Exhibit 4.3
UAL CORPORATION
6 3/8% CONVERTIBLE SUBORDINATED
DEBENTURE DUE 2025
$_____________ No. _______
CUSIP 902549AB0
UAL CORPORATION, a corporation duly organized and
existing under the laws of the State of Delaware (herein called
the "Company," which term includes any successor under the
Indenture hereinafter referred to), hereby promises to pay to
_____________ or registered assigns, the principal sum of
______________________ Dollars, on February 1, 2025.
Interest Payment Dates: February 1, May 1, August 1 and November 1
Record Dates: January 15, April 15, July 15 and October 15
Reference is hereby made to the further provisions of
this Debenture set forth on the reverse hereof, which further
provisions shall for all purposes have the same effect as if
fully set forth at this place.
Unless the certificate of authentication hereon has
been executed by or on behalf of the Trustee by manual signature,
this Debenture shall not be entitled to any benefit under the
Indenture, or be valid or obligatory for any purpose.
THIS SECURITY IS IN GLOBAL FORM WITHIN THE
MEANING OF THE INDENTURE HEREINAFTER REFERRED
TO AND IS REGISTERED IN THE NAME OF A
DEPOSITARY OR A NOMINEE OF A DEPOSITARY.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR
IN PART FOR SECURITIES IN CERTIFICATED FORM,
THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT
AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF
THE DEPOSITARY OR BY A NOMINEE OF THE
DEPOSITARY TO THE DEPOSITARY OR ANOTHER
NOMINEE OF THE DEPOSITARY OR BY THE
DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR
DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITARY.
IN WITNESS WHEREOF, the Company has caused this
Debenture to be duly executed in its corporate name by the manual
or facsimile signature of its Chairman of the Board or its
President and Chief Executive Officer and impressed or imprinted
with its corporate seal or facsimile thereof, attested by the
manual or facsimile signature of its Secretary.
UAL CORPORATION
By:
Title:
Attest:
Secretary
This is one of the Securities of a series issued under
the within-mentioned Indenture.
Dated: THE BANK OF NEW YORK, as Trustee
By:
Authorized Signatory
(REVERSE OF DEBENTURE)
UAL CORPORATION
6 3/8% CONVERTIBLE SUBORDINATED
DEBENTURE DUE 2025
(1) Indenture. This Debenture is one of a duly
authorized issue of Securities of the Company designated as its 6
3/8% Convertible Subordinated Debentures due 2025 (herein called
the "Debentures"), limited in aggregate principal amount to
$600,000,000, issued and to be issued under an Indenture dated as
of April 3, 1995 (herein called the "Indenture") between the
Company and The Bank of New York, as Trustee (herein called the
"Trustee," which term includes any successor Trustee under the
Indenture), to which Indenture and all indentures supplemental
thereto reference is hereby made for a statement of the
respective rights thereunder of the Company, the Trustee and the
Holders of the Debentures, and the terms upon which the
Debentures are, and are to be, authenticated and delivered. The
terms of the Debentures include those stated in the Indenture and
those made part of the Indenture by reference to the Trust
Indenture Act of 1939 (15 U.S.C. 77aaa-77bbbb) as in effect on
the date upon which the Debentures are first issued under the
Indenture (the "Issue Date"). The Debentures are unsecured
general obligations of the Company. All capitalized terms used
in this Debenture and not defined herein will have the meanings
assigned to them in the Indenture.
(2) Interest. The Company promises to pay interest on
said principal sum, quarterly in arrears on February 1, May 1,
August 1 and November 1, of each year, commencing May 1, 1995, at
the rate of 6 1/4% per annum from February 1, 1995 to but
excluding April 4, 1995 and from and after April 4, 1995 at the
rate of 6 3/8% per annum, from the February 1, May 1, August 1 or
November 1, as the case may be, next preceding the date of this
Debenture to which interest on the Debentures has been paid or
duly provided for, unless the date hereof is an Interest Payment
Date to which interest has been paid or duly provided for in
which case from the date of this Debenture, or unless no interest
has been paid or duly provided for on the Debentures, in which
case from February 1, 1995, until payment of said principal sum
has been made or duly provided for. Notwithstanding the
foregoing, when there is no existing default in the payment of
interest on the Debentures, each Debenture authenticated after
the Regular Record Date for any Interest Payment Date, but prior
to such Interest Payment Date, shall be dated the date of its
authentication but shall bear interest from such Interest Payment
Date; provided, however, that if and to the extent that the
Company shall default in the payment of the interest due on such
Interest Payment Date, then all such Debentures shall bear
interest from the February 1, May 1, August 1, or November 1, as
the case may be, to which interest had been paid or duly provided
for next preceding such Interest Payment Date, unless no interest
has been paid or duly provided for on the Debentures, in which
case from February 1, 1995. The interest so payable, and
punctually paid or duly provided for, on any Interest Payment
Date will, as provided in said Indenture, be paid to the Person
in whose name this Debenture (or one or more Predecessor
Debentures) is registered on the Regular Record Date for such
Interest Payment Date.
