-----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, JzNYKMt9URiXh8l4feWJ7WLoqhqknyvF7FCM0LvCdcnGAsfu8v1ecNGG7RpS+pcv rJYSblIY9iD81A3Rbjsp0w== 0001047469-98-045014.txt : 19981228 0001047469-98-045014.hdr.sgml : 19981228 ACCESSION NUMBER: 0001047469-98-045014 CONFORMED SUBMISSION TYPE: S-3 PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 19981223 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HAWAIIAN AIRLINES INC/HI CENTRAL INDEX KEY: 0000046205 STANDARD INDUSTRIAL CLASSIFICATION: AIR TRANSPORTATION, SCHEDULED [4512] IRS NUMBER: 990042880 STATE OF INCORPORATION: HI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3 SEC ACT: SEC FILE NUMBER: 333-69665 FILM NUMBER: 98775107 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-3 1 FORM S-3 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 23, 1998 REGISTRATION NO. 333- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 -------------------------- FORM S-3 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 NUMBER)
3375 KOAPAKA STREET SUITE G350 HONOLULU, HAWAII 96819 (808) 835-3700 (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES) -------------------------- LYN F. ANZAI, ESQ. VICE PRESIDENT, GENERAL COUNSEL AND CORPORATE SECRETARY 3375 KOAPAKA STREET SUITE G350 HONOLULU, HAWAII 96819 (808) 835-3700 (NAME, ADDRESS, INCLUDING ZIP CODE AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE) -------------------------- COPY TO: BRADFORD P. WEIRICK, ESQ. GIBSON, DUNN & CRUTCHER LLP 333 SOUTH GRAND AVENUE LOS ANGELES, CALIFORNIA 90071-3197 (213) 229-7000 -------------------------- APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: FROM TIME TO TIME AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT. If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. / / If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. /X/ If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement from the same offering. / / If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. / / If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. / / CALCULATION OF REGISTRATION FEE
PROPOSED MAXIMUM PROPOSED MAXIMUM TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF SECURITIES TO BE REGISTERED REGISTERED UNIT(1) PRICE(1) REGISTRATION FEE Common stock ($.01 par value) 5,643,010 shares $2.91 $16,421,159 $4,565.08
(1) Estimated solely for the purpose of determining the registration fee. Calculated on the basis of the average of the high and low reported prices of the Registrant's common stock on the American Stock Exchange on December 21, 1998. The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. THE SELLING SHAREHOLDERS MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED. SUBJECT TO COMPLETION, DATED DECEMBER 23, 1998 PROSPECTUS HAWAIIAN AIRLINES, INC. COMMON STOCK ($.01 PAR VALUE) 5,643,010 SHARES Airline Investors Partnership, L.P., AMR Corporation, Martin Anderson and Robert R. Midkiff desire to register, in the aggregate, 5,643,010 shares of common stock of Hawaiian Airlines, Inc., a Hawaii corporation. They may offer and sell these shares from time to time pursuant to this prospectus on terms, including the price per share, to be determined at the time of sale. We will not receive any of the proceeds from the sale of the shares. The common stock is listed on the American Stock Exchange and the Pacific Exchange under the symbol "HA." On December 23, 1998, the last reported sale price per share of the common stock, as quoted on the American Stock Exchange, was $2 7/8. CONSIDER CAREFULLY THE RISK FACTORS BEGINNING ON PAGE 2 IN THIS PROSPECTUS. --------------------- NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES OR PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. ------------------------ The date of this prospectus is , 1998. TABLE OF CONTENTS The Company....................... 2 Risk Factors...................... 2 Available Information............. 8 Incorporation of Certain Documents by Reference.................... 8 Selling Shareholders.............. 9 Use of Proceeds................... 9 Plan of Distribution.............. 9 Legal Matters..................... 10 Experts........................... 10 Miscellaneous..................... 10
THE COMPANY Hawaiian Airlines, Inc. is the largest airline headquartered in Hawaii, based on operating revenues of $404.2 million for the fiscal year ended December 31, 1997. We transport passengers, cargo and mail over a route system that services the six major islands of Hawaii and Las Vegas, Los Angeles, San Francisco, Seattle and Portland. In addition, Hawaiian provides the only direct service from Hawaii to Pago Pago, American Samoa and Papeete, Tahiti. Hawaiian also provides charter service from Honolulu to Las Vegas, Nevada and to Anchorage, Alaska. We were incorporated in January 1929 in Hawaii. Our principal executive offices are located at 3375 Koapaka St., Suite G350, Honolulu, Hawaii 96819, telephone number (808) 835-3700. RISK FACTORS THIS PROSPECTUS CONTAINS "FORWARD-LOOKING STATEMENTS" WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. THESE STATEMENTS ARE SUBJECT TO CERTAIN RISKS AND UNCERTAINTIES, INCLUDING THOSE IDENTIFIED IN THIS SECTION. READERS SHOULD NOT UNDULY RELY ON THESE STATEMENTS, WHICH SPEAK ONLY AS OF THE DATE ON THE FRONT OF THIS PROSPECTUS. HAWAIIAN IS NOT OBLIGATED TO MODIFY THESE FORWARD-LOOKING STATEMENTS TO REFLECT EVENTS OR CIRCUMSTANCES AFTER THE DATE ON THE FRONT OF THIS PROSPECTUS OR TO REFLECT UNANTICIPATED EVENTS OR DEVELOPMENTS. IN ADDITION TO THE OTHER INFORMATION INCLUDED ELSEWHERE IN THIS PROSPECTUS, YOU SHOULD CAREFULLY CONSIDER THE FOLLOWING FACTORS IN EVALUATING AN INVESTMENT IN THE COMMON STOCK OFFERED BY THIS PROSPECTUS: AIRLINE INDUSTRY IS CYCLICAL The airline industry is a highly cyclical business with substantial volatility. Airlines frequently experience short-term cash requirements. This is caused by seasonal fluctuations in traffic, which often put a drain on cash during off-peak periods, and various other factors, including price competition from other airlines, national and international events, fuel prices and general economic conditions, including inflation. Because a substantial portion of airline travel is discretionary, our operating and financial results may be negatively impacted by any downturn in national or regional economic conditions in the United States, particularly California and Hawaii, and certain Asian countries, particularly Japan. Airlines require substantial liquidity to continue operating under most conditions. The airline industry also has low gross profit margins and revenues that vary to a substantially greater degree than do the related costs. Therefore, a significant shortfall from expected revenue levels could have a material adverse effect on our operations. Working capital deficits are not uncommon in the airline industry since airlines typically have no product inventories and ticket sales not yet flown are reflected as current liabilities. PRICE DISCOUNTING MAKES AIRLINE INDUSTRY HIGHLY COMPETITIVE The airline industry is highly competitive and industry earnings are volatile. For example, many airlines often offer reduced discount fares in order to attract customers. In addition, there are several new carriers in the industry which have low cost structures. In some cases, these new entrants have also 2 discounted their prices. When our competitors offer discounted fares, we often lower our fares as well in order to remain competitive. This results in lower profits for the Company. Although, generally speaking, the domestic airline industry currently does not engage in deeply-discounted price competition, and fare levels have continued to increase since 1992, significant industry-wide discounts could be reimplemented at any time. If our competitors offer broadly-available, deeply-discounted fares, this could cause lower profits for the entire industry and could reduce fares to levels where we would be unable to earn a profit. INCREASING NUMBER OF CONSOLIDATIONS AND ALLIANCES HAS ALSO INCREASED COMPETITION The U.S. airline industry has consolidated in recent years and may further consolidate in the future. Consolidations have enabled certain carriers to expand their international operations and increase their presence in the U.S. domestic market. In addition, many major domestic carriers have formed alliances with domestic regional carriers and foreign carriers. As a result, many of the carriers with whom we compete in our transpacific and South Pacific markets are larger and have substantially greater resources than we have. Some of these carriers have also begun to fly from mainland United States or from Japan directly to outer-island destinations in Hawaii, which affects inter-island competition. Aloha Airlines, Inc., our main competitor in the inter-island market, has a marketing affiliation with United Airlines, which strengthens its competitive position. Similarly, we have established marketing alliances with American Airlines, Inc., Northwest Airlines, Inc. and Continental Airlines, Inc., as well as Reno Air and Southwest Airlines. Continuing developments in the industry will affect our ability to compete in the various markets in which we operate. AIRLINE INDUSTRY HAS HIGH OPERATING LEVERAGE Airlines, including Hawaiian, operate with high financial and operating leverage. The expenses of each flight change only marginally based on the number of passengers carried--they are generally fixed costs. However, the amount of revenue earned from a particular flight DOES depend on the number of passengers carried. As a result, a decrease in the number of passengers carried, while causing a decrease in revenue, may also result in a disproportionately greater decrease in profits, because our expenses would basically remain the same. OUR PROFITABILITY IS DEPENDENT ON HAWAIIAN TOURISM Our operations are limited almost exclusively to flights to, from and among, the Hawaiian Islands. This means that our profitability is linked to the number of travelers to, from and among the Hawaiian Islands. Most people who travel to Hawaii are tourists. Because tourism levels are related to discretionary income, the level of Hawaiian tourism depends largely on the strength of the economies in the areas that tourists come from. Hawaiian tourism also depends upon the popularity of Hawaii as a tourist destination. From time to time, various events such as the Persian Gulf War and industry-specific problems such as strikes have had a negative impact on tourism in Hawaii. In addition, the financial turmoil in Asia may have a material adverse affect on Hawaii tourism. Total Hawaii visitor counts in 1998 are forecasted to be flat at best when compared to 1997. For the ten months ended October 1998, westbound visitors to Hawaii (mainly from mainland United States) totaled approximately 3.41 million, an increase of 3.9% from the same period in 1997. During the same period, eastbound visitors (mainly from Japan) totaled approximately 2.34 million, a decrease of 10.2%. Thus, overall visitor arrivals for the first ten months of 1998 reached approximately 5.75 million, a decrease of 1.9% from the same period in 1997. 3 Significant obstacles to growth in Hawaii passenger traffic have been and will continue to be the following: DEPRESSED HAWAII ECONOMY The local Hawaii economy has stagnated over the past seven years. This stagnation is due to a variety of factors, including declines in outside capital investment, sluggish tourism, reduced military spending and a reduction in the Hawaii sugar and pineapple industries. Since 1991, Hawaii has experienced record bankruptcies, rising foreclosures and business failures and continued job losses. In late 1997, the Governor of Hawaii created an Economic Revitalization Task Force, consisting of selected members of the public and private sectors and labor unions. The Task Force recommended certain fundamental tax and business proposals, several of which were adopted by the 1998 Hawaii legislative session. For example, the legislature established the Hawaii Tourism Board to oversee statewide marketing efforts for the Hawaii tourism industry and funded it with an annual budget of $60.0 million. We do not yet know whether the Tourism Board will succeed in promoting tourism in Hawaii. COMPETING LEISURE TRAVEL INDUSTRIES Major leisure travel destinations continue to compete with Hawaii for the leisure traveler. The vacation cruise industry has recently enjoyed a resurgence and areas such as Mexico, the Caribbean, Europe and domestic leisure attractions, such as theme parks and Las Vegas, have undertaken effective promotional and marketing activities. This has resulted in increased competition for tourism business. We cannot predict whether the level of passenger traffic to Hawaii will decline in the future. A decline in the number of travelers to Hawaii could have a material adverse effect on Hawaiian's operations. TRAVEL TO HAWAII IS SEASONAL We believe that Hawaii is generally a popular spot for seasonal vacation travelers. Fewer people travel to Hawaii during January through March, with strong travel periods occurring during June, July, August and December. As discussed above, certain of our costs do not vary significantly regardless of traffic levels. As a result, during the slower, off-peak months, we experience lower profits and less liquidity. In addition, during off-peak periods, we may attempt to increase passenger traffic by discounting fares, which may have an additional downward impact on profits and liquidity. CHANGES IN FUEL COSTS AFFECT OUR OPERATING COSTS Fuel costs are a significant portion of our total operating costs (approximately 19.5% for 1997). Fuel prices are extremely volatile. Several factors can have an effect on fuel prices, including economic and political events throughout the world and applicable fuel taxes. We can neither predict nor control near- or longer-term fuel prices. Significant increases in fuel costs would materially affect Hawaiian's operating results. Hawaiian purchases almost all of its fuel from Northwest Airlines, Inc. If there is a fuel shortage, Northwest will provide fuel to its own fleet first and then a portion of the remaining fuel available will be allocated between Hawaiian and any other applicable airlines. Our fuel agreement with Northwest is renewed automatically on December 31 of each year unless either we or Northwest cancel it by giving 90 days notice. We do not know if we would be able to secure an adequate supply of fuel from alternate sources if a fuel shortage caused the supply from Northwest to be inadequate or if Northwest canceled the agreement. 