NOTICE OF ANNUAL MEETING
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT
NO. )
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Form, Schedule or Registration Statement No.:
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April 13,
2007
Dear Shareholder:
You are cordially invited to attend our 2007 Annual Meeting of
Shareholders.
We will hold the Annual Meeting at the Hyatt Regency Reston,
1800 Presidents Street, Reston, Virginia 20190, on Friday,
May 11, 2007, at 10:00 a.m. (Eastern Time). At the
meeting we will discuss and act on the matters described in the
Proxy Statement. At this years meeting, you will have an
opportunity to vote on the election of three directors and
approve the selection of Deloitte & Touche LLP as our
independent registered public accounting firm. Shareholders will
then have an opportunity to comment on or to inquire about the
affairs of the Company that may be of interest to shareholders
generally.
Your vote is important to us. Whether or not you plan to
attend the meeting, please return your proxy card as soon as
possible. You also have the option of voting via the Internet or
by telephone.
Admission tickets are printed on the outside back cover of this
Notice of Annual Meeting and Proxy Statement. To enter the
meeting, you will need an admission ticket or other proof that
you are a shareholder. If you hold your shares through a broker
or nominee, you will need to bring either a copy of the voting
instruction card provided by your broker or nominee, or a copy
of a brokerage statement showing your ownership as of the
March 26, 2007 record date.
We have enclosed the Proxy Statement for our 2007 Annual Meeting
of Shareholders and our 2006 Annual Report on
Form 10-K.
You may also access these materials via the Internet at
www.orbcomm.com. I hope you find them interesting and useful in
understanding your company.
Sincerely yours,
Jerome B. Eisenberg
Chairman and Chief Executive Officer
ORBCOMM
Inc.
2115 Linwood Avenue,
Suite 100
Fort Lee, New Jersey 07024
Notice of 2007 Annual Meeting
of Shareholders
To the Shareholders of ORBCOMM Inc.:
The 2007 Annual Meeting of Shareholders of ORBCOMM Inc. will be
held at the Hyatt Regency Reston, 1800 Presidents Street,
Reston, Virginia 20190, on Friday, May 11, 2007, at
10:00 a.m. (Eastern Time) for the following purposes:
(a) to elect three members of our board of directors with
terms expiring at the Annual Meeting in 2010;
(b) to ratify the appointment by the Audit Committee of our
board of directors of Deloitte & Touche LLP as our
independent registered public accounting firm for fiscal year
2007; and
(c) to transact such other business as may properly come
before the meeting.
Only shareholders of record at the close of business on
March 26, 2007 will be entitled to notice of, and to vote
at, the meeting. A list of such shareholders will be available
for inspection by any shareholder at the offices of the Company
at 2115 Linwood Avenue, Suite 100, Fort Lee, New
Jersey 07024, for at least ten (10) days prior to the 2007
Annual Meeting and also at the meeting.
Shareholders are requested to complete, sign, date and return
the enclosed proxy card as promptly as possible. A return
envelope is enclosed. Submitting your vote with the proxy card,
via the Internet or by telephone will not affect your right to
vote in person should you decide to attend the Annual Meeting.
By order of the Board of Directors,
Christian G. Le Brun
Secretary
April 13, 2007
ORBCOMM
Inc.
2007 Proxy Statement
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ORBCOMM
Inc.
Proxy Statement
2007 ANNUAL MEETING
The 2007 Annual Meeting of Shareholders of ORBCOMM Inc. will be
held on May 11, 2007, for the purposes set forth in the
accompanying Notice of 2007 Annual Meeting of Shareholders. This
proxy statement and the accompanying proxy card, which are first
being sent to shareholders on or about April 13, 2007, are
furnished in connection with the solicitation by the board of
directors of proxies to be used at the meeting and at any
adjournment of the meeting. We will refer to our company in this
proxy statement as we, us, the
Company or ORBCOMM.
GENERAL
INFORMATION ABOUT THE ANNUAL MEETING AND VOTING
What am I
Voting On?
You will be voting on the following:
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the election of three members of our board of directors; and
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the ratification of the appointment of Deloitte &
Touche LLP (D&T) as our independent registered public
accounting firm for our fiscal year ending December 31,
2007.
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Who is
Entitled to Vote at the Annual Meeting?
Only holders of record of the Companys common stock at the
close of business on March 26, 2007, the record date for
the meeting, may vote at the Annual Meeting. Each shareholder is
entitled to one vote for each share of our common stock held on
the record date. On March 26, 2007, we had outstanding
37,067,657 shares of our common stock.
Who may
Attend the Annual Meeting?
All shareholders as of the record date, or individuals holding
their duly appointed proxies, may attend the Annual Meeting.
Please note that if you hold your shares through a broker or
other nominee in street name, you will need to
provide a copy of a brokerage statement reflecting your stock
ownership as of the record date to be admitted to the Annual
Meeting.
How Do I
Vote My Shares?
All shareholders may vote in person at the Annual Meeting. If
your shares are held through a broker or other nominee in
street name, you should contact your broker or other
nominee to obtain a brokers proxy card and bring it,
together with proper identification and your brokerage statement
reflecting your stock ownership as of the record date, with you
to the Annual Meeting, in order to vote your shares.
In addition you may vote:
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for shareholders of record, by completing, signing and returning
in the postage-paid envelope provided the enclosed proxy card,
or via the Internet or by telephone; or
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for shares held in street name, by using the method
directed by your broker or other nominee. You may vote over the
Internet or by telephone if your broker or nominee makes those
methods available, in which case they will provide instructions
with your proxy materials.
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How Will
My Proxy Be Voted?
If you duly complete, sign and return a proxy card or use our
telephone or Internet voting procedures to authorize the named
proxies to vote your shares, your shares will be voted as
specified. If your proxy card is signed
but does not contain specific instructions, your shares will be
voted as recommended by our board of directors
FOR the election of the nominees for
directors set forth herein and FOR
ratification of the appointment of the independent auditors.
In addition, if other matters come before the Annual Meeting,
the persons named as proxies in the proxy card will vote in
accordance with their best judgment with respect to such matters.
Even if you plan on attending the meeting, we urge you to vote
now by giving us your proxy. This will ensure that your vote is
represented at the meeting. If you do attend the meeting, you
can change your vote at that time, if you then desire to do so.
May I
Revoke My Proxy?
For shareholders of record, whether you vote by mail, by
telephone or via the Internet, you may revoke your proxy at any
time before it is voted by:
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delivering a written notice of revocation to the Secretary of
the Company;
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submitting a properly signed proxy card with a later date;
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casting a later vote using the telephone or Internet voting
procedures; or
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voting in person at the Annual Meeting.
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If your shares are held in street name, you must
contact your broker or other nominee to revoke your proxy. Your
proxy is not revoked simply because you attend the Annual
Meeting.
Will My
Vote be Confidential?
It is our policy to keep confidential all proxy cards, ballots
and voting tabulations that identify individual shareholders,
except as may be necessary to meet any applicable legal
requirements and, in the case of any contested proxy
solicitation, as may be necessary to permit proper parties to
verify the propriety of proxies presented by any person and the
results of the voting. The independent inspector of election and
any employees involved in processing proxy cards or ballots and
tabulating the vote are required to comply with this policy of
confidentiality.
How Many
Votes are Needed to Elect Directors and Approve the Selection of
Our Independent Registered Public Accounting Firm?
Election of Directors. Directors are
elected by a plurality of votes cast. This means that the three
nominees for election as directors who receive the greatest
number of votes cast by the holders of our common stock entitled
to vote at the meeting, a quorum being present, will become
directors.
Selection of our Independent Registered Public Accounting
Firm. An affirmative vote of the holders of a
majority of the voting power of our common stock present in
person or represented by proxy and entitled to vote on the
matter, a quorum being present, is necessary to approve the
ratification of the appointment of D&T as our independent
registered public accounting firm.
What is
Constitutes a Quorum for the Meeting?
The presence in person or by proxy of a majority of the shares
of our common stock outstanding on the record date is required
for a quorum. As of March 26, 2007, there were 37,067,657
outstanding shares of our common stock.
How are
Votes Counted?
Under Delaware law and our Restated Certificate of Incorporation
and By-Laws, all votes entitled to be cast by shareholders
present in person or represented by proxy at the meeting and
entitled to vote on the subject matter, whether those
shareholders vote for, against or
abstain from voting, will be counted for purposes of determining
the minimum number of affirmative votes required for approval of
the proposal to approve the selection of D&T as our
independent registered public accounting firm. The shares of a
shareholder who abstains from voting on a matter or whose shares
are not voted by reason of a broker non-vote on a particular
matter will be counted for
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purposes of determining whether a quorum is present at the
meeting so long as the shareholder is present in person or
represented by proxy. An abstention from voting on a matter by a
shareholder present in person or represented by proxy at the
meeting has no effect in the election of directors but has the
same legal effect as a vote against the proposal to
approve the selection of D&T as our independent registered
public accounting firm. A broker non-vote on a matter is not
deemed to be present or represented by proxy for purposes of
determining whether shareholder approval of the matter is
obtained and has no effect in the election of directors or on
the approval of the proposal to ratify the appointment of
D&T as our independent registered public accounting firm.
ELECTION
OF DIRECTORS (PROPOSAL 1)
Our Restated Certificate of Incorporation provides that the
board of directors will consist of three classes of directors
serving staggered three-year terms that are as nearly equal in
number as possible. One class of directors is elected each year
with terms extending to the third succeeding Annual Meeting
after election.
The terms of the three directors in Class I expire at the
2007 Annual Meeting. The board has designated Didier Delepine,
Hans E. W. Hoffmann and Gary H. Ritondaro, upon the
recommendation of the Nominating and Corporate Governance
Committee, as nominees for election as directors at the 2007
Annual Meeting with terms expiring at the 2010 Annual Meeting.
Ronald Gerwigs term as a Class I director will expire
at the 2007 Annual Meeting.
Proxies properly submitted will be voted at the meeting, unless
authority to do so is withheld, for the election of the three
nominees specified in Class I Nominees
for Election as Directors with Terms Expiring in 2010
below. If for any reason any of those nominees is not a
candidate when the election occurs (which is not expected),
proxies and shares properly authorized to be voted will be voted
at the meeting for the election of a substitute nominee or,
instead, the board of directors may reduce the number of
directors.
INFORMATION
AS TO NOMINEES FOR DIRECTORS AND CONTINUING DIRECTORS
For each director nominee and each continuing director, we have
stated the nominees or continuing directors name,
age and principal occupation; the position, if any, with the
Company; the period of service as a director of the Company; and
other directorships held.
Class I
Nominees For Election As Directors With Terms Expiring in
2010
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Didier
Delepine |
Director
Nominee |
Age 59 |
Didier Delepine served as President and Chief Executive Officer
of Equant (now Orange Business Services) (global data networking
and managed communications) from 1998 to 2003. From 1995 to
1998, Mr. Delepine served as President and Chief Executive
Officer of Equants network services division and as
Chairman and President of Equants Integration Services
division, Americas. From 1983 to 1995, Mr. Delepine held a
range of senior management positions at SITA, the global
telecommunications and technology organization supporting the
worlds airlines. Mr. Delepine is a director of Viatel
Ltd. and Mercator Partners and a member of the board of advisors
of Ciena, Inc. Mr. Delepine was a director of Intelsat,
Ltd., a global provider of communications services, from 2003 to
2005 and Eircom Group plc, an Irish communications company, from
2003 to 2006.
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Hans E.
W. Hoffmann |
Director
Since November 2006 |
Age 73 |
Mr. Hoffmann currently serves as President of the Bremen
United States Center (international relations) and Vice
President of Bund der Steuerzahler Niedersachsen und Bremen e.v.
(tax policy), positions he has held since 2001.
Mr. Hoffmann was the President and Chief Executive Officer
of ORBCOMM LLC from 2001 to 2003. Prior to joining ORBCOMM LLC,
Mr. Hoffmann served as the President of STN Atlas
Elektronik GmbH, a 5,200 person Germany-based corporation that
manufacturers products for the aerospace, navy equipment and
military markets, from 1994 to 1997.
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Gary H.
Ritondaro |
Director
Since November 2006 |
Age 60 |
Mr. Ritondaro is the Senior Vice President and Chief
Financial Officer of LodgeNet Entertainment Corporation
(entertainment, marketing and information services for the
lodging and healthcare markets), a position he has held since
2001 and has also served as Senior Vice President, Finance,
Information Systems and Administration of LodgeNet since July
2002. Prior to joining LodgeNet, Mr. Ritondaro served as
Senior Vice President and Chief Financial Officer for Mail-Well,
Inc., an NYSE-listed manufacturer of envelopes, commercial
printing and labels, from 1999 to 2001. From 1996 to 1999,
Mr. Ritondaro was Vice President and Chief Financial
Officer for Ferro Corporation, an NYSE-listed international
manufacturer of specialty plastics, chemicals, colors,
industrial coatings and ceramics.
Class II
Continuing Directors With Terms Expiring in 2008
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Timothy
Kelleher |
Director
Since December 2005 |
Age 44 |
Mr. Kelleher joined Pacific Corporate Group (investment
management firm) as a Managing Director in 2002, focusing on the
firms direct investment activities. Prior to joining
Pacific Corporate Group, Mr. Kelleher was a Partner and
Senior Vice President at Desai Capital Management Incorporated
from 1992 to 2002 and held positions at Entrecanales, Inc., L.F.
Rothschild & Co. Incorporated and Arthur
Young & Co. Mr. Kelleher is currently a director
of Pacific Corporate Group and Backyard Broadcasting.
Class III
Continuing Directors With Terms Expiring in 2009
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Jerome B.
Eisenberg |
Director
Since February 2004 |
Age 67 |
Mr. Eisenberg has been our Chairman of the Board since
January 2006, and our Chief Executive Officer and President
since December 2004. Mr. Eisenberg has been a member of the
board of directors of ORBCOMM LLC and ORBCOMM Holdings LLC since
2001. Between 2001 and December 2004, Mr. Eisenberg held a
number of positions with ORBCOMM Inc. and with ORBCOMM LLC,
including, most recently, Co-Chief Executive Officer of ORBCOMM
Inc. Mr. Eisenberg has worked in the satellite industry
since 1993 when he helped found Satcom International Group plc.
(Satcom). From 1987 to 1992, he was President and
CEO of British American Properties, an investment company funded
by European and American investors that acquired and managed
various real estate and industrial facilities in various parts
of the U.S. Prior thereto, Mr. Eisenberg was a partner
in the law firm of Eisenberg, Honig & Folger; CEO and
President of Helenwood Manufacturing Corporation (presently
known as Tennier Industries), a manufacturer of equipment for
the U.S. Department of Defense with 500 employees; and
Assistant Corporate Counsel for the City of New York.
Mr. Eisenberg is the father of Marc Eisenberg, our Chief
Operating Officer.
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Marco
Fuchs |
Director
Since February 2004 |
Age 44 |
Mr. Fuchs has been a member of the board of directors of
ORBCOMM LLC since 2001 and of ORBCOMM Holdings LLC from 2001 to
February 2004. Mr. Fuchs is currently the Chief Executive
Officer and Chairman of the Managing Board of OHB Technology
A.G. (technology and space), positions he has held since 2000.
From 1995 to 2000, Mr. Fuchs worked at OHB Orbitale
Hochtechnologie Bremen-System A.G., first as a Prokurist
(authorized signatory) and then as Managing Director. Prior to
that, he worked as a lawyer from 1992 to 1994 for Jones, Day,
Reavis & Pogue in New York, and from 1994 to 1995 in
Frankfurt am Main.
The board of directors recommends that you vote
FOR the election as directors of the three
Class I director nominees described above, which is
presented as Proposal 1.
4
BOARD OF
DIRECTORS AND COMMITTEES
Our business is managed under the direction of the board of
directors. Our board of directors has the authority to appoint
committees to perform certain management and administration
functions. We currently have an Audit Committee, a Compensation
Committee and a Nominating and Corporate Governance Committee,
composed of three members each (other than the Nominating and
Corporate Governance Committee which currently has one vacancy).
The board of directors and each of these committees was
reconstituted in connection with our initial public offering
which was completed in November 2006.
The functions of each of our board committees are described
below. The duties and responsibilities of each committee are set
forth in committee charters that are available on our website at
www.orbcomm.com under the heading Investor Relations
and the subheading Corporate Governance. The
charters of the Audit Committee, the Compensation Committee and
the Nominating and Corporate Governance Committee are also
attached as Exhibits A, B and C, respectively, to this
proxy statement. The committee charters are also available in
print to any shareholder upon request. The board of directors
held 13 meetings during fiscal 2006, of which two meetings were
held following the boards reconstitution in connection
with our initial public offering. All directors attended at
least 75% of all meetings of the board and those committees on
which they served. Directors are expected to attend the Annual
Meeting of Shareholders.
The board has reviewed the independence of its members
considering the independence criteria of The Nasdaq Stock
Market, LLC, or Nasdaq, and any other commercial, industrial,
banking, consulting, legal, accounting, charitable and familial
relationships between the directors and the Company. Based on
this review, the board has determined that none of the current
directors, other than Jerome B. Eisenberg (an executive officer
of the Company) and Marco Fuchs (a senior executive of OHB
Technology A.G., the supplier of the Companys quick-launch
satellite buses and integration and launch services), has a
material relationship with the Company and each of Ronald
Gerwig, Hans Hoffman, Timothy Kelleher and Gary Ritondaro meets
the independence requirements of Nasdaq. Robert Bednarek, who
served as a director of the Company from February 2004 to
February 2007 and a member of the Nominating and Corporate
Governance Committee from November 2006 to February 2007, met
the independence requirements of Nasdaq. With respect to Hans
Hoffmann, a former executive of ORBCOMM LLC, a predecessor
company of ours, the board considered certain consulting
payments made by ORBCOMM LLC to Mr. Hoffmann in connection
with its determination that he met the independence requirements
of Nasdaq.
The independent directors will meet in executive session without
the presence of any executive officer or member of management at
least twice a year in conjunction with most regular meetings of
the board. A director designated by the independent directors
will chair the session. The independent directors practice
is expected to be to designate the chairman of one of the board
committees as chair, in part depending upon whether the
principal items to be considered at the session are within the
scope of the applicable committee.
Audit Committee. The Audit Committee, among
other things:
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reviews and oversees the integrity of our financial statements
and internal controls;
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reviews the qualifications of and, selects and recommends to the
board of directors the selection of, our independent public
accountants, subject to the approval of our shareholders, and
reviews and approves their fees;
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reviews and oversees the adequacy of our accounting and
financial reporting processes, including our system of internal
controls and disclosure controls, and recommendations of the
independent accountants with respect to our systems; and
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reviews and oversees our compliance with legal and regulatory
requirements.
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Gary Ritondaro, Ronald Gerwig and Hans Hoffmann currently serve
as members of our Audit Committee. Following the 2007 Annual
Meeting, it is expected that Didier Delepine will be appointed
to the Audit Committee in place of Mr. Gerwig. Each current
and expected future member of our Audit Committee meets the
independence and financial literacy requirements of Nasdaq, the
Securities and Exchange Commission, or the SEC, and applicable
law. All members of our Audit Committee are able to read and
understand fundamental financial statements. The board of
directors has determined that Gary Ritondaro is an audit
committee financial expert as
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defined by the SEC rules. Mr. Ritondaro serves as chair of
our Audit Committee. The Audit Committee, as reconstituted in
connection with our initial public offering, met two times
during the 2006 fiscal year.
Compensation Committee. The Compensation
Committee, among other things:
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reviews and approves corporate goals and objectives relevant to
the compensation of the Chief Executive Officer, evaluates the
performance of the Chief Executive Officer in light of these
goals and objectives and determines and approves the level of
the Chief Executive Officers compensation based on this
evaluation;
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determines the base and incentive compensation of senior
executives, other than the Chief Executive Officer, and
determines the terms of the employment of senior executives,
including the Chief Executive Officer;
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reviews, administers, monitors and recommends to the board of
directors all executive compensation plans and programs,
including incentive compensation and equity-based plans; and
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evaluates and makes recommendations regarding the compensation
of non-employee directors and administration of non-employee
director compensation plans or programs.
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Timothy Kelleher, Ronald Gerwig and Hans Hoffmann serve as
members of our Compensation Committee. Following the 2007 Annual
Meeting, it is expected that an independent director will be
appointed to the Compensation Committee in place of
Mr. Gerwig. Each current and expected future member of our
Compensation Committee meets or will meet the independence
requirement of Nasdaq and applicable law. Timothy Kelleher
serves as chair of our Compensation Committee. The Compensation
Committee, as reconstituted in connection with our initial
public offering, met one time during the 2006 fiscal year.
For description of the role of our executive officers on
determining or recommending the amount or form of executive or
director compensation, see Compensation Discussion and
Analysis Role of Executives and Others in
Establishing Compensation.
Nominating and Corporate Governance
Committee. The Nominating and Corporate
Governance Committee, among other things:
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reviews and recommends to the board of directors the size and
composition of the board, the qualification and independence of
the directors and the recruitment and selection of individuals
to serve as directors;
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reviews and recommends to the board of directors the
organization and operation of the board of directors, including
the nature, size and composition of committees of the board, the
designation of committee chairs, the designation of a Chairman
of the Board or similar position, and the distribution of
information to the board and its committees;
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coordinates an annual self-assessment by the board of its
operations and performance and the operations and performance of
the committees and prepares an assessment of the boards
performance for discussion with the board;
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in coordination with the Compensation Committee, evaluates the
performance of the Chief Executive Officer in light of corporate
goals and objectives; and
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oversees our corporate governance policies, practices and
programs.
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Currently, Timothy Kelleher and Ronald Gerwig serve as members
of our Nominating and Corporate Governance Committee and there
is one vacancy. Following the 2007 Annual Meeting, it is
expected that an independent director will be appointed to the
Nominating and Corporate Governance Committee in place of
Mr. Gerwig. Each current and expected future member of our
Nominating and Corporate Governance Committee meets or will meet
the independence requirement of Nasdaq and applicable law.
Timothy Kelleher serves as chair of our Nominating and Corporate
Governance Committee. The Nominating and Corporate Governance
Committee, as reconstituted in connection with our initial
public offering, did not meet during the 2006 fiscal year.
The Nominating and Corporate Governance Committee, the Chairman
and Chief Executive Officer or other members of the board of
directors may identify a need to add new members to the board or
to fill a vacancy on the board. In that case, the committee will
initiate a search for qualified director candidates, seeking
input from other directors, and senior executives and, to the
extent it deems appropriate, third party search firms to
identify potential candidates. The committee will evaluate
qualified candidates and then make its recommendation to the
board, for its
6
consideration and approval. In making its recommendations to the
board, the committee will consider the selection criteria for
director candidates set forth in our Board Membership Criteria
(a copy of which is available on our website at www.orbcomm.com
under the heading Investor Relations and the
subheading Corporate Governance), including the
following:
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Each director should have high level managerial experience in a
relatively complex organization or be accustomed to dealing with
complex problems.
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Each director should be an individual of the highest character
and integrity, have experience at or demonstrated understanding
of strategy/policy-setting and reputation for working
constructively with others.
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Each director should have sufficient time available to devote to
the affairs of the Company in order to carry out the
responsibilities of a director.
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Each director should be free of any conflict of interest which
would interfere with the proper performance of the
responsibilities of a director.
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The committee from time to time reviews with the board, our
Board Membership Criteria in the context of current board
composition and the Companys circumstances.
The Nominating and Corporate Governance Committee will consider
director candidates recommended by our shareholders for election
to the board of directors. Shareholders wishing to recommend
director candidates can do so by writing to the Secretary of
ORBCOMM Inc. at 2115 Linwood Avenue, Suite 100,
Fort Lee, New Jersey 07024. Shareholders recommending
candidates for consideration by the committee must provide each
candidates name, biographical data and qualifications. Any
such recommendation should be accompanied by a written statement
from the individual of his or her consent to be named as a
candidate and, if nominated and elected, to serve as a director.
The recommending shareholder must also provide evidence of being
a shareholder of record of our common stock at the time. The
committee will evaluate properly submitted shareholder
recommendations under substantially the same criteria and
substantially the same manner as other potential candidates. The
foregoing procedures by which shareholders may recommend
director candidates to the board of directors were implemented
by the Company effective as of November 2, 2006 in
connection with the Companys initial public offering.
