Severance Agreement - Orbital Sciences Corp. and Jeffrey V. Pirone
August 2, 2000
Mr. Jeffrey V. Pirone
6418 Tilden Lane
N. Bethesda, Maryland 20852
Dear Jeff:
As we discussed, this letter agreement (the "Agreement") reflects the terms of
your employment at Orbital Sciences Corporation ("Orbital") effective July 21,
2000. All necessary consents and approvals required of Orbital to enter into
this Agreement have been obtained.
1. Employment
Effective July 21, 2000, you agree to resign from your position as
Executive Vice President and Chief Financial Officer of Orbital and
as a director and/or officer of Orbital and each of its subsidiaries
and affiliates where you hold such a position. From July 21, 2000
through the earlier of (i) July 21, 2002, or (ii) such date that you
accept a full-time position with another employer (such earlier date,
the "Employment Termination Date"), you will remain employed by
Orbital as Vice President, Special Projects, reporting to the Chief
Executive Officer. In such capacity, you agree to make yourself
reasonably available to provide reasonable assistance on an ad hoc
part-time basis on such matters relating to Orbital's business as
shall be reasonably requested by the Chief Executive Officer. In
addition, you agree to make yourself reasonably available to provide
reasonable assistance in order to support the transition of your
duties, responsibilities, current assignments and projects to your
successor. You agree to provide prompt written notice to Orbital of
your acceptance of a full-time position with another employer within
three business days of acceptance of such employment.
In addition, you agree to make yourself reasonably available and to
reasonably cooperate with Orbital in any litigation, investigation,
action, suit or claim of whatever nature that may be brought by or
against Orbital, its subsidiaries, affiliates, officers, directors or
employees relating to or arising in connection with matters with
which you were involved or of which you had knowledge during your
employment with Orbital. After your Employment Termination Date, such
availability and cooperation shall be subject to reasonable
accommodation for the requirements of your new position. You shall
not conduct any activities on behalf of Orbital or hold yourself out
as representing Orbital except at the direction of the Chief
Executive Officer.
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Jeffrey V. Pirone
August 2, 2000
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2. Compensation
Orbital agrees to pay you your full base salary through July 21,
2000. Any unpaid salary through such date shall be paid by direct
deposit into your account no later than August 4, 2000. In lieu of
any further salary payments to you after that date and as severance
compensation for your past performance, Orbital agrees to pay you on
or before August 10, 2000 by wire transfer in accordance with wiring
instructions provided by you, a one-time cash payment of $731,000,
which is equal to two (2) times your annual base salary of $295,000,
plus 80% of your targeted annual incentive bonus for 2000.
In addition, you shall be entitled to receive no more than three (3)
non-discretionary cash bonuses in the amount of $75,000 each upon the
successful consummation, to occur no later than December 31, 2000, of
the following currently contemplated transactions: (i) Fairchild
Defense divestiture, (ii) sale of Magellan Corporation and
monetization of proceeds, and (iii) third party equity investment of
at least $100 million in ORBCOMM or through Orbital with proceeds
directed to ORBCOMM . Orbital shall pay you the cash bonus within
fifteen (15) days following the closing of each transaction.
3. Administrative Arrangement
Orbital agrees to provide you reasonable administrative and
secretarial support, including use of voice-mail and e-mail, through
the Employment Termination Date.
4. Benefits
You shall be entitled to continue to participate in all employee
health and welfare benefit plans in accordance with their terms
through the Employment Termination Date. Thereafter, you may elect to
continue coverage under COBRA at your expense.
5. Retirement Plans
You shall continue to be entitled to receive all benefits that may be
due you under each of (1) the Orbital Deferred Salary & Profit
Sharing Plan (the "Orbital 401(k)"), and (2) the Orbital 1995
Deferred Compensation Plan (the "Deferred Compensation Plan"), in
each case in accordance with the terms of such plans. Subsequent to
the Employment Termination Date, Orbital shall pay out the balance of
your account in the Deferred Compensation Plan pursuant to your
election under such plan and shall comply with your election with
respect to your balance in the Orbital 401(k) in accordance with such
plan.
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Jeffrey V. Pirone
August 2, 2000
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6. Leave
As of July 21, 2000, you will no longer accrue any leave under
Orbital's composite leave policy. On August 4, 2000, you shall be
paid by direct deposit in your account a lump sum payment for your
hours of accrued but unused composite leave at your current salary
rate through July 21, 2000.
7. Stock Options, ESPP and Promissory Note
Except as provided below, your stock options in Orbital shall vest
immediately and you shall be entitled to exercise any or all stock
options for a period of two (2) years from July 21, 2000, provided,
however, that you agree to the substitution of nonstatutory stock
options for incentive stock options to the extent necessary to
implement the foregoing, and provided further that such exercise is
permitted under Orbital's insider trading policy. Notwithstanding the
foregoing, the 150,000 Orbital stock options granted to you on May
28, 1999 shall be cancelled as of the date of this Agreement. Your
stock options in any Orbital subsidiaries or affiliates shall
continue to vest until your Employment Termination Date. Upon your
Employment Termination Date, all subsidiary or affiliate options that
are not exercisable shall terminate and options that are exercisable
on such date shall be exercisable and expire in accordance with their
terms.
