Exhibit 10.1

 
 
 

UAL CORPORATION

2002 SHARE INCENTIVE PLAN

             1.          Purpose of the Plan

            The purposes of the UAL Corporation 2002 Share Incentive Plan (the
"Plan") are (1) to attract and retain outstanding individuals as officers and
key employees of UAL Corporation (the "Company") and its subsidiaries, to
further align such persons' interests with those of the Company's shareholders
through compensation that is based on shares of the Company's common stock, par
value $.01 per share ("Common Stock"), and to furnish incentives to such persons
by providing such persons opportunities to acquire shares of Common Stock or
monetary payments based on the value of such shares or both, on advantageous
terms as herein provided; and (2) to provide for the grant of equity-based
awards to non-union employees pursuant to the Company's recovery plan.

2.         Definitions

             The following capitalized terms used in the Plan have the
respective meanings set forth in this Section:
 

(a)      Award:  An Incentive Stock Option, Nonqualified Stock Option, Stock
Appreciation Right, Restricted Share or Other Share-Based Award granted pursuant
to the Plan.

 

(b)      Board:  The Board of Directors of the Company.

 

(c)      Code:  The U.S. Internal Revenue Code of 1986, as amended, or any
successor law.

 

(d)      Committee:  As applicable, the Compensation Administration Committee or
the Compensation Committee of the Board.

 

(e)      Common Stock:  The Company's common stock, par value $.01 per share.

 

(f)       Company:   UAL Corporation.

 

(g)      Effective Date:  The date specified in Section 5 of the Plan.

 

(h)      Exchange Act:  The U.S. Securities Exchange Act of 1934, as amended, or
any successor law.

 

(i)       Exercise Price:  The purchase price per share of Common Stock under
the terms of an Incentive Stock Option or Nonqualified Stock Option or Stock
Appreciation Right as determined pursuant to Section 6, 7 or 9, respectively, of
the Plan.

 

(j)      Fair Market Value:  Unless otherwise determined by the Committee, the
fair market value of the Company's shares of Common Stock as of any date shall
be the mean between the lowest and highest reported sale prices of the Common
Stock on that date on the New York Stock Exchange as reported in the Wall Street
Journal.

 

(k)      Incentive Stock Option:  A stock option granted pursuant to Section 6
of the Plan.

 

(l)       Nonqualified Stock Option:  A stock option granted pursuant to Section
7 of the Plan.

 

(m)      Other Share-Based Awards:  Awards granted pursuant to Section 10 of the
Plan.

 

(n)      Participant:  Officers and other employees of the Company and its
Subsidiaries as the Committee in its sole discretion may designate from time to
time to participate hereunder.

 

(o)      Plan:  The UAL Corporation 2002 Share Incentive Plan, as may be amended
from time to time.

 

(p)      Restricted Share: A restricted share of Common Stock granted pursuant
to Section 8 of the Plan.

 

(q)      Stock Appreciation Right:  A stock appreciation right granted pursuant
to Section 9 of the Plan.

 

(r)      Subsidiary:  United Air Lines, Inc., any other corporation all of the
outstanding voting stock of which is owned, directly or indirectly, by the
Company, and any other such entity, corporate or otherwise, as the Company in
its sole discretion from time to time determines to be a Subsidiary.

 

 

3.         Shares Subject to the Plan

             There is hereby reserved for issuance under the Plan the sum of:
(i) 12,500,000 shares of Common Stock; (ii) all shares of Common Stock that are
available for the issuance of awards as of the Effective Date under the UAL
Corporation 1998 Restricted Stock Plan (the "Restricted Stock Plan"); and (iii)
shares of Common Stock that, as of the Effective Date, are represented by awards
granted under the Restricted Stock Plan that are (A) subsequently forfeited,
expired or canceled without the delivery of shares of Common Stock or (B)
withheld by the Company to satisfy any applicable tax withholding obligations.
Such sum shall be reduced to the extent such shares of Common Stock are used for
the grant of  equity-based awards out of treasury shares under the UAL
Corporation Pilots Stock Option Plan as part of the Company's recovery plan and
the Company decides to use shares of Common Stock reserved for issuance under
this Plan.  In addition, any shares of Common Stock that are represented by
Awards granted under the Plan that are forfeited, expired or canceled without
delivery of shares of Common Stock or that the Company withholds to satisfy any
applicable tax withholding obligations shall again be available for issuance
under the Plan.  All of the shares of Common Stock described in Section 3 above
may, but need not be, issued pursuant to the exercise of Incentive Stock
Options.  If the purchase price of any Incentive Stock Option or Nonqualified
Stock Option granted under the Plan is satisfied by tendering shares of Common
Stock to the Company (either by actual delivery or attestation), only the number
of shares of Common Stock issued net of the shares of Common Stock tendered
shall be deemed delivered for purposes of determining the maximum number of
shares of Common Stock available for delivery under the Plan.  Until such date
as this Plan is approved by the Company's Stockholders ("Shareholder Approval
Date"), if any, shares of Common Stock issued under this Award shall consist
exclusively of treasury shares.  After the Shareholder Approval Date, shares of
Common Stock issued under the Plan may consist of newly issued or treasury
shares.
 