Prior to this date, the Company did not have in place formal
procedures by which shareholders could recommend director
candidates; however, certain shareholders did have rights to
nominate representatives to the board pursuant to a shareholders
agreement which terminated in connection with the Companys
initial public offering.
In addition, our amended By-Laws establish a procedure with
regard to shareholder proposals for the 2008 Annual Meeting,
including nominations of persons for election to the board of
directors, as described under Shareholder Proposals for
Annual Meeting in 2008.
Compensation Committee Interlocks and Insider
Participation. None of our executive officers
currently serves or served during 2006 as a director or member
of the compensation committee of another entity with an
executive officer who serves on our board of directors or our
Compensation Committee. For description of the members of our
Compensation Committee, see Board of Directors and
Committees Compensation Committee.
Communications to the Board. Shareholders and
other interested parties may send communications to the board of
directors, an individual director, the non-management directors
as a group, or a specified committee at the following address:
ORBCOMM Inc.
c/o Corporate Secretary
2115 Linwood Avenue, Suite 100
Fort Lee, NJ 07024
Attn: Board of Directors
The Secretary will receive and process all communications before
forwarding them to the addressee. The Secretary will forward all
communications unless the Secretary determines that a
communication is a business solicitation or advertisement, or
requests general information about us.
7
DIRECTOR
COMPENSATION
During 2006, none of our directors received any compensation for
their board or committee service. As of December 31, 2006,
none of our directors held any stock awards or option awards
granted under our 2004 Stock Option Plan or 2006 Long-Term
Incentives Plan (the 2006 LTIP) in connection with
their service as a director or committee member.
For 2007, Didier Delepine, Hans Hoffmann, and Gary Ritondaro
will each receive an annual retainer of $35,000. In addition to
the annual retainer, each of these directors will receive $3,000
annually for each committee on which they serve, $10,000
annually for service as the chair of the Audit Committee or
$5,000 for service as the chair of any other board committee.
Each of these directors receives an attendance fee of $1,000 for
each committee meeting. All directors are reimbursed for
reasonable expenses incurred to attend meeting of the board of
directors. It is expected that we will grant an award of 1,850
time-based RSUs vesting on December 31, 2007 to each of
Messrs. Delepine, Hoffmann and Ritondaro on the date of the
Annual Meeting.
Under the terms of our directors deferred compensation
arrangements, a non-employee director may elect to defer all or
part of the cash payment of director retainer fees until such
time as shall be specified, with interest on deferred amounts
accruing quarterly at 120% of the Federal long-term rate set
each month by the U.S. Treasury Department. Each member of
the Audit Committee also has the alternative each year to
determine whether to defer all or any portion of his or her cash
retainer fees for Audit Committee service by electing to receive
shares or restricted shares of our common stock valued at the
closing price of our common stock on Nasdaq on the date each
retainer payment would otherwise be made in cash.
8
AUDIT
COMMITTEE REPORT
The Audit Committee assists the board of directors in overseeing
and monitoring the integrity of the Companys financial
reporting process, its internal control and disclosure control
systems, the integrity and audits of its financial statements,
the Companys compliance with legal and regulatory
requirements, the qualifications, independence and performance
of its independent registered public accounting firm.
Our roles and responsibilities are set forth in a written
charter adopted by the board, which is attached as
Exhibit A to this proxy statement and also available on the
Companys website at www.orbcomm.com under the heading
Investor Relations and the subheading
Corporate Governance. We review and reassess the
charter annually, and more frequently as necessary to address
any changes in Nasdaq corporate governance and SEC rules
regarding audit committees, and recommend any changes to the
board of directors for approval.
Management is responsible for the Companys financial
statements and the reporting process, including the system of
internal control. Deloitte & Touche LLP (D&T), the
Companys independent registered public accounting firm, is
responsible for expressing an opinion on the conformity of those
financial statements with U.S. generally accepted
accounting principles.
We are responsible for overseeing the Companys overall
financial reporting process. In fulfilling our responsibilities
for the financial statements for fiscal year 2006, we:
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Reviewed and discussed the financial statements for the fiscal
year ended December 31, 2006 with management and D&T;
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Discussed with D&T the matters required to be discussed by
Statement on Auditing Standards No. 61, as amended, and
Rule 2-07
of
Regulation S-X
relating to the conduct of the 2006 audit; and
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Received written disclosures from D&T regarding its
independence as required by Independence Standards Board
Standard No. 1. We also discussed with D&T its independence.
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For information on fees paid to D&T for each of the last two
fiscal years, see Proposal to Ratify the Appointment of
Independent Registered Public Accounting Firm
(Proposal 2).
In fulfilling our responsibilities, we met with D&T, with
and without management present, to discuss the results of their
audit and the overall quality of the Companys financial
reporting. We considered the status of pending litigation,
taxation matters and other areas of oversight relating to the
financial reporting and audit process that we determined
appropriate.
Based on our review of the financial statements and discussions
with, and the reports of, management and D&T, we recommended
to the board of directors that the financial statements be
included in the Companys Annual Report on
Form 10-K
for the fiscal year ended December 31, 2006 for filing with
the SEC.
The Audit Committee has appointed D&T as auditors of the
Company for the fiscal year ending December 31, 2007,
subject to the approval of shareholders.
Audit Committee
Gary Ritondaro, Chairman
Ronald Gerwig
Hans E. W. Hoffmann
9
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table shows the beneficial ownership, reported to
us as of March 31, 2007, of our common stock, including
shares as to which a right to acquire ownership within
60 days exists (for example, through the exercise of stock
options) of each director, each nominee for director, each named
executive officer, of such persons and other executive officers
as a group and of beneficial owners of 5% or more of our common
stock.
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Shares of
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Common Stock
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Percentage of Total
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Name of Beneficial Owner
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Owned(1)
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Common Stock Held
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Greater than 5%
Stockholders
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PCG Satellite Investments LLC(2)
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5,224,152
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14.09
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%
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Ridgewood Satellite LLC(3)
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3,466,396
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9.33
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%
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OHB Technology A.G.(4)
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2,845,556
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7.66
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%
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MH Investors Satellite LLC(5)
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2,481,389
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6.69
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%
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General Electric Capital
Corporation(6)
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2,032,085
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5.48
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%
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Estate and Family of Don Franco(7)
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2,031,950
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5.44
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%
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Northwood Ventures LLC(8)
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1,966,030
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5.28
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%
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Named Executive Officers and
Directors
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Jerome B. Eisenberg(9)
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1,439,026
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3.84
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%
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Robert G. Costantini(10)
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35,250
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*
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Marc Eisenberg(11)
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424,225
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1.13
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%
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Emmett Hume(12)
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200,556
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*
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John J. Stolte, Jr.(13)
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78,055
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*
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Didier Delepine
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Marco Fuchs(4)
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2,845,556
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7.66
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%
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Ronald Gerwig(14)
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2,481,389
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6.69
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%
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Hans E. W. Hoffmann(15)
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66,501
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*
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Timothy Kelleher(16)
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5,224,152
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14.09
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%
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Gary H. Ritondaro
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John P. Brady(17)
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86,446
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*
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All executive officers and
directors as a group (12 persons)
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12,880,953
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34.67
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%
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* |
|
Represents beneficial ownership of less than 1% of the
outstanding shares of common stock. |
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(1) |
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Unless otherwise indicated, the amounts shown as being
beneficially owned by each stockholder or group listed above
represent shares over which that stockholder or group holds sole
investment power. |
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(2) |
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The managing member of PCG Satellite Investments LLC is
CalPERS/PCG Corporate Partners, LLC, whose manager is PCG
Corporate Partners Investments LLC. PCG Corporate Partners
Investments LLC is wholly owned by Pacific Corporate Group
Holdings, LLC. Pacific Corporate Group Holdings, LLC is owned
and managed by Christopher J. Bower, Timothy Kelleher, Douglas
Meltzer and Pacific Corporate Group Holdings, Inc., which is in
turn wholly owned and managed by Christopher J. Bower. Each of
CalPERS/PCG Corporate Partners, LLC, PCG Corporate Partners
Investments LLC, Pacific Corporate Group LLC, Pacific Corporate
Group Holdings, LLC, Christopher J. Bower, Timothy Kelleher,
Douglas Meltzer and Pacific Corporate Group Holdings, Inc.
disclaims beneficial ownership of any securities, except to the
extent of their pecuniary interest therein. PCG Satellite
Investments LLCs address is 1200 Prospect Street,
Suite 2000, La Jolla, California 92037. |
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(3) |
|
Includes 88,028 shares of common stock issuable to
Ridgewood Satellite LLC upon exercise of warrants that are
currently exercisable. The manager of Ridgewood Satellite LLC is
Ridgewood Venture Management Corporation. The owner of Ridgewood
Venture Corporation is Robert E. Swanson. Ridgewood Satellite
LLCs address is 947 Linwood Avenue, Ridgewood, New Jersey
07450. |
10
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(4) |
|
Includes 788,067 shares of common stock held by OHB
Technology A.G., and 76,557 shares of common stock held by
ORBCOMM Deutschland A.G. Also includes 86,542 shares of
common stock issuable to OHB Technology A.G. upon exercise of
warrants that are currently exercisable. Marco Fuchs, one of our
directors, is Chief Executive Officer of OHB Technology A.G.
which owns ORBCOMM Deutschland A.G. Manfred Fuchs, Marco Fuchs
and Christa Fuchs hold voting and investment power with regard
to the shares held by OHB Technology A.G. and ORBCOMM
Deutschland A.G. Each of Manfred Fuchs, Marco Fuchs and Christa
Fuchs disclaims beneficial ownership of the shares held by OHB
Technology A.G. and ORBCOMM Deutschland except to the extent of
their respective pecuniary interest therein. OHB Technology
A.G.s address is Universitaetsalle
27-29,
Bremen, D-28539, Germany. |
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(5) |
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The sole manager of MH Investors Satellite LLC is MH Equity
Managing Member LLC, and the sole member and manager of MH
Equity Managing Member LLC is Ms. Tomisue Hilbert.
Ms. Hilbert disclaims beneficial ownership of the shares
held by MH Investors Satellite LLC except to the extent of her
pecuniary interest therein. MH Investors Satellite LLCs
address is 11405 N. Pennsylvania Street,
Suite 205, Carmel, Indiana 46032. |
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(6) |
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Includes 2,000,001 shares owned by GE Pacific-1 Holdings,
Inc., GE Pacific-2 Holdings, Inc. and GE Pacific-3 Holdings
Inc., which are wholly owned subsidiaries of GE International
Holdings Inc., which is a subsidiary of GE CFE Luxembourg
S.A.R.L. (GECFE) and GE Capital Equity Holdings Inc.
(GECH). GECFE is a wholly owned subsidiary of GE
Capital CFE, Inc. (GECFE Inc.). GECH and GECFE Inc.
are wholly owned subsidiaries of General Electric Capital
Corporation (GECC), which is a wholly owned
subsidiary of General Electric Capital Services, Inc., which is
a wholly owned subsidiary of General Electric Company. GECC
holds an additional 32,084 shares through its affiliate
Transport International Pool, Inc. GECCs address is 260
Long Ridge Road, Stamford, Connecticut 06927. |
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(7) |
|
Includes 933,334 shares of common stock held by Franco
Family L.P., 538,401 shares of common stock held by the
Nancy M. Franco GRAT, 5,844 shares of common stock held by
the Estate of Don Franco, 240,754 shares of common stock
held by the Estate of Don Franco, 38,617 shares of common
stock held by the Trust Under the Will of Don Franco
Article Fourth, and 275,000 shares of common stock issuable
upon exercise of outstanding options to Nancy M. Franco. The
general partner of Franco Family L.P. is Franco Mgt. L.L.C.
and the manager of Franco Mgt. L.L.C. is Bradley C. Franco. The
trustee of the Nancy Franco GRAT is Bradley C. Franco. The
trustees of the Trust Under the Will of Don Franco
Article Fourth are Nancy M. Franco, John Franco and
Alan Doerner. Nancy M. Franco is the executor of the Estate
of Don Franco. Mrs. Franco disclaims beneficial ownership
of the shares held by the Estate of Don Franco except to the
extent of her pecuniary interest therein. Bradley C. Franco
disclaims beneficial ownership of the shares held by Franco Mgt.
L.L.C. and the Nancy M. Franco GRAT, except to the extent of his
pecuniary interest therein, and Nancy M. Franco, John Franco and
Alan Doerner disclaim beneficial ownership in the trust in the
name of Nancy M. Franco, John Franco and Alan Doerner except to
the extent of their respective pecuniary interest therein. The
address for Franco Family L.P. and Franco Mgt. L.L.C. is 13
Webster Avenue, Summit, New Jersey 07901 and for the Nancy
M. Franco GRAT is 12 Hickory Hill Road, Saddle River, New
Jersey 07450. |
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(8) |
|
Includes 325,364 shares of common stock held by Northwood
Ventures LLC, 299,103 shares of common stock held by
Northwood Capital Partners LLC, 36,413 shares of common
stock held by SK Partners, and 8,689 shares of common stock
held by the Richard K. Webel Trust. Also includes 92,836,
20,455, 15,735 and 3,934 shares of common stock issuable to
Northwood Ventures LLC, Northwood Capital Partners LLC, SK
Partners and the Richard K. Webel Trust, respectively, upon
exercise of warrants that are currently exercisable. Peter
Schiff, as President of Northwood Ventures LLC and Northwood
Capital Partners LLC, Managing General Partner of SK Partners
and trustee of the Richard K. Webel Trust, has investment power
with regard to these shares and warrants. Mr. Henry T.
Wilson also has investment power with regard to the shares owned
by, and is a Managing Director of, Northwood Ventures LLC and
Northwood Capital Partners LLC. Each of Mr. Schiff and
Mr. Wilson disclaims beneficial ownership of the shares
held by Northwood Ventures LLC, Northwood Capital Partners LLC,
SK Partners and the Richard K. Webel Trust except to the extent
of their respective pecuniary interest therein. Northwood
Ventures LLCs address is 485 Underhill Boulevard,
Suite 205, Syosset, New York 11791. |
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(9) |
|
Includes 990,444 shares of common stock held by Jerome B.
Eisenberg and 20,000 shares of common stock held by Cynthia
Eisenberg, Mr. Eisenbergs wife. Also includes 43,856
and 297,919 shares of common stock issuable to
Mr. Eisenberg upon exercise of warrants and options,
respectively, that are exercisable within |
11
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|
60 days of March 31, 2007, 43,500 shares of
common stock underlying vested outstanding performance-based
SARs and 43,307 shares of common stock underlying
outstanding performance-based RSUs which vest in April 2007.
Mr. Eisenberg disclaims beneficial ownership of the shares
held by Cynthia Eisenberg. |
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(10) |
|
Includes 22,222 shares of common stock underlying SARs that
are currently exercisable and 7,778 shares of common stock
underlying vested outstanding performance-based SARs and
1,361 shares of common stock underlying outstanding
performance-based RSUs which vest in April 2007. |
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(11) |
|
Includes 51,406 shares of common stock held by Marc
Eisenberg. Also includes 7,867 and 297,919 shares of common
stock issuable to Mr. Eisenberg upon the exercise of
warrants and options, respectively, that are exercisable within
60 days of March 31, 2007, 36,009 shares of
common stock underlying outstanding performance-based SARs and
31,024 shares underlying outstanding performance-based RSUs
which vest in April 2007. |
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(12) |
|
Includes 3,766 shares of common stock held by Emmett Hume,
50,610 shares of common stock held by Emmett Hume IRA,
43,427 shares of common stock held by the David Hume Trust
and 44,427 shares of common stock held by the Cara Hume
Trust. Also includes 58,327 shares of common stock issuable
to Mr. Hume upon exercise of options that are exercisable
within 60 days of March 31, 2007. Mr. Hume is the
trustee for the David Hume Trust and the Cara Hume Trust.
Mr. Hume disclaims beneficial ownership of the shares held
by the David Hume Trust and the Cara Hume Trust. |
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(13) |
|
Includes 42,666 shares of common stock issuable to John J.
Stolte, Jr. upon exercise of options that are exercisable
within 60 days of March 31, 2007 and
20,222 shares of common stock issuable upon the vesting of
outstanding time-based RSUs and 15,167 shares of common
stock issuable upon the vesting of outstanding performance-based
RSUs, in each case, expected to vest on May 21, 2007. |
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(14) |
|
Includes 2,481,389 shares of common stock held by MH
Investors Satellite LLC. Mr. Gerwig is the Assistant
Treasurer of MH Investors Satellite LLC and he disclaims
beneficial ownership of the shares held by MH Investors
Satellite LLC except to the extent of his pecuniary interest
therein. |
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(15) |
|
Includes 16,667 shares of common stock issuable to Hans E.
W. Hoffmann upon exercise of options that are currently
exercisable. |
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(16) |
|
Mr. Kelleher is a Managing Director of Pacific Corporate
Group LLC, which is an affiliate of PCG Satellite Investments
LLC and disclaims beneficial ownership of the shares held by PCG
Satellite Investments LLC except to the extent of his pecuniary
interest therein. |
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(17) |
|
Includes 83,334 shares of common stock issuable to John P.
Brady upon exercise of options that are currently exercisable
and 1,555 shares of common stock issuable upon the vesting
of outstanding time- based RSUs and 1,354 shares of common
stock issuable upon the vesting of outstanding performance-based
RSUs, in each case, expected to vest on May 21, 2007. |
12
COMPENSATION
DISCUSSION AND ANALYSIS
The following Compensation Discussion and Analysis describes the
material elements of compensation for our executive officers
identified in the Summary Compensation Table (our Named
Executive Officers).
Compensation
Committee
Our Compensation Committee assists our board of directors in
fulfilling its responsibilities with respect to oversight and
determination of executive compensation and human resources
matters, including the compensation of the Named Executive
Officers. A description of the Compensation Committees
composition, functions, duties and responsibilities is set forth
in this proxy statement under Board of Directors and
Committees Compensation Committee.
The Compensation Committees roles and responsibilities are
set forth in a written charter which is attached as
Exhibit B to this proxy statement.
Philosophy
and Objectives of Compensation Programs
Our executive compensation philosophy is to create a system that
rewards executives for performance and focuses our management
team on our critical short-term and long-term objectives. The
primary objectives of our executive compensation programs are to
attract, motivate and retain talented and dedicated executives,
to link annual and long-term cash and stock incentives to
achievement of specified performance objectives, and to align
executives incentives with stockholder value creation. To
achieve these objectives, the Compensation Committee has
implemented compensation programs that make a substantial
portion of the executives overall compensation contingent
upon achieving key short-term business and long-term strategic
goals established by our board of directors, such as the
expansion of our communications system, the establishment and
maintenance of key strategic relationships, and the growth of
our subscriber base as well as our financial and operational
performance, as measured by metrics such as adjusted EBITDA
(defined as EBITDA less stock-based compensation) and net number
of billable subscriber communicators added to our communications
system (net subscriber communicator additions). The Compensation
Committees goal is to set executive compensation at levels
the committee believes are competitive against compensation
offered by other rapidly growing companies of similar size and
stage of development against whom we compete for executive
talent in the communications industry, while taking into account
our performance and our own strategic goals.
We seek to provide executive compensation that is competitive in
order to attract, motivate and retain key talent, while also
rewarding executives for achieving goals designed to generate
returns for our stockholders, but not for poor performance, by
linking compensation to overall business performance and the
achievement of performance goals. As a result, we believe that
compensation packages provided to our executives, including our
Named Executive Officers, should include both cash and
stock-based compensation that reward performance as measured
against performance goals.
We have not retained a compensation consultant to review our
policies and procedures with respect to executive compensation,
and do not seek to set our executive compensation to any
specific benchmarks or peer group. Instead, we use general
competitive market data available to us relating to compensation
levels, mix of elements and compensation strategies being used
by companies of comparable size and stage of development
operating in the communications industry, and review such data
against the aggregate level of our executive compensation, as
well as the mix of elements used to compensate our executive
officers. In addition, we collected relevant market data with
respect to base salary, incentive bonus and equity award levels
from search firms that we engaged in connection with our search
for a new chief financial officer in 2006.
Elements
of Compensation
Base Salary. Base salaries are determined on
an individual basis, are based on job responsibilities and
individual contribution and are intended to provide our
executives with current income. Base salaries for our Named
Executive Officers are reviewed annually and may be adjusted to
reflect any changes in job responsibilities and individual
contribution, as well as competitive conditions in the market
for executive talent. Our senior management
13
proposes new base salary amounts to the Compensation Committee
for approval based on: an evaluation of individual performance
and expected future contributions; a goal to ensure competitive
compensation against the external market; and comparison of the
base salaries of the executive officers who report directly to
our Chief Executive Officer to ensure internal equity.
For 2006, the base salaries of Messrs. J. Eisenberg,
Costantini, M. Eisenberg, Stolte, Hume and Brady were
established pursuant to employment agreements entered into by
the individual Named Executive Officer and us.
Annual Cash Bonus. The Compensation Committee
has the authority to grant discretionary annual cash bonuses to
employees. Annual cash bonuses are designed to align
employees goals with the Companys financial and
operational objectives for the current year and to reward
individual performance. These objectives vary depending on the
individual employee, but relate generally to strategic factors
such as communications system expansion and operational
improvements, service implementation in new geographic areas and
net subscriber communicator additions, and to financial factors,
such as improving our results of operations, as measured by
adjusted EBITDA. These performance measures are primarily
objective criteria that can be readily measured and do not
require subjective determinations.
Messrs. Hume and Brady were the only Named Executive
Officers eligible to participate in our discretionary annual
cash bonus program, pursuant to which the board of directors or
the Compensation Committee annually designates a specified bonus
pool based on our performance for the fiscal year to be
available for cash bonuses to eligible employees in the
discretion of the Compensation Committee based on
recommendations of management and evaluations of individual
performance.
Pursuant to their employment agreements, each Named Executive
Officer (other than Messrs. Hume and Brady) is generally
eligible to receive annual bonuses, payable in cash or cash
equivalents, based on a percentage of base salary (which may, in
some cases, exceed 100%) and dependent upon achieving or
exceeding certain performance targets for that fiscal year.
Generally, bonuses are not earned unless 90% of the applicable
performance target is met for a given fiscal year and these
amounts increase more rapidly as actual performance exceeds
target levels. Certain 2006 annual bonuses were based on
achieving certain operational milestones by specified dates. For
2006, the annual bonus payable for each Named Executive Officer
was allocated with respect to specified performance targets as
set forth in the following table:
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Net subscriber
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|
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Target adjusted
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|
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communicator
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|
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Other operational
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Name
|
|
EBITDA
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|
|
additions
|
|
|
milestones
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|
|
Jerome Eisenberg
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|
|
50
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%
|
|
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50
|
%
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|
|
N/A
|
|
Robert Costantini
|
|
|
50
|
%
|
|
|
50
|
%
|
|
|
N/A
|
|
Marc Eisenberg
|
|
|
35
|
%
|
|
|
65
|
%
|
|
|
N/A
|
|
John Stolte
|
|
|
17
|
%
|
|
|
17
|
%
|
|
|
66
|
%
|
We believe that our performance targets are established at
levels that are achievable if we meet our business plan. By
providing for significant incentives for exceeding those
targets, we motivate our Named Executive Officers to achieve
strategic business objectives that result in the creation of
value to us and our stockholders over the long-term.
Long-Term Equity-Based Incentives. In addition
to the short-term cash compensation payable to our Named
Executive Officers, our Compensation Committee believes that the
interests of our stockholders are best served when a substantial
portion of our Named Executive Officers compensation is
comprised of equity-based and other long-term incentives that
appreciate in value contingent upon increases in the share price
of our common stock and other indicators that reflect
improvements in business fundamentals. Therefore, it is our
Compensation Committees intention to make grants of
equity-based awards to our Named Executive Officers and other
key employees at such times and in such amounts as may be
required to accomplish the objectives of our compensation
programs. Please see the Grants of Plan-Based Awards Table and
accompanying narrative disclosures set forth in this proxy
statement for more information regarding the grants of
equity-based awards to our Named Executive Officers in fiscal
2006. We have not timed grants of equity-based awards in
coordination with the release of non-public information nor have
we timed the release of non-public information for the purpose
of affecting the value of executive compensation.
