Employment Agreement - Sirius Satellite Radio Inc. and Mary Patricia Ryan
Execution Copy
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EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of May 3, 2002 (this "Agreement"),
between SIRIUS SATELLITE RADIO INC., a Delaware corporation (the
"Company"), and MARY PATRICIA RYAN (the "Executive").
In consideration of the mutual covenants and conditions set forth herein,
the Company and the Executive agree as follows:
1. Employment. Subject to the terms and conditions of this Agreement, the
Company hereby employs the Executive, and the Executive hereby accepts
employment with the Company.
2. Duties and Reporting Relationship. (a) The Executive shall be employed
in the capacity of Executive Vice President, Marketing, of the Company. In such
capacity, the Executive shall be responsible for the Company's activities in the
areas of subscriber management and retention, market research, consumer
marketing, advertising, channel marketing, electronic marketing and customer
operations. During the Term (as defined below), the Executive shall, on a
full-time basis and consistent with the needs of the Company to achieve the
goals of the Company, use her skills and render services to the best of her
ability in supervising the business and affairs of the Company and, in addition,
perform such other activities and duties consistent with her position as the
Chief Executive Officer, the Chief Operating Officer or the Executive Vice
President, Sales and Marketing, of the Company shall from time to time
reasonably specify and direct.
(b) The Executive shall perform her duties and conduct her business at the
offices of the Company in New York, New York, except for required travel.
(c) The Executive shall report to Mr. Guy Johnson, the Company's Executive
Vice President, Sales and Marketing, or such other officer of similar title and
rank as the Company's Chief Executive Officer shall designate.
3. Term. The term of this Agreement shall commence on June 10, 2002 and end
on May 31, 2005, unless terminated earlier pursuant to the provisions of Section
6 or 9 (the "Term").
4. Compensation. (a) During the Term, the Executive shall be paid an annual
base salary of $320,000 (the "Base Salary"). The Executive's base salary shall
be paid at least monthly and, at the option of the Company, may be paid more
frequently. In the event the Executive's employment is terminated during the
Term, the Executive's base salary shall be prorated through the date of
termination.
(b) On the first day of the Term, the Company shall grant to the Executive
an option to purchase 240,000 shares of the Company's common stock, par value
$.001 per share (the
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"Common Stock"), at an exercise price equal to the closing bid price of the
Common Stock on Friday, June 7, 2002. Such options shall be subject to the terms
and conditions set forth in the Option Agreement attached as Exhibit A.
(c) The Company is in the process of developing a bonus program for the
year ending December 31, 2002. This program is expected to include a variety of
objective milestones, such as number of subscribers, subscriber acquisition
costs and stock price appreciation, and will be approved by the Compensation
Committee of the Board of Directors of the Company (the "Board"). This program
may also include objectives specifically applicable to the Executive and the
Marketing Department of the Company. The Executive shall be guaranteed a bonus
of $160,000 for the calendar year ending December 31, 2002.
(d) On July 31, 2002, the Company shall pay you a one-time starting bonus
of $25,000 (the "Starting Bonus"). If your employment with the Company is
terminated for Cause (as defined below) or you resign your employment with the
Company prior to the first anniversary of the Start Date, the entire Starting
Bonus shall be repaid by you to the Company on a pro rata basis, with each month
of service earning 1/12th of the Starting Bonus. Such repayment shall be due and
payable to the Company within five business days of your last day of employment.
(e) All compensation paid to the Executive hereunder shall be subject to
any payroll and withholding deductions required by applicable law. Except to the
extent expressly provided in Section 9, the Executive shall not be paid any
additional amounts to compensate for any applicable federal, state or local
income or other taxes.
5. Additional Compensation; Expenses and Benefits. (a) During the Term, the
Company shall reimburse the Executive for all reasonable and necessary business
expenses incurred and advanced by the Executive in carrying out her duties under
this Agreement.
(b) During the Term, the Executive shall be entitled to participate fully
in any benefit plans and other fringe benefits which may be made available to
the executive officers holding the title of Executive Vice President of the
Company generally, including, without limitation, medical, dental and life
insurance; provided that the Executive shall participate in any severance, stock
option or stock purchase or compensation plan currently in effect or
subsequently established by the Company to the extent, and only to the extent,
authorized by the plan document and expressly provided by the Board or the
compensation committee thereof.
6. Termination. The date upon which this Agreement is deemed to be
terminated in accordance with any of the provisions of this Section 6 is
referred to herein as the "Termination Date."