4.         Administration

             All Awards granted under the Plan shall be granted by either the
Compensation Administration Committee or the Compensation Committee of the
Board.  The Plan shall be administered by the Compensation Administration
Committee for all grants with respect to any "officer" as that term is defined
in Rule 16a-1(f) under the Exchange Act, or any other grant after the
Shareholder Approval Date to covered employees for purposes of Section 162(m) of
the Code to the extent necessary or proper to preserve deductibility of the
compensation expense associated with such grant under Section 162(m); and the
Compensation Committee for all other grants.  However, an Award granted under
the Plan shall not be ineffective solely because it is granted by the
Compensation Administration Committee or the Compensation Committee not in
accordance with the preceding sentence.  The Committee is authorized to
interpret the provisions of the Plan, to determine the terms and conditions of
Awards 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. 
Determinations, decisions and actions of the Committee in connection with the
construction, interpretation, administration or application of the Plan will be
final, conclusive and binding upon any Participant and any person claiming under
or through the Participant.  No member of the Committee will be liable for any
determination, decision or action made in good faith with respect to the Plan or
any Awards granted under the Plan.  To the extent that the Committee determines
that the restrictions imposed by the Plan preclude the achievement of the
material purposes of the Awards in jurisdictions outside the United States, the
Committee will have the authority and discretion to modify those restrictions as
the Committee determines to be necessary or appropriate to conform to applicable
requirements or practices of jurisdictions outside of the United States.  This
Plan is not intended to modify or limit the powers, duties or responsibilities
of either the Board or the Committee as set forth under the UAL Corporation
Restated Certificate of Incorporation.
 

5.         Term of the Plan

             The Plan shall be effective as of July 29, 2002 and shall remain in
effect as long as any Awards under it remain outstanding.  No Award may be
granted under the Plan after the tenth anniversary of the Effective Date, but
the term of any Award theretofore granted may extend beyond that date.
 

6.         Incentive Stock Options

             Incentive Stock Options are intended to satisfy the requirements
applicable to "incentive stock options" described in Section 422(b) of the Code
or any successor provision.  Incentive Stock Options may be granted under the
Plan only if the Shareholder Approval Date is before the first anniversary of
the Effective Date.  Incentive Stock Options shall be subject to the foregoing
and the following terms and conditions and to such other terms and conditions,
not inconsistent therewith, as the Committee shall determine:
  (a)       The Exercise Price shall not be less than the Fair Market Value of a
share of Common Stock on the date of grant of such Incentive Stock Option. 
Options shall be exercisable at such time and upon such terms and conditions, as
may be determined by the Committee.
    (b)       The term of each Option shall be fixed by the Committee; in no
event, however, shall the period for exercising an Incentive Stock Option extend
more than 10 years from the date of grant.
 

(c)        The aggregate Fair Market Value (determined on the date of grant) of
the shares of Common Stock for which Incentive Stock Options are exercisable for
the first time in any calendar year (under all options plans of the Company and
its parent and subsidiary corporations) for any Participant shall not exceed
$100,000.
 

(d)        Incentive Stock Options shall not be transferable by a Participant
other than by will or the laws of decent and distribution and shall only be
exercisable by the Participant during his or her lifetime.
 

(e)        The Exercise Price of Incentive Stock Options granted to any
individual who at the time of such grant, owns stock possessing more than 10% of
the total combined voting power of all classes of stock of the Company or its
parent or subsidiary corporations (within the meaning of Section 422(b) of the
Code) shall not be less than 110% of the Fair Market Value of the Common Stock
on the date of grant and the term of any Incentive Stock Option granted to such
individual shall not exceed five years from the date of grant.
 
 

7.          Nonqualified Stock Options

              Nonqualified Stock Options are not intended to satisfy the
requirements applicable to "incentive stock options" described in Section 422(b)
of the Code or any successor provision, and shall be subject to the foregoing
and the following terms and conditions and to such other terms and conditions,
not inconsistent therewith, as the Committee shall determine:

 
(a)         The Exercise Price shall not be less than the Fair Market Value of a
share of Common Stock on the date of grant of such Nonqualified Stock Option. 
Nonqualified Stock Options shall be exercisable at such time and upon such terms
and conditions, as may be determined by the Committee.

