UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


WASHINGTON,
D.C. 20549


FORM
10-K/A


(Amendment
No. 1)




ý
            
            ANNUAL
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
      OF 1934For
      the fiscal year ended December 31, 2007ORo
            
            TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934




For the
transition period from ______ to ______


Commission
file number: 001-33546





TERRESTAR
CORPORATION


(Exact
name of Registrant as Specified in Its Charter)





Delaware
            
            93-0976127(State
      or Other Jurisdiction of
            
            (I.R.S.
      EmployerIncorporation
      or Organization)
            
            Identification
      No.)12010
      Sunset Hills Road, 9th
      Floor, Reston, VA
            
            20190(Address
      of Principal Executive Offices)
            
            (Zip
      Code)





(Registrant’s
telephone number, including area code): (703) 483-7800





Securities
registered pursuant to Section 12(b) of the Act:


Common
      Stock, $0.01 par value
            
            The
      NASDAQ Global Market(Title
      of Each Class)
            
            (Name
      of Each Exchange on Which
Registered)




Securities
registered pursuant to Section 12(g) of the Act:  None





Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act.   ̈
Yes     þ No





Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Exchange Act.   ̈
Yes     þ No





Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.


þ Yes  ̈ No





Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the best
of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.  þ




Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company.  See definitions of “large accelerated filer”, “accelerated
filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act (check
one).




Large accelerated
      filer   ̈
            Accelerated
      filer  þNon-accelerated
      filer   ̈
            Smaller reporting
      company   ̈(Do not check if
      smaller reporting company)




Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).  ̈
Yes     þ No





The
aggregate market value of TerreStar Corporation Common Stock held by
non-affiliates as of June 30, 2007 (the last business day of the most recently
completed second quarter) was approximately $651.5 million.  For
purposes of this calculation, affiliates represent only holders of more than 10%
of TerreStar Corporation Common Stock.





There
were 90,977,073 shares of TerreStar Corporation Common Stock outstanding as of
April 22, 2008.










EXPLANATORY
NOTE




TerreStar
Corporation (“TerreStar” or the “Company”) is filing this Amendment No. 1
to Annual Report on Form 10-K for the year ended December 31, 2007 to
include the information required to be contained in Part III, Items 10, 11, 12,
13 and 14 of Form 10-K.  TerreStar had previously reported that such
information would be incorporated by reference to its definitive proxy statement
to be filed pursuant to Regulation 14A.  However, TerreStar’s
definitive proxy statement will not be filed prior to April 29, 2008, and,
according to General Instruction G(3) to Form 10-K, it hereby amends its
previously filed Annual Report on Form 10-K (filed on March 31, 2008) to include
the required information.  This Amendment No. 1 to Annual Report on
Form 10-K includes only Items 10, 11, 12, 13 and 14 of Form 10-K, and TerreStar
is not amending or supplementing any other information in such previously filed
Annual Report on Form 10-K.






PART
III




Item
10.  Directors and Executive Officers and Corporation Governance of
TerreStar.




Directors
of TerreStar





The
following table sets forth, for each of our directors as of April 22, 2008, his
name, title, age and the year in which he first became a director of the
Company.  The directors have furnished the information set forth below
and elsewhere in this Annual Report concerning them and their security holdings
of TerreStar.





Name
            Title
            Age
            Began
      ServiceDavid
      Andonian
            Director
            51
            2006Eugene
      I. Davis
            Director
            52
            2008William
      Freeman
            Director
            55
            2007Jacques
      Leduc
            Director
            45
            2006David
      Meltzer
            Director
            48
            2006Dean
      Olmstead
            Director
            52
            2008David
      J. Rayner
            Director
            51
            2008





David
Andonian.   Mr. Andonian has served on our Board of
Directors since May 2006.  Currently, Mr. Andonian is the Founder and
managing Partner at Dace Ventures, where he has served since August
2006.  Prior to August 2006, Mr. Andonian served as  the
Chairman of Affinnova, Inc., a marketing services company.  From May
2003 to December 2004, Mr. Andonian served as Executive Chairman of the board of
directors, and from January 2004 to January 2006, Mr. Andonian served as the
Chief Executive Officer of Affinnova, Inc.  From December 2002 to
April 2003, Mr. Andonian served as an Executive in Residence at Flagship
Ventures.  From July 2001 to September 2002, Mr. Andonian served as
President and Chief Operating Officer at CMGI, an internet marketing and
infrastructure provider.  At CMGI, he managed domestic and international
operations.  Prior to joining CMGI, Mr. Andonian held several
executive level positions from January, 1996 to November, 1997 with PictureTel
Corporation including General Manager of its Personal Systems Division and Vice
President of Worldwide Marketing.  He began his career in sales at IBM
where he spent over fifteen years in various sales, marketing and general
management positions including VP of Worldwide Marketing and Brand Management
for IBM’s PC Company.  Mr. Andonian holds a B.A in Business Management
from the Isenberg School of Management at the University of
Massachusetts.





Eugene I. Davis.Mr. Davis
has served on our Board of Directors since February
2008.  Mr. Davis has served as the Chairman and Chief Executive
Officer of PIRINATE Consulting Group, L.L.C., a consulting firm specializing in
turn-around management, mergers and acquisitions and strategic planning advisory
services, since 1999. He served as Chief Operating Officer of Total-Tel USA
Communications, Inc., an integrated telecommunications provider, from 1998 to
1999. Mr. Davis served in various capacities including as director,
Executive Vice President, President and Vice Chairman of Emerson Radio Corp., a
distributor of consumer electronics products, from 1990 to 1997. He served in
various capacities including as a director, Chief Executive Officer and Vice
Chairman of Sports Supply Chain, Inc., a distributor of sporting goods and
athletic equipment, from 1996 to 1997. Prior to such time, Mr. Davis was an
attorney in private practice. Mr. Davis presently serves as Chairman of the
Board of Atlas Air Worldwide Holdings, Inc., Atari, Inc. and Foamex
International, Inc. Mr. Davis also serves as a Director of American
Commercial Lines, Inc., Delta Air Lines, Inc., Knology, Inc., Medicor Ltd.,
Oglebay Norton Company, Rural/Metro Corporation, Silicon Graphics, Inc.,
Footstar Inc. and Pliant Corporation.  Mr. Davis received B.A. in
International Politics from Columbia University, Columbia College, a Masters in
International Affairs, International Law and Organization from Columbia
University's School of International Affairs, and a J.D. from Columbia
University's School of Law.









William M. Freeman. Mr.
Freeman has served as Chairman of the Board since March 2007 and has served on
the Board of Directors since February 2007.  Mr. Freeman is currently
the President and CEO of Arbinet-theexchange, Inc. and has served in that
capacity since November 2007.  From May 2004 to February 2005,
Mr. Freeman was the Chief Executive Officer of Leap Wireless International,
Inc. From January 1994 to January 2004, Mr. Freeman was a senior executive,
most recently President—Public Communications Group, at Verizon.  Mr.
Freeman also serves on the board of directors of the CIT Group,
Inc.   Mr. Freeman holds a B.A. in Economics from Drew University
and an MBA in Finance and Management from Rutgers University.  In
addition, Mr. Freeman also participated in advanced management programs at
Harvard, the Brookings Institute and Rutgers.





Jacques Leduc.  Mr.
Leduc has served on our Board of Directors since April 2006.  He is a
co-founder and managing partner of Trio Capital Inc., a private equity and
venture capital firm that he started in January 2006, which invests primarily in
telecommunications and new media.  He served as Chief Financial
Officer of Microcell Telecommunications Inc., a nationwide wireless operator in
Canada from February 2001 through November 2004, and as Vice President Finance
and Director Corporate Planning from January 1995 to February
2001.  Mr. Leduc holds a Masters degree in Business Administration
from Ecole des Hautes Etudes Commercials de Montreal and a Bachelors degree in
Business Administration from the Universite du Quebec a Montreal.  Mr.
Leduc has also served as a member of the Board of Directors of Rural Cellular
Corporation, Inc., a wireless communications service provider, since May
2005.





David Meltzer.  Mr.
Meltzer has served on our Board of Directors since February 2006.  Mr.
Meltzer has served as Senior Vice President for International Services for the
American Red Cross since July 2005, with overall responsibility for
international disaster response activities, international development programs
and various international policy matters.  From January 2002 to
February 2005, Mr. Meltzer served as the General Counsel and Executive Vice
President for Regulatory Affairs for Intelsat Global Service Corporation, a
wholly-owned subsidiary of Intelsat, Ltd.  From July 2001 to September
2001, he served as Vice President and General Counsel of Intelsat Global
Services Corporation.  From December 1999 to September 2001 he served
as Vice President and General Counsel for Intelsat, Ltd.  From 1989 to
December 1999, Mr. Meltzer served in various other positions with Intelsat,
including as Senior Director in the Corporate Restructuring
Division.  Mr. Meltzer holds a B.A. in International Relations from
the University of Pennsylvania and a J.D. from George Washington University
National Law Center.




Dean Olmstead.  Mr.
Olmstead has served on our Board of Directors since February
2008.  Mr. Olmstead is the President of Satellite Services for
EchoStar Corporation. Before joining EchoStar in January 2008, Mr. Olmstead
served as an advisor to Loral Space & Communications on strategic and growth
opportunities for its satellite service businesses and served on its board of
directors. Additionally, he was President of Arrowhead Global Solutions,
President and CEO of SES Americom and held leadership positions with DirecTV
Japan, NASA and the U.S. State Department. Mr. Olmstead holds a B.S. in
Economics-Mathematics from Western Washington University, an M.A. from Stanford
University's Terman School of Engineering, and also completed Ph.D. studies in
Economics at The American University.





