Exhibit 10.6

 

SEVERANCE, GENERAL RELEASE, AND INDEMNITY AGREEMENT

 

This Severance, General Release, and Indemnity Agreement (“Agreement”),
effective as of May 23, 2002, is made and entered into by and between Paul John
Casey (“Employee”) and Hawaiian Airlines, Inc. (“Employer”) and its successors.

 

RECITALS

 

Whereas, Employee was employed by Employer from April  14, 1997 as an at-will
employee; and

 

Whereas, Employee retired from employment with Employer on June 30, 2002; and

 

Whereas, Employee and Employer wish to settle and compromise any and all claims
Employee had, has, or may hereafter claim to have had relating to Employee’s
employment or termination from employment with Employer, as well as any and all
claims Employee had, has, or may hereafter claim to have against Employer
predating this Agreement;

 

Now, therefore, in accordance with the preceding recitals and in consideration
of the covenants, agreements, and representations set forth in this Agreement,
Employee and Employer agree as follows:

 

1.             Last Date of Employment.  Employee’s last day of employment shall
be June 30, 2002.  Employee shall not be required to perform any services for
the Company after May 17, 2002.

 

2.             Continuation of Base Salary.  Employer shall pay Employee an
amount equal to 36 months of Employee’s base annual salary (the “Consideration
Amount”).  Employee and Employer agree that the Consideration Amount shall be
One Million One Hundred Twenty-five Thousand U.S. Dollars ($1,125,000.00), less
all employment taxes and other deductions required to be withheld by Employer. 
It is expressly understood by and between the parties that payment of the
Consideration Amount, whether by Employer or by a third party, shall inure to
the benefit of Employer.  The Consideration Amount shall be paid by check in
equal semi-monthly installments on the standard pay dates of the Employer,
beginning on July 20, 2002 and ending on July 5, 2005.    The checks will be
mailed to an address provided by the Employee to the Employer.  The Employee is
responsible for informing the Employer of any changes in address affecting this
Agreement.  Direct deposit is not an available option.  Payments under this
section (as well as other payments to Employee under this Agreement) are
contingent on Employee’s continued compliance with all provisions of this
Agreement.

 

3.             Continuation of Benefits.  As further consideration for this
Agreement, Employer shall provide Employee with the following:

 

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Severance, General Release and Indemnity Agreement

Paul John Casey

 

 

a)              Automobile Allowance and Club Dues:  Employer shall continue
through June 30, 2005 to provide Employee with an automobile allowance of
$800.00 per month and will pay all dues and similar charges currently provided
to Employee for Oahu Country Club, Honolulu Club and Outrigger Canoe Club.

 

b)             Life Insurance Policies:  Employer shall continue to provide
Employee the two executive life insurance policies which are currently provided
as well as coverage for Employee under the Employer’s group life insurance plan
until the anniversary rollover date for each policy during 2005.  In addition,
if permitted by the insurance company issuing the policies, Employee may
continue the above referenced life insurance policies in accordance with the
terms set by the insurance company.

 

c)              Medical/Dental Benefit Plans:  Employer shall pay Employee
$82,880.00 in lieu of the continuation by Employer of medical and dental
benefits after termination through April 30, 2011, which amount shall be grossed
up for estimated taxes for a total lump sum payment of $159,845.71.    Upon
termination of medical and dental benefits by the Employer hereunder, Such
payment will be mailed as soon after execution of this Agreement as is
reasonably practicable to the address provided by the Employee to the Employer. 
Employee may elect to continue coverage under the Employer’s medical and dental
plans, at Employee’s own expense, in accordance with the Consolidated Omnibus
Budget Reconciliation Act of 1985.

 

d)             Flight Benefits:  Employee shall be entitled to Flight Benefits
for himself and his spouse during his lifetime.  “Flight Benefits” shall mean
flight benefits on each airline operated by Employer or any of its affiliates or
any successor or successors thereto (the “System”), consisting of the highest
priority positive space flight passes for unlimited travel on the System and a
membership for Employee and his spouse in the Employer’s airport executive club
program (the “Executive Club”).

 

As used for purposes of Flight Benefits, the term “affiliates” of Employer means
any entity controlled by, controlling, or under common control with Employer, it
being understood that control of an entity shall require the direct or indirect
ownership of a majority of the outstanding capital stock of such entity.

