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Exhibit 10.24
FORM OF
EXECUTIVE EMPLOYMENT AGREEMENT
Date
Address
Dear :
Orbital Sciences Corporation and its subsidiaries (together, the
"Company") consider the maintenance of a sound and vital management to be
essential to protecting and enhancing the best interests of the Company and its
stockholders. In this connection, the Company recognizes that the possibility of
a change in control may exist and that such possibility, and the uncertainty and
questions which it may raise among management, may result in the departure or
distraction of management personnel to the detriment of the Company and its
stockholders. Accordingly, the Company's Board of Directors (the "Board") has
determined that appropriate steps should be taken to reinforce and encourage the
continued attention and dedication of members of the Company's management,
including yourself, to their assigned duties without distraction in the face of
the potentially disturbing circumstances arising from the possibility of a
change in control of the Company.
This letter agreement (the "Agreement") sets forth the severance
benefits that the Company agrees will be provided to you in the event your
employment with the Company terminates following a "Change in Control" (as
defined in Section 2 hereof) under the circumstances described below. This
Agreement is not an employment contract nor does it alter your status as an
at-will employee of the Company. No benefit shall be payable under this
Agreement except on termination of your employment with the Company as a result
of a Change in Control (as defined below).
1. Term. This Agreement shall commence on the date hereof and shall
remain in effect so long as you are employed as an executive officer of the
Company, provided, however, that in the event of a Change in Control, this
Agreement shall remain in full force and effect for a 24-month period commencing
on the date of the Change in Control regardless of whether you remain an
executive officer of the Company during such 24-month period.
2. Change in Control. For purposes of this Agreement, a Change in
Control shall mean:
(a)the acquisition by any individual, entity or group (within
the meaning of Section 13(d) or 14(d) of the Securities
Exchange Act of 1934 (the "Exchange
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Act")) (a "Person") of beneficial ownership (within the
meaning of Rule 13d-3 of the Exchange Act) of 30% or more of
either (i) the then outstanding shares of common stock of the
Company or (ii) the combined voting power of the then
outstanding voting securities of the Company entitled to vote
generally in the election of directors;
(b)within any 24-month period, the persons who were directors of
the Company immediately prior thereto (the "Incumbent Board")
shall cease to constitute a majority of the Board of Directors
of the Company or of its successor by merger, consolidation or
sale of assets. For this purpose, the Incumbent Board includes
any new director whose (i) election to the Board resulted from
a vacancy caused by the retirement, death or disability of a
director and was approved by a vote of at least two-thirds of
the directors then still in office who were directors at the
beginning of the period, or (ii) nomination to the Board was
approved by a committee of the Board whose majority consisted
of directors who were directors in office at the beginning of
the period; or
(c)the consummation by the Company of a reorganization, merger,
consolidation or sale or disposition of all or substantially
all the assets of the Company (other than any such transaction
initiated by the action of the Board) (a "Business
Combination"), the result of which is that (i) the
stockholders of the Company at the time of the execution of
the agreement to effect the Business Combination own less than
60% of the total equity of the surviving or resulting entity
entitled to vote generally in the election of directors, (ii)
a Person (excluding any corporation resulting from the
Business Combination) becomes the beneficial owner of 20% or
more of the then outstanding shares of common stock of the
corporation resulting from such Business Combination or (iii)
at least a majority of the members of the board of directors
of the corporation resulting from such Business Combination
were members of the Board of Directors of the Company at the
time of execution of the initial agreement or other action of
the Board that provided for such Business Combination.
Notwithstanding the above, a Change in Control shall not be deemed to
occur as a result of a transaction where either you, individually or as an
officer, director or 5% stockholder or partner of any entity, or any employee
benefit plan (or related trust) of the Company (a) becomes the beneficial owner
of securities representing 30% or more of the combined voting power of the
Company 's then outstanding securities, or (b) enters into an agreement with the
Company providing for the merger, consolidation, or sale or transfer of all or
substantially all the assets of the Company. In addition, a Change in Control
shall not be deemed to occur where you enter into an employment agreement with
the Company, any Person whose acquisition of the
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Company's securities resulted in the Change in Control or any entity resulting
from a Business Combination.
