AMENDED AND RESTATED STOCKHOLDERS AGREEMENT

EXHIBIT 10.3

AMENDED AND RESTATED STOCKHOLDERS AGREEMENT

AMENDED AND RESTATED STOCKHOLDERS AGREEMENT, dated as of August 29, 2002 (this “Agreement”), by and among HAWAIIAN HOLDINGS, INC., a Delaware corporation (the “Company”), AIP, LLC, a Delaware limited liability company (“AIP”), the AIR LINE PILOTS ASSOCIATION, HAWAIIAN MASTER EXECUTIVE COUNCIL (“Hawaiian MEC”), the ASSOCIATION OF FLIGHT ATTENDANTS (“AFA”) and the INTERNATIONAL ASSOCIATION OF MACHINISTS AND AEROSPACE WORKERS (“IAM” and, together with the Hawaiian MEC and AFA, the “Unions”). 

WHEREAS, the parties hereto (or their predecessors) have entered into the Stockholders Agreement, dated December 8, 1995 (the “Original Stockholders Agreement).

WHEREAS, pursuant to an Agreement and Plan of Merger, dated as of May 2, 2002 (the “Hawaiian Merger Agreement”), by and among Hawaiian Airlines, Inc., a Hawaii corporation (“Hawaiian Airlines”), the Company and HA Sub Inc., and an Agreement and Plan of Merger, dated as of May 2, 2002 (the “AIP Merger Agreement”), by and among the Company, AIP General Partner, Inc., AIP, Inc., and AIP Merger Sub, Inc., Hawaiian Airlines was reorganized into a holding company structure whereby the Company owns (directly and indirectly) all of the shares of Hawaiian Airlines, and Airline Investors Partnership, L.P., a Delaware limited partnership (“AIP, L.P.”) was restructured into AIP (such transactions referred to herein collectively as the “Reorganization”).

WHEREAS, as a result of the Reorganization, the shareholders of Hawaiian Airlines (other than AIP, L.P.) received the same number of shares of the Company as they held immediately prior thereto, and AIP received the same number of shares of the Company as AIP, L.P. held immediately prior  thereto.

WHEREAS, in accordance with Section 5.10 of the Original Stockholders Agreement, each of AIP and the Company executed and delivered a Joinder to the Stockholders Agreement, pursuant to which AIP and the Company assumed all of the rights, duties and obligations of AIP, L.P. and Hawaiian Airlines, respectively, under the Original Stockholders Agreement.

WHEREAS, pursuant to the Hawaiian Merger Agreement (and, in the case of the Unions, in accordance with the collective bargaining agreements between Hawaiian Airlines and the Unions), each of AIP and each Union was issued a number of shares of a series of special preferred stock of the Company equal to the number of shares of the special preferred stock of Hawaiian Airlines held by AIP, L.P. and such Union, respectively, immediately prior to the Reorganization, with substantially the same rights, preferences and privileges as the special preferred stock of Hawaiian Airlines held by AIP, L.P. and each Union, respectively, immediately prior to the Reorganization.

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NOW, THEREFORE, in order to reflect the consummation of the Reorganization, the parties hereby amend and restate the Original Stockholders Agreement in its entirety to read as follows:

1.             Definitions.  As used in this Agreement, the following terms shall have the meanings set forth below: 

An “Affiliate” of, or a person “affiliated” with, a specified Person, means a Person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the Person specified.  The term “control” (including the terms “controlling,” “controlled by” and “under common control with”) means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract, or otherwise.

“AIP Stockholder” shall mean AIP or any “affiliate” of AIP as defined in the Charter Documents.

“Board of Directors” means the Board of Directors of the Company.

“Charter Documents” means the Amended and Restated Certificate of Incorporation and the Amended By-laws of the Company as in effect immediately after the Reorganization, copies of which are attached hereto as Exhibits A and B, respectively.

“Common Stock” means the Common Stock, par value $.01 per share, of the Company or any other capital stock of the Company into which such stock is reclassified or reconstituted.

“Common Stock Equivalents” means any security or obligation which is by its terms convertible into shares of Common Stock and any option, warrant or other subscription or purchase right with respect to Common Stock.

“Person” means any individual, corporation, partnership, limited liability company, firm, joint venture, association, joint stock company, trust, unincorporated organization, governmental body or other entity.

“Series A Special Preferred Stock,” “Series B Special Preferred Stock,” “Series C Special Preferred Stock” and “Series D Special Preferred Stock” shall have the meanings assigned to such terms in the Charter Documents.

“Shares” means, with respect to the AIP Stockholder, all shares, whether now owned or hereafter acquired, of Common Stock; provided, for purposes of Section 2, Shares shall be deemed to include Common Stock Equivalents.

“Stockholders Meeting” shall mean any regular or special meeting of the stockholders of the Company.

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“Written Consent” shall mean any written consent executed in lieu of a Stockholders Meeting.

2.             Restriction on Transfer of Shares.  The AIP Stockholder agrees that it shall not sell, give, assign or otherwise dispose of (whether by operation of law or otherwise) (each a “transfer”) any Shares or any right, title or interest therein or thereto to any Person that is, or is an Affiliate of, any Person that has been denied a Part 121 certificate by the Department of Transportation.  Any attempt to transfer any Shares or any such rights in violation of the preceding sentence shall be null and void ab initio, and the Company agrees not to register any such transfer. 

3.             Corporate Governance.

3.1           Election of Directors.  The AIP Stockholder shall vote its Shares at any Stockholders Meeting called for the purpose of filling positions on the Board of Directors, or in any Written Consent executed for such purpose, in favor of the directors standing for election and nominated by the holders of Series A Special Preferred Stock, Series B Special Preferred Stock, Series C Special Preferred Stock and Series D Special Preferred Stock, respectively.

3.2           Amendment of Charter Documents.  The AIP Stockholder shall vote its Shares at any Stockholders Meeting called for the purpose of revising the Charter Documents, or in any Written Consent executed for such purposes, against any proposed amendment to any Charter Document that would be inconsistent with, or alter the rights of the Unions or the obligations of the Board of Directors under, the Designation of Special Preferred Stock included in the Amended and Restated Certificate of Incorporation of the Company attached hereto as Exhibit A or any of Sections 3.2, 3.3, or 3.8 or Article XII of the Amended By-Laws of the Company attached hereto as Exhibit B (collectively referred to as the “Governance Provisions”).  In the event the Board of Directors purports to amend or revise the Charter Documents in any respect that would be inconsistent with, or alter the rights of the Unions or the obligations of the Board of Directors under, the Governance Provisions, then the AIP Stockholder shall, at the request of any Union and to the extent permitted by law, (i) seek a Stockholders Meeting or stockholder action by Written Consent, as soon as practicable, for the purpose of restoring the Governance Provisions, (2) propose a stockholder resolution at such Stockholders Meeting or action by Written consent to restore the Governance Provisions, and (3) vote its shares at any Stockholders Meeting, or in any Written Consent, in favor of such resolution to restore the Governance Provisions.

3.3           Board Committee Representation.  The AIP Stockholder shall make reasonable efforts to ensure that at least one Employee Director serves on each significant committee of the Board other than the Audit Committee (including, if any, the Executive Committee, the Strategic Planning Committee, the Board Nominating Committee and other committees of comparable significance).

3.4           General Obligations.  The AIP Stockholder shall not take any action inconsistent with the Governance Provisions.  In the event of any material

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change to the terms or structure of the rights or powers of the AIP Stockholder, as a stockholder or as a holder of the Series A Special Preferred Stock, under the Charter Documents or comparable corporate documentation (including, without limitation, changes in the AIP Stockholder’s right to nominate, designate, remove or replace directors on the Board of Directors), the AIP Stockholder shall, at the request of any Union and to the extent permitted by law, take all action necessary to implement comparable changes to the terms or structure of the rights or powers of such Union under the Charter Documents or comparable corporate documentation.

3.5           Stockholder Actions.  In order to effectuate the provisions of this Section 3, the AIP Stockholder hereby agrees that when any action or vote is required to be taken pursuant to this Agreement, such Stockholder shall attend the Stockholders Meeting, in person or by proxy, or execute or cause to be executed a Written Consent to effectuate such stockholder action, as appropriate.

4.             Stock Certificate Legend.  A copy of this Agreement shall be filed with the Secretary of the Company and kept with the records of the Company.  Each certificate representing Shares now held or hereafter acquired by the AIP Stockholder shall for as long as this Agreement is effective bear a legend substantially in the following form: 

THE SALE, ASSIGNMENT OR OTHER DISPOSITION (EACH A “TRANSFER”) AND VOTING OF ANY OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE RESTRICTED BY THE TERMS OF THE AMENDED AND RESTATED STOCKHOLDERS AGREEMENT, DATED AS OF AUGUST 29, 2002, BY AND AMONG THE COMPANY, AIP, LLC AND CERTAIN UNIONS, A COPY OF WHICH MAY BE INSPECTED AT THE COMPANY’S PRINCIPAL OFFICE.  THE COMPANY WILL NOT REGISTER THE TRANSFER OF SUCH SECURITIES ON THE BOOKS OF THE COMPANY IF THE TRANSFER HAS NOT BEEN MADE IN COMPLIANCE WITH THE STOCKHOLDERS AGREEMENT.

5.             Miscellaneous. 

5.1           Notices.  All notices or other communications given or made hereunder shall be validly given or made if in writing and delivered by facsimile transmission or in Person at, mailed by registered or certified mail, return receipt requested, postage prepaid, or sent by a reputable overnight courier to, the following addresses (and shall be deemed effective at the time of receipt thereof).

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or to such other address as the party to whom notice is to be given may have previously furnished notice in writing to the other in the manner set forth above.

5.2           Amendment and Waiver.

(a)           No failure or delay on the part of any party hereto in exercising any right, power or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power or remedy preclude any other or further exercise thereof or the exercise of any other right, power or remedy.  The remedies provided for herein are cumulative and are not exclusive of any remedies that may be available to the parties hereto at law, in equity or otherwise.

(b)           This Agreement may be amended, supplemented or modified only with the written consent of the AIP Stockholder and the Unions.

5.3           No Inconsistent Agreement.  The AIP Stockholder shall not enter into any stockholder agreement, voting agreement or other agreement that is inconsistent with the terms of this Agreement.

5.4           Enforcement.  The parties to this Agreement agree that the irreparable damage will occur in the event that any of the provisions of this Agreement is not performed in accordance with its specific terms or is otherwise breached and that monetary damages will not constitute adequate compensation for any breach of this Agreement.  Accordingly, in addition to any other remedy available to any party at law or

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equity, the parties shall be entitled to an injunction or injunctions in any court of competent jurisdiction to prevent breaches of this Agreement to specifically enforce the terms and provisions of this Agreement.

5.5           Severability.  If any provision of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, or unenforceable in any respect for any reason, the validity, legality or enforceability of such provision in every other respect and of each remaining provision of the Agreement shall not be impaired thereby in any respect.  The parties specifically intend that all of the rights of the Unions under this Agreement shall be enforceable to the fullest extent permitted by law.

5.6           Entire Agreement.  This Agreement, together with the exhibits hereto, is intended by the AIP Stockholder and the Unions as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and understanding of such parties hereto in respect of the subject matter contained herein and therein.  There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein or therein.  This Agreement, together with the exhibits hereto, supersede all prior agreements and understandings between the AIP Stockholder and the Unions with respect to such subject matter.

5.7           Term of Agreement.  This Agreement shall terminate at such time as the AIP Stockholder shall no longer have any right to designate directors pursuant to the Charter Documents.

5.8           GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW THEREOF EXCEPT TO THE EXTENT INTERNAL CORPORATE LAWS OF THE COMPANY’S STATE OF INCORPORATION SHALL APPLY.

5.9           Transfer to Affiliates.  An AIP Stockholder shall not transfer any Shares to any Affiliate of AIP or an AIP Stockholder (an “AIP Affiliate”) unless the AIP Affiliate agrees in writing to be bound by the terms and conditions of this Agreement in the same manner as AIP.

5.10         Successors and Assigns.  This agreement shall be binding on any successor that acquires all or substantially all of AIP or any AIP Affiliate that maintains beneficial or record ownership of any Shares (an “AIP Successor”), and the AIP Stockholder shall not adopt or permit any agreement or arrangement that results in an AIP Successor unless the AIP Successor agrees in writing to be bound by the terms and conditions of this Agreement in the same manner as AIP.  This Agreement is not assignable except in connection with a transfer of Shares by AIP to an “affiliate,” as defined in the Charter Documents.

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5.11         Notice of Transfer.  The AIP Stockholder shall provide the Company and the Unions with reasonable notice prior to transferring record or beneficial ownership of Shares to any Affiliate, Substantial Purchaser or AIP Successor.  For this purpose, a “Substantial Purchaser” shall mean a transferee (or group of transferees acting in concert) which acquires 10% or more of the Shares.

5.12         Counterparts.  This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, and all of which taken together shall constitute one and the same instrument.

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IN WITNESS WHEREOF, the undersigned have executed, or have cause to be executed, this Agreement on the date first written above.