exv10w16



 



Exhibit
10.16


	 	 	 
	

	 	






David
W. Thompson 

Chairman and Chief Executive Officer




28 July 2006




Mr. Carl A. Marchetto

[Address Redacted]




Dear Carl:



This letter confirms my verbal invitation to you to join Orbital Sciences Corporation as Executive
Vice President and General Manager of our Space Systems Group, and outlines the compensation and
benefits package that 1 propose. As we discussed, in this position you would report directly to me
and be based at the company’s headquarters in Dulles, VA.



Your compensation package would consist of several elements. Your annual salary in 2006 would be
$350,000, paid on a bi-weekly basis. You would be eligible for the first regular salary adjustment
in January 2007. In addition, you would participate in Orbital’s management incentive plan (MIP),
which provides for an annual target bonus equal to 50% of your base salary. MIP bonuses are paid in
cash in February or March of each year, based on individual, operating group and company
performance in the preceding year. Since you would be joining Orbital part of the way through 2006,
your MIP bonus for this year would be prorated at 50%.



As part of a long-term incentive program, you would also be granted 50,000 initial stock units when
you join the company; the first 25,000 units would vest at one year of employment and the second
25,000 units would vest at two years of employment. This grant would be made under Orbital’s 1997
Stock Option and Incentive Plan and would be subject to the terms of our standard Stock Unit
Agreement. In subsequent years, you would be eligible for a target grant of 25,000 stock units when
grants are issued to Orbital employees, with a vesting schedule in accordance with the terms of the
future grant. Upon each vesting date, we will withhold the number of shares equivalent to your tax
withholding obligations. Our Stock Unit Agreement form and a copy of the Stock Option and Incentive
Plan are enclosed.



Orbital will also provide you with a signing incentive in the amount of $200,000, less applicable
withholding taxes, payable no later than 14 days from the date you start work. In the event that
your employment with the company terminates prior to your second anniversary for any reason other
than disability, death or good reason (as defined in your Executive Change of Control Agreement),
then you will be obligated to repay a portion of the bonus as follows:




	 	 	 	 	 
	If you leave during your first year of employment
	 	$	100,000	 
	If you leave during your second year of employment
	 	$	100,000	 





In addition, Orbital will provide reimbursement for reasonable moving and relocation
expenses in accordance with the enclosed Executive Relocation Policy. Please note that certain
relocation expenses are considered to be income by the Internal Revenue Service and, as such,
Orbital is required to withhold Federal income, FICA, and state and local taxes on them. However,
the company will make you “tax neutral” by grossing up the appropriate amounts based on your
Orbital earnings.




      




Orbital Sciences
Corporation • 21839 Atlantic Boulevard, Dulles, Virginia
20166 • 703-406-5000




 









 








	 	 	 
	Mr. Carl A. Marchetto

28 July 2006

	 	





To assist you during the transitionary period before your family moves to the Dulles area,
Orbital  will reimburse you for airfare (coach/economy class) to travel to your home in Victor,
New York on weekends for a period of up to one year.



You will be eligible to participate in all company-sponsored benefit programs. To supplement our
standard composite leave accrual of 15 days per year, you will receive five days of other paid
leave per year, for the first two years of your employment. When you have completed two years of
employment, you will accrue composite leave at the regular rate of 20 days per year and your
other paid leave eligibility wilt end. In addition, you will be eligible for Executive Life
Insurance (two times base salary up to $1,500,000) and Executive Long-Term Disability Insurance
(a non-taxable benefit of up to $20,000 per month) coverage.



You may also take advantage of Orbital’s nonqualified Deferred Compensation Plan. Under this
plan, you have the opportunity to defer the payment of a portion of your annual compensation,
and thereby also defer the income tax applicable to that compensation, and to offset the
government-imposed limitations on qualified retirement plan benefits. Further, you will be
covered by an Executive Change of Control Agreement that would provide for a severance package
of two years of salary and applicable annual bonuses under certain circumstances. A copy of this
agreement is enclosed.



This offer is contingent on the successful completion of a limited background investigation,
which I expect we will conclude by early next week. The company is flexible relating to your
schedule for starting work, but I would hope a date on or about September 1st would
be feasible.



Carl, I am very excited about the prospects of your joining the company and contributing to our
business success. I look forward to working with you to create an even brighter future for
Orbital and its shareholders. If the terms of this offer are acceptable to you, please .sign in
the space below and return this letter to me.



With best regards,






David W. Thompson

Chairman and Chief Executive Officer




	 	 	 
	Enclosures:

	 	Stock Unit Agreement
	 

	 	1997 Stock Option and Incentive Plan
	 

	 	Executive Relocation Agreement
	 

	 	Form Executive Change of Control Agreement






ACCEPTANCE:



I accept this offer of employment and agree to the terms above.




	 	 	 	 	 
	/s/
Carl
A. Marchetto
	 	8-8-2006

	Carl A. Marchetto	 	Date






 









 






ORBITAL SCIENCES CORPORATION

1997 STOCK OPTION AND INCENTIVE PLAN




STOCK UNIT AGREEMENT




     Orbital Sciences Corporation, a Delaware corporation (the “Company”), hereby grants stock
units (“Stock Units”) relating to shares of its common stock, $.01 par value (the “Stock”), to the
individual named below as the Grantee. This grant of stock units is conditioned upon the Grantee’s
acceptance of the terms and conditions set forth in this Stock Unit Agreement (the “Agreement”) and
in the Orbital Sciences Corporation 1997 Stock Option and Incentive Plan (the “Plan”), a copy of
which will be provided on request. The Plan will control in the event any provisions of this
Agreement should appear to be inconsistent with the terms of the Plan.



	 	 	 	 	 	 	 	 	 
	Grant Date:
	 	 	 	 	 	 	 	 
	 	 	 
	 
	 	 	 	 	 	 	 	 
	Name of Grantee:	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Number of Stock Units Covered by Grant:	 	 	 	 
	 

	 	 	 	 	 	 





Vesting Schedule:




	 	 	 
	Vesting
Date	 	Vesting
Percentage
	 
	 	 






			
	Attachment	 	      This is not a stock certificate or a negotiable instrument.





 









 








ORBITAL SCIENCES CORPORATION
1997 STOCK
OPTION AND INCENTIVE PLAN




STOCK UNIT AGREEMENT



The capitalized terms below shall have the meanings assigned to them in the Plan, unless otherwise
defined in this Agreement.




	 	 	 
	Stock Unit 

Transferability

	 	This grant is an award
of Stock Units in the number of
units set forth on the cover
sheet, subject to the vesting
conditions described below.
Your Stock Units may not be
transferred, assigned, pledged
or hypothecated, whether by
operation of law or otherwise,
nor may the Stock Units be made
subject to execution,
attachment or similar
process.
	 
	 	 
	Vesting

	 	Your Stock Unit grant
shall vest according to the
schedule set forth on the cover
sheet; provided, that, you are
an employee or director of the
Company on the relevant vesting
dates. If your employment or
directorship (“Service”) is
terminated other than by reason
of death or Total Disability,
you will forfeit any Stock
Units in which you have not yet
become vested. If you die or
incur a Total Disability prior
to any of the relevant vesting
dates, then your interest in
the Stock Units will become
100% vested upon the date of
such event (the “Accelerated
Vesting Date”).
	 
	 	 
	Delivery of Stock
Pursuant to Stock
Units

	 	The shares of Stock
represented by this Agreement
shall be delivered to you, or
to your eligible beneficiary or
your estate on the vesting
dates set forth on the cover
sheet (the “Vesting Dates”) or
on the Accelerated Vesting
Date, as applicable;provided,
that, if your Service is
terminated other than by reason
of death, Total Disability or
Cause prior to any of the
Vesting Dates, you will instead
be delivered the vested portion
of the shares of Stock
represented by this Agreement.
If the Board determines that
you engaged in conduct that
would constitute Cause, then
you shall forfeit of all of
your Stock Units.
	 
	 	 
	Withholding
Taxes

	 	In the event that the
Company determines that any
federal, state, local or
foreign tax or withholding
payment is required relating to
this grant, the Company shall
cause an immediate forfeiture
of shares of Stock subject to
the Stock Units granted
pursuant to this Agreement in
an amount equal to the
withholding or other taxes
due.
	 
