Exhibit 10.7
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of January 7, 2002 (this
"Agreement"), between SIRIUS SATELLITE RADIO INC., a Delaware
corporation (the "Company"), and XXX XXXXXXX (the "Executive").
In consideration of the mutual covenants and conditions set forth
herein, the Company and the Executive agree as follows:
1. Employment. Subject to the terms and conditions of this Agreement,
the Company hereby employs the Executive, and the Executive hereby accepts
employment with the Company.
2. Duties and Reporting Relationship. (a) The Executive shall be
employed in the capacity of Executive Vice President, Sales and Marketing, of
the Company. In such capacity, the Executive shall be responsible for the
Company's marketing and sales department and its activities, including the
Company's relationships with retailers, radio manufacturers, automakers, and the
development of advertising and marketing campaigns. During the Term (as defined
below), the Executive shall, on a full-time basis and consistent with the needs
of the Company to achieve the goals of the Company, use his skills and render
services to the best of his ability in supervising the business and affairs of
the Company and shall, in addition, perform such other activities and duties
consistent with his position as the Chief Executive Officer of the Company shall
from time to time reasonably specify and direct.
(b) The Executive shall perform his duties and conduct his business at
the principal offices of the Company in New York, New York, except for required
travel.
(c) The Executive shall report to the President and Chief Executive
Officer of the Company.
3. Term. The term of this Agreement shall commence on January 7, 2002
and end on January 6, 2005, unless terminated earlier pursuant to the provisions
of Section 6 or 9 (the "Term").
4. Compensation. (a) During the Term, the Executive shall be paid an
annual base salary of $400,000 (the "Base Salary"). The Executive's base salary
shall be paid at least monthly and, at the option of the Company, may be paid
more frequently. In the event the Executive's employment is terminated during
the Term, the Executive's base salary shall be prorated through the date of
termination.
(b) On the first day of the Term, the Company shall grant to the
Executive an option to purchase 500,000 shares of the Company's common stock,
par value $.001 per share (the "Common Stock"), at an exercise price equal to
the closing price of the Common Stock on the Nasdaq National Market on the last
business day prior to the first day of the Term. Such options shall be subject
to the terms and conditions set forth in the Option Agreement attached to this
Agreement as Exhibit A.
(c) On the first day of the Term, the Company shall grant to the
Executive 100,000
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restricted shares of Common Stock. Such restricted shares of Common Stock shall
be subject to the terms and conditions set forth in the Restricted Stock
Agreement attached to this Agreement as Exhibit B.
(d) The Company is in the process of developing a bonus program for the
year ending December 31, 2002. This program is expected to include a variety of
objective milestones, such as number of subscribers, subscriber acquisition
costs and stock price appreciation, and will be approved by the Compensation
Committee of our Board of Directors. This program may also include objectives
specifically applicable to the Executive and the Marketing and Sales Department
of the Company. Such bonus plan shall contain objective milestones that shall
permit the Executive to earn up to the following annual bonuses:
Performance Targets Annual Bonus
(to be defined) (as a % of Base Salary
--------------- ----------------------
Threshold Target 50%
Desired Performance 75%
Outstanding Performance 100%
The Executive shall be guaranteed a bonus in an amount at least equal to 50% of
the Base Salary for the calendar year ending December 31, 2002.
(e) All compensation paid to the Executive hereunder shall be subject
to any payroll and withholding deductions required by applicable law.
5. Additional Compensation; Expenses and Benefits. (a) During the Term,
the Company shall reimburse the Executive for all reasonable and necessary
business expenses incurred and advanced by him in carrying out his duties under
this Agreement.
(b) During the Term, the Company shall reimburse the Executive, for (i)
reasonable costs of an apartment and other living expenses in New York City, up
to $6,000 per month, and (ii) the costs of two round trip tickets per month,
coach class in accordance with the Company's policies, from his home in British
Columbia to the Company's offices in New York City. All such reimbursement will
be made upon presentation of acceptable receipts to the Company.
(c) During the Term, the Executive shall be entitled to participate
fully in any benefit plans, programs, policies and fringe benefits which may be
made available to the executive officers of the Company generally, including,
without limitation, medical, dental and life insurance; provided that the
Executive shall participate in any severance, stock option or stock purchase or
compensation plan currently in effect or subsequently established by the Company
to the extent, and only to the extent, authorized by the plan document and
expressly provided by the Board of Directors of the Company (the "Board") or the
compensation committee thereof.
6. Termination. The date upon which this Agreement is deemed to be
terminated in accordance with any of the provisions of this Section 6 is
referred to herein as the "Termination Date."
