IAM ESOP Trustees

DB Cooper

Aug 20, 2002
Seat 18C
District 141-M
November 7, 2002
By now, all of you should have been informed that the ESOP trustee is selling shares of UAL stock because of the threat of
bankruptcy. In addition, you should also know that a portion of the shares held in the UAL Stock Fund under the Company’s
401(k) Plan is also being sold. Many of you are angry, confused and frustrated by this situation. We want to let you know what
you can do to help educate State Street Bank & Trust Company and Aon Consulting about the future of United so that they
will reconsider selling UAL stock.
Background-ESOP. First and foremost, you should know that the two IAM representatives to the UAL ESOP Committee.
Doug Walsh (AGC of DL141M) and Ira Levy (AGC of DL 141) have spent many hours over many days to understand their
legal obligations to the ESOP parti****nts since August 14, 2002, the day that United announced it might have to make a
bankruptcy filing. They’ve listened to lawyers, financial advisors, bankruptcy experts, and read numerous reports. Doug, Ira
and the other four ESOP committee members were very concerned about the real possibility that the ESOP shares would be
totally worthless if there were a bankruptcy filing. Remember, this announcement was made during the bankruptcy filing of US
Airways, and the view of the investment analysts and other financial professionals was that it was more likely than not that
United would also file for bankruptcy. With those concerns, the six members of the ESOP committee obtained legal analyses,
did a lot of soul searching, and finally concluded, with great sadness, that they had to hire an independent investment manager,
State Street, to make the investment decision regarding the stock.
We want to express our respect and support for our representatives to the ESOP committee. Ira Levy and Doug Walsh had the
courage to make a difficult decision by hiring State Street as the manager. As Committee members, they expressed their
concerns about the sales program to State Street and continue to question what cir***stances would change State Street’s
decision to sell.
Background-401-(K) plan. At the same time as the employees on the ESOP Committee were considering whether to hire an
investment manager, United’s pension committee was going through a similar process for the 401(k) Plans and the Pilots
Directed Account Plan. All of those plans offer an investment in a UAL Stock fund. United hired Aon Consulting Company to
act as the independent investment manager for the UAL Stock Fund in these plans.
Why is UAL Stock being sold? As the Company reported late last month, State Street and Aon are selling shares in the ESOP,
the 401(k) Plans and the PDAP. We understand that both State Street and Aon have concluded that ERISA prohibits them
from continuing to invest in UAL because it is likely to file for bankruptcy absent some significant economic restructuring
(such as new labor agreements, other cost cutting measures, and a federal loan guarantee from the ATSB). As you all know, at
this time United does not have agreements with all of its labor organizations, and the ATSB has not decided on the loan
application. Therefore, State Street is not persuaded that the threat of bankruptcy has vanished.
What can you do? State Street and Aon are relying on public information about United, and the viewpoints of the analysts who
watch the airline industry in general and United in particular. State Street spoke with IAM representatives before deciding to
sell in late September, and maybe they need to hear from the employees of this airline to counter the viewpoints of the
professional analysts. Let State Street and Aon know how committed you are to saving the Company. That is the only message
that can possible make a difference. State Street won’t care that you say now that you want to hang on to your cheap stock
with the hope that you will see the value rise when United comes out of this low point. The investment manager will argue that
the threat of bankruptcy is the key to its decision to sell, and that it makes more economic sense to sell your shares at today’s
price rather than holding the shares until they are worth zero. State Street can stop selling (and must reinvest in UAL stock)
when the bankruptcy threat is gone.
State Street Corporation
Attention: UAL ESOP
225 Franklin Street
Boston, MA 02110
Main Telephone: 617-786-3000
Aon Consulting
Attention: 401(k) Plan
200 East Randolph
Chicago, IL. 60616
Main Telephone 312-381-1000
You can call or send letters expressing your concerns and your commitment to United’s ultimate success. Our recent efforts
with the ATSB generated over 40,000 letters. We should be no less successful in this effort as well.
In solidarity
Scotty Ford
President & Directing
General Chairman
IAMAW District 141-M
S.R.(Randy) Canale
President & Directing
General Chairman
IAMAW District 141