EXHIBIT 10.16
[SPACEDEV LOGO HERE]
EMPLOYMENT AGREEMENT
BY AND BETWEEN
SPACEDEV, INC.
AND
XXXXXXX X. XXXXXXX
2
SPACEDEV, INC.
EMPLOYMENT AGREEMENT
This At-Will Employment Agreement ("Agreement") is made and entered
into as of the date written next to the signature lines by and between SPACEDEV,
INC., a Colorado corporation (the "Company"), and the undersigned individual
(the "Employee").
1. EMPLOYMENT. The Company hereby employs Employee as the position
listed on Schedule A to this Agreement, which incorporated herein by this
reference. Employee accepts such employment and agrees to perform services for
the Company, subject always to such resolutions as are established from time to
time by the Board of Directors of the Company and its President or CEO.
2. AT-WILL EMPLOYMENT. Employee acknowledges and understands that the
employment is "at-will". Employee and Company may terminate this Agreement at
any time with or without cause and without notice.
3. POSITION AND DUTIES.
3.1. SERVICES WITH THE COMPANY. Employee agrees to perform such
duties and exercise such powers as specified under Schedule A and as may from
time to time be assigned to Employee by the Company's Board of Directors (the
"Board") and its President or CEO. Employee shall duly and diligently perform
all duties assigned to Employee while in the employ of the Company. Employee
shall be bound by and faithfully observe and abide by all rules and regulations
of the Company which are brought to their notice or of which they should be
reasonably aware.
3.2. NO CONFLICTING DUTIES. Employee shall devote sufficient
productive time, ability, and attention to the business of the Company during
the term of this Agreement in a manner that will serve the best interests of the
Company. During the term hereof, Employee shall not serve as an officer,
director, employee, consultant or advisor to any other business without the
prior written consent of the Company's Board, which shall not be unreasonably
withheld. Employee hereby confirms Employee is under no contractual commitments
inconsistent with Employee's obligations set forth in this Agreement. During the
term of this Agreement, Employee will not render or perform services, or enter
into any contract to do so, for any other corporation, firm, entity or person
that are inconsistent with the provisions of this Agreement. This Agreement
shall not be interpreted to prohibit Employee from making passive personal
investments or conduct private business affairs if those activities do not
materially interfere with the services required under this Agreement. However,
Employee shall not directly or indirectly, acquire, hold, or retain any interest
in any business competing with or similar in nature to the business of the
Company.
3.3. COMPETITIVE ACTIVITIES. During the term of this Agreement,
Employee shall not, directly or indirectly, either as an employee, employer,
consultant, agent, principal, partner, stockholder, corporate officer, director,
or in any other individual or representative capacity, engage or participate in
any business that is in competition in any manner whatsoever with the business
of the Company.
3.4. UNIQUENESS OF EMPLOYEE'S SERVICES. Employee hereby represents
and agrees that the services to be performed under the terms of this Agreement
are of a special, unique, unusual, extraordinary, and intellectual character
that gives them a unique value, the loss of which cannot be adequately
compensated in damages in an action at law. Employee, therefore, expressly
agrees that the Company, in addition to any other rights or remedies that the
Company may possess, shall be entitled to injunctive and other equitable relief
to prevent or remedy the breach of this Agreement by Employee.
3
4. COMPENSATION.
4.1. BASE SALARY. As compensation for all services to be rendered
by Employee under this Agreement, the Company shall pay to Employee a base
annual salary as described in Schedule A. Employee's salary shall be paid on a
regular basis in accordance with the Company's normal payroll procedures and
policies.
4.2. BONUS. Based on the Company's performance and Employee's
success in meeting annual objectives, the Company has the discretion to offer
Employee an annual bonus in cash and/or stock and/or stock options. A
description of the Bonus Compensation is set forth in Schedule A along with the
conditions and criteria.
4.3 INCENTIVE STOCK OPTION. The Company has adopted an Incentive
Stock Option Plan (the "Plan"), which Employee shall be eligible to participate
in. A copy of the Plan is being provided to Employee concurrently with this
Agreement. Any incentive stock options issued to Employee shall be subject to
the terms and conditions of the Plan.
4.4. MEDICAL INSURANCE. Employee shall have the right to
participate in the Company's comprehensive medical insurance plan upon the terms
and conditions of other similar situated employees of the Company.
4.5. EXPENSES. The Company shall reimburse Employee for all
pre-approved business or travel expenses and office-related expenses incurred by
Employee in the performance of Employee's duties.
4.6. ANNUAL VACATION. Employee shall be entitled vacation time
each year without loss of compensation. The number of vacation days is specified
in Schedule A of this Agreement. In the event that Employee is unable for any
reason to take the total amount of vacation time authorized herein during any
year, Employee shall be deemed to have waived any entitlement to vacation time
for that year, unless a carryover is specifically approved by the Company in
writing.
5. PROPRIETARY MATTER. Except as permitted or directed by the Company,
Employee shall not during the term of employment or at any time thereafter
divulge, furnish, disclose, or make accessible (other than in the ordinary
course of the business of the Company) to anyone for use in any way any
confidential, secret, or proprietary knowledge or information of the Company
("Proprietary Matter") which Employee has acquired or become acquainted with or
will acquire or become acquainted with, whether developed by himself or by
others, including, but not limited to, any trade secrets, confidential or secret
designs, processes, formulae, software or computer programs, plans, devices or
material (whether or not patented or patentable, copyrighted or copyrightable)
directly or indirectly useful in any aspect of the business of the Company, any
confidential customer, distributor or supplier lists of the Company, any
confidential or secret development or research work of the Company, or any other
confidential, secret or non-public aspects of the business of the Company.
Employee acknowledges that the Proprietary Matter constitutes a unique and
4
valuable asset of the Company acquired at great time and expense by the Company,
and that any disclosure or other use of the Proprietary Matter other than for
the sole benefit of the Company would be wrongful and would cause irreparable
harm to the Company. Both during and after the term of this Agreement, Employee
will refrain from any acts or omissions that would reduce the value of
Proprietary Matter to the Company. The foregoing obligations of confidentiality,
however, shall not apply to any knowledge or information which is now published
or which subsequently becomes generally publicly known, other than as a direct
or indirect result of the breach of this Agreement by Employee.
6. VENTURES. If, during the term of this Agreement, Employee is engaged
in or associated with the planning or implementing of any project, program, or
venture involving the Company and a third party or parties, all rights in the
project, program, or venture shall belong to the Company and shall constitute a
corporate opportunity belonging exclusively to the Company. Except as expressly
approved in writing by the Company, Employee shall not be entitled to any
interest in such project, program, or venture or to any commission, finder's fee
or other compensation in connection therewith, other than the compensation to be
paid to Employee as provided in this Agreement.
7. SOLICITATION OF CUSTOMERS AND SOLICITATION OF EMPLOYEES.
7.1. AGREEMENT NOT TO SOLICIT CUSTOMERS. Employee agrees that
during the term of employment by the Company hereunder and for the period in
which any covenant not to compete is in effect hereunder, Employee will not,
either directly or indirectly, on Employee's own behalf or in the service or on
behalf of others, solicit, divert or appropriate, or attempt to solicit, divert,
or appropriate, to any competing business (i) any person or entity whose account
is with the Company or any distributor of the Company that is/was sold or
serviced by or under the direct or indirect supervision of Employee during the
year preceding the termination of such employment, or (ii) any person or entity
whose account has been directly solicited at least twice by the Company within
the eighteen (18) month period prior to the date of any above described event.
7.2. AGREEMENT NOT TO SOLICIT EMPLOYEES. During Employee's
employment by the Company hereunder and for the three-year period following the
termination of such employment for any reason, Employee shall not, either
directly or indirectly, on Employee's own behalf or in the service or on behalf
of others solicit, divert or hire away, or attempt to solicit, divert or hire
away any person then employed by the Company or serving the Company as an
independent contractor. For persons brought into the Company specifically by
Employee during Employee's employment by the Company, the period of
non-solicitation shall be for one-year following termination of Employee.
8. SURRENDER OF RECORDS AND PROPERTY. Upon termination of employment
with the Company, Employee shall deliver promptly to the Company all records,
electronic media, manuals, books, blank forms, documents, letters, memoranda,
notes, notebooks, reports, data, tables, and calculations or copies thereof,
which are the property of the Company and which relate in any way to the
business, products, practices or techniques of the Company, and all other
property (keys, office equipment, computers, mobile phones, credit cards, etc.)
of the Company and Proprietary Matter, including but not limited to, all
documents which in whole or in part contain any trade secrets or confidential
information of the Company, which in any of these cases are in Employee's
possession or under Employee's control.
9. ASSIGNMENT. This Agreement shall not be assignable, in whole or in
part, by either party without the written consent of the other party, except
that the Company may, without the consent of Employee, assign its rights and
obligations under this Agreement to any corporation, firm or other business
entity (i) with or into which the Company may merge or consolidate, or (ii) to
which the Company may sell or transfer all or substantially all of its assets or
5
of which fifty percent (50%) or more of the equity investment and of the voting
control is owned, directly or indirectly, by, or is under common ownership with,
the Company. Upon such assignment by the Company, the Company shall obtain the
assignees' written agreement enforceable by Employee to assume and perform, and
after the date of such assignment, the terms, conditions, and provisions imposed
by this Agreement upon the Company. After any such assignment by the Company and
such written agreement by the assignee, the Company shall be discharged from all
further liability hereunder and such assignee shall thereafter be deemed to be
the Company for the purposes of all provisions of this Agreement including this
section.
10. INJUNCTIVE RELIEF. Employee agrees that it would be difficult to
compensate the Company fully for damages for any violation of the provisions of
this Agreement. Accordingly, Employee specifically agrees that the Company shall
be entitled to temporary and permanent injunctive relief to enforce the
provisions of this Agreement. This provision with respect to injunctive relief
shall not, however, diminish the right of the Company to claim and recover
damages in addition to injunctive relief.
11. INDEMNIFICATION. The company shall indemnify Employee as provided
in the California Corporations Code, Company Articles or Company's Bylaws in
effect at the commencement of this Agreement. The scope of indemnification to
which Employee is entitled shall not be diminished, but may be expanded by the
Company, by amendment of the Company's Bylaws, Articles of Incorporation or
otherwise. Employee shall indemnify and hold the Company harmless from all
liability for loss, damages or injury resulting from the negligence or
misconduct of Employee.
12. MISCELLANEOUS.
12.1 GOVERNING LAW. This Agreement is made under and shall be
government by and construed in accordance with the laws of the State of
California.
12.2 PRIOR AGREEMENTS AND ARBITRATION. This Agreement contains the
entire agreement of the parties relating to the subject matter hereof and
supersedes all prior agreements and understandings with respect to such subject
matter, and the parties hereto have made no agreements, representations or
warranties relating to the subject matter of this Agreement which are not set
forth herein. Any dispute(s) or differences(s) which arise during the course of
this Agreement and which either involve its interpretation or meaning, or relate
to performance required hereunder shall be submitted to and resolved by binding
arbitration; provided, however, that the parties are not waiving and are
expressly reserving their right to seek injunctive relief by judicial process.
Nevertheless, the parties may, by subsequent consent, agree to submit requests
for injunctive relief to an arbitrator or arbitration panel. If either party
shall, in the opinion of the other party, be in breach of or default in the
performance or observance of any term or condition of this Agreement, the
non-defaulting party shall notify the defaulting party in writing of such fact,
and the defaulting party shall have ten (10) days from the receipt of such
notice to remedy or correct such breach or default. If the non-defaulting party
asserts that the breach or default has not been timely and properly cured, it
may commence arbitration as described herein and ask the arbitrator to deem this
Agreement terminated and/or grant such relief as is shown appropriate. In the
event the parties are unable to agree upon an arbitrator to hear and resolve
their differences (hereinafter the "Dispute"), each party shall designate one
person licensed as an attorney in California. Said two attorneys shall select
the neutral arbitrator. Unless agreed upon by the parties to the contrary,
arbitration shall be by a single, neutral arbitrator (hereinafter, the
"Arbitrator"). If the two designated attorneys cannot agree on the selection of
6
the Arbitrator, the matter of the selection of the Arbitrator shall be submitted
to the presiding judge of the Sacramento County Superior Court. In such event,
the selection shall be limited to one person from a panel of retired judges,
each party hereto submitting three names for the court to consider and from
which the Arbitrator shall be selected. The Arbitrator shall have the full and
absolute authority to interpret this Agreement, to deem conduct by the parties
as either in compliance with or in breach of this Agreement, to terminate this
Agreement, and (if a breach is found) to award appropriate damages or relief.
