Severance Policy for Corporate Officers – Loral Space and Communications Inc.
Loral Space & Communications Inc.
Severance Policy for Corporate Officers
(Amended and Restated as of August 4, 2011)
Plan Document
1. General Information.
(a) The Loral Space & Communications Inc. Severance Policy for Corporate
Officers (the “Plan”) provides eligible employees of Loral Space &
Communications Inc. (the “Company”) with severance benefits if they are
terminated from employment with the Company or undergo a Separation from Service
for the reasons described herein.
(b) Notwithstanding any other provision of the Plan, the Plan supersedes any
and all prior plans, policies and practices, written or oral, which may have
previously applied governing the payment of severance benefits to “Eligible
Employees.”
(c) The Plan is adopted and effective as of June 14, 2006, as amended and
restated as of December 17, 2008 and further amended and restated as of August
4, 2011 (the “Effective Date”).
2. Eligibility.
(a) You are an “Eligible Employee” for purposes of this Plan if
(1) you are the Chief Executive Officer of the Company (the “CEO”); or
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(2) |
(A) |
you are a regular, full-time employee of the Company who is the President, |
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(B) |
your primary place of employment is the Company153s corporate headquarters |
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(C) |
you have been employed by the Company for at least six months; and |
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(D) |
you have been designated by the Plan Administrator to be an Eligible Employee |
provided, however, that if (i) the terms and conditions of your
employment are covered by a collective bargaining agreement (unless such
agreement provides for participation in the Plan), (ii) you have entered into a
written agreement with the Company, or (iii) you have received an offer letter
from the Company, in each case, that provides for payments or benefits upon
termination of employment, and such agreement or offer letter has not expired or
lapsed, you shall not be considered an “Eligible Employee” and shall not be
eligible to participate in this Plan. No individual other than the CEO shall be
eligible to participate in the Plan as an Eligible Employee unless and until
such individual meets all of the requirements of sub-clauses (A), (B), (C) and
(D) of clause (2) above. Except as specifically prohibited under Section 6
herein, any Eligible Employee may be disqualified by the Plan Administrator at
any time for any reason. At any time upon your becoming an Eligible Employee or
subsequently becoming disqualified hereunder, the Plan Administrator shall
provide you with written notice of your status as such.
(b) You are a “Participant” for purposes of this Plan if you are an Eligible
Employee whose employment with the Company and all Affiliates is terminated by
the Company or an Affiliate without Cause (a “Qualifying Termination”);
provided, however, that none of the following shall be deemed a
Qualifying Termination and you will not be entitled to severance benefits
if:
(1) Your employment is terminated for Cause;
(2) You voluntarily resign from employment; or
(3) You cease to be an Eligible Employee due to death, disability or
retirement.
For purposes of this Plan, a Category I Employee who becomes a Participant
pursuant to this Section 2(b) shall be referred to as a Category I Participant,
and a Category II Employee who becomes a Participant pursuant to this Section
2(b) shall be referred to as a Category II Participant.
(c) Notwithstanding anything in the Plan to the contrary, no Participant will
be eligible to receive any severance benefit or Payment (as defined below) under
the Plan unless, and all severance benefits and Payments hereunder shall be
delayed until, the Participant executes and delivers to the Company a general
release of all claims against the Company and its subsidiaries and Affiliates
that contains all of the provisions set forth in Exhibit A hereto and is
otherwise satisfactory to the Company, and all applicable revocation periods
described in such release have expired without such Participant153s having revoked
all or a portion of such release. If a Participant fails to execute such release
on or prior to the Release Expiration Date or timely revokes his acceptance of
such release thereafter, the Participant shall not be entitled to any severance
benefits or Payments hereunder. Notwithstanding anything herein to the contrary,
in any case where the date of a Qualifying Termination and the Revocation
Expiration Date fall in two separate taxable years, all Payments and benefits
required to be provided to a Participant that are treated as deferred
compensation for purposes of Section 409A shall be delayed until the later
taxable year, and in all such cases a Participant shall receive in a lump sum on
the later of (i) the date such release of claims becomes effective following the
timely and proper execution of such release and the
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expiration of any applicable revocation period without revocation by the
Participant, and (ii) the first day of such later taxable year, all severance
benefits and Payments, if any, that, pursuant to the applicable payment schedule
herein would have been paid prior to such date but for this Section 2(c). For
purposes of this Section 2(c), the term “Release Expiration Date” means the date
that is twenty-one (21) days following the date upon which the Company timely
delivers the release contemplated above, or in the event that such termination
of employment is “in connection with an exit incentive or other employment
termination program” (as such phrase is defined in the Age Discrimination in
Employment Act of 1967), the date that is forty-five (45) days following such
delivery date; provided, however, that in no event shall the
Company deliver the release to a Participant later than January 15 following the
year of such Qualifying Termination. For purposes of this Section 2(c), the term
“Revocation Expiration Date” means the date that is twenty-eight (28) days
following the date upon which the Company timely delivers the release
contemplated above, or in the event that such termination of employment is “in
connection with an exit incentive or other employment termination program” (as
such phrase is defined in the Age Discrimination in Employment Act of 1967), the
date that is fifty-two (52) days following such delivery date.
3. Severance Benefits. Participants shall be
eligible, upon execution of a release and expiration of any applicable waiting
period, as provided in Section 2(c) above, for cash severance pay under this
Plan pursuant to either Section 3(a) or Section 3(b) hereunder, but not both.
(a) Severance Benefit Not in connection with a Corporate Event.
(1) Lump Sum Payment. Subject to Section 2(c) above and Section 3(e)
below, in the event an Eligible Employee becomes a Participant pursuant to
Section 2(b), such Participant shall receive a lump sum payment, not subject to
Mitigation (the “Initial Payment”), within twenty days following such
Participant153s Qualifying Termination, equal to either:
(x) in the case of a Category I Participant, the greater of:
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(A) |
six calendar months153 Pay (i.e., 50% of Pay) (the “Six-Months153-Pay Amount”); |
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(B) |
the sum of (i) three calendar months153 Pay (i.e., 25% of Pay) plus |
(y) in the case of a Category II Participant, the Three-Plus-Two Amount.
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Subject to Section 2(c) above and Section 3(d) below, to the extent that such
Participant153s option agreements or other equity award agreements or incentive
compensation agreements with the Company provide for less than 100% vesting upon
such Qualifying Termination, such Participant shall be entitled to accelerated
vesting of such Participant153s unvested options and other equity awards and
incentive compensation awards upon such Qualifying Termination of (i) with
respect to time-vested awards, the next full tranche that would have vested on
the next vesting date under such agreements following such Qualifying
Termination, and (ii) with respect to awards scheduled to vest upon the
occurrence of achieving certain performance or stock-price thresholds, that
portion of such awards that would have vested during the twelve (12) months
following such Qualifying Termination based on the actual achievement of such
thresholds.
