Exhibit
10.18


 





 


December 21, 2009


 


Mr. Robert F. Reich


1177 Bishop Street


Honolulu, HI 96813


 


Dear Bob:


 


You and Hawaiian Telcom
Communications, Inc. (the “Company”) signed an amendment dated May 13,
2008 (the “Amendment”) to your employment agreement dated March 5,
2007 (the “Employment Agreement”). 
In order to provide clarity regarding the parties’ intent, you and the
Company have agreed to modify the Amendment as set forth herein. Except as
otherwise amended in this letter agreement, the Employment Agreement, as
amended by the Amendment, remains in full force and effect.


 


1.              Paragraph  7 of the Amendment is hereby amended and restated in
its entirety as follows:


 


“7.
(a).             In the event
that your employment is terminated by the Company without Cause (and such
termination constitutes a “separation from service” as defined in Treasury
Regulation 1.409A-1(h) (“Separation”)), the Company shall:


 


(i) continue to pay, in
accordance with normal payroll practices, your base salary for the period
beginning on the date of Separation and ending on the earliest to occur of (a) the
one year anniversary of the date of Separation, 
(b) the first date you violate any covenant contained in the
Hawaiian Telcom Business Protection Agreement referred to in Paragraph 8 below,
(c) the fifth (5th) day following the date of Separation in the event the
Company has not received by that date your executed general waiver and release
of claims in the Company’s customary form and voluntary waiver of any review
period, (d) the first date of your revocation of the general waiver and
release, or (e) the first date of your employment or consultancy (whether
as an employee, independent contractor, or otherwise) with another company
based on more than twenty (20) hours per week (and you agree to inform the
Company immediately upon your becoming such an employee or consultant with
another company), such period referred to as the “Salary Continuation Period”;


 


(ii) pay
you a pro-rated bonus for the year of Separation, which except for the pro-ration
shall be pursuant to the terms and conditions set forth in the Bonus Plan and
shall be payable at such time as bonuses are paid to other executive officers
who 


 

















 


participate therein;


 


(iii) continue
coverage (at the Company’s expense), for the period set forth in clause (i) above,
for you and any dependents under all Company group health benefit plans in
which you and any dependents were entitled to participate immediately prior to
the date of Separation, excluding Exec-U-Care or similar supplemental coverage
policies for senior executives;


 


(iv) reimburse
you, in the event such termination occurs prior to the third anniversary of the
Effective Date of your Employment Agreement, for all reasonable relocation
expenses incurred by you due to your relocation back to the mainland United
States at a location of your choice, in accordance with the Company’s
relocation plans and policies and subject to a limit of the lesser of (a) 30%
of your annual base salary and (b) $100,000;


 


(v) reimburse
you, in the event such termination occurs prior to the third anniversary of the
Effective Date of your Employment Agreement, for any broker commissions (up to
6%) paid on the sale of your home in Hawaii in connection with the relocation
described in clause (iv) above, offset by any amount that the selling
price exceeds your cost basis in the home.


 


With
respect to any reimbursements paid to you pursuant to clauses (iv) and (v) above
which are taxable to you, you will be entitled to receive an additional payment
from the Company in an amount such that, after payment by you of all income
taxes imposed on the reimbursements and the additional payment, you would
retain an amount equal to such reimbursements. 
In the event the Company modifies the Salary Continuation Period or other
terms of the severance benefits applicable to Senior Vice Presidents of the
Company, the severance benefits described in this Paragraph 7 will be modified
on a consistent basis.


 


7.
(b).                  This Paragraph
7(b) shall apply only to the extent that any payment under this Agreement
constitutes “nonqualified deferred compensation” for purposes of Section 409A
of the Internal Revenue Code of 1986, as amended (the “Code”) and not to
payments that are exempt from Section 409A of the Code (due to, for
example, application of the short term deferral rule or separation pay
exceptions).  To the extent any such
payment of any amount constitutes “nonqualified deferred compensation” and you
are deemed on the date of termination to be a “specified employee” within the
meaning of Code Section 409A(a)(2)(B), any amounts to which you are
entitled under this Paragraph 7 that constitute “non-qualified deferred
compensation” under Code Section 409A and would otherwise be payable prior
to the earlier of (i) the 6-month anniversary of your Separation and (ii) the
date of your death (the “Delay Period”) shall instead be paid in a lump
sum immediately upon (and not before) the expiration of the Delay Period to the
extent such delay is required under Section 409A of the Code.  Any lump sum payment of delayed payments
under this Paragraph 7(b) shall be paid with interest to reflect the
period of delay, with such interest to accrue at the prime rate in effect at
Citibank, N.A. at the time of the Separation. 
Any remaining payments due under the Agreement shall be paid as
otherwise provided herein.  The
determination of whether you are a “specified employee” for purposes of Code Section 409A(a)(2)(B)(i) as
of the time of Separation shall made by the


 


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Company
in accordance with the terms of Code Section 409A and applicable guidance
thereunder (including without limitation Treasury Regulation Section 1.409A-1(i) and
any successor provision thereto).”


 


This amendment to the
Employment Agreement may be executed in two or more counterparts, each of which
will be deemed an original, but all of which together will constitute one and
the same instrument.  This letter
agreement shall be governed and construed under the internal laws of the State
of Hawaii and may be executed in several counterparts.


 


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  Very truly yours,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ William Chung

  
	
   

  	
   

  	
  William Chung

  
	
   

  	
   

  	
  VP – Human
  Resources & Labor Relations

  
	
   

  	
   

  	
  December 29, 2009

  
	
   

  	
   

  	
   

  
	
  Agreed and Accepted:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Robert F. Reich

  	
   

  	
   

  
	
  Robert F. Reich 

  	
   

  	
   

  
	
  December 29, 2009

  	
   

  	
   

  



 


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