Exhibit 10.15


 


Privileged & Confidential


 


Amended
and Restated Employment Agreement


 


This Amended and Restated Employment
Agreement (the “Agreement”) dated as of April 5, 2010 and effective
as of the Emergence Date (as defined below), is made by and between Hawaiian
Telcom Holdco, Inc. (together with any successor thereto, the “Company”)
and Eric K. Yeaman (the “Executive”).


 


RECITALS


 


A.            The Company and the Executive are parties to an
Employment Agreement dated May 9, 2008 and effective June 16, 2008
pursuant to which the Executive serves as President and Chief Executive Officer
of the Company (the “Prior Agreement”); and


 


B.            The Company and the Executive desire to amend and
restate the Prior Agreement in its entirety as set forth herein.


 


AGREEMENT


 


NOW, THEREFORE, in consideration of the
foregoing and of the respective covenants and agreements set forth below the
parties hereto agree as follows:


 


1.             Certain
Definitions.


 


(a)           “Affiliate” shall
mean, with respect to any Person, any other Person directly or indirectly
controlling, controlled by, or under common control with, such Person where “control”
shall have the meaning given such term under Rule 405 of the Securities
Act of 1933, as amended.


 


(b)           “Annual Base Salary”
shall have the meaning set forth in Section 3(a).


 


(c)           “Board” shall mean
the Board of Directors of the Company.


 


(d)           The Company shall have “Cause”
to terminate the Executive’s employment hereunder upon:


 


(i)            the Executive’s failure to
follow a legal order of the Board, other than any such failure resulting from
the Executive’s Disability, and such failure is not remedied within 30 days
after receipt of written notice;


 


(ii)           Executive’s gross or willful
misconduct in the performance of duties that causes or is reasonably likely to
cause damage to the Company;


 


(iii)          Executive’s conviction of a
felony or crime involving material dishonesty or moral turpitude;


 


(iv)          Executive’s fraud or
personal dishonesty involving the Company’s assets; or


 


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(v)           the Executive’s unlawful use
(including being under the influence) or possession of illegal drugs on the
Company’s premises or while performing the Executive’s duties and
responsibilities under this Agreement.


 


(e)           “Change in Control”
shall mean a change in ownership or control of the Company effected through a
transaction or series of transactions (other than an offering of Common Stock
to the general public through a registration statement filed with the
Securities and Exchange Commission) whereby any “person” or related “group” of “persons”
(as such terms are used in Sections 13(d) and 14(d)(2) of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (other
than the Company, any of its subsidiaries, an employee benefit plan maintained
by the Company or any of its subsidiaries, or a “person” that, prior to such
transaction, directly or indirectly controls, is controlled by, or is under
common control with, the Company) directly or indirectly acquires beneficial
ownership (within the meaning of Rule 13d-3 under the Exchange Act) of
securities of the Company possessing more than fifty percent (50%) of the total
combined voting power of the Company’s securities outstanding immediately after
such acquisition; provided, that the transaction or event described in this
subsection constitutes a “change in control event,” as defined in Treasury
Regulation §1.409A-3(i)(5).


 


(f)            “Common Stock” shall
mean the common stock, par value $0.01 per share, of the Company.


 


(g)           “Company” shall have
the meaning set forth in the preamble hereto.


 


(h)           “Compensation Committee”
means the Compensation Committee of the Board.


 


(i)            “Date of Termination”
shall mean (i) if the Executive’s employment is terminated by his death,
the date of his death; or (ii) if the Executive’s employment is terminated
pursuant to Section 4(a)(ii) — (vi) either the date
indicated in the Notice of Termination or the date specified by the Company
pursuant to Section 4(b), whichever is earlier.


 


(j)            “Disability” shall
mean the absence of the Executive from the Executive’s duties to the Company on
a full-time basis for a total of six months during any 12-month period as a
result of incapacity due to mental or physical illness which is determined to
be reasonably likely to extend beyond the completion of the Term and which
determination is made by a physician selected by the Executive and acceptable
to the Company or the Company’s legal representative (such agreement as to
acceptability not to be withheld unreasonably). 
A Disability shall not be “incurred” hereunder until, at the earliest,
the last day of the sixth month of such absence.


 


(k)           “Executive” shall
have the meaning set forth in the preamble hereto.


 


(l)            “Executive Bonus Plan”
shall have the meaning set forth in Section 3(b).


 


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(m)          (i)            The Executive shall have “Good
Reason” to resign his employment during the six month period which follows
the occurrence of any of the following:


 


(A)          failure of the Company to
continue the Executive in the position of President and Chief Executive
Officer;


 


(B)           a material diminution in the
nature or scope of the Executive’s responsibilities, duties or authority;


 


(C)           the Company’s material
breach of this Agreement;


 


(D)          the relocation of the
Executive’s principal office, without his consent, to a location that is in
excess of 100 miles from Honolulu, Hawaii; or


 


(E)           failure of the Company to
make any material payment or provide any material benefit in accordance with
this Agreement.


 


(ii)           The Executive may not resign
his employment for Good Reason unless:


 


(A)          the Executive provided the
Company with at least 30 days prior written notice of his intent to resign for
Good Reason (which notice must be provided within 90 days following the
occurrence of the event(s) purported to constitute Good Reason); and


 


(B)           the Company has not remedied
the alleged violation(s) within the 30-day period.


 


(n)           “Inventions” shall
have the meaning set forth in Section 8.