You shall be eligible to continue to participate in the Orbital
Employee Stock Purchase Plan for the year ended December 31, 2000.
Thereafter, your eligibility to participate shall terminate.
The Promissory Note dated May 1, 1998 in the amount of $50,000
payable to the order of Orbital shall be terminated and discharged by
Orbital and Orbital shall surrender the original note marked "Paid
and Cancelled." You shall assume full responsibility for the payment
of any tax liability for federal and state taxes on amounts forgiven
and discharged.
8. Taxes
All payments to be made to you by Orbital, including payments under
paragraph 2, shall be made net of any federal, state and local taxes,
FICA or other amounts required to be withheld by Orbital.
9. Expense Reimbursement
You shall be reimbursed for normal business expenses incurred prior
to your Employment Termination Date, in accordance with Orbital's
normal expense reimbursement policy.
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Jeffrey V. Pirone
August 2, 2000
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10. Release
Except as provided in this Agreement, you hereby release, acquit and
forever discharge Orbital, its subsidiaries, affiliates, successors,
officers, directors and employees, the Deferred Compensation Plan and
the Orbital 401(k) (collectively, the "Orbital Entities") of and
from, and hereby waive all rights with respect to, any and all
rights, actions, suits, claims, causes of actions, damages, expenses
or costs of whatever nature arising out of or related to (i)
Orbital's employment of you, including but not limited to the
Executive Employment Agreement between you and Orbital dated as of
October 21, 1998, and any and all other contracts and agreements,
whether oral or in writing, relating to such employment, (ii) the
Deferred Compensation Plan and the Orbital 401(k), (iii) any health
or other benefit plans maintained by Orbital or its affiliates, (iv)
other matters referred to herein, and (v) Orbital's interaction with
you up to the date of execution of this Agreement, including, but not
limited to, any rights, actions, suits, claims, causes of action, or
liability under (a) any federal, state or local statute or
regulation, or (b) under common law principles, except claims or
proceedings necessary to enforce the provisions of this Agreement,
provided that you shall not be precluded from any action, suit or
proceeding arising out of, pertaining to or based on facts not known
to you as of the date of this Agreement. You further covenant and
agree never to join in or commence any action, suit or proceeding, in
law or in equity, or before any administrative agency, or to incite,
encourage, or participate in any such action, suit or proceeding,
against the Orbital Entities in any way pertaining to or arising out
of your employment with Orbital, except claims or proceedings
necessary to enforce the provisions of this Agreement. Orbital
covenants and agrees not to commence any action, suit or proceeding,
in law or in equity, against you, pertaining to or arising out of
your employment with Orbital, except claims or proceedings necessary
to enforce the provisions of this Agreement, provided that Orbital
shall not be precluded from any action, suit or proceeding arising
out of, pertaining to or based on facts not known to senior
management of Orbital as of the date of this Agreement. This
provision shall not release either party from its obligations under
the Officer Indemnification Agreement between you and Orbital dated
as of October 21, 1998.
In connection with the settlement of the class action lawsuits
relating to Orbital's restatement of its financial statements, you
agree to review, execute and deliver any documents or agreements
necessary to approve or implement such settlement including, but not
limited to, the settlement agreement, the stipulation of settlement
and a release of National Union Fire Insurance Company. In the event
that the proposed settlement is changed in a manner that has a
material adverse effect on you, you may reasonably decline to execute
the related settlement documents and continue the litigation
independently.
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Jeffrey V. Pirone
August 2, 2000
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11. Officer Indemnification and Employment Agreements
The terms and conditions of the Officer Indemnification Agreement by
and between you and Orbital dated as of October 21, 1998, the Officer
Indemnification Agreement by and between you and Magellan Corporation
("Magellan") dated as of January 1, 1998, the Director
Indemnification Agreement by and between you and Magellan as of
January 1, 1998, the Director Indemnification Agreement by and
between you and ORBCOMM Corporation as of May 1998 and the
Indemnification Agreement by and between you and ORBCOMM Global as of
May 1998, shall remain in full force and effect. Arnold & Porter
shall continue to represent you as set forth in those certain
agreements between you and Arnold & Porter dated March 19, 1999 and
an addendum dated March 23, 1999, provided that Orbital shall have
the right to select different counsel of equivalent experience and
capability if it determines that it is in the best interests of the
Company or required as a result of any conflict of interest. You
shall be provided coverage under Orbital's Director & Officer
insurance policy, if applicable, to the extent permissible by law,
with respect to any damages relating to or arising in connection with
your service as an officer of Orbital. The Executive Employment
Agreement between you and Orbital dated October 15, 1998 and the
Performance Share Agreement between you and Orbital dated July 21,
1999 are hereby terminated effective July 21, 2000.
