Item 5.02 Departure of Directors or
Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
Appointment of Felix Malitsky as a Director
On March 20, 2017,
the Board of Directors (the “Board”) of Baltia Air Lines, Inc. (the “Company”) appointed Felix Malitsky
as a director of the Company.
Mr. Malitsky has over
15 years of experience in the financial services industry. He is the President and Managing Director of Fortis Lux Financial, a
wealth management firm, which he founded in 2016. From 2001 until 2010, Mr. Malitsky was a financial advisor with American Express,
his latest position as Complex Director of the New York metropolitan area. In 2010, Mr. Malitsky joined MetLife as Managing Director
of MetLife Premier Client Group in New York. During his tenure at MetLife, Mr. Malitsky’s team was awarded Chairman Status
for four consecutive years and Leader Conference in 2015 from the firm. Mr. Malitsky is a Chartered Retirement Planning Counselor.
He earned a B.A. in history from the University of Connecticut and served in the United States Army. Mr. Mr. Malitsky is affiliated
with charitable organizations such as the Wounded Warrior Project, the Gift of Life Foundation and Beat the Streets. The Company
believes Mr. Malitsky’s extensive investment and business experience make him a qualified appointee as director.
No family relationships
exist between Mr. Malitsky and any of the Company’s other directors or executive officers. There are no arrangements between
Mr. Malitsky and any other person pursuant to which Mr. Malitsky was nominated as a director. There are no transactions to which
the Company is or was a participant and in which Mr. Malitsky has a material interest subject to disclosure under Item 404(a) of
Regulation S-K. Mr. Malitsky is not a party to any material plan or arrangement in connection with his appointment as a director.
Appointment of Sheryle Milligan as Chief
Operating Officer
On March 20, 2017,
the Board appointed Sheryle Milligan as Chief Operating Officer of the Company. Ms. Milligan joined the Company in 2013 and prior
to her appointment as COO, Ms. Milligan was serving as the Chief of Operations, Director of Safety and Certification Project Manager
for the Company’s Federal Aviation Administration (“FAA”) certification.
Ms. Milligan
began her career in aviation in 1984 when she joined Chrysler Pentastar Aviation, Inc., where she was responsible for
integrating critical safety procedures and maintaining regulatory compliance through 2002. Since then, she has worked with
various airlines to achieve regulatory compliance with the FAA as well as multiple foreign state agencies, including the
Canadian Transportation Authority and the Civil Aviation Authority in Europe. In addition, Ms. Milligan has worked with major
aircraft manufacturers, including Gulfstream Aerospace Corporation, Airbus Group SE and The Boeing Company to participate in
certification efforts on behalf of such air carrier certification applicants. In 2009, Ms. Milligan launched SMS SOS, LLC
(Safety Management Systems and Specialized Operational Services) to provide the aviation industry with a team of experts
specializing in safety management systems, air carrier certification, regulatory compliance, quality control and quality
assurance. In 2011, Ms. Milligan received an acknowledgement from the FAA for her role in leading a complex air carrier
through the FAA Voluntary SMS Level 1 Process.
Ms. Milligan holds
a B.S. in Business Management from Atworth University. She continues to attend industry programs and trainings, including FAA SMS
Pilot Program Calibration/Training, ATOS Oversight Training, FAA System Safety Training, Crew Resource Management Training, ISO/QS
9000 Documentation, ISO 9000 Executive Overview Course, QS 9000 Implementation along with various other 135/121 compliance related
programs. For 15 years, Ms. Milligan was a member of the FAA Safety Management System Focus Group and the FAA Pilot Program for
Safety Management Systems, where she provided input to the development of Part 5 – Safety Management Systems of the Title
14: Aeronautics and Space federal regulations. In addition, Ms. Milligan served on the Safety and Security Committees of the National
Air Transportation Association and the National Business Aviation Association. From 2008 to 2009, Ms. Milligan served on the Board
of Governors of the Air Charter Safety Foundation.
No family relationships
exist between Ms. Milligan and any of the Company’s other directors or executive officers. There are no arrangements between
Ms. Milligan and any other person pursuant to which Ms. Milligan was appointed as an officer of the Company. There are no transactions
to which the Company is or was a participant and in which Ms. Milligan has a material interest subject to disclosure under Item
404(a) of Regulation S-K.
In connection with
her employment with the Company, Ms. Milligan entered into an employment agreement (the “Agreement”) on July 8, 2016,
pursuant to which she receives an annual base salary of $127,400, subject to increase to $200,000 upon the Company’s receipt
of FAA certification and authorization to commence revenue-generating flights. Ms. Milligan will be entitled to receive reimbursement
for all reasonable expenses incurred in connection with business-related activities. She is also entitled to customary medical
benefits and certain disabilities insurance. Ms. Milligan’s employment agreement provides for a term ending on July 7, 2017,
which shall automatically renew for subsequent one year terms unless otherwise terminated as provided in the Agreement. In the
event that the Company and Ms. Milligan terminate her employment based upon mutual agreement, or in the event that the Company
terminates Ms. Milligan for cause, as such term is defined in the Agreement, the Company shall be obligated to pay Ms. Milligan
(i) any portion of her unpaid salary, (ii) the value of all compensation and benefits, whether accrued or unaccrued, for the remainder
of the term, (iii) any unused benefits under an and all benefit plans through the date of such termination (together, the “Earned
Amounts”). In the event that the Company terminates Ms. Milligan’s employment without Cause, as such term is defined
in the Agreement, or if Ms. Milligan voluntarily elects to terminate her employment, the Company shall pay to Ms. Milligan the
Earned Amounts and the Company shall accelerate the vesting of any stock, stock options, restricted stock awards, long term incentive
plan benefits and any other equity awards or benefits subject to vesting that were granted or owed to Ms. Milligan during the term.
In addition, Ms. Milligan will be entitled to receive any vested stock grants, cash incentives or bonuses that she may have earned
prior to the date of termination; and, Ms. Milligan shall be entitled to request that the Company repurchase all equity interest
of the Company she owns or holds at a price equal to the greater of (i) $0.02 per share of the common stock of the Company, and
(iii) fair market value. In the event that Company experiences a Change in Control, as such term is defined in the Agreement, the
Company shall pay to Ms. Milligan, within 30 days of such Change in Control, a cash payment equal to three time the amount of her
then applicable base salary. In addition, at Ms. Milligan’s request, the Company shall repurchase all equity interest of
the Company Ms. Milligan owns or holds at a price equal to the greater of (i) $0.02 per share of the common stock of the Company,
and (iii) fair market value. Upon a Change in Control, all equity or equity equivalents held or owned by Ms. Milligan that are
subject to vesting based on her continued employment shall automatically vest or become unrestricted and/or exercisable, as applicable.
Ms. Milligan is entitled to continue receiving certain medical benefits for a period of one year after the date of the Change of
Control, or the remainder of her employment term, whichever is longer.
A copy of the Agreement
is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference. The description of the material
terms of the Employment Agreement contained in this Item 5.02 is qualified in its entirety by reference to Exhibit 10.1.
Item 9.01. Exhibits