(a) The Company has the right and may elect to terminate this Agreement
for Cause at any time. For purposes of this Agreement, "Cause" means the
occurrence or existence of any of the following:
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(i) a material breach by the Executive of the terms of this
Agreement or of his duty not to engage in any transaction that
represents, directly or indirectly, self-dealing with the Company or
any of its affiliates (which, for purposes hereof, shall mean any
individual, corporation, partnership, association, limited liability
company, trust, estate, or other entity or organization directly or
indirectly controlling, controlled by, or under direct or indirect
common control with the Company) which has not been approved by a
majority of the disinterested directors of the Board, if in any such
case such material breach remains uncured after ten days have elapsed
following the date on which the Company gives the Executive written
notice of such breach;
(ii) a breach by the Executive of any duty referred to in
clause (i) above with respect to which at least one prior notice was
given under clause (i);
(iii) any act of dishonesty, misappropriation, embezzlement,
intentional fraud, or similar intentional misconduct by the Executive
involving the Company or any of its affiliates;
(iv) the conviction or the plea of nolo contendre or the
equivalent in respect of a felony;
(v) any damage of a material nature to any property of the
Company or any of its affiliates caused by the Executive's willful
misconduct or negligence;
(vi) the repeated nonprescription use of any controlled
substance or the repeated use of alcohol or any other non-controlled
substance that renders the Executive unfit to serve as an officer of
the Company or its affiliates;
(vii) the Executive's failure to comply with the Board's
instructions within five days; or
(viii) conduct by the Executive that, in the opinion of the
Board, demonstrates unfitness to serve as an officer of the Company or
its affiliates, including, without limitation, a finding by the Board
or any regulatory authority that the Executive committed acts of
unlawful harassment or violated any other state, federal or local law
or ordinance prohibiting discrimination in employment.
Termination of the Executive for Cause pursuant to this Section 6(a) shall be
communicated by a Notice of Termination. For purposes of this Agreement, a
"Notice of Termination" shall mean delivery to the Executive of a copy of a
resolution or resolutions duly adopted by the affirmative vote of not less than
a majority of the directors present (in person or by teleconference) and voting
at a meeting of the Board called and held for that purpose after reasonable
notice to the Executive and reasonable opportunity for the Executive, together
with the Executive's counsel, to be heard before the Board prior to such vote,
finding that in the good faith opinion of the Board, the Executive was guilty of
conduct set forth in clauses (i) through (viii) of this Section 6(a) and
specifying the particulars thereof. For purposes of this Section 6(a), this
Agreement shall terminate on the date specified by the Board in the Notice of
Termination.
(b) (i) This Agreement and the Executive's employment shall terminate
upon the death of the Executive.
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(ii) If the Executive is unable to perform the essential duties and
functions of his position because of a disability, even with a reasonable
accommodation, for one hundred eighty days within any three hundred sixty-five
day period, and the Board, in its reasonable judgment, determines that the
exigencies created by the Executive's disability are such that termination is
warranted, the Board shall have the right and may elect to terminate the
services of the Executive by a Notice of Disability Termination. For purposes of
this Agreement, a "Notice of Disability Termination" shall mean a written notice
that sets forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of the Executive's employment under this Section
6(b)(ii). For purposes of this Agreement, no such purported termination by the
Board shall be effective without such Notice of Disability Termination. This
Agreement shall terminate on the day such Notice of Disability Termination is
received by the Executive.
(c) Should the Executive wish to resign from his position with the
Company during the Term, for other than Good Reason (as defined below), the
Executive shall give fourteen days prior written notice to the Company. This
Agreement shall terminate on the effective date of the resignation defined
above, however, the Company may, at its sole discretion, request that the
Executive perform no job responsibilities and cease his active employment
immediately upon receipt of the notice from the Executive.
(d) The Company shall have the absolute right to terminate the
Executive's employment without Cause at any time. This Agreement shall terminate
one day following receipt of such notice by the Executive, however, the Company
may, at its sole discretion, request that the Executive cease active employment
and perform no more job duties immediately upon provision of such notice to the
Executive.
(e) Should the Executive wish to resign from his position with the
Company for Good Reason during the Term, the Executive shall give seven days
prior written notice to the Company. This Agreement shall terminate on the date
specified in such notice, however, the Company may, at its sole discretion,
request the Executive cease active employment and perform no more job duties
immediately upon receipt of such notice from the Executive.
For purposes of this Agreement, "Good Reason" shall mean the
continuance of any of the following events (without the Executive's prior
written consent) for a period of thirty days after delivery to the Company by
the Executive of a notice of the occurrence of such event:
(i) the assignment to the Executive by the Company of duties
not reasonably consistent with the Executive's positions, duties,
responsibilities, titles or offices at the commencement of the Term or
any material reduction in his duties or responsibilities or any removal
of the Executive from or any failure to re-elect the Executive to any
of such positions (except in connection with the termination of the
Executive's employment for Cause, disability or as a result of the
Executive's death or by the Executive other than for Good Reason); or
(ii) any reduction in the Base Salary; or
(iii) any material breach by the Company of this Agreement.