(a) The Company has the right and may elect to terminate this Agreement for
Cause at any time. For purposes of this Agreement, "Cause" means the occurrence
or existence of any of the following:
(i) a material breach by the Executive of the terms of this Agreement
or of her duty not to engage in any transaction that represents, directly
or indirectly, self-dealing with the Company or any of its affiliates
(which, for purposes hereof, shall mean any individual, corporation,
partnership, association, limited liability company, trust, estate, or
other entity or organization directly or indirectly controlling, controlled
by, or under direct or indirect common control with the Company) which has
not been approved by a
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majority of the disinterested directors of the Board, if in any such case
such material breach remains uncured after ten days have elapsed following
the date on which the Company gives the Executive written notice of such
breach;
(ii) a breach by the Executive of any duty referred to in clause (i)
above with respect to which at least one prior notice was given under
clause (i);
(iii) any act of dishonesty, misappropriation, embezzlement,
intentional fraud, or similar intentional misconduct by the Executive
involving the Company or any of its affiliates;
(iv) the conviction or the plea of nolo contendre or the equivalent in
respect of a felony;
(v) any damage of a material nature to any property of the Company or
any of its affiliates caused by the Executive's willful misconduct or gross
negligence;
(vi) the repeated nonprescription use of any controlled substance or
the repeated use of alcohol or any other non-controlled substance that
renders the Executive unfit to serve as an officer of the Company or its
affiliates;
(vii) the Executive's failure to comply with the lawful instructions of
the Board or the Company's Chief Executive Officer within five days; or
(viii) conduct by the Executive that, in the opinion of the Board,
demonstrates unfitness to serve as an officer of the Company or its
affiliates, including, without limitation, a finding by the Board or any
regulatory authority that the Executive committed acts of unlawful
harassment or violated any other state, federal or local law or ordinance
prohibiting discrimination in employment.
Termination of the Executive for Cause pursuant to this Section 6(a) shall be
communicated by a Notice of Termination. For purposes of this Agreement, a
"Notice of Termination" shall mean delivery to the Executive of a copy of a
resolution or resolutions duly adopted by the affirmative vote of not less than
a majority of the directors present (in person or by teleconference) and voting
at a meeting of the Board called and held for that purpose after reasonable
notice to the Executive and reasonable opportunity for the Executive, together
with the Executive's counsel, to be heard before the Board prior to such vote,
finding that in the good faith opinion of the Board, the Executive was guilty of
conduct set forth in clauses (i) through (viii) of this Section 6(a) and
specifying the particulars thereof. For purposes of this Section 6(a), this
Agreement shall terminate on the date specified by the Board in the Notice of
Termination.
(b) (i) This Agreement and the Executive's employment shall terminate upon
the death of the Executive.
(ii) If the Executive is unable to perform the essential duties and
functions of her position because of a disability, even with a reasonable
accommodation, for one hundred eighty days within any three hundred sixty-five
day period, and the Board, in its reasonable judgment, determines that the
exigencies created by the Executive's disability are such that termination is
warranted, the Board shall have the right and may elect to terminate the
services of the Executive by a Notice of Disability Termination. For purposes of
this Agreement, a "Notice of Disability Termination" shall mean a written notice
that sets forth in reasonable detail the facts
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and circumstances claimed to provide a basis for termination of the Executive's
employment under this Section 6(b)(ii). For purposes of this Agreement, no such
purported termination by the Board shall be effective without such Notice of
Disability Termination. This Agreement shall terminate on the day such Notice of
Disability Termination is received by the Executive.
(c) Should the Executive wish to resign from her position with the Company
during the Term, the Executive shall give fourteen days prior written notice to
the Company. This Agreement shall terminate on the effective date of the
resignation defined above, however, the Company may, at its sole discretion,
request that the Executive perform no job responsibilities and cease her active
employment immediately upon receipt of the notice from the Executive.
(d) The Company shall have the absolute right to terminate the Executive's
employment without Cause at any time. This Agreement shall terminate one day
following receipt of such notice by the Executive, however, the Company may, at
its sole discretion, request that the Executive cease active employment and
perform no more job duties immediately upon provision of such notice to the
Executive.
(e) If the employment of the Executive is terminated without Cause, then
the Executive shall be entitled to receive, and the Company shall pay to the
Executive without setoff, counterclaim or other withholding, except as set forth
in Section 4(d), a lump sum amount (in addition to any salary, benefits or other
sums due the Executive through the Termination Date) in an amount equal to the
sum of (i) her base salary in effect on the Termination Date and (ii) the last
annual bonus paid to her or, in the event the Executive is terminated without
Cause prior to January 1, 2003, $160,000. Any amount becoming payable under this
Section 6(e) shall be paid in immediately available funds within ten business
days following the Termination Date.
7. Nondisclosure of Confidential Information. (a) The Executive
acknowledges that in the course of her employment she will occupy a position of
trust and confidence. The Executive shall not, except as may be required to
perform her duties or as required by applicable law, disclose to others or use,
directly or indirectly, any Confidential Information.
(b) "Confidential Information" shall mean information about the Company's
business and operations that was learned by the Executive in the course of her
employment by the Company, including, without limitation, any business plans,
product plans, strategy, budget information, proprietary knowledge, patents,
trade secrets, data, formulae, sketches, notebooks, blueprints, information and
client and customer lists and all papers and records (including computer
records) of the documents containing such Confidential Information, other than
information that is publicly disclosed by the Company in writing. The Executive
acknowledges that such Confidential Information is specialized, unique in nature
and of great value to the Company, and that such information gives the Company a
competitive advantage. The Executive agrees to deliver or return to the Company,
at the Company's request at any time or upon termination or expiration of her
employment or as soon as possible thereafter, all documents, computer tapes and
disks, records, lists, data, drawings, prints, notes and written information
(and all copies thereof) furnished by or on behalf of the Company or prepared by
the Executive in the course of her employment by the Company.
(c) The provisions of this Section 7 shall survive any termination of this
Agreement for a period of two years.
8. Covenant Not to Compete. During the Restricted Period (as defined
below), the Executive shall not, directly or indirectly, enter into the
employment of, render services to, or
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acquire any interest whatsoever in (whether for her own account as an individual
proprietor, or as a partner, associate, stockholder, officer, director,
consultant, trustee or otherwise), or otherwise assist, any person or entity (a)
engaged in any operations in North America involving the transmission of radio
entertainment programming on the frequencies 2310 to 2360 Mhz in competition
with the Company, (b) engaged in the business of manufacturing, marketing or
distributing radios, antennas or other parts for use in devices which receive
broadcasts of XM Satellite Radio Inc. or any successor to XM Satellite Radio
Inc. or (c) that competes, or is likely to compete, with any other aspect of the
business of the Company as conducted at the end of the Term; provided that
nothing in this Agreement shall prevent the purchase or ownership by the
Executive by way of investment of less than five percent of the shares or equity
interest of any corporation or other entity. Without limiting the generality of
the foregoing, the Executive agrees that during the Restricted Period, the
Executive shall not call on or otherwise solicit business or assist others to
solicit business from any of the customers or potential customers of the Company
as to any product or service that competes with any product or service provided
or marketed by or under development by the Company at the end of the Term. The
Executive agrees that, during the Restricted Period she will not solicit or
assist others to solicit the employment of or hire any employee of the Company
without the prior written consent of the Company. For purposes of this
Agreement, the "Restricted Period" shall mean two years following the end of the
Term; provided that if the employment of the Executive is terminated without
Cause, the "Restricted Period" shall be one year following the end of the Term.
9. Change of Control Provisions. (a) Notwithstanding the terms of Section
6(e), if following a Change of Control (as defined below) the employment of the
Executive is terminated without Cause or the Executive terminates her employment
for Good Reason, then the Executive shall be entitled to receive, and the
Company shall pay to the Executive without setoff, counterclaim or other
withholding, except as set forth in Section 4(e), an amount (in addition to any
salary, benefits or other sums due the Executive through the Termination Date)
equal to the sum of (i) her base salary in effect on the Termination Date and
(ii) the last annual bonus paid to her or, in the event the Executive is
terminated prior to January 1, 2003, $160,000.
