Exhibit 10.26
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT, dated as of January 1, 2004
between SkyTerra Communications, Inc., a Delaware corporation (the "Company")
and Xxxxxxx Xxxxx (the "Executive").
The Company wishes to continue to employ the Executive, and
the Executive wishes to continue such employment, on the terms and conditions
set forth in this Agreement.
Accordingly, the Company and the Executive hereby agree as
follows:
1. Employment, Duties and Acceptance.
1.1 Employment, Duties. The Company hereby agrees to
continue to employ the Executive for the Term (as defined in Section 2.1), to
render exclusive and full-time services to the Company as the Chief Executive
Officer and President or in such other executive position as may be mutually
agreed upon by the Company and the Executive, and to perform such other duties
consistent with such position as may be assigned to the Executive by the Board
of Directors of the Company.
1.2 Acceptance. The Executive hereby accepts such
employment and agrees to render the services described above. During the course
of his employment with the Company, the Executive agrees to serve the Company
faithfully and to the best of the Executive's ability, to devote the
Executive's entire business time, energy and skill to such employment, and to
use the Executive's best efforts, skill and ability to promote the Company's
interests. The Executive further agrees to accept election, and to serve during
all or any part of the course of his employment, as an officer of the Company
and of any subsidiary or affiliate of the Company, without any compensation
therefor other than that specified in this Agreement, if elected to any such
position by the Board of Directors of the Company or of any subsidiary or
affiliate, as the case may be.
1.3 Location. The Executive shall be based in
Atlanta, Georgia, subject to extensive travel requirements on behalf of the
Company.
2. Term of Employment. The term of this Agreement (the "Term")
shall commence on January 1, 2004 and shall end on December 31, 2005; provided,
however, that the Term may end on (a) such earlier date on which the
Executive's employment terminates pursuant to Section 4 hereof (and any
termination of the Term pursuant to Section 4 hereof shall be deemed to be a
termination of the Executive's employment by the Company) or (b) such later
date to which the Term is extended pursuant to a written agreement between the
Company and the Executive.
3. Compensation; Benefits.
3.1 Salary. As compensation for all services to be
rendered pursuant to this Agreement, the Company agrees to pay the Executive
during the Term a base salary, payable bi-weekly in arrears, at the annual rate
of not less than $300,000, less such deductions or amounts to be withheld as
required by applicable law and regulations (the "Base Salary"). In the event
that the Company, in its sole discretion, from time to time determines to
increase the Base Salary, such increased amount shall, from and after the
effective date of the increase, constitute "Base Salary" for purposes of this
Agreement.
3.2 Performance Bonus. In addition to the amounts to
be paid to the Executive pursuant to Section 3.1, the Executive will be
eligible, based upon subjective goals (the "Goals") established by the Board of
Directors of the Company or its Compensation Committee after consultation with
the Executive, to receive a bonus following the end of each calendar year
during the Term, including following the last year of the Term, in an amount,
depending upon the Executive's achievement of the Goals, equal to up to 75% of
the Executive's Base Salary, less such deductions or amounts to be withheld as
required by applicable law and regulations (the "Performance Bonus").
3.3 INTENTIONALLY LEFT BLANK
3.4 Business Expenses. The Company shall pay or
reimburse the Executive for all reasonable expenses actually incurred or paid
by the Executive during the Term in the performance of the Executive's services
under this Agreement, upon presentation of expense statements or vouchers or
such other supporting information as the Company customarily may require of its
officers.
3.5 Vacation. During the Term, the Executive shall
be entitled to a vacation period or periods of four weeks taken in accordance
with the vacation policy of the Company during each year of the Term. Vacation
time not used by the end of a year shall be forfeited.
3.6 Benefits. During the Term, the Executive shall
be eligible to participate in the benefit plans that are provided by the
Company to its executive officers generally. The Executive shall be entitled to
an additional payment of $10,000 annually, which shall be paid bi-weekly with
the Executive's Base Salary to purchase additional health care and disability
benefits similar to those that the Executive received prior to commencing
employment with the Company.
3.7 Stock Options. In addition, to the options to
purchase common stock of the Company (the "Options") that have been granted to
date, as set forth on Exhibit A, the Compensation Committee of the Board of
Directors may consider the grant of additional options on common stock of the
Company.
4. Termination of the Term; Consequences of Termination.
4.1 Death. If the Executive shall die during the
Term, the Term shall terminate and no further amounts or benefits shall be
payable hereunder.