(f) Subject to the terms of Section 9, if the employment of the
Executive is terminated without Cause or the Executive terminates his employment
for Good Reason, then the Executive shall be entitled to (i) receive, and the
Company shall pay to the Executive without setoff, counterclaim or other
withholding, except as set forth in Section 4(d), a lump sum amount
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(in addition to any salary, benefits or other sums due the Executive through the
Termination Date) equal to (x) his base salary in effect from the Termination
Date through January 7, 2005 (the "Severance Period") and (y) any annual
bonuses, at a level equal to 75% of Base Salary, that would have been
customarily paid during the Severance Period; provided that in no event shall
the sum of clauses (x) and (y) be less than 1.00 times the Base Salary; and (ii)
a continuation of medical and life insurance benefits during the Severance
Period, as if he had remained an active employee. Any amount becoming payable
under Section 6(f)(i) shall be paid in immediately available funds within ten
business days following the Termination Date.
7. Nondisclosure of Confidential Information. (a) The Executive
acknowledges that in the course of his employment he will occupy a position of
trust and confidence. The Executive shall not, except as may be required to
perform his duties or as required by applicable law, disclose to others or use,
directly or indirectly, any Confidential Information.
(b) "Confidential Information" shall mean information about the
Company's business and operations that was learned by the Executive in the
course of his employment by the Company, including, without limitation, any
business plans, product plans, strategy, budget information, proprietary
knowledge, patents, trade secrets, data, formulae, sketches, notebooks,
blueprints, information and client and customer lists and all papers and records
(including computer records) of the documents containing such Confidential
Information, other than information that is publicly disclosed by the Company in
writing. The Executive acknowledges that such Confidential Information is
specialized, unique in nature and of great value to the Company, and that such
information gives the Company a competitive advantage. The Executive agrees to
deliver or return to the Company, at the Company's request at any time or upon
termination or expiration of his employment or as soon as possible thereafter,
all documents, computer tapes and disks, records, lists, data, drawings, prints,
notes and written information (and all copies thereof) furnished by or on behalf
of the Company or prepared by the Executive in the course of his employment by
the Company.
(c) The provisions of this Section 7 shall survive any termination of
this Agreement.
8. Covenant Not to Compete. During the Restricted Period (as defined
below), the Executive shall not, directly or indirectly, enter into the
employment of, render services to, or acquire any interest whatsoever in
(whether for his own account as an individual proprietor, or as a partner,
associate, stockholder, officer, director, consultant, trustee or otherwise), or
otherwise assist, any person or entity engaged (a) in any operations in North
America involving the transmission of radio entertainment programming in
competition with the Company, (b) in the business of manufacturing, marketing or
distributing radios, antennas or other parts for use in devices which receive
broadcasts of XM Satellite Radio Inc. or any successor to XM Satellite Radio
Inc. or (c) that competes, or is likely to compete, with any other aspect of the
business of the Company as conducted at the end of the Term; provided that
nothing in this Agreement shall prevent the purchase or ownership by the
Executive by way of investment of less than five percent of the shares or equity
interest of any corporation or other entity. Without limiting the generality of
the foregoing, the Executive agrees that during the Restricted Period, the
Executive shall not call on or otherwise solicit business or assist others to
solicit business from any of the customers or potential customers of the Company
as to any product or service that competes with any product or service provided
or marketed by or under development by the Company at the end of the Term. The
Executive agrees that during the Restricted Period he will not solicit or assist
others to solicit the employment of or hire any employee of the Company without
the prior written consent of the Company. For purposes of this Agreement, the
"Restricted Period" shall mean three years following the end of the Term;
provided that if the
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employment of the Executive is terminated without Cause or the Executive
terminates his employment for Good Reason, the "Restricted Period" shall be the
longer of: (a) the Severance Period, and (b) two years following the end of the
Term.
9. Change of Control Provisions. (a) Notwithstanding the terms of
Section 6(f), if following a Change of Control (as defined below) the employment
of the Executive is terminated without Cause or the Executive terminates his
employment for Good Reason, then the Executive shall be entitled to (i) receive,
and the Company shall pay to the Executive without setoff, counterclaim or other
withholding, except as set forth in Section 4(e), an amount (in addition to any
salary, benefits or other sums due the Executive through the Termination Date)
equal to 1.75 times the Base Salary; and (ii) a continuation of medical and life
insurance benefits until the second anniversary of the Termination Date, as if
he had remained an active employee. Any amount becoming payable under Section
9(a)(i) shall be paid in immediately available funds within ten business days
following the Termination Date.
