Document:

Exhibit 10.4

 

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

 

THIS AMENDED
AND RESTATED EMPLOYMENT AGREEMENT (the “Amended Agreement”) is entered
into this 10th day of October, 2005, by and between New Skies Satellites B.V.,
an entity established under Dutch law (the “Company”) and Michael C.
Schwartz (the “Employee”).

 

WHEREAS the
Company and the Employee have entered into that certain Employment Agreement on
or about August 2003 (the “2003 Agreement”), as amended and
restated as of November 1, 2004 (the “2004 Agreement”); and

 

WHEREAS, the
Company and the Employee desire to amend the 2004 Agreement in certain respects
and to restate the 2004 Agreement to read in its entirety as follows.

 

NOW,
THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

 

1.             EMPLOYMENT AND PERFORMANCE OF DUTIES

 

(a)  
The Company will employ the Employee in the position of Senior Vice President
of Marketing and Corporate Development. 
The Employee will report to the CEO or COO (or the functional equivalent
thereof).  During the term of this
Amended Agreement, the Employee shall perform such duties as may be requested
by the Company from time to time.  These
responsibilities may include, by way of example and without limitation, those
set forth in the attached job description.

 

(b)  
The Employee shall devote his full working time, energy and attention to the
performance of his duties and responsibilities and shall diligently and
faithfully endeavor to promote the business and best interests of the Company
and any entity that is a direct or indirect wholly-owned subsidiary of New
Skies Satellites Holdings Ltd. (such subsidiaries hereinafter referred to as
the “Affiliates”).  In performing
his job duties, the Employee will comply with the Company’s policies,
procedures and instructions.

 

(c)  
The Employee’s normal work location will be the Company’s headquarters office
in The Hague.  The Employee will be
employed on a full-time basis with normal working hours as specified by the
Employee’s manager.  The Company may
instruct the Employee to temporarily perform his duties at another location or
on an amended work schedule, or may charge the Employee temporarily or for
longer periods with other duties, in a reasonable manner and consistent with
Employee’s overall duties and level of responsibility.

 

(d)  
The Employee may not operate, participate in the management, operation or
control of, act as an employee, officer, consultant, agent or representative
of, or provide any services to any entity or any type of business or service,
in each case without the Company’s prior written consent.  It shall not be a violation of this subsection for
the Employee to (i) act or serve as a director, trustee or committee
member of any civic or charitable organization, or (ii) manage his
personal, financial and legal affairs, and the Company consents to Employee’s
serving on the Board of Directors of Big Buddy Performance, Inc., and Soft
Vault Systems, Inc.;

 

 

provided in each case that such activities, in
the Company’s judgment, do not interfere with the Employee’s performance of his
duties and responsibilities hereunder.

 

(e) The
Employee may not accept from any third party any gift of any nature arising
from or relating to Employee’s employment, without the Company’s prior written
consent or as permitted under any written Company policy.

 

2.             EFFECTIVE DATE

 

The effective
date of this Amended Agreement is January 1, 2005 (the “Effective Date”).
The Employee’s employment commenced on 1st October 2003.

 

3.             COMPENSATION

 

As
compensation for the agreements made by the Employee herein and the performance
by the Employee of his obligations hereunder, following the Effective Date,
during the employment period the Company shall pay the Employee a base salary
of U.S.$315,000 gross per annum (the “Base Salary”), payable in
accordance with the Company’s payroll policies and procedures then in
effect.  The Base Salary is inclusive of
the “holiday pay” provided for under Dutch law. Compensation for
overtime work is included as part
of the Employee’s Base Salary and will not be separately compensated.  The Base Salary may be increased in the
future in the Company’s absolute discretion. Any such increased Base Salary
shall then become the Base Salary for all purposes hereunder. Payment of the
Base Salary shall he made in US$. 
Translations to Euro for all purposes hereunder (including, without
limitation, for payroll, withholding and related purposes) shall be made using
the average US$-Euro exchange rate for the three calendar months prior to the
effective date of the 2003 Agreement.

 

4.             ANNUAL BONUS

 

(a)  
As compensation for the agreements made by the Employee herein and the
performance by the Employee hereunder (including, without limitation, the
performance of annual bonus objectives established by the Company), the
Employee may be entitled to an annual cash bonus pursuant to the terms and
under the conditions set forth in the New Skies Annual Bonus Plan, as such
bonus plan may be amended from time to time. With respect to each such year
following the Effective Date, the target cash bonus shall be 50% of the
Employee’s Base Salary for that year, subject to the attainment of certain
targets established by the Company in good faith for that year (the “Annual
Bonus”). It is agreed that the target 50% bonus level is a target and not a
minimum bonus amount. Except as otherwise provided in Section 6, no bonus
shall be payable for any year in which the Employee’s employment is terminated
prior to December 31.

 

5.             TAX-FREE ALLOWANCE SUBJECT TO 30% RULING

 

If and insofar
as the Employee has received or may receive a tax-free allowance for
extra-territorial costs under Section 9 of the 1965 Payroll Tax
Implementation Decree (as further described in clause (b) below), the
following shall apply:

 

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(a)  
The originally agreed upon Wages from Current Employment shall be reduced for
employment law purposes so that 100/70 of the adjusted Wages from Current
Employment is equal to the originally agreed upon Wages from Current
Employment. As used herein, “Wages from Current Employment” are all
income (in cash, cash equivalent, or benefit in kind) that is subject to wage
tax withholding in the Netherlands.

 

(b)  
The Employee shall receive an allowance for extra-territorial costs from the
Company, equal to 30/70 of the adjusted Wages from Current Employment (the “Allowance”).

 

(c)  
The Employee is aware of the fact that, in view of the applicable regulations,
an adjustment to the remuneration agreed under this Section may affect all
considerations and benefits that are linked to Wages from Current Employment
such as pension rights and social security benefits.

 

(d)  
The intention of this Section is to automatically apply Section 9 of
the 1965 Payroll Tax Implementation Decree to all elements of Wages from
Current Employment that can benefit from this special provision.

 

(e)  
The Employee acknowledges and agrees that, as a result of the adjustments
described in clauses (a) and (b), the Employee’s adjusted Base Salary (the
“Adjusted Base Salary”) shall equal 70/100 of the previously agreed Base
Salary.  The Employee hereby consents to
this adjustment and agrees that it shall not constitute a breach of this
Amended Agreement or give rise to any rights on the part of the Employee.  Following any adjustment hereunder, all
references in this Amended Agreement to Base Salary shall be deemed to refer to
the Employee’s Total Base Compensation, which shall equal the sum of the
Adjusted Base Salary and an allowance equal to 30/70 of the Adjusted Base
Salary.  For the avoidance of doubt, the
term “originally agreed upon Wages from Current Employment” shall refer
to the Wages from Current Employment in effect immediately prior to the
adjustments described in clauses (a) and (b).

 

6.             DURATION OF THE AMENDED AGREEMENT AND
TERMINATION

 

(a)  
This Amended Agreement shall be in force for an indefinite period of time. The
Company and Employee each may terminate this Amended Agreement by providing at
least one month’s prior written notice in a “Notice of Termination” to the
other party hereto in accordance with Section 17 (or such longer notice as
may be required by law).  The Company
shall be entitled to provide pay in lieu of notice where permitted by
applicable law.  No notice shall be required
in the event of a termination for urgent cause (“dringende reden”). 
For purposes of this Amended Agreement, a “Notice of Termination”
shall mean a notice which shall indicate the specific termination provision in
this Amended Agreement relied upon, shall set forth in reasonable detail the
facts and circumstances claimed to provide a basis for termination of the
Employee’s employment under the provision so indicated and shall attach any
prior notices required under this Section 6.

 

(b)  
In the event of a termination of the Employee’s employment (1) by the
Company without Cause or (2) by the Employee for Good Reason (as such
terms are defined 

 

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below), the Company shall pay to (or in the case of business expenses
pursuant to clause (i), reimburse) the Employee, or his estate in the event of
his death, within thirty (30) days following the Date of Termination, (i) the
Employee’s Base Salary through the Date of Termination (as defined below) and
outstanding business expenses (to the extent not theretofore paid) and any
other amounts due to the Employee but which have not been paid, (ii) any
earned but unpaid Annual Bonus in respect of a calendar year ending prior to or
coincident with the Date of Termination, (iii) an Annual Bonus equal to
the prior year’s Annual Bonus pro-rated for the year in which the Date of
Termination occurs based on the number of days occurring in such year prior to
the Date of Termination, (iv) a lump-sum payment equal to two times the
sum of (x) the Employee’s Base Salary (as in effect on the Date of Termination)
and (y) the greater of the Annual Bonuses for each of the two most
recently completed calendar years preceding the calendar year in which the Date
of Termination occurs, (v) reimbursement for outplacement services
in an amount up to $25,000 upon the Employee’s submission of receipts for such
services, and (vi) continuation of medical and dental benefits under the
Company’s employee benefit plans providing for such benefits, for two years
following the Date of Termination; provided the Company’s obligation to provide
continued welfare benefits under this clause (vi) shall be reduced to the
extent that equivalent coverages and benefits (determined on a
coverage-by-coverage and benefit-by-benefit basis) are provided under the
plans, programs or arrangements of a subsequent employer: and provided further
that in the event that the Employee is precluded from continuing full
participation in the Company’s welfare benefit plans that provide for the
benefits described and contemplated in this clause (vi), the Employee shall be
provided with the after-tax economic equivalent of any benefit or coverage
foregone.  For this purpose, the economic
equivalent of any benefit or coverage foregone shall be deemed to be the total
cost to the Employee of obtaining such benefit or coverage himself on an
individual basis. Payment of such after-tax economic equivalent shall be made
quarterly. For purposes of this Amended Agreement, “Date of Termination”
shall mean one month after the date on which a Notice of Termination is given
or any later date (agreed upon by the parties, after the giving of such
notice).

 

For purposes
of this Amended Agreement, the term “Cause” shall mean: (i) a
willful and material violation by the Employee of any of Sections 1(d), 9 or 11
of this Amended Agreement (unless such violation is cured by the Employee
within thirty (30) days of receipt of a written notice from the Company which
specifically identifies the facts and circumstances of such violation); (ii) the
willful failure by the Employee to substantially perform the duties reasonably
assigned to him within the scope of the Employee’s duties and authority as
stated in Section 1(a) hereunder (other than as a result of physical
or mental illness or injury), after the Company delivers to the Employee a
written demand for substantial performance that specifically identifies the
manner in which the Employee has not substantially performed the Employee’s
duties and provides the Employee thirty (30) days to begin to substantially
perform, provided that the Company shall not have the right to terminate
the Employee’s employment hereunder for Cause if the Employee begins to
substantially perform within such thirty-day period; (iii) the Employee’s
willful misconduct, willful waste of corporate assets or gross negligence which
in any such event substantially and materially injures the Company or its
Affiliates; or (iv) the indictment of the Employee for a felony involving
moral turpitude. In order for a termination to be considered to be for Cause,
the Notice of Termination must be delivered within six (6) months of the
date on which the Company first knows of the event constituting Cause.

 

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For purposes
of this Amended Agreement, the term “Good Reason” shall mean: (i) a
reduction by the Company in the Employee’s Base Salary; (ii) any failure
by the Company to pay any amounts due to the Employee within ninety (90) days
of the date such amount is due; (iii) any material diminution of the level
of responsibility or authority of the Employee, including the Employee’s
reporting duties (provided, however, that any change in Employee’s reporting
duties consistent with the Company’s rights under Section 1(a) shall
not be deemed to be “Good Reason”); (iv) any adverse change in
Employee’s title or position; (v) the
failure by the Company
to obtain from any successor an assumption of the obligations of the Company as
contemplated by Section 14(c) herein; (vi) the Company requiring
the Employee to be based at any office or location that is more than 50
kilometers from the Company’s current corporate headquarters; provided that
with respect to any such relocation the Employee delivers a written notice of
such Good Reason termination to the Company within thirty (30) days after
receiving written notice from the Company of the possibility of such event; and
provided further that the Employee delivers a written notice to the Company
within six (6) months of the date on which the Employee first knows of the
event constituting Good Reason which specifically identifies the facts and
circumstances claimed by Employee to constitute Good Reason and the Company has
failed to cure such facts and circumstances within thirty (30) days after
receipt of such notice.

 

The payments
provided in this Section 6(b) are
(i) not subject to offset or mitigation and (ii) conditioned
upon and subject to the Employee executing a valid general release and waiver,
waiving all claims the Employee may have against the Company, its Affiliates,
directors, officers and employees.  The
Company shall have no additional obligations under this Amended Agreement
except for any benefits (other than benefits in the nature of severance pay) to
which the Employee is entitled
under the terms of any employee benefit plan in which he is eligible to
participate.

 

7.             ANNUAL LEAVE; OTHER BENEFITS

 

(a)  
Annual Leave.  The Employee shall
be entitled to twenty-five (25) days annual leave per year, which shall be
pro-rated during any partial year of employment.  The Employee’s leave entitlement, the ability
to carry forward vacation time (if any), and the conditions under which leave
may be taken shall be subject to the Company’s policies and procedures then in
effect.

 

(b)  
Company Car.  The Company shall
make available to Employee during the employment period, under the policies and
procedures then in effect, a car determined by the Company to be suitable to
Employee’s position.  The Employee may
elect to receive a cash payment in lieu of such car, in an amount to be
determined by the Company.

 

(c)  
HQLP.  The Employee shall be
entitled to participate in the New Skies Satellites N.V. Headquarters Location
Premium plan, as such plan may be amended by the Company from time to time.

 

(d)  
Other Benefits.  The Employee
shall be entitled to participate in medical and dental plans and other benefits
and perquisites generally provided to other senior executives of the Company
employed in The Netherlands.  The
Employee shall be entitled to participate in any 

 

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plan providing for benefits in the nature of severance pay only to the
extent set forth in a written agreement validly entered into by the Company.

 

8.             PERSONAL INFORMATION

 

The Employee
will provide the Company with personal data as and when requested by the
Company for administrative, tax and other reasons and will promptly notify the
Company of any change to such data. 
Without limiting the generality of the previous sentence, the Employee
shall provide all data that may be required under the Act Advancement
Proportional Participation Work Aliens (Wet
Bevordering Evenredige Arbeidsdeelname Allochtonen), the Obligation
to Carry Identification Papers Act (Wet  op de Identificatieplicht), and other
applicable laws and regulations.

 

9.             NON -SOLICITATION AND NON-COMPETITION

 

(a)  
During the employment period and for one year following the termination of
Employee’s employment with the Company for any reason, the Employee agrees not
to offer employment to any employee of the Company (or any of the Company’s
Affiliates), not to attempt to induce any such employee to leave the employ of
the Company or any of its Affiliates, and not to solicit any clients or
suppliers of the Company or its Affiliates to do business with any competing
business of the Company or its Affiliates.

 

(b)  
Employee agrees not to engage in any aspect of the Satellite Business (as
defined below) for one year following the termination of Employee’s employment
for any reason, other than a termination by the Company without Cause or by the
Employee for Good Reason.  Employee shall
be deemed to be engaging in the Satellite Business if he, directly or
indirectly and whether or not for compensation, renders personal services of
any kind in any capacity for any Competitor. 
As used herein, a “Competitor” shall mean any corporation, firm,
partnership, proprietorship, or other entity which engages in the Satellite
Business; and the “Satellite Business” shall mean the business of communication
of electronic video, data, internet/internet protocol, voice, or other
information (individually and collectively, “Information”) by
transmission via satellite operating in the Fixed Satellite Service frequencies
for hire (“Satellite Transmission”), or any other business that is the
same or substantially the same as any line or lines of business engaged in by
the Company or its Affiliates at the time of termination of employment or that
the Company or its Affiliates has begun making material preparations to enter prior
to the termination of Employee’s employment. 
Notwithstanding anything to the contrary in the previous sentence, “Satellite
Business” shall not include the business of communication of Information by
transmission via means other than via Satellite Transmission unless the Company
or its Affiliates is engaged in, at the time of termination of employment, or
has begun making material preparations to enter prior to the termination of
Employee’s employment, communication of Information by transmission via such
means of non-Satellite Communication.

 

(c)  
The restrictions of this Section shall be deemed to be separate
restrictions with respect to each geographic area, time period, and activity
covered thereby, and each shall be enforceable by the Company independently.
Employee hereby agrees that if, in any judicial proceeding, a court shall
refuse to enforce any such separate restriction, then such unenforceable 

 

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restriction shall be deemed eliminated from this Amended Agreement for
the purpose of such proceeding only to the extent necessary to permit the
remaining restrictions contained in this Section to be enforced.

 

(d)  
The parties hereby declare that it is impossible to measure in money the
damages which will accrue to the Company by reason of a failure by Employee to
perform any of his obligations under this Section or under Section 11
(Confidentiality; Intellectual Property and Ownership of Work Product).  If the Company or any of its Affiliates
institutes any action or proceeding to enforce the provisions hereof, to the
maximum extent permitted by applicable law, Employee hereby waives the claim or
defence that the Company or its Affiliates has an adequate remedy at law, and
Employee shall not urge in any such action or proceeding the claim or defence
that any such remedy at law exists.  In
the event this subsection is not enforced, in whole or in part, the
Company reserves the right to seek costs and damages for any breach of this
Section. Contrary to which is stipulated in article 7:650, section 3,
Dutch Civil Code, the penalty will be to the advantage of the Company.

 

(e)  
The restrictions in this Section shall be in addition to any restrictions
imposed on the Employee by statute or at common law and shall survive any
termination of this Amended Agreement.

 

10.          DAMAGES

 

Contrary to
the proviso of articles 6: l 70 paragraph 3 and 7:661 paragraph 1 Civil Code of
The Netherlands, if an Employee is insured and is covered by such insurance for
damages caused to the Company in the performance of his duties, the Employee
will pay the Company (or a third party to whom the Company is liable) for such
damages up to the amount of the insurance coverage.  This provision shall apply even if the
damages are not the result of malice aforethought or conscious recklessness of
the Employee.

 

11.          CONFIDENTIALITY; INTELLECTUAL PROPERTY
AND OWNERSHIP OF WORK PRODUCT

 

(a)  
The Employee shall not appropriate for his own use, disclose, divulge, furnish,
or make available to any person, unless in the normal course or business or
with the Company’s prior written consent, any confidential or proprietary
information concerning the Company or its Affiliates, including without
limitation any confidential or proprietary information concerning the
operations, plans or methods of doing business of the Company or its Affiliates
(the “Information”); provided that the term “Information” shall not
include such information which is or becomes generally available to the public
other than as a result of a disclosure by Employee in violation of this Amended
Agreement.  Notwithstanding the
foregoing, the Employee may disclose Information to the extent he is compelled
to do so by law or the rules or regulations of any regulatory body to
which he is subject, provided that the Employee must use commercially
reasonable efforts to provide the Company with a copy of all relevant documents
promptly upon receipt (and prior to making any disclosure) and must assist the
Company, as and when reasonably requested and as permitted by law and/or
applicable judicial or administrative order, in taking such action as the
Company deems appropriate in relation to such subpoena or request.

 

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(b)  
The Employee agrees that all right, title and interest in and to all works of
whatever nature generated in whole or in part in the course of or as a direct
or indirect result of his employment or in the one year period following any
termination of such employment (collectively, “Work Product”), including
all rights of intellectual property according to Netherlands or applicable
foreign law, reside with and will fully accrue to the Company and its
Affiliates. Work Product shall include, without limitation: patents, registered
models, designs, copyrights, inventions, improvements, discoveries, processes,
programs, systems, performances in the field of industrial design,
methodologies, computer programmes and educational systems. It is the Company’s
absolute discretion to apply or not for protection of the rights falling to it,
such as patents, under this Section.  The
Employee shall inform the Company of all achievements obtained by him that may
lead to the creation of Work Product. 
Work Product shall not include any works that the Employee can
demonstrate have been developed entirely by him on his own time and outside of
working hours, without the use of the Company’s or its Affiliates’ facilities,
supplies, equipment, Information, materials or trade secrets and that did not
result, directly or indirectly from work performed by the Employee on behalf of
the Company or its Affiliates.

 

(c)  
Insofar as necessary, the Employee hereby assigns all rights mentioned in subsection (b) to
the Company and its Affiliates, who hereby accept such assignment.  The Employee will, throughout the duration of
this Amended Agreement and after the termination hereof, render such assistance
as may be reasonably requested by the Company, free of charge, to obtain and
perfect these rights, to register these rights in the name of the Company or
its Affiliates, and to exercise these rights against third parties; provided,
however, that the Company shall pay the Employee for assistance in excess of
five hours on an hourly basis, determined on a pro rata basis with reference to
the Employee’s Base Salary.  The Employee
hereby grants the Company an irrevocable power of attorney to perform the
above-mentioned actions in the name of the Employee.  The Employee hereby waives any rights he may
have to assert moral rights with respect to any Work Product and renounces any
possible claims to payments for such Work Product (other than the Base Salary)
to the maximum extent permitted by law.

 

(d)  
The obligations set forth in this Section shall be in addition to any restrictions
or obligations imposed on Employee by statute or at common law and shall
survive any termination of this Amended Agreement.

 

(e)  
Each of the rights and restrictions in this Section shall be enforceable
by the Company independently.

 

(f)  
The Company reserves the right to seek costs and damages for any breach of this
Section. Contrary to which is stipulated in article 7:650, section 3,
Dutch Civil Code, the penalty will be to the advantage of the Company.

 

12.          RETURN OF COMPANY PROPERTY AND CONFIDENTIAL
INFORMATION

 

At the end of
the employment period, or earlier, at the Company’s request, the Employee shall
return to the Company all materials and property belonging to the Company and
its Affiliates (and, in the case of data, documents, and other Information, all
Information relating 

 

8

 

to the Company, its business and business
opportunities, or its officers, directors, employees. shareholders, customers,
and Affiliates), including without limitation and where applicable, company
car, mobile telephone, credit cards, computers and computer peripherals,
computer programs, files, other electronic data and software, all documents, in
whatever form, and all copies (in whatever form) thereof.  All property shall be returned in good repair
and working order, subject only to ordinary and reasonable wear and tear.

 

13.          DATA CARRIERS, MATERIALS, TOOLS AND
RESTITUTION

 

The Employee
will be permitted to make use of certain Company instruments, materials,
information and data processing systems when performing Employee’s duties.  The Employee may not publish, copy, or alter
in any way any such materials,
information, software, systems, or data, other than as instructed by the
Company in writing.

 

14.          AMENDMENT; ASSIGNMENT

 

(a)  
Pursuant to article 613 book 7 of the Dutch Civil Code, the Company
reserves the right to amend this Amended Agreement unilaterally to the maximum
extent permitted by applicable law (including, without limitation, if the
Company’s interests in introducing the amendment concerned are so significant
that, in accordance with the principles of reasonableness and fairness, they
must take precedence over any interests of the Employee that could be harmed by
the amendment).  Where the Employee’s consent
is required by applicable law, the Employee agrees to accept reasonable
proposals made by the Company regarding changes in the employment conditions,
either primary or secondary, should the Company decide that such is necessary
in view of the circumstances. Notwithstanding anything to the contrary in this
Section, the Company may not unilaterally lower the Employee’s Base Salary or
reduce the level of Employee’s annual on-target bonus eligibility below 50% of
Employee’s Base Salary.

 

(b)  
(i)  This Amended Agreement is binding on and is for the benefit of the
parties hereto and their respective successors, heirs, executors,
administrators and other legal representatives. 
Neither this Amended Agreement nor any right or obligation under this
Amended Agreement may be assigned, transferred, pledged or encumbered by the
Company or by the Employee.

 

(ii)       The Company shall require
any successor (whether direct or indirect, by purchase, merger, consolidation
or otherwise) to all or substantially all of the business and/or assets of the
Company expressly to assume and agree to perform this Amended Agreement in the
same manner and to the same extent that the Company would have been required to
perform them if no such succession had taken place.  As
used in this Amended Agreement, all references to “Company” shall mean
both the Company and any such successor that assumes and agrees to perform this
Amended Agreement by operation of law or otherwise.

 

15.          WITHHOLDING

 

The Company
may withhold from any amounts payable to Employee hereunder any taxes or other
amounts that the Company may reasonably determine are required to be withheld
pursuant to any applicable law, regulation, or benefit plan. In addition, upon
the 

 

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termination of Employee’s employment, the
Company may withhold from any final payment to Employee any amounts that are
legally due from Employee to the Company.

 

16.          EXCISE TAX MATTERS

 

(a)           Anything in this
Amended Agreement to the contrary notwithstanding, in the event it shall be
determined that any payment or distribution by the Company to or for the
benefit of the Employee, whether paid or payable or distributed or
distributable pursuant to the terms of this Amended Agreement or otherwise (a “Payment”),
would be subject to the excise tax (the “Excise Tax”) imposed by Section 4999
of the United States Internal Revenue Code (the “Code”), then Employee
shall be entitled to receive an additional payment (a “Gross-Up Payment”)
in an amount equal to the lesser of (i) $1,000,000 and (ii) the
amount necessary such that after payment by Employee of all taxes (including
any interest or penalties imposed with respect to such taxes), including,
without limitation, any income taxes (and any interest and penalties imposed
with respect thereto) and the Excise Tax imposed upon the Gross-Up Payment,
Employee retains an amount of the Gross-Up Payment equal to the Excise Tax
imposed upon the Payments; provided that, in the event it shall be
determined that, if in lieu of receiving the Gross-Up Payment, the Employee
would, if the amounts constituting “parachute payments” for purposes of Section 280G
of the Code which would otherwise be payable to the Employee were reduced (as
so reduced, the “Reduced Amount” ), be entitled to receive and retain,
on a net after-tax basis, an amount that is greater than the amount, on a net
after-tax basis, that the Employee would be entitled to retain upon his receipt
of the Gross-Up Payment, then Employee shall not be entitled to the Gross-Up Payment
but rather shall only be entitled to the Reduced Amount.

 

(b)           All determinations
required to be made under this Section 16, including whether and when a
Gross-Up Payment is required and the amount of such Gross-Up Payment (or
whether there will be a Reduced Amount and the amount of such Reduced Amount)
and the assumptions to be utilized in arriving at such determination, shall be
made by a nationally recognized accounting firm appointed by the Company and
reasonably acceptable to the Employee (the “Accounting Firm”) which
shall provide detailed supporting calculations both to the Company and Employee
within ten business days of the receipt of notice from Employee that there has
been a Payment, or such earlier time as is requested by the Company; provided
that for purposes of determining the amount of any Gross-Up Payment, Employee
shall be deemed to pay federal income tax at the highest marginal rates
applicable to individuals in the calendar year in which any such Gross-Up
Payment is to be made and deemed to pay state and local income taxes at the
highest marginal rates applicable to individuals in the state or locality of
Employee’s residence and/or place of employment in the calendar year in which
any such Gross-Up Payment is to be made, net of the maximum reduction in
federal income taxes that can be obtained from deduction of such state and
local taxes, taking into account limitations applicable to individuals subject
to federal income tax at the highest marginal rates.  All fees and expenses of the Accounting Firm
shall be borne solely by the Company. 
Any Gross-Up Payment, as determined pursuant to this Section 16,
shall be paid by the Company to Employee five days prior to when due (or to the
appropriate taxing authority on Employee’s behalf when due).  If the Accounting Firm determines that no
Excise Tax is payable by Employee or that the Reduced Amount will apply, it
shall so indicate to Employee in writing. 
Subject to the following sentence and Section 16(c) hereof,
any determination by the Accounting Firm shall be binding upon the Company and 

 

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Employee. 
As a result of the uncertainty in the application of Section 4999
of the Code, it is possible that the amount of the Gross-Up Payment determined
by the Accounting Firm to be due to (or on behalf of) Employee was lower than
the amount actually due (“Underpayment”).  In the event that the Company exhausts its
remedies pursuant to Section 16(c) and Employee thereafter is
required to make a payment of any Excise Tax, the Accounting Firm shall
determine the amount of the Underpayment that has occurred and any such
Underpayment shall be promptly paid by the Company to or for the benefit of
Employee.

 

(c)           Employee shall notify
the Company in writing of any claim by the Internal Revenue Service that, if
successful, would require the payment by the Company of any Gross-Up
Payment.  Such notification shall be
given as soon as practicable but no later than ten business days after Employee
is informed in writing of such claim and shall apprise the Company of the
nature of such claim and the date on which such claim is requested to be
paid.  Employee shall not pay such claim
prior to the expiration of the thirty day period following the date on which it
gives such notice to the Company (or such shorter period ending on the date
that any payment of taxes with respect to such claim is due).  If the Company notifies Employee prior to the
expiration of such period that it desires to contest such claim, Employee shall
(i) give the Company any information reasonably requested by the Company
relating to such claim, (ii) take such action in connection with
contesting such claim as the Company shall reasonably request in writing from
time to time, including, without limitation, accepting legal representation
with respect to such claim by an attorney reasonably selected by the Company, (iii) cooperate
with the Company in good faith in order to effectively contest such claim and (iv) permit
the Company to participate in any proceedings relating to such claim; provided,
however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold Employee harmless, on an
after-tax basis, for any Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such representation and
payment of costs and expenses.  Without
limitation on the foregoing provisions of this Section 16(c), the Company
shall control all proceedings taken in connection with such contest and, at its
sole option, may pursue or forego any and all administrative appeals,
proceedings, hearings and conferences with the taxing authority in respect of
such claim and may, at its sole option, either direct Employee to pay the tax
claimed and sue for a refund or contest the claim in any permissible manner,
and Employee agrees to prosecute such contest to a determination before any
administrative tribunal, in a court of initial jurisdiction and in one or more
appellate courts, as the Company shall determine; provided, further,
that if the Company directs Employee to pay such claim and sue for a refund,
the Company shall advance the amount of such payment to Employee, on an
interest-free basis, and shall indemnify and hold Employee harmless, on an
after-tax basis, from any Excise Tax or income tax (including interest or
penalties with respect thereto) imposed with respect to such advance or with
respect to any imputed income with respect to such advance; provided, further,
that if Employee is required to extend the statute of limitations to enable the
Company to contest such claim, Employee may limit this extension solely to such
contested amount.  The Company’s control
of the contest shall be limited to issues with respect to which a Gross-Up
Payment would be payable hereunder and Employee shall be entitled to settle or
contest, as the case may be, any other issue raised by the Internal Revenue
Service or any other taxing authority.

 

(d)           If, after the receipt by
Employee of an amount paid or advanced by the Company pursuant to this Section 16,
Employee becomes entitled to receive any refund with 

 

11

 

respect to a Gross-Up Payment,
Employee shall (subject to the Company’s complying with the requirements of Section 16(c))
promptly pay to the Company the amount of such refund received (together with
any interest paid or credited thereon after taxes applicable thereto).  If, after the receipt by Employee of an
amount advanced by the Company pursuant to Section 16(c), a determination
is made that Employee shall not be entitled to any refund with respect to such
claim and the Company does not notify Employee in writing of its intent to
contest such denial of refund prior to the expiration of thirty days after such
determination, then such advance shall be forgiven and shall not be required to
be repaid and the amount of such advance shall offset, to the extent thereof,
the amount of the Gross-Up Payment required to be paid.

 

17.          NOTICE

 

Any notice or
other communication required or permitted under this Amended Agreement shall be
effective only if it is in writing and delivered personally or sent by
registered or certified mail, postage
prepaid, addressed as follows (or if it is sent through any other method agreed
upon by the parties):

 

If to the
Company:

 

New Skies
Satellites B.V.

Rooseveltplantsoen 4

2517 KR The Hague

The Netherlands

Attention: Human Resources

 

with a copy
to:

 

New Skies Satellites B.V.

Rooseveltplantsoen 4

2517 KR The Hague

The Netherlands

Attention: General Counsel

 

If to the
Employee:

 

Michael
Schwartz

Statenlaan 20

2582 GM The Hague

The Netherlands

 

or to such
other address as any party hereto may designate by notice to the others, and
shall be deemed to have been given upon
receipt.

 

12

 

18.          ENTIRE AGREEMENT; SEVERABILITY;
APPLICABLE LAW; DISSOLUTION PROCESS; COUNTERPARTS; MISCELLANEOUS

 

This Amended
Agreement constitutes the entire agreement between the parties with respect to
Employee’s employment and supersedes any prior understandings or
agreements.  This Amended Agreement shall
be governed by the laws of the Netherlands. 
If any provision of this Amended Agreement is so broad as to be
unenforceable, such provision shall be interpreted to be only so broad as is
enforceable.  At the Company’s request
and subject to the Company’s compliance with applicable law and this Amended
Agreement, the Employee agrees to take all steps necessary or appropriate to
terminate this Amended Agreement as of the end of the minimum applicable notice
period on the terms and conditions set forth in this Amended Agreement, by
dissolution by the District Court, Cantonal Division, location The Hague.  This Amended Agreement may be executed in
several counterparts, each of which shall be deemed an original and all of
which shall constitute one and the same instrument. Notwithstanding any
provision in this Agreement to the contrary, any payment otherwise required to
be made hereunder to the Employee at any date as a result of the termination of
the Employee’s employment hereunder shall be delayed for such period of time as
may be necessary to meet the requirements of Section 409A(a)(2)(B)(i) of
the Code. On the earliest date on which such payments can be made without
violating the requirements of Section 409A(a)(2)(B)(i) of the Code,
there shall be paid to Employee (or if Employee has died, to his estate), in a
single cash lump sum, an amount equal to the aggregate amount of all payments
delayed pursuant to the preceding sentence.

 

IN WITNESS
WHEREOF, the parties have executed this Amended Agreement as of the date first
written above.

 

	
   

  	
  NEW SKIES SATELLITES B.V.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Daniel S. Goldberg

  	
   

  
	
   

  	
  Daniel S. Goldberg

  
	
   

  	
  Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Michael C. Schwartz

  	
   

  
	
   

  	
  Michael C. Schwartz

  

 

13Exhibit 10.5

 

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

 

THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT,
dated this 10th day of October, 2005 (the “Amended Agreement”),
among New Skies Satellites B.V., a Dutch company (Chamber of Commerce
registration #33302535) with seat at The Hague (the “Company”), and Mr. Stephen
J. Stott (the “Employee”).

 

WHEREAS the Company and the Employee have entered
into that certain Employment Agreement dated March 2, 1999, as amended and
restated as of November 1, 2004 (the “2004 Agreement”); and

 

WHEREAS, the Company and the Employee desire to
amend the 2004 Agreement in certain respects effective on and after January 1,
2005 (the “Effective Date”),
and to restate the 2004 Agreement to read in its entirety as follows.

 

NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

 

1.                                       Employment,
Duties, Authority and Agreements.

 

(a)   The Company
hereby agrees to employ the Employee as Chief Technical Officer (“CTO”)
and the Employee hereby accepts such position and agrees to serve in such capacity
during the employment period fixed by Section 3 hereof (the “Employment
Period”).  The Employee shall report
to the Chief Executive Officer (the “CEO”).  The Employee will have such duties,
responsibilities and authority as are customary for a CTO, including, without
limitation, establishing standards for and supervising the performance of the
following areas: satellite communications operations; capacity planning and
inventory management; satellite procurement; and TT&C operations. In
addition to the above responsibilities, the Employee shall be responsible for: (i) participating
in all areas of the frequency coordination process, including representing the
Company before the ITU and the government of the Netherlands and supervising
the coordination of the Company’s satellite fleet with other satellite
operators, (ii) identifying and analyzing potential strategic acquisitions
and joint ventures, commercial opportunities, and product development prospects
or matters affecting the Company’s interests, (iii) recruiting, training
and managing a technical support team which shall be responsible for all
aspects of satellite operations, (iv) assisting in cooperation with the
sales, marketing and business development departments in the strategic
development of new products or services in response to customer requirements,
and (v) any other duties and/or responsibilities as the Company may assign
from time to time.

 

(b)   During the
Employment Period, excluding any periods of vacation and sick leave to which the
Employee is entitled, the Employee shall devote his full working time, energy
and attention to the performance of his duties and responsibilities hereunder
and shall faithfully and diligently endeavor to promote the business and best
interests of the Company and any entity that is a direct or indirect
wholly-owned subsidiary of New Skies Satellites Holdings Ltd. (such
subsidiaries hereinafter referred to as the “Affiliates”).

 

(c)   During the
Employment Period, the Employee may not, without the prior written consent of
the Company, operate, participate in the management, operations or control 

 

 

of,
or act as an employee, officer, consultant, agent or representative of, any
type of business or service (other than as an employee of the Company), provided
that it shall not be a violation of the foregoing for the Employee to (i) act
or serve as a director, trustee or committee member of any civic or charitable
organization, and (ii) manage his personal, financial and legal affairs,
so long as such activities (described in clauses (i) and (ii)) do not
interfere with the performance of his duties and responsibilities to the
Company as provided hereunder. Except as described in this Section 1(c),
Employee shall not provide any services to any other entity during the
Employment Period without the written consent of the Company.

 

2.                                       Compensation.

 

(a)   As
compensation for the agreements made by the Employee herein and the performance
by the Employee of his obligations hereunder, during the Employment Period the
Company shall pay the Employee, not less than once a month pursuant to the
Company’s normal and customary payroll procedures, a base salary at the rate of
US $358,904 per annum (the “Base Salary”) payable in U.S. dollars or in
Dutch Guilders, at the Employee’s election, at an exchange rate to be fixed
annually by mutual agreement between Employee and the Company.  The Base Salary shall be reviewed annually
and be increased further in the absolute discretion of the Company.  Any such increased Base Salary shall then
become the Base Salary for all purposes hereunder.

 

(b)   As
compensation for the agreements made by the Employee herein and the performance
by the Employee of his obligations hereunder, beginning in calendar year 1999
and for the remainder of the Employment Period (the “Bonus Period”), the
Employee shall have an opportunity to earn cash bonuses in accordance with the
following terms.  For each calendar year
during the Bonus Period following the Effective Date, Employee shall be
eligible to earn a cash bonus of up to 50% of his Base Salary for that year,
subject to the performance standards to be approved by the Company and, except
as otherwise provided in Section 5, subject to the Employee’s employment
with the Company on the last day of the calendar year (the “Annual Bonus”).  The Annual Bonus earned by the Employee with
respect to each year shall be paid to the Employee not later than ten (10) business
days following the determination of the amount of such Annual Bonus.

 

(c)   During the
Employment Period, the Employee shall be entitled to the following benefits and
perquisites, to the extent provided by the Company to senior executives of the
Company generally:

 

(i)            medical (including far the Employee’s
spouse and children under the age of 21) and disability coverage equivalent to
base salary subject to customary and reasonable limits, co-payments,
deductibles, employee contributions and exclusions;

 

(ii)           at Employee’s election, either a car
provided by the Company suitable to Employee’s position or the equivalent cost
of such a car to the Company in cash; and

 

2

 

(iii)          any other benefits and perquisites
generally provided to other senior executives of the Company, from time to
time, provided that the Employee shall not be entitled to participate in any
such plan providing for benefits in the nature of severance pay.

 

(d)   During the
Employment Period, the Employee shall be entitled to paid vacation of
twenty-five days per year.  The ability
to carry forward vacation time shall be subject to the Company’s vacation
policy applicable generally to executive officers of the Company as in effect
from time to time. The Employee is not entitled to holiday allowances.

 

(e)   The Company
shall promptly reimburse the Employee for all reasonable business expenses upon
the presentation of statements of such expenses in accordance with the Company’s
policies and procedures now in force or as such policies and procedures may be
modified with respect to all senior executive officers of the Company.

 

3.                                       Employment
Period.

 

The Employment Period commenced on or about March 2,
1999 and shall continue indefinitely, provided that the Employment Period may
be terminated during the Employment Period upon the earliest to occur of the
following events upon written notice in accordance with Section 4 below
(the “Date of Termination”):

 

(a)   Death.  The Employee’s employment hereunder shall
terminate upon his death.

