Exhibit 10.7
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT, dated as of March 7, 2001 (this
"Agreement"), between SIRIUS SATELLITE RADIO INC., a Delaware corporation (the
"Company"), and Xxxx X. Xxxxxx (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 Senior Vice President, Chief Financial Officer, of
the Company. In such capacity, the Executive shall be responsible primarily for
supervising the financial affairs of the Company. 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 financial affairs of the
Company described above 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. It is
acknowledged that the Executive has made, and may continue to make, passive
investments which will require a portion of his time and attention but the
Executive agrees that such investments will not interfere with his full-time
commitment to the Company. The Executive shall not be required by this Agreement
to perform duties for any entity other than the Company and its subsidiaries.
(b) The Executive shall generally perform his duties and conduct his
business at the principal offices of the Company in New York, New York.
(c) The Executive shall report to the Chief Executive Officer of the
Company.
3. Term. The term of this Agreement shall commence on April 1, 2001,
and end on March 30, 2004, unless terminated earlier pursuant to the provisions
of Section 6 (the "Term").
4. Compensation. (a) Base Salary. During the Term, the Executive shall
be paid an annual base salary of $300,000, subject to any increases that the
Chief Executive Officer of the Company shall approve. All amounts paid to the
Executive under this Agreement shall be in U.S. dollars. 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) Stock Options. On the first day of the Term, the Company shall
grant to the Executive an option to purchase 300,000 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 April 4, 2001. Such
options shall also be subject to the terms and conditions set forth in the
Option Agreement attached to this Agreement as Exhibit A.
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(c) All compensation paid to the Executive hereunder shall be subject
to any payroll and withholding deductions required by any applicable law,
including, without limitation, federal, New York state and New York City income
tax withholding, federal unemployment tax and social security (FICA).
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. The Executive shall present to the Company from time to time an
itemized account of such expenses in such form as may be required by the Company
from time to time.
(b) During the Term, the Executive shall be entitled to participate
fully in any bonus grants, benefit plans, programs, policies and fringe benefits
which may be made available to the senior officers of the Company generally,
including, without limitation, medical, dental and life insurance; provided that
the Executive shall participate in any 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 by
the Board of Directors of the Company (the "Board") or the compensation
committee thereof. With respect to any annual bonus program which may be
established by the Company, the Board or any committee thereof, the Company
agrees that the Executive shall be entitled to annual bonuses, if any, on the
same basis as other senior officers of the Company.
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) Termination for Cause. 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:
(i) a material breach by the Executive of the terms of his
employment 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 thirty days have
elapsed following the date on which the Company gives the Executive
written notice of such breach;
(ii) the repeated material 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 conduct 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;
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(v) any damage of a material nature to any property of the
Company or any of its affiliates caused by the Executive's willful or
grossly negligent conduct;
(vi) the repeated nonprescription use of any controlled
substance or the repeated use of alcohol or any other non-controlled
substance that the Board reasonably determines renders the Executive
unfit to serve as an officer or employee of the Company or its
affiliates;
(vii) the Executive's failure to comply with the Board's
reasonable written instructions, after thirty days written notice; or
(viii) conduct by the Executive that in a good faith written
determination of the Board demonstrates unfitness to serve as an
officer or employee 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 applicable to the business of the Company
or any of its affiliates.
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 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
in detail. For purposes of Section 6(a), this Agreement shall terminate on the
date specified by the Board in the Notice of Termination.
(b) Death or Disability. (i) This Agreement and the Executive's
employment hereunder shall terminate upon the death of the Executive. For
purposes of this Section 6(b)(i), this Agreement shall terminate on the date of
the Executive's death.
(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 Company, in its reasonable judgment, determines that the
exigencies created by the Executive's disability are such that termination is
warranted, the Company 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
Company shall be effective without such Notice of Disability Termination. This
Agreement shall terminate on the day after such Notice of Disability Termination
is received by the Executive.
(c) Voluntary Resignation. 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. Failure to provide such notice shall entitle the Company to
terminate this Agreement effective on the last business day on which the
Executive reported for work at his principal place of employment with the
Company. This
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Agreement shall terminate on the effective date of the resignation as 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.
(d) Without Cause. The Company shall have the absolute right to
terminate the Executive's employment without Cause at any time. If the Company
elects to terminate the Executive without Cause, the Company shall give seven
days written notice to the Executive. This Agreement shall terminate seven days
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) For Good Reason. 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. Failure to provide such
notice shall entitle the Company to fix the Termination Date as of the last
business day on which the Executive reported for work at his principal place of
employment with 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.
For purposes of this Agreement, "Good Reason" shall mean the
continuance of any of the following events (without the Executive's express
prior written consent) for a period of seven days (or thirty days in the case of
items (i) and (v) below) 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 unreasonable 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 Executive's annual base salary from the
previous year; or
(iii) any failure of the Company to comply with the terms of
Section 5(b) as it relates to annual bonuses; or
(iv) a relocation of the Company's executive offices to a
location outside of the New York metropolitan area; or
(v) any material breach by the Company of any provision of this
Agreement.
(f) Compensation and Benefits Upon Termination. (i) If the employment
of the Executive is terminated without Cause or the Executive terminates for
Good Reason before July 1, 2001, then the Executive shall be entitled to
receive, and the Company shall pay to the Executive without setoff, counterclaim
or other withholding, except as set forth in Section 4(c), $150,000 (in addition
to any salary, benefits or other sums due the Executive through the Termination
Date). Any amount becoming payable under this Section 6(f)(i) shall be paid in
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immediately available funds within ten business days following the Termination
Date.
(ii) If the employment of the Executive is terminated without Cause or
the Executive terminates for Good Reason on or after July 1, 2001, then the
Executive shall be entitled to receive, and the Company shall pay to the
Executive without setoff, counterclaim or other withholding, except as set forth
in Section 4(c), an amount (in addition to any salary, benefits or other sums
due the Executive through the Termination Date) equal to the Executive's
annualized base salary then in effect. Any amount becoming payable under this
Section 6(f)(ii) shall be paid in immediately available funds within ten
business days following the Termination Date.
(iii) If this Agreement is terminated by the Executive or the Company
for any reason other than those specified in Sections 6(f)(i) and 6(f)(ii)
before July 1, 2001, including resignation by the Executive without Good Reason
or termination by the Company with Cause, the Executive shall be entitled to no
compensation or other benefits under the Agreement other than those which are
due the Executive through 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 is not disclosed by the Company for
financial reporting purposes and that was learned by the Executive in the course
of his employment by the Company, including, without limitation, any business
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. 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 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. For two years following the end of the Term
or, in the event the Executive has been terminated without Cause or has resigned
for Good Reason, for one year following such termination without Cause or
resignation for Good Reason (the "Restricted Period"), the Executive will 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 in any operations in North America involving the transmission of radio
entertainment programming in competition with the Company or 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 up to
five percent of the shares or equity interest of any corporation or other
entity. Without limiting the generality
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of the foregoing, the Executive agrees that during the Restricted Period, the
Executive will 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 actually 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.
9. Gross-Up Provisions. (a) If the Executive is, in the opinion of a
nationally recognized accounting firm selected by the Executive in his sole
discretion, expected 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 options or for any other reason, the Company shall have an absolute
and unconditional obligation to pay the Executive in accordance with the terms
of this Section 9 the expected 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 the
nationally-recognized independent accounting firm selected by the Executive. The
fees and expenses of such accounting firm shall be paid by the Company in
advance. 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 the
Executive, any amounts to be paid under this Section 9 within two 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 expressly 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.
(b) The provisions of this Section 9 shall survive any termination of
this Agreement.
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
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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.
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.
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. Notice. All notices and other communications required or permitted
hereunder shall be made in writing and shall be deemed effective when initially
transmitted by courier or facsimile transmission 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:
Xxxx X. Xxxxxx
(address on file at office of the Company)
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or to such other person or address as either of the parties 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 of this Agreement; nor shall the amount of any benefit or
payment provided for under Section 6 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 in effect at the time such dispute arises. The arbitration shall
take place in New York, New York, and both the Executive and the Company agrees
to submit to the jurisdiction of the arbitrator 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
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 or
8 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 parties.
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) has been provided the opportunity to be, or has been,
represented by legal counsel in preparing, negotiating, executing and delivering
this Agreement; and (c) 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
Senior Vice President,
General Counsel and Secretary
/s/ Xxxx X. Xxxxxx
-------------------------------
Xxxx X. Xxxxxx
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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 April 4,
2001 ("Date of Grant"), between SIRIUS SATELLITE RADIO INC., a Delaware
corporation (the "Company"), and Xxxx X. Xxxxxx (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 three hundred thousand (300,000) shares (the "Shares") of common
stock, par value $0.001 per share, of the Company at a price per share of
$_______1 (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 seventy five thousand
(75,000) Shares shall vest and become exercisable on October 4,
2001 if the Optionee continues to be employed by the Company
until and on such date;
(b) The right and option to purchase up to seventy five thousand
(75,000) Shares shall vest and become exercisable on April 4,
2002 if the Optionee continues to be employed by the Company
until and on such date;
(c) The right and option to purchase up to seventy five thousand
(75,000) Shares shall vest and become exercisable on October 4,
2002 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 seventy five thousand
(75,000) Shares shall vest and become exercisable on April 4,
2003 if the Optionee continues to be employed by the Company
until and on such date.
The vesting of this Option is also subject to acceleration in
accordance with the provisions of Section 13 of the Plan; provided that in no
event shall the ownership by (i) Apollo
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1 Closing Price of the common stock on April 4, 2001
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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.
2. Termination of Option. This Option shall terminate, to the extent
not previously exercised, ten (10) 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 (1) year
from (i) the date of death of the Optionee or (ii) cessation of the Optionee's
employment or contractual relationship by reason of Disability (as defined
below). Subject to the terms of the Plan, if the Optionee's employment or
contractual relationship 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 any physical, mental or other health condition
which substantially impairs the Optionee's ability to perform his or her
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 Optionee 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
Optionee's termination of employment or contractual relationship.
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
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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: Xxxx X. Xxxxxx
(address on file at office of the Company)
Notices and other communications shall be deemed received and effective
upon the earlier of (i) hand delivery to the recipient, or (ii) five (5) days
after being mailed by certified or registered mail, postage prepaid, return
receipt.
13
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first above written.
SIRIUS SATELLITE RADIO INC. Optionee:
By: /s/ Xxxxxxx X. Xxxxxxxx /s/ Xxxx X. Xxxxxx
------------------------------ ---------------------------------
Xxxxxxx X. Xxxxxxxx Xxxx X. Xxxxxx
Senior Vice President and
General Counsel
