EXHIBIT 10.2
EXECUTION COPY
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (the "AGREEMENT"), dated as of January 28,
2005, by and among Zeus Holdings Limited (the "PARENT"), a Bermuda
corporation, Intelsat (Bermuda), Ltd. (the "COMPANY"), and the individual set
forth on ATTACHMENT 1 (the "EXECUTIVE").
WHEREAS, pursuant to the transactions contemplated by the
Transaction Agreement and Plan of Amalgamation among the Company, Intelsat,
Ltd. ("Intelsat"), Intelsat (Bermuda), Ltd., the Parent, Zeus Merger One
Limited and Zeus Merger Two Limited dated as of August 16, 2004 (the
"TRANSACTION AGREEMENT"), Intelsat will become a wholly-owned subsidiary of
the Parent and the Company will become an indirectly wholly-owned subsidiary
of the Parent;
WHEREAS, the Executive is currently employed by Intelsat pursuant
to the Prior Agreements as identified on ATTACHMENT 1; 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 advantages and benefits thereby inuring
to 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 the Closing (as defined in the Transaction Agreement);
PROVIDED, HOWEVER, that in the event that the transactions contemplated by the
Transaction Agreement are formally abandoned, this Agreement shall be null
and void AB INITIO and shall have no force and effect.
1.2 EMPLOYMENT BY THE COMPANY. The Company hereby employs the
Executive in the position set forth on ATTACHMENT 1 and the Executive hereby
accepts such employment with the Company as of the Closing. 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,
as may be designated from time to time by the individual specified on
ATTACHMENT 1, or such other person designated by the Company. The
subsidiaries and affiliates of the Company shall hereinafter be referred to
as, collectively, "AFFILIATES". During the Employment Period, the Executive
shall devote all of his business time and attention to his employment under
this Agreement; PROVIDED, HOWEVER, that the Executive may continue to engage
in the outside activities set forth on ATTACHMENT 1 during the Employment
Period. 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 Bermuda.
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 set forth on ATTACHMENT 1 ("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 (the "MAXIMUM BONUS AMOUNT") up to the percentage
of his Base Salary set forth on ATTACHMENT 1, subject to his satisfaction of
objective performance criteria that have been pre-established by the
Compensation Committee in a consistent manner with those of senior executives
of Intelsat. 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 Maximum Bonus Amount, 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 Intelsat
in accordance with its terms.
(c) EQUITY COMPENSATION. (i) EXISTING EQUITY. The options
granted to the Executive under the Intelsat, Ltd. 2001 Share Option Plan (the
"2001 PLAN OPTIONS") and the Intelsat, Ltd. 2004 Share Incentive Plan (the
"2004 PLAN OPTIONS"), and the restricted stock granted to the Executive (the
"RS"), all of which are listed on Schedule 1 hereto and continue to be
outstanding as of the Closing, shall be treated as of the Closing as set
forth herein, notwithstanding the provisions of the Transaction Agreement:
(A) Each of the Executive's 2001 Plan Options shall be cancelled in
exchange for a cash payment, on January 16, 2006, equal to the
aggregate Spread (as defined in Section 2.1(c)(i)(D) below) of
such options, less applicable withholding taxes.
(B) 75% of each vesting tranche of the Executive's 2004 Plan Options
shall be cancelled in exchange for the crediting to an account
(the "DEFERRED CASH ACCOUNT") on the terms set forth in Section
2.1(c)(ii) below, of an amount
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equal to the aggregate Spread of the options so cancelled. 25% of
each vesting tranche of the Executive's 2004 Plan Options shall
be cancelled in exchange for a cash payment, as of the Closing,
equal to the aggregate Spread of such options, less applicable
withholding taxes.
(C) 75% of the Executive's RS shall be cancelled in exchange for the
crediting to the Deferred Cash Account on the terms set forth in
Section 2.1(c)(ii) below of an amount equal to $18.75 per share
subject to the RS. 25% of each vesting tranche of the Executive's
RS shall be cancelled in exchange for a cash payment, as of the
Closing, equal to $18.75 for each RS so cancelled, less
applicable withholding taxes.
