EXHIBIT 10.8
EXECUTION COPY
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (the "Agreement"), dated as of January 31, 2005, by
and among Zeus Holdings Limited (the "Parent"), a Bermuda corporation, Intelsat
Ltd. (the "Company"), and Xxxxxxx X. Xxxxxxx, a resident of the State of Florida
(the "Executive").
WHEREAS, pursuant to the transactions contemplated by the Transaction
Agreement and Plan of Amalgamation among the Company, Intelsat (Bermuda), Ltd.,
the Parent, Zeus Merger One Limited and Zeus Merger Two Limited dated as of
August 16, 2004 (the "Transaction Agreement"), the Company will become a wholly
owned subsidiary of the Parent; and
WHEREAS, subject to the consummation of the transactions contemplated by
the Transaction Agreement, the Company desires to employ the Executive on a
full-time basis and the Executive desires to be so employed by the Company;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein (including, without limitation, the Company's employment of the
Executive, and the Executive's departure from his present position and
acceptance of employment with the Company and the advantages and benefits
thereby inuring to the Company and the Executive) and for other good and
valuable consideration, the receipt, adequacy and sufficiency of which are
hereby acknowledged by each party hereto, the parties hereby agree as follows:
1. Effectiveness of Agreement and Employment of the Executive.
1.1 Effectiveness of Agreement. This Agreement shall become effective upon
execution by the parties.
1.2 Employment by the Company. The Company hereby employs the Executive as
Executive Vice President and General Counsel and the Executive hereby accepts
such employment as of February 15, 2005 (the "Effective Date"). During the
Employment Period (as defined in Section 3), the Executive shall directly and
exclusively report to, and perform such duties and services for the Company
(including supervising the Company's investment in its subsidiaries and
affiliates (such subsidiaries and affiliates, collectively, "Affiliates")) as
may be designated from time to time by, the Company's Chief Executive Officer.
During the Employment Period, the Executive shall devote all of his business
time and attention to his employment under this Agreement; provided, however,
that, subject to the provisions of Sections 5.1 and 5.3, the Executive may
continue to serve as a non-executive director on the board of directors of only
one company (other than the Company and its Affiliates) during the Employment
Period, unless the Executive obtains the prior written consent of the Company to
serve as a non-executive director on any other board of directors. The Executive
acknowledges that he shall be required to travel on business in connection with
the performance of his duties hereunder.
1.3 Location. During the Employment Period, the Executive's principal place
of employment shall be Washington, D.C.; provided that the Executive shall also
provide services in London; provided, further, that it is the parties' current
intention that the Executive
will spend an appropriate amount of time working at the Company's headquarters,
currently located in Bermuda, in order to fulfill his duties.
2. Compensation and Benefits.
2.1 (a) Salary. During the Employment Period, the Company shall pay the
Executive for services during his employment under this Agreement a base salary
of no less than the annual rate of $450,000 ("Base Salary"). The Base Salary
received by the Executive shall be reviewed by the Compensation Committee of the
Board of the Company and, following an initial public offering of the Company or
a direct or indirect subsidiary or parent of the Company, the Compensation
Committee of the Board of the Company or such parent or subsidiary to be
publicly-traded pursuant to such initial public offering (such applicable
committee, the "Compensation Committee") no less frequently than annually. Any
and all increases to the Executive's Base Salary shall be determined by the
Compensation Committee, in its sole discretion. During the Employment Period,
such Base Salary shall be payable in equal biweekly installments pursuant to the
Company's customary payroll policies in force at the time of payment, less any
required or authorized payroll deductions. The Base Salary may be increased, but
not decreased, during the Employment Period.
(b) Annual Bonus. For each fiscal year during the Employment Period, the
Executive shall be eligible to receive an annual discretionary bonus with a
maximum amount up to 65% of his Base Salary, subject to his satisfaction of
objective performance criteria that have been pre-established by the
Compensation Committee in a consistent manner with those of other senior
executives of the Company. For each fiscal year during the Employment Period,
the Compensation Committee may award an additional bonus, in its sole
discretion, to the Executive of up to 50% of the Executive's Base Salary, in the
event of the Executive's significant out-performance of objective performance
criteria that have been pre-established by the Compensation Committee. During
the Employment Period, the Executive also will be eligible to participate in any
deferred compensation plan that is sponsored by the Company in accordance with
its terms.
(c) Purchased Shares. On January 31, 2005, the Executive purchased shares
of common stock of the Parent ("Common Parent Shares") and Series A 9.75 percent
preferred stock of the Parent ("Preferred Parent Shares"), in an aggregate
number and at the price set forth in the Subscription Agreement between the
Parent and the Executive dated as of January 31, 2005 (such purchased Common
Parent Shares and Preferred Parent Shares, "Purchased Parent Shares").
(d) Equity Compensation. The Executive has received a grant equal to .81%
of the Common Parent Shares outstanding as of Closing ("New Parent Restricted
Shares") as of January 31, 2005, having the terms and conditions provided below
and such other terms and conditions not inconsistent therewith as may be
provided for in the plan under which they are granted. The New Parent Restricted
Shares shall provide that upon payment of any cash distribution or dividend on
the Common Parent Shares to Parent shareholders generally, the holder of such
New Parent Restricted Shares shall have credited to an escrow account an amount
equal to the amount of cash (which cash amount shall be credited with interest
at the lesser of the interest rate applicable to the Parent's revolving credit
agreement, as in effect from time to time,
2
or 5% compound interest per annum, or other property that would have been
distributed to the Executive had the New Parent Restricted Shares not been
subject to restriction, which escrow account shall be distributable as of, and
will be distributed to the Executive as soon as practicable following, the date
upon which such New Parent Restricted Shares vest. It shall be a condition to
the Executive's receipt of New Parent Restricted Shares that he become a party
to the Shareholders Agreement by and among the Parent and the Shareholders named
therein as in effect as of the Closing (the "Shareholders Agreement"). The
Executive acknowledges that the New Parent Restricted Shares will be subject to
the terms and conditions set forth in this Agreement and shall be subject to a
substantial risk of forfeiture and restrictions on transferability. The
Executive will be permitted to transfer the Purchased Parent Shares and the New
Parent Restricted Shares to a grantor trust solely for the benefit of the
Executive and/or the Executive's immediate family members. If the Executive does
not commence employment by the Effective Date, the Parent may repurchase, and
the Executive agrees to sell, the Purchased Parent Shares, free and clear of any
liens, at the price paid by the Executive for the Purchased Parent Shares (less
the value of any dividends, distributions or dividend equivalents previously
paid to the Executive in respect of the Purchased Parent Shares) and the New
Parent Restricted Shares will be immediately forfeited.
(A) Time-Vesting Shares. 40.9 percent of the New Parent Restricted Shares
granted to the Executive hereunder (the "Time-Vesting Shares") shall vest over
sixty months in equal monthly installments commencing on the last day of the
first month following the Closing, subject to the Executive's continued
employment on the date of vesting and to Section 4 below. Subject to the
Executive's continued employment, notwithstanding the foregoing, if "private
equity investors" own less than 40% of the aggregate equity interests, measured
by vote and value, of the Parent ("Private Equity Dilution"), then the
Time-Vesting Shares will become fully vested on the later to occur of (x) the
third anniversary of the Closing or (y) twelve months following the transaction
which causes the Private Equity Dilution. For purposes of this Section
2.1(d)(A), "private equity investors" shall mean the Investors (as defined
below) and any other similar entities or divisions of entities which are similar
type private equity investors including, without limitation, entities which
provide venture capital or long-term share capital in exchange for an ownership
interest in another entity.