 

(b)   Urgent
Cause.  The Company may terminate the
Employee’s employment hereunder for Urgent Cause, that is without prior
approval of a Dutch Court or government body as is authorized by Dutch labor
law. By way of illustration, and without limitation, for purposes of this
Amended Agreement, the term “Urgent Cause” shall mean: (i) a
willful and material violation by the Employee of either Section 1(c) or
7 of this Amended Agreement (unless such violation is cured by the Employee
within thirty (30) days of receipt of a written notice from the Company which
specifically identifies the facts and circumstances of such violation); (ii) the
willful failure by the Employee to substantially perform the duties reasonably
assigned to him within the scope of the Employee’s duties and authority as
stated in Section 1(a) hereunder (other than as a result of physical
or mental illness or injury), after delivery to the Employee of a written
demand for substantial performance that specifically identifies the manner in
which the Employee has not substantially performed the Employee’s duties and
provides the Employee thirty (30) days to begin to substantially perform,
provided that the Company shall not have the right to terminate the Employee’s
employment hereunder for Urgent Cause if the Employee begins to substantially
perform within such thirty-day period; (iii) the Employee’s willful
misconduct, willful waste of corporate assets or gross negligence which in any
such event substantially and materially injures the Company or its Affiliates;
or (iv) the indictment of the Employee for a felony or other serious crime
involving moral turpitude. In order for a termination to be considered to be
for Urgent Cause, the Notice of Termination (as defined below) must be
delivered within six (6) months of the date on which the Company first
knows of the event constituting Urgent Cause.

 

3

 

(c)   Good
Reason. The Employee may terminate his employment hereunder for Good
Reason. For purposes of this Amended Agreement, the term “Good Reason”
shall mean: (i) a reduction by the Company in the Employee’s Base Salary; (ii) any
failure by the Company to pay any amounts due to the Employee within ninety
(90) days of the date such amount is due; (iii) any material diminution of
the level of responsibility or authority of the Employee, including the
Employee’s reporting duties; (iv) any adverse change in the Employee’s
title or position; (v) the failure by the Company to obtain from any
successor an assumption of the obligations of the Company as contemplated by Section 10(d) herein;
and (vi) the Company requiring the Employee to be based at any office or
location that is more than 50 kilometers from the Company’s current corporate
headquarters; provided that with respect to any such relocation the Employee
delivers a written notice of such Good Reason termination to the Company within
thirty (30) days after receiving written notice from the Company of the
possibility of such event; and provided further that the Employee delivers a
written notice to the Company within six (6) months of the occurrence of
such an event which specifically identifies the facts and circumstances claimed
by Employee to constitute Good Reason and the Company has failed to cure such
facts and circumstances within thirty (30) days after receipt of such notice.

 

(d)   Without
Good Reason.  The Employee may
terminate his employment hereunder without Good Reason.

 

4.                                       Termination
Procedure.

 

(a)   Notice of
Termination.  Termination of the
Employee’s employment by the Company for Urgent Cause or by the Employee during
the Employment Period (other than termination pursuant to Section 3(a))
shall be communicated by written “Notice of Termination” to the other party
hereto in accordance with Section 10(a). For purposes of this Amended
Agreement, a Notice of Termination shall mean a notice which shall
indicate the specific termination provision in this Amended Agreement relied
upon and shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Employee’s employment under
the provision so indicated and shall attach any prior notices required under Section 3.

 

(b)   Date of
Termination.  “Date of Termination”
shall mean (i) if the Employee’s employment is terminated by his death,
the date of his death, (ii) if the Employee’s employment is terminated for
any other reason, one month after the date on which a Notice of Termination is
given or any later date (upon by the parties, after the giving of such notice).

 

5.                                       Termination
Payments.

 

(a)   Without
Urgent Cause or for Good Reason. In the event of a termination of the
Employee’s employment (a) by the Company without Urgent Cause or (b) by
the Employee for Good Reason, the Company shall pay to (or in the case of
business expenses pursuant to clause (i), reimburse) the Employee, or his
estate in the event of his death, within thirty (30) days following the Date of
Termination, (i) the Employee’s Base Salary through the Date of
Termination and outstanding business expenses pursuant to Section 2(e) hereof
(to the extent not theretofore paid), and any other amounts due to the Employee
but which have not been paid (the “Accrued Obligations”), (ii) any
earned but unpaid Annual Bonus in respect of a calendar year 

 

4

 

during
the Bonus Period ending prior to or coincident with the Date of Termination, (iii) an
Annual Bonus equal to the prior year’s Annual Bonus pro-rated for the year in
which the Date of Termination occurs based on the number of days occurring in
such year prior to the Date of Termination, (iv) a lump-sum payment equal
to two times the sum of (x) the Employee’s Base Salary (as in effect on the
Date of Termination) and (y) the greater
of the Annual Bonuses for each of the two most recently completed calendar
years preceding the calendar year in which the Date of Termination occurs, (v) reimbursement for outplacement
services in an amount up to $25,000 upon the Employee’s submission of receipts
for such services, and (vi) continuation of medical and dental benefits
under the Company’s employee benefit plans providing for such benefits, for two
years following the Date of Termination; provided the Company’s obligation to
provide continued welfare benefits under this clause (vi) shall be reduced
to the extent that equivalent coverages and benefits (determined on a
coverage-by-coverage and benefit-by-benefit basis) are provided under the
plans, programs or arrangements of a subsequent employer; and provided further
that in the event that the Employee is precluded from continuing full
participation in the Company’s welfare benefit plans that provide for the
benefits described and contemplated in this clause (vi), the Employee shall be
provided with the after-tax economic equivalent of any benefit or coverage
foregone.  For this purpose, the economic
equivalent of any benefit or coverage foregone shall be deemed to be the total
cost to the Employee of obtaining such benefit or coverage himself on an
individual basis.  Payment of such
after-tax economic equivalent shall be made quarterly.

 

The payments provided in
this Section 5(a) are (i) not subject to offset or mitigation
and (ii) conditioned upon and subject to the Employee executing a valid general release and waiver,
waiving all claims the Employee may have against the Company, its Affiliates,
directors, officers and employees.  The
Company shall have no additional obligations under this Amended Agreement,
except for (i) the indemnification obligations set forth in Section 6
herein and (ii) any benefits (other than benefits in the nature of
severance pay) to which the Employee is entitled under the terms of any
employee benefit plan in which he is eligible to participate.

 

(b)   Urgent
Cause or without Good Reason.  If the
Employee’s employment is terminated during the Employment Period by the Company
for Urgent Cause or by the Employee without Good Reason, the Company shall pay
to the Employee, within thirty (30) days of the Date of Termination, (i) the
Accrued Obligations and (ii) any earned but unpaid Annual Bonus in respect
of a calendar year during the Bonus Period ending prior to the Date of
Termination, but only if the event constituting Urgent Cause occurs after the
end of such calendar year.  The Company
shall have no additional obligations under this Amended Agreement, except for
the indemnification obligations set forth in Section 6 herein.

 

(c)   Death.  If the Employee’s employment is terminated as
a result of his death, the Company shall pay to the Employee’s estate, within
thirty (30) days of the Date of Termination, (i) the Accrued Obligations; (ii) any
earned but unpaid Annual Bonus in respect of a calendar year during the Bonus
Period ending prior to or coincident with the Date of Termination; and (iii) an
Annual Bonus equal to the prior year’s Annual Bonus pro-rated for the year in
which the Date of Termination occurs based on the number of days occurring in
such year prior to the Date of Termination. 
The Company shall have no additional obligations under this Amended
Agreement, except for the indemnification obligations set forth in Section 6
herein.

 

5

 

6.                                       Indemnification.

 

The Company shall indemnify, defend and hold the
Employee harmless from and against any and all liability or obligation arising
from or relating to this Amended Agreement or the performance by the Employee
of his obligations hereunder, in accordance with the indemnification provisions
set forth in Article 14 of the Company’s Articles of Association, as in
effect on the date hereof, provided that this obligation to indemnify and
defend shall not extend to disputes between the Employee and the Company, if
any, which relate to the benefits or other amounts in the nature of
compensation from the Company to which the Employee believes he is entitled.

 

7.                                       Non-Solicitation;
Non-Disclosure; Workproduct; Non-Competition.

 

(a)   During the
Employment Period and for one year following the termination of Employee’s
employment with Company for any reason, the Employee agrees not to offer
employment to any employee of the Company or any of its Affiliates for other
than employment by the Company or attempt to induce any such employee to leave
the employ of the Company or any subsidiaries of the Company and the Employee
further agrees not to solicit any clients or suppliers of the Company to do
business with any competing business of the Company or its Affiliates.

