Exhibit 10.1


 


EMPLOYMENT
AGREEMENT


 


THIS EMPLOYMENT AGREEMENT (the “Agreement”), is made and entered into as of
October 6, 2008 (the “Effective Date”),
by and between SPACEHAB Incorporated, a Washington corporation (hereafter “Company”) and Lance Lord
(hereafter “Executive”). The
Company and Executive may sometimes hereafter be referred to singularly as a “Party” or collectively as the “Parties.”


 


W  I  T  N  E
S  S  E  T  H:


 


WHEREAS, the Company desires to continue to
secure the employment services of Executive subject to the terms and conditions
hereafter set forth; and


 


WHEREAS, the Executive is willing to enter
into this Agreement upon the terms and conditions hereafter set forth;


 


NOW, THEREFORE, in consideration of Executive’s
employment with the Company, and the premises and mutual covenants contained
herein, the Parties hereto agree as follows:


 


1.             Employment. During the Employment
Period (as defined in Section 4 hereof), the Company shall employ
Executive as, and Executive shall serve as, the Chief Executive Officer of the
Company’s Astrotech Space Operations, Inc. subsidiary (the “Subsidiary”),
including such duties and responsibilities consistent with such position as
designated for such position in the by-laws of the Subsidiary and as assigned
by the Board of Directors from time to time.


 


2.             Compensation.


 


(a)           Base Salary. The Company shall pay to Executive during the Employment Period a base
salary of at a rate of not less than $ 175,000 per annum, as may be adjusted
pursuant to the subsequent provisions of this paragraph (the “Base Salary”). Effective January 1,
2009, the Base Salary shall be at a rate of not less than $225,000 per annum.
The Base Salary shall be payable in accordance with the Company’s normal
payroll schedule and procedures for its executives. Such amounts may be
increased (but not decreased) annually at the discretion of the Compensation
Committee of the Company’s Board of Directors (the “Compensation Committee”) based upon a review, at least
annually, by the Compensation Committee of Executive’s performance. Nothing
contained herein shall preclude the payment of any other compensation to
Executive at any time as determined by the Compensation Committee.


 


(b)           Annual Bonus. In addition to the Base Salary, for each calendar year during the Employment
Period (as defined in Section 4), Executive shall be entitled to a
bonus calculated as set forth in this Section 2(b) (referred
to herein as the “Annual Bonus”).
The Annual Bonus, if any, shall be established by the Compensation Committee
based on Executive’s and/or Company’s performance as determined and approved by
the 


 


	
   

  	
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Compensation Committee based on
performance goals and criteria set by the Compensation Committee. Executive’s
targeted Annual Bonus shall be thirty percent (30%) of his Base Salary for each
year during the Employment Period; provided, however, Executive shall be
entitled to an Annual Bonus only if Executive has met the performance criteria
set by the Compensation Committee for the applicable period.


 


In the event that the Employment Period ends
before the end of a calendar year, Executive shall be entitled to a prorata
portion of the Annual Bonus for that year (based on the number of days in which
Executive was employed during the year divided by 365) as determined by the
Compensation Committee based on satisfaction of the performance criteria for
that period on a prorata basis, unless Executive was terminated for Cause (as
defined in Section 6(e)), in which event Executive shall not be
entitled to any Annual Bonus for that year. Executive acknowledges that the
amount and performance criteria for Executive’s Annual Bonus to be earned for
each Bonus Period shall be set by the Compensation Committee on or before the
beginning of the applicable calendar year. If Executive successfully meets the
performance criteria established by the Compensation Committee, the Company
shall pay Executive the earned Annual Bonus amount within the earlier of: (i) sixty
days (60) days after the end of the calendar year or (ii) sixty days (60)
after the end of the Employment Period, as applicable.


 


(c)           Long-Term Incentive Compensation. In addition to Sections
2(a) and 2(b), Executive shall receive from time to time awards of
stock options and other long-term incentive compensation, as commensurate with
Executive’s employment position, and as determined by the Compensation
Committee, as follows:


 


(1)          An annual stock option grant, if any,
based on Executive’s, Company’s and/or Company Stock performance and consistent
with the Company’s 2008 Stock Incentive Plan, or any successor thereto (the “2008
Plan”), or other Company long term equity incentive award program(s), as
determined and approved by the Compensation Committee.


 


(2)          Such other grants of long-term incentive compensation, if any, as may be
determined and approved by the Compensation Committee.


 


3.             Duties and Responsibilities of Executive.
During the Employment Period, Executive’s services shall be primarily devoted
to the business of the Company and to the performance of the duties and
responsibilities assigned to Executive by the Company’s Board of Directors (the
“Board”), to the best of Executive’s
ability and with reasonable diligence. 
Notwithstanding the above, it is recognized and agreed that Executive is
engaged in and shall continue to be engaged in other consulting, directorships
and similar engagement simultaneous with this employment and shall not be
required to devote his services on a full-time basis to the business of the
Company.  In determining Executive’s
duties and responsibilities, Executive shall not be assigned duties and
responsibilities that are inappropriate for Executive’s position in Section 1
of this Agreement. This Section 3 shall not be construed as
preventing Executive from (a) engaging in volunteer services for
charitable, educational or civic organizations, or (b) investing his
personal assets in such a manner as he deems to be appropriate; provided,
however, no such other activity shall conflict with Executive’s loyalties and
duties to the Company. Executive shall at all times use best


 


	
   

  	
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efforts to comply in good faith
with United States laws applicable to Executive’s actions on behalf of the
Company and its Affiliates (as defined in Section 6(e)). Executive
understands and agrees that Executive may be required to travel from time to
time for purposes of the Company’s business.


 


4.             Term of Employment.
Executive’s initial term of employment with the Company under this Agreement
shall be for the period from the Effective Date through October     ,
2009 (the “Initial Term of Employment”).
Thereafter, the Agreement shall be automatically extended by a one-year renewal
term (each an “Additional Term”),
unless either Party provides Notice of Termination pursuant to Section 7,
in its discretion with or without Cause. Each Party shall have the right to
give Notice of Termination (pursuant to Section 7) at will, with or
without Cause, at any time subject, however, to the terms and conditions of
this Agreement regarding the rights and duties of the Parties upon termination
of employment. The period from the Effective Date through the date of Executive’s
termination of employment with the Company and all Affiliates, for whatever
reason, shall be referred to herein as the “Employment
Period.”


 


5.             Benefits. Subject to the terms and conditions of this Agreement, during the
Employment Period, Executive shall be entitled to all of the following:


 


(a)           Reimbursement of Business Expenses. The Company shall pay or reimburse Executive for
all reasonable travel, entertainment and other business expenses paid or
incurred by Executive in the performance of duties hereunder in accordance with
the Company’s Travel and Entertainment Expense Policy, as in effect at such
time, including without limitation, transportation, lodging and food for
Executive to attend conventions, conferences and meetings that the Compensation
Committee determines are appropriate or in the best interest of the Company. The
Company shall also provide Executive with suitable office space, including
secretarial and other staff support and paid parking.


 


(b)           Other Employee Benefits. Executive shall be entitled to participate in any
pension, retirement, 401(k), profit-sharing, and other employee benefits plans
or programs of the Company to the same extent as available to other officers of
the Company under the terms and conditions of such plans or programs. Executive
shall also be entitled to participate in any group insurance, hospitalization,
medical, dental, health, life, accident, disability and other employee benefits
or fringe benefits plans or programs of the Company to the same extent as
available to other officers of the Company under the terms and conditions of
such plans or programs.


 


(c)           Vacation and Holidays. Executive shall be entitled to four (4) weeks
of paid vacation per calendar year, as accrued in accordance with the Company’s
vacation benefit policy.  Executive may
not accrue more than five (5) weeks of paid vacation at any time.  Executive shall also be entitled to all paid
holidays and sick time provided by the Company for its officers under the
Company’s holiday and sick time policy as in effect at such time.


 


6.             Rights and Payments upon Termination. In
addition to any incentive awards payable under Section 2(c), the
Executive’s right to compensation and benefits for periods after the date on
which Executive’s employment terminates with the Company and all


 


	
   

  	
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Affiliates (the “Termination Date”), shall be determined in
accordance with this Section 6, as follows:


 


(a)           Minimum Payments. Executive shall be entitled to the following
minimum payments under this Section 6(a), in addition to any other
payments or benefits to which Executive is entitled to receive under the terms
of Section 6(b) or any employee benefit plan or program:


 


(1)           an amount equal to the Executive’s Base Salary (as
in effect as of the Termination Date) for the payroll period containing the
Termination Date (i.e., payment of salary for the final payroll period), with
such amount to be calculated through the end of such payroll period;


 


(2)           unpaid vacation days for that year which have
accrued through the Termination Date, up to a maximum of five (5) weeks;
and


 


(3)           reimbursement of reasonable business expenses that
were incurred but unpaid as of the Termination Date.


 


Subject to application of Section 38
hereof, Base Salary and accrued vacation days shall be paid to Executive within
ten (10) business days following the Termination Date in a cash lump sum
less applicable withholdings. Business expenses shall be reimbursed in
accordance with the Company’s normal procedures.


 


(b)           Other Severance Payments.  During the
Term of Employment, in the event that: (i) Executive’s employment is
involuntarily terminated by the Company (except due to a “No Severance Benefits
Event” (as defined in Section 6(e)), (ii) Executive’s
employment is terminated due to his death or “Disability” (as defined in Section 6(e)),
or (iii) Executive terminates his own employment hereunder for “Good
Reason” (as defined in Section 6(e)), then in any such event under
clause (i), (ii) or (iii), the following severance benefits shall be
provided to Executive or, in the event of his death before receiving all such
benefits, to his “Designated Beneficiary” (as defined in Section 6(e))
following his death:


 


(1)           The Company shall pay to Executive as additional
compensation (the “Additional Payment”),
an amount equal to three-fourths (0.75) times the sum of:


 


(A)          the Executive’s highest Base Salary as in effect at
any time within 12 months before the Termination Date; plus


 


(B)           an amount determined by the Compensation Committee
in its discretion based upon factors including its subjective evaluation of the
Executive’s past and present job performance, the Company’s then-current cash
position, and other factors deemed relevant to such determination by the
Compensation Committee, with such amount to be in a range of from 0% to 50% of
the annualized average of the Annual Bonuses paid or payable to the Executive
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the Termination Date occurs.


 


Subject to
application of Section 38 hereof, the Company shall make the
Additional Payment to Executive in a cash lump sum payment, net of tax
withholdings, within thirty (30) calendar days following the Termination Date.


 


(2)           The Company shall maintain continued group health
plan coverage following the Termination Date under all plans subject to the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”) (as codified in Code Section 4980B)
for Executive and his eligible spouse and dependents for the maximum period for
which such qualified beneficiaries are eligible to receive COBRA coverage (the “Continuation
Period”). For the initial nine (9) months of the Continuation Period (or,
in the event of a termination of employment that requires payment of an
Additional Payment described in Section 6(c) hereunder, then
for the initial twelve (12) months of the Continuation Period), Executive (and
his spouse and dependents) shall not be required to pay more for such COBRA
coverage than is charged by the Company to its officers who are then in active
service for the Company and receiving coverage under such plan and, therefore,
the Company shall be responsible for paying the difference between the amount
charged hereunder and the full COBRA premiums, which difference shall be
additional compensation to Executive. 
Beginning with the tenth (10th) month of the Continuation Period (or, in the
event of a termination of employment that requires payment of an Additional
Payment described in Section 6(c) hereunder, beginning with the
thirteenth (13th) month of the Continuation Period) and continuing
thereafter for the duration of the Continuation Period, Executive shall be
responsible for payment of full COBRA premiums without contribution by the Company.   In all other respects, Executive (and his
spouse and dependents) shall be treated the same as other COBRA qualified
beneficiaries under the terms of such plans and the requirements of COBRA. In
the event of any change to a group health plan following the Termination Date,
Executive and his spouse and dependents, as applicable, shall be treated
consistently with the then-current officers of the Company with respect to the
terms and conditions of coverage and other substantive provisions of the plan.
Executive and his spouse  hereby agree to
acquire and maintain any and all coverage that either or both of them are
entitled to at any time under a group health plan maintained by a successor
employer of Executive or under the Medicare program or any similar program of
the United States or any agency thereof.


 


(3)           The Executive’s service requirements under all
Company stock option and incentive award plans shall automatically be deemed
satisfied, and the Executive shall automatically become 100% vested on his
Termination Date in all grant shares and incentive awards.


 


(4)           For purposes of clarity, in the event that (i) Executive
voluntarily resigns or otherwise voluntarily terminates his own


 


	
   

  	
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employment hereunder, except for Good Reason
or due to his death or Disability (as such terms are defined in Section 6(e)),
or (ii) Executive’s employment is terminated due to a No Severance
Benefits Event (as defined in Section 6(e)), then, in either such
event under clause (i) or (ii), the Company shall have no obligation to
provide the severance benefits described in paragraphs (1), (2) and (3) (above)
of this Section 6(b), except to offer COBRA coverage (as required
by COBRA law) but not at the special discounted rate described in paragraph
(2). Executive shall still be entitled to the severance benefits provided under
Section 6(a) in any event. The severance payments provided
under this Agreement shall supersede and replace any severance payments under
any severance pay plan or policy that the Company or any Affiliate maintains
for employees generally.


 


(c)           Change in Control. Notwithstanding any provision hereof to the
contrary, if the employment of Executive is terminated, voluntarily or
involuntarily, within twelve (12) months following a Change in Control (as
defined in Section 6(e)), for any reason other than due to his
death or Disability, then the Additional Payment calculated in Section 6(b) shall
be computed as one (1.0) times, rather than three-fourths (0.75) times, the
applicable Base Salary and Annual Bonus, as set forth in Section 6(b),
the Executive shall automatically become 100% vested on his Termination Date in
all Company stock option and incentive award plans as set forth in Section 6(b),
and, in all other respects, the provisions of Section 6
shall still apply.


 


(d)           Release Agreement. Notwithstanding any provision of this Agreement
to the contrary, in order to receive the severance benefits payable under
either Section 6(b) or Section 8, as applicable,
the Executive must first execute an appropriate release agreement (on a form
provided by the Company) whereby the Executive agrees to release and waive, in
return for such severance benefits, any claims that he may have against the
Company including, without limitation, for unlawful discrimination (e.g., Title VII of the Civil Rights Act);
provided, however, such release agreement shall not release any claim or cause
of action by or on behalf of the Executive for (a) any payment or benefit
that may be due or payable under this Agreement or any employee benefit plan
prior to the receipt thereof, (b) any willful failure by the Company to
cooperate with Executive in exercising his vested stock options, RSUs or other
Incentive Awards under the 2008 Plan in accordance with their terms, (c) non-payment
of salary or benefits to which he is entitled from the Company as of the
Termination Date, or (d) a breach of this Agreement by the Company.


 


(e)           Definitions.


 


(1)           “Affiliate” means any entity, in whatever form, of which
the Company has any ownership interest or ownership or management control, as
determined by the Board.


 


(2)           “Cause” means any of the following: (A) the
Executive’s conviction by a court of competent jurisdiction as to which no
further appeal can be taken of a felony or entering the plea of nolo contendere to such crime by the
Executive; (B) the commission by the Executive of a demonstrable act of a
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property, of or upon the Company
or any Affiliate; (C) the engagement by the Executive, without the written
approval of the Company, in any material activity which directly competes with
the business of the Company or any Affiliate, or which would directly result in
a material injury to the business or reputation of the Company or any
Affiliate; or (D) (i) the material breach by Executive of any
provision of this Agreement, or (ii) the repeated nonperformance of
Executive’s duties to the Company or any Affiliate (other than by reason of
Executive’s illness or incapacity), but only under clauses (C), (D) (i) or
(D) (ii) after Executive has received written Notice from the Company
of such breach or nonperformance (which Notice must specifically identify the
manner and set forth specific facts, circumstances and examples of which the
Company believes that Executive has breached this Agreement or not
substantially performed duties hereunder) and Executive’s continued failure to
cure such breach or nonperformance within the time period set by the Company
but in no event less than 30 calendar days after Executive’s receipt of such
Notice. After exhausting any such appeal, pursuant to Section 7 the
Company must provide a written Notice of Termination to Executive regarding the
specific reason for his Termination for Cause and the Termination Date.


 


(3)           “Change in Control” means a Change in Control of the
Company which has the same definition of such term as defined in the 2008 Plan,
provided, however, that with respect to any aspect of the
definition of such term, in the event that (i) this Agreement satisfies
the definition of a “deferred compensation plan” under Code Section 409A,
and (ii) the definition of “Change in Control” provided in the Final
Regulations to Code Section 409A (the “409A Regulations”), as amended from
time to time, sets forth a higher or more restrictive standard for a Change of
Control, then the definition of such term provided in the 409A Regulations
shall apply..


 


(4)           “Code” means the Internal Revenue Code of 1986, as
amended, or its successor. References herein to any Section of the Code
shall include any successor provisions of the Code.


 


(5)           “Designated Beneficiary” means the Executive’s surviving
spouse, if any. If there is no such surviving spouse at the time of Executive’s
death, then the Designated Beneficiary hereunder shall be Executive’s estate.


 


(6)           “Disability” shall mean that Executive is entitled to
receive long-term disability (“LTD”) income benefits under the LTD plan or policy
maintained by the Company that covers Executive. If, for any reason, Executive
is not covered under such LTD plan or policy, then “Disability” shall mean a “permanent
and total disability” as defined in Section 22(e)(3) of the Code and
Treasury regulations thereunder. Evidence of such Disability shall be certified
by a physician acceptable to both the Company and Executive. In the event that
the Parties are not able to agree on the choice of a physician, each shall
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select a third physician to
render such certification. All costs relating to the determination of whether
Executive has incurred a Disability shall be paid by the Company. Executive
agrees to submit to any examinations that are reasonably required by the
attending physician or other healthcare service providers to determine whether
Executive has a Disability.


 


(7)           “Dispute” means any dispute, disagreement, claim, or
controversy arising in connection with or relating to the Agreement or
employment of Executive, or the termination of his employment, or the validity,
interpretation, performance, breach, or termination of the Agreement.


 


(8)           “Good Reason” means the occurrence of any of the
following events, except in connection with termination of the Executive’s
employment for Cause or Disability, without Executive’s express written
consent:


 


(A)          The assignment to the Executive of any duties
inconsistent in any material respect with the Executive’s position, within the
6-month period prior to a Change in Control or two years thereafter, which in
this definition includes status, reporting relationship to the Board, office,
title, scope of responsibility over corporate level staff or operations
functions, or responsibilities as an officer of the Company; or any other
material diminution in the Executive’s position, authority, duties, or
responsibilities, other than (in any case or circumstance) an isolated and
inadvertent action not taken in bad faith that is remedied by the Company
within 30 days after Notice thereof to the Company by the Executive (for
purposes of clarity and not limitation, if (i) the Company becomes a division,
a wholly or majority-owned subsidiary, or other similar entity of another
person or entity or combination thereof and (ii) after such reorganization
the Executive is not placed in a substantially equivalent position with the
parent entity or reorganized combination entity as he had with the Company
immediately prior to such reorganization, then such occurrence shall be deemed
an assignment of duties materially inconsistent with Executive’s position for
purposes of this definition of Good Reason); or


 


(B)           in the event of a Change in Control, the Company
requires the Executive to be based at any office or location farther than 35
miles from the Executive’s office or principal job location immediately before
the Change in Control, except for required business travel to an extent
substantially consistent with the Executive’s travel obligations immediately
before the Change in Control; or


 


(C)           a reduction in the Executive’s Base Salary or
Annual Bonus opportunity from the highest amount in effect at any time during
the 12-month period prior to the Change in Control.


 


	
   

  	
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Notwithstanding
the foregoing definition of “Good Reason”, the Executive cannot terminate his
employment hereunder for Good Reason unless he (i) first notifies the
Compensation Committee in writing of the event (or events) which the Executive
believes constitutes a Good Reason event under subparagraphs (A), (B) or (C) (above)
within 90 days from the date of such event, and (ii) provides the Company
with at least 30 calendar days to cure, correct or mitigate the Good Reason
event so that it either (1) does not constitute a Good Reason event
hereunder or (2) Executive agrees, in writing, that after any such
modification or accommodation made by the Company, such event shall not
constitute a Good Reason event.


 


(9)           “No Severance Benefits Event” means termination of
Executive’s employment by the Company for Cause (as defined above).


 


7.             Notice of Termination. Any
termination by the Company or the Executive shall be communicated by Notice of
Termination to the other Party hereto. For purposes of this Agreement, the term
“Notice of Termination” means a
written notice which indicates the specific termination provision of this
Agreement relied upon, and sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Executive’s
employment.


 


8.             Severance Benefits Following Nonrenewal of
Agreement. In the event that (a) this Agreement is not
renewed by the Company (pursuant to Section 4) for any reason other
than a “No Severance Benefits Event” (as defined in Section 6(e))
and (b) the employment of Executive is subsequently terminated by the
Company, for any reason other than a No Severance Benefits Event or due to his
death or Disability, within one (1) year following the expiration of the
Initial Term of Employment or any Additional Term hereunder due to nonrenewal
by the Company, then Executive shall be entitled to severance benefits
(hereafter, the “Nonrenewal Severance
Benefits”), provided that he first enters into a release agreement
pursuant to Section 6(d). The Nonrenewal Severance Benefits shall
be computed in the same manner as severance benefits are computed under Section 6(b).   In the event of a termination of employment
as described in this Section 8, Executive shall still be entitled
to the benefits under Section 6(b)(2) for discounted COBRA
coverage for the nine-month period set forth in Section 6(b)(2).


 


9.             No Mitigation. In
the event of a Dispute (as defined in Section 6(e)), Executive
shall not be required to mitigate the amount of any compensation, benefits or
other payment that Executive may have otherwise earned under this Agreement, by
seeking other employment or in any other manner.


 


10.          Restrictive Covenants. As
an inducement to the Company to enter into this Agreement, Executive represents
to, and covenants with or in favor of, the Company that Executive will comply
with all of the restrictive covenants in Sections 10 through 17, as a
condition to the Company’s obligation to provide any benefits to Executive
under this Agreement.


 


	
   

  	
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11.          Confidential Information.


 


(a)         Access to Confidential Information. As of the Effective Date and on an ongoing basis,
the Company agrees to give Executive access to Confidential Information which
the Executive did not have access to, or knowledge of, before the Effective
Date.


 


(b)         Access to Specialized Training. As of the Effective Date and on an ongoing basis,
the Company has provided, and agrees to provide on an ongoing basis, Executive
with Specialized Training which the Executive does not have access to before
the Effective Date.


 


(c)          Agreement Not to Use or Disclose
Confidential Information. In exchange for the Company’s promises to provide Executive with access
to Confidential Information and Specialized Training and the other
consideration and benefits provided to Executive under this Agreement,
Executive agrees that during the Restricted Period (as defined in Section 11(e)),
or at any time thereafter, not to disclose to anyone, including, without
limitation, any person, firm, corporation or other entity, or publish or use
for any purpose, any Confidential Information, except as required in the
ordinary course of the Company’s Business (as defined in subsection (e) below),
as authorized by the Company, or if such information becomes available to the
public by other means other than a breach by Executive.


 


(d)         Agreement to Refrain from Defamatory
Statements. Executive
shall refrain, both during the Employment Period and thereafter, from
publishing any oral or written statements about any directors, officers,
employees, agents, investors or representatives of the Company or any Affiliate
that are slanderous, libelous, or defamatory; or that disclose private or
confidential information about the Business, directors, officers, employees,
agents, investors or representatives of the Company or any Affiliate; or that
constitute an intrusion into the seclusion or private lives of any such person;
or that give rise to unreasonable publicity about the private lives of such
persons; or that place any such person in a false light before the public; or
that constitute a misappropriation of the name or likeness of any such person.
Similarly, the Company shall refrain from making any defamatory statements
concerning Executive or unreasonably invading Executive’s privacy as described
above.  A violation or threatened
violation of these restrictive covenants may be enjoined by a court of law
notwithstanding the arbitration provisions of Section 29.


 


(e)          Definitions. The following terms, when used in this Agreement,
are defined below:


 


(1)         “Business” means (A) the design,
manufacture, lease and operation of pressurized and unpressurized space
modules, flight hardware and subsystems, and those other businesses and
activities that are described in the Company’s Form 10-K for the fiscal
year ended June 30, 2007, and Form 10-Q for the quarter ending December 31,
2007, or (B) any similar, incidental or related business conducted or
pursued by, or engaged in, or proposed to be conducted or pursued by or engaged
in, by the Company or an Affiliate at any time during the Employment Period.


 


(2)           “Competitive Business”
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competes, directly or indirectly,
with the Business in the Market.


 


(3)           “Confidential Information”
means any Trade Secret, confidential study, data, calculations, software
storage media or other compilation of information, patent, patent application,
copyright, trademark, trade name, service mark, service name, “know-how”,
customer lists, details of client or consultant contracts, pricing policies,
sales techniques, confidential information relating to suppliers, information
relating to the special and particular needs of the Company’s or Affiliate’s
customers operational methods, marketing plans or strategies, products and
formulae, product development techniques or plans, business acquisition plans
or any portion or phase of any scientific or technical information, ideas,
discoveries, designs, computer programs (including source of object codes),
processes, procedures, research or technical data, improvements or other
proprietary or intellectual property of the Company or an Affiliate, whether or
not in written or tangible form, and whether or not registered, and including
all files, records, manuals, books, catalogues, memoranda, notes, summaries,
plans, reports, records, documents and other evidence thereof. The term “Confidential
Information” does not include, and there shall be no obligation hereunder with
respect to, information that is or becomes generally available to the public
other than as a result of an impermissible disclosure by Executive.


 


(4)           “Market” means any
county in the United States of America and each similar jurisdiction in any
other country in which the Business was conducted or pursued by the Company or
an Affiliate prior to the Termination Date, or is conducted or engaged in or
pursued, or is proposed to be conducted or engaged in or pursued, by the
Company or an Affiliate at any time during the Employment Period.


 


(5)           “Restricted Period”
means the period commencing on the Effective Date of this Agreement and
continuing through the nine (9) month anniversary of the Termination Date.


 


(6)           “Restricted Territory”
means the United States of America.


 


(7)           “Specialized Training”
includes the training the Company provides to Executive that is unique to its
business and enhances Executive’s ability to perform Executive’s job duties
effectively. Specialized Training includes, without limitation, sales
methods/techniques training; operation methods training; engineering and
scientific training; and computer and systems training.


 


(8)           “Trade Secrets” means any and all information
and materials (in any form or medium) which were not otherwise known by Executive
or available to the public that are proprietary to the Company or a Affiliate,
or are treated as confidential by the Company or Affiliate as part of, or
relating to, all or any portion of its or their Business, including information
and materials about the products and services offered, or the 


 


	
   

  	
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needs of customers served, by the Company or
Affiliate; compilations of information, records and specifications, properties,
processes, programs, and systems of the Company or Affiliate; research of or
for the Company or Affiliate; and methods of doing business of the Company or
Affiliate. Trade Secrets include, without limitation, all of the Company’s or
Affiliate’s technical and other Business information, whether patentable or
not, which is of a confidential, trade secret or proprietary character, and
which is either developed by the Executive alone, with others or by others;
lists of customers; identity of customers; contract terms; bidding information
and strategies; pricing methods or information; computer software; computer
software methods and documentation; hardware; the Company’s or Affiliate’s
methods of operation; the procedures, forms and techniques used in servicing accounts;
and other documents, information or data that the Company requires to be
maintained in confidence for the Company’s success.


 


12.          Duty to Return Company Documents
and Property. Upon termination of the Employment Period, Executive shall immediately
return and deliver to the Company any and all papers, books, records,
documents, memoranda and manuals, e-mail, electronic or magnetic recordings or
data, including all copies thereof, belonging to the Company or an Affiliate or
relating to its business, in Executive’s possession or control, whether
prepared by Executive or others. If at any time after the Employment Period,
Executive determines that he has any Confidential Information in his possession
or control, Executive shall immediately return it to the Company, including all
copies thereof.


 


13.          Best Efforts and Disclosure. Executive agrees that, while employed by the
Company, Executive’s services shall be devoted on a full time basis to the
Business, and Executive shall use best efforts to promote its success. Further,
Executive shall promptly disclose to the Company all ideas, inventions,
computer programs, and discoveries, whether or not patentable or copyrightable,
which Executive may conceive or make, alone or with others, during the
Employment Period, whether or not during working hours, and which directly or
indirectly:


 


(a)           relate to a matter within the Business, scope, field,
duties or responsibility of Executive’s employment with the Company; or


 


(b)           are based on any knowledge of the actual or anticipated
Business or interests of the Company; or


 


(c)           are aided by the use of time, materials, facilities or
information of the Company.


 


Executive assigns to the Company, without
further compensation, any and all rights, titles and interest in all such
ideas, inventions, computer programs and discoveries in all countries of the
world. Executive recognizes that all ideas, inventions, computer programs and
discoveries of the type described above, conceived or made by Executive alone
or with others within 12 months after the Termination Date (voluntary or
involuntary), are likely to have been conceived in significant part either
while employed by the Company or as a direct result of knowledge Executive had
of Confidential Information. Accordingly, 


 


	
   

  	
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Executive agrees that such ideas, inventions
or discoveries shall be presumed to have been conceived during the Employment
Period, unless and until the contrary is clearly established by the Executive.


 


14.          Inventions
and Other Works. Any and all writings,
computer software, inventions, improvements, processes, procedures and/or
techniques which Executive may make, conceive, discover, or develop, either
solely or jointly with any other person or persons, at any time during the
Employment Period, whether at the request or upon the suggestion of the Company
or otherwise, which relate to or are useful in connection with any Business now
known or hereafter carried on or expressly contemplated by the Company,
including developments or expansions of its present fields of operations, shall
be the sole and exclusive property of the Company. Executive agrees to take any
and all actions necessary or appropriate so that the Company can prepare and
present applications for copyright or Letters Patent therefor, and secure such
copyright or Letters Patent wherever possible, as well as reissue renewals, and
extensions thereof, and obtain the record title to such copyright or patents.
Executive shall not be entitled to any additional or special compensation or
reimbursement regarding any such writings, computer software, inventions,
improvements, processes, procedures and techniques. Executive acknowledges that
the Company from time to time may have agreements with other persons or
entities which impose obligations or restrictions on the Company regarding
inventions made during the course of work thereunder or regarding the
confidential nature of such work. Executive agrees to be bound by all such obligations
and restrictions, and to take all action necessary to discharge the obligations
of the Company.


 


15.          Non-Solicitation Restriction.    To
protect Confidential Information, it is necessary to enter into the following
restrictive covenants, which are ancillary to the enforceable promises between
the Company and Executive in Sections 10 through 17 and other provisions
of this Agreement. During the Restricted Period, Executive hereby covenants and
agrees that he will not, directly or indirectly, without the prior written
consent of the Board, either individually or as a principal, partner, agent,
consultant, contractor, employee, or as a director or officer of any entity, or
in any other manner or capacity whatsoever, except on behalf of the Company or an
Affiliate, solicit Business, or attempt to solicit Business, in products or
services competitive with the Business in the Market.


 


16.          Non-Competition Restriction.
Executive hereby agrees that in order to protect Confidential Information, it
is necessary to enter into the following restrictive covenant, which is
ancillary to the enforceable promises between the Company and Executive in Sections
10 through 17 and other provisions of this Agreement. Executive hereby
covenants and agrees that during the Restricted Period, Executive will not,
without the prior written consent of the Board, become interested in any
capacity in which Executive would perform any similar duties to those performed
while at the Company, directly or indirectly (whether as proprietor, stockholder,
director, partner, employee, agent, independent contractor, consultant,
trustee, or in any other capacity), with respect to any Competitive Business;
provided, however, Executive shall not be deemed to be participating or
engaging in a Competitive Business solely by virtue of the ownership of not
more than one percent (1%) of any class of stock or other securities which are
publicly traded on a national securities exchange or in a recognized
over-the-counter market.


 


	
   

  	
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17.          No-Recruitment Restriction.
Executive agrees that during the Restricted Period, Executive will not, either
directly or indirectly, or by acting in concert with others, solicit or
influence, or seek to solicit or influence, any employee or independent
contractor performing services for the Company or any Affiliate to terminate,
reduce or otherwise adversely affect such employment or other relationship with
the Company or Affiliate.


 


18.          Tolling. If Executive violates any of the restrictions
contained in Sections 10 through 17, then notwithstanding any provision
hereof to the contrary, the Restricted Period will be suspended and will not
run in favor of Executive from the time of the commencement of any such
violation, unless and until such time when the Executive cures the violation to
the reasonable satisfaction of the Company, which cannot be unreasonably
withheld by the Company.


 


19.          Reformation. If a
court or arbitrator rules that any time period, the geographic area or any
prohibited activities specified in any restrictive covenant in Sections 10
through 17 is unenforceable, then the time period will be reduced by the
number of months, the geographic area will be reduced by the elimination of
such unenforceable portion, and/or the prohibited activities will be limited by
elimination of any such unenforceable portion, so that the restrictions may be
enforced in the geographic area, for the time, and pertaining to the prohibited
activities to the full extent permitted by law.


 


20.          No Previous Restrictive Agreements.
Executive represents that, except as disclosed in writing to the Company as of
the Effective Date, Executive is not bound by the terms of any agreement with
any previous employer or other third party to (a) refrain from using or
disclosing any confidential or proprietary information previously obtained by
Executive in such capacity during the course of his employment by the Company
or (b) refrain from competing, directly or indirectly, with the business
of such previous employer or any other person or entity. Executive further
represents that his duties for the Company hereunder do not, and will not,
breach any agreement to keep in confidence proprietary information that was
acquired by Executive in confidence or in trust prior to Executive’s employment
by the Company; and Executive shall not disclose to the Company, or induce the
Company to use, any confidential or proprietary information or material
belonging to any previous employer or other third party.


 


21.          Conflicts of Interest. In
keeping with Executive’s duties to Company, Executive hereby agrees that
Executive shall not become involved in a conflict of interest, or upon
discovery thereof, allow such a conflict to continue at any time during the
Employment Period.  If Executive becomes
aware of any conflict of interest affecting the performance of his duties
hereunder, Executive agrees to promptly disclose the details of such conflict
to the Board.


 


22.          Remedies.
Executive acknowledges that the restrictions contained in Sections 10  through 21 of this Agreement, in view of
the nature of the Company’s Business, are reasonable and necessary to protect
the Company’s legitimate Business interests, and that any violation of this
Agreement would result in irreparable injury to the Company. Notwithstanding
the arbitration provisions in Section 29, in the event of a breach
or a threatened breach by Executive of any provision of Sections 10 through
21 of this Agreement, the Company shall be entitled to a temporary
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restraining Executive from the commission of
any breach. In the event the Company is successful in obtaining an order from a
court of competent jurisdiction granting any such injunctive relief (other than
by agreement of the Parties), the Company may recover its reasonable and
necessary attorneys’ fees, court costs and reasonable and necessary expenses
related to the breach or threatened breach as found by the court. If Executive
is successful in resisting any effort made by the Company to obtain injunctive
relief, then Executive may recover his reasonable attorney’s fees, court costs
and other reasonable and necessary expenses. Nothing contained in this
Agreement shall be construed as prohibiting any Party from pursuing any other
remedies available to it for any such breach or threatened breach, including,
without limitation, the recovery of money damages, attorneys’ fees, and costs.
These covenants and agreements shall each be construed as independent of any
other provisions in this Agreement, and the existence of any claim or cause of
action by Executive against the Company, whether predicated on this Agreement
or otherwise, shall not constitute a defense to the enforcement by the Company
of such covenants and agreements.


 


23.          Withholdings; Right of Offset. The
Company may withhold and deduct from any benefits and payments made or to be
made pursuant to this Agreement (a) all federal, state, local and other
taxes as may be required pursuant to any law or governmental regulation or
ruling, (b) all other normal employee deductions made with respect to
Company’s employees generally, and (c) any advances made to Executive and owed
to Company; however, the Company shall promptly notify Executive in writing of
any such withholding or deduction under this subsection (c).


 


24.          Nonalienation. The
right to receive payments under this Agreement shall not be subject in any
manner to anticipation, alienation, sale, transfer, assignment, pledge or
encumbrance by Executive, dependents or beneficiaries of Executive, or to any
other person who is or may become entitled to receive such payments hereunder.
The right to receive payments hereunder shall not be subject to or liable for
the debts, contracts, liabilities, engagements or torts of any person who is or
may become entitled to receive such payments, nor may the same be subject to
attachment or seizure by any creditor of such person under any circumstances,
and any such attempted attachment or seizure shall be void and of no force and
effect.


 


25.          Incompetent or Minor Payees.
Should the Company determine, in its discretion, that any person to whom any
payment is payable under this Agreement has been determined to be legally
incompetent or is a minor, any payment due hereunder, notwithstanding any other
provision of this Agreement to the contrary, may be made in any one or more of
the following ways: (a) directly to such minor or person; (b) to the
legal guardian or other duly appointed personal representative of the person or
estate of such minor or person; or (c) to such adult or adults as have, in
the good faith knowledge of the Company, assumed custody and support of such
minor or person; and any payment so made shall constitute full and complete
discharge of any liability under this Agreement to the full extent of the
amount so paid.


 


26.          Severability. It
is the desire of the Parties hereto that this Agreement be enforced to the
maximum extent permitted by law, and should any provision or any portion
thereof contained herein be held unenforceable by a court of competent jurisdiction
or arbitrator (pursuant to Section 29), the parties hereby agree
and consent that 


 


	
   

  	
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such provision or portion thereof shall be
reformed to create a valid and enforceable provision to the maximum extent
permitted by law; provided, however, if such provision cannot be reformed, it
shall be deemed ineffective and deleted herefrom without affecting any other
provision of this Agreement. This Agreement should be construed by limiting and
reducing it only to the minimum extent necessary to be enforceable under then
applicable law.


 


27.          Title and Headings; Construction.
Titles and headings to Sections hereof are for the purpose of reference only
and shall in no way limit, define or otherwise affect the provisions hereof.
The words “herein”, “hereof”, “hereunder” and other compounds of the word “here”
shall refer to the entire Agreement and not to any particular provision.


 


28.          Governing Law; Jurisdiction. All
matters or issues relating to the interpretation, construction, validity, and
enforcement of this Agreement shall be governed by the laws of the State of
Texas, without giving effect to any choice-of-law principle that would cause
the application of the laws of any jurisdiction other than Texas. Jurisdiction
and venue of any action or proceeding relating to this Agreement or any Dispute
(to the extent arbitration is not required under Section 29) shall
be exclusively in Houston, Texas.


 


29.          Mandatory Arbitration.
Except as provided in subsection (h) of this Section 29, any
Dispute (as defined in Section 6(e)) must be resolved by binding arbitration
in accordance with the Federal Arbitration Act and the Employment Arbitration Rules and
Mediation Procedures of the American Arbitration Association as then effective
(the “Arbitration Rules”), subject
to this Section 29 as follows:


 


(a)           Any
party may begin arbitration by filing a demand for arbitration in accordance
with the Arbitration Rules and concurrently notifying the other Party of
that demand. If the Parties are unable to agree upon a single arbitrator within
ten days after the demand for arbitration was filed (and do not agree to an
extension of that ten-day period), either Party may request the Houston, Texas,
office of the American Arbitration Association (“AAA”) to appoint a single arbitrator in accordance with the
Arbitration Rules. The arbitrator so appointed shall be deemed accepted by the
Parties.


