<PAGE>
As filed with the Securities and Exchange Commission on November 15, 1995
Registration No. 33-________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------
HAWAIIAN AIRLINES, INC.
(Exact Name of Registrant as Specified in Its Charter)
----------
HAWAII 99-0042880
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
----------
3375 Koapaka Street
Suite G350
Honolulu, Hawaii 96819
(Address of Principal Executive Offices) (Zip Code)
----------
HAWAIIAN AIRLINES, INC.
1994 STOCK OPTION PLAN
(Full Title of the Plan)
----------
Rae A. Capps
Vice President, General Counsel and Corporate Secretary
3375 Koapaka Street
Suite G350
Honolulu, Hawaii 96819
(Name and Address of Agent For Service)
----------
(808) 835-3700
Telephone Number, Including Area Code, of Agent For Service
----------
With a copy to:
Robert T. Gelber
Gibson, Dunn & Crutcher
333 South Grand Avenue
Los Angeles, California 90071
(213) 229-7388
----------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
==============================================================================================================
Proposed Maximum Proposed Maximum Amount of
Title of Securities Amount to Offering Price Per Aggregate Registration
to be Registered be Registered Share Offering Price Fee
==============================================================================================================
<S> <C> <C> <C> <C>
Class A
Common Stock 600,000 (1) (2) $982,350(2) $197.00(2)
- -------------------------------------------------------------------------------------------------------------
Preferred Stock
Purchase Rights 600,000 (3) $0.00 $0.00 $0.00
==============================================================================================================
</TABLE>
(1) These shares are reserved for issuance pursuant to stock options in the
Hawaiian Airlines, Inc. 1994 Stock Option Plan (the "Plan"). Pursuant to
Rule 416, also being registered are additional shares of Class A Common
Stock as may become available under the Plan through the operation of anti-
dilution provisions.
(2) Estimated in accordance with Rule 457(h) and Rule 457(c) of the Securities
Act of 1933, as amended solely for the purpose of calculating the
registration fee, as follows: $959,850 with respect to 592,500 shares of
Class A Common Stock that are currently under option, based on the price of
$1.62 at which the options may be exercised; and $22,500 with respect to
7,500 shares of Class A Common Stock, based on a price of $3.00 per
share, the average of the high and low trading prices of the Class A Common
Stock of Hawaiian Airlines, Inc. (the "Company") on the American Stock
Exchange on November 8, 1995.
(3) These Preferred Stock Purchase Rights attach to each share of Class A Common
Stock upon issuance.
<PAGE>
EXPLANATORY NOTE
This Registration Statement is being filed by Hawaiian Airlines, Inc.
("Hawaiian" or the "Company") in order to register 600,000 shares of Class A
Common Stock (the "Class A Common Stock" or the "Securities") which have been
reserved for issuance under the Hawaiian Airlines, Inc. 1994 Stock Option Plan,
as amended (the "Plan") (including 600,000 Preferred Stock Purchase Rights (the
"Rights"), one of which attaches to each share of Class A Common Stock issued,
pursuant to the Rights Agreement dated as of December 23, 1994, as amended by
and between the Company and Chemical Trust Company of California, as Rights
Agent). The additional shares of Class A Common Stock that may become available
for purchase in accordance with the provisions of the Plan in the event of
certain changes in the outstanding shares of Class A Common Stock of Hawaiian,
including, among other things, stock dividends, stock splits, reverse stock
splits, reorganizations and recapitalizations, are also being registered.
The material which immediately follows constitutes a reoffer
prospectus, prepared on Form S-3, in accordance with General Instruction C to
Form S-8, to be used in connection with resales of Securities acquired under the
Plan by persons who may be considered affiliates of Hawaiian, as defined in Rule
405 under the Securities Act of 1933, as amended.
<PAGE>
REOFFER PROSPECTUS
HAWAIIAN AIRLINES, INC.
CLASS A COMMON STOCK
($.01 PAR VALUE)
600,000 SHARES
This Prospectus relates to 600,000 shares of Class A Common Stock,
par value $.01 per share ("Class A Common Stock" or the "Securities")
(including 600,000 Preferred Stock Purchase Rights (the "Rights"), one of
which attaches to each share of Class A Common Stock issued, pursuant to the
Rights Agreement dated as of December 23, 1994, as amended by and between the
Company and Chemical Trust Company of California, as Rights Agent), of
Hawaiian Airlines, Inc., a Hawaiian corporation ("Hawaiian" or the "Company")
which have previously been issued or may in the future be issued pursuant to
awards granted under the Hawaiian Airlines, Inc. 1994 Stock Option Plan, as
amended (the "Plan") to, and which may be offered for resale from time to
time by, certain officers and employees of the Company named in "Selling
Shareholders" and Annex 1 hereto (the "Selling Shareholders").
The Company will not receive any of the proceeds from the sale of
the Class A Common Stock offered hereby. The Company will pay all of the
expenses associated with this Prospectus. The Selling Shareholders will pay
all selling and other expenses, if any, associated with any sale of the
Securities.
See "Risk Factors" for certain considerations relevant to an
investment in the Securities.
The Class A Common Stock is listed on the American Stock Exchange
and the Pacific Stock Exchange (Symbol: HA).
________________________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION NOR HAS THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
_______________________________
The date of this Prospectus is November 15, 1995.
<PAGE>
AVAILABLE INFORMATION
The Company has filed a Registration Statement on Form S-8 relating
to the Plan (the "Registration Statement") with the Securities and Exchange
Commission (the "Commission") under the Securities Act of 1933, as amended
(the "Securities Act"), with respect to the Securities covered by this
Prospectus. This Prospectus omits certain information and exhibits included
in the Registration Statement, a copy of which may be obtained upon payment
of a fee prescribed by the Commission or may be examined free of charge at
the principal office of the Commission in Washington, D.C.
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information
with the Commission. Such reports, proxy statements and other information
filed with the Commission by the Company can be inspected and copied at the
public reference facilities maintained by the Commission at 450 Fifth Street,
N.W., Washington, D.C. 20549, and at the regional offices of the Commission
located at 500 West Madison Street, Suite 1400, Chicago, Illinois 60606-2511
and at 7 World Trade Center, Suite 1300, New York, New York 10048. Copies of
such material can be obtained from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed
rates.
The Company's Class A Common Stock is listed on the American Stock
Exchange and the Pacific Stock Exchange (Symbol: HA), and reports and
information concerning the Company can be inspected at such exchanges, 86
Trinity Place, New York, New York 10006 and 301 Pine Street, San Francisco,
California 94104, respectively.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents heretofore filed by the Company with the
Commission are by this reference incorporated in and made a part of this
Prospectus:
(1) The Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1994, including the Financial Statements and Financial
Statement Schedule and the Reports of KPMG Peat Marwick LLP, Independent
Auditors, as amended by Amendment No. 1 on Form 10-K/A and Amendment No. 2
on Form 10-K/A;
(2) The Quarterly Report on Form 10-Q for the period ended March
31, 1995;
(3) The Quarterly Report on Form 10-Q for the period ended June
30, 1995;
(4) The Quarterly Report on Form 10-Q for the period ended
September 30, 1995;
(5) The Current Report on Form 8-K dated June 19, 1995;
(6) The Current Report on Form 8-K dated June 25, 1995;
(7) The Current Report on Form 8-K dated August 22, 1995;
(8) The Current Report on Form 8-K dated October 4, 1995;
(9) The Current Report on Form 8-K dated November 6, 1995;
(10) The Proxy Statement dated August 1, 1995;
(11) The Registration Statement on Form 8-A filed June 20, 1995;
and
2
<PAGE>
(12) All documents filed by the Company pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act after the date of this Prospectus and
prior to the filing of a post-effective amendment which indicates that all
Securities offered hereby have been sold or which deregisters all Securities
then remaining unsold.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained
herein or in any other subsequently filed document which also is or is deemed
to be incorporated by reference herein modifies or supersedes such statement.
Any such statement so modified or superseded shall not be deemed, except as
so modified or superseded, to constitute a part of this Prospectus.
Copies of all documents which are incorporated herein by reference
(not including the exhibits to such documents, unless such exhibits are
specifically incorporated by reference into such documents or into this
Prospectus) will be provided without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, upon a written or
oral request to Hawaiian Airlines, Inc., Attention: Corporate Secretary,
3375 Koapaka St., Suite G350, Honolulu, Hawaii 96819, telephone number (808)
835-3700.
THE COMPANY
The Company's principal executive offices are located at 3375
Koapaka St, Suite G350, Honolulu, Hawaii 96819, and its telephone number is
(808) 835-3700. Additional information regarding the Company is set forth in
the Company's Annual Report on Form 10-K for the fiscal year ended December
31, 1994 (which is incorporated herein by reference).
RISK FACTORS
Prospective investors should consider carefully, in addition to the
other information contained in and incorporated into this Prospectus, the
following information before purchasing the Securities offered hereby.
Historical Losses; Liquidity Shortfalls
---------------------------------------
Prior to 1995, the airline industry suffered poor financial
operating results. Aggregate losses of the U.S. airline industry during the
five calendar years prior to 1995 are said to have exceeded the total of all
cumulative profits from its inception. Since the commencement of
deregulation in 1978, the airline industry has become extremely competitive
and volatile. Increased competition, rising operational costs and pricing
pressure have created financial difficulties for most airlines and many
airlines have been acquired, forced to restructure or ceased operations. The
Air Transportation Association reported that despite record traffic, the
domestic airline industry posted a net loss of approximately $279 million in
1994. However, in October 1995 the Air Transportation Association announced
that it believes U.S. airlines will post operating profits of approximately
$2.2 billion for 1995.
As with other airlines, Hawaiian has been adversely affected by
these poor conditions. Having experienced significant operating losses and
net losses for more than five years, in September 1993, Hawaiian together
with its affiliates, HAL, INC. and West Maui Airport, Inc., filed voluntary
petitions for relief under Chapter 11. Pursuant to the HAL, INC., Hawaiian
Airlines, Inc., and West Maui Airport, Inc. Third Amended Consolidated Plan
of Reorganization, as amended (the "Reorganization Plan"), Hawaiian emerged
from Chapter 11 in September 1994.
The airline industry is a highly cyclical business with substantial
volatility, and airlines frequently experience short-term peak cash
requirements caused by both seasonal fluctuations in traffic
3
<PAGE>
that often put a drain on cash during off-peak periods and other exogenous
factors, such as fuel price fluctuations or unexpected maintenance costs.
Accordingly, airlines require substantial working capital to sustain
continued operations under most conditions. The Company has operated with
limited cash and cash equivalents and a working capital deficit for a number
of years. Working capital deficits are not uncommon in the airline industry
since airlines typically have no product inventories and sales not yet flown
are reflected as current liabilities.
Upon its emergence from Chapter 11, the Company recognized an
extraordinary gain of $190.1 million representing the relief of approximately
$204.7 million in liabilities net of offsets and certain liabilities which
survived. In September 1994, credit facility borrowings were made by the
Company under a financing arrangement with CIT Group/Credit Finance, Inc. In
order to increase liquidity, the Company has engaged in a series of
promotional ticket sale activities. However, as of September 30, 1995, the
Company had a net working capital deficit of $46.3 million.
Notwithstanding the above and other measures, since emerging from
Chapter 11, the Company has continued to experience liquidity shortfalls.
The Company has failed to timely make certain payments due to American
Airlines, Inc. ("American") pursuant to a long term lease agreement (the
"Aircraft Lease Agreement") between the Company and American for the
maintenance and rental of six DC-10 aircraft. As of the date of this
Prospectus, the aggregate amount of payments of lease rent and maintenance
fees due to American that have been deferred with American's consent is
approximately $7.1 million.
On June 1, 1995, the Company and American entered into a further
amendment to the Aircraft Lease Agreement that allowed the Company to delay
making any overdue or further scheduled Deferral Payments until August 22,
1995. This deadline has since been extended, first to October 6, 1995 and as
of the date of this Prospectus, to November 20, 1995. The deferral is
intended to give the Company more time to obtain additional financing. The
Company has engaged an investment bank to assist in efforts to obtain
additional financing. The Company has held a series of discussions with
potential investors to solicit interest in providing additional capital in
return for shares representing an equity interest in the Company.
As a result of and following discussions with potential investors,
on November 6, 1995, the Company signed a letter of intent with a private
investor group to provide $20,000,000 of new equity capital to the Company in
exchange for 18,181,818 shares of the Company's Class A Common Stock. The
letter of intent also contemplates a rights offering to the Company's
existing shareholders, to take place at some point during 1996, at a
substantial discount from the then current market price. The transaction,
which will result in the investor group having six of the current eleven
Board of Director seats, is subject to numerous conditions, including the
negotiation and execution of definitive agreements and certain modifications
to agreements with the Company's unions and certain of its creditors. If the
conditions are satisfied, it is contemplated that the definitive agreements
will be signed in early December 1995, with closing scheduled as soon as
possible thereafter.
The Company currently does not have access to other unutilized
credit facilities and, since there are no remaining unencumbered assets, its
access to additional sources of liquidity remains limited. Unless the
Company is successful in its efforts to raise new equity capital, there may
continue to be liquidity shortfalls in the future. There can be no assurance
that the Company will succeed in solving its liquidity problems or that the
Company will have sufficient cash resources to support its continued
operations. Because of the Company's liquidity shortfall, an adverse change
in events and circumstances could result in the Company being unable to meet
its financial obligations.
Cyclicality of Hawaii Tourism
-----------------------------
The profitability of the Company's operations is strongly
influenced by the conditions of the American, Japanese and other foreign
economies and the popularity of Hawaii as a tourist
4
<PAGE>
destination. Tourism to Hawaii grew strongly during the latter half of the
1980s primarily due to a significant increase in the number of visitors from
Japan and the Far East. During the same period the number of visitors from
North America also grew steadily, though less dramatically. After reaching
its peak in 1990, the Hawaii tourism industry experienced three consecutive
years of decline as its two largest sources of visitors, California and
Japan, both entered the worst recession each respective region has
experienced since World War II. From time to time, various events, such as
Hurricane Iniki and the Persian Gulf War, and industry-specific problems,
such as fare wars and strikes, have had a negative impact on tourism in
Hawaii and have adversely affected the Company's business. Local industry
consultants project moderate tourist demand for the next three fiscal years,
with the Hawaii tourism industry not experiencing pre-recession visitor
counts until 1997. This, combined with the earthquake in Kobe, Japan, the
floods in California, and the devaluation of the Mexican peso, which may
ultimately lure more travelers to Mexican destinations, pose further
challenges for the continued recovery of Hawaii tourism. A significant
decrease in Hawaii tourism could have a material adverse effect on the
Company, and there is no assurance that there will be no such decrease.
Fuel Prices
------------
Fuel is a significant expense for any air carrier and even marginal
changes in fuel prices can greatly impact a carrier's profitability.
Hawaiian's fuel consumption for 1994 was 78,180,000 gallons of fuel at an
average cost per gallon of $0.61, in aggregate representing approximately
14.9% of total operating expenses. The single most important factor
affecting petroleum product prices, including the price of jet fuel,
continues to be the actions of the OPEC countries in setting targets for the
production, and pricing of crude oil. In addition, aviation fuel prices are
affected by the markets for heating oil, diesel fuel, automotive gasoline and
natural gas. Seasonally, second and third quarter jet fuel prices are
typically lower than during the first and fourth quarters as the demand for
heating oil, which competes with jet fuel for refinery production, subsides
and refiners switch to gasoline production which also increases the output of
aviation fuel. All petroleum product prices continue to be subject to
unpredictable economic, political and market factors. Also, the balance
among supply, demand and price has become more reactive to world market
conditions. Accordingly, the price and availability of aviation fuel, as
well as other petroleum products, continues to be unpredictable and there can
be no assurance that Hawaiian will be able to purchase fuel at the rates it
does today.
In addition, in 1993, new taxes were placed on the production of
certain fuels based on their energy content. At the end of October 1995, a
two year moratorium which exempted the airline industry from the effects of
such taxes expired. While there are bills before Congress to extend the
exemption until at least February 1997, which may or may not be passed, the
Company, is subject to and is paying an additional $0.043 per gallon tax on
fuel effective November 1, 1995. The Company cannot predict whether the
exemption will be extended or, if not, whether it will be able to pass on
such additional costs to its customers.
Competition
-----------
The Company's principal competitor in the Interisland market is
Aloha Airlines, Inc. ("Aloha"). Excluding turbo prop competition, Hawaiian
had an Interisland Revenue Passenger Miles ("RPMs") market share of
approximately 41% in 1994 compared to Aloha's market share of approximately
59%. Unlike Hawaiian, Aloha does not engage in Transpacific operations and
derives significant revenues from the Interisland market. In 1994, Aloha
reported revenues of $230 million and an operating loss of $475,000. Aloha's
competitive position has been strengthened through its marketing affiliations
with United Airlines, Inc. ("United"). Aloha is a member of United's
frequent flyer program and also has a code sharing agreement with United.
Aloha principally utilizes sixteen Boeing 737 aircraft with a schedule that
averages approximately 190 flights to service the same basic Interisland
routes as the Company. The Company believes its competitive position was
strengthened when, in the current year it became a member of the American
AAdvantage(R) frequent flyer program. Although the Company believes that the
alliances it established with American
5
<PAGE>
in 1994 (which do not include code sharing) and the other strategies it is
implementing will help in its objective of regaining the dominant position in
the interisland market, there can be no assurance that the Company will be
able to maintain or increase its market share in the Interisland Market.
The Company currently competes with major carriers such as United,
American, Delta, Continental, and Northwest on its Transpacific routes. In
addition to the competition produced by the major carriers, 1994 saw
increased competition through an increase in charters in the Transpacific
market. The influx of charter carriers increased capacity between Honolulu
and U.S. West Coast destinations by as much as, on average, sixty-five
flights per week, which further diluted available scheduled market share and
placed additional downward pressure on fares.
During 1994, Hawaiian flew approximately 880,000 passengers or 2.2
billion RPMs between Hawaii and the cities of Los Angeles, San Francisco,
Seattle, Las Vegas, Portland and Anchorage. Based on information obtained
from the State of Hawaii Department of Transportation, the Company believes
that during the peak seasonal travel period in 1994, the Company maintained
market shares of approximately 12.6% and 14.6% of the total domestic market
into Honolulu based on number of flights and available seats, respectively,
and in 1994, the Company carried approximately 12.0% of the total revenue
passengers into Honolulu from all U.S. mainland domestic sources.
Net Operating Loss Carryforwards ("NOLs")
-----------------------------------------
The Chapter 11 reorganization of the Company resulted in another
"ownership change" of the Company under Section 382 of the Internal Revenue
Code. The Company has elected the annual limitation rules under Section
382(1)(6) of the Internal Revenue Code (the "Section 382(1)(6) limitation").
Under this provision, the Company's ability to utilize NOLs and equivalent
tax credit carryforwards in the future is subject to a minimum annual
limitation of $2.4 million. Any part of the $2.4 million that is not
utilized in a given year may be carried forward to the next year and combined
with that year's annual Section 382(1)(6) limitation. NOLs and general
business credit carryforwards generated after the effective date of the
Reorganization Plan are not subject to the Section 382(1)(6) limitation.
As of December 31, 1994, the Company has NOLs and equivalent
general business credit carryforwards of $99.4 million to offset taxable
income. Of this amount, $68.6 million represents restricted available net
operating losses and $30.8 million represents unrestricted net operating
losses. These losses and credits will expire in the year 2005 at the
earliest. In addition, if the Company is successful in its efforts in
obtaining additional capital in return for shares representing an equity
interest in the Company, the issuance of additional securities could result
in an ownership change of the Company for purposes of Section 382 and thereby
result in additional limitations under Section 382. There can be no
assurances that the Company will be entitled to use all or a significant
portion of its NOLs following an additional issuance of securities.
Transfer Restrictions
---------------------
Article XIII of the Company's Amended Articles of Incorporation, as
amended (the "Amended Articles of Incorporation") prohibits the transfer of
stock or an option prior to the earliest of September 12, 1997, the date on
which the Company's NOL has been reduced to zero or the date on which there
has been an ownership change of the Company within the meaning of Section
382, if the transfer increases the percentage of stock owned by any person or
public group that owns, because of the transfer would own or has since
September 12, 1994 owned more than 4.75% of the outstanding stock, or is, or
as a result of the transfer would be treated as a 5% shareholder within the
meaning of Section 382 of the Code. Such a transfer of stock or an option is
deemed a "Prohibited Transfer" and shall be void ab initio as to the
-- ------
purported transferee.
6
<PAGE>
Article IV of the Amended Articles of Incorporation prohibits the
ownership or control of more than 25% (subject to increase or decrease as
provided in Article IV) of the issued and outstanding Class A Common Stock
(and any other shares of stock of the Company entitled to vote on matters
generally referred to shareholders for a vote) by persons who are not
"Citizens of the United States" as defined in the federal Transportation Act.
The Amended Bylaws of the Company provide that a transfer of shares of Class
A Common Stock (and any other shares of stock of the Company entitled to vote
on matters generally referred to shareholders for a vote) to a person who is
not a "citizen of the United States" shall not be valid except between the
parties to the transfer until the transfer has been recorded on the books of
the Company and also recorded on the Foreign Stock Record of the Company, as
provided for in the Amended Bylaws of the Company.
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of
the Securities offered hereby.
SELLING SHAREHOLDERS
The table attached as Annex I hereto sets forth, as of November 1,
1995 or a subsequent date if amended or supplemented: (a) the name of each
Selling Shareholder and his or her relationship to the Company during the
last three years; (b) the number of shares of Class A Common Stock each
Selling Shareholder beneficially owned prior to this offering; (c) the number
of Securities offered pursuant to this Prospectus by each Selling
Shareholder; and (d) the amount and the percentage of the Company's Class A
Common Stock that would be owned by each Selling Shareholder after completion
of this offering. The information contained in Annex I may be amended or
supplemented from time to time.
PLAN OF DISTRIBUTION
Sales of the Securities offered hereby may be made on the American
Stock Exchange, the Pacific Stock Exchange, the over-the-counter market or
otherwise at prices and on terms then prevailing or at prices related to the
then current market price, or in negotiated transactions. In addition, any
Securities covered by this Prospectus which qualify for sale pursuant to Rule
144 may be sold under Rule 144 rather than pursuant to this Prospectus. The
Company will not receive any part of the proceeds of the sales made
hereunder. All expenses associated with this Prospectus are being borne by
the Company, but all selling and other expenses incurred by a Selling
Shareholder will be borne by such shareholder.
The Securities may be (a) sold in a block trade in which the broker
or dealer so engaged will attempt to sell the shares as agent but may
position and resell a portion of the block as principal to facilitate the
transaction, (b) purchased by a broker or dealer as principal and resale by
such broker or dealer for its account pursuant to this Prospectus, (c) sold
in an exchange distribution in accordance with the rules of such exchange,
and (d) sold in ordinary brokerage transactions and transactions in which the
broker solicits purchases. In effecting sales, brokers or dealers engaged by
the Selling Shareholders may arrange for other brokers or dealers to
participate. Certain Selling Shareholders also may, from time to time,
authorize underwriters acting as their agents to offer and sell Securities
upon such terms and conditions as shall be set forth in any Prospectus
Supplement. Underwriters, brokers or dealers will receive commissions or
discounts from Selling Shareholders in amounts to be negotiated immediately
prior to sale. Such underwriters, brokers or dealers and any other
participating brokers or dealers may be deemed to be "underwriters" within
the meaning of the Securities Act in connection with such sales and any
discounts and commissions received by them and any profit realized by them on
the resale of the Securities may be deemed to be underwriting discounts and
commissions under the Securities Act.
7
<PAGE>
There is no assurance that any of the Selling Shareholders will
offer for sale or sell any or all of the Securities covered by this
Prospectus.
INTEREST OF NAMED EXPERTS AND COUNSEL
The validity of the Class A Common Stock has been passed upon for
the Company by Rae A. Capps, its Vice President, General Counsel and
Corporate Secretary. Ms. Capps owns no shares of Class A Common Stock; she
owns options to purchase 40,000 shares of Class A Common Stock.
The financial statements and financial statement schedule of the
Company as of December 31, 1994 and 1993, and for the period September 12,
1994 through December 31, 1994, the period January 1, 1994 through September
11, 1994, and for each of the years in the two-year period ended December 31,
1993, have been incorporated by reference herein and in the registration
statement in reliance upon the reports of KPMG Peat Marwick LLP, independent
certified public accountants, incorporated by reference herein, and upon the
authority of said firm as experts in accounting and auditing.
The reports of KPMG Peat Marwick LLP covering the December 31, 1994
financial statements and financial statement schedule indicate that the
financial statements of the Company as reorganized (the "Reorganized
Company") reflect the impact of adjustments to reflect the fair value of
assets and liabilities under fresh start accounting and, as a result, the
financial statements of the Reorganized Company are presented on a basis
different than those of the Company prior to reorganization. In addition,
the reports refer to a change in the method of accounting for income taxes.
The reports of KPMG Peat Marwick LLP covering the December 31, 1994
financial statements and financial statement schedule contain an explanatory
paragraph that states that the Company's recurring losses from operations,
deficit working capital and limited sources of additional liquidity, raise
substantial doubt about its ability to continue as a going concern. The
financial statements and financial statement schedule do not include any
adjustments that might result from the outcome of that uncertainty.
8
<PAGE>
ANNEX I
<TABLE>
<CAPTION> Shares to be
Beneficially Owned upon
Completion of
Relationship to Company Shares Beneficially Offering(1)(3)
During Last Owned as of Shares Offered ----------------------
Selling Shareholder Three Years November 1, 1995(1) Hereby(2) Number Percent
----------------------- ----------------------------- ------------------- --------------- ----------------------
<S> <C> <C> <C> <C> <C>
Bruce R. Nobles Chairman of the Board, 304,342 300,000 4,342 *
President and Chief Executive
Officer since September 1994;
President and Chief Executive
Officer from June 1993 to
September 1994
Frank L. Forster Senior Vice President and 60,534 60,000 534 *
Chief Operating Officer since
March 1994; Maintenance
Advisor (consultant) from
1991-March 1994
C. J. David Davies Senior Vice President-Finance 67,672 65,000 2,672 *
and Chief Financial Officer
since July 1993
Clarence K. Lyman Vice President-Finance, 51,670 50,000 1,670 *
Treasurer and Assistant
Corporate Secretary since 1991
Peter W. Jenkins Senior Vice 40,000 40,000 0 *
President-Marketing and Sales
since April 1994
Rae A. Capps Vice President, General 40,000 40,000 0 *
Counsel and Corporate
Secretary since September
1994; Vice President, General
Counsel and Secretary from
September 1993 to September
1994
John P. Solomito Vice President-Customer 9,103 7,500 1,603 *
Services since February 1992
Alexander D. Jamile Vice President-Government and 9,170 7,500 1,670 *
Community Affairs since 1993;
Vice President-Administration/
Governmental and Community
Affairs from October 1992 to
1993
Glen L. Stewart Vice President-Transpacific 9,543 7,500 2,043 *
and Southpacific Marketing
since August 1993; Senior
Vice President-Transpacific
from 1991 to August 1993
Glenn G. Taniguchi Vice President-Schedule 8,338 7,500 838 *
Planning and Reservations
since 1995; Staff Vice
President-Schedule Planning
and Reservations from 1991 to
1995
Michael P. Loo Staff Vice 9,170 7,500 1,670 *
President-Controller since
August 1993
</TABLE>
--------------
(1) Assumes that all options to acquire shares are exercisable within 60
days, although the options do not vest until February 2, 1996.
Includes shares held by Hawaiian Airlines, Inc. Employee Stock Plan, if
any.
(2) Assumes that all options to acquire shares are exercisable immediately.
(3) Assumes that all outstanding options are exercised and all shares
offered hereby are sold, that no additional shares will be acquired and
that no shares other than those offered hereby will be sold.
* Less than 1% of issued and outstanding shares of Class A Common Stock.
9
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
The Company............................. 3
Risk Factors............................ 3
Use of Proceeds......................... 7
Selling Shareholders.................... 7
Plan of Distribution.................... 7
Interest of Named Experts and Counsel... 8
</TABLE>
10
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents heretofore filed by the Company with the
Commission are by this reference incorporated in and made a part of this
Registration Statement:
(i) The Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1994, including the Financial Statements and Financial
Statement Schedule and the Reports of KPMG Peat Marwick LLP, Independent
Auditors, as amended by Amendment No. 1 on Form 10-K/A and Amendment No. 2 on
Form 10-K/A;
(ii) The Quarterly Report on Form 10-Q filed for the period
ended March 31, 1995;
(iii) The Quarterly Report on Form 10-Q filed for the period
ended June 30, 1995;
(iv) The Quarterly Report on Form 10-Q filed for the period
ended September 30, 1995;
(v) The Current Report on Form 8-K dated June 19, 1995;
(vi) The Current Report on Form 8-K dated June 25, 1995;
(vii) The Current Report on Form 8-K dated August 22, 1995;
(viii) The Current Report on Form 8-K dated October 4, 1995;
(ix) The Current Report on Form 8-K dated November 6, 1995;
(x) The Proxy Statement dated August 1, 1995;
(xi) The Registration Statement on Form 8-A filed June 20, 1995;
and
(xii) All documents filed by the Company pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this
Registration Statement and prior to the filing of a post-effective amendment
which indicates that all Securities offered hereby have been sold or which
deregisters all Securities then remaining unsold.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Registration Statement to the extent that a statement
contained herein or in any other subsequently filed document which also is or
is deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this
Registration Statement.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
The validity of the Class A Common Stock has been passed upon for
the Company by Rae A. Capps, its Vice President, General Counsel and
Corporate Secretary. Ms. Capps owns no shares of Class A Common Stock; she
owns options to purchase 40,000 shares of Class A Common Stock.
II-1
<PAGE>
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 415-5 of the Hawaii Business Corporation Act (the "Hawaii
Indemnification Statue") provides that a corporation may indemnify any person
who was or is a party to or is threatened to be made a party to any
proceeding (other than an action by or in the right of the corporation) by
reason of the fact that the person was a director, officer, employee or agent
of the corporation or is or was serving at the request of the corporation in
such a capacity with another enterprise (such person being hereinafter
referred to as the "Indemnitee"). The indemnity may cover expenses
(including attorneys' fees), judgments, fines, settlements, and other amounts
actually and reasonably incurred in connection with such proceeding if the
person acted in good faith and in a manner the person reasonably believed to
be in or not opposed to the best interests of the corporation, and with
respect to any criminal proceeding, had no reasonable cause to believe the
conduct of the person was unlawful.
Section 415-48.5 of the Hawaii Business Corporation Act ("HBCA")
provides that a corporation does not have the power to eliminate or limit the
personal liability of a director for (a) any breach of the director's duty of
loyalty to the corporation or its shareholders, (b) any act or omission of
the director not performed in good faith, or which involves intentional
misconduct or knowing violation of the law, or which constitutes a willful or
reckless disregard of the director's fiduciary duty, (c) the director's
willful or negligent violation of any provision of the HBCA regarding payment
of dividends or stock purchase or redemption, or (d) any transaction from
which the director received an improper benefit.
The Hawaii Indemnification Statute also provides that, in the case
of an action or suit by or on behalf of the corporation, the corporation has
the power to indemnify an Indemnitee against expenses (including attorneys'
fees) actually and reasonably incurred in connection with the defense or
settlement of such action or suit if the Indemnitee acted in good faith and
in a manner the Indemnitee reasonably believes to be in, or not opposed to,
the best interests of the corporation, except that no indemnification may be
made in respect to any claim, issue or matter as to which the Indemnitee had
been adjudged to be liable for negligence or misconduct in the performance of
the Indemnitee's duties to the corporation unless, and only to the extent
that, the court in which the action or suit was brought determines that,
despite the adjudication of liability, but in view of all circumstances of
the case, the Indemnitee is fairly and reasonably entitled to indemnity for
such expenses as such court deems proper. The provision does not, however,
expressly authorize the corporation to indemnify the Indemnitee against
judgments, fines and amounts paid in settlement arising out of a
shareholder's derivative action.
The Hawaii Indemnification Statute further provides that
indemnification is mandatory with respect to expenses incurred in connection
with any action, suit or proceeding, to the extent the Indemnitee is
successful on the merits or otherwise in defense of any such action or claim.
Under the Hawaii Indemnification Statute, indemnification (other
than mandatory indemnification as described in the preceding paragraph) may
be made only upon determination that the Indemnitee has met the applicable
standard of conduct set forth in the statute. This determination must be
made by the Board of Directors by a majority of the quorum consisting of the
directors who were parties to the proceeding, by independent legal counsel in
a written opinion, by the shareholders or by the court in which the
proceeding is or was pending.
The Hawaii Indemnification Statute allows the payment by the
corporation of expenses incurred by an Indemnitee in advance of the final
disposition of an action, suit or proceeding if the Indemnitee provides an
undertaking of repayment. Additionally, it provides that the indemnity
provided by the statute is not exclusive of any other rights to which an
Indemnitee may be entitled under any bylaw, agreement, vote of shareholders
or disinterested directors or otherwise. It also provides that a corporation
may purchase insurance for officers or directors of the corporation.
Article VII of the Company's Amended Articles of Incorporation (the
"Amended Articles of Incorporation") incorporates the provisions of the
Hawaii Indemnification Statute so as to provide the indemnification of the
Hawaii Indemnification Statute to officers and directors of the Company.
Paragraph F of Article VII of the Amended Articles of Incorporation provides
that the indemnity provided
II-2
<PAGE>
by the Amended Articles of Incorporation is nonexclusive of any other rights
of indemnification to which an Indemnitee may be entitled.
The Company has also entered into indemnity agreements with its
directors and certain of its officers and an indemnification trust agreement
with Hawaiian Trust Company, Ltd., as Trustee. The indemnity agreements and
indemnification trust agreement provide the individuals who entered into such
agreement a contractual right to indemnification and the advancement of
defense expenses in addition to any rights provided under the Hawaii
Indemnification Statute, the Company's Amended Articles of Incorporation or
otherwise. The trust agreement funds the Company's obligations for
indemnification under the indemnity agreements.
The statutory provisions cited above and the Amended Articles of
Incorporation also grant the power to the Company to purchase and maintain
insurance which protects officers and directors against any liability
incurred in connection with their services in such a position. Such an
insurance policy has been obtained by the Company.
Finally, the Plan provides that a director who is a member of the
Committee administering the Plan (a "Qualified Director") shall not be liable
for any action or inaction taken by the Committee relating to the Plan or
options, except in circumstances involving the Qualified Director's bad
faith.
ITEM 8. EXHIBITS.
<TABLE>
<CAPTION>
Exhibit No. Description
----------- ----------------------------------------
<C> <S>
4.1 Hawaiian Airlines, Inc. 1994 Stock
Option Plan, as amended
5.1 Opinion of Rae A. Capps, Esq.
23.1 Consent of KPMG Peat Marwick LLP
23.2 Consent of Rae A. Capps, Esq. (included
in Exhibit 5.1)
24.1 Power of Attorney (included on Signature Pages)
99.1 Form of Hawaiian Airlines, Inc.
Nonqualified Stock Option Agreement
</TABLE>
ITEM 9. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement;
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the information
set forth in the registration statement;
II-3
<PAGE>
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the registrant
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 that
are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of
the registrant's annual report pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at the time shall be deemed to be the initial bona fide offering
thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing provisions,
or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than
the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense of
any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City and County of Honolulu, State of
Hawaii, on this 15th day of November, 1995.
HAWAIIAN AIRLINES, INC.
By: /s/ Bruce R. Nobles
---------------------------------
Bruce R. Nobles
Chairman of the Board,
President and Chief Executive Officer
II-5
<PAGE>
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints
Bruce R. Nobles, Rae A. Capps and Clarence K. Lyman his or her true and
lawful attorneys-in-fact and agents, each acting alone, with full powers of
substitution and resubstitution, for him or her and in his or her name, place
and stead, in any and all capacities, to sign any and all amendments
(including post-effective amendments) to this registration statement, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, each acting alone, full powers and authority to
do and perform each and every act and thing requisite and necessary to be
done in and about the premises, as fully to all intents and purposes as he or
she might, or could do in person, hereby ratifying and confirming all that
said attorneys-in-fact and agents, each acting alone, or his or her
substitute or substitutes may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
Signature Title Date
-------------------------- ---------------------------- -----------------
<S> <C> <C>
/s/ Bruce R. Nobles Chairman of the Board, November 15, 1995
-------------------------- President and Chief
Bruce R. Nobles Executive Officer (Principal
Executive Officer)
/s/ C.J. David Davies Senior Vice President - November 15, 1995
-------------------------- Finance and Chief Financial
C.J. David Davies Officer (Principal Financial
and Accounting Officer)
/s/ Martin Anderson Director November 15, 1995
--------------------------
Martin Anderson
/s/ David Urrea Director November 15, 1995
--------------------------
David Urrea
/s/ Carol A. Fukunaga Director November 15, 1995
--------------------------
Carol A. Fukunaga
/s/ Samson Poomaihaelani Director November 15, 1995
--------------------------
Samson Poomaihaelani
/s/ Jeffrey A. Brodsky Director November 15, 1995
--------------------------
Jeffrey A. Brodsky
/s/ Clifton Kagawa Director November 15, 1995
--------------------------
Clifton Kagawa
/s/ Einar Olafsson Director November 15, 1995
--------------------------
Einar Olafsson
/s/ Todd G. Cole Director November 15, 1995
--------------------------
Todd G. Cole
/s/ Richard Humphreys Director November 15, 1995
--------------------------
Richard Humphreys
/s/ Samuel A. Woodward Director November 15, 1995
--------------------------
Samuel A. Woodward
</TABLE>
II-6
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description
----------- -------------------------------------
<C> <S>
4.1 Hawaiian Airlines, Inc. 1994 Stock
Option Plan, as amended
5.1 Opinion of Rae A. Capps, Esq.
23.1 Consent of KPMG Peat Marwick LLP
23.2 Consent of Rae A. Capps, Esq. (included
in Exhibit 5.1)
24.1 Power of Attorney (included on Signature Pages)
99.1 Form of Hawaiian Airlines, Inc.
Nonqualified Stock Option Agreement
used in connection with Hawaiian
Airlines, Inc. 1994 Stock Option Plan
</TABLE>
<PAGE>
EXHIBIT 4.1
HAWAIIAN AIRLINES, INC.
1994 STOCK OPTION PLAN
AS AMENDED
ARTICLE I
DEFINITIONS
1.01 Capitalized terms used in this Plan and not otherwise defined shall
have the meanings set forth below:
(a) "BOARD" shall mean the Board of Directors of the Company.
(b) "COMMISSION" shall mean the Securities and Exchange Commission.
(c) "COMMITTEE" shall mean the committee appointed by the Board to
administer the Plan and consisting of three Qualified Directors, each of whom,
during such time as one or more Eligible Employees may be subject to Section 16
of the Exchange Act, shall be disinterested within the meaning of Rule 16b-3
under the Exchange Act; provided however, that the number of members of the
Committee may be reduced or increased from time to time by the Board to the
number required by Rule 16b-3 under the Exchange Act, as then in effect.
(d) "COMPANY" shall mean Hawaiian Airlines, Inc., a Hawaii
corporation, and, when appropriate in context, its subsidiaries and/or
affiliates.
(e) "ELIGIBLE EMPLOYEE" shall mean an officer or key employee of the
Company (as determined by the Committee) other than non-employee directors of
the Company and members of the Committee.
(f) "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended.
(g) "FAIR MARKET VALUE" of a share of the Company's capital stock as
of a particular date shall be: (a) if the stock is listed on an established
stock exchange or exchanges, the mean between the highest and lowest sale prices
of the stock quoted for such date in the Transactions Index of each such
exchange as averaged with such mean price as reported on any and all other
exchanges, as published in "The Wall Street Journal" and determined by the
Committee, or, if no sale price was quoted in any such Index for such date, then
as of the next preceding date on which such a sale price was quoted, provided
that the mean on such preceding date is not less than 100% of the fair market
value of the stock on the date the Option is granted; or, (b) if the stock is
not then listed on an exchange, the average of the closing bid and asked prices
per share for the stock in the over-the-counter market as quoted on NASDAQ on
such date; or, (c) if the stock is not then listed on an exchange or quoted on
NASDAQ, an amount determined in good faith by the Committee.
(h) "INCENTIVE STOCK OPTION" shall mean an option to purchase Class A
Common Stock of the Company granted under this Plan that qualifies as an
incentive stock option under Section 422 of the Internal Revenue Code.
(i) "INTERNAL REVENUE CODE" shall mean the Internal Revenue Code of
1986, as amended from time to time.
<PAGE>
(j) "JUST CAUSE DISMISSAL" shall mean a termination of a Participant's
employment for any of the following reasons: (i) the Participant violates any
reasonable rule or regulation of the Board or the Participant's superiors or the
Chief Executive Officer or President of the Company that results in damage to
the Company or which, after written notice to do so, the Participant fails to
correct within a reasonable time; (ii) any willful misconduct or gross
negligence by the Participant in the responsibilities assigned to him or her;
(iii) any willful failure to perform his or her job as required to meet Company
objectives; (iv) any wrongful conduct of a Participant which has an adverse
impact on the Company or which constitutes a misappropriation of Company assets;
(v) the Participant's performing services for any other person or entity which
competes with the Company while he or she is employed by the Company, without
the written approval of the Chief Executive Officer or President of the Company;
or (vi) any other conduct that the Board or Committee determines constitutes
Just Cause for Dismissal.
(k) "NONQUALIFIED STOCK OPTION" shall mean an option to purchase Class
A Common Stock of the Company granted under this Plan that is not an Incentive
Stock Option.
(l) "OPTION" shall mean an option to purchase Class A Common Stock of
the Company granted under this Plan, and can be an Incentive Stock Option or a
Nonqualified Stock Option.
(m) "PARENT" means a "parent corporation" as that term is defined in
Section 424(e) of the Internal Revenue Code.
(n) "PARTICIPANT" shall mean an Eligible Employee who has been granted
an Option.
(o) "PERMANENT DISABILITY" shall mean that the Participant becomes
physically or mentally incapacitated or disabled so that he or she is unable to
perform substantially the same services as he or she performed prior to
incurring such incapacity or disability (the Company, at its option and expense,
being entitled to retain a physician to confirm the existence of such incapacity
or disability, and the determination of such physician to be binding upon the
Company and the Participant), and such incapacity or disability continues for a
period of three consecutive months or six months in any twelve-month period or
such other period(s) as may be determined by the Committee with respect to any
Option, provided that for purposes of determining the period during which an
Incentive Stock Option may be exercised pursuant to Section 3.07(b)(2) hereof,
Permanent Disability shall mean "permanent and total disability" as defined in
Section 22(e) of the Internal Revenue Code.
(p) "PLAN" shall mean this Hawaiian Airlines, Inc. 1994 Stock Option
Plan.
(q) "QUALIFIED DIRECTOR" shall mean any member of the Board who is not
(a) a current employee of the Company, or any Parent or Subsidiary of the
Company, (b) a former employee of such entities who is receiving compensation
therefrom for prior services (other than qualified plan benefits), (c) a former
officer of such entities, or (d) a person receiving compensation from such
entities for personal services in any capacity other than as a director.
(r) "SECURITIES ACT" shall mean the Securities Act of 1933, as
amended.
(s) "SUBSIDIARY" means a "subsidiary corporation" as that term is
defined in Section 424(f) of the Internal Revenue Code.
2
<PAGE>
ARTICLE II
GENERAL
2.01 ADOPTION. Pursuant to the Third Amended Consolidated Plan of
Reorganization of HAL, Inc., Hawaiian Airlines, Inc. and West Maui Airport,
Inc. dated August 29, 1994, this Plan has been adopted by the Board and deemed
approved by the stockholders of the Company and is effective as of September 12,
1994.
2.02 PURPOSE. The Plan is designed to promote the interests of the
Company and its stockholders by using investment interests in the Company to
attract and retain key personnel and to encourage and reward their contributions
to the performance of the Company.
2.03 ADMINISTRATION. The Plan shall be administered by the Committee,
which, subject to the express provisions of the Plan, shall have the power to
construe the Plan and any agreements defining the rights and obligations of the
Company and Participants thereunder, to determine all questions arising
thereunder, to adopt and amend such rules and regulations for the administration
thereof as it may deem desirable, and otherwise to carry out the terms of the
Plan and such agreements. The interpretation and construction by the Committee
of any provisions of the Plan or of any Option granted under the Plan shall be
final. Any action taken by, or inaction of, the Committee relating to this Plan
or Options shall be within the absolute discretion of the Committee and shall be
conclusive and binding upon all persons. No member of the Committee shall be
liable for any such action or inaction except in circumstances involving bad
faith of himself or herself. Subject only to compliance with the express
provisions hereof, the Committee may act in its absolute discretion in matters
related to this Plan or Options. Subject to the requirements of Section
1.01(c), the Board may from time to time increase or decrease the number of
members of the Committee, remove from membership on the Committee all or any
portion of its members, and appoint such person or persons as it desires to fill
any vacancy existing on the Committee, whether caused by removal, resignation or
otherwise.
2.04 PARTICIPATION. A person shall be eligible to receive grants of
Options under this Plan if, at the time of the Option's grant, he or she is an
Eligible Employee.
2.05 SHARES OF CLASS A COMMON STOCK SUBJECT TO THE PLAN AND GRANT LIMIT.
The shares that may be issued upon exercise of Options granted under the Plan
shall be authorized and unissued shares of the Company's Class A Common Stock or
previously issued shares of the Company's Class A Common Stock reacquired by the
Company. The aggregate number of shares that may be issued upon exercise of
Options granted under the Plan shall not exceed 600,000 shares of Class A Common
Stock, subject to adjustment in accordance with Article IV. The maximum number
of shares of Class A Common Stock for which options may be granted to any one
Eligible Employee during any calendar year shall be 300,000, subject to
adjustment in accordance with Article IV.
2.06 AMENDMENTS. The Company's Board of Directors or the Committee may,
insofar as permitted by law, from time to time suspend or discontinue the Plan
or revise or amend it in any respect whatsoever (including, without limitation,
to comply with or take advantage of changes in the rules promulgated under
Section 16 of the Exchange Act or under the Internal Revenue Code), except that
the Committee may not amend Section 4.03 and except that no such amendment shall
alter or impair or diminish any rights or obligations under any Option
theretofore granted under the Plan without the consent of the person to whom
such Option was granted. In addition, if an amendment to the Plan would
increase the number of shares subject to the Plan or the maximum number of
shares for which Options may be granted to each Eligible Employee during any
calendar year (as adjusted under Article IV), change the class of persons
eligible to receive Options under the Plan, extend the final date upon which
Options may be granted under the Plan, or otherwise materially increase the
benefits accruing to participants in a manner not
3
<PAGE>
specifically contemplated herein or affect the Plan's compliance with Rule 16b-3
under the Exchange Act or applicable provisions of the Internal Revenue Code,
the amendment shall be approved by the Company's stockholders to the extent
required to comply with Rule 16b-3 under the Exchange Act or applicable
provisions of or rules under the Internal Revenue Code.
2.07 TERM OF PLAN. Options may be granted under the Plan until the tenth
anniversary of the effective date of the Plan, whereupon the Plan shall
terminate. No Options may be granted during any suspension of this Plan or
after its termination. Notwithstanding the foregoing, each Option properly
granted under the Plan shall remain in effect until such Option has been
exercised or terminated in accordance with its terms and the terms of the Plan.
2.08 RESTRICTIONS. All Options granted under the Plan shall be subject
to the requirement that, if at any time the Company shall determine, in its
discretion, that the listing, registration or qualification of the shares
subject to Options granted under the Plan upon any securities exchange or under
any state or federal law, or the consent or approval of any government
regulatory body, is necessary or desirable as a condition of, or in connection
with, the granting of such an Option or the issuance, if any, or purchase of
shares in connection therewith, such Option may not be exercised in whole or in
part unless such listing, registration, qualification, consent or approval shall
have been effected or obtained free of any conditions not acceptable to the
Company. Unless the shares of stock to be issued upon exercise of an Option
granted under the Plan have been effectively registered under the Securities Act
of 1933 as now in force or hereafter amended, the Company shall be under no
obligation to issue any shares of stock covered by any Option unless the person
who exercises such Option, in whole or in part, shall give a written
representation and undertaking to the Company satisfactory in form and scope to
counsel to the Company and upon which, in the opinion of such counsel, the
Company may reasonably rely, that he or she is acquiring the shares of stock
issued to him or her pursuant to such exercise of the Option for his or her own
account as an investment and not with a view to, or for sale in connection with,
the distribution of any such shares of stock, and that he or she will make no
transfer of the same except in compliance with any rules and regulations in
force at the time of such transfer under the Securities Act of 1933, or any
other applicable law, and that if shares of stock are issued without such
registration, a legend to this effect may be endorsed upon the securities so
issued.
2.09 NONASSIGNABILITY. No Option granted under the Plan shall be
assignable or transferable by the grantee except by will or by the laws of
descent and distribution or, in the discretion of the Committee and under
circumstances that would not adversely affect the interests of the Company or
the qualification of an Incentive Stock Option, or, in the case of a Participant
subject to Section 16 of the Exchange Act, would not be inconsistent with Rule
16b-3 thereunder, pursuant to a nominal transfer that does not result in a
change in beneficial ownership or upon dissolution of marriage pursuant to a
qualified domestic relations order or division of community or marital property.
During the lifetime of a Participant, an Option granted to him or her shall be
exercisable only by the Participant (or the Participant's permitted transferee)
or his or her guardian or legal representative.
2.10 WITHHOLDING TAXES. Whenever shares of stock are to be issued upon
exercise of an Option granted under the Plan or subsequently transferred, the
Committee shall have the right to require the Participant to remit to the
Company an amount sufficient to satisfy any federal, state and local withholding
tax requirements prior to the delivery of any certificate or certificates for
such shares. The Committee may, in the exercise of its discretion, allow
satisfaction of tax withholding requirements by accepting delivery of stock of
the Company or by withholding a portion of the stock otherwise issuable upon
exercise of an Option.
2.11 RIGHTS OF ELIGIBLE EMPLOYEES AND PARTICIPANTS. A Participant or a
permitted transferee of an Option shall have no rights as a shareholder with
respect to any shares
4
<PAGE>
issuable or issued upon exercise of the Option until the date of the receipt by
the Company of all amounts payable in connection with exercise of the Option,
including the exercise price and any amounts required by the Company pursuant to
Section 2.10. Status as an Eligible Employee shall not be construed as a
commitment that any Option will be granted under this Plan to an Eligible
Employee or to Eligible Employees generally. Nothing contained in this Plan (or
in option agreements or in any other documents related to this Plan or to
Options granted hereunder) shall confer upon any Eligible Employee or
Participant any right to continue in the employ of the Company or constitute any
contract or agreement of employment, or interfere in any way with the right of
the Company to reduce such person's compensation or other benefits or to
terminate the employment of such Eligible Employee or Participant, with or
without cause, but nothing contained in this Plan or any document related hereto
shall affect any other contractual right of any Eligible Employee or
Participant. No person shall have any right, title or interest in any fund or in
any specific asset (including shares of capital stock) of the Company by reason
of any Option granted hereunder. Neither this Plan (or any documents related
hereto) nor any action taken pursuant hereto shall be construed to create a
trust of any kind or a fiduciary relationship between the Company and any
person. To the extent that any person acquires a right to receive an Option
hereunder, such right shall be no greater than the right of any unsecured
general creditor of the Company.
2.12 OTHER COMPENSATION PLANS. The adoption of this Plan shall not
affect any other stock option, incentive, or other compensation plans in effect
for the Company, and the Plan shall not preclude the Company from establishing
any other forms of incentive compensation for employees, directors, or advisors
of the Company.
ARTICLE III
STOCK OPTIONS
3.01 GRANTS OF OPTIONS. Subject to the express provisions of this Plan,
the Committee shall from time to time in its discretion select from the class of
Eligible Employees those individuals to whom Options shall be granted, and shall
determine the terms of such Options (which need not be identical) and the number
of shares of Class A Common Stock for which each may be exercised. Each Option
shall be subject to the terms and conditions of the Plan and such other terms
and conditions established by the Committee as are not inconsistent with the
purpose and provisions of the Plan. One or more Options may be granted to any
Eligible Employee. Options may be Incentive Stock Options or Nonqualified Stock
Options.
3.02 EXERCISE PRICE.
(a) Setting the Exercise Price. The exercise price for each Option
--------------------------
shall be determined by the Committee at the date such Option is granted. The
exercise price may be less than the fair market or publicly traded value of the
Class A Common Stock subject to the Option, provided that in no event shall the
exercise price be less than the par value of the shares of Class A Common Stock
subject to the Option, and provided further that the exercise price of an
Incentive Stock Option shall be not less than such amount as is necessary to
enable such Option to be treated as an "incentive stock option" within the
meaning of Section 422 of the Internal Revenue Code. The Committee, with the
consent of the Participant, may, subject to compliance with statutory or
administrative requirements applicable to Incentive Stock Options, amend the
terms of any Option to provide that the exercise price of the shares remaining
subject to the Option shall be reestablished at an exercise price determined by
the Committee at the date the terms of such Option are amended. No modification
of any other term or provision of any Option which is amended in accordance with
the foregoing shall be required, although the Committee may, in its discretion,
make such further modifications of any such Option as are not inconsistent with
the Plan.
5
<PAGE>
(b) Payment of the Exercise Price. The exercise price shall be
-----------------------------
payable upon the exercise of an Option in legal tender of the United States or
such other consideration as the Committee may deem acceptable, including without
limitation stock of the Company (delivered by or on behalf of the person
exercising the Option or retained by the Company from the stock otherwise
issuable upon exercise and valued at Fair Market Value as of the exercise date),
provided, however, that the Committee may, in the exercise of its discretion,
(i) allow exercise of an Option in a broker-assisted or similar transaction in
which the exercise price is not received by the Company until immediately after
exercise, and/or (ii) allow the Company to loan the exercise price to the person
entitled to exercise the Option, if the exercise will be followed by an
immediate sale of some or all of the underlying shares and a portion of the
sales proceeds is dedicated to full payment of the exercise price and amounts
required by the Company pursuant to Section 2.10.
3.03 OPTION PERIOD AND VESTING. Options granted hereunder shall vest and
may be exercised as determined by the Committee, except that no Option may vest
and become exercisable at any time prior to one year from the date the Option is
granted, and except that exercise of Options after termination of the
Participant's employment shall be subject to Section 3.07. Each Option granted
hereunder and all rights or obligations thereunder shall expire on such date as
shall be determined by the Committee, but not later than l0 years after the date
the Option is granted, or five years after the date of grant in the case of a
recipient of an Incentive Stock Option who at the time of grant owns more than
10% of the combined voting power of the Company (after application of the
constructive ownership rules of Section 424(d) of the Code), or any Parent or
Subsidiary, and shall be subject to earlier termination as herein provided. The
Committee may in its discretion at any time and from time to time after the
grant of an Option accelerate vesting of the Option in whole or part by
increasing the number of shares then purchasable, provided that the total number
of shares subject to the Option may not be increased.
3.04 EXERCISE OF OPTIONS. Except as otherwise provided herein, an Option
may become exercisable, in whole or in part, on the date or dates specified by
the Committee at the time the Option is granted and thereafter shall remain
exercisable until the expiration or earlier termination of the Option. No
Option shall be exercisable except in respect of whole shares, and fractional
share interests shall be disregarded. Not less than 100 shares of stock (or
such other amount as is set forth in the applicable option agreement) may be
purchased at one time unless the number purchased is the total number at the
time available for purchase under the terms of the Option. An Option shall be
deemed to be exercised when the Secretary of the Company receives written notice
of such exercise from the Participant, together with payment of the exercise
price made in accordance with Section 3.02. Upon proper exercise, and subject
to Section 2.10, the Company shall deliver to the person entitled to exercise
the Option or his or her designee a certificate or certificates for the shares
of stock for which the Option is exercised. Notwithstanding any other provision
of this Plan, the Committee may impose, by rule and in option agreements, such
conditions upon the exercise of Options (including, without limitation,
conditions limiting the time of exercise to specified periods) as may be
required to satisfy applicable regulatory requirements, including without
limitation Rule 16b-3 (or any successor rule) under the Exchange Act and any
applicable section of or rule under the Internal Revenue Code.
3.05 LIMITATION ON EXERCISE OF INCENTIVE STOCK OPTIONS. The aggregate
fair market value (determined as of the respective date or dates of grant) of
the stock for which one or more Options granted to any recipient under the Plan
(or any other option plan of the Company or any of its subsidiaries or
affiliates) may for the first time become exercisable as Incentive Stock Options
under the federal tax laws during any one calendar year shall not exceed
$100,000. Any Options granted as Incentive Stock Options pursuant to the Plan
in excess of such limitation shall be treated as Nonqualified Stock Options.
6
<PAGE>
3.06 OPTION AGREEMENTS. Each Option granted under the Plan shall be
evidenced by an option agreement duly executed on behalf of the Company and by
the Eligible Employee to whom such Option is granted stating the number of
shares of Class A Common Stock issuable upon exercise of the Option, the
exercise price, the time during which the Option is exercisable, and the times
at which the Options vest and become exercisable. Such option agreements may
but need not be identical and shall comply with and be subject to the terms and
conditions of the Plan, a copy of which shall be provided to each Option
recipient and incorporated by reference into each option agreement. Any option
agreement may contain such other terms, provisions and conditions not
inconsistent with the Plan as may be determined by the Committee.
3.07 TERMINATION OF EMPLOYMENT.
(a) Termination for Cause. Except as otherwise provided in a written
---------------------
agreement between the Company and a Participant, which may be entered into at
any time before or after termination, in the event of a Just Cause Dismissal of
the Participant, all of the Participant's unexercised Options, whether or not
vested, shall expire and become unexercisable as of the date of such Just Cause
Dismissal.
(b) Termination other than Just Cause Dismissal. Subject to
-------------------------------------------
subsection (a) above and subsection (c) below, and except as otherwise provided
in a written agreement between the Company and the Participant, which may be
entered into at any time before or after termination, in the event of a
Participant's termination of employment for:
(1) any reason other than Just Cause Dismissal, death, or
Permanent Disability, the Participant's unexercised Options, whether or not
vested, shall expire and become unexercisable as of the earlier of (A) the
date such Options would expire in accordance with their terms if the
Participant remained employed or (B) three calendar months after the date
of termination, in the case of Incentive Stock Options, or six months after
the date of termination, in the case of Nonqualified Stock Options.
(2) death or Permanent Disability, the Participant's unexercised
Options, whether or not vested, shall expire and become unexercisable as of
the earlier of (A) the date such Options would expire in accordance with
their terms if the Participant remained employed or (B) twelve (12) months
after the date of termination.
(c) Alteration of Exercise Periods. Notwithstanding anything to the
------------------------------
contrary in Sections 3.07(a) or (b), the Committee may in its discretion
designate shorter or longer periods to exercise Options following a
Participant's termination of employment; provided, however, that any shorter
periods determined by the Committee shall be effective only if provided for in
the Participant's option agreement or if such shorter period is agreed to in
writing by the Committee and the Participant. Notwithstanding anything to the
contrary herein, Options shall be exercisable by a Participant (or his or her
successor in interest) following such Participant's termination of employment
only to the extent that installments thereof had become exercisable on or prior
to the date of such termination; provided, however, that the Committee, in its
discretion, may elect to accelerate the vesting of all or any portion of any
Options that had not become exercisable on or prior to the date of such
termination.
3.08 UNUSED OPTION SHARES. In the event that any outstanding Option
under the Plan expires by reason of lapse of time or is otherwise terminated
without exercise for any reason, then the shares of stock subject to any such
Option which have not been issued upon exercise of the Option shall again become
available in the pool of shares of stock for which Options may be granted under
the Plan.
7
<PAGE>
ARTICLE IV
RECAPITALIZATIONS AND REORGANIZATIONS
4.01 ANTI-DILUTION ADJUSTMENTS. If the outstanding shares of Class A
Common Stock of the Company are increased, decreased, changed into or exchanged
for a different number or kind of shares or other securities through merger,
consolidation, reorganization, recapitalization, reclassification, stock
dividend, stock split, reverse stock split, spin-off or the like, an appropriate
and proportionate adjustment may be made in (w) the maximum number and kind of
shares subject to the Plan, (x) the maximum number of shares for which Options
may be granted to each Eligible Employee during any calendar year, (y) the
number and kind of shares subject to then outstanding Options, and (z) the price
for each share or other unit of any other securities subject to then outstanding
Options. The preceding sentence shall not result in an adjustment to the terms
of an Incentive Stock Option unless such adjustment either (i) would not cause
the Option to lose its status as an Incentive Stock Option or (ii) is agreed to
in writing by the Committee and the Participant. No fractional interests will
be issued under the Plan resulting from any such adjustments.
4.02 DETERMINATION BY THE COMMITTEE. To the extent that the foregoing
adjustments relate to stock or securities of the Company, such adjustments shall
be made by the Committee, whose determination in that respect shall be final,
binding and conclusive. The grant of an Option pursuant to the Plan shall not
affect in any way the right or power of the Company to make adjustments,
reclassifications, reorganizations or changes of its capital or business
structure or to merge or to consolidate or to dissolve, liquidate or sell, or
transfer all or any part of its business or assets.
4.03 CORPORATE TRANSACTIONS. If the Company shall be the surviving
corporation in any merger or consolidation, each outstanding Option shall
pertain and apply to the securities to which a holder of the same number of
shares of Class A Common Stock that are subject to that Option would have been
entitled. A Change in Control of the Company shall cause the Plan and each
outstanding Option to terminate, provided that each Participant shall have the
right immediately prior to or upon such Change in Control to exercise his or her
Option or Options in whole or in part without regard to any vesting
requirements. For purposes hereof, a "Change in Control" means the following
and shall be deemed to occur if any of the following events occur:
(a) Except as provided by subparagraph (c) hereof, the acquisition
(other than from the Company) by any person, entity or group, within the
meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act (excluding,
for this purpose, the Company or its subsidiaries, or any employee benefit
plan of the Company or its subsidiaries which acquires beneficial
ownership of voting securities of the Company), of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of
forty percent (40%) or more of either the then outstanding shares of Class
A Common Stock or the combined voting power of the Company's then
outstanding voting securities entitled to vote generally in the election
of directors; or
(b) Approval by the stockholders of the Company of a reorganization,
merger or consolidation with any other person, entity or corporation,
other than
(i) a merger or consolidation which would result in the voting
securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or
8
<PAGE>
by being converted into voting securities of another entity) more than
fifty percent (50%) of the combined voting power of the voting
securities of the Company or such other entity outstanding immediately
after such merger or consolidation, or
(ii) a merger or consolidation effected to implement a
recapitalization of the Company (or similar transaction) in which no
person or entity acquires forty percent (40%) or more of the combined
voting power of the Company's then outstanding voting securities; or
(c) Approval by the stockholders of the Company of a plan of complete
liquidation of the Company or an agreement for the sale or other
disposition by the Company of all or substantially all of the Company's
assets.
Notwithstanding the preceding provisions of this paragraph, a Change in Control
shall not be deemed to have occurred (l) if the "person" described in the
preceding provisions is an underwriter or underwriting syndicate that has
acquired the ownership of the Company's voting securities solely in connection
with a public offering of the Company's securities or (2) if the "person"
described in the preceding provisions is an employee stock ownership plan or
other employee benefit plan maintained by the Company that is qualified under
the provisions of the Employee Retirement Income Security Act of 1974, as
amended.
9
<PAGE>
EXHIBIT 5.1
November 14, 1995
Hawaiian Airlines, Inc.
3375 Koapaka Street
Suite G350
Honolulu, HI 96819
Re: Registration Statement on Form S-8
----------------------------------
Ladies and Gentlemen:
I have acted as counsel for Hawaiian Airlines, Inc., a Hawaii
corporation (the "Company"), in connection with the registration of 600,000
shares of Class A Common Stock (the "Class A Common Stock") of the Company
issuable under its 1994 Stock Option Plan, as amended (the "Plan"). In
connection therewith, I have examined, among other things, the Registration
Statement on Form S-8 (the "Registration Statement") proposed to be filed by the
Company with the Securities and Exchange Commission on or about November 14,
1995. I have also examined the proceedings and other actions taken by the
Company in connection with the authorization and reservation of the shares of
Class A Common Stock issuable under the Plan and such other matters as I deemed
necessary for purposes of rendering this opinion.
Based upon the foregoing, and in reliance thereon, I am of the opinion
that the shares of Class A Common Stock issuable under the Plan, when issued,
delivered and paid for in accordance with the Plan and the agreements evidencing
awards thereunder and in the manner described in the Registration Statement,
will be validly issued, fully paid and nonassessable.
I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/ RAE A. CAPPS
-----------------
Rae A. Capps
RAC/hjh
<PAGE>
EXHIBIT 23.1
[LETTERHEAD OF KPMG PEAT MARWICK LLP]
P.O. Box 4150
Honolulu, HI 96812-4150
The Board of Directors
Hawaiian Airlines, Inc.:
We consent to incorporation by reference in the Registration Statement on Form
S-8 of Hawaiian Airlines, Inc. of our reports dated April 14, 1995, relating to
the balance sheets of Hawaiian Airlines, Inc. as of December 31, 1994 and 1993,
and the related statements of operations, shareholders' equity (deficit) and
cash flows for the period September 12, 1994 through December 31, 1994, the
period January 1, 1994 through September 11, 1994, and for each of the years in
the two-year period ended December 31, 1993, and relating to the financial
statement schedule for the three-year period ended December 31, 1994, which
reports appear in the December 31, 1994 annual report on Form 10-K of Hawaiian
Airlines, Inc., and to the reference to our firm under the heading "Experts" in
the prospectus.
Our reports dated April 14, 1995, indicate that the financial statements of the
Reorganized Company reflect the impact of adjustments to reflect the fair value
of assets and liabilities under fresh start accounting and, as a result, the
financial statements of the Reorganized Company are presented on a different
basis than those of the Predecessor Company. In addition, our reports refer to a
change in the method of accounting for income taxes.
Our reports dated April 14, 1995, contain an explanatory paragraph that states
that the Company's recurring losses from operations, deficit working capital and
limited sources of additional liquidity raise substantial doubt about its
ability to continue as a going concern. The financial statements and financial
statement schedule do not include any adjustments that might result from the
outcome of that uncertainty.
/s/ KPMG PEAT MARWICK LLP
Honolulu, Hawaii
November 14, 1995
<PAGE>
EXHIBIT 99.1
HAWAIIAN AIRLINES, INC.
NONQUALIFIED STOCK OPTION AGREEMENT
Pursuant to the
1994 STOCK OPTION PLAN
This Nonqualified Stock Option Agreement ("Agreement") is made and entered
into as of the Date of Grant indicated below by and between Hawaiian Airlines,
Inc., a Hawaii corporation (the "Company") and the person named below as
Optionee.
WHEREAS, Optionee is an Eligible Employee of the Company, and
WHEREAS, pursuant to the Company's 1994 Stock Option Plan (the "1994
Plan"), an option to purchase shares of the Class A Common Stock of the Company
(the "Common Shares") has been granted to Optionee, on the terms and conditions
set forth herein.
NOW, THEREFORE, in consideration of the foregoing recitals and the
covenants set forth herein, the parties hereto hereby agree as follows:
1. Grant of Option; Certain Terms and Conditions. The Company hereby
---------------------------------------------
grants to Optionee, conditioned on obtaining approval by the Company's
shareholders of the 1994 Plan as provided in Rule 16b-3(b) promulgated under the
Securities Exchange Act of 1934, and Optionee hereby accepts, as of the Date of
Grant indicated below, and conditioned on such shareholder approval, an option
(the "Option") to purchase the number of Common Shares indicated below (the
"Option Shares") at the Exercise Price per share indicated below. The Option
shall expire at 5:00 p.m. (local time at the Company's principal executive
office) on the Expiration Date indicated below and shall be subject to all of
the terms and conditions set forth in the 1994 Plan and this Agreement.
Optionee: ___________________________________
Date of Grant: ___________________________________
Number of shares purchasable: ___________________________________
Exercise Price per share: The Exercise Price shall be equal to 25% of the
average of the closing prices, as reported on the American Stock Exchange,
for the Class A Common Shares for the 10 consecutive trading days that the
<PAGE>
Class A Common Stock Shares trade on the American Stock Exchange beginning
June 26, 1995.
Expiration Date: February 2, 2005
Vesting Rate: 100% on February 2, 1996
2. Nonqualified Stock Option. The Option is not intended to qualify as an
-------------------------
incentive stock option under Section 422 of the Internal Revenue Code (the
"Code").
3. Acceleration and Termination of Option.
--------------------------------------
(a) Expiration of Option. The Option shall expire upon the first to occur
--------------------
of the following:
(i) The tenth anniversary of the Date of Grant of the Option; or
(ii) An event causing expiration pursuant to the terms of the 1994
Plan.
(b) Acceleration of Option. The Option shall become fully exercisable
----------------------
notwithstanding the vesting rate specified above in accordance with the
provisions of the 1994 Plan.
4. Exercise. The Option shall be exercisable during Optionee's lifetime
--------
only by Optionee or by his or her guardian or legal representative, and after
Optionee's death only by the person or entity entitled to do so under Optionee's
last will and testament or applicable interstate law. The Option may only be
exercised by the delivery to the Company of a written notice of such exercise
pursuant to the notice procedures set forth in Section 5 hereof, which notice
shall specify the number of Option Shares to be purchased (the "Purchased
Shares") and the aggregate Exercise Price for such shares (the "Exercise
Price"), together with payment in full of such aggregate Exercise Price. The
Exercise Price shall be payable in legal tender of the United States, in Common
Shares delivered by or on behalf of the Optionee or retained by the Company from
the Common Shares otherwise issuable upon exercise and valued at Fair Market
Value as of the date of exercise or in such other consideration as the Committee
may deem acceptable.
2
<PAGE>
5. Notices. Any notice given to the Company shall be addressed to the
-------
Company at 3375 Koapaka Street, Suite G-350, P.O. Box 3008, Honolulu, Hawaii
96820-0008, Attention: Corporate Secretary, or at such other address as the
Company may hereinafter designate in writing to Optionee. Any notice given to
Optionee shall be sent to the address set forth below Optionee's signature
hereto, or at such other address as Optionee may hereafter designate in writing
to the Company. Any such notice shall be deemed duly given when sent by prepaid
certified or registered mail and deposited in a post office or branch post
office regularly maintained by the United States Government.
6. Stock Exchange Requirements; Applicable Laws. Notwithstanding anything
--------------------------------------------
to the contrary in this Agreement, no shares of stock purchased upon exercise of
the Option, and no certificate representing all or any part of such shares,
shall be issued or delivered if (a) such shares have not been admitted to
listing upon official notice of issuance on each stock exchange upon which
shares of that class are then listed or (b) in the opinion of counsel to the
Company, such issuance or delivery would cause the Company to be in violation of
or to incur liability under any federal, state or other securities law, or any
requirement of any stock exchange listing agreement to which the Company is a
party, or any other requirement of law or of any administrative or regulatory
body having jurisdiction over the Company.
7. Nontransferability. Neither the Option nor any interest therein may
-------------------
be sold, assigned, conveyed, gifted, pledged, hypothecated or otherwise
transferred in any manner other than by will or the laws of descent and
distribution.
8. 1994 Plan. THE OPTION IS GRANTED PURSUANT TO THE 1994 PLAN, AS IN
---------
EFFECT ON THE DATE OF GRANT, AND IS SUBJECT TO ALL THE TERMS AND CONDITIONS OF
THE 1994 PLAN, AS THE SAME MAY BE AMENDED FROM TIME TO TIME; PROVIDED, HOWEVER,
THAT NO SUCH AMENDMENT SHALL DEPRIVE OPTIONEE, WITHOUT HIS OR HER CONSENT, OF
THE OPTION OR ANY OF OPTIONEE'S RIGHTS UNDER THIS AGREEMENT. A COPY OF THE 1994
PLAN AS IN EFFECT ON THE DATE OF GRANT IS ATTACHED HERETO AS EXHIBIT A AND IS
INCORPORATED HEREIN BY THIS REFERENCE. ALL CAPITALIZED TERMS USED HEREIN AND NOT
OTHERWISE DEFINED, SHALL HAVE THE MEANINGS ASCRIBED TO THEM IN THE 1994 PLAN.
THE INTERPRETATION AND CONSTRUCTION BY THE COMMITTEE OF THE 1994 PLAN, THIS
AGREEMENT, THE OPTION AND SUCH RULES AND REGULATIONS AS MAY BE ADOPTED BY THE
COMMITTEE FOR THE PURPOSE OF ADMINISTERING THE 1994 PLAN SHALL BE FINAL AND
BINDING UPON OPTIONEE. UNTIL THE OPTION SHALL EXPIRE, TERMINATE OR BE EXERCISED
IN FULL, THE COMPANY SHALL, UPON WRITTEN REQUEST THEREFOR, SEND A COPY OF THE
1994 PLAN, IN ITS THEN-CURRENT FORM, TO OPTIONEE OR ANY OTHER PERSON OR ENTITY
THEN ENTITLED TO EXERCISE THE OPTION.
3
<PAGE>
9. Employment Rights. No provision of this Agreement shall (a) confer
-----------------
upon Optionee any right to continue in the employ of the Company, (b) affect the
right of the Company to terminate the employment of Optionee, with or without
cause, or (c) confer upon Optionee any right to participate in any employee
welfare or benefit plan or other program of the Company or any of its
subsidiaries other than the 1994 Plan. Optionee hereby acknowledges and agrees
that the Company may terminate the employment of Optionee at any time and for
any reason, or for no reason, unless Optionee and the Company are parties to a
written employment agreement that expressly provides otherwise.
10. Governing Law. This Agreement and the Option granted hereunder shall
-------------
be governed by and construed and enforced in accordance with the laws of the
State of Hawaii.
11. Entire Agreement. This Agreement, together with the 1994 Plan,
----------------
which is incorporated herein by reference, constitutes the entire agreement of
the parties with respect to the matters covered herein and supersedes all other
prior written or oral agreements or understandings of the parties with respect
to the matters covered herein. Optionee acknowledges that he or she has no right
to receive any additional Options unless and until such time, if any, that the
Committee, in its sole discretion, may approve the grant thereof, and that the
Company has not made any representation to the Optionee regarding future or
additional Option grants, or any other option related matters. The grant of any
options must be in writing.
12. Representation of Optionee. Optionee represents to the Company as
--------------------------
follows:
(i) The Option will be taken and received for my own account and not
with a view to or for sale in connection with any distribution thereof,
(ii) I have a preexisting personal or business relationship with the
Company or its officers, directors or controlling persons, or by reason of
my business or financial experience, I can protect my own interests in
connection with my receipt and exercise of the Option; and
(iii) I have been advised that significant tax issues arise from my
receipt of and exercise of the Option; I will consult my own tax advisor
with respect to such tax issues; and I am not relying on the Company for
tax advice with respect to my receipt and exercise of the Option.
IN WITNESS WHEREOF, the Company and Optionee have duly executed this
Agreement as of the Date of Grant.
4
<PAGE>
HAWAIIAN AIRLINES, INC. OPTIONEE
By:_______________________ ______________________________
Name: Bruce R. Nobles Signature
Title: Chairman, President ______________________________
and Chief Executive Officer Street Address
______________________________
City, State and Zip Code
______________________________
Social Security Number
5