 


(o)           “Notice of Termination”
shall have the meaning set forth in Section 4(b).


 


(p)           “Term” shall have the
meaning set forth in Section 2(b).


 


2.             Employment.


 


(a)           The Company shall employ the
Executive and the Executive shall enter the employ of the Company, for the
period set forth in Section 2(b), in the position set forth in Section 2(c),
and upon the other terms and conditions herein provided.


 


(b)           The initial term of
employment under this Agreement (the “Initial Term”) shall be for the
period beginning on the effective date of the Company’s emergence from Chapter
11 bankruptcy proceedings (the “Emergence Date”) and ending on the
fourth anniversary thereof, unless earlier terminated as provided in Section 4.  The employment term hereunder may be extended
by the written request of the Company no later than ninety (90) days prior to
the expiration of the Initial Term (any such extension period when combined
with the Initial Term shall be referred to herein as the “Term”).


 


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(c)           Position and Duties.


 


(i)            The Executive shall serve as
President and Chief Executive Officer of the Company and those subsidiaries of
the Company set forth on Exhibit A hereto and shall have the authorities
duties and responsibilities customarily commensurate with such position and
such additional customary responsibilities, duties and authority, as may from
time to time be reasonably assigned to the Executive by the Board. The
Executive shall report to the Board.  The
Executive shall devote his full working time, attention and efforts to the
business and affairs of the Company and its subsidiaries.  The Executive agrees to observe and comply
with the Company’s rules and policies as adopted by the Company from time
to time.  During the Term, it shall not
be a violation of this Agreement for the Executive to (i) serve on
industry trade, civic or charitable boards or committees; (ii) deliver
lectures or fulfill speaking engagements; or (iii) manage personal
investments, as long as such activities do not materially interfere with the
performance of the Executive’s duties and responsibilities to the Company.  The Executive shall be permitted to serve on
for-profit corporate boards of directors and advisory committees if approved in
advance by the Board, which approval shall not unreasonably be withheld.


 


(ii)           As
of the Emergence Date, the Company shall cause the Executive to be appointed
or elected (if not already so appointed or elected) to the Board and the boards
of directors of those subsidiaries of the Company set forth on Exhibit A
hereto.  During the Term, the Board shall
propose the Executive for re-election to the Board, subject to the limitations
of applicable law.


 


3.             Compensation
and Related Matters.


 


(a)           Annual Base Salary. During the
Term, the Executive shall receive a base salary at a rate of $696,000 per
annum, which shall be paid in accordance with the customary payroll practices
of the Company, subject to any increase as determined at least annually by the
Compensation Committee in its sole discretion (the “Annual Base Salary”). Annual Base Salary
may be increased, but not decreased, from time to time by the Board.


 


(b)           Annual Performance Bonus.  During the Term, the
Executive will participate in an annual performance-based bonus plan (“Executive
Bonus Plan”) established by the Compensation Committee at a target and
maximum level of 100% of the Executive’s Annual Base Salary paid in the
applicable year (“Target Level”).  Such bonus (the “Annual Bonus”) shall
be payable at such time as bonuses are paid to other senior executive officers
who participate therein.  The actual
amount, if any, of such Annual Bonus for each such calendar year shall be
determined based upon the Company’s attainment of reasonable performance goals
approved by the Board in its sole discretion. 
Each such Annual Bonus shall


 


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be payable on such date as
is determined by the Board after the Board determines that the performance
goals have been met; provided that such bonus payment date shall be in the
calendar year following the calendar year to which the Annual Bonus relates
(but in no event later than March 31 of such following calendar
year).  Notwithstanding any other
provision of this Section 3(b), no bonus shall be payable pursuant
to this Section 3(b) unless the Executive remains continuously
employed with the Company through the applicable bonus payment date or his
employment has been terminated after the close of the applicable calendar year
pursuant to Sections 4(a)(i), (ii), (iv), or (v).


 


(c)           One-Time Bonus.  Within thirty (30) days following the
Emergence Date, the Executive shall receive from the Company a one-time cash
bonus in an amount equal to $600,000, subject to applicable withholding
taxes.  The foregoing one-time bonus
payment shall not have any impact on any other compensation payable to the
Executive by the Company hereunder and shall not result in the offset of any
amount otherwise payable as an Annual Bonus hereunder.  In partial consideration for
the one-time bonus payment granted pursuant to this Section 3(c),  the Executive hereby acknowledges that the change in
ownership of the Company as a result of the Company entering into and emerging
from Chapter 11 bankruptcy proceedings did not and will not constitute a “Change
in Control” or “Exit Event,” and did not and will not alone entitle the
Executive to a “Realization Bonus” (each, as defined
in the Prior Agreement) pursuant to the provisions of Section 3(c) of
the Prior Agreement.


 


(d)           Equity Awards.


 


(i)            Time-Based Award.  Within thirty (30) days following the
Emergence Date, the Company shall grant the Executive restricted stock units (“RSUs”)
relating to the Common Stock valued at $1.2 million  (or 0.8% of the Company’s outstanding Common Stock on a fully
diluted basis) as of the Emergence Date, which shall become vested in equal
annual installments on each of the first, second, third and fourth
anniversaries of the Emergence Date, subject to the Executive’s continued
employment with the Company on each applicable vesting date, except as provided
in Section 3(d)(iii) (the “Time-Based RSUs”).


