Exhibit
10.14




CONTINENTAL
AIRLINES, INC.









LONG
TERM INCENTIVE AND RSU PROGRAM









I.PURPOSE OF
PROGRAM




1.1  Purpose.  This Continental
Airlines, Inc. Long Term Incentive and RSU 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 2010 (as amended from time to time, the “Incentive Plan 2010”),
and is intended to provide a method for attracting, motivating, and retaining
key employees to assist in the development and growth of the Company and its
Subsidiaries.  The Program and Awards hereunder shall be subject to
the terms of the Incentive Plan 2010, including the limitations on the maximum
amount of compensation that may be paid with respect to Performance Awards (as
such term is defined in the Incentive Plan 2010) as provided
therein.




II.DEFINITIONS AND
CONSTRUCTION




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




(a)  “Administrator”
means the Committee or the Chief Executive Officer of the Company (if the Chief
Executive Officer is a director of the Company), subject to the provisions of
Section 3.1.




(b)  “Award”
means, with respect to each Participant for a Performance Period, such
Participant’s opportunity to earn a Payment Amount for such Performance Period,
upon the satisfaction of the terms and conditions of the
Program.  Awards shall relate to an LTIP Performance Target (“LTIP
Awards”) or a Profit Based RSU Performance Target (“Profit Based RSU
Awards”).  Awards hereunder constitute Performance Awards (as such
term is defined in the Incentive Plan 2010) under the Incentive Plan
2010.




(c)  “Award
Notice” means a written notice issued by the Company to a Participant evidencing
such Participant’s receipt of an Award with respect to a Performance
Period.




(d)  “Base
Amount” means, with respect to a Participant, the sum of (i) the Participant’s
base annual salary payable by the Company or a Subsidiary, plus (ii) an
additional amount equal to the amount described in clause (i) multiplied by the
Participant’s Base Amount Multiple.




(e)  “Base
Amount Multiple” means, with respect to a Participant who receives an LTIP Award
for an LTIP Performance Period, the percentage established by the Committee as
the Base Amount Multiple with respect to such Award pursuant to Section
3.1.




(f)  “Basis
Point” means one one-hundredth of one percent (0.01%).




(g)  “Board”
means the Board of Directors of the Company




(h)  “Cash
Hurdle” means, with respect to an LTIP Performance Period or a Profit Based RSU
Performance Period, the dollar amount established by the Committee as the Cash
Hurdle with respect to such Performance Period pursuant to Section 3.1, and
achievement of the Cash Hurdle means (i) in the case of an LTIP Performance
Period, 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 Performance Period, as reflected on the regularly prepared and
publicly available balance sheet of the Company and its consolidated
subsidiaries prepared in accordance with applicable accounting rules, is equal
to or greater than the dollar amount established by the Committee as the Cash
Hurdle for such Performance Period, and (ii) in the case of a Profit Based RSU
Performance Period, that the Company’s cash, cash equivalents and short term
investments (excluding restricted cash, cash equivalents and short term
investments) at the end of the Fiscal Year prior to the applicable Specified
Payment Date (the “Cash Hurdle Measurement Date”), as reflected on the regularly
prepared and publicly available balance sheet of the Company and its
consolidated subsidiaries prepared in accordance with applicable accounting
rules, is equal to or greater than the dollar amount established by the
Committee as the Cash Hurdle for such Performance Period.




(i)  “Change
in Control” means a “Change in Control” as defined in the Incentive Plan 2010 as
in effect on the date the Incentive Plan 2010 is approved by the stockholders of
the Company.




(j)  “Code”
means the Internal Revenue Code of 1986, as amended.




(k)  “Committee”
means a committee of the Board comprised solely of two or more outside directors
(within the meaning of the term “outside directors” as used in section 162(m) of
the Code).  Such committee shall be the Human Resources Committee of
the Board unless and until the Board designates another committee of the Board
to serve as the Committee.




(l)  “Company”
means Continental Airlines, Inc., a Delaware corporation.




(m)  “Company
Stock” means the Class B common stock, par value $0.01 per share, of the
Company.




(n)  “Cumulative
Profit Sharing Pool” means, with respect to the last day of a Fiscal Year in a
Profit Based RSU Performance Period, the aggregate amount of the Profit Sharing
Pools, if any, for such Fiscal Year and for all prior Fiscal Years in such
Profit Based RSU Performance Period.




(o)  “Cumulative
Profit Sharing Pool Target” means, with respect to a Profit Based RSU
Performance Period, the dollar amount established by the Committee as the
Cumulative Profit Sharing Pool Target with respect to such Performance Period
pursuant to Section 3.1.  The Committee may set multiple levels
(including through interpolation) for the Cumulative Profit Sharing Pool Target
that may apply to a single Profit Based RSU Performance Period (and each such
level is referred to herein as a “Cumulative Profit Sharing Pool Target Level”),
and the Payout Structure relating to the Profit Based RSU Award for such
Performance Period may specify different Profit Based RSU Payment Percentages
depending on the Cumulative Profit Sharing Pool Target Level achieved (including
the interpolation of Profit Based RSU Payment Percentages if the Cumulative
Profit Sharing Pool Target Levels include interpolated
levels).  Achievement of a Cumulative Profit Sharing Pool Target means
that, as of the last day of a Fiscal Year in the Profit Based RSU Performance
Period, the Cumulative Profit Sharing Pool equals or exceeds a Cumulative Profit
Sharing Pool Target Level that has not been so achieved as of the last day of
any prior Fiscal Year in such Profit Based RSU Performance Period (and the
Cumulative Profit Sharing Pool Target shall be deemed achieved for such Fiscal
Year only with respect to the highest such Cumulative Profit Sharing Pool Target
Level so achieved for such Fiscal Year).




(p)  “Disability”
or “Disabled” means, with respect to a Participant, that such Participant is, by
reason of any medically determinable physical or mental impairment that can be
expected to result in death or can be expected to last for a continuous period
of not less than 12 months, receiving income replacement benefits for a period
of not less than three months under an accident and health plan covering
employees of such Participant’s employer.




(q)  “EBITDAR”
means, with respect to the Company and each company in the Industry Group and
each LTIP Performance Period, the aggregate earnings of the Company or such
company and its consolidated subsidiaries during the Performance Period,
determined prior to the charges, costs, and expenses associated with interest,
income taxes, depreciation, amortization, and aircraft rent.  EBITDAR
shall be determined based on the regularly prepared and publicly available
statements of operations of the Company and each company in the Industry Group
prepared in accordance with applicable accounting rules (and if necessary to
determine certain items, based on Form 41 data filed by the Company or such
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 special, 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 applicable accounting
rules.  If the fiscal year of a company in the Industry Group is not
the calendar year, then such company’s EBITDAR for an LTIP Performance Period
shall be determined based upon the fiscal quarters of such company that coincide
with the fiscal quarters contained in such Performance Period. Further, if a
company in the Industry Group provides publicly available statements of
operations with respect to its airline business that are separate from the
statements of operations provided with respect to its other businesses, then
such company’s EBITDAR shall be determined based solely upon the separately
provided statements of operations pertaining to its airline
business.




(r)  “EBITDAR
Margin” means, with respect to the Company and each LTIP Performance Period, the
cumulative EBITDAR for the Company for such Performance Period divided by the
Company’s cumulative revenues (determined on a consolidated basis based on the
regularly prepared and publicly available statements of operations of the
Company prepared in accordance with applicable accounting rules) over such
Performance Period; provided, however, that, such cumulative revenues shall be
adjusted to exclude any item determined to be special, extraordinary or unusual
in nature or infrequent in occurrence as determined by the Committee in
accordance with applicable accounting rules.




(s)  “Eligible
Employee” means any individual who is a staff vice president or more senior
officer of the Company or a Subsidiary.




(t)  “Entry
EBITDAR Margin” means, with respect to each LTIP Performance Period, the
percentage determined by dividing (i) the cumulative EBITDAR of all companies in
the Industry Group for such Performance Period by (ii) all such companies’
cumulative revenues (determined as provided in Section 2.1(r) with respect to
the Company) over such Performance Period.  If the fiscal year of a
company in the Industry Group is not the calendar year, then such company’s
cumulative revenues for an LTIP Performance Period shall be determined based
upon the fiscal quarters of such company that coincide with the fiscal quarters
contained in such Performance Period.  Further, if a company in the
Industry Group provides publicly available statements of operations with respect
to its airline business that are separate from the statements of operations
provided with respect to its other businesses, then such company’s cumulative
revenues shall be determined based solely upon the separately provided
statements of operations pertaining to its airline business.




(u)  “Entry
Level LTIP Percentage” means, with respect to each Participant who receives an
LTIP Award for an LTIP Performance Period, the percentage established by the
Committee as the Entry Level LTIP Percentage for such Participant with respect
to such Award pursuant to Section 3.1.




(v)  “Fiscal
Year” means each 12-consecutive month period commencing on
January 1.




(w)  “Incentive
Plan 2010” means the Continental Airlines, Inc. Incentive Plan 2010, as amended
from time to time.




(x)  “Industry
Group” means, with respect to each LTIP Performance Period, the companies
determined in accordance with the provisions of Article V for such Performance
Period.




(y)  “LTIP
Performance Period” means each three-year period commencing on the first day of
a calendar year that begins on or after January 1,
2010.  Notwithstanding the foregoing, no new LTIP Performance Period
shall commence on or after the date upon which a Change in Control occurs,
unless otherwise determined by the Committee.




(z)  “Market
Value per Share” means, as of any specified date, the simple average of the
closing sales prices of Company Stock in the principal securities market in
which the Company Stock is then traded over the 20 most recent consecutive
Trading Days ending on the last Trading Day preceding the specified date,
adjusted appropriately by the Committee for any stock splits, stock dividends,
reverse stock splits, special dividends or other similar matters occurring
during or with respect to any relevant measurement period.




(aa)  “Maximum
Aggregate Payment Amount” means an amount equal to the product of (i) the Profit
Based RSU Payment Percentage applicable to the highest Cumulative Profit Sharing
Pool Target Level established by the Committee with respect to such Award
multiplied by (ii) a dollar amount determined by the Committee in its sole
discretion; provided, however, that the Committee may, in its sole discretion,
determine whether or not to establish a Maximum Aggregate Payment Amount with
respect to any particular RSU.  The Maximum Aggregate Payment Amount,
if any, with respect to an RSU subject to an outstanding Profit Based RSU Award
shall be subject to appropriate adjustment by the Committee for any stock
splits, stock dividends, reverse stock splits, special dividends or other
similar matters relating to Company Stock occurring after the date of grant of
such Award.




(bb)  “Participant”
means an Eligible Employee who has received an Award under the Program with
respect to a Performance Period pursuant to Section 4.1.




(cc)  “Payment
Amount” (A) with respect to LTIP Awards means, with respect to each Participant
and each LTIP Performance Period for which the LTIP Performance Target is
satisfied, an amount equal to (i) such Participant’s Base Amount in effect as of
the earlier of (1) the last day of such LTIP Performance Period, (2) the date of
such Participant’s death, Disability or Retirement, or (3) the day immediately
preceding the date upon which such Participant suffers a Qualifying Event on or
after the occurrence of a Change in Control, multiplied by (ii) the Payout
Percentage applicable to such Participant for such LTIP Performance Period, and
(B) with respect to each Profit Based RSU Award and related Profit Based RSU
Performance Period, means each amount payable pursuant to Section 6.2(b), 6.3(b)
and 6.4(b).  Notwithstanding the foregoing, a Payment Amount may be
pro-rated as provided in the Program.




(dd)  “Payout
Percentage” means, with respect to each Participant for an LTIP Performance
Period for which the LTIP Performance Target is satisfied, a percentage,
determined as of the earlier of (i) the last day of such Performance Period,
(ii) the date of such Participant’s death, Disability or Retirement, or (iii)
the day immediately preceding the date upon which such Participant suffers a
Qualifying Event on or after the occurrence of a Change in Control, equal to
such Participant’s Entry Level LTIP Percentage plus (A) if the Company’s EBITDAR
Margin with respect to such Performance Period exceeds the Entry EBITDAR Margin
with respect to such Performance Period, an additional percentage equal to (x)
such Participant’s Target Level LTIP Percentage divided by (y) the difference
between the Target EBITDAR Margin with respect to such Performance Period and
the Entry EBITDAR Margin with respect to such Performance Period (expressed in
Basis Points), for each Basis Point that the Company’s EBITDAR Margin with
respect to such Performance Period exceeds the Entry EBITDAR Margin with respect
to such Performance Period, up to and including the Target EBITDAR Margin with
respect to such Performance Period, and (B) if the Company’s EBITDAR Margin with
respect to such Performance Period exceeds the Target EBITDAR Margin with
respect to such Performance Period, an additional percentage equal to (x) such
Participant’s Stretch Level LTIP Percentage divided by (y) the difference
between the Stretch EBITDAR Margin with respect to such Performance Period and
the Target EBITDAR Margin with respect to such Performance Period (expressed in
Basis Points), for each Basis Point that the Company’s EBITDAR Margin with
respect to such Performance Period exceeds the Target EBITDAR Margin with
respect to such Performance Period, up to and including the Stretch EBITDAR
Margin with respect to such Performance Period.




(ee)  “Payout
Structure” means, with respect to each Profit Based RSU Performance Period, a
Profit Based RSU Payment Percentage determined by the Committee to apply to each
Cumulative Profit Sharing Pool Target Level relating to such Performance
Period.  The Payout Structure for each Profit Based RSU Performance
Period shall be established by the Committee pursuant to Section
3.1.




(ff)  “Performance
Period” means an LTIP Performance Period or a Profit Based RSU Performance
Period, as applicable or as the context requires.




(gg)  “Performance
Target” means (A) with respect to an LTIP Performance Period, that (1) the Cash
Hurdle with respect to such Performance Period has been achieved, and (2) the
Company’s EBITDAR Margin with respect to such Performance Period equals or
exceeds the Entry EBITDAR Margin with respect to such Performance Period
(clauses (A)(1) and (2) together, the “LTIP Performance Target”), and (B) with
respect to a Profit Based RSU Performance Period, that, as of the last day of a
Fiscal Year in such Performance Period, the Cumulative Profit Sharing Pool
Target for such Performance Period has been achieved (clause (B), the “Profit
Based RSU Performance Target”).




(hh)  “Profit
Based RSU Payment Percentage” means, with respect to each Profit Based RSU
Performance Period, the percentage of the RSUs subject to the related Profit
Based RSU Award for which payments may be made under the Program upon
achievement of a particular Cumulative Profit Sharing Pool Target Level relating
to such Performance Period.  The Profit Based RSU Payment Percentages
for a Profit Based RSU Performance Period shall be determined by the Committee
in connection with the Committee’s determination of the Payout Structure for
such Performance Period.




(ii)  “Profit
Based RSU Performance Period” means each period established by the Committee
pursuant to Section 3.1 that consists of one or more consecutive Fiscal Years
that begin on or after January 1, 2010.




(jj)  “Profit
Sharing Pool” means, with respect to each Fiscal Year, the “Annual Award Pool”
for such Fiscal Year determined under (and based on the definition of such term
set forth in) the Company’s broad-based profit sharing plan (the “PSP”) as in
effect on the 90th day
of the Profit Based RSU Performance Period that includes such Fiscal Year;
provided, however, that any Minor Pool (as defined in the PSP) with respect to a
Fiscal Year that ended prior to the beginning of any Profit Based RSU
Performance Period shall not be included in the Profit Sharing Pool with respect
to a Fiscal Year in such Performance Period.




(kk)  “Program”
means this Continental Airlines, Inc. Long Term Incentive and RSU Program, as
amended from time to time.




(ll)  “Qualifying
Event” means, with respect to a Participant, the termination of such
Participant’s employment with the Company under circumstances which would permit
such Participant to receive a Termination Payment or Monthly Severance Amount
(as such terms are defined in such Participant’s employment agreement), or
similar payment, pursuant to any contract of employment between such Participant
and the Company or any Subsidiary.




(mm)  “Retirement,”
“Retires” or “Retired” means retirement of a Participant from employment with
the Company pursuant to the provisions of the Continental Retirement Plan, as
amended from time to time.




(nn)  “RSUs”
means the method of denominating Profit Based RSU Awards, which shall be granted
in whole numbers and which are denominated in Company Stock for purposes of
Incentive Plan 2010.  The number of RSUs subject to an outstanding
Profit Based RSU Award shall be subject to appropriate adjustment by the
Committee for any stock splits, stock dividends, reverse stock splits, special
dividends or other similar matters relating to Company Stock occurring after the
date of grant of such Award and during or with respect to the applicable
Performance Period.




(oo)  “Section
16” means Section 16 of the Securities Exchange Act of 1934, as amended
(including any successor section to the same or similar effect).




(pp)  “Specified
Payment Date” means, with respect to a Profit Based RSU Performance Target that
is achieved for any Profit Based RSU Performance Period as of the last day of a
Fiscal Year, (i) with respect to a payment under Section 6.2(b)(i) for such
Fiscal Year, the first day of the 3rd month following the end of such Fiscal
Year, (ii) with respect to a payment under Section 6.2(b)(ii) for such Fiscal
Year, the first day of the 15th month following the end of such Fiscal Year, and
(iii) with respect to a payment under Section 6.2(b)(iii) for such Fiscal Year,
the first day of the 27th month following the end of such Fiscal
Year.  With respect to each Fiscal Year during a Profit Based RSU
Performance Period for which a Profit Based RSU Performance Target is achieved,
the Specified Payment Date referred to in clause (i) of the preceding sentence
is referred to herein as the “First Specified Payment Date,” the Specified
Payment Date referred to in clause (ii) of the preceding sentence is referred to
herein as the “Second Specified Payment Date,” and the Specified Payment Date
referred to in clause (iii) of the preceding sentence is referred to herein as
the “Third Specified Payment Date.”  Notwithstanding the foregoing, a
Specified Payment Date may be deferred as provided in Section
6.2(b).




(qq)  “Stretch
EBITDAR Margin” means, with respect to an LTIP Performance Period, the
percentage established by the Committee to be the Stretch EBITDAR Margin with
respect to such Performance Period pursuant to Section 3.1, which shall be
expressed as the Target EBITDAR Margin plus that number of Basis Points
established by the Committee pursuant to Section 3.1.




(rr)  “Stretch
Level LTIP Percentage” means, with respect to each Participant who receives an
LTIP Award for an LTIP Performance Period, the percentage established by the
Committee as the Stretch Level LTIP Percentage for such Participant with respect
to such Award pursuant to Section 3.1.




(ss)  “Subsidiary”
for purposes of participation in the Program means any entity (other than the
Company) with respect to which the Company, directly or indirectly through one
or more other entities, owns equity interests possessing 50 percent or more of
the total combined voting power of all equity interests of such entity
(excluding voting power that arises only upon the occurrence of one or more
specified events).




(tt)  “Target
EBITDAR Margin” means, with respect to an LTIP Performance Period, the
percentage established by the Committee to be the Target EBITDAR Margin with
respect to such Performance Period pursuant to Section 3.1, which shall be
expressed as the Entry EBITDAR Margin plus that number of Basis Points
established by the Committee pursuant to Section 3.1.




(uu)  “Target
Level LTIP Percentage” means, with respect to each Participant who receives an
LTIP Award for an LTIP Performance Period, the percentage established by the
Committee as the Target Level LTIP Percentage for such Participant with respect
to such Award pursuant to Section 3.1.




(vv)  “Trading
Day” means a day during which trading in securities generally occurs in the
principal securities market in which Company Stock is traded.




2.2  Number,
Gender, Headings, and Periods of Time.  Wherever
appropriate herein, words used in the singular shall be considered to include
the plural, and words used in the plural shall be considered to include the
singular.  The masculine gender, where appearing in the Program, shall
be deemed to include the feminine gender.  The headings of Articles,
Sections, and Paragraphs herein are included solely for
convenience.  If there is any conflict between such headings and the
text of the Program, the text shall control.  All references to
Articles, Sections, and Paragraphs are to the Program unless otherwise
indicated.  Any reference in the Program to a period or number of
days, weeks, months, or years shall mean, respectively, calendar days, calendar
weeks, calendar months, or calendar years unless expressly provided
otherwise.




III.ADMINISTRATION




3.1  Administration
by the Administrator.  The Program shall
be administered by the Administrator, so that (i) Awards made to, and the
administration (or interpretation of any provision) of the Program as it relates
to, any person who is subject to Section 16, shall be made or effected by the
Committee, and (ii) Awards made to, and the administration (or interpretation of
any provision) of the Program as it relates to, any person who is not subject to
Section 16, shall be made or effected by the Chief Executive Officer of the
Company (or, if the Chief Executive Officer is not a director of the Company,
the Committee), unless the Program specifies that the Committee shall take
specific action (in which case such action may only be taken by the Committee)
or the Committee (as to any Award described in this clause (ii) or the
administration or interpretation of any specific provision of the Program)
specifies that it shall serve as Administrator.  Notwithstanding the
foregoing, the Committee may from time to time in its discretion put any
conditions and restrictions on the powers that may be exercised by the Chief
Executive Officer of the Company in his or her capacity as
Administrator.  The action of a majority of the members of the
Committee will be the act of the Committee.




The
Committee may from time to time in its discretion establish in writing for
purposes of the Program a Profit Based RSU Performance Period that consists of
one or more consecutive Fiscal Years.  The Committee shall, within 90
days after the first day of each Performance Period commencing on or after
January 1, 2010 (but in no event after the date required for a performance goal
to be considered preestablished under section 162(m) of the Code), establish in
writing for purposes of the Program: (i) for LTIP Awards, (A) the applicable
Target EBITDAR Margin and Stretch EBITDAR Margin (such that at all times the
Stretch EBITDAR Margin shall be higher than the Target EBITDAR Margin, which in
turn shall be higher than the Entry EBITDAR Margin) and the Cash Hurdle for each
such Performance Period and (B) the Base Amount Multiple, Entry Level LTIP
Percentage, Target Level LTIP Percentage and Stretch Level LTIP Percentage for
each Participant with respect to such Performance Period, and (ii) for Profit
Based RSU Awards, the Cash Hurdle, the Cumulative Profit Sharing Pool Target
Levels (including the Cumulative Profit Sharing Pool Target Level that shall
apply for purposes of Section 6.4(b)), the related Payout Structure for such
Performance Period and the Maximum Aggregate Payment Amount, if any, applicable
to the RSUs subject to such Award.  The targets and other amounts
established by the Committee pursuant to the preceding sentence shall in each
case be subject to adjustment as determined by the Committee in its discretion
as a result of changes in accounting principles and other significant
extraordinary items or events; provided that in respect of any Award intended to
qualify as performance-based compensation within the meaning of section 162(m)
of the Code, such adjustments may only be made if and to the extent permitted by
section 162(m) of the Code.




3.2  Powers of
the Administrator.  The Administrator
shall supervise the administration and enforcement of the Program according to
the terms and provisions hereof and shall have the sole discretionary authority
and all of the powers necessary to accomplish these purposes.  The
Administrator (which shall be limited solely to the Committee with respect to
clauses (e), (f), (g), (h), (i) and (j) below and as described in clause (c)
below) shall have all of the powers specified for it under the Program,
including, without limitation, the power, right, or authority: (a) to designate
an Eligible Employee as a Participant with respect to a Performance Period at
any time prior to the last day of such period, (b) from time to time to
establish rules and procedures for the administration of the Program, which are
not inconsistent with the provisions of the Program or the Incentive Plan 2010,
and any such rules and procedures shall be effective as if included in the
Program, (c) to construe in its discretion all terms, provisions, conditions and
limitations of the Program and any Award, and to determine the number of RSUs
subject to a Profit Based RSU Award to a Participant (which determination with
respect to any person who is subject to Section 16 shall be made only by the
Committee), (d) to correct any defect or to supply any omission or to reconcile
any inconsistency that may appear in the Program in such manner and to such
extent as the Administrator shall deem appropriate, (e) to determine the Target
EBITDAR Margin, the Stretch EBITDAR Margin, the Cumulative Profit Sharing Pool
Target Levels and the Participant Base Amount Multiples, Entry Level LTIP
Percentages, Target Level LTIP Percentages and Stretch Level LTIP Percentages
with respect to each relevant Performance Period, (f) to determine the Cash
Hurdle for each relevant Performance Period, (g) to determine the Payout
Structure and the Maximum Aggregate Payment Amount, if any, for each Profit
Based RSU Award, (h) to make determinations as to whether the Performance
Targets for the various Performance Periods were satisfied, (i) to make
determinations as to whether the Cash Hurdles for the various Profit Based RSU
Performance Periods were satisfied, (j) to certify in writing, prior to the
payment of any amount under the Program with respect to a Performance Period,
whether the Performance Targets relating to such Performance Period and any
other material terms of the Program have in fact been satisfied, and (k) to make
all other determinations necessary or advisable for the administration of the
Program. The Administrator may correct any defect or supply any omission or
reconcile any inconsistency in the Program or in any Award or Award Notice in
the manner and to the extent it shall deem expedient to carry it into
effect.




3.3  Administrator
Decisions Conclusive; Standard of Care.  The Administrator
shall, in its sole discretion exercised in good faith (which, for purposes of
this Section 3.3, shall mean the application of reasonable business judgment),
make all decisions and determinations and take all actions necessary in
connection with the administration of the Program.  All such
decisions, determinations, and actions by the Administrator shall be final,
binding, and conclusive upon all persons.  However, in the event of
any conflict in any such determination as between the Committee and the Chief
Executive Officer of the Company, each acting in its or his capacity as
Administrator of the Plan, the determination of the Committee shall be
conclusive. The Administrator shall not 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 Administrator by the
Company’s officers, employees, or other persons (including the Company’s outside
auditors) as to matters the Administrator 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
Administrator, then the dispute will be limited to whether the Administrator has
satisfied its duty to make such decision or determination or take such action in
good faith.  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 the 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.




IV.PARTICIPATION AND AWARD
NOTICES




4.1  Participation.  Each individual
who is an Eligible Employee on the first day of a Performance Period shall
automatically be a Participant and receive an Award with respect to such
Performance Period, unless otherwise determined by the Administrator prior to
the first day of the relevant Performance Period.  LTIP Awards shall
be made with respect to LTIP Performance Periods and Profit Based RSU Awards
shall be made with respect to Profit Based RSU Performance
Periods.  Each individual who becomes an Eligible Employee after the
first day of a Performance Period shall become a Participant and receive an
Award with respect to such Performance Period only if such individual is
selected prior to the last day of such Performance Period by the Administrator
in its sole discretion for participation in the Program with respect to such
Performance Period.  Unless otherwise determined by the Administrator,
Payment Amounts with respect to an LTIP Award for an individual who becomes a
Participant with respect to such Award after the first day of the related
Performance Period shall be pro-rated based on a fraction, the numerator of
which is (except as otherwise provided in Section 6.3 or Section 6.4) the number
of days during the period beginning on the date of such Participant’s
commencement of participation in the Program for such Performance Period and
ending on the last day of such Performance Period, and the denominator of which
is the total number of days in such Performance Period.  In addition,
unless otherwise determined by the Administrator, Payment Amounts under Section
6.2(b) with respect to an individual who becomes a Participant with respect to a
Profit Based RSU Performance Period after the first day of such Performance
Period shall be pro-rated based on a fraction, the numerator of which is (except
as otherwise provided in Section 6.3) the number of days during the period
beginning on the date of such Participant’s commencement of participation in the
Program for such Performance Period and ending on the date of the applicable
payment under Section 6.2(b), and the denominator of which is (except as
otherwise provided in Section 6.3) the number of days in the period beginning on
the first day of the relevant Profit Based RSU Performance Period and ending on
the date of the applicable payment under Section 6.2(b).




4.2  Award
Notices.  The Company shall
provide an Award Notice to each Eligible Employee who becomes a Participant with
respect to a Performance Period within 90 days after such Eligible Employee
becomes such a Participant.  With respect to Profit Based RSU Awards
to a Participant, the Administrator shall determine in each case the number of
RSUs subject to the Award as of the date of grant of the Award.  Each
Award Notice with respect to a Profit Based RSU Award shall specify (a) the
Performance Period to which the Award relates, (b) the applicable Cumulative
Profit Sharing Pool Target Levels and Cash Hurdle, (c) the number of RSUs
subject to the Award as of the date of grant of the Award, and (d) the Payout
Structure and the Maximum Aggregate Payment Amount, if any, applicable to the
Award.  Each Award Notice with respect to an LTIP Award shall specify
(A) the Performance Period to which the Award relates, (B) the applicable Cash
Hurdle, Target EBITDAR Margin and Stretch EBITDAR Margin, (C) the applicable
Base Amount Multiple, and (D) the applicable Payout Percentages set forth in
Section 2.1(dd) hereof with respect to the Participant applicable upon the date
of grant of the Award.




V.INDUSTRY
GROUP




5.1  Initial
Designation.  The Industry
Group shall consist of Alaska Air Group, Inc., AMR Corporation, Delta Air Lines,
Inc., Southwest Airlines Co., UAL Corporation, and US Airways Group, Inc.;
provided, however, that (a) within 90 days after the first day of each LTIP
Performance Period, the Committee may in its discretion add any United States
certificated scheduled mainline air carrier to, or remove any such company from,
the Industry Group for such Performance Period and (b) the Industry Group for
each LTIP Performance Period shall be subject to adjustment as provided in
Section 5.2.




5.2  Adjustments
to the Industry Group During an LTIP Performance Period.  Except as
provided in clause (a) of the proviso to Section 5.1, no company shall be added
to, or removed from, the Industry Group for an LTIP Performance Period during
such period; provided, however, that a company shall be removed from the
Industry Group for an LTIP Performance Period if (a) during such period, (i)
such company ceases to maintain publicly available statements of operations
prepared in accordance with applicable accounting rules, (ii) such company is
not the surviving entity in any merger, consolidation, or other non-bankruptcy
reorganization (or survives only as a subsidiary of an entity other than a
previously wholly owned subsidiary of such company), (iii) such company sells,
leases, or exchanges all or substantially all of its assets to any other person
or entity (other than a previously wholly owned subsidiary of such company), or
(iv) such company is dissolved and liquidated, or (b) more than 20% of such
company’s revenues (determined on a consolidated basis based on the regularly
prepared and publicly available statements of operations of such company
prepared in accordance with applicable accounting rules) for any fiscal year of
such company that ends during such Performance Period are attributable to the
operation of businesses other than such company’s airline business and such
company does not provide publicly available statements of operations with
respect to its airline business that are separate from the statements of
operations provided with respect to its other businesses.




VI.AWARD
PAYMENTS




6.1  Determinations
and Certification by the Committee.  As soon as
administratively feasible after the end of each LTIP Performance Period, and as
soon as administratively feasible after the end of each Fiscal Year in a Profit
Based RSU Performance Period, as the case may be, the Committee shall determine
whether the applicable Performance Target for such Performance Period has been
met (including, with respect to a Profit Based RSU Performance Period, the
Cumulative Profit Sharing Pool Target Level, if any, that has been achieved) and
whether any other material terms relating to the payment of the related Awards
have been satisfied.  As soon as administratively feasible on or
before each Specified Payment Date under Section 6.2(b), the Committee shall
determine whether the Cash Hurdle for any Cash Hurdle Measurement Date related
to such Specified Payment Date has been met.  The Committee’s
determination as to whether the applicable Performance Target for a Performance
Period, the Cash Hurdle for a Cash Hurdle Measurement Date and any other
material terms relating to the payment of the related Awards have been satisfied
shall be certified by the Committee in writing (including by electronic mail
transmission) and delivered to the Secretary of the Company.  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.  Notwithstanding the foregoing, each written
certification by the Committee (including a certification by electronic email
transmission) under this Section 6.1 shall be made by a date which will permit
the Company to comply with the time of payment requirements of Sections 6.2 and
6.3 (after giving effect to the provisions of Section 6.7).




6.2  Eligibility
for Payment of Awards.  Subject to the
delayed payment restrictions of Section 6.6, payments with respect to Awards
shall be made as follows:




(a)  LTIP
Awards.  Upon the Committee’s written certification in
accordance with Section 6.1 that the applicable LTIP Performance Target for an
LTIP Performance Period and any other material terms relating to the payment of
the related Awards have been satisfied, each Participant who has received an
Award with respect to the relevant Performance Period for which the related
Performance Target and other material terms have been satisfied, who has
remained continuously employed by the Company from the date he or she received
such Award until the last day of such Performance Period and who has not
surrendered such Award to the Company shall be entitled to the Payment Amount
applicable to such Participant’s Award for such Performance
Period.  Except as provided in Section 6.3(a) and Section 6.4(a), if a
Participant’s employment with the Company terminates for any reason whatsoever
prior to the last day of an LTIP Performance Period, then such Participant shall
not be entitled to receive any payment under the Program with respect to his or
her Award for such Performance Period, unless otherwise determined by the
Administrator or otherwise provided in the Participant’s employment agreement
with the Company.  Payment of the amount to which a Participant
becomes entitled pursuant to this Section 6.2(a) shall be made by the Company on
or before the 15th day of the third calendar month following the end of the
applicable Performance Period.




(b)  Profit Based RSU
Awards.  If the Committee certifies in writing in accordance
with Section 6.1 that a Profit Based RSU Performance Target has been achieved as
of the last day of a Fiscal Year in a Profit Based RSU Performance Period, then
each Participant who has received an Award with respect to such Performance
Period for which the related Performance Target and other material terms
(including the relevant Cash Hurdle for the Cash Hurdle Measurement Date) have
been satisfied shall receive the following payments with respect to the
achievement of such Performance Target as of the last day of such Fiscal Year,
provided that such Participant remains continuously employed by the Company from
the date he or she received such Award until the date of payment specified
below:




(i)           on
the First Specified Payment Date for such Fiscal Year, a payment in an amount
equal to (A) one third of the number of RSUs subject to such Award as of such
Specified Payment Date multiplied by (B) the
Profit Based RSU Payment Percentage applicable to the Cumulative Profit Sharing
Pool Target Level achieved at the end of such Fiscal Year multiplied by (C) the
Market Value per Share as of such First Specified Payment Date;




(ii)           on
the Second Specified Payment Date for such Fiscal Year, a payment in an amount
equal to (A) one third of the number of RSUs subject to such Award as of such
Specified Payment Date multiplied by (B) the
Profit Based RSU Payment Percentage applicable to the Cumulative Profit Sharing
Pool Target Level achieved at the end of such Fiscal Year multiplied by (C) the
Market Value per Share as of such Second Specified Payment Date;
and




(iii)           on
the Third Specified Payment Date for such Fiscal Year, a payment in an amount
equal to (A) one third of the number of RSUs subject to such Award as of such
Specified Payment Date multiplied by (B) the
Profit Based RSU Payment Percentage applicable to the Cumulative Profit Sharing
Pool Target Level achieved at the end of such Fiscal Year multiplied by (C) the
Market Value per Share as of such Third Specified Payment Date.




Notwithstanding
the foregoing, if the Cash Hurdle for the relevant Profit Based RSU Performance
Period has not been achieved as of an applicable Specified Payment Date set
forth above and been certified by the Committee in writing in accordance with
Section 6.1, then such Specified Payment Date shall be deferred and shall be
deemed to occur on the next annual anniversary date of the original Specified
Payment Date for which the Committee certifies in writing in accordance with
Section 6.1 that such Cash Hurdle was achieved; provided, however, that if such
Cash Hurdle is not so achieved on or before the first day of the 87th month
following the end of the Fiscal Year to which such Specified Payment Date
relates, then no payment shall be made under this Section 6.2(b) for such
Specified Payment Date with respect to the related Profit Based RSU
Award.  Except as provided in Section 6.3(b) and Section 6.4(b), if a
Participant’s employment with the Company terminates for any reason whatsoever
prior to a payment date specified in this Section 6.2(b), then such Participant
shall not be entitled to receive any payment with respect to his or her Profit
Based RSU Award for such payment date or for any subsequent payment date, unless
otherwise determined by the Administrator or otherwise provided in the
Participant’s employment agreement with the Company.




Notwithstanding
the preceding provisions of this Section 6.2(b) or the provisions of Sections
6.3(b) and 6.4(b), in no event shall the aggregate payments under the Program to
a Participant with respect to an RSU subject to a Profit Based RSU Award exceed
an amount equal to the Maximum Aggregate Payment Amount, if any, applicable to
such RSU.  To the extent that any payment provided under the Program
with respect to an RSU (determined without regard to the limitation described in
the preceding sentence) would, together with all prior payments made with
respect to such RSU, exceed the limitation described in the preceding sentence,
then such excess shall not be paid under the Program and the holder of such RSU
shall have no rights or entitlements to any such excess amount.




6.3  Death, Disability or
Retirement.




(a)           LTIP
Awards.  Except as provided in Section 6.4(a) and except as
specifically provided in a Participant’s employment agreement or retirement
agreement with the Company, if during an LTIP Performance Period with respect to
which a Participant has received an Award, such Participant dies or becomes
Disabled or Retires, then as to such Participant only (i) the Administrator,
with respect to each LTIP Performance Period that began prior to the date of
such Participant’s death, Disability or Retirement and which has not ended as of
such date, shall as promptly as practicable determine (based on publicly
available data with respect to each LTIP Performance Period that began prior to
the date of such Participant’s death, Disability or Retirement and which has not
ended as of such date) the Company’s EBITDAR Margin and the Entry EBITDAR Margin
through the most recent practicable date and the Company’s cash flow through the
most recent practicable date, and the Company’s resulting cash, cash equivalents
and short term investments, excluding restricted cash, cash equivalents and
short term investments at the most recent practicable date, and shall determine,
based on such data and publicly available data with respect to the companies
contained in the Industry Group (and, if deemed appropriate by the
Administrator, annualizing or otherwise making assumptions with respect to any
relevant data), whether the Company has achieved the relevant LTIP Performance
Target through such most recent practicable date (and if so, the LTIP
Performance Target shall be deemed to have been met, as to such Participant
only), and (ii) the provisions of Sections 6.1 and 6.2(a) shall cease to apply
with respect to each such Performance Period.  Except as provided in
Section 6.4(a) and except as specifically provided in a Participant’s employment
agreement or retirement agreement with the Company, with respect to each LTIP
Performance Period that began prior to the date of such Participant’s death,
Disability or Retirement and which has not ended as of such date with respect to
which the LTIP Performance Target has been satisfied in the manner described in
clause (i) of the preceding sentence, such Participant (or, in the case of
death, such Participant’s estate) shall (A) receive a payment from the Company,
within five business days after the determination by the Administrator referred
to in clause (i) of the foregoing sentence (but in no event later than March 15
of the calendar year following the calendar year in which occurred the
Participant’s death, Disability or Retirement), equal to the relevant Payment
Amount applicable to such Participant’s LTIP Award for such LTIP Performance
Period multiplied by 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 LTIP Performance Period and ending on the
date such Participant died, became Disabled or Retired, and the denominator of
which is the number of days in the entire LTIP Performance Period, and (B) not
be entitled to any additional payment under the Program with respect to such
LTIP Performance Period.




(b)           Profit Based RSU
Awards.  Except as provided in Section 6.4(b) and except as
specifically provided in a Participant’s employment agreement or retirement
agreement with the Company, if during a Profit Based RSU Performance Period with
respect to which a Participant has received an Award (or after such Performance
Period has ended but prior to the date such Participant has received all
payments to which such Participant may have otherwise been entitled to under
Section 6.2(b) if such Participant had continued to be employed by the Company),
such Participant dies or becomes Disabled or Retires, then, as to such
Participant only, such Participant shall receive a payment on the Applicable
Specified Payment Date (as defined below) in an amount equal to the aggregate
remaining individual payments (each, an “Individual Payment”) that such
Participant would have otherwise received with respect to such Award pursuant to
the provisions of Section 6.2(b) determined as if such Participant had remained
continuously employed by the Company until the applicable payment date and
assuming that the Cash Hurdle applicable to each such Individual Payment was
achieved at the earliest relevant time, except that:




(A)           each
such Individual Payment shall be multiplied by 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 the relevant
Profit Based RSU Performance Period and ending on the date such Participant
died, became Disabled or Retired, and the denominator of which is the number of
days in the period beginning on the first day of the relevant Profit Based RSU
Performance Period and ending on the earliest date after the date such
Participant died, became Disabled or Retired as of which payment of such
Individual Payment could have been made under Section 6.2(b) (determined based
upon the assumption that the Cash Hurdle applicable to such payment was
satisfied); and




(B)           no
payments shall be made to or for the benefit of such Participant with respect to
any Profit Based RSU Performance Target that is achieved with respect to a
Fiscal Year that begins after the date of such Participant’s death, Disability
or Retirement.




For
purposes of the preceding sentence, the “Applicable Specified Payment Date”
means, with respect to each relevant Profit Based RSU Performance Period, the
Specified Payment Date next occurring (and for which the Cash Hurdle was
actually achieved) with respect to such Performance Period after the Fiscal Year
in which the Participant died, became Disabled or Retired.




Notwithstanding
the foregoing, except as specifically provided in a Participant’s employment
agreement or retirement agreement with the Company, (1) if a Change in Control
occurs after the date of such Participant’s death, Disability or Retirement,
then each payment to which such Participant may still be entitled to pursuant to
the preceding provisions of this Section 6.3(b) as of the date of such Change in
Control that has not previously been paid to such Participant shall be paid to
such Participant within five business days after the date of such Change in
Control, and (2) each such payment shall be determined in the manner described
in such provisions, except that the amount of such payment shall be based on the
Market Value per Share as of the date of such Change in Control (rather than as
of the date specified in Section 6.2(b)).




6.4  Change in
Control.




(a)  LTIP
Awards.  Upon the occurrence of a Change in Control, with
respect to each Participant who is employed by the Company on the day
immediately preceding the date of such Change in Control, (i) the LTIP
Performance Targets, including achievement of the Stretch EBITDAR Margin, for
each relevant Performance Period that began prior to the date of such Change in
Control and which has not ended as of such date shall be deemed to have been
satisfied, and (ii) the provisions of Sections 6.1, 6.2(a) and 6.3(a) shall
cease to apply with respect to each such Performance Period.




If a
Change in Control occurs during an LTIP Performance Period, then, on or before
the Applicable Payment Date (as defined below) following the end of each
calendar year in such LTIP Performance Period ending on or after the date of
such Change in Control, each Retirement Eligible Participant (as defined below)
with respect to such calendar year who has received an LTIP Award with respect
to such LTIP Performance Period shall receive a payment from the Company equal
to (i) the Payment Amount applicable to such Participant’s LTIP Award for such
LTIP Performance Period (determined as if such Participant had Retired on the
last day of such calendar year) multiplied by 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 LTIP
Performance Period and ending on the last day of such calendar year, and the
denominator of which is the number of days in the entire LTIP Performance
Period, minus (ii) the aggregate payments, if any, made to such Participant
pursuant to this paragraph with respect to prior calendar years.  For
purposes of the preceding sentence, (A) the “Applicable Payment Date” with
respect to a calendar year shall mean the fifteenth day of the third calendar
month following the end of such year (or, in the case of the last calendar year
in an LTIP Performance Period, such term shall mean the fifth business day after
the end of such year), and (B) a Participant shall be considered a “Retirement
Eligible Participant” with respect to a calendar year if such Participant was
eligible to Retire during such year and did not suffer a Qualifying Event, die,
become Disabled or Retire during such year.




If a
Change in Control occurs and on the date thereof or thereafter during an LTIP
Performance Period described in the first paragraph of this Section 6.4(a) a
Participant who has received an LTIP Award with respect to such LTIP Performance
Period suffers a Qualifying Event or subsequent to the Change in Control dies,
becomes Disabled, or Retires, then, with respect to each such LTIP Performance
Period, such Participant (or, in the case of death, such Participant’s estate)
shall (i) within five business days after the occurrence of the Qualifying
Event, death, Disability or Retirement, receive a payment from the Company equal
to (A) the Payment Amount applicable to such Participant’s LTIP Award for such
LTIP Performance Period multiplied by 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 LTIP Performance Period
and ending on the date such Participant died, became Disabled, Retired or
suffered the Qualifying Event, and the denominator of which is the number of
days in the entire LTIP Performance Period, minus (B) the aggregate payments, if
any, made or payable to such Participant pursuant to the second paragraph of
this Section 6.4(a) with respect to calendar years that ended prior to the date
of such Participant’s Qualifying Event, death, Disability or Retirement, and
(ii) not be entitled to any additional payment under the Program with respect to
such LTIP Performance Period (other than any unpaid amount owed to such
Participant pursuant to the second paragraph of this Section 6.4(a) with respect
to a calendar year that ended prior to the date of such Participant’s Qualifying
Event, death, Disability or Retirement).




If a
Change in Control occurs and a Participant who has received an Award with
respect to an LTIP Performance Period described in the first paragraph of this
Section 6.4(a) did not die, become Disabled, Retire or suffer a Qualifying Event
during such Performance Period and such Participant remained continuously
employed by the Company from the date he or she received such Award until the
last day of such Performance Period, then, with respect to each such Performance
Period, such Participant shall receive a payment from the Company within five
business days after the last day of such Performance Period in an amount equal
to (i) the Payment Amount applicable to such Participant’s Award for such
Performance Period, minus (ii) the aggregate payments, if any, made or payable
to such Participant pursuant to the second paragraph of this Section 6.4(a) with
respect to such Award.




(b)           Profit Based RSU
Awards.  Upon the occurrence of a Change in Control, (i) the
Cash Hurdle for each Profit Based RSU Performance Period that began prior to the
date of such Change in Control and for which a potential for payment under
Sections 6.2(b) or 6.3(b) exists as of the date of such Change in Control shall
be deemed to have been satisfied, and (ii) the Profit Based RSU Performance
Targets for each Profit Based RSU Performance Period that began prior to the
date of such Change in Control and which has not ended as of such date shall be
deemed to have been satisfied for the Fiscal Year in which the Change in Control
occurs at the Cumulative Profit Sharing Pool Target Level established by the
Committee for purposes of this Section 6.4(b) at the time of grant of the
related Award (provided that this clause (ii) shall not be applicable with
respect to any such Profit Based RSU Performance Period if such Profit Based RSU
Performance Target was satisfied in a Fiscal Year that ended prior to the Fiscal
Year in which such Change in Control occurs at such Cumulative Profit Sharing
Pool Target Level or a higher level).  Notwithstanding any provision
in the Program to the contrary, upon the occurrence of a Change in Control, no
Profit Based RSU Performance Target may be achieved with respect to a Fiscal
Year that begins after the date of such Change in Control, and no payments shall
be made to or for the benefit of any Participant with respect to any Profit
Based RSU Performance Target that would have otherwise been achieved for any
such Fiscal Year.




If a
Change in Control occurs, then the provisions of Sections 6.2(b) and 6.3(b)
shall continue to apply to the Profit Based RSU Performance Periods described in
the preceding paragraph with the following modifications:




(i)           certification
by the Committee under Section 6.1 of the achievement of the relevant Profit
Based RSU Performance Target and Cash Hurdle shall not be required;




(ii)           the
Payment Amount described in Section 6.2(b) as of each applicable Specified
Payment Date that occurs after the date of such Change in Control shall be based
on the Market Value per Share as of the date of such Change in Control (rather
than the Market Value per Share as of such Specified Payment Date);
and




(iii)           if
on or after the occurrence of such Change in Control and prior to receiving all
payments pursuant to Section 6.2(b) with respect to such Profit Based RSU
Performance Periods a Participant who has received a Profit Based RSU Award with
respect to such Profit Based RSU Performance Periods suffers a Qualifying Event
or subsequent to the Change in Control dies, becomes Disabled, or Retires, then
such Participant (or, in the case of death, such Participant’s estate) shall (A)
within five business days after the occurrence of the Qualifying Event, death,
Disability or Retirement, receive a payment from the Company equal to the
aggregate of such remaining Payment Amounts, and (B) not be entitled to any
additional payment under the Program with respect to such Payment Amounts;
provided, however, that if a Participant who has received a Profit Based RSU
Award with respect to such Profit Based RSU Performance Periods is eligible to
Retire as of the date of such Change in Control or continues in employment with
the Company after such Change in Control until the date such Participant first
becomes eligible to Retire, and if such Participant does not suffer a Qualifying
Event, die, become Disabled or Retire prior to such Participant’s Applicable
Retirement Date (as defined below), then the payments described in the preceding
provisions of this clause (iii) shall not be made following such Participant’s
Retirement as provided above, but, rather, shall be made on or before the March
15 that next follows such Participant’s Applicable Retirement Date.




For
purposes of clause (iii) of the preceding sentence, a Participant’s “Applicable
Retirement Date” is the date that is five business days before March 15 of the
calendar year next following the later of (x) the calendar year in which such
Change in Control occurs or (y) the calendar year in which such Participant
first became eligible to Retire.




6.5  Form of
Payment of Awards.  All payments to
be made under the Program to a Participant with respect to an Award shall be
paid in a single lump sum payment in cash; provided, however, that, to the
extent permitted and subject to any limitations under the Incentive Plan 2010
and applicable laws and securities exchange rules, the Committee may, in its
sole discretion, direct that payment of Profit Based RSU Awards be made either
(a) in shares of Company Stock, but if and only if at the time of payment the
Company has an effective registration statement under the Securities Act of
1933, as amended, covering the issuance of Company Stock under the Program, or
(b) in a combination of cash and/or shares of Company Stock.  If the
Committee elects to direct the Company to pay all or a portion of a payment due
for Profit Based RSU Awards in shares of Company Stock, then the number of
shares of Company Stock shall be determined by multiplying (i) one third of the
number of RSUs subject to such Award that are to be so paid in Company Stock by
(ii) the Profit Based RSU Payment Percentage applicable to the Cumulative Profit
Sharing Pool Target Level achieved with respect to the payment to be made in
shares on the Specified Payment Date, rounding such number of shares down to the
nearest whole share.  Notwithstanding the preceding provisions of this
Section 6.5, if a payment to be made under the Program to a Participant with
respect to a Profit Based RSU Award is limited due to the application of the
Program limitations relating to the Maximum Aggregate Payment Amount, then such
payment may not be made in shares of Company Stock.




6.6  Delayed
Payment Restriction.  With respect to a
Participant who is identified as a specified employee (within the meaning of
section 409A(a)(2)(B)(i) of the Code and as determined by the Company in
accordance with any of the methods permitted under the regulations issued under
section 409A of the Code) and who is to receive a payment hereunder (which
payment is not a “short-term deferral” for purposes of section 409A of the Code)
on account of such Participant’s separation from service (within the meaning of
section 409A(a)(2)(A)(i) of the Code and applicable administrative guidance
thereunder, but excluding a separation from service by reason of death or
Disability), the payment to such Participant shall not be made prior to the
earlier of (a) the date that is six months after the Participant’s termination
of employment or (b) the date of death of the Participant.  In such
event, any payment to which the Participant would have otherwise been entitled
during the first six months following the Participant’s termination of
employment (or, if earlier, prior to the Participant’s date of death) shall be
accumulated and paid in the form of a single lump sum payment to the Participant
on the date that is six months after the Participant’s termination of employment
or to the Participant’s estate on the date of the Participant’s death, as
applicable.




6.7  Time of
Payment Obligations.  Any obligation
hereunder to make a payment on a specified date shall be deemed to have been
satisfied in the event that such payment is made within five business days after
such specified date; provided, however, that, with respect to a payment that is
intended to qualify as a “short-term deferral” under section 409A of the Code,
in no event shall such payment be made later than the date required in order for
such payment to so qualify.




VII.TERMINATION AND AMENDMENT OF
PROGRAM




7.1  Termination
and Amendment.  Subject to the
terms of this Section 7.1, the Committee may amend the Program at any time and
from time to time, and the Committee may at any time terminate the Program (in
its entirety or as it applies to one or more specified Subsidiaries) with
respect to Performance Periods that have not commenced as of the date of such
Committee action; provided, however, that, (a) except as provided in the
following sentence, the Program may not be amended in a manner that would impair
the rights of any Participant with respect to any outstanding Award without the
consent of such Participant, and (b) to the extent required by section 409A of
the Code, the Program may not be amended or terminated in a manner that would
give rise to an impermissible acceleration of the time or form of a payment of a
benefit under the Program pursuant to section 409A(a)(3) of the Code and any
regulations or guidance issued thereunder.  Notwithstanding anything
in the Program or an Award Notice to the contrary, if the Committee determines
that the terms of the Program and/or any Award Notice do not, in whole or in
part, satisfy the requirements of section 409A of the Code (or the requirements
for an exemption to the application of section 409A of the Code), then the
Committee, in its sole discretion, may unilaterally modify the Program and any
such Award Notice in such manner as it deems appropriate to comply with such
section and any regulations or guidance issued thereunder (or to qualify for an
exemption to the application of such section).  No Participant’s
participation herein may be terminated in contemplation of or in connection with
a Change in Control.  The Program may not be amended or 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 6.4 of the Program (as in effect on the date of the adoption of the
Program by the Committee) with respect to such Change in Control shall be made
in connection with any such amendment or termination.  The Committee
shall remain in existence after the termination of the Program for the period
determined necessary by the Committee to facilitate the termination of the
Program and the payment of any outstanding Awards hereunder, and all provisions
of the Program that are necessary, in the opinion of the Committee, for
equitable operation of the Program during such period shall remain in
force.




VIII.MISCELLANEOUS
PROVISIONS




8.1  No Effect
on Employment Relationship.  Except as
expressly provided otherwise herein, for all purposes of the Program, a
Participant shall be considered to be in the employment of the Company as long
as he or she has not incurred a separation from service with the Company and its
affiliates within the meaning of section 409A(a)(2)(A)(i) of the Code and
applicable administrative guidance issued thereunder; provided, however, that
whether such a separation from service has occurred shall be determined based
upon a reasonably anticipated permanent reduction in the level of bona fide
services to be performed to no more than 20% (or 49% if the Participant will no
longer serve as an officer of the Company) of the average level of bona fide
services provided in the immediately preceding 36 months.  Nothing in
the adoption of the Program, the grant of Awards, or the payment of amounts
under the Program shall confer on any person the right to continued employment
by the Company or any Subsidiary or affect in any way the right of the Company
(or a Subsidiary, if applicable) to terminate such employment at any
time.  Unless otherwise provided in a written employment agreement,
the employment of each Participant shall be on an at-will basis, and the
employment relationship may be terminated at any time by either the Participant
or the Participant’s employer for any reason whatsoever, with or without
cause.  Any question as to whether and when there has been a
termination of a Participant’s employment for purposes of the Program, and the
reason for such termination, shall be determined solely by and in the discretion
of the Administrator, and its determination shall be final, binding, and
conclusive on all parties.




8.2  Prohibition
Against Assignment or Encumbrance.  No 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 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 an Award shall be payable only to
the Participant (or (a) in the event of a Disability that renders such
Participant incapable of conducting his or her own affairs, any payment due
under the Program to such Participant shall be made to his or her duly appointed
legal representative and (b) 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
Administrator shall comply with the terms of any qualified domestic relations
order (as defined in the Incentive Plan 2010) providing for the transfer or
assignment of all or any portion of a Participant’s interest under the
Program.  The provisions of the Program shall be binding on all
successors and permitted 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.




8.3  Unfunded,
Unsecured Program.  The Program shall
constitute an unfunded, unsecured obligation of the Company to make payments of
incentive compensation to certain individuals from its general assets in
accordance with the Program.  Each Award granted under the Program
merely constitutes a mechanism for measuring such incentive compensation and
does not constitute a property right or interest in the Company, any Subsidiary,
or any of their assets.  Neither the establishment of the Program, the
granting of Awards, nor any other action taken in connection with the Program
shall be deemed to create an escrow or trust fund of any kind.




8.4  No Rights
of Participant.  No Participant
shall have any security or other interest in any assets of the Company or any
Subsidiary or in Company Stock as a result of participation in the Program
(except after payment thereof to the Participant).  Participants and
all persons claiming under Participants shall rely solely on the unsecured
promise of the Company set forth herein, and nothing in the Program, an Award or
an Award Notice shall be construed to give a Participant or anyone claiming
under a Participant any right, title, interest, or claim in or to any specific
asset, fund, entity, reserve, account, or property of any kind whatsoever owned
by the Company or any Subsidiary or in which the Company or any Subsidiary may
have an interest now or in the future; but each Participant shall have the right
to enforce any claim hereunder in the same manner as a general
creditor.  Neither the establishment of the Program nor participation
hereunder shall create any right in any Participant to make any decision, or
provide input with respect to any decision, relating to the business of the
Company or any Subsidiary.




8.5  Tax
Withholding.  The Company and
the Subsidiaries shall deduct and withhold, or cause to be withheld, from a
Participant’s payment, including the delivery of Company Stock, made under the
Program, or from any other payment to such Participant, an amount necessary to
satisfy any and all tax withholding obligations arising under applicable local,
state, federal, or foreign laws associated with such payment.  The
Company and the Subsidiaries may take any other action as may in their opinion
be necessary to satisfy all obligations for the payment and withholding of such
taxes.




8.6  No Effect
on Other Compensation Arrangements.  Nothing contained
in the Program or any Participant’s Award or Award Notice shall prevent the
Company or any Subsidiary from adopting or continuing in effect other or
additional compensation arrangements affecting any
Participant.  Nothing in the Program shall be construed to affect the
provisions of any other compensation plan or program maintained by the Company
or any Subsidiary.




8.7  Subsidiaries.  The Company may
require any Subsidiary employing a Participant to assume and guarantee the
Company’s obligations hereunder to such Participant, either at all times or
solely in the event that such Subsidiary ceases to be a Subsidiary.




8.8  Governing
Law.  The Program shall
be construed in accordance with the laws of the State of Texas.