EXHIBIT 10.1
EXECUTIVE EMPLOYMENT AGREEMENT
THIS EXECUTIVE EMPLOYMENT AGREEMENT (this "AGREEMENT") is made and entered
into December 20, 2005 (the "EFFECTIVE DATE"), by and between SpaceDev, Inc., a
Colorado corporation (together with its successors, the "COMPANY"), and Xxxx X.
Xxxxxxxxx ("EXECUTIVE").
RECITALS
WHEREAS, the Company desires to employ Executive in the capacity of Chief
Executive Officer and Vice Chairman of the Company, and Executive desires to
accept such employment; and
WHEREAS, the parties desire and agree to enter into an employment relationship
by means of this Agreement.
AGREEMENT
NOW, THEREFORE, for and in consideration of the mutual covenants and
agreements contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. TERM.
(a) Term; At-Will Employment. The initial term of Executive's employment
hereunder shall be for a period of two (2) years (the "TERM"), commencing on
December 30, 2005 (the "EFFECTIVE DATE") and continuing through the second
anniversary date thereof, subject to earlier termination as hereinafter
specified. The Company and Executive acknowledge that Executive's employment
with the Company is "at-will," as defined under applicable law, and that either
party may terminate Executive's employment with the Company at any time for any
reason, and with or without Cause (as defined below) or notice. If Executive's
employment terminates for any reason, neither Executive nor the Company shall be
entitled to any payments, benefits, damages, award or compensation other than as
expressly provided in this Agreement.
(b) Renewal. This Agreement will be automatically renewed for an additional
twelve-month period after the expiration of the Term (the "RENEWAL TERM") unless
either party provides written notice to the other at least thirty (30) days
prior to the expiration of the Term of its decision not to renew this Agreement.
If the Agreement is not so renewed, it will terminate by its own terms as set
forth herein and the Company shall have no further obligation to pay Executive
any compensation or any other amounts, except as provided herein or as otherwise
required by law.
2. POSITION AND RESPONSIBILITIES.
(a) Position. During the Term and any Renewal Term, Executive shall be
employed by the Company with the title of Chief Executive Officer and Vice
Chairman of the Company. Executive shall perform all services appropriate to
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those positions and as assigned by the Company's Board of Directors (the
"BOARD"). Such services shall be consistent with the Outline of Executive Roles
and Responsibilities for Chief Executive Officer and Vice Chairman, a copy of
which is attached hereto as Exhibit A, as such Outline may be modified by the
Board from time to time due to changed business, market or economic conditions
(as so modified, the "EXECUTIVE ROLES"), provided that such modifications shall
be generally consistent with such positions. Executive, in such capacities,
shall faithfully perform for the Company the duties of said offices and shall
perform such other duties of an executive, managerial or administrative nature,
consistent with the Executive Roles and the offices held by Executive, as shall
be reasonably specified and designated from time to time by the Board,
including, in the discretion of the Board, services to be rendered to and on
behalf of the Company's subsidiaries (the "RELATED ENTITIES"). Executive shall
devote sufficient time and effort to the performance of his duties hereunder,
shall perform his duties with the utmost good faith and integrity and shall do
his utmost to promote the interests of the Company.
(b) Other Activity. During the Term and any Renewal Term, the Executive may
undertake other investment and/or business and/or charitable activities, whether
or not for pecuniary advantage, so long as such other activities (A) do not
interfere with the business of the Company or any Related Entity (B) do not
materially interfere with the performance of his duties to the Company or any
Related Entity, (C) are not competitive with the Company and (D) do not create a
conflict of interest with the Company. It is agreed that if the Company
hereafter engages in business in any industry in which the Company is not so
engaged on the date hereof (or proposes on or before the date hereof to so
engage, and any such proposals have been disclosed as of the date hereof to
Executive), any activities which the Executive engages in prior to such
engagement by the Company shall not be a breach of this Section 2(b), and
Executive may continue to engage in such activities thereafter.
(c) Representations. Executive represents and warrants that his execution
of this Agreement, and the performance of his duties under this Agreement do not
violate any obligations the Executive may have to any other person or entity,
including any obligations with respect to proprietary or confidential
information of any other person or entity.
3. COMPENSATION AND BENEFITS.
(a) Compensation. In consideration of the services to be rendered
under this Agreement, the Company shall pay Executive a base salary of Twenty
Two Thousand Five Hundred Dollars ($22,500) per month (the "BASE SALARY"). Upon
the earlier of (i) completion of the first Acquisition Transaction following the
Effective Date or (ii) eight months following the Effective Date, the Base
Salary shall be increased to Twenty Five Thousand Dollars ($25,000) per month.
Upon the earlier of (i) completion of the second Acquisition Transaction
following the Effective Date or (ii) sixteen months following the Effective
Date, the Base Salary shall be increased to Twenty Seven Thousand Five Hundred
Dollars ($27,500) per month. The Base Salary during the Renewal Term, if any,
shall be at least Twenty Seven Thousand Five Hundred Dollars ($27,500). The
Base Salary shall be payable semi-monthly (or at such other regular intervals as
the Company may establish for payroll from time to time, provided such intervals
or not less frequent than monthly) pursuant to the payroll procedures regularly
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established, and amended, by the Company or its payroll company in their sole
discretion, during the term of this Agreement. The Company shall not reduce the
Base Salary during the Term or any Renewal Term hereof. Executive shall not be
entitled to overtime compensation.
The term, "ACQUISITION TRANSACTION" means any transaction or series of related
transactions completed during the Term or the Renewal Term, if applicable,
involving (i) the acquisition by the Company or any Related Entity of all or
substantially all of the assets or at least 50% of the voting control or the
total amount of outstanding securities (on an as-converted or exchanged to
common stock or unit basis) of an entity unaffiliated with the Company or any
Related Entity or (ii) any reorganization, consolidation, merger or other
similar business combination between the Company or any Related Entity on the
one hand, and an entity unaffiliated with the Company or any Related Entity on
the other hand whereby the Company or any Related Entity, as the case may be, is
the surviving entity in such transaction or transactions; and provided, in the
case of either (i) or (ii) of this sentence, such transaction or transactions
are approved by the Board.
(b) Bonus. In addition to the Base Salary set forth in Section 3(a)
above, the Board, or the Compensation Committee thereof, shall award Executive
bonus compensation at quarterly intervals throughout the Term and the Renewal
Term, if applicable, in the amounts set forth on Exhibit B hereto, subject to
the achievement of the performance objectives listed therein.
(c) Stock Options. The Compensation Committee of the Board of Directors of
the Company has granted Executive Nonqualified Stock Options to purchase up to
1,900,000 shares of common stock of the Company under the terms and conditions
set forth in that certain Stock Option Agreement, a copy of which is attached
hereto as Exhibit C and incorporated herein by reference (the "OPTION
AGREEMENT"), executed by the Company and Executive concurrently with this
Agreement.
(d) Incentive, Savings and Retirement Plans. As Executive becomes eligible,
he shall be entitled to participate in all other incentive, stock option,
savings and retirement plans, policies and programs made available by the
Company to other senior executives of the Company.
(e) Welfare Benefit Plans. Executive shall receive benefits under welfare
benefit plans, policies and programs, including medical, dental, disability and
life insurance as he becomes eligible, consistent with the Company's policy for
other senior executives of the Company.
(f) Paid Vacation. In addition to national and state designated holidays
observed by the Company, Executive shall be entitled to time off per calendar
year as per the Company's paid-time off policy, as amended from time to time, or
such greater number of days as the Company generally affords senior executives
of the Company, with full pay to Executive, beginning upon execution of this
Agreement and the start of each subsequent year of employment hereunder, which
shall accrue ratably during each calendar year of employment. Executive's
vacation shall be taken and expire in accordance with and shall be subject to
the terms of the plans and policies in effect generally as to other senior
executives of the Company.
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(g) Business Expenses. The Company shall reimburse Executive for expenses
reasonably incurred by Executive in carrying out his duties hereunder, promptly
after presentation to the Company of receipts or other documents evidencing the
incurrence of such expenses provided that the reimbursement of such expenses is
consistent with the Company's reimbursement policy.
(h) Travel and Temporary Living Expenses. The Company shall pay Executive
$5,000 per month for the first twelve months following the Effective Date to
cover expenses incurred by Executive in connection with Executive's temporary
living expenses in San Diego County, California and transportation and other
relocation expenses associated with obtaining housing in San Diego County,
California.
(i) Reservation. Subject to the requirements of applicable law, the Company
reserves the right to modify, suspend, or discontinue any and all of the plans,
practices, policies and programs set forth in Sections 3(d) through (g) above
which apply to its senior executives generally at any time as long as such
action is taken generally with respect to other similarly situated senior
executives of the Company.
4. TERMINATION OF EMPLOYMENT.
(a) Upon Death. If Executive dies during the term of this Agreement,
the obligations of the Company to or with respect to Executive, under this
Agreement, shall terminate in their entirety except as otherwise provided under
this Section 4.
(b) Upon Disability. Subject to applicable law, the Company may terminate
Executive's employment upon 30 days written notice of termination if the Board
determines in good faith that Executive is Disabled (as defined below). In the
event that Executive elects to challenge the Board's determination based on a
disagreement regarding a medical diagnosis concerning Executive (it being
understood that all other disagreements shall be resolved pursuant to Section
8), Executive shall notify the Board of his decision, in writing, within 30 days
following his receipt of the Board's written notice of termination pursuant to
this Section 4(b). Within 30 days following Executive's notice of his election
to challenge the Board's determination, the Company and Executive (or his
authorized legal representative) shall in good faith attempt to agree on a
physician for purposes of examining Executive regarding the disputed medical
diagnosis; provided that if the Company and Executive (or his authorized legal
representative) cannot agree on a physician within such 30-day period, then the
Company and Executive (or his authorized legal representative) shall (i) each
select a physician, (ii) use their commercially reasonable efforts to cause
their respective selected physicians mutually to select a third physician, and
(iii) request such third physician to conduct such examination. If any physician
becomes uncooperative during this process, due to no fault of any party hereto,
the process shall be repeated until a cooperating physician is selected to
perform the examination. The medical opinion of the physician so selected shall
be conclusive on the issue of whether Executive is Disabled (to the extent
disagreement on such issue is based on a medical diagnosis). "DISABLED" means
that Executive is prevented or unable, after reasonable accommodation by the
Company, from properly performing his substantial and
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material duties due to a mental or physical injury or illness for a period of
120 consecutive days (not including any vacation days) in any twelve month
period or for a period of 180 total days (not including any vacation days) in
any twelve-month period, and "DISABILITY" has the correlative meaning.