 


(ii)           Performance-Based Award.  Within thirty (30) days following the
Emergence Date, the Company shall grant the Executive RSUs in the Common Stock
valued at $1.2 million  (or 0.8% of
the Company’s outstanding Common Stock on a fully diluted basis) as of the
Emergence Date, which shall become vested based on the achievement of
performance goals to be established each year by the Compensation Committee in
its reasonable, good-faith discretion in consultation with the Executive,
subject to the Executive’s continued employment with the Company on each
applicable vesting date, except as provided in Section 3(d)(iii) (the
“Performance-Based RSUs”).  Shares
of Common Stock delivered in respect of vested Performance-Based RSUs shall be
subject to


 


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transfer restrictions, which
shall lapse in equal annual installments on each of the first three
anniversaries of the date on which such Performance-Based RSUs became vested,
except as provided in Section 3(d)(iii).


 


(iii)          Accelerated Vesting of
Awards.


 


(A)          Without Cause; Good Reason;
Death or Disability.  Subject to
the provisions of Section 3(d)(iii)(B) hereof, upon a
termination of the Executive’s employment by the Company without Cause, by the
Executive for Good Reason or as a result of the Executive’s death or Disability
(I) the outstanding and unvested Time-Based RSUs scheduled to become
vested on the anniversary of the Emergence Date next following the date of
termination shall become fully vested, to the extent not already vested due to
a Change in Control pursuant to Section 3(d)(iii)(B) hereof,
as of the date of termination, and (II) the outstanding and unvested
Performance-Based RSUs scheduled to become vested on the vesting date next
following the date of termination shall remain outstanding and shall vest (and
all transfer restrictions thereon shall lapse, including transfer restrictions
on the shares of Common Stock previously issued upon vesting of such RSUs) or
be forfeited based on actual performance (provided that upon a termination of
employment due to death or Disability, Performance-Based RSUs shall vest on the
same basis as Time-Based RSUs as provided in Section 3(d)(iii)(A)(I),
along with the lapsing of any applicable transfer restrictions (including
transfer restrictions on the shares of Common Stock previously issued upon
vesting of such RSUs).


 


(B)           Change in Control.  Upon the occurrence of a Change in Control
while the Executive is employed by the Company, (I) unvested
Performance-Based RSUs shall become fully vested, subject to the achievement of
transaction performance metrics set by the Compensation Committee, and all
transfer restrictions thereon shall lapse (including transfer restrictions on
the shares of Common Stock previously issued upon vesting of such RSUs), and (II) a
pro rata portion of the unvested Time-Based RSUs shall become vested in an
amount equal to (x) the number of Time-Based RSUs scheduled to vest in the
annual installment for the year in which the Change in Control occurs,
multiplied by (y) the ratio, the numerator of which is the number of days
that have elapsed from the immediately preceding anniversary of the Emergence
Date (or the Emergence Date, if the Change in Control occurs less than one year
following the Emergence Date) to the date of the Change in Control and the
denominator of which is 365.  Any
unvested Time-Based RSUs remaining outstanding upon a Change in Control (after
taking into account the provisions of


 


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Section 3(d)(iii)(B)(II)) shall be
immediately forfeited upon the Change in Control.


 


(iv)          Payment of Awards.  Shares of Common Stock underlying vested RSUs
shall be delivered to the Executive within thirty (30) days following the
applicable vesting date.


 


(v)           Forfeiture.  Unvested RSUs (determined after any
acceleration as provided in Section 3(d)(iii)) generally shall be
forfeited upon a termination of employment for any reason.


 


(vi)          Award Agreements.  The Time-Based RSUs and the Performance-Based
RSUs shall be granted under an equity plan adopted by the Company and shall be
evidenced by the Company’s standard form of award agreement for such equity
awards; provided that the terms and conditions applicable to such RSUs shall be
consistent with the provisions of this Section 3(d), shall not
contain restrictive covenant provisions or forfeiture or similar conditions
that are broader or more restrictive than the provisions contained in this
Agreement, and shall otherwise be no less favorable than the terms and
conditions of similar equity awards granted to the other most senior executive
officers of the Company.


 


(e)           Benefits.  The Executive shall be entitled to
participate in all employee benefit plans, programs and arrangements of the
Company which are applicable to the senior officers of the Company at a level
commensurate with the Executive’s position, including without limitation health
insurance and retirement programs.


 


(f)            Expenses.  During the Term, the Company shall reimburse
the Executive for all reasonable travel and other business expenses incurred by
him in the performance of his duties to the Company in accordance with the
Company’s expense reimbursement policy as in effect from time to time.


 


(g)           Vacation.  During the Term, the Executive shall be
entitled to five weeks paid vacation each calendar year.  Any vacation shall be taken at the reasonable
and mutual convenience of the Company and the Executive.  Paid vacation for a calendar year that has
not been taken by Executive during such calendar year shall carry over to any
subsequent period up to a maximum accumulated ten weeks.


 


4.             Termination.


 


The Executive’s employment hereunder may be
terminated by the Board or the Executive, as applicable, without any breach of
this Agreement only under the following circumstances:


 


(a)           Circumstances.


 


(i)            Death.  The Executive’s employment hereunder shall
terminate upon his death.


 


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(ii)           Disability.  If the Executive has incurred a Disability,
the Board may give the Executive written notice of its intention to terminate
the Executive’s employment.  In that
event, the Executive’s employment with the Company shall terminate effective on the 30th day
after receipt of such notice by the Executive, provided that within the 30 days
after such receipt, the Executive shall not have returned to full-time
performance of his duties.


