Exhibit 10.14
As Amended
September 30, 1994
UAL CORPORATION
1988 RESTRICTED STOCK PLAN
1. Purpose.
The purposes of the Plan are to attract and retain key
employees of the Company and its Subsidiaries, to compensate
them for their contributions to the growth and profits of the
Company and its Subsidiaries and to encourage ownership by them
of shares of Common Stock of the Company.
2. Definitions.
(a) "Company" shall mean UAL Corporation.
(b) "Subsidiary" or "Subsidiaries" shall mean a
corporation or corporations of which the Company owns, directly
or indirectly, shares having a majority of the ordinary voting
power for the election of directors.
(c) "Board" shall mean the Board of Directors of the
Company.
(d) "Committee" shall mean, as applicable, 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 the
Compensation Committee of the Board of Directors of the Company
for all other grants.
(e) "Plan" shall mean the UAL Corporation 1988
Restricted Stock Plan.
(f) "Restricted Share" shall mean a share of Common
Stock of the Company, par value $.01 per share ("Common Stock"),
allocated to a Recipient pursuant to the Plan.
(g) "Recipient" shall mean an employee of the Company
or a Subsidiary to whom shares are allocated pursuant to the Plan
and shall be deemed to include such Recipient's estate and the
beneficiaries of such estate as the context may require.
(h) "Change in Control" shall be deemed to have
occurred if (A) any "person" (as such term is used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")), is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Company representing
25% or more of the combined voting power of the Company's then
outstanding securities (such percentage ownership to be
determined in the manner provided in Rule 13d-3(d)(1)(i) under
the Exchange Act); or (B) during any period of two consecutive
years or portion thereof not including any period prior to July
1, 1993, individuals who at the beginning of such period
constitute the Board and any new director (other than a director
designated by a person who has entered into an agreement with the
Company to effect a transaction described in clause (A) or (C) of
this Subsection) whose election by the Board or nomination for
election by the Company's shareholders was approved by a vote of
at least two-thirds (2/3) of the directors then still in office
who either were directors at the beginning of the period or whose
election or nomination for election was previously so approved,
cease for any reason to constitute a majority thereof; or (C) the
shareholders of the Company approve a merger or consolidation of
the Company with any other corporation (or similar transaction),
other than a merger or consolidation (or similar transaction)
which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into
voting securities of the surviving entity) at least 80% of the
combined voting power of the voting securities of the Company or
such surviving entity outstanding immediately after such merger,
consolidation or similar transaction (either alone or in
combination with new or additional voting securities held by
management of the Company and its subsidiaries) or the
shareholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all of the
Company's assets. For purposes of (I) clause (A) of the
preceding sentence, beneficial ownership of securities of United
Air Lines, Inc. ("United") representing 25% or more of the
combined voting power of United's then outstanding securities
shall be deemed to constitute such beneficial ownership of the
Company and (II) clause (C) of the preceding sentence, the
approval by the shareholders of United of a plan of complete
liquidation of United or an agreement for the sale or disposition
by United of all or substantially all of United's assets shall be
deemed to constitute approval by the shareholders of the Company
of such events in respect of the Company.
3. Restricted Shares Available Under the Plan.
(a) An aggregate of five hundred thousand (500,000)
shares of Common Stock, par value $5 per share, will be available
for allocation under the Plan.1 Such shares, which shall be
treasury shares of such Common Stock, shall be credited to a
Restricted Share reserve.2 Upon the allocation of shares
hereunder, said reserve shall be reduced by the number of shares
so allocated. Upon the failure of a Recipient to complete on a
timely basis all of the requirements of Section 6 in connection
with the allocation of any Restricted Shares or upon the
forfeiture of any Restricted Shares pursuant to Section 7(d) or
Section 9, the Restricted Share reserve shall be increased by
such number of shares, and such Restricted Shares may again be
the subject of allocations hereunder.
(b) In the event of any stock dividend, stock split,
merger, consolidation, reorganization, recapitalization, or other
change in corporate structure of the Company, appropriate
adjustments shall be made in the aggregate number of shares which
may be allocated under the Plan. Such adjustments shall be made
by the Committee, whose determination as to what adjustments
shall be made, and the extent thereof, shall be final. No
fractional shares of stock shall be allocated or authorized by
any such adjustment.
4. Eligibility and Making of Allocations.
(a) Any officer or key employee of the Company or any
Subsidiary shall be eligible to receive an allocation of
Restricted Shares pursuant to the Plan.
(b) The Committee shall from time to time select those
employees who will receive allocations and determine the number
of Restricted Shares subject to each such allocation.
Notwithstanding any other provision of the Plan to the contrary,
in no event may the aggregate number of Restricted Shares
allocated to any individual exceed 30,000 in any period of two
calendar years, provided, however, that allocations 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 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).
5. Form of Allocations.
(a) Each allocation shall specify the number of
Restricted Shares subject thereto. At the time of making any
allocation, the Committee or its designee shall advise the
Recipient thereof by delivery of written notice in the form
prescribed by the Committee.