(b) For the purposes of this Agreement, a "Change of Control" shall
mean the occurrence of any of the following: (i) the sale, lease, transfer,
conveyance or other disposition, in one or a series of related transactions, of
all or substantially all of the assets of the Company to any "person" or "group"
(as such terms are used in Sections 13(d)(3) and 14(d)(2) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act")), (ii) any person or group
is or becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under
the Exchange Act, except that a person shall be deemed to have "beneficial
ownership" of all shares that any such person has the right to acquire, whether
such right is exercisable immediately or only after the passage of time),
directly or indirectly, of more than 40% of the total voting power of the voting
stock of the Company, including by way of merger, consolidation or otherwise
(other than affiliates of Xxxxxxxxxxx Funds, Inc., Apollo Management, L.P. or
The Blackstone Group, L.P., acting individually or as a group), or (iii) during
any period of two consecutive years, individuals who at the beginning of such
period constituted the Board (together with any new directors whose election by
such Board or whose nomination for election by the stockholders of the Company
was approved by a vote of a majority of the directors of the Company, then still
in office, who were either directors at the beginning of such period or whose
election or nomination for election was previously so approved) cease for any
reason to constitute a majority of the Board then in office.
(d) If the Executive is, in the opinion of a nationally recognized
accounting firm jointly selected by the Executive and the Company, required to
pay an excise tax on "excess parachute payments" (as defined in Section 280G(b)
of the Internal Revenue Code of 1986, as amended (the "Code")) under Section
4999 of the Code as a result of an acceleration of the vesting of stock options,
the Company shall have an absolute and unconditional obligation to pay the
Executive in accordance with the terms of this Section 9 the amount of such
taxes. In addition, the Company shall have an absolute and unconditional
obligation to pay the Executive such additional amounts as are necessary to
place the Executive in the exact same financial position that he would have been
in if he had not incurred any expected tax liability under Section 4999 of the
Code; provided that the Company shall in no event pay the Executive any amounts
with respect to any penalties or interest due under any provision of the Code.
The determination of the exact amount, if any, of any expected "excess parachute
payments" and any expected tax liability under Section 4999 of the Code shall be
made by a nationally-recognized independent accounting firm selected by the
Executive and the Company. The fees and expenses of such accounting firm shall
be paid by the Company. The determination of such accounting firm shall be final
and binding on the parties. The Company irrevocably agrees to pay to the
Executive, in immediately available funds to an account designated in writing by
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the Executive, any amounts to be paid under this Section 9(d) within two
business days after receipt by the Company of written notice from the accounting
firm which sets forth such accounting firm's determination. In addition, in the
event that such payments are not sufficient to pay all excise taxes on "excess
parachute payments" under Section 4999 of the Code as a result of an
acceleration of the vesting of options or for any other reason and to place the
Executive in the exact same financial position that he would have been in if he
had not incurred any expected tax liability under Section 4999 of the Code as a
result of a change in control, then the Company shall have an absolute and
unconditional obligation to pay the Executive such additional amounts as may be
necessary to pay such excise taxes and place the Executive in the exact same
financial position that he would have been had he not incurred any tax liability
as a result of a change in control under the Code. Notwithstanding the
foregoing, in the event that a written ruling (whether public or private) of the
Internal Revenue Service ("IRS") is obtained by or on behalf of the Company or
the Executive, which ruling provides that the Executive is not required to pay,
or is entitled to a refund with respect to, all or any portion of such excise
taxes or additional amounts, the Executive shall promptly reimburse the Company
in an amount equal to all amounts paid to the Executive pursuant to this Section
9 less any excise taxes or additional amounts which remain payable by, or are
not refunded to, the Executive after giving effect to such IRS ruling. Each of
the Company and the Executive agrees to promptly notify the other party if it
receives any such IRS ruling.
10. Remedies. The Executive and Company agree that damages for breach
of any of the covenants under Sections 7 and 8 above will be difficult to
determine and inadequate to remedy the harm which may be caused thereby, and
therefore consent that these covenants may be enforced by temporary or permanent
injunction without the necessity of bond. The Executive believes, as of the date
of this Agreement, that the provisions of this Agreement are reasonable and that
the Executive is capable of gainful employment without breaching this Agreement.
However, should any court or arbitrator decline to enforce any provision of
Section 7 or 8 of this Agreement, this Agreement shall, to the extent applicable
in the circumstances before such court or arbitrator, be deemed to be modified
to restrict the Executive's competition with the Company to the maximum extent
of time, scope and geography which the court or arbitrator shall find
enforceable, and such provisions shall be so enforced.
11. Indemnification. The Company shall indemnify the Executive to the
full extent provided in the Company's Amended and Restated Articles of
Incorporation and Amended and Restated Bylaws and the law of the State of
Delaware in connection with his activities as an officer of the Company.