4 WE HAVE A LARGE NUMBER OF LEASED AIRCRAFT Hawaiian owns two DC-9-51 aircraft and leases eleven DC-9-51s and ten DC-10-10s pursuant to leases that expire at various times between 2000 and 2004. In November 1998, we took possession of a DC-10-30 pursuant to a lease agreement with a purchase option that we expect to exercise before the end of 1998, and we also entered into a purchase agreement to buy a second DC-10-30 during the first quarter of 1999. In order to maintain our current operations, we will need to either renew our leases as they expire or buy or lease replacement aircraft. Also, if we decide to expand operations, we will need to buy or lease additional aircraft. We cannot guarantee that lease renewals, additional aircraft leases or aircraft purchases will be available on favorable terms or that we will have sufficient funds to lease or buy additional aircraft. WE RELY UPON OUR RELATIONSHIP WITH AMERICAN AIRLINES Hawaiian currently leases all ten of its DC-10-10 aircraft from American Airlines, Inc., and has an agreement with American to maintain these aircraft as well as the two DC-10-30 aircraft which we are acquiring. American can terminate its obligation to provide maintenance services on and after January 1, 1999, by giving 180 days notice. American has recently announced plans to reduce the number of DC-10-10s in its fleet, which may affect our ability to rely on American for maintenance. If American were to terminate the maintenance arrangement, we would have to seek an alternate source of maintenance service or maintain the DC-10-10s and DC-10-30s ourselves. We cannot determine whether we would be able to do so in a way that is as cost-effective as our arrangement with American. In addition, we participate in American's AAdvantage-Registered Trademark- frequent flyer program, which makes us more competitive by enabling passengers to use their Hawaiian Airlines frequent flyer miles on American flights. We also have a code sharing agreement with American and participate in American's SABRE-Registered Trademark- reservation system, which gives us exposure to a larger number of customers. Any inability to continue in these programs or participate in comparable programs offered by other airlines could have a material adverse effect on our operations. WE ARE SUBJECT TO CERTAIN REGULATORY OVERSIGHT AND TAXES We are regulated by the Department of Transportation and the Federal Aviation Administration, among other agencies. The DOT may review our economic authority at any time and impose fines or other sanctions for violations of law or regulations. The FAA also may review our operating authority, conduct safety audits of our operations, aircraft and employees and impose fines and other sanctions on us and our employees, who are generally licensed by the FAA, if we or they violate aviation safety, security or other regulations. In the last several years, the FAA has issued a number of maintenance directives and other regulations that affect the airline industry. We expect to continue to spend substantial amounts of money to comply with these new regulations. Additional laws can be passed by Congress and regulations have been and can be promulgated by the FAA and DOT that could significantly increase our operating costs. As a general proposition, we do not own routes or takeoff and landing slots. To the extent they are regulated, such rights are conditional and may be removed by action of the relevant agency. In addition, international treaties regulate the award of international routes to U.S. carriers, which are amended from time to time. We cannot predict what additional laws and regulations will be adopted or what changes to these treaties will be made, if any, or how they will affect us. We are also subject to regulation or oversight by federal agencies other than the FAA and DOT, such as the U.S. Postal Service, the Customs Service and the Department of Agriculture, as well as various state agencies. Labor relations in the air transportation industry are generally regulated under the Railway Labor Act. We believe that we are in compliance with all requirements necessary to maintain our operating authority granted by the DOT and our air carrier operating certificate issued by the FAA. Any change, 5 suspension or termination of any of the Company's DOT or FAA authorizations or certificates could have a material adverse effect upon Hawaiian. The airline industry is subject to various passenger, cargo and fuel taxes, which change from time to time. Hawaiian has and will continue to change its fares in response to any enacted tax changes, depending on prevailing market conditions. We cannot be certain that we will be able to maintain our current fare levels or predict the effects on our fares should these taxes lapse and/or be reinstated. In an attempt to boost tourism, on September 1, 1997, the Governor of Hawaii placed a two-year moratorium on aircraft landing fees at all Hawaii airports. However, the Governor has the right to reinstate the landing fee charges before the end of the two-year period. WE ARE PARTY TO CERTAIN LABOR AGREEMENTS We are party to five collective bargaining agreements with unions, which cover 90% of our employees. These agreements are amendable in February 2000. This means that our ability to negotiate with our employees is limited by the terms of these agreements. Negotiation of these agreements could result in an increase in compensation and benefit costs. If, during or prior to labor negotiations, we experience work stoppages or other labor difficulties, our operations may be hampered or halted. This could have a material adverse effect on our reputation and operations. WE UTILIZE DERIVATIVE FINANCIAL INSTRUMENTS We utilize crude oil forward contracts to manage market risks and hedge our financial exposure resulting from fluctuations in our aircraft fuel costs. We employ a strategy whereby crude oil contracts are used to cover up to 45% of our anticipated aircraft fuel needs on a rolling twelve month basis. These forward contracts expose us to potential losses in the event of crude oil price fluctuations. We experienced net realized and unrealized losses on such contracts amounting to $361,000 and $1.6 million for the three and nine month periods ended September 30, 1998. AIP CURRENTLY CONTROLS THE COMPANY Airline Investors Partnership, L.P. ("AIP") owned 44.3% of the issued and outstanding common stock of the Company as of November 30, 1998. Upon selling its shares that are covered by this prospectus, AIP would own 39% of the Company. Our Amended Bylaws give AIP the right to nominate six of the 11 directors of Hawaiian until AIP ceases to own at least 35% of the common stock. AIP's current stock ownership enables AIP to control even those shareholder decisions that require approval by 75% of the outstanding common stock under Hawaii law, as AIP has the power to prevent any such action from being approved if it does not vote in favor of the proposed action. Thus, through its share ownership and its right to nominate a majority of Hawaiian's Board of Directors, AIP can control fundamental shareholder decisions impacting Hawaiian. John W. Adams, Chairman of the Board of Directors of Hawaiian, is the sole stockholder of the general partner of AIP and controls the voting of AIP's shares. VARIOUS PROVISIONS MAKE IT DIFFICULT FOR A THIRD PARTY TO ACQUIRE THE COMPANY AIP's substantial ownership interest in our common stock could make it more difficult for a third party to acquire Hawaiian. A potential buyer would probably not be able to acquire Hawaiian without AIP's consent or its participation in the transaction. Hawaiian is subject to Section 415-73 of the Hawaii Business Corporation Act, which restricts mergers and consolidations. Subject to certain exceptions, Section 415-73 prohibits any merger or consolidation of Hawaiian unless it is approved by the Board of Directors and at least 75% of the shareholders of Hawaiian. 6 Our Restated Articles of Incorporation and our Amended Bylaws include a number of provisions that may discourage persons from trying to launch a non-negotiated takeover of Hawaiian. These provisions include: - a restriction on action by written consent of the shareholders, unless such consent is unanimous; - a prohibition on cumulative voting; - certain qualifications for directors; and - restrictions on the filling of vacancies of board seats. Our Articles of Incorporation allow us to issue up to 2,000,000 shares of preferred stock. The Board has the right to determine the particular terms of this preferred stock. Accordingly, the Board of Directors may, without shareholder approval, issue preferred stock with dividend, liquidation, conversion, voting or other rights that could adversely affect the rights of holders of the common stock. The issuance of shares of preferred stock may make it more difficult for a buyer to acquire or take control of Hawaiian. The Transportation Act prohibits non-U.S. citizens from owning more than 25% of the voting interest of a U.S. air carrier. Our Articles of Incorporation prohibit non-US citizens from owning more than 25% of our stock. As of November 30, 1998, we believe that non-US citizens held less than 12% of our common stock. This foreign ownership restriction limits the ability of a non-U.S. citizen to acquire a controlling block of our stock. Hawaiian has a shareholders' rights plan. This plan provides that, subject to certain discretion of the Board of Directors, if Hawaiian is acquired or a buyer acquires more than 15% of the outstanding common stock, we would issue to our shareholders, other than the buyer, additional shares of common stock at a discount. This would substantially dilute the buyer's ownership interest in Hawaiian. WE DO NOT TYPICALLY PAY DIVIDENDS We have not paid cash dividends on our common stock in the last several years and have no plans to do so in the foreseeable future. Moreover, we are prohibited from paying dividends by the terms of our most restrictive credit facility. We intend to retain our earnings, if any, to finance the development and growth of our business. OUR STOCK PRICE HAS BEEN VOLATILE Since 1995, the price range of the common stock has varied widely. The price of the common stock may be subject to significant fluctuation in the future. We cannot predict the effect, if any, that sales of shares of common stock by the selling shareholders, or the availability of such shares for sale, will have on the market prices of our common stock prevailing from time to time. The possibility that the selling shareholders may sell substantial amounts of shares in the public market may adversely affect prevailing market prices for the common stock. It could also impair our ability to raise capital through the sale of our stock. SHARES ELIGIBLE FOR FUTURE SALE COULD IMPACT STOCK PRICE The market price of our common stock could be adversely impacted by the availability of shares for future sale. The shares of common stock covered by this prospectus will be registered and will be freely tradable by persons who are not affiliates of Hawaiian without restriction or further registration under the Securities Act. Substantially all of the other outstanding shares of common stock, other than shares held by officers, directors and other affiliates of Hawaiian, are freely tradable. Shares of common stock held by affiliates of Hawaiian are subject to limitations on the number of shares that 7 may be sold unless the sale of the shares is registered or is exempt from registration under the Securities Act. AIP has registration rights for the shares of common stock it holds. AIP can, on up to two occasions, require us to register all or any portion of AIP's shares under the Securities Act, at our expense. In addition, if Hawaiian registers any other shares of its common stock for public sale under the Securities Act at any time prior to January 2006, AIP has the right to include its shares in the registration. In addition, there