Employment Agreement - United Air Lines Inc. and Joseph R. O'Gorman


                      EMPLOYMENT AGREEMENT
                      --------------------

THIS EMPLOYMENT AGREEMENT (the 'Agreement') is made and
entered into as of September 1, 1997 between United Air
Lines, Inc. ('UA') and UAL Corporation ('UAL') (UA and UAL
sometimes collectively referred to as 'United') and Joseph
R. O'Gorman residing at P.O. Box 422, Barrington, Illinois
60011 (sometimes referred to as 'Executive').

     WHEREAS, Executive has served and is presently serving
as Executive Vice President-Fleet Operations and
Administration and as a Director of UA and holds various
other positions and directorships with subsidiaries and
affiliates of UA or UAL (hereinafter collectively referred
to as 'Executive Positions'); and

     WHEREAS, Executive is desirous of pursuing interests
outside of United; and

     WHEREAS, United wishes to facilitate Executive's
desires as stated above but also to retain Executive's
services on the basis described herein; and

     WHEREAS, Executive has agreed in this Agreement to
provide such services and to release United from any
liability arising out of his hire and employment with United
and his resignation from his Executive Position;

     NOW, THEREFORE, it is agreed by and between United and
Executive as follows:

     1.  Resignation; Continued Employment:  Executive
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hereby resigns from his Executive Positions all effective as
of September 1, 1997 (the 'Effective Date').  Thereafter,
Executive will continue to be actively employed by United,
but he will perform services for United by being 'on call',
including testifying on behalf on United, and subject to
such assignments consistent with Executive's experience as
may be reasonably requested by United's President and
reasonably acceptable to Executive.  Executive and United
hereby agree and affirm that circumstances constituting an
event of 'Good Reason' or a termination of employment under
the UAL Agreement (as hereinafter defined) have not arisen
or are otherwise applicable and that this Agreement shall
not constitute such circumstances.  The 'UAL Agreement'
shall mean, collectively, the 35 page agreement between
Executive and UAL dated as of July 1, 1993, and any and all
amendments or letters of agreement relating thereto.

     2.  Time Period of Employment:  United agrees to
         -------------------------
employ Executive and Executive agrees to be employed by
United on the basis stated in Paragraph 1 from September 1,
1997 through July 31, 1998, subject to sooner termination
pursuant to Paragraph 4 (such period, as it may be shortened
pursuant to Paragraph 4, being herein called the 'Term').

     3.  Payments and Benefits:  A.(i) During the Term,
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United will pay Executive a salary of $28,333 per month.
Such payments will be made on the same schedule as actively
employed officers of United from time to time, currently the
15th and last day of each month.  Any amounts will be
prorated for any partial month. Executive will not be
entitled to any increase nor subject to any decrease in such
salary payments during the Term.

     (ii)  In addition to the payments specified in
Paragraph 3.A(i), on March 15, 1998, United will pay
Executive a lump sum severance payment of $183,333.

     (iii)  All payments under this Paragraph 3.A will be
subject to withholding for taxes and other purposes as
required by applicable law.

     B.  Notwithstanding what may be provided to other
active employees of United from time to time, the only
benefits that Executive shall be entitled to during the Term
are as follows, in each case subject to the rules and
regulations of United as from time to time are in effect
(except as otherwise stated below in this Paragraph 3.B):

     (i)  Free and Reduced Rate Transportation:  United
          shall provide to Executive and his eligibles free
          and reduced rate transportation of the type
          granted to actively employed officers in
          accordance with company regulations as revised
          from time to time.
     
    (ii)  United Air Lines, Inc. Management and Salaried
          Employees' Retirement Plan:  Executive shall
          continue to participate in (i) the Retirement Plan
          and (ii) The United Air Lines, Inc. Supplemental
          Retirement Plan in accordance with their terms
          (hereinafter collectively the 'Retirement Plans').
     
   (iii)  Management Medical/Dental:  Executive and his
          eligible dependents shall continue to be covered
          by the Management Medical/Dental Plan in the same
          manner as other active employees.
     
    (iv)  Group Life Insurance:  Executive shall continue to
          be covered by Group Life Insurance including
          Contributory Life Insurance (if so covered), on
          the same basis as other active employees, provided
          the appropriate payroll deductions are authorized
          and in accordance with the terms of the policies.
     
     (v)  Officer's Accidental Death and Dismemberment
          Insurance/Split Dollar Life Insurance:
          Executive's Officer's Accidental Death and
          Dismemberment coverage of $250,000 will continue
          until the termination of this Agreement as
          provided in Paragraph 4 herein.  Executive will
          have the option of converting up to $100,000 of
          this coverage to a private policy within 31 days
          of termination, if Executive so chooses.
          Executive will continue to be covered by the
          Officer's Split Dollar Life Insurance until July
          31, 2003.  The terms of Executive's coverage and
          option for continuation of the Officer's Split
          Dollar Life Insurance thereafter will be explained
          in a separate letter by July 31, 2003.
     
    (vi)  Disability Income Benefits:  Executive, provided
          he is qualified under the terms of the Plan, and
          provided he makes such payments as may be required
          by the Plan Administrator, will be eligible for
          any disability income benefits from company
          disability insurance plans.
     
   (vii)  Stock:  Executive shall continue to 
          participate in the UAL, Inc. 1981 Incentive Stock
          Program (the 'Program') and the 1988 Restricted
          Stock Plan ('1988 Plan').  Termination of
          employment pursuant to Paragraph 4 of the
          Agreement will be a cessation of employment within
          the meaning of the Program and the 1988 Plan.
          Nothing in this Agreement will increase or
          diminish the right of Executive to exercise any
          stock option that becomes exercisable according to
          the terms of the Program and the relevant option.
          Notwithstanding the foregoing, the parties hereby
          agree that the Non-Qualified Stock Option
          Agreements with Executive dated as of April 26,
          1996 (the 'April 1996 Agreement') and May 20, 1997
          (the 'May 1997 Agreement') and the Restricted
          Stock Agreement with Executive dated May 17, 1995
          (the 'May 1995 Agreement') are hereby amended as
          follows:
               (a)  The unvested options to purchase up to
          20,000 shares of UAL common stock that Executive
          has remaining under the April 1996 Agreement that
          are scheduled to vest after July 31, 1998 will be
          forfeited on the Effective Date.
               (b) The unvested options to purchase up to
          11,775 shares of UAL common stock that Executive
          has remaining under the May 1997 Agreement that
          are scheduled to vest after July 31, 1998 will be
          forfeited on the Effective Date.
               (c)  The 12,000 restricted shares of UAL
          common stock that Executive has under the May 1995
          Agreement that are not scheduled to be released
          from restrictions until after July 31, 1998 will
          be forfeited on the Effective Date.
     
          Executive will not be eligible for any grants made
          under the Program or the 1988 Plan after the
          Effective Date.
     
  (viii)  Other Benefits:  Executive will continue to
          be eligible to participate in the stock purchase
          plan, 401(k) plan, Flexible Spending Account, and
          be eligible for payroll savings bonds on the same
          basis as other active employees.  Executive will
          also be eligible to utilize the Credit Union
          subject to its rules.
     
    (ix)  Vacation and Holidays:  Executive agrees to forego
          any unused vacation time existing as of September
          1, 1997 and no paid vacation or holiday time will
          be accrued or taken after September 1, 1997.
     
     (x)  UAL Stock Ownership Plan:  Because, among other
          matters, Executive is receiving compensation pursuant 
          to this Agreement at a rate greater than that which 
          he had received after the commencement of the UAL Stock
          Ownership Plan ('ESOP'), all parties acknowledge
          and agree that Executive will no longer be
          eligible to participate in the ESOP after August
          31, 1997, and as of September 1, 1997 his
          participation with respect to future accruals of
          UAL stock shall cease, but he will retain whatever
          stock or other benefits rights he may have accrued
          prior to that date, all in accordance with the
          ESOP's terms and conditions.
          
    (xi)  Company Owned Car:  Executive will be entitled to
          retain the company owned car provided to him by
          United.  In addition, no later than 31 days
          following the Effective Date, United will pay off
          all amounts due under the lease pertaining to the
          vehicle, and United will cause title in the
          vehicle to be conveyed to Executive.  To the
          extent there is any imputed income as a result of
          the conveyance of title or the liquidation of the
          lease or both, Executive will be deemed to have
          received such imputed income and United may make
          withholdings for income taxes and other purposes
          as required by applicable law.

     C.  Each of the benefits enumerated in Paragraph 3.B.
is subject to the practices, rules, and regulations of
United, as in effect from time to time.
     
     D.  For purposes of clarity, if an Incentive
Compensation Plan (ICP) award is granted for 1997
performance or thereafter, Executive will not be eligible
under the ICP for any award.

4.  Termination of Employment Under Agreement:
    -----------------------------------------

     A.  Non-Election of Executive:  Executive's employment
         -------------------------
under this Agreement shall terminate and Executive will no
longer have the status of an active employee of United and
will no longer be entitled to any of the benefits of this
Agreement (including the entitlement to the payment and
benefits described in Paragraph 3 (other than those required
by law and otherwise vested)), on the happening of the
earliest of the following events:

           (i)  Executive's death.
           
          (ii)  Executive's discharge for cause.
           
         (iii)  Any action or communication by Executive
                that adversely reflects upon United or the
                service it provides or any action or
                communication that causes, induces, or
                facilitates others to act adversely to
                United.
           
          (iv)  11:59 p.m. on July 31, 1998, at which
                time he will be deemed to have elected to
                retire.
           
     Notwithstanding such termination, Executive shall
continue to be bound by the provisions of Paragraphs 6
through 12 of this Agreement.  Discharge for 'cause' shall
mean termination upon (a) willful and continued failure by
Executive to substantially perform the duties set forth in
Paragraph 1 of this Agreement (other than any such failure
resulting from Executive's incapacity due to physical or
mental illness) after written demand for substantial
performance is delivered to Executive by the Board of
Directors of UAL Corporation, which demand specifically
identifies the manner in which that Board believes Executive
has not substantially performed such duties, and reasonable
opportunity of Executive to perform, or (b) the willful
engaging by Executive in conduct which is demonstrably and
materially injurious to United or its subsidiaries or
affiliates monetarily or otherwise, or (c) any willful
breach by Executive of this Agreement.  For purposes of this
definition, no act, or failure to act, on Executive's part
shall be deemed 'willful' unless done, or omitted to be
done, by Executive not in good faith and without the
reasonable belief that such action or omission was in the
best interest of United or its subsidiaries or affiliate.

     B.  Upon Retirement:  If this Agreement and
         ---------------
Executive's employment under it have not otherwise
terminated pursuant to Paragraph 4 as of 11:59 p.m. of July
31, 1998, then effective as of that time and day Executive
hereby retires from United and Executive will be entitled to
the benefits of a retired United officer, as such may be
revised from time to time.  In addition, United will pay
Executive a supplemental retirement benefit computed and
paid in accordance with the Retirement Plans ( as defined in
Paragraph 3.B.(ii)) but calculating Executive's accrued
benefit (the 'Additional Years of Service Credit') as if
Executive had been continuously employed by United from June
27, 1966 to the date of Executive's retirement from United.
The amount of this supplemental retirement benefit shall be
determined without decrement based on age at the time of
retirement, so that such benefit will be determined as if
Executive actually retired at age 65, regardless of the
actual age at which Executive retires.  This supplemental
retirement benefit shall be offset by the accrued benefit
payable to Executive under the Retirement Plans, and shall
be paid out of United's general funds pursuant to United's
contractual obligation hereunder, but no funds shall be
placed in trust or otherwise set aside by United to provide
for payments hereunder.  Such supplemental retirement
benefit shall be payable at the same time and in the same
manner as Executive elects to receive his benefits under the
Retirement Plans.  The Additional Years of Service Credit
shall also apply in determining Executive's eligibility for,
and the amount of, Executive's other retiree benefits.

     C.  Election of Executive:  If, prior to 11:59 p.m. on
         ---------------------
July 31, 1998, Executive elects to terminate his employment
for any reason, Executive will receive a one time lump sum
payment (subject to withholding for taxes and other purposes
as required by applicable laws) in an amount equal to the
sum of the remaining monthly salary payments payable under
this Agreement between the effective date of Executive's
election to terminate his employment under this Agreement
and July 31, 1998 plus, if it has not otherwise been paid,
the lump sum severance payment specified in paragraph 3.
Before Executive's election to terminate under this
paragraph can become effective, Executive must have provided
United seven (7) days' written notice of his election by
registered mail addressed to the President of United at its
principal World Headquarters offices.  Executive's
termination of employment will be as of the seventh (7th)
day after receipt by United of such notice, at which time he
will no longer have the status of an active employee of
United (including the entitlement to benefits described in
Paragraph 3).
     
     5.  Regulations:  During his employment, Executive
         -----------
will be governed by applicable United regulations, as in
effect from time to time.

     6.  Confidentiality:
         ---------------
         A.  Executive agrees to keep any proprietary or
     confidential information concerning United which he has
     gained through his employment confidential.  Executive
     agrees that money damages could not adequately
     compensate United in case of a breach or threatened
     breach of this promise of confidentiality and that,
     therefore, United would be entitled to injunctive
     relief upon such breach.  Executive understands that it
     is United's intent to have this promise of
     confidentiality enforced to its fullest extent.
     Accordingly, Executive and United agree that, if any
     portion of this promise of confidentiality is
     unenforceable, the court should still construe and
     enforce this promise of confidentiality to the fullest
     extent permitted by law.
     
         B.  Executive and United agree to keep the terms
     of this Agreement, and of his working arrangement, as
     defined herein, confidential except that the source and
     amount of his income may be revealed as necessary for
     implementation and fulfillment of this Agreement,  tax,
     loan purposes and the like and for disclosure to legal
     counsel to carry out the review of this Agreement in
     accordance with Paragraph 7.
         
         C.  During the term of this Agreement, United will
     not take any action or make any communication that
     adversely reflects upon Executive or that causes,
     induces, or facilitates others to act adversely to
     Executive.

     7.  Assent and Release: In consideration for the
         ------------------
     payments and benefits provided in this Agreement,
     Executive hereby voluntarily, knowingly, willingly,
     irrevocably, and unconditionally releases UA and UAL
     together with their respective parents, subsidiaries
     and affiliates, and each of their respective officers,
     directors, employees, representatives, attorneys and
     agents, and each of their respective predecessors,
     successors and assigns (collectively, the 'Releasees')
     from any and all charges, complaints, claims,
     liabilities, obligations, promises, agreements, causes
     of action, rights, costs, losses, debts, and expenses
     of any nature whatsoever, known or unknown, which
     against them Executive or his successors or assigns
     ever had, now have or hereafter can, shall or may have
     (either directly, indirectly, derivatively or in any
     other representative capacity) by reason of any matter,
     fact or cause whatsoever arising from the beginning of
     time to the date of this Agreement, including without
     limitation all claims arising under the UAL Agreement,
     Title VII of the Civil Rights Act of 1964, the federal
     Age Discrimination in Employment Act of 1967, as
     amended, and all other federal, state or local laws,
     rules, regulations, judicial decisions or public
     policies now or hereafter recognized.  This release by
     Executive of the Releasees also includes, without
     limitation, all claims arising under each employee
     pension, employee welfare, and executive compensation
     plan of United now in effect or hereafter adopted,
     except for any benefits to be provided to Executive
     under this Agreement or in the normal course of
     Executive's employment through the Effective Date.  It
     is agreed that this paragraph shall survive termination
     of the Agreement.

     Executive expressly acknowledges and agrees that, by
     entering into this Agreement, Executive is waiving any
     and all rights or claims that he may have arising under
     the Age Discrimination in Employment Act of 1967, as
     amended, which have arisen on or before the date of
     execution of this Agreement.  Executive further
     expressly acknowledges and agrees that:
     
          (i)  In return for this Agreement, Executive will
     receive compensation beyond that which he was already
     entitled to receive before entering into this
     Agreement;
     
         (ii)  Executive has been advised by United to
     consult with an attorney before signing this Agreement;
     
        (iii)  Executive was given a copy of this
     Agreement on August 5, 1997, and informed that
     Executive had twenty-one (21) days within which to
     consider the Agreement and, if Executive considers this
     Agreement for fewer than 21 days, then Executive agrees
     that he has had a reasonable period of time to consider
     the Agreement; and
     
         (iv)  Executive was informed that Executive had
     seven (7) days following the date of execution of the
     Agreement in which to revoke the Agreement.  After
     seven (7) days this Agreement will become effective,
     enforceable and irrevocable unless written revocation
     is received by the undersigned from Executive on or
     before the close of business on the seventh (7th) day
     after Executive executed this Agreement.  If Executive
     revokes this Agreement it shall not be effective or
     enforceable and Executive will not receive the
     compensation or benefits described in this Agreement.
     
     8.  Non-Assignability; Assignment in the Event of
         ---------------------------------------------
Acquisition or Merger:  This Agreement and the benefits
---------------------
hereunder are not assignable or transferable by Executive;
the rights and obligations of United under this Agreement
will automatically be deemed to by assigned by United to any
corporation or entity into which United may be merged or
consolidate.
     
     9.  Applicable Law:  This Agreement shall be
         --------------
construed in accordance with the laws of the State of
Illinois, and the rights and obligations of the parties
hereunder shall be construed and enforced in accordance
with, and governed by the laws of the State of Illinois,
without regard to principles of conflict of laws.  Except
for an action seeking injunctive relief under Paragraph 6,
any dispute or controversy arising under or in connection
with this Agreement shall be settled exclusively by
arbitration in Chicago, Illinois in accordance with the
rules of the American Arbitration Association then in
effect.  Judgment may be entered on the arbitrator's award
in any court having jurisdiction.  Each party shall be
responsible for its own attorneys fees, costs, and expenses
in connection with the arbitration.

    10.  Paragraph Reference:  Any reference to paragraphs
         -------------------
or subparagraphs shall be references to paragraphs or
subparagraphs of this Agreement unless expressly stated
otherwise.

    11.  Severability:  If any provision of this Agreement
         ------------
or the application thereof is held invalid, the invalidity
shall not affect other provisions or applications of this
Agreement which can be given effect without the invalid
provisions or application in accordance with the essential
intent and purpose of this Agreement, and to this end the
provisions of this Agreement are declared to be severable.

    12.  Supersedes Prior Agreement(s):  This Agreement
         -----------------------------
supersedes and voids any prior oral or written agreement
relating in any way to Executive's employment with UA or UAL
which may have been entered into between the parties hereto
including, without limitation the UAL Agreement.  Any change
to this Agreement after its Effective Date must be in
writing and must be executed by UA, UAL, and Executive.
Executive hereby expressly waives any and all rights to
which he may be entitled under the UAL Agreement.

     United and Executive, having read and understood this
Agreement and, having consulted with others as appropriate,
hereby agree to be bound by its terms.

     IN WITNESS WHEREOF, the parties have executed this
Agreement effective as of August 8, 1997 at the World
                          
Headquarters of United Air Lines, Inc., 1200 East Algonquin
Road, Elk Grove Twp., Illinois 60007.



UAL Corporation and
United Air Lines, Inc.



By: /s/ G. Greenwald                     /s/ J.R. O'Gorman
    ----------------                     -----------------
Gerald Greenwald                         Joseph R. O'Gorman
Chairman & Chief Executive Officer