Exhibit 10.8
CLASS B RESTRICTED SHARE
AGREEMENT
CLASS B RESTRICTED SHARE AGREEMENT
(this “ Agreement ”) entered into as of this
May 6, 2009 (the “ Grant Date ”), between
Intelsat Global, Ltd. (formerly known as Serafina Holdings Limited
and referred to herein as the “ Company ”), and
Michael McDonnell, an employee of the Company or one of its
Subsidiaries (the “ Employee ”);
WHEREAS, the Employee has agreed to
perform services for the Company or one or more of its Subsidiaries
(the “ Employer ”); and
WHEREAS, the Company wishes to carry
out the Intelsat Global, Ltd. 2008 Share Incentive Plan (as it may
be amended from time to time, the “ Plan ”), the
terms of which are hereby incorporated by reference and made a part
of this Agreement; and
WHEREAS, the Committee appointed to
administer the Plan pursuant to Section 3 of the Plan has
determined that it would be to the advantage and in the best
interest of the Company and its shareholders to grant the
Restricted Shares provided for herein (each a “ Class B
Restricted Share ” and collectively the “ Class
B Restricted Shares ”) to the Employee as an inducement
to enter into or remain in the service of the Company (or one of
its Subsidiaries) (the “ Employer ”) and as an
incentive for increased efforts during such service, and has
advised the Company thereof and instructed the undersigned officers
to grant said Class B Restricted Shares; and
WHEREAS, this Agreement memorializes
certain terms and conditions applicable to the Class B Restricted
Shares;
NOW, THEREFORE, in consideration of
the mutual covenants hereinafter set forth and for other good and
valuable consideration, the parties hereto do hereby agree as
follows:
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1.
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Capitalized
Terms . Capitalized terms
not defined herein shall have the meaning ascribed to such terms in
the Plan.
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2.
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Purchase of
Class B Restricted Shares . Upon execution of this Agreement and the
Management Shareholders Agreement, the Company or one of its
Affiliates will issue or sell to the Employee 80,679 Class B
Shares, par value U.S. $.001 per share, for a purchase price of par
value U.S. $.001 per share. The Employee acknowledges that the
Class B Restricted Shares will be subject to the terms and
conditions set forth in this Agreement and shall be subject to a
substantial risk of forfeiture and restrictions on
transferability.
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3.
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Fair Market Value; 83(b)
Election . The parties
agree that the Fair Market Value of each Class B Restricted Share
as of the Grant Date is U.S. $8.58. The Employee shall make an
election with the Internal Revenue Service (the “ IRS
”) under Section 83(b) of the Internal Revenue Code of
1986, as amended (the “ Code ”) and the
regulations promulgated thereunder in the form of Exhibit B
attached hereto (the “ 83(b) Election ”). The
Employee understands that under applicable law such election must
be filed with the IRS no later than thirty (30) days after the
Grant Date to be effective. If the Employee files an effective
83(b) Election, the excess of the fair market value of the Class B
Restricted Shares (which the IRS may assert is different from the
Fair Market Value
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determined by the parties)
covered by such election over the amount paid by the Employee for
the shares shall be treated as ordinary income received by the
Employee, and the Company or one of its Subsidiaries shall withhold
from Employee’s compensation any amounts required to be
withheld under applicable law. The foregoing is merely a brief
summary of complex tax laws and regulations, and therefore the
Employee is advised to consult with his own tax advisors regarding
his purchase, the 83(b) Election and holding of Class B Restricted
Shares.
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4.
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Equity
Plan . The Class B
Restricted Shares and this Agreement shall be subject to the terms
of the Plan, to the extent the terms of such Plan are not
inconsistent with the terms of this Agreement. In the event of any
inconsistency between the terms of the Plan and the terms of this
Agreement, this Agreement shall govern.
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5.
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Vesting . All Class B Shares shall initially be
unvested, except as provided in Section 5(a)(i)
below.
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(a)
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Class B
Time-Vesting Shares .
57,628 of the Class B Restricted Shares (the “ Class B
Time-Vesting Shares ”) shall vest as follows, subject to
the Employee’s continued employment on the date of vesting
and to Section 6 below:
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(i)
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10 percent of
the Class B Time-Vesting Shares shall be vested as of the Grant
Date;
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(ii)
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90 percent of
the Class B Time Vesting Shares shall vest in fifty-four
(54) equal monthly installments of 1/54 per month
commencing on June 4, 2009 and on the fourth day of each
calendar month thereafter so the Class B Time-Vesting Shares will
be fully vested on November 4, 2013; and
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(iii)
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Immediately
prior to the first Change in Control to occur following the Grant
Date (and subject to the consummation of such Change in Control),
any unvested Class B Time-Vesting Shares shall become fully
vested.
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(b)
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Class B
Performance Shares .
Subject to Section 6 below, 23,051 of the Class B Restricted
Shares (the “ Class B Performance Shares ”)
shall vest as set forth on Exhibit A , subject to the
Employee’s continued employment on the dates provided in
Exhibit A .
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6.
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Termination
of Employment.
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(a)
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Termination
without Cause or for Good Reason . In the event of the Employee’s
Termination of Employment by the Employer without Cause or by the
Employee for Good Reason (as defined in the Employment Agreement by
and among the Company, Intelsat, Ltd. and the Employee, dated
May 6, 2009 and effective as of November 3, 2008 (the
“ Employment Agreement ”)):
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(A) Time Vested Shares . On
or prior to April 30, 2011, any unvested Class B Time-Vesting
Shares (and the related cash dividends and proceeds thereof held by
the Company in accordance with Section 8 hereof (“
Custodial Dividends ”), if any, with respect to such
Class B Shares which have not vested at the time of the dividend
payment) shall be forfeited as of the date of such
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Termination of Employment subject to
the last sentence of this Section 6(a)(i)(A). In the event
such Termination of Employment occurs after April 30, 2011,
fifty percent (50%) of the unvested Class B Time-Vesting
Shares (and the related Custodial Dividends, if any, with respect
to such Class B Shares which have not vested at the time of the
dividend payment) shall be forfeited as of the date of such
Termination of Employment subject to the last sentence of this
Section 6(a)(i)(A) and fifty percent (50%) of the
unvested Class B Time-Vesting Shares (and the related Custodial
Dividends, if any, with respect to such Class B Shares which have
not vested at the time of the dividend payment) shall vest on the
date of such Termination of Employment. Notwithstanding the
foregoing, if during the period commencing with such Termination of
Employment and ending on the six month anniversary of such
Termination of Employment (the “ Involuntary Termination
Protected Period ”) the Company enters into a definitive
agreement with respect to a Change in Control transaction, then
immediately on the effective date of the Change in Control, as
applicable (and subject to the consummation of such Change in
Control), any unvested Class B Time-Vesting Shares shall become
fully vested (and the related Custodial Dividends vested, if any,
with respect to such Class B Shares which have not vested at the
time of the dividend payment).
(B) Performance Shares .
Except as provided in the immediately following sentence, no
portion of the Class B Performance Shares (and the related
Custodial Dividends, if any, with respect to such Class B Shares
which have not vested at the time of the dividend payment) that is
not vested as of the date of such a Termination of Employment,
shall become vested following the date of Termination of
Employment. Notwithstanding the foregoing, if during the
Involuntary Termination Protected Period either (I) an Initial
Public Offering occurs, or (II) the Company enters into a
definitive agreement with respect to a Change in Control
transaction, then immediately prior to the effective date of the
Initial Public Offering or Change in Control, as applicable (and
subject to the consummation of such Initial Public Offering or
Change in Control), an amount of the Class B Performance Shares as
determined pursuant to Exhibit A (and the related Custodial
Dividends paid, if any, with respect to such Class B Shares which
have not vested at the time of the dividend payment) will vest as
if the Change in Control or Initial Public Offering, as applicable,
had occurred immediately prior to such Termination of Employment
and any Class B Performance Shares (and the related Custodial
Dividends paid, if any, with respect to such Class B Shares which
have not vested at the time of the dividend payment) that remain
unvested at such time shall be forfeited. Except as provided in the
immediately preceding sentence, all Class B Performance Shares (and
the related Custodial Dividends paid, if any, with respect to such
Class B Shares which have not vested at the time of the dividend
payment) that remain outstanding as of the last day of the
Involuntary Termination Protected Period shall be forfeited
immediately following the last day of the Involuntary Termination
Protected Period.
