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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2000
OR
Commission File No. 1-6033
UAL CORPORATION
(Exact name of registrant as specified in its charter)
| Delaware |
36-2675207
|
| (State or other jurisdiction of |
(IRS Employer
|
| incorporation or organization) |
Identification No.)
|
| Location: 1200 East Algonquin Road, Elk Grove Township, Illinois |
|
| Mailing Address: P. O. Box 66919, Chicago, Illinois |
|
| (Address of principal executive offices) |
|
Registrant' s telephone number, including area code
(847) 700-4000
Securities registered pursuant to Section 12(b) of the
Act:
| NAME OF EACH EXCHANGE | |
| TITLE OF EACH CLASS | ON WHICH REGISTERED |
| Common Stock, $.01 par value | New York, Chicago and |
| Pacific Stock Exchanges | |
| Depositary Shares each representing | |
| 1/1,000 of a share of Series B | |
| Preferred Stock, without par value | New York Stock Exchange |
Securities registered pursuant to Section 12 (g) of the Act:
NONE
Indicate by check mark whether the Registrant
(1) has filed all reports required to be filed by Section 13 or 15(d) of
the Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the Registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
Yes X
No
Indicate by check mark if disclosure of delinquent
filers pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of Registrant' s knowledge, in definitive
proxy or information statements incorporated by reference in Part III of
this Form 10-K or any amendment to this Form 10-K. [ X ]
The aggregate market value of voting stock held by non-affiliates
of the Registrant was $1,997,225,062 as of February 28, 2001. The
number of shares of common stock outstanding as of February 28, 2001 was
52,773,342.
Documents Incorporated by Reference
Part III of this Form 10-K incorporates by reference certain information from the Registrant' s definitive Proxy Statement for its Annual Meeting of Stockholders to be held on May 17, 2001.
PART I
ITEM 1. BUSINESS.
UAL Corporation ("UAL" or
the "Company") 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 66919, Chicago, Illinois 60666.
The telephone number for the Company is (847) 700-4000.
The Company is a holding
company and its principal subsidiary is United Air Lines, Inc., a Delaware
corporation ("United"), which is wholly owned. United accounted for
virtually all of the Company' s revenues and expenses in 2000. United
is a major commercial air transportation company, engaged in the transportation
of persons, property and mail throughout the U.S. and abroad.
Airline Operations
During 2000, United carried,
on average, more than 231,000 passengers per day and flew more than 126
billion revenue passenger miles. It is the world' s largest airline
as measured by revenue passenger miles flown, providing passenger service
in 28 countries. United' s network, supplemented with strategic airline
alliances, provides comprehensive transportation service within its North
America segment and to international destinations within its Pacific, Atlantic,
and Latin America segments. Operating revenues attributed to United'
s North America segment were $13.1 billion in 2000, $12.5 billion in 1999
and $12.0 billion in 1998. Operating revenues attributed to United'
s international segments were $6.2 billion in 2000, $5.5 billion in 1999
and $5.5 billion in 1998.
North America.
United operates hubs in Chicago, Denver, Los Angeles, San Francisco and
Washington Dulles and has the most extensive U.S. route system of any airline,
ranking first in capacity share in all of its U.S. hubs. Within the
North America segment, United also operates United Shuttle®, which
is designed to provide high-frequency air service in competitive markets,
as well as critical traffic feed to United' s mainline operations.
United Shuttle is principally concentrated on the West Coast and in Denver.
United Shuttle offers approximately 455 daily flights on 30 routes among
23 cities in the western U.S. United' s North America operations
accounted for 67.7% of United' s revenues in 2000.
Pacific.
Via its Tokyo hub, United provides passenger service between its U.S. gateway
cities (Chicago, Honolulu, Los Angeles, New York, San Francisco and Seattle)
and the Asian cities of Bangkok, Hong Kong, Seoul, Shanghai and Singapore.
United also provides nonstop service between Hong Kong and each of Chicago,
Los Angeles, San Francisco, and Singapore; between San Francisco and each
of Beijing, Osaka, Seoul, Shanghai, Sydney and Taipei; and between Los
Angeles and each of Auckland, Melbourne and Sydney.
In November 2000, United
received authority to fly two additional frequencies to China. The
new authority allows United to operate daily service between San Francisco
and Shanghai. Additionally, United plans to resume around-the-world
service in April 2001, adding service between Delhi and each of London
and Hong Kong. Also during April 2001, United plans to add nonstop
service between New York and Hong Kong.
The air services agreement
between the U.S. and Japan provides an unlimited number of frequencies
to United and certain other carriers. United also holds significant
traffic rights beyond Japan. These rights will allow United to add
service from Japan to other Asian points as regulatory, competitive and
economic conditions warrant.
In 2000, United was the leading
U.S carrier in the Pacific in terms of transpacific available seat miles
and the most flights available. United' s Pacific operations accounted
for 16.4% of United' s revenues in 2000.
Atlantic.
During 2000, Washington-Dulles served as United' s primary gateway to Europe,
serving Amsterdam, Brussels, Frankfurt, London, Milan, Munich, and Paris.
Chicago has become United' s secondary European gateway, offering nonstop
service in 2000 to each of Dusseldorf, Frankfurt, London and Paris.
United also provides nonstop service between: London and Boston, Los Angeles,
Newark, New York and San Francisco; Paris and each of Los Angeles and San
Francisco; and between Frankfurt and San Francisco.
In February 2001, United
inaugurated nonstop service between Chicago and Amsterdam. In April
2001, United plans to discontinue service between London and each of Amsterdam
and Brussels, concurrent with the resumption of service between London
and Delhi. In June 2001, United plans to add seasonal service between
Denver and Frankfurt. In 2000, United' s Atlantic operations accounted
for 11.7% of United' s operating revenues.
Latin America.
During 2000, United' s primary gateway to Latin America was Miami, providing
passenger service between Miami and each of Buenos Aires, Caracas, Montevideo,
Rio de Janeiro, Santiago and Sao Paolo. United also provided service
between Los Angeles and each of Guatemala City, Mexico City, and San Salvador;
between New York and each of Buenos Aires, Sao Paolo, and San Juan; between
Chicago and each of Aruba, Buenos Aires, Mexico City, San Juan, St. Thomas,
and Sao Paolo; between Mexico City and each of San Francisco and Washington
Dulles; and between Washington-Dulles and St. Thomas. United also
provides service between San Jose, Costa Rica and each of Mexico City and
Guatemala City.
The newly amended air services
agreement between the U.S. and Argentina provides for additional capacity
in the U.S.-Argentina market and enables United to operate any size aircraft
on any or all of its 21 weekly flights to Argentina without restriction.
Prior to this amendment, United and American Airlines were the only U.S.
passenger carriers operating between the U.S. and Argentina. Under
the new agreement, Delta and Continental have each been awarded access
to Argentina and will respectively commence daily service in April and
December 2001. In 2000, United' s Latin America operations accounted
for 4.2% of United' s revenues.
Financial information relative
to the Company' s operating segments can be found in Note 19 in the Notes
to Consolidated Financial Statements in this Form 10-K.
US Airways Acquisition.
During 2000, UAL announced plans to acquire US Airways Group, Inc.
in an all-cash transaction for $4.3 billion. The Company expects
that the new network created by the acquisition will make travel more convenient
for passengers, connecting US Airways eastern U.S. markets with United'
s extensive east-west and international networks, and create the nation'
s most comprehensive airline network. This transaction, which the
Company anticipates closing in the second quarter of 2001, is still subject
to regulatory clearance and other customary closing conditions.
In addition, UAL and AMR
Corporation announced in January 2001 the approval of a binding memorandum
of understanding, under which American Airlines will provide competitive
service on key hub-to-hub routes where United and US Airways currently
are the only competitors with non-stop flights. In addition, UAL
will transfer assets that would have been surplus to the needs of the combined
United/US Airways operations, consisting of gates, slots and up to 86 aircraft.
AMR will pay UAL approximately $1.2 billion in cash for this transaction
and assume certain US Airways obligations.
For more information on the
US Airways acquisition, see "US Airways Acquisition" in Item 7. Management'
s Discussion and Analysis of Financial Condition and Results of Operations.
United Cargo®.
United Cargo generated over $900 million in freight and mail revenue.
As a part of United' s decision to retire its remaining DC-10 passenger
aircraft, United Cargo discontinued its international freighter operation
on December 24, 2000. With United' s growing fleet of cargo-friendly
widebody aircraft, however, it is expected that revenues will continue
to increase through time-sensitive delivery services, e-commerce initiatives
and customer loyalty programs.
United Cargo' s premium international
time-definite service, TD.Guaranteed, was expanded to more U.S. destinations
with intra-U.S. connections, which more than doubled TD.Guaranteed revenue
since the product was introduced in 1999. In addition, another time-sensitive
product, United Sameday, was introduced in 2000 for the small package,
door-to-door delivery service, which may be booked via a toll-free number
or the Internet (www.unitedsameday.com).
Fuel.
Changes in fuel prices are industry-wide occurrences that benefit or harm
United' s competitors as well as United. Fuel-hedging activities
may affect the degree to which fuel-price changes affect individual companies.
To assure adequate supplies of fuel and to provide a measure of control
over fuel costs, United ships fuel on major pipelines and stores fuel close
to its major hub locations.
United' s results of operations
are significantly affected by the price and availability of jet fuel.
It is estimated that, absent hedging, every $.01 change in the average
annual price-per-gallon of jet fuel causes a change of approximately $31
million in United' s annual fuel costs. United' s average price per
gallon of jet fuel in 2000 increased 40%, as compared to the previous year.
However, the average price of spot jet fuel in the U.S. Gulf Coast increased
71% during that same period. United' s price in 2000 was mitigated
by a fuel hedging program that was primarily an options-based strategy,
through which the upside was retained while the downside was eliminated.
Insurance.
United carries liability insurance of a type customary in the air transportation
industry, in amounts which it deems adequate, covering passenger liability,
public liability, property damage liability, and physical damage insurance
on United' s aircraft and property.
Marketing Strategy
Besides offering convenient
scheduling throughout its domestic and international segments, United seeks
to attract high yield customers and create customer preference by providing
a comprehensive network, an attractive frequent-flyer program, and enhanced
service initiatives.
Alliances.
United has formed bilateral alliances with other airlines to provide its
customers more choices and to participate worldwide in markets that it
cannot serve directly for commercial or governmental reasons. An
alliance is a collaborative marketing arrangement between carriers, which
can include joint frequent flyer participation, code-sharing of flight
operations, coordination of reservations, baggage handling, and flight
schedules, and other resource sharing activities. "Code-sharing"
is an agreement under which a carrier' s flights can be marketed under
the two-letter airline designator code of another carrier. Through
an alliance, carriers can provide their customers a seamless global travel
network under their own airline code. United now participates
in a multilateral alliance, the Star AllianceÔ
.
The Star Alliance is an integrated
worldwide transport network, which provides customers with global recognition
and a wide range of other benefits. Collectively, the Star Alliance
carriers served more than 815 destinations in over 130 countries during
2000. The Star Alliance enables its member carriers to more effectively
compete with other worldwide alliances. Founded in 1997 by United
and five other carriers, the Star Alliance has grown to fifteen carriers.
Besides United, the Star Alliance includes: Air Canada, Air New Zealand,
All Nippon Airways, Ansett Australia, Austrian Airlines, British Midland,
Lauda Air, Lufthansa, Mexicana, SAS, Singapore Airways, Thai International
Airways, Tyrolean and Varig. United currently holds bilateral immunity
with Air Canada and integrated antitrust immunity with Lufthansa, SAS,
and the Austrian Group.
United has also formed independent
alliances with other air carriers. Current agreements exist between
United and each of Aeromar, ALM Antillean, Aloha, BWIA, Cayman Airways,
Continental Connection, Emirates, Saudi Arabian Airlines, and Spanair.
In addition, United has a
marketing program in North America known as United Express®,
under which independent regional carriers, utilizing turboprop equipment
and regional jets, feed United' s major airports and international gateways.
The carriers in the United Express program serve small and medium-sized
cities in the U.S., linking those cities to United' s hubs. United
Express carriers include Air Wisconsin Airlines Corporation, Atlantic Coast
Airlines, Great Lakes Aviation and Sky West Airlines. Effective May
1, 2001, Great Lakes Aviation will no longer be a United Express carrier,
but will continue its relationship with United as an alliance carrier.
Mileage Plus®.
United established the frequent flyer program to develop and retain
passenger loyalty by offering awards and services to frequent travelers.
Over 40 million members have enrolled in Mileage Plus since it was started
in 1981. Mileage Plus members earn mileage credit for flights on
United, United Shuttle, United Express, the Star Alliance carriers and
certain other airlines which participate in the program. Miles can
also be earned by utilizing the goods and services of non-airline program
participants, such as hotels, car rental companies, bank credit card issuers,
and a variety of other businesses. Mileage credits can be redeemed
for free, discounted or upgrade travel awards on United and other participating
airlines, or, to a limited extent, other travel and non-travel industry
awards.
Travel awards can be redeemed
at the "Standard" level for any unsold seat on any United flight to every
destination served by United. Redemption at the "Saver" award level,
however, is restricted with blackout dates and capacity controlled inventory,
thereby limiting the use of Saver awards on certain flights.
When a travel award level
is attained, liability is recorded for the incremental costs of providing
travel, based on expected redemptions. United' s incremental costs
include the additional costs of providing service to the award recipient,
such as fuel, meal, personnel and ticketing costs, for what would otherwise
be a vacant seat. The incremental costs do not include any contribution
to overhead or profit. For mileage sold to other program participants
prior to January 1, 2000, revenue was recognized when the miles were sold.
Beginning January 1, 2000, a portion of revenue from the sale of mileage
is deferred and recognized when the transportation is provided. (See Item
8, Note 1(i) "Summary of Significant Accounting Policies - Mileage Plus
Awards" in the Notes to Consolidated Financial Statements.)
At December 31, 2000, the
estimated number of outstanding awards was approximately 10.8 million,
as compared with 7.0 million at the end of the prior year. United
estimates that 8.9 million of such awards will ultimately be redeemed and,
accordingly, has recorded a liability amounting to $564 million, which
includes the deferred revenue from the sale of miles to program participants.
Based on historical data, the difference between the awards expected to
be redeemed and the total awards outstanding arises because: (1)
some awards will never be redeemed, (2) some will be redeemed for non-travel
benefits, and (3) some will be redeemed on partner carriers.
In 2000, 1.97 million Mileage
Plus travel awards were used on United. This number represents the
number of awards for which travel was actually provided in 2000 and not
the number of seats that were allocated to award travel. In 1999,
2.24 million awards were used, while 2.13 million awards were used in 1998.
Such awards represented 7.2% of United' s total revenue passenger miles
in 2000, 8.7% in 1999, and 8.6% in 1998. Passenger preference for
Saver awards, which have inventory controls, keep displacement of revenue
passengers at a minimum. Travel award seats flown on United represent
72% of the total awards issued, of which 87% are used for travel within
the U.S. and Canada. In addition to the awards issued for travel
on United, approximately 10% of the total awards issued are used for travel
on partner airlines.
Economy Plus®.
In late 1999, United announced Economy Plus, which is a reconfiguration
of the first six to eleven rows of the United Economy cabins on aircraft
serving the North America market. This reconfigured area provides
four to five additional inches of legroom for United' s Premier®
frequent-flyers and full-fare United Economy customers, many of whom often
travel in the United Economy cabin. United was the first U.S. airline
to offer additional legroom on its North America flights and completed
the seat reconfiguration in early 2000.
In early 2001, United announced
that it is reconfiguring its fleet of three-cabin international aircraft
to create Economy Plus seating. In doing so, United becomes the first
U.S. airline to offer premium seating area in the front of its economy
cabin on both its North America and international flights. United
also unveiled plans to enhance United Business class throughout its international
fleet to offer customers an additional seven inches of legroom.
Distribution Channels.
The overwhelming majority of United' s airline inventory continues to be
distributed through the traditional channels of travel agencies and computer
reservation systems (CRS). United uses the Apollo reservation system,
which is hosted by Galileo International, a CRS in which United holds approximately
a 15% equity interest. The hosting agreement with Galileo continues
through 2004.
Electronic Commerce.
Consumers are increasingly turning to online avenues to meet their travel
needs. United is using e-commerce capabilities to strengthen and
enhance its market position, attract new customer segments, and reduce
the overall costs of booking transportation. Additionally, United
is utilizing e-commerce capabilities in initiatives addressing opportunities
in the areas of cargo, process improvement and customer connectivity.
On October 3, 2000, UAL formed
United NewVentures, a new subsidiary to provide innovative solutions for
its customers, to strengthen United' s airline business and to create incremental
value for UAL Corporation' s stockholders. United NewVentures, Inc.
is a wholly owned subsidiary of UAL.
United NewVentures currently
has two divisions, United NetVentures and United NetWorks. United
NetWorks incorporates the E-Commerce Division created in January, 2000.
The focus of United NetVentures is business development of non-United branded
businesses, enhancing United' s e-commerce partnerships and identifying
new e-commerce opportunities with strategic partners. United' s involvement
in projects such as Orbitz, Hotwire and Cordiem, a business-to-business
Internet exchange, are managed by United NetVentures.
United NetWorks is responsible
for all United-branded e-commerce activities, such as strategy, operations,
planning, and support of united.com, the airline' s web site, as well as
wireless initiatives, such as proactive customer notification of flight
information. United NetWorks is also responsible for the Mileage
Plus non-airline relationships, which currently include over ninety partners
among car rental, hotel, telecommunications, shopping, dining and financial
services companies.
Our United Commitmentsm.
To renew its commitment to improve key areas of customer satisfaction and
as part of an industry-wide, voluntary initiative, United implemented a
comprehensive customer service plan, Our United Commitment, in late 1999
and fully deployed it in 2000. Our United Commitment addresses issues
identified by United' s frequent flyer customers as being most important
to them, such as improved communication, increased information throughout
the travel experience, more efficient baggage handling and greater responsiveness
to customer inquiries.
On February 13, 2001, the
Inspector General of the U.S. Department of Transportation released its
full-year report on the effectiveness of the airline industry' s voluntary
initiatives. Although the report found that progress had been made
in some areas, it stressed that the industry continues to fall short in
notifying passengers about flight delays and cancellations. The report
is based on a review of the voluntary programs of 17 carriers, including
United.
Over the past year, United
introduced new services aimed at helping customers avoid delays, keeping
customers informed when delays and cancellations occur, and minimizing
the impact of cancellations and delays upon customers. Examples of
such new services include:
--Deploying an industry-leading proactive flight paging system;
--Installing United EasyCheck-Insm kiosks, allowing customers
with E-tickets to bypass airport lines and check themselves in;
--Deploying state-of-the-art mobile "chariot" workstations in all hub
airports, providing additional passenger check-in stations;
--Installing the United EasyInfosm digital electronic information
display systems, which give real-time information; and
--Launching the customer advocate center, which proactively accommodates
customers in anticipation of irregular operations.
While the report identified
where the airlines have been lacking, United received praise for measures
that went beyond actions required by Our United Commitment. The report
stated that initiatives such as more legroom between seats, expansion of
overhead baggage compartments and providing chariots to reduce lines were
additional efforts to make the travel experience better. Additionally,
United was one of only three airlines to incorporate its customer service
plan into its contract of carriage.
Industry Conditions
Operating Environment.
The air travel business is subject to seasonal fluctuations. United'
s operations are often adversely impacted by winter weather and United'
s first- and fourth-quarter results normally reflect reduced travel demand.
Operating results for the Company are generally better in the second and
third quarters. In addition to weather conditions, air traffic control
limitations and concerted employee job actions may from time-to-time cause
disruptions in operations.
Competition.
The airline industry is highly competitive. In domestic markets,
new and existing carriers are free to initiate service on any route.
United' s domestic competitors include all of the other major U.S. airlines
as well as regional carriers, some of which have lower cost structures
than United.
In its international service,
United competes not only with U.S. carriers but also with foreign carriers,
including national flag carriers, which in certain instances enjoy forms
of governmental support not available to U.S. carriers. Competition
on certain international routes is subject to varying degrees of governmental
regulations (see "Government Regulation"). United has advantages
over foreign air carriers in the U.S. because of its ability to generate
U.S. origin-destination traffic from its integrated domestic route systems,
and because foreign carriers are prohibited by U.S. law from carrying local
passengers between two points in the U.S. United experiences comparable
restrictions in foreign countries.
In addition, U.S. carriers
are often constrained from carrying passengers to points beyond designated
international gateway cities due to limitations in air service agreements
or restrictions imposed unilaterally by foreign governments. To compensate
for these structural limitations, U.S. and foreign carriers have entered
into alliances and marketing arrangements that allow the carriers to provide
traffic feed to each other' s flights. (See "Marketing Strategy -
Alliances")
Government Regulation
General.
All carriers engaged in air transportation in the U.S. are subject
to regulation by the U.S. Department of Transportation ("DOT"). The
DOT has authority to: issue certificates of public convenience and necessity
for domestic air transportation and, through the Federal Aviation Administration
("FAA"), air-carrier operating certificates; authorize the provision of
foreign air transportation by U.S. carriers; prohibit unjust discrimination;
prescribe forms of accounts and require reports from air carriers; regulate
methods of competition, including the provision and use of computerized
reservation systems; and administer regulations providing for consumer
protection, including regulations governing the accessibility of air transportation
facilities for handicapped individuals. United holds certificates
of public convenience and necessity, as well as air-carrier operating certificates,
and therefore is subject to DOT regulations. The FAA also administers
the U.S. air traffic control system and oversees aviation safety issues.
United' s operations require
licenses issued by the aviation authorities of the foreign countries that
United serves. Foreign aviation authorities may from time to time
impose a greater degree of economic regulation than exists with respect
to United' s North America operations. United' s ability to serve
some international markets and its expansion into many of these markets
are presently restricted by a lack of aviation agreements to allow such
service or, in some cases, by the restrictive terms of such agreements.
In connection with its international
services, United is required to make regular filings with the DOT and to
observe tariffs establishing the fares charged and the rules governing
the transportation provided. In certain cases, fares and schedules
require the approval of the relevant foreign governments. Shifts
in U.S. or foreign government aviation policies can lead to the alteration
or termination of existing air service agreements between the U.S. and
other governments, and could diminish the value of United' s international
route authority. United' s operating rights under the air services
agreements might not be preserved in such cases.
Airport Access.
Historically, take-off and landing rights ("slots") at Chicago O' Hare
International, New York John F. Kennedy International, New York LaGuardia
and Washington Reagan National airports have been limited by the "high
density traffic rule." Under this rule, slots may be bought, sold
or traded. In April 2000, the U.S. President signed the Wendell H.
Ford Investment and Reform Act for the 21st Century ("AIR 21") which includes
a phase-out of slots at Chicago' s O' Hare International Airport and New
York' s LaGuardia and JFK airports. Starting in May 2000, AIR 21
has allowed carriers to operate foreign air service at Chicago O' Hare
without slots, thereby eliminating the government' s need to withdraw slots
from incumbent carriers.
As part of the phase-out
of the high density traffic rule, slot exemptions were made available for
new entrants, as well as for carriers providing service to small- to medium-sized
and non-hub airports. This exemption, however, led to a significant
increase of flights into and out of LaGuardia that far exceeded that airport'
s capacity. As a result, all carriers operating at LaGuardia, including
United, incurred a significant number of delays and cancellations during
2000.
To reduce the resulting traffic
congestion problems, the FAA implemented a slot lottery system for determining
the additional carriers that may operate from LaGuardia. The lottery
system is currently in effect and has substantially reduced delays and
cancellations. The slot lottery was designed as a temporary remedy;
the FAA is currently considering a number of capacity management alternatives
at LaGuardia for long-term improvement, including making slot lotteries
permanent.
AIR 21 also provides that
nearly $40 billion from the U.S. Aviation Trust Fund is to be invested
in aviation facilities, equipment and training, examples of which could
be radar modernization, airport construction projects, and the hiring and
training of air traffic controllers.
Across the Atlantic, the
Commission of the European Union ("EU") has proposed a regulation that
would, if enacted, dramatically alter the manner in which airport slots
are held and allocated. The centerpiece of the proposal is that a
slot at major airports would have a life-span of only ten years, at which
time it would automatically revert to the airport slot controller.
The proposal has been met with fierce opposition from airlines. The
Commission will likely re-evaluate its original proposal and consider a
milder form of slot reform.
United currently has a sufficient
number of leased gates and other airport facilities, but expansion by United
may be constrained at certain airports by insufficient availability of
gates on attractive terms or other factors, such as noise restrictions.
Safety.
The FAA has regulatory jurisdiction over flight operations generally, including
equipment, ground facilities, maintenance, communications and other matters.
United' s aircraft and engines are maintained in accordance with the standards
and procedures recommended and approved by the manufacturers and the FAA.
From time to time, the FAA
issues airworthiness directives ("ADs") which require air carriers to undertake
inspections and to make unscheduled modifications and improvements on aircraft,
engines and related components and parts. The ADs sometimes cause
United to incur substantial, unplanned expense when aircraft or engines
are removed from service prematurely in order to undergo mandated inspections
or modifications. The issuance of any particular AD may have a greater
or lesser impact on United, compared to its competitors, depending upon
the equipment covered by the directive. Civil and criminal sanctions
may be assessed for not complying with the ADs.
The Air Transport Association
("ATA"), an industry organization to which United belongs, and the Department
of Defense ("DoD") have signed a memorandum of understanding, establishing
procedures for auditing international code-share partners that carry DoD
personnel. Based on the DOT/FAA Safety Program Guidelines issued
to all U.S. carriers, United has also established a safety review plan
for Star Alliance and code-share airlines. Audits are conducted on
both prospective and existing code-share partners. The FAA reviews
audit reports and makes code-share approval recommendations to the DOT.
Passenger Rights Legislation.
Following the February 2001 report of the DOT Inspector General, several
pieces of legislation were introduced by members of the U.S. Congress to
implement a variety of changes in the airline industry, such as: requiring
airlines to disclose all available fares; allowing consumers to purchase
any published fare from an airline or a travel agent; requiring airlines
to disclose the number of seats available for frequent flyer travelers;
and granting authority to the DOT to intervene and roll back fares in certain
markets.
In 2000, the EU' s transport
commissioner proposed two legislative alternatives for limiting airlines'
use of overbooking as a revenue management device. The first alternative
would distinguish between an intention to fly and a confirmed booking.
If the passenger has only indicated an intention to fly, the passenger
would be allowed to cancel without penalty and the airline would be allowed
to give away the seat. For a confirmed booking, however, an airline
would have no choice but to provide a seat for a passenger with a confirmed
booking. The second alternative under consideration is to limit an
airline' s ability to overbook. The limitation would be combined
with efforts to encourage airlines to stage auctions where the carrier
improves its compensation offer until someone is tempted to surrender his
or her seat.
It is not clear what form
that any of the U.S. or European legislation might ultimately take.
Privacy Laws.
An initiative of significant impact within the EU and elsewhere is the
introduction of privacy standards that apply to companies transmitting
private information from the EU to countries abroad. To comply with
the privacy directives, the U.S. Commerce Department and the EU Commission
have agreed to safe harbor principles. Although the safe harbor principles
are voluntary at this point, United plans to comply with them. In
mid-2001, the U.S. Commerce Department and the EU Commission will review
the status of voluntary compliance.
Canada, Argentina and Australia
have enacted new privacy laws covering the collection and disclosure of
personally identifiable information. These laws have either gone
into force or will go into force later this year, and may have an impact
on the way United collects and transmits personal identifiable information
in these jurisdictions.
Environmental Regulations.
United operates a number of underground and above-ground storage tanks
throughout its system. They are used for the storage of fuels and
deicing fluids. United has been identified as a Potentially Responsible
Party in some state and federal recovery actions involving soil and ground
water contamination. The Company has been working with the relevant
government agencies to resolve the issues and believes they will be resolved
without material adverse effect on the Company.
Employees - Labor Matters
At December 31, 2000, the
Company and its subsidiaries had more than 102,000 employees. Approximately
80 % of United' s employees are represented by various labor organizations.
Collective bargaining agreements
are negotiated under the Railway Labor Act, which governs labor relations
in the transportation industry, and typically do not contain an expiration
date. Instead, they specify a date called the amendable date, by
which either party may notify the other of its desire to amend the agreement.
Upon reaching the amendable date, the contract is considered "open for
amendment." Prior to the amendable date, neither party is required
to agree to modifications to the bargaining agreement. Nevertheless,
nothing prevents the parties from agreeing to start negotiations or to
modify the agreement in advance of the amendable date.
Contracts remain in effect
while new agreements are negotiated. During the negotiating period,
both the Company and the negotiating union are required to maintain the
status quo. Recent operating disruptions suggest, however, that some
members of the negotiating employee group may engage in activities designed
to "slow down" the airline. These slowdown tactics may involve refusal
to work overtime, increased sick leave usage and other disruptive behavior
that could have an adverse impact on operations.
United' s collective bargaining
agreements with the International Association of Machinists and Aerospace
Workers ("IAM") became amendable on July 12, 2000. United is currently
in negotiations with the IAM, under the auspices of the National Mediation
Board ("NMB"). Under the law, the parties are not allowed to resort
to self-help, such as strikes or lock-outs, until they are released from
mediation by the NMB, and then only after a 30 day cooling-off period.
However, the NMB can request the U.S. president to create a Presidential
Emergency Board, the creation of which imposes an additional 60-day bar
against self-help remedies. If the parties fail to reach a resolution
by the end of the 60 days, the U.S. Congress can impose a settlement.
The Company cannot predict when the current negotiations will be resolved.
For additional information on the status of negotiations, see "Labor Agreements"
in Item 7. Management' s Discussion and Analysis of Financial Condition
and Results of Operations.
The employee groups, number
of employees, labor organization and current contract status for each of
United' s major collective bargaining groups in the U.S., as of December
31, 2000, are as follows:
| Number of | Contract Open | ||
| Employee Group | Employees | Union | for Amendment |
| Pilots | 10,045 | ALPA | Sept. 1, 2004 |
| Flight Attendants | 24,199 | AFA | March 1, 2006* |
| Mechanics/Ramp | 15,706 | IAM | July 12, 2000 |
| Passenger Service | 31,606 | IAM | July 12, 2000 |
* The collective bargaining agreement between the Company and the AFA
provides for mid-term wage adjustments.
Corporate Governance and the ESOPs
Background.
In July 1994, the stockholders of UAL approved a plan of recapitalization
that provided an approximately 55% equity and voting interest in UAL to
certain employees of United, in exchange for wage concessions and work-rule
changes. The employees' equity interest was allocated to individual
employee accounts through the year 2000 under the Employee Stock Ownership
Plans ("ESOPs") created as part of the recapitalization. The entire
ESOP voting interest is voted by the ESOP trustee at the direction of,
and on behalf of, the employees participating in the ESOPs.
As part of the recapitalization,
the Company' s stockholders approved an elaborate governance structure,
which is contained principally in the Company' s Restated Certificate of
Incorporation ("UAL Charter") and the ESOPs. Among other matters,
the UAL Charter provides that the Company' s Board of Directors is to consist
of five public directors, four independent directors, and three employee
directors which are appointed by different classes of stockholders (see
the Company' s Proxy Statement for its Annual Meeting of Stockholders for
information concerning the processes for electing the directors and for
Board committee requirements). A number of special stockholder and
Board voting requirements were also established, as summarized below.
Special Voting.
In specified circumstances ("Extraordinary Matters"), actions by UAL or
United Airlines require approval of either (a) 75% of the entire Board,
including at least one union director, or (b) 75% of the voting stock present
at a stockholder meeting. "Extraordinary Matters" include certain
business transactions outside the ordinary course of business, significant
asset dispositions, and most issuances of equity securities. Most
issuances of equity securities are also subject to a first refusal agreement
in favor of employees participating in the ESOPs.
Other special voting requirements
apply to amendments to the UAL Charter and certain bylaws, repurchases
of common stock, stock sales to employee benefit plans, and business transactions
with labor. The special voting rights referred to in the previous paragraph
will continue until "Sunset" (defined below), at which time the corporate
governance section will convert to a more traditional form, providing for
nine public directors and three employee directors.
In the case of a merger or
Control Transaction (defined below) that involves an Uninstructed Trustee
Action (defined below), any required stockholder approval must also include
at least a majority of the votes represented by all outstanding shares
of the Director Preferred Stocks (defined below), UAL common stock and
such other classes and series of stock that vote together with the common
stock as a single class ("Single Class Voting").
"Sunset." The
Voting Preferred Stock (see Item 8, Note 13 of the Notes to Consolidated
Financial Statements) outstanding at any
time commands voting power for approximately 55% of the vote of all classes
of capital stock in all matters requiring a stockholder vote, other than
the election of members of the Board of Directors. The Voting Preferred
Stock will generally continue to represent approximately 55% of the aggregate
voting power until Sunset, even though the common stock issuable upon conversion
of the ESOP stock may represent more or less than 55% of the fully diluted
common stock of UAL. Sunset will occur when the common shares issuable
upon conversion of Class 1 and Class 2 ESOP convertible preferred stock
(see Item 8, Note 13 of the Notes to Consolidated Financial
Statements), plus any common equity (generally common stock
issued or issuable at the time of the recapitalization) held by any other
Company sponsored employee benefit plans, plus any available unissued ESOP
shares held in the ESOPs equal, in the aggregate, less than 20% of the
common equity and available unissued ESOP shares of UAL. For purposes
of measuring the Sunset, employee ownership was approximately 63.84% at
December 31, 2000.
Control Transactions.
A "Control Transaction" is a tender or exchange offer, or other opportunity
to dispose of or convert at least 3% of UAL common stock, Class 1 and Class
2 ESOP convertible preferred stock into common stock, and Voting Preferred
Stocks, or any transaction or series of related transactions in which any
person or group acquires or seeks to acquire control of UAL or of all or
substantially all of the assets of UAL and its subsidiaries. In a
Control Transaction, ESOP participants are entitled to instruct the ESOP
trustee as to whether to tender, sell, convert or otherwise dispose of
shares allocated to their accounts under the ESOP, and current employees
who are ESOP participants may give the same instructions for ESOP shares
that have been issued, but not yet allocated to participants. Shares
held by the Supplemental ESOP will be tendered or directed by the Supplemental
ESOP Committee.
If a Control Transaction
results in the sale or exchange of any shares held by the ESOPs, the proceeds
will be used to acquire, to the extent possible, shares of common stock
(or preferred stock which is convertible into common) that qualify as "employer
securities" as defined in Internal Revenue Code Section 409(l). If
UAL shares do not qualify as "employer securities," then the shares must
be "employer securities" of a public company having a Moody' s senior long-term
debt rating at least as good as that of UAL and United at such time.
If such securities cannot be acquired, then UAL, ALPA and the IAM will
make appropriate arrangements reasonably satisfactory to the unions to
protect the interests of the participants.
Uninstructed Trustee Actions.
An uninstructed trustee action refers to situations in which the ESOP trustee
adopts a course of action without obtaining instructions from the ESOP
participants, or disregards their instructions, including situations involving
Control Transactions. Under specific circumstances, this action can
cause the Voting Preferred Stocks to be converted into UAL common stock,
with the special voting rights of these shares transferring to the Director
Preferred Stocks (defined as Class Pilot MEC, IAM, and SAM junior preferred
stock -- see Item 8, Note 13 of the Notes to Consolidated Financial
Statements) in the following approximate percentages: to the
holder of the Class Pilot MEC Preferred Stock, 46.23%; to the holder of
the Class IAM Preferred Stock, 37.13% ; and to the holders of the Class
SAM Preferred Stock, 16.64%. The Director Preferred Stocks will continue
to hold the Single Class Voting Rights until Sunset, or if Sunset occurs
because of, or within one year of, an uninstructed trustee action, July
12, 2010.
Specific
circumstances that give rise to a transfer of voting rights include:
(b) the ESOP trustee disposes of 10% or more of the common
equity represented by the Class 1 and Class 2 ESOP Preferred Stock (other
than in connection with the usual distribution or diversification under
the ESOP).
(2)
In addition, one of the following circumstances must be present:
(a) such transaction would not have been approved if the trustee
had solicited and/or followed the instructions;
(b) no timely solicitation of instructions occurs, and the
matter would not have been approved had the ESOP trustee cast all its votes
against the matter, or
(c) a matter that does not require a stockholder vote to approve
such transaction.
This section is intended
as a general summary and is qualified in its entirety by reference to the
UAL Charter, the Stockholders' Agreements, the First Refusal Agreement,
the ESOPs and the other exhibits to this Form 10-K.
ITEM 2. PROPERTIES.
Flight Equipment
As of December 31, 2000,
United' s operating aircraft fleet totaled 604 jet aircraft, of which 289
were owned and 315 were leased. These aircraft are listed below:
| Average | Average | |||||
| Aircraft Type | No. of Seats | Owned | Leased* | Total | Age (Years) | |
| A319-100 | 120 | 14 | 18 | 32 | 2 | |
| A320-200 | 138 | 19 | 49 | 68 | 4 | |
| B727-200 | 141 | 67 | 8 | 75 | 22 | |
| B737-200 | 103 | 24 | 0 | 24 | 22 | |
| B737-300 | 120 | 10 | 91 | 101 | 12 | |
| B737-500 | 104 | 27 | 30 | 57 | 9 | |
| B747-400 | 368 | 23 | 21 | 44 | 6 | |
| B757-200 | 182 | 41 | 57 | 98 | 9 | |
| B767-200 | 168 | 19 | 0 | 19 | 18 | |
| B767-300 | 219 | 15 | 20 | 35 | 6 | |
| B777-200 | 288 | 30 | 18 | 48 | 3 | |
| DC10-30 | 298 | 0 | 3 | 3 | 23 | |
| TOTAL OPERATING | 289 | 315 | 604 | 10 | ||
| FLEET | ||||||
*United'
s aircraft leases have initial terms of 10 to 26 years, and expiration
dates range from 2001 through 2020. Under the terms of all leases,
United has the right to purchase the aircraft at the end of the lease term,
in some cases at fair market value and in others, at fair market value
or a percentage of cost.
As of December 31, 2000,
110 of the 289 aircraft owned by United were encumbered under debt agreements.
On February 1, 2001, United
exercised options to acquire 15 additional aircraft. The following
table sets forth United' s firm aircraft orders and expected delivery schedules
as of December 31, 2000, plus the additional 15 aircraft:
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Ground Facilities and Equipment
United has entered into various
leases relating to its use of airport-landing areas, gates, hangar sites,
terminal buildings and other airport facilities in most of the municipalities
it serves. Major leases expire at Chicago O' Hare in 2018, Los Angeles
in 2021, San Francisco in 2011, and Washington Dulles in 2014. United
also has leased ticketing, sales and general office space in the downtown
and outlying areas of most of the larger cities in its system. In
suburban Chicago, United owns a 106-acre complex consisting of more than
one million square feet of office space for its world headquarters, a computer
facility and a training center.
United' s Maintenance Operation
Center ("MOC") at San Francisco International Airport occupies 129 acres
of land, three-million square feet of floor space and 12 aircraft hangar
docks under a lease expiring in 2003, with an option to extend for 10 years.
United' s Indianapolis Maintenance Center, a major aircraft maintenance
and overhaul facility, is operated under a lease with the Indianapolis
Airport Authority that expires in 2031. United also has a major facility
at the Oakland, California airport, dedicated to widebody airframe maintenance.
At Denver International Airport,
United operates under a lease and use agreement expiring in 2025, and occupies
52 gates and more than one million square feet of exclusive or preferential
use terminal building space. United' s flight training center, located
in the City and County of Denver, can accommodate 36 flight simulators
and more than 90 computer-based training stations.
In connection with the Company'
s planned acquisition of US Airways, the Company has announce plans to
invest up to $160 million in constructing a 300,000 to 360,000 square foot
maintenance complex in Pittsburgh. The Commonwealth of Pennsylvania
and Allegheny County have proposed to provide $60 million in incentive
assistance based, in part, on a job retention program.
ITEM 3. LEGAL PROCEEDINGS.
1. Frank, et al. v. United; EEOC v.
United
As previously reported in
our Form 10-Q for the quarter ended September 30, 2000, a class action
lawsuit against United was filed February 7, 1992 in federal district court
in California, alleging that United' s former flight attendant weight program,
in effect from 1989 to 1994, unlawfully discriminated against flight attendants
on the grounds of sex, age and other factors, and seeking monetary relief.
On April 29, 1994, the class was certified as to the sex and age claims.
Following extensive motion practice, on March 10, 1998, the district court
dismissed all the claims against United. Following an appeal to the
Court of Appeals for the Ninth Circuit, a three judge panel of the Ninth
Circuit, on June 21, 2000, overturned the ruling and held that United'
s former weight program violated the law. The court ruled that the
plaintiffs were entitled to judgment as a matter of law on their claims
for discrimination based on sex and that a trial was required for determination
on their claims for age discrimination. In addition, the appellate
court reversed the dismissal of all individual class representative claims
of discrimination and the case was remanded to the district court for further
proceedings. United' s petition for en banc review by an 11-judge
panel was denied on August 11, 2000. On December 8, 2000, United
petitioned for a review of the Ninth Circuit decision by the U.S. Supreme
Court, but that petition was denied on March 5, 2001. In accordance
with the appellate court ruling, the case will go back to the district
court for further proceedings with respect to the age discrimination claims
and for a determination of damages with respect to the sex discrimination
claims.
2. United v. Mesa Airlines, Inc. and WestAir
Commuter Airlines, Inc.
As previously reported in
our Form 10-Q for the quarter ended September 30, 2000, United sued Mesa
Airlines, Inc. and its subsidiary, WestAir Commuter Airlines, Inc., on
June 23, 1997, in the U.S. District Court for the Northern District of
Illinois, seeking an order declaring that United had the right to make
certain market adjustments in markets served by WestAir' s United Express
service in California. On January 22, 1998, United notified Mesa
that it was terminating Mesa' s United Express contract and United amended
its complaint to add claims against Mesa for failure to fly and for monetary
damages. Mesa and WestAir filed claims against United alleging, among
other things, wrongful termination of their contract and fraud, and seeking
monetary damages. On July 5, 2000, the Seventh Circuit Court of Appeals
affirmed the dismissal of Mesa' s tort claims, including its claim alleging
fraud on the ground that those claims are preempted by the Airline Deregulation
Act. Mesa filed a petition for certiorari with the U.S. Supreme Court.
That petition was denied, ending the appeals process for the tort claims.
On March 5, 2001, the parties agreed to a settlement and have since dismissed
the remaining claims.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No matter was submitted to
a vote of security holders of the Company during the fourth quarter of
2000.
Executive Officers of the Registrant
Information regarding the
executive officers of the Company is as follows:
James E. Goodwin.
Age 56. Mr. Goodwin has been Chairman and Chief Executive Officer
of the Company and United since July 1999. Prior to his current position,
he was President and Chief Operating Officer of the Company and United
from September 1998; from April 1995 until September 1998, he served as
Senior Vice President - North America of United.
Rono Dutta.
Age 49. Mr. Dutta has been President of the Company and United since
July 1999. Prior to his current position, he served as Senior Vice
President - Planning of United.
Douglas A. Hacker.
Age 45. Mr. Hacker has been Executive Vice President and Chief
Financial Officer of the Company and Executive Vice President - Finance
& Planning and Chief Financial Officer of United since July 1999.
Prior to his current position, he had served as Senior Vice President and
Chief Financial Officer for the Company and United.
William P. Hobgood.
Age 62. Mr. Hobgood has been Senior Vice President - People of United
since March 1997 and Senior Vice President of the Company since September
1999. Prior to joining United, he was in private practice as an attorney
specializing in mediation and arbitration, including labor-management issues.
Francesca M. Maher.
