Document:

EXHIBIT
10.33

 

EMPLOYMENT
AGREEMENT

 

THIS EMPLOYMENT AGREEMENT
(“Agreement”) dated July 1, 2001 and effective as of June 1, 2001 (“Effective
Date”) is entered into by and between Steven E. Markhoff (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 VICE PRESIDENT - ACQUISITIONS. 
The Company does hereby employ, engage, and hire the Employee as Vice
President – Acquisitions 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 a Vice
President – Acquisitions and such other duties as the Board of Directors of the
Company and the President – Chief Operating Officer of the Company shall from
time to time prescribe and as provided in the Bylaws of the Company.  The Employee shall report to the President –
Chief Operating Officer of the Company. 
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 President – Chief Operating Officer 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 twelve (12) 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

 

 

Employment Agreement – Steven E. Markhoff

 

the Company, a base salary at the rate of ONE HUNDRED FIFTY THOUSAND
AND NO/100THS DOLLARS ($150,000.00) 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.

 

(b)                                 STOCK
OPTIONS.  Subject to action of the
Compensation Committee of the Company’s Board of Directors, Employee shall
receive a grant of options to purchase 50,000 shares of the Company’s stock
pursuant to the Company’s 1996 Stock Incentive Plan, As Amended.  These 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 SA2F/SA1Y
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.

 

2

 

(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.

 

(e)                                  HOUSING
ALLOWANCE.  For the first twelve
months of the Term, the Company shall provide Employee with a monthly housing
allowance of $1,000.00, which allowance shall be reviewed by the Compensation
Committee as part of a review of all salary and compensation programs for
officers and non-contract employees.

 

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.

 

3

 

(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 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

 

4

 

this Agreement, 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.  If the Employee’s employment shall be
terminated (i) by act of the Company other than for Cause, or (ii) upon
expiration of the Term and the Company fails to offer to renew the Employee’s
employment pursuant to this Agreement on the same terms and conditions, except
by reason of “Cause,” the Employee shall be entitled to the following benefits:

 

(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
twelve (12) 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 twelve (12) 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 twelve (12) month period subsequent to the
Termination Date, as if the Employee’s employment under the Agreement had not
been terminated.  If, as the result of
terminating of Employee’s employment, Employee and/or Employee’s otherwise
eligible dependents or beneficiaries shall become ineligible for benefits under
any one or more of the Company’s benefit plans, the Company shall continue to
provide the Employee and Employee’s eligible dependents or beneficiaries with
benefits at a level at least equivalent to the level of benefits for which the
Employee and Employee’s dependents and beneficiaries were eligible under such
plans immediately prior to the Termination Date.

 

8.                                       NONCOMPETITION
PROVISIONS.

 

(a)                                  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

 

(b)                                 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.

 

(c)                                  SOLICITING
EMPLOYEES.  During the term of this
Agreement and for the twelve (12) 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:

  	
   

  	
  Steven E.  Markhoff

  425 South Street, Apt. #1404

  Honolulu, Hawaii 96813

  

 

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.

 

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

 

6

 

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.

 

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 violates
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.

 

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.

 

7

 

	
   

  	
  HAWAIIAN AIRLINES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/  Robert W. Zoller, Jr.

  	
   

  
	
   

  	
   

  	
  Robert W. Zoller, Jr.

  	
   

  
	
   

  	
   

  	
  Its President and Chief
  Operating Officer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/  Lyn F. Anzai

  	
   

  
	
   

  	
   

  	
  Lyn F. Anzai

  	
   

  
	
   

  	
   

  	
  Its Vice President,
  General Counsel

  And Corporate Secretary

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EMPLOYEE

  
	
   

  	
   

  
	
   

  	
  /s/  Steven E. Markhoff

  	
   

  
	
   

  	
  Steven E. Markhoff

  

 

8Exhibit
10.34

 

AMENDED
AND RESTATED EMPLOYMENT AGREEMENT

 

THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT
(“Agreement”) dated September  __, 2002
and effective as of September 1, 2002 (“Effective Date”) is entered into by and
between John B. Happ (the “Employee”) and Hawaiian Airlines, Inc., a Hawaii
corporation (the “Company”).

 

The Company and the Employee desire to amend and
restate that Employment Agreement dated as of December 8, 1997 between the
Employee and the Company (as amended, the “Original Agreement”) to establish
the Company’s continued 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 continue 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_SENIOR VICE PRESIDENT-MARKETING. 
The Company does hereby employ, engage, and hire the Employee as Senior
Vice President-Marketing 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 a Senior Vice President-Marketing and such other duties
as the Board of Directors of the Company, the Chief Executive Officer of the
Company shall from time to time prescribe and as provided in the Bylaws of the
Company.    The Employee shall report to
the Chief Executive Officer or his or her designee.   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 Chief Executive Officer 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
TWENTY-FIVE THOUSAND AND NO/100THS DOLLARS ($225,000.00) 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, in their sole and absolute discretion.

 

 

Amended and Restated Employment Agreement

John B. Happ

 

(b)           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.

