Edgar Filing: UAL CORP /DE/

SCHEDULE 14A

PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )

Filed by the registrant [X]

Filed by a party other than the registrant [ ]

Check the appropriate box:

[ ] Preliminary proxy statement. [ ] Confidential, for use of the
Commission only (as permitted by
Rule 14a-6(e)(2)).

[X] Definitive proxy statement.

[ ] Definitive additional materials.

[ ] Soliciting material pursuant to Section 240.14a-12

UAL Corporation
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(Name of Registrant as Specified in Its Charter)

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(Name of Person(s) Filing Proxy Statement if Other Than the Registrant)

Payment of filing fee (check the appropriate box):

[X] No fee required.

[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.

(1) Title of each class of securities to which transaction applies:

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(2) Aggregate number of securities to which transaction applies:

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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):

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(5) Total fee paid:

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[ ] Fee paid previously with preliminary materials.
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[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.

(1) Amount Previously Paid:

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(2) Form, Schedule or Registration Statement No.:

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(4) Date Filed:

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[UAL CORPORATION LOGO]

March 27, 2002

Dear Fellow Owner:

On behalf of the Board of Directors, I'm pleased to invite you to the 2002
Annual Meeting of Stockholders. A notice of the 2002 annual meeting and proxy
statement follow. You will also find your proxy or voting direction card and the
2001 annual report. I am pleased to inform you that you have three ways to vote
your proxy or voting direction card. We encourage you to use the first option,
vote by Internet, if possible.

1.VOTE BY INTERNET at http://www.computershare.com/us/proxy

2.VOTE BY PHONE by using the 1-888 number on your proxy or voting direction
card

3.VOTE BY MAIL, by signing and dating the proxy or voting direction card
enclosed in this package and returning it in the postage paid envelope
that is provided

Your vote is important. Please take a moment now to vote, even if you plan
to attend the meeting and thank you for your continued support of United
Airlines.

Sincerely,

/s/ JOHN W. CREIGHTON, JR.
John W. Creighton, Jr.

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
AND PROXY STATEMENT

DATE: Thursday, May 16, 2002
TIME: 8:00 a.m.
PLACE: Executive Dining Room, Sixth Floor
University of Chicago Gleacher Center
450 N. Cityfront Plaza Drive
Chicago, IL 60611

MATTERS TO BE VOTED ON:

1. Election of the following members of the Board of Directors:

- Five Public Directors, to be elected by holders of Common Stock

- Four Independent Directors, to be elected by holders of Class I Junior
Preferred Stock

- One ALPA Director, to be elected by holders of Class Pilot MEC Junior
Preferred Stock

- One IAM Director, to be elected by holders of Class IAM Junior Preferred
Stock

- One Salaried/Management Employee Director, to be elected by holders of
Class SAM Junior Preferred Stock

2. Any other matters that may be properly brought before the meeting,
including six stockholder proposals

Francesca M. Maher
Senior Vice President,
General Counsel and Secretary

Chicago, Illinois
March 27, 2002

TABLE OF CONTENTS

PAGE
----

GENERAL INFORMATION......................................... 3
VOTING RIGHTS AND PROXY INFORMATION......................... 3
PROPOSAL NO. 1 -- ELECTION OF DIRECTORS..................... 8
Directors to be Elected by Common Stock................... 8
Directors to be Elected by Other Classes of Stock......... 9
CERTAIN INFORMATION CONCERNING OUR BOARD OF DIRECTORS....... 12
Committees................................................ 12
Compensation Committee Interlocks and Insider
Participation; Certain Relationships and Related
Transactions........................................... 14
Director Compensation..................................... 15
BENEFICIAL OWNERSHIP OF SECURITIES.......................... 16
Certain Beneficial Owners................................. 16
Directors and Executive Officers.......................... 18
AUDIT COMMITTEE............................................. 20
General................................................... 20
Audit Committee Report.................................... 20
UAL CORPORATION RELATIVE MARKET PERFORMANCE................. 21
EXECUTIVE COMPENSATION...................................... 22
UAL Corporation Compensation and Compensation
Administration Committees' Report...................... 22
Summary Compensation Table................................ 27
Option Grants in 2001..................................... 28
Aggregated 2001 FY-End Option Values...................... 29
Long-Term Incentive Plans -- Awards in 2001............... 29
Pension Plan Table........................................ 30
Employment Contracts and Arrangements..................... 30
INDEPENDENT PUBLIC ACCOUNTANTS.............................. 31
Independent Accountant Fees............................... 31
PROPOSALS NO. 2-7 -- STOCKHOLDER PROPOSALS.................. 32
Proposal No. 2 Concerning Cumulative Voting............... 32
Proposal No. 3 Concerning Poison Pills.................... 33
Proposal No. 4 Concerning Executive Compensation.......... 35
Proposal No. 5 Concerning the CEO and Chairman
Positions.............................................. 36
Proposal No. 6 Concerning Certain Business Combinations... 38
Proposal No. 7 Concerning Election of ESOP Directors...... 39
SUBMISSION OF STOCKHOLDER PROPOSALS......................... 40
ANNUAL REPORT............................................... 40

PROXY STATEMENT

GENERAL INFORMATION

This Proxy Statement is furnished to you by our Board of Directors in
connection with the solicitation of your proxy to be voted at the annual meeting
of stockholders to be held on Thursday, May 16, 2002. This proxy statement and
the proxy or voting direction card are being mailed to you on approximately
March 27, 2002. "We", "our", "us" and the "company" refers to UAL Corporation.

VOTING RIGHTS AND PROXY INFORMATION

HOW DO I VOTE?

-- VOTE BY INTERNET

You can vote via the Internet by logging onto
www.computershare.com/us/proxy and following the prompts using your six digit
control number located on your proxy or voting direction card. This vote will be
counted immediately and there is no need to send in your proxy or voting
direction card.

-- VOTE BY TELEPHONE

The telephone voting procedure is simple and fast. Dial the 1-888 number on
your proxy or voting direction card and listen for further directions. You must
have a touch-tone phone in order to respond to the questions. This vote will be
counted immediately and there is no need to send in your proxy or voting
direction card.

YOU CAN SAVE OUR COMPANY MONEY IF YOU USE THE VOTE BY INTERNET OR TELEPHONE
OPTIONS.

-- VOTE BY PROXY OR VOTING DIRECTION CARD

Shares eligible to be voted, and for which a properly signed proxy or
direction card is returned, will be voted in accordance with the instructions
specified on the proxy or voting direction card. If you do not mark any
instructions, your shares will be voted in favor of proposal 1 and against
proposals 2 through 7 for those stockholders holding a proxy; and against
proposals 2 through 7 for those stockholders holding a voting direction card.

WHO IS ENTITLED TO VOTE?

You are entitled to vote if our records show that you held your shares at
the close of business on March 18, 2002. This date is known as the record date
for determining who receives notice of the meeting and who is entitled to vote.

The following chart shows the number of shares of each class of our voting
stock outstanding as of the record date, the number of holders of each class as
of the record date entitled to vote at the meeting, the aggregate and per share
votes for shares of each class for all matters on which the shares vote, and the
class of directors the class is entitled to elect.

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AGGREGATE VOTES VOTING
SHARES NUMBER PER FOR
TITLE OF CLASS OUTSTANDING OF VOTES HOLDERS OF RECORD SHARE DIRECTORS
-----------------------------------------------------------------------------------------------

Common Stock 55,795,739 55,795,739 26,132 1 Class
elects 5
Public
Directors
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Class P ESOP Voting Junior 6,506,370 31,526,452 1 (ESOP Trustee) 4.85 --
Preferred Stock
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Class M ESOP Voting Junior 6,096,046 25,320,726 1 (ESOP Trustee) 4.15 --
Preferred Stock
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Class S ESOP Voting Junior 2,439,937 11,347,613 1 (ESOP Trustee) 4.65 --
Preferred Stock
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Class Pilot MEC Junior 1 1 1 (ALPA-MEC) 1 Class
Preferred Stock elects 1
ALPA
Director
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Class IAM Junior Preferred 1 1 1 (IAM) 1 Class
Stock elects 1
IAM
Director
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Class SAM Junior Preferred 3 3 2 (SAM Director 1 Class
Stock and Senior Vice elects 1
President-People SAM
Services and Director
Engagement)
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Class I Junior Preferred 3 3 3 (Independent 1 Class
Stock Directors) elects 4
Independent
Directors*
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* Subsequent to the record date, the fourth share of Class I stock was
transferred to John H. Walker, the fourth Independent Director, when he was
appointed on March 21, 2002.

HOW DO ESOP PARTICIPANTS VOTE?

Special voting rules will apply to ESOP participants who hold voting
preferred stock through the ESOP Trustee. ESOP participants may vote by
Internet, telephone or mail. Please consult your accompanying materials for
information concerning the voting of these shares.

The P, M and S classes of ESOP voting preferred stock held by a trust
established under a tax-qualified employee stock ownership plan (called the
qualified ESOP), that have been allocated to individual participants in the
ESOP, will be voted by participants, as named fiduciaries under the Employee
Retirement Income Security Act of 1974, on a confidential pass-through basis.
The ESOP Trustee generally is obligated to vote as

instructed by the participants to whom the voting preferred stock has been
allocated, and the outstanding shares command the entire voting power of each
class of voting preferred stock. The Class P voting preferred stock allocated to
former employees who were members of ALPA will be voted by the ESOP Trustee. The
ESOP Trustee will (except as may be required by law) vote the unallocated or
otherwise unvoted shares in the qualified ESOP in proportions directed by
participants who give instructions to the ESOP Trustee for these shares. Each
participant who is an employee has the right to give directions to the ESOP
Trustee in the proportion that the participant's allocated shares bear to the
allocated shares of all participants giving directions.

Shares held by the ESOP Trustee under a non-qualified employee stock
ownership plan (called the supplemental ESOP) will be voted as instructed by the
administrative committee appointed under the supplemental ESOP. The
administrative committee will consider the views of participants concerning the
vote, but is not required to take any particular action in response to those
views.

WHAT CLASSES OF STOCK VOTE FOR WHICH MATTERS AND WHAT IS THE VOTE REQUIRED?

The holders of common stock; the P, M and S classes of voting preferred
stock; and the Class Pilot MEC, IAM and SAM stocks will vote together as a
single class on all items at the annual meeting except the election of
directors. The presence in person or by proxy of the holders of a majority of
the total voting power of the shares of all the classes outstanding at the
record date is necessary to constitute a quorum at the meeting for all items of
business other than the election of directors. The Class I stock does not vote
on any matter other than the election of the Independent Directors (as defined
in our restated certificate of incorporation, also called our charter).

The presence in person or by proxy of the holders of a majority of the
total voting power of the outstanding shares entitled to vote on the election of
a particular class of director(s) is necessary to constitute a quorum at the
meeting for voting on that matter.

Under the Delaware General Corporation Law and our charter (1) the
affirmative vote of the holders of the shares of capital stock present in person
or by proxy at the meeting representing a plurality of the votes cast on the
matter will be required to elect the directors to be elected by the applicable
class of capital stock, and (2) the affirmative vote of the holders of the
shares of capital stock representing a majority of the votes present in person
or by proxy at the meeting and entitled to be cast on the matter will be
required to approve the other matters in this notice of annual meeting and proxy
statement.

HOW DO ABSTENTIONS AND BROKER NON-VOTES WORK?

Abstentions will have the effect of a vote against the matters presented
for a vote of the stockholders (other than the election of directors). This is
because abstaining shares are considered present and unvoted, which means they
have the same effect as votes against the matter. Abstentions have no effect on
the election of directors. Broker non-votes will have no effect on the outcome
of the vote on any of the matters presented for your vote and will not be
counted for purposes of establishing a quorum.

HOW DOES THE PROXY VOTING PROCESS WORK?