 


(iii)          Termination for Cause. The Board may
terminate the Executive’s employment for Cause.


 


(iv)          Termination without Cause.  The Board may terminate the Executive’s
employment without Cause.


 


(v)           Resignation for Good Reason.  The Executive may resign his employment for
Good Reason.


 


(vi)          Resignation without Good
Reason.  The Executive may resign his
employment without Good Reason.


 


(b)           Notice of Termination.  Any termination of the Executive’s employment
by the Company or by the Executive under this Section 4 (other than
termination pursuant to paragraph (a)(i)) shall be communicated by a written
notice to the other party hereto indicating the specific termination provision
in this Agreement relied upon, setting forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Executive’s
employment under the provision so indicated, and specifying a Date of
Termination which, if submitted by the Executive, shall be at least 30 days
following the date of such notice (a “Notice of Termination”); provided,
however, that the Company may, in its sole discretion, change the Date
of Termination to any date following the Company’s receipt of the Notice of
Termination.  A Notice of Termination
submitted by the Company may provide for a Date of Termination on the date the
Executive receives the Notice of Termination, or any date thereafter elected by
the Company in its sole discretion.  The
failure by the Executive or the Company to set forth in the Notice of
Termination any fact or circumstance which contributes to a showing of Cause or
Good Reason shall not waive any right of the Executive or the Company hereunder
or preclude the Executive or the Company from asserting such fact or circumstance in enforcing
the Executive’s or the Company’s rights hereunder.


 


(c)           Company Obligations upon
Termination.  Subject to Section 5,
upon termination of the Executive’s employment, the Executive (or the Executive’s
estate) shall be entitled to receive, within 30 days following the Date of
Termination (or such earlier time as may be required by applicable law), a
lump-sum cash payment in an amount equal to the Executive’s Annual Base Salary
through the Date of Termination not theretofore paid, any Annual Bonus if
declared or earned but not yet paid for a completed calendar year, any expenses
owed to the Executive, and


 


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any accrued vacation pay
owed to the Executive.  In addition, the
Executive shall be entitled to any and all amounts and benefits arising from
the Executive’s participation in the employee benefit plans, programs or
arrangements of the Company, which amounts and benefits shall be payable in
accordance with the terms and conditions of such employee benefit plans,
programs or arrangements.


 


5.             Severance
Payments.


 


(a)           Termination due to death,
Disability, for Cause or resignation without Good Reason.  If the Executive’s employment shall terminate
pursuant to Sections 4(a)(i), (ii), (iii) or (vi), the Executive
shall not be entitled to any severance payment or benefits (other than as
expressly provided for herein (including under Sections 3(d)(iii) and
4(c))).


 


(b)           Termination without Cause or
resignation for Good Reason.  If the Executive’s employment is terminated
by the Company without Cause pursuant to Section 4(a)(iv) or
the Executive resigns his employment for Good Reason pursuant to Section 4(a)(v),
the Company shall, so long as Executive executes and does not revoke a general
release in the Company’s customary form (the “Release”), pay the
Executive a lump-sum cash payment in an amount equal to two times the sum of
the Executive’s Annual Base Salary and his Target Level Annual Bonus.  Additionally, if the Executive is employed on
the last day of the calendar year and his employment is terminated by the
Company without Cause pursuant to Section 4(a)(iv) or the
Executive resigns his employment for Good Reason pursuant to Section 4(a)(v) following
such date but before the date of payment of the Annual Bonus and the Executive
has not yet been paid his Annual Bonus, the Executive’s earned but not yet paid
Annual Bonus shall be added to the lump-sum cash payment described in the
preceding sentence.  Subject to the
provisions of Section 5(c) and 20(b), the foregoing
payments described in this Section 5(b) will be made within 30
days following the Date of Termination, but following the expiration of
Executive’s period to revoke the Release. 
In addition to the foregoing, the Executive shall retain the right to
the benefits conferred under Section 3(d)(iii).


 


(c)           Notwithstanding any
provision to the contrary in this Agreement: (i) no amount shall be payable
pursuant to Section 5(b) unless the Executive’s termination of
employment constitutes a “separation from service” within the meaning of Section 1.409A-1(h) of
the Department of Treasury Regulations. 
If the Executive is deemed at the time of his separation from service to
be a “specified employee” for purposes of Section 409A(a)(2)(B)(i) of
the Internal Revenue Code of 1986, as amended (the “Code”), to the
extent delayed commencement of any portion of the termination benefits to which
Executive is entitled under this Agreement is required in order to avoid a prohibited distribution
under Section 409A(a)(2)(B)(i) of the Code, such portion of Executive’s
termination benefits shall not be provided to Executive prior to the earlier of
(i) the expiration of the six-month period measured from the date of the
Executive’s “separation from service” with the Company (as such term is defined
in the Treasury Regulations issued under


 


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Section 409A of the Code) or (ii) the date
of Executive’s death.  Upon the earlier
of such dates, all payments deferred pursuant to this Section 5(c) shall
be paid in cash in a lump-sum to the Executive (together with interest for the
period such payments are deferred pursuant to this Section 5(c),
with such interest to accrue at the prime rate in effect at Citibank, N.A. at
the time of the separation from service), and any remaining payments due under
the Agreement shall be paid as otherwise provided herein.  The determination of whether the Executive is
a “specified employee” for purposes of Section 409A(a)(2)(B)(i) of
the Code as of the time of his separation from service shall made by the
Company in accordance with the terms of Section 409A of the Code and
applicable guidance thereunder (including without limitation Treasury
Regulation Section 1.409A-1(i) and any successor provision thereto).


