Document:

Exhibit 101

		

			Exhibit 10.1

		

		

			 

		

		
			 
		

		
			FISCAL YEAR 2014
		

		
			MANAGEMENT INCENTIVE PLAN
		

		
			UMBRELLA BONUS POOL BONUS AGREEMENT
		

		
			 
		

		
			This Sysco Corporation Fiscal Year 2014 Management Incentive Plan UMBRELLA BONUS POOL Bonus Agreement (this “Agreement”) was adopted by the Committee pursuant to the Sysco Corporation 2009 Management Incentive Plan (the “Plan”) (a copy of which is attached as Exhibit 1) and agreed to by the Company and __________ (“Executive”) effective _______ ___, 2013. This Agreement is effective for the fiscal year ending June 30, 2014  (the “Plan Year”). Capitalized terms used but not otherwise defined herein shall have the meanings given them in the Plan. 
		

		
			 
		

		
			1.       Calculation of Bonus.  
		

		
			(a)    Notwithstanding anything to the contrary contained herein, and subject to the further adjustments and limitations provided for in the Plan and Section 1(c) of this Agreement, the bonus Executive may earn under this Agreement shall equal up to ___ percent (____%) of two percent (2%) of the Company’s Net Earnings for the Plan Year (the “Maximum Bonus”).  “Net Earnings” means, for the Plan Year, the net earnings of the Company as reported in the Company’s audited consolidated financial statements for the Plan Year. The bonus payout for the Plan Year shall be determined under Subsection 1(b) and adjusted under Subsection 1(c).
		

		
			 
		

		
			(b)    Objective Performance Bonus.  The Objective Performance Bonus shall equal the sum of the following:
		

		
			 
		

		
			(i)     Company Earnings Bonus – 
		

			
					
						Bonus Target

					
						Amount

					
					
						X

					
					
						Company Earnings Bonus Percentage

					
					
						X

					
					
						50%

					
					
						=

					
					
						Company Earnings Bonus

				

		
			 
		

		
			(ii)     Company Sales Growth and Gross Profit Dollars Bonus–
		

			
					
						Bonus Target Amount

					
					
						X

					
					
						Company Sales Growth and Gross Profit Dollars Bonus Percentage

					
					
						X

					
					
						30%

					
					
						=

					
					
						Sales Growth and Gross Profit Dollars Bonus

				

		
			 
		

		
			(iii)     Company Capital Efficiency Bonus – 
		

			
					
						Bonus Target Amount

					
					
						X

					
					
						Company Capital Efficiency  Bonus Percentage

					
					
						X

					
					
						20%

					
					
						=

					
					
						Company Capital Efficiency Bonus

				

		
			 
		

		

		

		 

		

			 

		

 

		

			 

		

		

			 

		

		Each of the above components of Executive’s bonus shall be calculated independently.  Executive will not receive a component of the bonus set forth in this Section 1(b) if the Company does not achieve the “Threshold” level of performance as set forth in the applicable Table B attached hereto for that component.  For purposes of illustration, if the Company achieves the threshold Sales Growth and Gross Profit Dollars and Capital Efficiency but does not achieve the threshold fully diluted earnings per share, each as set forth in the applicable Table B attached hereto, Executive will receive a Company Sales Growth and Gross Profit Dollars Bonus and Company Capital Efficiency Bonus but will not receive a Company Earnings Bonus for the Plan Year.
		

		
			(c)    Adjustment to Bonus.   The Committee shall have the discretion to reduce the bonus calculated pursuant to Section 1(a) above as set forth in this Section 1(c).  Using the amount of the Objective Performance Bonus as a baseline, the Committee may adjust 40% of the Objective Performance Bonus based on the Committee’s evaluation of Executive’s achievement of the strategic business objectives set forth on Exhibit 2, attached hereto.  In calculating the amount of the adjusted Objective Performance Bonus,  the Committee may increase 40% of the Objective Performance Bonus by up to 150% or reduce 40% of the Objective Performance Bonus by up to 100% (to zero dollars ($0)) pursuant to this Section 1(c), but in no event shall the amount payable to Executive pursuant to this Section 1(c) exceed the Maximum Bonus set forth in Section 1(a) above for the year in which the bonus was earned.
		

		
			 
		

		
			(d)     General Rules Regarding Bonus Calculation.  
		

		
			 
		

		
			(i)     Consistent Accounting. In determining whether or not Executive is entitled to a bonus under this Agreement, the Company’s accounting practice and generally accepted accounting principles (“GAAP”) shall be applied on a basis consistent with prior periods, and such determination shall be based on the calculations made by the Company, certified by the Committee and binding on Executive. Notwithstanding the foregoing, if there is any material change in GAAP during a Plan Year that results in a material change in accounting for the revenues or expenses of the Company the calculations of the relevant Table B percentage for the Plan Year (the “GAAP Change Year”) shall be made as if such change in GAAP had not occurred during the GAAP Change Year.  In determining the Increase in Earnings Per Share for the Company in the year following the GAAP Change Year, the calculation shall be made after taking into account such change in GAAP. 
		

		
			(ii)    Tax Law Changes.  If the Internal Revenue Code is amended during the Plan Year and, as a result of such amendment(s), the effective tax rate applicable to the earnings of the Company (as described in the Income Taxes footnote to the financial statements contained in the Company’s annual report to the Securities and Exchange Commission on Form 10-K for the Plan Year) changes during the year, the calculation of the relevant Table B percentages for such Plan Year (the “Rate Change Year”) shall be made as if such rate change had not occurred during the Rate Change Year.  In determining the Increase in Earnings Per Share for the Company in the year following the Rate Change Year, the calculation shall be made after taking into account such rate change. 
		

