Document:

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:

 

 

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.

 

2

 

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.

 

3

 

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.

 

4

 

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.

 

8

 

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.

 

9

 

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:

  	

   

  	

   

  
			

 

10Exhibit

10.7

 

EMPLOYMENT

AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (“Agreement”), effective as

of April 1, 2002 (the “Effective Date”),

is entered into by and between H. Norman

Davies, Jr.  (the “Employee”) and Hawaiian Airlines, Inc., a

Hawaii corporation (the “Company”).

 

The Company desires to establish its right to services

of the Employee, in the capacity described below, on the terms and conditions

and subject to the rights of termination hereinafter set forth, and the

Employee is willing to accept such employment on such terms and conditions.

 

In consideration of the mutual agreements hereinafter

set forth, the Employee and the Company have agreed and do hereby agree as

follows:

 

1.             EMPLOYMENT

AS EXECUTIVE VICE PRESIDENT - OPERATIONS. 

The Company does hereby employ, engage, and hire the Employee as

Executive Vice President-Operations and the Employee does hereby accept and

agree to such hiring, engagement, and employment. The Employee’s duties during

the Employment Period (defined below) shall be the executive, managerial and

reporting duties as are appropriate for an Executive Vice President- Operations

and such other duties as the Board of Directors of the Company and the Chairman

of the Board or the Chief Executive Officer – President of the Company shall

from time to time prescribe and as provided in the Bylaws of the Company. The

Employee shall report to the Chairman of the Board of the Company or to such

other executive officer as the Chairman shall designate.  The Employee shall devote full time, energy

and skill to the performance of Employee’s duties for the Company and for the

benefit of the Company, reasonable vacations authorized by the Chairman of the

Board and reasonable absences because of illness excepted.  Furthermore, the Employee shall exercise due

diligence and care in the performance of Employee’s duties to the Company under

this Agreement.

 

2.             TERM

OF AGREEMENT.  The term of this

Agreement (“Term”) shall commence

on the Effective Date and shall continue for a period of eighteen (18) months;

provided, however, that on the first day of each calendar month commencing one

month following the Effective Date, the Term shall be extended one additional

month unless either party shall have given written notice to the other party

that it does not wish to extend the Term. 

The period of time commencing on the Effective Date and ending on the

expiration date of the Term, or, if earlier, the date of termination of the

Employee’s employment (“Termination Date”)

under this or any successor agreement shall be referred to as the “Employment Period.”

 

3.             COMPENSATION.

 

(a)           BASE

SALARY.  The Company shall pay the

Employee, and the Employee agrees to accept from the Company, in full payment

of Employee’s services to the Company, a base salary at the rate of TWO HUNDRED

THOUSAND AND NO/100THS DOLLARS ($200,000.00) per year (“Base Salary”), payable

in equal bimonthly installments or at such other time or times as the Employee

and the Company shall agree.  The

Employee’s Base Salary shall be reviewed at least annually by the Company and

may be increased as determined by the Company’s Compensation Committee and/or

the Board of Directors, or as delegated by them, in their sole and absolute

discretion.

 

 

Employment Agreement

H. NORMAN DAVIES, JR.

 

 

(b)           STOCK

OPTIONS.  Subject to action of the

Compensation Committee of the Company’s Board of Directors, Employee shall be

eligible receive grants of options to purchase shares of the Company’s stock

pursuant to the Company’s 1996 Stock Incentive Plan, As Amended.  Any such options shall have a term of ten

years so long as the Employee remains as an employee with the Company, shall

vest ratably on each of the first four anniversaries of the grant date, and

shall be at an exercise price equal to the fair market value of the stock on

the grant date.

 

(c)           PERFORMANCE

BONUS – BOARD OF DIRECTORS DISCRETION. 

The Employee shall be eligible to receive an annual performance

bonus.  Any such bonus awarded to the

Employee shall be payable in the amount, in the manner, and at the time determined

by the Company’s Compensation Committee and/or the Board of Directors, in their

sole and absolute discretion.