3. Termination Following Change in Control. If a Change in Control as
described in Section 2 occurs, you shall be entitled to the benefits provided in
Section 4 of this Agreement if your employment is terminated by the Company for
Disability or Cause, as described below, or by you for Good Reason, as described
below.
(i) Disability. If, as a result of your incapacity due to physical
or mental illness, you shall have been absent from your duties with the
Company on a full-time basis for nine consecutive months, and within 30 days
after written notice of termination is given you shall not have returned to the
full-time performance of your duties, the Company may terminate your employment
for "Disability."
(ii) Cause. Termination by the Company of your employment for
"Cause" shall mean termination on (A) the willful and continued failure by you
substantially to perform your duties with the Company in accordance with the
instructions of the Board or the executive officers to whom you report (other
than any such failure resulting from your incapacity due to physical or mental
illness), after a demand for substantial performance is delivered to you by the
Board which specifically identifies the manner in which the Board believes that
you have not substantially performed your duties, or (B) the willful engaging by
you in conduct which is demonstrably and materially injurious to the Company,
monetarily or otherwise. For purposes of this Subsection, no act, or failure to
act, on your part shall be considered "willful" unless done, or omitted to be
done, by you not in good faith and without reasonable belief that your action or
omission was in the best interest of the Company. Notwithstanding the foregoing,
you shall not be deemed to have been terminated for Cause unless and until there
shall have been delivered to you a copy of a resolution duly adopted by the
affirmative vote of not less than two-thirds of the entire membership of the
Board at a meeting of the Board called and held for the purpose (after
reasonable notice to you and an opportunity for you, together with your counsel,
to be heard before the Board), finding that in the good faith opinion of the
Board you were guilty of conduct set forth above in clause (A) or (B) of the
first sentence of this Subsection and specifying the particulars thereof in
detail.
(iii) Good Reason. You shall be entitled to terminate your
employment for Good Reason in connection with a Change in Control. For purposes
of this Agreement, "Good Reason" shall mean:
(A) without your written consent, the assignment to you of any
position (including status, offices, titles and reporting requirements),
authorities, duties and responsibilities, that are not at least
commensurate in all material respects with the most significant of those
held, exercised and assigned by you at any time during the 180-day
period immediately preceding a Change in Control, or any other action by
the Company
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that results in a diminution in such position, authority, duties or
responsibilities, excluding for this purpose an isolated,
insubstantial and inadvertent action not taken in bad faith and that is
remedied by the Company promptly after receipt of notice thereof given
by you;
(B) a reduction by the Company in your annual base salary
("Annual Base Salary"), which for the purposes of this Agreement shall
mean an amount at least equal to 12 times the highest monthly base
salary paid or payable, including any base salary that has been earned
but deferred, to you by the Company in respect of the 12-month period
immediately preceding the month in which the Change of Control occurs;
(C) the Company's requiring you to be based anywhere other than
the office of the Company in which you are based prior to the Change in
Control or any office or location within a 50 mile radius of such
office, except for required travel on the Company's business to an
extent substantially consistent with your present business travel
obligations;
(D) the failure by the Company to continue in effect any
compensation plan in which you participate, or to provide you with plans
substantially similar, including but not limited to any stock purchase
plan, stock option plan, incentive compensation, bonus, and other plan
in which you were participating at the time of the Change in Control, or
the failure by the Company to continue your participation therein;
(E) the failure by the Company to continue to provide you with
benefits substantially similar to those enjoyed by you under any of the
Company's retirement, pension, 401(k), deferred compensation, life
insurance, medical, health, accident, disability or other benefit plans
in which you were participating at the time of a Change in Control, the
taking of any action by the Company which would directly or indirectly
materially reduce any of such benefits enjoyed by you at the time of the
Change in Control, or the failure by the Company to provide you with the
number of paid vacation days to which you are entitled in accordance
with the Company's normal vacation policy in effect at the time of the
Change in Control;
(F) the failure of the Company to obtain a satisfactory agreement
from any successor to assume and agree to perform this Agreement, as
contemplated in Section 5 hereof; or
(G) any termination of your employment which is not effected
pursuant to a Notice of Termination satisfying the requirements of
Section 3(iv) hereof (and, if applicable, Section 3(ii) hereof); and for
purposes of this Agreement, no such purported termination shall be
effective.