(c) For Cause. Notwithstanding any other provision contained in this
Agreement, the Company may terminate this Agreement immediately, at any time,
for Cause. For purposes of this Agreement, "CAUSE" shall mean:
(i) any willful breach or habitual neglect of Executive's material
duties (other than due to a Disability or death) that he is required to
perform under the terms of this Agreement or the Inventions Agreement (as
defined in Section 6(e) herein);
(ii) conviction for committing (A) a felony, (B) fraud, (C) financial
impropriety, (D) dishonesty or (E) other act of moral turpitude;
(iii) any knowing or deliberate violation of a requirement of the
Xxxxxxxx-Xxxxx Act of 2002 or other material provisions of the federal
securities laws; or
(iv) failure to obey the lawful and reasonable direction of the Board,
or breach of any fiduciary duty owed by Executive to the Company or any
Related Entity or their respective shareholders, in such a way that has had
or will have a direct, substantial and adverse effect on the business,
finances or reputation of the Company or any Related Entity.
Notwithstanding the foregoing, if there exist (without regard to this and the
next succeeding sentence) events or conditions that constitute Cause under
subsection (v) next above, or, to the extent no substantial and adverse effect
has resulted and a cure to is reasonably probable, subsection (v) next above,
the Board shall promptly notify Executive in writing of such events or
conditions, in reasonable detail, including, where applicable and to the extent
practicable, specific examples of acts, omissions, conduct, performance or other
events or conditions which constitute Cause. Executive shall have 30 days from
the date such written notice is given to cure such events or conditions and, if
cured, such events or conditions shall not constitute Cause hereunder. The Board
shall make the final determination regarding the existence of Cause and whether
Executive has effectively cured the events or conditions constituting Cause,
subject to Executive's right to dispute such determinations in accordance with
Section 8 hereof. The Company shall be entitled to suspend Executive's duties
pending determination of the existence of Cause, provided that any period of
suspension shall not count toward the 30-day cure period set forth above, and
provided further, that the compensation and other benefits provided herein shall
continue to be paid and afforded to Executive during such period.
(d) Good Reason. Executive may terminate this Agreement upon 30 days
written notice to the Board for Good Reason. For purposes of this Agreement,
"GOOD REASON" means any of the following events and conditions shall have
occurred without Executive's express written consent:
(i) the assignment to Executive of any substantial and material duties
inconsistent with his status or position with the Company, or any other
action by the Company that results in a substantial diminution in such
status or position;
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(ii) any material breach of this Agreement by the Company; or
(iii) a Change in Control (as defined in the Option Agreement), if
following the Change in Control, Executive is not the chief executive
officer of the Acquiring Corporation (as defined in the Option Agreement),
reporting directly to the board of directors of such Acquiring Corporation.
(iv) Net Exercise is deemed unavailable by the board pursuant to the
last sentence of Section 4.3 of the option agreement.
Notwithstanding the foregoing, if there exist (without regard to this and the
next succeeding sentence) events or conditions that constitute Good Reason,
Executive shall promptly notify the Board in writing of such events or
conditions, in reasonable detail, including, where applicable and to the extent
practicable, specific examples of acts, omissions, conduct, performance or other
events or conditions which constitute Good Reason. The Company shall have 30
days from the date such written notice is given to cure such events or
conditions and, if cured, such events or conditions shall not constitute Good
Reason hereunder.
(e) Without Cause or Without Good Reason. The Board may terminate this
Agreement at any time, for any reason or no reason. Executive may terminate
this Agreement on fifteen (15) days' notice at any time for any reason or no
reason.
(f) Obligations of Executive on Termination. Executive acknowledges and
agrees that all property, including keys, credit cards, books, manuals, records,
notes, contracts, customer lists, Confidential Information (as defined in this
Agreement), documents (in electronic, hard copy or other media), copies of any
of the foregoing on any media and in any tangible form, and any equipment or
other property furnished to Executive by the Company or any Related Entity
(including prior to such Related Entity being one), belong to the Company or
such Related Entity, as the case may be, and shall be promptly returned to the
Company or such Related Entity, as the case may be, or destroyed if in
electronic format, upon termination of employment. Further, upon termination of
employment, Executive shall be deemed to have resigned from all offices and
directorships then held with the Company or any Related Entity.
(g) Obligations of the Company on Termination.
(i) General. As of the date of termination of this Agreement, without
prejudice to any other written agreements the Company and Executive may
enter into from time to time, the Company's obligations to pay Executive or
his estate, beneficiaries, or legal representatives any other compensation
or any other amounts hereunder shall cease, except as provided in this
Section 4(g) or otherwise provided by law.
