EXHIBIT 99.1
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NEXTWAVE WIRELESS INC.
IPWIRELESS, INC. EMPLOYEE STOCK BONUS PLAN
SECTION 1. PURPOSE
The IPWireless, Inc. Employee Stock Bonus Plan (the "Plan"),
effective as of May 11, 2007 ("Effective Date"), is intended to induce
individuals to enter into, and continue after the Effective Date, an employment
relationship with IPWireless, Inc. (the "Company") and its affiliates, including
NextWave Wireless, Inc. ("NextWave"). It is also specifically designed to
provide participants with an incentive to assist the Company in achieving
targeted amounts of Shipped Revenue for TDtv and New York Public Safety Project
equipment. The Plan is a bonus plan and therefore is exempt from the application
of the Employee Retirement Income Security Act of 1974, as amended.
SECTION 2. PARTICIPATION
2.1 ELIGIBILITY AND TERMS OF PARTICIPATION. The Board of
Directors of NextWave, or the Compensation Committee thereof (in either case,
the "Board"), in consultation with the Chief Executive Officer of the Company,
shall determine in its sole discretion the employees and consultants of the
Company who are entitled to participate in the Plan, the amount of stock bonus
for each participant and the terms and conditions applicable to each stock
bonus. No employee or consultant shall be entitled to participate unless and
until the employee's or the consultant's participation is confirmed in writing
by [NEXTWAVE OR THE COMPANY] by means of a separate letter of participation
("Participation Letter"), and the employee or consultant has satisfied all of
the applicable conditions to participation, including Section 2.2 hereof. A
Participation Letter may set forth any additional terms and conditions of
participation (beyond the provisions of the Plan) as NextWave or the Company
may, in its sole discretion, determine. If so provided in a Participation
Letter, an employee or consultant shall not become a participant unless and
until he or she signs and agrees to the terms and conditions of such
Participation Letter and the Plan.
2.2 TERMINATION OF PARTICIPATION. A participant's
participation in the Plan shall automatically terminate, without notice to or
consent of the participant, and the participant shall not be treated as a
participant, upon the earliest to occur of the following events: (i) the
participant's termination of employment by NextWave or any of its affiliates,
including the Company, for Cause; (ii) the participant's resignation other than
for Good Reason from NextWave and its affiliates, including the Company; or
(iii) any termination of participation in accordance with the participant's
Participation Letter.
SECTION 3. SHARES; REGISTRATION; ADJUSTMENT
3.1 SHARES SUBJECT TO THE PLAN. The Shares issuable under
the Plan are shares of common stock of NextWave, par value $.001. The number of
Shares that may be issued over the term of the Plan shall be such number that
has an aggregate Fair Market Value (rounded down to the nearest whole Share) of
$7,000,000 based on the Fair Market Value of each Share as of its date of
issuance under the Plan.
3.2 REGISTRATION. NextWave shall file a Registration
Statement on Form S-8 registering the issuance of the Shares and shall use its
reasonable best efforts to have such Registration Statement declared effective
at or prior to the 12 month anniversary of the Effective Date.
3.3 SHARE ADJUSTMENT. If, after the Effective Date, a stock
dividend, stock split, reverse stock split, recapitalization (including payment
of an extraordinary dividend), merger, consolidation, combination, spin-off,
reclassification, distribution of assets to stockholders, exchange of shares, or
other similar corporate change affecting the Shares occurs such that an
adjustment is determined by the Board (in its sole discretion) to be appropriate
in order to prevent dilution or enlargement of the benefits or potential
benefits intended to be made available under the Plan, then the Board shall, in
such manner as it may deem equitable, adjust the number and class of Shares
subject to any stock bonus payable under the Plan. Notwithstanding the
preceding, the number of Shares with respect to any stock bonus shall always
shall be a whole number.
SECTION 4. STOCK BONUS.
