United Airlines 2010 Annual Report Download - page 172

ITEM 9B. OTHER INFORMATION.
2008 Incentive Compensation Plan and Incentive Plan 2010
On February 17, 2011, the Board of Directors of UAL (the “Board”) approved merger-related amendments
to certain UAL Corporation and Continental Predecessor incentive plans. The UAL Corporation 2008 Incentive
Compensation Plan was amended to change the name of such plan to the United Continental Holdings, Inc. 2008
Incentive Compensation Plan (the “2008 Incentive Plan”) and to reflect the listing of UAL’s common stock on
the New York Stock Exchange. The Continental Airlines, Inc. Incentive Plan 2010 was amended to change the
name of such plan to the United Continental Holdings, Inc. Incentive Plan 2010 (the “Incentive Plan 2010”), to
change the sponsor of such plan to UAL and to change the shares subject to such plan from those of Continental
to shares of UAL common stock. The number of shares available for issuance under the Incentive Plan 2010 and
various other share limitations under such plan were also adjusted based on the exchange ratio that applied in
connection with the Merger.
Annual Incentive Program
On February 17, 2011, the Compensation Committee of the Board (the “Compensation Committee”)
adopted the United Continental Holdings, Inc. Annual Incentive Program (the “AIP”), effective January 1, 2011,
and the form of Annual Incentive Award Notice to be used to make awards under the AIP to officers of UAL or
any subsidiary of UAL. The AIP is an annual cash incentive plan adopted under the Incentive Plan 2010. In order
for a payment to be made under the AIP with respect to a fiscal year, (i) the Company’s pre-tax income for the
fiscal year must meet or exceed the entry level pre-tax income established by the Compensation Committee for
such fiscal year and (ii) a payment must have been made (or will be made) under the Company’s broad-based
profit sharing plan for such fiscal year. The amount of an annual incentive payment under the AIP is equal to a
percentage of the participant’s annual base salary, which percentage varies based on the level of pre-tax income
achieved by the Company for the fiscal year. Payments earned under the AIP for a fiscal year will be made to
participants in a lump-sum by March 15 of the year following the end of such fiscal year.
Generally, except as otherwise provided in a participant’s employment or transition agreement, a participant
in the AIP must remain continuously employed from the date the participant received an award for a fiscal year
through the last day of such fiscal year in order to receive a payment with respect to the award. However, if a
participant’s employment is terminated by reason of death or disability, then, except as otherwise provided in the
participant’s employment agreement, such participant’s award for the fiscal year during which such termination
occurs will be paid on a pro-rated basis (based on the number of days of participation in the AIP during that
fiscal year and assuming achievement of the target level of pre-tax income) within 30 days following the
participant’s death or disability.
If a change of control of UAL occurs during a fiscal year, then a pro-rata portion (based on the number of
days of participation in the AIP for such fiscal year through the date of the change of control and assuming
achievement of a change of control level of pre-tax income pre-established by the Compensation Committee for
such fiscal year) of the participants’ payments under the AIP for such fiscal year will be paid to each participant
on or before March 15 of the year following the end of such fiscal year.
In general, and subject to limited exceptions set forth in the AIP, the Compensation Committee has the right
to reduce or eliminate a payment under the AIP for a fiscal year that would otherwise be payable if the
Compensation Committee determines that such reduction or elimination is appropriate based on UAL’s level of
unrestricted cash and cash available under unused credit lines as of the end of such fiscal year; provided,
however, that any such reduction or elimination shall apply in a uniform manner to all participants who are
otherwise entitled to receive a payment under the AIP with respect to such fiscal year.
Performance-Based RSU Program and Long-Term Relative Performance Program
On February 17, 2011, the Compensation Committee adopted the United Continental Holdings, Inc.
Performance-Based RSU Program (the “RSU Program”) and the United Continental Holdings, Inc. Long-Term
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