14
Under the 2006 LTIP, the Compensation Committee has the ability
to provide a number of equity-based awards, including restricted
stock units (RSUs), stock appreciation rights
(SARs), stock options, stock, restricted stock,
performance units and performance shares to promote our
long-term growth and profitability. Following adoption of the
2006 LTIP, we ceased to grant additional stock options under the
2004 Stock Option Plan. The 2004 Stock Option Plan will continue
to govern all stock option awards granted under the 2004 Stock
Option Plan prior to the adoption of the 2006 LTIP. Since
adopting the 2006 LTIP, we have changed the mix of our
equity-based incentives from stock options to a mix of RSUs and
SARs. This combination of equity-based incentives is intended to
benefit stockholders by enabling us to better attract and retain
top talent in a marketplace where such incentives are prevalent.
We believe that awards of RSUs and SARs provide an effective
vehicle for promoting a long-term share ownership perspective
for our senior management and employees and closely align the
interests of senior management and employees with our
achievement of longer-term financial objectives that enhance
stockholder value, while at the same time limiting the dilutive
effects of such equity-based awards relative to our prior
practice of granting stock options. We have not adopted stock
ownership guidelines, and, other than with respect to Jerome
Eisenberg, our stock compensation plans have provided the
principal method for our executive officers to acquire equity or
equity-based interests in us.
RSUs. A restricted stock unit, or RSU, is a
contractual right to receive at a specified future vesting date
an amount in respect of each RSU based on the fair market value
on such date of one share of our common stock, subject to such
terms and conditions as the Compensation Committee may
establish. RSUs that become payable in accordance with their
terms and conditions will be settled in cash, shares of our
common stock, or a combination of cash and our common stock, as
determined by the Compensation Committee. The Compensation
Committee has determined that all currently outstanding RSUs
will be settled in shares of common stock. The Compensation
Committee may provide for the accumulation of dividend
equivalents in cash, with or without interest, or the
reinvestment of dividend equivalents in our common stock held
subject to the same conditions as the RSU and such terms and
conditions as the Compensation Committee may determine. No
participant who holds RSUs will have any ownership interest in
the shares of common stock to which such RSUs relate until and
unless payment with respect to such RSUs is actually made in
shares of common stock. Vested and unvested RSUs awarded to
certain of our employees, including our Named Executive
Officers, will be subject to forfeiture in the event such
employees breach their non-competition
and/or
non-solicitation covenants set forth in their award agreements
and unvested RSUs are subject to cancellation if, prior to
vesting, such employees ceased to be employed by us for any
reason.
Time-based RSUs typically vest in three equal installments based
on continued employment over a three-year period.
Performance-based RSUs typically vest in three equal
installments over a three-year period based upon the achievement
of specific operational and financial performance targets that
we believe are important to our long-term success, including
adjusted EBITDA targets, net of subscriber communicator
additions on our network, government approvals with respect to
our communications network, and strategic factors such as
communications system expansion and operational improvements.
The Compensation Committee, on the recommendation of management,
linked target performance levels to these measures, as we
believe that each of them is an important factor in our revenue
growth and for sustaining our business model. The
performance-based RSU awards are generally structured to have a
three-year vesting period beginning in 2006, and to be subject
to a percentage reduction in the event that the performance
targets are not attained. These performance-based RSUs vest upon
achieving certain operational and financial performance targets
by specified dates. We believe that the vesting periods in
connection with these time-based and performance-based awards
are appropriate for the following reasons:
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|
|
|
|
they are intended to help retain employees, including
executives, by rewarding them for extended, continuous service
with us;
|
|
|
|
they are time periods that incentivize and focus executives on
the long-term performance of our business over reasonable
timeframes, while minimizing the potential that longer vesting
periods might dilute the motivation of the executives; and
|
|
|
|
they allow the Compensation Committee to formulate performance
targets annually that are aligned with our dynamic business
plans and external industry factors.
|
15
In 2006, Messrs. J. Eisenberg, Costantini, M. Eisenberg,
Hume, Stolte and Brady were granted time-based RSUs and
performance-based RSUs under the 2006 LTIP in the amounts set
forth in the Grants of Plan-Based Awards Table. In general, RSUs
granted to each of our Named Executive Officers were divided
evenly: 50% as time-based RSUs and 50% as performance-based
RSUs. We believe that this allocation strikes the proper balance
between the retention and incentive objectives of these
long-term equity awards. Each of the performance targets with
respect to awards of RSUs to J. Eisenberg, Costantini, M.
Eisenberg and Stolte were the same as those for their annual
cash bonuses. Mr. Humes performance target with
respect to his awards of RSUs was based on achievement of a
certain operational target by a specified date.
Mr. Bradys performance targets with respect to his
awards of RSUs were based 50% on achievement of a target
adjusted EBITDA for fiscal 2006 and 50% on achievement of a
target net additions of billable subscriber communicators during
2006.
SARs. A stock appreciation right, or SAR, is
the right to receive a payment measured by the increase in the
fair market value of a specified number of shares of our common
stock from the date of grant of the SAR to the date on which the
participant exercises the SAR. Under the 2006 LTIP, SARs may be
(1) freestanding SARs or (2) tandem SARs granted in
conjunction with an option, either at the time of grant of the
option or at a later date, and exercisable at the
participants election instead of all or any part of the
related option. Upon the exercise of a SAR, we will deliver
cash, shares of our common stock valued at fair market value on
the date of exercise or a combination of cash and shares our
common stock, as the Compensation Committee may determine.
Vested and unvested SARs granted to certain of our employees,
including our Named Executive Officers, are subject to
forfeiture in the event such employees breach the
non-competition
and/or
non-solicitation covenants set forth in their award agreements
and unvested SARs are subject to cancellation if, prior to
vesting, such employees ceased to be employed by us for any
reason.
Time-based SARs and performance-based SARs typically vest in the
same manner as time-based RSUs and performance-based RSUs. In
2006, Mr. Costantini was granted time-based SARs and
Messrs. J. Eisenberg, Costantini and M. Eisenberg were
granted performance-based SARs under the 2006 LTIP in the
amounts set forth in the Grants of Plan-Based Awards Table. The
performance targets with respect to awards of performance-based
SARs to Messrs. J. Eisenberg, Costantini and M. Eisenberg
were the same as those for their performance-based RSU awards
and annual cash bonuses.
Stock Options. We may grant stock options
exercisable at such time or times, and subject to such terms and
conditions, as the Compensation Committee may determine
consistent with the terms of the 2006 LTIP. The exercise price
of such stock options will be equal to or higher than the fair
market value of our common stock on the date of grant.
Our 2004 Stock Option Plan authorized us to grant options to
purchase common stock to our employees, directors and
consultants. Stock option grants were made at the commencement
of employment or to meet other special retention or performance
objectives. The Compensation Committee reviewed and approved
stock option awards to executive officers, including Named
Executive Officers, based upon its assessment of individual
performance, a review of each executives existing
long-term incentives, and retention considerations. Periodic
stock option grants were made at the discretion of the
Compensation Committee to eligible employee and, in appropriate
circumstances, the Compensation Committee considered the
recommendations of members of management, such as our Chief
Executive Officer. In 2004, certain Named Executive Officers
were awarded stock options reflected in the Outstanding Equity
Awards at Fiscal Year-End Table set forth in this proxy
statement in connection with a merit-based grant to a large
number of employees intended to encourage an ownership culture
among our employees. Stock options granted by us have an
exercise price equal to the fair market value of our common
stock on the date of grant, typically vest 25% per annum
based upon continued employment over a four-year period, and
generally expire ten years after the date of grant. Incentive
stock options also include certain other terms necessary to
assure compliance with the Internal Revenue Code of 1986, as
amended (the Code).
We may also grant RSUs or SARs to executives under special
circumstances outside of the annual process. Grants under the
2006 LTIP are made from time to time to selected executives in
connection with talent management objectives, giving particular
attention to employees leadership potential and potential
future
16
contributions in achieving critical business goals and
objectives. For example, on February 27, 2007, our
Compensation Committee approved grants of 3,000 and 8,000
time-based RSUs which vest on January 1, 2008 to each of
Messrs. J. Eisenberg and M. Eisenberg, respectively, in
recognition of their contributions towards achievement of the
Companys operating and financial goals in 2006.
We may also grant RSUs and SARs, as deemed appropriate by the
Compensation Committee, in new-hire situations. As part of his
employment agreement, Mr. Costantini was granted RSUs and
SARs as set forth on the Grants of Plan-Based Awards Table and
accompanying narrative disclosures set forth in this proxy
statement.
Personal
Benefits
Our Named Executive Officers participate in a variety of
retirement, health and welfare, and vacation benefits designed
to enable us to attract and retain our workforce in a
competitive marketplace. Health and welfare and vacation
benefits help ensure that we have a productive and focused
workforce through reliable and competitive health and other
benefits.
Perquisites
Our Named Executive Officers are provided a limited number of
perquisites whose primary purpose is to minimize distractions
from the executives attention to the Companys
business. An item is not a perquisite if it is integrally and
directly related to the performance of the executives
duties. An item is a perquisite if it confers a direct or
indirect benefit that has a personal aspect, without regard to
whether it may be provided for some business reason or for our
convenience, unless it is generally available on a
non-discriminatory basis to all employees.
The principal perquisites offered to our Named Executive
Officers are car allowances and life insurance premiums. Please
see the Summary Compensation Table and accompanying narrative
disclosures set forth in this proxy statement for more
information on perquisites and other personal benefits we
provide to our Named Executive Officers.
401(k)
Plan
We maintain a 401(k) retirement plan intended to qualify under
Sections 401(a) and 401(k) of the Code. The plan is a
defined contribution plan that covers all our employees who have
been employed for three months or longer, beginning on the date
of employment. Employees may contribute up to 15% of their
eligible compensation (subject to certain limits) as pretax,
salary deferral contributions. We have the option of matching up
to 15% of 100% of the amount contributed by each employee up to
4% of employees compensation. In addition, the plan
contains a discretionary contribution component pursuant to
which we may make an additional annual contribution.
Contributions made by us vest over a five-year period from the
employees date of employment. We have not made any
contributions since the inception of the plan.
Severance
and Change in Control Benefits
Severance and change in control benefits are designed to
facilitate our ability to attract and retain executives as we
compete for talented employees in a marketplace where such
protections are commonly offered. The severance and change in
control benefits found in the Named Executive Officers
employment agreements are designed to encourage employees to
remain focused on our business in the event of rumored or actual
fundamental corporate changes. These benefits include continued
base salary payments and health insurance coverage (typically
for a one-year period), acceleration of the vesting of
outstanding equity-based awards, such as options, RSUs and SARs
(without regard to the satisfaction of any time-based
requirements or performance criteria), and extension of
post-termination exercise periods for options and SARs
(typically for 30 to 90 days).
Termination Provisions. Our employment
agreements with the Named Executive Officers provide severance
payments and other benefits in an amount we believe is
appropriate, taking into account the time it is expected to take
a separated employee to find another job. The payments and other
benefits are provided because we consider a separation to be a
Company-initiated termination of employment that under different
circumstances would not have
17
occurred and which is beyond the control of a separated
employee. Separation benefits are intended to ease the
consequences to an employee of an unexpected termination of
employment. We benefit by requiring a general release from
separated employees. In addition, we have included
post-termination non-compete and non-solicitation covenants in
certain individual employment agreements.
We consider it likely that it will take more time for
higher-level employees to find new employment, and therefore
senior management generally is paid severance for a longer
period. Additional payments may be permitted in some
circumstances as a result of individual negotiations with
executives, especially where we desire particular
nondisparagement, cooperation with litigation, noncompetition
and nonsolicitation terms. See the descriptions of the
individual employment agreements with the Named Executive
Officers under Certain Relationships and Transactions with
Related Persons Employment Agreements for
additional information.
Change of Control Provisions. Under the 2004
Stock Option Plan and the 2006 LTIP and the award agreements
under those plans, our stock options, RSUs and SARs generally
vest upon a change of control, whether or not time vesting
requirements or performance targets have been achieved. Under
the employment agreements with our Named Executive Officers,
other change of control benefits generally require a change of
control, followed by a termination of or change in an
executives employment. In adopting the so-called
single trigger treatment for equity-based awards, we
were guided by a number principles: being consistent with
current market practice among communications company peers; and
keeping employees relatively whole for a reasonable period but
avoid creating a windfall. Single trigger vesting
ensures that ongoing employees are treated the same as
terminated employees with respect to outstanding equity-based
grants. Single trigger vesting provides employees with the same
opportunities as stockholders, who are free to sell their equity
at the time of the change in control event and thereby realize
the value created at the time of the change of control
transaction. The company that made the original equity grant
will no longer exist after a change of control and employees
should not be required to have the fate of their outstanding
equity tied to the new companys future success. Single
trigger vesting on performance-contingent equity, in particular,
is appropriate given the difficulty of replicating the
underlying performance goals.
Tax and
Accounting Implications
Deductibility
of Executive Compensation
Section 162(m) of the Code limits our tax deductions
relating to the compensation paid to Named Executive Officers,
unless the compensation is performance-based and the material
terms of the applicable performance goals are disclosed to and
approved by our stockholders. All of our equity-based
compensation plans have received stockholder approval and, to
the extent applicable, were prepared with the intention that our
incentive compensation would qualify as performance-based
compensation under Section 162(m). While we intend to
continue to rely on performance-based compensation programs, we
recognize the need for flexibility in making executive
compensation decisions, based on the relevant facts and
circumstances, so that we achieve our best interests and the
best interests of our stockholders. To the extent consistent
with this goal and to help us manage our compensation costs, we
attempt to satisfy the requirements of Section 162(m) with
respect to those elements of our compensation programs that are
performance-based.
Accounting
for Stock-Based Compensation
Beginning January 1, 2006, we adopted Statement of
Financial Accounting Standards (SFAS) No. 123 (Revised
2004), Share-Based Payments
(SFAS 123(R)), and began recording
stock-based compensation expense in our financial statements in
accordance with SFAS 123(R).
Certain
Awards Deferring or Accelerating the Receipt of
Compensation
Section 409A of the Code, enacted as part of the American
Jobs Creation Act of 2004, imposes certain new requirements
applicable to nonqualified deferred compensation
plans. If a nonqualified deferred compensation plan
subject to Section 409A fails to meet, or is not operated
in accordance with, these new requirements, then all
compensation deferred under the plan may become immediately
taxable. The Company intends that awards granted
18
under the 2006 LTIP will comply with the requirements of
Section 409A and intends to administer and interpret the
2006 LTIP in such a manner.
Role of
Executives and Others in Establishing Compensation
Our Chairman and Chief Executive Officer, Jerome Eisenberg,
annually reviews the performance of the Named Executive Officers
(other than his own and that of Marc Eisenberg, which are
reviewed by the Compensation Committee), and meets on a
case-by-case
basis with each of the other Named Executive Officers to reach
agreements with respect to salary adjustments and annual award
amounts, which are then presented to the Compensation Committee
for approval. The Compensation Committee can exercise discretion
in modifying any recommended adjustments or awards to
executives. Messrs. J. Eisenberg and M. Eisenberg each
attended meetings of the Compensation Committee in 2006.
The
day-to-day
design and administration of benefits, including health and
vacation plans and policies applicable to salaried employees in
general are handled by our Finance and Legal Departments. Our
Compensation Committee (or board of directors) remains
responsible for certain fundamental changes outside the
day-to-day
requirements necessary to maintain these plans and policies.
Conclusion
We believe the current design of our executive compensation
programs, utilizing a mix of base salary, annual cash bonus and
long-term equity-based incentives properly motivates our
management team to perform and produce strong returns for us and
our stockholders. Further, although the current compensation
programs have been in place for less than a year, in the view of
the board of directors and the Compensation Committee, the
overall compensation amounts earned by the Named Executive
Officers under our compensation programs for fiscal 2006 reflect
our performance during the period and appropriately reward the
Named Executive Officers for their efforts and achievements
relative to the performance targets, consistent with our
compensation philosophy and objectives.
COMPENSATION
COMMITTEE REPORT
The Compensation Committee of the Company has reviewed and
discussed the Compensation Discussion and Analysis required by
Item 402(b) of
Regulation S-K
with management and based on such review and discussion, the
Compensation Committee recommended to the board of directors
that the Compensation Discussion and Analysis be included in
this proxy statement and the Annual Report on
Form 10-K
for the year ended December 31, 2006.
Compensation Committee
Timothy Kelleher, Chairman
Ronald Gerwig
Hans E. W. Hoffmann
19
COMPENSATION
OF EXECUTIVE OFFICERS
Summary Compensation Table
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|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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|
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|
|
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|
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|
Non-Equity
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|
|
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|
|
|
|
|
|
|
|
|
|
Stock
|
|
|
Option
|
|
|
Incentive Plan
|
|
|
All Other
|
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|
|
|
|
|
|
|
|
Salary
|
|
|
Bonus(1)
|
|
|
Awards(2)
|
|
|
Awards(3)
|
|
|
Compensation(4)
|
|
|
Compensation(5)
|
|
|
Total
|
|
Name and Principal Position
|
|
Year
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
Jerome B. Eisenberg
|
|
|
2006
|
|
|
$
|
335,771
|
|
|
$
|
|
|
|
$
|
786,560
|
|
|
$
|
133,456
|
|
|
$
|
263,233
|
|
|
$
|
20,362
|
|
|
$
|
1,539,382
|
|
Chairman of the Board and Chief
Executive Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert G. Costantini
|
|
|
2006
|
|
|
|
67,500
|
|
|
|
|
|
|
|
64,315
|
|
|
|
178,115
|
|
|
|
59,479
|
|
|
|
2,506
|
|
|
|
371,915
|
|
Executive Vice President and
Chief Financial Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marc Eisenberg
|
|
|
2006
|
|
|
|
294,167
|
|
|
|
|
|
|
|
581,676
|
|
|
|
113,480
|
|
|
|
214,527
|
|
|
|
19,304
|
|
|
|
1,223,154
|
|
Chief Operating
Officer
|
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|
|
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|
|
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Emmett Hume
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2006
|
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220,000
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|
10,000
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|
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13,529
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|
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23,667
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|
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9,628
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|
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276,824
|
|
Executive Vice President,
International
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|
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|
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|
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|
John J.
Stolte, Jr.
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2006
|
|
|
|
212,500
|
|
|
|
|
|
|
|
344,196
|
|
|
|
6,983
|
|
|
|
107,782
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|
|
|
639
|
|
|
|
672,100
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|
Executive Vice
President Technology and Operations
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John P. Brady
|
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|
2006
|
|
|
|
225,000
|
|
|
|
|
|
|
|
24,576
|
|
|
|
59,166
|
|
|
|
|
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|
|
121,832
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|
|
|
430,574
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|
Former Executive Vice President,
Finance
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(1) |
|
The amounts set forth in the Bonus column represent
discretionary annual cash bonus payments. Messrs. Hume and
Brady were the only Named Executive Officer eligible to
participate in the annual discretionary cash bonus pool with
respect to fiscal 2006. |
|
(2) |
|
The amounts set forth in the Stock Awards column
represent the compensation costs for financial statement
purposes recognized in 2006 relating to time-based and
performance-based RSU awards that were granted in 2006 in
accordance with Statement of Financial Accounting Standards No.
123 (Revised 2004), Share-Based Payment,
(SFAS 123(R)). For a discussion of the
assumptions used to calculate the value of the amounts in the
Stock Awards column see Note 4 in our
consolidated financial statements included in our Annual Report
on
Form 10-K
for the year ended December 31, 2006. See the Grants of
Plan-Based Awards Table and Compensation Discussion and
Analysis Elements of Compensation
Long-Term Equity-Based Incentives for a further discussion
regarding RSU awards in 2006 and the Outstanding Equity Awards
at Fiscal Year-End Table for a further discussion regarding
outstanding RSU awards. |
|
(3) |
|
The amounts set forth in the Options Awards column
represent the compensation costs for financial statement
purposes recognized in 2006 in accordance with SFAS 123(R)
relating to option awards granted in 2004 and time- and
performance-based SAR awards granted in 2006. The assumptions
used to calculate the value of the amounts in the Options
Awards column are described in Note 4 in our
consolidated financial statements included in our Annual Report
on
Form 10-K
for the year ended December 31, 2006. See the Grants of
Plan-Based Awards Table and Compensation Discussion and
Analysis Elements of Compensation
Long-Term Equity-Based Incentives for a further discussion
regarding SAR awards in 2006 and the Outstanding Equity Awards
at Fiscal Year-End Table for a further discussion regarding
outstanding SAR awards. |
|
(4) |
|
The amounts set forth in the Non-Equity Incentive Plan
Compensation column represent the annual incentive bonus
paid to Messrs. J. Eisenberg, Costantini, M. Eisenberg and
Stolte under the terms of their respective employment
agreements. See the Grants of Plan-Based Awards Table for a
further discussion regarding the annual incentive payments. |
20
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(5) |
|
The amounts set forth in the All Other Compensation
column are comprised of the following for each Named Executive
Officer: |
J.
Eisenberg:
Perquisites and Personal Benefits: $13,200 for automobile
allowance and $7,162 for payment of life insurance premiums.
Costantini:
Perquisites and Personal Benefits: $2,400 for automobile
allowance and $106 for payment of life insurance premiums.
M.
Eisenberg:
Perquisites and Personal Benefits: $9,350 for automobile
allowance, $9,060 for reimbursement for legal services and $894
for payment of life insurance premiums.
Stolte:
Perquisites and Personal Benefits: $639 for payment of life
insurance premiums.
Brady:
Perquisites and Personal Benefits: $1,832 for payment of life
insurance premiums.
Post-Termination Payments: $120,000 for a post-employment
payment (including payroll withholding taxes) paid pursuant to
the terms of Mr. Bradys employment agreement with the
Company in connection with his termination of employment with
the Company effective December 31, 2006.
