EXHIBIT 10.3
EXECUTIVE EMPLOYMENT AGREEMENT
THIS
EXECUTIVE EMPLOYMENT
AGREEMENT (this "AGREEMENT") is made and entered
into December 20, 2005, by and between SpaceDev,
Inc., a Colorado corporation
(together with its successors, the "COMPANY"), and James W. Benson
("EXECUTIVE").
RECITALS
WHEREAS,
Executive currently serves as Chief Executive Officer of the
Company;
WHEREAS, the Company desires to continue to
employ Executive in the capacity of
Chief Technology Officer 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.
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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 Technology Officer of
the
Company. Executive shall perform all services appropriate to those
positions
and as assigned by the Company's Chief Executive Officer
(the "CEO") or, if
there be no Chief Executive Officer, by the
Board of Directors (the "BOARD").
Such services shall be consistent with the Outline of Executive Roles and
Responsibilities for Chief Technology Officer, a copy of which is attached
hereto as Exhibit A, as such Outline may be modified by
the CEO or 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 CEO or the
Board, including, in the discretion of the CEO or 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 Fourteen
Thousand Dollars ($14,000) 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 Fifteen Thousand Five Hundred Dollars
($15,500) 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 Seventeen Thousand Dollars
($17,000) per month.
The Base Salary during the Renewal Term, if any, shall be
at least Seventeen
Thousand Dollars ($17,000). The Base Salary shall be payable
semi-monthly (or
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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
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
950,000 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, 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
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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. All unused paid
time off that has accrued through the
date hereof shall continue to be
available to Executive in accordance with such
plans and policies and applicable law.
(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) 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 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.
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(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 CEO
or
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 CEO or 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 CEO and 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;
(ii) any material breach of this Agreement by the Company; or
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(iii) any Change in Control (as defined in the Option
Agreement);
unless
following a Change in Control the successor
organization offers to
continue
this Agreement for one (1) year
following such Change in Control
or offers
Executive a one (1) year contract incorporating substantially
all
of the terms of this Agreement and
maintaining, at least, his then current
Base
Salary and benefits.
(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 CEO and
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.
Furthermore, notwithstanding the foregoing, the parties understand and
agree
that the removal of Executive from his
position as Chairman shall not be deemed
an event or condition constituting Good Reason.
(e) Without
Cause or Without Good Reason. The Company 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 Co
