Employees’ Stock Purchase Plan – UAL Corp.
EMPLOYEES'
STOCK PURCHASE PLAN
OF
UAL CORPORATION
(As amended and restated - effective July 12, 1994)
The following is the Employees' Stock Purchase Plan of UAL
Corporation (the 'Company'), superseding the Plan as amended
February 1, 1993:
1. Purpose. The purpose of this Employees' Stock Purchase
Plan of UAL Corporation (hereinafter referred to as the
'Plan') is to establish a systematic savings program
that will permit eligible employees of the Company's
wholly-owned subsidiary, United Air Lines, Inc. and
United's wholly-owned subsidiaries (collectively,
'United') to acquire UAL Corporation Common Stock,
$0.01 par value (hereinafter referred to as the 'Common
Stock') at market prices currently in effect from time
to time during the period of an employee's
participation in the Plan. The Company's interest in
establishing the Plan is its belief that ownership of
stock in the Company by employees will provide an
additional inducement for such employees to remain with
their employer and will encourage them, by reason of
their greater stake in their employer's success, to
promote the best interests of the Company.
2. Definition of Eligible Employees. An eligible employee
is a regular full-time or regular part-time employee of
United, but not an employee classified as temporary.
An employee, however, will not be deemed to be an
eligible employee if (a) he is in a collective
bargaining unit in which the employees are represented
by a labor organization that has disapproved the Plan
or (b) he is not on the U.S. payroll of United. (The
U.S. payroll includes employees working in the U.S. or
Canada.)
3. Effective Date of Plan. The Plan, as amended herein,
will become effective on July 12, 1994.
4. Participation and Payroll Deductions. Subject to the
provisions of this and the next succeeding paragraph,
an employee may become a Participant in the Plan by
executing and delivering to United an authorization
directing periodic payroll deductions in multiples of
$2.50 ('Stock Purchase Deductions') of not less than
$2.50 per pay period and not less than $2.50 per month,
for purchases of Common Stock under the Plan. (All
payroll deductions, stock purchases, dividends and
other distributions are measured in U.S. dollars.) A
Participant may adjust his Stock Purchase Deductions by
submitting a new authorization to United. The Board of
Directors of United may, in its discretion, also
authorize contributions by employees by means other
than payroll deductions.
5. Limitations on Investments in Company Securities.
(a) Notwithstanding any other provision in this Plan to
the contrary, the maximum amount of Common Stock
that may be acquired by this Plan will be limited
as set forth below.
(b) Definitions. Capitalized terms not otherwise
defined by this Plan will have the following
meanings:
(i)'Company Plans' means this Plan, any current or
future tax-qualified defined contribution plan
maintained by the Company or United (excluding
the ESOP and the Supplemental ESOP), and any
other stock purchase plan maintained by the
Company or United, together with any trusts or
other funding vehicles associated with such
plans. A participant in the Company Plans
means any person with any account balance in
any Company Plan.
(ii) 'Effective Time' has the meaning given in
the Recapitalization Agreement.
(iii) 'Employee Group' means each of the
following groups of employees of the Company or
United together with associated former
employees, Beneficiaries, and alternate payees:
(A) the ALPA Employee Group, which means
employees represented by the Air Line
Pilots Association (the 'Association');
(B) the IAM Employee Group, which means
employees represented by the International
Association of Machinists and Aerospace
Workers ('IAM');
(C) the AFA Employee Group, which means
employees represented by the Association of
Flight Attendants ('AFA'); and
(D) the Management and Salaried Employee Group,
which means employees classified by United
as Management Employees, Salaried
Employees, or Meteorologist Employees and
other employees who perform the functions
performed by salaried and managerial
employees of the Company and United
(including any functions that such
employees will perform in the future).
(iv)'ESOP' means the UAL Corporation Employee
Stock Ownership Plan, as amended from time to
time, together with its related trust(s).
(v)'ESOP Preferred Stocks' means the following
stocks issued by the Company: the Class 1 ESOP
Convertible Preferred Stock, the Class 2 ESOP
Convertible Preferred Stock, the Class P ESOP
Voting Junior Preferred Stock, the Class M ESOP
Voting Junior Preferred Stock, and the Class S
ESOP Voting Junior Preferred Stock.
