Document:

Exhibit
10.2

 

CONSULTING
AGREEMENT

 

This
Consulting Agreement (the “Agreement”) dated as of May 13, 2008, and
effective June 1, 2008 (the “Effective Date”) is made by and between
Hawaiian Telcom Holdco, Inc. a Delaware corporation (together with any
successor thereto, the “Company”), and AMO Consulting, LLC (the “Consultant”).

 

WHEREAS,
Alan M. Oshima shall cease to be an employee of the Company as of the Effective
Date and will be offering business consulting services to clients on an
independent contractor basis through his company, AMO Consulting, LLC;

 

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

 

NOW,
THEREFORE, in consideration of the promises and mutual covenants contained
herein, the Company and the Consultant agree as follows:

 

1.             Services.

 

(a)           During the Consulting Term (as defined below) the
Consultant shall serve as a Senior Advisor to the Company and shall provide
assistance to the Company in the areas specified in subsection 1(c) below.  During the Consulting Term (as defined below)
the Consultant (1) will perform services for the Company only as
authorized by the Company’s Chief Executive Officer (the “CEO”) and agreed to
by the Consultant, and (2) will not, in his capacity as a Senior Advisor,
incur any financial or legal obligation or liability on behalf of or binding
upon the Company or any of its affiliates. 
The Consultant agrees that Alan M. Oshima will notify the Company of all
pertinent facts if he is contacted by any government agency with reference to
the business of the Company or any of its affiliates, or by any person
contemplating or maintaining any claim or legal action against the Company or
any of its affiliates, or by any agent or attorney of such person.

 

(b)           The Consultant may, at all times during the Consulting
Term, be engaged in other business activities, manage his personal investments,
be involved in charitable and professional activities (including serving on
charitable and professional boards), serve on for profit boards of directors
and advisory committees and perform such other activities so long as such
service does not materially interfere with the Consultant’s obligations
hereunder or conflict with the interests of the Company and its subsidiaries.

 

(c)           The services provided by Consultant to the Company
shall include, but not be limited to, consultation on business, regulatory,
communications, real estate, labor and community strategies issues.  It is understood and agreed by the Parties
that (1) such services shall require approximately 60 hours per month by
the Executive, (2) such services shall not include legal services, and (3) 
any services provided by Consultant under the terms and conditions of this
Agreement are separate and distinct from any fiduciary duties and
responsibilities Alan M. Oshima may have as member of the Company’s Board of
Directors.

 

 

2.             Term.

 

(a)           This Agreement shall be effective as of the Effective
Date and shall continue for one year following the Effective Date (the “Initial
Term”).  The Parties may elect, within
forty-five (45) days prior to  the
expiration of the Initial Term, to extend the term of this Agreement by the mutual
written agreement (the “Continuation Term”).

 

(b)           During the first six (6) months of the Initial
Term, this Agreement shall be non-terminable. 
Following the first six (6) months of the Initial Term, this
Agreement may be terminated by either party upon thirty (30) days prior written
notice to the other party.  The

 

(c)           Consultant’s period of services under this Agreement
(whether during the Initial Term or the Continuation Term) is hereinafter
referred to as the “Consulting Term.”

 

3.             Payment for Services.

 

(a)           During the first six (6) months of the Initial
Term, the Company shall pay the Consultant for his services hereunder a monthly
consulting fee in the amount of $46,000 plus the Hawaii General Excise Tax with
respect to such amount, with the first monthly payment due seven (7) days
after the Effective Date, and subsequent monthly payments due every 30 days
thereafter until the end of the Initial Term.

 

(b)           During the remainder of the Consulting Term, the
Company shall pay the Consultant for his services hereunder a monthly
consulting fee in the amount of $20,000 plus the Hawaii General Excise Tax with
respect to such amount in monthly payments. 
Such monthly payments shall be due on the eighth (8th) day of
each month until the end of the Consulting Term.

 

(c)           The Company shall not be obligated to provide the
Consultant with any retirement, welfare, or other fringe benefits under the
terms of this Agreement.

 

(d)           It is understood and agreed by the Parties that the
fees paid to Consultant under the terms of this Agreement are separate and
distinct from any retainer, meeting fees, options and/or expense reimbursements
that are separate and distinct from any fiduciary duties and responsibilities
Alan M. Oshima may have as member of the Company’s Board of Directors.

 

4.             Communications Equipment, Administrative Services, and
Reimbursement for Business Expenses.

 

(a)           In order to facilitate Consultant’s services to the
Company during the Consulting Term, the Company shall provide the Consultant
with (1) an office and parking at the Company’s Honolulu, Hawaii offices, (2) reasonable
access to communications equipment and services (i.e. a cell phone, blackberry
and personal computer connected to the Company’s network), and (3) the
services of Lisa Sunada as the Consultant’s assistant, provided (i) she is
employed by the Company and the services rendered to Consultant are reasonably
consistent with her other duties to the Company, and (ii) if she is not
employed by the Company during the term of this Agreement, then the services of
another assistant shall be reasonably provided.

