def14a
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant
þ
Filed by a Party other than the Registrant
o
Check the appropriate box:
|
|
|
o Preliminary
Proxy Statement
|
|
|
o Confidential,
for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
|
|
|
þ Definitive
Proxy Statement
|
|
|
o Definitive
Additional Materials
|
|
|
o Soliciting
Material Pursuant to Section
240.14a-12
|
|
|
ORBCOMM Inc.
(Name of Registrant as Specified In
Its Charter)
(Name of Person(s) Filing Proxy
Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
|
|
þ
|
No fee required.
|
|
o
|
Fee computed on table below per Exchange Act
Rules 14a-6(i)(4)
and 0-11.
|
|
|
|
|
(1)
|
Title of each class of securities to which transaction applies:
|
|
|
|
|
(2)
|
Aggregate number of securities to which transaction applies:
|
|
|
|
|
(3)
|
Per unit price or other underlying value of transaction computed
pursuant to Exchange Act
Rule 0-11
(set forth the amount on which the filing fee is calculated and
state how it was determined):
|
|
|
|
|
(4)
|
Proposed maximum aggregate value of transaction:
|
|
|
o |
Fee paid previously with preliminary materials:
|
|
|
o |
Check box if any part of the fee is offset as provided by
Exchange Act
Rule 0-11(a)(2)
and identify the
|
filing for which the offsetting fee was paid previously.
Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
|
|
|
|
(1)
|
Amount Previously Paid:
|
|
|
|
|
(2)
|
Form, Schedule or Registration Statement No.:
|
March 30,
2010
Dear Shareholder:
You are cordially invited to attend our 2010 Annual Meeting of
Shareholders.
We will hold the Annual Meeting at the Hyatt Dulles, 2300 Dulles
Corner Boulevard, Herndon, Virginia 20171, on Thursday
April 29, 2010, at 8:00 a.m. local time. At the
meeting we will discuss and act on the matters described in the
Proxy Statement. At this years meeting, you will have an
opportunity to vote on the election of three directors and
ratify the selection of KPMG LLP as our independent registered
public accounting firm, as well as to transact such other
business as may properly come before the meeting. Shareholders
will then have an opportunity to comment on or to inquire about
the affairs of the Company that may be of interest to
shareholders generally.
Your vote is important no matter how many or how few shares
you own. Whether or not you plan to attend the meeting, please
vote via the Internet, by telephone or by returning your proxy
card as soon as possible.
Admission tickets are printed on the outside back cover of this
Notice of Annual Meeting and Proxy Statement. To enter the
meeting, you will need an admission ticket or other proof that
you are a shareholder. If you hold your shares through a broker
or nominee, you will need to bring a copy of a brokerage
statement showing your ownership as of the March 15, 2010
record date.
We are providing you the Proxy Statement for our 2010 Annual
Meeting of Shareholders and our 2009 Annual Report on
Form 10-K.
You may also access these materials via the Internet at
http://bnymellon.mobular.net/bnymellon/orbc.
I hope you find them interesting and useful in understanding
your company.
Sincerely yours,
Jerome B. Eisenberg
Chairman of the Board
ORBCOMM
Inc.
2115
Linwood Avenue, Suite 100
Fort Lee, New Jersey 07024
Notice of 2010 Annual Meeting
of Shareholders
To the Shareholders of ORBCOMM Inc.:
The 2010 Annual Meeting of Shareholders of ORBCOMM Inc. will be
held at the Hyatt Dulles, 2300 Dulles Corner Boulevard, Herndon,
Virginia 20171, on Thursday, April 29, 2010, at
8:00 a.m., local time, for the following purposes:
(a) to elect three members to our board of directors with
terms expiring at the Annual Meeting in 2013; and
(b) to ratify the appointment by the Audit Committee of our
board of directors of KPMG LLP as our independent registered
public accounting firm for fiscal year 2010.
Only shareholders of record at the close of business on
March 15, 2010 will be entitled to notice of, and to vote
at, the 2010 Annual Meeting and any postponements, adjournments
or delays thereof. A list of such shareholders will be available
for inspection by any shareholder at the 2010 Annual Meeting and
at the offices of the Company at 2115 Linwood Avenue,
Suite 100, Fort Lee, New Jersey 07024, for at least
ten (10) days prior to the 2010 Annual Meeting.
Shareholders are requested to submit a proxy for voting at the
2010 Annual Meeting over the Internet, by telephone or by
completing, signing, dating and returning a proxy card in the
enclosed postage-paid envelope as promptly as possible.
Submitting your vote via the Internet, by telephone or by
returning a proxy card will not affect your right to vote in
person should you decide to attend the 2010 Annual Meeting.
By order of the Board of Directors,
Christian G. Le Brun
Secretary
March 30, 2010
ORBCOMM
Inc.
Proxy
Statement for the 2010 Annual Meeting
INDEX
|
|
|
|
|
|
|
Page
|
|
|
|
|
1
|
|
|
|
|
4
|
|
|
|
|
4
|
|
|
|
|
8
|
|
|
|
|
12
|
|
|
|
|
13
|
|
|
|
|
14
|
|
|
|
|
16
|
|
|
|
|
24
|
|
|
|
|
25
|
|
|
|
|
32
|
|
|
|
|
33
|
|
|
|
|
40
|
|
|
|
|
45
|
|
|
|
|
47
|
|
|
|
|
47
|
|
|
|
|
47
|
|
|
|
|
47
|
|
|
|
|
47
|
|
|
|
|
|
|
i
ORBCOMM
Inc.
Proxy Statement
2010 ANNUAL MEETING
The enclosed proxy is solicited by the board of directors of
ORBCOMM Inc. for use in voting at the 2010 Annual Meeting of
Shareholders of ORBCOMM Inc. to be held on April 29, 2010,
and any postponements, adjournments or delays thereof (the
Annual Meeting or the 2010 Annual
Meeting), for the purposes set forth in the accompanying
Notice of 2010 Annual Meeting of Shareholders. This proxy
statement and the proxy are first being sent to shareholders and
being made available on the Internet
(http://bnymellon.mobular.net/bnymellon/orbc)
on or about March 30, 2010. We will refer to our company in
this proxy statement as we, us, the
Company or ORBCOMM.
GENERAL
INFORMATION ABOUT THIS PROXY STATEMENT AND THE ANNUAL
MEETING
What am I
Voting On at the Annual Meeting?
You will be voting on the following:
|
|
|
|
|
the election of three members of our board of directors; and
|
|
|
|
the ratification of the appointment of KPMG LLP (KPMG) as our
independent registered public accounting firm for our fiscal
year ending December 31, 2010.
|
Who is
Entitled to Vote at the Annual Meeting?
Only holders of record of the Companys common stock at the
close of business on March 15, 2010, the record date for
the meeting, may vote at the Annual Meeting. Each shareholder is
entitled to one vote for each share of our common stock held on
the record date. There is no cumulative voting. On
March 15, 2010, the record date for the Annual Meeting,
there were 42,562,951 shares of our common stock
outstanding and entitled to vote.
Who may
Attend the Annual Meeting?
All shareholders as of the record date, or individuals holding
their duly appointed proxies, may attend the Annual Meeting.
Please note that if you hold your shares through a broker, bank
or other nominee in street name, you will need to
provide a copy of a brokerage statement reflecting your stock
ownership as of the record date to be admitted to the Annual
Meeting. If you want directions to the Annual Meeting, they can
be obtained by contacting Fran Lippe at
(703) 433-6310.
How Do I
Vote My Shares?
Whether or not you plan to attend the Annual Meeting, we urge
you to vote your shares right away. Voting now will not affect
your right to attend or your ability to vote at the Annual
Meeting.
If you are a registered shareholder (that is, your shares are
registered directly in your name through our stock transfer
agent, BNY Mellon Investor Services, or you have stock
certificates), you may vote:
|
|
|
|
|
By mail. Complete and mail the enclosed proxy
card in the enclosed postage prepaid envelope. Your proxy will
be voted in accordance with your instructions. If you sign the
proxy card but do not specify how you want your shares voted,
they will be voted as recommended by our board of directors.
|
|
|
|
By Internet or telephone. Registered
shareholders may vote on the Internet at
www.proxyvoting.com/orbc by following the instructions on
your screen, or by telephone by dialing
(866) 540-5760.
Please have your proxy card ready when voting by Internet or
telephone.
|
|
|
|
|
|
In person at the meeting. If you attend the
meeting you may deliver your proxy card in person or you may
vote by completing a ballot, which will be available at the
meeting.
|
If your shares are held in street name (that is,
held through a brokerage firm, bank, broker-dealer or other
similar organization or nominee), you must provide the brokerage
firm, bank, broker-dealer or other similar organization or
nominee with instructions on how to vote your shares and can do
so as follows:
|
|
|
|
|
By mail. You will receive instructions from
your broker or other nominee explaining how to vote your shares.
|
|
|
|
By Internet or telephone. Street holders may
vote on the Internet at www.proxyvoting.com/orbc and
following the instructions on your screen, or by telephone by
dialing
(866) 540-5760.
Please have your proxy card ready when voting by Internet or
telephone.
|
|
|
|
In person at the meeting. Contact the broker
or other nominee who holds your shares to obtain a
legal proxy from the broker or other nominee and
bring it with you to the meeting. You will not be able to vote
at the meeting unless you have a legal proxy from your broker.
You will also need to sign a ballot in order to have your vote
counted.
|
If you hold your shares of common stock in more than one
account, you will receive a proxy card for each account. To
ensure that all of your shares are voted, please sign, date and
return the proxy card for each account. You should vote all of
your shares of common stock.
How Will
My Proxy Be Voted?
If you use the telephone or Internet voting procedures or duly
complete, sign and return a proxy card to authorize the named
proxies to vote your shares, your shares will be voted as
specified. If your proxy card is signed but does not contain
specific instructions, your shares will be voted as recommended
by our board of directors: FOR the election of the
nominees for directors set forth herein and FOR
ratification of the appointment of the independent registered
public accounting firm. In addition, if other matters come
before the Annual Meeting, the persons named as proxies in the
proxy card will vote in accordance with their best judgment with
respect to such matters.
Even if you plan on attending the Annual Meeting, we urge you to
vote now by giving us your proxy. This will ensure that your
vote is represented at the Annual Meeting. If you do attend the
Annual Meeting, you can change your vote at that time, if you
then desire to do so.
If My
Shares Are Held in Street Name, How Will My
Broker Vote?
If your brokerage firm, bank, broker-dealer or other similar
organization is the holder of record of your shares (that is,
your shares are held in street name), you will
receive voting instructions from the holder of record. You must
follow these instructions in order for your shares to be voted.
Your broker is required to vote those shares in accordance with
your instructions. If you do not give instructions to your
broker, your broker will not be able to vote your shares with
respect to the election of directors (Proposal 1), but may
vote your shares in its discretion with respect to the
ratification of the appointment of the independent registered
public accounting firm (Proposal 2). We urge you to
instruct your broker or other nominee how to vote your shares by
following those instructions.
May I
Revoke My Proxy?
For shareholders of record, whether you vote via the Internet,
by telephone or by mail, you may revoke your proxy at any time
before it is voted by:
|
|
|
|
|
delivering a written notice of revocation to the Secretary of
the Company so long as it is received prior to the Annual
Meeting;
|
|
|
|
casting a later vote using the telephone or Internet voting
procedures;
|
2
|
|
|
|
|
submitting a properly signed proxy card with a later date so
long as it is received prior to the Annual Meeting; or
|
|
|
|
voting in person at the Annual Meeting.
|
Will My
Vote be Confidential?
It is our policy to keep confidential all proxy cards, ballots
and voting tabulations that identify individual shareholders,
except as may be necessary to meet any applicable legal
requirements and, in the case of any contested proxy
solicitation, as may be necessary to permit proper parties to
verify the propriety of proxies presented by any person and the
results of the voting. The independent inspector of election and
any employees involved in processing proxy instructions and
cards or ballots and tabulating the vote are required to comply
with this policy of confidentiality.
How Many
Votes are Needed to Elect Directors and Ratify the Appointment
of Our Independent Registered Public Accounting Firm?
Election of Directors. Directors are elected
by a plurality of votes cast. This means that the three nominees
for election as directors who receive the greatest number of
votes cast by the holders of our common stock entitled to vote
at the meeting, a quorum being present, will become directors.
Selection of our Independent Registered Public Accounting
Firm. An affirmative vote of the holders of a
majority of the voting power of our common stock present in
person or represented by proxy and entitled to vote on the
matter, a quorum being present, is necessary to ratify the
appointment of KPMG LLP as our independent registered public
accounting firm.
What
Constitutes a Quorum for the Meeting?
The presence in person or by proxy of a majority of the shares
of our common stock outstanding on the record date is required
for a quorum. As of March 15, 2010, there were 42,562,951
outstanding shares of our common stock.
How are
Votes Counted?
Under Delaware law and our Restated Certificate of Incorporation
and By-Laws, all votes entitled to be cast by shareholders
present in person or represented by proxy at the meeting and
entitled to vote on the subject matter, whether those
shareholders vote for, against or
abstain from voting, will be counted for purposes of determining
the minimum number of affirmative votes required for ratifying
the appointment of KPMG as our independent registered public
accounting firm. The shares of a shareholder who abstains from
voting on a matter or whose shares are not voted by reason of a
broker non-vote on a matter will be counted for purposes of
determining whether a quorum is present at the meeting. An
abstention from voting on a matter by a shareholder present in
person or represented by proxy at the meeting has no effect in
the election of directors, but has the same legal effect as a
vote against ratifying the appointment of KPMG as
our independent registered public accounting firm. A broker
non-vote on a matter is not deemed to be present or represented
by proxy for purposes of determining whether shareholder
approval of the matter is obtained and has no effect in the
election of directors or on ratifying the appointment of KPMG as
our independent registered public accounting firm.
Important
Notice Regarding the Availability of Proxy Materials for the
Shareholder Meeting to be Held on April 29, 2010.
The proxy statement and annual report to stockholders are
available at
http://bnymellon.mobular.net/bnymellon/orbc.
3
ELECTION
OF DIRECTORS (PROPOSAL 1)
Our Restated Certificate of Incorporation provides that the
board of directors will consist of three classes of directors,
as nearly equal in number as possible, serving staggered
three-year terms. One class of directors is elected each year
with terms extending to the third annual meeting after such
election.
The terms of the three directors in Class I expire at the
2010 Annual Meeting. The board has designated Didier Delepine,
Hans E. W. Hoffmann and Gary H. Ritondaro, upon the
recommendation of the Nominating and Corporate Governance
Committee, as nominees for election as directors at the 2010
Annual Meeting with terms expiring at the 2013 Annual Meeting of
Shareholders.
Proxies properly submitted will be voted at the meeting, unless
authority to do so is withheld, for the election of the three
nominees specified in Class I Nominees
for Election as Directors with Terms Expiring in 2013
below. If for any reason any of those nominees is not a
candidate when the election occurs (which is not expected),
proxies and shares properly authorized to be voted will be voted
at the meeting for the election of a substitute nominee as
selected by the board of directors, and the Company will provide
shareholders with the required biographical information of such
substitute nominee in advance of the meeting.
A plurality of the votes cast in person or by proxy at the
Annual Meeting and entitled to vote is required to elect
directors. Under the rules of the New York Stock Exchange,
brokers who hold shares in street name do not have
the authority to vote on the election of directors when they do
not receive instructions from beneficial owners. Accordingly, a
broker non-vote will not be counted as a vote to elect directors.
INFORMATION
AS TO NOMINEES FOR DIRECTORS AND CONTINUING DIRECTORS
For each director nominee and each continuing director, we have
stated the nominees or continuing directors name,
age and principal occupation; his position, if any, with the
Company; his period of service as a director of the Company; his
business experience for at least the past five years; other
directorships held; and the experiences, qualifications,
attributes or skills that led the Nominating and Corporate
Governance Committee to conclude that the person should serve as
a director of the Company. Each nominee for director has
consented to being named in this proxy statement and to serve as
a director if elected.
Class I Nominees for Election as Directors
With Terms Expiring at the 2013 Annual Meeting
|
|
|
Didier
Delepine |
Director Since May 2007 |
Age 62 |
Mr. Delepine is currently Chairman of the Board of Viatel
Ltd., Chairman of the Supervisory Board of OneAccess S.A., and a
director of Global Telecom & Technology, Inc.
Mr. Delepine served as President and Chief Executive
Officer of Equant (now Orange Business Services) (global data
networking and managed communications) from 1998 to 2003. From
1995 to 1998, Mr. Delepine served as President and Chief
Executive Officer of Equants network services division and
as Chairman and President of Equants Integration Services
division, Americas. From 1983 to 1995, Mr. Delepine held a
range of senior management positions at SITA, the global
telecommunications and technology organization supporting the
worlds airlines. Mr. Delepine was a director of
Intelsat, Ltd., a global provider of communications services,
from 2003 to 2005 and Eircom Group plc, an Irish communications
company, from 2003 to 2006. Mr. Delepines high level
managerial experience, service on various boards of directors,
strong operational expertise and experience and qualifications
noted above were among the factors considered by our board of
directors in selecting him to serve as a director.
|
|
|
Hans E.
W. Hoffmann |
Director Since November 2006 |
Age 76 |
Mr. Hoffmann currently serves as President of the Bremen
United States Center (international relations) and Vice
President of Bund der Steuerzahler Niedersachsen und Bremen e.v.
(tax policy), positions he has held since 2001.
Mr. Hoffmann was the President and Chief Executive Officer
of ORBCOMM LLC from 2001 to 2003. Prior to joining ORBCOMM LLC,
Mr. Hoffmann served as the President of STN Atlas
Elektronik GmbH, a 5,200 person Germany-based corporation
that manufactures products for the aerospace, navy
4
equipment and military markets, from 1994 to 1997.
Mr. Hoffmanns extensive experience with satellite
companies, strong background in the satellite industry and
experience and qualifications noted above were among the factors
considered by our board of directors in selecting him to serve
as a director.
|
|
|
Gary H.
Ritondaro |
Director Since November 2006 |
Age 63 |
Mr. Ritondaro is the Senior Vice President and Chief
Financial Officer of LodgeNet Interactive Corporation (largest
provider of media and connectivity solutions to the hospitality
industry), a position he has held since 2001, and has also
served as Senior Vice President, Finance, Information Systems
and Administration of LodgeNet since July 2002. Prior to joining
LodgeNet, Mr. Ritondaro served as Senior Vice President and
Chief Financial Officer for Mail-Well, Inc., an NYSE-listed
manufacturer of envelopes, commercial printing and labels, from
1999 to 2001. From 1996 to 1999, Mr. Ritondaro was Vice
President and Chief Financial Officer for Ferro Corporation, an
NYSE-listed international manufacturer of specialty plastics,
chemicals, colors, industrial coatings and ceramics.
Mr. Ritondaros significant financial expertise, broad
understanding of financial issues, significant experience
dealing with complex problems and experience and qualifications
noted above were among the factors considered by our board of
directors in selecting him to serve as a director.
Class II Continuing Directors With Terms
Expiring at the 2011 Annual Meeting
|
|
|
Marc J.
Eisenberg |
Director Since March 2008 |
Age 43 |
Mr. Eisenberg is our Chief Executive Officer, a position he
has held since March 2008. He served as our Chief Operating
Officer from February 2007 to March 2008. From June 2006 to
February 2007, he was our Chief Marketing Officer and from March
2002 to June 2006, he was our Executive Vice President, Sales
and Marketing. He was a member of the board of directors of
ORBCOMM Holdings LLC from May 2002 until February 2004. Prior to
joining ORBCOMM, from 1999 to 2001, Mr. Eisenberg was a
Senior Vice President of Cablevision Electronics Investments,
where among his duties he was responsible for selling
Cablevision services such as video and internet subscriptions
through its retail channel. From 1984 to 1999, he held various
positions, most recently as the Senior Vice President of Sales
and Operations with the consumer electronics company The Wiz,
where he oversaw sales and operations and was responsible for
over 2,000 employees and $1 billion a year in sales.
Mr. Eisenberg is the son of Jerome B. Eisenberg.
Mr. Eisenbergs significant and meaningful knowledge
of our Company, in-depth knowledge of our global operations and
experience and qualifications noted above were among the factors
considered by our board of directors in selecting him to serve
as a director.
|
|
|
Timothy
Kelleher |
Director Since March 2008 |
Age 47 |
Mr. Kelleher has been a member of our board of directors
since March 2008 and previously served as a member of our board
of directors from December 2005 to June 2007. He is a Managing
Member of PCG Capital Partners Advisors II LLC (investment
management), focusing on providing growth capital to established
companies, and was previously a Managing Director of Pacific
Corporate Group, which he joined in 2002. Prior to joining
Pacific Corporate Group, Mr. Kelleher was a Partner and
Senior Vice President at Desai Capital Management Incorporated
from 1992 to 2002 and held positions at Entrecanales, Inc., L.F.
Rothschild & Co. Incorporated and Arthur
Young & Co. Mr. Kellehers significant
financial expertise, significant board level experience helping
growth companies achieve their full potential and success
dealing with complex business and financial issues and
experience and qualifications noted above were among the factors
considered by our board of directors in selecting him to serve
as a director.