(ii) Death or Disability. If Executive's employment is terminated by
reason of Executive's death, Disability, this Agreement shall terminate and
the Company's obligations to Executive under this Agreement shall be
limited to (a) the prorated payment of Executive's salary through the date
of termination to the extent not paid by then (his "PRORATED SALARY"); (b)
the payment of earned and accrued bonus or additional payments due
Executive, if any, at the time of termination under any bonus or incentive
plans applicable to Executive or in which Executive participated prior to
termination (his "EARNED INCENTIVE COMPENSATION"); (c) the payment of any
additional bonus or additional payments that would have been payable to
Executive had his employment continued under this Agreement for sixty (60)
days after the termination of Executive's employment under any bonus or
incentive plans applicable to Executive or in
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which Executive participated prior to termination (any such bonuses shall
be paid at the same time and in the same manner as they otherwise would
have been payable to Executive had his employment not been terminated) (the
"CONTINGENT INCENTIVE COMPENSATION"); (d) the payment of any unused accrued
paid time off through the date of termination (his "ACCRUED PTO"); (e) the
payment of any reimbursable business expenses that were incurred by
Executive prior to termination and documented in accordance with the
Company's policies as set forth above and that were not reimbursed by the
Company at the time of the termination of this Agreement (his "REIMBURSABLE
EXPENSES"); and (f) the COBRA coverage described below.
(iii) Cause. If Executive's employment is terminated for Cause, this
Agreement shall terminate and the Company's obligations to Executive under
this Agreement shall be limited to (a) his Prorated Salary; (b) his Earned
Incentive Compensation; (c) his Accrued PTO; and (d) his Reimbursable
Expenses.
(iv) For Other Than Cause; Good Reason; Non-Renewal of this Agreement.
If Executive's employment is Terminated by the Company without Cause or by
Executive for Good Reason, or the Term of this Agreement expires due to the
Company's election not to renew the Agreement in accordance with Section
1(b) above, this Agreement shall terminate and the Company's obligations
to Executive under this Agreement shall be limited to (a) his Prorated
Salary; (b) his Earned Incentive Compensation; (c) his Contingent Incentive
Compensation; (d) his Accrued PTO; (e) his Reimbursable Expenses; (f)
payment of contributions required to maintain continued health coverage
under COBRA for a period of 18 months (the "COBRA COVERAGE"); and (g) the
payment of a lump sum (the "SEVERANCE PAYMENT") equal to: (1) if
Executive's employment is terminated by the Company without Cause, his
then-current Base Salary per month multiplied by the greater of (x) twelve
months and (y) the number of months remaining in the Term (prorated with
respect to any partial month); (2) if Executive's employment is terminated
by Executive for Good Reason, his then-current Base Salary per month
multiplied by the lesser of (x) twelve months and (y) the number of months
remaining in the Term (prorated with respect to any partial month),
provided, however, that such number of months shall not be deemed to be
less than six (6) months for purposes of this subpart (2); and (3) if
Executive's employment is terminated because the Company has elected not to
renew this Agreement in accordance with Section 1(b) above, his
then-current Base Salary per month multiplied by six (6) months. The
Severance Payment shall be paid ten (10) business days following any such
termination; provided, however, that if Executive is deemed a "specified
employee" pursuant to Section 409A(a)(2)(B)(i) of the Internal Revenue Code
of 1986, as amended (the "CODE"), then the Severance Payment shall be paid
on the six-month anniversary of the termination date (in either case, the
"SEVERANCE PAYMENT DATE"). Notwithstanding anything in this Agreement to
the contrary, (i) the Company shall have no obligation to make the
Severance Payment unless on or before the applicable Severance Payment
Date, Executive executes and delivers to the Company a full general release
of claims (excluding claims for amounts payable under this Agreement), in
form and substance reasonably satisfactory to the Company, against the
Company and the Related Entities and their respective officers, directors,
employees and agents, and (ii) the Severance Payment shall be extinguished
if such general release is not executed and delivered to the Company by the
later of (A) the applicable Severance Payment Date or (B) three business
days after Executive's receipt from the Company of a form of general
release to be executed.
PAGE 7
(v) Termination by Executive for Other Than Good Reason. In the event
Executive terminates his employment for other than Good Reason, this
Agreement shall terminate and the Company's obligations to Executive under
this Agreement shall be limited to his (a) Prorated Salary; (b) Earned
Incentive Compensation; (c) Accrued PTO; (d) Reimbursable Expenses; and (e)
COBRA Coverage.
5. WITHHOLDING. All payments made by the Company or any Related Entity
to Executive hereunder shall be subject to applicable payroll deductions and
withholdings.
6. CONFIDENTIAL INFORMATION. "CONFIDENTIAL INFORMATION"means confidential
or proprietary information of the Company or any Related Entity, including trade
secrets, inventions, whether or not patentable, and all know-how related
thereto, any materials for which copyright protection may be obtained,
equipment, equipment configuration, research, development efforts,
methodologies, testing, engineering, manufacturing, marketing, sales, finances,
operations, processes, formulas, methods, techniques, devices, software
programs, projections, strategies and plans, personnel information and customer
information, including customer needs, particular projects and pricing.
