Exhibit 10.13
As Amended
September 30, 1994
UAL CORPORATION
1981 INCENTIVE STOCK PLAN
1. Purpose. The purpose of the UAL Corporation 1981
Incentive Stock Plan (the "Plan") is to attract and retain
outstanding individuals as officers and key employees of UAL
Corporation (the "Company") and its subsidiaries, and to furnish
incentives to such persons by providing such persons
opportunities to acquire shares of the Company's Common Stock,
par value $.01 per share ("Common Stock"), or monetary payments
based on the value of such shares or both, on advantageous terms
as herein provided.
2. Administration. The Plan shall be administered by
a stock option committee (the "Committee") of not less than three
Directors of the Company who shall be appointed from time to time
by the Board of Directors of the Company; provided, however, that
no Director, who within one year prior thereto was eligible to
participate in the Plan, shall be appointed as a member of the
Committee. No member of the Committee shall be eligible, while a
member of the Committee, to receive a Benefit under the Plan.
The Committee is authorized to interpret the provisions of the
Plan, to prescribe, amend and rescind rules and regulations
relating to the Plan, to determine the terms and conditions of
Benefits to be granted under the Plan and to make all other
determinations necessary or advisable for the administration of
the Plan, but only to the extent not contrary to or inconsistent
with the express provisions of the Plan.
3. Participants. The Plan shall be administered by
the Compensation Administration Committee of the Board of
Directors of the Company for all grants to (I) any "officer" as
such term is defined in Rule 16a-1(f) under the Securities
Exchange Act of 1934, as amended, or (II) any "covered employee"
within the meaning of Section 162(m) of the Internal Revenue Code
of 1986, as amended, and the regulations promulgated thereunder,
and by the Compensation Committee of the Board of Directors of
the Company for all other grants (such committee, as applicable,
herein called the "Committee"). The Committee shall consider
such factors as it deems pertinent in selecting participants and
in determining the type and amount of their respective Benefits,
including without limitation (i) the financial condition of the
Company; (ii) anticipated profits for the current or future
years; (iii) contributions of participants to the profitability
and development of the Company; and (iv) other compensation
provided to participants.
4. Types of Benefits. Benefits under the Plan may be
granted in any one or a combination of (a) Incentive Stock
Options, (b) Non-qualified Stock Options, and (c) Stock
Appreciation Rights, all as described below.
5. Shares Reserved under the Plan. There is hereby
reserved for issuance under the Plan an aggregate of 1,200,000
shares of Common Stock, which may be newly issued or treasury
shares.* All of such shares may, but need not, be issued
pursuant to the exercise of Incentive Stock Options. If there is
a lapse, expiration, termination or cancellation of any Benefit
granted hereunder without the issuance of shares or payment of
cash thereunder, or if shares are issued under any Benefit and
thereafter are reacquired by the Company pursuant to rights
reserved upon the issuance thereof, the shares subject to or
reserved for such Benefit may again be used for new options or
rights under this Plan; provided, however, that in no event may
the number of shares issued under this Plan exceed the total
number of shares reserved for issuance hereunder.
Notwithstanding any other provision of the Plan to the contrary,
in no event may the aggregate number of shares of Common Stock
with respect to which options or Stock Appreciation Rights are
granted to any individual exceed 125,000 in any period of two
calendar years, provided, however, that grants made to any new
employee as a condition of employment may not exceed two times
such biennial limit during the first two years of employment.
If, pursuant to Section 1.9 of the Agreement and Plan of
Recapitalization among the Company, Air Line Pilots Association,
International and International Association of Machinists and
Aerospace Workers (the "Agreement"), the Company becomes
obligated to issue the Additional Shares (as defined in the
Agreement), the number of shares reserved for issuance hereunder
as well as the limitations set forth in the preceding sentence
shall be increased by the percentage determined by dividing the
number of Additional Shares the Company is so required to issue
by the number of Fully Diluted Old Shares (as defined in the
Agreement).
* Represents shares of Common Stock reserved for issuance
under the Plan in connection with grants made on or after
July 12, 1994.