(b) For the purposes of this Agreement, a "Change of Control" shall mean
the occurrence of any of the following: (i) the sale, lease, transfer,
conveyance or other disposition, in one or a series of related transactions, of
all or substantially all of the assets of the Company to any "person" or "group"
(as such terms are used in Sections 13(d)(3) and 14(d)(2) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act")), (ii) any person or group
is or becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under
the Exchange Act, except that a person shall be deemed to have "beneficial
ownership" of all shares that any such person has the right to acquire, whether
such right is exercisable immediately or only after the passage of time),
directly or indirectly, of more than 40% of the total voting power of the voting
stock of the Company, including by way of merger, consolidation or otherwise
(other than affiliates of Oppenheimer Funds, Inc., Apollo Management, L.P. or
The Blackstone Group, L.P., acting individually or as a group), or (iii) during
any period of two consecutive years, individuals who at the beginning of such
period constituted the Board (together with any new directors whose election by
such Board or whose nomination for election by the stockholders of the Company
was approved by a vote of a majority of the directors of the Company, then still
in office, who were either directors at the beginning of such period or whose
election or nomination for election was previously so approved) cease for any
reason to constitute a majority of the Board then in office. For purposes of
this Agreement, "Good Reason" shall mean the continuance of any of the following
events (without the Executive's prior written consent) for a period of thirty
days after delivery to the Company by the Executive of a notice of the
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occurrence of such event: (i) the assignment to the Executive by the Company of
duties not reasonably consistent with the Executive's positions, duties,
responsibilities or titles at the commencement of the Term or any material
reduction in her duties or responsibilities or any removal of the Executive from
or any failure to re-elect the Executive to any of such positions; (ii) any
reduction in the Base Salary or material reduction in fringe benefits; (iii) the
assignment of the Executive to an office of the Company located more than 50
miles, measured in driving distance, from Grand Central Station in New York
City; or (iv) any material breach by the Company of this Agreement.
(c) If the Executive is, in the opinion of a nationally recognized
accounting firm jointly selected by the Executive and the Company, required to
pay an excise tax on "excess parachute payments" (as defined in Section 280G(b)
of the Internal Revenue Code of 1986, as amended (the "Code")) under Section
4999 of the Code as a result of an acceleration of the vesting of stock options,
the Company shall have an absolute and unconditional obligation to pay the
Executive in accordance with the terms of this Section 9 the amount of such
taxes. In addition, the Company shall have an absolute and unconditional
obligation to pay the Executive such additional amounts as are necessary to
place the Executive in the exact same financial position that she would have
been in if she had not incurred any expected tax liability under Section 4999 of
the Code; provided that the Company shall in no event pay the Executive any
amounts with respect to any penalties or interest due under any provision of the
Code. The determination of the exact amount, if any, of any expected "excess
parachute payments" and any expected tax liability under Section 4999 of the
Code shall be made by a nationally-recognized independent accounting firm
selected by the Company. The fees and expenses of such accounting firm shall be
paid by the Company. The determination of such accounting firm shall be final
and binding on the parties. The Company irrevocably agrees to pay to the
Executive, in immediately available funds to an account designated in writing by
the Executive, any amounts to be paid under this Section 9 within two business
days after receipt by the Company of written notice from the accounting firm
which sets forth such accounting firm's determination. In addition, in the event
that such payments are not sufficient to pay all excise taxes on "excess
parachute payments" under Section 4999 of the Code as a result of an
acceleration of the vesting of options and to place the Executive in the exact
same financial position that she would have been in if she had not incurred any
expected tax liability under Section 4999 of the Code as a result of a change in
control, then the Company shall have an absolute and unconditional obligation to
pay the Executive such additional amounts as may be necessary to pay such excise
taxes and place the Executive in the exact same financial position that she
would have been had she not incurred any tax liability as a result of a change
in control under the Code. Notwithstanding the foregoing, in the event that a
written ruling (whether public or private) of the Internal Revenue Service
("IRS") is obtained by or on behalf of the Company or the Executive, which
ruling provides that the Executive is not required to pay, or is entitled to a
refund with respect to, all or any portion of such excise taxes or additional
amounts, the Executive shall promptly reimburse the Company in an amount equal
to all amounts paid to the Executive pursuant to this Section 9(c) less any
excise taxes or additional amounts which remain payable by, or are not refunded
to, the Executive after giving effect to such IRS ruling. Each of the Company
and the Executive agrees to promptly notify the other party if it receives any
such IRS ruling.
10. Remedies. The Executive and Company agree that damages for breach of
any of the covenants under Sections 7 and 8 will be difficult to determine and
inadequate to remedy the harm which may be caused thereby, and therefore consent
that these covenants may be enforced by temporary or permanent injunction
without the necessity of bond. The Executive believes, as of the date of this
Agreement, that the provisions of this Agreement are reasonable
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and that the Executive is capable of gainful employment without breaching this
Agreement. However, should any court or arbitrator decline to enforce any
provision of Section 7 or 8 of this Agreement, this Agreement shall, to the
extent applicable in the circumstances before such court or arbitrator, be
deemed to be modified to restrict the Executive's competition with the Company
to the maximum extent of time, scope and geography which the court or arbitrator
shall find enforceable, and such provisions shall be so enforced.