4.2 Disability. If during the Term the Executive
shall become physically or mentally disabled, whether totally or partially,
such that the Executive is unable to perform the Executive's services hereunder
for (i) a period of three consecutive months or (ii) for shorter periods
aggregating three months during any twelve month period, the Company may, at
any time after the last day of the three consecutive months of disability or
the day on which the shorter periods of disability shall have equaled an
aggregate of three months, by written notice to the Executive (but before the
Executive has recovered from such disability), terminate the Term and no
further amounts or benefits shall be payable hereunder, except that the Company
shall continue to provide the Executive with health care insurance through the
end of the Term. The foregoing shall not prohibit the Executive from being
entitled to receive disability benefits pursuant to any plan, program,
agreement or arrangement of the Company in which he participates during the
Term.
4.3 Cause. In the event of gross neglect by the
Executive of the Executive's duties hereunder, conviction of the Executive of
any felony, conviction of the Executive of any lesser crime or offense
involving the property of the Company or any of its subsidiaries or affiliates,
willful misconduct by the Executive in connection with the performance of any
material portion of the Executive's duties hereunder, breach by the Executive
of any material provision of this Agreement or any other conduct on the part of
the Executive which would make the Executive's continued employment by the
Company materially prejudicial to the best interests of the Company, the
Company may, at any time by written notice to the Executive, terminate the Term
and, upon such termination, this Agreement shall terminate and the Executive
shall be entitled to receive no further amounts or benefits hereunder, except
any as shall have been earned to the date of such termination.
4.4 Company Breach. In the event of the breach of
any material provision of this Agreement by the Company, the Executive shall be
entitled to terminate the Term upon 30 days' prior written notice to the
Company. Upon such termination, or in the event the Company terminates this
Agreement at any time before the expiration of the Term, other than pursuant to
the provisions of Section 4.1, 4.2 or 4.3, the Company shall pay to the
Executive a lump sum equal to the Base Salary. Payment of such sums pursuant to
this Section 4.4, together with accrued and unpaid amounts, if any, owed
pursuant to Sections 3.1, 3.4, 3.5 or 3.6 shall fulfill all obligations of the
Company to Executive under this Agreement. In the event that the Executive is
terminated pursuant to this Section 4.4, then all stock options granted to the
Executive by the Company pursuant to Section 3.7 shall immediately vest.
5. Protection of Confidential Information; Non-Competition.
5.1 In view of the fact that the Executive's work
for the Company will bring the Executive into close
contact with many confidential affairs of the Company not readily available to
the public, and plans for further developments, the Executive agrees:
5.1.1 To keep and retain in the strictest confidence
all confidential matters of the Company, including, without limitation, "know
how", trade secrets, customer lists, pricing policies, operational methods,
technical processes, formulae, inventions and research projects, and other
business affairs of the Company, learned by the Executive heretofore or
hereafter, and not to disclose them to anyone outside of the Company, either
during or after the Executive's employment with the Company, except in the
course of performing the Executive's duties hereunder or with the Company's
express written consent; and 5.1.2 To deliver promptly to the Company on
termination of the Executive's employment by the Company, or at any time the
Company may so request, all memoranda, notes, records, reports, manuals,
drawings, blueprints and other documents (and all copies thereof) relating to
the Company's business and all property associated therewith, which the
Executive may then possess or have under the Executive's control.
5.2 During the Term and for a period of six months
thereafter, the Executive shall not, directly or
indirectly, enter the employ of, or render any services to, any person, firm or
corporation engaged in any business competitive with the business of the
Company or of any of its subsidiaries or affiliates; the Executive shall not
engage in such business on the Executive's own account; and the Executive shall
not become interested in any such business, directly or indirectly, as an
individual, partner, shareholder, director, officer, principal, agent,
employee, trustee, consultant, or in any other relationship or capacity
provided, however, that nothing contained in this Section 5.2 shall be deemed
to prohibit the Executive from acquiring, solely as an investment, up to five
percent (5%) of the outstanding shares of capital stock of any public
corporation.
5.3 If the Executive commits a breach, or threatens
to commit a breach, of any of the provisions of Sections 5.1 or 5.2 hereof, the
Company shall have the following rights and remedies:
5.3.1 The right and remedy to have the provisions of
this Agreement specifically enforced by any court
having equity jurisdiction, it being acknowledged and agreed that any such
breach or threatened breach will cause irreparable injury to the Company and
that money damages will not provide an adequate remedy to the Company; and
5.3.2 The right and remedy to require the Executive
to account for and pay over to the Company all compensation, profits, monies,
accruals, increments or other benefits (collectively "Benefits") derived or
received by the Executive as the result of any transactions constituting a
breach of any of the provisions of the preceding paragraph, and the Executive
hereby agrees to account for and pay over such Benefits to the Company.