(D) The "SPREAD" of a 2001 Plan Option or a 2004 Plan Option shall
mean the excess, if any, of (i) $18.75 over (ii) the per-share
exercise price thereof.
(ii) DEFERRED CASH ACCOUNTS. Any amounts credited to a Deferred
Cash Account pursuant to Section 2.1(c)(i)(B) or (C) shall accrue interest at
the lesser of the interest rate applicable to the Parent's revolving credit
agreement, as in effect from time to time, or 5% compound interest per
annum. The Deferred Cash Account shall, subject to the Executive's continued
employment hereunder on the vesting date and to Section 4 below, vest and be
payable as follows: two-thirds of the balance shall be payable to the
Executive on January 16, 2006 and the remaining one third shall be paid on
the second anniversary of the Closing, in each case subject to applicable
withholding.
(iii) PURCHASED PARENT SHARES. 100% of the after-tax proceeds
payable to the Executive upon the Closing pursuant to the second sentence of
each of clauses (B) and (C) of Section 2.1(c)(i) shall be applied to purchase
shares of common stock of the Parent ("COMMON PARENT SHARES") and Series A
9.75 percent preferred stock of the Parent ("PREFERRED PARENT SHARES") at the
same price per share and in the same proportion that the Investors purchase
such shares (such purchased Common Parent Shares and Preferred Parent Shares,
"PURCHASED PARENT SHARES").
(iv) NEW PARENT RESTRICTED SHARES. The Executive shall receive a
grant of a number of restricted Common Parent Shares as set forth on
ATTACHMENT 1 ("NEW PARENT RESTRICTED SHARES") at or as soon as practicable
following the Closing, 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 rate set forth in Section 2.1(c)(ii)) 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, (subject to the provisions of Section 409A of the
Internal Revenue Code of 1986, as amended (the "Code")), 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
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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.
(A) VESTING OF NEW PARENT RESTRICTED SHARES. Fifty percent of the
New Parent Restricted Shares shall vest in equal monthly installments
commencing on February 27, 2005, subject to the Executive's continued
employment on the date of vesting and to Section 4 below. The remaining
fifty percent of the New Parent Restricted Shares shall vest at the later of
(x) the sixth month anniversary of the Closing or (y) the transition to a new
CEO of Intelsat, PROVIDED that the Executive reasonably cooperates in the
implementation of such transition.
(B) 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).
(d) EXPATRIATE BENEFITS AND PERQUISITES. During the Employment
Period, the Executive shall be entitled to the expatriate benefits and
perquisites set forth on ATTACHMENT 1.
(e) TRANSACTION-RELATED BONUS. The Executive shall be eligible to
receive a cash bonus, based upon the achievement of the goals set forth in
Schedule 2 hereto (the "PERFORMANCE GOALS"), in accordance with the terms of
such schedule, which shall be payable on the Closing with respect to the
Performance Goals that are achieved and verified as of the Closing, and as
soon as practicable following the date that such Performance Goals are
achieved and verified during the Employment Period with respect to any other
Performance Goals. For the avoidance of doubt, and notwithstanding anything
herein to the contrary, any bonus payable pursuant to this Section 2.1(e)
shall not be taken into account in computing any benefits under any plan,
program or arrangement of Intelsat or its Affiliates.
(f) BENEFITS. During the Employment Period, the Executive shall
be eligible to participate, on the same basis and at the same level as
similarly situated senior executives of Intelsat 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 Intelsat 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). The Executive shall receive credit
for service prior to the Closing for all purposes to the extent provided in
Section 3.8(b) of the Transaction Agreement. During the Employment Period,
the Executive shall be entitled to a number of days of vacation time annually
as set forth on ATTACHMENT 1, consistent with the Company's policies at such
time as may be mutually agreed by the parties hereto.
(g) 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
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all expenses incurred by the Executive on behalf of the Company in the
performance of the Executive's duties hereunder.
(h) EXECUTIVE AUTOMOBILE BENEFITS. During the Employment Period,
the Company shall continue to provide the Executive with automobile benefits
consistent with the level of such benefits as in effect from Intelsat on the
date hereof.
