Form of Outside Director Stock Option Agreement



 EXHIBIT 4.26 

FORM OF 

OUTSIDE DIRECTOR STOCK OPTION AGREEMENT 

(PURSUANT TO THE TERMS OF THE 

CONTINENTAL AIRLINES, INC. 

1998 STOCK INCENTIVE PLAN) 

IF THE OPTIONEE ACCEPTS THIS OPTION,
THE OPTIONEE AGREES TO BE BOUND BY ALL OF THE 

TERMS, PROVISIONS, CONDITIONS AND LIMITATIONS 

OF THE PLAN AND THIS OUTSIDE
DIRECTOR STOCK OPTION AGREEMENT. 
 THE
PLAN IS HEREBY INCORPORATED 
 BY
REFERENCE AS A PART OF THIS OUTSIDE DIRECTOR STOCK OPTION AGREEMENT. 

CAPITALIZED TERMS USED BUT NOT DEFINED
HEREIN SHALL HAVE THE MEANINGS ASCRIBED 

THERETO IN THE PLAN. 

This STOCK OPTION AGREEMENT (this “Option Agreement”) is between Continental Airlines, Inc., a Delaware corporation
(“Company”), and Optionee and is dated as of [            ]. 

1. Grant of Option. The Company hereby grants to Optionee the right, privilege and option as herein set forth (the
“Option”) to purchase up to five thousand [(            )] shares (the “Shares”) of Common Stock, in accordance with the terms of this Option Agreement.
The Shares, when issued to Optionee upon the exercise of the Option, shall be fully paid and nonassessable. The Option is granted pursuant to and to implement in part the Continental Airlines, Inc. 1998 Stock Incentive Plan (as amended and in
effect from time to time, the “Plan”). The Option is not intended to qualify as an Incentive Stock Option. 
 2.
Option Term. Subject to earlier termination as provided herein, the Option shall terminate on [            ]. The period during which the Option is in effect is
referred to as the “Option Period”. 
 3. Option Exercise Price. The exercise price (the “Option
Price”) of the Shares subject to the Option shall be equal to the Market Value per Share on the date hereof. 
 4.
Vesting. The total number of Shares subject to this Option shall vest immediately upon the grant hereof. 
 5.
Method of Exercise. To exercise the Option, Optionee shall deliver an irrevocable written notice to Company (to the attention of the Secretary of the Company) stating the number of Shares with respect to which the Option is being
exercised together with payment for such Shares. Payment shall be made (i) in cash or by check acceptable to Company, (ii) in nonforfeitable, unrestricted shares of Company’s Common Stock owned by Optionee at the time of exercise of
the Option having an aggregate market value (measured by the Market Value per 
  

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Share) at the date of exercise equal to the aggregate exercise price of the Option being exercised or (iii) by a combination of (i) and (ii). In addition, at the request of Optionee,
and to the extent permitted by applicable law and subject to Paragraph 15, the Option may be exercised pursuant to a “cashless exercise” arrangement with any brokerage firm approved by the Administrator or its delegate under which
arrangement such brokerage firm, on behalf of Optionee, shall pay to Company the exercise price of the Options being exercised, and Company, pursuant to an irrevocable notice from Optionee, shall promptly after receipt of the exercise price deliver
the shares being purchased to such firm. 
 6. Termination of Board Service. The Option shall terminate on, and
may not be exercised after the earlier of (i) the date that is one year after termination of Optionee’s service on the Board for any reason and (ii) the expiration of the Option Period. 

7. Reorganization of Company and Subsidiaries. The existence of the Option shall not affect in any way the right or power
of Company or its stockholders to make or authorize any or all adjustments, recapitalizations, reorganizations or other changes in Company’s capital structure or its business, or any merger or consolidation of Company or any issue of bonds,
debentures, preferred or prior preference stock ahead of or affecting the Shares or the rights thereof, or the dissolution or liquidation of Company, or any sale or transfer of all or any part of its assets or business, or any other corporate act or
proceeding, whether of a similar character or otherwise. 
 8. Adjustment of Shares. In the event of stock
dividends, spin-offs of assets or other extraordinary dividends, stock splits, combinations of shares, recapitalizations, mergers, consolidations, reorganizations, liquidations, issuances of rights or warrants and similar transactions or events
involving Company, appropriate adjustments shall be made to the terms and provisions of this Option, in the same manner as is provided for adjustments to the terms and provisions of the warrants issued by Company to Air Canada and to Air Partners,
L.P. under the Warrant Agreement dated as of April 27, 1993. 
 9. No Rights in Shares. Optionee shall have
no rights as a stockholder in respect of Shares until such Optionee becomes the holder of record of such Shares. 
 10.
Certain Restrictions. By exercising the Option, Optionee agrees that if at the time of such exercise the sale of Shares issued hereunder is not covered by an effective registration statement filed under the Securities Act of 1933
(“Act”), Optionee will acquire the Shares for Optionee’s own account and without a view to resale or distribution in violation of the Act or any other securities law, and upon any such acquisition Optionee will enter into such written
representations, warranties and agreements as Company may reasonably request in order to comply with the Act or any other securities law or with this Option Agreement. Optionee agrees that Company shall not be obligated to take any affirmative
action in order to cause the issuance or transfer of Shares hereunder to comply with any law, rule or regulation that applies to the Shares subject to the Option. 

 

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 11. Shares Reserved. Company shall at all times during the Option Period
reserve and keep available such number of Shares as will be sufficient to satisfy the requirements of this Option. 
 12.
Nontransferability of Option. The Option granted pursuant to this Option Agreement is not transferable other than by will, the laws of descent and distribution or by qualified domestic relations order. The Option will be exercisable
during Optionee’s lifetime only by Optionee or by Optionee’s guardian or legal representative. No right or benefit hereunder shall in any manner be liable for or subject to any debts, contracts, liabilities, or torts of Optionee.

 13. Amendment and Termination; Electronic Delivery. No amendment or termination of the Option shall be made by
the Board or the Administrator at any time without the written consent of Optionee. No amendment or termination of the Plan will adversely affect the rights, privileges and option of Optionee under the Option without the written consent of Optionee.
Optionee hereby consents and agrees to electronic delivery of any Plan documents, proxy materials, annual reports and other related documents. 

14. No Guarantee of Board Service. The Option shall not confer upon Optionee any right with respect to continuance of
service on the Board, nor shall it interfere in any way with any right to terminate Optionee’s Board service at any time. 

15. Withholding of Taxes. Company shall have the right to (i) make deductions from the number of Shares otherwise
deliverable upon exercise of the Option in an amount sufficient to satisfy withholding of any federal, state or local taxes required by law, or (ii) take such other action as may be necessary or appropriate to satisfy any such tax withholding
obligations. 
 16. No Guarantee of Tax Consequences. Neither Company nor any subsidiary nor the Administrator
makes any commitment or guarantee that any federal or state tax treatment will apply or be available to any person eligible for benefits under the Option. 

17. Severability. In the event that any provision of the Option shall be held illegal, invalid, or unenforceable for any
reason, such provision shall be fully severable, but shall not affect the remaining provisions of the Option, and the Option shall be construed and enforced as if the illegal, invalid, or unenforceable provision had never been included herein.

 18. Governing Law. The Option shall be construed in accordance with the laws of the State of Delaware to the
extent federal law does not supersede and preempt Delaware law. 
  

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