6. Incentive Stock Options. Incentive Stock Options
will consist of options to purchase shares of Common Stock at
purchase prices not less than one hundred percent (100%) of the
fair market value of such shares on the date of grant. Incentive
Stock Options will be exercisable over not more than ten (10)
years after date of grant and shall terminate not later than
three (3) months after termination of employment for any reason
other than death. If the optionee should die while employed or
within three (3) months after termination of employment, the
right of the optionee or his or her successor in interest to
exercise an option shall terminate not later than twelve (12)
months after the date of death. The aggregate fair market value
(determined as of the time the option is granted) of the shares
of Common Stock which any participant may exercise pursuant to
Incentive Stock Options for the first time in any calendar year
(under all option plans of the Company and its parent and
subsidiary corporations) shall not exceed $100,000.
7. Non-qualified Stock Options. Non-qualified Stock
Options will consist of options to purchase shares of Common
Stock at purchase prices not less than one hundred percent (100%)
of the fair market value of shares on the date of grant. Non-
qualified Stock Options will be exercisable over not more than
ten (10) years after date of grant. Non-qualified Stock Options
will terminate no later than six (6) months after termination of
employment for any reason other than retirement or death, unless
immediately after such termination of employment the optionee
shall be a member of the Board of Directors of the Company, in
which case such options will terminate two (2) years after such
termination of employment. In the event termination of
employment occurs by reason of the optionee's retirement, the
option shall terminate not later than the fixed expiration date
set forth therein. In the event termination of employment occurs
by reason of the optionee's death or if the optionee's death
occurs within six months after termination of employment, the
option shall terminate not later than twelve (12) months after
the date of such death.
8. Stock Appreciation Rights. The Committee may, in
its discretion, grant a Stock Appreciation Right to the holder of
any Non-qualified Stock Option granted hereunder. In addition, a
Stock Appreciation Right may be granted independently of and
without relation to any stock option. Stock Appreciation Rights
shall be subject to such terms and conditions consistent with the
Plan as the Committee shall impose from time to time, including
the following:
(a) A Stock Appreciation Right may be granted with
respect to a Non-qualified Stock Option at the
time of its grant or at any time thereafter up to
six (6) months prior to its expiration.
(b) Each Stock Appreciation Right will entitle the
holder to elect to receive up to 100% of the
appreciation in fair market value of the shares
subject thereto up to the date the right is
exercised. In the case of a Stock Appreciation
Right issued in relation to a Non-qualified Stock
Option, such appreciation shall be measured from
the option price. In the case of a Stock
Appreciation Right issued independently of any
stock option, the appreciation shall be measured
from not less than the fair market value of the
Common Stock on the date the right is granted.
(c) The Committee shall have the discretion to satisfy
a participant's right to receive the amount of
cash determined under subparagraph (b) hereof, in
whole or in part, by the delivery of shares of
Common Stock valued as of the date of the
participant's election.
(d) In the event of the exercise of a Stock
Appreciation Right, the number of shares reserved
for issuance hereunder (and the shares subject to
the related option, if any) shall be reduced by
the number of shares with respect to which the
right is exercised.
9. Nontransferability. Each Benefit granted under
this Plan shall not be transferable other than by will or the
laws of descent and distribution, and shall be exercisable,
during the holder's lifetime, only by the holder.
10. Other Provisions. The award of any Benefit under
the Plan may also be subject to other provisions (whether or not
applicable to the Benefit awarded to any other participant) as
the Committee determines appropriate, including, without
limitation, provisions for the purchase of common shares under
stock options in installments, provisions for the payment of the
purchase price of shares under stock options by delivery of other
shares of the Company having a then market value equal to the
purchase price of such shares, restrictions on resale or other
disposition, such provisions as may be appropriate to comply with
federal or state securities laws and stock exchange requirements
and understandings or conditions as to the participant's
employment in addition to those specifically provided for under
the Plan.