 

(b)         The term of each Nonqualified Stock Option shall be fixed by the
Committee; in no event, however, shall the period for exercising a Nonqualified
Stock Option extend more than 10 years from the date of grant.

 

 

8.           Restricted Shares

               The Committee is hereby authorized to grant Awards of Restricted
Shares to Participants with the following terms and conditions.
 

(a)         During the Restricted Period (as defined in Section 8(b)),
Participant shall not sell, assign, exchange, transfer, pledge, hypothecate or
otherwise dispose of or encumber any of the Restricted Shares.  Upon grant of
the Award of Restricted Shares, however, Participant shall thereupon be a
stockholder with respect to all shares of Common Stock subject to the Restricted
Share Award and shall have all the rights of a stockholder with respect to such
shares of Common Stock, including the right to vote such shares and to receive
all dividends and other distributions.

 

(b)         The term "Restricted Period" shall mean any period as set by the
Committee, not to exceed ten years, said period to end sooner, upon the
occurrence 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; or

 

(ii)       a determination by the Committee at any time to accelerate or
terminate such Restricted Period, but only to the extent of such determination.

 

(c)          Unless and to the extent the Committee determines to end the
Restricted Period with respect to any such Restricted Shares pursuant to Section
8(b)(ii), if a Participant ceases to be an employee of the Company or any
Subsidiary for any reason, all such Participant's Restricted Shares which at
such time remain subject to restrictions imposed hereunder shall be forfeited
and returned to the Company, and the reserve of shares of Common Stock subject
to the Plan, as described in Section 3, shall be increased by the number of
Restricted Shares returned and such shares of Common Stock may again be subject
to allocation under the Plan.

 

(d)         The restrictions set forth in Section 8(c) shall lapse with respect
to Restricted Shares when the Restricted Period applicable to such shares
expires, as described in Section 8(b).

 

 

9.          Stock Appreciation Rights

              The Committee may, in its discretion, grant a Stock Appreciation
Right to the holder of any Nonqualified Stock Option granted hereunder.  In
addition, a Stock Appreciation Right may be granted independently of and without
relation to any Nonqualified 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
Nonqualified 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 Participant to
elect to receive in cash up to 100% of the appreciation in Fair Market Value of
the shares of Common Stock subject thereto up to the date the Stock Appreciation
Right is exercised.  In the case of a Stock Appreciation Right issued in
relation to a Nonqualified Stock Option, such appreciation will be measured from
the Nonqualified Stock Option's Exercise Price.  In the case of a Stock
Appreciation Right issued independently of any Nonqualified Stock Option, the
appreciation shall be measured from not less than the Fair Market Value of a
share of Common Stock on the date the Stock Appreciation Right is granted.

(c)            The Committee shall have the discretion to satisfy a
Participant's right to receive the amount of cash as determined in Section 9(b),
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 a Stock Appreciation Right, the number of shares
of Common Stock reserved for issuance hereunder (and the shares of Common Stock
subject to the related Nonqualified Stock Option, if any) shall be reduced by
the number of shares of Common Stock with respect to which the Stock
Appreciation Right is exercised.
  10.       Other Share-Based Awards
              The Committee, in its sole discretion, may grant to Participants
such other Awards including, without limitation, dividends and dividend
equivalents and other Awards that are valued in whole or in part by reference
to, or are otherwise based on the Fair Market Value, of shares of Common Stock
("Other Share-Based Awards"). Such Other Share-Based Awards shall be in such
form, and dependent on such conditions, as the Committee shall determine,
including, without limitation, the right to receive one or more shares of Common
Stock (or the equivalent cash value of such shares of Common Stock) upon the
completion of a specified period of service, the occurrence of an event and/or
the attainment of performance objectives. Other Share-Based Awards may be
granted alone or in addition to any other Awards granted under the Plan. Subject
to the provisions of the Plan, the Committee shall determine: (i) to whom and
when Other Share-Based Awards will be made; (ii) the number of shares of Common
Stock to be awarded under (or otherwise related to) such Other Share-Based
Awards; (iii) whether such Other Share-Based Awards shall be settled in cash,
shares of Common Stock or a combination of cash and shares of Common Stock; and
(iv) all other terms and conditions of such Other Share-Based Awards (including,
without limitation, the vesting provisions thereof and provisions ensuring that
all shares of Common Stock so awarded and issued shall be fully paid and
nonassessable).