		
			 
		

		
			2.       Performance Metric Adjustments.    Certain items of revenue, expense, gain, losses or other adjustments resulting from extraordinary or non-recurring items, will be taken into account in the application of the relevant performance metrics used to determine the amount of the Executive’s bonus under Section 1(b) of this Agreement in accordance with the following:
		

		
			 
		

		
			(a)   Multi-Employer Pension Adjustments: - Adjustments resulting from the Company’s or an Operating Company’s complete or partial withdrawal from a multi-employer pension plan sponsored by a third party in which the Company or one of its Operating Companies participates (“Pension Adjustments”).  The amount of any such adjustments shall be determined in accordance with GAAP. Pension Adjustments shall initially be excluded from 
		

		 

		

			 

		

 

		

			 

		

		

			 

		

		the calculation of the performance metrics used to determine Executive’s bonus under this Agreement;  provided however, the Committee may include all or any portion of such Pension Adjustments in the determination of Executive’s bonus hereunder in its discretion, if the Committee determines that the inclusion of all or any portion of such Pension Adjustments will not impact the Company’s ability to deduct all or any portion of the bonus payable to Executive under this Agreement under Section 162(m) of the Code.
		

		
			(b)   Acquisitions and Divestitures:  - All or a portion of operating results, acquisition and divestiture expenses (including any applicable break up fees), acquisition debt, if any, and any gains or losses relating to or resulting from (i)  an acquisition by the Company of stock (or other equity interest) or substantially all of the assets of a corporation, partnership, limited liability company or other entity for a purchase price in excess of $100 million;  and  (ii)  a  divestiture of an Operating Company or operating division of the Company (including a sale of all or substantially all of the assets thereof) for a sale price in excess of $100 million may be excluded from the determination of Executive’s bonus under this Agreement;  provided however, the Committee shall not make such an adjustment unless the Committee determines that the exclusion of all or any portion of such adjustments will not impact the Company’s ability to deduct the bonus payable to Executive under this Agreement under Section 162(m) of the Code.
		

		
			(c)    Restructuring Charges Adjustment.  Adjustments resulting from the Company’s or an Operating Company’s costs including, but not limited to, severance, facility closures and consolidations and asset write downs.  The foregoing notwithstanding, the following items will not be eligible for adjustment under this provision: ERB, COLI, Fuel and Tax.
		

		
			(d)    Certain Other Events.  Notwithstanding the foregoing, the Committee may, in its sole discretion, include or exclude from the determination of the relevant performance metrics the results of certain extraordinary items not otherwise contemplated by this Section 2, and expenses related to restructuring of the Company and its subsidiaries (whether or not such expenses are extraordinary or non-recurring), if the Committee determines that the inclusion or exclusion of such items will not impact the Company’s ability to deduct all or any portion of the bonus payable to Executive under this Agreement under Section 162(m) of the Code.
		

		
			3.    Payment.  Within ninety (90) days following the end of the Plan Year,  the Company shall determine and the Committee shall certify the amount of any bonus earned by Executive under this Agreement.  Such bonus shall be payable in the manner, at the times and in the amounts provided in the Plan.
		

		
			 
		

		
			4.   Clawback of Bonus. In accordance with the Company’s incentive payment clawback policy, in the event of a restatement of financial results (other than a restatement due to a change in accounting policy) within thirty-six (36) months of the payment of a bonus under this Agreement, and in connection with such restatement the Committee determines in its sole and absolute discretion, that the bonus paid to Executive under this Agreement for the Plan Year would have been lower had it been calculated based on such restated results (the “Adjusted MIP Bonus”), then the Company shall have the right, subject to applicable governing law, to recoup from Executive, in such form and at such time as the Committee determines in its sole and absolute discretion, the excess of the amount of the incentive payment previously paid to Executive pursuant to this Agreement (without regard to amounts deferred by Executive under the Company’s executive benefit plans) over the Adjusted MIP Bonus (the “Excess Payment”).  Executive hereby agrees that Executive shall promptly repay to the Company the amount of any Excess Payment received by Executive pursuant to this Agreement at the time or times and in the form determined by the Committee.  
		

		
			 
		

		
			5.   Confidentiality.  Executive hereby acknowledges and agrees that the target performance levels set forth on Table B, attached hereto, constitute confidential information 
		

		 

		

			 

		

 

		

			 

		

		

			 

		

		of the Company, subject to the prohibition on disclosure of confidential information under Sysco’s Code of Conduct. Any disclosure of the target performance levels by Executive prior to the time such target performance levels are disclosed to or known by the public, as determined by the Committee, will result in the forfeiture (which may include a clawback) by Executive of any bonus paid or otherwise payable to Executive under this Agreement for the Plan Year.  
		

		
			 
		

		
			6.      Definitions.
		

		
			 
		

		
			(a)      For Calculations Regarding Table B:
		

		
			(i)      Total Invested Capital: – for any given fiscal year, and with respect to the Company, the sum of the following:
		

		
			(AA)   Stockholder’s Equity: – the average of the amounts outstanding for the Company (determined in accordance with Section 6(b) hereof) at the end of each fiscal quarter for which the computation is being made (quarterly average basis).
		

		
			(BB)   Long-Term Debt: – the average of the long-term portion of the debt of the Company (determined in accordance with Section 6(b) hereof) outstanding at the end of each fiscal quarter for which the computation is being made (quarterly average basis).
		

		
			(ii)    Return on Invested Capital: – the Return on Invested Capital for the Company is expressed as a percentage and is computed by dividing the Company’s net after-tax earnings, as it may be adjusted pursuant to Section 2, for the Plan Year by the Company’s Total Invested Capital for the Plan Year, as it may be adjusted pursuant to Section 2.
		

		
			(iii)    Company Sales Growth and Gross Profit Dollars: - Company Sales Growth and Gross Profit Dollars, with respect to the Company, is expressed as a percentage and is computed by comparing the Company’s sales and gross profit dollars, as they may be adjusted pursuant to Section 2.
		