Each of the rights and remedies enumerated above shall be independent of the
other, and shall be severally enforceable, and all of such rights and remedies
shall be in addition to, and not in lieu of, any other rights and remedies
available to the Company under law or in equity.
5.4 If any of the covenants contained in Sections
5.1 or 5.2, or any part thereof, hereafter are
construed to be invalid or unenforceable, the same shall not affect the
remainder of the covenant or covenants, which shall be given full effect,
without regard to the invalid portions.
5.5 If any of the covenants contained in Sections
5.1 or 5.2, or any part thereof, are held to be
unenforceable because of the duration of such provision or the area covered
thereby, the parties agree that the court making such determination shall have
the power to reduce the duration and/or area of such provision and, in its
reduced form, said provision shall then be enforceable.
5.6 The parties hereto intend to and hereby confer
jurisdiction to enforce the covenants contained in
Sections 5.1 and 5.2 upon the courts of any state within the geographical scope
of such covenants. In the event that the courts of any one or more of such
states shall hold such covenants wholly unenforceable by reason of the breadth
of such covenants or otherwise, it is the intention of the parties hereto that
such determination not bar or in any way affect the Company's right to the
relief provided above in the courts of any other states within the geographical
scope of such covenants as to breaches of such covenants in such other
respective jurisdictions, the above covenants as they relate to each state
being for this purpose severable into diverse and independent covenants.
5.7 During the Term and thereafter, the Executive
agrees not to make any public or private statements,
comments, or communication in any form, oral, written, or electronic, which in
any way would constitute disparagement of the Company or its directors,
officers, employees, affiliates or subsidiaries or which may be considered to
be derogatory or detrimental to the good name or business reputations of any of
the foregoing; provided, however, that the terms of this paragraph shall not
apply to communications between Executive and his or her spouse, clergy, or
attorneys, which are subject to a claim of privilege existing under common law,
statute or rule of procedure, nor shall it apply to truthful statements made in
response to a subpoena or during the course of any investigation by any law
enforcement authority.
5.8 In the event that any action, suit or other
proceeding in law or in equity is brought to enforce
the covenants contained in Sections 5.1, 5.2 or 5.7 or to obtain money damages
for the breach thereof, and such action results in the award of a judgment for
money damages or in the granting of any injunction in favor of the Company, all
expenses (including reasonable attorneys' fees) of the Company in such action,
suit or other proceeding shall (on demand of the Company) be paid by the
Executive. In the event the Company fails to obtain a judgment for money
damages or an injunction in favor of the Company, all expenses (including
reasonable attorneys' fees) of the Executive in such action, suit or other
proceeding shall (on demand of the Executive) be paid by the Company.
6. Inventions and Patents.
6.1 The Executive agrees that all processes,
technologies and inventions (collectively, "Inventions"),
including new contributions, improvements, ideas and discoveries, whether
patentable or not, conceived, developed, invented or made by him during the
Term shall belong to the Company, provided that such Inventions grew out of the
Executive's work with the Company or any of its subsidiaries or affiliates, are
related in any manner to the business (commercial or experimental) of the
Company or any of its subsidiaries or affiliates or are conceived or made on
the Company's time or with the use of the Company's facilities or materials.
The Executive shall further: (a) promptly disclose such Inventions to the
Company; (b) assign to the Company, without additional compensation, all patent
and other rights to such Inventions for the United States and foreign
countries; (c) sign all papers necessary to carry out the foregoing; and (d)
give testimony in support of the Executive's inventorship.
6.2 If any Invention is described in a patent
application or is disclosed to third parties, directly or
indirectly, by the Executive within six months after the termination of the
Executive's employment by the Company, it is to be presumed that the Invention
was conceived or made during the Term.
6.3 The Executive agrees that the Executive will not
assert any rights to any Invention as having been
made or acquired by the Executive prior to the date of this Agreement, except
for Inventions, if any, disclosed to the Company in writing prior to the date
hereof.
