Exhibit 10.1
HUGHES NETWORK SYSTEMS, LLC
BONUS UNIT PLAN
1. The
Plan.
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1.1 Purposes. The purposes of this Plan are (a) to motivate the
Participants to embrace the objectives of
the Company, particularly the goals
of Company growth and (b) to promote the
success of the Company by rewarding
the Participants for their dedicated
service and to provide incentives for
Participants to remain in the employ of the
Company or an Affiliate through a
Significant Event. Capitalized terms used
herein are defined in Section 4. It
is intended that, as to any Participant
that becomes entitled to a Bonus under
this Plan, that such Bonus shall constitute
part of the Participant's
reasonable compensation for services
rendered to the Company and its
Subsidiaries prior to a Significant
Event.
1.2 Eligibility. The Managing Member, in its sole discretion,
shall
determine which Eligible Employees may
participate in this Plan.
1.3
Administration and Authorization; Power and Procedure.
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1.3.1
Managing Member. This Plan will be administered by and all
Awards will be authorized by the Managing Member. In making
any determination or in taking or not taking any action
under this Plan, the Managing Member may obtain and may rely
upon the advice of experts, including employees of and
professional advisors to the Company or any of its
Affiliates. The Managing Member may delegate ministerial,
non-discretionary functions to individuals who are officers,
directors or employees of the Company or any of its
Affiliates.
1.3.2 Plan
Awards; Interpretation; Powers of the Managing Member.
The Managing Member shall have the power to make all other
determinations and take such other action as contemplated by
this Plan or as may be necessary or advisable for the
administration of this Plan and the effectuation of its
purposes. Such actions shall include the ability to grant
Awards to Participants and reasonably determine the form,
amount and payment date of such Awards in accordance with
the terms of this Plan.
1.3.3 No
Liability. No director, officer, member or agent of the
Company or any Affiliate will be liable for any action,
omission or decision under this Plan.
2.
Bonus Awards.
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2.1 Award Grants. The Managing Member may grant one or more
Bonus
Units (or any fraction thereof) under this
Plan to any Eligible Employee.
Subject to the express provisions of this
Plan, the Managing Member will
determine the number of Bonus Units subject
to each Award. Each Award will be
evidenced by an Award Agreement signed by
the Company and the Participant.
Notwithstanding anything to the contrary
contained herein or in any other
agreement between the Company and any
Participant, no payment or award made
under this Plan shall be considered
eligible compensation for the purposes of
the HNS LLC 401 Savings Plan.
2.2 No Right to Equity. The Bonus Units shall be used solely as
a
device for the measurement and
determination of the amounts to be paid as
bonuses under this Plan. The Bonus Units
shall not be treated as property or
as a trust fund of any kind. All amounts at
any time attributable to the Bonus
Units shall be and shall remain the sole
property of the Company, and each
Participant's rights in respect of the
Bonus Units and this Plan are limited
to the right to receive a payment in cash
or securities as herein provided.
With respect to any Bonus Unit or other
rights in respect of this Plan, no
Participant (a) shall be entitled to any
voting, ownership, or other equity
holder rights with respect to the Company
or (b) shall be owed any fiduciary
duty by the Board, the Managing Member or
the Company.
2.3 Bonus Unit Limits. Up to 4,400,000 Bonus Units may be
granted
under this Plan. Unless the Managing Member
otherwise expressly provides in a
Participant's Award Agreement (or by an
amendment thereto), no Participant
shall have protection against any dilution
that may result from the issuance
of additional Bonus Units under this
Plan.
2.4 Entitlement to Bonus.
2.4.1 In the event a Significant Event occurs, then, subject to
the
other terms and conditions of this Plan,
each Participant who complies with
the provisions of Section 3.16 and (a) who
is employed by the Company or a
Subsidiary at the time of the Significant
Event or (b) whose employment with
the Company or a Subsidiary was terminated
due to the death, disability or
termination without Cause of such
Participant during the 12 month period
immediately prior to the consummation of
such Significant Event, shall be
entitled to a Bonus on the vested Bonus
Units. For purposes of clarity, if a
Participant's employment with the Company
or a Subsidiary is terminated due to
a termination for Cause or the Participant
resigns prior to the consummation
of such Significant Event then no Bonus
shall be payable to such Participant
hereunder.
2.4.2 Bonuses under this Plan shall be payable only with respect to
a
single Significant Event. Accordingly, no
Significant Event after the first
Significant Event to occur shall be
considered for purposes of this Plan.
Unless otherwise directed by the Managing
Member pursuant to Section 2.9.2, no
Bonuses shall be payable to any Participant
hereunder after the fifth
anniversary of the Effective Date.
2.5 Amount of Payment. If a particular Participant is entitled to
a
Bonus pursuant to Section 2.4, the amount
of that Participant's Bonus, subject
to tax withholding pursuant to Section 3.4,
will equal: the product of the
Participant's number of vested Bonus Units
multiplied by a fraction, the
numerator of which is the Net Gain and the
denominator of which is the product
of (x) number of Class A Units of the
Company owned by SkyTerra on the date of
consummation of a Significant Event,
multiplied by (y) 1,000 (such number to
be proportionately adjusted as appropriate
for any splits, combinations, etc.
of the Class A Units from time to
time).