Confidential Information does not include any information that: (i) is or
becomes generally available to and known by the public (other than as a result
of a wrongful disclosure by Executive), or (ii) is or becomes available to
Executive on a non-confidential basis from a source other than the Company or
any Related Entity or any of their respective directors, officers, agents,
employees, attorneys, accountants or other representatives (the
"REPRESENTATIVES"), provided that such source is not and was not at the time of
such disclosure bound by a confidentiality agreement with or other obligation of
secrecy to the Company or any Related Entity of which Executive has knowledge.
(b) Executive shall keep secret and retain in strictest confidence, and
shall not use for the benefit of Executive or any person other than the Company
and its Related Entities, the Confidential Information. Executive acknowledges
that the Confidential Information is highly material to the business of the
Company and the Related Entities and that the unauthorized disclosure of such
information to or its use by others could cause substantial harm to the Company,
for which the Company may seek any remedies available at law or in equity. This
covenant shall survive the termination of this Agreement and the Inventions
Agreement.
(c) In the event that Executive is requested or required (by oral
questions, interrogatories, requests for information or documents, subpoenas,
civil investigative demands or similar processes or otherwise by law) to
disclose any Confidential Information, Executive shall (i) provide the Company
with prompt notice thereof and copies of the documents requested or required to
be disclosed so that the Company may seek an appropriate protective order or
waive compliance with the provisions of this Agreement, and (ii) consult with
the Company as to the advisability of the Company's taking of legally available
steps to resist or narrow such request.
(d) Executive therefore expressly agrees that if Executive breaches or
threatens to breach any of the covenants of this Section 6, the parties
acknowledge that the damage or imminent damage to the business or goodwill of
the Company or its Related Entities would be irreparable and extremely difficult
to estimate, making any remedy at law or in damages inadequate. Accordingly,
PAGE 8
the Company shall be entitled to injunctive relief against Executive in the
event of any such breach or threatened breach, in addition to any other relief
(including damages) available to the Company under this Agreement, at law or in
equity.
(e) Concurrently herewith, the Company and Executive are entering into that
certain Inventions and Proprietary Information Agreement, a copy of which is
attached hereto as Exhibit D (the "INVENTIONS AGREEMENT").
7. INDEMNIFICATION. The Company shall indemnify Executive (a) to the
extent provided in the Company's Articles of Incorporation, as the same may be
amended from time to time, and (b) to the maximum extent permitted by law and
(c) pursuant to the Company's standard indemnification agreement with its
officers and directors, as the same may be in effect from time to time, all in
accordance with applicable law. The Company shall maintain Directors and
Officers liability insurance, and arrange for Executive to be covered by such
insurance, in an amount of not less than $5 million. At no time shall the
indemnification provided to the Executive be less than the most favorable
indemnification provided to any other senior executive or Board member of the
Company or any Related Entity.
8. DISPUTE RESOLUTION. All disputes ("CLAIMS") between the parties arising
from or relating to this Agreement or the Company's employment of Executive,
whether or not pursuant to this Agreement, shall be resolved by binding
arbitration as provided in this Section 8. The parties each waive their right to
commence an action in any court to resolve any Claim, and each party agrees not
to initiate or prosecute any lawsuit in any way related to any Claim; provided,
however, that this Section 4(b) shall not apply to any Claim (i) for workers
compensation or unemployment benefits; or (ii) by the Company for injunctive or
other equitable relief; or (iii) the determination of Disability (which shall be
determined pursuant to the procedures set forth in Section 4(b)). With respect
to matters referred to in clause (ii) next above, the Company may seek and
obtain injunctive relief in court, and then proceed with arbitration under this
Agreement.
(b) A Claim must be processed in the manner set forth below, otherwise
the Claim shall be void and deemed waived even if there is a federal or state
statute of limitations which would allow more time to pursue the Claim.
(i) The Claim must initially be noticed in writing by the party
bringing the Claim (the "AGGRIEVED PARTY") to Executive or the Board, as
the case may be (the "OTHER PARTY"). The Aggrieved Party and the Other
Party shall attempt to resolve the Claim in good faith for at least thirty
(30) days following the giving of such notice.
(ii) If the Aggrieved Party and the Other Party cannot resolve the
Claim, then either party may initiate arbitration. The initiating party
shall promptly notify the other of its intent to arbitrate the Claim.
PAGE 9
(c) The arbitration shall be conducted in accordance with the
then-current Model Employment Arbitration Procedures of the American Arbitration
Association ("AAA") before a single arbitrator. The arbitration shall be
conducted in the English language and shall take place in San Diego, California.
(d) Each party shall have the right to take the deposition of three
individuals and any expert witness designated by the other party. Each party
also shall have the right to make requests for production of documents to any
party. Additional discovery may be had only where the arbitrator so orders, upon
a showing of substantial need. All issues related to discovery will be resolved
by the arbitrator. The parties waive the provisions of any law that modifies,
expands or adds to the discovery and deposition rules set forth in this Section
8(d).
(e) The arbitrator shall not have the authority to (i) adopt new policies
or procedures for the Company or any Related Entity; (ii) modify this Agreement
or any existing policies, procedures, wages or benefits of the Company or any
Related Entity; or (iii) hear or decide any matter that was not processed in
accordance with this Agreement. The arbitrator shall have exclusive authority to
resolve any Claim, including a dispute relating to the interpretation,
applicability, enforceability or formation of this Agreement, or any contention
that all or any part of this Agreement is void or voidable. The arbitrator shall
have the authority to award any form of remedy or damages that would be
available in a court, provided that neither party shall seek, and the arbitrator
shall have no authority to award, punitive or exemplary damages.
(f) Each party shall pay one-half of all reasonable and necessary fees of
the AAA and the arbitrator above $10,000. The first $10,000 of such fees shall
be paid by the Company. Notwithstanding the foregoing, the arbitrator shall have
the power to award reimbursement of all of such fees (not including attorneys'
fees), to either party.
(g) The arbitration shall be conducted in private, and will not be open to
the public or the media. The testimony and other evidence presented, and the
results of the arbitration, unless otherwise agreed by both parties, shall be
confidential and shall not be made public or reported by either the Company or
Executive.
(h) The arbitrator shall render a written decision and award (the "AWARD"),
which shall set forth the facts and reasons that support the Award. The Award
shall be final and binding on the Company and Executive.
9. NON-SOLICITATION.
(a) Executive agrees that for the duration of the Term, any Renewal
Term, and for twelve (12) months after the later of the expiration of the Term
or any Renewal Term (collectively, the "COVENANT PERIOD"), Executive shall not,
directly or indirectly, (i) solicit or assist any other Person to solicit any
business (other than business that is not substantially similar to the Business)
from any Person who is at the time a customer of the Company or any Related
Entity or any Person that was a customer of the Company or any Related Entity
within twelve (12) months of the date thereof; or (ii) take any action that
would reasonably be expected to have the effect of discouraging any Person who
is at the time a lessor, licensor, customer, supplier, licensee, business
prospect or other business associate of the Company or any Related Entity or any
Person who had such a relationship with the Company within twelve (12) months of
the date thereof, from entering into or maintaining, or causing it to terminate
or cease, its relationship with the Company or any Related Entity.
PAGE 10
(b) Executive agrees that during the Covenant Period, Executive shall not,
directly or indirectly, (i) solicit or encourage any employee of the Company or
any Related Entity to leave or reduce his or her employment; or (ii) hire or
offer employment, including as a contractor or consultant, to any employee of
the Company or any Related Entity.
(c) Executive agrees that during the Covenant Period, Executive shall not,
directly or indirectly, solicit or encourage any consultant or other contractor
then under contract with the Company or any Related Entity to cease or diminish
his or her work with such entity.
10. FEES. If any action at law or in equity is necessary to enforce or
interpret the terms of this Agreement, the prevailing party shall be entitled to
reasonable attorneys' fees, costs and necessary disbursements in addition to any
other relief to which that party may be entitled. This provision shall be
construed as applicable to the entire contract.
11. TITLES AND HEADINGS. The section and paragraph titles and headings
contained herein are inserted purely as a matter of convenience and for ease of
reference and shall be disregarded for all other purposes, including the
construction, interpretation or enforcement of this Agreement or any of its
terms or provisions.
12. SEVERABILITY. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof; provided
that if any provision of this Agreement, as applied to any party or to any
circumstance, is adjudged by a court, tribunal or other governmental body,
arbitrator or mediator not to be enforceable in accordance with its terms, the
parties agree that such governmental body, arbitrator or mediator making such
determination shall have the power to modify the provision in a manner
consistent with its objectives such that it is enforceable, and to delete
specific words or phrases, and in its reduced form, such provision shall then be
enforceable and shall be enforced.
13. ASSIGNMENT. Neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned without the prior written consent of
each other party; provided, however, that the Company may assign, in its sole
discretion, any or all of its rights, interests and obligations under this
Agreement to any successor by merger or consolidation and that the Executive may
assign, in his sole discretion and subject to applicable law, any or all of his
rights and interests under this Agreement so long as the Executive solely
performs all duties hereunder. Any assignment in violation of the preceding
sentence shall be null and void and of no force or effect. Subject to the
preceding sentence, this Agreement shall be binding upon, inure to the benefit
of, and be enforceable by, the parties hereto and their respective successors
and permitted assigns.
14. AMENDMENTS AND MODIFICATION. This Agreement may not be modified,
amended, altered or supplemented except upon the execution and delivery of a
written agreement executed by each of the parties hereto.
PAGE 11
15. NO WAIVER. The failure of any party hereto to exercise any right, power
or remedy provided under this Agreement or otherwise available in respect hereof
at law or in equity, or to insist upon compliance by any other party hereto with
its obligations hereunder, or any custom or practice of the parties at variance
with the terms hereof shall not constitute a waiver by such party of its right
to exercise any such or other right, power or remedy or to demand such
compliance. No waiver by any party of any default, misrepresentation or breach
hereunder, whether intentional or not, shall be effective unless in writing and
signed by the party against whom such waiver is sought to be enforced, and no
such waiver shall be deemed to extend to any prior or subsequent default,
misrepresentation or breach hereunder or affect in any way any rights arising
because of any prior or subsequent such occurrence.
