affairs of the Company for the Term; provided, however, that Executive shall be permitted toengage, or continue participation, in (a) charitable, civic, educational, professional, communityor industry affairs, (b) managing the Executive’s and his family’s personal investments, (c)corporate directorships and other business activities described in Schedule I attachedhereto with regard to public companies, and as heretofore disclosed to the Board with regard toprivate companies, including any replacements for any such private companies heretofore disclosedto the Board that does not materially change the time commitment or violate Section 10 hereof and(d) such other activities as may hereafter be specifically approved in writing, which in each caseand in the aggregate do not materially interfere with the performance of his obligations hereunder;provided, further, however, that Executive may not engage in any such activities that would resultin the Executive being in Competition (as defined in Section 10(d) below).     Section 4. Compensation.     (a) Salary. In consideration of the services rendered by the Executive under thisAgreement, the Company shall pay the Executive a base salary (the “*Base Salary*”) at the rate of$950,000 per calendar year. The Base Salary shall be paid in such installments and at such timesas the Company pays its salaried executives and shall be subject to all necessary withholdingtaxes, FICA contributions and similar deductions. The Board shall review annually the Base Salarypayable to Executive hereunder and may, in its sole discretion, increase but not decrease, theExecutive’s salary rate. Any such increased salary shall be and become the “*Base Salary*” forpurposes of this Agreement.     (b) Annual Bonus. The Company shall maintain an annual Management Incentive Bonusprogram (“*MIB Program*”) for certain executives, and Executive shall be a participant in the MIBProgram and shall be entitled to an annual bonus to the extent payable under such program (“*AnnualBonus*”). The Executive’s target annual bonus opportunity under the MIB Program shall be not lessthan 125% of the Executive’s Base Salary (the “*Target Annual Bonus*”). With respect to the AnnualBonus for the 2006 fiscal year or any subsequent fiscal year, the Board shall, in its discretion,establish the terms and conditions of the MIB Program and may amend the MIB Program (other than byreducing the Target Annual Bonus percentage set forth above) accordingly. The Annual Bonus shallbe paid on or before March 15 of the year following the year to which the Annual Bonus relates.     (c) Equity Grants. In connection with Executive’s service as Vice Chairman of theBoard commencing on November 21, 2005, the Company, pursuant to an Option Agreement dated December21, 2005 (the “*Initial Option Agreement*”), on December 21, 2005, granted to Executive (the “*InitialOption Grant*”) an option to purchase 106,952 shares of its common stock at an exercise prices of$28.441 per share under the Company’s 2005 Stock Incentive Plan (the “*Stock Option Plan*”). TheBoard has amended and restated the Stock Option Plan to increase the number of shares of theCompany’s common stock, par value per share $0.01 (the “Common Stock”), available
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for grant thereunder to a number adequate to cover the Option (as defined below) and will,prior to the submission of the amended and restated Stock Option Plan to stockholders for approval,further amend and restate the Plan to provide for an additional number or shares adequate to coverthe 2008 Equity Award (as defined below), based on the Company’s best estimate at the time ofamendment and restatement of the number of shares necessary for the 2008 Equity Award, and shallreserve adequate shares, subject to such best estimate, under the Stock Option Plan for such awardsand the Company agrees to submit the Stock Option Plan as amended to the Company’s stockholders atthe next annual meeting of stockholders and seek stockholder approval (the “*Approvals*”). Inaddition to the Initial Option Grant, in connection with the execution of this Agreement, theCompany grants to the Executive an option to purchase 825,000 shares of common stock of theCompany, with a per-share exercise price equal to the fair market value of one share of theCompany’s common stock at the date of grant (the *“Option”*), such grant to be subject to obtainingthe Approvals. To the extent the Approvals are not obtained, the Option shall be void. The Optionshall have such other terms and conditions as set forth in the Option Agreement attached hereto as**Exhibit A**(the *“Second Option Agreement”*and, together with the Initial Option Agreement, the“*Option Agreements*”). The Option is intended to count as an option award for both 2006 and 2007,in lieu of any regular annual option award that the Executive would otherwise be entitled to in2006 and 2007, and has been structured as such with one-half of the Option vesting over three yearscommencing on the date of Grant and one-half of the Option vesting over three years commencing onthe first anniversary of the date of grant. In addition, if the Executive has earned a TargetAnnual Bonus for both 2006 and 2007, the Company shall grant to the Executive in 2008 an additionaloption to purchase shares of common stock of the Company, or other equity award under the StockOption Plan, in either case having a comparable economic value equal to one-half (1/2) of the valueof the Option (based on a Black-Scholes valuation of such Option) (the “2008 Equity Award”) and, tothe extent the 2008 Equity Award is a stock option, with terms similar to the Second OptionAgreement; provided, however, that the 2008 Equity Award shall, whether an Optionor other equity award, vest in four annual installments with twenty-five percent (25%) of the awardvesting on the date of grant, an additional twenty-five percent (25%) of the award vesting on thefirst anniversary of the date of grant, an additional twenty-five percent (25%) of the awardvesting on the second anniversary of the date of grant and the remaining twenty-five percent (25%)of the award vesting on the third anniversary of the date of grant (consistent with the provisionsof the Second Option Agreement (and Section 7(h) hereof) relating to termination of employment andaccelerated vesting and exercise periods); and furtherprovided, however,that the 2008 Equity Award shall not be made subject to stockholder approval. The grant of the2008 Equity Award shall also be subject to obtaining the Approvals. The Executive shall beeligible for participation in the Stock Option Plan during the Term to the same extent as othersenior executives of the Company, taking into account that the Option is intended to count as theregular option award for both 2006 and 2007 and the 2008 Equity Award is intended to count as anthe regular equity award for 2008. The Company may make such other discretionary equity awards tothe Executive as it deems appropriate. Notwithstanding anything herein to the contrary, (i) theOption shall not become exercisable prior to the date the Company
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obtains the Approvals and the 2008 Equity Award shall not become exercisable prior to theApprovals.     Section 5. Benefits. In addition to the compensation detailed in Section 4 of thisAgreement, the Executive shall be entitled to the following additional benefits:     (a) Paid Vacation. The Executive shall be entitled to 20 days paid vacation percalendar year in accordance with the Company’s vacation policy in effect from time to time, suchvacation shall extend for such periods and shall be taken at such intervals as shall be appropriateand consistent with the proper performance of the Executive’s duties hereunder.     (b) Welfare Plans. During the Term, the Executive and/or the Executive’s family, asthe case may be, shall be eligible for participation in and shall receive all benefits underwelfare benefit plans, programs, practices and policies provided generally by the Company tosimilarly situated executives of the Company (including, without limitation, any medical,prescription, dental, disability, salary continuance, employee life, group life, accidental deathand travel accident insurance plans and programs that may be provided by the Company from time totime). Such benefits shall be paid to the Executive in accordance with the written terms of theapplicable plan, policy or program. Such plans, programs, practices and policies are subject tochange from time to time by the Company.     (c) Other Benefit Plans. During the Term, the Executive shall be entitled toparticipate in all equity, savings, retirement and pension plans (including the Company’sSupplemental Executive Retirement Plan (*“SERP”*)), programs, practices and policies applicablegenerally to similarly situated executives of the Company as determined by the Board from time totime. Such benefits shall be paid to the Executive in accordance with the written terms of suchother benefit plans, programs, practices and policies. Such plans, programs, practices andpolicies are subject to change from time to time by the Company.     (d) Perquisites and Other Benefits. During the Term, the Executive shall be entitledto such additional perquisites and fringe benefits appertaining to his position in accordance withany practice established by the Board. During the Term, Executive shall be entitled to receive allbenefits under any individual welfare benefit arrangements (including life insurance coverage) orother benefit arrangements currently in effect for other senior executives of the Company in amanner consistent with past practice, and such arrangements are listed on Schedule Iattached hereto. Such perquisites and fringe benefits shall be paid to the Executive in accordancewith the written terms of the applicable arrangement.     (e) Reimbursement of Expenses. Subject to the terms set forth in Section 11 below,including, but not limited to, Section 11(e), the Company shall reimburse the Executive for allreasonable expenses actually incurred by the Executive directly in
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connection with the business affairs of the Company and the performance of his dutieshereunder, upon presentation of proper receipts or other proof of expenditure and subject to suchreasonable guidelines or limitations provided by the Company from time to time. The Executiveshall comply with such reasonable limitations and reporting requirements with respect to suchexpenses as the Board may establish from time to time.     (f) Indemnification. In addition to the terms of any officers’ liability insurancecarried by the Company, the Executive (and his heirs, executors and administrators) shall beindemnified by the Company and its successors and assigns pursuant to a separate IndemnificationAgreement attached hereto as **Exhibit B**, which has heretofore been executed. The Executive shall bean insured person under or otherwise covered by directors and officers liability insurance in anamount consistent with past practice. The obligations of the Company pursuant to this Sectionshall survive the expiration of the Term or Executive’s voluntary or involuntary termination orresignation for Good Reason.     Section 6. Termination of Employment. The Executive’s employment may end earlier thanthe end of the Term as follows:     (a) Death. The employment of the Executive shall automatically terminate upon thedeath of the Executive.     (b) Disability. In the event of any physical or mental disability of the Executiverendering the Executive substantially unable to perform his duties hereunder for a period of atleast one hundred eighty (180) days out of any three hundred sixty-five (365)-day period and thefurther determination that the disability is permanent with regard to the Executive’s ability toreturn to work in his full capacity, the Executive’s employment shall be terminated on account ofthe Executive’s disability upon written notice from the Company; provided, however,that upon the occurrence of the Executive’s incapacity due to physical or mental disability that,based on the facts and circumstances, would indicate that a separation from service has occurredwithin the meaning of Treasury Regulation Section 1.409A-1(h), the Executive’s employment shall beterminated immediately on account of disability pursuant to this Section 6(b) without any furtheraction on the part of the Executive or the Company. In the event of any dispute as to theExecutive’s disability, the determination binding on both parties shall be made by a physician orphysicians mutually agreed upon in good faith by the Board and the Executive or his representative.     (c) By the Company For Cause. The employment of the Executive may be terminated bythe Company for Cause (as defined below) at any time effective upon written notice to theExecutive; provided, however, that if such termination is based upon any event set forth in clause(ii), (iii), (iv), or (v) below, Executive shall be given not less than ten (10) days prior writtennotice by the Board of the intention to terminate him for Cause, such notice to state in detail theparticular act or acts or failure or failures to act that constitute the grounds on which theproposed termination for Cause is based, and
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Executive shall have ten (10) days after the date that such written notice has been given toExecutive in which to address the full Board and present arguments on his own behalf, with orwithout legal representation at the Executive’s election, regarding any such alleged act or failureto act. If a majority of the members of the full Board make a determination that Cause exists, thetermination shall be effective on the date immediately following the expiration of the ten (10) daynotice period. Otherwise, Cause shall not be determined to exist. For purposes hereof, the term“*Cause*” shall mean that one or more of the following has occurred:     (i) the Executive shall have been after the Effective Date convicted of, or shall havepleaded guilty or nolocontendere to, any felony;     (ii) the Executive shall have materially breached any provision of Section 10 hereof;     (iii) the Executive shall have committed any fraud, embezzlement, misappropriation offunds, or breach of fiduciary duty against the Company, in each case of a material nature;     (iv) the Executive shall have engaged in any willful misconduct with regard to theCompany resulting in or reasonably likely to result in a material loss to the Company orsubstantial damage to its reputation; or     (v) the Executive shall have willfully breached in any material respect any materialprovision of the Company’s Code of Conduct, which breach would generally result in thetermination of a senior executive of the Company and, to the extent any such breach iscurable, the Executive shall have failed to cure such breach within ten (10) days afterwritten notice of the alleged breach is provided to the Executive.     (d) By the Company without Cause. The Company may terminate the Executive’semployment at any time without Cause effective upon written notice to the Executive.     (e) By the Executive Voluntarily. The Executive may terminate his employment at anytime effective upon at least thirty (30) days prior written notice to the Company.     (f) By the Executive for Good Reason. The Executive may terminate his employment forGood Reason by providing the Company thirty (30) days’ written notice setting forth in reasonablespecificity the event that constitutes Good Reason, within sixty (60) days of the occurrence ofsuch event. During such thirty (30) day notice period, the Company shall have a cure right (ifcurable), and, if not cured within such period, Executive’s termination will be effective upon theexpiration of such cure period. For this purpose, unless agreed to by the Executive, the term“*Good Reason*” shall mean:
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     (i) the assignment to the Executive of any duties inconsistent in any substantialrespect with the Executive’s position, authority or responsibilities or any duties whichare illegal or unethical;     (ii) any reduction or diminution in the Executive’s then titles or positions(including removal or failure to be re-elected to the Board or as Vice Chairman), or amaterial reduction or diminution in the Executive’s then authorities, duties orresponsibilities or reporting requirements with the Company; provided, however, that thesale of all or substantially all of the assets or stock of Loral Holdings Corporation orSpace Systems/Loral, Inc. (each, a “Subsidiary”) shall not, by itself, constitute GoodReason;     (iii) a reduction in Base Salary, the Target Annual Bonus or any of the benefitsdescribed in Section 5 of this Agreement to the extent not permitted under Section 5;     (iv) the relocation by the Company of the Executive’s primary place of employment withthe Company to a location outside of New York County, New York;     (v) other material breach of this Agreement by the Company;     (vi) the failure of the Company to obtain the assumption in writing delivered to theExecutive of its obligation to perform this Agreement by any successor to all orsubstantially all of the assets of the Company; or     (vii) the failure of the Company to grant the 2008 Equity Award, unless such failureis due to the failure to obtain the Approvals.     Section 7. Death and Employment Termination Payments and Benefits.     (a) Voluntary Termination, Termination For Cause. Upon any termination of employmentduring the Term either (i) by the Executive without Good Reason under Section 6(e), or (ii) by theCompany for Cause as provided in Section 6(c), all payments, Base Salary and other benefitshereunder shall cease at the effective date of termination. Notwithstanding the foregoing, theExecutive shall be entitled to receive from the Company (i) Base Salary earned or accrued throughthe date the Executive’s employment is terminated payable in accordance with the Company’s generalpayroll policies, (ii) reimbursement for any and all monies advanced in connection with theExecutive’s employment for reasonable business expenses incurred by the Executive through the datethe Executive’s employment is terminated in accordance with the Company’s reimbursement policies asprovided above, (iii) all other payments and benefits to which the Executive may be entitled underthe terms (including time, form and manner of payment) of any applicable compensation arrangementor benefit plan or program of the Company, including any earned and accrued, but unused vacationpay and benefits under and in accordance with the terms and provisions of the SERP, but excludingany
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entitlement to severance under any Company severance policy generally applicable to theCompany’s salaried employees, and (iv) excluding any accrued and unpaid Annual Bonus for theimmediately preceding year (collectively, the “*Accrued Benefits*”).     (b) Death. In the event of the Executive’s death during the Term, the Company shallhave no further obligations to the Executive or his beneficiaries other than to pay to theExecutive’s designated beneficiary or, if no beneficiary has been designated by the Executive, tohis estate (i) all Accrued Benefits paid in the time, form and manner set forth in Section 7(a),plus (ii) any Base Salary through the end of the calendar month in which the Executive’s deathoccurred, payable in accordance with the Company’s general payroll policies, plus (iii) any accruedand unpaid Annual Bonus for the immediately preceding year payable at the time the Company pays itsexecutives such bonus in accordance with its general payroll policies but in no event later thanMarch 15th of the year following the year to which such bonus relates, and (iv) anamount equal to that portion of the Annual Bonus, which but for the Executive’s death would havebeen earned by the Executive during the year of his death, pro-rated based on a formula, thedenominator of which shall be 365 and the numerator of which shall be the number of days during theyear of his death during which the Executive was employed by the Company on an active status,payable at the times the Company pays its executives such bonus in accordance with its generalpayroll policies but in no event later than March 15th of the year following the year towhich such bonus relates (the Accrued Benefits and the payment of the amounts set forth in clauses(iii) and (iv) of this Section 7(b) are collectively referred to as the “*Enhanced AccruedBenefits*”). In addition, any unvested stock options under the Stock Option Plan and any deferredcompensation under the Initial Option Agreement that would have become vested on the next date ofvesting applicable thereto shall become vested and shall remain exercisable or be paid as providedunder the terms of the applicable plan or agreement as to a portion thereof based on a formula, thedenominator of which shall be 365 and the numerator of which shall be the number of days during theyear of his death during which the Executive was employed by the Company on an active status. TheExecutive’s medical, prescription and dental coverage shall continue for the benefit of theExecutive’s family through the end of the Term upon the same terms and conditions applicablegenerally to active employees and their families; provided, however, that theCompany portion of the monthly insurance premiums provided pursuant to the immediately precedingsentence shall be taxable income to the Executive in the year in which such coverage is provided.     (c) Termination without Cause or for Good Reason. In the event that the Executive’semployment is terminated during the Term by the Company without Cause or by the Executive for GoodReason, the Executive shall be entitled to receive as his exclusive right and remedy in respect ofsuch termination, (i) all Enhanced Accrued Benefits (except that for purposes of this Section 7(c),the term “death” in Section 7(b)(iv) above shall be replaced with the term “termination”), paid inaccordance with the time, form and manner of payment set forth in Section 7(b), and (ii) a lump sumseverance payment equal to two (2) times the sum of (A) the Executive’s Base Salary in effect onthe date of termination and (B) the Annual Bonus for the immediately preceding
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year (or Target Annual Bonus if termination occurs during the first year of the Term or beforethe Annual Bonus for the prior fiscal year is declared) (*“Severance Payments”*). In addition, allunvested stock options, other equity grants and all deferred compensation under the Initial OptionAgreement shall become fully vested and shall remain exercisable or be paid as provided under theterms of the applicable plan or agreement. Following the termination of the Executive’s employmentby the Company without Cause or by the Executive for Good Reason, the Company shall providemedical, dental and life insurance coverage, upon the same terms and conditions applicablegenerally to similarly situated executives who remain employed with the Company, for a period ofeighteen (18) months; provided, however, that for each of the eighteen (18) monthsfollowing such termination the Executive shall be responsible for payment of the regular employeeportion of the monthly insurance premiums for such insurance, applicable to similarly situatedexecutives who remain employed with the Company, and the Company shall be responsible for paymentof the regular Company portion of the monthly insurance premiums for such insurance, applicable tosimilarly situated executives who remain employed with the Company (the “Welfare SeveranceBenefits”); and further provided, however, that such obligation shall expire if the Executivecommences new employment prior to the expiration of such eighteen (18)-month period and becomescovered by substantially similar benefits. Notwithstanding anything herein to the contrary, theCompany portion of the monthly insurance premiums provided pursuant to the immediately precedingsentence shall be taxable income to the Executive in the year in which such coverage is provided.In all instances, subject to the terms set forth in Section 7(f) and Section 11 below, including,but not limited to, Section 11(d), the Severance Payments shall be paid to the Executive in theform of a single lump sum payment sixty (60) days after the Executive’s termination. For theavoidance of doubt, in the event that all or substantially all of the assets or stock of aSubsidiary are acquired by a person or entity (the “Acquirer”) and the Executive is offeredemployment, as the principal executive officer of such Subsidiary consistent with the terms of thisAgreement, by the Acquirer or any affiliate of the Acquirer that directly or indirectly owns suchAcquirer, or any successor to the Acquirer or any such affiliate and the Executive accepts suchoffer and such Acquirer, affiliate or successor, as applicable, assumes this Agreement, theExecutive shall not be treated as having a termination of employment without Cause or for GoodReason; provided, however, that the Executive shall have no obligation to accept any such offer ofemployment. Notwithstanding anything herein to the contrary, to the extent that the Executivewillfully commits a material breach of any provision of Section 10 hereof (a “Material Breach”),the Company shall be relieved of its obligation to provide the Welfare Severance Benefits aftersuch Material Breach and the Executive shall be obligated to pay to the Company, as partial damagesrelated to the Severance Payments, for such Material Breach an amount equal to X multiplied by Y,where X is a fraction, the denominator of which is 365 and the numerator of which is the number ofdays remaining in the 365 days immediately following the Executive’s termination of employment bythe Company without Cause or by the Executive for Good Reason after any such Material Breach, and Yis the amount of Severance Payments (the “Severance Mitigation”). For example, if the Executivecommits a Material Breach on the 182nd day following his termination of
