EMPLOYMENT AGREEMENT
--------------------
This EMPLOYMENT AGREEMENT (the "Agreement") is entered into as of the
7th day of February, 1998, by and between Integrated Space Systems, Inc., a
California corporation (the "Company"), and Xxxxxx X. Xxxxx ("Employee").
RECITALS
A. The Company is principally engaged in the business of providing
engineering analysis, design, test support and field engineering for
aerospace-related projects.
B. Effective this date, SpaceDev, Inc., a Colorado corporation ("SPDV")
has acquired all of the issued and outstanding capital stock of the Company (the
"Acquisition"). In connection with and as a material condition to completion of
the Acquisition, certain shareholders and management employees of the Company,
including Employee, have agreed to enter into employment agreements with the
Company.
C. The Company desires to retain Employee as Chief Financial Officer of
the Company, and Employee desires to accept such employment on the terms and
conditions set forth herein.
NOW, THEREFORE, based upon the following covenants, conditions and
promises the parties hereto do hereby agree as follows:
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1. EMPLOYMENT AND DUTIES. Subject to the terms and conditions set forth
herein, the Company hereby employs Employee, and Employee hereby accepts such
employment with the Company, as the Chief Financial Officer of the Company, and
his duties shall be consistent with such positions.
2. TERM OF EMPLOYMENT. The term of Employee's employment under this
Agreement shall commence on and as of the date hereof and shall continue
hereafter for a period of 36 months, subject to early termination as provided
for elsewhere in this Agreement. The "term" of this Agreement shall mean and
refer to such 36-month period (or any earlier termination thereof pursuant to
Section 5 hereof).
3. EXTENT OF SERVICE. During the term hereof, Employee agrees to and
shall devote his full time to the performance of his duties hereunder, it being
the intent of the parties hereto that Employee shall devote his best efforts to
furthering, promoting and developing the business, activities and interests of
the Company. Employee acknowledges that the "interests of the Company" include
the business, activities and interests of SPDV, its subsidiaries and affiliates,
and as a result, Employee may also be requested by the Chief Executive Officer
or Board of Directors of the Company to undertake various management
responsibilities on a full- or part-time basis for or on behalf of SPDV for all
or part of the term.
4. COMPENSATION. As compensation for the services which Employee is to
render hereunder, the Company shall pay Employee the following aggregate annual
salary for and with respect to each year (annual periods ending with the
anniversary date of the date of this Agreement) during the term hereof: $60,000
for the first year, $80,000 for the second year and $100,000 for the third year.
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Employee's salary during each of such years shall be paid in accordance with the
normal payroll practices of the Company. At the end of each year during the term
hereof, the Board of Directors of the Company may review the compensation of
Employee hereunder and if it, in its sole discretion, believes it to be
justified, may pay to Employee a cash bonus for and with respect to such year.
(a) The Company will provide Employee with such fringe
benefits as are within the Company's policy as approved by the Board of
Directors of the Company. The Company shall also reimburse Employee for expenses
reasonably incurred by him in carrying out his duties hereunder, including
travel, lodging and reasonable entertainment expenses, promptly after
presentation to the Company of receipts or other documents evidencing the
incurrence of such expenses providing that such expenses have been approved in
advance by the Chief Executive Officer of the Company or are otherwise
consistent with policy on such matters as established by the Company's Board of
Directors.
(b) The Company shall cause SPDV to grant to Employee options
to purchase shares of common stock of SPDV in the amounts and upon the terms set
forth in Exhibit A attached hereto and incorporated herein by this reference.