3. EMPLOYMENT PERIOD. The Executive's employment under this
Agreement shall commence as of the Closing, and shall terminate on the second
anniversary thereof, unless terminated earlier pursuant to Section 4 (the
"EMPLOYMENT PERIOD").
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 vested and the balance of the Deferred Cash
Account that has not yet been paid 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.
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
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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 and any Deferred Cash Account as described below
in this Section 4.2, except as otherwise required by law or by the terms of
the Company's benefit plans. Upon termination for permanent disability,
subject to the provisions of Section 409A of the Code, the balance of the
Executive's Deferred Cash Account (if any) shall vest and be paid out as soon
as practicable following such termination of employment. Any New Parent
Restricted Shares (and the related escrow account) that are not vested as of
the date of termination shall vest as of the date of termination. 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 December 31, 2009, PROVIDED, that the purchase
price per share shall be equal to the Fair Market Value of such share as
determined on the date of the most recent valuation prior to the date of
repurchase.
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 and any
Deferred Cash Account as described below in this Section 4.3, except as
otherwise required by law or by the terms of the Company's benefit plans. In
the event of the Executive's termination of employment by reason of the
Executive's death, subject to the provisions of Section 409A of the Code, the
balance of the Executive's Deferred Cash Account (if any) shall vest and be
paid out as soon as practicable following such termination of employment.
Any New Parent Restricted Shares (and the related escrow account) that are
not vested as of the date of death shall vest as of the date of death. 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 December 31, 2009, PROVIDED, that the
purchase price per share shall be equal to the Fair Market Value of such
share as determined on the date of the most recent valuation prior to the
date of repurchase.
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 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, if any, (as in effect as of the
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date of termination), 50% of which shall be paid to the Executive upon the later
of the first business day following the six month anniversary of the date of
termination of employment or January 15, 2006 and the remainder of which shall
be paid to the Executive in equal installments each month thereafter for six
months; (iv) treatment of the Deferred Cash Account and the New Parent
Restricted Shares (and, if applicable, Purchased Parent Shares) as described
below in Section 4.4(b), (c) and (d), respectively; (v) on the later of the
first business day following the six month anniversary of the date of
termination of employment or January 15, 2006, payout of benefits previously
accrued under Intelsat's Supplemental Executive Retirement Plan and (vi)
executive outplacement benefits, except as otherwise required by law or by the
terms of Intelsat's benefit plans (excluding severance plans); PROVIDED, that in
the event that such termination is within six months following the Closing, (A)
in lieu of the benefit set forth in clause (iii), the Company shall pay the
Executive over a 24-month period commencing on the later of the first business
day following the six month anniversary of the date of termination of employment
or January 15, 2006 in equal monthly installments the product of (x) two and a
half and (y) the sum of the Executive's annual base salary and the Executive's
target bonus amount (each, as in effect as of immediately prior to the Closing),
(B) in lieu of the benefit set forth in clause (iv) with respect to any
Purchased Parent Shares, any Purchased Parent Shares shall be returned to the
Company in exchange for a refund of the full purchase price within 30 days
following such return and (C) in lieu of the benefit set forth in clause (iv)
with respect to any Parent Restricted Shares, the Executive will be paid a lump
sum cash amount within 30 days following the date of termination of employment
equal to any amount withheld by the Company in connection with any Section 83(b)
election made by the Executive with respect to the New Parent Restricted Shares.
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.
(b) DEFERRED CASH ACCOUNT. Subject to the provisions of Section
409A of the Code, the Executive's Deferred Cash Account (if any) will vest in
full and be paid out as soon as practicable following the later of the first
business day following January 15, 2006 or the date of termination of
employment.
(c) NEW PARENT RESTRICTED SHARES. Any unvested New Parent
Restricted 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 New Parent Restricted Shares (and the
related escrow account) shall vest as of the date of termination.
(d) REPURCHASE RIGHT. 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 December 31, 2009, PROVIDED, that the purchase price per share
shall be equal to the Fair Market Value of such share as determined on the
date of the most recent valuation prior to the date of repurchase.
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
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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.
