Document:

Exhibit 10.4

 

AMENDED
AND RESTATED

EMPLOYMENT
AGREEMENT

 

This Amended and Restated
Employment Agreement (“Agreement”) is made effective as of January 1, 2009
(the “Effective Date”) by and between Global Aero Logistics Inc., a Delaware
corporation (the “Company”), and Mark M. McMillin (“Executive”).

 

WHEREAS, Executive and
Company desire to amend and restate the employment agreement entered into by
and between the parties effective as of August 15, 2007 (the “Prior
Agreement”) which sets forth the terms and conditions for Executive’s continued
employment with the Company primarily for the purpose of conforming the
provisions of the Prior Agreement to the requirements of Section 409A of
the Internal Revenue Code and the rules and regulations promulgated thereunder;

 

NOW, THEREFORE, in
consideration of the foregoing recital and of the mutual covenants set forth
herein, and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties agree as follows:

 

1.             Agreement to Employ and
Acceptance.  The Company
hereby employs Executive, and Executive hereby accepts employment with the
Company, in each case, on the terms and subject to the conditions set forth
herein.

 

2.             Defined Terms.  In addition to terms defined elsewhere
herein, please see Attachment A.

 

3.             Term of Employment.  The term of this Agreement begins on the
Effective Date and continues until terminated by either party (the “Term”).  The Company and Executive acknowledge and
agree that Executive’s employment is on an at-will basis, and, accordingly,
either the Company or Executive may terminate the employment relationship at
any time for any reason, or no reason, with or without cause.

 

If Executive elects to
resign from Executive’s employment under this Agreement (whether for Cause, for
Good Reason or Without Cause or Good Reason), Executive agrees to provide the
Company before and following the effective date of such resignation (and with
no additional compensation or benefits beyond that provided for in this
Agreement) with such assistance as the Company reasonably may request so as to
accomplish an effective and orderly transition of Executive’s employment
responsibilities, work files and documents and open projects and assignments to
a replacement employee for Executive.

 

4.             Position and
Responsibilities.  During the
Term, Executive will serve as Senior Vice President, General Counsel &
Corporate Secretary and in such additional executive positions as the Company
may designate from time to time during the Term.  Executive agrees to perform all of the duties
and responsibilities associated with such position(s) as well as all other
duties and responsibilities that may be assigned to Executive from time to time
by the Chief Executive Officer.

 

Executive will devote his or
her full working time, attention, energies and skills exclusively to the
business and affairs of the Company; will exercise the highest degree of 

 

 

loyalty
and the highest standards of conduct in the performance of Executive’s duties;
will not, except, as noted herein, engage in any other business activity,
whether or not such business activity is pursued for gain, profit or other
pecuniary advantage, without the express written consent of the Company; and
will not take any action that deprives the Company of any business
opportunities or otherwise act in a manner that conflicts with the best
interests of the Company or that is detrimental to the business of the Company.

 

Nothing contained herein
shall preclude Executive from (a) investing Executive’s personal assets in
such form or manner as will not require Executive’s services in any capacity in
the operations and affairs of the businesses in which such investments are
made, or (b) participating in charitable or other not-for-profit activities
as long as such activities do not interfere with Executive’s work for the
Company.

 

5.             Compensation and Benefits.  During the Term, the Executive shall be
entitled to the following compensation and benefits:

 

5.1           Annual Base Salary.  The Company shall pay Executive a base salary
at the annual rate of no less than TWO HUNDRED FIFTY THOUSAND Dollars and
00/100 ($250,000.00) (the “Base Salary”) unless and until Executive and the
Company agree to a different amount, in which event the new agreed amount shall
be the Base Salary from the effective date of that agreed adjustment.  The Base Salary will be reviewed annually to
determine any appropriate upward adjustments at the discretion of the Board of
Directors.

 

5.2           Incentive Compensation.  Executive will be given the opportunity to
earn an annual incentive bonus calculated on 60% of his or her Base Salary in
accordance with the annual incentive plan generally applicable to the Company’s
executive officers, as the same may be in effect from time to time (the “Annual
Bonus”).  For the sake of clarity, the
Executive’s Annual Bonus may be less or more than the percentage stated in the
preceding sentence depending upon the financial targets actually achieved by
the Company in any given year.

 

5.3           Eligibility for Equity
Awards.  Executive shall be entitled to
participate in any stock option, restricted stock, performance share,
performance unit or other equity based longterm incentive compensation plan,
program or arrangement generally made available to executive officers of the
Company.  Nothing herein shall affect any
stock option, restricteed stock, performance share, performance unit or other
equity previously awarded to the Executive.

 

5.4           Employee Benefits.  Executive will be eligible to participate in
each health and welfare benefit plan sponsored or maintained by the Company and
made available generally to its executive officers, subject to the eligibility
requirements and other terms and conditions of the benefit programs and plans.  Nothing contained in this Section shall
obligate the Company to institute, maintain or refrain from changing, amending
or discontinuing any employee health and welfare benefit plan or program, so
long as such changes are similarly applicable to other similarly situated
executive officers.

 

5.5           Paid Time Off.  Executive shall be entitled to no less than
twenty (20) days of vacation and no less than seven (7) days of sick leave
per year (vacation and sick leave 

 

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collectively the Executive’s
annual “PTO”) otherwise in accordance with Company policy as the same is in
effect from time to time.

 

5.6           Perquisites.  Executive shall be entitled to receive such
perquisites as are generally provided to other executive officers of the
Company in accordance with the then current policies and practices of the
Company.

 

5.7           Travel Benefits.  Executive shall be entitled to positive space
passes on Company airlines and, to the extent available, any carrier with whom
the Company has a reciprocal pass arrangement in place at the time.  Such pass privileges shall include the
Executive’s spouse and eligible children to the extent consistent with the
Company’s travel benefits program as the same is in effect from time to time,

 

5.8           Reimbursement of Expenses;
In-Kind Benefits.  All
expenses eligible for reimbursements described in this Agreement must be
incurred by the Executive during the Term of this Agreement to be eligible for
reimbursement.  All in-kind benefits
described in this Section 5 must be provided by the Company during the
Term of this Agreement or, where applicable, during the eligible person’s
lifetime.  The amount of reimbursable
expenses incurred, and the amount of in-kind benefits provided, in one taxable
year shall not affect the expenses eligible for reimbursement, or in-kind
benefits provided, in any other taxable year. 
Each category of reimbursement shall be paid as soon as administratively
practicable, but in no event shall any such reimbursement be paid after the
last day of the calendar year following the calendar year in which the expense
was incurred.  Neither rights to
reimbursement nor in-kind benefits are subject to liquidation or exchanges for
other benefits.

 

5.9           Changes to Compensation
Structure.  The Board
of Directors, or any appropriate committee thereof, may initiate changes to the
compensation structure that may impact Executive’s compensation.  As long as such changes are applicable
broadly and equitably to all Executive officers, such changes shall not
constitute Good Reason for purposes of Section 6.3 or otherwise constitute
a breach of this Agreement,

 

6.             Termination of Employment.

 

6.1           Grounds for Termination.  Executive’s employment may be terminated (a) by
the Company for Cause, Without Cause, or due to Executive’s Disability or death
or (b) by Executive with or without Good Reason.  In the event that Executive’s employment with
the Company is terminated by either party for any reason, no termination
benefits or other payments shall be payable to or in respect of Executive
pursuant to this Agreement, except as specifically provided in this Section 6.

 

6.2           Notice of Termination.  Prior to any termination by the Company or
Executive for any reason (other than due to Executive’s death), a Notice of
Termination shall be delivered by the Company or Executive, as the case may be,
to the other party to this Agreement.

 

6.3           Payments Upon Termination
Without Cause or for Good Reason.  If Executive’s employment with the Company is
terminated by the Company Without Cause or by Executive for Good Reason, the
obligation to pay and provide to Executive compensation and benefits under this
Agreement shall immediately terminate, except:

 

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(a)                                  Executive shall
be paid severance compensation in a lump sum equal to twelve (12) months (or
twenty four (24) months for Termination Without Cause within ninety (90) days
following a Change in Control), of: (i) Base Salary and (ii) the
target Annual Bonus in effect at the time of termination.  Any portion of the Annual Bonus that is
earned and already paid in the calendar year of Executive’s termination, will
be deducted from this severance compensation. 
The severance compensation will be paid to Executive in a lump sum
within thirty (30) days following the Executive’s Separation from Service on or
after the Executive’s Date of Termination;

 

(b)                                 Executive shall
be reimbursed for the cost of obtaining COBRA health continuation coverage
under the Company’s group health plan for the lesser of (i) eighteen (18)
months of such coverage, (ii) until the Executive obtains comparable
health coverage for himself or herself and his or her eligible dependents, or (iii) the
period of coverage to which the Executive is entitled under Section 4980B(f)(2)(B) of
the Internal Revenue Code;

 

(c)                                  Executive shall
also be provided the sum of: (i) Executive’s full Base Salary through the
Date of Termination, to the extent not previously paid; (ii) payment for
his or her unused PTO as of the Date of Termination; and (iii) any
benefits accrued and payable to Executive under any applicable employee benefit
plan of the Company or its Affiliates in which Executive was a participant
during the Term, including the travel benefits pursuant to Section 5.7,
subject in each such case to the applicable terms and conditions of such plans
as in effect from time to time (such amounts under clauses (i), (ii), and (iii) of
this Section 6.3(c), collectively, the “Accrued Obligations”);

 

(d)                                 All outstanding
stock options, whether or not then exercisable, shall become fully vested and
exercisable and the restrictions on any outstanding restricted stock shall
lapse with the condition that all such options will expire at the earlier of (i) the
first anniversary of the Date of Termination or (ii) the maximum option
term as set forth by the applicable option award;

 

(e)                                  Executive shall
be entitled to lifetime positive space passes on the Company’s airlines and, to
the extent available, any carrier with whom the Company has a reciprocal pass
arrangement in place at the time.  Such
pass privileges shall include the Executive’s spouse and eligible children to
the extent consistent with the Company’s travel benefits program as the same is
in effect from time to time; and

 

(f)                                    To the extent
that the severance compensation provided for in this Section 6.3
constitute payments of “deferred compensation” to a “specified employee” within
the meaning of Internal Revenue Code Section 409A9(a)(2)(B)9(i), any such
payments due during the first six months following the Executive’s Date of
Termination will be delayed and will be 

 

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paid to Executive on the first day of the
seventh month following Executive’s Date of Termination and the travel benefits
shall not be provided until the first day of the seventh month following
Executive’s Date of Termination.  Other
than the foregoing, the Company shall have no further obligations to Executive
under this Agreement.