4.1 ESTABLISHMENT OF BONUS. Each participant shall be
eligible to receive a stock bonus under the Plan in the dollar amount, and
subject to the terms and conditions, set forth in the applicable Participation
Letter and the Plan. The Participation Letter shall set forth the maximum bonus
amount, which shall be expressed as an aggregate dollar amount ("Participant's
Maximum Bonus Amount") and payable in a whole number of Shares. The stock bonus
shall be earned and payable separately, as a Milestone 1 Bonus, a Milestone 2
Bonus and a Milestone 3 Bonus (each, a "Milestone Bonus"), with respect to three
separate performance periods ending on January 1 of each of 2008, 2009 and 2010,
respectively (each, a "Milestone Period"), provided that the Company attains at
least its minimum performance objective for the applicable Milestone Bonus. A
participant shall be eligible to receive a Milestone Bonus if, except as
provided in Section 5, the participant is continuously employed by NextWave or
its affiliates, including the Company, from the Effective Date until January 1,
2008 with respect to a Milestone 1 Bonus, January 1, 2009 with respect to a
Milestone 2 Bonus and January 1, 2010 with respect to a Milestone 3 Bonus. The
amount of each Milestone Bonus payable, if any, with respect to a Milestone
Period shall be determined by the amount of Shipped Revenue for TDtv and New
York Public Safety Project equipment, as such terms are defined below, achieved
during the calendar year ending in such Milestone Period. Each Milestone Bonus
shall be calculated and determined separate from any other Milestone Period, and
a participant's failure to achieve a Milestone Bonus shall not affect the
participant's opportunity to earn a Milestone Bonus with respect to any other
Milestone Period.
"SHIPPED REVENUE" means (i) the amount of payment received in
connection with product sales by the Company for which the product has been
delivered (it being understood that if delivery and payment occur at different
times, Shipped Revenue shall be deemed to occur at the time that the later of
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delivery or payment occur), plus (ii) fees received for software maintenance
plus (iii) up-front or fixed license fees received in connection with licenses
granted to third parties that enable such third parties to engage in the Public
Safety Business or the TDtv Business plus (iv) proceeds from the sale of the
Public Safety Business or TDtv Business; provided, however, that Shipped Revenue
shall not include any nonrecurring engineering expense payments or service
payments made in connection with product sales; and provided, further, that the
amount of Shipped Revenue that is subject to holdbacks or deferred payment terms
shall not be included in Shipped Revenue until the amount subject to holdback or
deferred payment has been received. Shipped Revenue shall include Shipped
Revenue of the Company, the Successor Corporation or any successor to the
relevant Public Safety Business or TDtv Business plus (i) Shipped Revenue of
licensees of the Company who are licensees of the Company as of the date hereof,
(ii) Shipped Revenue of licensees of the Company who become licensees of the
Company after the date hereof but prior to Closing (provided that NextWave has
consented thereto), and (iii) Shipped Revenue of licensees of the Successor
Corporation (or any successor to the relevant Public Safety Business or TDtv
Business) who become licensees after the Closing; provided that Shipped Revenue
of any of such licensees shall only include the amount of cash received by such
licensee that is used to determine the royalty or license fee that the licensee
pays to the Company. If any equipment covered by Shipped Revenue has been
delivered late and the Chief Executive Officer of the Surviving Corporation
certifies to the Stockholder Representative that penalties or liquidated damages
have been invoiced for such late delivery or have not been invoiced but are
likely to be claimed, in either case in accordance with the terms of the
agreement with the customer (as such terms and agreement exist on the date
hereof), then Shipped Revenue shall be reduced by the penalties or liquidated
damages that have been so invoiced or are so likely to be claimed; provided,
however, any reduction in the Additional Total Consideration or Earnout Amounts
resulting from a reduction in Shipped Revenue caused by penalties or liquidated
damages that have not been invoiced but have been certified as likely to be
claimed shall be placed into an escrow account acceptable to Parent and the
Stockholder Representative until (i) such time that the penalties or liquidated
damages are invoiced, at which time the associated amount held in escrow shall
be released to Parent, (ii) such time that the penalties or liquidated damages
are no longer payable by way of agreement with the customer, at which time the
associated amount held in escrow shall be released to the Participating
Stockholders, Plan Participants and participant in the Special Acquisition Bonus
in accordance with Sections 3.3 or 3.4 below, or (iii) December 31, 2009, at
which time the associated amount held in escrow shall be released to the
Participating Stockholders, Plan Participants and participant in the Special
Acquisition Bonus in accordance with Sections 3.3 or 3.4 below.
