As filed with the Securities and Exchange Commission on October 24, 2000
Registration No. 333-_____
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
Under
The Securities Act of 1933
UNITED AIR LINES, INC.
(Exact name of Registrant as specified in its charter)
Delaware 36-2675206
(State of (I.R.S. Employer
incorporation) Identification No.)
1200 East Algonquin Road
Elk Grove Village, IL 60007
Mailing Address: P.O. Box 66100
Chicago, Illinois 60666
(847) 700-4000
(Address, including zip code, and telephone number, including area
code, of Registrant's principal executive offices)
Francesca M. Maher
Senior Vice President, General Counsel and Secretary
United Air Lines, Inc.
P.O. Box 66100
Chicago, Illinois 60666
(847) 700-4000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies to:
Elizabeth A. Raymond
Mayer, Brown & Platt
190 S. LaSalle Street
Chicago, Illinois 60603
(312) 782-0600
Approximate date of commencement of proposed sale to the public:
From time to time after the effective date of this registration statement
as determined in light of market conditions and other factors.
If the only securities being registered on this Form are being
offered under dividend or interest reinvestment plans, please check the
following box. [ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis under Rule 415 under the
Securities Act of 1933 (the "Securities Act"), other than securities
offered only in connection with dividend or interest reinvestment plans,
check the following box. [ X ]
If this Form is filed to register additional securities for an
offering under Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement number of
the earlier effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed under Rule
462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If delivery of the prospectus is expected to be made under Rule
434, please check the following box.[ ]
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<CAPTION>
CALCULATION OF REGISTRATION FEE
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Proposed Proposed
Maximum Maximum Amount of
Title of Each Class of Securities Amount to Be Offering Aggregate Registration
Being Registered Registered (1) Price Per Unit Offering Price(1) Fee
<S> <C> <C> <C> <C>
Debt Securities
Pass Through Certificates $1,000,000 100% $1,000,000 $278
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(1) Estimated solely for purposes of determining the registration fee.
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The Registrant hereby amends this Registration Statement on such
date or dates as may be necessary to delay its effective date until the
Registrant shall file a further amendment which specifically states that
this Registration Statement shall thereafter become effective in accordance
with Section 8(a) of the Securities Act or until the Registration Statement
shall become effective on such date as the Commission, acting under said
Section 8(a), may determine.
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THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE
MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT
AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY
THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
Subject to Completion, Dated October , 2000
PROSPECTUS
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United Air Lines, Inc.
1200 East Algonquin Road
Elk Grove Village, IL 60007
Mailing Address: P.O. Box 66100
Chicago, Illinois 60666
(847) 700-4000
[COMPANY LOGO]
DEBT SECURITIES
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United Air Lines, Inc., may offer up to $___________ of unsecured
debt securities in one or more series from time to time under this
prospectus and one or more prospectus supplements.
We will pay interest on the debt securities on the dates and at
the rates specified in a prospectus supplement. We will pay principal on
the debt securities in scheduled amounts and on the dates specified in a
prospectus supplement. Unless otherwise indicated in a prospectus
supplement, we will not list the debt securities on any national securities
exchange.
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United will provide specific terms of these securities in
supplements to this prospectus. You should read this prospectus and the
prospectus supplement carefully before you invest.
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Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these securities or
passed upon the adequacy or accuracy of this prospectus. Any representation
to the contrary is a criminal offense.
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The date of this Prospectus is October , 2000.
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ABOUT THIS PROSPECTUS
This registration statement contains two forms of prospectus to be
used in connection with offerings of debt securities or pass through
certificates. No prospectus will be used to consummate sales of securities
unless accompanied by a prospectus supplement that describes the securities
offered.
You should rely only on the information contained or incorporated
by reference in this prospectus or a prospectus supplement. United has not
authorized any other person to provide you with different information. If
anyone provides you with different or inconsistent information, you should
not rely on it. United is not making an offer to sell these securities in
any jurisdiction where the offer or sale is not permitted. You should
assume that the information appearing in this prospectus or any prospectus
supplement, as well as information United has previously filed with the
Securities and Exchange Commission and incorporated by reference, is
accurate as of the date on the front of those documents only. United's
business, financial condition, results of operations and prospects may have
changed since those dates.
WHERE YOU CAN FIND MORE INFORMATION
United Air Lines, Inc. files reports, proxy statements and other
information with the SEC. You may access United's SEC filings over the
Internet at the SEC's web site at http://www.sec.gov. You may also read and
copy any document United files at the SEC's public reference room at 450
Fifth Street, N.W., Washington, D.C. 20549. Please call the SEC at
1-800-SEC-0330 to obtain information on the operation of the public
reference room.
United has filed a registration statement on Form S-3 relating to
the securities with the SEC under the Securities Act of 1933. For further
information on United and the securities, you should refer to the
registration statement and its exhibits. This prospectus and the related
prospectus supplement summarize material provisions of contracts and other
documents that United refers you to. Since the prospectus and the related
prospectus supplement may not contain all the information that you may find
important, you should review the full text of these documents. United has
included copies of these documents as exhibits to the registration
statement or incorporated them by reference into this prospectus.
INCORPORATION OF INFORMATION UNITED FILES WITH THE SEC
United is "incorporating by reference" certain information it files
with the SEC into this prospectus, which means:
o incorporated documents are considered part of this prospectus;
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o United can disclose important information to you by referring
you to those documents; and
o information that United files with the SEC will automatically
update and supersede this prospectus.
United incorporates by reference its Annual Report on Form 10-K for
the fiscal year ended December 31, 1999, its Quarterly Reports on Form 10-Q
for the fiscal quarters ended March 31, 2000 and June 30, 2000, and its
Current Reports on Form 8-K dated May 26, 2000, July 19, 2000 and August
17, 2000, which United filed with the SEC under the Securities Exchange Act
of 1934. United also incorporates by reference the Current Reports of UAL
Corp. on Form 8-K filed on May 24, 2000, August 17, 2000 and September 29,
2000 and on Form 8- K/A filed on June 21, 2000, which UAL Corp. filed with
the SEC under the Securities Exchange Act of 1934.
United also incorporates by reference each of the following
documents that United will file with the SEC after the date of the initial
filing of the registration statement with the SEC and prior to
effectiveness of the registration statement or after the date of this
prospectus but before the end of the offering of the securities:
o Reports filed under Sections 13(a) and (c) of the 1934 Act,
o Definitive proxy or information statements filed under
Section 14 of the 1934 Act in connection with any subsequent
stockholders' meeting, and
o Any reports filed under Section 15(d) of the 1934 Act.
You may request a copy of any filings referred to above, at no
cost, by writing or telephoning United at the following address:
Corporate Secretary's Office
United Air Lines, Inc. - WHQLD
P.O. Box 66100
Chicago, Illinois 60666
(847) 700-4453.
THE COMPANY
United Air Lines, Inc. was incorporated under the laws of the State
of Delaware on December 30, 1968. The world headquarters of the Company are
located at 1200 East Algonquin Road, Elk Grove Township, Illinois 60007.
The Company's mailing address is P.O. Box 66100, Chicago, Illinois 60666.
The telephone number for the Company is (847) 700-4000.
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United is the principal subsidiary of UAL Corporation, a Delaware
corporation, and is wholly owned by UAL. United accounted for virtually all
of UAL's revenues and expenses in 1999. United is a major commercial air
transportation company, engaged in the transportation of persons, property
and mail throughout the United States and abroad.
During 1999, United carried, on average, more than 243,000
passengers per day and flew more than 125 billion revenue passenger miles.
It is the world's largest airline as measured by revenue passenger miles
flown, providing passenger service in 26 countries.
United operates a global network, which encompasses major cities
such as Chicago, Denver, Los Angeles, New York, Miami, San Francisco,
Washington-Dulles, D.C., in the U.S., and Buenos Aires, Frankfurt, Hong
Kong, London, Mexico City, Paris, Sao Paulo, Sydney and Tokyo in the
international markets. United's network, supplemented with strategic
airline alliances, provides comprehensive transportation service within
North America (the domestic segment), within Latin America, Europe, and the
Pacific (the international segment), and between these two segments.
Operating revenues attributed to United's North America segment were
approximately $12.5 billion in 1999, $12.0 billion in 1998, and $11.2
billion in 1997. Operating revenues attributed to United's international
segment were approximately $5.5 billion in 1999, $5.5 billion in 1998, and
$6.1 billion in 1997.
Since October 1994, United has operated a service, United Shuttle,
within its domestic segment. This service is designed to provide both
affordable and profitable air service in highly competitive markets, as
well as critical feed traffic. United Shuttle(R) is principally
concentrated on the West Coast and in Denver. United Shuttle offers
approximately 500 daily flights on 30 routes among 22 cities in the western
United States.
RATIO OF EARNINGS TO FIXED CHARGES
The ratio of earnings to fixed charges for United is set forth
below for the periods indicated.
Six-months Ended Year Ended December 31
---------------- ---------------------------------------
June 30, 2000 1999 1998 1997 1996 1995
------------- ---- ---- ---- ---- ----
2.34 2.77 2.05 2.36 1.76 1.44
For the computation of the ratio of earnings to fixed charges,
"earnings" has been calculated by adding income before taxes and
extraordinary items, interest expense, undistributed earnings of
affiliates, the portion of rental expense representative of an interest
factor and amortization of capitalized debt expense. Fixed charges consist
of interest expense (including capitalized interest) and the portion of
rental expense representative of an interest factor.
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USE OF PROCEEDS
Except as otherwise set forth in the prospectus supplement relating
to a specific issuance of debt securities, United will use the net proceeds
to be received from the sale of the debt securities for general corporate
purposes, including repayment of indebtedness, financing of capital
expenditures or funding of potential acquisitions or other business
transactions. Pending use, United may temporarily invest the net proceeds
in short-term instruments.
DESCRIPTION OF SECURITIES
The debt securities will be issued under an Indenture between
United and a bank or trust company, as trustee. A form of the Indenture is
included as an exhibit to the registration statement. The following
summaries of some provisions of the Indenture are not complete and are
subject to all the provisions of the Indenture, including definitions of
the terms used in the Indenture. Wherever we refer to particular sections
or defined terms of the Indenture, these sections or defined terms are
automatically incorporated into this prospectus.
The following summarizes the general terms and provisions of the
debt securities. The prospectus supplement relating to the offered
securities will describe the particular terms of the debt securities
offered by any prospectus supplement.
The Indenture does not limit the amount of securities that may be
issued under and provides that debt securities may be issued in one or more
series. The debt securities will be unsecured obligations of United. Unless
otherwise provided in the applicable prospectus supplement, they will rank
equally and ratably with United's other unsecured obligations.
The applicable prospectus supplement will include specific terms
relating to the offering. These terms will include some or all of the
following:
o the title of the offered securities;
o the aggregate principal amount of the offered securities;
o whether the securities will be issued as registered securities,
bearer securities or both;
o the date or dates on which we will pay principal and interest;
o the fixed or variable interest rate(s), if any, of the debt
securities or the method by which we will determine the interest
rate(s);
o the date(s) from which interest will accrue;
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o the record dates used in determining who is to be paid interest;
o whether the interest rate or interest rate formula, as the
case may be, for the offered securities may be reset at the
option of United, and, if so, the date(s) on which we may
reset the interest rate or interest rate formula;
o the place or places where we will pay the principal of and any
premium and interest on the offered securities;
o any terms for redemption, repayment at your option or for
sinking fund payments;
o the denominations in which we will issue the registered
securities if other than denomination of 1,000 and any
multiple of $1,000, and the denominations in which we will
issue the bearer securities if other than the denomination
of $5,000;
o the currency or currency units in which the debt securities are
payable, if other than U.S. dollars;
o any provisions for defeasance and covenant defeasance;
o whether the debt securities will be represented by one or more
global securities and, if so, the method of transferring
beneficial interests in the global securities;
o if other than the principal amount of the debt securities,
the portion of the principal amount of the offered
securities which we will pay upon acceleration of the
maturity of the debt securities;
o whether we will list the securities on any stock exchange; and
o any other terms of the debt securities.
We may issue debt securities as "original issue discount
securities," which are securities that we would offer and sell at a
substantial discount below their stated principal amount. We will describe
the federal income tax consequences and other special considerations that
apply to original issue discount securities in the applicable prospectus
supplement. Original issue discount securities include any security that
provides that we must pay an amount less than the principal amount upon the
acceleration of the maturity of the debt security if an event of default
occurs and is continuing.
The Indenture does not contain covenants or other provisions
designed to give you protection if a highly leveraged transaction, change
in credit rating or other similar change occurs.
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Denominations, Registration and Transfer
Unless we provide otherwise in the applicable prospectus
supplement, we will pay principal, any premium and interest on the
securities, and you may register the transfer of securities, at the office
or agency we maintain in New York, New York, and at any other office or
agency we maintain for this purpose. We may issue securities as registered
securities, bearer securities or both. We may also issue securities in the
form of one or more global securities, as described below under "Book-Entry
Securities." Unless we tell you otherwise in a prospectus supplement, we
will issue registered securities denominated in U.S. dollars only in
denominations of $1,000 or any multiple of $1,000 and we will issue bearer
securities denominated in U.S. dollars only in the denomination of $5,000
with coupons attached. We will issue a global security in a denomination
equal to the total principal amount of outstanding securities represented
by the global security. We will specify in the prospectus supplement the
denominations of any securities we issue in a foreign or composite
currency.
We will not offer, sell, resell or otherwise deliver bearer
securities to any location in the United States or its possessions or to a
United States person except in limited circumstances described in
"Limitations on Issuance of Bearer Securities" below.
We will exchange registered securities for other denominations of
registered securities of the same series, principal amount and maturity
date. In addition, if we issue securities as both registered securities and
as bearer securities, at your option upon your written request, and subject
to the terms of the Indenture, we will exchange bearer securities, with all
unmatured coupons, except as provided below, and all matured coupons in
default attached, of that series for registered securities of the same
series of any authorized denominations and of the same principal amount and
maturity date. Unless we tell you otherwise in a prospectus supplement, any
bearer security you surrender in exchange for a registered security between
a regular record date or a special record date and the relevant date for
payment of interest will be surrendered without the coupon relating to that
date for payment of interest attached. We will not pay interest on the
registered security issued in exchange for that bearer security, but will
only pay the holder of the coupon when it is due in accordance with the
terms of the Indenture. Except as provided in a prospectus supplement, we
will not issue bearer securities in exchange for registered securities.
You may present securities for exchange as provided above. You may
present registered securities, other than a global security, for
registration of transfer, with the form of transfer properly signed, at the
office of the security registrar of any transfer agent we designate for
that purpose for any series of securities, without service charge and upon
payment of any taxes and other governmental charges. We will designate the
security registrar and any transfer agent in the prospectus supplement. The
security registrar or the transfer agent will effect any transfer or
exchange when it is satisfied with the documents of title and identity of
the person making the request. We have initially appointed the trustee as
the security registrar under the Indenture. If a prospectus supplement
refers to any transfer agent in addition to the security registrar
initially designated by us for any series of securities, we may at any time
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rescind the designation of that transfer agent or approve a change in the
location through which that transfer agent acts. If securities are issuable
only as registered securities, we must maintain a transfer agent in each place
of payment for that series. If we issue securities as bearer securities, we
must also maintain a transfer agent in a place of payment for that series
outside the United States. We may at any time designate additional transfer
agents for any series of securities.
If we redeem any securities in part, the Indenture does not require
us to:
o issue, register the transfer of or exchange securities
during a period beginning at the open of business 15 days
before we select any securities to be redeemed and ending at
the close of business on the day of mailing of the relevant
notice of redemption, if we issue securities only as
registered securities;
o issue, register the transfer of or exchange securities
during a period beginning at the open of business 15 days
before we select any securities to be redeemed and ending at
the close of business on the day of the first publication of
the notice of redemption, if we issue securities only as
bearer securities;
o issue, register the transfer of or exchange securities
during a period beginning at the open of business 15 days
before we select any securities to be redeemed and ending at
the close of business on the day of the mailing of the
notice of redemption, if we issue securities as both bearer
securities and registered securities and there is no
publication of the notice of redemption;
o register the transfer of or exchange any registered
security, or portion of a registered security, we call for
redemption, except the unredeemed portion of any registered
security we redeem in part; or
o exchange any bearer security we call for redemption, except
that we may exchange a bearer security for a registered
security of the same maturity date if you immediately
surrendered your registered security for redemption.
We will not charge a service charge for any registration of
transfer or exchange of the securities, but we may require payment of any
amount needed to cover any tax or other governmental charge imposed in
connection with a transfer or exchange.
Payments and Paying Agents
Unless we indicate otherwise in a prospectus supplement, we will
pay principal and any premium and interest on registered securities, other
than a global security, at the office of the paying agent(s) we designate
from time to time. At our option, we may make payment of any interest (1)
by check mailed to the address of the person entitled to the payment as the
address appears in the security register or (2) by wire transfer to an
account maintained by that person as specified in the security register.
Unless otherwise indicated in a prospectus supplement, we will
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pay any installment of interest on registered securities to the person in
whose name the registered security is registered at the close of business
on the regular record date for interest payments.
Unless we indicate otherwise in a prospectus supplement, we will
pay principal and any premium and interest on bearer securities at the
offices of the paying agent(s) outside the United States that we designate
from time to time. At our option, we may pay any interest by check or wire
transfer to an account maintained by the person entitled to payment outside
the United States or its possessions. Unless otherwise indicated in a
prospectus supplement, we will pay interest on bearer securities on any
interest payment date only if you surrender the coupon for that interest
payment date. We will not make any payment on a bearer security at our
office or agency in the United States or its possessions or by check mailed
to any address in the United States or its possessions or by transfer to an
account maintained in the United States or its possessions. We will not
make any payments on bearer securities or their coupons if you present them
to us or our paying agents in the United States or its possessions or make
any other demand for payment to us or our paying agents in the United
States or its possessions. However, we will pay principal and any premium
and interest on bearer securities denominated in U.S. dollars at our paying
agent's office in the United States only if payment of the full amount in
U.S. dollars at all offices or agencies outside the United States or its
possessions is illegal or effectively precluded by exchange controls or
other similar restrictions.
Unless we indicate otherwise in a prospectus supplement, the
trustee will serve as paying agent and the corporate trust office of the
trustee will be designated as our paying agent's office for payments with
respect to debt securities that we issue solely as registered securities.
We will name any paying agent outside the United States and any other
paying agent in the United States for the debt securities in a prospectus
supplement. We may at any time designate additional paying agents or
rescind the designation of any paying agent or approve a change in the
office through which any paying agent acts. If we issue securities only as
registered securities, we must maintain a paying agent in each place of
payment for that series. If we issue securities as bearer securities, we
will maintain:
o a paying agent in each place of payment for that series in
the United States for payments on any registered securities
of that series, and for payments on bearer securities of
that series only in the circumstances described above;
o a paying agent in each place of payment located outside the
United States where securities of that series and any
attached coupons; if the securities of that series are
listed on The International Stock Exchange, the London Stock
Exchange, the Luxembourg Stock Exchange or any other stock
exchange outside the United States and that stock exchange
requires it, we will maintain a paying agent in London or
Luxembourg or any other required city outside the United
States, for securities of that series; and
o a paying agent in each place of payment outside the United
States where you may surrender for registration of transfer
or exchange registered securities and where you may serve
notices to and demands on us.
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The paying agent will refund to us all moneys we pay to a paying
agent for the payment of principal of, and any premium and interest on, any
debt security that remains unclaimed at the end of two years after the
principal, any premium or interest became due and payable. After that time,
you may look only to us for payment.
Book-Entry Securities
Unless we provide otherwise in a prospectus supplement, the debt
securities will be represented by one or more certificates. These
certificates are called "global securities." We will deposit the global
security representing the debt securities with a depository. The depository
will initially be The Depository Trust Company. The global security will be
registered in the name of the depository or its nominee. Unless we provide
otherwise in a prospectus supplement, we will not issue debt securities in
definitive form. If the total principal amount of any issue exceeds $200
million, we will issue one certificate for each $200 million of principal
amount and an additional certificate for any remaining principal amount of
that issue.
The Depository Trust Company or "DTC" is a limited-purpose trust
company organized under the New York Banking Law. It is a "banking
organization" within the meaning of the New York Banking Law, a member of
the Federal Reserve System, a "clearing corporation" within the meaning of
the New York Uniform Commercial Code and a "clearing agency" registered
under the provisions of Section 17A of the 1934 Act. DTC holds securities
that its participants deposit with it. DTC also facilitates the settlement
among participants of securities transactions, such as transfers and
pledges, in deposited securities through electronic computerized book-entry
changes in participants' accounts, which eliminates the need for physical
movement of securities certificates. Direct participants of DTC include
securities brokers and dealers, banks, trust companies, clearing
corporations and other organizations. A number of DTC's direct participants
and the New York Stock Exchange, Inc., the American Stock Exchange, Inc.
and the National Association of Securities Dealers, Inc. own DTC. Other
persons, such as securities brokers and dealers, banks and trust companies
that clear through or maintain a custodial relationship with a direct
participant, have access to DTC's book-entry system, either directly or
indirectly. These other entities are referred to as "indirect
participants." The rules applicable to DTC and its participants are on file
with the SEC.
Purchases of debt securities represented by a global security under
DTC's system must be made by or through direct participants. Direct
participants will receive a credit for the debt securities on DTC's
records. The ownership interest of each actual purchaser of each debt
security will be recorded on the direct and indirect participants' records.
Each actual purchaser is referred to as the "beneficial owner" of that
security. Beneficial owners will not receive written confirmation from DTC
of their purchase, but beneficial owners are expected to receive written
confirmations providing details of the transaction and periodic statements
of their holdings, from the direct or indirect participant through which
the beneficial owner entered into the transaction. Transfers of ownership
interests in the debt securities are to be accomplished by entries made on
the books of participants acting on behalf of beneficial owners. Beneficial
owners will not receive certificates representing their ownership interests
in debt securities, except in the event that use of the book-entry system
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for the debt securities is discontinued. The laws of some states require that
certain purchasers of securities take physical delivery of securities in
definitive form. These limits and laws may impair the ability to transfer
beneficial interests in the global security.
So long as the depository for the global security, or its nominee,
is the registered owner of the global security, it will be considered the
sole owner or holder of the debt securities represented by the global
security. Except as provided below, owners of beneficial interests in the
debt securities represented by the global security will not be entitled to
have debt securities represented by the global security registered in their
names, will not receive or be entitled to receive physical delivery of debt
securities in definitive form and will not be considered the owners or
holders of the debt securities under the Indenture.
To facilitate subsequent transfers, all debt securities deposited by
participants with DTC are registered in the name of DTC's partnership
nominee, Cede & Co. The deposit of debt securities with DTC and their
registration in the name of Cede & Co. causes no change in the beneficial
ownership of the debt securities. DTC has no knowledge of the actual
beneficial owners of the debt securities; its records reflect only the
identity of the direct participants to whose accounts the debt securities
are credited, which may or may not be the beneficial owners. The
participants are responsible for keeping account of their holdings on
behalf of their customers. Conveyance of notices and other communications
by DTC to direct participants, by direct participants to indirect
participants and by direct participants and indirect participants to
beneficial owners will be governed by arrangements among them. Those
arrangements are subject to any applicable statutory or regulatory
requirements.
Neither DTC nor Cede & Co. will consent or vote with respect to debt
securities. Under its usual procedures, DTC mails an omnibus proxy to
United as soon as possible after the record date. The omnibus proxy assigns
Cede & Co.'s consenting or voting rights to the direct participants to
whose accounts the debt securities are credited on the record date. A
listing attached to the omnibus proxy will identify those direct
participants.
We will pay principal or any premium and interest on the global
security through the trustee or a paying agent to the depository as the
registered owner of the global security.
Subject to the restrictions discussed under "Limitations on Issuance
of Bearer Securities" below, we expect that the depository upon receipt of
any payment of principal, any premium or interest, will credit direct
participants' accounts with payments in amounts proportionate to their
respective beneficial interests in the principal amount of the global
security for the debt securities as shown on the records of the depository
or its nominee. We also expect that payments by participants to beneficial
owners will be governed by standing instructions and customary practices,
as is now the case with securities held for the accounts of customers in
bearer form or registered in "street name". The participants, and not DTC,
the paying agent or United, will be responsible for payments to the
beneficial owners. Receipt by beneficial owners of a temporary global
security of payments in respect of the temporary global security will be
subject to restrictions discussed under "Limitations on Issuance of Bearer
Securities" below. United or the paying agent will be responsible for the
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payment of principal, any premium and interest to DTC. DTC will be responsible
for the disbursement of these payments to direct participants. Direct and
indirect participants of DTC will be responsible for the disbursement of these
payments to the beneficial owners.
If the depository with respect to a global security is at any time
unwilling or unable to continue as depository and a successor depository is
not appointed by us within 90 days, we will issue certificated notes in
exchange for the debt securities represented by the global security.
The information in this section concerning the depository and the
depository's book- entry system has been obtained from sources that United
believes to be reliable, but United takes no responsibility for the
accuracy of this information.
In addition to holding securities through participants or indirect
participants of DTC in the United States as described above, you may hold
your debt securities through Clearstream or Euroclear in Europe or
indirectly through organizations that are participants in these systems.
Clearstream and Euroclear will hold omnibus positions on behalf of
their participants through customers' securities accounts in Clearstream's
and Euroclear's names on the books of their respective depositaries which
in turn will hold these positions in customers' securities accounts in the
depositaries' names on the books of DTC.
Transfers between Clearstream participants and Euroclear
participants will occur in accordance with their respective rules and
operating procedures. Cross-market transfers between persons holding
directly or indirectly through DTC, on the one hand, and directly or
indirectly through Clearstream participants or Euroclear participants, on
the other hand, will be effected in DTC in accordance with DTC rules on
behalf of the relevant European international clearing systems by its
depositary. Cross-market transactions will require delivery of instructions
to the relevant European international clearing system by the counterparty
in this system in accordance with its rules and procedures and within its
established deadlines (European time). If the transaction meets its
settlement requirements, the relevant European international clearing
system will deliver instructions to its depositary to take action to effect
final settlement on its behalf by delivering or receiving securities in
DTC, and making or receiving payment in accordance with normal procedures
for same-day funds settlement applicable to DTC. Clearstream participants
and Euroclear participants may not deliver instructions directly to the
depositaries.
Because of time-zone differences, credits of debt securities
received in Clearstream or Euroclear as a result of a transaction with a
DTC participant will be made during subsequent securities settlement
processing and dated the business day following the DTC settlement date.
These credits or any transactions in the debt securities settled during the
securities settlement processing will be reported to the relevant Euroclear
or Clearstream participants on the business day following the DTC
settlement date. Cash received in Clearstream or Euroclear as a result of
sales of debt securities by or through a Clearstream participant or a
Euroclear participant to a DTC participant will be received with value on
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the DTC settlement date but will be available in the relevant Clearstream
or Euroclear cash account only as of the business day following settlement
in DTC.
Clearstream is incorporated under the laws of Luxembourg as a
professional depository. Clearstream holds securities for its participating
organizations and facilitates the clearance and settlement of securities
transactions between Clearstream participants through electronic book-
entry changes in accounts of Clearstream participants, which eliminates the
need for physical movement of certificates. Transactions may be settled in
Clearstream in any of 28 currencies, including United States dollars.
Clearstream provides to Clearstream participants, among other things,
services for safekeeping, administration, clearance and settlement of
internationally traded securities and securities lending and borrowing.
Clearstream interfaces with domestic markets in several countries. As a
professional depository, Clearstream is subject to regulation by the
Luxembourg Monetary Institute. Clearstream participants are recognized
financial institutions around the world, including underwriters, securities
brokers and dealers, banks, trust companies, clearing corporations and
certain other organizations and may include the underwriters. Indirect
access to Clearstream is also available to others, such as banks, brokers,
dealers and trust companies that clear through or maintain a custodial
relationship with a Clearstream participant, either directly or indirectly.
Euroclear was created in 1968 to hold securities for participants of
Euroclear and to clear and settle transactions between Euroclear
participants through simultaneous electronic book- entry delivery against
payment, eliminating the need for physical movement of certificates and any
risk from lack of simultaneous transfers or securities and cash.
Transactions may now be settled in any of 29 currencies, including United
States dollars. Euroclear includes various other services, including
securities lending and borrowing and interfaces with domestic markets in
several countries generally similar to the arrangements for cross-market
transfers with DTC described above. Euroclear is operated by the Brussels,
Belgium office of Morgan Guaranty Trust Company of New York (the "Euroclear
Operator"), under contract with Euro-clear Clearance System S.C., a Belgian
cooperative corporation (the "Cooperative"). All operations are conducted
by the Euroclear Operator, and all Euroclear securities clearance accounts
and Euroclear cash accounts are accounts with the Euroclear Operator, not
the Cooperative. The Cooperative establishes policy for Euroclear on behalf
of Euroclear participants. Euroclear participants include banks (including
central banks), securities brokers and dealers and other professional
financial intermediaries and may include the Underwriters. Indirect access
to Euroclear is also available to other firms that clear through or
maintain a custodial relationship with a Euroclear participant, either
directly or indirectly.
The Euroclear Operator is the Belgian branch of a New York banking
corporation which is a member bank of the Federal Reserve System. As such,
it is regulated and examined by the Board of Governors of the Federal
Reserve System and the New York State Banking Department, as well as the
Belgian Banking Commission.
The Terms and Conditions Governing Use of Euroclear and the related
Operating Procedures of the Euroclear System and applicable Belgian law
govern securities clearance accounts and cash accounts with the Euroclear
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Operator. These terms and conditions govern transfers of securities and cash
with Euroclear, withdrawals of securities and cash from Euroclear, and receipts
of payments with respect to securities in Euroclear. All securities in
Euroclear are held on a fungible basis without attribution of specific
certificates to specific securities clearance accounts. The Euroclear Operator
acts under the terms and conditions only on behalf of Euroclear participants,
and has no record of or relationship with persons holding though Euroclear
participants.
Distributions with respect to debt securities held through
Clearstream or Euroclear will be credited to the cash accounts of
Clearstream participants or Euroclear participants in accordance with the
relevant system's rules and procedures, to the extent received by its
depositary. These distributions will be subject to tax reporting in
accordance with relevant United States tax laws and regulations.
Clearstream or the Euroclear Operator, as the case may be, will take any
other action permitted to be taken by a holder under the Indenture or any
other related document on behalf of a Clearstream participant or Euroclear
participant only in accordance with its relevant rules and procedures and
subject to its depositary's ability to effect action on its behalf through
DTC.
Although DTC, Clearstream and Euroclear have agreed to the foregoing
procedures in order to facilitate transfers of securities among
participants of DTC, Clearstream and Euroclear, they are under no
obligation to perform or continue to perform these procedures and these
procedures may be discontinued at any time.
Except as required by law, neither United, the trustee nor the
paying agent will have any liability for any aspect of the records relating
to or payments made on account of beneficial ownership interests of the
debt securities of any series held by Cede & Co., as nominee for DTC, by
Clearstream or by Euroclear in Europe, or for maintaining, supervising or
reviewing any records relating to the beneficial ownership interests of the
debt securities of any series held by Cede & Co., Clearstream or Euroclear.
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Limitations on Issuance of Bearer Securities
United States federal tax laws and regulations do not allow us to
deduct interest on debt securities unless we take the following steps:
o Bearer securities may not be offered, sold, resold or
delivered in connection with their original issue in the
United States or its possessions or to United States persons
as defined in the Internal Revenue Code and its regulations;
subject to certification requirements, bearer securities may
be offered or sold to offices outside of the United States of
United States financial institutions that agree to comply
with the requirements of Section 165(j)(3)(A), (B) or (C) of
the Internal Revenue Code and its regulations; and
o any underwriters, agents and dealers participating in the
offering of securities must agree that they will not offer
any bearer securities for sale or resale in the United States
or its possessions or to United States persons, other than
the financial institutions described above, nor deliver
bearer securities within the United States or its
possessions.
Bearer securities and any attached coupons must bear a legend
substantially similar to the following: "Any United States person who holds
this obligation will be subject to limitations under the United States
income tax laws, including the limitations provided in Sections 165(j) and
1287(a) of the Internal Revenue Code." Under Sections 165(j) and 1287(a) of
the Internal Revenue Code, if you are a United States person, you generally
are not entitled to deduct any loss on bearer securities and must treat any
gain realized on the sale or other disposition, including the receipt of
principal, of bearer securities as ordinary income.
Other restrictions and additional tax considerations may apply to
the issuance and holding of bearer securities. You should consult your tax
advisor about the existence of any tax restrictions.
Notices
Except as otherwise set forth in a prospectus supplement, we will
give notices to holders of bearer securities by publication in a daily
newspaper in the English language of general circulation in New York City
and London. So long as bearer securities are listed on the Luxembourg Stock
Exchange and the Luxembourg Stock Exchange requires it, we will also give
notices in a daily newspaper of general circulation in Luxembourg City or,
if not practical, elsewhere in Western Europe. We expect to make this
publication in The Wall Street Journal, the Financial Times and the
Luxemburger Wort. We will give notices to holders of registered securities
by mail to the addresses of securityholders as they appear in the security
register.
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Events of Default
Any one of the following events will be an event of default for the
debt securities of any particular series:
(1) we fail to pay any interest on the debt security within 30 days
after its due date;
(2) we fail to pay principal of, or any premium on, the debt security
within 10 days after its due date;
(3) we fail to deposit any sinking fund or other payment on the debt
security within 10 days after its due date;
(4) we fail to perform or we breach any of our other covenants or
warranties in the Indenture, unless the covenant or warranty
does not apply to your series, for 90 days after we receive
written notice stating we are in breach;
(5) we become bankrupt or insolvent; or
(6) any other event of default provided with respect to debt
securities of that series.
If any event of default with respect to any outstanding series of
the debt securities occurs and is not remedied as provided in the
Indenture, either the trustee or the holders of at least 25% in aggregate
principal amount of that series of the outstanding debt securities may
declare the entire principal amount of that series of debt securities to be
due and payable immediately. This is called a declaration of acceleration.
If any event of default with respect to original issue discount securities,
either the trustee or the holders of at least 25% in aggregate principal
amount of that series of the outstanding debt securities may declare the
portion of the principal amount of the securities of that series specified
in the Indenture to be due and payable immediately. At any time after a
declaration of acceleration has been made, but before a judgment based on
acceleration has been obtained, the holders of a majority of the aggregate
principal amount of that series of outstanding debt securities may, in some
instances, rescind and annul the acceleration.
You should review the applicable prospectus supplement relating to
any series of debt securities that are original issue discount securities
for the particular provisions relating to acceleration of the stated
maturity of a portion of the principal amount of that series of original
issue discount securities upon the occurrence and continuation of an event
of default.
The Indenture provides that, subject to the duty of the trustee
during default to act with the required standard of care, the trustee is
not required to exercise any of its rights or powers under the Indenture at
the request of any of the holders of the debt securities, unless those
holders have offered to the trustee reasonable protection from losses and
expenses, which is called "indemnity." If an indemnity is given, the
holders of a majority of the principal amount of the outstanding debt
securities of any series may direct the time, method and place of
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conducting any legal action for any remedy available to the trustee, or
exercising any of the trustee's powers with respect to that series of the
debt securities.
You will not have the right to take legal action under the
Indenture, unless:
o you give the trustee written notice of an event of default that
is not remedied on time;
o the holders of at least 25% of the principal amount of that
series of outstanding debt securities have made written
request, and offered reasonable indemnity, to the trustee to
take legal action; and
o the trustee has not received from the holders of a majority
of the principal amount of that series of outstanding debt
securities a direction not to take legal action or otherwise
has failed to take legal action within 60 days.
However, these limitations do not apply to a suit instituted by a
holder of a security to enforce the payment of the principal of, and any
premium or interest on, its debt security on or after the due dates for
those payments.
We are required to furnish to the trustee annually a statement as to
our performance of our obligations under the Indenture and as to any
default in our performance.
Modification and Waiver
We may modify and amend the Indenture only if the trustee and the
holders of at least the majority of the principal amount of each series of
the outstanding debt securities issued under the Indenture and affected by
the modification or amendment consent to the amendment. We may not make the
following amendments without the consent of the holders of all affected
debt securities:
(1) any change to the stated maturity of the principal of, or any
installment of principal of or interest on, any debt security;
(2) any reduction of the principal amount of any premium, or
unless we indicate otherwise in the applicable prospectus
supplement, interest on any debt security, including, in the
case of an original issue discount security, the amount
payable upon acceleration;
(3) any change in the place or currency of payment of principal of,
or any premium or interest on, any debt security;
(4) any changes that impair your right to take legal action for
the enforcement of any payment on any debt security on or
after its stated maturity or, in the case of redemption, on
or after the redemption date; or
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(5) any reduction in the percentage of the principal amount of
any series of outstanding debt securities that must consent
to modify or amend the Indenture, to waive compliance with
its provisions or to waive events of defaults.
