Exhibit 10.24
EXECUTIVE EMPLOYMENT
AGREEMENT
This EMPLOYMENT AGREEMENT
(“Agreement”) dated March 24, 2005 and effective
as of March 29, 2005 (“Effective Date”) is entered
into by and between David Z. Arakawa (“Employee”) and
Hawaiian Airlines, Inc., a Hawaii corporation
(“Company”).
Company and Employee desire to
establish Company’s right to services of Employee, in the
capacity described below, on the terms and conditions and subject
to the rights of termination hereinafter set forth, and Employee
agrees to engage in such employment on those terms and
conditions.
In consideration of the mutual
agreements hereinafter set forth, Employee and Company have agreed
and do hereby agree as follows:
1.
EMPLOYMENT AS SENIOR VICE
PRESIDENT, GENERAL COUNSEL AND CORPORATE SECRETARY
(“GC”) . Company does hereby employ and engage
Employee as Senior Vice President - GC, and Employee does hereby
accept and agree to such engagement and employment.
a.
Basic Duties
. Employee’s duties
during the Employment Period shall be to serve as Senior Vice
President – GC, which shall generally include those contained
in Attachment A. The precise scope of the duties of Employee
may be modified from time to time at the discretion of
Company’s President or his designee(s) consistent with
Employee’s titles and general duties and responsibilities
hereunder.
b.
Reporting Relationship
. Employee shall at all times
report to the President or his designee(s).
c.
Time and Effort Expected of
Employee . Employee
shall devote full time, attention, energy and skill to the
performance of Employee’s duties for Company and for the
benefit of Company. Furthermore, Employee shall
exercise due diligence and care in
the performance of Employee’s duties to Company under this
Agreement.
2.
TERM OF AGREEMENT
. The term of this Agreement
(“Term”) shall commence on the Effective Date and shall
continue for a period of two (2) years, unless terminated
earlier as provided in Section 7 of this Agreement. The
term of this Agreement may be extended upon mutual agreement in
writing signed by Employee and an authorized representative of
Company. The period of time commencing on the Effective Date
and ending on the expiration date of the Term, or, if earlier, the
date of termination of Employee’s employment
(“Termination Date”) under this or any successor
agreement shall be referred to as the “Employment
Period.”
3.
COMPENSATION
.
a.
BASE SALARY
. Company shall pay Employee,
and Employee agrees to accept from Company, a base salary at the
rate of TWO HUNDRED THOUSAND DOLLARS AND NO /100 THS
DOLLARS ($200,000) per year (“Base Salary”), less
applicable withholdings required by law or Employee’s benefit
plans or other deductions authorized in writing by Employee to be
withheld or deducted, payable in equal semi-monthly installments in
accordance with Company’s regular payroll practices.
Employee’s Base Salary shall be reviewed annually by Company
and may be increased, but not decreased, by Company in its sole and
absolute discretion. Any adjusted amounts under this
Section 3.a. will thereafter become the “Base
Salary” for purposes of this Agreement.
c.
PERFORMANCE BONUS
. In addition to the Base
Salary, Employee shall be eligible to participate during the
Employment Period in any performance bonus plan hereafter
established for senior officers of Company by the Board of
Directors (the “BOD”). Any award to Employee
under that plan shall be payable, less applicable withholdings, in
the amount, in the manner, and at the time determined by the BOD,
in its sole and absolute discretion. Company will request that the
BOD award a target bonus equal to 50% of
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Employee’s Base Salary, with
actual payment amount established annually as a function of overall
corporate performance and Employee’s performance relative to
previously established management objectives.
d.
STOCK OPTIONS
. In addition to Base Salary,
Employee shall be eligible to participate during the Employment
Period in any stock option plan hereafter established for the
senior officers of Company by the BOD in accordance with plan terms
and applicable law. Any award to Employee under such plan
shall be made in an amount, in the manner, and at the time
determined by the BOD, in its sole and absolute discretion.
Company will request an incoming grant of 53,000 stock options for
Employee that would vest in two equal tranches, one tranche each
year, during the Employment Period. Additionally, Employee
will be considered for additional stock option grants if and when
such grants are awarded for other senior executives at
Company.
e.
LONG TERM INCENTIVE
PLANS . In addition
to Base Salary, Employee shall be eligible to participate during
the Employment Period in any long term incentive plans hereafter
established for the senior officers of Company by the BOD in
accordance with plan terms and applicable law. Any award to
Employee under such plan shall be made in an amount, in the manner,
and at the time determined by the BOD, in its sole and absolute
discretion.
f.
401(k) PLAN
. Employee shall be eligible
to participate in a 401(k) or analogous plan (the “401(k)
Plan”) according to its terms, which shall be developed by
Company, subject to approval of the BOD, and which shall not occur
before Company’s emergence from Chapter 11
bankruptcy.
4.
FRINGE BENEFITS
. During his employment under
this Agreement, Employee shall be eligible to participate in, and
to be covered by, such employee benefit plans effective generally
with respect to Company’s senior officers as those plans may
be amended, supplemented, replaced or terminated from time to time,
to the extent Employee is eligible under the terms of
such
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plans; and Employee shall be
eligible to receive such other fringe benefits as may be granted to
Employee from time to time by the BOD or as delegated by it in its
sole and absolute discretion. In addition to the foregoing
benefits, Employee shall also receive the following individual
benefits:
a.
TRAVEL BENEFITS
. During the Employment
Period, Employee and Employee’s spouse and eligible
dependents shall be entitled to travel benefits on Company flights
(but not charter flights) at a level and under procedures
commensurate with the senior officer level, subject to IRS
requirements, and pursuant to Company policy. Employee and
Employee’s spouse and eligible dependents of Employee shall
be entitled to travel benefits on other airlines consistent with
Company’s interline transportation agreements.
b.
EXECUTIVE LONG-TERM DISABILITY
INSURANCE PLAN .
Subject to the applicable waiting periods, Employee will be
included, at Company’s expense, in Company’s Executive
Long-Term Disability Insurance Plan, as it may be amended,
supplemented, replaced or terminated from time to time.
c.
BUSINESS EXPENSES
. Company shall reimburse
Employee for any and all reasonable out-of-pocket, necessary,
customary, and usual expenses, properly receipted in accordance
with Company policies, incurred by Employee on behalf of Company,
provided Employee properly accounts to Company for such expenses in
accordance with the rules and regulations of the Internal
Revenue Service under the Code, and in accordance with the standard
policies and procedures of Company to reimburse business expenses,
which obligation shall survive the termination of this
Agreement.
d.
VACATIONS . Company will provide reasonable
vacations authorized by the President subject to requirements of
operations and as duties may permit, provided that unused vacation
will not be accrued and Company will not make payment to Employee
for unutilized vacation.
e.
SICK LEAVE
. Reasonable sick leave for
illness or injury will also be
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provided, provided that unused sick
leave will not be accrued and Company will not make payment to
Employee for unutilized sick leave.
5.
CONFIDENTIAL
INFORMATION .
Employee recognizes that by reason of Employee’s employment
by and service to Company, Employee will occupy a position of trust
with respect to business and technical information of a secret or
confidential nature which is the property of Company which will be
imparted to Employee from time to time in the course of the
performance of Employee’s duties hereunder (the
“Confidential Information”). Employee
acknowledges that such information is Company’s valuable and
unique asset and agrees that Employee shall not, during or after
the Term of this Agreement, use or disclose directly or indirectly
any of Company’s Confidential Information to any person,
except that Employee may use and disclose to Company’s
authorized personnel such Confidential Information as is reasonably
appropriate in the course of the performance of Employee’s
duties hereunder. Company’s Confidential Information
shall include all information and knowledge of any nature and in
any form relating to Company including, but not limited to,
business plans; development projects; computer software and related
documentation and materials; designs, practices, processes,
methods, know-how and other facts relating to Company’s
business; and advertising, promotions, financial matters, sales and
profit figures, and customers or customer lists.
6.
TERMINATION OF EMPLOYEE’S
EMPLOYMENT .
a.
DEATH . If Employee dies while employed by
Company, Employee’s employment shall immediately
terminate. Company’s obligation to pay Employee’s
Base Salary shall cease as of the date of Employee’s death.
Thereafter, Employee’s beneficiaries or estate shall receive
benefits, if any, in accordance with Company’s retirement,
insurance, and other applicable benefit plans then in
effect.
b.
DISABILITY
. If Employee (i) becomes
Disabled, as defined in Company’s Executive Long-Term
Disability Plan, (ii) he cannot be reasonably
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accommodated by Company, and
(iii) he commences to receive long-term disability benefits,
Employee’s employment may be terminated by Company or
Employee. During any period prior to such termination during
which Employee is absent from the full-time performance of
Employee’s duties with Company due to Disability, Company
shall continue to pay Employee the Base Salary at the rate in
effect at the commencement of such period of Disability. Any
such payments made to Employee shall be reduced by amounts received
from disability insurance obtained or provided by Company, and by
the amounts of any benefits payable to Employee, with respect to
such period, under Company’s Executive Long-Term Disability
Plan. Subsequent to the termination provided for in this
Section 6.b., Employee’s eligibility for any benefits
shall be determined under Company’s retirement, insurance,
and other applicable benefit plans then in effect in accordance
with the terms of such plans.
c.
TERMINATION BY COMPANY FOR
CAUSE . Company may
terminate Employee’s employment under this Agreement for
“Cause” at any time prior to expiration of the Term of
the Agreement, only upon the occurrence of any one or more of the
following events:
(i)
The material breach of this
Agreement by Employee, including without limitation, repeated
neglect of Employee’s duties, Employee’s repeated
material lack of diligence and attention in performing services as
provided in this Agreement, or Employee’s repeated failure to
implement or adhere to Company policies.
(ii)
Conduct of a criminal nature that
may have an adverse impact on Company’s reputation and
standing in the community.
(iii)
Fraudulent conduct in connection
with the business affairs of Company, regardless of whether said
conduct is designed to defraud Company or others.
(iv)
Conduct at any time or place which
is detrimental to
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Hawaiian Airlines’ reputation
and/or goodwill among its customers and/or the community as
determined by the company.
(v)
Conduct in violation of the
Company’s and/or its parent company’s corporate
compliance rules, practices, procedures and ethical
guidelines.
(vi)
Material violation(s) of
Company’s House Rules, a copy of which has been
provided to Employee
