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Exhibit 10.23
EXECUTIVE EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT ("Agreement") dated April 5, 2005 and
effective as of May 23, 2005 ("Effective Date") is entered into by
and between David Osborne ("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 — CHIEF INFORMATION
OFFICER ("CIO") . Company does hereby employ and engage
Employee as Senior Vice President - CIO, 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
— CIO, which shall include having overall charge and
responsibility for Information Technology ("IT") management
(encompassing enterprise architecture, plans, and accountability
for Company’s IT investments and results), information
management, information security (to protect the availability of
Company’s computer systems, the integrity of business
operations, and the confidentiality of sensitive information),
information quality guidelines (oversight and maintenance to ensure
and maximize the quality, objectivity, utility, and integrity of
information, including statistical information, disseminated by
Company), and implementation of and compliance with applicable
laws, rules and regulations. The precise scope of the duties of
Employee may be modified from time to time at the discretion of
Company’s President and Chief Executive Officer (CEO) 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 and CEO 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.
SIGNING BONUS . As an inducement to enter into this
Agreement, Company will pay Employee a signing bonus in the gross
amount of $100,000, less applicable withholdings, payable within
thirty (30) days after full execution of this Agreement.
b.
BASE SALARY . Company shall pay Employee, and Employee
agrees to accept from Company, a base salary at the rate of TWO
HUNDRED AND TWENTY-FIVE THOUSAND DOLLARS AND NO /100 THS DOLLARS ($225,000) 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.b. 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 60% of 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, and to receive an initial grant of a number
of option shares and having other terms and conditions consistent
with initial grants set forth in the cover letter to this
Agreement, and in accordance with plan terms and applicable law.
Subject to the foregoing, 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.
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, on a basis consistent with
other senior officers, but otherwise 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 vice president employees 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 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
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 and CEO 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 provided, provided that unused sick leave will
not be accrued and Company will not make payment to Employee for
unutilized sick leave.
5.
RELOCATION .
a.
Company will reimburse Employee for all reasonable costs related to
relocation to Hawaii, which will include, but not be limited to,
the following items: (i) the reasonable out-of-pocket costs
of moving his household goods and belongings from his present home
to Hawaii, including packing, unpacking, shipping and insurance;
(ii) the shipment of one automobile to Hawaii; and (iii) one
(1), one-way travel costs (coach) for Employee and his spouse and
eligible dependents directly related to Employee’s relocation
to Hawaii, (collectively referred to as the ‘Relocation
Expenses"). The Relocation Expenses will be reimbursed to a
maximum of $40,000, with appropriate receipts, grossed up for all
taxes incurred by employee on such reimbursements.
b.
If, during the first eighteen (18) months following the Effective
Date, Company terminates Employee’s employment without Cause
then Company will reimburse Employee for reasonable costs described
above as Relocation Expenses incurred to relocate from Hawaii
(collectively referred to as the "Termination Expenses"). The
Termination Expenses will be reimbursed up to a maximum of the
lesser of (i) actual Relocation Expenses paid under Section 5.a.
above, or (ii) $40,000, inclusive of tax, with appropriate
receipts.
c.
If, during the first twelve (12) months following the Effective
Date, Employee voluntarily resigns from Company (other than due to
a material breach of this Agreement by Company), Employee agrees to
repay Company the full amount Employee received as Relocation
Expenses in Section 5.a., and the full amount received by Employee
in Section 3. a .
6.
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.
7.
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) bec
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