21
Grants of
Plan-Based Awards
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All Other
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All Other
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Stock
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Option
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Awards:
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Awards:
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Grant Date
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Estimated Possible Payouts
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Estimated Future Payouts Under
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Number of
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Number of
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Exercise or
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Fair Value of
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Under Non-Equity Incentive
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Equity Incentive Plan Awards(2)(3)
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Shares of
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Securities
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Base Price
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Stock and
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Plan Awards(1)
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Target/
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Stock or
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Underlying
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of Option
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Option
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Grant
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Threshold
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Target
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Maximum
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Threshold
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Maximum
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Units
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Options
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Awards
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Awards(4)
|
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Name
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Date
|
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Award Type
|
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($)
|
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($)
|
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($)
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(#)
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(#)
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(#)
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(#)
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($/Sh)
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($)
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|
Jerome B. Eisenberg
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10/5/2006
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|
Annual incentive (Adjusted EBITDA)
|
|
$
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31,950
|
|
|
$
|
142,000
|
|
|
$
|
248,500
|
|
|
|
|
|
|
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|
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|
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|
$
|
|
|
|
$
|
|
|
|
|
10/5/2006
|
|
Annual incentive (Net subscriber
additions)
|
|
|
31,950
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|
|
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142,000
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|
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248,500
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|
|
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|
|
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|
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|
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|
|
|
|
|
|
|
10/5/2006
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Time-based RSUs
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149,334
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(6)
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1,642,674
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|
|
|
10/5/2006
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|
Performance-based RSUs (Adjusted
EBITDA)
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|
|
|
|
|
|
|
|
|
|
|
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|
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8,711
|
|
|
|
24,889
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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273,779
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|
|
|
10/5/2006
|
|
Performance-based RSUs (Net
subscriber additions)
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|
|
|
|
|
|
|
|
|
|
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|
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8,711
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|
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24,889
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
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273,779
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|
|
|
10/5/2006
|
|
Performance-based SARs (Adjusted
EBITDA)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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8,750
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25,000
|
|
|
|
|
|
|
|
|
|
|
|
11.00
|
|
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129,500
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|
|
10/5/2006
|
|
Performance-based SARs (Net
subscriber additions)
|
|
|
|
|
|
|
|
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|
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|
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8,750
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|
|
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25,000
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|
|
|
|
|
|
|
|
|
|
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11.00
|
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129,500
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|
Robert G. Costantini
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|
10/5/2006
|
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Annual incentive (Adjusted
EBITDA)(5)
|
|
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6,058
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|
|
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26,924
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|
|
|
33,657
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10/5/2006
|
|
Annual incentive (Net subscriber
additions)(5)
|
|
|
6,058
|
|
|
|
26,924
|
|
|
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33,657
|
|
|
|
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|
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|
|
|
|
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|
|
|
|
|
|
|
|
|
|
10/5/2006
|
|
Time-based RSUs
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11,667
|
(6)
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|
|
|
|
|
|
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128,337
|
|
|
|
10/5/2006
|
|
Performance-based RSUs (Adjusted
EBITDA)
|
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|
|
|
|
|
|
|
|
|
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|
|
680
|
|
|
|
1,944
|
|
|
|
|
|
|
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|
|
|
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21,384
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|
|
|
10/5/2006
|
|
Performance-based RSUs (Net
subscriber additions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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681
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|
|
|
1,945
|
|
|
|
|
|
|
|
|
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|
|
|
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|
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21,395
|
|
|
|
10/5/2006
|
|
Time-based SARs
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|
|
|
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|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
66,667
|
(7)
|
|
|
11.00
|
|
|
|
360,668
|
|
|
|
10/5/2006
|
|
Performance-based SARs (Adjusted
EBITDA)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,889
|
|
|
|
11,111
|
|
|
|
|
|
|
|
|
|
|
|
11.00
|
|
|
|
57,555
|
|
|
|
10/5/2006
|
|
Performance-based SARs (Net
subscriber additions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,889
|
|
|
|
11,111
|
|
|
|
|
|
|
|
|
|
|
|
11.00
|
|
|
|
57,555
|
|
Marc Eisenberg
|
|
10/5/2006
|
|
Annual incentive (Adjusted EBITDA)
|
|
|
19,845
|
|
|
|
88,200
|
|
|
|
154,350
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10/5/2006
|
|
Annual incentive (Net subscriber
additions)
|
|
|
36,855
|
|
|
|
163,800
|
|
|
|
286,650
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10/5/2006
|
|
Time-based RSUs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
112,000
|
(6)
|
|
|
|
|
|
|
|
|
|
|
1,232,000
|
|
|
|
10/5/2006
|
|
Performance-based RSUs (Adjusted
EBITDA)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,574
|
|
|
|
13,067
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
143,737
|
|
|
|
10/5/2006
|
|
Performance-based RSUs (Net
subscriber additions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,494
|
|
|
|
24,266
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
266,926
|
|
|
|
10/5/2006
|
|
Performance-based SARs (Adjusted
EBITDA)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,308
|
|
|
|
15,166
|
|
|
|
|
|
|
|
|
|
|
|
11.00
|
|
|
|
78,560
|
|
|
|
10/5/2006
|
|
Performance-based SARs (Net
subscriber additions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,858
|
|
|
|
28,166
|
|
|
|
|
|
|
|
|
|
|
|
11.00
|
|
|
|
145,900
|
|
Emmett Hume
|
|
10/5/2006
|
|
Performance-based RSUs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,734
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
41,074
|
|
|
|
10/5/2006
|
|
Time-based RSUs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,734
|
(6)
|
|
|
|
|
|
|
|
|
|
|
41,074
|
|
John J. Stolte,
Jr.
|
|
10/5/2006
|
|
Annual incentive (Adjusted EBITDA)
|
|
|
16,875
|
|
|
|
28,125
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10/5/2006
|
|
Annual incentive (Net subscriber
additions)
|
|
|
16,875
|
|
|
|
28,125
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10/5/2006
|
|
Annual incentive (certain
operational target #1
|
|
|
|
|
|
|
56,250
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10/5/2006
|
|
Annual incentive (certain
operational target #2
|
|
|
|
|
|
|
56,250
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10/5/2006
|
|
Time-based RSUs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
60,667
|
(6)
|
|
|
|
|
|
|
|
|
|
|
667,337
|
|
|
|
10/5/2006
|
|
Performance-based RSUs (certain
operational target #1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30,333
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
333,663
|
|
|
|
10/5/2006
|
|
Performance-based RSUs (certain
operational target #2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,167
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
166,837
|
|
|
|
10/5/2006
|
|
Performance-based RSUs (certain
operational target #3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,167
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
166,837
|
|
John P. Brady
|
|
10/5/2006
|
|
Time-based RSUs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,555
|
(6)
|
|
|
|
|
|
|
|
|
|
|
17,105
|
|
(former executive)
|
|
10/5/2006
|
|
Performance-based RSUs (Adjusted
EBITDA)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
272
|
|
|
|
778
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,558
|
|
|
|
10/5/2006
|
|
Performance-based RSUs (Net
subscriber additions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
272
|
|
|
|
778
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,558
|
|
22
|
|
|
(1) |
|
The amounts shown represent annual incentive payments payable to
Messrs. J. Eisenberg, Costantini, M. Eisenberg and Stolte
pursuant to employment agreements with the Company. See
Certain Relationships and Transactions with Related
Persons Employment Agreements for a summary of
the employment agreements. The actual annual incentive payment
amount paid to each of these Named Executive Officers for fiscal
2006 is shown in the Summary Compensation Table under the
Non-Equity Incentive Plan Compensation column. For
2006, the incentive payment is a percentage of the
executives 2006 base salary, determined based on the
achievement of specified financial and operational performance
targets of the Company for fiscal 2006. The amount shown in the
Target column represents the target annual incentive
payment for each eligible Named Executive Officer if the
performance targets are achieved at the 100% level. For 2006,
the percentages of base salary payable as annual incentives if
the performance targets are achieved at the 100% level were as
follows: 80% for Messrs. J. Eisenberg, Costantini and M.
Eisenberg and 75% for Mr. Stolte. The amount shown in the
Maximum column represents the maximum amount payable
for each eligible Named Executive Officer if the performance
targets are achieved above the 100% level. For 2006, the maximum
percentages of base salary payable as annual compensation were
as follows: 140% for Messrs. J. Eisenberg and
M. Eisenberg if the performance targets are achieved at or
above the 133% level; and 100% for Mr. Costantini if the
performance targets are achieved at or above the 125% level. The
amount shown in the Threshold column represents the
amount payable for each eligible Named Executive Officer if the
performance targets are achieved at the 90% level, the minimum
performance required for any annual incentive payment to be
made. For 2006, the threshold percentages of base salary payable
as annual compensation were as follows: 18% for Messrs. J.
Eisenberg, Costantini and M. Eisenberg and 15% for
Mr. Stolte, if certain operational and performance targets
have been achieved. For 2006, neither Mr. Brady, whose
employment with the Company terminated on December 31,
2006, nor Mr. Hume was eligible for any annual incentive
payment pursuant to the terms of their employment agreements,
but were eligible to participate in the Companys
discretionary annual cash bonus program, which is described in
Note 1 to the Summary Compensation Table. Please see
Compensation Discussion and Analysis Elements
of Compensation Annual Cash Bonus for further
a discussion regarding our annual cash incentive payment
programs. |
|
(2) |
|
On October 5, 2006, performance-based RSU awards and
performance-based SAR awards were issued under the 2006 LTIP
relating to the achievement of specified operational and
financial performance targets for fiscal 2006, 2007 and 2008.
Each RSU award represents the right to receive one share of our
common stock for each vested RSU and each SAR award represents
the right to receive, upon exercise of the SAR, the value
(payable in cash, stock or a combination of cash and stock in
our discretion) of the increase in the fair market value of a
specified number of shares of our common stock on the date of
exercise over the fair market value on the date of grant of the
SAR (the base price). The base price of
$11.00 per share of each SAR was equal to the price of our
common stock sold in our initial public offering in November
2006. See the Outstanding Equity Awards at Fiscal Year-End Table
and the related footnotes for additional information regarding
these RSU and SAR awards. |
The performance-based RSUs and SARs vest upon achievement of
various operational and financial performance targets
established for each of fiscal 2006, 2007 and 2008 and continued
employment through dates that our Compensation Committee has
determined the performance targets have been achieved. The
operational and financial performance targets for fiscal 2006
and certain operational performance targets for fiscal 2007 were
established in October 2006. Accordingly, the performance-based
RSUs and SARs that relate to those performance targets are
considered granted on that date for accounting purposes and are
shown in the table above. Operational and financial performance
targets for fiscal 2007 were established in February 2007 and
the performance-based RSUs and SARS that relate to these
performance targets are considered granted on that date for
accounting purposes and are not included in the table above.
Operational and financial performance targets for fiscal 2008
will be established by the Compensation Committee by February
2008 and the performance-based RSUs and SARs that relate to
these performance targets are not considered granted for
accounting purposes and are not included in the table above. The
performance-based RSU and SAR awards that relate to fiscal 2007
and 2008 performance targets will be included in the fiscal
years in which they are considered granted for accounting
purposes.
The amounts of performance-based RSUs and SARs shown in the
table above represent those performance-based RSUs and SARs for
which performance targets for fiscal 2006 and, for grants to
Messrs. Stolte and Hume, certain operational performance
targets for fiscal 2007 were established in fiscal 2006. An
aggregate of 99,556, 7,778 and 74,667 performance-based RSUs and
100,000, 44,444 and 86,668 performance-based SARs granted to
Messrs. J. Eisenberg, Costantini and M. Eisenberg,
respectively, relate to fiscal 2007 and 2008 performance targets
that have not yet been established by our Compensation Committee
and are not considered granted for accounting purposes.
23
|
|
|
(3) |
|
The amounts shown in the Target/Maximum column
represent the target and maximum number of performance-based
RSUs or SARs which will vest under these awards if the
performance targets are achieved at or above the 100% level. The
amounts shown in the Threshold column represent the
minimum number of performance-based RSUs or SARs that will vest
under each award if the minimum level of performance is achieved
at the 90% level. For Messrs. J. Eisenberg, Costantini, M.
Eisenberg and Brady the minimum number represents 35% of the
target number of performance-based RSUs or SARs shown under the
Target column. For Messrs. Stolte and Hume, no
performance-based RSUs will vest unless the target performance
is achieved. See Compensation Discussion and
Analysis Elements of Compensation
Long-Term Equity-Based Incentives for a further discussion
regarding performance-based RSU and SAR awards. |
|
(4) |
|
The amounts shown in the Grant Date Fair Value of Stock
and Option Awards column represent the full grant date
fair value of the awards computed in accordance with
SFAS 123(R). The grant date fair value of the time- and
performance-based RSUs shown in the table was determined to be
$11.00 per share, the price of our common stock sold in our
initial public offering in November 2006. The grant date fair
value of the time- and performance-based SARs shown in the table
were estimated to be $5.41 and $5.18 per share,
respectively. For a discussion of valuation assumptions, see
Note 4 to our consolidated financial statements included in
our Annual Report of
Form 10-K
for the year ended December 31, 2006. |
|
(5) |
|
The amounts shown above have been pro rated to reflect Mr.
Costantinis period of employment with the Company in 2006. |
|
(6) |
|
On October 5, 2006, time-based RSU awards were granted to
each of the Named Executive Officers under the 2006 LTIP. These
time-based RSUs vest in three equal installments, subject to
continuing employment, on January 1, 2007, 2008 and 2009
(except Mr. Stolte, whose time-based RSUs vest on
May 21, 2007, 2008 and 2009, and Mr. Brady, whose
time-based RSUs vest on May 21, 2007). See
Compensation Discussion and Analysis Elements
of Compensation Long-Term Equity-Based
Incentives for a further discussion regarding time-based
RSU awards. See the Outstanding Equity Awards at Fiscal Year-End
Table and the related footnotes for additional information
regarding these RSU awards. |
|
(7) |
|
On October 5, 2006, time-based SAR awards were granted to
Mr. Costantini under the 2006 LTIP. The base price of
$11.00 per share of each SAR was equal to the price of our
common stock sold in our initial public offering in November
2006. These time-based SARs vest in three equal installments,
subject to continuing employment, on January 1, 2007, 2008
and 2009. See Compensation Discussion and
Analysis Elements of Compensation
Long-Term Equity-Based Incentives for further a discussion
regarding time-based SAR awards. See the Outstanding Equity
Awards at Fiscal Year-End Table and the related footnotes for
additional information regarding these SAR awards. |
24
Outstanding
Equity Awards at Fiscal Year-End
|
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Stock Awards
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Option Awards
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Equity Incentive
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Equity Incentive
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Equity Incentive
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Plan Awards:
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Plan Awards:
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Plan Awards:
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Market or
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Number of
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Number of
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Number of
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Number of
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Payout Value of
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Securities
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Securities
|
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Securities
|
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Unearned
|
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Unearned
|
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Underlying
|
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Underlying
|
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Underlying
|
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Number of
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Market Value of
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Shares, Units or
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Shares, Units or
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Unexercised
|
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Unexercised
|
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Unexercised
|
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Option
|
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Shares or Units
|
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Shares or Units
|
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Other Rights
|
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Other Rights
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Options
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Options
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Unearned
|
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Exercise
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Option
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of Stock That
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of Stock That
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That Have Not
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That Have Not
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(#)
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(#)
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Options
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Price
|
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Expiration
|
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Have Not Vested
|
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Have Not Vested
|
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Vested
|
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Vested
|
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Name
|
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Exercisable
|
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Unexercisable
|
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(#)
|
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($)
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Date
|
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(#)
|
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($)(1)
|
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|
(#)
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($)(1)
|
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Jerome B. Eisenberg
|
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166,667
|
|
|
|
|
|
|
|
|
|
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$
|
2.33
|
|
|
|
2/17/2014
|
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
$
|
|
|
|
|
|
33,334
|
|
|
|
|
|
|
|
|
|
|
|
2.33
|
|
|
|
2/17/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
33,334
|
|
|
|
|
|
|
|
|
|
|
|
2.78
|
|
|
|
2/17/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
33,334
|
|
|
|
|
|
|
|
|
|
|
|
3.38
|
|
|
|
2/17/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,000
|
|
|
|
8,334
|
(2)
|
|
|
|
|
|
|
4.26
|
|
|
|
2/17/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,000
|
(3)
|
|
|
11.00
|
|
|
|
10/5/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,000
|
(4)
|
|
|
11.00
|
|
|
|
10/5/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
149,334
|
(5)
|
|
|
1,317,126
|
(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24,889
|
(6)
|
|
|
219,521
|
(6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24,889
|
(7)
|
|
|
219,521
|
(7)
|
Robert G. Costantini
|
|
|
|
|
|
|
|
|
|
|
11,111
|
(3)
|
|
|
11.00
|
|
|
|
10/5/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,111
|
(4)
|
|
|
11.00
|
|
|
|
10/5/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
60,667
|
(8)
|
|
|
|
|
|
|
11.00
|
|
|
|
10/5/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,667
|
(5)
|
|
|
102,903
|
(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,944
|
(6)
|
|
|
17,146
|
(6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,944
|
(7)
|
|
|
17,146
|
(7)
|
Marc Eisenberg
|
|
|
166,667
|
|
|
|
|
|
|
|
|
|
|
|
2.33
|
|
|
|
2/17/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
33,334
|
|
|
|
|
|
|
|
|
|
|
|
2.33
|
|
|
|
2/17/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
33,334
|
|
|
|
|
|
|
|
|
|
|
|
2.78
|
|
|
|
2/17/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
33,334
|
|
|
|
|
|
|
|
|
|
|
|
3.38
|
|
|
|
2/17/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,000
|
|
|
|
8,334
|
(2)
|
|
|
|
|
|
|
4.26
|
|
|
|
2/17/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,166
|
(3)
|
|
|
11.00
|
|
|
|
10/5/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
28,167
|
(4)
|
|
|
11.00
|
|
|
|
10/5/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
112,000
|
(5)
|
|
|
987,840
|
(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13,067
|
(6)
|
|
|
115,251
|
(6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24,266
|
(7)
|
|
|
214,026
|
(7)
|
Emmett Hume
|
|
|
54,169
|
|
|
|
29,165
|
(9)
|
|
|
|
|
|
|
4.26
|
|
|
|
12/3/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,734
|
(5)
|
|
|
32,934
|
(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,734
|
(10)
|
|
|
32,934
|
(10)
|
John J. Stolte,
Jr.
|
|
|
11,667
|
|
|
|
|
|
|
|
|
|
|
|
2.33
|
|
|
|
2/17/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,667
|
|
|
|
|
|
|
|
|
|
|
|
2.78
|
|
|
|
2/17/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13,334
|
|
|
|
|
|
|
|
|
|
|
|
3.38
|
|
|
|
2/17/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,000
|
|
|
|
3,334
|
(2)
|
|
|
|
|
|
|
4.26
|
|
|
|
2/17/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
60,667
|
(11)
|
|
|
535,083
|
(11)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30,333
|
(12)
|
|
|
267,537
|
(12)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,167
|
(12)
|
|
|
133,773
|
(12)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,167
|
(13)
|
|
|
133,773
|
(13)
|
John P. Brady
|
|
|
83,334
|
|
|
|
|
|
|
|
|
|
|
|
4.26
|
|
|
|
12/31/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(former executive)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
778
|
(14)
|
|
|
8,558
|
(14)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
778
|
(15)
|
|
|
8,558
|
(15)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,555
|
(16)
|
|
|
13,724
|
(16)
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Based on the $8.82 per share closing price of our common
stock on December 29, 2006, the last trading day in 2006. |
|
(2) |
|
Option awards that vest in quarterly installments through
December 31, 2007. |
|
(3) |
|
Performance-based SAR awards that have a base price equal to
$11.00 per share, the fair market value of our common stock
on the grant date, and vest in April 2007 dependent on achieving
performance relative to fiscal 2006 target adjusted EBITDA. See
Note 2 to the Grants of Plan-Based Awards Table for a
discussion of performance-based SAR and RSU awards that are
issued but not deemed granted for accounting purposes, which are
not included in this table. |
|
(4) |
|
Performance-based SAR awards that have a base price equal to
$11.00 per share, the fair market value of our common stock
on the grant date, and vest in April 2007 dependent on achieving
performance relative to the fiscal 2006 target number of net
subscriber communicator additions during fiscal 2006. See
Note 2 to the Grants of Plan-Based Awards Table for a
discussion of performance-based SAR awards that are issued but
not deemed granted for accounting purposes, which are not
included in this table. |
|
(5) |
|
Time-based RSU awards that vest in three equal installments on
January 1, 2007, 2008 and 2009. On January 1, 2007,
one-third of these time-based RSU awards vested. |
25
|
|
|
(6) |
|
Performance-based RSU awards that vest in April 2007 based on
achieving performance relative to fiscal 2006 target adjusted
EBITDA. See Note 2 to the Grants of Plan-Based Awards Table
for a discussion of performance-based RSU awards that are issued
but not deemed granted for accounting purposes, which are not
included in this table. |
|
(7) |
|
Performance-based RSU awards that vest in April 2007 based on
achieving performance relative to the fiscal 2006 target number
of net subscriber communicator additions during fiscal 2006. See
Note 2 to the Grants of Plan-Based Awards Table for a
discussion of performance-based RSU awards that are issued but
not deemed granted for accounting purposes, which are not
included in this table. |
|
(8) |
|
Time-based SAR awards that have a base price equal to
$11.00 per share, the fair market value of our common stock
on the grant date, and vest in three equal installments on
January 1, 2007, 2008 and 2009. On January 1, 2007,
one-third of these time-based SARs vested. |
|
(9) |
|
Option awards that vest in quarterly installments through
September 30, 2008. |
|
(10) |
|
Performance-based RSU awards that vest in April 2007 based on
satisfaction of a specified operational target. |
|
(11) |
|
Time-based RSU awards that vest in three equal installments on
May 21, 2007, 2008 and 2009. |
|
(12) |
|
Performance-based RSU awards that vest on May 21, 2007
based on satisfaction of specified operational targets for
fiscal 2006. |
|
(13) |
|
Performance-based RSU awards that vest on January 15, 2008
based on satisfaction of a specified operational target for
fiscal 2007. |
|
(14) |
|
Performance-based RSU awards that vest on May 21, 2007
based on achieving performance relative to fiscal 2006 target
adjusted EBITDA. See Note 2 to the Grants of Plan-Based
Awards Table for a discussion of performance-based RSU awards
that are issued but not deemed granted for accounting purposes,
which are not included in this table. |
|
(15) |
|
Performance-based RSU awards that vest on May 21, 2007
based on achieving performance relative to the fiscal 2006
target number of net subscriber communicator additions during
fiscal 2006. See Note 2 to the Grants of Plan-Based Awards
Table for a discussion of performance-based RSU awards that are
issued but not deemed granted for accounting purposes, which are
not included in this table. |
|
(16) |
|
Time-based RSU awards that vest on May 21, 2007. |
26
EQUITY
COMPENSATION PLAN INFORMATION
The following table provides information, as of
December 31, 2006, about shares of our common stock that
may be issued upon the exercise or vesting of options, RSUs and
SARs granted to employees, consultants or directors under all of
our existing equity compensation plans.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
|
|
|
|
|
(c)
|
|
|
|
Number of
|
|
|
|
|
|
Number of Securities
|
|
|
|
Securities to be
|
|
|
|
|
|
Remaining Available for
|
|
|
|
Issued Upon
|
|
|
(b)
|
|
|
Future Issuance Under
|
|
|
|
Exercise or Vesting
|
|
|
Weighted-Average
|
|
|
Equity Compensation
|
|
|
|
of Outstanding
|
|
|
Exercise Price
|
|
|
Plans (Excluding
|
|
|
|
Options, RSUs
|
|
|
of Outstanding
|
|
|
Securities Reflected
|
|
Plan Category
|
|
and SARs
|
|
|
Options and SARs
|
|
|
in Column (a))
|
|
|
Equity compensation plans
approved by stockholders(1)
|
|
|
2,432,214
|
(2)
|
|
$
|
3.97
|
(3)
|
|
|
3,690,413
|
(4)
|
Equity compensation plans not
approved by stockholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
2,432,214
|
(2)
|
|
$
|
3.97
|
(3)
|
|
|
3,690,413
|
(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Consists of the following equity compensation plans: the 2004
Stock Option Plan and the 2006 LTIP. |
|
(2) |
|
Consists of 1,464,420 shares subject to outstanding stock
options under the 2004 Stock Option Plan and 182,223 shares
underlying outstanding time- and performance-based SARs and
785,571 shares underlying outstanding time- and
performance-based RSUs granted under the 2006 LTIP. |
|
(3) |
|
Excludes 785,571 shares underlying outstanding time- and
performance-based RSUs which do not have an exercise price. |
|
(4) |
|
Consists of shares available for issuance under the 2006 LTIP,
which includes the remaining 202,247 shares of common stock
available for issuance under the 2004 Stock Option Plan. Also
includes an aggregate of 231,111 shares underlying
performance-based SARs and 268,356 shares underlying
performance-based RSUs awarded in 2006 under the 2006 LTIP
relating to operational and performance targets for fiscal 2007
and 2008, which are not considered granted for accounting
purposes because the performance targets for fiscal 2007 and
2008 had not yet been established as of December 31, 2006. |
27
CERTAIN
RELATIONSHIPS AND TRANSACTIONS WITH RELATED PERSONS
Orbcomm
Europe
We have entered into a service license agreement covering 43
jurisdictions in Europe and a gateway services agreement with
ORBCOMM Europe LLC, a company in which we indirectly own a 25.5%
interest. The service license agreement and the gateway services
agreement with ORBCOMM Europe contain terms and conditions
substantially similar to the service license agreements and the
gateway services agreements we have and expect to enter into
with other licensees, except for certain more favorable pricing
terms. ORBCOMM Europe is owned 50% by Satcom and 50% by OHB
Technology A.G. (OHB Technology). We own a 52%
interest in Satcom. Subsequent to the acquisition of our 52%
interest in Satcom, Satcom and ORBCOMM Europe are consolidated
affiliates in our consolidated financial statements.
OHB Technology is a substantial stockholder and a direct
investor of ours and its Chief Executive Officer is on our board
of directors. In addition, Satcom has been appointed by ORBCOMM
Europe as a country representative for the United Kingdom,
Ireland and Switzerland. ORBCOMM Deutschland and Technikom
Polska, affiliates of OHB Technology, have been appointed by
ORBCOMM Europe as country representatives for Germany and
Poland, respectively. OHB Technology is also a 34% stockholder
of Elta S.A., the country representative for France. These
entities hold the relevant regulatory authority and
authorization in each of these jurisdictions. In addition,
ORBCOMM Europe and Satcom have entered into an agreement
obligating ORBCOMM Europe to enter into a country representative
agreement for Turkey with Satcom, if the current country
representative agreement for Turkey expires or is terminated for
any reason.
