EXHIBIT 10.4
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is dated as of December 31, 1999 (this
"Agreement"), between SIRIUS SATELLITE RADIO INC., a Delaware corporation (the
"Company"), and Xxxxxx X. Xxxxxxxx (the "Executive").
In consideration of the mutual covenants and conditions set forth herein,
the Company and the Executive agree as follows:
1. Employment. Subject to the terms and conditions of this Agreement, the
Company hereby employs the Executive, and the Executive hereby accepts
employment with the Company.
2. Duties and Reporting Relationship. (a) The Executive shall be employed
in the capacity of Executive Vice President, Engineering, of the Company. During
the Term (as defined below), the Executive shall, on a full-time basis, use his
skills and render services to the best of his ability in supervising the
engineering and technology development affairs of the Company and shall, in
addition, perform such other activities and duties consistent with his position
as the Chairman and Chief Executive 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 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 perform his duties and conduct his business
primarily at the principal offices of the Company in New York, New York, and
nothing in this Agreement shall cause the Executive to perform his duties
outside New York City, except for required travel on the Company's business
consistent with the Executive's position, duties and responsibilities.
(c) The Executive shall report to the Chairman and Chief Executive of the
Company.
(d) Upon termination of this Agreement, the Company shall enter into a
consulting agreement with the Executive for a term of three years (the
"Consulting Agreement"). The Consulting Agreement shall be in form and substance
acceptable to the Executive and the Company and shall provide, among other
things, that (i) the Company will pay the Executive a consulting fee of $15,000
per month; (ii) the Executive shall be available to consult with the Company at
such times and places as the Company shall reasonably request for not less than
100 days per year; and (iii) the Executive shall be provided an office and
secretarial assistance at the headquarters of the Company.
3. Term. The term of this Agreement shall commence and be effective on and
from December 31, 1999 and end on February 28, 2001, unless terminated earlier
pursuant to the provisions of Section 6 (the "Term").
4. Annual Base Salary. (a) During the Term, the Executive shall be paid an
annual base salary of US$310,000, subject to any increases that the Chief
Executive of the Company
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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 for such partial year.
(b) 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 and state income tax withholding, federal
unemployment tax and social security (FICA).
5. Additional Compensation, Expenses and Benefits. (a) During the Term,
the Company shall promptly reimburse the Executive for all reasonable and
necessary business expenses incurred or 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 officers of the Company generally, including,
without limitation, medical, dental and life insurance; provided that the
Executive shall participate in any bonus, 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 or by the
Board of Directors or the compensation committee thereof. With respect to any
annual bonus program which may be in effect from time to time, 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; provided that the foregoing
shall not be interpreted or construed as entitling the Executive to any annual
bonus.
(c) The Company agrees that upon expiration or termination of this
Agreement, it shall provide the Executive and his spouse medical coverage for
the rest of their lives. Such medical coverage will be on the same terms and
conditions (including, without limitation, co-payments and deductibles) as the
Executive is receiving medical coverage on the date of the termination or
expiration of this Agreement.
6. Termination. (a) Termination for Cause. At any time during the Term,
the Company has the right and may elect to terminate this Agreement for Cause.
For purposes of this Agreement, "Cause" shall be limited to (i) any action by
the Executive involving willful malfeasance having a substantial adverse effect
on the business or prospects of the Company, (ii) the Executive being convicted
of a felony, and (iii) a repeated and willful failure of the Executive to
perform the material duties of his office, which failure is not cured by the
Executive within thirty days after notice by the Company to the Executive that
it intends to terminate the Executive for such failure. 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 Company's Board of Directors
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 the second
sentence of this Section 6(a) and specifying the particulars thereof in detail
(the date of such termination by the Board is referred hereinafter as the
"Termination Date").
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For purposes of this Agreement, no such purported termination of the Executive's
employment shall be effective without such Notice of Termination.
(b) Death or Disability. (i) This Agreement and the Executive's employment
hereunder shall terminate upon the death of the Executive. The date of the
Executive's death is referred to in this Agreement as the "Termination Date."
(ii) If the Executive is unable to perform the duties and functions of his
position because of a disability, which is reasonably expected to be permanent,
for an uninterrupted period of one hundred eighty days from the date on which
the Executive was first unable to perform his duties, 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 which 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. The day after such written notice
has been received by the Executive is referred to in this Agreement as the
"Termination Date."
(c) Voluntary Resignation. Should the Executive wish to resign from his
position with the Company for other than Good Reason (as defined below) during
the Term, the Executive shall give fourteen days prior written notice to the
Company, setting forth the reasons and specifying the date as of which his
resignation is to become effective. The date specified in such written notice is
referred to in this Agreement as the "Termination Date." 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.
