View:
As filed with the Securities and Exchange Commission on
June 19, 1998.
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
CONTINENTAL AIRLINES, INC.
(Exact name of Registrant as specified in its charter)
Delaware 74-2099724
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
2929 Allen Parkway
Houston, Texas 77019
(Address of principal executive offices)
(Zip Code)
______________
CONTINENTAL AIRLINES, INC.
1998 STOCK INCENTIVE PLAN
(Full title of the plan)
Jeffery A. Smisek
Executive Vice President and
General Counsel
Continental Airlines, Inc.
2929 Allen Parkway, Suite 2010
Houston, Texas 77019
(Name and address of agent for service)
(713) 834-2950
(Telephone number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
Proposed Proposed
Title of maximum maximum
Securities Amount offering aggregate Amount of
to be to be price per offering registration
registered registered share (1) price (1) fee
Class B Common 5,500,000 $58.625 $322,437,500 $95,120
Stock, par
value $.01
per share
(1) Estimated solely for the purpose of calculating the
registration fee which, pursuant to Rule 457(c), is based on the
average of the high and low prices of the Class B Common Stock
reported on the New York Stock Exchange on June 15, 1998.
Part II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents filed with the Securities and
Exchange Commission (File No. 0-9781) are incorporated herein by
reference: (i) the Company's Annual Report on Form 10-K for the
year ended December 31, 1997, (ii) the description of Class B
common stock contained in the Company's registration statement
(Registration No. 0-21542) on Form 8-A, and any amendment or report
filed for the purpose of updating such description, (iii) the
Company's Quarterly Report on Form 10-Q for the quarter ended March
31, 1998 and (iv) the Company's Current Reports on Form 8-K dated
January 25, 1998, March 3, 1998 and March 6, 1998.
All documents subsequently filed by the Company pursuant
to Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), prior to the filing
of a post-effective amendment which indicates that all securities
offered hereby have been sold or which deregisters all securities
remaining unsold, shall be deemed to be incorporated by reference
herein and to be a part hereof from the date of the filing of such
documents.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
Certain legal matters with respect to the Class B common
stock offered hereby are being passed upon by Jeffery A. Smisek,
Executive Vice President and General Counsel of the Company. Mr.
Smisek, as an employee of the Company, is eligible to receive
grants under the Continental Airlines, Inc. 1998 Stock Incentive
Plan.
Item 6. Indemnification of Directors and Officers.
The Company's Restated Certificate of Incorporation (the
"Certificate of Incorporation") and bylaws provide that the Company
will indemnify each of its directors and officers to the full
extent permitted by the laws of the State of Delaware and may
indemnify certain other persons as authorized by the Delaware
General Corporation Law (the "GCL"). Section 145 of the GCL
provides as follows:
"(a) A corporation may indemnify any person who was
or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (other
than an action by or in the right of the corporation) by reason of
the fact that he is or was a director, officer, employee or agent
of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by him
in connection with such action, suit or proceeding if he acted in
good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the corporation, and, with respect
to any criminal action or proceeding, had no reasonable cause to
believe his conduct was unlawful. The termination of any action,
suit or proceeding by judgment, order, settlement, conviction, or
upon a plea of nolo contendere or its equivalent, shall not, of
itself, create a presumption that the person did not act in good
faith and in a manner which he reasonably believed to be in or not
opposed to the best interests of the corporation, and, with respect
to any criminal action or proceeding, had reasonable cause to
believe that his conduct was unlawful.
(b) A corporation may indemnify any person who was or
is a party or is threatened to be made a party to any threatened,
pending or completed action or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the
fact that he is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise
against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and in
a manner he reasonably believed to be in or not opposed to the best
interests of the corporation and except that no indemnification
shall be made in respect of any claim, issue or matter as to which
such person shall have been adjudged to be liable to the
corporation unless and only to the extent that the Court of
Chancery or the court in which such action or suit was brought
shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such
person is fairly and reasonably entitled to indemnity for such
expenses which the Court of Chancery or such other court shall deem
proper.
(c) To the extent that a director, officer, employee
or agent of a corporation has been successful on the merits or
otherwise in defense of any action, suit or proceeding referred to
in subsections (a) and (b) of this section, or in defense of any
claim, issue or matter therein, he shall be indemnified against
expenses (including attorneys' fees) actually and reasonably
incurred by him in connection therewith.
(d) Any indemnification under subsections (a) and (b)
of this section (unless ordered by a court) shall be made by the
corporation only as authorized in the specific case upon a
determination that indemnification of the director, officer,
employee or agent is proper in the circumstances because he has met
the applicable standard of conduct set forth in subsections (a) and
(b) of this section. Such determination shall be made (1) by a
majority vote of the directors who are not parties to such action,
suit or proceeding, even though less than a quorum, or (2) if there
are no such directors, or if such directors so direct, by
independent legal counsel in a written opinion, or (3) by the
stockholders.
(e) Expenses (including attorneys' fees) incurred by
an officer or director in defending any civil, criminal,
administrative, or investigative action, suit or proceeding may be
paid by the corporation in advance of the final disposition of such
action, suit or proceeding upon receipt of an undertaking by or on
behalf of such director or officer to repay such amount if it shall
ultimately be determined that he is not entitled to be indemnified
by the corporation as authorized in this section. Such expenses
(including attorneys' fees) incurred by other employees and agents
may be so paid upon such terms and conditions, if any, as the board
of directors deems appropriate.
(f) The indemnification and advancement of expenses
provided by, or granted pursuant to, the other subsections of this
section shall not be deemed exclusive of any other rights to which
those seeking indemnification or advancement of expenses may be
entitled under any bylaw, agreement, vote of stockholders or
disinterested directors or otherwise, both as to action in his
official capacity and as to action in another capacity while
holding such office.
(g) A corporation shall have power to purchase and
maintain insurance on behalf of any person who is or was a
director, officer, employee or agent of the corporation, or is or
was serving at the request of the corporation as a director,
officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise against any liability
asserted against him and incurred by him in any such capacity, or
arising out of his status as such, whether or not the corporation
would have the power to indemnify him against such liability under
this section.
(h) For purposes of this section, references to "the
corporation" shall include, in addition to the resulting
corporation, any constituent corporation (including any constituent
of a constituent) absorbed in a consolidation or merger which, if
its separate existence had continued, would have had power and
authority to indemnify its directors, officers, and employees or
agents, so that any person who is or was a director, officer,
employee or agent of such constituent corporation, or is or was
serving at the request of such constituent corporation as a
director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, shall stand
in the same position under this section with respect to the
resulting or surviving corporation as he would have with respect to
such constituent corporation if its separate existence had
continued.
(i) For purposes of this section, references to
"other enterprises" shall include employee benefit plans;
references to "fines" shall include any excise taxes assessed on a
person with respect to an employee benefit plan; and references to
"serving at the request of the corporation" shall include any
service as a director, officer, employee or agent of the
corporation which imposes duties on, or involves services by, such
director, officer, employee or agent with respect to an employee
benefit plan, its participants or beneficiaries; and a person who
acted in good faith and in a manner he reasonably believed to be in
the interest of the participants and beneficiaries of an employee
benefit plan shall be deemed to have acted in a manner "not opposed
to the best interests of the corporation" as referred to in this
section.
(j) The indemnification and advancement of expenses
provided by, or granted pursuant to, this section shall, unless
otherwise provided when authorized or ratified, continue as to a
person who has ceased to be a director, officer, employee or agent
and shall inure to the benefit of the heirs, executors and
administrators of such a person.
(k) The Court of Chancery is hereby vested with
exclusive jurisdiction to hear and determine all actions for
advancement of expenses or indemnification brought under this
section or under any bylaw, agreement, vote of stockholders or
disinterested directors, or otherwise. The Court of Chancery may
summarily determine a corporation's obligation to advance expenses
(including attorneys' fees)."
The Certificate of Incorporation and bylaws also limit the
personal liability of directors to the Company and its stockholders
for monetary damages resulting from certain breaches of the
directors' fiduciary duties. The bylaws of the Company provide as
follows:
"No Director of the Corporation shall be personally
liable to the Corporation or its stockholders for monetary damages
for breach of fiduciary duty as a Director, except for liability
(i) for any breach of the Director's duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not in
good faith or which involve intentional misconduct or a knowing
violation of law, (iii) under Section 174 of the GCL, or (iv) for
any transaction from which the Director derived any improper
personal benefit. If the GCL is amended to authorize corporate
action further eliminating or limiting the personal liability of
Directors, then the liability of Directors of the Corporation shall
be eliminated or limited to the full extent permitted by the GCL,
as so amended."
The Company maintains directors' and officers' liability
insurance.
Insofar as indemnification for liabilities arising under
the Securities Act of 1933, as amended (the "Securities Act"), may
be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant
of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in
the Securities Act and will be governed by the final adjudication
of such issue.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
Reference is made to the Exhibit Index which immediately
precedes the exhibits filed with this registration statement.
Item 9. Undertakings.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or
sales are being made, a post-effective amendment to this
registration statement:
(i) To include any prospectus required by
Section 10(a)(3) of the Securities Act;
(ii) To reflect in the prospectus any facts or
events arising after the effective date of the registration
statement (or the most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a fundamental
change in the information set forth in the registration statement;
(iii) To include any material information with
respect to the plan of distribution not previously disclosed in the
registration statement or any material change to such information
in the registration statement;
Provided, however, that paragraphs (i) and (ii)
do not apply if the information required to be included in a post-
effective amendment by those paragraphs is contained in periodic
reports filed by the Registrant pursuant to Section 13 or Section
15(d) of the Exchange Act that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any
liability under the Securities Act, each such post-effective
amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-
effective amendment any of the securities being registered which
remain unsold at the termination of the offering.
(4) That, for purposes of determining any liability
under the Securities Act, each filing of the Registrant's annual
report pursuant to Section 13(a) or Section 15(d) of the Exchange
Act that is incorporated by reference in the registration statement
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof.
See the final paragraph under the heading "Item 6.
Indemnification of Directors and Officers" for the undertaking
pursuant to Item 512(h) of Regulation S-K.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the Registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form S-8 and
has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City
of Houston, State of Texas, on June 16, 1998.
