Sample Business Contracts


Severance Agreement - US Airways Inc. and Alan W. Crellin


                               SEVERANCE AGREEMENT

                Agreement dated as of June 26, 2002, between US Airways, Inc., a
Delaware corporation, having a place of business at Crystal Park Four, 2345
Crystal Drive, Arlington, Virginia 22227 (the "Company") and Alan W. Crellin,
residing at 21926 Castlehill Court, Ashburn, VA 20147 (the "Executive").

                               W I T N E S S E T H

                WHEREAS, the Executive has assumed duties of a responsible
nature to the benefit of the Company and to the satisfaction of its Board of
Directors (the "Board");

                WHEREAS, the Board believes it to be in the best interests of
the Company to enter into this Agreement to assure Executive's continuing
services to the Company including, but not limited to, under circumstances in
which there is a possible, threatened or actual severance of employment or
Change of Control (as defined below) of the Company; and

                WHEREAS, the Board believes it is imperative to diminish the
inevitable distraction of the Executive by virtue of the personal uncertainties
and risks created by a pending or threatened severance of employment or Change
of Control and to encourage the Executive's full attention and dedication to the
Company currently and in the event of any threatened or pending Change of
Control, and to provide the Executive with compensation and benefits
arrangements upon a severance of employment which ensure that the compensation
and benefits expectations of the Executive will be satisfied and which are
competitive with those of other corporations. Therefore, in order to accomplish
all the above objectives, the Board has caused the Company to enter into this
Agreement.

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                WHEREAS, the Company and the Executive have entered into an
Employment Agreement dated as of October 25, 2001 (the "Prior Agreement"); and

                WHEREAS, the Company and the Executive desire to supersede the
Prior Agreement;

                NOW, THEREFORE, in consideration of the mutual promises herein
contained, the Company and the Executive hereby agree as follows:

1.      CERTAIN DEFINITIONS.

                (a)     The "Effective Date" shall mean the date hereof.

                (b)     The "Change of Control Date" shall mean the first date
during the Employment Period (as defined in Section 1(d)) on which a Change of
Control (as defined in Section 2) occurs. Anything in this Agreement to the
contrary notwithstanding, if a Change of Control occurs and if the Executive's
employment with the Company is terminated or the Executive ceases to be an
officer of the Company prior to the date on which the Change of Control occurs,
and if it is reasonably demonstrated by the Executive that such termination of
employment or cessation of status as an officer (i) was at the request of a
third party who has taken steps reasonably calculated to effect the Change of
Control or (ii) otherwise arose in connection with or anticipation of the Change
of Control, then for all purposes of this Agreement the "Change of Control Date"
shall mean the date immediately prior to the date of such termination of
employment or cessation of status as an officer.

                (c)     The "Change of Control Period" shall mean the period
commencing on the Change of Control Date and ending on the earlier to occur of
(a) the third anniversary of such date, or (b) the Executive's Normal Retirement
Date.

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                (d)     The "Employment Period" shall mean the period commencing
on the Effective Date and ending on the earlier to occur of (i) the third
anniversary of such date or (ii) the first day of the month next following the
Executive's 65th birthday ("Normal Retirement Date"); provided, however, that
commencing on the date one year after the Effective Date, and on each annual
anniversary of such date (such date and each annual anniversary thereof shall be
hereinafter referred to as the "Renewal Date"), the Employment Period shall be
automatically extended so as to terminate on the earlier of (x) three years from
such Renewal Date or (y) the Executive's Normal Retirement Date, unless at least
30 days prior to the Renewal Date the Company shall give notice to the Executive
that the Employment Period shall not be so extended; and provided, further, that
upon the occurrence of a Change of Control Date, the Employment Period shall
automatically be extended so as to terminate on the earlier to occur of (1) the
third anniversary of such date or (2) the Executive's Normal Retirement Date.

                (e)     "Key Employee" shall mean an executive vice president
level employee of the Company.

2.      CHANGE OF CONTROL.

                For the purpose of this Agreement, a "Change of Control" or
"Change in Control" shall mean:

                (a)     The acquisition by an individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act")) of beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the Exchange Act) of 30% or more of
either (i) the then outstanding shares of common stock of the Company's parent,
US Airways Group, Inc. ("Group") (the

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"Outstanding Group Common Stock") or (ii) the combined voting power of the then
outstanding voting securities of Group entitled to vote generally in the
election of directors (the "Outstanding Group Voting Securities"); provided,
however, that the following acquisitions shall not constitute a Change of
Control: (v) any acquisition directly from Group, (w) any acquisition by Group
or any of its subsidiaries, (x) any acquisition by any employee benefit plan (or
related trust) sponsored or maintained by Group or any of its subsidiaries, (y)
any acquisition by any corporation with respect to which, following such
acquisition, more than 85% of, respectively, the then outstanding shares of
common stock of such corporation and the combined voting power of the then
outstanding voting securities of such corporation entitled to vote generally in
the election of directors, is then beneficially owned, directly or indirectly,
by all or substantially all of the individuals and entities who were beneficial
owners, respectively of the Outstanding Group Common Stock and Outstanding Group
Voting Securities in substantially the same proportions as their ownership,
immediately prior to such acquisition, of the Outstanding Group Common Stock and
Outstanding Group Voting Securities, as the case may be or (z) any acquisition
by an individual, entity or group that, pursuant to Rule 13d-1 promulgated under
the Exchange Act, is permitted to, and actually does, report its beneficial
ownership of Outstanding Group Common Stock and Outstanding Group Voting
Securities on Schedule 13G (or any successor Schedule); provided further, that
if any such individual, entity or group subsequently becomes required to or does
report its ownership of Outstanding Group Common Stock and Outstanding Group
Voting Securities on Schedule 13D (or any successor Schedule) then, for purposes
of this Section 2(a), such individual, entity or group shall be deemed to have
first acquired, on the first date on which such individual, entity or

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group becomes required to or does so file, beneficial ownership of all of the
Outstanding Group Common Stock and Outstanding Group Voting Securities
beneficially owned by it on such date; or

                (b)     Individuals who, as of the date hereof, constitute
Group's Board of Directors (the "Incumbent Board") cease for any reason to
constitute at least a majority of the Group Board of Directors; provided,
however, that any individual becoming a director subsequent to the date hereof
whose election, or nomination for election by Group's shareholders, was approved
by a vote of at least a majority of the directors then comprising the Incumbent
Board shall be considered as though such individual were a member of the
Incumbent Board, but excluding, for this purpose, any such individual whose
initial assumption of office occurs as a result of either an actual or
threatened election contest (as such terms are used in Rule 14a-11 of Regulation
14A promulgated under the Exchange Act) or other actual or threatened
solicitation of proxies or consents; or

                (c)     There is consummated a reorganization, merger or
consolidation, in each case, with respect to which all or substantially all of
the individuals and entities who were the beneficial owners, respectively, of
the Outstanding Group Common Stock and Outstanding Group Voting Securities
immediately prior to such reorganization, merger or consolidation, beneficially
own, directly or indirectly, less than 85% of, respectively, the then
outstanding shares of common stock and the combined voting power of the then
outstanding voting securities entitled to vote generally in the election of
directors, as the case may be, of the corporation resulting from such
reorganization, merger or consolidation (or any parent thereof) in substantially
the same proportions as their ownership, immediately prior to such
reorganization, merger or consolidation of the

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Outstanding Group Common Stock and the Outstanding Group Voting Securities, as
the case may be; or

                (d)     Approval by the shareholders of Group of a complete
liquidation or dissolution of Group or the consummation of the sale or other
disposition of all or substantially all of the assets of Group, other than to a
corporation with respect to which, following such sale or other disposition,
more than 85% of, respectively, the then outstanding shares of common stock of
such corporation and the combined voting power of the then outstanding voting
securities of such corporation entitled to vote generally in the election of
directors is then beneficially owned, directly or indirectly, by all or
substantially all of the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Group Common Stock and Outstanding
Group Voting Securities immediately prior to such sale or other disposition in
substantially the same proportion as their ownership, immediately prior to such
sale or other disposition, of the Outstanding Group Common Stock and Outstanding
Group Voting Securities, as the case may be.

3.      EMPLOYMENT PERIOD.

        The Company hereby agrees to continue the Executive in its employ, and
the Executive hereby agrees to remain in the employ of the Company, during the
Employment Period under the terms and conditions provided herein.

4.      TERMS OF EMPLOYMENT.

                (a)     Position and Duties.

                                (i)     During the Employment Period and prior
        to a Change of Control Date, (A) if the Board determines that the
        Executive has been performing his duties in accordance with Section
        4(a)(iii) hereof, it shall re-elect

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        the Executive to the position of Executive Vice President with
        substantially similar duties to the position held by the Executive on
        the Effective Date, and (B) the Executive's services shall be performed
        at the Executive's location on the Effective Date, the Company's
        headquarters, or a location where a substantial activity for which the
        Executive has responsibility is located.

                                (ii)    During the Employment Period and on and
        following a Change of Control Date, (A) the Executive's position
        (including status, offices, titles and reporting relationships),
        authority, duties and responsibilities shall be at least commensurate in
        all material respects with the most significant of those held, exercised
        and assigned at any time during the 90-day period immediately preceding
        the Change of Control Date and (B) the Executive's services shall be
        performed at the location where the Executive was employed immediately
        preceding the Change of Control Date or any office or location where a
        substantial activity for which the Executive has responsibility is
        located.

                                (iii)   During the Employment Period, and
        excluding any periods of vacation and sick leave to which the Executive
        is entitled, the Executive agrees to devote reasonable attention and
        time during normal business hours to the business and affairs of the
        Company and, to the extent necessary to discharge the responsibilities
        assigned to the Executive hereunder, to use the Executive's reasonable
        best efforts to perform faithfully and efficiently such
        responsibilities. During the Employment Period it shall not be a
        violation of this Agreement for the Executive to (A) serve on corporate,
        civic or charitable boards or committees, (B) deliver lectures, fulfill
        speaking engagements or teach at educational institutions and (C) manage
        personal investments, so long as such activities do not significantly
        interfere with the performance of the Executive's responsibilities as an
        employee of the Company in accordance with this Agreement. It is also
        expressly understood and agreed that to the extent that such activities
        have been conducted by the Executive prior to the Effective Date, the
        continued conduct of such activities (or the conduct of activities
        similar in nature and scope thereto) subsequent to the Effective Date
        shall not thereafter be deemed to interfere with the performance of the
        Executive's responsibilities to the Company.

                (b)     Compensation.

                (i)     Base Salary. During the Change of Control Period, the
        Company shall pay the Executive a base salary (x) for the first 12
        months of such period at a rate not less than his base salary in effect
        on the Change of Control Date and (y) during each succeeding 12 months
        at a rate not less than his base salary in effect on the last day of the
        preceding 12-month period. During the Change of Control Period, base
        salary shall be reviewed at least annually and shall be increased at any
        time and from time to time as shall be substantially consistent with
        increases in base salary awarded in the ordinary course of business to
        other Key Employees of the Company and its subsidiaries. Any increase in
        base salary shall

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        not serve to limit or reduce any other obligation to the Executive under
        this Agreement. Base salary shall not be reduced after any such
        increase. Base salary under Section 4(b)(i) shall hereinafter be
        referred to as the "Base Salary".

                (ii)    Annual Bonus. In addition to Base Salary, the Executive
        shall be awarded, for each fiscal year during the Change of Control
        Period, an annual bonus as shall be determined by the Board or its Human
        Resources Committee in accordance with the Incentive Compensation Plan
        as approved by the Group Board of Directors or other annual bonus plan
        hereafter approved by the Board ("Incentive Plan"). The annual bonus
        under Section 4(b)(ii) shall hereinafter be referred to as the "Annual
        Bonus".

                (iii)   Incentive, Savings and Retirement Plans. In addition to
        Base Salary and Annual Bonus payable as hereinabove provided, the
        Executive shall be entitled to participate during the Change of Control
        Period in all incentive (including but not limited to the Long Term
        Incentive Plan and all stock incentive plans), savings and retirement
        plans, practices, policies and programs applicable to other Key
        Employees, in each case providing benefits which are at least as
        favorable as the most favorable of such plans, practices, policies and
        programs in effect at any time during the 90-day period immediately
        preceding the Change of Control Date or, if more favorable to the
        Executive and/or the Executive's family, as in effect at any time
        thereafter with respect to other Key Employees.

                (iv)    Welfare Benefit Plans. During the Change of Control
        Period, the Executive and/or the Executive's family, as the case may be,
        shall be eligible for participation in and shall receive all benefits
        under welfare benefit plans, practices, policies and programs applicable
        to other Key Employees (including, without limitation, medical,
        prescription, dental, disability, salary continuance, employee life,
        group life, accidental death and travel accident insurance plans and
        programs), in each case providing benefits which are at least as
        favorable as the most favorable of such plans, practices, policies and
        programs in effect at any time during the 90-day period immediately
        preceding the Change of Control Date or, if more favorable to the
        Executive and/or the Executive's family, as in effect at any time
        thereafter with respect to other Key Employees.

                (v)     Expenses. During the Change of Control Period, the
        Executive shall be entitled to receive prompt reimbursement for all
        reasonable expenses incurred by the Executive in accordance with the
        most favorable policies, practices and procedures of the Company and its
        subsidiaries applicable at any time on or after the Effective Date to
        other Key Employees of the Company and its subsidiaries.

                (vi)    Fringe Benefits. During the Change of Control Period,
        the Executive shall be entitled to fringe benefits, including but not
        limited to space positive and space available travel privileges in all
        classes of service and cabins on

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        all air carriers owned by the Company and any of its affiliates
        (including all carriers owned by any individual, entity or group that
        has entered into an agreement the consummation of which constitutes a
        Change of Control, or which otherwise caused a Change of Control)
        ("Travel Privileges"), in each case providing benefits which are at
        least as favorable as the most favorable of such plans, practices,
        policies and programs in effect at any time during the 90-day period
        immediately preceding the Change of Control Date or, if more favorable
        to the Executive and/or the Executive's family, as in effect at any time
        thereafter with respect to other Key Employees.

                (vii)   Vacation. During the Change of Control Period, the
        Executive shall be entitled to paid vacation in accordance with the most
        favorable plans, policies, programs and practices of the Company and its
        subsidiaries as in effect at any time during the 90-day period
        immediately preceding the Change of Control Date or, if more favorable
        to the Executive and/or the Executive's family, as in effect at any time
        thereafter with respect to other Key Employees.

5.      TERMINATION.

                (a)     Mutual Agreement. During the Employment Period, the
Executive's employment hereunder may be terminated at any time by mutual
agreement on terms to be negotiated at the time of such termination.

                (b)     Death or Disability. This Agreement shall terminate
automatically upon the Executive's death. If the Company determines in good
faith that the Disability of the Executive has occurred (pursuant to the
definition of "Disability" set forth below), it may give to the Executive
written notice of its intention to terminate the Executive's employment. In such
event, the Executive's employment with the Company shall terminate effective on
the 90th day after receipt by the Executive of such notice given at any time
after a period of six consecutive months of Disability and while such Disability
is continuing (the "Disability Effective Date"), provided that, within the 90
days after such receipt, the Executive shall not have returned to full-time
performance of the Executive's duties. For purposes of this Agreement,
"Disability" means disability which, at least six

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months after its commencement, is determined to be total and permanent by a
physician selected by the Company or its insurers and acceptable to the
Executive or the Executive's legal representative (such agreement as to
acceptability not to be withheld unreasonably). During such six month period and
until the Disability Effective Date, Executive shall be entitled to all
compensation provided for under Section 4 hereof, to the extent applicable.

        (c)     Cause. During the Employment Period, the Company may terminate
the Executive's employment for "Cause." For purposes of this Agreement, "Cause"
means (1) a reasonable good faith determination by the Company that the
Executive engaged in an act or acts of personal dishonesty intended to result in
substantial personal enrichment of the Executive at the expense of the Company,
(2) repeated violations by the Executive of the Executive's obligations under
Section 4(a) of this Agreement which are demonstrably willful and deliberate on
the Executive's part and which are not remedied in a reasonable period of time
after receipt of written notice from the Company or (3) the conviction of the
Executive of a felony.

        (d)     Good Reason. During the Employment Period, the Executive's
employment hereunder may be terminated by the Executive for Good Reason. For
purposes of this Agreement, "Good Reason" means:

                (i)     with respect to the termination of the Executive's
                employment other than during the Change of Control Period:

                        (1)     any reduction by the Company of the Executive's
                                rate of base salary, as in effect on the
                                Effective Date or as the same may be increased
                                from time to time;

                        (2)     any material and substantial diminution in the
                                Executive's position, authority, duties or
                                responsibilities as contemplated by Section
                                4(a)(i) of this Agreement, or any other action
                                by

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                                the Company which results in a material and
                                substantial diminution in such position,
                                authority, duties or responsibilities, excluding
                                for this purpose an isolated, insubstantial and
                                inadvertent action not taken in bad faith and
                                which is remedied by the Company promptly after
                                receipt of notice thereof given by the
                                Executive;

                        (3)     any demotion of the Executive to a position
                                lower than Executive Vice President; or

                        (4)     any failure by the Company to comply with and
                                satisfy Section 11(c) of this Agreement, and

                (ii)    with respect to the termination of the Executive's
                employment during the Change of Control Period:

                        (1)     the assignment to the Executive of any duties
                                inconsistent in any respect with Executive's
                                position (including status, offices, titles and
                                reporting relationships), authority, duties or
                                responsibilities as contemplated by Section
                                4(a)(ii) or (iii) of this Agreement, or any
                                other action by the Company which results in a
                                diminution in such position, authority, duties
                                or responsibilities, excluding for this purpose
                                an isolated, insubstantial and inadvertent
                                action not taken in bad faith and which is
                                remedied by the Company promptly after receipt
                                of notice thereof given by the Executive;

                        (2)     (x) any failure by the Company to comply with
                                any of the provisions of Section 4(b) of this
                                Agreement, other than an isolated, insubstantial
                                and inadvertent failure not occurring in bad
                                faith and which is remedied by the Company
                                promptly after receipt of notice thereof given
                                by the Executive or (y) any failure of the
                                Company to pay Base Salary or Annual Bonus in
                                accordance with Sections 4(b)(i) and (ii),
                                respectively, and any failure by the Company to
                                maintain or provide the plans, programs,
                                policies and practices, and benefits described
                                in Sections 4(b)(iii) - (vii) on the most
                                favorable basis such plans, programs, policies
                                and practices were maintained and benefits
                                provided during the 90-day period immediately
                                preceding the Change of Control Date, or if more
                                favorable to the Executive and/or the
                                Executive's family, as in effect at any time
                                thereafter with respect to other Key Employees;

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                        (3)     the Company's requiring the Executive to be
                                based at any office or location other than that
                                described in Section 4(a)(ii)(B) hereof, except
                                for travel reasonably required in the
                                performance of the Executive's responsibilities;

                        (4)     any purported termination by the Company of the
                                Executive's employment otherwise than as
                                expressly permitted by this Agreement; or

                        (5)     any failure by the Company to comply with and
                                satisfy Section 11(c) of this Agreement.

For purposes of this Section 5(d)(ii), any good faith determination of "Good
Reason" made by the Executive on or after the Change of Control Date shall be
conclusive.

        (e)     Notice of Termination. Any termination during the Change of
Control Period by the Company for Cause or by the Executive for Good Reason
shall be communicated by Notice of Termination to the other party hereto given
in accordance with Section 12(b) of this Agreement. For purposes of this
Agreement, a "Notice of Termination" means a written notice which (i) indicates
the specific termination provision in this Agreement relied upon, (ii) sets
forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination of the Executive's employment under the provision so
indicated and (iii) if the Date of Termination (as defined below) is other than
the date of receipt of such notice, specifies the termination date (which date
shall be not more than fifteen (15) days after the giving of such notice). The
failure by the Executive to set forth in the Notice of Termination any fact or
circumstance which contributes to a showing of Good Reason shall not waive any
right of the Executive hereunder or preclude the Executive from asserting such
fact or circumstance in enforcing his rights hereunder. Any termination other
than during the Change of Control Period by the Company for Cause or by the
Executive for Good Reason shall be communicated by

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written notice (which written notice shall not constitute a Notice of
Termination hereunder) to the other party hereto given in accordance with
Section 12(b) of this Agreement.

        (f)     Date of Termination. "Date of Termination" means the date of
receipt of the Notice of Termination or any later date specified therein, as the
case may be; provided, however, that (i) if the Executive's employment is
terminated by the Company other than for Cause or Disability, the Date of
Termination shall be the date on which the Company notifies the Executive of
such termination and (ii) if the Executive's employment is terminated by reason
of death or Disability, the Date of Termination shall be the date of death of
the Executive or the Disability Effective Date, as the case may be.

        (g)     Dispute Concerning Termination. If within fifteen (15) days
after any Notice of Termination is given, or, if later, prior to the Date of
Termination (as determined without regard to this Section 5(g)), the party
receiving such Notice of Termination notifies the other party that a dispute
exists concerning the termination, the Date of Termination shall be extended
until the earlier of (i) the date on which the Change of Control Period ends or
(ii) the date on which the dispute is finally resolved, either by mutual written
agreement of the parties or by a final judgment, order or decree of an
arbitrator or a court of competent jurisdiction (which is not appealable or with
respect to which the time for appeal therefrom has expired and no appeal has
been perfected); provided, however, that the Date of Termination shall be
extended by a notice of dispute given by the Executive only if such notice is
given in good faith and the Executive pursues the resolution of such dispute
with reasonable diligence; and provided further, this Section 5(g) shall be
applicable only for terminations of employment occurring during the Change of
Control Period.

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        (h)     Compensation During Dispute. If a purported termination occurs
during the Change of Control Period and the Date of Termination is extended in
accordance with Section 5(g) hereof, the Company shall continue to pay the
Executive the full compensation in effect when the notice giving rise to the
dispute was given (including, but not limited to, Base Salary) and continue the
Executive as a participant in all compensation, benefit and insurance plans in
which the Executive was participating when the notice giving rise to the dispute
was given, until the Date of Termination, as determined in accordance with
Section 5(g) hereof. Amounts paid under this Section 5(h) are in addition to all
other amounts due under this Agreement and shall not be offset against or reduce
any other amounts due under this Agreement.

6.      OBLIGATIONS OF THE COMPANY UPON TERMINATION.

        (a)     Death.

                (i) If the Executive's employment is terminated during the
                    Change of Control Period by reason of the Executive's death,
                    this Agreement shall terminate without further obligations
                    to the Executive's legal representatives under this
                    Agreement, other than those obligations accrued or earned
                    and vested (if applicable) by the Executive as of the Date
                    of Termination, including, for this purpose (1) the
                    Executive's full Base Salary through the Date of Termination
                    at the rate in effect on the Date of Termination,
                    disregarding any reduction in Base Salary in violation of
                    this Agreement (the "Highest Base Salary"), (2) the product
                    of the Annual Bonus paid to the Executive for the last full
                    fiscal year and a fraction, the numerator of which is

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                        the number of days in the current fiscal year through
                        the Date of Termination, and the denominator of which is
                        365 and (3) any compensation previously deferred by the
                        Executive (together with any accrued interest thereon)
                        and not yet paid by the Company and any accrued vacation
                        pay not yet paid by the Company (such amounts specified
                        in clauses (1) through (3)) are hereinafter referred to
                        as "Accrued Obligations" and such amounts specified in
                        clauses (1) and (3) are hereinafter referred to as
                        "Termination Obligations"). Anything in this Agreement
                        to the contrary notwithstanding, the Executive's family
                        shall be entitled to receive benefits in accordance with
                        the most favorable plans, programs, practices and
                        policies of the Company and its subsidiaries in effect
                        during the 90-day period immediately preceding the
                        Change of Control Date, or if more favorable to the
                        Executive and/or the Executive's family, as in effect at
                        any time thereafter with respect to other Key Employees.

                (ii)    If the Executive's employment is terminated by reason of
                        the Executive's death other than during the Change of
                        Control Period, this Agreement shall terminate without
                        further obligations to the Executive's legal
                        representatives under this Agreement other than the
                        Termination Obligations.

                (iii)   All such Accrued Obligations and Termination Obligations
                        shall be paid to the Executive's estate or beneficiary,
                        as applicable, in a lump

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                        sum in cash within 30 days of the Date of Termination or
                        the date of termination (as applicable).

                (b)     Disability.

                (i)     If the Executive's employment is terminated during the
                        Change of Control Period by reason of the Executive's
                        Disability, this Agreement shall terminate without
                        further obligations to the Executive, other than those
                        obligations accrued or earned and vested (if applicable)
                        by the Executive as of the Date of Termination,
                        including for this purpose, all Accrued Obligations.
                        Anything in this Agreement to the contrary
                        notwithstanding, the Executive shall be entitled after
                        the Disability Effective Date to receive disability and
                        other benefits in accordance with the most favorable
                        plans, programs, practices and policies of the Company
                        and its subsidiaries in effect during the 90-day period
                        immediately preceding the Change of Control Date, or if
                        more favorable to the Executive and/or the Executive's
                        family, as in effect at any time thereafter with respect
                        to other Key Employees.

                (ii)    If the Executive's employment is terminated by reason of
                        the Executive's Disability other than during the Change
                        of Control Period, this Agreement shall terminate
                        without further obligations to the Executive under this
                        Agreement other than the Termination Obligations.

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                (iii)   All such Accrued Obligations and Termination Obligations
                        shall be paid to the Executive in a lump sum in cash
                        within 30 days of the Date of Termination or the date of
                        termination (as applicable).

                (c)     Cause; Other than for Good Reason. If during the
Employment Period the Executive's employment is terminated for Cause or the
Executive terminates his employment other than for Good Reason, this Agreement
shall terminate without further obligations to the Executive under this
Agreement other than those obligations accrued or earned and vested (if
applicable) by the Executive through the Date of Termination or the date of
termination (as applicable), including for this purpose, the Termination
Obligations. All such Termination Obligations shall be paid to the Executive in
a lump sum in cash within 30 days of the Date of Termination.

                (d)     Good Reason; Other Than for Cause or Disability.

                        (1) If, during the Employment Period and prior to a
        Change of Control, the Company shall terminate the Executive's
        employment other than for Cause, Disability or death or if the Executive
        shall terminate his employment for Good Reason, the Executive shall be
        entitled to:

                        A.           to the extent not theretofore paid, the
                                Executive's annual rate of base salary as in
                                effect immediately prior to the date of
                                termination; and

                        B.           a lump sum in cash within 30 days after the
                                date of termination equal to the product of two
                                (2) times the sum of (x) the Executive's annual
                                rate of base salary as in effect immediately
                                prior to the date of termination, and (y) the
                                Executive's "target bonus" under the Incentive
                                Plan for the year in which the date of
                                termination occurs; and

                        C.           in the case of compensation previously
                                deferred by the Executive, all amounts
                                previously deferred (together with

                                       17

<PAGE>

                                any accrued interest thereon) and not yet paid
                                by the Company, and any accrued vacation pay not
                                yet paid by the Company; and

                        D.           if such termination should occur prior to
                                October 25, 2003, continuation of health
                                insurance on the same basis such benefits were
                                provided to the Executive on the Effective Date,
                                or, if more favorable to the Executive and/or
                                the Executive's family, as in effect at any time
                                thereafter with respect to the Executive, with
                                such benefits to continue for the life of the
                                Executive; provided, however, that if the
                                Executive becomes eligible for health insurance
                                through a subsequent employer, the Company's
                                provision of such benefits shall be secondary to
                                the benefit coverage of the subsequent employer.

                        (2) If, during the Employment Period and on and after a
        Change of Control Date, the Company shall terminate the Executive's
        employment other than for Cause, Disability, or death or if the
        Executive shall terminate his employment for Good Reason:

                        (i)     the Company shall pay to the Executive in a lump
        sum in cash within 30 days after the Date of Termination the aggregate
        of the following amounts:

                        A.      to the extent not theretofore paid, the
                                Executive's Highest Base Salary through the Date
                                of Termination; and

                        B.      the product of (x) the Annual Bonus paid to the
                                Executive for the last full fiscal year ending
                                during the Change of Control Period or, if
                                higher, the Annual Bonus paid to the Executive
                                during the last full fiscal year ending during
                                the Change of Control Period or, if higher, a
                                constructive annual bonus calculated at the
                                "target bonus" level under the Incentive Plan in
                                effect immediately preceding the Change of
                                Control Date (the highest Annual Bonus
                                determined under this clause (x) shall
                                hereinafter be referred to as the "Recent
                                Bonus") and (y) a fraction, the numerator of
                                which is the number of days in the current
                                fiscal year through the Date of Termination and
                                the denominator of which is 365: and

                                       18

<PAGE>

                        C.      the product of (x) three and (y) the sum of (i)
                                the Highest Base Salary and (ii) the Recent
                                Bonus; and

                        D.      in the case of compensation previously deferred
                                by the Executive, all amounts previously
                                deferred (together with any accrued interest
                                thereon) and not yet paid by the Company, and
                                any accrued vacation pay not yet paid by the
                                Company; and

                        (ii)    The Company shall:

                        A.           for a period of three years following the
                                Date of Termination or such longer period as any
                                plan, program, practice or policy may provide,
                                the Company shall continue benefits to the
                                Executive and/or the Executive's family at least
                                equal to those which would have been provided to
                                them in accordance with the plans, programs,
                                practices and policies described in Sections
                                4(b)(iii)(with respect to any retirement plans),
                                (iv) and (vi) of this Agreement as if the
                                Executive's employment had not been terminated
                                and as if the Change of Control Period expired
                                on the 3rd anniversary of the Date of
                                Termination, and for purposes of eligibility for
                                retiree benefits pursuant to such plans,
                                practices, programs and policies, the Executive
                                shall be considered to have remained employed
                                until the 3rd anniversary of the Date of
                                Termination; and

                        B.           the Company shall provide continuation of
                                Travel Privileges for the life of the Executive
                                which are at least as favorable as the benefits
                                provided pursuant to the most favorable of such
                                plans, practices, policies and programs in
                                effect at any time during the 90-day period
                                immediately preceding the Change of Control Date
                                or, if more favorable to the Executive and/or
                                the Executive's family, as in effect at any time
                                thereafter with respect to other Key Employees.

        (e)     Notwithstanding any other provisions of this Agreement to the
contrary, (1) upon termination of the Executive's employment for any reason
following the 5th anniversary of the Executive's date of employment, the
Executive shall be entitled to the Travel Privileges described in 6(d)(2)(ii)(B)
above; and (2) upon termination of the

                                       19

<PAGE>

Executive's employment for any reason after October 25, 2003, the Executive
shall be entitled to continuation of health insurance on the same basis such
benefits were provided to the Executive on the Effective Date or, if more
favorable to the Executive and/or the Executive's family, as in effect at any
time thereafter with respect to the Executive, with such benefits to continue
for the life of the Executive; provided, however, that if the Executive becomes
eligible for health insurance through a subsequent employer, the Company's
provision of such benefits shall be secondary to the benefit coverage of the
subsequent employer.

7.      NON-EXCLUSIVITY OF RIGHTS.

        Nothing in this Agreement shall prevent or limit the Executive's
continuing or future participation in any benefit, bonus, incentive or other
plans, programs, policies or practices, provided by Group, the Company or any of
its subsidiaries and for which the Executive may qualify, nor shall anything
herein limit or otherwise affect such rights as the Executive may have under any
stock option, restricted stock or other agreements with Group, the Company or
any of its subsidiaries. Amounts which are vested benefits or which the
Executive is otherwise entitled to receive under any Plan, policy, practice or
program of Group, the Company or any of its subsidiaries at or subsequent to the
Date of Termination shall be payable in accordance with such plan, policy,
practice or program.

8.      FULL SETTLEMENT.

        The Company's obligation to make the payments provided for in this
Agreement and otherwise to perform its obligations hereunder shall not be
affected by any set-off, counterclaim, recoupment, defense or other claim, right
or action which the Company may have against the Executive or others. In no
event shall the Executive be

                                       20

<PAGE>

obligated to seek other employment or take any other action by way of mitigation
of the amounts payable to the Executive under any of the provisions of this
Agreement. The Company agrees to pay, to the full extent permitted by law (a)
all legal fees and expenses, as incurred by the Company, the Executive and
others, which the Executive may reasonably incur as a result of any contest
(regardless of the outcome thereof) by the Company or others of the validity or
enforceability of, or liability under, any provision of this Agreement (other
than Section 6(d)(1) and 6(e)) or any guarantee of performance thereof
(including as a result of any contest by the Executive about the amount of any
payment pursuant of Section 9 of this Agreement) and (b) all legal fees and
expenses, as incurred by the Company, the Executive and others, which the
Executive may reasonably incur as a result of any contest by the Company or
others of the validity or enforceability of, or liability under, Section 6(d)(1)
and 6(e) of this Agreement or any guarantee of performance thereof but only, in
the case of this clause (b), if the Executive prevails on at least one material
issue in such contest plus, in the case of clauses (a) and (b), interest at the
applicable Federal rate provided for in Section 7872(f)(2) (or any successor
provision thereto) of the Internal Revenue Code of 1986, as amended (the
"Code").

9.      CERTAIN ADDITIONAL PAYMENTS BY THE COMPANY.

                (a)     Anything in this Agreement to the contrary
notwithstanding, in the event it shall be determined that any payment or
distribution by the Company to or for the benefit of the Executive (whether paid
or payable or distributed or distributable pursuant to the terms of this
Agreement or otherwise, but determined without regard to any additional payments
required under this Section 9, including, but not limited to, any amounts in
respect of (i) options to acquire shares of Group common stock, and (ii)
restricted shares of

                                       21

<PAGE>

Group common stock (a "Payment"), would be subject to the excise tax imposed by
Section 4999 (or any successor provision thereto) of the Code or any interest or
penalties with respect to such excise tax (such excise tax, together with any
such interest and penalties, are hereinafter collectively referred to as the
"Excise Tax"), then the Executive shall be entitled to receive an additional
payment (a "Gross-Up Payment") in an amount such that after payment by the
Executive of all taxes (including any interest or penalties imposed with respect
to such taxes), including, without limitation, any income and employment taxes
(and any interest and penalties imposed with respect thereto) and Excise Tax,
imposed upon the Gross-Up Payment, the Executive retains an amount of the
Gross-Up Payment equal to the Excise Tax imposed upon Payments.

                (b)     Subject to the provisions of Section 9(c), all
determinations required to be made under this Section 9, including whether a
Gross-Up Payment is required and the amount of such Gross-Up Payment, shall be
made by a firm of independent public accountants selected by Group prior to the
Change of Control (the "Accounting Firm") which shall provide detailed
supporting calculations both to the Company and the Executive within fifteen
(15) business days of the receipt of notice from the Executive that there has
been a Payment, or such earlier time as is requested by the Company or the
Executive. In the event that the Accounting Firm is serving as accountant or
auditor for the individual, entity or group effecting the Change of Control, the
Executive may appoint another nationally recognized accounting firm to make the
determinations required hereunder (which accounting firm shall then be referred
to as the Accounting Firm hereunder). All fees and expenses of the Accounting
Firm shall be borne solely by the Company. Any Gross-Up Payment, as determined
pursuant to this Section 9, shall be paid

                                       22

<PAGE>

to the Executive within five (5) days of the receipt of the Accounting Firm's
determination. If the Accounting Firm determines that no Excise Tax is payable
by the Executive, it shall furnish the Executive with a written opinion that
failure to report the Excise Tax on the Executive's applicable federal income
tax return would not result in the imposition of a negligence or other penalty.
Any determination by the Accounting Firm shall be binding upon the Company and
the Executive. As a result of the uncertainty in the application of Section 4999
of the Code (or any successor provision thereto) at the time of the initial
determination by the Accounting Firm hereunder, it is possible that Gross-up
Payments which will not have been made by the Company should have been made
("Underpayment"), consistent with the calculations required to be made
hereunder. In the event that the Company exhausts its remedies pursuant to
Section 9(c) and the Executive thereafter is required to make a payment of any
Excise Tax, the Accounting Firm shall determine the amount of the Underpayment
(together with interest and penalties incurred by the Executive in connection
therewith) that has occurred and any such Underpayment shall be promptly paid by
the Company to or for the benefit of the Executive.

                (c)     The Executive shall notify the Company in writing of any
claim by the Internal Revenue Service that, if successful, would require the
payment by the Company of the Gross-Up Payment. Such notification shall be given
as soon as practicable but no later than ten (10) business days after the
Executive knows of such claim and shall apprise the Company of the nature of
such claim and the date on which such claim is requested to be paid. The
Executive shall not pay such claim prior to the expiration of the thirty-day
period following the date on which he gives such notice to the Company (or such
shorter period ending on the date that any payment of taxes with respect

                                       23

<PAGE>

to such claim is due). If the Company notifies the Executive in writing prior to
the expiration of such period that it desires to contest such claim, the
Executive shall:

                (i)     give the Company any information reasonably requested by
                the Company relating to such claim,

                (ii)    take such action in connection with contesting such
                claim as the Company shall reasonably request in writing from
                time to time, including, without limitation, accepting legal
                representation with respect to such claim by an attorney
                reasonably selected by the Company,

                (iii)   cooperate with the Company in good faith in order
                effectively to contest such claim,

                (iv)    permit the Company to participate in any proceedings
                relating to such claim; provided, however, that the Company
                shall bear and pay directly all costs and expenses (including
                additional interest and penalties) incurred in connection with
                such contest and shall indemnify and hold the 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 such representation and payment of costs
                and expenses. Without limitation on the foregoing provisions of
                this Section 9(c), the Company shall control all proceedings
                taken in connection with such contest and, at its sole option,
                may pursue or forgo any and all administrative appeals,
                proceedings, hearings and conferences with the taxing authority
                in respect of such claim and may, at its sole option, either
                direct the Executive to pay the tax claimed and sue for a refund
                or contest the claim in any permissible manner, and the
                Executive agrees to prosecute such contest to a determination
                before any administrative tribunal, in a court of initial
                jurisdiction and in one or more appellate courts, as the Company
                shall determine; provided, however, that if the Company directs
                the Executive to pay such claim and sue for a refund, the
                Company shall advance the amount of such payment to the
                Executive, on an interest-free basis and shall indemnify and
                hold the Executive harmless, on an after-tax basis, from any
                Excise Tax or income tax, including interest or penalties with
                respect thereto, imposed with respect to such advance or with
                respect to any imputed income with respect to such advance; and
                further provided that any extension of the statute of
                limitations relating to payment of taxes for the taxable year of
                the Executive with respect to which such contested amount is
                claimed to be due is limited solely to such contested amount.
                Furthermore, the Company's control of the contest shall be
                limited to issues with respect to which a Gross-Up Payment would
                be payable hereunder; whereas the Executive shall be entitled to
                settle or contest, as the case may be, any

                                       24

<PAGE>

                other issue raised by the Internal Revenue Service or any other
                taxing authority.

                (d)     If, after the receipt by the Executive of an amount
advanced by the Company pursuant to Section 9(c), the Executive becomes entitled
to receive any refund with respect to such claim, the Executive shall (subject
to the Company's complying with the requirements of Section 9(c)) promptly pay
to the Company the amount of such refund (together with any interest paid or
credited thereon after taxes applicable thereto). If, after the receipt by the
Executive of an amount advanced by the Company pursuant to Section 9(c), a
determination is made that the Executive shall not be entitled to any refund
with respect to such claim and the Company does not notify the Executive in
writing of its intent to contest such denial of refund prior to the expiration
of thirty (30) days after such determination, then such advance shall be
forgiven and shall not be required to be repaid and the amount of such advance
shall offset, to the extent thereof, the amount of Gross-Up Payment required to
be paid.

10.     CONFIDENTIAL INFORMATION.

                The Executive shall hold in a fiduciary capacity for the benefit
of the Company all confidential and proprietary information, relating to Group,
the Company or any of their subsidiaries, and their respective businesses, which
shall have been obtained by the Executive's employment by the Company or any of
its subsidiaries and which shall not be or become public knowledge (other than
by acts by Executive or his representatives in violation of this Agreement).
After termination of the Executive's employment with the Company, the Executive
shall not, without the prior written consent of the Company, communicate or
divulge any such information to anyone other than the Company and those

                                       25

<PAGE>

designated by it. Notwithstanding the foregoing, the Executive or his
representatives may disclose any such information if such information is
compelled by legal process, provided that if Executive is so compelled, he shall
provide the Company with prompt notice so that it may seek a protective order or
other remedy. In any event, Executive shall furnish only that portion of the
confidential information that is legally required to be disclosed. In the event
the Executive breaches any provision of this Section 10, any payments or other
benefits promised under this Agreement shall be forfeited. Such a forfeiture
shall not limit the Company from seeking any other contractual or equitable
remedies available to it which are appropriate under the circumstances. The
Executive expressly consents to the award of injunctive relief in the event a
violation of this Section 10 is alleged by the Company.

11.     SUCCESSORS.

        (a)     This Agreement is personal to the Executive and without the
prior written consent of the Company shall not be assignable by the Executive
otherwise than by will or the laws of descent and distribution. This Agreement
shall inure to the benefit of and be enforceable by the Executive's legal
representatives.

        (b)     This Agreement shall inure to the benefit of and be binding upon
the Company and its successors and assigns.

        (c)     The Company shall require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to assume
expressly and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place. As used in this Agreement, "Company" shall mean

                                       26

<PAGE>

the Company as hereinbefore defined and any successor to its business and/or
assets as aforesaid which assumes and agrees to perform this Agreement by
operation of law, or otherwise.

12.     MISCELLANEOUS.

        (a)     This Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware, without reference to principles of
conflict of laws. The captions of this Agreement are not part of the provisions
hereof and shall have no force or effect. This Agreement may not be amended or
modified otherwise than by a written agreement executed by the parties hereto or
their respective successors and legal representatives.

        (b)     All notices and other communications hereunder shall be in
writing and shall be given by hand delivery to the other party or by registered
or certified mail, return receipt requested, postage prepaid, addressed as
follows:

        If to the Executive             If to the Company:
        -------------------             -----------------

        Alan W. Crellin                 US Airways, Inc.
        21926 Castlehill Court          2345 Crystal Drive
        Ashburn, VA 20147               Arlington, Virginia  22227
                                        Attention: General Counsel

or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.

        (c)     The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement.

                                       27

<PAGE>

        (d)     The Company may withhold from any amounts payable under this
Agreement such Federal, state or local taxes as shall be required to be withheld
pursuant to any applicable law or regulation.

        (e)     The Executive's failure to insist upon strict compliance with
any provision hereof shall not be deemed to be a waiver of such provision or any
other provision hereof.

        (f)     Words or terms used in this Agreement which connote the
masculine gender are deemed to apply equally to female executives.

        (g)     This Agreement supersedes any prior employment agreement between
the Company and the Executive, including but not limited to the Prior Agreement,
and contains the entire understanding of the Company and the Executive with
respect to the subject matter hereof.

                                       28

<PAGE>

                IN WITNESS WHEREOF, the Executive has hereunto set his hand and,
pursuant to the authorization from its Board of Directors, the Company has
caused these presents to be executed in its name on its behalf, all as of the
day and year first above written.

                                        EXECUTIVE

                                        -------------------------------
                                        Alan W. Crellin


                                        US AIRWAYS, INC.

                                        -------------------------------
                                        Jennifer C. McGarey
                                        Vice President, Deputy General Counsel
                                        and Secretary

                                       29


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