 


(d)           Survival.  The expiration or termination of the term
shall not impair the rights or obligations of any party hereto, which shall
have accrued prior to such expiration or termination.


 


(e)           Mitigation.  The Executive shall have no duty to mitigate
the amount of any payment provided for hereunder by seeking other employment,
and any income earned by the Executive from other employment or self-employment
shall not result in the offset of any obligations of the Company to the
Executive hereunder.


 


6.             Competition.


 


(a)           The Executive shall not, at any time during the
Executive’s employment with the Company or during the 24-month period following
the later of the expiration of the Term or the Date of Termination, directly or
indirectly engage in, have any equity interest in, or manage or operate any
person, firm, corporation, partnership or business (whether as director,
officer, employee, agent, representative, partner, security holder, consultant
or otherwise) that engages in any business which competes with any business of
the Company or any entity owned by the Company whose financial results are
material to the Company anywhere in the United States provided, however,
that the Executive shall be permitted to acquire a passive stock or equity
interest in such a business provided the stock or other equity interest
acquired is not more than five percent (5%) of the outstanding interest in such
business.  Nothing herein shall prevent
the Executive from engaging in any activity with, or holding any financial
interest in, a non-competitive division, subsidiary or affiliate of an entity
engaged in a business that competes with the Company.


 


(b)           During the Executive’s employment with the Company and
for the 24-month period following the later of the expiration of the Term or
the Date of Termination, the Executive will not, except in the performance of
his duties for the Company, and will not knowingly permit any of his affiliates
to, directly or indirectly, recruit or otherwise solicit or induce
any non-clerical employee, customer, subscriber or supplier of the Company to
terminate its employment or arrangement with the Company, otherwise change its
relationship with the


 


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Company, or establish any
relationship with the Executive or any of his affiliates for any business
purpose that is prohibited by subsection (a) above.  Nothing herein shall prevent the Executive
from serving as a reference.


 


(c)           In the event the terms of
this Section 6 shall be determined by any court of competent
jurisdiction to be unenforceable by reason of its extending for too great a
period of time or over too great a geographical area or by reason of its being
too extensive in any other respect, it will be interpreted to extend only over
the maximum period of time for which it may be enforceable, over the maximum
geographical area as to which it may be enforceable, or to the maximum extent
in all other respects as to which it may be enforceable, all as determined by
such court in such action.


 


(d)           As used in this Section 6,
the term “Company” shall include the Company, its parent and any of its direct
or indirect subsidiaries whose financial results are material to the Company.


 


7.             Nondisclosure
of Proprietary Information.


 


(a)           Except as required in the
faithful performance of the Executive’s duties hereunder or pursuant to Section 7(c),
the Executive shall, in perpetuity, maintain in confidence and shall not
directly, indirectly or otherwise, use, disseminate, disclose or publish, or
use for his benefit or the benefit of any person, firm, corporation or other
entity any confidential or proprietary information or trade secrets of or
relating to the Company, including, without limitation, information with
respect to the Company’s operations, processes, products, inventions, business
practices, finances, principals, vendors, suppliers, customers, potential
customers, marketing methods, costs, prices, contractual relationships,
regulatory status, compensation paid to employees or other terms of employment,
or deliver to any person, firm, corporation or other entity any document,
record, notebook, computer program or similar repository of or containing any
such confidential or proprietary information or trade secrets.  The parties hereby stipulate and agree that
as between them the foregoing matters are important, material and confidential
proprietary information and trade secrets and affect the successful conduct of
the businesses of the Company (and any successor or assignee of the Company).


 


(b)           Upon termination of the
Executive’s employment with the Company for any reason, the Executive will
promptly deliver to the Company all correspondence, drawings, manuals, letters,
notes, notebooks, reports, programs, plans, proposals, financial documents, or
any other documents concerning the Company’s customers, business plans,
marketing strategies, products or processes that are in his possession, custody
or control.  The Executive shall be
permitted to retain his rolodex (and similar address and telephone
directories).


 


(c)           The Executive may respond to
a lawful and valid subpoena or other legal process but shall:  (i) give the Company the earliest
reasonably possible notice thereof, (ii)


 


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as much reasonably in
advance of the return date as possible, make available to the Company and its
counsel the documents and other information sought, and (iii) reasonably
assist (the “Assistance”) such counsel in resisting or otherwise
responding to such process.  The Company
shall reimburse the Executive for all reasonable expenses he incurs in
providing such Assistance. 
Notwithstanding Section 7(a), the Executive may use or
disclose information that is public knowledge.


 


(d)           As used in this Section 7,
the term “Company” shall include the Company, its parent and any of its direct
or indirect subsidiaries.