5. TERMINATION OF EMPLOYMENT FOR GOOD CAUSE. The Company may terminate
the employment of Employee for "good cause" by giving written notice thereof to
Employee. For the purposes of this Agreement, "good cause" shall mean only
Employee's (i) drug, alcohol or other substance abuse during regular business
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hours or to such extent as to materially affect the performance of his duties
hereunder, (ii) commission of a crime directly related to his employment
hereunder, (iii) conviction of a felony involving moral turpitude, (iv)
negligence, gross mismanagement or willful misconduct in the management of the
business and affairs of the Company or failure to perform such duties as may
reasonably be directed by the Board of Directors and as may be reasonably
consistent with the duties and obligations of Employee's office, or (v) breach
of any material provision of this Agreement. In the event the employment of the
Employee is terminated pursuant to this Section 5, the Company shall have no
further liability to Employee other than for compensation earned but not yet
paid. In the event the Company contends that it had good cause to terminate the
employment of Employee pursuant to clause (i), (ii) or (iii) of this Section 5,
the Company shall specify in said written notice the effective date of
termination of Employee's employment, which date may, in the Company's sole
discretion, be the date of such notice. In the event the Company contends that
it has good cause to terminate the employment of Employee pursuant to clause
(iv) or (v) of this Section 5, the Company shall set forth in said written
notice reasonable details of Employee's acts or conduct which the Company
alleges constitutes a willful and gross mismanagement of business and affairs of
the Company or a breach of material provision of this Agreement, as the case may
be. The written notice shall also specify what, if anything, Employee could do
to cure or eliminate the alleged "good cause" for termination if the matter is
susceptible of cure. If Employee performs the required services or modifies
Employee's performance to correct the matters complained of within sixty (60)
days of receipt of the notice, Employee's breach will be deemed cured. However,
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if the nature of the matters complained of are such that more than sixty (60)
days are reasonably required to correct the matters complained of, then his
breach will be deemed cured if he commences to correct such matters within the
sixty (60) day period and thereafter diligently prosecutes such correction to
completion, but not to exceed one additional sixty (60) day period. If Employee
does not modify his performance to correct or commence to correct the matter
complained of within the sixty (60) day period or any extension thereof, the
Company shall have the right to terminate this Agreement at the end of such (60)
day period or any extension thereof. It is understood that Employee's
performance hereunder shall not be deemed unsatisfactory solely on the basis of
any economic performance of the Company because such performance will depend in
part on a variety of factors over which Employee has little control.
6. TERMINATION BY DEATH OR INCAPACITY. The Company may terminate the
employment of Employee by written notice to Employee if, during the term of this
Agreement, Employee shall become incapable of fulfilling his obligations
hereunder because of injury or physical or mental illness which shall exist or
may reasonably be anticipated to exist for a period of six (6) consecutive
months or for an aggregate of six (6) months during the term hereof. The death
of Employee shall automatically terminate the term of Employee's employment. In
the event the employment of Employee is terminated by Employee's death or by the
Company pursuant to this Section 6 because of injury or physical or mental
illness, the Company shall pay Employee, or Employee's heir(s) (in the event of
death), all compensation of Employee earned but not yet paid up to and through
the day upon which Employee's death occurs or this Agreement is terminated by
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the Company due to Employee's incapacity, as applicable, or in accordance with
any written policy applicable to other executives of the Company in effect at
the time of Employee's death or incapacity, if more favorable.
7. TERMINATION WITHOUT CAUSE. The Company may terminate the employment
of Employee without cause at any time in which event Employee and the Company
agree that the sole amounts due and owing to Employee hereunder (whether as
"severance pay" or otherwise) shall be $100,000, $70,000 or $60,000 for a
termination of employment without cause during year one, year two or year three
of the term, respectively.
8. NONCOMPETITION; NONSOLICITATION; CONFIDENTIAL INFORMATION.
(a) Employee covenants and agrees that, during the term he will not,
directly or indirectly, whether individually or as an officer, director,
employee or consultant, become employed by, or become a partner in or a
stockholder owning more than one percent (1%) of, any business which is engaged
in the business of providing aerospace engineering services and other related
consulting or any other business which is similar to or competitive with the
business now or at any time during the term of this agreement being conducted by
SPDV and/or the Company.
