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Continental Announces Enhanced Profit-Sharing

Continental Airlines today
issued the following bulletin to employees regarding establishment of a
new profit-sharing program: Continental today announced a significantly enhanced profit-sharing
program. The new profit-sharing program will share 30 percent of the first
$250 million of pre-tax income, 25 percent of the next $250 million and 20
percent of amounts over $500 million. The previous profit-sharing program
shared 15 percent of the company’s pre-tax income at every level of

Continental’s enhanced program is now the best in the industry.

To recognize each work group’s share of the $500 million in annual pay and
benefit reductions, half of the profit-sharing pool will be allocated
based on the relative share of the reductions of each work group. The
other half of the profit-sharing pool will be allocated based on the
relative wages of each work group. Once the profit-sharing pool has been
allocated among work groups, then co-workers will share in the portion of
the profit-sharing pool allocated to their own work group based on
relative wages within that work group.

Employees will be able to receive their share of the profits as cash or
elect to contribute it to their 401(k) account (subject to applicable

The program has a five-year duration through 2009 and will be implemented
upon achieving the $500 million in annual wage and benefit reductions by
Feb. 28.