11. Indemnification. The Company shall indemnify the Executive to the full
extent provided in the Company's Amended and Restated Certificate of
Incorporation and Amended and Restated Bylaws and the law of the State of
Delaware in connection with her activities as an officer of the Company.
12. Entire Agreement. The provisions contained herein constitute the entire
agreement between the parties with respect to the subject matter hereof and
supersede any and all prior agreements, understandings and communications
between the parties, oral or written, with respect to such subject matter.
13. Modification. Any waiver, alteration, amendment or modification of any
provisions of this Agreement shall not be valid unless in writing and signed by
both the Executive and the Company.
14. Severability. If any provision of this Agreement shall be declared to
be invalid or unenforceable, in whole or in part, such invalidity or
unenforceability shall not affect the remaining provisions hereof, which shall
remain in full force and effect.
15. Assignment. The Executive may not assign any of her rights or delegate
any of her duties hereunder without the prior written consent of the Company.
The Company may not assign any of its rights or delegate any of its obligations
hereunder without the prior written consent of the Executive, except that any
successor to the Company by merger or purchase of all or substantially all of
the Company's assets shall assume this Agreement.
16. Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the successors in interest of the Executive and the Company.
17. Notices. All notices and other communications required or permitted
hereunder shall be made in writing and shall be deemed effective when delivered
personally or transmitted by facsimile transmission, one business day after
deposit with a nationally recognized overnight courier (with next day delivery
specified) and five days after mailing by registered or certified mail:
if to the Company:
Sirius Satellite Radio Inc.
1221 Avenue of the Americas
36th Floor
New York, New York 10020
Attention: General Counsel
Telecopier: (212) 584-5353
if to the Executive:
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Mary Patricia Ryan
Address on file at the offices
of the Company
or to such other person or address as either party shall furnish in writing to
the other party from time to time.
18. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made
and to be performed entirely within the State of New York.
19. Non-Mitigation. The Executive shall not be required to mitigate damages
or seek other employment in order to receive compensation or benefits under
Section 6 or 9 of this Agreement; nor shall the amount of any benefit or payment
provided for under Section 6 or 9 of this Agreement be reduced by any
compensation earned by the Executive as the result of employment by another
employer.
20. Arbitration. (a) The Executive and the Company agree that if a dispute
arises concerning or relating to the Executive's employment with the Company, or
the termination of the Executive's employment, such dispute shall be submitted
to binding arbitration under the rules of the American Arbitration Association
regarding resolution of employment disputes in effect at the time such dispute
arises. The arbitration shall take place in New York, New York, before a single
arbitrator experienced in New York employment law and licensed to practice law
in New York and selected in accordance with the American Arbitration Association
rules and procedures. Except as provided below, the Executive and the Company
agree that this arbitration procedure will be the exclusive means of redress for
any disputes relating to or arising from the Executive's employment with the
Company or her termination, including disputes over rights provided by federal,
state, or local statutes, regulations, ordinances, and common law, including all
laws that prohibit discrimination based on any protected classification. THE
PARTIES EXPRESSLY WAIVE THE RIGHT TO A JURY TRIAL, AND AGREE THAT THE
ARBITRATOR'S AWARD SHALL BE FINAL AND BINDING ON BOTH PARTIES, AND SHALL NOT BE
APPEALABLE. The arbitrator shall have discretion to award monetary and other
damages, and any other relief that the arbitrator deems appropriate and is
allowed by law. The arbitrator shall have the discretion to award the prevailing
party reasonable costs and attorneys' fees incurred in bringing or defending an
action, and shall award such costs and fees to the Executive in the event the
Executive prevails on the merits of any action brought hereunder.
(b) The Company and the Executive agree that the sole dispute that is
excepted from Section 20(a) is an action seeking injunctive relief from a court
of competent jurisdiction regarding enforcement and application of Sections 7, 8
or 10 of this Agreement, which action may be brought in addition to, or in place
of, an arbitration proceeding in accordance with Section 20(a).