(b) Employee acknowledges that it is the policy of the Company (for
purposes of this subsection 8 (b) the term ACompany@ shall also, refer to SPDV,
any subsidiary, parent or other affiliate of the Company or of SPDV) to maintain
as secret and confidential all valuable and unique information heretofore or
hereafter acquired, developed or used by the Company relating to the business,
operations, employees and/or clients of the Company, including SPDV, which gives
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the Company a competitive advantage in its industry, including, without
limitation: information about net costs, profits, markets, suppliers,
technology, key personnel and consultants, pricing policies, operational
methods, designs, technical and systems processes, relationships with
universities, the National Aeronautics and Space Administration and other
governmental agencies, and other business affairs and methods and other
information not readily available to the public, plans for future developments,
operating manuals, financial statements, forecasts and operating data and
business plans (all such information is hereinafter referred to as "Confidential
Information"). Employee recognizes and acknowledges that the services heretofore
performed by Employee and those to be performed by Employee are special and
unique, and that by reason of his duties, he has acquired and will acquire
Confidential Information. Employee recognizes that all such Confidential
Information is the property of the Company. In consideration of the Company's
entering into this Agreement, Employee agrees that: (i) Employee shall never,
directly or indirectly, use, publish, disseminate or otherwise disclose any
Confidential Information obtained during his employment by the Company (whether
obtained prior to, during or after the term of this Agreement) without the prior
written consent of the Company's Board of Directors; and (ii) during the term of
this Agreement, he shall exercise all due and diligent precautions to protect
the integrity of the Company's designs, processes, systems, know-how,
statistical data and compilations, agreements, contracts, manuals or other
documents embodying any Confidential Information. Upon termination of Employee's
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employment by the Company and at any other time upon request of the Company, he
shall return all such documents (and copies thereof) embodying any Confidential
Information in his possession or control. Employee agrees that the provisions of
this subparagraph (b) are reasonable and necessary to protect the proprietary
rights of the Company in the Confidential Information and its trade secrets,
goodwill and reputation. The provisions of this subparagraph (b) shall not apply
to Confidential Information (i) which is known generally to the public, (ii)
which otherwise comes into the public domain without the fault of Employee, or
(iii) which Employee obtains from sources other than the Company.
(c) For a period of 36 months after the termination of this Agreement
for any reason other than a termination by the Company under Section 7 (or for
such a lesser period of time as may be determined by a court of law or equity to
be a reasonable limitation on Employee), Employee shall not: (i) solicit,
directly or indirectly, any director, officer or employee of the Company to
discontinue that individual's status of employment with the Company; (ii) become
employed in any activity similar to or competitive with the business of the
Company or of SPDV being conducted at the time of termination of this Agreement
anywhere in the world; or (iii) solicit or cause or authorize, directly or
indirectly to be solicited, for or on behalf of himself or any third party, from
customers, clients, consultants or other providers of goods and services (all of
whom are collectively referred to as "Company Clients") of the Company or of
SPDV, any business which is competitive with the Company or with SPDV anywhere
in the world. "Clients" shall also include persons whom or entities which the
Company has identified and targeted (at or prior to the date of termination of
this Agreement) as intended customers or clients of SPDV:
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(d) In the event of a termination by the Company under Section 7 of
this agreement clauses (ii) and (iii) of subsection 8 (c) above shall be
adjusted as follows:
(1) Employee shall not, for a period of 18 months following
such termination: (i) become an officer or director, or maintain an ownership
interest of more than one percent in any company that is directly competitive
with the business of SPDV; or (ii) be employed by or consult to any business
which is directly competitive with SPDV anywhere in the world. Nothing set forth
herein shall prevent Employee following termination of this Agreement from
securing any engineering related employment at any aerospace or other company,
or division thereof, which is not competitive with the business of SPDV.
(2) Employee shall not, for a period of 24 months following
such termination solicit or cause or authorize directly or indirectly to be
solicited for or on behalf of himself or any third party any customer of SPDV to
provide to that customer goods or services directly competitive with the goods
or services provided to that customer by SpaceDev. Nothing set forth herein
shall prevent Employee following termination of this Agreement from securing any
engineering related employment at any aerospace or other company, or division
thereof, which is not competitive with or providing services to SPDV.
