United Airlines 2011 Annual Report Download - page 109

Table of Contents
certain UAL awards and the assumed options awarded to employees that are retirement eligible either at the grant date or within the vesting period is considered
vested at the respective retirement eligibility date.
Restricted Stock Awards and Restricted Stock Units. During 2011, the Compensation Committee determined that all outstanding UAL RSUs will be settled in
cash. As of December 31, 2011, UAL, United and Continental had recorded a liability of $50 million, $21 million and $29 million, respectively, related to
its unvested RSUs.
The table below summarizes UAL’s RSU and restricted stock activity for the year ended December 31, 2011 (shares in thousands):
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Non-vested at beginning of year 51 $22.85 671 $17.20
Granted 3,655 19.89 536 23.87
Vested (141) 18.13 (195) 22.26
Canceled (199) 19.90 (27) 23.95
Non-vested at end of year 3,366 19.98 985 23.33
The fair value of RSUs and restricted shares vested in 2011, 2010 and 2009 was $7 million, $33 million and $21 million, respectively. The fair value of the
restricted stock awards was primarily based upon the share price on the date of grant. These awards are accounted for as equity awards. The fair value of the
cash-settled RSUs was based upon the Company’s stock price as of the last day preceding the settlement date. These awards were accounted for as liability
awards. Restricted stock vesting and the recognition of the expense is similar to the stock option vesting described above.
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Share-Based Compensation Expense. Total share-based compensation expense included in salaries and related costs for the nine months ended September 30,
2010 and the year ended December 31, 2009 was $57 million and $(3) million, respectively.
Stock Options. Stock options were awarded with exercise prices equal to the fair market value of Continental’s common stock on the date of grant.
Management level employee stock options typically vested over a four year period and generally had five year terms. Expense related to each portion of an
option grant was recognized on a straight-line basis over the specific vesting period for those options. Outside director stock options vested in full on the date of
grant and had ten year terms. All outstanding options under the Continental 2005 Pilot Supplemental Option Plan, which vested over three years and have
terms of six to eight years, and the Continental 2005 Broad Based Employee Stock Option Plan, which vested over three years and have a term of six years,
were already fully vested on the Merger closing date. Outstanding stock options granted under the Continental Incentive Plan 2000, the Continental 1998
Stock Incentive Plan, and the Continental 1997 Stock Incentive Plan became exercisable in full upon the closing of the Merger. Outstanding stock options
granted under the Continental Incentive Plan 2010 vest on their original vesting schedule or earlier if the holder experiences an involuntary termination within
two years of the Merger closing date.
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