(vi)'Recapitalization Agreement' means the
Amended and Restated Agreement and Plan of
Recapitalization, dated as of March 25, 1994,
as in effect and as amended from time to time,
among the Company, the Association, and the
IAM.
(vii)'Restated Certificate' means the Restated
Certificate of Incorporation of UAL
Corporation.
(viii)'Supplemental ESOP' means the UAL
Corporation Supplemental ESOP and the related
trust(s).
(c) Limitations on Investment in Common Stock.
(i) As of any day during the six-month period
beginning on the Effective Time, Participants
hereunder in any Employee Group, together with
any other members of that Employee Group, may
not acquire, in the aggregate, under this Plan
and/or under any other Company Plans, more than
2% of the outstanding Common Stock held by
persons other than the ESOP and the
Supplemental ESOP (in addition to any Common
Stock received by members of such Employee
Group in the Reclassification, as defined in
the Recapitalization Agreement). Purchases and
sales of Common Stock will be netted at the end
of each day to determine if the 2% limit is
reached.
(ii) During the six-month period beginning on
the date after the period described in
subparagraph (i) above and ending on the last
day of the 'Measuring Period,' as defined in
Section 1.10(i) of the Recapitalization
Agreement, Participants may not acquire any
Common Stock under this Plan and/or under any
other Company Plans.
(iii) At any time on or after the Effective
Time, the participants in the Company Plans may
not hold or acquire, in the aggregate, through
this Plan and/or any other Company Plans, more
than the lesser of (A) 30% of the shares of
outstanding Common Stock held by persons other
than the ESOP and the Supplemental ESOP, or (B)
20% of the aggregate number of shares of
outstanding Common Stock, including the number
of shares of Common Stock issuable upon
conversion of the ESOP Preferred Stocks
outstanding or issuable (including Available
Unissued ESOP Shares, as defined in Article
FIFTH, Section 1.5 of the Restated Certificate)
(iv) Participants in any Employee Group,
together with any other members of such
Employee Group, may not hold or acquire, in the
aggregate, through this Plan and/or any other
Company Plans, more than 10% of the outstanding
Common Stock at any time on or after the
Effective Time.
(d) As provided in the Recapitalization Agreement, each
share of old $5.00 par value UAL Corporation common
stock will, on or about July 12, 1994, be converted
into (i) one-half of a new share of Common Stock
and (ii) $84.81 in cash. Such cash will be
distributed to Participants in this Plan as soon as
practicable after the Plan receives such cash.
Participants will continue to participate in the
Plan with respect to their Common Stock, including
any fractional shares credited to their accounts in
connection with the issuance of the new shares of
Common Stock.
(e) For the purposes of this Section 5, 'acquire' means
any net increase in the holding of the applicable
securities, whether attributable to employee
contributions, employer contributions, rollover
contributions, investment transfers, or any other
means.
(f) The Company will monitor the limitations set forth
in this Section 5, as well as the parallel
limitations set forth in other Company Plans. The
Company will permit acquisitions of Common Stock to
occur in the chronological order in which they are
made until such time as the acquisitions are
limited by one of the foregoing rules.
6. Stock Purchases.
(a) As soon as practicable after the 16th day of each
month, or more frequently, at United's discretion,
United will remit the aggregate of the stock
purchase deductions made through such date to The
First National Bank of Chicago (hereinafter
sometimes called the 'Custodian'). As soon as
practicable after the first day of the following
month, United will remit the aggregate of the stock
purchase deductions made through such date to the
Custodian. The Custodian will be accountable for
all remittances received by it from United but will
have no duty to determine that the amounts remitted
comply with the requirements of the Plan or with
authorizations of stock purchase deductions, all of
which records and computations will be the sole
responsibility of United. After each receipt of
stock purchase deductions, the Custodian will
purchase, at such times and in such amounts as it
in its judgment deems appropriate, within the next
succeeding 20 days, the total number of full shares
of Common Stock that can be purchased with such
Stock Purchase Deductions. Any monies not so
expended because insufficient to purchase a full
share will be added to the funds made available
during the following month for the purchase of
Common Stock. Purchases of Common Stock under the
Plan may be made (i) on the New York, Chicago, or
Pacific Stock Exchange, or (ii) to the extent
necessary to provide money for distribution to
participants in lieu of fractional shares, from
shares held by the Custodian, at current prices.
The cost of Common Stock purchased for any of the
purposes of the Plan will include all brokerage
charges involved in the purchase.
(b) In connection with each purchase of Common Stock
with monies represented by Stock Purchase
Deductions, a stock purchase account for each
Participant (which account will be maintained by
United and not by the Custodian) will be credited
with a number of shares (whether full or
fractional) of Common Stock that bears the same
relationship to the total number of shares
purchased that the Stock Purchase Deduction of such
Participant made in such month bears to the total
Stock Purchase Deductions of all Participants made
in such month.
(c) All certificates for shares of Common Stock
purchased under the Plan will be issued in the name
of the Custodian or of a nominee of the Custodian
and will be delivered to and held by the Custodian.
United will reimburse the Custodian for all of its
expenses, except brokerage charges, and United will
pay the Custodian such reasonable compensation as
may be agreed upon from time to time by United and
the Custodian. To the extent that United does not
pay such expenses and compensation, the Custodian
will be entitled to reimbursement therefor from the
property held by it as Custodian. The expenses of
United in connection with the maintenance of
accounts of the Participants will be paid by
United.
7. Dividends and Other Distributions.
(a) The Custodian, upon receipt by it of any cash
dividends upon the shares of Common Stock held by
it under the Plan, will forthwith remit such cash
dividends to United. Within approximately two
weeks after dividend payment date, United will
cause such dividends to be distributed in cash to
the employees for whose accounts shares of Common
Stock were held by the Custodian as of the
respective record dates for the payment of such
dividends; provided that if a Participant withdraws
from the Plan, payment of his proportion of
dividends held for his account will be made as soon
as practicable after such withdrawal as hereafter
provided in Section 9.
(b) If the Company declares a stock dividend on the
Common Stock or a split-up or reclassification of
the Common Stock, such stock dividend or any Common
Stock resulting from such split-up or
reclassification will be delivered to the
Custodian, and United will cause a proportionate
credit to be made to the respective accounts of the
employees entitled thereto (except as otherwise
provided in Section 5(d)).
(c) The Company will deliver to each Participant a
proxy to vote at any meeting of shareholders the
number of full shares of Common Stock that is held
for the account of such Participant by the
Custodian on such record date, and will deliver to
such Participant all reports and other
communications addressed by the Company to its
shareholders.
8. Participant's Cessation of Stock Purchase Deductions.
A Participant may, at any time, direct United, in
writing, to cease making Stock Purchase Deductions.
Such action will not terminate the Participant's
participation in the Plan.
9. Delivery of Stock and Credit Balances on Termination.
(a) Upon the earliest to occur of any one of the
following events: (i) termination of a
Participant's employment with United, with or
without cause, (ii) the Participant's retirement,
(iii) the payment of any money from the stock
purchase account of a Participant, or the delivery
of any stock by the Custodian to anyone other than
the Participant, in either case pursuant to the
order or judgment of any Court, or (iv) the filing
of a petition in bankruptcy by or against the
Participant, the Participant's participation in the
Plan will terminate. The Plan will terminate as to
all employees on such date hereafter designated by
the Company's Board of Directors as the termination
date of the Plan.
(b) As soon as practicable after the termination of a
Participant's participation in the Plan, United
will pay to such Participant in cash the amount of
Stock Purchase Deductions, if any, made for such
Participant and not used for the purchase of Common
Stock and will cause the Custodian to deliver to
such Participant (i) certificates for the number of
full shares of Common Stock then held by the
Custodian for the account of such Participant, and
(ii) cash for any fractional share of Common Stock
then held by the Custodian for such Participant, as
follows: United will direct the Custodian to sell
sufficient shares to cover the aggregate amount of
fractional shares allocated to the accounts of all
terminating Participants and the net proceeds will
be distributed to the respective Participants in
the ratio that the fractional shares allocated in
each account bears to the total fractional shares.
United will also deliver to each such Participant
the portion of any dividend held by United for the
account of such Participant. Payments or
deliveries pursuant to the order or writ of any
court will release United and the Custodian from
any further liability with respect to the items so
paid or delivered.
(c) United will pay all applicable stock transfer taxes
in respect of transfers of Common Stock by the
Custodian with respect to employees.
10. Withdrawal of Stock. Once during each calendar year, a
Participant may withdraw all or any number of full
shares of Common Stock credited to his account in the
Plan without affecting such Participant's continued
participation in the Plan. If a Participant withdraws
all of his Common Stock and any cash credited to his
account, he will cease to be a Participant in the Plan.
A Participant may, however, reenroll in the Plan at any
later time if he is then eligible, provided, however,
that the one withdrawal per calendar year rule
specified above in this Section will apply continuously
dating back to any earlier periods of participation.
11. Issuance of Certificates. A Participant may request
his stock certificate to be issued in joint tenancy
(the Participant and one other adult person of legal
responsibility) by written direction.
12. Transfer of Rights and Designation of Beneficiaries.
Except as otherwise provided in this Section, no rights
or interests under the Plan may be transferred or
pledged. An employee may designate a beneficiary or
beneficiaries to receive, in the event of his death,
the shares of Common Stock and uninvested cash or cash
for fractional shares, if any, credited or to be
credited to his account. Such designation may be
amended, replaced, or revoked by the employee at any
time. All designations, amendments, replacements, and
revocations of designations will be on forms prescribed
by United and must be received by United before the
death of the employee. Distribution of shares of
Common Stock and cash, if any, will be made in
accordance with such designation to the extent it is
valid and enforceable under applicable law. If there
is no such valid designation of a beneficiary who is
surviving upon the death of the employee, distribution
of the employee's interest in the Plan will be made to
the employee's estate.
13. Administration of the Plan.
(a) The Plan will be administered by United, which
reserves the right to limit participation in the
Plan as to both individual employees and in the
aggregate and, from time to time, to adopt rules
and regulations for carrying out the Plan or for
providing for matters not specifically covered
thereby. Any notices to United concerning
administration of the Plan and any requests for
information covering the Plan and its
administration should be sent to United Airlines -
WHQPZ, Stock Purchase Plan, P.O. Box 66100,
Chicago, IL 60666. The administrator's telephone
number is (708) 952-4596.
(b) United will provide a report to each Participant,
at least annually, showing the number of shares of
Common Stock credited to his account as of the end
of the preceding calendar year.
14. Responsibilities of Custodian. All directions to the
Custodian will be in writing and will be signed by an
officer of United. The Custodian may accept any such
written direction or certificate as conclusive evidence
of any facts therein stated and will be under no
obligation at any time to call for any further
evidence. The Custodian will not incur any liability
whatsoever for acting or refraining to act in
accordance with any such direction of United and will
not have any obligation to see the application of any
monies or property transferred or delivered by the
Custodian.
15. Immunities of Custodian. United will indemnify and
save harmless the Custodian of and from any and all
liabilities, costs, and expenses (including attorneys
fees) incurred by the Custodian or to which the
Custodian may be subjected by reason of its activities
under the Plan. To the extent that United fails to
provide for any such liabilities, costs, or expenses,
the Custodian will be entitled to reimbursement
therefor from the property held by it as Custodian.
16. Litigation. If there is any litigation relative to the
Plan or to property held by the Custodian or United
thereunder, whether or not the Custodian or United be
party thereto, either or both thereof may rely and act
upon any order entered by any court, whether with or
without jurisdiction, and upon any writ or garnishment,
writ of attachment, or other writ issued by any such
court.
17. Amendment and Termination of the Plan. The Plan may be
amended or terminated as authorized by resolution of
the Board of Directors of the Company, but not in
contravention of the Recapitalization Agreement.
IN WITNESS WHEREOF, this Plan has been adopted and executed
as of July 12, 1994 by the following duly authorized officer
of the Company.
UAL CORPORATION
By: /s/ Francesca Maher
Name: Francesca Maher
Title: Vice President-Law and
Corporate Secretary
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