David J.
Rayner.  Mr. Rayner has served on our Board of Directors since
February 2008.Mr.
Rayner is Chief Administrative Officer of EchoStar Corporation. Prior to that,
Mr. Rayner served as Executive Vice President of Installation Services and had
previously held the position of Chief Financial Officer of EchoStar
Communications Corporation. Before joining EchoStar in December 2004, Mr. Rayner
served as Senior Vice President and Chief Financial Officer of Time Warner
Telecom in Denver. From February 1997 to May 1998, Rayner served as Vice
President of Finance for Time Warner Telecom, and he was Controller for that
company from May 1994 to February 1997. From 1982 to 1994, Rayner also held
various financial and operational management positions with Time Warner Cable.
He received his bachelor's degree in Accountancy from Northern Illinois
University.





4




Communications
with Directors





The
Board of Directors maintains a process for stockholders to communicate with the
Board of Directors or with individual directors.  Stockholders who
wish to communicate with the Board of Directors or with individual directors
should direct written correspondence to our General Counsel at our principal
executive offices located at 12010 Sunset Hills Road, 9th Floor,
Reston, Virginia 20190.  Any such communication must contain (i) a
representation that the stockholder is a holder of record of stock of the
Company, (ii) the name and address, as they appear on the Company’s books, of
the stockholder sending such communication, and (iii) the class and number of
shares of TerreStar that are beneficially owned by such
stockholder.  The General Counsel will forward such communications to
the Board of Directors or the specified individual director to whom the
communication is directed unless such communication is unduly hostile,
threatening, illegal or similarly inappropriate, in which case the General
Counsel has the authority to discard the communication or to take appropriate
legal action regarding such communication.




Executive
Officers





The
following sets forth the biographical information for each of TerreStar’s
executive officers as of April 22, 2008.





Jeffrey W.
Epstein.  Mr. Epstein has served as our President and principal
executive officer since April 2008 and as our Senior Vice President, General
Counsel and Secretary since September 2006.  Mr. Epstein served as the
General Counsel and Secretary since October 2006 and the Associate General
Counsel and Secretary from July 2006 to December 2006 of TerreStar Networks Inc.
From October 2003 to July 2006, Mr. Epstein served as Director, Assistant
General Counsel, Transactions, for Capital One Financial Corporation. From March
2000 to September 2003, he was an associate at the law firm Piper Rudnick LLP.
Mr. Epstein earned a B.A. in Business Administration from the University of
Florida, a J.D. from St. Thomas University School of Law and an L.L.M. in
Securities and Financial Regulation from Georgetown University Law
Center.




DennisW. Matheson.Mr.
Matheson has served as TerreStar’s Chief Technology Officer, Senior Vice
President—Satellite Operations since January 2006.  Mr. Matheson also
has served as a Senior Vice President of TerreStar Global since February
2006.  From August 1993 to January 2006, Mr. Matheson served as
Chief Technical Officer of Motient Corporation. Mr. Matheson was an
executive officer of Motient Corporation at the time it filed for Chapter 11
protection.  Mr. Matheson holds a B.S. in Electrical Engineering
from Clemson University and an M.S. in Electrical Engineering from the
University of Tennessee.




Neil L.
Hazard.Mr. Hazardhas served as our
Executive Vice President, Chief Financial Officer, Treasurer and principal
financial officer since September 2006. Mr. Hazard also has served as Chief
Financial Officer of TerreStar Global since October 2006 and has served as Chief
Financial Officer and Treasurer of TerreStar Networks Inc. since July 2006. In
November 2006, TerreStar named Mr. Hazard as its interim Chief
Operating Officer. Mr. Hazard retained his titles of Executive Vice
President, Chief Financial Officer, Treasurer and principal financial officer of
TerreStar.  From July 2001 to December 2005, Mr. Hazard served as
Chief Operating Officer at Primus Telecommunications Group, where he also served
as Chief Financial Officer from February 1996 to October 2004. Mr. Hazard
received a B.S. in Engineering from Johns Hopkins University, an M.S. in
Computer Systems Management from the University of Maryland and an M.B.A. from
the Harvard Business School. He is a Certified Public Accountant and a Certified
Management Accountant.




On
April 18, 2008, TerreStar announced the resignations of Robert Brumley,
President and CEO, Michael Reedy, Chief Operating Officer, and Doug Sobieski,
Chief Marketing Officer.  Each of these former executive officers were
among our most highly compensated executive officers in 2007 and information
regarding these former executive officers is included in Item 11 “Executive
Compensation” below.




Board
Committees and Meetings





The Board of Directors
conducts its business through meetings and through its
committees.The Board of Directors consisted of six
directors at the beginning of 2007.  David Grain resigned from the
Board in January 2007, William Freeman was elected to the Board in January 2007
and Raymond Steele resigned from the Board in February 2007.




5




Each director is expected
to devote sufficient time, energy and attention to ensure diligent performance
of his or her duties and to attend all Board, applicable committee and
stockholders’ meetings.The Board of Directors met 12 times during
2007.  During 2007, each director attended or participated in at least
75% of the aggregate of the meetings held by our Board of Directors and each
committee of the Board of Directors on which he served during the period for
which he served.  Robert Brumley, our former President and Chief
Executive Officer, was a member of our Board of Directors during 2007 and was
also an employee of TerreStar and TerreStar Networks Inc., our majority owned
subsidiary.  Mr. Brumley resigned from our Board of Directors in April
2008.




In
February 2008 in connection with entering into certain agreements with
affiliates of Harbinger Capital Partners and EchoStar Corporation, we agreed to
expand the size of the Board of Directors from five to eight members through the
additions of Messrs. Davis, Olmstead and Rayner.  For more information
regarding these transactions please see our Form 8-K filed with the Securities
and Exchange Commission (the “SEC”) on February 21, 2008.




The
Board has three standing committees to facilitate and assist the Board in the
execution of its responsibilities. The standing committees of the Board of
Directors are: the Audit Committee, the Compensation and Stock Option Committee
and the Nominating Committee. In accordance with best practice, all the
committees are comprised solely of non-employee, independent directors, as
defined by the Marketplace Rules of The Nasdaq Stock Market, Inc.  The
charter of each committee is available free of charge in print to any
stockholder who requests it. The table below shows current membership of each of
the standing Board committees:





Audit
      Committee
            Compensation
      and
              Stock Option
      Committee
            Nominating
      CommitteeJacques
      Leduc*
            David
      Meltzer*
            David
      Andonian*David
      Andonian
            David
      Andonian
            Jacques
      LeducEugene
      I. Davis
            William
      Freeman
            David
      MeltzerDavid
      J. Rayner
            Dean
      Olmstead
            William
      Freeman*
      Denotes Committee Chairman





Audit
Committee




In
2007, the Audit Committee consisted of Messrs. Leduc, Andonian and Steele until
February 2007 and  in February 2007 the committee was restructured to
consist of Messrs. Leduc, Andonian and Freeman.  In April 2008 it was
restructured to its present composition.  Each member of the Audit
Committee is “independent” as defined under the applicable Marketplace Rules of
The Nasdaq Stock Market, Inc.  The Audit Committee is responsible for
reviewing our internal auditing procedures and accounting controls and will
consider the selection and independence of our outside auditors. During 2007,
the Audit Committee met five times.




Our
Board of Directors has determined that Jacques Leduc is the “Audit Committee
financial expert” as such term is defined under Item 407 of Regulation S-K and a
“financially sophisticated audit committee member” under Rule 4350(d)(A) of the
Marketplace Rules of The Nasdaq Stock Market Inc.  Stockholders should
understand that this designation is a disclosure requirement of the SEC related
to Mr. Leduc’s experience and understanding with respect to certain accounting
and auditing matters. The designation does not impose on Mr. Leduc any duties,
obligations or liability that are greater than are generally imposed on him as a
member of the Audit Committee and Board of Directors, and his designation as the
Audit Committee financial expert pursuant to this SEC requirement does not
affect the duties, obligations or liability of any other member of the Audit
Committee or Board of Directors.  In making this determination, the
Board of Directors considered Mr. Leduc’s educational background, and business
experience, which is described above.  Our Audit Committee charter is
available on our website, www.terrestarcorp.com.




Compensation
and Stock Option Committee





The
Compensation and Stock Option Committee consisted of Mr. Meltzer, Mr. Andonian
and Mr. Grain until January 2007 and in February 2007 the committee was
restructured to consist of Messrs. Meltzer, Andonian and Freeman.  In
April 2008 Mr. Olmstead was added to the committee.  The Compensation
and Stock Option Committee is responsible for reviewing certain of TerreStar’s
compensation programs, making recommendations to the Board of Directors with
respect to compensation, and administering our stock option
plan.  During 2007, the Compensation and Stock Option Committee met
seven times.  Our Compensation and Stock Option Committee charter is
available on our website, www.terrestarcorp.com.




6




Nominating
Committee




The
Nominating Committee consisted of Messrs. Andonian, Grain, Leduc and Meltzer
until January 2007 and in February 2007 the committee was restructured to its
present composition.  Each member of the Nominating Committee is
“independent” as defined under the applicable Marketplace Rules of The Nasdaq
Stock Market, Inc.  The Nominating Committee is responsible for
selecting candidates to stand for election as directors. During 2007, the
Nominating Committee met one time.  Our Nominating Committee charter
is available on our website, www.terrestarcorp.com.




