EXHIBIT 10.5

Amendment to

Continental Airlines, Inc. 1998 Stock Incentive Plan,

Continental Airlines, Inc. 1997 Stock Incentive Plan

and

Continental Airlines, Inc. 1994 Incentive Equity Plan

This Amendment (this "Amendment") to the Continental Airlines, Inc. 1994
Incentive Equity Plan and the Continental Airlines, Inc. 1997 Stock Incentive
Plan, each as amended and restated as of November 20, 1998 and as further
amended by Amendment No. 1 thereto dated as of May 15, 2001 and the Continental
Airlines, Inc. 1998 Stock Incentive Plan (as amended and restated through May
15, 2001 (collectively, the "Plans"), is dated as of March 12, 2004 and has been
adopted by the Board of Directors of Continental Airlines, Inc., a Delaware
corporation (the "Company"), on March 12, 2004:

1. Pursuant to Section X of the Plans, each of the Plans is hereby amended as
follows:

Section IX(c) of each of the Plans is hereby amended in its entirety to read as
follows:

"Change in Control. As used in the Plan (except as otherwise provided in an
applicable Option Agreement or Restricted Stock Agreement), the term "Change in
Control" shall mean:

(aa) any person (within the meaning of Section 13(d) or 14(d) under the Exchange
Act, including any group (within the meaning of Section 13(d)(3) under the
Exchange Act), a "Person") is or becomes the "beneficial owner" (as such term is
defined in Rule 13d-3 promulgated under the Exchange Act), directly or
indirectly, of securities of the Company (such Person being referred to as an
"Acquiring Person") representing 25% or more of the combined voting power of the
Company's outstanding securities; other than beneficial ownership by (i) the
Company or any subsidiary of the Company, (ii) any employee benefit plan of the
Company or any Person organized, appointed or established pursuant to the terms
of any such employee benefit plan (unless such plan or Person is a party to or
is utilized in connection with a transaction led by Outside Persons), or (iii) a
Person who has a Schedule 13G on file with the Securities and Exchange
Commission pursuant to the requirements of Rule 13d-1 under the Exchange Act,
with respect to its holdings of the Company's voting securities ("Schedule
13G"), so long as (1) such Person is principally engaged in the business of
managing investment funds for unaffiliated securities investors and, as part of
such Person's duties as agent for fully managed accounts, holds or exercises
voting or dispositive power over voting securities of the Company, (2) such
Person acquires beneficial ownership of voting securities of the Company
pursuant to trading activities undertaken in the ordinary course of such
Person's business and not with the purpose nor the effect, either alone or in
concert with any Person, of exercising the power to direct or cause the
direction of the management and policies of the Company or of otherwise changing
or influencing the control of the Company, nor in connection with or as a
participant in any transaction having such purpose or effect, including any
transaction subject to Rule 13d-3(b) of the Exchange Act and (3) if such Person
is a Person included in Rule 13d-1(b)(1)(ii) of the Exchange Act, such Person is
not obligated to, and does not, file a Schedule 13D with respect to the
securities of the Company (Persons referred to in clauses (i) through (iii)
hereof are hereinafter referred to as "Excluded Persons"); or

(bb) individuals who constituted the Board as of March 12, 2004 after giving
effect to changes in the composition of the Board as of that date (the
"Incumbent Board") cease for any reason to constitute at least a majority of the
Board, provided that any individual becoming a director on or after March 12,
2004 whose appointment to fill a vacancy or to fill a new Board position or
whose nomination for election by the Company's shareholders was approved by a
vote of at least a majority of the directors then comprising the Incumbent Board
or who was nominated for election by Excluded Persons shall be considered as
though such individual were a member of the Incumbent Board; or

(cc) the Company merges with or consolidates into or engages in a reorganization
or similar transaction with another entity pursuant to a transaction in which
the Company is not the "Controlling Corporation"; or

(dd) the Company sells or otherwise disposes of all or substantially all of its
assets, other than to Excluded Persons.

For purposes of clause (aa) above, if at any time there exist securities of
different classes entitled to vote separately in the election of directors, the
calculation of the proportion of the voting power held by a beneficial owner of
the Company's securities shall be determined as follows: first, the proportion
of the voting power represented by securities held by such beneficial owner of
each separate class or group of classes voting separately in the election of
directors shall be determined, provided that securities representing more than
50% of the voting power of securities of any such class or group of classes
shall be deemed to represent 100% of such voting power; second, such proportion
shall then be multiplied by a fraction, the numerator of which is the number of
directors which such class or classes is entitled to elect and the denominator
of which is the total number of directors elected to membership on the Board at
the time; and third, the product obtained for each such separate class or group
of classes shall be added together, which sum shall be the proportion of the
combined voting power of the Company's outstanding securities held by such
beneficial owner.