(b) The Company shall take such action as shall be
necessary to cause any Restricted Shares not previously so listed
to be listed on the New York Stock Exchange and/or such other
exchange or exchanges on which shares of the same class as the
Restricted Shares are then listed.
6. Actions Required of Recipients.
(a) Within 30 days of an allocation of Restricted
Shares, the Recipient shall deliver to the Company an agreement
in writing, signed by such Recipient, in form and substance as
prescribed by the Committee, together with a stock power, duly
endorsed in blank, relating to such Restricted Shares. The
Company may require that the Recipient represent to the Company
in such agreement that such Recipient is acquiring such
Restricted Shares for the purpose of investment and with no
present intention to transfer, sell or otherwise dispose of such
shares, except such distribution by a legal representative as
shall be required by will or the laws of descent and distribution
of any jurisdiction in administering the estate of any Recipient.
In the event the Company requires such a representation in
connection with an acquisition of Restricted Shares hereunder,
such shares shall be transferable only if (i) the proposed
transfer shall be permissible pursuant to the Plan and (ii) the
Company shall determine at the time of the lapse of the
restrictions thereon pursuant to Section 7(c) or at any time
thereafter (based upon an opinion of counsel satisfactory to the
Company, if the Company shall so require) that such a transfer
would comply with applicable securities laws.
(b) The date on which such agreement and stock power
are received by the Company shall be deemed the "Date of
Transfer" of the Restricted Shares. The failure of a Recipient
to deliver such agreement and stock power within 30 days from the
date of an allocation of shares shall terminate such allocation
to the Recipient.
7. Restrictions.
(a) On or promptly after the Date of Transfer of
Restricted Shares, a certificate or certificates representing
such shares shall be prepared in the Recipient's name. The
Recipient shall thereupon be a stockholder with respect to all
the shares represented by such certificate or certificates and
shall have all the rights of a stockholder with respect to all
such shares, including the right to vote such shares and to
receive all dividends and other distributions (subject to the
provisions of Section 7(b)) paid with respect to such shares,
provided, however, that such shares shall be subject to the
restrictions hereinafter described in Section 7(d). Certificates
of stock representing Restricted Shares shall be imprinted with a
legend to the effect that the shares represented thereby may not
be sold, exchanged, transferred, pledged, hypothecated or
otherwise disposed of except in accordance with the terms of the
Plan, and each transfer agent for the Common Stock shall be
instructed to the same effect in respect of such shares. In aid
of such restrictions, during the Restricted Period with respect
to the Restricted Shares represented by such a certificate, such
certificate, together with the stock power described in Section
6(a), shall remain in the physical custody of the Company.
(b) In the event that, as the result of an event
giving rise to an adjustment described in Section 3(b), the
Recipient shall, as the owner of Restricted Shares, receive new
or additional or different shares of stock or securities, the
certificate or certificates for, or other evidences of, such new
or additional or different shares or securities shall also be
imprinted with a legend as provided in Section 7(a) and, together
with a stock power duly endorsed in blank by the Recipient, shall
remain in the physical custody of the Company, and all provisions
of the Plan relating to restrictions and lapse of restrictions
shall thereupon be applicable to such new or additional or
different shares or securities; provided, however, that if the
Recipient shall receive rights, warrants or fractional interests
in respect of any of such Restricted Shares, such rights or
warrants may be held, exercised, sold or otherwise disposed of,
and such fractional interests may be settled, by the Recipient,
without regard to such restrictions.
(c) The term "Restricted Period" with respect to
Restricted Shares shall mean a period commencing on the Date of
Transfer of such shares and ending ten (10) years after such Date
of Transfer or, if sooner, upon the first to occur of any of the
following:
(i) the dissolution of the Company, or any merger
or consolidation of the Company where the Company is not the
surviving corporation and the surviving corporation does not
agree to exchange the Restricted Shares outstanding
hereunder for shares of stock or securities of which it is
the issuer having an aggregate value equal to the aggregate
value of such Restricted Shares;
(ii) a Change in Control;
(iii) a determination by the Committee at any
time to accelerate or terminate such Restricted Period, but
only to the extent of such determination.
Notwithstanding the foregoing provision of this Section 7(c), the
Committee may provide with respect to any allocation of
Restricted Shares that the "Restricted Period" with respect to
such Restricted Shares shall lapse based upon the attainment by
the Company of one or more target levels of pre-tax income (as
determined under generally accepted accounting principles but
without regard to any items (whether gains or losses) otherwise
included therein relating to (1) the UAL Corporation Employee
Stock Ownership Plan, the UAL Corporation Supplemental ESOP, or
the trusts relating thereto, (2) any event or occurrence that the
Committee determines to be either not directly related to the
operations of the Company or not within the reasonable control of
the Company's management, (3) the Plan and (4) the Company's
Incentive Compensation Plan). Such target level(s) shall be
determined by the Committee on or before the allocation of such
Restricted Shares, shall relate to such period or periods of time
as the Committee shall prescribe and may provide that any period
in which such pre-tax income is less than zero may be
disregarded.