If the proxy card is voted properly by using the Internet or telephone
procedures specified or is properly returned by dating, signing and mailing, the
proxy will be voted at the annual meeting in accordance with the instructions
indicated by it. Our Board does not know of any matters, other than as described
in this notice of annual meeting and proxy statement, which are to come before
the annual meeting. If a proxy is given, the persons named in the proxy will
have authority to vote in accordance with their best judgment on any other
matter that is properly presented at the meeting for action, including any
proposal to adjourn or concerning the conduct of the meeting.

If a quorum is not present at the time the annual meeting is convened for
any particular purpose, or if for any other reason we believe that additional
time should be allowed for the solicitation of proxies, we may adjourn the
meeting with your vote then present. The persons named in the proxy may vote any
shares of capital stock for which they have voting authority in favor of an
adjournment.

HOW IS MY PROXY VOTED IF I DO NOT INDICATE HOW TO VOTE?

If no instructions are indicated, proxies will be voted (1) for the
election of directors of the class on which the shares represented by the proxy
are entitled to vote and (2) against all of the stockholder proposals.

HOW DO I REVOKE A PROXY?

Any proxy may be revoked by the person giving it at any time before it is
voted. We have not established any specified formal procedure for revoking. A
proxy may be revoked by a later proxy delivered using the Internet or telephone
voting procedures or by mail to the Secretary. A proxy may also be revoked by
written notice mailed to the Secretary. Attendance at the Annual Meeting will
not automatically revoke a proxy, but a holder of common stock in attendance may
request a ballot and vote in person, which revokes a prior granted proxy.

HOW ARE PROXIES BEING SOLICITED AND WHO PAYS SOLICITATION EXPENSES?

Proxies are being solicited by and on behalf of the Board. All expenses of
the solicitation, including the cost of preparing and mailing this proxy
statement, will be borne by us. In addition to solicitation by use of mails,
proxies may be solicited by our directors, officers and employees in person or
by telephone or other means of communication. These individuals will not be
additionally compensated, but may be reimbursed for out-of-pocket expenses
associated with solicitation. Arrangements will also be made with custodians,
nominees and fiduciaries for forwarding of proxy solicitation material to
beneficial owners of common stock and voting preferred stock held of record, and
we may reimburse these individuals for their reasonable expenses. To assure the
presence in person or by proxy of the largest number of stockholders possible,
we have engaged Georgeson Shareholder to solicit proxies on our behalf. We are
paying them a proxy solicitation fee of $7,500 and reimbursing them for
reasonable out-of-pocket expenses.

WHAT DO I NEED TO GET INTO THE ANNUAL MEETING?

-- SHAREHOLDERS OF RECORD

If you are a shareholder of record on March 18, 2002, you (or your duly
appointed proxy holder) are entitled to vote and attend the meeting. Certain
procedures have been adopted to ensure that UAL's shareholders can check in
efficiently when entering the meeting.

If you are a record holder (or a record holder's duly appointed proxy) and
do not have an admittance card with you at the meeting, you will be admitted
upon verification of ownership at the shareholder's registration desk. The
admission ticket is located on the lower portion of your proxy or voting
direction card.

-- SHAREHOLDERS THROUGH INTERMEDIARIES

Persons who own stock through brokers, trustees, plans or in "street name"
and not directly through ownership of stock certificates are considered
beneficial owners. Beneficial owners of record on March 18, 2002 can obtain
admittance cards only at the shareholder's registration desk by presenting
evidence of common stock ownership. This evidence could be a proxy from the
institution that is the record holder of the stock or your most recent bank or
brokerage firm account statement that includes the record date, along with
proper identification.

Requests for proxies or voting direction cards from brokers, trustees or
fiduciaries should be processed as described in the accompanying materials.

PROPOSAL NO. 1

ELECTION OF DIRECTORS

Except where you withhold authority, your proxy will be voted at our 2002
Annual Meeting of Stockholders or any adjournments or postponements for the
election of the nominee(s) named below for a term of one year and until his or
her successor is duly elected and qualified. Incumbent directors will hold
office until the Annual Meeting and until their successors are elected and
qualified, subject to the director's earlier death, retirement or removal. Our
Board of Directors expects all nominees named below to be available for
election.

DIRECTORS TO BE ELECTED BY COMMON STOCK

PUBLIC DIRECTORS

Five Public Directors are to be elected by the holders of common stock.
Each nominee was previously elected by the holders of the common stock (other
than Mr. Creighton, who previously served as an Independent Director until his
election as a Public Director on October 28, 2001) and has served continuously
as a Public Director since the date of his election. The term Public Director is
used as defined in our charter. Their principal occupations for the past five
years and other directorships held by them are set forth below.

If a nominee unexpectedly becomes unavailable before election, proxies from
holders of common stock may be voted for another person designated by the Board
or the appropriate board committee as required by our charter. No persons other
than our directors is responsible for the naming of nominees.

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(1) PRINCIPAL OCCUPATION OR EMPLOYMENT DIRECTOR
NOMINEE (2) OTHER BUSINESS AFFILIATIONS AGE SINCE
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John W. Creighton, Jr. (1) Chairman and Chief Executive Officer 69 1998
(10/28/01) of UAL and its wholly owned
subsidiary, United Air Lines, Inc.
Chairman (1/1/01-10/31/01), Unocal
Corporation (oil and gas exploration
and production). Retired Chief
Executive Officer and President (1997),
Weyerhaeuser Company (forest products).
President (1988-1997) and Chief
Executive Officer (1991-1997),
Weyerhaeuser.
(2) Director, Unocal Corporation.
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Rono J. Dutta (1) President (1999) of UAL and United. 50 1999
Senior Vice President -- Planning
(1994-1999).
(2) Trustee, The Marsico Investment Fund
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W. James Farrell (1) Chairman and Chief Executive Officer 59 2001
for the past five years, Illinois Tool
Works, Inc. (manufacturing and
marketing of engineered components).
(2) Director, Allstate Insurance Company,
Illinois Tool Works, Inc. and Sears,
Roebuck & Co.
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James J. O'Connor (1) Retired Chairman and Chief Executive 65 1984
Officer, Unicom Corporation (1994-1998)
(holding company) and its wholly owned
subsidiary, Commonwealth Edison Company
(1980-1998) (supplier of electricity).
(2) Director, Corning Incorporated,
Smurfit-Stone Container Corporation and
Tribune Company.
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Paul E. Tierney, Jr. (1) General Partner, Darwin Capital 59 1990
Partners (investment management) (1999)
and Managing Member, Development
Capital, LLC (investment management)
(1997).
(2) Director, Liz Claiborne, Inc.
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DIRECTORS TO BE ELECTED BY OTHER CLASSES OF STOCK

The following classes of directors are to be elected by the holders of
certain classes of our stock other than common stock. THE HOLDERS OF COMMON
STOCK DO NOT VOTE ON THE ELECTION OF THESE DIRECTORS. Each nominee was
previously elected or appointed by the holders of the applicable class of our
stock and has served continuously as a director since the date of his or her
first election or appointment. If a nominee unexpectedly becomes unavailable
before election, or we are notified that a substitute nominee has been selected,
votes will be cast pursuant to the authority granted by the proxies from the
respective holder(s) for the person who may be designated as a substitute
nominee.

INDEPENDENT DIRECTORS -- ELECTED BY HOLDERS OF CLASS I STOCK

Four Independent Directors are to be elected by the holders of our Class I
stock. The Independent Director Nomination Committee has nominated each nominee
and under a stockholders agreement among the holders of Class I stock, ALPA, the
IAM and us, each holder has agreed to vote in favor of the nominees. No person,
other than the Independent Director Nomination Committee, is responsible for the
naming of nominees.

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(1) PRINCIPAL OCCUPATION OR EMPLOYMENT DIRECTOR
NOMINEE (2) OTHER BUSINESS AFFILIATIONS AGE SINCE
------------------------------------------------------------------------------------

Richard D. McCormick (1) Chairman Emeritus (1999) and Chairman 61 1994
(1992-1999), US WEST, Inc.
(telecommunications). President (1986-
1998) and Chief Executive Officer
(1991-1998), US WEST.
(2) Director, Wells Fargo & Company and
United Technologies Corporation.
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Hazel R. O'Leary (1) President (2002) O'Leary & Associates 64 1999
(energy services and investment
strategy). President and Chief
Operating Officer (2000-2002),
Blaylock & Partners (investment
banking). President (1997-2000),
O'Leary & Associates. Secretary
(1993-1997), U.S. Department of Energy
(government).
(2) Director, The AES Corporation and
Scottish Annuity & Life Holdings, Ltd.
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John K. Van de Kamp (1) President, Thoroughbred Owners of 66 1994
California (trade association) for the
past five years. Of Counsel, Dewey
Ballantine (law firm) for the past
five years.
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John H. Walker (1) Chief Executive Officer (2001) and 44 3/21/02
President and Chief Operating Officer
(2000-2001), Weirton Steel Corporation
(steel manufacturer). President, Flat
Rolled Products (1997-2000) and Vice
President, Operations (1996-1997),
Kaiser Aluminum Corporation (aluminum
company which filed for protection
under federal bankruptcy laws on
2/12/02).
(2) Director, Weirton Steel Corporation.
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ALPA DIRECTOR -- ELECTED BY CLASS PILOT MEC STOCK

One ALPA Director (as defined in our charter) is to be elected by the
United Airlines Pilots Master Executive Council, ALPA, the holder of our Class
Pilot MEC stock. The ALPA-MEC has nominated and intends to re-elect Paul R.
Whiteford, Jr. as the ALPA Director.

Paul R. Whiteford, Jr. (1) Chairman (2002) and Vice-Chairman 51 2002
(2000-2001), ALPA-MEC (labor union).
Captain, B767, United, for the past
five years.
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IAM DIRECTOR -- ELECTED BY CLASS IAM STOCK

One IAM Director (as defined in our charter) is to be elected by the
International Association of Machinists and Aerospace Workers, the holder of our
Class IAM stock. The IAM has nominated and intends to elect Stephen R. Canale as
the IAM Director.

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(1) PRINCIPAL OCCUPATION OR EMPLOYMENT DIRECTOR
NOMINEE (2) OTHER BUSINESS AFFILIATIONS AGE SINCE
-------------------------------------------------------------------------------------

Stephen R. Canale (1) President and Directing General Chairman 57 --
(1999) and Assistant General Chairman
(1997), IAM District Lodge 141 (labor
union).
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SALARIED/MANAGEMENT EMPLOYEE DIRECTOR -- ELECTED BY CLASS SAM STOCK

One Salaried/Management Employee Director (as defined in our charter) is to
be elected by the holders of our Class SAM stock, who are W. Douglas Ford, the
Salaried/ Management Employee Director, and Sara A. Fields, our Senior Vice
President-People Services and Engagement. Mr. Ford has been nominated for
election by the "System Roundtable," a body of salaried and management employees
of United empowered to review issues relating to us and how those issues affect
the salaried and management employees. Under a stockholders agreement among the
holders of Class SAM stock and us, each holder has agreed to vote in favor of
the System Roundtable nominee.

W. Douglas Ford (1) Chief Executive, Refining & Marketing 58 3/14/02
(1999) and Executive Director (2000) until
retirement on 3/31/02, BP p.l.c. (petroleum
and petrochemicals holding company),
Executive Vice President (1993-1999), Amoco
Corporation (oil company).
(2) Director, USG Corporation.
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CERTAIN INFORMATION CONCERNING OUR BOARD OF DIRECTORS

Our Board of Directors held a total of 15 meetings in 2001. All directors
attended 75 percent or more of the board meetings and board committee meetings
of which they were members.

COMMITTEES

The Board of Directors has Executive, Audit, Compensation, Compensation
Administration, CAP, Labor, Independent Director Nomination, Outside Public
Director Nomination, Pension and Welfare Plans Oversight and Transaction
Committees. Below is a brief description of the functions performed by the
committees, the number of meetings held and the names of committee members.