CONTINENTAL AIRLINES, INC.
By: /s/ Jeffery A. Smisek
Jeffery A. Smisek
Executive Vice President
and General Counsel
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed by the following
persons in the capacities indicated on June 16, 1998.
Signature Title
* Chief Executive Officer
Gordon M. Bethune (Principal Executive Officer)
and Director
* Executive Vice President and Chief
Lawrence W. Kellner Financial Officer (Principal
Financial Officer)
* Vice President and Controller
Michael P. Bonds (Principal Accounting Officer)
* Director
Thomas J. Barrack, Jr.
Director
Lloyd M. Bentsen, Jr.
* Director
David Bonderman
* Director
Gregory D. Brenneman
* Director
Patrick Foley
* Director
Douglas H. McCorkindale
* Director
George G.C. Parker
* Director
Richard W. Pogue
* Director
William S. Price III
* Director
Donald L. Sturm
Director
Karen Hastie Williams
* Director
Charles A. Yamarone
*By /s/ Sarah E. Hagy
Sarah E. Hagy
Attorney in-Fact
June 16, 1998
EXHIBIT INDEX
Exhibit No. Description
4.1(a) Amended and Restated Certificate of
Incorporation of the Company (incorporated by
reference to Exhibit 4.1(a) to the Company's
Form S-8 Registration Statement (No. 333-
06993)).
4.1(b) Certificate of Designations of Series A 12%
Cumulative Preferred Stock (incorporated by
reference to Exhibit 1.2 to the Company's Form
8-A Registration Statement, as amended to date).
4.2 By-Laws of the Company (incorporated by
reference to Exhibit 3.1 to the Company's
Quarterly Report on Form 10-Q for the quarter
ended September 30, 1996).
4.3 Continental Airlines, Inc. 1998 Stock Incentive
Plan.
4.4 Form of Employee Stock Option Grant pursuant to
the 1998 Stock Incentive Plan.
5 Opinion of Executive Vice President and General
Counsel.
23.1 Consent of Ernst & Young LLP.
23.2 Consent of Executive Vice President and General
Counsel (included in Exhibit 5).
24 Powers of Attorney (Gordon M. Bethune, Lawrence
W. Kellner, Michael P. Bonds, Thomas J. Barrack,
Jr., David Bonderman, Gregory D. Brenneman,
Patrick Foley, Douglas H. McCorkindale, George
G.C. Parker, Richard W. Pogue, William S. Price
III, Donald L. Sturm, Charles A. Yamarone).
EXHIBIT 4.3
CONTINENTAL AIRLINES, INC.
1998 STOCK INCENTIVE PLAN
I. PURPOSE
The purpose of the Continental Airlines, Inc. 1998 Stock
Incentive Plan is to provide a means through which Continental
Airlines, Inc. and its subsidiaries may attract able persons to
serve as directors, or to enter or remain in the employ of the
Company (as defined below) or its subsidiaries, and to provide a
means whereby those individuals upon whom the responsibilities of
the successful administration and management of the Company and its
subsidiaries rest, and whose present and potential contributions to
the welfare of the Company and its subsidiaries are of importance,
can acquire and maintain stock ownership, thereby strengthening
their concern for the welfare of the Company and its subsidiaries.
A further purpose of the Plan is to provide such individuals with
additional incentive and reward opportunities designed to enhance
the profitable growth of the Company and its subsidiaries.
Accordingly, the Plan provides that the Company may grant to
certain employees or directors shares of Restricted Stock, or the
option to purchase shares of Common Stock, as hereinafter set
forth. Options granted under the Plan may be either Incentive Stock
Options or options that do not constitute Incentive Stock Options.
II. DEFINITIONS
The following definitions (including any plural thereof) shall
be applicable throughout the Plan unless specifically modified by
any Section:
(a) "Administrator" means (i) in the context of Awards made
to, or the administration (or interpretation of any provision) of
the Plan as it relates to, any person who is subject to Section 16
of the Exchange Act (including any successor section to the same or
similar effect, "Section 16"), the Committee, or (ii) in the
context of Awards made to, or the administration (or interpretation
of any provision) of the Plan as it relates to, any person who is
not subject to Section 16, the Chief Executive Officer of the
Company (or, if the Chief Executive Officer is not a Director of
the Company, the Committee).
(b) "Award" means an Option or grant of Restricted Stock.
(c) "Board" means the Board of Directors of the Company.
(d) "Code" means the Internal Revenue Code of 1986, as
amended. Reference in the Plan to any section of the Code shall be
deemed to include any amendments or successor provisions to such
section and any regulations promulgated under such section.
(e) "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 and
applicable interpretive authority thereunder and within the meaning
of "Non-Employee Director" as defined in Rule 16b-3). 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 Administrator as described in the Plan.
(f) "Common Stock" means the Class B common stock, $.01 par
value, of the Company, or any security into which such Common Stock
may be changed by reason of any transaction or event of the type
described in Section IX(b).
(g) "Company" shall mean Continental Airlines, Inc., a
Delaware corporation, or any successor thereto.
(h) "Director" means an individual elected to the Board by the
stockholders of the Company or by the Board under applicable
corporate law who is serving on the Board on the date the Plan is
adopted by the Board or is elected to the Board after such date.
(i) "Disability" means any complete and permanent disability
as defined in section 22(e)(3) of the Code.
(j) "employee" means any person (which may include a Director)
in an employment relationship with the Company or any parent or
subsidiary corporation (as defined in section 424 of the Code).
(k) "Exchange Act" means the Securities Exchange Act of 1934,
as amended, and the rules and regulations promulgated thereunder.
(l) "Incentive Stock Option" means an incentive stock option
within the meaning of section 422 of the Code.
(m) "Market Value per Share" means, as of any specified date,
the closing sale price of the Common Stock on that date (or, if
there are no sales on that date, the last preceding date on which
there was a sale) in the principal securities market in which the
Common Stock is then traded. If the Common Stock is not publicly
traded at the time a determination of "Market Value per Share" is
required to be made hereunder, the determination of such amount
shall be made by the Administrator in such manner as it deems
appropriate.
(n) "Option" means an option to purchase Common Stock granted
under Section VII of the Plan and includes both Incentive Stock
Options to purchase Common Stock and Options that do not constitute
Incentive Stock Options to purchase Common Stock.
(o) "Option Agreement" means a written agreement between the
Company and an Optionee with respect to, and evidencing the grant
of, an Option.
(p) "Optionee" means an employee or Director who has been
granted an Option.
(q) "Plan" means the Continental Airlines, Inc. 1998 Stock
Incentive Plan, as amended from time to time.
(r) "Restricted Stock" means shares of Common Stock granted
pursuant to Section VIII of the Plan as to which neither the
substantial risk of forfeiture nor the restriction on transfers
referred to therein has expired.
(s) "Restricted Stock Agreement" means a written agreement
between the Company and a recipient of Restricted Stock with
respect to, and evidencing the grant of, Restricted Stock.
(t) "Rule 16b-3" means Rule 16b-3 under the Exchange Act, as
such rule may be amended from time to time, and any successor rule,
regulation or statute fulfilling the same or similar function.
(u) "subsidiary" 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).
III. EFFECTIVE DATE AND DURATION OF THE PLAN
The Plan shall become effective upon the date of its adoption
by the Board; provided, that the Plan is approved by the
stockholders of the Company within twelve months thereafter.
Notwithstanding any provision of the Plan or of any Option
Agreement or Restricted Stock Agreement, no Option shall be
exercisable, and no shares of Restricted Stock shall vest, prior to
such stockholder approval. No further Options or Restricted Stock
may be granted under the Plan after ten years from the date the
Plan is adopted by the Board. The Plan shall remain in effect until
all Options granted under the Plan have been satisfied or expired,
and all shares of Restricted Stock granted under the Plan have
vested or been forfeited.
IV. ADMINISTRATION
(a) Administrator. The Plan shall be administered by the
Administrator, so that Awards made to, and the administration (or
interpretation of any provision) of the Plan as it relates to, any
person who is subject to Section 16, shall be made or effected by
the Committee, and Awards made to, and the administration (or
interpretation of any provision) of the Plan 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).
(b) Powers. Subject to the express provisions of the Plan, the
Administrator shall have authority, in its discretion, to determine
which employees or Directors shall receive an Award, the time or
times when such Award shall be granted, whether an Incentive Stock
Option or nonqualified Option shall be granted, and the number of
shares to be subject to each Award. In making such determinations,
the Administrator shall take into account the nature of the
services rendered by the respective employees or Directors, their
present and potential contribution to the Company's success and
such other factors as the Administrator in its discretion shall
deem relevant. Subject to the express provisions of the Plan, the
Administrator shall also have the power to construe the Plan and
the respective agreements executed hereunder, to prescribe rules
and regulations relating to the Plan, and to determine the terms,
restrictions and provisions of the Option Agreements and the
Restricted Stock Agreements, including such terms, restrictions and
provisions as shall be requisite in the judgment of the
Administrator to cause designated Options to qualify as Incentive
Stock Options, and to make all other determinations necessary or
advisable for administering the Plan. The Administrator may correct
any defect or supply any omission or reconcile any inconsistency in
the Plan or in any agreement relating to an Award in the manner and
to the extent it shall deem expedient to carry it into effect. The
determination of the Administrator on the matters referred to in
this Section IV shall be conclusive; provided, however, that 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 capacity as Administrator of the Plan, the determination
of the Committee shall be conclusive.
V. SHARES SUBJECT TO THE PLAN; GRANT OF OPTIONS;
GRANT OF RESTRICTED STOCK
(a) Shares Subject to the Plan. Subject to adjustment as
provided in Section IX(b), the aggregate number of shares of Common
Stock that may be issued under the Plan shall not exceed 5,500,000
shares. Shares shall be deemed to have been issued under the Plan
only to the extent actually issued and delivered pursuant to an
Option or a grant of Restricted Stock. To the extent that an Option
or a grant of Restricted Stock lapses or the rights of the
recipient with respect thereto terminate, any shares of Common
Stock then subject to such Option or grant of Restricted Stock
shall again be available for grant under the Plan. Notwithstanding
any provision in the Plan to the contrary, the maximum number of
shares of Common Stock that (i) may be subject to Options granted
to any one individual during any calendar year may not exceed
750,000 shares, and (ii) may be granted as Restricted Stock may not
exceed 250,000 shares (in each case subject to adjustment as
provided in Section IX(b)). The limitation set forth in clause (i)
of the preceding sentence shall be applied in a manner which will
permit compensation generated in connection with Options awarded
under the Plan by the Committee to constitute "performance based"
compensation for purposes of section 162(m) of the Code, including,
without limitation, counting against such maximum number of shares,
to the extent required under section 162(m) of the Code and
applicable interpretive authority thereunder, any shares subject to
Options that are canceled or repriced.