 

11.         Nontransferability of Awards

              Except as otherwise provided by the Committee, each Award 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 Participant's
lifetime, only by the Participant.
 

12.         Other Provisions

               The grant of any Award under the Plan may also be subject to
other provisions (whether or not applicable to the grant of an Award to any
other Participant) as the Committee determines appropriate, including, without
limitation, provisions requiring that grants of Awards under the Plan be
evidenced by an agreement (in writing or other form deemed appropriate by the
Committee); provisions concerning vesting; provisions concerning exercise
periods following termination of employment; provisions for the payment of the
Exercise Price of Incentive Stock Options and Nonqualified Stock Options by
delivery of other shares of Common Stock having a then Fair Market Value equal
to the Exercise Price of such Incentive Stock Options or Nonqualified Stock
Options; restrictions on resale or other disposition of shares of Common Stock
delivered in connection with such Awards; such provisions or, as determined by
the Committee, modifications to outstanding Awards 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.
 

13.         Tax 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 Awards granted under the Plan, or
to make other appropriate arrangements with Participants to satisfy such
obligations.   At the discretion of the Committee, the Company may satisfy its
withholding obligations by deducting or withholding from any transfer or payment
to a Participant, or may require payment from a Participant, in the form of cash
or other property, including shares of Common Stock prior to the exercise of an
Award or prior to the delivery of any shares of Common Stock pursuant to the
Award.
 

14.         Limitation of Implied Rights
 

(a) Neither a Participant nor any other person shall, by reason of participation
in the Plan or the grant of any Award hereunder, acquire any right in or title
to any assets, funds or property of the Company or any Subsidiary whatsoever,
including, without limitation, any specific funds, assets or other property
which the Company or any Subsidiary, in its sole discretion, may set aside in
anticipation of a liability under the Plan.  A Participant shall have only a
contractual right to the shares of Common Stock or amounts, if any, payable
under the Plan, unsecured by any assets of the Company or any Subsidiary, and
nothing contained in the Plan shall constitute a guarantee that the assets of
the Company or any Subsidiary shall be sufficient to pay any amounts to any
person.

 
(b) The Plan does not constitute a contract of employment, and selection as a
Participant will not give such Participant the right to be so retained in the
employ of the Company or any Subsidiary, nor any right or claim to any benefit
under the Plan, unless such right or claim has specifically accrued under the
terms of the Plan.  Except as otherwise provided in the Plan, no Award granted
under the Plan shall confer upon any Participant any rights as shareholder of
the Company prior to the date on which the Participant fulfills all conditions
for receipt of such rights.

 

15.         Successors and Assigns

              The Plan and any Award granted thereafter shall be binding on all
successors and assigns of the Company and a Participant, including, without
limitation, the estate of such Participant and the executor, administrator or
trustee of such estate, or any receiver or trustee in bankruptcy or
representative of the Participant's creditors.
 

16.         Adjustment Provisions

               In the event of a corporate transaction involving the Company
(including, without limitation, any Common Stock dividend, Common Stock split,
extraordinary cash dividend, recapitalization, reorganization, merger,
consolidation, split-up, spin-off, combination or exchange of shares), the
Committee may adjust Awards without enlargement or diminution to preserve the
benefits or potential benefits of the Awards intended to be made available under
the Plan.  Action by the Committee may include:  (i) adjustment of the number
and kind of shares which may be delivered under the Plan; (ii) adjustment of the
number and kind of shares subject to outstanding Awards; (iii) adjustment of the
Exercise Price of outstanding Incentive Stock Options, Nonqualified Stock
Options and Stock Appreciation Rights; (iv) cancellation or termination of
outstanding Awards in exchange for a payment (in cash or property) to the
Participant of an amount determined by the Committee prior to such provision to
be equitable; (v) substitution of other awards or rights in place of outstanding
Awards on terms and conditions determined by the Committee prior to such
provision to be equitable; and (vi) any other adjustments that the Committee
determines prior to such provision to be equitable or appropriate.
 

17.         Amendment or Termination

               The Board may amend the Plan from time to time or terminate the
Plan at any time, but no such action, without the Participant's consent, shall
adversely affect the rights of a Participant under any Award granted.
 

18.         Choice of Law

               Unless otherwise specified, the Plan and any Award granted
thereunder shall be governed by and construed in accordance with the laws of the
State of Illinois, without regard to conflicts of laws.  In the event of any
conflict or inconsistency between the Plan and an Award document, the Plan shall
prevail.