Attached files
| file | filename |
|---|---|
| 8-K - DIRECTV 8-K - MIKE WHITE EMPLOYMENT AGREEMENT - DIRECTV | directv8k_01042010.htm |
| EX-10.2 - MIKE WHITE NON-QUALIFIED STOCK OPTION AGREEMENT - DIRECTV | exhibit_10-2.htm |
| EX-10.3 - MIKE WHITE PERFORMANCE STOCK UNIT AWARD AGREEMENT - DIRECTV | exhibit_10-3.htm |
Exhibit
10.1
EXECUTION
COPY
EMPLOYMENT
AGREEMENT
This
EMPLOYMENT AGREEMENT
(the “Agreement”), is
entered into effective as of January 1, 2010 (“Effective Date”), by
and between DIRECTV, a Delaware corporation (the “Company”), and
Michael D. White (“Executive”).
WHEREAS, the Company and the
Executive desire to enter into this Agreement, which sets forth the terms and
conditions under which the Company will employ Executive to render services to
the Company and its affiliates; and
WHEREAS, the material terms
and conditions of Executive’s employment, as set forth in this Agreement, have
been approved by the Compensation Committee (the “Compensation
Committee”) of the Board of Directors of the Company (the “Board”).
NOW, THEREFORE, in
consideration of the promises and mutual agreements hereinafter contained, the
parties agree as follows:
1. Employment, Duties and
Acceptance
1.1 Employment by the
Company. The Company agrees to employ Executive to render
exclusive and full-time services to the Company and its subsidiaries for the
Term of Employment (as hereinafter defined), subject to the terms of this
Agreement. During the Term of Employment, Executive shall serve as,
and his title shall be, President and Chief Executive Officer of the Company
(“Position”). In
such capacity, the Executive shall have all powers, duties and responsibilities
that are customary for a president and chief executive officer of a company of a
similar size, type and nature to the Company, including the power and authority
to supervise and determine the business, affairs and operations of the Company
and its subsidiaries, and to appoint, supervise, and remove subordinate officers
of the Company and its subsidiaries. During the Term of Employment,
Executive shall have such additional duties, but only to the extent consistent
with such position, as may be assigned to him from time to time by the
Board. In such capacity, Executive shall report exclusively to the
Board. In addition, during the Term of Employment, Executive shall be
designated a director of the Company and of each material subsidiary of the
Company, and shall serve in such capacity or capacities without additional
compensation.
1.2 Acceptance of Employment by
Executive. Executive accepts such employment and agrees to
devote his full time and attention as necessary to fulfill all of the duties of
his employment hereunder and shall render the services described
above. Without the prior written consent of the Company, Executive
agrees that he will not, directly or indirectly, engage in any other business
activities or pursuits so long as he is performing services for the Company,
whether on his own behalf or on behalf of any other person, firm or corporation,
except for making passive investments in accordance with Section 5
hereof. Notwithstanding the foregoing, Executive may continue to
serve as a director of Whirlpool Corporation and as a director of such other
companies as shall be approved by the Nominating and Corporate Governance
Committee or the Board.
1.3 Place of
Employment. Executive’s principal office location shall be at
the Company’s offices in New York, New York, subject to such travel as the
rendering of the services hereunder may require, and shall include working
at the Company’s offices in El Segundo, California; provided, that if requested
by the Board, Executive’s principal office shall be at the Company’s office in
El Segundo, California.
1.4 Term of
Employment. The term of employment under this Agreement shall
be the period commencing on the Effective Date and ending on the 3rd (third)
anniversary of the Effective Date (the “End Date”) or such
earlier date on which Executive’s employment terminates in accordance with
Section 4 of this Agreement (the term of this Agreement, the “Term of
Employment”). Notwithstanding the foregoing, if a
Transformation Event (as defined on Exhibit A hereto) occurs during the
final 14 months of the Term of Employment, the Term of Employment will then be
extended until 14 months after such Transformation Event.
2. Compensation and
Benefits.