	 	 
	Retention
Rights

	 	This Agreement does not
give you the right to be
retained or employed by the
Company (or any Affiliates) in
any capacity.
	 
	 	 
	Stockholder Rights

	 	You do not have any of
the rights of a stockholder
with respect to the Stock Units
unless and until the Stock
relating to the Stock Units has
been delivered to you. You
will, however, be entitled to
receive, upon the Company’s
payment of a cash dividend on
outstanding Stock, a cash
payment for each Stock Unit
that you hold as of the record
date for such dividend equal to
the per-share dividend paid on
the Stock.
	 
	 	 
	Adjustments

	 	In the event of a stock
split, a stock dividend or a
similar change in the Company
stock, the number of Stock
Units covered by this grant
will be adjusted (and rounded
down to the nearest whole
number) in accordance with the
terms of the Plan.
	 
	 	 
	Applicable Law

	 	This Agreement will be
interpreted and enforced under
the laws of the State of
Delaware, other than any
conflicts or choice of law rule
or principle that might
otherwise refer construction or
interpretation of this
Agreement to the substantive
law of another
jurisdiction.
	 
	 	 
	Consent to Electronic Delivery

	 	The Company may choose
to deliver certain statutory
materials relating to the Plan
in electronic form. By
accepting this grant you agree
that the Company may deliver
the Plan prospectus and the
Company’s annual report to you
in an electronic format. If at
any time you would prefer to
receive paper copies of these
documents, as you are entitled
to receive, the Company would
be pleased to provide copies.
Please contact the Legal
Department to request paper
copies of these documents.
	 
	 	 
	The Plan

	 	The text of the Plan is
incorporated in this Agreement
by reference. This Agreement
and the Plan constitute the
entire understanding between
you and the Company regarding
this grant of Stock Units. Any
prior agreements, commitments
or negotiations concerning this
grant are superseded. The Plan
will control in the event any
provision of this Agreement
should appear to be
inconsistent with the terms of
the Plan.






 









 





ORBITAL SCIENCES CORPORATION

1997 STOCK OPTION AND INCENTIVE PLAN

(as amended through April 27, 2006)




1. PURPOSE OF PLAN




     The purpose of this 1997 Stock Option and Incentive Plan (the “Plan”) is to advance the
interests of Orbital Sciences Corporation and its stockholders by enabling Orbital and
Participating Companies (as defined below) to attract and retain highly talented employees,
directors, consultants and advisers who are in a position to make significant contributions to the
success of Orbital, to reward them for their contributions to the success of Orbital, and to
encourage them, through stock ownership, to increase their proprietary interest in Orbital and
their personal interest in its continued success and progress.



     The Plan provides for the award of Orbital stock options and Orbital common stock. Options
granted pursuant to the Plan may be incentive or nonstatutory stock options. Options granted
pursuant to the Plan shall be presumed to be nonstatutory options unless expressly designated as
incentive options at the time of grant.



2. DEFINITIONS




     For the purposes of this Plan and related documents, the following definitions apply:



     “Award Agreement” means the stock option agreement, restricted stock agreement, stock unit
agreement or other written agreement between Orbital and a Grantee that evidences and sets out the
terms and conditions of a Grant.



     “Board” means the Board of Directors of the Company.



     “Committee” means a committee of, and designated from time to time by resolution of the Board,
which shall consist of no fewer than two members of the Board, none of whom shall be an officer or
other salaried employee of the Company or any affiliate, and each of whom shall qualify in all
respects as a “non-employee director” within the meaning of Rule 16b-3 under the Exchange Act or
any successor rule or regulation. Commencing on the Effective Date, and until such time as the
Board shall determine otherwise, the Committee shall be the Human Resources and Nominating
Committee of the Board.



     “Company” or “Orbital” means Orbital Sciences Corporation, a Delaware corporation, or any
successor thereof.



     “Effective Date” means January 24, 1997.



 









 





     “Exchange Act” means the Securities Exchange Act of 1934, as amended.



     “Fair Market Value” means the closing sale price of Stock on the national securities exchange
on which the Stock is then principally traded or, if that measure of price is not available, on a
composite index of such exchanges or, if that measure of price is not available, in a national
market system for securities on the date of the option grant (or such other date as is specified
herein). In the event that there are no sales of Stock on any such exchange or market on date of
the option grant (or such other date as is specified herein), the fair market value of Stock on the
date of the grant (or such other date as is specified herein) shall be deemed to be the closing
sales price on the next preceding day on which Stock was sold on any such exchange or market. In
the event that the Stock is not listed on any such market or exchange on the applicable date, a
reasonable valuation of the fair market value of the Stock on such date shall be made by the Board.



     “Grant” means an award of an option, Restricted Stock or Stock Units under the Plan.



     “Grantee” means a person who receives or holds an option, Restricted Stock or Stock Units
under the Plan.



     “I.R.C.” means the Internal Revenue Code of 1986, as it may be amended from time to time.



     “Incentive Option” means any option granted under the Plan intended to satisfy the
requirements under I.R.C. Section 422(b) as an incentive stock option.



     “Nonstatutory Option” means any option granted under the Plan that does not qualify as an
Incentive Option.



     “Old Option Plans” shall mean Orbital’s 1990 Stock Option Plan and Orbital’s 1990 Stock Option
Plan for Non-Employee Directors.



     “Option Termination Date” is defined in Section ll(c) below.



     “Outside Director” means a member of the Board who is not an officer or employee of the
Company.



     “Parent” means a parent corporation as defined in I.R.C. Section 424(e).



     “Participating Company” means the Company, any Parent of the Company, and any subsidiary
(as defined in Rule 405 under the Securities Act of 1933, as amended) of the Company or its
Parent.



     “Plan” means this 1997 Stock Option and Incentive Plan.



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     “Restricted Stock” means shares of Stock awarded to a Grantee pursuant to Section 13 hereof.



     “Stock” means shares of the Company’s authorized Common Stock, $.01 par value per share.



     “Stock Unit” means a bookkeeping entry representing the equivalent of shares of Stock, awarded
to a Grantee pursuant to Section 13 hereof.



     “Subsidiary” means a subsidiary corporation as defined in I.R.C. Section 424(f).



     “Terminating Transaction” means any of the following events: (a) the dissolution or
liquidation of the Company; (b) a reorganization, merger or consolidation of the Company with one
or more other persons in which the Company is not the surviving corporation or becomes a subsidiary
of another corporation other than a corporation that was a Participating Company immediately prior
to such event; (c) a sale of substantially all the Company’s assets to a person or entity other
than a corporation that was a Participating Company immediately prior to such event; or (d) a
person (or persons acting as a group or otherwise in concert) owning equity securities of the
Company that represent a majority or more of the aggregate voting power of all outstanding equity
securities of the Company. As used herein or elsewhere in this Plan, the word “person” shall mean
an individual, corporation, partnership, association or other person or entity, or any group of two
or more of the foregoing that have agreed to act together.



     “Total Disability” means a “total and permanent disability” as defined in I.R.C. Section
22(e)(3).



3. ADMINISTRATION OF PLAN




     (a) Administration by Board. The Plan shall be administered by the Board.
The Board shall have authority, not inconsistent with the express provisions of the Plan, to:




     (i) award Grants consisting of options, Restricted Stock and/or Stock Units to
such eligible persons as the Board may select;




     (ii) determine the timing of Grants and the number of shares of Stock subject to
each Grant;




     (iii) determine the terms and conditions of each Grant, including whether an option
is an Incentive Option or a Nonstatutory Option (consistent with the requirements of the
I.R.C.) and the nature and duration of any restriction or condition (or provision for lapse
thereof) relating to the vesting or forfeiture of a Grant;




     (iv) adopt such rules and regulations as the Board may deem necessary or
appropriate to carry out the purposes of the Plan; and



3









 






     (v) interpret the provisions of the Plan and of any Grants made hereunder and
decide any questions and settle all controversies and disputes that may arise in connection
with the Plan.