 

6.4           Termination Due to Death.  If Executive dies during the Term, this
Agreement shall terminate on the date of the Executive’s death.  Upon the death of Executive, the obligation
to pay and provide to Executive compensation and benefits under this Agreement
shall immediately terminate, except:

 

(a)                                  Executive’s estate
shall be paid the Accrued Obligations plus the continuation, of Base Salary
payments for an additional three (3) months immediately following the date
of the Executive’s death;

 

(b)                                 for an
additional three (3) month following the date of Executive’s death, the
Company shall reimburse Executive’s spouse and participating dependants for the
cost of obtaining COBRA medical and dental continuation coverage under the
Company’s group health plan;

 

(c)                                  for an
additional twelve (12) months immediately following the Executive’s death,
Executive’s spouse and eligible dependents shall continue to be provided the
travel benefits pursuant to Section 5.7;

 

(d)                                 All outstanding
stock options, whether or not then exercisable, shall become fully vested and
exercisable and the restrictions on any outstanding restricted stock shall
lapse with the condition that all such options will expire at the earlier of (i) the
first anniversary of the Date of Termination or (ii) the maximum option
term as set forth by the applicable option award; and

 

(e)                                  Other than the
foregoing, the Company shall have no further obligations to Executive (or
Executive’s estate, heirs, executors, administrators and personal
representatives) under this Agreement.

 

6.5           Termination Due to
Disability.  If Executive
suffers a Disability, the Company shall have the right to terminate this
Agreement and Executive’s employment with the Company following expiration of
the notice period set forth in the Notice of Termination.  Upon the termination of this Agreement
because of Disability, the obligation to pay and provide to Executive
compensation and benefits under this Agreement shall immediately terminate,
except:

 

(a)                                  All outstanding
stock options, whether or not then exercisable, shall become fully vested and
exercisable and the restrictions on any outstanding restricted stock shall
lapse with, the condition that all such options will expire at the earlier of (i) the
first anniversary of the Date of Termination or (ii) the maximum option
term as set forth by the applicable option award;

 

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(b)                                 In addition,
Executive shall be entitled to obtain payment from the insurer(s) of such
payments as Executive may be entitled to receive under any long-term disability
insurance policy or policies maintained by the Company with third party
insurers and under which Executive is insured; and

 

(c)                                  Executive shall
be entitled to lifetime positive space passes on the Company’s airlines and, to
the extent available, any carrier with whom the Company has a reciprocal pass
arrangement in place at the time.  Such
pass privileges shall include the Executive’s spouse and eligible children to
the extent consistent with the Company’s travel benefits program as the same is
in effect from time to time.

 

6.6           Termination For Cause.  At any time during the Term, the Company may
terminate this Agreement and Executive’s employment with the Company for “Cause”
as provided in this Section 6.6. 
Upon termination of Executive’s employment by the Company for Cause, the
obligation to pay or provide Executive compensation and benefits (including
travel benefits under Section 5.7) under this Agreement shall terminate,
except:

 

(a)                                  Executive shall
be paid the Accrued Obligations;

 

(b)                                 Executive shall
forfeit the Annual Bonus earned in the year in which the Termination for Cause
occurred;

 

(c)                                  all outstanding
stock options which are not exercisable shall be forfeited; and

 

(d)                                 all restricted
stock as to which restrictions have not lapsed shall be forfeited.

 

6.7           Termination by Executive
Without Good Reason.  Upon
termination of Executive’s employment by Executive without Good Reason, all
obligations to pay or provide Executive compensation and benefits under this
Agreement shall terminate, except Executive shall be paid the Accrued
Obligations.

 

7.             Severance Release.  Executive acknowledges and agrees that as a
condition to receiving any of the severance compensation pursuant to Section 6.3
of this Agreement (such severance compensation being collectively referred to
as the “Severance Compensation”), Executive shall execute and deliver to
Company a Release Agreement in form and substance reasonably satisfactory to
the Company pursuant to all of which subsidiaries and Executive releases and
waives any and all claims against the Company and all of their subsidiaries and
Affiliates and its and their shareholders, directors, officers and employees
arising out of this Agreement, Executive’s employment with the Company,
Executive’s work for the Company or any of its Affiliates and/or the
termination of Executive’s employment with the Company; provided, however, that
such Release Agreement shall not affect or relinquish:

 

(a)                                  any vested
rights Executive may have under any insurance or other employee benefits plans
sponsored by the Company

 

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(b)                                 any claims for
salary or other compensation earned by Executive prior to the employment
termination date;

 

(c)                                  any claims for
reimbursement of business expenses incurred prior to the employment termination
date;

 

(d)                                 any rights to
Severance Compensation; or

 

(e)                                  Executive’s
rights to indemnification pursuant to Section 11 of this Agreement or by
law.

 

In the event Executive dies
during the period Executive is receiving any cash Severance Compensation, the
Company’s obligation to, pay such Severance Compensation shall not terminate,
and the unpaid portion of such Severance Compensation shall be paid in a lump
sum to Executive’s estate within thirty (30) days following the death of the
Executive.

 

8.             Resignation as Officer
and/or Director Upon Employment Termination.  In the event Executive’s employment with the
Company terminates for any reason (including, without limitation, pursuant to
Sections 6.3 through 6.7 herein), Executive agrees and covenants that Executive
will immediately resign any and all positions, including, without limitation,
as an officer and/or member of the Board of Directors or any other governing
boards, Executive may hold with the Company or any of its Affiliates.

 

9.             No Duplication.  Executive acknowledges that, unless otherwise
provided for in any policy or plan governing severance benefits for employees
of the Company, including Executive, Executive shall be entitled only to the
Severance Compensation as a severance benefit related to Executive’s employment
under this Agreement.

 

10.           Non-Disclosure.  Executive acknowledges that during the course
of Executive’s employment with the Company Executive will be creating, making
use of, acquiring, and/or adding to confidential information relating to the
business and affairs of the Company (and its Affiliates), which information
will include, without limitation, procedures, methods, manuals, lists of
customers, suppliers and other contacts, sales and other reports, marketing
plans, business plans, financial data, and personnel information.  Executive covenants and agrees that Executive
shall not, at any time during Executive’s employment with the Company or
thereafter at any time, directly or indirectly, use, divulge or disclose for
any purpose whatsoever the Company (or its Affiliates) confidential information
or trade secrets, except in the course of Executive’s work for and on behalf of
the Company (or its Affiliates).  During
Executive’s employment by the Company, any inventions, new devices, or
procedures, as well as any patent, copyright or trademark applications filed,
or patents, copyrights or trademarks obtained, as a result of Executive’s
efforts on behalf of the Company (or any of its Affiliates) shall belong and
inure to the exclusive benefit of the Company. 
Upon the termination of Executive’s employment with the Company, or at
the Company’s request, Executive shall immediately deliver to the Company any
and all records, documents, or electronic data (in whatever form or media), and
all copies thereof, in Executive’s possession or under Executive’s control,
whether prepared by Executive or others, containing confidential information or
trade secrets relating to the Company (or its Affiliates).  Executive acknowledges and agrees that
Executive’s obligations under this Section 

 

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10 shall survive the
expiration or termination of this Agreement and the cessation of Executive’s
employment with Company for whatever reason.

 

11.           Restrictive Covenants.  Executive acknowledges that in connection
with Executive’s employment with the Company, Executive will provide
executive-level services that are of a unique and special value and that
Executive will be entrusted with confidential and proprietary information
concerning the Company and its Affiliates. 
Executive further acknowledges that the Company and its Affiliates are
engaged in highly competitive businesses and that the Company and its Affiliates
expend substantial amounts of time, money and effort to develop trade secrets,
business strategies, customer relationships employee relationships and
goodwill.  Therefore, as an essential
part of this Agreement, Executive agrees and covenants to comply with the
following restrictive covenants.

 

11.1         Non-Competition.  During the term of Executive’s employment
with the Company under this Agreement and thereafter during the one (1) year
period following termination of employment, Executive will not provide services
substantially similar to those Executive provides to the Company (whether as an
employee, independent contractor, consultant, partner, director, shareholder,
joint venture, investor or any other type of participant), or use or permit
Executive’s name to be used in, any business conducted (or sought to be
conducted by) any existing or planned U.S. certificated air carrier that
derives (or seeks to derive) at least 33% of its revenues through a combination
of (a) Commercial and Military Passenger and Cargo Charter, (b) ACMI
Passenger and Cargo and (c) business on behalf of the U.S. Department of
Defense,

 

Notwithstanding the
provisions of Sections 11.1, hereof, the parties agree that Executive is not
prohibited from owning for investment purposes securities of any public company
provided: (i) any increase in Executive’s ownership of .such securities
after the date hereof shall be subject to approval of the Board of Directors,
which approval shall not be unreasonably withheld; and (ii) such ownership
does not exceed three percent (3%) of any class of securities of such public
company.

 

11.2         Non-Solicitation of
Employees.  During the
term of Executive’s employment under this Agreement and for a period of one (1) year
immediately after the termination of such employment, Executive will not
solicit, recruit; hire, employ or attempt to hire or employ or any person who
is employed by the Company or urge, influence, induce or seek to induce any
employee of the Company to terminate such employee’s relationship with the
Company.

 

11.3         Non-Interference With
Contractors and Vendors. 
During the term of Executive’s employment under this Agreement and for a
period of one (1) year immediately after the termination of such
employment, Executive will not urge, induce or seek to induce the Company’s independent
contractors, subcontractors, consultants, vendors, suppliers or lessors with
whom he or she had material contact within two (2) years preceding his or
her Date of Termination to terminate their relationship with, or representation
of, the Company or to cancel, withdraw, reduce, limit, or in any manner modify
any of such person’s or entity’s business with, or representation of, the
Company.

