KITTY HAWK INC
EMPLOYMENT AND SEVERANCE AGREEMENT - J. CLARK STEVENS
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<TYPE>EX-10.9
<SEQUENCE>10
<FILENAME>dex109.txt
<DESCRIPTION>EMPLOYMENT AND SEVERANCE AGREEMENT - J. CLARK STEVENS
<TEXT>
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                                                                    EXHIBIT 10.9

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                       EMPLOYMENT AND SEVERANCE AGREEMENT

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1.0      Parties and Date

         1.1 Parties. The parties to this modified and restated employment
agreement (this "agreement") are Kitty Hawk Aircargo, Inc. ("Kitty Hawk"), with
its principal place of business located at 1515 W. 20/th/ Street, P.O. Box
612787, DFW International Airport, Texas 75261, with a fax number of (972)
456-2449, and J. Clark Stevens ("Stevens"), who resides at 2606 Twelve Oaks
Lane, Colleyville, Texas 76034.

         1.2 Date. This agreement is dated and effective October 3, 2002.

2.0      Recitations and Acknowledgments

         2.1 Previous Employment Agreements. Stevens has been employed by Kitty
Hawk since on or about September 1, 1998, and there is currently no written
employment agreement effective between Stevens and Kitty Hawk. This agreement
supersedes, modifies and restates all previous employment agreements between
Stevens and Kitty Hawk.

3.0      Terms of Employment

         3.1 Responsibilities. Stevens will be President of Kitty Hawk, and will
be subject to the direction of Kitty Hawk's Chief Executive Officer and board of
directors, but he will have authority commensurate with his responsibilities and
shall use his full working time and in fulfillment of his employee and fiduciary
duties will commit his productive time and exert his efforts to the extent
normally and generally expected of a full-time president of a corporation of the
size and complexity of Kitty Hawk in carrying out those responsibilities.
Stevens is expected to continue to be involved in all of Kitty Hawk's business,
and to play a major role in the success of the entire enterprise. Both Stevens
and Kitty Hawk expect Stevens' responsibility, authority and compensation to be
adjusted from time to time as determined by Kitty Hawk's board of directors.

         3.2 Annual Compensation. Stevens's basic annual compensation ("basic
annual compensation") shall not be less than $185,000.00, payable in equal
semi-monthly installments. His basic annual compensation may otherwise be
adjusted from time to time, and he may be paid other bonus compensation from
time to time based upon his performance and the success of the Kitty Hawk
enterprise, all as determined by the board of directors.

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         3.3 Fringe Benefits. Stevens shall receive the employee fringe benefits
that are generally available to all Kitty Hawk employees, and such other fringe
benefits as may be determined from time to time by the board of directors.

         3.4 Medical Insurance. During his employment under this agreement and
as provided in P. 3.6B below, Kitty Hawk will provide to Stevens at no cost to
Stevens medical and hospitalization insurance coverage at least substantially
equivalent to the coverage that is now provided to Stevens under Kitty Hawk's
employee medical plans.

         3.5 Proprietary information.

         A.  Stevens shall while in Kitty Hawk's employ diligently safeguard
             Kitty Hawk's proprietary information; and when leaving Kitty Hawk's
             employment for whatever reason, shall surrender to Kitty Hawk all
             written or recorded evidence of Kitty Hawk's proprietary
             information, as well as all Kitty Hawk property, in Stevens' actual
             or constructive possession.

         B.  After leaving Kitty Hawk's employment for whatever reason, Stevens
             shall never disclose, disseminate or utilize Kitty Hawk's
             proprietary information unless Kitty Hawk's chief executive officer
             expressly authorizes the disclosure, dissemination or utilization
             in writing.

