KEY EMPLOYEE CHANGE IN CONTROL
SEVERANCE PLAN
Effective
January 1, 2007, the Company adopts this GeoEye, Inc. Key
Employee Change in Control Severance Plan for the benefit of
certain employees of the Company and its subsidiaries.
SECTION 1.
DEFINITIONS. As
hereinafter used:
1.1.
“Board” means the Board of Directors of the
Company.
1.2. “
Business ” means a business or business unit over 50%
of whose gross annual revenues arise from the collection,
processing or sale of remote sensing imagery products or services
(including data extraction, imagery analysis and production of
imagery related products) in direct competition with the
Company.
1.3. “
Cause ” means (i) the commission of any felony or
any crime involving moral turpitude or dishonesty;
(ii) participation in a fraud or act of dishonesty against the
Company; (iii) the willful breach or gross negligence of the
Employer’s policies; (iv) intentional damage to the
Employer’s property; (v) the Eligible Employee’s
failure or refusal in a material respect to follow the reasonable
policies or directions of the Employer as specified by the Board
after being provided with notice of such failure and an opportunity
to cure within seven days of receipt of such notice; (vi) any
other act or omission which subjects the Employer to substantial
public disrespect, scandal or ridicule or (vii) the Eligible
Employee’s failure to carry out the duties of his or her
position after being provided with notice of such failure and a
reasonable opportunity to cure. Disability shall not constitute
Cause. Notwithstanding the foregoing, if the Eligible Employee is a
party to an employment agreement with the Employer that contains a
definition of “Cause,” then “Cause” shall
have the definition used in such employment agreement.
1.4. “
Change in Control ” shall have the meaning set forth
in Exhibit A.
1.5. “
Code ” means the Internal Revenue Code of 1986, as it
may be amended from time to time.
1.6. “
Company ” means GeoEye, Inc. or any successors
thereto.
1.7. “
Credited Compensation ” of a Severed Employee means
the aggregate of the Severed Employee’s (a) annual base
salary, as determined immediately prior to the Severance Date
(without regard to any reductions therein which constitute Good
Reason), and (b) most recently established target (determined
at one hundred percent of target) for annual cash incentive
compensation for such employee prior to such employee’s
Severance Date.
1.8. “
Disability ” shall mean a disability that prevents an
Eligible Employee from substantially performing his or her duties
as an employee to the Employer for a period of at least 45
consecutive days or 90 non-consecutive days within any 365-day
period.
1.9. “
Effective Date ” means the date first stated above as
the effective date of this Plan.
1.10. “
Eligible Employee ” means any employee that is a Tier
1 Employee or a Tier 2 Employee.
1.11. “
Employer ” means the Company or any of its
subsidiaries.
1.12. “
Excise Tax ” shall mean the excise tax imposed by
Section 4999 of the Code, together with any interest or
penalties imposed with respect to such excise tax, other than
interest or penalties related to Section 409A of the
Code.
1.13. “
Good Reason ” means the occurrence, on or after the
date of a Change in Control, and without the Eligible
Employee’s written consent, of (i) any material
diminution in the nature of the Eligible Employee’s duties or
responsibilities from those in effect immediately prior to the date
of the Change in Control; (ii) a reduction by the Employer in
the Eligible Employee’s annual base salary or any adverse
change in the Eligible Employee’s aggregate annual and long
term incentive compensation opportunity from that in effect
immediately prior to the Change in Control which change is not
pursuant to a program applicable to all comparably situated
executives of the Employer; (iii) the relocation of the
Eligible Employee’s principal place of employment to a
location more than 50 miles from the Eligible Employee’s
principal place of employment immediately prior to the date of the
Change in Control; or (iv) the failure of a successor to the
Company to assume this Plan.
1.14. “
Gross-Up Payment ” has the meaning set forth in
Section 2.5 hereof.
1.15. “
Parachute Value ” of a Payment shall mean the present
value as of the date of the change of control for purposes of
Section 280G of the Code of the portion of such Payment that
constitutes a “parachute payment” under
Section 280G(b)(2), as determined by the Accounting Firm for
purposes of determining whether and to what extent the Excise Tax
will apply to such Payment.
1.16. “
Payment ” shall mean any payment or distribution in
the nature of compensation (within the meaning of
Section 280G(b)(2) of the Code) to or for the benefit of an
Eligible Employee, whether paid or payable pursuant to this Plan or
otherwise, by any Employer or by a Person that is a party to the
Change in Control.