The Dispute shall be settled in accordance with then existing substantive law
and, to the fullest extent possible, with California substantive law. While
evidence may be accepted, omitted, considered or excluded in the discretion of
the Arbitrator, the Arbitrator shall be bound by the California rules of
evidence and by the California Arbitration Act (CCP 1280 et seq.). The final
decision of the Arbitrator shall be served on the parties, in writing, within
twenty (20) days after conclusion of the arbitration hearing. The Arbitrator's
decision shall be binding and conclusive. Neither party shall pursue, prosecute
or otherwise file any legal action or proceeding (other than to seek injunctive
relief as described above). Except as provided in CCP 1286.2, no appeal shall be
taken from the Arbitrator's decision or from any subsequent court order
confirming said decision. The parties shall equally advance the costs incurred
by arbitration. The Arbitrator, however, shall have the discretion to award such
costs as well as attorneys' fees to the party prevailing in the arbitration
proceedings.
12.3 WITHHOLDING TAXES. The Company may withhold from any benefits
payable under this Agreement all federal, state, city or other taxes as shall be
required pursuant to any law or governmental regulation or ruling.
12.4 AMENDMENTS. No amendment or modification of this Agreement
shall be deemed effective unless made in writing signed by the parties hereto.
12.5 NO WAVIER. No term or condition of this Agreement shall be
deemed to have been waived nor shall there be any estoppel to enforce any
provisions of this Agreement, except by a statement in writing signed by the
party against whom enforcement of the waiver or estoppel is sought. Any written
waiver shall not be deemed a continuing waiver unless specifically stated, shall
operate only as to the specific term or condition waived and shall not
constitute a waiver of such term or condition for the future or as to any act
other than that specifically waived.
12.6 SEVERABILITY. To the extent any provision of this Agreement
shall be invalid or unenforceable, it shall be considered deleted here from and
the remainder of such provision and of this Agreement shall be unaffected and
shall continue in full force and effect.
12.7 SURVIVAL. Sections 5, 6, 7, and 8 shall survive termination
of this Agreement.
12.8 NOTICES. Any and all notices, requests or other
communications required or permitted in or by any provision of this Agreement
shall be in writing and may be delivered personally or by certified mail
directed to the addressee at such person's or entity's last known post office
address, and if given by certified mail, shall be deemed to have been delivered
when deposited in such, mail postage prepaid.
12.9 LEGAL PROCEEDINGS. In the event of legal proceedings,
including arbitration as set forth in Section 12.2 above, the prevailing party
shall be entitled, in addition to such relief as is deemed to be appropriate, to
recover such costs and reasonable attorneys' fees as are incurred therein.
7
This Agreement is executed on February 10, 2003, in San Diego,
California.
COMPANY:
SPACEDEV, INC. EMPLOYEE:
By: /s/ Xxxxx X. Xxxxxx /s/ Xxxxxxx X. Xxxxxxx
--------------------------
Title: Chief Executive Officer Xxxxxxx X. Xxxxxxx
8
SPACEDEV, INC.
XXXXXXX X. XXXXXXX --SCHEDULE A
STARTING DATE: February 10, 2003
POSITION: Chief Financial Officer
POSITION OBJECTIVE:
This position is directly responsible for overseeing all financial aspects of
the Company, and reports directly to CEO. This position also acts as the
Secretary of the Board of Directors.
RESPONSIBILITIES:
o SEC reporting
o Strategic financial planning/modeling
o Cash flow management
o Accounting management
o Investor relations
o Banking relationships
o Securing capital investment (as necessary).
SALARY PER ANNUM: $100,000 plus 1% of any equity financing raised at market on
an as-needed basis, or 4% of any equity financing raised above $1/share on an
as-needed basis. All equity financing raised implies that the Board of Directors
has accepted the terms and conditions of this financing. Performance and salary
review at the end of first six months with the plan to increase salary to
$112,500 triggered by establishing a line of credit acceptable to management and
the Board of Directors within this timeframe. Performance and salary reviews
will be conducted at the end of each of the subsequent three (3) six-month
periods, with the intention to increase salary an additional $12,500 with each
review, provided appropriate accomplishments (agreed upon between Employee and
CEO at the beginning of each of these periods) are achieved during that period.