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employment by the Company without Cause or by the Executive for Good Reason and the Executivereceived $2,000,000 in Severance Payments, the Executive would be obligated to pay $1,000,000 tothe Company. Payment of the Severance Mitigation shall not limit the remedies of the Company andits affiliates under Section 10 or any other remedies that may be available to them, if a court ofcompetent jurisdiction or arbitrator, as applicable, determines that the Executive has breached anyof the provisions of this Section 10.     (d) Termination due to Disability. In the event that the Executive’s employment isterminated during the Term due to the disability of the Executive under this Agreement, the Companyshall have no further obligation to the Executive other than to pay the Executive (in addition toany disability insurance payments to which the Executive is entitled pursuant to Section 5 above)all Enhanced Accrued Benefits (except that for purposes of this Section 7(d), the term “death” inSection 7(b)(iv) above shall be replaced with the term “disability”), paid in accordance with thetime, form and manner of payment set forth in Section 7(b). In addition, any unvested stockoptions under the Stock Option Plan and any deferred compensation under the Initial OptionAgreement that would have become vested on the next date of vesting applicable thereto shall becomevested and shall remain exercisable or be paid as provided under the terms of the applicable planor agreement, as to a portion thereof based on a formula, the denominator of which shall be 365 andthe numerator of which shall be the number of days during the year of his disability during whichthe Executive was employed by the Company on an active status.     (e) No Other Benefits. Except as specifically provided in this Section 7 or Section8, the Executive shall not be entitled to any other compensation, severance or other benefits fromthe Company or any of its subsidiaries or affiliates upon the termination of this Agreement or theExecutive’s employment for any reason whatsoever. Payment by the Company of all Accrued Benefits,Enhanced Accrued Benefits and Severance Payments (if applicable) and contributions to the cost ofthe Executive’s confirmed participation in the Company’s group medical, dental and life insuranceplans that may be due to the Executive under the applicable termination provision of this Section 7shall constitute the entire obligation of the Company to the Executive. Notwithstanding anythingcontained in this Agreement to the contrary, the Executive (or his beneficiary or estate) shall beentitled, under all circumstances, to (i) payment of all amounts under and in accordance with theterms and provisions of the SERP and other retirement plans, including, without limitation, whetheror not the Executive is employed by the Company, (ii) rights of indemnification that the Executivehas been granted or at law, or (iii) continued coverage under the Company’s director and officerliability insurance policy at the same level as other officers and directors while potentialliability exists.     (f) Condition. The Company will not be required to make the payment and provide thebenefits stated in Section 7(c) and Section 8, unless the Executive executes and delivers to theCompany, a waiver and release agreement in the form attached hereto as **Exhibit C**with all periodsof revocation expired within sixty (60) days of termination.
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     (g) Resignation from Company Offices. In the event of the Executive’s termination ofemployment for any reason, the Executive shall resign and shall be deemed to have resignedimmediately from the Board (if the Executive is then a member of the Board) and any and all otherdirectorships, offices and positions with, on behalf of, or relating to the Company or any of itssubsidiaries, effective as of the date of the Executive’s termination of employment with theCompany.     (h) Expiration of Term. Upon the expiration of the Term, the Executive shall beentitled to the Annual Bonus earned in accordance with the terms of the MIB Program for the lastfiscal year of the Term, payable in accordance with the Company’s general payroll policies, but inno event later than March 15th of the year following the year to which such bonusrelates, despite the fact that the Executive may not be employed with the Company when such bonusesare paid. To the extent that the Executive’s employment with the Company terminates for any reasonat or following the expiration of the Term, the Executive shall also be entitled to any AccruedBenefits. In addition, if, at or after the expiration of the Term Executive’s employment with theCompany ceases for any reason without the parties having entered into a new employment contract oran extension of this Agreement (notwithstanding who declined such future arrangement), theExecutive shall be entitled to the continued vesting of the outstanding and unvested portion of the2008 Equity Award (the “Outstanding and Unvested Award”) for an additional one-year periodfollowing the expiration of such employment, and the Outstanding Unvested Award shall expire on thelater of the end of such one-year period or as provided under the terms of the applicable awardagreement (but not beyond the original last exercise date of the grant); provided that if the 2008Equity Award or any such other equity award consists of restricted stock, such additional vestingshall occur on the date such restricted stock would be treated as taxable income to the Executive.     Section 8. 280G Gross-Up.     (a) In the event that the Executive shall become entitled to payments and/or benefits providedby this Agreement or any other amounts in the “nature of compensation” (whether pursuant to theterms of this Agreement or any other plan, arrangement or agreement with the Company, or anyarrangement or agreement with any person whose actions result in a change of ownership or effectivecontrol covered by Code Section 280G(b)(2) (a “280G Change in Control”) or any person affiliatedwith the Company or such person) as a result of a 280G Change in Control (collectively the *“CompanyPayments”*), and such Company Payments will be subject to the tax (the *“Excise Tax”*) imposed by CodeSection 4999 (and any similar tax that may hereafter be imposed by any taxing authority), subjectto Section 8(d) and Section 11 below the Company shall pay to the Executive at the time specifiedbelow (i) an additional amount (the *“Gross-Up Payment”*) such that the net amount retained by theExecutive, after deduction of any Excise Tax on the Company Payments and any U.S. federal, state,and for local income or payroll tax upon the Gross-up Payment provided for by this paragraph, butbefore deduction for any U.S. federal, state, and local income or payroll tax on the CompanyPayments, shall be equal to the Company Payments and (ii) an
