Mr. Eddy Hartenstein

As of January 1, 2004

Page 1

 

EXHIBIT 10.3

 

As of January 1, 2004

 

Mr. Eddy Hartenstein.

The DIRECTV Group, Inc.

2250 E. Imperial Highway

Building R11/Mail Station N350

EI Segundo, CA 90245-0956

 

Dear Eddy:

 

This letter agreement (“Agreement”) provides the terms of your employment with
The DIRECTV Group, Inc. (the “Company”).

 

  1. (a) The Company hereby employs you for a period of three years commencing
as of January 1, 2004 and ending on the third anniversary hereof (the “Term”).

 

     (b) If you continue in the employ of the Company after the end of the Tenn
and an extension of your employment has not been negotiated, your employment
shall be on an at-will basis at the weekly salary rate paid during your last
regular pay period hereunder.

 

  2. (a) For your services hereunder the Company will, on regular pay dates as
then in effect under applicable Company policy, pay you a base salary at the
rate of $1,000,000 per annum, subject to annual increase in the sole discretion
of the Company.

 

     (b) You shall also receive an annual bonus based on the achievement of
certain targets established by the CEO of the Company pursuant to a cash bonus
plan (“Cash Plan”) for executive officers of the Company to be established with
the approval of the Compensation Committee and the Board of Directors of the
Company. If you achieve such targets, your annual bonus shall be no less than
100% of your then current salary (the “Target Bonus”). You acknowledge that such
Cash Plan is also subject to approval by the stockholders of the Company and no
payments shall be made pursuant to such Cash Plan until and unless the Cash Plan
shall have been so approved. However, if such approval is not so obtained by
December 31, 2004, the Company will provide you with alternative cash incentive
compensation arrangements which would enable you to receive (if applicable
targets are achieved) the Target Bonus subject to approval of the Compensation
Committee of the Company (or its designee) to such alternative compensation
arrangements.

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Mr. Eddy Hartenstein

As of January 1, 2004

Page 2

 

     (c) It is anticipated that the Company will adopt a stock incentive plan,
which will provide for the granting of equity awards including stock options,
restricted stock or restricted stock units (such plan, if so adopted, is
referred to as the “Stock Plan”). Subject to approval of the Stock Plan by the
Compensation Committee and the Board of Directors of the Company, you shall also
receive equity compensation (e.g., options or restricted stock) consistent with
grants to senior executives of a comparable level of the Company. You
acknowledge that such Stock Plan is also subject to approval by the stockholders
of the Company and no award shall vest or be exercisable, nor shall any payments
be made in respect thereof, until and unless the Stock Plan shall have been so
approved. However, if such approval is not so obtained by December 31, 2004, the
Company will provide you with alternative compensation arrangements in an amount
equal to the value referred to above, subject to approval of the Compensation
Committee of the Company (or its designee) as to such alternative compensation
arrangements.

 

     (d) You shall receive vacation and other perquisites and all other benefits
generally commensurate with comparable executives of the Company.

 

  3. (a) You shall serve as Vice Chairman of the Company. You shall be based in
Los Angeles, California, subject to such travel as the rendering of the services
hereunder may require.

 

     (b) If you are elected a member of the Board of Directors or to any other
office of the Company or any of its affiliates, you agree to serve in such
capacity or capacities without additional compensation, unless additional
compensation or benefits are paid to comparable executives.

 

     (c) You hereby accept such employment and agree to devote your full time
and attention as necessary to fulfill all of the duties of your employment
hereunder. Without the prior written consent of the Company, you will not,
directly or indirectly, engage in any other business activities so long as you
are performing services for the Company. The foregoing does not prohibit you
from owning less than five percent (5%) of the outstanding common stock of any
company whose shares are publicly traded nor from serving on the board of
directors of other companies, if approved by the CEO of Hughes.

 

  4. (a) The Amended and Restated Executive Change in Control Severance
Agreement (the “Change in Control Agreement”) dated April 26, 2000, as amended
on December 12, 2003, between the Company and you, shall continue in full force
and effect, including with respect to your termination for Cause or Good Reason
(each as defined in the Change in Control Agreement). In addition, the Hughes
Electronics Corporation Retention Bonus Plan as amended January 28, 2003, and
the related Participation Notice dated April 14, 2003 (collectively, the
“Retention Plan”), shall also continue in full force and effect, including with

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Mr. Eddy Hartenstein

As of January 1, 2004

Page 3

 

respect to your termination for Good Reason (as defined in the Retention Plan.
You hereby acknowledge that nothing contained in this Agreement constitutes
grounds for you to terminate your employment for Good Reason (as defined in the
Change in Control Agreement or in the Retention Plan).

 

(b) If your employment is terminated due to death, your estate or beneficiaries,
as the case may be, shall be entitled to:

 

  (i) payment of base salary through the date of termination;

 

  (ii) payment of the pro-rated portion of the annual bonus that you received
for the fiscal year immediately preceding the date of termination;

 

  (iii) if not previously paid, the “Second Installment,” as defined in the
Retention Plan; and

 

  (iv) other or additional benefits in accordance with applicable plans and
programs of the Company.

