Attached files
Exhibit
10.18
CONTINENTAL
AIRLINES, INC.
PROFIT
SHARING PLAN
(As
adopted on February 17, 2010)
CONTINENTAL
AIRLINES, INC.
PROFIT
SHARING PLAN
(As
adopted on February 17, 2010)
ARTICLE I
DEFINITIONS
As used
in this Plan, the following terms with initial capital letters have the meanings
set forth below, unless the context reasonably requires a broader, narrower or
different meaning.
1.1 Award. “Award” means, with
respect to each Year, the amount equal to the portion of the Annual Award Pool
allocated to each Participant for such Year as determined under Section
6.1.
1.2 Annual Award
Pool. “Annual Award Pool” means, with respect to each Year,
the total amount available for allocation to Participants for such Year, as
determined under Article V.
1.3 Beneficiary. “Beneficiary”
means the person or persons determined in accordance with Section 7.3 to
receive any unpaid portion of any Award distributable under the Plan on account
of the death of a Participant.
1.4 Base Pay. “Base
Pay” means, with respect to each Employee, the regular straight-time earnings or
base salary, together with payments for overtime, on-time performance bonuses
and commissions or sales incentives, paid with respect to such Employee by the
Company or a Subsidiary, but excluding any equity based compensation, any
payments under this Plan, any other bonuses and any other special
payments.
1.5 Board. “Board”
means the Board of Directors of the Company.
1.6 Code. “Code” means
the Internal Revenue Code of 1986, as amended.
1.7 Committee. “Committee”
means the committee described in Section 3.1 that is
appointed by the Board to administer the Plan.
1.8 Company. “Company”
means Continental Airlines, Inc., a Delaware corporation, or any successor which
assumes the Plan.
1.9 Effective Date.
“Effective Date” has the meaning set forth in Section
2.2.
1.10 Employee.
“Employee” means any full-time or part-time employee (i) on
the payroll of the Company or of any wholly owned Subsidiary, or (ii) on the
payroll of any other Subsidiary if, and on such terms as, designated by the
Committee or the Board. For this purpose, “on the payroll” shall mean
paid by payroll check through payroll and not a check through accounts payable,
without regard to any reclassification resulting from any controversy concerning
the employment status of the Employee.
1.11 Employment.
“Employment” means employment by the Company or a
Subsidiary. In this regard, neither the transfer of a Participant
from Employment by the Company to Employment by a Subsidiary nor the transfer of
a Participant from Employment by a Subsidiary to Employment by the Company or
another Subsidiary 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 the Company or a Subsidiary
for reasons of professional advancement, education, health, government service,
or during any period the Participant is on a company authorized leave of
absence, family medical leave, or military leave, in each case in accordance
with the Company’s applicable leave policy, or during any period required to be
treated as a leave of absence by virtue of any valid law or
agreement.
1.12 Excluded Person.
“Excluded Person” has the meaning set forth in Section
4.1.
1.13 Participant. “Participant” has the
meaning set forth in Section
4.1.
1.14 Plan. “Plan” means
the Continental Airlines, Inc. Profit Sharing Plan, the terms of which are set
forth herein, and as the same may hereafter be amended from time to
time.
1.15 Pre-tax Income. “Pre-tax Income” means,
with respect to each Year, the consolidated income before taxes but after
minority interest (as computed using net income (loss) before taxes) of the
Company for such Year as shown on the Company’s consolidated financial
statements for such Year, but calculated excluding any special, unusual or
non-recurring items as determined by the Committee in
accordance with applicable accounting rules.
1.16 Retired. “Retired”
or “Retirement” means the termination of Employment (for any reason other than
involuntary termination for cause), after satisfaction of all age and service
requirements for (i) either early retirement or normal retirement under the
Continental Retirement Plan, as amended from time to time or (ii) satisfaction
of any other requirements constituting a “retirement” with respect to a Year as
approved by the Committee in its sole discretion.
1.17 Subsidiary.
“Subsidiary” means (i) any wholly owned subsidiary of the
Company or of any wholly owned subsidiary thereof, or (ii) any other corporation
or business venture in which the Company owns, directly or indirectly, a
significant financial interest, but only if, and on such terms as, the Committee
designates such corporation or business venture to be a Subsidiary for the
purposes of this Plan for any Year, and if the board of directors (or equivalent
governing authority) of such corporation or business venture consents to being
designated as a Subsidiary for purposes hereof.
1.18 Year. “Year” means
the period corresponding to the fiscal year of the Company and for purposes of
this Plan refers to the Year for which an Annual Award Pool has been determined
to be available for allocation to Participants pursuant to the terms of the
Plan.
