EMPLOYMENT AGREEMENT
This Employment Agreement dated as of August 1, 1990 is entered into by and
between Continental Airlines, Inc. (the "Company"), a Delaware corporation, and
John E. Luth (the "Executive" and, individually a "Party" and, collectively, the
"Parties").
The Company wishes to assure itself of the continued services of the Executive,
and the Executive is willing to continue employment with the Company on a full-
time basis, and upon the other terms and conditions hereinafter provided.
In consideration of the mutual covenants contained herein, the Parties agree as
follows:
1. Employment - The Company agrees to employ the executive, and the Executive
agrees to remain in the employ of the Company under the terms and conditions
herein provided.
2. Position - During his employment hereunder, the Executive agrees to serve
the Company and the Company shall employ the Executive in such capacity or
capacities as may be specified from time to time by the Board of Directors or
the Chief Executive Officer of the Company.
3. Term - The Executive's employment shall be one at will, to-wit: either the
Executive or the Company shall have the right to terminate it at any time, with
or without cause, and without any liability or obligation of either Party to the
other except as may be expressly specified in this Agreement.
4. Compensation - The Company will pay the Executive a base salary at an
initial annual rate of $150,000, payable in substantially equal semi-monthly
installments. During his employment with the Company, the Executive's salary
shall be reviewed periodically in accordance with Company policy and such review
may result in an increase in said salary.
5. Termination of Employment
(a) A "Termination of Employment" shall be defined as any one of the
following: (i) the termination of the Executive's employment by the Company
for any reason other than (A) willful misconduct or gross neglect of duty by the
Executive, (B) retirement under the ordinary retirement program of the Company,
(C) disability of the Executive resulting in absence from his duties to the
Company on a full-time basis for over 180 days or (D) death of the Executive;
(ii) a material reduction in the responsibilities or title of the Executive or
the corporate amenities to which he is entitled or (iii) a reduction of the
Executive's cash compensation by more than 10% below the highest annual salary
from time to time in effect for the Executive.
(b) Following a Termination of Employment, the Company will pay the
Executive, subject to the provisions of Section 8 hereof and as severance pay
or liquidated damages, or both, for the "Severance Period" (as hereafter
defined) a supplemental monthly amount that, when combined with the Executive's
earnings from other employment or consulting, will result in the Executive
realizing gross aggregate monthly earnings equal to his regular monthly salary
in effect prior to the Termination of Employment. The "Severance Period" shall
be a period of consecutive months immediately subsequent to such termination by
the Company, with the minimum number of months being twelve, with an additional
month for each two full years of service with the Company, or its affiliates,
up to maximum of eighteen months, and no more. All remuneration or wages earned
during such period by the Executive, either as an employee, independent
contractor or consultant to any person or entity other than the Company or its
subsidiaries or affiliates, shall reduce the Company's obligations hereunder.
(c) During the Severance Period, the Executive shall continue in the
Company's group insurance program, including long-term disability insurance,
provided he has not accepted other employment that provides comparable
benefits. The Executive's entitlement to benefit continuation pursuant to
the Consolidated Omnibus Budget Reconciliation Act shall commence at the end of
the Severance Period.
(d) During the Severance Period, and provided all annual pass cards in the
possession of the Executive have been surrendered to the Company, the Executive
and his eligible family members shall be entitled to pass privileges on
Continental Airlines of the same type and priority as the Executive received
prior to the Termination of Employment, subject to any changes in policy
generally applicable to officers of Continental Airlines still in the employ
thereof. Passes shall be issued upon individual requests directly to the
Continental Airlines pass bureau.
6. Stock Options - All options to acquire the Common Stock of the Company that
were granted to the Executive prior to 1990 (including options that were issued
in exchange for other options that were originally granted prior to 1990) shall
become immediately exercisable upon Termination of Employment and shall be
exercisable for one year thereafter. All options granted to the Executive
during 1990 and thereafter (other than those options referenced in the preceding
sentence) shall become and remain exercisable in accordance with the terms set
forth in the applicable letters granting such options.
7. Indemnification - The Company shall continue to indemnify the Executive
against all losses, including legal fees and expenses, arising from claims
against the Executive in connection with the Executive's good-faith execution
of his employment hereunder, to the fullest extent permitted by the Corporation
Code of the State of Delaware.
8. Post-Termination Obligations - All payments and benefits to the Executive
hereunder shall be subject to the Executive's compliance with the following
provisions during the applicability of this agreement and for one full year
after the expiration of termination hereof:
(a) The Executive shall, upon reasonable notice, furnish such information
and proper assistance to the Company and its affiliates as may reasonably be
required in connection with any litigation in which it or any of its affiliates
is, or may become, a party.
(b) The Executive will not discuss with any other employee of the Company
or its affiliates the formation or operations of any business intended to
compete with the Company or its affiliates, or the possible future employment
of such other employee by any business.
(c) If the Executive's employment is terminated under this Agreement, the
Executive shall actively pursue other employment and shall promptly notify the
Company when he accepts other employment or engages in consulting activities,
or works as an independent contractor; and such notification shall indicate the
monthly earnings, the annual salary rate, the employer and other information
which would enable the Company to perform its obligations under this Agreement.
(d) Any public statements made by the Executive concerning the Company or
its affiliates, officers, directors or employees shall be submitted for approval
in writing from the Company's public relations and legal departments.
(e) If the Executive fails to comply with the above obligations, the
Company may cease making severance payments and extending benefits to the
Executive and may recover by appropriate action instituted in any court of
competent jurisdiction any severance payments theretofore paid to the Executive.
9. Consolidation, Merger, Sale of Assets - This Agreement shall be binding
upon and inure to the benefit of the Executive and the Company and its
successors and assigns, including without limitation any corporation with or
into which the company may be consolidated, merged or to which the Company sells
or transfers all or substantially all of its assets.
10. Notices - Written notices required or furnished under this Agreement shall
be sent to the following addresses:
to the Company: Continental Airlines, Inc.
2929 Allen Parkway
Houston, Texas 77019
Attention: General Counsel
to the Executive: John E. Luth
1701 Hermann Drive, #1505
Houston, TX 77004
Notices shall be effective on the first business day following receipt thereof.
Notices sent by mail shall be deemed received on the date of delivery shown on
the return receipt.
11. Amendments - This Agreement may not be amended or changed, orally or in
writing except by the written agreement of the Parties.
12. Governing Law - This Agreement, and any dispute arising under or relating
to any provision of this Agreement shall be governed by and construed in
accordance with the laws of the State of Texas.
13. Confidentiality - All information provided by either Party to the other
hereunder, including the terms and conditions of the Agreement, shall be treated
by the Party receiving such information as confidential, and shall not be
disclosed by such Party to any party without the prior written consent of the
Party from which the information was obtained. This obligation of
confidentiality shall survive termination of this Agreement.
14. Severability - If any one or more of the provisions contained in this
Agreement are held to be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby.
15. Previous Agreements - This agreement, once executed by the parties, will
replace and supersede any and all previous employment agreements, either written
or verbal, between the parties.
16. Captions - All Section titles or captions contained in this Agreement are
for convenience only and shall not be deemed as part of this Agreement.
The parties hereto have executed this Agreement as of the date and year first
above written.
CONTINENTAL AIRLINES, INC.
_________________________________
By: Mickey P. Foret
President
___________________________
John E. Luth