		
			(iv)   Company Earnings Bonus Percentage: - the percentage determined from Table B-Fully Diluted EPS, attached hereto, which coincides with the Company’s fully diluted earnings per share for the Plan Year.
		

		
			(v)   Company Sales and Profit Margin Growth Bonus Percentage: - the percentage determined from Table B-Sales and Profit Margin Growth, attached hereto, which coincides with the Company’s in Sales and Profit Margin Growth for the Plan Year.
		

		
			(vi)   Company  Capital Efficiency Bonus Percentage: - the percentage determined from Table B – Return on Invested Capital, attached hereto, which coincides with the Company’s Return on Invested Capital for the Plan Year.
		

		
			(b)       Method of Calculating Quarterly Averages: -- In determining the average amount outstanding of stockholders’ equity, and long-term debt under paragraphs 6(a)(i)(AA) and 6(a)(i)(BB), above, such averages shall be determined by dividing five (5) into the sum of the amounts outstanding of the relevant category at the end of each of the four quarters of the relevant fiscal year plus the amount outstanding of the relevant category at the beginning of the relevant fiscal year.
		

		
			(c)         Bonus Target Amount:  – Executive’s Target Bonus Percentage for the Plan Year multiplied by the Executive’s base salary as of the end of the relevant Plan Year.
		

		
			(d)         Target Bonus Percentage: - ____%
		

		

		

		 

		

			 

		

 

		

			 

		

		

			 

		

		7.     Term of Agreement.  This Agreement shall remain effective for the Plan Year (i.e., the fiscal year ending June 30, 2014) and until any amounts due and payable to the Executive pursuant to this Agreement are paid; provided however, that Section 4 of this Agreement shall survive the termination of this Agreement until such time the Committee determines whether there is any Excess Payment due from Executive and the payment of any such Excess Payment pursuant to Section 4 of this Agreement is paid to the Company.
		

		
			 
		

		
			8.     No Employment Arrangement Implied. Nothing in this Agreement or the Plan shall imply any right of employment for Executive, and except as set forth in Section 9 of the Plan with respect to a Change of Control or as otherwise determined by the Committee, in its discretion, if Executive is terminated, voluntarily or involuntarily, with or without cause, prior to the end of the Plan Year, Executive shall not be entitled to any bonus for the Plan Year regardless of whether or not such bonus had been or would have been earned in whole or in part, but any unpaid bonus earned with respect to a prior fiscal year shall not be affected. 
		

		
			 
		

		
			9.     Plan Provisions Shall Govern.   This Agreement is subject to and governed by the Plan and in the case of any conflict between the terms of this Agreement and the contents of the Plan, the terms of the Plan will control.
		

		
			 
		

		
			10.    Governing Law. The interpretation, construction and performance of this Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of Delaware without regard to the principle of conflict of laws.
		

		
			 
		

		
			11.    Counterparts.  This Agreement may be executed in counterparts, each of which shall be deemed to be an original and all of which together shall constitute one and the same instrument.
		

		
			 
		

		
			12.    Severability.  Provided the other provisions of this Agreement do not frustrate the purpose and intent of the law, in the event that any portion of this Agreement shall be determined to be invalid or unenforceable to any extent, the same shall to that extent be deemed severable from this Agreement, and the invalidity or unenforceability thereof shall not affect the validity and enforceability of the remaining portion of this Agreement. 
		

		
			
		

		
			13.    Amendment and Termination.   The Company may amend this Agreement at any time without the approval of Executive up to and until the day that is ninety (90) days after the beginning of the Plan Year. The Company may amend this Agreement at any time that is more than ninety (90) days after the beginning of the Plan Year without the approval of the Executive; provided however no amendments will be permitted to this Agreement that would directly or indirectly cause the compensation under this Agreement to fail to qualify as “performance based compensation” as that term is defined in Section 162(m) of the Code. Notwithstanding anything to the contrary contained in this Agreement, the Company may terminate this Agreement at any time during the Plan Year and Executive shall not be entitled to any bonus under this Agreement for the Plan Year regardless of when during the Plan Year this Agreement is terminated. 
		

		
			 
		

		

		

		 

		

			 

		

 

		

			 

		

		

			 

		

		IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by a duly authorized officer of the Company and Executive has executed this Agreement as of the day and year first written above.
		

		
			 
		

		
			 
		

			
					
						 

					
					
						 

					
					
						 

				
	
					
						SYSCO CORPORATION

					
					
						EXECUTIVE

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						By:

					
					
						                                                    

					
					
						 

					
					
						                                                    

					
					
						 

				
	
					
						 

					
					
						Russell Libby

					
					
						[Name of Executive] 

				
	
					
						 

					
					
						Senior Vice President, General Counsel

					
					
						 

				
	
					
						 

					
					
						and Corporate Secretary

					
					
						 

				

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		

		

		 

		

			 

		

 

		

			

		

		EXHIBIT 1
		

		
			“PLAN”
		

		
			 
		

		

		

		 

		

			 

		

 

		

			 

		

		

			 

		

		EXHIBIT 2
		

		
			 
		

			
					
						 

					
					
						 

					
					
						 

				
	
					
						NEO Name/Position

					
					
						Strategic Business Objectives (SBO)

					
					
						 

				
	
					
						Bill DeLaney

					
						President & CEO

					
					
						1.  Implement Category Management and achieve product cost savings

					
						2.  Deploy technology platform in a timely and cost effective way 

					
						3.  Achieve operating cost savings

					
						4.  Achieve targeted selling cost savings  and G&A cost savings

					
						5.  Reduce lost business for locally-managed customers, increase the ratio of new/lost for the same customer base and perform at a similar level or better for our corporate-managed customer base

					
						6.  Achieve 1% sales growth through core acquisitions and execute at least one Board-approved strategic acquisition / investment