1.17. “
Person ” means any individual, firm, corporation,
partnership, association, trust, unincorporated organization, or
other entity.
1.18. “
Plan ” means the GeoEye, Inc. Change in Control
Severance Plan, as set forth herein, as it may be amended from time
to time.
1.19. “
Plan Administrator ” means the person or persons
appointed from time to time by the Board, which appointment may be
revoked at any time by the Board.
1.20. “
Safe Harbor Amount ” means, with respect to an
Eligible Employee, 2.99 times the Eligible Employee’s
“base amount,” within the meaning of
Section 280G(b)(3) of the Code.
1.21. “
Severance ” means the termination of an Eligible
Employee’s employment with the Employer on or within two
years following the date of a Change in Control, (i) by the
Employer other than for Cause, or (ii) by the Eligible
Employee for Good Reason. An Eligible Employee will not be
considered to have incurred a Severance if his employment is
discontinued by reason of the Eligible Employee’s death or a
physical or mental condition causing such Eligible Employee’s
inability to substantially perform his duties with the Employer and
entitling him or her to benefits under any long-term sick pay or
disability income policy or program of the Employer.
Notwithstanding anything herein to the contrary, Good Reason shall
not be deemed to have occurred unless the Company shall have been
given (1) written notice of the Eligible Employee’s
assertion that an event constituting Good Reason has occurred,
which notice shall be given within 90 days following an event
constituting Good Reason and not less than 30 days prior to
the Severance Date to which such notice relates, and (2) a
reasonable opportunity to cure such occurrence during such 30-day
period.
1.22. “
Severance Date ” means the date on which an Eligible
Employee incurs a Severance.
1.23. “
Severance Pay ” means the payment determined pursuant
to Section 2.1 hereof.
1.24. “
Severed Employee ” means an Eligible Employee who has
incurred a Severance.
1.25. “
Tier 1 Employee ” means any employee of the Employer
who is designated by the Board as a “Tier 1 Employee”
on Exhibit B.
1.26. “
Tier 2 Employee ” means any employee of the Employer
who is designated by the Board as a “Tier 2 Employee”
on Exhibit B.
1.27. “
Value ” of a Payment shall mean the economic present
value of a Payment as of the date of the change of control for
purposes of Section 280G of the Code, as determined by the
Accounting Firm using the discount rate required by
Section 280G(d)(4) of the Code.
2.1. Subject to
Section 2.9, each Severed Employee shall be entitled to
receive Severance Pay equal to the sum of:
(a) the
Severed Employee’s Credited Compensation, multiplied by
(i) 2, in the case of a Tier 1 Employee or (ii) 1 in the
case of a Tier 2 Employee;
(b) a
pro rata portion to the Severance Date of the Severed
Employee’s most recently established target (determined at
one hundred percent of target) for annual cash incentive
compensation, calculated by multiplying the target amount, by the
fraction obtained by
dividing the
number of full months and any fractional portion of a month during
the Company’s fiscal year in which the Severed Employee was
employed by the Employer through the Severance Date by
12;
(c) a
lump sum payment equal to the cost of outplacement services and
financial counseling for one year following the Severance Date for
the Severed Employee, as reasonably determined by the Plan
Administrator; and
(d) a
lump sum payment equal to (i) 24 times, in the case of a Tier
1 Employee, or (ii) 12 times, in the case of a Tier 2
Employee, the total monthly premium payment required to be paid by
the Employer to the applicable insurance carrier on behalf of the
Severed Employee for life insurance benefits for the month prior to
the month of the Severance Date. Following the Severance Date, the
Severed Employee may use such lump sum payment to continue
conversion life insurance coverage.
