2009 ANNUAL INCENTIVE
PLAN
The purpose of the
UAL Corporation 2009 Annual Incentive Plan (the “ Plan
”) is to provide performance-based cash incentive
compensation opportunities to eligible non-union employees and
certain union employees of the Company (as defined below) and its
Affiliates (as defined below) based on the achievement of
performance goals. This Plan is intended to replace the UAL
Corporation Success Sharing Program — Performance Incentive
Plan and the United Air Lines, Inc. 2007 Incentive Compensation
Plan for passenger sales division personnel with respect to
Performance Periods (as defined below) commencing on or after
January 1, 2009.
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(a)
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“ Administrator ”
means (i) with respect to Awards to Participants who are
Section 16 Officers, the Committee and (ii) with respect
to Awards to Participants who are not Section 16 Officers, the
Section 16 Officer or Officers to whom the Committee has
delegated authority to administer the Plan pursuant to
Section 5(b).
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(b)
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“ Affiliate ”
means (i) any entity that, directly or indirectly, is
controlled by, controls or is under common control with, the
Company and/or (ii) any entity in which the Company has a
significant equity interest, in each case as determined by the
Administrator.
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(c)
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“ Award ” means
an award made pursuant to this Plan.
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(d)
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“ Board ” means
the Board of Directors of the Company.
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(e)
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“ Bonus Pool ”
shall have the meaning specified in Section 4(e).
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(f)
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“ Business Unit Performance
Metrics ” means one or more performance measures related
to a business unit, division or operating unit that the
Administrator shall select for purposes of establishing the
Performance Goals for a Performance Period with respect to any
Award under the Plan. Business Unit Performance Metrics may vary
among Employers and among Participants.
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(g)
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“ Cause ” means
unacceptable job performance, attendance or misconduct (i) as
determined by the Employer in its sole discretion for Management
Employees, Salaried Employees and International Employees and
(ii) as determined under the applicable collective bargaining
agreement for Collective Bargaining Employees.
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(h)
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“ Code ” means
the Internal Revenue Code of 1986, as amended from time to time,
and the Treasury Regulations promulgated thereunder.
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(i)
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“ Collective Bargaining
Employee ” means an employee on the Employer’s
United States payroll who is subject to the provisions of a
collective bargaining agreement between the Company and the
International Federation of Professional and Technical Engineers
(“ IFPTE ”), the Professional Airline Flight
Control Association (“ PAFCA ”), or any other
union, provided that the Company and IFPTE, PAFCA, or such other
union, as applicable, have agreed that employees subject to the
collective bargaining agreement shall be eligible to participate in
the Plan.
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(j)
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“ Committee ”
means the Human Resources Subcommittee of the Board or such other
committee of the Board as may be designated by the Board to
administer the Plan.
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(k)
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“ Company ” means
UAL Corporation, a corporation organized under the laws of
Delaware, together with any successor thereto.
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(l)
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“ Employer ”
means the Company and each Affiliate that is identified by the
Administrator as being eligible to participate in the
Plan.
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(m)
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“ Enterprise-Wide
Performance Metrics ” means one or more objectively
determinable measures that the Committee shall select for purposes
of establishing the Performance Goals for a Performance Period with
respect to any Award under the Plan. Enterprise-Wide Performance
Metrics may include (but are not limited to) measures related to
financial performance ( e.g . EBITDAR margin, pre-tax
margin, annual operating earnings), operational performance (
e.g . on-time performance), customer satisfaction (
e.g . intent to repurchase), employee engagement, or
safety performance ( e.g . lost time injuries).
Enterprise-Wide Performance Metrics may vary among Employers and
among Participants.
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(n)
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“ Incentive Opportunity
” means, for each Participant, a percentage of Wages,
determined by the Administrator, based on actual achievement of the
Plan’s Performance Goals within the levels of threshold,
target and maximum. The Incentive Opportunity for achievement of
the Performance Goals at points between threshold and target or
target and maximum will be determined by linear
interpolation.
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(o)
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“ Individual Performance
Multiplier ” means, for each Participant, the percentage
determined by the Administrator in its sole discretion based, in
whole or in part, upon an evaluation of such Participant’s
achievement of his or her individual performance goals (
e.g. performance against Company or supervisor direction,
relative performance against peers, performance reviews or feedback
or such other criteria that the Administrator uses to determine
whether and to what extent an Award has been earned by such
Participant for such Performance Period). Except as otherwise
provided in any applicable collective bargaining agreement, the
Individual Performance Multiplier for any Collective Bargaining
Employee covered by a collective bargaining agreement with the
PAFCA will be 100%.
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(p)
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“ International
Employee ” means any regular full-time or regular
part-time employee of an Employer who is not on a United States
payroll and is working regularly in a location outside of the
United States.
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(q)
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“ Management Employee
” means an individual (i) who is classified by the
Employer as a Management Employee (on other than a temporary
reclassification basis), (ii) whose employment is not for a
temporary period, (iii) who is employed in an Employer
established job classification not covered by a collective
bargaining agreement, and (iv) who is on the Employer’s
United States payroll.
