EXHIBIT 10.15

CONTINENTAL AIRLINES, INC.

ANNUAL EXECUTIVE BONUS PROGRAM

(as amended and restated through February 22, 2006)

 

1. Purpose. This Continental Airlines, Inc. Annual Executive Bonus Program (the
"Program") has been adopted by the Human Resources Committee of the Board of
Directors of Continental Airlines, Inc., a Delaware corporation (the "Company"),
to implement in part the Performance Award provisions of the Continental
Airlines, Inc. Incentive Plan 2000 (as amended from time to time, the "Incentive
Plan 2000") adopted by the Board of Directors and the stockholders of the
Company, and is intended to provide a method for attracting, motivating, and
retaining key officers of the Company and its subsidiaries and to compensate
such officers based on performance measures based upon EBITDAR of the Company
and its consolidated subsidiaries as described herein. The Program and
participation hereunder shall be subject to the terms of the Incentive Plan
2000, including the limitations on the maximum value of awards contained
therein.

2. Participants. Each of the Chief Executive Officer, the President, each
Executive Vice President and each Senior Vice President of the Company shall
automatically participate in the Program with respect to each fiscal year, and,
with respect to a particular fiscal year, such other officers of the Company or
its subsidiaries shall participate in the Program as may be recommended to the
Human Resources Committee of the Board of Directors of the Company (the
"Committee") by the Chief Executive Officer of the Company and designated by the
Committee to be a participant in the Program with respect to such fiscal year.
Each of the foregoing persons is referred to herein as a "Participant", and the
right to participate in the Program for a fiscal year or portion thereof
constitutes a Performance Award (as such term is defined in the Incentive Plan
2000) under the Incentive Plan 2000. The Chief Executive Officer shall have the
power to terminate any Participant's participation in the Program upon written
notice to such Participant of such termination, subject to ratification of such
action by the Committee.

3. Definitions. Where the following words and phrases are used in this Program,
they shall have the respective meanings set forth below, unless the context
clearly indicates to the contrary:

"Base Invested Capital" with respect to a fiscal year means the sum of (x) and
(y), where (x) is the simple four-fiscal quarter average of the total amount of
property and equipment set forth on the regularly prepared and publicly
available consolidated balance sheet of the Company prepared in accordance with
GAAP as of the end of the respective fiscal quarter (or with respect to the
fourth quarter, the year-end), less accumulated depreciation and amortization
thereon and less purchase deposits for flight equipment so set forth, and where
(y) is 7.5 times the total amount of aircraft rentals set forth on the regularly
prepared and publicly available consolidated statement of operations of the
Company prepared in accordance with GAAP with respect to the fiscal year then
ended; provided, however, that with respect to fiscal year 2004 only, clause (x)
of the definition of Base Invested Capital shall be calculated with respect to
the three-fiscal quarter average beginning with the second fiscal quarter (i.e.,
determined by averaging the data as of June 30, September 30 and December 31,
2004 only) and the resulting average shall be multiplied by 0.75, and clause (y)
of the definition of Base Invested Capital shall be calculated with respect to
the three-fiscal quarter period ending December 31, 2004.

"Base Salary" with respect to a fiscal year means the Participant's base annual
salary with respect to such fiscal year payable by the Company or a consolidated
subsidiary, as in effect on the last day of such fiscal year (or as in effect on
such other date as may be specified in this Program).

"Basis Point" means one one-hundredth of a percent (0.01%).

"Cash Hurdle" means, with respect to a fiscal year, that the Company's cash flow
over such fiscal year is such that the Company's cash, cash equivalents and
short term investments (excluding restricted cash, cash equivalents and short
term investments) at the end of such fiscal year, as reflected on the regularly
prepared and publicly available consolidated balance sheet of the Company
prepared in accordance with GAAP, is equal to or greater than the dollar amount
specified by the Committee as the Cash Hurdle with respect to such fiscal year
as provided in Section 5 hereof; provided, however, that with respect to fiscal
year 2004 only, such cash flow shall be measured with respect to the period
commencing on April 1, 2004 and ending on December 31, 2004 (which period shall
be considered a "fiscal year" for purposes of this Program).

"EBITDAR" with respect to a fiscal year means the aggregate earnings of the
Company and its consolidated subsidiaries during such fiscal year, determined
prior to the charges, costs, and expenses associated with interest, income
taxes, depreciation, amortization, and aircraft rent; provided, however, that
with respect to fiscal year 2004 only, EBITDAR shall be measured with respect to
the period commencing on April 1, 2004 and ending on December 31, 2004. EBITDAR
shall be determined based on the regularly prepared and publicly available
statements of operations of the Company prepared in accordance with GAAP (and if
necessary to determine certain items, based on Form 41 data filed by the Company
with the Department of Transportation); provided, however, that EBITDAR shall be
adjusted to exclude (i) non-operating income or expense, (ii) write-offs of
assets (including aircraft and associated parts), (iii) one-time gains or losses
from the disposal of assets, and (iv) any other item of gain, loss, or expense
determined to be extraordinary or unusual in nature or infrequent in occurrence,
in each case under clauses (i), (ii), (iii) and (iv) as determined by the
Committee in accordance with GAAP.

"Entry ROBIC Margin" with respect to a fiscal year means that percentage
established by the Committee as the Entry ROBIC Margin with respect to such
fiscal year as determined pursuant to Section 5 hereof.

"Financial Performance Hurdle" means, with respect to a fiscal year, that the
Company's net income for such year, as set forth on its regularly prepared and
publicly available consolidated statement of operations prepared in accordance
with GAAP, is equal to or greater than the dollar amount specified by the
Committee as the Financial Performance Hurdle with respect to such fiscal year
as provided in Section 5 hereof; provided, however, that, at the time the
Committee specifies the performance goals with respect to such fiscal year as
provided in Section 5 hereof, the Committee may, in its discretion, specify that
the Company's net income shall be adjusted for purposes of determining the
Financial Performance Hurdle for such fiscal year by excluding or including
items specified by the Committee (such as, for example, by excluding write-offs
of assets or one-time gains or losses from the disposal of assets), in each case
as determined by the Committee in accordance with GAAP)."

"GAAP" means United States generally accepted accounting principles,
consistently applied.

"ROBIC Margin Bonus" with respect to a Participant for a fiscal year shall be
equal to the dollar amount calculated by multiplying such Participant's Base
Salary with respect to such fiscal year by: (1) 0(zero)%, if the ROBIC Margin
with respect to such fiscal year is less than the Entry ROBIC Margin with
respect to such fiscal year, or (2) 50% if the ROBIC Margin with respect to such
fiscal year is at least equal to the Entry ROBIC Margin with respect to such
fiscal year, and (if the ROBIC Margin with respect to such fiscal year exceeds
the Entry ROBIC Margin with respect to such fiscal year) an additional Target
Incentive Percentage for each Basis Point that the ROBIC Margin with respect to
such fiscal year exceeds the Entry ROBIC Margin with respect to such fiscal
year, up to and including the Target ROBIC Margin with respect to such fiscal
year, and (if the ROBIC Margin with respect to such fiscal year exceeds the
Target ROBIC Margin with respect to such fiscal year) an additional Stretch
Incentive Percentage for each Basis Point that the ROBIC Margin with respect to
such fiscal year exceeds the Target ROBIC Margin with respect to such fiscal
year, up to and including the Stretch ROBIC Margin with respect to such fiscal
year.

"ROBIC Margin" with respect to a fiscal year means EBITDAR with respect to such
fiscal year divided by the Base Invested Capital with respect to such fiscal
year, expressed as a percentage.

"Stretch Incentive Percentage" with respect to a fiscal year means that
percentage established by the Committee as the Stretch Incentive Percentage with
respect to such fiscal year as determined pursuant to Section 5 hereof.

"Stretch ROBIC Margin" with respect to a fiscal year means that percentage
established by the Committee as the Stretch ROBIC Margin with respect to such
fiscal year as determined pursuant to Section 5 hereof.

"Target Incentive Percentage" with respect to a fiscal year means that
percentage established by the Committee as the Target Incentive Percentage with
respect to such fiscal year as determined pursuant to Section 5 hereof.

"Target ROBIC Margin" with respect to a fiscal year means that percentage
established by the Committee as the Target ROBIC Margin with respect to such
fiscal year as determined pursuant to Section 5 hereof.

 

4. Annual Bonuses. Each Participant in the Program who has remained continuously
employed by the Company or a subsidiary during the entire fiscal year with
respect to which the Annual Bonus (as defined below) is to be paid, shall
receive, as soon as reasonably practicable after the certification by the
Committee described in Section 5 below with respect to such fiscal year, a cash
bonus (an "Annual Bonus"), if any, equal to the ROBIC Margin Bonus for such
Participant with respect to such fiscal year; provided that (i) the Cash Hurdle
for such fiscal year has been achieved (and if such Cash Hurdle has not been
achieved, then no Annual Bonus shall be payable with respect to such fiscal
year) and (ii) the Financial Performance Hurdle, if any, applicable to such
ROBIC Margin Bonus for such fiscal year has been achieved (and if such Financial
Performance Hurdle, if any, applicable to such ROBIC Margin Bonus has not been
achieved, then no Annual Bonus shall be payable with respect to such fiscal
year). For fiscal years beginning on or after January 1, 2005, if a person
becomes a Participant after the first day of a fiscal year (and, with respect to
fiscal year 2004, if a person becomes a Participant after the first day that the
initial persons first become Participants in the Program), then (i) such
Participant's Annual Bonus with respect to such fiscal year shall be pro-rated
based on a fraction, the numerator of which is the number of days during the
period beginning on the date of such Participant's commencement of participation
in the Program for such fiscal year and ending on the last day of such fiscal
year, and the denominator of which is 365, and (ii) the continuous employment
requirement set forth in the first sentence of this Section 4 for the fiscal
year in which such Participant begins participation in the Program shall apply
only to that portion of such fiscal year beginning on the date of such
Participant's commencement of participation (rather than the entire fiscal
year).

5. Administration. The Program will be administered by the Committee, which at
all times will consist of not less than two persons, each of whom is an "outside
director" within the meaning of section 162(m) of the Internal Revenue Code of
1986, as amended (the "Code"). The action of a majority of the members of the
Committee will be the act of the Committee. The Committee shall, promptly upon
adoption of the Program in the case of the period from April 1, 2004 to December
31, 2004, and within 90 days after the beginning of the fiscal year in the case
of each fiscal year of the Company beginning on or after January 1, 2005,
establish in writing the Entry ROBIC Margin, the Target ROBIC Margin, the
Stretch ROBIC Margin, the Target Incentive Percentage, the Stretch Incentive
Percentage and the Cash Hurdle for such fiscal year for purposes of this
Program. In addition, the Committee shall, within 90 days after the beginning of
each fiscal year of the Company beginning on or after January 1, 2006, establish
in writing the Financial Performance Hurdle applicable to any ROBIC Margin Bonus
for such fiscal year for purposes of this Program; provided, however, that the
Committee may, in its sole discretion, determine within 90 days after the
beginning of any such fiscal year that there shall be no Financial Performance
Hurdle for such fiscal year.

The interpretation and construction by the Committee of any provision of the
Program, and any determination or action by the Committee pursuant to any
provision hereof, will be final and conclusive for all purposes, and each
Participant's participation in the Program is expressly subject to the
foregoing. No member of the Committee shall be liable for any action or
determination taken or made in good faith or upon reliance in good faith on the
records of the Company or information presented to the Committee by the
Company's officers, employees, or other persons (including the Company's outside
auditors) as to matters such member reasonably believes are within such other
person's professional or expert competence. If a Participant disagrees with any
decision, determination, or action made or taken by the Committee, then the
dispute will be limited to whether the Committee has satisfied its duty to make
such decision or determination or take such action in good faith.

As soon as is reasonably practical after the end of each fiscal year (or with
respect to 2004 only, the period commencing April 1, 2004 and ending December
31, 2004) during which the Program is effective, the Committee shall certify in
writing, prior to the payment of any Annual Bonus with respect to such fiscal
year (or with respect to 2004 only, such period), whether the performance goals
set forth herein have been met and whether any other material terms relating to
the payment of such Annual Bonuses have been satisfied, to the extent required
by section 162(m) of the Code. For purposes of the preceding sentence, approved
minutes of the Committee meeting in which the certification is made shall be
treated as a written certification.

6. Payments upon a Change in Control. If a Change in Control occurs (as such
term is defined in the Incentive Plan 2000, as in effect on February 22, 2006,
taking into account amendments made on such date) and thereafter (or in
connection therewith or in contemplation thereof) during the year in which such
Change in Control occurs (a "Change Year"), a Participant suffers a Qualifying
Event (as herein defined), then such Participant shall, upon the occurrence of
the Qualifying Event, receive an amount in cash from the Company equal to the
maximum Annual Bonus payable to such Participant with respect to such Change
Year (calculated as if the Stretch ROBIC Margin, the Cash Hurdle and the
Financial Performance Hurdle, if any, had been achieved, irrespective of actual
results, and based on such Participant's Base Salary as in effect on the first
day of such Change Year, or if higher, as in effect immediately prior to the
occurrence of the Change in Control) and such Participant shall not be entitled
to any additional Annual Bonus with respect to such Change Year.

As used herein, the term "Qualifying Event" with respect to a Participant means
(i) the termination of such Participant's participation in the Program or a
reduction in such Participant's Base Salary, (ii) the assignment to such
Participant by the Board of Directors or the Committee or other officers or
representatives of the Company of duties materially inconsistent with the duties
associated with his position as such duties are constituted as of the first day
of the Change Year, (iii) a material diminution in the nature or scope of such
Participant's authority, responsibilities, or title from those applicable to him
as of the first day of the Change Year, (iv) the occurrence of material acts or
conduct on the part of the Company or its officers or representatives which
prevent such Participant from performing his duties and responsibilities as they
existed on the first day of the Change Year, (v) the Company requiring such
Participant to be permanently based anywhere outside a major urban center in the
state (or, if applicable, foreign country, U.S. territory or other applicable
sovereign entity) in which he was based as of the first day of the Change Year,
or (vi) the taking of any action by the Company that would materially adversely
affect the corporate amenities enjoyed by such Participant on the first day of
the Change Year, except in each case if such Participant's employment with the
Company and its subsidiaries is terminated (a) upon such Participant's death,
(b) upon disability entitling him or her to benefits under the Company's group
long-term disability plan, (c) for cause, which for purposes hereof shall mean
(1) in the case of a Participant with an employment agreement with the Company
or a subsidiary, the involuntary termination by the Company (or, if applicable,
a subsidiary) of such Participant's employment under circumstances that do not
require the Company (or such subsidiary) to pay to such Participant a
"Termination Payment" or "Monthly Severance Amount", as such terms are defined
in such Participant's employment agreement, and (2) in the case of a Participant
who does not have an employment agreement with the Company or a subsidiary, the
involuntary termination by the Company (or, if applicable, a subsidiary) of such
Participant's employment based upon a determination by the Committee or an
authorized officer of the Company (or such subsidiary) that such Participant has
engaged in gross negligence or willful misconduct in the performance of, or such
Participant has abused alcohol or drugs rendering him or her unable to perform,
the material duties and services required of him or her in his or her
employment, or (d) upon the voluntary resignation from employment of such
Participant (other than in connection with circumstances which would permit such
Participant to receive severance benefits pursuant to any contract of employment
between such Participant and the Company or any of its subsidiaries).

7. Amendments, Termination and Other Matters. Subject to the other provisions of
this Section 7, this Program may be amended from time to time or terminated by
the Committee; provided that this Program may not be amended or terminated in a
manner that would impair the rights of any Participant with respect to any
outstanding Performance Award with respect to a fiscal year that has ended prior
to such amendment or termination without the consent of such Participant, and
may not be amended or terminated in contemplation of or in connection with a
Change in Control, nor may any Participant's participation herein be terminated
in contemplation of or in connection with a Change in Control, unless adequate
and effective provision for the making of all payments otherwise payable
pursuant to Section 6 of this Program (as in effect on the date of adoption of
this Program) with respect to such Change in Control shall be made in connection
with any such amendment or termination.

Participation in the Program by a Participant shall terminate upon such
Participant's termination of employment with the Company and its subsidiaries or
as otherwise set forth herein, and no Participant shall have any right to
continue to participate in the Program or have any vested right to any bonus or
other payment hereunder (except as aforesaid in connection with a Change in
Control and except with respect to fiscal years which have already ended prior
to such amendment or termination or prior to such Participant's termination of
employment with the Company and its subsidiaries).

Participation in the Program shall not confer any right of future employment.
The Program is not intended to create a pension or welfare benefit plan and is
intended to be exempt from application of the Employee Retirement Income
Security Act of 1974, as amended. The Program is unfunded and shall not create,
or be construed to create, a trust or separate fund or funds, and each
Participant shall be entitled only to look to the Company for any benefit
hereunder, and shall have no greater right than an unsecured creditor of the
Company.

No liability whatsoever shall attach to or be incurred by any past, present or
future stockholders, officers or directors, as such, of the Company or any of
its subsidiaries, under or by reason of this Program or the administration
thereof, and each Participant, in consideration of receiving benefits and
participating hereunder, expressly waives and releases any and all claims
relating to any such liability.

No bonus or Performance Award or other right, title, interest, or benefit
hereunder shall ever be assignable or transferable, or liable for, or charged
with any of the torts or obligations of a Participant or any person claiming
under a Participant, or be subject to seizure by any creditor of a Participant
or any person claiming under a Participant. No Participant or any person
claiming under a Participant shall have the power to anticipate or dispose of
any bonus, Performance Award or other right, title, interest, or benefit
hereunder in any manner until the same shall have actually been distributed free
and clear of the terms of the Program. Payments with respect to bonuses
hereunder shall be payable only to the Participant (or in the event of the death
of a Participant, any payment due under the Program to such Participant shall be
made to his or her estate). Notwithstanding the preceding provisions of this
paragraph, the Committee shall comply with the terms of any qualified domestic
relations order (as defined in the Incentive Plan 2000) providing for the
transfer or assignment of all or any portion of a Participant's interest under
the Program. The provisions of this Program shall be binding on all successors
and assigns of a Participant, including without limitation the estate of such
Participant and the executor, administrator or trustee of such estate, or any
receiver or trustee in bankruptcy or representative of the Participant's
creditors.

This Program shall be construed in accordance with the laws of the State of
Texas.

8. Tax Withholding. The Company shall have the right to withhold from any
payment hereunder all applicable federal, state, local and other taxes as
required by law.

9. Forfeiture of Annual Bonus in Certain Circumstances. (a) If the Committee
determines that (i) a Participant has engaged in Misconduct (as defined below)
and (ii) such Misconduct results, directly or indirectly, in any error in
financial information used in the determination of the Annual Bonus paid to such
Participant with respect to any fiscal year of the Company and (iii) the effect
of such error is to increase the amount of such Annual Bonus, then such
Participant shall be obligated to reimburse the Company for the full amount of
such Annual Bonus, and not the excess over the Annual Bonus that would have been
paid as an Annual Bonus in the absence of Misconduct. Reimbursement may be
required pursuant to this Section 9 (upon a determination by the Committee) even
if the error in the financial information constitutes an error only in the
timing of recognition of an item or income or expense. The amount to be
reimbursed shall not be reduced by any income or other taxes required to be paid
by such Participant in connection with the receipt of such Annual Bonus.

(b) For purposes of this Section 9, the term "Misconduct" shall mean an
intentional violation of the Company's Principles of Conduct as in effect from
time to time; provided, however, that in no event shall any Participant be
deemed to have engaged in Misconduct as a result of his or her failure to
adequately supervise or review the work product of any subordinate employee,
unless such Participant willfully failed to appropriately supervise or review
such work product in bad faith.

(c) In making any determination under this Section 9, the Committee shall not be
bound by any position in regard to the Participant's Misconduct or the
determination of the Annual Bonus taken by the Company or any director, employee
or representative of the Company or any of the foregoing in any other proceeding
or inquiry in respect of such Annual Bonus or such financial information.
Notwithstanding anything in this Section 9 to the contrary, in no event shall
any determination by the Committee of Misconduct occur after the occurrence of a
Change in Control (as such term is defined for purposes of Section 6 hereof).

(d) Any determination by the Committee that an Executive has engaged in
Misconduct affecting any Annual Bonus shall be made not later than four years
after the end of the fiscal year to which such Annual Bonus relates. Such
determination shall be communicated within thirty days following such
determination by notice (i) in writing delivered to the Participant in person or
(ii) by e-mail to the most recent e-mail address in the Company's files for such
Participant and by regular mail to the most recent address in the Company's file
for the Participant. The Executive shall have thirty dates following the date of
such notice to reimburse the Company the entire amount of such Annual Bonus. To
the extent that a Participant fails to pay any amount described in any such
notice within the period provided by this paragraph 9(d), the Company shall have
the right to offset and withhold from any payment required to be paid by the
Company to such Participant the unpaid amount (or any portion thereof).

(e) Any dispute or controversy relating to this Section 9 shall be resolved by
arbitration in Houston, Texas, before a single arbitrator, under the rules of
the American Arbitration Association and shall be enforceable by any court
having jurisdiction in the matter. In any such arbitration, the prevailing party
shall be awarded its reasonable costs, including reasonable attorney's fees. Any
award in any such arbitration to the Company of amounts required to be
reimbursed by a Participant shall include interest from the date of the notice
described in paragraph 9(d) hereof through the date of payment at a rate equal
to the greater of (i) the short-term, medium-term or long-term (depending on the
period from the date of default through the date of payment) "applicable federal
rate" (within the meaning of Section 1274(d) of the Internal Revenue Code of
1986), for the month preceding the month in which such award is made, compounded
annually and (ii) the rate under applicable law as determined in such
arbitration.

(f) The provisions of this Section 9 shall be in addition to, and not in lieu
of, any rights of the Company and obligations of any Executive under law,
contract or otherwise with respect the matters addressed herein.

10. Effective Date. This Program shall be effective as of the date of its
adoption by the Committee, and shall be applicable to the period beginning April
1, 2004 to December 31, 2004 and the Company's fiscal years thereafter.

*******

IN WITNESS WHEREOF,

the undersigned officer of the Company acting pursuant to authority granted to
him by the Committee has executed this instrument as of the 22nd day of
February, 2006, effective as stated above.

CONTINENTAL AIRLINES, INC.

 

By:

/s/ Jeffery A. Smisek__________

Jeffery A. Smisek

President