(B) Performance Shares. An additional 40.9 percent of the New Parent
Restricted Shares granted to the Executive hereunder shall vest (less any such
percent of shares that have already vested) if and when the Investors have
received a Cumulative Total Return as set forth below (the "Cumulative Total
Return Goals") between 2.5 to 3 times the amount invested by the Investors
collectively during the applicable period over which Cumulative Total Return
Goal is measured (the "Performance Period"), subject to the Executive's
continued employment as of the date, if any, that such Cumulative Total Return
is reached and to Section 4 below. The remainder of the New Parent Restricted
Shares granted to the Executive hereunder shall vest (less any such percent of
shares that have already vested) if and when the Investors have received a
Cumulative Total Return between 4 to 4.5 times the amount invested by the
Investors collectively during the Performance Period, subject to the Executive's
continued employment as of the date, if any, that such Cumulative Total Return
is reached and to Section 4 below (together with the New Parent Restricted
Shares described in the immediately preceding sentence, the "Performance
Shares"). If the Performance Shares remain outstanding but not yet vested as of
the eighth anniversary of the Closing, they shall be forfeited upon such
anniversary.
3
If the Cumulative Total Return is between 2.5 to 3 times or 4 to 4.5 times the
amount invested by the Investors, respectively, the number of Performance Shares
which shall vest shall be interpolated and rounded to the nearest whole share.
(C) Cumulative Total Return. The "Cumulative Total Return" means the sum
(net of all transaction and valuation costs) of (i) all dividends and other
distributions (including management fees) paid to the Investors with respect to
Common Parent Shares and Preferred Parent Shares, (ii) the gross proceeds of any
sale of Common Parent Shares and Preferred Parent Shares by any of the
Investors, and (iii) solely for purposes of determining Cumulative Total Return
as of the eighth anniversary of the Closing, the fair market value of the Common
and Preferred Parent Shares held by the Investors on the eighth anniversary of
the Closing (the "Fair Market Value"), which will be determined by the
Compensation Committee in its sole reasonable discretion. Notwithstanding
anything in this Agreement to the contrary, upon a corporate transaction in
which all of the Common Parent Shares and Preferred Parent shares are converted
into the right to receive cash, Cumulative Total Return shall be finally
determined and there shall be no further opportunity to vest in any Performance
Shares. The "Investors" means each of the members of the Investor Group as
defined in the Shareholders Agreement.
(D) Adjustment. In the event of any stock split, reverse stock split,
dividend, merger, consolidation, recapitalization or similar event affecting the
capital structure of the Parent, the number and kind of shares (or other
property, including without limitation cash) subject to the New Parent
Restricted Shares shall be equitably adjusted to prevent the dilution or
enlargement of the value of the Executive's New Parent Restricted Shares (taking
into account the amounts set aside in the escrow account as a result of such
event).
2.2 Benefits. During the Employment Period, the Executive shall be eligible
to participate, on the same basis and at the same level as other similarly
situated senior executives of the Company generally, in any group insurance,
hospitalization, medical, vision, health and accident, disability, life
insurance and enhanced executive life insurance, fringe benefit and retirement
plans or programs of the Company now existing or hereafter established to the
extent that he is eligible under the general provisions thereof (including
eligibility provisions relating to pre-privatization and post-privatization
employment status). During the Employment Period, the Executive shall be
entitled to 20 days vacation time annually, and with vacation accruals
consistent with the Company's policies at such time as applied to similarly
situated executives of the Company generally up to a maximum of 60 days.
2.3 Expenses. During the Employment Period, pursuant to the Company's
customary reimbursement policies in force at the time of payment, the Executive
shall be promptly reimbursed, subject to the Executive's presentation of
vouchers or receipts therefor, for all expenses incurred by the Executive on
behalf of the Company in the performance of the Executive's duties hereunder.
2.4 Tax Planning Benefits. During the Employment Period, the Company shall
provide the Executive with a cash reimbursement for financial accounting and
planning services up to a maximum of $15,000 per annum.
4
2.5 Signing Bonus. As soon as practicable following the Effective Date, the
Company shall pay Executive a lump sum payment of $120,000 in order to provide
the Executive with the liquidity necessary to pay the required withholding taxes
in connection with the equity grant described in Section 2.1(d) (and
corresponding Section 83(b) election). The Executive shall immediately repay
such amount to the Company in the event that prior to the first anniversary of
the Effective Date, the Executive voluntarily terminates employment without Good
Reason or is terminated by the Company for Cause.
3. Employment Period. The Executive's employment under this Agreement shall
commence as of the Effective Date, and shall terminate on the first anniversary
thereof, unless terminated earlier pursuant to Section 4 (the "Initial
Employment Period"). Unless written notice of either party's desire to terminate
this Agreement has been given to the other party at least ninety days but no
more than one hundred and twenty days prior to the expiration of the Initial
Employment Period (or any renewal thereof contemplated by this sentence), the
term of the Executive's employment hereunder shall be automatically renewed for
successive one-year periods (such term, including the Initial Employment Period,
as it may be extended, the "Employment Period"). A notice of non-renewal
provided by the Company shall be treated as a termination by the Company without
Cause for purposes of Sections 4.4(a), (b), (c) and (d) (and the Company shall
have no additional obligation other than the payment of the Executive's earned
but unpaid compensation through the effective date of such termination, except
as otherwise required by law or the terms of the Company's benefit plans), and a
notice of non-renewal provided by the Executive shall be treated as a
termination by the Executive without Good Reason for purposes of Section 4.6.
4. Termination and Forfeiture of Payments and Benefits.
4.1 Termination by the Company for Cause. The Executive's employment with
the Company may be terminated at any time by the Company for Cause. Upon such a
termination, the Company shall have no obligation to the Executive pursuant to
this Agreement other than the payment of the Executive's earned and unpaid
compensation through the effective date of such termination, except as otherwise
required by law or by the terms of the Company's benefit plans. All New Parent
Restricted Shares (and the related escrow account) that have not yet been vested
(or paid, as applicable) as of the date of termination, shall be forfeited as of
the date of termination. Any Purchased Parent Shares may be repurchased by the
Company at any time following such termination of employment at a price per
Purchased Parent Share equal to the lesser of (i) the greater of (x) the Fair
Market Value of such Purchased Parent Share on the date of the most recent
valuation prior to such termination minus (y) the value of any dividends,
distributions, or dividend equivalents previously paid to the Executive in
respect of such Purchased Parent Share (subject to equitable adjustment in
Parent's discretion to reflect dividends, distributions, corporate transactions,
or similar events, to the extent not reflected in (y)) or $0, or (ii) (x) the
amount paid by the Executive to purchase such Purchased Parent Share minus (y)
the value of any dividends, distributions, or dividend equivalents previously
paid to the Executive in respect of such Purchased Parent Share (subject to
equitable adjustment in Parent's discretion to reflect dividends, distributions,
corporate transactions, or similar events, to the extent not reflected in (y))
but in no event less than $0, and any Common Parent Shares held by the Executive
as a result of the vesting of New Parent Restricted Shares shall be cancelled
and no payment shall be made to the Executive for such Common Parent Shares.
5
For purposes of this Agreement, the term "Cause" shall mean any of the
following: (i) the Executive's failure to perform materially his duties under
the Agreement (other than by reason of illness or disability), (ii) the
Executive's commission of, or plea of no contest to, a felony or his commission
of, or plea of no contest to, any other crime involving moral turpitude or his
commission of a material dishonest act or fraud against the Company or any of
its Affiliates, (iii) any act or omission by the Executive that is the result of
his misconduct or gross negligence and that is, or may reasonably be expected to
be, materially injurious to the financial condition, business or reputation of
the Company or any of its Affiliates, or (iv) the Executive's breach of any
material provision of this Agreement. Any such occurrence described in clause
(i) or (iv) of the preceding sentence that is curable shall constitute "Cause"
only after the Company has given the Executive written notice of, and twenty
(20) business days' opportunity to cure, such violation, and then only if such
occurrence is not cured.