5
|
|
|
John
Major |
Director Since April 2007 |
Age 64 |
Mr. Major is President of MTSG (strategic consulting and
investment), which he founded in January 2003. From April 2004
to October 2006, Mr. Major also served as Chief Executive
Officer of Apacheta Corporation, a privately-held mobile,
wireless software company. From August 2000 until January 2003,
Mr. Major was Chairman and Chief Executive Officer of
Novatel Wireless, Inc., a wireless data access solutions
company. Prior to August 2000, he was the founder and Chief
Executive Officer of the Wireless Internet Solutions Group, a
strategic consulting firm. From November 1998 to November 1999,
Mr. Major was Chairman and Chief Executive Officer of
Wireless Knowledge, a joint venture of Qualcomm Incorporated and
Microsoft Corporation. From 1997 until 1998, he served as
President of the Wireless Infrastructure Division of Qualcomm.
Prior to that, for approximately 18 years, he held various
positions at Motorola, Inc., the most recent of which was Senior
Vice President and Chief Technology Officer. Mr. Major is
Chairman of the Board of Broadcom Corporation as well as a
director of Lennox International, Inc. and Littelfuse Inc.
Mr. Major was a director of Verilink Corporation from 1998
to 2007. Mr. Majors senior leadership positions at a
number of companies, strong operational expertise, strong
background in the technology sector and experience and
qualifications noted above were among the factors considered by
our board of directors in selecting him to serve as a director.
Class III Continuing Directors With Terms
Expiring at the 2012 Annual Meeting
|
|
|
Jerome B.
Eisenberg |
Director Since February 2004 |
Age 70 |
Mr. Eisenberg has been our non-executive Chairman of the
Board since March 2008. He served as our Chairman and Chief
Executive Officer from January 2006 to March 2008 and our Chief
Executive Officer and President from December 2004 to January
2006. Mr. Eisenberg has been a member of the board of
directors of ORBCOMM LLC and ORBCOMM Holdings LLC since 2001.
Between 2001 and December 2004, Mr. Eisenberg held a number
of positions with ORBCOMM Inc. and with ORBCOMM LLC, including
Co-Chief Executive Officer of ORBCOMM Inc. Mr. Eisenberg
has worked in the satellite industry since 1993 when he helped
found Satcom International Group plc. From 1987 to 1992, he was
President and CEO of British American Properties, an investment
company funded by European and American investors that acquired
and managed various real estate and industrial facilities in
various parts of the U.S. Prior thereto, Mr. Eisenberg
was a partner in the law firm of Eisenberg, Honig &
Folger; CEO and President of Helenwood Manufacturing Corporation
(presently known as Tennier Industries), a manufacturer of
equipment for the U.S. Department of Defense; and Assistant
Corporate Counsel for the City of New York. Mr. Eisenberg
is the father of Marc Eisenberg, a member of the board of
directors and our Chief Executive Officer. Since 2010, Mr.
Eisenberg is a director of GelTech Solutions, Inc.
Mr. Eisenbergs significant and meaningful knowledge
of our Company (as former senior management of the Company),
significant experience with the satellite industry and
experience and qualifications noted above were among the factors
considered by our board of directors in selecting him to serve
as a director.
|
|
|
Marco
Fuchs |
Director Since February 2004 |
Age 47 |
Mr. Fuchs has been a member of the board of directors of
ORBCOMM LLC since 2001 and of ORBCOMM Holdings LLC from 2001 to
February 2004. Mr. Fuchs is currently the Chief Executive
Officer and Chairman of the Managing Board of OHB Technology
A.G. (technology and space), positions he has held since 2000.
From 1995 to 2000, Mr. Fuchs worked at OHB Orbital
Hochtechnologie Bremen-System A.G., first as a Prokurist
(authorized signatory) and then as Managing Director. Prior to
that, he worked as a lawyer from 1992 to 1994 for Jones, Day,
Reavis & Pogue in New York, and from 1994 to 1995 in
Frankfurt am Main. Mr. Fuchs significant business and
operating experience with satellite companies, significant
experience with the satellite industry and experience and
qualifications noted above were among the factors considered by
our board of directors in selecting him to serve as a director.
6
|
|
|
Lt. Gen.
(Ret.) John R. Wood |
Director Since September 2009 |
Age 59 |
Mr. Wood has been a member of the board of directors of
ORBCOMM LLC since September 2009. Mr. Wood served over
thirty-six years as an officer in the United States Army,
retiring in January 2009. Mr. Wood served in roles of
increasing responsibility, including as the Commanding General,
2nd Infantry Division, the Director of Army Strategic Plans
and Policy, the Director of Joint Experimentation for the United
States Joint Forces Command and, most recently, the Deputy
Commander of the United States Joint Forces Command. Since
retirement from the Army in January 2009, Mr. Wood has
devoted his attention to the establishment of Star Strategies
Group LLC, a consulting practice. Mr. Woods extensive
military and government experience, demonstrated leadership
skills, high level of character and integrity and his experience
and qualifications noted above were among the factors considered
by our board of directors in selecting him to serve as a
director.
The board of directors recommends that you vote
FOR the election as directors of the three
Class I director nominees described above, which is
presented as Proposal 1.
7
BOARD OF
DIRECTORS AND COMMITTEES
Our business is managed under the direction of the board of
directors. Our board of directors has the authority to appoint
committees to perform certain management and administration
functions. We currently have an Audit Committee, a Compensation
Committee and a Nominating and Corporate Governance Committee,
composed of three members each.
The functions of each of our board committees are described
below. The duties and responsibilities of each committee are set
forth in committee charters that are available on our website at
www.orbcomm.com under the heading Investor Relations
and the subheading Corporate Governance. The
committee charters are also available in print to any
shareholder upon request. The board of directors held six
meetings during fiscal year 2010. All directors attended at
least 75% of all meetings of the board and those committees on
which they served. Directors are expected to attend the Annual
Meeting of Shareholders. All of the directors attended the 2009
Annual Meeting.
The board has reviewed the independence of its members
considering the independence criteria of The NASDAQ Stock
Market, or NASDAQ, and any other commercial, industrial,
banking, consulting, legal, accounting, charitable and familial
relationships between the directors and the Company. Based on
this review, the board has determined that none of the current
directors, other than Jerome B. Eisenberg (a former executive
officer and current employee of the Company), Marc J. Eisenberg
(an executive officer of the Company) and Marco Fuchs (a senior
executive of OHB Technology A.G., the supplier of the
Companys quick-launch satellite buses and integration and
launch services), has a material relationship with the Company
and each of Didier Delepine, Hans Hoffman, Timothy Kelleher,
John Major, Gary Ritondaro and John Wood meets the independence
requirements of NASDAQ.
The independent directors meet in executive session without the
presence of any executive officer or member of management at
least twice a year in conjunction with regular meetings of the
board. A director designated by the independent directors will
chair the session. The independent directors generally designate
the chairman of one of the board committees as chair, depending
upon whether the principal items to be considered at the session
are within the scope of the applicable committee.
Board Leadership Structure. The board does not
have a policy regarding the separation of the roles of Chief
Executive Officer and Chairman of the Board or whether the
Chairman should be a member of management or a non-management
director, as the board believes it is in the best interests of
the Company to make that determination based on the position and
direction of the Company and the membership of the board. In
2008, in connection with the transition of the Chief Executive
Officer position from Jerome Eisenberg to Marc Eisenberg, the
board determined that having Jerome Eisenberg continue in his
role as Chairman of the Board in a non-executive capacity would
provide continuity in the boards leadership and allow the
Chief Executive Officer to focus on the management of the
Companys
day-to-day
operations. In addition, as the former Chief Executive Officer,
Jerome Eisenberg has extensive knowledge of the Company and its
business and industry that are an invaluable resource for the
board. Although Jerome Eisenberg is not an independent director
due to his prior service as an executive officer and continued
employment in a non-executive capacity, the board believes that
this leadership structure is in the best interests of the
Companys shareholders at this time.
Audit Committee. The Audit Committee, among
other things:
|
|
|
|
|
reviews and oversees the integrity of our financial statements
and internal controls;
|
|
|
|
reviews the qualifications of and recommends to the board of
directors the selection of, our independent public accountants,
subject to ratification by our shareholders, and reviews and
approves their fees;
|
|
|
|
reviews and oversees the adequacy of our accounting and
financial reporting processes, including our system of internal
controls and disclosure controls, and recommendations of the
independent accountants with respect to our systems; and
|
|
|
|
reviews and oversees our compliance with legal and regulatory
requirements.
|
8
Gary Ritondaro, Didier Delepine and Hans Hoffmann currently
serve as members of our Audit Committee. Each member of our
Audit Committee meets the independence and financial literacy
requirements of NASDAQ, the SEC and applicable law. All members
of our Audit Committee are able to read and understand
fundamental financial statements. The board of directors has
determined that Gary Ritondaro is an audit committee
financial expert as defined by the SEC rules.
Mr. Ritondaro serves as chair of our Audit Committee. The
Audit Committee met five times during the 2009 fiscal year.
Compensation Committee. The Compensation
Committee, among other things:
|
|
|
|
|
reviews and approves corporate goals and objectives relevant to
the compensation of the Chief Executive Officer, evaluates the
performance of the Chief Executive Officer in light of these
goals and objectives and determines and approves the level of
the Chief Executive Officers compensation based on this
evaluation;
|
|
|
|
determines the base and incentive compensation of other senior
executives, and determines the terms of the employment of senior
executives, including the Chief Executive Officer;
|
|
|
|
reviews, administers, monitors and recommends to the board of
directors all executive compensation plans and programs,
including incentive compensation and equity-based plans; and
|
|
|
|
evaluates and makes recommendations regarding the compensation
of non-employee directors and administration of non-employee
director compensation plans or programs.
|
Hans Hoffmann, Timothy Kelleher, John Major and John Wood
currently serve as members of our Compensation Committee. Hans
Hoffman served as chair of our Compensation Committee until
January 2010. Effective February 1, 2010, Timothy Kelleher
serves as chair as of our Compensation Committee. Each member of
our Compensation Committee meets the independence requirement of
NASDAQ and applicable law. The Compensation Committee met four
times during the 2009 fiscal year.
For description of the role of our executive officers on
determining or recommending the amount or form of executive or
director compensation, see Compensation Discussion and
Analysis Role of Executives and Others in
Establishing Compensation.
Nominating and Corporate Governance
Committee. The Nominating and Corporate
Governance Committee, among other things:
|
|
|
|
|
reviews and recommends to the board of directors the size and
composition of the board, the qualification and independence of
the directors and the recruitment and selection of individuals
to serve as directors;
|
|
|
|
reviews and recommends to the board of directors the
organization and operation of the board of directors, including
the nature, size and composition of committees of the board, the
designation of committee chairs, the designation of a Chairman
of the Board or similar position, and the distribution of
information to the board and its committees;
|
|
|
|
coordinates an annual self-assessment by the board of its
operations and performance and the operations and performance of
the committees and prepares an assessment of the boards
performance for discussion with the board;
|
|
|
|
in coordination with the Compensation Committee, evaluates the
performance of the Chief Executive Officer in light of corporate
goals and objectives; and
|
|
|
|
oversees our corporate governance policies, practices and
programs.
|
John Major, Didier Delepine and Gary Ritondaro currently serve
as members of our Nominating and Corporate Governance Committee.
Each member of our Nominating and Corporate Governance Committee
meets the independence requirement of NASDAQ and applicable law.
John Major serves as chair of our Nominating and Corporate
Governance Committee. The Nominating and Corporate Governance
Committee met twice during the 2009 fiscal year.
9
The Nominating and Corporate Governance Committee, the Chairman
of the Board and the Chief Executive Officer or other members of
the board of directors may identify a need to add new members to
the board or to fill a vacancy on the board. In that case, the
committee will initiate a search for qualified director
candidates, seeking input from other directors, and senior
executives and, to the extent it deems appropriate, third party
search firms to identify potential candidates. The committee
will evaluate qualified candidates and then make its
recommendation to the board, for its consideration and approval.
In making its recommendations to the board, the committee will
consider the selection criteria for director candidates set
forth in our Board Membership Criteria (a copy of which is
available on our website at www.orbcomm.com under the heading
Investor Relations and the subheading
Corporate Governance), including the following:
|
|
|
|
|
each director should have high level managerial experience in a
relatively complex organization or be accustomed to dealing with
complex problems.
|
|
|
|
each director should be an individual of the highest character
and integrity, have experience at or demonstrated understanding
of strategy/policy-setting and reputation for working
constructively with others.
|
|
|
|
each director should have sufficient time available to devote to
the affairs of the Company in order to carry out the
responsibilities of a director.
|
|
|
|
each director should be free of any conflict of interest which
would interfere with the proper performance of the
responsibilities of a director.
|
While the board does not have a formal policy with respect to
diversity, it believes that it is essential that the directors
represent the balanced, best interests of the shareholders as a
whole, rather than special interest groups or constituencies,
and takes into consideration in assessing the overall
composition and needs of the board such factors as diversity of
professional experience, skills and background, age,
international background and specialized expertise. The
committee from time to time reviews with the board our Board
Membership Criteria in the context of current board composition
and the Companys circumstances.
In March 2010, the board, upon the recommendation of the
committee, adopted an amendment to our Corporate Governance
Guidelines to implement a director age policy, pursuant to which
any director who has achieved age 75 would be subject to an
annual review by the committee with respect to such
directors continued service on the board, considering any
factors or other information that is considered appropriate and
relevant, including the directors tenure, the
directors qualifications, the directors past and
expected contributions to the board, the overall composition of
the board and whether the directors resignation from the
board would be in the best interests of the Company and its
shareholders. The board, upon the recommendation of the
committee, will then decide whether or not to accept the
directors tendered resignation. Each nominee for director
who has achieved age 75 or would achieve age 75 during
his or her term if elected is required, upon his or her
election, to submit a resignation conditional upon the
boards acceptance in connection with the annual review.
Hans Hoffman, a Class I director nominee for election at
the Annual Meeting, is subject to this policy.
The Nominating and Corporate Governance Committee will consider
director candidates recommended by our shareholders for election
to the board of directors. Shareholders wishing to recommend
director candidates can do so by writing to the Secretary of
ORBCOMM Inc. at 2115 Linwood Avenue, Suite 100,
Fort Lee, New Jersey 07024. Shareholders recommending
candidates for consideration by the committee must provide each
candidates name, biographical data and qualifications. Any
such recommendation should be accompanied by a written statement
from the individual of his or her consent to be named as a
candidate and, if nominated and elected, to serve as a director.
The recommending shareholder must also provide evidence of being
a shareholder of record of our common stock at the time. The
committee will evaluate properly submitted shareholder
recommendations under substantially the same criteria and
substantially the same manner as other potential candidates.
In addition, our By-Laws establish a procedure with regard to
shareholder proposals for the 2011 Annual Meeting, including
nominations of persons for election to the board of directors,
as described below under Shareholder Proposals for Annual
Meeting in 2011.
10
Compensation Committee Interlocks and Insider
Participation. None of our executive officers
currently serves or served during 2009 as a director or member
of the compensation committee of another entity with an
executive officer who serves on our board of directors or our
Compensation Committee. For description of the members of our
Compensation Committee, see Board of Directors and
Committees Compensation Committee.
Standards of Business Conduct. The board of
directors has adopted a Standards of Business Conduct that is
applicable to all of our directors, officers and employees. Any
material changes made to the Standards of Business Conduct or
any waivers granted to any of our directors and executive
officers will be publicly disclosed in accordance with
applicable NASDAQ and SEC rules. A copy of our Standards of
Business Conduct is available on the Corporate Governance page
of our website at www.orbcomm.com or upon request, without
charge, by contacting our Investor Relations Department by
calling
703-433-6505.
Risk Oversight. The board of directors has an
active role, as a whole and also at the committee level, in
overseeing the management of our risks. The board has designated
the Audit Committee to take the lead in overseeing risk
management and pursuant to its charter, the Audit Committee
reviews and discusses with management the steps management has
taken to assess, monitor and control the Companys
strategic, operational, financial and compliance risks,
including guidelines and policies to govern the process by which
such risk assessment and risk management are undertaken. The
entire board is regularly informed by the Audit Committee on
these matters. Notwithstanding the Audit Committees
primary risk oversight role, the entire board is actively
involved in the oversight of the operational risks with respect
to the Companys current satellite constellation and
proposed next-generation satellites and receives regular
presentations from management regarding these matters.
Communications to the Board. Shareholders and
other interested parties may send communications to the board of
directors, an individual director, the non-management directors
as a group, or a specified committee at the following address:
ORBCOMM Inc.
c/o Corporate
Secretary
2115 Linwood Avenue, Suite 100
Fort Lee, NJ 07024
Attn: Board of Directors
The Secretary will receive and process all communications before
forwarding them to the addressee. The Secretary will forward all
communications unless the Secretary determines that a
communication is a business solicitation or advertisement, or
requests general information about us.
11
DIRECTOR
COMPENSATION
The following independent directors: Didier Delepine, Hans
Hoffmann, John Major, Gary Ritondaro and John Wood, each receive
an annual retainer of $35,000. In addition to the annual
retainer, each of these directors receives $3,000 annually for
each committee on which he serves or $10,000 annually for
service as the chair of a committee. Each of these directors
receives an attendance fee of $1,000 for each committee meeting.
None of Messrs. Marco Fuchs, Timothy Kelleher, Marc
Eisenberg and Jerome Eisenberg received any retainer or
committee fees for their service on the board of directors and
committees in 2009. However, beginning in 2010,
Mr. Kelleher will receive retainer and committee fees for
his service on the board of directors and committees. All
directors are reimbursed for reasonable expenses incurred to
attend meetings of the board of directors. On February 2,
2009, we granted an award of 19,335 time-based restricted stock
units, or RSUs, with a value of $30,000 (based on the closing
price of our common stock of $1.55 per share on February 2,
2009) to each of Messrs. Delepine, Hoffmann, Major and
Ritondaro. On January 1, 2010, these time-based awards
vested. On February 1, 2010, we granted an award of 13,215
time-based RSUs with a value of $30,000 (based on the closing
price of our common stock of $2.27 per share on February 1,
2010) to each of Messrs. Delepine, Hoffmann, Kelleher,
Major, Ritondaro and Wood. These RSUs will vest on
January 1, 2011.
Under the terms of our directors deferred compensation
arrangements, a non-employee director may elect to defer all or
part of the cash payment of director retainer fees until such
time as shall be specified, with interest on deferred amounts
accruing quarterly at 120% of the Federal long-term rate set
each month by the U.S. Treasury Department. Each member of
the Audit Committee also has the alternative each year to
determine whether to defer all or any portion of his or her cash
retainer fees for Audit Committee service by electing to receive
shares or restricted shares of our common stock valued at the
closing price of our common stock on NASDAQ on the date each
retainer payment would otherwise be made in cash.
Director
Compensation for Fiscal Year 2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fees Earned or Paid
|
|
|
|
All Other
|
|
|
Name
|
|
in Cash
|
|
Stock Awards(1)
|
|
Compensation
|
|
Total
|
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
Jerome Eisenberg
|
|
|
337,813
|
(2)
|
|
|
|
|
|
|
11,618
|
(3)
|
|
|
349,431
|
|
Didier Delepine
|
|
|
58,184
|
|
|
|
30,000
|
|
|
|
|
|
|
|
88,184
|
|
Hans Hoffmann
|
|
|
67,867
|
|
|
|
30,000
|
|
|
|
|
|
|
|
97,867
|
|
John Major
|
|
|
64,867
|
|
|
|
30,000
|
|
|
|
|
|
|
|
94,867
|
|
Gary Ritondaro
|
|
|
66,867
|
|
|
|
30,000
|
|
|
|
|
|
|
|
96,867
|
|
John Wood
|
|
|
12,688
|
(4)
|
|
|
|
|
|
|
|
|
|
|
12,688
|
|
Marco Fuchs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Timothy Kelleher
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
The amounts shown in the Stock Awards column
represent the full grant date fair value of the RSU awards
computed in accordance with FASB ASC Topic 718,
Compensation Stock Compensation. For a
discussion of assumptions used to calculate the grant date fair
value of the RSU awards shown in the table, see Note 6 to
our consolidated financial statements included in our Annual
Report of
Form 10-K
for the year ended December 31, 2009. |
|
(2) |
|
The amount includes an annual base salary of $217,750, and a
one-time cash payment of $116,250 and interest thereon of $3,813
in connection with Mr. Eisenbergs transition from
Chairman and Chief Executive Officer to non-executive Chairman
of the Board under his employment agreement. |
|
(3) |
|
The amount represents payment for life insurance premiums. |
|
(4) |
|
The amount includes the pro rated amount of the annual retainer
for services as a director for Mr. Wood, who became a
director in September 2009. |
12
AUDIT
COMMITTEE REPORT
The Audit Committee assists the board of directors in overseeing
the accounting and financial reporting processes of the Company,
the audits of the financial statements, compliance with legal
and regulatory requirements and the qualifications, independence
and performance of its independent registered public accounting
firm.
Our roles and responsibilities are set forth in a written
charter adopted by the board, which is available on the
Companys website at www.orbcomm.com under the heading
Investor Relations and the subheading
Corporate Governance. We review and reassess the
charter annually, and more frequently as necessary, to address
any changes in NASDAQ corporate governance and SEC rules
regarding audit committees, and recommend any changes to the
board of directors for approval.