 

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11.4         Nondisparagement.  To the extent permitted by law, Executive
shall not make, publish or state, or cause to be made, published or stated, any
defamatory or disparaging statement, writing or communication pertaining to the
character, reputation, business practices, competence or conduct of the
Company, its subsidiaries, stockholders, directors, officers, employees,
agents, representatives or successors.

 

11.5         Direct or Indirect
Activities.  Executive
acknowledges and agrees that the covenants contained in Sections 10 and 11 and
prohibit Executive from engaging in certain activities directly or indirectly,
whether on Executive’s own behalf or on behalf of any other person or entity,
and regardless of the capacity in which Executive is acting, including without
limitation as an employee, director, independent contractor, owner, partner,
officer, agent, consultant, or advisor.

 

11.6         Survival of Restrictive
Covenants.  Executive
acknowledges and agrees that Executive’s obligations under Sections 10 and 11
of this Agreement shall survive the expiration or termination of this Agreement
and the cessation of Executive’s employment with the Company for whatever
reason.

 

11.7         Severability, Modification
of Restrictions.  The
covenants and restrictions in Sections 10 and 11 of this Agreement are separate
and divisible, and to the extent any covenant, provision or portion of Sections
10 and 11 of this Agreement is determined to be unenforceable or invalid far
any reason, such unenforceability or invalidity shall not affect the
enforceability or validity of the remainder of Sections 10 and 11 of this
Agreement.  If any particular covenant,
provision or portion of Sections 10 and 11 is determined to be unreasonable or
unenforceable for any reason, such covenant, provision or portion thereof shall
automatically be deemed reformed such that the contested covenant, provision or
portion will have the closest effect permitted by applicable law to the
original form and shall be given, effect and enforced as so reformed to
whatever extent would be reasonable and enforceable under applicable law.  The parties agree that any court interpreting
any of the restrictions and covenants contained in Sections 10 and 11 of this
Agreement shall, if necessary and permissible under applicable law, reform any
such covenant to make it enforceable under applicable law.

 

12.           Remedies.  Executive recognizes that a breach or
threatened breach by Executive of Sections 10 and 11 of this Agreement will
give rise to irreparable injury to the Company and that money damages will not
be adequate relief for such injury and, accordingly, Executive agrees that the
Company shall be entitled to obtain injunctive relief, including, but not
limited to, temporary restraining orders, preliminary injunctions and/or
permanent injunctions, without having to post any bond or other security, to
restrain or prohibit such breach or threatened breach, in addition to any other
legal remedies which may be available, including without limitations, after
reasonable notice and failure to cure, the cessation of payments and benefits
under this Agreement and recovery of money damages.

 

13.           Indemnification.  The Company will indemnify Executive against
all Liability and Expense that may be incurred by Executive in connection with
or resulting from any claim as specified in Attachment B.

 

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14.           Assignment.

 

14.1         Assignment by the Company.  The Company shall have the right to assign
this Agreement, and this Agreement shall inure to the benefit of, and may be
enforced by, any and all successors and assigns of the Company, including
without limitation by asset assignment, stock sale, merger, consolidation or
other corporate reorganization.

 

14.2         Non-Assignment by Executive.  The services to be provided by Executive to
the Company hereunder are personal to Executive, and Executive’s duties may not
be assigned by Executive.

 

15.           Notice.  Any notice required or permitted under this
Agreement shall be in writing and either delivered personally or sent by
nationally recognized overnight courier, express mail, or certified or
registered mail, postage prepaid, return receipt requested, at the following
respective address unless the party notifies the other party in writing of a
change of address:

 

If
to the Company:

 

Global
Aero Logistics Inc.

101
World Drive

Peachtree
City, GA 30269

Attention:
General Counsel

 

If
to Executive:

 

Mark
M. McMillin

92
Green Summit

Newnan,
GA 30265

 

A notice delivered
personally shall be deemed delivered and effective as of the date of
delivery.  A notice sent by overnight
courier or express mail shall be delivered and effective one (1) day after
it is deposited with the postal authority or commercial carrier.  A notice sent by certified or registered mail
shall be deemed delivered and effective two (2) days, after it is
deposited with the postal authority.

 

16.           Miscellaneous.

 

16.1         Entire Agreement.  This Agreement, unless otherwise expressly
stated herein, supersedes any prior employment agreements or understandings,
oral or written, between the parties hereto, with respect to the subject matter
hereof, and constitutes the entire agreement of the parties with respect
thereto,

 

16.2         Modification.  This Agreement shall not be varied, altered,
modified, canceled, changed, supplemented or in any way amended except by
mutual agreement of the parties in a written instrument executed by the
Executive and the Company.

 

16.3         Counterparts.  This Agreement may be executed in one (1) or
more counterparts, each of which shall be deemed to be an original, but all of
which together will constitute one and the same Agreement.

 

10

 

16.4         Tax Withholding.  The Company may withhold from any
compensation or benefits payable under this Agreement all federal, state, city,
or other taxes as may be required pursuant to any law or governmental regulation
or ruling.

 

16.5         Contractual Rights to
Benefits.  Nothing
herein contained shall required or be deemed to require, or prohibit or be
deemed to prohibit, the Company to segregate, earmark or otherwise set aside
any funds or other assets, in trust or otherwise, to provide for any payments
to be made or required hereunder.

 

16.6         Employment Policies.  Executive agrees to abide by any employment rules or
policies applicable to the Company’s employees generally that the Company
currently has or may adopt, amend or implement from time to time during
Executive’s employment under this Agreement to the extent consistent with the
terms herein.  In the event of any
conflict between this Agreement and the Company’s policies, the Agreement will
control.

 

16.7         No Waiver.  Failure to insist upon strict compliance with
any of the terms, covenants or conditions of this Agreement shall not be deemed
a waiver of such term, covenant or condition, nor shall any waiver or
relinquishment of any right or power hereunder at any one or mote times be
deemed a waiver or relinquishment of such right or power at any other time or
times.

 

16.8          Section 409A Standards.  The Agreement and all forms of compensation
and benefits to be provided under the Agreement shall be interpreted, applied,
and affected in a manner consistent with the standards for nonqualified
deferred compensation plans established by Internal Revenue Code Section 409A
and its interpretive regulations (the “Section 409A Standards”).  The Company and the Executive mutually agree
that if any payment or benefit due to the Executive under this Agreement is
deemed to be subject to Section 409A of the Internal Revenue Code, the
Company shall make such amendments to the Agreement as the Company, in its sole
discretion, deems necessary to ensure that the Agreement and the compensation
and benefits provided hereunder comply with, or are not subject to, Section 409A.  To the extent that any terms of the Agreement
provide for payments that would subject Executive to gross income inclusion,
interest, or additional tax pursuant to Internal Revenue Code Section 409A,
those terms are to that extent superseded by the applicable Section 409A
Standards.

 

16.9         Governing Law; Choice of
Forum.  To the extent not preempted by
federal law, the provisions of this Agreement shall be construed and enforced
in accordance with the laws of the State of Georgia, notwithstanding any state’s
choice-of-law or conflicts-of-law rules to the contrary.  This Agreement is intended, among other
things, to supplement the provisions of the Uniform Trade Secrets Act, as
amended from time to time, and the duties Executive owes to the Company under
the common law, including, but not limited to, the duty of loyalty.  The parties agree that any legal action
relating to this Agreement shall be commenced and maintained exclusively before
any appropriate state court of record in Fayette County, Georgia, or in the
United States District Court for Northern District of Georgia, Atlanta
Division, and the parties hereby irrevocably consent and submit to the
jurisdiction and venue of such courts and waive any right to challenge or
otherwise object to personal jurisdiction or venue in any action commenced or
maintained in such courts

 

11

 

16.10       Service Credit.  Executive will be given credit for his/her
years of service with all predecessor employers for purposes of all benefit and
seniority plans and programs of the Company.

 

IN WITNESS WHEREOF, Global
Aero Logistics Inc., and Executive have executed this Agreement, as of the
Effective Date.

 

	
  GLOBAL
  AERO LOGISTICS INC.

  	
   

  	
  EXECUTIVE

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Robert R. Binns

  	
   

  	
  /s/ Mark M. McMillin

  
	
  Name:
  Robert R. Binns, Chief Executive Officer

  	
   

  	
  Name: Mark M. McMillin

  
				

 

12

 

ATTACHMENT A — DEFINED
TERMS

 

In addition to terms defined
elsewhere herein, the following terms have the following meanings when used in
this Agreement:

 

(a)                                  “Affiliate” of
a person or other entity means a person or other entity that directly or
indirectly controls, is controlled by, or is under common control with the
person or other entity specified.

 

(b)                                 “Board of
Directors” means the Board of Directors of Global Aero Logistics Inc.

 

(c)                                  “Cause” means
the occurrence of one or more of the following events: (i) Executive’s
gross neglect of Executive’s employment duties; (ii) Executive’s
conviction of, pleading guilty to, or pleading nolo contendere or its
equivalent to, a felony or any crime involving moral turpitude; (iii) Executive’s
engaging in any illegal conduct or willful misconduct in the performance of
Executive’s employment duties; (iv) Executive’s engaging in any fraudulent
or tortuous conduct in Executive’s dealings with, or on behalf of, either the
Company (or its Affiliates); (v) Executive’s failure or refusal to follow
the lawful written instructions or directions of the officer to which Executive
directly reports, the Chief Executive Officer, or the Board of Directors, if
such failure or refusal continues for a period of seven (7) calendar days
after the Board of Directors delivers to Executive a written notice stating the
instructions which Executive has failed or refused to follow; (vi) Executive’s
knowing breach of any of Executive’s material obligations under Section 10
or 11 of this Agreement; (vii) Executive’s misuse of alcohol or unlawful
drugs which interferes materially with the adequate performance of Executive’s
employment duties for the Company; or (viii) Executive’s material failure
to comply with the provisions of Section 4 of this Agreement and failure
to cure such noncompliance within thirty (30) days following notice from the
Board of Directors to the Executive of such noncompliance.