 


(b)           The
arbitration shall be conducted in Houston, Texas, at a place and time agreed
upon by the Parties with the arbitrator, or if the Parties cannot agree, as
designated by the arbitrator. The arbitrator may, however, call and conduct
hearings and meetings at such other places as the Parties may agree or as the
arbitrator may, on the motion of one Party, determine to be necessary to obtain
significant testimony or evidence.


 


(c)           The
arbitrator may authorize any and all forms of discovery upon a Party’s showing
of need that the requested discovery is reasonably likely to lead to the
discovery of admissible evidence needed to resolve the Dispute and/or allow
either party to discover such facts that shall afford full and adequate relief.


 


(d)           The
arbitration shall be subject to the Federal Arbitration Act and conducted in
accordance with the Arbitration Rules to the extent that they do not
conflict with this Section 29. The Parties and the arbitrator may,
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provisions of this Section 29 or
the matters otherwise governed by the Arbitration Rules.


 


(e)           The arbitration hearing shall be held
within 60 days after the appointment of the arbitrator. The arbitrator’s final
decision or award shall be made within 30 days after the hearing. That final
decision or award shall be made by unanimous or majority vote or consent of the
arbitrator, and shall be deemed issued at the place of arbitration. The
arbitrator’s final decision or award shall be based on this Agreement and
applicable law.


 


(f)            To
the extent that the arbitrator’s final decision or award may include injunctive
relief in response to any actual or impending breach of this Agreement or any
other actual or impending action or omission of a Party under or in connection
with this Agreement, any such injunctive relief shall not be enforceable
against the other party until entered by order of a court of competent
jurisdiction.


 


(g)           The
arbitrator’s final decision or award shall be final and binding upon the
Parties, and judgment upon that decision or award may be entered in any court
having jurisdiction. The Parties waive any right to apply or appeal to any
court for relief from the preceding sentence or from any decision of the
arbitrator that is made before the final decision or award.


 


(h)           Nothing
in this Section 29 limits the right of either Party to apply to a
court having jurisdiction to (i) enforce the agreement to arbitrate in
accordance with this Section 29, (ii) seek provisional or
temporary injunctive relief, in response to an actual or impending breach of
the Agreement or otherwise so as to avoid an irreparable damage or maintain the
status quo, until a final arbitration decision or award is rendered or the
Dispute is otherwise resolved, or (iii) challenge or vacate any final
arbitration decision or award that does not comply with this Section 29.
In addition, nothing in this Section 29 prohibits the Parties from
resolving any Dispute (in whole or in part) by mutual agreement. This Section 29
shall also not preclude the Parties at any time from mutually agreeing to
pursue non-binding mediation of the Dispute.


 


(i)            The
arbitrator may proceed to an award notwithstanding the failure of any Party to
participate in such proceedings. The prevailing Party in the arbitration
proceeding may be entitled to an award of reasonable attorneys’ fees incurred
in connection with the arbitration in such amount, if any, as determined by the
arbitrator in its discretion. The costs of the arbitration shall be borne
equally by the Parties unless otherwise determined by the arbitrator in its
award.


 


(j)            The
arbitrator shall be empowered to impose sanctions and to take such other
actions as it deems necessary to the same extent a judge could impose sanctions
or take such other actions pursuant to the Federal Rules of Civil
Procedure and applicable law. Each party agrees to keep all Disputes and
arbitration proceedings strictly confidential except for disclosure of
information required by applicable law which cannot be waived.


 


30.          Binding Effect: Third Party
Beneficiaries. This Agreement shall be binding upon and inure to the benefit of the
Parties hereto, and to their respective heirs, executors, beneficiaries,
personal representatives, successors and permitted assigns 


 


	
   

  	
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hereunder, but otherwise this Agreement shall
not be for the benefit of any third parties.


 


31.          Entire Agreement; Amendment and
Termination. This Agreement contains the entire agreement of the Parties hereto with
respect to the matters covered herein; moreover, this Agreement supersedes all
prior and contemporaneous agreements and understandings, oral or written,
between the Parties concerning the subject matter hereof. This Agreement may be
amended, waived or terminated only by a written instrument that is identified
as an amendment, waiver or termination hereto, and is executed by both Parties.


 


32.          Survival of Certain Provisions. Wherever appropriate to the intention of the
Parties, the respective rights and obligations of the Parties hereunder shall
survive any termination or expiration of this Agreement or Termination of
Employment.


 


33.          Waiver of Breach. No waiver by either Party hereto of a breach of
any provision of this Agreement by any other Party, or of compliance with any
condition or provision of this Agreement to be performed by such other Party,
will operate or be construed as a waiver of any subsequent breach by such other
Party or any similar or dissimilar provision or condition at the same or any
subsequent time. The failure of either Party hereto to take any action by
reason of any breach will not deprive such Party of the right to take action at
any time while such breach continues.


 


34.          Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of the
Company and its Affiliates (and its and their successors), as well as upon any person
or entity acquiring, whether by merger, consolidation, purchase of assets,
dissolution or otherwise, all or substantially all of the equity units,
business and/or assets of the Company (or its successor) regardless of whether
the Company is the surviving or resulting corporation. The Company shall
require any successor (whether direct or indirect, by purchase, merger,
consolidation, dissolution or otherwise) to all or substantially all of the
equity units, business or assets of the Company 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 occurred; provided, however, no such assumption shall relieve the Company
of any of its duties or obligations hereunder unless otherwise agreed, in
writing, by Executive.


 


This Agreement shall inure to the benefit of
and be enforceable by Executive’s personal or legal representative, executors,
administrators, successors, and heirs. In the event of the death of Executive
while any amount is payable hereunder, all such amounts shall be paid to the
Designated Beneficiary (as defined in Section 6(e)).


 


35.          Notice. Each notice or other communication required or
permitted under this Agreement shall be in writing and transmitted, delivered,
or sent by personal delivery, prepaid courier or messenger service (whether
overnight or same-day), or prepaid certified United States mail (with return
receipt requested), addressed (in any case) to the other Party at the address
for that Party set forth below that Party’s signature on this Agreement, or at
such other address as the recipient has designated by Notice to the other
Party.


 


Each notice or communication so transmitted,
delivered, or sent (a) in person, by courier or messenger service, or by
certified United States mail shall be deemed given, 


 


	
   

  	
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received, and effective on the date delivered
to or refused by the intended recipient (with the return receipt, or the
equivalent record of the courier or messenger, being deemed conclusive evidence
of delivery or refusal), or (b) by telecopy or facsimile shall be deemed
given, received, and effective on the date of actual receipt (with the
confirmation of transmission being deemed conclusive evidence of receipt,
except where the intended recipient has promptly notified the other Party that
the transmission is illegible). Nevertheless, if the date of delivery or
transmission is not a business day, or if the delivery or transmission is after
5:00 p.m. on a business day, the notice or other communication shall be
deemed given, received, and effective on the next business day.