"TDtv BUSINESS" means the business of licensing, selling, offering
for sale, marketing, developing, installing and/or maintaining any application
or implementation of a wireless system for use in the delivery of broadcast or
multicast services, including the sale or license of infrastructure, chipsets,
devices, modules, Software, Intellectual Property or other components.
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"NEW YORK PUBLIC SAFETY PROJECT" means the creation and maintenance
of a city-wide mobile wireless broadband network in New York City that will be
used by public safety workers for communication and response services.
4.2 AMOUNT OF MILESTONE BONUSES.
The amount of a Milestone Bonus, if any, with respect to a
participant shall be a percentage of the participant's Maximum Bonus Amount, and
the aggregate Milestone Bonuses shall not exceed 100% of the Participant's
Maximum Bonus Amount. As to each Milestone Period, the Company has established a
target performance objective at which the target bonus percentage of the Maximum
Bonus Amount shall be earned and a threshold performance objective at which 25%
of the target bonus percentage shall be earned. The bonus amount earned for
performance between the target and threshold performance objectives shall be
derived using linear interpolation. The target and the threshold performance
objectives, and the target bonus percentage, for each of the Milestone Periods
is set forth below.
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MILESTONE BONUS AMOUNTS OF SHIPPED PERCENTAGE OF
(Milestone Period) REVENUE FOR TDTV AND PARTICIPANT'S MAXIMUM
NEW YORK SAFETY PROJECT BONUS AMOUNT
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MILESTONE 1 BONUS Threshold $10,000,000 7.5%
(January 1, 2007-January
1, 2008)
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Target $40,000,000 30%
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MILESTONE 2 BONUS Threshold $12,500,000 8.75%
(January 2, 2008-January
1, 2009)
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Target $50,000,000 35%
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MILESTONE 3 BONUS Threshold $20,000,000 8.75%
(January 2, 2009-January
1, 2010)
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Target $80,000,000 35%
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4.5 FORM AND TIME OF PAYMENT.
(i) Payment in Shares. Any Milestone Bonus payable under the Plan
shall be paid in the form of Shares, except cash shall be paid in lieu of any
fractional Shares. If a Milestone Bonus is payable, the Company shall issue to
each eligible participant a number of Shares (rounded down to the nearest whole
Share) with an aggregate Fair Market Value as of the last day of the respective
Milestone Period equal to the amount of the Milestone Bonus, plus cash in lieu
of any fractional Shares.
(ii) Time of Payment. Shares shall be issued as soon as practicable
following the end of each Milestone Period, but not later than the earlier of
(a) 120 days following the end of such Milestone Period or (b) the date of
completion of the audit of NextWave's financial statements for such calendar
year.
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SECTION 5. CHANGE IN STATUS
5.1 TERMINATION OR TRANSFER OF EMPLOYMENT. Upon a
participant's termination of employment with the Company for any reason, the
participant's entitlement, if any, to a stock bonus shall be determined and his
or her participation in the Plan shall end, except as provided in this Section 5
or as otherwise specifically agreed or determined in writing by the Board.