(3) Extension of Interest Payment Period.
Notwithstanding anything contained in the Indenture to the
contrary, the Company shall have the right at any time during the
term of the Debentures, so long as the Company is not in default
in the payment of interest on the Debentures, to extend the
interest payment period for an Extension Period (as defined
below). Except as provided in the next succeeding sentence, no
interest shall be due and payable during an Extension Period, but
at the end of each Extension Period the Company shall pay all
interest then accrued and unpaid on the Debentures, together with
interest thereon, compounded quarterly, at the rate of 6 3/8% per
annum, to the extent permitted by applicable law. Prior to the
termination of any Extension Period, the Company may (a) on any
Interest Payment Date pay all or any portion of the interest
accrued on the Debentures as provided on the face hereof to
holders of record on the Regular Record Date for such Interest
Payment Date or (b) from time to time further extend the interest
payment period as provided in the last sentence of this
paragraph, provided that any such Extension Period, together with
all such previous and further extensions thereof, may not exceed
20 calendar quarters from the last date to which interest on the
Debentures was paid in full. If the Company shall elect to pay
all of the interest accrued on the Debentures on an Interest
Payment Date during any Extension Period, such Extension Period
shall automatically terminate on such Interest Payment Date.
Upon the termination of any Extension Period and the payment of
all amounts of interest then due, the Company may select a new
Extension Period, subject to the above requirements. The Company
shall cause the Trustee to give notice to the Holders in the
manner provided in the Indenture, not less than five Business
Days prior to the earlier of (i) the January 15, April 15, July
15 or October 15 next preceding the applicable Interest Payment
Date and (ii) the date on which the Company or the Trustee is
required to give notice to the New York Stock Exchange or other
applicable self-regulatory organization of the Regular Record
Date and payment date for such related interest payment period,
of
(x) the Company's election to initiate an Extension
Period and the duration thereof,
(y) the Company's election to extend any Extension
Period beyond the Interest Payment Date on which
such Extension Period is then scheduled to
terminate, and the duration of such extension, and
(z) the Company's election to make a full or partial
payment of interest accrued on the Debentures on
any Interest Payment Date during any Extension
Period and the amount of such payment.
The term "Extension Period" means the period from and
including the Interest Payment Date next following the date of
any notice of extension of the interest payment period on the
Debentures given pursuant to the last sentence of the preceding
paragraph (or, in the case of any further extension of the
interest payment period pursuant to the third sentence of the
preceding paragraph before the payment in full of all accrued
interest on the Debentures, the Interest Payment Date next
following the date of the first such notice given after the last
Interest Payment Date to which interest was paid in full) to but
excluding the Interest Payment Date to which payment of interest
on the Debentures is so extended, after giving effect to any
further extensions of the interest payment period on the
Debentures pursuant to the third sentence of the preceding
paragraph; provided that no Extension Period shall exceed 20
consecutive quarters from the last date to which interest on the
Debentures was paid in full; and provided, further, that any
Extension Period shall end on an Interest Payment Date.
Notwithstanding the foregoing, in no event shall any Extension
Period exceed the final Stated Maturity of the principal of the
Debentures.
(4) Method of Payment. The principal of (and premium,
if any) and interest on this Debenture are payable in such coin
or currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts
at the office or agency of the Company in the City of New York;
provided that, at the option of the Company, interest may be paid
(i) by check mailed by the Trustee to the address of the Holder
as it shall appear on the Register or (ii) by wire transfer to an
account maintained by the Holder as specified in the Register,
provided that the payment of principal with respect to any
Debenture will be made only upon surrender of such Debenture to
the Trustee. Any interest not punctually paid or duly provided
for shall be payable as provided in the Indenture.
(5) Paying Agent and Registrar. Initially, the
Trustee will act as Paying Agent and Registrar through its office
at 101 Barclay Street, New York, New York 10286. The Company may
change any Paying Agent or Registrar without prior notice to any
Holder.
(6) Conversion. Each Debenture will be convertible at
the option of the holder hereof at any time after the date of
original issuance hereof, unless previously redeemed, into a
combination of cash in the amount of $541.90 for each $1,000
principal amount thereof and the number of fully paid and
nonassessable shares of Common Stock obtained by dividing (i) the
difference between Principal Amount of such Debenture and $541.90
for each $1,000 principal amount thereof by (ii) the Conversion
Price, and surrendering such Debenture to be converted as
provided below; provided, however, that the right to convert
Debentures called for redemption shall terminate at the close of
business on the day preceding the Redemption Date, unless the
Company shall default in making payment of the cash payable upon
such redemption. Certificates will be issued for the remaining
Debentures in any case in which fewer than all of the Debentures
represented by a certificate are converted.
In order to exercise the conversion right, the holder
of the Debenture to be converted shall surrender it, duly
endorsed or assigned to the Company or in blank, at the office of
the Trustee in the City of New York, accompanied by written
notice to the Company that the holder hereof elects to convert
the Debenture. Unless the shares issuable on conversion are to
be issued in the same name as the name in which such Debenture is
registered, each Debenture surrendered for conversion shall be
accompanied by instruments of transfer, in form satisfactory to
the Company, duly executed by the Holder or such Holder's duly
authorized attorney and an amount sufficient to pay any transfer
or similar tax (or evidence reasonably satisfactory to the
Company demonstrating that such taxes have been paid).
Holders of Debentures at the close of business on an
interest payment record date shall be entitled to receive the
interest payable on such Debentures on the corresponding Interest
Payment Date notwithstanding the conversion hereof following such
interest payment record date and prior to such Interest Payment
Date. However, Debentures surrendered for conversion during the
period between the close of business on any interest payment
record date and the opening of business on the corresponding
Interest Payment Date (except Debentures converted after the
issuance of a notice of redemption with respect to a Redemption
Date during such period, which shall be entitled to such interest
on the Interest Payment Date) must be accompanied by payment of
an amount equal to the interest payable on such Debentures on
such Interest Payment Date. A holder of Debentures on an
interest payment record date who (or whose transferee) tenders
any such Debentures for conversion into shares of Common Stock on
such Interest Payment Date will receive the interest payable by
the Company on such Debentures on such date, and the converting
holder need not include payment of the amount of such interest
upon surrender of Debentures for conversion. Except as provided
above, the Company shall make no payment or allowance for unpaid
interest, whether or not in arrears, on converted Debentures or
for dividends on the shares of Common Stock issued upon such
conversion.
As promptly as practicable after the surrender of
Debentures as aforesaid, the Company shall issue and shall
deliver at such office to such Holder, or on his or her written
order, a certificate or certificates for the number of full
shares of Common Stock issuable upon the conversion of such
Debentures, and any fractional interest in respect of a share of
Common Stock arising upon such conversion shall be settled as
provided below.
Each conversion shall be deemed to have been effected
immediately prior to the close of business on the date on which
the Debentures shall have been surrendered and such notice (and,
if applicable, payment of an amount equal to the interest payable
on such Debentures) received by the Company as aforesaid, and the
person or persons in whose name or names any certificate or
certificates for shares of Common Stock shall be issuable upon
such conversion shall be deemed to have become the holder or
holders of record of the shares represented thereby at such time
on such date and such conversion shall be at the Conversion Price
in effect at such time on such date, unless the stock transfer
books of the Company shall be closed on that date, in which event
such person or persons shall be deemed to have become such holder
or holders of record at the close of business on the next
succeeding day on which such stock transfer books are open, but
such conversion shall be at the Conversion Price in effect on the
date upon which such shares shall have been surrendered and such
notice received by the Company.
No fractional shares or scrip representing fractions of
shares of Common Stock will be issued upon conversion of the
Debentures. Instead of any fractional interest in a share of
Common Stock that would otherwise be deliverable upon the
conversion of a Debenture, the Company shall pay to the holder of
such share an amount in cash based upon the Current Market Price
of Common Stock on the Trading Day immediately preceding the date
of conversion. If more than one Debenture shall be surrendered
for conversion at one time by the same holder, the number of full
shares of Common Stock issuable upon conversion thereof shall be
computed on the basis of the aggregate principal amount of the
Debentures so surrendered.
The Conversion Price shall be adjusted from time to
time as follows:
(a) If the Company shall after the Issue Date (A) pay
a dividend or make a distribution on its capital
stock in shares of its Common Stock, (B) subdivide
its outstanding Common Stock into a greater number
of shares, (C) combine its outstanding Common
Stock into a smaller number of shares or (D) issue
any shares of capital stock by reclassification of
its Common Stock, the Conversion Price in effect
at the opening of business on the day next
following the date fixed for the determination of
stockholders entitled to receive such dividend or
distribution or at the opening of business on the
day next following the day on which such
subdivision, combination or reclassification
becomes effective, as the case may be, shall be
adjusted so that the holder of any Debentures
thereafter surrendered for conversion shall be
entitled to receive the number of shares of Common
Stock that such holder would have owned or have
been entitled to receive after the happening of
any of the events described above had such
Debenture been converted immediately prior to the
record date in the case of a dividend or
distribution or the effective date in the case of
a subdivision, combination or reclassification.
An adjustment made pursuant to this paragraph (a)
shall become effective immediately after the
opening of business on the day next following the
record date (except as provided below) in the case
of a dividend or distribution and shall become
effective immediately after the opening of
business on the day next following the effective
date in the case of a subdivision, combination or
reclassification.
(b) If the Company shall issue after the Issue Date
rights or warrants (in each case, other than the
Rights) to all holders of Common Stock entitling
them (for a period expiring within 45 days after
the record date mentioned below) to subscribe for
or purchase Common Stock at a price per share less
than the Fair Market Value per share of Common
Stock on the record date for the determination of
stockholders entitled to receive such rights or
warrants, then the Conversion Price in effect at
the opening of business on the day next following
such record date shall be adjusted to equal the
price determined by multiplying (1) the Conversion
Price in effect immediately prior to the opening
of business on the day next following the date
fixed for such determination by (2) a fraction,
the numerator of which shall be the sum of (A) the
number of shares of Common Stock outstanding on
the close of business on the date fixed for such
determination and (B) the number of shares that
the aggregate proceeds to the Company from the
exercise of such rights or warrants for Common
Stock would purchase at such Fair Market Value,
and the denominator of which shall be the sum of
(A) the number of shares of Common Stock
outstanding on the close of business on the date
fixed for such determination and (B) the number of
additional shares of Common Stock offered for
subscription or purchase pursuant to such rights
or warrants. Such adjustment shall become
effective immediately after the opening of
business on the day next following such record
date (except as provided below). In determining
whether any rights or warrants entitle the holders
of Common Stock to subscribe for or purchase
shares of Common Stock at less than such Fair
Market Value, there shall be taken into account
any consideration received by the Company upon
issuance and upon exercise of such rights or
warrants, the value of such consideration, if
other than cash, to be determined by the Board.
(c) If the Company shall distribute to all holders of
its Common Stock any shares of capital stock of
the Company (other than Common Stock) or evidence
of its indebtedness or assets (excluding cash
dividends or distributions paid from profits or
surplus of the Company) or rights or warrants (in
each case, other than the Rights) to subscribe for
or purchase any of its securities (excluding those
rights and warrants issued to all holders of
Common Stock entitling them for a period expiring
within 45 days after the record date referred to
in paragraph (b) above to subscribe for or
purchase Common Stock, which rights and warrants
are referred to in and treated under paragraph (b)
above (any of the foregoing being hereinafter in
this paragraph (c) called the "Securities")), then
in each such case the Conversion Price shall be
adjusted so that it shall equal the price
determined by multiplying (1) the Conversion Price
in effect immediately prior to the close of
business on the date fixed for the determination
of stockholders entitled to receive such
distribution by (2) a fraction, the numerator of
which shall be the Fair Market Value per share of
the Common Stock on the record date mentioned
below less the then fair market value (as
determined by the Board of Directors, whose
determination shall be conclusive) of the portion
of the capital stock or assets or evidences of
indebtedness so distributed or of such rights or
warrants applicable to one share of Common Stock,
and the denominator of which shall be the Fair
Market Value per share of the Common Stock on the
record date mentioned below. Such adjustment
shall become effective immediately at the opening
of business on the Business Day next following
(except as provided below) the record date for the
determination of stockholders entitled to receive
such distribution. For the purposes of this
paragraph (c), the distribution of a Security,
which is distributed not only to the holders of
the Common Stock on the date fixed for the
determination of stockholders entitled to receive
such distribution of such security, but also is
distributed with each share of Common Stock
delivered to a person converting a Debenture after
such determination date, shall not require an
adjustment of the Conversion Price pursuant to
this paragraph (c); provided that on the date, if
any, on which a Person converting a Debenture
would no longer be entitled to receive such
Security with a share of Common Stock (other than
as a result of the termination of all such
Securities), a distribution of such Securities
shall be deemed to have occurred and the
Conversion Price shall be adjusted as provided in
this paragraph (c) (and such day shall be deemed
to be "the date fixed for the determination of the
stockholders entitled to receive such
distribution" and "the record date" within the
meaning of the two preceding sentences).
(d) No adjustment in the Conversion Price shall be
required unless such adjustment would require a
cumulative increase or decrease of at least 1% in
such price; provided, however, that any
adjustments that by reason of this paragraph (d)
are not required to be made shall be carried
forward and taken into account in any subsequent
adjustment until made; and provided, further, that
any adjustment shall be required and made in
accordance with these conversion provisions (other
than this paragraph (d)) not later than such time
as may be required in order to preserve the tax-
free nature of a distribution to the holders of
shares of Common Stock. Notwithstanding any other
provisions, the Company shall not be required to
make any adjustment of the Conversion Price for
the issuance of any shares of Common Stock
pursuant to any plan providing for the
reinvestment of dividends on securities of the
Company. All calculations shall be made to the
nearest cent (with $.005 being rounded upward) or
to the nearest 1/10 of a share (with .05 of a
share being rounded upward), as the case may be.
Anything to the contrary notwithstanding, the
Company shall be entitled, to the extent permitted
by law, to make such reductions in the Conversion
Price, in addition to those required by this
conversion provision, as it in its discretion
shall determine to be advisable in order that any
stock dividends, subdivision of shares,
reclassification or combination of shares,
distribution of rights or warrants to purchase
stock or securities, or a distribution of other
assets (other than cash dividends) hereafter made
by the Company to its stockholders shall not be
taxable.
If the Corporation shall be a party to any transaction
(including without limitation a merger, consolidation, sale of
all or substantially all of the Company's assets or
recapitalization of the Common Stock and excluding any
transaction as to which paragraph (a) above applies) (each of the
foregoing being referred to herein as a "Transaction"), in each
case as a result of which shares of Common Stock shall be
converted into the right to receive stock, securities or other
property (including cash or any combination thereof), each
Debenture which is not converted into the right to receive stock,
securities or other property in connection with such Transaction
shall thereafter be convertible into a combination of cash in the
amount of $541.90 for each $1,000 principal amount thereof and
the kind and amount of shares of stock, securities and other
property (including cash or any combination thereof) receivable
upon the consummation of such Transaction by a holder of that
number of shares or fraction thereof of Common Stock into which
$1,000 principal amount of Debenture was convertible immediately
prior to such Transaction, assuming such holder of Common Stock
(i) is not a Person with which the Company consolidated or into
which the Company merged or which merged into the Company or to
which such sale or transfer was made, as the case may be
("Constituent Person"), or an affiliate of a Constituent Person
and (ii) failed to exercise his rights of election, if any, as to
the kind or amount of stock, securities and other property
(including cash) receivable upon such Transaction (provided that
if the kind or amount of stock, securities and other property
(including cash) receivable upon such Transaction is not the same
for each share of Common Stock of the Company held immediately
prior to such Transaction by other than a Constituent Person or
an affiliate thereof and in respect of which such rights of
election shall not have been exercised ("non-electing share"),
then for the purpose of this paragraph the kind and amount of
stock, securities and other property (including cash) receivable
upon such Transaction by each non-electing share shall be deemed
to be the kind and amount so receivable per share by the
plurality of the non-electing shares). The Company shall not be a
party to any Transaction unless the terms of such Transaction are
consistent with the provisions herein and it shall not consent or
agree to the occurrence of any Transaction until the Company has
entered into an agreement with the successor or purchasing
entity, as the case may be, for the benefit of the holders of the
Debentures that will contain provisions enabling the holders of
the Debentures that remain outstanding after such Transaction to
convert into the consideration received by holders of Common
Stock at the Conversion Price in effect immediately prior to such
Transaction. The provisions of this paragraph shall similarly
apply to successive Transactions.
