Management Retention Agreements filed with Airlines Merger Registration Statement

UAL Corporation's Form S-4 filed on June 25 registers $4.24 billion of common stock for a proposed merger with Continental Airlines (SEC file no. 333-167801).  The business combination is described as a "merger of equals" but UAL is being considered the acquirer of Continental for accounting purposes. 

The form of Management Retention Agreement for UAL's executive officers is filed as Exhibit 10.2 to the registration.  Exhibit 10.3 is a separate retention agreement for a specific VP with terms slightly different from Exh. 10.2. 

The Management Retention Agreements are designed to be consistent with current market practices and to establish a degree of comparability with the programs offered to similarly-situated executive officers at Continental. The agreements do not provide for “single-trigger” payments or benefits (i.e., payments or benefits that will be provided automatically upon completion of the merger). Instead, each agreement provides for compensation and benefits in the event the executive officer’s employment is terminated without “cause” or for “good reason” within the two-year period following completion of the merger.