5.2 INVOLUNTARY TERMINATION WITHOUT CAUSE OR RESIGNATION FOR
GOOD REASON. Each participant whose employment with NextWave or its affiliate,
including the Company, is terminated by such employer without Cause or by the
participant for Good Reason within 90 days prior to the last day of any
Milestone Period shall be entitled to the Milestone Bonus payable with respect
to such Milestone Period, if any, as if the participant had remained in
continuous employment until the last day of the Milestone Period. Such
participant shall have no rights to any Milestone Bonus with respect to an
Milestone Period ending more than 90 days after any such termination of
employment.
5.3 INVOLUNTARY TERMINATION FOR CAUSE OR RESIGNATION WITHOUT
GOOD REASON. Each participant whose employment with NextWave or its affiliate,
including the Company, is terminated by the participant without Good Reason or
by such employer (or was terminable by such employer) for Cause shall forfeit
any right as of the date of termination to receive any unpaid balance (whether
earned or unearned) of the participant's stock bonus award, unless otherwise
provided in the participant's Participation Letter or otherwise specifically
agreed or determined in writing by the Board.
5.4 DEATH OR DISABILITY. Each participant whose employment
is terminated by reason of the participant's death or total disability (as
determined in accordance with the Company's long term disability plan applicable
to the participant or, if no such plan, the long term disability plan of
NextWave or its affiliate, including the Company, applicable to employees
generally, or if none, in accordance with Section 22(e)(3) of the Internal
Revenue Code of 1986, as amended) prior to the completion of an Milestone Period
shall be entitled to a pro rata amount of the Milestone Bonus payable with
respect to an Milestone Period, if any, that the participant would have received
if the participant had been continuously employed through the end of all three
Milestone Periods. Such pro rata amount shall be the respective Milestone Bonus
payable multiplied by a fraction not to exceed the value of 1, the numerator of
which is the number of days of actual employment from the Effective Date through
the termination date and the denominator of which is 365 with respect to a
Milestone 1 Bonus, 730 with respect to a Milestone 2 Bonus and 1095 with respect
to a Milestone 3 Bonus. Such pro-rata bonus shall be payable at such time as
bonuses are otherwise payable under the Plan.
5.5 TRANSFER OF EMPLOYMENT TO A NON-SUBSIDIARY AFFILIATE OF
NEXTWAVE. Each participant who transfers employment from NextWave or its wholly
owned subsidiaries, to any nonsubsidiary affiliate thereof within 90 days prior
to the last day of any Milestone Period shall be entitled to the Milestone Bonus
payable with respect to such Milestone Period, if any, as if the participant had
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remained in continuous employment until the last day of the Milestone Period.
Such participant shall have no rights to any Milestone Bonus with respect to an
Milestone Period ending more than 90 days after any such transfer.
5.6 NO DUPLICATION OR MITIGATION. The amounts payable under
the Plan are in consideration of a participant's continuation of employment or
availability for continued employment and shall not be treated as severance pay.
Accordingly, the amounts payable under the Plan shall not be reduced by any
severance to which the participant may be entitled under other severance plans
of or agreements with NextWave and its affiliate, including the Company, if any.
A participant shall not be required to undertake any mitigation in order to
receive payment of any amounts otherwise payable under the Plan.
SECTION 6 CONDITIONS TO PAYMENT.
6.1 TAX WITHHOLDING. NextWave's obligation to issue Shares
payable to participants under the Plan shall be subject to the satisfaction of
all applicable federal, state and local or other governmental income and
employment or other tax withholding requirements. If a participant is to
experience a taxable event with respect to any portion of the participant's
stock bonus award, the participant must make arrangements satisfactory to
NextWave to provide for the timely payment of all applicable withholding taxes
upon such taxable event. The Board may, in its sole discretion, authorize the
Company to permit a participant to satisfy the obligation to pay all or a
portion of any such withholding taxes by having the Company withhold a portion
of the stock bonus award (expressed as Shares payable to the participant) equal
to the amount of such withholding taxes designated by the participant and
approved by the Board.