					
						7.  Implement revenue management process / capability

					
						8.  Make significant progress towards our strategic goals for leveraging customer insight and growing Sysco Ventures

					
						9.  Make continued strides toward implementing an effective human capital plan

					
					
						 

				
	
					
						Chris Kreidler

					
						EVP & CFO

					
					
						1.  Effectively carry out all key aspects of Business Transformation

					
						2.  Reduce lost business for locally-managed customers, increase the ratio of new/lost for the same customer base and perform at a similar level or better for our corporate-managed customer base

					
						3.  Achieve 1% sales growth through new core acquisitions and execute at least one Board-approved strategic acquisition / investment

					
						4.  Ensure achievement of the Planned Free Cash Flow growth 

					
						5.  Make continued strides toward implementing an effective human capital plan – including recruiting talent for key leadership positions, development of high-potential leaders and increasing employee engagement

					
					
						 

				
	
					
						Mike Green

					
						EVP & President, Foodservice Operations

					
					
						1.  Effectively carry out all key aspects of Business Transformation

					
						2.  Reduce lost business for locally-managed customers, increase the ratio of new/lost for the same customer base and perform at a similar level or better for our corporate-managed customer base 

					
						3.  Achieve 1% sales growth through core acquisitions

					
						4.  Make significant progress towards our strategic goals for leveraging customer insights and growing Sysco Ventures: 

					
						5.  Make continued strides toward implementing an effective human capital plan – including recruiting talent for key leadership positions, development of high-potential leaders and increasing employee engagement

					
					
						 

				
	
					
						Wayne Shurts

					
						EVP, Chief Technology Officer

					
					
						1.  Effectively carry out all key aspects of Business Transformation

					
						2.  Reduce lost business for locally-managed customers, increase the ratio of new/lost for the same customer base and perform at a similar level or better for our corporate-managed customer base

					
						3.  Achieve FY14 profit plan expense for Business Technology Department

					
						4.  Implement programs / strategies to significantly improve Managed Service performance, results, metrics and customer survey scores 

					
						5.  Make continued strides toward implementing an effective human capital plan – including recruiting talent for key leadership positions, development of high-potential leaders and increasing employee engagement

					
					
						 

				
	
					
						Bill Day

					
						EVP, Merchandising

					
					
						1.  Effectively carry out all key aspects of Business Transformation

					
						2.  Reduce lost business for locally-managed customers, increase the ratio of new/lost for the same customer base and perform at a similar level or better for our corporate-managed customer base

					
						3.  Make continued strides toward implementing an effective human capital plan – including recruiting talent for key leadership positions, development of high-potential leaders and increasing employee engagement. 

					
					
						 

				

		
			 
		

		
			 
		

		
			 
		

		

		

		 

		

			 

		

 

		

			CONFIDENTIAL

		

		

			TABLE B

		

		

			 

		

		

			COMPANY PERFORMANCE BONUS

		

		 
		

		
			Attached
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		 

		

			THE PERFORMANCE TARGETS SET FORTH ON THIS TABLE B CONSTITUTE “CONFIDENTIAL INFORMATION” AND ANY DISCLOSURE OF SUCH PERFORMANCE TARGETS BY A PARTICIPANT PRIOR TO THE TIME SUCH PERFORMANCE TARGETS BECOME PUBLIC INFORMATION WILL RESULT IN SUCH PARTICIPANT FORFEITING HIS OR HER RIGHTS TO A BONUS UNDER THIS PROGRAM.ceosepagmt.htm

SEPARATION AGREEMENT AND RELEASE

This SEVERANCE AGREEMENT AND RELEASE (“the Agreement”) is dated as of the 5th day of November 2013, by and between Walter Clark (“Executive”), a resident of North Carolina, and Air T, Inc. (the “Company”), a Delaware corporation headquartered in Maiden, North Carolina.

Background

Executive has been employed by the Company pursuant to a written Employment Agreement dated as of July 8, 2005, filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 13, 2005, as amended by the Amendment to Employment Agreement between Executive and the Company dated as of October 31, 2013 (such Employment Agreement as so amended, the “Employment Agreement”).  Executive will end his employment with the Company as of the date set forth below.  The purpose of this Agreement is to set forth and establish, pursuant to the provisions of the Employment Agreement, the severance and other benefits to which Executive is entitled as a result of the cessation of his employment, to provide for a mutual release of claims, and to confirm the Executive’s continuing obligations to the Company.

Agreement

1.           Date of Termination.  Executive confirms his resignation as of October 30, 2013 as President and Chief Executive Officer of the Company and his continuation of employment by the Company since October 30, 2013, in a lesser capacity, but at the same salary, incentive pay and benefit levels Executive enjoyed as President and Chief Executive Officer.  Executive hereby resigns, as of the Effective Date (as defined below), as a director of the Company and from each and every remaining office and position with the Company and the Company’s subsidiaries.  To the extent required, Executive agrees to execute any documents reasonably required by the Company to effect such resignations.  The Company agrees that Executive has not been discharged for misconduct and has not left work without good cause attributable to the employer within the meaning of N.C. Gen. Stat. § 96-14.  The Company further agrees that Executive’s resignation as provided herein triggers the benefits provided in Sections 6(b) and 6(c) of the Employment Agreement.

2.           Payments by the Company.  Pursuant to and in full satisfaction of all obligations owed under the Employment Agreement, other than the obligations under the fourth and fifth sentences of Section 6(b) of the Employment Agreement, under Section 6(f) of the Employment Agreement, and otherwise as provided herein, the Company shall pay Executive:  (a) any unpaid portion of Executive’s annual base salary of $250,000 (“Base Salary”) through the Effective Date, which shall include payment for three weeks of accrued and untaken vacation time, (b) incentive compensation pursuant to Section 5(b) of the Employment Agreement with respect to the fiscal year ending March 31, 2014 in accordance with the terms of such Section 5(b) of the Employment Agreement, and (c) a lump sum payment of $565,680.37 within ten (10) days following execution of this Agreement, as payment in full of all amounts due pursuant to the first three sentences of Section 6(b) of the Employment Agreement and as consideration for services provided by Executive hereunder.  All such payments (other than payments for COBRA coverage) shall be reduced by withholding for federal and state taxes, as well as by such deductions, if any, authorized in writing by Executive.   The amounts set forth in clause (a) above shall be paid to Executive on the first regular payroll date following the Effective Date.  The amounts set forth in clause (b) above shall be paid within fifteen (15) days after the Company files with the Securities and Exchange Commission its Form 10-K for the year ending March 31, 2014.

