EXHIBIT 10.2
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT ("Agreement")
is made by and between CONTINENTAL AIRLINES, INC., a Delaware
corporation ("Company"), and Jeffery A. Smisek ("Executive").
W I T N E S S E T H:
WHEREAS, Company and Executive are parties to that certain
Employment Agreement dated as of June 5, 1995 (the "Current
Agreement"); and
WHEREAS, the Human Resources Committee of the Board of
Directors, at its November 2, 1995 meeting, authorized the
amendment of the employment agreements of officers of the Company,
selected on a performance basis by the Chief Executive Officer of
the Company, with respect to certain matters; and
WHEREAS, Executive has been so selected by the Chief Executive
Officer; and
WHEREAS, in connection therewith, the parties desire to amend
the Current Agreement and restate it, as so amended, in its
entirety as this Agreement;
NOW, THEREFORE, for and in consideration of the mutual
promises, covenants and obligations contained herein, Company and
Executive agree as follows:
ARTICLE 1: EMPLOYMENT AND DUTIES
1.1 Employment; Effective Date. Company agrees to employ
Executive and Executive agrees to be employed by Company, beginning
as of the Effective Date (as hereinafter defined) and continuing
for the period of time set forth in Article 2 of this Agreement,
subject to the terms and conditions of this Agreement. For
purposes of this Agreement, the "Effective Date" shall be June 6,
1995.
1.2 Position. From and after the Effective Date, Company
shall employ Executive in the position of Senior Vice President,
General Counsel and Secretary of Company, or in such other position
or positions as the parties mutually may agree.
1.3 Duties and Services. Executive agrees to serve in the
position referred to in paragraph 1.2 and to perform diligently and
to the best of his abilities the duties and services appertaining
to such office as set forth in the Bylaws of Company in effect on
the Effective Date, as well as such additional duties and services
appropriate to such office which the parties mutually may agree
upon from time to time.
ARTICLE 2: TERM AND TERMINATION OF EMPLOYMENT
2.1 Term. Unless sooner terminated pursuant to other
provisions hereof, Company agrees to employ Executive for a three-
year period beginning on the Effective Date.
2.2 Company's Right to Terminate. Notwithstanding the
provisions of paragraph 2.1, Company, acting pursuant to an express
resolution of the Board of Directors of Company (the "Board of
Directors") or the Human Resources Committee of the Board of
Directors (the "HR Committee"), shall have the right to terminate
Executive's employment under this Agreement at any time for any of
the following reasons:
(i) upon Executive's death;
(ii) upon Executive's becoming incapacitated for a
period of at least 180 days by accident, sickness or other
circumstance which renders him mentally or physically
incapable of performing the material duties and services
required of him hereunder on a full-time basis during such
period;
(iii) for cause, which for purposes of this Agreement
shall mean Executive's gross negligence or willful misconduct
in the performance of, or Executive's abuse of alcohol or
drugs rendering him unable to perform, the material duties
and services required of him pursuant to this Agreement;
(iv) for Executive's material breach of any provision
of this Agreement which, if correctable, remains uncorrected
for 30 days following written notice to Executive by Company
of such breach; or
(v) for any other reason whatsoever, in the sole
discretion of the Board of Directors or the Human Resources
Committee.
2.3 Executive's Right to Terminate. Notwithstanding the
provisions of paragraph 2.1, Executive shall have the right to
terminate his employment under this Agreement at any time for any
of the following reasons:
(i) the assignment to Executive by the Board of
Directors or HR Committee or other officers or representatives
of Company of duties materially inconsistent with the duties
associated with the position described in paragraph 1.2 as
such duties are constituted as of the Effective Date;
(ii) a material diminution in the nature or scope of
Executive's authority, responsibilities, or title from those
applicable to him as of the Effective Date;
(iii) the occurrence of material acts or conduct on the
part of Company or its officers or representatives which
prevent Executive from performing his duties and
responsibilities pursuant to this Agreement;
(iv) Company requiring Executive to be permanently
based anywhere outside a major urban center in Texas;
(v) the taking of any action by Company that would
materially adversely affect the corporate amenities enjoyed by
Executive on the Effective Date;
(vi) a material breach by Company of any provision of
this Agreement which, if correctable, remains uncorrected for
30 days following written notice of such breach by Executive
to Company; or
(vii) for any other reason whatsoever, in the sole
discretion of Executive.