(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. The date that is seven days after such notice is
received by the Executive is referred to in this Agreement as the "Termination
Date."
(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, setting forth the reasons and
specifying the date as of which his resignation is to become effective. The date
specified in such written notice is referred to in this Agreement as the
"Termination Date." 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.
For purposes of this Agreement, "Good Reason" shall mean the occurrence of
any of the following (without the Executive's express prior written consent):
(i) the assignment to the Executive by the Company of duties
materially inconsistent with the Executive's positions, duties,
responsibilities, titles or offices at the commencement of the Term, any
reduction in his duties or responsibilities or any
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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), which
is not cured within thirty days following notice to the Company; or
(ii) any reduction in the Executive's annual base salary from the
previous year or any failure of the Company to comply with the terms of
Section 5(b) as it relates to annual bonuses, which is not cured within
thirty days following notice to the Company; or
(iii) a relocation of the Company's executive offices to a location
outside of the New York City; or
(iv) any breach by the Company of any material provision of this
Agreement which breach is not cured within thirty days following notice to
the Executive of such breach.
(f) Compensation and Benefits Upon Termination. If the employment of the
Executive is terminated for any reason, except by the Company for Cause, 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(b), an amount (in addition to any salary, benefits or other sums
due the Executive through the Termination Date) equal to 50% of the sum of (1)
the Executive's annualized base salary then in effect, and (2) the highest
annual bonus, if any, previously paid to the Executive in the preceding two
years. Any amount becoming payable under this Section 6(f) shall be paid in
immediately available funds within five business days following the Termination
Date.
7. Change of Control Matters. (a) If the Executive is, in the opinion of a
nationally recognized accounting firm selected by the Executive, expected to pay
(determined on the basis of a more likely than not standard) 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 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 a 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
any amounts to be paid under this Section 7 within two days after receipt by the
Company of written notice from the accounting firm which sets forth such
accounting firm's determination. In no event will the Executive be required to
refund to the Company any amounts payable pursuant to this Section 7. In
addition, in the event that such payments are not sufficient to pay all excise
taxes on "excess parachute payments"
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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, 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.
(b) The provisions of this Section 7 shall survive any termination of this
Agreement.
8. Nondisclosure of Confidential Information. 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, whether
directly or indirectly, any Confidential Information. "Confidential Information"
shall mean information about the Company and its proposed 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 proprietary knowledge, patents,
trade secrets, data, formulae, information and client and customer lists and all
papers, resumes 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.
9. Covenant Not to Compete. For two (2) 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 public corporation or other
entity. Without limiting the generality 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.
10. Remedies. The Executive agrees that damages for breach of any of his
covenants under Sections 8 and 9 above will be difficult to determine and
inadequate to remedy the harm
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which may be caused thereby, and therefore consents that these covenants may be
enforced by temporary or permanent injunction without the necessity of bond.
Such injunctive relief shall be in addition to and not in place of any other
remedies available at law or equity. 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 tribunal decline to enforce any provision of
Section 8 or 9 of this Agreement, this Agreement shall, to the extent applicable
in the circumstances before such court or tribunal, 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 tribunal shall find enforceable,
and such provisions shall be so enforced. The losing party shall reimburse the
prevailing party for any costs and attorneys fees incurred in connection with
any action to enforce the covenants under Section 8 of this Agreement. The
Company and the Executive shall have available to them all remedies at law and
in equity for the enforcement of this Agreement, which remedies (including but
not limited to termination of this Agreement as provided herein) shall be
cumulative.
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. The obligations of
the Company contained in this Section shall survive any termination or
expiration of this Agreement.
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 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 (5) days after mailing
by registered or certified mail:
if to the Company:
Sirius Satellite Radio Inc.
1221 Avenue of the Americas
0
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel
Telecopier: (000) 000-0000
if to the Executive:
Xxxxxx X. Xxxxxxxx
00 Xxxxxxxx Xxxxx
Xxxxx Xxxxxxxx, Xxxxxxxx 00000
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. Attorneys' Fees. In the event of arbitration or litigation arising out
of or in connection with this Agreement, the Executive shall be entitled to
recover from the Company all of his attorneys' fees and other expenses incurred
in connection with such arbitration or litigation so long as the Executive has
prevailed with respect to at least one issue in such arbitration or litigation.
20. Non-Mitigation. After the termination of his employment hereunder, the
Executive shall not be required to mitigate damages or the amount of any benefit
or payment provided under this Agreement by seeking other employment or
otherwise; nor shall the amount of any benefit or payment provided for under
this Agreement be reduced by any compensation earned by the Executive as the
result of employment by another employer.
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.
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/ Xxxxxx X. Xxxxxxxx
----------------------------------------
Xxxxxx X. Xxxxxxxx