 

(c)           CHANGE OF CONTROL BEFORE JUNE 30,
2003.  Upon the consummation of a
change of control in ownership of the Company prior to June 30, 2003, this
Agreement, and as appropriate that Employee Incentive Stock Option Agreement
Pursuant to the 1996 Stock Incentive Plan, As Amended [1997 Grant] (the “1997
Grant”), that Employee Incentive Stock Option Agreement Pursuant to the 1996
Stock Incentive Plan, As Amended [1998 Grant] (the “1998 Grant”) and that
Employee Incentive Stock Option Agreement Pursuant to the 1996 Stock Incentive
Plan, As Amended [2000 Grant] (the “2000 Grant”), shall be immediately amended
to provide that all options granted to Employee pursuant to the 1997 Grant, the
1998 Grant and the 2000 Grant shall immediately vest and further that the
exercise price per share of all options granted to Employee pursuant to the
1997 Grant and the 1998 Grant shall be reset at $2.625 per share.

 

 

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 SA2F/SA1Y
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.

 

 

2

 

(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, including reimbursement for use of the
Employee’s personal vehicle for business purposes.

 

(e)           CLUB DUES.  The Company shall pay all dues and similar
charges (other than initiation fees) for two clubs in Hawaii.

 

(f)            AUTOMOBILE.  The Company shall provide Employee with a
automobile allowance of $800.00 per month, which amount shall be added to
Employee’s W-2 compensation at year-end.

 

(f)            RELOCATION.

 

(i)            The
Company agrees to reimburse the Employee for the following items:  i) the reasonable out-of-pocket costs of
moving his household goods and belongings from his present home to Hawaii,
including packing, unpacking, shipping and insurance; ii) the shipment of one
automobile; and iii) closing costs at actual and reasonable amounts for the
sale of Employee’s home in Houston, Texas, and/or the purchase of a home in
Honolulu, Hawaii (collectively referred to as the “Relocation Expenses”).  The Relocation Expenses will be reimbursed
up to a maximum of $50,000.00.

 

(ii)           The
Company will also provide temporary accommodations as well as the cost of a
rental car for ninety (90) days after Employee’s arrival in Hawaii.  Arrangements may be made by the Company to
be billed directly for the foregoing expenses.

 

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.

 

 

3

 

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 6(b), the Employee’s benefits shall be determined
under the Company’s retirement 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.

 

 

4

 

(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.

 

7.             COMPENSATION
UPON TERMINATION OR NON-RENEWAL BY THE COMPANY OTHER THAN FOR CAUSE.  If the Employee’s employment shall be
terminated  by act of the Company other
than for Cause, the Employee shall be entitled to the following benefits:

 

(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 twelve (12) 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.  If, as the result of terminating of
Employee’s employment, Employee and/or Employee’s otherwise eligible dependents
or beneficiaries shall become ineligible for benefits under any one or more of
the Company’s benefit plans, the Company shall continue to provide the Employee
and Employee’s eligible dependents or beneficiaries with benefits at a level at
least equivalent to the level of benefits for which the Employee and Employee’s
dependents and beneficiaries were eligible under such plans immediately prior
to the Termination Date.

 

8.             NONCOMPETITION
PROVISIONS.

 

(a)           NONCOMPETITION.    For a period of eighteen (18) months
commencing on the Termination Date, Employee agrees and covenants that Employee
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 Employee’s
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.

 

 

5

 

(b)           NONDISPARAGEMENT.    For a period of eighteen (18) months
commencing on the Termination Date, Employee agrees that Employee 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.

 

(d)           ANTI-SOLICITATION.  The Employee promises and agrees that during
the term of this Agreement and for the eighteen (18) month period commencing on
the Termination Date, 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:

  	
   

  	
  John B. Happ

  354 Kahawalu Street

  Honolulu, Hawaii  96817

  Phone:  808/595-5228

  

 

or to such other
address which the party receiving the notice has notified the party giving the
notice in the manner aforesaid.

 

 

6

 

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.

 

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.

 

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. 
This Agreement constitutes the employment contract referred to in that
letter dated March 10, 1997 between the Company and Employee, a copy of which
is attached hereto as Exhibit A, and is intended to be consistent therewith.
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.

 

 

7

 

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.

 

IN WITNESS WHEREOF, the Company has caused this
Agreement to executed by its duly authorized officers, and the Employee has
hereunto signed this Agreement, as of the date first above written.

 

 

	
  HAWAIIAN AIRLINES, INC.

  	
   

  	
  EMPLOYEE 

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  BY:

  	
  /s/ John W. Adams

  	
   

  	
  BY:

  	
  /s/ John B. Happ

  
	
   

  	
  John W. Adams

  Its Chairman, Chief Executive Officer

  And President

  	
   

  	
   

  	
  John B. Happ

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  BY:

  	
  /s/ Lyn Flanigan Anzai

  	
   

  	
   

  	
   

  
	
   

  	
  Lyn Flanigan Anzai

  Its Vice President, General Counsel

  And Corporate Secretary

  	
   

  	
   

  	
   

  

 

 

8

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