(2) Installment Payments. Subject to Section 2(c) above and Section
3(d) below, in addition to the Initial Payment, a Participant shall be entitled
to an additional severance benefit (the “Additional Severance”). The following
table sets forth, with respect to each category of Participant, (x) the
aggregate amount of the Additional Severance (which, notwithstanding anything in
the table below to the contrary, shall in no event be less than zero) and (y)
the maximum number of the Company153s regular biweekly pay periods during which
the Additional Severance shall be payable (the “Installment Period”).
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Category of Participant |
Category I Participants |
Category II Participants |
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Aggregate Amount of Additional Severance |
Either (x) to the extent the Initial Payment equals the Six-Months153-Pay |
Three calendar months153 Pay (i.e., 25% of Pay) |
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Installment Period |
39 biweekly pay periods |
6 biweekly pay periods |
The Additional Severance shall be payable, subject to the schedule set forth
below in this Section 3(a)(2), in a series of consecutive biweekly installments
(each such installment deemed a separate Payment pursuant to Section 3(i)
below). With respect to Category I Participants, the first 13 Payments of the
Additional Severance, if any, shall be payable in substantially equal biweekly
installments aggregating to the lesser of (x) the Six-Months153-Pay Amount and (y)
the aggregate amount of the Additional Severance, and the next 26 Payments of
the Additional Severance, if any, shall be payable in substantially equal
biweekly installments aggregating to the lesser of (i) one year153s Base Salary
and (ii) the excess of the aggregate amount of the Additional Severance over the
Six-Months153-Pay Amount. With respect to Category II Participants, the Additional
Severance shall be payable in substantially equal biweekly installments during
the Installment Period.
The intent of this payment schedule is to classify the greatest possible
portion of the Additional Severance allowable under law as exempt from the
requirements of Section 409A and to provide for a payment schedule that is
compliant with Section 409A with respect to Payments that cannot be made exempt
from the provisions thereof. As such, Payments that qualify as Exempt STD
Payments, if any, shall be made first, followed by Payments that qualify as
Exempt Safe Harbor Payments, if any, followed by 409A Payments, if any.
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Exempt STD Payments. The Payments constituting the Additional
Severance shall commence on the first biweekly payroll date following either (x)
in the case of a Category I Participant, the six-calendar-month anniversary of
such Participant153s Qualifying Termination, or (y) in the case of a Category II
Participant, the three-calendar-month anniversary of such Participant153s
Qualifying Termination, and shall end on the earlier of (i) the date on which
the entire Additional Severance has been paid to the Participant and (ii) the
last biweekly payroll date that is prior to or concurrent with March 15th of the
calendar year following the calendar year in which such Qualifying Termination
occurred. Such Payments shall be deemed Exempt STD Payments as defined in
Section 3(k)(1) below. For purposes of clarification, no Payments of Additional
Severance shall be either deemed Exempt STD Payments or paid pursuant to this
paragraph in the event such Qualifying Termination occurs on or after the date
such that pursuant to the payment schedule above the first Payment of the
Additional Severance would be made to the Participant after March 15th of the
calendar year following the calendar year in which the Qualifying Termination
occurred.
Exempt Safe Harbor Payments. In the event any Payments constituting
Additional Severance remain unpaid after payment of the Exempt STD Payments
above (or if no Payments may be classified as Exempt STD Payments), and provided
such Participant has undergone an Involuntary Separation from Service, such
unpaid Payments shall commence on the first biweekly payroll date following the
latest of (i) March 15th of the calendar year following the calendar year in
which the Qualifying Termination occurred, (ii) the date of such Participant153s
Involuntary Separation from Service and (iii) (1) in the case of a Category I
Participant, the six-calendar-month anniversary of such Participant153s Qualifying
Termination, or (2) in the case of a Category II Participant, the
three-calendar-month anniversary of such Participant153s Qualifying Termination;
and shall cease on the earliest of (x) the date on which the entire Additional
Severance has been paid to the Participant, (y) the last biweekly payroll date
that is prior to or concurrent with the last day of the second calendar year
following the calendar year in which such Involuntary Separation from Service
occurred and (z) the date on which the aggregate value of the Additional
Severance theretofore paid to the Participant (less the value of the Exempt STD
Payments, if any) equals two times the lesser of (A) such Participant153s
annualized compensation based upon the annual rate of pay for services provided
to the Company for the calendar year prior to the calendar year in which such
Participant undergoes such Involuntary Separation from Service and (B) the
maximum amount that may be taken into account under Section 401(a)(17) of the
Code with respect to a plan qualified pursuant to Section 401(a) of the Code for
the calendar year in which such Participant undergoes such Involuntary
Separation from Service. Such Payments shall be deemed Exempt Safe Harbor
Payments as defined in Section 3(k)(2) below. For purposes of clarification, no
Payments may be deemed Exempt Safe Harbor Payments or paid pursuant to this
paragraph unless and until the Participant has undergone an Involuntary
Separation from Service.
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409A Payments. In the event any Payments constituting Additional
Severance remain unpaid after payment of all Payments that may be classified as
Exempt Payments (or if no Payments may be classified as Exempt Payments), and
the Participant has undergone a Separation from Service, such unpaid Payments
shall commence on the first biweekly payroll date following either (i) the date
on which the last Exempt Safe Harbor Payment was paid to the Participant, or
(ii) if no Payments may be deemed Exempt Safe Harbor Payments, the latest of (1)
March 15th of the calendar year following the calendar year in which the
Qualifying Termination occurred, (2) the date of such Participant153s Separation
from Service and (3) (x) in the case of a Category I Participant, the
six-calendar-month anniversary of such Participant153s Qualifying Termination, or
(y) in the case of a Category II Participant, the three-calendar-month
anniversary of such Participant153s Qualifying Termination; subject in all cases
to possible delay as set forth in Section 3(l) below.
The Additional Severance shall be subject to Mitigation (as defined in
Section 4 below).
(b) Severance Benefit in connection with a Corporate Event. Subject to
Section 2(c) above and Section 3(e) below, in the event an Eligible Employee
becomes a Participant pursuant to Section 2(b) in connection with or in
contemplation of a Corporate Event (whether prior to, upon or following such
Corporate Event), such Participant shall receive a lump sum payment, not subject
to Mitigation, within twenty days following such Participant153s Qualifying
Termination, equal to the following:
(1) in the case of a Category I Participant, an amount equal to one year153s
Pay plus one year153s Base Salary; or
(2) in the case of a Category II Participant, an amount equal to (i) six
calendar months153 Pay (i.e., 50% of Pay) plus (ii) two weeks153 Pay for
every Year of Service plus (iii) one twelfth (1/12th) of two weeks153 Pay
for every Month of Service in excess of such Participant153s Years of Service.