 

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Employee will be issued a membership card in the Executive Club for Employee and
Employee’s spouse and appropriate flight pass identification cards, each valid
at all times during the term of Employee’s Flight Benefits.

 

e)              Compensation for fringe benefits made unavailable by reason of
employment separation:  In recognition of the fact that Employee will no longer
be eligible to participate in certain employee benefits, including the
Employer’s 401(k) plan, the Employer shall pay Employee the sum of Twenty-nine
Thousand Eight Hundred Fifty Dollars ($29,850), less all employment taxes and
other deductions required to be withheld by Employer, said sum to be paid in
three equal installments on June 30 of 2002, 2003 and 2004, in full satisfaction
of the Employer’s obligations for these benefits.

 

4.             Stock Options.   Employee has been  granted stock options for the
purchase of  750,000 shares of common stock of the Employer (such options are
summarized on the chart attached hereto as Schedule A), all of which options
will vest on June 30, 2002 and will terminate on the original expiration dates
for said options, in accordance with Addendum No. 4 to the Employment Agreement
between Employee and Employer, effective as of January 31, 2001.

 

5.             Release of Claims.  In consideration of the benefits and payments
to Employee under this Agreement, Employee hereby releases Employer and its
successors, and their directors, officers, employees, and agents from any and
all claims (including, but not limited to, claims for personal injury, tort,
pension and/or retirement benefits, inflection of emotional distress, breach of
contract or for any statutory or regulatory violations, including but not
limited to violation of Title VII of the Civil Rights Act of 1964, the Age
Discrimination in Employment Act, the Rehabilitation Act of 1973, the Americans
with Disabilities Act of 1990, the Hawaii Civil Rights Act, and the Hawaii
Employment Practices Law, H.R.S. Chapter 378) Employee now has, known or
unknown, arising out of your employment with or separation from employment with
the Company; provided that this release of claims does not apply to any claims
Employee may have arising from or related to this Agreement.  Employee also
waives any claim for attorneys’ fees related to the foregoing released claims,
except for claims related to the enforcement of this Agreement.

 

If either party materially breaches this Agreement, the injured party shall
recover reasonable attorneys’ fees, court costs, and the cost of service of
process, in the event a court of law or tribunal, having jurisdiction over the
defaulting party, enters a judgment against the defaulting party.

 

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6.             Return of Property.  Employee warrants that he has returned all
property of Employer in Employee’s possession, custody, or control, including,
but not limited to, computer equipment (except laptop as provided herein),
computer hardware, computer software, fax machine(s), pager(s), company credit
card(s), company telephone card(s), Travel Authority Cards from other airlines,
identification card(s), access card(s), AOA Badge(s), Friendship Travel Passes
(FTPs), access code(s), key(s), company files, work product, manuals, customer
lists, company documents, financial  information, operational information,
blueprints, plans, memoranda, notes, and correspondence. Upon payment to
Employer of the sum of         , Employee will be allowed to purchase and retain
his computer laptop and related software provided that property and software
belonging to the Employer is purged.  In addition, Employee will be allowed to
retain his cellular phone and number, but all service costs will be assumed by
Employee as of July 1, 2002.

 

7.             Confidentiality of Proprietary Information.

 

a.             Employee acknowledges that he has had an obligation under the
Code of Business Ethics and Conduct Policy and House Rules to protect and
preserve the confidentiality of information relating to Employer throughout his
employment with Employer. Employee warrants and affirms that he has not
disclosed any information protected by the Code of Business Ethics and Conduct
Policy and House Rules.

 

b.             As used in this Agreement, the term “Proprietary Information”
means (i) any information of a confidential nature relating to the suppliers,
potential suppliers, customers, and/or potential customers of Employer, (ii) any
information of a confidential nature relating to the trade secrets,
manufacturing processes, product details, specific product applications,
computer software and design techniques, concepts, inventions, practices,
processes, and/or finances of Employer, (iii) any information of a confidential
nature relating to any business, financial, and/or other arrangements transacted
between Employer and any other person, firm, company, or other entity, and (iv)
any information of a confidential nature that Employee learned or created during
his employment with Employer.