All decisions, determinations, interpretations or other actions by the Board with respect to the
Plan shall be final, conclusive and binding on all persons, including the Company, Participating
Companies and Grantees and their respective legal representatives, their successors in interest and
permitted assigns and upon all other persons claiming by, through, under or against any of them.




     (b) Administration and Delegation by Committee. The Board, in its sole
discretion, may delegate some or all of its powers with respect to the Plan to a Committee (in
which case references to the Board in this Plan shall be deemed to refer to the Committee, where
appropriate) except for interpreting or making changes to Section 9 or Section ll(b) and except
with respect to any grants to directors of the Company under Sections 8 and 13. The Committee, in
its sole discretion, may delegate to the Chairman, the President and the Chief Executive Officer,
or any of them, while any such officer is a member of the Board, authority to award Grants under
the Plan. Such authority shall be on such terms and conditions, and subject to such limitations, as
the Committee shall specify in its delegation of authority. Except to the extent otherwise
specified by the Committee in such delegation, the delegated authority to grant awards of options,
Restricted Stock and Stock Units shall include the power to:




     (i) award Grants consisting of options, Restricted Stock and/or Stock Units, to such
eligible persons as the authorized officer may select;




     (ii) determine the timing of Grants and the number of shares of Stock subject to each
award; and




     (iii) determine the terms and conditions of each Grant, including whether an option is
an Incentive Option or a Nonstatutory Option (consistent with the requirements of the
I.R.C.) and the nature and duration of any restriction or condition (or provision for lapse
thereof) relating to the vesting or forfeiture of a Grant.


Except to the extent otherwise specified by the Committee in such delegation, the authority so
delegated shall be in addition to, and not in lieu of, the authority of the Committee to make
awards under the Plan.




4. SHARES SUBJECT TO THE PLAN




     (a) Availability. Subject to adjustment as provided in Section 4(c) below,
the maximum aggregate number of shares of Stock available for issuance under the Plan shall be
10,600,000.



4









 





     (b) Reavailability of Options; Stock to be Delivered. If any Stock covered by a
Grant is not purchased or is forfeited, or if a Grant otherwise terminates without delivery of
any
Stock subject thereto, then the number of shares of Stock so terminated or forfeited shall
again be
available for making Grants under the Plan. In the event that Stock that was previously issued
by
the Company is reacquired by the Company as part of the consideration received (in accordance
with Section 12(b) below) upon the subsequent exercise of an option, such reacquired Shares
shall again be available for the granting of options hereunder. Stock delivered under the Plan
shall be authorized but unissued shares or, at the Board ‘s discretion, previously issued
Stock
acquired by the Company and held in its treasury. No fractional shares of Stock shall be

delivered under the Plan.



     (c) Changes in Stock. In the event of a stock dividend, stock split or combination of
shares, exchange of shares, distribution payable in capital stock, recapitalization or other
change
in Orbital’s capital stock, the number and kind of shares of Stock subject to Grants then
outstanding or subsequently awarded under the Plan, the exercise price of any outstanding
option, the maximum number of shares of Stock that may be delivered under the Plan, and other
relevant provisions shall be appropriately adjusted by the Board, so that the proportionate
interest
of the Grantee immediately following such event shall, to the extent practicable, be the same
as
immediately before such event.



5. EFFECTIVE DATE.




     The Plan shall be effective as of the Effective Date, subject to approval of the Plan within
one year of the Effective Date by Orbital’s shareholders. Upon approval of the Plan by the
stockholders of Orbital as set forth above, all Grants made under the Plan on or after the
Effective Date shall be fully effective as if Orbital’s stockholders had approved the Plan on the
Effective Date. If the stockholders fail to approve the Plan within one year of the Effective Date,
any Grants made hereunder shall be null and void and of no effect.



6. AWARD AGREEMENT




     Each Grant pursuant to the Plan shall be evidenced by an Award Agreement, to be executed by
Orbital and by the Grantee, in such form or forms as the Board shall from time to time approve.
Each Award Agreement evidencing a Grant of options shall specify whether such options are intended
to be Nonstatutory Options or Incentive Options.



7. OPTION EXERCISE PRICE




     The option exercise price for shares of Stock to be issued under the Plan shall be the Fair
Market Value of the Stock on the Grant date (or 110% of the Fair Market Value in the case of an
Incentive Option granted to a ten-percent shareholder).



5









 




8. DISCRETIONARY OPTION GRANTS. Grants may be made under the Plan to any
employee or director of any Participating Company as the Board shall determine and designate
from time to time. Grants of options may be made under the Plan to any consultant or adviser to
any Participating Company whose participation in the Plan is determined by the Board to be in
the best interests of the Company and is so designated by the Board. Notwithstanding the
foregoing, grants to persons who are not employees of the Company or any Parent or Subsidiary
of the Company shall not be Incentive Options.




9. OUTSIDE DIRECTOR OPTION GRANTS




(a) [Reserved.]




     (b) Grants in Lieu of Annual Fee. Each Outside Director shall be entitled to receive a
Nonstatutory Option to purchase a specified number of shares of Stock in lieu of his or her
annual Board retainer fee. Such specified number (i) shall be calculated by the Chief
Financial
Officer of the Company, using a Black-Scholes (or other generally accepted) valuation method
based on the Fair Market Value of the Stock on January 15 of the applicable year (or the next
business day, if January 15 falls on a weekend), assuming a ten-year option term and (ii)
shall be
adjusted upward by 10% to take into account the one-year vesting term. The exercise price of
such option shall be equal to the Fair Market Value of Shares on January 15 (or the next
business
day, if January 15 falls on a weekend), which shall also be the Grant date. Any Outside
Director
desiring to receive an option in lieu of cash shall notify the Company of this election, which
shall
be irrevocable, by submitting a written notice to the Corporate Secretary in accordance to
procedures as determined by the Board.



10. LIMITATIONS ON GRANTS




     (a) Limitation on Shares of Stock Subject to Grants. The maximum number of shares
of Stock subject to Options that can be awarded under the Plan to any person eligible for a
Grant
under Section 8 hereof is 1,200,000 shares of Stock during the first ten (10) calendar years
of the
Plan, and 100,000 per year thereafter. The “per individual” limitations described in this
paragraph shall be construed and applied consistent with the rules and regulations under
I.R.C.
Section 162(m).



     (b) Limitations on Incentive Options. Incentive Options may only be granted to
employees of the Company or any Parent or Subsidiary of the Company.



6









 





11. VESTING AND TERMINATION OF OPTIONS




     (a) Vesting of Discretionary Options. Subject to the other provisions of this Section
11, Options granted pursuant to Section 8 shall vest and become exercisable at such time and
in
such installments as the Board shall provide in each individual Award Agreement.
Notwithstanding the foregoing, the Board may, in its sole discretion, accelerate the time at
which
all or any part of an option may be exercised.



     (b) Vesting of Outside Director Options. Subject to the other provisions of this
Section 11, options granted under Section 9 shall become exercisable as to 100% of the Stock
covered thereby on the first anniversary of the Grant date.



     (c) Termination of Options. All options shall expire and terminate on such date as
the Board shall determine (“Option Termination Date”), which in no event shall be later than
ten
(10) years from the date such option was granted. In the case of an Incentive Option granted
to a
ten-percent stockholder, the option shall not be exercisable after the expiration of five (5)
years
from the date such option was granted. Upon termination of an option or portion thereof, the
Grantee shall have no further right to purchase Stock pursuant to such option.



     (d) Termination of Employment or Service.



               (i) Termination of Employment or Directorship. Upon the
termination of the employment or directorship of a Grantee with a Participating Company for any
reason other than for “cause” (pursuant to Section 14 below) or by reason of death or Total
Disability, all options that are not exercisable shall terminate on the employment/directorship
termination date. Options that are exercisable on the employment/directorship termination date
shall continue to be exercisable for (A) six (6) months following the employment/directorship
termination date (in the case of Nonstatutory Options), (B) three (3) months following the
employment termination date (in the case of Incentive Options), or (C) the Option Termination Date,
whichever occurs first. A Grantee who is an employee or director of a Participating Company shall
be deemed to have incurred a termination for purposes of this Section 11 (d)(i) if such
Participating Company ceases to be a Participating Company, unless such Grantee is an employee,
director, consultant or adviser of any other Participating Company.



