EXHIBIT 10(i) 

 

April 24, 2001 

Robert T. Christensen 

c/o Airborne Express, Inc.  

Post Office Box 662  

Seattle, WA 98111-0662 

Dear Mr. Christensen: 

    Airborne, Inc., a Delaware corporation ("Airborne" and, collectively with
its direct and indirect wholly-owned subsidiaries the " Company") and the Board
of Directors of Airborne ("Board) are not necessarily opposed to any merger
proposal or acquisition attempt by third parties. We recognize, and insist that
our executives recognize, that in such matters our responsibility is to serve
the best interests of our shareholders in maximizing the worth and potential of
their investment. However, Airborne, as a publicly held corporation, must be
aware that insofar as it may be the subject of acquisition attempts, such
attempts do raise the possibility of a change in control of the Airborne. It
further recognizes that such a possibility can breed uncertainties as to the
continued tenure and fair treatment of key executives regardless of their value
to the Company and their individual merit. The Company is concerned that the
possibility of acquisition attempts and a change in control can have an adverse
effect on its retention of key management personnel, and that such acquisition
attempts can make it difficult for such personnel to function most effectively
in the best interests of the Company and its shareholders. In light of these
concerns, the Board has determined that it is appropriate to offer additional
security to certain key management personnel to better enable them to function
effectively without distraction in the event that uncertainties as to the future
control of the Company should arise.

    Therefore, to induce you to remain in the employ of the Company and to
encourage a high level of effective management in the best interests of the
Company and Airborne's shareholders, this letter agreement sets forth certain
benefits which the Company agrees will be provided to you if your employment
with the Company should be terminated other than for cause, or by death,
disability or normal retirement, subsequent to a "change in control" of Airborne
as defined and set forth in this Agreement. As the purpose of this Agreement is
to provide you with stability of job tenure without being discriminated against
because of activities on behalf of the Company and Airborne's shareholders in
the face of a possible "change in control" or in the alternative to provide you
with certain defined severance benefits in the face of termination without cause
or upon discriminatory treatment after a "change in control," the provisions of
this Agreement with regard to benefits shall not apply unless and until a
"change in control" occurs. Further, the benefits set forth in Section 7 of this
Agreement will not be provided if you cease to be in the Company's employ, even
after a "change in control" and during the term of this Agreement, because of
death, normal retirement, disability, "for cause," or because of voluntary
termination by you without "good reason" as they are defined herein.

    1. Term. This Agreement will at all times have a two-year term. At such time
as either you or the Company give written notice to the other party that this
Agreement is to be terminated (such notice on your part to have no force or
effect unless given by you no later than two years after a "change in control"),
then this Agreement will expire two years from receipt of the notice. In any
event, this Agreement will terminate at your normal retirement date as defined
herein.

    2. Change in Control. For the purposes of invoking your benefits under this
Agreement, a "change in control" shall mean the occurrence of any one of the
following actions or events: (a) The acquisition by any person of the power,
directly or indirectly, to exercise a controlling influence over the management
or policies of Airborne (either alone or pursuant to an arrangement or
understanding with one or more other persons), whether through ownership of
voting securities, through one or more intermediaries, by contract, by way of a
reorganization, merger or consolidation, or otherwise; or (b) The acquisition by
a person who is not a U.S. citizen (either alone or pursuant to an arrangement
or understanding with one or more other persons) of the ownership of or power to
vote 25% or more of the outstanding voting securities of Airborne; or (c) The
acquisition by a person who is a U.S. citizen (either alone or pursuant to an
arrangement or understanding with one or more other persons) of the ownership of
or power to vote 35% or more of the outstanding voting securities of the
Company; or (d) If during a period of six years after the acquisition by any
person, directly or indirectly, of the ownership of or power to vote 10% or more
of the outstanding voting securities of Airborne, the individuals who prior to
such acquisition were Directors of the Company ("Prior Directors") shall cease
to constitute a majority of the Board, unless the nomination of each new
Director was approved by a vote of a majority of the Prior Directors;

    The term "person" for purposes of this paragraph shall include a natural
person, corporation, partnership, association, joint-stock company, trust fund,
or organized group of persons.