 


36.          Executive Acknowledgment. Executive acknowledges (a) being knowledgeable
and sophisticated as to business matters, including the subject matter of this
Agreement, (b) having read this Agreement and understands its terms and
conditions, (c) having been given an ample opportunity to discuss this
Agreement with Executive’s personal legal counsel prior to execution and being
advised by the Company to do so, and (d) no strict rules of
construction shall apply for or against the drafter or any other Party.
Executive hereby represents that Executive is free to enter into this Agreement
including, without limitation, that Executive is not subject to any covenant
not to compete that would conflict with any of his duties under this Agreement.


 


37.          Counterparts. This
Agreement may be executed in any number of counterparts, each of which when so
executed and delivered shall be an original, but all such counterparts shall
together constitute one and the same instrument. Each counterpart may consist
of a copy hereof containing multiple signature pages, each signed by one party
hereto, but together signed by both parties.


 


38.          Section 409A.  This Agreement is intended to comply with Section 409A
of the Internal Revenue Code, to the extent applicable.  Notwithstanding any provisions herein to the
contrary, this Agreement shall be interpreted, operated, and administered
consistent with this intent. Notwithstanding any provision to the
contrary in the Agreement, payment of any termination benefits under this Agreement that are deemed
deferred compensation subject to Section 409A of the Code will be made when Executive’s termination of
employment constitutes a “separation from service” within the meaning of Treas.
Reg. Section 1.409A-1(h).  For
purposes of determining whether a “separation from service” within the meaning
of Treas. Reg. Section 1.409A-1(h) has occurred with respect to
deferred compensation under the Agreement, in applying Sections 1563(a)(1), (2) and
(3) of the Code for purposes of determining a controlled group of
corporations under Section 414(b) of the Code, “80 percent” shall be
used instead of “at least 80 percent” at each place the latter appears in
Sections 1563(a)(1), (2) and (3) of the Code; and, in applying Treas.
Reg. Section 1.414(c)-2 for
purposes of determining trades or businesses (whether or not incorporated) that
are under common control for purposes of Section 414(c) of the Code, “80
percent” shall be used instead of “at least 80 percent” at each place the
latter appears in Treas. Reg. Section 1.414(c)-2.  Notwithstanding any
provision to the contrary in the Agreement, if Executive is deemed at the time
of his separation from service to be a “specified employee” for purposes of Section 409A(a)(2)(B)(i) of
the Code, to the extent delayed commencement of any portion of the termination
benefits to which Executive is entitled pursuant to this Agreement is required in order to avoid a prohibited
distribution under Section 409A(a)(2)(B)(i) of the Code, such portion of Executive’s termination
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the earlier of (i) the expiration of the
six-month period measured from the date of his “separation from service” with
the Company (as such term is defined in the Treasury Regulations issued under Section 409A of the Code) or (ii) the
date of Executive’s death. Upon the expiration of the applicable Code Section 409A(a)(2)(B)(i) deferral
period, all payments deferred pursuant to this Section 38 shall be
paid in a lump sum to Executive, and any remaining payments due under the
Agreement shall be paid as otherwise provided herein.


 


39.          Indemnity.
Company and its Affiliates shall defend, hold harmless and indemnify Executive
from and against any and all claims, losses, actions, lawsuits, damages,
judgments and/or costs arising out of or in any manner related to Executive’s
relationship with Company and its Affiliates, including but not limited to
claims sounding in breach of contract, tort, breach of any international
treaty, federal or state statute and whether alleging death, personal injury,
property damage, economic damages, non-economic damages or equitable relief, or
any combination thereof; provided, however, that such claims relate to
Executive’s acts or omissions that are within the scope of his employment with
the Company and/or any services performed for its Affiliates. This indemnity provision is expressly intended to
apply to any and all claims, losses, actions, lawsuits, damages, judgments
and/or costs, including but not limited to, those alleging misconduct,
negligence, and/or gross negligence against Executive, whether such negligence
and/or gross negligence was (i) the sole proximate cause of the alleged
injury or (ii) a proximate cause jointly and concurrently with the Company
or its Affiliates, and Company and its Affiliates expressly acknowledge their
intent and agreement to be so bound; provided, however such indemnity shall not
be applicable if a court of competent jurisdiction, or arbitrator pursuant to Section 29,
should determine that an act or omission by Executive constituting gross
negligence or intentional misconduct was the sole cause of the event resulting
in the indemnification claim hereunder. Notwithstanding the above,
no reimbursement shall be made for attorneys’ fees and expenses incurred by
Executive unless the related claim commences within the applicable statute of
limitations period, and no such reimbursement shall be made later than the last
day of the calendar year following the calendar year in which such expense is
incurred. This Section 39 
shall be in addition to, and not in limitation of, any indemnity or
other rights of the Executive from the Company or any other person or entity,
either under law, contract or otherwise.


 


[Signature page follows.]


 


	
   

  	
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IN WITNESS WHEREOF, Executive has executed,
and Company has caused this Agreement to be executed in its name and on its
behalf by its duly authorized officer, to be effective as of the Effective Date.


 


 


	
  WITNESS:

  	
   

  	
  EXECUTIVE:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Signature:

  	
  /s/ Suzanne Todd

  	
   

  	
  Signature:

  	
   /s/
  Lance Lord

  
	
   

  	
   

  	
   

  	
  Lance Lord

  
	
   

  	
   

  	
   

  
	
  Name: Suzanne Todd

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date: December 3, 2008

  	
   

  	
  Date: December 3, 2008

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address for
  Notices:

  
	
   

  	
   

  	
  1110 Trumpeters Court E

  
	
   

  	
   

  	
  Monument, CO 80132

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ATTEST:

  	
   

  	
  COMPANY:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SPACEHAB, INC.

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Virginia Wise

  	
   

  	
  By:

  	
  /s/ Thomas B. Pickens, III

  
	
   

  	
  Name:
  Virginia Wise

  	
   

  	
   

  	
  Thomas B.
  Pickens, III,

  
	
   

  	
  Title:
  Executive Assistant

  	
   

  	
   

  	
  Chairman
  of the Board and

  
	
   

  	
   

  	
   

  	
   

  	
  Chief
  Executive Officer

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date: January 8, 2009

  	
   

  	
  Date: January 8, 2009

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address for
  Notices:

  
	
   

  	
   

  	
  907 Gemini Avenue

  
	
   

  	
   

  	
  Houston, Texas 77058

  
	
   

  	
   

  	
  Attention: Secretary

  
							



 


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