11. Term of Plan and Amendment, Modification or
Cancellation of Benefits. No Benefit shall be granted after
December 8, 2001; provided, however, that the terms and
conditions applicable to any Benefits granted prior to such date
may at any time be amended, modified, extended or canceled by
mutual agreement between the Committee and the participant or
such other persons as may then have an interest therein, so long
as any amendment or modification does not increase the number of
shares of Common Stock issuable under this Plan and any extension
does not extend the option term beyond ten (10) years.
12. Taxes. The Company shall be entitled to withhold
the amount of any tax attributable to any amount payable or
shares deliverable under the Plan after giving the person
entitled to receive such amount or shares notice as far in
advance as practicable, and the Company may defer making payment
or delivery if any such tax may be pending unless and until
indemnified to its satisfaction.
13. Fair Market Value. The Fair Market Value of the
Company's shares of Common Stock at any time shall be determined
in such manner as the Committee may deem equitable or required by
applicable laws or regulations.
14. Adjustment Provisions.
(a) If the Company shall at any time change the number
of issued shares of Common Stock without new
consideration to the Company (such as by stock
dividend or stock split), the total number of
shares reserved for issuance under this Plan and
the number of shares covered by each outstanding
Benefit shall be adjusted so that the aggregate
consideration payable to the Company and the value
of each such Benefit shall not be changed. The
Committee shall also have the right to provide for
the continuation of Benefits or for other
equitable adjustments after changes in the shares
of Common Stock resulting from reorganization,
sale, merger, consolidation or similar occurrence.
(b) Notwithstanding any other provision of this Plan,
and without affecting the number of shares
otherwise reserved or available hereunder, the
Committee may authorize the issuance or assumption
of Benefits in connection with any merger,
consolidation, acquisition of property or stock,
or reorganization upon such terms and conditions
as it may deem appropriate.
15. Amendment and Termination of Plan. The Board of
Directors of the Company may amend the Plan from time to time or
terminate the Plan at any time, but no such action shall reduce
the then existing amount of any participant's Benefit or
adversely change the terms and conditions thereof without the
participant's consent. However, except for adjustments expressly
provided for herein, no amendment may, without stockholder
approval, (i) materially increase the Benefits accruing to
participants, (ii) materially increase the number of shares which
may be issued, or (iii) materially modify the requirements as to
eligibility for participation in the Plan.
16. Stockholder Approval. The Plan was adopted by the
Board of Directors of the Company on December 9, 1981, and was
ratified by the stockholders of the Company on April 29, 1982.
The Board of Directors amended the Plan on October 31, 1985, to
permit the exercise of non-qualified stock options after
termination of employment due to retirement up to their fixed
expiration date, and to increase the shares of old common stock,
par value $5 per share ("Old Common Stock"), of the Company
reserved for issuance under the Plan from 1,300,000 shares to
3,300,000 shares. The latter amendment was subject to
shareholder approval, which was obtained on April 24, 1986.
The Board of Directors amended the Plan on February 28, 1991, to
extend the duration of the Plan from December 8, 1991 to December
8, 2001, and to increase the shares of Old Common Stock of the
Company reserved for issuance under the Plan from 3,300,000
shares to 4,300,000 shares. These amendments were approved by
the Company's stockholders on April 25, 1991.
The Board of Directors amended the Plan on July 12, 1994, to
limit the number of shares of Common Stock with respect to which
options may be granted under the Plan to any individual during
any two-year period to 125,000 (250,000 with respect to grants
made to any new employee as a condition of employment), subject
to adjustment if additional shares become issuable to the
employee groups in accordance with the Agreement, and to provide
for 1,200,000 shares of Common Stock of the Company to be
available for issuance under the Plan subsequent to the
Recapitalization of the Company on July 12, 1994. Additional
shares are reserved for issuance on account of the options
granted prior to the Recapitalization for old Common Stock ("Pre-
Closing Options") that became exercisable for new Common Stock
and cash as a result of the Recapitalization; however, these
shares are not available for future awards in the event any Pre-
Closing Option is forfeited or expires unexercised. These
amendments were approved by the Company's stockholders on July
12, 1994.