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(iv) Notice of Termination. Any termination by the Company or by
you shall be communicated by written Notice of Termination to the other party
hereto in accordance with Section 6 hereof, and if by the Company for Cause,
shall not be effective unless such notice includes the information set forth in
Section 3(ii) hereof.
(v) Date of Termination, etc. "Date of Termination" shall mean
(A) if your employment is terminated by reason of death or Disability, the date
of your death or 30 days after Notice of Termination is given (provided that you
shall not have returned to the performance of your duties on a full-time basis
during such 30 day period), as the case may be, (B) if your employment is
terminated by the Company for Cause or for any other reason, the date specified
in the Notice of Termination which shall not be less than 30 days from the date
such Notice of Termination is given, and (C) if you terminate your employment
for "Good Reason," the date such Notice of Termination is given or any later
date specified therein.
4. Benefits Upon Termination or During Disability.
(i) During any period that you fail to perform your duties
hereunder as a result of incapacity due to physical or mental illness, and in
the event your employment is terminated pursuant to Section 3(i) hereof, your
benefits shall be determined in accordance with the Company's insurance and
benefit programs then in effect.
(ii) If your employment shall be terminated for Cause, the
Company shall pay you your full base salary through the Date of Termination at
the rate in effect at the time Notice of Termination is given, and the Company
shall have no further obligations to you under this Agreement.
(iii) If your employment shall be terminated immediately prior to
or any time after a Change in Control (a) by the Company for any reason other
than for Cause or Disability or (b) by you for Good Reason, then you shall be
entitled to all the benefits provided below:
(A) The Company shall pay you on the Date of Termination your
full base salary through the Date of Termination at the rate in effect
at the time Notice of Termination is given.
(B) In lieu of any further salary payments to you for periods
subsequent to the Date of Termination, the Company shall pay to you, not
later than 15 days following the Date of Termination, a lump sum payment
equal to two times the sum of (a) your Annual Base Salary and (b) the
sum of any incentive, annual and other cash bonuses, paid to you for the
12-month period immediately preceding the month in which the Change in
Control occurred.
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(C) The Company shall also immediately fully vest you in all your
account balances under the Company's retirement, deferred compensation
and pension plans (the "Plans"); provided, however, that should the
Company be unable to provide for such vesting under the terms of any
such Plans, the Company shall pay to you in the manner and as directed
by you, an amount that equals on an after-tax basis the value of any
amounts that were not vested or would otherwise be forfeited by you
under the Plans upon your termination of employment with the Company.
(D) The Company shall also allow you the opportunity to surrender
to the Company any then outstanding vested and unvested options (whether
exercisable or not) to purchase Common Stock of the Company and any of
its subsidiaries and affiliates that you own and that you did not
previously surrender or convert in the transaction that resulted in the
Change in Control, and the Company shall promptly pay to you in
consideration therefor a cash payment equal to the difference between
the respective exercise price for such options and the higher of the (a)
highest price paid in connection with the transaction that resulted in
the Change in Control or (b) then current fair-market value.
(E) The Company shall also pay to you all reasonable legal fees
and expenses incurred by you as a result of such termination (including
all such fees and expenses, if any, incurred in contesting or disputing
any such termination or in seeking to obtain or enforce any right or
benefit provided by this Agreement) upon presentation to the Company of
a reasonably detailed invoice for such expenses, whether or not you have
already made payment for such expenses.
(F) For a 24-month period after such termination, the Company
shall arrange to provide you with life, disability, accident and health
insurance benefits substantially similar to those you were receiving
immediately prior to the Notice of Termination, provided, however, that
should the Company be unable to provide for any such benefits under the
terms of the benefit plans, or by law, the Company shall pay you an
amount equal to the premiums the Company would have paid for such
benefits under such plans.
(G) You shall not be required to mitigate the amount of any
payment provided for in this Section 4 by seeking other employment or
otherwise, nor shall the amount of any payment or benefit provided for
in this Section 4 be reduced by any compensation earned by you as the
result of employment by another employer or by retirement benefits after
the Date of Termination, or otherwise.
(H) In addition to all other amounts payable to you under this
Section 4, you shall be entitled to receive all benefits payable to you
under any of the Company's plans or agreements relating to retirement
benefits.