         C.  For the purpose of this agreement, the term "proprietary
             information" shall specifically not include: (a) information that
             is now in or hereafter enters the public domain without a breach of
             this agreement by Stevens; (b) information Stevens knew already
             prior to the time of his employment by Kitty Hawk; (c) information
             that is obtained, after the date of Stevens' termination, by
             Stevens from any third party that is lawfully in possession of such
             information, but only if such disclosure of information to Stevens
             does not violate any contractual or legal obligation to Kitty Hawk
             on the part of such third party or does not breach a confidential
             relationship of such third party to Kitty Hawk; and (d) information
             required or requested to be disclosed by court order, subpoena,
             data request or other legal process or by applicable regulatory
             authorities; provided, however, that Stevens provide Kitty Hawk
             with prompt written notice of any such request or requirement so
             that we may seek a protective order or other appropriate remedy.


         3.6 Termination. Both Kitty Hawk and Stevens shall have the right to
terminate this employment agreement with or without cause at any time with
30-days' written notice to the other party.

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         A.  If Stevens terminates the agreement without material breach by
             Kitty Hawk, Stevens shall waive all rights to any compensation
             under this agreement that would otherwise have been payable after
             the termination. If Stevens terminates the agreement without
             material breach, Stevens agrees to deliver to Kitty Hawk a letter
             of resignation related to all positions Stevens holds within Kitty
             Hawk.

         B.  If Kitty Hawk terminates his employment without material breach by
             Stevens prior to December 31, 2002, Stevens shall be entitled as
             his exclusive remedies to (i) such portion of the basic annual
             compensation he would have received from the date of termination
             through December 31, 2002, payable when it would have been paid in
             the absence of such termination, and (ii) the medical insurance
             benefits provided under P. 3.4 he would have otherwise received
             through December 31, 2002 in the absence of such termination, plus
             (iii) three (3) months worth of his basic annual compensation,
             payable when it would have been paid in the absence of termination
             and (iv) the medical insurance benefits provided under P. 3.4 for a
             period of three (3) months after the date of termination. If Kitty
             Hawk terminates his employment without material breach by Stevens
             after December 31, 2002, Stevens shall be entitled as his exclusive
             remedies to (i) three (3) months worth of his basic annual
             compensation, payable when it would have been paid in the absence
             of termination and (ii) the medical insurance benefits provided
             under P. 3.4 for a period of three (3) months after the date of
             termination. If Kitty Hawk terminates Stevens' employment for
             cause, he shall not be entitled to the remedies set forth in this
             P. 3.6B. If Kitty Hawk terminates Stevens' employment without his
             material breach either before or after December 31, 2002, Stevens
             agrees to deliver to Kitty Hawk a letter of resignation related to
             all positions Stevens holds within Kitty Hawk.

         C.  If because of disability Stevens becomes unable to perform his
             duties under his employment prior to any termination, or if Stevens
             dies during his employment under this agreement prior to any
             termination, Stevens' shall rely on the proceeds of insurance
             policies covering his disability or death as maintained by Kitty
             Hawk as his sole remedy in lieu of the compensation set for in P.
             3.6B above. If Stevens shall become disabled or shall die after
             termination and during the time the severance compensation is being
             paid, Stevens' estate shall be paid the compensation as set forth
             in P. 3.6B above.

4.0      Hiring of Kitty Hawk Employees after Termination. If Stevens is
         terminated without material breach of this agreement, for a period of
         three (3) years after Stevens's termination, Stevens agrees that he
         will not attempt to knowingly hire, directly or by someone under his
         direct

Employment and Severance Agreement                                        Page 3

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         supervision and at his direction, as an employee, independent
         contractor or otherwise, any of Kitty Hawk's officers or key employees,
         so long as such officer or key employee was not terminated by Kitty
         Hawk and such officer or key employee is still employed by Kitty Hawk.

