Document:

fexh1012a.htm

    
      
        

      

      Exhibit 10.12(a)

      Non-Employee
Director

      Option
Grant Document

      

      Pursuant
to the

      Continental
Airlines, Inc. Incentive Plan 2010 (the “Plan”)

      

      If
the Holder accepts this Option, the Holder agrees to be bound by all of the
terms, provisions, conditions and limitations of the Plan and this Option Grant
Document.

      

      In
addition to any electronic confirmation and/or acceptance procedures established
for this Option Grant Document, any exercise of this Option shall evidence
Holder’s acceptance of the terms, provisions, conditions and limitations of the
Plan and this Option Grant Document.

      

      The
Plan is hereby incorporated by reference into this Option Grant Document.
Capitalized terms used but not defined herein shall have the meanings ascribed
thereto in the Plan.

      

      1. Grant of
Option.  The Holder has
been granted an Option pursuant to the terms of this Option Grant Document (and
under and subject to the terms of the Plan) to purchase shares of Common Stock
of the Company.  The number of shares of Common Stock (“Shares”)
subject to this Option Grant Document and the date of grant (“Grant Date”) are
as set forth in the records of the Company and as communicated to the Holder by
the Company directly or through the systems (which may include online systems)
of a third party administrator engaged by the Company for such purpose and
available for review by Holder in connection with this Option Grant
Document.  In the event of any conflict between any communications to
the Holder by the Company, the records of any third party administrator, and the
records of the Company (including the approval by the Administrator of the
Company’s stock option grant policy for non-employee Directors), the records of
the Company shall control.  The Shares, when issued to the Holder upon
the exercise of the Option, shall be fully paid and nonassessable. The Option is
not intended to qualify as an Incentive Stock Option.  [Notwithstanding
the foregoing or any other provision of this Option Grant Document, this Option
is subject to approval of the Plan by the stockholders of the Company and shall
terminate if the Plan is not approved by the stockholders of the Company at the
Company’s 2010 annual meeting of stockholders.]

      

      2.           Option
Term.  Subject
to earlier termination as provided herein, the Option shall terminate on the
tenth anniversary of the Grant Date.  The period during which the
Option is in effect is referred to as the “Option Period.”

      

      3.           Option
Price.  The
grant price or exercise price (the “Option Price”) of the Shares subject to the
Option shall be equal to the Market Value per Share on the Grant
Date.

      

      4.           Vesting.  [for
options awarded prior to stockholder approval: The total number of Shares
subject to this Option shall vest immediately upon the later of (i) the Grant
Date and (ii) the date that the Plan is approved by the stockholders of the
Company.]  [for
options awarded after stockholder approval:  The total number of
Shares subject to this Option shall vest immediately upon the Grant
Date.]  The vested Shares that may be acquired under the Option may be
purchased at any time after they become vested, in whole or in part, during the
Option Period.

      

      5.           Method of
Exercise and Payment.  The
Option or a portion thereof may be exercised by delivery of an irrevocable
notice to the Company (or, if applicable, to a third party administrator engaged
by the Company to perform services for the Company with respect to the Plan)
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 the Company, (ii) in nonforfeitable, unrestricted
shares of the Company’s Common Stock owned by Holder at the time of exercise of
the Option having an aggregate market value (measured by the Market Value per
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 Holder, and to the extent permitted by applicable
law and subject to Paragraph 13, 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 Holder, shall pay to the Company the exercise price of the Options
being exercised, and the Company, pursuant to an irrevocable notice from Holder,
shall promptly after receipt of the exercise price deliver the shares being
purchased to such firm.  Holder acknowledges and agrees that the
Company may provide personal information about Holder and information concerning
the Option or any other Award under the Plan to any third party engaged by the
Company to provide administrative or brokerage services relating to the
Plan.

      

      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 Holder’s service on the Board for any
reason and (ii) the expiration of the Option Period.

      

      7.           No Rights
in Shares.  Holder
shall have no rights as a stockholder in respect of Shares until such Holder
becomes the holder of record of such Shares.

      

      8.           Certain
Restrictions.  By
exercising the Option, Holder 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”), Holder will acquire
the Shares for Holder’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 Holder 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 Grant Document.

      

      9.           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.

      

      10.           Nontransferability
of Option.  The
Option granted pursuant to this Option Grant Document 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 Holder’s
lifetime only by Holder or by Holder’s guardian or Personal
Representative.  No right or benefit hereunder shall in any manner be
liable for or subject to any debts, contracts, liabilities, or torts of
Holder.

      

      11.           Amendment
and Termination; Electronic Procedures.  No
amendment or termination of the Option shall be made by the Board or the
Administrator at any time without the written consent of Holder.  No
amendment or termination of the Plan will adversely affect the rights,
privileges and option of Holder under the Option without the written consent of
Holder.  Holder hereby consents and agrees to electronic delivery of
any Plan documents, proxy materials, annual reports and other related documents.
Holder consents to electronic delivery, review, confirmation and acceptance
procedures with respect to this Option Grant Document and the
Option.  Holder agrees that his or her electronic signature is the
same as, and shall have the same force and effect as, his or her manual
signature.  Holder consents and agrees that any such electronic
procedures may be effected by a third party engaged by the Company to provide
administrative services related to the Plan, including any program adopted under
the Plan.

      

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

      

      13.           Withholding
of Taxes.  Company shall have the right to (i) make deductions
from any settlement or exercise of an Option granted under the Plan, including
the delivery of shares, or require shares or cash or both be withheld from any
Option, in each case in an amount sufficient to satisfy withholding of any taxes
required by law, or (ii) take any other action as may be necessary or
appropriate to satisfy any such tax withholding obligations.

      

      14.           No
Guarantee of Tax Consequences.  Neither the Company nor any
subsidiary nor the Administrator makes any commitment or guarantee that any
federal, state, local or foreign tax treatment will apply or be available to any
person eligible for benefits under the Option.

      

      15.           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.

      

      16.           Governing
Law.  The Plan
and the Option shall be construed in accordance with the laws of the State of
Texas, without regard to conflicts of laws principles
thereof.fexhibit1013.htm

    
      

    

    Exhibit
10.13

     

    CONTINENTAL
AIRLINES, INC.

     

    ANNUAL
EXECUTIVE
INCENTIVE PROGRAM

     

    

     

    1.           Purpose.  This
Continental Airlines, Inc. Annual Executive Incentive 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 officers of the Company and its subsidiaries and to compensate such officers
based on performance measures based upon pre-tax income 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
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.

     

    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 under the Incentive Plan 2010.  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 the Program, they shall have the
respective meanings set forth below, unless the context clearly indicates to the
contrary:

     

    
      	
               
      

            	
              (a)

            	
              “Annual
      Incentive Payment” 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) zero percent (0%), if
      the Pre-tax Income with respect to such fiscal year is less than the Entry
      Level Pre-tax Income with respect to such fiscal year, or (2) fifty
      percent (50%) if the Pre-tax Income with respect to such fiscal year is at
      least equal to the Entry Level Pre-tax Income with respect to such fiscal
      year, and (if the Pre-tax Income with respect to such fiscal year exceeds
      the Entry Level Pre-tax Income with respect to such fiscal year) an
      additional Target Incentive Percentage (or prorated portion thereof) for
      each million dollars (or portion thereof) that the Pre-tax Income with
      respect to such fiscal year exceeds the Entry Level Pre-tax Income with
      respect to such fiscal year, up to and including the Target Level Pre-tax
      Income with respect to such fiscal year, and (if the Pre-tax Income with
      respect to such fiscal year exceeds the Target Level Pre-tax Income with
      respect to such fiscal year) an additional Stretch Incentive Percentage
      (or prorated portion thereof) for each million dollars (or portion
      thereof) that the Pre-tax Income with respect to such fiscal year exceeds
      the Target Level Pre-tax Income with respect to such fiscal year, up to
      and including the Stretch Level Pre-tax Income with respect to such fiscal
      year.

            

    

     

    
      	
               
      

            	
              (b)

            	
              “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 the
      Program).

            

    

     

    
      	
               
      

            	
              (c)

            	
              “Cash
      Hurdle” means, with respect to a fiscal year, 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
      applicable accounting rules, is equal to or greater than the dollar amount
      established by the Committee as the Cash Hurdle with respect to such
      fiscal year as provided in Section 5
hereof.

            

    

     

    
      	
               
      

            	
              (d)

            	
              “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.

            

    

     

    
      	
               
      

            	
              (e)

            	
              “Entry
      Level Pre-tax Income” with respect to a fiscal year means the amount
      established by the Committee as the Entry Level Pre-tax Income with
      respect to such fiscal year pursuant to Section 5
  hereof.

            

    

     

    
      	
               
      

            	
              (f)

            	
              “Pre-tax
      Income” means, with respect to each fiscal year, the consolidated income
      before taxes but after minority interest (as computed using net income
      (loss) before taxes) of the Company for such fiscal year as shown on the
      Company’s consolidated financial statements for such fiscal year, but
      calculated excluding any special, unusual or non-recurring items as
      determined by the Committee in accordance with applicable accounting
      rules.

            

    

     

    
      	
               
      

            	
              (g)

            	
              “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 pursuant to Section 5
  hereof.

            

    

     

    
      	
               
      

            	
              (h)

            	
              “Stretch
      Level Pre-tax Income” with respect to a fiscal year means the amount
      established by the Committee as the Stretch Level Pre-tax Income with
      respect to such fiscal year pursuant to Section 5
  hereof.

            

    

     

    
      	
               
      

            	
              (i)

            	
              “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 pursuant to Section 5
  hereof.

            

    

     

    
      	
               
      

            	
              (j)

            	
              “Target
      Level Pre-tax Income” with respect to a fiscal year means the amount
      established by the Committee as the Target Level Pre-tax Income with
      respect to such fiscal year pursuant to Section 5
  hereof.

            

    

     

    4.           Annual Incentive
Payments.  Each Participant in the Program who has remained
continuously employed by the Company or a subsidiary during an entire fiscal
year covered by the Program shall receive, as soon as reasonably practicable
after the certification by the Committee described in Section 5 below with
respect to such fiscal year (but in no event later than the 15th day of the
third month following the end of such fiscal year), a cash payment with respect
to such fiscal year equal to the Annual Incentive Payment, if any, for such
Participant with respect to such fiscal year; provided that the Cash Hurdle for
such fiscal year has been achieved (and if such Cash Hurdle has not been
achieved, then no Annual Incentive Payment shall be payable with respect to such
fiscal year).  If a person becomes a Participant after the first day
of a fiscal year, then (a) such Participant’s Annual Incentive Payment, if any,
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 (b) 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, within 90 days
after the beginning of each fiscal year of the Company beginning on or after
January 1, 2010, establish in writing the Entry Level Pre-tax Income, the Target
Level Pre-tax Income, the Stretch Level Pre-tax Income, the Target Incentive
Percentage, the Stretch Incentive Percentage, and the Cash Hurdle for such
fiscal year for purposes of the Program, in each case 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.

     

    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 during which the
Program is effective (but in no event later than the time which will permit the
Company to pay any required Annual Incentive Payment for such fiscal year within
the time period prescribed in Section 4 above), the Committee shall certify in
writing (including by electronic mail transmission), prior to the payment of any
Annual Incentive Payment with respect to such fiscal year, whether the
performance goals set forth herein have been met and whether any other material
terms relating to the payment of such Annual Incentive Payment 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 and on the date thereof
or thereafter 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 Incentive Payment
payable to such Participant with respect to such Change Year (calculated as if
the Stretch Level Pre-tax Income and the Cash Hurdle 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 Incentive Payment
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 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 unable to perform, the
material duties and services required of him in his 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,
the Program may be amended from time to time or terminated by the Committee;
provided that the 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
connection with a Change in Control, unless adequate and effective provision for
the making of all payments otherwise payable pursuant to Section 6 of the
Program (as in effect on the date of the adoption of the 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 incentive 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 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.

     

    No
incentive payment 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 incentive payment, 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.  Incentive payments 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 such Participant’s
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 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 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.

     

    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
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.           Effective Date.  The
Program shall be effective as of the date of its adoption by the Committee and
shall be applicable to fiscal years of the Company beginning on or after January
1, 2010.

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