7. Intellectual Property.
The Company shall be the sole owner of all the products and
proceeds of the Executive's services hereunder, including, but not limited to,
all materials, ideas, concepts, formats, suggestions, developments,
arrangements, packages, programs and other intellectual properties that the
Executive may acquire, obtain, develop or create in connection with and during
the Term, free and clear of any claims by the Executive (or anyone claiming
under the Executive) of any kind or character whatsoever (other than the
Executive's right to receive payments hereunder). The Executive shall, at the
request of the Company, execute such assignments, certificates or other
instruments as the Company may from time to time deem necessary or desirable to
evidence, establish, maintain, perfect, protect, enforce or defend its right,
title or interest in or to any such properties.
8. Indemnification.
The Company will indemnify the Executive, to the maximum
extent permitted by applicable law, against all costs, charges and expenses
incurred or sustained by the Executive in connection with any action, suit or
proceeding to which the Executive may be made a party by reason of the
Executive being an officer, director or employee of the Company or of any
subsidiary or affiliate of the Company.
9. Notices.
All notices, requests, consents and other communications
required or permitted to be given hereunder shall be in writing and shall be
deemed to have been duly given if delivered personally, sent by overnight
courier or mailed first class, postage prepaid, by registered or certified mail
(notices mailed shall be deemed to have been given on the date mailed), as
follows (or to such other address as either party shall designate by notice in
writing to the other in accordance herewith):
If to the Executive, to:
Xxxxxxx Xxxxx
If to the Company, to:
SkyTerra Communications, Inc.
00 Xxxx 00xx Xxxxxx, Xxxxx 000
Xxx Xxxx, XX 00000
Attn: General Counsel
10. General.
10.1 This Agreement shall be governed by and
construed and enforced in accordance with the laws of the
State of New York applicable to agreements made and to be performed entirely in
New York.
10.2 The section headings contained herein are for
reference purposes only and shall not in any way
affect the meaning or interpretation of this Agreement.
10.3 This Agreement sets forth the entire agreement
and understanding of the parties relating to the subject matter hereof, and
supersedes all prior agreements, arrangements and understandings, written or
oral, relating to the subject matter hereof between the Company and the
Executive. No representation, promise or inducement has been made by either
party that is not embodied in this Agreement, and neither party shall be bound
by or liable for any alleged representation, promise or inducement not so set
forth.
10.4 This Agreement, and the Executive's rights and
obligations hereunder, may not be assigned by the Executive. The Company may
assign its rights, together with its obligations, hereunder (i) to any
affiliate or (ii) to third parties in connection with any sale, transfer or
other disposition of all or substantially all of its business or assets; in any
event the obligations of the Company hereunder shall be binding on its
successors or assigns, whether by merger, consolidation or acquisition of all
or substantially all of its business or assets.
10.5 This Agreement may be amended, modified,
superseded, canceled, renewed or extended and the terms
or covenants hereof may be waived, only by a written instrument executed by
both of the parties hereto, or in the case of a waiver, by the party waiving
compliance. The failure of either party at any time or times to require
performance of any provision hereof shall in no manner affect the right at a
later time to enforce the same. No waiver by either party of the breach of any
term or covenant contained in this Agreement, whether by conduct or otherwise,
in any one or more instances, shall be deemed to be, or construed as, a further
or continuing waiver of any such breach, or a waiver of the breach of any other
term or covenant contained in this Agreement.
11. Subsidiaries and Affiliates.
11.1 As used herein, the term "subsidiary" shall
mean any corporation or other business entity
controlled directly or indirectly by the corporation or other business entity
in question, and the term "affiliate" shall mean and include any corporation or
other business entity directly or indirectly controlling, controlled by or
under common control with the corporation or other business entity in question.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first above written.
COMPANY
By: /s/ Xxxxxx Xxxxx
______________________________
EXECUTIVE
By: /s/ Xxxxxxx Xxxxx
______________________________
Xxxxxxx Xxxxx
EXHIBIT A
25,000 granted on 6/3/02 (adjusted for reverse split) at $1.80 (also reverse
split adj.) vesting over 2 years ( 6,250 on each of 12/3/02, 6/3/03, 12/3/03
and 6/3/04) EXP 6/3/07
75,000 granted on 10/15/02 at $0.85 vesting over three years (25,000 on each of
10/15/03, 10/15/04 and 10/15/05) EXP 10/15/12
100,000 granted on 4/8/03 at $0.91 vesting over three years (33,333 on each of
4/8/04, 4/8/05 and 4/8/06) EXP 4/8/13