               (ii) Service Termination. In the case of an optionee who is
not an
employee or director of any Participating Company, provisions relating to the exercisability of
options following termination of service shall be specified in the award. If not so specified, all
options held by such optionee that are not then exercisable shall terminate upon termination of
service for any reason. Unless such termination was for “cause” (pursuant to Section 14 below),
options that are exercisable on the date the optionee’s service as a consultant or adviser
terminates shall continue to be exercisable for a period of six (6) months following the service
termination date (as defined in a consulting or similar agreement or as determined by the Board) or
the Option Termination Date, whichever occurs first.




7









 





     (e) Rights in the Event of Death. In the event that the employment and/or
directorship of an optionee with a Participating Company is terminated by reason of death, all
options that are not exercisable shall terminate on the date of death. Options that were
exercisable on the date prior to the optionee’s death may be exercised by the optionee’s
executor
or administrator or by the person or persons to whom the option is transferred by will or the
applicable laws of descent and distribution, at any time within the one-year period (or such
longer period as the Board may determine prior to the expiration of such one-year period)
beginning with the date of the optionee’s death, but in no event beyond the Option Termination
Date.



     (f) Rights in the Event of Total Disability. In the event that the employment and/or
directorship of an optionee with a Participating Company is terminated by reason of Total
Disability, all options that are not exercisable shall terminate on the
employment/directorship
termination date. Options that were exercisable on the employment/directorship termination
date
may be exercised at any time within the one-year period (or such longer period as the Board
may
determine prior to the expiration of such one-year period) beginning with the commencement of
the optionee’s Total Disability (as determined by the Board) but in no event beyond the Option
Termination Date.



     (g) Leave of Absence. An approved leave of absence shall not constitute a
termination of employment under the Plan. An approved leave of absence shall mean an absence
approved pursuant to the policy of a Participating Company for military leave, sick leave, or
other bona fide leave, not to exceed ninety (90) days or, if longer, as long as the employee’s
right
to re-employment is guaranteed by contract, statute or the policy of a Participating Company.
Notwithstanding the foregoing, in no event shall an approved leave of absence extend an option
beyond the Option Termination Date.



12.
EXERCISE OF OPTIONS; NON-TRANSFERABILITY




     (a) Exercise of Options. Vested options may be exercised, in whole or in part, by
giving written notice of exercise to the Company, which notice shall specify the number of
shares
of Stock to be purchased and shall be accompanied by payment in full of the purchase price in
accordance with Section 12(b) below and the full amount of any federal and state withholding
and other employment taxes applicable to such person as a result of such exercise. No shares
of
Stock shall be issued until full payment of the purchase price and applicable withholding tax
has
been made. Until the issuance of stock certificates, no right to vote or receive dividends or
any
other rights as a stockholder shall exist with respect to optioned shares notwithstanding the
exercise of the option.



     (b) Payment. Full payment of the purchase price for the Stock as to which an option
is being exercised shall be made (i) in United States dollars in cash or by check in a form
satisfactory to the Company, (ii) at the Grantee’s election, and subject to discretion of the
Board,
through delivery of Shares having a Fair Market Value on the day immediately preceding the day
notice of exercise is received by the Company equal to the cash exercise price of the option,
(iii)



8









 




in accordance with a so-called cashless exercise plan established with a securities brokerage firm,
or (iv) by any combination of the permissible forms of payment.




     (c) Non-Transferability of Options. Except as the Board may otherwise determine,
no option may be transferred other than by will or by the laws of descent and distribution, and
during an optionee’s lifetime an option may be exercised only by the Grantee.



13. RESTRICTED STOCK AND STOCK UNITS




     (a) Grant of Restricted Stock or Stock Units. The Board may from time to time grant
Restricted Stock or Stock Units to certain employees and directors of a Participating Company,
subject to such restrictions, conditions and other terms, if any, as the Board may determine.



     (b) Restrictions. At the time a Grant of Restricted Stock or Stock Units is made, the
Board may establish a period of time (the “Restricted Period”) during which a Grantee’s right
to
all or a portion of such Restricted Stock or Stock Units shall vest over time, subject to
certain
terms and conditions. Each Grant of Restricted Stock or Stock Units may be subject to a
different Restricted Period. The Board may, in its sole discretion, at the time a Grant of
Restricted Stock or Stock Units is made, prescribe forfeiture or vesting conditions in
addition to
or other than the expiration of the Restricted Period. The Board also may, in its sole
discretion,
shorten or terminate the Restricted Period or waive any other restrictions applicable to all
or a
portion of the Restricted Stock or Stock Units. Restricted Stock and Stock Units may not be
sold, transferred, assigned, pledged or otherwise encumbered or disposed of during the
Restricted
Period or prior to the satisfaction of any other restrictions prescribed by the Board with
respect to
such Restricted Stock or Stock Units.



     (c) Restricted Stock Certificates. Orbital shall issue, in the name of each Grantee to
whom Restricted Stock has been granted, stock certificates representing the total number of
shares of Restricted Stock granted to the Grantee. The Secretary of Orbital shall hold such
certificates for the Grantee’s benefit until such time as the restrictions lapse or the
Restricted
Stock is forfeited to Orbital.



     (d) Rights of Holders of Restricted Stock. Unless the Board otherwise provides in an
Award Agreement, holders of Restricted Stock shall have the right to vote such Stock and the
right to receive any dividends declared or paid with respect to such Stock. The Board may
provide that any dividends paid on Restricted Stock must be reinvested in Stock, which may or
may not be subject to the same vesting conditions and restrictions applicable to such
Restricted
Stock. All distributions, if any, received by a Grantee with respect to Restricted Stock as a
result
of any stock split, stock dividend, combination of shares, or other similar transaction shall
be
subject to the restrictions applicable to the original Grant.



     (e) Rights of Holders of Stock Units. Unless the Board otherwise provides in an
Award Agreement, holders of Stock Units shall have no rights as stockholders of the Company.
The Board may provide in an Award Agreement evidencing a grant of Stock Units that the holder



9









 




of such Stock Units shall be entitled to receive, upon the Company’s payment of a cash dividend on
its outstanding Stock, a cash payment for each Stock Unit held equal to the per-share dividend paid
on the Stock. Such Award Agreement may also provide that such cash payment will be deemed
reinvested in additional Stock Units at a price per unit equal to the Fair Market Value of a share
of Stock on the date that such dividend is paid. A holder of Stock Units shall have no rights other
than those of a general creditor of the Company. Stock Units represent an unfunded and unsecured
obligation of the Company, subject to the terms and conditions of the applicable Award Agreement.




     (f) Termination of Employment. Upon termination of the employment/directorship
of a Grantee with Orbital, other than by reason of death or Total Disability, any Restricted
Stock
or Stock Units held by such Grantee that has not vested, or with respect to which all
applicable
restrictions and conditions have not lapsed, shall immediately be deemed forfeited, unless the
Board, in its discretion, determines otherwise. Upon forfeiture of Restricted Stock or Stock
Units, the Grantee shall have no further rights with respect to such Grant, including but not
limited to any right to vote Restricted Stock or any right to receive dividends with respect
to
shares of Restricted Stock or Stock Units.



     (g) Rights in the Event of Total Disability or Death. The rights of a Grantee with
respect to Restricted Stock or Stock Units in the event such Grantee terminates
employment/directorship with Orbital by reason of Total Disability or death shall be
determined
by the Board at the time of Grant.



     (h) Delivery of Stock and Payment Therefor. Upon the expiration or termination
of the Restricted Period and the satisfaction of any other conditions prescribed by the Board, the
restrictions applicable to shares of Restricted Stock or Stock Units settled in Stock shall lapse,
and, unless otherwise provided in the Award Agreement, a stock certificate for such shares shall be
delivered, free of all such restrictions, to the Grantee or the Grantee’s beneficiary or estate, as
the case may be.