 

 

(b)           The Consultant shall also be reimbursed in accordance
with the Company’s applicable policies and procedures for any ordinary,
necessary and reasonable business expenses which are approved in advance by the
CEO.

 

(c)           Attorneys Fees. 
Consultant shall be reimbursed for
reasonable attorneys’ fees and costs incurred in connection with the
negotiation and execution of this Agreement in an amount not to exceed $5,000.

 

5.             Amendments.  This Agreement
may not be amended or changed except by the written agreement of the Company
and the Consultant.

 

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

 

7.             Governing Law.  This
Agreement, and any dispute arising under or relating to any provision of this
Agreement, shall be governed by and construed in accordance with the laws of
the state of Delaware.

 

8.             Counterparts.  This
Agreement may be executed in any number of counterparts, each of which when so
executed shall be deemed to be an original, and such counterparts together
shall constitute and be one and the same instrument.

 

9.             Relationship of the Parties. 
The Company and the Consultant agree that under this Agreement, the
Consultant is an independent contractor who has contracted with the
Company.  The Company shall not withhold
or in any way be responsible for the payment of any federal, state, or local
income or occupational taxes, FICA taxes, FUTA, unemployment compensation, or
workers’ compensation contributions, vacation pay, sick leave, retirement
benefits, or any other fringe benefits or payments for or on behalf of the
Consultant.  All such payments,
withholdings and benefits are the sole responsibility of the Consultant and the
Consultant hereby indemnifies and holds the Company harmless from any and all
loss, damage or liability arising with respect to such payments, withholdings
and benefits.

 

10.           Liability and Indemnification.

 

(a)           If a lawsuit, administrative complaint or other
similar action is filed by a third party against the Company and/or the
Consultant arising from any consulting services provided hereunder, both
parties agree to cooperate with one another in the investigation and defense of
the suit, administrative complaint or other action.

 

(b)           The Company shall protect, defend, indemnify, and save
harmless the Consultant, its agents and employees against and from all claims,
damages, losses and expenses, including but not limited to attorneys’ fees and
costs, by reason of any suit, claim, demand, judgment or cause of action
initiated by any person, arising or alleged to have arisen out of the Company’s
gross negligence, intentional misfeasance, willful misconduct, violation of any
law or breach of this Agreement.

 

 

(c)           The Consultant shall protect, defend, indemnify and
save harmless the Company, its agents and employees against and from all
claims, damages, losses and expenses, including but not limited to attorneys’
fees and costs, by reason of any gross negligence, intentional misfeasance,
willful misconduct, violation of any law, or breach of this Agreement.

 

(d)           It is understood and agreed by the Parties that the
foregoing obligations to defend and indemnify one another are separate and
distinct from any obligations the Parties may owe to one another by virtue of
are separate and distinct from any obligations and responsibilities that may
arise out of Alan M. Oshima’s position as a member of the Company’s Board of
Directors.

 

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

 

	
   

  	
  HAWAIIAN TELCOM HOLDCO, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kevin J. Nystrom

  	
   

  
	
   

  	
   

  
	
   

  	
  Its:

  	
  Chief Operating Officer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  AMO CONSULTING, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Alan M. Oshima

  	
   

  
	
   

  	
   

  
	
   

  	
  Its:

  	
  MemberExhibit 10.3

 

May 13, 2008

 

Mr. Robert F. Reich

150 S. Kainalu Drive

Kailua, HI 96734

 

Dear Bob:

 

This letter serves to amend, effective March 7,
2008 (the “Amendment Effective Date”) except as provided in Paragraphs 1 and 2 below,
your employment letter agreement with Hawaiian Telcom Communications, Inc.
(the “Company”) effective as of March 8, 2007 (the “Employment Agreement”).  Notwithstanding anything herein to the
contrary, you will continue to be an employee at-will of the Company.

 

1.             Effective May 6, 2008, your
position is changed from Senior Vice President and interim Chief Financial
Officer to Senior Vice President and Chief Financial Officer.  You will report directly to the Company’s Chief
Executive Officer, subject to change as deemed appropriate by the CEO.  You will devote your best efforts and full
business time to the Company.  Your
duties and responsibilities may be modified or expanded from time to time, as
deemed appropriate by the CEO.

 

2.             Your salary will be increased effective as of the
Amendment Effective Date to an annual base salary of $235,000.00, which will be
payable in accordance with the Company’s customary payroll practices, and
further increased to $312,000.00 effective May 6, 2008.  This covers your promotion and the merit increase
you otherwise would receive on or about March 7, 2008.  Paydays are expected to be every other Friday
(total of 26 pay days a year).  Your
paycheck shall be delivered to you or made available to you on such dates.  If a payday falls on a holiday or weekend,
you may pick up your paycheck on the weekday immediately preceding the payday.

