Exhibit 10.11(b)
STOCK OPTION AGREEMENT
(PURSUANT TO THE TERMS OF THE
CONTINENTAL AIRLINES, INC.
1997 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. 1997 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 ____________. 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 __________________________ percent (______%)
increments on each of _____________, _____________ and ________
____. 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 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. 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 not
then exercisable pursuant to Paragraph 6(c) below, (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 (or, as
to Shares for which the Option may then be exercised
pursuant to Paragraph 6(c) below, to the extent not
exercised within the 30 day period described therein) and
(iii) all restrictions (other than those described in
Paragraph 10) on transfer of Shares acquired pursuant to the
Option shall terminate.
(c) Change in Control. If a Change in Control shall
occur, then immediately (i) the Option shall become
exercisable in full, whether or not otherwise exercisable,
and (ii) all restrictions (other than those described in
Paragraph 10) on transfer of Shares acquired pursuant to the
Option shall terminate.
(d) Retirement, Death or Disability. If Optionee's
employment is terminated by retirement, death or Disability,
then immediately (i) 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, and (ii) all
restrictions (other than those described in Paragraph 10) on
transfer of Shares acquired pursuant to the Option shall
terminate. 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).
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.
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 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 the number of Shares otherwise
deliverable upon exercise of the Option 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.
16. No Guarantee of Tax Consequences. Neither Company nor
any subsidiary nor the Administrator makes any commitment or
guarantee that any federal or state 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.
IN WITNESS WHEREOF, the parties have entered into this
Option Agreement as of the _________ of _______, 1997.
"COMPANY"
CONTINENTAL AIRLINES, INC.
By Order of the Administrator
By:_____________________________
Name:
Title:
"OPTIONEE"
________________________________
Name:
