AIRT 8K 01/04/06 J Gioffre agreement


    Exhibit
      Index

    


    


    
      	
              Exhibit

            	
              Description

            
	
              Exhibit
                10.1

            	
              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 John J. Gioffre

            
	 	 


    

    


    


    


     


    
      
        
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    EXHIBIT
      10.1

     

    AMENDED
      AND RESTATED EMPLOYMENT AGREEMENT

    JOHN
      J. GIOFFRE

    


    


    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 JOHN
      J. GIOFFRE,
      an
      individual having an address at 17940 Mollypop Lane, Cornelius, North Carolina
      28031 (“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/
      Walter Clark    

    Its:
      Chief
      Executive Officer   

    


    


    


    MOUNTAIN
      AIR CARGO, INC.

    


    By:
      /s/
      Walter Clark    

    Its:
      Chief
      Executive Officer   

    


    


    


    CSA,
      INC.

    


    By:
      /s/
      Walter Clark    

    Its:
      President   

    


    


    


    MAC
      AVIATION SERVICES, LLC

    


    By:
      /s/
      Walter Clark    

    Its:
      Executive
      Vice President   

    


    


    


    /s/
      John J. Gioffre    

    John
      J.
      Gioffre

    


     


    
      
        
          


        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
          


        

      

    



    EXHIBIT
      A

    


    


    
      	
              COMPANY

            	
              POSITIONS

            
	
               

              Air
                T, Inc.

            	
               

              Vice
                President Finance

              Secretary

              Treasurer

              Chief
                Financial Officer

            
	
              Mountain
                Air Cargo, Inc

            	
              Vice
                President Finance

              Secretary

              Treasurer

              Chief
                Financial Officer

            
	
              CSA
                Air, Inc.

            	
              Vice
                President Finance

              Secretary

              Treasurer

            
	
              MAC
                Aviation Services, LLC

            	
              Vice
                President Finance

              Secretary

              Treasurer