16. NOTICES. All notices, requests, instructions or other documents to be
given under this Agreement shall be in writing and shall be deemed given, (i)
five business days following sending by registered or certified mail, return
receipt requested, postage prepaid, (ii) when sent if sent by facsimile;
provided, however, that the facsimile is promptly confirmed by telephone
confirmation thereof, (iii) when delivered, if delivered personally to the
intended recipient, and (iv) one business day following sending by overnight
delivery via a national courier service whereby successful delivery is confirmed
by such courier service, and in each case, addressed to a party at the address
for such party on the signature page hereof.
17. GOVERNING LAW. This Agreement and the performance of the transactions
and obligations of the parties hereunder shall be governed by and construed in
accordance with the laws of the State of California applicable to contracts
negotiated, executed and to be performed entirely within such State.
18. THIRD-PARTY BENEFICIARIES. This Agreement is made solely for the
benefit of the parties to this Agreement and their respective permitted
successors and assigns, and no other person or entity shall have or acquire any
right or remedy by virtue hereof except as otherwise expressly provided herein.
19. REPRESENTATION BY COUNSEL. Executive acknowledges that he has been
represented by legal counsel in connection with this Agreement, that he has read
and understands this Agreement, that he is fully aware of its legal effect, and
that he has entered into it freely and voluntarily and based on his own judgment
and not on any representations or promises other than those contained in this
Agreement.
20. IRC SECTION 409A. To the extent that this Agreement or any part thereof
is deemed to be a nonqualified deferred compensation plan subject to Section
409A of the Code and the regulations and guidance promulgated thereunder, (i)
the provisions of this Agreement shall be interpreted in a manner to comply in
good faith with Section 409A of the Code, and (ii) the parties hereto agree to
amend this Agreement, if necessary, for the purposes of complying with Section
409A of the Code promptly upon issuance of any regulations or guidance
thereunder; provided that any such amendment shall not materially change the
present value of the benefits payable to Executive hereunder or otherwise
materially and adversely affect Executive, or the Company or any of the Related
Entities, without the written consent of Executive or the Company, as the case
may be.
PAGE 12
21. SURVIVAL. The terms and provisions of Section 4(g) through this Section
21, inclusive, shall survive the termination hereof and the termination of the
Company's employment of Executive.
22. COUNTERPARTS. This Agreement may be executed in two or more original or
facsimile counterparts, each of which shall be deemed an original but all of
which together shall constitute but one and the same instrument.
23. ENTIRE AGREEMENT. This Agreement, together with the exhibits hereto,
supersedes and replaces any prior employment agreement, understanding or
arrangement (whether written or oral) between the Company and Executive.
24. FACSIMILE EXECUTION. A facsimile, telecopy or other reproduction of
this Agreement may be executed by one or more parties hereto, and an executed
copy of this Agreement may be delivered by one or more parties hereto by
facsimile or similar electronic transmission device pursuant to which the
signature of or on behalf of such party can be seen, and such execution and
delivery shall be considered valid, binding and effective for all purposes. At
the request of any party hereto, all parties hereto agree to execute an original
of this Agreement as well as any facsimile, telecopy or other reproduction
hereof.
[THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK]
PAGE 13
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed on the day and year first above written.
SPACEDEV, INC.
By: /s/ Xxxxx X. Xxxxxx
---------------------------
Xxxxx X. Xxxxxx
Chief Executive Officer
Address: 00000 Xxxxx Xxxxx
Xxxxx, XX 00000
Fax: (000) 000-0000
EXECUTIVE:
/s/ Xxxx X. Xxxxxxxxx
---------------------------
Xxxx X. Xxxxxxxxx
Address: 00000 Xxxxx Xxxxx
Xxxxx, XX 00000
Fax: (000) 000-0000
PAGE 14
EXHIBIT A
OUTLINE OF EXECUTIVE ROLES AND RESPONSIBILITIES
- Corporate Direction -
- Develop with the Chairman the Company's long range strategic plan;
- Develop with the CFO the Company's annual business operations plan;
- Provide the leadership for the entire Company;
- Work toward achieving the business, operational, and financial goals of
the Company;
- Ensure that the mission of the Company is clear via effective
communication, and that the core values of the Company are put into
practice via effective reinforcement;
- Identify, develop and direct the implementation of business strategy;
- Have, with the CFO, fiscal responsibility consistent with Company control
procedures and established policies; and,
- Plan and direct the organization's activities to achieve stated/agreed
targets and standards for financial and trading performance, quality,
culture and legislative adherence.
- Executive and personnel management -
- Work with senior staff to establish long-range goals, strategies, growth
plans and policies;
- Have final hire and termination authority for all employees, contractors
and agents of the Company consistent with and subject to any established
Board policies;
- Have final review authority for performance and compensation evaluation
of Company personnel, subject to any established Board policies;
- Have review and recommendation authority for the issuance of options,
warrants and other such equity to Company personnel, subject to any
established Board policies;
- Recruit, recommend and develop executive team members;
- Direct functions and performance via the executive team;
PAGE A-1
- Manage senior staff and internal business leaders;
- Measure senior staff performance;
- Provide performance feedback to senior staff and Company personnel;
- Inspire senior staff to higher levels of performance; and,
- Attract and retain executive talent.
- Company Expansion -
- Spearhead strategic Company initiatives;
- Lead acquisitions, merger and venturing activities; and,
- Direct organizational changes and other internal improvement efforts.
