**Exhibit10.38**

 

**CONSULTING AGREEMENT**

 

This Consulting Agreement(the “Agreement”) dated as of February 22, 2008, and effective March 1,2008 (the “Effective Date”) is made by and between Hawaiian Telcom Holdco, Inc.a Delaware corporation (together with any successor thereto, the “Company”),and Michael S. Ruley (the “Consultant”).

 

WHEREAS, the Companydesires to engage the Consultant to provide services to the Company pursuant tothis Agreement and the Consultant desires to provide such services to the Companypursuant to this Agreement.

 

NOW, THEREFORE, inconsideration of the premises and mutual covenants contained herein, theCompany and the Consultant agree as follows:

 

1.             Services. The Company agrees to engage theConsultant, and the Consultant agrees to provide services to the Company, asrequested by the Company from time to time, under the terms and conditionsherein provided, including making himself reasonably available for consultationwith the Company and the Company’s agents and employees regarding his priorwork for the Company and its affiliates. During the Consulting Term (as definedbelow) the Consultant shall be a Special Advisor to the Chairman. TheConsultant will not (a) perform any services for the Company except asexplicitly and specifically authorized by the Company’s Chief Executive Officer(the “CEO”) and agreed to by the Consultant, (b) enter the premises of theCompany or any of its subsidiaries or communicate with government agencies,labor unions, adverse parties in actual or potential litigation, suppliers,service providers, customers, or employees of the Company or any of itsaffiliates regarding any the business of the Company or any of its affiliatesor the Consultant’s employment or directorship status without the express writtenauthorization of the CEO or as otherwise required by law or in a proceeding toenforce this Agreement, and (c) incur any financial or legal obligation orliability on behalf of or binding upon the Company or any of its affiliates. TheConsultant agrees that he will notify the Company of all pertinent facts if heis contacted by any government agency with reference to the business of theCompany or any of its affiliates, or by any person contemplating or maintainingany claim or legal action against the Company or any of its affiliates, or byany agent or attorney of such person.

 

2.             Term. This Agreement shall be effective as of theEffective Date and shall continue through the six month anniversary of theEffective Date. The Consultant’s period of services under this Agreement ishereinafter referred to as the “Consulting Term.”

 

3.             Compensation. During the Consulting Term, theCompany shall pay to the Consultant for his services hereunder a monthlyconsulting fee in the amount of $23,830, with the first monthly payment due 7days after the Effective Date, and subsequent monthly payments due every 30days thereafter until the end of the Consulting Term. During the ConsultingTerm, consistent with past practice, (a) the Company shall provide theConsultant with reasonable access to communications equipment and services(i.e. a blackberry and personal computer connected to the Company’s network),and (b) so long as she is employed by the Company, Carol Maunakea shall bereasonably available, consistent with her other duties to 

 

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serve as the Consultant’s assistant. The Consultantshall be reimbursed in accordance with the Company’s applicable policies andprocedures for any ordinary, necessary and reasonable business expenses whichare approved in advance by the CEO. The Company shall not be obligated toprovide the Consultant with any retirement, welfare, or other fringe benefitsunder this Agreement.

 

4.             Amendments. This Agreement may not be amended orchanged except by the written agreement of the Company and the Consultant.

 

5.             Not an Employment Contract. This Agreement is nota contract of employment between the Consultant and the Company, and theConsultant and the Company hereby agree and acknowledge that this Agreementdoes not impose any obligation on the Company to offer employment to theConsultant at any time.

 

6.             Governing Law. This Agreement, and any disputearising under or relating to any provision of this Agreement, shall be governedby and construed in accordance with the laws of the state of Delaware.

 

7.             Counterparts. This Agreement may be executed inany number of counterparts, each of which when so executed shall be deemed tobe an original, and such counterparts together shall constitute and be one andthe same instrument.

 

8.             Relationship of the Parties. The Company and theConsultant agree that under this Agreement, the Consultant is an independentcontractor who has contracted with the Company. The Company shall not withholdor in any way be responsible for the payment of any federal, state, or localincome or occupational taxes, FICA taxes, FUTA, unemployment compensation, orworkers’ compensation contributions, vacation pay, sick leave, retirementbenefits, or any other fringe benefits or payments for or on behalf of theConsultant. All such payments, withholdings and benefits are the soleresponsibility of the Consultant and the Consultant hereby indemnifies andholds the Company harmless from any and all loss, damage or liability arisingwith respect to such payments, withholdings and benefits.

 

[*signature page follows*]

 

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The parties hereto haveexecuted this Agreement as of the date and year first above written.

 

HAWAIIAN TELCOM HOLDCO,INC.

 

 
| By:                   | /s/ Alan M.  Oshima                   |   |
|-----------------------|---------------------------------------|--------|
|                  |                                  |   |
| Its:                  | SVP, General  Counsel & Secretary |   |
|                  |                                  |
|                  |                                  |
| CONSULTANT            |                                  |
|                  |                                  |
| /s/  Michael S. Ruley |                                  |
|                  |                                  |
| Michael S. Ruley      |                                  |
|                       |                                       |        |  |

 

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