| Type of plan: |
Profit Sharing Plan (with incentive supplement) |
| Goals of plan: |
- Provide commonality of interest between management and employees and create a focus on operational and financial improvement
- Provide all employees with a defined share of pre-tax profit margin above the recovery plan performance levels
|
| Effective date: |
January 1, 2004 (subject to approval of UAL Board and Bankruptcy Court) |
Employee groups covered:
|
All employees |
| Definition of performance: |
- Profit Sharing Plan – UAL pre-tax profit margin above the recovery plan performance levels
- Incentive Supplement -- Performance to be measured at the business unit level and defined and weighted by the Company on an annual basis. Measures may include the following categories: financial (e.g., pre-tax margin), operational performance (e.g., on-time performance), customer satisfaction (e.g., intent to repurchase), employee engagement, safety (e.g., lost time injuries), etc.
|
| Definition of wages: |
Eligible earnings are defined as base pay, overtime, holiday pay, longevity, sick pay, vacation pay, shift differential and overrides. It does not include such income as moving expenses and related benefits, incentive or profit sharing awards paid in the plan year, company matches to defined contribution plans, imputed income from pass service charges and other awards and allowances |
| Benefits impact: |
- Earnings from the Profit Sharing portion of the plan will not be pensionable
- Earnings from the Incentive Supplement will be pensionable
|
| Performance calculation: |
- Profit Sharing Plan – A fixed share of UAL pre-tax profit margin above the recovery plan performance levels
- Incentive Supplement -- Minimum, target and maximum levels of performance as defined by the Company at the beginning of each plan cycle. Minimum level of financial performance will need to be achieved before the plan will pay out
|
Payout
calculation: |
- Profit Sharing Plan -- X% of pre-tax profit margin above the following recovery plan performance levels
2005 12% pre-tax profit margin
2006 13%
2007 13%
2008 13%
* Above numbers exclude UAFC
To be allocated to all employees on pro-rata based on employee wages
- Incentive Supplement – Threshold, target and maximum award levels to correspond with aforementioned performance levels. Fixed target percentage (5%) for unionized employees
|
| Distribution: |
Cash, paid annually |
Distribution
option: |
401(k) deferral |