(e) If the covenants contained in this Section 8 are violated, or
threatened to be violated, Employee acknowledges and agrees that such violation
or threatened violation will cause irreparable damage to the Company and SPDV,
that the remedy at law of the Company or of SPDV will be inadequate and that the
Company and SPDV shall, in addition to, but not in limitation of, any other
rights or remedies available at law or in equity, be entitled to temporary and
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permanent injunctive relief and/or specific performance without the necessity of
proving actual damage.
(f) Employee acknowledges that the provisions of this Section 8 are
fair and equitable and are required in connection with the Acquisition and
continued employment hereunder. The parties hereto acknowledge that the
provisions of this Section 8 shall survive the termination of this Agreement.
9. EMPLOYEE'S RIGHTS AND BENEFITS PERSONAL. Except as may herein
otherwise be specifically provided, the rights, benefits and obligations of
Employee under this Agreement are personal to Employee, and no such rights or
benefits shall be subject to voluntary or involuntary alienation, assignment or
transfer.
10. ENTIRE AGREEMENT; MODIFICATION; WAIVER. This Agreement constitutes
the entire agreement between the parties pertaining to the subject matter
contained in it and supersedes all prior written or oral agreements,
representations, understandings and/or discussion between the parties relating
thereto. No supplement, modification or amendment of this Agreement shall be
binding unless executed in writing by the party making the waiver.
11. NOTICES. Any notice required or permitted hereunder shall be given
in writing and shall be conclusively deemed effectively given upon personal
delivery, or three (3) business days after deposit in the United States mail, by
registered or certified mail (or air mail, if notice shall be sent outside the
United States), return receipt requested, postage prepaid, or two (2) days after
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delivery to a nationally known air courier or delivery company, addressed to the
applicable party hereto at the address specified below (or as otherwise directed
in a notice given in accordance herewith):
If to the Company, to: Integrated Space Systems, Inc.
0000 Xxxxxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxxxxxx 00000
If to SPDV, to: SpaceDev, Inc.
P. X. Xxx 0000
Xxxxxxxxx Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxx X. Xxxxxx,
Chief Executive Officer
If to Employee, to: Xxxxxx X. Xxxxx, CFO
00000 Xxxxxxxxxx Xxxxx
Xxxxx, Xxxxxxxxxx 00000
12. EFFECT OF HEADINGS. The subject headings of this Agreement are
included for purposes of convenience only, and shall not affect the construction
or interpretation of any of its provisions.
13. ARBITRATION; ATTORNEYS' FEES. Any controversy or claim arising out
of or to this Agreement, or the breach hereof, shall be resolved by
JAMS/ENDispute in accord with its rules and regulations and judgment on the
award so rendered may be entered in any court having jurisdiction thereof. Any
such proceeding shall be had in the County of San Diego, State of California. If
any action or proceeding is brought to enforce any provisions of this Agreement,
the prevailing party shall be entitled to its costs and expenses in connection
therewith, including without limitation reasonable attorneys' fees.
14. INJUNCTIVE RELIEF. Employee hereby recognizes, acknowledges and
agrees that in the event of any breach by Employee of any of his covenants,
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agreements, duties or obligations hereunder, the Company would suffer great and
irreparable harm, injury and damage, the Company would encounter extreme
difficulty in attempting to prove the actual amount of damages suffered by the
Company as a result of such breach, and the Company would not be reasonably or
adequately compensated by an award of damages in any action at law. Employee
therefore acknowledges and agrees that, in addition to any other remedy the
Company may have at law, in equity, by statute or otherwise, in the event of any
breach by Employee of any of his covenants, agreements, duties or obligations
hereunder, the Company shall be entitled to seek and receive temporary,
preliminary and permanent injunctive and other equitable relief from any court
of competent jurisdiction to enforce any of the rights of the Company, or any of
the covenants, agreements, duties or obligations of Employee hereunder, and/or
otherwise to prevent the violation of any of the terms or provisions hereof, all
without the necessity of proving the amount of any actual damage to the Company
or any affiliate thereof resulting therefrom; PROVIDED, HOWEVER, that nothing
contained in this Section 14 shall be deemed or construed in any manner
whatsoever as a waiver by the Company of any of the rights which the Company may
have against Employee at law, in equity, by statute or otherwise arising out of,
in connection with or resulting from the breach by Employee of any of his
covenants, agreements, duties or obligations hereunder.
