Exhibit Index
Exhibit
Index
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Exhibit
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Description
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Exhibit
10.1
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Amended
and Restated Employment Agreement dated as of December 29, 2005 between
Air T, Inc., Mountain Air Cargo, Inc., CSA, Inc., MAC Aviation Services,
LLC and Xxxx X. Xxxxxxx
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1
EXHIBIT
10.1
AMENDED
AND RESTATED EMPLOYMENT AGREEMENT
XXXX
X. XXXXXXX
THIS
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
(the
“Agreement”) is made and entered into as of the 29th day of December, 2005, by
and among AIR T,
INC.,
a
Delaware corporation formerly known as Air Transportation Holding Company,
Inc.
(“AirT”); MOUNTAIN
AIR CARGO, INC.,
a North
Carolina corporation; CSA,
INC.,
a North
Carolina corporation; MAC
AVIATION SERVICES, LLC,
a North
Carolina limited liability company formerly known as Mountain Aircraft Services,
LLC (all collectively referred to herein as “Employer”); and XXXX
X. XXXXXXX,
an
individual having an address at 00000 Xxxxxxxx Xxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx
00000 (“Employee”).
Background
Statement
A. Employee
currently is employed by Employer pursuant to an Employment Agreement dated
as
of January 1, 1996 between Employee and Employer (the “Existing Agreement”).
Employee communicated his desire to retire from the Employer and gave Employer
notice of his intention to do so. Employer has discussed with Employee deferring
retirement and related matters. Employee has agreed to continue to be employed
by Employer pursuant to the terms of this Agreement through June 30, 2006,
at
which time he will retire. Employer has paid to Employee the amount of
retirement benefits that Employee would have been entitled to had he retired
on
the date he initially sought to retire plus interest at Employer’s cost of
funds. Accordingly, Employer and Employee wish to amend the Existing Agreement
to provide for changed terms of Employee’s employment, to restate those
provisions of the Existing Agreement, such as the covenant not to compete,
that
shall continue in force and to terminate the retirement benefit and other
provisions of the Existing Agreement.
B. NOW,
THEREFORE, for valuable consideration, the receipt of which is hereby
acknowledged, the mutual duties and obligations set forth herein, and intending
to be legally bound, the parties hereto agree to amend and restate the Existing
Agreement to provide as follows:
1. Employment.
Employer hereby agrees to employ Employee and Employee hereby agrees to serve
Employer upon the terms and conditions set forth in this Agreement in the
capacities set forth on Exhibit A attached hereto, with the duties and
responsibilities determined from time to time by the President and/or Chief
Executive Officer of each of the companies which comprise Employer and the
Board
of Directors of AirT.
2. Term.
The
term of Employee’s employment under this Agreement shall begin on the date
hereof and end on June 30, 2006, unless sooner terminated in accordance with
the
provisions hereof.
3. Compensation,
Incentives and Employee Benefits.
(a) Base
Salary.
Employer shall pay to the Employee for his performance of services hereunder
a
base salary (“Base Salary”) at the rate of One Hundred Thirty-four thousand Five
Hundred Fifty Dollars and No/100 ($134,550.00) per year for the period of this
Agreement. Base Salary shall be paid in accordance with Employer’s normal
payroll practices and shall be prorated for any partial months of
employment.
(b) Incentive
Compensation.
Employer shall pay to the Employee incentive compensation (“Incentive
Compensation”) equal to two percent (2.0%) of the earnings before income taxes
or extraordinary items reported each year by AirT on its Annual Report on Form
10-K (the “10-K”). Amounts payable under this subparagraph, if any, shall be
paid within fifteen (15) days after AirT files its 10-K with the Securities
and
Exchange Commission. Amounts otherwise payable hereunder shall be prorated
for a
partial year’s employment in the event Employee’s employment is terminated or
ceases during the course of AirT’s fiscal year.
(c) Employee
Benefit Plans.
In
addition to the Base Salary and Incentive Compensation provided for above,
Employer shall provide to the Employee the opportunity to continue to
participate in all life insurance, medical, dental, optical, disability, and
other employee benefit plans (collectively, “Employee Benefit Plans”) sponsored
from time to time by Employer and covering its employees generally or a
particular group of its employees of which the Employee is a member (including
participation by the Employee’s dependents to the extent they are eligible under
the terms of such plans), subject to the terms and conditions of such benefit
plans.
(d) Reimbursement
of Expenses.