 

4.             FRINGE

BENEFITS.  The Employee shall be

entitled to participate in any benefit programs adopted from time to time by

the Company for the benefit of its executive employees, and the Employee shall

be entitled to receive such other fringe benefits as may be granted to Employee

from time to time by the Company’s Compensation Committee and/or the Board of

Directors.

 

(a)           BENEFIT

PLANS.  The Employee shall be

entitled to participate in any benefit plans relating to stock options, stock

purchases, pension, thrift, profit sharing, life and disability insurance,

medical coverage, executive medical and dental coverage, education, or other

retirement or employee benefits available to all other executive employees of

the Company, subject to any restrictions specified in such plans.

 

(b)           TRAVEL

BENEFITS.  Employee and Employee’s

spouse shall be entitled to travel benefits on Company flights (but not charter

flights) at the PS2F/PS2Y category. Employee’s eligible dependents shall be

entitled to travel benefits on Company flights (but not charter flights) at the

PS2F/PS2Y category when traveling with Employee and/or Employee’s spouse; when

not traveling with Employee and/or Employee’s spouse, eligible dependents shall

be entitled to travel benefits on Company flights (but not charter flights) at

the SA1F/PS8Y category.  Employee and

Employee’s eligible dependents shall be entitled to travel benefits on other

airlines at the sole discretion of such airlines, at a comparable level to that

provided to other Company executive officers.

 

(c)           EXECUTIVE

LONG-TERM DISABILITY INSURANCE PLAN. 

Subject to the applicable waiting periods, the Employee will be included

in the Company’s Executive Long-Term Disability Insurance Plan, as it may be

modified from time to time, at the Company’s expense.

 

(d)           BUSINESS

EXPENSES.  The Company shall

reimburse the Employee for any and all necessary, customary, and usual expenses,

properly receipted in accordance with Company policies, incurred by the

Employee on behalf of the Company.

 

2

 

(e)           RELOCATION

ALLOWANCE.    If Employee resigns or

is terminated without cause, the Company will pay moving expenses, not to

exceed $50,000, from Hawaii to Employee’s next destination on the U.S.

Mainland.  To the extent such reimbursed

expenses are taxable, the amounts paid hereunder will be grossed up by the

Company to make Employee whole for such expenditures.

 

5.             CONFIDENTIAL

INFORMATION.  Employee recognizes

that by reason of Employee’s employment by and service to the Company, Employee

will occupy a position of trust with respect to business and technical

information of a secret or confidential nature which is the property of the

Company which will be imparted to Employee from time to time in the course of

the performance of Employee’s duties hereunder (the “Confidential

Information”).  Employee acknowledges

that such information is a valuable and unique asset of the Company and agrees

that Employee shall not, during or after the Term of this Agreement, use or

disclose directly or indirectly any Confidential Information of the Company to

any person, except that Employee may use and disclose to authorized personnel

of the Company such Confidential Information as is reasonably appropriate in

the course of the performance of Employee’s duties hereunder.  Confidential Information of the Company

shall include all information and knowledge of any nature and in any form

relating to the Company including but not limited to, business plans;

development projects; computer software and related documentation and

materials; designs, practices, processes, methods, know-how and other facts

relating to the business of the Company; advertising, promotions, financial

matters, sales and profit figures, customers or customer lists.  Confidential Information shall not include

any information that is or shall become publicly known through no fault of the

Employee and any information received in good faith from a third party who has

the right to disclose such information and who has not received such

information, either directly or indirectly, from the Company.

 

6.             TERMINATION

OF EMPLOYEE’S EMPLOYMENT.