If:
(i) the Company shall declare a dividend (or any other
distribution) on the Common Stock (other than in
cash out of profits or surplus and other than the
Rights); or
(ii) the Company shall authorize the granting to the
holders of the Common Stock of rights or warrants
(other than the Rights) to subscribe for or
purchase any shares of any class or any other
rights or warrants (other than the rights); or
(iii) there shall be any reclassification of the Common
Stock (other than an event to which paragraph (a)
above with respect to Conversion Price adjustment
applies) or any consolidation or merger to which
the Company is a party and for which approval of
any stockholders of the Company is required, or
the sale or transfer of all or substantially all
of the assets of the Company as an entirety; or
(iv) there shall occur the voluntary or involuntary
liquidation, dissolution or winding up of the
Company,
then the Company shall cause to be filed with the Trustee and
shall cause to be mailed to the holders of the Debentures at
their addresses as shown on the Register of the Company, as
promptly as possible, but a least 15 days prior to the applicable
date hereinafter specified, a notice stating (A) the date on
which a record is to be taken for the purpose of such dividend,
distribution or rights or warrants, or, if a record is not to be
taken, the date as of which the holders of Common Stock of record
to be entitled to receive such dividend, distribution or rights
or warrants are to be determined or (B) the date on which such
reclassification, consolidation, merger, sale, transfer,
liquidation, dissolution or winding up is expected to become
effective, and the date as of which it is expected that holders
of Common Stock of record shall be entitled to exchange their
shares of Common Stock for securities or other property, if any,
deliverable upon such reclassification, consolidation, merger,
sale, transfer, liquidation, dissolution or winding up. Failure
to give or receive such notice or any defect therein shall not
affect the legality or validity of the proceedings herein.
Whenever the Conversion Price is adjusted as herein
provided, the Company shall promptly file with the Trustee an
officer's certificate setting forth the Conversion Price after
such adjustment and setting forth a brief statement of the facts
requiring such adjustment which certificate shall be prima facie
evidence of the correctness of such adjustment. Promptly after
delivery of such certificate, the Company shall prepare a notice
of such adjustment of the Conversion Price setting forth the
adjusted Conversion Price and the effective date of such
adjustment and shall mail such notice of such adjustment of the
Conversion Price to the holders of the Debentures at such
holders' last address as shown on the Register of the Company.
In any case in which an adjustment shall become
effective on the day next following a record date for an event,
the Company may defer until the occurrence of such event (A)
issuing to the holder of any Debenture converted after such
record date and before the occurrence of such event the
additional shares of Common Stock issuable upon such conversion
by reason of the adjustment required by such event over and above
the Common Stock issuable upon such conversion before giving
effect to such adjustment and (B) paying to such holder any
amount in cash in lieu of any fraction.
For purposes of these conversion provisions, the number
of shares of Common Stock at any time outstanding shall not
include any shares of Common Stock then owned or held by or for
the account of the Company. The Company shall not pay a dividend
or make any distribution on shares of Common Stock held in the
treasury of the Company.
There shall be no adjustment of the Conversion Price in
case of the issuance of any stock of the Company in a
reorganization, acquisition or other similar transaction except
as specifically set forth herein. If any action or transaction
would require adjustment of the Conversion Price pursuant to more
than one paragraph hereof, only one adjustment shall be made and
such adjustment shall be the amount of adjustment that has the
highest absolute value.
If the Company shall take any action affecting the
Common Stock, other than action described herein, that in the
opinion of the Board would materially adversely affect the
conversion rights of the holders of the Debentures, the
Conversion Price for the Debentures may be adjusted, to the
extent permitted by law, in such manner, if any, and at such
time, as the Board may determine to be equitable in the
circumstances.
The Company will at all times reserve and keep
available, free from preemptive rights, out of the aggregate of
its authorized but unissued shares of Common Stock or its issued
shares of Common Stock held in its treasury, or both, for the
purpose of effecting conversion of the Debentures, the full
number of shares of Common Stock deliverable upon the conversion
of all outstanding Debentures not theretofore converted. For
purposes of this paragraph, the number of shares of Common Stock
that shall be deliverable upon the conversion of all outstanding
Debentures shall be computed as if at the time of computation all
such outstanding Debentures were held by a single holder.
The Company agrees that any shares of Common Stock
issued upon conversion of the Debentures shall be validly issued,
fully paid and non-assessable. Before taking any action that
would cause an adjustment reducing the Conversion Price below the
then-par value of the shares of Common Stock deliverable upon
conversion of the Debentures, the Company will take any corporate
action that, in the opinion of its counsel, may be necessary in
order that the Company may validly and legally issue fully-paid
and nonassessable shares of Common Stock at such adjusted
Conversion Price.
The Company shall endeavor to list the shares of Common
Stock required to be delivered upon conversion of the Debentures,
prior to such delivery, upon each national securities exchange,
if any, upon which the outstanding Common Stock is listed at the
time of such delivery.
Prior to the delivery of any securities that the
Company shall be obligated to deliver upon conversion of the
Debentures, the Company shall endeavor to comply with all federal
and state laws and regulations thereunder requiring the
registration of such securities with, or any approval of or
consent to the delivery thereof by, any governmental authority.
The Company will pay any and all documentary stamp or
similar issue or transfer taxes payable in respect of the issue
or delivery of shares of Common Stock or other securities or
property on conversion of the Debentures pursuant to these
conversion provisions; provided, however, that the Company shall
not be required to pay any tax that may be payable in respect of
any transfer involved in the issue or delivery of shares of
Common Stock or other securities or property in a name other than
that of the holder of the Debentures to be converted and no such
issue or delivery shall be made unless and until the person
requesting any issue or delivery has paid to the Company the
amount of any such tax or established, to the reasonable
satisfaction of the Company, that such tax has been paid.
The term "Conversion Price" means the conversion price
per share of Common Stock for which the Debentures are
convertible, as such Conversion Price may be adjusted. The
initial conversion price will be $143.50.
The term "Current Market Price" of publicly traded
shares of Common Stock or any other class of capital stock or
other security of the Company or any other issuer for any day
shall mean the last reported sales price, regular way, on such
day, or, if no sale takes place on such day, the average of the
reported closing bid and asked prices on such day, regular way,
in either case as reported on the NYSE Composite Tape, or, if
such security is not listed or admitted for trading on the NYSE,
on the principal national securities exchange on which such
security is listed or admitted for trading or, if not listed or
admitted for trading on any national securities exchange, on the
Nasdaq National Market ("NNM") of the National Association of
Securities Dealers, Inc. Automated Quotations System ("Nasdaq")
or, if such security is not quoted on such NNM, the average of
the closing bid and asked prices on such day in the over-the-
counter market as reported by Nasdaq or, if bid and asked prices
for such security on such day shall not have been reported
through Nasdaq, the average of the bid and asked prices on such
day as furnished by any NYSE member firm regularly making a
market in such security selected for such purpose by the Board.
The term "Fair Market Value" means the average of the
daily Current Market Prices of a share of Common Stock during the
five (5) consecutive Trading Days selected by the Company
commencing not more than 20 Trading Days before, and ending not
later than, the earlier of the day in question and the day before
the "ex" date with respect to the issuance or distribution
requiring such computation. The term "ex date," when used with
respect to any issuance or distribution, means the first day on
which the Common Stock trades regular way, without the right to
receive such issuance or distribution, on the exchange or in the
market, as the case may be, used to determine that day's Current
Market Price.
The term "Principal Amount" shall mean the principal
amount of the Debenture.
The term "Rights" means the rights associated with and
trading with each share of Common Stock outstanding.
The term "Trading Day" means any day on which the
securities in question are traded on the NYSE, or if such
securities are not listed or admitted for trading on the NYSE, on
the principal national securities exchange on which such
securities are listed or admitted, or if not listed or admitted
for trading on any national securities exchange, on the NNM, or
if such securities are not quoted on such NNM, in the applicable
securities market in which the securities are traded.
(7) Redemption. The Debentures may be redeemed, at
the option of the Company, in whole or in part, on any date on or
after May 1, 1996, upon not less than 30 nor more than 60 days'
prior notice given as provided in the Indenture, at the following
Redemption Prices (expressed as percentages of the principal
amount thereof redeemed), plus accrued and unpaid interest, if
any, up to but excluding the redemption date, if redeemed during
the twelve-month period commencing May 1 of the years indicated:
Redemption Redemption
Year Price Year Price
1996 104.375% 2000 101.875%
1997 103.750% 2001 101.250%
1998 103.125% 2002 100.625%
1999 102.500% 2003 and 100.000%
thereafter
(except that interest installments whose Stated Maturity is the
Redemption Date will be payable to the Holders of such
Debentures, or one or more predecessor Debentures, of record on
the relevant Regular Record Date referred to on the face hereof).
The Company may exercise this redemption option only if for
20 trading days within any period of 30 consecutive trading days,
including the last trading day, the last sale price of the Common
Stock of the Company as reported by the New York Stock Exchange
Composite Transaction Tape exceeds 120% of the Conversion Price,
subject to adjustment as described herein.
(8) Denominations, Transfer, Exchange. The Debentures
are issuable only as registered Debentures without coupons in the
denominations of $1,000 and any integral multiple thereof. As
provided in the Indenture, and subject to certain limitations
therein set forth, Debentures are exchangeable for a like
aggregate principal amount of Debentures of different authorized
denominations as requested by the Holder surrendering the same
and upon surrender of the Debenture for registration of transfer
at the office or agency of the Company in the City of New York,
the Company will execute, and the Trustee will authenticate and
deliver, in the name of the designated transferee or transferees,
one or more new Debentures, of authorized denominations and of a
like aggregate principal amount and tenor. Every Debenture
surrendered for registration of transfer or exchange will, if
required by the Company, the Registrar or the Trustee, be duly
endorsed by, or accompanied by a written instrument of transfer
in form satisfactory to the Company, the Registrar and the
Trustee duly executed by, the Holder hereof or his attorney duly
authorized in writing. No service charge will be made for any
such registration of transfer or exchange, but the Company may
require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection therewith.
(9) Persons Deemed Owners. Prior to due presentment
for registration of transfer of this Debenture, the Company, the
Trustee and any agent of the Company or the Trustee may treat the
Person in whose name this Debenture is registered as the owner
hereof for the purpose of receiving payment as herein provided
and for all other purposes whatsoever, whether or not this
Debenture is overdue, and neither the Company, the Trustee nor
any such agent will be affected by notice to the contrary.
(10) Defaults and Remedies. If an Event of Default as
defined in the Indenture shall occur, the principal of all
Debentures may be declared due and payable in the manner and with
the effect provided in the Indenture.
(11) Subordination. The Company and each Holder, by
acceptance hereof, agrees that the payment of the principal of,
and premium, if any, and interest on the Debentures is
subordinated, to the extent and in the manner provided in the
Indenture, to the prior payment in full of the Senior
Indebtedness of the Company as defined in the Indenture and this
Debenture is issued subject to the provisions of the Indenture
with respect thereto. Each Holder of this Debenture, by accepting
the same, authorizes and expressly directs the Trustee on his
behalf to take such action as may be necessary or appropriate in
the discretion of the Trustee to effectuate the subordination so
provided and appoints the Trustee his attorney-in-fact for such
purpose.
(12) Indebtedness. The Company and, by its acceptance
of this Debenture or a beneficial interest herein, the Holder of,
and any Person that acquires a beneficial interest in, this
Debenture agree that for United States federal, state and local
tax purposes it is intended that this Debenture constitute
indebtedness.
(13) Amendments and Waivers. The Indenture permits,
with certain exceptions as therein provided, the amendment
thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Debentures under the
Indenture at any time by the Trustee with the consent of the
Holders of a majority of the aggregate principal amount of the
Debentures at the time Outstanding. The Indenture also contains
provisions permitting the Holders of a majority in aggregate
principal amount of the Debentures at the time Outstanding, on
behalf of the Holders of all the Debentures, by notice to the
Trustee to waive certain past Defaults or Events of Default and
their consequences under the Indenture.
(14) Obligation Absolute. No reference herein to the
Indenture and no provision of this Debenture or of the Indenture
shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of (and premium,
if any) and interest on this Debenture at the times, place and
rate, and in the coin or currency, hereto prescribed.
(15) No Recourse Against Others. No recourse for the
payment of the principal of or interest on this Debenture, or for
any claim based hereon or on the Indenture and no recourse under
or upon any obligation, covenant or agreement of the Company in
the Indenture or any indenture supplemental thereto or in any
Debenture, or because of the creation of any indebtedness
represented hereby, shall be had against any incorporator,
stockholder, officer or director, as such, past, present or
future, of the Company or of any successor corporation, either
directly or through the Company or any successor corporation,
whether by virtue of any constitution, statute or rule of law or
by the enforcement of any assessment or penalty or otherwise, all
such liability being, by the acceptance hereof and as part of the
consideration for the issue hereof, expressly waived and
released.
(16) Governing Law. THIS DEBENTURE WILL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK.
____________________
The Company will furnish to any Holder upon written
request and without charge a copy of the Indenture. Requests may
be made to: UAL Corporation, P.O. Box 66100, Chicago, Illinois
60666, Attention: Treasurer.