Director
Nominations





The
Nominating Committee is responsible for selecting candidates to stand for
election as directors.  The Nominating Committee actively seeks
individuals who meet the qualifications established by the Nominating Committee
to become members of our Board of Directors, including evaluating persons
suggested by stockholders or others, and conducting appropriate inquiries into
the backgrounds and qualifications of possible nominees.  The
Nominating Committee selects those nominees whose attributes it believes would
be most beneficial to TerreStar. This assessment includes such issues as
experience, integrity, competence, diversity, skills, and dedication in the
context of the needs of the Board of Directors.  Any stockholder that
wishes to propose a candidate should send such candidate to the attention of the
Nominating Committee at the address given in the section entitled
“Communications with Directors” above.




In
February 2008 in connection with entering into certain agreements with
affiliates of Harbinger Capital Partners and EchoStar Corporation, we agreed to
expand the size of the Board of Directors from five to eight members through the
additions of Messrs. Davis, Olmstead and Rayner.  For more information
regarding these transactions please see our Form 8-K filed with the Securities
and Exchange Commission (the “SEC”) on February 21, 2008.




Section
16(a) Beneficial Ownership Reporting Compliance





Under
the securities laws of the United States, our directors, executive officers and
any persons holding more than ten percent of our common stock are required to
report their ownership of the common stock and any changes in that ownership to
the SEC.  Specific due dates for these reports have been established
by the SEC, and we are required to report in this Annual Report any failure to
file by these dates.  Based on our review of these reports filed
during and in connection with the year ended December 31, 2007, and on
certain written representations, we do not believe that any of our directors,
officers or beneficial owners of more than ten percent of our common stock
failed to file a form or report a transaction on a timely
basis.





Code
of Ethics





We
have adopted a code of ethics that applies to our principal executive officer,
principal financial officer and principal accounting officer. This code of
ethics has been approved by our Board of Directors, and has been designed to
deter wrongdoing among directors, officers and employees and promote honest and
ethical conduct, full, fair, accurate and timely disclosure, compliance with
applicable laws, rules and regulations, prompt internal reporting of code
violations, and accountability for adherence to our code.  Our code of
ethics is available on our website, www.terrestar.com.




7




Item
11.  Executive Compensation.




COMPENSATION DISCUSSION
AND ANALYSIS





This
Compensation Discussion and Analysis provides an overview of the combined
TerreStar Corporation, or TerreStar,  and Terrestar Networks Inc., or
Networks,  compensation philosophy.  For purposes of the
following section, except where the context otherwise requires or unless
otherwise indicated, the terms “we,” “our” and “us” refer to TerreStar
Corporation and its subsidiaries, including Networks.




Thefollowing discussion and analysis
of compensation arrangements of our named executive officers should be read
together with the compensation tables and related disclosures set forth
above.  This discussion contains forward looking statements that are
based on our current plans and expectations regarding future compensation
programs.  Actual compensation programs that we adopt may differ
materially from currently planned programs as summarized in this
discussion.




Overview





Our
primary business is our ownership of TerreStar Networks and, as of April 22,
2008, we owned approximately 88% of Networks’ outstanding common
stock.  Over the past year, we experienced a significant change in our
management structure and the methodology of our compensation system, which we
implemented in May 2007.  Our Compensation Committee approved a new
compensation structure and implemented this plan during the second quarter of
2007 for TerreStar Networks employees and certain executive officers of
TerreStar, who also serve as officers of TerreStar Networks.




In
April 2008, we announced a corporate restructuring that led to the departure of
three of our executive officers who were among the five most highly compensated
executive officers in 2007 as well as one additional officer.  In
addition, the restructuring led to a headcount reduction of 79 employees,
reducing our overall headcount from 178 employees to 99 employees as of April
22, 2008.  This restructuring will have a significant impact on our
compensation expense in 2008. We expect this reduction to account for savings of
approximately 45 percent in base salary expense.




Compensation
Committee Members





The
Compensation and Stock Option Committee, or the Compensation Committee, is
responsible for establishing basic principles related to our compensation
programs and for providing oversight of compensation programs and policies for
senior executive officers.  The Compensation Committee is currently
comprised of David Meltzer, David Andonian, Dean Olmstead and William Freeman,
all of whom are independent, non-employee directors.  The Compensation
Committee maintains a practice of meeting prior to regularly scheduled meetings
of the Board of Directors and generally holds executive sessions without
management present.  Mr. Meltzer serves as the Chairman of the
Compensation Committee and sets the meetings and agendas.  Mr.
Olmstead joined the Compensation Committee in April 18, 2008 and therefore was
not involved in the compensation decisions discussed in this
report.




On May
23, 2007, the Board of Directors approved a Compensation Committee Charter which
delegated to the Compensation Committee the responsibilities of reviewing and
approving compensation granted to our executive officers and
directors.  The Compensation Committee has the authority to retain its
own compensation consultant and to obtain advice and assistance from internal or
external legal, accounting or other advisers as it sees fit.  For
example, in 2006, the Compensation Committee engaged Strategic Compensation
Research Associates, or SCRA, an independent, third-party compensation
consultant, to review and assess our compensation practices for our executives
and directors.  Specifically, SCRA provided recommendations to the
Compensation Committee in 2006 with respect to the adoption of the Company’s
2006 Equity Incentive Plan and compensation for the Board of Directors,
including the Chairman of the Board.




8




In
2006, the management of TerreStar Networks engaged Mercer as its independent,
third-party compensation consultant, to review and provide compensation
benchmark analysis and studies to TerreStar Networks’ management in connection
with the development of a new compensation structure.  Based on the
results of Mercer’s benchmark of similarly situated companies, it was determined
that the overall compensation of Networks’ employees, particularly at the senior
management level, was below market.  As discussed above, the
compensation structure for TerreStar Networks executives and certain of our
executives who also serve as executive officers of both TerreStar Networks and
TerreStar was revised to be consistent with our overall compensation
philosophy.  This new compensation structure was implemented in the
second quarter of 2007.




At the
request of the Compensation Committee, our Chief Executive Officer, Chief
Financial Officer and General Counsel/Secretary regularly participate in
Compensation Committee meetings with respect to compensation
matters.  In addition, the Chief Executive Officer was actively
involved in discussions relating to setting the compensation levels for his
direct reports, including each of the other executive officers named in the
Summary Compensation table below (together, the “NEOs”), as well as assisting in
the formation and design of our compensation programs and
policies.  The Chief Executive Officer was present in Compensation
Committee meetings where compensation was determined for other executive
officers but he was not present when the Compensation Committee considered and
set his compensation.  The Compensation Committee reviews and approves
compensation components for the Chief Executive Officer and other executive
officers including the following components:




·
            Annual
      base salary;


·
            Cash
      and equity bonuses, including target
  amounts;


·
            Other
      equity or cash compensation;


·
            Employment
      agreements, severance arrangements, and change in control
      agreements/provisions, as applicable;
and


·
            Any
      other material benefits, compensation or
  arrangements.





During
2007, the Compensation Committee met seven times and acted on the following
matters:




·
            Director
      compensation;


·
            Employee
      bonuses for 2007;


·
            Negotiate
      and enter into employment agreements with executive
      officers;


·
            Approval
      of stock option exchange with employees (including executive officers) of
      TerreStar Networks; and


·
            Approval
      of compensation for the Chairman of the
  Board.





In
addition to the above activities, as discussed herein, the Compensation
Committee finalized and approved the new compensation structure for employees of
Networks and certain executive officers of TerreStar, which was implemented
during the second quarter of 2007.




Compensation
Philosophy




We
design our compensation programs to enable us to attract, retain and motivate
executive officers to support and achieve our short-term and long-term strategic
goals, and to complement our efforts to develop our integrated next-generation
communications system.  To the extent possible, the Compensation
Committee also believes it is important to seek to foster a stockholder
perspective in management by awarding stock options and other equity based
awards to align the interests of our executives with those of our
stockholders.




The
Compensation Committee determines executive officer compensation with respect to
each element set forth below based upon an independently conducted analysis of
publicly-available compensation data and compensation survey data of comparable
companies.  The Chief Executive Officer delivers a performance
evaluation for each of the other executive officers to the members of the
Compensation Committee and makes recommendations on compensation arrangements,
including adjustments in base salary, changes in target bonus awards and/or
metrics for earning cash incentives and equity grants. Such recommendation is
based on competitive market data and a variety of other factors, including
individual performance, market competitive pressures, business conditions, the
vesting and value of current equity grants, our overall performance and the
potential financial impact of implementing the recommendations. The Compensation
Committee considers, but is not bound to and does not always accept, the
recommendations of the Chief Executive Officer with respect to executive officer
compensation.  In addition, the Compensation Committee regularly seeks
input from independent compensation consultants prior to making any final
determinations.




9




To
determine the compensation of our Chief Executive Officer and other executive
officers, the Compensation Committee, through consultation with the remaining
independent members of the Board of Directors, assesses each officer’s
performance and considers competitive market data and other factors described
herein.




We
believe it is in our stockholders’ best interests to ensure that our executive
compensation is competitive with those of other companies of similar size and
complexity. The Compensation Committee seeks independent professional assistance
and advice from outside consulting firms from time to time in the development
and utilization of the competitive market data and the establishment of its
executive compensation programs.




Based
upon the compensation survey data and publicly-available information, we
produced an overall range of competitive market data for the compensation of
each of our executive officers.




Elements
of Compensation




Base
Salary




We
target base salary at the median level of the compensation survey data and
publicly-available information mentioned above in order to retain and reward
executive talent.  However, to better support our objective to retain
and properly reward executive officers, we also consider other factors, such as
duties and responsibilities not typically found in similar positions with
comparable companies, prior experience, job performance, tenure, any distinctive
value to the organization, and general market conditions.  For 2007,
each NEO received a cost-of-living adjustment of 4% to their base
salary.