2.1 Compensation. As
compensation for all services to be rendered pursuant to this Agreement, the
Company shall pay Executive as follows:
2.2 Base
Salary. Executive shall be paid, on regular pay dates as now
in effect or shall then be in effect under Company policy, at the rate of
$1,500,000 per annum (“Base Salary”)
beginning on January 1, 2010, subject to increase effective as of each
succeeding January 1 during the Term of Employment, based on the increase,
if any, in the Consumer Price Index for all Urban Consumers for the New York
City area (or any successor Consumer Price Index) based on data published by the
Bureau of Labor Statistics of the United States Department of Labor for the
preceding year.
2.3 Annual
Bonus. For each fiscal year ending during the Term of
Employment, commencing with the fiscal year ending December 31, 2010,
Executive shall be eligible to receive an annual cash bonus (the “Bonus”), based on the
achievement of certain targets related to the performance of the Company and its
subsidiaries (collectively, “DIRECTV”), pursuant
to a cash bonus plan (the “Cash Plan”) for
executive officers of the Company established with the approval of the
Compensation Committee. If Executive achieves the target in any such
fiscal year, Executive’s annual bonus for such fiscal year shall be 200% of his
Base Salary (the “Target Bonus”),
subject to increase or decrease based on annual performance, as determined by
the Compensation Committee, provided that the maximum Bonus payable to the
Executive for any fiscal year shall not exceed the amount permitted under the
Plan based upon objective criteria set by the Compensation Committee with
respect to such fiscal year during the first 90 days of such fiscal
year.
2.4 Equity
Awards. Effective at the close of business on January 4,
2010 (the “Grant
Date”), Executive shall be granted equity awards under The DIRECTV Group,
Inc. Amended and Restated 2004 Stock Plan (the “Plan”) having an
aggregate value on the Grant Date approximately equal to $25 million (determined
as described below), consisting of (a) an award of performance restricted
stock units for the Company’s Class A common stock (the “RSU Award”) and
(b) an award of options for Company Class A common stock (the “Stock Option Award”),
each as described below:
(a) RSU
Award: The RSU Award shall be evidenced by the Performance
Stock Unit Award Agreement substantially in the form approved by the
Compensation Committee (the “Award Agreement”)
which shall provide for the issuance of a target number of restricted Stock
Units equal to the amount determined by dividing $12.5 million by the average
closing market price on the NASDAQ Global Select Market for Company (or its
predecessor, The DIRECTV Group, Inc.) common stock for the 90 trading days prior
to (but excluding) the Grant Date, and rounding up to the nearest hundred (100)
units. The performance metrics for the three year performance period
under such Award Agreement shall be established by the Compensation Committee no
later than March 1, 2010, shall be the same performance metrics as are
established for RSU Awards issued to other executive officers of the Company by
the Compensation Committee at its February 2010 meeting and shall provide
for a payout range of 0% to 125% of the target number of the RSUs, based on
actual results.
(b) Stock Option
Award: The Stock Option Award shall be evidenced by the
Non-Qualified Stock Option Agreement substantially in the form approved by the
Compensation Committee (the “Option Agreement”)
which shall provide for non-qualified options to purchase, at an exercise price
equal to the fair market value (the closing market price on the NASDAQ Global
Select Market) of a share of Company Class A common stock on the Grant Date,
such number of shares of Company Class A common stock as have a Black-Scholes
value of $12.5 million at the Grant Date, using the same valuation methodology
as used by the Company in its audited financial statements, rounded up to the
nearest hundred (100) shares.
3. Employee Benefit Plans;
Perquisites.
3.1 Participation in Employee
Benefit Plans. During the Term of Employment, Executive shall
be entitled to participate in all benefit plans or arrangements presently in
effect or hereafter adopted by the Company applicable to executive officers of
the Company, including, but not limited to, any pension, group medical, dental,
disability and life insurance, or other similar benefit plans.
3.2 Perquisites. During
the Term of Employment, the Executive shall be authorized to use the corporate
jet maintained by the Company (if the Company continues to maintain such
corporate jet or otherwise makes the use of a corporate jet available) under the
terms and conditions as described in the Company policy that provides for such
use and otherwise the Company shall pay, or reimburse Executive, for first-class
air travel for Executive.
