EXHIBIT 99.3
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT ("Agreement"), effective as of
DECEMBER 1, 1999 ("Effective Date") is entered by and between XXXXXX X. XXXXXX,
XX. ("Employee") and Hawaiian Airlines, Inc. ("Company").
The Company desires to establish its right to the continued
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
AND SERVICE. The Company does hereby employ, engage, and hire the Employee as
Executive Vice President - Operations and Service 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 required by a Chief Operating
Officer of a corporation and such other duties as the President/Chief
Executive Officer and the Board of Directors of the Company shall from time
to time prescribe and as provided in the Bylaws of the Company. The Employee
shall devote his full time, energy, and skill to the performance of his
duties for the Company and for the benefit of the Company, reasonable
vacations authorized by the President/Chief Executive Officer and reasonable
absences because of illness excepted. Furthermore, the Employee shall
exercise due diligence and care in the performance of his 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 that it does not wish to extend the Term. On the
date two (2) years after the Effective Date, if Employee remains employed
hereunder, the Term shall be revised to a period of twenty-four (24) months.
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 for
his services to the Company, a base salary at the rate of Two Hundred Thirty
Thousand U.S. Dollars ($230,000.00) per year ("Base Salary"), payable in equal
semi-monthly installments or at such other time or times as the Employee and the
Company shall agree. Employee's Base Salary shall be reviewed on a calendar year
basis, at least annually by the Company and may be increased as determined by
the Company's Board of Directors in its sole and absolute discretion.
Page 2
b) PERFORMANCE BONUS-BOARD OF DIRECTORS'
DISCRETION. 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 Board of Directors in its
sole and absolute discretion, such discretion to include a review of the
Company's actual performance and comparison to the Company's business plan(s).
4. FRINGE BENEFITS. 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 Employee shall be entitled to
receive such other fringe benefits as may be granted to him from time to time
by the Company's Board of Directors.
a) BENEFIT PLANS. 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 coverage, education, or other retirement or employee
benefits available to other executive employees of the Company, subject to any
restrictions (including waiting periods) specified in such plans.
b) AUTOMOBILE. The Company shall provide
Employee with a automobile allowance of $800.00 per month, commencing upon
Employee's renting or purchasing an apartment or home in Hawaii.
c) CLUB DUES. The Company shall pay all dues
and similar charges (other than initiation fees) for one combination social and
golf club and for one business meal club or one health or fitness club.
d) HOUSING ALLOWANCE. A Housing Allowance of
$1,000.00 per month will be paid to Employee during his employment with the
Company, commencing upon Employee's renting or purchasing an apartment or home
in Hawaii.
e) 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 transpacific flights (but not charter
flights) at the PS8Y/SA1F category and interisland flights at the SA0Y/SA1F
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.
f) 1996 STOCK INCENTIVE PLAN. Subject to
approval by the Compensations Committee of the Board of Directors, Employee
shall receive a grant of options to purchase 100,000 shares of the Company's
stock pursuant to the Company's 1996 Incentive Stock Plan, as Amended. The
vesting period and other terms will be determined by the Compensation Committee
and the exercise price shall be equal to the fair market value of the stock on
the grant date.
g) EXECUTIVE LONG-TERM DISABILITY INSURANCE
PLAN. Subject to the applicable waiting periods, 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.
Page 3
h) 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 Employee on
behalf of the Company.
5. RELOCATION.
a) The Company will 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 current home, 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.
b) 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.
6. CONFIDENTIAL INFORMATION. Employee recognizes that by
reason of his employment by and service to the Company he 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 him from time to time in the course of the performance of his duties
hereunder. Employee acknowledges that such information is a valuable and unique
asset of the Company and agrees that he 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 his 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.
7. TERMINATION OF EMPLOYEE'S EMPLOYMENT.
a) DEATH. If the Employee dies while employed
by the Company, his employment shall immediately terminate. The Company's
obligation to pay the Employee's Base Salary shall cease as of the date of
Employee's death. Thereafter, Employee's beneficiaries or his 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 Employee's
mental or physical incapacity, Employee shall be unable to perform the services
for the Company contemplated by this Agreement in the manner in which he
previously performed them during an aggregate of one hundred twenty (120)
business days in any consecutive seven (7) month period ("Disability"),
Employee's employment may be terminated by the Company for Disability. During
any period prior to such termination during which Employee is absent from the
full-time performance of his duties with the Company due to Disability, the
Company shall continue to pay Employee his Base Salary at the rate in
Page 4
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 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), 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 Employee's employment under this Agreement for "Cause" at
any time prior to expiration of the Term, only upon the occurrence of any one or
more of the following events:
(i) The material breach of this
Agreement by Employee, including without limitation, repeated willful neglect of
Employee's duties as set forth in this Agreement, Employee's material lack of
diligence and attention in performing services as provided in this Agreement, or
Employee's repeated willful failure (other than any such failure resulting from
the termination of the Employee's employment for death, disability, retirement
or good reason, as provided elsewhere in this Agreement) 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 or resignation by the Employee
without good reason, the Company's obligation to pay Employee's Base Salary
for any periods after the Termination Date shall cease as of the Termination
Date. If Employee's employment is terminated for cause, 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 8 hereof.
e) TERMINATION BY THE EMPLOYEE FOR GOOD REASON.