Employer shall pay or reimburse Employee for all reasonable travel and other
expenses incurred by him in performing his obligations under this Agreement.
Such expenses shall be appropriately submitted and approved in accordance with
the policies approved by the Board of Directors of AirT.
(e) Vacation.
Employee shall be entitled to paid vacation of up to 3 weeks during the period
January 1, 2006 through June 30, 2006.
(f) Automobile
Expense.
Employee shall be reimbursed for the use of his automobile for Employer’s
business at the rate of $4,800.00 per year, payable in monthly installments.
(g) Transition
Bonus.
Employer shall pay Employee an additional bonus of $37,762.50 in the event
that
Employee continues to make himself be available to be employed hereunder through
the filing of the 10-K for the fiscal year ending March 31, 2006 with the
Securities and Exchange Commission, such payment to be made within five (5)
business days after the completion of such filing.
4. Retirement
Benefit Plan Terminated; Benefits Paid.
The
provisions of Paragraph 4 of the Existing Agreement are hereby terminated in
accordance with Q&A-20 of Internal Revenue Service Notice 2005-1 and the
lump-sum benefit due Employee as if he had retired on September 1, 2005 and
accrued interest on that amount, from that date to the date of payment, at
a
rate equal to Employer’s interest rate under its bank line of credit, have been
paid to Employee.
5. Duties.
During
the term hereof, Employee shall devote all of his business time, attention,
skills and efforts to the business of Employer and the faithful performance
of
his duties hereunder; provided, however, that (i) nothing contained herein
shall
prevent Employee from making outside investments consistent with the provisions
contained herein and (ii) with the approval of the Board of Directors of AirT,
from time to time Employee may serve, or continue to serve, on the boards of
directors of, and hold any other offices or positions in, companies or
organizations which, in the AirT Board of Directors’ judgment, will not present
any conflict of interest with Employer, or materially affect the performance
of
Employee’s duties pursuant to this Agreement. Except for such incidental matters
as may be assigned by Employer from time to time, Employee’s duties shall be
confined to those geographic areas in which Employer operates its business
and
Employee may not be transferred so that Employee’s principal office is located
anywhere outside the state of North Carolina.
6. Termination.
(a) Termination
By Employer Without Cause.
The
parties recognize (i) that the Board of Directors of AirT has the duty to use
its judgment in the best interests of Employer in determining whether to remove
or to elect or reelect Employee as an executive officer of Employer even though
there may be no legal cause therefor under this Agreement, and (ii) that any
action or inaction of the Board of Directors of AirT pursuant to clause (i)
shall not prejudice the rights of Employee under this Agreement. Accordingly,
the parties agree that, subject to all other provisions of this Paragraph 6,
Employer shall have the right at any time during the term of this Agreement
to
terminate Employee’s employment hereunder without cause. Such right of
termination may be exercised by removal of Employee by the Board of Directors
of
AirT. Such termination shall be deemed to occur on the date Employee is notified
thereof or, if he is not so notified, on the date of the act by the Board of
Directors of AirT referred to in the preceding sentence.
(b) Termination
by Employee.
Employee may terminate his employment with Employer, for any reason or without
reason, during the term hereof. Such termination must be accompanied by the
delivery of at least 10 days’ written notice delivered to Employer.
(c) Termination
Payments.
If
Employer terminates Employee’s employment hereunder pursuant to Paragraph 6(a)
hereof for any reason other than for “Cause”, as defined herein, then the
following provisions shall govern:
(i) Immediately
upon the effectiveness of the termination set forth in Paragraph 6(a) above,
Employer shall make a lump sum cash payment to Employee in an amount equal
to
the sum of (A) the aggregate Base Salary that would have been paid to Employee
under the terms hereof after the date of such event through the date of the
term
of this Agreement; and (B) the additional compensation that would have been
paid
to Employee after the date of termination of employment pursuant to Paragraphs
3(b) and 3(g) had his employment hereunder continued through June 30,
2006.
(ii) Notwithstanding
anything contained in this Paragraph to the contrary, in the event that the
payments under this Paragraph to Employee, either alone or together with other
payments Employee has a right to receive from Employer, would not be deductible
(in whole or in part) by Employer as a result of such payments constituting
a
“parachute payment” (as defined in Section 280G of the Internal Revenue Code, as
amended (the “Code”)), such payments shall be reduced to the largest amount as
will result in no portion of the payments not being fully deductible by Employer
as the result of Section 280G of the Code. The determination of any reduction
in
the payments pursuant to the foregoing sentence shall be made exclusively by
AirT’s independent public accountants (whose fees and expenses shall be borne by
Employer), and such determination shall be conclusive and binding on Employer
and Employee.