 

(a)           DEATH.  If the Employee dies while employed by the

Company, Employee’s employment shall immediately terminate.  The Company’s obligation to pay the

Employee’s Base Salary shall cease as of the date of the Employee’s death.  Thereafter, the Employee’s beneficiaries or

estate shall receive benefits in accordance with the Company’s retirement,

insurance, and other applicable programs and plans then in effect.

 

(b)           DISABILITY.  If, as a result of the Employee’s mental or

physical incapacity, the Employee shall be unable to perform the services for

the Company contemplated by this Agreement in the manner in which Employee

previously performed them during an aggregate one hundred twenty (120) business

days in any consecutive seven (7) month period (“Disability”), the Employee’s

employment may be terminated by the Company for Disability.  During any period prior to such termination

during which the Employee is absent from the full-time performance of

Employee’s duties with the Company due to Disability, the Company shall continue

to pay the Employee the Base Salary at the rate in effect at the commencement

of such period of Disability.  Any such

payments made to the Employee shall be reduced by amounts received from

disability insurance obtained or provided by the Company, and by the amounts of

any benefits payable to the Employee, with respect to such period, under the

Company’s Executive Long-Term Disability Plan. 

Subsequent to the termination provided for in this Section 7(b), the Employee’s

benefits shall be determined under the Company’s retirement

 

3

 

insurance, and other compensation programs then in effect in accordance

with the terms of such programs.

 

(c)           TERMINATION

BY THE COMPANY FOR CAUSE.  The

Company may terminate the Employee’s employment under this Agreement for

“Cause” at any time prior to expiration of the Term of the Agreement, only upon

the occurrence of any one or more of the following events:

 

(i)            The material breach of this

Agreement by the Employee, including without limitation, repeated willful

neglect of the Employee’s duties, the Employee’s material lack of diligence and

attention in performing services as provided in this Agreement, or the

Employee’s repeated willful failure to implement or adhere to policies

established by, or directives of, the Company’s Board of Directors.

 

(ii)           Conduct of a criminal nature that may

have an adverse impact on the Company’s reputation and standing in the

community; or

 

(iii)          Fraudulent conduct in connection with

the business affairs of the Company, regardless of whether said conduct is

designed to defraud the Company or others.

 

In the event of termination for Cause, the Company’s

obligation to pay the Employee’s Base Salary shall cease as of the Termination

Date.  If the Employee’s employment is

terminated for Cause, the Employee’s employment may be terminated immediately

without any advance written notice.

 

(d)           TERMINATION

BY THE COMPANY WITHOUT CAUSE.  The

Company shall have the right to terminate this Agreement prior to the

expiration of the Term, at any time, without “Cause.”  In the event the Company shall so elect to terminate this

Agreement, the Employee shall receive compensation pursuant to the provisions

of Section 7 hereof.

 

(e)           TERMINATION

BY THE EMPLOYEE.    The Employee

shall have the right to terminate this Agreement at any time upon thirty (30)

days’ written notice.   If the Employee

terminates this Agreement upon thirty (30) days’ written notice after June 7,

2003, the Employee shall receive compensation pursuant to the provisions of

Section 7 hereof.

 

7.             COMPENSATION

UPON TERMINATION OR NON-RENEWAL BY THE COMPANY OTHER THAN FOR CAUSE OR BY THE

EMPLOYEE AFTER JUNE 7, 2003.  If the

Employee’s employment shall be terminated (i) by act of the Company other than

for Cause or (ii) by the Employee upon thirty (30) days’ written notice after

June 7, 2003, the Employee shall be entitled to the following benefits:

 

4

 

(a)           PAYMENT

OF UNPAID BASE SALARY.  The Company

will immediately pay the Employee any portion of the Employee’s Base Salary not

paid prior to the Termination Date.

 

(b)           CONTINUED

PAYMENT OF BASE SALARY.  For the

eighteen (18) month period subsequent to the Termination Date, the Company

shall pay to the Employee, on a bimonthly basis an amount equal to all Base

Salary that would have been payable to the Employee pursuant to this Agreement

had the Employee continued to be employed for the eighteen  (18) months immediately following the

Termination Date (such Base Salary for such period being equal to the

Employee’s Base Salary in effect as of the Termination Date).

 

(c)           CONTINUATION

OF FRINGE BENEFITS.  The Company

shall continue to provide the Employee with all Fringe Benefits set forth in

Section 4 throughout the remaining eighteen (18) month period subsequent to the

Termination Date, as if the Employee’s employment under the Agreement had not

been terminated.  Such Fringe Benefits

to be provided to Employee during this period will be those benefit plans offered

during such period to other employees, provided that long term disability

insurance will not be so provided after termination because the carrier limits

provision of such to employees.  If

required bylaw or otherwise allowed by the relevant provider, Employee will be

afforded the opportunity to continue such benefits at his cost after the

coverage ends under this Agreement..

 

8.             NONCOMPETITION

PROVISIONS.

 

(a)           NONCOMPETITION.    For a period of eighteen (18) months

commencing on the Termination Date, Employee agrees and covenants that he shall

not, directly or indirectly, undertake to become an employee, officer, partner,

consultant or otherwise be connected with any entity for which, at such time,

(i) in excess of 5% of its business is, or (ii) in which his specific duties

and responsibilities are, in direct competition with the Company either within

Hawaii or on routes to and from Hawaii serviced by the Company.    Employee acknowledges and agrees that any

breach of this non-competition provision shall entitle Employer to immediately

terminate payments pursuant to Section 7 of this Agreement.

 

(b)           NONDISPARAGEMENT.    For a period of eighteen (18) months

commencing on the Termination Date, Employee agrees that he shall not make any

statements that disparage or tend to disparage the Company or its products,

services, officers, employees, advisers or other business contacts.   Employee acknowledges and agrees that any

breach of this non-disparagement provision shall entitle Employer to

immediately terminate payments pursuant to Section 7 of this Agreement.

 

(c)           RIGHT

TO COMPANY MATERIALS.  The Employee

agrees that all styles, designs, lists, materials, books, files, reports

correspondence, records, and other documents (“Company Materials”) used,

prepared, or made available to the Employee, shall be and shall remain the

property of the Company.  Upon the

termination of employment or the expiration of this Agreement, all Company

Materials shall be returned immediately to the Company, and the Employee shall

not make or retain any copies thereof.

 

5

 

(d)           ANTI-SOLICITATION.  The Employee promises and agrees that during

the term of this Agreement Employee will not influence or attempt to influence

customers or suppliers of the Company or any of its present or future

subsidiaries or affiliates, either directly or indirectly, to divert their

business to any individual, partnership, firm, corporation or other entity then

in competition with the business of the Company or any subsidiary or affiliate

of the Company.

 

(e)           SOLICITING

EMPLOYEES.  During the term of this

Agreement and for the eighteen (18) month period commencing on the Termination

Date, the Employee promises and agrees that Employee will not directly or

indirectly solicit any of the Company’s employees to work for any business,

individual, partnership, firm, corporation, or other entity then in competition

with the business of the Company or any subsidiary or affiliate of the Company.

 

9.             NOTICES.  All notices, requests, demands and other

communications hereunder shall be in writing and shall be effective upon

receipt. All notices shall be given or served personally or sent by facsimile

or first class mail, postage prepaid, addressed as follows:

 

	

  If to the Company:

  	

  Hawaiian Airlines, Inc.

  
	

   

  	

  Attn: 

  General Counsel

  
	

   

  	

  3375 Koapaka Street, Suite G-350

  
	

   

  	

  Honolulu, Hawaii 

  96819

  
	

   

  	

  Phone:  808/835-3610

  
	

   

  	

  Fax:       808/835-3690

  
	

   

  	

   

  
	

  If to the Employee:

  	

  H. Norman Davies, Jr.

  
	

   

  	

  7171 Makaa St.

  
	

   

  	

  Honolulu, Hawaii 96825

  
	

   

  	

  Phone: 

  808-396-1950

  

 

or to such other address

which the party receiving the notice has notified the party giving the notice

in the manner aforesaid.

