Exhibit 10.3


 


 


Iridium
Communications Inc.

2014 EXECUTIVE PERFORMANCE BONUS PLAN


 


1.           Purpose.  
As part of its executive compensation program, Iridium Communications Inc. (the “Company”) has designed
this 2014 Executive Performance Bonus Plan (the “Bonus Plan”) for the 2014 calendar year. The Bonus Plan
operates under, and is part of, the 2012 Iridium Communications Inc. Equity Incentive Plan (the “2012 Plan”),
which has been approved by the Board and the Company’s stockholders. The Bonus Plan provides Participants with incentive
awards, paid in cash and restricted stock units, based on the achievement of objectively determinable performance goals. The Bonus
Plan is intended to permit the payment of bonuses that may qualify as Performance-Based Compensation.


 


2.           Definitions.
Defined terms not explicitly defined in the Bonus Plan but defined in the 2012 Plan shall have the same definitions as in the
2012 Plan.


 


(a)          “Base
Salary” means the base salary earned by the Participant during the Performance Period. Such Base Salary shall be
before both (i) deductions for taxes or benefits, and (ii) deferrals of compensation pursuant to Company-sponsored plans.


 


(b)          “Bonus
Award” means, with respect to each Participant, the award determined pursuant to Section 5(g) below, which is
subject to the Committee’s authority under Section 5(g) to eliminate or reduce the Bonus Award otherwise payable
based on the Personal Performance Factor.


 


(c)          “Code”
means the Internal Revenue Code of 1986, as amended.


 


(d)          “Committee”
means the Compensation Committee of the Board (or a subcommittee thereof), or such other committee of the Board (including, without
limitation, the full Board) to which the Board has delegated power to act under or pursuant to the provisions of the 2012 Plan;
provided, however, that with respect to payments under the Bonus Plan intended to qualify as Performance-Based Compensation,
the Committee shall consist, to the extent required by Section 162(m), solely of two or more members of the Board who qualify as
“outside directors” within the meaning of Section 162(m).


 


(e)          “Common
Stock” means the common stock of the Company.


 


(f)          “Maximum
Bonus Award” means, as to any Participant for the Performance Period, the maximum award that may be granted to the
Participant under the Bonus Plan. In no event may the Maximum Bonus Award paid in respect of a calendar year exceed $2 million.


 


(g)          “Participant”
means an eligible officer selected by the Committee, in its sole discretion, to participate in the Bonus Plan.


 


(h)          “Payout
Determination Date” means the date upon which the Committee determines the amounts payable pursuant to the Target
Bonus Award with respect to the completed Performance Period, in accordance with Section 5(g).


 




    	 



    	 



    

 


(i)          “Payout
Formula” means, as to any Performance Period, the formula or payout matrix established by the Committee pursuant
to Section 5 in order to determine the Bonus Awards (if any) to be paid to each Participant. The Payout Formula may be (but is
not required to be) expressed as a percentage (which may be more than 100%) of the Target Bonus Award. The Payout Formula may differ
from Participant to Participant and, with respect to any one Participant in a given Performance Period.


 


(j)          “Performance-Based
Compensation” means compensation that is intended to qualify as “performance-based compensation” within
the meaning of Section 162(m).


 


(k)          “Performance
Goals” means the goal(s) (or combined goal(s)) determined by the Committee, in its sole discretion, to be applicable
to a Participant with respect to a Bonus Award as set forth in Section 13(mm) of the 2012 Plan. The criteria set forth in Section
13(mm) of the 2012 Plan may relate to the Company, one or more of its Affiliates or one or more of its or their divisions or units,
or any combination of the foregoing, and may be applied on an absolute basis and/or be relative to one or more peer group companies
or indices, or any combination thereof, all as the Committee shall determine. In addition, to the degree consistent with Section
162(m), the Performance Goals may be calculated in respect of Performance-Based Compensation without regard to extraordinary items.


 


(l)          “Performance
Period” means the 2014 calendar year.


 


(m)          “Personal
Performance Factor” means, with respect to the Performance Period, the percentage determined by the Committee based
on the Participant’s personal performance during the Performance Period, but in no event greater than 100%.


 


(n)          “Section 162(m)”
means Section 162(m) of the Code, or any successor to Section 162(m), as such Section may be interpreted from
time to time by the Internal Revenue Service, whether by regulation, notice or otherwise.