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In addition to the lump sum payment set forth under (1) or (2) above, each
such Participant shall be entitled upon such Qualifying Termination to
accelerated vesting of all outstanding unvested options and other equity awards
and incentive compensation awards, including any SS/L Phantom SARs held by such
Participant, and all outstanding options and other awards subject to exercise
held by each such Participant shall remain exercisable until the option or award
expiration date set forth in such Participant153s option or award agreement or
agreements; provided, however, that any SS/L Phantom SARs held by
such Participant shall remain exercisable and shall be automatically settled on
the fixed dates following such Qualifying Termination set forth in such
Participant153s SS/L Phantom SAR Agreement.
For all purposes of this Plan, the determination as to whether an Employee153s
Qualifying Termination is in connection with or in contemplation of a Corporate
Event shall be made by the Plan Administrator, in his or its sole discretion, at
or prior to the date of any such Employee153s Qualifying Termination. In the
absence of any such determination, an Employee153s Qualifying Termination
following the Effective Date shall be deemed to be in connection with or in
contemplation of a Corporate Event.
(c) Continued Medical Insurance Coverage. In addition to the cash
severance provided in Section 3(a) or 3(b) of the Plan, subject to Section 2(c)
above and Section 3(e) below, each Participant shall be entitled to continued
participation in the Company153s medical, prescription, dental and vision
insurance coverage following the Participant153s Qualifying Termination through
one of the following two alternatives:
(1) A Participant may elect to participate in the Loral Retiree Medical Plan
if such Participant elects to begin receiving benefits from the Retirement Plan
of Space Systems/Loral, Inc. (the “SS/L Retirement Plan”). The Participant shall
remain eligible to participate in the Loral Retiree Medical Plan for so long as
the Participant is covered under other medical insurance coverage (e.g., COBRA
continuation or coverage provided by other employment) and has not allowed such
medical coverage to lapse at any time. The Participant shall make contributions
toward the cost of such Participant153s medical insurance in accordance with the
Loral Retiree Medical Plan. The Participant153s contributions will be deducted
from the Participant153s monthly retirement benefit payment from the SS/L
Retirement Plan.
(2) The Participant may elect COBRA continuation coverage of medical,
prescription, dental and vision insurance for the entire Severance Period (as
defined below); provided, however, that to the extent the
Participant elects to receive such coverage, the Participant shall be
responsible for payment of the full monthly COBRA premium applicable to such
medical, prescription, dental and vision insurance coverage. To the extent the
Participant elects such COBRA coverage, the Company shall pay to the Participant
each month during the Severance Period an amount equal to the excess, if any, of
the full monthly COBRA premiums for such coverage under the Company153s benefit
plans under which such medical, prescription, dental and vision insurance
coverage is provided, as in effect from time to time, over the amount of the
portion of such premiums the Participant would pay
– 7 –
if the Participant were an active employee (such payments, the “Medical
Continuation Payments”), which payments shall be paid in advance on the first
payroll day of each month during the Severance Period, commencing with the month
immediately following the date of termination; provided, however,
if during the Severance Period the Participant obtains employment that offers
medical, prescription, dental or vision insurance coverage, the Medical
Continuation Payments shall end on the earlier of (x) the date the Participant
becomes an active participant under the new coverage if the Participant elects
to be covered thereunder and (y) the date the Participant declines the new
coverage. To the extent that the Participant declines any such new coverage, the
Participant may elect to continue COBRA coverage for the remainder of the COBRA
coverage period (generally 36 months from the date of termination), if any, but
shall not receive Medical Continuation Payments thereafter. After the Severance
Period, the Participant may elect to continue COBRA coverage for the remainder
of the COBRA continuation period (generally 36 months from the date of
termination), if any, provided that the Participant shall no longer be
entitled to any further Medical Continuation Payments. For purposes of Section
3(c) and (d), the term “Severance Period” means the period commencing on an
Eligible Employee153s Qualifying Termination and continuing for either:
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(i) |
for a Category I Participant, twenty-four calendar months; or |
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(ii) |
for a Category II Participant, (x) six calendar months plus (y) a |
Any such participation in the Company153s medical, prescription, dental and
vision insurance coverage following a Participant153s termination of employment
shall be subject to all changes to the Company153s medical, prescription, dental
and vision insurance program following the Participant153s termination of
employment, including, but not limited to, any increases in the employee premium
amounts payable by the employees and the Participant.
With respect to either alternative (1) or (2) above, the Participant must
submit or arrange for the submission of all reimbursement requests no later than
180 days following the date such expenses are incurred, and the Company shall
arrange for reimbursement of all such allowable expenses no later than the end
of the Participant153s taxable year following the taxable year in which such
expenses are incurred.
In the event that a Corporate Event occurs, the Company may arrange for
alternative post-termination coverage to be provided pursuant to one or more
insurance coverage plans or programs maintained by one or more of the Company153s
Affiliates prior to any such Corporate Event or by Telesat Canada or one or more
of its affiliates, to the extent that providing such alternative coverage is
reasonably practical. In the event that an Employee153s Qualifying Termination is
in connection with or in contemplation of a Corporate Event, the Plan
Administrator may, in its absolute discretion, prior to the date of an
Employee153s Qualifying Termination determine, in lieu of the Medical Continuation
Payments pursuant to Section 3(c)(2) above, to pay to such Employee upon such
Qualifying Termination an amount, not subject to Mitigation, in a lump sum
within twenty (20) days following such Participant153s Qualifying Termination,
equal to the sum of the Medical Continuation Payments that otherwise would be
paid pursuant to Section 3(c)(2) above.
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(d) Continued Executive Life Insurance Coverage. In addition to the
cash severance provided in Section 3(a) or 3(b) of the Plan and the continued
medical coverage provided in Section 3(c) of the Plan, subject to Section 2(c)
above and Section 3(e) below, to the extent the Company provided executive life
insurance benefits to any Participant immediately prior to such Participant153s
Qualifying Termination, such Participant shall be entitled following a
Qualifying Termination that is a Separation from Service to continued
participation in the executive life insurance benefits provided to such
Participant immediately prior to such Participant153s Qualifying Termination. Such
benefits shall commence on the date of such Participant153s Separation from
Service and shall continue through the end of the Participant153s Severance Period
(such period of continued executive life insurance is referred to hereafter as
the “Continued Insurance Coverage Period”). As such, each year during the
Continued Insurance Coverage Period, the Company shall pay to the insurance
company or companies pursuant to which such Participant was insured while
employed in accordance with the terms of such policy or policies covering such
Participant, the annual premium or premiums due on the individual executive life
insurance policy or policies (the “Life Insurance Continuation Payments”). Such
payment or payments shall be made on the date or dates during each such year on
which such premiums are due; provided, however, if during the
Continued Insurance Coverage Period the Participant obtains Employment that
offers comparable executive life insurance benefits, the Company153s obligation to
make premium payments hereunder shall end on the date such Participant becomes
eligible for such comparable executive life insurance benefits. Each Participant
shall be responsible for payment of all applicable payroll taxes with respect to
such premiums paid by the Company. At the conclusion of the Continued Insurance
Coverage Period, a Participant may elect to continue his or her executive life
insurance benefits at his or her own expense, and, to the extent necessary or
desirable, the Company will cooperate with and assist the Participant in
transferring any applicable policy or policies to the Participant153s name and
changing the address to which statements are mailed.
