EXHIBIT 10.7
STAY BONUS AGREEMENT FOR GROUP 1 EXECUTIVES
THIS STAY BONUS AGREEMENT FOR GROUP 1 EXECUTIVES (this
"Agreement") is entered into between Continental Airlines, Inc., a
Delaware corporation (the "Company") and Xxxxxxx X. Xxxxxx
("Executive").
Recitals:
WHEREAS, Air Partners, L.P., its partners and certain
affiliates haves entered into an Investment Agreement dated as of
January 25, 1998 with Northwest Airlines Corporation and its
affiliate (the "Investment Agreement"), which investment agreement
provides for the acquisition by an affiliate of Northwest Airlines
Corporation of beneficial ownership of the Class A common stock and
warrants held by Air Partners, L.P., subject to certain conditions;
and
WHEREAS, the acquisition by an affiliate of Northwest Airlines
Corporation of beneficial ownership of the Class A common stock and
warrants held by Air Partners, L.P. contemplated by the Investment
Agreement (the "Acquisition") will, upon the closing thereof,
constitute a Change in Control for purposes of the Company's 1994
Incentive Equity Plan, as amended, and the Company's 1997 Stock
Incentive Plan, as amended, the Company's Executive Bonus Program
and Executive's employment agreement with the Company; and
WHEREAS, the Human Resources Committee and the Board of
Directors of the Company have deemed it advisable and in the best
interests of the Company and its stockholders to assure management
continuity for the Company and, consistent therewith, have
authorized the execution, delivery and performance by the Company
of this Agreement;
NOW THEREFORE, in consideration of the premises, the mutual
agreements herein contained and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
1. Change in Control. The parties agree that the Acquisition
will, upon the closing thereof, constitute a Change in Control for
purposes of the Company's 1994 Incentive Equity Plan, as amended,
the Company's 1997 Stock Incentive Plan, as amended, the Company's
Executive Bonus Program and Executive's employment agreement with
the Company or any subsidiary.
2. Payment of Stay Bonus. During the 15 month period commencing
with the first month following the date of closing of the
Acquisition, the Company shall pay to Executive as a stay bonus an
amount in cash of $150,000 per month, which payment shall be paid
on the last day of each month during such period; provided that
either (A) Executive remains in the employ of the Company or its
subsidiaries during the month in which such payment is made or (B)
if Executive's employment with the Company and its subsidiaries is
terminated by the Company at any time during such 15 month period,
the reason for any such termination is not for cause (i.e.,
pursuant to paragraph 2.2 (iii) or 2.2 (iv) of Executive's
employment agreement with the Company, as amended through the date
hereof or as such employment agreement may hereafter be amended).
If Executive's employment is terminated by the Company for cause
(as described in the foregoing sentence) during any month in such
15 month period, Company shall pay Executive the stay bonus with
respect to such month, pro-rated for the number of days he remained
employed by the Company or its subsidiaries during such month, and
shall have no obligation to pay any further stay bonus to Executive
thereafter. In addition, Company agrees to make, in the name of
Executive, one or more charitable contributions, on a monthly basis
on the last day of each month during such 15 month period, in an
aggregate monthly amount of $16,666.67, to such charities (and in
such amounts, not to exceed such aggregate monthly amount) as are
designated by Executive to Company from time to time in writing;
provided that either (A) Executive remains in the employ of the
Company or its subsidiaries during the month in which such
charitable contributions are made or (B) if Executive's employment
with the Company and its subsidiaries is terminated by the Company
during such 15 month period, the reason for any such termination is
not for cause (as described above). The Company may withhold from
all such payments 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.
3. Miscellaneous. Company represents to Executive that the
execution, delivery and performance of this Agreement by Company
have been duly authorized by all necessary corporate action, that
this Agreement has been duly executed and delivered by Company, and
that this Agreement is a legal, valid and binding obligation of
Company, enforceable against the Company in accordance with its
terms, except to the extent that such enforceability may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting the rights of creditors generally.
This Agreement shall be governed by the laws of the State of Texas.
This Agreement shall be binding upon and inure to the benefit of
the Company and any successor to the 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. Except for the agreement set forth in Section 1
above, this Agreement shall not affect the rights and obligations
of the parties under Executive's employment agreement with the
Company or any subsidiary. Nothing contained herein shall confer
upon Executive any right with respect to continuation of employment
with the Company or any subsidiary thereof, or interfere in any way
with the right of the Company or any subsidiary to terminate
Executive's employment at any time. This Agreement may be executed
in counterparts, each of which shall be deemed an original, but all
of which together constitute one and the same Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the 14th day of April, 1998.
CONTINENTAL AIRLINES, INC.
By:____________________________
Name: Xxxxxx X. Xxxxxxx
Title: Chief Executive Officer
EXECUTIVE
________________________________
Xxxxxxx X. Xxxxxx