 

(d)                                 “Change in
Control” means and` shall be deemed to have occurred upon the occurrence of any
one or more of the following:

 

(i)                                     consummation of
a sale or other disposition of all or substantially all of the assets of Global
Aero Logistics Inc. or of all of the issued and outstanding capital stock of
Global Aero Logistics Inc.; or

 

(ii)                                  the acquisition
by any individual, entity, or group (excluding any individual, entity or group
which now has beneficial ownership of more than fifty percent (50%) of the
outstanding equity interests of Global Aero Logistics Inc.) of beneficial ownership
of more than fifty percent (50%) of the outstanding equity of interests of
Global Aero Logistics Inc.; or

 

(iii)                               the acquisition
by any individual, entity, or group (excluding Matlin Patterson) of a
controlling interest (i.e. “golden share”) that would allow 

 

A-1

 

such
individual, entity or group to exercise effective control of and/or veto power
with respect td the Company; or

 

(iv)                              solely for
purposes of triggering the period during which Executive may terminate this
Agreement for “Good Reason” pursuant to Section 6.3, a merger,
consolidation, acquisition or other business combination.

 

(e)                                  “Date of
Termination” means (i) if Executive’s employment is terminated by death,
the date of Executive’s death, (ii) if Executive’s employment is
terminated by the Company for Cause, the date on which Notice of Termination is
given or, if later, the effective date of termination specified in the Notice
of Termination, (iii) if Executive’s employment is terminated by the
Company Without Cause, or by Executive for any reason, the date specified in
the applicable Notice of Termination, (iv) if Executive’s employment is
terminated by the Company due to Executive’s Disability, the effective date of
termination specified in the applicable Notice of Termination which is no
earlier than six (6) month’s after the date the Company determines the
Executive to be subject to a Disability, and (v) if Executive’s employment
is terminated by the Executive with or without Good Reason the effective date
of termination specified in the applicable Notice of Termination which shall no
earlier than fifteen (15) days after the date on which the Notice of
Termination is given.

 

(f)                                    “Disability”
means either (i) when Executive is deemed disabled in accordance with the
longterm disability insurance policy or plan, if any, of the Company in effect
at the time of the illness or injury causing the disability and under which
Executive is insured, or if no such policy or plan is in effect, (ii) the
inability of Executive, because of injury, illness, disease or bodily or mental
infirmity as determined by a physician reasonably acceptable to the Company, to
perform the essential functions of Executive’s job (with or without reasonable
accommodation) for more than one hundred eighty (180) days during any period of
twelve (12) consecutive months.

 

(g)                                 “Good Reason”
means:

 

(i)                                     the occurrence,
without Executive’s consent, of any of the following events:

 

i.                                          material
reduction in the nature or scope of Executive’s authority or duties from those
contemplated by this Agreement; or

 

ii.                                       a material
decrease in Executive’s compensation (except as provided for in Section 5.9
of this Agreement); or

 

iii.                                    the relocation,
of the Company’s principal office; or the relocation of the Executive’s own
office location (as assigned to Executive by the Company) to a location more
than fifty (50) miles from the current Peachtree City, Georgia location.

 

A-2

 

(ii)                                  that Executive
shall have given the Company written notice of the event or events constituting
Good Reason within thirty (30) days following the occurrence of the event(s) (or
if later the Executive’s knowledge of occurrence of the event(s));

 

(iii)                               that the
Company shall have failed to cure such event or events within thirty (30)
business days after receipt of such notice; and

 

(iv)                              that Executive’s
employment terminates within thirty (30) business days after such failure to
cure.

 

(h)                                 “Notice of
Termination” means a written notice that Executive or the Company, as the case
may be, is electing to terminate Executive’s employment with the Company,
stating the proposed effective date of the termination and, if applicable,
setting forth in reasonable detail the circumstance claimed to provide the
basis for the termination.

 

(i)                                     “Separation
from Service” means either that (i) the Executive has ceased to perform
any services for the Company and all affiliated companies that, together with
the Company, constitute the “service recipient” within the meaning of Section 409A
of the Internal Revenue Code and the regulations thereunder (collectively, the “Service
Recipient”) or (ii) the level of bona fide services the Executive performs
for the Service Recipient after a given date (whether as an employee or as an
independent contractor) permanently decreases (excluding a decrease as a result
of military leave, sick leave, or other bona fide leave of absence if the
period of such leave does not exceed six months, or if longer, so long as the
Executive retains a right to reemployment with the Service Recipient under an
applicable statute or by contract) to no more than twenty percent (20%) of the
average level of bona fide services performed for the Service Recipient
(whether as an employee or an independent contractor) over the immediately
preceding 36-month period.

 

(j)                                     “Without Cause”
means a termination of Executive’s employment by the Company other than for
Cause.  For purposes of clarification, a
termination of the Executive’s employment due to death or Disability will not
be considered a termination of employment by the Company Without Cause.

 

A-3

 

ATTACHMENT B —
INDEMNIFICATION

 

1.             The Company shall indemnify
Executive against all Liability and Expense that may be incurred by Executive
in connection with or resulting from any Claim to the fullest extent authorized
or permitted by law, as the same exists or may hereafter be amended (but in the
case of any such amendment, only to the extent that such amendment permits the
Company to provide broader indemnification rights than such law permitted the
Company to provide prior to such amendment), or otherwise consistent with the
public policy of the State of Delaware.

 

2.             In furtherance of the
foregoing, and not by way of limitation, Executive shall be indemnified by the
Company against all Liability and reasonable Expense that may be incurred by
Executive in connection with or resulting form any Claim, (a) if Executive
is Wholly Successful with respect to the Claim, or (b) if not Wholly
Successful, then if Executive is determined, as provided in either Paragraph 6
or 7 below, to have acted in good faith, in what Executive reasonably believed
to be the best interests of the Company or at least not opposed to its best
interests and, in addition, with respect to any criminal claim is determined to
have had reasonable cause to believe that Executive’s conduct was lawful or had
no reasonable cause to believe that Executive’s conduct was unlawful.  The termination of any Claim, by judgment,
order, settlement (whether with our without court approval), or conviction or
upon a pleas of guilty or of nolo contendere, or its equivalent, shall not
create a presumption that Executive did not meet the standards of conduct set
forth in clause (b) of this Paragraph 2.

 

3.             The term “Claim” as used in
this Attachment B shall include every pending, threatened, or completed claim,
action, suit, or proceeding and all appeals thereof (whether brought by or in
the right of either of the Company or otherwise), civil, criminal,
administrative, or investigative, formal or informal, in which Executive may
become involved, as a party or otherwise:

 

(a)                                  by reason of
Executive’s being or having been an officer or employee of the Company, or

 

(b)                                 by reason of
any action taken or not taken by Executive in Executive’s capacity as an
officer or employee of either of the Company, whether or not Executive
continued in such capacity at the time such Liability or Expense shall have
been incurred.

 

4.             The terms “Liability” and “Expense”
as used in this Attachment B shall include, but shall not be limited to,
counsel fees and disbursement and other amounts of judgments, fines, or
penalties against (including excise taxes assessed with respect to an employee
benefits plan), and amounts paid in settlement by or on behalf of Executive.

 

5.             The term “Wholly Successful
as used in this Attachment B shall mean (1) termination of any Claim,
whether on the merits or otherwise, against Executive in question without any
finding of liability or guilt against him, (2) approval by a court; with
knowledge of the indemnity herein provided, of a settlement of any Claim, or (3) the
expiration of a reasonable period of time after the making or threatened making
of any Claim without the institution of the same, without any payment or
promise made to induce a settlement.

 

B-1

 

6.             If Executive is claiming
indemnification hereunder (other than if Executive has been Wholly Successful
with respect to any Claim), Executive shall be entitled to indemnification (a) if
special independent legal counsel, which may be regular counsel of the Company,
or other disinterested person or persons, in either case selected by the Board
of Directors (such counsel or persons hereinafter called the “Referee”), shall
deliver to the Company a written finding that Executive has met the standards
of conduct set forth in Paragraph 2(b) above, and (b) if the Board of
Directors, acting upon such written finding, so determines.  The Board of Directors, if Executive is found
to be entitled to indemnification pursuant to the preceding sentence, shall
also determine the reasonableness of Executive’s Expenses.  Executive, if requested, shall appear before
the Referee, answer questions that the Referee deems relevant and shall be
given ample opportunity to present to the Referee evidence upon which Executive
relies for indemnification.  The Company,
at the request of the Referee, shall make available facts, opinions, or other
evidence in any way relevant to the Referee’s findings that are within the
possession or control of the Company.

 

7.             If Executive is claiming
indemnification pursuant to Paragraph 6 above and if the Board of Directors
fails to select a Referee within a reasonable amount of time following a
Written request of Executive for the selection of a Referee, or if the Referee
or the Board of Directors fails to make a determination under Paragraph 6 above
within a reasonable amount of time following the selection of a Referee,
Executive may apply for indemnification with respect to a Claim to a court of
competent jurisdiction, including a court in which the Claim is pending against
Executive.  On receipt of an application,
the court, after giving notice to the Company and giving the Company
opportunity to Company to the court any information or evidence relating to the
claim for indemnification that the Company deems appropriate, may order
indemnification if it determines that Executive is entitle to indemnification
with respect to the Claim because Executive met the standards of conduct set
forth in Paragraph 2(b) above.  If
the court determines that Executive is entitled to indemnification, the court
shall also determine the reasonableness of Executive’s Expenses.

 

8.             Expenses incurred by
Executive in defending any Claim shall be paid by the Company in advance of the
final disposition of such Claim promptly as they are incurred upon receipt of
an undertaking by or on behalf of Executive to repay such amount if Executive
is determined not to be entitled to indemnification.

 

9.             The rights of
indemnification and advancement of Expenses provided in this Attachment B shall
be in addition to any rights to which Executive may otherwise be entitled, provided
that he Company shall not be obligated to make any payment in connection with a
Claim to the extent Executive has received payment of such amount from another
source, including without limitation any insurer.

 

10.           The provisions of this
Attachment B shall be applicable to Claims made or commenced after the date of
this Agreement, whether arising from acts or omissions to act occurring before
or after the date of this Agreement.

 

11.           If this Section or any
portion hereof shall be invalidated on any ground by any court of competent
jurisdiction, then the Company shall nevertheless indemnify Executive as to
costs , charges and expenses (including attorney’s fees), judgments, fines and
amounts paid in 

 

B-2

 

settlement
with respect to any action, suit or proceeding, whether civil, criminal,
administrative or investigative, including an action by or in the right of the
Company, to the fullest extent permitted by an applicable portion of this Section that
shall not have been invalidated and to the fullest extent permitted by
applicable law.

