EXHIBIT 10.24
EMPLOYMENT AGREEMENT
BY AND BETWEEN
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
AND
MESA AIR GROUP, INC.
DATED AS OF MARCH 14, 2001
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (this "Agreement") made and entered into as of March
14, 2001, by and between Mesa Air Group, Inc., a Nevada corporation (the
"Company"), and ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ("Executive").
RECITALS
The Company and Executive are parties to an employment agreement dated as
of March 13, 1998, as amended on March 22, 2000. The parties have agreed to
enter into this Agreement, which supersedes the existing agreement.
ARTICLE I
DUTIES AND TERM
1.1 EMPLOYMENT. In consideration of their mutual covenants and other good
and valuable consideration, the receipt, adequacy and sufficiency of which are
acknowledged, the Company agrees to hire Executive, and Executive agrees to
remain in the employ of the Company, upon the terms provided in this Agreement.
1.2 POSITION AND RESPONSIBILITIES.
(a) Executive shall serve as the Chairman of the Board of Directors
and Chief Executive Officer of the Company. Executive agrees to perform
services, not inconsistent with his position, as are from time to time assigned
to him by the Board of Directors of the Company.
(b) During the period of his employment under this Agreement,
Executive shall devote substantially all of his business time, attention, skill
and efforts to the faithful performance of his duties under this Agreement, but
Executive shall have the right to engage in personal business and to participate
in charitable and civic activities, during normal business hours and otherwise,
as long as such business and activities do not unreasonably interfere with
Executive's duties to the Company.
1.3 TERM. The term of Executive's employment under this Agreement shall
commence on March 14, 2001, and shall continue, unless sooner terminated,
through March 13, 2006.
1.4 LOCATION. During the period of his employment under this Agreement,
Executive shall not be required, except with his prior written consent (which
may be withheld in his discretion), to relocate his principal place of
employment outside Maricopa County, Arizona. Required travel on the Company's
business shall not be deemed a relocation so long as Executive
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is not required to provide his services under this Agreement outside of Maricopa
County, Arizona, for more than 50% of his working days during any consecutive
six-month period.
ARTICLE II
COMPENSATION
For all services rendered by Executive in any capacity during his
employment under this Agreement, including, without limitation, services as a
director, officer or member of any committee of the Board of the Company or of
the board of directors of any subsidiary of the Company, the Company shall
compensate Executive as set forth in this Article II and as provided in Article
IV.
2.1 BASE SALARY. The Company shall pay to Executive an annual base salary
of not less than $200,000 (the "Base Salary") during the term of this Agreement.
Executive's Base Salary shall be paid every other week in equal installments.
The Base Salary shall be reviewed annually by the Board or a committee
designated by the Board, and the Board or such committee may, in its discretion,
increase the Base Salary. Notwithstanding the foregoing, beginning April 1,
2002, the Company shall increase the Base Salary effective each April 1 during
the term of this Agreement, by an amount which is at least equal to the
percentage increase in the Consumer Price Index, all items, Urban Wage Earners
and Clerical Workers, for the Phoenix-Mesa, AZ (MSA) from April of the
immediately prior year to April of the then current year. Subject to the consent
of Executive (which consent shall not be unreasonably withheld), the Company may
reduce the Base Salary under circumstances in which the Company has suffered
severe financial losses and has imposed cuts in salary of other officers on an
across the board basis, but any such reduction may not be at a greater
percentage than the reduction imposed on any other officer.
2.2 BONUS PAYMENT. The Company shall establish in each fiscal year during
the term of this Agreement an executive bonus plan to provide incentive
compensation to Executive. During the period of Executive's employment under
this Agreement, Executive shall be entitled to the bonus payments specified on
Exhibit A. Any bonus payable to Executive under the plan described in Exhibit A
is referred to as an "Incentive Bonus." Any Incentive Bonuses will be paid on a
quarterly basis, not later than 45 days after the end of each fiscal quarter (or
90 days after the end of any fiscal year), based on the Company's financial
statements in its Form 10-Q or Form 10-K, as the case may be; payments made with
respect to any fiscal quarter other than the last fiscal quarter of a fiscal
year of the Company will be made on an estimated basis (based on annualized
results), and the parties will account to one another and make appropriate
payment adjustments promptly after the financial statements for any fiscal year
become available. The Company in its discretion may pay bonuses to Executive in
addition to the Incentive Bonuses set forth in Exhibit A.
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2.3 STOCK OPTIONS.
(a) The Company confirms the grant to Executive, effective as of
April 1, 2001, of options to purchase 150,000 shares of stock at an exercise
price equal to the market value of the Company's common stock on April 1, 2001,
under the terms of the existing stock option plan, with the modifications set
forth in Section 2.3(c)(i), (ii), and (iii) below. In addition, as of April 1 of
each year during the term of this Agreement (or the next business day if April 1
of any year is not a business day), the Company shall issue options to purchase
not fewer than 150,000 shares of common stock of the Company (adjusted
appropriately for any stock dividend, stock split, spin-off, reorganization, or
similar transaction), under a new stock option plan, the terms of which are
described in Section 2.3(c).
(b) During the term of this Agreement and thereafter so long as any
stock option granted to Executive by the Company remains outstanding (whether
such stock option was granted prior to or after the date of this Agreement), the
Company shall loan to Executive an amount equal to the aggregate exercise price
of any such stock option, with such loan to be made upon Executive's giving of
notice to the Company that he is exercising a stock option and desires to have
the Company loan to him the exercise price of such stock option. Any such loan
shall be on a full recourse basis, shall be payable within 60 days, and shall be
on such other terms as are reasonably acceptable to Executive but that in any
event are no more favorable to Executive than would be available to Executive
from an unrelated third party. The proceeds from any such loan shall be used to
pay the exercise price of the pertinent stock options.
(c) Upon the execution of this Agreement, the Company shall execute
and deliver to Executive the Amendment to Stock Options in the form of Exhibit B
in order to cause Executive's existing stock options to be amended to provide as
follows: (i) allow assignment of options to family members and charitable
organizations; (ii) require registration of the stock on a Form S-8 and require
the Company to provide a Form S-3 for resales, if needed for Executive to be
able to resell freely stock acquired upon the exercise of stock options; (iii)
give Executive the right to pay the option exercise price with shares which have
been held by Executive for at least six months or with the surrender of stock
options. The terms of the new stock option plan shall be substantially the same
as apply in the existing stock option plan, except that the new stock option
plan shall include the provisions described in clauses (i), (ii), and (iii)
above, shall provide for immediate vesting of all options upon death or Total
Disability (as defined below), and shall provide that, if Executive remains
employed by the Company through March 13, 2004, or if, prior to March 14, 2004,
Executive is terminated without Cause, Executive terminates his employment for
Good Reason, or Executive dies or becomes Totally Disabled, then the expiration
date for exercise of such stock options shall be a date not earlier than ten
years from the date of grant of the stock option.
2.4 ADDITIONAL BENEFITS.
(a) GENERAL BENEFITS. During the term of this Agreement, Executive
shall be entitled (i) to participate in all employee benefit and welfare
programs, plans and arrangements
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(including, without limitation, pension, profit sharing, supplemental pension
and other retirement plans, insurance, hospitalization, medical and group
disability benefits, travel or accident insurance plans) and (ii) to receive
fringe benefits, such as dues and fees of professional organizations and
associations, in each case under (i) and (ii) to the extent that such programs,
plans, arrangements, and benefits are from time to time available to the
Company's executive personnel (the programs and benefits in (i) and (ii) are
referred to as "General Benefits"). During the period of his employment under
this Agreement, the Company shall continue to provide the General Benefits to
Executive at a level which shall in no event be less, in any material respect,
than the General Benefits made available to Executive by the Company as of the
date of this Agreement. Subject to the consent of Executive (which consent shall
not be unreasonably withheld), the Company may reduce the General Benefits under
circumstances in which the Company has suffered severe financial losses and has
imposed reductions in coverage of the General Benefits of other officers on an
across the board basis, but any such reduction may not be disproportionately
greater than the reduction imposed on any other officer.
(b) DEATH BENEFIT. The Company shall promptly (and in any event not
later than 60 days after this Agreement is executed) obtain term life insurance
on the life of Executive such that the aggregate death benefit under existing
and new policies held by the Company totals $5,000,000. Such insurance shall be
obtained under one or more policies from insurers reasonably acceptable to
Executive. As long as Executive is employed by the Company, (i) the Company
shall pay the premiums on the policy (or policies) and shall maintain the policy
(or policies) in full force and effect, and (ii) Executive shall have the
exclusive right to designate the beneficiary under such policy (or policies).
The Company shall assign the policy (or policies) to Executive, without any cost
to Executive, effective immediately after Executive ceases to be an employee of
the Company, regardless of the reason for Executive's termination of employment.
The Company shall not pledge or otherwise encumber the policy (or policies) at
any time.
(c) DISABILITY BENEFITS. The Company shall provide Executive with
the following disability benefits:
(i) During any period of disability, illness or incapacity
during the term of this Agreement which renders Executive at least
temporarily unable to perform the services required under this Agreement,
Executive shall receive the Base Salary payable under Section 2.1 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 Executive's Total
Disability (as defined below), which Total Disability continues during the
payment periods specified in this Section, the Company shall pay to
Executive, on a monthly basis, for the period specified below, an amount
(the "Disability Payment") equal to (A) one-twelfth of the sum of (1)
Executive's Base Salary in effect immediately prior to the time such Total
Disability occurs, plus (2) an amount equal to the greater of (x) the
Threshold Bonus or (y) one half of the sum of (i) the bonuses (whether
Incentive Bonuses or other bonuses) that have been paid to Executive with
respect to the two fiscal years immediately preceding the fiscal year in
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which the Total Disability occurs, and (ii) the bonuses (whether Incentive
Bonuses or other bonuses) that have been accrued with respect to the two
fiscal years immediately preceding the fiscal year in which the Total
Disability occurs but have not been paid (or if Executive has been
employed by the Company for less than two full fiscal years at the time of
such Total Disability, then an amount equal to the sum of such paid and
accrued bonuses with respect to the fiscal year immediately preceding the
fiscal year in which the Total Disability occurs), which payments shall be
due in full regardless of any compensation paid to Executive as a result
of his employment by any other person after the date that Total Disability
occurs, (B) reduced by the amount of any monthly payments under any policy
of disability income insurance paid for by the Company (including the
policy described in Section 2.4(c)(ii)) which payments are received during
the time when any Disability Payment is being made to Executive following
Executive's Total Disability. The Company shall pay the Disability Payment
to Executive in equivalent installments, at the same time or times as
would have been the case for payment of Base Salary if Executive had not
become Totally Disabled and had remained employed by the Company, and such
payments shall continue until the later of the expiration of the term of
this Agreement and 48 months, except that the Company's obligation to make
such payments shall cease upon the death of Executive. Upon Executive's
Total Disability, except as provided in this Agreement, all rights of
Executive under this Agreement shall terminate.
(ii) In order to provide a ready source of funds with which to
pay the benefits provided for in clause (i) above, if Executive becomes
disabled (determined in accordance with the policy described below) during
the term of this Agreement and such disability extends beyond 180 days,
then Executive shall be paid the benefits provided for under the
disability insurance policy issued by UNUM Life Insurance Company (Policy
#LAR 442810), which the Company agrees to maintain in full force and
effect during the term of this Agreement. The Company promptly (and in any
event not later than 60 days after this Agreement is executed) shall cause
such policy to be amended to the extent necessary to cause Executive to be
eligible for disability payments for a minimum of four years from the date
of such disability (that is, providing for 3 -1/2 years of coverage,
taking into account the 180-day coverage provided by the Company directly
under Section 2.4(c)(i)), to remove any exclusion for pre-existing
conditions (including any treatment or operation or complications arising
from the foregoing), and to increase the amount payable to a minimum of
$41,667 per month. To the extent the Company is unable to cause such
policy to be so amended, then the Company nonetheless shall be obligated
to provide such payments to Executive directly. Such coverage shall apply
regardless of whether such four-year period extends beyond the term of
this Agreement.
(d) RELOCATION EXPENSES. During the term of this Agreement, if
Executive's principal place of employment is relocated outside Maricopa County,
Arizona (with Executive's consent, in accordance with Section 1.4), the Company
shall reimburse Executive for all usual relocation expenses incurred by
Executive and his household in moving to the new location, including, without
limitation, moving expenses and rental payments for temporary living quarters
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in the area of relocation for a period not to exceed six months, real estate
brokerage commissions incurred by Executive in the sale of his then existing
principal residence, and loan financing charges and closing costs incurred in
connection with the acquisition and financing of a new residence.
(c) REIMBURSEMENT OF BUSINESS EXPENSES. During the term of this
Agreement, the Company shall, in accordance with standard Company policies, pay,
or reimburse Executive for, all reasonable travel and other expenses incurred by
Executive in performing his obligations under this Agreement. In addition,
during the term of this Agreement, the Company shall provide to Executive a
supplemental allowance, in the amount of $3,000 per month to be used by
Executive in his discretion for investigation of business opportunities and
strategic allegiances for the Company and for client and customer development.
(f) VACATIONS. During the term of this Agreement, 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 as applies to other executive officers of the Company.
In no event shall Executive be entitled to fewer than four weeks' annual
vacation. Unused vacation days may be carried over from one year to the next in
the maximum amount of four weeks' annual vacation; that is, to the extent that
vacation days to which Executive is entitled remain unused, such unused vacation
days will cumulate and be useable in any subsequent year, but no more than four
weeks' of annual vacation in the aggregate can be carried over from one year to
the next. Any vacation days which remain unused at the end of a fiscal year that
are in excess of such four weeks' annual vacation shall expire and shall
thereafter no longer be useable by Executive, but the Company shall compensate
Executive for any such unused vacation days in accordance with the formula set
forth in Section 4.1(b). Similarly, any unused paid holidays may be carried over
from one year to the next but not in excess of an aggregate of five days of paid
holidays may be carried over from one year to the next; to the extent any paid
holidays remain unused at the end of a fiscal year that are in excess of such
five paid holidays, such paid holidays shall expire and shall thereafter no
longer be useable by Executive, but the Company shall compensate Executive for
any such unused paid holidays in accordance with the formula set forth in
Section 4.1(b).
(g) DIRECTOR FEES. During the term of this Agreement, Executive
shall not be entitled to be paid any fees for attendance at meetings of the
Board of Directors or any committee of the Board of Directors (or the board or
committee of the board of any subsidiary).
(h) AIRLINE PASSES. During the term of this Agreement and for any
period during which the Consulting Agreement is in effect, the Company shall use
reasonable efforts to obtain for the benefit of Executive and Executive's
immediate family (Executive's spouse, Executive's children, and the spouse and
children of any of Executive's children), the right to fly on a complimentary
basis on the aircraft of other airlines, on a positive space basis. Such efforts
shall include negotiating in good faith with other carriers for such rights and
offering reciprocal rights to the executives (and their immediate family
members) of such other carriers. The Company shall provide to Executive and
Executive's immediate family, during the life of each
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such individual, the right to fly on a complimentary basis on any aircraft
operated by the Company or any affiliate at any time on a positive space basis;
the Company shall use its best efforts to cause any successor or subsequent
successor to the business or assets of the Company to grant such rights as to
all routes operated by such successor (or subsequent successor) and any of its
affiliates.
(i) USE OF COMPANY AIRCRAFT. During the term of this Agreement, the
Company shall provide to Executive, for Executive's personal use or business use
(or a combination of such uses), at no cost to Executive, the use of any Company
owned or operated aircraft selected by Executive (together with pilots, fuel,
landing fees, and other related costs and personnel associated with such use),
for up to 100 flight hours per calendar year. The selection of aircraft and the
scheduling of the use of such aircraft shall be subject to reasonable
requirements of the Company concerning availability of such aircraft and
personnel to operate such aircraft.
(j) PROFESSIONAL SERVICES. During the term of this Agreement, 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 $10,000 for calendar
year 2001, and $5,000 for each calendar year thereafter during the term of this
Agreement. 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.
(k) EXECUTIVE SECURITY. During the term of this Agreement, the
Company shall provide to Executive such security services as are reasonably
necessary for the protection of the life and property of Executive and
Executive's immediate family members.
2.5 PAYMENT OF EXCISE TAXES . If any payment received by Executive under
this Agreement or under the Consulting Agreement provided for in Section 4.3(i),
as a result of or following any termination of employment under this Agreement,
is subject to the excise tax imposed by Section 4999 of the Internal Revenue
Code of 1986 (as amended from time to time, the "Code"), or any successor or
similar provision of the Code (the "Excise Tax"), the Company shall pay
Executive an additional cash amount (the "Gross Up") such that the net after-tax
amount received by Executive under this Agreement is the same as if the Excise
Tax had not applied to any payments made under this Agreement. The Company shall
pay such amounts promptly after the calculation referred to in Section 2.6 has
been made.
2.6 CERTAIN ADJUSTMENT PAYMENTS . For purposes of determining the Gross
Up, Executive shall be deemed to pay the federal income tax at the highest
marginal rate of taxation (currently 39.6%) in the calendar year in which the
payment to which the Gross Up applies is to
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be made. The determination of whether such Excise Tax is payable and the amount
of the Excise Tax shall be made upon the opinion of a national accounting firm
selected by Executive and reasonably acceptable to the Company. If such opinion
is not finally accepted by the Internal Revenue Service upon audit or otherwise,
then appropriate adjustments shall be computed (with interest at the rate
required to be paid by Executive under the Code and with Gross Up, if
applicable) by such tax counsel based upon the final amount of the Excise Tax so
determined, and (a) any additional amount due Executive as a result of such
adjustment shall be paid to Executive by the Company in cash in a lump sum
within 30 days after such computation, or (b) any amount due the Company as a
result of such adjustment shall be paid to the Company by Executive in cash in a
lump sum within 30 days after such computation.
2.7 DEFERRED COMPENSATION AGREEMENT . Upon execution of this Agreement by
the parties and on March 14 of each year thereafter during the term of this
Agreement, the Company shall contribute $200,000 to an account for the benefit
of Executive under the Deferred Compensation Plan in the form of the attached
Exhibit C.
ARTICLE III
TERMINATION OF EMPLOYMENT
3.1 DEATH OR RETIREMENT OF EXECUTIVE . Executive's employment under this
Agreement shall automatically terminate upon the death or Retirement of
Executive.
3.2 BY EXECUTIVE . Executive shall be entitled to terminate his employment
under this Agreement by giving Notice of Termination to the Company:
(a) for Good Reason;
(b) at any time without Good Reason.
3.3 BY COMPANY . The Company shall be entitled to terminate Executive's
employment under this Agreement by giving Notice of Termination to Executive:
(a) in the event of Executive's Total Disability;
(b) for Cause; and
(c) at any time without Cause.
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ARTICLE IV
COMPENSATION UPON TERMINATION OF EMPLOYMENT
If Executive's employment under this Agreement is terminated prior to
March 13, 2006 (or if the provisions of clause (y) of Section 4.3 apply), then
except for any other rights or benefits specifically provided for in this
Agreement, the Company shall be obligated to provide compensation and benefits
to Executive following his period of employment only as follows:
4.1 UPON TERMINATION FOR DEATH OR TOTAL DISABILITY. If Executive's
employment under this Agreement is terminated by reason of his death or Total
Disability, the Company shall:
(a) pay Executive (or his estate) any Base Salary which has accrued
but not been paid as of the termination date (the "Accrued Base Salary");
(b) pay Executive (or his estate) for unused vacation days and paid
holidays accrued as of the termination date in an amount equal to his Base
Salary multiplied by a fraction the numerator of which is the number of accrued
unused vacation days and paid holidays, and the denominator of which is 260 (the
"Accrued Vacation Payment");
(c) reimburse Executive (or his estate) for expenses incurred by him
prior to the date of termination which are subject to reimbursement pursuant to
this Agreement (the "Accrued Reimbursable Expenses");
(d) provide to Executive (or his estate) any accrued and vested
benefits required to be provided by the terms of any Company-sponsored benefit
plans or programs (the "Accrued Benefits"), together with any benefits required
to be paid or provided in the event of Executive's death or disability under
applicable law;
(e) pay Executive (or his estate) any Incentive Bonus or other bonus
with respect to a prior fiscal quarter which has accrued but has not been paid;
(f) pay Executive (or his estate) any payment under the Deferred
Compensation Plan which has accrued but has not been paid to the account
provided for in such plan;
(g) pay Executive the amounts due under Section 2.4; and
(h) permit Executive (or his estate) to exercise all vested
unexercised stock options (including stock options which by their terms become
exercisable upon death or disability) and warrants outstanding at the
termination date in accordance with the terms of the plans and agreements
pursuant to which such options or warrants were issued.
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4.2 UPON TERMINATION BY COMPANY FOR CAUSE OR BY EXECUTIVE WITHOUT GOOD
REASON. If Executive's employment is terminated by the Company for Cause, or if
Executive terminates his employment with the Company prior to March 14, 2004,
other than (x) upon Executive's death or Total Disability or (y) for Good
Reason, the Company shall:
(a) pay Executive the Accrued Base Salary;
(b) pay Executive the Accrued Vacation Payment;
(c) reimburse Executive for the Accrued Reimbursable Expenses;
(d) provide Executive the Accrued Benefits, together with any
benefits required to be paid or provided under applicable law;
(e) pay Executive any accrued Incentive Bonus or other bonus with
respect to a prior fiscal quarter which has accrued but has not been paid;
(f) pay Executive any payment under the Deferred Compensation Plan
which has accrued but has not been paid to the account provided for in such
plan; and
(g) permit Executive to exercise all vested unexercised stock
options and warrants outstanding at the termination date in accordance the terms
of the plans and agreements pursuant to which such options and warrants were
issued.
4.3 UPON TERMINATION BY THE COMPANY WITHOUT CAUSE, OR BY EXECUTIVE FOR
GOOD REASON, OR BY EXECUTIVE AFTER MARCH 13, 2004, OR UPON EXPIRATION OF THIS
AGREEMENT . If Executive's employment is terminated by the Company without
Cause, or if Executive's employment is terminated by Executive for Good Reason,
or if Executive's employment is terminated after March 13, 2004, by Executive
other than upon Executive's death or Total Disability and other than for Good
Reason, or if the term of this Agreement expires (whether or not Executive
remains employed by the Company), the Company shall:
(a) pay Executive the Accrued Base Salary;
(b) pay Executive the Accrued Vacation Payment;
(c) reimburse Executive the Accrued Reimbursable Expenses;
(d) provide Executive the Accrued Benefits, together with any
benefits required to be paid or provided under applicable law;
(e) pay Executive any Incentive Bonus or other bonus with respect to
a prior fiscal quarter which has accrued but has not been paid;
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(f) pay Executive any payment under the Deferred Compensation Plan
which has accrued but has not been paid to the account provided for in such
plan, and pay directly to Executive on March 14 of each year after such
termination through March 14, 2005, twice the amount that would have been
payable to the account established under such plan if this Agreement had not
been terminated; and
(g) pay Executive, commencing on the thirtieth day following the
termination date, 36 monthly payments equal to one-sixth of the sum of (1)
Executive's Base Salary in effect immediately prior to the time such termination
occurs, plus (2) an amount equal to the greater of (x) the Threshold Bonus and
(y) one half of the sum of (i) the bonuses (whether Incentive Bonuses or other
bonuses) that have been paid to Executive with respect to the two fiscal years
immediately preceding the fiscal year in which the termination occurs, and (ii)
the bonuses (whether Incentive Bonuses or other bonuses) that have been accrued
with respect to the two fiscal years immediately preceding the fiscal year in
which the termination occurs but have not been paid (or if Executive has been
employed by the Company for less than two full fiscal years at the time of such
termination, then an amount equal to the sum of such paid and accrued bonuses
with respect to the fiscal year immediately preceding the fiscal year in which
the termination occurs), which payments shall be due in full regardless of any
compensation paid to Executive as a result of his employment by any other person
after the termination date.
(h) maintain in full force and effect, for Executive's and his
eligible beneficiaries' continued benefit, all of the General Benefits, for a
period of 36 months following the termination date of his employment under this
Agreement, except to the extent that, as to any such General Benefit, Executive
receives the substantial equivalent of such General Benefit under the Consulting
Agreement or as a result of his employment with another employer after the
termination date. If Executive's continued participation in any General Benefit
is not permitted under the terms of the plan, program or arrangement under which
the General Benefit was provided to Executive by the Company, the Company shall
arrange to provide Executive with the General Benefit substantially similar to
the General Benefit which Executive would have been entitled to receive under
such plan, program or arrangement;
(i) except with respect to a termination upon Executive's Total
Disability or death, on the effective date of such termination, at the election
of Executive, the Company and Executive shall enter into a consulting agreement
(the "Consulting Agreement") in the form of Exhibit D; and
(j) Executive shall have the right to exercise all unexercised stock
options and warrants outstanding at the termination date in accordance with the
terms of the plans and agreements pursuant to which such options and warrants
were issued, including the provisions of Section 2.3(c).
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4.4 CALL RIGHTS.
(a) Upon any termination of employment under Section 4.1 or Section
4.3, the Company shall have the right to redeem any stock option, whether vested
or unvested, that is held by Executive as of the date of such termination and
that is designated by the Company in a notice to Executive (a "Call Election"),
at a price equal to 100% of the Black-Scholes Value of such stock option.
(b) The Black-Scholes Value for any option shall be determined using
the Black-Scholes formula but in any event shall be not less than the Market
Price for the common stock on the date the Call Election is made (the
"Calculation Date"), less the exercise price under the stock option. The
Black-Scholes Value shall be calculated by an independent major investment
banking firm selected by the Company, subject to the approval of Executive; if
Executive does not approve the firm selected by the Company, then the
Black-Scholes Value shall be the average of the amount calculated by the firm
selected by Executive and a major investment banking firm selected by the
Company. The Black-Scholes Value shall be calculated as of the Calculation Date,
and any unvested options for this purpose shall be treated as if fully vested.
The Company shall bear the cost of the firm or firms that conduct the
Black-Scholes valuation. In determining the Black-Scholes Value of any option,
the following rules will apply:
(i) The time to maturity of any option will be equal to the
period beginning on the Calculation Date and ending on the final
expiration date of the option (the "Option Life"), without regard to any
analysis of the effect, or likelihood of occurrence, of any event that
might cause the expiration date to occur sooner.
(ii) The "risk free rate" as to any option will be determined
as of the Calculation Date, by the U.S. Treasury YTM, with a maturity
approximately equal to the Option Life, as stated by the Federal Reserve.
(iii) The volatility factor will be based on an historical
sampling of daily stock prices over a period of not less than 24 months
from the valuation date, and not more than 120 months from the valuation
date, whichever period yields the highest value.
(iv) No illiquidity or other discount will be applied to the
value determined by application of the Black-Scholes formula, whether by
reason of the fact that the options are not publicly traded or otherwise.
(c) Unless Executive consents, the Company shall not exercise a Call
Election to the extent that the Company would be unable, without violating the
provisions of the General Corporation Law of Nevada or the fraudulent conveyance
laws of any state, to pay any amount due to Executive under Section 4.4(a); if
Executive consents to the exercise of a Call Election by the Company under such
circumstances, then, to the extent that the Company is unable, without violating
the provisions of the General Corporation Law of Nevada, to pay any amount due
Executive under Section 4.4(a), the Company's obligation to make such payment
shall be
12
deferred, but only until the legal restriction lapses, at which time the payment
shall be due, and in any event, all amounts that otherwise would have been
payable but for such restriction shall bear interest at the rate provided for in
Section 6.11, from the date such payments would have been payable (but for such
legal restriction) until the date they actually are MADE.
(d) All payments due by the Company in connection with any Call
Election are payable within 10 business days after the Call Election is made.
(e) Any stock option redeemed by the Company under Section 4.4(a)
shall be cancelled.
ARTICLE V
RESTRICTIVE COVENANTS
5.1 CONFIDENTIAL INFORMATION AND MATERIALS. Executive agrees that during
the course of his employment with the Company, he has obtained and shall likely
obtain in the future "Confidential Information." "Confidential Information" is
information concerning the Company which the Company attempts to keep
confidential, has not been publicly disclosed by the Company, is not a matter of
common knowledge in the airline industry, and was not known by Executive prior
to his employment by the Company, including certain information relating to the
business plans, marketing plans or programs, forecasts, statistics relating to
routes and markets, contracts, customers, compensation arrangements, and
business opportunities. Executive agrees that the Confidential Information is
proprietary to the Company.
5.2 GENERAL KNOWLEDGE . The general skills and experience gained by
Executive during Executive's employment or engagement by the Company, and
information publicly available without breach of any duty owed by any person to
the Company or generally known within the airline industry, is not considered
Confidential Information. Executive is not restricted from working with a person
or entity which has independently developed information or materials similar to
the Confidential Information, but in such a circumstance, Executive agrees not
to disclose the fact that any similarity exists between the Confidential
Information and the independently developed information and materials, and
Executive understands that such similarity does not excuse Executive from the
non-disclosure and other obligations in this Agreement.
5.3 EXECUTIVE OBLIGATIONS AS TO CONFIDENTIAL INFORMATION AND MATERIALS .
During Executive's employment or engagement by the Company, Executive shall have
access to the Confidential Information and shall occupy a position of trust and
confidence with respect to the Confidential Information and the Company's
affairs and business. Executive agrees to take the following steps to preserve
the confidential and proprietary nature of the Confidential Information:
(a) NON-DISCLOSURE. During and for a period of two years after
Executive's Employment or engagement by the Company, Executive shall not use,
disclose or otherwise
13
permit any person or entity access to any of the Confidential Information other
than as required in the performance of Executive's duties with the Company and
other than is required to be disclosed by law or by any court, administrative
agency, or arbitration panel.
(b) PREVENT DISCLOSURE. During and for a period of two years after
Executive's Employment or engagement by the Company, other than as required in
the performance of Executive's duties with the Company and other than is
required to be disclosed by law or by any court, administrative agency, or
arbitration panel, Executive shall take all reasonable precautions to prevent
disclosure of the Confidential Information to unauthorized persons or entities,
other than is required to be disclosed by law or by any court, administrative
agency, or arbitration panel.
(c) RETURN ALL MATERIALS. Upon termination of Executive's employment
or engagement by the Company for any reason whatsoever, or earlier if requested
by the Company, Executive shall deliver to the Company all tangible materials
embodying the Confidential Information, including any documentation, records,
listings, notes, data, sketches, drawings, memoranda, models, accounts,
reference materials, samples, machine-readable media and equipment which in any
way relate to the Confidential Information and shall not retain any copies of
any of the above materials.
ARTICLE VI
MISCELLANEOUS
6.1 DEFINITIONS . For purposes of this Agreement, the following terms
shall have the following meanings:
(a) "Accrued Base Salary" - as defined in Section 4.1(a);
(b) "Accrued Benefits" - as defined in Section 4.1(d);
(c) "Accrued Reimbursable Expenses" - as defined in Section 4.1(c);
(d) "Accrued Vacation Payment" - as defined in Section 4.1(b);
(e) "Base Salary" - as defined in Section 2.1;
(f) "Board" - shall mean the Board of Directors of the Company;
(g) "Cause" shall mean the occurrence of any of the following:
(i) Executive's willful misconduct with respect to the
Company's business which results in a material detriment to the Company;
14
(ii) Executive is convicted of, or enters a plea of nolo
contendere with respect to, a felony offense; or
(iii) the continued failure or refusal by Executive, other
than by reason of Executive's disability, to perform the duties required
of him by this Agreement, which failure or refusal is material and is not
cured within 45 days following receipt by Executive of written notice from
the Board specifying the factors or events constituting such failure or
refusal, except that, as to any failure or refusal that is curable but
cannot reasonably be cured within such 45-day period, no Cause shall be
deemed to have occurred unless Executive fails to take reasonable steps to
cure such failure or refusal within such 45-day period, and furthermore,
no failure of Executive to satisfy any goals, forecasts, or other
financial or business criteria established by the Company, standing alone,
shall constitute Cause.
(h) "Change of Control" shall mean and shall be deemed to have
occurred if:
(i) After the date of this Agreement, any "person" (as such
term is used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), or any successor provision), or
any other persons who the Board of Directors determines in good faith is
acting as a group, becomes the beneficial owner (within the meaning of
Rule 13d-3 under the Exchange Act or any successor provision) directly or
indirectly of securities of the Company representing 30% or more of the
combined voting power of the Company's then outstanding securities
ordinarily having the right to vote at an election of directors;
(ii) Individuals who, as of the date of this Agreement,
constitute the Board (the "Incumbent Board") cease for any reason to
constitute at least 60% of the members of the Board, except that any
person who becomes a member of the Board subsequent to the date of this
Agreement whose election, or nomination for election by the Company's
stockholders was approved by a vote of at least 60% of the members then
comprising the Incumbent Board (other than an election or nomination of an
individual whose initial assumption of office is in connection with an
actual or threatened election contest relating to the election of
directors of the Company) shall be, for purposes of this Agreement,
considered as though such person were a member of the Incumbent Board; or
(iii) Consummation of
(A) a reorganization, merger, consolidation, or sale or
other disposition of all or substantially all of the assets of the
Company, in each case, with or to a corporation or other person or entity
(1) of which persons who were the holders of each
class of the Company's capital stock immediately prior to such
transaction do not
15
receive voting securities, as a result of their ownership of
such capital stock immediately prior to such transaction, that
constitute both
(x) more than 51% of each class of capital stock
and
(y) more than 51% of the combined voting power of
the outstanding voting securities entitled to vote
generally in the election of directors of the
reorganized, merged, consolidated or purchasing
corporation (or in the case of a non-corporate person
or entity, functionally equivalent voting power), or
(2) 80% of the members of the Board of which
corporation (or functional equivalent in the case of a
non-corporate person or entity) were not members of the
Incumbent Board at the time of the execution of the initial
agreement providing for such reorganization, merger,
consolidation or sale;
(B) the sale or other disposition of any material route
system operated by the Company or any subsidiary (regardless of how such
sale or disposition is effected); for this purpose a route system is
"material" if the gross revenues attributable to such route system exceed
or would exceed 50% of the Company's gross revenues on a consolidated
basis or if the gross profits reasonably attributable to such route system
exceed or would exceed 50% of the gross profits of the Company on a
consolidated basis, either
(x) for the fiscal year of the Company immediately
prior to the sale or disposition or
(y) based on reasonable projections, for the
fiscal year in which the sale or disposition occurs; or
(C) a liquidation or dissolution of the Company.
(i) "Confidential Information" - as defined in Section 5.1;
(j) "Continued Benefits" - as defined in Section 4.3(g);
(k) "Good Reason" shall mean the occurrence of any of the following:
(i) Any change by the Company in Executive's title, or any
significant diminishment in Executive's function, duties or
responsibilities from those associated with his functions, duties or
responsibilities as of March 14, 2001;
16
(ii) Any material breach of this Agreement or any other
agreement between the Company and Executive (and for purposes of this
Agreement, any default by the Company to make any payment or to provide
any fringe benefit shall be considered material) which remains uncured for
a period of 10 days after Executive gives the Company notice of such
breach specifying in reasonable detail the event(s) constituting such
breach;
(iii) Except with Executive's prior written consent,
relocation of Executive's principal place of employment to a location
outside of Maricopa County, Arizona, or requiring Executive to travel on
the Company's business more than is required by Section 1.4; or
(iv) The occurrence of a Change of Control and the expiration
of 90 days.
(l). "Incentive Bonus" - as defined in Section 2.2;
(m) "Market Price" means the officially quoted closing price of the
common stock of the Company, as reported by the principal exchange on which the
common stock of the Company is traded for the date in question. If there are no
transactions on such date, the Market Price shall be determined as of the
immediately preceding date on which there were transactions. If no such prices
are reported on such exchange, then Market Price shall mean the average of the
high and low sale prices for the common stock of the Company (or if no sales
prices are reported, the average of the high and low bid prices) as reported by
a quotation system of general circulation to brokers and dealers. If the common
stock of the Company is not traded on any exchange or in the over-the-counter
market, the Market Price of the common stock of the Company on any date shall be
determined in good faith by the parties.
(n) "Notice of Termination" shall mean a notice which shall indicate
the specific termination provision of this Agreement relied upon and shall set
forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination of Executive's employment under the provision so
indicated. Each Notice of Termination shall be delivered at least 30 days prior
to the effective date of termination.
(o) "Prime Rate" means the prime rate announced by The Wall Street
Journal from time to time.
(p) "Retirement" shall mean the attainment of age 65;
(q) "Threshold Bonus" shall mean a cash bonus equal to $105,000
(which is based on the "Threshold" level of bonus under "Bonus Level Fiscal
2001" as set forth in Exhibit A).
17
(r) "Total Disability" or "Totally Disabled" shall mean Executive's
failure substantially to perform his duties under this Agreement on a full-time
basis for a period exceeding 180 consecutive days or for periods aggregating
more than 180 days during any twelve-month period as a result of incapacity due
to physical or mental illness, or the occurrence or existence of a condition
that would permanently render Executive unable to substantially perform his
duties under this Agreement on a full-time basis. If there is a dispute as to
whether Executive is or was physically or mentally unable to perform his duties
under this Agreement, such dispute shall be submitted for resolution to a
licensed physician selected by Executive but subject to the reasonable approval
of the Company. If such a dispute arises, Executive shall submit to such
examinations and shall provide such information as such physician may request,
and the determination of the physician as to Executive's physical or mental
condition shall be binding and conclusive.
6.2 KEY MAN INSURANCE . In addition to the insurance policy described in
Section 2.4(c), the Company shall have the right, in its sole discretion, to
purchase "key man" insurance on the life of Executive. The Company shall be the
owner and beneficiary of any such policy. If the Company elects to purchase such
a policy, Executive shall take such physical examinations and supply such
information as may be reasonably requested by the insurer.
6.3 SUCCESSORS, BINDING AGREEMENT . This Agreement shall be binding upon
and run to the benefit of the Company, its successors and assigns, and shall
inure to the benefit of and be enforceable by Executive's personal or legal
representatives, beneficiaries, designees, executors, administrators, heirs,
distributees, devisees and legatees.
6.4 MODIFICATION; NO WAIVER . This Agreement may not be modified or
amended except by an instrument in writing signed by the parties to this
Agreement. No term or condition of this Agreement shall be deemed to have been
waived, nor shall there be any estoppel against the enforcement of any provision
of this Agreement, except by written instrument by the party charged with such
waiver or estoppel. No such written waiver shall be deemed a continuing waiver
unless specifically stated in such waiver, and each such waiver shall operate
only as to the specific term or condition waived and shall not constitute a
waiver of such term or condition for the future or as to any other term or
condition.
6.5 SEVERABILITY . The covenants and agreements contained in this
Agreement are separate and severable and the invalidity or unenforceability of
any one or more of such covenants or agreements, if not material to the
employment arrangement that is the basis for this Agreement, shall not affect
the validity or enforceability of any other covenant or agreement contained in
this Agreement. If, in any judicial proceeding, a court shall refuse to enforce
one or more of the covenants or agreements contained in this Agreement because
the duration thereof is too long, or the scope thereof is too broad, it is
expressly agreed between the parties to this Agreement that such duration or
scope shall be deemed reduced to the extent necessary to permit the enforcement
of such covenants or agreements.
18
6.6 NOTICES . All the notices and other communications required or
permitted under this Agreement shall be in writing and shall be delivered
personally or sent by registered or certified mail, return receipt requested, to
the parties to this Agreement at the following addresses:
If to the Company, to it at:
Mesa Air Group, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Chair of Board of Directors
If Executive, to him at:
4840 Grandview
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
With a copy to:
▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.C.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
633 17th Street, Suite 3000
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Notices shall be deemed to have been given and received upon personal delivery
or three business days after having been deposited, if sent by registered or
certified mail.
6.7 ASSIGNMENT . This Agreement and any rights under this Agreement shall
not be assignable by either party without the prior written consent of the other
party (which may be withheld in the discretion of such other party) except as
otherwise specifically provided for in this Agreement.
6.8 ENTIRE UNDERSTANDING . This Agreement (together with the Exhibits
incorporated as a part of this Agreement) constitutes the entire understanding
between the parties to this Agreement and no agreement, representation, warranty
or covenant has been made by either party except as expressly set forth in this
Agreement.
6.9 EXECUTIVE'S REPRESENTATIONS . Executive represents and warrants that
neither the execution and delivery of this Agreement nor the performance of his
duties under this Agreement violates the provisions of any other agreement to
which he is a party or by which he is bound.
6.10 INTEREST ON PAST DUE AMOUNTS; ATTORNEYS FEES . All amounts under this
Agreement that are not paid when due shall bear interest at the rate of 4% per
annum above the Prime Rate, from the date such payments were due until paid. In
addition, any party who
19
breaches this Agreement shall be obligated to pay the reasonable attorneys fees
and costs incurred by the other party in seeking to enforce the terms of this
Agreement.
6.11 GOVERNING LAW . THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH
AND GOVERNED FOR ALL PURPOSES BY THE LAWS OF THE STATE OF ARIZONA APPLICABLE TO
CONTRACTS EXECUTED AND WHOLLY PERFORMED WITHIN SUCH STATE.
Mesa Air Group, Inc. (Company)
By: _________________________________
Title: ______________________________
_____________________________________
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ (Executive)
20
EXHIBIT A
MINIMUM INCENTIVE BONUS
A-1
EXHIBIT B
AMENDMENT TO EXISTING STOCK OPTIONS
B-1
EXHIBIT C
DEFERRED COMPENSATION AGREEMENT
C-1
EXHIBIT D
CONSULTING AGREEMENT
D-1
PAGE
ARTICLE I - DUTIES AND TERM............................................. 1
1.1 Employment............................................ 1
1.2 Position and Responsibilities......................... 1
1.3 Term.................................................. 1
1.4 Location.............................................. 1
ARTICLE II - COMPENSATION............................................... 2
2.1 Base Salary........................................... 2
2.2 Bonus Payment......................................... 2
2.3 Stock Options......................................... 3
2.4 Additional Benefits................................... 3
2.5 Payment of Excise Taxes............................... 7
2.6 Certain Adjustment Payments........................... 7
2.7 Deferred Compensation Agreement....................... 8
ARTICLE III - TERMINATION OF EMPLOYMENT................................. 8
3.1 Death or Retirement of Executive...................... 8
3.2 By Executive.......................................... 8
3.3 By Company............................................ 8
ARTICLE IV - COMPENSATION UPON TERMINATION OF EMPLOYMENT................ 8
4.1 Upon Termination for Death or Total Disability........ 9
4.2 Upon Termination by Company for Cause or by Executive
Without Good Reason................................... 9
4.3 Upon Termination by the Company Without Cause, or
by Executive for Good Reason, or by Executive After
March 13, 2004, or Upon Expiration of this Agreement.. 10
4.4 Call Rights........................................... 11
ARTICLE V - RESTRICTIVE COVENANTS....................................... 12
5.1 Confidential Information and Materials................ 12
5.2 General Knowledge..................................... 13
5.3 Executive Obligations as to Confidential Information
and Materials......................................... 13
ARTICLE VI - MISCELLANEOUS.............................................. 14
6.1 Definitions........................................... 14
6.2 Key Man Insurance..................................... 17
6.3 Successors, Binding Agreement......................... 17
6.4 Modification; No Waiver............................... 18
i
6.5 Severability.......................................... 18
6.6 Notices............................................... 18
6.7 Assignment............................................ 19
6.8 Entire Understanding.................................. 19
6.9 Executive's Representations........................... 19
6.10 Interest on Past Due Amounts; Attorneys Fees.......... 19
6.11 Governing Law......................................... 20
ii
EXHIBIT A
INCENTIVE BONUS
----------------------------------------------------------------
BONUS LEVEL % CHANGE QUARTERLY ANNUAL
FISCAL 2001(1) IN EPS (2) AMOUNT (3) AMOUNT (4)
----------------------------------------------------------------
Minimum positive $ 13,125 $ 52,500
----------------------------------------------------------------
Threshold 5% $ 26,250 $ 105,000
----------------------------------------------------------------
Target 10% $ 52,500 $ 210,000
----------------------------------------------------------------
Maximum 15% $ 105,000 $ 420,000
----------------------------------------------------------------
Note 1 - For Each fiscal year only the % Change in EPS will be reviewed. The
% Change in EPS will not be greater than the initial year.
Note 2 - EPS is defined as gross profit/loss before taxes and one-time
non-recurring items divided by basic outstanding shares. These percentages
will change annually but not be greater then the initial year.
Note 3 - The Quarterly Amount will be paid for each of the first three
fiscal quarters based on the 10Q financial reports filed with the SEC. The
Annual Amount will be paid for the fourth quarter less any amounts paid
for the first three quarters based on the 10K financial reports filed with
the SEC. These amounts will not be decreased over the term of the
agreement.
Note 4 - These amounts will not be decreased over the term of the agreement.
EXHIBIT B
AMENDMENT TO STOCK OPTIONS
This agreement (this "Agreement") is between Mesa Air Group, Inc.
("Mesa") and ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇▇") and is dated as of March 14,
2001.
RECITALS
As of the date of this Agreement, Mesa has granted to ▇▇▇▇▇▇▇▇
options (the "Options") at various exercise prices under Mesa's Key Officers
Stock Option Plan (the "Plan") to purchase _______ shares of common stock
("Shares") of Mesa. Mesa and ▇▇▇▇▇▇▇▇ are entering into a new employment
agreement (the "Employment Agreement") as of the date of this Agreement. In
consideration for the mutual obligations undertaken by Mesa and ▇▇▇▇▇▇▇▇ in the
Employment Agreement, and for other good and valuable consideration, Mesa and
▇▇▇▇▇▇▇▇ are entering into this Agreement, pursuant to which certain terms
relevant to the Options are being modified.
AGREEMENT
1. Amendments. The terms of the Options are amended as
follows:
(a) Notwithstanding any prohibition in the Plan to the
contrary, upon written notice to Mesa, ▇▇▇▇▇▇▇▇ may
assign any or all of the Options at any time to any
member of his immediate family (which for this
purpose is defined as his spouse, any child by blood
or adoption, any grandchild by blood or adoption, and
any trust, partnership, limited liability company, or
other entity whose primary beneficiaries include one
or more of any such family members), and to any
charitable organization (which for this purpose means
any organization described in Section 501(c)(3) or
501(c)(4) of the Internal Revenue Code of 1986, as
amended).
(b) Mesa will use its best efforts (i) to keep in effect
a registration statement under the Securities Act of
1933, as amended (or any successor statute)
(collectively the "1933 Act") with respect to the
shares underlying the Options for as long as any of
the Options remains unexercised, (ii) to keep in
effect a registration statement under the 1933 Act
with respect to the resale of any such shares, to the
extent necessary to permit ▇▇▇▇▇▇▇▇ or any transferee
of such shares to resell such shares without any
restrictions on the resale of such shares under the
1933 Act, (iii) to comply with any registration or
similar requirements under the laws of any state to
the extent necessary to permit ▇▇▇▇▇▇▇▇ or any
transferee of such shares to resell such shares without
any restrictions on the resale of such shares under such
laws and regulations, (iv) to comply with all state and
federal laws and regulations regarding disclosure, so as
to permit ▇▇▇▇▇▇▇▇ and any transferee to resell the
shares underlying the Options without liability under
such laws and regulations, and (iv) to cause all shares
underlying any Option to be listed or admitted to
trading on any securities exchange on which the Shares
have been listed or admitted to trading, at the time any
Option is exercised.
(c) Notwithstanding the provisions of the last sentence
of Section 4(f) of the Plan, the Board shall permit
the exercise of an Option to be made with shares of
common stock owned by ▇▇▇▇▇▇▇▇ having a fair market
value (as determined in Section 3(d) of the Plan) on
the exercise date equivalent to the amount of
payment, or any combination of cash and such shares
equal to such amount, as long as any shares used for
such purpose are fully vested shares and have been
held by ▇▇▇▇▇▇▇▇ for at least six months prior to the
date of exercise of the Option.
2. Effect of Amendment. The parties intend that the terms of the
Stock Option Plan and the Options remain in full force and effect, except to the
extent the terms of the Options have been amended by this Agreement. Mesa and
▇▇▇▇▇▇▇▇ agree that the foregoing amendments shall not be considered to be
"material" for purposes of Section 4(b)(v) of the Stock Option Plan and
therefore do not require the approval of the shareholders of Mesa.
MESA AIR GROUP, INC.
By:_________
Title:______
____________
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