Exhibit 10.119
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into
this 1st day of April 2003 by and between Spacehab, Incorporated, a Washington
State corporation (the "Company") and Michael E. Kearney (the "Employee").
WHEREAS, the Company desires to employ Employee under the terms and
conditions of this Agreement for the purpose of providing services in
furtherance of the Company's business and such other businesses in which the
Company may be engaged during the term of this Agreement (referred to
collectively as the "Business") and Employee desires to be employed by the
Company for that purpose; and
WHEREAS, Employee, in the course of performing such services, will
have access to confidential financial information, trade secrets, and other
confidential and proprietary information of the Company;
THEREFORE, in consideration of these recitals and the mutual
covenants and agreements hereinafter set forth, the parties hereto agree as
follows:
SECTION 1. EMPLOYMENT
1.1 Duties. The Company will employ Employee as President and Chief
Executive Officer for the term of this Agreement. Employee will be assigned such
duties with regard to the Business as are generally performed by such an
employee of the Company, and such other duties as may from time to time be
assigned to Employee by the Company's Board of Directors.
1.2 Performance. Employee will devote his exclusive and full
professional time and attention to his duties as an employee of the Company
(except as hereinafter permitted) and to perform such duties in an efficient,
trustworthy and businesslike manner. In addition, Employee will not render to
others any service of any kind for compensation or engage in any other business
activity (including without limitation any involvement in any business in which
the Employee has any administrative or operating responsibility) except as to
any other activities which are approved in writing by the Board of Directors or
its designee.
SECTION 2. TERM OF EMPLOYMENT
2.1 Term. The initial term of employment of Employee pursuant to this
Agreement shall be a period of two years from the commencement date of this
Agreement, such date being the 1st day of April, 2003 (the "Commencement Date")
through March 31, 2005. Unless written notice is provided to Employee by Company
at least sixty (60) days prior to the end of the initial term of this Agreement
or any extension thereof, as applicable, the term of this Agreement will
automatically be extended for
successive one year periods. Notwithstanding the foregoing, Employee's
employment may be sooner terminated as described in Sections 2.2 through 2.5
hereof.
2.2 Termination for Cause. The Company shall have the right to
terminate this Agreement by written notice for the following causes (a
"Termination for Cause"):
(a) Conduct which is detrimental to the Company's reputation,
goodwill or business operations;
(b) Neglect of Employee's duties or breach of Employee's duties
or any failure to perform satisfactorily such duties, or misconduct in
discharging such duties;
(c) Employee's repeated absence from his duties without the
consent of the Board of Directors or its designee;
(d) Employee's failure or refusal to comply with the directions
of the Board of Directors or its designee, or with the policies, standards and
regulations of the Company;
(e) Commission by Employee of any act of fraud or dishonesty;
(f) Conviction of Employee for, or entry of a plea of guilty or
nolo contendere by Employee with respect to, any criminal act;
(g) Breach or threatened breach of the restrictive covenants set
forth in Section 5 of this Agreement.
Upon any Termination for Cause, payment of all compensation to
Employee under Section 3 of this Agreement shall cease immediately.
2.3 Termination by the Company Due to Disability or Death. Employee
acknowledges that his duties pursuant to this Agreement, including without
limitation Section 1.1, constitute the essential functions of his job. If
Employee is unable to perform his duties under this Agreement by reason of
illness or other physical or mental disability, the Company may notify him that
an event of disability ("Event of Disability") exists whereupon, provided he
remains disabled, Employee shall continue to receive the compensation described
in Section 3 hereof for a period of three (3) months after the date of the Event
of Disability. Such payments shall be reduced by any disability payment to which
Employee may be entitled in lieu of such compensation but not by any disability
payment for which Employee has privately contracted without the Company's
involvement. At the expiration of the three-month period, payment of such
compensation pursuant to Section 3 shall cease and this Agreement may be
terminated by the Company at its sole discretion. The term "disability" as used
herein shall mean a condition which prohibits Employee from performing his
duties hereunder with reasonable accommodation which he may request. If Employee
should die before the termination of this Agreement, Employee's compensation
under Section 3 hereof shall terminate upon the date of his death.
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2.4 Voluntary Termination. In the event Employee voluntarily
terminates his employment for any reason during the term of this Agreement or if
the Company terminates Employee's employment for Cause, payment of all
compensation under Section 3 shall immediately cease.
2.5 Termination by the Company Other than for Cause. The Company
shall have the right to terminate the employment of the Employee without Cause
whether during the initial term of any extension thereof upon written notice to
the Employee. If the Company terminates the employment of the Employee without
Cause pursuant to this Section 2.5, the Employee shall receive his Base Salary
(as defined below) plus the benefits described in Section 3.4 hereof for a
period of twelve months from the termination date.
2.6 Changes Upon a Change in Control. In the event following a Change
of Control (as that term is defined in Appendix A hereto) Employee's employment
is terminated or there is a material reduction in Employee's compensation or
authority, perquisites, position, title or responsibilities or the Employee is
required to relocate from the Houston, Texas area then the Company or its
successor shall pay to Employee (or his estate or representative) a lump sum
equal to twice the sum of (1) the Employee's then current Base Salary and (2)
the average of the last two annual bonuses paid to Employee and for a two year
period the benefits described in Section 3.4 hereof.
SECTION 3. COMPENSATION
3.1 Annual Salary. The Company shall pay to Employee an initial
salary of $315,000 payable in equal bi-monthly installments, or more frequently
if the Board of Directors determines that such salary shall be paid in more
frequent installments. The initial salary may be increased but not decreased by
the Company on a periodic basis. The salary in effect from time to time shall
constitute the Employee's "Base Salary."
3.2 Incentive Compensation. Employee will be entitled to participate
in all bonus and incentive compensation plans as may be maintained by the
Company for its management generally.
3.3 Reimbursement of Business Expenses. During the term of this
Agreement, the Company will reimburse the Employee for all authorized, ordinary
and necessary business expenses incurred by him in connection with the Business.
Reimbursement of such expenses shall be paid monthly, upon submission by
Employee to the Company of vouchers itemizing such expenses in a form
satisfactory to the Company, properly identifying the nature and business
purpose of any expenditures.
3.4 Benefits. During the term of this Agreement, Employee will be
entitled to such insurance, medical, savings, and investment plans, vacation,
sick leave, holiday and other benefits as may be given from time to time to
other employees of the Company set forth from time to time by the Board of
Directors.
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SECTION 4. ALL BUSINESS TO BE THE PROPERTY OF THE COMPANY
4.1 Business to be Property of the Company. Employee agrees that any
and all business and "confidential information" (as defined in Section 5.1
hereof) which are part of or relate to the Business and which are or have been
developed by him or by any employee of the Company or any of its affiliates or
subsidiaries, or their respective successors, including, without limitation,
contracts, fees, commissions, customer lists and any other incident of any
business developed by the Company, or carried on by Employee for the Company,
are and shall be the exclusive property of the Company for their sole use.
SECTION 5. COVENANTS OF NONDISCLOSURE, NONSOLICITATION AND NONCOMPETITION
5.1 Nondisclosure. Employee shall not at any time during or after
termination of Employee's employment with the Company, directly or indirectly,
use any proprietary, "confidential information" of the Company, for any purpose
not associated with Company activities, or disseminate or disclose any such
information to any person or entity not affiliated with the Company. Such
proprietary, "confidential information" includes, without limitation, customer
lists, computer technology, programs and data, whether online or off-loaded on
disk format, sales, marketing and prospecting methodologies, plans and
materials, and any other such plans, programs, methodologies and materials used
in managing, marketing or furthering the Business. Upon termination of
Employee's employment with the Company, Employee will return all documents,
records, notebooks, manuals, plans and materials, computer disks and similar
repositories of or containing Company proprietary, "confidential information",
including all copies thereof, then in Employee's possession or control, whether
prepared by Employee or otherwise. Employee will undertake all reasonably
necessary and appropriate steps to ensure that the confidentiality of Company
proprietary, "confidential information" shall be maintained.