In
January 2007 and January 2008, the Compensation Committee set each NEO’s base
salary as follows:





Name
            2007
      Base Salary ($)
            2008
      Base Salary ($)Robert
      Brumley
            550,000
            572,000Neil
      Hazard
            400,000
            416,000Dennis
      Matheson
            350,000
            364,000Michael
      Reedy
            350,000
            364,000Doug
      Sobieski
            350,000
            364,000





Cash
Incentives




We
structure a cash incentive plan, our Bonus Plan, to align the financial
incentives of our employees and executive officers with our short-term and
long-term operating goals and interests of our stockholders, and to reward
exceptional performance.  Some of our executive officers who currently
have employment agreements with Networks and have cash bonus target amounts set
forth in such contracts.  Each fiscal year, the Compensation Committee
approves the structure, performance metrics as well as each metric’s relative
weighting under our Bonus Plan.  For 2007, the Compensation Committee
considered the various goals and milestones established and achieved by Networks
and its executive officers and decided to award the bonus targets for achieving
these goals.




In
2007, the Chief Executive Officer’s annual target bonus was approximately 85% of
his annual base salary, or 467,500, and the annual target bonus for our Chief
Financial Officer was 60% of his annual base salary, or $240,000. The fiscal
2007 bonuses for our Chief Executive Officer and Chief Financial Officer were
based on targets established in their employment agreements.  Similar
calculations were used for other executive and employee bonuses and were paid
out at the end of 2007.  We entered into new employment agreements
with each of our executive officers in January 2008 that set target bonus
amounts for 2008. The cash incentive bonuses are contingent  upon the
executive and TerreStar achieving specific deliverables or goals that will be
agreed to during 2008 by the applicable executive and the Compensation
Committee.  There will also be an opportunity for each executive to
earn more than the target bonus based upon the officer’s success in meeting
additional identified performance targets during 2008.




10




For
2007, the Compensation Committee set each NEO’s target cash bonus and actual
cash bonus paid (2007 bonus amounts earned were paid in 2008 for Messrs. Brumley
and Hazard) as follows:





Name
            2007
      Target Bonus (% of Base)
            2007
      Cash Bonus Earned ($)Robert
      Brumley
            85%
            504,083
      (1)Neil
      Hazard
            60%
            257,667
      (2)Dennis
      Matheson
            60%
            168,000Michael
      Reedy
            60%
            168,000Doug
      Sobieski
            60%
            168,000





(1)      Includes
$83,333 cash bonus paid to Mr. Brumley in 2007 for services to TerreStar
Corporation in 2006 and 2007.


(2)      Includes
$41,666 cash bonus paid to Mr. Hazard in 2007 for services to TerreStar
Corporation in 2006 and 2007.




Equity
Incentives




We
provide long-term incentive compensation through the award of stock options
under our 2006 Equity Incentive Plan.  In connection with the new
compensation structure, on May 1, 2007, the Compensation Committee and Board of
Directors approved the issuance of approximately 3.8 million non-qualified
options to purchase TerreStar common stock to TerreStar Networks employees and
to executive officers of TerreStar Networks who also serve as officers of
TerreStar.  One-third of these options vest each year over three years
starting from January 1, 2008 and expires on January 1, 2017.




In
addition, the Board of Directors approved a modification to the TerreStar
Corporation Option plan and on May 23, 2007, we cancelled approximately 2.5
million fully vested non-qualified options to purchase Networks common stock in
exchange for the issuance of approximately 5.3 million fully vested
non-qualified options to purchase TerreStar Corporation common stock to Networks
employees and to executive officers of Networks who also serve as officers of
TerreStar.  These options vested on May 23, 2007 and fifty percent of
the options became exercisable on January 1, 2008 and the remaining fifty
percent become exercisable on January 1, 2009.




We can
also, but have not except to our Board of Directors, award restricted stock and
other equity incentives under our 2006 Equity Incentive Plan.  These
awards generally vest over a number of years or upon the occurrence of certain
strategic transactions.  Due to the various strategic transactions
that we have undertaken over the last several years, many of these shares of
restricted stock and stock options have already vested for employees who had
received these awards prior to the occurrence of the
transactions.




The
Compensation Committee regularly reviews our long-term incentive compensation
practices. Potential changes include adjusting the mix of equity awards granted,
adjusting the vesting schedule of the equity awards, and using other forms of
equity and/or non-equity long term incentive compensation with vesting based
upon the achievement of performance metrics. Consistent with our philosophy of
paying for performance, no executive is entitled to an automatic equity grant.
In determining the proper amount and mixture of equity awards granted to each
executive officer, we consider a variety of factors, including such executive
officer’s contribution to our performance, current equity holdings, ability to
influence future performance and relative position within our organization, the
competitive market data described above, the relative value of each equity
award, the financial impact on our profitability and the dilutive impact to our
stockholders.




In
addition to the above, the stock options generally have change in control
vesting acceleration, forfeiture, transfer restrictions and other customary
provisions.  In determining which elements of compensation are to be
paid, and how they are weighted, we also take into account our compliance with
Internal Revenue Code Section 162(m). Section 162(m) of the Internal Revenue
Code precludes us from taking a deduction for compensation in excess of $1
million for our executive officers named in the Summary Compensation Table.
Certain performance-based compensation is specifically excluded from the
deduction limit. Our policy is to qualify, to the extent reasonable, the
compensation of our executive officers for deductibility under applicable tax
laws.  However, the Compensation Committee believes that its primary
responsibility is to provide a compensation program to meet our stated
objectives and that the loss of a tax deduction may be necessary in some
circumstances.




11




Generally
Available Benefit Plans and Executive Perquisites




We do
not provide significant perquisites or personal benefits to our
NEOs.  In 2007, we provided each of our executive officers health care
coverage and life insurance coverage that is generally available to all of our
salaried employees.  Also, we maintain a 401(k) Plan for our
employees, including our executive officers, because we wish to encourage our
employees to save a portion of their cash compensation, through voluntary
deferrals, for their eventual retirement.  The executive officers are
entitled to participate in the company-sponsored 401(k) Plan on the same terms
as all employees.  Under our 401(k) Plan, we provide all employees
with matching contributions,subject to certain
limitations imposed by the Internal Revenue Code of 1986, as amended. Our
executive officers do not receive any retirement benefits beyond those generally
available to our salaried employees.




Employment
Agreements and Change in Control Agreements




We
maintain employment agreements with each of our executive officers, effective
January 15, 2008.  For more information on these employment
agreements, please read “Executive Compensation — Narrative to Summary
Compensation Table and Plan-Based Awards Table — Employment Agreements” and
“Executive Compensation – Potential Payments upon Termination or
Change-in-Control” below. These agreements provide for severance compensation to
be paid if the employment of the executives is terminated under certain
conditions, including, without limitation, his death or disability, following a
change in control or for “good reason” or termination by us for any reason other
than upon his death or disability, including for “cause,” each as defined in the
agreements.





Compensation
and Stock Option Committee Interlocks and Insider Participation





In
2007, Messrs. Meltzer, Andonian and Freeman served as members of our
Compensation and Stock Option Committee.  None of Messrs. Meltzer,
Andonian or Freeman was at any time during 2007, or at any other time, an
officer or employee of TerreStar Corporation or any of its
subsidiaries.  Further, none of our executive officers served as a
member of the board of directors or compensation committee, or other committee
serving an equivalent function, of another entity that has one or more of its
executive officers serving as a member of our Board of Directors or Compensation
and Stock Option Committee, or other committee performing a similar function, at
any time during 2007.




COMPENSATION
AND STOCK OPTION COMMITTEE REPORT ON EXECUTIVE COMPENSATION




We,
the Compensation Committee of the Board of Directors, have reviewed and
discussed this Compensation Discussion and Analysis, or CD&A, as required by
Item 402(b) of Regulation S-K with the management of the Company. Based on such
review and discussion, we are of the opinion that the executive compensation
policies and plans provide appropriate compensation to properly align TerreStar
Corporations’ performance and the interests of its stockholders through the use
of competitive and equitable executive compensation in a balanced and reasonable
manner, for both the short and long-term. Accordingly, we have recommended to
the Board of Directors that the CD&A be included as part of this Annual
Report on Form 10-K/A.




Submitted
by the Compensation and Stock Option Committee of the Board of
Directors:




David
Meltzer, Chairman


David
Andonian


William
Freeman


Dean
Olmstead




12




EXECUTIVE
COMPENSATION






Summary
Compensation Table




The
following table shows the compensation earned for the fiscal year ended December
31, 2007 to our named executive officers, or NEOs, for the year-ended December
31, 2007.


