This EMPLOYMENT
AGREEMENT (the “Agreement”), dated and entered into as
of September 24, 2008, by and between FirstFlight, Inc. dba
FirstFlight (the “Company”), and Gary E. Hart
(“Executive”).
WHEREAS, the
Company wishes to employ Executive and Executive wishes to be
employed by the Company, on the terms and conditions set forth
below.
THEREFORE, the
parties agree as follows:
1. Employment Duties. During the Term (as defined in
paragraph 2 below), the Company will employ Executive as Chief
Operating Officer and Senior Vice President of FirstFlight, Inc.
Executive will devote substantially all of his business time and
attention to the performance of his duties under this Agreement.
Executive shall have the duties, rights and responsibilities
normally associated with his position with the Company, together
with such other reasonable duties consistent with Executive’s
position and relating to the operation of the business of the
Company as may be assigned to him from time to time by the Chief
Executive Officer or Board of Directors. Executive hereby agrees to
promote and develop all business opportunities that come to his
attention relating to the current or anticipated future aviation
business of the Company, in a manner consistent with the best
interest of the Company and with his duties under this Agreement.
As used herein, the term “business opportunity” shall
not include business opportunities involving investment in publicly
traded stocks, bonds or other securities, or other investments of a
non-aviation nature.
2. Term. The term of Executive’s employment under
this Agreement (the “Term”) will begin on
September 29, 2008 and will continue, subject to the
termination provisions set forth in paragraph 5 below, until the
second anniversary of such date; provided, however, that this
Agreement will automatically renew for additional one-year periods
unless either party gives written notice to the other not to extend
the Term not less than 90 days prior to the then next upcoming
expiration date.
a. Salary.
During each year of the Term, Executive will receive a salary at
the annual rate of two hundred thousand dollars ($200,000.00) (the
“Base Salary”). The Base Salary shall be payable in
equal bi-weekly installments or in period consistent with that of
other executives of the Company. The Board of Directors of the
Company may increase such salary at any time and from time to
time.
b. Bonus
& Incentive Payments. Any bonus or incentive payments shall be
at the sole discretion of the Board of Directors, taking into
account the performance of the Company and Executive.
4. Fringe
Benefits. In addition to the other compensation payable pursuant to
this Agreement during the Term:
a. Standard
Benefits. Executive will be entitled to receive such fringe
benefits and perquisites, including medical and life insurance, as
are generally made available from time to time to senior management
employees and executives of the Company and to participate in any
pension, profit-sharing, stock option or similar plan or program
established from time to time by the Company for the benefit of its
senior management employees, provided, that such benefits,
perquisites and plans shall be at the same level or better, in the
aggregate, than those made available generally to similarly
situated employees of the Company. Without limiting the generality
of the foregoing, the Company agrees to (i) pay premium
expenses on behalf of Executive and family for medical, dental and
vision insurance coverage; (iii) provide and pay for term life
insurance insuring the life of Executive during the term of this
Agreement in the amount of one million dollars ($1,000,000.00),
with one-half (1/2) of the proceeds thereof directed to such
beneficiary or beneficiaries as Executive may from time to time
appoint and one-half (1/2) the proceeds thereof directed to the
Company.
b. Vacation.
In addition to standard Company holidays, Executive shall be
entitled each year to a vacation of three (3) weeks, during
which time his compensation shall be paid in full. Each vacation
shall be taken at such time so as to minimize its effect on the
operations of the Company.
c. Business
Expenses. The Company will pay or reimburse Executive for all
business-related expenses incurred by Executive in the course of
his performance of duties under this Agreement, in accordance with
Company policies generally applicable to senior management
employees and executives of the Company subject to the procedures
established by the Company from time to time with respect to
incurrence, substantiation, reasonableness and approval. The
Company will provide the executive a $700 per month car
allowance.
d. Stock
Options. Executive shall be entitled to receive an Option to
purchase shares of the Company’s Common Stock, par value
$0.001 per share (the “Common Stock”), as
follows:
|
|
|
|
|
250,000 shares
on the first anniversary of the date hereof; and
250,000 shares on the second anniversary of the date
hereof
|
|
|
The price for each
tranche shall be the fair market value of the Common Stock as of
the close of business on the day immediately preceding each
respective grant date, but in no event shall be less than ($0.60)
sixty cents per share. Each tranche shall be vested after one year
and the executive will have five years to acquire the stock from
the date of vesting. So long as it may be done lawfully, the manner
of acquisition of stock shall be structured as to minimize adverse
tax consequences to Executive.
Additional options
may be granted by the Compensation Committee of the Board of
Directors of the Company at its discretion.