3.3 Business
Expenses. During the Term of Employment, the Company shall
pay, or reimburse the Executive for, all expenses reasonably incurred by him in
connection with his performance of his duties hereunder.
4. Termination of
Employment
4.1 Termination Due to Death or
Disability
(a) The Term
of Employment and Executive’s employment hereunder shall terminate upon
Executive’s death and may be terminated by the Company if Executive suffers
a Disability (as defined on Exhibit A hereto).
(b) Upon
termination of Executive’s employment hereunder for either Disability or death,
Executive or Executive’s estate or beneficiaries (as the case may be) shall
be entitled to receive:
(i) an amount
equal to Executive’s Base Salary through the last day of the Term of Employment
(determined as if such death or Disability did not occur), payable in a lump sum
cash payment to the extent permitted under Section 409A of the Internal
Revenue Code of 1986, as amended (the “Code”), and, to the
extent not so permitted, in substantially equal installments, at such times and
in such manner as is in accordance with the Company’s regular payroll
practices;
(ii) payment
of the pro-rated portion of the Target Bonus for the year in which such
termination on account of death or Disability occurs, payable promptly, but in
no event later than March 15 following the last day of the fiscal year in
which Executive’s termination on account of death or Disability
occurred;
(iii) acceleration,
vesting and immediate issuance of 100% of the shares of Company stock associated
with the RSU Award, at “target”, as provided in the Award
Agreement;
(iv) immediate
acceleration and vesting of the Stock Option Award, with the options to remain
exercisable throughout the period ending on the Expiration Date, as
provided in the Option Agreement;
(c) in the
case of Disability, continuation of executive medical benefits until the End
Date; and
(i) such
other or additional benefits to which Executive may be entitled in
accordance with applicable employee benefit plans of the Company.
Following
such termination of Executive’s employment due to death or Disability, except as
set forth in this Section 4.1(b), Executive shall have no further rights to
any compensation or any other benefits under this Agreement.
4.2 Termination by the Company
for Cause or by Executive Resignation without Effective
Termination
(a) For the
purposes of this Agreement, “Cause” and “Effective Termination” shall be as
defined on Exhibit A hereto.
(b) The Term
of Employment and Executive’s employment hereunder may be terminated by the
Company for Cause and shall terminate automatically upon Executive’s resignation
without Effective Termination; provided that Executive will
be required to give the Company at least 60 days advance written notice of a
resignation without Effective Termination, unless otherwise approved by the
Board. In the event the Company terminates Executive’s employment for
Cause or if Executive resigns without Effective Termination, Executive shall be
entitled to receive only:
(i) Base
Salary through the date of termination;
(ii) pay for
any accrued, but unused vacation; and
(iii) such
other or additional benefits to which Executive may be entitled in
accordance with applicable law.
Following
such termination of Executive’s employment by the Company for Cause or
resignation by Executive without Effective Termination, except as set forth in
this Section 4.2(b), Executive shall have no further rights to any
compensation or any other benefits under this Agreement.
4.3 Termination by the Company
without Cause or Resignation by the Executive for Effective
Termination.
(a) The Term
of Employment and Executive’s employment hereunder may be terminated by the
Company without Cause or by Executive’s resignation for Effective
Termination.
(b) If
Executive’s employment is terminated by the Company without Cause (other than by
reason of death or Disability) or if Executive resigns for Effective
Termination, in either event during the Term, then subject to Executive’s
execution, delivery and non-revocation of a release of claims against the
Company and its affiliates, on a form reasonably satisfactory to the Company
(but which shall not require a release of claims for indemnification or coverage
under directors and officers liability insurance or of vested benefits),
Executive shall be entitled to receive, in full discharge of all of the
Company’s obligations to Executive:
(i) an amount
equal to 4.5 times Base Salary, payable in substantially equal installments over
18 months (the “Severance Period”), at such times and in such manner as is in
accordance with the Company’s regular payroll practices;
(ii) vesting
of 100% of the RSU Award at target performance level;
(iii) acceleration
of the vesting of the Stock Option Award by 18 months, with options to vest on a
pro-rata schedule (actual service plus 18 months will be divided by 36
months to compute the pro-rating) with the options to remain exercisable
throughout the period ending on the Expiration Date, as provided in the Option
Agreement;
(iv) continuation
of executive medical and other welfare benefits during the Severance Period;
and
(c) such
other or additional benefits to which Executive may be entitled in
accordance with applicable employee benefit plans of the Company.