3.           Benefits.  The Company shall, subject to the provisions of the Employment Agreement, comply with its obligations under the fourth and fifth sentences of Section 6(b) of the Employment Agreement and under Section 6(f) of the Employment Agreement.  Except for the foregoing, from and after the Effective Date, Executive shall not have the right to participate in or receive any benefit under any employee welfare benefit plan of the Company, any fringe benefit plan of the Company, or any other plan, policy or arrangement of the Company providing benefits or perquisites to employees of the Company generally or individually, other than the Air T, Inc. 2005 Equity Incentive Plan with respect to the award of options to purchase 50,000 shares of common stock (the “Options”) made to Executive on August 15, 2006, which Options are subject to the terms of such award.  To the extent permitted by the terms of the insurance policies described below, the Company shall promptly take actions necessary to permit Executive to convert the term life insurance and disability insurance policies with respect to Executive, the premiums with respect to which have been paid by the Company, to personal insurance policies with premiums to be paid by Executive going forward.

4.           Purchase of Shares and Cancellation of Options.

(a)  At the Closing Date (as such term is defined below), the Company shall purchase from Executive, and Employee shall sell to the Company, the approximately 93,757 shares of common stock of the Company (the “Shares”) held by Executive, free and clear of any liens or encumbrances, for $11.50 per share (such aggregate purchase amount being referred to as the “Share Purchase Amount”).  To effect such purchase and sale, at the Closing Date, Executive shall deliver to the Company certificates evidencing those Shares held directly by Executive in certificated form, duly endorsed in blank for transfer, and shall cause to be transferred to the Company on the Closing Date all of the remaining Shares (which are held by Executive in brokerage accounts) and the Company shall pay the Share Purchase Amount to Executive by wire transfer in accordance with wiring instructions delivered in writing (including by email) by Executive to the Secretary of the Company no later than 2:00 p.m. (Eastern time) two business days prior to the Closing Date.

(b)  At the Closing Date, Executive shall cancel and surrender to the Company the Options in return for payment by the Company to Executive of $160,500.00, less applicable withholding for taxes (the “Option Payment Amount”).  Executive represents that he has not exercised the Options and covenants that he will not exercise the Options hereafter.  To effect such cancellation, surrender and payment, at the Closing Date Executive shall execute and deliver to the Company a Certificate of Cancellation and Surrender, of the form attached hereto as Exhibit A, and the Company shall pay the Option Payment Amount to Executive by wire transfer in accordance with wiring instructions delivered in writing (including by email) by Executive to the Secretary of the Company no later than 2:00 p.m. (Eastern time) two business days prior to the Closing Date.

(c)  The closing of the transactions contemplated by this Section 4 shall occur at 10:00 a.m. on November 22, 2013, or such other time and date as the parties may mutually agree (the “Closing Date”), at the offices of Robinson, Bradshaw & Hinson, P.A., 101 North Tryon Street, Suite 1900, Charlotte, North Carolina.

5.           Release by Executive.  For valuable consideration provided herein, Executive, for himself, and his assigns, heirs and executors and for all persons claiming by or through him, does hereby forever and unconditionally release the Company, together with its affiliated corporations or entities (including without limitation Mountain Air Cargo, Inc., CSA Air, Inc., Global Ground Support, LLC and Global Aviation Services, LLC), their insurers or benefit plans, and each of their respective past or present officers, directors, executives, employees, agents, attorneys and consultants (including without limitation Seth G. Barkett, William R. Foudray, John J. Gioffre, Andrew L. Osborne, John A. Reeves, Nicholas J. Swenson, John Parry and William H. Simpson) from any and all claims or obligations whether known or unknown, arising out of any matter, cause or thing occurring before the date hereof, including without limitation all claims relating to or arising out of Executive's employment with the Company, alleged discrimination (including without limitation all claims for age discrimination arising under the Age Discrimination in Employment Act), retaliation, harassment, compensation, benefits, perquisites, severance, outplacement, vacation pay, automobile expense, business expenses, reimbursements of any kind, attorney’s fees, wages or bonuses owed to him, and all claims or obligations arising out of his departure from the Company as well as all such claims arising under or pursuant to the Employment Agreement.  This release covers any injuries, damages or claims not now known by Executive that arise in any way out of events occurring prior to the date of the execution of this Agreement.  Executive acknowledges that he has been advised of his option to retain counsel prior to signing the agreement encompassing this release, and executes the same freely, voluntarily and with full knowledge of its consequences.  Provided, however, this release shall not include any claims relating to (i) the obligations of the Company under this Agreement, (ii) Executive’s rights, claims and benefits under the health care benefit plans sponsored by the Company and (iii) Executive’s rights, claims and benefits under 401k retirement plans sponsored by the Company.