Management is responsible for the preparation, presentation and
integrity of the Companys financial statements. Management
is also responsible for establishing and maintaining adequate
internal control over financial reporting and evaluating the
effectiveness of the Companys internal control over
financial reporting. The Companys independent registered
public accounting firm, KPMG LLP (KPMG), is responsible for
performing an independent audit of the Companys financial
statements and expressing an opinion on the conformity of those
financial statements with accounting principles generally
accepted in the United States. KPMG is also responsible for
expressing an opinion on the effectiveness of the Companys
internal control over financial reporting.
We are responsible for overseeing the Companys accounting
and financial reporting processes. In fulfilling our
responsibilities for the accounting and financial processes for
fiscal year 2009, we:
|
|
|
|
|
reviewed and discussed the audited financial statements for the
fiscal year ended December 31, 2009 with management and
KPMG;
|
|
|
|
reviewed and discussed managements assessment of the
effectiveness of the Companys internal control over
financial reporting pursuant to Section 404 of the
Sarbanes-Oxley Act of 2002 for the fiscal year ended
December 31, 2009 and KPMGs audit report on the
effectiveness of internal control over financial reporting;
|
|
|
|
discussed with KPMG the matters required to be discussed by the
Statement on Auditing Standards No. 61, as amended, as
adopted by the Public Company Accounting Oversight Board in
Rule 3200T; and
|
|
|
|
received the written disclosures and correspondence from KPMG
required by applicable requirements of the Public Company
Accounting Oversight Board regarding KPMGs communications
with the Audit Committee concerning independence. We also
discussed with KPMG its independence.
|
For information on fees paid to KPMG in fiscal 2009 and to
Deloitte & Touche LLP, the Companys former
independent registered public accounting firm, for each of
fiscal 2009 and 2008, see Proposal to Ratify the
Appointment of Independent Registered Public Accounting Firm
(Proposal 2).
We reviewed and approved all audit and audit-related fees and
services. The Company is not using KPMG for non-audit related
services. In fulfilling our responsibilities, we met with KPMG,
with and without management present, to discuss the results of
their audit and the overall quality of the Companys
financial reporting and internal control environment. We
considered the status of pending litigation, taxation matters
and other areas of oversight relating to the financial reporting
and audit process that we determined appropriate.
Based on our review of the audited financial statements and
discussions with, and the reports of, management and KPMG, we
recommended to the board of directors that the audited financial
statements be included in the Companys Annual Report on
Form 10-K
for the fiscal year ended December 31, 2009 for filing with
the SEC.
The Audit Committee has appointed KPMG as the independent
registered public accounting firm of the Company for the fiscal
year ending December 31, 2010, subject to the ratification
of shareholders.
Audit Committee
Gary Ritondaro, Chairman
Didier Delepine
Hans E. W. Hoffmann
13
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table shows the beneficial ownership, reported to
us as of March 15, 2010, of our common stock, including
shares as to which a right to acquire ownership within
60 days exists (for example, through the exercise of stock
options) of each director, each nominee for director, each named
executive officer, of such persons and other executive officers
as a group and of beneficial owners of 5% or more of our common
stock. The business address of the named executive officers and
directors is
c/o ORBCOMM
Inc., 2115 Linwood Avenue, Suite 100, Fort Lee, NJ
07024. As of March 15, 2010, there were 42,562,951
outstanding shares of our common stock.
|
|
|
|
|
|
|
|
|
|
|
Shares of
|
|
|
|
|
Common Stock
|
|
Percentage of Total
|
Name of Beneficial Owner
|
|
Owned(1)
|
|
Common Stock Held
|
|
Greater than 5% Stockholders
|
|
|
|
|
|
|
|
|
PCG Satellite Investments LLC(2)
|
|
|
4,116,383
|
|
|
|
9.7
|
%
|
OHB Technology A.G.(3)
|
|
|
2,229,103
|
|
|
|
5.2
|
%
|
Named Executive Officers and Directors
|
|
|
|
|
|
|
|
|
Jerome B. Eisenberg(8)
|
|
|
1,417,267
|
|
|
|
3.3
|
%
|
Marc Eisenberg(4)
|
|
|
802,157
|
|
|
|
1.9
|
%
|
Robert G. Costantini(5)
|
|
|
362,797
|
|
|
|
1.0
|
%
|
John J. Stolte, Jr.(6)
|
|
|
174,822
|
|
|
|
*
|
|
Christian G. Le Brun(7)
|
|
|
165,092
|
|
|
|
*
|
|
Didier Delepine
|
|
|
26,468
|
|
|
|
*
|
|
Marco Fuchs(3)
|
|
|
2,229,103
|
|
|
|
5.2
|
%
|
Hans E. W. Hoffmann
|
|
|
83,002
|
|
|
|
*
|
|
Timothy Kelleher(9)
|
|
|
4,116,383
|
|
|
|
9.7
|
%
|
John Major
|
|
|
26,468
|
|
|
|
*
|
|
Gary H. Ritondaro
|
|
|
26,468
|
|
|
|
*
|
|
John Wood
|
|
|
|
|
|
|
*
|
|
All executive officers and directors as a group (12 persons)
|
|
|
9,430,047
|
|
|
|
21.3
|
%
|
|
|
|
* |
|
Represents beneficial ownership of less than 1% of the
outstanding shares of common stock. |
|
(1) |
|
Unless otherwise indicated, the amounts shown as being
beneficially owned by each stockholder or group listed above
represent shares over which that stockholder or group holds sole
investment power. |
|
(2) |
|
The managing member of PCG Satellite Investments LLC is
CalPERS/PCG Corporate Partners, LLC, whose manager is PCG
Corporate Partners Investments LLC. PCG Corporate Partners
Investments LLC is owned and managed by Pacific Corporate Group
Holdings, LLC. Pacific Corporate Group Holdings, LLC is owned
and managed by Christopher J. Bower. Timothy Kelleher, a
director of the Company, is a Managing Director of Pacific
Corporate Group Holdings, LLC, which is an affiliate of PCG
Satellite Investments LLC. PCG Satellite Investments LLCs
address is 1200 Prospect Street, Suite 200, La Jolla,
California 92037. |
|
(3) |
|
Includes 2,168,779 shares of common stock held by OHB
Technology A.G., and 60,324 shares of common stock held by
ORBCOMM Deutschland A.G. Marco Fuchs, one of our directors, is
Chief Executive Officer of OHB Technology A.G. which owns
ORBCOMM Deutschland A.G. Manfred Fuchs, Marco Fuchs and Christa
Fuchs hold voting and investment power with regard to the shares
held by OHB Technology A.G. and ORBCOMM Deutschland A.G. OHB
Technology A.G.s address is Universitaetsalle
27-29,
Bremen, D-28539, Germany. |
|
(4) |
|
Includes 164,180 shares of common stock held by Marc
Eisenberg. Also includes 280,003 shares of common stock
issuable to Mr. Eisenberg upon the exercise of options and
357,974 shares of common stock underlying SARs, in each
case, that are currently exercisable. |
14
|
|
|
(5) |
|
Includes 93,158 shares of common stock held by Robert G.
Costantini. Also includes 269,639 shares of common stock
underlying SARs that are currently exercisable. |
|
(6) |
|
Includes 33,820 shares of common stock held by John J.
Stolte, Jr. Also includes 51,002 shares of common stock
issuable to Mr. Stolte upon exercise of options and
90,000 shares of common stock underlying SARs, in each
case, that are currently exercisable. |
|
(7) |
|
Includes 25,092 shares of common stock held by Christian G.
Le Brun. Also includes 50,000 shares of common stock
issuable to Mr. Le Brun upon exercise of options and
90,000 shares of common stock underlying SARs, in each
case, that are currently exercisable. |
|
(8) |
|
Includes 931,317 shares of common stock held by Jerome B.
Eisenberg and 15,759 shares of common stock held by Cynthia
Eisenberg, Mr. Eisenbergs wife. Also includes
300,003 shares of common stock issuable to
Mr. Eisenberg upon exercise of options and
170,188 shares of common stock underlying SARs, in each
case, that are currently exercisable. |
|
(9) |
|
Mr. Kelleher is a Managing Director of Pacific Corporate
Group Holdings, LLC, which is an affiliate of PCG Satellite
Investments LLC. See Note (2) above. |
15
COMPENSATION
DISCUSSION AND ANALYSIS
The following Compensation Discussion and Analysis describes the
material elements of compensation for our executive officers
identified in the Summary Compensation Table (our Named
Executive Officers).
Compensation
Committee
Our Compensation Committee assists our board of directors in
fulfilling its responsibilities with respect to oversight and
determination of executive compensation and human resources
matters, including the compensation of the Named Executive
Officers. A description of the Compensation Committees
composition, functions, duties and responsibilities is set forth
in this proxy statement under Board of Directors and
Committees Compensation Committee.
The Compensation Committees roles and responsibilities are
set forth in a written charter which is available on our website
at www.orbcomm.com under the heading Investor
Relations and the subheading Corporate
Governance and is available in print to any shareholder
upon request.
Philosophy
and Objectives of Compensation Programs
Our executive compensation philosophy is to create a system that
rewards executives for performance and focuses our management
team on the critical short-term and long-term objectives. The
primary objectives of our executive compensation programs are to
attract, motivate and retain talented and dedicated executives,
to link annual and long-term cash and stock incentives to
achievement of specified performance objectives, and to align
executives incentives with stockholder value creation. To
achieve these objectives, the Compensation Committee has
implemented compensation programs that make a substantial
portion of the executives overall compensation contingent
upon achieving key short-term business and long-term strategic
goals established by our board of directors or the Compensation
Committee, such as the expansion of our communications system,
including network improvements and upgrades, the establishment
and maintenance of key strategic relationships, as well as our
financial and operational performance, as measured by metrics
such as adjusted EBITDA (defined as EBITDA, less stock-based
compensation), revenues, net number of satellite subscriber
communicators added to our communications system (net satellite
subscriber additions) and net number of terrestrial subscriber
communicators added to our communications system (net
terrestrial subscriber additions). The Compensation
Committees goal is to set executive compensation at levels
the committee believes are competitive against compensation
offered by other rapidly growing companies of similar size and
stage of development against whom we compete for executive
talent in the communications industry, while taking into account
our performance and our own strategic goals.
We seek to provide executive compensation that is competitive in
order to attract, motivate and retain key talent. We aim to
reward executives for achieving goals designed to generate
returns for our stockholders, but not for poor performance, by
linking compensation to overall business performance and the
achievement of performance goals. As a result, we believe that
compensation packages provided to our executives, including our
Named Executive Officers, should include both cash and
stock-based compensation that reward performance as measured
against performance goals.
We have not retained a compensation consultant to review our
policies and procedures with respect to executive compensation,
and do not seek to set our executive compensation to any
specific external benchmarks or peer group. Instead, we use
general competitive market data available to us relating to
compensation levels, mix of elements and compensation strategies
being used by companies of comparable size and stage of
development operating in the communications industry, and review
such data against the aggregate level of our executive
compensation, as well as the mix of elements used to compensate
our executive officers.
Elements
of Compensation
Base Salary. Base salaries are determined on
an individual basis, are based on job responsibilities and
individual contribution and are intended to provide our
executives with current income. Base salaries for our
16
Named Executive Officers are reviewed annually and may be
adjusted to reflect any changes in job responsibilities and
individual contribution, as well as competitive conditions in
the market for executive talent. Our senior management proposes
new base salary amounts to the Compensation Committee for
approval based on: an evaluation of individual performance and
expected future contributions; a goal to ensure competitive
compensation against the external market; and comparison of the
base salaries of the executive officers who report directly to
our Chief Executive Officer to ensure internal equity.
The base salaries of Messrs. Eisenberg, Costantini, Stolte
and Le Brun were established pursuant to employment agreements
entered into by the individual Named Executive Officer and us in
2008, and for Mr. Bell an employment agreement entered into
in 2009.
Annual Cash Bonus. Annual cash bonuses are
designed to align employees goals with the Companys
financial and operational objectives for the current year and to
reward individual performance. These objectives vary depending
on the individual employee, but generally relate to strategic
factors such as communications system expansion, including
execution of a launch services contract for the next-generation
satellites, network operational improvements and upgrades,
international gateway installation, regulatory approvals,
international licenses and government business. These objectives
also include financial and operational performance targets such
as revenues, adjusted EBITDA, net satellite and terrestrial
subscriber additions and reductions in certain expense
categories. These performance measures are primarily objective
criteria that can be readily measured and do not require
subjective determinations. Pursuant to their employment
agreements, each Named Executive Officer is generally eligible
to receive annual bonuses, payable in cash based on a percentage
of base salary (which may, in some cases, exceed 100%) and
dependent upon achieving or exceeding certain performance
targets for that fiscal year.
For 2009, bonuses were not generally earned unless at least 90%
(or 100% for certain performance metrics) of the applicable
performance target was met for fiscal year 2009. Certain 2009
annual bonuses were based on achieving certain operational
milestones by specified dates. For 2009, the annual bonus
payable for each Named Executive Officer was allocated with
respect to specified performance targets as set forth in the
following table:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marc
|
|
Robert
|
|
John
|
|
Christian
|
|
Brian
|
Performance targets
|
|
Eisenberg
|
|
Costantini
|
|
Stolte
|
|
Le Brun
|
|
Bell
|
|
Adjusted EBITDA
|
|
|
25
|
%
|
|
|
40
|
%
|
|
|
10
|
%
|
|
|
5
|
%
|
|
|
25
|
%
|
Net satellite subscriber additions
|
|
|
25
|
%
|
|
|
20
|
%
|
|
|
5
|
%
|
|
|
5
|
%
|
|
|
35
|
%
|
Net terrestrial subscriber additions
|
|
|
5
|
%
|
|
|
5
|
%
|
|
|
|
|
|
|
|
|
|
|
5
|
%
|
Revenues
|
|
|
15
|
%
|
|
|
10
|
%
|
|
|
5
|
%
|
|
|
5
|
%
|
|
|
20
|
%
|
Execution of launch services contract for
next-generation
satellites
|
|
|
10
|
%
|
|
|
10
|
%
|
|
|
30
|
%
|
|
|
10
|
%
|
|
|
|
|
Government business
|
|
|
5
|
%
|
|
|
5
|
%
|
|
|
5
|
%
|
|
|
5
|
%
|
|
|
|
|
Regulatory approvals
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15
|
%
|
|
|
|
|
Network operational improvements
|
|
|
|
|
|
|
|
|
|
|
20
|
%
|
|
|
|
|
|
|
|
|
International gateway installation
|
|
|
|
|
|
|
|
|
|
|
10
|
%
|
|
|
15
|
%
|
|
|
|
|
Legal expense reduction
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10
|
%
|
|
|
|
|
International licenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10
|
%
|
|
|
|
|
Network upgrade
|
|
|
|
|
|
|
|
|
|
|
5
|
%
|
|
|
|
|
|
|
|
|
Other operational targets
|
|
|
15
|
%
|
|
|
10
|
%
|
|
|
10
|
%
|
|
|
20
|
%
|
|
|
15
|
%
|
For Messrs. Eisenberg and Costantini, the payout amounts
for each target were based on a threshold payout amount of 18%
of base salary for achieving 90% of target, a lower limit payout
amount of 40% of base salary for achieving 100% of target, an
upper limit payout amount of 80% of base salary for achieving
117% of target and a maximum payout amount of 140% of base
salary for achieving 133% of target. For Messrs. Stolte, Le
Brun and Bell, the payout amounts for each target were based on
a lower limit payout amount of 37.5% of base salary for
achieving 100% of target and an upper limit payout amount of 75%
of base salary for achieving 117% of target and there were no
threshold or maximum payout amounts.
17
We believe that our performance targets are established at
levels that are achievable. By providing for significant
incentives for exceeding those targets, we motivate our Named
Executive Officers to achieve strategic business objectives that
result in the creation of value to us and our stockholders over
the long-term.
In March 2010, our Compensation Committee determined that
performance-based annual incentive awards (applying the
percentages for each component set for in the table above)
relating to:
|
|
|
|
|
the adjusted EBITDA target had been earned during 2009 at the
maximum payout amount (at 140% of base salary) based on
achieving performance above 133% of the target for
Messrs. Eisenberg and Costantini and the maximum payout
amount (at 75% of base salary) based on achieving performance
above 117% of the target for Messrs. Stolte, Le Brun and
Bell;
|
|
|
|
the net terrestrial subscriber additions target had been earned
during 2009 at the maximum payout amount (at 140% of base
salary) based on achieving performance above 133% of the target
for Messrs. Eisenberg and Costantini and the maximum payout
amount (at 75% of base salary) based on achieving performance
above 117% of the target for Messrs. Stolte, Le Brun and
Bell;
|
|
|
|
the execution of launch services contract for the
next-generation satellites target had been earned during 2009 at
the lower limit payout amount (at 40% of base salary) based on
achieving performance at 100% of the target for
Messrs. Eisenberg and Costantini and the lower limit payout
amount (at 37.5% of base salary) based on achieving performance
at 100% for Messrs. Stolte and Le Brun;
|
|
|
|
the government business target had been earned during 2009 at
the upper limit payout amount (at 80% of base salary) based on
achieving performance at 117% of the target for
Messrs. Eisenberg and Costantini and the upper limit payout
amount (at 75% of base salary) based on achieving performance at
117% of the target for Messrs. Stolte and Le Brun;
|
|
|
|
the legal expense reduction target had been earned during 2009
at the upper limit payout amount (at 75% of base salary) based
on achieving performance at 117% of the target for Mr. Le
Brun;
|
|
|
|
the international licenses target had been earned during 2009 at
the lower limit payout amount (at 37.5% of base salary) based on
achieving performance at 100% of the target for Mr. Le Brun;
|
|
|
|
the network upgrade target had been earned during 2009 at the
upper limit payout amount (at 75% of base salary) based on
achieving performance at 117% of the target for Mr. Stolte;
|
|
|
|
the net satellite subscriber additions target was not earned
based on not achieving at least 90% of the target during 2009;
|
|
|
|
the revenue target was not earned based on not achieving at
least 90% of the target during 2009;
|
|
|
|
the network operational improvement target was not earned based
on not achieving 100% of the target during 2009; and
|
|
|
|
certain other operational targets were not earned based on not
achieving the targets during 2009.
|
In March 2010, our Compensation Committee established 2010
operational and financial performance targets for which annual
bonuses will be paid to Messrs. Eisenberg, Costantini,
Stolte, Le Brun and Bell based on achieving financial and
performance targets and certain operational milestones by
specific dates. For Messrs. Eisenberg and Costantini, the
amounts for each target are based on a payout amount of 40% of
base salary for achieving 100% of a lower target, a payout
amount of 80% of base salary for achieving 100% of an upper
target and a maximum payout amount of 140% of base salary for
achieving 133% of the upper target. For Messrs. Stolte, Le
Brun and Bell, the amounts for each target are based on a payout
amount of 37.5% of base salary for achieving 100% of a lower
target and a payout amount of 75% of base salary for achieving
100% of an upper target. In addition, the Compensation Committee
may, at its sole discretion, award to the Named Executive
Officers an additional bonus of 15% to 30% of base salary based
on achievement of key projects. For 2010, the annual bonus
payable for each of Messrs. Eisenberg, Costantini, Stolte,
Le Brun and
18
Bell was allocated applying the percentage for each component
with respect to specified performance targets as set forth in
the following table:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marc
|
|
Robert
|
|
John
|
|
Christian
|
|
Brian
|
Performance targets
|
|
Eisenberg
|
|
Costantini
|
|
Stolte
|
|
Le Brun
|
|
Bell
|
|
Adjusted EBITDA, excluding AIS business
|
|
|
22
|
%
|
|
|
25
|
%
|
|
|
15
|
%
|
|
|
15
|
%
|
|
|
20
|
%
|
Net satellite subscriber additions
|
|
|
8.5
|
%
|
|
|
7.75
|
%
|
|
|
5
|
%
|
|
|
5
|
%
|
|
|
30
|
%
|
Net terrestrial subscriber additions
|
|
|
3.5
|
%
|
|
|
3.5
|
%
|
|
|
5
|
%
|
|
|
|
|
|
|
5
|
%
|
Revenues
|
|
|
8.5
|
%
|
|
|
7.75
|
%
|
|
|
|
|
|
|
5
|
%
|
|
|
15
|
%
|
First launch of next-generation satellites manufactured
|
|
|
5
|
%
|
|
|
5
|
%
|
|
|
13.4
|
%
|
|
|
5
|
%
|
|
|
|
|
Next-generation satellites launch vehicle completed as scheduled
|
|
|
5
|
%
|
|
|
5
|
%
|
|
|
13.3
|
%
|
|
|
5
|
%
|
|
|
|
|
Reseller agreements
|
|
|
3.5
|
%
|
|
|
3.5
|
%
|
|
|
|
|
|
|
5
|
%
|
|
|
15
|
%
|
Government business
|
|
|
3.5
|
%
|
|
|
2.5
|
%
|
|
|
|
|
|
|
|
|
|
|
5
|
%
|
Regulatory approvals
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6
|
%
|
|
|
|
|
Network operational improvements
|
|
|
|
|
|
|
|
|
|
|
5
|
%
|
|
|
|
|
|
|
|
|
International gateway installation
|
|
|
|
|
|
|
|
|
|
|
5
|
%
|
|
|
9
|
%
|
|
|
|
|
Satellite and terrestrial subscriber disconnects
|
|
|
5
|
%
|
|
|
5
|
%
|
|
|
13.3
|
%
|
|
|
|
|
|
|
|
|
International licenses
|
|
|
5
|
%
|
|
|
5
|
%
|
|
|
|
|
|
|
10
|
%
|
|
|
|
|
Commerical agreement with an international partner
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5
|
%
|
|
|
|
|
International gateway earth station agreement
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5
|
%
|
|
|
|
|
Discretionary
|
|
|
25
|
%
|
|
|
25
|
%
|
|
|
20
|
%
|
|
|
20
|
%
|
|
|
10
|
%
|
Other operational targets
|
|
|
5.5
|
%
|
|
|
5
|
%
|
|
|
5
|
%
|
|
|
5
|
%
|
|
|
|
|
Long-Term Equity-Based Incentives. In addition
to the short-term cash compensation payable to our Named
Executive Officers, our Compensation Committee believes that the
interests of our stockholders are best served when a substantial
portion of our Named Executive Officers compensation is
comprised of equity-based and other long-term incentives that
appreciate in value contingent upon increases in the share price
of our common stock and other indicators that reflect
improvements in business fundamentals. Therefore, it is our
Compensation Committees intention to make grants of
equity-based awards to our Named Executive Officers and other
key employees at such times and in such amounts as may be
required to accomplish the objectives of our compensation
programs. In 2009, in view of the uncertain global economic
environment and its impact on our own business outlook, we did
not make any equity based awards to our Named Executive
Officers, other than to Mr. Bell in connection with his
joining the Company. Please see the Grants of Plan-Based Awards
Table and accompanying narrative disclosures set forth in this
proxy statement for more information regarding the grants of
equity-based awards to our Named Executive Officers in fiscal
year 2009. We have not timed grants of equity-based awards in
coordination with the release of non-public information nor have
we timed the release of non-public information for the purpose
of affecting the value of executive compensation.