Age 43. Ms. Maher has been Senior Vice President, General Counsel
and Secretary of the Company and United since October 1998. From
June 1997 until October 1998, she was Vice President, General Counsel and
Secretary of the Company and United. Previously, she was Vice President
- - Law and Corporate Secretary of the Company and Vice President-Law, Deputy
General Counsel and Corporate Secretary of United.
Andrew P. Studdert.
Age 44. Mr. Studdert has been Executive Vice President and Chief
Operating Officer of the Company and of United since July 1999. Prior
to his current position, he served as Senior Vice President - Fleet Operations
of United from September 1997. He served as Senior Vice President
and Chief Information Officer of United from April 1995 to September 1997.
There are no family relationships
among the executive officers of the Company. The executive officers
of the Company serve at the discretion of the Board of Directors.
PART II
ITEM 5. MARKET FOR REGISTRANT' S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS.
The Company' s Common Stock,
$.01 par value (the "Common Stock"), is traded principally on the New York
Stock Exchange (the "NYSE") under the symbol UAL, and is also listed on
the Chicago Stock Exchange and the Pacific Stock Exchange. The following
sets forth for the periods indicated the high and low sales prices and
dividends paid per share of the Company' s Common Stock on the NYSE Composite
Tape.
| High | Low | Dividends Paid | ||
| 2000: | ||||
| 1st quarter | $ 79 | $ 45 3/4 | ||
| 2nd quarter | 65 1/8 | 49 | $0.3125 | |
| 3rd quarter | 61 5/8 | 40 1/4 | $0.3125 | |
| 4th quarter | 43 15/16 | 34 1/16 | $0.3125 | |
| 1999: | ||||
| 1st quarter | $ 80 1/4 | $ 57 9/16 | ||
| 2nd quarter | 87 3/8 | 60 1/16 | ||
| 3rd quarter | 69 3/8 | 58 3/16 | ||
| 4th quarter | 78 3/4 | 60 1/8 | ||
The Company initiated a quarterly
dividend during the second quarter of 2000. The payment of any future
dividends on the Common Stock and the amount thereof will be determined
by the Board of Directors of the Company based on the financial condition
of the Company and other relevant factors.
On March 14, 2001, based
on reports by the Company' s transfer agent for the Common Stock, there
were 23,542 common stockholders of record.
Item 6. Selected Financial Data and Operating
Statistics
| (In Millions, Except Per Share and Rates) |
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| Income Statement Data: | |||||
| Operating revenues |
$ 19,352
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$ 18,027
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$ 17,561
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$ 17,378
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$ 16,362
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| Earnings before extraordinary item | |||||
| and cumulative effect |
265
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1,238
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821
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958
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600
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| Net earnings |
50
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1,235
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821
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949
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533
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| Per share amounts, diluted: | |||||
| Earnings before extraordinary item | |||||
| and cumulative effect |
1.89
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9.97
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6.83
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9.04
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5.85
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| Net earnings |
0.04
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9.94
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6.83
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8.95
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5.06
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| Cash dividends declared per common share |
1.25
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-
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-
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-
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-
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| Pro Forma Income Statement Data1: | |||||
| Earnings before extraordinary item |
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$ 1,209
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$ 774
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$ 931
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$ 553
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| Net earnings |
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1,206
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774
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922
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486
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| Per share amounts, diluted: | |||||
| Earnings before extraordinary item |
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9.71
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6.38
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8.76
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5.29
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| Net earnings |
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9.68
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6.38
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8.67
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4.50
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| Other Information: | |||||
| Total assets at year-end |
$ 24,355
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$ 20,963
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$ 18,559
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$ 15,464
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$ 12,677
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| Long-term debt and capital lease | |||||
| obligations, including current portion, | |||||
| and redeemable preferred stock |
7,487
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5,369
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5,345
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4,278
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3,385
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| Revenue passengers |
85
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87
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87
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84
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82
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| Revenue passenger miles |
126,933
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125,465
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124,609
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121,426
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116,697
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| Available seat miles |
175,485
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176,686
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174,008
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169,110
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162,843
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| Passenger load factor |
72.3%
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71.0%
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71.6%
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71.8%
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71.7%
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| Breakeven passenger load factor |
69.4%
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64.9%
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64.9%
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66.0%
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66.0%
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| Passenger revenue per passenger mile (cents) |
13.3
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12.5
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12.4
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12.6
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12.4
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| Operating revenue per available seat mile (cents) |
11.0
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10.2
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10.1
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10.3
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10.0
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| Operating expense per available seat mile (cents) |
10.6
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9.4
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9.2
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9.5
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9.3
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| Fuel gallons consumed |
3,101
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3,065
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3,029
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2,964
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2,883
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| Average price per gallon of jet fuel (cents) |
81.0
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57.9
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59.0
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69.5
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72.2
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1 The pro forma income statement amounts reflect
adjustments to the historical income statement data assuming the Company
had adopted the provisions of Staff Accounting Bulletin 101 ("SAB 101")
in prior periods. (See Note 1i "Summary of Significant Accounting
Policies - Mileage Plus Awards" in the Notes to Consolidated Financial
Statements.)
Item 7. Management' s Discussion and Analysis of Financial Condition and
Results of Operations
This section contains various forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are identified with an asterisk (*). Forward-looking statements represent the Company' s expectations and beliefs concerning future events, based on information available to the Company on the date of the filing of this Form 10K. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Factors that could significantly impact the expected results referenced in the forward-looking statements are listed in the last paragraph of the section, "Outlook for 2001."
US Airways Acquisition
On May 24, 2000, UAL announced
that it had entered into a definitive merger agreement with US Airways
Group, Inc. ("US Airways") pursuant to which US Airways will be acquired
by the Company in an all-cash transaction for $4.3 billion. Additionally,
UAL will assume approximately $1.7 billion in US Airways net debt and $6.3
billion in operating leases. On October 12, 2000, the stockholders
of US Airways approved the merger. The transaction, which the Company
anticipates closing in the second quarter of 2001, is still subject to
regulatory clearance and other customary closing conditions. Definitive
financing arrangements have not yet been determined although UAL expects
to incur approximately $4.5 billion in additional indebtedness, through
a combination of bank and public financing, to cover the cost of the acquisition
as well as additional costs related to the integration of the airlines.
Subject to regulatory approval
of the transaction and the successful outcome of negotiations with local
authorities, the Company announced its intentions to expand US Airways'
maintenance facility in Pittsburgh at a total projected cost of $160 million.
Additionally, the Company recognizes that it will incur significant costs
associated with the integration of US Airways in order to achieve the anticipated
benefits to both the Company and the millions of passengers and hundreds
of communities served by United throughout the United States. The
Company expects that the new network will make traveling more convenient
for passengers, connecting US Airways' eastern U.S. markets with
United' s east-west and international markets, thereby creating the nation'
s most comprehensive airline network. However, the Company recognizes
that it may encounter difficulties in achieving these significant benefits.
As part of the agreement with US Airways, UAL generally has agreed to pay
US Airways a $50 million termination fee in the event the merger does not
take place.
In addition, UAL and US Airways
entered into a binding memorandum of understanding with Robert Johnson,
a member of the US Airways Group Board of Directors, under which Mr. Johnson
would buy certain of US Airways' assets and create a new airline,
to be called DC Air, which would compete on numerous routes currently served
by US Airways in the Washington D.C. area.
In a transaction designed
to enhance the competitive benefits of the proposed merger with US Airways
and address regulatory concerns, UAL and AMR Corporation ("AMR") on January
9, 2001 announced the approval of a binding memorandum of understanding,
under which AMR' s American Airlines subsidiary ("American") will provide
competitive service on key hub-to-hub routes where United and US Airways
currently are the only competitors with non-stop flights. As part
of the agreement, American will also enter into a 20-year joint venture
with United to jointly provide service on routes currently served by the
US Airways Shuttle between New York' s LaGuardia Airport, Washington, D.C.'
s Reagan National Airport and Boston' s Logan Airport. In addition,
United will transfer a number of gates, slots and up to 86 aircraft acquired
in its merger with US Airways to American deemed to be surplus to the combined
United and US Airways entity.
AMR will pay UAL up to $1.2
billion in cash for this transaction. In addition, American will
assume certain lease obligations and buy certain spare engines and other
parts associated with the aircraft being transferred. The transaction
will provide financial benefits to UAL by reducing the debt requirements
related to the acquisition of US Airways.
On March 2, 2001, UAL announced
that it had reached agreement with Atlantic Coast Airlines Holdings, Inc.
("ACAI"), for US Airways to sell its three wholly owned regional airlines
to ACAI for an initial purchase price of $200 million. UAL and ACAI
will seek to agree upon the ultimate purchase price over an 18-month period.
If an ultimate purchase price is not agreed as to a carrier, then the transaction
as to that carrier is subject to being unwound. If ACAI is not the
ultimate purchaser of at least one of the carriers, they will receive a
fee of up to $10 million. The transaction, which is contingent upon
and will occur at the same time as closing of the proposed acquisition
of US Airways, is subject to regulatory approvals and to certain termination
rights by UAL. In addition, at closing, the three carriers (Allegheny
Airlines, Piedmont Airlines and PSA Airlines) are expected to execute agreements
to provide feeder service to the combined United and US Airways network.
Results of Operations
During 2000, the Company experienced significant operational disruptions, as a result of labor-related delays and cancellations, as well as weather and air traffic control limitations, which adversely affected both revenue and expense performance. The Company attempted to mitigate the impact of these operational difficulties by reducing capacity, particularly in the domestic markets, where most of the problems were concentrated. The Company estimates the revenue shortfall arising from these disruptions and associated schedule reductions and cancellations to be somewhere between $700 and $750 million for the year.
Summary of Results -
UAL' s earnings from operations
were $654 million in 2000, compared to operating earnings of $1.4 billion
in 1999. UAL' s net earnings in 2000 were $50 million ($0.04 per
share, diluted), compared to net earnings of $1.2 billion in 1999 ($9.94
per share, diluted).
The 2000 earnings include
an extraordinary loss of $6 million, after tax, on early extinguishment
of debt and the cumulative effect of a change in accounting principle of
$209 million, net of tax. The 2000 earnings also include an impairment
loss of $38 million, net of tax ($0.33 per share, diluted), related to
the Company' s equity investment in Priceline.com, as well as a gain of
$69 million, net of tax ($0.60 per share, diluted), on the sale of its
investment in GetThere.com (see Note 6 "Investments" in the Notes to
Consolidated Financial Statements).
The 1999 earnings include
an extraordinary loss of $3 million, after tax, on early extinguishment
of debt and an after-tax gain of $468 million ($4.19 per share, diluted),
on the sale of certain of the Company' s investments, as further described
in Note 6 "Investments" in the Notes to Consolidated Financial Statements.
2000 Compared with 1999 -
Operating Revenues.
Operating revenues increased $1.3 billion (7%) and United' s revenue
per available seat mile (unit revenue) increased 8% to 11.02 cents.
Passenger revenues increased $1.1 billion (7%) primarily due to a 6% increase
in yield to 13.25 cents. United' s revenue passenger miles increased
1%, while available seat miles decreased 1%, resulting in a passenger load
factor increase of 1.3 points to 72.3%. The decrease in available
seat miles reflects the Company' s response to the operational difficulties
as well as the impact of Economy Plus. The following analysis by
market is based on information reported to the DOT:
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Cargo revenues increased $25 million (3%) on increased freight ton miles of 3%, as freight yields remained constant and mail yields increased 1%. Other operating revenues increased $152 million (19%) primarily due to increased fuel sales to third parties and additional revenues from operating agreements with Galileo International, Inc. ("Galileo"), offset by the decrease in other revenues related to the change in accounting for Mileage Plus sale of miles to third parties (see Note 1i "Summary of Significant Accounting Policies - Mileage Plus Awards" in the Notes to Consolidated Financial Statements).
Operating Expenses.
Operating expenses increased $2.1 billion (12%) and United' s cost per
available seat mile increased 13% from 9.41 to 10.63 cents. Salaries
and related costs increased $1.1 billion (19%) due to a new salary program
implemented for non-contract employees, the impact of the new ALPA contract,
and the estimated costs of IAM contracts which became amendable in July
2000 and are currently under negotiation. ESOP compensation expense
decreased $609 million (81%) as the Company discontinued recording ESOP
compensation expense once the final ESOP shares were committed to be released
in April 2000. Aircraft fuel increased $735 million (41%) due to
a 40% increase in the cost of fuel to 81.0 cents per gallon. Commissions
decreased $114 million (10%) due to a change in the commission structure
implemented in the fourth quarter of 1999. Purchased services increased
$136 million (9%) due to increases in computer reservations fees and credit
card discount fees. Depreciation and amortization increased $138
million (16%) due to an increase in the number of owned aircraft and losses
on disposition of aircraft and other equipment. Cost of sales increased
$436 million (72%) primarily due to costs associated with fuel sales to
third parties.
Other Income and Expense.
Other income (expense) amounted to $223 million in expense in 2000
compared to $551 million in income in 1999. Interest expense
increased $40 million (11%) due to increased debt issuances in 2000.
Interest income increased $33 million (49%) due to higher investment balances.
In addition, 2000 included a $109 million gain on the sale of GetThere.com
stock and a $61 million investment impairment related to warrants held
in Priceline.com, while 1999 included a $669 million gain on the sale of
Galileo stock and a $62 million gain on the sale of Equant N.V. ("Equant")
stock.
1999 Compared with 1998 -
Operating Revenues.
Operating revenues increased $466 million (3%) and United' s revenue per
available seat mile (unit revenue) increased 1% to 10.17 cents. Passenger
revenues increased $264 million (2%) due to a 1% increase in United' s
revenue passenger miles and a 1% increase in yield to 12.48 cents.
Available seat miles across the system were up 2% year over year; however,
passenger load factor decreased 0.6 points to 71.0% as traffic only increased
1% system-wide. The following analysis by market is based on information
reported to the DOT:
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| North America |
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| Pacific |
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| Atlantic |
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| System |
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Cargo revenues decreased
$7 million (1%) despite increased freight ton miles of 5%, as a 4% decline
in freight yield combined with a 3% decline in mail yield. Other
operating revenues increased $209 million (19%) due to increases in frequent
flyer program partner related revenues and fuel sales to third parties.
Operating Expenses.
Operating expenses increased $553 million (3%) and United' s cost per available
seat mile increased 2% from 9.24 to 9.41 cents. ESOP compensation
expense decreased $73 million (9%), reflecting the decrease in the estimated
average fair value of ESOP stock committed to be released to employees
as a result of UAL' s lower common stock price. Salaries and related
costs increased $329 million (6%) as a result of increased staffing in
customer-contact positions, as well as salary increases for most labor
groups which took effect July 1, 1998. Commissions decreased $186
million (14%) due to a change in the commission structure implemented in
the third quarter 1998 as well as a slight decrease in commissionable revenues.
In addition, in October 1999, the Company reduced the base commissions
for tickets purchased in the U.S. and Canada to 5%, subject to roundtrip
caps of $50 and $100 for domestic and international tickets, respectively.
Purchased services increased $70 million (5%) due to increases in computer
reservations fees and year 2000-related expenses. Depreciation and
amortization increased $74 million (9%) due to an increase in the number
of owned aircraft and losses on disposition of aircraft partially offset
by changes in depreciable lives of certain aircraft. In addition,
United wrote-down two non-operating B747-200 aircraft to net realizable
value. Cost of sales increased $128 million (27%) primarily due to
costs associated with fuel sales to third parties. Aircraft maintenance
increased $65 million (10%) due to an increase in heavy maintenance visits.
Other Income and Expense.
Other income (expense) amounted to $551 million in income in 1999 compared
to $222 million in expense in 1998. Interest capitalized, primarily
on aircraft advance payments, decreased $30 million (29%). Interest
income increased $9 million (15%) due to higher investment balances.
In addition, 1999 included a $669 million gain on the sale of Galileo stock
and a $62 million gain on the sale of Equant stock.
Liquidity and Capital Resources
Liquidity -
UAL' s total of cash and
cash equivalents and short-term investments was $2.3 billion at December
31, 2000, compared to $689 million at December 31, 1999. Operating
activities during the year generated $2.5 billion.
Property additions, including
aircraft, aircraft spare parts, facilities and ground equipment, amounted
to $2.5 billion, while property dispositions resulted in proceeds of $324
million. In 2000, United took delivery of four A319, twelve A320,
one B747, three B767 and eight B777 aircraft. Twenty-six of these
aircraft were purchased and two were acquired under capital leases.
Five of the aircraft purchased during the year were later sold and then
leased back under capital leases. In addition, United retired three
DC10-10, four DC10-30F and seven B747 aircraft.
During 2000, the Company
made payments of $81 million for the repurchase of 1.3 million shares of
common stock. Financing activities included the issuance of $2.4
billion in equipment trust certificates, as well as principal payments
under debt and capital lease obligations of $441 million and $283 million,
respectively. Included in the debt payments was the retirement of
$116 million of long-term debt prior to maturity. Additionally, UAL
issued, and subsequently retired, $200 million in long-term debt during
the period to finance the acquisition of aircraft. UAL may also from
time to time repurchase on the open market, in privately negotiated purchases
or otherwise, its debt and equity securities.
Included in cash and cash
equivalents at December 31, 2000 were $39 million of securities held by
third parties under securities lending agreements, as well as collateral
in the amount of 102% of the value of the securities lent. United
is obligated to reacquire the securities at the end of the contract.
As of December 31, 2000,
UAL had a working capital deficit of $2.0 billion as compared to $2.5 billion
at December 31, 1999. Historically, UAL has operated with a working
capital deficit and, as in the past, UAL expects to meet all of its obligations
as they become due.
Prior Years.
Operating activities in 1999 generated cash flows of $2.4 billion and the
Company' s sale of part of its investments in Galileo and Equant provided
$828 million in cash. Cash was used primarily to fund net additions
to property and equipment ($2.2 billion) and to repurchase common stock
($261 million). Financing activities also included principal payments
under debt and capital lease obligations of $513 million and $248 million,
respectively.
Operating activities in 1998
generated cash flows of $3.2 billion. Cash was used primarily to
fund net additions to property and equipment ($2.4 billion) and to repurchase
common stock ($459 million). Financing activities also included repayments
of long-term debt totaling $271 million and payments under capital leases
of $322 million, as well as aircraft lease deposits of $154 million.
Additionally, the Company issued $928 million in debt and used part of
the proceeds to purchase $693 million in equipment certificates under Company
operating leases.
Capital Commitments -
At December 31, 2000, commitments
for the purchase of property and equipment, principally aircraft, approximated
$4.7 billion, after deducting advance payments. Of this amount, an
estimated $2.5 billion is due to be spent in 2001. For further details,
see Note 18 "Commitments, Contingent Liabilities and Uncertainties" in
the Notes to Consolidated Financial Statements.
Capital Resources -
Funds necessary to finance
aircraft acquisitions are expected to be obtained from internally generated
funds, external financing arrangements or other external sources.
Additionally, during 2001, UAL anticipates requiring additional financing
for its planned acquisition of US Airways.
At December 31, 2000, UAL
and United had an effective shelf registration statement on file with the
Securities and Exchange Commission to offer up to $2.5 billion of securities,
including secured and unsecured debt, equipment trust and pass through
certificates or a combination thereof. United also has available
approximately $1.7 billion in short-term revolving credit facilities, as
well as a separate $227 million short-term borrowing facility, as described
in Note 8 "Short-Term Borrowings" in the Notes to Consolidated Financial
Statements.
At December 31, 2000, United'
s senior unsecured debt was rated BB+ by Standard and Poor' s ("S&P")
and Baa3 by Moody' s Investors Service Inc. ("Moody' s"). UAL' s
Series B preferred stock and redeemable preferred securities were rated
B+ by S&P and Ba3 by Moody' s. Immediately following UAL' s announcement
of the planned acquisition of US Airways, S&P placed UAL and United
securities on CreditWatch with negative implications.
Other Information
Labor Agreements -
On April 12, 2000, the Company'
s contract with ALPA became amendable and in October 2000, the parties
signed a new contract. The agreement, which will become amendable
September 1, 2004, includes provisions for an immediate increase in wages
of 21.5% to 28.7%, retroactive to April 12, as well as additional annual
increases of 4.5% to 5.6% for the duration of the contract. Additionally,
the contract allows United Express carriers to increase the number of small
jets beyond the current 65-jet limit up to an additional 150 immediately
as replacements for existing turboprops, with additional increases in small
jets as United' s fleet grows. United may also share in profits and
losses of revenues with foreign carriers with whom United has antitrust
immunity, provided United gets its proportionate share of the flying.
In addition, the Company has reached agreement with ALPA to provide United
pilots with protections that are realistically representative of their
pre-merger expectations.
On July 12, 2000, the Company'
s contracts with the IAM became amendable. The Company has been in
negotiations with the IAM since January 2000 for new contracts. Since
September 2000, the negotiations have been conducted with the assistance
of the National Mediation Board. Under the terms of the Railway Labor
Act, United' s current agreements with the IAM will remain in effect while
negotiations continue. The Company has agreed that wage increases
under the new IAM contracts will be retroactive to July 12, 2000 and the
estimated costs of those contracts have been included in the Company' s
results for 2000. The Company and the IAM had also initialed an agreement
on December 12, 2000 that would have provided for job protection benefits
to most mechanics, including relocation protection in the case of displacement
due to the merger transaction. The IAM has recently notified the
Company that they consider that agreement to be rescinded. Talks
are ongoing and United hopes to reach agreement with the IAM on these issues.
The Company' s contract with
the AFA, which becomes amendable in 2006, provides for a mid-term wage
conference in the first quarter of 2001. However, in September 2000,
United and the AFA began wage discussions unrelated to the contract that
would have avoided the need for this wage conference. The parties
also began addressing integration issues related to United' s acquisition
of US Airways at this time. The Company and the AFA have not reached
agreement on these issues to date and the Company began wage conference
negotiations per the contract in February 2001. The Company is continuing
to seek to resolve all outstanding issues with the AFA, although arbitration
may be required per the collective bargaining agreement, if an agreement
cannot be reached on wages. It is the Company' s desire through these
discussions to avoid any AFA operational action that would significantly
inconvenience its customers or disrupt schedules. However, should
such action occur, the Company will take appropriate steps to minimize
the impact to the Company and its customers.
E-Commerce -
In October 2000, UAL announced
the formation of United NewVentures, Inc., a wholly owned subsidiary which
will create businesses to provide innovative solutions for its customers,
strengthen United' s airline business and create incremental value for
UAL' s stockholders. The subsidiary employs about 100 people, primarily
from the Company' s former e-commerce organization and consists of two
divisions, United NetWorks and United NetVentures.
United NetWorks focuses on
expanding United-branded e-commerce and wireless activities, including
the recently redesigned united.com web site, as well as assuming responsibility
for marketing the sale of Mileage Plus miles to third parties. Gross
air bookings on united.com in 2000 grew more than 101% over last year.
Total passenger revenue from sales over the Internet reached $755 million
for the year compared to $400 million for 1999, an 89% increase.
United NetVentures will manage
United' s investments in other Internet ventures, including two new multi-airline
travel-oriented web sites, Orbitz and Hotwire, and identify new business
opportunities in e-commerce.
Foreign Operations -
United generates revenues
and incurs expenses in numerous foreign currencies. These expenses
include aircraft leases, commissions, catering, personnel expense, advertising
and distribution costs, customer service expenses and aircraft maintenance.
Changes in foreign currency exchange rates impact operating income through
changes in foreign currency-denominated operating revenues and expenses.
Despite the adverse (favorable) effects a strengthening (weakening) foreign
currency may have on U.S. originating traffic, a strengthening (weakening)
of foreign currencies tends to increase (decrease) reported revenue and
operating income because United' s foreign currency-denominated operating
revenue generally exceeds its foreign currency-denominated operating expense
for each currency.
With a worldwide network
and significant sales and marketing efforts in the U.S. as well as every
major economic region in the world, United is able to mitigate its exposure
to fluctuations in any single foreign currency. The Company' s biggest
net exposures are typically for Japanese yen, Hong Kong dollars, Australian
dollars, British pounds and the euro. During 2000, yen-denominated
operating revenue net of yen-denominated operating expense was approximately
21 billion yen (approximately $195 million), Hong Kong dollar-denominated
operating revenue net of Hong Kong dollar-denominated operating expense
was approximately 1,397 million Hong Kong dollars (approximately $179 million),
British pound-denominated operating revenue net of British pound-denominated
operating expense was approximately 97 million British pounds (approximately
$142 million), Australian dollar-denominated operating revenue net of Australian
dollar-denominated operating expense was approximately 154 million Australian
dollars (approximately $90 million), and euro-denominated operating revenue
net of euro-denominated operating expense was approximately 34 million
euro (approximately $33 million).
To reduce the impact of exchange
rate fluctuations on United' s financial results, the Company hedged some
of the risk of exchange rate volatility on its anticipated future foreign
currency revenues by purchasing put options (consisting of Japanese yen,
euro, Australian dollars and British pounds) and selling Hong Kong dollar
forwards. To reduce hedging costs, the Company sells a correlation
option in the first four currencies referred to above. United also
attempts to reduce its exposure to transaction gains and losses by converting
excess local currencies generated to U.S. dollars on a timely basis and
by entering into currency forward or exchange contracts. The total
notional amount of outstanding currency options and forward exchange contracts,
and their respective fair market values as of December 31, 2000, are summarized
in Item 7A. Quantitative and Qualitative Disclosures About Market
Risk.
United' s foreign operations
involve insignificant amounts of physical assets; however, the Company
does have sizable intangible assets related to acquisitions of Atlantic
and Latin America route authorities. Operating authorities in international
markets are governed by bilateral aviation agreements between the United
States and foreign countries. Changes in U.S. or foreign government
aviation policies can lead to the alteration or termination of existing
air service agreements that could adversely impact the value of United'
s international route authority. Significant changes in such policies
could also have a material impact on UAL' s operating revenues and results
of operations. In addition, the Financial Accounting Standards Board
("FASB") has issued an Exposure Draft, "Business Combinations and Intangible
Assets - Accounting for Goodwill," which could impact the Company' s accounting
for these assets. For further details, see "New Accounting Pronouncements"
below.
Airport Rents and Landing Fees -
United is charged facility
rental and landing fees at virtually every airport at which it operates.
In recent years, many airports have increased or sought to increase rates
charged to airlines as a means of compensating for increasing demands upon
airport revenues. Airlines have challenged certain of these increases
through litigation and in some cases have not been successful. The
FAA and the DOT have instituted an administrative hearing process to judge
whether rate increases are legal and valid. However, to the extent
the limitations on such charges are relaxed or the ability of airlines
to challenge such charges is restricted, the rates charged by airports
may increase substantially. Management cannot predict either the
likelihood or the magnitude of any such increase.
Environmental and Legal Contingencies -
United has been named as
a Potentially Responsible Party at certain Environmental Protection Agency
("EPA") cleanup sites which have been designated as Superfund Sites.
United' s alleged proportionate contributions at the sites are minimal;
however, at sites where the EPA has commenced litigation, potential liability
is joint and several. Additionally, United has participated and is
participating in remediation actions at certain other sites, primarily
airports. The estimated cost of these actions is accrued when it
is determined that it is probable that United is liable. Environmental
regulations and remediation processes are subject to future change, and
determining the actual cost of remediation will require further investigation
and remediation experience. Therefore, the ultimate cost cannot be
determined at this time. However, while such cost may vary from United'
s current estimate, United believes the difference between its accrued
reserve and the ultimate liability will not be material.*
UAL has certain other contingencies
resulting from this and other litigation and claims incident to the ordinary
course of business. Management believes, after considering a number
of factors, including (but not limited to) the views of legal counsel,
the nature of such contingencies and prior experience, that the ultimate
disposition of these contingencies is not likely to materially affect UAL'
s financial condition, operating results or liquidity.*
Common Stock Dividends -
During 2000, UAL instituted an annual dividend of $1.25 per share on UAL common stock. Accordingly, UAL paid $36 million ($0.3125 per share) in common dividends in each of the second, third and fourth quarters of 2000. In addition, on December 14, UAL' s Board of Directors declared a dividend of $0.3125 per share payable on February 1, 2001 to stockholders of record January 16, 2001.
New Accounting Pronouncements - -
In June 1998, the FASB issued Statement of Financial Accounting Standards
No. 133, "Accounting for Derivative Instruments and Hedging Activities"
("SFAS No. 133"), which establishes accounting and reporting standards
requiring that every derivative instrument be recorded in the balance sheet
as either an asset or liability measured at its fair value. SFAS
No. 133 requires that changes in the derivative' s fair value be recognized
currently in earnings unless specific hedge accounting criteria are met.
Special accounting for qualifying hedges allows a derivative' s gains and
losses to offset related results on the hedged item in the income statement,
and requires that a company must formally document, designate and assess
the effectiveness of transactions that receive hedge accounting.
The effective date of SFAS No. 133 was delayed one year, to fiscal years
beginning after June 15, 2000. The Company plans to adopt SFAS No.
133, which was subsequently amended by SFAS No. 138, in the first quarter
of 2001. United has reviewed its various contracts to determine which
contracts meet the requirements of SFAS No. 133, as amended, and need to
be reflected as derivatives under the standard and accounted for at fair
value. Accordingly, the Company will recognize a charge for the cumulative
effect of a change in accounting principle of $8 million, net of tax, in
the first quarter 2001. In addition, the Company believes the adoption
of SFAS 133 will increase volatility in earnings and other comprehensive
income.
On February 14, 2001, the FASB issued an Exposure Draft "Business Combinations
and Intangible Assets - Accounting for Goodwill." The Exposure Draft
requires the use of a non-amortization approach to account for purchased
goodwill and for separately recognized (non-goodwill) intangible assets
that have an indefinite useful economic life. Under this approach,
goodwill and certain intangibles would not be amortized, but would be written
down and expensed against earnings only in periods in which the recorded
value is more than the fair value. The Company has not yet quantified
the impacts of adopting the new Exposure Draft, but it could result in
significant changes to the classification and recording of intangibles
and amortization expense currently on the books, as well as the accounting
for the planned acquisition of US Airways.
Outlook for 2001*-
The softening of the U.S.
economy has had an industry-wide effect on business travel; as a result,
the Company has experienced a decrease in high-yield near-term bookings.
In addition, passenger revenue performance is expected to be negatively
impacted by the reduced capacity level put in place to improve operational
reliability. Given these weaker-than-anticipated revenues, combined
with higher labor costs and fuel prices, the Company expects first-quarter
results to be substantially below the current First Call consensus of $2.82
loss per share.
The Company had previously
provided full-year guidance, including the possible effects of its planned
acquisition of US Airways, based on business plans prepared before the
onset of the revenue deterioration. With the weakening of the U.S.
economic situation, the Company has taken steps to reduce planned 2001
spending by $200 million. However, based on expectations that revenue
weakness will continue, the Company now expects performance to be below
plan levels for the full year.
The uncertainty surrounding
key factors affecting the Company' s financial performance, such as the
breadth and length of the U.S. economic slowdown, the outcome of the planned
United and US Airways merger and the outcome of labor negotiations and
the cost of fuel, among other factors, precludes the Company from providing
any specific estimates on results at this time.
Information included in the
above outlook section, as well as certain statements made throughout the
Management' s Discussion and Analysis of Financial Condition and Results
of Operations that are identified by an asterisk (*) is forward-looking
and involves risks and uncertainties that could result in actual results
differing materially from expected results. Forward-looking statements
represent the Company' s expectations and beliefs concerning future events,
based on information available to the Company as of the date of this filing.
Some factors that could significantly impact revenues, expenses, unit costs,
and the results and benefits of the pending merger between United and US
Airways include, without limitation, the airline pricing environment; industry
capacity decisions; competitors' route decisions; obtaining regulatory
approvals for the United and US Airways merger; successfully integrating
the businesses of United and US Airways; costs related to the United and
US Airways merger; achieving cost-cutting synergies resulting from the
United and US Airways merger; labor integration issues; the ultimate outcome
of existing litigation; the success of the Company' s cost-control efforts;
the cost of crude oil and jet fuel; the results of union contract negotiations
and their impact on labor costs; operational disruptions as a result of
bad weather, air traffic control-related difficulties and labor issues;
the growth of e-commerce and off-tariff distribution channels; the effective
deployment of customer service tools and resources; actions of the U.S.,
foreign and local governments; foreign currency exchange rate fluctuations;
the economic environment of the airline industry and the economic environment
in general.
Investors should not place
undue reliance on the forward-looking information contained herein, which
speaks only as of the date of this filing. UAL disclaims any intent
or obligation to update or alter any of the forward-looking statements
whether in response to new information, unforeseen events, changed circumstances
or otherwise.
Item 7A. Quantitative and Qualitative Disclosures About
Market Risk
Interest Rate Risk -
United' s exposure to market risk associated with changes in interest rates
relates primarily to its debt obligations and short-term investments.
United does not use derivative financial instruments in its investments
portfolio. United' s policy is to manage interest rate risk through
a combination of fixed and floating rate debt and entering into swap agreements,
depending upon market conditions. A portion of the borrowings are
denominated in foreign currencies which exposes the Company to risks associated
with changes in foreign exchange rates. To hedge against some of
this risk, the Company has placed foreign currency deposits (primarily
for Japanese yen, French francs, German marks and euros) to meet foreign
currency lease obligations designated in the respective currencies.
Since unrealized mark-to-market gains or losses on the foreign currency
deposits are offset by the losses or gains on the foreign currency obligations,
the Company reduces its overall exposure to foreign currency exchange rate
volatility. The fair value of these deposits is determined based
on the present value of future cash flows using an appropriate swap rate.
The fair value of long-term debt is based on the quoted market prices for
the same or similar issues or the present value of future cash flows using
a U.S. Treasury rate that matches the remaining life of the instrument,
adjusted by a credit spread.
| (In Millions) |
|
|
|
|||||||
|
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
| ASSETS | ||||||||||
| Cash equivalents | ||||||||||
| Fixed rate |
$1,674
|
$ -
|
$ -
|
$ -
|
$ -
|
$ -
|
$1,674
|
$1,674
|
$ 231
|
$ 231
|
| Avg. interest rate |
6.68%
|
-
|
-
|
-
|
-
|
-
|
6.68%
|
5.27%
|
||
| Variable rate |
$ 5
|
$ -
|
$ -
|
$ -
|
$ -
|
$ -
|
$ 5
|
$ 5
|
$ 79
|
$ 79
|
| Avg. interest rate |
6.96%
|
-
|
-
|
-
|
-
|
-
|
6.96%
|
6.23%
|
||
| Short term investments | ||||||||||
| Fixed rate |
$ 590
|
$ -
|
$ -
|
$ -
|
$ -
|
$ -
|
$ 590
|
$ 590
|
$ 298
|
$ 298
|
| Avg. interest rate |
6.96%
|
-
|
-
|
-
|
-
|
-
|
6.96%
|
5.96%
|
||
| Variable rate |
$ 75
|
$ -
|
$ -
|
$ -
|
$ -
|
$ -
|
$ 75
|
$ 75
|
$ 81
|
$ 81
|
| Avg. interest rate |
6.77%
|
-
|
-
|
-
|
-
|
-
|
6.77%
|
6.42%
|
||
| Lease deposits | ||||||||||
| Fixed rate - yen deposits |
$ -
|
$ -
|
$ -
|
$ -
|
$ -
|
$ 348
|
$ 348
|
$ 394
|
$ 378
|
$ 423
|
| Avg. interest rate |
-
|
-
|
-
|
-
|
-
|
3.06%
|
3.06%
|
3.07%
|
||
| Fixed rate - FF deposits |
$ -
|
$ -
|
$ -
|
$ -
|
$ -
|
$ 10
|
$ 10
|
$ 9
|
$ 10
|
$ 9
|
| Avg. interest rate |
-
|
-
|
-
|
-
|
-
|
5.61%
|
5.61%
|
5.61%
|
||
| Fixed rate - DM deposits |
$ 2
|
$ 2
|
$ 2
|
$ 2
|
$ 2
|
$ 304
|
$ 314
|
$ 354
|
$ 167
|
$ 177
|
| Avg. interest rate |
4.57%
|
4.53%
|
4.57%
|
4.60%
|
4.63%
|
6.79%
|
6.72%
|
6.49%
|
||
| Fixed rate - EUR deposits |
$ -
|
$ -
|
$ -
|
$ -
|
$ -
|
$ 26
|
$ 26
|
$ 24
|
$ 27
|
$ 23
|
| Avg. interest rate |
-
|
-
|
-
|
-
|
-
|
4.14%
|
4.14%
|
4.14%
|
||
| Fixed rate- USD deposits |
$ -
|
$ -
|
$ -
|
$ -
|
$ -
|
$ 12
|
$ 12
|
$ 13
|
$ 11
|
$ 10
|
| Avg. interest rate |
-
|
-
|
-
|
-
|
-
|
6.49%
|
6.49%
|
6.49%
|
||
| LONG-TERM DEBT | ||||||||||
| U. S. Dollar denominated | ||||||||||
| Fixed rate debt |
$ 87
|
$ 86
|
$ 218
|
$ 333
|
$ 246
|
$ 2,514
|
$3,484
|
$3,617
|
$1,433
|
$1,542
|
| Avg. interest rate |
7.62%
|
7.63%
|
8.43%
|
9.85%
|
7.73%
|
7.64%
|
7.90%
|
8.26%
|
||
| Variable rate debt |
$ 83
|
$ 569
|
$ 523
|
$ 17
|
$ 17
|
$ 174
|
$1,383
|
$1,383
|
$1,307
|
$1,307
|
| Avg. interest rate |
6.23%
|
5.91%
|
6.70%
|
6.34%
|
6.34%
|
6.43%
|
6.30%
|
6.26%
|
||
Foreign Currency Risk
- - United has established a foreign currency hedging program using currency
forwards and options (purchasing put options and selling correlation options)
to hedge exposure to the Japanese yen, Hong Kong dollar, British pound,
Australian dollar and the euro. The goal of the hedging program is
to effectively manage risk associated with fluctuations in the value of
the foreign currency, thereby making financial results more stable and
predictable. United does not use currency forwards or currency options
for trading purposes.
|
|
|||
| (In millions, except average contract rates) |
|
|
|
|
|
|
|
|
| Forward exchange contracts |
|
||
| Japanese Yen - Purchased forwards |
$ 141
|
112.33
|
$ (3)
|
| - - Sold forwards |
$ 66
|
114.71
|
$ -
|
| Hong Kong Dollar - Sold forwards |
$ 23
|
7.79
|
$ -
|
| French Franc - Purchased forwards |
$ 50
|
5.05
|
$ (5)
|
| Euro - Purchased forwards |
$ 140
|
1.30
|
$ (14)
|
As of December 31, 1999,
United had $144 million of Japanese yen purchased forwards outstanding
with a fair value of $(1) million, $62 million yen sold forwards with a
fair value of $0 and $402 million yen put options with a fair value of
$7 million.
Price Risk (Aircraft Fuel)
- - When market conditions indicate risk reduction is achievable, United
enters into fuel option contracts to reduce its price risk exposure to
jet fuel. The option contracts are designed to provide protection
against sharp increases in the price of aircraft fuel. Based on current
market conditions, United does not believe risk reduction is achievable
and is no longer entering into new option contracts. As market conditions
change, so may United' s hedging program. In addition, to a limited
extent, United trades short-term heating oil futures and option contracts,
which are immaterial.
At December 31, 1999, United
had $1.1 billion in purchased call option contracts for crude oil with
an estimated fair value of $120 million.
*Estimated fair values represent the amount United would pay/receive on December 31, 2000 to terminate the contracts.
Item 8. Financial Statements and Supplementary Data
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Stockholders and
Board of Directors, UAL Corporation:
We have audited the accompanying statements of consolidated financial
position of UAL Corporation (a Delaware corporation) and subsidiary companies
as of December 31, 2000 and 1999, and the related statements of consolidated
operations, consolidated cash flows and consolidated stockholders'
equity for each of the three years in the period ended December 31, 2000.
These financial statements and the schedule referred to below are the responsibility
of the Company' s management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing
the accounting principles used and significant estimates made by management,
as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of UAL
Corporation and subsidiary companies as of December 31, 2000 and 1999,
and the results of their operations and their cash flows for each of the
three years in the period ended December 31, 2000, in conformity with accounting
principles generally accepted in the United States.
As explained in Note 1 of the Notes to Consolidated Financial Statements,
effective January 1, 2000, the Company changed certain of its accounting
principles for revenue recognition as a result of the adoption of Staff
Accounting Bulletin No. 101 "Revenue Recognition in Financial Statements."
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The schedule referenced in
Item 14(a) 2 herein is presented for purposes of complying with the Securities
and Exchange Commission' s rules and is not part of the basic financial
statements. This schedule has been subjected to the auditing procedures
applied in the audit of the basic financial statements and, in our opinion,
fairly states in all material respects the financial data required to be
set forth therein in relation to the basic financial statements taken as
a whole.
/s/ Arthur Andersen LLP
ARTHUR ANDERSEN LLP
Chicago, Illinois
February 22, 2001
UAL Corporation and Subsidiary Companies
Statements of Consolidated Operations
(In millions, except per share)
|
|
|||
| Operating revenues: |
|
|
|
| Passenger |
$ 16,932
|
$ 15,784
|
$ 15,520
|
| Cargo |
931
|
906
|
913
|
| Other operating revenues |
1,489
|
1,337
|
1,128
|
|
19,352
|
18,027
|
17,561
|
|
| Operating expenses: | |||
| Salaries and related costs |
6,730
|
5,670
|
5,341
|
| ESOP compensation expense |
147
|
756
|
829
|
| Aircraft fuel |
2,511
|
1,776
|
1,788
|
| Commissions |
1,025
|
1,139
|
1,325
|
| Purchased services |
1,711
|
1,575
|
1,505
|
| Aircraft rent |
919
|
876
|
893
|
| Landing fees and other rent |
959
|
949
|
881
|
| Depreciation and amortization |
1,058
|
867
|
793
|
| Cost of sales |
1,038
|
602
|
474
|
| Aircraft maintenance |
698
|
689
|
624
|
| Other operating expenses |
1,902
|
1,737
|
1,630
|
|
18,698
|
16,636
|
16,083
|
|
| Earnings from operations |
654
|
1,391
|
1,478
|
| Other income (expense): | |||
| Interest expense |
(402)
|
(362)
|
(355)
|
| Interest capitalized |
77
|
75
|
105
|
| Interest income |
101
|
68
|
59
|
| Equity in earnings (losses) of affiliates |
(12)
|
37
|
72
|
| Gain on sale of investments |
109
|
731
|
-
|
| Investment impairment |
(61)
|
-
|
-
|
| Miscellaneous, net |
(35)
|
2
|
(103)
|
|
(223)
|
551
|
(222)
|
|
| Earnings before income taxes, distributions on preferred | |||
| securities, extraordinary item and cumulative effect |
431
|
1,942
|
1,256
|
| Provision for income taxes |
160
|
699
|
429
|
| Earnings before distributions on preferred securities, | |||
| extraordinary item and cumulative effect |
271
|
1,243
|
827
|
| Distributions on preferred securities, net of tax |
(6)
|
(5)
|
(6)
|
| Earnings before extraordinary item and cumulative effect |
265
|
1,238
|
821
|
| Extraordinary loss on early extinguishment of debt, net of tax |
(6)
|
(3)
|
- -
|
| Cumulative effect of accounting change, net of tax |
(209)
|
- -
|
- -
|
| Net earnings |
$ 50
|
$ 1,235
|
$ 821
|
|
=====
|
=====
|
=====
|
|
| Per share, basic: | |||
| Earnings before extraordinary item and cumulative effect |
$ 4.29
|
$ 21.26
|
$ 12.71
|
| Extraordinary loss on early extinguishment of debt, net of tax |
(0.13)
|
(0.06)
|
- -
|
| Cumulative effect of accounting change, net of tax |
(4.08)
|
- -
|
- -
|
| Net earnings |
$ 0.08
|
$ 21.20
|
$ 12.71
|
|
=====
|
=====
|
=====
|
|
| Per share, diluted: | |||
| Earnings before extraordinary item and cumulative effect |
$ 1.89
|
$ 9.97
|
$ 6.83
|
| Extraordinary loss on early extinguishment of debt, net of tax |
(0.06)
|
(0.03)
|
- -
|
| Cumulative effect of accounting change, net of tax |
(1.79)
|
- -
|
- -
|
| Net earnings |
$ 0.04
|
$ 9.94
|
$ 6.83
|
|
=====
|
=====
|
=====
|
|
See accompanying Notes to Consolidated Financial Statements.
UAL Corporation and Subsidiary Companies
Statements of Consolidated Financial Position
(In Millions)
|
|
||
| Assets |
|
|
| Current assets: | ||
| Cash and cash equivalents |
$ 1,679
|
$ 310
|
| Short-term investments |
665
|
379
|
| Receivables, less allowance for doubtful | ||
| accounts (2000 - - $14; 1999 - $13) |
1,216
|
1,284
|
| Aircraft fuel, spare parts and supplies, less | ||
| obsolescence allowance (2000 - $55; 1999 - $45) |
424
|
340
|
| Income tax receivables |
110
|
32
|
| Deferred income taxes |
225
|
222
|
| Prepaid expenses and other |
460
|
368
|
|
4,779
|
2,935
|
|
| Operating property and equipment: | ||
| Owned - | ||
| Flight equipment |
14,888
|
13,518
|
| Advances on flight equipment |
810
|
809
|
| Other property and equipment |
3,714
|
3,368
|
|
19,412
|
17,695
|
|
| Less - Accumulated depreciation and amortization |
5,583
|
5,207
|
|
13,829
|
12,488
|
|
| Capital leases - | ||
| Flight equipment |
3,055
|
2,929
|
| Other property and equipment |
99
|
93
|
|
3,154
|
3,022
|
|
| Less - Accumulated amortization |
640
|
645
|
|
2,514
|
2,377
|
|
|
16,343
|
14,865
|
|
| Other assets: | ||
| Investments |
435
|
750
|
| Intangibles, less accumulated amortization | ||
| (2000 - $306; 1999 - $279) |
671
|
568
|
| Aircraft lease deposits |
710
|
594
|
| Prepaid rent |
567
|
585
|
| Other |
850
|
666
|
|
3,233
|
3,163
|
|
|
$ 24,355
|
$ 20,963
|
|
|
=====
|
=====
|
|
See accompanying Notes to Consolidated Financial Statements.
UAL Corporation and Subsidiary Companies
Statements of Consolidated Financial Position
(In millions, except share data)
|
|
||
| Liabilities and Stockholders' Equity |
|
|
| Current liabilities: | ||
| Notes payable |
$
- -
|
$ 61
|
| Long-term debt maturing within one year |
170
|
92
|
| Current obligations under capital leases |
269
|
190
|
| Advance ticket sales |
1,454
|
1,412
|
| Accounts payable |
1,188
|
967
|
| Accrued salaries, wages and benefits |
1,508
|
1,002
|
| Accrued aircraft rent |
840
|
783
|
| Other accrued liabilities |
1,352
|
904
|
|
6,781
|
5,411
|
|
| Long-term debt |
4,688
|
2,650
|
| Long-term obligations under capital leases |
2,261
|
2,337
|
| Other liabilities and deferred credits: | ||
| Deferred pension liability |
136
|
70
|
| Postretirement benefit liability |
1,557
|
1,489
|
| Deferred gains |
912
|
986
|
| Accrued aircraft rent |
408
|
390
|
| Deferred income taxes |
1,241
|
1,147
|
| Other |
511
|
339
|
|
4,765
|
4,421
|
|
| Commitments and contingent liabilities (Note 18) | ||
| Company-obligated mandatorily redeemable | ||
| preferred securities of a subsidiary trust |
99
|
100
|
| Preferred stock committed to Supplemental ESOP |
571
|
893
|
| Stockholders' equity: | ||
| Serial preferred stock (Note 12) |
-
|
-
|
| ESOP preferred stock (Note 13) |
-
|
-
|
| Common stock at par, $0.01 par value; authorized 200,000,000 | ||
| shares; issued 68,834,167 shares at December 31, 2000 and | ||
| 65,771,802 shares at December 31, 1999 |
1
|
1
|
| Additional capital invested |
4,530
|
4,099
|
| Retained earnings |
1,998
|
2,138
|
| Unearned ESOP preferred stock |
-
|
(28)
|
| Stock held in treasury, at cost - | ||
| Preferred, 10,213,519 depositary shares at December 31, | ||
| 2000 and 1999 (Note 12) |
(305)
|
(305)
|
| Common, 16,295,475 shares at December 31, 2000 and | ||
| 14,995,219 shares at December 31, 1999 |
(1,179)
|
(1,097)
|
| Accumulated other comprehensive income |
152
|
352
|
| Other |
(7)
|
(9)
|
|
5,190
|
5,151
|
|
|
$ 24,355
|
$ 20,963
|
|
|
======
|
======
|
|
See accompanying Notes to Consolidated Financial Statements.
UAL Corporation and Subsidiary Companies
Statements of Consolidated Cash Flows
(In Millions)
|
|
|||
|
|
|
|
|
| Cash and cash equivalents at beginning of year |
$ 310
|
$ 390
|
$ 295
|
| Cash flows from operating activities: | |||
| Net earnings |
50
|
1,235
|
821
|
| Adjustments to reconcile to net cash provided by | |||
| operating activities - | |||
| ESOP compensation expense |
147
|
756
|
829
|
| Cumulative effect of accounting change, net of tax |
209
|
-
|
-
|
| Extraordinary loss on debt extinguishment, net of tax |
6
|
3
|
-
|
| Gain on sale of investments |
(109)
|
(731)
|
-
|
| Investment impairment |
61
|
-
|
-
|
| Pension funding less than (greater than) expense |
(21)
|
94
|
101
|
| Deferred postretirement benefit expense |
153
|
65
|
149
|
| Depreciation and amortization |
1,058
|
867
|
793
|
| Provision for deferred income taxes |
317
|
590
|
307
|
| Undistributed (earnings) losses of affiliates |
13
|
(20)
|
(62)
|
| Decrease (increase) in receivables |
68
|
(146)
|
(97)
|
| Decrease (increase) in other current assets |
(208)
|
2
|
105
|
| Increase (decrease) in advance ticket sales |
42
|
(17)
|
162
|
| Increase (decrease) in accrued income taxes |
(77)
|
(76)
|
38
|
| Increase (decrease) in accounts payable | |||
| and accrued liabilities |
761
|
(86)
|
69
|
| Amortization of deferred gains |
(66)
|
(66)
|
(64)
|
| Other, net |
68
|
(49)
|
43
|
|
2,472
|
2,421
|
3,194
|
|
| Cash flows from investing activities: | |||
| Additions to property and equipment |
(2,538)
|
(2,389)
|
(2,832)
|
| Proceeds on disposition of property and equipment |
324
|
154
|
452
|
| Proceeds on sale of investments |
147
|
828
|
-
|
| Decrease (increase) in short-term investments |
(286)
|
46
|
125
|
| Other, net |
(168)
|
(263)
|
(63)
|
|
(2,521)
|
(1,624)
|
(2,318)
|
|
| Cash flows from financing activities: | |||
| Reacquisition of preferred stock |
-
|
-
|
(3)
|
| Repurchase of common stock |
(81)
|
(261)
|
(459)
|
| Proceeds from issuance of long-term debt |
2,515
|
286
|
928
|
| Repayment of long-term debt |
(441)
|
(513)
|
(271)
|
| Principal payments under capital leases |
(283)
|
(248)
|
(322)
|
| Purchase of equipment certificates under Company leases |
(208)
|
(47)
|
(693)
|
| Decrease in equipment certificates under Company leases |
228
|
33
|
22
|
| Increase (decrease) in short-term borrowings |
(61)
|
(123)
|
184
|
| Aircraft lease deposits |
(138)
|
(20)
|
(154)
|
| Cash dividends |
(118)
|
(10)
|
(10)
|
| Other, net |
5
|
26
|
(3)
|
|
1,418
|
(877)
|
(781)
|
|
| Increase (decrease) in cash and cash equivalents during the year |
1,369
|
(80)
|
95
|
| Cash and cash equivalents at end of year |
$ 1,679
|
$ 310
|
$ 390
|
|
=====
|
=====
|
=====
|
|
See accompanying Notes to Consolidated Financial Statements.
UAL Corporation and Subsidiary Companies
Statements of Consolidated Stockholders' Equity
(In millions, except per share)
|
|
|
||||||||
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
Income |
|
|
|
| Balance at December 31, 1997 |
$ -
|
$ 1
|
$ 2,876
|
$ 309
|
$ (177)
|
$ (663)
|
$ (2)
|
$ (7)
|
$ 2,337
|
| Year ended December 31, 1998: | |||||||||
| Net earnings |
-
|
-
|
-
|
821
|
-
|
-
|
-
|
-
|
821
|
| Other comprehensive income, net: | |||||||||
| Unrealized gains on securities, net |
-
|
-
|
-
|
-
|
-
|
-
|
1
|
-
|
1
|
| Minimum pension liability adj. |
-
|
-
|
-
|
- -
|
-
|
-
|
(1)
|
-
|
(1)
|
| Total comprehensive income |
-
|
-
|
-
|
821
|
-
|
-
|
- -
|
-
|
821
|
| Cash dividends on preferred | |||||||||
| stock ($1.44 per Series B share) |
-
|
-
|
-
|
(10)
|
-
|
-
|
-
|
-
|
(10)
|
| Common stock repurchases |
-
|
-
|
-
|
-
|
-
|
(459)
|
-
|
-
|
(459)
|
| Issuance and amortization of | |||||||||
| ESOP preferred stock |
-
|
-
|
823
|
-
|
6
|
-
|
-
|
-
|
829
|
| ESOP dividend ($8.89 per share) |
-
|
-
|
42
|
(92)
|
50
|
-
|
-
|
-
|
-
|
| Preferred stock committed to | |||||||||
| Supplemental ESOP |
-
|
-
|
(177)
|
-
|
-
|
-
|
-
|
-
|
(177)
|
| Other |
- -
|
- -
|
(47)
|
- -
|
- -
|
(18)
|
-
|
5
|
(60)
|
| Balance at December 31, 1998 |
- -
|
1
|
3,517
|
1,028
|
(121)
|
(1,140)
|
(2)
|
(2)
|
3,281
|
| Year ended December 31, 1999: | |||||||||
| Net earnings |
-
|
-
|
-
|
1,235
|
-
|
-
|
-
|
-
|
1,235
|
| Other comprehensive income, net: | |||||||||
| Unrealized gains on securities, net |
-
|
-
|
-
|
- -
|
-
|
-
|
354
|
-
|
354
|
| Total comprehensive income |
-
|
-
|
-
|
1,235
|
-
|
-
|
354
|
-
|
1,589
|
| Cash dividends on preferred | |||||||||
| stock ($1.44 per Series B share) |
-
|
-
|
-
|
(10)
|
-
|
-
|
-
|
-
|
(10)
|
| Common stock repurchases |
-
|
-
|
-
|
-
|
-
|
(261)
|
-
|
-
|
(261)
|
| Issuance and amortization of | |||||||||
| ESOP preferred stock |
-
|
-
|
740
|
-
|
16
|
-
|
-
|
-
|
756
|
| ESOP dividend ($8.89 per share) |
-
|
-
|
38
|
(115)
|
77
|
-
|
-
|
-
|
-
|
| Preferred stock committed to | |||||||||
| Supplemental ESOP |
-
|
-
|
(201)
|
-
|
-
|
-
|
-
|
-
|
(201)
|
| Other |
- -
|
- -
|
5
|
- -
|
- -
|
(1)
|
- -
|
(7)
|
(3)
|
| Balance at December 31, 1999 |
- -
|
1
|
4,099
|
2,138
|
(28)
|
(1,402)
|
352
|
(9)
|
5,151
|
| Year ended December 31, 2000: | |||||||||
| Net earnings |
-
|
-
|
-
|
50
|
-
|
-
|
-
|
-
|
50
|
| Other comprehensive income, net: | |||||||||
| Unrealized losses on securities, net |
-
|
-
|
-
|
-
|
-
|
-
|
(196)
|
-
|
(196)
|
| Minimum pension liability adj. |
-
|
-
|
-
|
- -
|
-
|
-
|
(4)
|
-
|
(4)
|
| Total comprehensive income |
-
|
-
|
-
|
50
|
-
|
-
|
(200)
|
-
|
(150)
|
| Cash dividends on preferred | |||||||||
| stock ($1.44 per Series B share) |
-
|
-
|
-
|
(10)
|
-
|
-
|
-
|
-
|
(10)
|
| Cash dividends on common | |||||||||
| stock ($1.25 per share) |
-
|
-
|
-
|
(144)
|
-
|
-
|
-
|
-
|
(144)
|
| Common stock repurchases |
-
|
-
|
-
|
-
|
-
|
(81)
|
-
|
-
|
(81)
|
| Issuance and amortization of | |||||||||
| ESOP preferred stock |
-
|
-
|
147
|
-
|
-
|
-
|
-
|
-
|
147
|
| ESOP dividend ($8.89 per share) |
-
|
-
|
8
|
(36)
|
28
|
-
|
-
|
-
|
-
|
| Preferred stock committed to | |||||||||
| Supplemental ESOP |
-
|
-
|
322
|
-
|
-
|
-
|
-
|
-
|
322
|
| Other |
- -
|
- -
|
(46)
|
- -
|
- -
|
(1)
|
- -
|
2
|
(45)
|
| Balance at December 31, 2000 |
$ -
|
$ 1
|
$ 4,530
|
$ 1,998
|
$ -
|
$(1,484)
|
$ 152
|
$ (7)
|
$ 5,190
|
|
====
|
====
|
=====
|
=====
|
====
|
=====
|
====
|
====
|
====
|
|
See accompanying Notes to Consolidated Financial Statements.
Notes to Consolidated Financial Statements
(1) Summary of Significant Accounting Policies
(a) Basis of
Presentation - UAL Corporation ("UAL") is a holding company whose
principal subsidiary is United Air Lines, Inc. ("United"). The consolidated
financial statements include the accounts of UAL and all of its majority-owned
affiliates (collectively "the Company"). All significant intercompany
transactions are eliminated. Certain prior-year financial statement items
have been reclassified to conform to the current year' s presentation.
(b) Use of Estimates
- - The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
(c) Airline Revenues
- - Passenger fares and cargo revenues are recorded as operating revenues
when the transportation is furnished. The value of unused passenger
tickets is included in current liabilities.
(d) Cash and
Cash Equivalents and Short-term Investments - Cash in excess of
operating requirements is invested in short-term, highly liquid, income-producing
investments. Investments with a maturity of three months or less
on their acquisition date are classified as cash and cash equivalents.
Other investments are classified as short-term investments.
From time to time, United
lends certain of its securities classified as cash and cash equivalents
and short-term investments to third parties. United requires collateral
in an amount exceeding the value of the securities and is obligated to
reacquire the securities at the end of the contract. United accounts
for these transactions as secured borrowings rather than sales and does
not remove the securities from the balance sheet. At December 31,
2000, United was obligated to repurchase $39 million of securities lent
to third parties.
At December 31, 2000 and
1999, $598 million and $406 million, respectively, of investments in debt
securities included in cash and cash equivalents and short-term investments
were classified as available-for-sale, and $1.7 billion and $177 million,
respectively, were classified as held-to-maturity. Investments in
debt securities classified as available-for-sale are stated at fair value
based on the quoted market prices for the securities, which does not differ
significantly from their cost basis. Investments classified as held-to-maturity
are stated at cost which approximates market due to their short-term maturities.
The gains or losses from sales of available-for-sale securities are included
in interest income for each respective year.
(e) Derivative Financial Instruments -
Foreign Currency - - From time to time, United enters into Japanese yen forward exchange contracts to minimize gains and losses on the revaluation of short-term yen-denominated liabilities. The yen forwards typically have short-term maturities and are marked to fair value at the end of each accounting period. The unrealized mark-to-market gains and losses on the yen forwards generally offset the losses and gains recorded on the yen liabilities.
United has also entered
into forwards and swaps to reduce exposure to currency fluctuations on
Japanese yen-, euro- and French franc-denominated capital lease obligations.
The cash flows of the forwards and swaps mirror those of the capital leases.
The premiums on the forwards and swaps, as measured at inception, are being
amortized over their respective lives as components of interest expense.
Any gains or losses realized upon early termination of these forwards and
swaps are deferred and recognized in income over the remaining life of
the underlying exposure.
The Company hedges
some of the risks of exchange rate volatility on its anticipated future
Japanese yen, euro, Australian dollar and British pound revenues by purchasing
put options with little or no intrinsic value and on Hong Kong dollar revenues
by entering into forward contracts. The amount and duration of these
options are synchronized with the expected revenues, and thus, the put
options have been designated as a hedge. The premiums on purchased
option contracts are amortized over the lives of the contracts. Unrealized
gains on purchased put option contracts are deferred until contract expiration
and then recognized as a component of passenger revenue. To reduce
hedging costs, the Company sells a correlation option in the first four
currencies referred to above. The unrealized mark-to-market gains
and losses on the correlation options are included in Miscellaneous, net,
net of premiums received.
Interest Rates
- - United may from time to time, enter into swaps to reduce exposure
to interest rate fluctuations in connection with certain debt, capital
leases and operating leases. The cash flows of the swaps mirror those
of the underlying exposures. The premiums on the swaps, as measured
at inception, are amortized over their respective lives as components of
interest expense. Any gains or losses realized upon the early termination
of these swaps are deferred and recognized in income over the remaining
life of the underlying exposure.
Aircraft Fuel
- - Under favorable market conditions, United uses purchased call options
to hedge a portion of its price risk related to aircraft fuel purchases.
The purchased call options have been designated as a hedge. Gains
or losses on hedge positions, net of premiums paid, are recognized upon
contract expiration as a component of aircraft fuel inventory. In
addition, to a limited extent, United trades short-term heating oil futures
contracts. Unrealized losses on these contracts are recorded currently
in income while unrealized gains are deferred until contract expiration.
Both gains and losses are recorded as a component of aircraft fuel expense.
(f) Aircraft
Fuel, Spare Parts and Supplies - Aircraft fuel and maintenance
and operating supplies are stated at average cost. Flight equipment
spare parts are stated at average cost less an obsolescence allowance.
(g) Operating
Property and Equipment - Owned operating property and equipment
is stated at cost. Property under capital leases, and the related
obligation for future lease payments, are initially recorded at an amount
equal to the then present value of those lease payments.
Depreciation and amortization
of owned depreciable assets is based on the straight-line method over their
estimated service lives. Leasehold improvements are amortized over
the remaining period of the lease or the estimated service life of the
related asset, whichever is less. Aircraft are depreciated to estimated
salvage values, generally over lives of 4 to 30 years; buildings are depreciated
over lives of 25 to 45 years; and other property and equipment are depreciated
over lives of 3 to 15 years.
Properties under capital
leases are amortized on the straight-line method over the life of the lease,
or in the case of certain aircraft, over their estimated service lives.
Lease terms are 10 to 30 years for aircraft and flight simulators and 25
years for buildings. Amortization of capital leases is included in
depreciation and amortization expense.
Maintenance and repairs,
including the cost of minor replacements, are charged to maintenance expense
accounts. Costs of additions to and renewals of units of property
are charged to property and equipment accounts.
(h) Intangibles
- - Intangibles consist primarily of route acquisition costs and intangible
pension assets (see Note 16 "Retirement and Postretirement Plans").
Route acquisition costs are amortized over 40 years. During 2001,
the FASB issued an Exposure Draft "Business Combinations and Intangible
Assets - Accounting for Goodwill" which could impact the Company' s accounting
for intangible assets. See Other Information, "New Accounting
Pronouncements" in Management' s Discussion and Analysis of Financial
Condition and Results of Operations.
(i) Mileage
Plus Awards - United accrues the estimated incremental cost of
providing free travel awards earned under its Mileage Plus frequent flyer
program when such award levels are reached. United, through its wholly
owned subsidiary, Mileage Plus Holdings, Inc., sells mileage credits to
participating partners in the Mileage Plus program.
Effective January 1,
2000, the Company changed its method of accounting for the sale of mileage
to participating partners in its Mileage Plus program, in accordance with
Staff Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements."
Under the new accounting method, a portion of revenue from the sale of
mileage (previously recognized in other revenue) is deferred and recognized
as passenger revenue when the transportation is provided. Accordingly,
UAL has recorded a charge of $209 million, net of tax, for the cumulative
effect of a change in accounting principle to reflect the application of
the accounting method to prior years. This change resulted in a reduction
to revenues of approximately $38 million for 2000 and would have reduced
1999 revenues by $45 million.
The pro forma effect
of the accounting change on net income and earnings per share as previously
reported for 1999 and prior years is as follows:
|
|
|
|
|
|
||
| Earnings before extraordinary | ||||||
| items (in millions) | As reported |
$ 1,238
|
$ 821
|
$ 958
|
$ 600
|
$ 378
|
| Pro forma |
$ 1,209
|
$ 774
|
$ 931
|
$ 553
|
$ 348
|
|
| Earnings per share before | ||||||
| extraordinary items | ||||||
| Basic | As reported |
$ 21.26
|
$12.71
|
$14.98
|
$ 8.76
|
$ 6.98
|
| Pro forma |
$ 20.71
|
$11.87
|
$14.52
|
$ 7.92
|
$ 6.37
|
|
| Diluted | As reported |
$ 9.97
|
$ 6.83
|
$ 9.04
|
$ 5.85
|
$ 5.23
|
| Pro forma |
$ 9.71
|
$ 6.38
|
$ 8.76
|
$ 5.29
|
$ 4.81
|
|
| Net earnings (in millions) | As reported |
$ 1,235
|
$ 821
|
$ 949
|
$ 533
|
$ 349
|
| Pro forma |
$ 1,206
|
$ 774
|
$ 922
|
$ 486
|
$ 319
|
|
| Net earnings per share | ||||||
| Basic | As reported |
$ 21.20
|
$12.71
|
$14.83
|
$ 7.57
|
$ 6.39
|
| Pro forma |
$ 20.65
|
$11.87
|
$14.37
|
$ 6.73
|
$ 5.78
|
|
| Diluted | As reported |
$ 9.94
|
$ 6.83
|
$ 8.95
|
$ 5.06
|
$ 4.82
|
| Pro forma |
$ 9.68
|
$ 6.38
|
$ 8.67
|
$ 4.50
|
$ 4.40
|
(j) Deferred
Gains - Gains on aircraft sale and leaseback transactions are deferred
and amortized over the lives of the leases as a reduction of rental expense.
(k) Advertising- Advertising costs, which are
included in other operating expenses, are expensed as incurred. Advertising
expense was $269 million, $232 million and $213 million for the years ended
December 31, 2000, 1999 and 1998, respectively.
(2) Employee Stock Ownership Plans and Recapitalization
On July 12, 1994, the
stockholders of UAL approved a plan of recapitalization to provide an approximately
55% equity interest in UAL to certain employees of United in exchange for
wage concessions and work-rule changes. The employees' equity
interest was allocated to individual employees through the year 2000 under
Employee Stock Ownership Plans ("ESOPs") which were created as a part of
the recapitalization.
The ESOPs cover employees
represented by ALPA, the IAM and U.S. management and salaried employees.
The ESOPs include a "Leveraged ESOP," a "Non-Leveraged ESOP" and a "Supplemental
ESOP." Both the Leveraged ESOP and the Non-Leveraged ESOP are tax-qualified
plans while the Supplemental ESOP is not a tax-qualified plan. Shares
are delivered to employees primarily through the Leveraged ESOP, then through
the Non-Leveraged ESOP, and finally, through the Supplemental ESOP.
The equity interests
were delivered to employees through two classes of preferred stock (Class
1 and Class 2 ESOP Preferred Stock, collectively "ESOP Preferred Stock"),
and the voting interests were delivered through three separate classes
of preferred stocks (Class P, M and S Voting Preferred Stock, collectively,
"Voting Preferred Stock"). The Class 1 ESOP Preferred Stock was delivered
to an ESOP trust in seven separate sales under the Leveraged ESOP, the
last of which occurred on January 5, 2000. Based on Internal Revenue
Code Limitations, shares of the Class 2 ESOP Preferred Stock are either
contributed to the Non-Leveraged ESOP or allocated as "book entry" shares
to the Supplemental ESOP annually through the year 2000. The classes
of preferred stock are described more fully in Note 13, "ESOP Preferred
Stock."
The Leveraged ESOP
and Non-Leveraged ESOP are being accounted for under AICPA Statement of
Position 93-6, "Employers' Accounting for Employee Stock Ownership
Plans." For the Leveraged ESOP, as shares of Class 1 ESOP Preferred
Stock are sold to an ESOP trust, the Company reports the issuance as a
credit to additional capital invested and records a corresponding charge
to unearned ESOP preferred stock. ESOP compensation expense is recorded
for the average fair value of the shares committed to be released during
the period with a corresponding credit to unearned ESOP preferred stock
for the cost of the shares. Any difference between the fair value
of the shares and the cost of the shares is charged or credited to additional
capital invested. For the Non-Leveraged ESOP, the Class 2 ESOP Preferred
Stock is recorded as additional capital invested as the shares are committed
to be contributed, with the offsetting charge to ESOP compensation expense.
The ESOP compensation expense is based on the average fair value of the
shares committed to be contributed. The Supplemental ESOP is being
accounted for under Accounting Principles Board Opinion 25, "Accounting
for Stock Issued to Employees" ("APB 25").
Shares of ESOP Preferred
Stock are legally released or allocated to employee accounts as of year-end.
Dividends on the ESOP Preferred Stock are also paid at the end of the year.
Dividends on unallocated shares are used by the ESOP to pay down the loan
from UAL and are not considered dividends for financial reporting purposes.
Dividends on allocated shares are satisfied by releasing shares from the
ESOP' s suspense account to the employee accounts and are charged to equity.
During 2000, 2,390,931
shares of Class 1 ESOP Preferred Stock, 434,465 shares of Class 2 ESOP
Preferred Stock and 2,819,479 shares of Voting Preferred Stock were allocated
to employee accounts, and another 248,572 shares of Class 2 ESOP Preferred
Stock were allocated in the form of "book entry" shares, effective December
31, 1999. Another 198,629 shares of Class 2 ESOP Preferred Stock
previously allocated in book entry form were issued and either contributed
to the qualified plan or converted and sold on behalf of terminating employees.
At December 31, 2000, the year-end allocation of Class 1 ESOP Preferred
Stock to employee accounts had not yet been completed; however, there were
669,820 shares of Class 1 ESOP Preferred Stock committed to be released.
For the Class 2 ESOP Preferred Stock, 187,276 shares were committed to
be contributed to employees at December 31, 2000. The fair value
of the unearned ESOP shares recorded on the balance sheet at December 31,
1999 was $41 million.
For the Class 2 ESOP
Preferred Stock committed to be contributed to employees under the Supplemental
ESOP, employees can elect to receive their "book entry" shares in cash
upon termination of employment. The estimated fair value of such
shares at December 31, 2000 and 1999 was $304 million and $954 million,
respectively.
(3) Other Income (Expense) - Miscellaneous
Included in Other income
(expense) - "Miscellaneous, net" was $(22) million, $4 million and $(84)
million in foreign exchange gains (losses) in 2000, 1999 and 1998, respectively.
(4) Other Comprehensive Income
The following table presents
the tax effect of those items included in other comprehensive income:
|
|
|||||||||
| (In Millions) |
|
|
|
||||||
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
| Unrealized holding gains (losses) | |||||||||
| arising during period |
$(297)
|
$101
|
$(196)
|
$ 547
|
$ (193)
|
$ 354
|
$ 1
|
$ -
|
$ 1
|
| Minimum pension liability |
(6)
|
2
|
(4)
|
-
|
-
|
-
|
(1)
|
-
|
(1)
|
| Total other comprehensive income |
$(303)
|
$103
|
$(200)
|
$ 547
|
$ (193)
|
$ 354
|
$ -
|
$ -
|
$ -
|
|
===
|
===
|
===
|
===
|
===
|
===
|
===
|
===
|
===
|
|
Unrealized gains (losses)
on securities primarily represent gains (losses) on the Company' s investments
in Galileo and Equant as discussed in Note 6 "Investments."
(5) Per Share Amounts
Basic earnings per share
were computed by dividing net income before extraordinary item and cumulative
effect by the weighted-average number of shares of common stock outstanding
during the year. In addition, diluted earnings per share amounts
include potential common shares, including common shares issuable upon
conversion of ESOP shares committed to be released.
| Earnings Attributable to Common Stockholders (in millions) |
|
|
|
| Net income before extraordinary item and cumulative effect |
$ 265
|
$1,238
|
$ 821
|
| Preferred stock dividends |
(46)
|
(125)
|
(102)
|
| Earnings attributable to common stockholders (Basic and Diluted) |
$ 219
|
$1,113
|
$ 719
|
|
====
|
====
|
====
|
|
| Shares (in millions) | |||
| Weighted average shares outstanding (Basic) |
51.3
|
52.3
|
56.5
|
| Convertible ESOP preferred stock |
64.5
|
58.0
|
47.1
|
| Other |
0.7
|
1.3
|
1.6
|
| Weighted average number of shares (Diluted) |
116.5
|
111.6
|
105.2
|
|
====
|
====
|
====
|
|
| Earnings Per Share | |||
| Basic |
$ 4.29
|
$21.26
|
$12.71
|
| Diluted |
$ 1.89
|
$ 9.97
|
$ 6.83
|
At December 31, 2000, stock
options to purchase 5,646,557 shares of common stock were outstanding,
but were not included in the computation of diluted earnings per share,
because the exercise price of these options was greater than the average
market price of the common shares.
(6) Investments
During 2000, UAL invested
approximately $24 million in Orbitz, an entity which is developing an Internet
travel web site. UAL owns approximately 25% of Orbitz and accounts
for this investment using the equity method of accounting.
During 1998 and 1999, United
invested approximately $51 million in GetThere.com (a leading provider
of Internet-based travel planning products tailored to individual, corporate,
travel supplier and travel agency customers) resulting in a 28% minority
interest consisting of common stock, warrants and options. United
accounted for its investment in GetThere.com using the equity method of
accounting.
On October 6, 2000, Sabre
Holdings Corporation acquired all of the outstanding common stock of GetThere.com
for $17.75 per share. Accordingly, after converting its options and
warrants, United tendered all of its shares for net proceeds of $147 million,
resulting in a gain of approximately $69 million, net of tax.
During 2000, United recorded
an impairment loss of $38 million, net of tax, related to its warrants
held in Priceline.com.
In June 1999, United sold
17,500,000 common shares of Galileo in a secondary offering for $766 million,
resulting in a gain of approximately $428 million, net of tax. This
sale reduced United' s holdings in Galileo from 32 percent to approximately
15 percent, requiring United to discontinue the equity method of accounting
for its investment in Galileo. United has classified its remaining
15,940,000 shares of Galileo common stock as available-for-sale.
The market value of these shares at December 31, 2000 ($319 million) is
reflected in investments on the balance sheet and the market value in excess
of United' s investment is classified net-of-tax ($144 million) in accumulated
other comprehensive income. The market value of United' s investment
in Galileo at December 31, 1999 was $477 million. Included in the
Company' s retained earnings is approximately $248 million of undistributed
earnings of Galileo and its predecessor companies.
United owns 1,391,791 depositary certificates in Equant, a provider of international data network services to multinational businesses and a single source for global desktop communications. Each depositary certificate represents a beneficial interest in an Equant common share and the investment is classified as available-for-sale. The market value in excess of United' s investment is classified net-of-tax ($24 million) in accumulated other comprehensive income. In December 1999, United sold 709,000 shares of common stock in Equant in a secondary offering by Equant for $62 million. At December 31, 2000 and 1999, the estimated fair value of United' s remaining investment in Equant was approximately $36 million and $156 million, respectively.
(7) Income Taxes
In 2000, UAL incurred
both a regular and an alternative minimum tax ("AMT") loss. The carryback
of the regular tax loss to 1999 and 1998 and the carryback loss of the
AMT loss to 1998 will produce both federal and state refunds and generate
additional AMT credits. The primary differences between UAL' s regular
tax loss and AMT loss are the depreciation adjustments and preferences.
The provision for income
taxes is summarized as follows:
| (In Millions) |
|
|
|
|
| Current - | ||||
| Federal |
$ (133)
|
$ 93
|
$ 113
|
|
| State |
(24)
|
16
|
9
|
|
|
(157)
|
109
|
122
|
||
| Deferred - | ||||
| Federal |
278
|
536
|
270
|
|
| State |
39
|
54
|
37
|
|
|
317
|
590
|
307
|
||
|
$ 160
|
$ 699
|
$ 429
|
||
|
====
|
====
|
====
|
The income tax provision
differed from amounts computed at the statutory federal income tax rate,
as follows:
| (In Millions) |
|
|
|
| Income tax provision at statutory rate |
$ 151
|
$ 680
|
$ 440
|
| State income taxes, net of federal income | |||
| tax benefit |
10
|
46
|
30
|
| ESOP dividends |
(32)
|
(40)
|
(33)
|
| Nondeductible employee meals |
24
|
24
|
24
|
| Tax credits |
-
|
-
|
(7)
|
| Other, net |
7
|
(11)
|
(25)
|
|
$ 160
|
$ 699
|
$ 429
|
|
|
====
|
====
|
====
|
Temporary differences
and carryforwards that give rise to a significant portion of deferred tax
assets and liabilities for 2000 and 1999 are as follows:
| (In Millions) |
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
| Employee benefits, including | ||||
| postretirement medical and ESOP |
$ 1,076
|
$ 214
|
$ 990
|
$ 135
|
| Depreciation, capitalized interest | ||||
| and transfers of tax benefits |
-
|
3,009
|
-
|
2,489
|
| Gains on sale and leasebacks |
307
|
-
|
335
|
-
|
| Rent expense |
461
|
-
|
435
|
-
|
| AMT credit carryforwards |
371
|
-
|
210
|
-
|
| Other |
1,012
|
1,020
|
758
|
1,029
|
|
$3,227
|
$ 4,243
|
$ 2,728
|
$ 3,653
|
|
|
=====
|
=====
|
=====
|
=====
|
|
At December 31, 2000,
UAL and its subsidiaries had $371 million of federal AMT credits and $43
million of federal and state net operating losses which may be carried
forward to reduce the tax liabilities of future years.
- Short-Term Borrowings
United has an agreement
with a syndicate of banks for a $750 million revolving credit facility
expiring in 2002. Interest on drawn amounts under the facility is
calculated at floating rates based on the London interbank offered rate
("LIBOR") plus a margin which is subject to adjustment based on certain
changes in the credit ratings of United' s long-term senior unsecured debt.
Among other restrictions, the credit facility contains a covenant that
restricts United' s ability to grant liens on or otherwise encumber certain
identified assets with a market value of approximately $1.1 billion.
Additionally, United
has available $900 million in short-term secured aircraft financing facilities.
Interest on drawn amounts under the facilities is calculated at floating
rates based on LIBOR plus a margin.
At December 31, 1999,
United had outstanding $61 million under a separate short-term borrowing
facility, bearing an average interest rate of 5.72%. Receivables
amounting to $233 million were pledged by United to secure repayment of
such outstanding borrowings. The maximum available borrowing amount
under this arrangement is $227 million. There were no borrowings
outstanding under this arrangement at December 31, 2000.
(9) Long-Term Debt
A summary of long-term
debt, including current maturities, as of December 31 is as follows (interest
rates are as of December 31, 2000):
| (In Millions) |
|
|
| Secured notes, 5.97% to 8.99%, averaging | ||
| 7.33%, due through 2014 |
$ 3,417
|
$ 1,229
|
| Debentures, 9.00% to 11.21%, averaging | ||
| 9.89%, due through 2021 |
646
|
762
|
| Promissory notes, 11.00%, due 2000 |
-
|
1
|
| Commercial paper, 6.71%, due through 2003 |
549
|
571
|
| Special facility bonds, 5.63% to 6.25%, | ||
| averaging 5.71%, due through 2034 |
255
|
190
|
|
4,867
|
2,753
|
|
| Less: Unamortized discount on debt |
(9)
|
(11)
|
| Current maturities |
(170)
|
(92)
|
|
$ 4,688
|
$ 2,650
|
|
|
=====
|
=====
|
|
See Item 7a "Quantitative
and Qualitative Disclosures About Market Risk" for disclosures regarding
the fair values of debt.
In addition to scheduled
principal payments, in 2000 and 1999 the Company repaid $116 million and
$23 million, respectively, in principal amount of debentures prior to maturity.
The debentures were scheduled to mature at various times through 2021.
Extraordinary losses of $6 million and $3 million, respectively, net of
tax benefits of $4 million and $2 million, respectively, was recorded reflecting
amounts paid in excess of the debt carrying value.
The Company, through
a special-purpose financing entity that is consolidated, has issued commercial
paper to refinance certain lease commitments. Although the issued
commercial paper has short maturities, the Company expects to continually
rollover this obligation throughout the 5-year life of its supporting liquidity
facility or bank standby facility. As such, the commercial paper
is classified as a long-term obligation in the Company' s statement of
financial position.
In July 2000, the Company
issued $921 billion in enhanced equipment trust certificates to refinance
certain owned aircraft and aircraft under operating leases. Net proceeds
after refinancing the operating leases was $622 million. In December
2000, the Company issued an additional $1.5 billion in enhanced equipment
trust certificates to refinance certain owned aircraft.
At December 31, 2000,
United had recorded $255 million in special facilities revenue bonds to
finance the acquisition and construction of certain facilities at Los Angeles,
San Francisco and Miami. United guarantees the payment of these bonds
under various payment and loan agreements. The bond proceeds are
restricted to expenditures on the facilities and unspent amounts are classified
as other assets in the balance sheet.
In February 2001, United
recorded an additional $200 million in special facility bonds to finance
the acquisition and construction of certain facilities at Chicago.
At December 31, 2000,
United had outstanding a total of $1.4 billion of long-term debt bearing
interest rates at 22.5 to 60.0 basis points over LIBOR.
Maturities of long-term
debt for each of the four years after 2001 are: 2002 - $655 million;
2003 - $741 million; 2004 - $350 million; and 2005 - $264 million.
Various assets, principally aircraft, having an aggregate book value of
$4.1 billion at December 31, 2000, were pledged as security under various
loan agreements.
(10) Lease Obligations
The Company leases
aircraft, airport passenger terminal space, aircraft hangars and related
maintenance facilities, cargo terminals, other airport facilities, real
estate, office and computer equipment and vehicles.
Future minimum lease
payments as of December 31, 2000, under capital leases (substantially all
of which are for aircraft) and operating leases having initial or remaining
noncancelable lease terms of more than one year are as follows:
| (In Millions) |
|
|
|
|
|
|
|
|
| Payable during - | |||
| 2001 |
$ 941
|
$ 612
|
$ 472
|
| 2002 |
922
|
574
|
415
|
| 2003 |
972
|
541
|
316
|
| 2004 |
1,008
|
514
|
325
|
| 2005 |
1,022
|
504
|
293
|
| After 2005 |
9,445
|
7,279
|
1,867
|
| Total minimum lease payments |
$14,310
|
$10,024
|
3,688
|
| Imputed interest (at rates of 5.3% to 12.2%) |
======
|
=====
|
(1,158)
|
| Present value of minimum lease payments |
2,530
|
||
| Current portion |
(269)
|
||
| Long-term obligations under capital leases |
$ 2,261
|
||
|
=====
|
|||
As of December 31,
2000, United leased 315 aircraft, 82 of which were under capital leases.
These leases have terms of 10 to 26 years, and expiration dates range from
2001 through 2020.
In connection with the financing
of certain aircraft accounted for as capital leases, United had on deposit
at December 31, 2000 an aggregate 40 billion yen ($348 million), 661 million
German marks ($314 million), 67 million French francs ($10 million), 28
million Euro ($26 million) and $12 million in certain banks and had pledged
an irrevocable security interest in such deposits to certain of the aircraft
lessors. These deposits will be used to pay off an equivalent amount
of recorded capital lease obligations.
Amounts charged to rent expense,
net of minor amounts of sublease rentals, were $1.5 billion in 2000, $1.4
billion in 1999 and $1.4 billion in 1998. Included in 2000 rental
expense was $21 million in contingent rentals, resulting from changes in
interest rates for operating leases under which the rent payments are based
on variable interest rates.
(11) Company-Obligated Mandatorily Redeemable Preferred Securities of a
Subsidiary Trust
In December 1996, UAL Corporation
Capital Trust I (the "Trust") issued $75 million of its 13 1/4% Trust Originated
Preferred Securities (the "Preferred Securities") in exchange for 2,999,304
depositary shares, each representing 1/1000 of one share of Series B 12
1/4% preferred stock (see Note 12 "Serial Preferred Stock"). Concurrent
with the issuance of the Preferred Securities and the related purchase
by UAL of the Trust' s common securities, the Company issued to the Trust
$77 million aggregate principal amount of its 13 1/4% Junior Subordinated
Debentures (the "Debentures") due 2026. The Debentures are and will
be the sole assets of the Trust. The interest and other payment dates
on the Debentures correspond to the distribution and other payment dates
on the Preferred Securities. Upon maturity or redemption of the Debentures,
the Preferred Securities will be mandatorily redeemed. The Debentures
are redeemable at UAL' s option, in whole or in part, on or after July
12, 2004, at a redemption price equal to 100% of the principal amount to
be redeemed, plus accrued and unpaid interest to the redemption date.
Upon the repayment of the Debentures, the proceeds thereof will be applied
to redeem the Preferred Securities.
There is a full and unconditional
guarantee by UAL of the Trust' s obligations under the securities issued
by the Trust. However, the Company' s obligations are subordinate
and junior in right of payment to certain other of its indebtedness.
UAL has the right to defer payments of interest on the Debentures by extending
the interest payment period, at any time, for up to 20 consecutive quarters.
If interest payments on the Debentures are so deferred, distributions on
the Preferred Securities will also be deferred. During any deferral,
distributions will continue to accrue with interest thereon. In addition,
during any such deferral, UAL may not declare or pay any dividend or other
distribution on, or redeem or purchase, any of its capital stock.
The fair value of the Preferred
Securities at December 31, 2000 and 1999 was $85 million and $83 million,
respectively.
(12) Serial Preferred Stock
At December 31, 2000, UAL
had outstanding 3,203,177 depositary shares, each representing 1/1000 of
one share of Series B 12 1/4% preferred stock, with a liquidation preference
of $25 per depositary share ($25,000 per Series B preferred share) and
a stated capital of $0.01 per Series B preferred share. Under its
terms, any portion of the Series B preferred stock or the depositary shares
is redeemable for cash after July 11, 2004, at UAL' s option, at the equivalent
of $25 per depositary share, plus accrued dividends. The Series B
preferred stock is not convertible into any other securities, has no stated
maturity and is not subject to mandatory redemption.
The Series B preferred stock
ranks senior to all other preferred and common stock, except the Preferred
Securities, as to receipt of dividends and amounts distributed upon liquidation.
The Series B preferred stock has voting rights only to the extent required
by law and with respect to charter amendments that adversely affect the
preferred stock or the creation or issuance of any security ranking senior
to the preferred stock. Additionally, if dividends are not paid for
six cumulative quarters, the Series B preferred stockholders are entitled
to elect two additional members to the UAL Board of Directors until all
dividends are paid in full. Pursuant to UAL' s restated certificate
of incorporation, UAL is authorized to issue a total of 50,000 shares of
Series B preferred stock.
During 1998, UAL repurchased
64,300 depositary shares, at an aggregate cost of $3 million, to be held
in treasury.