 

B-3Exhibit
10.5

 

AMENDED AND RESTATED

EMPLOYMENT AGREEMENT

 

This
Amended and Restated Employment Agreement (“Agreement”) is made effective as of
January 1, 2009 (the “Effective Date”) by and between Global Aero
Logistics Inc., a Delaware corporation (the “Company”), and Jeffrey P. Sanborn
(“Executive”).

 

WHEREAS,
Executive and Company desire to amend and restate the employment agreement
entered into by and between the parties effective as of April 9, 2008 (the
“Prior Agreement”) which sets forth the terms and conditions for Executive’s
continued employment with the Company primarily for the purpose of conforming
the provisions of the Prior Agreement to the requirements of Section 409A
of the Internal Revenue Code and the rules and regulations promulgated
thereunder;

 

NOW,
THEREFORE, in consideration of the foregoing recital and of the mutual
covenants set forth herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:

 

1.             Agreement to
Employ and Acceptance.  The
Company hereby employs Executive, and Executive hereby accepts employment with
the Company, in each case, on the terms and subject to the conditions set forth
herein.

 

2.             Defined Terms.  In addition to terms defined elsewhere
herein, please see Attachment A.

 

3.             Term of
Employment.  The term of
this Agreement begins on the Effective Date and continues until terminated by
either party (the “Term”).  The Company
and Executive acknowledge and agree that Executive’s employment is on an
at-will basis, and, accordingly, either the Company or Executive may terminate
the employment relationship at any time for any reason, or no reason, with or
without cause.

 

If
Executive elects to resign from Executive’s employment under this Agreement
(whether for Cause, for Good Reason or Without Cause or Good Reason), Executive
agrees to provide the Company before and following the effective date of such
resignation (and with no additional compensation or benefits beyond that
provided for in this Agreement) with such assistance as the Company reasonably
may request so as to accomplish an effective and orderly transition of
Executive’s employment responsibilities, work files and documents and open
projects and assignments to a replacement employee for Executive.

 

4.             Position and
Responsibilities.  During the
Term, Executive will serve as Senior Vice President & Chief Marketing
Officer and in such additional executive positions as the Company may designate
from time to time during the Term. 
Executive agrees to perform all of the duties and responsibilities
associated with such position(s) as well as all other duties and
responsibilities that may be assigned to Executive from time to time by the
Chief Executive Officer.

 

Executive
will devote his or her full working time, attention, energies and skills
exclusively to the business and affairs of the Company; will exercise the
highest degree of 

 

1

 

loyalty and the highest standards of conduct in the performance of
Executive’s duties; will not, except as noted herein, engage in any other
business activity, whether or not such business activity is pursued for gain,
profit or other pecuniary advantage, without the express written consent of the
Company; and will not take any action that deprives the Company of any business
opportunities or otherwise act in a manner that conflicts with the best
interests of the Company or that is detrimental to the business of the Company.

 

Nothing
contained herein shall preclude Executive from (a) investing Executive’s
personal assets in such form or manner as will not require Executive’s services
in any capacity in the operations and affairs of the businesses in which such
investments are made, or (b) participating in charitable or other
not-for-profit activities as long as such activities do not interfere with
Executive’s work for the Company.

 

5.             Compensation
and Benefits.  During the
Term, the Executive shall be entitled to the following compensation and
benefits:

 

5.1           Annual Base Salary.  The Company shall pay Executive a base salary
at the annual rate of no less than TWO HUNDRED SEVENTY-FIVE THOUSAND Dollars
and 00/100 ($275,000.00) (the “Base Salary”) unless and until Executive and the
Company agree to a different amount, in which event the new agreed amount shall
be the Base Salary from the effective date of that agreed adjustment.  The Base Salary will be reviewed annually to
determine any appropriate upward adjustments at the discretion of the Board of
Directors.

 

5.2           Incentive Compensation.  Executive will be given the opportunity to
earn an annual incentive bonus calculated on 60% of his or her Base Salary in
accordance with the annual incentive plan generally applicable to the Company’s
executive officers, as the same may be in effect from time to time (the “Annual
Bonus”).  For the sake of clarity, the
Executive’s Annual Bonus may be less or more than the percentage stated in the
preceding sentence depending upon the financial targets actually achieved by
the Company in any given year.

 

5.3           Eligibility for Equity Awards.  Executive shall be entitled to participate in
any stock option, restricted stock, performance share, performance unit or
other equity based long-term incentive compensation plan, program or
arrangement generally made available to executive officers of the Company.  Nothing herein shall affect any stock option,
restricted stock, performance share, performance unit or other equity
previously awarded to the Executive.

 

5.4           Employee Benefits.  Executive will be eligible to participate in
each health and welfare benefit plan sponsored or maintained by the Company and
made available generally to its executive officers, subject to the eligibility
requirements and other terms and conditions of the benefit programs and
plans.  Nothing contained in this Section shall
obligate the Company to institute, maintain or refrain from changing, amending
or discontinuing any employee health and welfare benefit plan or program, so
long as such changes are similarly applicable to other similarly situated
executive officers.

 

5.5           Paid Time Off.  Executive shall be entitled to no less than
twenty (20) days of vacation and no less than seven (7) days of sick leave
per year (vacation and sick leave 

 

2

 

collectively the Executive’s annual “PTO”) otherwise in accordance with
Company policy as the same is in effect from time to time.

 

5.6           Perquisites.  Executive shall be entitled to receive such
perquisites as are generally provided to other executive officers of the
Company in accordance with the then current policies and practices of the
Company.

 

5.7           Travel Benefits.  Executive shall be entitled to positive space
passes on Company airlines and, to the extent available, any carrier with whom
the Company has a reciprocal pass arrangement in place at the time.  Such pass privileges shall include the
Executive’s spouse and eligible children to the extent consistent with the
Company’s travel benefits program as the same is in effect from time to time.

 

5.8           Reimbursement of Expenses; In-Kind Benefits.  All expenses eligible for reimbursements
described in this Agreement must be incurred by the Executive during the Term
of this Agreement to be eligible for reimbursement.  All in-kind benefits described in this Section 5
must be provided by the Company during the Term of this Agreement or, where
applicable, during the eligible person’s lifetime.  The amount of reimbursable expenses incurred,
and the amount of in-kind benefits provided, in one taxable year shall not
affect the expenses eligible for reimbursement, or in-kind benefits provided,
in any other taxable year.  Each category
of reimbursement shall be paid as soon as administratively practicable, but in
no event shall any such reimbursement be paid after the last day of the
calendar year following the calendar year in which the expense was
incurred.  Neither rights to
reimbursement nor in-kind benefits are subject to liquidation or exchanges for
other benefits.

 

5.9           Changes to Compensation Structure.  The Board of Directors, or any appropriate
committee thereof, may initiate changes to the compensation structure that may
impact Executive’s compensation.  As long
as such changes are applicable broadly and equitably to all Executive officers,
such changes shall not constitute Good Reason for purposes of Section 6.3
or otherwise constitute a breach of this Agreement.

 

6.             Termination of Employment.

 

6.1           Grounds for Termination.  Executive’s employment may be terminated (a) by
the Company for Cause, Without Cause, or due to Executive’s Disability or death
or (b) by Executive with or without Good Reason.  In the event that Executive’s employment with
the Company is terminated by either party for any reason, no termination
benefits or other payments shall be payable to or in respect of Executive
pursuant to this Agreement, except as specifically provided in this Section 6.

 

6.2           Notice of Termination.  Prior to any termination by the Company or
Executive for any reason (other than due to Executive’s death), a Notice of
Termination shall be delivered by the Company or Executive, as the case may be,
to the other party to this Agreement.

 

6.3           Payments Upon Termination Without Cause or for Good
Reason.  If Executive’s employment with
the Company is terminated by the Company Without Cause or by Executive for Good
Reason, the obligation to pay and provide to Executive compensation and
benefits under this Agreement shall immediately terminate, except:

 

3

 

(a)           Executive shall be paid
severance compensation in a lump sum equal to twelve (12) months (or twenty
four (24) months for Termination Without Cause within ninety (90) days
following a Change in Control), of:  (i) Base
Salary and (ii) the target Annual Bonus in effect at the time of
termination.  Any portion of the Annual
Bonus that is earned and already paid in the calendar year of Executive’s
termination, will be deducted from this severance compensation.  The severance compensation will be paid to
Executive in a lump sum within thirty (30) days following the Executive’s
Separation from Service on or after the Executive’s Date of Termination;

 

(b)           Executive shall be
reimbursed for the cost of obtaining COBRA health continuation coverage under
the Company’s group health plan for the lesser of (i) eighteen (18) months
of such coverage, (ii) until the Executive obtains comparable health
coverage for himself or herself and his or her eligible dependents, or (iii) the
period of coverage to which the Executive is entitled under Section 4980B(f)(2)(B) of
the Internal Revenue Code;

 

(c)           Executive shall also be
provided the sum of:  (i) Executive’s
full Base Salary through the Date of Termination, to the extent not previously
paid; (ii) payment for his or her unused PTO as of the Date of
Termination; and (iii) any benefits accrued and payable to Executive under
any applicable employee benefit plan of the Company or its Affiliates in which
Executive was a participant during the Term, including the travel benefits
pursuant to Section 5.7, subject in each such case to the applicable terms
and conditions of such plans as in effect from time to time (such amounts under
clauses (i), (ii), and (iii) of this Section 6.3(c), collectively,
the “Accrued Obligations”);

 

(d)           All outstanding stock
options, whether or not then exercisable, shall become fully vested and
exercisable and the restrictions on any outstanding restricted stock shall
lapse with the condition that all such options will expire at the earlier of (i) the
first anniversary of the Date of Termination or (ii) the maximum option
term as set forth by the applicable option award;

 

(e)           Executive shall be entitled
to lifetime positive space passes on the Company’s airlines and, to the extent
available, any carrier with whom the Company has a reciprocal pass arrangement
in place at the time.  Such pass
privileges shall include the Executive’s spouse and eligible children to the
extent consistent with the Company’s travel benefits program as the same is in
effect from time to time; and

 

(f)            To the extent that the
severance compensation provided for in this Section 6.3 constitute
payments of “deferred compensation” to a “specified employee” within the
meaning of Internal Revenue Code Section 409A9(a)(2)(B)9(i), any such
payments due during the first six months 

 

4

 

following the Executive’s
Date of Termination will be delayed and will be paid to Executive on the first
day of the seventh month following Executive’s Date of Termination and the
travel benefits shall not be provided until the first day of the seventh month
following Executive’s Date of Termination. 
Other than the foregoing, the Company shall have no further obligations
to Executive under this Agreement.