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(ii)
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Repurchase
Right . Subject to
Sections 6(e) and 7 hereof, any Class B Shares held
by the Employee as a result of the vesting of Class B Restricted
Shares may be repurchased by the Company at any time during the
two-year period following the date of Termination of Employment at
a purchase price per Class B Share equal to the Class B Repurchase
Price of such Class B Share as of the date of such repurchase.
Notwithstanding the foregoing, if any Class B Restricted Shares are
repurchased by the Company (or the Sponsor Shareholder pursuant to
Section 11 of the Management Shareholders Agreement) during
the Involuntary Termination Protected Period, and, subsequent to
such repurchase, but prior to the expiration of the Involuntary
Termination Protected Period, either (A) an Initial Public
Offering occurs, or (B) the Company enters into a definitive
agreement with respect to a Change in Control transaction, then,
upon the consummation of such Initial Public Offering or Change in
Control, as the case may be, the Company shall pay to the Employee
within sixty (60) days after the consummation of such Change
in Control or Initial Public Offering an amount equal to the
excess, if any, of (x) the Class B Repurchase Price of such
Class B Restricted Shares on the date of the Change in Control or
the Initial Public Offering over (y) the purchase price paid
to the Employee for such Class B Restricted Shares.
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(iii)
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Notwithstanding
the foregoing, if the Company consummates an acquisition by or
merger of the Company through a transaction or series of
transactions with any of those certain Person(s) described in the
resolutions of the Compensation Committee of the Board dated
December 29, 2008 but after which the Sponsor Shareholders do
not in the aggregate possess beneficial ownership of more than
fifty percent (50%) of the voting securities (for the election
of directors) of the Company or its successor (a “
Significant Corporate Event ”), then if on or
following such Significant Corporate Event (i) (A) the
affirmative written consent of the Sponsor Shareholders or a
representative thereof is not required for the Company to terminate
the Employee’s employment at the time of such termination and
(B) the Employee’s employment with the Company is
terminated by the Company without Cause or by the Employee for Good
Reason, then the applicable vesting provisions shall apply as if a
Change in Control had occurred immediately prior to such
termination of employment, or (ii) (A) the affirmative
written consent of the Sponsor Shareholders or a representative
thereof is required for the Company to terminate the
Employee’s employment at the time of such termination and at
all times thereto, and (B) the Employee’s employment
with the Company is terminated by the Company without Cause or by
the Employee for Good Reason on or after the date that is eighteen
(18) months following the date of such Significant Corporate
Event, then the applicable vesting provisions shall apply as if a
Change in Control had occurred immediately prior to such
termination of employment.
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(b)
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Resignation
by the Employee .
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(i)
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Treatment . In the event of a Termination of Employment by
the Employee other than for Good Reason or due to death or
Permanent Disability, all unvested Class B Restricted Shares (and
the related Custodial Dividends paid, if any, with respect to such
Class B Shares which have not vested at the time of the dividend
payment) shall be immediately forfeited.