14. FORFEITURE CONDITIONS.




     The Board may provide in an Award Agreement for conditions of forfeiture for “cause” of any
Grantee’s rights with respect to a Grant. “Cause” shall include engaging in an activity that is
detrimental to the Company including, without limitation, criminal activity, failure to carry out
the duties assigned to the Grantee as a result of incompetence or willful neglect, conduct casting
such discredit on the Company as in the opinion of the Board justifies termination or forfeiture of
the Grant, or such other reasons, including the existence of a conflict of interest, as the Board
may determine. “Cause” is not limited to events that have occurred prior to the Grantee’s
termination of service, nor is it necessary that the Board’s finding of “cause” occur prior to such
termination. If the Board determines, subsequent to a Grantee’s termination of service but prior to
the exercise of any rights under a Grant, that either prior or subsequent to the Grantee’s
termination the Grantee engaged in conduct that would constitute “cause,” then the rights with
respect to a Grant shall be forfeited.



10









 





15. COMPLIANCE WITH SECURITIES LAWS.




     (a) The delivery of Stock upon the exercise of an option or lapse of a Restricted
Period shall be subject to compliance with (i) applicable federal and state laws and
regulations,
(ii) all applicable listing requirements of any national securities exchange or national
market
system on which the Stock is then listed or quoted, and (iii) Company counsel’s approval of
all
other legal matters in connection with the issuance and delivery of such Stock. If the sale of
Stock has not been registered under the Securities Act of 1933, as amended, the Company may
require, as a condition to exercise of the option or receipt of Restricted Stock or Stock
Units,
such representations or agreements as counsel for the Company may consider appropriate to
avoid violation of such Act and may require that the certificates evidencing such Stock bear
an
appropriate legend restricting transfer.



     (b) It is the intent of the Company that Grants pursuant to the Plan and the exercise of
options granted hereunder will qualify for the exemption provided by Rule 16b-3 under the
Exchange Act. To the extent that any provision of the Plan or action by the Board does not
comply with the requirements of Rule 16b-3 in respect of an employee or director subject to
Section 16(b) of the Exchange Act, it shall be deemed inoperative to the extent permitted by
law
and deemed advisable by the Board, and shall not affect the validity of the Plan. In the event
that
Rule 16b-3 is revised or replaced, the Board may exercise its discretion to modify this Plan
in
any respect necessary to satisfy the requirements of, or take advantage of any features of the
revised exemption or its replacement.



16. MERGERS, etc.




     (a) Effect on Options and Plan. Except as otherwise provided herein, all options
outstanding under the Plan shall accelerate and become immediately exercisable for a period of
fifteen days (or such longer or shorter period as the Board may prescribe) immediately prior to the
scheduled consummation of a Terminating Transaction, which exercise shall be (i) conditioned upon
the consummation of the Terminating Transaction and (ii) effective only immediately before the
consummation of such Terminating Transaction. Upon consummation of any such event, the Plan and
all outstanding but unexercised options shall terminate. Notwithstanding the foregoing, to the
extent provision is made in writing in connection with such Terminating Transaction, for the
continuation of the Plan and the assumption of options, Restricted Stock or Stock Units under the
Plan theretofore granted, or for the substitution for such options, Restricted Stock or Stock Units
of new common stock options, new common stock units and new restricted stock covering the stock of
a successor company, or a parent or subsidiary thereof, with appropriate adjustments as to the
number and kinds of shares or units and exercise prices, then the Plan and options theretofore
granted shall continue in the manner and under the terms so provided, and the acceleration and
termination provisions set forth in the first two sentences of this Section 16(a) shall be of no
effect. The Company shall send written notice of a Terminating Transaction to all individuals who
hold options not later than the time at which the Company gives notice thereof to its stockholders.



11









 






     b. Effect on Restricted Stock and Stock Units. All outstanding shares of
Restricted Stock and all Stock Units, and the delivery of the shares of Stock subject to the Stock
Units, shall be deemed to have vested, and all restrictions and conditions applicable to such
shares of Restricted Stock and Stock Units shall be deemed to have lapsed immediately prior to the
occurrence of a Terminating Transaction.



17. TAXES




     The Board shall make such provisions and take such steps as it deems necessary or appropriate
for the withholding of any federal, state, local and other tax required by law to be withheld with
respect to the grant or exercise of options, or the vesting of or other lapse of restrictions
applicable to Restricted Stock or Stock Units, or with respect to the disposition of Stock acquired
pursuant to the Plan, including, but without limitation, the deduction of the amount of any such
withholding tax from any compensation or other amounts payable to a Grantee, or requiring a Grantee
(or the optionee’s beneficiary or legal representative), as a condition of a Grant or exercise of
an option or receipt of Restricted Stock or Stock Units, to pay to the appropriate Participating
Company any amount required to be withheld, or to execute such other documents as the Board deems
necessary or desirable in connection with the satisfaction of any applicable withholding
obligation.



18. EMPLOYMENT RIGHTS




     Neither the adoption of the Plan nor the making of any Grants shall confer upon any Grantee
any right to continue as an employee or director of, or consultant or adviser to, any Participating
Company or affect in any way the right of any Participating Company to terminate them at any time.
Except as specifically provided by the Board in any particular case, the loss of existing or
potential profit in Grants under this Plan shall not constitute an element of damages in the event
of termination of the relationship of a Grantee even if the termination is in violation of an
obligation of the Company to the Grantee by contract or otherwise.



19. AMENDMENT OR TERMINATION OF PLAN




     (a) Neither adoption of the Plan nor the making of any Grants shall affect the
Company’s right to make awards to any person that is not subject to the Plan, to issue to
such
persons Stock as a bonus or otherwise, or to adopt other plans or arrangements under
which
Stock may be issued.



     (b) The Board may at any time discontinue granting awards under the Plan. With the
consent of the Grantee, the Board may at any time cancel an existing Grant in whole or in part
and make any other Grant for such number of shares as the Board specifies. The Board may at
any time, prospectively or retroactively, amend the Plan or any outstanding Grant for the
purpose
of satisfying the requirements of I.R.C. Section 422 or of any changes in applicable laws or



12









 




regulations or for any other purpose that may at the time be permitted by law, or may at any time
terminate the Plan as to further grants of awards, but no such amendment shall materially adversely
affect the rights of any Grantee (without the Grantee’s consent) under any outstanding Grant.




     (c) In the Board’s discretion, the Board may, with an optionee’s consent, substitute
Nonstatutory Options for outstanding Incentive Options, and any such substitution shall not
constitute a new option grant for the purposes of the Plan, and shall not require a revaluation of
the option exercise price for the substituted option. Any such substitution may be implemented by
an amendment to the applicable option agreement or in such other manner as the Board in its
discretion may determine.



20. GENERAL PROVISIONS




     (a) Titles and Headings. Titles and headings of sections of the Plan are for
convenience of reference only and shall not affect the construction of any provision of the
Plan.



     (b) Governing Law. The Plan shall be governed by, interpreted under and construed
and enforced in accordance with the internal laws, and not the laws pertaining to conflicts or
choice of laws, of the State of Delaware, applicable to agreements made and to be performed
wholly within the State of Delaware.



     (c) Severability. If any provision of the Plan or any Award Agreement shall be
determined to be illegal or unenforceable by any court of law in any jurisdiction, the
remaining
provisions hereof and thereof shall be severable and enforceable in accordance with their
terms,
and all provisions shall remain enforceable in any other jurisdiction.



*       *       *




          The Plan was duly adopted by the Board of Directors of the Company as of January
24, 1997.




	 	 	 	 	 
	 

	 	   /s/ Leslie C. Seeman
 

Leslie C. Seeman
	 	 
	 

	 	Senior Vice President, General Counsel and Secretary of
the Company	 	 






13









 






     The Plan was duly approved by the stockholders of the Company on April 24, 1997.



	 	 	 	 	 
	 

	 	   /s/ Leslie C. Seeman
 

Leslie C. Seeman
	 	 
	 

	 	Senior Vice President, General Counsel and Secretary of
the Company	 	 






14









 






EXECUTIVE RELOCATION POLICY

For Carl Marchetto




Transportation





	 	(1)	 	Employee and immediate family will receive reimbursement for one-way airfare or
ground transportation (car mileage and actual lodging up to the applicable per diem
rates) from current residence to applicable Orbital facility.
	 
	 	(2)	 	Ground transportation should be accomplished in appropriate number of days relating
to
distance.





House Hunting/Pre-Move





	 	(1)	 	Reasonable house hunting trip(s) with spouse is allowed.
	 
