Exhibit 10.2

 

CAPSTONE TURBINE CORPORATION

 

CONSULTING AGREEMENT

 

This Consulting Agreement (“Agreement”) is entered into as of December 1, 2008,
by and between Capstone Turbine Corporation (the “Company”) and Leigh Estus
(“Consultant”).  The Company desires to retain Consultant as an independent
contractor to perform consulting services for the Company, and Consultant is
willing to perform such services, on the terms described below.  In
consideration of the mutual promises contained herein, the parties agree as
follows:

 

1.     SERVICES AND COMPENSATION.  CONSULTANT AGREES TO PERFORM FOR THE COMPANY
THE SERVICES DESCRIBED IN EXHIBIT A (THE “SERVICES”), AND THE COMPANY AGREES TO
PAY CONSULTANT THE COMPENSATION DESCRIBED IN EXHIBIT A FOR CONSULTANT’S
PERFORMANCE OF THE SERVICES.

 

2.     CONFIDENTIALITY.

 

A.    DEFINITION.  “CONFIDENTIAL INFORMATION” MEANS ANY NON-PUBLIC INFORMATION
THAT RELATES TO THE ACTUAL OR ANTICIPATED BUSINESS OR RESEARCH AND DEVELOPMENT
OF THE COMPANY, TECHNICAL DATA, TRADE SECRETS OR KNOW-HOW, INCLUDING, BUT NOT
LIMITED TO, RESEARCH, PRODUCT PLANS OR OTHER INFORMATION REGARDING COMPANY’S
PRODUCTS OR SERVICES AND MARKETS THEREFOR, CUSTOMER LISTS AND CUSTOMERS
(INCLUDING, BUT NOT LIMITED TO, CUSTOMERS OF THE COMPANY ON WHOM CONSULTANT
CALLED OR WITH WHOM CONSULTANT BECAME ACQUAINTED DURING THE TERM OF THIS
AGREEMENT), SOFTWARE, DEVELOPMENTS, INVENTIONS, PROCESSES, FORMULAS, TECHNOLOGY,
DESIGNS, DRAWINGS, ENGINEERING AND HARDWARE CONFIGURATION INFORMATION,
MARKETING, FINANCES OR OTHER BUSINESS INFORMATION.  CONFIDENTIAL INFORMATION
DOES NOT INCLUDE INFORMATION THAT (I) IS KNOWN TO CONSULTANT AT THE TIME OF
DISCLOSURE TO CONSULTANT BY THE COMPANY AS EVIDENCED BY WRITTEN RECORDS OF
CONSULTANT, (II) HAS BECOME PUBLICLY KNOWN AND MADE GENERALLY AVAILABLE THROUGH
NO WRONGFUL ACT OF CONSULTANT OR (III) HAS BEEN RIGHTFULLY RECEIVED BY
CONSULTANT FROM A THIRD PARTY WHO IS AUTHORIZED TO MAKE SUCH DISCLOSURE.

 

B.    NONUSE AND NONDISCLOSURE.  CONSULTANT WILL NOT, DURING OR SUBSEQUENT TO
THE TERM OF THIS AGREEMENT, (I) USE THE CONFIDENTIAL INFORMATION FOR ANY PURPOSE
WHATSOEVER OTHER THAN THE PERFORMANCE OF THE SERVICES ON BEHALF OF THE COMPANY
OR (II) DISCLOSE THE CONFIDENTIAL INFORMATION TO ANY THIRD PARTY.  CONSULTANT
AGREES THAT ALL CONFIDENTIAL INFORMATION WILL REMAIN THE SOLE PROPERTY OF THE
COMPANY.  CONSULTANT ALSO AGREES TO TAKE ALL REASONABLE PRECAUTIONS TO PREVENT
ANY UNAUTHORIZED DISCLOSURE OF SUCH CONFIDENTIAL INFORMATION, INCLUDING, BUT NOT
LIMITED TO, INFORMING EACH OF CONSULTANT’S EMPLOYEES AND CONTRACTORS, IF ANY,
WITH ACCESS TO ANY CONFIDENTIAL INFORMATION OF THE TERMS OF THIS PROVISION. 
WITHOUT THE COMPANY’S PRIOR WRITTEN APPROVAL, CONSULTANT WILL NOT DIRECTLY OR
INDIRECTLY DISCLOSE TO ANYONE THE EXISTENCE OF THIS AGREEMENT OR THE FACT THAT
CONSULTANT HAS THIS ARRANGEMENT WITH THE COMPANY.