SUMMARY
COMPENSATION TABLE


Name
      and
              Principal
      Position
            Year
            Salary
              ($)
            Bonus
              ($)
            Stock
              Awards
              ($)
            Option
              Awards
              ($)(1)
            Non-Equity
              Incentive
      Plan Compensation
              ($)(2)
            Change
      in
              Pension
      Value
              and
              Nonqualified
              Deferred
              Compensation
              Earnings
              ($)
            All
      Other
              Compensation
              ($)(3)
            Total
              ($)Robert
      Brumley
              Former
      President and CEO (4)
            2007
            550,000
            83,333
      (5)
            ---
            3,419,388
            420,750
            ---
            43,455
      (6)
            4,516,9262006
            300,000
            ---
            ---
            3,201,232
            216,000
            ---
            6,965
            3,724,197Neil
      Hazard
              Executive
      Vice
              President,
      CFO (7)
            2007
            400,000
            41,666
      (5)
            ---
            1,326,713
            216,000
            ---
            804
            1,985,1832006
            131,154
            ---
            ---
            474,000
            103,125
            ---
            20
            708,299Dennis
      Matheson Chief Technology Officer
            2007
            350,000
            ---
            ---
            310,882
            168,000
            ---
            280
            829,1622006
            200,000
            ---
            ---
            2,401,500
            150,000
            ---
            140
            2,751,640Michael
      Reedy Former Chief Operating Officer (8)
            2007
            350,000
            ---
            ---
            2,428,816
            168,000
            ---
            168
            2,946,9842006
            200,000
            ---
            ---
            2,198,478
            150,000
            ---
            ---
            2,548,478Doug
      Sobieski Former Chief Marketing Officer (9)
            2007
            350,000
            ---
            ---
            310,882
            168,000
            ---
            430
            829,3122006
            200,000
            ---
            ---
            2,401,500
            150,000
            ---
            200
            2,751,700





(1)
            Each
      amount reflected in this column is the compensation cost recognized by
      TerreStar during the applicable year under Statement of Financial
      Accounting Standard No. 123R (Share-Based Payment)
      for grants made in 2007 and prior years, disregarding forfeitures. The
      fair value is estimated on the date of grant using the Black-Scholes
      option-pricing model. For
      a discussion of the assumptions underlying the calculation under SFAS 123R
      see Note 11, Employee Stock Benefit Plans in our Form 10-K for the year
      ended December 31, 2007.


(2)
            Represents
      amounts earned under the Company’s Cash Bonus
  Plans.


(3)
            Includes
      group term life insurance
premiums.


(4)
            Mr.
      Brumley’s employment with TerreStar terminated in April
      2008.


(5)
            Messrs.  Brumley
      and Hazard were awarded cash bonuses in 2007 for services provided to
      TerreStar Corporation in 2006 and 2007 when Messrs. Brumley  and
      Hazard also served as executive officers of TerreStar
      Networks.


(6)
            Includes
      group term life insurance premiums of $804 and the Company’s payment of
      rental expense for a corporate apartment provided for Mr. Brumley in
      Washington, D.C. during 2007 of
$42,651.


(7)
            Mr.
      Hazard’s employment began in July
2006.


(8)
            Mr.
      Reedy’s employment was terminated in April
  2008.


(9)
            Mr.
      Sobieski’s employment was terminated in April
  2008.




13




GRANTS
OF PLAN-BASED AWARDS FOR FISCAL YEAR 2007







Estimated
      Future Payouts Under Non-
              Equity
      Incentive Plan Awards(1)Name
              (a)
            Grant
              Date
              (b)
            Threshold
              ($)
              (c)
            Target
              ($)
              (d)
            Max.
              ($)
              (e)
            All
              Other
              Stock
              Awards:
              Number
              of
              Shares
              of
      Stock
              or
      Units
              (#)
              (i)
            All
      Other
              Option
              Awards:
              Number
      of
              Securities
              Underlying
              Options
              (#)
              (j)
            Exercise
              or
      Base
              Price
      of
              Option
              Awards
              ($/Sh)
              (k)
            Grant
              Date
              Fair
              Value
              of
              Stock
              and
              Option
              Awards
              (2)
              (l)Robert
      Brumley
            
            0
            467,500
            (3)5/1/2007
            
            
            
            
            349,500
            11.30
            2,334,6605/23/2007
            
            
            
            
            400,500
            11.35
            2,643,300Neil
      Hazard
            
            0
            240,000
            (3)5/1/2007
            
            
            
            
            160,000
            11.30
            1,068,8005/23/2007
            
            
            
            
            356,000
            11.35
            2,349,600Dennis
      Matheson
            
            0
            210,000
            (3)5/1/2007
            
            
            
            
            140,000
            11.30
            935,2005/23/2007
            
            
            
            
            267,000
            11.35
            1,762,200Michael
      Reedy
            
            0
            210,000
            (3)5/1/2007
            
            
            
            
            300,200
            11.30
            2,005,3365/23/2007
            
            
            
            
            267,000
            11.35
            1,762,200Doug
      Sobieski
            
            0
            210,000
            (3)5/1/2007
            
            
            
            
            140,000
            11.30
            935,2005/23/2007
            
            
            
            
            267,000
            11.35
            1,762,200





(1)
            Represents
      amounts available under 2007 Cash Incentive Plan.  Actual
      amounts paid under the 2007 Cash Incentive Plan to the executive officers
      are set forth in the Summary Compensation Table under the column
      “Non-Equity Incentive Plan
Compensation.”


(2)
            For
      a discussion of the assumptions underlying the calculation under SFAS 123R
      see Note 11, Employee Stock Benefit Plans in our Form 10-K for the year
      ended December 31, 2007.


(3)
            The
      Compensation Committee may elect to award bonus amounts
      in  amounts in excess of target bonus
    amounts.


OUTSTANDING
EQUITY AWARDS AT FISCAL YEAR-END 2007


Option
      Awards
            Stock
      AwardsName
              (a)
            Number
      of
              Securities
              Underlying
      Unexercised
              Options
              (#)
              Exercisable
              (b)
            Number
      of
              Securities
              Underlying
              Unexercised
              Options
              (#)
              Unexercisable
              (c)
            Equity
              Incentive
              PlanAwards:
              Number
      of
              Securities
              Underlying
              Unexercised
              Unearned
              Options
              (#)
              (d)
            Option
              Exercise
              Price
              ($)
              (e)
            Option
              Expiration
              Date
              (f)
            Number
              of
              Shares
              or
      Units
              of
      Stock
              that
              Have
              Not
              Vested
              (g)
            Market
              Value
              of
              Shares
              or
              Units
              of
              Stock
              that
              Have
              Not
              Vested
              ($)
              (h)
            Equity
              Incentive
              Plan
              Awards:
              Number
              of
              Unearned
              Shares,
              Units
      or
              Other
              Rights
              that
      Have
              Not
      Vested
              (#)
              (i)
            Equity
              Incentive
              Plan
              Awards:
              Market
      or
              Payout
              Value
      of Unearned
              Shares,
              Units
      or
              Other
              Rights
              that
      Have
              Not
              Vested
              ($)
              (j)Robert
      Brumley
            
            349,500
            
            11.30
            4/30/2017400,500(1)
            
            11.35
            5/23/2017Neil
      Hazard
            
            160,000
            
            11.30
            4/30/2017356,000(1)
            
            11.35
            5/23/2017


14


Option
      Awards
            Stock
      AwardsName
              (a)
            Number
      of
              Securities
              Underlying
      Unexercised
              Options
              (#)
              Exercisable
              (b)
            Number
      of
              Securities
              Underlying
              Unexercised
              Options
              (#)
              Unexercisable
              (c)
            Equity
              Incentive
              Plan
      Awards:
              Number
      of
              Securities
              Underlying
              Unexercised
              Unearned
              Options
              (#)
              (d)
            Option
              Exercise
              Price
              ($)
              (e)
            Option
              Expiration
              Date
              (f)
            Number
              of
              Shares
              or
      Units
              of
      Stock
              that
              Have
              Not
              Vested
              (g)
            Market
              Value
              of
              Shares
              or
              Units
              of
              Stock
              that
              Have
              Not
              Vested
              ($)
              (h)
            Equity
              Incentive
              Plan
              Awards:
              Number
              of
              Unearned
              Shares,
              Units
      or
              Other
              Rights
              that
      Have
              Not
      Vested
              (#)
              (i)
            Equity
              Incentive
              Plan
              Awards:
              Market
      or
              Payout
              Value
      of
              Unearned
              Shares,
              Units
      or
              Other
              Rights
              that
      Have
              Not
              Vested
              ($)
              (j)Dennis
      Matheson
            
            140,000
            
            11.30
            4/30/2017267,000(1)
            
            11.35
            5/23/2017Michael
      Reedy
            
            300,200
            
            11.30
            4/30/2017267,000(1)
            
            11.35
            5/23/2017Doug
      Sobieski
            
            140,000
            
            11.30
            4/30/2017267,000(1)
            
            11.35
            5/23/2017


(1)           These
options were vested as of December 31, 2007 but were subject to contractual
restrictions with respect to their exercise and the sale of the underlying
shares of common stock.  Those restrictions lapsed with respect to 50%
of the shares underlying the option on January 1, 2008 and will lapse as to the
remaining 50% of the shares on January 1, 2009.




OPTION
EXERCISES AND STOCK VESTED FOR FISCAL YEAR 2007





None
of our Named Executive Officers exercised stock options or acquired shares of
restricted stock in 2007.




Potential
Payments Upon Termination or Change in Control




Consistent
with practices within our industry, we also provide certain post-employment
termination benefits to our executive officers.  We have implemented
these programs in order to ensure that we are able to continue to attract and
retain top talent, as well as ensure that during the uncertainty associated with
a potential change in control the executive officers remain focused on their
responsibilities and ensure a maximum return for our
stockholders.




On
April 16, 2008, we announced the departure of three of our NEO’s, Robert
Brumley, Michael Reedy and Doug Sobieski.  Please see the information
below for a description of the payments made to each of these former NEO’s in
connection with their departure.




The
following summaries set forth potential payments payable to our NEOs upon
termination of employment or a Change in Control of us under their current
employment agreements and our stock plans and other compensation
programs.  For purposes of the following summaries, dollar amounts are
estimates based on salary as of December 31, 2007, benefits paid to the NEOs in
2007 (and any prior years as applicable) and stock and option holdings of the
NEOs as of December 31, 2007.  The summaries assume a price per share
of our common stock of $7.25 per share, which was the closing price per share on
December 31, 2007, as reported on the NASDAQ Global Market.




