Agreement Pursuant to Section 1.6(q) of Recapitalization Agreement - UAL Corp., Air Line Pilots Association International, and International Association of Machinists and Aerospace Workers


                      AGREEMENT PURSUANT TO
          SECTION 1.6(q) OF RECAPITALIZATION AGREEMENT


         WHEREAS, UAL Corporation, a Delaware Corporation (the
'Company'), Air Line Pilots Association International ('ALPA')
and International Association of Machinists and Aerospace Workers
(the 'IAM') are parties to an Amended and Restated Agreement and
Plan of Recapitalization dated March 25, 1994 ('Recapitalization
Agreement');
         
         WHEREAS, the parties to the Recapitalization Agreement
have recognized that due to increases in the price of the common
stock of the Company, it is expected that the Class 1 ESOP
Preferred Stock to be purchased by the Trustee in 1996 and
subsequent years may, unless the number of such shares to be
purchased are adjusted, cause allocations under the ESOP to be in
an amount which would exceed the limitations of Internal Revenue
Code ('Code') Section 415(c); and
         
         WHEREAS, Section 1.6(q) of the Recapitalization
Agreement provides that the parties agree to cooperate to modify
the number of Class 1 ESOP Preferred Shares to be sold and to
make appropriate conforming modifications to the related
documents to avoid allocations in excess of the limitations of
Code Section 415; and

         WHEREAS, this agreement ('Agreement') is entered into
pursuant to Section 1.6(q) of the Recapitalization Agreement.

         NOW, THEREFORE, the Company, ALPA, and the IAM hereby
agree as follows:
          
         1.  Unless otherwise defined in this Agreement,
capitalized terms used in this Agreement shall have the meaning
set forth in the Recapitalization Agreement.
          
         2.  The parties hereto recognize that in order to
satisfy the limitations of Code Section 415, it will likely be
necessary to reduce the number of shares of ESOP Preferred
purchased by the Trustee in 1996 and subsequent years.  It is the
intent of the parties to set forth in this Agreement a revised
method of determining the number of shares of ESOP Preferred to
be offered to the Trustee for purchase pursuant to Section 1.6(e)
of the Recapitalization Agreement.  It is the intent of the
parties hereto that to the extent the number of shares of ESOP
Preferred are reduced under this Agreement, there shall be a
corresponding increase in the number of shares of Supplemental
ESOP Preferred, with the result being that the sum of the ESOP
Preferred and Supplemental ESOP Preferred, on both an annual and
cumulative basis, will be unchanged by this Agreement.
          
         3.  The purchases of ESOP Preferred expected to be
made by the ESOP Trustee in 1996, 1997, 1998, and 1999, shall be
determined as if Section 1.6(e) of the Recapitalization Agreement
provided as follows:

         '(e) At or about July 12, 1996, and at or about the
     next three following anniversaries of July 12, 1996 (each of
     the four July 12 dates a 'Measuring Date Anniversary'), the
     Company shall negotiate in good faith with the ESOP Trustee
     to reach an agreement under which the Company shall issue to
     the ESOP Trustee shares of ESOP Preferred at an agreed-upon
     price per share (for each applicable plan year, the
     'Purchase Price').  If such agreement is reached within 30
     days of any Measuring Date Anniversary, then, within five
     days thereafter, the Company shall sell to the ESOP Trustee,
     and the ESOP Trustee shall purchase from the Company,
     pursuant to an agreement substantially in the form of
     Exhibit A to this Agreement, a number of shares of ESOP
     Preferred (with respect to each such year, the 'Subsequent
     Shares'), which number of shares shall equal, for each such
     plan year, the Subsequent Year Release Shares (as defined)
     divided by the Subsequent Year Decimal (as defined).
           
         (i)    The term 'Subsequent Year Release Shares' shall
                mean, for each such plan year, the excess of

                (xx)  the product of

                      (A) 12/69ths of the Final Number and

                      (B)  the Revised Class 1 Decimal (as
                           defined below) over
                    
                (yy)  the number of Year 1 Remaining Shares and
                      Subsequent Year Remaining Shares (as
                      defined below) (collectively, 'Tail
                      Shares') scheduled to be released in such
                      plan year.
                    
         (ii)   The term 'Subsequent Year Decimal' shall be
                calculated separately for each such plan year and
                shall mean one minus the product of
                    
                (yy)  a fraction (expressed as a decimal) having
                      a numerator equal to the Dollar Amount and
                      a denominator equal to the Purchase Price
                      for the plan year in question, and
                    
                (zz)  the number of years and fractional years
                      from the end of the plan year for which
                      such shares are being issued to March 31,
                      2000.
                    
         (iii)  The term 'Revised Class 1 Decimal' shall mean
                the factor (not to exceed .7815) which is
                determined by the Company no later than each
                Measuring Date Anniversary.  The amount of the
                Revised Class 1 Decimal shall be the amount
                which is reasonably estimated to result in the
                number of Subsequent Year Release Shares which,
                when added to the Tail Shares scheduled to be
                released in such plan year, will maximize the
                Revised Class 1 Decimal consistent with (ww)
                satisfaction of the principles set forth in
                Section 1.6(l), (xx) achieving a high degree of
                certainty that the limits of Internal Revenue
                Code Section 415(c)(6) shall not be exceeded,
                (yy) avoiding an allocation of contributions
                which would cause all members of an Employee
                Group (as defined in the ESOP) to exceed the
                limits of Internal Revenue Code Section 415(c),
                and (zz) limiting the purchase of ESOP Preferred
                so that there can be allocated sufficient shares
                of Supplemental ESOP Preferred for each Employee
                Group to permit appropriate allocations in the
                Supplemental ESOP to individuals whose
                allocations in the ESOP reached the limit of
                Code Section 415(c).  The Company and its
                advisors shall, prior to each Measuring Date
                Anniversary, present to the Committee (as
                defined in the ESOP) the calculation of the
                Revised Class 1 Decimal, and the Committee shall
                review such calculation to verify that the
                Revised Class 1 Decimal was calculated according
                to the methodology described above.  It is the
                understanding of the parties hereto that in
                making the verification referred to in the
                preceding sentence, the members of the Committee
                are acting on behalf of the ALPA (in the case of
                the Committee members appointed by ALPA), the
                IAM (in the case of the Committee members
                appointed by the IAM) and the Company (in the
                case of the Committee member appointed by the
                Company), and are not acting as fiduciaries.  In
                making such verification, the members of the
                Committee appointed by ALPA shall, acting as a
                group, cast a single vote, the members of the
                Committee appointed by the IAM shall, acting as
                a group, cast a single vote, and the member
                appointed by the Company shall cast a single
                vote.  The calculation of the Revised Class 1
                Decimal shall only be considered verified if all
                three of such votes are cast in favor of
                verification.  If the Committee has not verified
                the calculation of the Revised Class 1 Decimal
                determined by the Company by a Measuring Date
                Anniversary, then the Revised Class 1 Decimal
                shall be determined pursuant to the provisions
                of this Agreement other than Section 1.6(e)
                (including Section 1.6(q), which generally
                contemplates that the Company, the IAM and ALPA
                will cooperate to modify the Class 1 Decimal).
                The parties agree that the result of the
                calculations described above for each plan year
                may be a range of values for the Revised Class 1
                Decimal, including but not limited to a value to
                be applicable to each possible Purchase Price.

          The Subsequent Year Release Shares for each such plan
     year shall be released from the ESOP suspense account and
     allocated to the accounts of ESOP participants as of the end
     of such plan year; provided, however, that by the due date
     for each contribution by the Company to be used by the ESOP
     Trustee for loan repayment, the Company shall in
     consultation with its advisers, make a reasonable estimate
     of the maximum contribution which can be made to Part A of
     the ESOP (as defined in the ESOP) consistent with (www)
     satisfaction of the principles set forth in Section 1.6(l),
     (xxx) achieving a high degree of certainty that the limits
     of Internal Revenue Code Section 415(c)(6) shall not be
     exceeded, (yyy) avoiding an allocation of contributions
     which would cause all members of an Employee Group to exceed
     the limits of Internal Revenue Code Section 415(c), and
     (zzz) limiting the purchase of ESOP Preferred so that there
     can be allocated sufficient shares of Supplemental ESOP
     Preferred for each Employee Group to permit appropriate
     allocations in the Supplemental ESOP to individuals whose
     allocations in the ESOP reached the limit of Code Section
     415(c).  The estimate of the Company referred to in the
     preceding sentence shall not be made by reconsidering the
     principles set forth in clauses (www) through (zzz), 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, and 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.  The balance of the
     Subsequent Shares for such plan year (the 'Subsequent Year
     Remaining Shares') shall be released from the ESOP suspense
     account and allocated to the accounts of ESOP participants
     in level installments for each full plan year (and prorated
     for the quarter ending March 31, 2000) remaining in the
     period from the January 1 immediately following such plan
     year through March 31, 2000.  Notwithstanding the foregoing,
     if (aaa) pursuant to this paragraph, the Company's
     contribution was not sufficient to cause all Subsequent Year
     Release Shares to be released from the ESOP suspense
     account, or (bbb) the Company's contribution caused all
     members of an Employee Group to reach the limit under
     Internal Revenue Code Section 415(c), thus causing the
     creation of a suspense account under Treasury Regulation
     Section 1.415-6(b)(6)(iii), then the Subsequent Year Release
     Shares which were not allocated to the accounts of ESOP
     participants in the year such shares were purchased by the
     ESOP Trustee shall be considered Subsequent Year Remaining
     Shares and shall be allocated in the next following year.

          For each of the third through sixth plan years of the
     Supplemental ESOP, there shall be credited to the accounts
     of Supplemental ESOP participants shares of Supplemental
     ESOP Preferred equal to the remainder of (aa) 12/69ths of
     the Final Number and (bb) the number of shares of ESOP
     Preferred allocated to the accounts of ESOP participants
     that year.'
    
          4.  The parties agree that the Company shall adopt the
fourth amendment to the ESOP and the fourth amendment to the
Supplemental ESOP in substantially the form attached hereto as
Exhibits B and C, and ALPA and the IAM hereby approve such
amendments.


          IN WITNESS WHEREOF, the parties have caused this
Agreement to be duly executed by their respective authorized
officers as of this 16th day of July, 1996.


                              UAL CORPORATION



                              By /s/ Douglas A. Hacker
                                 ---------------------
                              Its Senior Vice President and
                                  -------------------------
                                  Chief Financial Officer
                                  -----------------------


                              AIR LINE PILOTS ASSOCIATION,
                              INTERNATIONAL



                              By /s/ J. Randolph Babbitt
                                 -----------------------
                              Its President
                                  ---------

                              By /s/ Michael H. Glawe
                                 --------------------
                                 Michael H. Glawe
                                 MEC Chairman



                              INTERNATIONAL ASSOCIATION OF
                              MACHINISTS AND AEROSPACE WORKERS



                              By /s/ Kenneth W. Thiede
                                 ---------------------
                              Its President and General Chairman
                                  ------------------------------