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Exhibit 10.37
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") originally made and
entered into as of April 30, 2005 by and between MESA AIR GROUP,
INC., a Nevada corporation (the "Company"), and Brian S. Gillman
(the "Executive"), as amended, is hereby amended and restated
effective January 1, 2009.
WITNESSETH:
1. EMPLOYMENT
The Company hereby employs the Executive, and the Executive
hereby accepts such employment, upon the terms and subject to the
conditions set forth in this Agreement.
2. TERM
Subject to the provisions for termination as hereinafter
provided, the term of employment under this Agreement shall begin
on the date hereof and shall continue for a term of six years,
provided, however, that if the Company fails to give one hundred
eighty days written notice prior to the date of termination, the
term of this Agreement shall automatically be extended for
additional one hundred eighty day periods.
3. COMPENSATION
3.1 Base Salary. The Company shall pay to the Executive as basic
compensation for all services rendered by the Executive during the
term of this Agreement as basic annualized salary of $125,000
through September 30, 2005, and $130,000 through September 30,
2006, and $135,000 through November 14, 2007, and $190,000
effective November 15, 2007, or such other sum in excess of that
amount as the parties may agree on from time to time or as provided
in the last sentence of this Section 3.1 (as in effect from time to
time, the "Base Salary"), payable bi-weekly or in other more
frequent installments, as determined by the Company. The Company
shall have no authority to reduce the Executive's Base Salary in
effect from time to time. In addition, the Company, in its
discretion, may award a bonus or bonuses to the Executive in
addition to the bonuses provided for in Section 3.2, provided,
however, such discretionary bonus shall not be included in the
definition of "Base Salary." Annually, the Company shall review the
Base Salary and increase it as it deems appropriate.
3.2 Bonuses. In addition to the Base Salary to be paid pursuant
to Section 3.1, the Company shall pay the Executive as incentive
compensation a bonus. The bonus will be a minimum of thirty (30%)
of Base Salary, which will be paid quarterly if Company is
profitable. In addition, Executive shall be eligible to receive and
the Company shall pay to the Executive an additional bonus
(including the minimum bonus) in the aggregate of 31% to 100% of
the Executive's Base Salary at such time that the Board grants
similar bonuses to other executives of the Company.
3.3 Stock Option/Restricted Stock Award. Each year during the
term of this Agreement on the anniversary date of this Agreement,
the Company shall issue options of not fewer than 20,000 shares of
common stock of the Company (adjusted appropriately for any stock
dividend,
stock split, spin-off,
reorganization, or similar transaction) or restricted stock or
other equity equivalent with a similar vesting schedule in an
amount designed to achieve the same underlying value to the
Executive. With respect to Stock Options, the underlying shares of
Common Stock of which will be registered on Form S-8 or any
successor form, at an exercise price per share, which is no greater
than the market price on the grant date The term will be for a term
of ten years from the date of grant and, except as otherwise
provided (but in no event shall the vesting schedule be more
restrictive than as set forth in this Agreement), shall vest
one-third annually.
3.4 Other Benefits. The Executive shall be entitled to such
fringe benefits including, but not limited to, medical and other
insurance benefits (for the Executive and his family), positive
space airline travel benefits on the Company's airline, as may be
provided from time to time by the Company to other senior
management of the Company. The Company will use its commercially
reasonable efforts to obtain from other airlines the same benefits
for the Executive as the Company provides to executive officers of
other airlines.
3.5 Expenses. The Company shall reimburse the Executive, in
accordance with the Company's policies and practices for senior
management, for all reasonable expenses incurred by the Executive
in the performance of the Executive's duties under this
Agreement.
3.6 Reimbursement. The Company shall reimburse Executive for his
out-of-pocket costs incurred in connection with the retention of
professionals by Executive to provide Executive with income tax,
estate planning, and investment advisory services. The maximum
amount of reimbursable expenses for such purposes shall be $1,000
for each calendar year during the term of this Agreement. The
amount that is not used each calendar year shall be forfeited and
shall not carry over to be used in any subsequent year. The Company
shall reimburse Executive for such costs promptly after Executive
submits an invoice to Company. In order to preserve Executive's
rights to confidentiality, Executive may satisfy the requirement of
submitting an invoice by providing the Company with a copy of the
facing page of the invoice showing the fees and expenses for the
services rendered and the general nature of the services rendered
but without any detail concerning the substance of the services
rendered.
