EMPLOYMENT AGREEMENT
Exhibit 99.1
This EMPLOYMENT AGREEMENT (the “Agreement”), dated and entered into as of September 24, 2008,
by and between FirstFlight, Inc. dba FirstFlight (the “Company”), and Xxxx X.
Xxxx (“Executive”).
Recitals
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.
3. Salary and Bonus.
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 expire on the
date of termination and all unpaid bonuses shall be forfeited.
b. Termination without Cause or for Good Reason. Upon termination of Executive’s employment
(x) by the Company without Cause or (y) by Executive for Good
Reason, Executive will be entitled to the benefits provided below, subject to signing by Executive
of a general release of claims in a form reasonably satisfactory to the Company:
(i) Executive shall be paid his Base Salary up to the date of termination, and in addition, there
shall be paid to the Executive on the date of termination a severance allowance equal to six months
Base Salary (less all amounts required to be withheld and deducted).
(ii) Bonus due Executive under subparagraphs 5 b (i) and (ii) shall be paid in full. Bonus due
Executive under subparagraph 5 b (iii) shall be paid on a pro-rated basis through the date of
termination. Executive shall remain fully vested in any stock previously issued pursuant to
subparagraph 5 b (iv), but any non-vested Options shall be terminated. Benefits provided under
paragraph 4(a) shall continue for a period of six (6) months from the end of the month of
termination.
Notwithstanding anything herein to the contrary, the Company shall not terminate Executive’s
employment without Cause during the initial 2-year Term of this Agreement; provided,
however, that the Company may terminate Executive without Cause during any renewal period
and may elect not to renew upon the expiration of the initial or any renewal Term.
c. Termination Upon Death or Permanent Disability. Upon termination of Executive’s
employment upon Executive’s death or permanent disability, Executive or Executive’s estate will be
entitled to the benefits provided below:
(i) Base Salary up to the date of death or termination; and
(ii) Bonus due Executive shall be paid under subparagraphs 5 b (i) and (ii) shall be paid in full.
Bonus due Executive under subparagraph 5 b (iii) shall be paid on a prorated basis. Executive shall
remain fully vested in any stock previously issued pursuant to subparagraph 5 b (iv), but but any
non-vested Options shall be terminated.
d. Termination upon Change of Control. Upon termination of Executive’s employment upon a
Change of Control (x) by the Company or (y) by Executive within one (1) year after such Change of
Control without Good Reason, Executive will be entitled to the benefits provided below, subject to
signing by Executive of a general release of claims in a form reasonably satisfactory to the
Company:
(i) Executive shall be considered immediately and fully vested in any issued but non-vested
Options;
(ii) Executive shall be paid his Base Salary up to the date of termination, and in addition, there
shall be paid to the Executive on the date of termination a severance allowance equal to six months
Base Salary (less all amounts required to be withheld and deducted) and
(iii) Bonus due Executive shall be paid under subparagraphs 5 b (i) and (ii) shall be paid in full.
Bonus due Executive under subparagraph 5 b (iii) shall be paid on a
pro-rated basis. Executive shall remain fully vested in any stock previously issued pursuant to
subparagraph 5 b (iv), but any non-vested Options shall be terminated; and
(iv) Executive shall continue to be covered by all non-cash benefit plans of the Company except for
the retirement plans or retirement programs in which Executive participates or any successor plans
or programs in effect on the date of such acquisition of control, for six (6) months thereafter;
provided, however, that if during such time period Executive should enter into the
employment of a competitor of the Company, his participation in such non-cash benefit plans will
cease. In the event Executive is ineligible under the terms of such plans to continue to be so
covered, the Company shall provide substantially equivalent coverage through other sources.
e. No Mitigation. Executive will not be required to mitigate the amount of any payment
provided for in this paragraph 6 by seeking other employment or otherwise, nor will the
amount of any payment or benefit provided for in this paragraph 6 be reduced by any
compensation earned by him as the result of employment by another employer or by retirement
benefits after the date of termination, or otherwise.
f. Expiration of this Agreement. In the event the Term of this Agreement expires without
having otherwise been previously terminated pursuant to paragraph 5 above or by the Company
without Cause, Executive will not be entitled to any severance compensation whatsoever under this
paragraph 6.
7. No Solicitation; Confidentiality; Competition; Cooperation
a. During the Restricted Period (defined below), neither Executive nor any Executive-Controlled
Person (defined below) will, without the prior written consent of the Board, directly or indirectly
solicit for employment, employ in any capacity or make an unsolicited recommendation to any other
person or entity that it employ or solicit for employment any person who is or was, at any time
during the Restricted Period, an officer, executive or employee of the Company or of any of its
affiliates. As used in this Agreement, the term “Executive-Controlled Person” shall mean any
company, partnership, firm or other entity as to which Executive possesses, directly or indirectly,
the power to direct or cause the direction of the management and policies of such entity, whether
through the ownership of voting securities, by contract or otherwise.
b. Executive acknowledges that, through his status as an officer of the Company, he has, and will
have, possession of important, confidential information and knowledge as to the business of the
Company and its affiliates, including, but not limited to, knowledge of marketing and operating
strategies, acquisition, leasing and other agreements, financial results and projections, future
plans, the provisions of other important contracts entered into by the Company and its affiliates,
possible acquisitions and similar information. Executive agrees that all such knowledge and
information constitutes a vital part of the business of the Company and its affiliates and is by
its nature trade secrets and confidential information proprietary to the Company and its affiliates
(collectively, “Confidential Information”). Except for information that becomes public other
than as a result of disclosure by the Executive in violation of section 7 or as may be required by
law, Executive agrees that, during the Restricted Period, he shall not,
divulge, communicate, furnish or make accessible (whether orally or in writing or in books,
articles or any other medium) to any individual, firm, partnership or corporation, any knowledge or
information with respect to Confidential Information directly or indirectly useful in any aspect of
the business of the Company or any of its affiliates.
c. All memoranda, notes, notebooks, lists, records and other documents or papers (and all copies
thereof), including such items stored in computer memories, portable computers and the like, on
microfiche, disk or by any other means, made or compiled by or on behalf of Executive or made
available to him relating to the Company are and shall be the Company’s property and shall be
delivered to the Company promptly upon the termination of Executive’s employment with the Company
or at any other time on request and such information shall be held confidential by Executive after
the termination of his employment with the Company.
d. During the Non Competition period, neither Executive nor any Executive-Controlled Person will
render any services, directly or indirectly, as an employee, officer, consultant or in any other
capacity, to any individual, firm, corporation or partnership engaged in any business substantially
providing services similar to those of the Company in the United States (such activities being
herein called the “Company Business”). In the twelve-month period following the termination
of Executive’s employment, neither Executive nor any Executive-Controlled Person will render any
services, directly or indirectly, as an employee, officer, consultant or in any other capacity, to
any individual, firm, corporation or partnership engaged in a business similar to the Company
Business; provided, however, that the foregoing restriction shall not apply to aircraft sales,
aircraft sales consulting and flight department (91) or air carrier (135) safety and compliance audits. During the Non-Competition Period, Executive shall not, without
the prior written consent of the Company, hold an equity interest in any firm, partnership or
corporation which competes with Company Business in the Restricted Area; provided, however, that
the foregoing prohibition shall not apply to aircraft sales and consulting, and further provided
that beneficial ownership by Executive (including ownership by any one or more members of his
immediate family and any entity under his direct or indirect control) of less than five (5%)
percent of the outstanding shares of capital stock of any corporation which may be engaged in any
of the same lines of business as Company Business, if such stock is listed on a national securities
exchange or publicly traded in the over-the-counter market, shall not constitute a breach of the
covenants contained in this paragraph 7.
e. (i) As used in this Agreement, “Restricted Period” shall mean the term of employment and
twelve (12) months following the termination of Executive’s employment unless the termination is
(A) by the Company without Cause, or (B) by the Executive for Good Reason, in which case the
Restricted Period shall be one day.
(ii) As used in this Agreement, “Non-Competition Period” shall mean the term of
employment and twelve (12) months following Executive’s termination of employment unless the
termination is (A) by the Company without Cause, or (B) by the Executive for Good Reason, in which
case the Non-Competition Period shall be one day.
(iii) As used in this Agreement “Restricted Area” shall mean the fifty (50) United States of
America.
f. Following Executive’s termination of employment, Executive will reasonably cooperate with the
Company, its executives, counsel and other professional advisors (i) to the extent reasonably
possible with respect to the consummation of matters that were in progress at the time of
Executive’s termination of employment and (ii) with respect to any litigation or regulatory matters
arising out of or related to the business, operations, or personnel of the Company (including
participation in depositions, hearings and trials, as and if deemed necessary or appropriate by the
Company, execution of appropriate affidavits and participation in interviews with Company counsel).
The Company shall compensate Executive on a reasonable basis for any services provided by Executive
pursuant to this paragraph 7(f).
g. The provisions contained in this paragraph 7 as to the time periods, scope of activities,
persons or entities affected, and territories restricted shall be deemed divisible so that, if any
provision contained in this paragraph 7 is determined to be invalid or unenforceable, such
provisions shall be deemed modified so as to be valid and enforceable to the full extent lawfully
permitted.
h. Executive agrees that the provisions of this paragraph 7 are reasonable and necessary for
the protection of the Company and that they may not be adequately enforced by an action for damages
and that, in the event of a breach thereof by Executive or any Executive-Controlled Person, the
Company shall be entitled to apply for and obtain injunctive relief in any court of competent
jurisdiction to restrain the breach or threatened breach of such violation or otherwise to enforce
specifically such provisions against such violation, without the necessity of the posting of any
bond by the Company. Executive further covenants and agrees that if he shall violate any of his
covenants under this paragraph 7, the Company shall not be obligated to make any payments or
provide any benefits provided in paragraph 6 and the Company shall be entitled to recover
any amounts previously paid pursuant to paragraph 6. Such a remedy shall, however, not be
exclusive and shall be in addition to any injunctive relief or other legal or equitable remedy to
which the Company is or may be entitled.
8. Indemnification. To the full extent permitted by applicable law, Executive shall be
indemnified and held harmless by the Company against any and all judgments, penalties, fines,
amounts paid in settlement, and other reasonable expenses (including, without limitation,
reasonable attorneys’ fees and disbursements) actually incurred by Executive in connection with any
threatened, pending or completed action, suit or proceeding (whether civil, criminal,
administrative, investigative or other) for any action or omission in his capacity as a director,
officer or employee of the Company. Indemnification under this paragraph 8 shall be in
addition to, and not in substitution of, any other indemnification by the Company of its officers
and directors.
9. Miscellaneous.
a. Executive represents and warrants that he is not a party to any agreement, contract or
understanding, whether employment or otherwise, which would restrict or prohibit him from
undertaking or performing employment in accordance with the terms and conditions of this Agreement.
As of the date of this agreement, Executive is not aware of any violations of any
existing non-compete agreements. In the event, Executive violates any pre-existing agreements in
which Executive is bound, including any non-compete agreements, Executive will indemnify the
Company to the full extent permitted by applicable law.
b. The provisions of this Agreement are severable and if any one or more provisions may be
determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provisions
and any partially unenforceable provision to the extent enforceable in any jurisdiction will remain
binding and enforceable.
c. The rights and obligations of the Company under this Agreement inure to the benefit of, and
will be binding on, the Company and its successors and assigns, and the rights and obligations
(other than obligations to perform services) of Executive under this Agreement will inure to the
benefit of, and will be binding upon, Executive and his heirs, personal representatives and
permitted assigns; provided, however, that Executive shall not be entitled to assign
or delegate any of his rights and obligations under this Agreement without the prior written
consent of the Company.
d. Any notice to be given under this Agreement will be personally delivered in writing or will
have been deemed duly given when received after it is posted in the United States mail, postage
prepaid, registered or certified, return receipt requested, or sent by overnight courier service
addressed to each of the parties hereto at such address or addresses as each party shall provide
from time to time in writing to the other. Initially such notices shall be sent,
If to Executive:
|
Xxxx Xxxx | |
If to Company:
|
FirstFlight, Inc. | |
| Attention: CFO | ||
| 000 Xxx Xxxxxx | ||
| Xxxxxxxxxx, Xxx Xxxx 00000 |
d. The failure of either party to enforce any provision or provisions of this Agreement will not in
any way be construed as a waiver of any such provision or provisions as to any future violations
thereof, nor prevent that party thereafter from enforcing each and every other provision of this
Agreement. The rights granted the parties herein are cumulative and the waiver of any single remedy
will not constitute a waiver of such party’s right to assert all other legal remedies available to
it under the circumstances.
f. THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED ACCORDING TO THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO CONFLICTS OF LAWS.
g. Captions and paragraph headings used herein are for convenience and are not a part of this
Agreement and will not be used in construing it.
h. In the event of any dispute arising out of the subject matter of the Agreement, the prevailing
party shall recover, in addition to any other damages assessed, its attorney’s fees and court costs
incurred in litigating or otherwise settling or resolving such dispute whether or not an action is
brought or prosecuted to judgment.
i. This Agreement contains the entire understanding of the parties. It may not be changed orally but
only by an agreement in writing signed by the party against whom enforcement of any waiver, change,
modification, extension, or discharge is sought.
IN WITNESS WHEREOF, the parties have executed this Agreement on the day and year first set
forth above. This Agreement may be signed in counterparts; provided, however, that the second party
to sign the Agreement must execute and deliver its counterpart signature within seventy-two (72)
hours following receipt of the first party’s signature or the signature of the first party to the
sign the Agreement shall be deemed withdrawn and shall not otherwise be enforceable.
| FirstFlight, Inc. |
||||
| By: | /s/ Xxxx X. Xxx | |||
| Name: | Xxxx X. Xxx | |||
| Title: | CEO | |||
| By: | /s/ Xxxx X. Xxxx | |||
| Executive: Xxxx X. Xxxx | ||||