The holders of at least a majority of the principal amount of any
series of outstanding debt securities may, on behalf of all holders of that
series, waive our compliance with some of the restrictive provisions of the
Indenture. The holders of at least a majority of the principal amount of
any series of outstanding debt securities may, on behalf of all holders of
that series, waive any past default under the Indenture. However, all
holders of the affected series of outstanding debt securities must consent
in order to waive a default in the payment of principal, any premium or
interest and a default in respect of a covenant or provision of the
Indenture that cannot be modified or amended without the consent of the
holder of each outstanding debt security of that series.
Consolidation, Merger and Sale of Assets
We may consolidate with or merge into any other corporation or
transfer substantially all of our assets to any corporation if:
(1) (A) we are the surviving corporation or (B) any successor or
purchaser is a corporation organized and validly existing
under the laws of the United States of America, any State or
the District of Columbia, and the successor or purchaser
expressly assumes our obligations relating to the debt
securities;
(2) immediately after the transaction, no event of default has
occurred or would occur; and
(3) if our properties or assets become subject to a lien that is
not permitted by the Indenture, we or our successor grant you
a lien on that property that is equal or superior to the lien
resulting from the transaction.
Defeasance and Covenant Defeasance
The Indenture provides that, if the terms of any debt security
permit, at our option, we:
(1) will be discharged from our obligations under the debt
securities, except for our obligations to register the
transfer of debt securities, replace stolen, lost or
mutilated debt securities, maintain paying agencies and hold
moneys for payment in trust; or
(2) are not required to comply with specified covenants in the
Indenture and the event described in clause (4) under
"--Events of Default" will no longer be an event of default,
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if we deposit with the trustee to hold in trust a sufficient amount of
money or U.S. government obligations to make all required payments on the
debt securities of that series on the dates those payments are due. All
payments must be made in accordance with the terms of that series of debt
securities. We may establish a trust arrangement of this type only if,
among other things:
(a) no event of default has occurred or would occur on the date
of the deposit or on any later date specified in the
Indenture if we become bankrupt or insolvent;
(b) the deposit will not cause the trustee to have any conflicting
interest with any of our other debt securities;
(c) the defeasance will not violate or be a default under the
Indenture or any of our other agreements; and
(d) we have delivered an opinion of counsel that states that the
holders will not recognize income, gain or loss for federal
income tax purposes as a result of the deposit or defeasance
and will be subject to federal income tax in the same manner as
if the defeasance had not occurred. The opinion of counsel, in
the case of full defeasance described in clause (1) above, must
refer to and be based upon a published ruling of the Internal
Revenue Service, a private ruling of the Internal Revenue Service
addressed to us, or otherwise be based on a change in federal
income tax law after the date of the Indenture.
If we do not comply with our remaining obligations under the Indenture
after a covenant defeasance and the debt securities of that series are
declared due and payable because of the occurrence of any event of default,
the amount of money and U.S. government obligations on deposit with the
trustee may be insufficient to pay amounts due on the debt securities of
that series at the time of the acceleration. However, we will remain liable
for these payments.
Concerning the Trustee
The applicable prospectus supplement will name the trustee under the
Indenture. The trustee may act as trustee under our other financings. The
trustee may also perform services for us and our affiliates in the ordinary
course of business and may be a lender bank under our credit facilities.
PLAN OF DISTRIBUTION
We may sell the debt securities being offered by this prospectus
through agents, through underwriters and through dealers. Debt securities
may be sold to other purchasers directly or through agents or through a
combination of any of these methods of sale.
The securities may be distributed in one or more transactions at a
fixed price or prices, which may be changed, at market prices prevailing at
the time of sale, at prices related to the prevailing market prices or at
negotiated prices.
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Offers to purchase debt securities may be solicited by agents
designated by us. The applicable prospectus supplement will name any agent,
who may be deemed to be an underwriter, as that term is defined in the 1933
Act, involved in the offer or sale of the debt securities and will describe
any commissions payable by us to that agent. We may indemnify our agents
against certain liabilities, including liabilities under the 1933 Act. In
addition, our agents or their affiliates may be customers of, extend credit
to, engage in transactions with, or perform services for, us and/or our
affiliates in the ordinary course of business. Unless otherwise indicated
in the applicable prospectus supplement, any agent will be acting on a best
efforts basis for the period of its appointment.
If any underwriters are utilized in the sale, we will enter into an
underwriting agreement with these underwriters at the time of sale to them.
The names of the underwriters and the terms of the transaction will be
described in the applicable prospectus supplement that the underwriters
will use to resell the debt securities in respect of which this prospectus
is delivered to the public. We may indemnify underwriters against certain
liabilities, including liabilities under the 1933 Act. In addition, our
underwriters or their affiliates may be customers of, extend credit to,
engage in transactions with, or perform services for, us and/or our
affiliates in the ordinary course of business.
If dealers are utilized in the sale of the debt securities, we will
sell the debt securities to the dealers as principal. The dealers may then
resell the debt securities to the public at varying prices to be determined
by the dealers at the time of resale. We may indemnify dealers against
certain liabilities, including liabilities under the 1933 Act. In addition,
dealers or their affiliates may be customers of, extend credit to, engage
in transactions with, or perform services for, us and/or our affiliates in
the ordinary course of business.
Unless otherwise indicated in the applicable prospectus supplement,
we do not propose to list the debt securities on a securities exchange. If
any debt securities are sold to or through underwriters, dealers or agents,
they may make a market in the securities as permitted by applicable law or
regulations. However, no underwriters or dealers will be obligated to make
a market in debt securities. We cannot predict the activity or liquidity of
any trading in the debt securities.
If indicated in an applicable prospectus supplement, we will
authorize underwriters or agents to solicit offers by specified
institutions to purchase offered debt securities from us under delayed
delivery contracts. Delayed delivery contracts provide for payment and
delivery on the date or dates stated in the prospectus supplement. Each
delayed delivery contract will be for an amount not less than, and the
aggregate principal amount of offered debt securities sold under delayed
delivery contracts will be not less nor more than, the amounts stated in
the prospectus supplement. Institutions with whom delayed delivery
contracts, when authorized, may be made include commercial and savings
banks, insurance companies, pension funds, investment companies,
educational and charitable institutions and other institutions, but will in
all cases be subject to our approval. Delayed delivery contracts will not
be subject to any conditions except:
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o the purchase by an institution of the offered debt securities
covered by its delayed delivery contracts will not at the
time of delivery be prohibited under the laws of any
jurisdiction in the United States; and
o if the offered debt securities are being sold to
underwriters, we will have sold to the underwriters the total
principal amount of the offered debt securities less the
principal amount covered by delayed delivery contracts.
Agents and underwriters will have no responsibility for the delivery
or performance of delayed delivery contracts.
LEGAL MATTERS
Unless otherwise indicated in a prospectus supplement, counsel for
United, Mayer, Brown & Platt, Chicago, Illinois and counsel for any
underwriters, dealers and agents will pass upon certain legal matters in
connection with the debt securities offered by this prospectus.
EXPERTS
Unless otherwise indicated in a prospectus supplement, Arthur
Andersen LLP, independent public accountants, have audited the audited
financial statements and schedules included or incorporated by reference in
this prospectus, any prospectus supplement and elsewhere in the
registration statement, as indicated in their audit reports, and the
audited financial statements and schedules are included or incorporated by
reference in this prospectus in reliance upon the authority of that firm as
experts in giving audit reports.
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THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE
MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT
AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY
THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
Subject to Completion, Dated October ___, 2000.
PROSPECTUS
United Air Lines, Inc.
1200 East Algonquin Road
Elk Grove Village, IL 60007
Mailing Address: P.O. Box 66100
Chicago, Illinois 60666
(847) 700-4000
[COMPANY LOGO]
PASS THROUGH CERTIFICATES
Pass through trusts formed by United may offer for sale up to $_______
of pass through certificates from time to time under this prospectus and one
or more prospectus supplements. Each pass through certificate will
represent an interest in a pass through trust. The property of the pass
through trust will include equipment notes issued by:
o a trust to finance or refinance a portion of the purchase
price of an aircraft that has been or will be leased to
United as part of a leveraged lease transaction; or
o United to finance or refinance all or a portion of the
purchase price of an aircraft owned or to be purchased by
United.
Equipment notes issued by a trust are without recourse to United.
Equipment notes issued by United are with recourse to United. For each
aircraft, the owner trustee or United will issue one or more equipment
notes with an interest rate, final maturity date and ranking of priority of
payment described in a prospectus supplement.
The pass through trustee will distribute to the holders of pass
through certificates the interest paid on the equipment notes held in the
related pass through trust on the dates and at the rates indicated in a
prospectus supplement. Holders of pass through certificates will also
receive distributions of the principal paid on the equipment notes in
scheduled amounts and on dates specified in a prospectus supplement. Unless
otherwise indicated in a prospectus supplement, we will not list the pass
through certificates on any national securities exchange.
================================================================================
United will provide specific terms of these securities in supplements to this
prospectus. You should read this prospectus and any prospectus supplement
carefully before you invest.
================================================================================
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon
the adequacy or accuracy of this prospectus. Any representation to the
contrary is a criminal offense.
================================================================================
The date of this Prospectus is October ____, 2000.
<PAGE>
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that contains
two forms of prospectus to be used in connection with offerings of debt
securities or pass through certificates. This prospectus provides you with
a general description of pass through certificates that we may offer. Each
time that we sell pass through certificates, we will provide a prospectus
supplement that will contain specific information about the terms of that
offering.
You should rely only on the information contained or incorporated by
reference in this prospectus or a prospectus supplement. United has not
authorized any other person to provide you with different information. If
anyone provides you with different or inconsistent information, you should
not rely on it. United is not making an offer to sell these securities in
any jurisdiction where the offer or sale is not permitted. You should
assume that the information appearing in this prospectus or any prospectus
supplement, as well as information United has previously filed with the
Securities and Exchange Commission and incorporated by reference, is
accurate as of the date on the front of those documents only. United's
business, financial condition, results of operations and prospects may have
changed since those dates.
WHERE YOU CAN FIND MORE INFORMATION
United Air Lines, Inc. files reports, proxy statements and other
information with the SEC. You may access United's SEC filings over the
Internet at the SEC's web site at http://www.sec.gov. You may also read and
copy any document United files at the SEC's public reference room at 450
Fifth Street, N.W., Washington, D.C. 20549. Please call the SEC at 1-
800-SEC-0330 to obtain information on the operation of the public reference
room.
United has filed with the SEC under the Securities Act of 1933 a
registration statement on Form S-3 relating to the securities. For further
information on United and the securities, you should refer to the
registration statement and its exhibits. This prospectus and the related
prospectus supplement summarizes material provisions of contracts and other
documents that United refers you to. Since the prospectus and the related
prospectus supplement may not contain all the information that you may find
important, you should review the full text of these documents. United has
included forms of these documents as exhibits to the registration statement
or incorporated them by reference into this prospectus.
INCORPORATION OF INFORMATION UNITED FILES WITH THE SEC
United is "incorporating by reference" certain information it files
with the SEC into this prospectus, which means:
o incorporated documents are considered part of this prospectus;
o United can disclose important information to you by referring you
to those documents; and
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o information that United files with the SEC will automatically
update and supersede this prospectus.
United incorporates by reference its Annual Report on Form 10-K for
the fiscal year ended December 31, 1999, its Quarterly Reports on Form 10-Q
for the fiscal quarters ended March 31, 2000 and June 30, 2000, and its
Current Reports on Form 8-K dated May 26, 2000, July 19, 2000 and August
17, 2000, which United filed with the SEC under the Securities Exchange Act
of 1934. United also incorporates by reference the Current Reports of UAL
Corp. on Form 8-K filed on May 24, 2000, August 17, 2000 and September 29,
2000 and on Form 8- K/A filed on June 21, 2000, which UAL Corp. filed with
the SEC under the Securities Exchange Act of 1934.
United also incorporates by reference each of the following
documents that United will file with the SEC after the date of the initial
filing of the registration statement with the SEC and prior to
effectiveness of the registration statement or after the date of this
prospectus but before the end of the offering of the securities:
o Reports filed under Sections 13(a) and (c) of the 1934 Act,
o Definitive proxy or information statements filed under
Section 14 of the 1934 Act in connection with any subsequent
stockholders' meeting, and
o Any reports filed under Section 15(d) of the 1934 Act.
You may request a copy of any filings referred to above, at no cost,
by writing or telephoning United at the following address:
Corporate Secretary's Office
United Air Lines, Inc. - WHQLD
P.O. Box 66100
Chicago, Illinois 60666
(847) 700-4453.
REPORTS TO PASS THROUGH CERTIFICATEHOLDERS
The pass through trustee under each pass through trust will provide
the certificateholders of each pass through trust with periodic statements
concerning the distributions made from that pass through trust. See
"Description of the Certificates--Reports to Certificateholders" for a
description of these periodic statements.
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THE COMPANY
United Air Lines, Inc. was incorporated under the laws of the State of
Delaware on December 30, 1968. The world headquarters of the Company are
located at 1200 East Algonquin Road, Elk Grove Township, Illinois 60007.
The Company's mailing address is P.O. Box 66100, Chicago, Illinois 60666.
The telephone number for the Company is (847) 700-4000.
United is the principal subsidiary of UAL Corporation, a Delaware
corporation, and is wholly owned by UAL. United accounted for virtually all
of UAL's revenues and expenses in 1999. United is a major commercial air
transportation company, engaged in the transportation of persons, property
and mail throughout the United States and abroad.
During 1999, United carried, on average, more than 243,000
passengers per day and flew more than 125 billion revenue passenger miles.
It is the world's largest airline as measured by revenue passenger miles
flown, providing passenger service in 26 countries.
United operates a global network, which encompasses major cities
such as Chicago, Denver, Los Angeles, New York, Miami, San Francisco,
Washington-Dulles, D.C., in the U.S., and Buenos Aires, Frankfurt, Hong
Kong, London, Mexico City, Paris, Sao Paulo, Sydney and Tokyo in the
international markets. United's network, supplemented with strategic
airline alliances, provides comprehensive transportation service within
North America (the domestic segment), within Latin America, Europe, and the
Pacific (the international segment), and between these two segments.
Operating revenues attributed to United's North America segment were
approximately $12.5 billion in 1999, $12.0 billion in 1998, and $11.2
billion in 1997. Operating revenues attributed to United's international
segment were approximately $5.5 billion in 1999, $5.5 billion in 1998, and
$6.1 billion in 1997.
Since October 1994, United has operated a service, United Shuttle,
within its domestic segment. This service is designed to provide both
affordable and profitable air service in highly competitive markets, as
well as critical feed traffic. United Shuttle(R) is principally
concentrated on the West Coast and in Denver. United Shuttle offers
approximately 500 daily flights on 30 routes among 22 cities in the western
United States.
RATIO OF EARNINGS TO FIXED CHARGES
The ratio of earnings to fixed charges for United is set forth below
for the periods indicated.
Six-months Ended Year Ended December 31
---------------- ----------------------------------------------
June 30, 2000 1999 1998 1997 1996 1995
------------- ---- ---- ---- ---- ----
2.34 2.77 2.05 2.36 1.76 1.44
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For the computation of the ratio of earnings to fixed charges,
"earnings" has been calculated by adding income before taxes and
extraordinary items, interest expense, undistributed earnings of
affiliates, the portion of rental expense representative of an interest
factor and amortization of capitalized debt expense. Fixed charges consist
of interest expense (including capitalized interest) and the portion of
rental expense representative of an interest factor.
OUTLINE OF PASS THROUGH TRUST STRUCTURE
Each series of pass through certificates will be issued by a
separate pass through trust. Each separate pass through trust will be
formed under a supplemental agreement, between United and the pass through
trustee named in the series supplement, to a Pass Through Trust Agreement
between United and the pass through trustee. All pass through certificates
issued by a particular pass through trust will represent fractional
undivided interests in that pass through trust. The trust property held in
each pass through trust will consist of (a) equipment notes issued by
United in connection with financing or refinancing the purchase of one or
more aircraft, (b) equipment notes issued by one or more trusts in
connection with the financing or refinancing one or more leveraged lease
transactions, as specified in the applicable prospectus supplement, and (c)
any other property described in the applicable prospectus supplement.
United or the owner trustee may issue one or more equipment notes in
connection with each purchase or leveraged lease transaction. Each
equipment note may have different interest rates and final maturity dates
and rankings of priority of payment. Concurrently with the execution and
delivery of each series supplement, the pass through trustee, on behalf of
the related pass through trust, will enter into one or more agreements
under which it will purchase one or more equipment notes. Unless otherwise
provided in a prospectus supplement, the equipment notes that constitute
the property of a pass through trust will have the same interest rates as
the interest rates on the pass through certificates issued by the pass
through trust and the same priority of payment relative to each of the
other equipment notes held by the pass through trust. Unless otherwise
provided in a prospectus supplement, the latest maturity date for the
equipment notes will occur on or before the final distribution date
applicable to the pass through certificates issued by the pass through
trust holding those equipment notes.
For each pass through trust, the total amount of the pass through
certificates will equal the total principal amount of the equipment notes
constituting the trust property of the pass through trust. The pass through
trustee will distribute payments of principal, any premium and interest
received by it as holder of the equipment notes to the certificateholders
of the pass through trust that hold those equipment notes.
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USE OF PROCEEDS
The pass through trustee will use proceeds from the sale of pass
through certificates issued by a pass through trust to purchase equipment
notes or notes issued by a trust secured by equipment notes. The equipment
notes are or will be issued by:
o a trust to finance or refinance a portion of the purchase price
of an aircraft that has been or will be leased to United, or
o United to finance or refinance all or a portion of the
purchase price of an aircraft owned or to be purchased by
United.
For each leased aircraft, the owner trustee will issue the related
equipment notes, as nonrecourse obligations, and authenticated by a bank or
trust company, as indenture trustee under either a separate supplement to
an existing trust indenture and security agreement between the owner
trustee and the indenture trustee or a separate trust indenture and
security agreement. Each trust indenture and security agreement is referred
to in this prospectus as a "Leased Aircraft Indenture". The owner trustee
will also obtain a portion of the funding for the leased aircraft from an
equity investment of an owner participant(s). A leased aircraft may also be
subject to other financing arrangements that will be described in the
applicable prospectus supplement. In connection with the refinancing of a
leased aircraft, the owner trustee may refinance the existing equipment
notes through the issuance of notes by a separate trust, which will be
described in the applicable prospectus supplement.
