Exhibit 10.4
EMPLOYMENT AGREEMENT
AGREEMENT dated March 31, 2005, between Tech Aviation Service, Inc. (the
"Company"), and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ (the "Employee").
1) EMPLOYMENT. The Company employs the Employee and the Employee accepts
employment upon the terms and conditions of this Agreement.
2) TERM. The initial term of this Agreement shall be for two (2) years,
beginning upon the consummation of the transaction pursuant to which FBO
Air - ▇▇▇▇▇▇-▇▇▇▇▇, Inc. purchases all of the capital stock of the Company
from Employee and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇. After the initial term of two (2)
years, the Agreement shall automatically renew for successive one-year
periods unless there is notification by either party within 90 days of the
anniversary of the first term or any renewal term, refusing renewal.
3) DUTIES.
a. The Employee is engaged as the Chief Operating Officer of the
Company, to oversee the operations of the Company; such specific
duties may be defined from time to time by the Board of Directors
but shall encompass duties customary to the office, as performed by
Employee for the Company prior to the effective date hereof.
b. While not a condition of this Agreement, the parties recognize that
Employee shall perform his duties during such periods of time as are
reasonably necessary to accomplish the same; provided that, so long
as Employee performs his duties for a period of at least 130 hours
per month, he shall not be deemed to have grossly neglected his
duties.
4) COMPENSATION.
a. Base Salary. As compensation for the services to be rendered by
Employee during the period of his employment hereunder, and upon the
condition that Employee shall fully and faithfully keep and perform
all of the terms and conditions hereof, Company shall pay Employee a
salary of $96,550 per annum; salary shall be less income tax
withholdings and other normal employee deductions and shall be
payable in equal monthly installments. The Board of Directors of the
Company may increase such salary at any time and from time to time.
b. Incentive Bonus. In addition to the Base Salary, the Employee shall
be eligible while employed for an incentive bonus as described in
Exhibit 4.b. When earned, such incentive bonus shall be paid within
four (4) weeks of the end of the applicable fiscal year of the
Company.
c. Temporary Increases. This Agreement shall not be deemed abrogated or
breached if the Board of Directors of Company shall determine to
increase the compensation of Employee for any period of time, and
thereafter reduce the same to the amounts provided in Paragraph 4)a.
and 4)b. above.
▇. ▇▇▇▇▇▇▇▇▇ Pay. If this Agreement is terminated by the Company for
any reason, other than the death of Employee, with or without cause,
the Company shall pay to Employee an amount equal to the Base Salary
provided in subparagraph a) above less income tax withholdings and
other normal employee deductions.
E-134
Exhibit 10.4
5) CONFLICTING ACTIVITIES. Employee shall not, during the term of this
Agreement, be engaged in any business activity that is directly or
indirectly in competition with the primary business activity of the
Company without the prior written consent of the Board of Directors of the
Company; provided that Employee shall be entitled to engage in the
business of the sale of motor vehicles during such periods as do not
impact the Company's interests adversely.
6) ADDITIONAL BENEFITS.
A. Health and Welfare Insurance Coverage: Company agrees to pay
Employee $150 per month for hospitalization, medical, dental and
vision insurance coverage. Such insurance coverage shall continue
for one (1) year following the effective date hereof, whether or not
Employee continues to be employed by the Company, except as a result
of Employee's death.
b. Vacation: The Employee shall be entitled each year to vacation time
of five (5) weeks, prorated for the first and last years of
Employee's employment, during which time his compensation shall be
paid in full. Vacation time shall be taken at such time or times as
will minimize the effect on the operations of the Company.
c. Employee Physical: Company will arrange and pay for a complete
Employee physical examination every two years, with the first
examination to occur within sixty (60) days of the effective date
hereof; provided, however, that the results of the physical
examination shall be made known to Company as well as to Employee.
d. Reimbursement of Expenses: The Employee may incur reasonable
expenses for promoting the Company's business, including expenses
for entertainment, travel, mobile telephone, home-based phone and
fax lines, home-based Internet access, use of personal digital
assistant and similar items. The Company will reimburse the Employee
for all such expenses upon the Employee's periodic presentation of
an itemized account of such expenditures.
7) DISCLOSURE OF INFORMATION. The Employee acknowledges that he may be
exposed to confidential information and that this information is a
valuable, special, and unique asset of the Company's business. The
Employee will not, during or after the term of his employment, disclose
such confidential information to any person, firm, corporation,
association, or other entity except for the specific purpose of
accomplishing the Company's business objectives, except as provided in
paragraph 9)c.(4) below. In the event of a breach or threatened breach by
the Employee of the provisions of this paragraph, the Company shall be
entitled to an injunction restraining the Employee from disclosing, in
whole or in part, such confidential information, or from rendering any
services to any person, firm, corporation, association, or other entity to
whom such information, in whole or in part, has been disclosed or is
threatened to be disclosed. Nothing herein shall be construed as
prohibiting the Company from pursuing any other remedies available to the
Company for such breach or threatened breach, including the recovery of
damages from the Employee.
E-135
Exhibit 10.4
8) FORCE MAJEURE AND DISABILITY. If Company is unable to conduct its
business, or a substantial portion thereof, by virtue of governmental
regulation or order, or by strike, war, fire, earthquake, hurricane, or
similar acts of god, or other calamity (declared or undeclared), or
because of other similar or dissimilar cause beyond control of Company
(all of which events are hereinafter sometimes referred to as "Force
Majeure"), or in the event Employee suffers a disability which prevents
him from performing his services hereunder (herein called a "Disability"),
Company shall, in the event the Force Majeure and/or Disability continue
for at least eight aggregate weeks during any four-month period, have the
right to suspend the operation of this Agreement for the duration of said
Force Majeure and/or Disability (except for any benefits payable to
Employee under such benefit plans generally available to all Employee
employees), and Company shall, at its option, have the right to add a
period equal to such suspension to the Term hereof.
9) TERMINATION WITHOUT CAUSE. Without cause, the Company may terminate this
Agreement at any time upon ten (10) days written notice to the Employee,
subject to the payment of Severance Pay, above provided. Company
acknowledges that any Incentive Bonus due Employee shall be paid on a
pro-rated basis.
10) TERMINATION WITH CAUSE. After the first two (2) years of the term of this
Agreement, either party may, at its election, terminate this Agreement
immediately for cause, as defined below. In the event Company terminates
"for cause," Company shall pay Employee the compensation and benefits
which would otherwise be payable to Employee up to the end of the month in
which the termination or disciplinary action occurs. Further, Employee
acknowledges that any Bonus due at time of such termination shall be
forfeited; and that Benefits shall be canceled at the end of the month of
termination.
As used in this Section, termination "for cause" shall be deemed to have
occurred if either party has breached this Agreement and the non-breaching
party gives notice in writing, delivered to the breaching party and
providing ten (10) calendar days, from the date of delivery of the notice,
within which the breaching party has the opportunity to cure, if possible,
the breach.
In addition, cause for termination shall exist if Employee engages in any
of the following conduct while an employee of the Company: (1) conviction
of a felony offense, whether or not such offense was committed in
connection with Company's business; (2) theft, embezzlement, false entries
on records, misapplication of funds or property, misappropriation of any
asset, or any actual or constructive fraud; (3) gross neglect of duty
and/or willfully engaging in gross misconduct materially and demonstrably
injurious to Company; (4) at any time during employment at the Company,
except in connection with the Pegasus 20 Group, 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; (5)
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 Employee made in the ordinary course of business and as
part of Employee's investment portfolio. However, cause shall not be
deemed to exist merely because of a difference of opinion between Employee
and the Company, or any employees, directors or officers of either, as to
philosophy of management or other personal beliefs.
E-136
Exhibit 10.4
11) COMPETITION DURING AND AFTER TERM. Employee agrees that during the Term
hereof, and for a period of one year after the expiration of the Term, he
will not, either separately, jointly, or in association with others,
directly or indirectly, as an agent, employee, owner, partner,
stockholder, or otherwise, allow his name to be used by, or establish,
engage in, or become interested in any business substantially providing
services similar to those of the Company in the Commonwealth of
Pennsylvania or the States of New York or New Jersey, as long as Company,
or any person, firm, or corporation deriving title to the goodwill of, or
shares from it, carries on a like business therein. Notwithstanding the
preceding sentence, Employee shall be allowed to engage in or be
interested in businesses and activities provided that his interest or
involvement therein does not otherwise violate any other term or provision
of this Agreement. Company and Employee acknowledge that during the Term
of Employee's employment, Employee will acquire special knowledge and/or
skill that he can effectively utilize in competition with Company.
Employee agrees that the remedy at law for any breach by him of the
covenants contained herein will be inadequate, and that in the event of a
violation of the covenants contained herein, in addition to any and all
legal and equitable remedies which may be available, the said covenants
may be enforced by an injunction in a suit in equity, without the
necessity of proving actual damage, and that a temporary injunction may be
granted immediately upon the commencement of any such suit, and without
notice. If, in any judicial proceeding, a court shall refuse to enforce
any or all of the separate covenants deemed included in such action, then
such unenforceable covenants shall be deemed eliminated from the
provisions hereof for the purposes of such proceeding to the extent
necessary to permit the remaining separate covenants to be enforced in
such proceeding. Furthermore, if in any judicial proceeding a court shall
refuse to enforce any covenant by reason of the duration or extent
thereof, such covenant shall be construed to have only the maximum
duration or extent permitted by law.
12) SEVERABILITY. Nothing contained herein shall be construed to require the
commission of any act contrary to law. Should there be a conflict between
any of the provisions hereof and any present or future statute, law,
ordinance, regulation, or other pronouncement having the force of law, the
latter shall prevail, but the provision of this Agreement affected thereby
shall be curtailed and limited only to the extent necessary to bring it
within the requirements of the law, and the remaining provisions of this
Agreement shall remain in full force and effect.
13) DISPUTES. 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 court costs incurred in litigating or
otherwise settling or resolving such dispute whether or not an action is
brought or prosecuted to judgment. In construing the Agreement, none of
the parties hereto shall have any term or provision construed against such
party solely by reason of such party having drafted the same.
14) WAIVER. The waiver by the Company of a breach of any provision of this
Agreement by the Employee shall not operate or be construed as a waiver of
any subsequent breach by the Employee. No waiver shall be valid unless in
writing and signed by an authorized officer of the Company.
E-137
Exhibit 10.4
15) ASSIGNMENT. The Employee acknowledges that the services to be rendered by
him are unique and personal. Accordingly, the Employee may not assign any
of his rights or delegate any of his duties or obligations under this
Agreement. The rights and obligations of the Company under this Agreement
shall inure to the benefit of and shall be binding upon the successors and
assigns of the Company.
16) ENTIRE AGREEMENT. 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.
17) GOVERNING LAW. This Agreement shall be construed and enforced in
accordance with the laws of the State of Pennsylvania.
18) NOTICES. Notices shall be as given 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 Employee:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
If to Company:
Tech Aviation Service, Inc.,
c/o ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date and year first above written.
COMPANY: EMPLOYEE:
Tech Aviation Service, Inc.
By:
--------------------------------- --------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
E-138
Exhibit 10.4
EXHIBIT 4.B
Tech Aviation Service, Inc. shall establish an operating Plan upon the
execution hereof and also prior to each fiscal year and the Employee shall have
input into the development of this operating Plan.
The Employee shall be eligible while employed for an Incentive Bonus based
upon the operating income of the facility according to performance versus the
annual operating Plan and based on a two-level payout - a percentage of Base
Salary and an additional override on the difference between Actual and Plan
operating income:
DIFFERENCE IN
BASE SALARY OPERATING INCOME
PERFORMANCE V. PLAN PAY-OUT % PAY-OUT %
------------------- --------- ---------
95% or less 2.5% 0%
100 - 109.9% 10.0% 0%
110 - 114.9% 10.0% 2.5%
115 - 119.9% 10.0% 5.0%
120 - 124.9% 10.0% 7.5%
125 - 129.9% 10.0% 10.0%
130 - 134.9% 10.0% 12.5%
135 - 139.9% 10.0% 15.0%
140 - 144.9% 10.0% 17.5%
145 - 149.9% 10.0% 20.0%
150%+ 10.0% 25.0%
Example #1: The Operating Plan calls for $500,000 in operating income; the
Actual results are $545,000 or 9% greater than Plan. The Employee is eligible
for 10% of the Base Salary but is not eligible for any additional override.
Example #2: The Operating Plan calls for $500,000 in operating income; the
Actual results are $650,000 or 30% greater than Plan. The Employee is eligible
for 10% of the Base Salary PLUS 12.5% of the difference between Plan and Actual,
which in this example equals $18,750.
Example #3: The Operating Plan calls for $500,000 in operating income; the
Actual results are $800,000 or 60% greater than Plan. The Employee is eligible
for 10% of the Base Salary PLUS 25% of the difference between Plan and Actual,
which in this example equals $75,000.
E-139