Under the 2006 LTIP, the Compensation Committee has the ability
to provide a number of equity-based awards, including restricted
stock units (RSUs), stock appreciation rights
(SARs), stock options, stock, restricted stock,
performance units and performance shares to promote our
long-term growth and profitability. Following adoption of the
2006 LTIP, we ceased to grant additional stock options under the
2004 Stock Option Plan. The 2004 Stock Option Plan will continue
to govern all stock option awards granted under the 2004 Stock
Option Plan prior to the adoption of the 2006 LTIP. Since
adopting the 2006 LTIP, we have changed the mix of our
equity-based incentives from stock options to a mix of RSUs and
SARs. In 2010, we further shifted our equity-based incentives to
primarily SARs to better align the Named Executive
Officers incentive compensation to the appreciation of the
Companys common stock. This combination of equity-based
incentives is intended to benefit stockholders by enabling us to
better attract and retain top talent in a
19
marketplace where such incentives are prevalent. We believe that
SARs provide an effective vehicle for promoting a long-term
share ownership perspective for our senior management and
employees and closely align the interests of senior management
and employees with our achievement of longer-term financial
objectives that enhance stockholder value, while at the same
time limiting the dilutive effects of such equity-based awards
relative to our prior practice of granting stock options and
RSUs. We have not adopted stock ownership guidelines, and our
stock compensation plans have provided the principal method for
our executive officers to acquire equity or equity-based
interests in us.
SARs. A stock appreciation right, or SAR, is
the right to receive a payment measured by the increase in the
fair market value of a specified number of shares of our common
stock from the date of grant of the SAR to the date on which the
participant exercises the SAR. Under the 2006 LTIP, SARs may be
(1) freestanding SARs or (2) tandem SARs granted in
conjunction with an option, either at the time of grant of the
option or at a later date, and exercisable at the
participants election instead of all or any part of the
related option. Upon the exercise of a SAR, we will deliver
cash, shares of our common stock valued at fair market value on
the date of exercise or a combination of cash and shares of our
common stock, as the Compensation Committee may determine.
Vested and unvested SARs granted to certain of our employees,
including our Named Executive Officers, are subject to
forfeiture in the event such employees breach the
non-competition
and/or
non-solicitation covenants set forth in their award agreements
and unvested SARs are subject to cancellation if, prior to
vesting, such employees ceased to be employed by us for any
reason.
Time-based SARs typically vest in three equal installments based
on continued employment over a three-year period. On
March 3, 2010, the Compensation Committee granted
Mr. Eisenberg 150,000 time-based SARs and to each of
Messrs. Costantini, Stolte, Le Brun and Bell 75,000
time-based SARs under the 2006 LTIP. For each of the Named
Executive Officers, the time-based SARs have a base price of
$2.46 per share, the fair market value of our common stock on
the date of grant, and will vest in three equal installments on
December 31, 2010, 2011 and 2012.
On March 3, 2010, the Compensation Committee granted
performance-based SARs under the 2006 LTIP relating to 2010
operational and financial performance targets that we believe
are important to our long-term success, including revenues,
adjusted EBITDA targets, net satellite and terrestrial
subscriber additions on our network and expansion of our
communications system with regard to preparation of the launch
of our next-generation satellites. The Compensation Committee,
on the recommendation of management, linked target performance
levels to these measures, as we believe that each of them is an
important factor in our revenue growth and for sustaining our
business model. The Compensation Committee granted
Mr. Eisenberg 50,000 performance-based SARs and to each of
Messrs. Costantini, Stolte, Le Brun and Bell 25,000
performance-based SARs. For each of the Named Executive Officers
the performance-based awards have a base price of $2.46 per
share, the fair market value of our common stock on the date of
grant. The 2010 performance-based SARs will vest in March 2011
dependent upon achieving specified operational and financial
performance targets as determined by Compensation Committee.
Each of the performance targets and the percentages for each
component for fiscal 2010 performance targets with respect to
Messrs. Eisenberg, Costantini, Stolte, Le Brun and
Bell were the same as those for their annual 2010 cash bonuses
described above.
In addition, in March 2010, the Compensation Committee approved
the proposal to grant performance-based SARs in 2011 and 2012 of
50,000 each year to Mr. Eisenberg and 25,000 each year to
each of Messrs. Costantini, Stolte, Le Brun and Bell, which
grants shall be subject to further action by the Compensation
Committee to approve such grants in connection with establishing
the vesting performance targets for each of fiscal years 2011
and 2012. The base price of the performance-based SARs to be
granted in 2011 and 2012 will equal the fair market value of our
common stock on the grant date upon the Compensation Committee
establishing the respective performance targets for those fiscal
years.
We believe that the vesting periods in connection with these
time-based and performance-based SAR awards are appropriate for
the following reasons:
|
|
|
|
|
they are intended to help retain employees, including
executives, by rewarding them for extended, continuous service
with us;
|
20
|
|
|
|
|
they are time periods that incentivize and focus executives on
the long-term performance of our business over reasonable
timeframes, while minimizing the potential that longer vesting
periods might dilute the motivation of the executives; and
|
|
|
|
they allow the Compensation Committee to formulate performance
targets annually that are aligned with our dynamic business
plans and external factors.
|
RSUs. A restricted stock unit, or RSU, is a
contractual right to receive at a specified future vesting date
an amount in respect of each RSU based on the fair market value
on such date of one share of our common stock, subject to such
terms and conditions as the Compensation Committee may
establish. RSUs that become payable in accordance with their
terms and conditions will be settled in cash, shares of our
common stock, or a combination of cash and our common stock, as
determined by the Compensation Committee. The Compensation
Committee has determined that all currently outstanding RSUs
will be settled in shares of common stock. The Compensation
Committee may provide for the accumulation of dividend
equivalents in cash, with or without interest, or the
reinvestment of dividend equivalents in our common stock held
subject to the same conditions as the RSU and such terms and
conditions as the Compensation Committee may determine. No
participant who holds RSUs will have any ownership interest in
the shares of common stock to which such RSUs relate until and
unless payment with respect to such RSUs is actually made in
shares of common stock. Vested and unvested RSUs awarded to
certain of our employees, including our Named Executive
Officers, will be subject to forfeiture in the event such
employees breach their non-competition
and/or
non-solicitation covenants set forth in their award agreements
and unvested RSUs are subject to cancellation if, prior to
vesting, such employees ceased to be employed by us for any
reason.
Time-based RSUs typically vest in the same manner as time-based
SARs. In February 2008, Mr. Costantini was granted 100,000
time-based RSUs, of which 40,000 vested on December 31,
2008, 30,000 vested on December 31, 2009 and 30,000 will
vest on December 31, 2010. In connection with
Mr. Bells employment in July 2009, he was awarded
70,000 time-based RSUs, subject to vesting in three equal
installments on July 1, 2010, 2011 and 2012. In 2009, in
view of the uncertain global economic environment and its
potential impact on our business, none of the Named Executive
Officers received RSU awards relating to 2009 performance
targets.
Stock Options. We may grant stock options
exercisable at such time or times, and subject to such terms and
conditions, as the Compensation Committee may determine
consistent with the terms of the 2006 LTIP. The exercise price
of such stock options will be equal to or higher than the fair
market value of our common stock on the date of grant.
Our 2004 Stock Option Plan authorized us to grant options to
purchase common stock to our employees, directors and
consultants. Stock option grants were made at the commencement
of employment or to meet other special retention or performance
objectives. The Compensation Committee reviewed and approved
stock option awards to executive officers, including Named
Executive Officers, based upon its assessment of individual
performance, a review of each executives existing
long-term incentives, and retention considerations. Periodic
stock option grants were made at the discretion of the
Compensation Committee to eligible employees and, in appropriate
circumstances, the Compensation Committee considered the
recommendations of members of management, such as our Chief
Executive Officer. Incentive stock options also include certain
other terms necessary to assure compliance with the Internal
Revenue Code of 1986, as amended (the Code). As
discussed above, our equity-based incentives have shifted away
from stock options and we have not granted any stock option
awards since 2006.
We may also grant SARs or RSUs to executives under special
circumstances outside of the annual process. Grants under the
2006 LTIP are made from time to time to selected executives in
connection with talent management objectives, giving particular
attention to employees leadership potential and potential
future contributions in achieving critical business goals and
objectives.
We may also grant SARs or RSUs, as deemed appropriate by the
Compensation Committee, including under the terms of employment
agreements with our Named Executive Officers. In connection with
Mr. Bells employment agreement in July 2009, he was
granted 70,000 time-based RSUs, subject to vesting, as described
above.
21
Personal
Benefits
Our Named Executive Officers participate in a variety of
retirement, health and welfare, and vacation benefits designed
to enable us to attract and retain our workforce in a
competitive marketplace. Health and welfare and vacation
benefits help ensure that we have a productive and focused
workforce through reliable and competitive health and other
benefits. Generally these programs are the same offered to all
employees.
Perquisites
Our Named Executive Officers are provided a limited number of
perquisites whose primary purpose is to minimize distractions
from the executives attention to the Companys
business. An item is not a perquisite if it is integrally and
directly related to the performance of the executives
duties. An item is a perquisite if it confers a direct or
indirect benefit that has a personal aspect, without regard to
whether it may be provided for some business reason or for our
convenience, unless it is generally available on a
non-discriminatory basis to all employees.
The principal perquisites offered to our Named Executive
Officers are car allowances and life insurance premiums. Please
see the Summary Compensation Table and accompanying narrative
disclosures set forth in this proxy statement for more
information on perquisites and other personal benefits we
provide to our Named Executive Officers.
401(k)
Plan
We maintain a 401(k) retirement plan intended to qualify under
Sections 401(a) and 401(k) of the Code. The plan is a
defined contribution plan that covers all our employees who have
been employed for three months or longer, beginning on the date
of employment. Employees may contribute up to 15% of their
eligible compensation (subject to certain limits) as pretax,
salary deferral contributions. We have the option of matching up
to 15% of 100% of the amount contributed by each employee up to
4% of employees compensation. In addition, the plan
contains a discretionary contribution component pursuant to
which we may make an additional annual contribution.
Contributions made by us vest over a five-year period from the
employees date of employment. We have not made any
contributions since the inception of the plan.
Severance
and Change in Control Benefits
Severance and change in control benefits are designed to
facilitate our ability to attract and retain executives as we
compete for talented employees in a marketplace where such
protections are commonly offered. The severance and change in
control benefits found in the Named Executive Officers
employment agreements are designed to encourage employees to
remain focused on our business in the event of rumored or actual
fundamental corporate changes. These benefits include continued
base salary payments and health insurance coverage (typically
for a one-year period), acceleration of the vesting of
outstanding equity-based awards, such as options, RSUs and SARs
(without regard to the satisfaction of any time-based
requirements or performance criteria), and extension of
post-termination exercise periods for options and SARs
(typically for 30 to 90 days).
Termination Provisions. Our employment
agreements with the Named Executive Officers provide severance
payments and other benefits in an amount we believe is
appropriate, taking into account the time it is expected to take
a separated employee to find another job. The payments and other
benefits are provided because we consider a separation to be a
Company-initiated termination of employment that under different
circumstances would not have occurred and which is beyond the
control of a separated employee. Separation benefits are
intended to ease the consequences to an employee of an
unexpected termination of employment. We benefit by requiring a
general release from separated employees. In addition, we have
included post-termination non-compete and non-solicitation
covenants in certain individual employment agreements.
We consider it likely that it will take more time for
higher-level employees to find new employment, and therefore
senior management generally is paid severance for a longer
period. Additional payments may be permitted in some
circumstances as a result of individual negotiations with
executives, especially where we desire particular
nondisparagement, cooperation with litigation, non-competition
and non-solicitation terms. See
22
the descriptions of the individual employment agreements with
the Named Executive Officers under Certain Relationships
and Transactions with Related Persons Employment
Agreements for additional information.
Change of Control Provisions. Under the 2004
Stock Option Plan and the 2006 LTIP and the award agreements
under those plans, our stock options, RSUs and SARs generally
vest upon a change of control, whether or not time vesting
requirements or performance targets have been achieved. Under
the employment agreements with our Named Executive Officers,
other change of control benefits generally require a change of
control, followed by a termination of or change in an
executives employment, a so-called double
trigger mechanism. In adopting the so-called single
trigger treatment for equity-based awards, we were guided by a
number of principles: being consistent with current market
practice among communications company peers; and keeping
employees relatively whole for a reasonable period but avoid
creating a windfall. Single trigger vesting ensures
that ongoing employees are treated the same as terminated
employees with respect to outstanding equity-based grants.
Single trigger vesting provides employees with the same
opportunities as stockholders, who are free to sell their equity
at the time of the change in control event and thereby realize
the value created at the time of the change of control
transaction. The company that made the original equity grant
will no longer exist after a change of control and employees
should not be required to have the fate of their outstanding
equity tied to the new companys future success. Single
trigger vesting on performance-contingent equity, in particular,
is appropriate given the difficulty of replicating the
underlying performance goals.
Tax and
Accounting Implications
Deductibility
of Executive Compensation
Section 162(m) of the Code limits our tax deductions
relating to the compensation paid to Named Executive Officers,
unless the compensation is performance-based and the material
terms of the applicable performance goals are disclosed to and
approved by our stockholders. All of our equity-based
compensation plans have received stockholder approval and, to
the extent applicable, were prepared with the intention that our
incentive compensation would qualify as performance-based
compensation under Section 162(m). While we intend to
continue to rely on performance-based compensation programs, we
recognize the need for flexibility in making executive
compensation decisions, based on the relevant facts and
circumstances, so that we achieve our best interests and the
best interests of our stockholders. To the extent consistent
with this goal and to help us manage our compensation costs, we
attempt to satisfy the requirements of Section 162(m) with
respect to those elements of our compensation programs that are
performance-based.
Certain
Awards Deferring or Accelerating the Receipt of
Compensation
Section 409A of the Code, enacted as part of the American
Jobs Creation Act of 2004, imposes certain new requirements
applicable to nonqualified deferred compensation
plans. If a nonqualified deferred compensation plan
subject to Section 409A fails to meet, or is not operated
in accordance with, these new requirements, then all
compensation deferred under the plan may become immediately
taxable. We intend that awards granted under the 2006 LTIP will
comply with the requirements of Section 409A and intend to
administer and interpret the 2006 LTIP in such a manner.
Role of
Executives and Others in Establishing Compensation
During 2009 our Chief Executive Officer, Mr. Eisenberg,
reviewed the performance of the Named Executive Officers (other
than his own, which was reviewed by the Compensation Committee),
and met on a
case-by-case
basis with each of the other Named Executive Officers to reach
agreements with respect to salary adjustments and annual award
amounts, which were then presented to the Compensation Committee
for approval. The Compensation Committee can exercise discretion
in modifying any recommended adjustments or awards to
executives. Mr. Eisenberg in his capacity as Chief
Executive Officer, attended meetings of the Compensation
Committee in 2009.
The
day-to-day
design and administration of benefits, including health and
vacation plans and policies applicable to salaried employees in
general are handled by our Finance and Legal Departments. Our
Compensation Committee (or board of directors) remains
responsible for certain fundamental changes outside the
day-to-day
requirements necessary to maintain these plans and policies.
23
COMPENSATION
COMMITTEE REPORT
The Compensation Committee of the Company has reviewed and
discussed the Compensation Discussion and Analysis required by
Item 402(b) of
Regulation S-K
with management and based on such review and discussion, the
Compensation Committee recommended to the board of directors
that the Compensation Discussion and Analysis be included in
this proxy statement and the Annual Report on
Form 10-K
for the year ended December 31, 2009.
Compensation Committee
Timothy Kelleher, Chairman
John Major
Hans E. W. Hoffmann
John R. Wood
24
COMPENSATION
OF EXECUTIVE OFFICERS
Summary
Compensation Table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Equity
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
Option
|
|
Incentive Plan
|
|
All other
|
|
|
|
|
|
|
Salary
|
|
Awards
|
|
Awards
|
|
Compensation
|
|
Compensation
|
|
Total
|
Name and Principal Position
|
|
Year
|
|
$
|
|
$(1)
|
|
$(2)
|
|
$(3)
|
|
$(4)
|
|
$
|
|
Marc Eisenberg
|
|
|
2009
|
|
|
|
365,000
|
|
|
|
|
|
|
|
|
|
|
|
189,800
|
|
|
|
15,386
|
|
|
|
570,186
|
|
Chief Executive Officer
|
|
|
2008
|
|
|
|
356,437
|
|
|
|
179,577
|
|
|
|
1,007,217
|
|
|
|
302,922
|
|
|
|
14,318
|
|
|
|
1,860,471
|
|
|
|
|
2007
|
|
|
|
315,000
|
|
|
|
589,329
|
|
|
|
268,237
|
|
|
|
154,350
|
|
|
|
10,982
|
|
|
|
1,337,898
|
|
Robert Costantini
|
|
|
2009
|
|
|
|
283,500
|
|
|
|
|
|
|
|
|
|
|
|
201,285
|
|
|
|
11,034
|
|
|
|
495,819
|
|
Executive Vice President
|
|
|
2008
|
|
|
|
283,500
|
|
|
|
588,701
|
|
|
|
589,278
|
|
|
|
243,788
|
|
|
|
10,292
|
|
|
|
1,715,559
|
|
and Chief Financial
|
|
|
2007
|
|
|
|
270,000
|
|
|
|
50,557
|
|
|
|
137,548
|
|
|
|
175,500
|
|
|
|
10,159
|
|
|
|
643,764
|
|
Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John J. Stolte, Jr.
|
|
|
2009
|
|
|
|
236,250
|
|
|
|
|
|
|
|
|
|
|
|
62,016
|
|
|
|
1,725
|
|
|
|
299,991
|
|
Executive Vice
|
|
|
2008
|
|
|
|
236,250
|
|
|
|
|
|
|
|
340,500
|
|
|
|
109,302
|
|
|
|
1,218
|
|
|
|
687,270
|
|
President Technology
|
|
|
2007
|
|
|
|
225,000
|
|
|
|
|
|
|
|
|
|
|
|
21,094
|
|
|
|
539
|
|
|
|
246,633
|
|
and Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Christian G. Le Brun
|
|
|
2009
|
|
|
|
201,300
|
|
|
|
|
|
|
|
|
|
|
|
61,145
|
|
|
|
501
|
|
|
|
262,946
|
|
Executive Vice President
|
|
|
2008
|
|
|
|
201,300
|
|
|
|
22,448
|
|
|
|
340,500
|
|
|
|
88,622
|
|
|
|
452
|
|
|
|
653,322
|
|
and General Counsel
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brian J. Bell
|
|
|
2009
|
|
|
|
102,500
|
|
|
|
128,100
|
|
|
|
|
|
|
|
23,063
|
|
|
|
4,414
|
|
|
|
258,077
|
|
Executive Vice President-Sales and Marketing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
The amounts set forth in the Stock Awards column
represent the aggregate grant date fair value of time-based and
performance-based RSU awards computed in accordance with FASB
ASC Topic 718, Compensation Stock Compensation,
assuming the performance condition is achieved at the target
level. For a discussion of the assumptions used to calculate the
grant date fair value of the RSU awards shown in the Stock
Awards column, see Note 6 in our consolidated
financial statements included in our Annual Report on
Form 10-K
for the year ended December 31, 2009. See
Compensation Discussion and Analysis Elements
of Compensation Long-Term Equity-Based
Incentives for a further discussion regarding RSU awards
in 2009, 2008 and 2007 and the Outstanding Equity Awards at
Fiscal Year-End Table for a further discussion regarding
outstanding RSU awards. |
|
(2) |
|
The amounts set forth in the Options Awards column
represent the aggregate grant date fair value of of time-based
and performance-based SAR awards computed in accordance with
FASB ASC Topic 718, Compensation Stock Compensation.
For a discussion of the assumptions used to calculate the grant
date fair value of the SAR awards shown in the Options
Awards column, see Note 6 in our consolidated
financial statements included in our Annual Report on
Form 10-K
for the year ended December 31, 2009. See
Compensation Discussion and Analysis Elements
of Compensation Long-Term Equity-Based
Incentives for a further discussion regarding SAR awards
in 2009, 2008 and 2007 and the Outstanding Equity Awards at
Fiscal Year-End Table for a further discussion regarding
outstanding SAR awards. |
|
(3) |
|
The amounts set forth in the Non-Equity Incentive Plan
Compensation column represent the annual incentive bonus
paid to Messrs. M. Eisenberg, Costantini, Stolte, Le Brun
and Bell under the terms of their respective employment
agreements. See the Grants of Plan-Based Awards Table for a
further discussion regarding the annual incentive payments. |
|
(4) |
|
The amounts set forth in the All Other Compensation
column are comprised of the following for each Named Executive
Officer: |
25
Eisenberg:
Perquisites and Personal Benefits:
2009: $14,450 for automobile allowance and $936 for payment
of life insurance premiums.
2008: $13,350 for automobile allowance and $968 for payment
of life insurance premiums.
2007: $10,200 for automobile allowance and $782 for payment
of life insurance premiums.
Costantini:
Perquisites and Personal Benefits:
2009: $9,600 for automobile allowance and $1,434 for
payment of life insurance premiums.
2008: $9,600 for automobile allowance and $692 for payment
of life insurance premiums.
2007: $9,600 for automobile allowance and $559 for payment
of life insurance premiums.
Stolte:
Perquisites and Personal Benefits:
2009: $1,715 for payment of life insurance premiums.
2008: $1,218 for payment of life insurance premiums.
2007: $539 for payment of life insurance premiums.
Le
Brun:
Perquisites and Personal Benefits:
2009: $501 for payment of life insurance premiums.
2008: $452 for payment of life insurance premiums.
Bell:
Perquisites and Personal Benefits:
2009: $4,200 for automobile allowance and $214 for payment
of life insurance premiums.
26
Grants of
Plan-Based Awards in 2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
|
|
|
|
|
|
|
|
|
Estimated Possible Payouts
|
|
Awards:
|
|
Grant Date
|
|
|
|
|
|
|
|
|
Under Non-Equity Incentive
|
|
Number of
|
|
Fair Value of
|
|
|
|
|
|
|
|
|
Plan Awards(2)
|
|
Shares of
|
|
Stock and
|
|
|
|
|
|
|
|
|
|
|
Target
|
|
|
|
Stock or
|
|
Option
|
|
|
Award
|
|
Committee
|
|
|
|
Threshold
|
|
Lower
|
|
Upper
|
|
Maximum
|
|
Units
|
|
Awards(3)
|
Name
|
|
Date(1)
|
|
Date
|
|
Award Type
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
(#)
|
|
($)
|
|
Marc Eisenberg
|
|
|
3/4/2009
|
|
|
|
3/4/2009
|
|
|
Annual incentive (Adjusted EBITDA)
|
|
$
|
16,425
|
|
|
$
|
36,500
|
|
|
$
|
73,000
|
|
|
$
|
127,750
|
|
|
|
|
|
|
$
|
|
|
|
|
|
3/4/2009
|
|
|
|
3/4/2009
|
|
|
Annual incentive (Net satellite subscriber additions)
|
|
|
16,425
|
|
|
|
36,500
|
|
|
|
73,000
|
|
|
|
127,750
|
|
|
|
|
|
|
|
|
|
|
|
|
3/4/2009
|
|
|
|
3/4/2009
|
|
|
Annual incentive (Revenues)
|
|
|
9,855
|
|
|
|
21,900
|
|
|
|
43,800
|
|
|
|
76,650
|
|
|
|
|
|
|
|
|
|
|
|
|
3/4/2009
|
|
|
|
3/4/2009
|
|
|
Annual incentive (Net terrestrial subscriber additions)
|
|
|
3,285
|
|
|
|
7,300
|
|
|
|
14,600
|
|
|
|
25,550
|
|
|
|
|
|
|
|
|
|
|
|
|
3/4/2009
|
|
|
|
3/4/2009
|
|
|
Annual incentive (Execution of launch services contract for
next-generation satellites)
|
|
|
6,570
|
|
|
|
14,600
|
|
|
|
29,200
|
|
|
|
51,100
|
|
|
|
|
|
|
|
|
|
|
|
|
3/4/2009
|
|
|
|
3/4/2009
|
|
|
Annual incentive (Government business)
|
|
|
3,285
|
|
|
|
7,300
|
|
|
|
14,600
|
|
|
|
25,550
|
|
|
|
|
|
|
|
|
|
|
|
|
3/4/2009
|
|
|
|
3/4/2009
|
|
|
Annual incentive (operational target: #1)
|
|
|
3,285
|
|
|
|
7,300
|
|
|
|
14,600
|
|
|
|
25,550
|
|
|
|
|
|
|
|
|
|
|
|
|
3/4/2009
|
|
|
|
3/4/2009
|
|
|
Annual incentive (operational target: #2)
|
|
|
6,570
|
|
|
|
14,600
|
|
|
|
29,200
|
|
|
|
51,100
|
|
|
|
|
|
|
|
|
|
Robert G. Costantini
|
|
|
3/4/2009
|
|
|
|
3/4/2009
|
|
|
Annual incentive (Adjusted EBITDA)
|
|
|
20,412
|
|
|
|
45,360
|
|
|
|
90,720
|
|
|
|
158,760
|
|
|
|
|
|
|
|
|
|
|
|
|
3/4/2009
|
|
|
|
3/4/2009
|
|
|
Annual incentive (Net satellite subscriber additions)
|
|
|
10,206
|
|
|
|
22,680
|
|
|
|
45,360
|
|
|
|
79,380
|
|
|
|
|
|
|
|
|
|
|
|
|
3/4/2009
|
|
|
|
3/4/2009
|
|
|
Annual incentive (Revenues)
|
|
|
5,103
|
|
|
|
11,340
|
|
|
|
22,680
|
|
|
|
39,690
|
|
|
|
|
|
|
|
|
|
|
|
|
3/4/2009
|
|
|
|
3/4/2009
|
|
|
Annual incentive (Net terrestrial subscriber additions)
|
|
|
2,552
|
|
|
|
5,670
|
|
|
|
11,340
|
|
|
|
19,845
|
|
|
|
|
|
|
|
|
|
|
|
|
3/4/2009
|
|
|
|
3/4/2009
|
|
|
Annual incentive (Execution of launch services contract for
next-generation satellites)
|
|
|
5,103
|
|
|
|
11,340
|
|
|
|
22,680
|
|
|
|
39,690
|
|
|
|
|
|
|
|
|
|
|
|
|
3/4/2009
|
|
|
|
3/4/2009
|
|
|
Annual incentive (Government business)
|
|
|
2,552
|
|
|
|
5,670
|
|
|
|
11,340
|
|
|
|
19,845
|
|
|
|
|
|
|
|
|
|
|
|
|
3/4/2009
|
|
|
|
3/4/2009
|
|
|
Annual incentive (operational target: #2)
|
|
|
5,103
|
|
|
|
11,340
|
|
|
|
22,680
|
|
|
|
39,690
|
|
|
|
|
|
|
|
|
|
John J. Stolte, Jr.
|
|
|
3/4/2009
|
|
|
|
3/4/2009
|
|
|
Annual incentive (Adjusted EBITDA)
|
|
|
|
|
|
|
8,859
|
|
|
|
17,719
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/4/2009
|
|
|
|
3/4/2009
|
|
|
Annual incentive (Net satellite subscriber additions)
|
|
|
|
|
|
|
4,430
|
|
|
|
8,859
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/4/2009
|
|
|
|
3/4/2009
|
|
|
Annual incentive (Revenues)
|
|
|
|
|
|
|
4,430
|
|
|
|
8,859
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/4/2009
|
|
|
|
3/4/2009
|
|
|
Annual incentive (Execution of launch services contract for
next-generation satellites)
|
|
|
|
|
|
|
26,578
|
|
|
|
53,156
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/4/2009
|
|
|
|
3/4/2009
|
|
|
Annual incentive (Government business)
|
|
|
|
|
|
|
4,430
|
|
|
|
8,859
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/4/2009
|
|
|
|
3/4/2009
|
|
|
Annual incentive (Network operational improvements)
|
|
|
|
|
|
|
17,719
|
|
|
|
35,438
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/4/2009
|
|
|
|
3/4/2009
|
|
|
Annual incentive (International gateway installation)
|
|
|
|
|
|
|
8,859
|
|
|
|
17,719
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/4/2009
|
|
|
|
3/4/2009
|
|
|
Annual incentive (Network upgrade)
|
|
|
|
|
|
|
4,430
|
|
|
|
8,859
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/4/2009
|
|
|
|
3/4/2009
|
|
|
Annual incentive (operational target: #3)
|
|
|
|
|
|
|
4,430
|
|
|
|
8,859
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/4/2009
|
|
|
|
3/4/2009
|
|
|
Annual incentive (operational target: #4)
|
|
|
|
|
|
|
4,430
|
|
|
|
8,859
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Christian G. Le Brun
|
|
|
3/4/2009
|
|
|
|
3/4/2009
|
|
|
Annual incentive (Adjusted EBITDA)
|
|
|
|
|
|
|
3,774
|
|
|
|
7,549
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/4/2009
|
|
|
|
3/4/2009
|
|
|
Annual incentive (Net satellite subscriber additions)
|
|
|
|
|
|
|
3,774
|
|
|
|
7,549
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/4/2009
|
|
|
|
3/4/2009
|
|
|
Annual incentive (Revenues)
|
|
|
|
|
|
|
3,774
|
|
|
|
7,549
|
|
|
|
|
|
|
|
|
|
|
|
|
|
27
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
|
|
|
|
|
|
|
|
|
Estimated Possible Payouts
|
|
Awards:
|
|
Grant Date
|
|
|
|
|
|
|
|
|
Under Non-Equity Incentive
|
|
Number of
|
|
Fair Value of
|
|
|
|
|
|
|
|
|
Plan Awards(2)
|
|
Shares of
|
|
Stock and
|
|
|
|
|
|
|
|
|
|
|
Target
|
|
|
|
Stock or
|
|
Option
|
|
|
Award
|
|
Committee
|
|
|
|
Threshold
|
|
Lower
|
|
Upper
|
|
Maximum
|
|
Units
|
|
Awards(3)
|
Name
|
|
Date(1)
|
|
Date
|
|
Award Type
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
(#)
|
|
($)
|
|
|
|
|
3/4/2009
|
|
|
|
3/4/2009
|
|
|
Annual incentive (Execution of launch services contract for
next-generation satellites)
|
|
|
|
|
|
|
7,549
|
|
|
|
15,098
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/4/2009
|
|
|
|
3/4/2009
|
|
|
Annual incentive (Government business)
|
|
|
|
|
|
|
3,774
|
|
|
|
7,549
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/4/2009
|
|
|
|
3/4/2009
|
|
|
Annual incentive (International gateway installation)
|
|
|
|
|
|
|
11,323
|
|
|
|
22,646
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/4/2009
|
|
|
|
3/4/2009
|
|
|
Annual incentive (Regulatory approvals)
|
|
|
|
|
|
|
11,323
|
|
|
|
22,646
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/4/2009
|
|
|
|
3/4/2009
|
|
|
Annual incentive (International license)
|
|
|
|
|
|
|
7,549
|
|
|
|
15,098
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/4/2009
|
|
|
|
3/4/2009
|
|
|
Annual incentive (Legal expense reduction)
|
|
|
|
|
|
|
7,549
|
|
|
|
15,098
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/4/2009
|
|
|
|
3/4/2009
|
|
|
Annual incentive (operational target: #1)
|
|
|
|
|
|
|
3,774
|
|
|
|
7,549
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/4/2009
|
|
|
|
3/4/2009
|
|
|
Annual incentive (operational target: #5)
|
|
|
|
|
|
|
7,549
|
|
|
|
15,098
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/4/2009
|
|
|
|
3/4/2009
|
|
|
Annual incentive (operational target: #6)
|
|
|
|
|
|
|
3,774
|
|
|
|
7,549
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brian J. Bell
|
|
|
7/1/2009
|
|
|
|
7/1/2009
|
|
|
Annual incentive (Adjusted EBITDA)(4)
|
|
|
|
|
|
|
9,609
|
|
|
|
19,219
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7/1/2009
|
|
|
|
7/1/2009
|
|
|
Annual incentive (Net satellite subscriber Additions)(4)
|
|
|
|
|
|
|
13,453
|
|
|
|
26,906
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7/1/2009
|
|
|
|
7/1/2009
|
|
|
Annual incentive (Revenues)(4)
|
|
|
|
|
|
|
7,688
|
|
|
|
15,375
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7/1/2009
|
|
|
|
7/1/2009
|
|
|
Annual incentive (Net terrestrial subscriber additions)(4)
|
|
|
|
|
|
|
1,922
|
|
|
|
3,844
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7/1/2009
|
|
|
|
7/1/2009
|
|
|
Annual incentive (operational target: #1)(4)
|
|
|
|
|
|
|
5,766
|
|
|
|
11,531
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7/1/2009
|
|
|
|
7/1/2009
|
|
|
Time-based RSUs(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
70,000
|
|
|
|
128,100
|
|
|
|
|
(1) |
|
The date the Compensation Committee approved the issuance of the
award. |
|
(2) |
|
The amounts shown represent annual incentive payments payable to
Messrs. Eisenberg, Costantini, Stolte, Le Brun and Bell
pursuant to employment agreements with the Company. See
Certain Relationships and Transactions with Related
Persons Employment Agreements for a summary of
the employment agreements. The actual annual incentive payment
amount paid to each of these Named Executive Officers for fiscal
year 2009 is shown in the Summary Compensation Table under the
Non-Equity Incentive Plan Compensation column. For
2009, the incentive payment is a percentage of the
executives 2009 base salary, determined based on the
achievement of specified financial and operational performance
targets of the Company for fiscal year 2009. The amounts shown
in the Threshold column represent the amount payable
for each eligible Named Executive Officer if the performance
targets are achieved at the 90% level, the minimum performance
required for any annual incentive payment to be made. For 2009,
the threshold percentages of base salary payable as annual
compensation were 18% for Messrs. Eisenberg and Costantini.
The amounts shown in the Lower Limit column under
Target represent the lower target annual incentive
payment for each eligible Named Executive Officer if the
performance targets are achieved at the 100% level. For 2009,
the percentages of base salary payable for the Lower Limit as
annual incentives if the performance targets are achieved at the
100% level were as follows: 40% for Messrs. Eisenberg and
Costantini and 37.5% for Messrs. Stolte, Le Brun and
Bell. The amounts shown in the Upper Limit column under
Target represent the upper target annual incentive
payment for each Named Executive Officer if the performance
targets are achieved at the 117% level. For 2009, the
percentages of base salary payable for the Upper |
28
|
|
|
|
|
Limit as annual incentives if the performance targets are
achieved at the 117% level were as follows: 80% for
Messrs. Eisenberg and Costantini and 75% for
Messrs. Stolte, Le Brun and Bell. The amounts shown in the
Maximum column represents the maximum amount payable
for each eligible Named Executive Officer if the performance
targets are achieved above the 133% level. For 2009, the maximum
percentages of base salary payable as annual compensation were
140% for Messrs. Eisenberg and Costantini. Please see
Compensation Discussion and Analysis Elements
of Compensation Annual Cash Bonus for a
further discussion regarding our annual cash incentive payment
programs. |
|
(3) |
|
The amounts shown in the Grant Date Fair Value of Stock
and Option Awards column represent the full grant date
fair value of the awards computed in accordance with FASB ASC
Topic 718 Compensation Stock Compensation. The grant
date fair value of the time-based RSUs shown in the table was
$1.83, per share based on the closing stock price of our common
stock on the date of grant. For a discussion of the assumptions
used to calculate the grant date fair value of the RSU and SAR
awards shown in the table, see Note 6 to our consolidated
financial statements included in our Annual Report on
Form 10-K
for the year ended December 31, 2009. |
|
(4) |
|
The amounts shown above have been pro rated in accordance with
Mr. Bells employment agreement to reflect his period
of employment with the Company in 2009. |
|
(5) |
|
On July 1, 2009, 70,000 time-based RSU awards were granted
to Mr. Bell. These time-based awards vest in three equal
installments on July 1, 2010, 2011 and 2012. See
Compensation Discussion and Analysis Elements
of Compensation Long-Term Equity-Based
Incentives for a further discussion regarding time-based
RSU awards. See the Outstanding Equity Awards at Fiscal Year-End
Table and the related footnotes for additional information
regarding these RSU awards. |
Outstanding
Equity Awards at 2009 Fiscal Year-End
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option/SAR Awards
|
|
|
Stock Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Incentive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plan Awards:
|
|
|
|
|
|
|
|
|
|
Equity Incentive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Incentive
|
|
|
Market or
|
|
|
|
|
|
|
|
|
|
Plan Awards:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plan Awards:
|
|
|
Payout Value of
|
|
|
|
Number of
|
|
|
Number of
|
|
|
Number of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
Unearned
|
|
|
|
Securities
|
|
|
Securities
|
|
|
Securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unearned
|
|
|
Shares, Units or
|
|
|
|
Underlying
|
|
|
Underlying
|
|
|
Underlying
|
|
|
|
|
|
|
|
|
Number of
|
|
|
Market Value of
|
|
|
Shares, Units or
|
|
|
Other Rights
|
|
|
|
Unexercised
|
|
|
Unexercised
|
|
|
Unexercised
|
|
|
Option/SAR
|
|
|
|
|
|
Shares or units
|
|
|
Shares or Units
|
|
|
other Rights
|
|
|
Units or Other
|
|
|
|
Options/SARs
|
|
|
Options/SARs
|
|
|
Unearned
|
|
|
Exercise
|
|
|
Option/SAR
|
|
|
of stock that
|
|
|
of Stock that
|
|
|
that have not
|
|
|
That have not
|
|
|
|
(#)
|
|
|
(#)
|
|
|
Options/SARs
|
|
|
Price
|
|
|
Expiration
|
|
|
have not vested
|
|
|
have not Vested
|
|
|
Vested
|
|
|
Vested
|
|
Name
|
|
Exercisable
|
|
|
Unexercisable
|
|
|
(#)
|
|
|
($)
|
|
|
Date
|
|
|
(#)
|
|
|
($)(1)
|
|
|
(#)
|
|
|
($)
|
|
|
Marc Eisenberg
|
|
|
146,667
|
(2)
|
|
|
|
|
|
|
|
|
|
$
|
2.33
|
|
|
|
2/17/2014
|
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
$
|
|
|
|
|
|
33,334
|
(2)
|
|
|
|
|
|
|
|
|
|
|
2.33
|
|
|
|
2/17/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
33,334
|
(2)
|
|
|
|
|
|
|
|
|
|
|
2.78
|
|
|
|
2/17/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
33,334
|
(2)
|
|
|
|
|
|
|
|
|
|
|
3.38
|
|
|
|
2/17/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
33,334
|
(2)
|
|
|
|
|
|
|
|
|
|
|
4.26
|
|
|
|
2/17/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,167
|
(3)
|
|
|
|
|
|
|
|
|
|
|
11.00
|
|
|
|
10/5/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,844
|
(3)
|
|
|
|
|
|
|
|
|
|
|
11.00
|
|
|
|
10/5/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,167
|
(3)
|
|
|
|
|
|
|
|
|
|
|
11.00
|
|
|
|
10/5/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
125,000
|
(3)
|
|
|
|
|
|
|
|
|
|
|
4.96
|
|
|
|
10/5/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21,667
|
(3)
|
|
|
|
|
|
|
|
|
|
|
11.00
|
|
|
|
10/5/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,129
|
(3)
|
|
|
|
|
|
|
|
|
|
|
11.00
|
|
|
|
10/5/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
150,000
|
(3)
|
|
|
|
|
|
|
|
|
|
|
4.96
|
|
|
|
10/5/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
150,000
|
(4)
|
|
|
|
|
|
|
4.96
|
|
|
|
10/5/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert Costantini
|
|
|
44,444
|
(3)
|
|
|
|
|
|
|
|
|
|
|
11.00
|
|
|
|
10/5/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22,222
|
(3)
|
|
|
|
|
|
|
|
|
|
|
11.00
|
|
|
|
10/5/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14,444
|
(3)
|
|
|
|
|
|
|
|
|
|
|
11.00
|
|
|
|
10/5/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
50,000
|
(3)
|
|
|
|
|
|
|
|
|
|
|
4.96
|
|
|
|
10/5/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22,223
|
(3)
|
|
|
|
|
|
|
|
|
|
|
11.00
|
|
|
|
10/5/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,111
|
(3)
|
|
|
|
|
|
|
|
|
|
|
11.00
|
|
|
|
10/5/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,195
|
(3)
|
|
|
|
|
|
|
|
|
|
|
11.00
|
|
|
|
10/5/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100,000
|
(3)
|
|
|
|
|
|
|
|
|
|
|
4.96
|
|
|
|
10/5/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100,000
|
(4)
|
|
|
|
|
|
|
4.96
|
|
|
|
10/5/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30,000
|
(5)
|
|
|
81,000
|
(5)
|
|
|
|
|
|
|
|
|
John J. Stolte, Jr.