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(ii)
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Repurchase
Right . Subject to
Sections 6(e) and 7 hereof, any Class B Shares held
by the Employee as a result of the vesting of Class B Restricted
Shares may be repurchased by the Company at any time during the
two-year period following the date of any Termination of Employment
that occurs during the period beginning on the Grant Date and
ending on April 30, 2011, at a purchase price per Class B
Share equal to the lesser of (1) the Class B Repurchase Price
of such Class B Share on the date of such Termination of
Employment, or (2) (A) the Class B Repurchase Price of
such Class B Share on the Grant Date minus (B) the value of
any dividends, distributions, or dividend equivalents previously
paid to the Employee in respect of such Class B Share (subject to
equitable adjustment in the Committee’s good faith discretion
to reflect dividends, distributions, corporate transactions, or
similar events, to the extent not reflected in (y)) but in no event
less than the par value of such Class B Share. With respect to any
Termination of Employment following April 30, 2011, any Class
B Shares held by the Employee as a result of the vesting of Class B
Restricted Shares may be repurchased by the Company at any time
during the two-year period following the date of such Termination
of Employment at the Class B Repurchase Price of such Class B Share
on the date of such repurchase.
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(c)
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Death and
Permanent Disability .
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(i)
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Treatment . In the event of the Employee’s
Termination of Employment by reason of the Employee’s death
or Permanent Disability (as defined in the Employment
Agreement):
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(A) Time Vested Shares . Any
unvested Class B Time-Vesting Shares (and the related Custodial
Dividends paid, if any, with respect to such Class B Shares which
have not vested at the time of the dividend payment) shall vest as
of the date of death or Termination of Employment due to Permanent
Disability.
(B) Performance Shares .
Except as provided in the immediately following sentence, no
portion of the Class B Performance Shares (and the related
Custodial Dividends paid, if any, with respect to such Class B
Performance Shares which have not vested at the time of the
dividend payment) that is not vested as of the date of such a
Termination of Employment shall become vested following the date of
Termination of Employment. Notwithstanding the foregoing, if during
the period commencing with such Termination of Employment and
ending on the six month anniversary of such Termination of
Employment (the “ D & D Protected Period
”), either (I) an Initial Public Offering occurs, or
(II) the Company enters into a definitive agreement with respect to
a
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Change in Control transaction, then
immediately prior to the effective date of the Initial Public
Offering or Change in Control, as applicable (and subject to the
consummation of such Initial Public Offering or Change in Control),
an amount of the Class B Performance Shares as determined pursuant
to Exhibit A (and the related Custodial Dividends paid, if
any, with respect to such Class B Shares which have not vested at
the time of the dividend payment) will vest as if the Change in
Control or Initial Public Offering, as applicable, had occurred
immediately prior to such Termination of Employment and any Class B
Performance Shares (and the related Custodial Dividends paid, if
any, with respect to such Class B Shares which have not vested at
the time of the dividend payment) that remain unvested at such time
shall be forfeited. Except as provided in the immediately preceding
sentence, all Class B Performance Shares (and the related Custodial
Dividends paid, if any, with respect to such Class B Shares which
have not vested at the time of the dividend payment) that remain
outstanding as of the last day of the D & D Protection Period
shall be forfeited immediately following the last day of the D
& D Protected Period. Notwithstanding anything to the contrary
in this Section 6(c), as of the date of a Termination of
Employment as a result of an Employee’s death or Permanent
Disability, the Committee, in its sole discretion, may provide for
the vesting of any then unvested Class B Performance
Shares.
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(ii)
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Repurchase
Right . Subject to
Sections 6(e) and 7 hereof, following the Termination
of Employment due to death or Permanent Disability described above,
any Class B Shares held by the Employee as a result of the vesting
of Class B Restricted Shares may be repurchased by the Company at
any time during the two-year period following the date of such
Termination of Employment at a purchase price per share equal to
the Class B Repurchase Price of such Class B Share on the date of
repurchase. Notwithstanding the foregoing, if any Class B
Restricted Shares are repurchased by the Company (or the Sponsor
Shareholder pursuant to Section 11 of the Management
Shareholders Agreement) during the D & D Protected Period, and,
subsequent to such repurchase, but prior to the expiration of the D
& D Protected Period either (A) an Initial Public Offering
occurs, or (B) the Company enters into a definitive agreement
with respect to a Change in Control transaction, then, upon the
consummation of such Initial Public Offering or Change in Control,
as the case may be, the Company shall pay to the Employee within
sixty (60) days after the consummation of such Change in
Control or Initial Public Offering an amount equal to the excess,
if any, of (x) the Class B Repurchase Price of such Class B
Restricted Shares on the date of the Change in Control or the
Initial Public Offering, as applicable, over (y) the purchase
price paid to the Employee for such Class B Restricted
Shares.