15




Termination and ChangeofControl. Each of our
NEOs and other executive officers who are still our employees is entitled to
certain benefits under his employment agreement upon any of the
following:


·
              we
      terminate NEO’s employment for Cause (as defined in each Employment
      Agreement);


·
            we
      terminate NEO’s employment as a result of his death or Permanent
      Disability (as defined in each Employment
  Agreement);




·
            we
      terminate the NEO’s employment for reason other than
      Cause;




·
            NEO
      terminates his employment for Good Reason (as defined in each Employment
      Agreement); and




·
            the
      NEO experiences a Change in Control Position Modification (as defined in
      each Employment Agreement) within 3 months following a Change of
      Control.




If a
NEO’s employment is terminated for Cause, the NEO shall be entitled to all
salary and expense reimbursements due to such NEO through the date of his
termination.




If a
NEO’s employment is terminated as a result of his death or Permanent
Disability,  the NEO shall be entitled to (i) all salary and expense
reimbursements due to such NEO through the date of his termination, (ii) an
aggregate amount equal to one-half of the NEO’s then-current annual base salary
and target bonus and (iii) all then unvested options held by the NEO shall
immediately vest.




If we
terminate a NEO’s employment for reason other than Cause or if the NEO
terminates he employment for Good Reason, the NEO shall be entitled to (i) all
salary and expense reimbursements due to such NEO through the date of his
termination, (ii) an aggregate amount equal to NEO’s base salary and target
bonus, (iii) all then unvested options held by the NEO shall immediately vest
and (iv) we shall pay COBRA premiums on behalf of NEO for a period of not more
than 18 months.




In the
event a NEO experiences a Change of Control Position Modification within three
months of a Change of Control, the NEO shall be entitled to (i) all salary and
expense reimbursements due to such NEO through the date of his termination, (ii)
an aggregate amount equal to two times NEO’s base salary and target bonus, (iii)
all then unvested options held by the NEO shall immediately vest and (iv) we
shall pay COBRA premiums on behalf of NEO for a period of not more than 18
months.




Robert
Brumley




Robert
Brumley was our former President and Chief Executive Officer.  His
employment was terminated effective April 16, 2008.  In connection
with his separation from TerreStar, Mr. Brumley entered into an Agreement and
General Release (the “Brumley Separation Agreement”).  The terms of
the Brumley Separation Agreement are as follows:




We
released any and all claims against Mr. Brumley and Mr. Brumley released any and
all claims against TerreStar.  In addition, we will pay Mr. Brumley
aggregate cash payments equal to $1,972,223, which consists of (i) $18,805 for
accrued but unpaid compensation through his termination date, (ii) $981,018,
equal to Mr. Brumley’s current base salary through December 31, 2009, the
remaining period of the term specified in the Brumley Employment Agreement, and
(iii) $972,400, equal to the product of Mr. Brumley’s target annual bonus for
2008 multiplied by 2, in each case less applicable income and employment tax
withholding.  The cash payments under the Brumley Separation Agreement
will be paid in accordance with the terms of the Brumley Separation Agreement
over a period ending January 1, 2009.  In addition, to the extent Mr.
Brumley qualifies for, complies with and otherwise remains eligible for
continuation of his health care issuance benefits under COBRA, TerreStar shall
pay the COBRA premiums for a maximum of 18 months.




16




In
addition, unvested stock options to purchase 382,000 shares of TerreStar common
stock that were issued to Mr. Brumley and remained outstanding immediately
vested in full and became exercisable. TerreStar has also agreed to extend the
period in which Mr. Brumley may exercise any outstanding option grants by a
period of one year beyond the original exercise period under the applicable
stock option agreements.




Neil
Hazard




Assuming  that
Mr. Hazard’s employment with TerreStar was terminated under each of these
circumstances, or a change of control occurred on December 31, 2007, such
payments and benefits have an estimated value as follows (less applicable
withholding taxes):




Scenario
            Cash
              Severance
      ($)
            Value
      of Equity
              Awards
      Received
              or
      to be
              Received($)Termination
      for Cause
            0
            0Death
      or Disability
            320,000(2)
            0(1)Termination
      for Good Reason by Mr.
              Hazard
      or without Cause by TerreStar
            665,554(3)
            0(1)Change
      of Control Position
              Modification
      within 3 months of a
              Change
      of Control
            1,305,554(4)
            0(1)





(1)
            As
      of December 31, 2007, Mr. Hazard held unvested stock options to purchase
      160,000 shares of our common stock.  As of December 31, 2007 the
      exercise price of his unvested stock options exceeded the fair market
      value of our common stock on that date and therefore the unvested stock
      options were determined to not have any value for purposes of this
      calculation.




(2)
            Cash
      severance is equal to the sum of 50% of Mr. Hazard’s 2007 base salary
      ($200,000) and 50% of Mr. Hazard’s 2007 target bonus
      ($120,000).




(3)
            Cash
      severance is equal to the sum of Mr. Hazard’s 2007 base salary ($400,000),
      Mr. Hazard’s 2007 target bonus ($240,000) and estimated COBRA premiums for
      18 months ($25,554).




(4)
            Cash
      severance is equal to the sum of two times Mr. Hazard’s base salary
      ($800,000), two times Mr. Hazard’s target bonus ($480,000) and estimated
      COBRA premiums for a period of 18
      months  ($25,554).




Dennis
Matheson




Assuming  that
Mr. Matheson’s employment with TerreStar was terminated under each of these
circumstances, or a change of control occurred on December 31, 2007, such
payments and benefits have an estimated value as follows (less applicable
withholding taxes):




Scenario
            Cash
              Severance
      ($)
            Value
      of Equity
              Awards
      Received
              or
      to be
              Received($)Termination
      for Cause
            0
            0Death
      or Disability
            280,000(2)
            0(1)Termination
      for Good Reason by Mr. Hazard or without Cause by
      TerreStar
            585,554(3)
            0(1)Change
      of Control Position Modification within 3 months of a Change of
      Control
            1,145,554(4)
            0(1)




17




(1)
            As
      of December 31, 2007, Mr. Matheson held unvested stock options to purchase
      160,000 shares of our common stock.  As of December 31, 2007 the
      exercise price of his unvested stock options exceeded the fair market
      value of our common stock on that date and therefore the unvested stock
      options were determined to not have any value for purposes of this
      calculation.




(2)
            Cash
      severance is equal to the sum of 50% of Mr. Matheson’s base salary
      ($175,000) and 50% of Mr. Matheson’s target bonus
      ($105,000).




(3)
            Cash
      severance is equal to the sum of Mr. Matheson’s base salary ($350,000),
      Mr. Matheson’s target bonus ($210,000) and estimated COBRA premiums for 18
      months ($25,554).




(4)
            Cash
      severance is equal to the sum of two times Mr. Matheson’s base salary
      ($700,000), two times Mr. Matheson’s target bonus ($420,000) and estimated
      COBRA premiums for a period of 18
      months  ($25,554).




Michael
Reedy




Michael
Reedy was our former Chief Operating Officer.  His employment was
terminated effective April 16, 2008.  In connection with his
separation from TerreStar, Mr. Reedy entered into an Agreement and General
Release (the “Reedy Separation Agreement”).  The terms of the Reedy
Separation Agreement are as follows:




We
released any and all claims against Mr. Reedy and Mr. Reedy released any and all
claims against TerreStar.  In addition, we will pay Mr. Reedy
aggregate cash payments equal to $594,367, which consists of (i) $11,967
for  accrued but unpaid compensation through his termination date,
(ii) $364,000 for a payment equal to Mr. Reedy’s current base salary through
December 31, 2008, the remaining period of the term specified in the Mr. Reedy’s
employment agreement, and (iii) $218,400 for a payment equal to Mr. Reedy’s
target annual bonus for 2008, in each case less applicable income and employment
tax withholding.  The cash payments under the Reedy Separation
Agreement will be paid over a 12 month period.  In addition, to the
extent Mr. Reedy qualifies for, complies with and otherwise remains eligible for
continuation of his health care issuance benefits under COBRA, TerreStar shall
pay the COBRA premiums for a maximum of 18 months.





In
addition, unvested options to purchase 200,133 shares of TerreStar common stock
held by Mr. Reedy immediately vested in full and became
exercisable.  Mr. Reedy shall have a period of one year following his
termination date to exercise these stock options.





Doug
Sobieski




Doug
Sobieski was our former Chief Marketing Officer.  His employment was
terminated effective April 16, 2008.  In connection with his
separation from TerreStar, Mr. Sobieski entered into an Agreement and General
Release (the “Sobieski Separation Agreement”).  The terms of the
Sobieski Separation Agreement are as follows:




We
released any and all claims against Mr. Sobieski and Mr. Sobieski released any
and all claims against TerreStar.  In addition, we will pay Mr.
Sobieski aggregate cash payments equal to $594,367, which consists of (i)
$11,967 for  accrued but unpaid compensation through his termination
date, (ii) $364,000 equal to Mr. Sobieski’s current base salary through December
31, 2008, the remaining period of the term specified in Mr. Sobieski’s
employment agreement, and (iii) $218,400 equal to Mr. Sobieski’s target annual
bonus for 2008, in each case less applicable income and employment tax
withholding.  The cash payments under the Sobieski Separation
Agreement will be paid over a 12 month period.  In addition, to the
extent Mr. Sobieski qualifies for, complies with and otherwise remains eligible
for continuation of his health care issuance benefits under COBRA, TerreStar
shall pay the COBRA premiums for a maximum of 18 months.





In
addition, unvested options to purchase 93,333 shares of TerreStar common stock
held by Mr. Sobieski  immediately vested in full and became
exercisable.   Mr. Sobieski shall have a period of one year
following his termination date to exercise these stock options.





18





DIRECTOR
COMPENSATION




The
following chart shows the cash amounts and the value of other compensation paid
to each non-employee member of the Board of Directors for their service in
2007.  We did not grant non-equity incentive plan awards, restricted
stock or any compensation other than the payment of fees and the grant of stock
options as shown below.




Name
              (a)
            Fees
              Earned
      or
              Paid
      in
              Cash
              ($)
              (b)
            Option
              Awards
              ($)
              (d)
            Total
              ($)
              (h)David
      Andonian
            55,000
            --
            55,000William
      Freeman(1)
            80,000
            181,204
            261,204David
      Grain(2)
            --
            --
            --Jacques
      Leduc
            50,000
            --
            50,000David
      Meltzer
            45,000
            --
            45,000Raymond
      Steele(3)
            114,500
            --
            114,500





(1)      Mr.
Freeman joined the Board of Directors in January 2007.


(2)      Mr.
Grain resigned from the Board of Directors in January 2007.


(3)      Mr.
Steele resigned from the Board of Directors in February 2007.





In
February 2006, the Compensation and Stock Option Committee engaged a
compensation consultant to review our Board of Directors
compensation.  Based on that review, effective January 1, 2006, each
non-employee member of the Board of Director was entitled to an annual retainer
of $30,000, each member of the Compensation and Stock Option Committee and the
Nominating Committee was entitled to an additional retainer of $5,000 per year,
and each member of the Audit Committee was entitled to an additional retainer of
$10,000 per year.  In addition, the Chairperson of the Compensation
and Stock Option Committee and the Nominating Committee received an additional
retainer of $10,000 per year and the Chairperson of the Audit Committee received
an additional retainer of $15,000 per year.  In addition, non-employee
members of the Board receive meeting fees of $1,500 for each Board meeting in
excess of six per year.  Each member of the Compensation and Stock
Option Committee or the Nominating Committee receives meeting fees of $2,000 for
each committee meeting in excess of three per year, each member of the Audit
Committee receives meeting fees of $2,500 for each meeting in excess of four per
year.




Members
of the Board of Directors receive an initial grant of 20,000 restricted shares
upon joining the Board of Directors and annual grants of 15,000 stock options
upon re-election.  In 2007, director annual grants were deferred until
2008 and therefore no stock option grants were awarded to directors in
2007.




In May
2007, our Compensation Committee approved a new compensation program for the
Chairman of the Board.  The Chairman receives an annual retainer of
$60,000 and meeting fees of $3,000 for each Board meeting in excess of six per
year.  No other Board compensation payments changed in
2007.




Raymond
Steele retired from the TerreStar Board of Directors in February
2007.  In connection with his retirement, the Board of Directors
authorized a cash payment to Mr. Steele as if he continued to serve as Chairman
of the Board and on the Audit and Compensation Committees through September
2007.  In addition, the Board authorized the grant of his two
remaining quarterly option grants under the Chairman compensation
plan.




Item 12.  Security
Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters.




The
following table sets forth certain information known to us with respect to the
beneficial ownership of our common stock as of April 22, 2008 (unless otherwise
indicated), by:





Ÿ
            each
      person known by us to be a beneficial owner of five percent (5%) or more
      of our common stock;


Ÿ
            each
      current director


Ÿ
            each
      executive officer named in the summary compensation table in Item 11 of
      this Annual Report;


Ÿ
            each
      current executive officer; and


Ÿ
            all
      current directors and executive officers as a
  group.




19




As
used in this table, “beneficial ownership” means the sole or shared power to
vote, or to direct the voting of, a security, or the sole or shared investment
power with respect to a security (that is, the power to dispose of, or to direct
the disposition of, a security).  In addition, a person is deemed, as
of any date, to have “beneficial ownership” of any security that such person has
the right to acquire within 60 days after such date.  The number of
shares beneficially owned by each stockholder is determined according to the
rules of the SEC, and the information is not necessarily indicative of
beneficial ownership for any other purpose. Under current rules,
“beneficial ownership” includes any shares as to which the individual or entity
has sole or shared voting power or investment power. As a consequence,
several persons may be deemed to be the “beneficial owners” of the same
securities.





Each
of the stockholders named in this table has sole voting and investment power
with respect to the Common Shares shown as “beneficially owned.”  The
percentage ownership of each stockholder is calculated based on 90,977,073
shares of common stock outstanding as of April 22, 2008.





Name
      and Address of Beneficial Owner
            
            Number
      of
              Shares
              Beneficially
              Owned
            
            
            Percent
              of
      ClassDirectors
      and Executive OfficersNeil
      Hazard (1)
            
            
            231,333
            
            
            
            *Jeffrey
      Epstein (1)
            
            
            61,075
            
            
            
            *Dennis
      Matheson (1)
            
            
            180,167
            
            
            
            *David
      Andonian, Director (2)
            
            
            36,000
            
            
            
            *William
      Freeman, Director (1)
            
            
            35,600
            
            
            
            *David
      Rayner, Director
            
            
            —
            
            
            
            —Jacques
      Leduc, Director (2)
            
            
            36,000
            
            
            
            *Eugene
      Davis, Director
            
            
            —
            
            
            
            —David
      Meltzer, Director (3)
            
            
            31,000
            
            
            
            *Dean
      Olmstead, Director
            
            
            —
            
            
            
            —Current
      Directors and Officers as a Group (10 persons)
            
            
            611,175
            
            
            
            *Other
      5% StockholdersHarbert
      Management Corporation (4)
            
            
            76,359,426
            
            
            
            58.8EchoStar
      Corporation (5)
            
            
            38,970,000
            
            
            
            30.0Solus
      Alternative Asset Management LP (6)
            
            
            11,131,146
            
            
            
            11.7Intrepid
      Capital Advisors (7)
            
            
            5,813,845
            
            
            
            6.4Tudor
      Investment Corporation (8)
            
            
            5,687,814
            
            
            
            6.3Goldman
      Sachs (9)
            
            
            4,608,469
            
            
            
            5.1BCE,
      Inc. (10)
            
            
            4,531,213
            
            
            
            5.0


*     Less
than 1%.





(1)
            Share
      ownership reflects options to purchase Common Shares exercisable within 60
      days of the date hereof.(2)
            Includes
      12,000 shares of vested restricted Common Shares, 18,000 non-vested
      restricted Common Shares and 6,000 options to purchase Common
      Shares.  The non-vested restricted Common Shares are subject to
      repurchase by the Company in the event of termination of
      service.(3)
            Includes
      10,000 vested restricted Common Shares, 15,000 non-vested restricted
      Common Shares and 6,000 options to purchase Common Shares.  The
      non-vested restricted Common Shares are subject to repurchase by the
      Company in the event of termination of
  service.