In the event that an Employee153s Qualifying Termination is in connection with
or in contemplation of a Corporate Event, the Plan Administrator may, in its
absolute discretion, prior to the date of an Employee153s Qualifying Termination
determine, in lieu of the Life Insurance Continuation Payments pursuant to
Section 3(d) above, to pay to such Employee upon such Qualifying Termination an
amount, not subject to Mitigation, in a lump sum twenty (20) days following such
Participant153s Qualifying Termination, an amount equal to the sum of the Life
Insurance Continuation Payments that otherwise would be paid pursuant to Section
3(d) above.
– 9 –
(e) Discretionary Severance Option. Notwithstanding anything in this
Section 3 to the contrary, in the event any Eligible Employee becomes a
Participant pursuant to Section 2(b), the Plan Administrator, in his or its sole
discretion, may offer such Participant an alternative severance benefit in lieu
of the severance benefit set forth in Section 3(a), (b), (c) and (d) above,
unless such alternative severance benefit would be deemed a “substitute for a
payment of deferred compensation” within the meaning of Treasury Regulation
Section 409A-3(f) that otherwise violates Section 409A. In the event the Plan
Administrator offers a Participant such an alternative severance benefit
pursuant to this Section 3(e), the Participant will have a choice between the
severance benefits set forth in Section 3(a), (b), (c) and (d) and the
alternative severance benefit offered under this Section 3(e).
(f) Taxes on Severance Pay. All severance benefits pursuant to this
Section 3, including without limitation, with respect to Participants who are
“highly compensated individuals” for purposes of Section 105 of the Code, the
Medical Continuation Payments pursuant to Section 3(b) and executive life
insurance benefits pursuant to Section 3(c), are considered taxable income.
Except as otherwise provided herein, all appropriate federal, state and local
taxes will be withheld from all severance benefits.
(g) Severance Benefit Offsets. Notwithstanding anything herein to the
contrary, the amount of the severance benefit that any Participant is entitled
to receive under the Plan shall be the amount calculated in accordance with this
Section 3 of the Plan, less all amounts, if any, that such Participant is
entitled to receive as a result of the circumstances of his or her termination
under the Federal Worker Adjustment and Retraining Notification Act (Pub. L.
100-379) and other similar federal, state or local statutes. Each Participant
shall be obligated to cooperate with and respond to the Company153s requests for
documentation, at any time such Participant is subject to Mitigation, relating
to any Compensation then earned by such Participant. During the Installment
Period, each Participant shall report to the Company in writing the amount of
any Compensation earned by, owed to or promised to such Participant on account
of such Participant153s Employment, if any. Each Participant subject to Mitigation
shall submit to the Company a Mitigation Certification in the form attached
hereto as Exhibit B upon commencement of the Installment Period, every
three months thereafter and in any event, promptly upon becoming engaged in
Employment.
(h) Forfeiture of Severance Benefits. All rights of a Participant to
receive further severance benefits will be forfeited if the Plan Administrator
determines, in his or its sole discretion, after the commencement of severance
benefits hereunder to such Participant that (1) the Company had Cause to
terminate such Participant153s employment with the Company prior to actual
termination, (2) such Participant has failed to cooperate or respond to the
Company153s request for documentation relating to Compensation earned by such
Participant, as required by Section 3(g), or has falsely responded with respect
thereto or (3) following termination of employment, such Participant acts in a
manner detrimental to the best interests of the Company in any material respect.
(i) Continuation of Benefits in the Event of Death. In the event a
Participant dies after termination of employment with the Company but prior to
receipt of his or her entire severance benefit, the remaining Payments owing to
the Participant shall be paid in a lump sum to the Participant153s estate, and the
continued medical, prescription, dental and vision insurance coverage pursuant
to Section 3(b) herein shall cease.
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(j) Lump Sum and Installment Payments Deemed Separate Payments. Each
lump sum payment to a Participant pursuant to Section 3(a)(1) or 3(b) herein, or
if applicable, pursuant to Section 3(c) and/or Section 3(d) herein, shall be
deemed a separately identified amount within the meaning of Treasury Regulation
Section 1.409A-2(b)(2)(i) and by virtue of Treasury Regulation Section
1.409A-2(b)(2)(iii) shall be a separate payment hereunder (each, a “Lump Sum
Payment”). In addition, each separate biweekly installment payment provided
pursuant to Section 3(a)(2) herein and each separate payment pursuant to Section
3(c) and/or Section 3(d) herein shall be deemed a separately identified amount
within the meaning of Treasury Regulation Section 1.409A-2(b)(2)(i) and by
virtue of Treasury Regulation Section 1.409A-2(b)(2)(iii) shall be a separate
payment hereunder (each, an “Installment Payment”) (each Lump Sum Payment and
each Installment Payment, a “Payment”).
(k) Certain Payments Exempt from Section 409A.
(1) Short Term Deferral. Each Payment made to a Participant shall be
exempt from Section 409A by virtue of Treasury Regulation Section 1.409A-1(b)(4)
(the short-term deferral exemption) to the extent that, pursuant to the terms of
the applicable payment schedule hereunder for such Payment, such Payment must be
made on or prior to March 15th of the calendar year immediately following the
year in which such Participant undergoes a Qualifying Termination. The Payments
that are exempt from Section 409A pursuant to this Section 3(k)(1) shall be
referred to herein as “Exempt STD Payments.”
(2) Separation Pay Safe Harbor. Each Payment made to a Participant
shall be exempt from Section 409A by virtue of Treasury Regulation Section
1.409A-1(b)(9)(iii) (the separation pay plan exemption) to the extent that,
pursuant to the terms of the applicable payment schedule hereunder for such
Payment, such Payment (A) must be made to a Participant (x) after an Involuntary
Separation from Service, (y) following March 15th of the calendar year
immediately following the calendar year in which such Participant undergoes a
Qualifying Termination and (z) prior to the last day of the second calendar year
following the calendar year in which such Involuntary Separation from Service
occurs, and (B) is, when added together with all other Payments theretofore paid
to such Participant that satisfy the requirements of clause (A) above, no
greater than two times the lesser of (i) such Participant153s annualized
compensation based upon the annual rate of pay for services provided to the
Company for the calendar year prior to the calendar year in which such
Participant undergoes such Involuntary Separation from Service and (ii) the
maximum amount that may be taken into account under Section 401(a)(17) of the
Code with respect to a plan qualified pursuant to Section 401(a) of the Code for
the year in which such Participant undergoes such Involuntary Separation from
Service. The Payments that are exempt from Section 409A pursuant to this Section
3(k)(2) shall be referred to herein as “Exempt Safe Harbor Payments.”
