EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is made by and between CONTINEN-
TAL AIRLINES, INC., a Delaware corporation ("Company"), and GORDON M. BETHUNE
("Executive").
W I T N E S S E T H:
WHEREAS, Company is desirous of employing Executive in an executive
capacity on the terms and conditions, and for the consideration, hereinafter
set forth and Executive is desirous of being employed by Company on such
terms and conditions and for such consideration;
NOW, THEREFORE, for and in consideration of the mutual promises,
covenants and obligations contained herein, Company and Executive agree as
follows:
ARTICLE 1: EMPLOYMENT AND DUTIES
1.1 Employment; Effective Date. Company agrees to employ Executive and
Executive agrees to be employed by Company, beginning as of the Effective
Date (as hereinafter defined) and continuing for the period of time set forth
in Article 2 of this Agreement, subject to the terms and conditions of this
Agreement. For purposes of this Agreement, the "Effective Date" shall be
June 6, 1995.
1.2 Positions. From and after the Effective Date, Company shall employ
Executive in the positions of President and Chief Executive Officer of
Company, or in such other positions as the parties mutually may agree, and
shall, for the full term of Executive's employment hereunder, cause Executive
to be nominated for election as a director of Company and use its best
efforts to secure such election.
1.3 Duties and Services. Executive agrees to serve in the positions
referred to in paragraph 1.2 and, if elected, as a director of Company and to
perform diligently and to the best of his abilities the duties and services
appertaining to such offices as set forth in the Bylaws of Company in effect
on the Effective Date, as well as such additional duties and services appro-
priate to such offices which the parties mutually may agree upon from time to
time.
ARTICLE 2: TERM AND TERMINATION OF EMPLOYMENT
2.1 Term. Unless sooner terminated pursuant to other provisions
hereof, Company agrees to employ Executive for a three-year period beginning
on the Effective Date. Said term of employment shall be extended
automatically for an additional successive three-year period as of the third
anniversary of the Effective Date and as of the last day of each successive
three-year period of time thereafter that this Agreement is in effect;
provided, however, that if, prior to the date which is six months before the
last day of any such three-year term of employment, either party shall give
written notice to the other that no such automatic extension shall occur,
then Executive's employment shall terminate on the last day of the three-year
term of employment during which such notice is given.
2.2 Company's Right to Terminate. Notwithstanding the provisions of
paragraph 2.1, Company, acting pursuant to an express resolution of the Board
of Directors of Company (the "Board of Directors"), shall have the right to
terminate Executive's employment under this Agreement at any time for any of
the following reasons:
(i) upon Executive's death;
(ii) upon Executive's becoming incapacitated for a period of
at least 180 days by accident, sickness or other circumstance which
renders him mentally or physically incapable of performing the material
duties and services required of him hereunder on a full-time basis
during such period;
(iii) for cause, which for purposes of this Agreement shall
mean Executive's gross negligence or willful misconduct in the
performance of the material duties and services required of him pursuant
to this Agreement;
(iv) for Executive's material breach of any provision of this
Agreement which, if correctable, remains uncorrected for 30 days
following written notice to Executive by Company of such breach; or
(v) for any other reason whatsoever, in the sole discretion
of the Board of Directors.
2.3 Executive's Right to Terminate. Notwithstanding the provisions of
paragraph 2.1, Executive shall have the right to terminate his employment
under this Agreement at any time for any of the following reasons:
(i) the assignment to Executive by the Board of Directors or
other officers or representatives of Company of duties materially
inconsistent with the duties associated with the positions described in
paragraph 1.2 as such duties are constituted as of the Effective Date;
(ii) a material diminution in the nature or scope of
Executive's authority, responsibilities, or titles from those applicable
to him as of the Effective Date;
(iii) the occurrence of material acts or conduct on the part of
Company or its officers or representatives which prevent Executive from
performing his duties and responsibilities pursuant to this Agreement;
(iv) Company requiring Executive to be permanently based
anywhere outside a major urban center in Texas;
(v) the taking of any action by Company that would materially
adversely affect the corporate amenities enjoyed by Executive on the
Effective Date;
(vi) a material breach by Company of any provision of this
Agreement which, if correctable, remains uncorrected for 30 days
following written notice of such breach by Executive to Company; or
(vii) for any other reason whatsoever, in the sole discretion
of Executive.
2.4 Notice of Termination. If Company or Executive desires to
terminate Executive's employment hereunder at any time prior to expiration of
the term of employment as provided in paragraph 2.1, it or he shall do so by
giving written notice to the other party that it or he has elected to termi-
nate Executive's employment hereunder and stating the effective date and
reason for such termination, provided that no such action shall alter or
amend any other provisions hereof or rights arising hereunder.
ARTICLE 3: COMPENSATION AND BENEFITS
3.1 Base Salary. During the period of this Agreement, Executive shall
receive a minimum annual base salary equal to the greater of (i) $550,000.00
or (ii) such amount as the parties mutually may agree upon from time to time.
Executive's annual base salary shall be paid in equal installments in accor-
dance with Company's standard policy regarding payment of compensation to
executives but no less frequently than semimonthly.
3.2 Bonus Programs. Executive shall participate in each cash bonus
program maintained by Company on and after the Effective Date (including,
without limitation, any such program maintained for the year during which the
Effective Date occurs) at a level which is not less than the maximum partici-
pation level made available to any Company executive (determined without
regard to period of service or other criteria that might otherwise be neces-
sary to entitle Executive to such level of participation).
3.3 Life Insurance. During the period of this Agreement, Company shall
maintain one or more policies of life insurance on the life of Executive
providing an aggregate death benefit in an amount not less than the Termina-
tion Payment (as such term is defined in paragraph 4.7). Executive shall
have the right to designate the beneficiary or beneficiaries of the death
benefit payable pursuant to such policy or policies up to an aggregate death
benefit in an amount equal to the Termination Payment. To the extent that
Company's purchase of, or payment of premiums with respect to, such policy or
policies results in compensation income to Executive, Company shall pay to
Executive an additional payment (the "Policy Payment") in an amount such that
after payment by Executive of all taxes imposed on Executive with respect to
the Policy Payment, Executive retains an amount of the Policy Payment equal
to the taxes imposed upon Executive with respect to such purchase or the
payment of such premiums. If for any reason Company fails to maintain the
full amount of life insurance coverage required pursuant to the preceding
provisions of this paragraph 3.3, Company shall, in the event of the death of
Executive while employed by Company, pay Executive's designated beneficiary
or beneficiaries an amount equal to the sum of (1) the difference between the
Termination Payment and any death benefit payable to Executive's designated
beneficiary or beneficiaries under the policy or policies maintained by
Company and (2) such additional amount as shall be required to hold
Executive's estate, heirs, and such beneficiary or beneficiaries harmless
from any additional tax liability resulting from the failure by Company to
maintain the full amount of such required coverage.
3.4 Vacation and Sick Leave. During each year of his employment,
Executive shall be entitled to vacation and sick leave benefits equal to the
maximum available to any Company executive, determined without regard to the
period of service that might otherwise be necessary to entitle Executive to
such vacation or sick leave under standard Company policy.
3.5 Supplemental Executive Retirement Plan.
(i) Company agrees to pay Executive the deferred compensation
benefits set forth in this paragraph 3.5 as a supplemental retirement plan
(the "Plan"). The base retirement benefit under the Plan (the "Base
Benefit") shall be in the form of an annual straight life annuity in an
amount equal to the product of (a) 1.6% times (b) the number of Executive's
credited years of service (as defined below) under the Plan times (c) the
Executive's final average compensation (as defined below). For purposes
hereof, Executive's credited years of service under the Plan shall be equal
to the number of Executive's years of benefit service with Company,
calculated as set forth in the Continental Airlines Retirement Plan beginning
at January 1, 1995; provided, however, that if Executive is paid the
Termination Payment under this Agreement, Executive shall be further credited
with three (3) additional years of service under the Plan. For purposes
hereof, Executive's final average compensation shall be equal to the greater
of (1) $550,000 or (2) the average of the five highest annual cash
compensation amounts paid to Executive by Company during the consecutive ten
calendar years immediately preceding his termination of employment at
retirement or otherwise. For purposes hereof, cash compensation shall
include base salary plus cash bonuses other than any cash bonus paid on or
prior to March 31, 1995. All benefits under the Plan shall be payable in
equal monthly installments beginning on the first day of the month following
the Retirement Date. For purposes hereof, "Retirement Date" is defined as
the later of (A) the date on which Executive attains (or in the event of his
earlier death, would have attained) age 65 or (B) the date of his retirement
from employment with Company. If Executive is not married on the Retirement
Date, benefits under the Plan will be paid to Executive during his lifetime
in the form of the Base Benefit. If Executive is married on the Retirement
Date, benefits under the Plan will be paid in the form of a joint and
survivor annuity that is actuarially equivalent (as defined below) to the
Base Benefit, with Executive's spouse as of the Retirement Date being
entitled during her lifetime after Executive's death to a benefit (the
"Survivor's Benefit") equal to 50% of the benefit payable to Executive during
their joint lifetimes. In the event of Executive's death prior to the
Retirement Date, his surviving spouse, if he is married on the date of his
death, will receive beginning on the Retirement Date an amount equal to the
Survivor's Benefit calculated as if Executive had retired with a joint and
survivor annuity on the date before his date of death. The amount of any
benefits payable to Executive and/or his spouse under the Continental
Airlines Retirement Plan shall be offset against benefits due under the Plan.
Executive shall be vested immediately with respect to benefits due under the
Plan. If Executive's employment with Company terminates for any reason prior
to February 14, 1999, Company shall provide further benefits under the Plan
to ensure that Executive is treated for all purposes as if he were fully
vested under the Continental Airlines Retirement Plan.
(ii) Executive understands that he must rely upon the general
credit of Company for payment of benefits under the Plan. Company has not
and will not in the future set aside assets for security or enter into any
other arrangement which will cause the obligation created to be other than a
general corporate obligation of Company or will cause Executive to be more
than a general creditor of Company.
(iii) For purposes of the Plan, the terms "actuarial
equivalent," or "actuarially equivalent" when used with respect to a
specified benefit shall mean the amount of benefit of a different type or
payable at a different age that can be provided at the same cost as such
specified benefit, as computed by the Actuary. The actuarial assumptions
used to determine equivalencies between different forms of annuities under
the Plan shall be the 1984 Unisex Pensioners Mortality 50% male, 50% female
calculation (with males set back one year and females set back five years),
with interest at an annual rate of 7%. The term "Actuary" shall mean the
individual actuary or actuarial firm selected by Company to service its
pension plans generally or if no such individual or firm has been selected,
an individual actuary or actuarial firm appointed by Company and reasonably
satisfactory to Executive and/or his spouse.
(iv) Company shall indemnify Executive on a fully grossed-up,
after-tax basis for any Medicare payroll taxes (plus any income taxes on such
indemnity payments) incurred by Executive in connection with the accrual
and/or payment of benefits under the Plan.
3.6 Additional Disability Benefit. If Executive shall begin to receive
long-term disability insurance benefits pursuant to a plan maintained by
Company and if such benefits cease prior to Executive's attainment of age 65
and while Executive remains disabled, then Company shall immediately pay
Executive upon the cessation of such benefits a lump-sum, cash payment in an
amount equal to the Termination Payment. If Executive receives payment of a
Termination Payment pursuant to the provisions of Article 4, then the provi-
sions of this paragraph 3.6 shall terminate. If Executive shall be disabled
at the time his employment with Company terminates and if Executive shall not
be entitled to the payment of a Termination Payment pursuant to the
provisions of Article 4 upon such termination, then Executive's right to
receive the payment upon the occurrence of the circumstances described in
this paragraph 3.6 shall be deemed to have accrued as of the date of such
termination and shall survive the termination of this Agreement.
3.7 Other Perquisites. During his employment hereunder, Executive
shall be afforded the following benefits as incidences of his employment:
(i) Automobile - Company has leased an automobile for
Executive's use pursuant to a lease agreement dated July 11, 1994 with
Chase Auto Leasing Corp., and Company will continue its performance
thereof and its current practices with respect thereto during the term
of this Agreement. Company agrees to take such actions as may be
necessary to permit Executive, at his option, to acquire title to the
automobile at the completion of the lease term by Executive paying the
residual payment then owing under the lease.
(ii) Business and Entertainment Expenses - Subject to
Company's standard policies and procedures with respect to expense
reimbursement as applied to its executive employees generally, Company
shall reimburse Executive for, or pay on behalf of Executive, reasonable
and appropriate expenses incurred by Executive for business related
purposes, including dues and fees to industry and professional
organizations, costs of entertainment and business development, and
costs reasonably incurred as a result of Executive's spouse accompanying
Executive on business travel.
(iii) Parking - Company shall provide at no expense to
Executive a parking place convenient to Executive's office and a parking
place at Intercontinental Airport in Houston, Texas.
(iv) Other Company Benefits - Executive and, to the extent
applicable, Executive's family, dependents and beneficiaries, shall be
allowed to participate in all benefits, plans and programs, including
improvements or modifications of the same, which are now, or may
hereafter be, available to similarly-situated Company employees. Such
benefits, plans and programs may include, without limitation, profit
sharing plan, thrift plan, annual physical examinations, health
insurance or health care plan, life insurance, disability insurance,
pension plan, pass privileges on Continental Airlines, and the like.
Company shall not, however, by reason of this paragraph be obligated to
institute, maintain, or refrain from changing, amending or
discontinuing, any such benefit plan or program, so long as such changes
are similarly applicable to executive employees generally.
ARTICLE 4: EFFECT OF TERMINATION ON COMPENSATION
4.1 By Expiration. If Executive's employment hereunder shall terminate
upon expiration of the term provided in paragraph 2.1 hereof, then all
compensation and all benefits to Executive hereunder shall terminate
contemporaneously with termination of his employment, except that the
benefits described in paragraph 3.5 shall continue to be payable, Executive
and his eligible family members shall be provided with Termination Pass
Privileges (as such term is defined in paragraph 4.7) for a period of three
years beginning on the effective date of such termination and thereafter with
SOR Pass Privileges (as such term is defined in paragraph 4.7) for the
remainder of Executive's lifetime, and, if such termination shall result from
Company's delivery of the written notice described in paragraph 2.1, then
Company shall (i) cause all options and shares of restricted stock awarded to
Executive, including, without limitation, any such awards under Company's
1994 Incentive Equity Plan, as amended (the "Incentive Plan"), and other
Awards (as defined in the Incentive Plan) made to Executive under the
Incentive Plan, to vest immediately upon such termination, (ii) pay Executive
on or before the effective date of such termination a lump-sum, cash payment
in an amount equal to the Termination Payment, (iii) provide Executive with
Outplacement Services (as such term is defined in paragraph 4.7), and (iv)
provide Executive and his eligible dependents with Continuation Coverage (as
such term is defined in paragraph 4.7) for a period of three years beginning
on the effective date of such termination.
4.2 By Company. If Executive's employment hereunder shall be
terminated by Company prior to expiration of the term provided in paragraph
2.1 hereof then, upon such termination, regardless of the reason therefor,
all compensation and all benefits to Executive hereunder shall terminate
contemporaneously with the termination of such employment, except that the
benefits described in paragraph 3.5 shall continue to be payable, Executive
and his eligible family members shall be provided with Termination Pass
Privileges for a period of three years beginning on the effective date of
such termination and thereafter with SOR Pass Privileges for the remainder of
Executive's lifetime, and:
(i) if such termination shall be for any reason other than
those encompassed by paragraphs 2.2(i), (ii), (iii) or (iv), then
Company shall provide Executive with the payments and benefits described
in clauses (i) through (iv) of paragraph 4.1; and
(ii) if such termination shall be for a reason encompassed by
paragraphs 2.2(i) or (ii), then Company shall (1) cause all options and
shares of restricted stock awarded to Executive, including, without
limitation, any such awards under the Incentive Plan, and other Awards
(as defined in the Incentive Plan) made to Executive under the Incentive
Plan, to vest immediately upon such termination, and (2) provide
Executive (or his designated beneficiary or beneficiaries) with the
benefits contemplated under paragraph 3.3 or paragraph 3.6, as
applicable.
4.3 By Executive. If Executive's employment hereunder shall be
terminated by Executive prior to expiration of the term provided in paragraph
2.1 hereof then, upon such termination, regardless of the reason therefor,
all compensation and benefits to Executive hereunder shall terminate
contemporaneously with the termination of such employment, except that the
benefits described in paragraph 3.5 shall continue to be payable, Executive
and his eligible family members shall be provided with Termination Pass
Privileges for a period of three years beginning on the effective date of
such termination and thereafter with SOR Pass Privileges for the remainder of
Executive's lifetime and, if such termination shall be pursuant to paragraphs
2.3(i), (ii), (iii), (iv), (v), or (vi) or for any reason whatsoever
following the occurrence of a Change in Control (as such term is defined in
the Incentive Plan (as amended by the First Amendment thereto) in effect as
of the date of this Agreement), then Company shall provide Executive with the
payments and benefits described in clauses (i) through (iv) of paragraph 4.1.
If Executive's employment hereunder shall be terminated by Executive prior to
January 12, 1996 for any reason (other than those encompassed by paragraphs
2.3(i), (ii), (iii), (iv), (v), or (vi)) and if a Change in Control has not
occurred prior to such termination, then Executive shall promptly refund to
Company $750,000 (which amount represents 50% of the cash bonus paid to
Executive by Company on July 12, 1994).
4.4 Certain Additional Payments by Company. Notwithstanding anything
to the contrary in this Agreement, if any payment, distribution or provision
of a benefit by Company to or for the benefit of Executive, whether paid or
payable, distributed or distributable or provided or to be provided pursuant
to the terms of this Agreement or otherwise (a "Payment"), would be subject
to an excise or other special additional tax that would not have been imposed
absent such Payment (including, without limitation, any excise tax imposed by
Section 4999 of the Internal Revenue Code of 1986, as amended), or any
interest or penalties with respect to such excise or other additional tax
(such excise or other additional tax, together with any such interest or
penalties, are hereinafter collectively referred to as the "Excise Tax"),
Company shall pay to Executive an additional payment (a "Gross-up Payment")
in an amount such that after payment by Executive of all taxes (including any
interest or penalties imposed with respect to such taxes), including any
income taxes and Excise Taxes imposed on any Gross-up Payment, Executive
retains an amount of the Gross-up Payment (taking into account any similar
gross-up payments to Executive under the Incentive Plan) equal to the Excise
Tax imposed upon the Payments. Company and Executive shall make an initial
determination as to whether a Gross-up Payment is required and the amount of
any such Gross-up Payment. Executive shall notify Company in writing of any
claim by the Internal Revenue Service which, if successful, would require
Company to make a Gross-up Payment (or a Gross-up Payment in excess of that,
if any, initially determined by Company and Executive) within ten business
days after the receipt of such claim. Company shall notify Executive in
writing at least ten business days prior to the due date of any response
required with respect to such claim if it plans to contest the claim. If
Company decides to contest such claim, Executive shall cooperate fully with
Company in such action; provided, however, Company shall bear and pay
directly or indirectly all costs and expenses (including additional interest
and penalties) incurred in connection with such action and shall indemnify
and hold Executive harmless, on an after-tax basis, for any Excise Tax or
income tax, including interest and penalties with respect thereto, imposed as
a result of Company's action. If, as a result of Company's action with
respect to a claim, Executive receives a refund of any amount paid by Company
with respect to such claim, Executive shall promptly pay such refund to
Company. If Company fails to timely notify Executive whether it will contest
such claim or Company determines not to contest such claim, then Company
shall immediately pay to Executive the portion of such claim, if any, which
it has not previously paid to Executive.
4.5 Payment Obligations Absolute. Company's obligation to pay
Executive the amounts and to make the arrangements provided in this Article 4
shall be absolute and unconditional and shall not be affected by any cir-
cumstances, including, without limitation, any set-off, counterclaim,
recoupment, defense or other right which Company (including its subsidiaries
and affiliates) may have against him or anyone else. All amounts payable by
Company shall be paid without notice or demand. Executive shall not be
obligated to seek other employment in mitigation of the amounts payable or
arrangements made under any provision of this Article 4, and, except as
provided in paragraph 4.7 with respect to Continuation Coverage, the obtain-
ing of any such other employment (or the engagement in any endeavor as an
independent contractor, sole proprietor, partner, or joint venturer) shall in
no event effect any reduction of Company's obligations to make (or cause to
be made) the payments and arrangements required to be made under this
Article 4.
4.6 Liquidated Damages. In light of the difficulties in estimating the
damages upon termination of this Agreement, Company and Executive hereby
agree that the payments and benefits, if any, to be received by Executive
pursuant to this Article 4 shall be received by Executive as liquidated
damages. Payment of the Termination Payment pursuant to paragraphs 4.1, 4.2,
or 4.3 shall be in lieu of any severance benefit Executive may be entitled to
under any severance plan or policy maintained by Company.
4.7 Certain Definitions and Additional Terms. As used herein, the
following capitalized terms shall have the meanings assigned below:
(i) "Continuation Coverage" shall mean the continued coverage
of Executive and his eligible dependents under Company's welfare benefit
plans available to executives of Company who have not terminated
employment (or the provision of equivalent benefits), including, without
limitation, medical, health, dental, life insurance, disability, vision
care, accidental death and dismemberment, and prescription drug, at no
greater cost to Executive than that applicable to a similarly situated
Company executive who has not terminated employment; provided, however,
that (1) subject to clause (2) below, the coverage under a particular
welfare benefit plan (or the receipt of equivalent benefits) shall
terminate upon Executive's receipt of comparable benefits from a
subsequent employer and (2) if Executive (and/or his eligible
dependents) would have been entitled to retiree coverage under a
particular welfare benefit plan had he voluntarily retired on the date
of his termination of employment, then such coverage shall be continued
as provided in such plan upon the expiration of the period Continuation
Coverage is to be provided pursuant to this Article 4. Notwithstanding
any provision in this Article 4 to the contrary, Executive's entitlement
to any benefit continuation pursuant to Section 601 et. seq. of the
Employee Retirement Income Security Act of 1974, as amended, shall
commence at the end of the period of, and shall not be reduced by the
provision of, any applicable Continuation Coverage;
(ii) "Outplacement Services" shall mean outplacement services,
at Company's cost and for a period of twelve months beginning on the
date of Executive's termination of employment, to be rendered by an
agency selected by Executive and approved by the Board of Directors
(with such approval not to be unreasonably withheld);
(iii) "SOR Pass Privileges" shall mean (1) pass privileges on
each airline operated by Company or any of its affiliates (or any
successor or successors thereto) at Chief Executive Officer retiree
grade and (2) membership in Company's President's Club (or any successor
program maintained by Company or any of its affiliates or any successor
or successors thereto);
(iv) "Termination Payment" shall mean an amount equal to three
times the sum of (1) Executive's annual base salary pursuant to
paragraph 3.1 in effect immediately prior to Executive's termination of
employment and (2) a deemed annual bonus which shall be equal to 25% of
the amount described in clause (1) of this paragraph 4.7(iv); and
(v) "Termination Pass Privileges" shall mean (1) pass
privileges on each airline operated by Company or any of its affiliates
(or any successor or successors thereto) at the highest type and
priority Executive received at any time during the six-month period
preceding his termination of employment (or, if higher, at the date
hereof), subject to any changes in policy generally applicable to the
Chief Executive Officer (or other highest ranking officer of the
Company) who is employed by Company and entitled to such type and
priority of pass privileges and (2) membership in Company's President's
Club (or any successor program maintained by Company or any of its
affiliates or any successor or successors thereto).
Executive's receipt of SOR Pass Privileges and Termination Pass Privileges
shall be conditioned upon Executive's delivery to Company of all effective
pass cards, UATP cards, PAC cards and ticket stock in Executive's possession
on the date of his termination of employment. Executive shall be issued an
Employee Travel Card valid at all times during the term of Executive's SOR
Pass Privileges and Termination Pass Privileges.
ARTICLE 5: MISCELLANEOUS
5.1 Interest and Indemnification. If any payment to Executive provided
for in this Agreement is not made by Company when due, Company shall pay to
Executive interest on the amount payable from the date that such payment
should have been made until such payment is made, which interest shall be
calculated at 3% plus the prime or base rate of interest announced by Texas
Commerce Bank N.A. (or any successor thereto) at its principal office in
Houston, Texas (but not in excess of the highest lawful rate), and such
interest rate shall change when and as any such change in such prime or base
rate shall be announced by such bank. If Executive shall obtain any money
judgment or otherwise prevail with respect to any litigation brought by
Executive or Company to enforce or interpret any provision contained herein,
Company, to the fullest extent permitted by applicable law, hereby
indemnifies Executive for his reasonable attorneys' fees and disbursements
incurred in such litigation and hereby agrees (i) to pay in full all such
fees and disbursements and (ii) to pay prejudgment interest on any money
judgment obtained by Executive from the earliest date that payment to him
should have been made under this Agreement until such judgment shall have
been paid in full, which interest shall be calculated at the rate set forth
in the preceding sentence.
5.2 Notices. For purposes of this Agreement, notices and all other
communications provided for herein shall be in writing and shall be deemed to
have been duly given when personally delivered or when mailed by United
States registered or certified mail, return receipt requested, postage
prepaid, addressed as follows:
If to Company to : Continental Airlines, Inc.
2929 Allen Parkway, Suite 2010
Houston, Texas 77019
Attention: General Counsel
If to Executive to: Mr. Gordon M. Bethune
3340 Del Monte
Houston, Texas 77019
or to such other address as either party may furnish to the other in writing
in accordance herewith, except that notices of changes of address shall be
effective only upon receipt.
5.3 Applicable Law. This contract is entered into under, and shall be
governed for all purposes by, the laws of the State of Texas.
5.4 No Waiver. No failure by either party hereto at any time to give
notice of any breach by the other party of, or to require compliance with,
any condition or provision of this Agreement shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time.
5.5 Severability. If a court of competent jurisdiction determines that
any provision of this Agreement is invalid or unenforceable, then the
invalidity or unenforceability of that provision shall not affect the
validity or enforceability of any other provision of this Agreement, and all
other provisions shall remain in full force and effect.
5.6 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of
which together will constitute one and the same Agreement.
5.7 Withholding of Taxes and Other Employee Deductions. Company may
withhold from any benefits and payments made pursuant to this Agreement all
federal, state, city and other taxes as may be required pursuant to any law
or governmental regulation or ruling and all other normal employee deductions
made with respect to Company's employees generally.
5.8 Headings. The paragraph headings have been inserted for purposes
of convenience and shall not be used for interpretive purposes.
5.9 Gender and Plurals. Wherever the context so requires, the
masculine gender includes the feminine or neuter, and the singular number
includes the plural and conversely.
5.10 Successors. This Agreement shall be binding upon and inure to the
benefit of Company and any successor of Company, by merger or otherwise.
Except as provided in the preceding sentence, this Agreement, and the rights
and obligations of the parties hereunder, are personal and neither this
Agreement, nor any right, benefit or obligation of either party hereto, shall
be subject to voluntary or involuntary assignment, alienation or transfer,
whether by operation of law or otherwise, without the prior written consent
of the other party.
5.11 Term. This Agreement has a term co-extensive with the term of
employment as set forth in paragraph 2.1. Termination shall not affect any
right or obligation of any party which is accrued or vested prior to or upon
such termination.
5.12 Entire Agreement. Except as provided in (i) the benefits, plans,
and programs referenced in paragraph 3.7(iv), (ii) any signed written
agreement heretofore or contemporaneously executed by Company and Executive
with respect to Awards (as defined in the Incentive Plan) under the Incentive
Plan, or (iii) any signed written agreement hereafter executed by Company and
Executive, this Agreement constitutes the entire agreement of the parties
with regard to the subject matter hereof, and contains all the covenants,
promises, representations, warranties and agreements between the parties with
respect to employment of Executive by Company. Without limiting the scope of
the preceding sentence, all prior understandings and agreements among the
parties hereto relating to the subject matter hereof (including, without
limitation, that certain Second Amended and Restated Employment Compensation
Agreement by and between Company and Executive dated as of January 10, 1995)
are hereby null and void and of no further force and effect. Any
modification of this Agreement shall be effective only if it is in writing
and signed by the party to be charged.
5.13 Deemed Resignations. Any termination of Executive's employment
shall constitute an automatic resignation of Executive as an officer of
Company and each affiliate of Company, and an automatic resignation of
Executive from the Board of Directors and from the board of directors of any
affiliate of Company.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the 5th day of June, 1995, to be effective as of the Effective Date.
CONTINENTAL AIRLINES, INC.
By:
Name: Jeffery A. Smisek
Title: Senior Vice President
"EXECUTIVE"
GORDON M. BETHUNE