    3. Death, Retirement and Disability. In the event of your death, normal
retirement, disability or voluntary termination without good reason during the
term hereof and following a "change in control," you or your estate will be
entitled to receive only those applicable benefits under any plans, programs and
policies in effect with regard to the executives or salaried employees of the
Company. For purposes of this Agreement, normal retirement and disability are
defined as follows:

    (a) Normal Retirement: For purposes of this Agreement, termination by the
Company or you of your employment based on normal retirement shall mean
termination at age 65 or such earlier or later age set in accordance with the
retirement policy then generally in effect with regard to the Company's salaried
employees which is not discriminatory as to you. Normal retirement shall also
include retirement in accordance with any early or deferred retirement age or
date established with your consent.

    (b) Disability: Disability as grounds for termination shall mean physical or
mental illness resulting in your absence from your duties with the Company on a
full time basis for 365 consecutive days following the exhaustion of all current
and accrued sick leave and vacation (as provided by Company policy to all
salaried employees on a nondiscriminatory basis). If within thirty (30) days
after written notice of proposed termination for disability is given by the
Company, you have not returned to the full time performance of your duties, the
Company may terminate your employment by giving written Notice of Termination
for "Disability."

    4. Other Termination Following a Change in Control. If a "change in control"
occurs and you are subsequently terminated as an employee by the Company during
the term of this Agreement (except for normal retirement, disability or for
cause as hereinafter defined) or if you terminate your employment for good
reason, as hereinafter defined, you will be entitled to receive the benefits set
forth in Section 7 hereof.

    5. Cause. After a "change in control," the Company may terminate your
employment for "cause" without liability under the benefit provisions hereof
only upon:

    (a) The willful and continued failure by you to substantially perform your
duties with the Company (other than any such failure resulting from your
incapacity due to physical or mental illness), after a demand for substantial
performance is delivered to you by the Board which specifically identifies the
manner in which the Board believes that you have not substantially performed
your duties, or

    (b) The willful engaging by you in gross misconduct demonstrably injurious
to the Company.

    For the purpose of this Section 5, no act, or failure to act, on your part
shall be considered "willful" if done, or omitted to be done, by you in good
faith and in the reasonable belief that your act or omission was in the best
interests of the Company. You shall not be deemed to have been terminated for
cause unless and until you receive a copy of a resolution duly adopted by the
affirmative vote of not less than three-quarters of the entire membership of the
Board at a meeting of the Board called and held for that purpose (after
reasonable notice to you and an opportunity for you, together with your counsel,
to be heard before the Board), finding that in the good faith opinion of the
Board you were guilty of conduct set forth in clauses (a) or (b) of the first
sentence of this Section 5 and specifying the particulars thereof.

    If your employment is terminated for cause, the Company shall pay you your
then current full base salary plus vacation and any other compensation actually
accrued through the date of termination, and the Company shall have no further
obligation to you.

    6. Good Reason. You may regard your employment as constructively terminated
by the Company, and yourself terminate your employment for "good reason"
following a "change in control" and during the term hereof, receiving the
benefits set forth in Section 7, upon the happening of one or more of the
following events which will constitute good reason for your own termination of
your employment:

    (a) Without your express written consent, the assignment to you of any
duties not customarily performed by senior executives of the Company and
inconsistent with your position as senior executive prior to a "change in
control," or the failure of the Company to maintain you in senior executive
position; or to provide you with the normal perquisites of a senior executive of
the Company, including but not limited to an office and appropriate support
services.

    (b) A reduction by the Company in your base salary as in effect prior to a
"change in control" unless such reduction is applied to all officers of the
Company and does not exceed the average percentage reduction in base salary for
all officers of the Company, with a maximum permissible reduction of 25%, or the
failure by the Company to increase such base salary each year following a
"change in control" by an amount which equals at least one-half (1/2), on a
percentage basis, the average percentage increase in base salary for all
officers of the Company or any parent or successor of the Company during the
prior two full calendar years;

    (c) A failure by the Company to maintain any of the employee benefits to
which you are entitled prior to a "change in control" at a level equal to or
greater than that in effect prior to a "change in control," through the
continuation of the same or substantially similar plans, programs and policies,
or the taking of any action by the Company which would adversely affect your
participation in or materially reduce your benefits under any such plans,
programs or policies or deprive you of any fringe benefits enjoyed by you prior
to a "change in control," unless such a reduction in benefits is
nondiscriminatory as to you and is applied generally.