4.2 Permanent Disability. If, during the Employment Period, the Executive
becomes disabled within the meaning of the Company's applicable long-term
disability plan, the Company shall have the right to terminate the Executive's
employment with the Company upon written notice to the Executive. Upon such a
termination, the Company shall have no obligation to the Executive other than to
pay the Executive's earned and unpaid compensation through the effective date of
such termination and to treat the New Parent Restricted Shares as described
below in this Section 4.2, except as otherwise required by law or by the terms
of the Company's benefit plans. Any Time-Vesting Shares (and the related escrow
account) that are not vested as of the date of termination shall vest as of the
date of termination. If the Performance Shares (and the related escrow account)
are not vested as of the date of termination, the Performance Shares (and the
related escrow account) will remain outstanding and if the Investors meet the
Cumulative Total Return Goal prior to the eighth anniversary of the Closing, the
Executive will vest in a number of Performance Shares (and the related escrow
account), at such time as each applicable Cumulative Total Return Goal is met,
equal to the difference between (1) the product of (x) the total number of
Performance Shares which would have been vested as of the date of the
determination had the Executive remained employed through such date and (y) a
fraction, the numerator of which is the period of time that the Executive was
employed by the Company from the Closing and the denominator of which is the
period of time from the Closing until the applicable Cumulative Total Return
Goal is met, and (2) any Performance Shares that already vested. All other
Performance Shares (and the related escrow account) will be forfeited. If the
Performance Shares (and the related escrow account) remain outstanding but not
yet vested as of the eighth anniversary of the Closing, they shall be forfeited.
Section 4.4(d) shall apply to the Company repurchases of Common Parent Shares
held by the Executive as a result of the vesting of New Parent Restricted Shares
and to Company repurchases of Purchased Parent Shares. Notwithstanding the
foregoing, the Compensation Committee, in its sole discretion, may permit the
vesting of any Performance Shares (and the related escrow account) that are not
vested as of the date of termination.
4.3 Death. The Executive's employment with the Company shall terminate
automatically upon the death of the Executive and the Company shall have no
obligation to the Executive or the Executive's estate other than to pay the
Executive's earned and unpaid compensation through the date of the Executive's
death, and to treat the New Parent Restricted Shares as described below in this
Section 4.3, except as otherwise required by law or by the terms of the
Company's benefit plans. Any Time-Vesting Shares (and the related escrow
6
account) that are not vested as of the date of death shall vest as of the date
of death. If the Performance Shares (and the related escrow account) are not
vested as of the date of death, the Performance Shares (and the related escrow
account) will remain outstanding and if the Investors meet the Cumulative Total
Return Goal prior to the eighth anniversary of the Closing, the Executive will
vest in a number of Performance Shares (and the related escrow account), at such
time as each applicable Cumulative Total Return Goal is met, equal to the
difference between (1) the product of (x) the total number of Performance Shares
which would have been vested as of the date of the determination had the
Executive remained employed through such date and (y) a fraction, the numerator
of which is the period of time that the Executive was employed by the Company
from the Closing and the denominator of which is the period of time from the
Closing until the applicable Cumulative Total Return Goal is met, and (2) any
Performance Shares that already vested. All other Performance Shares (and the
related escrow account) will be forfeited. If the Performance Shares (and the
related escrow account) remain outstanding but not yet vested as of the eighth
anniversary of the Closing, they shall be forfeited. Section 4.4(d) shall apply
to the Company repurchases of Common Parent Shares held by the Executive as a
result of the vesting of New Parent Restricted Shares and to Company repurchases
of Purchased Parent Shares. Notwithstanding the foregoing, the Compensation
Committee, in its sole discretion, may permit the vesting of any Performance
Shares (and the related escrow account) that are not vested as of the date of
termination.
4.4 Termination by the Company Without Cause. The Executive's employment
with the Company may be terminated at any time by the Company without Cause. In
such event, the Executive shall have the rights set forth in the subparagraphs
below.
(a) Severance. Subject to the Executive's continued compliance with his
obligations under this Agreement, the Company shall have no obligation to the
Executive other than: (i) the payment of the Executive's earned and unpaid
compensation through the effective date of such termination; (ii) the payment of
any deferred bonus, subject to the provisions of Section 409A of the Internal
Revenue Code of 1986, as amended (the "Code"); (iii) the payment of an amount
equal to the sum of the Executive's annual Base Salary plus the Executive's
maximum bonus amount of 65% of Base Salary (as in effect as of the date of
termination), 50% of which shall be paid to the Executive upon the first
business day following the six month anniversary of the date of termination of
employment and the remainder of which shall be paid to the Executive in equal
installments each month thereafter for six months; and (iv) treatment of the New
Parent Restricted Shares (and, if applicable Purchased Parent Shares) as
described below in Sections 4.4(b), (c) and (d), except as otherwise required by
law or by the terms of the Company's benefit plans (excluding severance plans);
provided, that if the termination without Cause occurs within the six-month
period after a Change of Control (as defined in Section 4.8 below), in lieu of
the cash severance benefits set forth in clause (iii) above, the Executive shall
receive the payment over a 12-month period in equal monthly installments of the
sum of the Executive's annual Base Salary plus the greater of (x) the
Executive's maximum bonus amount of 65% of Base Salary (as in effect as of the
date of termination) and (y) the annual bonus paid to the Executive for the year
immediately preceding the year in which the date of termination occurs . In the
event that the Executive is eligible to receive the severance benefits provided
for by this Section 4.4(a), the Executive shall not be eligible to receive
severance benefits under any other Company plan, policy, or agreement.
7
(b) Time-Vesting Shares. Any unvested Time-Vesting Shares (and the related
escrow account) shall be forfeited as of the date of termination; provided, that
if the termination without Cause occurs within the six-month period after a
Change of Control (as defined in Section 4.8 below), all unvested Time-Vesting
Shares (and the related escrow account) shall vest as of the date of
termination.
(c) Performance Shares. If the Performance Shares (and the related escrow
account) are not vested as of the date of termination, they shall remain
outstanding until the 180th day following the date of termination, and if still
unvested as of such day, shall be forfeited; provided, that in the event that
such termination is within six months following a merger of the Company with or
into, an acquisition by the Company of, or an acquisition of the Company by, any
of the entities set forth on Exhibit C or any transaction involving the
Company's subsidiaries to effectuate the foregoing, the Performance Shares (and
the related escrow account) will remain outstanding and if the Investors meet
the Cumulative Total Return Goal prior to the eighth anniversary of the Closing,
the Executive will vest in a number of Performance Shares (and the related
escrow account), at such time as each applicable Cumulative Total Return Goal is
met, equal to the difference between (1) the product of (x) the total number of
Performance Shares which would have been vested as of the date of the
determination had the Executive remained employed through such date and (y) a
fraction, the numerator of which is the period of time that the Executive was
employed by the Company from the Closing and the denominator of which is the
period of time from the Closing until the applicable Cumulative Total Return
Goal is met, and (2) any Performance Shares that have already vested. All other
Performance Shares (and the related escrow account) will be forfeited. If the
Performance Shares (and the related escrow account) remain outstanding but not
yet vested as of the eighth anniversary of the Closing, they shall be forfeited.