ARTICLE
II
THE
PLAN
2.1 Purpose. The
purpose of the Plan is to promote the growth and prosperity of the Company and
each Subsidiary, to motivate Participants to achieve strategic, financial and
operating objectives, to reward improvement in financial performance, and to
provide a variable incentive compensation component to enhance total
compensation in a manner that is competitive in the industry, thereby permitting
the Company and each Subsidiary to attract and retain superior personnel at all
levels of responsibility and to provide Participants with an additional
incentive to contribute to the success of the Company and its
Subsidiaries. The Plan provides for incentive compensation and,
accordingly, is not intended to be a plan that is subject to Parts 1 through 4
of Subtitle B of Title I of the Employee Retirement Income Security Act of
1974, as amended, and shall be administered accordingly.
2.2 Effective Date.
The Plan shall become effective for the Year beginning
January 1, 2010 (the “Effective Date”).
ARTICLE
III
ADMINISTRATION
3.1 Composition and Authority of
Committee. The Plan shall be solely administered by a
committee appointed by the Board, which Committee shall consist of at least
three members. Such Committee shall be the Human Resources Committee
of the Board or such other Committee as may be designated by the Board, in its
sole discretion, to administer the Plan. The Board shall have the
power from time to time to remove members of the Committee and to fill vacancies
on the Committee arising by resignation, death, removal, or
otherwise. Subject to the express provisions of the Plan, the
Committee shall have full authority to make all decisions and determinations in
its sole discretion and take all other actions necessary or advisable in the
administration and interpretation of the Plan. All such decisions,
determinations, and actions by the Committee shall be final, binding, and
conclusive upon all persons.
3.2 Action by Committee.
A majority of the members of the Committee shall constitute a
quorum for the transaction of business, and the vote of a majority of the
members of the Committee present at a meeting of the Committee shall decide any
question brought before the meeting and shall be the act of the
Committee. In addition, the Committee may act by unanimous written
consent and may also take any other action otherwise proper under the Plan by an
affirmative vote, taken without a meeting, of a majority of its
members.
3.3 Delegation. The
Committee may, in its discretion, delegate one or more of its duties to an
officer or Employee of the Company or a committee composed of officers and/or
Employees of the Company, but may not delegate its authority to interpret the
Plan.
3.4 Reliance upon Information.
Neither the Committee nor any officer or Employee of the
Company (including any committee composed of officers and/or Employees of the
Company to whom duties are delegated pursuant to Section 3.3) shall be
liable for any decision or action taken in good faith in connection with the
administration of the Plan. Without limiting the generality of the
foregoing, any such decision or action taken by the Committee or any such
persons in reliance upon any information supplied to it or them by any officer
of the Company or any Subsidiary, the Company’s or any Subsidiary’s legal
counsel or the Company’s or any Subsidiary’s independent accountants or internal
audit staff in connection with the administration of the Plan shall be deemed to
have been taken in good faith.
ARTICLE
IV
PARTICIPATION
4.1 Participation.
(a) Subject
to the other provisions of this Section 4.1, for any
Year, each Employee who, as of the last day of the Year, remains in Employment
(or who has Retired from Employment or died while an Employee during such
Year) shall be a “Participant” with respect to such Year. Each
Employee who is a member of a workgroup that is not collectively
bargained as of the last day of a Year shall be a Participant in the Plan as of
January 1st of
such Year. Each Employee who is a member of a workgroup that is
collectively bargained as of the last day of a Year shall be a Participant in
the Plan with respect to such Year only if specifically provided pursuant to the
terms of a ratified collective bargaining agreement between the Company (or a
Subsidiary, as applicable) and the union representing such workgroup (a “CBA”),
with participation to be effective solely for the period provided in the
CBA. If a workgroup is represented by a union but has a CBA that has
become amendable prior to or during a Year and the successor CBA has not been
ratified by the last day of such Year, then Employees in that workgroup are
Excluded Persons (as defined below) for such Year, unless the terms of the CBA
specifically provide for participation during the amendable
period. The participation of an international Employee shall be
subject to the terms the CBA, if any, local work rules and legal requirements
applicable to each such Employee.
(b) Notwithstanding
Section 4.1(a),
the following persons shall not be Participants and shall be “Excluded Persons”
with respect to a Year:
|
(i)
|
any
Employee who participates during such Year in any officer-level or
director-level annual incentive program, or any other bonus program of the
Company or a Subsidiary that the Committee designates as excluding such
Employee from participation under the Plan with respect to such Year;
and
|
|
(ii)
|
any
Employee who is a Grade 46 or higher level Employee (which for all
purposes under the Plan shall include any equivalent Employee grade
level(s) used at a Company division or Subsidiary) on the last day of such
Year (or who has Retired from Employment or died as a Grade 46 or higher
level Employee); and
|
|
(iii)
|
any
Employee who is a member of a workgroup as of the last day of such Year
that does not participate in the Plan pursuant to the provisions of Section 4.1(a)
(including any Employee who has Retired or died as a member of such
workgroup).
|
(c) Subject
to Section 7.5,
each Participant with respect to a Year shall be entitled to share in any Annual
Award Pool for such Year in accordance with the allocation and vesting
provisions set forth in Article VI. With respect to a particular
Employee, the workgroup shall mean the workgroup that such Employee is
principally associated with as of the last day of a particular Year (or, if
earlier, upon the Employee’s death or Retirement).
ARTICLE
V
ANNUAL
AWARD POOL
5.1 Annual Award Pool. Subject to Section 5.2, the
“Annual Award Pool” for any Year shall be an amount equal to A
multiplied by B,
where:
A equals the dollar amount of
Pre-tax Income, if any, earned with respect to such Year multiplied by 15%;
and
B equals a fraction, the
numerator of which is the total Base Pay of all Participants for such Year and
the denominator of which is the sum of (i) the total Base Pay of all
Participants for such Year plus
(ii) the total Base Pay of all Excluded Persons for such Year.
5.2 Minor Pools. Notwithstanding the
provisions of Section
5.1, if the Annual Award Pool, as calculated in accordance with Section 5.1 with
respect to any Year, is less than two tenths of one percent (0.2%) of the
denominator used in the fraction set forth in item B of Section 5.1 (such
amount being referred to as a “Minor Pool”), then, at the discretion of the
Committee, the Annual Award Pool for that Year shall be deemed to be zero, and
the amount of the Minor Pool (and any other prior Minor Pool amounts not yet
paid out under the Plan) shall be carried forward and added to the Annual Award
Pool for the following Year (or any next succeeding Year as may be necessary for
the Annual Award Pool for the Year in question to exceed two tenths of one
percent (0.2%) of the denominator used in the fraction set forth in item B of Section 5.1 for such
Year). Any Minor Pool remaining upon the termination of the Plan and
not included in a successor profit sharing plan shall revert to the Company and
not be paid out.
ARTICLE
VI
ALLOCATION
AND VESTING OF AWARDS
6.1 Allocation of Annual Award Pool,
Vesting. As soon as practicable after the close of each
Year, the Company’s Controller shall determine whether there is an Annual Award
Pool and, if so, shall certify the Annual Award Pool for that Year and allocate
such Annual Award Pool to each Participant who satisfies the requirements of
Section 4.1
(and any amount not so allocated shall not be paid to Participants hereunder) in
the proportion that (A) the total Base Pay of each such Participant paid with
respect to such Year (subject to adjustment as described below) bears to (B) the
total Base Pay for all Participants with respect to such Year. In
calculating the total Base Pay of each Participant pursuant to clause (A), with
respect to any Participant who is a member of a workgroup that did not
participate in the Plan with respect to the full Year as set forth in Section 4.1, the
total Base Pay of such Participant shall be adjusted to reflect only the portion of such
Participant’s Base Pay paid with respect to the period during the Year that such
workgroup is eligible to participate in the Plan as provided in Section
4.1. In addition, the Award to any
Participant who participates during such Year in any required profit sharing or
similar arrangement with respect to the Company or any Subsidiary pursuant to
the legal requirements of the country or other jurisdiction of such
Participant’s residence or principal place of work (a “Local Award”) shall be
reduced by the amount of such Local Award paid or accrued to such Participant
with respect to such Year, and such amount shall be retained by the Company or
Subsidiary, as applicable.
The Committee shall review the
Controller’s certification and allocation of the Annual Award Pool and shall
approve the payment of the Annual Award Pool to the
Participants. Subject to Section 7.5, amounts
so approved shall be 100% vested and nonforfeitable and shall be payable in
accordance with Article VII.
ARTICLE
VII
DISTRIBUTIONS
AND PAYMENTS
7.1 Payor of Awards.
Subject to the following provisions hereof, any Award payable
under the Plan with respect to a Participant for a given Year shall be the
obligation of and paid by the Company or any Subsidiary, whichever may be
applicable, or any successor pursuant to Section 9.2, that
employed the Participant at the end of the Year with respect to which the Award
was made. Adoption and maintenance of the Plan by the Company and any
Subsidiary shall not create a joint venture or partnership relationship among or
between such persons for purposes of payment of Awards under the Plan or for any
other purpose.
