Continental Airlines to Restore Pay Cuts : Travel: The carrier also announces new profit-sharing, employee stock ownership and retirement plans.

Continental Airlines said Tuesday that it will give employees a stake in the Houston-based carrier and also restore remaining pay cuts ordered in 1991 when the airline was struggling to emerge from bankruptcy.

Continental said it would grant about a million shares, or about 4%, of its common stock. After the company emerged from bankruptcy in April, 1993, it authorized the issuance of common stock.

In November, 1991, the workers had to take an average 10% pay cut. Since 1991, three-quarters of that cutback has been restored and Tuesday the airline it said it would restore the remainder.

The airline will also offer new benefits that include profit-sharing, restoration of lost raises and a 2% overall raise.

The total incentive package, aimed to reward employees who remained with Continental, will boost the average worker’s compensation about 13.5%, according to company sources.

Continental also will offer employees a new 401(k) retirement plan and the ability to buy the airline’s stock at discount prices along with a 15% distribution of pretax profits.

The announcement came after Continental Chief Executive Robert Ferguson began a series of meetings Tuesday with managers to discuss the future of the carrier.

Continental said in the announcement that it was cutting operations at its Denver hub to 86 flights in the summer as part of its plan to relocate nearly 900 flight attendants and pilots to other flight operations in the carrier’s system.

The airline also said it will halt flights to 10 cities, including Reno; Portland, Ore.; Islip, N.Y., and New Haven, Conn.

Ferguson has embarked on a plan to restructure some of the airline’s operations after rival Dallas-based Southwest Airlines Co. came out with its new CALite no-frills air fares.

The airline has still been laboring to turn itself around after escaping from bankruptcy in April 1993 and reported a loss in February and predicted a loss for the first quarter.