 

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C.    FORMER CLIENT CONFIDENTIAL INFORMATION.  CONSULTANT AGREES THAT CONSULTANT
WILL NOT, DURING THE TERM OF THIS AGREEMENT, IMPROPERLY USE OR DISCLOSE ANY
PROPRIETARY INFORMATION OR TRADE SECRETS OF ANY FORMER OR CURRENT EMPLOYER OF
CONSULTANT OR OTHER PERSON OR ENTITY WITH WHICH CONSULTANT HAS AN AGREEMENT OR
DUTY TO KEEP IN CONFIDENCE INFORMATION ACQUIRED BY CONSULTANT, IF ANY. 
CONSULTANT ALSO AGREES THAT CONSULTANT WILL NOT BRING ONTO THE COMPANY’S
PREMISES ANY UNPUBLISHED DOCUMENT OR PROPRIETARY INFORMATION BELONGING TO ANY
SUCH EMPLOYER, PERSON OR ENTITY UNLESS CONSENTED TO IN WRITING BY SUCH EMPLOYER,
PERSON OR ENTITY.

 

D.    THIRD PARTY CONFIDENTIAL INFORMATION.  CONSULTANT RECOGNIZES THAT THE
COMPANY HAS RECEIVED AND IN THE FUTURE WILL RECEIVE FROM THIRD PARTIES THEIR
CONFIDENTIAL OR PROPRIETARY INFORMATION SUBJECT TO A DUTY ON THE COMPANY’S PART
TO MAINTAIN THE CONFIDENTIALITY OF SUCH INFORMATION AND TO USE IT ONLY FOR
CERTAIN LIMITED PURPOSES.  CONSULTANT AGREES THAT, DURING THE TERM OF THIS
AGREEMENT AND THEREAFTER, CONSULTANT OWES THE COMPANY AND SUCH THIRD PARTIES A
DUTY TO HOLD ALL SUCH CONFIDENTIAL OR PROPRIETARY INFORMATION IN THE STRICTEST
CONFIDENCE AND NOT TO DISCLOSE IT TO ANY PERSON, FIRM OR CORPORATION OR TO USE
IT EXCEPT AS NECESSARY IN CARRYING OUT THE SERVICES FOR THE COMPANY CONSISTENT
WITH THE COMPANY’S AGREEMENT WITH SUCH THIRD PARTY.

 

E.     RETURN OF MATERIALS.  UPON THE TERMINATION OF THIS AGREEMENT, OR UPON
COMPANY’S EARLIER REQUEST, CONSULTANT WILL DELIVER TO THE COMPANY ALL OF THE
COMPANY’S PROPERTY, INCLUDING BUT NOT LIMITED TO ALL ELECTRONICALLY STORED
INFORMATION AND PASSWORDS TO ACCESS SUCH PROPERTY, OR CONFIDENTIAL INFORMATION
THAT CONSULTANT MAY HAVE IN CONSULTANT’S POSSESSION OR CONTROL.

 

3.     OWNERSHIP.

 

A.    ASSIGNMENT.  CONSULTANT AGREES THAT ALL COPYRIGHTABLE MATERIAL, NOTES,
RECORDS, DRAWINGS, DESIGNS, INVENTIONS, IMPROVEMENTS, DEVELOPMENTS, DISCOVERIES
AND TRADE SECRETS CONCEIVED, DISCOVERED, DEVELOPED OR REDUCED TO PRACTICE BY
CONSULTANT, SOLELY OR IN COLLABORATION WITH OTHERS, DURING THE TERM OF THIS
AGREEMENT THAT RELATE IN ANY MANNER TO THE BUSINESS OF THE COMPANY THAT
CONSULTANT MAY BE DIRECTED TO UNDERTAKE, INVESTIGATE OR EXPERIMENT WITH OR THAT
CONSULTANT MAY BECOME ASSOCIATED WITH IN WORK, INVESTIGATION OR EXPERIMENTATION
IN THE COMPANY’S LINE OF BUSINESS IN PERFORMING THE SERVICES UNDER THIS
AGREEMENT (COLLECTIVELY, “INVENTIONS”), ARE THE SOLE PROPERTY OF THE COMPANY.
CONSULTANT ALSO AGREES TO ASSIGN (OR CAUSE TO BE ASSIGNED) AND HEREBY ASSIGNS
FULLY TO THE COMPANY ALL INVENTIONS AND ANY COPYRIGHTS, PATENTS, MASK WORK
RIGHTS OR OTHER INTELLECTUAL PROPERTY RIGHTS RELATING TO ALL INVENTIONS.

 

B.    FURTHER ASSURANCES.  CONSULTANT AGREES TO ASSIST COMPANY, OR ITS DESIGNEE,
AT THE COMPANY’S EXPENSE, IN EVERY PROPER WAY TO SECURE THE COMPANY’S RIGHTS IN
INVENTIONS AND ANY COPYRIGHTS, PATENTS, MASK WORK RIGHTS OR OTHER INTELLECTUAL
PROPERTY RIGHTS RELATING TO ALL INVENTIONS IN ANY AND ALL COUNTRIES, INCLUDING
THE DISCLOSURE TO THE COMPANY OF ALL PERTINENT INFORMATION AND DATA WITH RESPECT
TO ALL INVENTIONS, THE EXECUTION OF ALL APPLICATIONS, SPECIFICATIONS, OATHS,
ASSIGNMENTS AND ALL OTHER INSTRUMENTS THAT THE COMPANY MAY DEEM NECESSARY IN
ORDER TO APPLY FOR AND OBTAIN SUCH RIGHTS AND IN ORDER TO ASSIGN AND CONVEY TO
THE COMPANY, ITS SUCCESSORS, ASSIGNS AND NOMINEES THE SOLE AND EXCLUSIVE RIGHT,
TITLE AND INTEREST IN AND TO ALL INVENTIONS, AND ANY COPYRIGHTS, PATENTS, MASK
WORK RIGHTS OR OTHER INTELLECTUAL PROPERTY RIGHTS RELATING TO ALL INVENTIONS. 
CONSULTANT ALSO AGREES THAT CONSULTANT’S OBLIGATION TO EXECUTE OR CAUSE TO BE
EXECUTED ANY SUCH INSTRUMENT OR PAPERS SHALL CONTINUE AFTER THE TERMINATION OF
THIS AGREEMENT.

 

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C. PRE-EXISTING MATERIALS.  SUBJECT TO SECTION 3.A, CONSULTANT AGREES THAT IF,
IN THE COURSE OF PERFORMING THE SERVICES, CONSULTANT INCORPORATES INTO ANY
INVENTION DEVELOPED UNDER THIS AGREEMENT ANY PRE-EXISTING INVENTION,
IMPROVEMENT, DEVELOPMENT, CONCEPT, DISCOVERY OR OTHER PROPRIETARY INFORMATION
OWNED BY CONSULTANT OR IN WHICH CONSULTANT HAS AN INTEREST, (I) CONSULTANT WILL
INFORM COMPANY, IN WRITING BEFORE INCORPORATING SUCH INVENTION, IMPROVEMENT,
DEVELOPMENT, CONCEPT, DISCOVERY OR OTHER PROPRIETARY INFORMATION INTO ANY
INVENTION, AND (II) THE COMPANY IS HEREBY GRANTED A NONEXCLUSIVE, ROYALTY-FREE,
PERPETUAL, IRREVOCABLE, WORLDWIDE LICENSE TO MAKE, HAVE MADE, MODIFY, USE AND
SELL SUCH ITEM AS PART OF OR IN CONNECTION WITH SUCH INVENTION. CONSULTANT WILL
NOT INCORPORATE ANY INVENTION, IMPROVEMENT, DEVELOPMENT, CONCEPT, DISCOVERY OR
OTHER PROPRIETARY INFORMATION OWNED BY ANY THIRD PARTY INTO ANY INVENTION
WITHOUT COMPANY’S PRIOR WRITTEN PERMISSION.

 

D.    ATTORNEY-IN-FACT.  CONSULTANT AGREES THAT, IF THE COMPANY IS UNABLE
BECAUSE OF CONSULTANT’S UNAVAILABILITY, DISSOLUTION, MENTAL OR PHYSICAL
INCAPACITY, OR FOR ANY OTHER REASON, TO SECURE CONSULTANT’S SIGNATURE FOR THE
PURPOSE OF APPLYING FOR OR PURSUING ANY APPLICATION FOR ANY UNITED STATES OR
FOREIGN PATENTS OR MASK WORK OR COPYRIGHT REGISTRATIONS COVERING THE INVENTIONS
ASSIGNED TO THE COMPANY IN SECTION 3.A, THEN CONSULTANT HEREBY IRREVOCABLY
DESIGNATES AND APPOINTS THE COMPANY AND ITS DULY AUTHORIZED OFFICERS AND AGENTS
AS CONSULTANT’S AGENT AND ATTORNEY-IN-FACT, TO ACT FOR AND ON CONSULTANT’S
BEHALF TO EXECUTE AND FILE ANY SUCH APPLICATIONS AND TO DO ALL OTHER LAWFULLY
PERMITTED ACTS TO FURTHER THE PROSECUTION AND ISSUANCE OF PATENTS, COPYRIGHT AND
MASK WORK REGISTRATIONS WITH THE SAME LEGAL FORCE AND EFFECT AS IF EXECUTED BY
CONSULTANT.

 

4.     CONFLICTING OBLIGATIONS.

 

A.    CONFLICTS.  CONSULTANT CERTIFIES THAT CONSULTANT HAS NO OUTSTANDING
AGREEMENT OR OBLIGATION THAT IS IN CONFLICT WITH ANY OF THE PROVISIONS OF THIS
AGREEMENT OR THAT WOULD PRECLUDE CONSULTANT FROM COMPLYING WITH THE PROVISIONS
OF THIS AGREEMENT.  CONSULTANT WILL NOT ENTER INTO ANY SUCH CONFLICTING
AGREEMENT DURING THE TERM OF THIS AGREEMENT.  CONSULTANT’S VIOLATION OF THIS
SECTION 4.A WILL BE CONSIDERED A MATERIAL BREACH UNDER SECTION 6.B.