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(d)
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Termination
for Cause .
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(i)
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Treatment . In the event of the Employee’s
Termination of Employment by the Employer for Cause, all unvested
Class B Restricted Shares (and the related Custodial Dividends
paid, if any, with respect to such Class B Shares which have not
vested at the time of the dividend payment) shall be immediately
forfeited.
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(ii)
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Repurchase
Right . Subject to
Sections 6(e) and 7 hereof, from and after the date
of such Termination of Employment, the Company may repurchase any
or all of such Class B Shares held by the Employee as a result of
the vesting of Class B Restricted Shares for a per share purchase
price equal to the par value as of the Grant Date of such
Share.
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(e)
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Expiration
of Repurchase Rights .
Notwithstanding any other provision of this Section 6, the
Company’s repurchase rights set forth in this Section 6
with respect to Class B Restricted Shares held by the Employee
shall expire immediately prior to the occurrence of an Initial
Public Offering or a Listing Event (subject to the consummation of
such Initial Public Offering or such Listing Event).
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(f)
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Claw-Back . In the event that the Employee violates any of
the covenants set forth in Section 5.3 of the Employment
Agreement or materially violates any of the covenants set forth in
Sections 5.1 and 5.2 of the Employment Agreement during his
employment or at any time prior to the first anniversary of the
Employee’s Termination of Employment for any reason, the
Employee shall, in addition to any other remedy which may be
available at law or in equity, be required to pay to the Company a
cash amount equal to the product of (i) the number of Class B
Restricted Shares that first become vested during the 12-month
period immediately preceding (or at any time after) the date that
the Employee first breaches such covenant and (ii) the fair
market value per share of the Class B Restricted Shares as of the
date such Class B Restricted Shares first become vested. In
addition, all Class B Restricted Shares that have not become vested
prior to the date of such breach shall thereupon be
forfeited.
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(g)
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Involuntary
Termination Protected Period; D & D Protected Period
. For the avoidance of doubt, only a
Change in Control that is consummated pursuant to the terms and
conditions of a definitive purchase and sale or similar agreement
that is fully executed by the parties during the Involuntary
Termination Protected Period or D & D Protected Period, as
applicable, and that does not terminate by its terms or otherwise
prior to the consummation of the Change in Control (or pursuant to
other terms and conditions with the same party that replace or
supplement the original agreement), may result in any payment or
accelerated vesting described in this Section 6.
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7.
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Restrictions
. In order to receive any grant
hereunder, the Employee must be or become a party to the Management
Shareholders Agreement and must execute the proxy attached hereto
as Exhibit C of this Agreement. The transferability of Class
B Restricted Shares and any Class B Shares that are held by the
Employee as a result of vesting of Class B Restricted Shares shall
be governed by the Management Shareholders Agreement.
Notwithstanding anything to the contrary in Section 6 hereof
in the event that the Employee has transferred any Class B Share
that was held by the Employee as a result of vesting of Class B
Restricted Shares to a person or entity other than a Permitted
Transferee (as such term is defined in the Management Shareholders
Agreement), and such transfer was in accordance with the terms of
the Management Shareholders
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Agreement, the Company shall not
have the right to repurchase such transferred Class B Shares. Any
transferee of Class B Restricted Shares or Class B Shares from the
Employee (and any subsequent transferee) shall be required to
execute the proxy attached hereto as Exhibit C of this
Agreement and become a party to the Management Shareholders
Agreement.