5.0      Releases

         A.  UPON STEVENS' TERMINATION, IN CONSIDERATION OF THE SEVERANCE
             PROVIDED IN P. 3.6B ABOVE AND OTHER GOOD AND VALUABLE
             CONSIDERATION, THE SUFFICIENCY OF WHICH IS HEREBY ACKNOWLEDGED,
             STEVENS SHALL RELEASE, TO THE GREATEST EXTENT ALLOWABLE BY
             APPLICABLE LAW, ALL CLAIMS AGAINST KITTY HAWK, ITS SUBSIDIARIES AND
             EACH OF THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS,
             RELATED TO HIS EMPLOYMENT AND HIS TERMINATION, EXCEPT FOR ANY CLAIM
             OF WILLFUL BREACH. SUBJECT TO THE PRECEDING SENTENCE, THIS FULL,
             FINAL AND UNCONDITIONAL RELEASE SHALL INCLUDE, BUT IS NOT LIMITED
             TO, ANY AND ALL CLAIMS AND CAUSES OF ACTION WHATSOEVER, WHETHER
             FOUNDED ON CONTRACT (EXCEPT FOR THIS AGREEMENT), TORT, STATUTE,
             REGULATION (FEDERAL, STATE OR LOCAL), COMMON LAW, OR ANY OTHER
             THEORY OR GROUNDS, INCLUDING BUT NOT LIMITED TO, ANY ADMINSTRATIVE
             CLAIMS, AND CLAIMS UNDER THE OCCUPATIONAL SAFETY AND HEALTH ACT,
             THE AMERICANS WITH DISABILITIES ACT, TITLE VII OF THE CIVIL RIGHTS
             ACT OF 1964 AND ANY SUBSEQUENT YEARS (INCLUDING, BUT NOT LIMITED
             TO, THE CIVIL RIGHTS ACT OF 1991), THE OLDER WORKERS BENEFIT
             PROTECTION ACT, THE FEDERAL AGE DISCRIMINATION IN EMPLOYMENT ACT,
             AND ANY DISCRIMINATION ON THE BASIS OF NATIONAL ORIGIN, SEX, RACE,
             AGE, HANDICAP, OR MATRITAL STATUS, BREACH OF CONTRACT, BREACH OF
             ANY OTHER EMPLOYMENT AGREEMENT OR CONTRACT, PROMISSORY ESTOPPEL,
             HOSTILE WORK ENVIRONMENT, WRONGFUL DISCHARGE, SEXUAL HARASSMENT,
             BREACH OF COVENANT OF GOOD FAITH AND FAIR DEALING, HARASSMENT AND
             OR DISCRIMINATION OF ANY TYPE, INTENTIONAL OR NEGLIGENT INFLICTION
             OF EMOTIONAL DISTRESS, WRONGFUL TERMINATION, FRAUD,
             MISREPRESENTATION, DEFAMATION, INTERFERENCE WITH PROSPECIVE
             ECOMONIC ADVANTAGE, FAILURE TO PAY WAGES OR OTHER MONIES OWED.

         B.  UPON STEVENS' TERMINATION, KITTY HAWK SHALL RELEASE STEVENS OF ALL
             CLAIMS, KNOWN OR UNKNOWN, AGAINST STEVENS IN CONNECTION WITH HIS
             OBLIGATIONS ARISING OUT OF OR IN CONNECTION WITH HIS EMPLOYMENT

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             AND THIS AGREEMENT, EXCEPT SUCH RELEASE SHALL NOT APPLY TO CLAIMS
             THAT ARE THE RESULT OF STEVENS' WILLFUL MISCONDUCT, INCLUDING BUT
             NOT LIMITED TO UNDISCOVERED INTENTIONAL BREACHES OF PROHIBITIONS
             AGAINST THE DISCLOSURE OF THE PROPRIETARY INFORMATION OF KITTY HAWK
             OR EITHER OF ITS AFFILIATES, OR A COMMITMENT MADE TO BIND KITTY
             HAWK OR EITHER OF ITS AFFILIATES WITHOUT APPARENT OR REAL
             AUTHORITY. NOTHING HEREIN SHALL BE DEEMED A MODIFICATION OF THE
             INDEMNICATION PROVISIONS OF KITTY HAWK'S CERTIFICATE OF
             INCORPORATION, AND IF A CONFLICT ARISES BETWEEN THIS AGREEMENT AND
             THE CERTIFICATE OF INCORPORATION, THE CERTIFICATE OF INCORPORATION
             SHALL GOVERN.

