<DOCUMENT>
<TYPE> EX-10.6
<TEXT>
<HTML>
Exhibit 10.6

 
 
  SECOND AMENDMENT

UAL CORPORATION

EMPLOYEE STOCK OWNERSHIP PLAN

(Effective as of July 12, 1994)

By virtue and in exercise of the amending power reserved to UAL Corporation (the
"Company") under Section 13.1(a) of the UAL Corporation Employee Stock Ownership
Plan (effective as of July 12, 1994) (the "Plan"), which amending power
thereunder is subject to the approval of the Air Line Pilots Association
International ("ALPA") and the International Association of Machinists and
Aerospace Workers (the "IAM"), the Company hereby amends the Plan, subject to
the approval of ALPA and the IAM, as follows, effective January 1, 1995. The
amendments to Section 1(p) and 1(yy) as set forth below are intended to document
the previously-existing interpretation of the Plan, rather than to accomplish a
substantive change to the Plan.

1. The following is hereby inserted as a new paragraph at the end of the
material labelled "Part A" which precedes Section 1: "For the Plan Years
beginning on and after January 1, 1995, the foregoing percentages are amended to
take into account the participation by the IAM Employee Group in allocations of
Class 2 Non-Voting Preferred Stock under Part B and the Supplemental Plan.
Accordingly, the shares of Class 1 Non-Voting Preferred Stock allocated on or
after January 1, 1995, will be allocated ratably over the remaining Wage
Investment Period, to the Employee Groups in accordance with the following
revised percentages:

ALPA Employee Group - 32.234549%

IAM Employee Group - 47.036084%

Management and Salaried Employee Group - 20.729367%"

2. Clause (i) of Section 1(p) is amended to read as follows: "(i) the total cash
compensation (and any in-kind compensation which the Participant could have
elected to receive as cash) 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" 3. Section 1(p) is
amended by adding the following to the end of the section: "With respect to a
Participant who is a member of the ALPA Employee Group, Compensation shall
include pay received for vacation time in the year paid (whether before or after
termination of employment)." 4. Section 1(x) is amended as follows: [Add
appropriate amendment concerning eligibility of IAM members.] 5. The following
new Section 1(oo)A is hereby added after Section 1(oo) and before Section 1(pp):
"(oo)A 'Special Annual Allocation' means the allocation referred to in Section
5.4(f)." 6. Section 1(yy) is amended by adding the following to the end of the
section: "A Participant's Wage Investment shall be calculated with respect to
vacation pay in the year paid (whether before or after termination of
employment)." 7. Section 5.4(a)(i)(A) is amended by adding the following to the
end of the section: "For Class 1 Non-Voting Preferred Stock released for Plan
Years beginning on or after January 1, 1995, the allocation percentage shall be
as follows: ALPA Employee Group - 32.234549%; IAM Employee Group - 47.036084%
and Management and Salaried Employee Group - 20.729367%." 8. The following is
hereby added to the end of Section 5.4(a)(iii): "Notwithstanding the foregoing,
for each Plan Year beginning on or after January 1, 1995, the Employer
Contributions tentatively allocated under this clause (iii) shall be the
Employer Contributions remaining after the allocation of the Special Annual
Allocation (if any) for such Plan Year pursuant to Section 5.4(f). Accordingly,
a Participant's tentative allocation under this subsection shall be the sum of
the Special Annual Allocation (if any) allocated to the Participant for the Plan
Year, plus the allocation under the preceding portions of this clause of the
Employer Contributions remaining after the Special Annual Allocation." 9.
Section 5.4(c) is amended, for Plan Years beginning on or after January 1, 1995,
by eliminating the following proviso: "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." 10. The
second sentence of Section 5.4(c)(ii) is amended by inserting the following
after "Such number shall equal" and before "the number of shares that would have
been allocated to the Participant...": "the sum of the number of shares set
forth as the hypothetical allocation to the Participant in the Special Annual
Allocation for that Plan Year (if any), plus" 11. Section 5.4(c)(ii) is amended
by adding the following to the end of the section: "For Plan Years beginning on
or after January 1, 1995, the hypothetical share number shall be calculated by
taking into account the Special Annual Allocation applicable to that Plan Year
(if any). By way of illustration, assume that for the 1995 Plan Year, a total of
1,110,456.695 shares are to be allocated to members of the ALPA Employee Group,
and that 5,000 of those shares are to be allocated in the Special Annual
Allocation applicable members of the ALPA Employee Group. Under this example,
the hypothetical share number of a member of the ALPA Employee Group for 1995
shall equal the sum of (x) the portion of the 5,000 shares set forth as the
hypothetical allocation to the employee pursuant to the Special Annual
Allocation for 1995, plus (y) the employee's ratable portion (based upon
Compensation as modified under this clause (ii)) of the remaining 1,105,455.695
shares." 12. The following new Section 5.4(f) is added to the Plan: "(f) Special
Annual Allocations. For each Plan Year beginning on or after January 1, 1995,
the Special Annual Allocation described in Appendix A applicable to the Plan
Year (if any) shall be made after the application of clauses (i) and (ii) of
Section 5.4(a), but prior to the application of clause (iii) of Section 5.4(a)
and the clauses subsequent to clause (iii), and the hypothetical allocation set
forth in the Special Annual Allocation applicable to the Plan Year shall be made
as a part of the calculation of the hypothetical share number as set forth in
clause (ii) of Section 5.4(c). If Appendix A does not set forth a Special Annual
Allocation applicable to a particular Plan Year, then there shall be no Special
Annual Allocation for that Plan Year." 13. The following Appendix A is hereby
added to the Plan:

"APPENDIX A

SPECIAL ANNUAL ALLOCATIONS

This Appendix A is part of the UAL Corporation Employee Stock Ownership Plan.
The purpose of this Appendix A is to set forth the terms of the Special Annual
Allocation referred to in Section 5.4(f) of the ESOP. This Appendix A may only
be amended pursuant to Section 13.1 of the ESOP.

Special Annual Allocation for 1995. For the Plan Year beginning January 1, 1995,
there shall be two Special Annual Allocations. The first Special Annual
Allocation is described in subsection (a) below, and is intended to provide to
the accounts of certain Participants who are members of the IAM Employee Group
the shares of Class 1 Non-Voting Preferred Stock which would have been provided
in 1994, but for the application of the limits of Code Section 415. The second
Special Annual Allocation is described in subsection (b) below, shall be made to
all individuals who were Participants in 1994, and is intended to adjust the
Accounts of Participants to the levels which had originally been reported to
Participants in the allocation of shares for 1994, but which were overstated
because additional Compensation and Wage Investments were subsequently reported
for 1994. The second Special Annual Allocation is also intended to adjust the
Accounts of Participants whose accounts had not been overreported so that their
allocations will be on a par with the allocations to the Participants described
in the preceding sentence.

(a) Special Annual Allocation for IAM Employee Group. A portion of the Employer
Contributions allocated to the IAM Employee Group for 1995 shall be allocated to
the Accounts of those Participants who are members of the IAM Employee Group to
whom Contributions were limited by the application of Code Section 415 for the
1994 Plan Year. For each such Participant, the shares which would have been
allocated but for the application of the limits of Code Section 415 are referred
to as the "1994 Shortfall Shares." For purposes of calculating the Special 1995
IAM Allocation, there shall be calculated the "1995 IAM Average Contribution,"
which shall be equal to the total Employer Contributions allocated to the IAM
Employee Group for the 1995 Plan Year, divided by the total number of shares of
Class 1 Non-Voting Preferred Stock allocated to the IAM Employee Group for the
1995 Plan Year, excluding, however, the shares allocated to the IAM Employee
Group for the 1995 Plan Year on account of dividends paid on
previously-allocated shares.

(1) Amount to be included in tentative allocation. The following amount shall be
included in the tentative allocation under Section 5.4(a)(iii) as the Special
Annual Allocation to each affected Participant: the lesser of (i) the sum of
(xx) the 1995 IAM Average Contribution times the Participant's 1994 Shortfall
Shares, plus (yy) $8.8872, times the Participant's 1994 Shortfall Shares, times
a fraction the numerator of which is the 1995 IAM Average Contribution, and the
denominator of which is the fair market value of a share of Class 1 Non-Voting
Preferred Stock as of the end of the 1995 Plan Year, or (ii) the allocation
permitted for 1995 pursuant to Code Section 415.

(2) Shares to be included in hypothetical share number and hypothetical
allocation. The following number of shares is to be included in the hypothetical
share number under Section 5.4(c)(ii) and Section 2.4(a) of the Supplemental
Plan as the Special Annual Allocation for each affected Participant: the sum of
(i) the 1994 Shortfall Shares, plus (ii) $8.8872 times the Participant's 1994
Shortfall Shares divided by the fair market value of a share of Class 1
Non-Voting Preferred Stock as of the end of the 1995 Plan Year.

(b) 1995 Special Annual Allocation for All Employee Groups. For each individual
who was a Participant in 1994 (a "1994 Participant"), there shall be calculated
a number of shares referred to as the "1995 Make-up Shares." The 1995 Make-up
Shares for each 1994 Participant shall equal the difference between the number
of shares actually allocated to the 1994 Participant for the 1994 Plan Year
(using the final Compensation and Wage Investment data), and the number of
shares which would have been allocated to the 1994 Participant for the 1994 Plan
Year if the following facts had been correct for the 1994 Plan Year: (1) the
total Compensation of Participants who were members of the ALPA Employee Group
(without respect to the limitations of Code Section 401(a)(17) and the
limitation contained in Section 1(p) of four times the dollar limit under Code
Section 415(c)(1)(A)) was $415,308,677.81, (2) the total Compensation of
Participants who were members of the ALPA Employee Group (limited by the
limitation contained in Section 1(p) of four times the dollar limitation under
Code Section 415(c)(1)(A)) was $375,772,138.78, (3) the total Compensation of
ALPA Participants (without respect to the limitation contained in Section 1(p)
of four times the dollar limit under Code Section 415(c)(1)(A), but limited by
Code Section 401(a)(17)) was $407,265,547.88, (4) the total Wage Investments
were $91,675,662.89, (5) the total Compensation of members of the Management and
Salaried Employee Group (without respect to the limitation of Code Section
401(a)(17)) was $346,925,400.49, and (6) the total Compensation of members of
the Management and Salaried Employee Group (limited by Code Section 401(a)(17))
was $345,997,953.17.

For purposes of calculating the 1995 Special Annual Allocation, there shall be
calculated (x) the "1995 ALPA Average Contribution," which shall be equal to the
total Employer Contributions allocated to the ALPA Employee Group for the 1995
Plan Year, divided by the total number of shares of Class 1 Non-Voting Preferred
Stock allocated to the ALPA Employee Group for the 1995 Plan Year, excluding,
however, the shares allocated to the ALPA Employee Group for the 1995 Plan Year
on account of dividends paid on previously-allocated shares, and (y) the "1995
M&S Average Contribution," which shall be equal to the total Employer
Contributions allocated to the Management and Salaried Employee Group for the
1995 Plan Year, divided by the total number of shares of Class 1 Non-Voting
Preferred Stock allocated to the Management and Salaried Employee Group for the
1995 Plan Year, excluding, however, the shares allocated to the Management and
Salaried Employee Group for the 1995 Plan Year on account of dividends paid on
previously-allocated shares. The 1995 IAM Average Contribution, calculated as
set forth in subsection (a) above shall also be used in this subsection (b). For
each 1994 Participant, the result of the above calculation which applies his
Employee Group is the "Applicable Average Contribution."

(1) Amount to be included in tentative allocation. The following amount shall be
included in the tentative allocation under Section 5.4(a)(iii) as the Special
1995 Allocation to each 1994 Participant: the lesser of (i) the sum of (xx) the
Applicable Average Contribution, times the Participant's 1995 Make-up Shares,
plus (yy) $8.8872, times the Participant's 1995 Make-up Shares, times a fraction
the numerator of which is the Applicable Average Contribution, and the
denominator of which is the fair market value of a share of Class 1 Non-Voting
Preferred Stock as of the end of the 1995 Plan Year, or (ii) the allocation
permitted for 1995 pursuant to Code Section 415.

(2) Shares to be included in hypothetical share number and hypothetical
allocation. The following number of shares is to be included in the hypothetical
share number under Section 5.4(c)(ii) and Section 2.4(a) of the Supplemental
Plan as the Special Annual Allocation for each affected Participant: the sum of
(i) the 1995 Make-up Shares, plus (ii) $8.8872 times the Participant's 1994
Make-up Shares divided by the fair market value of a share of Class 1 Non-Voting
Preferred Stock as of the end of the 1995 Plan Year.

(c) In the case of any member of the IAM Employee Group who is subject to both
subsections (a) and (b), the total 1995 Special Annual Allocation shall be the
sum of the amounts determined for such Participant under both subsections.

IN WITNESS WHEREOF, the Company has caused this Second Amendment to be executed
on August 17, 1995.

                                                         UAL CORPORATION
 
 
 
 

                                                       /s/ Stuart I. Oran
                                                         Executive Vice
President-
                                                         Corporate Affairs and
                                                         General Counsel

                                                         APPROVED BY:

                                                        AIR LINE PILOTS
ASSOCIATION,
                                                        INTERNATIONAL
 

                                                        /s/ Harlow B.
Osteboe                             /s/ J.Randolph Babbitt
 
 

                                                         INTERNATIONAL
ASSOCIATION
                                                         OF MACHINISTS AND
                                                         AEROSPACE WORKERS
 

                                                       /s/ Kenneth W. Thiede
 

</HTML>
</TEXT>
</DOCUMENT>