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(r)
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“ Minimum Financial
Performance Trigger ” means the required minimum level of
financial performance as established each Plan Year by the
Committee.
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(s)
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“ Participant ”
means an employee selected from time to time by the Administrator
to be eligible to receive an Award under the Plan.
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(t)
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“ Performance Goal
” means, for a Performance Period, one or more goals
established by the Administrator for the Performance Period based
upon the Selected Performance Metrics, stated in terms of a
threshold, target and maximum level.
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2009 UAL Corporation
Annual Incentive Plan
2
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(u)
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“ Performance Period
” means the performance period consisting of a calendar
quarter, another three-month period, and/or a Plan Year, as
determined by the Committee in its reasonable
discretion.
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(v)
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“ Plan ” shall
have the meaning specified in Section 1.
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(w)
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“ Plan Rules ”
means rules, procedures, policies or practices established by the
Administrator with respect to the administration of the Plan, which
need not be reflected in a written instrument and may be changed at
any time without notice.
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(x)
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“ Plan Year ”
means any calendar year during which the Plan is in
effect.
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(y)
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“ Required Date ”
shall have the meaning specified in Section 4(f).
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(z)
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“ Salaried Employee
” means an individual (i) who is classified by the
Employer as a regular full-time or regular part-time Salaried
Employee (on other than a temporary reclassification basis),
(ii) who is employed in an established job classification not
covered by a collective bargaining agreement, and (iii) who is
on the Employer’s United States payroll.
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(aa)
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“ Section 16
Officer ” means a Management Employee who is an
“officer” of the Company as such term is defined in
Rule 16a-1(f) under the Securities Exchange Act of
1934.
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(bb)
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“ Section 409A
” shall have the meaning specified in
Section 7(a).
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(cc)
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“ Selected Performance
Metrics ” means an Enterprise-Wide Performance Metric or
a Business Unit Performance Metric.
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(dd)
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“ Treasury Regulations
” means all proposed, temporary and final regulations
promulgated under the Code, as such regulations may be amended from
time to time (including corresponding provisions of succeeding
regulations).
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(ee)
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“ Wages ” means
the compensation paid (or payable) during a Performance Period to a
Participant for the period he or she is a Participant and shall
include the items listed in Appendix A. Wages will include
compensation not paid as a result of an earnings reduction election
made by the Participant under a Code Section 125 cafeteria
plan or under any qualified cash or deferred arrangement under Code
Section 401(k).
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(a)
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Except as set forth in
Section 3(b), all Salaried Employees, Management Employees and
Collective Bargaining Employees (including those who are on an
Employer-approved leave of absence) who are classified as regular
full-time or regular part-time employees and any International
Employees specifically designated by the Administrator as
participating shall be eligible to receive Awards under the
Plan.
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(b)
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The
following employees of the Employer are not eligible to receive
Awards under the Plan:
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(i)
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Employees who are covered by a
collective bargaining agreement but are not Collective Bargaining
Employees;
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(ii)
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International Employees who are not
designated by the Administrator as eligible to participate in the
Plan; and
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2009 UAL Corporation
Annual Incentive Plan
3
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(iii)
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Any
Salaried Employees or Management Employees the Administrator
determines are not eligible to participate in the Plan.
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(c)
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Employees who are hired after the
first day of a Performance Period and who are eligible to receive
an Award in accordance with Section 3(a) will be eligible to
receive a pro-rated Award for the applicable Performance
Period.
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4.
Provisions Applicable to All Incentive Awards
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(a)
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Enterprise-Wide Performance
Goals. The
Committee shall have the sole authority to establish the
Performance Goals for the Enterprise-Wide Performance Metrics each
Performance Period. In addition, for each Section 16 Officer,
the Committee shall determine the extent to which each applicable
Enterprise-Wide Performance Metric shall be weighted in determining
weightings from Section 16 Officer to Section 16 Officer,
Award to Award and Performance Period to Performance
Period.
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(b)
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Business Unit Performance
Metrics. The
Administrator shall establish a pre-approved list of the
Performance Goals for the Business Unit Performance Metrics each
Performance Period. The head of each business unit, division or
operating unit may select one or more Performance Goals from such
pre-approved list and shall determine the extent to which such
Performance Goals apply to Participants within such business unit,
division or operating unit. The head of each business unit,
division or operating unit may propose additional Performance Goals
for the Business Unit Performance Metrics and the Administrator
may, in its sole discretion, add any such proposed Performance
Goals to the pre-approved list described in the first sentence of
this Section 4(b).
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(c)
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Adjustments to Performance
Goals. The
Administrator, in its sole discretion, shall have the authority to
adjust any Performance Goals (i) in the event of, or in
anticipation of, any unusual or extraordinary corporate item,
transaction, event or development affecting the Company, or any of
its Affiliates, divisions or operating units (to the extent
applicable to such Performance Goal) or (ii) in recognition
of, or in anticipation of, any other unusual or nonrecurring events
affecting the Company or any of its Affiliates, divisions or
operating units (to the extent applicable to such Performance
Goal), or the financial statements of the Company or any
of
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