2.4 Notice of Termination. If Company or Executive desires
to terminate Executive's employment hereunder at any time prior to
expiration of the term of employment as provided in paragraph 2.1,
it or he shall do so by giving written notice to the other party
that it or he has elected to terminate Executive's employment
hereunder and stating the effective date and reason for such
termination, provided that no such action shall alter or amend any
other provisions hereof or rights arising hereunder.
ARTICLE 3: COMPENSATION AND BENEFITS
3.1 Base Salary. During the period of this Agreement,
Executive shall receive a minimum annual base salary equal to the
greater of (i) $250,000.00 or (ii) such amount as the parties
mutually may agree upon from time to time. Executive's annual base
salary at the date of this Agreement is $300,000.00. Executive's
annual base salary shall be paid in equal installments in
accordance with Company's standard policy regarding payment of
compensation to executives but no less frequently than semimonthly.
3.2 Bonus Programs. Executive shall participate in each cash
bonus program maintained by Company on and after the Effective Date
(including, without limitation, participation effective as of March
27, 1995 in any such program maintained for the year during which
such date occurs) at a level which is not less than the maximum
participation level made available to any other executive of
Company at substantially the same title or level of Executive
(determined without regard to period of service or other criteria
that might otherwise be necessary to entitle Executive to such
level of participation).
3.3 Vacation and Sick Leave. During each year of his
employment, Executive shall be entitled to vacation and sick leave
benefits equal to the maximum available to any Company executive,
determined without regard to the period of service that might
otherwise be necessary to entitle Executive to such vacation or
sick leave under standard Company policy.
3.4 Other Perquisites. During his employment hereunder,
Executive shall be afforded the following benefits as incidences of
his employment:
(i) Business and Entertainment Expenses - Subject to
Company's standard policies and procedures with respect to
expense reimbursement as applied to its executive employees
generally, Company shall reimburse Executive for, or pay on
behalf of Executive, reasonable and appropriate expenses
incurred by Executive for business related purposes, including
dues and fees to industry and professional organizations,
costs of entertainment and business development, and costs
reasonably incurred as a result of Executive's spouse
accompanying Executive on business travel.
(ii) Parking - Company shall provide at no expense to
Executive a parking place convenient to Executive's office and
a parking place at Intercontinental Airport in Houston, Texas.
(iii) Other Company Benefits - Executive and, to the
extent applicable, Executive's family, dependents and
beneficiaries, shall be allowed to participate in all
benefits, plans and programs, including improvements or
modifications of the same, which are now, or may hereafter be,
available to similarly-situated Company employees. Such
benefits, plans and programs may include, without limitation,
profit sharing plan, thrift plan, annual physical
examinations, health insurance or health care plan, life
insurance, disability insurance, pension plan, pass privileges
on Continental Airlines, Flight Benefits and the like.
Company shall not, however, by reason of this paragraph be
obligated to institute, maintain, or refrain from changing,
amending or discontinuing, any such benefit plan or program,
so long as such changes are similarly applicable to executive
employees generally.
ARTICLE 4: EFFECT OF TERMINATION ON COMPENSATION
4.1 By Expiration. If Executive's employment hereunder shall
terminate upon expiration of the term provided in paragraph 2.1
hereof, then all compensation and all benefits to Executive
hereunder shall terminate contemporaneously with termination of his
employment; provided, however, that Executive shall be provided
with Flight Benefits for the remainder of Executive's lifetime.
4.2 By Company. If Executive's employment hereunder shall be
terminated by Company prior to expiration of the term provided in
paragraph 2.1 hereof then, upon such termination, regardless of the
reason therefor, all compensation and all benefits to Executive
hereunder shall terminate contemporaneously with the termination of
such employment, except if such termination shall be for any reason
other than those encompassed by paragraphs 2.2(i), (ii), (iii) or
(iv), then Company shall (a) pay Executive on or before the
effective date of such termination a lump-sum, cash payment in an
amount equal to the Termination Payment (as such term is defined in
paragraph 4.7), (b) provide Executive with Flight Benefits (as such
term is defined in paragraph 4.7) for the remainder of Executive's
lifetime, (c) provide Executive with Outplacement Services (as such
term is defined in paragraph 4.7), and (d) provide Executive and
his eligible dependents with Continuation Coverage (as such term is
defined in paragraph 4.7) for the Severance Period.