6.2 REGULATORY APPROVALS. The implementation of the Plan and
the issuance of any Shares under the Plan shall be subject to NextWave's
procurement of all approvals and permits required by regulatory authorities
having jurisdiction over the Plan and the Shares issued pursuant to it. No
Shares may be issued or delivered under the Plan unless and until there shall
have been compliance with all applicable requirements of United States federal
and state and Israeli securities laws, including the filing and effectiveness of
the Form S-8 registration statement for the Shares issuable under the Plan, and
all applicable listing requirements of any stock exchange on which the Shares
are then listed for trading.
SECTION 7. ADMINISTRATION.
Except as otherwise set forth in the Plan, the Board shall
administer the Plan. The Board shall have the authority and responsibility to do
all things necessary or appropriate to effect the purposes of and to administer
the Plan, including, without limitation, the power in its sole discretion to:
(i) provide rules for the management, operation and administration
of the Plan, and to amend or supplement such rules;
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(ii) interpret or construe the terms of the Plan;
(iii) correct any defect, supply any omission, clarify any ambiguity
or reconcile any inconsistency in the Plan in such manner and to such extent as
it shall deem appropriate in its sole discretion;
(iv) make reasonable determinations as to a participant's
eligibility for bonuses under the Plan, including determinations as to Cause and
Good Reason.
The determinations, decisions and actions of the Board or its duly authorized
delegate shall be final, conclusive and binding for all purposes of the Plan,
and shall not be subject to any appeal or review.
SECTION 8. AMENDMENT/TERMINATION.
Notwithstanding any other provision of the Plan, the Plan (including
any Schedules) may be amended, modified, suspended, or terminated by NextWave;
provided, however, that any such amendment, modification, suspension or
termination shall not adversely affect the rights of any participant in respect
of any stock bonus payable.
SECTION 9. MISCELLANEOUS.
9.1 SEVERABILITY. If any term or condition of the Plan shall
be invalid or unenforceable to any extent or in any application, then the
remainder of the Plan, with the exception of such invalid or unenforceable
provision, shall not be affected thereby and shall continue in effect and
application to its fullest extent. If, however, NextWave determines in good
faith that any term or condition of the Plan which is invalid or unenforceable
is material to the interests of NextWave, NextWave may declare the Plan null and
void in its entirety.
9.2 NO EMPLOYMENT RIGHTS. The establishment of the Plan and
the selection of any employee for participation in the Plan does not, and shall
not be held or construed to, confer upon any employee the right to a
continuation of employment by NextWave or any of its affiliates, including the
Company. Subject to any applicable employment agreement, NextWave and its
affiliates, including the Company, reserves the right to dismiss any employee or
otherwise deal with any employee to the same extent as though the Plan had not
been adopted.
9.3 NON-PROPERTY INTEREST. The Plan is unfunded and any
liability of NextWave to any person with respect to bonuses payable under the
Plan shall give rise to a claim as an unsecured creditor against the general
assets of NextWave. Any participant who may have or claim any interest in or
right to any bonuses payable hereunder shall rely solely upon the unsecured
promise of NextWave for the payment thereof. Nothing herein contained shall be
construed to give to or vest in the participant or any other person now or at
any time in the future, any right, title, interest or claim in or to any
specific asset, fund, reserve, account, insurance or annuity policy or contract,
or other property of any kind whatsoever owned by NextWave or its affiliates, or
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in which NextWave or its affiliates may have any right title or interest now or
at any time in the future.
9.4 OTHER RIGHTS. The Plan shall not affect or impair the
rights or obligations of NextWave or the Company or a participant under any
other written plan, contract, arrangement, or pension, profit sharing or other
compensation plan.
9.5 INCAPACITY. If NextWave or the Company determines that a
participant or a beneficiary thereof is unable to care for his or her affairs
because of illness or accident or because he or she is a minor, any bonuses due
to such individual may be paid to such individual's spouse or any other person
deemed by NextWave or the Company to have incurred expense for such individual
(including a duly appointed guardian, committee or other legal representative),
and any such payment shall be a complete discharge of NextWave's obligation
hereunder.