UAL is authorized to issue
up to 15,986,584 additional shares of serial preferred stock.
(13) ESOP Preferred Stock
The following activity related
to UAL' s outstanding ESOP preferred stocks (see Note 2 for a description
of the ESOPs):
|
|
|
|
|
| Balance December 31, 1997 |
8,652,618
|
806,260
|
7,266,406
|
| Shares issued |
2,011,812
|
177,166
|
3,073,969
|
| Converted to common |
(213,061)
|
(116,104)
|
(331,620)
|
| Balance December 31, 1998 |
10,451,369
|
867,322
|
10,008,755
|
| Shares issued |
1,955,756
|
227,689
|
3,073,969
|
| Converted to common |
(306,662)
|
(146,975)
|
(457,401)
|
| Balance December 31, 1999 |
12,100,463
|
948,036
|
12,625,323
|
| Shares issued |
539,177
|
855,998
|
3,073,968
|
| Converted to common |
(420,958)
|
(283,428)
|
(710,056)
|
| Balance December 31, 2000 |
12,218,682
|
1,520,606
|
14,989,235
|
|
========
|
========
|
========
|
An aggregate of 17,675,345
shares of Class 1 and Class 2 ESOP Preferred Stock was issued to employees
under the ESOPs. Each share of ESOP Preferred Stock is convertible
into four shares of UAL common stock. Shares typically are converted
to common as employees retire or otherwise leave the Company. The
stock has a par value of $0.01 per share and is nonvoting. The Class
1 ESOP Preferred Stock has a liquidation value of $126.96 per share plus
all accrued and unpaid dividends; the Class 2 does not have a liquidation
value. The Class 1 ESOP Preferred Stock provided a fixed annual dividend
of $8.8872 per share, which ceased on March 31, 2000; the Class 2 does
not pay a fixed dividend.
Class P, M and S Voting Preferred
Stocks were established to provide the voting power to the employee groups
participating in the ESOPs. Additional Voting Preferred Stock was
issued as shares of the Class 1 and Class 2 ESOP Preferred Stock were allocated
to employees. In the aggregate, 17,675,345 shares of Voting Preferred
Stock were issued through the year 2000. The Voting Preferred Stock
outstanding at any time commands voting power for approximately 55% of
the vote of all classes of capital stock in all matters requiring a stockholder
vote, other than for the election of members of the Board of Directors.
The Voting Preferred Stock has a par value and liquidation preference of
$0.01 per share. The stock is not entitled to receive any dividends
and is convertible into .0004 shares of UAL common stock.
Class Pilot MEC, IAM, SAM
and I junior preferred stock (collectively "Director Preferred Stocks")
were established to effectuate the election of one or more members to UAL'
s Board of Directors. One share each of Class Pilot MEC and Class
IAM junior preferred stock is authorized and issued. The Company
is authorized to issue ten shares each of Class SAM and Class I junior
preferred stock. There are three shares of Class SAM and four shares
of Class I issued. Each of the Director Preferred Stocks has a par
value and liquidation preference of $0.01 per share. The stock is
not entitled to receive any dividends and Class I will be redeemed automatically
upon the transfer of the shares to any person not elected to the Board
of Directors or upon the occurrence of the "Sunset." (See "Corporate
Governance and the ESOPs" in Item 1. Business.)
(14) Common Stockholders' Equity
Changes in the number of
shares of UAL common stock outstanding during the years ended December
31 were as follows:
|
|
|
|
|
| Shares outstanding at beginning of year |
50,776,583
|
51,804,653
|
57,320,486
|
| Stock options exercised |
187,400
|
939,262
|
382,136
|
| Shares issued from treasury under | |||
| compensation arrangements |
32,458
|
89,745
|
11,944
|
| Shares acquired for treasury |
(1,326,877)
|
(3,877,912)
|
(7,237,975)
|
| Forfeiture of restricted stock |
(5,800)
|
(5,800)
|
(7,600)
|
| Conversion of ESOP preferred stock |
2,817,829
|
1,814,731
|
1,316,786
|
| Other |
57,099
|
11,904
|
18,876
|
| Shares outstanding at end of year |
52,538,692
|
50,776,583
|
51,804,653
|
|
========
|
========
|
========
|
During 2000, 1999 and
1998, the Company repurchased 1,258,263, 3,754,802 and 7,061,109 shares
of common stock, respectively, at a total purchase price of $81 million,
$261 million and $459 million, respectively.
(15) Stock Options and Awards
The Company has granted
options to purchase common stock to various officers and employees.
The option price for all stock options is at least 100% of the fair market
value of UAL common stock at the date of grant. Options generally
vest and become exercisable in four equal, annual installments beginning
one year after the date of grant, and generally expire in ten years.
As a result of the
1994 recapitalization, all outstanding options became fully vested at the
time of the transaction and those options are exercisable for shares of
old common stock, each of which is in turn converted into two shares of
new common stock and $84.81 in cash upon exercise. Subsequent to
the recapitalization, the Company granted stock options which are exercisable
for shares of new common stock.
The Company has also
awarded shares of restricted stock to officers and key employees.
These shares generally vest over a five-year period and are subject to
certain transfer restrictions and forfeiture under certain circumstances
prior to vesting. Unearned compensation, representing the fair market
value of the stock at the measurement date for the award, is amortized
to salaries and related costs over the vesting period. During 2000
and 1999, respectively, 23,000 and 75,000 shares of restricted stock were
issued from treasury. No shares were issued in 1998. As of
December 31, 2000, 98,000 shares were restricted and still nonvested.
Additionally, 265,952 shares were reserved for future awards under the
plan.
Statement of Financial Accounting
Standards No. 123, "Accounting for Stock-Based Compensation" ("SFAS No.
123") establishes a fair value based method of accounting for stock options.
The Company has elected to continue using the intrinsic value method of
accounting prescribed in APB 25, as permitted by SFAS No. 123. Had
compensation cost for awards been determined based on the fair value at
the grant dates consistent with the method of SFAS No. 123, the Company'
s net income and earnings per share would have instead been reported as
the pro forma amounts indicated below:
|
|
|
|
||
| Net income (in millions) | As reported |
$ 50
|
$ 1,235
|
$ 821
|
| Pro forma |
$ 33
|
$ 1,219
|
$ 812
|
|
| Basic net earnings per share | As reported |
$ 0.08
|
$ 21.20
|
$12.71
|
| Pro forma |
$(0.24)
|
$ 20.89
|
$12.55
|
|
| Diluted net earnings per share | As reported |
$ 0.04
|
$ 9.94
|
$ 6.83
|
| Pro forma |
$(0.10)
|
$ 9.79
|
$ 6.74
|
|
The weighted-average grant
date fair value of restricted shares issued was $51.83 for shares issued
in 2000 and $69.51 for shares issued in 1999. The fair value of each
option grant was estimated on the date of grant using the Black-Scholes
option-pricing model with the following assumptions:
|
|
|
|
|
| Risk-free interest rate |
6.4%
|
5.2%
|
5.6%
|
| Dividend yield |
2.4%
|
0.0%
|
0.0%
|
| Volatility |
35.0%
|
34.0%
|
33.0%
|
| Expected life (years) |
4.0
|
4.0
|
4.0
|
The Black-Scholes option
valuation model was developed for use in estimating the fair value of traded
options which have no vesting restrictions and are fully transferable.
In addition, option valuation models require the input of highly subjective
assumptions including expected stock price volatility. Because the
Company' s stock options have characteristics significantly different from
those of traded options and because changes in the subjective input assumptions
can materially affect the fair value estimate, in management' s opinion,
the existing models do not necessarily provide a reliable single measure
of the fair value of its stock options.
Stock option activity for
the past three years was as follows:
|
|
|
|
||||
| Old Share Options: |
|
|
|
|||
|
|
|
|
|
|
|
|
| Outstanding at beginning of year |
76,350
|
$ 116.74
|
118,475
|
$ 121.64
|
168,393
|
$ 121.65
|
| Exercised |
(26,600)
|
$ 102.73
|
(42,125)
|
$ 130.53
|
(49,918)
|
$ 121.67
|
| Outstanding at end of year |
49,750
|
$ 124.23
|
76,350
|
$ 116.74
|
118,475
|
$ 121.64
|
| Options exercisable at year-end |
49,750
|
$ 124.23
|
76,350
|
$ 116.74
|
118,475
|
$ 121.64
|
|
|
|
|
||||
| New Share Options: |
|
|
|
|||
|
|
|
|
|
|
|
|
| Outstanding at beginning of year |
6,513,709
|
$ 53.27
|
5,411,836
|
$ 45.07
|
4,749,612
|
$ 36.27
|
| Granted |
1,447,600
|
$ 53.24
|
2,081,600
|
$ 64.29
|
1,064,200
|
$ 81.40
|
| Exercised |
(134,200)
|
$ 29.91
|
(855,012)
|
$ 25.67
|
(282,300)
|
$ 28.79
|
| Terminated |
(261,912)
|
$ 67.50
|
(124,715)
|
$ 70.74
|
(119,676)
|
$ 57.12
|
| Outstanding at end of year |
7,565,197
|
$ 53.19
|
6,513,709
|
$ 53.27
|
5,411,836
|
$ 45.07
|
| Options exercisable at year-end |
4,101,248
|
$ 44.00
|
3,240,210
|
$ 38.26
|
3,400,607
|
$ 29.97
|
| Reserved for future grants at year-end |
280,331
|
1,466,019
|
3,422,904
|
|||
| Wtd avg fair value of options | ||||||
| granted during the year |
|
|
|
|||
The following information
related to stock options outstanding as of December 31, 2000:
|
|
|
||||
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Old Share Options: | |||||
|
|
|
|
|
|
|
| New Share Options: | |||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
(16) Retirement and Postretirement Plans
The Company has various retirement
plans, both defined benefit and defined contribution, which cover substantially
all employees. The Company also provides certain health care benefits,
primarily in the U.S., to retirees and eligible dependents, as well as
certain life insurance benefits to retirees. The Company has reserved
the right, subject to collective bargaining agreements, to modify or terminate
the health care and life insurance benefits for both current and future
retirees.
The following table sets
forth the reconciliation of the beginning and ending balances of the benefit
obligation and plan assets, the funded status and the amounts recognized
in the statement of financial position for the defined benefit and other
postretirement plans as of December 31:
| (In Millions) | ||||
| Change in Benefit Obligation |
|
|
||
|
|
|
|
|
|
| Benefit obligation at beginning of year |
$ 7,381
|
$ 8,038
|
$ 1,465
|
$ 1,626
|
| Service cost |
269
|
295
|
47
|
53
|
| Interest cost |
629
|
583
|
120
|
116
|
| Plan participants' contributions |
1
|
1
|
8
|
7
|
| Amendments |
260
|
1
|
3
|
-
|
| Actuarial (gain) loss |
1,162
|
(1,161)
|
164
|
(254)
|
| Foreign currency exchange rate changes |
(15)
|
12
|
-
|
-
|
| Benefits paid |
(435)
|
(388)
|
(101)
|
(83)
|
| Benefit obligation at end of year |
$ 9,252
|
$ 7,381
|
$ 1,706
|
$ 1,465
|
|
=====
|
=====
|
=====
|
=====
|
|
| Change in Plan Assets | ||||
|
|
|
|
|
|
| Fair value of plan assets at beginning of year |
$ 8,701
|
$ 7,654
|
$ 113
|
$ 112
|
| Actual return on plan assets |
21
|
1,255
|
8
|
6
|
| Employer contributions |
230
|
175
|
88
|
71
|
| Plan participants' contributions |
1
|
1
|
8
|
7
|
| Foreign currency exchange rate changes |
(7)
|
4
|
-
|
-
|
| Benefits paid |
(435)
|
(388)
|
(101)
|
(83)
|
| Fair value of plan assets at end of year |
$ 8,511
|
$ 8,701
|
$ 116
|
$ 113
|
|
=====
|
=====
|
=====
|
=====
|
|
| Funded status |
$ (741)
|
$ 1,320
|
$ (1,590)
|
$ (1,352)
|
| Unrecognized actuarial (gains) losses |
14
|
(1,870)
|
(54)
|
(229)
|
| Unrecognized prior service costs |
806
|
604
|
2
|
- -
|
| Net amount recognized |
$ 79
|
$
54
|
$ (1,642)
|
$ (1,581)
|
|
=====
|
=====
|
=====
|
=====
|
|
| Amounts recognized in the statement of | ||||
| financial position consist of: |
|
|
|
|
| Prepaid (accrued) benefit cost |
$ 79
|
$ 54
|
$ (1,642)
|
$ (1,581)
|
| Accrued benefit liability |
(266)
|
(151)
|
-
|
-
|
| Intangible asset |
255
|
148
|
-
|
-
|
| Accumulated other comprehensive income |
11
|
3
|
- -
|
- -
|
| Net amount recognized |
$ 79
|
$ 54
|
$ (1,642)
|
$ (1,581)
|
|
=====
|
=====
|
=====
|
=====
|
|
| Weighted-average assumptions |
|
|
|
|
| Discount rate |
|
|
|
|
| Expected return on plan assets |
|
|
|
|
| Rate of compensation increase |
|
|
|
|
The assumed health care cost
trend rates for gross claims paid were 4.5% and 4.0% for 2000 and 1999,
respectively.
The net periodic benefit
cost included the following components:
| (In Millions) |
|
|
||||
|
|
|
|
|
|
|
|
| Service cost |
$ 269
|
$ 295
|
$ 276
|
$ 47
|
$ 53
|
$ 48
|
| Interest cost |
629
|
583
|
533
|
120
|
116
|
109
|
| Expected return on plan assets |
(740)
|
(665)
|
(581)
|
(9)
|
(9)
|
(8)
|
| Amortization of prior service cost | ||||||
| including transition obligation/(asset) |
58
|
57
|
57
|
-
|
-
|
-
|
| Recognized actuarial (gain)/loss |
(7)
|
1
|
9
|
(9)
|
(5)
|
(4)
|
| Net period benefit costs |
$ 209
|
$ 271
|
$ 294
|
$ 149
|
$ 155
|
$ 145
|
|
=====
|
=====
|
=====
|
=====
|
=====
|
=====
|
|
Total pension expense for
all retirement plans (including defined contribution plans) was $302 million
in 2000, $285 million in 1999 and $304 million in 1998.
The projected benefit obligation,
accumulated benefit obligation, and fair value of plan assets for the plans
with accumulated benefit obligations in excess of plan assets were $1.0
billion, $632 million and $61 million, respectively, as of December 31,
2000 and $500 million and $444 million and $47 million, respectively, as
of December 31, 1999.
Assumed health care cost
trend rates have a significant effect on the amounts reported for the health
care plan. A one-percentage-point change in assumed health care trend
rate would have the following effects:
| (In Millions) |
|
|
| Effect on total service and interest cost |
|
|
| Effect on postretirement benefit obligation |
|
|
Changes in interest rates
or rates of inflation may impact the assumptions used in the valuation
of pension obligations and postretirement obligations including discount
rates and rates of increase in compensation, resulting in increases or
decreases in United' s pension and postretirement liabilities and pension
and postretirement costs.
(17) Financial Instruments and Risk Management
See Item 7A. Quantitative
and Qualitative Disclosures About Market Risk ("Item 7A") for a discussion
of the Company' s foreign currency and fuel price risk management activities,
and the fair value of all significant financial instruments.
Credit Exposures of Derivatives
The Company' s theoretical
risk in the derivative financial instruments described in Item 7A is the
cost of replacing the contracts at current market rates in the event of
default by any of the counterparties. However, the Company does not
anticipate such default as counterparties are selected based on credit
ratings and the relative market positions with each counterparty are monitored.
Financial Guarantees
Special facility revenue
bonds have been issued by certain municipalities to build or improve airport
and maintenance facilities leased by United. Under the lease agreements,
United is required to make rental payments in amounts sufficient to pay
the maturing principal and interest payments on the bonds. At December
31, 2000, $1.2 billion principal amount of such bonds was outstanding.
As of December 31, 2000, UAL and United had jointly guaranteed $35 million
of such bonds and United had guaranteed $1.2 billion of such bonds, including
accrued interest. The payments required to satisfy these obligations
are included in the future minimum lease payments disclosed in Note 10,
"Lease Obligations."
Concentrations of Credit Risk
The Company does not believe
it is subject to any significant concentration of credit risk. Most
of the Company' s receivables result from sales of tickets to individuals
through geographically dispersed travel agents, company outlets or other
airlines, often through the use of major credit cards. These receivables
are short term, generally being settled shortly after the sale.
(18) Commitments, Contingent Liabilities and Uncertainties
The Company has certain contingencies
resulting from litigation and claims (including environmental issues) incident
to the ordinary course of business. Management believes, after considering
a number of factors, including (but not limited to) the views of legal
counsel, the nature of contingencies to which the Company is subject and
its prior experience, that the ultimate disposition of these contingencies
is not expected to materially affect UAL' s consolidated financial position
or results of operations. UAL records liabilities for legal and environmental
claims against it in accordance with generally accepted accounting principles.
These amounts are recorded based on the Company' s assessments of the likelihood
of their eventual settlements. The amounts of these liabilities could
increase or decrease in the near term, based on revisions to estimates
relating to the various claims.
At December 31, 2000, commitments
for the purchase of property and equipment, principally aircraft, approximated
$4.7 billion, after deducting advance payments. An estimated $2.5
billion will be spent in 2001, $1.7 billion in 2002 and $0.5 in 2003.
The major commitments are for the purchase of A319, A320, B767, and B777
aircraft, which are scheduled to be delivered through 2003. The above
numbers include a recent conversion of 15 option aircraft to firm orders
to be delivered in 2003.
In connection with the construction
of the Indianapolis Maintenance Center, United agreed to spend an aggregate
$800 million on capital investments by the year 2001 and employ at least
7,500 individuals by the year 2004. In the event such targets are
not reached, United may be required to make certain payments to the city
of Indianapolis and state of Indiana.
Approximately 80% of United' s employees are represented by various labor organizations. The labor contracts with the IAM became amendable in July 2000. The Company is currently in the process of negotiating these contracts. The contracts with ALPA and the AFA become amendable in 2004 and 2006, respectively. See Other Information, "Labor Agreements" in Management' s Discussion and Analysis of Financial Condition and Results of Operations for details.
(19) Segment Information
United has a global route
network designed to transport passengers and cargo between destinations
in North America, the Pacific, the Atlantic and Latin America. These
regions constitute United' s four reportable segments. The accounting
policies for each of these segments are the same as those described in
Note 1, "Summary of Significant Accounting Policies," except that segment
financial information has been prepared using a management approach which
is consistent with how the Company' s management internally disaggregates
financial information for the purpose of making internal operating decisions.
UAL evaluates performance based on United' s earnings before income taxes
and gains on sales. Revenues are attributed to each reportable segment
based on the allocation guidelines provided by the U.S. Department of Transportation,
which classifies flights between the U.S. and foreign designations as part
of each respective region. A reconciliation of the total amounts
reported by reportable segments to the applicable amounts in the financial
statements follows:
| (In Millions) |
|
||||||
|
|
|||||||
|
|
|
|
|
||||
| America |
|
|
|
|
|
|
|
| Revenue |
$ 13,094
|
$ 3,161
|
$ 2,260
|
$ 816
|
$ 19,331
|
$ 21
|
$ 19,352
|
| Interest income |
55
|
23
|
16
|
5
|
99
|
2
|
101
|
| Interest expense |
234
|
95
|
66
|
21
|
416
|
(14)
|
402
|
| Equity in losses of affiliates |
(5)
|
(2)
|
(1)
|
-
|
(8)
|
(4)
|
(12)
|
| Depreciation and amortization |
630
|
176
|
141
|
43
|
990
|
68
|
1,058
|
| Earnings before income taxes, | |||||||
| investment impairment and | |||||||
| gains on sales |
205
|
60
|
102
|
10
|
377
|
6
|
383
|
| (In Millions) |
|
||||||
|
|
|||||||
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
| Revenue |
$ 12,516
|
$ 2,691
|
$ 1,973
|
$ 787
|
$ 17,967
|
$ 60
|
$ 18,027
|
| Interest income |
40
|
14
|
10
|
4
|
68
|
-
|
68
|
| Interest expense |
217
|
79
|
55
|
21
|
372
|
(10)
|
362
|
| Equity in earnings of affiliates |
21
|
9
|
5
|
2
|
37
|
-
|
37
|
| Depreciation and amortization |
550
|
145
|
115
|
42
|
852
|
15
|
867
|
| Earnings before income taxes | |||||||
| and gains on sales |
889
|
81
|
164
|
20
|
1,154
|
57
|
1,211
|
| (In Millions) |
|
||||||
|
|
|||||||
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
| Revenue |
$ 11,997
|
$ 2,843
|
$ 1,846
|
$ 832
|
$ 17,518
|
$ 43
|
$ 17,561
|
| Interest income |
33
|
14
|
8
|
3
|
58
|
1
|
59
|
| Interest expense |
207
|
84
|
49
|
22
|
362
|
(7)
|
355
|
| Equity in earnings of affiliates |
41
|
17
|
10
|
4
|
72
|
-
|
72
|
| Depreciation and amortization |
520
|
145
|
95
|
45
|
805
|
(12)
|
793
|
| Earnings (loss) before | |||||||
| income taxes |
1,118
|
(105)
|
185
|
22
|
1,220
|
36
|
1,256
|
| (In Millions) |
|
|
|
| Total earnings for reportable segments |
$ 377
|
$ 1,154
|
$ 1,220
|
| Gains on sales |
109
|
731
|
-
|
| Investment impairment |
(61)
|
-
|
-
|
| UAL subsidiary earnings |
6
|
57
|
36
|
| Total earnings before income taxes, distributions | |||
| on preferred securities, extraordinary item | |||
| and cumulative effect |
$ 431
|
$ 1,942
|
$ 1,256
|
|
=====
|
=====
|
=====
|
UAL' s operations involve
an insignificant level of dedicated revenue producing assets by reportable
segment. The overwhelming majority of UAL' s revenue producing assets
can be deployed in any of the four reportable segments. UAL has significant
intangible assets related to the acquisition of its Atlantic and Latin
America route authorities.
(20) Statement of Consolidated Cash Flows - Supplemental
Disclosures
Supplemental disclosures
of cash flow information and non-cash investing and financing activities
were as follows:
| (In Millions) |
|
|
|
| Cash paid during the year for: | |||
| Interest (net of amounts capitalized) |
$ 298
|
$ 260
|
$ 234
|
| Income taxes |
23
|
296
|
160
|
| Non-cash transactions: | |||
| Capital lease obligations incurred |
339
|
482
|
701
|
| Long-term debt incurred in connection | |||
| with additions to equipment |
32
|
-
|
-
|
| Increase (decrease) in pension intangible assets |
107
|
(123)
|
(15)
|
| Net unrealized gain (loss) on investments |
(196)
|
354
|
-
|
(21) Selected Quarterly Financial Data (Unaudited)
| (In Millions, except per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
| 2000: | |||||
| Operating revenues |
$ 4,546
|
$ 5,109
|
$ 4,905
|
$ 4,792
|
$ 19,352
|
| Earnings (loss) from operations |
252
|
605
|
(41)
|
(162)
|
654
|
| Earnings (loss) before extraordinary item | |||||
| and cumulative effect |
110
|
336
|
(110)
|
(71)
|
265
|
| Extraordinary loss on early | |||||
| extinguishment of debt, net |
-
|
-
|
(6)
|
-
|
(6)
|
| Cumulative effect of accounting change, net |
(209)
|
-
|
-
|
-
|
(209)
|
| Net earnings (loss) |
$ (99)
|
$ 336
|
$ (116)
|
$ (71)
|
$
50
|
| Per share amounts, basic: | |||||
| Earnings before extraordinary item | |||||
| and cumulative effect |
$ 1.42
|
$ 6.61
|
$ (2.17)
|
$ (1.40)
|
$ 4.29
|
| Extraordinary loss on early | |||||
| extinguishment of debt, net |
-
|
-
|
(0.13)
|
-
|
(0.13)
|
| Cumulative effect of accounting change, net |
(4.14)
|
-
|
-
|
-
|
(4.08)
|
| Net earnings |
$ (2.72)
|
$ 6.61
|
$ (2.30)
|
$ (1.40)
|
$ 0.08
|
| Net earnings per share, diluted |
$ (1.18)
|
$ 2.86
|
$ (2.30)
|
$ (1.40)
|
$ 0.04
|
| 1999: | |||||
| Operating revenues |
$ 4,160
|
$ 4,541
|
$ 4,845
|
$ 4,481
|
$ 18,027
|
| Earnings from operations |
146
|
433
|
619
|
193
|
1,391
|
| Earnings before extraordinary item |
78
|
672
|
359
|
129
|
1,238
|
| Extraordinary loss on early | |||||
| extinguishment of debt, net |
-
|
(3)
|
-
|
-
|
(3)
|
| Net earnings |
$ 78
|
$ 669
|
$ 359
|
$ 129
|
$ 1,235
|
| Per share amounts, basic: | |||||
| Earnings before extraordinary item |
$ 0.91
|
$ 12.26
|
$ 6.18
|
$ 1.85
|
$ 21.26
|
| Extraordinary loss on early | |||||
| extinguishment of debt, net |
-
|
(0.05)
|
-
|
-
|
(0.06)
|
| Net earnings |
$ 0.91
|
$ 12.21
|
$ 6.18
|
$ 1.85
|
$ 21.20
|
| Net earnings per share, diluted |
$ 0.44
|
$ 5.78
|
$ 2.89
|
$ 0.84
|
$ 9.94
|
The sum of quarterly earnings
per share amounts is not the same as annual earnings per share amounts
because of changing numbers of shares outstanding.
During the third quarter
of 2000, UAL recorded an investment impairment of $61 million related to
its warrants in Priceline.com. Additionally, in the fourth quarter
2000, UAL recognized a pre-tax gain of $109 million on the sale of its
investment in GetThere.com. (See Note 6 "Investments".)
During the second quarter
of 1999, UAL recognized a pre-tax gain of $669 million on the sale of a
portion of its investment in Galileo. Additionally, in the fourth
quarter 1999, UAL recognized a pre-tax gain of $62 million on the sale
of a portion of its investment in Equant. (See Note 6 "Investments".)
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE.
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
Information required
by this item is incorporated by reference from the Company' s definitive
proxy statement for its 2001 Annual Meeting of Stockholders. Information
regarding the executive officers is included in Part I of this Form 10-K
under the caption "Executive Officers of the Registrant."
ITEM 11. EXECUTIVE COMPENSATION.
Information required
by this item is incorporated by reference from the Company' s definitive
proxy statement for its 2001 Annual Meeting of Stockholders.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT.
Information required
by this item is incorporated by reference from the Company' s definitive
proxy statement for its 2001 Annual Meeting of Stockholders.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Information required
by this item is incorporated by reference from the Company' s definitive
proxy statement for its 2001 Annual Meeting of Stockholders.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS
ON FORM 8-K.
(a) 1. Financial
Statements. The financial statements required by this item are
listed in Item 8, "Financial Statements and Supplementary Data" herein.
2.
Financial Statement Schedules. The financial statement schedule
required by this item is listed below and included in this report after
the signature page hereto.
All other schedules are omitted because they are not applicable, not
required or the required information is shown in the consolidated financial
statements or notes thereto.
(b) Reports on Form 8-K.
Form 8-K dated October 19,
2000 to report a cautionary statement for purposes of the "Safe Harbor
for Forward Looking Statements" provision of the Private Securities Litigation
Reform Act.
Form 8-K dated November 6,
2000 to report a cautionary statement for purposes of the "Safe Harbor
for Forward Looking Statements" provision of the Private Securities Litigation
Reform Act.
SIGNATURES
Pursuant to the requirements
of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant
has duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized, on the 22nd day of February, 2001.
UAL CORPORATION
/s/ James E. Goodwin
James E. Goodwin
Chairman of the Board and Chief
Executive Officer
Pursuant to the requirements
of the Securities Exchange Act of 1934, this report has been signed below
on the 22nd day of February 2001 by the following persons on behalf of
the registrant and in the capacities indicated.
| /s/ James E. Goodwin | /s/ Douglas A. Hacker | |
| James E. Goodwin | Douglas A. Hacker | |
| Chairman of the Board and Chief Executive Officer (principal executive officer) | Executive Vice President and Chief Financial Officer (principal financial and accounting officer) | |
| /s/ Rono Dutta | /s/ Hazel R. O' Leary | |
| Rono Dutta | Hazel R. O' Leary | |
| President and Director | Director | |
| /s/ John W. Creighton, Jr. | /s/ Deval L. Patrick | |
| John W. Creighton, Jr. | Deval L. Patrick | |
| Director | Director | |
| /s/ Frederick C. Dubinsky | /s/ John F. Peterpaul | |
| Frederick C. Dubinsky | John F. Peterpaul | |
| Director | Director | |
| /s/ Richard D. McCormick | /s/ Paul E. Tierney, Jr. | |
| Richard D. McCormick | Paul E. Tierney, Jr. | |
| Director | Director | |
|
/s/ John F. McGillicuddy |
/s/ John K. Van de Kamp | |
| John F. McGillicuddy | John K. Van de Kamp | |
| Director | Director | |
| /s/ James J. O' Connor | ||
| James J. O' Connor | ||
| Director | ||
UAL Corporation and Subsidiary Companies
Schedule II - Valuation and Qualifying Accounts
For the Year Ended December 31, 2000
| (In Millions) |
|
|
|
||
|
|
|
|
|
||
|
|
|
|
|
|
|
| Reserve deducted from asset to which
it applies:
|
|||||
| Allowance for doubtful accounts |
|
|
|
|
|
|
|
|
|
|
|
|
| Obsolescence allowance - | |||||
| Flight equipment spare parts |
|
|
|
|
|
|
|
|
|
|
|
|
F-1
___________
1Deduction from reserve for purpose for which reserve was created.
UAL Corporation and Subsidiary Companies
Schedule II - Valuation and Qualifying Accounts
For the Year Ended December 31, 1999
| (In Millions) |
|
|
|
||
|
|
|
|
|
||
|
|
|
|
|
|
|
| Reserve deducted from asset to which
it applies:
|
|||||
| Allowance for doubtful accounts |
|
|
|
|
|
|
|
|
|
|
|
|
| Obsolescence allowance - | |||||
| Flight equipment spare parts |
|
|
|
|
|
|
|
|
|
|
|
|
F-2
___________
1Deduction from reserve for purpose for which reserve was created.
UAL Corporation and Subsidiary Companies
Schedule II - Valuation and Qualifying Accounts
For the Year Ended December 31, 1998
| (In Millions) |
|
|
|
||
|
|
|
|
|
||
|
|
|
|
|
|
|
| Reserve deducted from asset to which
it applies:
|
|||||
| Allowance for doubtful accounts |
|
|
|
|
|
|
|
|
|
|
|
|
| Obsolescence allowance - | |||||
| Flight equipment spare parts |
|
|
|
|
|
|
|
|
|
|
|
|
F-3
___________
1Deduction from reserve for purpose for which reserve was
created.
| 3.1 | Restated Certificate of Incorporation of UAL Corporation ("UAL"), as amended (filed as Exhibit 3.1 to UAL' s Form 10-Q for the quarter ended June 30, 2000 and incorporated herein by reference). |
| 3.2 | By-laws (filed as Exhibit 3.2 to UAL' s Form 10-Q for the quarter ended September 30, 1999 and incorporated herein by reference). |
| 4.1 | Deposit Agreement dated as of July 12, 1994 between UAL Corporation and holders from time to time of Depository Receipts described herein. |
| 4.2 | Indenture dated as of December 20, 1996 between UAL Corporation and The First National Bank of Chicago, as Trustee (filed as Exhibit 4.2 to UAL' s Form 10-K for the year ended December 31, 1996 and incorporated herein by reference). |
| 4.3 | Officer' s Certificate relating to UAL' s 13-1/4% Junior Subordinated Debentures due 2026 (filed as Exhibit 4.3 to UAL' s Form 10-K for the year ended December 31, 1996 and incorporated herein by reference). |
| 4.4 | Form of UAL' s 13-1/4% Junior Subordinated Debenture due 2026 (filed as Exhibit 4.4 to UAL' s Form 10-K for the year ended December 31, 1996 and incorporated herein by reference). |
| 4.5 | Guarantee Agreement dated as of December 30, 1996 with respect to the 13-1/4% Trust Originated Preferred Securities of UAL Corporation Capital Trust I (filed as Exhibit 4.5 to UAL' s Form 10-K for the year ended December 31, 1996 and incorporated herein by reference). |
| 4.6 | Amended and Restated Declaration of Trust of UAL Corporation Capital Trust I dated as of December 30, 1996 (filed as Exhibit 4.6 to UAL' s Form 10-K for year ended December 31, 1996 and incorporated herein by reference). |
| UAL' s indebtedness under any single instrument does not exceed 10% of UAL' s total assets on a consolidated basis. Copies of such instruments will be furnished to the Securities and Exchange Commission upon request. | |
| 10.1 | Amended and Restated Agreement and Plan of Recapitalization, dated as of March 25, 1994 (the "Recapitalization Agreement"), as amended, among UAL Corporation, the Air Line Pilots Association, International ("ALPA") and the International Association of Machinists and Aerospace Workers ("IAM"). |
| 10.2 | Second Amendment to the Agreement and Plan of Recapitalization, dated as of June 2, 1994, among UAL, ALPA and the IAM. |
| 10.3 | Agreement, dated as of July 16, 1996, pursuant to Section 1.6q of the Recapitalization Agreement among UAL, ALPA and IAM (filed as Exhibit 10.3 to UAL' s Form 10-Q for the quarter ended June 30, 1996 and incorporated herein by reference). |
| 10.4 | UAL Corporation Employee Stock Ownership Plan, effective as of July 12, 1994. |
| 10.5 | First Amendment to UAL Corporation Employee Stock Ownership Plan, dated December 28, 1994. |
| 10.6 | Second Amendment to UAL Corporation Employee Stock Ownership Plan, dated as of August 17, 1995. |
| 10.7 | Third Amendment to UAL Corporation Employee Stock Ownership Plan, dated as of December 28, 1995 (filed as Exhibit 10.7 to UAL' s Form 10-K for the year ended December 31, 1996 and incorporated herein by reference). |
| 10.8 | Fourth Amendment to UAL Corporation Employee Stock Ownership Plan, dated as of July 16, 1996 (filed as Exhibit 10.1 to UAL' s Form 10-Q for the quarter ended June 30, 1996 and incorporated herein by reference). |
| 10.9 | Fifth Amendment to UAL Corporation Employee Stock Ownership Plan, dated as of December 31, 1996 (filed as Exhibit 10.10 of UAL' s Form 10-K for the year ended December 31, 1996 and incorporated herein by reference). |
| 10.10 | Sixth Amendment to UAL Corporation Employee Stock Ownership Plan, dated as of August 11, 1997 (filed as Exhibit 10.3 to UAL' s Form 10-Q for the quarter ended September 30, 1997, as amended, and incorporated herein by reference). |
| 10.11 | Seventh Amendment to UAL Corporation Employee Stock Ownership Plan, dated as of May 19, 1999 (filed as Exhibit 10.10 to UAL' s Form 10-K for the year ended December 31, 2000 and incorporated herein by reference). |
| 10.12 | Eighth Amendment to UAL Corporation Employee Stock Ownership Plan, dated as of November 10, 1999 (filed as Exhibit 10.11 to UAL' s Form 10-K for the year ended December 31, 2000 and incorporated herein by reference). |
| 10.13 | Ninth Amendment to UAL Corporation Employee Stock Ownership Plan, dated as of October 29, 1999 (filed as Exhibit 10.12 to UAL' s Form 10-K for the year ended December 31, 2000 and incorporated herein by reference). |
| 10.14 | Tenth Amendment to UAL Corporation Employee Stock Ownership Plan, dated as of April 28, 2000 (filed as Exhibit 10.3 to UAL' s Form 10-Q for the quarter ended June 30, 2000 and incorporated herein by reference). |
| 10.15 | Eleventh Amendment to UAL Corporation Employee Stock Ownership Plan, dated as of December 29, 2000. |
| 10.16 | UAL Corporation Employee Stock Ownership Plan Trust Agreement between UAL Corporation and State Street Bank and Trust Company ("State Street"), effective July 12, 1994. |
| 10.17 | UAL Corporation Supplemental ESOP, effective as of July 12, 1994. |
| 10.18 | First Amendment to UAL Corporation Supplemental ESOP, dated February 22, 1995. |
| 10.19 | Second Amendment to UAL Corporation Supplemental ESOP, dated as of August 17, 1995. |
| 10.20 | Third Amendment to UAL Corporation Supplemental ESOP, dated as of December 28, 1995. |
| 10.21 | Fourth Amendment to UAL Corporation Supplemental ESOP, dated as of July 16, 1996 (filed as Exhibit 10.2 to UAL' s Form 10-Q for the quarter ended June 30, 1996 and incorporated herein by reference). |
| 10.22 | Fifth Amendment to UAL Corporation Supplemental ESOP, dated as of December 31, 1996 (filed as Exhibit 10.17 to UAL' s Form 10-K for the year ended December 31, 1996 and incorporated herein by reference). |
| 10.23 | Sixth Amendment to UAL Corporation Supplemental ESOP, dated as of August 11, 1997 (filed as Exhibit 10.4 of UAL' s Form 10-Q for the quarter ended September 30, 1997, as amended, and incorporated herein by reference). |
| 10.24 | Seventh Amendment to UAL Corporation Supplemental ESOP, dated as of May 19, 1999 (filed as Exhibit 10.21 to UAL' s Form 10-K for the year ended December 31, 2000 and incorporated herein by reference). |
| 10.25 | Eighth Amendment to UAL Corporation Supplemental ESOP, dated as of November 10, 1999 (filed as Exhibit 10.22 to UAL' s Form 10-K for the year ended December 31, 2000 and incorporated herein by reference). |
| 10.26 | Ninth Amendment to UAL Corporation Supplemental ESOP, dated as of October 29, 1999 (filed as Exhibit 10.23 to UAL' s Form 10-K for the year ended December 31, 2000 and incorporated herein by reference). |
| 10.27 | Eleventh Amendment to UAL Corporation Supplemental ESOP |
| 10.28 | UAL Corporation Supplemental ESOP Trust Agreement between UAL Corporation and State Street, effective July 12, 1994. |
| 10.29 | Class I Junior Preferred Stockholders' Agreement, dated as of June 12, 1994. |
| 10.30 | Class SAM Preferred Stockholders' Agreement, dated as of July 12, 1994. |
| 10.31 | First Refusal Agreement, dated as of July 12, 1994, as amended (filed as Exhibit 10.25 to UAL' s Form 10-K for the year ended December 31, 1996 and incorporated herein by reference). |
| 10.32 | UAL Corporation 2000 Incentive Stock Plan (filed as Exhibit 10.1 to UAL' s Form 10-Q for the quarter ended June 30, 2000 and incorporated herein by reference). |
| 10.33 | United Employees Performance Incentive Plan (filed as Exhibit 10.1 to UAL' s Form 10-Q for the quarter ended June 30, 2000 and incorporated herein by reference). |
| 10.34 | UAL Corporation 1998 Restricted Stock Plan (filed as Exhibit 10.1 to UAL' s Form 10-Q for the quarter ended June 30, 1998 and incorporated herein by reference). |
| 10.35 | Summary Description of Compensation and Benefits for Directors (filed as Exhibit 10.34 to UAL' s Form 10-K for the year ended December 31, 1999 and incorporated herein by reference). |
| 10.36 | UAL Corporation 1995 Directors Plan, as amended June 26, 1997 (filed as Exhibit 10.1 of UAL' s Form 10-Q for the quarter ended September 30, 1997, as amended, and incorporated herein by reference). |
| 10.37 | United Supplemental Retirement Plan (filed as Exhibit 10.35 of UAL' s 10-K for the year ended December 31, 1998 and incorporated herein by reference). |
| 10.38 | Description of Officer Benefits (filed as Exhibit 10.36 of UAL' s 10-K for the year ended December 31, 1998 and incorporated herein by reference). |
| 10.39 | Employment Agreement, dated as of April 12, 1999, between UAL Corporation, United Air Lines, Inc. and James E. Goodwin (filed as Exhibit 10.1 of UAL' s Form 10-Q for the quarter ended June 30, 1999 and incorporated herein by reference). |
| 10.40 | Employment Agreement between William P. Hobgood and UAL and United, dated March 1, 2000 (filed as Exhibit 10.1 of UAL' s Form 10-Q for the quarter ended March 31, 2000 and incorporated herein by reference). |
| 10.41 | 2000 Agreement between United Air Lines, Inc. and the Air Line Pilots in the service of United Air Lines, Inc. represented by the Air Line Pilots Association, International. |
| 12 | Computation of Ratio of Earnings to Fixed Charges. |
| 12.1 | Computation of Ratio of Earnings to Fixed Charges and Preferred Stock Dividend Requirements. |
| 21 | List of UAL' s subsidiaries |
| 23 | Consent of Independent Public Accountants |
| 99 | Annual Report on Form 11-K for Employees' Stock Purchase Plan of UAL Corporation |
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<TYPE> EX-4.1
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UAL CORPORATION
FIRST CHICAGO TRUST COMPANY OF NEW YORK, As Depositary
AND
THE HOLDERS FROM TIME TO TIME OF
THE DEPOSITARY RECEIPTS DESCRIBED HEREIN
DEPOSIT AGREEMENT
Dated as of July 12, 1994
TABLE OF CONTENTS
ARTICLE I
Definitions
ARTICLE II
FORM OF RECEIPTS, DEPOSIT OF STOCK,EXECUTION AND DELIVERY, TRANSFER,SURRENDER AND REDEMPTION OF RECEIPTS
SECTION 2.1 Form and Transfer of Receipts
SECTION 2.2 Deposit of Stock; Execution and Delivery
of Receipts in Respect Thereof
SECTION 2.3 Registration of Transfer of Receipts
SECTION 2.4 Split-ups and Combinations of Receipts;
Surrender of Receipts and Withdrawal of Stock
SECTION 2.5 Limitations on Execution and Delivery,
Transfer, Surrender and Exchange of Receipts
SECTION 2.6 Lost Receipts, etc.
SECTION 2.7 Cancellation and Destruction of Surrendered
Receipts
SECTION 2.8 Redemption of Stock
ARTICLE III
CERTAIN OBLIGATIONS OFHOLDERS OF RECEIPTS AND THE COMPANY
SECTION 3.1 Filing Proofs, Certificates and Other
Information
SECTION 3.2 Payment of Taxes or Other Governmental
Charges
SECTION 3.3 Warranty as to Stock
ARTICLE IV
THE DEPOSITED SECURITIES; NOTICES
SECTION 4.1 Cash Distributions
SECTION 4.2 Distributions Other than Cash, Rights,
Preferences or Privileges
SECTION 4.3 Subscription Rights, Preferences or Privileges
SECTION 4.4 Notice of Dividends, etc.; Fixing Record
Date for Holders of Receipts
SECTION 4.5 Voting Rights
SECTION 4.6 Changes Affecting Deposited Securities
and Reclassifications, Recapitalizations, etc.