4.3 By Executive. If Executive's employment hereunder shall
be terminated by Executive prior to expiration of the term provided
in paragraph 2.1 hereof then, upon such termination, regardless of
the reason therefor, all compensation and benefits to Executive
hereunder shall terminate contemporaneously with the termination of
such employment, except if such termination shall be pursuant to
paragraphs 2.3(i), (ii), (iii), (iv), (v), or (vi), then Company
shall provide Executive with the payments and benefits described in
clauses (a) through (d) of paragraph 4.2.
4.4 Certain Additional Payments by Company. Notwithstanding
anything to the contrary in this Agreement, if any payment,
distribution or provision of a benefit by Company to or for the
benefit of Executive, whether paid or payable, distributed or
distributable or provided or to be provided pursuant to the terms
of this Agreement or otherwise (a "Payment"), would be subject to
an excise or other special additional tax that would not have been
imposed absent such Payment (including, without limitation, any
excise tax imposed by Section 4999 of the Internal Revenue Code of
1986, as amended), or any interest or penalties with respect to
such excise or other additional tax (such excise or other
additional tax, together with any such interest or penalties, are
hereinafter collectively referred to as the "Excise Tax"), Company
shall pay to Executive an additional payment (a "Gross-up Payment")
in an amount such that after payment by Executive of all taxes
(including any interest or penalties imposed with respect to such
taxes), including any income taxes and Excise Taxes imposed on any
Gross-up Payment, Executive retains an amount of the Gross-up
Payment (taking into account any similar gross-up payments to
Executive under the Incentive Plan (as such term is defined in
paragraph 4.7)) equal to the Excise Tax imposed upon the Payments.
Company and Executive shall make an initial determination as to
whether a Gross-up Payment is required and the amount of any such
Gross-up Payment. Executive shall notify Company in writing of any
claim by the Internal Revenue Service which, if successful, would
require Company to make a Gross-up Payment (or a Gross-up Payment
in excess of that, if any, initially determined by Company and
Executive) within ten business days after the receipt of such
claim. Company shall notify Executive in writing at least ten
business days prior to the due date of any response required with
respect to such claim if it plans to contest the claim. If Company
decides to contest such claim, Executive shall cooperate fully with
Company in such action; provided, however, Company shall bear and
pay directly or indirectly all costs and expenses (including
additional interest and penalties) incurred in connection with such
action and shall indemnify and hold Executive harmless, on an
after-tax basis, for any Excise Tax or income tax, including
interest and penalties with respect thereto, imposed as a result of
Company's action. If, as a result of Company's action with respect
to a claim, Executive receives a refund of any amount paid by
Company with respect to such claim, Executive shall promptly pay
such refund to Company. If Company fails to timely notify
Executive whether it will contest such claim or Company determines
not to contest such claim, then Company shall immediately pay to
Executive the portion of such claim, if any, which it has not
previously paid to Executive.
4.5 Payment Obligations Absolute. Company's obligation to
pay Executive the amounts and to make the arrangements provided in
this Article 4 shall be absolute and unconditional and shall not be
affected by any circumstances, including, without limitation, any
set-off, counterclaim, recoupment, defense or other right which
Company (including its subsidiaries and affiliates) may have
against him or anyone else. All amounts payable by Company shall
be paid without notice or demand. Executive shall not be obligated
to seek other employment in mitigation of the amounts payable or
arrangements made under any provision of this Article 4, and,
except as provided in paragraph 4.7 with respect to Continuation
Coverage, the obtaining of any such other employment (or the
engagement in any endeavor as an independent contractor, sole
proprietor, partner, or joint venturer) shall in no event effect
any reduction of Company's obligations to make (or cause to be
made) the payments and arrangements required to be made under this
Article 4.