9.6 TRANSFERABILITY OF RIGHTS. NextWave shall have the
unrestricted right to transfer its obligations under the Plan with respect to
one or more participants to any person, including, but not limited to, any
purchaser of all or any part of the Company's business. No participant or spouse
of a participant shall have any right to commute, encumber, transfer or
otherwise dispose of or alienate any future right or expectancy which the
participant or such spouse may have at any time to receive payments of bonuses
hereunder, which bonuses and the right thereto are expressly declared to be
non-assignable and nontransferable, except to the extent required by law. Any
attempt to transfer or assign a bonus that has not yet become payable by a
participant or the spouse of a participant shall, in the sole discretion of
NextWave (after consideration of such facts as it deems pertinent), be grounds
for terminating any rights of the participant or his or her spouse to any bonus
under the Plan not previously paid.
9.7 ENTIRE DOCUMENT. The Plan, as set forth herein,
supersedes any and all prior practices, understandings, agreements, descriptions
or other non-written arrangements respecting retention payments, severance,
except for any severance policy or agreement, if any, existing as of the
Effective Date, and written employment contracts signed by NextWave or the
Company.
9.8 GOVERNING LAW. The Plan shall be construed,
administered, and enforced according to the laws of the State of Delaware,
except to the extent that such laws are preempted by the federal laws of the
United States of America.
SECTION 10. DEFINITIONS.
The following words and phrases as used herein shall have the
following meanings, unless a different meaning is required by the context:
10.1 "AVERAGE CLOSING PRICE" means an amount equal to the
average per share closing price of NextWave common stock (or if no closing sale
price is reported, the average of the closing bid and closing ask prices) (i) on
any national securities exchange on which NextWave common stock is listed (as
reported by Bloomberg, or, if not reported thereby, any other authoritative
source), or (ii) if NextWave common stock is not listed on a national securities
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exchange, quoted in the Over-The-Counter Market Summary, in either case for the
20 trading days ending with the second trading day immediately preceding the
relevant determination date. In the absence of such a listing or quotation, the
Average Closing Price shall be determined in good faith by the Board.
10.2 "CAUSE" shall mean any act or failure to act on the part
of an employee of NextWave or any affiliate (including the Company) which
constitutes:
(i) an unauthorized use or disclosure by such employee of the
Company's confidential information or trade secrets, which use or disclosure
causes material harm to the Company;
(ii) a material breach by such employee of any agreement between the
employee and the Company;
(iii) a material failure by such employee to comply with the
Company's written policies or rules;
(iv) such employee's conviction of, or plea of "guilty" or "no
contest" to, a felony under the laws of the United States or any state thereof
or any foreign jurisdiction in which the Company conducts business which if
occurring in the United States would constitute a felony under its laws or the
laws of any state thereof;
(v) such employee's gross negligence or willful misconduct;
(vi) such employee's willful or grossly negligent engagement in any
activity competitive with the business of the Company in which the employee has
not ceased (other than for reasons beyond the control of the employee) within 3
business days after receiving written notification of such engagement from the
Company; or
(vii) a continued failure by such employee to perform assigned
duties after receiving written notification of such failure from the Company's
Board of Directors.
10.3 "FAIR MARKET VALUE" means, with respect to any
determination date, the Average Closing Price of the Shares.
10.4 "GOOD REASON" means with respect to NextWave or any
affiliate (including the Company),
(i) the material adverse alteration of such employee's title or
position from that held by such employee as of the Effective Date without such
employee's written consent;
(ii) the material reduction of such employee's total annual
compensation as of the Effective Date without such employee's written consent;
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(iii) without such employee's written consent, the relocation of
such employee's primary place of employment to a location more than 35 miles
away from the location of such primary place of employment as of the Effective
Date; or
(iv) any other event or condition set forth in the Participation
Letter with respect to the employee.
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