(3) Exempt STD Payments and Exempt Safe Harbor Payments shall be referred to
herein collectively as “Exempt Payments,” and the Payments that are not Exempt
Payments shall be referred to herein as “409A Payments.”
– 11 –
(l) Delay of Payment for Specified Employees. Notwithstanding anything
herein to the contrary, in the event that a Participant is a “specified
employee” within the meaning of Treasury Regulation Section 1.409A-1(i) as of
the date such Participant undergoes a Separation from Service, any 409A Payment
otherwise required to be made to the Participant hereunder shall be delayed for
such period of time as may be necessary to meet the requirements of Section
409A(a)(2)(B)(i) of the Code (the “Delay Period”). On the first business day
following the expiration of the Delay Period, the Participant shall be paid, in
a single cash lump sum, an amount equal to the aggregate amount of all 409A
Payments delayed pursuant to the preceding sentence, and any remaining 409A
Payments not so delayed shall continue to be paid pursuant to the payment
schedule set forth herein.
(m) Change in Control Acceleration of Installment Payments. In the
event that a Corporate Event occurs, which Corporate Event also constitutes a
“change in control event” within the meaning of Treasury Regulation Section
1.409A-3(i)(5), following the date that any Participant has undergone a
Qualifying Termination hereunder (but only with respect to Qualifying
Terminations occurring after the Effective Date) and during the time that any
such Participant is receiving Payments hereunder in the form of Installment
Payments but before any such Participant has received the last such Installment
Payment, the Company shall pay to any such Participant in a lump sum on the date
of the consummation of such Corporate Event an amount equal to the aggregate
remaining Installment Payments, with respect to such Participant, and such
Participant shall have no further right to any further Installment Payments
hereunder.
4. Definitions. For purposes of the Plan, the
following definitions shall apply:
(a) “Affiliate” shall mean each entity, other than the Company, with whom the
Company would be considered a single employer as provided in Treasury Regulation
Section 1.409A-1(h)(3).
(b) “Base Salary” with respect to any Participant, means such Participant153s
annual base salary in effect immediately prior to such Participant153s termination
of employment with the Company.
(c) “Category I Employee” shall mean an Eligible Employee who is the Chief
Executive Officer, the President, the Chief Operating Officer, the Chief
Financial Officer or an Executive Vice President of the Company, and with
respect to severance benefits payable in the event of a Corporate Event, a
Senior Vice President of the Company.
(d) “Category II Employee” shall mean an Eligible Employee with the title of
Vice President who is not a Category I Employee.
(e) “Cause” shall have the meaning set forth in the Company153s 2005 Stock
Incentive Plan or any successor thereto. The determination of whether any
conduct, action or failure to act on the part of any Eligible Employee
constitutes Cause shall be made by the Plan Administrator in his or its sole
discretion.
– 12 –
(f) “Change in Control” shall be deemed to have occurred if: (i) any person
(as defined in Section 3(a)(9) of the Exchange Act, and as used in Sections
13(d) and 14(d) thereof, including any “group” as defined in Section 13(d)(3)
thereof (a “Person”), but excluding the Company, any Affiliate, any employee
benefit plan sponsored or maintained by the Company or any Affiliate (including
any trustee of such plan acting as trustee), and any Person who owns 20% or more
of the total number of votes that may be cast for the election of directors of
the Company (the “Voting Shares”) as of the Effective Date, becomes the
beneficial owner of 35% of the “Voting Shares”; (ii) the Company undergoes any
merger, consolidation, reorganization, recapitalization or other similar
business transaction, sale of all or substantially all of the Company153s assets
or combination of the foregoing transactions (a “Transaction”), other than a
Transaction involving only the Company and one or more Affiliates, and
immediately following such Transaction the shareholders of the Company
immediately prior to the Transaction do not continue to own at least a majority
of the voting power in the resulting entity; (iii) the persons who are the
members of the Board as of the Effective Date (the “Incumbent Directors”) shall
cease (for any reason other than death) to constitute at least a majority of
members of the Board or the board of directors of any successor to the Company,
provided that any director who was not a director as of the Effective Date shall
be deemed to be an Incumbent Director if such director was elected to the Board
by, or on the recommendation of or with the approval of, at least a majority of
the directors who then qualified as Incumbent Directors, either actually or by
prior operation of this definition; or (iv) the shareholders of the Company
approve a plan of liquidation or dissolution of the Company, or any such plan is
actually implemented.
(g) “Code” means the Internal Revenue Code of 1986, as amended from time to
time.
(h) “Compensation” means compensation income derived from rendering services,
other than Equity-Based Compensation.
(i) “Corporate Event” means (i) a Change in Control, (ii) a New SS/L Sale
Event (as defined in the Company153s 2005 Stock Incentive Plan) or an initial
public offering, spin-off, reverse spin-off, non pro rata spinoff, split-off,
dividend, distribution to stockholders or other similar transaction involving
New SS/L or any assets of New SS/L, (iii) the merger, consolidation or other
business combination of the Company, Loral Holdings Corporation (“Holdings”) or
Space Systems/Loral, Inc. (“SS/L”), or any of their subsidiaries, with another
entity, (iv) the acquisition by the Company, Holdings or SS/L, or any of their
subsidiaries of all or substantially all of the stock or assets of another
entity or (v) the closing or cessation or reduction in the scope of operations,
in whole or in part, of the Company153s corporate headquarters in New York, NY.
(j) “Employment” means the state of being an employee, consultant, sole
proprietor or director, or having any other position (including self-employment)
with or for any person or entity other than the Company or a subsidiary of the
Company, through which a Participant receives or is or becomes entitled to
receive Compensation.
(k) “Equity-Based Compensation” means equity-based compensation income
derived from rendering services, including, but not limited to, stock options,
stock appreciation rights, restricted stock, restricted stock units, phantom
stock awards and other equity-based awards, provided such Equity-Based
Compensation is granted in the ordinary course of business and not in lieu of
any salary, bonus or other compensation or for the purpose of avoiding or
circumventing Mitigation.
– 13 –
(l) “Involuntary Separation from Service” shall mean a Separation from
Service due to the independent exercise of the unilateral authority of the
Company or an Affiliate to terminate an individual153s services, other than due to
the individual153s implicit or explicit request, where the individual was willing
and able to continue performing services.
(m) “Mitigation” means the reduction, on a prospective basis, of any
installment severance benefits to which a Participant is entitled pursuant to
Section 3 herein (including a reduction to but not below $0) by an amount equal
to the Compensation then being received by such Participant or owed or promised
to such Participant from any Employment other than Employment with the Company
or an Affiliate for services rendered during the Installment Period.
