Document:

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                                                                   EXHIBIT 10.11

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                  Salary Continuation and Consulting Agreement

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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 1515 W. 20/th/ Street, P.O. Box 612787,
DFW International Airport, Texas 75261, and Tilmon J. Reeves ("Reeves"), who
resides at 316 Lakeland Drive, Highland Village, Texas 75077, with a fax number
of (972) 456-2296.

     1.2 Date. This agreement is dated and effective November 4, 2002.

2.0  Recitations and Acknowledgments

     2.1 Previous Employment. Reeves was the Chairman and Chief Executive
Officer of Kitty Hawk and voluntarily resigned on November 4, 2002. Reeves 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 Reeves during the many years in which he served Kitty Hawk. This
agreement supersedes, modifies and restates all previous agreements between
Reeves 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, Reeves' engagement hereunder
shall terminate upon his death; provided, however, that if Reeves 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. Reeves will be a consultant to Kitty Hawk, and will
take on such projects as shall be assigned by Kitty Hawk's 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

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Hawk in analyzing and establishing new sources of revenue. Reeves 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
Kitty Hawk's Chief Executive Officer attempts to assign a project to Reeves and
Reeves is completely unavailable for such an assignment for a period in excess
two weeks, the payments contemplated hereunder shall cease until such time as
Reeves is again available and begins to perform the project assigned by Kitty
Hawk's Chief Executive Officer. Additionally, Reeves 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 Reeves, and in consideration of the covenants of Reeves set forth in
P. 3.4 and P. 3.5, Reeves 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 Reeves to be covered
under Kitty Hawk's medical and hospitalization insurance coverage, at no cost to
Reeves, and such coverage shall be at least substantially equivalent to the
coverage that is was provided to Reeves under Kitty Hawk's 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 Kitty Hawk's medical and hospitalization insurance
policy as in effect at any applicable time hereunder. If it is determined that
Reeves is not eligible to be covered by Kitty Hawk's medical and hospitalization
insurance policy, Kitty Hawk agrees to pay Reeves' 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.

     A.  Reeves acknowledges, understands and agrees that all Confidential
         Information (defined below), whether developed by Kitty Hawk or others
         or whether developed by Reeves 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. Reeves 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

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         Reeves and Kitty Hawk. Reeves 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
         Kitty Hawk's 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 Reeves 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 Reeves). 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 Reeves knew already prior to the time of his
         employment by Kitty Hawk; (b) information that is obtained, after the
         termination of this agreement, by Reeves from any third party that is
         lawfully in possession of such information, but only if such disclosure
         of information to Reeves 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 Reeves 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.

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     C.  The covenants and agreements of Reeves 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), Reeves 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 Reeves 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, Reeves, 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, Reeves, 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

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                  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.

     B.  Reeves 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. Reeves 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 Reeves would like to provide consultation services to
         one of Kitty Hawk's customers or another company that may potentially
         be considered a Competing Business, Reeves may seek the written consent
         of Kitty Hawk's Chief Executive Officer to provide such consulting
         services, which shall not be unreasonably withheld.

     D.  Nothing herein shall prohibit Reeves 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, Reeves
         acknowledges, understands and agrees that Kitty Hawk will suffer
         immediate and irreparable harm if Reeves 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, Reeves 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, Reeves 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,
     Reeves 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 Kitty Hawk's officers or key
     employees, so long as such officer or key employee was

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     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, Reeves 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 Reeves of all claims, known or unknown,
         against Reeves 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 Reeves' willful misconduct, including but
         not limited to

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         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 Kitty
         Hawk's 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 Reeves 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
Reeves' employment with Kitty Hawk. To amend this agreement, Kitty Hawk and
Reeves 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. Reeves agrees that his obligations
under this agreement to protect Kitty Hawk's proprietary information are in
addition to Reeves' 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.

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     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/ Tilmon J. Reeves
                                      ------------------------------------------
                                      Tilmon J. Reeves

                                      Kitty Hawk, Inc.

                                      By: /s/ Robert W. Zoller, Jr.
                                          --------------------------------------
                                          Robert W. Zoller, Jr.,
                                          President and Chief Executive Officer

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                                                                   Exhibit 10.12

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                   SALARY CONTINUATION AND SEVERANCE AGREEMENT

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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 1515 W. 20th Street, P.O. Box 612787, DFW
International Airport, Texas 75261, with a fax number of (972) 456-2449, and
James R. Craig ("Craig"), who resides at 6000 Highland Hills Lane, Colleyville,
Texas 76034.

