Employee Stock Ownership Plan - UAL Corp.


     UAL CORPORATION

     EMPLOYEE STOCK OWNERSHIP PLAN

     (EFFECTIVE AS OF JULY 12, 1994) 



     TABLE OF CONTENTS  
                                                               PAGE

     PREAMBLE . . . . . . . . . . . . . . . . . . . . . . . . .    
     SECTION 1 Definitions. . . . . . . . . . . . . . . . . . .     
     SECTION 2 Plan Participation . . . . . . . . . . . . . . . 
     SECTION 3 Contributions. . . . . . . . . . . . . . . . . .  
     SECTION 4 Investment of Trust Fund . . . . . . . . . . . . 
     SECTION 5 Plan Accounting. . . . . . . . . . . . . . . . .  
     SECTION 6 Vesting. . . . . . . . . . . . . . . . . . . . .
     SECTION 7 Distributions. . . . . . . . . . . . . . . . . .
     SECTION 8 Voting and Certain Dispositions of Company Stock.
     SECTION 9 Rights, Restrictions and Options on Company Stock.
     SECTION 10 Dividends . . . . . . . . . . . . . . . . . . . . 
     SECTION 11 Administration. . . . . . . . . . . . . . . . . . 
     SECTION 12 Claims Procedure. . . . . . . . . . . . . . . . .   
     SECTION 13 Amendment and Termination . . . . . . . . . . . .   
     SECTION 14 Top-Heavy Provisions. . . . . . . . . . . . . . .   
     SECTION 15 Miscellaneous . . . . . . . . . . . . . . . . . .   


          UAL CORPORATION

          EMPLOYEE STOCK OWNERSHIP PLAN
          (EFFECTIVE AS OF JULY 12, 1994)

          PREAMBLE

          NATURE OF PLAN

               The Plan has been established to enable Eligible
          Employees of the Company and certain of its Affiliates to
          acquire stock ownership interests in the Company. The Plan
          is designed to invest exclusively in Company Stock (except
          for de minimis investments of cash pending investment in
          Company Stock or pending distribution to Participants) and,
          to the extent it is an employee stock ownership plan,
          primarily in "qualifying employer securities" (as defined in
          Code section 4975(e)(8)).

               Subject to Section 13, the Plan is intended to be
          permanent and to benefit Eligible Employees of the Company
          and its participating Affiliates on the Effective Date, as
          well as the Eligible Employees entering employment
          thereafter.

               The Plan consists of an employee stock ownership plan
          and a stock bonus plan. The employee stock ownership plan
          ("Part A" hereof) forms a part of the stock bonus plan,
          includes a money purchase pension plan and is intended to be
          qualified under Code sections 401(a) and 4975(e)(7). With
          respect to the portion of this Plan that is an employee
          stock ownership plan, as a single employee stock ownership
          plan: (i) the Initial Acquisition Loan and the Additional
          Acquisition Loans shall be a joint obligation of the
          component plans, (ii) the Plan shall not maintain separate
          Loan Suspense Accounts for the stock bonus and money
          purchase pension components, (iii) dividends paid on Company
          Stock in either such component plan shall be used to repay
          the Initial Acquisition Loan and the Additional Acquisition
          Loans to the extent provided in the Plan, and (iv) separate
          Accounts shall not be maintained for Participants with
          respect to such component plans. The Trust holding the
          assets of the Trust Fund is intended to be exempt from
          taxation under Code section 501(a).

               The Plan consists of two portions, a "leveraged"
          portion (Part A) that is intended to be an employee stock
          ownership plan and an "unleveraged" portion (Part B). Part A
          consists of both a stock bonus plan component and a money
          purchase pension plan component and Part B consists solely
          of a stock bonus plan component. Unless the context
          otherwise requires or unless specifically provided, all
          provisions of this Plan document shall apply to both Part A
          and Part B.

          TRANSACTION

               The Plan is part of an overall program (which includes
          the Supplemental Plan) resulting in the acquisition by
          Eligible Employees of a majority ownership stake in the
          Company as contemplated by the Agreement and Plan of
          Recapitalization, among UAL Corporation and Air Line Pilots
          Association, International and International Association of
          Machinists and Aerospace Workers, as amended (the
          "Recapitalization Agreement"). Specifically, on the
          Effective Date, Eligible Employees will become entitled to
          receive 55% of the equity and voting power of the Company
          through the Trust and the Supplemental Trust. The overall
          program will be accomplished by the allocation to individual
          Participant accounts over the Wage Investment Period of
          shares of Class 1 Non-Voting Preferred Stock, Class 2
          Non-Voting Preferred Stock and Voting Preferred Stock under
          the Trust and Supplemental Trust (or equivalent fictional
          book-entry shares under the Supplemental Plan), which shares
          shall, in the aggregate, be convertible into shares of
          Common Stock in an amount that represents 55% of the
          Company's equity and voting power measured as of the
          Effective Date. In addition, as described under the
          paragraph entitled "Additional Shares" below, depending on
          the market price per share of the Common Stock during the
          one-year period commencing on the Effective Date, up to an
          additional 8% of the Company's equity and voting power may
          be allocated to Participants' accounts under the Plan and
          the Supplemental Plan, bringing the total up to 63% of the
          equity and voting power of the Company.

               Of the overall Employee stake, 46.23% of the underlying
          shares, including the Additional Shares, if any, will be
          reserved for allocation to the ALPA Employee Group, 37.13%
          of the underlying shares will be reserved for allocation to
          the IAM Employee Group and 16.64% of the underlying shares
          will be reserved for allocation to the Management and
          Salaried Employee Group. 
           
               If there were no Code limitations on compensation and
          allocations, all shares to be acquired under the overall
          program would be delivered solely under Part A and such
          shares would be allocated to Participants of the respective
          Employee Groups over the Wage Investment Period in
          accordance with the percentages set forth in the preceding
          paragraph. Because such Code limitations will, in fact,
          operate to limit the annual benefits available under Part A,
          only a portion (expected to be approximately 78.15% of the
          underlying shares of Preferred Stock) will be acquired by
          the Trust from time to time on and after the Effective Date
          and allocated to Participants under Part A. To maximize
          certain employee stock ownership plan-related tax benefits,
          the Employee Groups may receive less than their overall
          equity ownership interest under Part A, with the balance to
          be received under Part B and the Supplemental Plan. Most of
          the shares allocable under Part B and the Supplemental Plan
          will be allocable to the ALPA Employee Group. (The preceding
          does not refer to Voting Preferred Stock; it will be
          contributed and allocated for all Employee Groups as
          described below under the paragraph entitled "Part B: Voting
          Preferred Stock.") 
           
               Shares not acquired under Part A will be allocated to
          appropriate Participant Accounts under Part B, subject to
          Code limitations, including Code sections 401(a)(4),
          401(a)(17) and 415. To the extent that shares cannot be
          allocated under Part B by reason of those Code limitations,
          such shares will be allocated to accounts of appropriate
          Participants in accordance with the provisions of the
          Supplemental Plan.

               The combined effect of the allocations under the
          overall program (Part A, Part B and the Supplemental Plan)
          will be to put each Participant, to the extent possible, in
          the position such Participant would have been had all
          shares, including the Additional Shares, if any, been
          delivered to and allocated under Part A.

          PART A

               With respect to Part A, it is intended that, on the
          Effective Date and from time to time thereafter, the Trustee
          will enter into the Initial Acquisition Loan and Additional
          Acquisition Loans on behalf of the Trust and use the
          proceeds thereof to purchase shares of Preferred Stock,
          representing approximately 42.9825% of the equity of the
          Company (subject to increase due to any Additional Shares
          issued). The Preferred Stock purchased will be Class 1
          Non-Voting Preferred Stock. The shares of Class 1 Non-Voting
          Preferred Stock will be allocated ratably, over the Wage
          Investment Period, to the Employee Groups in accordance with
          the following percentages:

               ALPA Employee Group - 31.759437%
               IAM Employee Group - 47.511196%
               Management and Salaried Employee Group - 20.729367%

          PART B: CLASS 2 NON-VOTING PREFERRED STOCK

               With respect to Part B, it is intended that the Company
          will contribute (or will cause the trustee of the
          Supplemental Trust to transfer), during the Wage Investment
          Period, shares of Class 2 Non-Voting Preferred Stock
          (including Additional Shares, if any) to the Plan. Subject
          to certain Code limitations, such shares will be allocated
          to Participants who receive less than their full entitlement
          under the overall program under Part A. In general, the
          formula for determining the amount of allocations under Part
          B to make up for the shortfall of Company Stock delivered
          under Part A is set forth in Section 5.4(c). 

          PART B: VOTING PREFERRED STOCK

               With respect to Part B, it is also intended that the
          Company will contribute, during the Wage Investment Period,
          shares of Voting Preferred Stock to the Plan. The Voting
          Preferred Stock contributed will be comprised of three
          classes. A separate class of Voting Preferred Stock,
          representing 25.4265% of the voting power of the Company,
          will be reserved for allocation to Participants who are
          members of the ALPA Employee Group ("Class P"); a separate
          class of Voting Preferred Stock, representing 20.4215% of
          the voting power of the Company, will be reserved for
          allocation to Participants who are members of the IAM
          Employee Group ("Class M"); and a separate class of Voting
          Preferred Stock, representing 9.152% of the voting power of
          the Company, will be reserved for allocation to Participants
          who are members of the Management and Salaried Employee
          Group ("Class S"). (The shares reserved above include shares
          reserved for allocation to the respective Employee Groups
          under the Supplemental Plan and Supplemental Trust.) Such
          percentages shall be appropriately adjusted in the event the
          initial Employee ownership percentage is increased (up to
          63% in the aggregate) as provided below. It is intended that
          the number of shares of Voting Preferred Stock to be
          allocated to each Participant's Account on each Valuation
          Date will equal the number of shares of Preferred Stock
          allocated to that Participant under Part A and Part B on
          such Valuation Date (taking into account the special
          Effective Date contribution and allocation described below).
          The terms of each class of Voting Preferred Stock provide
          that the shares outstanding at any particular time (in
          combination with any shares of Common Stock held by the
          Trustee or trustee under the Supplemental Trust allocable or
          allocated to the relevant Employee Group) will command the
          aggregate voting power reserved for such Employee Group.
          Thus, for example, if there are 100 shares of Class P
          outstanding, each such share will command 1% of the voting
          power reserved for the ALPA Employee Group (25.4265%,
          assuming 55% ownership by Employees). As additional shares
          of Class P are issued, the per share voting power will
          decrease proportionately.

               As a special Employer Contribution, one share of each
          of Class P, Class M and Class S will be contributed by the
          Company to Part B on the Effective Date. These three shares
          will be allocated, per capita, to the Accounts of the
          appropriate Participants under Part B on the Effective Date.

          SUPPLEMENTAL PLAN AND SUPPLEMENTAL TRUST

               To the extent that, in any Plan Year during the Wage
          Investment Period, shares of Company Stock cannot be
          allocated to a Participant's Account by reason of any Code
          limitations, including Code section 401(a)(17), Code section
          415 and Code section 401(a)(4), appropriate credits will be
          made to the accounts of the affected Participants under the
          Supplemental Plan (attached hereto as Exhibit A) in
          accordance with the terms thereof and shares of Voting
          Preferred Stock (and in certain circumstances, Class 2
          Non-Voting Preferred Stock) used to satisfy the relevant
          credits will be held in the Supplemental Trust (attached
          hereto as Exhibit B) in accordance with the terms thereof
          for the benefit of the affected Participants.

          PART B: FLOWBACK

               During and after the Wage Investment Period, to the
          extent that the allocation of shares of Company Stock under
          the Plan for any Participant was limited in a prior Plan
          Year by reason of the limitations of Code section
          401(a)(17), Code section 415 or Code section 401(a)(4) (with
          the result that the Participant received corresponding
          credits under the Supplemental Plan), it is intended that
          the Company will contribute (or the Company will cause the
          trustee of the Supplemental Trust to transfer) to such
          Participant's Account shares of Class 2 Non-Voting Preferred
          Stock and shares of Voting Preferred Stock, as the case may
          be, in a subsequent Plan Year, and that such shares will be
          allocated under this Plan to the Accounts of the affected
          Participants in accordance with the terms hereof, subject to
          any applicable Code limitations as applied to the subsequent
          Plan Year (and corresponding debits will be made under the
          Supplemental Plan).

          ADDITIONAL SHARES:

               Depending on the fair market value per share of the
          Common Stock during the one-year period commencing on the
          Effective Date, a number of additional shares determined in
          accordance with Section 1.6 and Section 1.10 of the
          Recapitalization Agreement will be allocated to
          Participants' Accounts under the Plan and participants'
          accounts under the Supplemental Plan over the remainder of
          the Wage Investment Period. Such number of shares of Company
          Stock will be allocated to the Employee Groups in accordance
          with the percentages specified in the paragraph above
          entitled "Transaction." 

               In general, 78.15% of the Additional Shares which are
          Preferred Stock will be Class 1 Non-Voting Preferred Stock;
          provided, however, that the portion of the Additional Shares
          attributable to Preferred Stock allocated as of December 31,
          1994 will be Class 2 Non-Voting Preferred Stock contributed
          to Part B or allocated as credits under the Supplemental
          Plan as of December 31, 1994. Except as described in the
          foregoing proviso, it is intended that such Additional
          Shares of Class 1 Non-Voting Preferred Stock will increase,
          on a pro rata basis, the number of such shares acquired
          pursuant to each Additional Acquisition Loan. Unless the
          parties agree otherwise, these Class 1 shares will be
          allocated over the remainder of the Wage Investment Period
          in accordance with the percentages set forth under Part A
          above.

               Any Additional Shares not sold to the Trustee pursuant
          to Part A will be contributed by the Company to Part B or
          credited to the Supplemental Plan during the remainder of
          the Wage Investment Period. Subject to certain Code
          limitations, such shares will be allocated to Participants
          who receive less than their full entitlement, giving effect
          to the allocation of the Additional Shares, of shares of
          Class 1 Non-Voting Preferred Stock under Part A. To the
          extent possible, the formula in Section 5.4(c) will be
          applied by assuming all Additional Shares (other than the
          shares of Voting Preferred Stock) had been sold to the Trust
          under Part A on the Effective Date and allocated ratably
          over the following 69 months.

          SECTION 1

          DEFINITIONS

               In this Plan (including the preamble), whenever the
          context so indicates, the singular or plural number and the
          masculine or feminine gender shall be deemed to include the
          other, the terms "he," "his," and "him" shall refer to a
          Participant or Beneficiary, as the case may be, and, except
          as otherwise provided, or unless the context otherwise
          requires, the capitalized terms shall have the following
          meanings:

                    (a) "Account" or "Accounts" mean a Participant's
               or Beneficiary's ESOP Stock Account and/or his ESOP
               Cash Account, as the context so requires.

                    (b) "Acquisition Loan" means a loan (or other
               extension of credit, including an installment
               obligation to a party in interest (as defined in ERISA
               section 3(14))) incurred by the Trustee in connection
               with the purchase of Company Stock.

                    (c) "Additional Acquisition Loans" means the
               Acquisition Loans entered into from time to time after
               the Effective Date between the Trustee and the Company
               as contemplated by Section 1.6 of the Recapitalization
               Agreement.

                    (d) "Additional Shares" means the number of
               additional shares, if any, of Company Stock to be
               issued by the Company in accordance with Section 1.10
               of the Recapitalization Agreement. Any reference herein
               to additional shares shall only be applicable when, if
               and to the extent that additional shares are determined
               to be issuable in accordance with Section 1.10 of the
               Recapitalization Agreement.

                    (e) "Affiliate" means any corporation, trade or
               business, which, at the time of reference, is together
               with the Company, a member of a controlled group of
               corporations, a group of trades or businesses (whether
               or not incorporated) under common control or an
               affiliated service group, as described in Code sections
               414(b), 414(c) and 414(m), respectively, or any other
               organization treated as a single employer under Code
               section 414(o); provided, however, that, where the
               context so requires, the term "Affiliate" shall be
               construed to give full effect to the provisions of Code
               sections 409(l)(4) and 415(h).

                    (f) "ALPA" means the Air Line Pilots Association,
               International. 

                    (g) "ALPA Employee Group" means Eligible Employees
               in classifications represented by ALPA under the
               Railway Labor Act who are either listed on the Pilots'
               System Seniority List or Second Officer Eligibility
               Seniority List.

                    (h) "Beneficiary" means the person or persons to
               whom a deceased Participant's benefits are payable
               under the Plan all as provided in Section 7.9.

                    (i) "Board of Directors" means the board of
               directors of the Company. 

                    (j) "Class 1 Non-Voting Preferred Stock" means the
               shares of Class 1 ESOP Convertible Preferred Stock
               issued by the Company and allocated under Part A.

                    (k) "Class 2 Non-Voting Preferred Stock" means the
               shares of Class 2 ESOP Convertible Preferred Stock
               issued by the Company and allocated under Part B. Any
               reference to such shares credited under the
               Supplemental Plan shall be deemed to be a reference to
               fictional book-entry shares of Class 2 Non-Voting
               Preferred Stock credited under the Supplemental Plan. 

                    (l) "Code" means the provisions of the Internal
               Revenue Code of 1986, as amended, and all successor
               laws thereto. Where the Plan refers to a particular
               section of the Code, such reference shall also apply to
               any successor to that section.

                    (m) "Common Stock" means common stock issued by
               the Company that meets the requirements of Code section
               409(l), which on the Effective Date includes the common
               stock that may be received upon the conversion of the
               Preferred Stock and Voting Preferred Stock.

                    (n) "Company" means UAL Corporation and any
               successor corporation or entity to the Company by
               merger, consolidation or otherwise. 

                    (o) "Company Stock" means Voting Preferred Stock,
               Common Stock and/or Preferred Stock, as the context so
               requires.

                    (p) "Compensation" means (i) the total cash
               compensation 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 (ii) elective
               deferrals under a plan meeting the requirements of Code
               section 401(k) or Code section 125 for such Plan Year,
               but excluding reimbursement of moving expenses,
               relocation allowances, housing allowances,
               reimbursement of membership costs and dues, other
               expense reimbursement payments and allowances,
               severance pay or other special payments relating to
               termination of employment by retirement or otherwise
               and cash payments in respect of stock appreciation
               rights. With respect to the Management and Salaried
               Employee Group only, Compensation shall not include pay
               received for vacation time that was accrued but not
               actually taken as vacation before termination of
               employment by retirement or otherwise. A Participant's
               Compensation shall not exceed $150,000 (as adjusted
               pursuant to Code section 401(a)(17)); provided,
               however, that with respect to Part A, Compensation of a
               Participant who is a member of the ALPA Employee Group
               shall be limited to an amount equal to four times the
               dollar limitation under Code section 415(c)(1)(A) (as
               adjusted pursuant to Code section 415). Compensation
               for services performed prior to July 13, 1994 or after
               the end of the Wage Investment Period shall not be
               taken into account under the Plan, except for purposes
               of applying any Code limitations. 

                    (q) "Control Transaction" means (a) any tender
               offer or exchange offer for Company Stock or any other
               opportunity or series of opportunities for the Plan to
               dispose of (or convert in connection with a sale,
               exchange or disposition) at least 3% of its Company
               Stock (other than conversions or dispositions to
               effectuate distributions or diversification elections
               under the Plan), and (b) any transaction or series of
               related transactions pursuant to which any person or
               group (as defined in Rule 13d-3 under the Exchange Act)
               acquires or seeks to acquire, directly or indirectly,
               "control" (as defined in the Exchange Act) of the
               Company or of all or a substantial portion of the
               tangible or intangible assets of the Company and its
               subsidiaries, whether by merger, consolidation, share
               exchange, tender offer, exchange offer, sale, lease,
               exchange, conversion, voting trust, proxy or otherwise.
               For purposes of Plan provisions relating to a "Control
               Transaction," "person" means an individual,
               corporation, association, partnership, joint venture,
               limited liability company, trust, estate,
               unincorporated organization, governmental authority,
               judicial entity or other entity.

                    (r) "Effective Date" means July 12, 1994.

                    (s) "Eligible Employee" means any Employee of an
               Employer (other than any employee who is not a member
               of an Employee Group and any "leased employee" (as
               defined in Code section 414(n))), subject to the
               following: 

                         (i) if an Employee is included in a unit of
                    Employees covered by a collective bargaining
                    agreement, he shall not be an Eligible Employee
                    unless the applicable collective bargaining
                    agreement expressly provides that he shall be
                    eligible to participate in this Plan. On the
                    Effective Date, members of the ALPA Employee
                    Group, the IAM Employee Group, and, if the
                    Transport Workers Union collective bargaining
                    agreement so provides, the meteorologist Employees
                    who are members of a group represented by the
                    Transport Workers Union (these meteorologists are
                    members of the Management and Salaried Employee
                    Group) are Eligible Employees;

                         (ii) an Employee shall not be an Eligible
                    Employee if he is a non-resident alien with no
                    earned income from U.S. sources; 
           
                         (iii) an Employee shall not be an Eligible
                    Employee as of the date his Compensation no longer
                    reflects all of the wage concessions contemplated
                    as part of the recapitalization of UAL effective
                    July 12, 1994; and

                         (iv) with respect to an Employee who is a
                    member of the Management and Salaried Employee
                    Group, the Employer may provide in a resolution of
                    its board of directors, additional limitations for
                    participation with the consent of the Board of
                    Directors; provided, however, that any such
                    limitation shall not have the effect of reducing
                    the amount of Company Stock intended to be
                    allocated to the Management and Salaried Employee
                    Group under Part A or affect the method or pace of
                    allocations of Company Stock in a manner that
                    would adversely affect the Plan's projected
                    ability to meet the requirements of Code section
                    415(c)(6).

                    (t) "Employee" means any person, including an
               officer or director, who is actually performing
               services for the Company or any of its Affiliates in a
               common-law, employer-employee relationship and treated
               as an employee on the payroll records and any "leased
               employee" (within the meaning of Code section 414(n)).

                    (u) "Employee Group" means each of the ALPA
               Employee Group, the IAM Employee Group and the
               Management and Salaried Employee Group. 

                    (v) "Employer" means the Company or any of its
               Affiliates (or a division or business unit thereof)
               that has adopted the Plan with the consent of the Board
               of Directors.

                    (w) "Employer Contribution" means the amount
               contributed, whether in cash or in kind, by each
               Employer pursuant to the provisions of Section 3.1.

                    (x) "Entry Date" means, with respect to each
               Eligible Employee employed on the Effective Date, the
               Effective Date, and with respect to each Eligible
               Employee employed after the Effective Date, (i) in the
               case of members of the ALPA Employee Group, the
               employment commencement date (or reemployment
               commencement date), (ii) in the case of members of the
               IAM, the first day of the first payroll period
               coincident with or next following the date the Eligible
               Employee becomes a member of the IAM Employee Group,
               and (iii) in the case of members of the Management and
               Salaried Employee Group, the first day of the first
               payroll period coincident with or next following the
               anniversary date of the Eligible Employee's employment
               commencement date (or reemployment commencement date);
               provided, however, that if such Eligible Employee's
               employment with the Employers terminates before he
               becomes a Participant and such Eligible Employee
               returns to the employ of an Employer within one year of
               such termination, the Entry Date shall be the first day
               of the first payroll period coincident with or next
               following the later of (i) the reemployment
               commencement date or (ii) the anniversary date of such
               Eligible Employee's employment commencement date. Any
               Participant whose employment with the Employers
               terminates and who returns to the employ of an Employer
               as an Eligible Employee shall become a Participant
               immediately. 

                    (y) "ERISA" means the provisions of the Employee
               Retirement Income Security Act of 1974, as amended, and
               all successor laws thereto. Where the Plan refers to a
               particular section of ERISA, such reference shall also
               apply to any successor to that section.

                    (z) "ESOP Cash Account" means the account
               established and maintained in the name of each
               Participant or Beneficiary to reflect his share of the
               Trust Fund, other than Company Stock.

                    (aa) "ESOP Committee" means the committee
               appointed to administer the Plan pursuant to Section
               11.

                    (ab) "ESOP Stock Account" means the account
               established and maintained in the name of each
               Participant or Beneficiary to reflect his share of
               Company Stock.

                    (ac) "Exchange Act" means the Securities Exchange
               Act of 1934, as amended.

                    (bb) "Financed Shares" means shares of Company
               Stock acquired by the Trustee with the proceeds of an
               Acquisition Loan, which shall constitute "qualifying
               employer securities" under Code section 409(l) and any
               shares of Company Stock received upon conversion or
               exchange of such shares. 

                    (cc) "IAM" means the International Association of
               Machinists and Aerospace Workers.

                    (dd) "IAM Employee Group" means non-probationary
               regular Employees (other than Employees employed on a
               temporary basis) who are both (i) classified by the
               Company as Mechanic and Related Employees, Ramp and
               Stores Employees, Food Services Employees, Security
               Officers, Dispatchers, or Communications Employees and
               (ii) members of a group of employees represented by the
               International Association of Machinists and Aerospace
               Workers, AFL-CIO.

                    (ee) "Initial Acquisition Loan" means the
               Acquisition Loan or Acquisition Loans entered into on
               the Effective Date between the Trustee and the Company
               pursuant to the Preferred Stock Purchase Agreement.

                    (ff) "Loan Suspense Account" means the suspense
               account in the Trust to which Financed Shares are
               initially credited prior to release for allocation to
               Participants' ESOP Stock Accounts. Subaccounts shall be
               maintained to reflect Financed Shares acquired with the
               Initial Acquisition Loan and each applicable Additional
               Acquisition Loan.

                    (gg) "Management and Salaried Employee Group"
               means Eligible Employees who perform the functions
               performed by the salaried and managerial Employees on
               the Effective Date (including any functions that such
               Employees will perform in the future). Furthermore,
               Eligible Employees who are meteorologists represented
               by the Transport Workers Union are members of the
               Management and Salaried Employee Group. 

                    (hh) "Normal Retirement Date" means (i) in the
               case of a Participant who is a member of the ALPA
               Employee Group, the date on which such Participant
               attains age 60, and (ii) in the case of any other
               Participant, the date on which such Participant attains
               age 65.

                    (ii) "Part A" means the portion of the Plan under
               which benefits are provided for Participants through
               the purchase of shares of Class 1 Non- Voting Preferred
               Stock acquired with the proceeds of the Initial
               Acquisition Loan and Additional Acquisition Loans.

                    (jj) "Part B" means the portion of the Plan under
               which benefits are provided for Participants through
               the contribution of shares of Class 2 Non-Voting
               Preferred Stock and Voting Preferred Stock by the
               Company or through the transfer of any such shares from
               the Supplemental Trust. 

                    (kk) "Participant" means any Eligible Employee who
               has become a Participant in accordance with Section 2
               or any other person with an Account balance under the
               Plan.

                    (ll) "Plan" means the UAL Corporation Employee
               Stock Ownership Plan, consisting of Part A and Part B,
               as amended from time to time. The Trust created in
               connection with the Plan shall be incorporated in, and
               form a part of, the Plan.

                    (mm) "Plan Year" means the calendar year;
               provided, however, that the initial Plan Year shall
               commence on the Effective Date and end on December 31,
               1994.

                    (nn) "Preferred Stock" means the Class 1
               Non-Voting Preferred Stock and the Class 2 Non-Voting
               Preferred Stock.

                    (oo) "Preferred Stock Purchase Agreement" means
               either (i) the stock purchase agreement, dated as of
               March 25, 1994, as amended, effective July 12, 1994, by
               and between the Company and the Trustee pursuant to
               which shares of Class 1 Non-Voting Preferred Stock will
               be purchased by the Trustee for allocation under Part A
               and/or (ii) the stock purchase agreements by and
               between the Company and the Trustee pursuant to which
               Additional Shares of Class 1 Non-Voting Preferred Stock
               will be purchased by the Trustee in connection with
               Additional Acquisition Loans for allocation under Part
               A, as the context so requires. 

                    (pp) "Supplemental Plan" means the UAL Corporation
               Supplemental ESOP, effective July 12, 1994. 

                    (qq) "Supplemental Trust" means the UAL
               Corporation Supplemental ESOP Trust, effective July 12,
               1994. 

                    (rr) "Total Disability" means that, in the opinion
               of a physician selected by the ESOP Committee, the
               Participant is permanently incapable of performing
               services for his Employer or any of its Affiliates due
               to a disability; provided, however, that for any member
               of the ALPA Employee Group, "Total Disability" shall
               have the meaning ascribed thereto in the United Air
               Lines, Inc. Pilots' Fixed Benefit Retirement Income
               Plan.

                    (ss) "Trust" means the UAL Corporation Employee
               Stock Ownership Plan Trust created in connection with
               the establishment of the Plan. 

                    (tt) "Trust Agreement" means the trust agreement
               establishing the Trust.

                    (uu) "Trust Fund" means the assets held in the
               Trust for the benefit of the Participants and their
               Beneficiaries.

                    (vv) "Trustee" means the trustee or trustees from
               time to time in office under the Trust Agreement.

                    (ww) "Valuation Date" means the last day of each
               Plan Year, April 12, 2000 (except for Participants in
               the IAM Employee Group) and July 12, 2000 for
               Participants in the IAM Employee Group and any other
               date selected by the ESOP Committee as necessary for
               the equitable operation of the Plan.  

                    (xx) "Voting Preferred Stock" means the shares of
               each class of ESOP Voting Junior Preferred Stock issued
               by the Company. Such preferred stock consists of Class
               P, Class M and Class S.

                    (yy) "Wage Investment" means, for a member of the
               IAM Employee Group, the sum of:

                         (i) The product of (A) the number of hours
                    for which the Participant is compensated during a
                    Plan Year, multiplied by (B) the difference
                    between the "book rate of pay" as in effect
                    immediately prior to the Effective Date and the
                    "actual rate of pay" as in effect on the Effective
                    Date for services rendered during a Plan Year;
                    plus

                         (ii) the sum of the following: (A) the amount
                    determined under item (i) times 7.6% (which
                    represents the Employers' portion of the FICA
                    tax), (B) the amount determined under item (i)
                    times .46% (which represents the Employers'
                    portion of the FUTA tax), (C) the amount
                    determined under item (i) times .05% (which
                    represents the Employers' contribution for long
                    term disability coverage), and (D) the amount
                    determined under item (i) times .4% (which
                    represents the Employers' contribution for life
                    insurance coverage); provided, however, that in
                    the case of each of the items (A) through (D)
                    above, the members of the ESOP Committee appointed
                    by the IAM may require the substitution of an
                    alternative percentage which they deem appropriate
                    and which is uniformly applicable to each member
                    of the IAM Employee Group; plus 

                         (iii) the book rate of pay as in effect
                    immediately prior to the Effective Date for each
                    hour, or fraction thereof, of lunch (or other
                    meal) periods multiplied by the number of days
                    services are rendered during a Plan Year.

               For purposes hereof, "book rate of pay" means the
          hourly rate of pay including increases due to overtime,
          premium pay and shift differentials that would have been
          paid to each IAM Employee Group member on the day
          immediately preceding the Effective Date, and as adjusted
          over the Wage Investment Period to account solely for
          increments due based on changes in the scale or step for
          each such member, and "actual rate of pay" means the hourly
          rate of pay for each IAM Employee Group member on the
          Effective Date, as adjusted over the Wage Investment Period
          to account solely for increments based on changes in the
          scale or step and not on account of negotiated changes
          effective during the Wage Investment Period. If a member of
          the IAM Employee Group changes job classifications (for
          example, due to a promotion), then such member's book rate
          of pay and actual rate of pay shall, following the change of
          job classifications, be determined by reference to the
          member's new job classification. The calculation of the Wage
          Investment shall be made by using the information reasonably
          available to the Employers under the Employers'
          recordkeeping and payroll systems. The Wage Investment may
          be calculated by using reasonable estimates, and the members
          of the ESOP Committee appointed by the IAM shall adopt any
          such reasonable estimates as are necessary for the Wage
          Investment to be determined. Such members of the ESOP
          Committee shall consult with the Employers to calculate the
          Wage Investment. Pursuant to Section 11.4, the Employers
          shall furnish the members of the ESOP Committee such data
          and information as may be reasonably required to calculate
          the Wage Investment and to formulate such reasonable
          estimates. The determination of the Wage Investment based
          upon such estimates shall be final and binding for all
          purposes hereunder.

                    (zz) "Wage Investment Period" means the period
               commencing on July 13, 1994 and ending on April 12,
               2000 (July 12, 2000, for members of the IAM Employee
               Group).

          SECTION 2

          PLAN PARTICIPATION

               2.1 Eligibility for Participation. Subject to the
          conditions and limitations of the Plan, each Eligible
          Employee of an Employer shall become a Participant on the
          applicable Entry Date.

               2.2 Participation Not Guarantee of Employment.
          Participation in the Plan does not constitute a guarantee or
          contract of employment and will not give any Employee the
          right to be retained in the employ of his Employer or any of
          its Affiliates nor any right or claim to any benefit under
          the terms of the Plan unless such right or claim has
          specifically accrued under the terms of the Plan. 
           
               2.3 Transferred Participants. If a Participant
          transfers from one Employee Group to another Employee Group,
          the ESOP Committee shall maintain separate Accounts for such
          Participant, such Accounts reflecting such Participant's
          participation in the Plan as a member of the respective
          Employee Groups. 

          SECTION 3

          CONTRIBUTIONS

               3.1  Employer Contributions. Subject to the conditions
          and limitations of the Plan, for each Plan Year, the
          Employers shall contribute to the Trust cash equal to, or
          Company Stock having an aggregate fair market value equal
          to, such amount, if any, as the respective boards of
          directors of the Employers shall determine by resolution;
          provided, however, that:

                    (a) Part A.
                
                         (i) The Company shall contribute to Part A an
                    amount in cash equal to the amount required to
                    enable the Trustee (together with dividends used
                    to repay the Initial Acquisition Loan and the
                    Additional Acquisition Loans in accordance with
                    Section 10) to pay any principal and interest on
                    the Initial Acquisition Loan and the Additional
                    Acquisition Loans payable during the Plan Year. Of
                    the contribution amount required to enable the
                    Trustee to discharge the aggregate principal and
                    interest on such indebtedness, 60% shall be made
                    to the money purchase pension plan component of
                    Part A of the Plan. The balance of the required
                    contribution amount shall be made to the stock
                    bonus plan component of Part A of the Plan. The
                    Trustee shall apply such money purchase pension
                    plan component contributions to repay the
                    principal on each of the respective Acquisition
                    Loans in proportion to the excess of the principal
                    due on such Acquisition Loan for the Plan Year
                    over the dividends available to repay the
                    principal on such Acquisition Loan.

                         (ii) In lieu of the foregoing, the Company
                    may forgive an amount of indebtedness equal to the
                    required Employer Contribution (or any portion
                    thereof).
                
                         (iii) On the Effective Date, the Company
                    shall contribute an amount in cash equal to the
                    aggregate par value of the Company Stock to be
                    acquired under the Initial Acquisition Loan. In
                    addition, the Company shall contribute an amount
                    in cash equal to the aggregate par value of the
                    Company Stock, if any, to be acquired under each
                    Additional Acquisition Loan. Such contributions
                    shall first be divided, pro rata, among the
                    Employee Groups in accordance with Section
                    5.4(a)(i)(A), and then shall be allocated to the
                    ESOP Cash Accounts of Participants as follows: (A)
                    in the case of the ALPA Employee Group and the
                    Management and Salaried Employee Group, according
                    to the Compensation paid to such Participants in
                    such Employee Group for the Plan Year, and (B) in
                    the case of the IAM Employee Group, according to
                    Wage Investments of such Participants for the Plan
                    Year. Such contribution shall be used by the
                    Trustee as partial consideration for the purchase
                    of shares of Class 1 Non-Voting Preferred Stock
                    under the applicable Preferred Stock Purchase
                    Agreement, and the ESOP Cash Accounts of the
                    Participants shall be charged accordingly. Shares
                    of Class 1 Non-Voting Preferred Stock equal in
                    value (based on the prices per share paid by the
                    Trustee under the applicable Preferred Stock
                    Purchase Agreement) to the amount of such
                    contribution shall be allocated, as of the last
                    day of the applicable Plan Year, from the shares
                    purchased under the applicable Preferred Stock
                    Purchase Agreement to the ESOP Stock Accounts of
                    the Participants, pro rata, according to the
                    allocations of such contribution above.

                    (b) Part B.
                
                         (i) On the Effective Date, the Company shall
                    contribute to Part B, as a special Employer
                    Contribution, one share of each of Class P, Class
                    M and Class S.
                
                         (ii) As soon as practicable after the end of
                    each Plan Year, the Company shall contribute (or
                    shall cause the trustee of the Supplemental Trust
                    to transfer) to Part B shares of Class 2
                    Non-Voting Preferred Stock and shares of Voting
                    Preferred Stock in accordance with Section
                    5.4(c)(vii); provided, however, that any shares of
                    Company Stock transferred by the trustee of the
                    Supplemental Trust in respect of such obligation
                    shall satisfy, to the extent of such transfer, the
                    Company's obligation under this Section 3.1(b).
                    Such contributions may not be used to repay
                    Acquisition Loan indebtedness and shall be made to
                    the stock bonus plan component of the Plan.

                         (iii) If cash dividends have been paid to the
                    holders of Common Stock during any Plan Year and
                    if dividends are applied to repay the Initial
                    Acquisition Loan or any Additional Acquisition
                    Loan pursuant to Section 10 during that Plan Year,
                    the Company shall make an additional Employer
                    Contribution to Part B in the amount, if any, set
                    forth in the next sentence as soon as practicable
                    after the last day for that Plan Year (and for the
                    purpose of this clause (iii), "Plan Year" shall be
                    defined to include only the period from the
                    Effective Date to 12/31/94, the five 12-month
                    periods ending 12/31/95 through 12/31/99, and the
                    three-month period ending 3/31/2000). The amount
                    of such contribution shall equal the excess of A
                    plus B over C; where A equals the least of:

                              (I) the cash dividends (excluding
                         dividends that constitute Participating
                         Dividends and Extraordinary Distributions
                         with respect to the outstanding Class 1
                         Non-Voting Preferred Stock) that would have
                         been received by the Plan during that Plan
                         Year if the outstanding Class 1 Non- Voting
                         Preferred Stock had been converted into
                         Common Stock immediately prior to each
                         dividend record date, which amount shall be
                         reduced by the excess, if any, of the amount
                         described in clause (II) below over the
                         amount described in clause (III) below;

                              (II) the Fixed Dividends that have been
                         paid on the Class 1 Non-Voting Preferred
                         Stock during that Plan Year; and
                
                              (III) the amount of the cash dividends
                         used to repay the Initial Acquisition Loan
                         and the Additional Acquisition Loans pursuant
                         to Section 10.1(a) during such Plan Year;
                
                    B equals the cash dividends (excluding dividends
                    that constitute Extraordinary Distributions with
                    respect to the Class 1 Non-Voting Preferred Stock)
                    that would have been received by the Plan during
                    the Plan Year if the Class 1 Non-Voting Preferred
                    Stock contemplated for future sale to this Plan as
                    part of the future Additional Acquisition Loans
                    had been, immediately prior to each dividend
                    record date, sold to this Plan and converted into
                    Common Stock. The number of shares of Class 1
                    Non-Voting Preferred Stock contemplated for future
                    sale shall equal 13,813,282 (adjusted for the
                    issuance of Additional Shares of Class 1
                    Non-Voting Preferred Stock) reduced by the number
                    of shares of Class 1 Non-Voting Preferred Stock
                    sold to this Plan prior to the dividend record
                    date; and 

                    C equals the amount of cash contributions
                    previously made pursuant to this clause (iii) with
                    respect to such Plan Year.

          For the purposes of the Plan, "Participating Dividends",
          "Extraordinary Distributions" and "Fixed Dividends" shall
          have the meanings ascribed to such terms in the Certificate
          of Incorporation of the Company, Article Fourth, Part II
          relating to Class 1 Non-Voting Preferred Stock.

               3.2  Limitation on Contributions. In no event may any
          Employer Contributions under Section 3.1 for any Plan Year
          exceed the maximum amount deductible as an expense for
          federal income tax purposes under Code section 404;
          provided, however, that if Employer Contributions are so
          limited, appropriate arrangements will be made in accordance
          with Section 1.6(l) of the Recapitalization Agreement to
          protect the substantive rights of each Employee Group
          (hereinafter "Appropriate Arrangements").

               3.3  Timing of Contributions. For each Plan Year,
          Employer Contributions shall be due no later than the time
          prescribed for filing the Employer's federal income tax
          return for that Plan Year, including any extensions of time;
          provided, however, that Employer Contributions shall be made
          at such times as to enable the Trustee to meet its repayment
          obligations under the documents governing the Initial
          Acquisition Loan, the Additional Acquisition Loans or as
          otherwise required by the terms of the Plan.

               3.4  Participant Contributions. Contributions by
          Participants are neither required nor permitted.

          SECTION 4

          INVESTMENT OF TRUST FUND

               4.1  Exclusive Benefit of Participants. All Employer
          Contributions, Company Stock acquired with Employer
          Contributions and with proceeds of Acquisition Loans, and
          dividends and distributions thereon, shall become a part of
          the Trust Fund and shall be held and disbursed by the
          Trustee in accordance with the provisions of the Plan and
          Trust Agreement. No person shall have any interest in or
          right to assets held in the Trust Fund except as provided in
          the Plan and Trust Agreement. The Trust Fund shall be held
          for the exclusive benefit of the Participants and their
          Beneficiaries, and shall be used solely to pay benefits to
          such persons. The Trust Fund shall not revert to the benefit
          of the Company or any of its Affiliates, except as provided
          in Section 15.2. 
           
               4.2  Investment in Company Stock. The Trust Fund shall
          be invested exclusively in shares of Company Stock, subject
          to the Trustee's power to hold cash pending investment in
          Company Stock or pending distribution to Participants, and,
          accordingly, the Trustee may invest and hold up to 100% of
          the Trust Fund in Company Stock.

               4.3  Acquisition Loans. In respect of Part 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. Each Acquisition Loan shall meet all applicable legal
          requirements, including those set forth under Code section
          4975 and ERISA section 408. 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 bear to the sum of
          principal payments during 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.

               4.4  Fiduciary Concerns. With respect to the exercise
          of any fiduciary responsibility with respect to the Plan or
          Trust, including, without limitation, the voting, sale,
          exchange, other disposition or conversion of Company Stock,
          the relevant fiduciary may, to the extent permitted by law,
          take into consideration any relevant economic factors
          affecting the interests of current and future Participants
          (and Beneficiaries), including, but not limited to, the
          prospect for continued Employee enfranchisement through the
          voting power of Company Stock held in the Plan, the prospect
          for future benefits under the Plan as a result of the
          prospective release and allocation of Company Stock held in
          the Loan Suspense Account and the prospect for future
          employment with the Company and its Affiliates.

          SECTION 5

          PLAN ACCOUNTING

               5.1  Accounting for Allocations. The ESOP Committee
          shall establish the Accounts (and sub-accounts, if deemed
          necessary) for each Participant, and the accounting
          procedures for the purpose of making the allocations to the
          Participants' Accounts provided for in this Section 5. The
          ESOP Committee shall maintain adequate records of the cost
          basis of shares of Company Stock allocated to each
          Participant's ESOP Stock Account. The ESOP Committee also
          shall keep separate records of Financed Shares attributable
          to each Acquisition Loan and of Employer Contributions (and
          of any earnings thereon) made for the purpose of enabling
          the Trust to repay any Acquisition Loan. From time to time,
          the ESOP Committee may modify its accounting procedures for
          the purposes of achieving equitable and nondiscriminatory
          allocations among the Accounts of Participants, in
          accordance with the provisions of this Section 5 and the
          applicable requirements of the Code and ERISA. In accordance
          with Section 11, the ESOP Committee may delegate the
          responsibility for maintaining Accounts and records. 
           
               5.2  Allocation and Crediting of Participants' ESOP
          Stock Accounts. As of each Valuation Date, the ESOP
          Committee shall:

                    (a) First, charge to each Participant's ESOP Stock
               Account all distributions and payments made to him
               since the last preceding Valuation Date that have not
               been previously charged;

                    (b) Next, credit to each Participant's ESOP Stock
               Account the shares of Company Stock, if any, that have
               been purchased with amounts from his ESOP Cash Account
               since the last preceding Valuation Date, and adjust
               such ESOP Cash Account in accordance with the
               provisions of Section 5.3; and 

                    (c) Finally, allocate and credit to each
               Participant's ESOP Stock Account the shares of Company
               Stock representing Employer Contributions made in the
               form of Company Stock and the number of Financed Shares
               released under Section 4.3 that are to be allocated and
               credited as of that date in accordance with the
               provisions of Section 5.4. 
           
               5.3  Allocation and Crediting of Participants' ESOP
          Cash Accounts. As of each Valuation Date, the ESOP Committee
          shall adjust the ESOP Cash Accounts to reflect activity
          since the last preceding Valuation Date as follows: 

                    (a) First, charge to each Participant's ESOP Cash
               Account all distributions and payments made to him that
               have not been previously charged;

                    (b) Next, if Company Stock is purchased with
               assets from a Participant's ESOP Cash Account, such
               shares shall be credited to the ESOP Stock Account of
               such Participant, and the Participant's ESOP Cash
               Account shall be charged accordingly;

                    (c) Next, subject to the dividend provisions of
               Section 10, the ESOP Committee shall also credit to the
               ESOP Cash Account of each Participant any cash
               dividends paid to the Trustee on shares of Company
               Stock held in that Participant's ESOP Stock Account (as
               of the record date for such cash dividends) and
               dividends paid on shares of Company Stock held in the
               Loan Suspense Account that have not been used to repay
               any Acquisition Loan. Cash dividends and any earnings
               that have not been used to repay any Acquisition Loan
               and have been credited to a Participant's ESOP Cash
               Account shall be applied by the Trustee to the purchase
               of shares of Common Stock, which shares shall then be
               credited to the ESOP Stock Account of such Participant.
               The Participant's ESOP Cash Account shall then be
               charged by the amount of cash used to purchase such
               Common Stock or used to repay any Acquisition Loan. In
               addition, any earnings (i) on ESOP Cash Accounts will
               be allocated to Participants' ESOP Cash Accounts, pro
               rata, based on such ESOP Cash Account balances and (ii)
               on the Loan Suspense Account, other than dividends used
               to repay the Acquisition Loan, will be allocated to
               Participants' Accounts, pro rata, based on their
               Account balances in Part A;

                    (d) Next, allocate and credit the Employer
               Contributions made for the purpose of repaying any
               Acquisition Loan in accordance with Section 5.4. Such
               amount shall then be used to repay any Acquisition Loan
               and such Participant's ESOP Cash Account shall be
               charged accordingly; and

                    (e) Finally, allocate and credit the Employer
               Contributions (other than amounts contributed to repay
               an Acquisition Loan) that are made in cash for the Plan
               Year to the ESOP Cash Account of each Participant
               (including Participants whose employment with the
               Company and its Affiliates terminated for any reason
               during the Plan Year) in accordance with Section
               5.4(b). 
           
               5.4  Allocation and Crediting of Employer
          Contributions. As of the Valuation Date for each Plan Year,
          all cash contributions and shares of Company Stock
          transferred by each Employer to the Trustee for that Plan
          Year under Section 3.1 and the number of Financed Shares
          released from the Loan Suspense Account for allocation to
          Participants' ESOP Stock Accounts under Section 4.3 (except
          as provided under Section 10.3) during the Plan Year shall
          be allocated among and credited to the Accounts of
          Participants (including Participants whose employment with
          the Company and its Affiliates terminated for any reason
          during the Plan Year) as follows:

                    (a) Part A. On each Valuation Date, the cash
               contributions used to repay the Acquisition Loan
               indebtedness and the shares of Class 1 Non- Voting
               Preferred Stock released for that Plan Year shall be
               allocated and credited to each Participant's Account as
               follows:
                
                         (i) First, the Employer Contributions made in
                    cash used to repay each Acquisition Loan (or
                    treated as cash due to forgiveness of such
                    Acquisition Loan indebtedness) shall be allocated
                    among the Employee Groups as follows:

                              (A) The allocation percentage for the
                         Class 1 Non-Voting Preferred Stock released
                         for that Plan Year shall be as follows: ALPA
                         Employee Group--31.759437%; IAM Employee
                         Group--47.511196%; and Management and
                         Salaried Employee Group--20.729367%. All such
                         shares released for such Plan Year shall be
                         allocated to the Employee Groups in
                         accordance with such allocation percentages. 

                              (B) There shall be calculated for each
                         Participant an allocation of shares of Class
                         1 Non-Voting Preferred Stock on account of
                         dividends paid during the Plan Year on such
                         Preferred Stock previously allocated to such
                         Participant's ESOP Stock Account and applied
                         in accordance with Sections 10.1(a) and 10.3.
                         The foregoing allocations for each
                         Participant shall be made out of the Class 1
                         Non-Voting Preferred Stock allocated to that
                         Participant's Employee Group under subclause
                         (A) above.

                              (C) Employer Contributions to be
                         allocated in accordance with this clause
                         (i)(C) shall be allocated to each Employee
                         Group in the proportion that (x) shares of
                         Class 1 Non-Voting Preferred Stock allocated
                         to that respective Employee Group pursuant to
                         subclause (A) reduced by the shares allocated
                         to members of that Employee Group pursuant to
                         subclause (B), bears to (y) all shares of
                         Class 1 Non-Voting Preferred Stock released
                         for the Plan Year reduced by all shares
                         allocated pursuant to subclause (B). 

                         (ii) Second, the allocations of Employer
                    Contributions under clause (i)(C) shall be reduced
                    by all of the interest on the Initial Acquisition
                    Loan and the Additional Acquisition Loans paid
                    during that period. Such reduction shall be made
                    in proportion to the allocations made under clause
                    (i)(C).
                
                         (iii) Third, there shall be tentatively
                    allocated to the Accounts of each Participant in
                    each Employee Group that portion of the resulting
                    Employer Contributions which such Participant's
                    Compensation (or, in the case of the IAM Employee
                    Group, such Participant's Wage Investments) for
                    the Plan Year bears to the aggregate Compensation
                    (or, in the case of the IAM Employee Group, Wage
                    Investments) for all such Participants for such
                    Plan Year; provided that such Employer
                    Contributions shall not be allocated to any
                    Participant's Account to such extent the
                    allocation would exceed the limitation of Code
                    section 415(c). The amount, if any, by which the
                    allocation to any such Participant's Account shall
                    be reduced under the foregoing proviso shall be,
                    subject to the Code section 415(c) limitation,
                    tentatively allocated (and, if necessary,
                    reallocated) to the Accounts of all other
                    Participants in his Employee Group (x) for the
                    Management and Salaried Employee Group, in
                    proportion to their Compensation, (y) in the case
                    of the IAM Employee Group, Wage Investments, and
                    (z) in the case of the ALPA Employee Group, first
                    in proportion to (but not more than) the amount of
                    Class 2 Non-Voting Preferred Stock otherwise
                    scheduled for contribution and allocation to each
                    Participant's Account under Part B for the current
                    Plan Year (absent this clause (iii)) and otherwise
                    in proportion to Compensation.

                         (iv) Fourth, if the total Employer
                    Contributions tentatively allocated to "highly
                    compensated employees" (as defined in Code section
                    414(q)) under clause (iii) do not exceed one-third
                    of the total Employer Contributions tentatively
                    allocated to the Accounts of all Participants
                    under clause (iii), the tentative allocations of
                    Employer Contributions to Participants shall
                    become final. The foregoing limitation shall be
                    applied by aggregating all Participants in all
                    Employee Groups.

                         (v) Fifth, if the one-third limitation
                    described in clause (iv) is exceeded, the amount
                    of Employer Contributions allocated to Accounts of
                    Participants in the ALPA Employee Group who are
                    highly compensated employees shall be reduced, pro
                    rata, based on Compensation and reallocated to
                    Participants in the ALPA Employee Group who are
                    not highly compensated employees, to the extent
                    necessary to meet the one-third limitation
                    described in clause (iv), subject, however, to
                    Code section 415(c). The foregoing reallocations
                    to each non-highly compensated employee shall be
                    allocated in proportion to (but not more than) the
                    number of shares of Class 2 Non-Voting Preferred
                    Stock otherwise scheduled for contribution and
                    allocation to his Account under Part B for the
                    current Plan Year (absent this clause (v)). If and
                    to the extent appropriate arrangements are made
                    between the Company and ALPA to protect the
                    interests of the ALPA Employee Group (which
                    arrangements shall be consistent with Section 13.1
                    and which the Company agrees to do upon reasonable
                    request and which shall not require IAM consent),
                    contributions for the highly compensated ALPA
                    Employee Group members may be reduced, pro rata,
                    to meet the one-third limitation described in
                    clause (iv).
                
                         (vi) Sixth, if, after the reallocation of
                    Employer Contributions described in clause (v),
                    the one-third limitation described in clause (iv)
                    is still exceeded, then the computations described
                    in foregoing clauses (i) through (v) shall be
                    disregarded. In lieu thereof the allocation shall
                    be made in accordance with clauses (i) through
                    (iii), but clause (ii) shall be disregarded. If
                    such allocations do not result in a violation of
                    Code section 415(c) for all members of any
                    Employee Group, the tentative allocations shall
                    become final.
                
                         (vii) Seventh, if the allocation of Employer
                    Contributions described in clause (vi) results in
                    a violation of Code section 415(c) for all members
                    of any Employee Group (after reallocating any
                    excess allocations only to members of such
                    Employee Group), then clause (vi) shall be
                    disregarded. The computations described in
                    foregoing clauses (i) through (v) (including
                    clause (ii)) shall be repeated, but, after
                    applying clause (v), the amount of Employer
                    Contributions allocated to Accounts of
                    Participants who are members of the Management and
                    Salaried Employee Group who are highly compensated
                    employees shall be reduced, pro rata, based on
                    Compensation, and reallocated to Participants in
                    the Management and Salaried Employee Group who are
                    not highly compensated employees, pro rata, based
                    on Compensation, to the extent necessary to meet
                    the one- third limitation described in clause
                    (iv), subject, however, to Code section 415(c). In
                    making the foregoing reallocations, no non-highly
                    compensated employee shall be allocated more
                    shares under this clause (vii) than the number of
                    shares of Class 2 Non-Voting Preferred Stock
                    otherwise scheduled for contribution and
                    allocation to his Account under Part B for the
                    current Plan Year (absent this clause (vii)). If
                    and to the extent appropriate arrangements are
                    made by the Company to protect the interests of
                    the Management and Salaried Employee Group (which
                    arrangements shall be consistent with Section 13.1
                    and which shall not require IAM consent, but which
                    shall require ALPA consent, which consent shall
                    not be unreasonably withheld), contributions for
                    the highly compensated Management and Salaried
                    Employee Group members may be reduced, pro rata,
                    to meet the one-third limitation described in
                    clause (iv).
                
                         (viii) Eighth, all shares of Class 1
                    Non-Voting Preferred Stock released from the Loan
                    Suspense Account as of the Valuation Date shall be
                    allocated first in respect of dividends paid on
                    previously allocated shares of Class 1 Non-Voting
                    Stock in accordance with Sections 10.1(a)(i) and
                    10.3 and then allocated in proportion to the
                    percentage of the Employer Contributions allocated
                    to each Participant's Account under clauses (i)
                    through (vii) above.

                    (b) Special Contributions to Part B.
                
                         (i) The special Employer Contribution made by
                    the Company on the Effective Date pursuant to
                    Section 3.1(b)(i) shall be allocated, per capita,
                    to the appropriate Participants' ESOP Stock
                    Accounts under Part B on the Effective Date.

                         (ii) Employer Contributions made in cash for
                    the Plan Year under Section 3.1(b)(iii) shall be
                    allocated under Part B and credited to the ESOP
                    Cash Accounts of the appropriate Participants to
                    which those cash contributions relate, as follows:
                    to the extent that the calculation of the amount
                    of such contributions refers to shares of Class 1
                    Non-Voting Preferred Stock held in the Loan
                    Suspense Account or Class 1 Non-Voting Preferred
                    Stock contemplated for further sale, divide such
                    cash contributions among the Employee Groups in
                    accordance with Section 5.4(a)(i)(A); to the
                    extent it refers to shares of Class 1 Non-Voting
                    Preferred Stock allocated to the Participants'
                    ESOP Stock Accounts, apportion those contributions
                    to the relevant Employee Group; then, allocate to
                    the appropriate Participants' Accounts, pro rata,
                    in the case of (i) the ALPA Employee Group and the
                    Management and Salaried Employee Group, according
                    to the Compensation paid to such Participants for
                    the Plan Year, and (ii) the IAM Employee Group,
                    according to Wage Investments made by such
                    Participants for the Plan Year; subject, however,
                    in all cases to Code section 415(c).

                    (c) Regular Contributions to Part B. Shares of
               Class 2 Non-Voting Preferred Stock and Voting Preferred
               Stock contributed to the Plan pursuant to Section
               3.1(b) shall be allocated among and credited to the
               ESOP Stock Accounts of Participants for that Plan Year
               as set forth below, provided, however, that no
               allocations (other than allocations under clauses (i)
               and (viii) below) shall be made to Accounts of
               Participants who are members of the IAM Employee Group:
                
                         (i) First, subject to the applicable Code
                    limitations, one share of Voting Preferred Stock
                    shall be allocated to the Participant's Account
                    for each share of Class 1 Non-Voting Preferred
                    Stock allocated to that Participant under Part A
                    on that Valuation Date. The shares of Voting
                    Preferred Stock shall be allocated under Part B
                    and shall be of the appropriate class for each
                    such Participant. The special allocation under
                    Section 5.4(b)(i) shall be credited against the
                    allocation required pursuant to this clause (i) on
                    the first Valuation Date.
                
                         (ii) Second, for each Participant, a
                    "hypothetical share number" shall be calculated
                    for the Valuation Date. Such number shall equal
                    the number of shares that would have been
                    allocated to the Participant under Part A on such
                    Valuation Date if (A) all the shares of Class 1
                    and Class 2 Non-Voting Preferred Stock to be
                    issued pursuant to the Recapitalization Agreement
                    (including, with respect to Valuation Dates
                    occurring on or after December 31, 1995 and after
                    the allocation in subsection (viii) below, any
                    Additional Shares issued or to be issued) had been
                    (I) purchased by the Trust under a single loan on
                    the Effective Date and held under the Loan
                    Suspense Account pursuant to Part A, and (II) in
                    the case of such Class 2 shares, considered Class
                    1 Non-Voting Preferred Stock under Part A having
                    the same fair market value as the Class 1
                    Non-Voting Preferred Stock; provided, however,
                    that such Class 2 shares shall not, except as
                    provided in subclause (E), bear any dividend; (B)
                    the shares of Class 1 and Class 2 Non-Voting
                    Preferred Stock were released under Part A ratably
                    over the 69 months starting on the Effective Date;
                    (C) Section 5.4(a)(i)(A) were applied by
                    allocating the Class 1 Non-Voting Preferred Stock
                    and the Class 2 Non-Voting Preferred Stock among
                    the Employee Groups as follows: ALPA Employee
                    Group - 46.23%; IAM Employee Group - 37.13%; and
                    Management and Salaried Employee Group - 16.64%;
                    (D) allocations under Part A were made as if: (I)
                    the limitations of Code sections 401(a)(4),
                    401(a)(17) and 415 did not apply; (II)
                    Compensation was based on "compensation" as
                    defined in the Supplemental Plan and (III) clauses
                    (ii), (iv), (v), (vi) and (vii) of Section 5.4(a)
                    did not apply; and (E) each share of Class 2
                    Non-Voting Preferred Stock that was in fact
                    allocated on a prior Valuation Date to a
                    Participant's account under the Supplemental Plan
                    or under Part B shall, after the date of such
                    allocation, be considered Class 1 Non- Voting
                    Preferred Stock held by Part A (bearing the same
                    Fixed Dividend as the Class 1 Non-Voting Preferred
                    Stock that was allocated under Part A (but not
                    bearing any other dividend)). By way of
                    illustration, assume a member of the ALPA Employee
                    Group has a total of 130 shares of Class 2
                    Non-Voting Preferred Stock allocated to his
                    account under the Supplemental Plan and 70 shares
                    of Class 2 Non-Voting Preferred Stock allocated to
                    his Account under Part B. Assume further that each
                    share of Class 1 Non-Voting Preferred Stock under
                    Part A has a value of $100, pays an $8 Fixed
                    Dividend, no dividends are paid on Common Stock
                    and that each share of Class 2 Non-Voting
                    Preferred Stock has a $75 value. For purposes of
                    making the allocations under this subclause (E),
                    such individual shall be treated as having
                    received a dividend of $1600 with respect to the
                    shares of Class 2 Non-Voting Preferred Stock
                    allocated under the Supplemental Plan and under
                    Part B. For purposes of calculating the
                    hypothetical share number, that individual shall
                    receive an allocation of 16 shares of Class 2
                    Non-Voting Preferred Stock to make up for such
                    dividend, notwithstanding the fact that the value
                    of the shares of Class 2 Non-Voting Preferred
                    Stock is $75 per share.
                
                         (iii) Third, for each ESOP Participant, the
                    "actual share number" for a Valuation Date shall
                    be the actual number of shares of Class 1
                    Non-Voting Preferred Stock that are allocated to
                    such Participant under Part A on that Valuation
                    Date. 

                         (iv) Fourth, for each ESOP Participant, the
                    excess of the hypothetical share number over the
                    actual share number shall be referred to herein as
                    the respective "tentative allocation." If the sum
                    of the tentative allocations (ignoring negative
                    tentative allocations) for all Participants in an
                    Employee Group exceeds the number of shares of
                    Class 2 Non-Voting Preferred Stock released from
                    the "phantom suspense account" to all such
                    Participants' accounts for that Employee Group
                    under Section 2.2 of the Supplemental Plan, each
                    such tentative allocation for Participants of that
                    Employee Group shall be proportionately reduced.
                
                         (v) Fifth, on each Valuation Date, the number
                    of shares of each of the Class 2 Non-Voting
                    Preferred Stock and Voting Preferred Stock, if
                    any, to be allocated to a Participant under Part B
                    (excluding Voting Preferred Stock described in
                    Section 5.4(c)(i) and 5.4(c)(vi)) shall be the
                    same and shall equal the least of the following
                    numbers: (A) the maximum number of shares of each
                    of the Class 2 Non-Voting Preferred Stock and the
                    Voting Preferred Stock that can be allocated to
                    the Participant for the Valuation Date under Part
                    B without violating Code section 415 or Code
                    section 401(a)(4) (if applicable), (B) the
                    tentative allocation and (C) the excess of the
                    hypothetical share number (calculated for this
                    purpose only by applying the Code section
                    401(a)(17) limitation) over the actual share
                    number. The hypothetical share number described in
                    this subclause (C) shall be determined by
                    recalculating the allocations made on the current
                    and all prior Valuation Dates by assuming the
                    Participant's Compensation for each Plan Year had
                    been limited to the amount then allowed under Code
                    section 401(a)(17). Accordingly, for purposes of
                    calculating the hypothetical share number under
                    this subclause (C), the Participants' Compensation
                    in the current Plan Year shall be limited to the
                    amount provided by Code section 401(a)(17) and the
                    amount of dividends allocated to each
                    Participant's Account during the Plan Year shall
                    be calculated by assuming the allocations of
                    shares made on earlier Valuation Dates were also
                    based on Compensation, as limited by Code section
                    401(a)(17) limitation then in effect. The excess
                    of the tentative allocations over the amount
                    allocated under clause (v) shall not be allocated
                    under Part B, but shall be allocated in accordance
                    with the terms of the Supplemental Plan.

                         (vi) Sixth, on the last Valuation Date of
                    each Plan Year, in addition to the shares of Class
                    2 Non-Voting Preferred Stock and Voting Preferred
                    Stock transferred to Part B under clause (v)
                    above, shares credited under the Supplemental
                    Plan, in a prior Plan Year, due to the limitations
                    under Code section 401(a)(4), 401(a)(17) or Code
                    section 415, shall be allocated to Participants'
                    Accounts under Part B, subject to applicable Code
                    limitations in accordance with the following
                    priorities:
                
                              (A) first, by a number of shares, if
                         any, of Voting Preferred Stock equal to the
                         excess of the number of shares of Class 1 and
                         Class 2 Non-Voting Preferred Stock allocated
                         to his Account over the number of shares of
                         Voting Preferred Stock allocated to his
                         Account, to the extent such number may be
                         contributed by the Company or transferred
                         from the Supplemental Trust to Part B without
                         disqualifying the Plan or any other qualified
                         plan; provided, however, that the number of
                         shares transferred may include any shares
                         that were not previously contributed or
                         transferred to Part B because of the
                         limitations of Code section 401(a)(17);

                              (B) second, by the maximum number of
                         shares of Class 2 Non-Voting Preferred Stock
                         and Voting Preferred Stock (such numbers to
                         be the same) that may be contributed by the
                         Company (or transferred from the Supplemental
                         Trust) to Part B without disqualifying the
                         Plan or any other qualified plan; provided,
                         however, that the number of shares
                         transferred may include any shares that were
                         not previously contributed or transferred to
                         Part B because of the limitations of Code
                         section 401(a)(17); and
                
                              (C) third, by the maximum number of
                         shares of Common Stock that may be
                         transferred from the Supplemental Trust to
                         Part B without disqualifying the Plan or any
                         other qualified plan; provided, however, that
                         the number of shares may include any shares
                         that were not previously contributed or
                         transferred to Part B because of the
                         limitations of Code section 401(a)(17).

                    The reductions described in subclauses (A) through
                    (C) shall not include any Voting Preferred Stock,
                    Class 2 Non-Voting Preferred Stock or Common Stock
                    allocated during the current Plan Year. 

                         (vii) Seventh, the Company shall contribute
                    (or, to the extent applicable, the Company shall
                    direct the trustee of the Supplemental Trust to
                    transfer) a number of shares of Voting Preferred
                    Stock and Class 2 Non-Voting Preferred Stock and
                    Common Stock equal to the sum of the number of
                    such respective shares calculated for each
                    Participant under clauses (i), (v) and (vi) above
                    to Part B. Such shares shall be transferred as
                    soon as practicable after the applicable Valuation
                    Date.
                
                         (viii) Eighth, Prior to the December 31, 1995
                    Valuation Date, the aggregate hypothetical share
                    numbers for all Participants for the 1994 Plan
                    Year shall be retroactively increased by an
                    additional number equal to X multiplied by Y;
                    where X is the total number of shares of Preferred
                    Stock to be issued as Additional Shares and Y is
                    the release fraction (as defined in the
                    Supplemental Plan) for December 31, 1994. Such
                    shares shall be divided among the Employee Groups
                    (including the IAM Employee Group) in accordance
                    with Section 5.4(c)(ii)(C) and allocated to
                    Participants based upon 1994 data (that is, 1994
                    Compensation and Wage Investments, as applicable.)
                    The excess of such new hypothetical share number
                    (including such numbers for the IAM Employee
                    Group) for the 1994 Plan Year over the
                    hypothetical share number previously determined
                    for 1994 shall be allocated hereunder or credited
                    under the Supplemental Plan in accordance with
                    clause (v) above, provided that the number in
                    (v)(A) shall be calculated and credited as if the
                    contributions were attributable to 1995, rather
                    than 1994, unless the additional shares calculated
                    in clause (v) to be contributed to ESOP (Part B)
                    are in fact contributed to the ESOP no later than
                    September 15, 1995. The calculations required by
                    this clause (viii) shall be performed prior to
                    calculating the regular allocations for the 1995
                    year. The additional shares of Class 2 Non- Voting
                    Preferred Stock credited pursuant to this clause
                    (viii) shall, for all purposes, including Section
                    5.4(c)(ii)(E), be allocated as of December 31,
                    1994.

                    (d) Purpose. The purpose of the foregoing
               contribution and allocation provisions is to place each
               Participant, to the extent possible, in the same
               position such Participant would have been if (i) Code
               sections 401(a)(4), 401(a)(17) and 415 did not apply,
               (ii) all of the shares of Preferred Stock to be sold to
               Part A during the Wage Investment Period had instead
               been sold on the Effective Date, (iii) all of the
               shares (excluding shares of the Voting Preferred Stock)
               contributed to Part B or credited under the
               Supplemental Plan during the Wage Investment Period had
               instead been purchased by the Trust on the Effective
               Date pursuant to Part A as Class 1 Non-Voting Preferred
               Stock and (iv) the Preferred Stock and Voting Preferred
               Stock had been allocated ratably (over the 69 months
               beginning at the Effective Date) to Participants in
               their respective Employee Groups in accordance with the
               overall program ownership percentages, that is, the
               ALPA Employee Group - 46.23%, the IAM Employee Group -
               37.13% and the Management and Salaried Employee Group -
               16.64%. To the extent any interpretative issues arise
               in calculating contributions and allocations, such
               issues shall be resolved, if possible, by effectuating
               such purpose. To the extent that any shares of Company
               Stock are converted into shares of Common Stock prior
               to the end of the Wage Investment Period, an
               appropriate number of shares of Common Stock will be
               contributed (if applicable) and allocated hereunder in
               lieu of the shares of the Company Stock that would have
               been contributed and/or allocated hereunder and, if
               appropriate, the number of Class 1 and/or Class 2
               Non-Voting Preferred Stock shares set forth in various
               places in this Plan shall be revised; provided, except
               to the extent the shares of Voting Preferred Stock are
               converted into shares of Common Stock, the calculation
               of the number of shares of Voting Preferred Stock to be
               contributed and allocated shall continue as if no
               shares of Company Stock had been converted.

                    (e) Special Allocation Provision. For purposes of
               making allocations under Section 5.4, the period from
               January 1, 2000 through April 12, 2000 shall be treated
               as a Plan Year (for the ALPA Employee Group and the
               Management and Salaried Employee Group) and the period
               from January 1, 2000 through July 12, 2000 shall be
               treated as a Plan Year (for the IAM Employee Group).

          5.5  LIMITATION ON ALLOCATIONS TO PARTICIPANTS.

               (a) General. Subject to the provisions of this Section
          5.5, Code section 415, including the effect of any
          transitional rule, shall be incorporated by reference into
          the terms of the Plan. No allocation shall be made under
          Section 5.4 that would result in a violation of Code section
          415.

               (b) Code Section 415 Compensation. For purposes of this
          Section 5.5, Compensation shall be adjusted to reflect the
          general rule of Treasury Regulation section 1.415-2(d).

               (c) Limitation Year. The "limitation year" (within the
          meaning of Code section 415) shall be the calendar year.

               (d) Multiple Defined Contribution Plans. In any case
          where a Participant also participates in another defined
          contribution plan of the Company or its Affiliates, the
          appropriate committee of such other plan shall first reduce
          the after-tax contributions under any such plan, shall then
          reduce any elective deferrals under any such plan subject to
          Code section 401(k), shall then reduce all other
          contributions under any other such plan and, if necessary,
          shall then reduce contributions under this Plan (Part B to
          be reduced before Part A); provided, however, in the case of
          any Participant who is a member of the ALPA Employee Group,
          contributions (excluding after-tax contributions and
          elective deferrals) under the United Air Lines, Inc. Pilots'
          Directed Account Retirement Income Plan shall be reduced
          last.

               (e) Combined Plan Limitations. To the extent necessary
          to comply with the requirements of Code section 415(e), the
          appropriate committee shall first reduce the annual benefit
          payable under any defined benefit plan in which the
          Participant participates and, if necessary, the ESOP
          Committee shall thereafter reduce the contributions under
          the defined contribution plans in which such Participant
          participates in accordance with Section 5.5(d).

               (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 the affected
          Participant or 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)(ii). Such
          suspense account, if permitted, will be created before any
          reallocation of contributions for the affected individual.
          If the limits of Code section 415 would cause total
          allocations to each Participant in an Employee Group to
          exceed the permitted amount, appropriate arrangements will
          be made to protect the interests of that Employee Group,
          consistent with the principles of Section 3.2.

               5.6 Valuations. All valuations of shares of Company
          Stock that are not readily tradeable on an established
          securities market shall be valued by an "independent
          appraiser" (within the meaning of Code section 170(a)(1)). 

          SECTION 6

          VESTING

               A Participant's Account shall be fully vested
          (nonforfeitable) at all times, and will be distributed to
          him or, in the event of his death, to his Beneficiary, in
          accordance with the applicable provisions of Section 7.

           SECTION 7

          DISTRIBUTIONS

               7.1  Pre-Retirement Diversification Rights.

                    (a) General. Any Participant who has attained age
               55 and has 10 years of participation under the Plan
               ("Qualified Participant") may elect to diversify the
               investment of a portion of his Account under this
               Section 7.1. During the six-Plan Year period beginning
               with the Plan Year in which such Qualified Participant
               attains age 55 and has 10 years of participation under
               the Plan, such Qualified Participant shall be entitled
               to request, within 90 days after the close of each Plan
               Year in such period (each such period referred to as an
               "Election Period"), the diversification of up to 25% of
               the balance of his Account, to the extent such amount
               exceeds the amount to which any prior election under
               this Section 7.1 applies. During the last Election
               Period, the preceding sentence shall be applied by
               substituting "50%" for "25%".

                    (b) Amount. In the case of a Qualified Participant
               who has made one or more elections during the period,
               the extent to which a subsequent election exceeds the
               amount to which any prior election applies shall be (i)
               in the case of the Qualified Participant's ESOP Cash
               Account, (A) 25% or 50%, as the case may be, of the sum
               of the balance of such Account as of the Valuation Date
               of the Plan Year with respect to which the subsequent
               election is made and the amounts diversified pursuant
               to prior elections, less (B) the amounts diversified
               pursuant to prior elections; and (ii) in the case of
               the Qualified Participant's ESOP Stock Account, (A) 25%
               or 50%, as the case may be, of the sum of the number of
               shares of Company Stock in the Qualified Participant's
               ESOP Stock Account as of the Valuation Date of the Plan
               Year with respect to which the subsequent election is
               made and the number of shares of Company Stock
               diversified pursuant to prior elections, less (B) the
               number of shares of Company Stock diversified pursuant
               to prior elections. For the purposes of this Section 7,
               fractional shares for which a Qualified Participant
               might be entitled to receive shall be rounded down to
               the nearest whole share. The diversification of a
               Participant's Account under this Section 7.1 shall only
               be effected within 90 days following the 90-day period
               in which the Qualified Participant makes his request.
               Notwithstanding the foregoing, if the fair market value
               of the Company Stock allocated to the ESOP Stock
               Accounts of a Qualified Participant is $500 or less as
               of the Valuation Date immediately preceding the first
               day of an Election Period, such Qualified Participant
               shall not be entitled to an election under this Section
               7.1 for that Election Period. 

                    (c) Method. A Participant's diversification
               election pursuant to this Section 7.1 shall only be
               effected by having the ESOP Committee cause the Trustee
               to transfer the portion of the Account to be
               diversified to the Company's Code section 401(k) plan
               applicable to such Participant. An equal number of
               shares of Voting Preferred Stock and Preferred Stock
               shall be diversified.

               7.2  Distributions on Account of Termination of
          Employment. Subject to the following provisions of this
          Section 7, a Participant (or, in the case of a Participant's
          death, his Beneficiary) shall become eligible (but shall not
          be required) to receive a distribution of the balance of his
          Account, as of the Valuation Date coincident with or next
          following the date the Participant's employment with the
          Company and its Affiliates terminates for any reason;
          provided, however, that, except as provided in Section 7.4,
          no distributions shall be made prior to July 13, 1995. 

               7.3  Manner and Form of Distributions.

                    (a) Manner. A Participant may elect to receive a
               distribution of his Account balance in either of the
               following methods:
                
                         (i) By payment in a lump sum; or

                         (ii) By payment in a series of five
                    substantially equal annual installments (to
                    consist of equal numbers of Voting Preferred Stock
                    and Preferred Stock).

               If a Participant so desires he may direct how his
               benefits are to be paid to his Beneficiary. If a
               deceased Participant did not file a direction with the
               ESOP Committee, the Beneficiary may elect to receive a
               distribution of the Account in accordance with this
               Section 7.3.

                    (b) Form. At the Participant's election, the ESOP
                    Committee shall direct the Trustee to make
                    distribution of a Participant's Account in (i)
                    cash, (ii) Company Stock or (iii) in cash equal to
                    the amount held in such Participant's ESOP Cash
                    Account and in shares of Company Stock with
                    respect to such Participant's ESOP Stock Account;
                    provided, however, that Company Stock (if
                    convertible) shall only be distributed in the form
                    of Common Stock received in the conversion of the
                    Preferred Stock held in his Account and any
                    fractional share shall be paid in cash. If a
                    Participant elects to receive a distribution of
                    his ESOP Stock Account in cash, the Trustee shall
                    be directed to convert (if convertible) the
                    Company Stock in his ESOP Stock Account into
                    Common Stock and to sell the Common Stock and any
                    Company Stock that is not convertible; the amount
                    of cash so distributed shall equal the net
                    proceeds received from the sale of such shares of
                    Common Stock. If a Participant elects to receive a
                    distribution of his ESOP Cash Account in Common
                    Stock, the Trustee will be directed to purchase
                    Common Stock in the open market and the number of
                    shares of Common Stock so distributed shall equal
                    the number of whole shares purchased with such
                    Participants' Account balance, with any excess
                    cash distributed to the Participant.

               7.4  Special Distribution Rules. Notwithstanding any
          provision herein to the contrary:

                    (a) Required Distributions.
                
                         (i) a Participant whose employment with the
                    Company and its Affiliates terminates by reason of
                    attainment of his Normal Retirement Date, death or
                    Total Disability must be eligible to receive a
                    distribution of his Account balance no later than
                    the end of the Plan Year following the Plan Year
                    in which such termination occurs; provided,
                    however, that this provision shall not apply to
                    the shares of Company Stock held in the
                    Participant's Account acquired with the proceeds
                    of an Acquisition Loan until the close of the Plan
                    Year in which such Acquisition Loan has been
                    repaid in full;

                         (ii) unless a Participant otherwise elects
                    under Section 7.4(b), a Participant whose
                    employment with the Company and its Affiliates
                    terminates must commence to receive a distribution
                    of his Account no later than 60 days following the
                    close of the Plan Year in which the latest of the
                    following occurs: (A) a Participant reaches his
                    Normal Retirement Date, (B) the Participant's
                    employment with the Company and its Affiliates
                    terminates and (C) the 10th anniversary of the
                    year in which the Participant commenced
                    participation in the Plan; 

                         (iii) a Participant's Account balance must
                    commence to be distributed no later than the April
                    1 of the calendar year next following the calendar
                    year in which such Participant attains age 70-
                    1/2. Any amount distributed pursuant to this
                    clause (iii) shall, in the case of a Participant
                    who is an Employee, be and be limited to the
                    minimum amount required to be distributed pursuant
                    to Code section 401(a)(9);
                
                         (iv) If a Participant's employment with the
                    Company and its Affiliates terminates by reason of
                    death, or if a Participant dies after his
                    employment terminates but before a distribution
                    commences from the Plan, then, unless the
                    Participant's spouse is the Beneficiary, all of
                    the Participant's interest in the Plan must be
                    completely distributed within five years after the
                    date of his death unless distributions begin
                    within one year after the Participant's death; and
                
                         (v) to the extent permitted by law, Code
                    section 401(a)(9) and any related transitional
                    rule are incorporated by reference into the terms
                    of the Plan.

                    (b) Deferred Distributions. A Participant (or a
               spousal Beneficiary) may elect to defer the
               commencement of his distribution to any date on or
               prior to the April 1 of the calendar year next
               following the calendar year in which such Participant
               attains age 70-1/2.

               7.5  Direct Rollover. To the extent required by Code
          section 401(a)(31), the Participant (or a spousal
          Beneficiary) shall have the right to elect to have any
          distribution that constitutes an "eligible rollover
          distribution" (as defined in Code section 401(a)(31)(C))
          paid directly to an "eligible retirement plan" (as defined
          in Code section 401(a)(31)(D)) specified by such Participant
          (or a spousal Beneficiary). If a Participant (or a spousal
          Beneficiary) fails to make the foregoing election he shall
          be deemed to have not made such election. The provisions of
          this Section 7.5 shall be administered in accordance with,
          and subject to, such rules as the ESOP Committee may
          prescribe, which rules may include any limitations permitted
          under Code section 401(a)(31). 

               7.6  Facility of Payment.

                    (a) General. Subject to Section 7.6(b), if, in the
               opinion of the ESOP Committee, a Participant or
               Beneficiary is under a legal disability or is in any
               way incapacitated so as to be unable to manage his
               financial affairs, the ESOP Committee may (but shall
               not be required to), until claim is made by a
               conservator or other person legally charged with the
               care of his person or of his estate, direct the Trustee
               to make payment to a relative or friend of such person
               for his benefit. Thereafter, any benefits under the
               Plan to which such Participant or Beneficiary is
               entitled shall be paid to such conservator or other
               person legally charged with the care of his person or
               his estate.

                    (b) Minors. In the event any amount is payable
               under the Plan to a minor, payment shall not be made to
               the minor, but instead shall be paid (i) to that
               person's then living parent(s) to act as custodian,
               (ii) if that person's parents are then divorced, and
               one parent is the sole custodial parent, to such
               custodial parent, or (iii) if no parent of that person
               is then living, to a custodian selected by the ESOP
               Committee to hold the funds for the minor under the
               Uniform Transfers or Gifts to Minors Act in effect in
               the jurisdiction in which the minor resides. If no
               parent is living and the ESOP Committee decides not to
               select another custodian to hold the funds for the
               minor, payment shall be made to the duly appointed and
               currently acting guardian of the estate for the minor
               or, if no guardian of the estate for the minor is duly
               appointed and currently acting within 60 days after the
               date the amount becomes payable, payment shall be
               deposited with the court having jurisdiction over the
               estate of the minor. 

                    (c) Discharge. Any payment made under this Section
               7.6 shall fully discharge, to such extent, the
               obligation of the Trustee to pay benefits under the
               Plan with respect to such Participant, Beneficiary or
               minor. 
           
               7.7  Interests Not Transferable. The interests of
          Participants and their Beneficiaries under the Plan are not
          subject to the claims of their creditors and may not be
          voluntarily or involuntarily assigned, alienated or
          encumbered, except as otherwise provided in Section 7.11.
           
               7.8  Absence of Guaranty. The Trustee, the ESOP
          Committee and the Employers in no way guarantee the Trust
          Fund from loss or depreciation. Moreover, the Employers do
          not guarantee any payment to any person. The liability of
          the Trust to make any payment is limited to the available
          Trust Fund. 
           
               7.9  Designation of Beneficiary. In the event of the
          death of a married Participant, the Participant's Account
          balance will be paid to his surviving spouse, except as
          otherwise provided below. Each Participant from time to
          time, by signing a form furnished by the ESOP Committee, may
          designate any legal or natural person or persons (who may be
          designated contingently or successively) to whom his
          benefits are to be paid if he dies before he receives all of
          his benefits; provided, however, that if a married
          Participant designates a Beneficiary other than his spouse,
          his spouse must consent in writing to such designation and
          acknowledge in writing the effect of such designation, and
          such consent and acknowledgement must be witnessed by a
          notary public. Any designation by an unmarried Participant
          shall be rendered ineffective by any subsequent marriage and
          any consent of a spouse shall be effective only as to that
          spouse.

               A Beneficiary designation form will be effective only
          when the signed form is filed with the ESOP Committee while
          the Participant is alive and will cancel all Beneficiary
          designation forms signed earlier. If a deceased Participant
          fails to designate a Beneficiary as provided above (or if
          the designated Beneficiary dies before the Participant or
          before receiving complete payment of the Participant's
          benefits), the ESOP Committee shall direct the Trustee to
          pay the Participant's benefits as follows:

                    (a) first, to the surviving spouse of the
               Participant, if any; 

                    (b) second, to the children (including any adopted
               children) of the Participant, per stirpes; and

                    (c) third, if the Participant leaves no surviving
               spouse or has no descendants pursuant to paragraph (b)
               above, to the estate of the last to die of the
               Participant or his designated Beneficiary. 
           
               Upon the dissolution of marriage of a Participant, any
          designation of the Participant's former spouse as a
          Beneficiary shall be treated as though the Participant's
          former spouse had predeceased the Participant, unless (i)
          the Participant executes another Beneficiary designation
          that complies with this Section 7.9 and that clearly names
          such former spouse as a Beneficiary, or (ii) a court order
          presented to the ESOP Committee prior to distribution on
          behalf of the Participant explicitly requires the
          Participant to continue to maintain the former spouse as the
          Beneficiary. In any case in which the Participant's former
          spouse is treated under the Participant's Beneficiary
          designation as having predeceased the Participant, no heirs
          or other beneficiaries of the former spouse shall receive
          benefits from the Plan as a Beneficiary of the Participant
          except as provided otherwise in the Participant's
          Beneficiary designation. 
           
               7.10 Missing Participants or Beneficiaries. Each
          Participant and each Beneficiary must file with the ESOP
          Committee from time to time in writing his post office
          address and each change of post office address. Any
          communication, statement or notice addressed to a
          Participant or Beneficiary at his last post office address
          filed with the ESOP Committee, or if no address is filed
          with the ESOP Committee, then, in the case of a Participant,
          at his last post office address as shown on his Employer's
          records, will be binding on the Participant and his
          Beneficiary for all purposes of the Plan. The Employers, the
          ESOP Committee and the Trustee will not be required to
          search for or locate a Participant or his Beneficiary. In
          the event that all, or any portion, of the distribution
          payable to a Participant or his Beneficiary hereunder shall,
          at the expiration of five years after it shall become
          payable, remain unpaid solely by reason of the inability of
          the ESOP Committee, after sending a communication, statement
          or notice to the last post office address filed with the
          ESOP Committee, to ascertain the whereabouts of such
          Participant or his Beneficiary, the amount so distributable
          shall be reallocated in the same manner as a Company Stock
          contribution would be allocated under the provisions of
          Section 5.4. In the event a Participant or his Beneficiary
          is located subsequent to his benefit being reallocated, such
          benefit shall be restored first from Trust (including the
          Supplemental Trust) earnings and second from an Employer
          Contribution made solely for restoration purposes. The
          allocation and restoration referred to above shall be
          effected by giving effect to the class of Company Stock
          reallocated.

               7.11 Qualified Domestic Relations Order. In addition to
          payments made under Section 7 on account of a Participant's
          termination of employment, payments may also be made to an
          Alternate Payee (as defined below) prior to, coincident
          with, or after a Participant's termination of employment if
          made pursuant to a "qualified domestic relations order" (as
          defined in Code section 414(p)). The ESOP Committee shall
          establish reasonable procedures to determine the qualified
          status of domestic relations orders and to administer
          distributions under such qualified orders, including, in its
          sole discretion, the establishment of segregated accounts
          for Alternate Payees. The term "Alternate Payee" means any
          spouse, former spouse, child or other dependent of a
          Participant who is recognized by a Qualified Domestic
          Relations Order as having a right to receive all, or a
          portion of, the benefits payable under the Plan with respect
          to the Participant.

          SECTION 8

          VOTING AND CERTAIN DISPOSITIONS OF COMPANY STOCK 
           
               8.1  Voting.

                    (a) Allocated Shares. Each Participant or
               Beneficiary, as a named fiduciary within the meaning of
               ERISA section 403(a)(1), in accordance with the
               procedures hereinafter set forth, may direct the
               Trustee with respect to the votes of the shares of
               Company Stock allocated to his ESOP Stock Account, and
               the Trustee shall follow the directions of those
               Participants (and Beneficiaries) who provide timely
               instructions to the Trustee; provided that,
               notwithstanding the foregoing, the Trustee shall vote
               the shares of Company Stock allocated to the Part B
               Accounts of Participants who are (or were) members of
               the ALPA Employee Group but are not Employees (or
               allocated to the Part B Accounts of their
               Beneficiaries). 

                    (b) Unallocated and Uninstructed Shares.
                
                         (i) Part A. Each active Participant (which
                    shall be defined for purposes of Sections 8.1 and
                    8.2 to mean a Participant who is an Employee) who
                    directed the Trustee with respect to shares
                    allocated to his Account under Part A in
                    accordance with Section 8.1(a) may, again as a
                    named fiduciary, direct the Trustee with respect
                    to a portion of both the number of shares of
                    Company Stock held in the Loan Suspense Account
                    and the number of such shares allocated to any
                    Participant's Account under Part A for which no
                    instructions were timely received by the Trustee.
                    Such portion shall be determined as follows:
                
                              (A) Such portion shall be limited to the
                         sum of: (I) the number of shares of Company
                         Stock held in the Loan Suspense Account
                         reserved for allocation to such Participant's
                         Employee Group, plus (II) the number of
                         shares of Company Stock allocated to the
                         Accounts of Participants in such
                         Participant's Employee Group under Part A for
                         which no instructions were timely received.

                              (B) The number of shares of Company
                         Stock determined under clause (i)(A) shall be
                         multiplied by a fraction, the numerator of
                         which is the number of shares of Company
                         Stock allocable to Part A that such
                         Participant directed the Trustee in
                         accordance with Section 8.1(a) and the
                         denominator of which is the aggregate number
                         of shares allocable to Part A that were
                         directed by active Participants in the same
                         Employee Group in accordance with Section
                         8.1(a). 

                              (C) Such Participant, as a named
                         fiduciary, shall be entitled to direct the
                         Trustee with respect to the number of shares
                         determined under clause (i)(B). 

                         (ii) Part B. Each active Participant who
                    directed the Trustee with respect to shares
                    allocated to his Account under Part B in
                    accordance with Section 8.1(a) may, again as a
                    named fiduciary, direct the Trustee with respect
                    to a portion of the number of such shares
                    allocated to any Participant's Account under Part
                    B for which no instructions were timely received
                    by the Trustee. Such portion shall be determined
                    as follows:
                
                              (A) Such portion shall be limited to the
                         number of shares of Company Stock allocated
                         to the Accounts of Participants in such
                         Participant's Employee Group under Part B for
                         which no instructions were timely received. 

                              (B) The number of shares of Company
                         Stock determined under clause (ii)(A) shall
                         be multiplied by a fraction, the numerator of
                         which is the number of shares of Company
                         Stock allocable to Part B that such
                         Participant directed the Trustee in
                         accordance with Section 8.1(a) and the
                         denominator of which is the aggregate number
                         of shares allocable to Part B that were
                         directed by active Participants in the same
                         Employee Group in accordance with Section
                         8.1(a).

                              (C) Such Participant, as a named
                         fiduciary, shall be entitled to direct the
                         Trustee, with respect to the number of shares
                         determined under clause (ii)(B). 

                    (c) Procedure. Such directions shall be provided
               directly to the Trustee and shall be held in confidence
               and not be divulged or released to any other person.
               Within a reasonable time prior to each annual or
               special meeting of holders of Company Stock, the ESOP
               Committee shall furnish to all Participants (and
               Beneficiaries) entitled to direct the Trustee as to the
               voting of shares of Company Stock copies of any proxy
               solicitation material provided to holders of voting
               Company Stock generally together with appropriate
               instruction forms or cards and information concerning
               the method of providing such instructions to the
               Trustee. To the extent permitted by law, if the Trustee
               cannot follow directions of Participants (or
               Beneficiaries), the ESOP Committee shall direct the
               Trustee.

               8.2  Control Transaction.

                    (a) General. The provisions of this Section 8.2
               shall apply in the event a Control Transaction is
               commenced or proposed by a person or persons. In the
               event a Control Transaction is commenced or proposed,
               the ESOP Committee, promptly after receiving notice,
               shall transfer certain of the ESOP Committee's record
               keeping functions under the Plan to an independent
               record keeper (which if the Trustee consents in
               writing, may be the Trustee). The functions so
               transferred shall be those necessary to preserve the
               confidentiality of any directions given by the
               Participants (and Beneficiaries) in connection with the
               Control Transaction. Within a reasonable time after a
               Control Transaction is commenced, the ESOP Committee
               shall furnish to all Participants (and Beneficiaries)
               entitled, as hereinafter set forth, to direct the
               Trustee with respect to the Control Transaction, copies
               of all offering material provided to holders of Company
               Stock generally, together with appropriate instruction
               forms or cards and information concerning the method of
               providing such instructions to the Trustee. Except as
               otherwise required by ERISA, the Trustee shall have no
               discretion or authority to sell, exchange, transfer,
               convert or otherwise dispose of any of shares of
               Company Stock pursuant to such Control Transaction
               except to the extent that the Trustee is timely
               directed to do so in writing as follows:
                
                         (i) Allocated Shares. Each Participant (or
                    Beneficiary) to whose ESOP Stock Account shares of
                    Company Stock have been allocated may, as a named
                    fiduciary within the meaning of ERISA section
                    403(a)(1), direct the Trustee with respect to the
                    sale, exchange, transfer, conversion or other
                    disposition of the shares of Company Stock
                    allocated to his ESOP Stock Account, and the
                    Trustee shall follow the directions of those
                    Participants (and Beneficiaries) who provide
                    timely instructions to the Trustee.
                
                         (ii) Unallocated and Uninstructed Shares. 

                              (A) Part A. Each active Participant who
                         directed the Trustee with respect to shares
                         allocated to his Account under Part A in
                         accordance with Section 8.2(a)(i) may, again
                         as a named fiduciary, direct the Trustee with
                         respect to a portion of both the number of
                         shares of Company Stock held in the Loan
                         Suspense Account and the number of such
                         shares allocated to any Participant's Account
                         under Part A for which no instructions were
                         timely received by the Trustee. Such portion
                         shall be determined as follows:
                
                                   (I) Such portion shall be limited
                              to the sum of: (x) the number of shares
                              of Company Stock held in the Loan
                              Suspense Account reserved for allocation
                              to such Participant's Employee Group,
                              plus (y) the number of shares of Company
                              Stock allocated to the Accounts of
                              Participants in such Participant's
                              Employee Group under Part A for which no
                              instructions were timely received.

                                   (II) The number of shares of
                              Company Stock determined under clause
                              (ii)(A)(I) shall be multiplied by a
                              fraction, the numerator of which is the
                              number of shares of Company Stock
                              allocable to Part A that such
                              Participant directed the Trustee in
                              accordance with Section 8.2(a)(i) and
                              the denominator of which is the
                              aggregate number of shares allocable to
                              Part A that were directed by active
                              Participants in the same Employee Group
                              in accordance with Section 8.2(a)(i).
                
                                   (III) Such Participant, as a named
                              fiduciary, shall be entitled to direct
                              the Trustee with respect to the number
                              of shares determined under clause
                              (ii)(A)(II).
                
                              (B) Part B. Each active Participant who
                         directed the Trustee with respect to shares
                         allocated to his Account under Part B in
                         accordance with Section 8.2(a)(i) may, again
                         as a named fiduciary, direct the Trustee with
                         respect to a portion of the number of such
                         shares allocated to any Participant's Account
                         under Part B for which no instructions were
                         timely received by the Trustee. Such portion
                         shall be determined as follows:

                                   (I) Such portion shall be limited
                              to the number of shares of Company Stock
                              allocated to the Accounts of
                              Participants in such Participant's
                              Employee Group under Part B for which no
                              instructions were timely received. 

                                   (II) The number of shares of
                              Company Stock determined under clause
                              (ii)(B)(I) shall be multiplied by a
                              fraction, the numerator of which is the
                              number of shares of Company Stock
                              allocable to Part B that such
                              Participant directed the Trustee in
                              accordance with Section 8.2(a)(i) and
                              the denominator of which is the
                              aggregate number of shares allocable to
                              Part B that were directed by active
                              Participants in the same Employee Group
                              in accordance with Section 8.2(a)(i).
                
                                   (III) Such Participant, as a named
                              fiduciary, shall be entitled to direct
                              the Trustee with respect to the number
                              of shares determined under clause
                              (ii)(B)(II).

          All such instructions from Participants (and beneficiaries)
          shall be provided directly to the independent record keeper
          which, if different from the Trustee, shall then instruct
          the Trustee as to the amount of shares to be sold, tendered,
          exchanged, transferred, converted or otherwise disposed of
          in accordance with the above directions. To the extent the
          Trustee cannot follow Participant (or Beneficiary)
          instructions, the ESOP Committee, as a named fiduciary,
          shall direct the Trustee. Except as contemplated by the
          foregoing or as required to facilitate the making of Plan
          distributions or diversification elections or as required by
          law, the Trustee shall have no authority to dispose of
          Company Stock in a Control Transaction or otherwise.

               (b) Records. Following any Control Transaction that has
          resulted in the sale or exchange of any shares of Company
          Stock held in the Plan, the record keeper shall continue to
          maintain on a confidential basis the Accounts of
          Participants (and Beneficiaries) to whose Accounts shares of
          Company Stock were allocated at any time during such offer,
          until complete distribution of such Accounts or such earlier
          time as the record keeper determines that the transfer of
          the record keeping functions back to the ESOP Committee will
          not violate the confidentiality of the directions given by
          the Participants (and Beneficiaries). In the event that
          there is no sale or exchange of any shares of ESOP Stock
          held in the Plan pursuant to the Control Transaction, the
          record keeper shall transfer back to the ESOP Committee the
          record keeping functions; provided, however, that the record
          keeper shall keep confidential any instructions which it may
          receive from Participants (and Beneficiaries) relating to
          the Control Transaction.

               (c) Proceeds. For purposes of allocating the proceeds
          of any sale or exchange pursuant to a Control Transaction,
          the ESOP Committee or the independent record keeper, as the
          case may be, shall determine the portion, expressed as a
          percentage, of shares of each class tendered by the Trustee
          that were actually sold or exchanged (the "applicable
          percentage" for that class). For each class, the ESOP
          Committee or the independent record keeper, as the case may
          be, shall then treat as having been sold or exchanged from
          the portion of the Loan Suspense Account applicable to that
          Employee Group and each of the individual Accounts of
          Participants (and Beneficiaries) that number of shares (of
          that class) that is obtained by multiplying (i) the
          applicable percentage for that class, times (ii) the total
          number of shares in such Account of that class that were
          directed to be tendered, exchanged or sold in connection
          with the Control Transaction. The adjustments to individual
          Accounts shall be made by the ESOP Committee or the
          independent record keeper, as the case may be, on
          information supplied by the Company, the ESOP Committee or
          the Trustee.

               (d) Actions To Be Taken Following a Control
          Transaction. Notwithstanding Section 4.2 or any other
          provision of this Plan or the Trust Agreement that requires
          that the Trust Fund be invested exclusively in shares of
          Company Stock, this Section 8.2(d) shall apply if a Control
          Transaction results in the sale or exchange or other
          disposition of any shares of Company Stock held in the Plan.
          If the consideration received by the Trust as a result of
          the Control Transaction consists solely of "appropriate
          securities" (as defined below), the terms of the Plan, all
          outstanding Acquisition Loans, and future sales under
          Additional Acquisition Loans, shall continue as if the
          Control Transaction had not occurred. If the consideration
          received includes cash, property or securities, other than
          appropriate securities, the Trustee shall invest the
          proceeds in appropriate securities to the extent possible;
          if the Trustee is able to reinvest all such proceeds in
          appropriate securities, the Plan, all outstanding
          Acquisition Loan and future sales under Additional
          Acquisition Loans, shall continue as if the Control
          Transaction had not occurred; if the Trustee is unable to
          reinvest all such proceeds in appropriate securities, then
          the Company shall make appropriate arrangements (which shall
          be reasonably satisfactory to ALPA and the IAM and shall
          take into account and recognize the position that ESOP
          Participants would have enjoyed had all of the shares of
          Class 1 Non-Voting Stock been sold to the ESOP on the
          Effective Date at a price per share equal to the purchase
          price with respect to the shares sold on the Effective Date)
          to protect the substantive interests of each Employee Group,
          provided, however, that it is not currently intended that
          such arrangements will consist of forgiveness of any portion
          of any Acquisition Loan. For purposes of this Section
          8.2(d), "appropriate securities" shall mean stock (i) that
          is described in Code section 409(l), (ii) that is either
          common stock described in Code section 409 (l)(1) or
          preferred stock that converts into such common stock, and
          (iii) the issuer of which stock (A) has a Moody's senior
          long-term debt rating which is at least as good as the
          better of the Moody's senior long-term debt rating of the
          Company or United Airlines, Inc. at such time and (B) is a
          "public company" as defined in Article Fifth of the Articles
          of Incorporation of the Company. 

               (e) Special Funding Rules. (i) If (x) any person or
          persons commence (which, for purposes of this paragraph,
          shall mean filing a tender offer statement on Schedule 14D-1
          (or successor form) with the Securities and Exchange
          Commission or mailing appropriate solicitation materials to
          the shareholders) a bona fide tender offer or exchange offer
          for Company Stock which, if successful, would require the
          offeror (if a person other than the Company or any of its
          affiliates) to file a Form 13D (or successor form) with the
          Securities and Exchange Commission with respect thereto, or
          (y) the Board of Directors or shareholders approve a Control
          Transaction described in Section 1(q)(b), then all of the
          remaining shares of Class 1 Non-Voting Preferred Stock that
          are to be issued to the Plan pursuant to the
          Recapitalization Agreement shall be sold ("Top-Off Sale") by
          the Company to the Plan as soon as possible (and, in all
          circumstances, in adequate time to allow the Plan to respond
          to such event), pursuant to an Additional Acquisition Loan
          (conforming to the first sentence of Section 1.6(g) of the
          Recapitalization Agreement, provided that the consent of
          ALPA and the IAM required by that sentence shall not apply),
          unless and to the extent that ALPA and the IAM jointly
          request otherwise in writing. (All disputes between the
          Company and ALPA and the IAM as to whether any such tender
          offer or exchange offer is bona fide shall be made in
          accordance with the arbitration procedures described in
          Section 11.2(b)(ii)(G)-(J) hereof.) In the Company's sole
          discretion such Top-Off Sale may be made subject to a
          condition that prevents, to the extent permitted by law, the
          consummation of such Top-Off Sale if the event in question
          does not result in the sale, exchange or other disposition
          of Company Stock, provided that such contingency does not
          materially interfere with the Plan's ability to so respond
          to the event in question. The purchase price of the shares
          of Class 1 Non-Voting Preferred Stock to be sold pursuant to
          this subsection (e) shall be the fair market value of such
          shares of Class 1 Non-Voting Preferred Stock. 

                    (ii) (A) If a person or persons make a bona fide
               offer to the Plan (not covered by paragraph (e)(i)) to
               acquire, directly or indirectly, at least 5% of the
               Company Stock held by the Plan (the "Offer"), such
               Offer shall be treated as if an event described in
               (e)(i) and the resultant Top- Off Sale shall be
               effected in accordance with (e)(i), subject, however,
               to the provisions of (e)(ii)(B).
                
                         (B) In the event of an Offer, the Trustee
                    shall seek directions from Participants regarding
                    the Offer, in accordance with the provisions of
                    this Section 8.2, both as to the actual shares
                    held by the Plan and as to the additional shares
                    that would be held in the Loan Suspense Account if
                    the Top-Off Sale had been effected. If following
                    those directions as to both actual shares and the
                    shares that would be acquired in a Top-Off Sale,
                    and following those directions only as to actual
                    shares would in each case not result in the direct
                    or indirect acquisition of any Company Stock
                    pursuant to the Offer, then the Top-Off Sale shall
                    not be effected; otherwise, the Top-Off Sale shall
                    be effected as contemplated by (e)(i) and
                    (e)(ii)(A).
                
                         (C) Subject to the next sentence, the
                    provisions of (e)(ii)(B) shall not apply and the
                    Top-Off Sale shall be made in accordance with
                    (e)(ii)(A) if following the (e)(ii)(B) procedures
                    could reasonably be expected to prevent a Top-Off
                    Sale from being effected in adequate time to allow
                    the Plan to accept the Offer. Under the
                    circumstances described in this (e)(ii)(C),
                    however, the Top-Off Sale shall be consummated
                    immediately before the consummation of the
                    transaction contemplated by the Offer and shall,
                    to the extent legally permitted, be subject to the
                    consummation of the transaction contemplated by
                    the Offer.

                    (iii) If a Top-Off Sale required by (e)(i) or
               (e)(ii) is not consummated, the Company shall make
               appropriate arrangements (which shall be reasonably
               satisfactory to ALPA and the IAM) to protect the
               substantive interests of the Employee Groups with
               respect to the ESOP and the relevant transaction and
               the purposes of this subsection (e). The appropriate
               arrangements contemplated by the foregoing shall take
               into account and recognize the position that
               Participants would have enjoyed had all of the shares
               of Class 1 Non-Voting Preferred Stock been sold to the
               Plan on the Effective Date at a price per share equal
               to the purchase price with respect to the shares of
               Class 1 Non-Voting Preferred Stock sold on the
               Effective Date. The provisions of this subsection (e)
               and subsection (d) are not mutually exclusive, provided
               that to the extent the sales or other appropriate
               arrangements described in this subsection (e) occur,
               the future sales in connection with Additional
               Acquisition Loans described in subsection (d) shall not
               be required. 

               8.3  No Illegal Actions. Notwithstanding any other
          provision of this Plan, the Trustee shall not be obligated
          to follow the direction of a named fiduciary unless such
          direction is in accordance with the terms of the Plan and is
          proper under ERISA section 403(a)(2) and not contrary to
          Title I of ERISA. 

          SECTION 9

          RIGHTS, RESTRICTIONS AND OPTIONS ON COMPANY STOCK
           
               9.1  Right of First Refusal. If Company Stock
          distributed is not readily tradable on an established market
          (within the meaning of Code section 409(h)), any shares of
          Company Stock distributed by the Trustee shall be subject to
          a "Right of First Refusal." The Right of First Refusal shall
          provide that, prior to any subsequent transfer, such shares
          of Company Stock must first be offered in writing to the
          Trust and, if refused by the Trust, to the Company, at the
          greater of its independently appraised value as of the
          Valuation Date coinciding with or next preceding such offer,
          or the price stated in a bona fide written offer and on the
          same terms. The Trustee (on behalf of the Trust) and the
          Company, as the case may be, shall have a total of 14 days
          (from the date the Trust or the Company, as the case may be,
          receives the offer) to exercise the Right of First Refusal.
          The ESOP Committee shall determine whether a written offer
          from a prospective buyer has been made in good faith. A
          Participant (or Beneficiary) entitled to a distribution of
          Company Stock may be required to execute an appropriate
          stock transfer agreement (evidencing the Right of First
          Refusal) prior to receiving a certificate for Company Stock.
           
               9.2  Put Option. If Company Stock distributed is not
          readily tradable on an established market (within the
          meaning of Code section 409(h)), the Company shall issue a
          "Put Option" to each Participant (or his Beneficiary)
          receiving a distribution of such Company Stock from the
          Plan. The Put Option shall permit the Participant (or his
          Beneficiary) to sell such Company Stock to the Company, at
          any time during two put option periods (described below), at
          the then fair market value, such fair market value to be
          determined at least annually as of the respective Valuation
          Date by an independent appraiser selected by the ESOP
          Committee. The first put option period shall be a period of
          at least 60 days beginning on the date of distribution of
          Company Stock to the Participant (or his Beneficiary). The
          second put option period shall be a period of at least 60
          days beginning after the new determination of the fair
          market value of Company Stock is made by an independent
          appraiser (and notification is given to the Participant or
          his Beneficiary) in the next following Plan Year. The
          Company shall permit the Trustee, in its discretion, to
          purchase the Company Stock tendered to the Company under a
          Put Option. If the Company or the Trustee purchases Company
          Stock tendered under a Put Option and the Company Stock was
          distributed to the Participant (or his Beneficiary) in the
          form of a lump sum, the payment, at the discretion of the
          Company or Trustee, may be made (a) in five substantially
          equal annual installments commencing not later than 30 days
          after the exercise of the Put Option; provided, however,
          that the purchaser provides adequate security and reasonable
          interest (as determined by the ESOP Committee) on unpaid
          installments, or (b) in a lump sum. If the Company or
          Trustee purchases Company Stock tendered under a Put Option
          and the Company Stock was distributed as part of an
          installment distribution, the payment, in the form of a lump
          sum, must be made not later than 30 days after the exercise
          of the Put Option. The Trustee, on behalf of the Trust, may
          offer to purchase any shares of Company Stock (which are not
          sold pursuant to a Put Option) from any former Participant
          or Beneficiary at any time in the future, at its then fair
          market value.

               9.3  Share Legend. Shares of Company Stock held or
          distributed by the Trustee may include such legend
          restrictions on transferability as the Company may
          reasonably require in order to assure compliance with
          applicable federal and state securities laws. Except as
          otherwise provided in this Section 9, no shares of Company
          Stock held or distributed by the Trustee may be subject to a
          put, call or other option, or buy-sell or similar
          arrangement.

               9.4  Nonterminable Rights. The provisions of this
          Section 9 shall continue to be applicable to Company Stock
          even if the Plan ceases to be an "employee stock ownership
          plan" (as defined under Code section 4975(e)(7)). 

          SECTION 10

          DIVIDENDS

               10.1 Class 1 Non-Voting Preferred Stock.

                    (a) Application of Fixed Dividend.

                         (i) Allocated Shares. Any cash dividends paid
                    with respect to shares of Class 1 Non-Voting
                    Preferred Stock allocated to the Participants'
                    ESOP Stock Accounts which were acquired with the
                    proceeds of a particular Acquisition Loan, but
                    excluding dividends in excess of the Fixed
                    Dividend paid on such Preferred Stock, shall be
                    used by the Trustee to pay the principal balance
                    of such Acquisition Loan.
                
                         (ii) Unallocated Shares. Any cash dividends
                    paid with respect to shares of Class 1 Non-Voting
                    Preferred Stock held in the Loan Suspense Account
                    which were acquired with the proceeds of a
                    particular Acquisition Loan, but excluding
                    dividends in excess of the Fixed Dividend paid on
                    such Preferred Stock, shall be used by the Trustee
                    to pay the principal balance of such Acquisition
                    Loan. 

                         (iii) Any cash dividends described in clauses
                    (i) or (ii) in excess of the principal balance of
                    the Acquisition Loan which are attributable to
                    prior fixed dividends that are not paid due to a
                    lack of earnings and profits shall be used to pay
                    interest on such Acquisition Loan if the Company
                    made additional contributions to the Plan to make
                    up for such unpaid fixed dividends. 

                         (iv) Any cash dividends described in clauses
                    (i) or (ii) above not used to repay the
                    Acquisition Loan in accordance with clauses (i),
                    (ii) or (iii) above shall be allocated pursuant to
                    subsection (b) below as if they were dividends in
                    excess of the Fixed Dividend.

                    (b) Application of Excess Dividend.
                
                         (i) Allocated Shares. Any cash dividends paid
                    with respect to shares of Class 1 Non-Voting
                    Preferred Stock allocated to the Participants'
                    ESOP Stock Accounts in excess of the Fixed
                    Dividend paid on such Preferred Stock shall be
                    allocated to such Accounts, pro rata, according to
                    the number of shares of such Preferred Stock held
                    in such Accounts on the dividend record date; such
                    amounts shall be used by the Trustee to purchase
                    shares of Common Stock.
                
                         (ii) Unallocated Shares. Any cash dividends
                    paid with respect to shares of Class 1 Non-Voting
                    Preferred Stock held in the Loan Suspense Account
                    in excess of the Fixed Dividend paid on such
                    Preferred Stock shall be allocated among the
                    Employee Groups in proportion to the allocation
                    percentages set forth in Section 5.4(a)(i)(A). The
                    amount allocated to each Employee Group shall then
                    be allocated to the Participants from that
                    Employee Group, pro rata, according to their Part
                    A Account balances on the dividend record date;
                    such amounts shall be used by the Trustee to
                    purchase shares of Common Stock. 

               10.2 Other Dividends. Any other cash dividends paid on
          Company Stock (excluding Class 1 Non-Voting Preferred Stock)
          shall be used by the Trustee to purchase additional shares
          of Company Stock as provided in Section 5.3. 
           
               10.3 Special Allocated Share Rule. Any Financed Shares
          released from a Loan Suspense Account subaccount by reason
          of dividends paid with respect to Company Stock that was
          acquired with the proceeds of the Acquisition Loan
          applicable to that subaccount shall be allocated in the same
          manner as provided in Section 5.4(a) for Employer
          Contributions; provided, however, that prior to said
          allocation, Financed Shares so released from such subaccount
          with a fair market value (on the applicable dividend payment
          date) equal to the dividends allocated to Participants' ESOP
          Cash Accounts and applied to repay such particular
          Acquisition Loan as provided in Section 10.1 shall first be
          allocated among and credited to those ESOP Stock Accounts,
          pro rata, according to the amount of their dividends so
          applied. To the extent that the fair market value of the
          shares released from a subaccount is less than the dividends
          described in the foregoing proviso, Financed Shares released
          from other Loan Suspense Account subaccounts shall be used
          to make up the insufficiency (after first applying the
          foregoing proviso with respect to Financed Shares released
          from such other subaccount). Notwithstanding any provision
          of the Plan to the contrary, in any Plan Year the total
          dividends allocated to a Participant's ESOP Cash Account
          used to repay Acquisition Loan(s) shall not, to the extent
          required by law, exceed the fair market value of the
          Financed Shares released from the Loan Suspense Account and
          allocated to that Participant's Account.

          SECTION 11

          ADMINISTRATION

               11.1 General. The Company shall be the administrator of
          the Plan and shall have the rights, duties and obligations
          of an "administrator" as that term is defined in ERISA
          section 3(16)(A) and of a "plan administrator" as that term
          is defined in Code section 414(g). Some administrative
          functions have been allocated to the ESOP Committee, which
          shall have the rights, duties and obligations set forth
          herein. The ESOP Committee shall be the "named fiduciary,"
          as described in ERISA section 402, with respect to its
          authority under the Plan, except to the extent provided in
          Section 8, for which each Participant (or Beneficiary) shall
          be the named fiduciary, and except with respect to the
          Initial Acquisition Loan and Additional Acquisition Loans
          and the use of the proceeds thereof to purchase Preferred
          Stock, for which the Trustee shall be the named fiduciary.

               11.2 Membership and Authority.

                    (a) General. The ESOP Committee shall consist of
               six members: three members shall be appointed by ALPA,
               two members shall be appointed by the IAM and one
               member shall be appointed by the Company. Meetings of
               the ESOP Committee shall be held at the executive
               offices of the Company unless a majority of all members
               unanimously agree upon another location. The ESOP
               Committee shall have the following powers, rights and
               duties:

                         (i) to adopt such rules of procedure and
                    regulations for the proper and efficient
                    administration of the Plan and as are consistent
                    with the provisions of the Plan;
                
                         (ii) to enforce the Plan in accordance with
                    its terms and with such applicable rules and
                    regulations as may be adopted by the ESOP
                    Committee;
                
                         (iii) to determine all questions arising
                    under the Plan, to resolve all ambiguities, to
                    correct defects, to supply omissions, including
                    the power to determine the rights or eligibility
                    of Employees or Participants and their
                    Beneficiaries and their respective benefits;
                    provided, however, that the ESOP Committee will
                    not have jurisdiction or power to add to or
                    subtract from the Plan or any amendments thereto;
                
                         (iv) to give such directions to the Trustee
                    with respect to the Trust Fund as may be provided
                    in this Plan or in the Trust Agreement;

                         (v) to maintain and keep adequate books,
                    records and other data as shall be necessary to
                    administer the Plan, except those that are
                    maintained by the Company or by the Trustee; 

                         (vi) to direct all payments of benefits to
                    Participants and Beneficiaries, consistent with
                    the terms of the Plan and the Trust Agreement;
                
                         (vii) to establish an investment policy and
                    objective for the Plan, except that it is
                    understood that the Plan is designed to invest
                    exclusively in Company Stock;
                
                         (viii) to elect a Chairman and to appoint a
                    Secretary, who need not be a member of the ESOP
                    Committee, who shall keep minutes of the
                    proceedings and have custody of all records and
                    documents pertaining to administration of the
                    Plan;
                
                         (ix) to be agent for the service of legal
                    process on behalf of the Plan;
                
                         (x) to authorize one or more of its members
                    to execute any documents on behalf of the ESOP
                    Committee, in which event the ESOP Committee shall
                    notify the Trustee in writing of such action. The
                    certificate of the Secretary or any authorized
                    member of the ESOP Committee that the ESOP
                    Committee has taken or authorized any action shall
                    be conclusive in favor of any person relying on
                    such certificate;
                
                         (xi) to obtain an independent appraisal of
                    the fair market value of the Company Stock held by
                    the Trust from an independent appraiser who meets
                    the requirements of Code section 170(a)(1); and
                
                         (xii) to perform any other acts, consistent
                    with the Plan and Trust Agreement, necessary or
                    appropriate to the administration of the Plan and
                    the discharge of its duties.

                    (b) Special Provisions.
                
                         (i) If the ESOP Committee unanimously agrees
                    that a matter affects members of only one Employee
                    Group, the matter shall be considered by an ESOP
                    Committee consisting solely of members who were
                    appointed on behalf of such Employee Group, which
                    appointees must act by a majority vote, and the
                    provisions of this Section 11.2 shall be construed
                    accordingly. If the ESOP Committee is unable to
                    agree unanimously that the matter affects only
                    members of one such Employee Group, the
                    jurisdictional determination, that is, whether the
                    matter affects only members of one such Employee
                    Group, shall be made by a neutral arbitrator
                    selected in accordance with clause (iii) below. 

                         (ii) As set forth in Section 12.3, the ESOP
                    Committee will have the exclusive power to hear
                    and determine all appeals of claims denied under
                    Section 12.2 of the Plan pursuant to the
                    procedures hereinafter provided. With respect to
                    such disputes, the ESOP Committee will function as
                    a System Board of Adjustment as provided in Title
                    II of the Railway Labor Act, as amended, and the
                    following provisions will govern:

                              (A) The jurisdiction of the ESOP
                         Committee will be exclusive. Appeals may be
                         submitted to the ESOP Committee either by a
                         Participant or a Beneficiary.
                
                              (B) The ESOP Committee will establish
                         rules of procedure for the conduct of appeals
                         before it, which rules will not be
                         inconsistent with the provisions of the Plan.
                         Insofar as possible, such procedures will
                         follow the procedure of the American
                         Arbitration Association. The Chairman will
                         promptly advise the Company, the IAM and ALPA
                         of such rules of procedure. 

                              (C) All appeals properly referred to the
                         ESOP Committee for consideration will be
                         addressed to the Chairman in the form of a
                         submission as prescribed by the rules of
                         procedure. Six copies of each submission,
                         including all papers and exhibits in
                         connection therewith, will be forwarded to
                         the Chairman, who will promptly transmit one
                         copy thereof to each member of the ESOP
                         Committee. The submission in each dispute
                         will include the question to be decided by
                         the ESOP Committee, the provisions of the
                         Plan involved in the dispute, the position of
                         the petitioner and all asserted facts
                         supporting such position.
                
                              (D) The submission will state the names
                         of the parties to whom the petitioner sent
                         copies of the submission. A copy of the
                         submission will be served by the petitioner
                         upon ALPA, the IAM and the Company.
                
                              (E) The submission will state whether or
                         not the petitioner requests both a hearing on
                         the facts and oral argument, or only oral
                         argument. The answer of each party may
                         request a hearing on the facts and oral
                         argument or only oral argument. If neither
                         the submission nor any answer requests a
                         hearing, the ESOP Committee may waive a
                         hearing and dispose of the dispute on the
                         basis of the submission and answers.
                
                              (F) When a hearing has been requested in
                         a dispute, the ESOP Committee will fix a date
                         for such hearing as soon as reasonably
                         possible after receipt of the submission. The
                         date for the hearing will not be more than 60
                         days after receipt of the submission (unless
                         circumstances require a longer period which
                         can be no more than 60 days). If two or more
                         members of the ESOP Committee consider the
                         question involved in the dispute to be of
                         sufficient urgency, the ESOP Committee may
                         fix an earlier date, which will not be less
                         than ten days after filing of the answer. If
                         requested by the ESOP Committee or the
                         Participant, a transcript of each proceeding
                         will be made and retained in the files of the
                         ESOP Committee. Such hearing will be heard at
                         the Company's Executive Offices in Elk Grove
                         Township, Illinois, unless the entire ESOP
                         Committee, by a majority vote, otherwise
                         determines.
                
                              (G) Appeals before the ESOP Committee
                         shall be decided by a majority vote of the
                         members of the ESOP Committee. However, a
                         majority of the members of the ESOP Committee
                         appointed on behalf of any Employee Group has
                         the power to require that any submission
                         (except for matters described in subsection
                         (iv) below) be referred for decision to a
                         neutral arbitrator. Furthermore, if the ESOP
                         Committee deadlocks in the case of any vote,
                         the matter shall be referred for decision to
                         a neutral arbitrator. In any case in which a
                         neutral arbitrator is to be appointed, the
                         parties will, within 10 days after notice of
                         the need to appoint a neutral arbitrator,
                         agree upon a neutral arbitrator. If the
                         parties fail to agree upon the selection of a
                         mutually acceptable neutral arbitrator the
                         parties will select an arbitrator by
                         alternate striking from a panel of
                         arbitrators supplied by the American
                         Arbitration Association, preferably a panel
                         with knowledge of employee stock ownership
                         plans. When an neutral arbitrator is
                         selected, the power to take further action
                         with respect to the dispute shall rest with
                         the neutral arbitrator until the final
                         decision is made in the dispute. 

                              (H) When a neutral arbitrator is
                         selected, any party to a dispute may make a
                         written request to the neutral arbitrator for
                         a further hearing or oral argument provided
                         it is made within 15 days after such
                         selection. The neutral arbitrator will decide
                         such requests. If no further hearing or
                         argument is held, the neutral arbitrator will
                         consider and review the prior record in the
                         dispute. The decision of the neutral
                         arbitrator will be rendered within 30 days
                         after the close of any further hearing or
                         argument. The neutral arbitrator shall decide
                         the matter based upon the record before him
                         and the terms of the Plan and shall not give
                         weight to any previous votes of the ESOP
                         Committee concerning the matter.
                
                              (I) The decision of the ESOP Committee,
                         or neutral arbitrator, if any, will be final
                         and binding upon the Company, ALPA, the IAM,
                         a Participant or Beneficiary and any other
                         person claiming under the Plan.
                
                              (J) Subject to Section 11.12, the
                         expenses and reasonable compensation of the
                         neutral arbitrator selected as provided
                         herein shall be borne by the Company.
                
                         (iii) Except as provided in Section
                    11.2(b)(i), for all other purposes under the Plan,
                    five members of the ESOP Committee will constitute
                    a quorum, except that to constitute a quorum, one
                    member appointed on behalf of each Employee Group
                    must be present. All actions and decisions of the
                    ESOP Committee under this Section 11 shall be by
                    (A) the affirmative vote of a majority of the
                    members present at the meeting at which the vote
                    is being taken or (B) the unanimous written
                    consent of all members then in office. However, a
                    majority of the members of the ESOP Committee
                    appointed on behalf of any Employee Group has the
                    power to require that any action or decision
                    (except as limited in clause (iv) below) be
                    referred for decision to a neutral arbitrator.
                    Furthermore, if the ESOP Committee deadlocks in
                    the case of any vote, the matter shall be referred
                    for decision to a neutral arbitrator. The
                    procedures set forth in subsections 11.2(b)(ii)(G)
                    through (J) shall apply. 

                         (iv) The ESOP Committee is the named
                    fiduciary with respect to the management and
                    disposition of assets held in the Trust Fund. The
                    power of a majority of the members of the ESOP
                    Committee appointed on behalf of any Employee
                    Group to require that a matter be referred to a
                    neutral arbitrator shall not apply to a matter if
                    it concerns the exercise of authority respecting
                    management or disposition of assets held in the
                    Trust Fund. Notwithstanding the preceding
                    sentence, the power of a majority of the members
                    of the ESOP Committee appointed on behalf of any
                    Employee Group to require that a matter be
                    referred to a neutral arbitrator shall apply if
                    (A) the matter does not involve a Control
                    Transaction and (B) it is reasonably determined
                    that the resolution of such matter might
                    reasonably be expected to subject the Company to a
                    material liability. Any dispute with respect to
                    the application of this clause (iv) shall be
                    resolved in accordance with the arbitration
                    procedures described in Section
                    11.2(b)(ii)(G)-(J). 
           
               11.3 Delegation by ESOP Committee. The ESOP Committee
          may establish procedures for allocation of fiduciary
          responsibilities among its members and delegation of
          fiduciary responsibilities to persons other than named
          fiduciaries; provided, however, that the delegation of the
          power to manage or control the assets of the Trust Fund may
          only be delegated to an "investment manager" (as defined in
          ERISA section 3(38)). In exercising its authority to control
          and manage the operation and administration of the Plan, the
          ESOP Committee may employ agents and counsel (who may also
          be employed by or represent any Employer) and to delegate to
          them such powers as the ESOP Committee deems desirable. Any
          such delegation or appointment shall be in writing and shall
          reflect the unanimous action of the ESOP Committee members
          then acting. The writing contemplated by the foregoing
          sentence shall fully describe the advice to be rendered or
          the functions and duties to be performed by the delegate.

               11.4 Information To Be Furnished to ESOP Committee. The
          Employers shall furnish the ESOP Committee such data and
          information as may be reasonably required to administer this
          Plan; provided, however, that the preceding phrase shall not
          in any case restrict the ability of ESOP Committee members
          to see individual Account data with respect to the
          Participants in the Employee Groups they represent and,
          provided, further, that individualized information shall be
          treated in a confidential manner. The ESOP Committee shall
          be entitled to rely on any information furnished by the
          Employers that is needed for calculation of benefits due
          under the Plan, or any matters relating to administration of
          the Plan. A Participant or Beneficiary entitled to benefits
          under the Plan must furnish to the ESOP Committee such
          evidence, data or information as the ESOP Committee
          considers desirable to carry out its obligations under the
          Plan. Any benefits under the Plan may be conditional upon
          the prompt submission of such information. 

               11.5 ESOP Committee's Decision Final. Except as
          otherwise provided herein, to the extent permitted by law,
          any interpretation of the Plan and any decision on any
          matter within the discretion of the ESOP Committee made by
          the ESOP Committee in good faith is binding on all persons.
          Except as provided in ERISA section 405, a dissenting member
          is not responsible for any action or failure to act if
          within a reasonable time he registers his dissent with the
          other members, the Company and the Trustee.

               11.6 Remuneration and Expenses. No remuneration shall
          be paid to any ESOP Committee member who is an Employee of
          the Company or an Affiliate for services performed
          hereunder. However, subject to Section 11.12, the reasonable
          expenses of an ESOP Committee member incurred in the
          performance of an ESOP Committee function shall be
          reimbursed by the Employers. For purposes of the preceding
          sentence, flight pay loss and pay loss for each IAM member
          shall be treated as an expense.

               11.7 Indemnification of the ESOP Committee. To the
          extent permitted by applicable law, the ESOP Committee and
          its members and any employee, director, or officer of the
          Company or its Affiliates, shall be indemnified by the
          Company against any and all liabilities, settlements,
          judgments, losses, costs, and expenses (including reasonable
          legal fees and expenses) of whatever kind and nature which
          may be imposed on, incurred by or asserted against them by
          reason of the performance or nonperformance of their duties
          in connection with the Plan if such action or inaction did
          not constitute gross negligence or willful misconduct.
          Furthermore, the Company agrees to indemnify any such
          persons against any liability imposed as a result of a claim
          asserted by any person or persons under federal or state law
          where such persons act in good faith or in reliance on a
          written direction or certification of the Company. The
          foregoing right of indemnification shall be in addition to
          other rights such persons may have by law or by reason of
          insurance coverage of any kind. The Company may, at its own
          expense, settle any claim asserted or proceeding brought
          against any such persons when such settlement appears to be
          in the best interests of the Company. If the Company obtains
          fiduciary liability insurance to protect the ESOP Committee
          or any of its members, the provisions of this Section 11.7
          shall be applicable only to the extent that such insurance
          coverage is insufficient. The Company shall secure fidelity
          bonding for the fiduciaries of the Plan, as required by
          ERISA section 412 and shall secure insurance for ESOP
          Committee members coextensive with any ERISA insurance
          coverage provided to any member of the Board of Directors
          or, if more favorable, to any Employee. 
           
               11.8 Resignation or Removal of ESOP Committee Member.
          An ESOP Committee member may resign at any time by
          delivering his written resignation to the Company. Each of
          the Company, ALPA and the IAM may remove its ESOP Committee
          members for any reason. In addition, the Company, at its
          discretion, may remove any ESOP Committee member for cause
          upon delivery of written notice to him. Except as provided
          in the preceding sentence, such resignation or removal, as
          the case may be, shall become effective only upon the
          appointment of a qualifying successor member being duly
          appointed in accordance with Section 11.9. For purposes
          hereof, "cause" shall be construed to mean an action
          permitting a member of the Board of Directors to be for
          cause.

               11.9 Appointment of Successor ESOP Committee Members.
          ALPA, the IAM or the Company, as the case may be, shall, in
          accordance with the composition of the ESOP Committee
          described in Section 11.2, promptly fill any vacancy in the
          membership of the ESOP Committee and shall give prompt
          written notice thereof to the other ESOP Committee members,
          the Company and the Trustee. 
           
               11.10  Interested ESOP Committee Member. A member
          may not decide or determine any matter or question
          concerning his own benefits under the Plan or as to how they
          are to be paid to him unless either such decision could be
          made by him under the Plan if he were not a member of the
          ESOP Committee, or such decision applies to all affected
          Participants similarly. If a member is disqualified to act,
          and the remaining members of the ESOP Committee cannot agree
          on a decision, ALPA, the IAM or the Company, as the case may
          be, may appoint a temporary member to exercise the powers of
          the interested member concerning the matter as to which he
          is disqualified.

               11.11  Compliance with Laws. Notwithstanding
          anything in the Plan or the Trust Agreement to the contrary,
          every individual who is a fiduciary with respect to the Plan
          shall exercise his responsibilities with respect to the Plan
          in a manner consistent with ERISA and other applicable laws.
           
               11.12  Expenses of the Plan and Trust. All
          reasonable expenses of administering the Plan and Trust
          shall be charged to and paid by the Employers; provided,
          however, that, in the case of a dispute between the Company
          and the Committee, the reasonableness of any expense shall
          be determined without regard to Sections 11.5 and
          11.2(b)(ii)(I), and, provided, further, that in the event of
          any disagreement with respect to the reasonableness of an
          expense, neither a determination of the ESOP Committee that
          an expense is reasonable nor a determination by the Company
          that an expense is unreasonable shall be accorded any
          presumption of correctness. Unless the Company and ESOP
          Committee otherwise agree, such disagreement shall be
          resolved through the judicial process and the Company shall
          pay the reasonable expenses of litigation (and with regard
          to these expenses, the ESOP Committee's determination of
          reasonableness shall be conclusive). The reasonableness of
          any expense with respect to the Plan or Trust shall be
          determined by taking into account, inter alia, (a) the
          appropriateness and magnitude of the expense, (b)
          comparative reference to the types and amounts of expenses
          incurred by other very large employee stock ownership plans
          that own a significant portion of the employer's outstanding
          stock, (c) the complexity and size of this Plan and (d) the
          special purposes for which this Plan was established.
          Payment of expenses shall not be deemed to be Employer
          Contributions.

          SECTION 12

          CLAIMS PROCEDURE

               12.1 Written Claim. The Company, which may delegate its
          authority, shall be the fiduciary for the initial decision
          on claims for benefits under the Plan. A Participant (or
          Beneficiary) may present a claim to the Company for any
          unpaid benefits. The Company shall establish procedures for
          action upon claims initially made and the communication of a
          decision to the claimant promptly and, in any event, not
          later than 90 days after the claim is received, unless
          special circumstances require an extension of time for
          processing the claim. If an extension is required, notice of
          the extension shall be furnished the claimant prior to the
          end of the initial 90-day period, which notice shall
          indicate the reasons for the extension and the expected
          decision date. The extension shall not exceed 90 days. The
          claim may be deemed by the claimant to have been denied for
          purposes of further review described below in the event a
          decision is not furnished to the claimant within the period
          described in the three preceding sentences. If the claim for
          benefits is wholly or partially denied, the Company shall
          notify the Participant (or Beneficiary) in writing of such
          denial of benefits within 90 days after the Company
          initially received the benefit claim. Such 90-day period may
          be extended for an additional 90 days if the Company
          provides written notice of the extension to the claimant
          prior to the termination of such 90-day period and the
          extension is based on special circumstances.

               12.2 Notice of Denial. A notice of a denial of benefits
          shall advise the Participant (or Beneficiary) of:

                    (a) the specific reason or reasons for the denial;

                    (b) the specific provisions of the Plan on which
               the denial is based; 

                    (c) any additional material or information
               necessary for the Participant (or Beneficiary) to
               perfect his claim and an explanation of why such
               material or information is necessary; and

                    (d) the steps which the Participant (or
               Beneficiary) must take to have his claim for
               benefits reviewed.

               12.3 Review Procedure. Each Participant (or
          Beneficiary) whose claim for benefits has been denied shall
          have the opportunity to file a written request pursuant to
          Section 11.2(b)(ii) for a full and fair review of his claim
          by the ESOP Committee, to review all documents pertinent to
          his claim, and to submit a written statement regarding
          issues relative to his claim. Such written request for
          review of his claim must be filed pursuant to the procedure
          set forth in Section 11.2(b)(ii) by the Participant (or
          Beneficiary) within 60 days after receipt of written
          notification of the denial of his claim. 
           
               12.4 Notices. All notices denying a claim for benefits,
          and all decisions on requests for a review of the denial of
          a claim for benefits, shall be written in a manner
          calculated to be understood by the Participant (or
          Beneficiary) filing the claim or requesting the review.

          SECTION 13

          AMENDMENT AND TERMINATION

               13.1 Amendment.

                    (a) While the Company expects and intends to
               continue the Plan, the Company must necessarily
               reserve, and does hereby reserve, the right to amend
               the Plan, at any time; provided, however, that, subject
               to Sections 13.1(b), (c), and (d) hereof and Section
               1.6(g) of the Recapitalization Agreement (relating to
               skipped dividends), no amendment may be adopted without
               the approval of both ALPA and the IAM.

                    (b) With respect to selected "intra-group
               matters," however, the Company may amend the Plan with
               respect to the Salaried and Management Group and shall
               amend the Plan as reasonably requested by ALPA and the
               IAM for their respective Employee Groups. An amendment
               relates to an "intra- group matter" only if it relates
               to eligibility, or allocation and does not relate to
               any other matter, including, without limitation,
               withdrawal, loan, voting, vesting or fiduciary
               provisions; provided, however, that no amendment may be
               made which shall disqualify the Plan or extend
               allocations hereunder beyond the year 2000 or affect
               the pace of allocations of Company Stock in a manner
               that would adversely affect the Plan's projected
               ability to meet the requirements of Code Section
               415(c)(6) (which last requirement may be waived by
               ALPA). Notwithstanding the preceding sentence, with
               respect to an intra-group matter, the Company need not
               and cannot (without the required consent) adopt any
               amendment if it would entail an additional annual
               expense in excess of approximately $25,000 or if the
               Company reasonably believes the Company will be exposed
               to a material liability if the amendment is adopted
               and, provided, further, that disputes under this
               subsection (b) shall be resolved by the arbitration
               procedures of Section 11.2(b)(ii). Finally, the Company
               may not adopt with respect to Management and Salaried
               Employees and neither ALPA nor the IAM may require the
               Company to adopt more than three amendments under this
               Section 13.1(b) and, in the case of the ALPA Employee
               Group and the Management and Salaried Employee Group,
               no amendment may require that allocations be based on
               factors other then Compensation, Account balances,
               dividends, and dividend credits. 

                    (c) ALPA and the IAM shall be accorded an adequate
               opportunity to review any submission referred to in the
               first sentence of Section 7(a) of the Preferred Stock
               Purchase Agreement, and they shall have the right to
               participate in the consideration of any amendment
               required by the second sentence of Section 7(a) of the
               Preferred Stock Purchase Agreement. If an amendment to
               the Plan or Trust is required to result in the issuance
               of a determination letter described in such Section
               7(a), and if there is more than one form of amendment
               that would result in such issuance, the Company, ALPA,
               and the IAM shall agree on the form of such amendment;
               provided, that if the three persons cannot timely
               agree, an arbitrator shall be immediately selected
               pursuant to the procedures set forth in Section
               11.2(b)(ii). Such arbitrator shall select the amendment
               that would result in such issuance and that best
               carries out the purposes of this Plan at a reasonable
               expense.

                    (d) Finally, the approval of ALPA and the IAM
               shall not be required with respect to an amendment if
               such amendment (w) is in connection with an extension
               of an Acquisition Loan in accordance with its terms,
               (x) extends the allocation period applicable to the
               Salaried and Management Group, (y) will not cause any
               extension in the allocation period applicable to the
               ALPA Employee Group or the IAM Employee Group, and (z)
               the failure to adopt the amendment would make it
               impossible to successfully complete the steps described
               in Section 5.4(a)(i) through (vii) without changing the
               percentages set forth in Section 5.4(a)(i)(A). The
               Company agrees that its authority to extend an
               Acquisition Loan shall be conditioned on enactment of
               an amendment accomplishing the goals of the prior
               sentence. ALPA and the IAM shall have the unilateral
               power to require the Company to extend an Acquisition
               Loan and adopt an amendment identical to that described
               in the preceding two sentences, so long as the
               protections described in the preceding two sentences
               are accorded to the Employee Groups for which the
               amendment is not required.

                    (e) An amendment under Subsection (b) or (d) shall
               not be effective unless advance notice of at least 10
               days before adoption is given to ALPA, the IAM, and the
               Board of Directors. Such advance notice may be waived
               by the party to whom notice is otherwise due.

               13.2 Termination. Subject to the approval of ALPA and
          the IAM, the Plan will terminate as to all of the Employers
          on any date specified by the Company. 
           
               13.3 Merger and Consolidation of Plan; Transfer of Plan
          Assets. No merger or consolidation with, or transfer of
          assets to, any other plan may be effected without the
          consent of ALPA and the IAM. In the case of any merger or
          consolidation with, or transfer of assets and liabilities
          to, any other plan, provisions shall be made so that each
          Participant in the Plan on the date thereof, if the Plan was
          then terminated, would receive a benefit immediately after
          the merger, consolidation or transfer that is equal to or
          greater than the benefit he would have been entitled to
          receive immediately prior to the merger, consolidation or
          transfer, if the Plan had then terminated. Notwithstanding
          the preceding language, in the event of a merger, if the
          surviving corporation of the merger agrees to continue the
          Plan, no termination or partial termination will be deemed
          to have occurred. This Section 13.3 does not apply to
          transfers or rollovers described in Sections 7.1 and 7.5.

               13.4 Distribution on Termination. If, on termination of
          the Plan, a Participant remains an Employee of his Employer
          or any of its Affiliates, the amount of the Participant's
          benefits may be retained in the Trust until after the
          Participant's termination of employment with his Employer
          and any of its Affiliates and shall be paid to such
          Participant or, in the event of the Participant's death, to
          his Beneficiary, in a lump sum. The benefits payable to a
          Participant whose employment with his Employer or any of its
          Affiliates is terminated coincident with the termination of
          the Plan shall be paid to the Participant or, in the event
          of the Participant's death, to his Beneficiary, in a lump
          sum. All appropriate accounting provisions of the Plan will
          continue to apply until the benefits of all affected persons
          have been distributed to them. Affected Participants will be
          notified of an amendment, termination or partial termination
          of the Plan, as required by law.

          SECTION 14

          TOP-HEAVY PROVISIONS

               14.1 Top-Heavy Provisions. If, as of the last day of
          the first Plan Year, or thereafter, if as of the day next
          preceding the beginning of any Plan Year (the "Determination
          Date"), the Plan is a "top-heavy plan" (determined in
          accordance with the provisions of Code section 416(g)); that
          is, the aggregate present value of the accrued benefits and
          account balances of all "Key Employees" (within the meaning
          of Code section 416(i) and for this purpose using the
          definition of Compensation, as modified under Section
          5.5(b)) and their Beneficiaries exceeds 60% of the aggregate
          present value of the accrued benefits and account balances
          of all Participants and Beneficiaries, the amendments
          specified in this Section 14 will automatically become
          effective as of the first day of the Plan Year. For purposes
          of the above sentence, the aggregate present value of the
          accrued benefits and account balances of a Participant who
          has not performed any services for the Company or any of its
          Affiliates during the five year period ending on the
          Determination Date shall not be taken into account. This
          calculation shall be made in accordance with Code section
          416(g), taking into consideration plans which are considered
          part of the Aggregation Group. The term "Aggregation Group"
          shall include each plan of the Company or any of its
          Affiliates that includes a Key Employee and each plan of the
          Company or any of its Affiliates that allows the Plan to
          meet the requirements of Code section 401(a)(4) or Code
          section 410 and may include any other plan of the Company or
          any of its Affiliates, if the Aggregation Group would
          continue to meet the requirements of Code sections 401(a)(4)
          and 410.

               14.2 Amendments.

                    (a) Minimum Accruals. Section 3 will be modified
               to provide that the aggregate amount of Employer
               Contributions allocated in each Plan Year to the
               Accounts of each Participant who is a Non-Key Employee
               (within the meaning of Code section 416(i)(1)), and who
               is employed by an Employer as of the last day of the
               Plan Year, may not be less than the lesser of: 

                          (i) three percent of his Compensation for
                    the Plan Year; and
                
                         (ii) a percentage of his Compensation equal
                    to the largest percentage obtained by dividing the
                    sum of the amount credited to the Accounts of any
                    Key Employee by that key Employee's Compensation;
                    and

                    (b) Code section 415(e). Section 5.5 will be
               amended to provide that the dollar limitations in the
               denominators of the "defined benefit plan fraction" and
               "defined contribution plan fraction" (as such terms are
               defined in Code section 415(e)) will be multiplied by
               1.0 instead of 1.25. However, the above sentence shall
               not apply if "four percent" is substituted for "three
               percent" in paragraph (a) above. 
           
               The preceding provisions will remain in effect for the
               period in which the Plan is top-heavy. If, for any
               particular year thereafter, the Plan is no longer
               top-heavy, the provisions contained in this Section 14
               shall cease to apply, except that any previously vested
               portion of any Account balance shall remain
               nonforfeitable.

               14.3 Super Top-Heavy Provisions. If, as of a
          Determination Date, the aggregate present value of the
          accrued benefits and Account balances of all "Key Employees"
          (within the meaning of Code section 416(i)) and their
          Beneficiaries exceeds 90% of the aggregate present value of
          the accrued benefits and Account balances of all
          Participants and Beneficiaries, paragraph (a) of Section
          14.2 will automatically become effective as of the first day
          of such Plan Year, except that Section 14.2(b) will be
          modified to provide that the dollar limitations in the
          denominators of the defined benefit plan fraction and
          defined contribution plan fraction in Section 5.5 shall be
          multiplied by 1.0 instead of 1.25, whether or not the
          minimum benefit is increased under Section 14.2(a). 
           
               14.4 Special Rule. The provisions of this Section 14
          shall not apply to Employees included in a unit of Employees
          covered by a collective bargaining agreement to the extent
          provided by Code section 416(i)(4). 
                
          SECTION 15

          MISCELLANEOUS

               15.1 Qualification. The Plan is designed and intended
          to comply with the requirements of Code section 401(a) so
          that contributions and the income on assets in Participants'
          Accounts will be exempt from Federal income tax until
          distributed. Accordingly, the adoption of the Plan and the
          implementing Trust and contributions hereunder are
          contingent upon and subject to obtaining a written
          determination of the Internal Revenue Service that the Plan
          complies with the requirements of Code section 401(a) and
          that the Trust is exempt from taxation under Code section
          501(a).

               15.2 Reversions to Employer. All contributions
          hereunder are expressly conditioned on their deductibility
          under Code section 404 and the initial qualification of the
          Plan. Notwithstanding anything to the contrary contained in
          the Plan, or in any amendment hereto, if (a) any
          contribution has been made by an Employer by a mistake of
          fact, or (b) the initial qualification of the Plan under
          Code section 401(a) has been denied, or (c) any deduction
          for a contribution has been disallowed, the Trustee shall
          return the entire Trust assets if clause (a) applies or such
          contribution (or the value thereof if lower than the amount
          of such contribution) to the Company, but in no event shall
          any such return be made after the expiration of one year
          following (i) the payment thereof in the case of clause (a)
          above, (ii) the denial of qualification in case of clause
          (b) above, or (iii) the disallowance of the deduction in the
          case of clause (c) above; provided, however, that prior to
          any such return, Appropriate Arrangements shall be made with
          ALPA and the IAM to protect the substantive rights of each
          Employee Group under the Plan.

               15.3 Governing Law. The Plan shall be construed and
          administered according to the laws of the State of Illinois
          to the extent that such laws are not preempted by the laws
          of the United States of America.

               15.4 Notices. Any notice, communication or document
          required hereunder to be given to, or filed with, the ESOP
          Committee, any union, the Company or any other person shall
          be properly given or filed if it is in writing and delivered
          in person or by mail (including federal express, telex and
          facsimile transmission) addressed,

                If to ALPA, to:

                    UAL-MEC/ALPA
                    6400 Shafer Court
                    Suite 700
                    Rosemont, IL 60018
                    Telephone: (708) 292-1700
                    Telecopy: (708) 292-1760

                     Attention: Captain Roger D. Hall
           


               If to IAM, to:
                    International Association of Machinists
                    and Aerospace Workers
                    9000 Machinists Place
                    Upper Marlboro, MD 20772-2687
                    Telephone: (301) 967-4500
                    Telecopy: (301) 967-4591 

                    Attention: William L. Scheri 
                
                    IAM District Lodge 141
                    321 Allerton Avenue
                    South San Francisco, CA 94080
                    Telephone: (415) 873-0662
                    Telecopy: (415) 873-1676

                    Attention: Kenneth W. Thiede 

           If to the Company, to:
                     UAL Corporation
                    1200 E. Algonquin Road
                    Elk Grove Township, IL 60007
                    Telephone: (708) 956-2400
                    Telecopy: (708) 952-4683
                
                    Attention:     Chief Executive Officer and
                           Chief Legal Officer


               If to any member of the ESOP Committee, to such member
               at his or her home address, with a copy to his or her
               respective Union at the address set forth above.

               If to any other person, to:

                    such address or telecopy number as such person may
                    hereafter specify for such purpose.

          or such other address or telecopy number as any of the above
          may hereafter specify for such purpose by notice in
          accordance with the foregoing. Each such notice, request or
          other communication shall be effective (i) if given by
          facsimile, when received by the addressee using the
          facsimile number specified in this Section, as evidenced by
          an automated confirmation receipt from the sending facsimile
          machine or (ii) if given by any other means, when delivered
          at the address specified in this Section.

               15.5 Evidence. Evidence required of anyone under the
          Plan may be by certificate, affidavit, document or other
          information which the person acting on it considers
          pertinent and reliable, and signed, made or presented by the
          proper party or parties.

               15.6 Action by Employer. Any action required or
          permitted to be taken by an Employer under the Plan
          (including any power of the Company to amend or to terminate
          the Plan as provided herein) shall be by resolution of its
          board of directors or by a person or persons authorized by
          its board of directors. 
           
               15.7 Execution. To record the adoption of this Plan,
          the undersigned duly authorized officers of the Company have
          caused this document to be executed and to bear the
          corporate seal of the Company, all as of the Effective Date.

               15.8 Adjustments. This Plan contains various references
          to Class 1 and/or Class 2 Non-Voting Preferred Stock. If and
          to the extent appropriate, an appropriate revision shall be
          made to such references if the outstanding number of shares
          of Class 1 and/or Class 2 Non-Voting Preferred Stock is
          changed into, or exchanged for, a different number or kind
          of shares or securities of the Company through a
          reorganization or merger, or through a combination,
          recapitalization, reclassification, stock consolidation or
          otherwise. 

                                         UAL CORPORATION

                                         By: /s/ Joseph R. O'Gorman
                                             _______________________

                                      Title: Executive Vice President
           
          Dated: July 12, 1994


EX-10
3
EXHIBIT 10.2

                                                       EXHIBIT 10.2

                              UAL CORPORATION

                       EMPLOYEE STOCK OWNERSHIP PLAN

                              TRUST AGREEMENT

                                  Between

                              UAL CORPORATION 

                                    and

                    STATE STREET BANK AND TRUST COMPANY

                                                       July 12, 1994


                             TABLE OF CONTENTS

                    RECITALS . . . . . . . . . . . . . . . . . .    

     ARTICLE I      DEFINITIONS  . . . . . . . . . . . . . . . .    

     ARTICLE II     ESTABLISHMENT OF THE TRUST . . . . . . . . .    

     ARTICLE III    POWERS OF TRUSTEE  . . . . . . . . . . . . .    

     ARTICLE IV     ADMINISTRATION . . . . . . . . . . . . . . .    

     ARTICLE V      PAYMENTS OF BENEFITS AND EXPENSES  . . . . .    

     ARTICLE VI     LIABILITY AND INDEMNIFICATION
                      OF THE TRUSTEE . . . . . . . . . . . . . .    

     ARTICLE VII    ACCOUNTING OF THE TRUSTEE  . . . . . . . . .    

     ARTICLE VIII   REMOVAL AND RESIGNATION OF THE
                      TRUSTEE  . . . . . . . . . . . . . . . . .    

     ARTICLE IX     AMENDMENT AND TERMINATION  . . . . . . . . .    

     ARTICLE X      LEVERAGED ACQUISITIONS OF QUALIFYING
                      STOCK  . . . . . . . . . . . . . . . . . .    

     ARTICLE XI     MISCELLANEOUS  . . . . . . . . . . . . . . .    



                              UAL CORPORATION

                       EMPLOYEE STOCK OWNERSHIP PLAN

                              TRUST AGREEMENT

               THIS AGREEMENT has been made as of the 12th day of
     July, 1994, between UAL CORPORATION, a corporation organized
     under the laws of the State of Delaware with its principal place
     of business in Elk Grove Township, Illinois (hereinafter referred
     to as the "Company"), and STATE STREET BANK AND TRUST COMPANY, a
     Massachusetts trust company with its principal place of business
     at 225 Franklin Street, Boston, Massachusetts (hereinafter
     referred to as the "Trustee").

                                  RECITALS

               WHEREAS, the Company has adopted the UAL Corporation
     Employee Stock Ownership Plan (the "Plan") for the benefit of
     certain employees of the Company and its Affiliates; and

               WHEREAS, the Plan consists of two portions, a
     "leveraged" portion (Part A) that is intended to be an employee
     stock ownership plan and an "unleveraged" portion (Part B); and

               WHEREAS, Part A consists of both a stock bonus plan
     component and a money purchase pension plan component and Part B
     consists solely of a stock bonus component; and

               WHEREAS, the Plan provides for the establishment of a
     trust (the "Trust") to hold, invest and administer amounts
     contributed under both Part A and Part B of the Plan; and

               WHEREAS, in order to effectuate the Plan, the Company
     desires to establish a Trust, designed to meet the applicable
     requirements of the Internal Revenue Code of 1986, as amended
     (the "Code"), and the Employee Retirement Income Security Act of
     1974, as amended ("ERISA"); and

               WHEREAS, Part A and Part B are intended to qualify
     under Section 401(a) of the Code and Part A is intended to
     qualify under Section 4975(e)(7) of the Code and to meet the
     requirements of Section 4975(d)(3) of the Code, and the Trust is
     intended to be exempt from federal income taxation under Section
     501(a) of the Code; and

               WHEREAS, the authority to manage and control the
     operation and administration of the Plan is vested in the UAL
     Employee Stock Ownership Plan ESOP Committee, as named fiduciary
     as provided in the Plan, which named fiduciary shall have such
     authorities and shall be subject to such duties with respect to
     the Trust as are specified in this Agreement and the Plan; and

               WHEREAS, cash, property and/or Company Stock (as
     hereinafter defined) will from time to time be contributed to or
     purchased by the Trustee, which assets, as and when received by
     the Trustee, will constitute a trust fund to be held for the
     exclusive benefit of the participating employees under the Plan
     or their beneficiaries and to defray reasonable expenses of
     administering the Plan; and

               WHEREAS, the Company desires the Trustee to hold and
     administer such trust fund and the Trustee is willing to hold and
     administer such trust fund pursuant to the terms of this
     Agreement:

               NOW, THEREFORE, in consideration of the premises and of
     the mutual covenants herein contained, and intending to be
     legally bound hereby, the Company and the Trustee do hereby
     covenant and agree as follows:

                                 ARTICLE I

                                DEFINITIONS

               Definitions.  All defined terms used herein have the
     meaning assigned to them in the Plan, except as otherwise
     provided herein, and unless the context otherwise requires or
     unless specifically provided, all provisions of this Agreement
     shall apply to both Part A and Part B.  The following terms as
     used in this Agreement have the meaning indicated unless the
     context requires otherwise:

               1.1  "Affiliate" means any corporation, trade or
     business, which, at the time of reference, is together with the
     Company, a member of a controlled group of corporations, a group
     of trades or businesses (whether or not incorporated) under
     common control or an affiliated service group, as described in
     Code sections 415(b), 414(c) and 414(m), respectively, or any
     other organization treated as a single employer under Code
     section 414(o); provided, however, that, where the context so
     requires, the term "Affiliate" shall be construed to give full
     effect to the provisions of Code sections 409(l)(4) and 415(h).

               1.2  "Acquisition Loan" means a loan (or other
     extension of credit, including an installment obligation to a
     party in interest (as defined in ERISA Section 3(14)) incurred by
     the Trustee in connection with the purchase of Qualifying
     Employer Securities.

               1.3  "Beneficiary" means the person or persons to whom
     a deceased Participant's benefits are payable under the Plan. 

               1.4  "Board of Directors" means the Board of Directors
     of the Company.

               1.5  "Company" means UAL Corporation and any successor
     thereto.

               1.6  "Company Stock" means any stock issued by the
     Company (or a corporation which is a member of the same
     controlled group) which meet the requirements of Section 407 of
     ERISA or Section 409(l) of the Code.

               1.7  "Employee Group" means "Employee Group" as defined
     in the Plan.

               1.8  "ERISA" means the Employee Retirement Income
     Security Act of 1974, as amended, and all successor laws thereto.

               1.9  "ESOP Committee" means the committee appointed to
     administer the Plan pursuant to Section 11 thereof.

               1.10 "Fund" means the contributions of cash or property
     reasonably acceptable to the Trustee, including, but not limited
     to, Company Stock deposited with or purchased by the Trustee and
     held under this Trust by the Trustee, any property into which the
     same or any part thereof may from time to time be converted, and
     any appreciation therein or income thereon less any depreciation
     therein, any losses thereon and any distributions or payments
     therefrom.

               1.11 "Participant" means an employee of the Company or
     any Affiliate or any other person who has an account balance
     under the Plan.

               1.12 "Prohibited Transaction" means a prohibited
     transaction under Sections 406 of ERISA and/or Section 4975(c)(1)
     of the Code which is not exempt under Section 408 of ERISA or
     Sections 4975(c)(2) or 4975(d) of the Code, as the case may be.

               1.13 "Qualifying Employer Securities" means shares of
     stock, common or preferred, issued by the Company (or a
     corporation which is a member of the same controlled group) which
     meets the requirements of Section 409(l) of the Code.

                                 ARTICLE II

                         ESTABLISHMENT OF THE TRUST

               2.1  The Company hereby establishes with the Trustee a
     trust for the purpose of holding and administering the Fund in
     accordance with this Agreement.

               2.2  Notwithstanding anything to the contrary in this
     Agreement, or in any amendment thereto, except as otherwise
     provided under ERISA, the Company, the ESOP Committee and the
     Trustee shall discharge their respective duties with respect to
     the Fund for, and the Fund shall be used solely for and not
     diverted from, the exclusive purposes of providing benefits for
     Participants and their Beneficiaries and defraying reasonable
     expenses of administering the Plan.  Notwithstanding the
     preceding sentence, however, contributions shall be returned by
     the Trustee to the Company at the direction of the ESOP Committee
     if (i) the ESOP Committee certifies in writing to the Trustee
     that one or more of the circumstances listed below exist and (ii)
     prior to any such return of contributions, appropriate
     arrangements shall have been made to protect the substantive
     rights of each Employee Group under the Plan:

               2.2.1  if a contribution is made by the Company by
          reason of a mistake of fact, the contribution or the then
          current value thereof, if less, shall be returned to the
          Company without interest within one year after it was paid
          to the Trustee;

               2.2.2.  if the deduction of a contribution is
          disallowed by the Internal Revenue Service, the
          contribution, or the then current value thereof, if less, to
          the extent the deduction is disallowed shall be returned to
          the Company without interest within one year after the
          disallowance; and

               2.2.3.  if the initial qualification of the Plan under
          Sections 401, 409 and 4975(e)(7) of the Code is denied, the
          entire Fund or the then current value thereof, if less,
          shall be returned to the Company without interest within one
          year after such qualification has been denied.

               2.3  The Trustee shall receive any contributions paid
     to it in cash, in Company Stock or in other property acceptable
     to it. All contributions so received, together with the income
     therefrom and any other increment thereon, shall be held, managed
     and administered by the Trustee pursuant to the terms of this
     Agreement without distinction between principal and income and
     without liability for the payment of interest thereon.  The
     Trustee shall not be responsible for the collection of any
     contributions to the Plan, or for the determination of the amount
     or frequency of any contribution required by the Plan or the
     provisions of the Code or ERISA, which responsibilities shall be
     borne solely by the ESOP Committee.

                                ARTICLE III

                             POWERS OF TRUSTEE

               3.1  The Trustee shall maintain books of account and
     records with respect to the Fund.  The Fund shall be held by the
     Trustee in trust and dealt with in accordance with the provisions
     of this Agreement.  The Trustee shall take all action necessary
     to implement any written directions received from the ESOP
     Committee and shall conform to procedures established by the ESOP
     Committee for disbursement of funds in accordance with the terms
     of the Plan.

               3.2  It shall be the duty of the Trustee (a) to hold,
     invest and reinvest the Fund in accordance with the provisions of
     this Agreement, and (b) to pay moneys therefrom in accordance
     with the written directions of the ESOP Committee.

               3.3  Subject to Paragraphs 3.6, 3.7 and 3.8, at the
     direction of the ESOP Committee, the Trustee shall invest the
     assets of the Fund exclusively in Company Stock (except for
     di minimis investments in cash or cash equivalents pending
     investment in Company Stock or pending distributions to
     Participants); provided, however, that the portion of the Fund
     attributable to Part A of the Plan is intended to be invested
     primarily in Qualifying Employer Securities.  To the extent that
     Company contributions are made in Company Stock, the Trustee
     shall retain such Company Stock unless otherwise directed by the
     ESOP Committee.  To the extent Company contributions are made in
     cash and are not used to pay principal or interest on an
     Acquisition Loan pursuant to Article X or to pay expenses of the
     Fund, the Trustee shall, at the direction of the ESOP Committee,
     acquire Company Stock.  If at the time Company Stock is to be
     purchased, the Company has outstanding more than one class of
     Company Stock, the ESOP Committee shall direct the Trustee as to
     which class of Company Stock shall be purchased.  Subject to
     Paragraph 3.8, the Trustee may rely in good faith without
     liability upon the valuation of Company Stock as determined by
     the ESOP Committee.  The Trustee may also, at the direction of
     the ESOP Committee, invest the Fund in temporary investments
     other than Company Stock, may hold such portion of the Fund in
     such investments as may be required under the investment
     diversification provision of the Plan, may hold such portion of
     the Fund uninvested as the ESOP Committee deems advisable for
     making distributions under the Plan, may invest assets of the
     Fund in short-term investments bearing a reasonable rate of
     interest, including without limitation, deposits in, or
     short-term instruments of, the Trustee, or in one or more
     short-term collective investment funds administered by the
     Trustee as trustee thereof for the collective investment of
     assets of employee pension or profit-sharing trusts, as long as
     each such collective investment fund constitutes a qualified
     trust under the applicable provisions of the Code (and while any
     portion of the Fund is so invested, such collective investment
     funds shall constitute part of the Plan to the extent of such
     investment, and the instrument creating such funds shall
     constitute part of this Agreement).

               3.4  The Trustee shall have no duty hereunder to
     determine or inquire into whether any directions received from
     the ESOP Committee in accordance with the terms of this Agreement
     represent proper and lawful decisions or result in Prohibited
     Transactions.  The Trustee shall have no duty to review any
     investment to be acquired, held or disposed of pursuant to such
     instructions from the ESOP Committee.  If the Trustee does not
     receive written directions with respect to any part of the Fund
     subject to the ESOP Committee's direction (including, without
     limitation, income, sale proceeds or contributions), the Trustee
     shall, pending receipt of such directions, hold and invest such
     amount in short-term securities as provided in Paragraph 3.3
     hereof.

               3.5  In addition to, and not in limitation of, the
     powers now, or which may later become, vested in it, the Trustee
     shall have the following powers; provided, however, that the
     Trustee's exercise of such powers shall be consistent with and
     subject to all other provisions of this Agreement, and provided
     further that, subject to the provisions of Paragraph 3.6, 3.7,
     and 3.8, the powers set forth in Paragraphs 3.5.1, 3.5.2, 3.5.3,
     and 3.5.4 shall be exercised by the Trustee only to the extent
     and in the manner directed by the ESOP Committee, a Participant
     or a Beneficiary in accordance with the terms of this Agreement,
     except as otherwise required by ERISA:

               3.5.1  To hold, invest and reinvest the principal or
          income of the Trust in bonds, common or preferred stock,
          other securities, or other personal, real or mixed tangible
          or intangible property, including any securities issued by
          the Company or its Affiliates (including investment in
          deposits with Trustee which bear a reasonable interest rate,
          including without limitation investments in trust savings
          accounts, certificates of deposit, time certificates or
          similar investments or deposits maintained by the Trustee);

               3.5.2  To exercise voting rights either in person or by
          proxy, with respect to any securities or other property, and
          generally to exercise with respect to the Fund all rights,
          powers and privileges as may be lawfully exercised by any
          person owning similar property in his own right;

               3.5.3  To exercise any options, conversion rights, put
          rights, or rights to subscribe for additional stocks, bonds
          or other securities appurtenant to any securities or other
          property held by it, and to make any necessary payments in
          connection with such exercise, and to join in, dissent from,
          and oppose the reorganization, consolidation,
          recapitalization, liquidation, merger or sale of corporate
          property with respect to any corporations or property in
          which it may be interested as Trustee;

               3.5.4  To compromise, compound, and settle any debt or
          obligation owing to or from it as Trustee, and to reduce or
          increase the rate of interest on, extend or otherwise
          modify, foreclose upon default, or otherwise enforce any
          such obligation;

               3.5.5  To sue or defend suits or legal proceedings to
          enforce or protect any interest of the Trust, and to
          represent the Trust in all suits or legal proceedings in any
          court or before any other administrative agency, body or
          tribunal, provided that the Trustee is indemnified to the
          Trustee's satisfaction against liability and expenses;

               3.5.6  To hold any property at any place, except that
          it shall not maintain the indicia of ownership of any assets
          of the Fund outside the jurisdiction of the district courts
          of the United States except as permitted by regulations
          issued by the Secretary of Labor of the United States under
          ERISA Section 404(b);

               3.5.7  To make, execute, acknowledge and deliver
          assignments, agreements and other instruments;

               3.5.8  To register any securities held by it hereunder
          in its own name or in the name of a nominee with or without
          the addition of words indicating that such securities are
          held in a fiduciary capacity, to permit securities or other
          property to be held by or in the name of others, to hold any
          securities in bearer form and to deposit any securities or
          other property in a depository, clearing corporation or
          similar corporation, either domestic or foreign; provided,
          however, that the records of the Trustee shall at all times
          show that any such property held or registered in the name
          of another is part of the Fund;

               3.5.9  To employ legal counsel, brokers and other
          advisors, agents or employees to perform services for the
          Fund or to advise it with respect to its duties and
          obligations under this Agreement and in connection with the
          Trust, and to pay them reasonable compensation from the 
          Fund, to the extent not paid directly by the Company or an
          Affiliate;

               3.5.10  In accordance with the applicable provisions of
          the Plan and subject to Paragraph 3.8, to obtain an
          Acquisition Loan in such amounts and upon such terms and
          conditions as shall be deemed advisable or proper to carry
          out the purposes of the Trust, and, in connection therewith, 
          to issue its promissory note as Trustee, to pledge any
          securities or other property of the Fund for the repayment
          of such Acquisition Loan and to repay from time to time the
          principal and interest on, and to take any other action with
          respect to, such Acquisition Loan; provided that if such
          Acquisition Loan is from, or guaranteed by, a "party of
          interest" within the meaning of Section 3(14) of ERISA, the
          requirements of Article X shall be satisfied; 

               3.5.11  To open and make use of banking accounts
          including checking accounts, which accounts, if bearing a
          reasonable rate of interest or if checking accounts, may be
          with the Trustee.

               3.6  Voting of Company Stock

               3.6.1  Allocated Shares.  Each Participant (or
          Beneficiary) as a named fiduciary within the meaning of
          ERISA section 403(a)(1), in accordance with the procedures
          hereinafter set forth, may direct the Trustee with respect
          to the votes of the shares of Company Stock allocated to his
          ESOP Stock Account, and the Trustee shall follow the
          directions of those Participants (and Beneficiaries) who
          provide timely instructions to the Trustee; provided that,
          notwithstanding the foregoing, the Trustee shall vote the
          shares of Company Stock allocated to the Part B Accounts of
          the Participants who are (or were) members of the ALPA
          Employee Group but who are not Employees (or allocated to
          the Part B Accounts of their Beneficiaries.)

               3.6.2  Unallocated and Uninstructed Shares.  

                    (i)  PART A.  Each active Participant (which shall
               be defined for purposes of Sections 3.6 and 3.7 to mean
               a Participant who is an Employee) who directed the
               Trustee with respect to the shares allocated to his
               Account under Part A in accordance with Section 3.6.1
               may, again as a named fiduciary, direct the Trustee
               with respect to a portion of both the number of shares
               of Company Stock held in the Loan Suspense Account and
               the number of such shares allocated to any
               Participant's Account under Part A for which no
               instructions were timely received by the Trustee.  Such
               portion shall be determined as follows:

                         (A)  Such portion shall be limited to the sum
               of:  (I) the number of shares of Company Stock held in
               the Loan Suspense Account reserved for allocation to
               such Participant's Employee Group, plus (ii) the number
               of shares of Company Stock allocated to the Accounts of
               Participants in such Participant's Employee Group under
               Part A for which no instructions were timely received.

                         (B)  The number of shares of Company Stock
               determined under clause (i)(A) shall be multiplied by a
               fraction, the numerator of which is the number of
               shares of Company Stock allocable to Part A that such
               Participant directed the Trustee in accordance with
               Section 3.6.1 and the denominator of which is the
               aggregate number of shares allocable to Part A that
               were directed by active Participants in the same
               Employee Group in accordance with Section 3.6.1.

                         (C)  Such Participant, as a named fiduciary,
               shall be entitled to direct the Trustee with respect to
               the number of shares determined under clause (i)(B).

                    (ii) PART B.  Each active Participant who directed
               the Trustee with respect to shares allocated to his
               Account under Part B in accordance with Section
               3.6.1(a) may, again as a named fiduciary, direct the
               Trustee with respect to a portion of the number of such
               shares allocated to any Participant's Account under
               Part B for which no instructions were timely received
               by the Trustee.  Such portion shall be determined as
               follows:

                         (A)  Such portion shall be limited to the
               number of shares of Company Stock allocated to the
               Accounts of Participants in such Participant's Employee
               Group under Part B for which no instructions were
               timely received.

                         (B)  The number of shares of Company Stock as
               determined under clause (ii)(A) shall be multiplied by
               a fraction, the numerator of which is the number of
               shares of Common Stock allocable to Part B that such
               Participant directed the Trustee in accordance with
               Section 3.6.1 and the denominator of which is the
               aggregate number of shares allocable to Part B that
               were directed by active Participants in the same
               Employee Group in accordance with Section 3.6.1.

                         (C)  Such Participant, as a named fiduciary,
               shall be entitled to direct the Trustee with respect to
               the number of shares determined under clause (ii)(B).

               3.6.3  Procedure.  Such directions shall be provided
          directly to the Trustee and shall be held in confidence and
          not be divulged or released to any other person.  Within a
          reasonable time prior to each annual or special meeting of
          holders of Company Stock, the ESOP Committee shall furnish
          to all Participants (and Beneficiaries) entitled to direct
          the Trustee as to the voting of shares of Company Stock,
          copies of any proxy solicitation material provided to
          holders of voting Company Stock generally together with
          appropriate instruction forms or cards and information
          concerning the method of providing such instructions to the
          Trustee.  To the extent permitted by law, if the Trustee
          cannot follow directions of Participants (or Beneficiaries),
          the ESOP Committee shall direct the Trustee.

               Notwithstanding any other provision of this Agreement
          or the Plan, the Trustee shall not be obligated to follow
          the direction of a named fiduciary unless such direction is
          in accordance with the terms of the Plan and is proper
          within the meaning of Section 403(a) of ERISA and is not
          contrary to ERISA.

               3.7  Control Transactions and Certain Dispositions of
     Company Stock.

               3.7.1  General.  The provisions of this Section 3.7
          shall apply in the event a Control Transaction is commenced
          or proposed by a person or persons.  In the event a Control
          Transaction is commenced or proposed, the ESOP Committee,
          promptly after receiving notice, shall transfer certain of
          the ESOP Committee's record keeping functions under the Plan
          to an independent record keeper (which if the Trustee
          consents in writing, may be the Trustee).  The functions so
          transferred shall be those necessary to preserve the
          confidentiality of any directions given by the Participants
          (and Beneficiaries) in connection with the Control
          Transaction.  Within a reasonable time after a Control
          Transaction is commenced, the ESOP Committee shall furnish
          to all Participants (and Beneficiaries) entitled, as
          hereinafter set forth, to direct the Trustee with respect to
          the Control Transaction, copies of all offering material
          provided to holders of Company Stock generally, together
          with appropriate instruction forms or cards and information
          concerning the method of providing such instructions to the
          Trustee.  Except as otherwise required by ERISA, the Trustee
          shall have no discretion or authority to sell, exchange,
          transfer, convert or otherwise dispose of any of such shares
          of Company Stock pursuant to such Control Transaction,
          except to the extent that the Trustee is timely directed to
          do so in writing as follows:

                    (i)  Allocated Shares.  Each Participant (or
               Beneficiary) to whose ESOP Stock Account shares of
               Company Stock have been allocated may, as a named
               fiduciary within the meaning of ERISA section
               403(a)(1), direct the Trustee with respect to the sale,
               exchange, transfer, conversion or other disposition of
               the shares of Company Stock allocated to his ESOP Stock
               Account, and the Trustee shall follow the directions of
               those Participants (and Beneficiaries) who provide
               timely instructions to the Trustee.

                    (ii)  Unallocated and Uninstructed Shares.   

                    (A)  PART A.  Each active Participant who directed
               the Trustee with respect to shares allocated to his
               Account under Part A in accordance with Section
               3.7.1(i) may, again as a named fiduciary, direct the
               Trustee with respect to a portion of both the number of
               shares of Company Stock held in the Loan Suspense
               Account and the number of such shares allocated to any
               Participant's Account under Part A for which no
               instructions were timely received by the Trustee.  Such
               portion shall be determined as follows:

                         (I)  Such portion shall be limited to the sum
               of: (x) the number of shares of Company Stock held in
               the Loan Suspense Account reserved for allocation to
               such Participant's Employee Group, plus (y) the number
               of shares of Company Stock allocated to the Accounts of
               Participants in such Participant's Employee Group under
               Part A for which no instructions were timely received.

                         (II) The number of shares of Company Stock
               determined under clause (ii)(a)(I) shall be multiplied
               by a fraction, the numerator of which is the number of
               shares of Company Stock allocable to Part A that such
               Participant directed the Trustee in accordance with
               Section 3.7.1(i) and the denominator of which is the
               aggregate number of shares allocable to Part A that
               were directed by active Participants in the same
               Employee Group in accordance with Section 3.7.1(i).

                         (III) Such Participant, as a named fiduciary,
               shall be entitled to direct the Trustee with respect to
               the number of shares determined under clause
               (ii)(A)(II).

                    (B)  PART B.  Each active Participant who directed
               the Trustee with respect to shares allocated to his
               Account under Part B in accordance with Section
               3.7.1(i) may, again as a named fiduciary, direct the
               Trustee with respect to a portion of the number of such
               shares allocated to any Participant's Account under
               Part B for which no instructions were timely received
               by the Trustee.  Such portion shall be determined as
               follows:

                         (I)  Such portion shall be limited to the
                    number of shares of Company Stock allocated to the
                    Accounts of Participants in such Participant's
                    Employee Group under Part B for which no
                    instructions were timely received.

                         (II) The number of shares of Company Stock
                    determined under clause (ii)(B)(I) shall be
                    multiplied by a fraction, the numerator of which
                    is the number of shares of Company Stock allocable
                    to Part B that such Participant directed the
                    Trustee in accordance with Section 3.7.1(a)(i) and
                    the denominator of which is the aggregate number
                    of shares allocable to Part B that were directed
                    by active Participants in the same Employee Group
                    in accordance with Section 3.7.1(a)(i).

                         (III) Such Participant, as a named fiduciary,
                    shall be entitled to direct the Trustee with
                    respect to the number of shares determined under
                    clause (ii)(B)(II).

                    All such instructions from Participants (and
               Beneficiaries) shall be provided directly to the
               independent record keeper which, if different from the
               Trustee, shall then instruct the Trustee as to the
               amount of shares to be sold, tendered, exchanged,
               converted or otherwise disposed of in accordance with
               the above directions.  To the extent the Trustee cannot
               follow Participant (or Beneficiary) instructions, the
               ESOP Committee, as a named fiduciary, shall direct the
               Trustee.  Except as contemplated by the foregoing or as
               required to facilitate the making of Plan distributions
               or diversification elections or as required by law, the
               Trustee shall have no authority to dispose of Company
               Stock in a Control Transaction or otherwise.

                    Notwithstanding any other provision of this
               Agreement or the Plan, the Trustee shall not be
               obligated to follow the direction of a named fiduciary
               unless such direction is in accordance with the terms
               of the Plan and is proper within the meaning of Section
               403(a) of ERISA and is not contrary to ERISA.

                    3.7.2  Records.  Following any Control Transaction
               that has resulted in the sale or exchange of any shares
               of Company Stock held in the Plan, the record keeper
               shall continue to maintain on a confidential basis the
               Accounts of Participants (and Beneficiaries) to whose
               Accounts shares of Company Stock were allocated at any
               time during such offer, until complete distribution of
               such Accounts or such earlier time as the record keeper
               determines that the transfer of the record keeping
               functions back to the ESOP Committee will not violate
               the confidentiality of the directions given by the
               Participants (and Beneficiaries).  In the event that
               there is no sale or exchange of any shares of Company
               Stock held in the Plan pursuant to the Control
               Transaction, the record keeper shall transfer back to
               the ESOP Committee the record keeping functions;
               provided, however, that the record keeper shall keep
               confidential any instructions which it may receive from
               Participants (and Beneficiaries) relating to the
               Control Transaction.

                    3.7.3  Proceeds.  For purposes of allocating the
               proceeds of any sale or exchange pursuant to a Control
               Transaction, the ESOP Committee or the independent
               record keeper, as the case may be, shall determine the
               portion, expressed as a percentage, of shares of each
               class tendered by the Trustee that were actually sold
               or exchanged (the "applicable percentage" for that
               class).  For each class, the ESOP Committee or the
               independent record keeper, as the case may be, shall
               then treat as having been sold or exchanged from the
               portion of the Loan Suspense Account applicable to that
               Employee Group and each of the individual Accounts of
               Participants (and Beneficiaries) that number of shares
               (of that class) that is obtained by multiplying (i) the
               applicable percentage for that class, times (ii) the
               total number of shares in such Account of that class
               that were directed to be tendered or exchanged or sold
               in connection with the Control Transaction.  The
               adjustments to individual Accounts shall be made by the
               ESOP Committee or the independent record keeper, as the
               case may be, on information supplied by the Company,
               the ESOP Committee or the Trustee.

               3.8  Notwithstanding any other provisions of this
     Agreement or the Plan, the purchase of Qualifying Employer
     Securities pursuant to the ESOP Preferred Stock Purchase
     Agreement dated March 25, 1994, as amended, or pursuant to any
     Additional Acquisition Loans (including loans to effect
     Section 8.2(e) of the Plan and Section 1.6(g) of the
     Recapitalization Agreement) among the Trustee and the Company
     shall be effected by the Trustee without direction from the ESOP
     Committee pursuant to the Trustee's determination, in the
     exercise of its reasonable judgment after consultation with such
     advisors as it reasonably deems necessary, that such transaction
     is in the best interests of the Participants and Beneficiaries
     and that the purchase transaction and the terms and conditions of
     any Acquisition Loan entered into in connection with the above-
     described Purchase Agreement are in compliance with all
     applicable provisions of the Code and ERISA. 

               3.9  In addition to, and not in limitation of, the
     powers vested and to be vested in it by law or enumerated in this
     Article III, the Trustee shall have the power to take any action
     with respect to the Fund as is appropriate and helpful in
     carrying out the purposes of this Agreement, subject to any
     directions of the ESOP Committee or the Participants (or
     Beneficiaries) as provided herein.

                                 ARTICLE IV


                               ADMINISTRATION

               4.1  The ESOP Committee shall represent the Company in
     dealing with the Trustee under this Agreement.  Until it receives
     written notice that a person is no longer a member of the ESOP
     Committee, the Trustee shall be fully protected in assuming that
     the person is still a member of the ESOP Committee.  The Company
     shall cause to be delivered to the Trustee a specimen signature
     of each member as well as that of any designee of the ESOP
     Committee appointed pursuant to Paragraph 4.2.  The members of
     the ESOP Committee shall be "named fiduciaries" within the
     meaning of ERISA Section 402(a) with respect to the Plan.

               4.2  The Trustee may rely (and shall be fully protected
     in relying) on any written communication signed by a majority of
     the members of the ESOP Committee as being authorized by, and
     reflecting the action of, the ESOP Committee.  If the Trustee is
     advised in writing by a majority of the members of the ESOP
     Committee that directives to the Trustee will be signed by a
     person or persons designated by the ESOP Committee, the Trustee
     may rely on communications signed by the person or persons so
     named as a directive reflecting the action of the ESOP Committee.

               4.3  The Trustee shall have only those duties specified
     in this Agreement or specified in the Plan and expressly
     incorporated herein by reference.  In the event of any conflict
     between the provisions of the Plan and this Agreement, the
     provisions of this Agreement shall control.  The Trustee shall
     have no responsibility to administer or interpret the Plan, to
     enforce payment of any contributions to the Fund or to see that
     the Fund is adequate to meet the liabilities of the Plan.

               4.4  The Company or anyone acting on its behalf may at
     any time employ the Trustee in its corporate capacity as agent to
     perform any act or to keep any records in connection with the
     administration of the Plan.  Any such agency relationship shall
     be established by a separate written agreement between the
     Company and the Trustee and the existence of such arrangement
     shall not affect its responsibility or liability as Trustee under
     this Agreement.

               4.5  Notwithstanding any other provision of the Plan or
     this Agreement, the Trustee shall not be obligated to follow the
     direction of a named fiduciary unless such direction is in
     accordance with the terms of the Plan or this Agreement and is
     proper under ERISA Section 403(a)(2) and not contrary to Title I
     of ERISA.

               4.6  With respect to the exercise of any fiduciary
     responsibility with respect to the Plan or the Trust, including,
     without limitation, the voting, sale, exchange, other disposition
     or conversion of Company Stock, the Trustee and any other
     relevant fiduciary may, to the extent permitted by law, take into
     consideration any relevant economic factors affecting the
     interests of current and future Participants (and Beneficiaries),
     including, but not limited to, the prospect for continued
     Employee enfranchisement through the voting power of Company
     Stock held in the Trust, the prospect for future benefits under
     the Plan as a result of the prospective release and allocation of
     Qualifying Employer Securities held in the Loan Suspense Account
     and the prospect for future employment with the Company and its
     Affiliates.


                                 ARTICLE V

                     PAYMENTS OF BENEFITS AND EXPENSES

          5.1  Except as otherwise provided in Paragraph 5.3, the
     Trustee shall pay benefits and administrative expenses under the
     Plan only when it receives (and in accordance with) written
     instructions from the ESOP Committee, indicating the amount of
     the payment and the name and address of the recipient.  The
     Trustee shall have no duty to inquire into whether any payment
     the ESOP Committee instructs it to make is consistent with the
     terms of the Plan or applicable law or otherwise proper.  Any
     payment made by the Trustee in accordance with such instructions
     shall be a complete discharge and acquittance to the Trustee.  If
     the ESOP Committee advises the Trustee that benefits have become
     payable respecting a Participant's interest in the Fund, but does
     not instruct the Trustee as to the manner of payment, the Trustee
     shall hold the Participant's interest in the Trust until it
     receives written instructions from the ESOP Committee as to the
     manner of payment.  The Trustee shall not pay benefits from the
     Fund without such instructions, even though it may be informed
     from other sources, including, without limitation, a Participant
     (or beneficiary), that benefits are payable under the Plan.  The
     Trustee shall have no responsibility to determine when, to whom,
     or in what amounts benefits and expenses are payable under the
     Plan.

               5.2  The Trustee shall distribute benefits in the
     manner described in the Plan and as directed by the ESOP
     Committee.

               5.3  The Trustee shall receive as compensation for its
     services as Trustee such amounts as may, from time to time, be
     agreed upon in writing between the Company and the Trustee.  Such
     compensation and, in accordance with the applicable provisions of
     ERISA and the Code, all reasonable and proper expenses incurred
     by the Trustee in the administration of the Trust, including
     reasonable legal counsel fees, shall be paid by the Company.

               5.4  The Company intends that the Plan shall at all
     times qualify under Code Sections 401(a), 409 and, to the extent
     applicable, 4975(e)(7) and that the Trust hereby established
     shall at all times be tax exempt under Section 501(a) of the
     Code, or successor provisions.  However, any taxes that may be
     levied upon or in respect of the Fund shall be paid from the
     Fund.  The Trustee shall promptly notify the ESOP Committee of
     any proposed taxes (other than stock transfer taxes) of which it
     receives notice and may assume that any such taxes are lawfully
     levied or assessed, unless the ESOP Committee advises it in
     writing to the contrary within fifteen (15) days after receiving
     the above notice from the Trustee.  In such case, the Trustee, if
     requested by the ESOP Committee in writing, shall contest the
     validity of such taxes in any manner deemed appropriate by the
     ESOP Committee; the Company may itself contest the validity of
     any such taxes, in which case the ESOP Committee shall so notify
     the Trustee and the Trustee shall have no responsibility or
     liability respecting such contest.  If any party to this
     Agreement contests any such proposed levy, the other party shall
     provide such information and cooperation as the party conducting
     the contest shall reasonably request.


                                 ARTICLE VI

                LIABILITY AND INDEMNIFICATION OF THE TRUSTEE

               6.1  The Trustee shall not be responsible for computing
     or collecting contributions due under the Plan.

               6.2  The Trustee in its corporate capacity shall not be
     liable for claims of any persons arising under the Plan; such
     claims shall be limited to the Fund.  The Trustee shall not be
     liable to make distributions or payments of any kind unless
     sufficient funds are available therefor in the Fund.  The Trustee
     shall be responsible only for such money and other property as
     are actually received by it as Trustee under this Agreement.

               6.3  The Trustee may consult with legal counsel with
     respect to the meaning and construction of this Agreement or its
     powers, obligations and conduct hereunder, and the written
     opinion of such counsel will, to the extent permitted by law, be
     full and complete protection in respect of any action taken or
     omitted by the Trustee hereunder in good faith and in accordance
     with the opinion of such counsel.

               6.4  The Trustee shall have no liability other than as
     imposed by law and this Agreement.  

               6.5  The Trustee shall be fully protected in acting
     upon any instrument, certificate, or paper delivered by the
     Company, the ESOP Committee, any Participant, (or Beneficiary)
     acting as a named fiduciary and believed by the Trustee to be
     genuine and to be signed or presented by the proper person or
     persons, and the Trustee shall be under no duty to make any
     investigation or inquiry as to any statement contained in any
     such writing, but may accept the same as conclusive evidence of
     the truth and accuracy of the statements therein contained.

               6.6  To the extent permitted by applicable law, the
     Trustee shall be indemnified by the Company and UAL against any
     and all liabilities, settlements, judgments, losses, costs, and
     expenses (including reasonable legal fees and expenses) of
     whatever kind and nature which may be imposed on, incurred by or
     asserted against the Trustee by reason of the performance or
     nonperformance of its trustee function under this Agreement,
     except to the extent such action or inaction constituted
     negligence, willful misconduct or failure to act in good faith on
     the part of the Trustee.  

               6.7  All notices, requests, demands and other
     communications hereunder or with respect hereto shall be in
     writing and shall be deemed to have been fully given if
     telegraphed, telecopied or telefaxed, mailed by registered or
     certified mail, or personally delivered (or delivered by courier)
     as follows:

               If to the Company, to:

                    By Mail

               UAL Corporation
               P.O. Box #66919
               Chicago, IL  60666
               Attention:  Corporate Secretary


                    By Courier

               UAL Corporation
               1200 Algonquin Road
               Elk Grove Township, IL  60007
               Attention:  Corporate Secretary

               If to the Trustee, to:

               State Street Bank and Trust Company
               225 Franklin Street
               Boston, MA 02110
               Attention:  UAL ESOP Administration

     or to such other address or addresses as any party hereto may
     furnish to the other party in writing.

               6.8  Whenever the Trustee shall deem it desirable for a
     matter to be proved or established before taking, permitting or
     omitting any act, the matter (unless other evidence in respect
     thereof is specifically prescribed in this Agreement) may be
     deemed to be conclusively established by a certification signed
     by a majority of the members of the ESOP Committee and delivered
     to the Trustee, and the Trustee shall be fully protected in
     relying on such an instrument.

               6.9  If a dispute arises as to the payment of any funds
     or delivery of any assets by the Trustee, the Trustee may
     withhold such payment or delivery until the dispute is determined
     by a court of competent jurisdiction or finally settled in
     writing by the parties concerned.

                                ARTICLE VII

                         ACCOUNTING OF THE TRUSTEE

               7.1  The Trustee shall keep accurate and detailed
     accounts of all its transactions (including receipts and
     disbursements) under this Agreement.  These records shall be open
     to inspection and audit during regular business hours of the
     Trustee by the ESOP Committee or any person or persons designated
     by the ESOP Committee or the Company in a written instrument
     filed with the Trustee.  If mutually agreed upon in a separate
     writing by the ESOP Committee and the Trustee, the Trustee shall
     establish and maintain accounts for Participants which shall show
     their respective interests, determined in accordance with the
     terms of the Plan, in the Fund; provided, however, that to the
     extent that such accounts are kept by the Trustee on the basis of
     information furnished or caused to be furnished to it by the ESOP
     Committee, the Trustee shall have no responsibility for the
     accuracy of any information so furnished.  All such accounts and
     records shall be preserved (in original form, or on microfilm,
     magnetic tape or any other similar process) for such period as
     the Trustee may determine, but the Trustee may destroy such
     accounts and records only after first notifying the ESOP
     Committee and the Company in writing at least ninety (90) days in
     advance of its intention to do so and transferring to the ESOP
     Committee or the Company any such accounts and records requested.

               7.2  Within sixty (60) days after the close of each
     fiscal year of the Plan, the Trustee's removal or resignation as
     Trustee hereunder, or the termination of the Plan or this
     Agreement, the Trustee shall file with the ESOP Committee an
     account setting forth all its transactions (including all
     receipts and disbursements) under this Agreement during such
     year, or during the period from the close of the last preceding
     fiscal year of the Plan to the effective date of its removal or
     resignation or the termination of the Plan or this Agreement, and
     showing all property (including its costs and fair market value)
     held by it hereunder at the end of such accounting period;
     provided, however, that in the event shares of Company Stock are
     then held in the Trust and a final valuation report, if
     necessary, with respect to such Company Stock for any such
     accounting period is not received by the Trustee within thirty
     (30) days of the date the Trustee is required to render an
     accounting under the foregoing provision, then the Trustee shall
     not be required to render such account until thirty (30) days
     from the date such valuation report is received by the Trustee.
     The ESOP Committee and the Trustee may agree in writing that
     similar accounts will be prepared by the Trustee and filed with
     the ESOP Committee at more frequent intervals.  No person or
     persons (including, without limitation, the Company and the ESOP
     Committee) shall be entitled to any further or different
     accounting by the Trustee, except as may be required by law.

               7.3  Twenty-four (24) months after the filing with the
     ESOP Committee of the annual accounts for the 1994 and 1995
     fiscal years of the Trust and twelve (12) months after the filing
     with the ESOP Committee of any other account under Paragraph 7.2,
     the Trustee shall be forever released and discharged from any
     liability or accountability to the Company and the ESOP Committee
     with respect to the transactions shown or reflected on the
     account, except with respect to any acts or transactions as to
     which the ESOP Committee, within the applicable period, files
     written objections with the Trustee.  The written approval of the
     ESOP Committee of any account filed by the Trustee, or the ESOP
     Committee's failure to file written objections within the
     applicable period, shall be a settlement of such account as
     against the Company and the ESOP Committee, and shall forever
     release and discharge the Trustee from any liability or
     accountability to the Company and the ESOP Committee with respect
     to the transaction shown or reflected on such account.  If a
     statement of objection is filed by the ESOP Committee and the
     ESOP Committee is satisfied that its objections should be
     withdrawn or if the account is adjusted to its satisfaction, the
     ESOP Committee shall indicate its approval of the account in a
     written statement filed with the Trustee and the Trustee shall be
     forever released and discharged from all liability and
     accountability to the Company and the ESOP Committee in
     accordance with the immediately preceding sentence.  If an
     objection is not settled by the ESOP Committee and the Trustee,
     the Trustee may commence a proceeding for a judicial settlement
     of the account in any court of competent jurisdiction; the only
     parties that need be joined in such a proceeding are the Trustee,
     the ESOP Committee, the Company and such other parties whose
     participation is required by law.


                                ARTICLE VIII

                   REMOVAL AND RESIGNATION OF THE TRUSTEE

               8.1  The Trustee may resign as Trustee under this
     Agreement at any time by a written instrument delivered to the
     Company giving notice of such resignation, which shall be
     effective sixty (60) days after receipt or at such other time as
     is agreed by the Company and the Trustee.  The Trustee may be
     removed at any time by the Company (with the consent of the Air
     Line Pilot Association, International and the International
     Association of Machinists and Aerospace Workers) by an instrument
     in writing and delivered to the Trustee, which shall be effective
     sixty (60) days after receipt or at such other time as is agreed
     between the Company and the Trustee.

               8.2  If a vacancy in the office of trustee of the Trust
     occurs, the Company (with the consent of the Air Line Pilot
     Association, International and the International Association of
     Machinists and Aerospace Workers) shall appoint a successor
     trustee and shall deliver to the Trustee copies of (a) a written
     instrument executed by the Company appointing such successor, and
     (b) a written instrument executed by the successor in which it
     accepts such appointment.  Such instruments shall indicate their
     effective date.

               8.3  If the Trustee resigns or is removed, it shall
     deliver all assets of the Fund in its possession to a successor
     trustee as soon as is reasonably practicable after the settlement
     of its account or at such earlier time as shall be agreed on by
     the Company, the Trustee and the successor trustee.

                                 ARTICLE IX

                         AMENDMENT AND TERMINATION

               9.1  This Agreement may be amended at any time and from
     time to time by the Company (with the consent of the Air Line
     Pilot Association, International and the International
     Association of Machinists and Aerospace Workers) by a written
     instrument duly acknowledged and delivered to the Trustee setting
     forth the terms of the amendment; provided that no amendment
     affecting rights, duties, responsibilities or liability of the
     Trustee may be made without the Trustee's consent.  The
     instrument of amendment shall state to the Trustee that the
     amendment does not permit any part of the Fund to be used for or
     diverted to purposes other than the exclusive benefit of
     Participants and their beneficiaries or the payment of reasonable
     expenses of administering the Plan and Trust, as specified in
     Paragraph 2.2 hereof.  The instrument of amendment shall specify
     its effective date and amendments may, with the Trustee's
     consent, if applicable, be made effective retroactively.

               9.2  If the ESOP Committee certifies to the Trustee
     that the Plan is or has been terminated, the Trustee shall hold
     and/or dispose of the Fund in accordance with the ESOP
     Committee's written instructions.  The ESOP Committee shall
     certify in writing to the Trustee that the disposition directed:
     (a) except as provided in Paragraph 2.2, does not result in any
     part of the Fund being used for or diverted to purposes other
     than the exclusive benefit of Participants and their
     Beneficiaries and the payment of reasonable expenses (including
     the repayment of any outstanding Acquisition Loans) of
     administering the Plan and Trust, (b) is in accordance with the
     applicable provisions of the Code, ERISA and any other applicable
     laws, and (c) does not result in a Prohibited Transaction.  If
     the Plan is terminated with respect to a group of persons under
     the Plan, the portion of the Trust attributable to such group
     shall be held and disposed of in accordance with the written
     instructions of the ESOP  Committee which shall be given in
     conformity with the provisions of the Plan, the Code and ERISA. 
     The Trustee may, however, reserve such reasonable sum of money as
     it deems advisable for payment for the settlement of its accounts
     or for payment of taxes that may be assessed on or in respect of
     the Fund or the income thereof.  This Agreement shall terminate
     upon the termination of the Plan as provided herein and the
     disposition of the Fund as provided herein.

                                 ARTICLE X

                      LEVERAGED ACQUISITIONS OF STOCK

               10.1  It is specifically contemplated that the Trust
     will operate pursuant to a leveraged employee stock ownership
     plan with respect to Part A of the Plan and that the Trustee will
     incur several Acquisition Loans in connection with the
     acquisition of Qualifying Employer Securities.  Any Acquisition
     Loan shall meet all of the requirements necessary to constitute
     an "exempt loan" within the meaning of Treasury Regulation
     Section 54.4975-7(b)(1)(iii) and shall be used primarily for the
     benefit of the Participants and their Beneficiaries.  The
     proceeds of any Acquisition Loan shall be used, within a
     reasonable time after the Acquisition Loan is obtained, only to
     purchase Qualifying Employer Securities or to repay such
     Acquisition Loan or a prior Acquisition Loan.  Any Acquisition
     Loan shall provide for no more than a reasonable rate of interest
     and must be without recourse against the Plan and Trust.  The
     number of years to maturity under the Acquisition Loan must be
     definitely ascertainable at all times.  The Acquisition Loan may
     not be payable at the demand of any person, except in the case of
     a default.  The only assets of the Trust that may be given as
     collateral for an Acquisition Loan are shares of Qualifying
     Employer Securities acquired with the Acquisition Loan, shares of
     Qualifying Employer Securities that were used as collateral on
     prior Acquisition Loans repaid with the proceeds of the current
     Acquisition Loan and all Qualifying Employer Securities received
     as consideration pursuant to a Control Transaction or acquired
     with proceeds received pursuant to a Control Transaction.  In the
     event that Qualifying Employer Securities are used as collateral
     for an Acquisition Loan, such Qualifying Employer Securities
     shall be released from such encumbrance in accordance with the
     provisions of the Plan and applicable Treasury Regulations.  No
     person entitled to payment under an Acquisition Loan shall be
     entitled to payment from the Trust other than from shares of
     Qualifying Employer Securities acquired with the Acquisition Loan
     which are collateral for the Acquisition Loan, Company
     contributions made under the Plan for the purpose of satisfying
     an Acquisition Loan, earnings attributable to such Qualifying
     Employer Securities and such Company contributions (other than
     contributions of Qualifying Employer Securities), and such other
     assets, if any, as to which recourse may be permitted under
     Section 4975 of the Code.  Payments of principal and interest on
     an Acquisition Loan shall be made by the Trustee only from (1)
     Company contributions (other than contributions of Qualifying
     Employer Securities) made under the Plan for the purpose of
     satisfying such Acquisition Loan, earnings on such contributions
     and earnings on shares of Qualifying Employer Securities acquired
     with the proceeds of such Acquisition Loan, including, but not
     limited to, cash dividends received by the Trust with respect to
     such shares of Qualifying Employer Securities, whether or not
     allocated to the accounts of Participants (or Beneficiaries), (2)
     the proceeds of a subsequent Acquisition Loan made to repay the
     prior Acquisition Loan, and/or (3) unless otherwise agreed in the
     definitive documentation pertaining to such Acquisition Loan, the
     proceeds of the sale of any collateralized shares of Qualifying
     Employer Securities acquired with the proceeds of such
     Acquisition Loan; provided, however, that the Trustee shall in no
     event be required to apply such proceeds of sale to repay
     principal and interest on an Acquisition Loan if, in the written
     opinion of counsel to the Trustee, such action would constitute a
     Prohibited Transaction or a breach of the Trustee's fiduciary
     duties under ERISA.  In the event of a default under an
     Acquisition Loan, the value of Trust assets transferred to the
     lender shall not exceed the amount of the default, provided
     further that if the lender is a "party in interest" within the
     meaning of ERISA Section 3(14) or a "disqualified person" within
     the meaning of Section 4975(e)(2) of the Code, a transfer of
     Trust assets upon default shall be made only if, and to the
     extent of, the Trust's failure to meet the Acquisition Loan's
     payment schedule.

                                 ARTICLE XI

                               MISCELLANEOUS

               11.1  This Agreement shall be binding upon, and the
     powers granted to the Company and the Trustee, respectively,
     shall be exercisable by, the respective successors and assigns of
     the Company and the Trustee.  Any corporation which shall, by
     merger, consolidation, purchase or otherwise, succeed to
     substantially all the trust business of the Trustee shall, upon
     such succession and without any appointment or other action by
     the Company, be and become successor trustee hereunder, upon
     notification to the Company.

               11.2  No right or claim in or to the Fund or any assets
     thereof shall be subject in any manner to anticipation, alienation,
     sale, transfer, assignment, pledge, encumbrance or charge, and any
     attempt to so anticipate, alienate, sell, transfer, assign, pledge,
     encumber or charge shall be void and shall not be recognized by the
     Trustee, except to such extent as may be legally required (e.g., as
     otherwise provided in the Plan with respect to qualified domestic
     relations orders).  No such right or claim shall be liable for or
     subject to the debts, contracts, liabilities, engagements or torts of
     the person entitled thereto.

               11.3  This Agreement shall be administered, construed and
     enforced in accordance with ERISA, and to the extent not governed by
     ERISA, in accordance with the laws of the Commonwealth of
     Massachusetts.

               11.4  One or more of the Company's Affiliates may, with the
     approval of the Board of Directors, by resolution of its own board of
     directors adopt the Trust if such subsidiary shall have adopted the
     Plan or any part thereof.  Each such Affiliate which has adopted this
     Trust shall be deemed a party to this Agreement and all references
     herein to "Company" shall be deemed as to include such Related Company,
     except as the context may otherwise require.

               11.5  For all purposes of the Plan and Trust, all valuations
     of Stock which is not readily tradable on an established securities
     market will be made by an "independent appraiser" within the meaning of
     Section 401(a)(28)(C) of the Code.

               11.6  Headings of Articles are inserted for convenience of
     reference.  They are not part of this Agreement and shall not be
     considered in construing it.

               11.7  This Agreement may be executed in any number of
     counterparts, each of which shall be considered an original even
     through no others are produced.

                   [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

               IN WITNESS WHEREOF, the Company and the Trustee have caused
     this Agreement to be executed by their duly authorized officers and
     their respective corporate seals to be hereunto affixed as of the day
     and year first above written.

     ATTEST:                            UAL CORPORATION 

     BY: /s/ Francesca M. Maher         BY: /s/ Joseph R. O'Gorman
         _________________________          __________________________

     TITLE: Vice President - Law        TITLE: Executive Vice President
            and Corporate Secretary


     ATTEST:                            STATE STREET BANK AND TRUST
                                        COMPANY

     BY: /s/ Denise R. Courcy            BY: /s/ Kelly Q. Driscoll
         _________________________          __________________________

     TITLE: Assistant Vice President    TITLE: Vice President
            and Associate Counsel