 

6.4           Termination Due to Death.  If Executive dies during the Term, this
Agreement shall terminate on the date of the Executive’s death.  Upon the death of Executive, the obligation
to pay and provide to Executive compensation and benefits under this Agreement
shall immediately terminate, except:

 

(a)           Executive’s estate shall be
paid the Accrued Obligations plus the continuation of Base Salary payments for
an additional three (3) months immediately following the date of the
Executive’s death;

 

(b)           for an additional three (3) month
following the date of Executive’s death, the Company shall reimburse Executive’s
spouse and participating dependants for the cost of obtaining COBRA medical and
dental continuation coverage under the Company’s group health plan;

 

(c)           for an additional twelve
(12) months immediately following the Executive’s death, Executive’s spouse and
eligible dependents shall continue to be provided the travel benefits pursuant
to Section 5.7;

 

(d)           All outstanding stock
options, whether or not then exercisable, shall become fully vested and
exercisable and the restrictions on any outstanding restricted stock shall
lapse with the condition that all such options will expire at the earlier of (i) the
first anniversary of the Date of Termination or (ii) the maximum option term
as set forth by the applicable option award; and

 

(e)           Other than the foregoing,
the Company shall have no further obligations to Executive (or Executive’s
estate, heirs, executors, administrators and personal representatives) under
this Agreement.

 

6.5           Termination Due to Disability.  If Executive suffers a Disability, the
Company shall have the right to terminate this Agreement and Executive’s
employment with the Company following expiration of the notice period set forth
in the Notice of Termination.  Upon the
termination of this Agreement because of Disability, the obligation to pay and
provide to Executive compensation and benefits under this Agreement shall
immediately terminate, except:

 

(a)           All outstanding stock
options, whether or not then exercisable, shall become fully vested and
exercisable and the restrictions on any outstanding restricted stock shall
lapse with the condition that all such options will expire at the earlier of (i) the
first anniversary of the Date of Termination or (ii) the maximum option
term as set forth by the applicable option award;

 

5

 

(b)           In addition, Executive shall
be entitled to obtain payment from the insurer(s) of such payments as
Executive may be entitled to receive under any long-term disability insurance
policy or policies maintained by the Company with third party insurers and
under which Executive is insured; and

 

(c)           Executive shall be entitled
to lifetime positive space passes on the Company’s airlines and, to the extent
available, any carrier with whom the Company has a reciprocal pass arrangement
in place at the time.  Such pass
privileges shall include the Executive’s spouse and eligible children to the
extent consistent with the Company’s travel benefits program as the same is in
effect from time to time.

 

6.6           Termination For Cause.  At any time during the Term, the Company may
terminate this Agreement and Executive’s employment with the Company for “Cause”
as provided in this Section 6.6. 
Upon termination of Executive’s employment by the Company for Cause, the
obligation to pay or provide Executive compensation and benefits (including
travel benefits under Section 5.7) under this Agreement shall terminate,
except:

 

(a)           Executive shall be paid the
Accrued Obligations;

 

(b)           Executive shall forfeit the
Annual Bonus earned in the year in which the Termination for Cause occurred;

 

(c)           all outstanding stock
options which are not exercisable shall be forfeited; and

 

(d)           all restricted stock as to
which restrictions have not lapsed shall be forfeited.

 

6.7           Termination by Executive Without Good Reason.  Upon termination of Executive’s employment by
Executive without Good Reason, all obligations to pay or provide Executive
compensation and benefits under this Agreement shall terminate, except
Executive shall be paid the Accrued Obligations.

 

7.             Severance
Release.  Executive acknowledges and
agrees that as a condition to receiving any of the severance compensation
pursuant to Section 6.3 of this Agreement (such severance compensation
being collectively referred to as the “Severance Compensation”), Executive
shall execute and deliver to Company a Release Agreement in form and substance
reasonably satisfactory to the Company pursuant to all of which subsidiaries
and Executive releases and waives any and all claims against the Company and
all of their subsidiaries and Affiliates and its and their shareholders,
directors, officers and employees arising out of this Agreement, Executive’s
employment with the Company, Executive’s work for the Company or any of its
Affiliates and/or the termination of Executive’s employment with the Company;
provided, however, that such Release Agreement shall not affect or relinquish:

 

(a)           any vested rights Executive
may have under any insurance or other employee benefits plans sponsored by the
Company

 

6

 

(b)           any claims for salary or
other compensation earned by Executive prior to the employment termination
date;

 

(c)           any claims for reimbursement
of business expenses incurred prior to the employment termination date;

 

(d)           any rights to Severance
Compensation; or

 

(e)           Executive’s rights to
indemnification pursuant to Section 11 of this Agreement or by law.

 

In
the event Executive dies during the period Executive is receiving any cash
Severance Compensation, the Company’s obligation to pay such Severance
Compensation shall not terminate, and the unpaid portion of such Severance
Compensation shall be paid in a lump sum to Executive’s estate within thirty
(30) days following the death of the Executive.

 

8.             Resignation as
Officer and/or Director Upon Employment Termination.  In the event Executive’s employment with the
Company terminates for any reason (including, without limitation, pursuant to
Sections 6.3 through 6.7 herein), Executive agrees and covenants that Executive
will immediately resign any and all positions, including, without limitation,
as an officer and/or member of the Board of Directors or any other governing
boards, Executive may hold with the Company or any of its Affiliates.

 

9.             No Duplication.  Executive acknowledges that, unless otherwise
provided for in any policy or plan governing severance benefits for employees
of the Company, including Executive, Executive shall be entitled only to the Severance
Compensation as a severance benefit related to Executive’s employment under
this Agreement.

 

10.           Non-Disclosure.  Executive acknowledges that during the course
of Executive’s employment with the Company Executive will be creating, making
use of, acquiring, and/or adding to confidential information relating to the
business and affairs of the Company (and its Affiliates), which information
will include, without limitation, procedures, methods, manuals, lists of
customers, suppliers and other contacts, sales and other reports, marketing
plans, business plans, financial data, and personnel information.  Executive covenants and agrees that Executive
shall not, at any time during Executive’s employment with the Company or
thereafter at any time, directly or indirectly, use, divulge or disclose for
any purpose whatsoever the Company (or its Affiliates) confidential information
or trade secrets, except in the course of Executive’s work for and on behalf of
the Company (or its Affiliates).  During
Executive’s employment by the Company, any inventions, new devices, or
procedures, as well as any patent, copyright or trademark applications filed,
or patents, copyrights or trademarks obtained, as a result of Executive’s
efforts on behalf of the Company (or any of its Affiliates) shall belong and
inure to the exclusive benefit of the Company. 
Upon the termination of Executive’s employment with the Company, or at
the Company’s request, Executive shall immediately deliver to the Company any
and all records, documents, or electronic data (in whatever form or media), and
all copies thereof, in Executive’s possession or under Executive’s control,
whether prepared by Executive or others, containing confidential information or
trade secrets relating to the Company (or its Affiliates).  Executive acknowledges and agrees that
Executive’s obligations under this Section 

 

7

 

10 shall survive the expiration or
termination of this Agreement and the cessation of Executive’s employment with
Company for whatever reason.

 

11.           Restrictive
Covenants.  Executive
acknowledges that in connection with Executive’s employment with the Company,
Executive will provide executive-level services that are of a unique and
special value and that Executive will be entrusted with confidential and
proprietary information concerning the Company and its Affiliates.  Executive further acknowledges that the
Company and its Affiliates are engaged in highly competitive businesses and
that the Company and its Affiliates expend substantial amounts of time, money
and effort to develop trade secrets, business strategies, customer
relationships employee relationships and goodwill.  Therefore, as an essential part of this
Agreement, Executive agrees and covenants to comply with the following
restrictive covenants.

 

11.1         Non-Competition.  During the term of Executive’s employment
with the Company under this Agreement and thereafter during the one (1) year
period following termination of employment, Executive will not provide services
substantially similar to those Executive provides to the Company (whether as an
employee, independent contractor, consultant, partner, director, shareholder,
joint venture, investor or any other type of participant), or use or permit
Executive’s name to be used in, any business conducted (or sought to be
conducted by) any existing or planned U.S. certificated air carrier that
derives (or seeks to derive) at least 33% of its revenues through a combination
of (a) Commercial and Military Passenger and Cargo Charter, (b) ACMI
Passenger and Cargo and (c) business on behalf of the U.S. Department of
Defense.

 

Notwithstanding
the provisions of Sections 11.1, hereof, the parties agree that Executive is
not prohibited from owning for investment purposes securities of any public
company provided:  (i) any increase
in Executive’s ownership of such securities after the date hereof shall be
subject to approval of the Board of Directors, which approval shall not be
unreasonably withheld; and (ii) such ownership does not exceed three
percent (3%) of any class of securities of such public company.

 

11.2         Non-Solicitation of Employees.  During the term of Executive’s employment
under this Agreement and for a period of one (1) year immediately after
the termination of such employment, Executive will not solicit, recruit, hire,
employ or attempt to hire or employ or any person who is employed by the
Company or urge, influence, induce or seek to induce any employee of the
Company to terminate such employee’s relationship with the Company.

 

11.3         Non-Interference With Contractors and Vendors.  During the term of Executive’s employment
under this Agreement and for a period of one (1) year immediately after
the termination of such employment, Executive will not urge, induce or seek to
induce the Company’s independent contractors, subcontractors, consultants,
vendors, suppliers or lessors with whom he or she had material contact within
two (2) years preceding his or her Date of Termination to terminate their
relationship with, or representation of, the Company or to cancel, withdraw,
reduce, limit, or in any manner modify any of such person’s or entity’s
business with, or representation of, the Company.