Following
such termination of Executive’s employment by the Company without Cause (other
than for death or Disability) or resignation by Executive for Effective
Termination, except as set forth in this Section 4.3(b), Executive shall
have no further rights to any compensation or any other benefits under this
Agreement.
4.4 Continued Employment Beyond
Expiration of the Term of Employment. Unless the parties
otherwise agree in writing, continuation of Executive’s employment with the
Company beyond the expiration of the Term of Employment shall be deemed an
employment at-will and, except as provided below, shall not be deemed to extend
any of the terms of this Agreement and Executive’s employment
may thereafter be terminated by either Executive or the
Company.
(a) Executive’s
Position pursuant to Section 1.1 hereof shall apply following the
expiration of the Term of Employment during which Executive is an at-will
employee (the “Post
Term Period”), as shall Sections 1.3, 2.2, 2.3, 3.1, 3.3, 4.1, 4.2,
4.9 and 5 hereof.
(b) If,
during the Post Term Period, Executive resigns other than due to an Effective
Termination, Executive’s vested options will be exercisable for the shorter of
(i) 3 years or (ii) the end of the option term.
(c) If,
during the Post Term Period, Executive’s employment is terminated by the Company
without Cause (other than for death or Disability) or Executive resigns due to
an Effective Termination, then no later than sixty (60) days after the
separation from service date (and expiration of the revocation period), provided
that Executive has executed and delivered a release of claims against the
Company and its affiliates, on a form reasonably satisfactory to the Company
(but which shall not require a release of claims for indemnification or coverage
under directors and officers liability insurance or of vested benefits),
Executive shall be entitled to receive, in full discharge of all of the
Company’s obligations to Executive:
(i) severance
in accordance with the senior executive severance policy as then in
effect;
(ii) the
remainder of the option term to exercise all vested options; and
(iii) such
other or additional benefits to which Executive may be entitled in
accordance with applicable employee benefit plans of the Company.
Following
such termination of Executive’s at-will employment by the Company following the
expiration of the Term of Employment, except as set forth in this
Section 4.4, Executive shall have no further rights to any compensation or
any other benefits under this Agreement.
4.5 Calculation of
Bonus. For purposes of Section 4.1(b)(ii) above, the
pro-rated portion of the annual bonus referenced in such section shall be
determined by multiplying such annual bonus by a fraction, the numerator of
which shall be the number of days during such fiscal year that Executive was
employed and the denominator of which shall be 365.
4.6 No
Mitigation. If Executive’s employment hereunder is terminated,
the Company’s payment obligations shall be absolute and unconditional, Executive
shall not be obligated to mitigate his damages, and there shall be no offset
against any amounts due Executive under this Agreement on account of any
remuneration attributable to any subsequent employment that Executive
may obtain.
4.7 Notice of
Termination. Any purported termination of employment by the
Company or by Executive (other than due to Executive’s death) shall be
communicated by written Notice of Termination to the other party hereto in
accordance with Section 7.1 hereof. For purposes of this
Agreement, a “Notice of Termination” shall mean a notice which shall indicate
the specific termination provision in this Agreement relied upon and shall set
forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination of employment under the provision so
indicated.
4.8 Board/Committee
Resignation. Upon termination of Executive’s employment for
any reason, Executive agrees to resign, as of the date of such termination and
to the extent applicable, from the Board (and any committees thereof) and the
Board of Directors (and any committees thereof) of any of the Company’s
subsidiaries or affiliates.