 

10.           ATTORNEYS’

FEES.  In the event judicial or

quasi-judicial determination is necessary of any dispute arising as to the

parties’ rights and obligations hereunder, the Company and the Employee shall

bear their respective attorneys’ fees and costs associated with such dispute.

 

11.           TERMINATION

OF PRIOR AGREEMENTS.  This Agreement

terminates and supersedes any and all prior agreements and understandings

between the parties with respect to employment or with respect to the

compensation of the Employee by the Company from and after the Effective Date,

including that Employment Agreement dated October 13, 1997 and the amendments

thereto between Employee and the Company.

 

12.           ASSIGNMENT;

SUCCESSORS.  This Agreement is

personal in its nature and neither of the parties hereto shall, without the

consent of the other, assign or transfer this Agreement or any rights or obligations

hereunder; provided that, in the event of the merger, consolidation, transfer,

or sale of all or substantially all of the assets of the Company with or to any

other individual or entity, this Agreement shall, subject to the provisions

hereof, be binding upon, and inure to the benefit of such successor and such

successor shall discharge and perform all the promises, covenants, duties, and

obligations of the Company hereunder.

 

6

 

13.           GOVERNING

LAW.  This Agreement and the legal

relations thus created between the parties hereto shall be governed by and

construed under and in accordance with the laws of the State of Hawaii.

 

14.           ENTIRE

AGREEMENT;  HEADINGS.   This Agreement embodies the entire

agreement of the parties respecting the matters within its scope and may be

modified only in writing.   Section

headings in this Agreement are included herein for convenience of reference

only and shall not constitute a part of this Agreement for any other purpose.

 

15.           WAIVER:  MODIFICATION.  Failure to insist upon strict compliance with any of the terms,

covenants, or conditions hereof shall not be deemed a waiver of such term,

covenant, or condition, nor shall any waiver or relinquishment of, or failure

to insist upon strict compliance with, any right or power hereunder at any one

or more times be deemed a waiver or relinquishment of such right or power at

any other time or times.  This Agreement

shall not be modified in any respect except by a writing executed by each party

hereto.

 

16.           SEVERABILITY.  In the event that a court of competent

jurisdiction determines that any portion of this Agreement is in violation of

any statute or public policy, only the portions of this Agreement that violate

such statute or public policy shall be stricken.  All portions of this Agreement that do not violate any statute or

public policy shall continue in full force and effect.  Further, any court order striking any

portion of this Agreement shall modify the stricken terms as narrowly as

possible to give as much effect as possible to the intentions of the parties

under this Agreement.

 

17.           INDEMNIFICATION.  The Company shall indemnify and hold the

Employee harmless to the maximum extent permitted by the appropriate provisions

of the statutes of the State of Hawaii and the Restated Articles of

Incorporation of the Company, as such may be amended.

 

18.           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 instrument.

 

7

 

IN WITNESS WHEREOF, the Company has caused this

Agreement to be executed by its duly authorized officers, and the Employee has

hereunto signed this Agreement, as of the date first above written.

 

 

	

  EMPLOYEE:

  	

  HAWAIIAN AIRLINES, INC.

  
	

   

  	

   

  
	

   

  	

   

  
	

  By:

  	

   

  	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

  H. Norman Davies, Jr.

  	

   

  	

  John W. Adams

  
	

   

  	

   

  	

   

  	

  Its Chairman of the Board,

  Chief Executive Officer and

  President

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  BY:

  	

   

  	

   

  
	

   

  	

   

  	

  Lyn Flanigan Anzai

  
	

   

  	

   

  	

  Its Vice President, General Counsel

  And Corporate Secretary

  
								

 

8

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