(d) No
Mitigation.
Employee shall have no obligation to seek other employment in the event of
termination of his employment and no compensation or other benefits received
by
Employee from any other employment shall reduce or limit Employer’s obligation
to make payment under this entire Paragraph 6.
(e) Definitions.
“Cause”
shall exist if, and only if, a court of competent jurisdiction enters a final
order finding that (a) the Employee has committed wrongful acts (but excluding
matters of business judgment) which have had or will have a material adverse
effect on the business, operations or financial condition of Employer, or (b)
the Employee has willfully and materially failed to perform the duties
reasonably required of him under this Agreement.
7. Confidential
Information.
Employee shall not, at any time during or following his employment by Employer
regardless of the reason for such termination of employment, furnish, divulge,
communicate, use to the detriment of Employer or for the benefit of any
business, firm, person, partnership, trust or corporation, or otherwise, any
of
Employer’s confidential information, data, trade secrets, sales methods, names
of customers, advertising methods, financial affairs or methods of procurement,
or take with him any document or paper relating to the foregoing, it being
acknowledged that Employee received or obtained all of the above in confidence
and as a fiduciary of Employer.
8. Non-Competition.
Employee agrees that, during Employee’s employment with Employer and for a
period of three (3) years thereafter, whether Employee leaves voluntarily or
involuntarily:
(a) Employee
will not directly or indirectly, individually or as a partner, employee,
stockholder, consultant, agent, officer, director, advisor or in any other
capacity, solicit any of the customers of Employer for the purpose of selling
any service or product similar to those provided by Employer, or in any manner
attempt to induce any of Employer’s customers or suppliers to withdraw, reduce
or divert any of their business from Employer or otherwise interfere or attempt
to interfere with any business relationship between Employer and its customers
or suppliers. For the purposes of this Paragraph 8(a), customers shall mean
(i)
any client, account or customer of the Employer that has transacted any business
with or been contacted by Employer within the twelve months preceding the date
hereof, and (ii) any other client, account or customer of Employer that has
done
business with Employer within two years of the date of such separation or
termination;
(b) Employee
will not in any manner induce or attempt to induce any of Employer’s employees
to leave the employment of Employer to become associated with any business
operation engaged in the air cargo or air freight business;
(c) Employee
will not directly or indirectly, either as principal, agent, manager, employee,
owner (if the percentage of ownership exceeds one percent (1%) of the net worth
of the business), partner (general or limited), director, officer, consultant
or
in any other capacity, participate in any business operation engaged in the
air
cargo or air freight business;
(d) Limitations
on Scope. Because of the present and contemplated future operations of Employer
in the geographic areas hereinafter set forth, it is further understood and
agreed by the parties hereto that the restriction set forth in Paragraph 8
shall
apply to a business engaged in the air cargo, air freight, aircraft maintenance
or aircraft parts brokering business or businesses in the following geographic
areas:
(i) The
State
of North Carolina;
(ii) The
State
of Michigan;
(iii) The
State
of South Carolina;
(iv) The
State
of Florida;
(v) Any
State
contiguous with the State of North Carolina;
(vi) Any
State
contiguous with the State of Michigan;
(vii) Any
State
contiguous with the State of South Carolina;
(viii) Any
State
contiguous with the State of Florida;
(ix) Any
State
east of the Mississippi River;
(x) Any
State
of the United States of America.
The
parties intend the above geographical areas to be completely severable and
independent, and any invalidity or unenforceability of this Agreement with
respect to any one area shall not render this Agreement unenforceable as applied
to any one or more of the other areas.
9. Severability.
If any
provision contained in this Agreement shall for any reason be held invalid,
illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision of this Agreement but
this
Agreement shall be construed as if such invalid, illegal or unenforceable
provision had never been contained herein. The parties agree that in the event
a
court should determine that this Agreement or any of the covenants contained
herein is unreasonable, void or invalid, for any reason whatsoever, then in
such
event,the parties hereto agree that the duration, geographical or other
limitation imposed herein should be as the court, or jury, if applicable, should
determine to be fair and reasonable, it being the intent of each of the parties
hereto to be subject to an agreement that protects the legitimate competitive
interests of Employer and does not unreasonably curtail the rights of the
Employee.