 

B.    SUBSTANTIALLY SIMILAR DESIGNS.  IN VIEW OF CONSULTANT’S ACCESS TO THE
COMPANY’S TRADE SECRETS AND PROPRIETARY KNOW-HOW, CONSULTANT AGREES THAT
CONSULTANT WILL NOT, WITHOUT COMPANY’S PRIOR WRITTEN APPROVAL, DESIGN IDENTICAL
OR SUBSTANTIALLY SIMILAR DESIGNS AS THOSE DEVELOPED UNDER THIS AGREEMENT FOR ANY
THIRD PARTY DURING THE TERM OF THIS AGREEMENT AND FOR A PERIOD OF 12 MONTHS
AFTER THE TERMINATION OF THIS AGREEMENT. CONSULTANT ACKNOWLEDGES THAT THE
OBLIGATIONS IN THIS SECTION 4 ARE ANCILLARY TO CONSULTANT’S NONDISCLOSURE
OBLIGATIONS UNDER SECTION 2.

 

5.     REPORTS.  CONSULTANT ALSO AGREES THAT CONSULTANT WILL, FROM TIME TO TIME
DURING THE TERM OF THIS AGREEMENT OR ANY EXTENSION THEREOF, KEEP THE COMPANY
ADVISED AS TO CONSULTANT’S PROGRESS IN PERFORMING THE SERVICES UNDER THIS
AGREEMENT.  CONSULTANT FURTHER AGREES THAT CONSULTANT WILL, AS REQUESTED BY THE
COMPANY, PREPARE WRITTEN REPORTS WITH RESPECT TO SUCH PROGRESS.  THE COMPANY AND
CONSULTANT AGREE THAT THE TIME REQUIRED TO PREPARE SUCH WRITTEN REPORTS WILL BE
CONSIDERED TIME DEVOTED TO THE PERFORMANCE OF THE SERVICES.

 

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6.     TERM AND TERMINATION.

 

A.    TERM.  THE TERM OF THIS AGREEMENT WILL BEGIN ON THE DATE OF THIS AGREEMENT
AND WILL CONTINUE UNTIL THE EARLIER OF (I) FINAL COMPLETION OF THE SERVICES OR
(II) TERMINATION AS PROVIDED IN SECTION 6.B.

 

B.    TERMINATION.  EITHER PARTY MAY TERMINATE THIS AGREEMENT UPON GIVING THE
OTHER PARTY 14 DAYS’ PRIOR WRITTEN NOTICE OF SUCH TERMINATION PURSUANT TO
SECTION 11.E OF THIS AGREEMENT.   THE COMPANY MAY TERMINATE THIS AGREEMENT
IMMEDIATELY AND WITHOUT PRIOR NOTICE IF CONSULTANT REFUSES TO OR IS UNABLE TO
PERFORM THE SERVICES OR IS IN BREACH OF ANY MATERIAL PROVISION OF THIS
AGREEMENT.

 

C.    SURVIVAL.  UPON SUCH TERMINATION, ALL RIGHTS AND DUTIES OF THE COMPANY AND
CONSULTANT TOWARD EACH OTHER SHALL CEASE EXCEPT:

 

(1)   THE COMPANY WILL PAY, WITHIN 30 DAYS AFTER THE EFFECTIVE DATE OF
TERMINATION, ALL AMOUNTS OWING TO CONSULTANT FOR SERVICES COMPLETED AND ACCEPTED
BY THE COMPANY PRIOR TO THE TERMINATION DATE AND RELATED EXPENSES, IF ANY,
SUBMITTED IN ACCORDANCE WITH THE COMPANY’S POLICIES AND IN ACCORDANCE WITH THE
PROVISIONS OF SECTION 1 OF THIS AGREEMENT; AND

 

(2)   Section 2 (Confidentiality), Section 3 (Ownership), Section 4 (Conflicting
Obligations), Section 7 (Independent Contractor; Benefits),
Section 8 (Indemnification), Section 9 (Nonsolicitation) and Section 10
(Arbitration and Equitable Relief) will survive termination of this Agreement.