15. APPLICABLE LAW. The validity, interpretation and enforcement of
this Agreement shall be governed by the laws of the State of California except
that the Federal Arbitration Act shall govern any arbitration proceeding.
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16. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which when
taken together shall constitute one and the same Agreement.
17. SEVERABILITY. If any provision of this Agreement shall be declared
invalid, illegal and/or unenforceable, such provision shall be severed and the
remaining provisions shall continue in full force and effect.
18. SUCCESSOR AND ASSIGNS. The provisions hereof shall inure to the
benefit of, be binding upon, and be enforceable by the successors and assigns of
the Company.
19. ASSIGNMENT; SUCCESSORS; AFFILIATES. The Company may assign this
Agreement (or the interest of the Company herein) to any affiliate of the
Company or to any entity which is a party to a merger, reorganization, or
consolidation with the Company or to a subsidiary of the Company or to an entity
or entities acquiring substantially all of the assets of the Company or of any
division with respect to which Employee is providing services (providing any
such assignee assumes the Company's obligation under the Agreement). Employee
shall, if requested by the Company, perform Employee's services and duties, as
specified in this Agreement, to or for the benefit of any affiliate of the
Company, including, without limitation, any parent or subsidiary of the Company
or any other subsidiary of any parent of the Company. Upon such assignment,
acquisition, merger, consolidation, or reorganization, the term "Company" as
used herein shall be deemed to refer to such assignee or such successor entity.
Employee shall not have the right to assign Employee's interest in this
Agreement, any rights under this Agreement or any duties imposed under this
Agreement nor shall Employee (or Employee's spouse, heirs, beneficiaries,
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administrators or executors) have the right to pledge, hypothecate or otherwise
encumber Employee's right to receive compensation hereunder without the consent
of the Company.
20. FURTHER ASSURANCES. The Company and Employee each agree to execute
and deliver any and all additional instruments and to perform any and all
additional acts deemed by either party to be necessary or proper to carry into
effect the terms, conditions and provisions of this Agreement.
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the day and year first above written.
EMPLOYEE: THE COMPANY:
Integrated Space Systems, Inc.,
---------------------------- a California corporation
Xxxxxx X. Xxxxx
By
----------------------------
Its President and Chief
Executive Officer
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THE ISSUANCE AND TRANSFER OF THE STOCK REPRESENTED BY THIS OPTION IS SUBJECT TO
RESTRICTIONS. THIS OPTION HAS BEEN ISSUED IN RELIANCE UPON THE REPRESENTATION OF
THE HOLDER THAT THE STOCK WILL BE ACQUIRED FOR INVESTMENT PURPOSES AND NOT WITH
A VIEW TOWARDS THE RESALE OR OTHER DISTRIBUTION THEREOF. NEITHER THIS OPTION NOR
THE SHARES ISSUABLE UPON THE EXERCISE OF THIS OPTION, HAVE BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 OR ANY STATE SECURITIES LAWS
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STOCK OPTION AGREEMENT
SpaceDev, Inc. (the "Company"), desiring to afford an opportunity to
the Grantee named below to purchase certain shares of the Company's common
stock, to provide the Grantee with an added incentive as an employee of the
Company, hereby grants to Grantee, and the Grantee hereby accepts, an option to
purchase the number of such shares optioned as specified below (the "Option"),
during the term ending at midnight (prevailing local time at the Company's
principal offices) on the expiration date of this Option as specified below, at
the option exercise price specified below, subject to and upon the following
terms and conditions.