12. Entire Agreement. The provisions contained herein constitute the
entire agreement between the parties with respect to the subject matter hereof
and supersede any and all prior agreements, understandings and communications
between the parties, oral or written, with respect to such subject matter.
13. Modification. Any waiver, alteration, amendment or modification of
any provisions of this Agreement shall not be valid unless in writing and signed
by both the Executive and the Company.
14. Severability. If any provision of this Agreement shall be declared
to be invalid or unenforceable, in whole or in part, such invalidity or
unenforceability shall not affect the remaining provisions hereof, which shall
remain in full force and effect.
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15. Assignment. The Executive may not assign any of his rights or
delegate any of his duties hereunder without the prior written consent of the
Company. The Company may not assign any of its rights or delegate any of its
obligations hereunder without the prior written consent of the Executive, except
that any successor to the Company by merger or purchase of all or substantially
all of the Company's assets shall assume this Agreement.
16. Binding Effect. This Agreement shall be binding upon and inure to
the benefit of the successors in interest of the Executive and the Company.
17. Notices. All notices and other communications required or permitted
hereunder shall be made in writing and shall be deemed effective when delivered
personally or transmitted by facsimile transmission, one business day after
deposit with a nationally recognized overnight courier (with next day delivery
specified) and five days after mailing by registered or certified mail:
if to the Company:
Sirius Satellite Radio Inc.
1221 Avenue of the Xxxxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel
Telecopier: (000) 000-0000
if to the Executive:
Xxx Xxxxxxx
Address on file at the offices
of the Company
or to such other person or address as either party shall furnish in writing to
the other party from time to time.
18. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made
and to be performed entirely within the State of New York.
19. Non-Mitigation. The Executive shall not be required to mitigate
damages or seek other employment in order to receive compensation or benefits
under Section 6 or 9 of this Agreement; nor shall the amount of any benefit or
payment provided for under Section 6 or 9 of this Agreement be reduced by any
compensation earned by the Executive as the result of employment by another
employer.
20. Arbitration. (a) The Executive and the Company agree that if a
dispute arises concerning or relating to the Executive's employment with the
Company, or the termination of the Executive's employment, such dispute shall be
submitted to binding arbitration under the rules of the American Arbitration
Association regarding resolution of employment disputes in effect at the time
such dispute arises. The arbitration shall take place in New York, New York,
before a single experienced arbitrator licensed to practice law in New York and
selected in accordance with the American Arbitration Association rules and
procedures. Except as provided below, the Executive and the Company agree that
this arbitration procedure will be the
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exclusive means of redress for any disputes relating to or arising from the
Executive's employment with the Company or his termination, including disputes
over rights provided by federal, state, or local statutes, regulations,
ordinances, and common law, including all laws that prohibit discrimination
based on any protected classification. The parties expressly waive the right to
a jury trial, and agree that the arbitrator's award shall be final and binding
on both parties, and shall not be appealable. The arbitrator shall have
discretion to award monetary and other damages, and any other relief that the
arbitrator deems appropriate and is allowed by law. The arbitrator shall have
the discretion to award the prevailing party reasonable costs and attorneys'
fees incurred in bringing or defending an action, and shall award such costs and
fees to the Executive in the event the Executive prevails on the merits of any
action brought hereunder.
(b) The Company and the Executive agree that the sole dispute that is
excepted from Section 20(a) is an action seeking injunctive relief from a court
of competent jurisdiction regarding enforcement and application of Sections 7, 8
or 10 of this Agreement, which action may be brought in addition to, or in place
of, an arbitration proceeding in accordance with Section 20(a).
21. Counterparts. This Agreement may be executed in counterparts, all
of which shall be considered one and the same agreement, and shall become
effective when one or more counterparts have been signed by each of the parties
and delivered to the other party.
22. Executive's Representations. The Executive hereby represents and
warrants to Company that he (a) is not now under any contractual or other
obligation that is inconsistent with or in conflict with this Agreement or that
would prevent, limit, or impair the Executive's performance of his obligations
under this Agreement; (b) is not suffering from, or aware of, any physical or
mental condition which could reasonably be expected to affect his ability to
function as Chief Executive Officer of the Company; (c) has been provided the
opportunity to be, or has been, represented by legal counsel in preparing,
negotiating, executing and delivering this Agreement; and (d) fully understands
the terms and provisions of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
SIRIUS SATELLITE RADIO INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
-------------------------------
Xxxxxxx X. Xxxxxxxx
Executive Vice President and
General Counsel
/s/ Xxx Xxxxxxx
-----------------------------------
Xxx Xxxxxxx
EXHIBIT A
THIS OPTION HAS NOT BEEN REGISTERED UNDER STATE OR FEDERAL SECURITIES
LAWS. THIS OPTION MAY NOT BE TRANSFERRED EXCEPT BY WILL OR UNDER THE LAWS OF
DESCENT AND DISTRIBUTION.