SECTION 4.7 Delivery of Reports
SECTION 4.8 List of Receipt Holders
ARTICLE V
THE DEPOSITARY, THE DEPOSITARY'SAGENTS, THE REGISTRAR AND THE COMPANY
SECTION 5.1 Maintenance of Offices, Agencies and Transfer
Books by the Depositary; Registrar
SECTION 5.2 Prevention of or Delay in Performance
by the Depositary, The Depositary's Agents, the Registrar or the Company
SECTION 5.3 Obligation of the Depositary, the Depositary's
Agents, The Registrar and the Company
SECTION 5.4 Resignation and Removal of the Depositary;
Appointment of Successor Depositary
SECTION 5.5 Corporate Notices and Reports
SECTION 5.6 Indemnification by the Company
SECTION 5.7 Charges and Expenses
SECTION 5.8 Deposit of Stock by the Company
SECTION 5.9 Tax Compliance
ARTICLE VI
AMENDMENT AND TERMINATION
SECTION 6.1 Amendment
SECTION 6.2 Termination
ARTICLE VII
MISCELLANEOUS
SECTION 7.1 Counterparts
SECTION 7.2 Exclusive Benefit of Parties
SECTION 7.3 Invalidity of Provisions
SECTION 7.4 Notices
SECTION 7.5 Appointment of Registrar
SECTION 7.6 Depositary's Agents
SECTION 7.7 Holders of Receipts Are Parties
SECTION 7.8 GOVERNING LAW
SECTION 7.9 Inspection of Deposit Agreement
SECTION 7.10 Headings
Annex A
DEPOSIT AGREEMENT, dated as of July 12, 1994,
among UAL CORPORATION, a Delaware corporation (the "Company"), FIRST CHICAGO TRUST COMPANY OF NEW YORK, a New York State trust Company (the "Depositary"), and the holders from time to time of the Receipts described herein.
WHEREAS, it is desired to provide, as hereinafter set forth in this Deposit Agreement, for the deposit of shares of Series B Preferred Stock of the Company with the Depositary for the purposes set forth in this Deposit Agreement and for the issuance hereunder of Receipts evidencing Depositary Shares in respect of the Stock so deposited; and
WHEREAS, the Receipts are to be substantially in the form of Exhibit A annexed hereto, with appropriate insertions, modifications and omissions, as hereinafter provided in this Deposit Agreement;
NOW, THEREFORE, in consideration of the promises contained herein, the
parties hereto agree as follows:
131:
138:
139:
ARTICLE I
DEFINITIONS
The following definitions shall, for all purposes, unless otherwise indicated, apply to the respective terms used in this Deposit Agreement:
"Certificate" shall mean the Amended and Restated Certificate of Incorporation of the Company, filed with the Secretary of State of the State of Delaware, that, among other things, establishes the Stock as a series of preferred stock of the Company.
"Company" shall mean the party named as such in the first paragraph of this Deposit Agreement and any successor hereunder.
"Deposit Agreement" shall mean this Deposit Agreement, as amended or supplemented from time to time.
"Depositary" shall mean the person named as such in the first paragraph of this Deposit Agreement and any successor as Depositary hereunder.
"Depositary Shares" shall mean depositary shares, each representing one one-thousandth (1/1,000) of a share of Stock and evidenced by a Receipt.
"Depositary's Agent" shall mean an agent appointed by the Depositary pursuant to Section 5.1 and shall include the Registrar if such Registrar is not the Depositary.
"Depositary's Office" shall mean the principal office of the Depositary, at which at any particular time its depositary receipt business shall be administered.
"Receipt" shall mean one of the depositary receipts, substantially in the form set forth as Exhibit A hereto, issued hereunder, whether in definitive or temporary form and evidencing the number of Depositary Shares held of record by the record holder of such Depositary Shares.
"record holder" or "holder" as applied to a Receipt shall mean the person in whose name a Receipt is registered on the books of the Depositary maintained for such purpose.
"Registrar" shall mean the Depositary or such other bank or trust company that shall be appointed to register ownership and transfers of Receipts as herein provided.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Stock" shall mean shares of the Company's Series B Preferred Stock,
without par value, $25,000 liquidation value per share.
ARTICLE II
FORM OF RECEIPTS, DEPOSIT OF STOCK, EXECUTION AND DELIVERY, TRANSFER, SURRENDER AND REDEMPTION OF RECEIPTS
SECTION 2.1 Form and Transfer of Receipts. Definitive Receipts shall be engraved or printed or lithographed on steel-engraved borders, with appropriate insertions, modifications and omissions as hereinafter provided, if required by any securities exchange on which the Receipts are listed. Pending the preparation of definitive Receipts or if definitive Receipts are not required by any securities exchange on which the Receipts are listed, the Depositary, upon the written order of the Company or any holder of Stock, as the case may be, delivered in compliance with Section 2.2, shall execute and deliver temporary Receipts that are printed, lithographed, typewritten, mimeographed or otherwise substantially of the tenor of the definitive Receipts in lieu of which they are issued and with such appropriate insertions, omissions, substitutions and other variations as the persons executing such Receipts may determine, as evidenced by their execution of such Receipts. If temporary Receipts are issued, the Company and the Depositary shall cause definitive Receipts to be prepared without unreasonable delay. After the preparation of definitive Receipts, the temporary Receipts shall be exchangeable for definitive Receipts upon surrender of the temporary Receipts at the Depositary's Office or at such other place or places as the Depositary shall determine, without charge to the holder. Upon surrender for cancellation of any one or more temporary Receipts, the Depositary shall execute and deliver in exchange therefor definitive Receipts representing the same number of Depositary Shares as represented by the surrendered temporary Receipt or Receipts. Such exchange shall be made at the Company's expense and without any charge to the holder therefor. Until so exchanged, the temporary Receipts shall in all respects be entitled to the same benefits under this Agreement, and with respect to the Stock, as definitive Receipts.
Receipts shall be executed by the Depositary by the manual signature of a duly authorized officer of the Depositary; provided that such signature may be a facsimile if a Registrar for the Receipts (other than the Depositary) shall have been appointed and such Receipts are countersigned by a manual signature of a duly authorized officer of the Registrar. No Receipt shall be entitled to any benefits under this Deposit Agreement or be valid or obligatory for any purpose unless it shall have been executed manually by a duly authorized officer of the Depositary or, if a Registrar for the Receipts (other than the Depositary) shall have been appointed, by manual or facsimile signature of a duly authorized officer of the Depositary and countersigned manually by a duly authorized officer of such Registrar. The Depositary shall record on its books each Receipt so signed and delivered as hereinafter provided.
Receipts shall be in denominations of any number of whole Depositary Shares. The Company shall deliver to the Depositary from time to time such quantities of Receipts as the Depositary may request to enable the Depositary to perform its obligations under this Deposit Agreement.
Receipts may be endorsed with or have incorporated in the text thereof such legends or recitals or changes not inconsistent with the provisions of this Deposit Agreement as may be required by the Depositary or required to comply with any applicable law or any regulation thereunder or with the rules and regulations of any securities exchange upon which the Stock, the Depositary Shares or the Receipts may be listed or to conform with any usage with respect thereto, or to indicate any special limitations or restrictions to which any particular Receipts are subject.
Title to Depositary Shares evidenced by a Receipt, which is properly endorsed or accompanied by a properly executed instrument of transfer, shall be transferable by delivery with the same effect as in the case of a negotiable instrument; provided that until transfer of a Receipt shall be registered on the books of the Depositary as provided in Section 2.3, the Depositary may, notwithstanding any notice to the contrary, treat the record holder thereof at such time as the absolute owner thereof for the purpose of determining the person entitled to distributions of dividends or other distributions or to any notice provided for in this Deposit Agreement and for all other purposes.
On each date on which the Stock is initially issued by the Company, the Depositary, upon receipt of written instructions from the Company and a certificate or certificates for the Stock to be deposited under this Deposit Agreement in accordance with the provisions of this Section 2.1, shall execute and deliver a Receipt or Receipts for the number of Depositary Shares representing such deposited Stock to the person or persons stated in such instructions as provided in Section 2.2.
If required by the Depositary, Stock presented for deposit at any time, whether or not the register of stockholders of the Company is closed, shall also be accompanied by an agreement or assignment, or other instrument satisfactory to the Depositary, that shall provide for the prompt transfer to the Depositary or its assigns of any dividend or right to subscribe for additional Stock or to receive other property that any person in whose name the Stock is or has been registered may thereafter receive upon or in respect of such deposited Stock or, in lieu thereof, such agreement of indemnity or other agreement as shall be satisfactory to the Depositary.
SECTION 2.2 Deposit of Stock; Execution and Delivery of Receipts in Respect Thereof. Subject to the terms and conditions of this Deposit Agreement, the Company or any holder of Stock may from time to time deposit shares of the Stock under this Deposit Agreement by delivering to the Depositary a certificate or certificates for the Stock to be deposited, properly endorsed or accompanied, if required by the Depositary, by a duly executed instrument of transfer or endorsement, in form satisfactory to the Depositary, together with all such certifications as may be required by the Depositary in accordance with the provisions of this Deposit Agreement, and together with a written order of the Company or such holder, as the case may be, directing the Depositary to execute and deliver to, or upon the written order of, the person or persons stated in such order a Receipt or Receipts for the number of Depositary Shares representing such deposited Stock.
Deposited Stock shall be held by the Depositary at the Depositary's Office or at such other place or places as the Depositary shall determine.
Upon receipt by the Depositary of a certificate or certificates for Stock deposited in accordance with the provisions of this Section, together with the other documents required as above specified, and upon recordation of the Stock on the books of the Company in the name of the Depositary or its nominee, the Depositary, subject to the terms and conditions of this Deposit Agreement, shall execute and deliver, to or upon the order of the person or persons named in the written order delivered to the Depositary referred to in the first paragraph of this Section, a Receipt or Receipts for the whole number of Depositary Shares representing the Stock so deposited and registered in such name or names as may be requested by such person or persons. The Depositary shall execute and deliver such Receipt or Receipts at the Depositary's Office or such other offices, if any, as the Depositary may designate. Delivery at other offices shall be at the risk and expense of the person requesting such delivery. In each case, delivery shall be made only upon payment as provided in Section 5.7 to the Depositary of all taxes and other governmental charges and any fees payable in connection with such deposit and transfer of the Stock.
SECTION 2.3 Registration of Transfer of Receipts. Subject to the terms and conditions of this Deposit Agreement, the Depositary shall register on its books from time to time transfers of Receipts upon any surrender thereof by the holder in person or by duly authorized attorney, properly endorsed or accompanied by a properly executed instrument of transfer or endorsement together with evidence of the payment of any transfer taxes as may be required by law. Thereupon, the Depositary shall execute a new Receipt or Receipts evidencing the same aggregate number of Depositary Shares as those evidenced by the Receipt or Receipts surrendered and deliver such new Receipt or Receipts to or upon the order of the person entitled thereto.
SECTION 2.4 Split-ups and Combinations of Receipts; Surrender of Receipts and Withdrawal of Stock. Upon surrender of a Receipt or Receipts at the Depositary's Office or at such other offices as it may designate for the purpose of effecting a split-up or combination of such Receipt or Receipts, and subject to the terms and conditions of this Deposit Agreement, the Depositary shall execute and deliver a new Receipt or Receipts in the authorized denomination or denominations requested, evidencing the aggregate number of Depositary Shares evidenced by the Receipt or Receipts surrendered, provided that the Depositary shall not issue any Receipt evidencing a fractional Depositary Share.
Any holder of a Receipt or Receipts representing any number of whole shares of Stock may (unless the related Depositary Shares have previously been called for redemption) withdraw the Stock and all money and other property, if any, represented thereby by surrendering such Receipt or Receipts, at the Depositary's Office or at such other offices as the Depositary may designate for such withdrawals. Thereafter, without unreasonable delay, the Depositary shall deliver to such holder, or to the person or persons designated by such holder as hereinafter provided, the number of whole shares of Stock and all money and other property, if any, represented by the Receipt or Receipts so surrendered for withdrawal, but holders of such whole shares of Stock shall not thereafter be entitled to deposit such Stock hereunder or to receive Depositary Shares therefor. If a Receipt delivered by the holder to the Depositary in connection with such withdrawal shall evidence a number of Depositary Shares in excess of the number of Depositary Shares representing the number of whole shares of Stock to be so withdrawn, the Depositary shall at the same time, in addition to such number of whole shares of Stock and such money and other property, if any, to be so withdrawn, deliver to such holder, or upon his order, a new Receipt evidencing such excess number of Depositary Shares, provided that the Depositary shall not issue any Receipt evidencing a fractional Depositary Share. Delivery of the Stock and money and other property being withdrawn may be made by the delivery of such certificates, documents of title and other instruments as the Depositary may deem appropriate, which, if required by the Depositary, shall be properly endorsed or accompanied by proper instruments of transfer.
If the Stock and the money and other property being withdrawn are to be delivered to a person or persons other than the record holder of the Receipt or Receipts being surrendered for withdrawal of Stock, such holders shall execute and deliver to the Depositary a written order so directing the Depositary and the Depositary may require that the Receipt or Receipts surrendered by such holder for withdrawal of such shares of Stock be properly endorsed in blank or accompanied by a properly executed instrument of transfer in blank.
Delivery of the Stock and the money and other property, if any, represented by Receipts surrendered for withdrawal shall be made by the Depositary at the Depositary's Office, except that, at the request, risk and expense of the holder surrendering such Receipt or Receipts and for the account of the holder thereof, such delivery may be made at such other place as may be designated by such holder.
SECTION 2.5 Limitations on Execution and Delivery, Transfer, Surrender and Exchange of Receipts. As a condition precedent to the execution and delivery, registration of transfer, split-up, combination, surrender or exchange of any Receipt, the Depositary, the Registrar, any of the Depositary's Agents or the Company may require payment to it of a sum sufficient for the payment (or, if the Depositary or the Company shall have made such payment, the reimbursement to it) of any charges or expenses payable by the holder of a Receipt pursuant to Sections 3.2 and 5.7, may require the production of evidence satisfactory to it as to the identity and genuineness of any signature and may also require compliance with such regulations, if any, as the Depositary or the Company may establish consistent with the provisions of this Deposit Agreement.
The deposit of Stock may be refused, the delivery of Receipts against Stock may be suspended, the registration of transfer of Receipts may be refused and the registration of transfer, surrender or exchange of outstanding Receipts may be suspended (i) during any period when the register of stockholders of the Company is closed, (ii) if any such action is deemed necessary or advisable by the Depositary, the Registrar, any of the Depositary's Agents or the Company at any time or from time to time because of any requirement of law or of any government or governmental body or commission or under any provision of this Deposit Agreement or (iii) with the approval of the Company, for any other reason.
SECTION 2.6 Lost Receipts, etc. If any receipt shall be mutilated, destroyed, lost or stolen, the Depositary in its discretion may execute and deliver a Receipt of like form and tenor in exchange and substitution for such mutilated Receipt, or in lieu of and in substitution for such destroyed, lost or stolen Receipt, upon (i) the filing by the holder thereof with the Depositary of evidence satisfactory to the Depositary of such destruction or loss or theft of such Receipt, of the authenticity thereof and of his or her ownership thereof, (ii) the furnishing of the Depositary with reasonable indemnification satisfactory to it and (iii) the payment of any expense (including fees, charges and expenses of the Depositary) in connection with such execution and delivery.
SECTION 2.7 Cancellation and Destruction of Surrendered Receipts. All Receipts surrendered to the Depositary or any Depositary's Agent shall be cancelled by the Depositary and returned to the Company. Except as prohibited by applicable law or regulation, the Company is authorized to destroy all Receipts so cancelled.
SECTION 2.8 Redemption of Stock. Whenever the Company shall be permitted and shall elect to redeem shares of Stock in accordance with the provisions of the Certificate, it shall (unless otherwise agreed to in writing with the Depositary) give or cause notice to be given to the Depositary not less than 30 days, but not more than 60 days, prior to the date of such proposed redemption of Stock and of the number of such shares held by the Depositary to be so redeemed and the applicable redemption price, as set forth in the Certificate, which notice shall be accompanied by a certificate from the Company stating that such redemption of Stock is in accordance with the provisions of the Certificate. On the date of such redemption, if the Company shall then have paid or caused to be paid in full to the Depositary the redemption price of the Stock to be redeemed, plus an amount equal to any accrued and unpaid dividends thereon to the date fixed for redemption, in accordance with the provisions of the Certificate, the Depositary shall redeem the number of Depositary Shares representing such Stock. The Depositary shall mail notice of the Company's redemption of Stock and the proposed simultaneous redemption of the number of Depositary Shares representing the Stock to be redeemed by first-class mail, postage prepaid, not less than 20 days, but not more than 50 days, prior to the date fixed for redemption of such Stock and Depositary Shares (the "Redemption Date") to the record holders of the Receipts evidencing the Depositary Shares to be so redeemed, at the address of such holders as they appear on the records of the Depositary; but neither failure to mail any such notice of redemption of Depositary Shares to one or more such holders nor any defect in any notice of redemption of Depositary Shares to one or more such holders shall affect the sufficiency of the proceedings for redemption as to the other holders. The Company shall provide the Depositary with the information necessary for the Depositary to prepare such notice and each such notice shall state: (i) the Redemption Date, (ii) the number of Depositary Shares to be redeemed and, if less than all the Depositary Shares held by any such holder are to be redeemed, the number of such Depositary Shares held by such holder to be so redeemed, (iii) the redemption price, (iv) the place or places where Receipts evidencing Depositary Shares are to be surrendered for payment of the redemption price, and (v) that dividends in respect of the Stock represented by the Depositary Shares to be redeemed shall cease to accrue on such Redemption Date. If less than all the outstanding Depositary Shares are to be redeemed, the Depositary Shares to be so redeemed shall be selected by the Depositary by lot or pro rata (as nearly as may be) or by any other method, in each case, as determined by the Depositary in its sole discretion to be equitable.
Notice having been mailed by the Depositary as aforesaid, from and after the Redemption Date (unless the Company shall have failed to provide the funds necessary to redeem the Stock evidenced by the Depositary Shares called for redemption) (i) dividends on the shares of Stock so called for redemption shall cease to accrue from and after such date, (ii) the Depositary Shares being redeemed from such proceeds shall be deemed no longer to be outstanding, (iii) all rights of the holders of Receipts evidencing such Depositary Shares (except the right to receive the redemption price) shall, to the extent of such Depositary Shares, cease and terminate, and (iv) upon surrender in accordance with such redemption notice of the Receipts evidencing any such Depositary Shares called for redemption (properly endorsed or assigned for transfer, if the Depositary or applicable law shall so require), such Depositary Shares shall be redeemed by the Depositary at a redemption price per Depositary Share equal to one one-thousandth (1/1,000) of the redemption price per share paid with respect to the shares of Stock plus all money and other property, if any, represented by such Depositary Shares, including all amounts paid by the Company in respect of dividends that on the Redemption Date have accumulated on the shares of Stock to be so redeemed and have not theretofore been paid.
If fewer than all of the Depositary Shares evidenced by a Receipt are called for redemption, the Depositary shall deliver to the holder of such Receipt upon its surrender to the Depositary, together with the redemption payment, a new Receipt evidencing the Depositary Shares evidenced by such prior Receipt and not called for redemption. The Depositary shall not be required (a) to issue, transfer or exchange any Receipts for a period beginning at the opening of business ten days next preceding any selection of Depositary Shares and Stock to be redeemed and ending at the close of business on the day of the mailing of notice of redemption of Depositary Shares or (b) to transfer or exchange for another Receipt any Receipt evidencing Depositary Shares called or being called for redemption in whole or in part, except as provided in the preceding paragraph of this Section 2.8.
ARTICLE III
CERTAIN OBLIGATIONS OF HOLDERS OF RECEIPTS AND THE COMPANY
SECTION 3.1 Filing Proofs, Certificates and Other Information. Any holder of a Receipt may be required from time to time to file such proof of residence, or other matters or other information, to execute such certificates and to make such representations and warranties as the Depositary or the Company may reasonably deem necessary or proper. The Depositary or the Company may withhold the delivery, or delay the registration of transfer, redemption or exchange, of any Receipt or the withdrawal or conversion of the Stock represented by the Depositary Shares evidenced by any Receipt or the distribution of any dividend or other distribution or the sale of any rights or of the proceeds thereof until such proof or other information is filed or such certificates are executed or such representations and warranties are made.
SECTION 3.2 Payment of Taxes or Other Governmental Charges. If any tax or other governmental charge shall become payable by or on behalf of the Depositary with respect to any Receipt, the Depositary Shares evidenced by the Receipts, the Stock (or any beneficial interest therein) or any transaction referred to in Section 4.6, such taxes or charges shall be payable by the holder of the Receipts. Holders of Receipts shall also be obligated to make payments to the Depositary of certain charges and expenses, as provided in Section 5.7. Registration of transfer of any Receipt or any withdrawal of Stock and all money or other property, if any, represented by the Depositary Shares evidenced by such Receipt may be refused until any such payment due is made, and any dividends or other distributions may be withheld or any part of or all the Stock or other property represented by the Depositary Shares evidenced by such Receipt and not theretofore sold may be sold for the account of the holder thereof (after attempting by reasonable means to notify such holder prior to such sale), and such dividends or other distributions or the proceeds of any such sale may be applied to any payment of such charges or expenses, the holder of such Receipt remaining liable for any deficiency.
SECTION 3.3 Warranty as to Stock. The Company hereby represents and warrants and each person so depositing Stock under this Deposit Agreement shall be deemed thereby to represent and warrant that the Stock and each certificate therefor, when issued, shall be duly authorized, validly issued, fully paid and nonassessable. Such representation and warranty shall survive the deposit of the Stock and the issuance of Receipts.
ARTICLE IV
THE DEPOSITED SECURITIES; NOTICES
SECTION 4.1 Cash Distributions. Whenever the Depositary shall receive any cash dividend or other cash distribution on Stock, the Depositary shall, subject to Section 3.1 and 3.2, distribute to record holders of Receipts on the record date fixed pursuant to Section 4.4 such amounts of such dividend or distribution as are, as nearly as practicable, in proportion to the respective numbers of Depositary Shares evidenced by the Receipts held by such holders; provided that, if the Company or the Depositary shall be required to withhold and shall withhold from any cash dividend or other cash distribution in respect of the Stock an amount on account of taxes or as otherwise required by law, regulation or court process, the amount made available for distribution or distributed in respect of Depositary Shares shall be reduced accordingly. If the calculation of any such cash dividend or other cash distribution to be paid to any record holder on the aggregate number of Receipts held by such holder results in an amount that is a fraction of a cent, the amount the Depositary shall distribute to such record holder shall be rounded to the next highest whole cent, and upon request of the Depositary, the Company shall pay the additional amount to the Depositary for distribution.
SECTION 4.2 Distributions Other than Cash, Rights, Preferences or Privileges. Whenever the Depositary shall receive any distribution other than cash, rights, preferences or privileges upon the Stock, the Depositary shall, subject to Sections 3.1 and 3.2, distribute to record holders of Receipts on the record date fixed pursuant to Section 4.4 such amounts of the securities or property received by it as are, as nearly as practicable, in proportion to the respective numbers of Depositary Shares evidenced by the Receipts held by such holders, in any manner that the Depositary may deem equitable and practicable for accomplishing such distribution. If in the opinion of the Depositary such distribution cannot be made proportionately among such record holders, or if for any other reason (including any requirement that the Company or the Depositary withhold an amount on account of taxes or as otherwise required by law, regulation or court process) the Depositary deems such distribution not to be feasible, the Depositary may adopt such method as it deems equitable and practicable for the purpose of effecting such distribution, including the sale (at public or private sale) of the securities or property thus received, or any part thereof, at such place or places and upon such terms as it may deem proper. The net proceeds of any such sale shall, subject to Sections 3.1 and 3.2, be distributed or made available for distribution, as the case may be, by the Depositary to record holders of Receipts as provided by Section 4.1 in the case of a distribution received in cash.
SECTION 4.3 Subscription Rights, Preferences or Privileges. If the Company shall at any time offer or cause to be offered to the persons in whose names Stock is recorded on the books of the Company any rights, preferences or privileges to subscribe for or to purchase any securities or any rights, preferences or privileges of any other nature, such rights, preferences or privileges shall in each such instance be made available by the Depositary to the record holders of Receipts in such manner as the Depositary may determine, either by the issuance to such record holders of warrants representing such rights, preferences or privileges or by such other method as may be approved by the Depositary in its discretion with the approval of the Company; provided that, (i) if at the time of issue or offer of any such rights, preferences or privileges the Depositary determines that it is not lawful or (after consultation with the Company) not feasible to make such rights, preferences or privileges available to holders of Receipts by the issue of warrants or otherwise or (ii) if and to the extent so instructed by holders of Receipts who do not desire to exercise such rights, preferences or privileges, then the Depositary, in its discretion (with approval of the Company, if the Depositary has determined that it is not feasible to make such rights, preferences or privileges available), may, if applicable laws or the terms of such rights, preferences or privileges so permit, sell such rights, preferences or privileges at public or private sale, at such place or places and upon such terms as it may deem proper. The net proceeds of any such sale shall, subject to Sections 3.1 and 3.2, be distributed by the Depositary to the record holders of Receipts entitled thereto as provided by Section 4.1 in the case of a distribution received in cash.
If the securities to which such rights, preferences or privileges relate must be registered under the Securities Act in order to be offered or sold to holders of Receipts, the Company shall file a registration statement under the Securities Act with respect to such rights, preferences or privileges and securities promptly and shall use its best efforts and take all steps available to it to cause such registration statement to become effective sufficiently in advance of the expiration of such rights, preferences or privileges to enable such holders to exercise such rights, preferences or privileges. In no event shall the Depositary make available to the holders of Receipts any right, preference or privilege to subscribe for or to purchase any securities unless and until it has received written notice from the Company that such registration statement has become effective or that the offer and sale of such securities to such holders are exempt from registration under the Securities Act and the Company shall have provided to the Depositary an opinion of counsel to such effect. If any other action under the laws of any jurisdiction or any governmental or administrative authorization, consent or permit is required to permit such rights, preferences or privileges to be made available to holders of Receipts, the Company shall use its reasonable best efforts to take such action or obtain such authorization, consent or permit sufficiently in advance of the expiration of such rights, preferences or privileges to enable such holders to exercise such rights, preferences or privileges.
SECTION 4.4 Notice of Dividends, etc.; Fixing Record Date for Holders of Receipts. Whenever any cash dividend or other cash distribution shall become payable or any distribution other than cash shall be made, or if rights, preferences or privileges shall at any time be offered, with respect to the Stock, or whenever the Depositary shall receive notice of any meeting at which holders of Stock are entitled to vote or of which holders of Stock are entitled to notice, or whenever the Depositary and the Company shall decide that it is appropriate, the Depositary shall in each such instance fix a record date (which shall be the same date as the record date fixed by the Company with respect to or otherwise in accordance with the terms of the Stock) for determining which holders of Receipts shall be entitled to receive such dividend, distribution, rights, preferences or privileges or the net proceeds of the sale thereof, or to give instructions for the exercise of voting rights at any such meeting, or shall be entitled to notice of such meeting or for any other appropriate reasons.
SECTION 4.5 Voting Rights. Upon receipt of notice of any meeting at which the holders of Stock are entitled to vote, the Depositary shall, as soon as practicable thereafter, mail to the record holders of Receipts a notice which shall be provided by the Company that shall contain (i) such information as is contained in such notice of meeting and (ii) a statement that the holders may, subject to any applicable restrictions, instruct the Depositary as to the exercise of the voting rights pertaining to the amount of Stock represented by their respective Depositary Shares (including an express indication that instructions may be given to the Depositary to give a discretionary proxy to a person designated by the Company) and a brief statement as to the manner in which such instructions may be given. Upon the written request of the holders of Receipts on the relevant record date, the Depositary shall endeavor insofar as practicable to cast or cause to be cast, in accordance with the instructions set forth in such requests, the number of votes in respect of the Stock represented by the Depositary Shares evidenced by Receipts as to which voting instructions are received. The Company hereby agrees to take all reasonable action that may be deemed necessary by the Depositary to enable the Depositary to cast such votes or cause such votes to be cast. In the absence of instructions from the holder of a Receipt, the Depositary shall not cast any vote (but, at its discretion, may appear at any meeting with respect to such Stock unless directed to the contrary by the holders of all the Receipts) in respect of the Stock represented by the Depositary Shares evidenced by such Receipt.
SECTION 4.6 Changes Affecting Deposited Securities and Reclassifications, Recapitalizations, etc. Upon any change in par or stated value or liquidation preference, split-up, combination or any other reclassification of the Stock, or upon any recapitalization, reorganization, merger or consolidation affecting the Company or to which it is a party, the Depositary may in its discretion with the approval of, and shall upon the instructions of, the Company, and (in either case) in such manner as the Depositary may deem equitable, (i) make such adjustments as are certified by the Company in the fraction of an interest represented by one Depositary Share in one share of Stock as may be necessary fully to reflect the effects of such change in par or stated value or liquidation preference, split-up, combination or other reclassification of the Stock, or of such recapitalization, reorganization, merger or consolidation, and (ii) treat any securities that shall be received by the Depositary in exchange for or upon conversion of or in respect of the Stock as new deposited securities so received in exchange for or upon conversion or in respect of such Stock. In any such case the Depositary may in its discretion, with the approval of the Company, execute and deliver additional Receipts or may call for the surrender of all outstanding Receipts to be exchanged for new Receipts specifically describing such new deposited securities. Anything to the contrary herein notwithstanding, holders of Receipts shall have the right from and after the effective date of any such change in par or stated value or liquidation preference, split-up, combination or other reclassification of the Stock or any such recapitalization, reorganization, merger or consolidation to surrender such Receipts to the Depositary with instructions to convert, exchange or surrender the Stock represented thereby only into or for, as the case may be, the kind and amount of shares of stock and other securities and property and cash into which the Stock represented by such Receipts might have been converted or for which such Stock might have been exchanged or surrendered immediately prior to the effective date of such transaction.
SECTION 4.7 Delivery of Reports. The Depositary shall, at the expense of the Company, furnish to holders of Receipts any reports and communications received from the Company that are received by the Depositary as the holder of Stock.
SECTION 4.8 List of Receipt Holders. Promptly upon request from time to time by, and at the expense of, the Company, the Depositary shall furnish to it a list, as of the most recent practicable date, of the names, addresses and holdings of Depositary Shares of all record holders of Receipts. The Company shall be entitled to receive such list twice annually without charge.
ARTICLE V
THE DEPOSITARY, THE DEPOSITARY'S AGENTS, THE REGISTRAR AND THE COMPANY
SECTION 5.1 Maintenance of Offices, Agencies and Transfer Books by the Depositary; Registrar. Upon execution of this Deposit Agreement, the Depositary shall maintain at the Depositary's Office, facilities for the execution and delivery, registration and registration of transfer, surrender and exchange of Receipts, and at the offices of the Depositary's Agents, if any, facilities for the delivery, registration of transfer, surrender and exchange of Receipts, all in accordance with the provisions of this Deposit Agreement.
The Depositary shall keep books at the Depositary's Office for the registration and registration of transfer of Receipts, which books during normal business hours shall be open for inspection by the record holders of Receipts, provided that any such holder requesting to exercise such right shall certify to the Depositary that such inspection shall be for a proper purpose reasonably related to such person's interest as an owner of Depositary Shares evidenced by the Receipts.
The Depositary may close such books, at any time or from time to time, when deemed necessary or appropriate by it in connection with the performance of its duties hereunder.
The Depositary may, with the approval of the Company, appoint a Registrar for registration of the Receipts or the Depositary Shares evidenced thereby. If the Receipts or the Depositary Shares evidenced thereby or the Stock represented by such Depositary Shares shall be listed on one or more national stock exchanges, the Depositary shall appoint a Registrar (acceptable to the Company) for registration of such Receipts or Depositary Shares in accordance with any requirements of such exchange. Such Registrar (which may be the Depositary if so permitted by the requirements of any such exchange) may be removed and a substitute registrar appointed by the Depositary upon the request or with the approval of the Company. If the Receipts, such Depositary Shares or such Stock are listed on one or more other stock exchanges, the Depositary shall, at the request and at the expense of the Company, arrange such facilities for the delivery, registration, registration of transfer, surrender and exchange of such Receipts, such Depositary Shares or such Stock as may be required by law or applicable stock exchange regulation.
The Depositary may from time to time appoint Depositary's Agents to act in any respect for the Depositary for the purposes of this Deposit Agreement and may at any time appoint additional Depositary's Agents and vary or terminate the appointment of such Depositary's Agents. The Depositary shall notify the Company of any such action.
SECTION 5.2 Prevention of or Delay in Performance by the Depositary, the Depositary's Agents, the Registrar or the Company. Neither the Depositary nor any Depositary's Agent nor the Registrar nor the Company shall incur any liability to any holder of any Receipt if by reason of any provision of any present or future law, or regulation thereunder, of the United States of America or of any other governmental authority or, in the case of the Depositary, the Depositary's Agent or the Registrar, by reason of any provision, present or future, of the Certificate or by reason of any act of God or war or other circumstance beyond the reasonable control of the relevant party, the Depositary, the Depositary's Agent, the Registrar or the Company shall be prevented, delayed or forbidden from, or subjected to any penalty on account of, doing or performing any act or thing that the terms of this Deposit Agreement provide shall be done or performed; nor shall the Depositary, any Depositary's Agent, the Registrar or the Company incur liability to any holder of a Receipt (i) by reason of any nonperformance or delay, caused as aforesaid, in the performance of any act or thing that the terms of this Deposit Agreement shall provide shall or may be done or performed or (ii) by reason of any exercise of, or failure to exercise, any discretion provided for in this Deposit Agreement except, in the case of any such exercise or failure to exercise discretion not caused as aforesaid, if caused by the gross negligence, willful misconduct or bad faith of the party charged with such exercise or failure to exercise.
SECTION 5.3 Obligation of the Depositary, the Depositary's Agents, the Registrar and the Company. Neither the Depositary nor any Depositary's Agent nor the Registrar nor the Company assumes any obligation or shall be subject to any liability under this Deposit Agreement or any Receipt to holders of Receipts other than for its gross negligence, willful misconduct or bad faith in performing such duties as are specifically set forth in this Deposit Agreement.
Neither the Depositary nor any Depositary's Agent nor the Registrar nor the Company shall be under any obligation to appear in, prosecute or defend any action, suit or other proceeding in respect of the Stock, the Depositary Shares or the Receipts that in its opinion may involve it in expense or liability unless indemnity satisfactory to it against all expense and liability be furnished as often as may be required.
Neither the Depositary nor any Depositary's Agent nor the Registrar nor the Company shall be liable for any action or any failure to act by it in reliance upon the written advice of legal counsel or accountants, or information from any person presenting Stock for deposit, any holder of a Receipt or any other person believed by it in good faith to be competent to give such information. The Depositary, any Depositary's Agent, the Registrar and the Company may each rely and shall each be protected in acting upon any written notice, request, direction or other document believed by it to be genuine and to have been signed or presented by the proper party or parties.
The Depositary shall not be responsible for any failure to carry out any instruction to vote any of the shares of Stock or for the manner or effect of any such vote made, as long as any such action or non-action is in good faith. The Depositary undertakes, and any Registrar shall be required to undertake, to perform such duties and only such duties as are specifically set forth in this Agreement, and no implied covenants or obligations shall be read into this Agreement against the Depositary or any Registrar. The Depositary shall indemnify the Company and hold it harmless from any loss, liability or expense (including the reasonable costs and expenses of defending itself) actually incurred or suffered arising from acts performed or omitted by the Depositary, including when such Depositary acts as Registrar, or the Depositary's Agents in connection with this Agreement directly related to its or their negligence, willful misconduct or bad faith. The indemnification obligations of the Depositary set forth in this Section 5.3 shall survive any termination of this Agreement and any succession of any Depositary.
The Depositary, its parent, affiliates and subsidiaries, the Depositary's Agents, and the Registrar may own, buy, sell and deal in any class of securities of the Company and its affiliates and in Receipts or Depositary Shares or become pecuniarily interested in any transaction in which the Company or its affiliates may be interested or contract with or lend money to or otherwise act as fully or as freely as if it were not the Depositary, its parent, affiliate or subsidiary or the Depositary's Agent or the Registrar hereunder. The Depositary may also act as trustee, transfer agent or registrar of any of the securities of the Company and its affiliates.
It is intended that none of the Depositary, any Depositary's Agent or the Registrar, acting as the Depositary, the Depositary's Agent or the Registrar, as the case may be, shall be deemed to be an "issuer" of the securities under the federal securities laws or applicable state securities laws, it being expressly understood and agreed that the Depositary, any Depositary's Agent and the Registrar are acting only in a ministerial capacity as Depositary or Registrar for the Stock.
Neither the Depositary (or its officers, directors, employees or agents) nor any Depositary's Agent nor the Registrar makes any representation or has any responsibility as to the validity of the registration statements pursuant to which the Depositary Shares are registered under the Securities Act, the Stock, the Depositary Shares or the Receipts (except for its counter-signatures thereon) or any instruments referred to therein or herein or as to the correctness of any statement made therein or herein. The Depositary assumes no responsibility for the correctness of the description that appears in the Receipts, which can be taken as a statement of the Company summarizing certain provisions of this Deposit Agreement. Notwithstanding any other provision herein or in the Receipts, the Depositary makes no warranties or representations as to the validity, genuineness or sufficiency of any Stock at any time deposited with the Depositary hereunder or of the Depositary Shares, as to the validity or sufficiency of this Deposit Agreement, as to the value of the Depositary Shares or as to any right, title or interest of the record holders of Receipts in and to the Depositary Shares. The Depositary shall not be accountable for the use or application by the Company of the Depositary Shares or the Receipts or the proceeds thereof.
SECTION 5.4 Resignation and Removal of the Depositary; Appointment of Successor Depositary. The Depositary may at any time resign as Depositary hereunder by delivering notice of its election to do so to the Company, such resignation to take effect upon the appointment of a successor Depositary and acceptance of such appointment by such successor as hereinafter provided.
The Depositary may at any time be removed by the Company by notice of such removal delivered to the Depositary, such removal to take effect upon the appointment of a successor Depositary and acceptance of such appointment by such successor as hereinafter provided. If at any time the Depositary acting hereunder shall resign or be removed, the Company shall, within 60 days after the delivery of the notice of resignation or removal, as the case may be, appoint a successor Depositary, which shall be a bank or trust company having its principal office in the United States of America and having a combined capital and surplus of at least $50,000,000. If no successor Depositary shall have been so appointed and have accepted appointment within 60 days after delivery of such notice, the resigning or removed Depositary may petition any court of competent jurisdiction for the appointment of a successor Depositary. Every successor Depositary shall execute and deliver to its predecessor and to the Company an instrument in writing accepting its appointment hereunder, and thereupon such successor Depositary, without any further act or deed, shall become fully vested with all the rights, powers, duties and obligations of its predecessor and for all purposes shall be the Depositary under this Deposit Agreement, and such predecessor, upon payment of all sums due it and on the written request of the Company, shall execute and deliver an instrument transferring to such successor all rights and powers of such predecessor hereunder, shall duly assign, transfer and deliver all right, title and interest in the Stock and any moneys or property held hereunder to such successor and shall deliver to such successor a list of the record holders of all outstanding Receipts and such records, books and other information in its possession relating thereto. Any successor Depositary shall promptly mail notice of its appointment to the record holders of Receipts.
Any corporation into or with which the Depositary may be merged, consolidated or converted shall be the successor of such Depositary without the execution or filing of any document or any further act, and notice thereof shall not be required hereunder. Such successor Depositary may authenticate the Receipts in the name of the predecessor Depositary or in the name of the successor Depositary.
SECTION 5.5 Corporate Notices and Reports. The Company agrees that it shall deliver to the Depositary, and the Depositary shall, promptly after receipt thereof transmit to the record holders of Receipts, in each case at the addresses recorded in the Depositary's books, copies of all notices and reports (including without limitation financial statements) required by law or by the rules of any national securities exchange upon which the Stock, the Depositary Shares or the Receipts are listed, to be furnished to the record holders of Receipts or that the Company otherwise determines to furnish. Such transmission shall be at the Company's expense and the Company shall provide the Depositary with such number of copies of such documents as the Depositary may reasonably request.
SECTION 5.6 Indemnification by the Company. The Company shall indemnify the Depositary, any Depositary's Agent and the Registrar against, and hold each of them harmless from, any loss, liability or expense (including the reasonable costs and expenses of defending itself) that may arise out of acts performed or omitted in connection with this Agreement and the Receipts by the Depositary, any Registrar or any of their respective agents (including any Depositary's Agent), except for any liability arising out of negligence, willful misconduct or bad faith on the respective parts of any such person or persons. The obligations of the Company set forth in this Section 5.6 shall survive termination of this Agreement and any succession of any Depositary or Depositary's Agent.
SECTION 5.7 Charges and Expenses. The Company shall pay all transfer and other taxes and governmental charges arising solely from the existence of the depositary arrangements provided for herein. The Company shall pay all charges of the Depositary in connection with the initial deposit of the Stock and the initial issuance of the Depositary Shares, all withdrawals of shares of the Stock by owners of Depositary Shares, and any redemption or exchange of the Stock. All other transfer and other taxes and governmental charges shall be at the expense of holders of Depositary Shares. If, at the request of a holder of Receipts, the Depositary incurs charges or expenses for which it is not otherwise liable hereunder, such holder shall be liable for such charges and expenses. All other charges and expenses of the Depositary and any Depositary's Agent hereunder (including, in each case, reasonable fees and expenses of counsel) incident to the performance of their respective obligations hereunder shall be paid upon prior consultation and agreement between the Depositary and the Company as to the amount and nature of such charges and expenses. The Depositary shall present its statement for charges and expenses to the Company at such intervals as the Company and the Depositary may agree.
SECTION 5.8. Deposit of Stock by the Company. The Company agrees with the Depositary that neither the Company nor any company controlled by the Company shall at any time deposit any Stock if such Stock is required to be registered under the provisions of the Securities Act and no registration statement is at such time in effect as to such Stock.
SECTION 5.9 Tax Compliance. The Depositary, on its own behalf and on behalf of the Company shall comply with all applicable certification, information reporting and withholding (including "backup" withholding) requirements imposed by applicable tax laws, regulations or administrative practice with respect to (i) any payments made with respect to the Depositary Shares or (ii) the issuance, delivery, holding, transfer, redemption or exercise of rights under the Receipts or the Depositary Shares. Such compliance shall include, without limitation, the preparation and timely filing of required returns and the timely payment of all amounts required to be withheld to the appropriate taxing authority or its designated agent. The Company shall fully cooperate with the Depositary in fulfilling any and all duties set forth in this Section 5.9.
The Depositary shall comply with directions received from the Company with respect to the application of such requirements to particular payments or holders or in other particular circumstances and may for purposes of this Agreement rely on any such direction in accordance with the provisions of Section 5.3 hereof.
The Depositary shall maintain all appropriate records documenting compliance with such requirements and shall make such records available on request to the Company or to its authorized representatives.
ARTICLE VI
AMENDMENT AND TERMINATION
SECTION 6.1 Amendment. The form of the Receipts and any provisions of this Deposit Agreement may at any time and from time to time be amended by agreement between the Company and the Depositary in any respect that they may deem necessary or desirable, provided that no such amendment (other than any change in the fees of any Depositary or Registrar, which shall not go into effect sooner than 30 days after notice thereof to the holders of the Receipts) that materially and adversely alters the rights of the holders of Receipts shall become effective unless such amendment is approved by the holders of at least a majority of the Depositary Shares then outstanding. Every holder of an outstanding Receipt at the time any such amendment becomes effective shall be deemed, by continuing to hold such Receipt, to consent and agree to such amendment and to be bound by the Deposit Agreement as amended thereby.
SECTION 6.2 Termination. This Agreement may be terminated by the Company or the Depositary only after (i) all outstanding Depositary Shares have been redeemed pursuant to Section 2.8 or (ii) there shall have been made a final distribution in respect of the Stock in connection with any liquidation, dissolution or winding up of the Company and such distribution shall have been distributed to the holders of Receipts pursuant to Sections 4.1 or 4.2, as applicable.