4.9 No Excise Tax Gross-Up;
Possible Reduction of Payments. Any provision of this Agreement or any
other compensation plan, program or agreement to which Executive is a party or
under which Executive is covered to the contrary notwithstanding, Executive will
not be entitled to any gross-up or other payment for golden parachute
excise taxes Executive may owe pursuant to Section 4999 of the Internal Revenue
Code. In the event that any severance or other benefits otherwise
payable to Executive (i) constitute “parachute payments” within the meaning of
Section 280G of the Code, and (ii) but for this Section 4.9 would be subject to
the excise tax imposed by Section 4999 of the Code, then such benefits hereunder
and under such other plans, programs and agreements shall be either (x)
delivered in full, or (y) delivered as to such lesser extent which would result
in no portion of such benefits being subject to excise tax under Section 4999 of
the Code, whichever of the foregoing amounts, taking into account the applicable
federal, state and local income and employment taxes and the excise tax imposed
by Section 4999 of the Code (and any equivalent state or local excise taxes),
results in the receipt by Executive on an after-tax basis, of the greatest
amount of benefits, notwithstanding that all or some portion of such benefits
may be taxable under Section 4999 of the Code. Unless the Company and
Executive otherwise agree in writing, any determination required under this
Section 4.9 will be made in writing by independent public accountants as the
Company and Executive agree (the “Accountants”), whose determination will be
conclusive and binding upon Executive and the Company for all
purposes. For purposes of making the calculations required by this
Section 4.9, the Accountants may make reasonable assumptions and approximations
concerning applicable taxes and may rely on reasonable, good faith
interpretations concerning the application of Sections 280G and 4999 of the
Code. The Company and Executive agree to furnish to the Accountants
such information and documents as the Accountants may reasonably request in
order to make a determination under this provision. The Company will
bear all costs the Accountants may reasonably incur in connection with any
calculations contemplated by this provision. Any reduction in
payments and/or benefits required by this provision shall occur in the following
order: (1) reduction of cash payments, beginning with payments scheduled to
occur soonest; (2) reduction of vesting acceleration of equity awards (in
reverse order of the date of the grant); and (3) reduction of other benefits
paid or provided to Executive.
5. Certain Covenants of
Executive
5.1 Covenants Against
Competition. Executive acknowledges that the services to be
furnished by Executive hereunder and the rights and privileges granted to the
Company by Executive are of a special, unique, unusual, extraordinary and
intellectual character which give them a peculiar value, the loss of which
cannot be reasonably or adequately compensated in damages in any action at law,
and a breach or threatened breach by Executive of any of the provisions
contained in this Section 5 will cause the Company irreparable injury and
damage.
5.2 Non-Compete. Executive
agrees that, while employed by the Company and for a period of two years
thereafter, he will not, in any manner directly or indirectly, own, manage,
operate, join, control or participate in the ownership, management, operation or
control of, or be employed by, or connected in any manner with, in any capacity
(including, without limitation, as an employee, consultant, officer, director,
partner, advisor or joint venturer), or provide services to or on behalf of, any
corporation, firm or business, or any affiliate of any corporation, firm or
business, that directly or indirectly engages in any business which competes
with the Company or any of its affiliates in the multi-channel video programming
distribution business in the United States or in Latin America (whether
satellite, cable, telephone or other method of distribution). The
foregoing does not prohibit Executive’s ownership of less than five percent (5%)
of the outstanding common stock of any company whose shares are publicly traded
on a national stock exchange, are reported on NASDAQ, or are regularly traded in
the over-the-counter market by a member of a national securities
exchange.
5.3 Code of Ethics and Business
Conduct. Executive agrees to abide by the provisions of the
Company’s Code of Ethics and Business Conduct (receipt of which is hereby
acknowledged) at all times during his employment with the Company.
5.4 Non-Solicitation. Executive
shall not, while employed by the Company and for two years thereafter, directly
or indirectly (i) induce, solicit or attempt to induce or solicit any
executive, professional or administrative employee of the Company or any of its
affiliates, to leave the Company or its affiliates or to render services for any
other person, firm or corporation or (ii) induce or attempt to induce any
key programming or equipment supplier, or key distributor, to terminate or
materially adversely change its relationship with the Company or any of its
affiliates.