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amount equal to the product of any deductions disallowed for federal, state or local incometax purposes because of the inclusion of the Gross-Up Payment in the Executive’s adjusted grossincome multiplied by the highest applicable marginal rate of federal, state or local incometaxation, respectively, for the calendar year in which the Gross-Up Payment is to be made.     (b) Notwithstanding the foregoing, if it shall be determined that the Executive is entitled toa Gross-Up Payment, but that if the Company Payments (other than that portion valued under TreasuryRegulation Section 1.280G, Q&A 24(c)) (the “Cash Payments”) are reduced by the amountnecessary such that the receipt of the Company Payments would not give rise to any Excise Tax (the“Reduced Payment”) and the Reduced Payment would not be less than ninety-five percent (95%)of the Cash Payment, then no Gross-Up Payment shall be made to the Executive and the Cash Payments,in the aggregate, shall be reduced to the Reduced Payment. If the Reduced Payment is to beeffective, payments shall be reduced in the following order (i) any cash severance based on amultiple of Base Salary or Annual Bonus, (ii) any other cash amounts payable to the Executive,(iii) any benefits valued as parachute payments; (iv) acceleration of vesting of any stock optionsfor which the exercise price exceeds the then fair market value; and (v) acceleration of vesting ofany equity not covered by subsection (iv) above.     (c) In the event that the Internal Revenue Service or court ultimately makes a determinationthat the excess parachute payments plus the base amount is an amount other than as determinedinitially, an appropriate adjustment shall be made with regard to the Gross-Up Payment or ReducedPayment, as applicable to reflect the final determination and the resulting impact on whether thepreceding Section 8(d) applies.     (d) For purposes of determining whether any of the Company Payments and Gross-Up Payments(collectively the *“Total Payments”*) will be subject to the Excise Tax and the amount of such ExciseTax, (i) the Total Payments shall be treated as “parachute payments” within the meaning of CodeSection 280G(b)(2), and all “parachute payments” in excess of the “base amount” (as defined underCode Section 280G(b)(3)) shall be treated as subject to the Excise Tax, unless and except to theextent that, in the opinion of the Company’s independent certified public accountants appointedprior to any change in ownership (as defined under Code Section 280G(b)(2)) or tax counsel selectedby such accountants or the Company (the *“Accountants”*) such Total Payments (in whole or in part)either do not constitute “parachute payments,” including giving effect to the recalculation ofstock options in accordance with Treasury Regulation Section 1.280G-1, Q&A 33, represent reasonablecompensation for services actually rendered within the meaning of Code Section 280G(b)(4) in excessof the “base amount” or are otherwise not subject to the Excise Tax, and (ii) the value of anynon-cash benefits or any deferred payment or benefit shall be determined by the Accountants inaccordance with the principles of Code Section 280G. To the extent permitted under RevenueProcedure 2003-68, the value determination shall be recalculated to the extent it would bebeneficial to the Executive. In the event that the Accountants are serving as accountant orauditor for the individual, entity or group effecting the Change in Control, the
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Executive may appoint with the approval of the Company, which approval shall not beunreasonable or unreasonably delayed, another nationally recognized accounting firm to make thedeterminations hereunder (which accounting firm shall then be referred to as the “Accountants”hereunder). All determinations hereunder shall be made by the Accountants which shall providedetailed supporting calculations both to the Company and the Executive at such time as it isrequested by the Company or the Executive. If the Accountants determine that payments under thisAgreement must be reduced pursuant to this paragraph, they shall furnish the Executive with awritten opinion to such effect. The determination of the Accountants shall be final and bindingupon the Company and the Executive.     (e) For purposes of determining the amount of the Gross-Up Payment, the Executive’s actualU.S. federal income tax rate in the calendar year in which the Gross-Up Payment is to be made andstate and local income taxes at the Executive’s actual rate of taxation in the state and localityof the Executive’s residence for the calendar year in which the Company Payment is to be made, netof the maximum reduction in U.S. federal income taxes which could be obtained from deduction ofsuch state and local taxes if paid in such year, shall be used. In the event that the Excise Taxis subsequently determined by the Accountants to be less than the amount taken into accounthereunder at the time the Gross-Up Payment is made, the Executive shall repay to the Company, atthe time that the amount of such reduction in Excise Tax is finally determined, the portion of theprior Gross-Up Payment attributable to such reduction (plus the portion of the Gross-Up Paymentattributable to the Excise Tax and U.S. federal, state and local income tax imposed on the portionof the Gross-up Payment being repaid by the Executive if such repayment results in a reduction inExcise Tax or a U.S. federal, state and local income tax deduction), plus interest on the amount ofsuch repayment at the rate provided in Code Section 1274(b)(2)(B). Notwithstanding the foregoing,in the event any portion of the Gross-Up Payment to be refunded to the Company has been paid to anyU.S. federal, state and local tax authority, repayment thereof (and related amounts) shall not berequired until actual refund or credit of such portion has been made to the Executive, and interestpayable to the Company shall not exceed the interest received or credited to the Executive by suchtax authority for the period it held such portion. The Executive and the Company shall mutuallyagree upon the course of action to be pursued (and the method of allocating the expense thereof) ifthe Executive’s claim for refund or credit is denied.     (f) In the event that the Excise Tax is later determined by the Accountant or the InternalRevenue Service to exceed the amount taken into account hereunder at the time the Gross-Up Paymentis made (including by reason of any payment the existence or amount of which cannot be determinedat the time of the Gross-Up Payment), the Company shall make an additional Gross-Up Payment inrespect of such excess (plus any interest or penalties payable with respect to such excess) at thetime that the amount of such excess is finally determined.
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     (g) Subject to Section 11 below, including, but not limited to, Section 11(d)(1), the Gross-upPayment or portion thereof provided for above shall be paid not later than the thirtieth (30th) dayfollowing a 280G Change in Control which subjects the Executive to the Excise Tax; *provided*,*however*, that if the amount of such Gross-up Payment or portion thereof cannot be finallydetermined on or before such day, the Company shall pay to the Executive on such day an estimate,as determined in good faith by the Accountant, of the minimum amount of such payments and shall paythe remainder of such payments, subject to further payments pursuant to Section 8(c) hereof, assoon as the amount thereof can reasonably be determined, but in no event later than the ninetieth(90th) day after the occurrence of the event subjecting the Executive to the Excise Tax.Notwithstanding any other provision of this Agreement, all Gross-Up Payments under this Section 8shall be made to the Executive no later than by the end of the Executive’s taxable year followingthe Executive’s taxable year in which the Executive remits the applicable taxes. In the event thatthe amount of the estimated payments exceeds the amount subsequently determined to have been due,subject to Section 8(m) below, such excess shall constitute a loan by the Company to the Executive,payable on the fifth (5th) day after demand by the Company (together with interest at the rateprovided in Code Section 1274(b)(2)(B)).     (h) In the event of any controversy with the Internal Revenue Service (or other taxingauthority) with regard to the Excise Tax, the Executive shall permit the Company to control issuesrelated to the Excise Tax (at its expense), but the Executive shall control any other issuesunrelated to the Excise Tax. In the event that the issues are interrelated, the Executive and theCompany shall in good faith cooperate. In the event of any conference with any taxing authority asto the Excise Tax or associated income taxes, the Executive shall permit the representative of theCompany to accompany the Executive, and the Executive and his representative shall cooperate withthe Company and its representative.     (i) The Company shall be responsible for all charges of the Accountant.     (j) The Company and the Executive shall promptly deliver to each other copies of any writtencommunications, and summaries of any verbal communications, with any taxing authority regarding theExcise Tax covered by this provision.     (k) Nothing in this Section 8 is intended to violate the Sarbanes-Oxley Act and to the extentthat any advance or repayment obligation hereunder would do so, such obligation shall be modifiedso as to make the advance a nonrefundable payment to the Executive and the repayment obligationnull and void.     Section 9. Mitigation and Offset. The Executive is not required to seek otheremployment or otherwise mitigate the amount of any payments to be made by the Company pursuant tothis Agreement. The payments provided in this Agreement shall not be reduced by any compensationearned by the Executive as the result of employment by another employer after the termination dateor otherwise. However, the amounts
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payable under this Agreement (including, but not limited to, any Severance Payments) shall besubject to setoff for any amounts that the Executive owes to the Company, but not any other claimof the Company; provided that (i) any set off against amounts subject to Code Section 409A shall belimited to debts incurred in the ordinary course of the service relationship between the Executiveand the Company, (ii) the entire amount of such set off against amounts subject to Code Section409A in any of the Executive’s taxable years does not exceed $5000, and (iii) the set off is madeat the same time and in the same amount as the debt otherwise would have been due and collectedfrom the Company.     Section 10. Restrictive Covenants.     (a) Proprietary Information. In the course of service to the Company, the Executivewill have access to confidential specifications, know-how, strategic or technical data, marketingresearch data, product research and development data, manufacturing techniques, confidentialcustomer lists, sources of supply and trade secrets, all of which are confidential and may beproprietary and are owned or used by the Company, or any of its subsidiaries or affiliates. Suchinformation shall hereinafter be called “*Proprietary Information*” and shall include any and allitems enumerated in the preceding sentence and coming within the scope of the business of theCompany or any of its subsidiaries or affiliates as to which the Executive may have access, whetherconceived or developed by others or by the Executive alone or with others during the Executive’speriod of service with the Company, whether or not conceived or developed during regular workinghours. Proprietary Information shall not include any records, data or information which are in thepublic domain during Executive’s service with the Company or after the Executive’s service with theCompany has terminated, *provided*the same are not in the public domain as a consequence ofdisclosure by the Executive in violation of this Agreement.     (b) Non-Use and Non-Disclosure. The Executive shall not during the Term or at anytime thereafter (i) disclose any Proprietary Information to any person other than (A) the Company,(B) the Company’s or its affiliates’ directors, officers or employees who, in the reasonablejudgment of the Executive, need to know such Proprietary Information, (C) such other persons towhom the Executive has been specifically instructed to make disclosure by the Board; and in allsuch cases only to the extent required in the course of the Executive’s service to the Company, (D)as required by law or court or administrative order, or (E) in the good faith performance of theExecutive’s duties hereunder or (ii) use any Proprietary Information, directly or indirectly, forhis own benefit or for the benefit of any other person or entity.     (c) Return of Documents. All notes, letters, documents, records, tapes and othermedia of every kind and description containing Proprietary Information and any copies, in whole orin part, thereof (collectively, the “*Documents*”), whether or not prepared by the Executive, shallbe the sole and exclusive property of the Company. The Executive shall safeguard all Documents inthe Executive’s possession and shall
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surrender to the Company at the time his employment terminates, or at such other time or timesas the Board or its designee may specify, all Documents then in the Executive’s possession orcontrol; *provided*, that the Executive shall be permitted to retain his rolodex and similar addressbooks, including those in electronic form.     (d) Non-Competition. At all times during the Executive’s employment with the Companyor any affiliate during the Term, and for a period of twelve (12) months following the terminationduring the Term of employment with the Company or any affiliate for any reason (or twenty-four (24)months in the case of termination following a Change in Control) (the “*Restricted Period*”), theExecutive will not engage in Competition (as defined below) with the Company. For purposes of thisAgreement, “*Competition*” shall mean engaging in, or otherwise directly or indirectly being employedby, or acting as a consultant or adviser (paid or unpaid) to, or being a director, officer,employee, principal, agent, stockholder, member, owner or partner of (i) Boeing, Lockheed, AlcatelSpace or Astrium, (ii) PanAmSat, SES Astra, Intelsat, New Skies Satellites, (iii) any businesssimilar to the businesses described in clause (i) or (ii) above that competes with the servicesprovided by the Company, (iv) any business that competes with a business that the Company engagesin as of the date of the Executive’s termination of employment with the Company, as described orotherwise contemplated in the Company’s business plan for the year of such termination ofemployment, or (v) any business that competes with a business that the Company is, to the knowledgeof the Executive, preparing to engage in as of the date of the Executive’s termination ofemployment with the Company, and any transferee of or successor to any of the foregoing businesses;*provided*, *however*, that the foregoing shall not prevent or be violated by the Executive’s servicein a non-competitive portion of a company or business enterprise in Competition with the Companyor, as a result thereof, owning compensatory equity in such a company or business enterprise inCompetition with the Company; and *further provided, however,*that the prohibition of clauses (i)and (ii) above shall apply only so long as such entities compete with the services provided by theCompany. Notwithstanding anything to the contrary in this Agreement, the Executive may, directlyor indirectly, own, solely as an investment, securities of a business enterprise in Competitionwith the Company or its subsidiaries which are publicly traded on a national or regional stockexchange or on the over-the-counter market if the Executive (i) is not a controlling person of or amember of a group which controls such business enterprise and (ii) does not, directly orindirectly, own five percent (5%) or more of any class of securities of such business enterprise orless than five percent (5%) in any mutual fund, private equity fund, hedge fund or similarcollective investment, so long as the Executive’s investment is passive.     (e) Non-Solicitation of Employees. At all times during the Restricted Period, exceptin the course of the Executive’s service to the Company and consistent with Executives duties tothe Company, the Executive will not directly or indirectly solicit or in any manner encourageemployees of the Company or any affiliate who were employed by the Company within the six (6)-monthperiod prior to the termination of the Executive’s employment with the Company or any affiliate toleave its employ and will