SIRIUS SATELLITE RADIO 1999 LONG-TERM STOCK INCENTIVE PLAN
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT (this "Agreement"), dated as of January 7,
2002 ("Date of Grant"), between SIRIUS SATELLITE RADIO INC., a Delaware
corporation (the "Company"), and XXX XXXXXXX (the "Optionee").
1. Grant of Option. Subject to the terms and conditions of this
Agreement and the Sirius Satellite Radio 1999 Long-Term Stock Incentive Plan (as
amended, supplemented or otherwise modified from time to time, the "Plan"), the
Company hereby grants to the Optionee the right and option (this "Option") to
purchase up to five hundred thousand (500,000) shares (the "Shares") of common
stock, par value $0.001 per share, of the Company at a price per share of $9.46
(the "Exercise Price"). This Option is not intended to qualify as an Incentive
Stock Option for purposes of Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code"). In the case of any stock split, stock dividend or like
change in the Shares occurring after the date hereof, the number of Shares and
the Exercise Price shall be adjusted as set forth in Section 4(b) of the Plan.
This Option shall vest and be exercisable as follows:
(a) The right and option to purchase up to one hundred and
twenty five thousand (125,000) shares shall immediately vest and become
exercisable on the date hereof;
(b) The right and option to purchase up to one hundred and
twenty five thousand (125,000) Shares shall vest and become exercisable
on January 7, 2003 if the Optionee continues to be employed by the
Company until and on such date;
(c) The right and option to purchase up to one hundred and
twenty five thousand (125,000) Shares shall vest and become exercisable
on January 7, 2004 if the Optionee continues to be employed by the
Company until and on such date; and
(d) The right and option to purchase up to one hundred and
twenty five thousand (125,000) Shares shall vest and become exercisable
on January 7, 2005 if the Optionee continues to be employed by the
Company until and on such date.
2. Termination of Option. This Option shall terminate, to the extent
not previously exercised, ten years from the Date of Grant or earlier upon the
expiration of (a) ninety (90) days from the date of termination of the
Optionee's employment with the Company for any reason whatsoever other than
death or Disability (as defined below) or (b) the expiration of one year from
(i) the date of death of the Optionee or (ii) cessation of the Optionee's
employment by reason of Disability (as defined below). Subject to the terms of
the Plan, if the Optionee's employment is terminated by death, this Option shall
be exercisable only by the person or
persons to whom the Optionee's rights under such Option shall pass by the
Optionee's will or by the laws of descent and distribution of the state or
county of the Optionee's domicile at the time of death. "Disability" shall mean
the Optionee is unable to perform the essential duties and functions of his
position because of a disability, even with a reasonable accommodation, for one
hundred eighty days within any three hundred sixty-five day period, and the
Board of the Directors of the Company, in its reasonable judgment, determines
that the exigencies created by the Optionee's disability are such that
termination of employment is warranted. Upon making a determination of
Disability, the Company shall determine the date of the Optionee's termination
of employment.
For purposes of this Agreement, transfer of employment between or among
the Company and/or any Related Company shall not be deemed to constitute a
termination of employment with the Company or the Related Company. "Related
Company", when referring to a subsidiary corporation, shall mean any corporation
(other than the Company) in an unbroken chain of corporations beginning with the
Company if, on the date of this Agreement, each of the corporations other than
the last corporation in the unbroken chain owns stock possessing fifty percent
(50%) or more of the total combined voting power of all classes of stock of one
of the other corporations in such chain. When referring to a parent corporation,
the term "Related Company" shall mean any corporation (other than the Company)
in an unbroken chain of corporations ending with the Company if, on the date of
this Agreement, each of the corporations, other than the Company, owns stock
possessing fifty percent (50%) or more of the total combined voting power of all
classes of stock of one of the other corporations in such chain.
3. Non-transferable. This Option may not be transferred, assigned,
pledged or hypothecated in any manner (whether by operation of law or otherwise)
other than by will or by the applicable laws of descent and distribution, and
shall not be subject to execution, attachment or similar process. Upon any
attempt to transfer, assign, pledge, hypothecate or otherwise dispose of this
Option or of any right or privilege conferred hereby, contrary to the provisions
hereof, or upon the sale or levy or any attachment or similar process upon the
rights and privileges conferred hereby, this Option shall terminate and become
null and void.
4. Exercise. Subject to Sections 1 and 2 of this Agreement and the
terms of the Plan, this Option may be exercised, in whole or in part, by means
of a written notice of exercise signed and delivered by the Optionee (or, in the
case of exercise after death of the Optionee by the executor, administrator,
heir or legatee of the Optionee, as the case may be) to the Company at the
address set forth herein for notices to the Company. Such notice shall (a) state
the number of Shares to be purchased and the date of exercise, and (b) be
accompanied by payment of the Exercise Price in cash, by certified or cashier's
check or by delivery of such other consideration as the administrator of the
Plan may approve.
5. Withholding. Prior to delivery of the Shares purchased upon exercise
of this Option, the Company shall determine the amount of any United States
federal, state and local income tax, if any, which is required to be withheld
under applicable law and shall, as a condition of exercise of this Option and
delivery of certificates representing the Shares purchased upon exercise of this
Option, collect from the Optionee the amount of any such tax to the extent not
previously withheld.
6. Rights of the Optionee. Neither this Option, the execution of this
Agreement nor the exercise of any portion of this Option shall confer upon the
Optionee any right to, or guarantee of, continued employment by the Company, or
in any way limit the right of the Company to
terminate employment of the Optionee at any time, subject to the terms of any
written employment agreement between the Company and the Optionee.
7. Professional Advice. The acceptance and exercise of this Option may
have consequences under federal and state tax and securities laws which may vary
depending upon the individual circumstances of the Optionee. Accordingly, the
Optionee acknowledges that the Optionee has been advised to consult his or her
personal legal and tax advisor in connection with this Agreement and this
Option.
8. Agreement Subject to the Plan. The Option and this Agreement are
subject to the terms and conditions set forth in the Plan and in any amendments
to the Plan existing now or in the future, which terms and conditions are
incorporated herein by reference. A copy of the Plan previously has been
delivered to the Optionee. Should any conflict exist between the provisions of
the Plan and those of this Agreement, the provisions of the Plan shall govern
and control. This Agreement and the Plan constitute the entire understanding
between the Company and the Optionee with respect to this Option.
9. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York without regard to its
conflict of laws principles, and shall bind and inure to the benefit of the
heirs, executors, personal representatives, successors and assigns of the
parties hereto.
10. Notices. Any notice required or permitted to be made or given
hereunder shall be mailed via certified or registered mail or delivered
personally to the addresses set forth below, or as changed from time to time by
written notice to the other:
Company: Sirius Satellite Radio Inc.
1221 Avenue of the Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel
Optionee: Mr. Xxx Xxxxxxx
Address on file at
the office of the Company
Notices and other communications shall be deemed received and effective
upon the earliest of (i) hand delivery to the recipient, (ii) one business day
after deposit with a nationally recognized overnight courier (with next day
delivery specified) and (iii) five (5) days after being mailed by certified or
registered mail, postage prepaid, return receipt.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first above written.
SIRIUS SATELLITE RADIO INC. Optionee:
By:________________________ __________________________
Xxxxxxx Xxxxxxxx Xxx Xxxxxxx
Executive Vice President and
General Counsel
EXHIBIT B
SIRIUS SATELLITE RADIO 1999 LONG-TERM STOCK INCENTIVE PLAN
RESTRICTED STOCK AGREEMENT
THIS RESTRICTED STOCK AGREEMENT (this "Agreement"), dated as of
January 7, 2002 ("Date of Grant"), between SIRIUS SATELLITE RADIO INC., a
Delaware corporation (the "Company"), and Xx. Xxxxxx X. SchumacherGUY XXXXXXX
(the "Executive").
WHEREAS, the Company maintains the Sirius Satellite Radio 1999
Long-Term Incentive Plan (the "Plan"), which is incorporated into and forms a
part of this Agreement, and the Executive has been selected by the committee
administering the Plan (the "Committee") to receive an award of Restricted Stock
under Section 8(a) of the Plan (and thus become a "Participant" as defined in
the Plan).
NOW, THEREFORE, IT IS AGREED, by and between the Company and the
Executive, as follows:
1. Definitions. Terms used in this Agreement that are not defined in
this Agreement are defined in the Plan.
2. Shares Subject to Agreement. The Executive is hereby awarded
10_______0,000 shares of Restricted Stock.