1. IDENTIFYING PROVISIONS. As used in this Option, the following
terms shall have the following respective meanings:
(a) Grantee: Xxxxxx X. Xxxxx
(b) Date of Grant shall be February 7, 1998.
(c) Number of shares optioned, shall mean that number of
shares set forth in section 2 below.
(d) Each option exercise price per share shall be the sum
amount set forth next to each of the respective
Triggering Events as defined in section 2 below:
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2. VESTING AND TERM OF OPTION. This Option is not exercisable in any
part until one (1) year after the Date of Grant, and then only upon achievement
of the Triggering Events set forth below:
(a) After the Company has constructed, completed and tested its first
spacecraft and certified that it is "ready to launch," the Option shall vest in
the Grantee to the extent of 20,000 shares optioned hereunder at an exercise
price of $1.50 per share;
(b) When the Company has generated $750,000 in pretax profits in any
one fiscal year from customers and business developed from the Integrated Space
Systems' ("ISS") base of business and/or business developed from such base or
services, the Option shall vest in the Grantee to the extent of an additional
20,000 shares optioned hereunder at an exercise price of $ 2.00 per share;
(c) On the successful launch of the Company's first Spacecraft, the
Option shall vest in the Grantee to the extent of an additional 20,000 shares
optioned hereunder at an exercise price of $2.50 per share;
(d) On the successful completion of the rendezvous and completion of
the "Minimum Mission," as defined therefor, the Option shall vest in the Grantee
to the extent of an additional 20,000 shares optioned hereunder at an exercise
price of $3.00 per share;
(e) When the Company has achieved fifteen percent (15%) profit margin
(as determined by the Company's independent certified public accountants) for
two (2) consecutive fiscal years from customers or business developed from the
Integrated Space Systems' ("ISS") base of business and/or business developed
from such base or services (and not from any other business of the Company), the
Option shall vest in the Grantee to the extent of an additional 20,000 shares
optioned hereunder at an exercise price of $3.50 per share;
Upon the occurrence of any Triggering Event, subject to the other
provisions of this Option, Grantee may exercise this Option for all or any
portion of the number of shares optioned for which the Option is then vested.
Subject to the other provisions hereof, each Option shall have a total term of
seven (7) years from Date of Grant, and upon expiration of such seven (7) year
term, any Option not exercised in full shall expire and may thereafter no longer
be exercised.
3. RESTRICTIONS ON EXERCISE. The following additional restrictions
shall apply to the exercise of the Option:
(a) TERMINATION OF EMPLOYMENT. If the Grantee's employment by
the Company or any of its subsidiaries is terminated for any reason other than
death, only that portion of this Option exercisable at the date of such
termination of employment may thereafter be exercised, and it may not be
exercised more than three (3) months after such date of termination nor after
the expiration date of this Option, whichever date is sooner, unless such
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termination is due to the Grantee's permanent and total disability, in which
case such period of three (3) months shall be extended to one (1) year. In all
other respects, this Option shall terminate upon such termination of employment.
(b) DEATH OF GRANTEE. If the Grantee shall die during the term
of this Option, the Grantee's legal representative or representatives, or the
person or persons entitled to do so under the Grantee's last will and testament
or under applicable intestate law, shall have the right to exercise this Option,
but only for the number of shares as to which the Grantee was entitled to
exercise this Option in accordance with Section 2 hereof on the date of his
death, and such right shall expire and this Option shall terminate one (1) year
after the date of the Grantee's death or on the expiration date of this Option,
whichever date is sooner. In all other respects, this Option shall terminate
upon such termination of employment.
4. NON-TRANSFERABLE. The Grantee may not transfer this Option except by
will or the laws of descent and distribution. This Option shall not be otherwise
transferable, assigned, pledged, hypothecated or disposed of in any way, whether
by operation of law or otherwise, and shall be exercised during the Grantee's
lifetime only by the Grantee or his guardian or legal representative.