The Employee shall have the right to terminate this Agreement for good reason.
For purposes of this Agreement, "good reason" shall mean the occurrence, without
the Employee's prior written consent, of any one or more of the following
events:
(i) The assignment to the Employee of
any duties that are materially inconsistent with, or reflect a material
continuing reduction of the powers and responsibilities, or a change of the
Employee's reporting responsibilities, or a material improper intervention by
the Company's Board of Directors in the Employee's ability to materially perform
the duties and responsibilities set forth herein;
Page 5
(ii) The Company's material breach of
any of the provisions of this Agreement, or a material change in the conditions
of Employee's employment (e.g. including, without limitation, a failure by the
Company to provide the Employee with incentive compensation and benefit plans
that provide comparable benefits and amounts as such type programs in effect as
of the Effective Date or as provided to other Company executive officers, etc);
and
(iii) The relocation of the Company's
principal executive offices to a location outside of the Honolulu area or the
Company's requiring the Employee to be based anywhere other than the Company's
principal executive offices, except for travel on Company business to an extent
substantially consistent with the Employee's position and responsibilities.
The Employee agrees to provide the Company thirty
(30) days' prior written notice of any termination for good reason, during
which 30-day period the Company shall have the right to cure the
circumstances giving rise to the good reason stated in such notice. In the
event of termination for good reason, the Employee shall receive compensation
pursuant to the provisions of Section 8 hereof.
f) RETIREMENT. The Employee may terminate this
Agreement on account of retirement. For purposes of this Agreement, retirement
shall have the same meaning as provided for in the Company's defined benefit
plan covering Employee. Employee shall provide six (6) months notice to the
Company of Employee's intent to terminate this Agreement on account of
retirement. The Employee shall not be entitled to any further payments of
compensation or other benefits provided under Section 3 of this Agreement after
the Termination Date, except for any amounts earned and any accrued but unpaid
retirement benefit payments due the Employee from any Company sponsored plan.
8. COMPENSATION UPON TERMINATION BY THE COMPANY OTHER
THAN FOR CAUSE OR BY THE EMPLOYEE FOR GOOD REASON. If the Employee's
employment shall be terminated (i) by act of the Company other than for
cause, or (ii) by the Employee for good reason, the Employee shall be
entitled to the following benefits:
a) PAYMENT OF UNPAID BASE SALARY. The Company
shall immediately pay the Employee any portion of the Employee's Base salary
accrued, but not paid, prior to the Termination Date.
b) CONTINUED PAYMENT OF BASE SALARY. The
Employee shall continue to be paid the Base Salary that would have been payable
to the Employee pursuant to this Agreement had the Employee continued to be
employed for the Term of this Agreement on the Termination Date (such Base
Salary for such period being equal to the Employee's Base Salary in effect as of
the Termination Date); and (ii) an amount equal to the greater of (A) the total
of any performance bonus or bonuses paid to the Employee pursuant to Section
3(b) in the fiscal year of the Company ended immediately prior to the fiscal
year in which the Termination Date occurs, and (B) the average of the annual
performance bonuses (excluding the signing bonus and any special bonus not based
on performance) paid to him by the Company with respect to the two (or, if less,
the number of years the
Page 6
Employee has been employed with the Company) fiscal years ended immediately
prior to the fiscal year in which the Termination Date occurs.
c) CONTINUATION OF FRINGE BENEFITS. The Company
shall continue to provide the Employee with the Travel Benefits set forth in
Section 4(d) throughout the Term of this Agreement on the date of Termination ,
as if the Employee's employment under the Agreement had not been terminated.
d) STOCK OPTIONS. Notwithstanding any provision
in any applicable Company benefit plans or agreements (including, but not
limited to, those relating to stock options, stock appreciation rights,
restricted stock awards, stock purchases, pensions, thrift, profit sharing, or
other retirement or employee benefits) to the contrary, all rights to such
benefits previously granted to Employee shall become immediately fully vested
and exercisable as of the Termination Date and shall remain exercisable for a
period thereafter of one (1) year. The provisions of this Section 8(d) shall
supersede, insofar as concerns Employee, any such plans or agreements of the
Company referred to above as of the Effective Date.
