xxxxxxx X. Xxxxxxxx
---------------------------------
Name:
-------------------------------
Title:
------------------------------
14
Schedule I
Outside Business Relationships
Service as a Director of EasyLink Services Corporation
Perquisites and Individual Benefits
EXECUTIVE
LIFE EXECUTIVE
INSURANCE MEDICAL OTHER
---------- --------- -----
$1,500,000 $4,000
Schedule II
Section 7(c)(iii)(A) Severance Amount
For corporate office employees:
Severance Amount per the Consent Order Approving Key Employee Retention Plan and
Other Relief for Certain Employees of the Debtors' Corporate Headquarters
Pursuant to Sections 105(a) and 363(b) of the Bankruptcy Code dated December 18,
2003 is equal to (x) Enhanced Severance (2003 annual base salary multiplied by
the percentage applicable to the Group in which the Executive has been placed,
plus (y) Standard Severance of one week of annual base salary for each year of
employment with the Company and its affiliates. As of the Effective Date, the
Severance Amount is set forth below.
ENHANCED STANDARD TOTAL
---------- -------- ----------
$1,750,000 $367,200 $2,117,200
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