EXHIBIT 10.1
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
-----------------------------------------
This AMENDED AND RESTATED EMPLOYMENT AGREEMENT ("Agreement"),
effective as
of August 18, 2005 (the "EFFECTIVE DATE"), is entered by and
between MARK B.
DUNKERLEY ("EMPLOYEE") and each of Hawaiian Holdings, Inc. ("HH")
and its wholly
owned subsidiary Hawaiian Airlines, Inc. ("HA"; which companies are
are
individually and collectively identified herein as the "COMPANY").
The parties hereto desire to amend and restate that certain
employment
agreement dated as of December 23, 2002 by and between the Employee
and the
Company (the "Original Agreement") and replace it in its entirety
with this
Agreement. The Company desires to re-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 PRESIDENT AND CHIEF EXECUTIVE OFFICER; SERVICE AS
DIRECTOR. The Company does hereby employ, engage, and hire the
Employee as
President and Chief Executive Officer 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 executive officer of a
corporation and
such other duties as the Board of Directors of the Company shall
from time to
time prescribe and as provided in the Bylaws of the Company,
including but not
limited to direct responsibility for and supervision of all aspects
of the
business and affairs of HH and HA. The Employee shall report
directly to the
respective Board of Directors of each of HH and HA, as applicable,
for the
Employment Period. No other person will occupy a position or have
any authority
with respect to the Company that is equal to or greater than the
position and
authority of the Employee. 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 respective
Board of
Directors of HH and HA, as applicable, and reasonable absences
because of
illness excepted, it being understood that Employee shall be
eligible for up to
four (4) weeks of vacation annually, subject to requirements of
operations and
as duties may permit provided that unused vacation shall not be
accrued and the
Company shall not make payment to Employee for unutilized vacation.
Furthermore,
the Employee shall exercise due diligence and care in the
performance of his
duties to the Company under this Agreement. Effective as of the
Effective Date
and during the Term, (i) HH shall cause Employee to be appointed to
serve as a
director of the Board of Directors of HA and (ii) the Board of
Directors of HH
shall nominate Employee for election to HH's Board of Directors and
HH shall use
its good faith efforts to elect Employee to such position.
President and Chief Executive Officer
Amended and Restated Employment Agreement
Page 2
2. TERM OF AGREEMENT. The term of this Agreement ("Term") shall
commence on
the Effective Date and shall continue for a period of thirty-six
(36) 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." The Company agrees that it
will discuss
with Employee at least twelve months prior to the Termination Date,
its
intentions with respect to any extension of its employment of
Employee beyond
the Termination Date.
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 Five Hundred and Fifty
Thousand Dollars
($550,000.00) 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
Board of Directors of HH or HA in either of their respective sole
and absolute
discretion.
b) PERFORMANCE/INCENTIVE BONUS. Employee will be eligible to
receive
an annual performance/incentive bonus (with a pro rata adjustment
for any
partial year period caused by the Termination Date being other than
December 31
of any year) of a target amount of one hundred percent (100%) and a
maximum of
two hundred percent (200%) of his annual salary. Employee's bonus
for the 2005
year will be based on the full calendar year. The bonus plan will
be based upon
achievement of goals set forth in a plan approved by the Company,
with the
intention that such plan will provide for goals that may be
adjusted by the
Board of Directors from time to time to reflect the nature of the
airline
industry and changes in competition. Employee and the Company may,
but shall
have no obligation to, agree that a portion of Employee's
performance/incentive
bonus will be paid in shares of common stock of HH valued in a
manner agreed
upon by the parties.
c) STOCK INCENTIVE PLAN. Employee shall receive a grant of options
to
purchase 1,044,000 shares (the "Options") of the common stock of
HH. 300,000 of
the Options were granted on June 10, 2005, and 744,000 of the
Options were
granted in July 2005. All Options will vest as follows: (i)
one-third on January
1, 2006; (ii) one-third on January 1, 2007; and (iii) one-third on
January 1,
2008. In the event that HH shall distribute to the holders of its
common stock
rights to acquire its common stock or makes any offer solely to
holders of its
common stock to subscribe for or obtain common stock or warrants,
options,
convertible securities or other instruments convertible into, or
exercisable
for, common stock in each case that are (i) distributed or offered
solely to
common stock holders at any time within three (3) years of the
Effective Date
and (ii) entitle the common stockholders to acquire common stock at
a discount
to, or at a price less than, the fair market value (determined by
reference to
such value on the day preceding the public announcement of any such
distribution
or offering) of common
President and Chief Executive Officer
Amended and Restated Employment Agreement
Page 3
stock (collectively, the "Rights"), then the Company shall also
grant Employee
additional options to purchase shares of the common stock of HH
(the "Additional
Options") on the date that is two business days after the last day
for the
exercise of the Rights. The number of shares represented by the
Additional
Options shall equal (i) that percentage which the number of shares
of common
stock purchasable or issuable pursuant to the Rights bears to the
number of
outstanding shares of common stock on the date the Rights are
distributed or
offered times (ii) the number of shares of common stock subject to
the
unexercised Options. One-third of the Additional Options shall vest
on each of
the dates the Options would vest (or to the extent any of such
Options have
already vested on the date the Additional Options are granted, a
pro rata
portion of the Additional Options shall be vested when the
Additional Options
are granted). The exercise price per share of the Options and the
Additional
Options (collectively, the "Total Options") shall be equal to the
fair market
value of the common stock of HH on the grant date. Employee and HH
shall enter
into separate stock option agreements reflecting the terms of the
Total Options,
which shall not conflict in any way with the terms set forth herein
and shall
include provisions for equitable adjustment in the event of a stock
split, stock
dividend or other similar event affecting the common stock of HH.
The Company
shall use its good faith efforts to ensure that a sufficient number
of options
remain available for issuance under its approved stock option plan
of HH. The
Company shall use its good faith efforts to register any shares of
common stock
issuable upon exercise of the Total Options on Form S-8 and to
maintain such
registration for as long as Employee holds such shares or Total
Options (as the
case may be). The Company hereby represents and warrants to the
Employee that,
after taking into account all of the shares, rights to acquire,
warrants,
options, convertible securities and any other instrument
convertible into or
exercisable for capital stock of HH on the Effective Date, other
than any
options under stock option plans of the Company (the "Total
Shares"), the shares
issuable to the Employee upon the exercise of all of the Options
will represent
approximately two and twenty-five hundredths percent (2.25%) of the
Total
Shares.
d) 1996 STOCK INCENTIVE PLAN. Employee's existing options to
purchase
200,000 shares of stock of HH pursuant to the Company's 1996 Stock
Incentive
Plan, as Amended, shall remain outstanding in accordance with the
terms of
Employee's existing option agreement.
e) 401K Plan. Employee shall be eligible to participate in the
Company's 401K retirement plan with employer "match" contributions
of 2% of
Employee's Base Salary or such greater percentage as may be
generally made
available to non-contract employees, in each case to the maximum
allowable legal
limit
4. FRINGE BENEFITS. Employee shall be entitled to participate, at
the
Company's expense, 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.
President and Chief Executive Officer
Amended and Restated Employment Agreement
Page 4
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 an
automobile
allowance of $1000.00 per month.
c) TRAVEL BENEFITS. Employee and Employee's spouse or domestic
partner
shall be entitled to travel benefits on Company flights (but not
charter
flights) at the PS2F/PS2Y category. Employee's eligible dependents,
if any,
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 or domestic partner; when not traveling with
Employee and/or
Employee's spouse or domestic partner, 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 spouse or domestic partner and 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.
d) 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.
e) 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.
f) LIFE INSURANCE. The Company shall pay the premium for term life
insurance coverage of $300,000.
5. RELOCATION.
a) The Company will reimburse the Employee for eligible costs
related
with relocation to Hawaii, which will include but not be limited to
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; and ii) 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, inclusive of tax.
President and Chief Executive Officer
Amended and Restated Employment Agreement
Page 5
b) If, during the first three (3) years following the Effective
Date,
the Company terminates the Employee's employment without cause, or
if Employee
terminates his employment pursuant to Section 7(d) hereunder, then
the Company
will reimburse the Employee for eligible costs related with
relocation from
Hawaii, which will include but not be limited to the following
items: i) the
reasonable out-of-pocket costs of moving his household goods and
belongings from
Hawaii, including packing, unpacking, shipping and insurance, (ii)
the shipment
of one automobile, and (iii) travel costs for Employee and his
domestic partner
directly related to Employee's relocation from Hawaii (collectively
referred to
as the "Termination Expenses"). The Termination Expenses will be
reimbursed up
to a maximum of $50,000.00, inclusive of tax.
c) If Employee purchases a residence in Honolulu and within one
year
of the Effective Date is terminated by the Company without cause,
or if Employee
terminates employment hereunder within said first year of
employment pursuant to
Section 7(d) or this Agreement, Employee shall have the option,
exercisable on
written notice to the Company delivered within ninety (90) days of
said
termination, to sell said purchased residence to the Company at the
original
purchase price. The closing of the sale of the Employee's residence
to the
Company pursuant to this provision shall take place no later than
ninety (90)
days after the receipt by the Company of the written notice of the
exercise by
the Employee of the option set forth herein.
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.
President and Chief Executive Officer
Amended and Restated Employment Agreement
Page 6
7. TERMINATION OF EMPLOYEE'S EMPLOYMENT.
a) DEATH; DISABILITY. If the Employee dies while employed by the
Company, his employment shall immediately terminate. 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. In the
event of Disability or death, the Employee or Employee's
beneficiaries, as the
case