	 	(2)	 	Airfare, lodging, rental car and meals during house-hunting trip(s) will be reimbursed.
	 
	 	(3)	 	House hunting trip will not exceed five consecutive days without prior approval.
	 
	 	(4)	 	Up to one-year lease in a furnished or unfurnished residence.
	 
	 	(5)	 	Rental car expenses will be provided until personal car is delivered.





Move of Personal Effects and Household Goods





	 	(1)	 	Transport of household goods and personal effects for employee and immediate family
residing with employee.
	 
	 	(2)	 	Will transport maximum of two operational cars. Car value must be greater than
moving expense.
	 
	 	(3)	 	Thirty (30) days storage of household goods only (does not include vehicle storage).
If
the conditions necessitate, Orbital may extend the period of time for storage as long as it
is reasonable.
	 
	 	(4)	 	Will reimburse for de-servicing and servicing of household appliances.
	 
	 	(5)	 	Move of household goods includes complete packing, but no unpacking, except for
bedding.
	 
	 	(6)	 	Will pay for move of household pets (cats and dogs only), but no kennel
services
provided.




 









 











The following types of items will not be moved by Orbital’s vendors:




Sand, bricks, building materials

Alcohol

Firewood

Private airplanes

Inoperable automobiles

Boats, snowmobiles, mobile homes

Heavy equipment

Perishable items such as frozen foods, greenhouse plants and houseplants

Yard plantings such as trees, shrubs and plants

Excessive amount of tools (to be determined by moving company representative)

Livestock




Residence Disposition/Purchase Closing Costs




(1) Reimbursable closing costs on sale of residence





	 	a.	 	Reimbursable closing costs include, but are not limited to, the following:






	 	•	 	Brokerage fees
	 
	 	•	 	Legal fees
	 
	 	•	 	Appraisal fees
	 
	 	•	 	Points
	 
	 	•	 	Finance charges
	 
	 	•	 	Title insurance






	 	b.	 	The following costs are not reimbursable:






	 	•	 	Mortgage payments on residence being sold
	 
	 	•	 	Homeowners fees or other pro-rated costs not directly associated with moving
	 
	 	•	 	Income and FICA taxes incident to reimbursed relocation costs






	(2)	 	Closing costs on purchase of a residence will not be reimbursed unless the relocating
employee is a homeowner at the time of relocation.
	 
	(3)	 	Home buying costs customarily paid by the buyer will be reimbursed on the purchase of the
new residence.






	 	a.	 	These costs include, but are not limited to, the following:






	 	•	 	Loan origination fee
	 
	 	•	 	Loan discount fee (points)
	 
	 	•	 	Credit report
	 
	 	•	 	Title insurance
	 
	 	•	 	Radon inspection
	 
	 	•	 	Home inspection




 









 












	 	•	 	Appraisal fee
	 
	 	•	 	Survey






	 	b.	 	Orbital will not reimburse the following costs:






	 	•	 	Financial loss on sale of house
	 
	 	•	 	Broker’s fees and commissions
	 
	 	•	 	Cost of litigation
	 
	 	•	 	Real and personal property insurance against damage or loss of property
	 
	 	•	 	Mortgage insurance
	 
	 	•	 	Property taxes and operating or maintenance costs
	 
	 	•	 	Pest inspection (in Virginia)
	 
	 	•	 	Income and FICA taxes incident to reimbursed relocation costs
	 
	 	•	 	Payments for job counseling and placement assistance to employee’s
spouse and
dependents
	 
	 	•	 	Costs incident to furnishing equity or non equity loans to employees or making
arrangements with lenders for employees to obtain lower-than-market rate mortgage
loans
	 
	 	•	 	Mortgage payments on residence being purchased and Homeowners fees
	 
	 	•	 	Owner’s title policy insurance when not previously carried






	(4)	 	Documentation is required on all closing costs; some costs are not reimbursable.
	 
	(5)	 	Documentation for all closing costs must be submitted within eighteen (18) months of
employee’s start date, but after submission of all other relocation expenses. Exceptions to
this timeframe require approval of the Chairman and Chief Executive Officer.





Tax Liability



Certain relocation expenses are considered to be income by the Internal Revenue Service, and as
such, Orbital is required to withhold Federal include, FICA, and state and local taxes. Orbital
will gross up the appropriate amounts to make the Executive “tax neutral” provided that a third
party relocation service’s Buyer Option Value program is utilized for the sale of current
residence. Orbital is responsible for selecting the third party relocation vendor.




Repayment



All relocation expenses require you to be employed 12 months following the date of final
reimbursement of relocation costs or the reimbursements must be repaid.



Waiver to Policy



This relocation policy is not all inclusive. Under some circumstances, and at the discretion of the
Chairman and Chief Executive Officer, other relocation costs maybe approved.



Note: Receipts must be submitted for all reimbursable expenses




 









 









EXECUTIVE CHANGE OF CONTROL AGREEMENT




                                                             , 200_




Mr./Ms.                                                            


Orbital Sciences Corporation

21839 Atlantic Boulevard

Dulles, Virginia 20166




Dear                                                             :




     Orbital Sciences Corporation and its subsidiaries (together, the “Company”) consider the
maintenance of a sound and vital management to be essential to protecting and enhancing the best
interests of the Company and its stockholders. In this connection, the Company recognizes that the
possibility of a change in control may exist and that such possibility, and the uncertainty and
questions which it may raise among management, may result in the departure or distraction of
management personnel to the detriment of the Company and its stockholders. Accordingly, the
Company’s Board of Directors (the “Board”) has determined that appropriate steps should be taken to
reinforce and encourage the continued attention and dedication of members of the Company’s
management, including yourself, to their assigned duties without distraction in the face of the
potentially disturbing circumstances arising from the possibility of a change in control of the
Company.



     This letter agreement (the “Agreement”) sets forth the severance benefits that the Company
agrees will be provided to you in the event your employment with the Company terminates following
a “Change in Control” (as defined in Section 2 hereof) under the circumstances described below.
This Agreement is not an employment contract nor does it alter your status as an at-will employee
of the Company. No benefit shall be payable under this Agreement except on termination of your
employment with the Company as a result of a Change in Control (as defined below).



     1. Term. This Agreement commences as of October 21, 1998, and shall remain in effect
so long as you are employed as an executive officer of the Company, provided, however, that in the
event of a Change in Control, this Agreement shall remain in full force and effect for a 24-month
period commencing on the date of the Change in Control regardless of whether you remain an
executive officer of the Company during such 24-month period.



 









 






Mr./Ms.                                        

Orbital Sciences Corporation

                                        , 200_

Page 2




     2. Change in Control. For purposes of this Agreement, a Change in Control
shall mean:




     (a) the acquisition by any individual, entity or group (within the
meaning of
Section 13(d) or 14(d) of the Securities Exchange Act of 1934 (the
“Exchange Act”)) (a “Person”) of beneficial ownership (within the
meaning of Rule 13d-3 of the Exchange Act) of 30% or more of either (i)
the then outstanding shares of common stock of the Company or (ii) the
combined voting power of the then outstanding voting securities of the
Company entitled to vote generally in the election of directors;




     (b) within any 24-month period, the persons who were directors of
the
Company immediately prior thereto (the “Incumbent Board”) shall cease
to constitute a majority of the Board of Directors of the Company or of its
successor by merger, consolidation or sale of assets. For this purpose, the
Incumbent Board includes any new director whose (i) election to the
Board resulted from a vacancy caused by the retirement, death or disability
of a director and was approved by a vote of at least two-thirds of the
directors then still in office who were directors at the beginning of the
period, or (ii) nomination to the Board was approved by a committee of
the Board whose majority consisted of directors who were directors in
office at the beginning of the period; or




     (c) the consummation by the Company of a
reorganization, merger,
consolidation or sale or disposition of all or substantially all the assets
of
the Company (other than any such transaction initiated by the action of the
Board) (a “Business Combination”), the result of which is that (i) the
stockholders of the Company at the time of the execution of the agreement
to effect the Business Combination own less than 60% of the total equity
of the surviving or resulting entity entitled to vote generally in the
election
of directors, (ii) a Person (excluding any corporation resulting from the
Business Combination) becomes the beneficial owner of 20% or more of
the then outstanding shares of common stock of the corporation resulting
from such Business Combination or (iii) at least a majority of the members
of the board of directors of the corporation resulting from such Business
Combination were not members of the Board of Directors of the Company
at the time of execution of the initial agreement or other action of the
Board that provided for such Business Combination.