 


8.             Inventions.


 


All rights to discoveries, inventions,
improvements and innovations (including all data and records pertaining
thereto) directly related to the Company’s business, whether or not patentable,
copyrightable, registrable as a trademark, or reduced to writing, that the
Executive may discover, invent or originate during the Term, either alone or
with others and whether or not during working hours or by the use of the
facilities of the Company (“Inventions”), shall be the exclusive
property of the Company.  The Executive
shall promptly disclose all Inventions to the Company, shall execute at the
request of the Company any assignments or other documents the Company may deem
necessary to protect or perfect its rights therein, and shall assist the
Company, at the Company’s expense, in obtaining, defending and enforcing the
Company’s rights therein.  The Executive
hereby appoints the Company as his attorney-in-fact to execute on his behalf
any assignments or other documents deemed necessary by the Company to protect
or perfect its rights to any Inventions.


 


9.             Non-Disparagement.


 


The Executive agrees not to disparage the Company, any of
its products or practices, or any of its directors, officers, agents,
representatives, stockholders or affiliates, either orally or in writing, at
any time.  The Company agrees to instruct
its executives and the members of its Board not to disparage the Executive,
either orally or in writing, at any time. 
The foregoing provisions of this Section 9 shall not
preclude any party from giving truthful testimony in any proceeding or
otherwise complying with applicable law.


 


10.          Injunctive
Relief.


 


It is recognized and acknowledged by the Executive that
a breach of the covenants contained in Sections 6, 7, 8 and 9
will cause irreparable damage to Company and its goodwill, the exact amount of
which will be difficult or impossible to ascertain, and that the remedies at
law for any such breach will be inadequate. 
Accordingly, the Executive agrees that in the event of a breach of any
of the covenants contained in Sections 6, 7, 8 and 9, in addition
to any other remedy which may be available at law or in equity, the Company
will be entitled to specific performance and injunctive relief.


 


12

















 


11.          Assignment
and Successors.


 


The Company may assign its rights and
obligations under this Agreement to any entity, including any successor to all
or substantially all of the assets of the Company, by merger or otherwise, and
may assign or encumber this Agreement and its rights hereunder as security for
indebtedness of the Company and its affiliates, provided said successor entity
assumes all of the obligations of the Company hereunder.  The Executive may not assign his rights or
obligations under this Agreement to any individual or entity, except his estate
upon his death.  This Agreement shall be
binding upon and inure to the benefit of the Company, the Executive and their
respective successors, assigns, personnel and legal representatives, executors,
administrators, heirs, distributees, devisees, and legatees, as applicable.


 


12.          Governing
Law.


 


This Agreement shall be governed, construed,
interpreted and enforced in accordance with the substantive laws of the state
of New York, without reference to the principles of conflicts of law of New
York or any other jurisdiction, and where applicable, the laws of the United States.


 


13.          Notices.


 


Any notice, request, claim, demand, document
and other communication hereunder to any party shall be effective upon receipt
(or refusal of receipt) and shall be in writing and delivered personally or
sent by telex, telecopy, overnight courier service or certified or registered
mail, postage prepaid, as follows:


 


(a)           If to the Company:


 


Hawaiian Telcom Holdco, Inc.  

1177 Bishop Street

Honolulu, Hawaii 96813

Attention: General Counsel

Fax: 808-546-8982


 


and
a copy to:


 


Kirkland & Ellis LLP  

601 Lexington Avenue

New York, New York 10022

Attention:  Paul M. Basta 

Fax:  212.446.6460


 


(b)           If to the Executive:


 


Eric
K. Yeaman 

c/o Hawaiian Telcom Holdco, Inc.


1177 Bishop Street

Honolulu, Hawaii 96813


 


13

















 


or at any other
address as any party shall have specified by notice in writing to the other
party.


 


14.          Counterparts.


 


This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original, but all of which
together will constitute one and the same Agreement.


 


15.          Entire
Agreement.


 


The terms of this Agreement are intended by
the parties to be the final expression of their agreement with respect to the
employment of the Executive by the Company and may not be contradicted by
evidence of any prior or contemporaneous agreement (including, without
limitation, the Prior Agreement).  The
parties further intend that this Agreement shall constitute the complete and
exclusive statement of their terms and that, except as required by applicable
law, no extrinsic evidence whatsoever may be introduced in any judicial,
administrative, or other legal proceeding to vary the terms of this Agreement.


 


16.          Amendments;
Waivers.


 


This Agreement may not be modified, amended,
or terminated except by an instrument in writing, signed by the Executive and a
duly authorized officer of Company.  By
an instrument in writing similarly executed, the Executive or a duly authorized
officer of the Company may waive compliance by the other party or parties with
any provision of this Agreement that such other party was or is obligated to
comply with or perform, provided, however, that such waiver shall
not operate as a waiver of, or estoppel with respect to, any other or
subsequent failure.  No failure to
exercise and no delay in exercising any right, remedy, or power hereunder
preclude any other or further exercise of any other right, remedy, or power
provided herein or by law or in equity.


 


17.          No
Inconsistent Actions.


 


The parties hereto shall not voluntarily
undertake or fail to undertake any action or course of action inconsistent with
the provisions or essential intent of this Agreement.  Furthermore, it is the intent of the parties
hereto to act in a fair and reasonable manner with respect to the interpretation
and application of the provisions of this Agreement.