(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 other than as provided in
ATTACHMENT 1, or the failure to pay the Executive any material amount of
compensation when due, or, (iv) a relocation of the Executive's principal
place of business more than fifty (50) miles away from the location set forth
as the Executive's principal place of business in Section 1.3. 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, and any portion of the Deferred
Cash Account that has not yet vested as of the date of termination, 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 Shares (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.
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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 expiration of the
Employment Period) 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 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
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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, the "Company" shall include
Affiliates of the Company. The Executive agrees to enter into as of the Closing
Intelsat's general Conflict of Interest and Confidentiality Agreement set forth
on EXHIBIT B.
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 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 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
10
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 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:
11
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
and:
Intelsat Global Service Corporation
0000 Xxxxxxxxxxxxx Xxxxx, XX
Xxxxxxxxxx, XX 00000-0000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: General Counsel and Executive Vice President for
Regulatory Affairs
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:
The most recent address on file for the Executive at the Company.
12
With a copy to:
Xxxxxx X. Xxxxxxxxxx, Esq.
Shearman & Sterling LLP
000 Xxxxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
000-000-0000 (facsimile)
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.
7.2 ENTIRE AGREEMENT. This Agreement and the documents
incorporated by reference herein, including, without limitation, the Prior
Agreements, if any, specified on ATTACHMENT 1, 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, including, without limitation, the Prior Agreement between
the parties with respect to such subject matter, and including any rights the
Executive may have under Intelsat's annual incentive compensation plan for
2004.
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
13
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 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. The Company will promptly reimburse the Executive
for all reasonable and documented legal fees and related expenses incurred in
connection with the drafting, negotiation and execution of this Agreement and
the other documents relating to the equity arrangements contemplated
hereunder.
7.11 INDEMNIFICATION. The Company will, to a degree no less
favorable than would be applicable under its policies and contractual
obligations to the Executive 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 as an employee, officer, or
director of the Company. 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 executives of the Company and Intelsat.
14
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, all cash payments to the Executive for 2001 Plan
Options, 2004 Plan Options and RS shall be subject to applicable withholding,
and 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.
8. EXCISE TAX TREATMENT. If the amount of payment made under
this Agreement or otherwise would trigger the 20% excise tax under the
"golden parachute" limits of Section 4999 of the Code, then the amount of
severance payments under Section 4.4(a)(iii) (or severance under Section
4.4(a) specifically paid in lieu of severance under Section 4.4(a)(iii)) will
be automatically scaled back (but not below zero) if and to the extent that
the payments do not exceed the "golden parachute" limits of Code Section
280G, as long as the net effect of the reduction is that, on an after-tax
basis (taking into account federal, state and local income tax and the 20%
excise tax and any interest and penalties imposed with respect thereto), the
Executive is receiving more from the reduced severance payments than from the
higher severance payments that would have been subject to the 20% excise
tax. Notwithstanding the foregoing, however, if the net effect of the
reduction in severance payments under Section 4.4(a)(iii) of this Agreement
(or severance under Section 4.4(a) specifically paid in lieu of severance
under Section 4.4(a)(iii)) is such that, on an after-tax basis, the Executive
would not be receiving more from the reduced severance payments than from the
higher amount of severance that would have been subject to the 20% excise tax
under Code Section 4999, then, solely as a result of any 20% excise tax under
Code Section 4999 that arises from the transactions contemplated by the
Transaction Agreement, the Company shall pay to Executive the higher amount
of severance payments payable under Section 4.4(a)(iii) of this Agreement,
plus an additional "gross up" payment in an amount such that, after payment
by the Executive of all taxes (including ,without limitation, any income
taxes and interest and penalties imposed with respect thereto) and the 20%
excise tax under Code Section 4999 on such severance payments and the gross
up payment, the Executive retains an amount of the gross up payment equal to
the excise tax imposed upon the severance payments. Any gross-up payment
shall be paid by the Company to the Executive within a reasonable period of
time after the amount of such gross-up payment has been calculated. All
determinations and calculations required to be made under this Section 8
shall be made by a certified public accounting firm servicing the Company,
and such determinations shall be final and binding upon the Company and the
Executive.