 

c.             Employee acknowledges that he has been privy to Proprietary
Information during his employment with Employer. Employee agrees that he shall
maintain the confidentiality of the Proprietary Information and shall take all
steps necessary to protect the Proprietary Information and prevent any portion
of the Proprietary Information from entering the public domain or falling into
the hands of others not obligated to maintain the secrecy of the Proprietary
Information. Employee further agrees that he shall not directly or indirectly
use and/or disclose the Proprietary Information or any portion of the
Proprietary Information following his termination from employment with Employer.

 

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d.             Employee acknowledges that any and all documents or materials
containing any Proprietary Information, as well as any and all notes and
extracts related thereto are the exclusive property of Employer. Employee
warrants and affirms that any and all such documents, materials, notes, and
extracts have not been removed or duplicated by Employee, and that any and all
drafts, originals, and copies of such documents, materials, notes, and extracts
have been returned to Employer.

 

e.             Employee further acknowledges that any and all documents, papers,
drawings, magnetic or other media, tangible property, correspondence, memoranda,
voice-mail, and/or electronic mail made, compiled, received by, or made
available to Employee during his employment with Employer are the exclusive
property of Employer, whether or not any such materials contain any Proprietary
Information.  Employee warrants and affirms that any and all such materials have
not been removed or duplicated by Employee, and that any and all drafts,
originals, and copies of such materials have been returned to Employer.

 

8.             Intellectual Property Rights.

 

a.             Employee acknowledges that from time to time during his
employment with Employer he may have been involved (whether during or outside
normal business hours) in the concept, research, design or development of new
ideas, products, processes or practices. As used in this Agreement, any ideas,
concepts, inventions, designs, products, software, documents or other works of
authorship (in any medium), improvements, modifications, processes or practices
conceived, created or developed in whole or in part by Employee during the
period of his employment with Employer are referred to as an “Invention” or as
“Inventions”. However, as used in this Agreement, the terms “Invention” and/or
“Inventions” do not apply to any invention which was developed entirely on
Employee’s own time without using any equipment, supplies, facilities, or trade
secret information of Employer, except for inventions that either: (1) relate at
the time of conception or reduction to practice of the invention to the
business, actual research or development, and/or anticipated research or
development of Employer, or (2) result from any work performed by Employee for
Employer.

 

b.             Employee acknowledges, represents, and agrees that all Inventions
are the sole property of Employer, and that all tangible expressions of the
Inventions, including, without limitation, all documents, instruments, sketches,
drawings, notes, records, plans, specifications, manuals and tapes, and all
reproductions, copies or facsimiles thereof, have been developed, made or
invented exclusively for the benefit of and are the sole and exclusive property
of Employer and constitute work made for hire under Section 201 of Title 17 of
the United States Code (17 U.S.C. Section 201).

 

c.             Employee acknowledges, represents, and agrees that upon the
request of and at the expense of Employer, Employee shall execute any and all
documents (including, but

 

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not limited to, patent applications and assignments) and render any assistance
(including, but not limited to, assistance in arbitration, mediation, and/or
litigation), that Employer reasonably determine to be necessary or appropriate
to perfect, enjoy and defend the rights of Employer in any Invention.

 

d.             Employee acknowledges represents, and agrees that he shall not
register or seek to register with any governmental or other entity anywhere in
the world any rights in any Invention and shall not challenge Employer’s rights
in any Invention.

 

9.             Covenant Not to Compete.

 

a.             Employee acknowledges that he has had an obligation under the
Code of Business Ethics and Conduct Policy to refrain from competing with
Employer throughout his employment with Employer. Employee warrants and affirms
that he has not knowingly or intentionally engaged in any such competitive
activity.

 

b.             As of the date of this Agreement and continuing until June 30,
2004, the Employee shall not, directly or indirectly, own an interest in,
manage, operate, join, control, lend money or render financial or other
assistance to or participate in or be connected with, as an officer, employee,
partner, stockholder, creditor, investor, consultant or otherwise, any
individual partnership, firm, corporation or other business organization or
entity (collectively, an “Entity”) that, at such time: (a) is headquartered in
Hawaii and is primarily engaged in the business of passenger or freight airlines
services or aircraft ground maintenance operations; (b) is an airline that has
Hawaii inter-island passenger or freight services that constitute a material
share of its overall airlines business measured by passenger revenue miles or
freight pound miles; or (c) has 5% or more of the Hawaii inter-island passenger
or freight air services measured by passenger revenue miles or freight pound
miles and the Employee or his affiliates are serving directly as an officer,
employee, partner or consultant of, or otherwise has significant duties or
responsibilities involving, such Entity’s Hawaii operations.  Employee and
Employer acknowledge and agree that the provisions of this Section 9 do not
prevent Employee from owning shares which constitute a non-controlling interest
in any company which is traded on a national stock exchange.  Employee
acknowledges and agrees that any breach of this non-competition provision shall
entitle Employer to immediately terminate payment of the Consideration Amount
set forth in paragraphs 2 and 3 of this Agreement and to sue Employee for breach
of this Agreement for the immediate recovery of any damages caused by such
breach and to prevent Employee from taking further such actions in breach of
these provisions..

