by Douglas Messier
A provision in George Whitesides’ contract has Virgin Galactic’s chief space officer — and possibly his wife, Loretta Hidalgo Whitesides — flying on one of SpaceShipTwo’s early suborbital flights from Spaceport America in New Mexico.
“The parties acknowledge and agree that the Executive shall join the first or second rocket-powered spaceflight from New Mexico with non-pilots onboard (which may include a test spaceflight) in connection with the performance of his duties hereunder; in addition, the Executive’s spouse shall be entitled to join a spaceflight (which may include a test spaceflight),” the agreement said.
Virgin Galactic filed Whitesides’ revised contract with the Securities and Exchange Commission (SEC) in July. Whitesides transitioned to the position of chief space officer when the company hired former Disney executive Michael Colglazier to replace him as CEO.
Last month, Virgin Galactic announced that it planned to fly SpaceShipTwo VSS Unity on its first suborbital flight test from Spaceport America this fall. That flight will include two pilots and a load of microgravity experiments.
That launch would be followed by a flight with two pilots and four non-paying test subjects to evaluate the experience in the passenger cabin. Whitesides and his wife, Loretta, could join that flight.
If the two flight tests go well, Virgin Galactic plans to fly founder Richard Branson on the first operational launch in the first quarter of 2021.
Whitesides and his wife reserved their tickets on SpaceShipTwo in 2005 — the year after Branson unveiled plans for the air-launched, suborbital space tourism vehicle. They were among the first 100 people to reserve seats.
VSS Unity has made two suborbital flight tests above 50 miles. The most recent launch, which included Chief Astronaut Trainer Beth Moses in the cabin, occurred 18 months ago in February 2019 from the Mojave Air and Space Port in California.
VSS Unity was moved to its operational base at Spaceport America in February 2020. Virgin Galactic has conducted two glide flights from the New Mexico facility during which the vehicle has been dropped from the WhiteKnightTwo VMS Eve mother ship.
Under his contract, Whitesides is paid $450,000 per year as chief space officer. He is eligible for a bonus targeted at 50 percent of the base salary.
Whitesides will also receive a lump sum cash payment of $500,000 following a successful commercial flight of VSS Unity.
“For purposes of this Agreement, “Commercial Launch” means the first powered flight of Spaceship Unity that (i) attains an altitude of at least 50 miles with four fare-paying passengers on board and (ii) safely returns to base with all major systems functioning nominally throughout the flight,” the contract stated.
The amended employment agreement also increased Whitesides stock options and grants.
PubCo shall grant the Executive a nonqualified option to purchase an aggregate of 320,840 shares of PubCo common stock (the “New Option”). The New Option shall have an exercise price per share equal to the Fair Market Value on the applicable grant date and shall have an outside expiration date of ten years from the grant date.
In addition, PubCo shall grant the Executive a restricted stock unit award covering 320,840 shares of PubCo common stock (the “New RSU Award”).
The new stock options will vest in roughly equal amounts over 24 monthly installments. The new RSU award will vest over eight quarters.
When Virgin Galactic went public last October, Virgin Galactic granted Whitesides an initial option to purchase 641,681 shares. He also received an initial RSU award of 194,844 shares in December 2019.
Each of the Initial Option and the Initial RSU Award shall vest and (as applicable) become exercisable (x) with respect to 25% of the underlying shares on October 25, 2020, and (y) as to the remaining 75% of the underlying shares, in substantially equal installments on each of the 36 monthly anniversaries thereafter.
Notwithstanding the foregoing, the parties agree that if the Executive remains employed with the Company hereunder on March 15, 2021 (and an event constituting Cause has not occurred by such date), then the vesting of the Initial RSU Award shall accelerate in full on March 15, 2021.
In total, Virgin Galactic has granted Whitesides the option to purchase 962,521 of common stock. The RSU stock grants total 515,684 shares.
Virgin Galactic (SPCE) stock was worth at $16.02 in after hours trading on Friday.
Virgin Galactic also agreed to reimburse Whitesides for up to $15,000 for the cost of renegotiating the employment agreement when he transitioned to chief space officer.