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not offer or cause to be offered employment to any such person; *provided*, *however*, that therestrictions in this paragraph shall not apply to (i) general solicitations that are notspecifically directed to employees of the Company or any affiliate, (ii) any administrative supportstaff or (iii) serving as a reference at the request of an employee.     (f) Non-Solicitation of Customers or Suppliers. At all times during the RestrictedPeriod, the Executive will not knowingly solicit or in any manner encourage, directly orindirectly, customers of or suppliers to the Company or any affiliate who were customers of orsuppliers to the Company or any affiliate within the twelve-month period prior to the terminationof the Executive’s employment with the Company or any affiliate to terminate or diminish theirrelationship with the Company or any affiliate.     (g) Reasonableness. The Executive has carefully considered the nature, extent andduration of the restrictions and obligations contained in this Agreement, including, withoutlimitation, provisions of this Section 10 and acknowledges and agrees that such restrictions arefair and reasonable in all respects to protect the legitimate interests of the Company and itsaffiliates and that these restrictions are designed for the reasonable protection of the businessof the Company and that of its affiliates.     (h) Remedies. The Executive recognizes that any breach of this Section 8shall cause irreparable injury to the Company or its affiliates, inadequately compensable inmonetary damages. Accordingly, in addition to any other legal or equitable remedies that may beavailable to the Company, Executive agrees that the Company or its affiliates shall be able to seekand obtain injunctive relief in the form of a temporary restraining order, preliminary injunction,or permanent injunction against the Executive to enforce this Agreement. To the extent that anydamages are calculable resulting from the breach of this Agreement, the Company and its affiliatesshall also be entitled to recover such damages. Any recovery of damages by the Company and itsaffiliates shall be in addition to and not in lieu of the injunctive relief to which the Companyand its affiliates are entitled and any Severance Mitigation.     Section 11. Section 409A of the Code.     (a) Section 409A. It is intended that the provisions of this Agreement comply withCode Section 409A or be exempt therefrom, and this Agreement shall be administered, and allprovisions of this Agreement shall be construed, in a manner consistent with the requirements foravoiding taxes or penalties under Code Section 409A.     (b) Installments. If under this Agreement, an amount is to be paid in two or moreinstallments, for purposes of Code Section 409A, each installment shall be treated as a separatepayment.     (c) Separation From Service. Notwithstanding anything herein to the contrary, thepayment (or commencement of a series of payments) hereunder of any nonqualified deferredcompensation (within the meaning of Code § 409A) upon a
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termination of employment shall be delayed until such time as Employee has also undergone a“separation from service” as defined in Treas. Reg. § 1.409A-1(h), at which time such nonqualifieddeferred compensation (calculated as of the date of the Executive’s termination of employmenthereunder) shall be paid (or commence to be paid) to the Executive on the schedule set forthhereunder with respect to such nonqualified deferred compensation as if the Executive had undergonesuch termination of employment (under the same circumstances) on the date of his ultimate“separation from service”; provided, however, that the Executive shall be deemed to have suffered a“separation from service” as of a given date for purposes of Treas. Reg. § 1.409A-1(h) to theextent that it is reasonably anticipated that the Executive’s level of *bona fide*services to theCompany, as an employee, independent contractor, or otherwise, will permanently decrease to lessthan 50% of the average level of services performed by the Executive for the Company in the36-month period immediately preceding such date.     (d) Specified Employee. If the Executive is deemed on the date of termination of hisemployment to be a “specified employee”, within the meaning of that term under Section409A(a)(2)(B) of the Code and using the identification methodology selected by the Company fromtime to time, or if none, the default methodology, then:     (i) With regard to any payment, the providing of any benefit or any distribution ofequity that constitutes “deferred compensation” subject to Code Section 409A, payable uponseparation from service, such payment, benefit or distribution shall not be made orprovided prior to the earlier of (i) the expiration of the six-month period measured fromthe date of the Executive’s Separation from Service or (ii) the date of the Executive’sdeath; and     (ii) On the first day of the seventh month following the date of the Executive’sSeparation from Service or, if earlier, on the date of his death, (x) all payments delayedpursuant to this Section 11 shall be paid or reimbursed to the Executive in a lump sumwithout interest, and any remaining payments and benefits due under this Agreement shall bepaid or provided in accordance with the normal dates specified from them herein and (y) alldistributions of equity delayed pursuant to this Section 11(d) shall be made to theExecutive.     (e) Reimbursement. With regard to any provision herein that provides forreimbursement of costs and expenses or in-kind benefits, except as permitted by Code Section 409A,(i) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchangefor another benefit, (ii) the amount of expenses eligible for reimbursement, of in-kind benefits,provided during any taxable year shall not affect the expenses eligible for reimbursement, orin-kind benefits to be provided, in any other taxable year, provided that the foregoing clause (ii)shall not be violated without regard to expenses reimbursed under any arrangement covered bySection 105(b) of the Code solely because such expenses are subject to a limit related to theperiod the arrangement is in effect and (iii) such payments shall be made on or before the last dayof the Executive’s taxable year following the taxable year in which the expense occurred.
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     (f) Payment Period. Whenever a payment under this Agreement specifies a paymentperiod with reference to a number of days (e.g., “payment shall be made within forty (40) daysfollowing the date of termination), the actual date of payment within the specified period shall bewithin the sole discretion of the Company.     (g) Compliance. If any provision of this Agreement (or of any award of compensation,including equity compensation or benefits) would cause the Executive to incur any additional tax orinterest under Code Section 409A, the Company shall, after consulting with the Executive, reformsuch provision to comply with Code Section 409A, but only if, after consultation, such provisioncan be reformed to so comply; provided that the Company agrees to maintain, to the maximum extentpracticable, the original intent and economic benefit to the Executive of the applicable provisionwithout violating the provisions of Code Section 409A. The Company shall indemnify and hold theExecutive harmless, on an after tax basis, for any additional tax (including interest and penaltieswith respect there to) that may be imposed on the Executive by Code Section 409A as a result of theOption being granted subject to the Approvals. Any payment or reimbursement for taxes madepursuant to this Section 11(g) (and any gross up thereon) shall be paid to the Executive promptlyafter such obligation is incurred, but in no event later than the end of the calendar yearfollowing the calendar year in which the tax is paid by the Executive.     (h) Other Company Plans, Agreements and Programs. If any provision of any Companyplan, agreement or program in which the Executive participates would cause the Executive to incurany additional tax or interest under Code Section 409A, upon the Executive’s request, the Companyshall reform such provision to comply with Code Section 409A, but only, if after such request, suchprovision can be reformed to so comply, in a manner that shall maintain, to the maximum extentpracticable, the economic benefit to the Company and the Executive of the applicable provisionwithout violating the provisions of Code Section 409A, provided that nothing herein, and no actiontaken or not taken by the Company at the request of or in consultation with the Executive, isintended to guarantee compliance with Code Section 409A.