5.5 Property of the
Company. Executive acknowledges that the relationship between
the parties hereto is exclusively that of employer and employee, and that the
Company’s obligations to him are exclusively contractual in
nature. The Company and/or its affiliates shall be the sole owner or
owners of all the fruits and proceeds of Executive’s services hereunder,
including, but not limited to, all ideas, concepts, formats, suggestions,
developments, arrangements, designs, packages, programs, scripts, audio visual
materials, promotional materials, photography and other intellectual properties
and creative works which Executive may prepare, create, produce or
otherwise develop in connection with and during his employment hereunder,
including, without limitation, all copyrights and all rights to reproduce, use,
authorize others to use and sell such properties or works at any time or place
for any purpose, free and clear of any claims by Executive (or anyone claiming
under him) of any kind of character whatsoever (other than Executive’s right to
compensation hereunder). Executive agrees that he will have no right
in or to such properties or works and shall not use such properties or works for
his own benefit or the benefit of any other person. Executive shall,
at the request of the Company, execute such assignments, certificates,
applications, filings, instruments or other documents, consistent herewith, as
the Company may from time to time reasonably deem necessary or desirable to
evidence, establish, maintain, perfect, protect, enforce or defend its right,
title and interest in or to any such properties or works.
5.6 Confidential
Information. With the exception of Executive’s personal files,
all memoranda, notes, records and other documents made or compiled by Executive,
or made available to him during his employment with the Company concerning the
business or affairs of the Company or its affiliates shall be the Company’s
property and shall be delivered to the Company on the termination of this
Agreement or at any other time on request. Executive shall keep in
confidence and shall not use for himself or others, or divulge to others, any
information concerning the business or affairs of the Company or its affiliates
which is not otherwise publicly available and which is obtained by Executive as
a result of his employment, including, but not limited to, trade secrets or
processes and information deemed by the Company to be proprietary in nature,
including, without limitation, financial information, programming or plans of
the Company or its affiliates, unless disclosure is permitted by the Company or
required by law.
5.7 Right to Use
Name. The Company and its affiliates shall have the right to
use Executive’s biography, name and likeness in connection with their business,
including in advertising its products and services, but not for use as a direct
or indirect endorsement.
5.8 Cooperation. Executive
agrees that while employed by the Company and at any time thereafter, he will
cooperate in the Company’s defense or prosecution against any threatened or
pending litigation or in any investigation or proceeding by any governmental
agency or body (or any appeal from any such litigation, investigation or
proceeding) that relates to any events or actions which occurred during the Term
of Employment or any Post Term Period.
5.9 Survival. The
covenants set forth above in this Section 5 (the “Restrictive
Covenants”) shall survive the termination of this Agreement.
5.10 Severability of
Covenants. If any court determines that any of the Restrictive
Covenants, or any part thereof, is invalid or unenforceable, the remainder of
the Restrictive Covenants shall not thereby be affected and shall be given full
effect, without regard to the invalid portions.
5.11 Blue-Pencilling. If
any court construes any of the Restrictive Covenants, or any part thereof, to be
unenforceable because of the duration of such provision or the area covered
thereby, such court shall have the power to reduce the duration or area of such
provision and, in its reduced form, such provision shall then be enforceable and
shall be enforced.
6. Executive
Representation. Executive represents and warrants to the
Company that the execution and delivery of this Agreement by Executive and the
Company and the performance by Executive of his duties hereunder shall not
constitute a breach of, or otherwise contravene, the terms of any employment
agreement or other agreement or policy to which Executive is a party or
otherwise bound.
7. Other
Provisions
7.1 Notices. Any
notice or other communication required or which may be given hereunder
shall be in writing and shall be deemed to have been duly given when delivered
by hand or overnight courier or two days after it has been mailed by United
States express or registered mail, return receipt requested, postage prepaid,
addressed to the respective addresses set forth below:
|
|
(a)
|
If
to the Company, to:
|
DIRECTV
|
|
|
2230
E. Imperial Highway
|
|
|
El
Segundo, CA 90245
|
|
|
Attention: Corporate
Secretary
|
|
|
Telecopy: (310) 964-0838
|
|
|
(b)
|
If
the Executive, to:
|
Michael
D. White
|
|
(at
the most recent address on file with the
|
Company)
|
Such
addresses may be changed by written notice sent to the other party at the
last recorded address of that party. Notice of change of address
shall be effective only upon receipt.
