Iridium Communications Inc. (NASDAQ:IRDM) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

Iridium Communications Inc. (NASDAQ:IRDM) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

(e) Awards under Performance Share Program
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On February26, 2016, the Compensation Committee of the Board of Directors (the “Committee”) of Iridium Communications Inc. (the “Company”) approved the Performance Share Program (the “Program”), which provides for the grant of restricted stock units (“Awards”) under the terms of the Company’s Amended and Restated 2015 Equity Incentive Plan (the “Plan”). The Committee established the Program to (i)focus key employees on achieving specific performance targets, (ii)reinforce a team-oriented approach, (iii)provide significant award potential for achieving outstanding performance, and (iv)enhance the ability of the Company to attract and retain highly talented and competent individuals. The Program provides that the Committee may grant Awards (referred to as “Maximum Awards”) to designated key employees, with each such Maximum Award representing a specified maximum number of shares of common stock that may ultimately be earned by each such employee under the Award. The Maximum Award is calculated by reference to the target award value (the “Target Award”). The Program contemplates that the Committee may establish criteria for determining the number of shares ultimately awarded (the “Actual Awards”), including (a)one or more performance goals of the type enumerated in the Plan (“Performance Goals”), the satisfaction of which is a condition to some or all of the Maximum Award being earned, (b)other performance goals that may or may not be of the type specifically enumerated in the Plan which may form the basis for a determination by the Committee to reduce the award to the participant (“Other Performance Goals”), and (c)the performance period over which attainment of the Performance Goals and Other Performance Goals is determined (the “Performance Period”). The Program also contemplates that the Committee may establish a vesting period over which the respective key employee must remain employed by the Company following the Performance Period in order to earn the shares underlying his or her Actual Award.

On February26, 2018, the Performance Sub-Committee of the Committee (the “Sub-Committee”) granted Awards under the Program to the Company’s principal executive officer, principal financial officer and other named executive officers, designated a Performance Goal, an Other Performance Goal and a Performance Period related to such Awards and specified a vesting schedule for the Awards. These Awards specified a Target Award (and the related Maximum Award) for each of these executives as set forth in the following table. The Awards were approved with a specified dollar value and were converted to an equivalent number of shares of common stock based on the closing price of the common stock on the grant date, rounded down to the nearest whole share.

Officer

Title

TargetAward($) MaximumAward($)

Matthew J. Desch

Chief Executive Officer $ 600,000 $ 900,000

Thomas J. Fitzpatrick

Chief Financial Officer and Chief Administrative Officer $ 200,000 $ 300,000

S. Scott Smith

Chief Operating Officer $ 200,000 $ 300,000

Thomas D. Hickey

Chief Legal Officer $ 195,000 $ 292,500

Bryan Hartin

Executive Vice President Sales and Marketing $ 195,000 $ 292,500

The Actual Awards for each executive will be based on the level of achievement of the Performance Goal, which is the growth of the Company’s average service revenue for 2018 and 2019, calculated in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”), over the service revenue that was reported by the Company for 2017. The Actual Awards will be reduced to zero if the Company fails to achieve the Other Performance Goal specified by the Sub-Committee, which is the achievement of a specified average OEBITDA margin for 2018 and 2019. “OEBITDA margin” is OEBITDA expressed as a percentage of total revenue. “OEBITDA” is defined as earnings before interest, income taxes, depreciation and amortization, Iridium NEXT revenue and expenses (for periods prior to the deployment of Iridium NEXT only), loss from investment in Aireon, share-based compensation expenses and the impact of purchase accounting. Iridium NEXT revenue and expenses were excluded from Operational EBITDA through 2017. In 2018, Iridium NEXT revenues and recurring Iridium NEXT expenses (recurring Iridium NEXT expenses are not part of the approximately $3billion construction cost of Iridium NEXT (the “Construction Costs”)) will no longer be excluded in calculating Operational EBITDA. U.S. GAAP requires that certain of the Construction Costs be expensed. These certain Construction Costs, which beginning in 2018 will principally consist of in-orbit insurance, will continue to be excluded from the calculation of Operational EBITDA through 2019.