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     Section 12. Severable Provisions. The provisions of this Agreement are severable andthe invalidity of any one or more provisions shall not affect the validity of any other provision.In the event that a court of competent jurisdiction shall determine that any provision of thisAgreement or the application thereof is unenforceable in whole or in part because of the durationor scope thereof, the parties hereto agree that said court in making such determination shall havethe power to reduce the duration and scope of such provision to the extent necessary to make itenforceable, and that the Agreement in its reduced form shall be valid and enforceable to the fullextent permitted by law.     Section 13. Notices. All notices hereunder, to be effective, shall be in writing andshall be delivered by hand or mailed by certified mail, postage and fees prepaid, as follows:          If to the Company: Loral Space & Communications Inc.    600 Third Avenue     New York, New York 10016    Attention: General Counsel          If to the Executive to the address on file with the Company.or to such other address as a party may notify the other pursuant to a notice given in accordancewith this Section 13. All notices to any person shall be deemed given when actually received bythe person.     Section 14. Miscellaneous.     (a) Amendment. This Agreement may not be amended or revised except by a writingsigned by the parties.     (b) Assignment and Transfer. The provisions of this Agreement shall be binding on andshall inure to the benefit of any successor in interest to the Company. Neither this Agreement norany of the rights, duties or obligations of the Executive shall be assignable by the Executive, norshall any of the payments required or permitted to be made to the Executive by this Agreement beencumbered, transferred or in any way anticipated, except as required by applicable laws. ThisAgreement shall not be terminated solely by reason of the merger or consolidation of the Companywith any corporate or other entity or by the transfer of all or substantially all of the assets ofthe Company to any other person, corporation, firm or entity; provided that the assignee ortransferee is the successor to all or substantially all of the assets of the Company and suchassignee or transferee assumes the rights and duties of the Company as contained in this Agreement,either contractually or as a matter of law. However, all rights of the Executive under thisAgreement shall inure to the benefit of and be enforceable by the Executive’s personal or legalrepresentatives, estates, executors, administrators, heirs and beneficiaries. All amounts payableto the Executive hereunder shall be paid, in the event of the Executive’s death, to the Executive’sestate, heirs or representatives.
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     (c) Withholding. The Company shall be entitled to withhold from any amounts to bepaid or benefits provided to the Executive hereunder any federal, state, local, or foreignwithholding or other taxes or charges which it is from time to time required to withhold. TheCompany shall be entitled to rely on an opinion of counsel if any question as to the amount orrequirement of any such withholding shall arise.     (d) Waiver of Breach. A waiver by the Company or the Executive of any breach of anyprovision of this Agreement by the other party shall not operate or be construed as a waiver of anyother or subsequent breach by the other party.     (e) Survival of Certain Provisions. Provisions of this Agreement shall survive anytermination of employment and the expiration of the Term if so provided herein or if necessary ordesirable fully to accomplish the purposes of such provision, including, without limitation, theobligations of the Company under Sections 7 and 8 hereof if the Executive is terminated during theTerm and the obligations of the Executive under Section 10 hereof.     (f) Attorney’s Fees.     (i) The Company shall pay the reasonable legal fees incurred by the Executive inconnection with this Agreement and to the extent such payment is taxed to the Executive,the Company shall gross up such amount so that the Executive has no after-tax costtherefrom (collectively, “*Legal Fees*”). The Company shall pay all Legal Fees to theExecutive no later than by the end of the calendar year following the calendar year thelegal services are provided to the Executive.     (ii) In the event that any action is brought to enforce any of the provisions of thisAgreement, or to obtain money damages for the breach thereof, all expenses (includingreasonable attorneys’ fees and expenses) shall be paid by the party incurring such fees orexpenses; *provided*, *however*, that the Company shall reimburse Executive for such fees andexpenses to the extent that the Executive prevails on any issues raised in such action.The Company shall reimburse the Executive for such fees and expenses in the form of asingle lump sum payment thirty (30) days from the date of the arbitrator’s finaldetermination but in any event no later than March 15th following the year inwhich the arbitrator makes his final determination.     (g) Entire Agreement. This Agreement, the Stock Option Plan, the Option Agreements,the Indemnification Agreement referred to in Section 5(f) hereof, the Certificates of Incorporationof the Company and of each of its affiliates and the SERP, constitute the entire understanding ofthe parties with respect to the subject matter hereof and supercede all prior negotiations,understandings, discussions, and agreements, whether written or oral, between them.
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     (h) Captions. Captions herein have been inserted solely for convenience of referenceand in no way define, limit or describe the scope or substance of any provision of this Agreement.     (i) Counterparts. This Agreement may be executed in one or more counterparts, each ofwhich shall be deemed an original and shall have the same effect as if the signatures hereto andthereto were on the same instrument.     (j) Governing Law. This Agreement and the enforcement thereof shall be governed andcontrolled in all respects by the internal laws of the State of New York, without application ofthe conflict of laws provisions thereof.     (k) Arbitration. Any dispute or controversy arising from or relating to thisAgreement and/or the Executive’s employment or relationship with the Company shall be resolved bybinding arbitration, to be held in New York or in any other location mutually agreed to by theCompany and the Executive in accordance with the rules and procedures of the American ArbitrationAssociation. Judgment upon the award rendered by the arbitrator may be entered in any court havingjurisdiction thereof.     (l) Acknowledgement of Representation. The Executive and the Company acknowledge thatthey have been represented by counsel of their own choosing and have received a full and completeexplanation of their rights and obligations under this Agreement and, therefore, in the event of adispute over the meaning of this Agreement or any provision thereof, neither party shall beentitled to any presumption of correctness in favor of the interpretation advanced by such party oragainst the interpretation advanced by the other party.     (m) Guarantee.     (i) Each of Loral Holdings Corporation and Space Systems/Loral, Inc. (each a*“Guarantor”*) hereby acknowledge the benefit they will receive as a result of the Executiveserving as Chief Executive Officer of the Company and accordingly, irrevocably andunconditionally guarantees the due and punctual payment and performance of all obligationsof the Company under this Agreement; *provided*, *however*, that a Guarantor’s guaranteeobligation hereunder shall terminate and cease to have any force or effect immediately upon(x) such Guarantor ceasing to be a direct or indirect subsidiary or parent of the Companyor (y) the sale of all or substantially all of such Guarantor’s assets pursuant to anApproved Transaction (as defined below) in which a Guarantor does not receive all orsubstantially all of the consideration of such sale.     (ii) Notwithstanding anything in this Agreement to the contrary and for as long as theGuarantor’s obligations hereunder are in effect, the Executive hereby acknowledges andagrees that at any time a Guarantor may effectuate, and this Agreement shall not in any wayprohibit or restrict the Guarantor from effectuating, and the Executive shall not have anyright or claim with respect to,
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rely upon, or challenge (A) any transfer by the Guarantor of any or all of its funds,assets or other property to either: (1) the Company or any of its direct or indirectsubsidiaries or their successors (each a *“Group Entity”*), including by way of dividend,distribution, payment, lease, sale, assignment, transfer, merger, consolidation orotherwise, or (2) any other person, pursuant to a transaction that the Guarantor’s Board ofDirectors determines in good faith to effect in furtherance of a legitimate businesspurpose of the Guarantor or any Group Entity (an “*Approved Transaction”*) or (B) theliquidation or dissolution of a Guarantor.     **IN WITNESS WHEREOF**, the parties hereto have duly executed this Agreement as of the day andyear first above written.       LORAL SPACE & COMMUNICATIONS INC.       By: /s/ Avi Katz       Name: Avi Katz  Title: Senior Vice President, General Counsel and Secretary       /s/ Michael B. Targoff     Michael B. TargoffLORAL HOLDINGS CORPORATION (solely for purposes of Section 14(m) hereof)     By: