Exhibit 10.5


 





 


STOCK OPTION AWARD NOTICE


 


Stock Option Award Notice under
the UAL Corporation 2008 Incentive Compensation Plan, dated as of  «Grant_Month» «Grant_Day», «Grant_Year», between UAL Corporation, a Delaware corporation
(the “Company”), and «First» «Last».


 


This Stock Option Award Notice
(this “Award Notice”) sets forth the terms and conditions of an award of
options to purchase «Option_Shares»  (the “Award”) of the Company’s common stock,
par value $0.01 per share (“Shares”), at a price per Share of $«Exercise_Price»  (the
“Exercise Price”),
that are subject to the terms and conditions specified herein (the “Options”)
and that are granted to you under the UAL Corporation 2008 Incentive
Compensation Plan (the “Plan”).  The
Options are not intended to qualify as “incentive stock options” (within the
meaning of Section 422 of the Internal Revenue Code of 1986, as amended
(the “Code”)).


 


SECTION 1.  The Plan.  This Award is made pursuant to the Plan, all
the terms of which are hereby incorporated in this Award Notice.  In the event of any conflict between the
terms of the Plan and the terms of this Award Notice, the terms of the Plan
shall govern.


 


SECTION 2.  Definitions.  Capitalized terms used in this Award Notice
that are not defined in this Award Notice have the meanings as used or defined
in the Plan.  As used in this Award
Notice, the following terms have the meanings set forth below:


 


“Cause” shall have the
meaning set forth in the UAL Corporation Executive Severance Plan, or any
successor plan thereto, as in effect from time to time.


 


“Retirement” means your
Termination of Employment, other than for Cause, after attaining age 55 and
completing 10 years of continued service (i.e., without any Termination
of Employment) with the Company or its Affiliates or attaining age 65.


 


“Vesting Date” means the
date on which your rights with respect to all or a portion of the Options may
become fully vested and exercisable, as provided in Section 3(a) of
this Award Notice.


 


SECTION 3.  Vesting and Exercise.  (a)  Vesting.  On each Vesting Date set forth below, your
rights with respect to the number of Options that corresponds to such Vesting
Date, as specified in the chart below, shall become vested and such Options may
be exercised, provided that you must be actively employed by the Company or an
Affiliate on the relevant Vesting Date, except as otherwise determined by
the Committee in its sole discretion, provided further that, in the event of your Termination of


 





















 


Employment by reason of death or Disability,
all outstanding Options shall immediately become fully vested and immediately
exercisable.


 


	
  Vesting Date

  	
   

  	
  Percentage That

  Vests

  	
   

  	
  Number of Options

  That Vest

  	
   

  	
  Aggregate

  Number of

  Options Vested

  
	
  «Vesting_Date_1»

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  «Vesting_Date_2»

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  «Vesting_Date_3»

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  «Vesting_Date_4»

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


(b)   Exercise of Options.  Options, to the extent that they have vested,
may be exercised, in whole or in part (but for the purchase of whole Shares
only), by delivery pursuant to the Company’s option exercise program, currently
administered by Merrill Lynch (or such successor arrangement established by the
Company), of (i) a written or electronic notice, complying with the
applicable procedures established by the Committee or the Company, stating the
number of Shares with respect to which the Options are thereby exercised and (ii) full
payment of the aggregate Exercise Price for the Shares with respect to which
the Options are thereby exercised, in accordance with Section 6(b)(iv) of
the Plan.  The notice shall be signed by
you or any other person then entitled to exercise the Options.  Upon exercise and full payment of the
Exercise Price for Shares with respect to which the Options are thereby
exercised, the Company shall deliver to you or your legal representative one
Share for each Option with respect to which you have exercised and paid.


 


(c)  Expiration of Options.  Notwithstanding any provision of the Plan or
this Award Notice, unless the Committee determines otherwise, in the case of unexercised
Options that have become vested prior to your Termination of Employment, such
Options will expire (i) 12 months following your Termination of Employment
as a result of death or Disability, (ii) five years following your
Termination of Employment as a result of Retirement, (iii) immediately
upon your Termination of Employment for Cause or (iv) three months following
your Termination of Employment for any reason other than death, Disability,
Retirement or Cause; provided that all Options will automatically expire
on the tenth anniversary of the date of this Award Notice.  For the avoidance of doubt, if the expiration
date specified in the immediately preceding sentence is not a business day,
then the Options will expire on the last business day immediately preceding
such expiration date.


 


SECTION 4.  Forfeiture of Options.  Unless the Committee determines otherwise,
and except as otherwise provided in Section 3(a) of this Award Notice,
Section 8 of the
Plan regarding Change of Control or Section 9(a) of the Plan
regarding Termination of Employment as a result of death or Disability, if any Options
awarded to 


 





















 


you pursuant to this Award Notice have not
become vested and exercisable prior to your Termination of Employment, your
rights with respect to such Options shall immediately terminate upon your
Termination of Employment, and you will be entitled to no further payments or
benefits with respect thereto.


 


SECTION 5.   Non-Transferability of Options.  Unless otherwise provided by the Committee in its discretion and notwithstanding
clause (ii) of Section 10(a) of the Plan, during your lifetime
the Options shall be exercisable only by you, or, if permissible under
applicable law, by your legal guardian or representative, and no Option (or any
rights and obligations thereunder) may be assigned, alienated, pledged,
attached, sold or otherwise transferred or encumbered by you otherwise than by
will or by the laws of descent and distribution, and any such purported
assignment, alienation, pledge, attachment, sale, transfer or encumbrance shall
be void and unenforceable against the Company, provided that the
designation of a beneficiary shall not constitute an assignment, alienation,
pledge, attachment, sale, transfer or encumbrance.


 


SECTION 6.  Withholding, Consents and Legends.  (a)  Withholding.  The delivery of Shares pursuant to Section 3(b) of
this Award Notice is conditioned on satisfaction of any applicable withholding
taxes in accordance with Section 10(d) of the Plan.


 


(b)  Consents.  Your rights in respect of the Options are conditioned
on the receipt to the full satisfaction of the Committee of any required
consents that the Committee may determine to be necessary or advisable
(including, without limitation, your consenting to the Company’s supplying to
any third-party recordkeeper of the Plan such personal information as the
Committee deems advisable to administer the Plan).


 


(c)  Legends.  The Company may affix to certificates for
Shares issued pursuant to this Award Notice any legend that the Committee
determines to be necessary or advisable (including to reflect any restrictions
to which you may be subject under any applicable securities laws).  The Company may advise the transfer agent to
place a stop order against any legended Shares.


 


SECTION 7.  Successors and Assigns of the
Company.  The terms and conditions of
this Award Notice shall be binding upon and shall inure to the benefit of the
Company and its successors and assigns.


 


SECTION 8.  Committee Discretion.  The Committee shall have full and plenary
discretion with respect to any actions to be taken or determinations to be made
in connection with this Award Notice, and its determinations shall be final,
binding and conclusive.


 


SECTION 9.  Amendment of this Award Notice.  The Committee may waive any conditions or rights
under, amend any terms of, or alter, suspend, discontinue, cancel or terminate
this Award Notice prospectively or retroactively; provided, however,
that, except as set forth in Section 10(e) of the Plan, any such
waiver, amendment, alteration, suspension, discontinuance, cancelation or
termination that would materially 


 





















 


and adversely impair your rights under this
Award Notice shall not to that extent be effective without your consent (it
being understood, notwithstanding the foregoing proviso, that this Award Notice
and the Options shall be subject to the provisions of Section 7(c) of
the Plan).


 


IN WITNESS WHEREOF, the Company
has duly executed this Award Notice as of the date first written above.


 


	
   

  	
  UAL CORPORATION

  
	
   

  	
   

  
	
   

  	
  by

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
    Name:  Glenn F. Tilton

  
	
   

  	
   

  	
    Title:    Chairman,
  President & CEO