Continental Airlines today
issued the following bulletin to its employees:Continental today announced that it plans to issue to its employees stock
options for approximately 10 million shares of Continental’s common stock
in connection with the previously announced pay and benefit reductions.
The 10 million shares represent approximately 15 percent of the currently
outstanding shares of common stock of Continental.

This program applies to all U.S.-based employees, except officers and
members of Continental’s board of directors, and international employees
where practical based on foreign laws and regulations.

The employee option grant is subject to New York Stock Exchange (NYSE)
acceptance of Continental’s application for an exception to the NYSE’s
shareholder approval requirement for grants of equity to employees. In
connection with the application, the audit committee of Continental’s
board of directors today determined that the delay necessary in obtaining
shareholder approval would seriously jeopardize the financial viability of
the company.

“These stock options will be a powerful incentive that reinforces our
culture of working together to win together,” said Larry Kellner,
Continental’s chairman and chief executive officer. “Combined with our
enhanced profit sharing plan, the options will give employees a meaningful
stake in the company’s future success.”

The company anticipates that the options will be issued by the end of
March 2005, subject to the ratification of union agreements and the NYSE’s
acceptance of Continental’s exemption request described above. Each stock
option grant will represent the right to acquire shares of Continental
common stock at the closing price of the common stock on the NYSE on the
date of grant. The options will become exercisable in three equal
installments on the first, second and third anniversaries of the date of
grant, and will have a term ranging from six to eight years.

Continental will release a Q and A for its employees later this week that
will address further details of the program.

The securities discussed herein have not been registered under the
Securities Act of 1933 and may not be offered or sold in the United States
absent registration or an applicable exemption from registration
requirements.
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