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 Mark N.
Sirangelo ("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.
PAGE 3
(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
PAGE 4
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
Sarbanes-Oxley
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;
PAGE 5
(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
PAGE 6
which
Executive participated prior to termination
(any such bonuses shall
be paid at the same tim
