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Published: 2008-03-26

Incentive Compensation and Profit Sharing Plan - UAL Corp.



                         UAL CORPORATION
                                
         INCENTIVE COMPENSATION AND PROFIT SHARING PLAN
                                
                                
                                
                                
I.  PURPOSE

     In an effort to maintain a position of leadership in the
fast-growing and highly competitive business segments in which
UAL Corporation (the 'Company') competes, it is necessary to
promote financial interests of the Company and its corporate
affiliates (the 'Subsidiaries'), including its growth, by (A)
attracting and retaining highly qualified executives possessing
outstanding ability, (B) motivating executives and other
management employees by means of performance related incentives,
and (C) providing incentive compensation opportunities which are
competitive with those of major corporations.  The Incentive
Compensation Plan (the 'Plan') hereinafter described is designed
to assist the Company in attaining these objectives.

II.  ADMINISTRATION OF THE PLAN

     1.  The Company is responsible for the general
administration of the Plan, except as to matters expressly
reserved in this Plan to the Compensation Administration
Committee of the Board of Directors of the Company (the 'Board'),
with respect to all grants to any 'covered employee' within the
meaning of Section 162(m) of the Internal Revenue Code of 1986,
as amended (the 'Code') and regulations promulgated thereunder
(the 'Covered Employees'), and to the Compensation Committee of
the Board with respect to all other grants.  Unless specifically
named, the Compensation Administration Committee or Compensation
Committee, whichever is applicable in the context, will herein be
called the 'Committee.'  Determinations, decisions and actions of
the Company or 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.  Neither the
Company nor any member of the Committee will be liable for any
determination, decision, or action made with respect to the Plan
or any Incentive Award granted, or Profit Sharing Payments made,
under the Plan.

     2.  A Participant's rights and interests in any Incentive
Award or Profit Sharing Amount under the Plan may not be assigned
or transferred and are not subject to attachment, garnishment,
execution, or other creditor's processes.

     3.  If a Participant transfers employment classifications
during a calendar year, the amount of the Participant's Incentive
Compensation Payments or Profit Sharing Payments for that
calendar year shall be based on the amount of the Participant's
compensation that he/she receives during that calendar year as an
Incentive Compensation Participant or Profit Sharing Participant,
as the case may be.

     4.  The Incentive Compensation Plan may at any time  be
amended, modified, or terminated, as the Board, in its
discretion, determines.  The Profit Sharing Plan may at any time
be amended, modified, or terminated, as the Company. in its
discretion, determines. Such amendment, modification, or
termination of the Incentive Compensation Plan or the Profit
Sharing Plan will not require the consent, ratification, or
approval of any party, including any Participant.

     5.  The Plan does not constitute a contract of employment,
and participation in the Plan will not give any employee the
right to be retained in the service of the Company or its
Subsidiaries.

     6.  This Plan and all determinations made and actions taken
pursuant hereto will be governed and construed by the internal
laws of the State of Illinois.

III.  DEFINITIONS

     1.  Award Year -- The calendar year for which Incentive
Awards, if any, are calculated under the Plan.

     2.  Financial Objectives -- Financial performance goals
established by the Company and approved by the Committee at the
beginning of an Award Year.  Financial Objectives may apply to
overall Company and Subsidiaries performance in selected areas
and/or to performance of major business segments of the Company
and Subsidiaries.

     3.  Financial Performance Factor -- The numerical factor
determined by the Company shortly after the Award Year by
comparing actual performance during such Award Year to the
applicable Financial Objectives previously established for such
Award Year.

     4.  Incentive Compensation Participant -- A person who is a
senior or a key management employee of the Company or one or more
Subsidiaries and who is designated as an Incentive Compensation
Participant for an Award Year by the Company or the Committee.
Designation as an Incentive Compensation Participant will apply
only for the Award Year for which the designation is made.  The
Company may, in its sole discretion, designate certain management
employees as Special Incentive Compensation Participants for an
Award Year.

     5.  Incentive Compensation Plan --  The provisions of this
Plan as applied to Incentive Compensation Participants.

     6.  Individual Performance Objectives -- Goals and
objectives established by the Company (or by the Compensation
Administration Committee in the case of Covered Employees) for
each Incentive Compensation Participant.

     7.  Individual Performance Factor -- The numerical factor
determined with respect to the Plan by the Company (or by the
Compensation Administration Committee in the case of Covered
Employees) shortly after the Award Year, based upon an evaluation
as to the extent to which an Incentive Compensation Participant
in the Plan achieved the Individual Performance Objectives
established for him/her.  Such evaluation will be wholly
discretionary and subjective on the part of the Company or the
Compensation Administration Committee, as the case may be.

