Document:

Exhibit
10.17

 

PANAMSAT
CORPORATION ANNUAL INCENTIVE PLAN 2000

Amended and Restated as of July 28,
2004

 

 

SECTION 1. 
ESTABLISHMENT AND PURPOSE

 

1.1  Establishment of the Plan.  PanAmSat Corporation, a Delaware
corporation, hereby establishes an annual incentive compensation plan to be
known as the PanAmSat Corporation Annual Incentive Plan 2000.  The Plan permits the awarding of annual cash
bonuses to Employees of the Company, based on the achievement of pre-established
performance goals.

 

Upon approval by
the Board of Directors, subject to approval by the shareholders of the Company,
the Plan shall become effective as of January 1, 2000 and continue until
December 31, 2005, as set forth in Section 10.

 

1.2  Purpose.  The purposes of the Plan are (i) to provide competitive total
cash compensation opportunities based on corporate and individual performance,
(ii) to reinforce the communication of the Company’s mission, objectives and
goals, and (iii) to enhance the Company’s ability to attract, retain, and motivate
the highest caliber employees.

 

The purposes of
the Plan shall be carried out by the payment to Participants of annual
incentive cash awards, subject to the terms and conditions of the Plan.  The Plan also is intended to secure the full
deductibility of incentive awards payable to the Executive Officers. All
compensation payable under this Plan to Executive Officers is intended to be
deductible by the Company under Section 162(m) of the Code.

.

SECTION 2. 
DEFINITIONS

 

As used in the
Plan, the following terms shall have the meanings set forth below (unless
otherwise expressly provided).

 

“Award
Opportunity” means the various levels of incentive awards which a
Participant may earn under the Plan, as established by the Committee pursuant
to Section 5.1.

 

“Base Salary”
shall mean the regular base salary earned by a Participant during the Plan Year
prior to any salary reduction contributions made to the Company Retirement
Savings Plan or any other Company deferred compensation plans; provided,
however, that Base Salary shall not include awards under this Plan,
pay for unused accrued vacation, any bonus or profit sharing benefits, the
Company matching contribution under any plan providing such, overtime,
relocation allowances, severance payments, any premium allowances for overseas
service, moving allowances, or any other special awards as determined by the
Committee.

 

“Beneficial
Owner” shall have the meaning ascribed to such term in Rule 13d-3
of the General Rules and Regulations under the Exchange Act.

 

1

 

“Board”
or “Board
of Directors” means the Board of Directors of the Company.

 

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

 

“Committee”
means the Compensation Committee of the Board, provided that the committee
shall consist of two (2) or more individuals, appointed by the Board to
administer the Plan, pursuant to Section 3, who are “outside directors” to the
extent required by and within the meaning of Section 162(m) of the Code, as
amended from time to time.

 

“Company”
means PanAmSat Corporation, a Delaware corporation (including any and all
subsidiaries), and any successor thereto.

 

“Disability”
shall have the meaning ascribed to such term in the Company’s long term
disability plan.

 

“Effective
Date” means the date the Plan becomes effective, as set forth in
Section 1.1 herein.

 

“Employee”
means an employee of the Company who is recommended by the Chief Executive
Officer of the Company, and is approved by the Committee for participation in
the Plan, or is included in the Plan under administrative guidelines adopted by
the Committee.

 

“Exchange Act”
means the Securities Exchange Act of 1934, as amended from time to time.

 

“Executive
Officers” shall mean an executive officer as set forth in Section
162(m) of the Code or any other executive officer designated by the Committee
for purposes of exempting distributions under the Plan from Section 162(m)(3)
of the Code.

 

“Final Award”
means the actual award earned during a Plan Year by a Participant, as
determined by the Committee at the end of such Plan Year.

 

“Financial”
shall mean the corporate financial performance of the Company and its
subsidiaries.

 

“Non-financial”
shall mean the non-financial performance of a specified segment of the
Company’s operations designated as such by the Chief Executive Officer and
approved by the Committee for purposes of the Plan, such as a business unit,
organizational unit, division or other such segmentation.

 

“Participant”
means an Employee who is participating in the Plan pursuant to Section 4.

 

2

 

“Person”
shall have the meaning ascribed to such term in Section 3(a)(9) of the Exchange
Act and used in Sections 13(d) and 14(d) thereof, including a “group” as
defined in Section 13(d).

 

“Plan”
means the PanAmSat Corporation Annual Incentive Plan 2000, as amended from time
to time.

 

“Plan Year”
means the Company’s fiscal year, commencing on each January 1 and ending on
December 31.

 

“Retirement”
means a termination of employment by a Participant on or after the date on
which such Participant attains age sixty-two; provided, however, that on
the date of such termination, the Company does not have grounds to terminate
the Participant’s employment for Cause.

 

“Target
Incentive Award” means the award to be paid to a Participant when
performance measures are achieved, as established by the Committee.

 

SECTION 3. 
ADMINISTRATION

 

The Plan shall be
administered by the Committee.  Except
with respect to the matters that under Section 162(m) of the Code and Treasury
Regulation Section 1.162-27(e) are required to be determined or
established by the Committee to qualify awards under the Plan as qualified
performance-based compensation, the Committee shall have the power to
delegate to any officer or employee of the Company the authority to administer
and interpret the procedural aspects of the Plan, subject to the Plan’s terms,
including adopting and enforcing rules to decide procedural and administrative
issues.

 

The Committee
shall be entitled to rely in good faith upon any report or other information
furnished to it by any officer or employee of the Company or from the
financial, accounting, legal or other advisers of the Company.  Each member of the Committee, each
individual designated by the Committee to administer the Plan and each other
person acting at the direction of or on behalf of the Committee shall not be
liable for any determination or anything done or omitted to be done in good
faith by him or by any other member of the Committee or any other such
individual in connection with the Plan, except for his own willful misconduct
or as expressly provided by statute, and to the extent permitted by law and the
bylaws of the Company, shall be fully indemnified and protected by the Company
with respect to such determination, act or omission.

 

Subject to the
limitations set forth in the Plan, the Committee shall: (i) select from the
Employees of the Company, those who shall participate in the Plan, (ii) grant
Award Opportunities in such forms and amounts as it shall determine, (iii)
impose such limitations, restrictions, and conditions upon such awards as it
shall deem appropriate, (iv) interpret the Plan

 

 

3

 

and adopt, amend, and
rescind administrative guidelines and other rules and regulations relating to
the Plan, (v) make any and all factual determinations in connection with the
administration and interpretation of the Plan, (vi) correct any defect or
omission or reconcile any inconsistency in this Plan or in any Award
Opportunity granted hereunder, and (vii) make all other necessary
determinations and take all other actions necessary or advisable for the
implementation and administration of the Plan. 
The Committee’s determinations on matters within its authority shall be
conclusive and binding upon all parties.

 

SECTION 4. 
ELIGIBILITY AND PARTICIPATION

 

4.1  Eligibility.  Each Employee (as defined in Section 2
herein) who is recommended by the Chief Executive Officer of the Company to
participate in the Plan, and who is approved by the Committee, or is included
in the Plan under administrative guidelines adopted by the Committee, shall be
eligible to participate in the Plan for such Plan Year, subject to the
limitations of Section 7 herein.

 

4.2  Participation.  Participation in the Plan shall be
determined annually by the Committee based upon the criteria set forth in the
Plan.  Employees who are eligible to
participate in the Plan shall be notified of the performance goals and related
Award Opportunities for the relevant Plan Year, as soon as practicable.

 

4.3  Partial Plan Year Participation.  Except as provided in Section 9, in the
event that an Employee becomes eligible to participate in the Plan subsequent
to the commencement of a Plan Year, then such Employee’s Final Award shall be
based on the Base Salary earned as an eligible Employee, providing that the
Employee has participated in the Plan for at least three months.

 

4.4  No Right to Participate.  No Participant or other Employee shall at
any time have a right to participate in the Plan for any Plan Year, despite
having participated in the Plan during a prior Plan Year.

 

SECTION 5.  AWARD
DETERMINATION

 

5.1  Performance Goals.  Prior to the beginning of each Plan Year, or
as soon as practicable thereafter (but in no event more than ninety days from
the beginning of such Plan Year), the Committee shall approve or establish in
writing the performance goals for that Plan Year.  For any performance period that is less than twelve months, the
performance goals shall be established before 25% of the relevant performance
period has elapsed.

 

Except as provided
in Section 9, the performance goals may include, without limitation, any
combination of Financial, Non-financial and individual performance
goals.  Performance measures and their
relative weight may vary by job classification.  After the performance goals are established, the Committee will
align the achievement of the performance 

 

4

 

goals with the Award
Opportunities (as described in Section 5.2 herein), such that the level of
achievement of the preestablished performance goals at the end of the Plan Year
will determine the amount of the Final Award. 
Except as provided in Section 9, the Committee also shall have the
authority to exercise subjective discretion in the determination of Final
Awards, as well as the authority to delegate the ability to exercise subjective
discretion in this respect.

 

The Committee also
may establish one or more Company-wide performance goals which must be
achieved for any Participant to receive an award for that Plan Year.

 

The performance
period with respect to which awards may be payable under the Plan shall
generally be the Plan Year; provided, however, that the Committee
shall have the authority and discretion to designate different performance
periods under the Plan.

 

5.2  Award Opportunities.  Prior to the beginning of each Plan Year, or
as soon as practicable thereafter (but in no event more than ninety days from
the beginning of such Plan Year),  the
Committee shall establish an Award Opportunity for each Participant.  Such Award Opportunity shall vary in
relation to the job classification of each Participant. Except as provided in
Section 9, in the event a Participant changes job levels during a Plan Year,
the Participant’s Award Opportunity may be adjusted to reflect the amount of
time at each job level during the Plan Year.

 

5.3  Adjustment of Performance Goals.  Except as provided in Section 9, the
Committee shall have the right to adjust the performance goals and the Award
Opportunities (either up or down) during a Plan Year, to the extent permitted
by Code Section 162(m) and the regulations and interpretative rulings
thereunder, if it determines that external changes or other unanticipated
business conditions have materially affected the fairness of the goals and have
unduly influenced the Company’s ability to meet them.  Further, in the event of a Plan Year of less than twelve (12)
months, the Committee shall have the right to adjust the performance goals and
the Award Opportunities accordingly, at its sole discretion.

 

5.4  Final Award Determinations.  At the end of each Plan Year, Final Awards
shall be computed for each Participant as determined by the Committee.  Except as provided in Section 9, each
individual award shall be based upon (i) the Participant’s Target Incentive
Award percentage, multiplied by his Base Salary, (ii) the satisfaction of Financial,
Non-financial and individual performance, and (iii) the satisfaction of
individual performance (if applicable). 
Final Award amounts may vary above or below the Target Incentive Award,
based on the level of achievement of the preestablished Financial, Non-financial,
and individual performance goals.

 

5.5  Limitations.  The amount payable to a Participant for any
calendar year shall not exceed $3,000,000.

 

 

5

 

SECTION
6.  PAYMENT OF FINAL AWARDS

 

6.1  Form and Timing of Payment.  As soon as practicable after the end of each
Plan Year, the Committee shall certify in writing the extent to which the
Company and each Participant has achieved the performance goals for such Plan
Year, including the specific target objective(s) and the satisfaction of any
other material terms of the awards, and the Committee shall calculate the
amount of each Participant’s incentive award for the relevant period.  Final Award payments shall be payable to the
Participant, or to his estate in the case of death, in a single cash payment,
as soon as practicable after the end of each Plan Year, after the Committee, in
its sole discretion, has certified in writing that the specified performance
goals were achieved.

 

6.2  Payment of Partial Awards.  In the event a Participant no longer meets
the eligibility criteria as set forth in the Plan during the course of a
particular Plan Year, the Committee may, in its sole discretion, compute and
pay a partial award for the portion of the Plan Year that an Employee was a
Participant.

 

6.3  Unsecured Interest.  No Participant or any other party claiming
an interest in amounts earned under the Plan shall have any interest whatsoever
in any specific asset of the Company. 
To the extent that any party acquires a right to receive payments under
the Plan, such right shall be equivalent to that of an unsecured general
creditor of the Company.

 

SECTION 7. 
TERMINATION OF EMPLOYMENT

 

7.1  Termination of Employment Due to Death,
Disability, Retirement, or Transfer to an Affiliate Not Included in the Plan.  In the event a Participant’s employment is
terminated by reason of death, Disability, Retirement, or transfer to an
affiliated company not participating in the Plan, the Final Award determined in
accordance with Section 5.4 herein shall be reduced to reflect participation
prior to such termination only.  The
reduced award shall be based upon the amount of Base Salary earned during the
Plan Year prior to termination.  In the
case of a Participant’s Disability, the employment termination shall be deemed
to have occurred on the date the Committee determines that the requirements of
Disability have been satisfied.

 

The Final Award
thus determined shall be payable as soon as practicable following the end of
the Plan Year in which employment termination occurred, or sooner (except with
respect to Executive Officers), as determined by the Committee in its sole
discretion.

 

 

7.2  Termination of Employment for Other
Reasons.  In the event a
Participant’s employment is terminated for any reason other than death,
Disability, Retirement or transfer to an affiliated company not participating
in the Plan (of which the Committee shall be the sole judge), all of the
Participant’s rights to a Final Award for the Plan Year then in progress shall
be forfeited.  However, the Committee,
in its sole discretion, may pay a partial award for the portion 

 

 

6

 

of that Plan Year that
the Participant was employed by the Company, computed as determined by the
Committee.

 

SECTION
8.  RIGHTS OF PARTICIPANTS

 

8.1  Employment.  Nothing in the Plan shall interfere with or
limit in any way the right of the Company to terminate any Participant’s
employment at any time, nor confer upon any Participant any right to continue
in the employ of the Company.

 

8.2  Nontransferability.  No right or interest of any Participant in
the Plan shall be assignable or transferable, or subject to any lien, directly,
by operation of law, or otherwise, including, but not limited to, execution,
levy, garnishment, attachment, pledge, and bankruptcy.

 

SECTION
9.  EXECUTIVE OFFICERS

 

9.1  Applicability
..  The provisions of this Section 9
shall apply only to Executive Officers. 
In the event of any inconsistencies between this Section 9 and the other
Plan provisions, the provisions of this Section 9 shall control.

 

9.2  No Partial Plan Year Participation.  An Executive Officer who becomes eligible
after the beginning of a Plan Year may participate in the Plan for the
succeeding Plan Year.

 

9.3  Award Determination.  Prior to the beginning of each Plan Year, or
as soon as practicable thereafter, the Committee shall establish the Target
Incentive Award percentage for each Executive Officer and performance goals for
that Plan Year.  Performance goals to be
used shall be chosen from among any combination of the Financial and
Non-financial performance goals set forth in Schedule A and such individual
performance goals as established by the Committee.  The Committee may select one or more of the performance goals
specified from Plan Year to Plan Year which need not be the same for each
Executive Officer in a given year.

 

At the end of the
Plan Year and prior to payment, the Committee shall certify in writing the
extent to which the performance goals and any other material terms were
satisfied.  Final Awards shall be
computed for each Executive Officer based on (i) the Participant’s Target
Incentive Award multiplied by his Base Salary, and (ii) Financial, Non-financial
and individual performance (if applicable).

 

Final Award amounts
may vary above or below the Target Incentive Award based on the level of
achievement of the pre-established Financial, Non-financial and
individual performance goals.

 

 

 

7

 

9.4  Non-adjustment of Performance Goals.  Once established, performance goals shall
not be changed during the Plan Year. 
Participants shall not receive any payout when the Company or Non-financial
segment (if applicable) does not achieve at least minimum performance goals.

 

9.5 Discretionary
Adjustments.  The Committee retains
the discretion to eliminate or decrease the amount of the Final Award otherwise
payable to a Participant.

 

9.6  Possible Modification.  If, on advice of the Company’s tax counsel,
the Committee determines that Code Section 162(m) and the regulations
thereunder will not adversely affect the deductibility for federal income tax
purposes of any amount paid under the Plan by applying one or more of Section
2, 4.3, 5.1, 5.2, 5.3 or 5.4 to an Executive Officer without regard to the
exceptions to such Section or Sections contained in this Section 9, then the
Committee may, in its sole discretion, apply such Section or Sections to the
Executive Officer without regard to the exceptions to such Section or Sections
that are contained in this Section 9.

 

SECTION
10.  AMENDMENT AND MODIFICATION

 

The Committee, in
its sole discretion, without notice, at any time and from time to time, may
modify or amend, in whole or in part, any or all of the provisions of the Plan,
or suspend or terminate it entirely; provided, however, that no such
modification, amendment, suspension, or termination may, without the consent of
a Participant (or his or her beneficiary in the case of the death of the
Participant), reduce the right of a Participant (or his or her beneficiary, as
the case may be) to a payment or distribution hereunder to which he or she has
already earned and is otherwise entitled.

 

SECTION 11. 
MISCELLANEOUS

 

11.1  Governing Law.  The Plan, and all agreements hereunder,
shall be governed by and construed in accordance with the laws of the State of
Delaware.

 

11.2  Withholding Taxes.  The Company shall have the right to deduct
from all payments under the Plan any Federal, state, or local income and
employment taxes required by law to be withheld with respect to such payments.

 

11.3  Gender and Number.  Except where otherwise indicated by the
context, any masculine term used herein also shall include the feminine, the
plural shall include the singular, and the singular shall include the plural.

 

11.4  Severability.  In the event any provision of the Plan shall
be held illegal or invalid for any reason, the illegality or invalidity shall
not affect the remaining parts of the Plan, and the Plan shall be construed and
enforced as if the illegal or invalid provision had not been included.

 

 

8

 

11.5  Costs of the Plan.  All costs of implementing and administering
the Plan shall be borne by the Company.

 

11.6  Successors.  All obligations of the Company under the Plan shall be binding
upon and inure to the benefit of any successor to the Company, whether the
existence of such successor is the result of a direct or indirect purchase,
merger, consolidation, or otherwise, of all or substantially all of the
business and/or assets of the Company.

 

9

 

SCHEDULE A

 

	
   

                                                    Financial
  Performance Measures

  
	
   

  
	
   

  Earnings before
  interest, taxes, depreciation, and amortization

  	
   

  Cash value added

  
	
   

  Return on
  investment

  	
   

  Economic value
  added

  
	
   

  Return on net
  assets

  	
   

  Earnings before
  interest and taxes

  
	
   

  Return on
  invested capital

  	
   

  Profit before
  taxes

  
	
   

  Return on equity

  	
   

  Net operating
  profit after taxes

  
	
   

  Backlog — value
  of leases under contract before operation

  	
   

  Profit margin

  
	
   

  Cash-flow return
  on investment

  	
   

  Revenue growth

  

 

 

	
   

                                                Non-Financial
  Performance Measures

  
	
   

  Expense
  management

  
	
   

  Customer
  satisfaction

  
	
   

  Quality

  
	
   

  Human resources
  management

  
	
   

  Development and
  execution of strategic initiatives

  

 

 

10Exhibit 10.18

 

[PANAMSAT CORPORATION]

 

August 20, 2004

 

James W. Cuminale

16 Sylvan Lane

Old Greenwich, CT 
06870

 

Dear Mr. Cuminale:

 

Reference is made to that certain PanAmSat Corporation Executive Change
in Control Severance Agreement (the “Agreement”), entered into as of
October 15, 2002, between yourself and PanAmSat Corporation (the “Company”).

 

This is to confirm our understanding that the Company will continue to
provide severance payments available to you pursuant to the Agreement until its
expiration.  Following the expiration of
the Agreement, if you are terminated by the Company without Cause (as defined
below) or you terminate your employment with the Company for Good Reason (as
defined below), then you shall be entitled to receive the severance payments
and benefits set forth in the Agreement, except that all references to a two
times multiplier shall be changed to a one times multiplier.

 

For purposes of this letter agreement, “Cause” shall mean: (i)
willful and continued failure to perform your material duties with respect to
the Company or it subsidiaries which continues beyond 10 days after a written
demand for substantial performance is delivered to you by the Company (the “Cure
Period”); or (ii) the willful or intentional engaging by you in conduct
that causes material and demonstrable injury, monetarily or otherwise, to the
Company, Constellation, LLC and their respective affiliates; or (iii)
conviction of, or a plea of nolo contendere
to, a crime constituting (A) a felony under the laws of the United States or
any state thereof or (B) a misdemeanor involving moral turpitude; or (iv) a
material breach of your management stockholder’s or other agreements, if any,
including, without limitation, engaging in any action in breach of the restrictive
covenants as set forth above, which continues beyond the Cure Period (to the
extent that, in the Board of Directors’ reasonable judgment, such breach can be
cured).  In connection with any
termination for Cause, you shall be given a statement of the specific reasons
constituting the grounds for termination for Cause and shall have the right to
appear before the Board of Directors to respond to allegations of any actions
allegedly constituting “Cause” prior to any termination by the Board of
Directors for Cause is effective.

 

For purposes of this letter agreement, “Good Reason” shall mean:
(i) a reduction in your base salary or annual incentive compensation
opportunity (other than a general reduction in base salary that affects all
members of senior management in substantially the same proportions, provided
that your base salary may not be reduced by more than 10%, and in no event
shall the base salary be reduced to an amount less than 10% of the base salary
on the date

 

 

hereof); or (ii) a substantial reduction in your duties and
responsibilities, or (iii) a transfer of your primary workplace by more than
fifty (50) miles from the current workplace.

 

Except as expressly provided herein, the Agreement remains in full
force and effect.  This letter agreement
may not be amended or modified except by an instrument in writing signed by
each of the parties hereto. This letter agreement shall be governed by, and
construed in accordance with, the laws of the State of New York.  This letter agreement may be executed in two
or more counterparts, each of which shall be deemed to be an original, but all
of which shall constitute one and the same agreement.

 

[Signature Page Follows]

 

 

If the foregoing reflects your understanding, kindly sign and return a
copy of this letter, whereupon it will constitute a binding agreement between
us.

 

	
   

  	
  Sincerely,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PANAMSAT CORPORATION.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Michael J. Inglese

  	
   

  
	
   

  	
  Name: 
  Michael J. Inglese

  
	
   

  	
  Title:   
  Executive Vice President & Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
  AGREED
  AND ACCEPTED

  	
   

  
	
  AS
  OF AUGUST     , 2004

  	
   

  
	
   

  	
   

  
	
  James W. Cuminale

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ James W. Cuminale

  	
   

  	
   

  
	
  Name: James W. Cuminale

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