5. Termination of Employment.
a. Death and
Disability. Executive’s employment under this Agreement will
terminate immediately upon his death and upon 30 days’
prior written notice given by the Company in the event Executive is
determined to be “permanently disabled” (as defined
below).
b. For Cause.
The Company may terminate Executive’s employment under this
Agreement for “Cause” (as defined below), upon
providing Executive 30 days’ prior written notice of
termination, which notice will describe in detail the basis of such
termination and will become effective on the 31st day after
Executive’s receipt thereof unless Executive reasonably cures
the alleged violation or other circumstance which was the basis of
such termination within such 30-day notice period; provided,
however, that the termination for “Cause” under
subparagraphs 5(f)(ii)(B), (C), (E) or (F) thereof shall
be effective immediately upon the giving of the notice of
termination and may not be cured by any act or event.
c. For Good
Reason. Executive may terminate his employment under this Agreement
for “Good Reason” (as defined below) upon providing the
Company 30 days’ prior written notice of termination,
which notice will detail the basis of such termination and will
become effective on the 30th day after the Company’s receipt
thereof, unless the Company cures the alleged violation or other
circumstance which was the basis of such termination within such
30-day notice period.
d. Without
Cause. The Company may terminate Executive’s employment under
this Agreement without “Cause” at any time upon thirty
(30) days written notice to the Executive.
e. Change of
Control. Notwithstanding anything to the contrary, the Company or
Executive may terminate this Agreement upon ten
(10) days’ notice to the other party upon the occurrence
of a “Change of Control” (as defined below).
f. Definitions.
For purposes of this Agreement:
(i) Executive
will be deemed “permanently disabled” if he becomes
unable to discharge his normal duties as contemplated under this
Agreement for at least four months during any eight-month period as
a result of incapacity due to mental or physical illness as
determined by a physician acceptable to Executive and the Company
and paid by the Company, whose determination will be final and
binding. If Executive and the Company are unable to agree on a
physician, Executive and the Company will each choose one physician
who will mutually choose the third physician, whose determination
will be final and binding.
(ii)
“Cause” means either (A) a breach by Executive of
any material provisions of this Agreement, but only if, after
notice provided in subparagraph (b) above, Executive fails to
cure such breach to the reasonable satisfaction of the Company;
(B) conviction
of a felony
offense, whether or not such offense was committed in connection
with the Company’s business; (C) theft, embezzlement,
intentional or reckless false entries on records, intentional or
reckless misapplication of funds or property, misappropriation of
any asset, or any actual or constructive fraud; (D) gross
neglect of duty and/or willfully engaging in gross misconduct
materially and demonstrably injurious to the Company; (E) at
any time during employment at the Company, intentionally or
recklessly imparting confidential information, whether proprietary
or non-proprietary, to any person other than (i) an authorized
employee of the Company; or (ii) as required by law, or
(iii) as part of a privileged communication to an attorney; or
(F) receiving, during the term of this Agreement,
compensation, income, anything of value, or a future interest in or
future entitlement to compensation, income or a thing of value,
from any person or entity who or which is engaged in the same or
substantially the same business as the Company in the same product,
service or geographical market, except stock dividends and/or
capital gains from passive investments in financial institutions by
Executive made in the ordinary course of business and as part of
Executive’s investment portfolio.
(iii)
“Good Reason” means a breach by the Company of any of
its material obligations under this Agreement, but only if after
expiration of the 30-day notice period provided in subparagraph (c)
above, the Company fails to cure such breach.
(iv)
“Change of Control” means the occurrence of:
|
|
(a)
|
|
the
sale by the Company of fifty-one percent (51%) of its assets to a
single purchaser or to a group of associated purchasers;
|
|
|
|
|
|
|
|
(b)
|
|
the
merger or consolidation of the Company in a transaction in which
the stockholders of the Company receive less than fifty percent
(50%) of the outstanding voting shares of the new or continuing
corporation; or
|
|
|
|
|
|
|
|
(c)
|
|
the
sale, exchange, or other disposition, in one transaction, of at
least fifty-one percent (51%) of the outstanding shares of the
Company.
|
6. Benefits upon Termination.
a. Termination
with Cause or Resignation. Upon termination of Executive’s
employment by the Company for Cause or a voluntary resignation by
Executive (other than for Good Reason pursuant to paragraph 5(c)
above) during the Term, the Company will remain obligated to pay
Executive only the unpaid portion of his Base Salary and benefits
to the extent accrued through the effective date of termination.
Any amount due under this subparagraph will be payable within
30 days after the date of termination. In addition to whatever
other rights or remedies the Company may have at law or in equity,
all unvested stock options held by Executive, shall immediately
ex
|
