EMPLOYMENT AGREEMENT
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This EMPLOYMENT AGREEMENT (the "Agreement") is entered into as of the
24th day of November, 1997, by and between Pegasus Development Group, Inc., a
Colorado corporation (the "Company or "PSDM"), and Xxxxx X. Xxxxxx ("Employee").
A. The Company is engaged in the business of commercializing space
exploration and initially intends to develop, design, construct, test and launch
an unmanned spacecraft to a targeted near-earth asteroid residing beyond earth's
orbit for the purpose of collecting and selling scientific data.
B. The Company is in the development stage and requires substantial
additional funds to implement its business plan.
C. The Company desires to retain Employee as President and Chief
Executive 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:
1. EMPLOYMENT AND DUTIES. Subject to the terms and conditions set
forth herein, the Company hereby employs Employee,
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and Employee hereby accepts such employment with the Company, as the President
and Chief Executive Officer of PSDM, 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 60 months, subject to early termination as provided
for elsewhere in this Agreement. The "term" of this Agreement shall mean and
refer to such 60-month period (or any earlier termination thereof pursuant to
Paragraph 5 hereof).
3. EXTENT OF SERVICE. During the term hereof, Employee agrees to
devote, during regular business hours, 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 and
activities of the Company.
4. COMPENSATION.
(a) As compensation for the services which Employee is to render
the Company hereunder, the Company shall pay Employee an 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 as follows:
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(i) An annual salary of $72,000 commencing 30 days after the
Company has secured and received additional equity capital of not less than
$900,000;
(ii) An annual salary of $84,0000 commencing 30 days after the
Company has secured and received additional equity capital of $3,500,000;
(iii) An annual salary of $96,000 commencing 30 days after the
Company has secured and received additional equity capital of $7,000,000.
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 and/or common stock for and with
respect to such year.
(b) The Company will also provide Employee with a reasonable
automobile allowance in the aggregate amount set forth on Exhibit A and such
other fringe benefits as are within the Company's policy as approved by the
Board of Directors of the Company. Additionally, the Company shall reimburse
Employee for expenses reasonably incurred by him in carrying out his duties
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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.
(c) The Company hereby grants to Employee options to purchase up to
2,500,000 shares of Common Stock, subject to the vesting conditions and at the
exercise prices set forth below:
Number of Exercise Price
Shares Vesting Upon the Company's Per Share
--------------- -------------------------------------- ---------------
500,000 Currently vested $1.00
500,000 Obtaining $6,500,000 additional $1.50
equity capital
500,000 Financing and executing $2.00
definitive space launch agreement
500,000 Launching initial mission $2.50
500,000 Spacecraft rendezvous with target $3.00
asteroid
---------------
2,500,000
---------------
All options shall expire 60 months from the date of this Agreement.
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
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) gross
negligence, gross mismanagement or
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material 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 Paragraph 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 Paragraph 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
Paragraph 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, if the
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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 sixty (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 any twelve (12) month
period. 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
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pursuant to this Paragraph 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 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. NONCOMPETITION; NONSOLICITATION; CONFIDENTIAL INFORMATION.
(a) Employee covenants and agrees that, during the term of this
Agreement, 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 similar business of commercializing outer space 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 the Company, including any of its subsidiaries.
(b) Employee acknowledges that it is the policy of the Company to
maintain as secret and confidential all valuable and
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unique information heretofore or hereafter acquired, developed or used by the
Company relating to the business, operations, employees, tenants, vendors,
Consultants and/or clients of the Company, which gives the Company a competitive
advantage in its industry, including, without limitation, information about net
costs, profits, markets, suppliers, key personnel, bidding and pricing policies,
operational methods, engineering and technical processes and other business
affairs and methods and other information not readily available to the public
and 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 that
the services to be performed by Employee are special and unique, and that by
reason of his duties, he 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 vendor, consultant, and customer lists and sources thereof,
statistical data and
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compilations, agreements, contracts, manuals or other documents embodying any
Confidential Information. Upon termination of Employee's 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, (iii)
which Employee obtains from sources other than the Company, or (vi) which the
Company purchases or obtains in connection with any acquisitions of companies or
assets.
(c) For a period of one year after the termination of this
Agreement for any reason (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 solicit, directly or indirectly, any director,
officer or employee of the Company to discontinue that individual's status of
employment with the company, nor to become employed in any activity similar to
or competitive with the business of the company being conducted at the time of
termination of this Agreement within a radius of 2,500 miles of Denver,
Colorado, nor will he solicit or cause or
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authorize, directly or indirectly to be solicited, for or on behalf of himself
or any third party, from others who are vendors or customers of the Company, any
business which is competitive with the Company within a radius of 2,500 miles of
Denver, Colorado.
(d) If the covenants contained in this Paragraph 7 are violated, or
threatened to be violated, Employee acknowledges and agrees that such violation
or threatened violation will cause irreparable damage to the Company, that the
remedy at law of the Company will be inadequate and that the Company 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 permanent injunctive relief
and/or specific performance without the necessity of proving actual damage.
(e) The parties hereto acknowledge that the provisions of this
Paragraph 7 shall survive the termination of this Agreement.
8. 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.
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9. 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.
10. 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
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 Company, to: Pegasus Development Group, Inc.
c/o SpaceDev
P.0. Box 2121
31557 Aspen Xxxxx Xxxx
Xxxxxxxxx Xxxxxxx, Xxxxxxxx 00000
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If to Employee, to: Xxxxx X. Xxxxxx
Pegasus Development Group, Inc.
c/o SpaceDev
P.0. Box 2121
31557 Aspen Xxxxx Xxxx
Xxxxxxxxx Xxxxxxx, Xxxxxxxx 00000
11. 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.
12. 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 Denver, Colorado. 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.
13. INJUNCTIVE RELIEF. Employee hereby recognizes, acknowledges and
agrees that in the event of any breach by Employee of any of his covenants,
agreements, duties or obligations hereunder, the Company would suffer great and
irreparable harm,
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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 13 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.
14. APPLICABLE LAW. The validity, interpretation and enforcement of
this Agreement shall be governed by the laws of the
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State of Colorado except that the Federal Arbitration Act shall govern any
arbitration proceeding.
15. 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.
16. 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.
17. 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.
18. 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
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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, 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.
19. 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
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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:
/s/ Xxxxx X. Xxxxxx Pegasus Development Group, Inc.
----------------------------- a Colorado corporation
Xxxxx X. Xxxxxx
By /s/ signature
----------------------------
Its President and Chief
Executive Officer
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