If any Receipts shall remain outstanding after the date of termination of this Deposit Agreement, the Depositary thereafter shall discontinue the transfer of Receipts, shall suspend the distribution of dividends to the holders thereof and shall not give any further notices (other than notice of such termination) or perform any further acts under this Deposit Agreement, except that the Depositary shall continue to collect dividends and other distributions pertaining to the Stock, shall sell rights, preferences or privileges as provided in this Deposit Agreement and shall continue to deliver the Stock and any money and other property represented by Receipts upon surrender thereof by the holders thereof. At any time after the expiration of two years from the date of termination, the Depositary may sell Stock then held hereunder at public or private sale, at such places and upon such terms as it deems proper and may thereafter hold the net proceeds of any such sale, together with any money and other property held by it hereunder, without liability for interest, for the benefit, pro rata in accordance with their holdings, of the holders of Receipts that have not theretofore been surrendered. After making such sale, the Depositary shall be discharged from all obligations under this Deposit Agreement except to account for such net proceeds and money and other property.
Upon the termination of this Deposit Agreement, the Company shall be discharged from all obligations under this Deposit Agreement except for its obligations to the Depositary, the Registrar and any Depositary's Agent under Sections 5.6 and 5.7.
ARTICLE VII
MISCELLANEOUS
SECTION 7.1 Counterparts. This Deposit Agreement may be executed in any number of counterparts, and by each of the parties hereto on separate counterparts, each of which counterparts, when so executed and delivered, shall be deemed an original, but all such counterparts taken together shall constitute one and the same instrument.
SECTION 7.2 Exclusive Benefit of Parties. This Deposit Agreement is for the exclusive benefit of the parties hereto, and their respective successors hereunder, and shall not be deemed to give any legal or equitable right, remedy or claim to any other person whatsoever.
SECTION 7.3 Invalidity of Provisions. If one or more of the provisions contained in this Deposit Agreement or in the Receipts should be or become invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein or therein shall not be affected, prejudiced or disturbed thereby.
SECTION 7.4 Notices. Any and all notices to be given to the Company hereunder or under the Receipts shall be in writing and shall be deemed to have been duly given if personally delivered or sent by mail, or by telegram or facsimile transmission confirmed by letter, addressed to the Company at:
[if by mail]
UAL Corporation
P.O. Box 66100
Chicago, Illinois 60666
Attention: Corporate Secretary
or
[other delivery]
UAL Corporation
1200 Algonquin Road
Elk Grove Township, Illinois 60007
Attention: Corporate Secretary
Facsimile No.: (708) 952-4683
or at any other address of which the Company shall have notified the Depositary in writing.
Any and all notices to be given to the Depositary hereunder or under the Receipts shall be in writing and shall be deemed to have been duly given if personally delivered or sent by mail, or by telegram or facsimile transmission confirmed by letter, addressed to the Depositary at the Depositary's Office, at:
[if by mail]
First Chicago Trust Company of New York
P.O. Box 2565
Mail Suite 4660
Jersey City, New Jersey 07303-2565
[if by hand or courier]
First Chicago Trust Company of New York
14 Wall Street, 8th Floor
Suite 4680
New York, New York 10005
or at any other address of which the Depositary shall have notified the Company in writing.
Any and all notices to be given to any record holder of a Receipt hereunder or under the Receipts shall be in writing and shall be deemed to have been duly given if personally delivered or sent by mail, or by telegram or facsimile transmission confirmed by letter, addressed to such record holder at the address of such record holder as it appears on the books of the Depositary, or if such holder shall have filed with the Depositary a written request that notices intended for such holder be mailed to some other address, at the address designated in such request.
Delivery of a notice sent by mail or by telegram or facsimile transmission shall be deemed to be effected at the time when a duly addressed letter containing the same (or a confirmation thereof in the case of a telegram or facsimile transmission) is deposited, postage prepaid, in a post office letter box. The Depositary or the Company may act upon any telegram or facsimile transmission received by it from the other or from any holder of a Receipt, notwithstanding that such telegram or facsimile transmission shall not subsequently be confirmed by letter or as aforesaid.
SECTION 7.5 Appointment of Registrar. The Company hereby also appoints the Depositary as Registrar in respect of the Receipts and the Depositary hereby accepts such appointment.
SECTION 7.6. Depositary's Agents. The Depositary may from time to time appoint Depositary's Agents to act in any respect for the Depositary for the purposes of this Deposit Agreement and may at any time appoint additional Depositary's Agents and vary or terminate the appointment of such Depositary's Agents. The Depositary shall notify the Company prior to any such action. It is understood and agreed that the Company is hereby appointed as a Depositary Agent and may perform any and all of the obligations of the Depositary under this Agreement, except that it may not hold Stock that is to be delivered to the Depositary.
SECTION 7.7 Holders of Receipts Are Parties. The holders of Receipts from time to time shall be parties to this Deposit Agreement and shall be bound by all of the terms and conditions hereof and of the Receipts by acceptance of delivery thereof.
SECTION 7.8 GOVERNING LAW. THIS DEPOSIT AGREEMENT AND THE RECEIPTS AND ALL RIGHTS HEREUNDER AND THEREUNDER AND PROVISIONS HEREOF AND THEREOF SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 7.9 Inspection of Deposit Agreement. Copies of this Deposit Agreement shall be filed with the Depositary and the Depositary's Agent and shall be open to inspection during business hours at the Depositary's Office or respective offices of the Depositary's Agent, if any, by any holder of a Receipt.
SECTION 7.10 Headings. The headings of articles and sections in this Deposit Agreement and in the form of the Receipt set forth in Exhibit A hereto have been inserted for convenience only and are not to be regarded as a part of this Deposit Agreement or the Receipts or to have any bearing upon the meaning or interpretation of any provision contained herein or in the Receipts.
IN WITNESS WHEREOF, the Company and the Depositary have duly executed this Agreement as of the day and year first above set forth, and all holders of Receipts shall become parties hereto by and upon acceptance by them of delivery of Receipts issued in accordance with the terms hereof.
Attested by
UAL CORPORATION
/s/ Francesca M. Maher
By /s/ James M. Guyette
Name: Francesca M. Maher
Name: James M. Guyette
Title Vice President - Law
Title: Executive Vice President
and Corporate Secretary
Attested by
FIRST CHICAGO TRUST
COMPANY OF NEW YORK
/s/ John Ruocco
By /s/ Craig Bloomfield
Name: John Ruocco
Name: Craig Bloomfield
Title: Administrator
Title: Account Officer
DEPOSITARY SHARES TRANSFERABLE DEPOSITARY RECEIPT. This Certificate is transferable in New York, New York.
SEE REVERSE FOR CERTAIN DEFINITIONS
THE DEPOSITARY SHARES REPRESENTED BY THIS RECEIPT ARE NOT SAVINGS ACCOUNTS, DEPOSITS OR OTHER OBLIGATIONS OF FIRST CHICAGO TRUST COMPANY OF NEW YORK, THE DEPOSITARY HEREUNDER, OR OF ANY BANK OR NON-BANK DEPOSITORY OF UAL CORPORATION AND ARE NOT INSURED BY THE SAVINGS ASSOCIATION INSURANCE FUND OR THE BANK INSURANCE FUND OF THE FEDERAL DEPOSIT INSURANCE CORPORATION, OR ANY OTHER GOVERNMENT AGENCY
UAL CORPORATION
A CORPORATION INCORPORATED UNDER THE LAWS
OF THE STATE OF DELAWARE
First Chicago Trust Company of New York, as Depositary (the "Depositary"), hereby certifies that
is the registered owner of ____________ DEPOSITARY SHARES ("Depositary Shares"), each Depositary Share representing a one one-thousandth (1/1,000) interest in one share of 121/4% Series B Preferred Stock, without par value, $25,000 liquidation value per share (the "Stock"), of UAL Corporation, a Delaware corporation (the "Corporation"), on deposit with the Depositary, subject to the terms and entitled to the benefits of the Deposit Agreement dated as of July 12, 1994 (the "Deposit Agreement"), between the Corporation and the Depositary. By accepting this Depositary Receipt, the holder hereof becomes a party to and agrees to be bound by all the terms and conditions of the Deposit Agreement. This Depositary Receipt shall not be valid or obligatory for any purpose or be entitled to any benefits under the Deposit Agreement unless it shall have been executed by the Depositary by the manual signature of a duly authorized officer or, if executed in facsimile by the Depositary, countersigned by a Registrar in respect of the Depositary Receipts by a duly authorized officer thereof.
Dated: ____________
Countersigned
FIRST CHICAGO TRUST COMPANY OF NEW YORK
Depositary and Registrar By:_____________________
Authorized Officer
UAL CORPORATION
UAL CORPORATION SHALL FURNISH WITHOUT CHARGE TO EACH RECEIPT HOLDER WHO SO REQUESTS A COPY OF THE DEPOSIT AGREEMENT AND A STATEMENT OR SUMMARY OF THE AMENDED AND RESTATED CERTIFICATE OF INCORPORATION THAT ESTABLISHES THE POWERS, DESIGNATIONS, PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL OR OTHER SPECIFIED RIGHTS OF THE 121/4% SERIES B PREFERRED STOCK AND EACH OTHER CLASS OF PREFERRED STOCK OR SERIES THEREOF THAT THE CORPORATION IS AUTHORIZED TO ISSUE AND OF THE QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS OF SUCH PREFERENCE AND/OR RIGHTS. ANY SUCH REQUEST SHOULD BE ADDRESSED TO UAL CORPORATION, 1200 ALGONQUIN ROAD, ELK GROVE TOWNSHIP, ILLINOIS 60007, ATTENTION: CORPORATE SECRETARY.
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this Depositary Receipt, shall be construed as though they were written out in full according to applicable laws or regulations:
TEN
COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship and not as tenants
in common
UNIF
GIFT MIN ACT - ______ Custodian _______
(Cust)
(Minor)
under Uniform Gifts to Minors Act______________
(State)
UNIF
TRAN MIN ACT - _______ Custodian (until age __)
(Cust)
_______ under Uniform Transfers
(Minor)
to Minors Act___________________
(State)
Additional abbreviations may also be used though not in the above list. For value received, ________________________ hereby sell(s), assign(s) and transfer(s) unto
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF ASSIGNEE
______________________________Depositary Shares represented by the within Depositary Receipt, and do(es) hereby irrevocably constitute and appoint ______________________________ Attorney to transfer the said Depositary Shares on the books of the within named Depositary with full power of substitution in the premises.
Dated: Signature: ______________________________
NOTICE: The signature to this assignment must correspond with the name
as written upon
the face of this Depositary Receipt in every particular, without alteration
or enlargement or any
change whatever.
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<TYPE> EX-10.1
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AMENDED AND RESTATED
AGREEMENT AND PLAN OF RECAPITALIZATION
dated as of
March 25, 1994
among
INTERNATIONAL
AND AEROSPACE WORKERS
TABLE OF CONTENTS
| ARTICLE I | THE RECAPITALIZATION |
|
| Section 1.1 | The Recapitalization |
1
|
| Section 1.2 | Reclassification of Old Shares |
1
|
| Section 1.3 | Redemption |
2
|
| Section 1.4 | Pricing of Specified Securities |
2
|
| Section 1.5 | Surrender and Exchange |
4
|
| Section 1.6 | Other Issuances |
7
|
| Section 1.7 | Stock Options |
12
|
| Section 1.8 | Convertible Company Securities |
13
|
| Section 1.9 | Form of Recapitalization Consideration |
13
|
| Section 1.10 | Addition ESOP Shares |
14
|
| Section 1.11 | Underwriting Alternative |
15
|
| ARTICLE II | THE COMPANY AND UNITED |
|
| Section 2.1 | Certificate of Incorporation |
|
| Section 2.2 | Bylaws |
|
| Section 2.3 | Directors and Officers |
|
| Section 2.4 | United |
|
| ARTICLE III | REPRESENTATIONS AND WARRANTIES OF THE COMPANY |
|
| Section 3.1 | Corporate Existence and Power |
|
| Section 3.2 | Corporate Authorization |
|
| Section 3.3 | Governmental Authorization |
|
| Section 3.4 | Non-Contravention |
|
| Section 3.5 | Capitalization |
|
| Section 3.6 | Subsidiaries |
|
| Section 3.7 | Securities and Exchange Commission ("SEC") Filings |
|
| Section 3.8 | Financial Statements |
|
| Section 3.9 | Disclosure Documents |
|
| Section 3.10 | Absence of Certain Changes |
|
| Section 3.11 | Finders' Fees |
|
| Section 3.12 | Board Action |
|
| Section 3.13 | Securities |
|
| Section 3.14 | Opinion of Financial Advisers |
|
| Section 3.15 | Vote Required |
|
| Section 3.16 | Limitations |
|
| Section 3.17 | Compliance with Status Quo |
|
| Section 3.18 | Rights Agreement |
|
| ARTICLE IV | REPRESENTATIONS AND WARRANTIES OF THE UNIONS |
|
| Section 4.1 | Existence and Power |
|
| Section 4.2 | Authorization |
|
| Section 4.3 | Governmental Authorization |
|
| Section 4.4 | Non-Contravention |
|
| Section 4.5 | Disclosure Documents |
|
| Section 4.6 | Finders' Fees |
|
| Section 4.7 | Limitations |
|
| ARTICLE V | COVENANTS OF THE COMPANY |
|
| Section 5.1 | Conduct of the Company |
|
| Section 5.2 | Stockholder Meeting; proxy Material |
|
| Section 5.3 | Access |
|
| Section 5.4 | Other Potential Transactions |
|
| Section 5.5 | Notices of Certain Events |
|
| Section 5.6 | Amendment of Rights Agreement |
|
| Section 5.7 | Employee Benefit Plans |
|
| Section 5.8 | Labor Agreements |
|
| Section 5.9 | Solvency Letter |
|
| Section 5.10 | Other Transaction Documents |
|
| Section 5.11 | Certain Agreements |
|
| ARTICLE VI | COVENANTS OF EACH UNION |
|
| Section 6.1 | Confidentiality |
|
| Section 6.2 | Labor Agreements |
|
| Section 6.3 | No Public Director Nominations |
|
| Section 6.4 | Independent Director Vacancies |
|
| ARTICLE VII | COVENANTS OF EACH OF THE UNIONS AND THE COMPANY |
|
| Section 7.1 | Best Efforts |
|
| Section 7.2 | Certain Filings |
|
| Section 7.3 | Participation |
|
| ARTICLE VIII | CONDITIONS TO THE RECAPITALIZATION |
|
| Section 8.1 | Conditions to the Obligations of Each Party |
|
| Section 8.2 | Conditions to the Obligations of Each of the Unions |
|
| Section 8.3 | Conditions to the Obligations of the Company |
|
| ARTICLE IX | TERMINATION |
|
| Section 9.1 | Termination |
|
| Section 9.2 | Termination of Status Quo |
|
| Section 9.3 | Effect of Termination |
|
| ARTICLE X | MISCELLANEOUS |
|
| Section 10.1 | Notices |
|
| Section 10.2 | Survival |
|
| Section 10.3 | Amendments; No Waivers |
|
| Section 10.4 | Fees and Expenses; Indemnification |
|
| Section 10.5 | Successors and Assigns |
|
| Section 10.6 | Governing Law |
|
| Section 10.7 | Counterparts; Effectiveness |
|
| Section 10.8 | Parties in Interest |
|
| Section 10.9 | Specific Performance |
|
| Section 10.10 | Entire Agreement |
|
SCHEDULES
| Schedule 1.1 | Restated Certificate of Incorporation of the Company |
| Schedule 1.3(a) | Deposit Agreement |
| Schedule 1.3(b) | Officers' Certificate Regarding Indenture for the Debentures |
| Schedule 1.6(a)(i) | Trust Agreement for the ESOP Trust |
| Schedule 1.6(a)(ii) | ESOP |
| Schedule 1.6(a)(iii) | Supplemental ESOP |
| Schedule 1.6 (a)(iv) | Trust Agreement for the Supplemental ESOP Trust |
| Schedule 1.6(d) | ESOP Stock Purchase Agreement and Amendment |
| Schedule 1.6(m) | Class I Preferred Stock Subscription Agreement |
| Schedule 1.6(n) | Class Pilot MEC Preferred Stock Subscription Agreement |
| Schedule 1.6(o) | Class IAM Preferred Stock Subscription Agreement |
| Schedule 1.6(p)(i) | Class SAM Preferred Stock Subscription Agreement |
| Schedule 1.6(p)(ii) | SAM Director Selection Process |
| Schedule 1.10 | Adjusted Percentage Table |
| Schedule 2.2 | Restated Bylaws of the Company |
| Schedule 2.3(i) | Directors of the Company Resigning at Effective Time |
| Schedule 2.3(ii) | New Directors of the Company |
| Schedule 2.4 | Provision to be Inserted in United Air Lines, Inc. Certificate |
| Schedule 3.2(i) | UAL 1981 Incentive Stock Program Amendment |
| Schedule 3.2(ii) | UAL 1988 Restricted Stock Plan Amendment |
| Schedule 3.2(iii) | UAL Incentive Compensation Plan Amendment |
| Schedule 3.4 | Contraventions and Conflicts |
| Schedule 3.6(c) | CRS Company Disclosure |
| Schedule 3.17 | Status Quo Matters |
| Schedule 3.18 | Rights Amendment |
| Schedule 5.1(i) | Conduct of the Company |
| Schedule 5.1(ii) | IAM Job Security Provisions |
| Schedule 5.1(iii) | Existing Employee Stock Purchase Policies of the Company |
| Schedule 5.8(i) | ALPA Collective Bargaining Agreement |
| Schedule 5.8(ii) | IAM Collective Bargaining Agreement |
| Schedule 5.8(iii) | Employment Terms for Employees Performing the Functions of the Company's Salaried and Management Employees |
| Schedule 5.9 | Solvency Letter |
| Schedule 5.10(i) | Class I Preferred Stock Shareholders Agreement |
| Schedule 5.10(ii) | Class SAM Director Shareholders Agreement |
| Schedule 5.10(iii) | First Refusal Agreement |
| Schedule 6.1 | Confidentiality Statement |
AMENDED AND RESTATED
AGREEMENT AND PLAN OF RECAPITALIZATION
AGREEMENT AND PLAN OF RECAPITALIZATION, dated as of March 25, 1994,
as amended and restated (the "Agreement"), among UAL Corporation, a Delaware
corporation (the "Company"), Air Line Pilots Association, International
("ALPA"), pursuant to its authority as the collective bargaining representative
for the crafts or class of pilots employed by United Air Lines, Inc., a
Delaware corporation and a wholly owned subsidiary of the Company ("United"),
and International Association of Machinists and Aerospace Workers ("IAM"
and, together with ALPA, the "Unions"), pursuant to its authority as the
collective bargaining representative for the crafts or classes of mechanics
and related employees, ramp and stores employees, food service employees,
dispatchers and security officers employed by United.
In consideration of the mutual covenants and agreements contained herein,
the parties hereto agree as follows:
(ii) one one-thousandth of a share of Series D Redeemable Preferred
Stock of the Company, without par value (the "Redeemable Preferred Stock"),
having the rights, powers and privileges described in the Restated Certificate.
(b) Each Old Share held by the Company as treasury stock or owned by
any wholly-owned subsidiary of the Company immediately prior to the Effective
Time (the "Treasury Shares"), up to a maximum of 1,000,000 Treasury Shares
(the "Retained Treasury Shares"), shall be reclassified and converted in
accordance with Section 1.2(a), with all Treasury Shares in excess of 1,000,000
being surrendered for cancellation immediately prior to the Effective Time
and no payment shall be made with respect thereto. Immediately following
the Effective Time, the Company and each of its wholly owned Subsidiaries
(as defined in Section 3.6) shall surrender for cancellation the Redeemable
Preferred Stock received upon Reclassification of the Retained Treasury
Shares and no payment shall be made in respect thereof.
SECTION 1.3 Redemption. Following the
Effective Time, all outstanding shares of Redeemable Preferred Stock shall,
to the extent of funds legally available therefor and subject to the provisions
of the Restated Certificate, be redeemed immediately after issuance according
to the terms thereof (the "Redemption"). Pursuant to the Redemption, the
holders of Redeemable Preferred Stock, if any, shall be entitled to receive,
in respect of each one one-thousandth of a share of Redeemable Preferred
Stock, subject to the terms thereof and Section 1.5(f):
(iii) either (a) $15.55 principal amount of Series A Senior Unsecured
Debentures due 2004 of United issued as provided below (the "Series A Debentures")
or (b) if the Underwriting Alternative with respect to the Series A Debentures
is consummated, a cash payment equal to the Series A Debenture Proceeds
Amount (as defined); and
(iv) either (a) $15.55 principal amount of Series B Senior Unsecured
Debentures due 2014 of United issued as provided below (the "Series B Debentures"
and, together with the Series A Debentures, collectively, the "Debentures")
or (b) if the Underwriting Alternative with respect to the Series B Debentures
is consummated, a cash payment equal to the Series B Debenture Proceeds
Amount (as defined).
(b) On the Trading Day immediately preceding the Announcement Date,
CS First Boston Corporation ("First Boston") (in consultation with Lazard
Freres & Co. ("hazard")) on behalf of the Company and Keilin &
Bloom (or such other investment banking firm as may be reasonably selected
by the Unions) on behalf of the Unions (the "Primary Banking Firms") shall
seek to mutually determine the interest or dividend rates, as applicable
(the "Applicable Rate"), that each of the Specified Securities should bear
in order for such Specified Security (in the case of the Debentures) or
the Depositary Shares (in the case of the Public Preferred Stock) to trade
at par as of the close of business, New York time, on the Trading Day immediately
preceding the Announcement Date, assuming both that an Underwriting Alternative
with respect thereto had and had not been elected and further assuming
in each such case that such Specified Security or Depositary Shares, as
the case may be, were fully distributed on such Trading Day. If the Primary
Banking Firms agree on the Applicable Rate with respect to a Specified
Security, such Specified Security shall bear such rate and such rate shall
be the Applicable Rate with respect to such Specified Security. If the
Primary Banking Firms are unable to agree on the Applicable Rate with respect
to a Specified Security, then (i) Salomon Brothers Inc, or such other firm
as agreed in writing by the Primary Banking Firms (the "Deadlock Firm"),
shall render its opinion, on the Trading Day immediately preceding the
Announcement Date, as to the Applicable Rate with respect to such Specified
Security or Securities, and (ii) the Applicable Rate with respect to such
Specified Security or Securities shall be the average of the two closest
rates specified in the opinions of the Primary Banking Firms and the Deadlock
Firm, rounded to the nearest one one-hundredth of a percent in the case
of the interest rate for the Debentures and to the nearest one one-hundredth
of a percent in the case of the dividend rate for the Public Preferred
Stock; provided however, that, in no event shall the Applicable Rate with
respect to the Specified Securities exceed (x) in the case of the Series
A Debentures, 10.125%; (y) in the case of the Series B Debentures, 10.825%;
and (z) in the case of the Public Preferred Stock, 11.375% (the "Maximum
Pricing").
(c) On the Announcement Date, the Company shall issue a press release
setting forth the Applicable Rate for each of the Specified Securities,
which press release shall be distributed to major wire services and news
agencies, and shall confirm that the Company Stockholder Meeting (as defined
in Section 5.2) will be held as scheduled, and shall contain such other
information as may be mutually agreed upon by the Company and the Unions.
(d) "Announcement Date" shall mean a Trading Day which shall be not
fewer than five calendar days nor greater than ten calendar days preceding
the date of the Company Stockholder Meeting, such date to be disclosed
to the Unions not fewer than ten calendar days prior thereto. "Trading
Day" shall mean a day on which the New York Stock Exchange. Inc. ("NYSE")
is open for the transaction of business.
(e) The parties agree that the Initial Pricing of the Debentures (and
the Maximum Pricing for the Debentures) was based on, and the Applicable
Rates will be based on, the assumption that the Debentures will not be
callable prior to their respective stated maturities. The parties further
agree that the Unions may request, not less than seven days prior to the
Announcement Date, that, in the event that the Underwriting Alternative
is not consummated with respect to either or both series of Debentures,
either or both of the series of Debentures shall be callable prior to stated
maturity. If so requested, immediately following the establishment of the
Applicable Rates and prior to the Announcement Date, an additional procedure
(based on the procedure set forth in Section 1.4(b)) shall be implemented
whereby the Primary Banking Firms shall establish the incremental increase
in pricing resulting from the addition of the call feature on either or
both of the series of Debentures, as the case may be, above the Applicable
Rate, with any disagreement to be resolved in accordance with the procedures
set forth in Section 1.4(b) involving the Deadlock Firm; provided however,
that the Unions may withdraw the request for a call feature at any time
up to the issuance of the press release in accordance with subsection 1.4(c).
(f) Notwithstanding any provision of this Agreement or the Schedules
or Exhibits hereto to the contrary, if the Underwriting Alternative with
respect to the Depositary Shares or either series of Debentures is consummated,
(i) with respect to the securities that are subject to the Underwriting
Alternative, the Company and United, in consultation with the underwriters,
may set the record dates and payment dates (quarterly and semiannually,
respectively) for the Public Preferred Stock (to which the Depositary Shares
relate) and the Debentures, may select a regular interest payment date
in the year 2004 as the maturity date for the Series A Debentures and may
set a regular interest payment date in the year 2014 as the maturity date
for the Series B Debentures and (ii) the following provisions of this subsection
1.4(f), with respect to the securities that are subject to the Underwriting
Alternative, shall be null and void. If the Company causes a regular quarterly
dividend to be paid on both the Public Preferred Stock and the Prior Preferred
Stock (as defined below) in respect of any regular quarterly dividend payment
date, then the Company shall cause the quarterly record date (and corresponding
dividend payment date) for the payment of such dividend on the Public Preferred
Stock to be the same as the quarterly record date (and corresponding dividend
payment date) for the payment of such dividend on the Series A 6.25% Convertible
Preferred Stock of the Company (the "Prior Preferred Stock"). With respect
to a regular quarterly dividend payment date for the Public Preferred Stock
and the Prior Preferred Stock that coincides with a regular semi-annual
interest payment date for the Debentures, if the Company causes (i) a regular
quarterly dividend to be paid on the Public Preferred Stock or the Prior
Preferred Stock, or both, in respect of any such quarterly dividend payment
date and (ii) a regular semi-annual installment of interest to be paid
on the Debentures in respect of such regular semi-annual interest payment
date, then the Company shall cause the semi-annual record date (and corresponding
interest payment date) for such payment of interest on the Debentures to
be the same as the quarterly record date (and corresponding dividend payment
date) for the payment of such dividend on the Public Preferred Stock or
the Prior Preferred Stock or both, as the case may be.
(b) Each holder of Old Shares that have been converted into New Shares
and Redeemable Preferred Stock, upon surrender to the Exchange Agent of
an Old Certificate or Certificates, together with a properly completed
letter of transmittal covering such Old Shares, will be entitled to receive
in respect of such Old Shares, subject to Section 1.5(f):
(ii) either (a) a depositary receipt or receipts representing Depositary
Shares representing interests in $31.10 liquidation preference of Public
Preferred Stock for each Old Share formerly represented by such Old Certificate
or Certificates in respect of the Redemption or (b) if the Underwriting
Alternative with respect to the Depositary Shares is consummated, a cash
payment equal to the Depositary Share Proceeds Amount in respect of the
Redemption;
(iii) either (a) $15.55 principal amount of Series A Debentures for
each Old Share formerly represented by such Old Certificate or Certificates
in respect of the Redemption or (b) if the Underwriting Alternative with
respect to the Series A Debentures is consummated, a cash payment equal
to the Series A Debenture Proceeds Amount in respect of the Redemption;
(iv) either (a) $15.55 principal amount of Series B Debentures for each
Old Share formerly represented by such Old Certificate or Certificates
in respect of the Redemption or (b) if the Underwriting Alternative with
respect to the Series B Debentures is consummated, a cash payment equal
to the Series B Debenture Proceeds Amount in respect of the Redemption;
and
(v) a cash payment of $25.80 for each Old Share formerly represented
by such Old Certificate or Certificates in respect of the Redemption (the
cash and/or securities distributed pursuant to clauses (i) through (v),
collectively, the "Recapitalization Consideration").
(c) If any portion of the Recapitalization Consideration is to be paid
to a person other than the registered holder of the Old Shares formerly
represented by the Old Certificate or Certificates so surrendered in exchange
therefor, it shall be a condition to such payment that the Old Certificate
or Certificates so surrendered shall be properly endorsed or otherwise
be iii proper form for transfer and that the person requesting such payment
shall pay to the Exchange Agent any transfer or other taxes required as
a result of such payment to a person other than the registered holder of
such Old Shares or establish to the satisfaction of the Exchange Agent
that such tax has been paid or is not payable.
(d) In the event any Old Certificate or Certificates shall have been
lost, stolen or destroyed, upon the making of an affidavit to that fact
by the person claiming such certificate to be lost, stolen or destroyed,
the Company will issue in exchange for such lost, stolen or destroyed Old
Certificate or Certificates the Recapitalization Consideration deliverable
in respect thereof in accordance with this Article I. When authorizing
such issue of the Recapitalization Consideration in exchange therefor,
the Company may, in its discretion and as a condition precedent to the
issuance there, require the person claiming ownership of such lost, stolen
or destroyed Old Certificate or Certificates to give the Company a bond
in such sum as it may direct, or otherwise indemnify the Company in a manner
satisfactory to it, against any claim that may be made against the Company
with respect to the Old Certificate or Certificates alleged to have been
lost, stolen or destroyed.
(e) After the Effective Time, there shall be no further registration
of transfers of Old Shares. If, after the Effective Time, Old Certificate
or Certificates are presented to the Company or its transfer agent, such
Old Certificate or Certificates shall be canceled and exchanged for the
Recapitalization Consideration provided for, and in accordance with the
procedures set forth, in this Article I. All Recapitalization Consideration
to be distributed pursuant to this Section 1.5, if unclaimed on the first
anniversary of the Effective Time, shall be released and paid by the Exchange
Agent to the Company, after which time persons entitled thereto may look,
subject to applicable escheat and other similar laws, only to the Company
for payment thereof.
(f) Notwithstanding anything to the contrary contained in this Agreement:
(ii) As promptly as practicable following the Effective Time, the Exchange
Agent shall determine the excess of (x) the number of whole New Shares
into which all of the Old Shares will be reclassified and converted pursuant
to Section 1.2 over (y) the aggregate number of whole New Shares to be
distributed to holders of Old Shares pursuant to Section 1.5 (such excess
being referred to herein as the "Excess New Shares"); and if the Underwriting
Alternative has not been elected with respect to the Depositary Shares,
the Series A Debentures and/or the Series B Debentures, as the case may
be, or, if elected has not been consummated for any reason at or prior
to the Effective Time, the Exchange Agent shall also determine, as appropriate,
(I) the excess of (a) the number of whole Depositary Shares representing
interests in shares of Public Preferred Stock issuable upon Redemption
in accordance with Article FOURTH, Part I.D, Section 6 of the Restated
Certificate with respect to the Redeemable Preferred Stock into which the
Old Shares will be reclassified and converted pursuant to Section 1.2(a)
over (b) the aggregate number of whole Depositary Shares representing interests
in shares of Public Preferred Stock to be distributed to holders of Old
Shares pursuant to Section 1.5 (such excess being referred to herein as
the "Excess Depositary Shares"); (II) the excess of (a) the number of whole
Series A Debentures issuable upon Redemption in accordance with Article
FOURTH, Part I.D, Section 6 of the Restated Certificate with respect to
the Redeemable Preferred Stock into which the Old Shares will be reclassified
and converted pursuant to Section 1.2(a) over (b) the aggregate number
of whole Series A Debentures to be distributed to holders of Old Shares
pursuant to Section 1.5 (such excess being referred to herein as the "Excess
Series A Debentures"); and/or (III) the excess of (a) the number of whole
Series B Debentures issuable upon Redemption in accordance with Article
FOURTH, Part I.D, Section 6 of the Restated Certificate with respect to
the Redeemable Preferred Stock into which the Old Shares will be reclassified
and converted pursuant to Section 1.2(a) over (b) the aggregate number
of whole Series B Debentures to be distributed to holders of Old Shares
pursuant to Section 1.5 (such excess being referred to herein as the "Excess
Series B Debentures" and, together with the Excess New Shares, the Excess
Depositary Shares and/or the Excess Series A Debentures, as applicable,
collectively, the "Excess Securities"). As soon after the Effective Time
as practicable taking into account market conditions based on consultations
with the Company, the Exchange Agent, as agent for the holders of Old Shares,
shall sell the Excess Securities at then prevailing prices on the principal
national securities exchange, automated quotation system or other trading
market (the "Applicable Exchange") on which the relevant Excess Securities
are listed or admitted for trading (which shall be the NYSE in the case
of the New Shares), all in the manner provided in paragraph (iii) of this
Section.
(iii) The sale of the Excess Securities by the Exchange Agent shall
be executed on an Applicable Exchange through one or more member firms
of such Applicable Exchange and shall be executed in round lots to the
extent practicable. Until the net proceeds of such sale or sales have been
distributed to the holders of Old Shares, the Exchange Agent will hold
such proceeds in trust for the holders of Old Shares (the "Excess Securities
Trust"). Until distributed as provided below, the Excess Securities Trust
shall be invested, as directed by the Company, in Permitted Securities
and any net earnings with respect thereto shall be paid to the Company.
The Company shall pay all commissions, transfer taxes and other out-of-pocket
transaction costs, including the expenses and compensation of the Exchange
Agent, incurred in connection with such sale of the Excess Securities.
The Exchange Agent shall determine the portion of the Excess Securities
Trust to which each holder of Old Shares shall be entitled, if any, by
(w) multiplying the amount of the aggregate net proceeds comprising the
Excess Securities Trust attributable to the sale of Excess New Shares by
a fraction, the numerator of which is the amount of the fractional New
Share interest to which such holder of Old Shares would be entitled but
for the application of Section 1.5(f)(i) and the denominator of which is
the aggregate amount of fractional New Share interests to which all holders
of Old Shares would be entitled but for the application of Section 1.5(f)(i);
and if the Underwriting Alternative has not been elected with respect to
the Depositary Shares, the Series A Debentures and/or the Series B Debentures,
as the case may be, or, if elected has not been consummated for any reason
at or prior to the Effective Time, as appropriate, by (x) multiplying the
amount of the aggregate net proceeds comprising the Excess Securities Trust
attributable to the sale of Excess Depositary Shares by a fraction, the
numerator of which is the amount of the fractional Depositary Share interest
to which such holder of Old Shares would be entitled but for the application
of Section 1.5(t)(i) and the denominator of which is the aggregate amount
of fractional Depositary Share interests to which all holders of Old Shares
would be entitled but for the application of Section 1.5(f)(i); (y) multiplying
the amount of the aggregate net proceeds comprising the Excess Securities
Trust attributable to the sale of Excess Series A Debentures by a fraction,
the numerator of which is the amount of the fractional Series A Debenture
interest to which such holder of Old Shares would be entitled but for the
application of Section 1.5(f)(i) and the denominator of which is the aggregate
amount of fractional Series A Debenture interests to which all holders
of Old Shares would be entitled but for the application of Section 1.5(f)(i);
and (z) multiplying the amount of the aggregate net proceeds comprising
the Excess Securities Trust attributable to the sale of Excess Series B
Debentures by a fraction, the numerator of which is the amount of the fractional
Series B Debenture interest to which such holder of Old Shares would be
entitled but for the application of Section 1.5(f)(i) and the denominator
of which is the aggregate amount of fractional Series B Debenture interests
to which all holders of Old Shares would be entitled but for the application
of Section 1.5(f)(i).
(iv) As soon as practicable after the determination of the total amount
of cash, if any, to be paid to holders of Old Shares in lieu of any fractional
New Share and, if applicable, Depositary Share interests, Series A Debenture
interests and/or Series B Debenture interests, the Exchange Agent shall
make available such amounts to such holders of Old Shares; provided, however,
that such amounts shall be paid to each holder of Old Shares only upon
surrender of such holder's Old Certificate or Certificates together with
a properly completed and duly executed letter of transmittal and any other
required documents. All cash in lieu of fractional interests to be paid
pursuant to this Section 1.5(f), if unclaimed on the first anniversary
of the Effective Time, shall be released and paid by the Exchange Agent
to the Company, after which time persons entitled thereto may look, subject
to applicable escheat and other similar laws, only to the Company for payment
thereof.
(a) During the 69 months following the Effective Time, the "Final Number"
(as defined in subsection (b)) of shares of convertible preferred stock
described below (the "ESOP Convertible Preferred Stock") shall be (i) issued
to State Street Bank and Trust Company, a Massachusetts business trust,
as trustee (the "ESQP Trustee") under a trust to be created pursuant to
the Employee Stock Ownership Trust Agreement between the Company and the
ESOP Trustee in form and substance as set forth on Schedule 1.6(a) (i)
(the "ESOP Trust") and to be established for the benefit of certain employees
of the Company and its Subsidiaries participating in the UAL Corporation
Employee Stock Ownership Plan in form and substance as set forth on Schedule
1.6(a) (ii) (the "ESOP") and, to the extent not so issued, (ii) credited
as book entry credits to the accounts of certain employees of the Company
and its Subsidiaries participating in the UAL Corporation Supplemental
ESOP in form and substance as set forth on Schedule 1.6(a) (iii) (the "Supplemental
ESOP" and together with the ESOP, collectively, the "ESOPs") and in certain
circumstances issued to the ESOP Trustee under a trust (the "Supplemental
ESOP Trust" and together with the ESOP Trust, collectively, the "ESOP Trusts")
to be created pursuant to the Supplemental ESOP Trust Agreement between
the Company and the ESOP Trustee in form and substance as set forth on
Schedule 1.6(a)(iv).
(b) The number of shares of ESOP Convertible Preferred Stock to be so
issued and credited as contemplated by subsection (a) shall initially be
17,675,345, which is equal to the product of (i) 0.5, (ii) 55/45ths, (iii)
the "Fully Diluted Old Shares" immediately prior to the Effective Time,
and (iv) 0.9999. The "Fully Diluted Old Shares" immediately prior to the
Effective Time shall equal 28,926,185. The total number of shares of ESOP
Convertible Preferred Stock to be so issued and credited is subject to
increase (in accordance with Section 1.10) up to an amount equal to the
sum of (i) 17,675,345 plus (ii) the Additional Shares (as defined in Section
1.10). Such total number of shares, including to the extent, if any, so
increased, is referred to as the "Final Number."
(c) The ESOP Convertible Preferred Stock shall consist of (i) Class
1 ESOP Convertible Preferred Stock, par value $0.01 per share, of the Company,
with a fixed dollar dividend in a dollar amount (the "Dollar Amount") that
is equal to 7.00%, or such lesser percentage that may be agreed to by the
Company and the ESOP Trustee prior to the Effective Time, of the per share
price at which the Class 1 ESOP Preferred Stock is issued to the ESOP Trustee
at the Effective Time (the "Initial Price"), and having the rights, powers
and privileges set forth in the Restated Certificate (the "ESOP Preferred"),
and (ii) Class 2 ESOP Convertible Preferred Stock, par value $0.01 per
share, of the Company having the rights, powers and privileges set forth
in the Restated Certificate (the "Supplemental ESOP Preferred").
(d) At the Effective Time, the Company shall issue to the ESOP Trustee
in accordance with a stock purchase agreement and amendment in form and
substance as.set forth on Schedule 1.6(d) (as so amended, the "ESOP Stock
Purchase Agreement"), a number of shares of ESOP Preferred (the "Initial
Shares") equal to the Year 1 Release Shares (as defined), divided by the
Year 1 Decimal (as defined).
(z) 0.7815 (the "Class 1 Decimal").
(ii) The term "Year 1 Decimal" shall mean one minus the product of
(yy) 5.25.
As of December 31, 1994, there shall be credited to the accounts of
Supplemental ESOP participants a number of shares of Supplemental ESOP
Preferred equal to the product of
(bb) the First Year Fraction, and
(cc) one minus the Class 1 Decimal.
(B) the Class 1 Decimal, over
(zz) the number of years and fractional years from the end of the plan
year for which such shares are being issued to March 31, 2000.
For each of the second through sixth plan years of the Supplemental
ESOP, there shall be credited to the accounts of Supplemental ESOP participants
shares of Supplemental ESOP Preferred equal to the product of (aa) tz/69ths
of the Final Number and (bb) the decimal equal to one minus the Class 1
Decimal.
(f) Commencing not later than December 1, 1999, the Company shall negotiate
in good faith with the ESOP Trustee to reach an agreement under which the
Company shall issue to the ESOP Trustee shares of ESOP Preferred at an
agreed.upon price (the "Purchase Price" for such year). If such agreement
is reached, then on the first business day in the year 2000, the Company
shall sell to the ESOP Trustee, and the ESOP Trustee shall purchase from
the Company, pursuant to an agreement substantially in the form of Exhibit
B to the ESOP Stock Purchase Agreement, a number of shares of ESOP Preferred
("Final Year Shares"), which number shall equal the excess of
(g) The Company may, with the consent of the Unions, which shall not
be unreasonably withheld, make all or any part of the sales of ESOP Preferred
to the ESOP Trustee described above at any earlier date or dates, provided
that the timing and amount of the release of such shares to the accounts
of employees in the ESOPs contemplated by subsections (d), (e) and (f)
above shall not be altered by the different date or dates of the sales.
If any sale of Subsequent Shares or Final Year Shares is not consummated
in accordance with subsection (e) or (f) above (if not earlier consummated
pursuant to this subsection (g)), a number of shares of Supplemental ESOP
Preferred as is equal to the number of shares of ESOP Preferred not so
sold shall be contributed to the ESOP (Part B) or credited to the accounts
of participants in the Supplemental ESOP, as applicable. Such contribution
or crediting shall be at such time or times such that the release (or crediting)
of shares to the accounts of employees contemplated by subsections (d),
(e) and (f) above shall not be altered. Notwithstanding anything to the
contrary herein (other than the provisions of this subsection (g) relating
to "catch-up" dividends), the aggregate number of shares of ESOP Convertible
Preferred Stock issued, credited, or contributed under this Section 1.6
and Section 1.10 shall not exceed, or be less than, the Final Shares. In
the event that fixed dividends on the ESOP Preferred attributable to a
particular acquisition loan are not paid when initially due because the
Company lacks sufficient earnings and profits, and such earnings and profits
later become available, it is possible that such dividends (the "skipped
dividends") may then be paid on a catch-up basis, to the ESOP Trustee at
a time when such catch-up dividends (when added to other fixed dividends
payable on shares attributable to such loan) exceed the principal and interest
then payable on the loan to which such dividends relate. In that event,
compliance with the rules applicable to the ESOP may require a portion
of such catch-up dividends to be used to purchase New Shares rather than
pay principal or interest on such acquisition loan. If such purchase causes
the New Shares and ESOP Preferred allocated to participants in that year
to exceed the number of shares that would have been allocable absent payment
of the catch-up dividend, then, notwithstanding the provisions of Section
1.6, the parties agree that they shall negotiate in good faith to determine
whether there is a manner in which the ESOP and the Supplemental ESOP can
be amended so that, in subsequent years, allocations to participants can
be reduced in a manner that results in participants achieving the same
economic position that would have resulted if no such skipped dividends
had occurred; and if the result described in the preceding clause of this
sentence can be achieved without material detriment to any participant
(in relation to the econonuc position such participant would have enjoyed
had the skipped dividend not occurred) and without interference with the
general objectives of the ESOP program, then the Company may, with the
consent of the Unions as to the satisfaction of the standards set forth
in this sentence, which shall not be unreasonably withheld, adopt appropriate
amendments to this Agreement, the ESOP and Supplemental ESOP to effectuate
the intent of this sentence. Achievement of the goal described in the preceding
sentence may require issuance of fewer shares of ESOP Convertible Preferred
Stock in future periods than would have otherwise been the case (because
of the ESOP's unexpected early acquisition of New Shares). All disputes
concerning whether the Unions reasonably withheld a consent in accordance
with the provisions of this subsection (g) shall be resolved in accordance
with the arbitration procedures described in Section 11.2(b)(ii)(G)-(J)
of the ESOP.
(h) In consideration of each issuance by the Company of the shares of
ESOP Preferred to the ESOP Trust, the ESOP Trustee, on behalf of the ESOP
Trust, shall (y) pay to the Company an amount of cash equal to the aggregate
par value of the shares of ESOP Preferred so issued and (z) execute and
deliver a promissory note, in the aggregate principal amount equal to the
aggregate ,.purchase price for the ESOP Preferred so issued less the amount
paid pursuant to clause (y), in substantially the form set forth on Exhibit
A to the ESOP Stock Purchase Agreement (each, an "ESOP Note").
(x) One (1) share of Class P ESOP Voting Junior Preferred Stock, par
value 50.01 per share, of the Company having the rights, powers and privileges
set forth in the Restated Certificate (the "Class P Voting Preferred");
(y) One (1) share of Class M ESOP Voting Junior Preferred Stock, par
value $0.01 per share, of the Company having the rights, powers and privileges
set forth in the Restated Certificate (the "Class M Voting Preferred");
and
(z) One (1) share of Class S ESOP Voting Junior Preferred Stock, par
value $0.01 per share, of the Company having the rights, powers and privileges
set forth in the Restated Certificate (the "Class S Voting Preferred" and,
together with the Class P Voting Preferred and the Class M Voting Preferred,
collectively, the "ESOP Voting Preferred Stocks").
(j) In addition, the Company shall also issue and contribute to the
Supplemental ESOP Trust (together with the ESOP Trust, the "ESOP Trusts"),
at the times provided for in the Supplemental ESOP, an aggregate (to give
effect to the 0.5 Common Stock exchange ratio) of: .
(ii) a number of shares of Class M Voting Preferred Stock equal to the
product of (aa) 55/45ths, (bb) .3713, (cc) one half of the Fully Diluted
Old Shares and (dd) .9999, minus one (1.0); and
(iii) a number of shares of Class S Voting Preferred Stock equal to
the product of (aa) 55/45ths, (bb) .1664, (cc) one half of the Fully Diluted
Old Shares and (dd) .9999, minus one (1.0).
(bb) a number of shares of Class M Voting Preferred Stock equal to the
product of .3713 and the number of Additional Shares; and
(cc) a number of shares of Class S Voting Preferred Stock equal to the
product of .1664 and the number of Additional Shares.
(1) The ESOP program is designed to deliver equity ownership and voting
power to the employee groups in pre-negotiated proportions and at a pre-negotiated
pace. If and to the extent that, despite the best and cooperative efforts
of the Unions and the Company, the tax qualified ESOP cannot be implemented
in all material respects or the non-qualified Supplemental ESOP cannot
be implemented in all material respects and without income tax (excluding
the employee portion of FICA, FUTA and Medicare taxes) to participants
prior to actual distributions being made, appropriate arrangements will
be made to effectuate in all material respects the delivery of equity ownership
and voting power in the agreed-upon proportions and at the agreed-upon
pace and to accomplish the purposes contemplated by the ESOP program described
in Schedules 1.6(a)(i)-(iv) and (d). As used herein, the phrase "appropriate
arrangements" shall not (i) require the expenditure of any material amount
of funds by the Company or the issuance of securities to the ESOP Trusts
representing a greater proportion of the equity value or voting power of
the Company than that contemplated by this Agreement or (ii) result in
the diminution of the equity value or voting power of the New Shares held
by the stockholders of the Company other than the ESOP Trusts.
(m) In accordance with subscription agreements in form and substance
as set forth on Schedule 1.6(m) (the "Class I Preferred Stock Subscription
Agreement"), the Company shall issue one (1) share of Class I Junior Preferred
Stock, par value $0.01 per share, of the Company having the rights, powers
and privileges set forth in the Restated Certificate (the "Class I Preferred")
to each of the persons identified on Schedule 2.3(ii) as the initial "Independent
Directors," provided that each initial Independent Director shall have
paid to the Company an amount of cash equal to the par value of the share
of Class I Preferred to be so issued.
(n) In accordance with a subscription agreement in form and substance
as set forth on Schedule 1.6(n) (the "Class Pilot MEC Preferred Stock Subscription
Agreement"), the Company shall issue one (1) share of Class Pilot MEC Junior
Preferred Stock, par value $0.01 per share, of the Company having the rights,
powers and privileges set forth in the Restated Certificate (the "Class
Pilot MEC Preferred") to the United Air Lines Master Executive Council
of ALPA (the "MEC"), provided that the MEC shall have paid to the Company
an amount of cash equal to the aggregate par value of the share of Class
Pilot MEC Preferred to be so issued.
(o) In accordance with a subscription agreement in form and substance
as set forth on Schedule 1.6(o) (the "Class IAM Preferred Stock Subscription
Agreement"), the Company shall issue one (1) share of Class IAM Junior
Preferred Stock, par value $0.01 per share, of the Company having the rights,
powers and privileges set forth in the Restated Certificate (the "Class
IAM Preferred") to the IAM or its designee, provided that the IAM or such
designee shall have paid to the Company an amount of cash equal to the
aggregate par value of the share of Class IAM Preferred to be so issued.
(p) In accordance with a subscription agreement inform and substance
asset forth on Schedule 1.6(p)(i) (the "Class SAM Preferred Stock Subscription
Agreement"), the Company shall issue three (3) shares of Class SAM Junior
Preferred Stock, par value $0.01 per share, of the Company having the rights,
powers and privileges set forth in the Restated Certificate (the "Class
SAM Preferred") as follows: (i) two (2) shares to the person identified
as the Salaried and Management Director on Schedule 2.3(ii) or a replacement
director identified in accordance with the nomination procedures in Schedule
1.6(p)(ii) (the "SAM Director), and (ii) one (1) share to an additional
Class SAM stockholder, defined in Schedule 1.6(p)(i) as the Designated
Stockholder, provided that such persons shall have paid to the Company
an amount of cash equal to the aggregate par value of the shares of Class
SAM Preferred to be so issued.
(q) If, due to limitations of Section 415 of the Internal Revenue Code
or due to the issuance of Additional Shares, the respective Employee Groups
(as defined in the ESOP) are prevented from reasonably achieving the contemplated
allocations among and within their respective Employee Groups, the parties
agree to cooperate to modify the Class 1 Decimal with respect to sales
contemplated by Section 1.6(e) and Section 1.6(t) and to make appropriate
conforming modifications to the ESOP, Supplemental ESOP and all related
instruments if so requested by the Company, ALPA or the IAM. Such modifications
shall maximize the Class 1 Decimal consistent with achieving with a high
degree of certainty that the limits of the Internal Revenue Code Section
415(c)(6) shall not be exceeded (which condition regarding Section 415(c)(6)
may be waived by ALPA).
SECTION 1.7 Stock Options. Each
employee stock option to purchase Old Shares granted under any employee
stock option or compensation plan or arrangement of the Company outstanding
immediately prior to the Effective Time (an "Option") shall remain outstanding
upon and following consummation of the Recapitalization, and each such
Option, whether or not then vested or exercisable immediately prior to
the Effective Time, shall (i) if provided by the terms thereof (or if accelerated
in accordance with the relevant plan) become fully vested and exercisable
at the Effective Time and (ii) after the Effective Time represent the right
to receive, until the expiration thereof and in accordance with its terms,
in exchange for the aggregate exercise price for such Option, without interest,
the Recapitalization Consideration with respect to each Old Share that
such holder would have been entitled to receive had such holder exercised
such Option in full immediately prior to the Effective Time. The Recapitalization
Consideration issuable upon exercise of an Option shall be issued in the
same proportion as holders of Old Shares would be entitled to receive their
Recapitalization Consideration, but for fractional interests, among cash
and New Shares and, if applicable, principal amount of Series A and Series
B Debentures and Depositary Shares representing interests in the $25 liquidation
preference of Public Preferred Stock, except that (i) if the Underwriting
Alternative has not been consummated for any reason at of prior to the
Effective Time with respect to the Depositary Shares, the Series A Debentures
or the Series B Debentures, as the case may be, the total amount of each
of Series A and Series B Debentures and Depositary Shares representing
interests in the $25 liquidation preference of the Public Preferred Stock
to be issued upon exercise of each such Option shall be rounded upwards
to the nearest integral multiple of $100, $100 and $25, respectively (collectively,
the "Option Adjustment"), and the amount of cash payable shall be reduced
by a corresponding amount so that the holder does not receive fractional
Depositary Shares, fractional Series A Debentures or fractional Series
B Debentures (provided, however, if upon exercise of an Option the amount
of cash to be received is less than the Option Adjustment, the total amount
of each of Series A and Series B Debentures and Depositary Shares representing
interests in the $25 liquidation preference of Public Preferred Stock shall
be rounded downwards to the nearest integral multiple of $100, $100 and
$25, respectively, and the amount of cash payable shall be increased by
a corresponding amount so that the holder does not receive fractional Depositary
Shares, fractional Series A Debentures or fractional Series B Debentures)
and (ii) whether or not the Underwriting Alternative has been consummated
at or prior to the Effective Time the total amount of New Shares issuable
to each Option holder in respect of all Options held by such holder shall
be rounded upwards to the nearest whole New Share. Except as specifically
provided in this Section 1.7, the Company shall not make any other adjustments
to the terms of the Options as a result of the issuance of the ESOP Preferred
Stocks or the terms of the ESOP Preferred Stocks (including, without limitation,
the dividend and conversion rights thereof).
SECTION 1.8 Convertible Company Securities.
Each share of the Prior Preferred Stock and each of the Air Wis Services,
Inc. 73/4% Convertible Subordinated Debentures, due 2010, and Air Wis Services,
Inc. 8 1/2% Convertible Subordinated Notes, due 1995 (collectively,
the "Air Wis Convertible Debentures"), outstanding immediately prior to
the Effective Time (each, a "Convertible Company Security") shall upon
and following consummation of the Recapitalization remain outstanding,
and each holder of any such Convertible Company Security shall thereafter
have the right to receive, upon conversion, without interest, the Recapitalization
Consideration with respect to each Old Share that such holder would have
been entitled to receive had such holder converted such Convertible Company
Security in full immediately prior to the Effective Time. The Recapitalization
Consideration issuable upon conversion of a Convertible Company Security
shall be issued in the same proportion as holders of Old Shares receive
their Recapitalization Consideration, but for fractional interests, among
cash and New Shares and, if applicable, principal amount of Series A and
Series B Debentures and Depositary Shares representing interests in the
$25 liquidation preference of Public Preferred Stock, except that (i) if
the Underwriting Alternative has not been consummated for any reason at
or prior to the Effective Time with respect to the Depositary Shares, the
Series A Debentures or the Series B Debentures, as the case may be, the
total amount of each of Series A and Series B Debentures and Depositary
Shares to be issued upon conversion of the Convertible Company Security
shall be rounded upwards to the nearest integral multiple of $100, $100
and $25, respectively, (collectively, the "Convertible Company Security
Adjustment") and the amount of cash payable shall be reduced by a corresponding
amount so that the holder does not receive fractional Depositary Shares
representing interests in the $25 liquidation preference of Public Preferred
Stock, fractional Series A Debentures or fractional Series B Debentures
(provided, however; if upon conversion of a Convertible Company Security
the amount of cash to be received is less than the Convertible Company
Security Adjustment, the total amount of each of Series A and Series B
Debentures and Depositary Shares representing interests in the $25 liquidation
preference of Public Preferred Stock shall be rounded downwards to the
nearest integral multiple of $100, $100 and $25, respectively, and the
amount of cash payable shall be increased by a corresponding amount so
that the holder does not receive fractional Depositary Shares, fractional
Series A Debentures of fractional Series B Debentures) and (ii) whether
or not the Underwriting Alternative has been consummated at of prior to
the Effective Time the total amount of New Shares issuable to each holder
of Convertible Company Securities in respect of all Convertible Company
Securities held by such holder shall be rounded upwards to the nearest
whole New Share. Except as specifically provided in this Section 1.8, the
Company shall not make any other adjustments to the terms of the Convertible
Company Securities as a result of the issuance of the ESOP Preferred Stocks
or the terms of the ESOP Preferred Stocks (including, without limitation,
the dividend and conversion rights thereof).
SECTION 1.9 Form of Recapitalization Consideration.
Notwithstanding anything in Section 1.7 or 1.8 to the contrary, if
the holder of an Option or a Convertible Company Security exercises such
Option or Convertible Company Security at any time after either series
of Debentures or the Public Preferred Stock has been redeemed, retired
or repaid in full (the securities redeemed, retired or repaid hereinafter
referred to as the "Retired Securities"), the holder of such Option or
Convertible Company Security shall not be entitled to receive any Retired
Securities but shall receive in lieu thereof an amount of cash equal to
the principal amount (without premium regardless of whether a premium is
paid at the time of redemption, retirement or repayment in full) or liquidation
preference (without the amount of accrued dividends regardless of whether
accrued dividends were paid at the time of redemption, retirement or repayment
in full), as the case may be, of or represented by the Retired Securities
that such holder otherwise would have received in respect of the exercise
of such Option or Convertible Company Security.
SECTION 1.10 Additional ESOP Shares.
(a) As soon as practicable after the Measuring Date, the Company shall
(x) contribute shares of Supplemental ESOP Preferred Stock to Part B of
the ESOP and (y) provide an allocation of shares of Supplemental ESOP Preferred
Stock on a book entry basis in a manner consistent with the allocation
under the Supplemental ESOP, such that the aggregate number of shares under
(x) and (y) is equal to a fraction of the Additional Shares (as defined
in Section 1.10(b) below), which fraction shall be the First Year Fraction.
All such shares shall be Supplemental ESOP Preferred. To the extent permissible
under the limitations imposed by the Internal Revenue Code, .the shares
determined under this subsection (a) shall be contributed to Part B of
the ESOP, and the remaining shares shall be allocated under the Supplemental
ESOP.
(b) "Additional Shares" shall mean the number of shares of ESOP
Convertible Preferred Stock determined as the excess of (A) the product
of (w) a fraction, the numerator of which is the Adjusted Percentage (as
defined in Section 1.10(c) below) at the close of business on the Measuring
Date, and the denominator of which is the excess of one over such Adjusted
Percentage (expressed as a decimal), (x) the Fully-Diluted Shares (as defined
in Section 1.10(d) below) at the close of business on the Measuring Date,
(y) a fraction, the numerator of which is one, and the denominator of which
is the Conversion Rate (as defined in Article FOURTH, Part II, Section
6.1 of the Restated Certificate), and (z) .9999, over (B) 17,675,345 ,
provided
that
the number of Additional Shares shall not be less than zero.
(c) "Adjusted Percentage" shall mean that percentage set forth
under the heading "Adjusted Percentage" on the table set forth on Schedule
1.10 that corresponds to the Average Closing Price (as defined in Section
1.10(e) below) set forth under the heading "Average Closing Price" on such
table, provided that if the Average Closing Price falls between
two entries on the table, the Adjusted Percentage shall be determined by
a straight-line interpolation between the two entries in the "Adjusted
Percentage" column that correspond to the next lowest and next highest
entries in the "Average Closing Price" column, rounded to the nearest 0.00000001
%.
(d) "Fully-Diluted Shares" shall mean the sum of (i) the excess
of (A) the aggregate number of New Shares outstanding immediately prior
to the close of business on the Measuring Date over (B) the aggregate number
of New Shares issued after the Effective Time other than upon exercise,
conversion or exchange of Options or Convertible Company Securities, (ii)
the aggregate number of New Shares issuable (whether or not from New Shares
held in its treasury) upon the conversion of the Series A Preferred Stock
outstanding immediately prior to the close of business on the Measuring
Date, (iii) the aggregate number of New Shares issuable (whether or not
from New Shares held in its treasury) upon the exercise, conversion or
exchange immediately prior to the close of business on the Measuring Date
of any other Convertible Company Securities with an exercise, conversion
or exchange price equal to or less than the Old Share Equivalent Price
(as defined in Section 1.10(t) below) and (iv) the aggregate number of
New Shares that would be required to be issued by the Company (whether
or not from New Shares held in its treasury) if all Options with an exercise
price less than the Old Share Equivalent Price were exercised in full immediately
prior to the close of business on the Measuring Date and the proceeds from
such Option exercises are used by the Company to repurchase Recapitalization
Consideration (in the open market at the Old Share Equivalent Price) to
be delivered in connection with the Company's obligation to issue Recapitalization
Consideration upon exercise of such Options.
(e) "Average Closing Price" shall mean the average of the product
of (i) the Current Market Price (as defined in Section l.10(g) below) of
a New Share for each Trading Day (as defined in Section 1.10(h) below)
during the Measuring Period (as defined in Section 1.10(i) below) (or in
case the New Shares are exchanged for or changed, reclassified or converted
into stock, securities or other property (including cash or any combination
thereof), whether or not of the Company, the Fair Market Value (as defined
in Section 1.10(j) below) of such stock, securities or other property into
which a New Share has been exchanged, changed, reclassified or converted)
and (ii) the Conversion Rate in effect on such Trading Day.
(f) "Old Share Equivalent Price" shall mean the sum of (i) the
product of (x) 0.5 and (y) the Average Closing Price of a New Share, (ii)
either (a) the product of (x) 1.244 and (y) the average of the Current
Market Price of a Depositary Share for each Trading Day during the Measuring
Period or (b) if the Underwriting Alternative with respect to the Depositary
Shares has been consummated, the Depositary Share Proceeds Amount, (iii)
either (a) the product of (x) .1550 and (y) the average of the Current
Market Price of a Series A Debenture for each Trading Day during the Measuring
Period or (b) if the Underwriting Alternative with respect to the Series
A Debentures has been consummated, the Series A Debenture Proceeds Amount,
(iv) either (a) the product of (x) .1550 and (y) the average of the Current
Market Price of a Series B Debenture for each Trading Day during the Measuring
Period or (b) if the Underwriting Alternative with respect to the Series
B Debentures has been consummated, the Series B Debenture Proceeds Amount
and (v) $25.80.
(g) "Current Marker Price" of publicly traded New Shares or any
other class or series of capital stock or other security of the Company
or any other issuer for any day shall mean the last reported sales price,
regular way on such day, or, if no sale takes place on such day, the average
of the reported closing bid and asked prices on such day, regular way,
in either case as reported on the New York Stock Exchange Composite Tape
or, if such security is not listed or admitted for trading on the New York
Stock Exchange, Inc. ("NYSE"), on the principal national securities exchange
on which such security is listed or admitted for trading or quoted or,
if not listed or admitted for trading or quoted on any national securities
exchange, on the Nasdaq National Market, or, if such security is not quoted
on such National Market, the average of the closing bid and asked prices
on such day in the over-the-counter market as reported by the National
Association of Securities Dealers, Inc. Automated Quotation System ("NASDAQ")
or, if bid and asked prices for such security on such day shall not have
been reported through NASDAQ, the average of the bid and asked prices on
such day as furnished by any NYSE member firm regularly making a market
in such security selected for such purpose by the Board of Directors of
the Company.
(h) "Trading Day" shall mean any day on which the securities
in question are traded on the NYSE, or if such securities are not listed
or admitted for trading or quoted on the NYSE, on the principal national
securities exchange on which such securities are listed or admitted, or
if not listed or admitted for trading or quoted on any national securities
exchange, on the Nasdaq National Market, or if such securities are not
quoted on such National Market, in the applicable securities market in
which the securities are traded.
(i) "Measuring Period" shall mean the period commencing on the
day of the Effective Time and ending on the Measuring Date.
(j) "Fair Market Value" shall mean the average of the daily Current
Market Prices of the security in question during the five (5) consecutive
Trading Days before the earlier of the day in question and the "ex" date
with respect to the issuance or distribution requiring such computation.
The term "'ex' date," when used with respect to any issuance or distribution,
means the first day on which the New Shares trade regular way, without
the right to receive such issuance or distribution, on the exchange or
in the market, as the case may be, used to determine that day's Current
Market Price. With respect to any asset or security for which there is
no Current Market Price, the Fair Market Value of such asset or security
shall be determined in good faith by the Board of Directors of the Company.
SECTION 1.11 Underwriting Alternative. Prior to the date that
is ten days after the date of the Company Proxy Statement, but at least
seven days prior to the Announcement Date, the Company may elect to pursue
the underwriting of (a) the Depositary Shares, (b) the Series A Debentures,
(c) the Series B Debentures, or (d) any combination of the foregoing (referred
to collectively herein as the "Underwriting Alternative"), provided that
consummating an underwriting with respect to the Depositary Shares and/or
either or both series of Debentures, as the case may be, shall be in lieu
of issuing Depositary Shares or either or both such series of Debentures
to holders ef Old Shares pursuant to Section 1.5 hereof, to holders of
Options pursuant to Section 1.7 hereof and to holders of Convertible Company
Securities pursuant to Section 1.8 hereof. If the Company elects the Underwriting
Alternative, it may offer pursuant thereto approximately the amounts of
Depositary Shares and/or Debentures which if the Underwriting Alternative
were not elected would be issuable upon the exchange of all outstanding
Old Shares in the Reclassification and upon exercise of Options and conversion
of the Convertible Company Securities reasonably expected to be exchanged
or converted in accordance with Sections 1.7 and 1.8 hereof (at the rate
of $31.10 liquidation preference of Public Preferred Stock as represented
by Depositary Shares, $15.55 principal amount of Series A Debentures and
$15.55 principal amount of Series B Debentures per Old Share), which amounts
shall be rounded up to produce aggregate amounts of Depositary Shares and
Debentures of each series that are consistent with customary aggregate
underwriting denominations. If it so elects to pursue the Underwriting
Alternative, the Company shall use its best efforts to accomplish such
underwritings, including selecting a managing underwriter or underwriters,
filing registration statements with the SEC, and entering into a firm commitment
underwriting agreement or agreements, provided, however, that the
Company may elect to terminate the Underwriting Alternative at any time
prior to the Effective Time. The Unions will cooperate and use their best
efforts to facilitate the underwritings. The Underwriting Alternative will
be effected in accordance with customary underwriting agreements which
may reflect that, if the Company is advised by the managing underwriter
or managing underwriters that the Public Preferred Stock (represented by
Depositary Shares), Series A Debentures or Series B Debentures would be
priced in excess of the Maximum Price applicable to such security (so that
such security, if priced at the applicable Maximum Pricing, could only
be sold at less than par), and is further advised that consistent with
industry practice the Underwriting Alternative would be facilitated by
the sale of such securities at or closer to par, the Company may reduce
the amount of such securities to be sold and increase the dividend or interest
rate above the applicable Maximum Pricing so that such securities may be
sold at or closer to par, provided that the aggregate amount of
dividends payable annually in respect of the Public Preferred Stock (represented
by the Depositary Shares) to be sold, and the aggregate amount of interest
payable annually in respect of either series of Debentures to be sold,
that are priced above the applicable Maximum Pricing may not exceed the
aggregate amount of dividends or interest payable annually in respect of
such security at the applicable Maximum Pricing with respect to the amount
of such securities as originally proposed to be offered. If the Underwriting
Alternative with respect to the Depositary Shares and both series of Debentures
is consummated, the amount of cash payable in respect of each Old Share
shall equal the sum of (i) $25.80 per share and (ii) the gross proceeds
(price to public without deducting any underwriting discount or other costs)
received by the Company for each $31.10 liquidation preference of the Public
Preferred Stock as represented by Depositary Shares in the appropriate
underwriting (the "Depositary Share Proceeds Amount"), (iii) the gross
proceeds (price to public without deducting any underwriting discount or
other costs) received by United for each $15.55 principal amount of Series
A Debentures in the appropriate underwriting (the "Series A Debenture Proceeds
Amount") and (iv) the gross proceeds (price to public without deducting
any underwriting discount or other costs) received by United for each $15.55
principal amount of Series B Debentures in the appropriate underwriting
(the "Series B Debenture Proceeds Amount").
SECTION 2.2 Bylaws. As of
the Effective Time, the bylaws of the Company in effect immediately prior
to the Effective Time shall be amended and restated in accordance with
applicable law and the Restated Certificate, in form and substance as set
forth in Schedule 2.2 (the "Restated Bylaws").
SECTION 2.3. Directors and Officers. Immediately
prior to the Effective Time, the Company shall cause the persons identified
on Schedule 2.3(i) to resign, as of the Effective Time, from the
Board of Directors of the Company (which resignations, for purposes of
all rights and benefits of such directors under all agreements, plans,
policies and arrangements of the Company and United including those identified
in the letter referred to in Section 5.11 hereof, shall be deemed to have
occurred immediately following the Effective Time). From and after the
Effective Time, until their successors are duly elected or appointed and
qualified in accordance with applicable law, the Restated Certificate and
the Restated Bylaws, or until their earlier death, resignation, disqualification
or removal, the persons identified or described on Schedule 2.3(ii)
shall
constitute the entire Board of Directors of the Company (the "New Directors")
and each shall serve in the classes and capacities identified in such Schedule.
Except as provided in the two preceding sentences, or as otherwise provided
in the Restated Certificate or in the Restated. Bylaws, the officers of
the Company immediately prior to the Effective Time (other than the Chairman
and Chief Executive Officer, the President and Chief Operating Officer
and the Executive Vice-President-Corporate Affairs and General Counsel
of the Company (the "Retiring Executives")) shall be the officers of the
Company from and after the Effective Time until their successors are duly
elected or appointed and qualified or until their earlier death, resignation,
disqualification or removal. The Retiring Executives shall retire from
all positions with the Company and the Subsidiaries held by them effective
at or immediately prior to the Effective Time and such retirement shall
be treated as set forth in separate letter agreements to be entered into
at or prior to the Effective Time among each Retiring Executive, on the
one hand, and the Company and United, on the other hand, substantially
in the form and substance provided to the Unions prior to the date hereof.
Other than the Retiring Executives, no other officer of the Company or
United may be terminated for a period of six months following the Effective
Time unless such termination shall be approved, specifically as to such
officer, by at least two of the New Directors identified as "Outside Public
Directors" in Schedule 2.3(ii) and the Chief Executive Officer of the Company
following the Effective Time. At the Effective Time, Gerald Greenwald or
such other person as shall be proposed by the Unions prior to the Effective
Time (and not found unacceptable by the Company) shall be appointed by
the Board of Directors, subject to his being ready, willing and able to
serve, as Chief Executive Officer of the Company and United. Such person
as shall be proposed by the Chief Executive Officer and the Unions following
the Effective Time (and approved in accordance with the provisions of Article
FIFTH, Section 3.6.2 of the Restated Certificate) shall be appointed by
the Board of Directors, subject to his/her being ready, willing and able
to serve, as Chief Operating Officer of the Company and United. From and
after the Effective Time, subject to the fiduciary duties of the Board
of Directors, until the Termination Date the Company shall cause (i) the
Chief Executive Officer of the Company to also be one of the Board's nominees
to serve as a Management Public Director (as defined in the Restated Certificate)
and (ii) the Chief Executive Officer of the Company to also serve as the
Chief Executive Officer of United.
SECTION 2.4 United. The Company
shall take all appropriate actions such that, as of the Effective Time,
the certificate of incorporation of United shall be amended to include
the provision set forth in Schedule 2.4 hereto.
OF THE COMPANY
SECTION 3.2 Corporate Authorization.
The execution, delivery and performance by the Company of this Agreement
and the consummation by the Company of the transactions contemplated hereby
are within the Company's corporate powers and, except for (w) any required
approval by the Company's stockholders in connection with the consummation
of the Shareholder Vote Matters (as defined in Section 5.2), (x) the approval
by the Company's stockholders of amendments to each of the Company's 1981
Incentive Stock Program, 1988 Restricted Stock Plan and Incentive Compensation
Plan, in form and substance as set forth on Schedule 3.2(i), Schedule
3.2(ii)
and
Schedule 3.2(iii), respectively (the "Company Plan Matters"), (y) the approval
and ratification of the Company Plan Matters by the New Directors following
the Effective Time and (z) approval by the Board of Directors of the Company
of the filing of the Restated Certificate in accordance with the applicable
provisions of Delaware Law, have been duly authorized by all necessary
corporate action. Prior to the Effective Time, the Board of Directors of
the Company shall approve the filing of the Restated Certificate in accordance
with the applicable provisions of Delaware Law. This Agreement has been
duly executed and delivered by the Company and, assuming due authorization,
execution and delivery by each of the Unions, constitutes a legal, valid
and binding agreement of the Company, enforceable against the Company in
accordance with its terms. The Board of Directors of the Company has taken
all necessary and appropriate actions so that the restrictions on "business
combinations" contained in Section 203 of Delaware Law (i) will not apply
with respect to or as a result of the Recapitalization, including, without
limitation, the acquisition of the ESOP Preferred Stock by the ESOPs and
(ii) will not apply prior to the Termination Date (as defined in Article
FIFTH, Section 1.72 of the Restated Certificate) to "business combinations"
(as defined in Section 203 of Delaware Law) involving the Company
or any of its Subsidiaries, on the one hand, and the ESOP Trustee, the
ESOPS or either of the Unions, on the other hand, which otherwise would
be subject to Article FIFTH, Section 3.8 of the Restated Certificate. The
Company has taken all appropriate action to establish each of the ESOPS
effective not later than the Effective Time.
SECTION 3.3 Governmental Authorization. The
execution, delivery and performance by the Company of this Agreement and
the consummation by the Company of the transactions contemplated hereby
require no consent, approval, authorization or other action by or in respect
of, or filing with or notification to, any governmental body, agency, official
or authority other than (i) the filing of the Restated Certificate in accordance
with Delaware Law; (ii) compliance with any applicable requirements of
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the
"HSR Act"); (iii) compliance with any applicable requirements of the Securities
Act of 1933, as amended, and the rules and regulations promulgated thereunder
(the "1933 Act"), the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder (the "1934 Act") and the
TIA; (iv) any applicable filings with the United States Department of Transportation
("DOT"); and (v) actions or filings the absence of which would not have
a Material Adverse Effect.
SECTION 3.4 Non-Contravention. Except
as set forth on Schedule 3.4, the execution, delivery and performance by
the Company of this Agreement and the consummation by the Company of the
transactions contemplated hereby do not and will not (i) contravene or
conflict with the Certificate of Incorporation or bylaws of the Company,
(ii) assuming compliance with the matters referred to in Section 3.3, contravene
or conflict with or constitute a violation of any provision of any law,
regulation, judgment, injunction, order or decree binding upon or applicable
to the Company, any Subsidiary, or, to the knowledge of the Company, any
of the CRS Companies (as defined in Section 3.6), (iii) constitute a default
under or give rise to a right of termination, cancellation or acceleration
(other than with respect to the acceleration of the exercisability of Options,
the vesting of restricted stock of the Company or the payment of severance
benefits) of any right or obligation of the Company, any Subsidiary or,
to the knowledge of the Company, any of the CRS Companies, or to a loss
of any benefit to which the Company, any Subsidiary or, to the knowledge
of the Company, any of the CRS Companies, is entitled under. any provision
of any agreement, contract or other instrument binding upon the Company,
any Subsidiary or, to the knowledge of the Company, any of the CRS Companies,
or any license, franchise, permit or other similar authorization held by
the Company, any Subsidiary, or, to the knowledge of the Company, any of
the CRS Companies, or (iv) result in the creation or imposition of any
Lien (as defined below) on any asset of the Company, any Subsidiary, or,
to the knowledge of the Company, any of the CRS Companies, which violations,
defaults, rights of termination or Liens could have a Material Adverse
Effect. For purposes of this Agreement, "Lien" means, with respect to any
asset, any mortgage, lien, pledge, charge, security interest or encumbrance
of any kind in respect of such asset. For purposes of the representations
and warranties relating to the CRS Companies that are qualified by the
knowledge of the Company, "knowledge of the Company" shall mean the knowledge
of the executive officers of the Company, United and Covia Corporation.
There are no (i) consents from holders of Options nor (ii) amendments to
the terms of Options or compensation plans or arrangements, that are necessary
to give effect to the transactions contemplated by Section 1.7.
SECTION 3.5 Capitalization. The
authorized capital stock of the Company is set forth in the Certificate
of Incorporation of the Company and consists of (i) 125,000,000 Old Shares
and (ii) 16,000,000 shares of Preferred Stock, without par value, of which
1,250,000 hive been designated as Series C Junior Participating Preferred
Stock ("Junior Preferred Stock") and are reserved for issuance upon exercise
of the Rights (as defined in the Rights Agreement dated as of December
11, 1986 between the Company and First Chicago Trust Company of New York
(formerly Morgan Shareholder Services Trust Company), as amended (the "Rights
Agreement")) and 6,000,000 have been designated as Prior Preferred Stock.
As of March 22, 1994, there were outstanding (a) 24,570,539 Old Shares
(including 119,643 unvested shares issued under the UAL 1988 Restricted
Stock Plan), (b) 6,000,000 shares of Prior Preferred Stock (convertible
into 3,833,866 Old Shares), (c) Rights to purchase 245,710 shares of Junior
Preferred Stock, (d) Options to purchase an aggregate of 1,648,668 Old
Shares (of which 13,927 have tandem stock appreciation rights held by former
employees with an aggregate exercise price of $1,061,872.75 and of which
Options 11,500 are held by ex-employees of the Company with vesting dates
after the expiration of such Options pursuant to such ex-employees' severance
agreements), and (e) $35,535,000 principal amount of Air Wis Convertible
Debentures convertible into 140,134 Old Shares, of which $2,530,000 principal
amount, convertible into 9,765 Old Shares, is held by Air Wis Services,
Inc. All outstanding shares of capital stock of the Company have been duly
authorized and validly issued and are fully paid and nonassessable. Except
as set forth in this Section 3.5 and except for changes since March 1,
1994 resulting from the exercise of Options or the conversion of Convertible
Company Securities, in each case outstanding on such date, there are outstanding
no (w) shares of capital stock or other voting securities of the Company,
(x) securities of the Company or any Subsidiary convertible into or exchangeable
for shares of capital stock or voting securities of the Company, (y) options,
subscriptions, warrants or other rights, agreements, arrangements or commitments
of any character to acquire from the Company or any Subsidiary any capital
stock, voting securities or securities convertible into or exchangeable
or exercisable for capital stock or voting securities of the Company, or
(z) obligations of the Company or any Subsidiary to issue any capital stock,
voting securities or securities convertible into or exchangeable or exercisable
for capital stock or voting securities of the Company (the items in clauses
(w), (x), (y) and (z) being referred to collectively as the "Company Securities").
Except (i) as set forth above, (ii) for tax withholding and cashless exercise
features of the Options and restricted stock, and (iii) for stock appreciation
rights that do not become exercisable until September 1, 1994 and expire
at the Effective Time, there are no obligations of the Company or any Subsidiary
to repurchase, redeem or otherwise acquire any Company Securities or make
any payments based upon the value of any Company Securities.
(b) Except for director qualifying shares and similar securities, all
of the outstanding capital stock of, or other ownership interests in, each
Subsidiary is owned by the Company, directly or indirectly, free and clear
of any Lien and free of any other limitation or restriction (including
any restriction on the right to vote, sell or otherwise dispose of such
capital stock or other ownership interests). Except for director qualifying
shares and similar securities, there are outstanding no (i) securities
of the Company or any Subsidiary convertible into or exchangeable for shares
of capital stock or other voting securities or ownership interests in any
Subsidiary or (ii) options, subscriptions, warrants or other rights, agreements,
arrangements or commitments of any character to acquire from the Company
or any Subsidiary, and no other obligation of the Company or any Subsidiary
to issue, any capital stock, voting securities or other ownership interests
in, or any securities convertible into or exchangeable or exercisable for
any capital stock, voting securities or ownership interests in, any Subsidiary
(the items in clauses (i) and (ii) being referred to collectively as the
"Subsidiary Securities"). There are no outstanding obligations of the Company
or any Subsidiary to repurchase, redeem or otherwise acquire any outstanding
Subsidiary Securities or make any payments based upon the value of any
Subsidiary Securities.
(c) Each of Apollo Travel Services Partnership, a Delaware general partnership
("ATS"), Galileo Japan Partnership, a Delaware general partnership ("GJP"),
and Galileo International Partnership, a Delaware general partnership ("GIP"
and, together with ATS and GJP, collectively, the "CRS Companies") is a
general partnership formed under the laws of the State of Delaware, is
validly existing and in good standing under the laws of Delaware, and has
all partnership power and authority and all governmental licenses, authorizations,
consents and approvals required to own, operate and lease its assets and
to carry out its business as now conducted (except for those the absence
of which would not have a Material Adverse Effect). The partnership agreement
establishing each of the CRS Companies, together with _ all exhibits and
amendments thereto has been provided to the Unions, and no Subsidiary that
is party to either such partnership agreement is or has been in any manner
in breach of, or in default under, any provision thereof, nor is the Company,
United or any officer or director of either of them aware of any breach
or default by any other party to either of such partnership agreements
that would or could be reasonably expected to result in a Material Adverse
Effect. Except as set forth on Schedule 3.6(c), all of the outstanding
ownership interests held by Covia Corporation, a Delaware corporation and
wholly owned Subsidiary, of the CRS Companies are free and clear of any
Lien other than as set forth in the partnership agreement with respect
to such entity.
(b) As of its filing date, no such report, statement or schedule filed
pursuant to the 1934 Act contained any untrue statement of a material fact
or omitted to state any material fact necessary in order to make the statements
made therein, in the light of the circumstances under which they were made,
not misleading.
(c) No such registration statement, as amended or supplemented, if applicable,
filed pursuant to the 1933 Act as of the date such statement or amendment
became effective contained any untrue statement of a material fact or omitted
to state any material fact required to be stated therein or necessary to
make the statements therein not misleading.
SECTION 3.8 Financial Statements. The
audited consolidated financial statements of the Company included in its
Annual Reports on Form 10-K and the unaudited consolidated interim financial
statements included in its Quarterly Reports on Form 10-Q referred to in
Section 3.7 have been prepared in accordance with generally accepted accounting
principles consistently applied and fairly present (except as may be indicated
in the notes thereto) the consolidated financial position -of the Company
and its consolidated subsidiaries as of the dates thereof and their consolidated
results of operations and cash flows for the periods then ended (subject
to normal, immaterial year-end audit adjustments in the case of any unaudited
interim financial statements).
(b) At the time the Company Proxy Statement and Schedule 13E-3 or any
amendment or supplement thereto is first mailed to stockholders of the
Company, and at the time such stockholders of the Company vote on the Shareholder
Vote Matters, the Company Proxy Statement and Schedule 13E-3, as supplemented
or amended, if applicable, will not be false or misleading with respect
to any material fact, or omit to state any material fact required to be
stated therein or necessary to make the statements made therein, in the
light of the circumstances under which they were made, not misleading.
At the time of the filing of the Registration Statement and the Underwriting
Registration Statements and any amendment or supplement thereto, at the
time the same are declared effective by the SEC, at the time of any distribution
under the Registration Statement and the Underwriting Registration Statements,
at the time the stockholders of the Company vote on the Shareholder Vote
Matters and at the Effective Time, such Registration Statement and Underwriting
Registration Statements, as so amended or supplemented, will not be false
or misleading with respect to any material fact or omit to state any material
fact required to be stated therein or necessary to make the statements
made therein, in the light of the circumstances under which they were made,
not misleading. At the time of the filing of any Company Disclosure Document
other than the Company Proxy Statement, Schedule 13E-3, Registration Statement
and the Underwriting Registration Statements and at the time of any distribution
thereof, such Company Disclosure Document will not be false or misleading
with respect to any material fact or omit to state any material fact required
to be stated therein or necessary to make the statements made therein,
in the light of the circumstances under which they were made, not misleading.
The representations and warranties contained in this Section 3.9(b) will
not apply to statements included in or omissions from the Company Disclosure
Documents based upon information furnished to the Company in writing by
either Union specifically for use therein.
SECTION 3.10 Absence of Certain Changes.
Except as disclosed in SEC filings referred to in Section 3.7 filed prior
to the date hereof, since December 31, 1993, there has been no event, and
no state of circumstances has existed, that has had or will, or could reasonably
be expected to, have a Material Adverse Effect.
SECTION 3.11 Finders' Fees.
Except for First Boston and Lazard, whose fees will be paid by the Company,
and as specifically contemplated herein, there is no investment banker,
broker or finder which has been retained by or is authorized to act on
behalf of the Company, any Subsidiary or, to the knowledge of the Company,
any CRS Company, who might be entitled to any fee or commission from the
Company, either Union or any affiliate of either of them upon consummation
of the transactions contemplated by this Agreement (other than in connection
with the Underwriting Alternative), based upon arrangements made by or
on behalf of the Company. .
SECTION 3.12. Board Action. The Board
of Directors (i) has determined that the transactions contemplated hereby
are fair to and in the best interest of the Company's stockholders, (ii)
has approved the Reclassification, the Recapitalization and this Agreement,
(iii) has approved the Company Plan Matters, subject to ratification by
the Company's stockholders and the New Directors, and (iv) has resolved
to recommend (subject to the provisions of Section 5.4) the approval and
adoption of the Shareholder Vote Matters to the Company's stockholders
at the Company Stockholder Meeting.
SECTION 3.13 Securities. The
Recapitalization Securities and the ESOP Preferred Stocks (and the New
Shares into which the ESOP Preferred Stocks are convertible) to be issued
pursuant to Sections 1.2, 1.3, 1.4, 1.6 and 1.10, when so issued in accordance
with such Sections and the Registration Statement and the Underwriting
Registration Statements, if applicable, will be duly authorized and validly
issued and, in the case of such securities other than the Debentures, will
be fully paid and nonassessable.
SECTION 3.14 Opinion of Financial Advisers.
The Company has received the respective oral opinions of First Boston and
Lazard to the effect that, as of May 20, 1994, the consideration to be
received in the Recapitalization by the Company's stockholders is fair
to the Company's stockholders from a financial point of view, which opinions
shall be confirmed in writing and delivered to each of the Unions promptly
following receipt (the "Company Fairness Opinions").
SECTION 3.15 Vote Required. The
affirmative vote of a majority of the votes that holders of the outstanding
Old Shares are entitled to cast is the only vote of the holders of any
class or series of capital stock of the Company necessary to approve the
Shareholder Vote Matters. The Shareholder Vote Matters are the only matters
required to be approved by holders of capital stock of the Company in connection
with the Recapitalization.
SECTION 3.16. Limitations. As of
the date of this Agreement, the Company has no knowledge of any event or
condition which would preclude it from taking any action necessary to consummate
the transactions contemplated hereby.
SECTION 3.17. Compliance with Status Quo.
The Company has complied in all material respects with its obligations
contained in Sections 10 and 11 of that certain letter setting forth the
principal terms of the Recapitalization, dated December 22, 1993, among
the Company, the IAM and ALPA (the "Letter Agreement"), which apply to
transactions entered into after December 22, 1993 and on or prior to March
15, 1994 (the "Status Quo Provisions"). Except as set forth on Schedule
3.17, neither the Company nor any of its Subsidiaries has taken any action
that would have violated the Status Quo Provisions in any material respect
had the Status Quo Provisions continued to remain in effect through the
date hereof. Except as set forth on Schedule 5.1, the Company has not disclosed
to the Unions any plans of the type referred to in Section 5.1 (e) since
December 22, 1993.
SECTION 3.18 Rights Agreement. The
Board of Directors has taken all necessary action to amend the Rights Agreement,
effective at or immediately prior to the Effective Time, in form and substance
as set forth in Schedule 3.18 (the "Rights Amendment").
OF THE UNIONS
SECTION 4.2 Authorization. The
execution, delivery and performance by such Union of this Agreement and
the consummation by such Union of the transactions contemplated hereby
(including the applicable Labor Agreement) are within the organizational
powers of such Union and have been duly authorized by all necessary organizational
action of such Union. This Agreement has been duly executed and delivered
by such Union and, assuming due authorization, execution and delivery by
the Company and the other Union, constitutes a valid and binding agreement
of such Union, enforceable against such Union in accordance with its terms.
SECTION 4.3 Governmental Authorization.
