EXHIBIT 10.7
EMPLOYMENT AND SEVERANCE AGREEMENT AMENDMENT;
NOTICE OF TERMINATION, RESIGNATION, AND
OTHER SEVERANCE RELATED AGREEMENTS
RECITATIONS
The parties to this EMPLOYMENT AND SEVERANCE AGREEMENT AMENDMENT; NOTICE OF
TERMINATION, RESIGNATION, AND OTHER SEVERANCE RELATED AGREEMENTS (this
"Severance Agreement") are Kitty Hawk, Inc. ("Kitty Hawk" or the "Company") and
Xxxx Xxxxxx "Xxxx" Xxxxx ("Xxxxx", "Xxxx Xxxxx", or "Participant").
Whereas, Kitty Hawk and Xxxxx are parties to the EMPLOYMENT AND SEVERANCE
AGREEMENT (the "Agreement") dated effective October 3, 2002, a copy of which is
attached as Exhibit A; and
Whereas, Kitty Hawk and Xxxxx are parties to the INCENTIVE STOCK OPTION
AGREEMENT - KITTY HAWK 2003 LONG TERM EQUITY INCENTIVE PLAN (the "Stock Option")
having a Date of Grant of July 30, 2003, a copy of which is attached as Exhibit
B; and,
Whereas, capitalized terms used herein will have the meaning ascribed to them in
the Agreement or the Stock Option unless otherwise defined herein; and,
Whereas, unless specifically modified, amended or provided for in this Severance
Agreement, the benefits, rights and obligations of the parties will continue to
be governed by the Agreement and the Stock Option; and,
Whereas, the Agreement and the Stock Option will continue to survive as amended
by this Severance Agreement; and,
Whereas, in order to minimize the disruption to Xxxxx Xxxx'x ongoing business
and provide for a smooth transition of Xxxxx'x corporate responsibilities to a
successor, Kitty Hawk and Xxxxx have reached certain other agreements regarding
Xxxxx'x severance of employment from Kitty Hawk as set-forth herein;
Now; therefore, in consideration of the mutually acceptable terms and conditions
herein, Kitty Hawk and Xxxxx agree as follows:
Xxxxx'x Initials /s/ DK
Xxxxx Xxxx'x CEO Initials /S/ RWZ
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EMPLOYMENT AND SEVERANCE AGREEMENT AMENDMENT
3.6 TERMINATION. The written notice requirement to terminate the Agreement is
amended to require 60 days in lieu of 30 days.
NOTICE OF TERMINATION
Kitty Hawk hereby terminates Xxxxx'x employment without material breach
effective December 31, 2003 pursuant to 3.6 TERMINATION., B. of the Agreement.
Xxxxx xxxxxx xxxxxx written notice as required pursuant to 6.3 NOTICES. of the
Agreement.
RESIGNATION
Pursuant to notice of Termination given herein by Kitty Hawk, the amendments to
the Agreement as provided herein, and the other agreements reached in this
Severance Agreement, Xxxxx resigns all positions he holds within Kitty Hawk,
Aircargo, and Cargo effective December 31, 2003 as provided in 3.6 TERMINATION.,
B. of the Agreement. Kitty Hawk hereby waives its right, if any, to a separate
letter of resignation as contemplated in 3.6 TERMINATION., B. of the Agreement.
OTHER SEVERANCE RELATED AGREEMENTS
CONSULTANT PERIOD: from January 1, 2004 through February 29, 2004 Xxxxx will be
available to the Company as a full-time (or as needed) consultant and will
assist Kitty Hawk as directed by Xxxxx Xxxx'x President and CEO. As compensation
for this Consultant Period, Xxxxx will receive all of the compensation, benefits
and rights afforded him as provided in the Agreement, as amended herein, for the
60-day notice period. The 60-day notice period provided in the Agreement, as
amended herein, and this Consultant Period are coterminous. During this
Consultant Period, Xxxxx will adhere to and be subject to the Kitty Hawk Team
Member Guide (a copy of which has previously been provided to Xxxxx).
STOCK OPTION: as additional consideration, Kitty Hawk agrees to provide that
Participant's Termination of Service (whereby Xxxx Xxxxx is the Participant to
the Stock Option as defined therein) as it pertains to the Stock Option, will be
6 p.m. on June 1, 2004 in lieu of an earlier date certain as provided in the
Stock Option absent this Severance Agreement.