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8.
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Employee
Shareholder Rights .
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(a)
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Except as
otherwise set forth herein, in the Plan or in the proxy executed by
the Employee, the Employee shall have all rights of a shareholder
with respect to the Class B Restricted Shares.
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(b)
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Shareholders of
Class B Restricted Shares shall not be entitled to receive their
percentage interest of all Distributions paid to shareholders until
each shareholder of Class A Shares receives Distributions
equal to their Paid-in-Capital (as defined below), and, thereafter,
the holders of Class B Shares and holders of Class A Shares
shall be entitled to receive Distributions ratably based upon the
proportionate number of outstanding common shares of the Company
held by each such shareholder; provided that at the time of
any Distribution of Class A Shares to the holders of
Class A Shares (a “ Class A Share Distribution
”), the Company shall simultaneously make a Class B Share
distribution to the holders of Class B Shares in an amount
necessary to maintain the proportion of Class A Shares to
Class B Shares in effect as of the date of such Class A Share
Distribution; and provided , further , that for
purposes of determining the value of the Class A Shares
distributed pursuant to any Class A Share Distribution, the
value of each Class A Share shall be equal to the excess of
(x) the value of a Class A Share over (y) the value
of a Class B Share, in each case, determined as of the date of such
Class A Share Distribution. For purposes of this
Agreement,
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(i)
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“
Distributions ” shall mean (A) distributions of
Class A Shares, (B) distributions in liquidation of the
Company, and (C) other distributions payable to shareholders
for which such an entitlement to receive such distribution would
not prevent the Class A Shares from qualifying as
“service recipient stock” within the meaning of
Department of Treasury Regulation Section 1.409A-1(b)(5)(iii)
liquidation distributions;
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(ii)
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“
Paid-in-Capital ” shall mean, (A) with respect to
each Class A Restricted Share issued on the Closing Date, the
Fair Market Value of such Class A Share on the Closing Date
(which, for the avoidance of doubt, was $100 per share),
(B) with respect to each Class A Share acquired upon
exercise of any Rollover Option, the Fair Market Value of such
Class A Share on the Closing Date and (C) with respect to
any other Class A Share, the purchase price paid by such
shareholder for such Class A Share (including, without
limitation, the exercise price paid upon exercise of any Share
Option); and
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(iii)
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“
Rollover Option ” shall mean a Non-Qualified Stock
Option issued to an optionholder on the Closing Date in
consideration for the termination and cancellation of one or more
stock rights issued under the Intelsat Holdings, Ltd. Share
Incentive Plan
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(c)
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Notwithstanding
the foregoing, cash dividends, if any, paid with respect to any
Class B Restricted Shares which have not vested at the time of the
dividend payment shall be paid to and held in the custody of the
Company, shall accrue interest at the lesser of the interest rate
applicable to the primary revolving credit agreement of the Company
or its Subsidiaries, as in effect from time to time, or 4% compound
interest per annum, and shall be subject to the same restrictions
that apply to the corresponding Class B Restricted Shares. Except
as provided in the next sentence, any Custodial Dividends held by
the Company for Class B Time-Vesting Shares (including any interest
thereon payable in accordance with this Section 8) shall be
paid to the Employee at the earliest of (i) at such time as
any Class B Time-Vesting Shares vest pursuant to the vesting
schedule under Section 5(a) hereof (disregarding vesting under
a Change in Control), (ii) when the Employee incurs a
“separation from service” as defined in Code
Section 409A, provided that such Custodial Dividends are not
otherwise forfeited as described herein or (iii) on a Change
in Control, provided that such Change in Control would also
constitute a change in ownership or effective control of the
Company or a change in the ownership of a substantial portion of
the assets of the Company within the meaning of Code
Section 409A. Any Custodial Dividends that vest within two
years following a separation from service pursuant to
Section 6(a)(i)(A) hereof shall be paid on the date
that
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