     1.2 Date. This agreement is dated and effective November 4, 2002.

2.0  RECITATIONS AND ACKNOWLEDGMENTS

     2.1 Previous Employment. Craig was the Vice President and General Counsel
of Kitty Hawk, and a member of its Board of Directors, and voluntarily resigned
all of his offices on November 4, 2002. Craig 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 Craig during
the many years in which he served Kitty Hawk. This agreement supersedes,
modifies and restates all previous agreements between Craig and Kitty Hawk.

3.0  TERMS OF SALARY CONTINUATION

     3.1 Compensation. As severance compensation, Kitty Hawk will pay Craig six
(6) months worth of what was Craig's basic annual compensation at time of his
resignation, which was $225,000.00. This severance shall be payable in equal
semi-monthly installments, the first being payable November 15, 2002, and the
last being payable April 30, 2003, 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).

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     3.2 Medical Insurance. For a period of six (6) months ending April 30,
2003, Kitty Hawk shall exert reasonable efforts to cause Craig to be covered
under Kitty Hawk's medical and hospitalization insurance coverage, at no cost to
Craig, and such coverage shall be at least substantially equivalent to the
coverage that is was provided to Craig under Kitty Hawk's employee medical plans
at the time of his resignation. The insurance described in this paragraph shall
be provided only if coverage is permitted by the terms of Kitty Hawk's medical
and hospitalization insurance policy as in effect at any applicable time
hereunder. If it is determined that Craig is not eligible to be covered by Kitty
Hawk's medical and hospitalization insurance policy, Kitty Hawk agrees to pay
Craig's COBRA premiums for as long as he otherwise would be entitled to the
insurance coverage provided in this P. 3.2.

     3.3 Transitional Obligations and Office Access. Craig agrees to use his
reasonable efforts to assist Kitty Hawk in a successful and smooth transition of
the oversight of the legal, human resources and security functions of Kitty Hawk
to those individuals as designated by Kitty Hawk's Chief Executive Officer.
Craig shall be allowed to maintain his office at Kitty Hawk through December 3,
2002, and during such period shall have the same access to Kitty Hawk's systems,
information and files that was available to him before his resignation.
Thereafter, Craig shall have, with the consent of Kitty Hawk's Chief Executive
Officer or such person as he shall designate (which shall not be unreasonably
withheld), access to Kitty Hawk's files, documents and other records, regardless
of format, that he determines to be reasonably related to (i) Craig's work done
on behalf of Kitty Hawk and (ii) the defense of the lawsuit filed against him by
M. Tom Christopher.

     3.4  Proprietary information.

     A.   Craig shall diligently safeguard Kitty Hawk's proprietary information
          and shall surrender to Kitty Hawk or destroy all written or recorded
          evidence of Kitty Hawk's proprietary information, and shall return any
          Kitty Hawk property in Craig's possession, once the Christopher
          litigation has concluded.

     B.   Craig shall never disclose, disseminate or utilize Kitty Hawk's
          proprietary information unless Kitty Hawk's chief executive officer
          expressly authorizes the disclosure, dissemination or utilization in
          writing, except to the extent reasonably necessary for his defense of
          the Christopher litigation, and then only consistently with the
          applicable rules of procedure governing the litigation and with the
          Delaware General Corporation Law and Kitty Hawk's certificate of
          incorporation.

     C.   For the purpose of this agreement, the term "proprietary information"
          shall specifically not include: (a) information that is now in or
          hereafter enters

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          the public domain without a breach of this agreement by Craig; (b)
          information Craig knew already prior to the time of his employment by
          Kitty Hawk; (c) information that is obtained, after the date of
          Craig's departure from Kitty Hawk, by Craig from any third party that
          is lawfully in possession of such information, but only if such
          disclosure of information to Craig 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 (d) 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 Craig
          provide Kitty Hawk with prompt written notice of any such request or
          requirement so that Kitty Hawk may seek a protective order or other
          appropriate remedy.

     D.   The covenants and agreements of Craig 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.

     E.   Because of the unique nature of the Confidential Information, Craig
          acknowledges, understands and agrees that Kitty Hawk will suffer
          immediate and irreparable harm if Craig fails to comply with any of
          his obligations under this P. 3.4 of this agreement, and that monetary
          damages will be inadequate to compensate Kitty Hawk for such breach.
          Accordingly, Craig 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 without the necessity of proving inadequacy of legal
          remedies or irreparable harm.

