USA320Pilot
Veteran
- May 18, 2003
- 8,175
- 1,539
Summary of Bankruptcy Exit Tentative Agreement - December 16, 2004
1. Contract Extension:
o Contract amendable date extended 8 months until December 31, 2009,
o Negotiations commence no later than May 01, 2009.
o Company agreed to enhance mediation process to shorten next Section 6 negotiation.
2. Hourly Pay Rates:
o Hourly rates reduced by 14.7%,
o No change to current book raises of 1.5% in May 06, 07, 08, 09,
o Additional 1% raise on January 1, 2008, (MEC option to convert to C fund contribution, See # 5 below.)
o See Exhibit A of the TA for wage cut tables.
3. Other Contract Changes (See Exhibits B-1 and B-2):
a. ALPA Concessions:
o Eliminate International Hourly Override,
o Eliminate Night Premium,
o Eliminate Future Retiree Life Insurance,
b. Company Concessions:
o Eliminate moveable RDO's for domestic reserve assignments.
4. Defined Benefit Pension Plan:
o ALPA will not oppose A Plan Termination if Bankruptcy Court determines it is required for exit,
o Company will not terminate and will oppose efforts to terminate prior to the earlier of May 1, 2005 or bankruptcy exit.
5. Pension Contributions:
o Current 9 % B Plan continues,
o C Plan defined as an additional 6% contribution to PDAP,
o Optional - the January 01, 2008 1.0% pay raise can be converted to a C Plan contribution
making it a total of 7% at the MEC's option.
o If a new DB plan is started for any employee group, Pilot group has the option to continue CPlan or accept comparable plan
6. Profit Sharing - See Exhibit C
7. Convertible Notes - See Exhibit D
8. Distribution Agreement - See Exhibit E
9. Additional Non-Labor Savings - The company must pursue an additional $150 million savings beyond the target amount already identified.
10. Administrative claim -Pilot group reimbursed for twice the pilot group cash savings in the event of termination under paragraph 16. Claim extinguished on exit from bankruptcy provided the company's plan of reorganization is fully consistent with the TA.
11. Indemnity - See Exhibit F
12. Plan Release and Exculpation - Liability exemption for negotiating the Bankruptcy Agreement.
13. Assumption of the Pilot Agreement - UAL agrees to accept this agreement on exit from bankruptcy.
14. Bankruptcy Actions - The Company and the Association shall mutually pursue court approval of this LOA. The Association shall support all further requests by the Company for any exclusivity extensions.
15. Conditions to Effectiveness - Must meet six conditions to effect TA agreement (See Agreement).
16. Termination Rights - Eight protections in which we revert to CBA 2003 if certain obligations are not met (See Agreement).
17. Fees and Expenses - See Exhibit G Summary of Bankruptcy Exit Tentative Agreement December 16, 2004
18. Agreement - This LOA is a final, binding and conclusive commitment between the Company and the Association.
19. Amendments; Waiver - Amendments in writing only
20. Notices - Legal notice requirements.
21. Counterparts - Legal stipulation on signatures and documents.
22. Headings; Construction - LOA language construction and interpretation
rules
Exhibit A - Revised Pay Rate Tables - See Agreement.
Exhibit B - Other Contract Revisions, See #3 above
Exhibit C - Profit Sharing:
o Replaces current profit sharing plan
o Distributed as wages (401k Deferral Optional)
o Profit Sharing Pool - $10 million trigger
o 7.5% of Pre-Tax Earnings in years 2005 and 2006
o 15% of Pre-Tax Earnings thereafter
o Pilot Pro Rata Share - Individual Pilot Earnings/Aggregate Employee Earnings
o Eligibility - Any pilot who has completed one year of service as of Dec 31st of measured year.
o Payment -Not later than April 30th of the following year.
Exhibit D - Convertible Notes:
o $550,000,000.00 value.
o Issued NLT 180 days following bankruptcy exit.
o Term - 15 years from issuance date
o Conversion Rights -Convertible notes into common stock
o Notes to trade at or near face value at issuance
o Allocation and mechanics of pilot allocation to be determined by the MEC Exhibit
E - Amended Distribution Agreement:
o New stock allocation formula includes previous allocated amount plus an
additional $300 million
based on 20 months of cost savings from new agreements.
o Clause to capture any proportional concession based upon the other employee groups final agreements.
Exhibit F - Indemnity Agreement: Legal provision designed to protect the Association and its employees, agents, officers, and members from any and all claims made in connection with the Agreement.
Exhibit G - Fees and Expenses:
o ALPA reimbursed for fees and expenses associated with entering into this agreement.
o Payment of MEC financial advisors by the company.
o MEC financial advisors to reimburse ALPA for fees and expenses incurred during the bankruptcy
1. Contract Extension:
o Contract amendable date extended 8 months until December 31, 2009,
o Negotiations commence no later than May 01, 2009.
o Company agreed to enhance mediation process to shorten next Section 6 negotiation.
2. Hourly Pay Rates:
o Hourly rates reduced by 14.7%,
o No change to current book raises of 1.5% in May 06, 07, 08, 09,
o Additional 1% raise on January 1, 2008, (MEC option to convert to C fund contribution, See # 5 below.)
o See Exhibit A of the TA for wage cut tables.
3. Other Contract Changes (See Exhibits B-1 and B-2):
a. ALPA Concessions:
o Eliminate International Hourly Override,
o Eliminate Night Premium,
o Eliminate Future Retiree Life Insurance,
b. Company Concessions:
o Eliminate moveable RDO's for domestic reserve assignments.
4. Defined Benefit Pension Plan:
o ALPA will not oppose A Plan Termination if Bankruptcy Court determines it is required for exit,
o Company will not terminate and will oppose efforts to terminate prior to the earlier of May 1, 2005 or bankruptcy exit.
5. Pension Contributions:
o Current 9 % B Plan continues,
o C Plan defined as an additional 6% contribution to PDAP,
o Optional - the January 01, 2008 1.0% pay raise can be converted to a C Plan contribution
making it a total of 7% at the MEC's option.
o If a new DB plan is started for any employee group, Pilot group has the option to continue CPlan or accept comparable plan
6. Profit Sharing - See Exhibit C
7. Convertible Notes - See Exhibit D
8. Distribution Agreement - See Exhibit E
9. Additional Non-Labor Savings - The company must pursue an additional $150 million savings beyond the target amount already identified.
10. Administrative claim -Pilot group reimbursed for twice the pilot group cash savings in the event of termination under paragraph 16. Claim extinguished on exit from bankruptcy provided the company's plan of reorganization is fully consistent with the TA.
11. Indemnity - See Exhibit F
12. Plan Release and Exculpation - Liability exemption for negotiating the Bankruptcy Agreement.
13. Assumption of the Pilot Agreement - UAL agrees to accept this agreement on exit from bankruptcy.
14. Bankruptcy Actions - The Company and the Association shall mutually pursue court approval of this LOA. The Association shall support all further requests by the Company for any exclusivity extensions.
15. Conditions to Effectiveness - Must meet six conditions to effect TA agreement (See Agreement).
16. Termination Rights - Eight protections in which we revert to CBA 2003 if certain obligations are not met (See Agreement).
17. Fees and Expenses - See Exhibit G Summary of Bankruptcy Exit Tentative Agreement December 16, 2004
18. Agreement - This LOA is a final, binding and conclusive commitment between the Company and the Association.
19. Amendments; Waiver - Amendments in writing only
20. Notices - Legal notice requirements.
21. Counterparts - Legal stipulation on signatures and documents.
22. Headings; Construction - LOA language construction and interpretation
rules
Exhibit A - Revised Pay Rate Tables - See Agreement.
Exhibit B - Other Contract Revisions, See #3 above
Exhibit C - Profit Sharing:
o Replaces current profit sharing plan
o Distributed as wages (401k Deferral Optional)
o Profit Sharing Pool - $10 million trigger
o 7.5% of Pre-Tax Earnings in years 2005 and 2006
o 15% of Pre-Tax Earnings thereafter
o Pilot Pro Rata Share - Individual Pilot Earnings/Aggregate Employee Earnings
o Eligibility - Any pilot who has completed one year of service as of Dec 31st of measured year.
o Payment -Not later than April 30th of the following year.
Exhibit D - Convertible Notes:
o $550,000,000.00 value.
o Issued NLT 180 days following bankruptcy exit.
o Term - 15 years from issuance date
o Conversion Rights -Convertible notes into common stock
o Notes to trade at or near face value at issuance
o Allocation and mechanics of pilot allocation to be determined by the MEC Exhibit
E - Amended Distribution Agreement:
o New stock allocation formula includes previous allocated amount plus an
additional $300 million
based on 20 months of cost savings from new agreements.
o Clause to capture any proportional concession based upon the other employee groups final agreements.
Exhibit F - Indemnity Agreement: Legal provision designed to protect the Association and its employees, agents, officers, and members from any and all claims made in connection with the Agreement.
Exhibit G - Fees and Expenses:
o ALPA reimbursed for fees and expenses associated with entering into this agreement.
o Payment of MEC financial advisors by the company.
o MEC financial advisors to reimburse ALPA for fees and expenses incurred during the bankruptcy
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