 

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10.                                 Non-Solicitation.

 

a.             Employee agrees that until June 30, 2005, he shall not directly
or indirectly represent any corporation or entity in any business transaction
with the Employer, unless waived by Employer in writing by an authorized officer
of Employer.

 

b.             Employee agrees that for a period of thirty-six months following
the termination of his employment with Employer, he shall not directly or
indirectly employ, engage, attempt to employ or engage, negotiate, arrange for
the employment or engagement, solicit, or otherwise endeavor to entice away any
individual who was employed by Employer

as a director, officer, manager, sales representative, or technician, or
research and development position at the time of Employee’s termination from
employment with Employer.

 

11.           Confidentiality of Agreement.  Employer has an interest in
avoiding public disclosure and commentary concerning the terms and conditions of
this Agreement.  Therefore, Employee agrees to keep the terms and conditions of
this Agreement strictly confidential, except as required by law. However,
Employee may disclose the terms and conditions of this Agreement to a spouse,
legal counsel and tax preparer(s), provided that Employee’s spouse, legal
counsel and tax preparer(s) agree not to further disclose the terms and
conditions of this Agreement, except as required by law.   Further, Employee may
discuss the provisions of Sections 8, 9, and 10 of this Agreement with
prospective employers.

 

12.           Non-Disparagement.  (a)  Employer has an interest in preserving
its reputation in the community. Employee agrees not to make any statements that
disparage or tend to disparage the Employer or its products, services, officers,
employees, advisers or other business contacts. Employee shall not represent,
suggest, or hold himself out as being currently associated or affiliated with
Employer in any way.  Employee shall not make contact with or engage in
communications about the Employer or its operations with the media, current or
former employees of Employer, or current or former customers of Employer,
provided, however, that if Employee is contacted by the media, current or former
employees of Employer, current or former customers of Employer, the general
public, or any other individual or entity, Employee shall not suggest or imply
that he is privy to current information about Employer, and shall not comment
about the current or prospective operation of Employer.  Employee acknowledges
and agrees that any breach of this non-disparagement provision shall entitle
Employer to immediately terminate payment of the Consideration Amount set forth
in paragraphs 2 and 3 of this Agreement and to sue Employee for breach of this
Agreement for the immediate recovery of any damages caused by such breach and to
prevent Employee from making further statements that disparage or tends to
disparage the Employer or any of its products, services, officers, employees,
advisors or other business contacts.

 

(b)  Employer recognizes Employee’s interest in preserving his reputation in the
community and the airline industry.   Employer agrees not to make any
unsubstantiated statements that disparage or tend to disparage the Employee. 
Employer shall not make contact

 

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with or engage in communications about the Employee with (i) the media, current
or former employees of Employer, or (ii) current or former business contacts of
Employer.  Employer acknowledges and agrees that any breach of this
non-disparagement provision shall entitle Employee to sue Employer for breach of
this Agreement  and seek immediate recovery of any damages caused by such breach
and to prevent Employer from further statements that disparage or tend to
disparage the Employee or any of his products or services.

 

13.           Right to Seek Injunctive Relief.,  Employee agrees that in
addition and without prejudice to Employer’s right to seek legal, equitable,
and/or any other form of relief, a breach of any of the provisions set forth in
paragraph 7 (Confidentiality of Proprietary Information), paragraph 8
(Intellectual Property Rights), paragraph 9 (Covenant Not to Compete), paragraph
10 (Non-Solicitation), paragraph 11 (Confidentiality of Agreement), and/or
paragraph 12 (Non-Disparagement) of this Agreement shall be temporarily,
preliminarily, and/or permanently enjoined by any court of competent
jurisdiction upon motion by Employer upon notice to Employee without a need to
show irreparable injury.  If the period of time or the geographic scope
identified in paragraphs 10 or 11 of this Agreement should be adjudged
unreasonable in any proceeding to enforce this Agreement, then the period of
time shall be reduced by such number of months or the geographical scope shall
be reduced by the elimination of such portion thereof, or both, so that such
restrictions may be enforced for such time and in such geographical area as is
adjudged to be reasonable.

