Document:

Unassociated Document

    NEITHER
THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE
SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
LAWS.  THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED
OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR
THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION
OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY
ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS
SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID
ACT.  NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN
CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING
ARRANGEMENT SECURED BY THE SECURITIES.

    

    
      	 
      	
              Right
      to Purchase ______shares of Common Stock of Eclips Media Technologies Inc.
      (subject to adjustment as provided
herein)

            

    

    

    COMMON
STOCK PURCHASE WARRANT

    

    
      	
              No. 

            	
              Issue
      Date: __________

            

    

     

    ECLIPS MEDIA
TECHNOLOGIES, INC., a corporation organized under the laws of the State
of Delaware (the “Company”), hereby certifies
that, for value received, _________, or its assigns (the “Holder”), is entitled, subject
to the terms set forth below, to purchase from the Company at any time after the
Issue Date until 5:00 p.m., E.S.T on _________ (the “Expiration Date”), up to
______ fully paid and non-assessable shares of Common Stock at a per share
purchase price of two and one-half cents ($0.025), subject to
adjustment.  The aforedescribed purchase price per share, as adjusted
from time to time as herein provided, is referred to herein as the “Purchase
Price."  The number and character of such shares of Common
Stock and the Purchase Price are subject to adjustment as provided
herein.  The Company may reduce the Purchase Price for some or all of
the Warrants, temporarily or permanently, provided such reduction is made as to
all outstanding Warrants for all Holders of such
Warrants.  Capitalized terms used and not otherwise defined herein
shall have the meanings set forth in that certain Securities Purchase Agreement
(the “Securities Purchase
Agreement”), dated as of ________, entered into by the Company, the
Holder and the other signatories thereto, or the Debenture referred to
therein.

    

    As used
herein the following terms, unless the context otherwise requires, have the
following respective meanings:

     

    (a)           The
term “Company” shall
mean EClips Media Technologies, Inc., a Delaware corporation, and any
corporation which shall succeed or assume the obligations of Eclipse Media
Technologies, Inc. hereunder.

     

    (b)           The
term “Common Stock”
includes (i) the Company's Common Stock, $0.0001 par value per share, as
authorized on the date of the Securities Purchase Agreement, and (ii) any other
securities into which or for which any of the securities described in
(i) may be converted or exchanged pursuant to a plan of recapitalization,
reorganization, merger, sale of assets or otherwise.

     

    (c)           The
term “Other Securities”
refers to any stock (other than Common Stock) and other securities of the
Company or any other person (corporate or otherwise) which the holder of the
Warrant at any time shall be entitled to receive, or shall have received, on the
exercise of the Warrant, in lieu of or in addition to Common Stock, or which at
any time shall be issuable or shall have been issued in exchange for or in
replacement of Common Stock or Other Securities pursuant to Section 4 or
otherwise.

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    (d)           The
term “Warrant Shares”
shall mean the Common Stock issuable upon exercise of this Warrant.

     

    1.           Exercise of
Warrant.

     

    1.1.           Number of Shares Issuable
upon Exercise.  From and after the Issue Date through and
including the Expiration Date, the Holder hereof shall be entitled to receive,
upon exercise of this Warrant in whole in accordance with the terms of Section 1.2 or
upon exercise of this Warrant in part in accordance with Section 1.3,
shares of Common Stock of the Company, subject to adjustment pursuant to Section 4.

     

    1.2.           Full
Exercise.  This Warrant may be exercised in full by the Holder
hereof by delivery to the Company of an original or facsimile copy of the form
of subscription attached as Exhibit A hereto
(the “Subscription
Form”) duly executed by such Holder and delivery within two days
thereafter of payment, in cash, wire transfer or by certified or official bank
check payable to the order of the Company, in the amount obtained by multiplying
the number of shares of Common Stock for which this Warrant is then exercisable
by the Purchase Price then in effect.  The original Warrant is not
required to be surrendered to the Company until it has been fully
exercised.

     

    1.3.           Partial
Exercise.  This Warrant may be exercised in part (but not for a
fractional share) by delivery of a Subscription Form in the manner and at the
place provided in Section 1.2,
except that the amount payable by the Holder on such partial exercise shall be
the amount obtained by multiplying (a) the number of whole shares of Common
Stock designated by the Holder in the Subscription Form by (b) the Purchase
Price then in effect.  On any such partial exercise, provided the
Holder has surrendered the original Warrant, the Company, at its expense, will
forthwith issue and deliver to or upon the order of the Holder hereof a new
Warrant of like tenor, in the name of the Holder hereof or as such Holder (upon
payment by such Holder of any applicable transfer taxes) may request, the whole
number of shares of Common Stock for which such Warrant may still be
exercised.

     

    1.4.           Fair Market
Value.  For purposes of this Warrant, the Fair Market Value of a share
of Common Stock as of a particular date (the "Determination Date") shall
mean:

     

    (a)           If
the Company's Common Stock is traded on an exchange or is quoted on the NASDAQ
Global Market, NASDAQ Global Select Market, the NASDAQ Capital Market, the New
York Stock Exchange or the American Stock Exchange, LLC, then the average of the
closing sale prices of the Common Stock for the five (5) Trading Days
immediately prior to (but not including) the Determination Date;

     

    (b)           If
the Company's Common Stock is not traded on an exchange or on the NASDAQ Global
Market, NASDAQ Global Select Market, the NASDAQ Capital Market, the New York
Stock Exchange or the American Stock Exchange, Inc., but is traded on the OTC
Bulletin Board or in the over-the-counter market or Pink Sheets, then the
average of the closing bid and ask prices reported for the five (5) Trading Days
immediately prior to (but not including) the Determination Date;

     

    (c)           Except
as provided in clause (d) below and Section 3.1, if the
Company's Common Stock is not publicly traded, then as the Holder and the
Company agree, or in the absence of such an agreement, by arbitration in
accordance with the rules then standing of the American Arbitration Association,
before a single arbitrator to be chosen from a panel of persons qualified by
education and training to pass on the matter to be decided; or

     

    (d)           If
the Determination Date is the date of a liquidation, dissolution or winding up,
or any event deemed to be a liquidation, dissolution or winding up pursuant to
the Company's charter, then all amounts to be payable per share to holders of
the Common Stock pursuant to the charter in the event of such liquidation,
dissolution or winding up, plus all other amounts to be payable per share in
respect of the Common Stock in liquidation under the charter, assuming for the
purposes of this clause (d) that all of the shares of Common Stock then
issuable upon exercise of all of the Warrants are outstanding at the
Determination Date.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    1.5.           Company
Acknowledgment.  The Company will, at the time of the exercise
of the Warrant, upon the request of the Holder hereof, acknowledge in writing
its continuing obligation to afford to such Holder any rights to which such
Holder shall continue to be entitled after such exercise in accordance with the
provisions of this Warrant. If the Holder shall fail to make any such request,
such failure shall not affect the continuing obligation of the Company to afford
to such Holder any such rights.

     

    1.6.           Delivery of Stock
Certificates, etc. on Exercise. The Company agrees that, provided the
full purchase price listed in the Subscription Form is received as specified in
Section 1.2,
the shares of Common Stock purchased upon exercise of this Warrant shall be
deemed to be issued to the Holder hereof as the record owner of such shares as
of the close of business on the date on which delivery of a Subscription Form
shall have occurred and payment made for such shares as aforesaid. As soon as
practicable after the exercise of this Warrant in full or in part, and in any
event within three (3) business days thereafter (“Warrant Share Delivery Date”), the Company at
its expense (including the payment by it of any applicable issue taxes) will
cause to be issued in the name of and delivered to the Holder hereof, or as such
Holder (upon payment by such Holder of any applicable transfer taxes) may direct
in compliance with applicable securities laws, a certificate or certificates for
the number of duly and validly issued, fully paid and non-assessable shares of
Common Stock (or Other Securities) to which such Holder shall be entitled on
such exercise, plus, in lieu of any fractional share to which such Holder would
otherwise be entitled, cash equal to such fraction multiplied by the then Fair
Market Value of one full share of Common Stock, together with any other stock or
other securities and property (including cash, where applicable) to which such
Holder is entitled upon such exercise pursuant to Section 1 or
otherwise.  The Company understands that a delay in the delivery of
the Warrant Shares after the Warrant Share Delivery Date could result in
economic loss to the Holder.  As compensation to the Holder for such
loss, the Company agrees to pay (as liquidated damages and not as a penalty) to
the Holder for late issuance of Warrant Shares upon exercise of this Warrant the
proportionate amount of $100 per business day after the Warrant Share
Delivery Date for each $10,000 of Purchase Price of Warrant Shares for which
this Warrant is exercised which are not timely delivered.  The Company
shall pay any payments incurred under this Section in immediately available
funds upon demand.  Furthermore, in addition to any other remedies
which may be available to the Holder, in the event that the Company fails for
any reason to effect delivery of the Warrant Shares by the Warrant Share
Delivery Date, the Holder may revoke all or part of the relevant Warrant
exercise by delivery of a notice to such effect to the Company, whereupon the
Company and the Holder shall each be restored to their respective positions
immediately prior to the exercise of the relevant portion of this Warrant,
except that the liquidated damages described above shall be payable through the
date notice of revocation or rescission is given to the Company.

     

    1.7.           Buy-In.   In
addition to any other rights available to the Holder, if the Company fails to
deliver to a Holder the Warrant Shares as required pursuant to this Warrant,
within seven (7) business days after the Warrant Share Delivery Date and the
Holder or a broker on the Holder’s behalf, purchases (in an open market
transaction or otherwise) shares of common stock to deliver in satisfaction of a
sale by such Holder of the Warrant Shares which the Holder was entitled to
receive from the Company (a "Buy-In"), then the Company
shall pay in cash to the Holder (in addition to any remedies available to or
elected by the Holder) the amount by which (A) the Holder's total purchase price
(including brokerage commissions, if any) for the shares of common stock so
purchased exceeds (B) the aggregate Purchase Price of the Warrant Shares
required to have been delivered together with interest thereon at a rate of 15%
per annum, accruing until such amount and any accrued interest thereon is paid
in full (which amount shall be paid as liquidated damages and not as a
penalty).  For example, if a Holder purchases shares of Common Stock
having a total purchase price of $11,000 to cover a Buy-In with respect to
$10,000 of Purchase Price of Warrant Shares to have been received upon exercise
of this Warrant, the Company shall be required to pay the Holder $1,000, plus
interest. The Holder shall provide the Company written notice indicating the
amounts payable to the Holder in respect of the Buy-In.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    2.           Cashless
Exercise.

     

    (a)           Payment
upon exercise shall be made in cash, wire transfer or by certified or
official bank check payable to the order of the Company equal to the applicable
aggregate Purchase Price for the number of Common Stock specified in such form
(as such exercise number shall be adjusted to reflect any adjustment in the
total number of shares of Common Stock issuable to the Holder per the terms of
this Warrant).  The Holder may exercise this Warrant by delivery of
Common Stock issuable upon exercise of the Warrants in accordance with Section 2(b) below
or by a combination of any of the foregoing methods, and the holder shall
thereupon be entitled to receive the number of duly authorized, validly issued,
fully-paid and non-assessable shares of Common Stock (or Other Securities)
determined as provided herein.

     

    (b)           Subject
to the provisions herein to the contrary, if the Fair Market Value of one share
of Common Stock is greater than the Purchase Price (at the date of calculation
as set forth below), in lieu of exercising this Warrant for cash, the holder may
elect to receive shares equal to the value (as determined below) of this Warrant
(or the portion thereof being cancelled) by delivery of a properly endorsed
Subscription Form delivered to the Company by any means described in Section 13, in which
event the Company shall issue to the holder a number of shares of Common Stock
computed using the following formula:

     

    X=Y (A-B)

              A

    

    
      	
              
              

            	
              Where 

            	
              X=           the
      number of shares of Common Stock to be issued to the
  Holder

            

    

    

    
      	
               
      

            	
              Y=

            	
              the
      number of shares of Common Stock purchasable under the Warrant or, if only
      a portion of the Warrant is being exercised, the portion of the Warrant
      being exercised (at the date of such
  calculation)

            

    

     

    
      	
               
      

            	
              A=

            	
              Fair
      Market Value

            

    

     

    
      	
               
      

            	
              B=

            	
              Purchase
      Price (as adjusted to the date of such
  calculation)

            

    

     

    For
purposes of Rule 144 promulgated under the 1933 Act, it is intended, understood
and acknowledged that the Warrant Shares issued in a cashless exercise
transaction in the manner described above shall be deemed to have been acquired
by the Holder, and the holding period for the Warrant Shares shall be deemed to
have commenced, on the date this Warrant was originally issued pursuant to the
Securities Purchase Agreement.

     

    3.           Adjustment for
Reorganization, Consolidation, Merger, etc.

     

    3.1.           Fundamental Transaction. 
If, at any time while this Warrant is outstanding, a Fundamental
Transaction (as defined in the Debenture) shall have occured, then, upon
any subsequent exercise of this Warrant, the Holder shall have the
right to receive, for each Warrant Share that would have been issuable upon such
exercise immediately prior to the occurrence of such
Fundamental Transaction, at the option of the Holder, (a) upon
exercise of this Warrant, the number of shares of Common Stock of the
successor or acquiring corporation or of the Company, if it is the
surviving corporation, and any additional consideration (the "Alternate
Consideration") receivable upon or as a result of
such reorganization, reclassification, merger,
consolidation or disposition of assets by a Holder of the
number of shares of Common Stock for which this Warrant is exercisable
immediately prior to such event or (b) if the Company is
acquired in (1) a transaction where the consideration paid to the holders
of the Common Stock consists solely of cash, (2) a “Rule 13e-3 transaction” as
defined in Rule 13e-3 under the 1934 Act, or (3) a transaction involving a
person or entity not traded on a national securities exchange, the Nasdaq Global
Select Market, the Nasdaq Global Market or the Nasdaq Capital
Market, cash equal to the Black-Scholes Value. 
For purposes of any such exercise, the determination of the
Purchase Price shall be appropriately adjusted to apply to such
Alternate Consideration based on the amount of
Alternate Consideration issuable in respect of one share of Common
Stock in such Fundamental Transaction, and the Company shall
apportion the Purchase Price among the Alternate Consideration in
a reasonable manner reflecting the relative value of any different components of
the Alternate Consideration.  If holders of Common Stock are given any
choice as to the securities, cash or property to be received in a
Fundamental Transaction, then the Holder shall be given the same choice as to
the Alternate Consideration it receives upon any exercise of this Warrant
following such Fundamental Transaction.  To the extent necessary to
effectuate the foregoing provisions, any successor to the Company or
surviving entity in such Fundamental Transaction shall issue to the Holder a
new warrant consistent with
the foregoing provisions and evidencing the
Holder's right to exercise such warrant into Alternate
Consideration.  The terms of any agreement pursuant to which a
Fundamental Transaction is effected shall include terms requiring any such
successor or surviving entity to comply with the provisions of
this Section
3.1 and insuring that this Warrant (or any such replacement
security) will be similarly adjusted upon any subsequent transaction
analogous to a Fundamental Transaction.  “Black-Scholes Value” shall be
determined in accordance with the Black-Scholes Option Pricing Model obtained
from the “OV” function on Bloomberg L.P. using (i) a price per share of Common
Stock equal to the VWAP of the Common Stock for the Trading Day immediately
preceding the date of consummation of the applicable Fundamental Transaction,
(ii) a risk-free interest rate corresponding to the U.S. Treasury rate for a
period equal to the remaining term of this Warrant as of the date of such
request and (iii) an expected volatility equal to the 100 day volatility
obtained from the HVT function on Bloomberg L.P. determined as of the Trading
Day immediately following the public announcement of the applicable Fundamental
Transaction.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    

    3.2.           Continuation of
Terms.  Upon any reorganization, consolidation, merger or
transfer (and any dissolution following any transfer) referred to in this Section 3, this
Warrant shall continue in full force and effect and the terms hereof shall be
applicable to the Other Securities and property receivable on the exercise of
this Warrant after the consummation of such reorganization, consolidation or
merger or the effective date of dissolution following any such transfer, as the
case may be, and shall be binding upon the issuer of any Other Securities,
including, in the case of any such transfer, the person acquiring all or
substantially all of the properties or assets of the Company, whether or not
such person shall have expressly assumed the terms of this Warrant as provided
in Section 4.  In
the event this Warrant does not continue in full force and effect after the
consummation of the transaction described in this Section 3, then
only in such event will the Company's securities and property (including cash,
where applicable) receivable by the Holder of the Warrants be delivered to the
[Trustee as contemplated by Section 3.2].

     

    3.3           Share
Issuance.  Until the MFN Date, if the Company shall issue any
Common Stock except for the Excepted Issuances (as defined in the Debenture),
prior to the complete exercise of this Warrant for a consideration less than the
Purchase Price that would be in effect at the time of such issue, then, and
thereafter successively upon each such issue, the Purchase Price shall be
reduced to such other lower price for then outstanding
Warrants.  For purposes of this adjustment, the issuance of any
security or debt instrument of the Company carrying the right to convert such
security or debt instrument into Common Stock or of any warrant, right or option
to purchase Common Stock shall result in an adjustment to the Purchase Price
upon the issuance of the above-described security, debt instrument, warrant,
right, or option if such issuance is at a price lower than the Purchase Price in
effect upon such issuance and again at any time upon any subsequent issuances of
shares of Common Stock upon exercise of such conversion or purchase rights if
such issuance is at a price lower than the Purchase Price in effect upon such
issuance.  Common Stock issued or issuable by the Company for no
consideration will be deemed issuable or to have been issued for $0.001 per
share of Common Stock.  Upon any reduction of the Purchase Price, the
number of shares of Common Stock that the Holder of this Warrant shall
thereafter, on the exercise hereof, be entitled to receive shall be adjusted to
a number determined by multiplying the number of shares of Common Stock that
would otherwise (but for the provisions of this Section 3.3) be
issuable on such exercise by a fraction of which (a) the numerator is the
Purchase Price that would otherwise (but for the provisions of this Section 3.3) be in
effect, and (b) the denominator is the Purchase Price in effect on the date of
such exercise.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    4.           Extraordinary Events
Regarding Common Stock.  In the event that the Company shall
(a) issue additional shares of Common Stock as a dividend or other
distribution on outstanding Common Stock, (b) subdivide its outstanding
shares of Common Stock, or (c) combine its outstanding shares of the Common
Stock into a smaller number of shares of Common Stock, then, in each such event,
the Purchase Price shall, simultaneously with the happening of such event, be
adjusted by multiplying the then Purchase Price by a fraction, the numerator of
which shall be the number of shares of Common Stock outstanding immediately
prior to such event and the denominator of which shall be the number of shares
of Common Stock outstanding immediately after such event, and the product so
obtained shall thereafter be the Purchase Price then in effect. The Purchase
Price, as so adjusted, shall be readjusted in the same manner upon the happening
of any successive event or events described herein in this Section 4. The
number of shares of Common Stock that the Holder of this Warrant shall
thereafter, on the exercise hereof, be entitled to receive shall be adjusted to
a number determined by multiplying the number of shares of Common Stock that
would otherwise (but for the provisions of this Section 4) be
issuable on such exercise by a fraction of which (a) the numerator is the
Purchase Price that would otherwise (but for the provisions of this Section 4) be in
effect, and (b) the denominator is the Purchase Price in effect on the date of
such exercise.

     

    5.           Certificate as to
Adjustments.  In each case of any adjustment or readjustment in
the shares of Common Stock (or Other Securities) issuable on the exercise of the
Warrants, the Company at its expense will promptly cause its Chief Financial
Officer or other appropriate designee to compute such adjustment or readjustment
in accordance with the terms of the Warrant and prepare a certificate setting
forth such adjustment or readjustment and showing in detail the facts upon which
such adjustment or readjustment is based, including a statement of (a) the
consideration received or receivable by the Company for any additional shares of
Common Stock (or Other Securities) issued or sold or deemed to have been issued
or sold, (b) the number of shares of Common Stock (or Other Securities)
outstanding or deemed to be outstanding, and (c) the Purchase Price and the
number of shares of Common Stock to be received upon exercise of this Warrant,
in effect immediately prior to such adjustment or readjustment and as adjusted
or readjusted as provided in this Warrant. The Company will forthwith mail a
copy of each such certificate to the Holder of the Warrant and any Warrant Agent
of the Company (appointed pursuant to Section 11
hereof).

     

    6.           Reservation of Stock, etc.
Issuable on Exercise of Warrant; Financial
Statements.   The Company will at all times reserve and
keep available, solely for issuance and delivery on the exercise of the
Warrants, all shares of Common Stock (or Other Securities) from time to time
issuable on the exercise of the Warrant.  This Warrant entitles the
Holder hereof, upon written request, to receive copies of all financial and
other information distributed or required to be distributed to the holders of
the Company's Common Stock.

     

    7.           Assignment; Exchange of
Warrant.  Subject to compliance with applicable securities
laws, this Warrant, and the rights evidenced hereby, may be transferred by any
registered holder hereof (a "Transferor"). On the surrender
for exchange of this Warrant, with the Transferor's endorsement in the form of
Exhibit B attached hereto (the “Transferor Endorsement Form")
and together with an opinion of counsel reasonably satisfactory to the Company
that the transfer of this Warrant will be in compliance with applicable
securities laws, the Company will issue and deliver to or on the order of the
Transferor thereof a new Warrant or Warrants of like tenor, in the name of the
Transferor and/or the transferee(s) specified in such Transferor Endorsement
Form (each a "Transferee"), calling in the
aggregate on the face or faces thereof for the number of shares of Common Stock
called for on the face or faces of the Warrant so surrendered by the
Transferor.

     

    8.           Replacement of
Warrant.  On receipt of evidence reasonably satisfactory to the
Company of the loss, theft, destruction or mutilation of this Warrant and, in
the case of any such loss, theft or destruction of this Warrant, on delivery of
an indemnity agreement or security reasonably satisfactory in form and amount to
the Company or, in the case of any such mutilation, on surrender and
cancellation of this Warrant, the Company at its expense, twice only, will
execute and deliver, in lieu thereof, a new Warrant of like tenor.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    9.           Registration
Rights.  The Holder of this Warrant has been granted certain
registration rights by the Company.  These registration rights are set
forth in the Securities Purchase Agreement.  The terms of the
Securities Purchase Agreement are incorporated herein by this
reference.

     

    10.           Maximum
Exercise.  The Holder shall not be entitled to exercise this
Warrant on an exercise date, in connection with that number of shares of Common
Stock which would be in excess of the sum of (i) the number of shares of
Common Stock beneficially owned by the Holder and its affiliates on an exercise
date, and (ii) the number of shares of Common Stock issuable upon the
exercise of this Warrant with respect to which the determination of this
limitation is being made on an exercise date, which would result in beneficial
ownership by the Holder and its affiliates of more than 4.99% of the outstanding
shares of Common Stock on such date.  For the purposes of the
immediately preceding sentence, beneficial ownership shall be determined in
accordance with Section 13(d) of the 1934 Act and Rule 13d-3
thereunder.  Subject to the foregoing, the Holder shall not be limited
to aggregate exercises which would result in the issuance of more than
4.99%.  The restriction described in this paragraph may be
waived, in whole or in part, upon sixty-one (61) days prior notice from the
Holder to the Company to increase such percentage to up to 9.99%, but not in
excess of 9.99%.  The Holder may decide whether to convert a
Convertible Note or exercise this Warrant to achieve an actual 4.99% or up to
9.99% ownership position as described above, but not in excess of
9.99%.

     

    11.           Warrant
Agent.  The Company may, by written notice to the Holder of the
Warrant, appoint an agent (a “Warrant Agent”) for the
purpose of issuing Common Stock (or Other Securities) on the exercise of this
Warrant pursuant to Section 1,
exchanging this Warrant pursuant to Section 7, and
replacing this Warrant pursuant to Section 8, or
any of the foregoing, and thereafter any such issuance, exchange or replacement,
as the case may be, shall be made at such office by such Warrant
Agent.

     

    12.           Transfer on the Company's
Books.  Until this Warrant is transferred on the books of the
Company, the Company may treat the registered holder hereof as the absolute
owner hereof for all purposes, notwithstanding any notice to the
contrary.

     

    13.           Notices.   All
notices, demands, requests, consents, approvals, and other communications
required or permitted hereunder shall be in writing and, unless otherwise
specified herein, shall be (i) personally served, (ii) deposited in the mail,
registered or certified, return receipt requested, postage prepaid, (iii)
delivered by reputable air courier service with charges prepaid, or (iv)
transmitted by hand delivery, telegram, or facsimile, addressed as set forth
below or to such other address as such party shall have specified most recently
by written notice.  Any notice or other communication required or
permitted to be given hereunder shall be deemed effective (a) upon hand delivery
or delivery by facsimile, with accurate confirmation generated by the
transmitting facsimile machine, at the address or number designated below (if
delivered on a business day during normal business hours where such notice is to
be received), or the first business day following such delivery (if delivered
other than on a business day during normal business hours where such notice is
to be received) or (b) on the second business day following the date of mailing
by express courier service, fully prepaid, addressed to such address, or upon
actual receipt of such mailing, whichever shall first occur.  The
addresses for such communications shall be:  if to the Company, to:
EClips Energy, Inc., at the address set forth in the Company’s most recent
filing with the SEC and with a copy by fax only to:  Harvey Kesner,
Sichenzia Ross Friedman Ference LLP, 61 Broadway, 32nd Floor, New York, NY
10006, facsimile: (212) 930-9725, and (ii) if to the Holder, to the address and
facsimile number listed on the first paragraph of this Warrant.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    14.           Law Governing This
Warrant.  This Warrant shall be governed by and construed in
accordance with the laws of the State of New York without regard to principles
of conflicts of laws.  Any action brought by either party against the
other concerning the transactions contemplated by this Warrant shall be brought
only in the state courts of New York or in the federal courts located in the
state and county of New York.  The parties to this Warrant hereby
irrevocably waive any objection to jurisdiction and venue of any action
instituted hereunder and shall not assert any defense based on lack of
jurisdiction or venue or based upon forum non
conveniens.  The Company and Holder waive trial by
jury.  The prevailing party shall be entitled to recover from the
other party its reasonable attorney's fees and costs.  In the event
that any provision of this Warrant or any other agreement delivered in
connection herewith is invalid or unenforceable under any applicable statute or
rule of law, then such provision shall be deemed inoperative to the extent that
it may conflict therewith and shall be deemed modified to conform with such
statute or rule of law.  Any such provision which may prove invalid or
unenforceable under any law shall not affect the validity or enforceability of
any other provision of any agreement.   Each party hereby
irrevocably waives personal service of process and consents to process being
served in any suit, action or proceeding in connection with this Agreement or
any other Transaction Document by mailing a copy thereof via registered or
certified mail or overnight delivery (with evidence of delivery) to such party
at the address in effect for notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of process and notice
thereof.  Nothing contained herein shall be deemed to limit in any way
any right to serve process in any other manner permitted by law.

     

    [SIGNATURE
PAGE FOLLOWS]

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    IN
WITNESS WHEREOF, the Company has executed this Warrant as of the date first
written above.

     

    
      
        	 	ECLIPSE MEDIA
      TECHNOLOGIES, INC	 
	 	 	 	 
	
                 

              	
                By:
      

              	 	 
	 	 	Name:  Gregory
      D. Cohen	 
	 	 	Title:  Chief
      Executive Officer	 
	 	 	 	 

      

    

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    Exhibit A

    

    FORM OF
SUBSCRIPTION

    (to be
signed only on exercise of Warrant)

    TO:  ECLIPSE
MEDIA TECHNOLOGIES, INC.

     

    The
undersigned, pursuant to the provisions set forth in the attached Warrant
(No.____), hereby irrevocably elects to purchase (check applicable
box):

    

    
      	
              ___ 

            	
              ________
      shares of the Common Stock covered by such Warrant; or

            
	 	 

    

    
      	
              ___

            	
              the
      maximum number of shares of Common Stock covered by such Warrant pursuant
      to the cashless exercise procedure set forth in Section 2 of the
      Warrant.

            

    

    

    The
undersigned herewith makes payment of the full purchase price for such shares at
the price per share provided for in such Warrant, which is
$___________.  Such payment takes the form of (check applicable box or
boxes):

    

    
      	
              ___ 

            	
              $__________
      in lawful money of the United States; and/or

            
	 	 

    

    
      	
              ___

            	
              the
      cancellation of such portion of the attached Warrant as is exercisable for
      a total of _______ shares of Common Stock (using a Fair Market Value of
      $_______ per share for purposes of this calculation);
    and/or

            

    

    

    
      	
              ___

            	
              the
      cancellation of such number of shares of Common Stock as is necessary, in
      accordance with the formula set forth in Section 2 of the Warrant, to
      exercise this Warrant with respect to the maximum number of shares of
      Common Stock purchasable pursuant to the cashless exercise procedure set
      forth in Section 2.

            

    

    

    The
undersigned requests that the certificates for such shares be issued in the name
of, and delivered to _____________________________________________________ whose
address is _________________________________________________ ______________________________________ .

    

    The
undersigned represents and warrants that all offers and sales by the undersigned
of the securities issuable upon exercise of the within Warrant shall be made
pursuant to registration of the Common Stock under the Securities Act of 1933,
as amended (the "Securities Act"), or pursuant to an exemption from registration
under the Securities Act.

     

    
      
        	
                Dated:

              	 	 	 	 
	
                 

              	 	 	
                (Signature
      must conform to name of holder as 

                specified
      on the face of the Warrant)

              	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	
                (Address)

              	 
	 	 	 	 	 

      

    

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    Exhibit B

    

    

    FORM OF
TRANSFEROR ENDORSEMENT

    (To be
signed only on transfer of Warrant)

     

    For value
received, the undersigned hereby sells, assigns, and transfers unto the
person(s) named below under the heading "Transferees" the right represented by
the within Warrant to purchase the percentage and number of shares of Common
Stock of ECLIPSE MEDIA TECHNOLOGIES, INC. to which the within Warrant relates
specified under the headings "Percentage Transferred" and "Number Transferred,"
respectively, opposite the name(s) of such person(s) and appoints each such
person Attorney to transfer its respective right on the books of ECLIPS MEDIA
TECHNOLOGIES, INC. with full power of substitution in the premises.

     

    

    
      	
              Transferees

            	
              Percentage Transferred

            	
              Number Transferred

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      

    

     

     

    
      
        	
                Dated:

              	 	,	 	 	 	 
	
                 

              	 	 	 	 	
                (Signature
      must conform to name of holder as 

                specified
      on the face of the Warrant)

              	 
	 	 	 	 	 	 	 
	Signed
      in the presence of:	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 
	
                (Name)

              	 	 	 	 	 
	 	 	 	 	 	
                (Address)

              	 
	 	 	 	 	 	 	 
	
                 

              	 	 	 	 	 
	
                ACCEPTED
      AND AGREED:

                [TRANSFEREE]

              	 	 	 	 	 
	 	 	 	 	 	
                (address)

              	 
	 	 	 	 	 	 
	(Name)	 	 	 	 	 

      

    

     

    
      
        
        

      

      
        1exhibit10-79.htm

Exhibit 10.79

MANAGEMENT COMPENSATION AGREEMENT

 

(Vice President and General Counsel)

 

between

 

PINNACLE AIRLINES CORP.

 

and

 

BRIAN T. HUNT

 

dated as of

 

May 12, 2010

 

 

  

  

  

Management Compensation Agreement

 

for the Vice President and General Counsel

 

of

 

Pinnacle Airlines Corp.

 

This Management Compensation Agreement (the "Agreement") is made, entered into, and effective as of May 12, 2010, by and between Pinnacle Airlines Corp., a Delaware corporation ("Company"). and Brian T. Hunt ("Executive").

 

RECITALS

 

Executive is currently employed by Company at will; and

 

Company and Executive wish to continue that employment relationship and to state the terms and conditions of such employment and compensation.

 

NOW, THEREFORE, in consideration of the mutual promises and agreements contained herein, Company and Executive, intending to be legally bound, hereby agree as follows.

 

1.           Terms of Employment.

 

1.1           Employment.  Company agrees to continue to employ Executive, and Executive agrees to continue to serve Company, on the terms and conditions set forth herein.

 

1.2           Position and Duties.  During the term of Executive's employment hereunder, Executive shall continue to serve as Vice President and General Counsel of Company and shall have such powers and duties as on the Effective Date or such other powers and duties as may from time to time be prescribed by the Board of Directors.  Executive shall devote substantially all his working time and effort to the business and affairs of Company and its affiliates.

 

2.           Compensation.

 

2.1           Base Salary.  Executive's Base Salary shall be his base salary in effect on the Effective Date, as modified thereafter by the Board.  Executive's Base Salary shall be payable in accordance with Company's payroll policies.

 

2.2.           Incentive Compensation Programs.  In addition to Base Salary, Executive shall continue while employed hereunder to participate in Company's incentive compensation programs (including any Bonus Plan and any successor programs) at levels in effect on the Effective Date or such other levels established from time to time by the Board (the "Incentive Compensation Programs"), whether such Incentive Compensation is (i) made available in cash, securities, other property or rights (ii) annual or long term, or (iii) generally available to employees or executive employees of Company, or specifically available to Executive, except that Executive shall participate only to the extent such Incentive Compensation Program is specifically provided for in this Agreement or Attachment "A" hereto (including any future amendments).

 

2.3           Expenses.  During the term of Executive's employment hereunder, Executive shall be entitled to receive prompt reimbursements for all reasonable expenses incurred in performing services hereunder, provided that Executive properly accounts therefor in accordance with Company policy.

 

2.4           Benefit Programs.  During the term of his employment, Company shall provide Executive with the same benefits that it provides generally to its other employees or specifically to its executive employees, including but not limited to life, medical, and dental insurance, pension, vacation, bonus, profit-sharing and savings plans and similar benefits, as such plans and benefits may be adopted, modified or eliminated by Company from time to time.

 

2.5           Indemnification and Insurance.  Company shall indemnify Executive with respect to matters relating to Executive's services as an officer and/or director of Company or any of its Affiliates to the extent set forth in Company's Bylaws as amended from time to time and in accordance with the terms of any other indemnification which is generally applicable to executive officers of Company or of its Affiliates that may be provided by Company or any such Affiliate from time to time.  The foregoing indemnity is contractual and will survive any adverse amendment to or repeal of the Bylaws.  Company shall also cover Executive under any policy of officers' and (if Executive is a director at the relevant time) directors' liability insurance provided that such coverage is comparable to that provided currently or hereafter to any other executive officer or (if Executive is a director at the relevant time) director of Company.  The provisions of this Paragraph 2.5 shall survive termination of Executive's employment, unless the termination is by Company for Cause.

 

3.           Termination of Employment.

 

3.1           Upon Death.  Executive's employment hereunder shall terminate upon his death.

 

3.2           By Company.  Company may terminate Executive's employment hereunder at any time with or without Cause.

 

3.3           By Executive.  Executive may terminate his employment hereunder at any time for any reason.

 

3.4           Notice of Termination, Payments.  Any termination of Executive's employment hereunder (other than by death) shall be communicated by thirty (30) days' advance written Notice of Termination by the terminating party to the other party to this Agreement; provided that no Notice of Termination is required in advance if the  Executive is terminated by Company for Cause.

 

4.           Payments in the Event of Termination of Employment.

 

4.1           Payments in the Event of Termination by Company for Cause or Voluntary Termination by Executive.  If Executive's employment hereunder is terminated by Company for Cause, as a result of death or Disability, or by Executive other than for Good Reason, Company shall pay Executive (a) his accrued and unpaid Base Salary through the Date of Termination and (b) any vested or accrued and unpaid payments, rights or benefits Executive may be otherwise entitled to receive pursuant to the terms of any retirement, pension or other employee benefit or compensation plan (but not any Incentive Compensation Program) maintained by Company at the time or times provided therein.

 

4.2           Payments in the Event of Termination  by Company other than for Cause or by Executive for Good Reason.  If Executive's employment hereunder is terminated by Company other than for Cause, or by Executive for Good Reason, and Executive experiences a Separation from Service:

 

(a) Company shall pay Executive (i) his accrued and unpaid Base Salary through the Date of Termination, (ii) any accrued and unpaid bonus or additional compensation under any annual bonus plan (the "Incentive Bonus") for any calendar year ended before the Date of Termination, (iii) a pro rata share (based on days employed during the applicable year) of any unpaid Incentive Bonus Executive would otherwise have received with respect to the year in which the Date of Termination occurs, payable at the time the Incentive Bonus would otherwise be payable to Executive; provided, however, that 100% of the Incentive Bonus shall be determined solely with reference to the actual financial performance of Company for the full year (based on the goals previously established with respect thereto) (rather than a portion of the Incentive Bonus determined on the basis of individual performance), if there are such financial goals previously established; provided, further, in the event that no Company financial performance goals have been established for such year, then that portion of the Incentive Bonus that would have (but for this Section 4.2(a)) related to the achievement of the individual performance target shall be deemed to have been fully achieved and shall determine 100% of the Incentive Bonus potential, and (iv) any vested or accrued and unpaid payments, rights or benefits Executive may be otherwise entitled to receive pursuant to the terms of any written retirement, pension or other employee benefit or compensation plan maintained by Company at the time or times provided therein.

 

(b)  In addition to the compensation and benefits described in Section 4.2(a):

 

	
  

	
(i)

	
In the event of Executive’s involuntary Separation From Service by Company action other than for Cause or Separation From Service by Executive for Good Reason, then subject to the conditions stated below Company shall pay Executive, in substantially equal installments at Executive's regular pay intervals in effect prior to such Separation From Service, over a period of eighteen (18) months, an aggregate amount equal to one-and-one-half (1.5) (the "Multiple") times the sum of (i) Executive's annual Base Salary, and (ii) the target Incentive Bonus for Executive with respect to the year in which the Separation From Service occurs (or if no target has been set for that year, the target Incentive Bonus for the most recent year in which a target Incentive Bonus was in effect).  The initial installment shall be paid to Executive on the first regular pay date which would have been in effect for Executive but for the Separation From Service and which occurs on or first following the date which is thirty (30) days after the date of Executive’s Separation From Service (“First Severance Payment Date”).  Provided, however, that any payment under this paragraph is expressly contingent upon Executive both (i) executing a general release in the form attached hereto as Attachment "B" (the "General Release") within twenty one (21) days after Executive’s Separation From Service, and (ii) the time for revocation of the General Release having lapsed (as determined by counsel to Company other than Executive) prior the date which is thirty (30) days after the date of Executive’s Separation From Service.

 

	
  

	
(ii)

	
Until the earlier of twenty-four (24) months after Executive's Separation From Service (or eighteen (18) months if payment is made pursuant to Section 4.3(a)) or the date Executive is employed by a new employer, the Executive, his dependents, beneficiaries and estate shall be entitled to all benefits under Company's group medical and dental insurance plans as if the  Executive were still employed by Company hereunder during such period, with benefits or premium payments, as applicable, to be paid with the same frequency and at the same time as applies for active employees of the Company.

 

	
  

	
(iii)

	
On the date of Separation From Service, Executive's rights under any compensation or benefits programs shall become vested and any restrictions on stock options or contractual rights granted to Executive shall be removed.

 

	
  

	
(iv)

	
Notwithstanding any other provision of this Agreement to the contrary, in the case of any compensation which is subject to Code Section 409A, if the Executive is a Specified Employee at the time of a Separation From Service and the payment or provision of such compensation is made as a result of the Separation From Service, then no portion of such benefits or other such compensation shall be made before the date that is six (6) months after the date of the Separation from Service or, if earlier, the date of death of the Specified Employee.  Any compensation which would otherwise be paid within such six (6) month period after a Separation From Service shall be paid on the date which is six (6) months and one day after the Separation From Service, or the first business day thereafter.  The provisions and application of this paragraph will be construed and applied in a manner consistent with Code Section 409A and Treasury Regulations of other guidance issued thereunder.

 

(c)  Executive shall not be required to mitigate the amount of any payment provided for in this Section 4.2 by seeking other employment or otherwise, and no such payment shall be offset or reduced as a result of Executive obtaining new employment.

 

(d)  Notwithstanding anything else to the contrary in this Agreement, Company's obligation regarding the payments, benefit continuation and acceleration provided for in Section 4.2(b)(i), (ii) and (iii) is expressly conditioned upon the execution, delivery and non-revocation of the General Release.

 

    4.3           Payment in the Event of Termination Upon Change in Control of Company.

 

(a)  In the event a Change in Control occurs after the date of this Agreement, the Multiple shall be two (2.0) instead of one-and-one-half (1.5). In addition to Company's payment and benefits obligations to Executive upon events described in Section 4.2, if Executive remains employed by Company for the six-month period following the Change in Control, then, during the thirty (30) days following that six-month period, Executive shall be entitled to terminate his employment as a Separation From Service without Good Reason, and upon any such Separation From Service Company shall be obligated to make the payments and provide the benefits to Executive as set forth in Section 4.2, except that the aggregate amount payable pursuant to the Multiple (as set forth in this Section 4.3(a)) shall be paid in a lump sum on the First Severance Payment Date.

 

(b)  Nothing set forth in Section 4.3(a) is intended or shall be construed to limit Executive's right to terminate his employment for Good Reason during the aforementioned six month period or to limit Company's obligation to make the payments or provide the benefits set forth in Section 4.2 upon events described in Section 4.2.

 

(c)  Executive shall not be required to mitigate the amount of any payment provided for in this Section 4.3 by seeking other employment or otherwise, and no such payment shall be offset or reduced as a result of Executive obtaining new employment.

 

	
  

	
4.4.

	
Transfer of Insurance Policies Upon Termination.

 

Upon termination of Executive's employment in a Separation From Service by Company or by Executive, then within seventy five (75) days after the Separation From Service Company shall transfer to Executive the transferable ownership of any Company owned insurance policy or policies on the life of Executive.  Executive shall be solely responsible for the payment of any premiums due after the Date of Termination.

 

	
  

	
5.

	
Board/Committee Resignation.

 

Executive's termination of employment or separation From Service, for any reason, shall constitute, as of the date of such termination and to the extent applicable, a resignation as an officer of Company and a resignation from the Board (and any committees thereof) and the Board of Directors (and any committees thereof) of any of Company's affiliates and from the board of directors or similar governing body of any corporation, limited liability company or other entity in which Company or any affiliate holds an equity interest and with respect to which board or similar governing body Executive serves as Company's or such affiliate's designee or other representative.

 

	
  

	
6.

	
Confidentiality, Non-Competition, Non-Solicitation, Non-Disparagement.

 

(a)  Confidentiality.  While employed by Company and thereafter, Executive shall not disclose any Confidential Information either directly or indirectly, to anyone (other than appropriate Company employees and advisors), or use such information for his own account, or for the account of any other person or entity, without the prior written consent of Company or except as required by law. This confidentiality covenant has no temporal or geographical restriction. For purposes of this Agreement, "Confidential Information" shall mean all non-public information respecting Company's business, including, but not limited to, its services, pricing, scheduling, products, research and development, processes, customer lists, marketing plans and strategies, and  financing plans, but excluding information that is, or becomes, available to the public (unless such availability occurs through an unauthorized act on the part of Executive). Upon termination of this Agreement, Executive shall promptly supply to Company all property and any other tangible product or document that has been produced by, received by or otherwise submitted to Executive during or prior to his term of employment, and shall not retain any copies thereof.

 

(b)  Non-Competition.  Executive acknowledges that his services are of special, unique and extraordinary value to Company. Accordingly, if Company is paying or has paid the Executive an amount determined by the Multiple in Section 4.2(b)(i) or 4.3(a), then the  Executive shall not at any time prior to the first anniversary of the Date of Termination become an employee, consultant, officer, partner or director of any air carrier which competes with Company (or any of its affiliates).

 

(c)  Non-solicitation.  Executive shall not, at any time prior to the first anniversary of the date of termination, whether on Executive's own behalf or on behalf of or in conjunction with any person, company, business entity or other organization whatsoever, directly or indirectly, (x) solicit or encourage any employee of Company or its affiliates to leave the employment of Company or its affiliates or (y), without permission of Company, knowingly hire a former employee of Company or its affiliates.

 

(d)  Non-disparagement.  While employed by Company and at any time prior to the later of the first anniversary of the Date of Termination or the cessation of any payments due Executive under Section 4.2 or 4.3, Executive agrees not to make any untruthful or disparaging statements, written or oral, about Company, its affiliates, their predecessors or successors or any of their past and present officers, directors, stockholders, partners, members, agents and employees or Company's business practices, operations or personnel policies and practices to any of Company's customers, clients, competitors, suppliers, investors, directors, consultants, employees, former employees, or the press or other media in any country.

 

(e)  Condition and Remedies.  Notwithstanding the foregoing, if Executive is entitled to any payments under Sections 4(2) and (3) hereof, then Executive's obligations pursuant to this Section 6 are specifically conditioned on Company paying (whether in installments or as a lump sum, as required herein) any amounts to which Executive may be entitled thereunder in the manner required. Executive agrees that any breach of the terms of this Section 6 would result in irreparable injury and damage for which there would be no adequate remedy at law, and that, in the event of said breach or any threat of breach, Company shall be entitled to (i) an immediate injunction and restraining order to prevent such breach or threatened breach, without having to prove damages and (ii) any other remedies to which Company may be entitled at law or in equity. Executive further agrees that the provisions of the covenant not to compete are reasonable. Should a court determine, however, that any provision of the covenant not to compete is unreasonable, either in period of time, geographical area, or otherwise, the parties hereto agree that the covenant should be interpreted and enforced to the maximum extent which such court deems reasonable. The provisions of this Section 6 shall survive any termination of this Agreement and Executive's term of employment.  The existence of any claim or cause of action or otherwise, shall not constitute a defense to the enforcement of the covenants and agreements of this Section 6.

 

7.           Successors and Assigns.

 

(a)  This Agreement shall bind any successor to Company, whether by purchase, merger, consolidation or otherwise, in the same manner and to the same extent that Company would be obligated under this Agreement if no such succession had taken place.

 

(b)  This Agreement shall not be assignable by Executive.  This Agreement and all rights of Executive hereunder shall inure to the benefit of and be enforceable by, Executive's personal or legal representatives, executors, administrators, successors, heirs, distributes, devises and legatees.

 

8.           Term.

The term of this Agreement shall commence on the Effective Date and end upon Executive's termination of employment.  The rights and obligations of Company and Executive shall survive the termination of this Agreement to the fullest extent necessary to give effect to the terms hereof.

 

9.           Notices.

 

Notices and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given when delivered by hand or e-mail, the day after delivery to Federal Express for overnight delivery, two days after delivery to the United States Postal Service for mailing, addressed:

 

(a) if to Executive, to the address set forth on the signature page hereto, and

 

(b) if to Company, c/o Pinnacle Airlines Corp., 1689 Nonconnah Blvd., Suite 111, Memphis, TN 38132  Attention: Chairman of the Board of Directors, or, in each case, to such other address as may have been furnished in writing.

 

10.           Withholding.

 

All payments required to be made by Company hereunder shall be subject to the withholding and/or deduction of such amounts as are required to be withheld or deducted pursuant to any applicable law or regulation.  Company shall have the right and is hereby authorized to withhold or deduct from any compensation or other amount owing to Executive, applicable withholding taxes and deductions and to take such action as may be necessary in the opinion of Company to satisfy all obligations for the payment of such taxes or deductions.

 

	
  

	
11.

	
Certain Defined Terms.

 

As used herein, the following terms have the following meanings:

 

"Agreement" shall mean this Management Compensation Agreement, as the same may be amended, supplemented or otherwise modified from time to time in accordance herewith.

 

"Affiliate" shall mean any corporation, trust, partnership, limited liability company or other organization which controls, is controlled by, or is under common control with Company.

 

"Base Salary" shall mean the salary of Executive in effect from time to time under Section 2.1.

 

"Board" shall mean the Board of Directors of Company.

 

"Bonus Plan"  See Attachment "A".

 

"Cause" shall mean with respect to termination by Company of Executive's employment hereunder (i) an act or acts of dishonesty by Executive resulting in, or intended to result in, directly or indirectly, any personal enrichment of Executive, (ii) an act or acts of dishonesty by Executive intended to cause substantial injury to Company, (iii) material breach (other than as a result of a Disability) by Executive of Executive's obligations under this Agreement which action was (a) undertaken without a reasonable belief that the action was in the best interests of Company and (b) not remedied within a reasonable period of time after receipt of written notice from Company specifying the alleged breach, (iv) Executive's conviction of, or plea of nolo contendere to, (a) a crime constituting  a felony under the laws of any country, the United States or any state thereof or (b) a misdemeanor involving moral turpitude, (v) a material breach of (a) Company's policies and procedures in effect from time to time or (b) the provisions of this Agreement; provided, however, that such breach shall constitute "Cause" only if Company gives Executive notice pursuant to Section 9 hereof, which shall include a detailed and specific description of the alleged material breach or breaches.

 

"Change in Control" shall have the meaning given such term in the Stock Incentive Plan in effect on the effective date of this Agreement, provided that, for purposes of this definition, the term "Permitted Holders" shall include Northwest Airlines Corporation or any affiliate of Northwest Airlines Corporation.

 

"Date of Termination" shall mean, with respect to Executive, the date of termination of Executive's employment hereunder after the notice period provided by Section 3.4.

 

"Disability" shall mean Executive's physical or mental condition which prevents continued performance of his duties hereunder, if Executive establishes by medical evidence that such condition will be permanent and continuous during the remainder of Executive's life or is likely to be of at least three (3) years duration.

 

"Effective Date" shall mean May 11, 2010.

 

"Good Reason" shall mean with respect to an Executive, any one or more of the following:

(a)           a material reduction in Executive's Base Salary or level of target bonus under the Bonus Plan or any successor bonus plan without Executive's consent;

 

(b)           any substantial and sustained diminution in Executive's title, position, authority, or responsibilities hereunder (unless due to Executive's disability); or

 

(c)           a failure by Company to comply with any provision of this Agreement; provided, however, that the foregoing events shall constitute Good Reason only if Company fails to cure such event within thirty (30) days after receipt from Executive of written notice of the event which constitutes Good Reason; provided, further, that "Good Reason" shall cease to exist for an event on the 90th day following the later of its occurrence or Executive's knowledge thereof, unless Executive has given Company written notice thereof prior to such date.

 

In order for Executive's termination of his employment to be considered for Good Reason, such termination must occur within one (1) year after the event giving rise to such Good Reason. Executive's continued employment shall not constitute consent to, or a waiver of rights with respect to, any circumstance constituting Good Reason hereunder.

 

"Incentive Bonus"  See Attachment "A".

 

"Notice of Termination"  shall mean a notice specifying the Date of Termination.

 

“Separation From Service” means the time at which the parties reasonably anticipate that no further services will be performed by Executive after a certain date, or that the level of bona fide services Executive would perform after such date (whether as an employee or as an independent contractor) would permanently decrease to no more than 20 percent of the average level of bona fide services performed (whether as an employee or an independent contractor) by the individual over the immediately preceding 36-month period. If Executive provides services both as an employee and as an independent contractor, Executive must separate from service both as an employee and as an independent contractor to be treated as having a Separated From Service. If Executive ceases providing services an employee and begins providing services as an independent contractor, Executive will not be considered to have a Separation From Service until Executive has ceased providing services in both capacities. The provisions and application of this paragraph will be construed and applied in a manner consistent with Code Section 409A and Treasury Regulations of other guidance issued thereunder.

 

“Specified Employee” means a service provider who, as of the date of the service provider’s Separation from Service, is a key employee of a service recipient any stock of which is publicly traded on an established securities market or otherwise. A key employee is any individual who is described in Code Section 416(i)(1)(A)(i), (ii), or (iii) (applied in accordance with the Regulations thereunder and disregarding section 416(i)(5)) at any time during the 12-month period ending on a Specified Employee identification date. The provisions and application of this paragraph will be construed and applied in a manner consistent with Code Section 409A and Treasury Regulations of other guidance issued thereunder.

 

12.           Executive Representation.

 

Executive hereby represents to Company that the execution and delivery of this Agreement by Executive and Company and the performance by Executive of Executive's duties hereunder shall not constitute a breach of, or otherwise contravene, the terms of any employment agreement or other agreement or policy to which Executive is a party or otherwise bound.

 

13.           Amendment.

 

No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing signed by Executive and an officer of Company authorized by the Board to do so.  No waiver of any provision of this Agreement shall be deemed a continuing waiver or a waiver of any other provision, whether or not similar.

 

14.           Governing Law.

 

The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of Tennessee, without regard to principles of conflicts of laws. The provisions of this Agreement are intended to be construed and applied in a mannner consistent with compliance with Code Section 409A, where applicable.  Accordingly, the provisions hereof shall be construed and applied consistent with such intent, to the extent applicable.

 

15.           Validity.

 

The invalidity or unenforceability of any provision or provisions of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement which shall remain in full force and effect.

 

16.           Arbitration.

 

Except as otherwise provided in Paragraph 17 of this Agreement, all disputes and controversies arising from or in conjunction with Executive's employment with, or any termination from, Company and all disputes and controversies arising under or in connection with this Agreement (except claims for vested benefits brought under ERISA) shall be settled by mandatory arbitration conducted before one arbitrator having knowledge of employment law in accordance with the rules for expedited resolution of employment disputes of the American Arbitration Association then in effect. The arbitration shall be held in the Memphis, Tennessee metropolitan area at a location selected by Company. The determination of the arbitrator shall be made within thirty (30) days following the close of the hearing on any dispute or controversy and shall be final and binding on the parties. The parties hereby waive their right to a trial of any and all claims arising out of this Agreement or breach of this Agreement.  Each party agrees to pay his or its own costs and expenses incurred in connection with any arbitration including, without limitation, attorney's fees and one-half of the arbitrator's fees, unless the arbitrator determines that such expenses must be otherwise allocated under applicable law to maintain the validity of this Section 16.

 

17.           Specific Performance.

 

Notwithstanding Section 16 of this Agreement, if Executive breaches or threatens to commit a breach of Section 6 of this Agreement, Company shall have the right to specific performance (i.e., the right and remedy to have the terms and conditions of Section 6 specifically enforced by a court of competent jurisdiction), it being agreed that any breach or threatened breach of Section 6 would cause irreparable injury and that money damages may not provide an adequate remedy.  If Company exercises its right to seek specific performance in a court of competent jurisdiction, Executive may assert any claims he may have against Company or its affiliates in such action, and nothing set forth in Paragraph 16 of this Agreement is intended or shall be construed to limit Executive's right to assert such claims.

 

18.           Cooperation.

 

Executive shall provide his reasonable cooperation in connection with any investigation, action or proceeding (or any appeal from any action or proceeding) which relates to events occurring during Executive's employment hereunder. This provision shall survive any termination of this Agreement.

 

19.           Compensation Limitation

 

Notwithstanding the foregoing, Executive and Company agree that (i) to the extent permitted by any Federal statute (the "Act") that limits compensation of Executive hereunder, any payments or benefits payable to Executive under this Agreement (including, without limitation, payments under Sections 2 and 4 hereof) or pursuant to any other compensation or benefit plan of Company or other arrangement between Company and Executive that do not comply with the Act shall be deferred until such payments or benefits may be paid under the Act, and (ii) to the extent the Act does not permit the deferral of any such payments or benefits, the maximum compensation and/or severance Executive may receive from Company under this Agreement or any other compensation or benefit plan of Company or other arrangement between Company and Executive will not exceed the amount allowed under the Act.

 

20.           Entire Agreement.

 

This Agreement, any award agreement between Company and Executive entered into pursuant to Company's stock Incentive Compensation Programs, and Company's employee benefit plans in which Executive will continue to participate as provided in this Agreement, contain the entire understanding between Company and Executive with respect to Executive's employment with Company and supersede in all respects any prior or other agreement or understanding between Company or any affiliate of Company and Executive with respect to Executive's employment.

 

  

  

  

 

IN WITNESS WHEREOF, Company and Executive have executed this Agreement as of the day and year first above written.

 

PINNACLE AIRLINES CORP.

 

 

By:  _________________________

Philip H. Trenary

President and Chief Executive Officer

 

 

EXECUTIVE:

 

___________________

Brian T. Hunt

14373 Colby Ct., Carmel, Indiana 46032

E-mail address: bthunt@pncl.com

 

 

  

  

  

 

Attachment "A"

 

INCENTIVE COMPENSATION PROGRAMS

 

1.           Cash Incentives:  Annual Management Bonus Plan

 

2.           Stock Incentives:  2003 Stock Incentive Plan

 

 

  

  

  

Attachment "B"

 

 

GENERAL RELEASE

 

This Release is made and entered into by Brian T. Hunt (the "Executive") and Pinnacle Airlines Corp. (the "Company").

 

In consideration of the payments, benefit continuation and acceleration provided for in Section 4.2(b)(i), (ii) and (iii) of this Management Compensation Agreement, Executive, on behalf of himself and for any person or entity who may claim by or through him, irrevocably and unconditionally releases, waives, and forever discharges Company, its past, present, and future subsidiaries, divisions, affiliates, successors, and their respective officers, directors, attorneys, agents, and present and past employees from any and all claims or causes of action that Executive had, has, or may have relating to Executive's employment with Company and/or termination therefrom up to and including the date of this Agreement, including but not limited to any claims under Title VII of the Civil Rights Act of 1964, as amended, the Tennessee Human Rights Act, the Age Discrimination in Employment Act ("ADEA"), and claims under any other federal, state, or local statute, regulation, or ordinance, including wrongful or retaliatory discharge.

 

This Release shall not be construed as an admission by Company of any liability, wrongdoing, or violation of any law, statute, regulation, agreement or policy, and Company denies any such liability or wrongdoing.

 

Executive acknowledges and agrees that this Release includes a release and waiver as to claims under the ADEA.  Executive is hereby advised to consult with an attorney prior to executing the Management Compensation Agreement and this Release.  Executive acknowledges and confirms that he understands and agrees to the terms and conditions of this Release; that these terms are written in layperson terms, and that he has been fully advised of his rights to seek the advice and assistance of consultants, including an attorney, to review this Release.  Executive further acknowledges that he does not waive any rights or claims under the ADEA that arise after the date this Release is signed by him, and specifically, Executive understands that he is receiving money and benefits beyond anything of value to which he is already entitled from Company.  Executive acknowledges that he has had up to 21 days to consider whether to accept and sign this Release, and has had adequate time and opportunity to review the Release and consult with any legal counsel or other advisors of his choosing.  Executive understands that if he signs this Release before the expiration of the 21-day period, his signature will evidence his voluntary election to forego waiting the full 21 days to sign this Release.  If Executive chooses not to accept, or the 21-day period expires without his acceptance, then the offer in this Release is null and void.  Executive further acknowledges that in compliance with the Older Workers' Benefit Protection Act of 1990, he has been fully advised by Company of his right to revoke and nullify this Release, and that this revocation must be exercised, if at all, within seven days of the date he signs this Release.  Executive may revoke his acceptance at any time within the seven days following his signing of this Release by notifying Company of his decision to revoke the acceptance by writing directed and delivered to Pinnacle Airlines Corp., 1689 Nonconnah Boulevard, Suite 111, Memphis, TN 38132, Attention:  Chairman of the Board.

 

Acceptance of this offer is strictly voluntary.  This Release shall become effective and enforceable only after the seven-day revocation period has expired.  Should Executive decline to accept the benefits of this Release, or if is revoked by him, Executive will not receive the proposed additional compensation and benefits.

 

By his signature below, Executive accepts the terms of this Release.

 

 

	
PINNACLE AIRLINES, INC.

	
EXECUTIVE

	
By:                                                                

	  
	
Name:                                                                

	
Name:  Brian T. Hunt

	
Title:                                                                

	
Address:                                                                

	
 

 

Date:                                                                

	
 

                                               

Date:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00173-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00173-of-00352.parquet"}]]