20




(4)
            Funds
      Affiliated with Harbert Management Corporation.   Assumes
      conversion of $50,000,000 of Exchangeable Notes into 358,800 Series E
      Junior Preferred Shares, which are convertible into 8,970,000 Common
      Shares at the current exchange rate of 25:1.  Also assumes
      conversion of 1,200,000 Series E Junior Preferred Shares into 30,000,000
      Common Shares pursuant to the Harbinger Spectrum Agreement.
        Pursuant to a Schedule 13D/A dated February 7, 2008, as filed
      with the Commission, Harbert Management Corporation reported that as of
      February 5, 2008, it had shared voting and dispositive power over
      40,921,029 Common Shares, including 1,886 shares issuable upon exercise of
      warrants and 4,405,170 shares issuable upon conversion of shares of Series
      B Preferred Stock.  Each of Harbinger Capital Partners Master
      Fund I, Ltd., Harbinger Capital Partners Offshore Manager, L.L.C. and HMC
      Investors, L.L.C. reported shared voting and dispositive power over
      29,909,389 Common Shares; Harbinger Capital Partners Offshore Manager,
      L.L.C. and HMC Investors, L.L.C. each specifically disclaimed beneficial
      ownership in such shares except to the extent of its pecuniary interest
      therein.  Each of Harbinger Capital Partners Special Situations
      Fund, L.P., Harbinger Capital Partners Special Situations GP, LLC and
      HMC - New York, Inc. reported shared voting and dispositive power over
      11,011,640 Common Shares; each specifically disclaimed beneficial
      ownership in such shares except to the extent of its pecuniary interest
      therein.  Philip Falcone, Raymond J. Harbert and Michael D. Luce
      reported shared voting and dispositive power over 40,921,029 Common
      Shares; each specifically disclaimed beneficial ownership in such shares
      except to the extent of his pecuniary interest therein.  The
      mailing address of Harbert Management Corporation is One Riverchase
      Parkway South, Birmingham, Alabama 35244.(5)
            Assumes
      conversion of $50,000,000 of Exchangeable Notes into 8,970,000 Common
      Shares at the current exchange ratio of 179.4.  Also assumes
      that the Company exercises its option to purchase the 1.4 GHz Band
      Spectrum from EchoStar in exchange for 30,000,000 Common
      Shares.(6)
            Solus
      Alternative Asset Management LP.   Assumes conversion of
      $22,500,000 of Exchangeable Notes into 4,036,500 Common Shares.
        Pursuant to a Schedule 13G/A filed on February 14, 2008, as
      filed with the Commission, Solus Alternative Asset Management LP reported
      that as of December 31, 2007 its share ownership includes 6,725,000 Common
      Shares and 1,860,000 Common Shares issuable upon conversion of shares of
      Series B Preferred Stock.(7)
            Funds
      affiliated with Intrepid Capital Advisors LLC and Intrepid Fund Management
      LLC.  Pursuant to a Schedule 13G/A filed on February 14, 2008,
      as filed with the Commission, as of December 31, 2007 Intrepid Capital
      Advisors, as the general partner of Intrepid Capital Fund (QP), L.P., and
      Bluenose Capital Fund (QP), L.P beneficially owned 2,265,131 Common
      Shares.  Additionally, Intrepid Fund Management, LLC, the
      investment manager of Intrepid Capital Fund (Offshore) Ltd., Intrepid
      Enhanced Alpha Master Fund, Ltd., and Bluenose Capital Fund (Offshore) Ltd
      beneficially owned 3,548,714 Common Shares.  Steven Shapiro,
      individually, as Manager of Intrepid Capital Advisors, LLC, and Intrepid
      Fund Management LLC beneficially owns 5,813,845 Common
      Shares.(8)
            Funds
      Affiliated with Tudor Investment Corporation.  Pursuant to a
      Schedule 13G/A dated February 13, 2008, as filed with the Commission,
      Tudor Investment Corporation reported that as of December 31, 2007, it had
      shared voting and dispositive power over 5,687,814 Common
      Shares.  The Common Shares reported herein as beneficially owned
      are owned directly by TPT (404,524 shares), Altar Rock (43,305 shares),
      Raptor Portfolio (4,242,095 shares) and BVI Portfolio (997,890
      shares).  Because TIC is the sole general partner of Altar Rock
      and provides investment advisory services to Raptor Portfolio and BVI
      Portfolio, TIC may be deemed beneficially to own the Common Shares owned
      by each of Raptor Portfolio and BVI Portfolio.  TIC expressly
      disclaims such beneficial ownership.  In addition, because Mr.
      Jones is the controlling shareholder of TIC and the indirect controlling
      equity holder of TPT, Mr. Jones may be deemed to beneficially own the
      Common Shares deemed beneficially owned by TIC and TPT.  Mr.
      Jones expressly disclaims such beneficial ownership.  Because
      Mr. Pallotta is the portfolio manager of TIC and TPT responsible for
      investment decisions with respect to the Common Shares reported herein,
      Mr. Pallotta may be deemed to beneficially own the Common Shares deemed
      beneficially owned by TIC and TPT.  Mr. Pallotta expressly
      disclaims such beneficial ownership.  The Common Shares reported
      herein as beneficially owned by Mr. Pallotta are owned directly by Mr.
      Pallotta (450,000 shares) and Mr.  Pallotta’s spouse (3,640
      shares).  Mr. Pallotta expressly disclaims beneficial ownership
      of any shares not directly owned by him.  The mailing address of
      Tudor Investment Corporation is 1275 King Street, Greenwich,
      Connecticut 06831.




21




(9)
            Funds
      affiliated with Goldman Sachs.  Pursuant to a Schedule 13G filed
      on February 11, 2008, as filed with the Commission, 4,608,469 Common
      Shares were beneficially owned by Global Securities Services, a separate
      business unit within and across Goldman, Sachs & Co. and Goldman Sachs
      International, each of which is a direct or indirect subsidiary of The
      Goldman Sachs Group, Inc. (“GSS”),  resulting from GSS holding
      title to such securities as a secured creditor under a transfer of title
      financial collateral arrangement under English Law.  This filing
      did not reflect securities, if any, beneficially owned by any other
      separate business units of Goldman, Sachs & Co, Goldman Sachs
      International and/or GSS whose ownership is disaggregated from that of GSS
      in accordance with the Release.  GSS disclaims beneficial
      ownership of any securities beneficially owned by any client accounts with
      respect to which GSS or its employees have voting or investment
      discretion, or both.(10)
            BCE,
      Inc.  Pursuant to a Schedule 13D/A dated March 7, 2007, as filed
      with the Commission, BCE, Inc. reported that as of March 7, 2007, it had
      sole voting and dispositive power over 4,531,213 Common Shares,and
      that its mailing address is 1000, rue de la Gauchetiere Ouest, Bureau
      3700, Montreal, Quebec H3B 4Y7,Canada





The
address for all officers and directors is c/o TerreStar Corporation, 12010
Sunset Hills Road, 9th Floor, Reston, Virginia 20190.





22





Equity
Compensation Plan Information




The
following table provides information as of December 31, 2007 with respect to
shares of our common stock that may be issued under our existing equity
compensation plans.




A
            
            B
            
            CPlan
      Category
            
            Number
      of Securities to be
              Issued
      Upon Exercise of
              Outstanding
      Options
            
            Weighted
      Average
              Exercise
      Price of
              Outstanding
      Options
            
            Number
      of Securities Remaining
              Available
      for Future Issuance
              Under
      Equity Compensation Plans
              (Excluding
      Securities Reflected in
              Column
      A)Equity
      Compensation Plans Approved by Shareholders (1)
            
            9,568,911
            
            11.73
            
            1,307,753Equity
      Compensation Plans Not Approved by Shareholders (2)
            
            --
            
            --
            
            --Total
            
            9,568,911
            
            11.73
            
            1,307,753






(1) 
Consists of our 2002 Stock Option Plan and 2006 Equity Incentive
Plan.








Item 13.  Certain
Relationships and Related Transactions.




Hughes
Network Systems, LLC (“Hughes”)—During 2007, Andrew Africk served on the Board
of Directors of both TerreStar Networks and Hughes.  As of April 2008
Mr. Africk no longer served on the Board of Directors of TerreStar
Networks.




ATC
Technologies, LLC—ATC Technologies is a subsidiary of MSV and we previously held
a 4.4% ownership interest in MSV.




In
2007, we incurred expenses of $1.8 million for services provided by related
parties.  Of that amount, $1.1 million was paid to Hughes for
satellite related services and $700,000 was paid to ATC Technologies for
intellectual property related services.




We
believe that the prices charged by these parties for the services provided were
equal to what non-related third parties would have charged for such
services.




23




Item
14.  Principal Accountant Fees and
Services.




Audit
Fees





The
following table presents fees for professional services rendered by Friedman LLP
and billed to us for the audit of our annual financial statements for the years
ended December 31, 2007 and 2006, and fees for other services billed by Friedman
LLP during those periods:





Twelve
      Months Ended
              December 31, 2007
            
            
            Twelve
      Months Ended
              December 31, 2006Audit
      fees
            
            $
            823,831
            
            
            $
            675,397Audit
      related fees
            
            
            96,654
            
            
            
            20,164Tax
      fees
            
            
            0
            
            
            
            102,541Other
            
            
            20,193
            
            
            
            0Total
            
            $
            940,678
            
            
            $
            798,102





Audit Fees.  Annual
audit fees relate to services rendered in connection with the audit of the
annual financial statements included in our Annual Report on Form 10-K, the
quarterly reviews of financial statements included in our Quarter Reports on
Form 10-Q, [registration statement consent procedures] and audit and testing of
the company’s internal controls in accordance with Section 404 of the
Sarbanes-Oxley Act of 2002.





Audit-Related
Fees.  Audit-related services include fees for consultations
concerning financial accounting and reporting matters and for services in
connection with our 401(k) Plan.  Audit-related fees are disclosed as
those audit-related fees paid during the specified fiscal year.





Tax Fees.  Tax
services include fees for tax compliance, tax advice and tax
planning.  Tax fees are disclosed as those tax fees paid during the
specified fiscal year.





All Other Fees.Includes fees
related to permitted corporate finance assistance and permitted advisory
services.




Audit
Committee Policies





The
Audit Committee of our Board of Directors is solely responsible for the approval
in advance of all audit and permitted non-audit services to be provided by the
independent auditors (including the fees and other terms thereof), subject to
the de minimis exceptions for non-audit services provided by Section
10A(i)(1)(B) of the Exchange Act, which services are subsequently approved by
the Audit Committee prior to the completion of the audit.  None of the
fees listed above are for services rendered pursuant to such de minimis
exceptions.




24


SIGNATURES





Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.




TERRESTAR
      CORPORATIONBy:
              /s/ Jeffrey
      W. EpsteinJeffrey
      W. EpsteinPresident,
      General Counsel and SecretaryDate:  April
      29, 2008




Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been
signed below by the following persons on behalf of the registrant in the
capacities as of April 29, 2008.




/s/
      Jeffrey W. Epstein
            
            President,
      General Counsel and SecretaryJeffrey
      W. Epstein
            
            (principal
      executive officer)/s/
      Neil Hazard
            
            Executive
      Vice President, Chief Financial OfficerNeil
      Hazard
            
            (principal
      financial officer)*
            
            DirectorDavid
      Andonian*
            
            DirectorEugene
      Davis*
            
            DirectorWilliam
      Freeman*
            
            DirectorJacques
      Leduc*
            
            DirectorDavid
      B. Meltzer*
            
            DirectorDean
      Olmstead*
            
            DirectorDavid
      Rayner







*      By
Power of Attorney.




25




EXHIBIT
INDEX









31.1
            -
            Certification
      of the principal executive officer pursuant to Section 302 of the
      Sarbanes-Oxley Act of 200231.2
            -
            Certification
      of the principal financial officer pursuant to Section 302 of the
      Sarbanes-Oxley Act of 200232
            -
            Certification
      of the principal financial officer and principal executive officer
      pursuant to Section 906 of the Sarbanes-Oxley Act of
    2002


















26