(b) Grant of Options. The Administrator may from time to time
grant Options to one or more employees or Directors determined by
it to be eligible for participation in the Plan in accordance with
the terms of this Plan.
(c) Grant of Restricted Stock. The Administrator may from time
to time grant Restricted Stock to one or more employees or
Directors determined by it to be eligible for participation in the
Plan in accordance with the terms of this Plan.
(d) Stock Offered. Subject to the limitations set forth in
Section V(a) above, the stock to be offered pursuant to an Award
may be authorized but unissued Common Stock or Common Stock
previously issued and outstanding and reacquired by the Company.
Any of such shares which remain unissued and which are not subject
to outstanding Awards at the termination of the Plan shall cease to
be subject to the Plan but, until termination of the Plan, the
Company shall at all times make available a sufficient number of
shares to meet the requirements of the Plan.
VI. ELIGIBILITY
Awards may be granted only to persons who, at the time of
grant, are employees or Directors. An Award may be granted on more
than one occasion to the same person and, subject to the
limitations set forth in the Plan, Awards consisting of Options may
include an Incentive Stock Option or an Option that is not an
Incentive Stock Option or any combination thereof, and Awards may
consist of any combination of Options and Restricted Stock.
VII. STOCK OPTIONS
(a) Option Period. The term of each Option shall be as
specified by the Administrator at the date of grant.
(b) Limitations on Exercise of Option. An Option shall be
exercisable in whole or in such installments and at such times as
determined by the Administrator at the date of grant.
(c) Special Limitations on Incentive Stock Options. An
Incentive Stock Option may be granted only to an individual who is
an employee at the time the Option is granted. To the extent that
the aggregate Market Value per Share (determined at the time the
respective Incentive Stock Option is granted) of Common Stock with
respect to which Incentive Stock Options granted after 1986 are
exercisable for the first time by an individual during any calendar
year under all incentive stock option plans of the Company and its
parent and subsidiary corporations exceeds $100,000, such Incentive
Stock Options shall be treated as Options which do not constitute
Incentive Stock Options. The Administrator shall determine, in
accordance with applicable provisions of the Code, Treasury
Regulations and other administrative pronouncements, which of an
Optionee's Incentive Stock Options will not constitute Incentive
Stock Options because of such limitation and shall notify the
Optionee of such determination as soon as practicable after such
determination. No Incentive Stock Option shall be granted to an
individual if, at the time the Option is granted, such individual
owns stock possessing more than 10% of the total combined voting
power of all classes of stock of the Company or of its parent or
subsidiary corporation, within the meaning of section 422(b)(6) of
the Code, unless (i) at the time such Option is granted the option
price is at least 110% of the Market Value per Share of the Common
Stock subject to the Option and (ii) such Option by its terms is
not exercisable after the expiration of five years from the date of
grant. An Incentive Stock Option shall not be transferable
otherwise than by will or the laws of descent and distribution, and
shall be exercisable during the Optionee's lifetime only by such
Optionee or the Optionee's guardian or legal representative.
(d) Option Agreement. Each Option shall be evidenced by an
Option Agreement in such form and containing such provisions not
inconsistent with the provisions of the Plan as the Administrator
from time to time shall approve, including, without limitation,
provisions to qualify an Incentive Stock Option under section 422
of the Code. Each Option Agreement shall specify the effect of
termination of (i) employment, or (ii) membership on the Board, as
applicable, on the exercisability of the Option. An Option
Agreement may provide for the payment of the option price, in whole
or in part, by delivery of a number of shares of Common Stock (plus
cash if necessary) having a Market Value per Share equal to such
option price. Moreover, an Option Agreement may provide for a
"cashless exercise" of the Option by establishing procedures
satisfactory to the Administrator with respect thereto. The terms
and conditions of the respective Option Agreements need not be
identical.
(e) Option Price and Payment. The price at which a share of
Common Stock may be purchased upon exercise of an Option shall be
set forth in the Option Agreement and shall be determined by the
Administrator but, subject to adjustment as provided in Section
IX(b), such purchase price shall not be less than the Market Value
per Share of a share of Common Stock on the date such Option is
granted. The Option or portion thereof may be exercised by delivery
of an irrevocable notice of exercise to the Company, as specified
by the Administrator. The purchase price of the Option or portion
thereof shall be paid in full in the manner specified by the
Administrator. Separate stock certificates shall be issued by the
Company for those shares acquired pursuant to the exercise of an
Incentive Stock Option and for those shares acquired pursuant to
the exercise of any Option that does not constitute an Incentive
Stock Option.
(f) Stockholder Rights and Privileges. The Optionee shall be
entitled to all the privileges and rights of a stockholder only
with respect to such shares of Common Stock as have been purchased
under the Option and for which certificates representing such
Common Stock have been registered in the Optionee's name.
(g) Options in Substitution for Stock Options Granted by Other
Corporations. Options may be granted under the Plan from time to
time in substitution for stock options held by individuals employed
by corporations who become employees as a result of a merger or
consolidation or other business combination of the employing
corporation with the Company or any subsidiary.
VIII. RESTRICTED STOCK
(a) Ownership of Restricted Stock. Each grant of Restricted
Stock will constitute an immediate transfer of record and
beneficial ownership of the shares of Restricted Stock to the
recipient of the grant in consideration of the performance of
services by such recipient (or other consideration determined by
the Administrator), entitling the recipient to all voting and other
ownership rights, but subject to the restrictions hereinafter
referred to or contained in the related Restricted Stock Agreement.
Each grant may, in the discretion of the Administrator, limit the
recipient's dividend rights during the period in which the shares
of Restricted Stock are subject to a substantial risk of forfeiture
and restrictions on transfer.
(b) Substantial Risk of Forfeiture and Restrictions on
Transfer. Each grant of Restricted Stock will provide that (i) the
shares covered thereby will be subject, for a period or periods
determined by the Administrator at the date of grant, to one or
more restrictions, including, without limitation, a restriction
that constitutes a "substantial risk of forfeiture" within the
meaning of section 83 of the Code and applicable interpretive
authority thereunder, and (ii) during such period or periods during
which such restrictions are to continue, the transferability of the
Restricted Stock subject to such restrictions will be prohibited or
restricted in a manner and to the extent prescribed by the
Administrator at the date of grant.
(c) Restricted Stock Held in Trust. Shares of Common Stock
awarded pursuant to a grant of Restricted Stock will be held in
trust by the Company for the benefit of the recipient until such
time as the applicable restriction on transfer thereof shall have
expired or otherwise lapsed, at which time certificates
representing such Common Stock will be delivered to the recipient.
(d) Restricted Stock Agreement; Consideration. Each grant of
Restricted Stock shall be evidenced by a Restricted Stock Agreement
in such form and containing such provisions not inconsistent with
the provisions of the Plan as the Administrator from time to time
shall approve. The terms and conditions of the respective
Restricted Stock Agreements need not be identical. Each grant of
Restricted Stock may be made without additional consideration or in
consideration of a payment by the recipient that is less than the
Market Value per Share on the date of grant, as determined by the
Administrator.
IX. RECAPITALIZATION, REORGANIZATION AND CHANGE IN CONTROL
(a) No Effect on Right or Power. The existence of the Plan and
the Awards granted hereunder shall not affect in any way the right
or power of the Board or the stockholders of the Company or any
subsidiary to make or authorize any adjustment, recapitalization,
reorganization or other change in the Company's or any subsidiary's
capital structure or its business, any merger or consolidation of
the Company or any subsidiary, any issue of debt or equity
securities ahead of or affecting Common Stock or the rights
thereof, the dissolution or liquidation of the Company or any
subsidiary or any sale, lease, exchange or other disposition of all
or any part of its assets or business or any other corporate act or
proceeding.
(b) Changes in Common Stock. The provisions of Section V(a)
imposing limits on the numbers of shares of Common Stock covered by
Awards granted under the Plan, as well as the number or type of
shares or other property subject to outstanding Options and
Restricted Stock grants and the applicable option prices per share,
shall be adjusted appropriately by the Committee in the event of
stock dividends, spin offs of assets or other extraordinary
dividends, stock splits, combinations of shares, recapitalizations,
mergers, consolidations, reorganizations, liquidations, issuances
of rights or warrants and similar transactions or events.
(c) Change in Control. *1/ As used in the Plan (except as
otherwise provided in an applicable Option Agreement or Restricted
Stock Agreement), the term "Change in Control" shall mean:
(aa) any person (within the meaning of Section 13(d) or 14(d)
under the Exchange Act, including any group (within the meaning of
Section 13(d)(3) under the Exchange Act), a "Person") is or becomes
the "beneficial owner" (as such term is defined in Rule 13d-3
promulgated under the Exchange Act), directly or indirectly, of
securities of the Company (such Person being referred to as an
"Acquiring Person") representing the greater of (x) 25% of the
combined voting power of the Company's outstanding securities and
(y) the proportion of the combined voting power of the Company's
outstanding securities represented by securities of the Company
beneficially owned, directly or indirectly, by Northwest Airlines
Corporation ("Northwest") and any Person controlling, controlled by
or under common control with Northwest at the time of reference
(excluding, for purposes of determining such proportion of the
combined voting power under this clause (y), any securities
beneficially owned by Northwest (and any Person controlling,
controlled by or under common control with Northwest) which are
deemed beneficially owned by such Acquiring Person); other than
beneficial ownership by (i) the Company or any subsidiary of the
_____________
*1. If the acquisition of Air Partners' interest in the
Company contemplated by the Investment Agreement dated as of
January 25, 1998 among Northwest, Newbridge Parent Corporation, Air
Partners, L.P., the partners of Air Partners, L.P. signatory
thereto, Bonderman Family Limited Partnership, 1992 Air, Inc. and
Air Saipan, Inc., as amended by Amendment No. 1 thereto dated as of
February 27, 1998, is not consummated, there shall automatically be
substituted, in lieu of the Change in Control provision of the Plan
(Section IX(c)) set forth herein, the alternate Change in Control
provision attached to the Plan and captioned "Alternate Change in
Control Provision".