5.2 Nonsolicitation. While Employee is employed by the Company, and
for a period of one year following termination of Employee's employment,
Employee agrees to the following:
(a) Not to directly or indirectly contact, solicit, serve, cater
or provide services to any customer, client, organization or person who, or
which, has had a business relationship with the Company during the twelve (12)
month period preceding Employee's termination;
(b) Not to directly or indirectly influence or attempt to
influence any customer, client, organization or person who, or which, has had a
business relationship with the Company during the twelve (12) month period
preceding Employee's termination to direct or transfer away any business or
patronage from the Company;
(c) Not to directly or indirectly solicit or attempt to solicit
any employee, officer or director to leave the Company, or to contact any
customer or client
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in order to influence or attempt to influence the directing or transferring of
any business or patronage away from the Company;
(d) Not to directly or indirectly interfere with or disrupt any
relationship, contractual or otherwise, between the Company and their respective
customers, clients, employees, independent contractors, agents, suppliers,
distributors or other similar parties; and
(e) To advise any and all employers or potential employers of
Employee's obligations hereunder.
5.3 Noncompetition. While Employee is employed by the Company, and
for a period of one year following termination of Employee's employment,
Employee agrees that he will neither, directly or indirectly, engage or hold an
interest in any business competing with the Business as then conducted by the
Company or their respective successors, nor directly or indirectly have any
interest in, own, manage, operate, control, be connected with as a stockholder
(other than as a stockholder of less than five percent (5%) of a publicly held
corporation), joint venturer, officer, director, partner, employee or
consultant, or otherwise engage or invest or participate in, any business which
shall compete with the Business as then conducted by the Company, or their
respective successors.
5.4 Applicability. The provisions of Sections 5.1, 5.2, and 5.3
immediately preceding shall remain in effect in accordance with their respective
terms notwithstanding any termination of Employee's employment with the Company
or its successors, regardless of the cause or circumstances thereof and whether
such termination was voluntary or involuntary. Further, Employee's covenants of
nondisclosure, noncompetition and nonsolicitation along with the Company's
remedies for the breach or threatened breach of those covenants shall remain in
effect in accordance with their respective terms following any termination of
this Agreement.
5.5 Remedies. In view of the services which Employee will perform
hereunder, which are special, unique, extraordinary and intellectual in
character, which place him in a position of confidence and trust with the
customers and employees of the Company and which provide him with access to
confidential financial information, trade secrets, "know-how" and other
confidential and proprietary information of the Company, in view of the
geographic scope and nature of the business in which the Company are engaged,
and recognizing the value of this Agreement to him, Employee expressly
acknowledges that the restrictive covenants set forth in this Agreement,
including, without limitation, the duration, the business scope and the
geographic scope of such covenants, are necessary in order to protect and
maintain the proprietary interests and other legitimate business interests of
the Company, and that the enforcement of such restrictive covenants will not
prevent him from earning a livelihood. Employee further acknowledges that the
remedy at law for any breach or threatened breach of this Agreement will be
inadequate and, accordingly, that the Company shall, in addition to all other
available remedies (including, without limitation, seeking such damages as it
can show it has sustained by reason of such breach), be entitled to injunctive
or any other appropriate form of equitable relief. In the event Employee
breaches or threatens to
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breach these restrictive covenants, he shall not receive any further payments
from the Company pursuant to this Agreement.
SECTION 6. MISCELLANEOUS PROVISIONS
6.1 Assignment and Performance. The Company may assign its rights and
obligations under this Agreement to the Company or to any corporation or other
entity without Employee's consent. This Agreement shall inure to the benefit of
and be binding upon the successors and assigns of the Company. Employee's
obligation to provide services hereunder may not be assigned to or assumed by
any other person or entity.
6.2 Notices. All notices, requests, demands or other communications
under this Agreement shall be in writing and shall only be deemed to be duly
given if made in writing and sent by first class mail, overnight courier, or
telecopy to the following addresses:
Spacehab Incorporated
12130 Highway 3
Building One
Webster, Texas 77598
and
Michael E. Kearney
6103 Newcastle Street
Bellaire, TX 77401
6.3 Severability. Any provision of this Agreement which is deemed
invalid, illegal or unenforceable in any jurisdiction shall, as to that
jurisdiction and subject to this paragraph, be ineffective to the extent of such
invalidity, illegality or unenforceability, without affecting in any way the
remaining provisions hereof in such jurisdiction or rendering that or any other
provision of this Agreement invalid, illegal, or unenforceable in any other
jurisdiction. If any covenant should be deemed invalid, illegal or unenforceable
because its scope is considered excessive, such covenant shall be modified so
that the scope of the covenant is reduced only to the minimum extent necessary
to render the modified covenant valid, legal and enforceable.