3.7 Other Incentive and Benefit Plans. The Executive shall be
eligible to participate, in accordance with the terms of such plans
as they may be adopted, amended and administered from time to time,
in incentive, bonus, benefit or similar plans, including without
limitation, any stock option, bonus or other equity ownership plan,
any short, mid or long term incentive plan and any other bonus,
pension or profit sharing plans established by the company from
time to time.
3.8 Deferred Compensation. On November 15, 2007 and on March 31
of each year thereafter during the term of the Agreement, the
Company shall contribute $50,000 for the benefit of Executive under
a Deferred Compensation Plan mutually acceptable to Executive and
the Company.
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4. DUTIES
The Executive is engaged as the Executive Vice President,
General Counsel and Secretary of the Company. The Executive's
duties and responsibilities shall be commensurate with those
customarily associated with the Executive Vice President and
General Counsel of a publicly traded Company, including such other
duties as from time to time may be assigned by the Chairman of the
Board, Chief Executive Officer or by the directors.
5. VACATIONS AND DAYS OFF
The Executive shall be entitled to vacations with pay and to
such personal and sick leave with pay in accordance with the policy
of the Company as may be established from time to time by the
Company and applied to other senior officers of the Company. In no
event shall the Executive be entitled to less than three week's
annual vacation. Vacation days that accrue during the calendar year
but are unused during that year will be cashed out in January of
the next year. Accrued but unpaid vacation and holidays as of
December 31, 2008, will be paid in January 2009.
6. ILLNESS OR INCAPACITY, TERMINATION ON DEATH, ETC.
6.1 Death. If the Executive dies during the term of Executive's
employment, the Company shall pay to the estate of the Executive
within 30 days after the date of death such Base Salary and any
cash bonus compensation earned pursuant to the provisions of this
Agreement or any incentive compensation plan then in effect but not
yet paid, as would otherwise have been payable to the Executive up
to the end of the month in which the Executive's death occurs.
After receiving the payment provided in this Section 6.1, the
Executive and the Executive's estate shall have no further rights
under this Agreement (other than those rights already accrued).
6.2 Disability. During any period of disability, illness or
incapacity during the term of this Agreement which renders the
Executive at least temporarily unable to perform the services
required under this Agreement, the Executive shall receive the Base
Salary payable under Section 3.1 of this Agreement plus any cash
bonus compensation earned pursuant to the provisions of this
Agreement or any incentive compensation plan then in effect but not
yet paid, less any cash benefits received by him under any
disability insurance carried by or provided by the Company. Upon
the Executive's "Permanent Disability" (as defined below), which
Permanent Disability continues during the payment periods specified
herein, the Company shall pay to the Executive for the period of
time specified below an amount (the "Disability Payment") equal to
the (i) sum of (A) the Base Salary paid in the same bi-weekly or
other period installments as in effect at the time of the
Executive's Permanent Disability plus (B) an amount equal to the
Minimum Bonus payable to the Executive under Section 3.2 of this
Agreement or the minimum amount of any similar bonus or incentive
plans or programs then in effect if greater than the Minimum Bonus
in respect of the fiscal year during which the Executive's
Permanent Disability occurred, which amount, in any event, shall be
paid in pro rata equal bi-weekly installments over the period of
time specified below (ii) reduced by the amount of any monthly
payments under any policy of disability income insurance paid for
by the Company which payments are received during the time when any
Disability Payment is being made to the Executive following the
Executive's Permanent Disability. For so long as the
Executive's
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Permanent Disability continues, the
Disability Payment shall be paid by the Company to the Executive in
equivalent installments at the same time or times as would have
been the case for payment of Base Salary over the unexpired term of
this Agreement if the Executive had not become permanently disabled
and had remained employed by the Company hereunder, but in no case
shall such period be less than 24 months. The Executive may be
entitled to receive payments under any disability income insurance
which may be carried by or provided by the Company from time to
time. Upon "Permanent Disability" (as that term is defined in
Section 6.2(ii) below) of the Executive, except as provided in this
Section 6.2, all rights of the Executive under this Agreement
(other than rights already accrued or the Executive's rights under
Section 3.7) shall terminate.
(ii) The term "Permanent Disability" as used in this Agreement
shall mean (a) that the Executive is unable to engage in any
substantial gainful activity by reason of any medically
determinable physical or mental impairment that can be expected to
result in death or can be expected to last for a continuous period
of not less than 12 months, or (b) if applicable, that for at least
three months the Executive is receiving income replacement benefits
under a Company sponsored plan by reason of any medically
determinable physical or mental impairment expected to last at
least twelve consecutive months or result in death, or (c) the
Executive is determined to be disabled under a Company disability
plan with the same or substantially similar definition of
disability, as described in Section 409A (defined below). After a
determination of Permanent Disability, the Board of Directors may
terminate the Executive's employment under this Agreement upon ten
(10) days' prior written notice. If any determination of the Board
of Directors with respect to permanent disability is disputed by
the Executive, the parties hereto agree to abide by the decision of
a panel of three physicians. The Executive and Company shall each
appoint one member, and the third member of the panel shall be
appointed by the other two members. The Executive agrees to make
himself available for an submit to examinations by such physicians
as may be directed by the Company. Failure to submit to any such
examination shall constitute a breach of a material part of this
Agreement.
7. OTHER TERMINATIONS
7.1 By the Executive. (i) The Executive may terminate the
Executive's employment hereunder upon giving at least ninety (90)
days' prior written notice. In addition, the Executive shall have
the right to terminate the Executive's employment hereunder on the
conditions and at the times provided for in Section 7.4 of this
Agreement.
(ii) If the Executive gives notice pursuant to the first
sentence of Section 7.1(i) above, the Company shall have the right
(but not the obligation) to relieve the Executive, in whole or in
part, of the Executive's duties under this Agreement, or direct the
Executive to no longer perform such duties, or direct that the
Executive should no longer report to work, or any combination of
the foregoing. In any such event, the Executive shall be entitled
to receive only the Base Salary not yet paid, as would otherwise
have been payable to the Executive up to the end of the month
specified as the month of termination in the termination notice. If
the Executive gives notice pursuant to the first sentence of
Section 7.1(i) above but specifies a termination date in excess of
ninety (90) days from the date of such notice, the Company shall
have the right (but not the obligation) to accelerate the
termination date to any date prior to the date specified in the
notice that is in excess of ninety (90) days from the date of the
notice, and
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the Company shall have the right
(but not the obligation) to relieve the Executive, in whole or in
part, of the Executive's duties under this Agreement, or direct the
Executive to no longer perform such duties, or direct that the
Executive should no longer report to work, or any combination of
the foregoing; provided, however, that in any such event the
Executive shall be entitled to receive the Base Salary, as would
otherwise have been payable to the Executive up to the end of the
month of the termination date properly selected by the Company. If
the Executive gives notice pursuant to the first sentence of
Section 7.1(i), upon receiving the payments provided for under this
Section 7.1, all rights of the Executive under this Agreement
(other than rights already accrued or the Executive's rights under
Section 3.7) shall terminate.
7.2 Termination for "Good Cause." (i) Except as otherwise
provided in this Agreement, the Company may terminate the
employment of the Executive hereunder only for "good cause," which
shall mean the termination of employment of Employee because of
Employee's personal dishonesty, willful misconduct, breach of
fiduciary duty involving personal profit, intentional failure to
perform stated duties (including failure to travel to the Company's
headquarters to the extent necessary to complete his duties),
willful violation of any material law, rule or regulation resulting
in the Company's detriment or reflecting upon the Company's
integrity (other than traffic infractions or similar minor
offenses) or a material breach by the Employee of the terms of this
Agreement and failure to cure such breach within thirty (30) days
after receipt of written notice from the Company specifying the
nature of such breach or to pay compensation to the Company deemed
reasonable by the Company if the breach cannot be cured.
(ii) If the employment of the Executive is terminated for good
cause under Section 7.2(i) of this Agreement, the Company shall pay
to the Executive any Base Salary earned prior to the effective date
of termination but not yet paid and any such cash bonus
compensation earned pursuant to the provisions of this Agreement or
any incentive compensation plan then in effect but not paid to the
Executive prior to the effective date of such termination. Under
such circumstances, such payments shall be in full and complete
discharge of any and all liabilities or obligations of the Company
to the Executive hereunder, and the Executive shall be entitled to
no further benefits under this Agreement (other than rights already
accrued or the Executive's rig
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