    (d) The failure by the Company to provide you with the number of paid
vacation days to which you would be entitled as a salaried employee of the
Company, its subsidiaries or affiliates, or any parent or successor of the
Company on a nondiscriminatory basis.

    (e) The Company's requiring you to be based anywhere other than your current
location except for required travel on the Company's business to an extent
substantially consistent with your present business travel obligations; or the
relocation of your offices outside of their current location without your
consent.

    (f) Any purported termination of your employment by the Company which is not
effected pursuant to the notice of termination and procedures required by the
specific provision relied upon (i.e., Disability, or Cause), or normal
retirement as defined in Section 3 hereof, or any purported termination for
which the grounds relied upon are not valid.

    Upon the happening of one or more of these events, should you choose to
regard your employment as constructively terminated, delivery of a written
notice of termination setting forth the "good reason" therefor will entitle you
to the benefits as set forth in Section 7 hereof.

    7. Compensation Upon Termination Without Cause or Termination for Good
Reason. If after a "change in control" and during the term hereof, (i) you are
terminated by the Company other than by reason of normal retirement, disability
or for cause under the definitions and procedures as set forth herein, or (ii)
you choose to terminate your employment for "good reason" as set forth herein,
then the Company shall pay to you the following amounts:

    (a) Your full base salary through the date of any Notice of Termination plus
payment for all accrued vacation, and any deferred compensation to which you are
entitled for the year most recently ended and the pro rata share of any such
compensation which would be due in the year of termination, up to the date of
termination, to the extent not already paid; plus

    (b) An amount equal to:

    (i) The sum of your annual base salary at the rate in effect as of your
termination plus the amount of any additional compensation awarded you for the
year most recently ended (whether or not fully paid) including any sums awarded
under the Executive Incentive Compensation Plan, the Executive Group Incentive
Compensation Plan and the Management Incentive Compensation Plan, multiplied by:

    (ii) The number two. If your normal retirement date is less than two (2)
years from your termination date, then the multiplier shall be that fraction
remaining until your normal retirement date rounded to the nearest tenth (i.e.,
18 months equals 1.5, 8 months equals .7).

    (iii) With regard to the Company's Profit Sharing Plan and Retirement Income
Plan, the Company shall pay a lump sum equal to the amount forfeited by you, if
any, under such plan which would have vested if your employment had continued
for the remaining term of this Agreement.

    (iv) For the remaining term of this Agreement prior to your normal
retirement date, the Company shall pay your health insurance premiums, provided
you have elected COBRA continuation coverage, and at the end of such
continuation coverage period it shall at its option either arrange for you to
receive health benefits substantially similar to those which you were receiving
immediately prior to termination of the coverage period, or pay to you an amount
equal to the premiums the Company would pay on your behalf for participation in
such health plan or plans for the remaining term of this Agreement prior to your
normal retirement date.

    (v) The Company shall maintain in full force and effect at its expense, for
the remaining term of this Agreement prior to your normal retirement date, all
other employee benefit plans, programs and policies (including any life or
health insurance plans) in which you were entitled to participate immediately
prior to your termination, provided that your continued participation is
possible under the general terms and provisions of such plans, programs and
policies. In the event that your participation in any such plan, program or
policy is not possible under its terms and conditions, the Company shall arrange
to provide you with benefits substantially similar to those which you would have
been entitled to receive under each plan, program or policy. At the end of the
period of coverage, you will have the option to have assigned to you at no cost
and with no apportionment of prepaid premiums, any assignable insurance policy
owned by the Company and relating to you and to take advantage of any conversion
privileges pertinent to the benefits available under Company policies.