4.6 Liquidated Damages. In light of the difficulties in
estimating the damages upon termination of this Agreement, Company
and Executive hereby agree that the payments and benefits, if any,
to be received by Executive pursuant to this Article 4 shall be
received by Executive as liquidated damages. Payment of the
Termination Payment pursuant to paragraphs 4.2 or 4.3 shall be in
lieu of any severance benefit Executive may be entitled to under
any severance plan or policy maintained by Company.
4.7 Certain Definitions and Additional Terms. As used
herein, the following capitalized terms shall have the meanings
assigned below:
(i) "Annualized Compensation" shall mean an amount
equal to the sum of (1) Executive's annual base salary
pursuant to paragraph 3.1 in effect immediately prior to
Executive's termination of employment hereunder and (2) a
deemed annual bonus which shall be equal to 25% of the amount
described in clause (1) of this paragraph 4.7(i);
(ii) "Change in Control" shall have the meaning
assigned to such term in the Incentive Plan (as amended by the
First Amendment thereto) in effect as of the date of execution
of this Agreement;
(iii) "Continuation Coverage" shall mean the continued
coverage of Executive and his eligible dependents under
Company's welfare benefit plans available to executives of
Company who have not terminated employment (or the provision
of equivalent benefits), including, without limitation,
medical, health, dental, life insurance, disability, vision
care, accidental death and dismemberment, and prescription
drug, at no greater cost to Executive than that applicable to
a similarly situated Company executive who has not terminated
employment; provided, however, that (1) subject to clause (2)
below, the coverage under a particular welfare benefit plan
(or the receipt of equivalent benefits) shall terminate upon
Executive's receipt of comparable benefits from a subsequent
employer and (2) if Executive (and/or his eligible dependents)
would have been entitled to retiree coverage under a
particular welfare benefit plan had he voluntarily retired on
the date of his termination of employment, then such coverage
shall be continued as provided in such plan upon the
expiration of the period Continuation Coverage is to be
provided pursuant to this Article 4. Notwithstanding any
provision in this Article 4 to the contrary, Executive's
entitlement to any benefit continuation pursuant to Section
601 et. seq. of the Employee Retirement Income Security Act of
1974, as amended, shall commence at the end of the period of,
and shall not be reduced by the provision of, any applicable
Continuation Coverage;
(iv) "Flight Benefits" shall mean flight benefits on
each airline operated by the Company or any of its affiliates
or any successor or successors thereto (the "CO system"),
consisting of the highest priority space available flight
passes for Executive and his eligible family members (as such
eligibility is in effect on the date hereof), a UATP card (or,
in the event of discontinuance of the UATP program, a similar
charge card permitting the purchase of air travel through
direct billing to the Company or any of its affiliates or any
successor or successors thereto (a "Similar Card")) in
Executive's name for charging flights (in any fare class) on
the CO system for Executive, Executive's spouse, Executive's
family and significant others as determined by Executive, a
Gold Elite OnePass Card (or similar highest category successor
frequent flyer card) in Executive's name for use on the CO
system, a membership for Executive and Executive's spouse in
the Company's President's Club (or any successor program
maintained in the CO system) and reimbursement (while an
officer of the Company) of up to $10,000 annually for U.S.
federal, state or local income taxes on imputed income
resulting from such flights (such imputed income to be
calculated during the term of such Flight Benefits at the
lowest published fare (i.e., 21 day advance purchase coach
fare or other lowest available fare) for the applicable flight
on the date of such flight, regardless of the actual fare
class booked or flown, or as otherwise required by law);
(v) "Incentive Plan" shall mean Company's 1994
Incentive Equity Plan, as amended;
(vi) "Outplacement Services" shall mean outplacement
services, at Company's cost and for a period of twelve months
beginning on the date of Executive's termination of
employment, to be rendered by an agency selected by Executive
and approved by the Board of Directors or HR Committee (with
such approval not to be unreasonably withheld);
(vii) "Severance Period" shall mean:
(1) in the case of a termination of Executive's
employment with Company that occurs within two years after the
date upon which a Change in Control occurs, a period
commencing on the date of such termination and continuing for
thirty-six months; or
(2) in the case of a termination of Executive's
employment with Company that occurs prior to a Change in
Control or after the date which is two years after a Change in
Control occurs, a period commencing on the date of such
termination and continuing for twenty-four months; and
(viii) "Termination Payment" shall mean an amount equal
to Executive's Annualized Compensation multiplied by a
fraction, the numerator of which is the number of months in
the Severance Period and the denominator of which is twelve.