For purposes of clause (aa) above, the term "Outside Persons" means any Persons
other than (I) Persons described in clauses (aa)(i) or (iii) above (as to
Persons described in clause (aa)(iii) above, while they are Excluded Persons)
and (II) members of senior management of the Company in office immediately prior
to the time the Acquiring Person acquires the beneficial ownership described in
clause (aa).

For purposes of clause (cc) above, the Company shall be considered to be the
Controlling Corporation in any merger, consolidation, reorganization or similar
transaction unless either (1) the shareholders of the Company immediately prior
to the consummation of the transaction (the "Old Shareholders") would not,
immediately after such consummation, beneficially own, directly or indirectly,
securities of the resulting entity entitled to elect a majority of the members
of the Board of Directors or other governing body of the resulting entity or (2)
those persons who were directors of the Company immediately prior to the
consummation of the proposed transaction would not, immediately after such
consummation, constitute a majority of the directors of the resulting entity,
provided that (I) there shall be excluded from the determination of the voting
power of the Old Shareholders securities in the resulting entity beneficially
owned, directly or indirectly, by the other party to the transaction and any
such securities beneficially owned, directly or indirectly, by any Person acting
in concert with the other party to the transaction, (II) there shall be excluded
from the determination of the voting power of the Old Shareholders securities in
the resulting entity acquired in any such transaction other than as a result of
the beneficial ownership of Company securities prior to the transaction and
(III) persons who are directors of the resulting entity shall be deemed not to
have been directors of the Company immediately prior to the consummation of the
transaction if they were elected as directors of the Company within 90 days
prior to the consummation of the transaction.

The exclusion described in clause (aa)(iii) above shall cease to have any force
or effect (and the Person described therein shall cease to be an Excluded
Person) if that Person becomes an "Acquiring Person" within the meaning of the
Amended and Restated Rights Agreement dated as of November 15, 2000 between the
Company and Mellon Investor Services LLC, as amended from time to time.

Upon the occurrence of a Change in Control, with respect to each recipient of an
Award hereunder, (AA) all Options granted to such recipient and outstanding at
such time shall immediately vest and become exercisable in full (but subject,
however, in the case of Incentive Stock Options, to the aggregate fair market
value, determined as of the date the Incentive Stock Options are granted, of the
stock with respect to which Incentive Stock Options are exercisable for the
first time by such recipient during any calendar year not exceeding $100,000)
and, except as required by law, all restrictions on the transfer of shares
acquired pursuant to such Options shall terminate and (BB) all restrictions
applicable to such recipient's Restricted Stock shall be deemed to have been
satisfied and such Restricted Stock shall vest in full.

In addition, except as otherwise provided in the applicable Option Agreement, if
a recipient of an Award hereunder becomes entitled to one or more payments (with
a "payment" including, without limitation, the vesting of an Award) pursuant to
the terms of the Plan (the "Total Payments"), which are or become subject to the
tax imposed by section 4999 of the Code (or any similar tax that may hereafter
be imposed) (the "Excise Tax"), the Company or subsidiary for whom the recipient
is then performing services shall pay to the recipient an additional amount (the
"Gross-Up Payment") such that the net amount retained by the recipient, after
reduction for any Excise Tax on the Total Payments and any federal, state and
local income or employment tax and Excise Tax on the Gross-Up Payment, shall
equal the Total Payments. For purposes of determining the amount of the Gross-Up
Payment, the recipient shall be deemed (aa) to pay federal income taxes at the
highest stated rate of federal income taxation (including surtaxes, if any) for
the calendar year in which the Gross-Up Payment is to be made (for 1998, the
highest stated rate is 39.6%); and (bb) to pay any applicable state and local
income taxes at the highest stated rate of taxation (including surtaxes, if any)
for the calendar year in which the Gross-Up Payment is to be made. Any Gross-Up
Payment required hereunder shall be made to the recipient at the same time any
Total Payment subject to the Excise Tax is paid or deemed received by the
recipient."

2. The Plans, as amended by this Amendment, shall apply to all Awards made under
the Plans on or after the date hereof and to all outstanding awards made under
the Plans prior to the date hereof, inasmuch as the changes to the Plans
effected hereby do not impair the rights of any recipients of Awards. In all
other respects, the Plans shall continue in full force and effect with respect
to all Awards made thereunder.

3. Capitalized terms used in this Amendment without definition are defined in
the Plans and are used in this Amendment with the same meanings as in the
respective Plans.

 

IN WITNESS WHEREOF, the undersigned has executed this Amendment on behalf of the
Company as of March 12, 2004.

CONTINENTAL AIRLINES, INC.

 

By: /s/ Jeffery A. Smisek            

Jeffery A. Smisek

Executive Vice President