     8.  Incentive Awards -- The dollar value of awards made to
Incentive Compensation Participants under the Plan.
Notwithstanding any other provisions of the Plan, in no event may
the total Incentive Award for any Award Year for any Incentive
Compensation Participant exceed 100% of his/her base salary for
the Award Year.

     9.  Incentive Opportunity -- The amount, determined by the
Company and approved by the Committee, as appropriate, at the
beginning of an Award Year, that an Incentive Compensation
Participant may receive as an Incentive Award under the Plan.
The Incentive Opportunity will be stated as a percentage of an
Incentive Compensation Participant's annual base salary for an
Award Year (prorated for a partial year's participation).  If an
Incentive Compensation Participant held more than one eligible
position in the Award Year, his/her Incentive Opportunity will be
determined on a prorated basis.  The Incentive Opportunity for a
Special Incentive Compensation Participant shall be stated as a
dollar amount rather than as a percentage of his/her annual base
salary for the Award Year.

     10.  Participant -- An Incentive Compensation Participant or
a Profit Sharing Participant, whichever is applicable.

     11.  Profit Sharing Goals -- The collective Financial
Objectives for the Company and its Subsidiaries for the Profit
Sharing Year that coincides with the Award Year for which the
Financial Objectives are established as determined by the
Company.  For purposes of determining the amount of Profit
Sharing Payments, the Profit Sharing Goals for a particular
Profit Sharing Year shall be separately stated as a threshold
goal, a target goal and a maximum goal.

     12.  Profit Sharing Participant -- A person who, on his/her
Employee Service Record Form UG 100 or any successor thereof, is
classified, for at least part of the Profit Sharing Year for
which the Profit Sharing Payment is being made, as a regular full-
time or regular part-time management employee, is not an
Incentive Compensation Participant and, on December 31 of that
Profit Sharing Year, is actively employed in any job
classification, has retired.

     13.  Profit Sharing Payments -- The amount to which Profit
Sharing Participants are entitled for a Profit Sharing Year, as
determined under Section V of the Plan.

     14.  Profit Sharing Plan --  The provisions of this Plan as
applied to Profit Sharing Participants.

     15.  Profit Sharing Year -- The calendar year.  Unless the
Company specifically otherwise determines, Profit Sharing
Payments shall be made only for 1997, 1998, and 1999 in the
subsequent calendar year.

     16.  Profit Sharing Wages -- The amount of a Profit Sharing
Participant's taxable wages for the Profit Sharing Year,
increased by the amount of his/her pre-tax contributions under
any qualified Code Section 401(k) plan or Code Section 125
cafeteria plan and any HMO premium deductions for the Profit
Sharing Year, and decreased by the amount of any extraordinary
payments such as moving expense reimbursements, Pride Awards and
Code Section 125 cafeteria plan reimbursements for the Profit
Sharing Year
     

IV.  INCENTIVE COMPENSATION PAYMENTS

A.  Participation

     1.  Incentive Compensation Participants will be determined
annually by the Company or the Committee from among key and
senior management employees of the Company and its Subsidiaries.
This determination will allow participation only for the Award
Year concerned.

     2.  If an Incentive Compensation Participant's employment
with the Company or its Subsidiaries is terminated during an
Award Year, the appropriate Incentive Award under the Plan, if
any, for such Participant will be subject to the sole discretion
of the Company's Chairman (or to the sole discretion of the
Compensation Administration Committee in case of the termination
of employment of a Covered Employee).  A transfer of employment
between the Company and any of its Subsidiaries will not be
considered a termination of employment.

B.  Computation of Incentive Awards

     1.  The Incentive Award for an Award Year for an Incentive
Compensation Participant will be the product of the Incentive
Compensation Participant's Incentive Opportunity modified by the
Financial Performance Factor and Individual Performance Factor,
multiplied by the Incentive Compensation Participant's applicable
base salary.  No Incentive Award will be made to an Incentive
Compensation Participant for an Award Year in which his/her
applicable Financial Performance Factor is below threshold level.
However, the Chairman of the Company, with Committee approval,
may waive the applicable Financial Performance Factor threshold
requirement.

     2.  Total payments to all Incentive Compensation
Participants will be limited to 5% of Pre-Tax Income in any given
Award Year.  If total calculated Incentive Awards exceed 5% of
Pre-Tax Income, payments will be made on a prorated basis.

C.  Payment of Awards

     1.  Subject to Paragraph 2 below, payment of Incentive
Awards will be made in cash on or about April 1 of the year
following the Award Year; provided, however, that an Incentive
Award may be deferred at the election of an Incentive
Compensation Participant in the manner described in Paragraph 2
below.