3. Vesting of Restricted Stock. The shares of Restricted Stock shall
vest and become free from restrictions (other than restrictions imposed by the
Company's policies regarding transactions by executive officers in the Company's
securities) as follows:
(a) 34,000 shares of Restricted Stock shall vest, and thus become
free of all restrictions otherwise imposed by this Agreement on the
first anniversary of the Date of Grant, if and only if, (i) the
Executive continues to be employed by the Company until and on such
date and (ii) the average closing price of the Company's common stock
on the Nasdaq National Market during the twenty trading days preceding,
but not including, the first anniversary of the Date of Grant equals or
exceeds $15.00 per share;
(b) 33,000 shares of Restricted Stock shall vest, and thus
become free of all restrictions otherwise imposed by this Agreement on
the second anniversary of the Date of Grant if, and only if, (i) the
Executive continues to be employed by the Company until and on such
date and (ii) the average closing price of the Company's common stock
on the Nasdaq National Market during the twenty trading days preceding,
but not including, the second anniversary of the Date of Grant equals
or exceeds $20.00 per share; and
(c) 33,000 shares of Restricted Stock shall vest, and thus
become free of all restrictions otherwise imposed by this Agreement
on the third anniversary of the Date of Grant if, and only if,
(i) the Executive continues to be employed by the Company until and on
such date and (ii) the average closing price of the Company's common
stock on the Nasdaq National Market during the twenty trading days
preceding, but not including, the third anniversary of the Date of
Grant equals or exceeds $25.00 per share.
The vesting of the shares of Restricted Stock covered by this Agreement
is also subject to acceleration in accordance with Section 13 of the Plan;
provided that in no event shall the ownership by (i) Apollo Investment Fund IV,
L.P. and Apollo Overseas Partners IV, L.P. of shares of the Company's 9.2%
Series A Junior Cumulative Convertible Preferred Stock and shares of the
Company's 9.2% Series B Junior Cumulative Convertible Preferred Stock or (ii)
affiliates of The Blackstone Group L.P. of shares of the Company's 9.2% Series D
Junior Cumulative Convertible Preferred Stock be deemed to constitute a Change
of Control (as defined in the Plan) for the purposes of the Plan.
4. Rights as Stockholder. The Executive shall be entitled to receive
any dividends paid with respect to his shares of Restricted Stock; provided,
that no dividends shall be payable to or for the benefit of the Executive with
respect to record dates occurring either (i) before the Date of Grant or (ii) on
or after the date, if any, on which the Executive has forfeited the Restricted
Stock. The Executive shall be entitled to vote his shares of Restricted Stock
that have not been forfeited to the same extent as would have been applicable to
the Executive if he was then vested in the shares; provided that the Executive
shall not be entitled to vote the shares with respect to record dates for such
voting rights arising either (i) before the Date of Grant or (ii) on or after
the date, if any, on which the Executive has forfeited the Restricted Stock.
5. Transfer and Forfeiture of Shares. On the Executive's Termination
Date, the Executive shall forfeit all of his shares of Restricted Stock that are
not then vested. For purposes of this Agreement, the Executive's "Termination
Date" means his Termination Date as defined in Section 6 of the Employment
Agreement dated as of January 7, 2002 between the Company and the Executive (as
amended, supplemented or otherwise modified, the "Employment Agreement"). Any
shares of Restricted Stock which do not vest on an anniversary of the Date of
Grant in accordance with Section 3 shall be forfeited by the Executive.
6. Death or Disability. Notwithstanding Sections 3 and 5, the Executive
shall become vested in his shares of Restricted Stock as of his Termination Date
before the date his Restricted Stock would otherwise vest under Section 2, if
such Termination Date occurs by reason of the Participant's death or Disability.
For purposes of this Agreement, "Disability" means any physical, mental or other
health condition which substantially impairs the Executive's ability to perform
his assigned duties for one hundred twenty (120) days or more in any two hundred
forty (240) day period or that can be expected to result in death. The Company
shall determine whether the Executive has incurred a Disability on the basis of
medical evidence reasonably acceptable to the Company. Upon making a
determination of Disability, the Company shall determine the date of the
Executive's termination of employment.
7. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York without regard to its
conflict of laws principles, and shall bind and inure to the benefit of the
heirs, executors, personal representatives, successors and assigns of the
parties hereto.
8. Plan Governs. Notwithstanding anything in this Agreement to the
contrary, the terms of this Agreement shall be subject to the terms of the Plan,
a copy of which may be obtained by the Executive from the office of the
Secretary of the Company.
9. Amendment. This Agreement may be amended by written agreement of the
Executive and the Company, without the consent of any other person.
10. Section 83(b) Election. The Executive understands and acknowledges
that (i) he should consult with his tax advisor regarding the advisability of
filing with the Internal Revenue Service an election under ss.83(b) of the
Internal Revenue Code, (ii) that an election under ss.83(b) must be filed within
30 days after the Date of Grant, and (iii) that the Company is under no
obligation to assist the Executive with determining the appropriateness of
filing the election or making the filing itself.
IN WITNESS WHEREOF, the Executive and the Company have executed this
Agreement as of the Date of Grant.
SIRIUS SATELLITE RADIO INC.
By:________________________ __________________________
Xxxxxxx X. Xxxxxxxx Xxx Xxxxxxx
Executive Vice President and
General Counsel
