Exhibit 10.7(a)
COMPENSATION REDUCTION
AGREEMENT
THIS COMPENSATION REDUCTION AGREEMENT (this "Agreement")
is entered into as of December 22, 2004, by and between Continental
Airlines, Inc., a Delaware corporation ("Company"), and Mark J.
Moran ("Executive").
W I T N E S S E T
H:
WHEREAS, Company and Executive have heretofore entered
into that certain Employment Agreement dated as of August 12, 2004
(the "Employment Agreement"); and
WHEREAS, Company has heretofore granted to Executive
various awards under Company's Incentive Plan 2000, as amended (the
"Incentive Plan 2000"), and the programs maintained under the
Incentive Plan 2000, including Company's Annual Executive Bonus
Program, as amended (the "Bonus Program"), Company's Long Term
Incentive and RSU Program, as amended (the "LTIP/RSU Program"), and
Company's Officer Retention and Incentive Award Program, as amended
(the "Retention Program") (the Incentive Plan 2000, the Bonus
Program, the LTIP/RSU Program and the Retention Program are
collectively referred to herein as the "Compensation Programs");
and
WHEREAS, as part of Company's continuing efforts to
reduce its costs of operation, Company desires to reduce the
compensation it provides to Executive, and Executive is willing to
accept such reduction, in an effort to enhance the financial health
of Company and to preserve employment opportunities for Executive
and others with Company.
NOW, THEREFORE, in consideration of the premises set
forth above, the mutual agreements set forth herein, and other good
and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, and notwithstanding any provision to the
contrary in the Employment Agreement, the Compensation Programs or
the award notices issued to Executive under the Compensation
Programs, Company and Executive hereby agree as follows:
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REDUCTION OF BASE SALARY : Subject to Executive's
continuous employment by Company from the date of this Agreement to
February 28, 2005, commencing on February 28, 2005, and continuing
until such time, if any, as the parties may agree to a different
amount, Executive's annual base salary shall be reduced by 20% of
the amount in effect on the date hereof (i.e., from Executive's
current base salary of $450,000 to a reduced based salary of
$360,000). Executive acknowledges that such reduction in annual
base salary will also result in a reduction in certain compensation
and other benefits provided by Company to Executive pursuant to the
terms of Company's benefit plans and programs, including, without
limitation, under the Bonus Program, the LTIP/RSU Program, and
Executive's supplemental executive retirement plan.
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REDUCTION IN OUTSTANDING AWARDS : Set forth on
Exhibit A attached hereto is a list of the stock options,
restricted stock awards, RSUs (as such term is defined in the
LTIP/RSU Program) and PARs (as such term is defined in the
Retention Program) that have been awarded to Executive by Company
prior to the date of this Agreement and in which Executive will not
have a 100% vested and nonforfeitable interest as of the close of
business on February 28, 2005 (determined based on the terms
of the Compensation Programs and the applicable award notices
issued thereunder, and assuming Executive's continuous employment
by Company from the date of this Agreement until February 28,
2005). Subject to Executive's continuous employment by Company from
the date of this Agreement through February 28, 2005,
effective as of the close of business on February 28, 2005,
Executive hereby surrenders and forfeits to Company 20% of the
portion of each award that is listed on Exhibi
