Exhibit 10(o)
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT ("Agreement"), effective as of May 1, 1996
("Effective Date") is entered by and between Xxxx X. Xxxxxxxxx ("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 AND CHIEF FINANCIAL
OFFICER OF THE COMPANY. The Company does hereby employ, engage, and hire the
Employee as Executive Vice President and Chief Financial Officer of the Company
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 set forth on EXHIBIT A
hereto and such other duties as the Board of Directors and 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 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 Company's Board of Directors
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 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 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 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
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may be increased as determined by the Company's Board of Directors in its
sole and absolute discretion. In addition to the foregoing and in
consideration of Employee entering into this Agreement, Employee shall
receive an initial bonus of Thirty Thousand U.S. Dollars ($30,000.00),
payable in two equal installments of Fifteen Thousand U.S. Dollars
($15,000.00) (the "Installments"). The first Installment will be paid
immediately upon joining the Company. The second Installment shall be paid
immediately following the sixth month of employment with the Company.
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 $600.00 per month.
c) CLUB DUES. The Company shall pay all dues and similar
charges (other than initiation fees) for one combination social and golf club
(Waialae Country Club), one business meal club (The Pacific Club) and one health
or fitness club.
d) TRAVEL BENEFITS. Employee and his spouse shall be entitled
to travel benefits on Company flights (but not charter flights) at the PS2F/PS2Y
category. Employee's dependents shall be entitled to travel benefits on Company
flights (but not charter flights) at the SA2F/SA1Y category. Employee and his
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.
e) 1996 STOCK INCENTIVE PLAN. Employee shall be granted
100,000 options under the Company's 1996 Incentive Stock Plan. The exercise
price will be set at the time of the grant. The vesting period and other terms
will be determined by the Compensation Committee.
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f) 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.
g) BUSINESS EXPENSES. The Company shall reimburse the Employee
for any and all necessary, customary, and usual expenses, properly received in
accordance with Company policies, incurred by Employee on behalf of the Company.
5. 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.
6. 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 effect at the commencement of such
period of Disability. Any such payments made to the
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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 on EXHIBIT A hereto, 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 7 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
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Page 5
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 on EXHIBIT A hereto;
(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
officers 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 7 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 ____ 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.
7. 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
eighteen months (18) months immediately following the Termination Date (such
Base Salary for
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such period being equal to the Employee's Base Salary in effect as of the
Termination Date); and (ii) an amount equal to the bonus payments that would
have been payable to the Employee pursuant to this Agreement had his annual
bonus for each year, or portion thereof, of the eighteen (18) months
immediately following the Termination Date been 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 three (or, if less, the number of years the 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 all Fringe Benefits set forth in Section 4
throughout the remaining eighteen (18) months, 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 his 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
his eligible dependents or beneficiaries with benefits at a level at least
equivalent to the level of benefits for which the Employee and his dependents
and beneficiaries were eligible under such plans immediately prior to the
Termination Date.
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 7(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 MITIGATION 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 7, including, but not limited
to, by seeking other employment, nor shall the amount of any payment provided
for in this Section 7 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 7, following a termination
governed by this Section 7, 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 7.
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Page 7
8. 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 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.
9. 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.
10. 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
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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: Xxxx X. Xxxxxxxxx
0000 Xxxxxxx Xxxxx
Xxxxxxxx, Xxxxxx 00000
Either party may change such party's address for notices by notice
duly given pursuant hereto.
11. 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.
12. 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.
13. 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
14. 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.
15. ENTIRE AGREEMENT; HEADINGS. This Agreement embodies the entire
agreement of the parties respecting the matters within its scope and may be
modified only in wnting. 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.
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16. 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.
17. 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.
18. 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.
19. 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 officer, and the Employee has hereunto signed
this Agreement, as of the date first above written.
By: /s/ Xxxxx X. Xxxxxx
---------------------------
Xxxxx X. Xxxxxx
Its President and
Chief Executive Officer
By: /s/ Xxx X. Xxxxx
---------------------------
Xxx X. Xxxxx
Its Vice President,
General Counsel and
Corporate Secretary
"Company"
/s/ Xxxx X. Xxxxxxxxx
------------------------------
Xxxx X. Xxxxxxxxx
"Employee"