 

14.           No Admission of Liability.  This Agreement represents a compromise
and settlement between the parties hereto, and nothing contained herein shall be
construed as an admission of liability by or on behalf of either party, by whom
liability is expressly denied.

 

15.           Complete Agreement.  This Agreement contains the entire
understanding and agreement between Employee and Employer and fully supersedes
any and all prior understandings and agreements pertaining to the subject matter
of this Agreement.

 

16.           Voluntary Agreement.  Employee agrees and acknowledges that he is
executing this Agreement voluntarily and not in response to any coercion by
anyone, and that he is not under any form of duress to agree to the terms of
this Agreement.

 

17.           Amendment and Modification in Writing.  This Agreement may not be
amended or modified except by an agreement in writing, duly signed by the party
or parties against whom the enforcement of any modification or amendment is
sought.

 

18.           Severability.  If any provision of this Agreement shall be or
become legally void or unenforceable for any reason whatsoever, such invalidity
and unenforceability shall not impair the validity or enforceability of the
other provisions of this Agreement. In such an event and to this extent only,
the provisions of this Agreement are deemed to be severable.

 

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19.           No Waiver of Rights.  A failure or refusal by any party to this
Agreement either to insist upon the strict performance of any provision of this
Agreement or to exercise any right in any one or more instances or circumstances
shall not be construed as a waiver or relinquishment of such provision or right,
nor shall such failure or refusal be deemed a custom or practice contrary to
such provision or right.  No waiver of any type shall be binding unless
evidenced by a writing signed by the party making the waiver. A waiver of any
breach of this Agreement shall not be deemed a waiver of any other breach of
this Agreement.

 

20.           Counterparts and Facsimile.  This Agreement may be executed on
documents transmitted by facsimile and/or in several counterparts, each of which
shall be deemed to be an original but all of which together will constitute one
and the same instrument.

 

21.           Review of Agreement.  Employee acknowledges and agrees that
Employer has advised Employee that Employee may consult with an attorney prior
to execution of this Agreement and that Employee has in fact consulted with an
attorney prior to signing this Agreement.   Employee acknowledges and agrees
that Employee has twenty-one (21) days to consider this Agreement before
accepting, but that Employee may voluntarily waive the 21-day pre-execution
period.   By signing this Agreement in both places indicated below at any time
during twenty-one day period, Employee will be voluntarily waiving the
twenty-one (21) day pre-execution period provided by law for the release of any
claim Employee may have under the Age Discrimination in Employment Act.   Upon
execution, Employee will have seven (7) days to revoke this Agreement.   This
Agreement shall not become effective or enforceable against Employer until the
expiration of this seven-(7) day period.

 

22.           Successors and Assigns.  All rights under this Agreement shall
inure to the benefit of and be binding upon Employer, its successors and
assigns.

 

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IN WITNESS WHEREOF, the parties have duly executed this Agreement.

 

SO AGREED:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PAUL JOHN CASEY

 

DATE

 

 

 

 

 

 

 

HAWAIIAN AIRLINES, INC.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BY: JOHN W. ADAMS

 

DATE: JUNE      , 2002

 

ITS: CHAIRMAN OF THE BOARD

 

 

 

 

 

 

 

 

 

 

 

BY: LYN F. ANZAI

 

DATE: JUNE      , 2002

 

Its: Vice President, General Counsel And Corporate Secretary

 

 

 

 

 

 

 

 

Pursuant to 29 C.F.R. Section 1625.22(e)(6), I hereby knowingly and voluntarily
waive the twenty-one (21) day pre-execution consideration period for release of
Age Discrimination in Employment Act claims set forth in 29 U.S.C. Section
626(f)(1)(F)(i)

 

 

 

 

 

PAUL JOHN CASEY

 

 

 

Date:

 

 

 

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