 

7.     INDEPENDENT CONTRACTOR; BENEFITS.

 

A.    INDEPENDENT CONTRACTOR.  IT IS THE EXPRESS INTENTION OF THE COMPANY AND
CONSULTANT THAT CONSULTANT PERFORM THE SERVICES AS AN INDEPENDENT CONTRACTOR TO
THE COMPANY.  NOTHING IN THIS AGREEMENT SHALL IN ANY WAY BE CONSTRUED TO MAKE
CONSULTANT AN AGENT, EMPLOYEE OR REPRESENTATIVE OF THE COMPANY.  WITHOUT
LIMITING THE GENERALITY OF THE FOREGOING, CONSULTANT IS NOT AUTHORIZED TO BIND
THE COMPANY TO ANY LIABILITY OR OBLIGATION OR TO REPRESENT THAT CONSULTANT HAS
ANY SUCH AUTHORITY.  CONSULTANT AGREES TO FURNISH (OR REIMBURSE THE COMPANY FOR)
ALL TOOLS AND MATERIALS NECESSARY TO ACCOMPLISH THIS AGREEMENT AND SHALL INCUR
ALL EXPENSES ASSOCIATED WITH PERFORMANCE, EXCEPT AS EXPRESSLY PROVIDED IN
EXHIBIT A.  CONSULTANT ACKNOWLEDGES AND AGREES THAT CONSULTANT IS OBLIGATED TO
REPORT AS INCOME ALL COMPENSATION RECEIVED BY CONSULTANT PURSUANT TO THIS
AGREEMENT.  CONSULTANT AGREES TO AND ACKNOWLEDGES THE OBLIGATION TO PAY ALL
SELF-EMPLOYMENT AND OTHER TAXES ON SUCH INCOME.

 

B.    BENEFITS.  THE COMPANY AND CONSULTANT AGREE THAT CONSULTANT WILL RECEIVE
NO COMPANY-SPONSORED BENEFITS FROM THE COMPANY.  IF CONSULTANT IS RECLASSIFIED
BY A STATE OR FEDERAL AGENCY OR COURT AS COMPANY’S EMPLOYEE, CONSULTANT WILL
BECOME A RECLASSIFIED EMPLOYEE AND WILL RECEIVE NO BENEFITS FROM THE COMPANY,
EXCEPT THOSE MANDATED BY STATE OR FEDERAL LAW, EVEN IF BY THE TERMS OF THE
COMPANY’S BENEFIT PLANS OR PROGRAMS OF THE COMPANY IN EFFECT AT THE TIME OF SUCH
RECLASSIFICATION, CONSULTANT WOULD OTHERWISE BE ELIGIBLE FOR SUCH BENEFITS.

 

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8.     INDEMNIFICATION.  CONSULTANT AGREES TO INDEMNIFY AND HOLD HARMLESS THE
COMPANY AND ITS DIRECTORS, OFFICERS AND EMPLOYEES FROM AND AGAINST ALL TAXES,
LOSSES, DAMAGES, LIABILITIES, COSTS AND EXPENSES, INCLUDING ATTORNEYS’ FEES AND
OTHER LEGAL EXPENSES, ARISING DIRECTLY OR INDIRECTLY FROM OR IN CONNECTION WITH
(I) ANY NEGLIGENT, RECKLESS OR INTENTIONALLY WRONGFUL ACT OF CONSULTANT OR
CONSULTANT’S ASSISTANTS, EMPLOYEES OR AGENTS, (II) A DETERMINATION BY A COURT OR
AGENCY THAT THE CONSULTANT IS NOT AN INDEPENDENT CONTRACTOR, (III) ANY BREACH BY
THE CONSULTANT OR CONSULTANT’S ASSISTANTS, EMPLOYEES OR AGENTS OF ANY OF THE
COVENANTS CONTAINED IN THIS AGREEMENT, (IV) ANY FAILURE OF CONSULTANT TO PERFORM
THE SERVICES IN ACCORDANCE WITH ALL APPLICABLE LAWS, RULES AND REGULATIONS, OR
(V) ANY VIOLATION OR CLAIMED VIOLATION OF A THIRD PARTY’S RIGHTS RESULTING IN
WHOLE OR IN PART FROM THE COMPANY’S USE OF THE WORK PRODUCT OF CONSULTANT UNDER
THIS AGREEMENT.

 

9.     NONSOLICITATION.  FROM THE DATE OF THIS AGREEMENT UNTIL 12 MONTHS AFTER
THE TERMINATION OF THIS AGREEMENT (THE “RESTRICTED PERIOD”), CONSULTANT WILL
NOT, WITHOUT THE COMPANY’S PRIOR WRITTEN CONSENT, DIRECTLY OR INDIRECTLY,
SOLICIT OR ENCOURAGE ANY EMPLOYEE OR CONTRACTOR OF THE COMPANY OR ITS AFFILIATES
TO TERMINATE EMPLOYMENT WITH, OR CEASE PROVIDING SERVICES TO, THE COMPANY OR ITS
AFFILIATES.  DURING THE RESTRICTED PERIOD, CONSULTANT WILL NOT, WHETHER FOR
CONSULTANT’S OWN ACCOUNT OR FOR THE ACCOUNT OF ANY OTHER PERSON, FIRM,
CORPORATION OR OTHER BUSINESS ORGANIZATION, INTENTIONALLY INTERFERE WITH ANY
PERSON WHO IS OR DURING THE PERIOD OF CONSULTANT’S ENGAGEMENT BY THE COMPANY WAS
A PARTNER, SUPPLIER, CUSTOMER OR CLIENT OF THE COMPANY OR ITS AFFILIATES.

 

10.   ARBITRATION AND EQUITABLE RELIEF.

 

A.    ARBITRATION.  CONSULTANT AGREES THAT ANY AND ALL CONTROVERSIES, CLAIMS OR
DISPUTES WITH ANYONE (INCLUDING THE COMPANY AND ANY EMPLOYEE, OFFICER, DIRECTOR,
SHAREHOLDER OR BENEFIT PLAN OF THE COMPANY, IN ITS CAPACITY AS SUCH OR
OTHERWISE) ARISING OUT OF, RELATING TO OR RESULTING FROM CONSULTANT’S
PERFORMANCE OF THE SERVICES UNDER THIS AGREEMENT OR THE TERMINATION OF THIS
AGREEMENT, INCLUDING ANY BREACH OF THIS AGREEMENT, SHALL BE SUBJECT TO BINDING
ARBITRATION UNDER THE ARBITRATION RULES SET FORTH IN CALIFORNIA CODE OF CIVIL
PROCEDURE SECTION 1280 THROUGH 1294.2, INCLUDING SECTION 1283.05 (THE “RULES”)
AND PURSUANT TO CALIFORNIA LAW.  CONSULTANT AGREES TO ARBITRATE, AND THEREBY
AGREES TO WAIVE ANY RIGHT TO A TRIAL BY JUDGE OR JURY WITH RESPECT TO, ALL
DISPUTES ARISING FROM OR RELATED TO THIS AGREEMENT, INCLUDING BUT NOT LIMITED
TO: ANY STATUTORY CLAIMS UNDER STATE OR FEDERAL LAW, CLAIMS UNDER TITLE VII OF
THE CIVIL RIGHTS ACT OF 1964, THE AMERICANS WITH DISABILITIES ACT OF 1990, THE
AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967, THE OLDER WORKERS BENEFIT
PROTECTION ACT, THE CALIFORNIA FAIR EMPLOYMENT AND HOUSING ACT, THE CALIFORNIA
LABOR CODE, CLAIMS OF HARASSMENT, DISCRIMINATION OR WRONGFUL TERMINATION AND ANY
STATUTORY CLAIMS.  CONSULTANT UNDERSTANDS THAT THIS AGREEMENT TO ARBITRATE ALSO
APPLIES TO ANY DISPUTES THAT THE COMPANY MAY HAVE WITH CONSULTANT.

 

B.    PROCEDURE.   CONSULTANT AGREES THAT ANY ARBITRATION WILL BE ADMINISTERED
BY THE AMERICAN ARBITRATION ASSOCIATION (“AAA”), AND THAT A NEUTRAL ARBITRATOR
WILL BE SELECTED IN A MANNER CONSISTENT WITH ITS NATIONAL RULES FOR THE
RESOLUTION OF EMPLOYMENT DISPUTES.  CONSULTANT AGREES THAT THE ARBITRATOR WILL
HAVE THE POWER TO DECIDE ANY MOTIONS BROUGHT BY ANY PARTY TO THE ARBITRATION,
INCLUDING DISCOVERY MOTIONS, MOTIONS FOR SUMMARY JUDGMENT AND/OR ADJUDICATION
AND MOTIONS TO DISMISS AND DEMURRERS, PRIOR TO ANY ARBITRATION HEARING. 
CONSULTANT AGREES THAT THE ARBITRATOR WILL ISSUE A WRITTEN DECISION ON THE
MERITS.  CONSULTANT ALSO AGREES THAT THE ARBITRATOR WILL HAVE THE POWER TO AWARD
ANY REMEDIES, INCLUDING ATTORNEYS’ FEES AND COSTS, AVAILABLE UNDER APPLICABLE
LAW. 

 

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CONSULTANT UNDERSTANDS THAT THE COMPANY WILL PAY FOR ANY ADMINISTRATIVE OR
HEARING FEES CHARGED BY THE ARBITRATOR OR AAA, EXCEPT THAT CONSULTANT SHALL PAY
THE FIRST $200.00 OF ANY FILING FEES ASSOCIATED WITH ANY ARBITRATION CONSULTANT
INITIATES.  CONSULTANT AGREES THAT THE ARBITRATOR WILL ADMINISTER AND CONDUCT
ANY ARBITRATION IN A MANNER CONSISTENT WITH THE RULES AND THAT, TO THE EXTENT
THAT THE AAA’S NATIONAL RULES FOR THE RESOLUTION OF EMPLOYMENT DISPUTES CONFLICT
WITH THE RULES, THE RULES WILL TAKE PRECEDENCE.

 

C.    REMEDY.  EXCEPT AS PROVIDED BY THE RULES, ARBITRATION WILL BE THE SOLE,
EXCLUSIVE AND FINAL REMEDY FOR ANY DISPUTE BETWEEN THE COMPANY AND CONSULTANT. 
ACCORDINGLY, EXCEPT AS PROVIDED FOR BY THE RULES, NEITHER THE COMPANY NOR
CONSULTANT WILL BE PERMITTED TO PURSUE COURT ACTION REGARDING CLAIMS THAT ARE
SUBJECT TO ARBITRATION.  NOTWITHSTANDING THE FOREGOING, THE ARBITRATOR WILL NOT
HAVE THE AUTHORITY TO DISREGARD OR REFUSE TO ENFORCE ANY LAWFUL COMPANY POLICY,
AND THE ARBITRATOR SHALL NOT ORDER OR REQUIRE THE COMPANY TO ADOPT A POLICY NOT
OTHERWISE REQUIRED BY LAW WHICH THE COMPANY HAS NOT ADOPTED.

 

D.    AVAILABILITY OF INJUNCTIVE RELIEF.  IN ADDITION TO THE RIGHT UNDER THE
RULES TO PETITION THE COURT FOR PROVISIONAL RELIEF, CONSULTANT AGREES THAT ANY
PARTY MAY ALSO PETITION THE COURT FOR INJUNCTIVE RELIEF WHERE EITHER PARTY
ALLEGES OR CLAIMS A VIOLATION OF SECTIONS 2 (CONFIDENTIALITY), 3 (OWNERSHIP) OR
4 (CONFLICTING OBLIGATIONS) OF THIS AGREEMENT OR ANY OTHER AGREEMENT REGARDING
TRADE SECRETS, CONFIDENTIAL INFORMATION, NONSOLICITATION OR LABOR CODE §2870
(INVENTIONS).  IN THE EVENT EITHER THE COMPANY OR CONSULTANT SEEKS INJUNCTIVE
RELIEF, THE PREVAILING PARTY WILL BE ENTITLED TO RECOVER REASONABLE COSTS AND
ATTORNEYS’ FEES.

 

E.     ADMINISTRATIVE RELIEF.  CONSULTANT UNDERSTANDS THAT THIS AGREEMENT DOES
NOT PROHIBIT CONSULTANT FROM PURSUING AN ADMINISTRATIVE CLAIM WITH A LOCAL,
STATE OR FEDERAL ADMINISTRATIVE BODY SUCH AS THE DEPARTMENT OF FAIR EMPLOYMENT
AND HOUSING, THE EQUAL EMPLOYMENT OPPORTUNITY COMMISSION OR THE WORKERS’
COMPENSATION BOARD.  THIS AGREEMENT DOES, HOWEVER, PRECLUDE CONSULTANT FROM
PURSUING COURT ACTION REGARDING ANY SUCH CLAIM.

 

F.     VOLUNTARY NATURE OF AGREEMENT.  CONSULTANT ACKNOWLEDGES AND AGREES THAT
CONSULTANT IS EXECUTING THIS AGREEMENT VOLUNTARILY AND WITHOUT ANY DURESS OR
UNDUE INFLUENCE BY THE COMPANY OR ANYONE ELSE. CONSULTANT FURTHER ACKNOWLEDGES
AND AGREES THAT CONSULTANT HAS CAREFULLY READ THIS AGREEMENT AND HAS ASKED ANY
QUESTIONS NEEDED TO UNDERSTAND THE TERMS, CONSEQUENCES AND BINDING EFFECT OF
THIS AGREEMENT AND FULLY UNDERSTAND IT, INCLUDING THAT CONSULTANT IS WAIVING ITS
RIGHT TO A JURY TRIAL.  FINALLY, CONSULTANT AGREES THAT CONSULTANT HAS BEEN
PROVIDED AN OPPORTUNITY TO SEEK THE ADVICE OF AN ATTORNEY OF ITS CHOICE BEFORE
SIGNING THIS AGREEMENT.

 

11.   MISCELLANEOUS.

 

A.    GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF CALIFORNIA
WITHOUT REGARD TO CALIFORNIA’S CONFLICTS OF LAW RULES.

 

B.    ASSIGNABILITY.  EXCEPT AS OTHERWISE PROVIDED IN THIS AGREEMENT, CONSULTANT
MAY NOT SELL, ASSIGN OR DELEGATE ANY RIGHTS OR OBLIGATIONS UNDER THIS AGREEMENT.

 

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C.    ENTIRE AGREEMENT.  THIS AGREEMENT CONSTITUTES THE ENTIRE AGREEMENT BETWEEN
THE PARTIES WITH RESPECT TO THE SUBJECT MATTER OF THIS AGREEMENT AND SUPERSEDES
ALL PRIOR WRITTEN AND ORAL AGREEMENTS BETWEEN THE PARTIES REGARDING THE SUBJECT
MATTER OF THIS AGREEMENT.

 

D.    HEADINGS.  HEADINGS ARE USED IN THIS AGREEMENT FOR REFERENCE ONLY AND
SHALL NOT BE CONSIDERED WHEN INTERPRETING THIS AGREEMENT.

 

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E.     NOTICES.  ANY NOTICE OR OTHER COMMUNICATION REQUIRED OR PERMITTED BY THIS
AGREEMENT TO BE GIVEN TO A PARTY SHALL BE IN WRITING AND SHALL BE DEEMED GIVEN
IF DELIVERED PERSONALLY OR BY COMMERCIAL MESSENGER OR COURIER SERVICE, OR MAILED
BY U.S. REGISTERED OR CERTIFIED MAIL (RETURN RECEIPT REQUESTED), OR SENT VIA
FACSIMILE (WITH RECEIPT OF CONFIRMATION OF COMPLETE TRANSMISSION) TO THE PARTY
AT THE PARTY’S ADDRESS OR FACSIMILE NUMBER WRITTEN BELOW OR AT SUCH OTHER
ADDRESS OR FACSIMILE NUMBER AS THE PARTY MAY HAVE PREVIOUSLY SPECIFIED BY LIKE
NOTICE.  IF BY MAIL, DELIVERY SHALL BE DEEMED EFFECTIVE THREE BUSINESS DAYS
AFTER MAILING IN ACCORDANCE WITH THIS SECTION 11(E).

 

(1)

IF TO THE COMPANY, TO:

 

 

21211 Nordhoff Street, Chatsworth, CA 91311

 

 

Attention:

 

 

Telephone:

(818) 734-5300

 

 

Facsimile:

(818) 734-5320

 

 

(2)        If to Consultant, to the address for notice on the signature page to
this Agreement or, if no such address is provided, to the last address of
Consultant provided by Consultant to the Company.

 

F.     SEVERABILITY.  IF ANY PROVISION OF THIS AGREEMENT IS FOUND TO BE ILLEGAL
OR UNENFORCEABLE, THE OTHER PROVISIONS SHALL REMAIN EFFECTIVE AND ENFORCEABLE TO
THE GREATEST EXTENT PERMITTED BY LAW.

 

(Remainder of page intentionally left blank.)

 

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IN WITNESS WHEREOF, the parties hereto have executed this Consulting Agreement
as of the date first written above.

 

 

CONSULTANT

 

CAPSTONE TURBINE CORPORATION

 

 

 

 

 

 

By:

  /s/ LEIGH ESTUS

 

By:

  /s/ LARRY COLSON

 

 

 

 

 

Name:

  Leigh Estus

 

Name: Larry Colson, Sr. VP Human Resources

 

 

 

 

Title:

 

 

By:

  /s/ DARREN JAMISON

 

 

 

 

 

Tax ID #:

 

 

Name: Darren Jamison, President & CEO

 

Address for Notice:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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EXHIBIT A

 

Services and Compensation

 

1.     CONTACT.  CONSULTANT’S PRINCIPAL COMPANY CONTACT:

 

Name: Larry Colson

 

                        Title: Sr. Vice President, Human Resources

 

2.     SERVICES.  THE SERVICES SHALL INCLUDE, BUT SHALL NOT BE LIMITED TO, THE
FOLLOWING:

 

Operations consulting services as requested by Larry Colson, or his designee,
not to exceed 8 hours on average per month.

 

3.     Consultant will provide services at the rate of $1,000 per month for
seven months.  Consultant will receive payment for services at the end of each
month beginning December 31, 2008 with the last payment being June 30, 2009.

 

4.     During the consultancy period, consultant will continue to vest in the
stock options and restricted stock units (RSU) previously granted.  All vesting
will end on June 30, 2009 at which time the consultant is responsible for
contacting the company for a closing statement.  Consultant may exercise stock
options throughout the consultancy period or within 90 days from the end of the
consultancy agreement, in accordance with the Plan documentation.  Consultant
will receive RSU’s as applicable during the term of the consultancy period.

 

 

CONSULTANT

 

CAPSTONE TURBINE CORPORATION

 

 

 

 

 

 

By:

 /s/ LEIGH ESTUS

 

By:

  /s/ LARRY COLSON

 

 

 

 

 

Name:

 Leigh Estus

 

Name: Larry Colson, Sr. VP Human Resources

 

 

 

 

 

Title:

 

 

By:

  /s/ Darren Jamison

 

 

 

 

 

 

 

 

Name: Darren Jamison, President & CEO

 

10

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