EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this
“
Agreement ”)
is made as of May 29, 2008, between MITCHELL BLATT, a resident of
New York (the “
Executive ”),
and HALCYON
JETS HOLDINGS, INC., a
Delaware corporation (the “
Company ”).
RECITALS
WHEREAS,
the Company desires to employ the Executive, and the Executive
desires to enter into such employment with the Company, upon
the terms and conditions hereinafter set forth.
NOW,
THEREFORE, in consideration of the mutual covenants and
promises contained herein, the parties hereto, each intending
to be legally bound hereby, agree as follows:
1.
Employment; Duties; Location .
(a)
Employment; Duties .
On the terms and subject to the conditions set forth herein, the
Company hereby agrees to employ the Executive as Chief Executive
Officer and Chairman of the Company’s board of directors (the
“Board”), and the Executive hereby agrees to accept
such employment, for the Employment Term (as defined in Section 4).
The Executive shall have such authorities, duties and
responsibilities as are usual and customary for a Chief Executive
Officer of a public company and all other duties and
responsibilities as may from time to time be directed by the Board
and as are consistent with the positions of Chief Executive Officer
and Chairman of the Board. The Executive shall report exclusively
and directly to the Board. The Executive shall also serve in the
same positions for all of the Company’s subsidiaries with no
additional compensation to be paid to the Executive for his
services in such positions.
(b)
Location .
The locations at which the Executive will perform his duties under
this Agreement shall be the Company’s executive offices
(which are located in New York City, Boca Raton, Florida and
Beverly Hills, California), subject to reasonable travel required
to perform his duties under this Agreement.
2.
Performance .
During the Employment Term, the Executive agrees to devote his full
business time and attention to the business and affairs of the
Company and the discharge of his responsibilities hereunder
(excluding periods of vacation and sick leave);
provided that
the Executive may (a) engage in or serve such professional, civic,
trade association, charitable, community, educational, religious or
similar types of organizations, or speaking engagements, or serve
on the boards of directors or advisory committees of any charitable
or not-for-profit entities; (b) with the prior written consent of
the Company, such consent not to be unreasonably withheld, serve on
the boards of directors or advisory committees of any for-profit
business entities; and (c) attend to the Executive’s personal
matters and/or the Executive’s and/or his family’s
personal finances, investments and business affairs. The Executive
shall be permitted to retain all compensation in respect of any of
the services or activities referred to above.
3.
Compensation and Benefits .
(a)
Base Salary .
The Company shall pay the Executive a base salary at an annual rate
of Three Hundred Thousand Dollars ($300,000) (the “
Base Salary ”).
The Base Salary shall be paid in accordance with the normal payroll
practices for executives of the Company as in effect from time to
time, but in no event less often than monthly.
(b)
Bonus .
The Executive shall be eligible for a discretionary bonus as
determined by the Compensation Committee of the Board.
(c)
Business Expenses .
The Company shall promptly reimburse the Executive for all travel,
entertainment and other business expenses incurred by the Executive
in the performance of his duties to the Company;
provided ,
that such expenses are incurred and accounted for in accordance
with the policies and procedures established by the Company
applicable to senior executives generally. The Company will also
reimburse the Executive for automobile expenses such as fuel,
parking and tolls and for cell phone and PDA expenses.
(d)
Vacation .
The Executive shall be entitled to six (6) weeks paid vacation per
year in accordance with the Company’s policies and procedures
applicable to senior executives generally and with the timing to be
consistent with the needs of the business of the
Company.
(e)
Employee Benefits and Fringe Benefits .
The Executive shall be entitled to receive employee benefits (with
dependent coverage), including life insurance, health, medical,
hospitalization, dental and prescription drug benefits, and travel
accident insurance, and fringe benefits and perquisites in
accordance with the plans, practices, programs and policies of the
Company in effect for its senior executives from time to time. The
Company will reimburse the Executive for all “COBRA”
healthcare continuation coverage expenses actually incurred by the
Executive (including with respect to coverage for his dependents)
from the Commencement Date until the Executive and his dependents
are eligible to participate in the Company’s medical, dental
and vision insurance plans, within ten (10) days after incurring
such expenses. In the event that the Executive elects not to
participate in the Company’s health, medical,
hospitalization, dental and prescription drug insurance plan or
program (to the extent the Company makes such benefits available to
its senior management personnel), other than due to an election for
reimbursement of COBRA continuation coverage pursuant to the
immediately preceding sentence, then the Company will pay to the
Executive an amount equal to the amount of expense it would have
incurred had the Executive elected to participate in such plan or
program.
(f)
Stock Option, Savings and Retirement Plans .
Additionally, the Executive shall be entitled to participate, to
the extent determined by the Compensation Committee of the Board,
in all stock incentive plans and all qualified and nonqualified
pension, savings and retirement plans, practices, policies and
programs (if any) generally applicable to other senior executives
of the Company on terms and conditions generally applicable to such
executives from time to time. The Executive shall be granted
assignable warrants to purchase one million (1,000,000) shares of
the common stock of the Company, which warrants (the
“Warrants”) shall have an exercise price of $.38 per
share. The Warrants shall vest in two (2) equal portions; 50% of
the Warrants shall vest on the Commencement Date (as defined
below), and 50% of the Warrants shall vest on the first anniversary
of the Commencement Date provided that the Executive is then
employed by the Company. Upon changes in the Company’s
outstanding common stock by reason of a stock dividend, stock
split, reverse stock split, subdivision, recapitalization, merger,
consolidation, combination or exchange of shares, separation or
reorganization, the number, class and kind of shares and exercise
price subject to the Warrants shall be correspondingly adjusted. In
the event of termination of employment by the Executive for Good
Reason (as defined in Section 5(b)), by the Company without Cause
(as defined below) or in the event of a Change of Control (as
defined below), all stock option, restricted stock and other
stock-based awards held by the Executive or any permitted
transferee thereof shall automatically and immediately become fully
vested, all restrictions applicable to restricted stock and other
stock-based awards shall immediately lapse, and all stock options
and other awards shall be fully exercisable and remain exercisable
for their full term. In the event that the shares issuable upon
exercise of the Warrants have not been registered under the
Securities Act of 1933, as amended, within six (6) months following
the Commencement Date, the Warrants shall include a provision that
allow them to then become exercisable on a “cashless”
basis.
(g)
Change of Control .
Upon a Change of Control (as defined below), the Executive will be
entitled to an additional bonus payment in an amount equal to two
(2) times the Executive’s Base Salary then in effect, payable
within thirty (30) days after such Change of Control. As used in
the preceding sentence, a “Change of Control” means (i)
any “person” (including any group of persons), as such
term is used in Sections 13(d) and 14(d) of the Securities Exchange
Act of 1934, as amended (the “
Exchange Act ”)
(other than any trustee or other fiduciary holding securities under
an employee benefit plan of the Company), is or becomes the
“beneficial owner” (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, after the date hereof, of
securities of the Company representing more than fifty percent
(50%) of the combined voting power of the Company’s then
outstanding securities; (ii) individuals who at the Commencement
Date constitute the Board, and any new director (other than a
director (x) designated by a person who has entered into an
agreement with the Company to effect a transaction described in
clause (i), (iii) or (iv) of this subparagraph, or (y) whose
initial assumption of office occurs as a result of an actual or
threatened election contest with respect to the election or removal
of directors or other actual or threatened solicitation of proxies
or consents by or on behalf of a “person” (as
hereinabove defined) other than the Board) whose election by the
Board or nomination for election by the Company’s
shareholders was approved by a vote of at least two-thirds of the
directors then still in office who either were directors at the
beginning of the period or whose election or nomination for
election was previously so approved, cease for any reason to
constitute at least a majority thereof; (iii) a merger,
reorganization or consolidation of the Company, other than a
merger, reorganization or consolidation which results in (A) the
beneficial owners (as hereinabove defined) of the voting securities
of the Company outstanding immediately prior thereto continuing to
beneficially own voting securities that represent (either by
remaining outstanding or by being converted into voting securities
of the surviving entity) more than 50% of the combined voting power
of the voting securities of the Company or such surviving entity
outstanding immediately after such merger, reorganization or
consolidation, and (B) no “person” (as hereinabove
defined) acquiring more than fifty percent (50%) of the combined
voting power of the Company’s then outstanding securities;
(iv) a sale or disposition by the Company of all or substantially
all of the Company’s assets or business to an unaffiliated
third party; or (v) a liquidation or dissolution of the Company;
provided that the events referred to in clauses (i), (iii), (iv)
and (v) shall constitute a Change of Contol if the Common Stock of
the Company is valued at less than Five Dollars ($5.00) per share,
subject to adjustment in the event of any stock dividend, stock
split or re-capitalization of the Company.
(h)
Comparable Treatment .
The Executive and, as applicable, his family shall be entitled to
material terms of his employment, including without limitation
compensation, employee benefits, life insurance, health, medical,
hospitalization, dental and prescription drug benefits, and travel
accident insurance, and fringe benefits and perquisites in
accordance with the most favorable terms, benefits, plans,
practices, programs and policies of the Company (on the most
favorable terms and conditions) in effect for its senior executives
from time to time, which, in any event, shall not be less favorable
than those in effect on the Commencement Date.
4.
Employment Term .
The term of employment of the Executive hereunder (the
“
Employment Term ”)
shall begin on or about May __, 2008 (the “
Commencement Date ”),
and shall continue for two (2) years unless terminated sooner in
accordance with Section 5, 6 or 7.
5.
Termination Without Cause or for Good Reason
.
(a)
Salary .
If the Company terminates the Executive’s employment without
Cause (as defined herein), or the Executive terminates his
employment with the Company for Good Reason (as defined herein),
subject to the provisions of this Agreement, the Executive shall be
entitled to receive from the Company his Base Salary for the
remainder of the Employment Term, subject to Section 12 (b) of this
Agreement and all other payments, benefits and rights under any
benefit, compensation, incentive, equity or fringe benefit plan,
program or arrangement or grant, to the extent consistent with any
applicable plan (such payments, rights and benefits referred to in
this sentence are collectively referred to hereinafter as
“
Rights ”).
The Base Salary in such event shall be payable over the course of
the twelve (12) months following termination of employment in
accordance with the Company’s then-current payroll practices.
The Executive shall also receive payment of unpaid Base Salary
through the date of such termination; accrued but unused vacation
days; any unpaid bonus earned through the date of termination; any
compensation previously deferred by the Executive, including any
deferred compensation (plus any accrued interest and earnings
thereon), to the extent consistent with any applicable plan;
reimbursement for any unreimbursed fees or expenses under Sections
3(c) incurred through the date of termination, payable no later
than seven (7) days following such termination or as soon as
practicable under the terms and conditions of the applicable plan,
program or arrangement that are applicable to other senior
executive participants.
(b)
Definition of Good Reason .
For purposes of this Agreement, “
Good Reason ”
shall mean the occurrence of any of the following events, without
the written consent of the Executive:
(i)
the
Company changes the titles and/or positions of the Executive
such that the Executive is no longer the Chief Executive
Officer and Chairman of the Board or no longer reports
directly to the Board;
(ii)
a
reduction in the Base Salary in accordance with Section 3(a),
or the failure to pay when due Base Salary or any other
amounts due under this Agreement. Notwithstanding the
foregoing, prior to the Executive having the right to
terminate this Agreement under this clause (ii), the Executive
shall first provide the Company with written notice specifying
such reduction, failure to increase or failure to pay in
reasonable detail and if such reduction, failure to increase
or failure to pay is susceptible to remedy, the Company shall
then have a ten (10) business day period to remedy such
reduction, failure to increase or failure to pay alleged by
the Executive to be prohibited by this clause (ii) and if such
reduction, failure to increase or failure to pay is remedied
within such period, the Executive shall have no right to
terminate this Agreement based on such reduction, failure to
increase or failure to pay, as the case may be;
(iii)
a
material reduction in the kind or level of employee benefits,
fringe benefits or perquisites to which the Executive is from
time to time entitled either by the express terms of this
Agreement or as may be provided to other senior executives of
the Company, or a failure to pay or provide such benefits,
fringe benefits or perquisites when due. Notwithstanding the
foregoing, prior to the Executive having the right to
terminate this Agreement under this clause (iii), the
Executive shall first provide the Company with written notice
specifying such material reduction or failure in reasonable
detail and if such material reduction or failure is
susceptible to remedy, the Company shall then have a 30 day
period to remedy such material reduction or failure alleged by
the Executive to be prohibited by this clause (iii), and if
such material reduction or failure is remedied within such
period, the Executive shall have no right to terminate this
Agreement based on such material reduction or failure, as the
case may be;
(iv)
a
material diminution or material adverse change in the
Executive’s titles, authorities, duties,
responsibilities or reporting relationships, or assignment to
the Executive of duties and authorities that are not
commensurate with his position. Notwithstanding the foregoing,
prior to the Executive having the right to terminate this
Agreement under this clause (iv), the Executive shall first
provide the Company with written notice specifying such
material diminution, material adverse change or other action
in reasonable detail and if such material diminution, material
adverse change or other action is susceptible to remedy, the
Company shall then have a 30 day period to remedy such
material diminution, material adverse change or other action
alleged by the Executive to be prohibited by this clause (iv),
and if such material diminution, material adverse change or
other action is remedied within such period, the Executive
shall have no right to terminate this Agreement based on such
material diminution, material adverse change or other action,
as the case may be;
(v)
a
failure by the Company to procure, and deliver to the
Executive satisfactory evidence of, the assumption of this
Agreement by any successor or subsidiary as required by
Section 15. Notwithstanding the foregoing, if the Executive
has actual knowledge of circumstances that are anticipated to,
or do or would, give rise to the Company’s obligations
under Section 15, then prior to the Executive having the right
to terminate this Agreement under this clause (v), the
Executive shall first provide the Company with written notice
specifying such failure in reasonable detail and if such
failure is susceptible to remedy, the Company shall then have
a 5 day period to remedy such failure alleged by the
Executive, and if such failure is remedied within such period,
the Executive shall have no right to terminate this Agreement
based on such failure;
(vi)
any
purported termination of the Executive’s employment that
is not effected pursuant to a Notice of Termination, within
the meaning of Section 7(a), and otherwise in accordance with
this Agreement, which, for purposes of this Agreement, shall
be ineffective. Notwithstanding the foregoing, prior to the
Executive having the right to terminate this Agreement under
this clause (vi), the Executive shall first provide the
Company with written notice specifying such breach in
reasonable detail and if such breach is susceptible to cure,
the Company shall then have a 5 day period to cure such breach
alleged by the Executive, and if such breach is cured within
such period, the Executive shall have no right to terminate
this Agreement based on such breach;
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