21. Counterparts. This Agreement may be executed in counterparts, all of
which shall be considered one and the same agreement, and shall become effective
when one or more counterparts have been signed by each of the parties and
delivered to the other party.
22. Executive's Representations. The Executive hereby represents and
warrants to Company that she (a) is not now under any contractual or other
obligation that is inconsistent with or in conflict with this Agreement or that
would prevent, limit, or impair the Executive's performance of her obligations
under this Agreement; (b) is not suffering from, or aware of, any
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physical or mental condition which could reasonably be expected to affect her
ability to function as a senior marketing executive of the Company during the
Term; (c) has been provided the opportunity to be, or has been, represented by
legal counsel in preparing, negotiating, executing and delivering this
Agreement; and (d) fully understands the terms and provisions of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
SIRIUS SATELLITE RADIO INC.
By: /s/ John H. Schultz
--------------------------------------
John H. Schultz
Senior Vice President, Human Resources
/s/ Mary Patricia Ryan
--------------------------------------
Mary Patricia Ryan
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EXHIBIT A
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THIS OPTION HAS NOT BEEN REGISTERED UNDER STATE OR FEDERAL SECURITIES LAWS.
THIS OPTION MAY NOT BE TRANSFERRED EXCEPT BY WILL OR UNDER THE LAWS OF DESCENT
AND DISTRIBUTION.
SIRIUS SATELLITE RADIO 1999 LONG-TERM STOCK INCENTIVE PLAN
STOCK OPTION AGREEMENT
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THIS STOCK OPTION AGREEMENT (this "Agreement"), dated as of June 10, 2002
("Date of Grant"), between SIRIUS SATELLITE RADIO INC., a Delaware corporation
(the "Company"), and MARY PATRICIA RYAN (the "Optionee").
1. Grant of Option. Subject to the terms and conditions of this Agreement
and the Sirius Satellite Radio 1999 Long-Term Stock Incentive Plan (as amended,
supplemented or otherwise modified from time to time, the "Plan"), the Company
hereby grants to the Optionee the right and option (this "Option") to purchase
up to two hundred and forty thousand (240,000) shares (the "Shares") of common
stock, par value $0.001 per share, of the Company at a price per share of
$______ (the "Exercise Price"). This Option is not intended to qualify as an
Incentive Stock Option for purposes of Section 422 of the Internal Revenue Code
of 1986, as amended (the "Code"). In the case of any stock split, stock dividend
or like change in the Shares occurring after the date hereof, the number of
Shares and the Exercise Price shall be adjusted as set forth in Section 4(b) of
the Plan. This Option shall vest and be exercisable as follows:
(a) The right and option to purchase up to sixty thousand (60,000)
Shares shall immediately vest and become exercisable on the date hereof;
(b) The right and option to purchase up to sixty thousand (60,000)
Shares shall vest and become exercisable on June 10, 2003 if the Optionee
continues to be employed by the Company until and on such date;
(c) The right and option to purchase up to sixty thousand (60,000)
Shares shall vest and become exercisable on June 10, 2004 if the Optionee
continues to be employed by the Company until and on such date; and
(d) The right and option to purchase up to sixty thousand (60,000)
Shares shall vest and become exercisable on June 10, 2005 if the Optionee
continues to be employed by the Company until and on such date.
2. Termination of Option. This Option shall terminate, to the extent not
previously exercised, ten years from the Date of Grant or earlier upon the
expiration of (a) ninety (90) days from the date of termination of the
Optionee's employment with the Company for any reason whatsoever other than
death or Disability (as defined below) or (b) the expiration of one year from
(i) the date of death of the Optionee or (ii) cessation of the Optionee's
employment by reason of Disability (as defined below). Subject to the terms of
the Plan, if the Optionee's
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employment is terminated by death, this Option shall be exercisable only by the
person or persons to whom the Optionee's rights under such Option shall pass by
the Optionee's will or by the laws of descent and distribution of the state or
county of the Optionee's domicile at the time of death. "Disability" shall mean
the Optionee is unable to perform the essential duties and functions of her
position because of a disability, even with a reasonable accommodation, for one
hundred eighty days within any three hundred sixty-five day period, and the
Board of the Directors of the Company, in its reasonable judgment, determines
that the exigencies created by the Optionee's disability are such that
termination of employment is warranted. Upon making a determination of
Disability, the Company shall determine the date of the Optionee's termination
of employment.
