Exhibit 10.1
FOURTH 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 as of August 1, 1996 (except as specified
below).
1. The following new paragraph is added immediately
following the third paragraph of the material labelled
"Transaction" which precedes Section 1:
"The parties to the Recapitalization Agreement have
recognized that the value of the Common Stock has increased
significantly since the effective date of the Plan. That
increase is expected to result in an increase in the price
at which the Trustee will acquire Class 1 Non-Voting
Preferred Stock starting in 1996. As a result of the
significant price increase and limitations imposed under the
Internal Revenue Code, the parties to the Recapitalization
Agreement anticipate that the portion of the underlying
shares of Preferred Stock which will be available under Part
A may be reduced from 78.15% starting in 1996, as
contemplated by Section 1.6(q) of the Recapitalization
Agreement. Any reduction in the Class 1 Non-Voting
Preferred Stock under Part A for a Plan Year will be offset
by a corresponding increase for that year in the shares of
Preferred Stock under Part B and the Supplemental Plan."
2. The material labelled "Part A" which precedes
Section 1 is amended by adding the following new paragraph to
the end of such material:
"For the Plan Years beginning on and after January 1,
1996, the foregoing percentages will be adjusted as set
forth in Section 5.4(a)(i)(A) to take into account the
expected limitations on the amount of shares of Preferred
Stock which can be delivered under Part A because of
limitations under the Code. It is expected that such Code
limitations will result in an overall reduction of the
number of shares of Preferred Stock which can be delivered
in Part A. It is also expected that the total number of
shares to be delivered in Part A to the Management and
Salaried Employee Group will be unchanged, that the total
number of shares to be delivered in Part A to the IAM
Employee Group will be reduced, and that the total number of
shares to be delivered in Part A to the ALPA Employee Group
may be reduced. The Company shall, pursuant to an agreement
entered into pursuant to Section 1.6(q) of the
Recapitalization Agreement among the Company and the unions
representing the members of the ALPA and IAM Employee
Groups, determine the number of shares which are expected to
be delivered under Part A, determine the relevant
percentages among the Employee Groups, and cause any
reduction in the shares delivered under Part A to each
Employee Group to be offset by a corresponding increase in
the number of shares delivered under Part B and the
Supplemental Plan to that Employee Group, so that the total
number of shares delivered to each Employee Group will be
unchanged."
3. Section 1(p) is amended by adding the following to
the end of the Section, it being understood that the language set
forth below is intended only as an explanation of the original
intent of the Plan and not as a substantive change to the Plan,
and is therefore effective July 12, 1994:
"Compensation shall not include amounts paid in an
employee contest or drawing of any type."
4. The following is added after the first sentence of
Section 3.1(a)(i):
"For Plan Years 1996 through 1999 inclusive, the
Company's contribution under Part A (and the corresponding
principal payment due for the initial year of each
Additional Acquisition Loan entered into for such years)
shall be limited to the maximum contribution which the
Company reasonably determines in consultation with its
advisers can be made consistent with (w) satisfaction of the
principles set forth in Section 1.6(l) of the
Recapitalization Agreement, (x) achieving a high degree of
certainty that the limits of Code Section 415(c)(6) shall
not be exceeded, (y) avoiding an allocation which would be
expected to cause all members of an Employee Group to exceed
the limits of Code Section 415(c), and (z) limiting the
release of shares of Class 1 Non-Voting Preferred Stock from
the suspense accounts under the Acquisition Loans so that
there are available for allocation that year sufficient
shares of Class 2 Non-Voting Preferred Stock for each
Employee Group to permit appropriate allocations in the
Supplemental ESOP to individuals whose allocations reached
the limit of Code Section 415(c). The Company's
contribution shall be determined under the Agreement
Pursuant to Section 1.6(q) of the Recapitalization Agreement
(the "1.6(q) Agreement") entered into by the Company, ALPA
and the IAM, which provides that the amount of the
contribution shall not be made by reconsidering the
principles set forth in clauses (w) through (z), but shall
instead be made by using the same methodology which was used
by the Company (and verified by the Committee) for the
determination of the Revised Class 1 Decimal under the
1.6(q) Agreement, and that such methodology shall be applied
by using such updated data as may be reasonably available to
the Company prior to the determination of the contribution."
5. Section 5.4(a)(i)(A) is amended by adding the
following to the end of the Section:
"For Class 1 Non-Voting Preferred Stock released for
Plan Years beginning on or after January 1, 1996 and before
January 1, 2000, the allocation percentage shall be
determined by the Company as described below. There shall
be determined the number of shares of Class 1 Non-Voting
Preferred Stock available for allocation for the Plan Year,
which is equal to the sum of (x) the number of shares of
Class 1 Non-Voting Preferred Stock which will be released
for the Plan Year on account of repayment of all Acquisition
Loans and (y) the number of shares held in the suspense
account referred to in Section 5.5(f) on account of excess
contributions in the preceding Plan Year. The number of
shares of Class 1 Non-Voting Preferred Stock to be allocated
for the Plan Year on behalf of dividends paid on previously-
allocated shares shall be determined for each Employee
Group. The allocation percentage for the Management and
Salaried Employee Group shall be the percentage which will
result in a total allocation of 497,983.6564 shares of
Class 1 Non-Voting Preferred Stock, including the shares to
be allocated on account of dividends paid on previously-
allocated shares. The percentage to be allocated to the
members of the IAM Employee Group shall be the least of (xx)
the percentage which would result in a total allocation to
the IAM Employee Group of 1,129,952.550 shares of Class 1
Non-Voting Preferred Stock for such Plan Year, including
shares to be allocated based upon dividends paid on
previously-allocated shares, (yy) the percentage which is
expected to result in the allocation of the sum of (i) the
shares to be allocated based upon dividends paid on
previously-allocated shares, plus (ii) the amount the
Company reasonably determines, in consultation with its
advisers, as the maximum allocation which can be made
consistent with avoiding an allocation which would be
expected to cause all members of the IAM Employee Group to
exceed the limits described in Section 5.4(a)(iii), or (zz)
the percentage which was contemplated for the allocation to
the IAM Employee Group upon consummation of the Additional
Acquisition Loan entered into during such Plan Year. The
allocation percentage to the ALPA Employee Group shall be
one minus the sum of the allocation percentage to the
Management and Salaried Employee Group and the IAM Employee
Group."
6. Section 5.4(a)(iii) is amended by adding the
following to the end of the Section:
"Effective for Plan Years beginning on or after January
1, 1996, for purposes only of allocations of contributions
under Part A, the amount of the limitation under Code
Section 415(c) shall be reduced by an amount which is
reasonably estimated by the Company for each Employee Group,
as necessary to permit the allocation of Voting Preferred
Stock under Section 5.4(c)(i), without violating the
limitation of Code Section 415(c). For this purpose, the
amount of the reduction in the limitation may be estimated
in any reasonable way, and such estimation may be made on a
group-wide, rather than an individual basis; the amount of
the reduction in the limitation need not be the same for
each Employee Group."
7. Section 5.4(a)(viii) shall be redesignated as
clause (ix), the first word of such clause shall be changed from
"eighth" to "ninth", the reference "clauses (i) through (vii)"
shall be changed to a reference to "clauses (i) through (viii)",
and there shall be inserted a new clause (viii) as follows:
"(viii) Eighth. If the allocation of Employer
contributions described in clause (vii) results in a
violation of Code Section 415(c) for all members of any
Employee Group (after reallocating any excess allocation
owing to members of such Employee Group), then the excess
allocation, and the shares released from repayment of
Acquisition Loans resulting from such excess allocation,
shall be placed in the suspense account referred to in
Section 5.5(f), and the tentative allocations shall become
final. For this purpose, shares shall first be allocated in
any Plan Year from the suspense account referred to in
Section 5.5(f), and then from the shares released on account
of repayment of Acquisition Loans, in the order the
Acquisition loans were entered into."
8. Section 5.5(d) is amended by adding the following
to the end of the Section:
"For Plan Years beginning on or after January 1, 1996,
Part B shall generally continue to be reduced before Part A,
but Part A shall be reduced prior to Part B to the extent
set forth in the provisions of Section 5.4(a)(iii) which
refer to Voting Preferred Stock."
9. Section 5.5(f) is amended to read as follows:
"(f) Excess Allocations. If, after applying the
allocation provisions under Section 5.4, allocations under
Section 5.4 would otherwise result in a violation of Code
Section 415, the ESOP Committee shall reduce Employer
Contributions for the next limitation year for all
Participants and shall hold excess amounts in a Suspense
Account for allocation in a subsequent Plan Year in
accordance with Reg. Section 1.415-6(b)(6)(iii). The shares
of Class 1 Non-Voting Preferred Stock which correspond to
such excess contribution amounts shall also be held in such
Suspense Account for allocation to Participants in a
subsequent Plan Year. If an amount is held in the Suspense
Account referred to in this subsection (f) after the
completion of allocations for any Plan Year, then such
amount shall be allocated as part of the Employer
Contribution for the immediately following Plan Year. Such
amount shall be included in calculating the allocation
percentage among the Employee Groups, pursuant to Section
5.4(a)(i). Accordingly, in a Plan Year in which amounts
held in the Suspense Account are allocated, the total
Employer Contributions, including the amounts held in the
Suspense Account, shall be allocated according to the
allocation percentages established under Section 5.4(a)(i).
The intended result of the allocation is that the Suspense
Account should not alter the agreed-upon cumulative division
of shares among the Employee Groups in Parts A and B and the
Supplemental ESOP."
10. Section 7.2 is amended, effective as of the date
this amendment is adopted and approved, by adding the following
immediately before the words "provided, however":
"or the Participant is determined to have a Total
Disability"
IN WITNESS WHEREOF, the Company has caused this Fourth
Amendment to be executed on July 16, 1996.
UAL CORPORATION
/s/ Douglas A. Hacker
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APPROVED BY:
AIR LINE PILOTS ASSOCIATION,
INTERNATIONAL
/s/ J. Randolph Babbitt
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/s/ Michael H. Glawe
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INTERNATIONAL ASSOCIATION
OF MACHINISTS AND
AEROSPACE WORKERS
/s/ Kenneth W. Thiede
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