6.           Release of Executive.  For valuable consideration provided herein, the Company, together with its affiliated corporations or entities (including without limitation Mountain Air Cargo, Inc., CSA Air, Inc., Global Ground Support, LLC and Global Aviation Services, LLC), and  each of the following individuals:  Seth G. Barkett, Andrew L. Osborne, and Nicholas J. Swenson, (the “Releasees”), as evidenced by their signatures below, hereby release Executive from any and all claims or obligations whether known or unknown, arising out of any matter, cause or thing occurring before the date hereof, including without limitation all claims relating to or arising out of Executive's employment with the Company, as well as all such claims arising under or pursuant to the Employment Agreement, and any injuries, damages or claims not now known by the Releasees that arise in any way out of events occurring prior to the date of the execution of this Agreement, except that the Releasees that are corporate entities or limited liability companies exclude from this release any matter for which a Delaware corporation could not provide indemnity to an officer or director under Delaware law.  The Releasees execute this release freely, voluntarily and with full knowledge of its consequences.  Provided, however, this release shall not include any claims relating to the obligations of the Executive under this Agreement.

7.           Return of Company Property.  All records, files, lists, including computer generated lists, drawings, notes, notebooks, letters, handbooks, blueprints, manuals, sketches, specifications, formulas, financial information, sales and business plans, customer lists, lists of customer contacts, pricing information, computers, software (other than commercially available software for which the Company has purchased licenses), cellular phones, rugs, credit cards, keys, equipment and similar items relating to the Company’s business, together with any other property of the Company, including property of the Company provided for use by Executive during the course of Executive’s employment with the Company, shall be returned to the Company prior to or immediately following the Effective Date.  The Company acknowledges that Executive has purchased from the Company, by check delivered to the Company on October 31, 2013, the laptop computer, iPhone and iPad that had been assigned to Executive by the Company for use in his employment. Executive acknowledges that the Company will promptly terminate service contracts with telecommunication providers with respect to such iPhone and iPad.  Executive further represents that he will not copy, download, store or retain software (other than commercially available software for which the Company has purchased licenses), documents or other materials or files originating with or belonging to the Company, including any such software, documents or other materials or files stored in such laptop computer, iPhone or iPad.  By November 5, 2013, Executive shall, upon notice to the Company, remove from the Company’s premises any personal property of Executive, including all such goods in storage.

8.           Continuation of Obligations.  Executive’s obligations pursuant to Sections 7, 8, 9, 11, 12 and 13 (except Section 13(d)) of the Employment Agreement shall survive and continue pursuant to their terms.  Executive specifically ratifies and reaffirms his obligations pursuant to these provisions of the Employment Agreement, including without limitation his obligation not to compete with the Company pursuant to the terms thereof.  From the Effective Date through March 31, 2014, Executive agrees to assist the Company in providing information and advice, as may from time to time be reasonably requested by the Company, regarding the Company’s business, legal matters and relations with its customers, suppliers and employees; provided that Executive shall be obligated to devote no more than five (5) hours per month to providing such assistance.

9.           Final Agreement.  This document constitutes the final and complete agreement of the parties hereto, and all prior oral, verbal or written discussions, agreements or negotiations have been merged herein.  This Agreement shall not be modified or waived except pursuant to a written document signed by the parties hereto.

10.           Effective Date.  (a)  This Agreement will not become effective until the later of the Effective Date or the date seven (7) days after the date signed by Executive.  Executive shall have a period of seven (7) days to revoke his agreement to the provisions hereof, including the release terms set forth above.  Executive is advised of his right to have legal counsel review the terms of this Agreement, and is provided a period of twenty-one (21) days in which to execute this Agreement.  Executive understands that he may execute this document prior to the expiration of twenty-one (21) days from the date it has been presented to him.  In the event that Executive revokes his execution of this Agreement, all terms hereof will be null and void.

(b)           Executive and each individual Releasee represents that he (i) has had a reasonable amount of time in which to review and consider this Agreement prior to signature, (ii) has in fact read the terms of this Agreement, (iii) has the full legal capacity to enter into this Agreement and has had the opportunity to consult with legal counsel before signing this Agreement, (iv) fully and completely understands the meaning, intent, and legal effect of this Agreement, and (v) has knowingly and voluntarily executed this Agreement.

11.           Nondisparagement.  The Company agrees not to make, and agrees to cause its directors and executive officers, its subsidiaries and their respective directors and executive officers not to make, any statement (including to any media source or to the Company’s suppliers, customers, employees or stockholders) or take any action that would materially disrupt, impair, harm or adversely affect Executive.  Executive agrees not to make any statement (including to any media source or to the Company’s suppliers, customers, employees or stockholders) or take any action that would materially disrupt, impair, harm or adversely affect the Company, its directors and executive officers, its subsidiaries or their respective directors and executive officers.  Executive agrees that the issuance by the Company of the proposed press release attached hereto as Exhibit B does not breach the Company’s agreement under this Section 11.

12.           Cooperation.  Executive agrees that, subject to reimbursement of his reasonable expenses, he will cooperate fully with the Company, its subsidiaries and their respective counsel with respect to any legal proceeding (including litigation, investigations, or governmental proceedings) regarding any matter in which Executive was in any way involved during his employment with the Company and/or its subsidiaries.  Executive shall render such cooperation in a timely manner on reasonable notice from the Company.

13.           Choice of Law.  This Agreement is made and entered into in the State of North Carolina and shall in all respects be interpreted, enforced and governed by the substantive laws of the State of North Carolina without regard to choice of law provisions.

14.           Effective Date.   This Agreement is conditioned upon review by the Company’s legal counsel of documents to be provided by a third party on Wednesday, November 13, 2013, evidencing, to the satisfaction of the Company’s legal counsel, that the transactions documented are consistent with Executive’s representations. This Agreement will become effective upon successful completion of this review on or before Wednesday, November 13, 2013 at 5:00 p.m. (the “Effective Date”).

15.           Miscellaneous.  This Agreement may be executed simultaneously in one or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.  All provisions contained herein are severable, and the invalidity or unenforceability of any provision in this Agreement shall not in any way affect the validity or enforceability of any other provision, and this Agreement shall be interpreted and construed in all respects as if such invalid or unenforceable provision had never been contained herein.

