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

  
								



 


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