|
|
|
11,667
|
(2)
|
|
|
|
|
|
|
|
|
|
|
2.33
|
|
|
|
2/17/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,667
|
(2)
|
|
|
|
|
|
|
|
|
|
|
2.78
|
|
|
|
2/17/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13,334
|
(2)
|
|
|
|
|
|
|
|
|
|
|
3.38
|
|
|
|
2/17/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13,334
|
(2)
|
|
|
|
|
|
|
|
|
|
|
4.26
|
|
|
|
2/17/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30,000
|
(3)
|
|
|
|
|
|
|
|
|
|
|
4.96
|
|
|
|
10/5/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
60,000
|
(3)
|
|
|
|
|
|
|
|
|
|
|
4.96
|
|
|
|
10/5/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
60,000
|
(4)
|
|
|
|
|
|
|
4.96
|
|
|
|
10/5/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Christian G. Le Brun
|
|
|
47,952
|
(2)
|
|
|
|
|
|
|
|
|
|
|
4.88
|
|
|
|
2/17/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30,000
|
(3)
|
|
|
|
|
|
|
|
|
|
|
4.96
|
|
|
|
10/5/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,048
|
(2)
|
|
|
|
|
|
|
|
|
|
|
4.88
|
|
|
|
2/17/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
60,000
|
(3)
|
|
|
|
|
|
|
|
|
|
|
4.96
|
|
|
|
10/5/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
60,000
|
(4)
|
|
|
|
|
|
|
4.96
|
|
|
|
10/5/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brain J. Bell
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
70,000
|
(6)
|
|
|
189,000
|
(6)
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Based on the $2.70 per share closing price of our common stock
on December 31, 2009. |
|
(2) |
|
Options granted under our 2004 Stock Option Plan. |
|
(3) |
|
SAR awards granted under our 2006 LTIP. |
|
(4) |
|
Time-based SAR awards granted under our 2006 LTIP which vest on
December 31, 2010. |
|
(5) |
|
Time-based RSU award granted under our 2006 LTIP which vests on
December 31, 2010. |
|
(6) |
|
Time-based RSU award granted under our 2006 LTIP which vests in
three equal installments on July 1, 2010, 2011 and 2012. |
30
Option
Exercises and Stock Vested in 2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Stock Awards
|
|
|
|
Number of
|
|
|
|
|
|
Number of
|
|
|
|
|
|
|
Securities Acquired
|
|
|
Value Realized
|
|
|
Securities Acquired
|
|
|
Value Realized
|
|
|
|
on Exercise
|
|
|
on Exercise
|
|
|
on Vesting
|
|
|
on Vesting
|
|
Name
|
|
(#)
|
|
|
($)
|
|
|
(#)(1)
|
|
|
($)(2)
|
|
|
Marc Eisenberg
|
|
|
|
|
|
|
|
|
|
|
64,727
|
|
|
|
113,191
|
|
Robert G. Costantini
|
|
|
|
|
|
|
|
|
|
|
36,742
|
|
|
|
92,790
|
|
John J. Stolte, Jr.
|
|
|
|
|
|
|
|
|
|
|
20,223
|
|
|
|
42,468
|
|
Christian G. Le Brun
|
|
|
|
|
|
|
|
|
|
|
8,091
|
|
|
|
14,149
|
|
Brian J. Bell
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Shares acquired on vesting of time-based RSU awards and vesting
in 2009 of performance-based RSU awards based on achievement of
performance targets for fiscal year 2008. |
|
(2) |
|
Based on the closing price of our common stock on the vesting
date. |
31
EQUITY
COMPENSATION PLAN INFORMATION
The following table provides information, as of
December 31, 2009, about shares of our common stock that
may be issued upon the exercise or vesting of options, RSUs and
SARs granted to employees, consultants or directors under all of
our existing equity compensation plans.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
|
|
(b)
|
|
|
(c)
|
|
|
|
Number of
|
|
|
|
|
|
Number of securities
|
|
|
|
securities to be
|
|
|
|
|
|
remaining available for
|
|
|
|
issued upon
|
|
|
|
|
|
future issuance under
|
|
|
|
exercise or vesting
|
|
|
Weighted-average
|
|
|
equity compensation
|
|
|
|
of outstanding
|
|
|
exercise price
|
|
|
plans (excluding
|
|
|
|
options, RSUs
|
|
|
of outstanding
|
|
|
securities reflected
|
|
Plan Category
|
|
and SARs
|
|
|
options and SARs
|
|
|
in column (a))
|
|
|
Equity compensation plans approved by stockholders(1)
|
|
|
2,467,654
|
(2)
|
|
$
|
4.99
|
(3)
|
|
|
2,015,741
|
(4)
|
Equity compensation plans not approved by stockholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
2,467,654
|
|
|
$
|
4.99
|
|
|
|
2,015,741
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Consists of the following equity compensation plans: the 2004
Stock Option Plan and the 2006 LTIP. |
|
(2) |
|
Consists of 782,079 shares subject to outstanding stock
options under the 2004 Stock Option Plan and
1,446,813 shares underlying outstanding time- and
performance-based SARs and 238,753 shares underlying
outstanding time- and performance-based RSUs granted under the
2006 LTIP. |
|
(3) |
|
Excludes 238,753 shares underlying outstanding time- and
performance-based RSUs which do not have an exercise price. |
|
(4) |
|
Consists of shares available for issuance under the 2006 LTIP,
which includes the remaining 214,079 shares of common stock
available for issuance under the 2004 Stock Option Plan. |
32
CERTAIN
RELATIONSHIPS AND TRANSACTIONS WITH RELATED PERSONS
ORBCOMM
Europe
We have entered into a service license agreement covering 43
jurisdictions in Europe and a gateway services agreement with
ORBCOMM Europe LLC, a company in which we indirectly own a 25.5%
interest. The service license agreement and the gateway services
agreement with ORBCOMM Europe contain terms and conditions
substantially similar to the service license agreements and the
gateway services agreements we have and expect to enter into
with other licensees, except for certain more favorable pricing
terms. ORBCOMM Europe is owned 50% by Satcom and 50% by OHB
Technology A.G. (OHB Technology). We own a 52%
interest in Satcom. Subsequent to the acquisition of our 52%
interest in Satcom, Satcom and ORBCOMM Europe are consolidated
affiliates in our consolidated financial statements.
OHB Technology is a substantial stockholder and a direct
investor of ours and its Chief Executive Officer, Marco Fuchs,
is on our board of directors. In addition, Satcom has been
appointed by ORBCOMM Europe as a country representative for the
United Kingdom, Ireland and Switzerland. ORBCOMM Deutschland, an
affiliate of OHB Technology, has been appointed by ORBCOMM
Europe as country representative for Germany and holds the
relevant regulatory authority and authorization in Germany.
OHB-France,
a subsidiary of OHB Technology, holds the regulatory authority
and authorization in France. In addition, ORBCOMM Europe and
Satcom have entered into an agreement obligating ORBCOMM Europe
to enter into a country representative agreement for Turkey with
Satcom, if the current country representative agreement for
Turkey expires or is terminated for any reason.
In connection with the organization of ORBCOMM Europe and the
reorganization of our business in Europe, we agreed to grant
ORBCOMM Europe approximately $3.7 million in air time
credits. The amount of the grant was equal to the amount owed by
ORBCOMM Global L.P. to the European Company for Mobile
Communications Services N.V. (MCS), the former
licensee for Europe of ORBCOMM Global L.P. ORBCOMM Europe, in
turn, agreed to issue credits in the aggregate amount of the
credits received from us to MCS and its country representatives
who were stockholders of MCS. Satcom, as a country
representative for the United Kingdom, Ireland and Switzerland,
received airtime credits in the amount of $580,200. ORBCOMM
Deutschland, as country representative for Germany, received
airtime credits of $449,800. Because approximately
$2.8 million of the airtime credits were granted to
stockholders of MCS who are not related to us and who continue
to be country representatives in Europe, we believe that
granting of the airtime credits was essential to permit ORBCOMM
Europe to reorganize the ORBCOMM business in Europe. The airtime
credits have no expiration date. As of December 31, 2009,
approximately $2.2 million of the airtime credits granted
by us to ORBCOMM Europe remained unused.
33
Satcom
International Group plc.
Satcom is our 52%-owned consolidated subsidiary that
(i) owns 50% of ORBCOMM Europe, (ii) has entered into
country representative agreements with ORBCOMM Europe, covering
the United Kingdom, Ireland and Switzerland, and (iii) has
entered into a service license agreement with us, covering
substantially all of the countries of the Middle East and a
significant number of countries of Central Asia, and a gateway
services agreement with us. In addition, ORBCOMM Europe and
Satcom have entered into an agreement obligating ORBCOMM Europe
to enter into a country representative agreement for Turkey with
Satcom, if the current country representative agreement for
Turkey expires or is terminated for any reason. We believe that
the service license agreement and the gateway services agreement
between us and Satcom contain terms and conditions substantially
similar to those which we have and expect to enter into with
other unaffiliated licensees. As of December 31, 2009,
Satcom owed us unpaid fees of approximately $96,000.
We acquired our 52% interest in Satcom from Jerome Eisenberg,
our Chairman of the Board and former Chief Executive Officer,
and Don Franco, a former officer of ours, who, immediately prior
to the October 2005 reorganization of Satcom, together owned
directly or indirectly a majority of the outstanding voting
shares of Satcom and held a substantial portion of the
outstanding debt of Satcom. On October 7, 2005, pursuant to
a contribution agreement entered into between us and
Messrs. Eisenberg and Franco in February 2004, we acquired
all of their interests in Satcom in exchange for (1) an
aggregate of 620,000 shares of our Series A preferred
stock and (2) a contingent cash payment in the event of our
sale or initial public offering. The contribution agreement was
entered into in connection with our February 2004 reorganization
in order to eliminate any potential conflict of interest between
us and Messrs. Eisenberg and Franco, in their capacities as
officers of ours. The contingent payment would equal
$2 million, $3 million or $6 million in the event
the proceeds from our sale or the valuation in our IPO exceeded
$250 million, $300 million or $500 million,
respectively, subject to proration for amounts that fell in
between these thresholds. On November 8, 2006, upon
completion of our IPO, we made a contingent payment of
approximately $3.6 million. Immediately prior to, and as a
condition to the closing of, the Satcom acquisition, Satcom and
certain of its stockholders and noteholders consummated a
reorganization transaction whereby 95% of the outstanding
principal of demand notes, convertible notes and certain
contract debt was converted into equity, and accrued and unpaid
interest on such demand and convertible notes was acknowledged
to have been previously released. This reorganization included
the conversion into equity of the demand notes and convertible
notes of Satcom held by Messrs. Eisenberg and Franco in the
principal amounts of approximately $50,000 and $6,250,800,
respectively, and the release of any other debts of Satcom owed
to them.
As of December 31, 2009, ORBCOMM Europe had a note payable
to Satcom in the amount of 1,466,920 ($2,097,696). This
note has the same payment terms as the note payable from ORBCOMM
Europe to OHB Technology described below under
OHB Technology A.G. and carries a zero
interest rate. For accounting purposes, this note has been
eliminated in the consolidation of ORBCOMM Europe and Satcom
with ORBCOMM Inc. We own 52% of Satcom, which in turn owns 50%
of ORBCOMM Europe.
We have provided Satcom with a $1.0 million line of credit
for working capital purposes pursuant to a revolving note dated
as of December 30, 2005. The revolving loan bears interest
at 8% per annum and was originally scheduled to mature on
December 30, 2006, and is secured by all of Satcoms
assets, including its membership interest in ORBCOMM Europe. As
of December 31, 2009, Satcom had $833,457 outstanding under
this line of credit.
OHB
Technology A.G.
On May 21, 2002, we entered into an IVAR agreement with OHB
Technology (formerly known as OHB Teledata A.G.) whereby OHB
Technology has been granted non-exclusive rights to resell our
services for applications developed by OHB Technology for the
monitoring and tracking of mobile tanks and containers. As of
December 31, 2009, OHB Technology owed us unpaid fees of
approximately $2,000.
In an unrelated transaction, on March 10, 2005, we entered
into an ORBCOMM concept demonstration satellite bus, integration
test and launch services procurement agreement with OHB-System
AG (an affiliate of OHB Technology), whereby OHB-System AG will
provide us with overall concept demonstration satellite
34
design, bus module and payload module structure manufacture,
payload and bus module integration, assembled satellite
environmental tests, launch services and on-orbit testing of the
bus module for the Concept Validation Project.
In connection with the acquisition of an interest in Satcom (see
Satcom International Group plc. above),
we recorded an indebtedness to OHB Technology arising from a
note payable from ORBCOMM Europe to OHB Technology. At
December 31, 2009 the principal balance of the note payable
is 1,138,410 ($1,627,912) and it has a carrying value of
$1,398,000. This note does not bear interest and has no fixed
repayment term. Repayment will be made from the distribution
profits (as defined in the note agreement) of ORBCOMM Europe.
The note has been classified as long-term and we do not expect
any repayments to be required prior to January 1, 2011.
On June 5, 2006, we entered into an agreement with
OHB-System AG, an affiliate of OHB Technology, to design,
develop and manufacture for us six satellite buses, integrate
such buses with the payloads to be provided by Orbital Sciences
Corporation, and launch the six integrated satellites to
complete our quick-launch program. The original
price for the six satellite buses and related integration and
launch services was $20 million and payments under the
agreement were due upon specific milestones achieved by
OHB-System AG.
On July 2, 2008, we and OHB-System, AG entered into an
agreement to amend the June 5, 2006 agreement in connection
with the successful launch of the Coast Guard demonstration
satellite and the five quick-launch satellites on June 19,
2008. Pursuant to the agreement, we and OHB System, AG agreed to
a revised schedule of milestone and related payments for the
launch of the five quick-launch satellites and delivery schedule
of the sixth quick-launch satellite, with no modification to the
price in the agreement entered into on June 5, 2006,
including certain launch support and in-orbit testing services
for the sixth quick-launch satellite. In addition, we agreed to
pay an additional $450,000 to OHB-System, AG relating to the
construction of the five quick-launch satellites. We and
OHB-System, AG have also agreed to waive any applicable on-time
delivery incentive payments and to waive any applicable
liquidated damages, except for any liquidated damages with
respect to delivery delay of the sixth quick-launch satellite.
As of December 31, 2009, we have made milestone payments
aggregating $17.8 million under this agreement. In
addition, OHB System, AG will provide services relating to the
development, demonstration and launch of our next-generation
satellites at a total cost of $1.35 million.
Registration
Rights Agreement
On December 30, 2005, and in connection with private
placements of Series B convertible preferred stock in
November and December 2005 and January 2006, we entered into a
Second Amended and Restated Registration Rights Agreement with
the Series B preferred stock investors and holders of our
Series A preferred stock and common stock who were parties
to the Amended and Restated Registration Rights Agreement dated
February 17, 2004.
Under the agreement, certain holders of common stock (including
common stock issued upon the conversion of Series A
convertible preferred stock and Series B convertible
preferred stock) have the right to demand, at any time or from
time to time, that we file up to two registration statements
registering the common stock. Only holders of (i) at least
two-thirds of the registrable securities (generally our common
stock and common stock issued upon conversion of our preferred
stock and warrants) outstanding as of the date of our initial
public offering, (ii) at least 35% of the registrable
securities outstanding as of the date of the demand or
(iii) a specified number of holders of common stock issued
upon conversion of our Series B convertible preferred stock
may request a demand registration.
In addition, certain holders will be entitled to an additional
demand registration statement on
Form S-3
covering the resale of all registrable securities, provided that
we will not be required to effect more than one such demand
registration statement on
Form S-3
in any twelve month period or to effect any such demand
registration statement on
Form S-3
if any such demand registration statement on
Form S-3
will result in an offering price to the public of less than
$20 million. Notwithstanding the foregoing, after we
qualify to register our common stock on
Form S-3,
Sagamore Hill Hub Fund Ltd. and its affiliates
(collectively,
35
Sagamore) and PCG Satellite Investments, LLC,
CALPERS/PCG Corporate Partners, LLC and their affiliates (the
PCG Entities) will have separate rights to
additional demand registrations that would be eligible for
registration on
Form S-3;
provided, that we will not be required to effect more than one
such demand registration requested by Sagamore or the PCG
Entities, as the case may be, on
Form S-3
in any twelve month period and that Sagamore or the PCG
Entities, as the case may be, will pay the expenses of such
registration if such registration shall result in an aggregate
offering price to the public of less than $1 million.
Certain investors also have preemptive rights and piggyback
registration rights as specified in our Second Amended and
Restated Registration Rights Agreement.
Employment
Agreements Executive Officers
Marc Eisenberg. On February 21, 2008, we
entered into an employment agreement with Marc Eisenberg to
serve as our Chief Executive Officer effective as of
March 31, 2008. Upon its effectiveness, the agreement
superseded and replaced any prior employment agreements with
Marc Eisenberg (except for any of his obligations applicable to
the period prior to March 31, 2008) and expires on
December 31, 2010, unless terminated earlier pursuant to
the terms of the agreement. The agreement may be extended by
mutual agreement of the parties. Upon the expiration of the
agreements term, and any extension thereof,
Mr. Eisenberg will continue to be employed on an at
will basis.
The agreement provides for an annual base salary of $365,000. In
addition to his salary, Mr. Eisenberg is entitled to
certain employee benefits, including medical and disability
insurance, term life insurance, paid holiday and vacation time
and other employee benefits paid by us. Mr. Eisenberg is
eligible to receive a bonus, payable in cash or cash
equivalents, based on a percentage of his base salary (ranging
from 18% to 140%) dependent upon achieving 90% to 133% of
certain performance targets established each year by the board
of directors. No annual incentive bonus would be paid under the
agreement relating to certain operational and financial
performance targets unless at least 90% of the applicable
performance targets established by the Compensation Committee
for that fiscal year are met or exceeded. Mr. Eisenberg
will be entitled to participate in any profit sharing
and/or
pension plan generally provided for our executives, and in any
equity option plan or restricted equity plan established by us
in which our senior executives are generally permitted to
participate.
In addition, under the agreement, we issued to
Mr. Eisenberg on March 31, 2008 an award of 425,000
time-based SAR awards. Upon the exercise of a SAR award, we will
deliver cash, shares of common stock valued at fair market value
on the date of exercise or a combination of cash and shares of
common stock, as the Compensation Committee may determine. The
time-based SAR awards have a base price equal to $4.96 per
share, the fair market value of our common stock on the date of
grant. Under the terms of the SAR award, 125,000 SARs vested on
December 31, 2008, 150,000 SARs vested on December 31,
2009 and 150,000 SARs will vest on December 31, 2010.
In addition, under his previous employment agreement, we issued
Mr. Eisenberg awards consisting of 224,000 RSUs and 130,000
SARs in October 2006. The RSUs will be payable only in shares of
our common stock and the SARs have a base price equal to $11.00
per share, (the initial public offering price of our common
stock in November 2006). One half of the RSUs consist of
time-based awards that vested in three equal installments on
January 1, 2007 and 2008 and 2009. The remaining RSUs and
all the SARs consist of performance-based awards which vested in
three equal installments in 2007, 2008 and 2009 on the
achievement of certain performance targets, for each of fiscal
years 2006, 2007 and 2008, established each year by the board of
directors or the Compensation Committee.
If Mr. Eisenbergs employment is terminated by us
without cause (as defined in the agreement) or by
him due to a material change in his status, title, position or
scope of authority or responsibility during the term of the
agreement, or any extension thereof, he is entitled to continue
to receive his base salary and continued health insurance
coverage for one year immediately following such termination.
Mr. Eisenbergs post-termination payments are
conditioned on his executing a release in favor of us. In
addition, the agreement contains standard covenants relating to
confidentiality and assignment of intellectual property rights,
a two-year post-employment non-solicitation covenant and a
one-year post-employment non-competition covenant.
36
Upon a termination of employment following a change of
control (as defined in the agreement), Mr. Eisenberg
will be entitled to the same post-employment payments as if his
employment were terminated by us without cause (as
described above), unless the successor or transferee company
continues his employment on substantially equivalent terms as
under the agreement; provided that if the change of
control transaction occurs, then the length of the
severance period during which Mr. Eisenberg receives
continued base salary and coverage under our health insurance
plan will be the longer of one year immediately following the
employment termination date or the remainder of the term of the
agreement at the time the employment termination occurs.
Robert G. Costantini. On February 21,
2008, we entered into an employment agreement with Robert G.
Costantini, our Executive Vice President and Chief Financial
Officer, effective as of March 31, 2008. Upon its
effectiveness, the agreement superseded and replaced any
previous employment agreements with Mr. Costantini (except
for any of his obligations applicable to the period prior to
March 31, 2008) and expires on December 31, 2010,
unless terminated earlier pursuant to the terms of the
agreement. The agreement may be extended by mutual agreement of
the parties. Upon the expiration of the agreements term,
and any extension thereof, Mr. Costantini will continue to
be employed on an at will basis.
