EXHIBIT 10.12 TERM SHEET RANDY S. LEISER CHIEF FINANCIAL OFFICER KITTY HAWK, INC. JANUARY 20, 2004 Position: Vice President & Chief Financial Officer Responsibilities: As outlined in the Position and Candidate Specifications document provided to you earlier in this search process. Types of projects to be assigned over the first year (examples only): (a) S-1 (b) Exchange Listing (c) Network Global Expansion (interline and freight forwarder relationships) (d) Develop financial and operations analysis capability (e) Companywide IT Development (if desired) (f) Route Profitability and Yield Management Enhancements (g) Truck Network Expansion Project (h) Mergers and Acquisition Analysis Commitment: The role of Chief Financial Officer is a full-time one and requires the best efforts and total professional commitment of its incumbent. You will be expected to apply yourself to this role on a dedicated business, without interference from other professional activities. This implies that you should: - Complete any outstanding commitments outside Kitty Hawk you may have as soon as possible and advise the CEO of what those are; and - Not take on any new commitments outside Kitty Hawk without the prior approval of the CEO. Reporting to: President & Chief Executive Officer Location: Dallas, Texas You will participate in evaluating any potential relocation of the corporate headquarters for the company, should relocation be considered. Termination: Should you be terminated without cause, you would be provided six months' base salary. Base Salary: $185,000, payable in biweekly installments. Your salary will be reviewed in June 2004 and, if your performance in the role is satisfactory or better, the base salary will be adjusted to $200,000 and then subject to annual review thereafter. Incentive Compensation Kitty Hawk will be introducing a new (Cash and Equity) incentive compensation program for its top leadership team. As the CFO, you will participate in a process over the near-term, with help of professional compensation consultants, to develop and secure Board approval for the new incentive compensation program. Your own incentive compensation will be governed by this new program. You will be awarded an incoming stock option grant, subject to a monthly vesting schedule, with the specific amount to be consistent with other officers of the company and to be approved by the Compensation Committee of the board. Employment Benefits: Standard Kitty Hawk Inc. executive level benefits (to be provided by Kitty Hawk under separate cover) Start Date: As soon as possible but no later than February 2, 2004 Conditions: Satisfactory background check and educational verification Satisfactory medical examination or recent medical report Maintaining this agreement in confidence until mutually agreed upon to communicate it more broadly. Acceptance of offer by January 22, 2004 Additionally, you will be expected to sign various agreements related to (a) non-competition, (b) non-disparagement, and (c) confidentiality (non-release) of proprietary information. SPENCERSTUART Accepted: /s/ Randy S. Lesier 1-21-04 - ------------------------- ------------------------------ Randy S. Leiser Date KITTY HAWK, INC. /s/ ROBERT W. ZOLLER, JR. - ------------------------- ROBERT W. ZOLLER, JR. PRESIDENT AND CEO