(d) Repurchase Right. Any (i) Common Parent Shares held by the Executive as
a result of the vesting of New Parent Restricted Shares may be repurchased by
the Company at any time during the two-year period following (x) the date of
termination of employment in the event such Common Parent Shares were vested as
of such termination and (y) the vesting of Common Parent Shares in the event
such vesting occurred after the date of termination of employment, and (ii)
Purchased Parent Shares may be repurchased by the Company at any time following
the second anniversary of the date of termination of employment, each at a price
per share equal to the Fair Market Value of such share as determined on the date
of the most recent valuation prior to such termination, provided, that Common
Parent Shares vesting after termination of employment shall be purchased at a
price per share equal to the Fair Market Value of such share as determined on
the date of the most recent valuation prior to the applicable vesting event.
4.5 Termination by the Executive for Good Reason. (a) During the Employment
Period, the Executive's employment with the Company may be terminated by the
Executive for Good Reason, if the Executive provides the Company with notice
within 90 days following the Executive's knowledge of the event constituting
Good Reason. In the event that the Executive terminates his employment with the
Company for Good Reason, the Executive shall be entitled to the same payments
and benefits that he would have been entitled to receive under Section 4.4 if
his employment had been terminated by the Company without Cause and the Company
shall be entitled to the repurchase rights thereunder.
8
(b) For purposes of this Agreement, the term "Good Reason" shall mean any
of the following conditions or events without the Executive's prior consent: (i)
a material diminution of the Executive's position or responsibilities that is
inconsistent with the Executive's title (provided that (x) any change in the
Executive's position or responsibilities that occurs as a result of a corporate
transaction or (y) any change in the Executive's position or responsibilities
pursuant to an internal reorganization, in each case, following which the
Executive's level of position at the Company is not materially diminished shall
not give rise to Good Reason under clause (i) or (ii) of this definition), (ii)
a material breach by the Company of any terms of the Agreement, (iii) a
reduction in the Executive's base salary or bonus potential, or the failure to
pay the Executive any material amount of compensation when due, (iv) a
requirement that the Executive report to any person other than the Chief
Executive Officer of the Company or, (v) a relocation of the Executive's
principal place of business more than fifty (50) miles away from Washington,
D.C. Any such occurrence shall constitute "Good Reason" only after the Executive
has given the Company written notice of, and twenty (20) business days'
opportunity to cure, such violation, and then only if such occurrence is not
cured.
4.6 Termination by the Executive Without Good Reason. The Executive may
voluntarily resign from his employment with the Company without Good Reason,
provided that the Executive shall provide the Company with ninety (90) days'
advance written notice (which notice requirement may be waived, in whole or in
part, by the Company in its sole discretion) of his intent to terminate. Upon
such a termination, the Company shall have no obligation other than the payment
of the Executive's earned but unpaid compensation through the effective date of
such termination, except as otherwise required by law or by the terms of the
Company's benefit plans. All unvested New Parent Restricted Shares, shall be
immediately forfeited. Any Common Parent Shares held by the Executive as a
result of the vesting of New Parent Restricted Shares and any Purchased Parent
Shares may be repurchased by the Company at any time following such termination
of employment at a purchase price per share equal to the lesser of (i) the
greater of (x) the Fair Market Value of such share on the date of the most
recent valuation prior to such termination minus (y) the value of any dividends,
distributions, or dividend equivalents previously paid to the Executive in
respect of such share (subject to equitable adjustment in Parent's discretion to
reflect dividends, distributions, corporate transactions, or similar events, to
the extent not reflected in (y)) or $0, or (ii) (x) Fair Market Value at Closing
based on the Valuation Research valuation as of Closing (for Common Parent
Shares held by the Executive as a result of the vesting of New Parent Restricted
Shares) or the amount paid by the Executive to purchase such Purchased Parent
Share (for Purchased Parent Shares) minus (y) the value of any dividends,
distributions, or dividend equivalents previously paid to the Executive in
respect of such share (subject to equitable adjustment in Parent's discretion to
reflect dividends, distributions, corporate transactions, or similar events, to
the extent not reflected in (y)) but in no event less than $0.
4.7 Release of Claims and Cooperation. As a condition to receiving the
payments set forth in Section 4.4 or Section 4.5 upon a termination by the
Company without Cause (or upon a notice of non-renewal by the Company) or by the
Executive for Good Reason, the Executive shall be required to execute and not
revoke a waiver and release of claims in favor of the Company and its
Affiliates, in the form attached hereto as Exhibit A and, for a 180-day period
following such employment termination, shall make himself reasonably available
to
9
provide transition services and consultation to the Company, subject to his
other business and personal commitments.
4.8 Definition of Change of Control. A "Change of Control" shall mean (i)
the acquisition by any individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended
from time to time) not affiliated with the Parent or its owners immediately
prior to such acquisition of beneficial ownership (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of more than 50%, indirectly or
directly, of the equity vote of the Parent (other than any acquisition by any
employee benefit plan (or related trust) sponsored or maintained by the Company
or any affiliate) or (ii) consummation of an amalgamation, a merger or
consolidation of the Parent or any direct or indirect subsidiary thereof with
any other entity or a sale or other disposition of all or substantially all of
the assets of the Parent following which the voting securities of the Parent
that are outstanding immediately prior to such transaction cease to represent
(either by remaining outstanding or by being converted into voting securities of
the surviving entity (or the entity that owns substantially all of the Parent's
assets either directly or through one or more subsidiaries) or any parent or
other Affiliate thereof) at least 50% of the combined voting power of the
securities of the Parent or, if the Parent is not the surviving entity, such
surviving entity (or the entity that owns substantially all of the Parent's
assets either directly or through one or more subsidiaries) or any parent or
other Affiliate thereof, outstanding immediately after such transaction.
4.9 Resignation. Upon a termination of employment, the Executive will upon
the Company's request resign from all boards of directors and officer positions
of the Company and any of its Affiliates.
5. Covenants.
5.1 The Executive understands that, in the course of his or her employment
with the Company, he or she will be given access to confidential information and
trade secrets including, but not limit to, discoveries, ideas, concepts,
software in various stages of development, designs, drawings, specifications,
techniques, models, data, source code, object code, documentation, diagrams,
flowcharts, research, development, processes, procedures, "know-how," marketing
techniques and materials, marketing and development plans, business plans,
merger or acquisition investigations, customer names and other information
relating to customers, price lists, pricing policies, and financial information
("Confidential Information"). Confidential Information also includes any
information described above which the Company obtains from another party and
which the Company treats as proprietary or designates as Confidential
Information, whether or not owned or developed by the Company. The Executive
agrees that during his employment by the Company and thereafter to hold in
confidence and not to directly or indirectly reveal, report, publish, disclose,
or transfer any Confidential Information to any person or entity, or utilize any
Confidential Information for any purpose, except in the course of the
Executive's work for the Company. The Executive agrees to turn over all copies
of Confidential Information in his control to the Company upon request or upon
termination of his employment with the Company. For purposes of this Section
5.1, Company shall include Affiliates of the Company. The Executive agrees to
enter into as of the Effective Date the Company's general Conflict of Interest
and Confidentiality Agreement set forth on Exhibit B.
10
5.2 The Executive agrees that, during his employment with the Company and
for one (1) year thereafter (the "Restricted Period"), he will not, either
directly or indirectly, hire Company employees or former employees (which shall
for this purpose include any individual employed by the Company at any point
during the year preceding such hiring), induce, persuade, solicit or attempt to
induce, persuade, or solicit any of the Company's employees to leave the
Company's employ, nor will he help others to do so. This means, among other
things, that if the Executive's employment with the Company terminates (whether
voluntarily or involuntarily), he shall refrain for one (1) year from giving any
person or entity the names of his former, fellow employees or any information
about them, as well as refrain from in any way helping any person or entity hire
any of his former, fellow employees away from the Company. This shall not be
construed to prohibit general solicitations of employment through the placing of
advertisements. For purposes of this Section 5.2, Company shall include
Affiliates of the Company.
5.3 The Executive agrees that, during the Restricted Period, he shall not,
without the prior written consent of the Board, engage in or become associated
with any business or other endeavor engaged in or competitive with the
businesses (the "Protected Businesses") conducted by the Company or its
Affiliates (which Protected Businesses include, without limitation, the
provision of FSS services on a retail basis, a wholesale basis and on a
distributor basis); provided, that, the Protected Businesses shall not include
any other businesses of an entity (i) directly or indirectly owned or controlled
by any Investor (unless those businesses are businesses of the Company or any of
its Subsidiaries or businesses of other entities in which the Company, directly
or indirectly, owns 20% or more of the equity interests) or (ii) in which the
Company, directly or indirectly, owns less than 20% of the equity interests. For
these purposes, the Executive shall be considered to have become "associated
with" a business or other endeavor if the Executive becomes directly or
indirectly involved as an owner, principal, employee, officer, director,
independent contractor, representative, stockholder, financial backer, agent,
partner, advisor, lender, or in any other individual or representative capacity
with any individual, partnership, corporation or other organization that is
engaged in that business. The foregoing shall not be construed to forbid the
Executive from (i) engaging in the practice of law with a law firm or similar
entity, where such firm or entity may have among its clients (and the Executive
may assist in representing) businesses engaged in the Protected Businesses so
long as the Executive complies with the provisions of Section 5.1 or (ii) making
or retaining investments in less than one percent of the equity of any entity,
if such equity is listed on a national securities exchange or regularly traded
in an over-the-counter market.
5.4 The Executive agrees that during and after his employment by the
Company, the Executive will assist the Company and its Affiliates (after his
employment, as a former employee only, and not as an attorney) in the defense of
any claims, or potential claims that may be made or threatened to be made
against the Company or any of its Affiliates in any action, suit or proceeding,
whether civil, criminal, administrative, investigative or otherwise (a
"Proceeding"), and will assist the Company and its Affiliates in the prosecution
of any claims that may be made by the Company or any of its Affiliates in any
Proceeding, to the extent that such claims may relate to the Executive's
employment or the period of the Executive's employment by the Company. The
Executive agrees, unless precluded by law, to promptly inform the Company if the
Executive is asked to participate (or otherwise become involved) in any
Proceeding involving such claims or potential claims. The Executive also agrees,
unless precluded by law, to promptly inform the Company if the Executive is
asked to assist in any
11
investigation (whether governmental or otherwise) of the Company or any of its
Affiliates (or their actions), regardless of whether a lawsuit has then been
filed against the Company or any of its Affiliates with respect to such
investigation. The Company agrees to reimburse the Executive for all of the
Executive's reasonable out-of-pocket expenses associated with such assistance,
including lost wages or other benefits, travel expenses and any attorneys' fees.
5.5 The Company and the Executive acknowledge that the time, scope,
geographic area and other provisions of this Section 5 have been specifically
negotiated by sophisticated commercial parties and agree that all such
provisions are reasonable under the circumstances of the activities contemplated
by this Agreement. The Executive acknowledges and agrees that the terms of this
Section 5: (i) are reasonable in light of all of the circumstances, (ii) are
sufficiently limited to protect the legitimate interests of the Company and its
Affiliates, (iii) impose no undue hardship on the Executive and (iv) are not
injurious to the public. The Executive further acknowledges and agrees that (x)
the Executive's breach of the provisions of this Section 5 will cause the
Company irreparable harm, which cannot be adequately compensated by money
damages, and (y) if the Company elects to prevent the Executive from breaching
such provisions by obtaining an injunction against the Executive, there is a
reasonable probability of the Company's eventual success on the merits. The
Executive consents and agrees that if the Executive commits any such breach or
threatens to commit any breach, the Company shall be entitled to temporary and
permanent injunctive relief from a court of competent jurisdiction, without
posting any bond or other security and without the necessity of proof of actual
damage, in addition to, and not in lieu of, such other remedies as may be
available to the Company for such breach, including the recovery of money
damages. The parties hereto acknowledge and agree that the provisions of Section
7.9 below are accurate and necessary because (A) this Agreement is entered into
in the District of Columbia, (B) as of the Closing, the District of Columbia
will have a substantial relationship to the parties hereto and to the
transactions contemplated by the Transaction Agreement, (C) the use of District
of Columbia law provides certainty to the parties hereto in any covenant
litigation in the United States, and (D) enforcement of the provisions of this
Section 5 would not violate any fundamental public policy of the District of
Columbia or any other jurisdiction. In the event that the agreements in this
Section 5 shall be determined by any court of competent jurisdiction to be
unenforceable by reason of their extending for too great a period of time or
over too great a geographical area or by reason of their being too extensive in
any other respect, they shall be interpreted to extend only over the maximum
period of time for which they may be enforceable and/or over the maximum
geographical area as to which they may be enforceable and/or to the maximum
extent in all other respects as to which they may be enforceable, all as
determined by such court in such action.
6. Notices. Any notice or communication given by either party hereto to the
other shall be in writing and personally delivered or mailed by registered or
certified mail, return receipt requested, postage prepaid, or by facsimile, to
the following addresses:
12
if to the Company:
Intelsat, Ltd.
Xxxxx Xxxxx, 0xx Xxxxx
00 Xxxxx Xxx Xxxx
Xxxxxxxx XX 00, Bermuda
Telecopy: x000-000-0000
Attention: Chief Executive Officer
If to the Parent:
Zeus Holdings Limited
Canon's Court, 22 Victoria Street
Xxxxxxxx, XX EX Bermuda
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: President c/o Xxxxx Xxxxxxxx
Xxxxxx Xxxxxxx
With a copy to:
Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxxxx X. Silk, Esq.
Xxxx Xxxxxx, Esq.
if to the Executive:
Xxxxxxx X. Xxxxxxx
0000 Xxxxx X'Xxxx Xxx
Xxxxxx Xxxxx, Xxxxxxx 00000
Any notice shall be deemed given when actually delivered to such party at
the designated address, or five days after such notice has been mailed or sent
by overnight courier or when sent by facsimile with printed confirmation,
whichever comes earliest. Any person entitled to receive notice may designate in
writing, by notice to the other, such other address to which notices to such
person shall thereafter be sent.
7. Miscellaneous.
7.1 Representation. No agreements or obligations exist to which the
Executive is a party or otherwise bound, in writing or otherwise, that in any
way interfere with, impede or preclude him from fulfilling all of the terms and
conditions of this Agreement and there are no material (i) threatened claims
that (x) are unresolved and still outstanding as of the
13
date hereof and (y) have been received by the Executive in writing during the 24
months prior to the date hereof, (ii) existing claims, and (iii) pending claims,
in each case, against him of which he is aware, if any, as a result of his
employment with any previous employer or his membership on any boards of
directors which could be reasonably expected to be materially damaging to the
Executive monetarily, reputationally or otherwise.
7.2 Entire Agreement. This Agreement and the documents incorporated by
reference herein contain the entire understanding of the parties in respect of
their subject matter and supersede upon their effectiveness all other prior
plans, arrangements, agreements and understandings.
7.3 Amendment; Waiver. This Agreement may not be amended, supplemented,
canceled or discharged, except by written instrument executed by the party
against whom enforcement is sought. No failure to exercise, and no delay in
exercising, any right, power or privilege hereunder shall operate as a waiver
thereof. No waiver of any breach of any provision of this Agreement shall be
deemed to be a waiver of any preceding or succeeding breach of the same or any
other provision.
7.4 Binding Effect; Assignment. The rights and obligations of this
Agreement shall bind and inure to the benefit of any successor of the Company by
reorganization, merger or consolidation, or any assignee of all or substantially
all of the Company's business and properties. The Company may assign its rights
and obligations under this Agreement to any of its Affiliates without the
consent of the Executive. The Executive's rights or obligations under this
Agreement may not be assigned by the Executive.
7.5 Headings. The headings contained in this Agreement are for reference
purposes only and shall not affect the meaning or interpretation of this
Agreement.
7.6 Governing Law; Interpretation. This Agreement shall be construed in
accordance with and governed for all purposes by the laws and public policy
(other than conflict of laws principles) of the District of Columbia applicable
to contracts executed and to be wholly performed therein.
7.7 Further Assurances. Each of the parties agrees to execute, acknowledge,
deliver and perform, and cause to be executed, acknowledged, delivered and
performed, at any time and from time to time, as the case may be, all such
further acts, deeds, assignments, transfers, conveyances, powers of attorney and
assurances as may be reasonably necessary to carry out the provisions or intent
of this Agreement.
7.8 Severability. The parties have carefully reviewed the provisions of
this Agreement and agree that they are fair and equitable. However, in light of
the possibility of differing interpretations of law and changes in
circumstances, the parties agree that if any one or more of the provisions of
this Agreement shall be determined by a court of competent jurisdiction to be
invalid, void or unenforceable, the remainder of the provisions of this
Agreement shall, to the extent permitted by law, remain in full force and effect
and shall in no way be affected, impaired or invalidated. Moreover, if any of
the provisions contained in this Agreement are determined by a court of
competent jurisdiction to be excessively broad as to
14
duration, activity, geographic application or subject, it shall be construed, by
limiting or reducing it to the extent legally permitted, so as to be enforceable
to the extent compatible with then applicable law.
7.9 Dispute Resolution. Arbitration will be the method of resolving
disputes under the Agreement, other than disputes arising under Section 5. All
arbitrations arising out of this Agreement shall be conducted in Washington,
D.C. Subject to the following provisions, the arbitration shall be conducted in
accordance with the rules of the American Arbitration Association (the
"Association") then in effect. Any award entered by the arbitrators shall be
final, binding and nonappealable and judgment may be entered thereon by either
party in accordance with applicable law in any court of competent jurisdiction.
This arbitration provision shall be specifically enforceable. The arbitrators
shall have no authority to modify any provision of this Agreement or to award a
remedy for a dispute involving this Agreement other than a benefit specifically
provided under or by virtue of the Agreement. Each party shall be responsible
for its own expenses relating to the conduct of the arbitration (including
reasonable attorneys' fees and expenses) and shall share the fees of the
Association equally.
7.10 Legal Fees: Other Expenses. The Company will promptly reimburse the
Executive (a) for all reasonable and documented legal fees and related expenses
incurred in connection with the drafting, negotiation and execution of this
Agreement and (b) subject to a maximum of $10,000, for all reasonable and
documented expenses incurred by the Executive with respect to the trip made by
the Executive to London in December 2004 in connection with interviewing for his
position with the Company.
7.11 Indemnification. The Company will, to a degree no less favorable than would
be applicable under its policies and contractual obligations to similarly
situated senior executives as of immediately prior to the Closing, indemnify and
hold the Executive harmless from any and all liability arising from his good
faith performance of services pursuant to this Agreement as an employee,
officer, or director of the Company, its subsidiaries and any of its Affiliates.
In addition, the Executive will have the benefit of coverage under any D&O
insurance policy that the Company may have in place to the same extent as
similarly situated senior executives of the Company.
7.12 Withholding Taxes. All payments hereunder shall be subject to any and
all applicable federal, state, local and foreign withholding taxes and all other
applicable withholding amounts. Without limiting the generality of the foregoing
the delivery of Common Parent Shares upon vesting of New Parent Restricted
Shares shall be conditioned upon the Executive's satisfaction of all applicable
withholding requirements by direct payment to the Parent, withholding from cash
payments otherwise due to the Executive, or a combination thereof.
7.13 Counterparts. This Agreement may be executed in or more counterparts,
each of which shall be deemed an original but all of which together shall
constitute the same instrument.
15
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
INTELSAT LTD
By:
---------------------------------------
THE PARENT
By:
---------------------------------------
THE EXECUTIVE
16
EXHIBIT A
FORM OF SEPARATION AGREEMENT AND RELEASE
This Separation Agreement and Release of Claims ("Agreement") is made by
and among NAME ("Employee"), an individual, Zeus Holdings Limited (the "Parent")
and Intelsat Ltd. ("Intelsat" or the "Company").
WHEREAS, the Employee is a party to an Employment Agreement with the
Parent and the Company, dated as of January 31, 2005 (the "Employment
Agreement"); and
WHEREAS, the Employee's employment with Intelsat will terminate as of
____________ and Intelsat desires to provide Employee with separation benefits
as set forth in his Employment Agreement to assist Employee in the period of
transition following Employee's termination;
NOW THEREFORE, in consideration of the mutual promises and releases
contained herein and for other good and valuable consideration, the sufficiency
of which is hereby acknowledged, the parties agree as follows:
1) SEPARATION BENEFITS.
a) SEPARATION DATE AND FINAL PAYCHECK. Employee's employment with Intelsat
will terminate effective __________ (the "Separation Date"). The
Employee received normal compensation up to and including that date,
including a lump sum payment for all earned but unused vacation less
all required tax withholdings and other authorized deductions.
b) SEVERANCE PAY. Following Employee's execution and non-revocation of
this Agreement, and provided all Company property has been returned,
Intelsat will pay to Employee severance pay in accordance with the
terms of the Employment Agreement, less all required tax withholdings
and other authorized deductions.
c) CONTINUED COVERAGE UNDER GROUP HEALTH PLANS. Employee shall be entitled
to elect to continue coverage under each of the Company's group health
plans in which he was enrolled as of the date his coverage ceases in
accordance with the terms of the Employment Agreement, consistent with
the status and level of coverage that was in place as of such date, in
accordance with the requirements of the Consolidate Omnibus Budget
Reconciliation Act of 1985 and its relevant regulations ("COBRA").
Employee shall be solely responsible for paying the full amount of all
premiums that are chargeable in connection with such coverage, subject
to all requirements of COBRA.
FOR THOSE ELIGIBLE ONLY:
d) RETIREE MEDICAL BENEFITS. Intelsat will apply the length of the
Employee's severance period to determine eligibility to receive retiree
medical benefits.
A-1
e) Except as set forth in this Agreement or as required by federal, state
or local law, Employee shall not be entitled to any additional benefits
relating to Employee's separation of employment; provided, however,
that this Agreement does not affect or impair Employee's rights to the
benefits identified on Schedule 1 to this Agreement [LIST SPECIFIC
ENTITLEMENTS].
2) RELEASE. Employee, on Employee's own part and on behalf of Employee's
dependents, heirs, executors, administrators, assigns, and successors, and
each of them, hereby covenants not to xxx and fully releases, acquits, and
discharges the Parent, Intelsat, and their respective parent, subsidiaries,
affiliates, owners, trustees, directors, officers, agents, employees,
stockholders, representatives, assigns, and successors (collectively
referred to as "Intelsat Releasees") with respect to and from any and all
claims, wages, agreements, contracts, covenants, actions, suits, causes of
action, expenses, attorneys' fees, damages, and liabilities of whatever
kind or nature in law, equity or otherwise, whether known or unknown,
suspected or unsuspected, and whether or not concealed or hidden, which
Employee has at any time heretofore owned or held against said Intelsat
Releasees, including, without limitation, those arising out of or in any
way connected with Employee's employment relationship with Intelsat or
Employee's separation from employment with Intelsat, except with respect to
those benefits set forth in Paragraph 1 of this Agreement.