The agreement provides for an annual base salary of $283,500. In
addition to his salary, Mr. Costantini is entitled to
certain employee benefits, including medical and disability
insurance, term life insurance, paid holiday and vacation time
and other employee benefits paid by us. Mr. Costantini is
eligible to receive a bonus, beginning with 2008 fiscal year,
payable in cash or cash equivalents, based on a percentage of
his base salary (ranging from 18% to 140%) dependent upon
achieving 90% to 133% of certain performance targets established
each year by the board of directors. No annual incentive bonus
would be paid under the agreement relating to certain
operational and financial performance targets unless at least
90% of the applicable performance targets established by the
Compensation Committee for that fiscal year are met or exceeded.
Mr. Costantini is entitled to participate in any profit
sharing
and/or
pension plan generally provided for our executives, and in any
equity option plan or restricted equity plan established by us
in which our senior executives are generally permitted to
participate.
In addition, under the agreement, we issued to
Mr. Costantini on March 31, 2008 an award consisting
of 250,000 time-based SARs. Upon the exercise of a SAR award, we
will deliver cash, shares of common stock valued at fair market
value on the date of exercise or a combination of cash and
shares of common stock, as the Compensation Committee may
determine. The SARs have a base price equal to $4.96 per share,
the fair market value of our common stock on the date of grant.
Under the terms of the SAR award, 50,000 SARs vested on
December 31, 2008, 100,000 SARs vested on December 31,
2009 and 100,000 SARs will vest on December 31, 2010.
In addition, under his previous employment agreement, we issued
to Mr. Costantini awards consisting of 23,333 RSUs and
133,333 SARs. The RSUs will be payable only in shares of our
common stock and the SARs will have a base price equal to $11.00
per share, (the initial public offering price of our common
stock in November, 2006). One half of the RSUs and one half of
the SARs consist of time-based awards which vested in three
equal installments on January 1, 2007, 2008 and 2009. The
remaining RSUs and SARs consist of performance-based awards
which vested in three equal installments in 2007, 2008 and 2009
on the achievement of certain performance targets, for each of
fiscal years 2006, 2007 and 2008, established each year by the
board of directors or the Compensation Committee.
If Mr. Costantinis employment is terminated by us
without cause (as defined in the agreement) or by
him due to a material change in his status, title, position or
scope of authority or responsibility during the term of the
agreement, or any extension thereof, he is entitled to continue
to receive his base salary and continued health insurance
coverage for one year immediately following such termination.
Mr. Costantinis post-termination payments are
conditioned on his executing a release in favor of us. In
addition, the agreement contains standard covenants relating to
confidentiality and assignment of intellectual property rights,
a two-year post-employment non-solicitation covenant and a
one-year post-employment non-competition covenant. Upon a
termination of his employment following a change of
control (as defined in the agreement), Mr. Costantini
will be entitled to the same post-employment payments as if his
employment were terminated
37
by the Company without cause (as described above),
unless the successor or transferee company continues his
employment on substantially equivalent terms as under his
agreement; provided that if the change of control
transaction occurs, then the length of the severance period
during which Mr. Costantini receives continued base salary
and coverage under our health insurance plan will be the longer
of one year immediately following the employment termination
date or the remainder of the term of the agreement at the time
the employment termination occurs.
John J. Stolte, Jr. On February 21,
2008, we entered into an employment agreement with John Stolte,
to serve as our Executive Vice President Technology
and Operations, effective as of March 31, 2008. Upon its
effectiveness, the agreement superseded and replaced any
previous employment agreements with Mr. Stolte (except for
any of his obligations applicable to the period prior to
March 31, 2008) and expires on December 31, 2010,
unless terminated earlier pursuant to its terms. The agreement
may be extended by mutual agreement of the parties. Upon the
expiration of the agreements term, and any extension
thereof, Mr. Stolte will continue to be employed on an
at will basis.
Mr. Stoltes agreement provides for an annual base
salary of $236,250. In addition to his salary, Mr. Stolte
is entitled to certain employee benefits, including medical and
disability insurance, term life insurance, paid holiday and
vacation time and other employee benefits paid by us.
Mr. Stolte is eligible to receive a bonus based on a
percentage of his base salary (up to 75%) dependent upon
achieving certain performance targets established each year by
the board of directors. Mr. Stolte is entitled to
participate in any profit sharing
and/or
pension plan generally provided for our executives, and in any
equity option plan or restricted equity plan established by us
in which our executives are generally permitted to participate.
In addition, under the agreement, we issued to Mr. Stolte
on March 31, 2008 an award consisting of 150,000 time-based
SARs. Upon the exercise of a SAR award, we will deliver cash,
shares of common stock valued at fair market value on the date
of exercise or a combination of cash and shares of common stock,
as the Compensation Committee may determine. The SARs have a
base price equal to $4.96 per share, the fair market value of
our common stock on the date of grant. Under the terms of the
SAR award, 30,000 SARs vested on December 31, 2008, 60,000
SARs vested on December 31, 2009 and 60,000 SARs will vest
on December 31, 2010.
In addition, under his previous employment agreement, we issued
to Mr. Stolte 121,333 RSUs. These RSUs will be payable only
in shares of our common stock. One half of the RSUs consist of
time-base awards that vested in three equal installments on
May 21, 2007, May 21, 2008 and January 1, 2009.
The remaining RSUs consist of performance-based awards which
vested based on achieving certain operational targets by
specified dates.
If Mr. Stoltes employment is terminated by reason of
his death or disability, or by us without cause (as
defined in the agreement) during the term of the agreement, or
any extension thereof, he or his estate is entitled to continue
to receive his then current base salary for one year immediately
following such termination. Mr. Stoltes
post-termination payments are conditioned on his executing a
release in favor of us. In addition, the agreement contains
standard covenants relating to confidentiality and assignment of
intellectual property rights, a two-year post-employment
non-solicitation covenant and a one-year post-employment
non-competition covenant. Upon a termination of his employment
following a change of control (as defined in the
agreement), Mr. Stolte will be entitled to the same
post-employment payments as if his employment were terminated by
us without cause (as described above), unless the
successor or transferee company continues his employment on
substantially equivalent terms as under the agreement.
Christian G. Le Brun. On February 21,
2008, we entered into an employment agreement with Christian G.
Le Brun to serve as our General Counsel and Executive Vice
President effective as of March 31, 2008. The employment
agreement expires on December 31, 2010 unless terminated
earlier pursuant to the terms of the agreement. The agreement
may be extended by mutual agreement of the parties. Upon the
expiration of the agreements term, and any extension
thereof, Mr. Le Brun will continue to be employed on an
at will basis.
Mr. Le Bruns employment agreement provides for an
annual base salary of $201,300. In addition to his salary,
Mr. Le Brun is entitled to certain employee benefits,
including medical and disability insurance, term
38
life insurance, paid holiday and vacation time and other
employee benefits paid by us. Mr. Le Brun is eligible to
receive a bonus based on a percentage of his base salary (up to
75%) dependent upon achieving certain performance targets
established each year by the board of directors. Mr. Le
Brun is entitled to participate in any profit sharing
and/or
pension plan generally provided for our executives, and in any
equity option plan or restricted equity plan established by us
in which our executives are generally permitted to participate.
In addition, under Mr. Le Bruns employment agreement,
we issued on March 31, 2008 an award consisting of 150,000
time-based SARs. Upon the exercise of a SAR award, we will
deliver cash, shares of common stock valued at fair market value
on the date of exercise or a combination of cash and shares of
common stock, as the Compensation Committee may determine. The
SARs have a base price equal to $4.96 per share, the fair market
value of our common stock on the date of grant. Under the terms
of the SAR award, 30,000 SARs vested on December 31, 2008,
60,000 SARs vested on December 31, 2009 and 60,000 SARs
will vest on December 31, 2010.
If Mr. Le Bruns employment is terminated by us
without cause (as defined in his agreement) during
the term of the agreement, or any extension thereof, he is
entitled to continue to receive his then current base salary for
one year immediately following such termination. Mr. Le
Bruns post-termination payments are conditioned on his
executing a release in favor of us. In addition, the agreement
contains standard covenants relating to confidentiality and
assignment of intellectual property rights, a two-year
post-employment non-solicitation covenant and a one-year
post-employment non-competition covenant. Upon a termination of
his employment following a change of control (as
defined in his agreement), Mr. Le Brun will be entitled to
the same post-employment payments as if his employment were
terminated by us without cause (as described above),
unless the successor or transferee company continues his
employment on substantially equivalent terms as under the
agreement.
Brian J. Bell. We entered into an employment
agreement with Brian J. Bell on July 22, 2009, effective
July 1, 2009 to serve as our Executive Vice President of
Sales and Marketing. The employment agreement expires on
December 31, 2010 unless terminated earlier pursuant to the
terms of the agreement. The agreement may be extended by mutual
agreement of the parties. Upon the expiration of the
agreements term, and any extension thereof, Mr. Bell
will continue to be employed on an at will basis.
Mr. Bells employment agreement provides for an annual
base salary of $205,000. In addition to his salary,
Mr. Bell is entitled to certain employee benefits,
including medical and disability insurance, term life insurance,
paid holiday and vacation time and other employee benefits paid
by us. Mr. Bell is eligible to receive a bonus based on a
percentage of his base salary (up to 75%) dependent upon
achieving certain performance targets established each year by
the board of directors. Mr. Bell is entitled to participate
in any profit sharing
and/or
pension plan generally provided for our executives, and in any
equity option plan or restricted equity plan established by us
in which our executives are generally permitted to participate.
In addition, under Mr. Bells employment agreement, on
July 22, 2009 we issued an award consisting of 70,000
time-based RSUs. The RSUs will be payable only in shares of our
common stock. The RSUs will vest in three equal installments on
July 1, 2010, 2011 and 2012.
If Mr. Bells employment is terminated by us without
cause (as defined in his agreement) during the term
of the agreement, or any extension thereof, he is entitled to
continue to receive his then current base salary and continued
health insurance coverage for one year immediately following
such termination. Mr. Bells post-termination payments
are conditioned on his executing a release in favor of us. In
addition, the agreement contains standard covenants relating to
confidentiality and assignment of intellectual property rights,
a two-year post-employment non-solicitation covenant and a
one-year post-employment non-competition covenant. Upon a
termination of his employment following a change of
control (as defined in his agreement), Mr. Bell will
be entitled to the same post-employment payments as if his
employment were terminated by us without cause (as
described above), unless the successor or transferee company
continues his employment on substantially equivalent terms as
under the agreement.
39
Indemnity
Agreements
We have entered into indemnification agreements with each of our
directors. In addition, we have entered into indemnification
agreements with certain of our executive officers in their
capacity as our executive officers and as directors of certain
of our subsidiaries. Each indemnification agreement provides
that we will, subject to certain exceptions, indemnify the
indemnified person in respect of any and all expenses incurred
as a result of any threatened, pending or completed action, suit
or proceedings involving the indemnified person and relating to
the indemnified persons service as an executive officer or
director of ours. We will also indemnify the indemnified person
to the fullest extent as may be provided under the provisions of
our By-Laws and Delaware law. The indemnification period lasts
for as long as the indemnified person is an executive officer or
director of ours and continues if the indemnified person is
subject to any possible claim or threatened, pending or
completed action, suit or proceeding, whether civil, criminal,
arbitration, administrative or investigative, by reason of fact
that the indemnified person was serving in such capacity. Upon
request, we must advance all expenses incurred by the
indemnified person in connection with any proceeding, provided
the indemnified person undertakes to repay the advanced amounts
if it is determined ultimately that the indemnified person is
not entitled to be indemnified under any provision of the
indemnification agreement, our By-Laws, Delaware law or
otherwise.
Policies
and Procedures for Related Person Transactions
Pursuant to the Audit Committees charter and applicable
NASDAQ rules, the Audit Committee is responsible for reviewing
and approving all related party transactions (as defined by the
NASDAQ rules).
POTENTIAL
SERVICE PAYMENTS UPON TERMINATION OR CHANGE OF CONTROL
The following tables below reflect the amount of compensation
payable to each Named Executive Officer in the event of
termination of such executives employment or upon a change
of control based on the applicable provisions of the Named
Executive Officers employment agreement, RSU award
agreements and SAR award agreements. The amount of compensation
payable to each Named Executive Officer upon voluntary
termination, termination without cause, change of control,
disability or death is shown below for Messrs. Eisenberg,
Costantini, Stolte, Le Brun and Bell. All severance payments to
the Named Executive Officers are conditioned on the execution of
a release discharging the Company of any claims or liabilities
in relation to the Named Executive Officers employment
with the Company. The tables assume an effective date of a
change of control and termination of employment on
December 31, 2009 and the amount of compensation payable to
each Named Executive Officer is based upon the employment
agreement for such Named Executive Officer as in effect as of
that date. See Certain Relationships and Transactions with
Related Persons Employment Agreements for
descriptions of the employment agreements currently in effect
for our Named Executive Officers, which may provide for amounts
different than those set forth in the following tables.
Change of
Control Triggers
For the purposes of the severance payments, change of
control means:
|
|
|
|
|
the Companys merger or consolidation with another
corporation or entity;
|
|
|
|
the Companys transfer of all or substantially all of its
assets to another person, corporation, or other entity; or
|
|
|
|
a sale of the Companys stock in a single transaction or
series of related transactions that results in the holders of
the outstanding voting power of the Company immediately prior to
such transaction or series of transactions owning less than a
majority of the outstanding voting securities for the election
of directors of the surviving company or entity immediately
following such transaction or series of transactions (other than
any registered, underwritten public offering by the Company of
the Companys stock or pursuant to any stock-based
compensation plan of the Company).
|
40
For purposes of the stock option awards, a change of
control means the purchase or other acquisition by any
person, entity or group of persons, within the meaning of
Section 13(d) or 14(d) of the Exchange Act, or any
comparable successor provisions, of:
|
|
|
|
|
ownership of more than 50% or more of the combined voting power
of the Companys then outstanding voting securities
entitled to vote generally; or
|
|
|
|
all or substantially all of the direct and indirect assets of
the Company and its subsidiaries, other than by a person, firm,
entity or group, which together with its affiliates, prior to
such purchase or other acquisition, owned at least 50% of the
outstanding common equity of the Company.
|
For purposes of the RSU awards and SAR awards, change of
control means a change in control event that
meets the requirements of Section 409A of the Code, as
amended from time to time, including any proposed and final
regulations and other guidance issued thereunder by the
Department of the Treasury
and/or the
Internal Revenue Service.
Post-Termination
Covenants
The RSU awards and SAR awards are subject to a non-competition
provision restricting the Named Executive Officers
employment with a competitor for six months following
termination. The RSU awards and SAR awards are also subject to a
non-solicitation provision restricting the Named Executive
Officer from soliciting certain business or recruiting certain
of the Companys employees for one year following
termination. If the Company determines that the Named Executive
Officer violated these provisions of the RSU award or SAR award,
the Named Executive Officer will forfeit all rights to any RSUs
or SARs under the awards and will have to return to the Company
the value of any RSUs or SARs awarded to the Named Executive
Officer by the Company. The Named Executive Officers are also
subject to post-termination non-competition, non-solicitation
and confidentiality provisions in their employment agreements.
See Certain Relationships and Transactions with Related
Persons Employment Agreements.
Marc
Eisenberg
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Voluntary
|
|
|
|
|
|
|
|
|
Termination
|
|
|
|
|
|
|
Executive Payments
|
|
With Good
|
|
Termination
|
|
For Cause
|
|
Change in
|
Upon Termination
|
|
Reason(1)
|
|
Without Cause(1)
|
|
Termination(1)
|
|
Control(1)
|
|
Severance payments(2)
|
|
$
|
371,091
|
|
|
$
|
371,091
|
|
|
$
|
|
|
|
$
|
371,091
|
|
Time-based RSUs (unvested and accelerated)(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Time-based SARs (unvested and accelerated)(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance-based RSUs (unvested and accelerated)(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance-based SARs (unvested and accelerated)(6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Assumes an effective date of a change of control or termination
on December 31, 2009. |
|
(2) |
|
Severance Payments: Under the terms of his
employment agreement, in the event Mr. Eisenbergs
employment is involuntarily terminated without cause by the
Company or he voluntarily terminates his employment due to a
material change in his status, title, position or scope of
authority or responsibilities, he would be entitled to one year
of his base salary in effect at the time of such termination
payable in regular installments consistent with our payroll
practices. He is also entitled to continued health insurance
coverage for one year immediately following such termination at
then existing employee contribution rates representing a benefit
valued at $6,091 at December 31, 2009. In the event
Mr. Eisenbergs employment is terminated following a
change of control or his employment is not continued on
substantially equivalent terms following a change of control, he
will be entitled to continued base salary and health insurance |
41
|
|
|
|
|
coverage for the longer of one year following the termination
date or the remaining term of the agreement at the time of
termination. |
|
(3) |
|
Time-Based RSUs: Under the applicable award
agreement, in the event of a change of control having a value in
excess of $6.045 per share, Mr. Eisenberg would be entitled
to immediate vesting of all unvested time-based RSU awards. As
of December 31, 2009, he had no unvested time-based RSU
awards. |
|
(4) |
|
Time-Based SARs: Under the applicable award
agreement, in the event of a change of control having a value in
excess of $6.045 per share, Mr. Eisenberg would be entitled
to immediate vesting of all unvested time-based SAR awards. As
of December 31, 2009, he had 150,000 unvested time-based
SARs. The potential amounts earned by Mr. Eisenberg as a
result of the immediate vesting of these time-based SAR awards
following a change of control are not shown in the table as the
closing price of the Companys common stock of $2.70 per
share as of December 31, 2009 was lower than the SAR base
price of $4.96 per share. |
|
(5) |
|
Performance-Based RSUs: Under the applicable
award agreement, in the event of a change of control having a
value in excess of $6.045 per share, Mr. Eisenberg would be
entitled to immediate vesting of all unvested performance-based
RSU awards, without regard to the achievement of applicable
performance targets. As of December 31, 2009, he had no
unvested performance-based RSU awards. |
|
(6) |
|
Performance-Based SARs: Under the applicable
award agreement, in the event of a change of control having a
value in excess of $6.045 per share, Mr. Eisenberg would be
entitled to immediate vesting of all unvested performance-based
SAR awards, without regard to the achievement of applicable
performance targets. As of December 31, 2009, he had no
unvested performance-based SAR awards. |
Robert
Costantini
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Voluntary
|
|
|
|
|
|
|
|
|
|
|
Termination
|
|
Termination
|
|
|
|
|
|
|
Executive Payments
|
|
With Good
|
|
Without
|
|
For Cause
|
|
Change in
|
|
|
Upon Termination
|
|
Reason(1)
|
|
Cause(1)
|
|
Termination(1)
|
|
Control(1)
|
|
|
|
Severance payments(2)
|
|
$
|
289,611
|
|
|
$
|
289,611
|
|
|
$
|
|
|
|
$
|
289,611
|
|
|
|
|
|
Time-based RSUs (unvested and accelerated)(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
81,000
|
|
|
|
|
|
Time-based SARs (unvested and accelerated)(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance-based RSUs (unvested and accelerated)(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance-based SARs (unvested and accelerated)(6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Assumes an effective date of a change of control or termination
on December 31, 2009. |
|
(2) |
|
Severance Payments: Under the terms of his
employment agreement, in the event Mr. Costantinis
employment is involuntarily terminated without cause by the
Company or he voluntarily terminates his employment due to a
material change in his status, title, position or scope of
authority or responsibilities, he would be entitled to one year
of his base salary in effect at the time of such termination
payable in regular installments consistent with our payroll
practices. He is also entitled to continued health insurance
coverage for one year immediately following such termination at
then existing employee contribution rates representing a benefit
valued at $6,091 at December 31, 2009. In the event
Mr. Costantinis employment is terminated following a
change of control, or his employment is not continued on
substantially equivalent terms following a change of control, he
will be entitled to continued base salary and health insurance
coverage for the longer of one year following the termination
date or the remaining term of the agreement at the time of
termination. |
|
(3) |
|
Time-Based RSUs: Under the applicable award
agreement, in the event of a change of control having a value in
excess of $6.045 per share, Mr. Costantini would be
entitled to immediate vesting of all unvested time-based RSU
awards. As of December 31, 2009, he had 30,000 unvested
time-based RSU awards with |
42
|
|
|
|
|
a value based on the closing price of the Companys common
stock of $2.70 per share as of December 31, 2009. |
|
(4) |
|
Time-Based SARs: Under the applicable award
agreement, in the event of a change of control having a value in
excess of $6.045 per share, Mr. Costantini would be
entitled to immediate vesting of all unvested time-based SAR
awards. As of December 31, 2009, he had 100,000 unvested
time-based SARs. The potential amounts earned by
Mr. Costantini as a result of the immediate vesting of
these time-based SAR awards following a change of control are
not shown in the table as the closing price of the
Companys common stock of $2.70 per share as of
December 31, 2009 was lower than the SAR base price of
$4.96 per share. |
|
(5) |
|
Performance-Based RSUs: Under the applicable
award agreement, in the event of a change of control having a
value in excess of $6.045 per share, Mr. Costantini would
be entitled to immediate vesting of all unvested
performance-based RSU awards, without regard to the achievement
of applicable performance targets. As of December 31, 2009,
he had no unvested performance-based RSU awards. |
|
(6) |
|
Performance-Based SARs: Under his employment
agreement and the applicable award agreement, in the event of a
change of control having a value in excess of $6.045 per share,
Mr. Costantini would be entitled to immediate vesting of
all unvested performance-based SAR awards, without regard to the
achievement of applicable performance targets. As of
December 31, 2009, he had no unvested performance-based SAR
awards. |
John J.