7.2 Entire
Agreement. This Agreement contains the entire understanding of
the parties with respect to the employment of Executive by the
Company. There are no restrictions, agreements, promises, warranties,
covenants or undertakings between the parties with respect to the subject matter
herein other than those expressly set forth herein. This Agreement
supersedes all prior agreements and understandings (including verbal agreements)
between Executive and the Company and/or its affiliates regarding the terms and
conditions of Executive’s employment with the Company and/or its
affiliates.
7.3 Waivers and
Amendments. This Agreement may be amended, modified,
superseded, canceled, renewed or extended, and the terms and conditions hereof
may be waived, only by a written instrument signed by the parties or, in
the case of a waiver, by the party waiving compliance. No delay on
the part of any party in exercising any right, power or privilege hereunder
shall operate as a waiver thereof, nor shall any waiver on the part of any party
of any right, power or privilege hereunder, nor any single or partial exercise
of any right, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, power or privilege
hereunder.
7.4 Governing Law; Consent to
Jurisdiction. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to
agreements made within the State of New York, without regard to its conflict of
law rules which are deemed applicable herein. The parties hereto
agree that any controversy which may arise under this Agreement or out of
the relationship established by this Agreement would involve complicated and
difficult factual and legal issues and that, therefore, any action brought by
the Company against Executive or brought by Executive, alone or in combination
with others, against the Company, whether arising out of this Agreement or
otherwise, shall be determined by a judge sitting without a jury.
7.5 Assignment. This
Agreement and the Executive’s rights and obligations hereunder may not be
assigned by Executive. Any purported assignment or delegation by
Executive in violation of the foregoing shall be null and void ab initio and of
no force and effect. The Company may assign this Agreement and
its rights, together with its obligations hereunder, to an affiliate of the
Company or to a person or entity which is a successor in interest to
substantially all of the business operations of the Company. Upon
such assignment, the rights and obligations of the Company hereunder shall
become the rights and obligations of such affiliate or successor person or
entity.
7.6 Successors; Binding
Agreement. This Agreement shall inure to the benefit of and be
binding upon personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees.
7.7 Section 409A of the
Code. Notwithstanding anything herein to the contrary,
(i) if, at the time of the Executive’s termination of employment with the
Company, the Executive is a “specified employee” as defined in Section 409A
of the Code, and the deferral of the commencement of any payments or benefits
otherwise payable hereunder as a result of such termination of employment is
necessary in order to prevent the imposition of any accelerated or additional
tax under Section 409A of the Code, then the Company will defer the payment
of any such payments or benefits hereunder (without any reduction in such
payments or benefits ultimately paid or provided to the Executive) until the
date that is six months following the Executive’s termination of employment with
the Company (or the earliest date as is permitted under Section 409A of the
Code) and (ii) if any other payments of money or other benefits due to the
Executive hereunder would cause the application of an accelerated or additional
tax under Section 409A of the Code, such payments or other benefits shall
be deferred if deferral will make such payment or other benefits compliant under
Section 409A of the Code, or otherwise such payment or other benefits shall
be restructured, to the extent possible, in a manner, determined by the Board,
that does not cause such an accelerated or additional tax or result in an
additional cost to the Company. The Company shall consult with its
legal counsel and tax accountants in good faith regarding the implementation of
the provisions of this Section 7.7, which shall be done only in a manner
that is reasonably acceptable to the Executive; provided, however, that
neither the Company, any subsidiary or other affiliate of the Company, nor any
of their employees or representatives shall have any liability to the Executive
with respect thereto.
7.8 Withholding
Taxes. The Company may withhold from any amounts payable
under this Agreement such Federal, state and local taxes as may be required
to be withheld pursuant to any applicable law or regulation.
7.9 Counterparts. This
Agreement may be executed in two or more counterparts, each of which shall
be deemed an original but all of which together shall constitute one and the
same instrument.
7.10 Headings. The
headings in this Agreement are for reference purposes only and shall not in any
way affect the meaning or interpretation of this Agreement.