SPACEDEV STOCK OPTIONS: Employee is eligible to participate in the SpaceDev's
annual Incentive Stock Option Plan. Employee will also receive incentive stock
options (defined in the Stock Option Plan) to purchase up to 180,000 SpaceDev
common shares ("standard block") to be granted at the date of the signing of
this agreement, and vesting during employment, over 60 months, as follows:
-------------------- ------------------------ -------------------------
STOCK OPTIONS EXERCISE PRICE VESTING
-------------------- ------------------------ -------------------------
18,000 FMV* at Grant Date 6 mos. after Grant Date
-------------------- ------------------------ -------------------------
18,000 FMV at Grant Date 12 mos. after Grant Date
-------------------- ------------------------ -------------------------
18,000 FMV at Grant Date 18 mos. after Grant Date
-------------------- ------------------------ -------------------------
18,000 FMV at Grant Date 24 mos. after Grant Date
-------------------- ------------------------ -------------------------
18,000 FMV at Grant Date 30 mos. after Grant Date
-------------------- ------------------------ -------------------------
18,000 FMV at Grant Date 36 mos. after Grant Date
-------------------- ------------------------ -------------------------
18,000 FMV at Grant Date 42 mos. after Grant Date
-------------------- ------------------------ -------------------------
18,000 FMV at Grant Date 48 mos. after Grant Date
-------------------- ------------------------ -------------------------
18,000 FMV at Grant Date 54 mos. after Grant Date
-------------------- ------------------------ -------------------------
18,000 FMV at Grant Date 60 mos. after Grant Date
-------------------- ------------------------ -------------------------
* Fair Market Value
9
The "Standard Block" of options shall vest in an accelerated fashion based upon
the following criteria -- 36,000 options shall vest upon the SpaceDev stock
closing price maintaining $1.00/share or more for thirty (30) consecutive
business days; the next 36,000 options shall vest upon the SpaceDev stock
closing price maintaining $1.50/share or more for thirty (30) consecutive
business days; the next 36,000 options shall vest upon the SpaceDev stock
closing price maintaining $2.00/share or more for thirty (30) consecutive
business days; the next 36,000 options shall vest upon the SpaceDev stock
closing price maintaining $2.50/share or more for thirty (30) consecutive
business days; the remaining unvested options in the standard block shall vest
upon the SpaceDev stock closing price maintaining $3.00/share or more for thirty
(30) consecutive business days. In the absence of these criteria being achieved,
the "Standard Block" of options shall vest according to the schedule outlined in
the table above.
In addition to the "Standard Block" of options, Employee will also be granted
additional incentive stock options (defined in the Stock Option Plan) to
purchase SpaceDev common shares which will vest upon completion of the following
accomplishments:
o 25,000 stock options shall vest upon signing this agreement,
o 20,000 stock options shall vest upon successfully negotiating
terms of the release of the current security for guarantees
linked with the SpaceDev building lease,
o 20,000 stock options shall vest upon the Company achieving a
working capital ratio of 1:1 or better,
o Either 50,000 stock options shall vest upon full repayment of
the convertible debt by July 30, 2003; or 30,000 stock options
shall vest upon full repayment of the convertible debt by
December 31, 2003,
o 20,000 stock options shall vest upon the establishment of a
Line of Credit for the Company.
o 20,000 stock options shall vest upon listing the SpaceDev
stock on an exchange "above" the current OTC listing,
o 20,000 stock options vest by performance of criteria
established by the CEO in 2004,
o 20,000 stock options vest by performance of criteria
established by the CEO in 2005.
VACATION DAYS PER ANNUM: 3 weeks (combined vacation & sick leave), 2 Personal
Days. Time taken off before the normal vacation time accrues will be treated as
"leave without pay."
MEDICAL/DENTAL/OTHER BENEFITS PLAN: Standard SpaceDev Plan per Employee
Handbook.
SEVERANCE:
CHANGE OF CONTROL -- OWNERSHIP:
If, as a result of a Change in Control, Employee is either involuntarily
terminated other than for Cause or resigns for Good Reason within the Election
Window, as defined herein, the Company shall pay Employee the full amount of the
accrued but unpaid salary earned through the date of termination, plus a cash
payment for all unused vacation time which Employee may have accrued as of the
date of termination. In addition, the Company shall pay Employee a severance
allowance equal to six (6) months compensation at Employee's then current Base
Salary less taxes and social security required to be withheld, payable
semi-monthly pursuant to the payroll procedures regularly established by the
Company, and shall maintain health benefits for Employee for a period of six (6)
10
months following the date of termination. In addition, the Company shall provide
six (6) months of executive outplacement starting on the date of termination.
All stock options held by Employee as of the date of termination shall
immediately vest as of that date and shall expire within ninety (90) days in
accordance with their terms. If required by a successor company, Executive will
not engage in any competitive activity for a period of one (1) year following a
Change in Control.
