EXHIBIT 10.11
--------------------------------------------------------------------------------
Salary Continuation and Consulting Agreement
--------------------------------------------------------------------------------
1.0 Parties and Date
1.1 Parties. The parties to this salary continuation and consulting
agreement (this "agreement") are Kitty Hawk, Inc. ("Kitty Hawk"), with its
principal place of business located at ▇▇▇▇ ▇. ▇▇/▇▇/ ▇▇▇▇▇▇, P.O. Box 612787,
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ("▇▇▇▇▇▇"), who
resides at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, with a fax number
of (▇▇▇) ▇▇▇-▇▇▇▇.
1.2 Date. This agreement is dated and effective November 4, 2002.
2.0 Recitations and Acknowledgments
2.1 Previous Employment. ▇▇▇▇▇▇ was the Chairman and Chief Executive
Officer of Kitty Hawk and voluntarily resigned on November 4, 2002. ▇▇▇▇▇▇ has
considerable knowledge and experience related to the business of Kitty Hawk as a
result of his prior affiliation with Kitty Hawk as an employee; and Kitty Hawk
desires to recognize the valuable and meritorious services performed for Kitty
Hawk by ▇▇▇▇▇▇ during the many years in which he served Kitty Hawk. This
agreement supersedes, modifies and restates all previous agreements between
▇▇▇▇▇▇ and Kitty Hawk.
3.0 Terms of Consultation
3.1 Term. This agreement shall have an effective date of November 4, 2002
and shall terminate on December 31, 2003, unless earlier terminated or extended
pursuant to the terms contained herein. At the option of Kitty Hawk, this
agreement may be extended for a period of one additional year through December
31, 2004, and if such option is exercised, the non-competition provisions of P.
3.6 shall survive through December 31, 2005. Notwithstanding any other provision
of this agreement, at any time during the Term, ▇▇▇▇▇▇' engagement hereunder
shall terminate upon his death; provided, however, that if ▇▇▇▇▇▇ shall die
during the term, his heirs or estate (as the case may be) shall be entitled to
retain all payments previously made hereunder.
3.2 Responsibilities. ▇▇▇▇▇▇ will be a consultant to Kitty Hawk, and will
take on such projects as shall be assigned by ▇▇▇▇▇ ▇▇▇▇'▇ Chief Executive
Officer, including but not limited to making an expressed effort to obtain new
relationships for Kitty Hawk within the freight forwarding industry and assist
Kitty
Salary Continuation and Consulting Agreement Page 1
Hawk in analyzing and establishing new sources of revenue. ▇▇▇▇▇▇ agrees to
perform his work in a prompt, efficient and professional manner, but at
something less than his full working time. Notwithstanding the foregoing, if
▇▇▇▇▇ ▇▇▇▇'▇ Chief Executive Officer attempts to assign a project to ▇▇▇▇▇▇ and
▇▇▇▇▇▇ is completely unavailable for such an assignment for a period in excess
two weeks, the payments contemplated hereunder shall cease until such time as
▇▇▇▇▇▇ is again available and begins to perform the project assigned by ▇▇▇▇▇
▇▇▇▇'▇ Chief Executive Officer. Additionally, ▇▇▇▇▇▇ shall comply with those
covenants set forth in to those P. 3.4 and P. 3.5.
3.3 Compensation. In consideration for the consulting services to be
rendered by ▇▇▇▇▇▇, and in consideration of the covenants of ▇▇▇▇▇▇ set forth in
P. 3.4 and P. 3.5, ▇▇▇▇▇▇ shall receive basic annual compensation ("basic annual
compensation") of $300,000.00, payable in equal semi-monthly installments, it
being understood that Kitty Hawk shall have the right to deduct therefrom, if
required or deemed advisable, all taxes which may be required to be deducted and
withheld under any provision of applicable law (including but not limited to
social security payments, federal income tax withholding and any other required
deductions).
3.4 Medical Insurance. During his engagement as a consultant under this
agreement, Kitty Hawk shall use reasonable efforts to cause ▇▇▇▇▇▇ to be covered
under ▇▇▇▇▇ ▇▇▇▇'▇ medical and hospitalization insurance coverage, at no cost to
▇▇▇▇▇▇, and such coverage shall be at least substantially equivalent to the
coverage that is was provided to ▇▇▇▇▇▇ under ▇▇▇▇▇ ▇▇▇▇'▇ employee medical
plans during the immediate past year of his employment with Kitty Hawk. The
insurance described in this paragraph shall be provided only if coverage is
permitted by the terms of ▇▇▇▇▇ ▇▇▇▇'▇ medical and hospitalization insurance
policy as in effect at any applicable time hereunder. If it is determined that
▇▇▇▇▇▇ is not eligible to be covered by ▇▇▇▇▇ ▇▇▇▇'▇ medical and hospitalization
insurance policy, Kitty Hawk agrees to pay ▇▇▇▇▇▇' COBRA premiums for as long as
he otherwise would be entitled to the insurance coverage provided in this P.
3.4.
3.5 Confidential information.
▇. ▇▇▇▇▇▇ acknowledges, understands and agrees that all Confidential
Information (defined below), whether developed by Kitty Hawk or others
or whether developed by ▇▇▇▇▇▇ while carrying out the terms and
provisions of this Agreement (or previously while employed by Kitty
Hawk), shall be the exclusive and confidential property of Kitty Hawk
and shall be regarded, treated and protected as such. ▇▇▇▇▇▇ shall
diligently safeguard and not use, copy or transfer Confidential
Information other than as is necessary in carrying out his duties
pursuant to this agreement or in preserving, defending or pursuing his
rights or remedies under this agreement or any other agreement or
relationship between
Salary Continuation and Consulting Agreement Page 2
▇▇▇▇▇▇ and Kitty Hawk. ▇▇▇▇▇▇ shall also make available to Kitty Hawk
any and all information of which he had knowledge and that is relevant
to the business of Kitty Hawk and shall make all suggestions and
recommendations that he feels will benefit Kitty Hawk.
B. "Confidential Information" shall mean information which is used in
▇▇▇▇▇ ▇▇▇▇'▇ business and (i) is proprietary to, about or created by
Kitty Hawk; (ii) gives Kitty Hawk some competitive advantage, the
opportunity of obtaining such advantage, or the disclosure of which
could be detrimental to the interests of Kitty Hawk; (iii) is not
typically disclosed to non-employees by Kitty Hawk; or (iv) is
designated as Confidential Information by Kitty Hawk, or from all the
relevant circumstances should reasonably be assumed by ▇▇▇▇▇▇ to be
confidential to Kitty Hawk. For the purposes of this P. 3.4, the term
"Kitty Hawk" shall be construed to include any and all subsidiaries of
Kitty Hawk.
B. "Confidential Information" shall not include information publicly known
(other than as a result of a disclosure by ▇▇▇▇▇▇). The phrase
"publicly known" shall mean readily accessible to the public in a
written publication, shall not include information that is only
available by a substantial searching of the published literature or
information the substance of which must be pieced together from a
number of different publications and sources, or by focused searches of
literature guided by Confidential Information. The burden of proving
that information or skills and experience are not Confidential
Information shall be on the party asserting such exclusion.
Additionally, "Confidential Information" shall specifically not
include: (a) information ▇▇▇▇▇▇ knew already prior to the time of his
employment by Kitty Hawk; (b) information that is obtained, after the
termination of this agreement, by ▇▇▇▇▇▇ from any third party that is
lawfully in possession of such information, but only if such disclosure
of information to ▇▇▇▇▇▇ does not violate any contractual or legal
obligation to Kitty Hawk on the part of such third party or does not
breach a confidential relationship of such third party to Kitty Hawk;
and (c) information required or requested to be disclosed by court
order, subpoena, data request or other legal process or by applicable
regulatory authorities; provided, however, that ▇▇▇▇▇▇ provide Kitty
Hawk with prompt written notice of any such request or requirement so
that we may seek a protective order or other appropriate remedy.
Notwithstanding any of the foregoing, for the purposes hereof,
"Confidential Information" shall be deemed to include the trade
secrets, designs, concepts, and recipes, and all rights thereto, owned
or used by, Kitty Hawk, and it is hereby stipulated by the parties
hereto that such information is not generally known or otherwise
available to the public.
Salary Continuation and Consulting Agreement Page 3
C. The covenants and agreements of ▇▇▇▇▇▇ set forth in this P. 3.4 are of
a continuing nature and shall survive the expiration, termination or
cancellation of this agreement regardless of the reason therefor.
3.5 Prohibited Activities.
A. In consideration for the disclosure of Confidential Information
described in P. 3.4 of this agreement and the compensation set forth in
P. 3.3, during the term of this agreement and for a period from its
termination through December 31, 2004 (unless extended pursuant to the
terms of P. 3.1 above), ▇▇▇▇▇▇ shall not:
(1) directly or indirectly, engage or invest in, own, manage,
operate, control or participate in the ownership, management,
operation or control of, be employed by, associated or in any
manner connected with, or render services or advice to, any
Competing Business (defined below); provided, however, that
the ▇▇▇▇▇▇ may invest in the securities of any enterprise (but
without otherwise participating in the activities of such
enterprise) if such securities are listed on any national or
regional securities exchange or have been registered under
Section 12(g) of the Securities Exchange Act of 1934;
(2) directly or indirectly, either as principal, agent,
independent contractor, ▇▇▇▇▇▇, director, officer, employee,
employer, advisor (whether paid or unpaid), stockholder,
partner or in any other individual or representative capacity
whatsoever, either for his own benefit or for the benefit of
any other person or entity, divert or take away any customers
or clients of Kitty Hawk; or
(3) directly or indirectly, either as principal, agent,
independent contractor, ▇▇▇▇▇▇, director, officer, employee,
employer, advisor (whether paid or unpaid), stockholder,
partner or in any other individual or representative capacity
whatsoever, either for his own benefit or for the benefit of
any other person or entity, either (i) hire, attempt to hire,
contact or solicit with respect to hiring, any employee of
Kitty Hawk, (ii) induce or otherwise counsel, advise or
encourage any employee of Kitty Hawk to leave the employment
of Kitty Hawk, or (iii) induce any representative or agent of
Kitty Hawk to terminate or modify its relationship with Kitty
Hawk.
(4) "Competing Business" shall mean any individual, business,
firm, company, partnership, joint venture, organization, or
Salary Continuation and Consulting Agreement Page 4
other entity whose products or services compete, in whole or
in part, at any time during the term with the products or
services of Kitty Hawk or any of its subsidiaries in any
market area in the United States of America.
▇. ▇▇▇▇▇▇ agrees that if a court of competent jurisdiction determines that
the length of time or any other restriction, or portion thereof, set
forth in this P. 3.5 is overly restrictive and unenforceable, the court
may reduce or modify such restrictions to those which it deems
reasonable and enforceable under the circumstances, and as so reduced
or modified, the parties hereto agree that the restrictions of this P.
3.5 shall remain in full force and effect. ▇▇▇▇▇▇ further agrees that
if a court of competent jurisdiction determines that any provision of
this P. 3.5 is invalid or against public policy, the remaining
provisions of this P. 3.5 and the remainder of this agreement shall not
be affected thereby, and shall remain in full force and effect.
C. In the event that ▇▇▇▇▇▇ would like to provide consultation services to
one of ▇▇▇▇▇ ▇▇▇▇'▇ customers or another company that may potentially
be considered a Competing Business, ▇▇▇▇▇▇ may seek the written consent
of ▇▇▇▇▇ ▇▇▇▇'▇ Chief Executive Officer to provide such consulting
services, which shall not be unreasonably withheld.
D. Nothing herein shall prohibit ▇▇▇▇▇▇ from engaging at any time in any
manner in any business other than a Competing Business, the customers
of which may include customers of Kitty Hawk.
E. Because of the unique nature of the Confidential Information, ▇▇▇▇▇▇
acknowledges, understands and agrees that Kitty Hawk will suffer
immediate and irreparable harm if ▇▇▇▇▇▇ fails to comply with any of
his obligations under P. 3.4 and P. 3.5 of this agreement, and that
monetary damages will be inadequate to compensate Kitty Hawk for such
breach. Accordingly, ▇▇▇▇▇▇ agrees that Kitty Hawk shall, in addition
to any other remedies available to it at law or in equity, be entitled
to temporary, preliminary, and permanent injunctive relief to enforce
the terms of P. 3.4 and P. 3.5 without the necessity of proving
inadequacy of legal remedies or irreparable harm.
3.6 Independent Contractor. While serving as a consultant, ▇▇▇▇▇▇ shall at all
times be an independent contractor rather than a co-venturer, agent,
employee or representative of Kitty Hawk.
4.0 Hiring of Kitty Hawk Employees. In addition to the provisions of P. 3.5,
for a period of three (3) years after the effective date of this agreement,
▇▇▇▇▇▇ agrees that he will not attempt to knowingly hire, directly or by
someone under his direct supervision and at his direction, as an employee,
independent contractor or otherwise, any of ▇▇▇▇▇ ▇▇▇▇'▇ officers or key
employees, so long as such officer or key employee was
Salary Continuation and Consulting Agreement Page 5
not terminated by Kitty Hawk and such officer or key employee is still
employed by Kitty Hawk.
5.0 Releases
A. In consideration of the compensation provided in P. 3.3 above and other
good and valuable consideration, the sufficiency of which is hereby
acknowledged, ▇▇▇▇▇▇ hereby releases, to the greatest extent allowable
by applicable law, all claims against Kitty Hawk, its subsidiaries and
each of their respective officers, directors, employees and agents,
related to his employment and his termination, except for any claim of
willful breach. Subject to the preceding sentence, this full, final and
unconditional release shall include, but is not limited to, any and all
claims and causes of action whatsoever, whether founded on contract
(except for this agreement), tort, statute, regulation (federal, state
or local), common law, or any other theory or grounds, including but
not limited to, any adminstrative claims, and claims under the
Occupational Safety and Health Act, the Americans with Disabilities
Act, title vii of the civil Rights Act of 1964 and any subsequent years
(including, but not limited to, the civil rights act of 1991), the
Older Workers Benefit Protection Act, the federal Age Discrimination in
Employment Act, and any discrimination on the basis of national origin,
sex, race, age, handicap, or marital status, breach of contract, breach
of any other employment agreement or contract, promissory estoppel,
hostile work environment, wrongful discharge, sexual harassment, breach
of covenant of good faith and fair dealing, harassment and or
discrimination of any type, intentional or negligent infliction of
emotional distress, wrongful termination, fraud, misrepresentation,
defamation, interference with prospecive economic advantage, failure to
pay wages or other monies owed.
B. Kitty Hawk hereby releases ▇▇▇▇▇▇ of all claims, known or unknown,
against ▇▇▇▇▇▇ in connection with his obligations arising out of or in
connection with this agreement, except such release shall not apply to
claims that are the result of ▇▇▇▇▇▇' willful misconduct, including but
not limited to
Salary Continuation and Consulting Agreement Page 6
undiscovered intentional breaches of prohibitions against the
disclosure of the confidential information of Kitty Hawk or either of
its affiliates, or a commitment made to bind Kitty Hawk or either of
its affiliates without apparent or real authority. nothing herein shall
be deemed a modification of the indemnication provisions of ▇▇▇▇▇
▇▇▇▇'▇ Certificate of Incorporation, and if a conflict arises between
this agreement and the certificate of Incorporation, the Certificate of
Incorporation shall govern.
6.0 General Provisions
6.1 Entire Agreement and Amendments. This agreement is the entire agreement
between Kitty Hawk and ▇▇▇▇▇▇ with respect to the subject matter set forth in
this agreement and it merges and supersedes all former agreements, promises or
representations, whether oral or written, express or implied, that relate to
▇▇▇▇▇▇' employment with Kitty Hawk. To amend this agreement, Kitty Hawk and
▇▇▇▇▇▇ must sign a written amendment that identifies by paragraph number the
provision that it purports to amend. No noncomplying course of dealing or waiver
shall be construed to amend this agreement.
6.2 Construction. This agreement has been executed and delivered in Texas,
whose substantive law (excluding conflict of laws rules that might apply the
substantive law of another jurisdiction) shall govern its effect and
construction, except that Delaware corporate law shall govern the internal
affairs of Kitty Hawk and other corporate matters where applicable. No rule of
construction resolving ambiguity against a drafting party shall apply. This
agreement binds and benefits the parties and their respective heirs, personal
representatives, successors and assigns. ▇▇▇▇▇▇ agrees that his obligations
under this agreement to protect ▇▇▇▇▇ ▇▇▇▇'▇ proprietary information are in
addition to ▇▇▇▇▇▇' implied obligations under Texas law, and that all of those
obligations may be enforced by equitable remedies, such as injunction, as well
as by damages resulting from their breach. If any provision of this agreement is
invalid or unenforceable, the remaining provisions shall nevertheless be
enforceable.
6.3 Notices. All notices hereunder must be in writing. Notices may be given
by mail, fax or other delivery to a party at its notice address, which is that
party's address in P. 1.0 unless that party has designated another notice
address by notice hereunder. A notice given by Federal Express or U.S. Express
Mail, fee prepaid, return receipt requested, addressed to the intended recipient
at its notice address, will be deemed given three business days after deposit
with Federal Express or the U.S. Postal Service. Any notice given by other means
will be effective only when received by the addressee.
Salary Continuation and Consulting Agreement Page 7
6.4 Breach, Notice and Time to Cure. In the event that either party
breaches this agreement, the non-breaching party shall give the breaching party
written notice of such breach and the breaching party shall have the opportunity
for five (5) business days from the date of receipt of such notice to cure the
breach.
6.5 Binding Agreement to Arbitrate Disputes. Any controversy or claim
arising out of or relating to this agreement, performance under it, or the
arbitrability of any claim between the parties, must be settled exclusively by
arbitration under the Commercial Arbitration Rules of the American Arbitration
Association ("AAA"); except that (i) P. 6.2 must govern applicable law and
construction, (ii) no arbitration demand or action upon a claim arising out of
or relating to this agreement or its performance may be commenced more than two
years after the cause of action accrues, (iii) the locale of any arbitration
must be Dallas, Texas, (iv) the arbitration shall be conducted by a single
arbitrator, which shall be mutually selected by both parties, (v) the language
of the arbitration must be English, (vi) any award must state the arbitrator's
material findings of fact and conclusions of law, (vii) a party may seek
preliminary injunctive or other equitable relief from any court of competent
jurisdiction only to preserve the status quo pending selection of the
arbitrator, (viii) the arbitrator may by interim or final award grant
declarative and injunctive and other equitable relief; and (ix) a prevailing
party in litigation to require arbitration or to obtain preliminary relief
pending selection of an arbitrator, in arbitration, or in litigation to confirm
or enforce an arbitration award will be entitled to recover its reasonable
attorneys' fees and costs. Any suit to require arbitration under this agreement,
or to enforce judgment upon an arbitration award, may be brought in any court of
competent jurisdiction.
Consultant
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Kitty Hawk, Inc.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
--------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.,
President and Chief Executive Officer
Salary Continuation and Consulting Agreement Page 8
