-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, BYnJUxtvwWiffVXMi3HMp8tAx6kQdekBXiAGmVYGUxvKQbJCbWVDHqjNAaaCuh3k YwZXSzowBstuku6EWfLanw== 0000898430-95-002413.txt : 19951120 0000898430-95-002413.hdr.sgml : 19951120 ACCESSION NUMBER: 0000898430-95-002413 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 19951115 EFFECTIVENESS DATE: 19951204 SROS: AMEX SROS: PSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: HAWAIIAN AIRLINES INC/HI CENTRAL INDEX KEY: 0000046205 STANDARD INDUSTRIAL CLASSIFICATION: AIR TRANSPORTATION, SCHEDULED [4512] IRS NUMBER: 990212598 STATE OF INCORPORATION: HI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-8 SEC ACT: 1933 Act SEC FILE NUMBER: 033-64299 FILM NUMBER: 95593895 BUSINESS ADDRESS: STREET 1: 3375 KOAPAKA ST STREET 2: STE G350 CITY: HONOLULU STATE: HI ZIP: 96819 BUSINESS PHONE: 8088353700 FORMER COMPANY: FORMER CONFORMED NAME: HAL INC /HI/ DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: HAWAIIAN AIRLINES INC DATE OF NAME CHANGE: 19850314 FORMER COMPANY: FORMER CONFORMED NAME: INTER ISLAND AIRWAYS LTD DATE OF NAME CHANGE: 19670920 S-8 1 REGISTRATION STATEMENT 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
============================================================================================================== 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 ============================================================================================================== 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 ==============================================================================================================
(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 $3.00 per share, the average of the high and low trading prices of the Class A Common Stock of Hawaiian Airlines, Inc. (the "Company") on the American Stock Exchange on November 8, 1995. (3) These Preferred Stock Purchase Rights attach to each share of Class A Common Stock upon issuance. EXPLANATORY NOTE This Registration Statement is being filed by Hawaiian Airlines, Inc. ("Hawaiian" or the "Company") in order to register 600,000 shares of Class A Common Stock (the "Class A Common Stock" or the "Securities") which have been reserved for issuance under the Hawaiian Airlines, Inc. 1994 Stock Option Plan, as amended (the "Plan") (including 600,000 Preferred Stock Purchase Rights (the "Rights"), one of which attaches to each share of Class A Common Stock issued, pursuant to the Rights Agreement dated as of December 23, 1994, as amended by and between the Company and Chemical Trust Company of California, as Rights Agent). The additional shares of Class A Common Stock that may become available for purchase in accordance with the provisions of the Plan in the event of certain changes in the outstanding shares of Class A Common Stock of Hawaiian, including, among other things, stock dividends, stock splits, reverse stock splits, reorganizations and recapitalizations, are also being registered. The material which immediately follows constitutes a reoffer prospectus, prepared on Form S-3, in accordance with General Instruction C to Form S-8, to be used in connection with resales of Securities acquired under the Plan by persons who may be considered affiliates of Hawaiian, as defined in Rule 405 under the Securities Act of 1933, as amended. REOFFER PROSPECTUS HAWAIIAN AIRLINES, INC. CLASS A COMMON STOCK ($.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. 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 (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 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 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 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 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 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 ANNEX I
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 ----------------------- ----------------------------- ------------------- --------------- ---------------------- 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
-------------- (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 TABLE OF CONTENTS
Page ---- The Company............................. 3 Risk Factors............................ 3 Use of Proceeds......................... 7 Selling Shareholders.................... 7 Plan of Distribution.................... 7 Interest of Named Experts and Counsel... 8
10 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 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 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.
Exhibit No. Description ----------- ---------------------------------------- 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
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 (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 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 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.
Signature Title Date -------------------------- ---------------------------- ----------------- /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
II-6 INDEX TO EXHIBITS
Exhibit Number Description ----------- ------------------------------------- 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
EX-4.1 2 1994 STOCK OPTION PLAN 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. (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 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 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 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 (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 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 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 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 EX-5.1 3 OPINION OF RAE A. CAPPS 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 EX-23.1 4 CONSENT OF KPMG 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 EX-99.1 5 STOCK OPTION AGREEMENT 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 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 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 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 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 -----END PRIVACY-ENHANCED MESSAGE-----