 


(o)          “Target
Bonus Award” means the target award payable under the Bonus Plan to a Participant for the Performance Period, as
determined by the Committee in accordance with Section 5(c).


 


(p)          “Target
Determination Cutoff Date” means the latest possible date that will not jeopardize a Target Bonus Award’s qualification
as Performance-Based Compensation.


 


(q)          “Target
Determination Date” means the date or dates upon which the Committee sets the Performance Goals and each Participant’s
Target Bonus Award with respect to the Performance Period, in accordance with Sections 5(b) and 5(c).


 




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3.           Plan
Administration.


 


(a)          The
Committee shall be responsible for the general administration and interpretation of the Bonus Plan and for carrying out its provisions.
Subject to the requirements for qualifying compensation as Performance-Based Compensation, the Committee may delegate specific
administrative tasks to Company employees or others as appropriate for proper administration of the Bonus Plan. Subject to the
limitations on Committee discretion imposed under Section 162(m), the Committee shall have such powers as may be necessary
to discharge its duties hereunder, including, but not by way of limitation, the following powers and duties, but subject to the
terms of the Bonus Plan:


 


(i)          authority
to adopt Performance Goals and Target Bonus Awards under the Bonus Plan for the Performance Period on or prior to the Target Determination
Cutoff Date;


 


(ii)         authority
to determine eligibility and the amount, manner and time of payment of any Bonus Awards hereunder, including authority to exercise
negative discretion in reducing any Maximum Bonus Award;


 


(iii)        authority
to construe and interpret the terms of the Bonus Plan;


 


(iv)        authority
to prescribe forms and procedures for purposes of Bonus Plan participation and distribution of Bonus Awards; and


 


(v)         authority
to adopt rules, regulations and bylaws and to take such actions as it deems necessary or desirable for the proper administration
of the Bonus Plan.


 


(b)          Any
rule or decision by the Committee that is not inconsistent with the provisions of the Bonus Plan or the 2012 Plan shall be
conclusive and binding on all persons, and shall be given the maximum deference permitted by law.


 


4.           Eligibility.  
Participation in the Bonus Plan is at the discretion of the Committee. Officers of the Company who are regularly employed (full
or part time) during the Performance Period at the level of Executive Vice President or above and who are subject to Section 16
of the Securities Exchange Act of 1934, are eligible to participate in the Bonus Plan. If an officer is hired after the beginning
of the Performance Period the Committee shall have the discretion to determine whether such officer should be eligible to participate
in the Bonus Plan. If the Participant’s Bonus Plan target percent changes during the Performance Period, the officer’s
Target Bonus Award will be pro-rated based on those adjusted figures as follows: the Target Bonus Award will be based on the number
of days in the Performance Period with the former Bonus Plan annual bonus target percent and the number of days in the Performance
Period with the new Bonus Plan annual target percent. A Participant must be employed through the payment date to earn any award
under this Bonus Plan; if the Participant’s employment terminates before the payment date of any Bonus Award, the Participant
will not be eligible to receive a Bonus Award, or any portion of a Bonus Award, except as provided in an applicable severance plan
or in an individual employment or retention agreement with such Participant. If a Participant is on a leave of absence for a portion
of the Performance Period, the Participant will be eligible for a Bonus Award under the Bonus Plan based on actual salary earned
during the Performance Period (exclusive of any salary replacement benefits paid during the leave via insurance).


 




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5.           How
the Bonus Plan Works. 


 


(a)          Bonus
Plan Components. The Bonus Plan components are: (i) the Performance Goals; (ii) the Target Bonus Award; (iii) the Maximum
Bonus Award; (iv) the Personal Performance Factor; and (v) the Bonus Award.


 


(b)          Performance
Goal Determination. On the Target Determination Date, the Committee, in its sole discretion, shall establish the Performance
Goals for each Participant for the Performance Period. Such Performance Goals shall be set forth in writing on or prior to the
Target Determination Cutoff Date, and the achievement of such Performance Goals shall be substantially uncertain at such time.


 


(c)          Target
Bonus Award. On the Target Determination Date, the Committee, in its sole discretion, shall designate a Target Bonus Award
for each Participant. Each Participant’s Target Bonus Award shall be set forth in writing on or prior to the Target Determination
Cutoff Date. The Participant’s Bonus Award is calculated, in part (as further described below), by reference to his or her
Target Bonus Award. The Target Bonus Award equals the product of the annual bonus target percent and the Base Salary. For example,
an Executive Vice President whose annual bonus target percent is 50% and whose Base Salary is $200,000 would have his or her Bonus
Award calculated by reference to a Target Bonus Award of $100,000 ($200,000 x 50%).


 


(d)          Maximum
Bonus Award. Subject to Section 2(e) above, the Maximum Bonus Award that may be earned by a Participant is 200% of his or her
Target Bonus Award.


 


(e)          Payout
Formula. On the Target Determination Date, the Committee, in its sole discretion, shall establish the Payout Formula for purposes
of determining the Bonus Award that may be earned by each Participant. Each Payout Formula (a) shall be set forth in writing on
or prior to the Target Determination Cutoff Date, (b) shall provide for the payment of a Participant’s Bonus Award if the
Performance Goals for the Performance Period are achieved, and (c) may provide for a Bonus Award payment greater than or less than
the Participant’s Target Award (i.e., a Maximum Award and a threshold award), depending upon the extent to which the Performance
Goals are achieved. Notwithstanding the preceding, in no event shall a Participant’s Bonus Award for any Performance Period
exceed the Maximum Award.


 


(f)          Personal
Performance Factor. On the Payout Determination Date, the Committee, in its sole discretion, shall determine a Personal Performance
Factor for each Participant ranging from 0% to 100%, which may be applied to reduce, but not increase, a Participant’s Bonus
Award. A Participant’s Personal Performance Factor may be based upon the Committee’s assessment of the Participant’s
performance against personal goals during the Performance Period that are established and reviewed in connection with the Company’s
annual review process, or any additional factors the Committee considers relevant.


 




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(g)          Determination
of the Bonus Award. On the Payout Determination Date, the Committee shall determine and certify in writing (which may
be by approval of the minutes in which the certification was made) the extent to which the Performance Goals applicable to each
Participant for the Performance Period were achieved or exceeded. The Bonus Award for each Participant shall be determined by applying
the Payout Formula to the level of actual performance that has been certified by the Committee. Notwithstanding any contrary provision
of the Bonus Plan, the Committee, in its sole discretion, may eliminate or reduce the Bonus Award payable to any Participant below
that which otherwise would be payable under the Payout Formula in its discretion, including based upon the Personal Performance
Factor.


 


6.           Bonus
Award Payment.


 


(a)          Right
to Receive Payment.   Each Bonus Award under the Bonus Plan shall be paid solely from the general assets of the Company.
Nothing in the Bonus Plan shall be construed to create a trust or to establish or evidence any Participant’s claim of any
right to payment of a Bonus Award other than as an unsecured general creditor with respect to any payment to which he or she may
be entitled.


 


(b)          Form of
Payment of Bonus Awards.   Except as otherwise determined by the Committee, subject to Section 4, the Company shall
distribute all Bonus Awards to the Participants as follows.


 


(i)          Equity
Portion of Bonus Award. A portion of a Participant’s Bonus Award equal in value to twenty-five (25) percent of the Participant’s
Target Bonus Award calculated as of the Target Determination Date will be paid in the form of rights to receive shares of Common
Stock granted pursuant to the terms and conditions of the 2012 Plan and a form of restricted stock unit agreement attached hereto
as Exhibit A (“Restricted Stock Unit Agreement”) as determined by the Committee in its sole discretion
(“Restricted Stock Units”). The Restricted Stock Units shall be granted to each Participant on June 1,
2014 and shall vest on the Payout Determination Date, subject to the Participant’s Continuous Service (as defined in the
2012 Plan) through the Payout Determination Date and achievement of the Performance Goals and the level of the Participant’s
Personal Performance Factor for the Performance Period, as determined and certified by the Committee on the Payout Determination
Date, such that 0% of the Restricted Stock Units shall vest if the product of the percentage of the Performance Goals achieved
multiplied by the Participant’s Personal Performance Factor is 0%, 100% of the Restricted Stock Units shall vest if the product
of the percentage of the Performance Goals achieved multiplied by the Participant’s Personal Performance Factor is 25% or
greater, and the number of Restricted Stock Units that shall vest shall be determined by linear interpolation if the product of
the percentage of the Performance Goals achieved multiplied by the Participant’s Personal Performance Factor is greater than
0% but less than 25%. The level of achievement of the Performance Goals and the Personal Performance Factor shall apply first to
the vesting of Restricted Stock Units and then to the payment of any portion of a Participant’s Bonus Award in cash in accordance
with Section 6(b)(ii). The number of shares of Common Stock subject to the Restricted Stock Units granted to each Participant shall
be equal to (x) the Participant’s Target Bonus (as determined on the Target Determination Date), multiplied by (y) twenty-five
(25) percent, divided by (z) the fair market value of a share of Common Stock on the date of grant of the Restricted Stock Units
(as determined in accordance with the terms of the 2012 Plan), rounded down to the nearest whole share. Vested shares under the
Restricted Stock Units will be delivered in accordance with the terms of the Restricted Stock Unit Agreement, and shall be subject
to the terms of the 2012 Plan. For the avoidance of doubt, in the event any Participant’s Target Bonus Award is adjusted
in accordance with Section 4, such Participant’s Restricted Stock Units shall not be proportionately adjusted and any difference
shall be accounted for with respect to the payment of the cash portion of the Actual Bonus Award in accordance with Section 6(b)(ii).
Notwithstanding the foregoing, the Committee may, subject to the consent of a Participant, pay any portion of a Bonus Award that
is greater than or less than twenty-five (25) percent of the Participant’s Target Bonus Award in the form of Restricted Stock
Units, subject to the requirements of applicable law (including but not limited to the requirements of Section 409A of the Code).


 




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(ii)         Cash
Portion of Bonus Award. Subject to Sections 6(b)(i) and 6(d), the remainder of a Participant’s Bonus Award (determined
by subtracting the dollar value of the Restricted Stock Units on the Target Determination Date from the dollar value of the Bonus
Award), if any, shall be paid to the Participant in cash as soon as is practicable following the Payout Determination Date for
the Performance Period, but in no event later than the 15th day of the third calendar month after the end of the calendar year
in which the Participant’s Bonus Award is no longer subject to a substantial risk of forfeiture, within the meaning of Treasury
Regulation Section 1.409A-1(d). Payments under this Bonus Plan shall be made in a manner that complies with Treasury Regulation
Section 1.409A-1(b)(4) and this Bonus Plan shall be construed in accordance with such provision.


 


(iii)        Example.
Assume a Participant’s Base Salary is $300,000 and bonus target is 40% of Base Salary, such that the Participant’s
Target Bonus Award is $120,000. Assume further that the Committee determines that the Payout Formula for the applicable Performance
Period is equal to a Participant’s Target Bonus Award, multiplied by level of achievement of the Performance Goals, multiplied
by the Personal Performance Factor. Assume further that the fair market value of a share of Common Stock on June 1, 2014 is $25.00
per share. On June 1, 2014 the Participant shall be granted Restricted Stock Units with respect to 1,200 shares of Common Stock
($120,000 multiplied by 25% divided by $25.00) that are eligible to vest on the Payout Determination Date for the applicable Performance
Period provided that Participant remains in Continuous Service through the Payout Determination Date and the necessary percentage
of the Performance Goals is achieved. Assume further that on the Payout Determination Date the Committee determines that 80% of
the Performance Goals have been achieved for the Performance Period, and the Participant’s Personal Performance Factor for
the Performance Period is 100%. As a result of these determinations, the Participant is entitled to a Bonus Award for the Performance
Period equal to $96,000 ($120,000 x 80% x 100%). Since Restricted Stock Units with a value of $30,000 were granted to the Participant
on June 1, 2014 (100% of which shall vest), the cash portion of the Participant’s Bonus Award shall be $66,000, paid in accordance
with the terms of the Bonus Plan.


