Was, Also, Apparently Working on An Autonymous Aircraft

Yesterday's big reveal about the recently filed lawsuit whereby Former CEO Kirk Hawkins was suing anybody and everybody associated with Icon Aircraft is producing some interesting surprises.

From the nearly two dozen pages in the initial filing, we have gleaned some interesting tidbits... including the 'reason' that Hawkins stepped down, some of his compensation demands, the fact that he appears to be working on an autonomous vehicle program, and the assertion that he claims to have been promised reinstatement as CEO after a year's 'sabbatical.'

But first; let's go back to the reasons for Hawkins removal as CEO -- which appears to have been a demand necessary to get much needed cash into the company. Hawkins had to be sidelined in order to get the investment dollars.

Hawkins removal in 2018 was described as an 'ultimatum' given after a financing package was supposedly negotiated with a new partner.

"This ultimatum was presented to the Board in a letter from the Mr. Xudong Zhu just before the November 6, 2018 Board meeting, insisting that the removal of Mr. Hawkins 'as the Chairman and CEO of ICON is necessary, appropriate, and in the best interest if ICON,' and further threatening that if the Board decides not to remove Mr. Hawkins, PDSTI (Shanghai Pudong Science and Technology Investment Co., Ltd., a Chinese state-owned enterprise headquartered in Shanghai, China) would stop providing additional financing to ICON."

The suit describes the alleged details of the ensuing battle... "On November 6, 2018, the Board, under the domination and control of the PDSTI Parties, and specifically Mr. Xudong Zhu, placed Mr. Hawkins on a temporary, 12-month sabbatical from his duties as CEO. Mr. Hawkins and all three other U.S-based board members voted against that action. One of those Board members, a highly-respected former CEO and Chairman of Boeing, resigned as a result of the Board’s action, stating that the PDSTI-dominated Board ignored the views of those with aviation industry experience and acted with “complete disregard for my advice and counsel on the criticality of senior management transitions.”

"Mr. Hawkins reluctantly acceded to the temporary 12-month sabbatical based on Defendants’ representations that the company would expeditiously execute the most recent written version of his employment agreement, which had been held up for more than year and a half as the PDSTI Parties intentionally stalled, delayed, and impeded the formal resolution of matters related to Mr. Hawkins’s employment. At all relevant times, however, Mr. Hawkins continued to discharge his duties faithfully as CEO based on the agreements made by Mr. Xudong Zhu and the Board of directors in oral and written form as well as board meetings prior to the completion of the final Written Contract."

In the most recent exchanges, Hawkins is asserting that his legal foes worked to demean and harm his interests... "Most recently, on June 11, 2020, the PDSTI Parties disseminated to the Board a false and defamatory narrative concerning their claimed grievances with Mr. Hawkins. The letter, which was sent shortly after Mr. Hawkins, through counsel, raised issues relating to his rights under the Employment Agreement and Written Contract, and was clearly intended to harass, intimidate, and demean Mr. Hawkins in order to dissuade him from taking legal action to enforce his legitimate contractual rights. The PDSTI Parties requested that ICON itself distribute the letter to all of ICON’s shareholders."

Throughout all this, Hawkins alleged that he was working under the authority of an employment contract... one that he now asserts has been violated. He also asserts the document was reached with Icon's apparent intention to dishonor the agreement from the onset.

"Defendants’ fraudulent conduct and misrepresentations was used as a tool to induce Mr. Hawkins into a contract ICON never intended to honor, and the PDSTI Parties never intended to permit ICON to honor, and subsequently silence Mr. Hawkins from making a meaningful contribution to the company he founded."

One of the more intriguing revelations was what appeared to Hawkins' next project.

"The Written Contract provides that Mr. Hawkins 'will have the right to develop, create, grow, find investors for, acquire and develop intellectual property for, incubate, and otherwise participate in [an] Autonomous Aircraft Project using Employee’s own time and own resources.”

"'Autonomous Aircraft Project' is defined in the Written Contract to mean 'an autonomous capable, transportation-focused, cargo-focused, and/or government-applications aircraft design project.”

"The Written Contract also provides that Mr. Hawkins 'will create a new entity for the Autonomous Aircraft Project” and that “ICON will have an ownership interest of 20-30% in that entity at the time of its creation.'"

"There exists and actual controversy between Plaintiff and ICON concerning the percentage ownership that ICON may have in an Autonomous Aircraft Project... By reason of ICON’s breaches of its obligations to Mr. Hawkins, Plaintiff seeks a declaration shall have no right, title, or interest in, any Autonomous Aircraft Project developed by Plaintiff and has no rights to future investments in the Autonomous Aircraft Company."

More info to come...

FMI: www.iconaircraft.com