(n) “Month” shall mean a period of 30 days.
(o) “Months of Service” shall mean a Participant153s completed full Months of
full-time employment with the Company measured from the most recent anniversary
of his/her date of hire by the Company. For purposes of this definition, a
Participant will receive credit for an additional full Month of Service in
excess of the number of full Months (of 30 days each) of full-time employment
with the Company to the extent he or she has at least an additional 16 days of
full-time employment with the Company.
(p) “Pay” with respect to any Participant means the sum of (x) the
Participant153s Base Salary plus (y) the average of the annual incentive
bonus compensation paid to the Participant in the twenty-four calendar months
immediately prior to such Participant153s termination of employment with the
Company.
(q) “Prior Employment” for any Participant shall mean full-time employment
with the Company prior to one or more breaks in service for such Participant.
(r) “SS/L Phantom SARs” means the phantom stock appreciation rights tied to
the performance of Space Systems/Loral, Inc. granted pursuant to a Phantom Stock
Appreciation Rights Agreement Relating to Space Systems/Loral, Inc.
(s) “Section 409A” means Section 409A of the Code.
(t) “Separation from Service” with respect to any Eligible Employee shall
mean the termination of such Eligible Employee153s employment from the Company and
all Affiliates that qualifies as a “separation from service” as provided in
Treasury Regulation Section 1.409A-1(h); provided, however, that a
Participant shall be deemed to have undergone a “termination of employment”
within the meaning of Treasury Regulation Section 1.409A-1(h)(1)(ii) with the
Company and all Affiliates when the Participant153s level of services to the
Company and all Affiliates is permanently reduced to less than 50% of the level
of services provided to the Company and all Affiliates in the immediately
preceding thirty-six (36) months.
– 14 –
(u) “Year” shall mean a period consisting of 365 consecutive days (or 366
consecutive days including February 29 of a leap year) (for example, an employee
who is hired on September 7 and remains employed until the following September 6
shall receive credit for a Year, regardless of whether such service spans
February 29 of a leap year).
(v) “Years of Service” shall mean a Participant153s completed Years of
full-time employment with the Company measured from his/her date of hire by the
Company.
5. Administrative Information.
(a) Plan Name. The full name of the Plan is the Loral Space &
Communications Inc. Severance Policy for Corporate Officers.
(b) Plan153s Sponsor. The Plan is sponsored by Loral Space &
Communications Inc., 600 Third Avenue, New York, NY 10016, (212) 697-1105.
(c) Employer Identification Number. The employer identification number
(EIN) assigned to the Plan Sponsor by the Internal Revenue Service is
87-0748324.
(d) Type of Plan and Funding. The Plan is a severance plan for the
benefit of employees of the Company who are members of a select group of
management or highly compensated employees. The benefits provided under the Plan
are paid from the Company153s general assets. No fund has been established for the
payment of Plan benefits. No contributions are required under the Plan.
(e) Plan Administrator.
(1) The Plan shall be administered by the CEO, provided, that, with
respect to the CEO, the Plan shall be administered by Compensation Committee
(the “Compensation Committee”) of the Board of Directors of the Company (the
“Board”), and as such the term “Plan Administrator” shall refer to the CEO or
the Compensation Committee, as applicable; provided, however,
that, following a Change in Control, the terms CEO and Compensation Committee as
used in this Section 5(e)(1) shall mean the CEO or Compensation Committee, as
applicable, immediately prior to such Change in Control.
(2) The Plan Administrator has full responsibility for the operation of the
Plan. No supervisor or other officers of the Company are authorized to interpret
provisions of the Plan or make representations that are contrary to the
provisions of the Plan document as interpreted by the Plan Administrator. All
correspondence and requests for information should be directed as follows: Loral
Space & Communications Inc., Plan Administrator, Loral Space &
Communications Inc. Severance Policy for Corporate Officers, 600 Third Avenue,
New York, NY 10016, (212) 697-1105.
– 15 –
(3) Subject to the express provisions of this Plan, the Plan Administrator
shall have sole authority to interpret the Plan (including any vague or
ambiguous provisions) and to make all other determinations deemed necessary or
advisable for the administration of the Plan; provided, however
that the Plan Administrator shall have absolute discretion to determine whether,
and the extent to which, a Participant153s Prior Employment shall be considered in
determining such Participant153s Years of Service or Months of Service, and such
determination may be different for different Participants under similar or
different circumstances. All determinations and interpretations of the Plan
Administrator shall be final, binding, and conclusive as to all persons.
(f) Agent for Service of Process. Should it ever be necessary, legal
process may be served on the Plan Administrator at: Loral Space &
Communications Inc., 600 Third Avenue, New York, NY 10016, Attn: General
Counsel.
(g) Type of Administration. The Plan is administered by Loral Space
& Communications Inc.
(h) Plan Year. January 1 : December 31.
6. Plan Amendment or Termination. The Company
reserves the right, in its sole and absolute discretion to amend or terminate,
in whole or in part, any or all of the provisions of the Plan, including an
amendment that reduces or eliminates the benefits hereunder, by action of the
Board (or a duly authorized committee thereof) at any time; provided,
however, that, following a Change in Control, no termination or amendment
of the Plan that negatively affects the rights or benefits of any Eligible
Employee or Participant hereunder shall be effective as to such Eligible
Employee or Participant and no Eligible Employee may be disqualified, in either
case, without such Eligible Employee153s or Participant153s consent thereto; and
further provided, however, that no termination or amendment
of the Plan that negatively affects the rights or benefits of any Participant
hereunder shall be effective as to such Participant who has undergone a
Qualifying Termination prior to the date of the amendment or termination of the
Plan without such Participant153s consent thereto.
7. Other Important Plan Information.
(a) Employment Rights Not Implied. Participation in the Plan does not
give any Eligible Employee the right to be retained in the employ of the
Company, nor does it guarantee any right to claim any benefit except as outlined
in the Plan.
(b) Governing Law. This Plan shall be construed and interpreted in
accordance with the Employee Retirement Income Security Act of 1974 (“ERISA”),
to the extent applicable, and the laws of the State of New York, without regard
to the principles of conflicts of law thereof.
(c) No Liability. No director, officer, agent or employee of the
Company shall be personally liable in the event the Company is unable to make
any payments under the Plan due to a lack of, or inability to access, funding or
financing, legal prohibition (including statutory or judicial limitations) or
failure to obtain any required consent. In addition, neither the Plan
Administrator, the Company, any Affiliate of the Company nor any director,
officer, agent or employee of the Company or any Affiliate shall be personally
liable by reason of any action taken with respect to the Plan for any mistake of
judgment made in good faith, and the Company shall indemnify and hold harmless
each director, officer, agent and employee of the Company, including the Plan
Administrator, to whom any duty or power relating to the administration or
interpretation of the Plan may be allocated or delegated, against any reasonable
cost or expense (including counsel fees) or liability (including any sum paid in
settlement of a claim with the approval of the Board) arising out of any act or
omission to act in connection with the Plan unless arising out of such person153s
own fraud, bad faith or gross negligence.