 









 






Mr./Ms.                                        

Orbital Sciences Corporation

                                        , 200_

Page 3




     Notwithstanding the above, a Change in Control shall not be deemed to occur as a result of a
transaction where either you, individually or as an officer, director or 5% stockholder or partner
of any entity, or any employee benefit plan (or related trust) of the Company (a) becomes the
beneficial owner of securities representing 30% or more of the combined voting power of the Company
‘s then outstanding securities, or (b) enters into an agreement with the Company providing for the
merger, consolidation, or sale or transfer of all or substantially all the assets of the Company.
In addition, a Change in Control shall not be deemed to occur where you enter into an employment
agreement with the Company, any Person whose acquisition of the Company’s securities resulted in
the Change in Control or any entity resulting from a Business Combination.



     3. Termination Following Change in Control. If a Change in Control as described in
Section 2 occurs, you shall be entitled to the benefits provided in Section 4 of this Agreement if
your employment is terminated by the Company for Disability or Cause, as described below, or by
you for Good Reason, as described below.



          (i) Disability. If, as a result of your incapacity due to physical or mental illness,
you shall have been absent from your duties with the Company on a full-time basis for nine
consecutive months, and within 30 days after written notice of termination is given you shall not
have returned to the full-time performance of your duties, the Company may terminate your
employment for “Disability.”




          (ii) Cause. Termination by the Company of your employment for “Cause” shall mean
termination on (A) the willful and continued failure by you substantially to perform your duties
with the Company in accordance with the instructions of the Board or the executive officers to
whom you report (other than any such failure resulting from your incapacity due to physical or
mental illness), after a demand for substantial performance is delivered to you by the Board which
specifically identifies the manner in which the Board believes that you have not substantially
performed your duties, or (B) the willful engaging by you in conduct which is demonstrably and
materially injurious to the Company, monetarily or otherwise. For purposes of this Subsection, no
act, or failure to act, on your part shall be considered “willful” unless done, or omitted to be
done, by you not in good faith and without reasonable belief that your action or omission was in
the best interest of the Company. Notwithstanding the foregoing, you shall not be deemed to have
been terminated for Cause unless and until there shall have been delivered to you a copy of a
resolution duly adopted by the affirmative vote of not less than two-thirds of the entire
membership of the Board at a meeting of the Board called and held for the purpose (after
reasonable notice to you and an opportunity for you, together with your counsel, to be heard




 









 










Mr./Ms.                                        

Orbital Sciences Corporation

                                        , 200_

Page 4



before the Board), finding that in the good faith opinion of the Board you were guilty of conduct
set forth above in clause (A) or (B) of the first sentence of this Subsection and specifying the
particulars thereof in detail.




          (iii) Good Reason. You shall be entitled to terminate your employment for Good Reason
in connection with a Change in Control. For purposes of this Agreement, “Good Reason” shall mean:





     (A) without your written consent, the assignment to you of any position
(including status, offices, titles and reporting requirements), authorities, duties and
responsibilities, that are not at least commensurate in all material respects with the
most
significant of those held, exercised and assigned by you at any time during the 180-day
period immediately preceding a Change in Control, or any other action by the Company
that results in a diminution in such position, authority, duties or responsibilities,
excluding for this purpose an isolated, insubstantial and inadvertent action not taken
in
bad faith and that is remedied by the Company promptly after receipt of notice thereof
given by you;




     (B) a reduction by the Company in your annual base salary (“Annual Base
Salary”), which for the purposes of this Agreement shall mean an amount at least equal
to
12 times the highest monthly base salary paid or payable, including any base salary
that
has been earned but deferred, to you by the Company in respect of the 12-month period
immediately preceding the month in which the Change of Control occurs;




     (C) the Company’s requiring you to be based anywhere other than the office of
the Company in which you are based prior to the Change in Control or any office or
location within a 50 mile radius of such office, except for required travel on the
Company’s business to an extent substantially consistent with your present business
travel
obligations;




     (D) the failure by the Company to continue in effect any compensation plan in
which you participate, or to provide you with plans substantially similar, including
but
not limited to any stock purchase plan, stock option plan, incentive compensation,
bonus,
and other plan in which you were participating at the time of the Change in Control, or
the failure by the Company to continue your participation therein;




     (E) the failure by the Company to continue to provide you with benefits
substantially similar to those enjoyed by you under any of the Company’s retirement,



 









 







Mr./Ms.                                        

Orbital Sciences Corporation

                                        , 200_

Page 5





pension, 401(k), deferred compensation, life insurance, medical, health, accident,
disability or other benefit plans in which you were participating at the time of a Change
in Control, the taking of any action by the Company which would directly or indirectly
materially reduce any of such benefits enjoyed by you at the time of the Change in Control,
or the failure by the Company to provide you with the number of paid vacation days to which
you are entitled in accordance with the Company’s normal vacation policy in effect at the
time of the Change in Control;




     (F) the failure of the Company to obtain a satisfactory agreement from any
successor to assume and agree to perform this Agreement, as contemplated in Section 5
hereof; or




     (G) any termination of your employment which is not effected pursuant to a
Notice of Termination satisfying the requirements of Section 3(iv) hereof (and, if
applicable, Section 3(ii) hereof); and for purposes of this Agreement, no such
purported
termination shall be effective.



          (iv) Notice of Termination. Any termination by the Company or by you shall be
communicated by written Notice of Termination to the other party hereto in accordance with Section
6 hereof, and if by the Company for Cause, shall not be effective unless such notice includes the
information set forth in Section 3(ii) hereof.




          (v) Date of Termination, etc. “Date of Termination” shall mean (A) if your employment
is terminated by reason of death or Disability, the date of your death or 30 days after Notice of
Termination is given (provided that you shall not have returned to the performance of your duties
on a full-time basis during such 30 day period), as the case may be, (B) if your employment is
terminated by the Company for Cause or for any other reason, the date specified in the Notice of
Termination which shall not be less than 30 days from the date such Notice of Termination is
given, and (C) if you terminate your employment for “Good Reason,” the date such Notice of
Termination is given or any later date specified therein.




4. Benefits Upon Termination or During Disability.




          (i) During any period that you fail to perform your duties hereunder as a result of
incapacity due to physical or mental illness, and in the event your employment is terminated
pursuant to Section 3(i) hereof, your benefits shall be determined in accordance with the
Company’s insurance and benefit programs then in effect.




 









 







Mr./Ms.                                        

Orbital Sciences Corporation

                                        , 200_

Page 6




          (ii) If your employment shall be terminated for Cause, the Company shall pay you your full
base salary through the Date of Termination at the rate in effect at the time Notice of
Termination is given, and the Company shall have no further obligations to you under this
Agreement.




          (iii) If your employment shall be terminated immediately prior to or any time after a Change
in Control (a) by the Company for any reason other than for Cause or Disability or (b) by you for
Good Reason, then you shall be entitled to all the benefits provided below:





     (A) The Company shall pay you on the Date of Termination your full base
salary through the Date of Termination at the rate in effect at the time Notice of
Termination is given.




     (B) In lieu of any further salary payments to you for periods subsequent to the
Date of Termination, the Company shall pay to you, not later than 15 days following the
Date of Termination, a lump sum payment equal to two times the sum of (a) your Annual
Base Salary and (b) the sum of any incentive, annual and other cash bonuses, paid to
you
for the 12-month period immediately preceding the month in which the Change in
Control occurred.




     (C) The Company shall also immediately fully vest you in all your account
balances under the Company’s retirement, deferred compensation and pension plans (the
“Plans”); provided, however, that should the Company be unable to provide for such
vesting under the terms of any such Plans, the Company shall pay to you in the manner
and as directed by you, an amount that equals on an after-tax basis the value of any
amounts that were not vested or would otherwise be forfeited by you under the Plans
upon your termination of employment with the Company.