 

(b)   Employee
agrees that he will not appropriate for his own use, disclose, divulge, furnish
or make available to any person, unless in the normal course of business or as
authorized by the Company in writing, any confidential or proprietary
information concerning the Company or its Affiliates, including without
limitation any confidential or proprietary information concerning the operations,
plans or methods of doing business of the Company or its Affiliates (the “Information”);
provided that the term “Information” shall not include such information which
is or becomes generally available to the public other than as a result of a
disclosure by Employee in violation of this Amended Agreement. Notwithstanding
the foregoing, Employee may disclose Information to the extent he is compelled
to do so by lawful service of process, subpoena, court order, or as he is
otherwise compelled to do by law or the rules or regulations of any
regulatory body to which he is subject, including full and complete disclosure
in response thereto, in which event he agrees to provide the Company with a
copy of the documents seeking disclosure of such information promptly upon
receipt of such documents and prior to their disclosure of any such
information, so that the Company may, upon notice to Employee, take such action
as the Company deems appropriate in relation to such subpoena or request.

 

(c)   Employee
agrees that all right, title and interest to all works of whatever nature
generated in the course of his employment resides with the Company. Employee
agrees that he will return to the Company, not later than the Date of
Termination, all property, in whatever form (including computer files and other
electronic data), of the Company or its Affiliates in his possession, including
without limitation, all copies (in whatever form) of all files or other
information pertaining to the Company, its officers, directors, shareholders,
customers or Affiliates, and any business or business opportunity of the
Company and its Affiliates.

 

6

 

(d)   Employee
agrees not to engage in any aspect of the Satellite Business (as hereinafter
defined) during the Employment Period and for one year following the
termination of Employee’s employment with the Company for any reason, other
than a termination by the Company without Urgent Cause or by the Employee for
Good Reason.  Employee shall be deemed to
be engaging in the Satellite Business if Employee directly or indirectly,
whether or not for compensation, renders personal services of any kind in any
capacity for any Competitor.

 

For purposes of this Section 7(d):

 

The “Satellite Business” shall mean the
business of communication of electronic video, data, voice or other information
by transmission by satellite for hire or any other business in which the
Company or its Affiliates is engaged from time to time during the Employment
Period.

 

A “Competitor” is any corporation, firm,
partnership, proprietorship or other entity which engages in the Satellite
Business.

 

(e)   The
restrictions of Section 7(d) hereof shall be deemed to be separate
restrictions with respect to each geographic area, time period and activity
covered thereby.  Employee hereby agrees
that if, in any judicial proceeding, a court shall refuse to enforce any such
separate restriction, then such unenforceable restriction shall be deemed
eliminated from this Amended Agreement for the purpose of such proceeding or
any other judicial proceeding, but only to the extent necessary to permit the
remaining restrictions of Section 7(d) hereof to be enforced.

 

(f)   The parties
hereto hereby declare that it is impossible to measure in money the damages
which will accrue to the Company by reason of a failure by Employee to perform
any of his obligations under this Section 7.  Accordingly, if the Company or any of its
Affiliates institutes any action or proceeding to enforce the provisions
hereof, to the extent permitted by applicable law, Employee hereby waives the
claim or defense that the Company or its Affiliates has an adequate remedy at
law, and Employee shall not urge in any such action or proceeding the claim or
defense that any such remedy at law exists.

 

(g)   The
restrictions in this Section 7 shall be in addition to any restrictions
imposed on Employee by statute or at common law.

 

8.                                       Tax-free
Allowance Subject to 30% Ruling.

 

If and insofar as the Employee has received or may
receive a tax-free allowance for extra-territorial costs under Section 9
of the 1965 Payroll Tax Implementation Decree (as further described in clause (ii) below),
the following shall apply:

 

(i)            The originally agreed upon Wages
from Current Employment shall be reduced for employment law purposes so that
100/70 of the adjusted Wages from Current Employment is equal to the originally
agreed upon Wages from Current Employment. As used herein, “Wages from
Current Employment” are all income (in cash, cash equivalent, or benefit in
kind) that is subject to wage tax withholding in the Netherlands.

 

7

 

(ii)           The Employee shall receive an
allowance for extra-territorial costs from the Company, equal to 30/70 of the
adjusted Wages from Current Employment (the “Allowance”).

 

(iii)          The Employee is aware of the fact
that, in view of the applicable regulations, an adjustment to the remuneration
agreed under this Section may affect all considerations and benefits that
are linked to Wages from Current Employment, such as pension rights and social
security benefits.

 

(iv)          The intention of this Section is
to automatically apply Section 9 of the 1965 Payroll Tax Implementation
Decree to all elements of Wages from Current Employment that can benefit from
this special provision.

 

(v)           The Employee acknowledges and agrees
that, as a result of the adjustments described in clauses (i) and (ii),
the Employee’s adjusted Base Salary (the “Adjusted Base Salary”) shall
equal 70/100 of the previously agreed Base Salary. The Employee hereby consents
to this adjustment and agrees that it shall not constitute a breach of this
Amended Agreement or give rise to any rights on the part of the Employee.
Following any adjustment hereunder, all references in this Amended Agreement to
Base Salary shall be deemed to refer to the Employee’s Total Base Compensation,
which shall equal the sum of the Adjusted Base Salary and an allowance equal to
30/70 of the Adjusted Base Salary. For the avoidance of doubt, the term “originally
agreed upon Wages from Current Employment” shall refer to the Wages from
Current Employment in effect immediately prior to the adjustments described in
clauses (i) and (ii).

 

9.                                       Excise
Tax Matters.

 

(a)           Anything in this Amended Agreement to the contrary
notwithstanding, in the event it shall be determined that any payment or
distribution by the Company to or for the benefit of the Employee, whether paid
or payable or distributed or distributable pursuant to the terms of this
Amended Agreement or otherwise (a “Payment”), would be subject to the
excise tax (the “Excise Tax”) imposed by Section 4999 of the United
States Internal Revenue Code (the “Code”), then Employee shall be
entitled to receive an additional payment (a “Gross-Up Payment”) in an
amount equal to the lesser of (i) $1,000,000 and (ii) the amount
necessary such that after payment by Employee of all taxes (including any
interest or penalties imposed with respect to such taxes), including, without
limitation, any income taxes (and any interest and penalties imposed with
respect thereto) and the Excise Tax imposed upon the Gross-Up Payment, Employee
retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon
the Payments; provided that, in the event it shall be determined that,
if in lieu of receiving the Gross-Up Payment, the Employee would, if the
amounts constituting “parachute payments” for purposes of Section 280G of
the Code which would otherwise be payable to the Employee were reduced (as so
reduced, the “Reduced Amount” ), be entitled to receive and retain, on a
net after-tax basis, an amount that is greater than the amount, on a net
after-tax basis, that the Employee would be entitled to retain upon his receipt
of the Gross-Up Payment, then Employee shall not be entitled to the Gross-Up
Payment but rather shall only be entitled to the Reduced Amount.

 

8

 

(b)           All determinations required to be made under
this Section 9, including whether and when a Gross-Up Payment is required
and the amount of such Gross-Up Payment (or whether there will be a Reduced
Amount and the amount of such Reduced Amount) and the assumptions to be
utilized in arriving at such determination, shall be made by a nationally
recognized accounting firm appointed by the Company and reasonably acceptable
to the Employee (the “Accounting Firm”) which shall provide detailed
supporting calculations both to the Company and Employee within ten business
days of the receipt of notice from Employee that there has been a Payment, or
such earlier time as is requested by the Company; provided that for
purposes of determining the amount of any Gross-Up Payment, Employee shall be
deemed to pay federal income tax at the highest marginal rates applicable to
individuals in the calendar year in which any such Gross-Up Payment is to be
made and deemed to pay state and local income taxes at the highest marginal
rates applicable to individuals in the state or locality of Employee’s
residence and/or place of employment in the calendar year in which any such
Gross-Up Payment is to be made, net of the maximum reduction in federal income
taxes that can be obtained from deduction of such state and local taxes, taking
into account limitations applicable to individuals subject to federal income
tax at the highest marginal rates.  All
fees and expenses of the Accounting Firm shall be borne solely by the
Company.  Any Gross-Up Payment, as
determined pursuant to this Section 9, shall be paid by the Company to
Employee five days prior to when due (or to the appropriate taxing authority on
Employee’s behalf when due).  If the
Accounting Firm determines that no Excise Tax is payable by Employee or that
the Reduced Amount will apply, it shall so indicate to Employee in
writing.  Subject to the following
sentence and Section 9(c) hereof, any determination by the Accounting
Firm shall be binding upon the Company and Employee.  As a result of the uncertainty in the
application of Section 4999 of the Code, it is possible that the amount of
the Gross-Up Payment determined by the Accounting Firm to be due to (or on
behalf of) Employee was lower than the amount actually due (“Underpayment”).  In the event that the Company exhausts its
remedies pursuant to Section 9(c) and Employee thereafter is required
to make a payment of any Excise Tax, the Accounting Firm shall determine the
amount of the Underpayment that has occurred and any such Underpayment shall be
promptly paid by the Company to or for the benefit of Employee.

