UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: March 26, 2007
(Date of earliest event reported)
UAL CORPORATION
(Exact name of registrant as specified in its charter)
Delaware |
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1-6033 |
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36-2675207 |
(State or other jurisdiction of incorporation) |
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(Commission File Number) |
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(I.R.S. Employer Identification No.) |
1200 East Algonquin Road, Elk Grove Township, Illinois 60007
(Address of principal executive offices)
(847) 700-4000
(Registrants telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 8.01 Other Events.
UAL Corporation (the Company) sponsors a cash incentive program for employees called the Success Sharing Program, which consists of two plans, the UAL Corporation Success Sharing Program Performance Incentive Plan (Performance Incentive) and the UAL Corporation Success Sharing Program Profit Sharing Plan (Profit Sharing).
Performance Incentive payments are based on the Companys attainment of quarterly and annual performance goals, which are reviewed and approved by the Human Resources Subcommittee of the Board of Directors and change each year. Approximately 54,000 U.S. and non-U.S. employees are eligible to participate in the plan.
For 2007, Performance Incentive consists of two quarterly goals (customer satisfaction and operational reliability) as well as an annual operating earnings goal. For each goal, there are Threshold, Target, and Maximum performance levels, which determine the total payout as follows:
· If the Company performs below Threshold for a goal, the plan makes no payment for that goal.
· If the Company performs at Threshold for a goal, the plan pays about 17% of Target (or 50% for all three goals).
· If the Company achieves Target performance for a goal, the plan pays about 33% of Target (or 100% for all three goals).
· If the Company hits the Maximum performance level for a goal, the plan pays about 67% of Target (or 200% for all three goals).
· To the extent that Company performance falls between Threshold and Target or between Target and Maximum, the percentages described above are pro rated.
If the Company achieves Target performance for all three goals in 2007, the plan would pay approximately $91 million. In 2006, the Company performed at 120% of Target and the plan will pay approximately $104 million. In 2005, the Company performed at 80% of target and the plan paid approximately $76 million.
Profit Sharing consists of a single component. For 2006 through 2009, if the Company has more than $10 million in adjusted pre-tax earnings in the calendar year, 15% of all adjusted pre-tax earnings (7.5% in 2006) will form a pool of money to be divided among approximately 53,000 U.S. employees based on the ratio of each eligible employees total wages for the year to the total wages of all eligible employees for the year. International employees are not eligible for Profit Sharing. The plan will pay approximately $11 million for 2006.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995
Certain statements included in this Form 8-K are forward-looking and thus reflect the Companys current expectations and beliefs with respect to certain current and future events and financial performance. Such forward-looking statements are and will be subject to many risks and uncertainties relating to the operations and business environments of the Company that may cause actual results to differ materially from any future results expressed or implied in such forward-looking statements. Factors that could significantly affect net earnings, revenues, expenses, costs, load factor and capacity include, without limitation, the following: the Companys ability to comply with the terms of its credit facility; the costs and availability of financing; the
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Companys ability to execute its business plan; the Companys ability to attract, motivate and/or retain key employees; the Companys ability to attract and retain customers; demand for transportation in the markets in which the Company operates; general economic conditions (including interest rates, foreign currency exchange rates, crude oil prices and refining capacity in relevant markets); the effects of any hostilities or act of war or any terrorist attack; the ability of other air carriers with whom the Company has alliances or partnerships to provide the services contemplated by the respective arrangements with such carriers; the costs and availability of aircraft insurance; the costs of jet fuel; our ability to cost-effectively hedge against increases in the price of jet fuel; the costs associated with security measures and practices; labor costs; competitive pressures on pricing (particularly from lower-cost competitors) and on demand; capacity decisions of our competitors, U.S. or foreign governmental legislation, regulation and other actions; the ability of the Company to maintain satisfactory labor relations and our ability to avoid any disruptions to operations due to any potential actions by our labor groups; weather conditions; and other risks and uncertainties set forth from time to time in UALs reports to the United States Securities and Exchange Commission. Consequently, the forward-looking statements should not be regarded as representations or warranties by the Company that such matters will be realized. The Company disclaims any intent or obligation to update or revise any of the forward-looking statements, whether in response to new information, unforeseen events, changed circumstances or otherwise.
The Performance Incentive plan document and Profit Sharing plan document, as in effect for 2007, were previously filed as Exhibits 10.4 and 10.5 respectively to UALs Form 10-K for the year ended December 31, 2006. For convenience, the Performance Incentive plan document and Profit Sharing plan document, as in effect for 2007, are also filed herewith as Exhibits 99.1 and 99.2 respectively. They are unchanged from the Exhibits attached to the Form 10-K.
The Performance Incentive plan document, as in effect for 2006, was previously filed as Exhibit 10.41 to UALs Form 10-K for the year ended December 31, 2003 (UAL Corporation Success Sharing Program Performance Incentive Plan dated January 1, 2004), as Exhibit 10.1 to UALs Form 10-Q for the quarter ended September 30, 2004 (Declaration of Amendment to UAL Corporation Success Sharing Program Performance Incentive Plan dated July 15, 2004), and as Exhibit 10.2 to UALs Form 10-Q for the quarter ended September 30, 2004 (Declaration of Amendment to UAL Corporation Success Sharing Program Performance Incentive Plan dated August 24, 2004).
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits Description
99.1 UAL Corporation Success Sharing Program Performance Incentive Plan
99.2 UAL Corporation Success Sharing Program Profit Sharing Plan
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Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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UAL CORPORATION |
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By: |
/s/ Paul R. Lovejoy |
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Name: |
Paul R. Lovejoy |
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Title: |
Senior Vice President, |
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General Counsel and Secretary |
Dated: March 26, 2007
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Exhibit No. |
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Description |
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*99.1 |
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UAL Corporation Success Sharing Program Performance Incentive Plan |
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*99.2 |
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UAL Corporation Success Sharing Program Profit Sharing Plan |
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* Filed herewith electronically.
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Exhibit 99.1
UAL Corporation
Success Sharing Program
Performance Incentive Plan
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Affiliate. Affiliate means each entity, corporate or otherwise, in which the Company, directly or indirectly, owns or controls a greater than 80% interest.
Board. Board means the Board of Directors of UAL Corporation.
Collective Bargaining Employee. Collective Bargaining Employee means an employee who (i) is in the class or craft of employees subject to the provisions of a collective bargaining agreement between the Company and the representative of such class or craft of employees, and (ii) is on the Employers United States payroll.
Code. Code means the Internal Revenue Code of 1986, as amended.
Committee. Committee means the Human Resources Subcommittee of the Board or such other committee appointed by the Board to exercise the powers and perform the duties assigned to the Human Resources Subcommittee under this Plan.
Company. Company means UAL Corporation.
Employer. Employer means the Company and each Affiliate which is identified in Appendix A as may be revised from time to time by the Company.
ERISA. ERISA means the Employee Retirement Income Security Act of 1974, as from time to time amended, including any related regulations.
Incentive Award. Incentive Award means the dollar value of the award payable to a Qualified Employee as determined under the Plan.
Incentive Opportunity. Incentive Opportunity has the meaning provided in Paragraph III.B.
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Individual Performance Goal. Individual Performance Goal has the meaning provided in Paragraph III.D.2.
Individual Performance Modifier. Individual Performance Modifier has the meaning provided in Paragraph III.D.
International Employee. International Employee means any regular full-time or regular part-time employee of an Employer, or such other employee of the Employer identified in an Exhibit to the Plan, who is not on the Employers United States payroll and is working regularly in a location outside of the United States.
Management Employee. 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 for an indefinite period, (iii) who is employed in an Employer established job classification not covered by a collective bargaining agreement, and (iv) who is on the Employers U.S. payroll.
Officer. Officer means a Management Employee who is (i) an officer of the Company as such term is defined in Rule 16a-1(f) under the Securities Exchange Act of 1934, as amended (Rule 16a-1(f)), or (ii) a designated senior officer of the subsidiaries of the Company, including any officer of United Air Lines, Inc. who is an officer of the Company under Rule 16a-1(f) or who reports directly to the Chairman or the CEO.
Performance Period. Performance Period has the meaning provided in Paragraph II.A.1.
Plan Rules. Plan Rules means rules, procedures, policies or practices established by the Company (or the Committee) 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.
Plan Year. Plan Year means the calendar year or, if different, the 12-month period that corresponds to the Companys fiscal year.
Qualified Employee. Qualified Employee has the meaning provided in Paragraph II.A.2.
Salaried Employee. 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 Employers U.S. payroll.
Selected Performance Objectives. Selected Performance Objectives has the meaning provided in Paragraph III.B.1.
Wages. Wages has the meaning provided in Paragraph III.C.
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III. Calculation of Incentive Awards
times
times
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The Incentive Opportunity for performance at points between threshold and target or target and maximum will be determined by linear interpolation. If a Qualified Employee held more than one eligible position during the Plan Year, his or her Incentive Opportunity will be determined based on each corresponding period of participation in the manner provided in Plan Rules. The Incentive Opportunity for Management Employees for performing at the target level shall represent a significant portion of the total target cash compensation for Management Employees and shall be at a level consistent with the Companys historical practice under predecessor performance incentive plans.
C. Wages. Wages for a Performance Period will be determined as follows:
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a. Furlough, which means termination of employment with the Employer in connection with which the Qualified Employee has reemployment rights, or, in the case of a Collective Bargaining Employee, such other employment action as may be defined as a furlough in the applicable collective bargaining agreement;
b. Disability, which means the Qualified Employee has been determined to
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be disabled under the long-term disability plan in which the Qualified Employee participates or by the Company pursuant to Plan Rules;
c. Retirement, which has the meaning assigned to it under the Employers employment policies and regulations; or
d. Death.
4. A Qualified Employee is entitled to payment if he or she involuntarily terminates employment during the Performance Period or between the end of the Performance Period and the payment date, unless he or she is terminated for cause. For this purpose, cause means unacceptable job performance, attendance or misconduct as determined by the Employer in its sole discretion for Management Employees, Salaried Employees and International Employees and as determined under the applicable collective bargaining agreement for Collective Bargaining Employees. If the Employer determines (subject to a contrary determination under any applicable collective bargaining agreement grievance procedure), following an employees termination of employment, that such employee engaged in conduct while employed which would be considered cause, then the Employer may treat such employees termination as termination for cause.
Notwithstanding the foregoing, the Company (or the Committee, in case of Incentive Awards payable to Officers) may in its sole discretion pay an Incentive Award to a Qualified Employee who is not otherwise entitled to receive an Incentive Award because his or her termination of employment occurred during the Performance Period or between the end of the Performance Period and the payment date.
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Appendix A
Participating Affiliates
Name |
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Commencing |
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Ending |
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United Air Lines, Inc. |
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1/1/04 |
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UAL Loyalty Services, Inc. |
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1/1/04 |
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Mileage Plus, Inc. |
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1/1/04 |
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Premier Meeting and Travel Services, Inc. |
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1/1/04 |
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Kion de Mexico, S.A. de C.V. |
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1/1/04 |
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Domicile Management Services, Inc. |
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1/1/04 |
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Appendix A - 1
Appendix B
Wages
B-1. Inclusions. For purposes of Paragraph III.C.1. the following items are included in the definition of Wages:
· base pay
· overtime pay
· holiday pay
· longevity pay
· sick pay
· lead/purser/service director pay
· high skill premium/longevity pay
· language premium
· international and night flying premium pay
· pay for time taken as vacation
· payment for accrued vacation not taken as vacation when paid on account of (i) a leave or (ii) a termination of employment due to a reduction in force or for military leave
· shift differential pay
· back pay (other than judicial or administrative awards of grievance pay or back pay or settlement thereof)
· delayed activation pay
· bypass pay
· check pilot premium pay
· double town salary expense
· senior/junior manning pay
· operational integrity pay
· temporary reclass pay
· Hawaiian override
B-2. Exclusions. For purposes of Paragraph III.C.2. the following items are excluded in the definition of Wages:
· deferred compensation (other than pursuant to Code Sec. 125 or 401(k))
· moving expense and similar allowances
· KERP I and KERP II awards
· performance incentive awards, profit sharing awards or sales incentive awards
· expense reimbursements and per diems
· severance, termination pay and related payments
Appendix B - 1
· payment for accrued vacation time not taken as vacation when paid on account of termination of employment, other than on account of a reduction in force or for a military leave
· disability and workers compensation payments
· duty-free commissions
· recognition lump sums
· flight expense
· retropay created by execution of a collective bargaining agreement, unless the collective bargaining agreement requires inclusion
· reimbursable cleaning
· Employer contributions to employee benefit plans
· solely for purposes of making an Incentive Award payment under this Plan, judicial or administrative awards for grievance pay or back pay (including settlements thereof)
· imputed income for employee or dependent life insurance coverage
· imputed income from pass service charges
· taxable travel
· imputed income from domestic partner benefits
· cash payments made pursuant to any agreement, program, arrangement or plan designed to compensate an employee for amounts that may not be credited or allocated to the employee under a qualified retirement plan due to limitations imposed by tax laws
· taxable fringe benefits, including taxable reimbursement of insurance premiums
· expatriate allowances
· hiring bonuses or other special payments relating to the initiation of employment
· amounts realized with respect to restricted stock, non-qualified stock options or stock appreciation rights
· lost luggage advance
· interest payments
B-3. Special Crediting Rule. For purposes of allocating Wages earned by a Qualified Employee for services rendered during a Performance Period but received following termination of employment, such Wages will be treated as received on the Qualified Employees last day of employment with the Employer.
Appendix B - 2
Exhibit A
Argentina
I. Participation.
A. Eligibility. All International Employees who are working regularly in Argentina and who are on the Employers Argentine payroll are eligible to participate in the Plan (Covered Argentinean Employees).
B. Acknowledgement. In order to receive an Incentive Award under the Plan, a Covered Argentinean Employee must execute a written acknowledgement in the form and manner established by the Employer.
Exhibit A - 1
Exhibit B
Australia
I. Participation.
A. Eligibility. International Employees and casual employees of the Employer who are working regularly in Australia, who are on the Employers Australian payroll and who are not subject to the terms of a collective bargaining agreement with the Employer, unless the terms of such agreement require that such employees participate in the Plan, are eligible to participate in the Plan (Covered Australian Employees).
B. Acknowledgement. In order to receive an Incentive Award under the Plan, a Covered Australian Employee must execute a written acknowledgement in the form and manner established by the Employer.
Exhibit B - 1
Exhibit C
Belgium
I. Participation.
A. Eligibility. International Employees who are working regularly in Belgium, who are on the Employers Belgian payroll and who are not subject to the terms of a collective bargaining agreement with the Employer, unless the terms of such agreement require that such employees participate in the Plan, are eligible to participate in the Plan (Covered Belgium Employees).
B. Acknowledgement. In order to receive an Incentive Award under the Plan, a Covered Belgium Employee must execute a written acknowledgement in the form and manner established by the Employer.
Exhibit C - 1
Exhibit D
Brazil
I. Participation.
A. Eligibility. International Employees who are working regularly in Brazil, who are on the Employers Brazilian payroll and who are not subject to the terms of a collective bargaining agreement with the Employer, unless the terms of such agreement require that such employees participate in the Plan, are eligible to participate in the Plan (Covered Brazilian Employees).
B. Acknowledgement. In order to receive an Incentive Award under the Plan, a Covered Brazilian Employee must execute a written acknowledgement in the form and manner established by the Employer.
II. Plan Terms.
A. Plan Type. The Plan shall be implemented in Brazil as a profit sharing plan.
B. Collective Bargaining Agreement. The terms of the Plan as applied to Covered Brazilian Employees shall be subject to the terms of any collective bargaining agreement.
C. Time of Payments. Covered Brazilian Employees will be paid their quarterly Incentive Awards for the first and second calendar quarters, if any, on or about the August 31 immediately following such calendar quarters, and their quarterly Incentive Awards for the third and fourth quarters, if any, on or about the March 31 immediately following such calendar quarters. Any Incentive Award for a calendar year will be payable on or about the March 31 immediately following such calendar year.
D. Expiration. This Exhibit D shall terminate effective December 31, 2004.
Exhibit D - 1
Exhibit E
Canada
I. Participation.
A. Eligibility. International Employees who are working regularly in Canada, who are on the Employers Canadian payroll and who are not subject to the terms of a collective bargaining agreement with the Employer, unless the terms of such agreement require that such employees participate in the Plan, are eligible to participate in the Plan (Covered Canadian Employees).
B. Acknowledgement. In order to receive an Incentive Award under the Plan, a Covered Canadian Employee must execute a written acknowledgement in the form and manner established by the Employer.
Exhibit E - 1
Exhibit F
China
I. Participation.
A. Eligibility. International Employees who are working regularly in China, who are on the Employers Chinese payroll and who are not subject to the terms of a collective bargaining agreement with the Employer, unless the terms of such agreement require that such employees participate in the Plan, are eligible to participate in the Plan (Covered Chinese Employee).
B. Acknowledgement. In order to receive an Incentive Award under the Plan, a Covered Chinese Employee must execute a written acknowledgement in the form and manner established by the Employer.
C. Payment. Cash Incentive Awards payable to Covered Chinese Employees will be paid in Renminbi.
Exhibit F - 1
Exhibit G
Costa Rica
I. Participation.
A. Eligibility. International Employees who are working regularly in Costa Rica, who are on the Employers Costa Rican payroll and who are not subject to the terms of a collective bargaining agreement with the Employer, unless the terms of such agreement require that such employees participate in the Plan, are eligible to participate in the Plan (Covered Costa Rican Employees).
B. Acknowledgement. In order to receive an Incentive Award under the Plan, a Covered Costa Rican Employee must execute a written acknowledgement in the form and manner established by the Employer.
Exhibit G - 1
Exhibit H
El Salvador
I. Participation.
A. Eligibility. International Employees who are working regularly in El Salvador, who are on the Employers El Salvadoran payroll and who are not subject to the terms of a collective bargaining agreement with the Employer, unless the terms of such agreement require that such employees participate in the Plan, are eligible to participate in the Plan (Covered El Salvadoran Employees).
B. Acknowledgement. In order to receive an Incentive Award under the Plan, a Covered El Salvadoran Employee must execute a written acknowledgement in the form and manner established by the Employer.
Exhibit H - 1
Exhibit I
France
I. General.
A. Plan Type. The Plan as applied to International Employees who are working regularly in France and who are on the Employers French payroll (Covered French Employees) is intended to conform to the requirements of a plan dinterressement, provided, however, the terms of the Plan as applied to Covered French Employees shall be established solely by the terms of a separate written plan instrument approved by the Companys Senior Vice President Human Resources.
Exhibit I - 1
Exhibit J
Germany
I. General.
A. Implementation of Plan. The Companys implementation of the Plan for Covered German Employees (defined below) will be subject to co-determination with any applicable works council.
II. Participation.
A. Eligibility. International Employees who are working regularly in Germany, who are on the Employers German payroll and who are not subject to the terms of a collective bargaining agreement, unless the terms of such agreement require that such employees participate in the Plan, are eligible to participate in the Plan (Covered German Employees).
B. Acknowledgement. In order to receive an Incentive Award under the Plan, a Covered German Employee must execute a written acknowledgement in the form and manner established by the Employer.
C. Termination of Employment. For purposes of Paragraph IV.A. of the Plan, a Covered German Employee is entitled to receive payment of an Incentive Award if he or she voluntarily terminates employment during the Performance Period or after the Performance Period and before the date payment of the Incentive Award is made.
Exhibit J - 1
Exhibit K
Ireland
I. Participation.
A. Eligibility. International Employees who are working regularly in Ireland, who are on the Employers Irish payroll and who are not subject to the terms of a collective bargaining agreement, unless the terms of such agreement require that such employees participate in the Plan, are eligible to participate in the Plan (Covered Irish Employees).
B. Acknowledgement. In order to receive an Incentive Award under the Plan, a Covered Irish Employee must execute a written acknowledgement in the form and manner established by the Employer.
Exhibit K - 1
Exhibit L
Japan
I. Participation.
A. Eligibility. International Employees who are working regularly in Japan, who are on the Employers Japanese payroll and who are not subject to the terms of a collective bargaining agreement with the Employer, unless the terms of such agreement require that such employees participate in the plan, are eligible to participate in the Plan (Covered Japanese Employee).
II. Plan Terms. The terms of the Plan as applied to a Covered Japanese Employee shall be established by the terms of a separate writing approved by the Companys Senior Vice President Human Resources.
Exhibit L - 1
Exhibit M
Korea
I. Participation.
A. Eligibility. International Employees who are working regularly in Korea, who are on the Employers Korean payroll and who are not subject to the terms of a collective bargaining agreement with the Employer, unless the terms of such agreement require that such employees participate in the Plan, are eligible to participate in the Plan (Covered Korean Employees).
B. Acknowledgement. In order to receive an Incentive Award under the Plan, a Covered Korean Employee must execute a written acknowledgement in the form and manner established by the Employer.
Exhibit M - 1
Exhibit N
Mexico
I. Participation.
A. Eligibility. International Employees who are working regularly in Mexico, who are on the Employers Mexican payroll and who are not subject to the terms of a collective bargaining agreement with the Employer, unless the terms of such agreement require that such employees participate in the Plan, are eligible to participate in the Plan (Covered Mexican Employees).
B. Acknowledgement. In order to receive an Incentive Award under the Plan, a Covered Mexican Employee must execute a written acknowledgement in the form and manner established by the Employer.
II. Plan Terms.
A. Offset For Mandatory Profit Sharing. A Covered Mexican Employees Incentive Award under the Plan shall be offset (but not below zero) by the amount of any profit sharing payment such employee is entitled to receive under Mexicos mandatory profit sharing law.
B. Expiration. This Exhibit N shall terminate effective December 31, 2004.
Exhibit N - 1
Exhibit O
The Netherlands
I. General.
A. Term. This Exhibit O shall terminate effective December 31, 2005.
II. Participation.
A. Eligibility. International Employees who are working regularly in the Netherlands, who are on the Employers Dutch payroll and who are not subject to the terms of a collective bargaining agreement with the Employer, unless the terms of such agreement require that such employees participate in the Plan, are eligible to participate in the Plan (Covered Dutch Employees).
B. Acknowledgement. In order to receive an Incentive Award under the Plan, a Covered Dutch Employee must execute a written acknowledgement in the form and manner established by the Employer.
Exhibit O - 1
Exhibit P
Singapore
I. Participation.
A. Eligibility. International Employees who are working regularly in Singapore, who are on the Employers Singapore payroll and who are not subject to the terms of a collective bargaining agreement with the Employer, unless the terms of such agreement require that such employees participate in the Plan, are eligible to participate in the Plan (Covered Singapore Employees).
B. Acknowledgement. In order to receive an Incentive Award under the Plan, a Covered Singapore Employee must execute a written acknowledgement in the form and manner established by the Employer.
Exhibit P - 1
Exhibit Q
Taiwan
I. Participation.
A. Eligibility. International Employees who are working regularly in Taiwan, who are on the Employers Taiwanese payroll and who are not subject to the terms of a collective bargaining agreement with the Employer, unless the terms of such agreement require that such employees participate in the Plan, are eligible to participate in the Plan (Covered Taiwanese Employee).
B. Acknowledgement. In order to receive an Incentive Award under the Plan, a Covered Taiwanese Employee must execute a written acknowledgement in the form and manner established by the Employer.
Exhibit Q - 1
Exhibit R
Thailand
I. Participation.
A. Eligibility. International Employees who are working regularly in Thailand, who are on the Employers Thai payroll and who are not subject to the terms of a collective bargaining agreement with the Employer, unless the terms of such agreement require that such employees participate in the Plan, are eligible to participate in the Plan (Covered Thai Employees).
B. Acknowledgement. In order to receive an Incentive Award under the Plan, a Covered Thai Employee must execute a written acknowledgement in the form and manner established by the Employer.
Exhibit R - 1
Exhibit S
United Kingdom
I. Participation.
A. Eligibility. International Employees who are working regularly in the United Kingdom, who are on the Employers United Kingdom payroll and who are not subject to the terms of a collective bargaining agreement with the Employer, unless the terms of such agreement require that such employees participate in the plan, are eligible to participate in the Plan (Covered UK Employees).
B. Acknowledgement. In order to receive an Incentive Award under the Plan, a Covered UK Employee must execute a written acknowledgement in the form and manner established by the Employer.
Exhibit S - 1
Exhibit T
Uruguay
I. Participation.
A. Eligibility. International Employees who are working regularly in Uruguay, who are on the Employers Uruguayan payroll and who are not subject to the terms of a collective bargaining agreement with the Employer, unless the terms of such agreement require that such employees participate in the Plan, are eligible to participate in the Plan (Covered Uruguayan Employees).
B. Acknowledgement. In order to receive an Incentive Award under the Plan, a Covered Uruguayan Employee must execute a written acknowledgement in the form and manner established by the Employer.
II. Plan Terms.
A. Time of Payment. Covered Uruguayan Employees will be paid their quarterly Incentive Awards for the second, third and fourth 2004 calendar quarters in calendar year 2005 together with their 2004 annual Incentive Award, if any. For quarterly and annual Incentive Awards for calendar year 2005 and thereafter, the Incentive Awards will be paid in a single sum in the calendar year immediately following the calendar year to which the Incentive Award relates. The Incentive Award payment will be made as soon as practicable following the end of the calendar year and determination of the Incentive Awards, including a determination that no annual Incentive Award will be payable.
Exhibit T - 1
Exhibit 99.2
UAL Corporation
Success Sharing Program
Profit Sharing Plan
AFA Employee Group. AFA Employee Group means the Qualified Employees who are in the class or craft of employees covered by the collective bargaining agreement between the Employer and the Association of Flight Attendants (AFA).
Affiliate. Affiliate means each entity, corporate or otherwise, in which the Company, directly or indirectly, owns or controls a greater than 80% interest.
ALPA Employee Group. ALPA Employee Group means the Qualified Employees who are in the class or craft of employees covered by the collective bargaining agreement between the Employer and the Air Lines Pilots Association, International (ALPA).
AMFA Employee Group. AMFA Employee Group means the Qualified Employees who are in the class or craft of employees covered by the mechanics collective bargaining agreement between the Company and the Aircraft Mechanics Fraternal Association (AMFA).
Annual Plan Threshold. Except as provided in Appendix C for certain groups of Qualified Employees, Annual Plan Threshold means ten million dollars ($10,000,000).
Award. Award means the dollar value of the award payable to a Qualified Employee for an Award Year as determined under the Plan.
Award Year. Award Year means the Plan Year for which a profit sharing Award, if any, is determined under the Plan.
Board. Board means the Board of Directors of the Company.
Bonus Pool. Bonus Pool means the aggregate amount available for distribution as profit sharing Awards as determined under Paragraph III.A, or, if applicable, Appendix C.
Code. Code means the Internal Revenue Code of 1986, as amended (including, when the context requires, all regulations, interpretations and rulings issued thereunder).
Collective Bargaining Employee. Collective Bargaining Employee means an employee who (i) is in the class or craft of employees subject to the provisions of a collective bargaining agreement between the Employer and the representative of such class or craft of employees, and (ii) is on the Employers United States payroll.
Committee. Committee means the Human Resources Subcommittee of the Board or such other committee appointed by the Board to exercise the powers and perform the duties assigned to the Human Resources Subcommittee under this Plan.
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Company. Company means UAL Corporation.
Disability. Disability means the Qualified Employee has been determined to be disabled under the Employers long-term disability plan in which such Qualified Employee participates, under the union-sponsored long-term disability plan in which such Qualified Employee participates, or by the Company pursuant to Plan Rules.
Employer. Employer means the Company and each Affiliate which is identified in Appendix A as may be revised from time to time by the Company.
Engineering Group. Engineering Group means the Qualified Employees who are in the class or craft of employees covered by the collective bargaining agreement between the Company and the International Federation of Professional and Technical Engineers (IFPTE).
ERISA. ERISA means the Employee Retirement Income Security Act of 1974, as from time to time amended, including any related regulations.
Flight Dispatcher Group. Flight Dispatcher Group means the Qualified Employees who are in the class or craft of employees covered by the collective bargaining agreement between the Company and the Professional Airline Flight Control Association (PAFCA).
Furlough. Furlough means a Qualified Employees termination of employment with the Employer in connection with which such Qualified Employee has reemployment rights, or, in the case of a Collective Bargaining Employee, such other employment action as may be defined as a furlough in the applicable collective bargaining agreement.
IAM Employee Group. IAM Employee Group means the Qualified Employees who are in the class or craft of employees covered by the security officers, food service, ramp and stores, fleet technical instructors and related employees, maintenance instructors, or public contact employees collective bargaining agreements between the Company and the International Association of Machinists and Aerospace Workers, District 141 (IAM 141).
IAM Mileage Plus Employee Group. IAM Mileage Plus Employee Group means the Qualified Employees who are in the class or craft of employees covered by the collective bargaining agreement between the IAM 141 and Mileage Plus, Inc.
International Employee. International Employee means any regular full-time or regular part-time employee of an Employer whose regular work is in a location outside of the United States but does not include such employees in the AFA Employee Group or who are designated by the Company as expatriates.
Management Employee. 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 for an indefinite period, (iii) who is
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employed in an Employer established job classification not covered by a collective bargaining agreement, and (iv) who is on the Employers U.S. payroll.
Management and Salaried Employee Group. Management and Salaried Employee Group means the Qualified Employees of the Employer who are classified as either a Management Employee or Salaried Employee.
Meteorologist Employee Group. Meteorologist Employee Group means the Qualified Employees who are in the class or craft of employees covered by the collective bargaining agreement between the Company and the Transport Workers Union of America (TWU).
Officer. Officer means a Management Employee who is (i) an officer of the Company as such term is defined in Rule 16a-1(f) under the Securities Exchange Act of 1934, as amended (Rule 16a-1(f)), or (ii) a designated senior officer of the subsidiaries of the Company, including any officer of United Air Lines, Inc. who is an officer of the Company under Rule 16a-1(f) or who reports directly to the Chairman or the CEO.
Plan Rules. Plan Rules means rules, procedures, policies or practices established by the Company (or the Committee) 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.
Plan Year. Plan Year means the 12-month period that corresponds to the Companys fiscal year.
Pre-Tax Profit. Pre-Tax Profit means the Companys consolidated net earnings as determined under U.S. generally accepted accounting principles and reported in regulatory filings, but adjusted as determined by the Committee to exclude any items (whether gains or losses) otherwise included therein relating to (i) unusual, special, extraordinary or nonrecurring charges, (ii) charges with respect to the grant, exercise or vesting of equity awards or options granted to employees of the Company or any Affiliate, (iii) expensed Awards under this Plan (whether or not yet paid), and (iv) consolidated federal, state and local income tax expenses.
Qualified Employee. Qualified Employee means all employees of the Employer who during an Award Year are classified as regular full-time or regular part-time employees, but shall exclude the following:
1. Collective Bargaining Employees who are covered by a collective bargaining agreement which does not expressly provide for coverage under a profit sharing bonus plan such as the Plan; and
2. International Employees.
Retirement. Retirement means the Employee has retired in accordance with the Employers employment policies and regulations.
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Salaried Employee. 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 Employers U.S. payroll.
Year of Service. Year of Service means one or more whole years from a Qualified Employees most recent seniority date maintained on the Employers employment records to the earlier of the employees termination of employment with the Employer and Affiliate or the determination date.
Wages. Wages has the meaning provided in Paragraph III.C.
1. All Qualified Employees are entitled to payment of an Award if their employment is involuntarily terminated (including Furlough), other than for Cause, during the Award Year or after the Award Year and prior to the payment date.
2. All Qualified Employees are entitled to payment of an Award if their termination of employment during an Award Year or after the end of the Award Year and prior to the payment date, is on account of death, Disability or Retirement.
3. All Qualified Employees are entitled to payment if their termination of employment is voluntary and occurs after the end of the Award Year and prior to the payment date.
4. The Company (or the Committee, in case of Awards payable to Officers) may in its sole discretion pay an Award to a Qualified Employee who is not otherwise entitled to receive an Award because his or her termination of employment occurred during the Award Year.
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Year |
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Percentage |
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2006 |
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7.5% |
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2007 and thereafter |
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15.0% |
1. Compensation Included. Wages will only include compensation paid (or payable) during a Plan Year to a Qualified Employee for the period he or she is a Qualified Employee and shall include the items listed in Appendix B as included in Wages. Wages will include compensation not paid as a result of an earnings reduction election made by the Qualified Employee under a Code Sec. 125 cafeteria plan or under any qualified cash or deferred arrangement under Code Sec. 401(k).
2. Exclusions. Wages will not include the items of compensation or other payments listed in Appendix B as excluded from Wages.
3. Reemployment. In the event a Qualified Employee terminates employment and is reemployed by an Employer, such employees Wages will include amounts paid during the applicable Plan Year, both prior to the termination and following such reemployment.
4. Determination of Wages. The Companys Senior Vice President Human Resources will determine, in his or her discretion (subject to a contrary
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requirement under any applicable collective bargaining agreement determination under any applicable collective bargaining agreement grievance procedure in the case of a Collective Bargaining Employee), whether an item of compensation is included or excluded from the definition of Wages.
2. Payment of Awards for any employee group shall be made as a profit sharing contribution to the applicable Employer-sponsored 401(k) plan if required under the terms of the applicable collective bargaining agreement or, in the case of the Management and Salaried Employee Group, if so determined by the Company.
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IV. Plan Administration.
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B. Governing Law. The validity, construction, interpretation, administration and effect of the Plan and any rules,regulations and actions relating to the Plan will be governed by and construed exclusively in accordance with the laws of the United States and the State of Illinois, notwithstanding the conflicts of law principles of any jurisdiction.
IN WITNESS WHEREOF, the Company has caused this Plan to be executed on its behalf, effective as of January 1, 2006.
UAL CORPORATION
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By: |
/s/ |
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Frederic F. Brace |
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Name: |
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Frederic F. Brace |
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Title: |
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Executive Vice President |
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and Chief Financial Officer |
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Appendix A
Participating Affiliates
Commencing |
Ending |
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United Air Lines, Inc. |
1/1/06 |
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Mileage Plus, Inc. |
1/1/06 |
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Appendix A - 1
Appendix B
Wages
B-1. Inclusions. For purposes of Paragraph III.C.1. the following items are included in the definition of Wages:
· base pay
· overtime pay
· holiday pay
· longevity pay
· sick pay
· lead/purser/service director pay
· high skill premium/longevity pay
· language premium
· international and night flying premium pay
· pay for time taken as vacation
· payment for accrued vacation not taken as vacation when paid on account of (i) a leave or (ii) a termination of employment due to a reduction in force or for military leave
· shift differential pay
· back pay (other than judicial or administrative awards of grievance pay or back pay or settlement thereof)
· delayed activation pay
· bypass pay
· check pilot premium pay
· double town salary expense
· senior/junior manning pay
· operational integrity pay
· temporary reclass pay
· Hawaiian override
B-2. Exclusions. For purposes of Paragraph III.C.2. the following items are excluded in the definition of Wages:
· deferred compensation (other than pursuant to Code Sec. 125 or 401(k))
· moving expense and similar allowances
· KERP I and KERP II awards
· performance incentive awards, profit sharing awards or sales incentive awards
· expense reimbursements and per diems
· severance, termination pay and related payments
· payment for accrued vacation time not taken as vacation when paid on account of termination of employment, other than on account of a reduction in force or for a military leave
· disability and workers compensation payments
· duty-free commissions
· recognition lump sums
Appendix B - 1
· flight expense
· retropay created by execution of a collective bargaining agreement, unless the collective bargaining agreement requires inclusion
· reimbursable cleaning
· Employer contributions to employee benefit plans
· solely for purposes of making an award payment under this Plan, judicial or administrative awards for grievance pay or back pay (including settlements thereof)
· imputed income for employee or dependent life insurance coverage
· imputed income from pass service charges
· taxable travel
· imputed income from domestic partner benefits
· cash payments made pursuant to any agreement, program, arrangement or plan designed to compensate an employee for amounts that may not be credited or allocated to the employee under a qualified retirement plan due to limitations imposed by tax laws
· taxable fringe benefits, including taxable reimbursement of insurance premiums
· expatriate allowances
· hiring bonuses or other special payments relating to the initiation of employment
· amounts realized with respect to restricted stock, non-qualified stock options or stock appreciation rights
· lost luggage advance
· interest payments
· taxable distributions of UAL common stock or notes (including cash in lieu of such stock or notes) made in connection with UAL Corporations confirmed plan of reorganization under Chapter 11 of the U.S. Bankruptcy Code
· payments made to employees domiciled outside of the United States that are in lieu of Employer contributions to a retirement plan.
B-3. Special Crediting Rule. For purposes of allocating Wages earned by a Qualified Employee for services rendered during a Plan Year but received following termination of employment, such Wages will be treated as received on the Qualified Employees last day of employment with the Employer.
Appendix B - 2
Appendix C
Special Award Provisions
C-1 Purpose and Application. The purpose of this Appendix C to the UAL Corporation Success Sharing Program Profit Sharing Plan is to modify and supplement the provisions of the Plan as they relate to Qualified Employees who are in the IAM Mileage Plus Employee Group.
C-2 Annual Plan Threshold. For purposes of this Appendix C, the Annual Plan Threshold means 10% of the Companys Net UAL Revenue for the specified Award Year, where Net UAL Revenue means the Companys consolidated Operating Revenues less Regional affiliates expense, both as determined under U.S. generally accepted accounting principles and reported in regulatory filings.
C-3 Bonus Pool. For purposes of this Appendix C, after the end of each Award Year, to the extent that the Companys Pre-Tax Profit exceeds the specified Annual Plan Threshold under Section C-2 for that Year, a Bonus Pool will be established in an aggregate amount equal to fifteen percent (15%) of the Companys Pre-Tax Profit that is in excess of the Annual Plan Threshold for that Award Year, but not in excess of an amount equal to eight percent (8%) of the aggregate Wages of all Qualified Employees eligible to receive payment of an Award for such Award Year under this Appendix C. The IAM Mileage Plus Employee Group will be allocated 0.078625% of the Bonus Pool, and the Qualified Employees in the IAM Mileage Plus Employee Group will receive an allocation of the Bonus Pool as determined by the IAM 141.
Appendix C - 1