For purposes of this provision, "Election Window" shall mean the thirty-day
period beginning on the earlier of the date a Change in Control is publicly
announced or the date a Change in Control takes effect. A Change in Control
shall be deemed to have occurred if:
(A) The acquisition (other than from Company) by any person, entity or "group",
within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act
(excluding, for this purpose, any employee benefit plan of Company or its
subsidiaries which acquires beneficial ownership of voting securities of
Company) of beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of 50% or more of either the then outstanding shares of
Common Stock or the combined voting power of Company's then outstanding voting
securities entitled to vote generally in the election of directors; or
(B) Approval by the stockholders of Company of a reorganization, merger,
consolidation, in each case, with respect to which the shares of Company voting
stock outstanding immediately prior to such reorganization, merger or
consolidation do not constitute or become exchanged for or converted into more
than 50% of the combined voting power entitled to vote generally in the election
of directors of the reorganized, merged or consolidated company's then
outstanding voting securities, or a liquidation or dissolution of Company or of
the sale of all or substantially all of the assets of Company.
"Good Reason" shall mean a resignation of Employee's employment during the Term
as a result of any of the following: (i) a meaningful and detrimental alteration
in your position, titles, responsibilities or reporting responsibilities from
that contemplated under this Agreement; provided, however, that a change in your
position, titles, responsibilities or reporting responsibilities as a result of
or in connection with a Change in Control shall not constitute an event of Good
Reason for purposes of this Agreement; (ii) the failure of the Company to obtain
an agreement reasonably satisfactory to you from any successor to assume and
agree to perform this Agreement; or (iii) the significant reduction by the
Company in your annual rate of Base Salary; or (iv) relocation of the principal
place of employment of Employee by a distance greater than thirty-five (35)
miles from the current headquarters of the Company.
CHANGE OF CONTROL -- MANAGEMENT:
In the event of a change in CEO from Xx. Xxxxxx to anyone other than Xx.
Xxxxxxx, Xx. Xxxxxxxx or Xx. Xxxxxxx, or the addition of a President or COO
other than Xx. Xxxxxxx, Xx. Xxxxxxxx or Xx. Xxxxxxx, or within 90 days a new CFO
is brought in, or the Employee is either involuntarily terminated other than for
Cause or resigns due to irreconcilable differences between the employee and the
new CEO/President/COO (and not merely for financial gain), then the Company
shall pay Employee the full amount of the accrued but unpaid salary earned
through the date of termination, plus a cash payment for all unused vacation
time which Employee may have accrued as of the date of termination. In addition,
11
the Company shall pay Employee a severance allowance equal to three (3) months
compensation at Employee's then current Base Salary less taxes and social
security required to be withheld, payable semi-monthly pursuant to the payroll
procedures regularly established by the Company, and shall maintain health
benefits for Employee for a period of three (3) months following the date of
termination. In addition, the Company shall provide three (3) months of
executive outplacement starting on the date of termination. One-half of all
stock options held by Employee in the "Standard Block" as of the date of
termination shall immediately vest as of that date and shall expire within three
(3) years in accordance with their terms. Employee may not sell more than 1/3 of
purchased options (shares) per year, without prior consent of the Board of
Directors.
OTHER:
If Employee is involuntarily terminated other than for Cause, the Company shall
pay Employee the full amount of the accrued but unpaid salary earned through the
date of termination, plus a cash payment for all unused vacation time, which
Employee may have accrued as of the date of termination. In addition, the
Company shall pay Employee a severance allowance equal to a period of up to six
(6) months compensation at Employee's then current Base Salary less taxes and
social security required to be withheld, payable semi-monthly pursuant to the
payroll procedures regularly established by the Company, and shall maintain
health benefits for Employee for the same period of up to six (6) months
following the date of termination. The precise period shall be determined based
upon Employee's time of employment in the Company on the date of termination
according to the following schedule: one (1) month available on or after
Employee's three month anniversary of employment; two (2) months available on or
after Employee's six (6) month anniversary of employment; three (3) months
available on or after Employee's nine (9) month anniversary; four (4) months
available on or after Employee's twelve (12) month anniversary; five (5) months
available on or after Employee's fifteen (15) month anniversary; six (6) months
available on or after Employee's eighteen (18) month anniversary. In addition,
the Company shall provide, for the same period defined above, up to six (6)
months of executive outplacement starting on the date of termination. All vested
options held by Employee shall expire within three (3) years of termination date
in accordance with their terms. Employee may not sell more than 1/3 of purchased
options (shares) per year, without prior consent of the Board of Directors.
12