 

8

 

11.4         Nondisparagement.  To the extent permitted by law, Executive
shall not make, publish or state, or cause to be made, published or stated, any
defamatory or disparaging statement, writing or communication pertaining to the
character, reputation, business practices, competence or conduct of the
Company, its subsidiaries, stockholders, directors, officers, employees,
agents, representatives or successors,

 

11.5         Direct or Indirect Activities.  Executive acknowledges and agrees that the
covenants contained in Sections 10 and 11 prohibit Executive from engaging in
certain activities directly or indirectly, whether on Executive’s own behalf or
on behalf of any other person or entity, and regardless of the capacity in
which Executive is acting, including without limitation as an employee,
director, independent contractor, owner, partner, officer, agent, consultant,
or advisor. 

 

11.6         Survival of Restrictive Covenants.  Executive acknowledges and agrees that
Executive’s obligations under Sections 10 and 11 of this Agreement shall
survive the expiration or termination of this Agreement and the cessation of
Executive’s employment with the Company for whatever reason.

 

11.7         Severability, Modification of Restrictions.  The covenants and restrictions in Sections 10
and 11 of this Agreement are separate and divisible, and to the extent any
covenant, provision or portion of Sections 10 and 11 of this Agreement is
determined to be unenforceable or invalid for any reason, such unenforceability
or invalidity shall not affect the enforceability or validity of the remainder
of Sections 10 and 11 of this Agreement. 
If any particular covenant, provision or portion of Sections 10 and 11
is determined to be unreasonable or unenforceable for any reason, such
covenant, provision or portion thereof shall automatically be deemed reformed
such that the contested covenant, provision or portion will have the closest
effect permitted by applicable law to the original form and shall be given
effect and enforced as so reformed to whatever extent would be reasonable and
enforceable under applicable law.  The
parties agree that any court interpreting any of the restrictions and covenants
contained in Sections 10 and 11 of this Agreement shall, if necessary and
permissible under applicable law, reform any such covenant to make it
enforceable under applicable law.

 

12.           Remedies.  Executive recognizes that a breach or
threatened breach by Executive of Sections 10 and 11 of this Agreement will
give rise to irreparable injury to the Company and that money damages will not
be adequate relief for such injury and, accordingly, Executive agrees that the
Company shall be entitled to obtain injunctive relief, including, but not
limited to, temporary restraining orders, preliminary injunctions and/or permanent
injunctions, without having to post any bond or other security, to restrain or
prohibit such breach or threatened breach, in addition to any other legal
remedies which may be available, including without limitations, after
reasonable notice and failure to cure, the cessation of payments and benefits
under this Agreement and recovery of money damages.

 

13.           Indemnification.  The Company will indemnify Executive against
all Liability and Expense that may be incurred by Executive in connection with
or resulting from any claim as specified in Attachment B.

 

9

 

14.           Assignment.

 

14.1         Assignment by the Company.  The Company shall have the right to assign
this Agreement, and this Agreement shall inure to the benefit of, and may be
enforced by, any and all successors and assigns of the Company, including
without limitation by asset assignment, stock sale, merger, consolidation or
other corporate reorganization.

 

14.2         Non-Assignment by Executive.  The services to be provided by Executive to
the Company hereunder are personal to Executive, and Executive’s duties may not
be assigned by Executive.

 

15.           Notice.  Any notice required or permitted under this
Agreement shall be in writing and either delivered personally or sent by
nationally recognized overnight courier, express mail, or certified or
registered mail, postage prepaid, return receipt requested, at the following
respective address unless the party notifies the other party in writing of a
change of address:

 

If
to the Company:

 

Global
Aero Logistics Inc. 

101 World Drive

Peachtree City, GA 30269 

Attention: General Counsel

 

If
to Executive:

 

Jeffrey
P. Sanborn 

3049 Meadow Drive 

Marietta, GA 30062

 

A
notice delivered personally shall be deemed delivered and effective as of the
date of delivery.  A notice sent by
overnight courier or express mail shall be delivered and effective one (1) day
after it is deposited with the postal authority or commercial carrier.  A notice sent by certified or registered mail
shall be deemed delivered and effective two (2) days after it is deposited
with the postal authority.

 

16.           Miscellaneous.

 

16.1         Entire Agreement.  This Agreement, unless otherwise expressly
stated herein, supersedes any prior employment agreements or understandings,
oral or written, between the parties hereto, with respect to the subject matter
hereof, and constitutes the entire agreement of the parties with respect
thereto.

 

16.2         Modification.  This Agreement shall not be varied, altered,
modified, canceled, changed, supplemented or in any way amended except by
mutual agreement of the parties in a written instrument executed by the
Executive and the Company.

 

10

 

16.3         Counterparts.  This Agreement may be executed in one (1) or
more counterparts, each of which shall be deemed to be an original, but all of
which together will constitute one and the same Agreement.

 

16.4         Tax Withholding.  The Company may withhold from any
compensation or benefits payable under this Agreement all federal, state, city,
or other taxes as may be required pursuant to any law or governmental
regulation or ruling.

 

16.5         Contractual Rights to Benefits.  Nothing herein contained shall require or be
deemed to require, or prohibit or be deemed to prohibit, the Company to
segregate, earmark or otherwise set aside any funds or other assets, in trust
or otherwise, to provide for any payments to be made or required hereunder.

 

16.6         Employment Policies.  Executive agrees to abide by any employment rules or
policies applicable to the Company’s employees generally that the Company
currently has or may adopt, amend or implement from time to time during
Executive’s employment under this Agreement to the extent consistent with the
terms herein.  In the event of any
conflict between this Agreement and the Company’s policies, the Agreement will
control.

 

16.7         No Waiver.  Failure to insist upon strict compliance with
any of the terms, covenants or conditions of this Agreement shall not be deemed
a waiver of such term, covenant or condition, nor shall any waiver or
relinquishment of any right or power hereunder at any one or more times be
deemed a waiver or relinquishment of such right or power at any other time or
times.

 

16.8         Section 409A Standards.  The Agreement and all forms of compensation
and benefits to be provided under the Agreement shall be interpreted, applied,
and affected in a manner consistent with the standards for nonqualified
deferred compensation plans established by Internal Revenue Code Section 409A
and its interpretive regulations (the “Section 409A Standards”).  The Company and the Executive mutually agree
that if any payment or benefit due to the Executive under this Agreement is
deemed to be subject to Section 409A of the Internal Revenue Code, the
Company shall make such amendments to the Agreement as the Company, in its sole
discretion, deems necessary to ensure that the Agreement and the compensation
and benefits provided hereunder comply with, or are not subject to, Section 409A.  To the extent that any terms of the Agreement
provide for payments that would subject Executive to gross income inclusion,
interest, or additional tax pursuant to Internal Revenue Code Section 409A,
those terms are to that extent superseded by the applicable Section 409A
Standards.

 

16.9         Governing Law; Choice of Forum.  To the extent not preempted by federal law,
the provisions of this Agreement shall be construed and enforced in accordance
with the laws of the State of Georgia, notwithstanding any state’s choice-of-law
or conflicts-of-law rules to the contrary. 
This Agreement is intended, among other things, to supplement the
provisions of the Uniform Trade Secrets Act, as amended from time to time, and
the duties Executive owes to the Company under the common law, including, but
not limited to, the duty of loyalty.  The
parties agree that any legal action relating to this Agreement shall be
commenced and maintained exclusively before any appropriate state court of
record in Fayette County, Georgia, or in the United States District Court for
Northern District of Georgia, Atlanta Division, and the parties 

 

11

 

hereby irrevocably consent and submit to the jurisdiction and venue of
such courts and waive any right to challenge or otherwise object to personal
jurisdiction or venue in any action commenced or maintained in such courts

 

16.10       Service Credit.  Executive will be given credit for his/her
years of service with all predecessor employers for purposes of all benefit and
seniority plans and programs of the Company.

 

IN
WITNESS WHEREOF, Global Aero Logistics Inc., and Executive have executed this
Agreement, as of the Effective Date.

 

 

	
  GLOBAL AERO LOGISTICS INC.

  	
   

  	
  EXECUTIVE

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Robert R. Binns

  	
   

  	
  By:

  	
  /s/ Jeffrey P. Sanborn

  
	
  Name:

  	
  Robert R. Binns 

  	
   

  	
  Name:

  	
  Jeffrey P. Sanborn

  
	
   

  	
  Chief Executive Officer

  	
   

  	
   

  

 

12

 

ATTACHMENT A — DEFINED TERMS

 

In
addition to terms defined elsewhere herein, the following terms have the
following meanings when used in this Agreement:

 

(a)           “Affiliate” of a person or
other entity means a person or other entity that directly or indirectly
controls, is controlled by, or is under common control with the person or other
entity specified.

 

(b)           “Board of Directors” means
the Board of Directors of Global Aero Logistics Inc.

 

(c)           “Cause” means the occurrence
of one or more of the following events:  (i) Executive’s
gross neglect of Executive’s employment duties; (ii) Executive’s
conviction of, pleading guilty to, or pleading nolo contendere or its
equivalent to, a felony or any crime involving moral turpitude; (iii) Executive’s
engaging in any illegal conduct or willful misconduct in the performance of
Executive’s employment duties; (iv) Executive’s engaging in any fraudulent
or tortuous conduct in Executive’s dealings with, or on behalf of, either the
Company (or its Affiliates); (v) Executive’s failure or refusal to follow
the lawful written instructions or directions of the officer to which Executive
directly reports, the Chief Executive Officer, or the Board of Directors, if
such failure or refusal continues for a period of seven (7) calendar days
after the Board of Directors delivers to Executive a written notice stating the
instructions which Executive has failed or refused to follow; (vi) Executive’s
knowing breach of any of Executive’s material obligations under Section 10
or 11 of this Agreement; (vii) Executive’s misuse of alcohol or unlawful
drugs which interferes materially with the adequate performance of Executive’s
employment duties for the Company; or (viii) Executive’s material failure
to comply with the provisions of Section 4 of this Agreement and failure
to cure such noncompliance within thirty (30) days following notice from the
Board of Directors to the Executive of such noncompliance.