4.0  RELEASES

     A.   IN CONSIDERATION OF THE COMPENSATION PROVIDED IN P. 3.1 ABOVE AND
          OTHER GOOD AND VALUABLE CONSIDERATION, THE SUFFICIENCY OF WHICH IS
          HEREBY ACKNOWLEDGED, CRAIG HEREBY RELEASES, TO THE GREATEST EXTENT
          ALLOWABLE BY APPLICABLE LAW, ALL CLAIMS, KNOWN OR UNKNOWN, BASED UPON
          ACTIONS, INACTIONS OR BREACHES THROUGH NOVEMBER 4, 2002 AGAINST KITTY
          HAWK, ITS SUBSIDIARIES AND EACH OF THEIR RESPECTIVE OFFICERS,
          DIRECTORS, EMPLOYEES AND AGENTS, RELATED TO HIS EMPLOYMENT AND HIS
          RESIGNATION, EXCEPT FOR (I) ANY CLAIM OF WILLFUL BREACH, (II) CLAIMS
          OF ANY KIND AGAINST M. TOM

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          CHRISTOPHER UPON WHICH CHRISTOPHER IS NOT ACTUALLY INDEMNIFIED BY
          KITTY HAWK AS POST-PETITION CLAIMS, AND (III) THE INDEMNIFICATION
          OBLIGATIONS FOR COSTS OF DEFENSE THAT MAY ARISE AS A RESULT OF ANY
          CLAIMS OF ANY KIND ASSERTED BY M. TOM CHRISTOPHER AGAINST CRAIG FOR
          ACTIONS TAKEN IN CRAIG'S NORMAL COURSE AND SCOPE OF HIS EMPLOYMENT
          WITH KITTY HAWK. 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. ADDITIONALLY, CRAIG HEREBY RELEASES AND WAIVES ANY CLAIM FOR
          INDEMNIFICATION AGAINST KITTY HAWK OF ANY DAMAGES AWARDED TO M. TOM
          CHRISTOPHER IN A FINAL, NON-APPEALABLE JUDGEMENT ARISING OUT OF THAT
          CERTAIN ADVERSARIAL PROCEEDING NO. 0204164, STYLED M. TOM CHRISTOPHER
          V. JAMES R. CRAIG, PENDING IN THE UNITED STATES BANKRUPTCY COURT FOR
          THE NORTHERN DISTRICT OF TEXAS, FORT WORTH DIVISION, IN KITTY HAWK'S
          CHAPTER 11

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          PROCEEDING BEING JOINTLY ADMINISTERED UNDER CASE NO. 400-42141-BJH-11.

     B.   KITTY HAWK HEREBY RELEASES CRAIG OF ALL CLAIMS, KNOWN OR UNKNOWN,
          BASED UPON ACTIONS, INACTIONS OR BREACHES THROUGH NOVEMBER 4, 2002,
          AGAINST CRAIG IN CONNECTION WITH HIS OBLIGATIONS ARISING OUT OF OR IN
          CONNECTION WITH THIS HIS EMPLOYMENT BY KITTY HAWK, EXCEPT SUCH RELEASE
          SHALL NOT APPLY TO CLAIMS THAT ARE THE RESULT OF CRAIG'S WILLFUL
          MISCONDUCT, INCLUDING BUT NOT LIMITED TO 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 KITTY HAWK'S CERTIFICATE OF
          INCORPORATION, AND IF A CONFLICT ARISES BETWEEN THIS AGREEMENT AND THE
          CERTIFICATE OF INCORPORATION, THE CERTIFICATE OF INCORPORATION SHALL
          GOVERN.

5.0  GENERAL PROVISIONS

     5.1 Entire Agreement and Amendments. This agreement is the entire agreement
between Kitty Hawk and Craig 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
Craig's employment with Kitty Hawk, except that it is not intended to modify any
obligation of M. Tom Christopher to Craig under or with respect to any such
agreement. To amend this agreement, Kitty Hawk and Craig 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.

     5.2 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. Craig agrees that his obligations under
this agreement to protect Kitty Hawk's proprietary information are in addition
to Craig's

Salary Continuation and Severance Agreement                               Page 5

<PAGE>

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.

     5.3 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.

     5.4 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.

     5.5 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. 5.2 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, (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.

                                    /S/ JAMES R. CRAIG
                                    --------------------------------------------
                                    JAMES R. CRAIG

Salary Continuation and Severance Agreement                               Page 6

<PAGE>

                                     KITTY HAWK, INC.

                                     By: /S/ ROBERT W. ZOLLER, JR.
                                         ---------------------------------------
                                         Robert W. Zoller, Jr.,
                                         President and Chief Executive Officer

Salary Continuation and Severance Agreement Page                          Page 7

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