Dear Captain Beebe:
As you know, some uncertainty exists regarding the status of the Company’s request for long
term funding relief under a restoration or waiver funding program for the US Airways Pilots Pension Plan
(the “Planâ€).
If the PBGC and IRS reject the Company’s request for long term funding relief and this results in
the termination of the Plan, the freezing of the plan or significant modification in Plan benefits from those
negotiated in the 2002 Supplementary Cost Reduction Agreement (“Agency Actionâ€), the parties agree to
meet and confer for the purpose of negotiating alternate pilot retirement benefits.
If the Plan is terminated, the alternate pilot retirement plan shall provide benefits, from and after
the effective date of the termination (the “Effective Dateâ€), that resemble, in the aggregate, the benefits
pilots would have earned from and after the Effective Date under the existing Plan (reflecting all recent
amendments in the 2002 Supplementary Cost Reduction Agreement) absent the termination (and taking
into account the effect of termination on existing benefits); provided, however, that (i) the alternate pilot
retirement benefits plan shall be designed in such a way that it is not objectionable to PBGC or IRS or
contrary to their rules, (ii) the alternate pilot retirement benefit plan may take the form of a defined
contribution plan, and (iii) while the Company’s cash cost in providing the alternate pilot retirement
benefit plan described above (together with any cash cost the Company must bear with respect to the
terminated Plan) may be less than the Company’s cash cost under the proposed restoration funding
program for the Plan (taking into account variations in interest rates), its cash cost may in no event exceed
such restoration funding cash cost in any year.
The parties further agree that agreement to the terms of this letter in no way diminishes their
commitment to vigorously seek a restoration funding program.
Finally, the terms of this letter shall remain confidential until such time as Agency Action, as
defined above, occurs.
Sincerely,
David Siegel
President and Chief Executive Officer
US Airways, Inc.
_____________________
Agreed and Accepted
Chris Beebe
MEC Chairman
As you know, some uncertainty exists regarding the status of the Company’s request for long
term funding relief under a restoration or waiver funding program for the US Airways Pilots Pension Plan
(the “Planâ€).
If the PBGC and IRS reject the Company’s request for long term funding relief and this results in
the termination of the Plan, the freezing of the plan or significant modification in Plan benefits from those
negotiated in the 2002 Supplementary Cost Reduction Agreement (“Agency Actionâ€), the parties agree to
meet and confer for the purpose of negotiating alternate pilot retirement benefits.
If the Plan is terminated, the alternate pilot retirement plan shall provide benefits, from and after
the effective date of the termination (the “Effective Dateâ€), that resemble, in the aggregate, the benefits
pilots would have earned from and after the Effective Date under the existing Plan (reflecting all recent
amendments in the 2002 Supplementary Cost Reduction Agreement) absent the termination (and taking
into account the effect of termination on existing benefits); provided, however, that (i) the alternate pilot
retirement benefits plan shall be designed in such a way that it is not objectionable to PBGC or IRS or
contrary to their rules, (ii) the alternate pilot retirement benefit plan may take the form of a defined
contribution plan, and (iii) while the Company’s cash cost in providing the alternate pilot retirement
benefit plan described above (together with any cash cost the Company must bear with respect to the
terminated Plan) may be less than the Company’s cash cost under the proposed restoration funding
program for the Plan (taking into account variations in interest rates), its cash cost may in no event exceed
such restoration funding cash cost in any year.
The parties further agree that agreement to the terms of this letter in no way diminishes their
commitment to vigorously seek a restoration funding program.
Finally, the terms of this letter shall remain confidential until such time as Agency Action, as
defined above, occurs.
Sincerely,
David Siegel
President and Chief Executive Officer
US Airways, Inc.
_____________________
Agreed and Accepted
Chris Beebe
MEC Chairman