6.0      General Provisions

         6.1 Entire Agreement and Amendments. This agreement is the entire
agreement between Kitty Hawk and Stevens with respect to the subject matter set
forth in this agreement and it merges and supersedes all former agreements,
promises or representations, whether oral or written, express or implied, that
relate to Stevens' employment with Kitty Hawk. To amend this agreement, Kitty
Hawk and Stevens must sign a written amendment that identifies by paragraph
number the provision that it purports to amend. No noncomplying course of
dealing or waiver shall be construed to amend this agreement.

         6.2 Construction. This agreement has been executed and delivered in
Texas, whose substantive law (excluding conflict of laws rules that might apply
the substantive law of another jurisdiction) shall govern its effect and
construction, except that Delaware corporate law shall govern the internal
affairs of Kitty Hawk and other corporate matters where applicable. No rule of
construction resolving ambiguity against a drafting party shall apply. This
agreement binds and benefits the parties and their respective heirs, personal
representatives, successors and assigns. Stevens agrees that his obligations
under this agreement to protect Kitty Hawk's proprietary information are in
addition to Stevens' implied obligations under Texas law, and that all of those
obligations may be enforced by equitable remedies, such as injunction, as well
as by damages resulting from their breach. If any provision of this agreement is
invalid or unenforceable, the remaining provisions shall nevertheless be
enforceable.

         6.3 Notices. All notices hereunder must be in writing. Notices may be
given by mail, fax or other delivery to a party at its notice address, which is
that party's address in P. 1.0 unless that party has designated another notice
address by notice hereunder. A notice given by Federal Express or U.S. Express
Mail, fee prepaid, return receipt requested, addressed to the intended recipient
at its

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notice address, will be deemed given three business days after deposit with
Federal Express or the U.S. Postal Service. Any notice given by other means will
be effective only when received by the addressee.

         6.4 Breach, Notice and Time to Cure. In the event that either party
breaches this agreement, the non-breaching party shall give the breaching party
written notice of such breach and the breaching party shall have the opportunity
for five (5) business days from the date of receipt of such notice to cure the
breach.

         6.5 Binding Agreement to Arbitrate Disputes. Any controversy or claim
arising out of or relating to this agreement, performance under it, or the
arbitrability of any claim between the parties, must be settled exclusively by
arbitration under the Commercial Arbitration Rules of the American Arbitration
Association ("AAA"); except that (i) P. 6.2 must govern applicable law and
construction, (ii) no arbitration demand or action upon a claim arising out of
or relating to this agreement or its performance may be commenced more than two
years after the cause of action accrues, (iii) the locale of any arbitration
must be Dallas, Texas, (iv) the arbitration shall be conducted by a single
arbitrator, which shall be mutually selected by both parties, (v) the language
of the arbitration must be English, (vi) any award must state the arbitrator's
material findings of fact and conclusions of law, (vii) a party may seek
preliminary injunctive or other equitable relief from any court of competent
jurisdiction only to preserve the status quo pending selection of the
arbitrator, (viii) the arbitrator may by interim or final award grant
declarative and injunctive and other equitable relief; and (ix) a prevailing
party in litigation to require arbitration or to obtain preliminary relief
pending selection of an arbitrator, in arbitration, or in litigation to confirm
or enforce an arbitration award will be entitled to recover its reasonable
attorneys' fees and costs. Any suit to require arbitration under this agreement,
or to enforce judgment upon an arbitration award, may be brought in any court of
competent jurisdiction.

                                                  /s/ Clark Stevens
                                                  ------------------------------
                                                  J. Clark Stevens


                                                  Kitty Hawk Aircargo, Inc.

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

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