Company, (ii) any employee benefit plan of the Company or any
Person organized, appointed or established pursuant to the terms of
any such employee benefit plan (unless such plan or Person is a
party to or is utilized in connection with a transaction led by
Outside Persons), (iii) Northwest or any Person controlling,
controlled by or under common control with Northwest (unless
Northwest is controlled by or under common control with Delta Air
Lines, Inc.), or (iv) (I) 1992 Air, Inc., (II) any Person who
controlled 1992 Air, Inc. as of February 26, 1998, including David
Bonderman and James Coulter, or (III) any Person controlled by any
such Person (Persons referred to in clauses (i) through (iv)
hereof are hereinafter referred to as "Excluded Persons"); or
(bb) individuals who constituted the Board as of February 26,
1998 (the "Incumbent Board") cease for any reason to constitute at
least a majority of the Board, provided that any individual
becoming a director subsequent to February 26, 1998 whose
appointment to fill a vacancy or to fill a new Board position or
whose nomination for election by the Company's shareholders was
approved by a vote of at least a majority of the directors then
comprising the Incumbent Board or who was nominated for election by
Excluded Persons shall be considered as though such individual were
a member of the Incumbent Board; or
(cc) the Company merges with or consolidates into or engages
in a reorganization or similar transaction with another entity
(including Northwest) pursuant to a transaction in which the
Company is not the "Controlling Corporation"; or
(dd) the Company sells or otherwise disposes of all or
substantially all of its assets, other than to Excluded Persons, or
the Company sells or otherwise disposes of all or substantially all
of its assets to Northwest or any Person controlling, controlled by
or under common control with Northwest.
For purposes of clause (aa) above, if at any time there exist
securities of different classes entitled to vote separately in the
election of directors, the calculation of the proportion of the
voting power held by a beneficial owner of the Company's securities
shall be determined as follows: first, the proportion of the voting
power represented by securities held by such beneficial owner of
each separate class or group of classes voting separately in the
election of directors shall be determined, provided that securities
representing more than 50% of the voting power of securities of any
such class or group of classes shall be deemed to represent 100% of
such voting power; second, such proportion shall then be multiplied
by a fraction, the numerator of which is the number of directors
which such class or classes is entitled to elect and the
denominator of which is the total number of directors elected to
membership on the Board at the time; and third, the product
obtained for each such separate class or group of classes shall be
added together, which sum shall be the proportion of the combined
voting power of the Company's outstanding securities held by such
beneficial owner.
For purposes of clause (aa) above, the term "Outside Persons"
means any Persons other than (I) Persons described in clauses
(aa)(i) or (iii) or (iv) above (as to Persons described in clause
(aa)(iii) or (iv) above, while they are Excluded Persons) and (II)
members of senior management of the Company in office immediately
prior to the time the Acquiring Person acquires the beneficial
ownership described in clause (aa).
For purposes of clause (cc) above, the Company shall be
considered to be the Controlling Corporation in any merger,
consolidation, reorganization or similar transaction unless either
(1) the shareholders of the Company immediately prior to the
consummation of the transaction (the "Old Shareholders") would not,
immediately after such consummation, beneficially own, directly or
indirectly, securities of the resulting entity entitled to elect a
majority of the members of the Board of Directors or other
governing body of the resulting entity or (2) those persons who
were directors of the Company immediately prior to the consummation
of the proposed transaction would not, immediately after such
consummation, constitute a majority of the directors of the
resulting entity, provided that (I) there shall be excluded from
the determination of the voting power of the Old Shareholders
securities in the resulting entity beneficially owned, directly or
indirectly, by the other party to the transaction and any such
securities beneficially owned, directly or indirectly, by any
Person acting in concert with the other party to the transaction,
(II) there shall be excluded from the determination of the voting
power of the Old Shareholders securities in the resulting entity
acquired in any such transaction other than as a result of the
beneficial ownership of Company securities prior to the transaction
and (III) persons who are directors of the resulting entity shall
be deemed not to have been directors of the Company immediately
prior to the consummation of the transaction if they were elected
as directors of the Company within 90 days prior to the
consummation of the transaction.
The exclusion described in clause (aa)(iii) above shall cease
to have any force or effect (and the Persons described therein
shall cease to be Excluded Persons) if Northwest (together with any
Person controlling, controlled by or under common control with
Northwest) ceases to be, for a period of thirty consecutive
calendar days, the beneficial owner, directly or indirectly, of
securities of the Company representing at least 25% of the combined
voting power of the Company's outstanding securities. The
exclusion described in clause (aa)(iv) above shall cease to have
any force or effect (and the Persons described therein shall cease
to be Excluded Persons) if (A) the Person acquiring beneficial
ownership is not controlled by David Bonderman or James Coulter,
or (B) the Person acquiring beneficial ownership (together with any
Person controlling, controlled by or under common control with such
Person) ceases to be, for a period of thirty consecutive calendar
days, the beneficial owner, directly or indirectly, of securities
of the Company representing at least 25% of the combined voting
power of the Company's outstanding securities.
Upon the occurrence of a Change in Control, with respect to
each recipient of an Award hereunder, (AA) all Options granted to
such recipient and outstanding at such time shall immediately vest
and become exercisable in full (but subject, however, in the case
of Incentive Stock Options, to the aggregate fair market value,
determined as of the date the Incentive Stock Options are granted,
of the stock with respect to which Incentive Stock Options are
exercisable for the first time by such recipient during any
calendar year not exceeding $100,000) and, except as required by
law, all restrictions on the transfer of shares acquired pursuant
to such Options shall terminate and (BB) all restrictions
applicable to such recipient's Restricted Stock shall be deemed to
have been satisfied and such Restricted Stock shall vest in full.
In addition, except as otherwise provided in the applicable
Option Agreement, if a recipient of an Award hereunder becomes
entitled to one or more payments (with a "payment" including,
without limitation, the vesting of an Award) pursuant to the terms
of the Plan (the "Total Payments"), which are or become subject to
the tax imposed by section 4999 of the Code (or any similar tax
that may hereafter be imposed) (the "Excise Tax"), the Company or
subsidiary for whom the recipient is then performing services shall
pay to the recipient an additional amount (the "Gross-Up Payment")
such that the net amount retained by the recipient, after reduction
for any Excise Tax on the Total Payments and any federal, state and
local income or employment tax and Excise Tax on the Gross-Up
Payment, shall equal the Total Payments. For purposes of
determining the amount of the Gross-Up Payment, the recipient shall
be deemed (aa) to pay federal income taxes at the highest stated
rate of federal income taxation (including surtaxes, if any) for
the calendar year in which the Gross-Up Payment is to be made (for
1998, the highest stated rate is 39.6%); and (bb) to pay any
applicable state and local income taxes at the highest stated rate
of taxation (including surtaxes, if any) for the calendar year in
which the Gross-Up Payment is to be made. Any Gross-Up Payment
required hereunder shall be made to the recipient at the same time
any Total Payment subject to the Excise Tax is paid or deemed
received by the recipient.
X. AMENDMENT AND TERMINATION OF THE PLAN
The Board in its discretion may terminate the Plan at any time
with respect to any shares of Common Stock for which Awards have
not theretofore been granted. The Board shall have the right to
alter or amend the Plan or any part thereof from time to time;
provided that no change in any Award theretofore granted may be
made which would impair the rights of the recipient thereof without
the consent of such recipient, and provided further that the Board
may not, without approval of the stockholders of the Company, amend
the Plan to (a) increase the maximum aggregate number of shares
that may be issued under the Plan or (b) change the class of
individuals eligible to receive Awards under the Plan.
XI. MISCELLANEOUS
(a) No Right to an Option or Restricted Stock. Neither the
adoption of the Plan nor any action of the Board or the
Administrator shall be deemed to give an employee or Director any
right to be granted an Award or any other rights hereunder except
as may be evidenced by an Option Agreement or Restricted Stock
Agreement duly executed and delivered on behalf of the Company, and
then only to the extent and on the terms and conditions expressly
set forth therein. The Plan shall be unfunded. The Company shall
not be required to establish any special or separate fund or to
make any other segregation of funds or assets to assure the
performance of its obligations under any Award.
(b) No Employment or Membership Rights Conferred. Nothing
contained in the Plan shall (i) confer upon any employee any right
with respect to continuation of employment with the Company or any
subsidiary or (ii) interfere in any way with the right of the
Company or any subsidiary to terminate his or her employment at any
time. Nothing contained in the Plan shall confer upon any Director
any right with respect to continuation of membership on the Board.
(c) Other Laws; Withholding. The Company shall not be
obligated to issue any Common Stock pursuant to any Award granted
under the Plan at any time when the shares covered thereby have not
been registered under the Securities Act of 1933, as amended, and
such other state and federal laws, rules and regulations as the
Company or the Administrator deems applicable and, in the opinion
of legal counsel to the Company, there is no exemption from the
registration requirements of such laws, rules and regulations
available for the issuance and sale of such shares. No fractional
shares of Common Stock shall be delivered, nor shall any cash in
lieu of fractional shares be paid. The Company shall have the right
to (i) make deductions from any settlement or exercise of an Award
made under the Plan, including the delivery of shares, or require
shares or cash or both be withheld from any Award, in each case in
an amount sufficient to satisfy withholding of any federal, state
or local taxes required by law, or (ii) take such other action as
may be necessary or appropriate to satisfy any such tax withholding
obligations. The Administrator may determine the manner in which
such tax withholding may be satisfied, and may permit shares of
Common Stock (together with cash, as appropriate) to be used to
satisfy required tax withholding based on the Market Value per
Share of any such shares of Common Stock, as of the last trading
day preceding the exercise or settlement of the Award.
(d) No Restriction on Corporate Action. Subject to the
restrictions contained in Section X, nothing contained in the Plan
shall be construed to prevent the Company or any subsidiary from
taking any corporate action, whether or not such action would have
an adverse effect on the Plan or any Award granted hereunder. No
employee, Director, beneficiary or other person shall have any
claim against the Company or any subsidiary as a result of any such
action.
(e) Restrictions on Transfer of Options and Certain Underlying
Shares. An Option (other than an Incentive Stock Option, which
shall be subject to the transfer restrictions set forth in Section
VII(c)) shall not be transferable otherwise than (i) by will or the
laws of descent and distribution, (ii) pursuant to a qualified
domestic relations order as defined by the Code or Title I of the
Employee Retirement Income Security Act of 1974, as amended, or the
rules thereunder, or (iii) with the consent of the Administrator.
In the discretion of the Administrator, a percentage (determined by
the Administrator and set forth in the applicable Option Agreement)
of the aggregate shares of Common Stock obtained from exercises of
an Option (which percentage may be satisfied out of particular
exercises as determined by the Administrator and set forth in the
applicable Option Agreement) shall not be transferable prior to the
earliest to occur of (x) the termination of the relevant Option
term (or such shorter period as may be determined by the
Administrator and set forth in the Option Agreement), (y) the
Optionee's retirement, death or Disability, or (z) termination of
the Optionee's employment with the Company and its subsidiaries.
(f) Governing Law. The Plan shall be construed in accordance
with the laws of the State of Delaware.
ALTERNATE CHANGE IN CONTROL PROVISION*2/
(c) Change in Control. As used in the Plan, the term "Change in
Control" shall mean:
(aa) any person (within the meaning of Section 13(d) or 14(d)
under the Exchange Act, including any group (within the meaning of
Section 13(d)(3) under the Exchange Act), a "Person") is or becomes
the "beneficial owner" (as such term is defined in Rule 13d-3
promulgated under the Exchange Act), directly or indirectly, of
securities of the Company (such Person being referred to as an
"Acquiring Person") representing the greater of (x) 25% of the
combined voting power of the Company's outstanding securities and
(y) the proportion of the combined voting power of the Company's
outstanding securities represented by securities of the Company
beneficially owned, directly or indirectly, by Air Partners, L.P.
("Air Partners") and any Person controlling, controlled by or under
common control with Air Partners at the time of reference
(excluding, for purposes of determining such proportion of the
combined voting power under this clause (y), any securities
beneficially owned by Air Partners (and any Person controlling,
controlled by or under common control with Air Partners) which are
deemed beneficially owned by such Acquiring Person); other than
beneficial ownership by (i) the Company or any subsidiary of the
Company, (ii) any employee benefit plan of the Company or any
Person organized, appointed or established pursuant to the terms of
any such employee benefit plan (unless such plan or Person is a
party to or is utilized in connection with a transaction led by
Outside Persons), or (iii) Air Partners or any Person (other than
any air carrier that is not the Company and that is currently
controlled by or under common control with Air Partners, or a
holding company or subsidiary of any such air carrier) controlling,
controlled by or under common control with Air Partners (Persons
referred to in clauses (i) through (iii) hereof are hereinafter
referred to as "Excluded Persons"); or
(bb) individuals who constituted the Board as of February 28,
1997 (the "Incumbent Board") cease for any reason to constitute at
least a majority of the Board, provided that any individual
becoming a director subsequent to February 28, 1997 whose
appointment to fill a vacancy or to fill a new Board position or
whose nomination for election by the Company's shareholders was
approved by a vote of at least a majority of the directors then
________________________
*2. If the acquisition of Air Partner's interest in the
Company contemplated by the Investment Agreement dated as of
January 25, 1998 among Northwest, Newbridge Parent Corporation, Air
Partners, L.P., the partners of Air Partners, L.P. signatory
thereto, Bonderman Family Limited Partnership, 1992 Air, Inc. and
Air Saipan, Inc., as amended by Amendment No. 1 thereto dated as of
February 27, 1998, is not consummated, there shall automatically be
substituted, in lieu of the Change in Control provision of the Plan
(Section IX(c)) set forth herein, this alternate Change in Control
provision captioned "Alternate Change in Control Provision".
comprising the Incumbent Board or who was nominated for election by
Excluded Persons shall be considered as though such individual were
a member of the Incumbent Board; or
(cc) the Company merges with or consolidates into or engages
in a reorganization or similar transaction with another entity
pursuant to a transaction in which the Company is not the
"Controlling Corporation"; or
(dd) the Company sells or otherwise disposes of all or
substantially all of its assets, other than to Excluded Persons.
For purposes of clause (aa) above, if at any time there exist
securities of different classes entitled to vote separately in the
election of directors, the calculation of the proportion of the
voting power held by a beneficial owner of the Company's securities
shall be determined as follows: first, the proportion of the voting
power represented by securities held by such beneficial owner of
each separate class or group of classes voting separately in the
election of directors shall be determined, provided that securities
representing more than 50% of the voting power of securities of any
such class or group of classes shall be deemed to represent 100% of
such voting power; second, such proportion shall then be multiplied
by a fraction, the numerator of which is the number of directors
which such class or classes is entitled to elect and the
denominator of which is the total number of directors elected to
membership on the Board at the time; and third, the product
obtained for each such separate class or group of classes shall be
added together, which sum shall be the proportion of the combined
voting power of the Company's outstanding securities held by such
beneficial owner.
For purposes of clause (aa) above, the term "Outside Persons"
means any Persons other than Persons described in clauses (aa)(i)
or (iii) above (as to Persons described in clause (aa)(iii) above,
while they are Excluded Persons) or members of senior management of
the Company in office immediately prior to the time the Acquiring
Person acquires the beneficial ownership described in clause (aa).
For purposes of clause (cc) above, the Company shall be
considered to be the Controlling Corporation in any merger,
consolidation, reorganization or similar transaction unless either
(1) the shareholders of the Company immediately prior to the
consummation of the transaction (the "Old Shareholders") would not,
immediately after such consummation, beneficially own, directly or
indirectly, securities of the resulting entity entitled to elect a
majority of the members of the Board of Directors or other
governing body of the resulting entity or (2) those persons who
were directors of the Company immediately prior to the consummation
of the proposed transaction would not, immediately after such
consummation, constitute a majority of the directors of the
resulting entity, provided that (I) there shall be excluded from
the determination of the voting power of the Old Shareholders
securities in the resulting entity beneficially owned, directly or
indirectly, by the other party to the transaction and any such
securities beneficially owned, directly or indirectly, by any
Person acting in concert with the other party to the transaction
(unless such other party or such Person is Air Partners, if Air
Partners has not ceased to be an Excluded Person), (II) there shall
be excluded from the determination of the voting power of the Old
Shareholders securities in the resulting entity acquired in any
such transaction other than as a result of the beneficial ownership
of Company securities prior to the transaction and (III) persons
who are directors of the resulting entity shall be deemed not to
have been directors of the Company immediately prior to the
consummation of the transaction if they were elected as directors
of the Company within 90 days prior to the consummation of the
transaction.
The exclusion described in clause (aa)(iii) above shall cease
to have any force or effect (and the Persons described therein
shall cease to be Excluded Persons) if (A) Air Partners ceases to
be, for a period of thirty consecutive calendar days, the
beneficial owner, directly or indirectly, of securities of the
Company representing at least 25% of the combined voting power of
the Company's outstanding securities or (B) there occurs a "change
in the ownership or effective control" (within the meaning of
section 280G of the Code) of Air Partners.
Upon the occurrence of a Change in Control, with respect to
each recipient of an Award hereunder, (AA) all Options granted to
such recipient and outstanding at such time shall immediately vest
and become exercisable in full (but subject, however, in the case
of Incentive Stock Options, to the aggregate fair market value,
determined as of the date the Incentive Stock Options are granted,
of the stock with respect to which Incentive Stock Options are
exercisable for the first time by such recipient during any
calendar year not exceeding $100,000) and, except as required by
law, all restrictions on the transfer of shares acquired pursuant
to such Options shall terminate and (BB) all restrictions
applicable to such recipient's Restricted Stock shall be deemed to
have been satisfied and such Restricted Stock shall vest in full.
In addition, if a recipient of an Award hereunder becomes
entitled to one or more payments (with a "payment" including,
without limitation, the vesting of an Award) pursuant to the terms
of the Plan (the "Total Payments"), which are or become subject to
the tax imposed by section 4999 of the Code (or any similar tax
that may hereafter be imposed) (the "Excise Tax"), the Company or
subsidiary for whom the recipient is then performing services shall
pay to the recipient an additional amount (the "Gross-Up Payment")
such that the net amount retained by the recipient, after reduction
for any Excise Tax on the Total Payments and any federal, state and
local income or employment tax and Excise Tax on the Gross-Up
Payment, shall equal the Total Payments. For purposes of
determining the amount of the Gross-Up Payment, the recipient shall
be deemed (aa) to pay federal income taxes at the highest stated
rate of federal income taxation (including surtaxes, if any) for
the calendar year in which the Gross-Up Payment is to be made (for
1996, the highest stated rate is 39.6%); and (bb) to pay any
applicable state and local income taxes at the highest stated rate
of taxation (including surtaxes, if any) for the calendar year in
which the Gross-Up Payment is to be made. Any Gross-Up Payment
required hereunder shall be made to the recipient at the same time
any Total Payment subject to the Excise Tax is paid or deemed
received by the recipient.
EXHIBIT 4.4
STOCK OPTION AGREEMENT
(PURSUANT TO THE TERMS OF THE
CONTINENTAL AIRLINES, INC.
1998 STOCK INCENTIVE PLAN)
This STOCK OPTION AGREEMENT (this "Option Agreement") is
between Continental Airlines, Inc., a Delaware corporation
("Company"), and __________ ("Optionee"), and is dated as of the
date set forth immediately above the signatures below.
1. Grant of Option. The Company hereby grants to Optionee
the right, privilege and option as herein set forth (the "Option")
to purchase up to ___________ (#####) shares (the "Shares") of
Class B common stock, $.01 par value per share, of Company ("Common
Stock"), in accordance with the terms of this Option Agreement.
The Shares, when issued to Optionee upon the exercise of the
Option, shall be fully paid and nonassessable. The Option is
granted pursuant to and to implement in part the Continental
Airlines, Inc. 1998 Stock Incentive Plan (as amended and in effect
from time to time, the "Plan") and is subject to the provisions of
the Plan, which is hereby incorporated herein and is made a part
hereof, as well as the provisions of this Option Agreement.
Optionee agrees to be bound by all of the terms, provisions,
conditions and limitations of the Plan and this Option Agreement.
All capitalized terms have the meanings set forth in the Plan
unless otherwise specifically provided. All references to
specified paragraphs pertain to paragraphs of this Option Agreement
unless otherwise provided. The Option is not intended to qualify
as an "incentive stock option" within the meaning of Section 422 of
the Internal Revenue Code of 1986, as amended (the "Code").
2. Option Term. Subject to earlier termination as provided
herein, the Option shall terminate on [fifth anniversary]. The
period during which the Option is in effect is referred to as the
"Option Period".
3. Option Exercise Price. The exercise price (the "Option
Price") of the Shares subject to the Option shall be $__.__ per
Share (which is the Market Value per Share on the date hereof).
4. Vesting. Subject to the following provisions of this
Paragraph 4, the total number of Shares subject to this Option
shall vest in twenty-five percent (25%) increments on each of
[anniversary], 1999, [anniversary], 2000, [anniversary], 2001 and
[anniversary], 2002. 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. In addition, the
total number of Shares subject to this Option shall vest and become
exercisable upon the occurrence of one of the events as described
in Paragraph 6(c) or 6(d).
5. Method of Exercise. To exercise the Option, Optionee
shall deliver an irrevocable written notice to Company (to the
attention of the Secretary of the Company) stating the number of
Shares with respect to which the Option is being exercised together
with payment for such Shares. Payment shall be made (i) in cash or
by check acceptable to Company, (ii) in nonforfeitable,
unrestricted shares of Company's Common Stock owned by Optionee at
the time of exercise of the Option having an aggregate market value
(measured by the Market Value per Share) at the date of exercise
equal to the aggregate exercise price of the Option being exercised
or (iii) by a combination of (i) and (ii). In addition, at the
request of Optionee, and to the extent permitted by applicable law
and subject to Paragraph 15, the Option may be exercised pursuant
to a "cashless exercise" arrangement with any brokerage firm
approved by the Administrator or its delegate under which
arrangement such brokerage firm, on behalf of Optionee, shall pay
to Company the exercise price of the Options being exercised, and
Company, pursuant to an irrevocable notice from Optionee, shall
promptly after receipt of the exercise price deliver the shares
being purchased to such firm.
6. Termination of Employment; Change in Control. Voluntary
or involuntary termination of employment, retirement, death or
Disability of Optionee, or occurrence of a Change in Control, shall
affect Optionee's rights under the Option as follows:
(a) Involuntary Termination for Gross Misconduct. The
Option shall terminate immediately and shall not be
exercisable if Optionee's employment (defined below) is
terminated involuntarily for gross misconduct (defined below).
(b) Other Involuntary Termination or Voluntary
Termination. If Optionee's employment is terminated
involuntarily other than for gross misconduct or if Optionee
voluntarily terminates employment, then immediately (i) the
Option shall terminate as to Shares subject thereto to the
extent not yet then vested pursuant to Paragraph 4 or pursuant
to Paragraph 6(c) below, and (ii) the Option shall terminate
as to all remaining Shares subject thereto to the extent not
exercised pursuant to Paragraph 5 within 30 days after such
termination of employment.
(c) Change in Control. If a Change in Control shall
occur, then immediately the Option shall vest and become
exercisable in full; provided, that from and after the date of
the closing of the Air Partners Transaction (as defined
below), if the Change in Control is the result of a business
combination with Northwest or any Person controlling,
controlled by or under common control with Northwest, the
Committee shall determine whether, in connection with such
business combination, a change in the composition of the
persons with authority to exercise policy-making functions
with respect to the business of the Company has or is
reasonably expected to occur, such that the expectations of
employees of the Company concerning the direction and
management of the Company would be reasonably expected to be
materially affected, and a Change in Control shall be deemed
to occur as a result of such business combination only if the
Committee determines that such a change has or is reasonably
expected to occur. Notwithstanding any determination by the
Committee that such a change has not or is not reasonably
expected to occur, if Optionee's employment with the Company
(or any subsidiary which is the principal employer of
Optionee) is terminated by the Company (or such subsidiary) at
any time during the two year period following the date of the
closing of a business combination with Northwest or any Person
controlling, controlled by or under common control with
Northwest which, but for the determination by the Committee,
would constitute a Change in Control, and such termination of
employment by the Company is for any reason other than (I)
death, (II) Disability, (III) the willful and continued
failure by Optionee substantially to perform his duties and
obligations to the Company or such subsidiary (other than any
such failure resulting from a Disability) which failure
continues after the date which is 30 days after the Company
has given written notice thereof to Optionee which notice
specifies the aspects in which Optionee has failed to perform
his duties or obligations to the Company or such subsidiary
and sets forth specific corrective action required of Optionee
to be taken within 30 days of the date of giving of the
notice, or (IV) the willful engaging by Optionee in misconduct
concerning the Company or such subsidiary, then upon such
termination of employment by the Company the Option shall
immediately vest and become exercisable in full during the 30
day period following such termination of employment.
Optionee hereby agrees that the Air Partners Transaction
does not constitute a Change in Control for purposes of this
Option Agreement, and irrevocably waives any claim that he may
have that the Air Partners Transaction constitutes a Change in
Control for purposes of this Option Agreement.
(d) Retirement, Death or Disability. If Optionee's
employment is terminated by retirement, death or Disability,
then immediately the Option shall become exercisable in full,
whether or not otherwise exercisable, for a term of one year
thereafter by Optionee or, in the case of death, by the person
or persons to whom Optionee's rights under the Option shall
pass by will or by the applicable laws of descent and
distribution, or in the case of Disability, by Optionee's
personal representative. However, in no event may any Option
be exercised by anyone after the earlier of (y) the expiration
of the Option Period or (z) one year after Optionee's death,
retirement or Disability (described above).
(e) Definitions. For purposes of the Option,
"employment" means employment by Company or a subsidiary (as
the term "subsidiary" is defined in the Plan). In this
regard, neither the transfer of a Participant from employment
by Company to employment by a subsidiary nor the transfer of
a Participant from employment by a subsidiary to employment by
Company shall be deemed to be a termination of employment of
the Participant. Moreover, the employment of a Participant
shall not be deemed to have been terminated because of absence
from active employment on account of temporary illness or
during authorized vacation or during temporary leaves of
absence from active employment granted by Company or a
subsidiary for reasons of professional advancement, education,
health, or government service, or during military leave for
any period if the Participant returns to active employment
within 90 days after the termination of military leave, or
during any period required to be treated as a leave of absence
by virtue of any valid law or agreement. "Gross misconduct"
means such misconduct, dishonesty, wilful and repeated
disobedience or other action or inaction as might reasonably
be expected to injure Company or any of its subsidiaries or
its or their business interests or reputation. The
Administrator's determination in good faith regarding whether
a termination of employment, gross misconduct or Disability
has occurred shall be conclusive and determinative. "Air
Partners Transaction" means the acquisition of the interests
in the Company of Air Partners, L.P. and related parties
contemplated by that certain Investment Agreement dated as of
January 25, 1998 among Northwest Airlines Corporation,
Newbridge Parent Corporation, Air Partners, L.P., the partners
of Air Partners, L.P. signatory thereto, Bonderman Family
Limited Partnership, 1992 Air, Inc. and Air Saipan, Inc., as
amended.
7. Reorganization of Company and Subsidiaries. The
existence of the Option shall not affect in any way the right or
power of Company or its stockholders to make or authorize any or
all adjustments, recapitalizations, reorganizations or other
changes in Company's capital structure or its business, or any
merger or consolidation of Company or any issue of bonds,
debentures, preferred or prior preference stock ahead of or
affecting the Shares or the rights thereof, or the dissolution or
liquidation of Company, or any sale or transfer of all or any part
of its assets or business, or any other corporate act or
proceeding, whether of a similar character or otherwise.
8. Adjustment of Shares. In the event of stock dividends,
spin-offs of assets or other extraordinary dividends, stock splits,
combinations of shares, recapitalizations, mergers, consolidations,
reorganizations, liquidations, issuances of rights or warrants and
similar transactions or events involving Company, appropriate
adjustments shall be made to the terms and provisions of this
Option, in the same manner as is provided for adjustments to the
terms and provisions of the warrants issued by Company to Air
Canada and to Air Partners, L.P. under the Warrant Agreement dated
as of April 27, 1993.
9. No Rights in Shares. Optionee shall have no rights as a
stockholder in respect of Shares until such Optionee becomes the
holder of record of such Shares.
10. Certain Restrictions. By exercising the Option, Optionee
agrees that if at the time of such exercise the sale of Shares
issued hereunder is not covered by an effective registration
statement filed under the Securities Act of 1933 ("Act"), Optionee
will acquire the Shares for Optionee's own account and without a
view to resale or distribution in violation of the Act or any other
securities law, and upon any such acquisition Optionee will enter
into such written representations, warranties and agreements as
Company may reasonably request in order to comply with the Act or
any other securities law or with this Option Agreement. Optionee
agrees that Company shall not be obligated to take any affirmative
action in order to cause the issuance or transfer of Shares
hereunder to comply with any law, rule or regulation that applies
to the Shares subject to the Option.
11. Shares Reserved. Company shall at all times during the
Option Period reserve and keep available such number of Shares as
will be sufficient to satisfy the requirements of this Option.
12. Nontransferability of Option. The Option granted
pursuant to this Option Agreement is not transferable other than by
will, the laws of descent and distribution or by qualified domestic
relations order. The Option will be exercisable during Optionee's
lifetime only by Optionee or by Optionee's guardian or legal
representative. No right or benefit hereunder shall in any manner
be liable for or subject to any debts, contracts, liabilities, or
torts of Optionee.
13. Amendment and Termination. No amendment or termination
of the Option which would impair the rights of Optionee shall be
made by the Board or the Administrator at any time without the
written consent of Optionee. No amendment or termination of the
Plan will adversely affect the rights, privileges and option of
Optionee under the Option without the written consent of Optionee.
14. No Guarantee of Employment. The Option shall not confer
upon Optionee any right with respect to continuance of employment
or other service with Company or any subsidiary, nor shall it
interfere in any way with any right Company or any subsidiary would
otherwise have to terminate such Optionee's employment or other
service at any time.
15. Withholding of Taxes. Company shall have the right to
(i) make deductions from any settlement or exercise of an Award
made under the Plan, including the delivery of shares, or require
shares or cash or both be withheld from any Award, in each case in
an amount sufficient to satisfy withholding of any federal, state
or local taxes required by law or (ii) take any other action as may
be necessary or appropriate to satisfy any such tax withholding
obligations.
16. No Guarantee of Tax Consequences. Neither Company nor
any subsidiary nor the Administrator makes any commitment or
guarantee that any federal, state or foreign tax treatment will
apply or be available to any person eligible for benefits under the
Option.
17. Severability. In the event that any provision of the
Option shall be held illegal, invalid, or unenforceable for any
reason, such provision shall be fully severable, but shall not
affect the remaining provisions of the Option, and the Option shall
be construed and enforced as if the illegal, invalid, or
unenforceable provision had never been included herein.
18. Governing Law. The Option shall be construed in
accordance with the laws of the State of Delaware to the extent
federal law does not supersede and preempt Delaware law.
19. Miscellaneous Provisions.
(a) Not a Contract of Employment; No Acquired Rights.
The adoption and maintenance of the Plan shall not be deemed to be
a contract of employment between the Company or any of its
subsidiaries and any person. Receipt of an Award under the Plan at
any given time shall not be deemed to create the right to receive
in the future an Award under the Plan, or any other incentive
awards granted to an employee of the Company or any of its
subsidiaries, and shall not constitute an acquired labor right for
purposes of any foreign law. The Plan shall not afford any
recipient of an Award any additional right to severance payments or
other termination awards or compensation under any foreign law as
a result of the termination of such recipient's employment for any
reason whatsoever.
(b) Not a Part of Salary. The grant of an Award under
the Plan is not intended to be a part of the salary of the
recipient.
(c) Foreign Indemnity. Optionee agrees to indemnify
Company for the Optionee's portion of any social insurance
obligations or taxes arising under any foreign law with respect to
the grant or exercise of this Option or the sale or other
disposition of the Shares acquired hereunder.
(d) Conflicts With Any Employment Agreement. If
Optionee has an employment agreement with Company or any of its
subsidiaries which contains different or additional provisions
relating to vesting of options, or otherwise conflicts with the
terms of this Option Agreement, the provisions of the employment
agreement shall govern.
IN WITNESS WHEREOF, the parties have entered into this Option
Agreement as of the _________ of _______, 1998.
"COMPANY"
CONTINENTAL AIRLINES, INC.
By Order of the Administrator
By:
Name: Jeffery A. Smisek
Title: Executive Vice President
"OPTIONEE"
________________________________
Name:
EXHIBIT 5
June 16, 1998
Continental Airlines, Inc.
2929 Allen Parkway
Houston, Texas 77019
Ladies and Gentlemen:
I am Executive Vice President and General Counsel of
Continental Airlines, Inc., a Delaware corporation (the "Company"),
and I have advised the Company in connection with the registration
pursuant to a Registration Statement on Form S-8 being filed with
the Securities and Exchange Commission (the "Registration
Statement") under the Securities Act of 1933, as amended (the
"Act"), of the proposed offering and sale of up to 5,500,000 shares
of Class B common stock, par value $.01 per share, of the Company
(the "Common Stock") pursuant to the Company's 1998 Stock Incentive
Plan (the "Plan").
In this connection, I have examined the corporate records of
the Company, including its Restated Certificate of Incorporation,
its Bylaws and minutes of meetings of its directors. I have also
examined the Registration Statement, together with the exhibits
thereto and such other documents as I have deemed necessary for the
purpose of expressing the opinion contained herein.
Based upon the foregoing, I am of the opinion that the Common
Stock, when issued in accordance with the terms of the Plan, will
be validly issued, fully paid and nonassessable.
I hereby consent to the filing of this opinion as an exhibit
to the Registration Statement and to the use of my name therein
under the caption "Item 5. Interests of Named Experts and Counsel".
In giving this consent, I do not thereby admit that I am within the
category of persons whose consent is required under Section 7 of
the Act and the rules and regulations thereunder.
Very truly yours,
/s/ Jeffery A. Smisek
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration
Statement (Form S-8) of Continental Airlines, Inc. (the "Company")
pertaining to the Continental Airlines, Inc. 1998 Stock Incentive
Plan of our report dated February 9, 1998 (except for Note 13, as
to which the date is March 18, 1998), with respect to the
consolidated balance sheets of Continental Airlines, Inc. as of
December 31, 1997 and 1996, and the related consolidated statements
of operations, redeemable preferred stock and common stockholders'
equity and cash flows for each of the three years in the period
ended December 31, 1997 and our report dated March 18, 1998 with
respect to the related financial statement schedule, all included
in the Company's 1997 Annual Report (Form 10-K) filed with the
Securities and Exchange Commission.
/s/ ERNST & YOUNG LLP
Houston, Texas
June 15, 1998
EXHIBIT 24
POWER OF ATTORNEY
The undersigned officer and/or director of Continental
Airlines, Inc. does hereby constitute and appoint Jeffery A.
Smisek, Scott R. Peterson, Sarah E. Hagy, or any of them, as the
undersigned's true and lawful attorneys-in-fact and agents to do
any and all acts and things in the undersigned's name and behalf in
the undersigned's capacities as officer and/or director, and to
execute any and all instruments for the undersigned and in the
undersigned's name in the capacities indicated below which such
person or persons may deem necessary or advisable to enable
Continental Airlines, Inc. to comply with the Securities Act of
1933 and any rules, regulations and requirements of the Securities
and Exchange Commission in connection with the Registration
Statement on Form S-8 ("Registration Statement") relating to the
Continental Airlines, Inc. 1998 Stock Incentive Plan, including
specifically, but not limited to, power and authority to sign for
the undersigned the Registration Statement and any and all
amendments (including post-effective amendments) thereto, and the
undersigned does hereby ratify and confirm all that such person or
persons shall do or cause to be done by virtue hereof.
Date: May 21, 1998 By: /s/ Gordon Bethune
Print Name: Gordon Bethune
POWER OF ATTORNEY
The undersigned officer and/or director of Continental
Airlines, Inc. does hereby constitute and appoint Jeffery A.
Smisek, Scott R. Peterson, Sarah E. Hagy, or any of them, as the
undersigned's true and lawful attorneys-in-fact and agents to do
any and all acts and things in the undersigned's name and behalf in
the undersigned's capacities as officer and/or director, and to
execute any and all instruments for the undersigned and in the
undersigned's name in the capacities indicated below which such
person or persons may deem necessary or advisable to enable
Continental Airlines, Inc. to comply with the Securities Act of
1933 and any rules, regulations and requirements of the Securities
and Exchange Commission in connection with the Registration
Statement on Form S-8 ("Registration Statement") relating to the
Continental Airlines, Inc. 1998 Stock Incentive Plan, including
specifically, but not limited to, power and authority to sign for
the undersigned the Registration Statement and any and all
amendments (including post-effective amendments) thereto, and the
undersigned does hereby ratify and confirm all that such person or
persons shall do or cause to be done by virtue hereof.
Date: May 21, 1998 By: /s/ Lawrence W. Kellner
Print Name: Lawrence W. Kellner
POWER OF ATTORNEY
The undersigned officer and/or director of Continental
Airlines, Inc. does hereby constitute and appoint Jeffery A.
Smisek, Scott R. Peterson, Sarah E. Hagy, or any of them, as the
undersigned's true and lawful attorneys-in-fact and agents to do
any and all acts and things in the undersigned's name and behalf in
the undersigned's capacities as officer and/or director, and to
execute any and all instruments for the undersigned and in the
undersigned's name in the capacities indicated below which such
person or persons may deem necessary or advisable to enable
Continental Airlines, Inc. to comply with the Securities Act of
1933 and any rules, regulations and requirements of the Securities
and Exchange Commission in connection with the Registration
Statement on Form S-8 ("Registration Statement") relating to the
Continental Airlines, Inc. 1998 Stock Incentive Plan, including
specifically, but not limited to, power and authority to sign for
the undersigned the Registration Statement and any and all
amendments (including post-effective amendments) thereto, and the
undersigned does hereby ratify and confirm all that such person or
persons shall do or cause to be done by virtue hereof.
Date: May 21, 1998 By: /s/ Michael P. Bonds
Print Name: Michael P. Bonds
POWER OF ATTORNEY
The undersigned officer and/or director of Continental
Airlines, Inc. does hereby constitute and appoint Jeffery A.
Smisek, Scott R. Peterson, Sarah E. Hagy, or any of them, as the
undersigned's true and lawful attorneys-in-fact and agents to do
any and all acts and things in the undersigned's name and behalf in
the undersigned's capacities as officer and/or director, and to
execute any and all instruments for the undersigned and in the
undersigned's name in the capacities indicated below which such
person or persons may deem necessary or advisable to enable
Continental Airlines, Inc. to comply with the Securities Act of
1933 and any rules, regulations and requirements of the Securities
and Exchange Commission in connection with the Registration
Statement on Form S-8 ("Registration Statement") relating to the
Continental Airlines, Inc. 1998 Stock Incentive Plan, including
specifically, but not limited to, power and authority to sign for
the undersigned the Registration Statement and any and all
amendments (including post-effective amendments) thereto, and the
undersigned does hereby ratify and confirm all that such person or
persons shall do or cause to be done by virtue hereof.
Date: May 21, 1998 By: /s/ Thomas J. Barrack
Print Name: Thomas J. Barrack Jr.
POWER OF ATTORNEY
The undersigned officer and/or director of Continental
Airlines, Inc. does hereby constitute and appoint Jeffery A.
Smisek, Scott R. Peterson, Sarah E. Hagy, or any of them, as the
undersigned's true and lawful attorneys-in-fact and agents to do
any and all acts and things in the undersigned's name and behalf in
the undersigned's capacities as officer and/or director, and to
execute any and all instruments for the undersigned and in the
undersigned's name in the capacities indicated below which such
person or persons may deem necessary or advisable to enable
Continental Airlines, Inc. to comply with the Securities Act of
1933 and any rules, regulations and requirements of the Securities
and Exchange Commission in connection with the Registration
Statement on Form S-8 ("Registration Statement") relating to the
Continental Airlines, Inc. 1998 Stock Incentive Plan, including
specifically, but not limited to, power and authority to sign for
the undersigned the Registration Statement and any and all
amendments (including post-effective amendments) thereto, and the
undersigned does hereby ratify and confirm all that such person or
persons shall do or cause to be done by virtue hereof.
Date: May 21, 1998 By: /s/ David Bonderman
Print Name: David Bonderman
POWER OF ATTORNEY
The undersigned officer and/or director of Continental
Airlines, Inc. does hereby constitute and appoint Jeffery A.
Smisek, Scott R. Peterson, Sarah E. Hagy, or any of them, as the
undersigned's true and lawful attorneys-in-fact and agents to do
any and all acts and things in the undersigned's name and behalf in
the undersigned's capacities as officer and/or director, and to
execute any and all instruments for the undersigned and in the
undersigned's name in the capacities indicated below which such
person or persons may deem necessary or advisable to enable
Continental Airlines, Inc. to comply with the Securities Act of
1933 and any rules, regulations and requirements of the Securities
and Exchange Commission in connection with the Registration
Statement on Form S-8 ("Registration Statement") relating to the
Continental Airlines, Inc. 1998 Stock Incentive Plan, including
specifically, but not limited to, power and authority to sign for
the undersigned the Registration Statement and any and all
amendments (including post-effective amendments) thereto, and the
undersigned does hereby ratify and confirm all that such person or
persons shall do or cause to be done by virtue hereof.
Date: May 21, 1998 By: /s/ Greg Brenneman
Print Name: Greg Brenneman
POWER OF ATTORNEY
The undersigned officer and/or director of Continental
Airlines, Inc. does hereby constitute and appoint Jeffery A.
Smisek, Scott R. Peterson, Sarah E. Hagy, or any of them, as the
undersigned's true and lawful attorneys-in-fact and agents to do
any and all acts and things in the undersigned's name and behalf in
the undersigned's capacities as officer and/or director, and to
execute any and all instruments for the undersigned and in the
undersigned's name in the capacities indicated below which such
person or persons may deem necessary or advisable to enable
Continental Airlines, Inc. to comply with the Securities Act of
1933 and any rules, regulations and requirements of the Securities
and Exchange Commission in connection with the Registration
Statement on Form S-8 ("Registration Statement") relating to the
Continental Airlines, Inc. 1998 Stock Incentive Plan, including
specifically, but not limited to, power and authority to sign for
the undersigned the Registration Statement and any and all
amendments (including post-effective amendments) thereto, and the
undersigned does hereby ratify and confirm all that such person or
persons shall do or cause to be done by virtue hereof.
Date: May 21, 1998 By: /s/ Pat Foley
Print Name: Pat Foley
POWER OF ATTORNEY
The undersigned officer and/or director of Continental
Airlines, Inc. does hereby constitute and appoint Jeffery A.
Smisek, Scott R. Peterson, Sarah E. Hagy, or any of them, as the
undersigned's true and lawful attorneys-in-fact and agents to do
any and all acts and things in the undersigned's name and behalf in
the undersigned's capacities as officer and/or director, and to
execute any and all instruments for the undersigned and in the
undersigned's name in the capacities indicated below which such
person or persons may deem necessary or advisable to enable
Continental Airlines, Inc. to comply with the Securities Act of
1933 and any rules, regulations and requirements of the Securities
and Exchange Commission in connection with the Registration
Statement on Form S-8 ("Registration Statement") relating to the
Continental Airlines, Inc. 1998 Stock Incentive Plan, including
specifically, but not limited to, power and authority to sign for
the undersigned the Registration Statement and any and all
amendments (including post-effective amendments) thereto, and the
undersigned does hereby ratify and confirm all that such person or
persons shall do or cause to be done by virtue hereof.
Date: May 21, 1998 By: /s/ Douglas McCorkindale
Print Name: Douglas McCorkindale
POWER OF ATTORNEY
The undersigned officer and/or director of Continental
Airlines, Inc. does hereby constitute and appoint Jeffery A.
Smisek, Scott R. Peterson, Sarah E. Hagy, or any of them, as the
undersigned's true and lawful attorneys-in-fact and agents to do
any and all acts and things in the undersigned's name and behalf in
the undersigned's capacities as officer and/or director, and to
execute any and all instruments for the undersigned and in the
undersigned's name in the capacities indicated below which such
person or persons may deem necessary or advisable to enable
Continental Airlines, Inc. to comply with the Securities Act of
1933 and any rules, regulations and requirements of the Securities
and Exchange Commission in connection with the Registration
Statement on Form S-8 ("Registration Statement") relating to the
Continental Airlines, Inc. 1998 Stock Incentive Plan, including
specifically, but not limited to, power and authority to sign for
the undersigned the Registration Statement and any and all
amendments (including post-effective amendments) thereto, and the
undersigned does hereby ratify and confirm all that such person or
persons shall do or cause to be done by virtue hereof.
Date: May 21, 1998 By: /s/ George G.C. Parker
Print Name: George G.C. Parker
POWER OF ATTORNEY
The undersigned officer and/or director of Continental
Airlines, Inc. does hereby constitute and appoint Jeffery A.
Smisek, Scott R. Peterson, Sarah E. Hagy, or any of them, as the
undersigned's true and lawful attorneys-in-fact and agents to do
any and all acts and things in the undersigned's name and behalf in
the undersigned's capacities as officer and/or director, and to
execute any and all instruments for the undersigned and in the
undersigned's name in the capacities indicated below which such
person or persons may deem necessary or advisable to enable
Continental Airlines, Inc. to comply with the Securities Act of
1933 and any rules, regulations and requirements of the Securities
and Exchange Commission in connection with the Registration
Statement on Form S-8 ("Registration Statement") relating to the
Continental Airlines, Inc. 1998 Stock Incentive Plan, including
specifically, but not limited to, power and authority to sign for
the undersigned the Registration Statement and any and all
amendments (including post-effective amendments) thereto, and the
undersigned does hereby ratify and confirm all that such person or
persons shall do or cause to be done by virtue hereof.
Date: May 21, 1998 By: /s/ Richard W. Pogue
Print Name: Richard W. Pogue
POWER OF ATTORNEY
The undersigned officer and/or director of Continental
Airlines, Inc. does hereby constitute and appoint Jeffery A.
Smisek, Scott R. Peterson, Sarah E. Hagy, or any of them, as the
undersigned's true and lawful attorneys-in-fact and agents to do
any and all acts and things in the undersigned's name and behalf in
the undersigned's capacities as officer and/or director, and to
execute any and all instruments for the undersigned and in the
undersigned's name in the capacities indicated below which such
person or persons may deem necessary or advisable to enable
Continental Airlines, Inc. to comply with the Securities Act of
1933 and any rules, regulations and requirements of the Securities
and Exchange Commission in connection with the Registration
Statement on Form S-8 ("Registration Statement") relating to the
Continental Airlines, Inc. 1998 Stock Incentive Plan, including
specifically, but not limited to, power and authority to sign for
the undersigned the Registration Statement and any and all
amendments (including post-effective amendments) thereto, and the
undersigned does hereby ratify and confirm all that such person or
persons shall do or cause to be done by virtue hereof.
Date: May 21, 1998 By: /s/ William S. Price III
Print Name: William S. Price III
POWER OF ATTORNEY
The undersigned officer and/or director of Continental
Airlines, Inc. does hereby constitute and appoint Jeffery A.
Smisek, Scott R. Peterson, Sarah E. Hagy, or any of them, as the
undersigned's true and lawful attorneys-in-fact and agents to do
any and all acts and things in the undersigned's name and behalf in
the undersigned's capacities as officer and/or director, and to
execute any and all instruments for the undersigned and in the
undersigned's name in the capacities indicated below which such
person or persons may deem necessary or advisable to enable
Continental Airlines, Inc. to comply with the Securities Act of
1933 and any rules, regulations and requirements of the Securities
and Exchange Commission in connection with the Registration
Statement on Form S-8 ("Registration Statement") relating to the
Continental Airlines, Inc. 1998 Stock Incentive Plan, including
specifically, but not limited to, power and authority to sign for
the undersigned the Registration Statement and any and all
amendments (including post-effective amendments) thereto, and the
undersigned does hereby ratify and confirm all that such person or
persons shall do or cause to be done by virtue hereof.
Date: May 21, 1998 By: /s/ Donald L. Sturm
Print Name: Donald L. Sturm
POWER OF ATTORNEY
The undersigned officer and/or director of Continental
Airlines, Inc. does hereby constitute and appoint Jeffery A.
Smisek, Scott R. Peterson, Sarah E. Hagy, or any of them, as the
undersigned's true and lawful attorneys-in-fact and agents to do
any and all acts and things in the undersigned's name and behalf in
the undersigned's capacities as officer and/or director, and to
execute any and all instruments for the undersigned and in the
undersigned's name in the capacities indicated below which such
person or persons may deem necessary or advisable to enable
Continental Airlines, Inc. to comply with the Securities Act of
1933 and any rules, regulations and requirements of the Securities
and Exchange Commission in connection with the Registration
Statement on Form S-8 ("Registration Statement") relating to the
Continental Airlines, Inc. 1998 Stock Incentive Plan, including
specifically, but not limited to, power and authority to sign for
the undersigned the Registration Statement and any and all
amendments (including post-effective amendments) thereto, and the
undersigned does hereby ratify and confirm all that such person or
persons shall do or cause to be done by virtue hereof.
Date: May 21, 1998 By: /s/ Charles A. Yamarone
Print Name: Charles A. Yamarone