 


18.          Construction.


 


This Agreement shall be deemed drafted
equally by both the parties.  Its
language shall be construed as a whole and according to its fair meaning.  Any presumption or principle that the
language is to be construed against any party shall not apply.  The headings in this Agreement are only for
convenience and are not intended to affect construction or interpretation.  Any references to paragraphs, subparagraphs,
sections or subsections are to those parts of this Agreement, unless the
context clearly indicates to the contrary. 
Also, unless the context clearly indicates to the contrary, (a) the
plural includes the singular and the singular includes the plural; (b) “and”
and “or” are each used both conjunctively and disjunctively; (c) “any,” “all,”
“each,” or “every” means “any and all,” and “each and every”; (d) “includes”
and “including” are each 


 


14

















 


“without limitation”; (e) “herein,”
“hereof,” “hereunder” and other similar compounds of the word “here” refer to
the entire Agreement and not to any particular paragraph, subparagraph, section
or subsection; and (f) all pronouns and any variations thereof shall be
deemed to refer to the masculine, feminine, neuter, singular or plural as the
identity of the entities or persons referred to may require.


 


19.          Arbitration.


 


In the event that any dispute arises between
the Company and the Executive regarding or relating to this Agreement and/or
any aspect of the Executive’s employment relationship with the Company, AND IN
LIEU OF LITIGATION AND A TRIAL BY JURY, the parties consent to resolve such
dispute through mandatory arbitration before a single arbitrator in New York,
New York to be administered by JAMS in accordance with its rules then in
effect.  Judgment may be entered on the
arbitration award in any court having jurisdiction, provided, however,
that the Company shall be entitled to seek a restraining order or injunction in
any court of competent jurisdiction to prevent any continuation of any
violation of the provisions of Sections 6, 7, 8 or 9 of the
Agreement and the Executive hereby consents that such restraining order or
injunction may be granted without requiring the Company to post a bond.  In the event action is brought to enforce the
provisions of this Agreement pursuant to this Section 19, the
non-prevailing parties shall be required to pay the reasonable attorney’s fees
and expenses of the prevailing parties to the extent determined to be
appropriate by the arbitrator, acting in its sole discretion.  The parties hereby consent to the exclusive
jurisdiction in the state and Federal courts of or in the State of New York for
purposes of seeking such injunctive or equitable relief as set forth
above.  Within 20 days of the closure of
the arbitration record, the arbitrator shall prepare written findings of fact
and conclusions of law.  It is mutually agreed
that the written decision of the arbitrator shall be valid, binding, final and
non-appealable, provided, however, that the parties hereto agree
that the arbitrator shall not be empowered to award punitive damages against
any party to such arbitration.  The
arbitrator shall require the non-prevailing party to pay the arbitrator’s full
fees and expenses or, if in the arbitrator’s opinion there is no prevailing
party, the arbitrator’s fees and expenses will be borne equally by the parties
thereto.


 


20.          Code
Section 409A.


 


(a)           The parties hereto
acknowledge and agree that, to the extent applicable, this Agreement shall be
interpreted in accordance with, and incorporate the terms and conditions
required by, Section 409A of the Code and the Department of Treasury
Regulations and other interpretive guidance issued thereunder.  Notwithstanding any provision of this
Agreement to the contrary, in the event that the Company determines that any
amounts payable hereunder will be immediately taxable to the Executive under Section 409A
of the Code and related Department of Treasury guidance, the Company and the
Executive shall cooperate in good faith to (a) adopt such amendments to
this Agreement and appropriate policies and procedures, including amendments
and policies with retroactive effect, that they mutually determine to be
necessary or appropriate to preserve the intended tax treatment of the benefits
provided by this Agreement, to preserve the economic benefits of this Agreement
to both parties and/or (b) take such other actions as mutually determined
to be necessary or appropriate to exempt the amounts 


 


15





















 


payable hereunder from Section 409A of the Code
or to comply with the requirements of Section 409A of the Code and thereby
avoid the application of penalty taxes thereunder.


 


(b)           To the extent that severance
payments or benefits pursuant to this Agreement are conditioned upon the
execution and delivery by the Executive of a Release, the Executive shall
forfeit all rights to such payments and benefits unless such Release is signed
and delivered (and no longer subject to revocation, if applicable) within sixty
(60) days following the date of the Executive’s termination of employment.  If the Release is executed and delivered and
no longer subject to revocation as provided in the preceding sentence, then the
following shall apply:


 


(i)            To the extent that any such
cash payment or continuing benefit to be provided is not “nonqualified deferred
compensation” for purposes of Section 409A of the Code, then such payment
or benefit shall commence upon the first business day immediately following the
date that the Release is executed, delivered and no longer subject to
revocation (the “Release Effective Date”).  The first such cash payment shall include
payment of all amounts that otherwise would have been due prior to the Release
Effective Date under the terms of this Agreement applied as though such
payments commenced immediately upon the Executive’s termination of employment,
and all payments made thereafter shall continue as provided herein.


 


(ii)           To the extent that any such
cash payment or continuing benefit to be provided is “nonqualified deferred
compensation” for purposes of Section 409A of the Code, then such payments
or benefits shall be made or commence upon the sixtieth (60th) day following the
Executive’s termination of employment. 
The first such cash payment shall include payment of all amounts that
otherwise would have been due prior thereto under the terms of this Agreement
had such payments commenced immediately upon the Executive’s termination of
employment, and all payments made thereafter shall continue as provided herein.


 


(c)           Whenever a payment under
this Agreement specifies a payment period with reference to a number of days,
the actual date of payment within the specified period shall be within the sole
discretion of the Company.