 

(c)           Employee shall notify the Company in writing of any claim
by the Internal Revenue Service that, if successful, would require the payment
by the Company of any Gross-Up Payment. 
Such notification shall be given as soon as practicable but no later than
ten business days after Employee is informed in writing of such claim and shall
apprise the Company of the nature of such claim and the date on which such
claim is requested to be paid.  Employee
shall not pay such claim prior to the expiration of the thirty day period
following the date on which it gives such notice to the Company (or such
shorter period ending on the date that any payment of taxes with respect to
such claim is due).  If the Company
notifies Employee prior to the expiration of such period that it desires to
contest such claim, Employee shall (i) give the Company any information
reasonably requested by the Company relating to such claim, (ii) take such
action in connection with contesting such claim as the Company shall reasonably
request in writing from time to time, including, without limitation, accepting
legal representation with respect to such claim by an attorney reasonably
selected by the Company, (iii) cooperate with the Company in good faith in
order to effectively contest such claim and (iv) permit the Company to
participate in any proceedings relating to such claim; provided, however,
that the Company shall bear and pay directly all costs and expenses (including
additional interest and penalties) incurred in connection with such contest and
shall indemnify and hold Employee harmless, on an after-tax 

 

9

 

basis, for any Excise Tax or income tax
(including interest and penalties with respect thereto) imposed as a result of
such representation and payment of costs and expenses.  Without limitation on the foregoing
provisions of this Section 9(c), the Company shall control all proceedings
taken in connection with such contest and, at its sole option, may pursue or
forego any and all administrative appeals, proceedings, hearings and
conferences with the taxing authority in respect of such claim and may, at its
sole option, either direct Employee to pay the tax claimed and sue for a refund
or contest the claim in any permissible manner, and Employee agrees to
prosecute such contest to a determination before any administrative tribunal,
in a court of initial jurisdiction and in one or more appellate courts, as the
Company shall determine; provided, further, that if the Company
directs Employee to pay such claim and sue for a refund, the Company shall
advance the amount of such payment to Employee, on an interest-free basis, and
shall indemnify and hold Employee harmless, on an after-tax basis, from any
Excise Tax or income tax (including interest or penalties with respect thereto)
imposed with respect to such advance or with respect to any imputed income with
respect to such advance; provided, further, that if Employee is
required to extend the statute of limitations to enable the Company to contest
such claim, Employee may limit this extension solely to such contested
amount.  The Company’s control of the
contest shall be limited to issues with respect to which a Gross-Up Payment
would be payable hereunder and Employee shall be entitled to settle or contest,
as the case may be, any other issue raised by the Internal Revenue Service or
any other taxing authority.

 

(d)           If, after the receipt by Employee of
an amount paid or advanced by the Company pursuant to this Section 9,
Employee becomes entitled to receive any refund with respect to a Gross-Up
Payment, Employee shall (subject to the Company’s complying with the
requirements of Section 9(c)) promptly pay to the Company the amount of
such refund received (together with any interest paid or credited thereon after
taxes applicable thereto).  If, after the
receipt by Employee of an amount advanced by the Company pursuant to Section 9(c),
a determination is made that Employee shall not be entitled to any refund with
respect to such claim and the Company does not notify Employee in writing of
its intent to contest such denial of refund prior to the expiration of thirty
days after such determination, then such advance shall be forgiven and shall
not be required to be repaid and the amount of such advance shall offset, to
the extent thereof, the amount of the Gross-Up Payment required to be paid.

 

10.                                 Miscellaneous.

 

(a)   Any notice
or other communication required or permitted under this Amended Agreement shall
be effective only if it is in writing and delivered personally or sent by
registered or certified mail, postage prepaid, addressed as follows (or if it
is sent through any other method agreed upon by the parties):

 

If to the Company:

 

New Skies Satellites B.V.

Rooseveltplantsoen 4

2517 KR The Hague

The Netherlands

Attention: Chief Executive Officer

 

10

 

With a copy to.

 

New Skies Satellites B.V.

Rooseveltplantsoen 4

2517 KR The Hague

The Netherlands

Attention: General Counsel

 

If to the Employee:

 

Mr. Stephen J. Stott

DeMildestraat 45

2596 SW The Hague

The Netherlands

 

or to such other address as
any party hereto may designate by notice to the others, and shall be deemed to
have been given upon receipt.

 

(b)   This Amended
Agreement constitutes the entire Amended Agreement among the parties hereto
with respect to the Employee’s employment, and supersedes and is in full
substitution for any and all prior understandings or agreements with respect to
the Employee’s employment.

 

(c)   This Amended
Agreement may be amended only by an instrument in writing signed by the parties
hereto, and any provision hereof may be waived only by an instrument in writing
signed by the party or parties against whom or which enforcement of such waiver
is sought. The failure of any party hereto at any time to require the
performance by any other party hereto of any provision hereof shall in no way
affect the full right to require such performance at any time thereafter. nor
shall the waiver by any party hereto of a breach of any provision hereof be
taken or held to be a waiver of any succeeding breach of such provision or a
waiver of the provision itself or a waiver of any other provision of this
Amended Agreement.

 

(d)   (i) 
This Amended Agreement is binding on and is for the benefit of the parties
hereto and their respective successors, heirs, executors, administrators and
other legal representatives.  Neither
this Amended Agreement nor any right or obligation under this Amended Agreement
may be assigned, transferred, pledged or encumbered by the Company or by the
Employee.

 

(ii)           The Company shall require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company expressly to
assume and agree to perform this Amended Agreement in the same manner and to
the same extent that the Company would have been required to perform it if no
such succession had taken place.  As used
in this Amended Agreement, all references to “Company” shall mean both the
Company and any such successor that assumes and agrees to perform this Amended
Agreement by operation of law or otherwise.

 

11

 

(e)   If any
provision of this Amended Agreement or portion thereof is so broad, in scope or
duration, so as to be unenforceable, such provision or portion thereof shall be
interpreted to be only so broad as is enforceable.

 

(f)   The Company
may withhold from any amounts payable to the Employee hereunder all taxes and
other amounts that the Company may reasonably determine are required to be
withheld pursuant to any applicable law or regulation.

 

(g)   This Amended
Agreement shall be governed by and construed in accordance with the laws of The
Netherlands without reference to its principles of conflicts of law.

 

(h)   Notwithstanding
any provision in this Agreement to the contrary, any payment otherwise required
to be made hereunder to the Employee at any date as a result of the termination
of the Employee’s employment hereunder shall be delayed for such period of time
as may be necessary to meet the requirements of Section 409A(a)(2)(B)(i) of
the Code. On the earliest date on which such payments can be made without
violating the requirements of Section 409A(a)(2)(B)(i) of the Code,
there shall be paid to Employee (or if Employee has died, to his estate), in a
single cash lump sum, an amount equal to the aggregate amount of all payments
delayed pursuant to the preceding sentence.

 

(i)   This Amended
Agreement may be executed in several counterparts, each of which shall be
deemed an original, but all of which shall constitute one and the same
instrument.

 

(j)   The headings
in this Amended Agreement are inserted for convenience of reference only and
shall not be a part of or control or affect the meaning of any provision
hereof.

 

IN WITNESS WHEREOF, the parties have executed this
Amended Agreement, as of the date first written above.

 

	
   

  	
  NEW SKIES SATELLITES B.V.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Daniel S. Goldberg

  
	
   

  	
  Daniel S. Goldberg

  
	
   

  	
  Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Stephen J. Stott

  
	
   

  	
  Stephen J. Stott

  

 

12

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