7.2 Cash Payment. Subject to Section 7.5, the
Award shall be paid by the Company or Subsidiary, as the case may be, to the
Participant (or Beneficiary) in full in the form of a single sum payment in cash
as promptly as administratively practicable following the last day of the Year
to which the Award pertains; but in any event not later than two and one-half
months following the last day of the Year to which the Award
pertains. The Company or Subsidiary, as the case may be, shall deduct
from amounts paid under this Section 7.2 any taxes
required to be withheld by applicable law any other proper withholding of
amounts owed by the Participant to the Company or Subsidiary.
7.3 Death of Participant.
Any Award with respect to a Participant that remains unpaid,
in whole or in part, at the death of the Participant shall (subject to Section 7.5 and the
provisions of Section
7.2 regarding withholding of taxes) be paid in a single sum payment of
cash to the Participant’s Beneficiary as soon as administratively practicable
following the death of the Participant (but no sooner than Awards are generally
paid). Each Participant shall have the right to designate a
Beneficiary to receive any amount payable under the Plan with respect to the
Participant after the Participant’s death. Any designation (or change in
designation) of a Beneficiary must be filed with the Company in a time and
manner designated by the Company in order to be effective. Any such designation
of a Beneficiary may be revoked by the Participant by filing a later valid
designation or an instrument of revocation with the Company in a time and manner
designated by the Company. If no Beneficiary designation under the
Plan is on file with the Company at the time of the death of the Participant or
if such designation is not effective for any reason as determined by the
Company, then the Participant’s Beneficiary for purposes of the Plan shall be
determined as follows:
|
|
(a)
|
If
the Participant leaves a surviving spouse, then the Participant’s
Beneficiary shall be such surviving
spouse;
|
|
|
(b)
|
If
the Participant leaves no surviving spouse, then the Participant’s
Beneficiary shall be his or her beneficiary affirmatively designated under
the Company’s principal plan that provides a retirement benefit on behalf
of the Participant (other than a qualified defined benefit plan or money
purchase pension plan within the meaning of Section 401(a) of the Code);
or
|
|
|
(c)
|
If
the Participant (i) leaves no surviving spouse and (ii) as of the date of
his or her death, does not have an account balance under the plan referred
to in clause (b) above, has no beneficiary designation on file under such
plan, or his or her beneficiary designation under such plan is not
effective for any reason as determined by the administrator of such plan,
then the Participant’s Beneficiary shall be (A) the Participant’s executor
or administrator for the benefit of the Participant’s estate or
(B) the Participant’s heirs at law if there is no executor or
administrator of the Participant’s
estate.
|
7.4 Nonalienation of Benefits.
No right or benefit under this Plan shall be subject to
anticipation, alienation, sale, assignment, pledge, encumbrance, or charge, and
any attempt to anticipate, alienate, sell, assign, pledge, encumber, or charge
the same will be void. No right or benefit hereunder shall in any
manner be liable for or subject to any debts, contracts, liabilities, or torts
of the person entitled to such benefits. If any Participant (or
Beneficiary) hereunder shall become bankrupt or attempt to anticipate, alienate,
assign, sell, pledge, encumber, or charge any right or benefit hereunder, or if
any creditor shall attempt to subject the same to a writ of garnishment,
attachment, execution, sequestration, or any other form of process or
involuntary lien or seizure, then such right or benefit shall, in the discretion
of the Committee, cease and terminate.
7.5 Forfeiture for Cause.
Notwithstanding any other provision of the Plan, a
Participant (and his or her Beneficiary) shall forfeit his or her Award if his
or her Employment is terminated for cause or gross misconduct prior to payment
of such Award. The determination of whether a termination of
Employment is for cause or gross misconduct shall be made at the sole discretion
of the Company or Subsidiary, as the case may be, that employed such
Employee. All such determinations
shall be final, binding, and conclusive upon all persons.
ARTICLE
VIII
TERMINATION
OR AMENDMENT OF THE PLAN
8.1 Termination or Amendment.
Unless earlier terminated as provided below, the Plan shall
automatically terminate at the close of business on December 31, 2014; provided
that the Plan shall remain in effect thereafter to the extent necessary to
permit payment of any Awards with respect to the Year 2014. The Board
(or the Committee) may at any time amend, modify, revise or terminate the
Plan. There are no acquired rights arising pursuant to the
Plan.
