EMPLOYEE AGREEMENT
This EMPLOYEE AGREEMENT (hereinafter, this "Agreement"), made and
entered into in the City of Lawrenceville, GA, this 15th day of July, 2000, by
and between American Utilicraft Corporation, a corporation duly organized and
existing under the laws of the state of Delaware, having its principle office
and place of business at 000 Xxxxx Xx. XX, Xxxxx X, Xxxxxxxxxxxxx, XX 00000
(hereinafter, the "Corporation"), and Xxxxxx X. Xxxxxxx, residing at 0000
XXXXXXX XXXXX XXXXX, XXXXXXX, XX 00000 (hereinafter, "Dapogny").
WITNESSETH:
1. The Corporation hereby employs Dapogny, and Dapogny agrees to
work for the Corporation as Vice President, Operations of the
Corporation, reporting to the President and Chief Executive
Officer.
2. This Agreement shall expire on July 15th, 2003, unless sooner
terminated as hereinafter provided. In addition to the
arrangements for termination hereinafter provided, it is
agreed between the parties that until the major start-up
financing (approximately 20,000,000) of the Corporation is
achieved, this Agreement may be summarily terminated, that is,
without notice, in the sole discretion of the President and
Chief Executive Officer of the Corporation.
Dapogny agrees to devote his full time efforts to his duties
as Vice President, Operations for the profit, benefit and
advantage of the business of the Corporation.
4. (a) The Corporation agrees to pay Dapogny a basic salary at
the rate of ninety thousand dollars ($90,000) per annum,
payable in semi-monthly installments, for all the services to
be rendered by Dapogny hereunder, including service as a
member of a committee, and any other duties related to his
position required of him by the President and Chief Executive
Officer. The basic salary above-stated is understood by the
parties to this Agreement to be payable to Dapogny during the
period in which the Corporation is developing the FF-1080
aircraft and seeking its Federal Aviation Administration
(hereinafter "FAA") aircraft type Certification.
(b) When the FAA certification is achieved, the basic salary
payable to Dapogny will increase to One Hundred Thousand
Dollars ($100,000.00) per annum Effective the first (1st) day
of the month in which the FAA issues the FF-1080 aircraft
type certificate to the Corporation.
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(c) The basic salary payable to Dapogny will further increase
to One Hundred Twenty-Five Thousand ($125,000.00) per annum
effective the first (1st) day of the month in which the
Corporation delivers production aircraft number twenty-four
(24).
(d) Basic Salary payments to Dapogny under this Agreement
shall begin on the first (1st) day of the month in which the
major start-up financing (approximately $20,000,000) of the
Corporation is achieved.
(e) The basic salary payments made to Dapogny under this
paragraph shall be adjusted annually, effective the first
(1st) day of the thirteenth (13th) month after any such
payment under subparagraphs (a), (b) or (c) above begins, by
the percentage of the annual rate of change in the Consumer
Price Index for the twelve (12) months preceding the above
effective date.
5. The Corporation agrees that it will pay Dapogny, as a bonus,
an additional sum amounting to one quarter of one percent
(.125%) of the basic delivered invoice price (not including
optional equipment) of an FF-1080 aircraft delivered to
commercial concerns, worldwide, (including commercial air
carriers when owned and/or operated by a foreign government)
as, and only as, responsibility for such sales may be assigned
to Dapogny by the President and Chef Executive Officer.
Payments of the additional sum payable to Dapogny under this
paragraph shall be made on the first (1st) working day of the
month following the month in which aircraft deliveries are
made and final payment on such deliveries has been received by
the Corporation regardless of whether or not this Agreement is
then in effect.
6. The Corporation and Dapogny agree that the geographical
location at which Dapogny will devote the major portion of his
time and efforts to his duties as Vice President, Operations
is at the office facility of the Corporation, in
Lawrenceville, GA.
7. The Corporation agrees to pay all reasonable expenses incurred
by Dapogny in furtherance of the business of the Corporation,
including travel and entertainment expenses. The Corporation
agrees to reimburse Dapogny for any such expenses paid out by
him in the first instance, upon submission by him of a
statement itemizing such expenses.
8. If Dapogny shall, during the term of his employment under this
Agreement, be absent from work because of illness or other
cause for a period, or aggregate of periods, in excess of six
(6) months in any one (1) year of the term of employment, the
Corporation shall have the right to terminate this Agreement
on one hundred eighty (180) days notice to Dapogny. In that
event, the Corporation shall pay Dapogny his compensation to
the date of termination.
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9. Dapogny agrees that the Corporation may, from time to time,
apply for take out in its own name and at its own expense,
life, health, accident, or other insurance upon Dapogny that
the Corporation may deem necessary or advisable to protect its
interests hereunder; the total amount of such life insurance
shall not exceed One Million Dollars ($1,000,000.00) without
the written consent of Dapogny. Dapogny agrees to submit to
any medical or other examination necessary for such purpose
and to assist and cooperate with the Corporation in procuring
such insurance; and Dapogny agrees that other than his rights
as a shareholder he shall have no right, title, or interest in
or to such insurance.
10. In the event of the death of Dapogny during the term of this
Agreement and after the major start-up financing is in place,
the Corporation agrees to pay Dapogny's legal representatives
the sum of Five Thousand Dollars ($5,000.00).
11. Dapogny agrees that during the term of this Agreement he will
not engage in any other commercial activity, whether or not
competitive with the business of the Corporation, nor be
affiliated in any other way as officer, director, or
significant stockholder of another corporation without the
written consent of the President and Chief Executive Officer
of the Corporation.
12. Dapogny agrees that he shall exercise reasonable care to
prevent disclosure of the Corporation's proprietary
information others and shall not, himself at any time during
the period of this Agreement and after its termination for any
reason, disclose the Corporation's proprietary information to
others and will not use such information for any purpose
except as contemplated by this Agreement. The term
"proprietary information" as used herein includes, in addition
to information so designated and labeled by the Corporation,
all business, financial, technical and design information
related to the Corporation's developmental and production
programs whether or not designated and labeled as proprietary
information.
13. Dapogny agrees that, for a period of three (3) years after
leaving the employ of the Corporation for any reason, he will
not engage in any way, directly or indirectly, in any business
competitive with the business of the Corporation.
14. (a) After the major start-up financing (approximately
$20,000,000) of the Corporation achieved, either party shall
have the right to terminate this Agreement upon one hundred
eighty (180) days notice to the other. If Dapogny terminates
this Agreement, the Corporation shall pay Dapogny until the
date of termination. Except for any reason that would be
considered for cause, if the Corporation terminates the
Agreement, it shall forthwith pay additional compensation to
Dapogny in the form of a lump sum payment of two (2) times the
average amount of the annual basic salary then payable under
paragraphs 4 (a), (b) or (c) above.
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(b) For purposes of paragraph (a) above, a reason that could
be considered for cause, within the sole discretion of the
President and Chief Executive Officer, would be the failure of
the Corporation to have sold at least twenty-five (25) FF-1080
aircraft or derivative aircraft during the first fu11
calendar year (January 1 though December 31) after the major
start-up financing (approximately $20,000,000) of the
Corporation is achieved, and to sell at least twenty-five (25)
FF-1080 or derivative aircraft each calendar year thereafter.
15. (a) For protection of Dapogny against possible termination
after a change of control (defined below) of the Corporation
and to induce Dapogny to continue to serve in his capacity as
Vice President, Operations or in such other capacity to which
he may be elected or appointed, the Corporation will provide
severance benefits in the event Dapogny's employment is
terminated after a change of control.
(b) "Change of Control" shall have occurred if, at any time
after the Corporation has acquired its major start-up
financing, (a) any person (as used in Sections 13(d) and 14(d)
of the Securities Exchange Act ("SEA") of 1934) becomes the
beneficial owner (as defined in Rule 13(d)-3 of the SEA) of a
total to twenty percent (20%) or more of the outstanding
shares of the Corporation's common stock, or (b) the Board of
Directors of the Corporation is composed of a majority of
directors who were not directors of the Corporation on the
date of this Agreement, or (c) the change is of the type that
is required to be reported under Item 5(f) of Schedule 14
Regulation 14A promulgated under the SEA.
(c) If a change of control has occurred, Dapogny shall be
entitled to severance benefits if his employment is terminated
by him due to:
(i) the assignment to him of any duties not
consistent with his present position, or a change in
titles or offices, or any failure to re-elect him to
any positions held on the date of the change of
control;
(ii) a reduction in salary or discontinuance of any
bonus plans in effect on the date of the change of
control; or
(iii) a change in geographical location of where his
position is based in excess of twenty (20) miles or
required travel in excess of his usual business
travel schedule.
(d) Dapogny shall be entitled to severance benefits if his
employment is terminated by the Corporation after a change of
control. Such termination must not be due to any reason that
would be considered for cause.
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(e) Severance benefits after a change of control has occurred
shall be:
(i) a lump sum payment of ten (10) times the amount
of the annual basic salary then payable under
paragraphs 4 (a), (b) or (c) above.
(ii) allowance of surrender of all outstanding stock
options, with the price to be determined by taking
the difference between the option price and the price
of the stock on the date of the change of control or
the date of termination, whichever is higher; and
(iii) all employee benefits in effect and applicable
to Dapogny on the date of the change of control will
be retained and paid by the Corporation for Dapogny
for a period of two (2) years. These benefits shall
include all health, accident, and disability plans as
well as any life insurance plans provided by or
through the corporation.
(f) Dapogny shall not be required to mitigate the amount of
any payment provided under these severance benefits by seeking
other employment and none of these payments may be reduced by
any future salary he may earn.
(g) In the event of a change of control, the Corporation is
aware that the Board of Directors or a shareholder or
shareholders of the Corporation may cause the Corporation to
refine to comply with its obligations under this paragraph, or
may cause the Corporation to institute litigation seeking to
have this paragraph declared enforceable, or may take other
action to deny Dapogny the benefits intended to be provided
under this paragraph. It is the intent of the Corporation that
Dapogny not be required to incur expenses in enforcing his
rights under this paragraph by litigation or other legal
action because the costs and expenses thereof would
substantially detract from the benefits intended to be
extended to Dapogny under this paragraph.
(h) If, following a change of control, Dapogny determines that
the Corporation has failed to comply with any of its
obligations under this paragraph or in the event the
Corporation or any other person takes action to declare this
paragraph void or enforceable, or institutes any litigation or
other legal action designed to deny Dapogny the benefits
intended to be extended under this paragraph, the Corporation
authorizes Dapogny to retain counsel of his choice at the
Corporation's expense to represent Dapogny in connection with
the initiation or defense by Dapogny of any litigation or
legal action, whether by or against the Corporation, any
director, officer, shareholder, or any other person affiliated
with the Corporation, in any jurisdiction.
(i) Despite any previously existing attorney-client
relationship between the Corporation and counsel retained by
Dapogny, the Corporation hereby provides that Dapogny may
enter into an attorney-client relationship with such counsel.
The Corporation and Dapogny agree that a confidential
relationship will exist between Dapogny and such counsel.
Page 5
(j) The Corporation hereby authorizes that the reasonable fees and
expenses of councel retained by Dapogny shall be paid or
reimbursed to Dapogny by the Corporation on a regular,
periodic basis upon Dapogny's presentation of a statement or
statements, prepared by counsel in accordance with its
customary practices, up to a maximum aggregate amount of Two
Hundred Fifty Thousand Do11ars ($250,000.00).
16. The Corporation shall have the right, with the consant of
Dapogny, to assign this Agreement to its successors or assigns
and all covenants and agreements hereunder shall inure to the
benefit of and be enforceable by or against its said
successors or assigns. The terms "successor" and "assign"
shall include any corporation which buys all or substantially
all of the Corporation's assets, or all of its stock, or with
which, it merges or consolidates.
17. The Corporation shall indemnify Dapogny and hold him harmless
against any claims or legal action of any type brought against
Dapogny with respect to his activities as Vice President,
Operations of the Corporation and in such other capacity to
which he may be appointed or elected and with respect to his
services as a member of a committee and other duties related
to his position, whether such claims or actions be rightfully
or wrongfully brought or filed, and against all costs incurred
by Dapogny therein. In the event an action should be filed
with respect to the subject of this indenmity and hold
harmless agreement, the Corporation agrees that Dapogny may
employ an attorney of Dapogny's own selection to appear and
defend the action, on behalf of Dapogny, at the expense of the
Corporation. Dapogny, at his option, shall have the sole
authority for the direotion of the defense, and shall be the
sole judge of the acceptability of any compromise or
settlement of any claims or actions against Dapogny.
18. Any dispute concerning any questions of law or fact arising
out of the circumstances of employment under this Agreement
shall be determined by arbitration. The controversy shall be
submitted to the American Arbitration Association for final
determination.
l9. Any waiver by either party of a breach of any provision of
this Agreement shall not operate as or be construed as a
waiver of any subsequent breach thereof.
20. If any provision of this Agreement is declared invalid by any
Tribunal, then such provision shall be deemed automatically
adjusted to conform to the requirements for validity as
declared at such time and, as so adjusted, shall be deemed a
provision of this Agreement as though originally included
herein. In the event that the provision invalidated is of such
a nature that it cannot be so adjusted, the provisions shall
be deemed deleted from this Agreement as though the provision
had never been inc1uded herein. In either case, the remaining
provisions of this Agreement shall remain in effect.
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21. This Agreement may be extended or modified by mutual agreement
in wiring in the form of a numbered amendment hereto.
22. This Agreement shall be construed in accordance with the laws
of the State of Delaware.
23. This Agreement consists of seven (7) pages.
IN WITNESS WHEREOF, the Corporation has hereunto signed its name by its
President and Chief Executive Officer, and the other party hereto has signed his
name, all as of the day and year first above written.
AMERICAN UTILICRAFT CORPORATION
By: /S/ Xxxx X. Xxxxxx
-------------------------------------
Xxxx X. Xxxxxx
President and Chief
Executive Officer
/S/ Xxxxxx X. Xxxxxxx
-------------------------------------
Xxxxxx X. Xxxxxxx
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