United Airlines 2008 Annual Report Download - page 111

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The following table provides information related to our share-based compensation plans.
(In millions) 2008 2007
Period from
February 1 to
December 31,
2006
Year Ended
December 31,
Compensation cost:
Management plan restricted stock ......................... $18 $25 $ 84
Management plan stock options ........................... 13 24 72
DEIP unrestricted stock . ................................ — — 3
Total compensation cost . ................................ $31 $49 $159
The unrecognized compensation cost related to unvested awards at December 31, 2008 and 2007
was $18 million and $41 million, respectively, which is expected to be recognized over a weighted-average
period of 1.6 and 2.2 years, respectively. During the second quarter of 2006, the Company revised its
initial estimated award forfeiture rate of 7.5% to 15% based upon actual attrition. As a result, the
share-based compensation expense was reduced by approximately $7 million for the eleven month period
ended December 31, 2006.
2008 Incentive Compensation Plan. In 2008, UAL’s Board of Directors and stockholders approved
the UAL Corporation 2008 Incentive Compensation Plan (the “2008 Plan”). The 2008 Plan is an
incentive compensation plan that allows the Company to use different forms of compensation awards to
attract, retain and reward eligible participants. This approval by stockholders also allows for the issuance
of up to 8,000,000 additional shares pursuant to awards granted under the 2008 Plan. The 2008 Plan
replaced the UAL Corporation 2006 Management Equity Incentive Plan, which was automatically
terminated with respect to future grants and otherwise replaced and superseded by the 2008 Plan. Any
awards granted under the MEIP remain in effect pursuant to their terms.
Any officer or employee of UAL or its affiliates is eligible to participate in the 2008 Plan. The 2008
Plan allows for the grant of options intended to qualify as incentive stock options (“ISOs”) under
Section 422 of the Code, non-qualified stock options (“NSOs”), stock appreciation rights (“SARs”),
restricted share awards, restricted stock units (“RSUs”), performance compensation awards,
performance units, cash incentive awards and other equity-based and equity-related awards. Any shares
of our common stock issued under the 2008 Plan will consist, in whole or in part, of authorized and
unissued shares or of treasury shares.
The 2008 Plan provides that, unless otherwise provided in an award agreement, in the event of a
change of control of the Company (as defined in the 2008 Plan):
• any options and SARs outstanding as of the date the change of control is determined to have
occurred become fully exercisable and vested, as of immediately prior to the change of control.
• all performance units, cash incentive awards and other awards designated as performance
compensation awards will be paid out at the “target” performance level on a prorated basis based
on the number of days elapsed from the beginning of the performance period up to and including
the change of control.
• all other outstanding awards are automatically deemed exercisable or vested and all restrictions
and forfeiture provisions related thereto lapse as of immediately prior to such change of control.
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