5. ADJUSTMENTS AND CORPORATE REORGANIZATIONS. If the outstanding shares
of the class then subject to this Option are increased or decreased, or are
changed into or exchanged for a different number or kind of shares or
securities, as a result of one or more reorganizations, recapitalizations, stock
splits, reverse stock splits, stock dividends or the like, appropriate
adjustments shall be made in the number and/or kind of shares or securities for
which the unexercised portions of this Option may thereafter be exercised, all
without any change in the aggregate exercise price applicable to the unexercised
portions of this Option, but with a corresponding adjustment in the exercise
price per share or other unit. No fractional share of stock shall be issued
under this Option or in connection with any such adjustment. Such adjustments
shall be made by or under authority of the Company's Board of Directors whose
determinations as to what adjustments shall be made, and the extent thereof,
shall be final, binding and conclusive.
Upon the dissolution or liquidation of the Company, or upon a
reorganization, merger or consolidation of the Company as a result of which the
outstanding securities of the class then subject to this Option are changed into
or exchanged for cash or property or securities not of the Company's issue, or
upon a sale of substantially all the property of the Company to, or the
acquisition of stock representing more than eighty percent (80%) of the voting
power of the stock of the Company then outstanding by another corporation or
person, this Option shall terminate, unless provision be made in writing in
connection with such transaction for the assumption of options theretofore
granted, or the substitution for such options of any options covering the stock
of a successor corporation, or a parent or subsidiary thereof, which appropriate
adjustments as to the number and kind of shares and prices, in which event this
Option shall continue in the manner and under the terms so provided. If this
Option shall terminate pursuant to the foregoing sentence, the Grantee shall
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have the right, at such time prior to the consummation of the transaction
causing such termination to exercise the unexercised portions of this Option.
6. MANNER OF EXERCISE. This Option may be exercised by the Grantee or
other person then entitled to exercise it by giving four (4) business days'
written notice of exercise to the Company specifying the number of shares to be
purchased and the total purchase price, accompanied by a check to the order of
the Company in payment of such price. If the Company is required to withhold on
account of any present or future tax imposed as a result of such exercise, the
notice of exercise shall be accompanied by a check to the order of the Company
in payment of the amount of such withholding.
7. ALTERNATIVE PAYMENT WITH STOCK. Notwithstanding the foregoing
provisions requiring payment by check, payment of such purchase price or any
portion thereof may be made with shares of stock of the same class as the shares
then subject to this Option, if shares of that class are then publicly traded
(as defined below), such shares to be credited toward such purchase price on the
valuation basis set forth below, in which event the stock certificates
evidencing the shares so to be used shall accompany the notice of exercise and
shall be duly endorsed or accompanied by duly executed stock powers to transfer
the same to the Company; provided, however, that such payment in stock instead
of cash shall not be effective and shall be rejected by the Company if (i) the
Company is then prohibited from purchasing or acquiring shares of the class of
its stock thus tendered to it, or (ii) the right or power of the person
exercising the Option to deliver such shares in payment of said purchase price
is subject to the prior interests of any other person (excepting the Company),
as indicated by legends upon the certificate(s) or as known to the Company. For
purposes of this paragraph: (a) "publicly traded" shares are those which are
listed or admitted to unlisted trading privileges on a national securities
exchange or as to which bid and offer quotations are reported in the automated
quotation system ("NASDAQ") operated by the National Association of Securities
Dealers, Inc. ("NASD") and (b) for credit toward the purchase price, shares so
surrendered shall be valued as of the day immediately preceding the delivery to
the Company of the certificate(s) evidencing such shares (or, if such day is not
a trading day in the U.S. securities markets, on the nearest preceding trading
day), on the basis of the closing price of stock of the class as reported with
respect to the market (or the composite of the markets, if more than one) in
which such shares are then traded or, if no such closing prices are reported,
the lowest independent offer quotation reported therefor in Level 2 of NASDAQ,
or, if no such quotations are reported, on the basis of the most nearly
comparable valuation method acceptable to the Company.
