Exhibit 1.1
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT ("Agreement"), effective as of , 2001
("Effective Date") is entered by and between ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ("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 - CHIEF FINANCIAL
OFFICER-TREASURER. The Company does hereby employ, engage, and hire the Employee
as Executive Vice President, Chief Financial Officer and Treasurer 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 her full time, energy, and skill to the performance of her 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 her 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 and the Term shall continue to be
extended one additional month on the first day of each successive calendar 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 her services to
the Company, a base salary at the rate of Two Hundred Fifty Thousand Dollars
($250,000.00) 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.
Executive Vice President, Chief Financial Officer and Treasurer
Employment Agreement
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).
c) SIGNING BONUS. On the first day of the Employment Period,
Employee shall receive an initial bonus of Seventy-five Thousand Dollars
($75,000.00).
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 her 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 when Employee's automobile
is delivered in Hawaii or when Employee obtains an automobile in Hawaii.
c) CLUB DUES. The Company shall pay all dues and similar
charges (other than initiation fees) for one business meal club and for one
health or fitness club.
d) HOUSING ALLOWANCE. Employee will receive a monthly Housing
Allowance of not less than $1000.00 and not more than $2500.00, the exact amount
to be ascertained once Employee secures permanent housing in Hawaii. The intent
of the Housing Allowance is to bridge the gap between the cost of housing at
Employee's previous location and the cost of housing 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 spouse 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.
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 200,000 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.
Executive Vice President, Chief Financial Officer and Treasurer
Employment Agreement
Page 3
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 receipted in
accordance with Company policies, incurred by Employee on behalf of the Company.
i) DEPENDENT EDUCATION ALLOWANCE. Until Employee's dependent
daughter completes secondary education, Employee will receive an education
allowance equal to the tuition cost for secondary private education, grossed up
for estimated taxes.
5. RELOCATION.
a) The Company will reimburse the Employee for the following
items: i) the reasonable out-of-pocket costs of moving her household goods and
belongings from her 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, inclusive of tax.
b) The Company will provide to Employee, on the first day of
the Employment Period, a lump sum payment of $30,000, inclusive of taxes, for
use in Employee's discretion to cover temporary accommodations and rental car.
6. CONFIDENTIAL INFORMATION. Employee recognizes that by reason of
her employment by and service to the Company she 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 her from
time to time in the course of the performance of her duties hereunder. Employee
acknowledges that such information is a valuable and unique asset of the Company
and agrees that she 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 her 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.
Executive Vice President, Chief Financial Officer and Treasurer
Employment Agreement
Page 4
7. TERMINATION OF EMPLOYEE'S EMPLOYMENT.
a) DEATH. If the Employee dies while employed by the Company,
her 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 her 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 she 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
her duties with the Company due to Disability, the Company shall continue to pay
Employee her 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 7(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,
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.
Executive Vice President, Chief Financial Officer and Treasurer
Employment Agreement
Page 5
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;
(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:
Executive Vice President, Chief Financial Officer and Treasurer
Employment Agreement
Page 6
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 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) CHANGE OF CONTROL PRIOR TO JUNE 30, 2003. If a change of
control, as defined in Section 10, occurs prior to June 30, 2003, all stock
options granted herein to Employee shall immediately vest. If, pursuant to a
change of control which occurs prior to the date on which the Term hereunder is
extended to twenty-four (24) months, Employee is terminated or terminates
employment, the Term shall under such circumstances be extended to a period of
eighteen (18) months and Employee shall be entitled to a relocation allowance of
up to $50,000 should Employee choose to relocate from Hawaii.
f) 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
Executive Vice President, Chief Financial Officer and Treasurer
Employment Agreement
Page 7
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 she 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 she 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.
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, individual or entity, 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:
Executive Vice President, Chief Financial Officer and Treasurer
Employment Agreement
Page 8
If to Company: Hawaiian Airlines, Inc.
Attn: President and Chief Executive Officer
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇-▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
with a copy to General Counsel
If to Employee: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
____________________________________________
____________________________________________
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.
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.
Page 9
Executive Vice President, Chief Financial Officer and Treasurer
Employment Agreement
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.
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.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by its duly authorized officers, and the Employee has hereunto signed
this Agreement, as of the date first above written.
By:
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▇▇▇▇ ▇. ▇▇▇▇▇
President and Chief Executive Officer
By:
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▇▇▇ ▇. ▇▇▇▇▇
Vice President, General Counsel
and Corporate Secretary
"Company"
By:
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▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
"Employee"