3) TIME TO CONSIDER AGREEMENT. Employee may take twenty-one (21) days from the
date this Release is presented to Employee to consider whether to execute
this Release, and may wish to consult with an attorney prior to execution
of this Release. Employee, by signing this Agreement, specially
acknowledges that he/she is waiving his/her right to pursue any claims
under federal, state or local discrimination laws, including the Age
Discrimination in Employment Act, 29 U.S.C. Section 626 et seq., which have
arisen prior to the execution of this Release. This release shall become
final and irrevocable upon execution by the Employee, except that if
Employee is age 40 or older, Employee may revoke the Release at any time
during the seven (7) day period following Employee's execution of the
Release, after which time it shall be final and irrevocable.
4) RESTRICTIVE COVENANTS INTACT. Employee hereby acknowledges the continuing
validity and enforceability of the terms of the Employment Agreement
(including without limitation the noncompetition covenant of Section 5.3
(the "Noncompete")), the Conflict of Interest and Confidentiality
Agreement, and/or any other confidentiality agreement or restrictive
covenant that Employee signed during Employee's employment with Intelsat.
Employee hereby affirms his/her understanding that Employee must remain in
compliance with those terms following the Separation Date. In the event
that it should be proven in a court of competent jurisdiction that Employee
has materially violated any of the terms of the Noncompete or the
Confidentiality Agreement and has failed to cure such breach following
receipt of written notice of same and a reasonable opportunity to cure,
Employee shall repay Intelsat, in addition to any other relief or damages
to which Intelsat might be entitled, the Separation Benefits described in
subparagraph 1(b).
5) CONFIDENTIALITY. Employee and Intelsat agree that the existence and terms
of this Agreement are strictly confidential and that neither party shall
disclose the existence or terms of this Agreement except as required by law
or regulation. Employee further agrees
A-2
that if Employee breaches this confidentiality provision, Employee shall
repay Intelsat the Separation Benefits described in subparagraph 1(b).
6) NONDISPARAGEMENT. Employee hereby covenants and agrees that Employee will
not at any time, directly or indirectly, orally, in writing or through any
medium (including, but not limited to, the press or other media, computer
networks or bulletin boards, or any other form of communication) disparage,
defame, or otherwise damage or assail the reputation, integrity or
professionalism of Intelsat or any of the Intelsat Releasees. Employee
further agrees that if Employee breaches this nondisparagement provision,
Employee shall repay Intelsat the Separation Benefits described in
subparagraph 1(b).
7) REFERENCES. All inquiries to Intelsat concerning Employee's employment
shall be directed to the [Senior Vice President of Human Resources], who
shall confirm dates of employment and level of compensation of the Employee
during Employee's employment with Intelsat.
8) MISCELLANEOUS. This Agreement is governed by the laws of the District of
Columbia. If any of the provisions of this Agreement are held to be illegal
or unenforceable, the Agreement shall be revised only to the extent
necessary to make such provision(s) legal and enforceable.
9) RETURN OF PROPERTY. Employee hereby represents to the Company that all
property belonging to Intelsat has been returned, including, without
limitation, all keys, access cards, passwords, access codes, and other
information necessary to access any computer or electronic database; all
books, files, documents, and electronic media; and all Company property of
any kind that Employee has in his/her possession or control, or that
Employee obtained from the Company.
10) ENTIRE AGREEMENT. Employee agrees that this Agreement contains and
comprises the entire agreement and understanding between Employee, the
Parent and the Company regarding Employee's termination of employment; that
there are no additional promises between Employee and the Parent and/or the
Company other than those contained in this Agreement or any continuing
obligations as described in paragraphs 1(e) and 4; and that this Agreement
shall not be changed or modified in any way except through a writing that
is signed by both the Employee and the Company; provided, that the
obligations of Employee under the Shareholders Agreement remain in effect
without amendment by this Agreement.
A-3
The parties acknowledge that they have read the foregoing Agreement,
understand its contents, and accept and agree to the provisions it contains
voluntarily and knowingly, and with full understanding of its consequences.
Intelsat Ltd.
By:
------------------------------------- -------------------------------------
EMPLOYEE NAME: [NAME]
[TITLE]
Date: Date:
-------------------------------- ------------------------------
A-4
EXHIBIT B
INTELSAT CONFLICT OF INTEREST
AND CONFIDENTIALITY AGREEMENT
In consideration of my employment or continuing employment by Intelsat and the
compensation received from Intelsat by me from time to time and other good and
valuable consideration, the sufficiency of which I hereby acknowledge, I,
_____________________________________________ (hereinafter referred to as
"Employee"), agree as follows:
(A) PRIOR UNDERSTANDING
1. Employee warrants as follows:
INITIAL AS APPROPRIATE:
a. That he or she is ( )* / is not ( ) restricted by any contract with a
previous employer or any other person or business from accepting
employment with Intelsat,
b. That he or she has ( )* / has not ( ) signed any confidentiality,
non-disclosure, or non-competition agreement with a previous employer
or any other person or business that would affect Employee's ability
to perform his or her duties for Intelsat, and
c. That he or she is ( )* / is not ( ) under any other obligations to a
previous employer or any other person or business except as may exist
under federal or common law.
*PLEASE PROVIDE DETAILS AND COPIES OF SUCH CONTRACTS OR AGREEMENTS TO YOUR
HUMAN RESOURCES REPRESENTATIVE PRIOR TO EMPLOYMENT.
2. Employee agrees that he or she will not disclose to Intelsat any trade
secrets acquired during his or her employment or association with a previous
employer or acquired during his or her employment or association with any
other entity. Employee acknowledges that any disclosure to Intelsat in
violation of this Paragraph may constitute cause for discharge from
employment.
(B) FULL EFFORTS WHILE EMPLOYED
Intelsat is entitled to Employee's full-time efforts during the course of
employment. Employee may not use the facilities of, or identification with,
Intelsat to carry on a private business or profession. Employee shall also not
engage in a profit or non-profit activity outside employment with Intelsat if
this activity:
B-1
a. Is in competition with Intelsat or provides goods, services, or
assistance to a competitor;
b. Involves doing business with a supplier of goods or services to
Intelsat or any Intelsat customer;
c. Interferes with the Employee's assigned duties at Intelsat.
Notwithstanding the foregoing, nothing herein shall per se prevent the Employee
from performing his duties in connection with service as a non-executive
director on the board of directors of another company pursuant to Section 1.2 of
the Employee's Employment Agreement, dated as of January 31, 2005, by and among
Zeus Holdings Limited, Intelsat, Ltd., and the Employee, so long as such duties
do not interfere with the Employee's duties at Intelsat.
(C) INVENTIONS AND DISCOVERIES
Inventions and Discoveries
Except as may be provided otherwise in prior written agreements between the
Employee and Intelsat, Employee will disclose and assign to Intelsat all
designs, improvements, inventions, and discoveries relating to the business of
Intelsat that have originated or will originate in connection with work done for
Intelsat, that are made, first reduced to practice, discussed, or conceived by
Employee or by Employee jointly with others during any previous or future period
of employment with Intelsat. The foregoing obligation to disclose and assign to
Intelsat the designs, improvements, inventions, and discoveries of Employee
shall apply whether or not they are first reduced to practice, devised, or
conceived during regular working hours, or on Intelsat's premises, and/or at the
expense of Intelsat. All such designs, improvements, inventions, and discoveries
shall remain Intelsat's property whether or not so disclosed or assigned and
Employee will cooperate fully with Intelsat during and after Employee's
employment in accomplishing the intent of this provision. Per written agreement
by and between Intelsat and Employee, Intelsat, at its option, may elect to
share royalties accruing to Intelsat resulting from Employee's efforts as
described herein. As to all such designs, improvements, inventions, mask works,
and discoveries, Employee will assist Intelsat in every proper way (but at
Intelsat's expense) to obtain and from time to time enforce patents, copyrights,
trademarks, trade secrets, and other proprietary rights and protections related
to said designs, improvements, inventions, mask works, and discoveries in all
countries, and to that end will execute all documents for use in applying for
and obtaining such patents, copyrights, trademarks, trade secrets, and other
proprietary rights and protections on and enforcing such designs, improvements,
inventions, and discoveries, as Intelsat may desire together with any
assignments thereof to Intelsat by persons designated by it.
Agreements Presently in Effect
Exhibit 1 is a list and summary of all agreements presently in effect between
Employee and others (excepting prior agreements between Employee and Intelsat)
relating to any prior employment or right, title, or interest in or to his or
her part of future inventions, improvements, discoveries, and new ideas, or to
patent applications or patents relating thereto; and he or she warrants that
Exhibit 1 is a complete list of such agreements. A copy of each agreement so
listed
B-2
is attached hereto; and if no such list or no such copies are attached, Employee
warrants that no such agreements are now in effect.
Patents, Applications, Inventions
Exhibit 2 is a list and summary of all patents issued on inventions made by
Employee before entering Intelsat's employ, all pending applications filed on
such inventions, and all such inventions for which no patents have been obtained
or applications therefore filed, and he or she warrants that Exhibit 2 is a
complete list of such patents, applications, and inventions. All such patents,
applications, and inventions so listed are excluded from the operation of this
Agreement; and if no such list is attached, Employee warrants that no such
patents, applications, or inventions exist.
Non-Applicability
Paragraph C of this Agreement does not apply to an invention which:
1. Was developed entirely on the Employee's own time without using
Intelsat's equipment, supplies, facilities, or trade secret
information; and
2. Does not relate at the time of conception or reduction to practice of
the invention to Intelsat's business, or actual or demonstrably
anticipated research or development of Intelsat; and
3. Does not result from any work performed by the employee for Intelsat
(California Labor Code, Art. 3.5, Paragraph 2870).
(D) CONFIDENTIAL INFORMATION
Employee understands that, in the course of his or her employment with Intelsat,
he or she will be given access to Confidential Information and trade secrets
including, but not limit to, discoveries, ideas, concepts, software in various
stages of development, designs, drawings, specifications, techniques, models,
data, source code, object code, documentation, diagrams, flowcharts, research,
development, processes, procedures, "know-how," marketing techniques and
materials, marketing and development plans, business plans, merger or
acquisition investigations, customer names and other information relating to
customers, price lists, pricing policies, and financial information.
Confidential Information also includes any information described above which
Intelsat obtains from another party and which Intelsat treats as proprietary or
designates as Confidential Information, whether or not owned or developed by
Intelsat. Employee agrees that during his or her employment by Intelsat and
thereafter to hold in confidence and not to directly or indirectly reveal,
report, publish, disclose, or transfer any Confidential Information to any
person or entity, or utilize any Confidential Information for any purpose,
except in the course of Employee's work for Intelsat. Employee agrees to turn
over all copies of Confidential Information in his or her control to Intelsat
upon request or upon termination of his or her employment with Intelsat.
B-3
(E) NON-SOLICITATION OF EMPLOYEES
Employee agrees that during his or her employment with Intelsat and for one (1)
year thereafter, he or she will not, either directly or indirectly, hire
Intelsat employees or former employees (which shall for this purpose include any
individual employed by Intelstat at any point during the year preceding such
hiring), induce, persuade, solicit or attempt to induce, persuade, or solicit
any of Intelsat's employees to leave Intelsat's employ, nor will he or she help
others to do so. This means, among other things, that if Employee's employment
with Intelsat terminates (whether voluntarily or involuntarily), he or she shall
refrain for one (1) year from giving any person or entity the names of his or
her former, fellow employees or any information about them, as well as refrain
from in any way helping any person or entity hire any of his or her former,
fellow employees away from Intelsat. This shall not be construed to prohibit
general solicitations of employment through the placing of advertisements.
(F) REASONABLENESS OF RESTRICTIONS AND AT-WILL EMPLOYMENT
Employee acknowledges and agrees that the restrictive covenants contained in
this Agreement (1) are necessary for the protection of the Company's business;
(2) will not unduly restrict Employee's ability to earn a livelihood after
termination of employment; (3) are reasonable in time, territory, and scope; and
(4) do not provide for any guaranteed term of employment and that employment
remains at-will, except as may otherwise be provided in the Employment Agreement
between the Employee, Intelstat, and Zeus Holdings Limited, dated as of February
15, 2005.
(G) ASSIGNABILITY
This Agreement may be assigned by the Company in the event of a merger or
consolidation of the Company or in connection with the sale of all or
substantially all of the Company's business.
(H) REFORMATION AND BLUE PENCILING
The covenants of this Agreement shall be severable, and if any of them is held
invalid because of its duration, scope of area or activity, or any other reason,
Employee agrees that such covenant shall be adjusted or modified by the court to
the extent necessary to cure that invalidity, and the modified covenant shall
thereafter be enforceable as if originally made in this Agreement.
(I) MODIFICATION
This Agreement may be modified only by a written document signed by the General
Counsel of Intelsat.
(J) BREACH OF AGREEMENT
Employee agrees that, if he or she should ever breach any of the provisions of
the Agreement, he or she shall be personally liable to Intelsat for any direct
and indirect damages suffered by Intelsat, including, but not limited to,
reasonable attorneys' fees and expenses incurred in connection with actions
undertaken by Intelsat to enforce this Agreement or to seek redress of
B-4
any breach of this Agreement. Employee further agrees that an impending or
existing violation of any of the provisions of this Agreement would cause
Intelsat irreparable injury for which it would have no adequate remedy at law,
and agrees that Intelsat shall be entitled to obtain injunctive relief
prohibiting such violation, in addition to any other rights and remedies
available to it at law or in equity, without posting any bond or other security
and without the necessity of proof of actual damage, in addition to, and not in
lieu of, such other remedies as may be available to the Company for such breach,
including the recovery of money damages.
(K) ENFORCEMENT OF PROVISIONS
This Agreement (1) constitutes my entire agreement with Intelsat with respect to
the subject matter hereof, (2) shall be binding on my heirs, executors,
administrators, and legal representatives, and (3) shall inure to the benefit of
Intelsat's successors and assignees.
(L) GOVERNING LAW
This Agreement shall be governed, construed, and enforced in accordance with the
laws of the District of Columbia.
IN WITNESS HEREOF, Employee has caused this Agreement to be duly executed.
Date: _________________________
Signature: _________________________
Employee Name (Printed): _________________________
Social Security Number: _________________________
Mailing Address: _________________________
_________________________
_________________________
B-5
EXHIBIT 1
AGREEMENTS PRESENTLY IN EFFECT
Attached hereto is a list and summary of all agreements presently in effect
between the Employee and others relating to any prior employment or to any
right, title, or interest in or to his or her part or future inventions,
improvements, discoveries, and new ideas, or to patent applications or patents
relating thereto; and he or she warrants that this is a complete list of such
agreements. A copy of each agreement so listed is also attached hereto; and if
no such list or no such copies are attached, the Employee warrants that no such
agreements are in effect.
B-6
EXHIBIT 2
PATENTS, APPLICATIONS, INVENTIONS
Attached hereto is a list and summary of all patents issued or inventions
made by the Employee before entering the Employee's employ, all pending
applications filed on such inventions, and all such inventions for which no
patents have been obtained or applications therefore filed and he or she
warrants that this is a complete list of such patents, applications, and
inventions. All such patents, applications, and inventions so listed are
excluded from the operations of this Agreement, and if no such list is attached,
the Employee warrants that no such patents, applications, or inventions exist.
B-7
EXHIBIT C
New Skies
PanAmSat
Eutelsat
SES Global