We will issue the equipment notes relating to owned aircraft under
either a separate supplement to an existing trust indenture and mortgage or
a separate trust indenture and mortgage. Each trust indenture and mortgage
is referred to in this prospectus as an "Owned Aircraft Indenture." The
term "Indenture" refers to any Leased Aircraft Indenture and any Owned
Aircraft Indenture.
If the pass through trustee does not use the proceeds of any
offering of pass through certificates to purchase equipment notes on the
date of issuance of the pass through certificates, it will hold the
proceeds for the benefit of the holders of the related pass through
certificates under arrangements that we will describe in the applicable
prospectus supplement. If the pass through trustee does not subsequently
use any portion of the proceeds to purchase equipment notes by the date
specified in the applicable prospectus supplement, it will return that
portion of the proceeds to the holders of the related pass through
certificates.
In addition, pass through certificates may be offered subject to
delayed aircraft financing arrangements, such as the following:
o a pass through trust may purchase equipment notes issued by
an owner trustee prior to the purchase of an aircraft by the
owner trustee or the commencement of the related Lease to
United.
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o a pass through trust may purchase equipment notes issued by
United prior to the expected delivery date of an owned
aircraft.
o the funds may be invested with a depositary or represented by
escrow receipts until used to purchase equipment notes.
In these circumstances, the prospectus supplement will describe how
the proceeds of the pass through certificates will be held or applied
during any delayed aircraft financing period, including any depositary or
escrow arrangements.
FLOW OF PAYMENTS
Each pass through trust may hold equipment notes relating to more
than one aircraft. A prospectus supplement will describe the number of
aircraft included in each offering and the interest rates, final maturity
dates and rankings in respect of priority of payment of the equipment notes
held by each pass through trust.
In a leased aircraft transaction, United will lease each aircraft
from the owner trustee under a separate Lease. United will make scheduled
rent payments for each aircraft under the Lease. As a result of the
assignment under the related Leased Aircraft Indenture of specified rights
of the owner trustee under the Lease, United will make the rent payments
directly to the indenture trustee. From these rent payments, the indenture
trustee will pay to the pass through trustee the interest, principal and
any premium due from the owner trustee (or any separate trust created in
connection with the refinancing of leased aircraft) on the equipment notes
issued under the Indenture and held in the pass through trust. After the
indenture trustee has made the payments on the equipment notes then due,
the indenture trustee will pay the remaining balance to the owner trustee
for the benefit of the related owner participant. The owner participant may
be United or an affiliate of United. The pass through trustee for each pass
through trust will distribute to the related certificateholders payments
received on the equipment notes held in the pass through trust.
In an owned aircraft transaction, United will make scheduled
payments on the equipment notes relating to each aircraft to the indenture
trustee. From these payments, the indenture trustee will pay to the pass
through trustee for each pass through trust the interest, principal and any
premium due on the equipment notes issued under the related Owned Aircraft
Indenture and held in the related pass through trust. The pass through
trustee will distribute to the related certificateholders payments received
on the equipment notes held in the pass through trust.
In addition, this description generally assumes that, on or before
the date of the sale of any series of pass through certificates, the
related aircraft shall have been delivered and the ownership or lease
financing arrangements for such aircraft shall have been put in place.
However, it is possible that some or all of the aircraft related to a
particular offering of pass through certificates may be subject to delayed
aircraft financing arrangements. In the event of any delayed aircraft
financing arrangements, some terms of the pass through certificates will
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differ from the terms described in this prospectus. The applicable
prospectus supplement will reflect the material differences arising from
delayed aircraft financing arrangements.
DESCRIPTION OF THE CERTIFICATES
The discussion that follows is a summary of the terms of the pass
through certificates that we expect will be common to all series and is not
complete. The applicable prospectus supplement will describe most of the
financial terms and other specific terms of a particular series of pass
through certificates. The summary includes descriptions of the material
terms of the Pass Through Agreement. The form of Pass Through Agreement has
been filed as an exhibit to the registration statement of which this
prospectus is a part. The series supplement relating to each series of pass
through certificates and the forms of Indentures, Note Purchase Agreements,
if any, Participation Agreements, Leases, if the pass through certificates
relate to a leased aircraft transaction, intercreditor agreement, if any,
liquidity facility, if any, Trust Agreements and Collateral Agreements, if
any, will be filed with the SEC as exhibits to a post-effective amendment
to this registration statement, a Current Report on Form 8-K, a Quarterly
Report on Form 10-Q or an Annual Report on Form 10-K, as applicable, and
this summary is qualified in its entirety by the detailed information
appearing in each of these documents. This summary makes use of terms
defined in and is qualified in its entirety by reference to the Pass
Through Agreement.
Each prospectus supplement will include a glossary of terms used in
connection with the pass through certificates offered thereby and the
related equipment notes. The applicable prospectus supplement will describe
the particular terms of the Indentures, the pass through certificates, the
Leases and the Participation Agreements relating to any particular offering
of pass through certificates. To the extent that any provision in any
prospectus supplement is inconsistent with any provision of this summary,
the provision of the prospectus supplement will control.
The pass through certificates of each pass through trust will be
issued in fully registered form only. Each pass through certificate will
represent a fractional undivided interest in the separate pass through
trust formed by the Pass Through Agreement and the related series
supplement under which that pass through certificate is issued. The
property of each pass through trust will include (1) the equipment notes
and any other property described in the applicable prospectus supplement
held in that pass through trust, (2) all monies at any time paid on the
equipment notes and the other property held in that pass through trust, (3)
all monies due and to become due on the equipment notes and the other
property held in the pass through trust and (4) funds from time to time
deposited with the pass through trustee in accounts relating to that pass
through trust. If specified in a prospectus supplement, the property of a
pass through trust will also include rights under an intercreditor
agreement relating to cross-subordination arrangements and monies
receivable under a liquidity facility. Each pass through certificate will
represent a pro rata share of the outstanding principal amount of the
equipment notes and other property held in the related pass through trust
and will be issued, unless otherwise specified in a prospectus supplement,
in minimum denominations of $1,000 and integral multiples of $1,000 in
excess of $1,000.
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A prospectus supplement will describe the specific series of pass
through certificates offered by that prospectus supplement, including:
(1) the specific designation and title of the pass through
certificates and the pass through trust;
(2) the pass through trustee for that series of pass through
certificates;
(3) the regular distribution dates and special distribution dates
for the pass through certificates and any cut-off date for
the purchase of an aircraft;
(4) the specific form of the pass through certificates;
(5) whether the pass through certificates will be issued in
accordance with a book-entry system;
(6) a description of:
(a) the equipment notes to be purchased by that pass
through trust, including the period(s) within which,
the price(s) at which, and the terms and conditions
upon which the equipment notes may or must be repaid
in whole or in part, by United or the related owner
trustee;
(b) the payment priority of the equipment notes in relation
to any other equipment notes issued with respect to the
related aircraft;
(c) any additional security or liquidity facilities for the
pass through certificates;
(d) any intercreditor issues among the holders of equipment
notes having different priorities issued by the same owner
trustee;
(e) any provisions for defeasance or covenant defeasance; and
(f) any arrangements for the investment or other use of
proceeds of the pass through certificates prior to the
purchase of equipment notes, and any arrangements
relating to any delayed aircraft financing
arrangements;
(7) a description of the related aircraft, including whether the
aircraft is a leased aircraft or an owned aircraft;
(8) a description of the related Participation Agreement or Note
Purchase Agreement and Indenture, including a description of
events of default under the Indenture, remedies exercisable
upon the occurrence of an event of default and any
limitations on the exercise of remedies;
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(9) if the pass through certificates relate to leased aircraft, a
description of the related Lease, Trust Agreement and any
Collateral Agreement, including:
(a) the name of the owner trustee;
(b) a description of the events of default under the
Lease, remedies exercisable upon the occurrence of an
event of default and any limitations on the exercise
of remedies; and
(c) any rights of the owner trustee or owner participant to
cure failures of United to pay rent under the Lease;
(10) the extent, if any, to which the provisions of the operative
documents applicable to the equipment notes may be amended
without the consent of the holders of the equipment notes, or
upon the consent of the holders of a specified percentage of
the total principal amount of the equipment notes;
(11) a description of the related Indenture;
(12) a description of any intercreditor or subordination
provisions among the holders of pass through certificates,
including any cross-subordination provisions among the
holders of pass through certificates in separate pass through
trusts;
(13) a description of any deposit or escrow agreement, any
liquidity or revolving credit facility or other like
arrangement providing collateralization, credit support or
liquidity enhancement for any series of pass through
certificate or any class of equipment notes; and
(14) any other special terms of the pass through certificates.
The applicable prospectus supplement will also describe any special
United States federal income tax considerations and any other special
information with respect to that series of pass through certificates if:
o the pass through certificates are denominated in foreign or
composite currency; or
o the equipment notes are sold at a substantial discount below the
principal amount of the equipment notes.
The equipment notes issued under an Indenture may be held in more
than one pass through trust and any pass through trust may hold equipment
notes issued under more than one Indenture. Unless otherwise provided in a
prospectus supplement, a pass through trust may only hold equipment notes
having the same priority of payment. Equipment notes that have the same
priority of payment are referred to as a "class".
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Interest will be passed through to certificateholders of each pass
through trust at the rate payable on the equipment notes held in the pass
through trust, as specified for the pass through trust in the prospectus
supplement.
The pass through certificates represent interests in the related
pass through trust only and all payments and distributions will be made
only from the trust property of the pass through trust. The pass through
certificates do not represent an interest in or obligation of United, the
pass through trustee, any related owner participant, the owner trustee in
its individual capacity or any affiliate of any of them. Each
certificateholder by its acceptance of a pass through certificate agrees to
look solely to the income and proceeds from the trust property of the
related pass through trust as specified in the Pass Through Agreement and
the related series supplement.
The Pass Through Agreement and the Indentures will not contain any
debt covenants or provisions that would give certificateholders protection
in the event of a highly leveraged transaction involving United. However,
the certificateholders of each series will have the benefit of a lien on
the specific aircraft securing the related equipment notes held in the
related pass through trust.
To the extent described in a prospectus supplement, United may
surrender pass through certificates issued by a pass through trust to the
pass through trustee for that pass through trust. In this event, the pass
through trustee will transfer to United an equal principal amount of
equipment notes relating to a particular aircraft designated by United and
will cancel the surrendered pass through certificates.
Denominations, Registration and Transfer
Unless otherwise indicated in a prospectus supplement, distributions
with respect to the pass through certificates will be made, and the
transfer of pass through certificates will be registerable, at the office
or agency to be maintained by the pass through trustee in New York, New
York, and at any other office or agency maintained by the pass through
trustee for this purpose. We will issue pass through certificates in fully
registered form, unless otherwise indicated in a prospectus supplement.
Unless we tell you otherwise in a prospectus supplement, we will issue pass
through certificates denominated in U.S. dollars only in denominations of
$1,000 and integral multiples of $1,000 in excess of $1,000. We will
specify in the prospectus supplement the denominations of any pass through
certificates we issue denominated in a foreign or composite currency.
We will exchange pass through certificates of any series for other
pass through certificates of the same series, principal amount and maturity
date. You may present pass through certificates, other than a global
security, for registration of transfer, with the form of transfer properly
signed, at the office of the registrar or of any transfer agent designated
by the pass through trustee for this purpose for any series of pass through
certificates and referred to in a prospectus supplement. The registrar or
the transfer agent will effect the transfer or exchange when it is
satisfied with the documents of title and identity of the person making the
request. The Pass Through Agreement designates the pass through trustee as
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the registrar. If a prospectus supplement refers to any transfer agent in
addition to the registrar for any series of pass through certificates, the
pass through trustee may at any time rescind the designation of any
transfer agent or approve a change in the location through which any
transfer agent acts. The pass through trustee must maintain a transfer
agent in each place of payment for that series. The pass through trustee
may at any time designate additional transfer agents with respect to any
series of pass through certificates.
No service charge will be made for any registration of transfer or
exchange of the pass through certificates, but the pass through trustee may
require payment of any amount needed to cover any tax or other governmental
charge imposed in connection with the transfer or exchange.
Payments and Paying Agents
Unless otherwise indicated in a prospectus supplement, the pass
through trustee will distribute the amounts on deposit in the applicable
certificate account (1) by check mailed to the address of each
certificateholder of record of that series on the record date with respect
to a regular distribution date as it appears in the register or (2) by wire
transfer to an account maintained by the nominee of the depository.
Unless otherwise indicated in a prospectus supplement, the pass
through trustee will serve as paying agent and the corporate trust office
of the pass through trustee will be designated as the paying agent office
for payments with respect to pass through certificates. We will name in a
prospectus supplement any paying agent outside the United States and any
other paying agent in the United States initially designated by the pass
through trustee for the pass through certificates. The pass through trustee
may at any time designate additional paying agents or rescind the
designation of any paying agent or approve a change in the office through
which any paying agent acts. The pass through trustee will be required to
maintain a paying agent in each place of payment for that series.
The pass through trustee will repay to the appropriate indenture
trustees all moneys held by the pass through trustee for the payment of
distributions that remain unclaimed at the end of two years after the final
distribution date for the pass through certificates. The pass through
trustee will give written notice of the repayment to the related owner
trustees, the owner participants and United.
Book-Entry Securities
Unless we provide otherwise in a prospectus supplement, the pass
through certificates will be represented by one or more fully registered
certificates. These certificates are called "global securities." Each
global security will be deposited with a depository. The depository will
initially be The Depository Trust Company. The global security will be
registered in the name of the depository or its nominee. Except in the
circumstances described in "Certificated Form" below, no certificateholder
will receive a certificated pass through certificate. If the total
principal amount of any issue of pass through certificates exceeds $200
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million, one certificate will be issued for each $200 million of principal
amount and an additional certificate will be issued for any remaining
principal amount of that issue.
The Depository Trust Company or "DTC" is a limited-purpose trust
company organized under the New York Banking Law. It is a "banking
organization" within the meaning of the New York Banking Law, a member of
the Federal Reserve System, a "clearing corporation" within the meaning of
the New York Uniform Commercial Code and a "clearing agency" registered
under the provisions of Section 17A of the 1934 Act. DTC holds securities
that its participants deposit with it. DTC also facilitates the settlement
among participants of securities transactions, such as transfers and
pledges, in deposited securities through electronic computerized book-entry
changes in participants' accounts, which eliminates the need for physical
movement of securities certificates. Direct participants include securities
brokers and dealers, banks, trust companies, clearing corporations and
certain other organizations. A number of DTC's direct participants and the
New York Stock Exchange, Inc., the American Stock Exchange, Inc. and the
National Association of Securities Dealers, Inc. own DTC. Other persons,
such as securities brokers and dealers, banks and trust companies that
clear through or maintain a custodial relationship with a direct
participant, have access to DTC's book-entry system, either directly or
indirectly. These other entities are referred to as "indirect
participants." The rules applicable to DTC and its participants are on file
with the SEC.
Purchases of pass through certificates under the DTC system must be
made by or through direct participants. Direct participants will receive a
credit for the pass through certificates on DTC's records. The ownership
interest of each actual purchaser of each pass through certificate will be
recorded on the direct and indirect participants' records. Each actual
purchaser is referred to as a "beneficial owner." Beneficial owners will
not receive written confirmation from DTC of their purchase, but beneficial
owners are expected to receive written confirmations providing details of
the transaction and periodic statements of their holdings, from the direct
or indirect participant through which the beneficial owner entered into the
transaction. Transfers of ownership interests in the pass through
certificates will be accomplished by entries made on the books of
participants acting on behalf of beneficial owners. Beneficial owners will
not receive certificates representing their ownership interests in pass
through certificates, except if the use of the book-entry system for the
pass through certificates is discontinued. The laws of some states require
that certain purchasers of securities take physical delivery of securities
in definitive form. These limits and laws may impair the ability to
transfer beneficial interests in the global security.
So long as the depository for the global security, or its nominee,
is the registered owner of the global security, it will be considered the
sole owner or holder of the pass through certificates represented by the
global security. Except as provided below, owners of beneficial interests
in pass through certificates represented by the global security will not be
entitled to have pass through certificates represented by the global
security registered in their names, will not receive or be entitled to
receive physical delivery of pass through certificates in definitive form
and will not be considered the owners or holders of the pass through
certificates under the Pass Through Agreement.
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To facilitate subsequent transfers, all pass through certificates
deposited by participants with DTC are registered in the name of DTC's
partnership nominee, Cede & Co. The deposit of pass through certificates
with DTC and their registration in the name of Cede causes no change in the
beneficial ownership of the pass through certificates. DTC has no knowledge
of the actual beneficial owners of the pass through certificates; its
records reflect only the identity of the direct participants to whose
accounts the pass through certificates are credited, which may or may not
be the beneficial owners. The participants will remain responsible for
keeping account of their holdings on behalf of their customers. Conveyance
of notices and other communications by DTC to direct participants, by
direct participants to indirect participants and by direct participants and
indirect participants to beneficial owners will be governed by arrangements
among them. These arrangements are subject to any applicable statutory or
regulatory requirements.
Neither DTC nor Cede will consent or vote with respect to pass
through certificates. Under its usual procedures, DTC mails an omnibus
proxy to the pass through trustee as soon as possible after the record
date. The omnibus proxy assigns Cede & Co.'s consenting or voting rights to
those direct participants to whose accounts the pass through certificates
are credited on the record date. Those direct participants will be
identified in a listing attached to the omnibus proxy.
The pass through trustee or a paying agent, which may also be the
pass through trustee, will make distributions with respect to the pass
through certificates represented by the global security to the depository
as the registered owner of the global security.
We expect that the depository upon receipt of any distribution will
credit direct participants' accounts with payments in amounts proportionate
to their respective beneficial interests in the global security for the
related pass through certificates as shown on the records of the
depository. We also expect that payments by participants to beneficial
owners will be governed by standing instructions and customary practices,
as is now the case with securities held for the accounts of customers in
bearer form or registered in "street name". The participants, and not DTC,
the paying agent, the pass through trustee, the indenture trustee, the
owner trustee or United, will be responsible for payments to the beneficial
owners. The pass through trustee is responsible for the payment of
distributions with respect to the global security to DTC. DTC is
responsible for the disbursement of these payments to direct participants.
The direct and indirect participants are responsible for the disbursement
of these payments to the beneficial owners.
If the depository with respect to a global security is at any time
unwilling or unable to continue as depository and a successor depository is
not appointed within 90 days, the pass through trustee will issue pass
through certificates in certificated form in exchange for the pass through
certificates represented by the global security.
The information in this section concerning the depository and the
depository's book- entry system has been obtained from sources that United
believes to be reliable, but United takes no responsibility for the
accuracy of the information.
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In addition to holding pass through certificates through
participants or indirect participants of DTC in the United States as
described above, you may hold your pass through certificates through
Clearstream or Euroclear in Europe if they are participants of these
systems, or indirectly through organizations which are participants in
these systems.
Clearstream and Euroclear will hold omnibus positions on behalf of
their participants through customers' securities accounts in Clearstream's
and Euroclear's names on the books of their respective depositaries which
in turn will hold these positions in customers' securities accounts in the
depositaries names on the books of DTC.
Transfers between Clearstream participants and Euroclear
participants will occur in accordance with their respective rules and
operating procedures. Cross-market transfers between persons holding
directly or indirectly through DTC, on the one hand, and directly or
indirectly through Clearstream participants or Euroclear participants, on
the other hand, will be effected in DTC in accordance with DTC rules on
behalf of the relevant European international clearing systems by its
depositary. Cross-market transactions will require delivery of instructions
to the relevant European international clearing system by the counterparty
in this system in accordance with its rules and procedures and within its
established deadlines (European time). If the transaction meets its
settlement requirements, the relevant European international clearing
system will deliver instructions to its depositary to take action to effect
final settlement on its behalf by delivering or receiving pass through
certificates in DTC, and making or receiving payment in accordance with
normal procedures for same-day funds settlement applicable to DTC.
Clearstream participants and Euroclear participants may not deliver
instructions directly to the depositaries.
Because of time-zone differences, credits of pass through
certificates received in Clearstream or Euroclear as a result of a
transaction with a DTC participant will be made during subsequent
securities settlement processing and dated the business day following the
DTC settlement date. These credits or any transactions in the pass through
certificates settled during the securities settlement processing will be
reported to the relevant Euroclear or Clearstream participants on the
business day following the DTC settlement date. Cash received in
Clearstream or Euroclear as a result of sales of pass through certificates
by or through a Clearstream participant or a Euroclear participant to a DTC
participant will be received with value on the DTC settlement date but will
be available in the relevant Clearstream or Euroclear cash account only as
of the business day following settlement in DTC.
Clearstream is incorporated under the laws of Luxembourg as a
professional depository. Clearstream holds securities for its participating
organizations and facilitates the clearance and settlement of securities
transactions between Clearstream participants through electronic book-
entry changes in accounts of Clearstream participants, which eliminates the
need for physical movement of certificates. Transactions may be settled in
Clearstream in any of 28 currencies, including United States dollars.
Clearstream provides to Clearstream participants, among other things,
services for safekeeping, administration, clearance and settlement of
internationally traded securities and securities lending and borrowing.
Clearstream interfaces with domestic markets in several countries. As a
professional depository, Clearstream is subject to regulation
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by the Luxembourg Monetary Institute. Clearstream participants are
recognized financial institutions around the world, including underwriters,
securities brokers and dealers, banks, trust companies, clearing
corporations and certain other organizations and may include the
underwriters. Indirect access to Clearstream is also available to others,
such as banks, brokers, dealers and trust companies that clear through or
maintain a custodial relationship with a Clearstream participant, either
directly or indirectly.
Euroclear was created in 1968 to hold securities for participants of
Euroclear and to clear and settle transactions between Euroclear
participants through simultaneous electronic book- entry delivery against
payment, eliminating the need for physical movement of certificates and any
risk from lack of simultaneous transfers of securities and cash.
Transactions may now be settled in any of 29 currencies, including United
States dollars. Euroclear includes various other services, including
securities lending and borrowing and interfaces with domestic markets in
several countries generally similar to the arrangements for cross-market
transfers with DTC described above. Euroclear is operated by the Brussels,
Belgium office of Morgan Guaranty Trust Company of New York (the "Euroclear
Operator"), under contract with Euro-clear Clearance System S.C., a Belgian
cooperative corporation (the "Cooperative"). All operations are conducted
by the Euroclear Operator, and all Euroclear securities clearance accounts
and Euroclear cash accounts are accounts with the Euroclear Operator, not
the Cooperative. The Cooperative establishes policy for Euroclear on behalf
of Euroclear participants. Euroclear participants include banks (including
central banks), securities brokers and dealers and other professional
financial intermediaries and may include the Underwriters. Indirect access
to Euroclear is also available to other firms that clear through or
maintain a custodial relationship with a Euroclear participant, either
directly or indirectly.
The Euroclear Operator is the Belgian branch of a New York banking
corporation which is a member bank of the Federal Reserve System. As such,
it is regulated and examined by the Board of Governors of the Federal
Reserve System and the New York State Banking Department, as well as the
Belgian Banking Commission.
The Terms and Conditions Governing Use of Euroclear and the related
Operating Procedures of the Euroclear System and applicable Belgian law
govern securities clearance accounts and cash accounts with the Euroclear
Operator. These terms and conditions govern transfers of securities and
cash with Euroclear, withdrawals of securities and cash from Euroclear, and
receipts of payments with respect to securities in Euroclear. All
securities in Euroclear are held on a fungible basis without attribution of
specific certificates to specific securities clearance accounts. The
Euroclear Operator acts under the terms and conditions only on behalf of
Euroclear participants, and has no record of or relationship with persons
holding though Euroclear participants.
Distributions with respect to pass through certificates held through
Clearstream or Euroclear will be credited to the cash accounts of
Clearstream participants or Euroclear participants in accordance with the
relevant system's rules and procedures, to the extent received by its
depositary. These distributions will be subject to tax reporting in
accordance with relevant United States tax laws and regulations.
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Clearstream or the Euroclear Operator, as the case may be, will take any
other action permitted to be taken by a certificateholder under the Pass
Through Agreement or any other related document on behalf of a Clearstream
participant or Euroclear participant only in accordance with its relevant
rules and procedures and subject to its depositary's ability to effect
action on its behalf through DTC.
Although DTC, Clearstream and Euroclear have agreed to the foregoing
procedures in order to facilitate transfers of pass through certificates
among participants of DTC, Clearstream and Euroclear, they are under no
obligation to perform or continue to perform these procedures and these
procedures may be discontinued at any time.
Except as required by law, neither United, the pass through trustee
nor the paying agent will have any liability for any aspect of the records
relating to or payments made on account of beneficial ownership interests
of the pass through certificates of any series held by Cede & Co, by
Clearstream or by Euroclear in Europe, or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
Certificated Form. The pass through trustee will issue certificates
in fully registered, certificated form to certificateholders, or their
nominees, rather than to DTC or its nominee, only if DTC advises the pass
through trustee in writing that it is no longer willing or able to
discharge properly its responsibilities as depository with respect to the
pass through certificates and United is unable to locate a qualified
successor or if United, at its option, elects to terminate the book-entry
system through DTC. In this event, the pass through trustee will notify all
certificateholders through DTC participants of the availability of
certificated pass through certificates. Upon surrender by DTC of the
definitive global certificate representing the series of pass through
certificates and receipt of instructions for reregistration, the pass
through trustee will reissue the pass through certificates in certificated
form to certificateholders or their nominees.
Certificates in certificated form will be freely transferable and
exchangeable at the office of the pass through trustee upon compliance with
the requirements set forth in the Pass Through Agreement and the applicable
series supplements.
Payments and Distributions
United will make scheduled payments of interest and principal on the
equipment notes related to owned aircraft to the indenture trustee under
the related Owned Aircraft Indenture. The indenture trustee will distribute
these interest and principal payments to the pass through trustee for each
of the pass through trusts that hold these equipment notes.
Upon commencement of the Lease for any leased aircraft, United will
make scheduled rent payments for each leased aircraft under the related
Lease to the owner trustee. These scheduled rent payments to the indenture
trustee under the applicable Indenture will provide the funds necessary to
make the corresponding payments of principal and interest due from the
owner trustee on the equipment notes issued under the Leased Aircraft
Indenture.
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Subject to the effect of any cross-subordination provisions set
forth in the applicable prospectus supplement, the pass through trustee
will distribute payments of principal, any premium and interest on the
equipment notes held in each pass through trust, upon receipt, to
certificateholders of that pass through trust on the dates and in the
currency specified in the applicable prospectus supplement, except in cases
when some or all of the equipment notes are in default as described in the
applicable prospectus supplement.
Payments of interest and principal on the equipment notes held in
each pass through trust will be scheduled to be received by the pass
through trustee on the dates specified in a prospectus supplement. These
scheduled payments of interest and principal on the equipment notes are
referred to as "scheduled payments." The dates specified for distributions
of scheduled payments to the pass through trustee in a prospectus
supplement are referred to as "regular distribution dates." Subject to the
effect of any cross-subordination provisions described in a prospectus
supplement, for each pass through trust, the pass through trustee will
distribute on each regular distribution date to the related
certificateholders any scheduled payment received by the pass through
trustee on the regular distribution date.
If the pass through trustee does not receive a scheduled payment on
or before a regular distribution date but receives the scheduled payment
within five business days after the regular distribution date, the pass
through trustee will distribute the scheduled payment to the
certificateholders on the date received. The pass through trustee will make
each distribution of a scheduled payment to the certificateholders of
record on the fifteenth day prior to each regular distribution date,
subject to any exceptions specified in a prospectus supplement. Subject to
the effect of any cross-subordination provisions described in the
applicable prospectus supplement, each certificateholder will be entitled
to receive a pro rata share of any distribution. If the pass through
trustee receives a scheduled payment more than five business days after a
regular distribution date, it will be treated as a special payment and will
be distributed as described in the next paragraph.
For any pass through trust, any payments of principal, any premium
or interest, other than scheduled payments, received by the pass through
trustee on any of the equipment notes held in the pass through trust will
be distributed on the special distribution dates specified in a prospectus
supplement. These payments received (1) for the prepayment of the equipment
notes, (2) upon the prepayment by the related owner trustee of the
equipment notes following a default, and (3) on account of the sale of the
equipment notes by the pass through trustee are referred to as "special
payments". Prior to any special payment for a pass through trust, the pass
through trustee will notify the certificateholders of record of that pass
through trust of the special payment and the anticipated special
distribution date. The pass through trustee will make each distribution of
a special payment, other than the final distribution, for any pass through
trust to the certificateholders of record on the fifteenth day prior to the
special distribution date, unless otherwise specified in a prospectus
supplement. Subject to the effect of any cross-subordination provisions set
forth in a prospectus supplement, each certificateholder will be entitled
to receive a pro rata share of any distribution of a special payment.
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If any distribution date is not a business day, distributions
scheduled to be made on that distribution date will be made on the next
business day and, unless otherwise provided in a prospectus supplement,
without additional interest.
Pool Factors
The "pool factor" for any pass through trust will decline in
proportion to the scheduled repayments of principal on the equipment notes
held in a pass through trust as described in a prospectus supplement.
However, if any equipment notes held in a pass through trust have been
prepaid, a scheduled repayment of principal on the equipment notes has not
been made or specified actions have been taken following a default on the
equipment notes, the pool factor and the pool balance of the pass through
trust will be recomputed after giving effect to that event and notice of
the new computation will be mailed to the certificateholders of that pass
through trust. Each pass through trust will have a separate pool factor.
Unless otherwise described in a prospectus supplement, the "pool
balance" for each pass through trust indicates, as of any date, the total
original face amount of the pass through certificates less the total amount
of all payments made in respect of the pass through certificates other than
payments of interest or premium on the pass through certificates or
reimbursement of any costs or expenses incurred in connection with the pass
through certificates. The pool balance for each pass through trust as of
any distribution date will be computed after giving effect to the payment
of principal, if any, on the equipment notes or other trust property held
in that pass through trust and the distribution of principal being made on
that date.
Unless otherwise described in a prospectus supplement, the "pool
factor" for each pass through trust as of any distribution date is the
quotient (rounded to the seventh decimal place) computed by dividing (1)
the pool balance, by (2) the total original face amount of the pass through
certificates of the pass through trust. The pool factor for each pass
through trust as of any distribution date will be computed after giving
effect to the payment of principal, if any, on the equipment notes held in
the pass through trust and the distribution of principal being made on that
date. The pool factor for each pass through trust will initially be
1.0000000; the pool factor for each pass through trust will decline as
described above to reflect reductions in the pool balance of the pass
through trust. For any pass through trust, the amount of any
certificateholder's pro rata share of the pool balance of the pass through
trust can be determined by multiplying the original denomination of the
certificateholder's pass through certificate by the pool factor for the
pass through trust as of the applicable distribution date.
Reports to Certificateholders
On each distribution date for a pass through trust, the pass through
trustee will include with each distribution of a scheduled payment or
special payment to certificateholders of record a statement, giving effect
to the distribution being made on that distribution date. The statement
will provide the following information (per $1,000 in aggregate amount of
pass through certificates for the pass through trust, as to (1) and (2)
below):
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(1) the amount of the distribution allocable to principal and
allocable to premium, if any;
(2) the amount of the distribution allocable to interest; and
(3) the pool balance and the pool factor for that pass through trust.
So long as the pass through certificates of any related pass through
trust are registered in the name of Cede & Co., as nominee for DTC, on the
record date prior to each distribution date, the pass through trustee will
request from DTC a securities position listing that will provide the names
of all DTC participants reflected on DTC's books as holding interests in
the pass through certificates of the related pass through trust on that
record date. On each distribution date, the pass through trustee will mail
to DTC and each participant the statement described above. The pass through
trustee will also make available additional copies as requested by the DTC
participant, to be available for forwarding to certificateholders.
In addition, after the end of each calendar year, the pass through
trustee will prepare and deliver to each certificateholder of each pass
through trust at any time during the preceding calendar year a report
containing the sum of the amounts of principal, any premium and interest
with respect to each pass through trust for that calendar year or, if that
person was a certificateholder during a portion of that calendar year, for
the applicable portion of that calendar year. The pass through trustee will
prepare this report on the basis of information supplied to the pass
through trustee by the DTC participants, and the pass through trustee will
deliver this report to the DTC participants to be available for forwarding
by the DTC participants to certificateholders.
If pass through certificates of a pass through trust are issued in
certificated form, the related pass through trustee will prepare and
deliver the information described above to each certificateholder of record
of the pass through trust as the name of the certificateholder appears on
the records on the registrar for the pass through trust.
Voting of Equipment Notes
Subject to the effect of any cross-subordination and intercreditor
provisions described in a prospectus supplement, the pass through trustee,
as holder of the equipment notes held in each pass through trust, has the
right to vote and give consents and waivers in respect of those equipment
notes under the related Indentures. The Pass Through Agreement describes:
o the circumstances in which the pass through trustee will
direct any action or cast any vote as the holder of the
equipment notes held in the applicable pass through trust at
its own discretion;
o the circumstances in which the pass through trustee will seek
instructions from the certificateholders of that pass through
trust; and
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o if applicable, the percentage of certificateholders required to
direct the pass through trustee to take any action.
Prior to an event of default with respect to any pass through trust,
the principal amount of the equipment notes held in that pass through trust
directing any action or being voted for or against any proposal will be in
proportion to the principal amount of pass through certificates held by the
certificateholders of that pass through trust taking the corresponding
position. If specified in a prospectus supplement, the right of the pass
through trustee to vote and give consents and waivers with respect to the
equipment notes held in the related pass through trust may, in the
circumstances provided in an intercreditor agreement to be executed by the
pass through trustee, be exercisable by another person specified in the
prospectus supplement.
Events of Default and Certain Rights Upon an Event of Default
The Pass Through Agreement defines an event of default for any pass
through trust as the occurrence and continuance of an event of default
under one or more of the related Indentures. What constitutes an event of
default for a particular pass through trust may be varied by the applicable
series supplement to the Pass Through Trust Agreement and described in the
applicable prospectus supplement. The applicable prospectus supplement will
describe the indenture events of default under the indentures for the
leased aircraft and will include events of default under the related
Leases. If any equipment notes are supported by a liquidity facility or
other credit enhancement arrangement, the events of default or indenture
events of default may include events of default under the liquidity
facility or other credit enhancement arrangement.
Because the equipment notes outstanding under an Indenture may be
held in more than one pass through trust, a continuing indenture event of
default under the Indenture would result in an event of default with
respect to each pass through trust. All the equipment notes issued under
the same Indenture will relate to a specific aircraft. There will be no
cross-collateralization or cross-default provisions in the Indentures,
unless otherwise specified in a prospectus supplement. Consequently, unless
otherwise provided in a prospectus supplement, events resulting in an
indenture event of default under any particular Indenture will not
necessarily result in an indenture event of default occurring under any
other Indenture. If an indenture event of default occurs in fewer than all
of the Indentures related to a pass through trust, the equipment notes
issued under the related Indentures with respect to which an indenture
event of default has not occurred will continue to be held in the pass
through trust and the pass through trustee will continue to distribute
payments of principal of, and any premium and interest on, the equipment
notes to the certificateholders of the pass through trust as originally
scheduled, subject to the terms of any intercreditor, subordination or
similar arrangements applicable to that pass through trust.
Under each Indenture relating to a leased aircraft, the related
owner trustee and the owner participant will have the right under some
circumstances to cure an indenture event of default that results from the
occurrence of a lease event of default under the related Lease. If the
owner trustee or the owner participant chooses to exercise its cure right,
the indenture event of default and consequently the event of default under
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any pass through trust holding the related equipment notes will be deemed
to be cured. The prospectus supplement will contain a more detailed
discussion of the rights to cure defaults and the effects of the exercise
of those rights. Unless otherwise provided in a prospectus supplement, in
the case of any pass through certificates or equipment notes entitled to
the benefits of a liquidity facility or similar arrangement, a drawing
under any liquidity facility or arrangement for the purpose of making a
payment of interest as a result of the failure by United to have made a
corresponding payment will not cure an indenture event of default related
to the failure by United.
The ability of the certificateholders of any one pass through trust
to cause the indenture trustee for any equipment notes held in the pass
through trust to accelerate the payment on the equipment notes under the
related Indenture or to direct the exercise of remedies by the indenture
trustee under the related Indenture will depend, in part, upon the
proportion of the total principal amount of the equipment notes outstanding
under the Indenture and held in the pass through trust to the total
principal amount of all equipment notes outstanding under that Indenture.
In addition, if cross-subordination provisions are applicable to the pass
through certificates, the ability of the certificateholders of any one pass
through trust holding equipment notes issued under related Indentures to
cause the indenture trustee to accelerate the equipment notes or to direct
the exercise of remedies by the indenture trustee under the related
Indenture will depend, in part, on the relative ranking of priority of
equipment notes held in the pass through trust.
Each pass through trust will hold equipment notes with different
terms from those of the equipment notes held in any other pass through
trust. Therefore, the certificateholders of a pass through trust may have
divergent or conflicting interests from those of the certificateholders of
the other pass through trusts holding equipment notes relating to the same
Indenture. In addition, so long as the same institution or an affiliate of
that institution acts as pass through trustee of one or more pass through
trusts holding equipment notes issued under that Indenture, in the absence
of instructions from the certificateholders of any pass through trust, the
pass through trustee for that pass through trust could be faced with a
potential conflict of interest upon an indenture event of default. In that
event, we expect that the pass through trustee would resign as pass through
trustee of one or all of the affected pass through trusts, and a successor
pass through trustee would be appointed.
The prospectus supplement for a series of pass through certificates
will specify whether and under what circumstances the pass through trustee
may or will sell for cash to any person all or part of the equipment notes
held in the related pass through trust. A person other than the pass
through trustee may exercise the right to make a sale if the applicable
series of pass through certificates are subject to any intercreditor,
subordination or similar arrangements, and the proceeds or any sale will be
distributed as prescribed by those arrangements. Any proceeds received by
the pass through trustee upon any sale that are distributable to the
certificateholders of a particular pass through trust will be deposited in
an account established by the pass through trustee for the benefit of the
certificateholders of that pass through trust and will be distributed to
the certificateholders of that pass through trust on a special distribution
date. The market for equipment notes in default may be very limited and
thus, it may not be possible to sell them for a reasonable price.
Furthermore, if the same institution acts as pass through trustee of
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multiple pass through trusts, it may be faced with a conflict in deciding
from which pass through trust to sell equipment notes to available buyers.
If the pass through trustee sells any equipment notes with respect to which
an indenture event of default exists for less than their outstanding
principal amount, the certificateholders of the pass through trust will
receive a smaller amount of principal distributions than anticipated and
will not have any claim for the shortfall against United, the pass through
trustee or any other person, including, in the case of any leased aircraft,
the related owner trustee or owner participant. Neither the pass through
trustee nor the certificateholders of that pass through trust could take
any action with respect to any remaining equipment notes held in that pass
through trust as long as no indenture event of default existed with respect
to the remaining equipment notes.
For any pass through trust, the pass through trustee will deposit
into the special payments account for that pass through trust any amount
distributed to the pass through trustee by the indenture trustee under any
Indenture on account of the equipment notes held in that pass through trust
following an indenture event of default under the Indenture and the pass
through trustee will distribute that amount to the certificateholders of
that pass through trust on a special distribution date. In addition, if an
Indenture provides that the applicable owner trustee or owner participant
may, under circumstances specified in the Indenture, redeem or purchase
some or all of the outstanding equipment notes issued under that Indenture,
the pass through trustee will deposit in the special payments account for
that pass through trust the price paid by the owner trustee or owner
participant to the pass through trustee for any of the equipment notes
issued under that Indenture and held in that pass through trust. The pass
through trustee will distribute the price paid to the certificateholders of
that pass through trust on a special distribution date. Any funds held by
the pass through trustee in the special payments account for that pass
through trust will, to the extent practicable, be invested by the pass
through trustee in permitted investments pending the distribution of these
funds on a special distribution date. The applicable prospectus supplement
will describe these permitted investments.
The Pass Through Agreement provides that the pass through trustee
will, within 90 days after the occurrence of a default under any pass
through trust, notify the certificateholders of the pass through trust by
mail of all uncured or unwaived defaults with respect to the pass through
trust known to it. However, the pass through trustee will be protected in
withholding such notice if it in good faith determines that the withholding
of such notice is in the interests of the certificateholders, except in the
case of default in the payment of principal of, or any premium or interest
on, any of the equipment notes held in the pass through trust. The term
"default" means the occurrence of any event of default with respect to a
pass through trust, except that in determining whether an event of default
has occurred any grace period or notice in connection with that event of
default will be disregarded.
The Pass Through Agreement provides that for each pass through
trust, subject to the duty of the pass through trustee during a default to
act with the required standard of care, the pass through trustee is
entitled to be indemnified by the certificateholders of the pass through
trust before proceeding to exercise any right or power under the pass
through trust or any intercreditor agreement at the request of the
certificateholders.
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The applicable prospectus supplement will specify the percentage of
certificateholders entitled to waive, or to instruct the pass through
trustee to waive, any past default or event of default with respect to that
pass through trust and its consequences. The prospectus supplement will
also specify the percentage of certificateholders of that pass through
trust, or of any other pass through trust holding equipment notes issued
under related Indentures, entitled to waive, or to instruct the pass
through trustee or the indenture trustee to waive, any past indenture event
of default under any related Indenture and annul any direction given with
respect to that indenture event of default.
Subject to any intercreditor agreement, in some cases, the
certificateholders of a majority of the total fractional undivided
interests in a pass through trust (a) may on behalf of all
certificateholders of that pass through trust or (b) if the pass through
trustee is the controlling party under an intercreditor agreement, may
direct the pass through trustee to instruct the applicable indenture
trustee to, waive any past default with respect to that pass through trust
and annul any direction given by the certificateholders to the pass through
trustee or the indenture trustee with respect to the default. However,
subject to any intercreditor agreement, all of the certificateholders of
that pass through trust must consent in order to waive (1) a default in
payment of the principal of, or any premium or interest on, any of the
equipment notes held in the pass through trust and (2) a default in respect
of any covenant or provision of the Pass Through Agreement or the related
series supplement that cannot be modified or amended without the consent of
each certificateholder of the pass through trust affected by the waiver.
Any waiver will be effective to waive any past default if, but only if, the
correlative indenture event of default has been waived under the related
Indenture by the requisite holders of the equipment notes outstanding under
the Indenture.
Modifications of the Pass Through Agreement
The Pass Through Agreement contains provisions permitting United and
the pass through trustee to enter into a supplement to the pass through
trust agreement or any note purchase agreement or any intercreditor,
subordination or similar agreement or liquidity facility, without the
consent of the certificateholders of the pass through trust, to:
(1) provide for the formation of any pass through trust and the
issuance of the related pass through certificates;
(2) evidence the succession of another corporation to United and
the assumption by that corporation of United's obligations
under the Pass Through Agreement, the series supplement, any
note purchase agreement and any intercreditor, subordination
or similar agreement or liquidity facility;
(3) add to the covenants of United for the benefit of the related
certificateholders;
(4) surrender any right or power conferred upon United in the
Pass Through Agreement or any series supplement, any note
purchase agreement or any intercreditor, subordination or
similar agreement or liquidity facility;
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(5) cure any ambiguity or correct or supplement any defective or
inconsistent provision of the Pass Through Agreement or a
series supplement, any note purchase agreement, any
intercreditor agreement or any liquidity facility or make or
modify any other provisions in regard to matters or questions
arising thereunder that will not adversely affect the
interests of the related certificateholders;
(6) correct or supplement the description of property that
constitutes trust property or the conveyance of the property
to the pass through trustee;
(7) evidence and provide for a successor pass through trustee for
some or all of the pass through trusts or add to or change
any provision of the Pass Through Agreement or any series
supplement, any note purchase agreement, any intercreditor,
subordination or like agreement or liquidity facility as
necessary to facilitate the administration of the pass
through trusts under those agreements by more than one pass
through trustee;
(8) comply with any requirement of the SEC, any applicable law,
rules or regulations of any exchange or quotation system on
which any pass through certificates may be listed or of any
regulatory body;
(9) modify, eliminate or add to the provisions of the Pass
Through Agreement or any series supplement to the extent
necessary to continue to qualify the Pass Through Agreement
or the series supplement, any note purchase agreement, any
intercreditor, subordination or similar agreement or
liquidity facility under the Trust Indenture Act of 1939, as
amended, or any similar federal statute and add to the pass
through agreement or the series supplement, any note purchase
agreement, any intercreditor, subordination or similar
agreement or liquidity facility other provisions as may be
expressly permitted by the Trust Indenture Act;
(10) provide information to the pass through trustee as required in
the Pass Through Agreement;
(11) add to or change the Pass Through Agreement and any series
supplement to facilitate the issuance of any pass through
certificates in bearer form or to facilitate or provide for
the issuance of any pass through certificates in global form
in addition to or in place of pass through certificates in
certificated form;
(12) provide for the delivery of pass through certificates or any
supplement to the Pass Through Agreement in or by means of
any computerized, electronic or other medium, including
computer diskette;
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(13) modify, eliminate or add to the provisions of the Pass
Through Agreement or any applicable series supplement to
reflect the substitution of a replacement aircraft for any
aircraft;
(14) make any other amendments or modifications which will only
apply to any pass through trust established thereafter; and
(15) modify any provision under the Pass Through Agreement that
will not adversely affect the interests of the
certificateholders.
No modification may cause the pass through trust to fail to qualify as a
"grantor trust" for federal income tax purposes.
The Pass Through Agreement also provides that United and the pass
through trustee, with the consent of the certificateholders evidencing
fractional undivided interests together representing not less than a
majority in interest of the affected pass through trust, may execute
supplemental agreements adding any provisions to or changing or eliminating
any of the provisions of the Pass Through Agreement, to the extent relating
to the pass through trust, and the applicable series supplement, any note
purchase agreement, any intercreditor, subordination or similar agreement
or any liquidity facility or modifying the rights of the
certificateholders. No supplemental agreement may, however, without the
consent of each affected certificateholder:
(1) reduce the amount of, or delay the timing of, any payments on
the equipment notes held in the pass through trust, or
distributions in respect of any pass through certificate of
the pass through trust;
(2) change the date or place of payment or change the currency in
which the pass through certificates are payable other than
that provided for in the pass through certificates;
(3) impair the right of any certificateholder to take legal action
for the enforcement of any payment when due;
(4) permit the disposition of any equipment note included in the
trust property, except as provided in the Pass Through
Agreement or a series supplement, any note purchase
agreement, any intercreditor, subordination or similar
agreement or liquidity facility;
(5) alter the priority of distributions specified in any relevant
intercreditor agreement in a manner materially adverse to the
holders of the pass through certificates of that series; or
(6) reduce the percentage of the total fractional undivided
interests of the pass through trust that must consent to
approve any supplemental agreement or to waive compliance with
the Pass Through Agreement or to waive events of default.
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Modification, Consents and Waivers Under the Indenture and Related Agreements
The prospectus supplement will specify the pass through trustee's
obligations if the pass through trustee, as the holder of any equipment
notes held in a pass through trust, receives a request for its consent to
any amendment or modification of or waiver under the Indenture or other
documents relating to the equipment notes, including any Lease.
Cross-Subordination Issues
The equipment notes issued under an Indenture may be held in more
than one pass through trust and a pass through trust may hold equipment
notes issued under more than one related Indenture. Unless otherwise
provided in a prospectus supplement, only equipment notes of the same class
may be held in the same pass through trust. A pass through trust that holds
equipment notes that are junior in priority of payment to the equipment
notes held in another pass through trust formed as part of the same
offering of pass through certificates as a practical matter are
subordinated to the other pass through trust. In addition, the pass through
trustees on behalf of one or more pass through trusts may enter into an
intercreditor or subordination agreement that establishes priorities among
series of pass through certificates or provides that distributions on the
pass through certificates will be made to the certificateholders of a
particular pass through trust before they are made to the
certificateholders of one or more other trusts. For example, an agreement
may provide that payments made to a pass through trust on account of a
subordinate class of equipment notes issued under one Indenture may be
subordinated to the prior payment of all amounts owing to
certificateholders of a pass through trust that holds senior equipment
notes issued under that Indenture or any related Indentures.
A prospectus supplement related to an issuance of pass through
certificates will describe any intercreditor agreement and the
cross-subordination provisions and any related terms, including the
percentage of certificateholders under any pass through trust which are
permitted to (1) grant waivers of defaults under any related Indenture, (2)
consent to the amendment or modification of any related Indentures or (3)
direct the exercise of remedial actions under any related Indentures.
Termination of Pass Through Trusts
The obligations of United and the pass through trustee with respect
to a pass through trust will terminate upon the distribution to the
certificateholders of that pass through trust of all amounts required to be
distributed to them under the Pass Through Agreement and the series
supplement and the disposition of all property held in the pass through
trust. The pass through trustee will notify each certificateholder of
record of the pass through trust by mail of the termination of the pass
through trust, the amount of the proposed final payment and the proposed
date for the distribution of the final payment for the pass through trust.
The final distribution for each certificateholder of the pass through trust
will be made only upon surrender of that certificateholder's pass through
certificates at the office or agency of the pass through trustee specified
in the termination notice.
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Delayed Purchase
If, on the date of issuance of any pass through certificates, all of
the proceeds from the sale of the pass through certificates are not used to
purchase the equipment notes contemplated to be held in the related pass
through trust, the equipment notes may be purchased by the pass through
trustee at any time on or prior to the cut-off date specified in the
prospectus supplement related to the pass through certificates.
In this event, the pass through trustee will hold the proceeds from
the sale of the pass through certificates not used to purchase equipment
notes under an arrangement described in the applicable prospectus
supplement. This arrangement may include:
(1) the investment of the proceeds by the pass through trustee in
specified permitted investments;
(2) the deposit of the proceeds in a deposit or escrow account held
by a separate depositary or escrow agent; or
(3) the purchase by the pass through trustee of debt instruments
issued on an interim basis by United, which may be secured by
a collateral account or other security or property described
in the applicable prospectus supplement.
The applicable prospectus supplement will describe the arrangements
with respect to the payment of interest on funds so held. If any proceeds
are not subsequently utilized to purchase equipment notes by the date
specified in the applicable prospectus supplement, including by reason of a
casualty to one or more aircraft, the proceeds will be returned to the
holders of the related pass through certificates.
Merger, Consolidation and Transfer of Assets
United may not consolidate with or merge into any other corporation
or transfer all or substantially all of its assets as an entirety to any
other corporation, unless, among other things, United is the surviving
corporation or the successor or transferee corporation expressly assumes
all the obligations of United under the Pass Through Agreement.
Liquidity Facility
A prospectus supplement may provide that one or more payments of
interest on the pass through certificates of one or more series will be
supported by a liquidity facility issued by an institution identified in
the prospectus supplement. The provider of the liquidity facility may have
a claim senior to the certificateholders' as specified in the prospectus
supplement.
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The Pass Through Trustee; the Indenture Trustee
We will name the pass through trustee for each of the pass through
trusts in a prospectus supplement. The pass through trustee and any of its
affiliates may hold pass through certificates in their own names. The pass
through trustee may act as trustee under other financings by United.
The pass through trustee may resign as trustee under any or all of
the pass through trusts at any time. United may remove the pass through
trustee and appoint a successor trustee, or any certificateholder of the
pass through trust holding pass through certificates for at least six
months may, on behalf of that certificateholder and all others similarly
situated, petition any court of competent jurisdiction for the removal of
the pass through trustee and the appointment of a successor trustee, if the
pass through trustee:
(1) fails to comply with Section 310 of the Trust Indenture Act,
after written request for compliance by United or any pass
through certificateholder of the pass through trust holding
pass through certificates for at least six months;
(2) ceases to be eligible to continue as pass through trustee;
(3) becomes incapable of acting as pass through trustee, or
(4) is adjudged bankrupt or insolvent.
In addition, the certificateholders holding more than 50% in total
amount of the related pass through certificates may remove the pass through
trustee of any pass through trust at any time.
Unless otherwise provided in the prospectus supplement, in the case
of the resignation or removal of the pass through trustee, United or the
certificateholders holding more than 50% in total amount of the related
pass through certificates may appoint a successor pass through trustee. The
resignation or removal of the pass through trustee for any pass through
trust and the appointment of the successor trustee for the pass through
trust does not become effective until acceptance of the appointment by the
successor trustee. Under the resignation and successor trustee provisions,
it is possible that a different trustee could be appointed to act as the
successor trustee with respect to each pass through trust. All references
in this prospectus to the pass through trustee are to the pass through
trustee acting in that capacity under each of the pass through trusts and
should be read to take into account the possibility that each of the pass
through trusts could have a different successor trustee in the event of a
resignation or removal.
The pass through agreement provides that United will pay, or cause
to be paid, the pass through trustee's fees and expenses and indemnify the
pass through trustee against specified liabilities described in the
prospectus supplement.
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DESCRIPTION OF THE EQUIPMENT NOTES
The discussion that follows is a summary that is not complete and
does not describe every aspect of the equipment notes. Where no distinction
is made between the equipment notes relating to leased aircraft and owned
aircraft or between their respective Indentures, the summary applies to any
equipment note and any Indenture. The prospectus supplement will describe
most of the financial terms and other specific terms of any series of
equipment notes. Because the terms of the specific equipment notes may
differ from the general information provided below, you should rely on the
information in the prospectus supplement instead of the information in this
prospectus if the information in the prospectus supplement is different
from the information below. The applicable prospectus supplement will
describe the specific terms of the equipment notes, the Indentures, the
Participation Agreements, the Leases, if any, and any other agreements,
relating to any particular offering of pass through certificates.
For each owned aircraft, United will issue equipment notes as direct
obligations of United and the indenture trustee will authenticate the
equipment notes under an owned aircraft Indenture. Unless otherwise
specified in a prospectus supplement, all of the equipment notes issued
under the same owned aircraft indenture will relate to a specific owned
aircraft and will not be secured by any other aircraft. The prospectus
supplement will identify the owned aircraft relating to each Owned Aircraft
Indenture and the related equipment notes. United will be directly
obligated under each Owned Aircraft Indenture to make payments of principal
of, and any premium and interest on, the related equipment notes.
For each leased aircraft, the owner trustee will issue equipment
notes as nonrecourse obligations of the owner trustee, in each case acting
for a separate owner trust for the benefit of an owner participant, and the
indenture trustee will authenticate the equipment notes under a Leased
Aircraft Indenture. All of the equipment notes issued under the same Leased
Aircraft Indenture will relate to and will be secured by a specific leased
aircraft and will not be secured by any other aircraft. In each case, the
owner trustee will lease the leased aircraft to United under a separate
Lease between the owner trustee and United.
Upon the commencement of the Lease for any leased aircraft, United
will be obligated to make rent payments under the Lease that will be
sufficient to pay the principal of, and accrued interest on, the related
equipment notes when and as due and payable. The equipment notes related to
leased aircraft will not, however, be obligations of, or guaranteed by,
United. United's obligations to pay rent and to cause other payments to be
made under each Lease will be general obligations of United.
For any owned aircraft, if specified in a prospectus supplement,
United may arrange for an owner trustee, acting for an owner trust for the
benefit of an owner participant, to purchase the owned aircraft from us and
lease the aircraft back to us under a "net lease," after the sale of the
related equipment notes to the pass through trustee for each applicable
pass through trust and the offering and sale of the related pass through
certificates under the prospectus supplement. In addition, if specified in
the prospectus supplement, United may substitute other aircraft, cash
and/or U.S. government securities in place of the owned aircraft securing
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the related equipment notes. The prospectus supplement will describe terms
and conditions of any sale and leaseback transaction or substitution.
Equipment notes may be issued under delayed aircraft financing
arrangements, such as the following:
o the owner trustee may issue equipment notes prior to the purchase of
leased aircraft by the owner trustee or the commencement of the
related Leases.
o United may issue equipment notes prior to the expected delivery date
of the owned aircraft.
The applicable prospectus supplement will describe any delayed
aircraft financing arrangements, including any arrangements for the
collateralization of the related equipment notes with cash, permitted
investments or other property, and any depositary or escrow arrangement
under which the proceeds from the sale of the equipment notes will be
deposited with a third party depositary or escrow agent.
If the anticipated aircraft financing transactions have not been
completed by the date specified in the applicable prospectus supplement,
including if due to a casualty to one or more aircraft, the related
equipment notes will be prepaid at the price specified in the prospectus
supplement. Alternatively, if the Lease related to any equipment notes has
not commenced by the date specified in the prospectus supplement and if the
prospectus supplement so permits, United at its option may convert the
proposed leveraged lease financing into an owned aircraft financing and the
equipment notes, with some modifications, will become equipment notes
issued by United.
The applicable prospectus supplement will describe any refinancing
arrangements with respect to any aircraft, including whether a separate
trust will be created to issue notes.
Principal and Interest Payments
The pass through trustee will pass through interest received by the
pass through trustee on the equipment notes constituting trust property of
each pass through trust to the certificateholders of that pass through
trust on a pro rata basis on the dates and at the rate indicated in a
prospectus supplement. The equipment notes may bear interest at a fixed or
a floating rate or may be issued at a discount.
Each pass through trust will hold equipment notes on which principal
is payable in scheduled amounts and on specified dates as indicated in a
prospectus supplement. The pass through trustee will pass through principal
received by the pass through trustee on the equipment notes to the
certificateholders of the related pass through trust as specified in the
prospectus supplement.
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If any date scheduled for any payment of principal of, or any
premium or interest on, the equipment notes is not a business day, that
payment will be made on the next succeeding business day without any
additional interest, unless otherwise provided in the applicable prospectus
supplement.
Prepayment
A prospectus supplement will describe the circumstances, whether
voluntary or involuntary, under which the related equipment notes may or
must be prepaid, in whole or in part, prior to the stated maturity date of
the equipment notes, any premium applicable upon some prepayments and other
terms applying to the prepayment of the equipment notes.
Security
The equipment notes related to leased aircraft issued under each
Leased Aircraft Indenture will be secured by:
(1) an assignment by the related owner trustee to the indenture
trustee of the owner trustee's rights, except for the limited
rights described below and in the prospectus supplement,
under the applicable Lease, including the right to receive
rent and other payments; and
(2) a security interest granted to the indenture trustee in the
related leased aircraft, subject to the rights of United
under the Lease and other property or rights, if any,
described in the applicable prospectus supplement.
The assignment by the owner trustee to the indenture trustee of its
rights under each Lease will exclude rights of the owner trustee and the
related owner participant relating to:
(1) indemnification by United;
(2) proceeds of public liability insurance payable to the owner
trustee in its individual capacity and to the owner
participant under insurance maintained by United under the
Lease;
(3) proceeds of any insurance policies separately maintained by the
owner trustee in its individual capacity or by the owner
participant;
(4) proceeds of any insurance policies maintained by United that are
not required to be maintained under the Lease; and
(5) any rights of the owner trustee or owner participant to
enforce payment of the amounts listed in clauses (1) through
(4) above.
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The prospectus supplement will describe any limitations on the right
of the indenture trustee to exercise any of the rights of the owner trustee
under the related Lease, except the right to receive payments of rent due.
United's obligations in respect of each leased aircraft will be
those of a lessee under a "net lease." Accordingly, United will be
obligated, among other things, to pay all costs of operating and
maintaining the aircraft.
The prospectus supplement will describe the required insurance
coverage for the aircraft.
The equipment notes issued under each owned aircraft indenture will
be secured by a security interest granted to the indenture trustee in all
of United's right, title and interest in and to the related owned aircraft.
Each Owned Aircraft Indenture will require United to pay all costs of
operating and maintaining the aircraft.
Unless otherwise specified in a prospectus supplement, there will be no
cross-collateralization provisions in the Indentures. As a result, unless
otherwise specified in the prospectus supplement, the equipment notes
issued in respect of one of the aircraft will not be secured by any other
aircraft and, in the case of equipment notes related to leased aircraft,
the related Leases. Unless otherwise specified in a prospectus supplement,
there will be no cross-default provisions in the Indentures. As a result,
unless so specified, events resulting in an event of default under any
particular Indenture may not result in an event of default occurring under
any other Indenture.
Section 1110 of the U.S. Bankruptcy Code provides that the right of
lessors, conditional vendors and holders of security interests with respect
to aircraft capable of carrying ten or more individuals or 6,000 pounds or
more of cargo used by air carriers operating under certificates issued by
the Secretary of Transportation under Chapter 447 of the Transportation
Code to take possession of the aircraft in compliance with the provisions
of the lease, conditional sale contract or security agreement, as the case
may be, is not affected by any other provision of Chapter 11 of the
Bankruptcy Code or any power of the bankruptcy court.
Section 1110 provides, however, that the right of a lessor,
conditional vendor or holder of a security interest to take possession of
an aircraft in the event of a default may not be exercised for 60 days
following the date of commencement of the reorganization proceedings unless
specifically permitted by the bankruptcy court. These rights to take
possession may not be exercised at all if, within the 60-day period, the
trustee in reorganization or the debtor-in-possession agrees to perform the
debtor's obligations that become due on or after that date and cures all
existing defaults (other than defaults that are a breach of a provision
relating to the financial condition, bankruptcy, insolvency or
reorganization of the debtor). The prospectus supplement for each offering
will discuss the availability of the benefits of Section 1110 of the
Bankruptcy Code with respect to the related aircraft.
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The indenture trustee will invest and reinvest funds, if any, held
from time to time by the indenture trustee with respect to any aircraft,
including funds held as the result of an event of loss to the aircraft or
termination of the Lease, at the direction of United, except, with respect
to a leased aircraft, in the case of a lease event of default under the
applicable Lease or, with respect to an owned aircraft, in the case of an
indenture event of default under the applicable Indenture, in investments
described in the related Indenture. United will pay the amount of any net
loss resulting from any investment directed by it.
Additional Notes
The applicable prospectus supplement specifies any circumstances and
conditions under which United or the owner trustee may finance
modifications, alterations, additions, improvements to, or replacement
parts for, an aircraft through the issuance and sale of additional
equipment notes. A supplement to the related Indenture will establish the
terms, conditions and designations of any additional equipment notes.
Registration of the Aircraft
Unless otherwise specified in a prospectus supplement, United,
except under specified circumstances, must register and keep each aircraft
registered under Title 49 of the United States Code (the "Transportation
Code"), in the name of United, in the case of an owned aircraft, or in the
name of the owner trustee, after commencement of a Lease in the case of a
leased aircraft. United must also record and maintain the recordation of
the Indenture and the Lease, if any, relating to each aircraft under the
Transportation Code. This recordation of the Indenture and the Lease, if
any, relating to each aircraft will give the indenture trustee a security
interest in each aircraft perfected under the Transportation Code, which
perfected security interest will, with limited exceptions, be recognized in
those jurisdictions that have ratified the Convention on the International
Recognition of Rights in Aircraft (the "Convention").
United may, in specified circumstances, register any aircraft in
countries other than the United States. Each aircraft may be operated by
United, or placed under lease, sublease or interchange arrangements with
carriers domiciled outside of the United States. If an indenture event of
default occurs, the ability of the indenture trustee to realize on its
security interest in the aircraft could be adversely affected as a legal or
practical matter if the aircraft were located outside the United States.
There is no guarantee that, even if that jurisdiction is a party to the
Convention, as a practical matter, the indenture trustee would be able to
realize upon its security interest if an indenture event of default occurs.
Payments and Limitations of Liability
For each leased aircraft, the related owner trustee will lease the
leased aircraft to United for a term expiring on a date not earlier than
the latest maturity date of the equipment notes issued with respect to that
leased aircraft, unless the Lease is previously terminated as permitted by
the terms of the Lease. The owner trustee under the related Indenture will
assign to the indenture trustee the basic rent and other specified payments
of United under each Lease to provide the funds necessary to pay principal
of and interest due from the owner trustee on the equipment notes issued
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under that Indenture. Each Lease will provide that under no circumstances
will basic rent payments by United be less than the scheduled payments of
principal and interest on the related equipment notes.
Except when United purchases a leased aircraft and assumes the
equipment notes related to that leased aircraft, the equipment notes
related to leased aircraft will not be obligations of, or guaranteed by,
United. Neither the owner trustee nor the indenture trustee, in their
individual capacities, will be liable to any certificateholder or, in the
case of the owner trustee, in its individual capacity, to United or the
indenture trustee for any amounts payable or for any liability under the
equipment notes or the Indentures, except as provided in the Indentures and
the Participation Agreements and except for the gross negligence or willful
misconduct of the owner trustee. Except when United has assumed any
equipment notes related to a leased aircraft, all amounts payable under the
equipment notes related to leased aircraft, other than payments made in
connection with an optional redemption or purchase of equipment notes by
the related owner trustee or the related owner participant, will be made
only from the assets subject to the lien of the Indenture. These assets
include rent payable by United under the Lease with respect to that leased
aircraft and amounts received under any applicable liquidity facility or
similar arrangement.
Defeasance of the Indentures and the Equipment Notes
Unless otherwise specified in the applicable prospectus supplement,
the obligations under the applicable Indenture of the related owner trustee
or United will be discharged on the date that the owner trustee or United,
as the case may be, deposits with the related indenture trustee a
sufficient amount of money or U.S. government obligations to make all
required payments on the related equipment notes when those payments are
due. The due dates may include one or more redemption dates. All payments
must be made in accordance with the terms of the equipment notes. The owner
trustee or United, as applicable, will remain obligated to register the
transfer or exchange of equipment notes, to replace stolen, lost, destroyed
or mutilated equipment notes, to maintain paying agencies and hold money
for payment in trust. A discharge may occur only if the Internal Revenue
Service has published a ruling stating that holders of the equipment notes
will not recognize income, gain or loss for federal income tax purposes as
a result of the deposit, defeasance and discharge and will be subject to
federal income tax on the same amounts and in the same manner and at the
same times as would have been the case if the deposit, defeasance and
discharge had not occurred.
The holders of equipment notes will have no beneficial interest in
or other rights with respect to the related aircraft or other assets
subject to the lien of the related Indenture and this lien will terminate:
(1) upon defeasance;
(2) upon payment in full of the principal of, and any premium and
interest on, all equipment notes issued under the Indenture
on the maturity date; or
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(3) upon deposit with the indenture trustee of money sufficient
to pay when due payments of principal of, and any premium and
interest on, the equipment notes, no earlier than one year
before the maturity date.
Assumption of Obligations by United
If specified in the applicable prospectus supplement with respect to
any leased aircraft, United may purchase the leased aircraft before the end
of the term of the related Lease. In connection with this purchase, United
may assume on a full recourse basis all of the obligations of the owner
trustee, other than its obligations in its individual capacity, under the
Indenture with respect to the aircraft, including the obligations to make
payments in respect of the related equipment notes. In this event,
specified provisions of the related Lease, including provisions relating to
maintenance, possession and use of the aircraft, liens, insurance and
events of default will be deemed to be incorporated into the Indenture. The
equipment notes issued under the Indenture will continue to be outstanding
and secured by the aircraft. The applicable prospectus supplement will
describe the terms and conditions of any assumption.
Owner Participant; Revisions to Agreements
If specified in the applicable prospectus supplement, at the time
pass through certificates are issued, United may still be seeking owner
participants for the owner trusts relating to an aircraft. United or an
affiliate will hold the beneficial interest under the owner trust agreement
relating to this aircraft until the date on which a prospective owner
participant commits to participate in the purchase price of the aircraft.
The applicable prospectus supplement will specify any deadline to obtain
the commitment of an owner participant. United or its affiliates will
transfer to the owner participant on that date United's or the affiliate's
beneficial interest under the owner trust agreement. Prospective owner
participants may request revisions to the participation agreement, Lease,
trust agreement and Indenture so that the terms of the agreements
applicable to these aircraft may differ from the description of the
agreements contained in the applicable prospectus supplement. The
prospectus supplement will describe the extent to which any terms can be
changed at the request of prospective owner participants.
Indenture Events of Default and Remedies
For any pass through trust, a prospectus supplement will describe
the indenture events of default under the Indentures related to the
equipment notes to be held by the pass through trust, the remedies that the
indenture trustee may exercise with respect to the related aircraft, either
at its own initiative or upon instruction from holders of the related
equipment notes, and other provisions relating to the occurrence of an
indenture event of default and the exercise of remedies.
Liquidity Facility
The applicable prospectus supplement may provide that a "liquidity
facility" will support payments of principal, any premium or interest on,
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the equipment notes of one or more series, or distributions in respect of
the pass through certificates of one or more series. A liquidity facility
may include a letter of credit, a revolving credit agreement, an insurance
policy, surety bond or financial guaranty, or any other type of agreement
or arrangement for the provision of liquidity support. The applicable
prospectus supplement will identify the institution or institutions
providing any liquidity facility. Unless otherwise provided in the
applicable prospectus supplement, the provider of any liquidity facility
will have a senior claim on the assets securing the affected equipment
notes and on the trust property of the affected pass through trusts.
Intercreditor Issues
Equipment notes may be issued in different classes, which means that
the equipment notes may have different payment priorities even though
issued by the same owner trustee and relate to the same aircraft. In this
event, the applicable prospectus supplement will describe the priority of
distributions among the equipment notes and any liquidity facilities, the
ability of any class to exercise and enforce any or all remedies with
respect to the related aircraft and, if the equipment notes are related to
leased aircraft, the Lease, and other intercreditor terms and provisions.
MATERIAL FEDERAL INCOME TAX CONSEQUENCES
The following discussion of the material United States federal
income tax consequences of the purchase, ownership and disposition of the
pass through certificates is directed to initial purchasers of the pass
through certificates at the "issue price" who hold the pass through
certificates as a capital asset. This discussion is based on current
provisions of the Internal Revenue Code of 1986, as amended, called the
"Code", proposed, temporary and final Treasury regulations under the Code,
and published rulings and court decisions, in effect as of the date of this
prospectus. Changes to existing tax laws, regulations, rulings and court
decisions, which could have retroactive effect, may alter the consequences
described below. This discussion does not address federal income tax
consequences applicable to investors that are subject to special treatment
under the United States federal income tax laws, including banks and
thrifts, life insurance companies, regulated investment companies, dealers
in securities, holders that will hold the pass through certificates as a
position in a "straddle" for tax purposes or as part of a "synthetic
security" or "conversion transaction" or other integrated investment
compromised of the certificates and one or more other investments, foreign
investors, trusts or estates and pass- through entities with any of these
specified investors as equity holders. You should read this discussion in
conjunction with any additional discussion of federal income tax
consequences and additional opinions included in the applicable prospectus
supplement. You should consult your own tax advisors about the application
of the United States federal income tax laws to your particular situation
as well as any tax consequences arising under the laws of any state, local
or foreign jurisdiction. The pass through trusts are not indemnified for
any federal income taxes that may be imposed upon them. Any income taxes
imposed on a pass through trust could result in a reduction in amounts
available for distribution to certificateholders.
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General
The pass through trusts will not themselves be subject to federal
income taxation. Except as discussed in a prospectus supplement, based upon
an interpretation of analogous authorities under existing law, each pass
through trust should be classified as a grantor trust for federal income
tax purposes. We assume in the following discussion that the pass through
trusts will be classified as grantor trusts.
Each certificateholder will be required to report on its federal
income tax return its pro rata share of the gross income from each of the
equipment notes and any other property held in the related pass through
trust, under the certificateholder's usual method of accounting. Each
certificateholder may deduct, consistent with its method of accounting, its
pro rata share of the fees and expenses paid or incurred by the pass
through trust as provided in Section 162 or 212 of the Code. Some fees and
expenses may, however, be borne by parties other than the
certificateholders. The pass through trust may be treated as having
constructively received these fees and expenses so that each
certificateholder would be required to include in income and would be
entitled to deduct its pro rata share of these constructively-received fees
and expenses. Certificateholders who are individuals, estates or trusts
will be allowed to deduct expenses only to the extent they exceed, together
with the certificateholder's other miscellaneous itemized deductions, 2% of
the certificateholder's adjusted gross income. In addition, in the case of
individuals, certain otherwise allowable itemized deductions will be
subject generally to additional limitations on itemized deductions under
applicable provisions of the Code.
If an equipment note held by a pass through trust is prepaid for an
amount that differs from a certificateholder's aggregate adjusted basis in
the equipment note, the certificateholder will be considered to have sold
his pro rata share of that equipment note, and will recognize any gain or
loss equal to the difference between the certificateholder's adjusted basis
and the amount realized from the prepayment. However, any amount realized
from prepayment which is attributable to accrued interest would be taxable
as interest income if not previously included in income. A
certificateholder's adjusted basis is determined by allocating the purchase
price for the pass through certificate among the equipment notes and other
property in the pass through trust in proportion to their fair market
values at the time of purchase of the pass through certificate. Any gain or
loss will be long-term capital gain or loss if the equipment note has been
held for more than one year. Net capital gains of individuals are, in
general, taxed at lower rates than items of ordinary income. An owner
participant's conveyance of its interest in an owner trust will not
constitute a taxable event to the remaining holders of interests in the
equipment notes. However, if (a) United were to assume an owner trust's
obligations under the equipment notes, or (b) an owner trust were to assume
United's obligations under the equipment notes, the assumption would be
treated for federal income tax purposes as a taxable exchange resulting in
taxable gain or loss to the certificateholders under the rules discussed
above. In calculating the taxable gain or loss, the amount realized will be
equal to the fair market value of a certificateholder's pro rata share of
the equipment notes at that time.
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Sales of Pass Through Certificates
A certificateholder who sells a pass through certificate will
recognize capital gain or loss, equal to the difference between the amount
realized on the sale, except for amounts representing accrued interest
taxable as interest income, if not previously included in income, and the
certificateholder's adjusted tax basis in the pass through certificate. In
general, a certificateholder's adjusted tax basis in a certificate will
equal the purchase price for the certificate. Gain or loss will be
long-term capital gain or loss if the pass through certificate was held for
more than one year, except for amounts attributable to property held by
pass through trust for one year or less. Any long-term capital gains are
taxable to corporate taxpayers at ordinary income tax rates and to
individual taxpayers at a maximum rate of 20%. Corporate taxpayers may
deduct capital losses only to the extent of capital gains. Individual
taxpayers may deduct capital losses only to the extent of capital gains
plus $3,000 of other income.
Bond Premium
A certificateholder generally will be considered to have acquired an
interest in an equipment note at a bond premium if the certificateholder's
tax basis allocable to the equipment note exceeds the remaining principal
amount of the equipment note allocable to the certificateholder's pass
through certificate. A certificateholder may be able to amortize the bond
premium, generally on a constant yield basis, as a reduction to interest
income with corresponding reductions in the certificateholder's tax basis
in the equipment note. You should consult your own tax advisors regarding
the advisability and consequences of an election to amortize any bond
premium on the equipment notes.
Original Issue Discount
Unless specified in the applicable prospectus supplement, the
equipment notes will not be issued with original issue discount unless the
aggregation rules contained in the Treasury regulations apply. Under those
rules, if one investor purchases pass through certificates issued by more
than one pass through trust, some of the investor's interests in the
equipment notes must be combined as a single debt instrument, which, for
purposes of calculating and amortizing any original issue discount, has a
single issue price, maturity date, stated redemption price at maturity and
yield to maturity. If the aggregation rules apply to an investor, the
equipment notes could be treated as having been issued with original issue
discount to that investor. Generally, a holder of a debt instrument issued
with more than a de minimis amount of original issue discount must include
the original issue discount in income for federal income tax purposes as it
accrues, in advance of the receipt of the cash, under a method that takes
into account the compounding of interest. You should consult your own tax
advisors regarding the aggregation and original issue discount rules.
Backup Withholding
Payments made on pass through certificates, and proceeds from the
sale of pass through certificates to or through brokers, may be subject to
a "backup" withholding tax of 31% unless the certificateholder complies
with reporting procedures specified in Treasury regulations or is exempt
from these requirements. Any withheld amounts will be allowed as a credit
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against the certificateholder's federal income tax and may entitle the
certificateholder to a refund if the required information is furnished to
the Internal Revenue Service. The Internal Revenue Service may impose
penalties on a certificateholder who is required to supply information but
does not do so in the proper manner. You should consult your own tax
advisors about your eligibility for, and the procedure for obtaining,
exemption from backup withholding.
ERISA CONSIDERATIONS
Unless otherwise indicated in the applicable prospectus supplement,
an employee benefit plan subject to Title I of the Employee Retirement
Income Security Act of 1974 or an individual retirement account or an
employee benefit plan subject to section 4975 of the Internal Revenue Code
may, subject to legal restrictions, purchase and hold pass through
certificates. A fiduciary of an employee benefit plan must determine that
the purchase and holding of a pass through certificate is consistent with
its fiduciary duties under ERISA and does not result in a non-exempt
prohibited transaction as defined in Section 406 of ERISA or Section 4975
of the Internal Revenue Code. Employee benefit plans which are governmental
plans (as defined in Section 3(32) of ERISA) and certain church plans (as
defined in Section 3(33) of ERISA) are not subject to the fiduciary
responsibility provisions of ERISA. The pass through certificates may,
subject to legal restrictions, be purchased and held by such plans.
PLAN OF DISTRIBUTION
The pass through certificates may be sold through agents, to or
through underwriters, directly to other purchasers or through agents.
We may effect the distribution of the pass through certificates from
time to time in one or more transactions at a fixed price or prices, which
may be changed, or at market prices prevailing at the time of sale, at
prices related to the prevailing market prices or at negotiated prices.
Agents designated by United from time to time may solicit offers to
purchase pass through certificates. The applicable prospectus supplement
will name any agent involved in the offer or sale of the pass through
certificates and specify any commissions payable by United to that agent.
Unless otherwise indicated in a prospectus supplement, any agent will act
on a best efforts basis for the period of its appointment. The Securities
Act may deem an agent to be an underwriter of the pass through certificates
so offered and sold.
If pass through certificates are sold by means of an underwritten
offering, United will execute an underwriting agreement with an underwriter
or underwriters at the time an agreement for that sale is reached. The
prospectus supplement that the underwriters will use to resell the pass
through certificates to the public will specify the managing underwriter or
underwriters, as well as any other underwriters, and the terms of the
transaction, including any commissions, discounts and any other
compensation of the underwriters and dealers. If underwriters are utilized
in the sale of the pass through certificates, the underwriters will acquire
the pass through certificates for their own account and they may resell the
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pass through certificates from time to time in one or more transactions,
including negotiated transactions, at fixed public offering prices or at
varying prices determined by the underwriters at the time of sale. Pass
through certificates may be offered to the public either through
underwriting syndicates represented by managing underwriters or directly by
the managing underwriters. If underwriters are utilized in the sale of the
pass through certificates, unless otherwise indicated in the prospectus
supplement, the underwriting agreement will provide that the obligations of
the underwriters are subject to specified conditions precedent and that the
underwriters with respect to a sale of pass through certificates must
purchase all of the pass through certificates if any are purchased.
If a dealer is utilized in the sale of the pass through
certificates, the pass through certificates will be sold by the pass
through trustee to the dealer as principal. The dealer may then resell the
pass through certificates to the public at varying prices to be determined
by the dealer at the time of resale. The 1933 Act may deem a dealer to be
an underwriter of the pass through certificates so offered and sold. The
applicable prospectus supplement will name the dealer and describe the
terms of the transaction.
Offers to purchase pass through certificates may be solicited
directly and the sale of the pass through certificates may be made directly
to institutional investors or others, who may be deemed to be underwriters
within the meaning of the 1933 Act with respect to any resale of the pass
through certificates. The prospectus supplement will describe the terms of
any sales.
Under agreements which may be entered into by United, underwriters
and agents who participate in the distribution of pass through certificates
may be entitled to indemnification by United against specified liabilities,
including liabilities under the 1933 Act.
Unless otherwise provided in a prospectus supplement, United does
not intend to apply for the listing of any series of pass through
certificates on a national securities exchange. If the pass through
certificates of any series are sold to or through underwriters, the
underwriters may make a market in the pass through certificates, as
permitted by applicable laws and regulations. No underwriter would be
obligated, however, to make a market in the pass through certificates. The
underwriters, in their sole discretion could discontinue any market making
at any time. Accordingly, we can give no assurance as to the liquidity of,
or trading markets for, the pass through certificates of any series.
The underwriters or agents and their associates may be customers of,
engage in transactions with, and perform services for, United in the
ordinary course of business.
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If so indicated in the applicable prospectus supplement, agents,
underwriters or dealers may be authorized to solicit offers by some
institutions to purchase pass through certificates at the public offering
prices set forth in the applicable prospectus supplement under delayed
delivery contracts providing for payment and delivery on a specified date
or dates. The applicable prospectus supplement will indicate the commission
that will be paid to agents, underwriters and dealers soliciting purchases
of pass through certificates under delayed delivery contracts accepted by
United.
LEGAL MATTERS
Unless otherwise indicated in a prospectus supplement, Mayer, Brown
& Platt, Chicago, Illinois, counsel for United, and counsel for any agents,
dealers or underwriters will pass upon the legality of the pass through
certificates offered by this prospectus.
EXPERTS
Unless otherwise indicated in a prospectus supplement, Arthur
Andersen LLP, independent public accountants, have audited the audited
financial statements and schedules included or incorporated by reference in
this prospectus, any prospectus supplement and elsewhere in the
registration statement as indicated in their audit reports, and the audited
financial statements and schedules are included or incorporated by
reference in this prospectus in reliance upon the authority of that firm as
experts in giving audit reports.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following are the estimated expenses of the issuance and
distribution of the securities (other than underwriting discounts and
commissions) being registered, all of which will be paid by the Registrant:
SEC Registration Fee $278
Printing and Engraving
Attorneys' Fees and Expenses
Trustees' Fees
Accounting Fees and Expenses
Blue Sky Fees and Expenses
Rating Agency Fees
Miscellaneous
____________________________________________
Total $
All of the above amounts, other than the SEC Registration Fee, are
estimated.
Item 15. Indemnification of Directors and Officers
United's Restated Certificate of Incorporation provides that no
director of United will be personally liable to United or its stockholders
for monetary damages for any breach of fiduciary duty by such director as a
director, except for liability (1) for any breach of the director's duty of
loyalty to United or its stockholders, (2) for acts or omissions not in
good faith or which involve intentional misconduct or a knowing violation
of law, (3) for unlawful payments of dividends or unlawful stock
repurchases or redemptions as provided in Section 174 of the Delaware
General Corporation Law ("DGCL") or (4) for any transaction from which the
director derived an improper personal benefit.
The above provision is intended to afford directors additional
protection and limit their potential liability from suits alleging a breach
of the duty of care by a director. As a result of the inclusion of such a
provision, stockholders may be unable to recover monetary damages against
directors for actions taken by them that constitute negligence or gross
negligence or that are otherwise in violation of their fiduciary duty of
care, although it may be possible to obtain injunctive or other equitable
relief with respect to such actions. If equitable, remedies are found not
to be available to stockholders in any particular situation, stockholders
may not have an effective remedy against a director in connection with such
conduct.
United's Restated Certificate of Incorporation also provides that
directors and officers of United shall be indemnified against liabilities
arising from their service as directors and officers to the full extent
permitted by law.
Section 145 of the Delaware General Corporation Law ("Section
145") permits indemnification of directors, officers, agents and
controlling persons of a corporation under certain conditions and subject
to certain limitations. Section 145 empowers a corporation to indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or in
the right of the corporation), by reason of the fact that he is or was a
director, officer, employee or agent of the corporation or another
enterprise if serving at the request of the corporation. Depending on the
character of the proceeding, a corporation may indemnify against expenses,
including attorneys' fees, judgments, fines and amounts paid in settlement
actually and reasonably incurred in connection with such action, suit or
proceeding if the person indemnified acted in good faith and in a manner he
reasonably believed to be in or not opposed to, the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. In the case of an
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action by or in the right of the corporation, no indemnification may be
made in respect of any claim, issue or matter as to which such person shall
have been adjudged to be liable to the corporation unless and only to the
extent that the Court of Chancery or the court in which such action or suit
was brought shall determine that, despite the adjudication of liability,
such person is fairly and reasonably entitled to indemnity for such
expenses which the court shall deem proper. Section 145 further provides
that to the extent a director or officer of a corporation has been
successful in the defense of any action, suit or proceeding referred to
above or in the defense of any claim, issue or matter therein, he shall be
indemnified against expenses, including attorneys' fees, actually and
reasonably incurred by him in connection therewith.
Item 16. Exhibits
1(a) Form of Underwriting Agreement for Debt Securities of United
1(b) Form of Underwriting Agreement relating to Pass Through Certificates
4(a)(1) Form of Indenture relating to the Debt Securities of United
4(a)(2) Form of Debt Securities of United (included in Exhibit 4(a)(1))
4(b)(1) Form of Pass Through Trust Agreement
4(b)(2) Form of Pass Through Certificate (included in Exhibit 4(b)(1))
5(a)(1) Opinion of Mayer, Brown & Platt, counsel for United Air Lines, Inc.,
relating to Debt Securities (To be filed by amendment)
5(a)(2) Opinion of Mayer, Brown & Platt, counsel for United Air Lines, Inc.,
relating to Pass Through Certificates (To be filed by amendment)
8(a) Tax Opinion of Mayer, Brown & Platt, counsel for United Air Lines,
Inc. (included under the caption "Material Federal Income Tax
Consequences" in the Prospectus relating to Pass Through
Certificates)
12 Computation of Ratio of Earnings to Fixed Charges -- filed as
Exhibit 12.1 to the Company's Annual Report on Form 10-Q as of the
fiscal quarter ended June 30, 2000 and incorporated herein by
reference.
23(a) Consent of Mayer, Brown & Platt, counsel for United Air Lines, Inc.
(included in Exhibits 5(a)(1) and 5(a)(2))
23(d) Consent of Arthur Andersen LLP, independent public accountants
Item 17. Undertakings
The undersigned Registrant hereby undertakes:
(a) (1) To file with the SEC, during any period in which offers or
sales are being made, a post-effective amendment to this Registration
Statement:
(i) To include any prospectus required by section 10(a)(3)
of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the
Registration Statement (or the most recent
post-effective amendment thereof) which,
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individually or in the aggregate, represent a
fundamental change in the information set forth in
the Registration Statement. Notwithstanding the
foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of
securities offered would not exceed that which was
registered) and any deviation from the low or high
end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the
SEC under Rule 424(b) under the Securities Act of
1933 if, in the aggregate, the changes in volume
and price represent no more than a 20% change in
the maximum aggregate offering price set forth in
the "Calculation of Registration Fee" table in the
effective registration statement;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in
the Registration Statement or any material change to
such information in the Registration Statement;
provided, however, the paragraphs (a)(1)(i) and
(a)(1)(ii) do not apply if the Registration Statement
is on Form S-3, Form S-8 or Form F-3 and the
information required to be included in a
post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished
to the SEC by the Registrant under section 13 or 15(d)
of the Securities Exchange Act of 1934 that are
incorporated by reference in the Registration
Statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective
amendment will be deemed to be a new registration
statement relating to the securities offered therein, and
the offering of such securities at the time will be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which
remain unsold at the termination of the offering.
(b) That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the Registrant's
annual report under Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 that is incorporated by
reference in this Registration Statement will be deemed to
be a new registration statement relating to the securities
offered therein, and the offering of such securities at
that time will be deemed to be the initial bona fide
offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers
and controlling persons of the Registrant under the provisions
referred to in Item 15 of this Registration Statement, or
otherwise, the Registrant has been advised that in the opinion
of the SEC such indemnification is against public policy as
expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer
or controlling person of the Registrant in the successful
defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the
securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it
is against public policy as expressed in the Securities Act
and will be governed by the final adjudication of such issue.
(d) To file an application for the purpose of determining the
eligibility of the trustee to act under subsection (a) of
Section 310 of the Trust Indenture Act of 1939 in
accordance with the rules and regulations prescribed by
the SEC under Section 305(b)(2) of the Trust Indenture Act
of 1939.
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POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and
appoints James E. Goodwin, Douglas A. Hacker and Frederic F. Brace, and
each of them, the true and lawful attorneys-in-fact and agents of the
undersigned, with full power of substitution and resubstitution, for and in
the name, place and stead of the undersigned, in any and all capacities, to
sign any and all amendments (including post-effective amendments) to this
Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and
Exchange Commission, and hereby grants to such attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each
and every act and thing requisite and necessary to be done, as fully to all
intents and purposes as the undersigned might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or any
of them, or their or his substitute or substitutes, may lawfully do or
cause to be done by virtue hereof.
SIGNATURES
Under the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized in the City of Elk Grove Village, State of
Illinois, on this 16th day of October, 2000.
UNITED AIR LINES, INC.
By: /s/ JAMES E. GOODWIN
---------------------------------------
James E. Goodwin
Chairman of the Board and Chief
Executive Officer and Director
Under the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ JAMES E. GOODWIN
------------------------- Chairman and Chief Executive October 16, 2000
James E. Goodwin Officer and Director
(Principal Executive Officer)
/s/ DOUGLAS A. HACKER
------------------------- Executive Vice President - October 16, 2000
Douglas A. Hacker Finance and Planning and
Chief Financial Officer
(Principal Financial
Officer) and Director
/s/ M. LYNN HUGHITT
------------------------- Vice President and Controller October 16, 2000
M. Lynn Hughitt (Principal Accounting Officer)
/s/ RONO DUTTA Director October 16, 2000
-------------------------
Rono Dutta
/s/ CHRISTOPHER D. BOWERS Director October 16, 2000
-------------------------
Christopher D. Bowers
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/s/ WILLIAM P. HOBGOOD Director October 16, 2000
---------------------------
William P. Hobgood
/s/ STUART I. ORAN Director October 16, 2000
---------------------------
Stuart I. Oran
/s/ANDREW P. STUDDERT Director October 16, 2000
---------------------------
Andrew P. Studdert
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EXHIBIT INDEX
Exhibits Exhibit Description
---------- -------------------
1(a) Form of Underwriting Agreement for Debt Securities of United
1(b) Form of Underwriting Agreement relating to Pass Through
Certificates
4(a)(1) Form of Indenture relating to the Debt Securities of United
4(a)(2) Form of Debt Securities of United (included in Exhibit 4(a)(1))
4(b)(1) Form of Pass Through Trust Agreement
4(b)(2) Form of Pass Through Certificate (included in Exhibit 4(b)(1))
5(a)(1) Opinion of Mayer, Brown & Platt, counsel for United Air Lines,
Inc., relating to Debt Securities (to be filed by amendment)
5(a)(2) Opinion of Mayer, Brown & Platt, counsel for United Air Lines,
Inc., relating to Pass Through Certificates (to be filed by
amendment)
8(a) Tax Opinion of Mayer, Brown & Platt, counsel for United Air
Lines, Inc.(included under the caption "Material Federal Income
Tax Consequences" in the Prospectus relating to Pass Through
Certificates)
12 Computation of Ratio of Earnings to Fixed Charges -- filed as
Exhibit 12.1 to the Company's Quarterly Report on Form 10-Q as
of the fiscal quarter ended June 30, 2000 and incorporated
herein by reference
23(a) Consent of Mayer, Brown & Platt, counsel for United Air Lines,
Inc. (included in Exhibits 5(a)(1) and 5(a)(2)
23(d) Consent of Arthur Andersen LLP, independent public accountants
i