[Signature pages follow]

  

  

  

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement, or caused this Agreement to be duly executed by their authorized representatives, as of the day and year first above written.

/s/ Walter Clark                                                              

Walter Clark

AIR T, INC.

By: /s/ William H. Simpson                                                              

William H. Simpson

Executive Vice President

SUBSIDIARY RELEASEES:

MOUNTAIN AIR CARGO, INC.

By: /s/ William H. Simpson

William H. Simpson, President

CSA AIR, INC.

By: /s/ William H. Simpson                                                              

William H. Simpson

Chief Executive Officer

GLOBAL GROND SUPPORT, LLC

By: /s/ William H. Simpson

William H. Simpson

Executive Vice President

GLOBAL AVIATION SERVICES, LLC

By: /s/ William H. Simpson                                                              

William H. Simpson

Authorized Signatory

[Signature pages continue]

INDIVIDUAL RELEASEES:

/s/ Nicholas J. Swenson                                                               

Nicholas J. Swenson

/s/ Seth G. Barkett                                                               

Seth G. Barkett

/s/ Andrew L. Osborne                                                               

Andrew L. Osborne

  

  

  

EXHIBIT A

CERTIFICATE OF SURRENDER AND CANCELLATION

The undersigned, Walter Clark, does hereby irrevocably surrender to Air T. Inc. (the “Company”) all rights he has or may have with respect to the award made by the Company to him on or about August 15, 2006 of options to purchase 50,000 shares of common stock of the Company at an exercise price per share of $8.29 (the “Options”) as evidenced by an Employee Stock Option Agreement (2005 Equity Compensation Plan) dated August 15, 2006 (the “Award Agreement”), the form of which is attached hereto.  The undersigned represents to the Company that such options are the only options to purchase shares of the capital stock of the Company awarded by the Company to him that are outstanding as of the date hereof.  The undersigned acknowledges that by his execution and delivery of this certificate to the Company all rights to exercise the Option and purchase shares of common stock of the Company pursuant to the Award Agreement shall be cancelled and that he shall have no rights thereunder.

This the __ day of November, 2013.

_______________________________

Walter Clark

  

  

  

THIS DOCUMENT CONSTITUTES PART OF A PROSPECTUS COVERING SECURITIES

REGISTERED UNDER THE SECURITIES ACT OF 1933.

AIR T, INC.

                          EMPLOYEE STOCK OPTION AGREEMENT

(2005 EQUITY INCENTIVE PLAN)

THIS AGREEMENT, made effective as of the 15th day of August, 2006 (the “Grant Date”), by and between Air T, Inc. (the “Corporation”), and Walter Clark (the “Holder”).

WHEREAS, the Corporation has adopted the Air T, Inc. 2005 Equity Incentive Plan (the “Plan”) in order to provide additional incentives to certain employees and directors and consultants of the Corporation and its Subsidiaries; and

WHEREAS, Section 2.1 of the Plan provides for the award of options to Employees of the Corporation and its Subsidiaries; and

WHEREAS, on the Grant Date the Holder was awarded options under the Plan, which award is to be evidenced by this Agreement, dated as of the Grant Date, though it may be physically executed and delivered after the Grant Date;

NOW, THEREFORE, the parties hereto agree as follows:

	
1.  

	
Grant of Option.  Pursuant to Section 2.1 of the Plan, the Corporation hereby grants to the Holder an option (the “Option”) to purchase all or any part of an aggregate of 50,000 shares of Common Stock (the “Shares”), subject to, and in accordance with, the terms and conditions set forth in this Agreement and the Plan.  The Option and this Agreement are subject to all of the terms and conditions of the Plan, which terms and conditions are hereby incorporated by reference, and, except as otherwise expressly set forth herein, the capitalized terms used in this Agreement shall have the same definitions as set forth in the Plan.

 

	
2.  

	
Status of Option.  The Option [select one]:

 

    x is intended to qualify as Incentive Stock Options under Section 422 of the Code, up to the maximum amount that may qualify as Incentive Stock Options;

    o is not intended to qualify as Incentive Stock Options under Section 422 of the Code.

 

	
3.  

	
Exercise Price.  The price at which the Holder shall be entitled to purchase Shares upon the exercise of the Option shall be $8.29 per share.

 

	
4.  

	
Duration of Option.  Subject to the terms of the Plan, the Option shall remain exercisable for [select one]:

           x ten years after the Grant Date;

 

other (specify; may be no later than ten years after the Grant Date):

________________________________________________________________________

________________________________________________________________________

	
5.  

	
Vesting and Exercisability of Option.  Subject to the terms of the Plan, the Option shall vest and be exercisable [select one]

 

    x with respect to

 

	
  

	
(i)

	
one-third (1/3) of the shares of Common Stock covered by the Option beginning on the first anniversary of the Grant Date,

 

	
  

	
(ii)

	
an additional one-third (1/3) of the shares of Common Stock covered by the Option beginning on the second anniversary of the date of the Grant Date, and

 

	
  

	
(iii)

	
the remaining one-third (1/3) of the shares of Common Stock covered by the Option beginning on the third anniversary of the Grant Date.

 

other (specify):

________________________________________________________________________

________________________________________________________________________

________________________________________________________________________

	
6.  

	
Acceleration of Vesting upon Change of Control.  (select one)

 

In the event of a Change of Control, the Option shall become fully exercisable and vested to the full extent of the original grant.

A Change of Control shall not affect the exercisability or vesting of the Option.

	
7.  