 


21.          Code
Section 280G.


 


(a)           If any payment or benefit
(all such payments and benefits, being hereinafter called “Total Payments”)
received or to be the received by the Executive in connection with a change in
the ownership or effective control of the Company or the ownership of a
substantial portion of the assets of the Company (all within the meaning of Section 280G(b)(2)(A)(i) of
the Code) (whether pursuant to the terms hereof or otherwise) (a “280G Event”)
would not be wholly deductible by the 


 


16

















 


Company or other person
making such payment or providing such benefit as a result of Section 280G
of the Code, then, to the extent necessary to make such portion of the Total
Payments deductible (and after taking into account any reduction in the Total
Payments provided by reason of Section 280G of the Code in such
arrangement), (i) any cash portion of the Total Payments shall first be
reduced (if necessary, to zero), and (ii) all other non-cash Total
Payments shall next be reduced (if necessary, to zero).


 


(b)           The limitation of Section 21(a) shall
not apply to limit the Total Payments if (i) such payments or benefits, or
portion thereof which would cause any of the Total Payments to be subject to
disallowance of deductions under Section 280G of the Code absent
stockholder approval are approved by the stockholders of the Company in a
manner which satisfies the requirements of Code Section 280G(b)(5)(B); or (ii) immediately
prior to the consummation of the 280G Event, any stock of the Company is “readily
tradable on an established securities market or otherwise” (within the meaning
of Section 280G(5)(A)(ii)(I)) or the requirements of Section 280G(5)(A)(ii)(I) are
otherwise not met.


 


(c)           The Company agrees that,
unless the condition of Section 21(b)(ii) is satisfied, it
will submit to the stockholders of the Company for a separate vote a proposal
to approve, in compliance with the requirements of Section 280G(b)(5)(B) of
the Code, the Executive’s conditional right to receive the portion of the Total
Payments otherwise subject to reduction under Section 21(a).  Without limiting the foregoing, the Company
shall recommend to all holders of voting stock that such approval be granted;
provided that if the Company breaches this Section 21(c), then Sections
21(a) and (b) shall be null and void.  For the avoidance of doubt, if the Company does not breach
this Section 21(c), but the Executive’s conditional right to
receive the portion of the Total Payments otherwise subject to reduction under Section 21(a) is
rejected by the stockholders, then Sections 21(a) and (b) shall
continue to apply in full force and effect.


 


22.          Validity;
Enforcement.


 


If any provision of this Agreement is held to
be illegal, invalid or unenforceable under present or future laws effective
during the term of this Agreement, such provision shall be fully severable;
this Agreement shall be construed and enforced as if such illegal, invalid or
unenforceable provision had never comprised a portion of this Agreement; and
the remaining provisions of this Agreement shall remain in full force and
effect and shall not be affected by the illegal, invalid or unenforceable
provision or by its severance from this Agreement.  Furthermore, in lieu of such illegal, invalid
or unenforceable provision there shall be added automatically as part of this
Agreement a provision as similar in terms to such illegal, invalid or
unenforceable provision as may be possible and be legal, valid and enforceable.


 


23.          Withholding.


 


The Company shall be entitled to withhold
from any amounts payable under this Agreement any federal, state, local or
foreign withholding or other taxes or charges which the 


 


17

















 


Company is required to
withhold.  The Company shall be entitled
to rely on an opinion of counsel if any questions as to the amount or
requirement of withholding shall arise.


 


24.          Sole
Employment Agreement.


 


The Executive acknowledges and agrees that he
has taken all actions required under the terms of any prior employment in order
to terminate that employment and that the provisions contained in that
employment agreement, if any, do not bind the Company.


 


25.          Indemnification
and Insurance.


 


The Company shall indemnify the Executive to
the fullest extent permitted by the laws of the State of New York, as in effect
at the time of the subject act or omission, and he will be entitled to the
protection of any insurance policies the Company may elect to maintain
generally for the benefit of its directors and senior executive officers
against all costs, charges and expenses incurred or sustained by him in
connection with any action, suit or proceeding to which he may be made a party
by reason of his being or having been a director, officer or employee of the
Company or any of its subsidiaries or his serving or having served any other
enterprise, plan or trust as a director, officer, employee or fiduciary at the
request of the Company (other than any dispute, claim or controversy arising
under or relating to this Agreement (except for this Section 25)).  The provisions of this Section 25
shall survive any termination of Executive’s employment or any termination of
this Agreement.


 


26.          Employee
Acknowledgement.


 


The Executive acknowledges that he has read
and understands this Agreement, is fully aware of its legal effect, has not
acted in reliance upon any representations or promises made by the Company
other than those contained in writing herein, and has entered into this
Agreement freely based on his own judgment.


 


 [Signature Page Follows]


 


18

















 


IN WITNESS WHEREOF, the parties have executed
this Agreement on the date and year first above written.


 


 


	
   

  	
  COMPANY

  
	
   

  	
   

  
	
   

  	
  Hawaiian
  Telcom Holdco, Inc.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Walter A. Dods, Jr.

  
	
   

  	
  Name:
  Walter A. Dods, Jr.

  
	
   

  	
  Title:
  Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EXECUTIVE

  
	
   

  	
   

  
	
   

  	
  /s/
  Eric K. Yeaman

  
	
   

  	
  Eric
  K. Yeaman

  



 


Employment Agreement Signature Page


 

















 


EXHIBIT
A


 


Hawaiian Telcom Communications Inc.


 


Hawaiian Telcom, Inc.


 


Hawaiian Telcom Services Company, Inc.


 


Hawaiian Telcom Insurance Company, Incorporated


 


A-1