In connection with the organization of ORBCOMM Europe and the
reorganization of our business in Europe, we agreed to grant
ORBCOMM Europe approximately $3.7 million in air time
credits. The amount of the grant was equal to the amount owed by
ORBCOMM Global L.P. to the European Company for Mobile
Communications Services N.V. (MCS), the former
licensee for Europe of ORBCOMM Global L.P. ORBCOMM Europe, in
turn, agreed to issue credits in the aggregate amount of the
credits received from us to MCS and its country representatives
who were stockholders of MCS. Satcom, as a country
representative for the United Kingdom, Ireland and Switzerland,
received airtime credits in the amount of $580,200. ORBCOMM
Deutschland, as country representative for Germany, received
airtime credits of $449,800. Because approximately
$2.8 million of the airtime credits were granted to
stockholders of MCS who are not related to us and who continue
to be country representatives in Europe, we believe that
granting of the airtime credits was essential to permit ORBCOMM
Europe to reorganize the ORBCOMM business in Europe. The airtime
credits have no expiration date. As of December 31, 2006,
approximately $2.7 million of the credit granted by us to
ORBCOMM Europe remained unused.
28
Satcom
International Group plc.
Satcom is our 52%-owned consolidated subsidiary which
(i) owns 50% of ORBCOMM Europe, (ii) has entered into
country representative agreements with ORBCOMM Europe, covering
the United Kingdom, Ireland and Switzerland, and (iii) has
entered into a service license agreement with us, covering
substantially all of the countries of the Middle East and a
significant number of countries of Central Asia, and a gateway
services agreement with us. In addition, ORBCOMM Europe and
Satcom have entered into an agreement obligating ORBCOMM Europe
to enter into a country representative agreement for Turkey with
Satcom, if the current country representative agreement for
Turkey expires or is terminated for any reason. We believe that
the service license agreement and the gateway services agreement
between us and Satcom contain terms and conditions substantially
similar to those which we have and expect to enter into with
other unaffiliated licensees. As of December 31, 2006,
Satcom owed us unpaid fees of approximately $188,000.
We acquired our 52% interest in Satcom from Jerome Eisenberg,
our Chief Executive Officer, and Don Franco, a former officer of
ours, who, immediately prior to the October 2005 reorganization
of Satcom, together owned directly or indirectly a majority of
the outstanding voting shares of Satcom and held a substantial
portion of the outstanding debt of Satcom. On October 7,
2005, pursuant to a contribution agreement entered into between
us and Messrs. Eisenberg and Franco in February 2004, we
acquired all of their interests in Satcom in exchange for
(1) an aggregate of 620,000 shares of our
Series A preferred stock and (2) a contingent cash
payment in the event of our sale or initial public offering. The
contribution agreement was entered into in connection with our
February 2004 reorganization in order to eliminate any potential
conflict of interest between us and Messrs. Eisenberg and
Franco, in their capacities as officers of ours. The contingent
payment would equal $2 million, $3 million or
$6 million in the event the proceeds from our sale or the
valuation in our IPO exceeds $250 million,
$300 million or $500 million, respectively, subject to
proration for amounts that fall in between these thresholds. On
November 8, 2006, upon completion of our IPO, we made a
contingent payment of approximately $3.6 million.
Immediately prior to, and as a condition to the closing of, the
Satcom acquisition, Satcom and certain of its stockholders and
noteholders consummated a reorganization transaction whereby 95%
of the outstanding principal of demand notes, convertible notes
and certain contract debt was converted into equity, and accrued
and unpaid interest on such demand and convertible notes was
acknowledged to have been previously released. This
reorganization included the conversion into equity of the demand
notes and convertible notes of Satcom held by
Messrs. Eisenberg and Franco in the principal amounts of
approximately $50,000 and $6,250,800, respectively, and the
release of any other debts of Satcom owed to them.
As of December 31, 2006, ORBCOMM Europe had a note payable
to Satcom in the amount of 1,466,920 ($1,902,190). This
note has the same payment terms as the note payable from ORBCOMM
Europe to OHB Technology described below under
OHB Technology A.G. and carries a zero
interest rate. For accounting purposes, this note has been
eliminated in the consolidation of ORBCOMM Europe and Satcom
with ORBCOMM Inc. We own 52% of Satcom, which in turn owns 50%
of ORBCOMM Europe.
We have provided Satcom with a $1.0 million line of credit
for working capital purposes pursuant to a revolving note dated
as of December 30, 2005. The revolving loan bears interest
at 8% per annum and was originally scheduled to mature on
December 30, 2006, and is secured by all of Satcoms
assets, including its membership interest in ORBCOMM Europe. As
of December 31, 2006 and 2005, Satcom had $465,000 and $0,
respectively, outstanding under this line of credit. On
December 22, 2006, we extended the maturity date to
December 31, 2007.
OHB
Technology A.G.
On May 21, 2002, we entered into an IVAR agreement with OHB
Technology (formerly known as OHB Teledata A.G.) whereby OHB
Technology has been granted non-exclusive rights to resell our
services for applications developed by OHB Technology for the
monitoring and tracking of mobile tanks and containers. As of
December 31, 2006, OHB Technology did not owe us any unpaid
service fees.
In an unrelated transaction, on March 10, 2005, we entered
into an ORBCOMM concept demonstration satellite bus, integration
test and launch services procurement agreement with OHB-System
AG (an affiliate of OHB Technology), whereby OHB-System AG will
provide us with overall concept demonstration satellite design,
29
bus module and payload module structure manufacture, payload and
bus module integration, assembled satellite environmental tests,
launch services and on-orbit testing of the bus module for the
Concept Validation Project.
OHB Technology owns 2,682,457 shares of our common stock
and warrants to purchase 86,542 shares of our common stock
representing approximately 6.7% of our total shares on a fully
diluted basis. For so long as the Series A preferred stock
was outstanding, OHB had the right to appoint a representative
to our board of directors. Marco Fuchs was initially OHB
Technologys representative on our board of directors. In
addition, SES and OHB Technology jointly had the right to
appoint a representative to our board of directors. Robert
Bednarek was SESs and OHB Technologys joint
representative on our board of directors. On February 27,
2007, Mr. Bednarek resigned, effective immediately, as a
member of our board of directors in connection with SESs
agreement to sell its 5.5% equity position in us to General
Electric Company as part of a larger pending transaction in
which SES has agreed to buy back GEs 19.5% equity position
in SES. Mr. Bednarek served as a member of our Nominating
and Corporate Governance Committee. Mr. Bednareks
term as a Class II director was scheduled to expire at our
2008 annual meeting of stockholders.
In connection with the acquisition of an interest in Satcom (see
Satcom International Group plc. above),
we recorded an indebtedness to OHB Technology arising from a
note payable from ORBCOMM Europe to OHB Technology. At
December 31, 2006 the principal balance of the note payable
is 1,138,410 ($1,502,005) and it has a carrying value of
$879,000. This note does not bear interest and has no fixed
repayment term. Repayment will be made from the distribution
profits (as defined in the note agreement) of ORBCOMM Europe.
The note has been classified as long-term and we do not expect
any repayments to be required prior to December 31, 2007.
On June 5, 2006, we entered into an agreement with
OHB-System AG, an affiliate of our shareholder OHB Technology,
to design, develop and manufacture for us six satellite buses,
integrate such buses with the payloads to be provided by Orbital
Sciences Corporation, and launch the six integrated satellites
to complete our quick launch program, with options
for two additional satellite buses and related integration
services exercisable on or before June 5, 2007. The price
for the six satellite buses and related integration and launch
services is $20 million, or up to a total of
$24.2 million if the options for the two additional
satellite buses and related integration services are exercised,
subject to certain price adjustments for late penalties and
on-time or early delivery incentives. As of December 31,
2006, we have made payments totaling $6.0 million pursuant
to this agreement. In addition, under the agreement, OHB-System
AG will provide preliminary services relating to the
development, demonstration and launch of our next-generation
satellites at a cost of $1.35 million.
Orbcomm
Asia Limited
On May 8, 2001, we signed a memorandum of understanding
with OAL outlining the parties intention to enter into a
definitive service license agreement on terms satisfactory to us
covering Australia, China, India, New Zealand, Taiwan and
Thailand. Although the parties commenced negotiations toward
such an agreement, a definitive agreement was never concluded
and the letter of intent terminated by its terms. We believe OAL
is approximately 90% owned by Gene Hyung-Jin Song, a stockholder
of ours who owns shares of our common stock, representing less
than 1% of our total shares on a fully diluted basis. OAL owns
786,588 shares of our common stock, representing 1.9% of
our total shares on a fully diluted basis. It is currently our
intention to consider operating service licenses
and/or
country representative agreements for these territories on a
country by country basis as prospective parties demonstrate the
ability, from a financial, technical and operations point of
view, to execute a viable business plan. During 2003, 2004 and
2005, OAL owed us amounts for costs related to the storage in
Virginia of gateway earth stations owned by OAL. On
September 14, 2003, OAL pledged certain assets to us to
ensure OALs debt to us would be paid (Pledge
Agreement). On August 29, 2005, we foreclosed on a
warehousemans lien against OAL and took possession of
three of the four gateway earth stations being stored by OAL in
Virginia in satisfaction of the outstanding amounts owed to us
by OAL. We continue to store the remaining gateway earth station
owned by OAL in Virginia and as of December 31, 2006 no
amounts were owed to us related to this storage. In addition, we
and OAL had a dispute that was recently decided in our favor in
arbitration.
30
Orbcomm
Japan Limited
To ensure that regulatory authorizations held by ORBCOMM Japan
Limited (OJ) in Japan were not jeopardized at the
time we purchased the assets from ORBCOMM Global L.P., and with
the understanding that a new service license agreement would be
entered into between the parties, we assumed the service license
agreement entered into between ORBCOMM Global L.P. and OJ. We
and OJ undertook extensive negotiations for a new service
license agreement from early 2002 until 2004 but were unable to
reach agreement on important terms. We believe Mr. Gene
Hyung-Jin Song is the beneficial owner of approximately 38% of
OJ. On September 14, 2003, OAL pledged certain assets to us
pursuant to a Pledge Agreement to ensure that certain amounts
owed by OJ to us under the existing service license agreements
would be paid. On January 4, 2005, we sent a notice of
default to OJ for its failure to remain current with payments
under the service license agreement and subsequently terminated
the agreement when the default was not cured. On March 31,
2005, OJ made a partial payment of the amount due of $350,000.
In 2005, we agreed to a standstill (the Standstill
Agreement) under the Pledge Agreement (including as to OAL
and Korea ORBCOMM Limited (KO)) and conditional
reinstatement of the prior service license agreement, subject to
our receiving payment in full of all debts owed by OJ, KO and
OAL to us by December 15, 2005 and certain operational
changes designed to give us more control over the Japanese and
Korean gateway earth stations. The outstanding amounts owed by
OJ to us were not repaid as of December 15, 2005 and as of
December 31, 2006 and 2005, OJ owed us approximately
$343,000 and $385,000 in unpaid fees, respectively. On
February 22, 2006, we sent a notice of default to OJ for
its failure to satisfy its obligations under the Standstill
Agreement including its failure to make the required payments
under the service license agreement and if the defaults are not
cured in the near future, we intend to terminate the agreement
as a result of such default.
Korea
Orbcomm Limited
To ensure that regulatory authorizations held by KO in South
Korea were not jeopardized at the time ORBCOMM LLC purchased the
assets from the ORBCOMM Global L.P., and with the understanding
that a new service license agreement would be entered into
between the parties, we assumed the service license agreement
entered into between ORBCOMM Global L.P. and KO. We and KO
undertook extensive negotiations for a new service license
agreement from early 2002 until 2004 but were unable to reach
agreement on important terms. We believe Mr. Gene Hyung-Jin
Song is the beneficial owner of approximately 33% of KO. On
September 14, 2003, OAL pledged certain assets to us to
ensure that certain amounts owed to us by KO under the existing
service license agreement would be paid. On January 4,
2005, we sent a notice of default to KO for its failure to
remain current with payments under the service license agreement
and subsequently terminated the agreement when the default was
not cured. In 2005, we agreed to a standstill with respect to
the default by KO as part of the Standstill Agreement and
conditional reinstatement of the prior service license
agreement. The outstanding amounts owed by KO to us were not
repaid as of December 15, 2005 and as of December 31,
2006 and 2005, KO owed us approximately $116,000 and 149,000 in
unpaid service fees, respectively. On April 5, 2006, we
sent a notice of default to KO for its failure to comply with
the Standstill Agreement and if the defaults are not cured in
the near future, we intend to terminate the service license
agreement as a result of such defaults.
Sistron
International LLC
In connection with the Series A preferred stock financing
discussed below under Series A and
Series B Preferred Stock Financings, Messrs. J.
Eisenberg and Franco sold all of their interest in Sistron
International LLC, a reseller that had developed an application
for the electric utility industry to us for a purchase price
equal to their cash investment in Sistron of approximately
$0.4 million, paid in 84,942 shares of Series A
preferred stock issued at the same purchase price per share as
paid by investors in the Series A preferred stock financing.
SES
On February 17, 2004, we entered into an IVAR Agreement
with SES (formerly named SES Global S.A.) whereby SES has been
granted exclusive rights during the initial term of the
agreement to resell our services for return channel applications
developed by SES for the
Direct-to-Home
TV market. As of December 31, 2006, SES did not owe us any
unpaid service fees. SES owns SES Participations (formerly named
SES Global Participations S.A.), the holder of
2,000,001 shares of our common stock representing
approximately 4.8% of our total shares on a
31
fully diluted basis. In addition, SES and OHB Technology jointly
have the right to appoint a representative to our board of
directors. Robert Bednarek was SESs and OHB
Technologys representative on our board of directors. On
February 27, 2007, Mr. Bednarek resigned, effective
immediately, as a member of our board of directors in connection
with SESs agreement to sell its 5.5% equity position in us
to GE as part of a larger pending transaction in which SES has
agreed to buy back GEs 19.5% equity position in SES.
Mr. Bednarek served as a member of our Nominating and
Corporate Governance Committee. Mr. Bednareks term as
a Class II director was scheduled to expire at our 2008
annual meeting of stockholders.
Series A
and Series B Preferred Stock Financings
On February 17, 2004, we completed a private placement of
Series A convertible redeemable preferred stock at a
purchase price of $2.84 per share, or an aggregate of
approximately $17.9 million, to SES, Ridgewood Satellite
LLC (including conversion of the note issued to Ridgewood
Satellite LLC), OHB Technology, Northwood Ventures LLC and
Northwood Capital Partners LLC, entities with whom individuals
who were directors at the time of the Series A financing
were affiliated and Jerome Eisenberg, our Chairman and Chief
Executive Officer. All outstanding shares of Series A
convertible preferred stock automatically converted into shares
of our common stock in connection with our IPO.
In November and December 2005 and January 2006, we completed
private placements in the amount of approximately
$72.5 million, consisting of 10% convertible promissory
notes due February 16, 2010, warrants to purchase our
common stock, and our Series B convertible redeemable
preferred stock to PCG Satellite Investments, LLC (an affiliate
of the Pacific Corporate Group), MH Investors Satellite LLC (an
affiliate of MH Equity Investors), entities with whom
individuals who were directors at the time of the Series B
financing were affiliated and several existing investors,
including Ridgewood Capital, OHB Technology, Northwood Ventures
LLC, and several members of senior management.
The Series A preferred stock holders were entitled to
receive a cumulative 12% annual dividend. The Series A
preferred stock dividend was eliminated upon the issuance of the
Series B preferred stock in December 2005. In January 2006,
we paid all accumulated dividends on its Series A preferred
stock totaling $8.0 million. Holders of the Series B
preferred stock were entitled to receive a cumulative 12%
dividend annually payable in cash in arrears. On
November 8, 2006, upon the closing of its IPO, we paid all
accumulated dividends on its Series B preferred stock
totaling $7.5 million.
On October 12, 2006, we obtained written consents of
holders who collectively held in excess of two-thirds of the
Series B preferred stock, to the automatic conversion of
the Series B preferred stock into shares of common stock,
upon the closing of an initial public offering at a price per
share of not less than $11.00. In consideration for the holders
of the Series B preferred stock providing their consents,
we agreed to make a contingent payment to all of the holders of
the Series B preferred stock if the price per share of the
initial public offering was between $11.00 and $12.49 per
share, determined as follows: (i) 12,014,227 (the number of
shares of our common stock into which all of the shares of the
Series B preferred stock would convert at the then-current
conversion price) multiplied by (ii) the difference between
(a) $6.045 and (b) the quotient of (I) the
initial public offering price divided by (II) 2.114. On
November 8, 2006, we closed the IPO at a price of
$11.00 per share and made a $10.1 million payment to
the holders of Series B preferred stock in connection with
obtaining consents required for the automatic conversion of the
Series B preferred stock into our common stock.
Certain purchasers of the Companys Series B preferred
stock were obligated to purchase an additional
10,297,767 shares of Series B preferred stock in March
2007 at $4.03 per share, unless a qualified sale or a
qualified initial public offering occurred prior to that time.
These rights were terminated upon the closing of the IPO.
Registration
Rights Agreement
On December 30, 2005, and in connection with the
Series B preferred stock financing described above, we
entered into a Second Amended and Restated Registration Rights
Agreement with the Series B preferred stock investors and
existing holders of our Series A preferred stock and common
stock who were parties to the Amended and Restated Registration
Rights Agreement dated February 17, 2004.
32
Beginning any time after the first to occur of eighteen months
after December 30, 2005 and six months after an initial
public offering of our common stock or, after the fifth
anniversary of the date of the agreement, certain holders of
common stock, (including common stock issued upon the conversion
of Series A preferred stock and Series B preferred
stock) will have the right to demand, at any time or from time
to time, that we file up to two registration statements
registering the common stock. Only holders of (i) at least
two-thirds of the registrable securities (generally our common
stock and common stock issued upon conversion of our preferred
stock and warrants) outstanding as of the date of the our IPO,
(ii) at least 35% of the registrable securities outstanding
as of the date of the demand or (iii) a specified number of
holders of common stock issued upon conversion of our
Series B preferred stock may request a demand registration.
In addition, certain holders will be entitled to an additional
demand registration statement on
Form S-3
covering the resale of all registrable securities, provided that
we will not be required to effect more than one such demand
registration statement on
Form S-3
in any twelve month period or to effect any such demand
registration statement on
Form S-3
if any such demand registration statement on
Form S-3
will result in an offering price to the public of less than
$20 million. Notwithstanding the foregoing, after we
qualify to register our common stock on
Form S-3,
Sagamore Hill Hub Fund Ltd. and its affiliates
(collectively, Sagamore) and PCG Satellite
Investments, LLC, CALPERS/PCG Corporate Partners, LLC and their
affiliates (the PCG Entities) will have separate
rights to additional demand registrations that would be eligible
for registration on
Form S-3;
provided, that we will not be required to effect more than one
such demand registration requested by Sagamore or the PCG
Entities, as the case may be, on
Form S-3
in any twelve month period and that Sagamore or the PCG
Entities, as the case may be, will pay the expenses of such
registration if such registration shall result in an aggregate
offering price to the public of less than $1 million.
Certain investors also have preemptive rights and piggyback
registration rights as specified in our Second Amended and
Restated Registration Rights Agreement.
Employment
Agreements
Jerome B. Eisenberg. In August 2006, we
entered into an employment agreement with Jerome B. Eisenberg to
serve as our Chairman of the Board and Chief Executive Officer,
effective as of June 1, 2006. The employment agreement
expires on December 31, 2008, unless terminated earlier
pursuant to the terms of the agreement. The employment agreement
may be extended by mutual agreement of the parties. Upon the
expiration of the agreements term, and any extension
thereof, Mr. Eisenberg will continue to be employed on an
at will basis.
Mr. Eisenbergs employment agreement provides for an
annual base salary of $355,000. If we hire an employee with a
base salary greater than Mr. Eisenbergs base salary,
then Mr. Eisenbergs base salary will be increased to
105% of the other employees base salary. In addition to
his salary, Mr. Eisenberg is entitled to certain employee
benefits, including medical and disability insurance, term life
insurance, paid holiday and vacation time and other employee
benefits paid by us. Mr. Eisenberg is eligible to receive a
bonus, payable in cash or cash equivalents, based on a
percentage of his base salary (ranging from 18% to 140%)
dependent upon achieving 90% to 133% of certain performance
targets established each year by the board of directors. No
bonus will be paid unless 90% of the applicable performance
targets for that fiscal year are met or exceeded. For 2006, the
performance targets were based 50% on achievement of a target
adjusted EBITDA for fiscal 2006 and 50% on achievement of a
target net subscriber communicator additions during 2006.
Mr. Eisenberg is entitled to participate in any profit
sharing
and/or
pension plan generally provided for our executives, and in any
equity option plan or restricted equity plan established by us
in which our senior executives are generally permitted to
participate.
In addition, under his employment agreement, we issued
Mr. Eisenberg awards consisting of 298,667 RSUs and 150,000
SARs. The RSUs will be payable only in shares of our common
stock and the SARs will have a base price equal to the fair
market value on the date of grant (the initial public offering
price of our common stock for the 2006 grant). One half of the
RSUs will vest in three equal installments on January 1,
2007, January 1, 2008 and December 31, 2008. The
remaining RSUs and all the SARs typically vest in three equal
installments in 2007, 2008 and 2009 on the achievement of
certain performance targets, for each of fiscal 2006, 2007 and
2008, established each year by the board of directors or the
Compensation Committee. For fiscal 2006, the performance targets
were the same as for Mr. Eisenbergs annual bonus
described above.
33
If Mr. Eisenbergs employment as Chairman and Chief
Executive Officer is terminated by us without cause
(as defined in his agreement) or by Mr. Eisenberg with
good reason (as defined in his agreement), he is
entitled (1) to receive a pro rata share of his target
bonus for the fiscal year in which the termination occurs and
(2) to continue to receive, as a severance payment, his
base salary and continued health insurance coverage for one year
immediately following such termination.
If Mr. Eisenberg terminates his employment as Chief
Executive Officer, but continues to serve as non-executive
Chairman of the Board, he will not be entitled to the severance
payment described above. If Mr. Eisenbergs employment
as Chief Executive Officer is terminated by us without
cause or by Mr. Eisenberg with good
reason, but he continues to serve as non-executive
Chairman of the Board, Mr. Eisenberg will be entitled to
receive severance payments equal to the difference between his
then-current base salary and his annual compensation from us for
service as non-executive Chairman of the Board payable in
regular installments for one year immediately following such
termination. If Mr. Eisenbergs appointment as our
Chairman of the Board is terminated by us without
cause, then in lieu of any other severance payments
under the agreement, Mr. Eisenberg will be entitled to
continue to receive his base salary for the greater of
(1) one year immediately following such termination or
(2) the remainder of the term of the agreement; provided
that if Mr. Eisenberg has previously received severance
payments under the agreement, we are entitled to offset, on a
dollar-for-dollar
basis, any severance payments described in this sentence.
Mr. Eisenbergs post-termination payments described
above are conditioned on his executing a release in favor of us.
In addition, his employment agreement contains standard
covenants relating to confidentiality and assignment of
intellectual property rights, a two-year post-employment
non-solicitation covenant and a one-year post-employment
non-competition covenant. Upon a change of control,
Mr. Eisenberg will be entitled to the same post-employment
payments as if his employment as Chief Executive Officer were
terminated by us without cause, unless the successor
or transferee company continues his employment on substantially
equivalent terms as under his agreement; provided that if the
change of control transaction occurs having a value
greater than $6.045 per share (as adjusted for any stock
dividends, combinations or splits), Mr. Eisenberg will be
entitled to have all his equity related and stock-based
compensation awards as of the date of such change of
control become fully exercisable (without regard to the
satisfaction of any time-based or performance criteria).
If Mr. Eisenberg is no longer our Chief Executive Officer,
but continues as Chairman of the Board, then (1) his base
salary will be reduced by $155,000, (2) subject to
satisfying any eligibility requirements, he will continue to be
entitled to receive the employee benefits he received as Chief
Executive Officer and (3) his RSU and SAR awards will
continue to vest in accordance with their terms.
Robert G. Costantini. In September 2006, we
entered into an employment agreement with Robert G. Costantini
to serve as our Executive Vice President and Chief Financial
Officer, effective as of October 2, 2006. The employment
agreement expires on September 30, 2009, unless terminated
earlier pursuant to the terms of the agreement. The employment
agreement may be extended by mutual agreement of the parties.