Executive agrees that, after receipt of an invoice or other
accounting statement therefor, he will promptly (and in any event
within 45 days after receipt of such invoice or other accounting
statement) reimburse the Company for all charges on Executive's
UATP card (or Similar Card) which are not for flights on the CO
system and which are not otherwise reimbursable to Executive under
the provisions of paragraph 3.4(i) hereof. Executive agrees that
the credit availability under Executive's UATP card (or Similar
Card) may be suspended if Executive does not timely reimburse the
Company as described in the foregoing sentence; provided, that,
immediately upon the Company's receipt of Executive's reimbursement
in full, the credit availability under Executive's UATP card (or
Similar Card) will be restored. The sole cost to Executive of
flights on the CO system pursuant to use of Executive's Flight
Benefits will be the imputed income with respect to flights on the
CO system charged on Executive's UATP card (or Similar Card),
calculated throughout the term of Executive's Flight Benefits at
the lowest published fare (i.e., 21 day advance purchase coach fare
or other lowest available fare) for the applicable flight on the
date of such flight, regardless of the actual fare class booked or
flown, or as otherwise required by law, and reported to Executive
as required by applicable law. With respect to any period with
respect to which the Company is obligated to provide up to $10,000
of reimbursement for income taxes as described in paragraph 4.7
(iv) above, Executive will provide to the Company, upon request, a
calculation or other evidence of Executive's marginal tax rate
sufficient to permit the Company to calculate accurately the amount
to be so reimbursed to Executive, and Executive understands that
the Company will not make any gross-up payment to Executive with
respect to the income attributable to such reimbursement. Executive
agrees that he will not resell or permit to be resold any tickets
issued on the CO system in connection with the Flight Benefits.
Executive shall be issued a UATP card (or Similar Card), a Gold
Elite OnePass Card (or similar highest category successor frequent
flyer card), a membership card in the Company's Presidents Club (or
any successor program maintained in the CO system) for Executive
and Executive's spouse, an appropriate flight pass identification
card and an Employee Travel Card, each valid at all times during
the term of Executive's Flight Benefits.
ARTICLE 5: MISCELLANEOUS
5.1 Interest and Indemnification. If any payment to
Executive provided for in this Agreement is not made by Company
when due, Company shall pay to Executive interest on the amount
payable from the date that such payment should have been made until
such payment is made, which interest shall be calculated at 3% plus
the prime or base rate of interest announced by Texas Commerce Bank
National Association (or any successor thereto) at its principal
office in Houston, Texas (but not in excess of the highest lawful
rate), and such interest rate shall change when and as any such
change in such prime or base rate shall be announced by such bank.
If Executive shall obtain any money judgment or otherwise prevail
with respect to any litigation brought by Executive or Company to
enforce or interpret any provision contained herein, Company, to
the fullest extent permitted by applicable law, hereby indemnifies
Executive for his reasonable attorneys' fees and disbursements
incurred in such litigation and hereby agrees (i) to pay in full
all such fees and disbursements and (ii) to pay prejudgment
interest on any money judgment obtained by Executive from the
earliest date that payment to him should have been made under this
Agreement until such judgment shall have been paid in full, which
interest shall be calculated at the rate set forth in the preceding
sentence.
5.2 Notices. For purposes of this Agreement, notices and all
other communications provided for herein shall be in writing and
shall be deemed to have been duly given when personally delivered
or when mailed by United States registered or certified mail,
return receipt requested, postage prepaid, addressed as follows:
If to Company to: Continental Airlines, Inc.
2929 Allen Parkway, Suite 2010
Houston, Texas 77019
Attention: General Counsel
If to Executive to: Jeffery A. Smisek
5211 Briar Drive
Houston, Texas 77056
or to such other address as either party may furnish to the other
in writing in accordance herewith, except that notices of changes
of address shall be effective only upon receipt.
5.3 Applicable Law. This contract is entered into under, and
shall be governed for all purposes by, the laws of the State of
Texas.