are currently up to 5,600,000 shares of common stock reserved for issuance pursuant to the options granted or which may be granted under the 1994 Stock Option Plan, the 1996 Stock Incentive Plan and the 1996 Nonemployee Director Stock Option Plan. As of November 30, 1998, our various 401(k) plans held an aggregate of approximately 1,413,989 shares of common stock. Sales of these shares, depending on the volume, could adversely affect the trading prices of the common stock. AN OWNERSHIP CHANGE COULD AFFECT OUR NET OPERATING LOSS CARRYOVERS We believe that substantially all of our net operating losses, as computed for federal income tax purposes, are currently subject to limitation under Section 382 of the Internal Revenue Code. In the event an ownership change (as defined in Section 382) of Hawaiian were to occur in the future, our ability to utilize net operating losses incurred prior to that ownership change could be subject to additional limitations under Section 382. YEAR 2000 PROBLEM Hawaiian is currently in the process of upgrading a number of major information technology systems for strategic purposes as well as to address issues associated with the year 2000. The estimated cost to upgrade these systems is approximately $10.0 to $12.0 million, of which approximately $8.0 million had been incurred as of September 30, 1998. These information technology projects are designed to either replace or enhance existing systems, including local and wide area networks, yield management, revenue and financial accounting, human resources and payroll. In addition to replacing the above information technology systems, we have recognized the potential impact of the year 2000 on our operations and have established a dedicated director and Year 2000 Project Office to oversee our compliance efforts. The Year 2000 Project Office operates on four tracks, including (i) information and communication systems; (ii) hardware; (iii) business partnerships; and (iv) government and externalities. Each track uses available best practices and is broken down into the following phases: inventory, assessment, remediation, testing, and implementation. The strategy is to create a comprehensive review of all mission critical systems as they apply to the continuum of our business operations. The Project Office provides regular informational briefings and newsletter updates to our employees and regular briefings to management and the board of directors regarding our year 2000 compliance program. STATE OF READINESS We have recently completed an inventory of substantially all of our potentially affected mission critical hardware and have also completed inventories of major applications in the mainframe and client-server environments. We are in the process of completing our inventory of PC applications and data, which we expect to complete by the end of January 1999. We have also tested the mainframe, hardware and operating systems, and we believe that such systems are year 2000 ready. In addition to joint efforts with trade associations such as the Air Transport Association, we have mailed surveys to over 1,400 business partners with the intent of discerning their respective year 2000 compliance efforts. 8 We are following up our survey efforts with telephone calls and, in certain cases, on-site visits, to learn more information about our significant business partners' year 2000 issues. Because of the upgrading of the major information technology systems discussed above, there remains only a small amount of computer code requiring redress. We are in the process of having this legacy code remediated by a third party vendor with work expected to be completed by the end of 1998. Further, assessments of our hardware have found that only a very small amount of our equipment is date sensitive. At current, we believe that all mission critical systems will be remediated and tested by mid-1999. ESTIMATED COSTS TO ADDRESS YEAR 2000 ISSUES As mentioned above, because a substantial portion of our information systems is being upgraded or replaced by new applications that are represented to be year 2000 ready, our remaining year 2000 issues are primarily related to remediation of legacy code and testing. In addition to the estimated costs of $10.0 to $12.0 million relating to the upgrade of our major information technology systems discussed above, additional year 2000 remediation costs are estimated to approximate an additional $1.0 to $2.0 million. Expectations about future year 2000-related costs are subject to various uncertainties that could cause the actual results to differ materially from our expectations, including our success in identifying systems and programs that are not year 2000 ready, the nature and amount of programming required to upgrade or replace each of the affected programs, the availability, rate and magnitude of related labor and consulting costs and the success of our business partners, vendors and clients in addressing the year 2000 issue. RISKS OF YEAR 2000 ISSUES Preliminary reviews of our flight systems have found little potential impact of year 2000 issues, and existing contingency plans and training address the possible loss of most affected operations systems. The primary risks to us are those of business continuity. If our significant vendors or suppliers (such as Northwest, who provides the majority of our fuel, or American, who allows us to participate in the SABRE-Registered Trademark- reservation system) are unable to become year 2000 compliant in time, this could have a material adverse effect on our ability to continue our operations. In addition, the failure of the FAA or various airports that we use (such as the Honolulu airport) to remediate their year 2000 issues in time could also materially affect our business. CONTINGENCY PLANS While we believe that all of our mission critical systems will be year 2000 ready, we will have appropriate contingency plans developed to address complete and partial systems failure for our significant information systems. We expect to have contingency plans in place by May 1999. Because of the variables associated with the year 2000 date problem, we cannot give assurance that our current system transitions will be sufficient to remedy all year 2000 issues or assure that we will not be affected by the year 2000 issue in some form or manner. AVAILABLE INFORMATION The Company has filed a registration statement on Form S-3 with the SEC under the Securities Act of 1933. The registration statement registers the common stock covered by this prospectus. This prospectus omits certain information and exhibits included in the registration statement. You can obtain copies of the registration statement and any schedules and exhibits accompanying the registration statement by paying a fee to the SEC, or you can examine the documents free of charge at the principal office of the SEC in Washington, D.C. Statements contained in this prospectus regarding any 9 contract or other document are not necessarily complete. For additional information, you should refer to the copy of the contract or other document filed as an exhibit to the registration statement. We file annual, quarterly and special reports, proxy statements and other information with the SEC. You may read and copy any document we file at the SEC's Public Reference Rooms at 450 Fifth Street, N.W., Washington, D.C., 20549. The SEC also has Public Reference Rooms in New York, New York and Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further information on the public reference rooms. Our SEC filings are also available to the public at the SEC's web site at http://www.sec.gov. The Company's common stock is listed on the American Stock Exchange and the Pacific Exchange, and the reports, proxy statements and other information filed by the Company with the American Stock Exchange and the Pacific Exchange can also be inspected at the offices of the American Stock Exchange and the Pacific Exchange. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE The SEC allows us to "incorporate by reference" the information we file with it, which means that we can disclose important information to you by referring you to those documents. The information incorporated by reference is considered to be part of this prospectus, and later information that we file with the SEC will automatically update and supersede this information. We incorporate by reference the documents listed below and any future filings made with the SEC under Sections 13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934 until the selling shareholders have sold all of the shares of common stock: (1) the Annual Report on Form 10-K for the fiscal year ended December 31, 1997; (2) the Quarterly Reports on Form 10-Q for the quarters ended March 31, 1998, June 30, 1998 and September 30, 1998; (3) the Current Reports on Form 8-K, filed on May 22, 1998 and September 14, 1998; and (4) the description of the Company's common stock contained in its Registration Statements on Form 8-A/A filed on July 1, 1996; on Form 8-A 12B/A, filed on September 14, 1998; and on Form S-8 (Registration No. 333-09673), filed on August 6, 1996. You may request a copy of these filings, at no cost, by writing or telephoning us at the following address: Hawaiian Airlines, Inc., Attention: Corporate Secretary, 3375 Koapaka St., Suite G350, Honolulu, Hawaii 96819, telephone number (808) 835-3700. SELLING SHAREHOLDERS AMR Corporation has requested registration of the shares of common stock of Hawaiian underlying the warrants it currently holds. Martin Anderson and Robert R. Midkiff have converted the warrants they previously held into shares of common stock of Hawaiian. The terms of the warrants obligate us to register the shares of common stock held by Martin Anderson and Robert R. Midkiff and the shares underlying the warrants held by AMR Corporation. The shares held by AIP are entitled to registration pursuant to a Registration Rights Agreement between AIP and Hawaiian. The table attached as Annex I hereto sets forth, as of December 23, 1998: - the name of each selling shareholder and his or its relationship to Hawaiian during the last three years; - the number of shares of common stock each selling shareholder owned prior to this offering; - the number of shares of common stock each selling shareholder is offering under this prospectus; and 10 - the amount and the percentage of Hawaiian's common stock that each selling shareholder would own after completion of this offering. The information contained in Annex I may change from time to time. USE OF PROCEEDS The common stock is being offered for the accounts of each of the selling shareholders. Hawaiian will not receive any of the proceeds from the sale of the common stock. PLAN OF DISTRIBUTION The selling shareholders may sell the shares of common stock on the American Stock Exchange, the Pacific Exchange or 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. The common stock may be sold in: - a block trade, where a broker or dealer will try to sell the common stock as agent but may position and resell a portion of the block as principal to facilitate the transaction; - transactions where a broker or dealer acts as principal and resells the common stock for its account pursuant to this prospectus; - an exchange distribution in accordance with the rules of such exchange; and - ordinary brokerage transactions and transactions in which the broker solicits purchases. In effecting sales, brokers or dealers engaged by any of the selling shareholders may arrange for other brokers or dealers to participate. Any of the selling shareholders also may, from time to time, authorize underwriters acting as their agent to offer and sell the common stock upon such terms and conditions as shall be set forth in a prospectus supplement. Underwriters, brokers or dealers will receive commissions or discounts from any of the selling shareholders in amounts to be negotiated immediately prior to sale. Offers and sales may also be made directly by a selling shareholder, or other BONA FIDE owner of the common stock, so long as an applicable exemption from state broker-dealer registration requirements is available in the jurisdiction of sale. Such selling shareholders, 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. There is no assurance that any of the selling shareholders will offer for sale or sell any or all of the shares of common stock covered by this prospectus. LEGAL MATTERS Lyn F. Anzai, Vice President, General Counsel and Corporate Secretary of the Company will issue an opinion regarding the legality of the common stock being registered. Ms. Anzai owns 7,000 shares of common stock. EXPERTS The financial statements and the financial statement schedule of Hawaiian Airlines, Inc. as of December 31, 1997 and 1996, and for each of the years in the three-year period ended December 31, 1997, have been incorporated 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. 11 MISCELLANEOUS You should rely only on the information contained in or incorporated by reference in this prospectus. We have authorized no one to provide you with different information. These securities are not being offered in any location where the offer is not permitted. You should not assume that the information in this prospectus, including information incorporated by reference, is accurate as of any date other than the date on the front of the prospectus. 12 ANNEX I
SHARES TO BE BENEFICIALLY SHARES OF COMMON OWNED STOCK UPON COMPLETION OF BENEFICIALLY OFFERING(1) RELATIONSHIP TO COMPANY OWNED AS OF SHARES OFFERED --------------------------- SELLING SHAREHOLDER DURING LAST THREE YEARS DECEMBER 23, 1998 HEREBY NUMBER PERCENT - ------------------------------------- ----------------------- ----------------- -------------- ------------ ------------- Airline Investors Partnership, L.P................................ Shareholder(2) 18,181,818 2,200,000 15,981,818 39% AMR Corporation...................... Shareholder(3) 1,949,338 1,949,338 0 0% Martin Anderson...................... Shareholder 809,186 809,186 0 0% Robert R. Midkiff.................... Shareholder 684,486 684,486 0 0%
- ------------------------ (1) Assumes that 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. (2) As discussed in the Risk Factors section, Airline Investors Partnership, L.P. (AIP) owns a controlling interest in the Company and will still be able to control most shareholder actions even after selling its shares covered by this prospectus. (3) As discussed in the Risk Factors section, AMR Corporation (American Airlines) is a party to various agreements with Hawaiian, including leasing, maintenance and code sharing arrangements. Our annual report for the year ended December 31, 1997 contains additional information on these agreements. A-1 PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION The Company will incur the following expenses in connection with the distribution of the common stock. SEC Registration Fee............................................... $ American Stock Exchange and Pacific Exchange Application Fees...... Legal fees and expenses*........................................... Accounting fees and expenses*...................................... 10,000 Blue sky fees and expenses*........................................ Miscellaneous...................................................... --------- TOTAL* $ ---------
- ------------------------ * Estimated. ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS Section 415-5 of the Hawaii Business Corporation Act (the "HBCA") permits a corporation to indemnify any person who was or is a party to or is threatened to be made a party to any proceeding, whether civil, criminal, administrative or investigative (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 Indemnitee acted in good faith and in a manner the Indemnitee reasonably believed to be in, or not opposed to, the best interests of the corporation and, with respect to any criminal action or proceedings, had no reasonable cause to believe the Indemnitee's conduct was unlawful. Section 415-48.5 of the 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. Section 415-5 of the HBCA 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. II-1 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 HBCA 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. The HBCA 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 Restated Articles of Incorporation incorporates the provisions of the HBCA so as to provide the indemnification of the HBCA to officers and directors of the Company. Article VII also provides that the indemnity provided thereunder is nonexclusive of any other rights of indemnification to which an Indemnitee may be entitled. In addition, the Company has entered into indemnification agreements with each of its directors and executive officers providing indemnification to the fullest extent permitted by law. Furthermore, the Company has a policy of directors' and officers' liability insurance which insures directors and officers against the cost of defense, settlement or payment of a judgment under certain circumstances. ITEM 16. EXHIBITS The Exhibit Index appears on page II-6. ITEM 17. UNDERTAKINGS 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 Section 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 thereby and the offerings of such securities at the time shall be deemed to be the initial bona fide offering thereof. 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. 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-2 (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. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; (iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement; PROVIDED, HOWEVER, that paragraphs (1)(i) and (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 with or furnished to the Commission 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. II-3 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-3 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 23rd day of December, 1998. HAWAIIAN AIRLINES, INC. By: /s/ PAUL J. CASEY ----------------------------------------- Paul J. Casey President and Chief Executive Officer
POWER OF ATTORNEY Each person whose signature appears below constitutes and appoints Paul J. Casey, Lyn F. Anzai, John L. Garibaldi 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 - ------------------------------ -------------------------- ------------------- Director, President and /s/ PAUL J. CASEY Chief Executive Officer - ------------------------------ (Principal Executive December 23, 1998 (Paul J. Casey) Officer) Executive Vice President /s/ JOHN L. GARIBALDI and Chief Financial - ------------------------------ Officer (Principal December 23, 1998 (John L. Garibaldi) Accounting and Financial Officer) /s/ JOHN W. ADAMS - ------------------------------ Director, Chairman of the December 23, 1998 (John W. Adams) Board
II-4
SIGNATURE TITLE DATE - ------------------------------ -------------------------- ------------------- /s/ TODD G. COLE - ------------------------------ Director December 23, 1998 (Todd G. Cole) /s/ ROBERT G. COO - ------------------------------ Director December 23, 1998 (Robert G. Coo) /s/ WILLIAM BOYCE LUM - ------------------------------ Director December 23, 1998 (William Boyce Lum) /s/ RENO F. MORELLA - ------------------------------ Director December 23, 1998 (Reno F. Morella) /s/ ARTHUR J. PASMAS - ------------------------------ Director December 23, 1998 Arthur J. Pasmas /s/ SAMSON POOMAIHEALANI - ------------------------------ Director December 23, 1998 (Samson Poomaihealani) /s/ EDWARD Z. SAFADY - ------------------------------ Director December 23, 1998 (Edward Z. Safady) /s/ SHARON L. SOPER - ------------------------------ Director December 23, 1998 Sharon L. Soper /s/ THOMAS J. TRZANOWSKI - ------------------------------ Director December 23, 1998 Thomas J. Trzanowski
II-5 INDEX TO EXHIBITS
EXHIBIT NUMBER DESCRIPTION - --------------- ---------------------------------------------------------------------------------------------- 3(a) Restated Articles of Incorporation of the Company. 3(b) By-laws of the Company, as amended and restated, incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed on September 14, 1998, Commission File No. 1-8836. 5.1 Opinion and Consent of Lyn F. Anzai, Esq. 23.1 Consent of Lyn F. Anzai, Esq. (contained in Exhibit 5.1). 23.2 Consent of KPMG Peat Marwick LLP. 24.1 Power of Attorney (included on the signature page hereto).
II-6 EX-3.(A) 2 EXHIBIT 3(A) EXHIBIT 3(a) ARTICLES OF INCORPORATION OF HAWAIIAN AIRLINES, INC. ARTICLE I NAME The name of the Corporation shall be: HAWAIIAN AIRLINES, INC. ARTICLE II OFFICES The location of the principal office of the Corporation shall be in the City of Honolulu, Island of Oahu, State of Hawaii, and the mailing address of the principal office of the Corporation shall be 3375 Koapaka Street, Suite G-350, Honolulu, Hawaii 96819, or such other mailing address as shall be specified by an amendment to the Bylaws of the Corporation. The Corporation may have such other offices within and without the State of Hawaii as its business may from time to time require. ARTICLE III PURPOSES AND POWERS The purpose of the Corporation is to engage in commercial air transportation and any lawful act or activity for which corporations may be organized under the law of Hawaii. ARTICLE IV CAPITAL STOCK A. The Corporation is authorized to issue two classes of shares of capital stock, which shall be designated Common Stock and Preferred Stock, respectively. The total number of shares of capital stock which the Corporation is authorized to issue is sixty-two million (62,000,000) shares. B. (i) The total number of shares of Common Stock which the Corporation shall have authority to issue is sixty million (60,000,000) shares, and all such shares shall have a par value of $.01 per share. (ii) The Common Stock shall have all the voting rights provided under the Hawaii Business Corporation Act for voting common stock except as otherwise provided in these Amended Articles of Incorporation. (iii) The ownership or control of more than twenty-five percent (25%) of the issued and outstanding voting capital stock of the Corporation by persons who are not "citizens of the United States" as defined in Section 102(a)(15) of the Transportation Act (49 U.S.C. Section 4101, ET SEQ., the "Act") is prohibited; provided, however, that such percentage shall be deemed to be automatically increased or decreased from time to time to that percentage of ownership which is then permissible by persons who are not "citizens of the United States" under the Act or under any successor or other law of the United States of America which provides for the regulation of, or is otherwise applicable to, the Corporation or its subsidiaries in their business activities. As used in the preceding sentence, capital stock of the Corporation means the Common Stock and any shares of Preferred Stock of the Corporation entitled to vote on matters generally referred to the shareholders for a vote. (iv) All shares of Common Stock shall rank equally in the event of liquidation of the Corporation and shall be entitled to any assets of the Corporation available for distribution to shareholders after payment in full of any preferential amount to which holders of Preferred Stock may be entitled. (v) Any certificates that represent shares of Class A Common Stock and any documents that refer to shares of Class A Common Stock shall for all purposes be deemed to represent and refer to shares of Common Stock of the Company. C. The total number of shares of Preferred Stock which this Corporation is authorized to issue is two million (2,000,000) shares having a par value of $.01 each and which may be issued from time to time in one or more series. The two million (2,000,000) shares is divided into 1,979,993 Preferred Stock, 20,000 Series A Junior Participating Cumulative Preferred Stock, 4 Series B Special Preferred Stock, 1 Series C Special Preferred Stock, 1 Series D Special Preferred Stock and 1 Series E Special Preferred Stock. Prior to or simultaneously with the creation and/or issuance of any such series, the Board of Directors is hereby authorized to fix the voting powers, designations, preferences and participating, optional, relative or other special rights, and qualifications, limitations or restrictions thereof to the full extent permitted by the laws of the State of Hawaii, unless such voting powers, designations, preferences, rights and qualifications, limitations or restrictions thereof are otherwise established by these Amended Articles of Incorporation; provided that, in no event shall any shares, except shares of the Series A Junior Participating Cumulative Preferred Stock, par value $.01 per share, be entitled to more than one vote per share on any matters for which shareholder approval is required. Unless otherwise provided in the resolution creating a series, all shares of that series redeemed, repurchased or otherwise reacquired, as well as shares of a series authorized but not yet issued, shall thereupon, without further action by the Board of Directors, be or become authorized but unissued shares subject to all of the authority of the Board of Directors in this Article IV provided. D. No holder of the shares of any class of capital stock or other securities of the Corporation shall have any preemptive or preferential right of subscription for or to purchase any shares of any class of stock or other securities of the Corporation, whether now or hereafter authorized, other than such right or rights, if any, and upon such terms and at such prices as the Board of Directors, in its discretion, from time to 2 time may determine. The Board of Directors may issue shares of capital stock or other securities without offering the same in whole or part to the holders of the capital stock or any other securities of the Corporation. E. Sections 415-171 and 415-172 of the Hawaii Revised Statutes, as amended, relating to control share acquisitions, shall not apply to any acquisition of shares of capital stock of the Corporation. ARTICLE V BOARD OF DIRECTORS If the Corporation has only one stockholder, the Board of Directors shall have one or more directors. If the Corporation has two stockholders, the Board of Directors shall have two or more directors. If the Corporation has three or more stockholders, the Board of Directors shall have a minimum of three directors. Not less than one member of the Board of Directors shall be a resident of the State of Hawaii, and in the absence of such one member, the Board of Directors shall not function. The number of directors shall be fixed by, and the members of the Board of Directors shall be elected or appointed at such times, in such manner and for such terms as may be prescribed by the Bylaws which also may provide for the removal of directors and filling of vacancies and may provide that the remaining members of the Board of Directors, although less than a majority thereof, may by the affirmative vote of the majority of such remaining members fill vacancies in the Board of Directors. The directors need not be stockholders of the Corporation. The Board of Directors shall have full power to control and direct the business and affairs of the Corporation, subject, however, to any limitations which may be set forth in the Hawaii Business Corporation Act, in these Articles or in the Bylaws. The Board of Directors, without the approval of the stockholders of the Corporation, or of any percentage thereof, may authorize the borrowing of money or the incurring of debts even though, as a result thereof, the amount of the Corporation's indebtedness may exceed its capital stock. ARTICLE VI OFFICERS The officers of the Corporation shall consist of such officers and assistant officers and agents as may be prescribed by the Bylaws. The officers shall be elected or appointed, hold office and may be removed, and shall have such qualifications, as may be prescribed by the Bylaws. Any two or more offices may be held by the same person, provided, however, that not less than two (2) persons shall be officers. All officers and agents of the Corporation, as between themselves and the Corporation, shall have such authority and perform such duties in the management of the Corporation as may be prescribed by the Bylaws, or as may be determined by resolution of the Board of Directors not inconsistent with the Bylaws. ARTICLE VII INDEMNITY AND LIMIT ON LIABILITY 3 A. The Corporation shall indemnify each person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation) by reason of the fact that such person is or was a director or officer of the Corporation, or is or was serving at the request of the Corporation as a director or officer of another Corporation, partnership, joint venture, trust or other enterprise against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding if such person acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of this Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe the conduct of the person was unlawful. The termination of any action, suit, or proceeding by judgment, order, settlement, conviction, or upon a plea or nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which such person reasonably believed to be in or not opposed to the best interests of this Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that such conduct was unlawful. B. The Corporation shall indemnify each person who was or is a party or is threatened to be made a party to any threatened, pending, or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that such person is or was a director or officer of the Corporation or any subsidiary of the Corporation, or is or was serving at the request of the Corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise, including any subsidiary of the Corporation against expenses (including attorneys' fees) actually and reasonably incurred by such person in connection with the defense or settlement of such action or suit if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of this Corporation and, except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable for negligence or misconduct in the performance of such person's duty to this Corporation unless and only to the extent that the court in which such action or suit was brought or in any other court having jurisdiction in the premises shall determine upon application that, despite the adjudication of liability but in view of all of the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which such court shall deem proper. C. To the extent that a director or officer of the Corporation or a person serving at the request of the Corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in paragraph (A) or paragraph (B) of this Article VII, or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by such person in connection therewith. D. Any indemnification under paragraph A or paragraph B of this Article VII shall be made by the Corporation only as authorized in the specific case upon a determination that indemnification of the director or officer is proper in the circumstances because he has met the applicable standard of conduct set forth in paragraph A or paragraph B. Such determination shall be made (1) by the Board of Directors by a majority vote of a quorum consisting of directors who were not parties to such action, suit or proceeding, 4 or (2) if such a quorum is not obtainable by independent legal counsel in a written opinion to the Corporation, or (3) by a majority vote of the stockholders, or (4) by the court in which the proceeding is or was pending upon application made by the Corporation or such person or the attorney or other person rendering services in connection with the defense, whether or not the application by such person, attorney, or other person is opposed by the Corporation. E. Expenses incurred in defending a civil or criminal action, suit or proceeding may be paid by the Corporation in advance of the final disposition of such action, suit or proceeding as authorized by the Board of Directors in a particular case upon receipt of an undertaking by or on behalf of the director or officer to repay such amount unless it shall ultimately be determined that he is entitled to be indemnified by the Corporation as authorized in this Article VII. F. Any indemnification pursuant to this Article VII shall not be deemed exclusive of any other rights to which those seeking indemnification may be entitled under any Bylaw, argument or otherwise and shall continue as to a person who has ceased to be a director or officer and shall inure to the benefit of the heirs, executors and administrators of such a person. G. The Corporation shall have the power to purchase and maintain insurance on behalf of any person who is or was a director or officer of the Corporation, or is or was serving at the request of the Corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against him and incurred by him in any such capacity or arising out of his status as such, whether or not the Corporation would have the power to indemnify him against such liability under the provisions of this Article VII. H. To the fullest extent permitted by the Hawaii Business Corporation Act as the same exists or may hereafter be amended, a director of the Corporation shall not be liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director. If the Hawaii Business Corporation Act is amended after the date of the filing of these Articles of Incorporation to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director of the Corporation shall be eliminated or limited to the fullest extent permitted by the Hawaii Business Corporation Act, as so amended from time to time. No repeal or modification of this Article VII by the stockholders shall adversely affect any right or protection of a director of the Corporation existing by virtue of this Article VII at the time of such repeal or modification. ARTICLE VIII LIMITED LIABILITY No stockholder of the Corporation shall be liable for any debt of the Corporation beyond any amount which may be due and unpaid upon the par value of the share or shares held by such stockholder. 5 ARTICLE IX BYLAWS In furtherance and not in limitation of the powers conferred by statute, the power to alter, amend or repeal the Bylaws or adopt new Bylaws, subject to repeal or change by action of the stockholders, shall be vested in the Board of Directors. ARTICLE X SERVICE OF PROCESS Service of process may be made upon any officer of the Corporation. ARTICLE XI AMENDMENT These Articles may be amended by the affirmative vote of the holders of not less than two-thirds (2/3) of all the stock of the Corporation issued and outstanding and having voting power, at a meeting duly called for such purpose, hereafter prescribed by statute, and all rights conferred on stockholders herein are granted subject to this reservation. ARTICLE XII DURATION The Corporation shall exist in Perpetuity. 6 DESIGNATION OF PREFERRED STOCK SECTION 1. DESIGNATION AND AMOUNT. The shares of such series shall be designated as Series A Junior Participating Cumulative Preferred Stock, par value $.01 per share (the "Series A Preferred Stock"), and the number of shares constituting such series shall be 20,000 (twenty thousand). SECTION 2. DIVIDENDS AND DISTRIBUTIONS. (a) The holders of shares of Series A Preferred Stock, in preference to the holders of shares of Common Stock, par value $.01 per share, of the Corporation (the "Common Stock") and of any other junior stock of the Corporation that may be outstanding, shall be entitled to receive, when, as and if declared by the Board of Directors out of funds legally available for the purpose, quarterly dividends payable in cash on the [tenth day of January, April, July and October] in each year (each such date being referred to herein as a "Quarterly Dividend Payment Date"), commencing on the first Quarterly Dividend Payment Date after the first issuance of a share or fraction of a share of Series A Preferred Stock, in an amount per share (rounded to the nearest cent) equal to the greater of (i) $.25 per share ($1.00 per annum), or (ii) subject to the provision for adjustment hereinafter set forth, 1000 times the aggregate per share amount of all cash dividends, and 1000 times the aggregate per share amount (payable in kind) of all non-cash dividends or other distributions, other than a dividend payable in shares of Common Stock, or a subdivision of the outstanding shares of Common Stock (by reclassification or otherwise), declared on the Common Stock since the immediately preceding Quarterly Dividend Payment Date or, with respect to the first Quarterly Dividend Payment Date, since the first issuance of any share or fraction of a share of Series A Preferred Stock. In the event that the Corporation shall at any time declare or pay any dividend on Common Stock payable in shares of Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise) into a greater or lesser number of shares of Common Stock, then and in each such event, the amount to which the holder of each share of Series A Preferred Stock was entitled immediately prior to such event under clause (ii) of the preceding sentence shall be adjusted by multiplying such amount by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately after such event, and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event. (b) The Corporation shall declare a dividend or distribution on the Series A Preferred Stock as provided in paragraph (a) of this Section 2 immediately after it declares a dividend or distribution on the Common Stock (other than a dividend payable in shares of Common Stock); provided, however, that in the event no dividend or distribution shall have been declared on the Common Stock during the period between any Quarterly Dividend Payment Date and the next subsequent Quarterly Dividend Payment Date, a dividend of $.25 per share ($1.00 per annum) on the Series A Preferred Stock shall nevertheless be payable on such subsequent Quarterly Dividend Payment Date. (c) Dividends shall begin to accrue and be cumulative on outstanding shares of Series A Preferred Stock from the Quarterly Dividend Payment Date next preceding the date of issue of such shares of Series A Preferred Stock, unless the date 7 of issue of such shares is prior to the record date for the first Quarterly Dividend Payment Date, in which case dividends on such shares shall begin to accrue from the date of issue of such shares, or unless the date of issue is a Quarterly Dividend Payment Date or is a date after the record date for the determination of holders of shares of Series A Preferred Stock entitled to receive a quarterly dividend and before such Quarterly Dividend Payment Date, in either of which cases such dividends shall begin to accrue and be cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall cumulate but shall not bear interest. Dividends paid on the shares of Series A Preferred Stock in an amount less than the total amount of such dividends at the time accrued and payable on such shares shall be allocated pro rata on a share-by-share basis among all such shares at the time outstanding. The Board of Directors may fix a record date for the determination of holders of shares of Series A Preferred Stock entitled to receive payment of a dividend or distribution declared thereon, which record date shall be not more than 60 days prior to the date fixed for the payment thereof. SECTION 3. VOTING RIGHTS. The holders of shares of Series A Preferred Stock shall have the following voting rights: (a) Each share of Series A Preferred Stock shall entitle the holder thereof to 1000 votes (and each one one-thousandth of a share of Series A Preferred Stock shall entitle the holder thereof to one vote) on all matters submitted to a vote of the shareholders of the Corporation. In the event that the Corporation shall at any time declare or pay any dividend on Common Stock payable in shares of Common Stock or effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then and in each such event, the number of votes per share to which holders of shares of Series A Preferred Stock were entitled immediately prior to such event shall be adjusted by multiplying such number by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately after such event, and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event. (b) Except as otherwise provided in the Amended Articles of Incorporation of the Corporation or herein or by law, the holders of shares of Series A Preferred Stock and the holders of shares of Common Stock shall vote together as one class on all matters submitted to a vote of shareholders of the Corporation. (c) In addition, the holders of shares of Series A Preferred Stock shall have the following special voting rights: (i) In the event that at any time dividends on Series A Preferred Stock, whenever accrued and whether or not consecutive, shall not have been paid or declared and a sum sufficient for the payment thereof set aside, in an amount equivalent to six quarterly dividends on all shares of Series A Preferred Stock at the time outstanding, then and in each such event, the holders of shares of Series A Preferred Stock and each other series of preferred stock now or hereafter issued that shall be accorded such class voting right by the Board of Directors and that shall have the right to elect one director (or, in the event any such other series is entitled to a greater number of directors, such number of directors, which shall be cumulative with 8 and not in addition to the director provided for herein, such director or directors being hereinafter referred to as "Special Directors") as the result of a prior or subsequent default in payment of dividends on such series (each such other series being hereinafter called "Other Series of Preferred Stock"), voting separately as a class without regard to series, shall be entitled to elect the Special Director at the next annual meeting of shareholders of the Corporation, in addition to the directors to be elected by the holders of all shares of the Corporation entitled to vote for the election of directors, and the holders of all shares (including the Series A Preferred Stock) otherwise entitled to vote for directors, voting separately as a class, shall be entitled to elect the remaining members of the Board of Directors, provided that the Series A Preferred Stock and each Other Series of Preferred Stock, voting as a class, shall not have the right to elect more than one Special Director (in addition to any Special Director to which the holders of any Other Series of Preferred Stock are then entitled). Such special voting right of the holders of shares of Series A Preferred Stock may be exercised until all dividends in default on the Series A Preferred Stock shall have been paid in full or declared and funds sufficient therefor set aside, and when so paid or provided for, such special voting right of the holders of shares of Series A Preferred Stock shall cease, but subject always to the same provisions for the vesting of such special voting rights in the event of any such future dividend default or defaults. (ii) At any time after such special voting rights shall have so vested in the holders of shares of Series A Preferred Stock, the Secretary of the Corporation may, and upon the written request of the holders of record of 10% or more in number of the shares of Series A Preferred Stock and each Other Series of Preferred Stock then outstanding addressed to the Secretary at the principal executive office of the Corporation shall, call a special meeting of the holders of shares of Preferred Stock so entitled to vote, for the election of the Special Directors to be elected by them as herein provided, to be held within 60 days after such call and at the place and upon the notice provided by law and in the Bylaws for the holding of meetings of shareholders; provided, however, that the Secretary shall not be required to call such special meeting in the case of any such request received less than 90 days before the date fixed for any annual meeting of shareholders, and if in such case such special meeting is not called or held, the holders of shares of Preferred Stock so entitled to vote shall be entitled to exercise the special voting rights provided in this paragraph at such annual meeting. If any such special meeting required to be called as above provided shall not be called by the Secretary within 30 days after receipt of any such request, then the holders of record of 10% or more in number of the shares of Series A Preferred Stock and each Other Series of Preferred Stock then outstanding may designate in writing one of their number to call such meeting, and the person so designated may, at the expense of the Corporation, call such meeting to be held at the place and upon the notice given by such person, and for that sole purpose shall have access to the stock books of the Corporation. No such special meeting and no adjournment thereof shall be held on a date later than 60 days before the annual meeting of shareholders. If, at any meeting so called or at any annual meeting held while the holders of shares of Series A Preerred Stock have the special voting rights provided for in this paragraph, the holders of not less than 40% of the aggregate voting power of Series A Preferred Stock and each Other Series of Preferred Stock then outstanding are present in person or by proxy, which percentage shall be sufficient to constitute a quorum for the election of additional directors as herein provided, the then authorized number of directors of the Corporation shall be increased by the number of Special Directors to be elected, as of the time of such special meeting or the time of the first such annual meeting held while 9 such holders have special voting rights and such quorum is present, and the holders of shares of Series A Preferred Stock and each Other Series of Preferred Stock, voting as a class, shall be entitled to elect the Special Director or Directors so provided for. If the directors of the Corporation are then divided into classes under provisions of the Amended Articles of Incorporation of the Corporation or the Bylaws, the Special Director or Directors shall belong to each class of directors in which a vacancy is created as a result of such increase in the authorized number of directors. If the foregoing expansion of the size of the Board of Directors shall not be valid under applicable law, then the holders of shares of Series A Preferred Stock and of each Other Series of Preferred Stock, voting as a class, shall be entitled, at the meeting of shareholders at which they would otherwise have voted, to elect a Special Director or Directors to fill any then existing vacancies on the Board of Directors, and shall additionally be entitled, at such meeting and each subsequent meeting of shareholders at which directors are elected, to elect all of the directors then being elected until by such class vote the appropriate number of Special Directors has been so elected. (iii) Upon the election at such meeting by the holders of shares of Series A Preferred Stock and each Other Series of Preferred Stock, voting as a class, of the Special Director or Directors they are entitled so to elect, the persons so elected, together with such persons as may be directors or as may have been elected as directors by the holders of all shares (including Series A Preferred Stock) otherwise entitled to vote for directors, shall constitute the duly elected directors of the Corporation. Each Special Director so elected by holders of shares of Series A Preferred Stock and each Other Series of Preferred Stock, voting as a class, shall serve until the next annual meeting or until their respective successors shall be elected and qualified, or if any such Special Director is a member of a class of directors under provisions dividing the directors into classes, each such Special Director shall serve until the annual meeting at which the term of office of such Special Director's class shall expire or until such Special Director's successor shall be elected and shall qualify, and at each subsequent meeting of shareholders at which the directorship of any Special Director is up for election, said special class voting rights shall apply in the reelection of such Special Director or in the election of such Special Director's successor; provided, however, that whenever the holders of shares of Series A Preferred Stock and each Other Series of Preferred Stock shall be divested of the special rights to elect one or more Special Directors as above provided, the terms of office of all persons elected as Special Directors, or elected to fill any vacancies resulting from the death, resignation, or removal of Special Directors shall forthwith terminate (and the number of directors shall be reduced accordingly). (iv) If, at any time after a special meeting of shareholders or an annual meeting of shareholders at which the holders of shares of Series A Preferred Stock and each Other Series of Preferred Stock, voting as a class, have elected one or more Special Directors as provided above, and while the holders of shares of Series A Preferred Stock and each Other Series of Preferred Stock shall be entitled so to elect one or more Special Directors, the number of Special Directors who have been so elected (or who by reason of one or more resignations, deaths or removals have succeeded any Special Directors so elected) shall by reason of resignation, death or removal be reduced the vacancy in the Special Directors may be filled by any one or more remaining Special Director or Special Directors. In the event that such election shall not occur within 30 days after such vacancy arises, or in the event that there shall not be incumbent at least one Special Director, the Secretary of the Corporation may, 10 and upon the written request of the holders of record of 10% or more in number of the shares of Series A Preferred Stock and each Other Series of Preferred Stock then outstanding addressed to the Secretary at the principal office of the Corporation shall, call a special meeting of the holders of shares of Series A Preferred Stock and each Other Series of Preferred Stock so entitled to vote, for an election to fill such vacancy or vacancies, to be held within 60 days after such call and at the place and upon the notice provided by law and in the Bylaws for the holding of meetings of shareholders; provided, however, that the Secretary shall not be required to call such special meeting in the case of any such request received less than 90 days before the date fixed for any annual meeting of shareholders, and if in such case such special meeting is not called, the holders of shares of Preferred Stock so entitled to vote shall be entitled to fill such vacancy or vacancies at such annual meeting. If any such special meeting required to be alled as above provided shall not be called by the Secretary within 30 days after receipt of any such request, then the holders of record of 10% or more in number of the shares of Series A Preferred Stock and each Other Series of Preferred Stock then outstanding may designate in writing one of their number to call such meeting, and the person so designated may, at the expense of the Corporation, call such meeting to be held at the place and upon the notice above provided, and for that purpose shall have access to the stock books of the Corporation; no such special meeting and no adjournment thereof shall be held on a date later than 60 days before the annual meeting of shareholders. (d) Nothing herein shall prevent the directors or shareholders from taking any action to increase the number of authorized shares of Series A Preferred Stock, or increasing the number of authorized shares of Preferred Stock of the same class as the Series A Preferred Stock or the number of authorized shares of Common Stock, or changing the par value of the Common Stock or Preferred Stock, or issuing options, warrants or rights to any class of stock of the Corporation as authorized by the Amended Articles of Incorporation of the Corporation, as it may hereafter be amended. (e) Except as set forth herein, holders of shares of Series A Preferred Stock shall have no special voting rights and their consent shall not be required (except to the extent they are entitled to vote as set forth in the Amended Articles of Incorporation of the Corporation or herein or by law) for taking any corporate action. SECTION 4. CERTAIN RESTRICTIONS. (a) Whenever any dividends or other distributions payable on the Series A Preferred Stock as provided in Section 2 hereof are in arrears, thereafter and until all accrued and unpaid dividends and distributions, whether or not declared, on shares of Series A Preferred Stock outstanding shall have been paid in full, the Corporation shall not, directly or indirectly: (i) declare or pay dividends on, or make any other distributions with respect to, any shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series A Preferred Stock; (ii) declare or pay dividends on, or make any other distributions with respect to, any shares of stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with the Series A Preferred Stock, except dividends paid ratably on shares of the Series A Preferred Stock and all such parity 11 stock on which dividends are payable or in arrears in proportion to the total amounts to which the holders of all such shares are then entitled; (iii) redeem or purchase or otherwise acquire for consideration shares of any stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) with the Series A Preferred Stock, provided that the Corporation may at any time redeem, purchase or otherwise acquire shares of any such junior stock in exchange for shares of any stock of the Corporation ranking junior (either as to dividends or upon dissolution, liquidation or winding up) to the Series A Preferred Stock; or (iv) purchase or otherwise acquire for consideration any shares of Series A Preferred Stock, or any shares of stock ranking on a parity with the Series A Preferred Stock, except in accordance with a purchase offer made in writing or by publication (as determined by the Board of Directors) to all holders of such shares upon such terms as the Board of Directors, after consideration of the respective annual dividend rates and other relative rights and preferences of the respective series and classes, shall determine in good faith will result in fair and equitable treatment among the respective series or classes. (b) The Corporation shall not permit any subsidiary of the Corporation to purchase or otherwise acquire for consideration, directly or indirectly, any shares of stock of the Corporation unless the Corporation could, under paragraph (a) of this Section 4, purchase or otherwise acquire such shares at such time and in such manner. SECTION 5. REACQUIRED SHARES. Any shares of Series A Preferred Stock purchased or otherwise acquired by the Corporation in any manner whatsoever shall be retired and canceled promptly after the acquisition thereof. All such shares shall upon their cancellation become authorized but unissued shares of preferred stock, without designation as to series, and may be reissued as part of any series of preferred stock created by resolution or resolutions of the Board of Directors (including Series A Preferred Stock), subject to the conditions and restrictions on issuance set forth herein. SECTION 6. LIQUIDATION, DISSOLUTION OR WINDING UP. Upon any liquidation, dissolution or winding up of the Corporation, no distribution shall be made to: (a) the holders of shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series A Preferred Stock unless, prior thereto, the holders of shares of Series A Preferred Stock shall have received the greater of (i) $1.00 per share ($.001 per one one-thousandth of a share), plus an amount equal to accrued and unpaid dividends and distributions thereon, whether or not declared, to the date of such payment, or (ii) an aggregate amount per share, subject to the provision for adjustment hereinafter set forth, equal to 1000 times the aggregate amount to be distributed per share to holders of shares of Common Stock; or (b) the holders of shares of stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with the Series A Preferred Stock, except distributions made ratably on the Series A Preferred Stock and all other such parity stock in proportion to the total amounts to which the holders of all such shares are entitled upon such liquidation, dissolution or winding up. 12 In the event that the Corporation shall at any time declare or pay any dividend on Common Stock payable in shares of Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise) into a greater or lesser number of shares of Common Stock, then and in each such event, the aggregate amount to which the holder of each share of Series A Preferred Stock was entitled immediately prior to such event under the proviso in clause (a) of the preceding sentence shall be adjusted by multiplying such amount by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately after such event, and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event. SECTION 7. CONSOLIDATION, MERGER, ETC. In the event that the Corporation shall enter into any consolidation, merger, combination or other transaction in which the shares of Common Stock are exchanged for or changed into other stock or securities, cash and/or any other property, or otherwise changed, then and in each such event, the shares of Series A Preferred Stock shall at the same time be similarly exchanged or changed in an amount per share (subject to the provision for adjustment hereinafter set forth) equal to 1000 times the aggregate amount of stock, securities, cash and/or any other property (payable in kind), as the case may be, into which or for which each share of Common Stock is changed or exchanged. In the event that the Corporation shall at any time declare or pay any dividend on Common Stock payable in shares of Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise) into a greater or lesser number of shares of Common Stock, then and in each such event, the amount set forth in the preceding sentence with respect to the exchange or change of shares of Series A Preferred Stock shall be adjusted by multiplying such amount by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately after such event, and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event. SECTION 8. NO REDEMPTION. The shares of Series A Preferred Stock shall not be redeemable. Notwithstanding the foregoing, the Corporation may acquire shares of Series A Preferred Stock in any other manner permitted by law, the Amended Articles of Incorporation of the Corporation or herein. SECTION 9. RANK. Unless otherwise provided in the Amended Articles of Incorporation of the Corporation, including any amendment relating to a subsequent series of preferred stock of the Corporation, the Series A Preferred Stock shall rank junior to all other series of the Corporation's preferred stock as to the payment of dividends and the distribution of assets on liquidation, dissolution or winding up, and senior to the Common Stock of the Corporation. SECTION 10. AMENDMENT. The Amended Articles of Incorporation of the Corporation shall not be amended in any manner that would materially and adversely alter or change the powers, preferences or special rights of the Series A Preferred Stock without the affirmative vote of the holders of at least two-thirds of the outstanding shares of Series A Preferred Stock, voting together as a single series. 13 SECTION 11. FRACTIONAL SHARES. Series A Preferred Stock may be issued in fractions of a share (in one one-thousandths (1/1000) of a share and integral multiples thereof) that shall entitle the holder thereof, in proportion to such holder's fractional shares, to exercise voting rights, receive dividends, participate in distributions and have the benefit of all other rights of holders of shares of Series A Preferred Stock. SECTION 12. PREEMPTIVE RIGHTS. No holder of shares of Series A Preferred Stock shall have any preemptive or preferential rights of subscription for or to purchase any shares of any class of stock or other securities of the Corporation, whether now or hereafter authorized, other than such right or rights, if any, and upon such terms and at such prices as the Board of Directors, in its discretion, from time to time may determine. The Board of Directors may issue shares of any class of stock or other securities without offering the same in whole or in part to the stockholders of the Corporation. DESIGNATION OF SPECIAL PREFERRED STOCK SECTION 1. DESIGNATION AND AMOUNT. The designation of the four series so created shall be (a) Series B Special Preferred Stock, par value $.01 per share (the "Series B Special Preferred Stock"), (b) Series C Special Preferred Stock, par value $.01 per share (the "Series C Special Preferred Stock"), (c) Series D Special Preferred Stock, par value $.01 per share (the "Series D Special Preferred Stock") and (d) Series E Special Preferred Stock, par value $.01 per share (the "Series E Special Preferred Stock") (collectively, the "Special Preferred Stock"). The Series B Special Preferred Stock shall consist of four (4) shares. The Series C Special Preferred Stock shall consist of one (1) share. The Series D Special Preferred Stock shall consist of one (1) share. The Series E Special Preferred Stock shall consist of one (1) share. SECTION 2. DIVIDENDS AND DISTRIBUTIONS. At any time that a dividend or distribution is declared and paid with respect to Common Stock, a dividend shall be paid on the Special Preferred Stock in an amount per share equal to twice the dividend per share paid on the Common Stock, and, except as provided in Sections 6 and 7 hereof, the Special Preferred Stock shall not be entitled to receive any other dividends or distributions thereon. SECTION 3. VOTING RIGHTS. (a) VOTING RIGHTS OF THE SPECIAL PREFERRED STOCK. The Special Preferred Stock shall have the right to vote: (i) as required by the Hawaii Business Corporation Act and (ii) together with Class A Common Stock as a single class with respect to any matters submitted to the shareholders of the Class A Common Stock of the Corporation. The holder of each share of Special Preferred Stock shall be entitled to vote each share of the Special Preferred Stock of the Corporation which shall have been held by such holder and registered in the name of such holder on the books of the Corporation. (b) NOTICE. So long as any shares of the Special Preferred Stock remain outstanding, the Corporation will provide the holders of the Special Preferred Stock with notice of each annual and special meeting of stockholders, including without limitation any meeting at which matters on which the Special Preferred Stock is entitled to vote, to the same extent as the holders of the Common Stock. 14 (c) CONDITIONAL RIGHT TO ELECT DIRECTORS TO FILL VACANCIES. (i) SERIES B SPECIAL PREFERRED STOCK. In the event of a vacancy or vacancies on the Board of Directors of the Corporation caused by the removal, resignation or death of one or more directors whom the holders of Series B Special Preferred Stock are entitled to identify to the Board of Directors for nomination to the Board of Directors pursuant to the Bylaws of the Corporation, and unless such vacancy is filled by the Board of Directors in accordance with the Bylaws within 30 days, such vacancy or vacancies may be filled by the affirmative vote of a majority of the holders of the Series B Special Preferred Stock at a special meeting of holders of Series B Special Preferred Stock called for such purpose, or by the unanimous written consent in lieu of meeting of all holders of Series B Special Preferred Stock, such director or directors to hold office until the next election of directors. (ii) SERIES C SPECIAL PREFERRED STOCK. In the event of a vacancy on the Board of Directors of the Corporation caused by the removal, resignation or death of a director whom the holders of Series C Special Preferred Stock are entitled to identify to the Board of Directors for nomination pursuant to the Bylaws of the Corporation, and unless such vacancy is filled by the Board of Directors in accordance with the Bylaws within 30 days, such vacancy may be filled by the affirmative vote of a majority of the holders of the Series C Special Preferred Stock at a special meeting of holders of the Series C Special Preferred Stock called for such purpose, or by the unanimous written consent in lieu of meeting of all holders of Series C Special Preferred Stock, such director to hold office until the next election of directors. (iii) SERIES D SPECIAL PREFERRED STOCK. In the event of a vacancy on the Board of Directors of the Corporation caused by the removal, resignation or death of a director whom the holders of Series D Special Preferred Stock are entitled to identify to the Board of Directors for nomination pursuant to the Bylaws of the Corporation, unless such vacancy is filled by the Board of Directors in accordance with the Bylaws within 30 days, such vacancy may be filled by the affirmative vote of a majority of the holders of the Series D Special Preferred Stock at a special meeting of holders of Series D Special Preferred Stock called for such purpose, or by the unanimous written consent in lieu of meeting of all holders of Series D Special Preferred Stock, such director to hold office until the next election of directors. (iv) SERIES E SPECIAL PREFERRED STOCK. In the event of a vacancy on the Board of Directors of the Corporation caused by the removal, resignation or death of a director whom the holders of Series E Special Preferred Stock are entitled to identify to the Board of Directors for nomination pursuant to the Bylaws of the Corporation, unless such vacancy is filled by the Board of Directors in accordance with the Bylaws within 30 days, such vacancy may be filled by the affirmative vote of a majority of the holders of the Series E Special Preferred Stock at a special meeting of holders of Series E Special Preferred Stock called for such purpose, or by the unanimous written consent in lieu of meeting of all holders of Series E Special Preferred Stock, such director to hold office until the next election of directors. (d) Except as otherwise expressly provided herein or otherwise expressly required by law, the Special Preferred Stock shall not have any other voting rights with respect to the affairs of the Corporation. 15 SECTION 4. CONVERSION. (a) CONVERTIBLE INTO CLASS A COMMON STOCK. (i) SERIES B SPECIAL PREFERRED STOCK. a) TRANSFER. A share of Series B Special Preferred Stock shall be converted into one share of Class A Common Stock automatically upon transfer of such share to any person (a "Transferee") who is not an "affiliate" of the initial holder of such share of Series B Special Preferred Stock. "Affiliate" shall mean any corporation, partnership, limited liability company, trust or other entity or an individual, which is, or is at least 50% owned, directly or indirectly, by, one or more of the stockholders of the general partners and/or the stockholders of the limited partners of the holder of the Series B Special Preferred Stock as of the date of issuance thereof. b) LESS THAN 5%. Each share of Series B Special Preferred Stock shall be converted into one share of Class A Common Stock automatically if the holder of Series B Special Preferred Stock is the holder of record of less than 5% of the "outstanding common equity interest" of the stock of the Corporation for a period of 365 consecutive days. "Outstanding common equity interest" shall mean outstanding Class A Common Stock, outstanding Class B Common Stock, Class A Common Stock to be issued upon exercise, conversion or exchange of outstanding warrants, stock options, or convertible stock, or other securities exerciseable, convertible or exchangeable into Class A Common Stock (without taking into effect any anti-dilution provisions in such securities). (ii) SERIES C SPECIAL PREFERRED STOCK. A share of Series C Special Preferred Stock shall be converted into one share of Class A Common Stock automatically upon transfer of such share to any Transferee. In addition to the foregoing, each share of the Series C Special Preferred Stock shall be converted into one share of Class A Common Stock automatically if the collective bargaining agreement by and between the holders of such share and the Corporation is amended through collective bargaining pursuant to the Railway Labor Act, 45 U.S.C. Section 156, so that the collective bargaining agreement no longer entitles such holders to nominate a representative on the Board of Directors. (iii) SERIES D SPECIAL PREFERRED STOCK. A share of Series D Special Preferred Stock shall be converted into one share of Class A Common Stock automatically upon transfer of such share to any Transferee. In addition to the foregoing, each share of the Series D Special Preferred Stock shall be converted into one share of Class A Common Stock automatically if the collective bargaining agreement by and between the holders of such share and the Corporation is amended through collective bargaining pursuant to the Railway Labor Act, 45 U.S.C. Section 156, so that the collective bargaining agreement no longer entitles such holders to nominate a representative on the Board of Directors. (iv) SERIES E SPECIAL PREFERRED STOCK. A share of Series E Special Preferred Stock shall be converted into one share of Class A Common Stock automatically upon transfer of such share to any Transferee. In addition to the foregoing, each share of the Series E Special Preferred Stock shall be converted into one share of Class A Common Stock automatically if the collective bargaining agreement by and between the holders of such share and the Corporation is amended 16 through collective bargaining pursuant to the Railway Labor Act, 45 U.S.C. Section 156, so that the collective bargaining agreement no longer entitles such holders to nominate a representative on the Board of Directors. (b) TIME OF CONVERSION AND SURRENDER OF SHARES. Conversion shall be deemed to have been effected on the date that, as the case may be, (i) the share of Special Preferred Stock is transferred to the Transferee, (ii) is the 365th consecutive day after the holder of Series B Special Preferred Stock is the holder of record of less than 5% of the outstanding common equity interest of the stock of the Corporation, and (iii) the related collective bargaining agreement is amended, and each such date is referred to herein as the "Conversion Date." The Transferee or the other holder of the converted Special Preferred Stock shall be deemed to have become a stockholder of record of the Class A Common Stock on the applicable Conversion Date. On the applicable Conversion Date or as soon as practicable thereafter, any holder of a converted share of Special Preferred Stock must deliver the certificate representing such share to the Corporation during regular business hours at the principal office of the Corporation or at such other place as may be designated in writing delivered to the holder of such certificate by the Corporation, duly endorsed for transfer to the Corporation (if required by it), accompanied by written notice identifying the Transferee or other holder, as the case may be. As promptly as practicable thereafter, the Corporation shall issue and deliver at such office to such Transferee or other holder a certificate for the shares of Class A Common Stock issuable upon conversion. (c) ISSUANCE OF CLASS A COMMON STOCK. All shares of Class A Common Stock that may be issued upon conversion of the Special Preferred Stock shall be issued for consideration that the Board of Directors hereby determines to be adequate, and upon issuance, such shares of Class A Common Stock will be validly issued, fully paid and nonassessable. The Corporation will pay any and all documentary and other taxes that may be payable in respect of any issue or delivery of shares of Class A Common Stock on conversion of the Special Preferred Stock pursuant hereto. The Corporation shall not, however, be required to pay any tax that may be payable in respect of any transfer involved in the issue and delivery of shares of Class A Common Stock in a name other than that in which the shares of the Special Preferred Stock so converted were registered, and no such issue or delivery shall be made unless and until the person requesting such transfer has paid to the Corporation the amount of any such tax or has established to the satisfaction of the Corporation that such tax has been paid. (d) ADJUSTMENTS. The number of shares of Class A Common Stock issuable upon the conversion of each share of the Special Preferred Stock shall not be subject to adjustment. SECTION 5. REACQUIRED SHARES. Any shares of Special Preferred Stock purchased or otherwise acquired by the Corporation in any manner whatsoever (including upon conversion into Class A Common Stock) shall be retired and canceled promptly after the acquisition thereof. All such shares shall upon their cancellation become authorized but unissued shares of preferred stock, without designation as to series, and may be reissued as part of any series of preferred stock subsequently created by resolution or resolutions of the Board of Directors. SECTION 6. LIQUIDATION, DISSOLUTION OR WINDING UP. In the event of the liquidation, dissolution or winding up of the Corporation, whether voluntary or 17 involuntary, the holders of the Special Preferred Stock shall be entitled to receive, out of the assets of the Corporation, whether such assets are capital or surplus of any nature, $.01 per share of Special Preferred Stock before any payment shall be made or any assets distributed to the holders of the Common Stock or the holders of any other class of stock junior in respect of liquidation rights to the Special Preferred Stock; and the holders of the Special Preferred Stock shall not be entitled to any further payments. If upon such liquidation, dissolution or winding up, whether voluntary or involuntary, the assets of the Corporation or proceeds thereof shall be insufficient to make the full liquidating payment of $.01 per share of the Special Preferred Stock and the full liquidating payment due to any holder of Preferred Stock of any series ranking pari passu with the Special Preferred Stock, then such assets and proceeds shall be distributed among the holders of the Special Preferred Stock, ratably on a share for share basis in accordance with the respective amounts which would be payable on all such series of Preferred Stock, if all remaining liquidating amounts payable were paid in full and nothing shall be paid to the holders of any other class of stock junior to the Special Preferred Stock. Neither a consolidation nor merger of the Corporation with or into one or more corporations, nor a sale of all or a substantial part of the assets of the Corporation, shall be deemed to be a liquidation, dissolution or winding up within the meaning of this Section 6 unless such consolidation, merger or sale shall be in connection with a plan of liquidation, dissolution or winding up of the business of the Corporation. SECTION 7. CONSOLIDATION, MERGER, ETC. In the event that the Corporation shall enter into any consolidation, merger, combination or other transaction in which the shares of Common Stock are exchanged for or changed into other stock or securities, cash and/or any other property, or otherwise changed, then and in each such event, all shares of Special Preferred Stock shall at the same time be similarly exchanged or changed in an amount per share equal to the aggregate amount of stock, securities, cash and/or any other property (payable in kind), as the case may be, into which or for which each share of Common Stock is changed or exchanged. SECTION 8. NO REDEMPTION. The shares of Special Preferred Stock shall not be redeemable. Notwithstanding the foregoing, the Corporation may acquire shares of Special Preferred Stock in any other manner permitted by law, the Amended Articles of Incorporation of the Corporation or herein. SECTION 9. RANK. With regard to rights to receive distributions upon liquidation, dissolution or winding up of the Corporation, the Special Preferred Stock shall rank (i) senior to the Common Stock of the Corporation, (ii) senior to any series of Preferred Stock of the Corporation the terms of which specifically provide that such series shall rank junior to the Special Preferred Stock, (iii) junior to any series of Preferred Stock of the Corporation the terms of which specifically provide that such series shall rank senior to the Special Preferred Stock, and (iv) pari passu with each other and with any series of Preferred Stock of the Corporation the terms of which do not specifically provide that such series shall rank junior or senior to the Special Preferred Stock. SECTION 10. PREEMPTIVE RIGHTS. No holder of the shares of Special Preferred Stock shall have any preemptive or preferential rights of subscription for or to purchase any shares of any class of stock or other securities of the Corporation, whether now or hereafter authorized, other than such right or rights, if any, and upon such terms and at such prices as the Board of Directors, in its discretion from time to 18 time may determine. The Board of Directors may issue shares of Special Preferred Stock or other securities without offering the same in whole or in part to the stockholders of the Corporation. 19 EX-5.1 3 EXHIBIT 5.1 EXHIBIT 5.1 [LETTERHEAD OF HAWAIIAN AIRLINES, INC.] DECEMBER 23, 1998 Hawaiian Airlines, Inc. 3375 Koapaka Street Suite G350 Honolulu, HI 96819 Re: REGISTRATION STATEMENT ON FORM S-3 Ladies and Gentlemen: I have acted as counsel for Hawaiian Airlines, Inc., a Hawaii corporation (the "Company"), in connection with the Registration Statement of the Company on Form S-3 (the "Registration Statement") under the Securities Act of 1933, as amended, relating to the registration of 5,643,010 shares of Common Stock (the "Common Stock") of the Company held by Airline Investors Partnership, L.P., AMR Corporation, Martin Anderson and Robert R. Midkiff. In connection therewith, I have examined, among other things, the Registration Statement. I have also examined such corporate proceedings, documents, records and matters of law as I have 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 Common Stock are 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/ LYN F. ANZAI ----------------------------------------- Lyn F. Anzai
EX-23.2 4 EXHIBIT 23.2 EXHIBIT 23.2 CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS THE BOARD OF DIRECTORS HAWAIIAN AIRLINES, INC.: We consent to incorporation by reference in the Registration Statement on Form S-3 of Hawaiian Airlines, Inc., registering 5,643,010 shares of Common Stock, of our reports dated February 26, 1998, relating to the balance sheets of Hawaiian Airlines, Inc. as of December 31, 1997 and 1996, and the related statements of operations, shareholders' equity and cash flows for each of the years in the three-year period ended December 31, 1997, and relating to the financial statement schedule for the three-year period ended December 31, 1997, which reports appear in the December 31, 1997 annual report on Form 10-K of Hawaiian Airlines, Inc. We also consent to the reference to our firm under the heading "EXPERTS" in the prospectus. /s/ KPMG PEAT MARWICK LLP ----------------------------------------- KPMG Peat Marwick LLP
Honolulu, Hawaii December 22, 1998 -----END PRIVACY-ENHANCED MESSAGE-----