– 16 –
(d) Section 409A Compliance. All Payments and benefits hereunder are
intended to comply with or be exempt from the provisions of Section 409A. To the
extent that there are any ambiguities in this document, they shall be
interpreted and administered consistent with such intent. Notwithstanding the
immediately prior sentence, (i) if any term or provision of this Plan intended
to cause a Payment or benefit hereunder to be compliant with Section 409A is
found to cause such Payment or benefit to be noncompliant therewith or (ii) if
any term or provision of this Plan intended to cause a Payment or benefit
hereunder to be exempt from Section 409A is found to cause such Payment or
benefit to be subject thereto, in each case, in any jurisdiction, such provision
shall be struck as void ab initio, and a compliant or exempt term or
provision, as applicable, shall be deemed substituted for such noncompliant or
nonexempt provision, as applicable, that preserves, to the maximum lawful
extent, the intent of the Plan, and any court or arbitrator so holding shall
have authority and shall be instructed to substitute such compliant or exempt
provision; provided, however, that if any such noncompliance or
nonexemption, as applicable, is due to a deficiency of one or more terms or
provisions, such appropriate terms or provisions shall be deemed to be added to
cure such noncompliance or nonexemption, as applicable, that preserves, to the
maximum lawful extent, the intent of the Plan, and any such court or arbitrator
shall have authority and shall be instructed to supplement the Plan with such
compliant or exempt terms or provisions, as applicable. If, due to the payment
schedule herein with respect to any amount payable pursuant hereto, the payment
of or entitlement to such amount would cause a Participant to incur any
additional tax or interest under Section 409A, the Company may, after consulting
with such Participant, reform such applicable payment schedule, with respect to
such Participant only, to the extent necessary to comply with Section 409A, but
only if, after consultation, such payment schedule can be reformed to so comply;
provided, however, that in no event shall the Company be obligated
to reform any payment schedule herein in a manner that would result in an
increased cost to the Company, and any such reformation shall preserve, to the
maximum extent practicable, the economic benefit to such Participant of the
applicable amount without violating the provisions of Section 409A. Nothing
herein, and no act taken or not taken by the Company in consultation with a
Participant is intended to guarantee compliance with Section 409A. Neither the
Plan Administrator, the Company, any Affiliate of the Company nor any employee,
officer or director of the Company or any Affiliate shall be liable to any
Participant for any additional taxes or other penalties incurred or suffered by
such Participant due to the Plan153s failure to comply with Section 409A.
8. Claims Appeal Procedure.
The following information is intended to comply with the requirements of
ERISA and provides the procedures an Eligible Employee may follow if he or she
disagrees with any decision about eligibility for Plan payments. The
determination by the Plan Administrator as to whether any person is an Eligible
Employee is final and binding and is not subject to review.
(a) An Eligible Employee will be informed as to whether or not he/she will be
a Participant under the Plan, and thereby entitled to benefits under the Plan,
on or before the last day worked. Eligible Employees who believe they are
entitled to benefits under the Plan and do not receive notice of their status as
a Participant, or who have questions about the amounts they receive, must write
to the Plan Administrator within thirty (30) days of the date of their
respective termination.
– 17 –
(b) If the Plan Administrator denies an Eligible Employee153s claim for
benefits under the Plan, the Eligible Employee will be sent a letter within
ninety (90) days (in special cases, more than 90 days may be needed and he or
she will be notified if this is the case) explaining:
(1) the specific reason or reasons for the denial;
(2) the specific provisions on which the denial is based;
(3) any additional material or information necessary for the Participant to
perfect the claim and an explanation of why such material or information is
necessary; and
(4) an explanation of the Plan153s claim review procedure.
(c) If payment is denied or the Eligible Employee disagrees with the amount
of the payment, he or she may file a written request for review within sixty
(60) days after receipt of such denial. This request should be filed with the
Plan Administrator. The letter which constitutes the filing of an appeal should
ask for a review and include the reasons why the Eligible Employee believes the
claim was improperly denied, as well as any other appropriate data, questions or
comments. In addition, an Eligible Employee is entitled to:
(1) review documents pertinent to his or her claim at such reasonable time
and location as shall be mutually agreeable to the Eligible Employee and the
Plan Administrator; and
(2) submit issues and comments in writing to the Plan Administrator relating
to his or its review of the claim.
(d) A final decision will normally be reached within sixty (60) days, unless
special circumstances require an extension of time for processing, in which case
a decision will be rendered as soon as possible. The Eligible Employee will
receive a written notice of the decision on the appeal, indicating the specific
reasons for the decision as well as specific references to the Plan provisions
on which the decision is based.
9. The Plan Supersedes All Prior Severance
Arrangements. Except as expressly provided in a written employment
or other agreement or written offer letter between the Company and an
individual, the Plan and the Loral Space & Communications Inc. Severance
Policy for Corporate Office Employees (the “Severance Policies”) represent the
only policies, plans, arrangements and practices providing severance benefits
upon termination of employment, and the Severance Policies supersede all prior
written or oral policies, plans, arrangements and practices providing severance
benefits upon termination of employment.
– 18 –
Exhibit A
[Form of General Release]
1. Opportunity for Review and Revocation. You have twenty-one (21)
days to review and consider this release (this “Release”). Notwithstanding
anything contained herein to the contrary, this Release will not become
effective or enforceable for a period of seven (7) calendar days following the
date of its execution, during which time you may revoke your acceptance of this
Release by notifying Avi Katz, in writing. To be effective, such revocation must
be received by the Company no later than 5:00 p.m. local time on the seventh
calendar day following its execution. Provided that the Release is executed and
you do not revoke it, the eighth (8th) day following the date on which this
Release is executed shall be its effective date (the “Effective Date”). In the
event of your revocation of this Release pursuant to this Section 1, this
Release will be null and void and of no effect, and the Company will have no
further obligations to you hereunder or, except where explicitly provided
otherwise therein, under the Plan.
2. Waiver and Release of Claims.
(a) As used in this Release, the term “claims” will include all claims,
covenants, warranties, promises, undertakings, actions, suits, causes of action,
obligations, debts, accounts, attorneys153 fees, judgments, losses and
liabilities, of whatsoever kind or nature, in law, equity or otherwise.
(b) You hereby waive and release any and all claims and potential claims,
known and unknown, you have against the Company, parent companies, related
corporations, subsidiaries or affiliates, or their officers, directors,
employees or agents, relating to or arising out of, your employment with the
Company and the termination of your employment, including, without limitation,
claims as to tax consequences to you of any payments made to you by the Company.
This Release applies to all claims relating to your employment, including, but
not limited to, claims arising under the New York State Executive Law or the New
York City Civil Rights Law, any statutory, contract or tort claims and any
claims arising under Title VII of the Civil Rights Act, the Americans with
Disabilities Act, the Age Discrimination in Employment Act of 1967, the Older
Workers Benefit Protection Act of 1990 or the Fair Labor Standards Act. This
Release does not apply to any claims not covered herein that arise after the
date this release is executed by you and delivered to the Company, nor does this
waiver and release limit your ability to enforce the terms of this Release.
(c) You acknowledge and agree that as of the Effective Date, you have no
knowledge of any facts or circumstances that give rise or could give rise to any
claims under any of the laws listed in the preceding paragraph.
(d) You specifically release all claims relating to your employment and its
termination under ADEA, a United States federal statute that, among other
things, prohibits discrimination on the basis of age in employment and employee
benefit plans.
(e) Notwithstanding any provision of this Release to the contrary, by
executing this Release, you are not releasing any claims relating to any
indemnification rights you may have as a former officer or director of the
Company or its subsidiaries in accordance with the Company153s or such
subsidiary153s bylaws, as the case may be.
Exhibit A : Page 1
3. Knowing and Voluntary Waiver. You expressly acknowledge and agree
that you:
(a) Are able to read the language, and understand the meaning and effect, of
this Release;
(b) Have no physical or mental impairment of any kind that has interfered
with your ability to read and understand the meaning of this Release or its
terms, and that your not acting under the influence of any medication, drug or
chemical of any type in entering into this Release;
(c) Are specifically agreeing to the terms of the release contained in this
Release because the Company has agreed to pay you the amounts set forth in the
Plan. The Company has agreed to provide such amounts because of your agreement,
among others, to accept it in full settlement of all possible claims you might
have or ever had, and because of your execution of this Release;
(d) Understand that, by entering into this Release, you do not waive rights
or claims under ADEA that may arise after the Effective Date;
(e) Had or could have had twenty-one (21) calendar days in which to review
and consider this Release;
(f) Were advised to consult with your attorney regarding the terms and effect
of this Release and
(g) Have signed this Release knowingly and voluntarily.
4. No Suit. You represent that you have not filed or permitted to be
filed against the Company or any related companies, individually or
collectively, any complaints or lawsuits arising out of your employment, or any
other matter arising on or prior to the date hereof.
5. Successors and Assigns. The provisions hereof shall enure to the
benefit of your heirs, executors, administrators, legal personal representatives
and assigns and shall be binding upon your heirs, executors, administrators,
legal personal representatives and assigns.
6. Severability. If any provision of this Release shall be held by any
court of competent jurisdiction to be illegal, void or unenforceable, such
provision shall be of no force and effect. The illegality or unenforceability of
such provision, however, shall have no effect upon and shall not impair the
enforceability of any other provision of this Release.
7. Non-Disparagement. You agree to refrain from making any
disparaging, negative or uncomplimentary statements regarding the Company, any
related companies and/or any officers, employees or other service providers of
the Company or related companies.
Exhibit A : Page 2
8. Non-Disclosure. You shall not disclose the nature or terms of this
Release or the negotiations that led to this Release to any person or entity,
other than your spouse, tax advisors and legal counsel, without the written
consent of the Company, unless required to do so by law.
9. Non-Admission. Nothing contained in this Release will be deemed or
construed as an admission of wrongdoing or liability on the part of you or the
Company.
10. Entire Agreement. This Release and the Plan together constitute
the entire understanding and agreement of the parties hereto regarding the
termination of your employment. This Release and the Plan supersede all prior
negotiations, discussions, correspondence, communications, understandings and
agreements between the parties relating to the subject matter of this Release.
11. Governing Law. EXCEPT WHERE PREEMPTED BY FEDERAL LAW, THIS RELEASE
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH FEDERAL LAW AND THE LAWS
OF THE STATE OF NEW YORK, APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN
THAT STATE. ANY DISPUTE OR CLAIM ARISING OUT OF OR RELATING TO THIS RELEASE
SHALL BE BROUGHT EXCLUSIVELY IN THE FEDERAL COURT IN THE STATE OF NEW YORK. BY
EXECUTION OF THE RELEASE, THE PARTIES HERETO, AND THEIR RESPECTIVE AFFILIATES,
CONSENT TO THE EXCLUSIVE JURISDICTION OF SUCH COURT, AND WAIVE ANY RIGHT TO
CHALLENGE JURISDICTION OR VENUE IN SUCH COURT WITH REGARD TO ANY SUIT, ACTION OR
PROCEEDING UNDER OR IN CONNECTION WITH THE RELEASE. EACH PARTY TO THIS RELEASE
ALSO HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY IN CONNECTION WITH ANY SUIT,
ACTION, OR PROCEEDING UNDER OR IN CONNECTION WITH THIS RELEASE.
Exhibit A : Page 3
Exhibit B
[Form of Mitigation Certification]
In accordance with the Loral Space & Communications Inc. (“Loral”)
Severance Policy for Corporate Officers and a General Release and Termination
Agreement effective (the “Severance Arrangement”), I am entitled to receive or
am currently receiving severance payments that are subject to mitigation.
Pursuant to the Severance Arrangement, at the inception of the period during
which I am entitled to receive severance payments in a series of installments
and every three months thereafter during such installment payment period (the
“Mitigation Period”), I am required to certify my employment status. Pursuant to
these requirements, I hereby certify that, as of :
o I am not currently engaged in Employment (as defined in the Severance
Arrangement), nor do I have any definitive expectations for Employment prior to
my next certification.
o I am currently engaged in Employment.
My current annual salary or compensation is $ ($ /biweekly) and
my target bonus or incentive compensation for the current year is $ . The
following is a list of all other compensation that I am entitled to in
connection with my current Employment, including any amount received as a
signing bonus and any amount of compensation promised or owed to me but not yet
paid to me:
I understand that any or all of the installments severance payments due to me
pursuant to the Severance Arrangements are subject to reduction on a
dollar-for-dollar basis based on the compensation that I am entitled to receive
in connection with my current Employment.
Exhibit B : Page 1
o Although I am not currently engaged in Employment as of the above date, I
do expect to be employed as of , which is prior to my next mitigation
certification.
My expected annual salary or compensation will be $ ($
/biweekly) and my target bonus or incentive compensation for the first year
of Employment will be $ . The following is a list of all other
compensation that I expect to be entitled to in connection with such Employment,
including any amount to be received as a signing bonus and any amount of
compensation promised or owed to me but that will not be paid to me immediately:
I understand that any or all of the installment severance payments due to me
pursuant to the Severance Arrangements are subject to reduction on a
dollar-for-dollar basis based on the compensation that I am entitled to receive
in connection with such Employment.
Lastly, I understand if my Employment status changes at any time during the
Mitigation Period, I am required to and will immediately notify Loral of such
change.
Signature:
Date:
Exhibit B : Page 2
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