8. RIGHTS IN SHARES BEFORE ISSUANCE AND DELIVERY. No person shall be
entitled to the privileges of stock ownership in respect of any shares issuable
upon exercise of this Option, unless and until such shares have been issued to
such person as fully paid shares.
9. REQUIREMENTS OF LAW AND OF STOCK EXCHANGES. By accepting this
Option, the Grantee represents and agrees for himself and his transferees by
will or the laws of descent and distribution that, unless a registration
statement under the Securities Act of 1933 is in effect as to shares purchased
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upon any exercise of this Option, (i) any and all shares so purchased shall be
acquired for his personal account and not with a view to or for sale in
connection with any distribution, and (ii) each notice of the exercise of any
portion of this Option shall be accompanied by a representation and warranty in
writing, signed by the person entitled to exercise the same, that the shares are
being so acquired in good faith for his personal account and not with a view to
or for sale in connection with any distribution.
No certificate or certificates for shares of stock purchased
upon exercise of this Option shall be issued and delivered prior to the
admission of such shares to listing on notice of issuance on any stock exchange
on which shares of that class are then listed, nor unless and until, in the
opinion of counsel for the Company, such securities may be issued and delivered
without causing the Company to be in violation of or incur any liability under
any federal, state or other securities law, any requirement of any securities
exchange listing agreement to which the Company may be a party, or any other
requirement of law or of any regulatory body having jurisdiction over the
Company.
10. EMPLOYMENT BY THE COMPANY. Nothing contained in this Option shall
be construed to confer upon Grantee any right to be continued in the employ of
the Company or any of its subsidiaries, or to limit the right of the Company or
any subsidiary to retire, request the resignation of or discharge Grantee as an
employee at any time, with or without cause.
11. STOCK OPTION PLAN. This Option is subject to, and the Company and
the Grantee agree to be bound by, all of the terms and conditions of any Plan
adopted by the Board of Directors and Shareholders for this Option to qualify
under a corporate Stock Purchase Plan Option or Incentive Stock Option as
defined in Internal Revenue Code sections 421, 422, 423, provided that no such
plan adopted by the Company shall deprive Grantee, without his consent, of this
Option or any of his rights hereunder. If all or any part of the Options shall
not qualify under any such future Plan adopted by the Company the Options shall
nevertheless be valid and carried into effect. The Board of Directors of the
Company or its Committee established for the purpose of adopting such a Plan is
vested with final authority to adopt, interpret and construe any such Plan. A
copy of any such Plan, and any future amendments thereto, shall be distributed
to the Grantee immediately upon adoption and be available for inspection during
business hours by the Grantee or other persons entitled to exercise this Option
at the Company's principal office.
12. RESTRICTED STOCK. Grantee agrees, recognizes, and acknowledges that
any stock issued to him pursuant to his exercise of this Option shall be subject
to the terms and conditions as may be issued by the Securities and Exchange
Commission in connection with future public offering of the stock of the
Company.
13. NOTICES. Any notice to be given to the Company shall be addressed
to the Company in care of its Secretary at its principal office, and any notice
to be given to the Grantee shall be addressed to him at the address given
beneath his signature hereto or at such other address as the Grantee may
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hereafter designate in writing to the Company. Any such notice shall be deemed
duly given when enclosed in a properly sealed envelope addressed as aforesaid,
registered or certified mail, and deposited, postage and registry or
certification fee prepaid, in a post office or branch post office regularly
maintained by the United States Postal Service.
IN WITNESS WHEREOF, the Company has granted this Option on the Date of
Grant specified above.
SPACEDEV, INC.
BY: /s/ Xxxxx Xxxxxx
-------------------------------------
Xxxxx Xxxxxx, Chief Executive Officer
ACCEPTED AND AGREED:
GRANTEE:
-------------------------------------
NAME
ADDRESS
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