- External and Shareholder Activities -
- Represent the Company to customers, employees, investors, business
partners, and community leaders;
- Maintain and develop organizational culture, values and reputation in its
markets and with all staff, customers, suppliers, partners and
regulatory/official bodies;
- Report to stockholders/board on organizational plans and performance;
and,
- As Vice Chairman, plan for and conduct, along with the Chairman, the
Company's Board of Directors meetings and Annual Stockholder's meeting
PAGE A-2
EXHIBIT B
PERFORMANCE BONUS AMOUNTS
AND OBJECTIVES
Upon achievement of each performance objective listed below, the bonus award
next to each such performance objective shall become payable to Executive upon
achievement, provided, that Executive remains an employee of the Company through
the date of such achievement, except as otherwise set forth in this Agreement.
All determinations of gross revenue and operating income shall be made in
accordance with GAAP.
Item Bonus Award Performance Objective
1 $25,000 Upon the listing of the Company's common stock for
trading on the New York Stock Exchange, the Nasdaq
National Market or the American Stock Exchange.
2 $50,000 Following, and conditioned upon the achievement of the
performance objective in Item 1 above, upon the
completion of each Secondary Offering Financing
Transaction (as defined below).
3 $25,000 Upon the completion of each Financing Transaction (as
defined below) other than a Secondary Offering
Financing Transaction, whereby the aggregate gross
proceeds received by the Company are at least $4
million.
4 $25,000 Upon the completion of each Acquisition Transaction in
which the aggregate consideration paid by the Company
to the target company, its equity holders and/or
creditors is over $10 million (consideration may be
cash, equity or debt, or any combination thereof) and
involving payment of a fee or commission by the Company
to one or more investment banks, finders, business
brokers or other third party financial advisors or
agents. For avoidance of doubt, the completion of the
Acquisition Transaction with Starsys Research
Corporation shall be deemed to achieve the performance
objective set forth in this Item 4, but not Item 5.
5 $50,000 Upon the completion of each Acquisition Transaction in
which the aggregate consideration paid by the Company
to the target company, its equity holders and/or
creditors is over $10 million (consideration may be
cash, equity or debt, or any combination thereof) NOT
involving payment of a fee or commission by the Company
to one or more investment banks, finders, business
brokers or other third party financial advisors or
agents.
PAGE B-1
6 $12,500 If the Company's gross revenue for the fiscal year
ending December 31, 2006 ("Fiscal 2006"), which shall
be determined in good faith by the Board in accordance
with GAAP, is in excess of the projected revenue for
Fiscal 2006 as set forth in the annual budget for
Fiscal 2006 approved by the Board. Such annual budget
shall be updated to reflect any Acquisition
Transactions that are completed during Fiscal 2006.
This bonus award shall be paid on April 15, 2007.
7 $12,500 If the Company's operating income for Fiscal 2006,
which shall be determined in good faith by the Board in
accordance with GAAP, is in excess of the projected
operating income for Fiscal 2006 as set forth in the
annual budget for Fiscal 2006 approved by the Board.
Such annual budget shall be updated to reflect any
Acquisition Transactions that are completed during
Fiscal 2006. This bonus award shall be paid on April
15, 2007.
8 $12,500 Upon the achievement of a performance objective for
Fiscal 2006 to be determined mutually by the Board and
Executive. This bonus award shall be paid on April 15,
2007.
9 $12,500 If the Company's gross revenue for the fiscal year
ending December 31, 2007 ("Fiscal 2007"), which shall
be determined in good faith by the Board in accordance
with GAAP, is in excess of the projected revenue for
Fiscal 2007 as set forth in the annual budget for
Fiscal 2007 approved by the Board. Such annual budget
shall be updated to reflect any Acquisition
Transactions that are completed during Fiscal 2007.
This bonus award shall be paid on April 15, 2008.
10 $12,500 If the Company's operating income for Fiscal 2007,
which shall be determined in good faith by the Board in
accordance with GAAP, is in excess of the projected
operating income for Fiscal 2007 as set forth in the
annual budget for Fiscal 2007 approved by the Board.
Such annual budget shall be updated to reflect any
Acquisition Transactions that are completed during
Fiscal 2007. This bonus award shall be paid on April
15, 2008.
11 $12,500 Upon the achievement of a performance objective for
Fiscal 2007 to be determined mutually by the Board and
Executive. This bonus award shall be paid on April 15,
2008.
PAGE B-2
During the Renewal Term of this Agreement, if any, Executive shall be eligible
for (a) a $12,500 bonus upon the achievement of each of three performance
objectives to be determined mutually by the Board and Executive and (b) any
other bonuses determined mutually by the Board and Executive.
"FINANCING TRANSACTION" means any transaction or series of related transactions
approved by the Board involving the sale of either equity or debt by the Company
for the primary purpose of capital raising.
"SECONDARY OFFERING FINANCING TRANSACTION" means any Financing Transaction
pursuant to an underwritten public offering.
PAGE B-3
EXHIBIT C
FORM OF STOCK OPTION AGREEMENT
(Attached)
PAGE C-1
EXHIBIT D
FORM OF INVENTIONS AGREEMENT
(Attached)
PAGE D-1