15
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
THE COMPANY
By:
---------------------------------
THE PARENT
By:
---------------------------------
THE EXECUTIVE
------------------------------------
XXXXX X. XXXXXXX
16
ATTACHMENT 1
XXXXX X. XXXXXXX
----------------------------------------------------------------------
Position Chairman of Intelsat, Ltd. and Chairman, CEO
and President of Intelsat (Bermuda) Ltd.
----------------------------------------------------------------------
Reporting Person Board of Directors of the Company
----------------------------------------------------------------------
Outside Activities Treasurer and Director of U.S. Friends of
Chalmers University of Technology, Inc.;
PROVIDED, that, the Executive may become a
director of other entities upon the written
consent of the Company, which will not be
unreasonably withheld.
----------------------------------------------------------------------
Annual Base Salary $600,000
----------------------------------------------------------------------
Maximum Bonus 100% until new CEO commences, and discretionary
Percentage bonus thereafter. The maximum bonus percentage
set forth herein will be applicable pro rata
for the year in which new CEO begins based upon
commencement date of new CEO plus an additional
six months
----------------------------------------------------------------------
Number of New .4%
Parent Restricted
Shares
----------------------------------------------------------------------
Vacation Days 25 with a maximum accrual limit of 60 days.
----------------------------------------------------------------------
Other Benefits and Upon termination of the Executive's employment
Perquisites other than for Cause, the Executive and his
spouse shall be eligible to participate, on the
same basis and at the same level as similarly
situated senior executives of Intelsat
generally, in any retiree medical plan or
program maintained by Intelsat, subject to the
terms and conditions of such plan or program,
for so long as such plan or program remains in
effect.
During the Employment Period, the Executive
shall be eligible to participate, on the same
basis and at the same level as similarly
situated senior executives of Intelsat
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
Intelsat 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).
Within 60 days following the Closing, the
Company and the Executive shall negotiate in
good faith to provide expatriate benefits to
the Executive that are similar to those
provided to the president of
----------------------------------------------------------------------
Intelsat (Bermuda) Ltd., as in effect immediately prior to
the Closing. The Company will pay the Executive's
reasonable relocation costs to Bermuda, including
reimbursement for reasonable costs for moving household
goods in part to Bermuda and in part to Sweden. Upon the
end of the Employment Period, the Company will reimburse
the Executive for reasonable costs of moving household
goods from Bermuda to Sweden. The Executive will be
reimbursed for membership dues in one country club or golf
club during the Employment Period on terms and in a manner
comparable to other senior management team members.
----------------------------------------------------------------------
Prior Agreements
Intelsat Change of Control Severance Program,
effective as of June 1, 2004 and the
accompanying individual agreement
Employment Agreement, dated as of October 24,
2001
----------------------------------------------------------------------
SCHEDULE 1
OPTIONS AND RESTRICTED STOCK
2001 PLAN OPTIONS
184,143 ($88,710.00)
2004 PLAN OPTIONS
481,000 ($2,765,750)
RESTRICTED STOCK
68,000 ($1,275,000)
SCHEDULE 2
Transaction Related Bonus
1. Subject to the terms and conditions of this Schedule 2, the Executive
shall be eligible to receive a one-time bonus (the "Transaction Bonus")
equal to the sum of (i) the Cash on Balance Sheet Bonus, (ii) the Headcount
Bonus, (iii) the EBITDA Bonus, (iv) the Revenue Backlog Bonus, (v) the
Orbit Act Bonus, and (vi) the Retiree Medical Bonus (all as defined below,
with (i-iv) collectively referred to hereinafter as the "Financial
Bonuses," and (i-vi) collectively referred to hereinafter as the "Bonus
Components").
2. The amount of each Financial Bonus shall be determined based on the
following chart in accordance with the rules set forth below such chart.
Downward adjustments to financial goals may be made by the Investors in
their sole discretion, acting reasonably.