(d) During the Restricted Period applicable to any
Restricted Shares and except as otherwise specifically provided
in the Plan, none of such Restricted Shares may be sold,
assigned, exchanged, transferred, pledged, hypothecated or
otherwise disposed of or encumbered. If a Recipient ceases to be
an employee of the Company or any Subsidiary for any reason, all
of such Recipient's Restricted Shares which at such time remain
subject to the restrictions imposed hereunder shall be forfeited
and returned to the Company, unless and to the extent the
Committee determines to end the Restricted Period with respect to
any such Restricted Shares pursuant to Section 7(c)(iii).
(e) The restrictions set forth in Section 7(d) shall
lapse with respect to Restricted Shares when the Restricted
Period applicable to such shares expires, as described in Section
7(c).
8. Administration.
The Committee shall administer the Plan and construe
its provisions. The Committee is authorized, subject to the
provisions of the Plan, to establish such rules and regulations
as it deems necessary for the proper administration of the Plan
and to determine such other terms and conditions of Restricted
Shares and make such other determinations and interpretations and
to take such action in connection with the Plan as it deems
necessary or advisable. All determinations by the Committee in
carrying out, administering or construing this Plan shall be
final, binding and conclusive for all purposes and upon all
persons interested herein.
9. Limitations.
(a) Except as provided herein, no person shall at any
time have any right to receive an allocation of Restricted Shares
hereunder, and no person shall have authority to enter into an
agreement for the making of an allocation hereunder or to make
any representation or warranty with respect thereto without the
approval of the Committee and the Board.
(b) Recipients of allocations shall have no rights in
respect thereof except as set forth in the Plan. Except as
provided in Section 6(a), in the event that any attempt shall be
made to sell, assign, transfer, pledge, hypothecate or otherwise
dispose of or encumber any Restricted Shares which are then
subject to restrictions hereunder, the shares which are the
subject of such attempted disposition shall be deemed forfeited
and shall be returned to the Company. No Recipient shall have
any rights as a stockholder with respect to any shares reserved
for allocation hereunder nor shall any such shares be earmarked
for any Recipient prior to the Date of Transfer of such shares.
(c) Neither the action of the Company in establishing
the Plan, nor any action taken by it or by the Board or the
Committee under the Plan, nor any provision of the Plan, shall be
construed as giving to any person the right to be retained in
employment with the Company or any Subsidiary.
10. Amendment, Suspension or Termination of the Plan in Whole or
in Part.
The Board may amend, suspend or terminate the Plan in
whole or in part at any time, provided that such amendment,
suspension or termination shall not, without a Recipient's
consent, affect adversely such Recipient's rights with respect to
allocations of Restricted Shares theretofore made; and provided,
further, that no modification of the Plan by the Board without
approval of the stockholders of the Company shall (i) increase
the maximum number of Restricted Shares available for allocation
under the Plan pursuant to Section 3 of the Plan or (ii) render
any member of the Committee eligible to receive an allocation of
Restricted Shares at any time while such member is serving on the
Committee.
11. Withholding.
The Company shall be entitled to withhold the amount of
taxes which the Company deems necessary to satisfy any applicable
federal, state and local tax withholding obligations arising from
allocations of or the lapse of restrictions on Restricted Shares
under the Plan, or to make other appropriate arrangements with
Recipients to satisfy such obligations. At the discretion of the
Committee, the Company may deduct or withhold from any transfer
or payment to a Recipient, or may receive payment from a
Recipient, in the form of cash or other property, including
shares of Common Stock of the Company.
12. Effective Date and Term of Plan.
(a) The Plan was adopted by the Board on March 31,
1988, subject to approval of the Plan by the shareholders of the
Company within twelve (12) months after its adoption by the
Board. If the Plan is not so approved, the Plan shall be
ineffective. No Restricted Shares may be allocated to a
Recipient under the Plan unless and until such shareholders have
so approved the Plan.
(b) The Plan shall terminate ten (10) years after the
date of its adoption by the Board, unless terminated sooner by
the Board. No Restricted Shares may be allocated under the Plan
after its termination date, but the Plan shall continue in effect
with respect to all Restricted Shares which, as of such
termination date, have been allocated under the Plan.
1 Pursuant to the recapitalization of the Company on July 12,
1994, each share of old Common Stock, par value $5 per share, was
reclassified and converted into, among other things, 1/2 of a share
of new Common Stock, par value $.01 per share.
2 The Restricted Share reserve of old Common Stock immediately
prior to the Effective Time (as defined in the Agreement and Plan
of Recapitalization of the Company and which occurred on July 12,
1994) shall continue to constitute such Restricted Share reserve
of new Common Stock as of the Effective Time. Such reserve is
equal to 142,500 shares of new Common Stock as of the Effective
Time.