EMPLOYMENT AGREEMENT
FOR
JAMES W. BENSON
THIS EMPLOYMENT AGREEMENT (the "Agreement") is entered into as of the
16th day of July, 2000, by and between SpaceDev, Inc., a Colorado corporation
(the "Company or "SPDV"), and James W. Benson ("Employee").
A. The Company is engaged in the business of commercializing space
exploration and initially intends to develop, design, construct, test and launch
unmanned spacecraft.
B. The Company is at an early stage and may require substantial
additional funds to implement its business plan.
C. The Company desires to retain Employee as 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, and Employee hereby accepts such
employment with the Company, as the Chief Executive Officer of SPDV, and his
duties shall be consistent with such position.
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:
(i) An annual salary of $72,000;
(ii) An annual salary of $ 96,000 commencing November
1, 2000;
(iii) An annual salary of $150,000 commencing January
1, 2001
(iv) 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 and such other fringe benefits as are within the
Company's policy as approved from time to time 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 hereunder, including reasonable and necessary expenses related
to travel, lodging and reasonable entertainment expenses, promptly
after presentation to the Company of receipts or other documents
evidencing the incurrence of such expenses.
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(c) The Company hereby agrees to grant to Employee options to
purchase the below listed shares of the Company's Common Stock upon the
occurrence of certain events subject to the vesting conditions and at
the exercise prices ("strike price") as set forth below. Employee
understands the Options issued under this section are not part of a
qualified or other stock option plan and are not subject to any
beneficial tax treatment under the current Internal Revenue Code.
Employee accepts these options, when and if issued, subject to any
applicable state and federal tax due and understands the Company
assumes no liability for the payment of any tax associated with the
issuance of the option or stock on the exercise of the option. The
options and any shares issued pursuant to the options are not and will
not be registered with the Securities and Exchange Commission or under
the Blue Sky laws of any state and therefore will be subject to
restrictions on their transfer.
<TABLE>
<CAPTION>
NUMBER OF EXERCISE PRICE SHARES
SHARES VESTING UPON THE COMPANY'S: PRICE PER SHARE
------ --------------------------- ---------------
<S> <C> <C>
500,000 Currently Vested $ 1.00
500,000 Obtaining $6,500,000 additional equity capital during the $ 1.50
initial term of this agreement
500,000 Executing and Financing initial definitive space launch $ 2.00
agreement
500,000 Launching initial mission $ 2.50
500,000 Initial mission meeting customer's detailed mission $ 3.00
objectives as set forth in the contract between SPDV and
the customer
250,000 Upon SPDV Market Cap reaching $250 million $ 5.00
during the initial term of this agreement
500,000 Upon SPDV Market Cap reaching $500 million during the $10.00
initial term of this agreement
750,000 Upon SPDV Market Cap reaching $1 billion $20.00
ALL OPTIONS SHALL EXPIRE 10 YEARS FROM THE DATE OF THIS AGREEMENT.
</TABLE>
5. TERMINATION OF EMPLOYMENT FOR GOOD CAUSE.
(a) 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
outside of regular business hours 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 material willful misconduct in the management of the
business and affairs of the Company and 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.
(b) 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.
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(c) 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 ninety (90)
days of receipt of the notice, Employee's breach will be deemed cured.
However, if the nature of the matters complained of are such that more
than ninety (90) 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 ninety (90) day period. If Employee does not modify his
performance to correct or commence to correct the matter complained of
within the ninety (90) day period or any extension thereof, the Company
shall have the right to terminate this Agreement at the end of such
ninety (90) 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 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 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 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 not, 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
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the term of this Agreement, he shall exercise due and diligent
precautions to protect the integrity of the Company's vendor,
consultant, and customer lists and sources thereof, statistical data
and 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 will he solicit
or cause or 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 as of the date of termination of this agreement.
(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 could cause
irreparable damage to the Company, that the remedy at law of the
Company may 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 seek temporary and permanent injunctive
relief and/or specific performance.
(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.
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:
SpaceDev
13855 Stowe Drive
Poway, CA 92064
If to Employee, to:
James W. Benson
c/o SpaceDev
13855 Stowe Drive
Poway, CA 92064
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.
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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 San Diego County California. If any action or
proceeding is brought to enforce any provisions of this Agreement, the
prevailing party shall be entitled to its costs and expenses in connection
therewith, including without limitation reasonable attorneys' fees.
13. INJUNCTIVE RELIEF. Employee hereby recognizes, acknowledges and
agrees that in the event of any material breach by Employee of any of his
covenants, agreements, duties or obligations hereunder, the Company could suffer
great and irreparable harm, injury and damage, the Company would encounter
extreme difficulty in attempting to prove the actual amount of damages suffered
by the Company as a result of such breach, and the company would not be
reasonably or adequately compensated by an award of damages in any action at
law. Employee therefore acknowledges and agrees that, in addition to any other
remedy the Company may have at law, in equity, by statute or otherwise, in the
event of any material 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; 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 State of California.
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. A facsimile or copy
of this Agreement after it is executed by the Parties may be used for all
purposes.
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 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 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/ James W. Benson SpaceDev, Inc.,
-------------------------------- a Colorado corporation
James W. Benson
By: /S/ Stanley W. Dubyn
--------------------------------
Its: President
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