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(iv) All payments required to be made by the Company hereunder to
you shall be subject to the withholding of such amounts relating to Federal,
state, local or foreign taxes as the Company reasonably may determine it should
withhold pursuant to any applicable law or regulation. Notwithstanding any other
provision of this Agreement or of any other agreement, contract or understanding
heretofore or hereafter entered into by you and the Company, you shall not have
any right to receive any payment or other benefit under this Agreement if such
payment or benefit, taking into account all other payments to or benefits
received by you, would cause any payment to you under this Agreement to be
considered a "parachute payment" within the meaning of Section 280G(b)(2) of the
Internal Revenue Code (a "Parachute Payment"). In the event that the receipt of
any such payment or benefit under this Agreement would cause you to be
considered to have received a Parachute Payment under this Agreement, then you
shall have the right, in your sole discretion, to designate those payments or
benefits under this Agreement which should be reduced or eliminated so as to
avoid having the payment to you under this Agreement be deemed to be a Parachute
Payment.
5. Successors; Binding Agreement.
(i) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all its business and/or assets to expressly assume and agree to
perform this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession had taken place.
Failure of the Company to obtain such assumption and agreement no later than ten
days prior to the effectiveness of any such succession shall be a breach of this
Agreement and shall entitle you to compensation from the Company in the same
amount and on the same terms as you would be entitled under section 4(iii),
except that for purposes of implementing the foregoing, a date ten days prior to
the date on which any such succession becomes effective shall be deemed the Date
of Termination. As used in this Agreement, "the Company" shall mean the Company,
as hereinbefore defined and any successor to its business and/or assets that
assumes and agrees to perform this Agreement by executing and delivering the
agreement provided for in this paragraph 5, by operation of law, or otherwise.
(ii) This Agreement shall inure to the benefit of and be
enforceable by your personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees, and legatees. If you
should die while any amount would still be payable to you hereunder, all such
amounts, unless otherwise provided herein, shall be paid in accordance with the
terms of this Agreement to your devisee, legatee or other designee or if there
is no such designee, to your estate.
6. Notice. For the purposes of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by registered mail,
return receipt requested, postage prepaid, addressed (i) if to the Company, to
Orbital Sciences Corporation, 00000 Xxxxxxxx Xxxxxxxxx, Dulles,
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Virginia 20166, Attn: Secretary of the Company, and (ii) if to you, to the
address set forth on the first page of this Agreement, or to such other address
as either party may have furnished to the other in writing in accordance
herewith, except that notice of change of address shall be effective only upon
receipt.
7. Miscellaneous. No provision of this Agreement may be modified, waived
or discharged unless such waiver, modification or discharge is agreed to in
writing and signed by you and such officer as may be specifically designated by
the Board. No waiver by either party hereto at any time of any breach by the
other party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time. No agreements or representations, oral or otherwise, express or
implied, with respect to the subject matter hereof have been made by either
party which are not expressly set forth in this Agreement, and this Agreement
supersedes all prior agreements between the Company and you with respect to the
subject matter herein. The validity, interpretation construction and performance
of this Agreement shall be governed by the local laws of the Commonwealth of
Virginia (regardless of the laws that might otherwise govern under principles of
conflicts of law).
8. Validity. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement, which shall remain in full force and effect.
9. Counterparts. This Agreement may be executed in several counterparts,
each of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.
10. Arbitration. Any dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by arbitration in
Washington, D.C. in accordance with the domestic rules of the American
Arbitration Association then in effect. Pending the resolution of such dispute
or controversy, the Company will continue to pay you your full base salary in
effect when the notice giving rise to the dispute was given and you will
continue as a participant in all incentive compensation, stock option,
retirement, deferred compensation, pension, life, disability, health and
accident plans in which you were participating when the notice giving rise to
dispute was given, unless you have already received all benefits payable under
Section 4(iii) of this Agreement. Judgment may be entered on the arbitrator's
award in any court having jurisdiction; provided, however, that you shall be
entitled to seek specific performance of your right to be paid until the Date of
Termination during the pendency of any dispute or controversy arising under or
in connection with this Agreement.
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If this Agreement correctly sets forth our agreement on the subject
matter hereof, kindly sign both of the enclosed copies, keeping one for your
files and returning the other to the Company.
Sincerely,
ORBITAL SCIENCES CORPORATION
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By: Xxxxx X. Xxxxxxxx
President and Chief Executive Officer
Agreed to:
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Name:
Date:
