Alpa Tentative Agreement Summary

USA320Pilot

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May 18, 2003
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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
 
USA320Pilot said:
2. Hourly Pay Rates:

o Hourly rates reduced by 14.7%,


5. Pension Contributions:

o Current 9 % B Plan continues,
o C Plan defined as an additional 6% contribution to PDAP,
[post="229565"][/post]​
What is this "C" plan and PDAP?

What happened to the 401K?

Can someone explain this?
 
spacewaitress said:
What is this "C" plan and PDAP?

What happened to the 401K?

Can someone explain this?
[post="229592"][/post]​

Space,

The "C" Plan is basically an additional fund similar to the current "B" fund into which UAL currently contributes 9%. The existing Defined Benefit Plan (DFB) or pension plan, is commonly referred to as the "A" fund. Under the TA this will be terminated leaving the current "B" plan and the newly created "C" plan although I think the totals of the "B" & "C" plan will, in reality, be managed as one based on pilot preferences. I believe they're only itemized for the purposes of contractual language.

Pilots will still be able to contribute to a 401K just as all employees.

Hope this helps.

Cheers,
Z B)
 
Nothing happened to the 401k.

PDAP=Pilot Directed Account Plan

As I mentioned in a previos post, many years ago, the pilots decided to reduce their pension by a certain amount and take that money and place it into a PDAP or what we call our "B" plan. That money is in our name and can be invested as we desire. It is completely independent of the "A" plan (pension) we will lose to the PBGC.

So since we had an A and B plan already, the money the company is replacing our pensions with is now called the "C" plan.
 
Nothing happened to the 401k.

PDAP=Pilot Directed Account Plan

As I mentioned in a previos post, many years ago, the pilots decided to reduce their pension by a certain amount and take that money and place it into a PDAP or what we call our "B" plan. That money is in our name and can be invested as we desire. It is completely independent of the "A" plan (pension) we will lose to the PBGC.

So since we had an A and B plan already, the money the company is replacing our pensions with is now called the "C" plan.
 
737nCH11 said:
Why do you need it explained? You should focus on your negotiation process.
[post="229609"][/post]​
Uh, well, it may give some insight into where the company's bottom line lies.
 
spacewaitress said:
Uh, well, it may give some insight into where the company's bottom line lies.
[post="229848"][/post]​

Here's your insight......... We'll get ours first and if there is any left you can divi it up. That a big IF.

"The company (United) is making generous new pension promises even as it is refusing to honor its old pension promises," said Bradley Belt, executive director of the pension agency.

Equally troublesome, Belt said is a provision that would essentially require United to eliminate its other union pension plans if it terminated the pilots account. "The company and the pilots' union have no authority to force other workers and the PBGC to accept the termination of those plans," Belt said.

"We will be scrutinizing this agreement very closely and will take all appropriate steps to protect the financial interests of the pension insurance program," Belt said
 
Borescope said:
Here's your insight......... We'll get ours first and if there is any left you can divi it up. That a big IF.
[post="229849"][/post]​
I don't think that'll go over well with the other unions.
 
737nCH11 said:
Why do you need it explained? You should focus on your negotiation process.
[post="229609"][/post]​

Explain to me why your agreement should be dependent on the termination of my pension
 
kcabpilot said:
Explain to me why your agreement should be dependent on the termination of my pension
[post="229863"][/post]​

I can explain it but I have already been sent to the cornfields for making such comments.

But it goes something like 'sharing the love'.

Take Care,
:p UT
 
kcabpilot said:
Explain to me why your agreement should be dependent on the termination of my pension
[post="229863"][/post]​

Maybe you can explain to me why you should possibly be allowed to keep your pension and I should have mine terminated?
 
ualdriver said:
Maybe you can explain to me why you should possibly be allowed to keep your pension and I should have mine terminated?
[post="230113"][/post]​

There is no such language to that effect other than the ALPA TA.

No one here has suggested that ALPA should give up their pensions to save the rest. It was never expected that this burden be put exclusively on your a$$.
(or anyone elses)

You are a bunch of pricks and my 'Christmas Cheer' cannot hide you from this fact!!!

B) UT
 
ualdriver said:
Maybe you can explain to me why you should possibly be allowed to keep your pension and I should have mine terminated?
[post="230113"][/post]​


Because you are about to vote to allow the termination of your pension. That's your choice. Leave me and my pension out of your deals.
 
kcab, if I understand it correctly, you are still free to vote yes or no on your own concession deal and any pension termination (not sure what group you are with). All the ALPA deal says is that if another group doesn't have their defined benefit pension terminated, ALPA's won't be terminated either-- that part of their concessionary agreement is essentially voided (maybe even the whole thing; I don't know the exact wording).

All ALPA is saying is, We'll terminate our pensions-- IF everyone else does the same. If other don't terminate theirs, we won't terminate ours.

Sounds kinda fair, really. I am sure all the other work groups would expect the same for themselves.