Upon the expiration of the agreements term, and any
extension thereof, Mr. Costantini will continue to be
employed on an at will basis.
Mr. Costantinis employment agreement provides for an
annual base salary of $270,000. In addition to his salary,
Mr. Costantini is entitled to certain employee benefits,
including medical and disability insurance, term life insurance,
paid holiday and vacation time and other employee benefits paid
by us. Mr. Costantini is eligible to receive a bonus,
beginning with a pro rata bonus for the 2006 fiscal year,
payable in cash or cash equivalents, based on a percentage of
his base salary (ranging from 18% to 100%) dependent upon
achieving 90% to 125% of certain performance targets established
each year by the board of directors. No bonus will be paid
unless 90% of the applicable performance targets for that fiscal
year are met or exceeded. For 2006, the performance targets were
based 50% on achievement of a target adjusted EBITDA for fiscal
2006 and 50% on achievement of a target net of subscriber
communicator additions during 2006. Mr. Costantini is
entitled to participate in any profit sharing
and/or
pension plan generally provided for our executives, and in any
equity option plan or restricted equity plan established by us
in which our senior executives are generally permitted to
participate.
34
In addition, under his employment agreement, we issued
Mr. Costantini awards consisting of 23,333 RSUs and 133,333
SARs. The RSUs will be payable only in shares of our common
stock and the SARs will have a base price equal to the fair
market value on the date of grant (the initial public offering
price of our common stock for all the time-based SARs and the
performance-based SARs granted in 2006). One half of the RSUs
and one half of the SARs will vest in three equal installments
on January 1, 2007, January 1, 2008 and
January 1, 2009. The remaining RSUs and SARs will vest in
three equal installments in 2007, 2008 and 2009 on the
achievement of certain performance targets, for each of fiscal
2006, 2007 and 2008, established each year by the board of
directors or the Compensation Committee. For fiscal 2006, the
performance targets were the same as for
Mr. Costantinis annual bonus described above.
If Mr. Costantinis employment is terminated by us
without cause (as defined in his agreement) during
the term of the agreement, or any extension thereof, he is
entitled to continue to receive his base salary and continued
health insurance coverage for one year immediately following
such termination. Mr. Costantinis post-termination
payments are conditioned on his executing a release in favor of
us. In addition, his employment agreement contains standard
covenants relating to confidentiality and assignment of
intellectual property rights, a two-year post-employment
nonsolicitation covenant and a one-year post-employment
non-competition covenant. Upon a change of control
(as defined in his agreement), Mr. Costantini will be
entitled to the same post-employment payments as if his
employment were terminated by us without cause (as
described above), unless the successor or transferee company
continues his employment on substantially equivalent terms as
under his agreement.
Marc Eisenberg. In July 2006, we entered into
an employment agreement with Marc Eisenberg to serve as our
Chief Marketing Officer, effective as of June 1, 2006. The
employment agreement expires on December 31, 2008, unless
terminated earlier pursuant to the terms of the agreement. The
employment agreement may be extended by mutual agreement of the
parties. Upon the expiration of the agreements term, and
any extension thereof, Mr. Eisenberg will continue to be
employed on an at will basis.
Mr. Eisenbergs employment agreement provides for an
annual base salary of $315,000. In addition to his salary,
Mr. Eisenberg is entitled to certain employee benefits,
including medical and disability insurance, term life insurance,
paid holiday and vacation time and other employee benefits paid
by us. Mr. Eisenberg is eligible to receive a bonus,
payable in cash or cash equivalents, based on a percentage of
his base salary (ranging from 18% to 140%) dependent upon
achieving 90% to 133% of certain performance targets established
each year by the board of directors. No bonus will be paid
unless 90% of the applicable performance targets for that fiscal
year are met or exceeded. For 2006, the performance targets were
based 35% on achievement of a target adjusted EBITDA for fiscal
2006 and 65% on achievement of a target net subscriber
communicator additions during 2006. Mr. Eisenberg will be
entitled to participate in any profit sharing
and/or
pension plan generally provided for our executives, and in any
equity option plan or restricted equity plan established by us
in which our senior executives are generally permitted to
participate.
In addition, under his employment agreement, we issued
Mr. Eisenberg awards consisting of 224,000 RSUs and 130,000
SARs. The RSUs will be payable only in shares of our common
stock and the SARs will have a base price equal to the fair
market value on the date of grant (the initial public offering
price of our common stock for the 2006 grant). One half of the
RSUs will vest in three equal installments on January 1,
2007, January 1, 2008 and December 31, 2008. The
remaining RSUs and all the SARs will vest in three equal
installments in 2007, 2008 and 2009 on the achievement of
certain performance targets, for each of fiscal 2006, 2007 and
2008, established each year by the board of directors or the
Compensation Committee. For fiscal 2006, the performance targets
are the same as for Mr. Eisenbergs annual bonus
described above.
If Mr. Eisenbergs employment is terminated by us
without cause (as defined in his agreement) or by
Mr. Eisenberg due to a material change in his status,
title, position or scope of authority or responsibility during
the term of the agreement, or any extension thereof, he is
entitled to continue to receive his base salary and continued
health insurance coverage for one year immediately following
such termination. Mr. Eisenbergs post-termination
payments are conditioned on his executing a release in favor of
us. In addition, his employment agreement contains standard
covenants relating to confidentiality and assignment of
intellectual property rights, a two-year post-employment
non-solicitation covenant and a one-year post-employment
non-competition covenant. Upon a change of control
(as defined in his agreement), Mr. Eisenberg will be
entitled to the same post-employment
35
payments as if his employment were terminated by us without
cause (as described above), unless the successor or
transferee company continues his employment on substantially
equivalent terms as under his agreement; provided that if the
change of control transaction occurs having a value
greater than $6.045 per share (as adjusted for any stock
dividends, combinations or splits), Mr. Eisenberg will be
entitled to have all his RSU and SAR awards as of the date of
such change of control become fully vested and
exercisable (without regard to the satisfaction of any
time-based or performance criteria).
Emmett Hume. We have entered into an
employment agreement with Emmett Hume to serve as our Executive
Vice President, International, effective as of August 2,
2004. The initial term of the employment agreement is for three
years, expiring on August 1, 2007, unless terminated
earlier pursuant to the terms of the agreement. The employment
agreement may be extended by mutual agreement of the parties.
Upon the expiration of the employment agreements term, or
any extension thereof, Mr. Humes employment will
continue on an at will basis.
Mr. Humes employment agreement provides for an annual
base salary of $220,000 and eligibility for annual discretionary
bonuses and to participate in our employee benefit and
equity-based compensation plans. In addition, under his
agreement, we granted Mr. Hume options to purchase
83,333 shares of our common stock. If Mr. Hume is
terminated without cause or resigns for good
reason (each as defined in his agreement), he is entitled
to receive a severance payment equal to his base salary for the
greater of (1) the remainder of the agreements term
or (2) six months after the termination date, plus a
prorated bonus for the year in which the termination occurs.
Mr. Humes severance payments are conditioned on his
executing a release in favor of us. In addition, his agreement
contains standard covenants relating to confidentiality and
assignment of intellectual property rights, and one year
post-employment non-solicitation and non-competition covenants.
John J. Stolte, Jr. In August 2006, we
entered into an employment agreement with John J.
Stolte, Jr. to serve as our Executive Vice
President Technology and Operations, effective as of
June 1, 2006. The employment agreement expires on
December 31, 2008, unless terminated earlier pursuant to
the terms of the agreement. The employment agreement may be
extended by mutual agreement of the parties. Upon the expiration
of the agreements term, and any extension thereof,
Mr. Stolte will continue to be employed on an at
will basis.
Mr. Stoltes employment agreement provides for an
annual base salary of $225,000. In addition to his salary,
Mr. Stolte is entitled to certain employee benefits,
including medical and disability insurance, term life insurance,
paid holiday and vacation time and other employee benefits paid
by us. Mr. Stolte is eligible to receive a bonus, payable
in cash or cash equivalent, based on a percentage of his base
salary (ranging from 15% to 75%) dependent upon achieving 90% to
100% of certain performance targets established each year by the
board of directors or the Compensation Committee. No bonus will
be paid unless 90% of the applicable performance targets for
that fiscal year are met or exceeded. For 2006, the performance
targets were based 17% on achievement of a target adjusted
EBITDA for fiscal 2006, 17% on achievement of a target net
number of billable subscriber communicators added to our
communications system during 2006 and 66% on achievement of
certain qualitative milestone targets. Mr. Stolte is
entitled to participate in any profit sharing
and/or
pension plan generally provided for our executives, and in any
equity option plan or restricted equity plan established by us
in which our senior executives are generally permitted to
participate.
In addition, under his employment agreement, we issued
Mr. Stolte 121,333 RSUs. The RSUs will be payable only in
shares of our common stock. One half of the RSUs will vest in
three equal installments on May 21, 2007, 2008 and 2009.
The remaining RSUs will vest as follows: 45,500 on May 21,
2007 and 15,167 on January 15, 2008, in each case subject
to the achievement of certain performance targets. For fiscal
2006, the performance targets were based on achieving certain
operational targets by specified dates. The RSUs will be subject
to forfeiture if Mr. Stolte breaches the one-year
post-employment non-competition and non-solicitation covenants
under the RSU award agreement.
If Mr. Stoltes employment is terminated by reason of
his death or disability, or by us without cause (as
defined in his agreement) during the term of the agreement, or
any extension thereof, he or his estate is entitled to continue
to receive his then current base salary for one year immediately
following such termination. Mr. Stoltes
post-termination payments are conditioned on his executing a
release in favor of us. In addition, his agreement
36
contains standard covenants relating to confidentiality and
assignment of intellectual property rights, a two-year
post-employment non-solicitation covenant and a one-year
post-employment non-competition covenant. Upon a change of
control (as defined in his agreement), Mr. Stolte
will be entitled to the same post-employment payments as if his
employment were terminated by us without cause (as
described above), unless the successor or transferee company
continues his employment on substantially equivalent terms as
under his agreement; provided that if the change of
control transaction occurs having a value greater than
$6.045 per share (as adjusted for any stock dividends,
combinations or splits), Mr. Stolte will be entitled to
have all his RSU and SAR awards as of the date of such
change of control become fully vested and
exercisable (without regard to the satisfaction of any
time-based or performance criteria).
John P. Brady. We entered into an employment
agreement with John P. Brady, our former Executive Vice
President Finance, dated as of May 5, 2006, and
a retention and separation agreement with Mr. Brady,
effective as of October 11, 2006, which amended and
superseded certain portions of the employment agreement. Under
the terms of the retention and separation agreement,
Mr. Brady continued his employment with us as Executive
Vice President Finance and provided continued
services for our finance functions until December 31, 2006.
Under the terms of the retention and separation agreement,
Mr. Brady continued to receive his annual base salary of
$225,000 until December 31, 2006 and received the following
retention payments: continued payment of his base salary for six
months after his termination of employment (an aggregate of
$120,000, including payroll withholding tax) and eligibility to
receive a discretionary bonus for the 2006 fiscal year, as
determined in the sole discretion of the compensation committee,
payable at the same time as annual bonuses for the 2006 fiscal
year are paid to our other executive officers.
Mr. Bradys retention payments are conditioned on his
executing a release in favor of us. In addition, his agreements
contain standard covenants relating to confidentiality,
non-disparagement, cooperation and assignment of intellectual
property rights, a two year post-employment non-solicitation
covenant and a one year post-employment non-competition covenant.
In addition, we issued Mr. Brady an award of 9,333 RSUs.
The RSUs will be payable only in shares of our common stock.
1,555 time-based RSUs will vest on May 21, 2007 and 1,555
performance-based RSUs are expected to vest on May 21, 2007
on the achievement of certain performance targets, for fiscal
2006. For fiscal 2006, the performance targets are based 50% on
achievement of a target adjusted EBITDA for fiscal 2006 and 50%
on achievement of a target net subscriber communicator additions
during 2006. Upon Mr. Bradys termination of
employment on December 31, 2006, the remaining 6,222 RSUs
were cancelled.
Effective May 5, 2006, we amended Mr. Bradys
stock option agreement as follows: (i) options originally
granted as incentive stock options will be treated as
non-statutory stock options, (ii) all options that are not
already exercisable will vest immediately upon the occurrence
of: (1) his termination by us without cause, (2) his
death or disability, or (3) the natural expiration of the
Term, as defined in the employment agreement, and (iii) the
period of time in which Mr. Brady must exercise his vested
options following a termination of employment is extended until
the later of (1) December 31st of the calendar year in
which Mr. Bradys right to exercise the options would
have expired but for this extension and (2) the
15th day of the third month following the month in which
Mr. Bradys right to exercise the options would have
expired but for this extension.
Pursuant to the terms of Mr. Bradys agreement, he
received $120,000 (including payroll withholding tax) as a
post-employment payment and his options to purchase
83,334 shares of common stock became fully vested on
December 31, 2006 and may be exercised until
December 31, 2007.
Indemnity
Agreements
We have entered into indemnification agreements with each of our
directors. In addition, we have entered into indemnification
agreements with certain of our executive officers in their
capacity as our executive officers and as directors of certain
of our subsidiaries. Each indemnification agreement provides
that we will, subject to certain exceptions, indemnify the
indemnified person in respect of any and all expenses incurred
as a result of any threatened, pending or completed action, suit
or proceedings involving the indemnified person and relating to
the indemnified persons service as an executive officer or
director of ours. We will also indemnify the indemnified person
to the fullest extent as may be provided under the
non-exclusivity provisions of our bylaws and Delaware law. The
indemnification period lasts for as long as the indemnified
person is an executive officer or director of ours
37
and continues if the indemnified person is subject to any
possible claim or threatened, pending or completed action, suit
or proceeding, whether civil, criminal, arbitration,
administrative or investigative, by reason of fact that the
indemnified person was serving in such capacity. Upon request,
we must advance all expenses incurred by the indemnified person
in connection with any proceeding, provided the indemnified
person undertakes to repay the advanced amounts if it is
determined ultimately that the indemnified person is not
entitled to be indemnified under any provision of the
indemnification agreement, our bylaws, Delaware law or otherwise.
Policies
and Procedures for Related Person Transactions
Pursuant to the Audit Committees charter and applicable
Nasdaq rules, the Audit Committee is responsible for reviewing
and approving all related party transactions (as defined by the
Nasdaq rules).
POTENTIAL
SERVICE PAYMENTS UPON TERMINATION OR CHANGE OF CONTROL
The following tables below reflect the amount of compensation
payable to each Named Executive Officer in the event of
termination of such executives employment or upon a change
of control based on the applicable provisions of the Named
Executive Officers employment agreement, stock option
award agreements, RSU award agreements and SAR award agreements.
The amount of compensation payable to each Named Executive
Officer upon voluntary termination, termination without cause,
change of control, disability or death is shown below for
Messrs. J. Eisenberg, Costantini, M. Eisenberg, Stolte,
Hume and Brady. All severance payments to the Named Executive
Officers are conditioned on the execution of a release
discharging the Company of any claims or liabilities in relation
to the Named Executive Officers employment with the
Company.
Change of
Control Triggers
For the purposes of the severance payments, change of
control means:
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the Companys merger or consolidation with another
corporation or entity;
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the Companys transfer of all or substantially all of its
assets to another person, corporation, or other entity; or
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a sale of the Companys stock in a single transaction or
series of related transactions that results in the holders of
the outstanding voting power of the Company immediately prior to
such transaction or series of transactions owning less than a
majority of the outstanding voting securities for the election
of directors of the surviving company or entity immediately
following such transaction or series of transactions (other than
any registered, underwritten public offering by the Company of
the Companys stock or pursuant to any stock-based
compensation plan of the Company).
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For purposes of the stock option awards, a change of
control means the purchase or other acquisition by any
person, entity or group of persons, within the meaning of
Section 13(d) or 14(d) of the Exchange Act, or any
comparable successor provisions, of:
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ownership of more than 50% or more of the combined voting power
of the Companys then outstanding voting securities
entitled to vote generally; or
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all or substantially all of the direct and indirect assets of
the Company and its subsidiaries, other than by a person, firm,
entity or group, which together with its affiliates, prior to
such purchase or other acquisition, owned at least 50% of the
outstanding common equity of the Company.
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For purposes of the RSU awards and SAR awards, change of
control means a change in control event that
meets the requirements of Section 409A of the Code, as
amended from time to time, including any proposed and final
regulations and other guidance issued thereunder by the
Department of the Treasury
and/or the
Internal Revenue Service.
Post-Termination
Covenants
The RSU awards and SAR awards are subject to a non-competition
provision restricting the Named Executive Officers
employment with a competitor for six months following
termination. The RSU awards and SAR awards
38
are also subject to a non-solicitation provision restricting the
Named Executive Officer from soliciting certain business or the
recruiting certain of the Companys employees for one year
following termination. If the Company determines that the Named
Executive Officer violated these provisions of the RSU award or
SAR award, the Named Executive Officer will forfeit all rights
to any RSUs or SARs under the awards and will have to return to
the Company the value of any RSUs or SARs awarded to the Named
Executive Officer by the Company. The Named Executive Officers
are also subject to post-termination non-competition,
non-solicitation and confidentiality provisions in their
employment agreements. See Certain Relationships and
Transactions with Related Persons Employment
Agreements.
Jerome B.
