Exhibit 10.1
SECOND 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 January 1, 1995. The amendments to Section
l(p) and 1(yy) as set forth below are intended to document the
previously-existing interpretation of the Plan, rather than to
accomplish a substantive change to the Plan.
1. The following is hereby inserted as a new paragraph
at the end of the material labelled "Part A" which precedes
Section 1:
"Solely for the Plan Year beginning on January 1, 1995, the
allocation which would be made under the foregoing
percentages is amended to take into account the participation
by certain members of the IAM Employee Group in the
allocation of Class 2 Non-Voting Preferred Stock under the
Supplemental Plan pursuant to the Special Annual Allocation
for 1995. Accordingly, the shares of Class 1 Non-Voting
Preferred Stock allocated for the Plan Year commencing
January 1, 1995 which would be allocated to the members of
the IAM Employee Group under the forgoing percentages will be
reduced by the number of shares of Class 2 Non-Voting
Preferred Stock to be included in the hypothetical share
number as a result of the Special Annual Allocation for 1995
for the members of the IAM Employee Group who did not have
any compensation for purposes of Code Section 415 for the
1995 Plan Year. Correspondingly, (1) the number of shares of
Class 1 Non-Voting Preferred Stock which would be allocated
for the Plan Year commencing January 1, 1995 to the members
of the ALPA Employee Group under the forgoing percentages
will be increased by the same number of shares, and (2) the
number of shares of Class 2 Non-Voting Preferred Stock which
would be allocated for the Plan Year commencing January 1,
1995 to the members of the ALPA Employee Group as set forth
in the Supplemental Plan will be reduced by the same number
of shares."
2. The first clause (i) of Section 1(p) is amended to
read as follows:
"(i) the total cash compensation (and any in-kind
compensation which the Participant could have elected to
receive as cash) paid to the Participant for services while a
Participant and an Eligible Employee, during the Plan Year
for services rendered to his Employer, including bonuses and
overtime pay, plus"
3. Section 1(p) is amended by adding the following to
the end of the section:
"With respect to a Participant who is a member of the ALPA
Employee Group, Compensation shall include pay received for
vacation time in the year paid (whether before or after
termination of employment)."
4. The following new Section l(oo)A is hereby added
after Section l(oo) and before Section l(pp):
"(oo)A 'Special Annual Allocation' means the allocation
referred to in Section 5.4(f)."
5. Section 1(yy) is amended by adding the following to
the end of the section:
"A Participant's Wage Investment shall be calculated with
respect to vacation pay in the year paid (whether before or
after termination of employment)."
6. Section 5.4(a)(i)(A) is amended by adding the
following to the end of the section:
"The shares of Class 1 Non-Voting Preferred Stock allocated
for the Plan Year commencing January 1, 1995 which would be
allocated to the members of the IAM Employee Group under the
forgoing percentages will be reduced by the number of shares
of Class 2 Non-Voting Preferred Stock to be included in the
hypothetical share number as a result of the Special Annual
Allocation for 1995 for the members of the IAM Employee Group
who did not have any compensation for purposes of Code
Section 415 for the 1995 Plan Year. Correspondingly, the
number of shares of Class 1 Non-voting Preferred Stock which
would be allocated for the Plan Year commencing January 1,
1995 to the members of the ALPA Employee Group under the
forgoing percentages will be increased by the same number of
shares."
7. The following is hereby added to the end of Section
5.4(a)(iii):
"Notwithstanding the foregoing, for each Plan Year beginning
on or after January 1, 1995, the Employer Contributions
tentatively allocated under this clause (iii) shall be the
Employer Contributions remaining after the allocation of the
Special Annual Allocation (if any) for such Plan Year
pursuant to Section 5.4(f). Accordingly, a Participant's
tentative allocation under this subsection shall be the sum
of the Special Annual Allocation (if any) allocated to the
Participant for the Plan Year, plus the allocation under the
preceding portions of this clause of the Employer
Contributions remaining after the Special Annual Allocation."
8. The second sentence of Section 5.4(c)(ii) is
amended by inserting the following after "Such number shall equal"
and before "the number of shares that would have been allocated to
the Participant...":
"the sum of the number of shares set forth as the
hypothetical allocation to the Participant in the Special
Annual Allocation for that Plan Year (if any), plus"
9. Section 5.4(c)(ii) is amended by adding the
following to the end of the section:
"For Plan Years beginning on or after January 1, 1995, the
hypothetical share number shall be calculated by taking into
account the Special Annual Allocation applicable to that Plan
Year (if any). By way of illustration, assume that for the
1995 Plan Year, a total of 1,110,456.695 shares are to be
allocated to members of the ALPA Employee Group, and that
5,000 of those shares are to be allocated in the Special
Annual Allocation applicable to members of the ALPA Employee
Group. Under this example, the hypothetical share number of
a member of the ALPA Employee Group for 1995 shall equal the
sum of (x) the portion of the 5,000 shares set forth as the
hypothetical allocation to the employee pursuant to the
Special Annual Allocation for 1995, plus (y) the employee's
ratable portion (based upon Compensation as modified under
this clause (ii)) of the remaining 1,105,455.695 shares."
10. Section 5.4(c) is amended, for Plan Years
beginning on or after January 1, 1995, by adding the following to
the end of the Section:
"Solely for the Plan Year commencing January 1, 1995, IAM
members may to the extent required to implement the Special
Annual Allocation for 1995, participate in all of the
allocations under this subsection (c). For all other Plan
Years, participation by member of the IAM Employee Group in
the allocations under this subsection (c) shall be limited by
the provisions of this Plan as they existed prior to this
amendment."
11. The following new Section 5.4(f) is added to the
Plan:
"(f) Special Annual Allocations. For each Plan Year
beginning on or after January 1, 1995, the Special Annual
Allocation described in Appendix A applicable to the Plan
Year (if any) shall be made after the application of clauses
(i) and (ii) of Section 5.4(a), but prior to the application
of clause (iii) of Section 5.4(a) and the clauses subsequent
to clause (iii), and the hypothetical allocation set forth in
the Special Annual Allocation applicable to the Plan Year
shall be made as a part of the calculation of the
hypothetical share number as set forth in clause (ii) of
Section 5.4(c). If Appendix A does not set forth a Special
Annual Allocation applicable to a particular Plan Year, then
there shall be no Special Annual Allocation for that Plan
Year."
12. The following Appendix A is hereby added to the
Plan:
"APPENDIX A
SPECIAL ANNUAL ALLOCATIONS
This Appendix A is part of the UAL Corporation Employee
Stock Ownership Plan. The purpose of this Appendix A is to set
forth the terms of the Special Annual Allocation referred to in
Section 5.4(f) of the ESOP. This Appendix A may only be amended
pursuant to Section 13.1 of the ESOP.
Special Annual Allocation for 1995. For the Plan Year
beginning January 1, 1995, there shall be two Special Annual
Allocations. The first Special Annual Allocation is described in
subsection (a) below, and is intended to provide to the accounts
of certain Participants who are members of the IAM Employee Group
the shares of Class 1 Non-Voting Preferred Stock which would have
been provided in 1994, but for the application of the limits of
Code Section 415. The second Special Annual Allocation is
described in subsection (b) below, shall be made to all
individuals who were Participants in 1994, and is intended to
adjust the Accounts of Participants to the levels which had
originally been reported to Participants in the allocation of
shares for 1994, but which were overstated because additional
Compensation and Wage Investments were subsequently reported for
1994. The second Special Annual Allocation is also intended to
adjust the Accounts of Participants whose accounts had not been
overreported so that their allocations will be on a par with the
allocations to the Participants described in the preceding
sentence.
(a) Special Annual Allocation for IAM Employee Group.
A portion of the Employer Contributions allocated to the IAM
Employee Group for 1995 shall be allocated to the Accounts of
those Participants who are members of the IAM Employee Group to
whom Contributions were limited by the application of Code Section
415 for the 1994 Plan Year. For each such Participant, the shares
which would have been allocated but for the application of the
limits of Code Section 415 are referred to as the "1994 Shortfall
Shares." For purposes of calculating the Special 1995 IAM
Allocation, there shall be calculated the "1995 IAM Average
Contribution," which shall be equal to the total Employer
Contributions allocated to the IAM Employee Group for the 1995
Plan Year, divided by the total number of shares of Class 1 Non-
Voting Preferred Stock allocated to the IAM Employee Group for the
1995 Plan Year, excluding, however, the shares allocated to the
IAM Employee Group for the 1995 Plan Year on account of dividends
paid on previously-allocated shares.
(1) Amount to be included in tentative allocation.
The following amount shall be included in the tentative allocation
under Section 5.4(a)(iii) as the Special Annual Allocation to each
affected Participant: the lesser of (i) the sum of (xx) the 1995
IAM Average Contribution times the Participant's 1994 Shortfall
Shares, plus (yy) $8.8872, times the Participant's 1994 Shortfall
Shares, times a fraction the numerator of which is the 1995 IAM
Average Contribution, and the denominator of which is the fair
market value of a share of Class 1 Non-Voting Preferred Stock as
of the end of the 1995 Plan Year, or (ii) the allocation permitted
for 1995 pursuant to Code Section 415.
(2) Shares to be included in hypothetical share number
and hypothetical allocation. The following number of shares is to
be included in the hypothetical share number under Section
5.4(c)(ii) and Section 2.4(a) of the Supplemental Plan as the
Special Annual Allocation for each affected Participant who did
not have any compensation for purposes of Code Section 415 in
1995: the sum of (i) the 1994 Shortfall Shares, plus (ii) $8.8872
times the Participant's 1994 Shortfall Shares divided by the fair
market value of a share of Class 1 Non-Voting Preferred Stock as
of the end of the 1995 Plan Year. No shares are included in the
hypothetical share number or Special Annual Allocation under the
Supplemental Plan for Participants who had any compensation for
purposes of Code Section 415 in 1995.
(b) 1995 Special Annual Allocation for All Employee
Groups. For each individual who was a Participant in 1994 (a
"1994 Participant"), there shall be calculated a number of shares
referred to as the "1995 Make-up Shares." The 1995 Make-up Shares
for each 1994 Participant shall equal the difference between the
number of shares actually allocated to the 1994 Participant for
the 1994 Plan Year (using the final Compensation and Wage
Investment data), and the number of shares which would have been
allocated to the 1994 Participant for the 1994 Plan Year if the
following facts had been correct for the 1994 Plan Year: (1) the
total Compensation of Participants who were members of the ALPA
Employee Group (without respect to the limitations of Code Section
401(a)(17) and the limitation contained in Section l(p) of four
times the dollar limit under Code Section 415(c)(1)(A)) was
$415,308,677.81, (2) the total Compensation of Participants who
were members of the ALPA Employee Group (limited by the limitation
contained in Section l(p) of four times the dollar limitation
under Code Section 415(c)(1)(A)) was $375,772,138.78, (3) the
total Compensation of ALPA Participants (without respect to the
limitation contained in Section l(p) of four times the dollar
limit under Code Section 415(c)(1)(A), but limited by Code Section
401(a)(17)) was $407,265,547.88, (4) the total Wage Investments
were $91,675,662.89, (5) the total Compensation of members of the
Management and Salaried Employee Group (without respect to the
limitation of Code Section 401(a)(17)) was $346,925,400.49, and
(6) the total Compensation of members of the Management and
Salaried Employee Group (limited by Code Section 401(a)(17)) was
$345,997,953.17.
For purposes of calculating the 1995 Special Annual
Allocation, there shall be calculated (x) the "1995 ALPA Average
Contribution," which shall be equal to the total Employer
Contributions allocated to the ALPA Employee Group for the 1995
Plan Year, divided by the total number of shares of Class 1 Non
Voting Preferred Stock allocated to the ALPA Employee Group for
the 1995 Plan Year, excluding, however, the shares allocated to
the ALPA Employee Group for the 1995 Plan Year on account of
dividends paid on previously-allocated shares, and (y) the "1995
M&S Average Contribution," which shall be equal to the total
Employer Contributions allocated to the Management and Salaried
Employee Group for the 1995 Plan Year, divided by the total number
of shares of Class 1 Non-Voting Preferred Stock allocated to the
Management and Salaried Employee Group for the 1995 Plan Year,
excluding, however, the shares allocated to the Management and
Salaried Employee Group for the 1995 Plan Year on account of
dividends paid on previously-allocated shares. The 1995 IAM
Average Contribution, calculated as set forth in subsection (a)
above shall also be used in this subsection (b). For each 1994
Participant, the result of the above calculation which applies his
Employee Group is the "Applicable Average Contribution."
(1) Amount to be included in tentative allocation.
The following amount shall be included in the tentative allocation
under Section 5.4(a)(iii) as the Special 1995 Allocation to each
1994 Participant: the lesser of (i) the sum of (xx) the
Applicable Average Contribution, times the Participant's 1995 Make-
up Shares, plus (yy) $8.8872, times the Participant's 1995 Make-up
Shares, times a fraction the numerator of which is the Applicable
Average Contribution, and the denominator of which is the fair
market value of a share of Class 1 Non-Voting Preferred Stock as
of the end of the 1995 Plan Year, or (ii) the allocation permitted
for 1995 pursuant to Code Section 415.
(2) Shares to be included in hypothetical share number
and hypothetical allocation. The following number of shares is to
be included in the hypothetical share number under Section
5.4(c)(ii) and Section 2.4(a) of the Supplemental Plan as the
Special Annual Allocation for each affected Participant: the sum
of (i) the 1995 Make-up Shares, plus (ii) $8.8872 times the
Participant's 1994 Make-up Shares divided by the fair market value
of a share of Class 1 Non-Voting Preferred Stock as of the end of
the 1995 Plan Year. Notwithstanding the foregoing, for
Participants who are members of the IAM Employee Group, the
inclusion in the hypothetical share number and the Special Annual
Allocation under the Supplemental Plan shall only be made if the
Participant had no compensation for purposes of Code Section 415
in 1995.
(c) In the case of any member of the IAM Employee
Group who is subject to both subsections (a) and (b), the total
1995 Special Annual Allocation shall be the sum of the amounts
determined for such Participant under both subsections."
IN WITNESS WHEREOF, the Company has caused this Second
Amendment to be executed on August 17, 1995.
UAL CORPORATION
/s/ Stuart I. Oran
Executive Vice President-
Corporate Affairs and
General Counsel
APPROVED BY:
AIR LINE PILOTS ASSOCIATION,
INTERNATIONAL
/s/ J. Randolph Babbitt
/s/ Harlow B. Osteboe
INTERNATIONAL ASSOCIATION
OF MACHINISTS AND
AEROSPACE WORKERS
/s/ Kenneth W. Thiede