UNUSED VACATION: for the avoidance of doubt, Xxxxx will be paid on or before
February 29, 2004 for any earned but unused vacation as of December 31, 2003.
Xxxxx'x Initials /s/ DK
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Xxxxx Xxxx'x CEO Initials /s/ RWZ
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SEVERANCE AGREEMENT TERM: the term of this Severance Agreement will be January
1, 2004 through 6 p.m. June 1, 2004.
XXXXX'X ADDITIONAL CONSIDERATION TO KITTY HAWK: in return for the additional
consideration provided to Xxxxx in this Severance Agreement, Xxxxx agrees to and
states:
1. Xxxxx will not bring, continue or maintain any legal proceedings of any
nature whatsoever against the Company before any court, administrative
agency, arbitrator or any other tribunal or forum by reason any such
claims, demands, liabilities and/or causes of action, arising out of,
relating to or resulting from Xxxxx'x employment or termination from
employment (except for a claim of willful breach of the Agreement, the
Stock Option or this Severance Agreement), and that if any agency or
court assumes jurisdiction of any complaint, claim, or action against
the Company on Xxxxx'x behalf, Xxxxx will direct that agency or court
to withdraw from or dismiss the matter with prejudice, unless it is a
claim for willful breach of the Agreement, the Stock Option or this
Severance Agreement.
2. While Xxxxx understands that Xxxxx has had the following obligations
since Xxxxx began his employment with the Company, Xxxxx confirms that
he shall not disclose any of the Company's trade secrets or other
confidential, proprietary or restricted information and shall not make
use of such trade secrets or confidential, proprietary or restricted
information in any fashion at any time.
3. Xxxxx further agrees and promises that during the term of this
Severance Agreement and for period of one (1) year from June 1, 2004 he
will not influence or attempt to influence customers or suppliers of
the Company or any of its present or future subsidiaries or affiliates,
either directly or indirectly, to divert their business to any
individual, partnership, firm, corporation or other entity then in
competition with the business of the Company, or any subsidiary or
affiliate of the Company.
4. Xxxxx further agrees not to knowingly make any unsubstantiated
statements that defame or disparage the Company or its products,
services, officers, Team Members (as defined in the Team Member Guide),
advisors or other business contacts. Xxxxx shall not represent,
suggest, or hold himself out as being currently associated or
affiliated with the Company in any way. Xxxxx shall not make contact
with or engage in communications about the Company or its operations
with the media, current or former Team Members of the Company, or
current or former customers of the Company, provided, however, that if
Xxxxx is contacted by the media, current or former Team Members of the
Company, current or former customers of the Company, the general
public, or any other individual or entity, Xxxxx shall not suggest or
imply that Xxxxx is privy to current information about the Company, and
shall not comment about the current or prospective operations of the
Company. Xxxxx acknowledges and agrees that any breach of this
non-defamation provision shall entitle the Company to immediately
terminate payment of the additional
Xxxxx'x Initials /s/ DK
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Xxxxx Xxxx'x CEO Initials /s/ RWZ
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consideration provided to Xxxxx as described in this Severance
Agreement, and to xxx Xxxxx for breach of this Agreement for the
immediate recovery of any damages caused by such breach and to prevent
further statements that defame the Company or any of its products.
services, officers, Team Members, advisors or other business contacts.
ADDITIONAL PROVISIONS: Kitty Hawk and Xxxxx further agree and so state:
1. This Severance Agreement does not constitute an admission of any kind
by the Company or Xxxxx, but simply an agreement which offers certain
additional consideration to which Xxxxx would not otherwise be entitled
in return for Xxxxx agreeing to the terms of and signing this Severance
Agreement. Xxxxx further understands and agrees that if Xxxxx breaches
a material term or condition of this Severance Agreement, Xxxxx will
automatically forfeit all of the additional consideration provided to
him in this Severance Agreement. If Xxxxx violates this Severance
Agreement after receiving any additional consideration as provided
herein, Xxxxx agrees that Xxxxx will forfeit and/or immediately return
the additional consideration to the Company. In any action brought to
enforce any provisions of the Agreement, the Stock Option, or this
Severance Agreement, in addition to any other relief granted, the
prevailing party shall recover its reasonable costs of enforcement
including, but without limitations to costs and reasonable attorney
fees incurred.