 

(d)           “Change in Control” means
and shall be deemed to have occurred upon the occurrence of any one or more of
the following:

 

(i)            consummation of a sale or
other disposition of all or substantially all of the assets of Global Aero
Logistics Inc, or of all of the issued and outstanding capital stock of Global
Aero Logistics Inc.; or

 

(ii)           the acquisition by any
individual, entity, or group (excluding any individual, entity or group which
now has beneficial ownership of more than fifty percent (50%) of the
outstanding equity interests of Global Aero Logistics Inc.) of beneficial
ownership of more than fifty percent (50%) of the outstanding equity of
interests of Global Aero Logistics Inc.; or

 

(iii)          the acquisition by any
individual, entity, or group (excluding MatlinPatterson) of a controlling
interest (i.e. “golden share”) that would 

 

A-1

 

allow such individual, entity or group to exercise effective control of
and/or veto power with respect to the Company; or

 

(iv)          solely for purposes of
triggering the period during which Executive may terminate this Agreement for “Good
Reason” pursuant to Section 6.3, a merger, consolidation, acquisition or
other business combination.

 

(e)           “Date of Termination” means (i) if
Executive’s employment is terminated by death, the date of Executive’s death, (ii) if
Executive’s employment is terminated by the Company for Cause, the date on
which Notice of Termination is given or, if later, the effective date of
termination specified in the Notice of Termination, (iii) if Executive’s
employment is terminated by the Company Without Cause, or by Executive for any
reason, the date specified in the applicable Notice of Termination, (iv) if
Executive’s employment is terminated by the Company due to Executive’s
Disability, the effective date of termination specified in the applicable
Notice of Termination which is no earlier than six (6) month’s after the
date the Company determines the Executive to be subject to a Disability, and (v) if
Executive’s employment is terminated by the Executive with or without Good
Reason the effective date of termination specified in the applicable Notice of
Termination which shall no earlier than fifteen (15) days after the date on
which the Notice of Termination is given.

 

(f)            “Disability” means either (i) when
Executive is deemed disabled in accordance with the long-term disability
insurance policy or plan, if any, of the Company in effect at the time of the
illness or injury causing the disability and under which Executive is insured,
or if no such policy or plan is in effect, (ii) the inability of
Executive, because of injury, illness, disease or bodily or mental infirmity as
determined by a physician reasonably acceptable to the Company, to perform the
essential functions of Executive’s job (with or without reasonable
accommodation) for more than one hundred eighty (180) days during any period of
twelve (12) consecutive months.

 

(g)           “Good Reason” means:

 

(i)            the occurrence, without
Executive’s consent, of any of the following events:

 

ii.             material reduction in the
nature or scope of Executive’s authority or duties from those contemplated by
this Agreement; or

 

ii.             a material decrease in
Executive’s compensation (except as provided for in Section 5.9 of this
Agreement); or

 

iii.            the relocation of the
Company’s principal office, or the relocation of the Executive’s own office
location (as assigned to Executive by the Company) to a location more than
fifty (50) miles from the current Peachtree City, Georgia location.

 

A-2

 

(ii)           that Executive shall have
given the Company written notice of the event or events constituting Good
Reason within thirty (30) days following the occurrence of the event(s) (or
if later the Executive’s knowledge of occurrence of the event(s));

 

(iii)          that the Company shall have
failed to cure such event or events within thirty (30) business days after
receipt of such notice; and

 

(iv)          that Executive’s employment
terminates within thirty (30) business days after such failure to cure.

 

(h)           “Notice of Termination”
means a written notice that Executive or the Company, as the case may be, is
electing to terminate Executive’s employment with the Company, stating the
proposed effective date of the termination and, if applicable, setting forth in
reasonable detail the circumstance claimed to provide the basis for the
termination.

 

(i)            “Separation from Service”
means either that (i) the Executive has ceased to perform any services for
the Company and all affiliated companies that, together with the Company,
constitute the “service recipient” within the meaning of Section 409A of
the Internal Revenue Code and the regulations thereunder (collectively, the “Service
Recipient”) or (ii) the level of bona fide services the Executive performs
for the Service Recipient after a given date (whether as an employee or as an
independent contractor) permanently decreases (excluding a decrease as a result
of military leave, sick leave, or other bona fide leave of absence if the
period of such leave does not exceed six months, or if longer, so long as the
Executive retains a right to reemployment with the Service Recipient under an
applicable statute or by contract) to no more than twenty percent (20%) of the
average level of bona fide services performed for the Service Recipient
(whether as an employee or an independent contractor) over the immediately
preceding 36-month period.

 

(j)            “Without Cause” means a
termination of Executive’s employment by the Company other than for Cause.  For purposes of clarification, a termination
of the Executive’s employment due to death or Disability will not be considered
a termination of employment by the Company Without Cause.

 

A-3

 

ATTACHMENT B —
INDEMNIFICATION

 

1.             The Company shall indemnify
Executive against all Liability and Expense that may be incurred by Executive
in connection with or resulting from any Claim to the fullest extent authorized
or permitted by law, as the same exists or may hereafter be amended (but in the
case of any such amendment, only to the extent that such amendment permits the
Company to provide broader indemnification rights than such law permitted the
Company to provide prior to such amendment), or otherwise consistent with the
public policy of the State of Delaware.

 

2.             In furtherance of the
foregoing, and not by way of limitation, Executive shall be indemnified by the
Company against all Liability and reasonable Expense that may be incurred by
Executive in connection with or resulting form any Claim, (a) if Executive
is Wholly Successful with respect to the Claim, or (b) if not Wholly
Successful, then if Executive is determined, as provided in either Paragraph 6
or 7 below, to have acted in good faith, in what Executive reasonably believed
to be the best interests of the Company or at least not opposed to its best
interests and, in addition, with respect to any criminal claim is determined to
have had reasonable cause to believe that Executive’s conduct was lawful or had
no reasonable cause to believe that Executive’s conduct was unlawful.  The termination of any Claim, by judgment,
order, settlement (whether with our without court approval), or conviction or
upon a plea of guilty or of nolo contendere, or its equivalent, shall not
create a presumption that Executive did not meet the standards of conduct set
forth in clause (b) of this Paragraph 2,

 

3.             The term “Claim” as used in
this Attachment B shall include every pending, threatened, or completed claim,
action, suit, or proceeding and all appeals thereof (whether brought by or in
the right of either of the Company or otherwise), civil, criminal,
administrative, or investigative, formal or informal, in which Executive may become
involved, as a party or otherwise:

 

(a)           by reason of Executive’s
being or having been an officer or employee of the Company, or

 

(b)           by reason of any action
taken or not taken by Executive in Executive’s capacity as an officer or
employee of either of the Company, whether or not Executive continued in such
capacity at the time such Liability or Expense shall have been incurred.

 

4.             The terms “Liability” and “Expense”
as used in this Attachment B shall include, but shall not be limited to,
counsel fees and disbursement and other amounts of judgments, fines, or
penalties against (including excise taxes assessed with respect to an employee
benefits plan), and amounts paid in settlement by or on behalf of Executive.

 

5.             The term “Wholly Successful”
as used in this Attachment B shall mean (1) termination of any Claim,
whether on the merits or otherwise, against Executive in question without any
finding of liability or guilt against him, (2) approval by a court, with
knowledge of the indemnity herein provided, of a settlement of any Claim, or (3) the
expiration of a reasonable period of time after the making or threatened making
of any Claim without the institution of the same, without any payment or
promise made to induce a settlement.

 

B-1

 

6.             If Executive is claiming
indemnification hereunder (other than if Executive has been Wholly Successful
with respect to any Claim), Executive shall be entitled to indemnification (a) if
special independent legal counsel, which may be regular counsel of the Company,
or other disinterested person or persons, in either case selected by the Board
of Directors (such counsel or persons hereinafter called the “Referee”), shall
deliver to the Company a written finding that Executive has met the standards
of conduct set forth in Paragraph 2(b) above, and (b) if the Board of
Directors, acting upon such written finding, so determines.  The Board of Directors, if Executive is found
to be entitled to indemnification pursuant to the preceding sentence, shall
also determine the reasonableness of Executive’s Expenses.  Executive, if requested, shall appear before
the Referee, answer questions that the Referee deems relevant and shall be
given ample opportunity to present to the Referee evidence upon which Executive
relies for indemnification.  The Company,
at the request of the Referee, shall make available facts, opinions, or other
evidence in any way relevant to the Referee’s findings that are within the
possession or control of the Company.

 

7.             If Executive is claiming
indemnification pursuant to Paragraph 6 above and if the Board of Directors
fails to select a Referee within a reasonable amount of time following a
written request of Executive for the selection of a Referee, or if the Referee
or the Board of Directors fails to make a determination under Paragraph 6 above
within a reasonable amount of time following the selection of a Referee,
Executive may apply for indemnification with respect to a Claim to a court of
competent jurisdiction, including a court in which the Claim is pending against
Executive.  On receipt of an application,
the court, after giving notice to the Company and giving the Company
opportunity to present to the court any information or evidence relating to the
claim for indemnification that the Company deems appropriate, may order
indemnification if it determines that Executive is entitle to indemnification
with respect to the Claim because Executive met the standards of conduct set
forth in Paragraph 2(b) above.  If the
court determines that Executive is entitled to indemnification, the court shall
also determine the reasonableness of Executive’s Expenses.

 

8.             Expenses incurred by
Executive in defending any Claim shall be paid by the Company in advance of the
final disposition of such Claim promptly as they are incurred upon receipt of
an undertaking by or on behalf of Executive to repay such amount if Executive
is determined not to be entitled to indemnification.

 

9.             The rights of
indemnification and advancement of Expenses provided in this Attachment B shall
be in addition to any rights to which Executive may otherwise be entitled,
provided that the Company shall not be obligated to make any payment in
connection with a Claim to the extent Executive has received payment of such
amount from another source, including without limitation any insurer,

 

10.           The provisions of this
Attachment B shall be applicable to Claims made or commenced after the date of
this Agreement, whether arising from acts or omissions to act occurring before
or after the date of this Agreement.

 

11.           If this Section or any
portion hereof shall be invalidated on any ground by any court of competent
jurisdiction, then the Company shall nevertheless indemnify Executive as to
costs , charges and expenses (including attorney’s fees), judgments, fines and
amounts paid in 

 

B-2

 

settlement with respect to any action, suit or proceeding, whether
civil, criminal, administrative or investigative, including an action by or in
the right of the Company, to the fullest extent permitted by an applicable
portion of this Section that shall not have been invalidated and to the
fullest extent permitted by applicable law.

 

B-3

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