Stolte, Jr.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination
|
|
|
|
|
|
|
|
|
Executive Payments
|
|
Voluntary
|
|
Without
|
|
For Cause
|
|
Change in
|
|
|
|
|
Upon Termination
|
|
Termination(1)
|
|
Cause(1)
|
|
Termination(1)
|
|
Control(1)
|
|
Death(1)
|
|
Disability(1)
|
|
Severance payments(2)
|
|
$
|
|
|
|
$
|
236,250
|
|
|
$
|
|
|
|
$
|
236,250
|
|
|
$
|
236,250
|
|
|
$
|
236,250
|
|
Time-based RSUs (unvested and accelerated)(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Time-based SARs (unvested and accelerated)(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Assumes an effective date of a change of control or termination
on December 31, 2009. |
|
(2) |
|
Severance Payments: Under the terms of his
employment agreement, in the event Mr. Stoltes
employment is (a) involuntarily terminated without cause by
the Company, (b) terminated due to death or disability or
(c) not continued on substantially equivalent terms
following a change of control, he would be entitled to one year
of his base salary in effect at the time of such termination
payable in regular installments consistent with our payroll
practices. |
|
(3) |
|
Time-Based RSUs: Under the applicable award
agreement, in the event of a change of control having a value in
excess of $6.045 per share, Mr. Stolte would be entitled to
immediate vesting of all unvested time-based RSU awards. As of
December 31, 2009, he had no unvested time-based RSU awards. |
|
(4) |
|
Time-Based SARs: Under the applicable award
agreement, in the event of a change of control having a value in
excess of $6.045 per share, Mr. Stolte would be entitled to
immediate vesting of all unvested time-based SAR awards. As of
December 31, 2009, he had 60,000 unvested time-based SARs.
The potential amounts earned by Mr. Stolte as a result of
the immediate vesting of these time-based SAR awards following a
change of control are not shown in the table as the closing
price of the Companys common stock of $2.70 per share as
of December 31, 2009 was lower than the SAR base price of
$4.96 per share. |
43
Christian
G. Le Brun
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive Payments
|
|
Voluntary
|
|
Termination
|
|
For Cause
|
|
Change in
|
|
|
Upon Termination
|
|
Termination(1)
|
|
Without Cause(1)
|
|
Termination(1)
|
|
Control(1)
|
|
|
|
Severance payments(2)
|
|
$
|
|
|
|
$
|
201,300
|
|
|
$
|
|
|
|
$
|
201,300
|
|
|
|
|
|
Time-based RSUs (unvested and accelerated)(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Time-based SARs (unvested and accelerated)(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance-based RSUs (unvested and accelerated)(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Assumes an effective date of a change of control or termination
on December 31, 2009. |
|
(2) |
|
Severance Payments: Under the terms of his
employment agreement, in the event Mr. Le Bruns
employment is involuntarily terminated without cause he would be
entitled to one year of his base salary in effect at the time of
such termination payable in regular installments consistent with
our payroll practices. In the event Mr. Le Bruns
employment is terminated following a change of control or his
employment is not continued on substantially equivalent terms
following a change in control, he will be entitled to the same
severance payments as described above. |
|
(3) |
|
Time-Based RSUs: Under the applicable award
agreement, in the event of a change of control having a value in
excess of $6.045 per share, Mr. Le Brun would be entitled
to immediate vesting of all unvested time-based RSU awards. As
of December 31, 2009, he had no unvested time-based RSU
awards. |
|
(4) |
|
Time-Based SARs: Under the applicable award
agreement, in the event of a change of control having a value in
excess of $6.045 per share, Mr. Le Brun would be entitled
to immediate vesting on all unvested time-based SAR awards. As
of December 31, 2009, he had 60,000 unvested time-based
SARs. The potential amounts earned by Mr. Le Brun as a
result of the immediate vesting of these time-based SAR awards
following a change of control are not shown in the table as the
closing price of the Companys common stock of $2.16 per
share as of December 31, 2008 was lower than the SAR base
price of $4.96 per share. |
|
(5) |
|
Performance-Based RSUs: Under the applicable
award agreement, in the event of a change of control having a
value in excess of $6.045 per share, Mr. Le Brun would be
entitled to immediate vesting of all unvested performance-based
RSU awards, without regard to the achievement of applicable
performance targets. As of December 31, 2009, he had no
unvested performance-based RSU awards. |
Brian J.
Bell
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive Payments
|
|
Voluntary
|
|
Termination
|
|
For Cause
|
|
Change in
|
|
|
Upon Termination
|
|
Termination(1)
|
|
Without Cause(1)
|
|
Termination(1)
|
|
Control(1)
|
|
|
|
Severance payments(2)
|
|
$
|
|
|
|
$
|
211,091
|
|
|
$
|
|
|
|
$
|
211,091
|
|
|
|
|
|
Time-based RSUs (unvested and accelerated)(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
189,000
|
|
|
|
|
|
|
|
|
(1) |
|
Assumes an effective date of a change of control or termination
on December 31, 2009. |
|
(2) |
|
Severance Payments: Under the terms of his
employment agreement, in the event Mr. Bells
employment is involuntarily terminated without cause he would be
entitled to one year of his base salary in effect at the time of
such termination payable in regular installments consistent with
our payroll practices. He is also entitled to continued health
insurance coverage for one year following such termination at
then existing employee contribution rates representing a benefit
valued at $6,091 at December 31, 2009. In the event
Mr. Bells employment is terminated following a change
of control or his employment is not continued on substantially
equivalent terms following a change in control, he will be
entitled to the same severance payments as described above. |
|
(3) |
|
Time-Based RSUs: Under the applicable award
agreement, in the event of a change of control having a value in
excess of $6.045 per share, Mr. Bell would be entitled to
immediate vesting of all unvested time-based RSU awards. As of
December 31, 2009, he had 70,000 unvested time-based RSU
awards with a value based on the closing price of the
Companys common stock of $2.70 per share as of
December 31, 2009. |
44
PROPOSAL TO
RATIFY THE APPOINTMENT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
(PROPOSAL 2)
Change of
Independent Registered Public Accounting Firm
On August 27, 2009, the Audit Committee of our Board of
Directors dismissed Deloitte & Touche LLP as the
Companys independent registered public accounting firm and
approved the engagement of KPMG LLP as the Companys
independent registered public accounting firm for the fiscal
year ended December 31, 2009. In connection with our change
in accountants, there were no disagreements or reportable events
required to be disclosed pursuant to
Regulation S-K,
Item 304(a)(1)(iv) and Item 304(a)(1)(v).
The audit reports of Deloitte & Touche LLP on the
consolidated financial statements of the Company for years ended
December 31, 2008 and December 31, 2007 did not
contain an adverse opinion or disclaimer of opinion and were not
qualified or modified as to uncertainty, audit scope or
accounting principles, and the audit report of
Deloitte & Touche LLP on the effectiveness of internal
control over financial reporting as of December 31, 2008
did not contain any adverse opinion or disclaimer of opinion and
was not qualified or modified as to uncertainty, audit scope or
accounting principles.
During the Companys fiscal years ended December 31,
2008 and December 31, 2007 and the subsequent periods
through August 27, 2009, there were no disagreements with
Deloitte & Touche LLP on any matter of accounting
principles or practices, financial statement disclosure, or
auditing scope or procedure, which disagreements, if not
resolved to Deloitte & Touche LLPs satisfaction,
would have caused Deloitte & Touche LLP to make
reference to the subject matter of such disagreements in
connection with its reports on the consolidated financial
statements for such periods.
During the Companys fiscal years ended December 31,
2008 and December 31, 2007 and the subsequent periods
through August 27, 2009, there were no reportable events
(as defined in Item 304(a) (1)(v) of
Regulation S-K).
In accordance with Item 304(a)(3) of
Regulation S-K,
we provided Deloitte & Touche LLP with a copy of the
disclosures made in a Current Report on
Form 8-K
filed on September 2, 2009 (the
Form 8-K)
prior to its filing with the Securities and Exchange Commission
(the SEC). We requested Deloitte & Touche
LLP to furnish the Company with a letter addressed to the SEC
stating whether or not it agreed with the statements made
therein. Such letter was filed as Exhibit 16.1 to the
Form 8-K.
During the Companys fiscal years ended December 31,
2008 and December 31, 2007, and prior to engaging KPMG LLP,
the Company did not consult KPMG LLP with respect to the
application of accounting principles to a specified transaction,
either completed or proposed, or the type of audit opinion that
might be rendered on the Companys consolidated financial
statements, or any matter that was either the subject of a
disagreement (as defined in Item 304(a)(1)(iv) of
Regulation S-K)
or a reportable event (as defined in Item 304(a)(1)(v) of
Regulation S-K).
The Audit Committee has appointed the firm of KPMG LLP as our
independent registered public accounting firm for the fiscal
year ending December 31, 2010, subject to the ratification
of the shareholders.
Before the Audit Committee appointed KPMG it carefully
considered the independence and qualifications of that firm,
including their performance in the prior year and their
reputation for integrity and for competence in the fields of
accounting and auditing. We expect that representatives of KPMG
will be present at the Annual Meeting to respond to appropriate
questions and to make a statement if they desire to do so.
45
Principal
Accountant Fees
The following table sets forth the aggregate fees for
professional services provided by KPMG and Deloitte &
Touche LLP for the fiscal years ended December 31, 2009 and
2008 all of which were approved by the Audit Committee:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended
|
|
|
Year Ended
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
KPMG
|
|
|
Deloitte & Touche LLP
|
|
|
|
2009
|
|
|
2008
|
|
|
2009
|
|
|
2008
|
|
|
Audit Fees
|
|
$
|
364,680
|
|
|
$
|
|
|
|
$
|
297,300
|
|
|
$
|
1,135,101
|
|
Audit-Related Fees
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax Fees
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Other Fees
|
|
|
1,500
|
|
|
|
|
|
|
|
|
|
|
|
2,500
|
|
Audit Fees. Consisted principally of fees for
professional services for the audit of the Companys annual
financial statements and internal control over financial
reporting and the reviews of the Companys quarterly
financial statements for fiscal year 2009 and 2008.
All other Fees. Represents fees for
subscription services to professional literature databases.
There were no tax or audit-related services provided by KPMG in
fiscal year 2009 or by Deloitte & Touche LLP in fiscal
years 2009 and 2008.
Audit
Committee Pre-Approval Policies and Procedures
The Audit Committee is responsible for the appointment and
compensation of, and oversight of the work performed by, our
independent registered public accounting firm. The Audit
Committee pre-approves all audit (including audit-related)
services and permitted non-audit services provided by our
independent registered public accounting firm in accordance with
the pre-approval policies and procedures established by the
Audit Committee.
The Audit Committee annually approves the scope and fee
estimates for the annual audit to be performed by our
independent registered public accounting firm for the next
fiscal year. With respect to other permitted services,
management defines and presents specific projects for which the
advance approval of the Audit Committee is requested. The Audit
Committee pre-approves specific engagements and projects on a
fiscal year basis, subject to individual project thresholds and
annual thresholds. The Chief Financial Officer reports to the
Audit Committee regarding the aggregate fees charged by our
independent registered public accounting firm compared to the
pre-approved amounts.
The board of directors recommends that you vote FOR
the proposal to ratify the appointment of KPMG as our
independent registered public accounting firm, which is
presented as Proposal 2.
46
OTHER
MATTERS
The board of directors is not aware of any other matters to be
presented for action by the shareholders at the Annual Meeting.
In the event of a vote on any matters other than those referred
to in the accompanying Notice of 2010 Annual Meeting of
Shareholders properly come before the meeting, proxies in the
accompanying form will be voted in accordance with the best
judgment of the persons voting such proxies.
SECTION 16(a)
BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934
requires our executive officers and directors, and persons who
own more than ten percent of a registered class of our equity
securities, to file reports of ownership and changes in
ownership on Forms 3, 4 and 5 with the SEC and NASDAQ.
Based on our review of the copies of such forms that we have
received and written representations from certain reporting
persons confirming that they were not required to file
Forms 5 for specified fiscal years, we believe that all our
executive officers, directors and greater than ten percent
beneficial owners complied with applicable SEC filing
requirements under Section 16(a) during fiscal year 2009.
ANNUAL
REPORT
Our 2009 Annual Report to Shareholders, including the Annual
Report on
Form 10-K
and financial statements, for the fiscal year ended
December 31, 2009, was sent or made available to
shareholders with this proxy statement. A copy of our 2009
Annual Report to Shareholders is also available on the internet
at
http://bnymellon.mobular.net/bnymellon/orbc.
SHAREHOLDER
PROPOSALS FOR ANNUAL MEETING IN 2011
To be eligible for inclusion in our proxy statement and the
proxy card pursuant to
Rule 14a-8,
shareholder proposals for the 2011 Annual Meeting of
Shareholders must be received on or before December 1, 2010
by the Office of the Secretary at our headquarters, 2115 Linwood
Avenue, Suite 100, Fort Lee, New Jersey 07024. In
order for shareholder proposals made outside of
Rule 14a-8
under the Exchange Act to be considered timely
within the meaning of
Rule 14a-4(c)
under the Exchange Act, such proposals must be received by the
Office of the Secretary at the above address by January 29,
2011. If the proposal is not timely within the
meaning of
Rule 14a-4(c),
the proxies solicited by us for the 2011 Annual Meeting of
Shareholders may confer discretionary authority to us on such
proposal. In addition, our By-Laws require a shareholder
desiring to propose any matter for consideration of the
shareholders at the 2011 Annual Meeting of Shareholders or to
nominate an individual to our board of directors to notify the
Office of the Secretary in writing at the address above on or
after December 30, 2010 and on or before January 29,
2011. If the number of directors to be elected to the board at
the 2011 Annual Meeting of Shareholders is increased and we do
not make a public announcement naming all of the nominees for
director or specifying the increased size of the board on or
before January 19, 2011, a shareholder proposal with
respect to nominees for any new position created by such
increase will be considered timely if received at the Office of
the Secretary not later than the tenth day following our public
announcement of the increase.
EXPENSES
OF SOLICITATION
We will bear the cost of the solicitation of proxies. In
addition to mail and
e-mail,
proxies may be solicited personally, or by telephone or
facsimile, by a few of our regular employees without additional
compensation. We will reimburse brokers and other persons
holding stock in their names, or in the names of nominees, for
their expenses for forwarding proxy materials to principals and
beneficial owners and obtaining their proxies.
47
ADMISSION
TO THE 2010 ANNUAL MEETING
An admission ticket (or other proof of stock ownership) and
proper identification will be required for admission to the
Annual Meeting of Shareholders on April 29, 2010. Admission
tickets are printed on the outside back cover of this proxy
statement. To enter the meeting, you will need an admission
ticket or other proof that you are a shareholder. If you hold
your shares through a broker or nominee, you will need to bring
either a copy of the voting instruction card provided by your
broker or nominee, or a copy of a brokerage statement showing
your ownership as of the March 15, 2010 record date.
Notice:
If you plan on attending the 2010 Annual Meeting,
please cut out and use the admission ticket(s) below.
No
admission will be granted without an admission ticket.
Annual
Meeting of Shareholders
April 29, 2010, 8:00 a.m. (local time)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hyatt Dulles
2300 Dulles Corner Boulevard
Herndon, Virginia 20171
1-703-713-1234
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PLEASE
VOTE YOUR SHARES VIA THE TELEPHONE OR INTERNET, OR SIGN,
DATE
AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
|
|
|
|
ADMISSION TICKET
|
|
|
ADMISSION TICKET
|
|
|
|
|
ORBCOMM Inc.
|
|
|
ORBCOMM Inc.
|
|
|
|
|
2010 Annual Meeting of Shareholders
|
|
|
2010 Annual Meeting of Shareholders
|
|
|
|
|
Hyatt Dulles
|
|
|
Hyatt Dulles
|
2300 Dulles Corner Boulevard
|
|
|
2300 Dulles Corner Boulevard
|
Herndon, Virginia 20171
|
|
|
Herndon, Virginia 20171
|
1-703-713-1234
|
|
|
1-703-713-1234
|
|
|
|
|
April 29, 2010
|
|
|
April 29, 2010
|
8:00 a.m. (local time)
|
|
|
8:00 a.m. (local time)
|
Admit ONE
|
|
|
Admit ONE
|
|
|
|
|
YOUR VOTE IS IMPORTANT. PLEASE VOTE TODAY.
We encourage you to take advantage of Internet or telephone voting.
Both are available 24 hours a day, 7 days a week.
Internet and telephone voting is available through 11:59 PM Eastern Time on April 28, 2010.
INTERNET
http://www.proxyvoting.com/orbc
Use the Internet to vote your
proxy. Have your proxy card in
hand when you
access the web site.
OR
TELEPHONE
1-866-540-5760
Use any touch-tone telephone to
vote your proxy. Have your proxy
card in
hand when you call.
If you vote your proxy by
Internet or by telephone, you
do NOT need to mail back your
proxy card.
To vote by mail, mark, sign and
date your proxy card and return
it in the enclosed postage-paid
envelope.
Your Internet or telephone vote
authorizes the named proxies to
vote your shares in the same
manner as if you marked, signed
and returned your proxy card.
WO#
70236
▼ FOLD AND DETACH
HERE ▼
|
|
|
|
|
|
|
|
|
Please mark your votes as
indicated in this example
|
|
x
|
|
|
THIS PROXY WILL BE VOTED AS DIRECTED, OR IF NO DIRECTION IS INDICATED, WILL BE VOTED FOR THE PROPOSALS
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
|
|
|
|
|
|
|
The Board of Directors recommends |
|
FOR |
|
WITHHOLD |
|
*EXCEPTIONS |
a vote FOR Items 1 and 2 and 3. |
|
ALL |
|
FOR ALL |
|
|
|
|
|
|
|
|
|
1. Election of Directors Nominees: |
|
o |
|
o |
|
o |
|
|
|
|
|
|
|
01 DIDIER DELEPINE |
|
|
|
|
|
|
02 HANS E.W. HOFFMANN |
|
|
|
|
|
|
03 GARY H. RITONDARO |
|
|
|
|
|
|
(INSTRUCTIONS: To withhold authority to vote for any individual nominee, mark the
Exceptions box above and write that nominees name in the space provided below.)
*Exceptions
|
|
|
|
|
|
|
|
|
FOR |
|
AGAINST |
|
ABSTAIN |
|
|
|
|
|
|
|
2. RATIFICATION OF KPMG LLP AS INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM |
|
o |
|
o |
|
o |
In their discretion, the proxies are authorized to vote upon such other business as may
properly come before the meeting or any postponement or adjournment thereof.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WILL ATTEND |
|
|
|
|
|
|
If you plan to attend the Annual Meeting, please mark the
WILL ATTEND box |
|
|
|
|
o |
|
|
|
|
|
|
|
|
|
|
|
Mark Here for
Address Change
or Comments
SEE REVERSE
| |
o
|
|
NOTE: Please sign as name appears hereon. Joint owners should each sign personally. When
signing as attorney, executor, administrator, trustee or guardian, please give full title as such.
ANNUAL MEETING OF SHAREHOLDERS
THURSDAY, APRIL 29, 2010
8:00 AM EDT
HYATT DULLES
2300 DULLES CORNER BLVD.
HERNDON, VA 20171
YOUR VOTE IS
IMPORTANT!
YOU CAN VOTE BY INTERNET, TELEPHONE OR MAIL, SEE THE
INSTRUCTIONS ON THE OTHER SIDE OF THIS PROXY CARD.
You may obtain copies
of the Proxy Statement and Annual Report on the Internet at
www.orbcomm.com
Choose MLinkSM for fast, easy and secure 24/7
online access to your future proxy materials, investment plan
statements, tax documents and more. Simply log on to Investor
ServiceDirect® at
www.bnymellon.com/shareowner/isd where step-by-step
instructions will prompt you through enrollment.
Important notice regarding the Internet availability of proxy materials
for the Annual Meeting of shareholders. The Proxy Statement and the 2009
Annual Report to Shareholders are available at:
http://bnymellon.mobular.net/bnymellon/orbc
▼ FOLD AND DETACH HERE ▼
PROXY CARD
ORBCOMM INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Marc Eisenberg and Christian G. Le Brun, jointly and
severally, proxies, with full power of substitution, to vote shares of common stock which the
undersigned is entitled to vote at the Annual Meeting of Shareholders to be held on April 29,
2010 or any postponement or adjournment thereof. Such proxies are directed to vote as specified
or, if no specification is made, FOR the election of the three nominees proposed for election
as directors with terms expiring at the Annual Meeting in 2013 and FOR Proposal 2, and to vote
in accordance with their discretion on such other matters as may properly come before the
meeting.
TO VOTE IN ACCORDANCE WITH THE BOARD OF DIRECTORS RECOMMENDATIONS, JUST SIGN AND DATE; NO
BOXES NEED TO BE CHECKED.
(Continued and to be marked, dated and signed, on the other side)
Address Change/Comments
(Mark the corresponding box on the reverse side)
BNY MELLON SHAREOWNER SERVICES
P.O. BOX 3550
SOUTH HACKENSACK, NJ 07606-9250
WO#
70236