2.2. Severance Pay
(as well as any amount payable pursuant to Section 2.6 hereof)
shall be paid to an eligible Severed Employee in a cash lump sum,
as soon as practicable following the Severance Date, but in no
event later than 5 business days immediately following the date the
Severed Employee’s release, described in Section 2.9,
becomes irrevocable. Notwithstanding anything to the contrary in
this Plan, no payments to an Eligible Employee contemplated by this
Plan will be paid during the six-month period following the
Eligible Employee’s Severance Date unless the Board
determines, in its good faith judgment, that paying such amounts at
the time or times indicated in this Section 2 would not cause
the Eligible Employee to incur an additional tax under
Section 409A of the Code and related Department of Treasury
guidance (including such Department of Treasury guidance as may be
issued after the date hereof) (in which case such amounts shall be
paid at the time or times indicated in this Section 2.2). If
the payment of any amounts are delayed as a result of the previous
sentence, on the first day following the end of the six-month
period, the Company will pay the Eligible Employee a lump-sum
amount equal to the cumulative amounts that would have otherwise
been previously paid to the Eligible Employee under this Agreement
during such six-month period. Thereafter, payments will resume in
accordance with the terms of the Plan.
2.3. Subject to
Section 2.9, for a period of (a) 24 months following
the Severance Date, in the case of a Tier 1 Employee or
(b) 12 months following the Severance Date, in the case
of a Tier 2 Employee, the Company shall reimburse the Severed
Employee and his or her eligible dependents for, or provide direct
payment to the insurance carrier for, the premium costs necessary
to continue their participation in the Company’s medical and
dental plans that the Severed Employee and his or her eligible
dependents participated in prior to the Severance Date, as such
plans may be changed by the Company from time to time.
2.4. Each Severed
Employee shall, on the Severance Date, immediately become fully
vested in all outstanding equity awards. Any options, stock
appreciation rights or similar equity awards outstanding and held
by the Eligible Employee on the Severance Date shall be immediately
exercisable and shall remain exercisable in accordance with the
terms of the applicable award documents and plans. Restrictions
existing on any restricted stock or restricted
stock units
granted to the Severed Employee shall immediately lapse on the
Severance Date, and any such stock held in escrow shall be released
as provided in the applicable award documents.
2.5.
(a) Anything in this Plan to the contrary notwithstanding and
except as set forth below, in the event it shall be determined that
any Payment to an Eligible Employee would be subject to the Excise
Tax, then the Eligible Employee shall be entitled to receive an
additional payment (the “ Gross-Up Payment ”) in
an amount such that, after payment by the Eligible Employee of all
taxes (and any interest or penalties imposed with respect to such
taxes, but excluding any taxes imposed by Section 409A of the
Code and any interest or penalties imposed by Section 409A of
the Code), including, without limitation, any income taxes (and any
interest and penalties imposed with respect thereto, but excluding
any taxes imposed by Section 409A of the Code and any interest
or penalties imposed by Section 409A of the Code) and Excise
Tax imposed upon the Gross-Up Payment, the Eligible Employee
retains an amount of the Gross-Up Payment equal to the Excise Tax
imposed upon the Payments. Notwithstanding the foregoing provisions
of this Section 2.5(a), if it shall be determined that an
Eligible Employee is entitled to the Gross-Up Payment, but that the
Parachute Value of all Payments does not exceed 110% of the Safe
Harbor Amount, then no Gross-Up Payment shall be made to the
Eligible Employee and the amounts payable under this Plan shall be
reduced so that the Parachute Value of all Payments, in the
aggregate, equals the Safe Harbor Amount. The reduction of the
amounts payable hereunder, if applicable, shall be made by first
reducing the payments under Section 2.1, unless an alternative
method of reduction is elected by the Eligible Employee, and in any
event shall be made in such a manner as to maximize the Value of
all Payments actually made to the Eligible Employee. For purposes
of reducing the Payments to the Safe Harbor Amount, only amounts
payable under this Plan (and no other Payments) shall be reduced.
If the reduction of the amount payable under this Plan to an
Eligible Employee would not result in a reduction of the Parachute
Value of all Payments to the Safe Harbor Amount, no amounts payable
to the Eligible Employee under the Plan shall be reduced pursuant
to this Section 2.5(a).
(b) Subject
to the provisions of Section 2.5(c), all determinations
required to be made under this Section 2.5, including whether
and when a Gross-Up Payment is required, the amount of such
Gross-Up Payment and the assumptions to be utilized in arriving at
such determination, shall be made by a nationally recognized
certified public accounting firm designated by the Plan
Administrator (the “ Accounting Firm ”). The
Accounting Firm shall provide detailed supporting calculations both
to the Company and each Eligible Employee within 15 business days
of the receipt of notice from the Eligible Employee that there has
been a Payment or such earlier time as is requested
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