    (vi) In addition to the payment of benefits to which you are entitled under
the qualified retirement plans maintained by the Company in which you are a
participant on the date of your termination, the Company shall pay you in cash
at age 65 or such earlier retirement date permitted under the plan or plans as
you may elect, an amount equal to the sum of the following: (a) the difference
between the actuarial equivalent of the amount which you are entitled to
receive, if any, under the Supplemental Executive Retirement Plan and the amount
which you would have received from such plan if you had continued in the employ
of the Company for an additional two years. If your normal retirement date would
occur during that two-year period, then the amount of such additional
compensation shall be calculated on the basis that your employment continued to
that date. For the purposes of the calculation of benefits under the
Supplemental Executive Retirement Plan, the "actuarial equivalent" shall be
determined by assuming your survival to age 80, and (b) the difference between
the actuarial equivalent of the amount which you are entitled to receive, if
any, under the Retirement Income Plan and the amount which you would have
received from such plan if you had continued in the employ of the Company for an
additional two years. If your normal retirement date would occur during that
two-year period, then the amount of such additional compensation shall be
calculated on the basis that your employment continued to that date. For the
purposes of the calculation of benefits under the Retirement Income Plan, the
"actuarial equivalent" shall be determined by assuming your survival to age 80.

    (vii) At your option, in lieu of shares of common stock of Airborne, without
par value ("Airborne Shares") issuable upon exercise of options ("Options"), if
any, granted to you under the Airborne Key Employee's Stock Option and Stock
Appreciation Rights Plans (to which options employee waives all rights upon the
making of the payment referred to below), you shall receive an amount in cash
equal to the difference between the exercise prices of all Options held by you
whether or not then fully exercisable, and the higher of (a) the mean between
the closing bid and asked prices on the New York Stock Exchange on the date of
termination or (b) the highest price per Airborne Share actually paid in
connection with any change in control of Airborne.

    (viii) Notwithstanding any other provisions of this Agreement, if any
severance benefits under this Section 7 of this Agreement, together with any
other Parachute Payments (as defined under Internal Revenue Code Section
280(G)(b)(2)) made by the Company to you, if any, are characterized as Excess
Parachute Payments (as defined in Internal Revenue Code, Section 280(G)(b)(1)),
then the Company shall pay to you, in addition to the payments to be received
under this Section, an amount equal to the excise taxes imposed by Section 4999
of the Code on your Excess Parachute Payments, plus an amount equal to the
federal and, if applicable, state income taxes which will be payable by you as a
result of this additional payment.

    8. Payments and Disputes. For purposes of this Agreement, your date of
termination will be the date written Notice of Termination is given by the
Company to you. If termination is under circumstances invoking the benefits or
Section 7, then the sums specified therein will be paid no more than ten (10)
working days after the date of termination, except that the portion of the
payment based upon the amounts payable under the Management Incentive
Compensation Plan, the Profit Sharing Plan, the Retirement Income Plan and the
Supplemental Executive Retirement Plan shall be paid no later than ten (10)
working days after the amounts payable under such plans have been determined
following availability of results necessary for computation of such amounts.

    In the event that the Company wishes to contest or dispute a termination for
"good reason" by you, it must give written notice of such dispute within the
five day period after the date of termination. If you wish to contest or dispute
a termination by the Company, or any failure to make payments claimed to be due
hereunder, you must give written notice of such dispute within thirty days of
receiving a Notice of Termination. In the event of a dispute, the Company shall
continue to pay your full base salary and continue all your employee benefits in
force until final resolution of any such dispute by mutual agreement or the
final judgment, decree or order of a court of competent jurisdiction (including
any appeals, if such are perfected). You may, at your or the Company's option,
be suspended from all duties during the pendency of such a contest or dispute.
If you prevail in any such contest or dispute, the Company shall thereupon be
liable for the full amounts due under Section 7 as of the date of termination
after adjustments for amounts already paid.

    The Company will pay all fees and expenses, including full attorneys' fees,
incurred by you in good faith in contesting or disputing any termination after a
"change in control" or in seeking to obtain or enforce any right or benefit
provided by this Agreement.