 

(c) If your employment is terminated due to disability (as defined below), you
shall be entitled to the following (but in no event less than the benefits due
to you under the then current disability program of the Company):

 

  (i) payment of base salary through the date of termination;

 

  (ii) payment of the pro-rated portion of the annual bonus that you received
for the fiscal year immediately preceding the date of termination;

 

  (iii) if not previously paid, the “Second Installment,” as defined in the
Retention Plan;

 

  (iv) until the earlier of the end of such disability and the end of the Term,
continued participation in medical, dental, hospitalization and life insurance
coverage and in all other employee plans and programs in which you were
participating on the date of termination; and

 

  (v) other or additional benefits in accordance with applicable plans and
programs of the Company.

 

     For purposes of this Agreement, “disability” shall mean your inability to
substantially perform your duties and responsibilities under this Agreement for
a period of 120 consecutive days.

 

  5. (a) You agree to abide by the provisions of the Company’s Code of Ethics
and Business Conduct at all times during your employment by the Company.

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Mr. Eddy Hartenstein

As of January 1, 2004

Page 4

 

(b) You will not during the term of your employment and for a period of two
years thereafter, directly or indirectly, induce or attempt to induce any
managerial, sales or supervising employee of the Company or its affiliates to
render services to any other person, firm or corporation.

 

(c) You acknowledge that the relationship between the parties hereto is
exclusively that of employer and employee and that the Company’s obligations to
you are exclusively contractual in nature. The Company shall be the sole owner
of all the fruits and proceeds of your services hereunder, including, but not
limited to, all ideas, concepts, formats, suggestions, developments,
arrangements, designs, packages, programs, promotions and other intellectual
properties which you may create in connection with and during your term of your
employment hereunder, free and clear of any claims by you (or anyone claiming
under you) of any kind or character whatsoever (other than your right to
compensation hereunder). You shall, at the request of the Company, execute such
assignments, certificates or other instruments as the Company may from time to
time deem necessary or desirable to evidence, establish, maintain, perfect,
protect, enforce or defend its right, title and interest in or to any such
properties.

 

(d) All memoranda, notes, records and other documents made or compiled by you,
or made available to you during the term of this Agreement concerning the
business of the Company or it affiliates shall be the Company’s property and
shall be delivered to the Company on the termination of this Agreement or at any
other time on request.

 

You shall keep in confidence and shall not use for yourself or others, or
divulge to others, any information concerning the business not publicly
available and which is obtained by you as a result of your employment, including
but not limited to, trade secrets or processes and information deemed by the
Company to be proprietary in nature, unless disclosure is permitted by the
Company or required by law.

 

(e) The Company shall have the right to use your name, biography and likeness in
connection with its business, including in advertising its products and
services, and may grant this right to others, but not for use as a direct
endorsement.

 

(f) The covenants set forth in sub paragraphs (b), (c) and (d) above shall
survive the termination of this Agreement.

 

  6. The services to be furnished by you hereunder and the rights and privileges
granted to the Company by you are of a special, unique, unusual, extraordinary,
and intellectual character which gives them a peculiar value, the loss of which
cannot be reasonably or adequately compensated in damages in any action or law,
and a breach by you of any of the provisions contained herein will cause the

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Mr. Eddy Hartenstein

As of January 1, 2004

Page 5

 

Company irreparable injury and damage. You expressly agree that the Company
shall be entitled to seek injunctive and other equitable relief, to prevent a
breach of this Agreement by you. Resort to equitable relief however, shall not
be construed as a waiver of any preceding or succeeding breach of the same or
any other term or provision. The various rights and remedies of the Company
hereunder shall be construed to be cumulative and no one of them shall be
exclusive to any other or of any other or of any right or remedy allowed by law.

 

  7. In consideration of the making of the Agreement, as well as of the other
consideration stated herein, you expressly agree that if you continue in the
employ of the Company after the end of this Agreement, your employment shall be
at-will and shall otherwise be in accordance with the provisions of such then
existing Company policies as may then be in effect applicable to comparable
executives of the Company.

 

  8. This Agreement shall be governed by the laws of the State of New York
applicable to contracts performed entirely therein.

 

  9. This Agreement shall inure to the benefit of the successors and general
assigns of the Company and to the benefit of any other corporation or entity
which is a parent, subsidiary or affiliate of the Company to which this
Agreement is assigned, and any other corporation or entity into which the
Company may be merged or with which it may be consolidated. Except as herein
provided, this Agreement shall be nonassignable.

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Mr. Eddy Hartenstein

As of January 1, 2004

Page 6

 

Sincerely, THE DIRECTV GROUP, INC

 

      By:   /s/    CHASE CAREY    

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Title:   President and Chief Executive Officer

 

THE FOREGOING IS AGREED TO:

 

/s/    EDDY HARTENSETIN

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Eddy Hartensetin March 16, 2004

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Date