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The Actual Award will vest as to 50% of the underlying shares when the Sub-Committee determines the Company’s level of achievement of the Performance Goal and the Other Performance Goal, which is expected to occur in the first quarter of 2020, and as to the remaining 50% on March1, 2021, subject to continuous employment of the participant through such dates. If a change in control of the Company occurs before the date the Sub-Committee determines the Company’s level of achievement of the Performance Goal and Other Performance Goal, each participant will be credited with an Actual Award equal to the participant’s Target Award, and the Actual Award will remain subject to the same time-based vesting schedule with the first vesting date being March1, 2020. Actual Awards and any shares issued thereunder are subject to recoupment from participants in accordance with any clawback policy that the Company is required to adopt to applicable laws.

The description of the Program contained herein is a summary of its material terms, does not purport to be complete and is qualified in its entirety by reference to the Program and the Plan. The Performance Share Program and the form of Performance Share Award Grant Notice and Performance Share Award Agreement for use in connection with grants under the Program were filed as exhibits to the Registrant’s Current Report on Form 8-K filed with the SEC on March3, 2016.

Iridium 2018 Executive Performance Bonus Plan

On February26, 2018, the Sub-Committee approved the terms of the Company’s 2018 Executive Performance Bonus Plan (the “Iridium Bonus Plan”), operating under and as part of the Plan.

Executives of the Company who are employed during the 2018 calendar year at the level of Executive Vice President or above and subject to Section16 of the Securities Exchange Act of 1934 are eligible to participate in the Iridium Bonus Plan, provided that a participant must be employed through the date bonuses are paid in order to be eligible to receive a bonus, except as provided in an applicable severance plan or individual agreement. to the Iridium Bonus Plan, each participant is eligible to receive an incentive bonus (the “Bonus Award”) calculated in part by reference to a “Target Bonus Award” determined for such participant by the Committee or the Sub-Committee. The Target Bonus Award is calculated by multiplying the participant’s base salary earned during the 2018 calendar year by a Committee or Sub-Committee-approved Target Bonus Percentage.

On February26, 2018, the Sub-Committee established the Target Bonus Percentage (expressed as a percentage of earned base salary) under the Iridium Bonus Plan for each of the Company’s principal executive officer, principal financial officer and other named executive officers as set forth in the table below.

Officer

Title

TargetBonusPercentage

Matthew J. Desch

Chief Executive Officer 90%

Thomas J. Fitzpatrick

Chief Financial Officer and Chief Administrative Officer 75%

S. Scott Smith

Chief Operating Officer 75%

Thomas D. Hickey

Chief Legal Officer 60%

Bryan J. Hartin

Executive Vice President, Sales and Marketing 60%

The actual bonus award will be calculated by multiplying the Target Bonus Award by a corporate performance factor determined by the Sub-Committee, which can range from 0% to 190% based on the achievement of the following corporate performance goals: (i)OEBITDA (as defined under “Performance Share Program” above); (ii) specified strategic goals; and (iii)specified measures of user satisfaction. The resulting amount may then be reduced but not increased by the Sub-Committee based on a personal performance factor ranging from 0% to 50%.

Bonus Awards up to the Target Bonus Award will be paid in a combination of common stock of the Company in the form of restricted stock units granted under the Plan and cash. Restricted stock units equal in value to 40% of each executive’s Target Bonus Award were granted on March1, 2018 and will vest, if at all, in March 2019 upon the determination by the Sub-Committee as to the achievement of the specified performance goals and the executive’s personal performance factor and the executive’s continued service through the applicable vesting date. The first 40% of the Target Bonus Award, if earned, will be paid via these restricted stock units, with any excess actual bonus award to be paid in cash no later than March15, 2019.

Any amounts paid under the Iridium Bonus Plan are subject to recoupment from participants in accordance with any clawback policy that the Company is required to adopt to applicable laws.

The description of the Iridium Bonus Plan contained herein is a summary of the material terms of the Iridium Bonus Plan, does not purport to be complete, and is qualified in its entirety by reference to the Iridium Bonus Plan, which will be filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ending March31, 2018.

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About Iridium Communications Inc. (NASDAQ:IRDM)

Iridium Communications Inc. is a satellite communications company that offers mobile voice and data communications services. The Company utilizes mesh architecture to route traffic across its satellite constellation using radio frequency crosslinks between satellites. Its lines of business include land mobile, machine to machine, maritime, aviation and government. Its commercial services include postpaid mobile voice and data satellite communications services; prepaid mobile voice satellite communications services; broadband data services; machine-to-machine services; Iridium push-to-talk service, and other services. It provides services to businesses, the United States and foreign governments, non-governmental organizations and consumers. The Company sells its products and services to customers through a wholesale distribution network of approximately 75 service providers, approximately 200 value-added resellers and over 45 value-added manufacturers.

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