Exhibit 10.3
------------
TENTH AMENDMENT
UAL CORPORATION
EMPLOYEE STOCK OWNERSHIP PLAN
(Effective as of July 12, 1994)
By virtue and in exercise of the amending power
reserved to UAL Corporation (the "Company") under Section 13.1(a)
of the UAL Corporation Employee Stock Ownership Plan (effective
as of July 12, 1994) (the "Plan"), which amending power
thereunder is subject to the approval of the Air Line Pilots
Association International ("ALPA") and the International
Association of Machinists and Aerospace Workers (the "IAM"), the
Company hereby amends the Plan, subject to the approval of ALPA
and the IAM, as follows, effective April 1, 2000. The following
amendments have been requested by the Internal Revenue Service as
a condition of granting a favorable determination letter
concerning the Plan.
1. The portion of Section 1(s) preceding clause (i) is
amended to read as follows:
"(s) "Eligible Employee" means any Employee of an
Employer (other than any employee who is not a member
of an Employer Group and any "leased employee" (as defined
in clause (v), below)), subject to the following:"
2. The following new clause (v) is added to Section 1(s):
"(v) A "leased employee" means any person who is not an
employee of recipient and who provides services to the
recipient if (x) such services are provided pursuant to an
agreement between the recipient and any other person, (y)
such person has performed such services for the recipient
(or for the recipient and related persons) on a
substantially full-time basis for a period of at least
one year, and (z) such services are performed under
primary direction or control by recipient."
3. Section 4.3 is amended to read as follows:
"4.3 Acquisition Loans.
(a) The Trustee may incur the Initial Acquisition Loan
and the Additional Acquisition Loans. In addition, the Trustee,
with the consent of the Company, may incur other Acquisition
Loans from time to time to finance the acquisition of
Company Stock for the Trust or to repay a prior
Acquisition Loan.
(b) The terms of any Acquisition Loan shall comply
with each of the following requirements:
(1) the terms shall be as favorable to the Plan
as the terms of a comparable loan negotiated at arm's length by
independent parties;
(2) the interest rate, spread or formula shall be
no more than a reasonable interest rate considering all relevant
factors including the amount and duration of the Acquisition Loan;
the security and guarantee involved, if any; the credit standing of
the Plan and the guarantor of the Acquisition Loan, if any; and the
interest rate prevailing for comparable loans;
(3) the Acquisition Loan shall be without recourse
against the Plan;
(4) the Acquisition Loan must be for a specific
term, and may not be payable at the demand of any person except in the
case of default;
(5) the only assets of the Plan that may be given
as collateral on the Acquisition Loan are shares of Company Stock acquired
with the proceeds of the same Acquisition Loan or Company Stock used as
collateral for a prior Acquisition Loan, which prior loan is repaid with the
proceeds of the same Acquisition Loan;
(6) no person entitled to payment under the
Acquisition Loan shall have any right to assets of the Plan other than
collateral given for that Acquisition Loan, contributions made to the Plan
(other than contributions of employer securities) to enable it to meet its
obligations under that Acquisition Loan and earnings attributable to such
collateral and such contributions, including dividends on allocated Company
Stock to the extent permitted by the law ("Eligible Earnings");
(7) the value of Plan assets transferred in
satisfaction of the Acquisition Loan upon an event of default shall not
exceed the amount of the default, and if the lender is a "disqualified
person" (as such term is defined in section 4975(e) of the Code), or a
"party in interest" (as such term is defined in Section 3(14) of ERISA),
Plan assets may only be transferred upon default and only upon and to the
extent of the failure of the Plan to meet the payment schedule of the
Acquisition Loan;
(8) payments made from the Trust Fund with
respect to the Acquisition Loan during a Plan Year shall not exceed an
amount equal to the sum of amounts contributed to the Plan to pay off an
Acquisition Loan and Eligible Earnings (as defined in paragraph 6 above),
less any such payments made in prior Plan Years; and
(9) except for a put option described in Code section
409(h), or as otherwise required by applicable law, no Company Stock
acquired with the proceeds of an Acquisition Loan may be subject to a put,
call, or other option or buy-sell or similar arrangement while held by and
when distributed from the Plan.
(c) Any Acquisition Loan must be primarily for the
benefit of Participants and their Beneficiaries, and the
interest rate and price of the securities acquired should
not be such that Plan assets might be drained off.
(d) Notwithstanding any other provision of the Plan or
the Trust, all proceeds of an Acquisition Loan shall be used,
within a reasonable time after receipt by the Trust, only for
any or all of the following purposes:
(1) to acquire Company Stock;
(2) to repay the same Acquisition Loan; or
(3) to repay any previous Acquisition Loan.
(e) Financed Shares shall initially be credited to the
Loan Suspense Account and shall be released for allocation to
the ESOP Stock Accounts of Participants only as payments of
principal and interest, or principal, on the Acquisition Loan are
made by the Trustee. The number of Financed Shares to be released
from the Loan Suspense Account (or subaccount attributable to
that Acquisition Loan) for allocation to Participants' ESOP Stock
Accounts for each Plan Year, shall be based upon either: (x) the
ratio that the payments of principal made on the Acquisition Loan
for that Plan Year , plus the projected payments of principal
during the remainder of the Acquisition Loan repayment period,
provided that the special conditions set forth under Treasury
Regulation section 54.4975-7(b)(8)(ii) are satisfied,
or (y) the ratio that the payments of principal and
interest on the Acquisition Loan for that Plan Year,
bear to the sum of principal and interest payments
during that Plan Year, plus the projected payments of
principal and interest during the remainder of the
Acquisition Loan repayment period. A separate ratio
will be calculated for each Acquisition Loan. The
applicable loan documents will specify whether clause
(x) and/or clause (y) shall apply. Shares released
from the Loan Suspense Account in connection with the
Initial Acquisition Loan and the Additional Acquisition
Loans shall be released in accordance with clause (x)
above."
4. Section 5.4(b)(ii) is hereby deleted.
5. Section 8.1(a) is amended by deleting the proviso
(concerning voting by former employees who were members
of the ALPA Employee Group and beneficiaries of members
of the ALPA Employee Group) from the end of the section.
IN WITNESS WHEREOF, the Company has caused this Tenth
Amendment to be executed on April 28, 2000.
UAL CORPORATION
/s/ Douglas A. Hacker
---------------------
DOUGLAS A. HACKER
Executive Vice President and
Chief Financial Officer
APPROVED BY:
AIR LINE PILOTS ASSOCIATION,
INTERNATIONAL
/s/ Frederic C. Dubinsky
------------------------
INTERNATIONAL ASSOCIATION
OF MACHINISTS AND
AEROSPACE WORKERS
/s/ S.R. Canale
---------------
IN WITNESS WHEREOF, the Company has caused this Tenth
Amendment to be executed on April 28, 2000.
UAL CORPORATION
APPROVED BY:
AIR LINE PILOTS ASSOCIATION,
INTERNATIONAL
/s/ Frederic C. Dubinsky
------------------------
INTERNATIONAL ASSOCIATION
OF MACHINISTS AND
AEROSPACE WORKERS
/s/ S.R. Canale
---------------