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
Employees' Stock Purchase Plan - UAL Corp.
Was this helpful?