Exhibit 10(p)
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT ("Agreement"), effective as of June 15, 1996
("Effective Date") is entered by and between Xxxxxxx X. XxXxxx ("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 OPERATING OFFICER
OF THE COMPANY. The Company does hereby employ, engage, and hire the
Employee as Executive Vice President and Chief Operating 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 full
size sedan automobile for business use. If Employee uses the vehicle for
personal travel, an allocated amount will be added to Employee's W-2
compensation.
c) CLUB DUES. Employee shall be entitled to join one business
meal club and one health or fitness club, such dues and similar charges to be
paid by the Company.
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) MOVING EXPENSES. Employee shall be entitled to moving
expenses for the following items, up to a maximum of $50,000: i) movement of
household effects including packing, unpacking, shipping and insurance; ii)
shipment of two automobiles; iii) out of pocket expenses at reasonable
amounts for up to six months temporary living expenses; and iv) closing costs
at actual and reasonable amounts for the sale of Employee's home in Kingwood,
Texas and/or Employee's purchase of a home in Honolulu, Hawaii.
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.
h) 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.
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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 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
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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 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
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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 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
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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.
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
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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 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: Xxxxxxx X. XxXxxx
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
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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.
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
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Its Vice President,
General Counsel and
Corporate Secretary
"Company"
/s/ Xxxxxxx X. XxXxxx
------------------------------
Xxxxxxx X. XxXxxx
"Employee"