[Signatures on next
page]
IN
WITNESS WHEREOF, the parties have executed this Agreement on the Effective Date,
after approval of this Agreement by the Compensation Committee and the Board of
Directors of the Company, with effect as of the Effective Date.
|
DIRECTV
By: /s/ CHARLES R.
LEE
Name: Charles R.
Lee
Title: Chairman of
the Compensation
Committee
|
|
|
/s/
MICHAEL D. WHITE
Michael
D. White
|
Exhibit A
DEFINITIONS
“Cause”
shall mean: (i) Executive’s willful and continued failure to
perform his material duties with respect to the Company as provided hereunder
(other than due to Disability); (ii) the commission of any fraud,
misappropriation or misconduct by Executive that causes demonstrable material
injury, monetarily or otherwise, to the Company or any affiliate;
(iii) Executive’s conviction of, or plea of guilty or nolo contendere to, a felony;
(iv) the failure by Executive to comply, in any material respect, with any
applicable restrictive covenants; or (v) the failure by Executive to comply
with any other undertaking set forth in his employment agreement or any other
agreement Executive has with the Company or any affiliate or any breach by
Executive thereof, if such failure or breach is reasonably likely to result in a
demonstrable material injury to the Company or any affiliate, in each case, that
is not cured, to the extent curable, within 30 days of written notice from the
Company or otherwise satisfactorily explained.
The
cessation of employment of Executive shall not be deemed to be for Cause unless
and until there shall have been delivered to Executive a copy of a resolution
duly adopted by the affirmative vote of seventy-five percent (75%) of the entire
membership of the Board (excluding, however, Executive, to the extent he is a
member of the Board at such time) at a meeting of the Board called and held for
such purpose (after reasonable notice is provided to Executive and Executive is
given an opportunity, together with counsel, to be heard before the Board)
finding that, in the good faith opinion of the Board, Cause exists and
specifying the particulars thereof in detail.
“Disability”
shall mean Executive’s inability to perform all of his material duties under the
Agreement for more than 180 days in any 360 day period as a result of physical
or mental incapacity or illness which is reasonably likely to continue
indefinitely. Any question as to the existence of the Disability of
Executive as to which Executive and the Company cannot agree shall be determined
in writing by a qualified independent physician mutually acceptable to Executive
and the Company. If Executive and the Company cannot agree as to a
qualified independent physician, each shall appoint such a physician and those
two physicians shall select a third who shall make such determination in
writing. The determination of Disability made in writing to Executive
and the Company shall be final and conclusive for all purposes of the
Agreement.
“Effective
Termination” shall mean the occurrence of any of the following, without
Executive’s consent: (i) a reduction in Executive’s base salary
or target bonus opportunity; (ii) a reduction in Executive’s
responsibilities, titles, powers, or duties at the Company, or assignment of
duties inconsistent with the Executive’s Position, (iii) the relocation of
Executive’s principal office to a location more than 50 miles from the New
York City or Los Angeles metropolitan area; or (iv) Executive’s voluntary
resignation for any reason within 60 days following the first anniversary of a
Transformation Event; provided, that any of the events described in clauses (i)
– (iii) above shall constitute an Effective Termination only if the Company
fails to cure such event within 30 days after receipt from Executive of written
notice of the event which constitutes an Effective Termination; and provided
further, that Executive shall cease to have a right to terminate due to
Effective Termination pursuant to clauses (i) – (iii) above, on the 60th day
following the later of the occurrence of the event or Executive’s knowledge
thereof, unless he has given the Company notice thereof prior to such date.
Notwithstanding anything to the contrary herein, until one year after a
Transformation Event has occurred, no violation of clause (ii) above shall
constitute the basis for an Effective Termination if such violation is directly
related to such Transformation Event and Executive remains the senior most
executive corporate officer of the Company.
A “Transformation
Event” shall mean the occurrence of some event, transaction or other
situation that results in the Company: (a) no longer being a
reporting company whose equity securities are registered under
Section 12(g) of the Securities Exchange Act of 1934, as amended; or
(b) an acquisition, whether directly or indirectly, of at least 30% of the
voting power of the Company, unless the members of the Board prior to the
acquisition continue to constitute at least 75% of the members of the Board
after such acquisition.