2. The Company agrees not to make any unsubstantiated statements that
defame Xxxxx. The Company shall not make contact with or engage in
communications about Xxxxx with (i) the media, current or former Team
Members of the Company, or (ii) current or former advisors or business
contacts of the Company. The Company acknowledges and agrees that any
breach of this non-defamation provision shall entitle Xxxxx to sue the
Company for breach of this Severance Agreement and seek immediate
recovery of any damages caused by such breach and to prevent the
Company from further statements that defame Xxxxx or any of Xxxxx'x
products, services, or future employer.
3. Xxxxx acknowledges and agrees that Xxxxx has been advised that this
Severance Agreement is a final and binding legal document, and that
Xxxxx has had sufficient time and opportunity to consult with an
attorney and/or tax consultant of his own choosing before signing this
Severance Agreement, and that in signing this Severance Agreement,
Xxxxx has acted voluntarily of his own free will and has not relied
upon any representation made by the Company or any of its agents, Team
Members or representatives regarding the subject matter or effect of
this Severance Agreement. Xxxxx further agrees not to voluntarily make
the terms and conditions or the circumstances surrounding this
Severance Agreement known to anyone other than the attorney and/or tax
consultant from whom Xxxxx receives counseling, as referred above, and
his spouse. However, before disclosing such information to these
individuals, Xxxxx will obtain their agreement not to disclose such
information. If any
Xxxxx'x Initials /s/ DK
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Xxxxx Xxxx'x CEO Initials /s/ RWZ
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provision of this Severance Agreement is breached by Xxxxx, Xxxxx
understands that Xxxxx will be required to return to the Company the
additional consideration given to him pursuant to this Severance
Agreement.
4. Xxxxx understands that if Xxxxx elects to revoke this Severance
Agreement, Xxxxx understands that Xxxxx will not be entitled to the
additional consideration described in this Severance Agreement.
5. Xxxxx acknowledges and agrees that all applicable requirements of state
law governing or affecting the validity of compromises, settlements and
releases are specifically incorporated herein as fully as if set forth
at length.
6. Xxxxx also understands that if Xxxxx signs this Severance Agreement,
Xxxxx will then have seven (7) days to revoke it, in writing, if Xxxxx
so chooses. However, if Xxxxx elects to revoke this Severance
Agreement, Xxxxx understands that Xxxxx will not be entitled to the
additional consideration provided in this Severance Agreement. Xxxxx
realizes this Severance Agreement is not effective or enforceable until
the seven (7) day period expires.
XXXXX IS ENTERING INTO THIS SEVERANCE AGREEMENT FREELY AND VOLUNTARILY AND XXXXX
IS SATISFIED THAT XXXXX HAS BEEN GIVEN SUFFICIENT OPPORTUNITY TO CONSIDER IT.
XXXXX HAS CAREFULLY READ AND UNDERSTANDS ALL OF THE PROVISIONS OF THIS SEVERANCE
AGREEMENT. XXXXX UNDERSTANDS THAT THIS SEVERANCE AGREEMENT, TAKEN TOGETHER WITH
THE AGREEMENT AND STOCK OPTION, SET FORTH THE ENTIRE AGREEMENT BETWEEN XXXXX AND
THE COMPANY. XXXXX REPRESENTS THAT NO OTHER STATEMENTS, PROMISES, OR COMMITMENTS
OF ANY KIND, WRITTEN OR ORAL, HAVE BEEN MADE TO XXXXX BY THE COMPANY TO CAUSE
XXXXX TO ACCEPT THIS SEVERANCE AGREEMENT. XXXXX ACKNOWLEDGES ACCEPTANCE OF THIS
SEVERANCE AGREEMENT BY SIGNATURE BELOW:
/s/ Xxxx Xxxxxx "Xxxx" Xxxxx 2/18/2004
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Xxxx Xxxxxx "Xxxx" Xxxxx Date
Xxxxxx to and accepted on behalf of Kitty Hawk, Inc.:
/s/ Xxx Xxxxxx, President and CEO 2/17/2004
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Xxx Xxxxxx, President and CEO Date
Xxxxx'x Initials /s/ DK
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Xxxxx Xxxx'x CEO Initials /s/ RWZ
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