Notwithstanding anything to the contrary contained herein, any
Bonus
payable with respect to Bonus Units granted
after the Effective Date to a
Participant shall be calculated solely with
respect to the Net Gain
attributable to the period following the
date such Bonus Units are granted to
such Participant. The Managing Manager, in
its sole discretion, shall
calculate the Net Gain attributable to such
period and the Managing Member
shall allocate the payments to be made to
all Participants hereunder in
accordance with such calculations.
The Managing Member is not obligated to cause the Company to issue
all
4,400,000 Bonus Units. The Managing Member
may, but is not obligated to,
re-allocate Bonus Units that may terminate
prior to a Bonus becoming payable
with respect thereto.
2.6 Termination of Employment; Vesting.
2.6.1 Eligibility for Bonus. Except as set forth in Section 2.4.1,
a
Participant must be employed by the Company
or a Subsidiary at the time of a
Significant Event in order to be eligible
to receive a Bonus. If a
Participant's employment terminates in any
circumstance or for any reason
prior to such date, the Participant's Bonus
Units (vested and unvested) shall
automatically terminate as of the date of
such termination of employment
provided, however, that in the event a
Participant's employment with the
Company or a Subsidiary is terminated due
to the death, disability or
termination without cause of such
Participant then the vested Bonus Units
granted to such Participant shall not
terminate until the first anniversary of
the date that such employment is
terminated, in which case it shall
automatically expire on such
anniversary.
2.6.2 Vesting. With respect to each Participant, (a) seven and
one-half percent (7.5%) of the Bonus Units
issued to such Participant shall
vest semi-annually commencing on the date
that is six (6) months following the
applicable Grant Date and ending on the
date that is thirty-six (36) months
following the applicable Grant Date and (b)
thirteen and three-fourths percent
(13.75%) of the Bonus Units issued to such
Participant shall vest
semi-annually commencing on the date that
is forty-two (42) months following
the applicable Grant Date and ending on the
date that is sixty (60) months
following the applicable Grant Date, in the
case of clauses (a) and (b),
subject to the Participant's continued
employment with the Company on the
applicable date of vesting. If a
Participant is employed by the Company or a
Subsidiary on the date of consummation of a
Significant Event, all unvested
Bonus Units granted to such Participant
shall be designated as vested Bonus
Units.
2.6.3 Cessation of Vesting. Upon any termination of the
Participant's
employment with the Company for any reason,
all vested and unvested Bonus
Units shall immediately terminate and the
Participant shall have no right to
any Bonus payable hereunder; provided,
however, that in the event a
Participant's employment with the Company
or a Subsidiary is terminated due to
the death, disability or termination
without cause of such Participant then
the vested Bonus Units granted to such
Participant shall not terminate until
the first anniversary of the date that such
employment is terminated, in which
case it shall terminate on such anniversary
but in no event shall any
additional unvested Bonus Units continue to
vest during such one-year period.
2.7 Payment Timing and Form. To the extent a Bonus is payable
in
respect of a Bonus Unit, that amount shall
be paid in cash or check upon or as
soon as reasonably practical after the
first Significant Event to occur, and
in no event later than the earlier of (x)
three months after the consummation
of such Significant Event and (y) two and
one-half months after the end of the
Company's taxable year in which such
Significant Event is consummated. In no
event shall the Company be required to pay
a Bonus payment to a Participant
until the Participant has satisfied his
obligations pursuant to Section 3.16
and the Participant's Release has become
irrevocable by the Participant
provided that, subject to the other
provisions set forth herein, such
obligations shall be satisfied by the
Participant no later than the earlier of
(x) three months after the consummation of
such Significant Event and (y) two
and one-half months after the end of the
Company's taxable year in which such
Significant Event is consummated.
Notwithstanding the foregoing provisions regarding cash payment,
in
the event that the equity holders of the
Company in a Significant Event
receive or are to receive consideration in
the form of securities or other
property (other than cash), the Company may
settle Plan obligations by
delivering the same securities or property
(valued on the same basis as such
securities or property are valued for
purposes of the Significant Event
transaction) as is received or to be
received by the Company or selling equity
holders, as applicable, in such
transaction.
Notwithstanding the foregoing time of payment provisions, in
the
event that proceeds from a Significant
Event are subject to escrow or other
contingent payment limitations, the Company
shall pay Bonus obligations on
substantially the same schedule as proceeds
are paid in connection with the
Significant Event. In the event that
proceeds from a Significant Event are not
released from escrow or are otherwise not
actually paid then the Bonus Amounts
payable with respect to such escrowed or
contingent payment amounts shall be
forfeited by the Participants.
2.8 Adjustments.
2.8.1 The Managing Member may, to such extent and at such time as
it
reasonably deems appropriate and equitable
in the circumstances to preserve
the intended level of benefits based on the
structure and organization of the
Company as of the Effective Date, adjust
Bonus Units, and bonus or bonus
opportunities represented by this Plan upon
or in contemplation of any sale of
additional equity interests by the Company,
any merger, combination,
acquisition, consolidation, sale of a
portion of the business or other
reorganization of the Company, any
split-up, spin-off, or dividend
distribution in respect of the Company's
securities in the form of property
(other than cash), an IPO, or any similar,
unusual or extraordinary corporate
transaction. This Section 2.8.1 is intended
to preserve, rather than diminish
or increase, the benefits available to
Participants under this Plan on the
Effective Date.
2.8.2 If a SkyTerra Acquisition is consummated prior to the
third
anniversary of the Effective Date and the
Participant is employed by the
Company on the third anniversary of the
Effective Date, instead of a payment
in respect of the Bonus Units, the vested
Bonus Units shall be exchanged (the
"First Exchange") for common stock of
SkyTerra ("SkyTerra Shares") on the
third anniversary of the Effective Date in
a manner intended to provide the
Participants with substantially equivalent
economic benefits to the economic
benefits intended to be provided hereunder.
The number of SkyTerra Shares to
be issued to the Participant in connection
with the First Exchange shall equal
the quotient obtained by dividing (x) the
product of (1) the number of vested
Bonus Units and (2) the fair market value
of such vested Bonus Units (as
calculated by the Managing Member) by (y)
the SkyTerra Market Price on the
date of the First Exchange. If a SkyTerra
Acquisition is consummated prior to
the fifth anniversary of the Effective Date
and the Participant is employed by
the Company on the fifth anniversary of the
Effective Date, instead of a
payment in respect of the Bonus Units, the
vested Bonus Units (excluding
vested Bonus Units, if any, subject to the
First Exchange) shall be exchanged
(the "Second Exchange") for SkyTerra Shares
on the fifth anniversary of the
Effective Date in a manner intended to
provide the Participants with
substantially equivalent economic benefits
to the economic benefits intended
to be provided hereunder. The number of
SkyTerra Shares to be issued to the
Participant in connection with the Second
Exchange shall equal the quotient
obtained by dividing (x) the product of (1)
the number of vested Bonus Units
(excluding vested Bonus Units, if any,
subject to the First Exchange) and (2)
the fair market value of such vested Bonus
Units (as calculated by the
Managing Member) by (y) the SkyTerra Market
Price on the date of the Second
Exchange. Each Participant will be required
to execute a Release in accordance
with Section 3.16 as a condition to the
issuance of any SkyTerra Shares in
connection with the First Exchange and the
Second Exchange, as applicable;
provided that, subject to the other
provisions set forth herein, such
obligations shall be satisfied by the
Participant no later than the earlier of
(x) three months after the consummation of
such First Exchange or Second
Exchange, as applicable and (y) two and
one-half months after the end of the
Company's taxable year in which such
Significant Event occurs.
2.9 IPO; No Significant Event.
2.9.1 If the Company consummates an IPO prior to the consummation
of
a Significant Event or a SkyTerra
Acquisition, this Plan and each Award
Agreement shall be amended and restated
(the "Revised Plan"), as determined by
the Managing Member, to provide that all
unvested Bonus Units shall be deemed
to be unvested options to acquire shares of
common stock of the Company and
all vested Bonus Units shall be deemed to
be vested options to acquire shares
of common stock of the Company, in each
case, on terms, conditions and
procedures determined by the Managing
Member and set forth in the Revised
Plan. The Managing Member shall determine
the number of options to acquire
shares of common stock of the Company to be
issued to each Participant in a
manner to provide such Participant with
economic benefits substantially
similar to the economic benefits intended
to be provided hereunder. The price
to be paid by such Participant upon
exercise of such options shall be the fair
market value of the common stock of the
Company at the time of grant of such
options. All such options and common stock
issuable upon exercise of such
options shall be subject to transfer,
repurchase and other restrictions on
ownership determined by the Managing Member
and set forth in the Revised Plan.
Notwithstanding the foregoing, in the event
that a Participant is not employed
by the Company or a Subsidiary on the
consummation of an IPO, such Participant
shall not be entitled to be granted options
to acquire common stock of the
Company.
2.9.2 If a Significant Event, SkyTerra Acquisition or an IPO is
not
consummated prior to the fifth anniversary
of the Effective Date and the
Participant is an employee of the Company
or its Subsidiaries on such date,
the Company will use commercially
reasonable efforts, as directed by the
Managing Member, to implement a program to
provide the Participants with an
alternative economic benefit which will
include payments or issuances of cash,
equity securities or other consideration by
the Company. Such payments or
issuances shall be made within 120 days
following the fifth anniversary of the
Effective Date; provided however that in no
event shall such payment be made
later than two and one-half months after
the end of the Company's taxable year
in which such fifth anniversary of the
Effective Date occurs. Each Participant
will be required to execute a Release in
accordance with Section 3.16 as a
condition to the payment or issuance of any
cash, equity securities or other
consideration by the Company in
connection