5.4 No Waiver. No failure by either party hereto at any time
to give notice of any breach by the other party of, or to require
compliance with, any condition or provision of this Agreement shall
be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time.
5.5 Severability. If a court of competent jurisdiction
determines that any provision of this Agreement is invalid or
unenforceable, then the invalidity or unenforceability of that
provision shall not affect the validity or enforceability of any
other provision of this Agreement, and all other provisions shall
remain in full force and effect.
5.6 Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an original,
but all of which together will constitute one and the same
Agreement.
5.7 Withholding of Taxes and Other Employee Deductions.
Company may withhold from any benefits and payments made pursuant
to this Agreement all federal, state, city and other taxes as may
be required pursuant to any law or governmental regulation or
ruling and all other normal employee deductions made with respect
to Company's employees generally.
5.8 Headings. The paragraph headings have been inserted for
purposes of convenience and shall not be used for interpretive
purposes.
5.9 Gender and Plurals. Wherever the context so requires,
the masculine gender includes the feminine or neuter, and the
singular number includes the plural and conversely.
5.10 Successors. This Agreement shall be binding upon and
inure to the benefit of Company and any successor of the Company,
including without limitation any person, association, or entity
which may hereafter acquire or succeed to all or substantially all
of the business or assets of Company by any means whether direct or
indirect, by purchase, merger, consolidation, or otherwise. Except
as provided in the preceding sentence, this Agreement, and the
rights and obligations of the parties hereunder, are personal and
neither this Agreement, nor any right, benefit or obligation of
either party hereto, shall be subject to voluntary or involuntary
assignment, alienation or transfer, whether by operation of law or
otherwise, without the prior written consent of the other party.
5.11 Term. This Agreement has a term co-extensive with the
term of employment as set forth in paragraph 2.1. Termination
shall not affect any right or obligation of any party which is
accrued or vested prior to or upon such termination.
5.12 Entire Agreement. Except as provided in (i) the benefits,
plans, and programs referenced in paragraph 3.4(iii), (ii) any
signed written agreement heretofore or contemporaneously executed
by Company and Executive with respect to Awards (as defined in the
Incentive Plan) under the Incentive Plan, or (iii) any signed
written agreement hereafter executed by Company and Executive, this
Agreement constitutes the entire agreement of the parties with
regard to the subject matter hereof, and contains all the
covenants, promises, representations, warranties and agreements
between the parties with respect to employment of Executive by
Company. Without limiting the scope of the preceding sentence, all
prior understandings and agreements among the parties hereto
relating to the subject matter hereof are hereby null and void and
of no further force and effect. Any modification of this Agreement
shall be effective only if it is in writing and signed by the party
to be charged.
5.13 Deemed Resignations. Any termination of Executive's
employment shall constitute an automatic resignation of Executive
as an officer of Company and each affiliate of Company, and an
automatic resignation of Executive from the Board of Directors (if
applicable) and from the board of directors of any affiliate of
Company.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the 15th day of November, 1995.
CONTINENTAL AIRLINES, INC.
By: /s/ Gordon M. Bethune
Name: Gordon M. Bethune
Title: Chief Executive Officer
"EXECUTIVE"
/s/ Jeffery A. Smisek
Jeffery A. Smisek
AMENDMENT TO EMPLOYMENT AGREEMENT
This Amendment to Employment Agreement (this "Amendment") is
made by and between Continental Airlines, Inc., a Delaware
corporation ("Company"), and Jeffery A. Smisek ("Executive").
WITNESSETH:
WHEREAS, Company and Executive are parties to that certain
Amended and Restated Employment Agreement dated as of November 15,
1995 (the "Existing Agreement"); and
WHEREAS, the Human Resources Committee of the Board of
Directors of the Company, on April 17, 1996, authorized the
execution and delivery on behalf of the Company of this Amendment;
and
WHEREAS, Company and Executive desire to amend the Existing
Agreement as hereinafter set forth;
NOW, THEREFORE, for and in consideration of the mutual
promises, covenants and obligations contained herein, Company and
Executive agree as follows:
1. Paragraph 2.1 of the Existing Agreement is hereby amended to
read in its entirety as follows:
"2.1 Term. Unless sooner terminated pursuant to other
provisions hereof, Company agrees to employ Executive for a
four-year period beginning on the Effective Date."