12. Confidentiality
You acknowledge that you have held a sensitive management position
with Orbital and that, by virtue of having held such position, you
have had access to and have learned confidential and proprietary
information. You agree that until, and for a period of three years
after the Employment Termination Date, you shall hold in confidence
and not directly or indirectly disclose any confidential or
proprietary information of Orbital or any of Orbital's subsidiaries
or affiliates to any person or entity, or use any such confidential
and proprietary information for any purpose, except as authorized by
Orbital, provided that the foregoing restrictions shall not apply to
information that becomes known to and available for use by the public
other than as a result of your unauthorized acts or failures to act.
You acknowledge that all materials that in any way contain,
incorporate or reflect confidential or proprietary information of
Orbital or any of Orbital's subsidiaries or affiliates, including but
not limited to documents, reports, plans, notes, memoranda, sketches,
drawings, discs and records (including electronic records), shall
belong exclusively to Orbital. You agree to promptly deliver to
Orbital all copies of such materials that you may possess or have
under your control upon your Employment Termination Date or at the
request of the Chief Executive Officer or General Counsel. You also
agree not to disclose to any other person or entity the terms of this
Agreement and agree not to disparage Orbital, its officers,
affiliates or employees in any way and not
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Jeffrey V. Pirone
August 2, 2000
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to engage in any conduct or make statements contrary to the interests
of Orbital, its affiliates, officers or employees, except as may be
required by law.
13. Orbital Property
On the Employment Termination Date or at the request of the Chief
Executive Officer or General Counsel, you agree to return to Orbital
all Orbital property in your possession, including computer
equipment, fax machines, telephones, keys, credit cards, files and
records.
14. Noncompetition
For two years from the date of this Agreement, except with the
express written consent of the Chief Executive Officer, which consent
shall not be unreasonably withheld, you agree not to perform
consulting services for, or receive full-time or part-time employment
from, any person or entity involved in a business that competes with
any existing or planned business of Orbital or its subsidiaries or
affiliates.
15. Binding Agreement
This Agreement shall be binding upon and shall inure to the benefit
of the parties hereto and their respective heirs, devisees,
executors, administrators, legal representatives, successors and
assigns.
16. Notice
For the purposes of the Agreement, notices and all other
communications provided for in this Agreement shall be in writing and
shall be deemed to have been duly given when delivered or mailed by
registered mail, return receipt requested, postage prepaid, addressed
(i) if to Orbital, to Orbital Sciences Corporation, 21700 Atlantic
Boulevard, Dulles, Virginia 20166, Attn: Legal Department, and (ii)
if to you, to the address set forth on the first page of this
Agreement, or to such other address as either party may have
furnished to the other in writing in accordance herewith, except that
notice of change of address shall be effective only upon receipt.
17. Miscellaneous
You and Orbital agree that no provision of this Agreement may be
modified, waived or discharged and no amendment or addition to this
Agreement shall be binding unless such waiver, modification,
discharge, amendment or addition is agreed to in writing, signed by
both you and Orbital, and to the extent necessary, approved or
authorized Orbital's Board of Directors or a committee thereof. No
waiver by you or Orbital of any breach by the
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Jeffrey V. Pirone
August 2, 2000
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other, or compliance with, any condition or provision of this
Agreement to be performed by the other party shall be deemed a waiver
of similar or dissimilar provision of conditions at the same or at
any prior or subsequent time. You and Orbital agree that no
agreements or representations, oral or otherwise, express or implied,
with respect to the subject matter hereof have been made by either
party which are not expressly set forth in this Agreement, and this
Agreement supersedes all prior agreements between Orbital and you
with respect to the subject matter herein. The validity,
interpretation, construction and performance of the Agreement shall
be governed by the local laws of the Commonwealth of Virginia
(regardless of the laws that might otherwise govern under principles
of conflicts of law).
18. Validity
The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and
effect.
19. Remedy for Breach
In the event of a material breach of this Agreement, you and Orbital
agree and consent that the non-breaching party shall be entitled to a
decree of specific performance and injunctive or other equitable
relief in addition to all other remedies available at law.
20. Executed Counterparts
This Agreement may be executed in counterpart and by facsimile.
It has been a great pleasure working with you during the past nine years and I
deeply appreciate all that you have done for Orbital in that time. I look
forward to continuing to work with you on the terms set out above.
Sincerely,
/s/ David W. Thompson
David W. Thompson
Chief Executive Officer
Acknowledged and Agreed:
/s/ Jeffrey V. Pirone
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Jeffrey V. Pirone
Dated: August 3, 2000
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