 

3.             Subject to your execution of the Business Protection
Agreement referred to in Paragraph 8 below, you will be eligible to participate
in an annual performance-based bonus plan (the “Bonus Plan”) established
by the Company’s Board of Directors (the “Board”) at a target level that
is consistent with the Company’s Bonus Plan (currently specified as 75% of your
bonus-eligible salary) as it may be amended from time to time by the Board or
Compensation Committee thereof.  The
actual bonus, if any, 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. Payment of any annual bonus described in this Paragraph 3 will be
subject to your continued employment by the Company through the date the bonus
is paid pursuant to the Bonus Plan, except in the event Paragraph 7(ii) below
applies.  In the event the Company modifies
the target levels or other terms and conditions of the Bonus Plan applicable to
the Senior Vice Presidents of the Company, the target level or other Bonus Plan
terms and conditions applicable to you will be modified on a consistent basis.

 

 

4.             You will be eligible to receive one or more additional
grants of nonqualified stock options (in addition to the option previously
granted to you) to purchase a number of shares of the common stock of Hawaiian
Telcom Holdco, Inc. pursuant to the Company’s stock option plan that are consistent
with the long-term plan for the Company’s stock option plan to be determined by
the Company’s Board or Compensation Committee thereof.  In the event the Company’s stock option plan
and/or the stock options of the Senior Vice Presidents of the Company are
modified, the stock options issued to you will be modified on a consistent
basis.

 

5.             You will participate in all Company employee benefits
plans and programs (and to receive any other fringe benefits) made available to
Senior Vice Presidents of the Company on a basis commensurate with your
position, subject to the Company’s prerogative to change or discontinue such
plans or benefits in accordance with business needs. You will continue to be
entitled to three weeks paid vacation each calendar year.  Any vacation shall be taken at the reasonable
and mutual convenience of the Company and you. 
Beginning with the 2008 year, paid vacation for a calendar year that has
not been taken by you during such calendar year shall carry over to any
subsequent period up to an increased maximum accumulated six weeks. In the
event the Company modifies the employee benefits applicable to the Senior Vice
Presidents of the Company (including paid vacation and carryover thereof), the
employee benefits applicable to you will be modified on a consistent basis.

 

6.             Immediately following payment of your housing allowance for
May 2008, your housing allowance will terminate.

 

7.             In
the event that your employment is terminated by the Company without Cause, the
Company shall, subject to your execution of a general waiver and release of
claims agreement in the Company’s customary form:

 

(i) continue to pay,
in accordance with normal payroll practices, your base salary for the period
beginning on the date of such termination of employment (“Date of
Termination”) and ending on the earliest to occur of (a) the one year
anniversary of the Date of Termination,  (b) the
first date you violate any covenant contained in the Hawaiian Telcom Business
Protection Agreement referred to in Paragraph 8 below, or (c) 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 termination, 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 

 

2

 

plans in which you
and any dependents were entitled to participate immediately prior to the Date
of Termination, 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; and

 

(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.

 

8.             You will be required to sign and abide by the Hawaiian
Telcom Business Protection Agreement in the form attached hereto as Exhibit A.

 

9.             You shall be subject to the rules, regulations and
restrictions set for in the Company’s applicable Code of Business Conduct,
employee handbook or any other similar policy or plan including but not limited
to any applicable non-competition and confidentiality restrictions.

 

10.           All payments to you under this letter shall be reduced by
all applicable withholdings required by Federal, state or local law.

 

11.           You will be required to sign and
abide by the arbitration agreement attached hereto as Exhibit B, dealing
with any legal claims which you or the Company may have in connection with your
employment.

 

3

 

Please indicate your acceptance of the terms and provisions of this letter
by signing both copies of this letter and returning one copy to me.  The other copy is for your files.  By accepting this position, you acknowledge
that the terms of this letter supersede any conflicting terms of your Employment
Agreement.  By signing below, you
acknowledge and agree that you have carefully read this letter in its entirety;
fully understand and agree to its terms and provisions; and intend and agree
that it be final and legally binding on you and the Company.  This letter shall be governed and construed
under the internal laws of the State of Hawaii and may be executed in several
counterparts.

 

Congratulations on your promotion. 
I look forward to working with you in your new capacity.

 

 

	
   

  	
   

  	
  Very truly yours,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/
  Kevin J. Nystrom

  
	
   

  	
   

  	
  Kevin
  J. Nystrom

  
	
   

  	
   

  	
  Chief
  Operating Officer

  
	
   

  	
   

  	
   

  
	
  Agreed
  and Accepted:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Robert F. Reich

  	
   

  	
   

  
	
  Robert
  F. Reich

  	
   

  	
   

  

 

4

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