EX-10.14 14 dex1014.txt MEMORANDUM OF UNDERSTANDING Exhibit 10.14 [SpencerStuart Logo] TERM SHEET - continued Robert W. Zoller President & Chief Executive Officer Term Sheet Robert W. Zoller President & Chief Executive Officer Kitty Hawk, Inc. October 29, 2002 Position: President & Chief Executive Officer & A Member of The Board. Responsibilities: As outlined in the Position and Candidate Specifications document provided to you earlier in this search process. Commitment: The role of President & Chief Executive Officer is a full-time one and requires the best efforts and total professional commitment of its incumbent. You will be expected to apply yourself to this role on a dedicated business, without interference from other professional activities. This implies that you should: o Complete any outstanding commitments outside Kitty Hawk you may have as soon as possible and advise the board of what those are; and o Not take on any new commitments outside Kitty Hawk without the prior approval of the Board. Reporting to: Board of Directors. A Non-Executive Chairman will be appointed in the near- term. You will also be appointed a director of the company. Management changes: We confirm that, as the President & Chief Executive Officer, you will have ultimate authority to recruit, reappoint, or terminate executive staff at Kitty Hawk. Location: Dallas, Texas You will play a lead role in recommending to the Board the most appropriate corporate headquarters for the company. If the board decides to change the corporate headquarters, Kitty Hawk will arrange for you to relocate to that location. [SpencerStuart Logo] TERM SHEET - continued Robert W. Zoller President & Chief Executive Officer Term & Termination: Your term as President & Chief Executive Officer will be for a three year period. Should you be terminated involuntarily without cause or "constructively terminated", you would be provided a severance equal to twelve months' base salary and benefits for twelve months. "Constructively terminated" shall mean for these purposes involuntary removal from the President, CEO or Board Member capacity. Base Salary: $300,000, subject to review on an annual basis. Incentive Compensation Kitty Hawk will be introducing a new (Cash and Equity) incentive compensation program for its top leadership team. As the CEO, you will participate in a process over the near-term, with help of professional compensation consultants, to develop and secure Board approval for the new incentive compensation program. Your own incentive compensation will be governed by this new program. You have our assurance that the Board wants this program and your participation to be similar to those in place at comparable public companies. Temporary Living: Kitty Hawk will cover the reasonable cost of a rented apartment (including utilities) in the Dallas area and the reasonable cost of a rental car until the earlier of: o The sale of your Hawaii condominium and the relocation of your goods to Dallas; or o The relocation of the Kitty Hawk corporate headquarters to a new location. Should the decision be taken to keep the corporate headquarters in Dallas, then you will be expected to relocate on a permanent basis within 90 days of that decision. Travel Expenses: Until such a time as you relocate permanently, Kitty Hawk will cover your travel expenses to/from Hawaii to attend to personal matters (e.g., transferring basic living necessities such as clothing, selling your property, completing your participation on the University of Hawaii Advisory Board and the Dean Search Committee). Such travel should not be excessive and should be undertaken at lowest possible cost. To the extent that other airline - airline travel privileges are available to [SpencerStuart Logo] TERM SHEET - continued Robert W. Zoller President & Chief Executive Officer Kitty Hawk executives, you will be entitled to those and expected to use them. Employment Benefits: Standard Kitty Hawk Inc. executive level benefits. Start Date: No later than November 11, 2002 Conditions: Subject to approval and election by the Board Satisfactory background check and educational verification Satisfactory medical examination or recent medical report Maintaining this agreement in confidence until mutually agreed upon to communicate it more broadly. Acceptance of offer by October 31, 2002. /s/ Myron Kaplan as Chairman of the Kitty Hawk Search Committee /s/ Robert W. Zoller, Jr.