10. Employee’s
Representation.
Employee represents that his experience and capabilities are such that the
provisions of Paragraphs 8 and 9 will not prevent him from earning a livelihood.
11. Employer’s
Right to Obtain an Injunction.
Employee acknowledges that Employer will have no adequate means of protecting
its rights under Paragraphs 8 and 9 of this Agreement other than securing an
injunction. Accordingly, Employee agrees that Employer is entitled to enforce
this Agreement by obtaining a preliminary and permanent injunction and any
other
appropriate equitable relief in a court of competent jurisdiction. Employee
acknowledges that the recovery of damages by Employer will not be an adequate
means to redress a breach of this Agreement. Nothing contained in this
Paragraph, however, shall prohibit Employer from pursuing any remedies in
addition to injunctive relief, including recovery of damages.
12. General
Provisions.
(a) Entire
Agreement.
This
Agreement contains the entire understanding between the parties hereto relating
to the employment of Employee by Employer and supersedes any and all prior
employment, compensation or retirement agreements between Employer or any
predecessors of Employer or any of its subsidiaries and Employee.
(b) Nonassignability.
Neither
this Agreement nor any right or interest hereunder shall be assignable by
Employee, his beneficiaries or legal representatives, without the prior written
consent of Employer; provided, however, that nothing shall preclude (i) Employee
from designating a beneficiary to receive any benefit payable hereunder upon
his
death, or (ii) the executors, administrators or other legal representatives
of
Employee or his estate from assigning any rights hereunder to the person or
persons entitled thereunto.
(c) Binding
Agreement.
This
Agreement shall be binding upon, and inure to the benefit of, Employee and
Employer and their respective permitted successors and assigns.
(d) Amendment
or Modification of Agreement.
This
Agreement may not be modified or amended except by an instrument in writing
signed by the parties hereto.
(e) Insurance.
Employer, at its discretion, may apply for and procure in their own name and
for
its own benefit, life insurance on Employee in any amount or amounts considered
advisable; and Employee shall have no right, title or interest therein, and
further, Employee agrees to submit to any medical or other examination and
to
execute and deliver any applications or other instruments in writing as may
be
reasonably necessary to obtain such insurance.
(f) Notices.
All
notices under this Agreement shall be in writing and shall be deemed effective
when delivered in person (in the case of Employer, to its Secretary) or when
mailed, if mailed by certified mail, return receipt requested. Notices mailed
shall be addressed, in the case of Employee, to him at his residential address
currently on file with Employer, and in the case of Employer, to its corporate
headquarters, attention of the Secretary, or to such other address as Employer
or Employee may designate in writing at any time or from time to time to the
other party. In lieu of notice by deposit in the U.S. mail, a party may give
notice by telegram or telex.
(g) Waiver.
No
delay or omission by either party hereto in exercising any right, power or
privilege hereunder shall impair such right, power or privilege, nor shall
any
single or partial exercise of any right, power or privilege preclude any further
exercise thereof or the exercise of any other right, power or privilege. The
provisions of this Paragraph 14(g) cannot be waived except in writing signed
by
both parties.
(h) Governing
Law.
This
Agreement shall be governed and construed in accordance with the laws of the
State of North Carolina, exclusive of its choice of law provisions.
IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date first
above written.
AIR
T,
INC.
By:
/s/
Xxxxxx Xxxxx
Its:
Chief
Executive Officer
MOUNTAIN
AIR CARGO, INC.
By:
/s/
Xxxxxx Xxxxx
Its:
Chief
Executive Officer
CSA,
INC.
By:
/s/
Xxxxxx Xxxxx
Its:
President
MAC
AVIATION SERVICES, LLC
By:
/s/
Xxxxxx Xxxxx
Its:
Executive
Vice President
/s/
Xxxx X. Xxxxxxx
Xxxx
X.
Xxxxxxx
EXHIBIT
A
|
COMPANY
|
POSITIONS
|
|
Air
T, Inc.
|
Vice
President Finance
Secretary
Treasurer
Chief
Financial Officer
|
|
Mountain
Air Cargo, Inc
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Vice
President Finance
Secretary
Treasurer
Chief
Financial Officer
|
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CSA
Air, Inc.
|
Vice
President Finance
Secretary
Treasurer
|
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MAC
Aviation Services, LLC
|
Vice
President Finance
Secretary
Treasurer
|