Eisenberg
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Voluntary
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Termination
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Executive Payments
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with Good
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Termination
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For Cause
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Change in
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Upon Termination
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Reason
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Without Cause
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Termination
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Control(1)
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Severance payments
Termination as Chairman and CEO(2)
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$
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643,284
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$
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643,284
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$
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$
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643,284
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Severance payments
Termination as CEO(3)
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488,284
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488,284
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488,284
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Severance payments
Termination as Chairman(4)
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710,000
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155,000
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Stock options (unvested and
accelerated)(5)
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121,333
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Time-based RSUs (unvested and
accelerated)(6)
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1,317,126
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Performance-based RSUs (unvested
and accelerated)(7)
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1,317,126
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Performance-based SARs (unvested
and accelerated)(8)
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(1) |
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Assumes an effective date of a change of control on
December 31, 2006. |
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(2) |
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Severance Payment Termination as Chairman and
CEO: Under the terms of his employment agreement,
in the event Mr. Eisenbergs employment is
involuntarily terminated without cause by the Company, he
voluntarily terminates his employment as our Chief Executive
Officer and Chairman of the Board with good reason or his
employment is not continued on substantially equivalent economic
terms, duties and responsibilities following a change of
control, he will be entitled to one year of his base salary in
effect at the time of such termination payable in regular
installments consistent with our payroll practices. He is also
entitled to continued health insurance coverage for one year
immediately following such termination at then existing employee
contribution rates, representing a benefit valued at $4,284 at
December 31, 2006. Mr. Eisenberg is also entitled to
receive a pro rata portion of his target bonus for the fiscal
year in which such termination occurs, estimated here to be
$284,000. |
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(3) |
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Severance Payments Termination as
CEO: Under the terms of his employment agreement,
in the event Mr. Eisenbergs employment as Chief
Executive Officer is terminated by us without cause, he
voluntarily terminates his employment as our Chief Executive
Officer with good reason or his employment is not continued on
substantially equivalent economic terms, duties and
responsibilities following a change of control, but in either
case continues to serve as our Chairman of the Board, he will be
entitled to severance payments for a period of one year
immediately following such termination payable in regular
installments consistent with our payroll practices equal to the
difference between (a) his annual base salary at the time
of such termination and (b) his annual compensation of
$155,000 while serving only as our Chairman of the Board. He is
also entitled to continued health insurance coverage for one
year immediately following such termination at then existing
employee contribution rates, representing a benefit valued at
$4,284 at December 31, 2006. Mr. Eisenberg is also
entitled to receive a pro rata portion of his target bonus for
the fiscal year in which such termination occurs, estimated here
to be $284,000. |
39
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(4) |
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Severance Payments Termination as
Chairman: Under his employment agreement, in the
event
Mr. Eisenbergs employment as our Chairman of the
Board is terminated by the Company without cause or his
employment is not continued on substantially equivalent economic
terms, duties and responsibilities following a change of
control, he will be entitled to continue to receive his then
base salary at the time of such termination for the period equal
to the greater of (a) one year immediately following such
termination and (b) the remainder of the term of his
employment agreement, payable in regular installments consistent
with our payroll practices; provided, however that if
Mr. Eisenberg has already received any severance payments
pursuant to his employment agreement, the amounts received would
be offset on a dollar for dollar basis, pursuant to this
severance payment. |
|
(5) |
|
Stock Options (unvested and
accelerated): Under his employment agreement and
the applicable award agreement, in the event of a change of
control having a value in excess of $6.045 per share, he
will be entitled to immediate vesting on all unvested stock
options. As of December 31, 2006, Mr. Eisenberg had
8,333 and 16,667 unvested stock options with exercise prices of
$3.38 and $4.26 per share, respectively. |
|
(6) |
|
Time-Based RSUs: Under his employment
agreement and the applicable award agreement, in the event of a
change of control having a value in excess of $6.045 per
share, Mr. Eisenberg will be entitled to immediate vesting
on all unvested time-based RSU awards. As of December 31,
2006, he had 149,334 unvested time-based RSUs with a value based
on the closing price of the Companys common stock of
$8.82 per share as of December 29, 2006, the last
trading day of 2006. |
|
(7) |
|
Performance-Based RSUs: Under his employment
agreement and the applicable award agreement, in the event of a
change of control having a value in excess of $6.045 per
share, Mr. Eisenberg will be entitled to immediate vesting
on all unvested performance-based RSU awards, without regard to
the achievement of applicable performance targets. As of
December 31, 2006, he had 149,334 unvested
performance-based RSUs with a value based on the closing price
of the Companys common stock of $8.82 per share as of
December 29, 2006, the last trading day of 2006. These
performance-based RSUs consist of 49,778 performance-based RSUs
that are considered granted for accounting purposes as they
relate to fiscal 2006 operational and performance targets that
have been established by the board of directors or the
Compensation Committee, which vest in April 2007 and 99,556
performance-based RSUS related to performance targets for fiscal
2007 and 2008 that are not considered granted for accounting
purposes as neither board of directors nor the Compensation
Committee has yet established performance targets for fiscal
2007 and 2008. |
|
(8) |
|
Performance-Based SARs: Under his employment
agreement and the applicable award agreement, in the event of a
change of control having a value in excess of $6.045 per
share, Mr. Eisenberg will be entitled to immediate vesting
on all unvested performance-based SAR awards, without regard to
the achievement of applicable performance targets. As of
December 31, 2006, he had 150,000 unvested
performance-based SAR awards. These performance-based SAR awards
consist of 50,000 performance-based SARs that are considered
granted for accounting purposes as they relate to fiscal 2006
performance targets that have been established by the board of
directors or the Compensation Committee and 100,000
performance-based SARs related to performance targets for fiscal
2007 and 2008 that are not considered granted for accounting
purposes as neither the board of directors nor the Compensation
Committee has yet established operational and performance
targets for fiscal 2007 and 2008. The potential amounts earned
by Mr. Eisenberg as a result of the immediate vesting of
these performance-based SAR awards following a change of control
are not shown in the table as the closing price of the
Companys common stock of $8.82 per share as of
December 29, 2006, the last trading day of 2006, was lower
than the SAR base price of $11.00 per share. |
40
Robert
Costantini
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive Payments
|
|
Voluntary
|
|
|
Termination
|
|
|
For Cause
|
|
|
Change in
|
|
Upon Termination
|
|
Termination
|
|
|
Without Cause
|
|
|
Termination
|
|
|
Control(1)
|
|
|
Severance payments(2)
|
|
$
|
|
|
|
$
|
275,686
|
|
|
$
|
|
|
|
$
|
275,686
|
|
Time-based RSUs (unvested and
accelerated)(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
102,903
|
|
Time-based SARs (unvested and
accelerated)(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance-based RSUs (unvested
and accelerated)(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
102,903
|
|
Performance-based SARs (unvested
and accelerated)(6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Assumes an effective date of a change of control on
December 31, 2006. |
|
(2) |
|
Severance Payments: Under the terms of his
employment agreement, in the event Mr. Costantinis
employment is involuntarily terminated without cause by the
Company or if his employment is not continued on substantially
equivalent terms following a change of control, he will be
entitled to one year of his base salary in effect at the time of
such termination payable in regular installments consistent with
our payroll practices. He is also entitled to continued health
insurance coverage for one year immediately following such
termination at then existing employee contribution rates,
representing a benefit valued at $5,686 at December 31,
2006. |
|
(3) |
|
Time-Based RSUs: Under his employment
agreement and the applicable award agreement, in the event of a
change of control having a value in excess of $6.045 per
share, Mr. Costantini will be entitled to immediate vesting
on all unvested time-based RSU awards. As of December 31,
2006, he had 11,667 unvested time-based RSUs with a value based
on the closing price of the Companys common stock of
$8.82 per share as of December 29, 2006, the last
trading day of 2006. |
|
(4) |
|
Time-Based SARs: Under his employment
agreement and the applicable award agreement, in the event of a
change of control having a value in excess of $6.045 per
share, Mr. Costantini will be entitled to immediate vesting
on all unvested time-based SAR awards. As of December 31,
2006, he had 66,667 unvested time-based SARs. The potential
amounts earned by Mr. Costantini as a result of the
immediate vesting of these time-based SAR awards following a
change of control are not shown in the table as the closing
price of the Companys common stock of $8.82 per share
as of December 29, 2006, the last trading day of 2006, was
lower than the SAR base price of $11.00 per share. |
|
(5) |
|
Performance-Based RSUs: Under his employment
agreement and the applicable award agreement, in the event of a
change of control having a value in excess of $6.045 per
share, Mr. Costantini will be entitled to immediate vesting
on all unvested performance-based RSU awards, without regard to
the achievement of applicable performance targets. As of
December 31, 2006, he had 11,667 unvested performance-based
RSUs with a value based on the closing price of the
Companys common stock of $8.82 per share as of
December 29, 2006, the last trading day of 2006. These
performance-based RSUs consist of 3,888 performance-based RSUs
that are considered granted for accounting purposes as they
relate to fiscal 2006 performance targets that have been
established by the board of directors or the Compensation
Committee, which vest in April 2007 and 7,779 performance-based
RSUs related to performance targets for fiscal 2007 and 2008
that are not considered granted for accounting purposes as
neither the board of directors nor the Compensation Committee
has yet established performance targets for fiscal 2007 and 2008. |
|
(6) |
|
Performance-Based SARs: Under his employment
agreement and the applicable award agreement, in the event of a
change of control having a value in excess of $6.045 per
share, Mr. Costantini will be entitled to immediate vesting
on all unvested performance-based SAR awards, without regard to
the achievement of applicable performance targets. As of
December 31, 2006, he had 66,667 unvested performance-based
SAR awards. These performance-based SAR awards consist of 22,222
performance-based SARs that are considered granted for
accounting purposes as they relate to fiscal 2006 performance
targets that have been established by the board of directors or
the Compensation Committee and 44,445 performance-based SARs
related to performance targets for fiscal 2007 and 2008 that are
not considered granted for accounting purposes as neither |
41
|
|
|
|
|
the board of directors nor the Compensation Committee has yet
established performance targets for fiscal 2007 and 2008. The
potential amounts earned by Mr. Costantini as a result of
the immediate vesting of these performance-based SAR awards
following a change of control are not shown in the table as the
closing price of the Companys common stock of
$8.82 per share as of December 29, 2006, the last
trading day of 2006, was lower than the SAR base price of
$11.00 per share. |
Marc
Eisenberg
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Voluntary
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination
|
|
|
|
|
|
|
|
|
|
|
Executive Payments
|
|
With Good
|
|
|
Termination
|
|
|
For Cause
|
|
|
Change in
|
|
Upon Termination
|
|
Reason
|
|
|
Without Cause
|
|
|
Termination
|
|
|
Control(1)
|
|
|
Severance payments(2)
|
|
$
|
321,096
|
|
|
$
|
321,096
|
|
|
$
|
|
|
|
$
|
321,096
|
|
Stock options (unvested and
accelerated)(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
121,333
|
|
Time-based RSUs (unvested and
accelerated)(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
987,840
|
|
Performance-based RSUs (unvested
and accelerated)(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
987,840
|
|
Performance-based SARs (unvested
and accelerated)(6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Assumes an effective date of a change of control on
December 31, 2006. |
|
(2) |
|
Severance Payments: Under the terms of his
employment agreement, in the event Mr. Eisenbergs
employment is involuntarily terminated without cause by the
Company or he voluntarily terminates his employment due to a
change in material status or if his employment is not continued
on substantially equivalent economic terms following a change of
control, he will be entitled to one year of his base salary in
effect at the time of such termination payable in regular
installments consistent with our payroll practices. He is also
entitled to continued health insurance coverage for one year
immediately following such termination at then existing employee
contribution rates, representing a benefit valued at $6,096 at
December 31, 2006. In the event Mr. Eisenbergs
employment is involuntarily terminated by the Company due to a
change of control, he will be entitled to the same severance
payments and health insurance coverage as described above. |
|
(3) |
|
Stock Options (unvested and
accelerated): Under his employment agreement and
the applicable award agreement, in the event of a change of
control having a value in excess of $6.045 per share,
Mr. Eisenberg will be entitled to immediate vesting on all
unvested stock options. As of December 31, 2006, he had
8,333 and 16,667 unvested stock options with exercise prices of
$3.38 and $4.26 per share, respectively. |
|
(4) |
|
Time-Based RSUs: Under his employment
agreement and the applicable award agreement, in the event of a
change of control having a value in excess of $6.045 per
share, Mr. Eisenberg will be entitled to immediate vesting
on all unvested time-based RSU awards. As of December 31,
2006, he had 112,000 unvested time-based RSUs with a value based
on the closing price of the Companys common stock of
$8.82 per share as of December 29, 2006, the last
trading day of 2006. |
|
(5) |
|
Performance-Based RSUs: Under his employment
agreement and the applicable award agreement, in the event of a
change of control having a value in excess of $6.045 per
share, Mr. Eisenberg will be entitled to immediate vesting
on all unvested performance-based RSU awards, without regard to
the achievement of applicable performance targets. As of
December 31, 2006, he had 112,000 unvested
performance-based RSUs with a value based on the closing price
of the Companys common stock of $8.82 per share as of
December 29, 2006, the last trading day of 2006. These
performance-based RSUs consist of 37,333 performance-based RSUs
that are considered granted for accounting purposes as they
relate to fiscal 2006 performance targets that have been
established by the board of directors or the Compensation
Committee, which vest in April 2007 and 74,667 performance-based
RSUs related to operational and performance targets for fiscal
2007 and 2008 that are not considered granted for accounting
purposes as neither the board of directors nor the Compensation
Committee has yet established performance targets for fiscal
2007 and 2008. |
42
|
|
|
(6) |
|
Performance-Based SARs: Under his employment
agreement and the applicable award agreement, in the event of a
change of control having a value in excess of $6.045 per
share, Mr. Eisenberg will be entitled to immediate vesting
on all unvested performance-based SAR awards, without regard to
the achievement of applicable performance targets. As of
December 31, 2006, he had 130,000 unvested
performance-based SAR awards. These performance-based SAR awards
consist of 43,332 performance-based RSUs that are considered
granted for accounting purposes as they relate to fiscal 2006
performance targets that have been established by the board of
directors or the Compensation Committee and 86,668
performance-based RSUs related to performance targets for fiscal
2007 and 2008 that are not considered granted as neither the
board of directors nor the Compensation Committee has yet
established operational and performance targets for fiscal 2007
and 2008. The potential amounts earned by Mr. Eisenberg as
a result of the immediate vesting of these performance-based SAR
awards following a change of control are not shown in the table
as the closing price of the Companys common stock of
$8.82 per share, as of December 29, 2006, the last
trading day of 2006, was lower than the SAR base price of $11.00
per share. |
Emmett
Hume
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Voluntary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive Payments
|
|
with Good
|
|
|
Termination
|
|
|
For Cause
|
|
|
Change in
|
|
|
|
|
Upon Termination
|
|
Reason
|
|
|
Without Cause
|
|
|
Termination
|
|
|
Control(1)
|
|
|
|
|
|
Severance payments(2)
|
|
$
|
128,333
|
|
|
$
|
128,333
|
|
|
$
|
|
|
|
$
|
128,333
|
(2)
|
|
|
|
|
Stock options (unvested and
accelerated)(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
133,024
|
|
|
|
|
|
Time-based RSUs (unvested and
accelerated)(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32,933
|
|
|
|
|
|
Performance-based RSUs (unvested
and accelerated)(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32,933
|
|
|
|
|
|
|
|
|
(1) |
|
Assumes an effective date of a change of control on
December 31, 2006. |
|
(2) |
|
Severance Payments: Under the terms of his
employment agreement, in the event Mr. Humes
employment is involuntarily terminated without cause by the
Company or he voluntarily terminates his employment for good
reason or in the event of a change of control, if the successor
entity does not continue his employment under the terms of his
employment agreement, he will be entitled to the greater of
(a) six months of his base salary in effect at the time of
such termination or (b) his base salary payable for the
remainder of his term of employment plus a pro rata portion of
his bonus, payable in regular installments consistent with our
payroll practices. For purposes of this table, a termination
date of December 31, 2006 and remaining term of employment
of seven months is assumed. The amounts set forth in the table
do not include a bonus component because the bonus is
discretionary. |
|
(3) |
|
Stock Options (unvested and
accelerated): Under his employment agreement and
the applicable award agreement, in the event of a change of
control having a value in excess of $6.045 per share,
Mr. Hume will be entitled to immediate vesting on all
unvested stock options. As of December 31, 2006, he had
29,172 unvested stock options with an exercise price of
$4.26 per share. |
|
(4) |
|
Time-Based RSUs: Under his employment
agreement and the applicable award agreement, in the event of a
change of control having a value in excess of $6.045 per
share, Mr. Hume will be entitled to immediate vesting on
all unvested time-based RSU awards. As of December 31,
2006, he had 3,734 unvested time-based RSUs with a value based
on the closing price of the Companys common stock of
$8.82 per share as of December 29, 2006, the last
trading day of 2006. |
|
(5) |
|
Performance-Based RSUs: Under his employment
agreement and the applicable award agreement, in the event of a
change of control having a value in excess of $6.045 per
share, Mr. Hume will be entitled to immediate vesting on
all unvested performance-based RSU awards, without regard to the
achievement of applicable performance targets. As of
December 31, 2006, he had 3,734 unvested performance-based
RSUs with a value based on the closing price of the
Companys common stock of $8.82 per share as of
December 29, 2006, the last trading day of 2006. |
43
John J.
Stolte, Jr.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive Payments
|
|
Voluntary
|
|
|
Without
|
|
|
For Cause
|
|
|
Change in
|
|
|
|
|
|
|
|
Upon Termination
|
|
Termination
|
|
|
Cause
|
|
|
Termination
|
|
|
Control(1)
|
|
|
Death
|
|
|
Disability
|
|
|
Severance payments(2)
|
|
$
|
|
|
|
$
|
225,000
|
|
|
$
|
|
|
|
$
|
225,000
|
|
|
$
|
225,000
|
|
|
$
|
225,000
|
|
Stock options (unvested and
accelerated)(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
48,533
|
|
|
|
|
|
|
|
|
|
Time-based RSUs (unvested and
accelerated)(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
535,082
|
|
|
|
|
|
|
|
|
|
Performance-based RSUs (unvested
and accelerated)(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
535,082
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Assumes an effective date of a change of control on
December 31, 2006. |
|
(2) |
|
Severance Payments: Under the terms of his
employment agreement, in the event Mr. Stoltes
employment is (a) involuntarily terminated without cause by
the Company, (b) terminated due to death or disability or
(c) not continued on substantially equivalent terms
following a change of control, he will be entitled to one year
of his base salary in effect at the time of such termination
payable in regular installments consistent with our payroll
practices. |
|
(3) |
|
Stock Options (unvested and
accelerated): Under his employment agreement and
the applicable award agreement, in the event of a change of
control having a value in excess of $6.045 per share,
Mr. Stolte will be entitled to immediate vesting on all
unvested stock options. As of December 31, 2006, he had
3,333 and 6,667 unvested stock options with exercise prices of
$3.38 and $4.26 per share, respectively. |
|
(4) |
|
Time-Based RSUs: Under his employment
agreement and the applicable award agreement, in the event of a
change of control having a value in excess of $6.045 per
share, Mr. Stolte will be entitled to immediate vesting on
all unvested time-based RSU awards. As of December 31,
2006, he had 60,667 unvested time-based RSUs with a value based
on the closing price of the Companys common stock of
$8.82 per share as of December 29, 2006, the last
trading day of 2006. |
|
(5) |
|
Performance-Based RSUs: Under his employment
agreement and the applicable award agreement, in the event of a
change of control having a value in excess of $6.045 per
share, Mr. Stolte will be entitled to immediate vesting on
all unvested performance-based RSU awards, without regard to the
achievement of applicable performance targets. As of
December 31, 2006, he had 60,667 unvested performance-based
RSUs with a value based on the closing price of the
Companys common stock of $8.82 per share as of
December 29, 2006, the last trading day of 2006. |
John P.
Brady
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive Payments
|
|
Voluntary
|
|
|
Termination
|
|
|
For Cause
|
|
|
Change in
|
|
Upon Termination
|
|
Termination
|
|
|
Without Cause
|
|
|
Termination
|
|
|
Control(1)
|
|
|
Time-based RSUs (unvested and
accelerated)(2)
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
13,715
|
|
Performance-based RSUs (unvested
and accelerated)(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13,715
|
|
|
|
|
(1) |
|
Assumes an effective date of a change of control on
December 31, 2006. |
|
(2) |
|
Time-Based RSUs: Under his employment
agreement and the applicable award agreement, in the event of a
change of control having a value in excess of $6.045 per
share, Mr. Brady will be entitled to immediate vesting on
all unvested time-based RSU awards. As of December 31,
2006, he had 1,555 unvested time-based RSUs with a value based
on the closing price of the Companys common stock of
$8.82 per share as of December 29, 2006, the last
trading day of 2006. |
|
(3) |
|
Performance-Based RSUs: Under his employment
agreement and the applicable award agreement, in the event of a
change of control having a value in excess of $6.045 per
share, Mr. Brady will be entitled to |
44
|
|
|
|
|
immediate vesting on all unvested performance-based RSU awards,
without regard to the achievement of applicable performance
targets. As of December 31, 2006, he had 1,555 unvested
performance-based RSUs with a value based on the closing price
of the Companys common stock of $8.82 per share as of
December 29, 2006, the last trading day of 2006. |
PROPOSAL TO
RATIFY THE APPOINTMENT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
(Proposal 2)
The Audit Committee has appointed the firm of
Deloitte & Touche LLP (D&T) as our
independent registered public accounting firm for the fiscal
year ending December 31, 2007, subject to the approval of
the shareholders. D&T has acted as our independent
registered public accounting firm since 2005.
Before the Audit Committee appointed D&T, it carefully
considered the independence and qualifications of that firm,
including their performance in prior years and their reputation
for integrity and for competence in the fields of accounting and
auditing. We expect that representatives of D&T will be
present at the Annual Meeting to respond to appropriate
questions and to make a statement if they desire to do so.
Principal
Accountant Fees
The following table sets forth the aggregate fees for
professional services provided by D&T for the fiscal years
ended December 31, 2006 and 2005, all of which were
approved by the Audit Committee:
|
|
|
|
|
|
|
|
|
|
|
Year Ended
|
|
|
|
December 31,
|
|
|
|
2006
|
|
|
2005
|
|
|
Audit Fees
|
|
$
|
375,000
|
|
|
$
|
350,358
|
|
Audit-Related Fees
|
|
|
1,126,024
|
|
|
|
374,000
|
|
All Other Fees
|
|
|
2,000
|
|
|
|
2,000
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
1,503,024
|
|
|
$
|
726,358
|
|
|
|
|
|
|
|
|
|
|
Audit Fees. Consisted principally of fees for
professional services for the audit of the Companys annual
financial statements and for the review of quarterly financial
statements.
Audit-Related Fees. Consisted of professional
fees associated with our initial public offering, including the
audit of the Companys 2004 financial statements and the
review of its quarterly financial information for 2004 and
services rendered in connection with registration statements on
Form S-8 filed in 2006.
All Other Fees. Represents fees for
subscription services to professional literature databases.
There were no tax services provided by D&T in fiscal year
2006 and 2005.
Audit
Committee Pre-Approval Policies and Procedures
The Audit Committee is responsible for the appointment and
compensation of, and oversight of the work performed by, our
independent registered public accounting firm. The Audit
Committee pre-approves all audit (including audit-related)
services and permitted non-audit services provided by our
independent registered public accounting firm in accordance with
the pre-approval policies and procedures established by the
Audit Committee.
The Audit Committee annually approves the scope and fee
estimates for the annual audit to be performed by our
independent registered public accounting firm for the next
fiscal year. With respect to other permitted services,
management defines and presents specific projects for which the
advance approval of the Audit Committee is requested. The Audit
Committee pre-approves specific engagements and projects on a
fiscal year basis, subject to individual project thresholds and
annual thresholds. The Chief Financial Officer reports to the
Audit Committee regarding the aggregate fees charged by our
independent registered public accounting firm compared to the
pre-approved amounts.
45
The board of directors recommends that you vote FOR
the proposal to ratify the appointment of D&T as our
independent registered public accounting firm, which is
presented as Proposal 2.
OTHER
MATTERS
The board of directors does not know of any other matters that
may be presented at the meeting. In the event of a vote on any
matters other than those referred to in the accompanying Notice
of 2007 Annual Meeting of Shareholders, proxies in the
accompanying form will be voted in accordance with the judgment
of the persons voting such proxies.
SECTION 16(a)
BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act requires our
executive officers and directors, and persons who own more than
ten percent of a registered class of our equity securities, to
file reports of ownership and changes in ownership on
Forms 3, 4 and 5 with the SEC and Nasdaq.
Based on our review of the copies of such forms that we have
received and written representations from certain reporting
persons confirming that they were not required to file
Forms 5 for specified fiscal years, we believe that all our
executive officers, directors and greater than ten percent
beneficial owners complied with applicable SEC filing
requirements under Section 16(a) during fiscal 2006.
ANNUAL
REPORT
Our Annual Report to Shareholders, including the Annual Report
on
Form 10-K
and financial statements, for the fiscal year ended
December 31, 2006, was mailed to shareholders with this
proxy statement.
SHAREHOLDER
PROPOSALS FOR ANNUAL MEETING IN 2008
To be eligible for inclusion in our proxy statement and the
proxy card, shareholder proposals for the 2008 Annual Meeting of
Shareholders must be received on or before December 6, 2007
by the Office of the Secretary at our headquarters, 2115 Linwood
Avenue, Suite 100, Fort Lee, New Jersey 07024. In
addition, our By-Laws require a shareholder desiring to propose
any matter for consideration of the shareholders at the 2008
Annual Meeting of Shareholders to notify the Companys
Secretary in writing at the address listed in the preceding
sentence on or after January 12, 2008 and on or before
February 11, 2008. If the number of directors to be elected
to the board at the 2008 Annual Meeting of Shareholders is
increased and we do not make a public announcement naming all of
the nominees for director or specifying the increased size of
the board on or before February 1, 2008, a shareholder
proposal with respect to nominees for any new position created
by such increase will be considered timely if received by our
Secretary not later than the tenth day following our public
announcement of the increase.
EXPENSES
OF SOLICITATION
We will bear the cost of the solicitation of proxies. In
addition to mail and
e-mail,
proxies may be solicited personally, or by telephone or
facsimile, by a few of our regular employees without additional
compensation. We will reimburse brokers and other persons
holding stock in their names, or in the names of nominees, for
their expenses for forwarding proxy materials to principals and
beneficial owners and obtaining their proxies.
ADMISSION
TO THE 2007 ANNUAL MEETING
An admission ticket (or other proof of stock ownership) and
proper identification will be required for admission to the
Annual Meeting of Shareholders on May 11, 2007. Admission
tickets are printed on the outside back cover of this Notice of
Annual Meeting and Proxy Statement. To enter the meeting, you
will need an admission ticket or other proof that you are a
shareholder. If you hold your shares through a broker or
nominee, you will need to bring either a copy of the voting
instruction card provided by your broker or nominee, or a copy
of a brokerage statement showing your ownership as of the
March 26, 2007 record date.
46
Exhibit A
ORBCOMM
INC.
Audit
Committee
Charter
General
The purpose of this Charter is to set forth the composition,
authority and responsibilities of the Audit Committee (the
Committee) of the Board of Directors of ORBCOMM Inc.
(the Company).
Composition
The members of the Committee shall consist of at least three
members of the Board who shall be designated by the Board, on
the recommendation of the Nominating and Corporate Governance
Committee of the Board, in accordance with the Companys
Bylaws and Guidelines of Corporate Governance, and shall serve
at the discretion of the Board. One member of the Committee
shall be designated Chair of the Committee.
All members of the Committee shall meet the independence and
experience requirements established by the Board and applicable
laws, regulations and stock exchange listing requirements,
subject to applicable phase-in rules. All members of the
Committee shall be able to read and understand fundamental
financial statements. No member of the Committee shall have
participated in the preparation of the financial statements of
the Company in the past three years. At least one member of the
Committee shall in the judgment of the Board be an audit
committee financial expert as defined by the rules and
regulations of the Securities and Exchange Commission (the
Commission), and at least one member (who may also
serve as the audit committee financial expert) shall in the
judgment of the Board meet the financial sophistication standard
as defined by the requirements of The Nasdaq Stock Market, LLC
(Nasdaq).
No member of the Committee may serve on the audit committees of
more than two other publicly traded companies at the same time.
For this purpose, service on the audit committees of a parent
and its majority-owned subsidiaries counts as service on a
single audit committee.
Authority
and Responsibilities
General. The general purpose of the Committee
is to assist the Board in fulfilling its oversight
responsibilities with respect to (1) the integrity of the
Companys financial statements and internal controls,
(2) the accounting and financial reporting process of the
Company, (3) the audits of the Companys financial
statements, (4) the qualifications and independence of the
Companys independent auditor (including the engagement of
the independent auditor), and (5) the Companys
compliance with legal and regulatory requirements, including
those relating to accounting and financial reporting, and
ethical obligations.
The Committee shall preapprove all audit (including
audit-related) services and permitted non-audit services
(including the fees and terms thereof) to be performed for the
Company by the independent auditors, subject to the de
minimis exceptions for non-audit services described in
Section 10A(i)(1)(B) of the Securities Exchange Act of
1934, as amended, that are approved by the Committee prior to
the completion of the audit. The Committee may delegate to one
or more of its members the authority to preapprove audit,
audit-related and permitted non-audit services, provided that
decisions of any such member to preapprove shall be presented to
the full Committee at its next scheduled meeting.
Financial Statement and Disclosure
Matters. The Committee shall:
1. Meet to review and discuss with management and the
independent auditor the Companys annual audited financial
statements and other financial data and disclosures to be
included in the Companys Annual Reports on Form
10-K,
including reviewing the results of the independent
auditors audit of such financial statements, and
recommending to the Board whether the audited financial
statements should be included in the
Form 10-K
Reports.
A-1
2. Meet to review and discuss with management and the
independent auditor the Companys quarterly financial
statements and other financial data and disclosures to be
included in the Companys Quarterly Reports on Form
10-Q,
including reviewing the results of the independent
auditors review of such financial statements.
3. Review and discuss with management and the independent
auditor the following: any major issues regarding accounting
principles and financial statement presentations, including any
significant changes in the Companys selection or
application of accounting principles, and analyses prepared by
management
and/or the
independent auditor setting forth significant financial
reporting issues and judgments made in connection with the
preparation of the Companys financial statements,
including analyses of the effects on the financial statements of
alternative methods under generally accepted accounting
principles; any major issues as to the adequacy of the
Companys internal controls, and any steps adopted in light
of any material control deficiencies; and managements
annual evaluation of internal controls over financial reporting
and quarterly evaluation of any material changes in such
controls, and the independent auditors attestation report
on managements annual assessment.
4. Review and discuss in a timely manner (but at least
annually) reports from the independent auditor regarding:
a) All critical accounting policies and practices to be
used.
b) All alternative treatments of financial information
within GAAP that have been discussed with management,
ramifications of the use of such alternative treatments and
related disclosures, and the treatment preferred by the
independent auditor.
c) All other material written communications between the
independent auditor and management, such as any management
letter or schedule of unadjusted audit differences.