 




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(c)          Tax
Withholding. The Company will withhold from any payments under the Bonus Plan and from any other amounts payable to a Participant
by the Company any amount required to satisfy the income and employment tax withholding obligations arising under applicable federal
and state laws in respect of a Bonus Award. Without limiting the forgoing, with respect to any portion of a Bonus Award paid in
Restricted Stock Units, the Company may, in it sole discretion, satisfy all or any portion of its tax withholding obligations by
(i) causing a Participant to tender a cash payment, (ii) permitting or requiring a Participant to enter into a “same day
sale” commitment, if applicable, with a broker-dealer whereby the Participant irrevocably elects to sell a portion of the
shares of Common Stock to be delivered in connection with the settlement of the Restricted Stock Units to satisfy the Company’s
withholding obligation and whereby the broker-dealer irrevocably commits to forward the proceeds necessary to satisfy the Company’s
withholding obligation directly to the Company, or (iii) withholding from any shares of Common Stock otherwise issuable to a Participant
upon settlement of Restricted Stock Units a number of whole shares having a fair market value as of the date of payment (as determined
under the 2012 Plan) not in excess of the minimum amount of tax required to be withheld by the Company by law. The Company may
require the Participant to satisfy any remaining amount of the tax withholding obligations by tendering a cash payment. Each Participant
is encouraged to contact his or her personal legal or tax advisors with respect to the benefits provided by the Plan. Neither the
Company nor any of its employees, directors officers or agents are authorized to provide any tax advice to Participants with respect
to the benefits provided under the Bonus Plan.


 


(d)          Deferral.  
The Committee may defer payment of Bonus Awards payable in cash pursuant to Section 6(b)(ii), or any portion thereof, to Participants
in accordance with Section 409A of the Code as the Committee, in its sole discretion, determines to be necessary or desirable to
preserve the deductibility of such amounts under Section 162(m). In addition, the Committee, in its sole discretion, may permit
a Participant to defer receipt of the payment of cash that would otherwise be delivered to a Participant under the Bonus Plan.
Any such deferral elections shall comply with the requirements of Section 409A of the Code, and shall be subject to such rules and
procedures as shall be determined by the Committee in its sole discretion.


 


7.           Amendment
and Termination of the Bonus Plan.   The Committee may amend, modify, suspend or terminate the Bonus Plan, in whole
or in part, at any time, including adopting amendments deemed necessary or desirable to correct any defect or to supply omitted
data or to reconcile any inconsistency in the Bonus Plan or in any Bonus Award granted hereunder; provided, however, that
no amendment, alteration, suspension or discontinuation shall be made that would (i) increase the amount of compensation payable
pursuant to such Bonus Award, (ii) cause compensation that is, or may become, payable hereunder to fail to qualify as Performance-Based
Compensation, or (iii) change the payment dates of any Restricted Stock Units if such change would fail to comply with the requirements
of Section 409A of the Code. To the extent necessary or advisable under applicable law, including Section 162(m), Bonus Plan
amendments shall be subject to stockholder approval. At no time before the actual distribution of funds to Participants under the
Bonus Plan shall any Participant accrue any vested interest or right whatsoever under the Bonus Plan except as otherwise stated
in the Bonus Plan.


 


8.           Bifurcation
of the Bonus Plan.   It is the intent of the Company that the Bonus Plan, and all payments made hereunder, satisfy
and be interpreted in a manner that, in the case of Participants whose compensation is subject to the limitations on deductibility
of compensation provided under Section 162(m), qualify as Performance-Based Compensation. Any provision, application or interpretation
of the Bonus Plan inconsistent with this intent to satisfy the requirements of Section 162(m) shall be disregarded. However, notwithstanding
anything to the contrary in the Bonus Plan, the provisions of the Bonus Plan may at any time be bifurcated by the Board or the
Committee in any manner so that certain provisions of the Bonus Plan or any payment intended (or required) to satisfy the applicable
requirements of Section 162(m) are applicable only to persons whose compensation is subject to the limitations on deductibility
of compensation provided under Section 162(m).


 




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9.           No
Guarantee of Employment. The Bonus Plan is intended to provide a financial incentive to Participants and is not intended to
confer any rights to continued employment upon Participants whose employment will remain at-will and subject to termination by
either the Company or Participant at any time, with or without cause or notice.


 


10.         Recovery.
Any amounts paid under this Bonus Plan will be subject to recoupment in accordance with any clawback policy that the Company is
required to adopt pursuant to the listing standards of any national securities exchange or association on which the Company’s
securities are listed or as is otherwise required by the Dodd-Frank Wall Street Reform and Consumer Protection Act or other applicable
law. No recovery of compensation under such a clawback policy will be an event giving rise to a right to resign for “good
reason” or “constructive termination” (or similar term) under any plan of or agreement with the Company.


 




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EXHIBIT A


 


RESTRICTED STOCK UNIT
AGREEMENT


 




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