2. Paragraph 4.3 of the Existing Agreement is hereby amended to
read in its entirety as follows:
"4.3 By Executive. If Executive's employment hereunder shall
be terminated by Executive prior to expiration of the term
provided in paragraph 2.1 hereof then, upon such termination,
regardless of the reason therefor, all compensation and
benefits to Executive hereunder shall terminate
contemporaneously with the termination of such employment,
except Executive shall be provided Flight Benefits (as such
term is defined in paragraph 4.7) for the remainder of
Executive's lifetime and, if such termination shall be
pursuant to paragraphs 2.3(i), (ii), (iii), (iv), (v), or
(vi), then Company shall provide Executive with the payments
and benefits described in clauses (a), (c) and (d) of para-
graph 4.2."
3. Paragraph 4.7(ii) of the Existing Agreement is hereby amended
to read in its entirety as follows:
"(ii) "Change in Control" shall have the meaning assigned to
such term in the Incentive Plan (as amended by the Board of
Directors on April 19, 1996 and in effect on such date);"
4. Contemporaneously with his execution and delivery hereof,
Executive is executing and delivering to the Company a Waiver and
Amendment to Employee Stock Option Grant and a Waiver and Amendment
to Restricted Stock Grant in the forms thereof previously approved
by the Human Resources Committee of the Board of Directors of the
Company.
5. The Existing Agreement, as amended by this Amendment, is hereby
ratified and confirmed and shall continue in full force and effect
in accordance with its terms.
IN WITNESS WHEREOF, the parties hereto have executed this
Amendment as of the 19th day of April, 1996.
CONTINENTAL AIRLINES, INC.
By: /s/ Gordon M. Bethune
Name: Gordon M. Bethune
Title: Chief Executive Officer
EXECUTIVE
/s/ Jeffery A. Smisek
AMENDMENT TO EMPLOYMENT AGREEMENT
This Amendment to Employment Agreement (this "Amendment") is
made by and between Continental Airlines, Inc., a Delaware
corporation ("Company"), and Jeffery A. Smisek ("Executive").
WITNESSETH:
WHEREAS, Company and Executive are parties to that certain
Amended and Restated Employment Agreement dated as of November 15,
1995, as amended by Amendment to Employment Agreement dated as of
April 19, 1996 (the "Existing Agreement"); and
WHEREAS, the Human Resources Committee of the Board of
Directors of the Company, on September 30, 1996, authorized the
execution and delivery on behalf of the Company of this Amendment;
and
WHEREAS, Company and Executive desire to amend the Existing
Agreement as hereinafter set forth;
NOW, THEREFORE, for and in consideration of the mutual
promises, covenants and obligations contained herein and other good
and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, Company and Executive agree as follows:
1. Paragraph 4.7(i) of the Existing Agreement is hereby amended to
read in its entirety as follows:
"(i) "Annualized Compensation" shall mean an amount equal to
the sum of (1) Executive's annual base salary pursuant to
paragraph 3.1 in effect immediately prior to Executive's
termination of employment hereunder and (2) a deemed annual
bonus which shall be equal to the Bonus Percentage of the
amount described in clause (1) of this paragraph 4.7(i). The
"Bonus Percentage" shall be a percentage equal to the annual
percentage of base salary (i.e., 0% to 125%) paid or payable
to a participant under the Company's Executive Bonus Program
(and its predecessor or any successor plan or program) with
respect to the most recent fiscal year ended prior to
Executive's termination of employment; provided that, with
respect to fiscal year 1996 only, no amount attributable to
the 25% cash bonus paid January 2, 1996 and approved by the
Human Resources Committee of the Board of Directors of the
Company at its meeting on November 2, 1995 shall be included
in the Bonus Percentage."
2. The Existing Agreement, as amended by this Amendment, is hereby
ratified and confirmed and shall continue in full force and effect
in accordance with its terms.
IN WITNESS WHEREOF, the parties hereto have executed this
Amendment as of the 30th day of September, 1996.
CONTINENTAL AIRLINES, INC.
By: /s/ Gordon M. Bethune
Name: Gordon M. Bethune
Title: Chief Executive Officer
EXECUTIVE
/s/ Jeffery A. Smisek