    In the event that any payments due hereunder shall be delayed for any reason
for more than ten working days from the date of termination (or availability of
results under the Management Incentive Compensation Plan, the Profit Sharing
Plan, the Retirement Income Plan or the Supplemental Executive Retirement Plan,
as above provided), the amounts due shall bear the maximum legal rate of
interest until paid.

    Notwithstanding the provisions as to time of payment as above set forth, you
may at your sole option elect to have some or all of such amounts due you
deferred to a date or dates of your choosing over a period not to exceed three
years, in which event the unpaid balances shall not bear interest during the
deferred period elected by you.

    9. Mitigation. You shall not be required to mitigate the amount of any
payment due under Section 7 by seeking other employment. If you should accept a
position with another employer after your date of termination and during the
period of provision of benefits under Section 7, then the Company shall have no
further liability for the provision of benefits or further payments under
Section 7(b)(iv) and (v), and the remaining term of this Agreement for purposes
of Section 7(b)(vi) will terminate as of the date of your new employment.

    10. Covenant for Confidentiality and Not to Compete.

    You agree that as an executive of the Company, with important
responsibilities for and knowledge of its operations, your services are a
valuable asset to the Company and that you have access to business information
of material importance to the Company. Therefore, to protect the Company's
interest in you and in the integrity and success of its operations, you agree
that during the term of this Agreement while employed by the Company you will
keep all Company information confidential and will not enter into the employment
of, or invest in or contribute to, participate in the activities of, or act as
consultant to or advise any enterprise in whatever form organized and carried on
which is directly competitive with any business activity then conducted or
planned by the Company, provided, however, that you may make investments in
publicly traded securities of any issuer if the securities owned represent less
than 1% of the class of such securities of such issuer then issued and
outstanding. You further agree that for a period of one year following the
termination of your employment with the Company you will continue to keep all
Company information confidential and that you will not enter into the employment
in an executive or consultant capacity or serve on the Board of Directors of any
enterprise in whatever form organized and carried on which is directly
competitive with any business activity then conducted by the Company within the
continental United States.

    11. Successors; Binding Agreement.

    (a) This Agreement shall be binding upon any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company. As used herein,
"Company" shall mean the Company as hereinbefore defined and any successor to
its business or assets as aforesaid.

    (b) This Agreement shall inure to the benefit of and be enforceable by your
personal or legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. If you should die while any amounts are
still payable to you hereunder, all such amounts, unless otherwise provided
herein, shall be paid in accordance with the terms of this Agreement to your
devisee, legatee or other designee or, if there be not such designee, to your
estate.

    12. Notice. For the purpose of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered by United States certified mail,
return receipt requested, postage prepaid, addressed to the respective addresses
set forth on the first page of this Agreement, provided that all notices to the
Company shall be directed to the attention of the Chief Executive Officer of
Airborne or to such other address as either party may have furnished to the
other in writing in accordance herewith, except that notices of change of
address shall be effective only upon receipt.

    13. Miscellaneous. No provisions of this Agreement may be modified, waived
or discharged unless such waiver, modification or discharge is agreed to in
writing signed by you and the Chief Executive Officer of Airborne or such
officer as may be specifically designated by the Board. No waiver by either
party hereto at any time of any breach of, or lack of compliance with, any
conditions or provision of this Agreement shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same or at any prior or subsequent
time.

    No agreements or representations, oral or otherwise, express or implied,
with respect to the subject matter hereof have been made by either party which
are not set forth expressly in this Agreement.

    This Agreement supercedes any prior agreement between the Company and you
with respect to the matters set forth herein.

    The validity, interpretation, construction and performance of this Agreement
shall be governed by the laws of the State of Washington.

    14. Validity. The invalidity or unenforceability of any provisions of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement, which shall remain in full force and effect.

    15. Counterparts. 

    If this letter correctly sets forth our agreements, sign and return to the
Company the enclosed copy of this letter, retaining your copy for your files. 

 

AIRBORNE, INC. 

By /s/ Robert S. Cline 

Its 

AIRBORNE EXPRESS, INC. 

By /s/ David C. Anderson

Its 

Employee