	
Termination of Service.  In the event of the termination of the Holder’s Service, the Option shall terminate in full (whether or not previously exercisable) prior to the expiration of its term [select one]:

 

	
       x

	
  on the date thirty (30) days after the date of the termination of the Holder’s Service, unless the Holder’s Service is terminated due to the Holder’s:

 

	
  

	
(i)

	
death, in which case the Holder’s legatee(s) under the Holder’s last will or the Holder's personal representative or representatives may exercise all or part of the previously unexercised portion of the Option at any time within one year, but not beyond the expiration of its term, after the Holder's death to the extent the Holder could have exercised the Option immediately prior to the Holder’s death;

 

	
  

	
(ii)

	
Disability, in which case the Holder or the Holder’s personal representative may exercise the previously unexercised portion of the Option at any time within one year, but not beyond the expiration of its term, after the termination of the Holder’s Service to the extent the Holder could have exercised the Option prior to such termination; or

 

	
  

	
(iii)

	
Retirement, in which case the Holder may exercise the previously unexercised portion of the Option at any time within one year, but not beyond the expiration of its term, after the Holder's Retirement to the extent the Holder could have exercised the Option immediately prior to Retirement.

 

    o other (specify):

________________________________________________________________________

________________________________________________________________________

________________________________________________________________________

	
8.  

	
Exercise of Option.  The Holder may exercise all or a portion of the Option by giving written notice to the Company of exercise, specifying the number of shares of Common Stock with respect to which the Option is being exercised.  Such notice is to be delivered to the Secretary of the Company and is effective as of the later of the date of its receipt by the Secretary of the Company and the date of payment of the exercise price with respect thereto.

 

	
9.  

	
Non-Transferability of Option.   The Option shall not be transferable by the Holder except to the extent permitted under the Plan.

 

	
10.  

	
No Rights as a Stockholder.  The Holder shall not have any rights or privileges of a stockholder with respect to any shares of Common Stock by virtue of the Option until the date of issuance by the Corporation of a certificate for such shares pursuant to the exercise of the Option.

 

	
11.  

	
Holder Bound by the Plan.  The Holder hereby acknowledges receipt of a copy of the Plan and agrees to be bound by all the terms and provisions thereof.  A determination of the Committee as to any questions which may arise with respect to the interpretation of the provisions of this Agreement and of the Plan shall be final.  The Committee may authorize and establish such rules, regulations and revisions thereof not inconsistent with the provisions of the Plan, as it may deem advisable.

 

	
12.  

	
Modification of Agreement.  This Agreement may be modified, amended, suspended or terminated, and any terms or conditions may be waived, but only by a written instrument executed by the parties hereto.

 

	
13.  

	
Severability.  Each provision of this Agreement is intended to be severable.  Should any provision of this Agreement be held by a court of competent jurisdiction to be unenforceable or invalid for any reason, the remaining provisions of this Agreement shall not be affected by such holding and shall continue in full force in accordance with their terms.

 

	
14.  

	
Governing Law; Jurisdiction.  This Agreement shall be governed and construed in accordance with the laws of the State of North Carolina, without regard to the principles of conflicts of law, except to the extent governed by federal law.  Each party hereby irrevocably submits to the jurisdiction of the state and federal courts sitting in Catawba County, State of North Carolina, for the adjudication of any dispute hereunder.

 

	
15.  

	
Successors in Interest.  This Agreement shall inure to the benefit of and be binding upon any successor to the Corporation.  This Agreement shall inure to the benefit of the Holder’s legal representatives.   All obligations imposed upon the Holder and all rights granted to the Corporation under this Agreement shall be final, binding and conclusive upon the Holder’s heirs, executors, administrators and successors.

 

IN WITNESS WHEREOF, this Agreement has been executed by the Corporation and the Holder effective as of the date and year first written above.

	
AIR T, INC.

	  
	
By: __________________________________

	
Title:_________________________________

	  
	  
	
__________________________________

	
Walter Clark

  

  

  

EXHIBIT B

PRESS RELEASE

PRESS RELEASE                                                                                                     Contact: John Parry

Chief Financial Officer

3524 Airport Road

Maiden, NC  28650

(828) 464-8741 Ext. 6677

FOR IMMEDIATE RELEASE

AIR T, INC. ANNOUNCES CEO DEPARTURE

AND APPOINTMENT OF INTERIM CEO AND NEW DIRECTOR

 

MAIDEN, NC, November 5, 2013 - Air T, Inc. (NASDAQ Capital Market: AIRT) today announced the resignation of Walter Clark as Chief Executive Officer and President and the appointment of current Board Chairman, Nick Swenson, as interim Chief Executive Officer.  In addition, Air T announced that Mr. Clark has conditionally resigned as a director effective November 13, 2013 and that William H. Simpson, an Executive Vice President of Air T and the President of Air T’s Mountain Air Cargo subsidiary, has been elected as a director to replace Mr. Clark.

 

 

Mr. Swenson commented, “The board is extremely grateful for Walter Clark’s over 16 years of service as Air T’s CEO. Walter led the organization from the front, dedicating the Company to sound financial policies and focusing relentlessly on uncompromising customer service.  Walter’s leadership over many years has driven the growth and financial health of Air T.”

 

 

“In addition, we are delighted to welcome Bill Simpson back to the board.  Bill had served on the board for many years until the size of the board was reduced this past August.  We welcome his insights and value both his intimate familiarity with our air cargo operations and long-standing commitment to Air T’s stakeholders.”

 

Air T, through its subsidiaries, provides overnight air freight service to the express delivery industry, manufactures and sells aircraft deicers and other special purpose industrial equipment, and provides ground support equipment and facilities maintenance to airlines.  Air T is one of the largest, small-aircraft air cargo operators in the United States.  Air T’s Mountain Air Cargo (MAC) and CSA Air subsidiaries currently operate a fleet of single and twin-engine turbo-prop aircraft nightly in the eastern half of the United States, Puerto Rico and the Caribbean Islands.  Air T’s Global Ground Support subsidiary manufactures deicing and other specialized military and industrial equipment and is one of the largest providers of deicers in the world.  The Global Aviation Services subsidiary provides ground support equipment and facilities maintenance to domestic airline customers.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00223-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00223-of-00352.parquet"}]]