HAWAIIAN HOLDINGS, INC. (NASDAQ:HA) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
Item 5.02
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Departure of Directors or Certain Officers; Election of
Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
(d)
Appointment of New Director
On December 23, 2016, the Board of Directors (the Board) of
Hawaiian Holdings, Inc. (the Registrant) increased the size of
the Board from nine to ten directors and appointed Donald J.
Carty to fill the newly created seat. Mr. Carty previously served
as a member of the Board from July 2004 until February 2007 and
from April 2008 until May 2011.
Hawaiian Holdings, Inc. (the Registrant) increased the size of
the Board from nine to ten directors and appointed Donald J.
Carty to fill the newly created seat. Mr. Carty previously served
as a member of the Board from July 2004 until February 2007 and
from April 2008 until May 2011.
As a non-employee director, Mr. Carty will receive the same
compensation and travel benefits as the Registrants other
non-employee directors under the Registrants non-employee
director compensation policy. The Registrant previously disclosed
the terms of such policy in its definitive proxy statement on
Schedule 14A, filed with the Securities and Exchange Commission
on April 8, 2016. On May 17, 2016, the Registrant amended the
policy to provide that any new non-employee director will
automatically be granted, upon his or her appointment, a pro rata
award of restricted stock units (instead of stock options) based
on the number of restricted stock units granted to the other
non-employee directors on the date of the prior years annual
meeting of stockholders. Accordingly, Mr. Carty was automatically
granted 712 restricted stock units upon his appointment to the
Board. These restricted stock units will vest in full on the day
prior to the Registrants 2017 annual meeting of stockholders
provided that Mr. Carty continues to serve as a director through
such date.
compensation and travel benefits as the Registrants other
non-employee directors under the Registrants non-employee
director compensation policy. The Registrant previously disclosed
the terms of such policy in its definitive proxy statement on
Schedule 14A, filed with the Securities and Exchange Commission
on April 8, 2016. On May 17, 2016, the Registrant amended the
policy to provide that any new non-employee director will
automatically be granted, upon his or her appointment, a pro rata
award of restricted stock units (instead of stock options) based
on the number of restricted stock units granted to the other
non-employee directors on the date of the prior years annual
meeting of stockholders. Accordingly, Mr. Carty was automatically
granted 712 restricted stock units upon his appointment to the
Board. These restricted stock units will vest in full on the day
prior to the Registrants 2017 annual meeting of stockholders
provided that Mr. Carty continues to serve as a director through
such date.
The Registrant and Mr. Carty will also enter into the Registrants
standard form of indemnification agreement.
standard form of indemnification agreement.
There are no transactions between Mr. Carty and the Registrant
that would be reportable under Item 404(a) of Regulation S-K.
that would be reportable under Item 404(a) of Regulation S-K.
A copy of the press release announcing Mr. Cartys appointment is
attached hereto as Exhibit 99.1.
attached hereto as Exhibit 99.1.
(e)
CEO Employment Agreement
On December 24, 2016, Hawaiian Airlines, Inc. (the Company), a
wholly-owned subsidiary of the Registrant, and the Registrant
entered into an amended and restated employment agreement with
the Registrants and the Companys chief executive officer, Mark B.
Dunkerley, effective January 1, 2017 (the Employment Agreement).
The Employment Agreement supersedes the prior employment
agreement among the same parties (the Prior Agreement). The
Employment Agreement expires on March 1, 2018, unless earlier
terminated, but beginning on March 1, 2018, it will renew
automatically for additional one year terms, unless either party
provides the other parties with written notice of nonrenewal by
September 1st>of the year prior to automatic
renewal (the period during which the Employment Agreement governs
Mr. Dunkerleys employment is referred to as the Term).
wholly-owned subsidiary of the Registrant, and the Registrant
entered into an amended and restated employment agreement with
the Registrants and the Companys chief executive officer, Mark B.
Dunkerley, effective January 1, 2017 (the Employment Agreement).
The Employment Agreement supersedes the prior employment
agreement among the same parties (the Prior Agreement). The
Employment Agreement expires on March 1, 2018, unless earlier
terminated, but beginning on March 1, 2018, it will renew
automatically for additional one year terms, unless either party
provides the other parties with written notice of nonrenewal by
September 1st>of the year prior to automatic
renewal (the period during which the Employment Agreement governs
Mr. Dunkerleys employment is referred to as the Term).
Under the Employment Agreement, Mr. Dunkerley is entitled to an
annual base salary of $725,000, and is eligible to receive an
annual bonus at a target of 125%, and maximum of 200%, of his
annual base salary, subject to achievement of goals in the
Companys 2016 Management Incentive Plan (or its successor plan).
annual base salary of $725,000, and is eligible to receive an
annual bonus at a target of 125%, and maximum of 200%, of his
annual base salary, subject to achievement of goals in the
Companys 2016 Management Incentive Plan (or its successor plan).
The Employment Agreement provides that during the first quarter
of 2017, Mr. Dunkerley will be granted equity awards with a value
of approximately $2,100,000, with the number of shares and types
of awards determined in the manner consistent with Mr. Dunkerleys
equity awards granted during 2016.
of 2017, Mr. Dunkerley will be granted equity awards with a value
of approximately $2,100,000, with the number of shares and types
of awards determined in the manner consistent with Mr. Dunkerleys
equity awards granted during 2016.
Under the Employment Agreement, Mr. Dunkerley, his spouse, and
his dependents are eligible to receive certain benefits to travel
on the Companys commercial flights and on other airlines flights
(at the sole discretion of other airlines). Mr. Dunkerley
receives certain other benefits during his employment including a
car allowance of $1,000 per month, participation in the Companys
Executive Long-Term Disability Insurance Plan, participation in
the Companys 401(k) plan, reimbursement for annual physical
exams, and term life insurance coverage in the amount of
$300,000.
his dependents are eligible to receive certain benefits to travel
on the Companys commercial flights and on other airlines flights
(at the sole discretion of other airlines). Mr. Dunkerley
receives certain other benefits during his employment including a
car allowance of $1,000 per month, participation in the Companys
Executive Long-Term Disability Insurance Plan, participation in
the Companys 401(k) plan, reimbursement for annual physical
exams, and term life insurance coverage in the amount of
$300,000.
The provisions of the Prior Agreement regarding treatment of
outstanding equity awards upon change in control and severance
were not modified in the Employment Agreement other than as set
forth in the following sentence. If Mr. Dunkerley remains
employed with the Company through March 1, 2018 and if the
Company achieves pre-tax net profits, determined in accordance
with U.S. generally accepted accounting principles, of at least
an aggregate of one million dollars over any two consecutive
fiscal quarters in 2017, he will receive an additional severance
payment equal to $1,250,000 upon his termination of employment.
This additional severance payment will also be made if Mr.
Dunkerleys employment is terminated by the Company prior to March
1, 2018 other than for cause.
outstanding equity awards upon change in control and severance
were not modified in the Employment Agreement other than as set
forth in the following sentence. If Mr. Dunkerley remains
employed with the Company through March 1, 2018 and if the
Company achieves pre-tax net profits, determined in accordance
with U.S. generally accepted accounting principles, of at least
an aggregate of one million dollars over any two consecutive
fiscal quarters in 2017, he will receive an additional severance
payment equal to $1,250,000 upon his termination of employment.
This additional severance payment will also be made if Mr.
Dunkerleys employment is terminated by the Company prior to March
1, 2018 other than for cause.
The Prior Agreements covenants regarding Mr. Dunkerleys
post-employment conduct are continued in the Employment
Agreement.
post-employment conduct are continued in the Employment
Agreement.
The foregoing description of the Employment Agreement does not
purport to be complete and is qualified in its entirety by
reference to the Employment Agreement, which will be filed as an
exhibit to the Companys Annual Report on Form 10-K to be filed
for the year ending December 31, 2016.
purport to be complete and is qualified in its entirety by
reference to the Employment Agreement, which will be filed as an
exhibit to the Companys Annual Report on Form 10-K to be filed
for the year ending December 31, 2016.
Change in Control and Severance Agreements
On December 23, 2016, the Registrants Compensation Committee
approved a new form of Change in Control and Severance Agreement
for certain of the Companys senior executives (the Severance
Agreements). The Compensation Committee approved this new form
after reviewing the Companys existing change in control and
severance protections and consulting with its independent
compensation consultant. The benefits provided under the
Severance Agreements vary depending on an officers level in the
organization and, for terminations of employment not in
connection with a change in control, have not changed from those
currently provided.
approved a new form of Change in Control and Severance Agreement
for certain of the Companys senior executives (the Severance
Agreements). The Compensation Committee approved this new form
after reviewing the Companys existing change in control and
severance protections and consulting with its independent
compensation consultant. The benefits provided under the
Severance Agreements vary depending on an officers level in the
organization and, for terminations of employment not in
connection with a change in control, have not changed from those
currently provided.
The senior executives who will be parties to these new agreements
include the Companys named executive officers Shannon Okinaka,
Peter Ingram, Ron Anderson-Lehman and Barbara Falvey. Mr.
Dunkerleys change in control and severance benefits are described
under the CEO Employment Agreement section elsewhere in this Form
8-K. The Severance Agreements supersede and replace any prior
severance and change in control arrangements between the
Registrant or the Company and each signatory executive officer.
Each Severance Agreement has a three-year term from its effective
date and renews automatically for additional, one year terms
unless either party provides the other party with written notice
of nonrenewal at least 60 days prior to automatic renewal. The
financial terms described below are those that apply to the named
executive officers and are at the highest level provided to any
officer other than Mr. Dunkerley.
include the Companys named executive officers Shannon Okinaka,
Peter Ingram, Ron Anderson-Lehman and Barbara Falvey. Mr.
Dunkerleys change in control and severance benefits are described
under the CEO Employment Agreement section elsewhere in this Form
8-K. The Severance Agreements supersede and replace any prior
severance and change in control arrangements between the
Registrant or the Company and each signatory executive officer.
Each Severance Agreement has a three-year term from its effective
date and renews automatically for additional, one year terms
unless either party provides the other party with written notice
of nonrenewal at least 60 days prior to automatic renewal. The
financial terms described below are those that apply to the named
executive officers and are at the highest level provided to any
officer other than Mr. Dunkerley.
Under the Severance Agreements, if, within the period beginning
three months prior to and ending 18 months following a change in
control, the executives employment with the Company is terminated
by the Company for a reason other than cause, death, or
disability or the executive terminates his or her employment with
the Company for good reason, then, subject to the effectiveness
of a release of claims in a form acceptable to the Company, such
executive officer will receive these benefits:
three months prior to and ending 18 months following a change in
control, the executives employment with the Company is terminated
by the Company for a reason other than cause, death, or
disability or the executive terminates his or her employment with
the Company for good reason, then, subject to the effectiveness
of a release of claims in a form acceptable to the Company, such
executive officer will receive these benefits:
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A lump sum payment equal to 24 months of his or her base
salary; |
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A lump sum payment equal to 200% of his or her target
annual bonus; |
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A pro-rated annual bonus for the year of termination equal
to the annual bonus that the executive would have received based on corporate achievement against goals with any portion based on individual performance determined at the target level; |
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In lieu of subsidized COBRA or other benefits, and payable
whether or not the executive elects COBRA coverage, continued payments of $3,000 per month for 24 months; and |
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50% of all outstanding equity awards granted to the
executive will immediately vest, and, if applicable, become exercisable. If an outstanding equity award is to vest, or the equity award to vest is to be determined, based on performance criteria, then the equity award will vest as to 50% of the equity award assuming the performance criteria have been achieved at target levels for the performance period(s), unless otherwise provided in the agreement relating to such performance-based equity award. |
The Severance Agreements do not provide for the payment of any
tax gross-ups and do not provide for any benefits triggered
solely by a change in control without a termination of
employment.
tax gross-ups and do not provide for any benefits triggered
solely by a change in control without a termination of
employment.
Under the Severance Agreements, if the executive officers
employment is terminated by the Company for a reason other than
cause, death, or disability or the executive terminates his or
her employment for good reason and such termination does not
occur within the period beginning three months prior to and
ending 18 months following a change in control, then, subject to
a release requirement as described above, such executive officer
will receive these benefits:
employment is terminated by the Company for a reason other than
cause, death, or disability or the executive terminates his or
her employment for good reason and such termination does not
occur within the period beginning three months prior to and
ending 18 months following a change in control, then, subject to
a release requirement as described above, such executive officer
will receive these benefits:
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A lump sum payment equal to 12 months of his or her base
salary; |
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A pro-rated annual bonus for the year of termination
determined as described above; and |
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In lieu of subsidized COBRA or other benefits, and payable
whether or not the executive elects COBRA coverage, continued payments of $3,000 per month for 12 months. |
The foregoing description of the Severance Agreements does not
purport to be complete and is qualified in its entirety by
reference to the form of Change in Control and Severance
Agreement, which will be filed as an exhibit to the Companys
Annual Report on Form 10-K to be filed for the year ending
December 31, 2016.
purport to be complete and is qualified in its entirety by
reference to the form of Change in Control and Severance
Agreement, which will be filed as an exhibit to the Companys
Annual Report on Form 10-K to be filed for the year ending
December 31, 2016.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
99.1 Press Release dated December 28, 2016.
About HAWAIIAN HOLDINGS, INC. (NASDAQ:HA)
Hawaiian Holdings, Inc. is a holding company. The Company, through its subsidiary, Hawaiian Airlines, Inc. (Hawaiian) is engaged in the scheduled air transportation of passengers and cargo. The Company offers transportation amongst the Hawaiian Islands (the Neighbor Island routes); between the Hawaiian Islands and certain cities in the United States (the North America routes), and between the Hawaiian Islands and the South Pacific, Australia, New Zealand and Asia (the International routes), collectively referred to as the Company’s Scheduled Operations. It offers non-stop service to Hawai’i from over 10 the United States gateway cities. It also provides approximately 160 daily flights between the Hawaiian Islands. It operates various charter flights. The Company’s fleet consists of over 20 Boeing 717-200 aircraft for the Neighbor Island routes, and approximately eight Boeing 767-300 aircraft and over 20 Airbus A330-200 aircraft for the North America, International and charter routes. HAWAIIAN HOLDINGS, INC. (NASDAQ:HA) Recent Trading Information
HAWAIIAN HOLDINGS, INC. (NASDAQ:HA) closed its last trading session down -1.60 at 58.00 with 550,537 shares trading hands.