     (D) The Company shall also allow you the opportunity to surrender to the
Company any then outstanding vested and unvested options (whether exercisable or not)
to purchase Common Stock of the Company and any of its subsidiaries and affiliates that
you own and that you did not previously surrender or convert in the transaction that
resulted in the Change in Control, and the Company shall promptly pay to you in
consideration therefor a cash payment equal to the difference between the respective
exercise price for such options and the higher of the (a) highest price paid in
connection
with the transaction that resulted in the Change in Control or (b) then current
fair-market
value.



 









 







Mr./Ms.                                        

Orbital Sciences Corporation

                                        , 200_

Page 7





     (E) The Company shall also pay to you all reasonable legal fees and expenses
incurred by you as a result of such termination (including all such fees and expenses,
if
any, incurred in contesting or disputing any such termination or in seeking to obtain
or
enforce any right or benefit provided by this Agreement) upon presentation to the
Company of a reasonably detailed invoice for such expenses, whether or not you have
already made payment for such expenses.




     (F) For a 24-month period after such termination, the Company shall arrange
to provide you with life, disability, accident and health insurance benefits
substantially
similar to those you were receiving immediately prior to the Notice of Termination,
provided, however, that should the Company be unable to provide for any such benefits
under the terms of the benefit plans, or by law, the Company shall pay you an amount
equal to the premiums the Company would have paid for such benefits under such plans.




     (G) You shall not be required to mitigate the amount of any payment provided
for in this Section 4 by seeking other employment or otherwise, nor shall the amount of
any payment or benefit provided for in this Section 4 be reduced by any compensation
earned by you as the result of employment by another employer or by retirement benefits
after the Date of Termination, or otherwise.




     (H) In addition to all other amounts payable to you under this Section 4, you shall be
entitled to receive all benefits payable to you under any of the Company’s plans or
agreements relating to retirement benefits.



          (iv) All payments required to be made by the Company hereunder to you shall be subject to the
withholding of such amounts relating to Federal, state, local or foreign taxes as the Company
reasonably may determine it should withhold pursuant to any applicable law or regulation.




          (v) Notwithstanding any other provision of this Agreement or of any other agreement,
contract, or understanding entered into by you with the Company, except an agreement, contract, or
understanding hereafter entered into that expressly modifies or excludes application of this
paragraph (an “Other Agreement”), and notwithstanding any formal or informal employment agreement
or other arrangement for the direct or indirect provision of compensation to you (including groups
or classes of participants or beneficiaries of which you are a member), whether or not such
compensation is deferred, is in cash, or is in the form of a benefit to or for you (a “Benefit
Arrangement”), if you are a “disqualified individual,” as defined in Section 280G(c) of the
Internal Revenue Code of 1986, as amended (the “Code”) (or any




 









 





Mr./Ms.                                        

Orbital Sciences Corporation

                                        , 200_

Page 8



successor provision thereto), any right to receive any payment or other benefit under this
Agreement shall not become exercisable or vested (A) to the extent that such right to exercise,
vesting, payment, or benefit, taking into account all other rights, payments, or benefits to or for
you under this Agreement, all Other Agreements, and all Benefit Arrangements, would cause any
payment or benefit to you under this Agreement to be considered a “parachute payment” within the
meaning of Code Section 280G(b)(2) as then in effect (a
“Parachute Payment”) and (B) if, as
a result of receiving a Parachute Payment, the aggregate after-tax amounts received by you from the
Company under this Agreement, all Other Agreements, and all Benefit Arrangements would be less than
the maximum after-tax amount that could be received by you without causing any such payment or
benefit to be considered a Parachute Payment. In the event that the receipt of any such right to
exercise, vesting, payment, or benefit under this Agreement, in conjunction with all other rights,
payments, or benefits to or for you under any Other Agreement or any Benefit Arrangement would
cause you to be considered to have received a Parachute Payment under this Agreement that would
have the effect of decreasing the after-tax amount received by you as described in clause (B) of
the preceding sentence, then you shall have the right, in your sole discretion, to designate those
rights, payments, or benefits under this Agreement, any Other Agreements, and any Benefit
Arrangements that should be reduced or eliminated so as to avoid having the payment or benefit to
you under this Agreement be deemed to be a Parachute Payment.




     5. Successors; Binding Agreement.



          (i) The Company will require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all its business and/or assets to expressly
assume and agree to perform this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession had taken place. Failure of the
Company to obtain such assumption and agreement no later than ten days prior to the effectiveness
of any such succession shall be a breach of this Agreement and shall entitle you to compensation
from the Company in the same amount and on the same terms as you would be entitled under section
4(iii), except that for purposes of implementing the foregoing, a date ten days prior to the date
on which any such succession becomes effective shall be deemed the Date of Termination. As used in
this Agreement, “the Company” shall mean the Company, as hereinbefore defined and any successor to
its business and/or assets that assumes and agrees to perform this Agreement by executing and
delivering the agreement provided for in this paragraph 5, by operation of law, or otherwise.




          (ii) This Agreement shall inure to the benefit of and be enforceable by your personal or
legal representatives, executors, administrators, successors, heirs, distributees,




 









 










Mr./Ms.                                        

Orbital Sciences Corporation

                                        , 200_

Page 9



devisees, and legatees. If you should die while any amount would still be payable to you
hereunder, all such amounts, unless otherwise provided herein, shall be paid in accordance with
the terms of this Agreement to your devisee, legatee or other designee or if there is no such
designee, to your estate.




     6. Notice. For the purposes of this Agreement, notices and all other communications
provided for in this Agreement shall be in writing and shall be deemed to have been duly given
when delivered or mailed by registered mail, return receipt requested, postage prepaid,
addressed
(i) if to the Company, to Orbital Sciences Corporation, 21839 Atlantic Boulevard, Dulles, Virginia
20166, Attn: Secretary of the Company, and (ii) if to you, to the address set forth on the first
page of this Agreement, or to such other address as either party may have furnished to the other
in writing in accordance herewith, except that notice of change of address shall be effective only
upon receipt.



     7. Miscellaneous. No provision of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in writing and signed by
you and such officer as may be specifically designated by the Board. No waiver by either party
hereto at any time of any breach by the other party hereto of, or compliance with, any
condition
or provision of this Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or subsequent time.
No
agreements or representations, oral or otherwise, express or implied, with respect to the
subject
matter hereof have been made by either party which are not expressly set forth in this
Agreement,
and this Agreement supersedes all prior agreements between the Company and you with respect
to the subject matter herein. The validity, interpretation construction and performance of
this
Agreement shall be governed by the local laws of the Commonwealth of Virginia (regardless of
the laws that might otherwise govern under principles of conflicts of law).



     8. Validity. The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision of this Agreement,
which
shall remain in full force and effect.



     9. Counterparts. This Agreement may be executed in several counterparts, each of
which shall be deemed to be an original but all of which together will constitute one and the
same instrument.



     10. Arbitration. Any dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by arbitration in Washington, D.C. in accordance with
the
domestic rules of the American Arbitration Association then in effect. Pending the resolution
of



 









 





Mr./Ms.                                        

Orbital Sciences Corporation

                                        , 200_

Page 2



such dispute or controversy, the Company will continue to pay you your full base salary in effect
when the notice giving rise to the dispute was given and you will continue as a participant in all
incentive compensation, stock option, retirement, deferred compensation, pension, life, disability,
health and accident plans in which you were participating when the notice giving rise to dispute
was given, unless you have already received all benefits payable under Section 4(iii) of this
Agreement. Judgment may be entered on the arbitrator’s award in any court having jurisdiction;
provided, however, that you shall be entitled to seek specific performance of your right to be paid
until the Date of Termination during the pendency of any dispute or controversy arising under or in
connection with this Agreement.




     If this Agreement correctly sets forth our agreement on the subject matter hereof, kindly sign
both of the enclosed copies, keeping one for your files and returning the other to the Company.



Sincerely,



ORBITAL SCIENCES CORPORATION




	 	 	 	 	 
	 	 	 
	By:

	 	David W. Thompson	 	 
	 

	 	Chairman and Chief Executive Officer	 	 






Agreed to:




	 	 	 
	 

Name:

	 	 
	Date: