Exhibit
10.11
EMPLOYMENT
AGREEMENT
THIS
AGREEMENT is
made as of the 18th day of September, 2006 (the “
Effective Date ”), by and between IRIDIUM HOLDINGS
LLC. , a Delaware limited liability Company (the “
Company ”) and IRIDIUM SATELLITE LLC , a
Delaware limited liability Company (“ Satellite
”) (together “ Iridium ”) and MATTHEW
J. DESCH (“ Executive ”).
WHEREAS
, Iridium desires to
employ Executive as Chief Executive Officer of Company and Chairman
and Chief Executive Officer of Satellite, a wholly-owned subsidiary
of the Company, and Executive desires to be so employed.
NOW,
THEREFORE ,
in consideration of the premises and the mutual promises of the
parties herein set forth, and other good and valuable consideration
the receipt and sufficiency of which are hereby acknowledged,
Iridium and Executive intending to be legally bound agree as
follows:
1.
Employment
. Iridium agrees
to employ Executive, and Executive agrees to be so employed, as
Chief Executive Officer of Company and Chairman and Chief Executive
Officer of Satellite on the terms and subject to the conditions
herein set forth.
2.
Term . The term of
Executive’s employment with Iridium under this Agreement (the
“ Term ”) shall commence as of the Effective
Date and shall continue for a period of four (4) years (the “
Initial Term ”). The Term shall automatically be
extended for an additional two-year period unless notice of
nonextension is given by either party to the other, not more than
six (6) months before the end of the Initial Term. Notwithstanding
the foregoing, Executive’s employment is subject to
termination during the Term as provided in section 6 of this
Agreement.
3.
Duties . Executive shall serve as,
and have responsibilities and authority consistent with the
position of a full-time Chief Executive Officer of Company and
Chairman and Chief Executive Officer of Satellite.
Executive’s specific responsibilities and authority shall be
as from time to time established by the Board of Directors of the
Company, to which Executive shall report. Executive shall devote
commercially reasonable efforts and all commercially reasonable,
necessary, and appropriate business time and attention to such
duties. Notwithstanding the foregoing, Iridium acknowledges that
Executive has investment, charitable, and professional interests
and obligations that he will attend to on a continuing basis, but
Executive represents and covenants that these activities will not
materially interfere with the performance of his duties
hereunder.
4.
Compensation and
Benefits .
(a)
Base
Compensation . During the Initial Term,
Satellite shall pay Executive a base salary (the “ Base
Salary ”) at an annual rate of $550,000. During each
succeeding year during the Term, Executive’s Base Salary
shall be subject to increase (but shall not be decreased) as
determined by the Company’s Board of Directors based upon the
Executive’s level of performance for the prior year but in no
event shall the Base Salary be increased by less than the
corresponding percentage increase in the Consumer Price Index
(CPI-
Urban Wage Earners,
Washington-Baltimore, 1996=100) for each calendar year period
during the Term.
(b)
Inceptive
Compensation . Executive shall be entitled to
receive, within three (3) months after the end of each calendar
year, an incentive bonus (“ Bonus ”) of up to
70% of his Base Salary during such calendar year based upon the
achievement of performance targets and objectives established for
such year for Satellite by the Company’s Board of Directors
in consultation with Executive. Of this maximum amount, 100% shall
be based upon achieving 100% of Company performance targets. A
lesser amount may be paid in the discretion of the Company’s
Board of Directors if the applicable targets are not achieved. For
the period from the Effective Date through December 31, 2006, the
annual maximum bonus amount shall be prorated, and the Company
shall make an award up to this prorated maximum, limited by the
Company’s overall performance percentage pursuant to the 2006
Bonus Plan. The annual Bonus Plan will provide for additional
incentive bonuses or other compensation if performance targets and
objectives are exceeded.
(c)
Benefit Plans,
Fringe Benefits, and Other Payments .
(1)
During the Term,
Executive shall be entitled to participate immediately (subject to
any generally applicable waiting periods) in any and all employee
benefit programs (including but not limited to medical, vision,
prescription drug, dental, disability, employee and group life,
accidental death and travel accident, and section 401(k) plans and
programs) from time to time offered by Satellite to its executives
or to its employees generally, and Executive shall receive such
other benefits as the Company may determine from time to time. In
addition, during the Term, Satellite shall provide Executive with
the use of a suitable automobile and pay the expenses relating
thereto and shall pay Executive’s annual dues (but not
initiation fees) for a private club of his choice in the Washington
D.C. Metropolitan area. The Company shall also pay
Executive’s expenses for relocating his residence from
Dallas, Texas to the Washington D.C. Metropolitan area, including
the reasonable cost of temporary housing for a period of up to 180
days and reasonable periodic trips for Executive and his spouse
between Dallas and Washington D.C. Metropolitan area during such
temporary period. Company shall increase the amount reimbursed for
temporary housing to approximately cover Executive’s tax
liability in receiving such payments.
(2)
Executive shall be
entitled to the accrual of four (4) weeks of paid time off
annually. Executive shall be paid a pro rata portion of his salary
for each week of accrued and unused paid time off, in accordance
with Satellite’s policies of general application in effect at
the time of the termination of his employment.
(3)
Executive shall be
entitled to such other perquisites as are comparable to those that
Satellite from time to time extends to its senior executive
staff.
(4)
Satellite shall
reimburse Executive for business, travel, lodging, meals, and other
reasonable business expenses incurred by him in his performance of
services hereunder subject to submission of documentation in
accordance with Satellite’s business expense reimbursement
policies from time to time applicable to its senior
executives.
(d)
D&O Coverage;
Indemnification . If and to the extent that
Satellite from time to time maintains such policies, Satellite
agrees to cause Executive to be covered under its director/officer
and general liability policies for all acts or omissions of
Executive within the scope of his employment occurring (or alleged
to have occurred) during the Term. Whether or not such coverage
exists or is available, Satellite hereby agrees to indemnify
Executive and to hold him harmless from any claim, cause of action,
cost, or expense (including reasonable attorneys’ fees)
arising out of any such act or omission, regardless of whether such
claim or cause of action becomes known or is asserted, or such cost
or expense is incurred, during the Term, except to the extent that
it is finally determined in a judicial proceeding or in an
arbitration proceeding pursuant to section 8 that liability for
such claim or cause of action is due to Executive’s gross
negligence, knowing malfeasance, or willful misconduct.
(e)
Payments;
Withholding of Taxes, etc . Payments of Base Salary shall be
made in biweekly or other installments in accordance with
Satellite’s general payroll practices from time to time in
effect. All payments to Executive hereunder shall be reduced by
taxes and other amounts that the Company is required by law or
authorized by Executive to withhold.
5.
Profits
Interest . As an additional inducement
to Executive to enter into this Agreement, Executive shall be
entitled to a “Profits Interest” from Company on the
terms and subject to the conditions and limitations set forth in
Exhibit A .
6.
Termination
.
(a)
Definitions
. As used in this
Agreement, the following terms have the meaning ascribed to them in
this subsection:
(1)
“ Cause
” means:
(i)
Executive’s
knowing and willful violation of Satellite or Company policy that
causes a material adverse effect on the Company or Satellite or
continued failure, after not less than thirty (30) days’
written notice from the Company or Satellite, to perform his duties
as described in section 3, including failure to follow lawful
directions of the Board of Directors of the Company, except where
such repeated failure is caused by or attributable to a
Disability;
(ii)
The issuance of an
indictment or filing of a criminal information charging Executive
with the commission of a crime constituting a felony or involving
moral turpitude or Executive’s conviction of any such
crime;
(iii)
Executive’s
embezzlement or criminal diversion of funds; or
(iv)
Executive’s
failure to perform or to comply with any material term or condition
of this Agreement, if Executive fails to cure such failure or fails
to commence and diligently seek to cure such failure within thirty
(30) days after written notice of such failure.
(2)
“ Change in
Control ” means:
(i)
any
“person” (as such term is used in section 13(d) and
14(d) of the Securities Exchange Act of 1934 (the “Exchange
Act”)) (other than a person who as of the Effective Date owns
an interest in the Company or in Satellite or any affiliate of any
such person) becomes the beneficial owner, directly or indirectly,
of interests in the Company or in Satellite representing more than
fifty percent (50%) of the combined voting power of the
then-outstanding interests in the Company or in Satellite (as the
case may be); or
(ii)
the consummation
of:
(x)
any consolidation or
merger or share or unit exchange involving the Company or Satellite
in which the Company or Satellite (as the case may be) is not the
continuing or surviving entity or pursuant to which interests in
the Company or Satellite would be converted into cash, securities,
or other property, other than a merger of the Company or of
Satellite in which the holders of voting interests in the Company
or Satellite (as the case may be) immediately before the merger own
fifty percent (50%) or more of the voting interests in the
surviving entity immediately after the merger; or
(y)
any sale, lease,
exchange, or other transfer (in one transaction or a series of
related transactions) of substantially all of the assets of the
Company or of Satellite other than to one or more of its
wholly-owned subsidiaries or to an entity in which the persons
holding voting interests in the Company or Satellite immediately
before the consummation of the transaction own fifty percent (50%)
or more of the voting interests.
(3)
“
Disability ” means the physical or mental infirmity of
Executive (including Executive’s addiction to, or habitual
abuse of, alcohol or other drugs) which infirmity causes him to be
substantially unable to perform his duties hereunder for any period
of ninety (90) consecutive days, despite provision by Iridium of
reasonable accommodations as requited by law.
(4)
“ Good
Reason ” means the occurrence of any of the following
which is not cured within fifteen (15) days after written notice
thereof to Iridium:
(i)
Iridium’s
assignment to Executive of duties materially inconsistent with
Executive’s position, authority, duties, or responsibilities
specified herein or as modified from time to time by written
agreement; or
(ii)
the Company’s or
Satellite’s failure to perform or comply with any material
term or provision of this Agreement.
(5)
“ Termination
Date ” means the date as of which Executive’s
employment is terminated.
(b)
In
General .
(1)
Iridium may elect at
any time to terminate Executive’s employment under this
Agreement upon notice of such termination to Executive for any
reason or no reason, with or without Cause, in which event the
termination provisions of this Agreement shall govern. In the event
of Iridium’s giving of notice of nonextension as provided in
section 2, then immediately upon the giving of such notice,
Executive’s employment shall be deemed terminated and
Executive shall be entitled to severance as follows: (i) an amount
equal to twelve months’ Base Salary at the rate then in
effect plus (ii) an amount equal to six months’ bonus (based
on the incentive plan in effect on the date of giving notice and
determined as though 100% of all applicable goals and targets have
been achieved). The foregoing amounts shall be paid to Executive in
a lump sum within thirty days of termination, subject to receipt
from Executive of the release described in subsection (h) hereof
and Executive’s compliance with the provisions of section 7.
Iridium shall continue Executive’s health/medical benefits
(or reimburse Executive for the cost of continuation coverage under
COBRA) until Executive is afforded health/medical benefits by
another employer, for a maximum of six months from the Termination
Date.
(2)
Executive may terminate
his employment at any time by written notice to Iridium for Good
Reason or, absent Good Reason, upon thirty (30) days’ written
notice to Iridium.
(c)
Involuntary or
For Good Reason . If Executive’s employment is
terminated by the Company or Satellite other than for Cause or
Disability, or if Executive’s employment is terminated by
Executive for Good Reason, Executive shall be entitled to severance
as follows: (i) an amount equal to twelve month’s Base Salary
(at the rate in effect on the Termination Date) plus (ii) an amount
equal to twelve months’ Bonus (based on the incentive plan in
effect on the Termination Date and determined as though 100% of all
applicable goals and targets have been achieved). The foregoing
amounts shall be paid to Executive in a lump sum within thirty (30)
days of termination, subject to receipt from Executive of the
release described in subsection (h) and Executive’s
compliance with the provisions of section 7. In addition, subject
to receipt of the release described in subsection (h) and
Executive’s compliance with the provisions of section 7,
Iridium shall continue Executive’s health/medical benefits
(or reimburse Executive for the cost of continuation coverage under
COBRA) until Executive is afforded health/medical benefits by
another employer, for a maximum of twelve months from the
Termination Date. If Executive refuses to execute such release,
Iridium shall not pay the foregoing severance to Executive and
Executive shall reserve all rights and remedies at law or in equity
against Iridium.
(d)
For Cause or
Without Good Reason . If the Company or Satellite
terminates Executive’s employment for Cause, or if Executive
terminates his employment other than for Good Reason (and such
termination is not by reason of his death), Iridium shall pay
Executive his Base Salary through the Termination Date and any
other compensation and benefits (but no portion of any bonus that
might have been earned for that calendar year had Executive
remained) that may be due or provided to the Executive upon
termination of
employment under such
circumstances in accordance with the terms and conditions of any
applicable employee benefit plans of Iridium.
(e)
On Account of
Disability . If the Company or Satellite
terminates Executive’s employment on account of
Executive’s Disability, Iridium shall pay, within thirty days
of the date of termination, to Executive his Base Salary through
the Termination Date and a prorated portion of any Bonus to which
Executive would otherwise have been entitled for the year in which
the termination becomes effective (determined as though all targets
and objectives had been met).
(f)
Upon Death of
Executive . If Executive’s employment
is terminated by reason of his death, then Iridium shall continue
paying amounts to Executive’s estate or other successor in
interest for a period of six (6) months from the date of
Executive’s death at a rate equal to Executive’s Base
Salary in effect on such date, in biweekly or other installments in
accordance with Iridium’s general payroll practices. In
addition, Iridium shall pay to Executive’s estate or other
successor in interest a prorated portion of the Bonus to which
Executive would otherwise have been entitled for the calendar year
in which falls the date of his death, which shall be paid promptly
but in no event later than three (3) months after the end of such
calendar year, and shall continue any benefits to his
surv
