United Airlines 2012 Annual Report Download - page 102

Table of Contents
Restricted Stock Awards and Restricted Stock Units. During 2011, the Compensation Committee of the UAL Board of Directors determined that all
outstanding UAL RSUs will be settled in cash. As of December 31, 2012, UAL, United and Continental had recorded a liability of $57 million, $42 million
and $15 million, respectively, related to its unvested RSUs. UAL paid $35 million, $57 million and $84 million related to its share-based liabilities during
2012, 2011 and 2010, respectively, consisting of $16 million, $6 million and $48 million related to United and $19 million, $51 million and $36 million
related to Continental Successor, respectively.
The table below summarizes UAL’s RSU and restricted stock activity for the years ended December 31, 2012, 2011 and 2010 (shares in thousands):
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Non-vested at January 1, 2010 1,719 $ 4.90 811 $ 27.82
Assumed in Merger — — 20 23.66
Granted 1,395 22.20 212 24.55
Modified (449) 21.63 449 21.63
Converted to fixed cash equivalent (1,496) — (164) —
Vested (1,069) 22.41 (651) 31.47
Surrendered (49) 10.55 (6) 11.03
Non-vested at December 31, 2010 51 22.85 671 17.20
Granted 3,655 19.89 536 23.87
Vested (141) 18.13 (195) 22.26
Surrendered (199) 19.90 (27) 23.95
Non-vested at December 31, 2011 3,366 19.98 985 23.33
Granted 1,986 22.20 545 24.01
Vested (552) 21.21 (643) 23.05
Surrendered (569) 22.19 (115) 24.01
Non-vested at December 31, 2012 4,231 22.22 772 23.94
The fair value of RSUs and restricted shares vested in 2012, 2011 and 2010 was $27 million, $7 million and $33 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 was $57 million.
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
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