e) NO MLTIGATION REQUIRED; NO OTHER ENTITLEMENT
TO BENEFITS UNDER AGREEMENT. The Employee shall not be required in any way to
mitigate the amount of any payment provided for in this Section 8, including,
but not limited to, by seeking other employment, nor shall the amount of any
payment provided for in this Section 8 be reduced by any compensation earned by
the Employee as the result of employment with another employer after the
Termination Date, or otherwise. Except as set forth in this Section 8, following
a termination governed by this Section 8, the Employee shall not be entitled to
any other compensation or benefits set forth in this Agreement, except as may be
separately negotiated by the parties and approved by the Board of Directors of
the Company in writing in conjunction with the termination of Employee's
employment under this Section 8.
9. NONCOMPETITION PROVISIONS.
a) RIGHT TO COMPANY MATERIALS. Employee agrees
that all styles, designs, lists, materials, books, files, reports,
correspondence, records, and other documents ("Company Materials") used,
prepared, or made available to 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 Employee shall not make or retain any copies thereof.
b) ANTISOLICITATION. Employee promises and
agrees that during the term of this Agreement he 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 eighteen (18) month period commencing on the
Termination Date, Employee promises and agrees that he will not directly or
indirectly solicit any of the Company's employees to work for any
Page 7
business, individual, partnership, firm, corporation, or other entity then in
competition in Hawaii with the business of the Company or any subsidiary or
affiliate of the Company.
10. MERGER OR OTHER CHANGE IN CONTROL. Employee shall
have the right to terminate this Agreement for good reason if at any time
within ninety (90) days after completion of (i) a merger of the Company with
any other corporation as a result of which the shareholders of the Company
immediately prior to such merger fail to win at least a majority of the
voting securities of the surviving corporation in such merger immediately
after the merger, and members of the Board of Directors of the Company,
elected by the shareholders of the Company or by a majority of the directors
of the Company who were elected by the stockholders of the Company, fail to
constitute a majority of the Board of Directors of the surviving corporation
following completion of the merger, or (ii) a sale of all or substantially
all of the assets of the Company to another corporation, if (x) a majority of
the directors of the ultimate parent of the purchase immediately following
the purchase and sale were not members of the Board of Directors of the
Company immediately prior to such sale, AND (y) shareholders of the Company
immediately prior to such sale do not hold a majority of the voting
securities of the ultimate parent of the purchasing corporation following
completion of such sale; or (iii) a purchase by another person, firm or
corporation of a majority of the voting securities of the Company, AND
following completion of such sale, members of the Board of Directors of the
Company elected by the shareholders of the Company (other than such
purchaser) fail to constitute a majority of the Board of Directors of the
Company.
11. NOTICES. All notices and other communications
under this Agreement shall be in writing and shall be given by facsimile,
first class mail, certified or registered with return receipt requested, or
express mail and shall be deemed to have been duly given three (3) days after
mailing or twenty-four (24) hours after transmission of a facsimile to the
respective persons named below:
If to Company: Hawaiian Airlines, Inc.
Attn: President and Chief Executive Officer
0000 Xxxxxxx Xxxxxx, Xxxxx X-000
Xxxxxxxx, Xxxxxx 00000
with a copy to General Counsel
If to Employee: Xxxxxx X. Xxxxxx, Xx.
0000 Xxxx Xxxxx Xx. #000
Xxxxxxx, XX 00000
Either party may change such party's address for notices by
notice duly given pursuant hereto.
12. 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 Employee shall
each bear their respective attorneys' fees and costs associated with such
dispute.
Page 8
13. 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.
14. 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 express
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
15. 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.
16. 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.
17. 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.
18. 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 is 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.
19. INDEMNIFICATION. The Company shall indemnify and
hold Employee harmless to the maximum extent permitted by Section 415-5 of
the Hawaii Business Corporation Act and the Restated Articles of
Incorporation of the Company, as amended and in accordance with the
Indemnification Agreement between Xxxxxx X. Xxxxxx, Xx. and Hawaiian
Airlines, Inc. dated as of NOVEMBER 14, 1999.
20. 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.
Page 9
IN WITNESS WHEREOF, the Company has caused this Agreement to
be executed by its duly authorized officer, and the Employee has hereunto signed
this Agreement, as of the date first above written.
By:
-----------------------------------------
Xxxx X. Xxxxx
President and Chief Executive Officer
By:
-----------------------------------------
Xxxx X. Xxxxxxxxx
Executive Vice President and
Chief Financial Officer
"Company"
--------------------------------------------
Xxxxxx X. Xxxxxx, Xx.
"Employee"