6.4 Amendment and Waiver. This Agreement constitutes the entire
agreement between the parties hereto as to the matters addressed herein and
supercedes any and all prior agreements or understandings with respect to such
matters. This Agreement may be modified, amended or waived only by a written
instrument signed by all the parties hereto. No waiver or breach of any
provision hereof shall be a waiver of any future breach, whether similar or
dissimilar in nature.
6.5 Injunctive Relief. The parties hereto agree that money damages
would be an inadequate remedy for the Company in the event of breach or
threatened breach of this Agreement and thus, in any such event, the Company
may, either with or
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without pursuing any potential damage remedies, immediately obtain and enforce
any injunction prohibiting Employee from violating this Agreement.
6.6 Applicable Law. This Agreement has been made and its validity,
performance and effect shall be determined in accordance with the laws of the
State of Texas.
6.7 Counterparts. This Agreement may be executed simultaneously in
two or more counterparts, each of which shall be deemed an original, but all of
which shall constitute one and the same instrument.
6.8 Interpretation. The headings contained in this Agreement are for
reference purposes only and shall not affect in any ways the meaning or
interpretation of this Agreement. The language in all parts of this Agreement
shall in all cases be construed according to its fair meaning, and not strictly
for or against any party hereto. In this Agreement, unless the context otherwise
requires, the masculine, feminine and neuter genders and the singular and the
plural include one another.
6.9 Non-Waiver of Rights and Breaches. No failure or delay of any
party herein in the exercise of any right given to such party hereunder shall
constitute a waiver thereof unless the time specified herein for the exercise of
such right has expired, nor shall any single or partial exercise of any right
preclude other or further exercise thereof or of any other right. The waiver of
a party hereto of any default of any other party shall not be deemed to be a
waiver of any subsequent default or other default by such party.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date first above written.
COMPANY:
SPACEHAB, INCORPORATED
By: /s/ Shelley A. Harrison
------------------------------
Name: Shelley A. Harrison
Title: Chairman
EMPLOYEE:
/s/ Michael E. Kearney
-------------------------------
Michael E. Kearney
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Exhibit A
"Change in Control" of the Company shall be deemed to occur on: (i)
the date that any person or group deemed a person under Sections 3(a)(9) and
13(d)(3) of the Act, other than the Company and its subsidiaries as determined
immediately prior to that date, in a transaction or series of transactions has
become the beneficial owner, directly or indirectly (with beneficial ownership
determined as provided in Rule 13d-3, or any successor rule, under such Act) of
20% or more of the outstanding securities of the Company having the right under
ordinary circumstances to vote at an election of the Board of Directors of the
Company; (ii) the date on which one-third or more of the members of the Board of
Directors of the Company shall consist of persons other than Current Directors
(for these purposes, a "Current Director" shall mean any member of the Board of
Directors of the Company as of the effective date of the Plan and any successor
of a Current Director whose nomination or election has been approved by a
majority of the Current Directors then on the Board of Directors of the
Company); or (iii) the date of approval by the shareholders of the Company of an
agreement providing for (A) the merger or consolidation of the Company with
another corporation where the shareholders of the Company, immediately prior to
the merger or consolidation, would not beneficially own, immediately after the
merger or consolidation, shares entitling such shareholders to 50% or more of
all votes (without consideration of the rights of any class of stock to elect
directors by a separate class vote) to which all shareholders of the corporation
issuing cash or securities in the merger or consolidation would be entitled in
the election of directors or where the members of the Board of Directors of the
Company, immediately prior to the merger or consolidation, would not,
immediately after the merger or consolidation or (B) the sale or other
disposition of all or substantially all the assets of the Company.
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