     2.  An Incentive Compensation Participant may elect, on or
before December 31 of the year preceding an Award Year, to defer
receipt of all or any portion of his/her Incentive Award to a
subsequent calendar year.  An Incentive Compensation Participant
will receive payment of a deferred Incentive Award in a lump sum
in January of the earliest of:  (1) the deferral calendar year
selected by the Incentive Compensation Participant; (2) the
calendar year immediately after the Incentive Compensation
Participant's retirement under the United Air Lines, Management
and Salaried Pension Plan, (3) the calendar year after the
Incentive Compensation Participant's termination of employment
with the Company or Subsidiaries for other reasons, provided that
a transfer of employment from the Company or one of its
Subsidiaries to the Company or another of its Subsidiaries will
not be considered a termination of employment; (4) the occurrence
of an 'Unforeseeable Emergency,' provided that a distribution
pursuant to this clause (4) shall not exceed the amount
reasonably needed to satisfy the emergency need; or (5) any other
time elected by the Incentive Compensation Participant, provided
that upon making such an election, the Incentive Compensation
Participant shall be entitled to receive 90% of the amounts then
credited to him/her under the Plan and shall forfeit the
remaining 10% of such amount.  The amounts deferred will be
credited annually with compound interest at the prime rate in
effect during the deferral period at the end of the calendar
quarter, as reported by The Wall Street Journal.  All deferred
Incentive Awards will be reflected in the Company's books as
general unsecured and unfunded obligations of the Company.  No
trust in favor of any Incentive Compensation Participant will be
implied.  Deferral elections will be irrevocable by an Incentive
Compensation Participant.  For purposes of this paragraph,
'Unforeseeable Emergency' shall mean a severe financial hardship
to the Incentive Compensation Participant resulting from a sudden
and unexpected illness or accident of the Incentive Compensation
Participant or of his/her dependent (as defined in Section 152(a)
of the Code), loss of the Incentive Compensation Participant's
property due to casualty, or other similar extraordinary and
unforeseeable circumstances arising as a result of events beyond
the control of the Incentive Compensation Participant.  The
circumstances that will constitute an Unforeseeable Emergency
will depend upon the facts of each case, but, in any case,
payment under clause (4) above may not be made to the extent that
such hardship is or may be relieved (i) through reimbursement or
compensation by insurance or otherwise, (ii) by liquidation of
the Incentive Compensation Participant's assets, to the extent
the liquidation of such assets would not itself cause severe
financial hardship, or (iii) by cessation of deferrals under the
Plan.

D.  Special Incentive Compensation Rules

     1.  Notwithstanding any other provision of this Plan to the
contrary:  Incentive Awards with respect to an Award Year for any
Incentive Compensation Participant who is a Covered Employee with
respect to such Award Year (i) may not exceed $900,000 and (ii)
shall be determined by reference to a formula which shall define
the Incentive Award by reference to 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 (a) the UAL Corporation Employee Stock Ownership
Plan, the UAL Corporation Supplemental ESOP, or the trusts
relating thereto, (b) any event or occurrence that the
Compensation Administration 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, (c) this
Plan, and (d) the Company's 1988 Restricted Stock Plan) for such
Award Year.  Such target level(s) and the formula referred to
above shall be determined by the Compensation Administration
Committee prior to the commencement of such Award Year (or at
such later time as may be permissible under Section 162(m) of the
Code). The Compensation Administration Committee shall determine
and certify whether such target levels of pre-tax income have
been met.  Notwithstanding the foregoing, the Compensation
Administration Committee may, in its sole discretion, reduce the
Incentive Award otherwise determined pursuant to such formula.

V.  PROFIT SHARING PAYMENTS

A.  Participation

     Each Profit Sharing Participant shall be entitled to a
Profit Sharing Payment in the amount, if any, as determined below
for each Profit Sharing Year in which he/she satisfies the
definition of the term 'Profit Sharing Participant.'

B.  Computation of Profit Sharing Payments

The amount of Profit Sharing Payment to be made to a Profit
Sharing Participant for a Profit Sharing Year is the product of
his/her Profit Sharing Wages for the Profit Sharing Year,
multiplied by the percentage determined under the following
table, on the basis of the performance of the Company and its
Subsidiaries relative to its Profit Sharing Goals for the Profit
Sharing Year:
          
     Profit Sharing Goal      Percentage of Profit Sharing Wages
     -------------------      ----------------------------------
          
     Less Than Threshold                  0%
        Threshold                         1.00%
          Target                          2.55%
         Maximum                          3.75%
          
If the Company and its Subsidiaries achieve a Profit Sharing Goal
of at least the Threshold and between any two of the levels set
forth in the schedule above, the applicable Percentage of Profit
Sharing Wages shall be the amount determined by linear
interpolation between the two levels of Profit Sharing Goals.

C.  Payment

     Profit Sharing Payments for a Profit Sharing Year will be
made to Profit Sharing Participants no later than March 31 of the
calendar year following the Profit Sharing Year for which the
Profit Sharing Payments are made.