EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") dated December 8, 1997 and
effective as of December 15, 1997 ("Effective Date") is entered into by and
between Xxxx Xxxx (the "Employee") and Hawaiian Airlines, Inc., a Hawaii
corporation (the "Company").
The Company desires to establish its right to 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 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 or any Executive Vice
President of the Company shall from time to time prescribe and as provided in
the Bylaws 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 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
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 the Company, a base salary at the rate of TWO HUNDRED TEN
THOUSAND AND NO/100THS DOLLARS ($210,000.00) 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.
(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.
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
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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.
(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.
5. RELOCATION.
(a) 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.
(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
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
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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,
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 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.
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(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.
8. 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.
9. 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.
(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.
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10. 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
0000 Xxxxxxx Xxxxxx, Xxxxx X-000
Xxxxxxxx, Xxxxxx 00000
Phone: 808/000-0000
Fax: 808/000-0000
If to the Employee: Xxxx Xxxx
0000X Xxxxxx
Xxxxxxx, XX 00000
Phone: 713/000-0000
Fax: 713/000-0000
or to such other address which the party receiving the notice has notified the
party giving the notice in the manner aforesaid.
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 the Employee shall 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 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 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.
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.
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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 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.
18. 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.
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 executed
by its duly authorized officers, and the Employee has hereunto signed this
Agreement, as of the date first above written.
HAWAIIAN AIRLINES, INC.
BY: __________________________________
Xxxx X. Xxxxx
Its President and Chief Executive Officer
BY: __________________________________
Xxxx X. Xxxxxxxxx
Its Executive Vice President and
Chief Financial Officer
EMPLOYEE
_____________________________________
Xxxx Xxxx