8.2 Modification or Termination following
Award. Subject to the provisions of Section 9.2,
modification, amendment, revision or termination of the Plan shall not adversely
affect rights or obligations under the Plan with respect to any Awards made
prior to such modification, amendment, revision or termination, without the
consent of the affected persons. Awards shall be deemed made as of
the last day of a Year.
ARTICLE
IX
MISCELLANEOUS
9.1 Other Compensation Plans.
The adoption of the Plan shall not affect any other
compensation plans in effect for the Company or any Subsidiary or affiliate of
the Company except as may specifically be provided under the terms and
provisions of such other plan or awards made thereunder, nor shall the Plan
preclude the Company or any Subsidiary or affiliate thereof from establishing
any other forms of incentive or other compensation for Employees.
9.2 Powers of the Company.
The existence of outstanding and unpaid Awards under the Plan
shall not affect in any way the right or power of the Company or any Subsidiary
to make or authorize any adjustments, stock dividends, spin-offs or other
extraordinary dividends, stock splits, combinations of shares,
recapitalizations, reorganizations or other changes in the Company’s or
Subsidiary’s capital structure or in its business, or any merger or
consolidation of the Company or any Subsidiary, or any issue of bonds,
debentures, common or preferred stock, if applicable, or the dissolution or
liquidation of the Company or any Subsidiary, or any sale or transfer of all or
any part of its assets or business, or any other act or proceeding, whether of a
similar character or otherwise.
If the
Company or any Subsidiary (or any successor thereto) elects to dissolve, enter
into a sale of its assets, or enter into any reorganization incident to which it
is not the surviving entity, unless the surviving or successor entity shall
formally agree to assume the Plan, then the Plan shall terminate with respect to
the Company or any Subsidiary (or any successor thereto) on the earlier of the
date of closing or the effective date, whichever may be applicable, of such
transaction, and the full amount of any Awards remaining unpaid in respect of
Years ended prior to such applicable date shall nevertheless be paid to each
such Participant (or Beneficiary) in a single lump sum payment of cash in
accordance with the terms of the Plan.
9.3 Plan Binding on Successors.
The Plan shall be binding upon the successors and assigns of
the Company and any Subsidiary.
9.4 No Guarantee of Employment.
Nothing contained in this Plan shall be deemed to give any
Participant or Employee the right to be retained in the service of the Company
or any Subsidiary or affiliate of the Company or to interfere with the right of
the Company or any Subsidiary or affiliate of the Company to discharge any
Participant or Employee at any time, including at the end of any Year,
regardless of the effect which such discharge shall have upon a Participant in
the Plan.
9.5 Liability of Employer.
Each Participant, Beneficiary or other person who shall claim
a right or benefit under this Plan shall be entitled only to look to the
Participant’s employer for such benefit, and no officer, director, or employee
of the Company or any Subsidiary or member of the Committee or any other person
shall have any liability for such benefit.
9.6 Payment of Plan Expenses.
The Company and each Subsidiary will pay its pro rata
share of all expenses that may arise in connection with the administration of
this Plan.
9.7 Headings. Any
headings or subheadings in this Plan are inserted for convenience of reference
only and are to be ignored in the construction of any provisions
hereof. All references in this Plan to Articles and Sections are to
Articles and Sections of this Plan unless specified otherwise.
9.8 Gender and Tense.
Any words herein used in the masculine shall be read and
construed in the feminine where they would so apply. Words in the
singular shall be read and construed as though in the plural in all cases where
they would so apply.
9.9 Governing Law.
This Plan shall be construed in accordance with the laws of
the State of Texas to the extent federal law does not supersede and preempt
Texas law.
9.10 Severability. If
any provision of this Plan 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 Plan, and the Plan shall be construed and enforced
as if the illegal, invalid, or unenforceable provision had never been included
herein.
9.11 No Guarantee of Tax Consequences.
None of the Company, any Subsidiary, the Committee or any
officer or director makes any commitment or guarantee that any federal or state
tax treatment will apply or be available to any person participating or eligible
to participate in this Plan.
9.12 Notice. Whenever
any notice is required or permitted hereunder, such notice must be in writing
and personally delivered or sent by mail. Any notice required or
permitted to be delivered hereunder shall be deemed to be delivered on the date
which it is personally delivered, or, whether actually received or not, on the
third business day after it is deposited in the United States mail, postage
prepaid, addressed to the person who is to receive it at the address specified
below. The Company or a Subsidiary shall be entitled to use the
address of a Participant as it appears in the personnel records of the
employer. Participants shall be entitled to use, as the address for
the Company or a Subsidiary, the address of the Company’s principal corporate
office. Any person entitled to notice hereunder may waive such
notice.