5. Generally review and discuss with management the type
and presentation of information to be disclosed in the
Companys earnings press releases, including the use of
non-GAAP information, as well as the type and presentation of
financial information and earnings guidance to be provided to
analysts and rating agencies; such discussions may be of a
general nature and need not cover the specific information
and/or
presentations to be given.
6. Review and discuss with management and the independent
auditor the effect of regulatory and accounting initiatives, as
well as off-balance sheet structures, on the Companys
financial statements.
7. Review and discuss with management the steps management
has taken to assess, monitor and control the Companys
strategic, operational, financial and compliance risks,
including guidelines and policies to govern the process by which
such risk assessment and risk management are undertaken.
8. Discuss with the independent auditor the matters
required to be discussed under American Institute of Certified
Public Accountants Statement on Auditing Standards No. 61,
Communications with Audit Committees, relating to
the conduct of the audit, including any difficulties encountered
in the course of the audit work, any restrictions on the scope
of activities or access to requested information, and any
significant disagreements with management.
9. Review disclosures made to the Committee by the
Companys Chief Executive Officer and Chief Financial
Officer in connection with their certification process for the
Companys Annual and Quarterly Reports on
Form 10-K
and
Form 10-Q
regarding any significant deficiencies or material weaknesses in
the design or operation of internal controls, or any fraud
involving management or other employees having a significant
role in the Companys internal controls.
10. Ensure that a public announcement of the Companys
receipt of an audit opinion that contains a going concern
qualification is made promptly.
Oversight of Independent Auditor. The
Committee shall have the sole authority to appoint or replace
the independent auditor; provided, however, that this
shall not preclude seeking shareholder ratification of such
appointment. The Committee shall be directly responsible for the
compensation, retention and oversight of the work
A-2
of the independent auditor (including the resolution of any
disagreements between management and the independent auditor)
for the purpose of preparing or issuing an audit report or
performing other audit, review or attest services for the
Company. The independent auditor shall report directly to the
Committee.
In addition, the Committee shall:
1. Obtain and review a report from the independent auditor
at least annually regarding (a) the independent
auditors internal quality control procedures, (b) any
material issues raised by the most recent internal quality
control review, or peer review, of the firm, or by any inquiry
or investigation by governmental or professional authorities
within the preceding five years relating to one or more
independent audits carried out by the firm, (c) any steps
taken to deal with any such issues, and (d) all
relationships between the independent auditor and the Company.
2. Evaluate and report to the Board on its conclusions as
to the qualifications, performance and independence of the
independent auditor, including considering whether the
auditors quality controls are adequate and whether the
provision of permitted non-audit services is compatible with
maintaining the auditors independence, taking into account
the opinions of management.
3. Review and evaluate the lead partner of the independent
auditor team and ensure the regular rotation of the lead (or
coordinating) audit partner having primary responsibility for
the audit and the audit partner responsible for reviewing the
audit, as required by law.
4. Establish clear policies regarding the Companys
hiring of employees or former employees of the independent
auditor.
5. Meet with the independent auditor to discuss the
planning and staffing of the audit, including the attestation
report relating to internal controls over financial reporting.
6. Obtain from the independent auditor a formal written
statement delineating all relationships between the independent
auditor and the Company, consistent with Independence Standards
Board Standard No. 1. It is the responsibility of the
Committee to actively engage in a dialogue with the independent
auditor with respect to any disclosed relationships or services
that may impact the objectivity and independence of the auditor
and for the purposes of taking, or recommending that the full
board take, appropriate action to oversee the independence of
the outside auditor.
Compliance Oversight Responsibilities. The
Committee shall assist the Board in fulfilling its oversight
responsibilities with respect to the Companys compliance
with legal and regulatory requirements, including those relating
to accounting and financial reporting. In particular (and in
addition to the compliance oversight responsibilities set forth
elsewhere in this Charter), the Committee shall:
1. Oversee the adoption and maintenance of procedures to
ensure that all inquiries raised regarding compliance and ethics
matters receive prompt review by the Company, including, as
appropriate, the reporting of such matters to the Committee and
the Board.
2. Oversee the establishment and maintenance of a
comprehensive compliance and ethics program, including an ethics
and compliance training program for all employees, designed to
minimize the possibility of violations of the federal securities
and other laws by the Company.
3. Monitor the process for communicating to employees the
Companys Code of Conduct and the importance of compliance
therewith, including (a) the maintenance and periodic
review of the Code; (b) the maintenance and periodic review
of procedures for the receipt, retention and proper treatment of
complaints regarding accounting, internal controls (including
internal accounting controls) or auditing matters, which
procedures shall include provisions for the confidential,
anonymous submission by employees of reports or complaints
concerning potential violations of law or other misconduct and
concerns regarding questionable accounting, auditing or internal
control matters; and (c) assuring employees that no
retaliation or other negative action will be taken against any
employee because he or she submits any such report or complaint.
4. Review and approve all related party transactions (as
defined in the Nasdaq rules).
A-3
Committee Report. The Committee shall prepare
the Audit Committee report required by the Commissions
rules to be included in the Companys proxy statements.
Delegation
of Authority
The Committee may delegate authority to one or more members or
subcommittees when deemed appropriate, provided that the actions
of any such members or subcommittees shall be reported to the
full Committee no later than at its next scheduled meeting.
Counsel
and Other Advisors; Company Funding Obligations
The Committee shall have the authority, to the extent it deems
necessary or appropriate, to retain and terminate the retention
of independent legal counsel (which may be the Companys
usual outside counsel), or accounting or other advisors, to
assist the Committee in carrying out its responsibilities. The
Company shall provide for appropriate funding, as determined by
the Committee, to pay the independent auditor, to pay any such
counsel or other advisors retained by the Committee and to pay
ordinary administrative expenses of the Committee that are
necessary or appropriate in carrying out its duties.
Meetings;
Executive Sessions
The Committee shall meet as often as it deems necessary, but no
less frequently than quarterly. The Committee shall meet
periodically in separate executive sessions with management and
the independent auditor, and such counsel or other advisors to
the Committee, or other parties, as the Committee may determine.
In addition, the Committee may request any officer or other
employee of the Company, counsel to the Company, or any
representative of the independent auditor, to meet with the
Committee, with one or more members of the Committee, or with
counsel or another advisor to the Committee. Meeting agendas
will be prepared and provided in advance to the Committee,
together with appropriate briefing materials. The Committee
shall be governed by the same rules regarding meetings, action
without meetings, notice, waiver of notice, and quorum and
voting requirements as are applicable to the Board pursuant to
the Companys Bylaws.
Reports
to the Board; Minutes
The Committee shall make regular reports to the Board regarding
the Committees activities, including issues that arise
with respect to the quality or integrity of the Companys
financial statements, the Companys compliance with legal
or regulatory requirements and the performance and independence
of the independent auditor. Minutes of the meetings and other
actions of the Committee shall be prepared and submitted for
approval by the Committee and shall be furnished to the Board at
regular intervals.
Committee
Self-Assessment
The Committee shall conduct an annual self-assessment of its
performance with respect to its purposes and the authority and
responsibilities set forth in this Charter. The results of the
self-assessment shall be reported to the Board.
Committee
Charter
This Charter shall be subject to review and approval by the
Board. The Committee shall review this Charter annually and
adopt any changes deemed appropriate, subject to approval by the
Board.
Limitation
of Committees Role
While the Committee has the responsibilities and powers set
forth in this Charter, the fundamental responsibility for the
Companys financial statements and disclosures rests with
the Companys management.
Approved by the Board of Directors: August 30, 2006
Effective as of November 2, 2006
A-4
Exhibit B
ORBCOMM
INC.
Compensation
Committee
Charter
General
The purpose of this Charter is to set forth the composition,
authority and responsibilities of the Compensation Committee
(the Committee) of the Board of Directors of ORBCOMM
Inc. (the Company).
Composition
The members of the Committee shall consist of at least three
members of the Board who shall be designated by the Board, on
the recommendation of the Nominating and Corporate Governance
Committee of the Board, in accordance with the Companys
Bylaws and Guidelines on Corporate Governance, and shall serve
at the discretion of the Board. One member of the Committee
shall be designated Chair of the Committee.
All members of the Committee shall meet the independence
requirements established by the Board and applicable laws,
regulations and stock exchange listing requirements, subject to
applicable phase-in rules. In addition, each member shall
qualify as an outside director of the Company, as
such term is defined in Section 162(m) of the Internal
Revenue Code of 1986, as amended, and as a non-employee
director of the Company, as such term is defined in
Rule 16b-3
under the Securities Exchange Act of 1934, as amended, or in any
successor provision to either of the foregoing.
Authority
and Responsibilities
General. The general purpose of the Committee
is to assist the Board in fulfilling its responsibilities, with
respect to oversight and determination of executive compensation
and human resources matters. Without limiting the foregoing, the
Committee shall have the following specific authorities and
responsibilities:
1. The Committee shall be directly responsible for
(a) reviewing and approving corporate goals and objectives
relevant to the compensation of the Companys Chief
Executive Officer; (b) in coordination with the Nominating
and Corporate Governance Committee, evaluating his or her
performance in light of those goals and objectives; and
(c) determining and approving his or her compensation based
upon such evaluation.
2. The Committee shall determine the compensation of senior
executives other than the Chief Executive Officer, including
determinations regarding equity-based and other incentive
compensation awards.
3. Subject to the foregoing, the Committee shall determine
and approve the terms and conditions of the employment of senior
executives of the Company, by contract or otherwise.
4. The Committee shall (a) from time to time, as it
deems appropriate, review and recommend that the Board approve
all executive compensation plans and programs, including
incentive compensation and equity-based plans and programs;
(b) administer such plans and programs in accordance with
and subject to their terms; (c) monitor and review such
plans and programs to determine, among other things, whether
they are achieving their intended purposes; and
(d) recommend modifications to such plans and programs.
5. Except as set forth in item 6 below, if a
compensation consultant is to assist the Committee in the
evaluation of compensation matters, the Committee shall have the
authority to retain and terminate any such consultant, including
the authority to approve the fees and other terms on which any
such consultant is retained.
6. The Committee shall evaluate and make recommendations
regarding the compensation of non-employee directors and shall
be responsible for the administration of any plans or programs
providing for the compensation of non-employee directors, such
as retainers, committee chair fees, stock options and other
similar items as appropriate, and consistent with the
Companys Guidelines on Corporate Governance. If a
B-1
compensation consultant is to assist in the evaluation of
non-employee director compensation, the Committee may, at the
request of the Nominating and Corporate Governance Committee,
act jointly with such Committee to retain and terminate any such
consultant, including approval of the fees and other terms on
which any such consultant is retained.
Consultation with Other Independent
Directors. In carrying out its responsibilities
the Committee may consult with other independent members of the
Board, so that its recommendations and actions reflect, to the
extent appropriate, the collective views of the Committee and
the independent members of the Board.
Proxy Statement Report on Executive
Compensation. The Committee shall prepare the
compensation committee report required by Securities and
Exchange Commissions rules to be included in the
Companys proxy statements.
Delegation
of Authority
The Committee may delegate authority to one or more members or
subcommittees when deemed appropriate, provided that the actions
of any such members or subcommittees shall be reported to the
full Committee no later than at its next scheduled meeting.
Counsel
and Other Advisors; Company Funding Obligations
The Committee shall have the authority, to the extent it deems
necessary or appropriate, to retain and terminate the retention
of independent legal counsel (which may be the Companys
normal outside counsel) or other advisors to assist the
Committee in carrying out its responsibilities. The Company
shall provide for appropriate funding, as determined by the
Committee, to pay any such counsel or other advisors retained by
the Committee, as well as any compensation consulting firms
retained by the Committee to assist in the evaluation of Chief
Executive Officer, senior executive or non-employee director
compensation and to pay ordinary administrative expenses of the
Committee that are necessary or appropriate in carrying out its
duties.
Meetings;
Executive Sessions
The Committee shall meet as often as it deems necessary. The
Committee shall meet periodically in separate executive
sessions, with or without such officers or other employees of
the Company, counsel to the Company, counsel or other advisors
to the Committee, or other parties, as the Committee may
determine. Meeting agendas will be prepared and provided in
advance to the Committee, together with appropriate briefing
materials. The Committee shall be governed by the same rules
regarding meetings, action without meetings, notice, waiver of
notice, and quorum and voting requirements as are applicable to
the Board pursuant to the Companys Bylaws.
Reports
to the Board; Minutes
The Committee shall make regular reports to the Board regarding
the Committees activities. Minutes of the meetings and
other actions of the Committee shall be prepared and submitted
for approval by the Committee and shall be furnished to the
Board at regular intervals.
Committee
Self-Assessment
The Committee shall conduct an annual self-assessment of its
performance with respect to its purposes and the authority and
responsibilities set forth in this Charter. The results of the
self-assessment shall be reported to the Board.
Committee
Charter
This Charter shall be subject to review and approval by the
Board. The Committee shall review this Charter annually and
adopt any changes deemed appropriate, subject to approval by the
Board.
Approved by the Board of Directors: August 30, 2006
Effective as of November 2, 2006
B-2
Exhibit C
ORBCOMM
INC.
Nominating
and Corporate Governance Committee
Charter
General
The purpose of this Charter is to set forth the composition,
authority and responsibilities of the Nominating and Corporate
Governance Committee (the Committee) of the Board of
Directors of ORBCOMM Inc. (the Company).
Composition
The members of the Committee shall consist of at least three
members of the Board who shall be designated by the Board, on
the recommendation of the Committee, in accordance with the
Companys Bylaws and Guidelines on Corporate Governance,
and shall serve at the discretion of the Board. One member of
the Committee shall be designated Chair of the Committee.
All members of the Committee shall meet the independence
requirements established by the Board and applicable laws,
regulations and stock exchange listing requirements, subject to
applicable phase-in rules.
Authority
and Responsibilities
General. The general purpose of the Committee
is to assist the Board in fulfilling its responsibilities with
respect to the governance of the Company. These responsibilities
include making recommendations to the Board concerning
(1) the size and composition of the Board, the
qualifications and independence of the directors, and the
recruitment and selection of individuals to stand for election
as directors; and (2) the organization and operation of the
Board, including the nature, size and composition of committees
of the Board, the designation of committee Chairs, the
designation of a Chairman of the Board or similar position, and
the distribution of information to the Board and its committees.
In addition, the Committee is responsible for overseeing the
Companys corporate governance policies, practices and
programs, including its relationships and communications with
institutional investors and other interested parties.
Without limiting the foregoing, the Committee shall have the
following specific authorities and responsibilities:
1. The Committee shall periodically assess the size and
composition of the Board in light of the Companys
operations and other relevant factors.
2. The Committee shall periodically evaluate and recommend
modifications of qualifications and other criteria for service
as a director, including criteria for director independence and
service on one or more Board committees.
3. The Committee shall prepare and submit to the Board for
approval (not less frequently than every three years), and
monitor compliance with, the criteria for service as a director,
as well as for service on a particular Board committee, set
forth in the Companys Board Membership Criteria. In
addition, no member of the Companys senior management may
serve on the board of directors (or similar body) or any board
committee of another entity (other than
not-for-profit
entities) without first obtaining the approval of the Committee.
4. On an annual basis, the Committee shall review and
recommend whether existing directors whose term expires at the
next election of director shall be nominated for re-election,
based upon the needs of the Company and other relevant factors.
As part of this responsibility, the Committee shall evaluate and
make recommendations to the Board with respect to waiving the
Companys Guidelines on Corporate Governance concerning age
and term limits of directors.
C-1
5. The Committee shall identify individuals qualified to
become directors, consistent with the Board Membership Criteria;
shall coordinate and assist the Board in the recruitment of new
directors; and shall select or recommend to the Board candidates
for election as directors, including the director nominees for
the Companys annual meeting of stockholders. The Committee
shall have sole authority to retain and terminate any search or
similar firms to be used to identify candidates for election as
director, including sole authority to approve the fees and other
terms on which any such firm is retained.
6. The Committee shall evaluate and make recommendations to
the Board concerning the nature and composition of Board
committees, including the designation of committee Chairs, Board
committee structure and operations, and the extent to which
committee assignments should be rotated over time.
7. The Committee shall coordinate, at least annually, a
self-assessment by the Board of its operations and performance
and the overall operations and performance of the Board
committees generally, and shall prepare an assessment of the
Boards performance that shall be discussed with the Board.
8. The Committee shall evaluate and make recommendations
concerning the process for distribution of information to the
Board and its committees, including the content and timing of
delivery of materials relating to meetings of the Board and
Board committees as well as general information about the
Company and its operations.
9. The Committee shall periodically evaluate the
Companys Guidelines on Corporate Governance in light of
current best practices and other relevant factors, and shall
recommend to the Board any changes in such Principles deemed
necessary or appropriate.
10. The Committee shall review any proposed changes to the
Companys Certificate of Incorporation, Bylaws and other
documents affecting the rights of the Companys
stockholders or otherwise affecting the Companys corporate
governance, and shall make recommendations to the Board with
respect to any such changes.
11. The Committee shall be responsible for overseeing the
implementation and maintenance of director orientation and
education programs.
12. In coordination with the Compensation Committee, the
Committee may evaluate the performance of the Chief Executive
Officer in light of corporate goals and objectives approved by
the Compensation Committee.
Proxy Statement Report. The Committee shall
consider rendering (but shall not be required to render) a
report on the Committees activities and achievements for
inclusion in the Companys proxy statements.
Delegation
of Authority
The Committee may delegate authority to one or more members or
subcommittees when deemed appropriate, provided that the actions
of any such members or subcommittees shall be reported to the
full Committee no later than at its next scheduled meeting.
Counsel
and Other Advisors; Company Funding Obligations
The Committee shall have the authority, to the extent it deems
necessary or appropriate, to retain and terminate the retention
of independent legal counsel (which may be the Companys
normal outside counsel) or other advisors to assist the
Committee in carrying out its responsibilities, including any
search or similar firm retained to identify candidates for
election as director. The Company shall provide for appropriate
funding, as determined by the Committee, to pay any such counsel
or other advisors retained by the Committee, as well as any
search or similar firms retained by the Committee to identify
candidates for election as director and to pay ordinary
administrative expenses of the Committee that are necessary or
appropriate in carrying out its duties.
C-2
Meetings;
Executive Sessions
The Committee shall meet as often as it deems necessary. The
Committee shall meet periodically in separate executive
sessions, with or without such officers or other employees of
the Company, counsel to the Company, counsel or other advisors
to the Committee, or other parties, as the Committee may
determine. Meeting agendas will be prepared and provided in
advance to the Committee, together with appropriate briefing
materials. The Committee shall be governed by the same rules
regarding meetings, action without meetings, notice, waiver of
notice, and quorum and voting requirements as are applicable to
the Board pursuant to the Companys Bylaws.
Reports
to the Board; Minutes
The Committee shall make regular reports to the Board regarding
the Committees activities. Minutes of the meetings and
other actions of the Committee shall be prepared and submitted
for approval by the Committee and shall be furnished to the
Board at regular intervals.
Committee
Self-Assessment
The Committee shall conduct an annual self-assessment of its
performance with respect to its purposes and the authority and
responsibilities set forth in this Charter. The results of the
self-assessment shall be reported to the Board.
Committee
Charter
This Charter shall be subject to review and approval by the
Board. The Committee shall review this Charter annually and
adopt any changes deemed appropriate, subject to approval by the
Board.
Approved by the Board of Directors: August 30, 2006
Effective as of November 2, 2006
C-3
Notice:
If you plan on attending the 2007 Annual Meeting,
please cut out and use the admission ticket(s) below.
No admission will be granted without an admission ticket.
Annual Meeting of Shareholders
May 11, 2007, 10:00 a.m. (Eastern Time)
Hyatt Regency Reston
1800 Presidents Street
Reston, Virginia 20190
1-703-709-1234
PLEASE VOTE YOUR SHARES VIA THE TELEPHONE OR INTERNET, OR
SIGN, DATE
AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
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ADMISSION TICKET
ORBCOMM Inc.
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ADMISSION TICKET
ORBCOMM Inc.
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Annual Meeting of Shareholders
Hyatt Regency Reston
1800 Presidents Street
Reston, Virginia 20190
1-703-709-1234
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Annual Meeting of Shareholders
Hyatt Regency Reston
1800 Presidents Street
Reston, Virginia 20190
1-703-709-1234
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May 11, 2007
10:00 a.m. (Eastern Time)
Admit ONE
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May 11, 2007 10:00 a.m. (Eastern Time)
Admit ONE
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THIS PROXY WILL BE VOTED AS DIRECTED, OR IF NO DIRECTION IS INDICATED, WILL BE VOTED FOR THE PROPOSALS
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS |
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Please
Mark Here
for Address
Change or
Comments |
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SEE REVERSE SIDE |
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The Board of Directors recommends
a vote FOR Items 1 and 2. |
FOR
ALL
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WITHHELD
FOR ALL
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FOR ALL
EXCEPT
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FOR
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AGAINST
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ABSTAIN
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2. |
Election of Directors |
1. |
Election of Directors |
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Nominees: |
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01 DIDIER DELEPINE |
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In their discretion, the proxies are authorized to vote upon such other business as may
properly come before the meeting or any postponement or adjournment thereof. |
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02 HANS E.W. HOFFMANN |
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03 GARY H. RITONDARO |
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WILL ATTEND
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To withhold authority to vote for any individual nominee, mark FOR ALL
EXCEPT and write that nominees name in the space provided below. |
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If you plan to attend the Annual Meeting,
please mark the WILL ATTEND box |
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Signature |
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Signature |
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NOTE: Please sign as name appears hereon. Joint owners should each sign personally. When signing as attorney, executor, administrator, trustee or guardian, please give full title as such. |
VOTE BY INTERNET OR TELEPHONE
AVAILABLE 24 HOURS A DAY, 7 DAYS A WEEK
Internet and telephone voting is available through 11:59 PM Eastern Time
on May 10, 2007.
Your Internet or telephone vote authorizes the named proxies to vote your shares in the same manner
as if you returned a signed proxy card.
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INTERNET
http://www.proxyvoting.com/orbc
Use the internet to vote your proxy.
Have your proxy card in hand
when you access the web site
and follow the instructions. |
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OR |
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TELEPHONE
1-866-540-5760
Use any touch-tone telephone to
vote your proxy. Have your proxy
card in hand when you call
and follow the instructions. |
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If you vote your proxy by Internet or by telephone, you do NOT need to mail back your proxy card.
To vote by mail, mark, sign and date your proxy card and return it in the enclosed postage-paid envelope.
Choose MLinkSM for fast, easy and secure 24/7 online access to your future proxy materials, investment plan statements, tax documents and more. Simply log on to Investor ServiceDirect® at www.melloninvestor.com/isd where step-by-step instructions will prompt you through enrollment. |
PROXY CARD
ORBCOMM INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Jerome B. Eisenberg, Christian G. Le Brun and Bradley C. Franco,
jointly and severally, proxies, with full power of substitution, to vote shares of common stock which the
undersigned is entitled to vote at the Annual Meeting of Shareholders to be held on May 11, 2007 or any
postponement or adjournment thereof. Such proxies are directed to vote as specified or, if no
specification is made, FOR the election of the three nominees proposed for election as directors
with terms expiring at the Annual Meeting in 2010 and FOR Proposal 2, and to vote in
accordance with their discretion on such other matters as may properly come before the meeting.
TO VOTE IN ACCORDANCE WITH THE BOARD OF DIRECTORS RECOMMENDATIONS, JUST
SIGN AND DATE; NO BOXES NEED TO BE CHECKED.
(Continued and to be marked, dated and signed, on the other side)
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Address Change/Comments (Mark the corresponding box on the reverse side) |
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ANNUAL MEETING OF SHAREHOLDERS
FRIDAY, MAY 11, 2007
10:00 AM EDT
HYATT REGENCY RESTON
1800 PRESIDENTS STREET
RESTON, VA 20190
YOUR VOTE IS IMPORTANT!
YOU CAN VOTE BY INTERNET, TELEPHONE OR MAIL, SEE THE
INSTRUCTIONS ON THE OTHER SIDE OF THIS PROXY CARD.
You may obtain copies of the Proxy Statement and Annual Report on the Internet at
www.orbcomm.com