--------------------------------------------------------------------------------
FINANCIAL BONUS METRIC
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
CASH ON BALANCE SHEET BONUS1 Cash on balance sheet at December 31, 2004
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
HEADCOUNT BONUS2 12/31/04 headcount
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
EBITDA BONUS3 August - December 2004 EBITDA
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
REVENUE BACKLOG BONUS4 2005 Revenue Backlog as of December 31, 2004
--------------------------------------------------------------------------------
-------------
1 Pro forma for IA-8 capital expenditures, acquisition of ComSat General, and
repayment of the existing Term Loan due June 2005. Cash level contingent on
payables being at an "ordinary course" level.
2 Number on the right is the total staff including temporary employees, T&M
contractors and positions being advertised and the number on the left is the
total staff excluding temporary employees, T&M contractors and positions being
advertised.
3 Excludes Galaxy, WildBlue, ComSat General and non-recurring items.
4 Excludes Galaxy, WildBlue and ComSat General.
RULE 1: Subject to Rule 2, the amount of each Financial Bonus shall be
determined as follows:
--------------------------------------------------------------------------------
If the level of achievement of the metric The amount of such Financial Bonus
corresponding to such Financial Bonus shall equal . . .
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
is less than the corresponding Tier I zero
Threshold
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
equals or exceeds Tier I Threshold 100% of the Metric Target Bonus
but is less than the corresponding corresponding to such Financial
Tier II Threshold Bonus
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
equals or exceeds the corresponding Tier 125% of the Metric Target Bonus
II Threshold but is less than the Amount corresponding to such
corresponding Tier III Threshold Financial Bonus
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
equals or exceeds the corresponding 150% of the Metric Target Bonus
Tier III Threshold but is less than the Amount corresponding to such
corresponding Tier IV Threshold Financial Bonus
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
equal or exceeds the corresponding 175% of the Xxxxxxx Target Bonus
Tier IV Threshold Amount corresponding to such
Financial Bonus
--------------------------------------------------------------------------------
RULE 2: Notwithstanding Rule 1, in the event that the level of achievement of
any of the metrics corresponding to any of the individual Financial Bonuses is
less than the Minimum Threshold corresponding to such metric, no Financial
Bonuses (notwithstanding whether any individual Financial Bonus performance
resulted in an achievement of the corresponding metric equal to or in excess of
the applicable Tier I Threshold) shall be paid.
3. The amount of the Orbit Act Bonus shall be determined as follows:
[ ]
4. The amount of the Retiree Medical Bonus shall be determined based on whether
the following performance goals are achieved:
o Goal #1: [ ]
o Goal #2: [ ]
If both goals are achieved, the Retiree Medical Bonus shall equal 20% of annual
bonus. If only Goal #1 is achieved, the Retiree Medical Bonus shall equal 4% of
annual bonus. If only Goal #2 is achieved, the Retiree Medical Bonus shall equal
16% of annual bonus. If neither goal is achieved, the Retiree Medical Bonus
shall equal zero.
5. The Transaction Bonus shall be payable, in one or more parts, with each
portion to be paid as soon as practicable following the later to occur of (x)
the Closing and (y) the final determination of the level of performance
achievement necessary to determine the amount of that Bonus Component.
Notwithstanding anything else contained herein, the Transaction Bonus shall be
payable only if the Executive remains employed by Intelsat and its Affiliates
through the Closing. Payment of the Transaction Bonus shall be subject to all
applicable required tax withholding.
6. All determinations hereunder, including determinations of levels of
performance achievement, shall be made in good faith by the Compensation
Committee in its sole discretion.
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 (Bermuda), 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 28, 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 BENFITS. 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, dated
as of January 27, 2005, by and among Zeus Holdings Limited, a Bermuda
company and the Shareholders (as defined therein) 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 (Bermuda) 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
28, 2005, by and among Zeus Holdings Limited, Intelsat (Bermuda), 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
B-2
warrants that Exhibit 1 is a complete list of such agreements. A copy of
each agreement so listed 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.
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(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, Intelsat, and Zeus
Holdings Limited, dated January 28, 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 any breach of this Agreement. Employee further agrees that an impending
or existing violation
28
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 (excepting prior agreements between
the Employee and Intelsat) 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.
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EXHIBIT 3
New Skies
PanAmSat
Eutelsat
SES Global
B-8