For purposes of this Agreement, transfer of employment between or among the
Company and/or any Related Company shall not be deemed to constitute a
termination of employment with the Company or the Related Company. "Related
Company", when referring to a subsidiary corporation, shall mean any corporation
(other than the Company) in an unbroken chain of corporations beginning with the
Company if, on the date of this Agreement, each of the corporations other than
the last corporation in the unbroken chain owns stock possessing fifty percent
(50%) or more of the total combined voting power of all classes of stock of one
of the other corporations in such chain. When referring to a parent corporation,
the term "Related Company" shall mean any corporation (other than the Company)
in an unbroken chain of corporations ending with the Company if, on the date of
this Agreement, each of the corporations, other than the Company, owns stock
possessing fifty percent (50%) or more of the total combined voting power of all
classes of stock of one of the other corporations in such chain.
3. Non-transferable. This Option may not be transferred, assigned, pledged
or hypothecated in any manner (whether by operation of law or otherwise) other
than by will or by the applicable laws of descent and distribution, and shall
not be subject to execution, attachment or similar process. Upon any attempt to
transfer, assign, pledge, hypothecate or otherwise dispose of this Option or of
any right or privilege conferred hereby, contrary to the provisions hereof, or
upon the sale or levy or any attachment or similar process upon the rights and
privileges conferred hereby, this Option shall terminate and become null and
void.
4. Exercise. Subject to Sections 1 and 2 of this Agreement and the terms of
the Plan, this Option may be exercised, in whole or in part, by means of a
written notice of exercise signed and delivered by the Optionee (or, in the case
of exercise after death of the Optionee by the executor, administrator, heir or
legatee of the Optionee, as the case may be) to the Company at the address set
forth herein for notices to the Company. Such notice shall (a) state the number
of Shares to be purchased and the date of exercise, and (b) be accompanied by
payment of the Exercise Price in cash, by certified or cashier's check or by
delivery of such other consideration as the administrator of the Plan may
approve.
5. Withholding. Prior to delivery of the Shares purchased upon exercise of
this Option, the Company shall determine the amount of any United States
federal, state and local income tax, if any, which is required to be withheld
under applicable law and shall, as a condition of exercise of this Option and
delivery of certificates representing the Shares purchased upon exercise of this
Option, collect from the Optionee the amount of any such tax to the extent not
previously withheld.
6. Rights of the Optionee. Neither this Option, the execution of this
Agreement nor the exercise of any portion of this Option shall confer upon the
Optionee any right to, or guarantee
<PAGE>
of, continued employment by the Company, or in any way limit the right of the
Company to terminate employment of the Optionee at any time, subject to the
terms of any written employment agreement between the Company and the Optionee.
7. Professional Advice. The acceptance and exercise of this Option may have
consequences under federal and state tax and securities laws which may vary
depending upon the individual circumstances of the Optionee. Accordingly, the
Optionee acknowledges that the Optionee has been advised to consult his or her
personal legal and tax advisor in connection with this Agreement and this
Option.
8. Agreement Subject to the Plan. The Option and this Agreement are subject
to the terms and conditions set forth in the Plan and in any amendments to the
Plan existing now or in the future, which terms and conditions are incorporated
herein by reference. A copy of the Plan previously has been delivered to the
Optionee. Should any conflict exist between the provisions of the Plan and those
of this Agreement, the provisions of the Plan shall govern and control. This
Agreement and the Plan constitute the entire understanding between the Company
and the Optionee with respect to this Option.
9. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York without regard to its
conflict of laws principles, and shall bind and inure to the benefit of the
heirs, executors, personal representatives, successors and assigns of the
parties hereto.
10. Notices. Any notice required or permitted to be made or given hereunder
shall be mailed via certified or registered mail or delivered personally to the
addresses set forth below, or as changed from time to time by written notice to
the other:
Company: Sirius Satellite Radio Inc.
1221 Avenue of the Americas, 36th Floor
New York, New York 10020
Attention: General Counsel
Optionee: Mary Patricia Ryan
Address on file at
the office of the Company
Notices and other communications shall be deemed received and effective
upon the earliest of (i) hand delivery to the recipient, (ii) one business day
after deposit with a nationally recognized overnight courier (with next day
delivery specified) and (iii) five (5) days after being mailed by certified or
registered mail, postage prepaid, return receipt.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first above written.
SIRIUS SATELLITE RADIO INC. Optionee:
By:
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Patrick Donnelly Mary Patricia Ryan
Executive Vice President and
General Counsel