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NAME AND FUNCTIONS OF COMMITTEE MEETINGS IN 2001
--------------------------------------------------------------------------------------------

4
EXECUTIVE

- authorized to exercise the powers of the Board in
management of our business and affairs, with certain
exceptions
- responsible for safety and security oversight for United
- reviews Board effectiveness and oversees compensation
arrangements for non-employee directors
- administers the directors plan
- reviews management succession planning for certain senior
positions
- acts as a search committee and recommends to Board
appointment of a successor CEO (requires four votes,
excluding Mr. Creighton)
--------------------------------------------------------------------------------------------
3
AUDIT

- reviews and discusses with management and independent
auditors our annual financial statements prior to
publication, financial reporting practices and results of
annual external audit
- reviews work of the independent auditors, scope of annual
external audit and the auditor's independence
- makes annual recommendations to our Board for appointment
of independent public accountants for the coming year
- reviews the effectiveness of our financial and accounting
functions, organization, operations and management and
adequacy of internal accounting controls
- reviews major accounting policies and significant
judgments affecting the financial statements
- establishes and reviews the adequacy of our code of
business conduct and corporate compliance programs
- reviews and reassesses adequacy of this committee's
charter on an annual basis
--------------------------------------------------------------------------------------------

5
COMPENSATION

- reviews and approves compensation and benefits of our
officers
- reviews general policy matters relating to compensation
and benefits of our non-union employees
- administers our equity incentive compensation plans,
except for responsibilities reserved for the Compensation
Administration Committee
--------------------------------------------------------------------------------------------
6
COMPENSATION ADMINISTRATION

- administers our stock option plans and executive
compensation programs to the extent these functions cannot
or are not appropriate to be performed by the Compensation
Committee in light of any provision of the Internal
Revenue Code, securities laws or other applicable laws or
regulations
--------------------------------------------------------------------------------------------
1
CAP

- oversees implementation of our Competitive Action Plan to
improve United's competitiveness on short-haul routes
under which United Shuttle(R) was established
- approves on our behalf any modifications to the
Competitive Action Plan, other than those matters reserved
to the Labor Committee
- approves modifications to Salaried and Management Employee
Investment (as defined in our charter) (vote must include
two union directors and all Outside Public Directors, as
defined in our charter)
--------------------------------------------------------------------------------------------
13
LABOR

- reviews and approves the entering into of, and
modifications and amendments to, collective bargaining
agreements to which we are a party, with certain
exceptions
--------------------------------------------------------------------------------------------
3
INDEPENDENT DIRECTOR NOMINATION

- nominates candidates to become Independent Director
members of the Board
- fills vacancies in Independent Director positions
- appoints Independent Directors to serve on Board
Committees (nominations and appointments require vote of
majority of Independent Directors plus one union director)
--------------------------------------------------------------------------------------------
1
OUTSIDE PUBLIC DIRECTOR NOMINATION

- nominates candidates to become Outside Public Director
members of the Board
- fills vacancies in Outside Public Director position
- appoints Outside Public Directors to serve on Board
Committees
--------------------------------------------------------------------------------------------

2
PENSION AND WELFARE PLANS OVERSIGHT

- oversees our compliance with laws governing employee
benefit plans that we maintain
--------------------------------------------------------------------------------------------
0
TRANSACTION

- evaluates and advises the Board on any proposed merger or
consolidation of us with or into, the sale, lease or
exchange of all or substantially all of our property or
assets to, or a significant business transaction with, any
Labor Affiliate (as defined in our charter)
--------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------------------------
COMMITTEE MEMBERSHIP
----------------------------------------------------------------------------------------------------------------------------------
PENSION
OUTSIDE &
INDEPENDENT PUBLIC WELFARE
COMP DIRECTOR DIRECTOR PLANS
AUDIT CAP COMP ADMIN EXECUTIVE NOMINATION LABOR NOMINATION OVERSIGHT TRANSACTION
----------------------------------------------------------------------------------------------------------------------------------

John W. Creighton,
Jr. -- -- Ch Ch
----------------------------------------------------------------------------------------------------------------------------------
Rono J. Dutta
----------------------------------------------------------------------------------------------------------------------------------
W. James Farrell -- -- -- -- Ch -- --
----------------------------------------------------------------------------------------------------------------------------------
W. Douglas Ford -- -- --
----------------------------------------------------------------------------------------------------------------------------------
Richard D. McCormick -- Ch Ch -- -- -- --
----------------------------------------------------------------------------------------------------------------------------------
James J. O'Connor -- -- -- -- Ch
----------------------------------------------------------------------------------------------------------------------------------
Hazel R. O'Leary -- -- -- -- Ch --
----------------------------------------------------------------------------------------------------------------------------------
John F. Peterpaul -- -- -- -- --
----------------------------------------------------------------------------------------------------------------------------------
Paul E. Tierney, Jr. Ch -- -- -- --
----------------------------------------------------------------------------------------------------------------------------------
John K. Van de Kamp -- Ch -- -- -- Ch --
----------------------------------------------------------------------------------------------------------------------------------
John H. Walker -- -- -- --
----------------------------------------------------------------------------------------------------------------------------------
Paul R. Whiteford,
Jr. -- -- -- -- --

----------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------------
Key: -- = Current Committee Assignment
Ch = Chairman
----------------------------------------------------------------------------------------------------------------------------------

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION; CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS

Mr. Creighton and Capt. Whiteford serve on the Compensation Committee, but
not the Compensation Administration Committee. Mr. Creighton, Capt. Whiteford
and Mr. Canale are employees of ours. Capt. Whiteford is also the Chairman of
the ALPA-MEC and an officer of ALPA. ALPA and we are parties to a collective
bargaining agreement for our pilots represented by ALPA. Mr. Canale is President
and Directing General Chairman of the IAM District Lodge 141. We and the IAM are
parties to a collective bargaining agreement for our ramp and stores, public
contact employees, food service, security officers and Mileage Plus(R) employees
represented by the IAM.

DIRECTOR COMPENSATION

We do not pay directors who are employees of the company additional
compensation for their services as directors. From January to September 2001,
compensation for non-employee directors included the following:

- annual retainer of $18,000

- $900 for each board and board committee meeting attended

- annual retainer of $2,700 to committee chairmen (other than chair of
Compensation Administration Committee)

- expenses of attending board and committee meetings

- 400 shares of common stock each year

- 189 deferred stock units representing common stock each year

Beginning in September 2001, non-employee directors waived their
compensation for the remainder of the year.

Under our stock ownership guidelines, our directors are to keep the 400
shares they receive each year while they are on the Board. They may also elect
to receive some or all of their cash retainers and fees in UAL common stock, as
well as defer their stock and cash compensation for tax purposes. The deferred
stock units are unfunded and are not settled until after the director leaves the
Board.

We consider it important for our directors to understand our business and
have exposure to our operations and employees. For this reason, we provide free
transportation and free cargo shipment on United to our directors and their
spouses and eligible dependent children. We reimburse our directors for income
taxes resulting from actual use of the travel and shipment privileges. A
director who retires from the Board with at least five years of company
creditable service will receive free travel and cargo benefits for life, subject
to certain exceptions.

The cost of this policy in 2001 for each director, including cash payments
made in January 2002 for income tax liability, was as follows:

----------------------------------------------------------------------------------------------
NAME COST($) NAME COST($)
----------------------------------------------------------------------------------------------

John W. Creighton, Jr. 11,758 Hazel R. O'Leary 1,531
----------------------------------------------------------------------------------------------
Rono J. Dutta 18,504 John F. Peterpaul 4,791
----------------------------------------------------------------------------------------------
W. James Farrell 10,778 Paul E. Tierney, Jr. 76,847
----------------------------------------------------------------------------------------------
Richard D. McCormick 47,432 John K. Van de Kamp 27,879
----------------------------------------------------------------------------------------------
James J. O'Connor 44,697 Paul R. Whiteford, Jr. 0
----------------------------------------------------------------------------------------------

BENEFICIAL OWNERSHIP OF SECURITIES

CERTAIN BENEFICIAL OWNERS

The following table shows the number of shares of our voting securities
owned by any person or group known to us as of March 18, 2002, to be the
beneficial owner of more than 5% of any class of our voting securities.

------------------------------------------------------------------------------------------------------
PERCENT OF
TOTAL
AMOUNT AND VOTING POWER
NATURE OUTSTANDING
NAME AND ADDRESS OF OF BENEFICIAL PERCENT OF FOR PROPOSALS
BENEFICIAL OWNER TITLE OF CLASS OWNERSHIP(1) CLASS 2-7
------------------------------------------------------------------------------------------------------

State Street Bank and Trust Common Stock 56,099,316(2) 50.8% --
Company, Trustee Class P ESOP Voting 6,620,179(2) 100% 25.4%
225 Franklin Street Junior Preferred Stock
Boston, MA 02110 Class M ESOP Voting 6,156,627(2) 100% 20.4%
Junior Preferred Stock
Class S ESOP Voting 2,466,818(2) 100% 9.2%
Junior Preferred Stock
------------------------------------------------------------------------------------------------------
FMR Corp. Common Stock 5,905,310(3) 10.836% 4.9%
82 Devonshire Street
Boston, MA 02109
------------------------------------------------------------------------------------------------------
AXA Conseil Vie Assurance Common Stock 4,261,940(4) 7.8% 3.5%
Mutuelle,
AXA Assurances I.A.R.D.
Mutuelle &
AXA Assurances Vie Mutuelle
370, rue Saint Honore
75001 Paris, France
AXA Courtage Assurance
Mutuelle
26, rue Louis le Grand
75002 Paris, France
AXA
25, avenue Matignon
75008 Paris, France
AXA Financial, Inc.
1290 Avenue of the
Americas
New York, NY 10104
------------------------------------------------------------------------------------------------------
Capital Group Common Stock 3,533,630(5) 6.5% 2.9%
International, Inc.
11100 Santa Monica Blvd
Los Angeles, CA 90025
------------------------------------------------------------------------------------------------------
United Airlines Pilots Class Pilot MEC Junior 1 100% --
Master
Executive Council Preferred Stock
Air Line Pilots
Association,
International
6400 Shafer Court,
Suite 700
Rosemont, IL 60018
------------------------------------------------------------------------------------------------------

International Association Class IAM Junior 1 100% --
of
Machinists and Aerospace Preferred Stock
Workers
District #141
9000 Machinists Place
Upper Marlboro, MD 20722
------------------------------------------------------------------------------------------------------
W. Douglas Ford Class SAM Junior 2 66.67% --
UAL Corporation Preferred Stock
P.O. Box 66919
Chicago, IL 60666
------------------------------------------------------------------------------------------------------
Sara A. Fields Class SAM Junior 1 33.33% --
Senior Vice Preferred Stock
President-People
Services and Engagement
United Airlines
P.O. Box 66100
Chicago, IL 60666
------------------------------------------------------------------------------------------------------
Richard D. McCormick Class I Junior 1 33.34% --
US WEST, Inc. Preferred Stock
3200 Cherry Creek South
Drive
Denver, CO 80209
------------------------------------------------------------------------------------------------------
Hazel R. O'Leary Class I Junior 1 33.33% --
2 Wisconsin Circle #700 Preferred Stock
Chevy Chase, MD 20815
------------------------------------------------------------------------------------------------------
John K. Van de Kamp
Dewey Ballantine Class I Junior 1 33.33% --
333 S. Grand Ave., Preferred Stock
26th Floor
Los Angeles, CA 90071-
3003
------------------------------------------------------------------------------------------------------

(1) Shares of Class Pilot MEC, Class IAM and Class SAM stock elect one ALPA, IAM
and Salaried/Management Employee Director, respectively, and have one vote
on all matters submitted to the holders of common stock other than the
election of directors. Shares of Class I stock elect four Independent
Directors and do not vote on other matters except as required by law.
Subsequent to the record date, one share of Class I stock was transferred to
John H. Walker, the fourth Independent Director, when he was appointed on
March 21, 2002.

(2) Based on Schedule 13G dated February 8, 2002, in which reporting person
reported that (1) as trustee under the ESOP, it had shared voting power over
6,620,179 shares of Class P ESOP Voting Junior Preferred Stock representing
25.4% of our voting power, 6,156,627 shares of Class M ESOP Voting Junior
Preferred Stock representing 20.4% of our voting power, and 2,466,818 shares
of Class S ESOP Voting Junior Preferred Stock (Class P, M and S voting
stocks referred to as the voting preferred stocks) representing 9.2% of our
voting power, and shared dispositive power over

11,858,902 shares of Class 1 ESOP Convertible Preferred Stock and 1,973,713
shares of Class 2 ESOP Convertible Preferred Stock, each convertible into
quadruple that number of shares of common stock, as well as 6,098 shares of
common stock issuable upon conversion of the voting preferred stocks, and
(2) as trustee acting in various fiduciary capacities, it had sole
dispositive power over 404,765 shares of common stock, shared dispositive
power over 519 shares, sole voting power for 352,475 shares and shared
voting power over 5,000 shares. The reporting person disclaims beneficial
ownership of all shares reported. Voting power of voting preferred stocks is
limited to matters other than the vote for directors.

(3) Based on Schedule 13G/A (Amendment No. 1) dated February 11, 2002, in which
reporting person reported sole voting power for 30,800 shares and
dispositive power for 5,905,310 shares.

(4) Based on Schedule 13G/A (Amendment No. 18) dated March 11, 2002, in which
AXA Conseil Vie Assurance Mutuelle, AXA Assurances I.A.R.D. Mutuelle, AXA
Assurances Vie Mutuelle, and AXA Courtage Assurance Mutuelle, as a group,
AXA and AXA Financial, Inc. reported sole voting power for 883,340 shares,
shared voting power for 3,083,300 shares and sole dispositive power for
4,261,940 shares.

(5) Based on Schedule 13G/A (Amendment No. 2) dated February 12, 2002, in which
reporting person reported sole voting power for 3,459,920 shares and sole
dispositive power for 3,533,630 shares.

DIRECTORS AND EXECUTIVE OFFICERS

The following table sets forth the number of shares of common stock and of
voting preferred stock held in the ESOP owned as of March 18, 2002, by each
director, nominee for director and executive officer included in the Summary
Compensation Table, and by our directors and executive officers as a group.
Unless we say otherwise in a footnote, the owner exercises sole voting and
investment power over the securities (other than unissued securities which
ownership we have imputed to the owner). Some of our directors and executive
officers also own shares of other classes of our preferred stock as shown in the
table above.

----------------------------------------------------------------------------------------------------
NAME OF DIRECTOR OR COMMON STOCK PERCENT VOTING PREFERRED STOCK
EXECUTIVE OFFICER AND GROUP BENEFICIALLY OWNED(1) OF CLASS BENEFICIALLY OWNED(2)
----------------------------------------------------------------------------------------------------

Stephen R. Canale 1,337 * 0
----------------------------------------------------------------------------------------------------
John W. Creighton, Jr. 407,058 * 0
----------------------------------------------------------------------------------------------------
Rono J. Dutta 263,629 * 1,415
----------------------------------------------------------------------------------------------------
W. James Farrell 1,422 * 0
----------------------------------------------------------------------------------------------------
W. Douglas Ford 149 * 0
----------------------------------------------------------------------------------------------------
Richard D. McCormick 11,189 * 0
----------------------------------------------------------------------------------------------------
James J. O'Connor 10,049 * 0
----------------------------------------------------------------------------------------------------
Hazel R. O'Leary 2,485 * 0
----------------------------------------------------------------------------------------------------
John F. Peterpaul 4,437 * 0
----------------------------------------------------------------------------------------------------
Paul E. Tierney, Jr. 40,060 * 0
----------------------------------------------------------------------------------------------------
John K. Van de Kamp 5,689 * 0
----------------------------------------------------------------------------------------------------
John H. Walker 0 * 0
----------------------------------------------------------------------------------------------------
Paul R. Whiteford, Jr. 7,786 * 1,248
----------------------------------------------------------------------------------------------------
Douglas A. Hacker 363,506 * 1,798
----------------------------------------------------------------------------------------------------
Andrew P. Studdert 220,771 * 995
----------------------------------------------------------------------------------------------------
Frederic F. Brace 174,163 * 1,086
----------------------------------------------------------------------------------------------------
Directors and Executive
Officers as a Group (17
persons) 1,647,281 3.0 7,619
----------------------------------------------------------------------------------------------------

* Less than 1%

(1) These numbers include (a) deferred stock units for Creighton 4,922, Farrell
1,022, Ford 149, McCormick 8,991, O'Connor 3,327, O'Leary 2,085, Peterpaul
1,237, Tierney 4,244, and Van de Kamp 5,689 (which reflects beneficial
ownership of common stock represented by deferred stock units under the UAL
Corporation 1995 Directors Plan); (b) options exercisable within 60 days of
March 18, 2002 for Brace 153,025, Creighton 400,000, Dutta 222,550, Hacker
299,850, Studdert 179,300, and for the group 1,378,000; (c) common stock
issuable upon conversion of ESOP preferred for Brace 4,346, Dutta 5,660,
Hacker 7,192, Studdert 3,979, Whiteford 4,993, and for the group 30,476 (see
footnote 2); (d) for Mr. Canale, 1,337 held indirectly by a pension plan;
(e) for Mr. Dutta, 88 held indirectly by a United 401(k) plan; (f) for Mr.
Whiteford, 2,792 held indirectly by a qualified retirement plan; (g) for Mr.
Brace, 5,090 each held indirectly by his and his spouse's trust; and (h) for
the group, 4,320 held indirectly by estate of deceased spouse.

(2) Reflects beneficial ownership through the ESOP of (a) Class P Voting Stock
for Mr. Whiteford, and (b) Class S Voting Stock for Messrs. Brace, Dutta,
Hacker and Studdert, and for directors and executive officers as a group.
Represents less than 1%.

AUDIT COMMITTEE

GENERAL

Our Audit Committee is comprised of seven independent members as
independence is defined in the NYSE listing rules. Our Audit Committee has
adopted a written charter that was approved by our Board in February 2001. The
charter specifies the scope of the Audit Committee's responsibilities and how it
should carry out those responsibilities.

AUDIT COMMITTEE REPORT

UAL CORPORATION

UAL Audit Committee Report

To the Board Of Directors of UAL Corporation:

We have reviewed and discussed with management the Company's audited
financial statements as of and for the year ended December 31, 2001.

We have discussed with Arthur Andersen LLP, the Company's independent
auditors, the matters required to be discussed by Statement of Auditing
Standards No. 61, Communication with Audit Committees, as amended, by the
Auditing Standards Board of the American Institute of Certified Public
Accountants.

We have received and reviewed the written disclosures and the letter from
Arthur Andersen LLP required by Independence Standard No. 1, Independence
Discussions with Audit Committees, as amended, by the Independence Standards
Board, and have discussed with Arthur Andersen LLP its independence.

Based on the reviews and discussions referred to above, we recommend to the
Board of Directors that the financial statements referred to above be included
in the Company's Annual Report on Form 10-K for the year ended December 31,
2001.

Paul E. Tierney, Jr., Chairman James J. O'Connor
W. James Farrell Hazel R. O'Leary
Richard D. McCormick John K. Van de Kamp

UAL CORPORATION
RELATIVE MARKET PERFORMANCE
TOTAL RETURN 1996-2001

[PERFORMANCE GRAPH]

--------------------------------------------------------------------------------------------------
1996 1997 1998 1999 2000 2001
--------------------------------------------------------------------------------------------------

UAL Corp 100.00 148.00 98.50 124.10 63.56 22.43
S&P 500 Index 100.00 133.36 171.48 207.56 188.66 166.24
Peer Group* 100.00 166.82 163.07 161.13 228.01 155.39
--------------------------------------------------------------------------------------------------

Source: Compustat Database
--------------------------------------

*Alaska Air, AMR, Delta, Southwest, USAirways

EXECUTIVE COMPENSATION

UAL CORPORATION COMPENSATION AND
COMPENSATION ADMINISTRATION COMMITTEES' REPORT

WHAT WAS THE COMPANY'S COMPENSATION PHILOSOPHY FOR 2001?

The company's executive compensation program is designed to:

- Attract, retain and motivate top quality and experienced executives,

- Provide industry competitive compensation opportunities, and

- Support a pay-for-performance culture.

WHAT IS THE STRUCTURE OF THE COMPENSATION PROGRAM?

- The officer compensation program primarily focuses on promoting pay-for-
performance by emphasizing pay at risk. The program is oriented toward
stockholders' interests through the use of long-term stock-based
initiatives, creating a direct link between officer rewards and increased
stockholder value.

- Each element of total compensation (base salary, annual bonus and stock
options) is targeted at median levels paid by major industrial
corporations with comparable revenue and scope of operations. For those
positions considered unique to the airline industry, the company targets
the median practices, adjusted for size, of other major airlines.

- The annual incentive program, the Performance Incentive Plan, is based on
financial, operational, customer and employee satisfaction goals.

- The company maximizes tax deductibility of compensation paid to employees
covered by Internal Revenue Code Section 162(m), with certain exceptions.

In addition, long term incentive arrangements for executives of the
Company's wholly-owned subsidiary, UAL Loyalty Services, Inc. (formerly known as
United NewVentures and referred to as ULS), have been established to closely
align compensation with the increased value of that business as discussed below.

WHAT CHANGES HAVE OCCURRED TO EXECUTIVE COMPENSATION IN 2001?

Mr. James Goodwin resigned as Chairman of the Board and Chief Executive
Officer of the company on October 28, 2001. Upon his resignation, Mr. Creighton
assumed the positions of Chairman and CEO. Mr. Creighton receives no salary and
incentive

compensation at this time. At the time of hire, Mr. Creighton received a stock
option grant of 400,000 shares of the company's common stock at a grant price of
$14.48.

In September 2001, Mr. Brace was promoted to Senior Vice President and
Chief Financial Officer in order to allow Mr. Hacker to focus his attention on
the development and operation of ULS as its President. Mr. Hacker's 2001 stock
option grant was reduced by 50% based on his participation in the ULS long-term
incentive plan. He will receive no further stock option grants as a result of an
increase in his participation in the ULS long-term incentive plan as described
below.

HOW ARE BASE SALARIES DETERMINED?

Base salaries for executive officers of the company are based on median
levels paid by other major industrial corporations comparable in revenue and
scope of operations. For airline industry specific roles, the company targets
the median, adjusted for size, of other major airlines.

In keeping with the Committees' philosophy of providing compensation to
attract, retain and motivate top quality and experienced officers, base salaries
of executive officers were increased in April 2001. The increase averaged 11%
based on competitive officer salaries at other companies similar in revenue and
operational scope.

HOW ARE BONUSES DETERMINED?

United's performance incentive plan was created to support the company's
strategic objectives and reward individual performance. On an annual basis, the
threshold, target and maximum performance levels for financial, operational,
customer and employee related goals are set for the company. The incentive award
payout is based on the company performance against the goals, and on grade
assignment of the participant's job. Awards are modified based on individual
performance. The incentive program allows for the deferral, at the participant's
election, of all or a portion of his or her award in UAL common stock or cash. A
participant who elects a stock deferral is entitled to a deferred stock credit
valued at 120% of the dollar amount deferred. Deferred stock units in excess of
100% of the award's value will be forfeited if the units are withdrawn within 5
years of the award year.

The CEO recommends award amounts to the Compensation Committee (or the
Compensation Administration Committee for awards intended to qualify under
Section 162(m) of the Internal Revenue Code) based on a pre-established formula.

Executive officers who participated in this plan did not receive any
incentive award for 2001 because of the company's 2001 financial performance.

As part of the creation of ULS, a long-term incentive plan (referred to as
LTIP) was adopted by ULS to reward its employees for its share of the
incremental net increase in value of ULS's asset portfolio. Under the LTIP, Mr.
Hacker receives 1% of the net value created of ULS's asset portfolio. This
amount was increased to 1.75% effective July 2001
23

in lieu of any future UAL stock option grants. Payouts under the LTIP would
occur at the end of its four-year term or earlier in the event of a public
offering relating to the ULS business or other liquidating event. Payments under
the LTIP will not qualify for Section 162(m) of the Internal Revenue Code
treatment. A liquidating event occurred in 2000 under the LTIP, the payment of
which vests in four equal annual installments. Mr. Hacker received one-fourth of
this total payment in 2001 as set forth in the Summary Compensation Table.

In addition, under the company's performance incentive plan, performance
objectives were set for ULS. The threshold, target and maximum performance
levels for financial, operational, customer and business development goals were
set. Mr. Hacker as President of ULS received a payment as set forth in the
Summary Compensation Table as a result of ULS meeting its objectives under the
performance incentive plan.

HOW ARE STOCK OPTIONS DETERMINED?

The stock compensation program is comprised entirely of annual stock
options. Option grants are determined in consideration of individual performance
based on general and airline industry practices. The CEO recommends stock option
grants for each executive officer to the Compensation Committee (or the
Compensation Administration Committee, in the case of awards which qualify for
certain exemptions from Section 16 of the Securities Exchange Act pursuant to
Rule 16b-3 or Section 162(m) qualified grants). The Committee determines stock
awards for the CEO based upon a comparable process and makes a final
determination on stock awards for the executive officers.

Stock options may not be granted at less than fair market value on the date
of grant. Stock options carry a 10-year term and typically vest ratably over a
four-year period. The company's stock option plan includes provisions to
preserve, to the maximum extent possible, the deductibility by the company of
amounts awarded under the plan.

The company's executive officers received a stock option grant in 2001,
subject to the company's normal vesting schedule (except for Mr. Creighton), in
full compliance with Section 162(m) of the Internal Revenue Code. Mr.
Creighton's 2001 grant vests in six equal monthly installments commencing one
month from the date of grant.

DOES THE COMPANY USE RESTRICTED STOCK AS AN ELEMENT OF THE COMPENSATION PROGRAM?

The company has eliminated restricted stock as a component of its normal
compensation program. However, to enable the company to attract high quality
management at the most senior officer levels, sign-on compensation packages for
these officers at the time of hiring may include cash and restricted or other
stock awards in addition to compensation of the types described above. In
addition, restricted stock may be used for a limited number of United employees
in response to compelling business requirements, such as for recruitment,
retention or promotion of key management employees.

HOW HAS THE COMPANY RESPONDED TO IRS LIMITS ON DEDUCTIBILITY OF COMPENSATION?

Section 162(m) of the Internal Revenue Code limits the tax deductibility of
compensation in excess of $1 million paid to certain executive officers, unless
the payments are made under plans that satisfy the technical requirements of the
Code as "performance-based."

Stock options and awards under the Performance Incentive Plan are designed
so that the compensation paid will be tax deductible to the company. The
Committee believes that performance-based pay over $1 million is sometimes
required to attract and retain executives in a competitive marketplace. The
company has not paid any non-deductible compensation in excess of $1 million.
The Committee reserves the right to determine when and if it is in the company's
best interest to forego deductibility.

DOES THE COMPANY REQUIRE EXECUTIVE OFFICERS TO HOLD STOCK IN THE COMPANY?

To encourage accumulation and retention of common stock by officers,
guidelines have been adopted providing for the minimum ownership of common stock
at the following multiples of annual salary:

- Chairman and Chief Executive Officer, five times;

- President and Executive Vice Presidents, three times; and

- Senior Vice Presidents, two times.

Unexercised stock options, unvested restricted stock and ESOP stock
ownership are not recognized for purposes of these guidelines.

WHAT WAS THE BASIS FOR MR. GOODWIN'S 2001 COMPENSATION?

The company entered into a five-year employment agreement with Mr. Goodwin
in 1999. He did not receive an increase in base salary, which remained at the
2000 level of $900,000.

Under his agreement, Mr. Goodwin was eligible to receive an annual bonus
under the company's Performance Incentive Plan. Mr. Goodwin's target percentage
could be no less than the maximum permitted under the plan (called the target
bonus). He was entitled to an additional 20% over his target award amount for
superior performance. A pro-rated bonus of $742,192 was paid to him in 2001 in
accordance with his employment agreement.

Mr. Goodwin received a non-qualified stock option grant in February 2001 of
309,600 shares, subject to the company's normal vesting schedule. In addition,
under his employment agreement, his remaining restricted stock awards vested
immediately as of the date of his resignation.

In connection with Mr. Goodwin's resignation, he received a severance
payment in 2001 equal to three times his base salary and bonus under the terms
of his employment agreement as disclosed in the Summary Compensation Table. In
addition, the company amended his employment agreement to provide office and
secretarial support for five years.

WHAT WAS THE BASIS FOR MR. CREIGHTON'S 2001 COMPENSATION?

Mr. Creighton received no salary and bonus in 2001 as Chairman and CEO of
the company. In connection with his appointment, he received a non-qualified
stock option grant of 400,000 shares of common stock which vests in six monthly
installments beginning one month from the date of grant.

DO THE COMMITTEES SEEK OUTSIDE, INDEPENDENT ADVICE ON COMPENSATION MATTERS?

The Compensation Committee and Compensation Administration Committee
consult with independent compensation advisors on executive compensation
matters. The Committees also have access to competitive data on compensation
levels for officer positions.

UAL CORPORATION COMPENSATION COMMITTEE

Richard D. McCormick, Chairman Hazel R. O'Leary
John W. Creighton, Jr. John F. Peterpaul
W. James Farrell Paul R. Whiteford, Jr.

UAL CORPORATION COMPENSATION ADMINISTRATION COMMITTEE

Richard D. McCormick, Chairman Hazel R. O'Leary
W. James Farrell

SUMMARY COMPENSATION TABLE

ANNUAL COMPENSATION LONG TERM COMPENSATION
-------------------------------- -----------------------------------
AWARDS PAYOUTS
------------------------- -------
OTHER RESTRICTED SECURITIES
ANNUAL STOCK UNDERLYING LTIP ALL OTHER
NAME AND SALARY BONUS COMPENSATION AWARDS OPTIONS/SARS PAYOUTS COMPENSATION
PRINCIPAL POSITION YEAR ($) ($) ($)(1) ($)(2) (#) ($)(3) ($)(4)
--------------------------- ---- ------- ------- ------------ ---------- ------------ ------- ------------

John W. Creighton 2001 0 0 11,364 0 400,000 0
Chairman and Chief
Executive Officer
James E. Goodwin 2001 739,615 742,192 52,239 0 309,600 5,711,359
Former Chairman and 2000 843,528 225,000 60,877 0 180,000 116,468
Chief Executive Officer 1999 572,843 580,000 446 3,912,500 251,700 213,351
Rono J. Dutta 2001 600,000 0 17,633 0 145,700 47,741
President 2000 556,379 118,062 39,739 0 78,000 35,670
1999 351,596 280,000 29,542 1,581,250 65,300 97,470
Douglas A. Hacker 2001 515,000 192,880 70,037 0 60,700 160,116 41,482
Executive Vice President 2000 464,583 109,316 9,001 0 65,000 25,622
1999 344,546 245,000 9,001 1,581,250 65,300 109,946
Andrew P. Studdert 2001 515,000 0 6,562 0 121,400 21,271
Executive Vice President 2000 451,042 85,586 4,634 0 65,000 30,120
and Chief Operating 1999 294,311 210,000 7,628 1,581,250 45,800 87,489
Officer
Frederic F. Brace 2001 350,953 0 38,192 0 52,300 12,166
Senior Vice President and
Chief Financial Officer

------------------------------
(1) For Mr. Goodwin, amount includes $13,900 for financial advisory services,
$14,280 for club membership dues and $22,199 for automobile benefits in 2001
and $23,000 in 2000 for financial advisory services.

(2) The number and value of restricted stock holdings at December 31, 2001 for
each of Messrs. Dutta, Hacker and Studdert is 25,000 shares and $337,500,
respectively. These grants vest 100% five years from the date of grant.
Dividends are paid on these restricted shares to the extent paid on our
common stock.

(3) Represents a payment under the UAL Loyalty Services (ULS) long-term
incentive plan equal to Mr. Hacker's vested interest in net value created of
ULS' asset portfolio upon a liquidating event involving a sale of a
portfolio asset as described in the Executive Compensation report. Mr.
Hacker's 2001 stock option grant was reduced by 50% to reflect his
participation in the ULS LTIP.

(4) Amounts include value of shares of ESOP preferred stock allocated to the
officer's account for 2000 and 1999 (as applicable) as follows, based upon
the applicable year-end closing price of common stock multiplied by the
number of shares of common stock issuable upon conversion of ESOP preferred
stock: Mr. Goodwin, $46,650, $138,527; Mr. Dutta, $24,922, $86,948; Mr.
Hacker, $22,313, $94,549; and Mr. Studdert, $18,730, $75,468. Balance for
2000 and 1999 and amount for 2001 (other than for Mr. Goodwin) represents
compensation for split dollar insurance program premiums. For Mr. Goodwin,
amount in 2001 represents $107,125 in split dollar life insurance premiums,
$5.4 million as severance (based on three times his annual salary and bonus)
under his employment agreement and $204,234 in accrued but unused vacation.

OPTION GRANTS IN 2001

This table gives information about stock options we granted during 2001 to
the officers named in the Summary Compensation Table. The hypothetical present
values of stock options granted in 2001 are calculated under a modified
Black-Scholes model, a mathematical formula used to value options. The actual
amount realized upon exercise of stock options will depend upon the amount by
which the market price of common stock on the date of exercise is greater than
the exercise price. The officers will not be able to realize a gain from the
stock options granted unless, during the exercise period, the market price of
common stock is above the exercise price of the options.

NUMBER OF % OF TOTAL
SECURITIES OPTIONS EXERCISE HYPOTHETICAL
UNDERLYING GRANTED TO OR BASE PRESENT VALUE AT
OPTIONS EMPLOYEES IN PRICE EXPIRATION DATE OF GRANT
NAME GRANTED(#)(1) FISCAL YEAR ($/SH) DATE $(2)
---- ------------- ------------ -------- ---------- ----------------

John W. Creighton, Jr. 400,000 12.6 14.48 10/28/11 800,000
James E. Goodwin 309,600 9.7 37.47 2/20/11 3,962,880
Rono J. Dutta 145,700 4.6 37.47 2/20/11 1,864,960
Douglas A. Hacker 60,700 1.9 37.47 2/20/11 776,960
Andrew P. Studdert 121,400 3.8 37.47 2/20/11 1,553,920
Frederic F. Brace 52,300 1.6 37.47 2/20/11 669,448

------------------------------
(1) All options become exercisable in four equal annual installments commencing
February 21, 2002, one year from the date of grant, except Mr. Creighton's
options which are exercisable in six equal monthly installments commencing
November 28, 2001. The options are transferable, at the officer's election,
to certain family members.

(2) To realize hypothetical present values upon the exercise of the options, the
market price would have to increase to $50.27 for the February 21, 2001
grants and $16.48 for the October 28, 2001 grant. The modified Black-Scholes
model used to calculate the hypothetical values at date of grant considers a
number of factors to estimate the option's present value, including the
stock's historic volatility calculated using the monthly closing price of
common stock over a 79 month period ending February 2001 (or, for the
October 28, 2001 grant, over an 87 month period ending October 2001), the
estimated average holding period of the option, interest rates and the
stock's expected dividend yield. The assumptions used in the valuation of
the February 21, 2001 options were: stock price volatility -- .36, holding
period -- 4 years, interest rate -- 6.4%, and dividend yield -- 2.4%. The
assumptions used in the valuation of the October 28, 2001 options were:
stock price volatility -- .46, holding period -- 6 months, interest
rate -- 4.5%, and dividend yield -- 0%.

There is no assurance that the hypothetical present values of stock options
presented in the table above represent the actual values of the options, and the
hypothetical values shown should not be viewed as our predictions of the future
value of common stock.

AGGREGATED 2001 FY-END OPTION VALUES*

NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
OPTIONS AT FY-END (#) AT FY-END ($)
NAME EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
---- ------------------------- -------------------------

John W. Creighton 133,334/266,666 0/0
James E. Goodwin 338,225/582,825 0/0
Rono Dutta 142,262/244,888 0/0
Douglas A. Hacker 244,062/150,138 0/0
Andrew P. Studdert 115,212/199,088 0/0
Frederic F. Brace 137,275/229,900 0/0

------------------------------
* Options granted prior to July 12, 1994 are exercisable for two shares of
common stock and $84.81. The value of those options includes the cash amount
delivered when exercised.

LONG-TERM INCENTIVE PLANS--AWARDS IN 2001

The following table and accompanying footnotes provide information
regarding an award to Mr. Hacker in 2001 under the UAL Loyalty Services
long-term incentive plan. This plan was adopted by ULS to reward all of its
employees for its share of the incremental net increase in value of its asset
portfolio.

NUMBER OF SHARES, PERFORMANCE OR ESTIMATED FUTURE
UNITS OR OTHER OTHER PERIOD UNTIL PAYMENTS UNDER NON-STOCK
NAME RIGHTS (#) MATURATION OR PAYOUT PRICE-BASED PLANS
---- ----------------- -------------------- ------------------------

Douglas A. Hacker .75%(1) July 1, 2004(2) N/A(3)

------------------------------
(1) On July 1, 2001, Mr. Hacker received an additional award of a .75% interest
under the LTIP. This award, together with a 1% award granted on July 1,
2000, entitle him to cash payment of 1.75% of the net value created of ULS'
asset portfolio during the relevant performance period, subject to vesting
as described below.

(2) Mr. Hacker's 1% interest in the LTIP awarded on July 1, 2000 vests in 25%
annual increments over the four years from July 1, 2000, the date the LTIP
was established. The additional .75% interest awarded on July 1, 2001 vests
in 33.33% increments over three years from July 1, 2001. Vesting is
contingent upon his continued employment by the company. Payouts under the
LTIP will occur (a) on July 1, 2004, at the end of the relevant performance
period or (b) earlier in the event of a public offering relating to the ULS
business or other liquidating event involving the sale of a portfolio asset,
subject, however, to the vesting schedule described above.

(3) Because the value of the award is linked to the total net value created of
ULS' asset portfolio, including reductions for losses in value, estimated
future payments cannot be determined.

PENSION PLAN TABLE

YEARS OF PARTICIPATION
FINAL ------------------------------------------------------------------------------------
AVERAGE PAY 15 20 25 30 35 40
----------- -------- -------- -------- ---------- ---------- ----------

$ 200,000 $ 48,000 $ 64,000 $ 80,000 $ 96,000 $ 112,000 $ 128,000
400,000 96,000 128,000 160,000 192,000 224,000 256,000
600,000 144,000 192,000 240,000 288,000 336,000 384,000
800,000 192,000 256,000 320,000 384,000 448,000 512,000
1,000,000 240,000 320,000 400,000 480,000 560,000 640,000
1,200,000 288,000 384,000 480,000 576,000 672,000 768,000
1,400,000 336,000 448,000 560,000 672,000 784,000 896,000
1,600,000 384,000 512,000 640,000 768,000 896,000 1,024,000
1,800,000 432,000 576,000 720,000 864,000 1,008,000 1,152,000
2,000,000 480,000 640,000 800,000 960,000 1,120,000 1,280,000
2,000,000 480,000 640,000 800,000 960,000 1,120,000 1,280,000
2,200,000 528,000 704,000 880,000 1,056,000 1,232,000 1,408,000

This table is based on retirement at age 65 and selection of a straight
life annuity (other annuity options are available, which would reduce the
amounts shown). The amount of the normal retirement benefit under the plan is
the product of 1.6% times years of credited participation in the plan times
final average pay (highest five of last 10 years of covered compensation). The
retirement benefit amount is not offset by the participant's social security
benefit. Compensation used in calculating benefits under the plan includes base
salary and amounts shown as bonus in the Summary Compensation Table. Under the
qualified plan, years of participation for persons named in the compensation
table are as follows: Mr. Goodwin -- 34 years; Mr. Brace -- 13 years; Mr.
Dutta -- 16 years; Mr. Hacker -- 8 years; and Mr. Studdert -- 6 years. The
amounts shown do not reflect limitations imposed by the Internal Revenue Code on
retirement benefits that may be paid under plans qualified under the code.
United has agreed to provide under non-qualified plans the portion of the
retirement benefits earned under the pension plan that would otherwise be
subject to code limitations.

If Mr. Hacker is employed until age 50 he will be credited with additional
years of participation so that his total years of participation will equal 25.4
years. In addition, if he is employed during the period between the date he
attains age 50 and the date he attains age 55, he will be credited with an
additional month of participation for each month of participation credited to
him.

EMPLOYMENT CONTRACTS AND ARRANGEMENTS

GOODWIN'S RESIGNATION ARRANGEMENT

In connection with Mr. Goodwin's resignation in 2001, we amended his
employment agreement to provide him with office space and secretarial support
for five years so that he may assist us as needed with issues originating when
he was CEO. In addition, he received a severance payment under his employment
agreement equal to three times his salary and bonus.

His options will continue to vest under the normal vesting schedules in the
option agreements and his remaining restricted stock awards immediately vested
on the end of his employment with us.
30

CREIGHTON'S BENEFIT ARRANGEMENT

Mr. Creighton was elected Chairman and CEO of the company effective October
28, 2001. He receives no salary and bonus for his position. Mr. Creighton
received a stock option grant of 400,000 shares of common stock which vests
ratably in six monthly installments beginning one month from his date of hire.

In addition, for a period not to exceed one year from the employment date,
he is entitled to temporary living expenses while working at the company's
headquarters in Chicago including the cost of a temporary residence (not to
exceed $3,000 per month) and a per diem allowance. The company also provides Mr.
Creighton with office space located in the vicinity of his personal residence in
Seattle to be used primarily for company business while he is staying at his
personal residence. The reimbursement for this office space is limited to $3,000
per month.

INDEPENDENT PUBLIC ACCOUNTANTS

As of the date of this proxy statement, an independent auditor has not been
selected for 2002 as the Audit Committee and the Board continue to closely
monitor recent public disclosures and evaluate any developments regarding Arthur
Andersen LLP.

Arthur Andersen LLP, independent public accountants, audited our financial
statements for 2001 and has audited our accounts since it was originally
retained in 1935. It is anticipated that a representative of Arthur Andersen LLP
will be present at the meeting and will have the opportunity to make a
statement, if he or she desires to do so, and will be available to respond to
appropriate questions at that time.

INDEPENDENT ACCOUNTANT FEES

The aggregate fees billed for professional services (including
out-of-pocket expenses) rendered by Arthur Andersen in 2001 are as follows:

SERVICE FEE
------- ----------

Audit Fees.................................................... $ 960,000
Financial Information Systems Design and Implementation
Fees........................................................ 0
All Other Fees................................................ $2,283,254
Audit Related................................. $ 501,542
Non-audit Related............................. $1,781,712*

------------------------------
* Of this amount, $1,622,571 (91%) was related to tax services and transactional
due diligence work.

Our Audit Committee has considered whether the 2001 non-audit services
provided by Arthur Andersen are compatible with maintaining auditor
independence.

PROPOSALS 2-7
STOCKHOLDER PROPOSALS

PROPOSAL NO. 2 CONCERNING CUMULATIVE VOTING

Ms. Evelyn Y. Davis, 2600 Virginia Avenue, N.W. Suite 215, Washington D.C.
20037, owner of 300 shares, has given notice that she will introduce the
following resolution at the annual meeting:

"RESOLVED: "That the stockholders of UAL Corporation, assembled in
Annual Meeting in person and by proxy, hereby request the Board of
Directors to take the necessary steps to provide for cumulative voting
in the election of directors, which means each stockholder shall be
entitled to as many votes as shall equal the number of shares he or she
owns multiplied by the number of directors to be elected, and he or she
may cast all of such votes for a single candidate, or any two or more of
them as he or she may see fit."

REASONS: "Many states have mandatory cumulative voting, so do National
Banks."

"In addition, many corporations have adopted cumulative voting."

"If you AGREE, please mark your proxy FOR this resolution."

THE BOARD OF DIRECTORS OPPOSES THE ABOVE PROPOSAL.

The Board of Directors is opposed to this proposal because it does not
believe cumulative voting is in the best interests of UAL and its stockholders.
The current structure for determining membership on the Board of Directors was
the result of the negotiation of the 1994 recapitalization transaction with the
company's unions, which was approved by the Company's stockholders. The current
system for electing UAL's public directors (i.e., one share of common stock to
have one vote for each nominee) is similar to most public companies and results
in a more effective Board in which each of the public directors represents the
stockholders as a whole.

Cumulative voting is undesirable because, among other things, it introduces
the opportunity for an individual holder or group of holders of UAL common stock
to weight their vote and influence the public director election process in a
manner that may be divisive and contrary to the wishes of a majority of the
publicly-held shares. Cumulative voting could result in the election of a board
member who represents the special interest of a small group of stockholders
rather than all of UAL's stockholders. The Board believes that each public
director should serve on the Board only if he or she has been endorsed by the
holders of the publicly-held shares as a whole. UAL stockholders have rejected
an essentially identical proposal in the past and should continue to do so.

THE BOARD UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE AGAINST THIS
PROPOSAL.

PROPOSAL NO. 3 CONCERNING POISON PILLS

Mr. John Chevedden, 2215 Nelson Avenue, No. 205, Redondo Beach, CA
90278-2453, owner of 75 shares, has given notice that he will introduce the
following resolution at the annual meeting:

"3 -- FOR SHAREHOLDER VOTE ON POISON PILLS

Shareholders request that the board seek shareholder approval prior to adopting
any pill and also redeem or terminate any pill now in effect unless it has been
approved by a shareholder vote at the next shareholder meeting.

Negative Impact of Poison Pills on Shareholder Value
A study by the Securities and Exchange Commission found evidence that the
negative effect of poison pills to deter profitable takeover bids outweigh
benefits.

Source: Office of the Chief Economist, Securities and Exchange
Commission, The Effect of Poison Pills on the Wealth of Target
Shareholders, October 23, 1986.

Additional Support for this Proposal Topic
- Pills adversely affect shareholder value.
Power and Accountability
Nell Minow and Robert Monks
Source: www.thecorporatelibrary.com/power from
www.thecorporatelibrary.com

- The Council of Institutional Investors
(www.cii.org/ciicentral/policies.htm & www.cii.org)
recommends shareholder approval of all poison pills.

Institutional Investor Support for Shareholder Vote
Many institutional investors believe poison pills should be voted on by
shareholders. This includes the Council of Institutional Investors which
represents 200 institutional investors, the Teachers Insurance and Annuity
Association College Retirement Equities Fund (TIAA-CREF) and the California
Public Employees Retirement System (CalPERS). A poison pill can insulate
management at the expense of shareholders I believe. A poison pill is such a
powerful tool that shareholders should be able to vote on whether it is
appropriate. I believe a shareholder vote on poison pills will avoid an
unbalanced concentration of power in the directors who could focus on narrow
interests at the expense of the vast majority of shareholders.

Institutional Investor Support is High-Caliber Support
Clearly this proposal topic has significant institutional support. This topic
won an average 60% APPROVAL from shareholders at major companies in 1999.
Source: Investor Responsibility Research Center, 2000 Annual Meeting Report on
Delphi Automotive Systems, April 2000.

Institutional investor support is high-caliber support. Institutional
investors have the advantage of a specialized staff and resources, long-term
focus, fiduciary duty and independent perspective to thoroughly study the issues
involved in this proposal topic.

This topic won 68% approval at the Burlington Northern Santa Fe
(BNI) 2001 shareholder meeting.
This proposal topic won 68% of the yes-no vote at the Burlington Northern Santa
Fe (BNI) 2001 annual meeting. The text of the BNI proposal, which has further
information on the disadvantages of poison pills, is available at The Corporate
Library website: www.thecorporatelibrary.com
At this URL page:
http://asp.thecorporatelibrary.net/proposals/FullText.asp?Company_ID=10563&
Resolution_ID=515&Proxy_Season=2001

Shareholder Vote Precedent Set by Other Companies
In recent years, various companies have been willing to redeem poison pills or
at least allow shareholders to have a meaningful vote on whether a poison pill
should remain in force. We believe that our company should do so as well.

In the interest of shareholder value vote yes:

FOR SHAREHOLDER VOTE ON POISON PILLS
YES ON 3."

THE BOARD OF DIRECTORS OPPOSES THE ABOVE PROPOSAL.

The Board is opposed to this proposal because it would prevent the Board
from acting quickly to adopt a poison pill. UAL currently does not have a
shareholder rights plan, commonly known as a poison pill, in place. The purpose
of a shareholder rights plan is to the protect a corporation from an acquisition
that may not be in the best interest of the corporation by forcing potential
acquirers to negotiate with the company's board of directors and management,
which in turn allows a board of directors to better represent the interests of
its stockholders. If the Board in the future determines that UAL should adopt a
shareholder rights plan, the Board does not believe requiring shareholder
approval is necessary to protect the interests of UAL's stockholders because
Delaware law already imposes fiduciary duties on the Board, which would require
the Board to consider any legitimate proposal for the acquisition of UAL
regardless of whether there is a shareholder rights plan in place. Delaware law,
under which UAL is incorporated, does not require a stockholder vote in order to
adopt a shareholder rights plan, and the Board believes that requiring a
stockholder vote before adopting a rights plan would in practice deprive the
Board of the ability to act quickly to maximize stockholder value in a hostile
takeover attempt.

Before adopting a shareholder rights plan in the future the Board will, of
course, make a determination that such a plan is in the best interests of UAL
and its stockholders. If the Board determines that a shareholder rights plan is
necessary to protect UAL and its stockholders, it should be able to act quickly
in adopting a poison pill.

THE BOARD UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE AGAINST THIS
PROPOSAL.

PROPOSAL NO. 4 CONCERNING EXECUTIVE COMPENSATION

Mr. Bill Carman, 1016 W. Baltimore Pike, Media, PA 19063, owner of 150
shares, has given notice that he will introduce the following resolution at the
annual meeting:

"UAL CORPORATION SHAREHOLDER PROPOSAL
LINKING EXECUTIVE COMPENSATION
TO REBUILDING THE COMPANY

"RESOLVED, that the stockholders of UAL Corporation (the "Company") request
that the Board of Directors, in establishing and administering standards
for use in awarding performance-based executive compensation, incorporate
measures related to the rebuilding of the Company's core air transportation
business after the industry-wide, shattering events of the September 11,
2001 terrorists attacks. The re-growth measures should include the
recalling of employees laid off as a result of the September 11th attacks,
recouping available seat mile capacity, recovering the number of
departures, keeping operations in-house instead of subcontracting work
previously done by the Company's employees and completing mainline capital
expenditures planned prior to September 11th. These rebuilding measures
shall be in addition to the current measures used to evaluate the Company's
performance."

Supporting Statement

In the wake of the September 11th terrorist hijackings, the nation's
air-travel system suffered a severe blow, threatening the existence of many
air carriers. With the two-day shutdown of U.S. airspace, the immediate
fall in demand of air travel, and new security measures mandated by the
government, there have been and continue to be enormous costs to U.S.
airlines which already existed on narrow profit margins.

In the immediate aftermath of the attacks, United Airlines announced plans
to layoff 20,000 of its 98,000 workers and to reduce its flight schedule to
69 percent of departures operated before September 11th, lowering seat
capacity by 26 percent.

I believe that UAL's ability to re-grow its core air carrier business is
critical to its long-term success. Rather than seeking new and riskier
ventures, UAL must focus on the goal of effectively running and
strengthening its traditional air transportation business. Executives'
compensation should be based, in part, on the Company's progress toward
attaining that goal. To that end, I request that the Board of Directors
formulate business re-growth performance criteria to be used in determining
compensation for its executive officers and in bonus, stock option and
long-term incentive plans in which those executives participate. These
measures should constitute a significant component in determining the
overall amount of performance-based compensation.

Further, the "rebuilding of the Company" component of measuring performance
should include both affirmative and negative components. On the affirmative
side, an improvement in the measures related to the re-growth of the
Company should result, all other factors remaining the same, in a higher
overall performance rating for the executive and thus a larger amount of
performance-based compensation. On the negative side, an executive's
performance rating would decline if re-growth of the Company is not
achieved.

Once the Company has returned to its pre-September 11th level in relation
to these measures, these factors should continue to be used in determining
executive

performance-based compensation to evaluate the Company's performance in
strengthening the Company's core air transportation business."

THE BOARD OF DIRECTORS OPPOSES THE ABOVE PROPOSAL.

The tragic events of September 11th have had a profound affect on UAL. We
continue to grieve the senseless loss of life of our employees and customers and
we have been and will continue to take all steps in our power to protect the
safety of our employees and customers. Of course, these events have adversely
affected the economics of the entire airline industry including UAL and we have
responded by dramatically reducing our costs. This has led to very painful
reductions in our workforce as well as inconvenience to our customers.

It is our strongest priority to return our airline to financial stability.
This goal provides the best opportunity to rebuild the airline and recall
furloughed employees when it is financially prudent to do so. However, the Board
does not believe that the factors suggested by the resolution are in all cases
appropriate measures for executive compensation. The decision as to which
measures should be adopted in determining executive performance-based
compensation is a complex one and is the responsibility of the Compensation
Committee of the Board, two members of which are designees of our principal
labor unions. The Board would expect that some of the measures of performance-
based executive compensation might reflect successful rebuilding of the airline,
such as increased revenues and yields. However the measures suggested by the
resolution in the opinion of the Board unduly tie the concept of rebuilding our
airline to the incurring of costs, which does not necessarily indicate
successful rebuilding of UAL's core business, and unduly restrain the discretion
of the Compensation Committee of the Board.

THE BOARD UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE AGAINST THIS
PROPOSAL.

PROPOSAL NO. 5 CONCERNING THE CEO AND CHAIRMAN POSITIONS

Mr. Douglas Walsh, 32 Morris Avenue West, Malverne, NY 11565, owner of 202
shares, has given notice that he will introduce the following resolution at the
annual meeting:

"UAL CORPORATION SHAREHOLDER PROPOSAL
SEPARATE THE CEO AND CHAIRMAN POSITIONS

"RESOLVED, that the shareholders of UAL Corporation (the "Company") urge
the Board of Directors to amend the bylaws to require that an independent
director who has not served as chief executive officer ("CEO") of the
Company shall serve as chairman of the Board of Directors."

Supporting Statement

The primary purpose of the Board of Directors is to protect shareholders'
interests by providing independent oversight of management, including the
CEO. We believe that such oversight is important in light of the
performance of UAL's stock under its former Chairman and CEO, James E.
Goodwin. For example, during a 13-month period following the announcement
of a proposed merger with US Airways, UAL

stock dropped by 34 percent, while the AMEX Airline Index fell only 12
percent during the same time period.

In our view, a separation of the roles of Chairman and CEO will promote
greater management accountability to shareholders at UAL. Corporate
governance experts have questioned how one person serving as both Chairman
and CEO can effectively monitor and evaluate his or her own performance.
The National Association of Corporate Directors' Blue Ribbon Commission on
Director Professionalism has recommended that an independent director
should be charged with "organizing the board's evaluation of the CEO and
providing continuous ongoing feedback; chairing executive sessions of the
board; setting the agenda with the CEO, and leading the board in
anticipating and responding to crises."

We believe that separating the positions of Chairman and CEO will enhance
independent Board leadership at UAL. Institutional Shareholders Services, a
leading proxy voting and corporate governance advisory firm, asserts in
their Proxy Voting Manual that an annual survey of institutional investors
for Russell Reynolds Associates found that "slightly more than half of
institutional investors prefer separation of the roles of CEO and
Chairman." Also, CalPERS' Corporate Governance Core Principles and
Guidelines state that "the independence of a majority of the Board is not
enough" and that "the leadership of the board must embrace independence,
and it must ultimately change the way in which directors interact with
management."

The Board continues to face challenges in its oversight of UAL management.
We strongly believe that an independent chairman will strengthen the
Board's integrity.

For these reasons, we urge you to vote FOR this resolution."

THE BOARD OF DIRECTORS OPPOSES THE ABOVE PROPOSAL.

The Board of Directors does not believe that this proposal is in the best
interest of the UAL stockholders. UAL's Bylaws currently require that the Chief
Executive Officer be the Chairman of the Board. The Board believes that it is
desirable to have the flexibility to decide on a case by case basis whether a
CEO, or some other director, should be the Chairman of the Board. Amending the
Bylaws as proposed would deprive the Board of the freedom to select a Chairman
who at the time is the most qualified individual to lead the Board. The Board
believes that at the present time it is in the best interest of the Company to
be led by an executive who is both Chairman of the Board and the CEO but intends
to reconsider this from time to time in the future and would consider amending
UAL's Bylaws should the Board determine that separate individuals should serve
as Chairman and CEO.

THE BOARD UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE AGAINST THIS
PROPOSAL.

PROPOSAL NO. 6 CONCERNING CERTAIN BUSINESS COMBINATIONS

Mr. Bob Hrabe, P.O. Box 359, San Miguel, California 93451, a United
Airlines pilot and owner of 2,986 shares of common stock, has given notice that
he will introduce the following resolution at the annual meeting:

"PROPOSAL:

Submit a request to the UAL Board of Directors to take the steps necessary
to amend the UAL Restated Certificate of Incorporation to provide that
airline acquisitions, which have been approved by a Board of Directors
vote, also be approved by a stockholder vote. It is requested that the UAL
Board of Directors consider approving the amendment in accordance with the
most expedient method available.

Supporting Statement

UAL was recapitalized in 1994 through an ESOP plan in which the employees
bought 55% of the company shares and paid for them over a 6 year period. In
late 1994, UAL distributed the "ESOP Owner's Guide" to the participating
employees. This guide was intended to explain how the ESOP worked and to
answer employee questions. Page 15 of the guide is entitled "What are your
voting rights?". It is stated "Since United employees own 55% of the
company, together you and your coworkers hold the primary voting voice on
matters that affect our company's future. For example, any significant
changes to United's business direction -- such as a merger or
acquisition -- would require a vote by all United shareholders -- both
employee owners and the public." However, the UAL Restated Certificate of
Incorporation presently provides for either a Board of Directors vote or a
stockholder vote to approve airline acquisitions. In addition, while the
Delaware Corporation Laws (Delaware is the state where UAL is incorporated)
generally provide for a stockholder vote on acquisitions and mergers, a
stockholder vote is not necessary for transactions which meet certain
requirements, like an all cash buyout where no shares are issued as a
result of the transaction. In other words, the information presented to the
employees indicates a shareholder vote on acquisitions but the legally
binding documents do not in fact require it. The lack of a UAL stockholder
vote to affirm the proposed USAirways acquisition was a recent example of
this.

It is important for UAL management and the Board of Directors to have the
flexibility to make strategic business decisions on their own. However, if
an ESOP company is to be successful, I believe it is also important that
employee owners and the common stockholders have a direct shareholder
voting voice of approval on the major acquisitions which will have a
dramatic affect on our company's future."

THE BOARD OF DIRECTORS OPPOSES THE ABOVE PROPOSAL.

Under the leadership of our new Chairman, the Board recognizes the
opportunity for success if all of our employee groups are pulling in the same
direction. Effective communication is key to the success of this effort and the
Board has become increasingly aware of the need to improve communication between
UAL's employees and its management. In the past, proposed acquisitions have
caused concern among certain of our employee groups respecting the effect that
acquisitions would have on them. The Board of Directors believes that, in the
interests of all of our stockholders and our customers, our company needs to
take greater efforts to inform our employee owners and other employee groups
about acquisitions and other important strategic choices facing our company and
that

increased efforts to build consensus and support among our employee
shareholders, public shareholders and other employee groups for our strategic
directions should be undertaken.

The Board of Directors, however, is opposed to this proposal because it is
contrary to the best interests of UAL and its stockholders, and, in particular,
because it would limit UAL's ability to pursue strategic objectives in important
respects when UAL's competitors are not so limited.

The airline industry has been in great flux over the last decade and in
particular over the last year. It is very important that UAL have the same
flexibility as its competitors in pursuing its business objectives, particularly
in these turbulent times. The laws of Delaware (where UAL is incorporated) and
other states are very explicit about when acquisitions and mergers do and do not
require stockholder approval. Most acquisitions for cash, whether by UAL or any
of our competitors, do not require stockholder approval. Changing this state of
affairs for UAL but not for anyone else would limit UAL's flexibility to deal
with fast changing industry conditions and would put UAL in a competitively
disadvantageous position. The proposal should be rejected because it is contrary
to the best interests of our company and its stockholders.

THE BOARD UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE AGAINST THIS
PROPOSAL.

PROPOSAL NO. 7 CONCERNING ELECTION OF ESOP DIRECTORS

Mr. David Frizzell, P.O. Box 360420, Milpitas, CA 95036, is a United
Airlines mechanic and owner of 325 shares of Class M ESOP Voting Junior
Preferred Stock, has given notice that he will introduce the following
resolution at the annual meeting:

"PROPOSAL:

It is recommended that the Board of Directors amend and restate the UAL
charter to provide that all individual owners of Class P, M, and S ESOP
Voting Junior Preferred Stock acquire the equitable right to nominate and
elect their respective representative Director by majority vote.

SUPPORTIVE STATEMENT:

Currently the owners of Class P, M, and S ESOP Voting Junior Preferred
Stock, (current, and former Pilots, Mechanics, and Salaried/Management
employees) are restricted from nominating and electing their own Board
Representative. Despite owning millions of UAL Corp. shares, this right is
given to 4 beneficial owners who together own just 5 shares. Since the
inception of the ESOP Junior Preferred Stockholders have gone without this
crucial right afforded to virtually every stockholder of corporate shares
in America. All stakeholders must have this basic right which supports the
very foundation of democratic corporate governance. In short, "every
shareholder should have the right to nominate and elect the Board Director
of their choice." Now is the time to value and hear the voices of all
shareholders."

THE BOARD OF DIRECTORS OPPOSES THE ABOVE PROPOSAL.

The Board of Directors does not believe that the proposal is within the
power of the Board or the stockholders to accomplish. The proposal requires an
amendment to the UAL Charter which cannot be adopted without the support of the
ALPA, the IAM and the Salaried and Management director. Under the ESOP the
voting rights of the Class P, M and S ESOP Voting Junior Preferred Stock are
generally passed through to the participants

in the ESOP; however, under UAL's Charter these classes are not entitled to vote
for directors. The right to vote for employee directors attaches to other
classes of stock that are held by ALPA, the IAM and the Senior Vice
President -- People and SAM director.

The current structure for determining membership on the Board of Directors
was the result of the negotiation of the 1994 recapitalization transaction with
the Company's unions, which was approved by the Company's stockholders. The
Board of Directors believes that the proposal is not significant to the
interests of the UAL common stockholders who are being asked to vote on this
matter.

THE BOARD UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE AGAINST THIS
PROPOSAL.

SUBMISSION OF STOCKHOLDER PROPOSALS

If a stockholder of record wishes to submit a proposal for inclusion in
next year's proxy statement, the proposal must be received by us no later than
November 27, 2002 and otherwise comply with SEC rules. Failure to otherwise
comply with SEC rules will cause your proposal to be excluded from the proxy
materials. All notices must be submitted to Francesca M. Maher, Secretary, UAL
Corporation, P.O. Box 66919, Chicago, Illinois 60666.

To propose business or nominate a Public Director at the 2003 annual
meeting, proper notice must be submitted by a stockholder of record no later
than January 17, 2002 in accordance with our by-laws. The notice must contain
the information required by the by-laws. No business proposed by a stockholder
can be transacted at the annual meeting, and no nomination by a stockholder will
be considered, unless the notice satisfies the requirements of the by-laws. If
we do not receive notice of any other matter that you wish to raise at the
annual meeting in 2003 on or before January 17, 2002, our by-laws provide that
the matter shall not be transacted and the nomination shall not be considered.

The Outside Public Director Nomination committee considers Public Director
nominees you recommend if submitted in writing to the Committee Chairman at UAL
Corporation, P.O. Box 66919, Chicago, IL 60666. Qualification requirements are
specified in our charter.

ANNUAL REPORT

A copy of our summary Annual Report for the year ended December 31, 2001,
has been mailed to you on or about March 27, 2002 with this proxy statement.

Additional copies of the summary Annual Report and this notice of annual
meeting and proxy statement, and accompanying proxy may be obtained from
Georgeson Shareholder, 17 State Street, New York, New York 10004 or from our
Secretary, UAL Corporation, 1200 East Algonquin Road, Elk Grove Township, IL
60007.

A COPY OF OUR FORM 10-K TO THE SEC MAY BE OBTAINED WITHOUT CHARGE BY
WRITING TO FRANCESCA M. MAHER, SECRETARY, UAL CORPORATION, P.O. BOX 66919,
CHICAGO, ILLINOIS 60666. YOU CAN ALSO OBTAIN A COPY OF OUR FORM 10-K AND OTHER
PERIODIC FILINGS FROM THE SEC'S EDGAR DATABASE AT WWW.SEC.GOV.

[UAL LOGO] [COMPUTERSHARE LOGO]

Computershare Investor Services
2 North LaSalle Street
Chicago IL 60602
www.computershare.com

MR A SAMPLE CONTROL NUMBER
DESIGNATION (IF ANY)
ADD 1 000000 0000000000 0 0000
ADD 2
ADD 3
ADD 4 000000000.000 ext
ADD 5 000000000.000 ext
ADD 6 000000000.000 ext
000000000.000 ext
000000000.000 ext
000000000.000 ext
000000000.000 ext
[ ] Mark this box with an X if you have made changes to your
name or address details above.
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ANNUAL MEETING PROXY CARD
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THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF UAL CORPORATION

The undersigned, having received the Notice of Annual Meeting and Proxy Statement, hereby appoints John W. Creighton, Jr., James J.
O'Connor and Paul E. Tierney, Jr. and each of them, as proxies with full power of substitution, for and in the name of the
undersigned, to vote all shares of Common Stock of UAL Corporation owned of record by the undersigned on the matters listed in this
proxy and, in their discretion, on such other matters as may properly come before the Annual Meeting of Stockholders to be held at
the University of Chicago Gleacher Center, 450 N. Cityfront Plaza Drive, Chicago, IL 60611 on May 16, 2002 at 8:00 a.m. and any
adjournments or postponements thereof, unless otherwise specified herein.

This card, the telephonic or Internet voting procedures, when properly completed, also constitutes voting instructions to the
respective Trustees of the Employees' Stock Purchase Plan, 401(k) Plans and International Employee Stock Ownership Plans of UAL
Corporation or United Air Lines, Inc. to vote, in person or by proxy, all shares of Common Stock of UAL Corporation allocated to the
accounts of the undersigned held by the Trustees.

You are encouraged to specify your choices by marking the appropriate box SEE REVERSE SIDE, but you need not mark any boxes if you
wish to vote in accordance with the Board of Directors' recommendations. The proxies cannot vote your shares unless you vote by
phone, Internet or sign and return this card.

This Proxy when properly executed will be voted in the manner directed. If no direction is made, this proxy will be voted FOR
proposal 1 and AGAINST proposals 2 through 7. If this card constitutes voting instructions to a plan trustee, the trustee will vote
as described in the plan documents and any accompanying materials. In their discretion, the proxies are authorized to vote upon
other business as may properly come before the Annual Meeting.

SEE REVERSE SIDE
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YOU CAN VOTE BY TELEPHONE OR INTERNET!
AVAILABLE 24 HOURS A DAY - 7 DAYS A WEEK!

Instead of mailing your proxy, you may choose one of the two voting methods outlined below to vote your proxy. Have this proxy card
in hand when you vote.

TO VOTE BY PHONE (within U.S. and Canada) TO VOTE ON THE INTERNET

- Call toll free 1-888-457-2964 from a touch tone telephone. There is - Go to the following web site:
NO CHARGE for this call. www.computershare.com/us/proxy

- Enter the six-digit Control Number located in the upper right corner. - Enter the information requested on your computer screen,
including your six-digit Control Number located in the
upper right corner, then follow the voting
instructions on the screen.
Option 1: If you choose to vote as the Board of Directors
recommends on ALL proposals, press 1. When asked,
please confirm your vote by pressing 1 again.

Option 2: If you choose to vote EACH proposal SEPARATELY,
press 0 and follow the recorded instructions.
Your vote selections will be repeated and you
will have an opportunity to confirm them.

IF YOU VOTE BY TELEPHONE OR THE INTERNET, DO NOT RETURN THIS PROXY CARD BY MAIL.
PROXIES SUBMITTED BY TELEPHONE OR THE INTERNET MUST BE RECEIVED BY 12:00 MIDNIGHT, CENTRAL DAYLIGHT TIME, ON MAY 15, 2002.
THANK YOU FOR VOTING

007JMH

001CD40002

Use a black pen. Print in
CAPITAL letters inside the grey [A B C] [1 2 3] [X]
areas as shown in this example.

HOLDER ACCOUNT NUMBER C 1234567890 J N T

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PROXY - UAL CORPORATION
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A MANAGEMENT PROPOSALS PLEASE REFER TO THE REVERSE SIDE FOR INTERNET AND TELEPHONE VOTING INSTRUCTIONS.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL 1.
1. Election of five Public Director nominees:

FOR WITHHOLD FOR WITHHOLD
01 - John W. Creighton, Jr. [ ] [ ] 04 - James J. O'Connor [ ] [ ]

02 - Rono J. Dutta [ ] [ ] 05 - Paul E. Tierney, Jr. [ ] [ ]

03 - W. James Farrell [ ] [ ]

B SHAREHOLDER PROPOSALS
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST PROPOSALS 2-7.

FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN

2. Proposal concerning cumulative voting. [ ] [ ] [ ] 5. Proposal concerning the CEO [ ] [ ] [ ]
and Chairman positions.

3. Proposal concerning poison pills. [ ] [ ] [ ] 6. Proposal concerning certain [ ] [ ] [ ]
business combinations.

4. Proposal concerning executive [ ] [ ] [ ] 7. Proposal concerning election [ ] [ ] [ ]
compensation. of ESOP directors.

C AUTHORIZED SIGNATURES - SIGN HERE - THIS SECTION MUST BE COMPLETED FOR YOUR INSTRUCTIONS TO BE EXECUTED.
Please sign exactly as your name appears on this proxy. For joint accounts, each owner should sign. When signing as attorney,
executor, administrator, trustee or guardian, please give your full title. You revoke all proxies heretofore given to vote at the
Annual Meeting or any adjournments or postponements.

Signature 1 Signature 2 Date / /
---------------------------------- ------------------------------------ ---------------------------------

A2941 1 U P X 007 JOH

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[UAL LOGO] MEETING OF STOCKHOLDERS
OF UAL CORPORATION
May 16, 2002
8:00 a.m.
Executive Dining Room, Sixth Floor
University of Chicago Gleacher Center
450 N. Cityfront Plaza Drive
Chicago, IL 60611

MR A SAMPLE
DESIGNATION (IF ANY)

ADD 1
ADD 2
ADD 3 HOLDER ACCOUNT NUMBER
ADD 4
ADD 5 C 1234567890 J N T
ADD 6

ADMISSION TICKET

You must present this ticket to the UAL representative at the entrance to the Executive Dining Room to be admitted to the Annual
Meeting.