The execution, delivery and performance by such Union of this Agreement
and the consummation by such Union of the transactions contemplated by
this Agreement require no consent, approval, authorization or other action
by or in respect of, or filing with or notification to, any governmental
body, agency, official or authority other than (i) compliance with any
applicable requirements of the HSR Act, (ii) any applicable filings with
DOT, and (iii) actions or filings the absence of which would not, in the
aggregate, have a material adverse effect on such Union or on the ability
of such Union to perform its obligations under this Agreement.
SECTION 4.4 Non-Contravention The
execution, delivery and performance by such Union of this Agreement and
the consummation by such Union of the transactions contemplated hereby
do not and will not (i) contravene or conflict with the organizational
documents of-such Union, (ii) assuming compliance with the matters referred
to in Section 4.3, contravene or conflict with any provision of law, regulation,
judgment, order or decree binding upon such Union or (iii) constitute a
default under or give rise to any right of termination, cancellation or
acceleration of any right or obligation of such Union or to a loss of any
benefit to which such Union is entitled under any agreement, contract or
other instrument binding upon such Union, which defaults, terminations,
cancellations, accelerations or losses, could individually or in the aggregate
have a material adverse effect on such Union or on the ability of such
Union to perform its obligations under this Agreement.
SECTION 4.5. Disclosure Documents. The
information with respect to such Union that such Union furnishes to the
Company in writing specifically for use in any Company Disclosure Documents,
taken as a whole, will not be false or misleading with respect to any material
fact of omit to state any material fact required to be stated therein or
necessary to make the statements made therein, in the light of the circumstances
under which they were made, not misleading (i) in the case of the Company
Proxy Statement and the Schedule 13E-3, at the time it or any amendment
or supplement thereto is first mailed to stockholders of the Company, and
at the time the stockholders vote on adoption of the Shareholder Vote Matters,
(ii) in the case of the Registration Statement and each of the Underwriting
Registration Statements, at the time it or any amendment is filed and is
declared effective by the SEC and is distributed and, in the case of the
Registration Statement, at the time the stockholders vote on the Shareholder
Vote Matters and at the Effective Time, and (iii) in the case of any other
Company Disclosure Document, at the time of the filing thereof and at the
time of any distribution thereof.
SECTION 4.6 Finders' Fees Except
as previously disclosed to the Company in writing (and such other persons
that such Union may have selected after the date hereof whose fees will
be paid by such Union or the Company, subject, in the case of payment by
the Company, to the terms of the Fee Letter (as defined in Section 10.4))
or as otherwise contemplated hereby or by their engagement letters, there
is no investment banker, broker, finder or other intermediary who might
be entitled to any fee or commission from the Company, such Union or any
affiliate of either of them upon consummation of the transactions contemplated
by this Agreement based upon arrangements made by or on behalf of such
Union.
SECTION 4.7. Limitations. As of
the date of this Agreement, such Union has no knowledge of any event or
conditions which would preclude it from taking any action necessary to
consummate the transactions contemplated hereby.
(b) reclassify, combine, split, subdivide, redeem, purchase or otherwise
acquire, or propose to purchase or otherwise acquire, any Company Securities
or Subsidiary Securities, except repurchases of Company securities, (x)
pursuant to employee stock purchase, stock option, stock grant or other
employee arrangements or (y) pursuant to rules or requirements under the
Employee Retirement Income Security Act of 1974, as amended;
(c) declare or pay any dividend or distribution on the Old Shares;
(d) (i) increase the compensation of any of its directors, officers
or key employees, except in the ordinary course of business and consistent
with past practice or pursuant to the terms of agreements or plans currently
in effect; (ii) pay or agree to pay any pension, retirement allowance or
other employee benefit that is either not required or specifically permissible
by any existing plan, agreement or arrangement to any director, officer
or key employee, other than in the ordinary course of business and consistent
with past practice; (iii)'commit itself to any additional pension, profit-sharing,
bonus, extra compensation, incentive, deferred compensation, stock purchase,
stock option, stock appreciation right, group insurance, severance pay,
retirement or other employee benefit plan, agreement or arrangement, or
to any employment or consulting agreement with or for the benefit of any
director, officer or key employee whether past or present, except in the
ordinary course of business consistent with past practice; or (iv) except
as required by applicable law, amend in any material respect any such plan,
agreement or arrangement; provided that the foregoing shall not be deemed
to restrict necessary and reasonable actions taken in connection with (aa)
retention of personnel other than executive officers or (bb) promotions
and new hires in the ordinary course of business consistent with past practice;
provided,
further. that nothing herein shall preclude the Company or any of its
Subsidiaries from taking any action reasonably designed to permit any employee
to realize vested benefits under any existing plan, agreement or arrangement
referred to above;
(e) except in the ordinary course of business and consistent with past
practice and except for refinancings or pursuant to existing plans of the
Company disclosed to the Unions in writing prior to the date hereof (i)
incur any material amount of long-term indebtedness for borrowed money
or issue any material amount of debt securities (other than trade debt
and commercial paper) or assume, guarantee or endorse the obligations of
any other person except for obligations of wholly owned Subsidiaries; (ii)
make any material loans, advances or capital contributions to, or investments
in, any other person (other than to wholly owned Subsidiaries or customary
loans or advances to employees in amounts not material to the maker of
such loan or advance); or (iii) mortgage or pledge any of its material
assets, tangible or intangible, or create or suffer to exist any
lien thereupon, other than any purchase money mortgage or lien; or
(f) enter into any agreement or arrangement to do any of the foregoing.
The Flight Kitchen severance package described in paragraph 26 of Exhibit
E-2 to the Letter Agreement shall be restored and benefits described in
that paragraph shall be provided as if the condition described in paragraph
26, section 5(a) of Exhibit E-2 had been fully complied with. Any Food
Service Agreement employee who can demonstrate that his or her job status
at United was adversely affected by his or her detrimental reliance on
United's March 16, 1994 announcement cancelling the Flight Kitchen LPP's
will be entitled to receive a remedy from United for his or her actual
contractual damages, if any. Any disagreement regarding entitlement to
or the nature of such remedy may be submitted to the United-IAM System
Board of Adjustment.
SECTION 5.2 Stockholder Meeting; Proxy Material.
Subject to receipt by the Company of updated Company Fairness Opinions
from First Boston and Lazard to the effect that, as of the date of the
Company Proxy Statement, the consideration to be received in the Recapitalization
by the Company's stockholders is fair to the Company's stockholders from
a financial point of view, the Company shall cause a meeting of its stockholders
(the "Company Stockholder Meeting") to be duly called and held as soon
as reasonably practicable after the date on which the Registration Statement
is declared effective by the SEC, for the purpose of voting on the approval
and adoption of each of the Reclassification, the Restated Certificate,
the election of four of the five initial Public Directors to the Board
of Directors of the Company, the Recapitalization and the issuance of the
ESOP Preferred Stock as part of the Recapitalization (such matters are
collectively referred to as the "Shareholder Vote Matters") and the Company
Plan Matters. The Shareholder Vote Matters shall be presented as a single
proposal, or the effectiveness of each such matter shall be conditioned
on the approval of all of such matters. Consistent with its obligations
under Section 7.1, the Company shall be entitled to delay the Company Stockholder
Meeting if the Company does not receive, as of the Announcement Date, updated
Company Fairness Opinions from First Boston and Lazard to the effect that,
as of the Announcement Date, the consideration to be received in the Recapitalization
by the Company's stockholders is fair to the Company's stockholders from
a financial point of view. Subject to Section 5.4, the directors of the
Company shall recommend the approval and adoption of the Shareholder Vote
Matters by the Company's stockholders and shall use its best efforts (as
defined in Section 7.1) in soliciting such approval. Subject to Section
5.4, in connection with such meeting, the Company (i) will promptly prepare
and file with the SEC, will use its best efforts to have cleared by the
SEC and will, subject to the effectiveness of the Registration Statement,
thereafter mail to its stockholders as promptly as practicable, the Company
Proxy Statement (including the information required by the Schedule 13E-3)
and all other proxy materials for such meeting, (ii) will use its best
efforts to obtain the necessary approvals by its stockholders of the Shareholder
Vote Matters and (iii) will otherwise comply with all legal requirements
applicable to such meeting. A reasonable period of time prior to the initial
filing of (or the filing of any amendment of supplement to) any of the
Company Proxy Statement, the Registration Statement, the Underwriting Registration
Statements, the Schedule 13E-3 or any other Company Disclosure Document,
the Company shall provide to each of the Unions, in accordance with the
notice provisions contained in Section 10.1, a copy of the same. The Company
shall provide the Unions with a reasonable opportunity to review and comment
on each of such documents prior to such filing with a view toward the production
and filing of mutually acceptable documents, subject to (1) the Company's
responsibilities under applicable securities laws and (2) other applicable
legal requirements.
SECTION 5.3 Access. Subject to the absence of a material
breach of Section 6.1, from the date hereof until the Effective Time, the
Company will give each Union, its counsel, financial advisors, auditors
and other designated representatives reasonable access following reasonable
notice during normal business hours (which access shall be coordinated
through a person designated by the Company, which person (or another authorized
person) shall be available during normal business hours) to the offices,
employees, properties, books and records of the Company and the Subsidiaries,
will furnish, if reasonably requested, to each Union, its counsel, financial
advisors, auditors and other authorized representatives such financial
and operating data and other information in connection with the Agreement
and the transactions contemplated hereby as such persons may reasonably
request and will instruct the Company's officers, employees, counsel and
financial advisors to cooperate reasonably with each Union and each Union's
counsel, financial advisors, auditors and other designated representatives
in their investigation of the business of the Company and the Subsidiaries
and to take such steps as may be reasonably requested by each Union and
such counsel, advisors, auditors and other representatives to assist them
in connection with the transactions contemplated by this Agreement; provided
that no investigation pursuant to this Section shall affect any representation,
warranty, covenant or agreement made by the Company to each Union under
this Agreement. Each Union, its counsel, financial advisors, auditors and
other designated representatives shall conduct themselves under this Section
5.3 so as not to interfere with the day-to-day operations of the Company.
SECTION 5.4 Other Potential Transactions.
The Company shall not, directly or indirectly, encourage, solicit,
participate in or initiate discussions or negotiations with, or provide
any information to, any corporation, partnership, person or other entity
or group (other than the Unions or their advisors or the ESOP Trustee or
its advisors) concerning any merger, sale of assets, sale of, or tender
or exchange offer for, shares of capital stock or similar transaction,
involving a change of control of the Company or all or substantially all
of the assets of the Company (an "Acquisition"), except as set forth below.
The Company may, directly or indirectly, furnish information and access,
in each case in response to an unsolicited request therefor, to the same
extent permitted by Section 5.3 hereof, to any corporation, partnership,
person or other entity or group pursuant to appropriate confidentiality
agreements, and may participate in discussions and negotiate with such
entity or group concerning any such transaction, if the entire Board of
Directors of the Company (the "Board") (and, to the extent a director is
a participant in an alternative Acquisition, the disinterested members
of the Board) determine in their good faith judgment, upon advice of independent
legal and financial advisors (who may be the Company's regularly engaged
independent legal and financial advisors), that such action is required
by their fiduciary duties. In addition, the Company's officers and other
appropriate personnel may take such steps as are necessary or appropriate
to provide the Board with sufficient information to make an informed decision
concerning the matters described in the previous sentence and, if the Board
so determines that such actions are required by their fiduciary duties,
the Company may direct its officers and other appropriate personnel to
cooperate with and be reasonably available to consult with any such entity
or group which were the subject of such determination. Nothing herein shall
prevent the Board from taking, and disclosing to the Company's shareholders,
a position contemplated by Rules 14d-9 and 14e-2 promulgated under the
1934 Act with respect to any tender offer or from making such other disclosure
to shareholders or taking such other action which, in the judgment of the
Board, upon advice of such counsel, is required by law to discharge any
fiduciary duty imposed thereby.
SECTION 5.5 Notices of Certain Events.
The Company shall notify each Union of, and provide to each Union all
relevant details relating to, and documentation submitted to or by the
Company in respect of, (i) any notice or other communication from any person
alleging that the consent of such person is or may be required in connection
with the transactions contemplated by this Agreement, (ii) any notice or
other communication from any governmental or regulatory agency or authority
in connection with the transactions contemplated by this Agreement and
(iii) any proposal for, or contacts and expressions of interest relating
to, an Acquisition or other matter contemplated by Section 5.4 and action
taken by the Company in respect thereof.
SECTION 5.6 Amendment of Rights Agreement.
The Company shall amend the Rights Agreement, effective immediately
prior to the Effective Time, in accordance with the Rights Amendment and
to provide that each outstanding share of ESOP Convertible Preferred Stock
following the Effective Time, as well as each Available Unissued ESOP Share
(as defined in Article FIFTH, Section 1.5 of the Restated Certificate),
shall have associated with it and represent that number of Rights (as defined
in the Rights Agreement) as would be associated with the number of New
Shares into which the relevant share of ESOP Convertible Preferred Stock
is then convertible and to cause such Rights to be exercisable by, and
to cause separate certificates representing such Rights to be distributed
to, and be separately transferable by, holders of shares of ESOP Convertible
Preferred Stock (and Available Unissued ESOP Shares) at the time and upon
terms substantially the same as those applicable to the holders of New
Shares.
SECTION 5.7 Employee Benefit Plans.
The Company shall take such action to amend, in form reasonably satisfactory
to each Union, the directed account plans and 401(k) plans maintained by
the Company or United for the benefit of employees, and shall take all
other reasonable action, so as to permit investment of the funds held thereunder
at the individual direction of the beneficiaries of such plans to purchase
the Company's common stock, preferred stock, Depositary Shares and/or debt
securities in the open market, subject to rules and regulations under the
1934 Act. The Company shall take such action to amend the stock purchase
plans maintained by the Company or United for the benefit of employees
so as to require the distribution of the consideration received upon redemption
of the Redeemable Preferred Stock in accordance with Section 1.3 to be
received by such plans in the Reclassification, or the cash proceeds from
the sale thereof, to participants, subject to applicable law. Consistent
with existing Company policy with respect to purchases of Old Shares, the
aforementioned plan amendments to the directed account plans and the 401(k)
plans, and the stock purchase plans, shall permit employees of the Company
and United following the Effective Time to acquire, in addition to amounts
held in the ESOPs, the following securities: (X) up to the lesser of (i)
30% of the outstanding New Shares held by persons other than the ESOPs
and (ii) 20% of the aggregate number of outstanding New Shares and New
Shares issuable upon conversion of the ESOP Preferred Stock outstanding
or issuable to Sections 1.6 or 1.10 hereof (including Available Unissued
ESOP Shares) and (Y) except with respect to the stock purchase plan, up
to (i) 20% of the outstanding Depositary Shares, (ii) 20% of the outstanding
principal amount of Series A Debentures and (iii) 20% of the outstanding
principal amount of Series B Debentures; subject to the following additional
limits: (A) no employee group of the Company or its Subsidiaries (which,
for this purpose, shall mean employees represented by each of ALPA, the
IAM, and the AFA (as defined in Section 7.3) and the Salaried and Management
Employees (as defined in Section 5.8(b)) (each, an "Employee Group") may
individually acquire more than 10% of the outstanding shares or amount
of any class of securities referred to in clause (X) and (Y) above through
such plans; (B) in the case of the directed account plans, no Employee
Group may individually acquire more than 2% of the outstanding shares or
amount of any such class of securities in any monthly subscription period
through such plans; (C) no Employee Group may individually acquire more
than 2% of the outstanding New Shares held by persons other than the ESOPs
(in addition to New Shares received in the Reclassification) through such
plans during the six month period beginning at the Effective Time; and
(D) no New Shares may be acquired through such plans during the six month
period ending on the last day of the Measuring Period, as defined in Section
1.10.
The Company shall not be required to expand the scope of any third party
indemnity in a manner adverse to the Company in order to implement the
amendments referred to in clause (Y) above.
(b) The Company shall also establish and cause United to establish appropriate
employment terms for the employees of the Company and United who perform
the functions currently performed by the salaried and management employees
of the Company and United (including any functions which such group of
employees begin performing in the future) (the "Salaried and Management
Employees"), in form and substance as set forth on Schedule 5.8(iii), effective
at the Effective Time. From and after the date hereof, the Company shall
provide the Unions and their respective counsel, financial advisors, auditors
and other representatives with the access and information necessary to
confirm the Company's continuing implementation of the provisions of this
Section 5.8(b).
SECTION 5.9 Solvency Letter. The
Company has retained American Appraisal Associates (the "Appraiser") to
provide, at or prior to the Effective Time, opinion in writing to the Company
and the Board substantially similar to the letter set forth on Schedule
5.9 (the "Solvency Letter"). If the Solvency Letter is delivered to the
effect that sufficient surplus is available to permit the consummation
of the Recapitalization consistent with Delaware Law, the Board shall take
all lawful and appropriate action, effective as at the Effective Time,
to revalue the Company's assets and liabilities to permit the consummation
of the Recapitalization in accordance with Delaware Law.
SECTION 5.10 Other Transaction Documents.
The Company hereby agrees that at the Effective Time it will execute
the form of employment agreement (the "Employment Agreement") between the
Company and Gerald Greenwald in the form attached to the agreement (the
"Retention Agreement") between the Unions and Gerald Greenwald providing
for his employment by the Company from and after the Effective Time on
the terms set forth in the Employment Agreement. The Comply hereby agrees
from and after execution by Gerald Greenwald of the Employment Agreement
at the Effective Time to perform all of its obligations, whether or not
due and owing, under the Employment Agreement. The Retention Agreement
may not be amended without the written consent of the Company. A true and
correct copy of the Retention Agreement (with the attached form of the
Employment Agreement) has been delivered by the Unions to the Company.
In addition, immediately prior to the Effective Time, the Company shall
execute and deliver (or shall have theretofore executed and delivered)
the following documents and agreements: the Officers' Certificate relating
to the Indenture, the Deposit Agreement, the initial ESOP Stock Purchase
Agreement, the ESOP Trusts, the Exchange Agent Agreement, the Rights Amendment,
the Class I Preferred Stock Subscription Agreement, the Class Pilot MEC
Preferred Stock Subscription Agreement, the Class IAM Preferred Stock Subscription
Agreement, the Class SAM Preferred Stock Subscription Agreement, a shareholders
agreement with the initial Independent Directors in form and substance
as set forth on Schedule 5.10 (i) (the "Class I Preferred Stock Shareholders
Agreement"), a shareholder agreement with the holders of the Class SAM
Preferred Stock in form and substance as set forth on Schedule 5.10(ii),
and a First Refusal Agreement between the Company, the Unions and the SAM
Director, in form and substance as set forth on Schedule 5.10(iii) (collectively,
the "Closing Agreements").
SECTION 5.11 Certain Agreements. Without
limiting in any respect the Company's and United's rights or obligations
under any other agreement, arrangement or understanding to which it is
a party, the Company specifically confirms, and shall cause United to confirm,
their respective obligations under the employee and director benefit plans,
agreements, policies and arrangements maintained by the Company and/or
United or to which the Company and/or United is a party, in each case as
in effect on the date hereof (subject to revision in accordance with Section
5.1), identified in a letter to the Unions dated the date hereof (the "Officer
and Director Arrangements"); provided, that the provisions of this Section
5.11 (a) shall be subject to Section 5.1 prior to the Effective Time and
(b) shall not restrict the Company's or United's ability to terminate,
revise or replace any Officer and Directors Arrangements after the Effective
Time so long as such action does not reduce or otherwise adversely affect
rights of any beneficiary under any such Officers and Directors Arrangements
that the Company or United is obligated to provide following the Effective
Time without his or her consent.
SECTION 6.1 Confidentiality.
(b) Each Union shall limit access to the Confidential Information to
its officials and Representatives who in the reasonable judgment of such
Union need to know the Confidential Information for purposes of participating
in making decisions concerning, or advising it with respect to, the Confidential
Information ("informed officials and Representatives"). Disclosure of Confidential
Information may be made only to officers, directors, employees, accountants,
counsel, consultants, advisors and agents of one of the Unions who executes
a Confidentiality Statement (a "Representative"), in the form attached
either to this Agreement as Schedule 6.1 or as an attachment to a confidentiality
agreement between the Company and such Union entered into prior to the
date hereof (a "Confidentiality Statement"). An executed original of each
such Confidentiality Statement shall be provided to the Company by the
Union obtaining it. Each Union and its Representatives tray discuss with
the informed officials and Representatives of each other Union the Confidential
Information which such Union has been provided pursuant to this Agreement
or any prior confidentiality agreement between the Company afar such Union
relating to the Confidential Information provided that such Confidential
Information shall continue to be subject to this Agreement and any other
applicable confidentiality agreement. In all events, each Union shall be
responsible for any actions by its Representatives which are not in accordance
with the provisions hereof and of any Confidentiality Statement executed
by a Representative but shall not be responsible for such actions of any
informed official or Representative of the other Union. ..
(c) In the event that a Union, its Representatives or anyone to whom
a Union or its Representatives supply Confidential Information are requested
or required through legal process (by oral questions, interrogatories,
requests for information or documents, subpoena, civil investigative demand,
any informal or formal investigation by any government or governmental
agency or authority or otherwise) to disclose any Confidential Information,
the Union will, upon learning of such request or requirement, (i) immediately
notify the Company of the existence, terms and circumstances surrounding
such a request, (ii) consult with the Company on the advisability of taking
legally available steps to resist or narrow such request and (iii) if disclosure
of such information is required, furnish only that portion of the Confidential
Information which, in the opinion of the Union's legal counsel, it is legally
compelled to disclose and cooperate with any action by the Company to obtain
an appropriate protective order or other reliable assurance that confidential
treatment will be accorded the Confidential Information.
(d) Except in respect of any Confidential Information that is in this
Agreement (or may in the future be) the subject of an express representation
by the Company, (i) neither the Company nor its employees, agents, affiliates
or representatives (collectively hereinafter referred to as the "Company
Representatives") makes any express or implied representation as to the
accuracy or completeness of the Confidential Information and (ii) each
Union and its Representatives agree that neither the Company nor any Company
Representative shall have any liability to such Union or its Representatives
resulting from the use by such Union or its Representatives of Confidential
Information. So long as neither Union is in material breach of its obligations
under this Section 6.1, nothing in this Section 6.1(d) is intended to limit
Section 5.3.
(e) Each Union hereby acknowledges that it is aware, and that it will
advise its Representatives who are informed in accordance with the terms
of this Agreement, as to the matters which are the subject of this Agreement,
that the United States securities laws prohibit any person who has received
from an issuer material, non-public information concerning the matters
which are the subject of this Agreement from purchasing or selling securities
of such issuer due to the receipt of Confidential Information or from communicating
such information to any other person under circumstances in which it is
reasonably foreseeable that such person is likely to purchase or sell such
securities due to the receipt of Confidential Information.
(f) Each Union expressly acknowledges that (i) the preservation of the
confidentiality of the Confidential Information has highly important commercial
significance for the Company and (ii) its unauthorized disclosure could
have serious and irreparable adverse commercial, financial and legal consequences
for the Company. It accordingly agrees that the Company shall be entitled
to injunctive relief to prevent breaches of this Agreement and to specifically
enforce the terms and provisions of this Section, in addition to any other
remedy to which the Company may be entitled, at law or in equity or pursuant
to this Agreement.
(g) Each Union and its Representatives hereby acknowledge that the Confidential
Information is being furnished to them solely in connection with a review
in connection with the transactions contemplated by this Agreement and
analysis of the Company's business and financial condition and none of
such Unions or their Representatives shall use the Confidential Information
other than in connection with such review and analysis and potential responses
thereto made directly to the Company (which may be discussed among and
be made by the Unions). No right or license, express or implied, under
any patent, copyright, trademark, trade secret, or other proprietary right
in the Confidential Information is granted hereunder by United to a Union
or its Representatives.
(h) Each Union will keep a record of the location of the Confidential
Information. If the Agreement is terminated prior to the Effective Time,
each Union agrees for itself and for its Representatives who reviewed the
Confidential Information, to return to the Company or destroy all documents
reflecting the Confidential Information and to certify in writing to the
Company that such documents have been so returned or destroyed.
SECTION 6.2 Labor Agreements. Such
Union shall execute and deliver, at the Effective Time, the relevant Labor
Agreement.
SECTION 6.3 No Public Director Nominations.
Such Union shall not, directly or indirectly, nominate or cause to
be nominated any individual for election as an Outside- Public Director
(as defined in Article FIFTH, Section 2.3 of the Restated Certificate)
of the Company; provided, however, that any such nomination by an
employee of the Company or United, acting in his or her individual capacity
as a shareholder of the Company, shall not be deemed to violate this Section
6.3 so long as such nomination was not made with the advice, support, or
assistance of any officer of such Union.
SECTION 6.4 Independent Director Vacancies.
The Unions agree to use their best efforts to cause any Independent
Director vacancy resulting after the Effective Time promptly to be filled
in accordance with Article FIFTH, Section 4.1.6 of the Restated Certificate.
AND THE COMPANY
SECTION 7.2 Certain Filings. The
Company and each of the Unions shall cooperate with one another (a) in
connection with any preparation of the Company Disclosure Documents, the
Company Proxy Statement, the Schedule 13E-3, the Registration Statement
and the Underwriting Registration Statements, (b) in determining whether
any action by or in respect of, or filing with, any governmental body,
agency, official or authority is required, or any actions, consents, approvals
or waivers are required to be obtained from parties to any material contracts,
permits, licenses and franchises, in connection with the consummation of
the transactions contemplated by this Agreement and (c) in seeking any
such actions, consents, approvals or waivers or making any such filings,
furnishing information required in connection therewith or with the Company
Disclosure Documents, the Company Proxy Statement, the Schedule 13E-3,
the Registration Statement or the Underwriting Registration Statements,
and seeking timely to obtain any such actions, consents, approvals or waivers.
As soon as practicable after the date hereof, the Company shall, in accordance
with Section 5.2, (a) file with the SEC the Company Proxy Statement, the
Schedule 13E-3 and the Registration Statement, (b) obtain and furnish the
information required to be included therein, (c) after consultation with
each Union, respond promptly to comments made by the SEC with respect to
the Company Proxy Statement, the Schedule 13E-3 and Registration Statement
and any preliminary version thereof and (d) cause the Registration Statement
to become effective and the Company Proxy Statement to be mailed to the
Company's stockholders at the earliest practicable date. Prior to the effective
date of the Registration Statement, the Company shall obtain all necessary
state securities laws or "blue sky" permits and approvals required to carry
out the Recapitalization and the transactions contemplated by this Agreement.
SECTION 7.3 Participation. If,prior
to the Effective Time, the Association of Flight Attendants ("AFA") agrees
to provide, in the sole judgment of the Company, an investment equal to
$416 million (present value in January 1994 dollars for a five year AFA
mainline investment and a twelve year AFA Competitive Action Plan (as defined
in Schedule 1.1) investment and assuming semi-annual payments, first period
not discounted, and annual discount rate of 10%) then, provided that the
parties hereto agree upon all aspects of the AFA's participation in the
transactions contemplated hereby (e.g. governance provisions set forth
in Schedule 1.1, ESOP provisions set forth in Section 1.6 and related schedules)
other than the matters described in clauses (i) and (ii) below, the parties
hereto shall revise all applicable documents such that (i) the employee
investment period with respect to ALPA, IAM and salaried and management
employees shall be reduced by nine months; and (ii) 12.62% of the ESOP
Preferred Stock otherwise to be allocated to ALPA-represented employees,
IAM-represented employees and Salaried and Management Employees (the "Allocated
Shares") shall be made available for allocation to the AFA-represented
employees, such that after such allocation, 40.4% of the Allocated Shares
shall be allocated to ALPA-represented employees, 32.44% of the Allocated
Shares shall be allocated to the IAM-represented employees, 14.54% of the
Allocated Shares shall be allocated to the Salaried and Management Employees
and 12.62% of the Allocated Shares shall be allocated to the AFA-represented
employees.
(ii) any applicable waiting period under the HSR Act relating to the
Recapitalization shall have expired or been terminated;
(iii) the Registration Statement shall have become effective under the
1933 Act and shall not be the subject of any stop order or governmental
proceedings seeking a, stop order;
(iv) all material actions by or in respect of or filings with any governmental
body, agency, official, or authority required to permit the consummation
of the Recapitalization shall have been obtained;
(v) the New Shares issuable as part of the Recapitalization (including
New Shares issuable upon conversion of the ESOP Preferred Stock and upon
conversion of the Convertible Company Securities) shall have been authorized
for listing on the NYSE subject to official notice of issuance;
(vi) there shall have been no change in Delaware Law enacted or any
applicable decision of a court of competent jurisdiction decided after
the date hereof and prior to the Effective Time that would cause the Restated
Certificate or Restated Bylaws to fail to comply in any material respect
with the applicable provisions of Delaware Law;
(vii) the ESOP Trustee shall have received the written opinion of Houlihan,
Lokey, Howard & Zukin to the effect that, as of the Effective Time,
the acquisition of the ESOP Preferred Stock pursuant to Section 1.6(d)
hereof by the ESOPs is fair, from a financial point of view, to the ESOP
participants;
(viii) the Board of Directors of the Company shall have received the
Solvency Letter; and
(ix) (A) there shall not be instituted or pending any action, proceeding,
application, claim, or counterclaim by any United States federal, state
or local government or governmental authority or agency, including the
DOT, before any court or governmental regulatory or administrative agency,
authority or tribunal, which (x) restrains or prohibits or is reasonably
likely to restrain or prohibit the making or consummation of, or is reasonably
likely to recover material damages or other relief as a result of, the
Recapitalization, or the receipt by holders of the Old Shares of the full
amount of the Recapitalization Consideration, or restrains or prohibits
or is reasonably likely to restrain or prohibit the performance of, or
is reasonably likely to recover material damages or other relief as a result
of, this Agreement or any of the transactions contemplated hereby or (y)
prohibits or limits or seeks to prohibit or limit the ownership or operation
by either Union, the ESOP Trustee, any of the ESOPs or any participant
therein of all or any substantial portion of the capital stock, business
or assets of the Company or any of its Subsidiaries or compels or seeks
to compel either Union, the ESOP Trustee, any of the ESOPs or any participant
therein to dispose of or hold separate aA or any substantial portion of
the capital stock, business or assets of the Company or any of its Subsidiaries
or imposes or seeks to impose any material limitation on the ability of
either Union, the ESOP Trustee, any of the ESOPs or any participant therein,
to conduct such business or own such assets, (B) there shall not have been
instituted or be pending any action, proceeding, application, claim or
counterclaim by any other person, before any such body, that is reasonably
likely to result in any of the consequences referred to in clauses (A)(x)
or (A)(y) above, and (C) there shall not be any United States federal,
state or local statute, rule, regulation, decree, order or injunction promulgated,
enacted, entered, or enforced by any United States federal, state or local
government agency or authority or court, that has any of the effects referred
to in clauses (A)(x) or (A)(y) above;
(x) all conditions to the obligations of the parties to the Closing
Agreements to consummate such transactions shall have been satisfied or
are capable of being satisfied concurrently upon the occurrence of the
Effective Time;
(xi) the Closing Agreements shall be legal, valid and binding agreements
of the Company and the other parties thereto from and after the Effective
Time, enforceable against the Company and such other parties in accordance
with their terms; and
(xii) Gerald Greenwald (or such other person as shall be proposed by
the Unions prior to the Effective Time and not found unacceptable by the
Company) shall be ready, willing and able to assume the office of Chief
Executive Officer of the Company and United.
(ii) the representations and warranties of the Company set forth in
this Agreement shall be true and correct, both individually and- collectively,
in all material respects at and as of the Effective Time as if made at
and as of such time; provided that the representations and warranties of
the Company set forth in Section 3.10 and each representation and warranty
of the Company set forth in this Agreement that is qualified by a "materiality"
or similar standard (including, Material Adverse Effect), shall be true
in all respects (taking into account all "materiality" and similar qualifications
(including; Material Adverse Effect) contained in such representation or
warranty) at and as of the Effective Time, as if trade at and as of such
time.
(ii) the representations and warranties of the Unions set forth in this
Agreement shall be true and correct, both individually and collectively,
in all material respects at and as of the Effective Time as if made at
and as of such time; provided that each representation and warranty of
the Unions set forth in this Agreement that is qualified by a "materiality"
or similar standard shall be true in all respects (taking into account
all "materiality" and similar qualifications contained in such representation
or warranty) at and as of the Effective Time, as if made at and as of such
time;
(iii) the Board of Directors of the Company shall have received the
written opinions of each of First Boston and Lazard, each dated as of the
Announcement Date, confirming their earlier opinions, to the effect that
the Recapitalization is fair from a financial point of view to the holders
of Old Shares; and
(iv) the Labor Agreements shall have been executed and delivered by
the Unions and shall be in full force and effect as of the Effective Time.
(v) the Board of Directors of the Company shall have received the written
opinions of Skadden, Arps, Slate, Meagher & Flom to the effect that
(A) when issued, all New Shares, all Depositary Shares and all shares of
Public Preferred Stock represented thereby will be duly authorized, validly
issued, fully paid and nonassessable, (B) the revaluation of the Company's
and United's assets contemplated by Section 5.9 hereof may be effected
in connection with the Recapitalization consistent with Delaware Law, (C)
when issued, the Debentures will be validly issued and enforceable obligations
of United, (D) the consummation of the transactions contemplated by Section
1.6(d) hereof will not result in a non-exempt prohibited transaction under
Section 4975(c)(1) of the Internal Revenue Code of 1986, as amended (the
"Internal Revenue Code"), or Section 406(a) of the Employee Retirement
Income Security Act of 1974, (E) the Recapitalization and Reclassification
will not result in the recognition of income, gain or loss to the Company
for United States federal income tax purposes and (F) the contributions
made by the Company to the ESOPs and, assuming the Company has sufficient
earnings and profits, the dividends paid on the ESOP Preferred Stock that,
in each case, are used to repay the debt evidenced by the ESOP Note issued
in connection with the transactions contemplated by Section 1.6(d) hereof
will be deductible under Section 404 of the Internal Revenue Code;
(vi) the Company shall have determined that it is reasonably likely
to have sufficient earnings and profits such that, based on the opinion
of counsel described in Section 8.3(v)(F) above, the dividends paid on
the ESOP Preferred Stock that are used to repay the debt evidenced by the
ESOP Note issued in connection with the transactions contemplated by Section
1.6(d) hereof are reasonably likely to be deductible under Section 404
of the Internal Revenue Code; and
(vii) the Company shall have determined that the Company will be reasonably
likely to have sufficient surplus (whether revaluation surplus or earned
surplus) or net profits under Delaware Law to permit the legal payment
of dividends on the ESOP Preferred Stock and the Public Preferred Stock
when due.
(c) by either Union if (i) the Board shall have withdrawn or modified
in a manner materially adverse to such Union its approval or recommendation
of the Recapitalization or the Shareholder Vote Matters or shall have recommended,
or shall have failed to recommend against, another Acquisition, (ii) the
Board shall have resolved to do any of the foregoing, (iii) the Company
shall have breached, either individually or collectively, in any material
respect any of its material representations, warranties, covenants or other
agreements contained in this Agreement, (iv) any person shall have acquired
"beneficial ownership" (as defined in the Rights Agreement) or the right
to acquire beneficial ownership of, or any "group" (as such term is defined
in Section 13(d) of the Exchange Act and the rules and regulations promulgated
thereunder) shall have been formed which beneficially owns, or has the
right to acquire beneficial ownership of, more than 15% of the then outstanding
Old Shares, or shall have become an "Acquiring Person" under the Rights
Agreement, or (v) there shall have occurred a "Share Acquisition Date"
or "Distribution Date" under the Rights Agreement; or
(d) by the Company if (i) either Union shall have breached, either individually
or collectively, in any material respect any of its material representations,
warranties, covenants or other agreements contained in this Agreement or
(ii) the Board, in accordance with Section 5.4, shall have withdrawn or
modified in a manner adverse to either Union its approval or recommendation
of the Recapitalization or shall have recommended another Acquisition,
or shall have resolved- to do any of the foregoing.
SECTION 9.3 Effect of Termination.
Except as provided in the next sentence, if this Agreement is terminated
pursuant to Section 9.1 or 9.2, this Agreement shall become void and of
no effect with no liability on the part of any party hereto, except that
the agreements contained in Sections 6.1, 9.3 and 10.4 shall survive the
termination hereof. Notwithstanding the preceding sentence, if the failure
of the Effective Time to occur on or prior to the Outside Termination Date
results directly from either (i) a material breach of a specific material
representation or warranty contained in this Agreement by one of the parties
hereto under circumstances where the breaching party had actual knowledge
at the date of this Agreement that such representation or warranty was
materially false or misleading or (ii) a material breach of a specific
material covenant (a breach described in clause (i) or (ii), as modified
by proviso (A) hereto, being called a "Willful Breach"), and one of the
other parties hereto has established, as determined by a court of competent
jurisdiction, that such Willful Breach has occurred, the breaching party
shall be liable to the other parties hereto for proximate and provable
damages resulting from such Willful Breach (which shall include the reasonable
fees and expenses of such non-breaching parties, including reasonable attorney's
fees and expenses, incurred in connection with the transactions contemplated
hereby other than in connection with any litigation or other dispute between
or among parties hereto); provided (A) to the extent that the material
breach of a specific material covenant is not determinable solely by an
objective fact (e.g. any best efforts obligation or requirement of reasonableness)
such breach shall be actionable hereunder only if the breaching party knew
(or demonstrated reckless disregard for whether) its action or failure
to act was in violation of such covenant; and (B) such calculation of damages
shall not include consequential or punitive damages and shall be the sole
and exclusive remedy of the non-breaching parties in the event of a Willful
Breach. With respect to a Willful Breach, "knowledge" (or any corollary
thereof) or "reckless disregard" shall mean the knowledge or reckless disregard
of the senior executives or officials of the Company and United or the
Unions, as the case may be, each of whom shall conclusively be deemed to
have read this Agreement.
6400 Shafer Court
Suite 700
Rosemont, IL 60018
Telephone: (708) 292-1700
Telecopy: (708) 292-1760
Attention: Captain Roger D. Hall
1285 Avenue of the Americas
New York, NY 10019
Telephone: (212) 373-3000
Telecopy: (212) 757-3990
Attention: Stuart I. Oran, Esq.
330 West 42nd Street
New York, NY 10036
Telephone: (212) 563-4100
Telecopy: (212) 695-5436
Attention: Stephen Presser, Esq.
IAM Local 1487
321 Allerton Avenue
San Francisco, CA 94080
Telephone: (415) 873-0662
Telecopy: (415) 873-1676
Attention: Ken Theide
3500 W. Olive, Suite 1100
Burbank, CA 91505
Telephone: (818) 973-3200
Telecopy: (818) 973-3201
Attention: Robert A. Bush, Esq.
Lowenstein Sandler Kohl Fisher & Boylan
65 Livingston Avenue
Roseland, New Jersey 07068
Telephone: (201) 992-8700
Telecopy: (201) 992-5820
Attention: Peter H. Ehrenberg, Esq.
1200 E. Algonquin Road
Elk Grove Township, Illinois 60007
Telephone: (708) 956-2400
Telecopy: (708) 952-4683
Attention: Stephen M. Wolf and
919 Third Avenue
New York, NY 10022
Telephone: (212) 735-3000
Telecopy: (212) 735-2000
Attention: Peter Allan Atkins, Esq.
SECTION 10.2 Survival. The
representations and warranties contained herein and in any certificate
or other writing delivered pursuant hereto shall not survive the Effective
Time. The agreements of the parties contained herein and in any certificate
or other writing delivered pursuant hereto shall not survive the Effective
Time unless expressly provided in such agreement (it being understood that,
without limiting the survival of any other agreements contained herein
the survival of which is expressly provided for in such agreement, the
following agreements shall survive the Effective Time: Sections 1.2, 1.3,
1.5, 1.6, 1.7, 1.8, 1.9, 1.10, 2.3, 2.4, clause (iii) of the last sentence
of Section 5.1, 5.7, 5.8(b), 5.10, 5.11, 6.3, 6.4, 10.2 and 10.4) (all
such surviving agreements being referred to herein as the "Express Agreements").
Except with respect to any Collective Bargaining Agreement (as defined
in the Restated Certificate) and the Express Agreements, from and after
the consummation of each of the transactions contemplated to take place
at or about the Effective Time, each of the parties hereto (in their capacities
as such) fully releases, discharges, waives, and renounces (collectively
"Releases") any and all claims, controversies, demands, rights, disputes
and causes of action it may have had at or prior to the Effective Time
against, and agrees not to initiate any suit, action or other proceeding
involving, each of the other parties hereto, its officials, officers, directors,
employees, accountants, counsel, consultants, advisors and agents and,
if applicable, security holders relating to or arising out of this Agreement
or the transactions contemplated hereby (including, but not limited to,
matters contemplated under Section 5.11 and matters involving claims, controversies,
demands, rights, disputes or cause of action based on securities laws,
ERISA, common law tort theory or any other similar bodies of law); provided
that the foregoing Releases shall not apply to any claims, controversies,
demands, rights, disputes and causes of action arising from and after the
Effective Time (and based on facts and circumstances arising from and after
the Effective Time) under any of the documents, instruments or transactions
entered into, filed or effected in connection with the Recapitalization
(other than this Agreement, to the extent provided in this Section 10.2).
(b) No failure or delay by any party in exercising any right, power
or privilege hereunder shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights
and remedies herein provided shall be cumulative and not exclusive of any
rights or remedies provided by law.
SECTION 10.4 Fees and Expenses; Indemnification.
(a) Except as provided in the fee letter agreement, dated the date hereof,
among the Company and the Unions (the "Fee Letter"), or hereafter agreed
by the parties in writing or as set forth in this Section, all fees, costs
and expenses incurred in connection with this Agreement shall be paid by
the party incurring such fee, cost or expense. The parties agree that the
fees, costs and expenses of the Deadlock Firm and the Solvency Firm shall
be paid by the Company. The Company represents and agrees that the fees
of its principal financial and legal advisors to be incurred by the Company
in connection with the transactions contemplated by this Agreement other
than fees in connection with the underwriting described in Section 1.11
hereof shall not exceed $25 million.
(b) Upon the occurrence of a Triggering Event (as defined below), the
Company shall promptly pay to or at the direction of the Unions any amounts
the Company would otherwise have been required to pay pursuant to the Fee
Letter had the Effective Time occurred at the time of the occurrence of
such Triggering Event. Such amounts shall be exclusive of any amounts paid
or payable pursuant to indemnification or contribution arrangements. For
purposes of this paragraph (b), "Triggering Event" shall mean the occurrence
of each of the following: (i)(A) following the public announcement of a
proposal for an Acquisition, either the stockholders of the Company shall
not have approved the Shareholder Vote Matters at the Company Stockholder
Meeting or (B) the Board shall have withdrawn or modified in a manner materially
adverse to the Unions its approval or recommendation of the Recapitalization
or the Shareholder Vote Matters or shall have recommended, or failed to
recommend against, another Acquisition; (ii) subsequent to the stockholder
or Board action referred to in clause (i) above, this Agreement shall have
been terminated by the Company pursuant to Sections 9.1(b)(i) or 9.1(d)(ii)
or by either Union pursuant to Sections 9.1(b)(i) or 9.1(c)(i); and (iii)
within 12 months of the termination of the Agreement in accordance with
clause (ii) above, an Acquisition shall have been consummated.
(c) All amounts payable by the Company to either Union under this Section
10.4 shall be paid directly to such Union or directly to persons designated
in writing by such Union as such Union may specify.
(d) To the extent that the Company shall make payments to, or on behalf
of, either Union under this Section 10.4 and such Union is reimbursed by
another source (or otherwise receives a refund of the amount paid), such
Union shall return such amounts to the Company to the extent of such reimbursement
(or refund).
(e) The Company (the "Indemnitor") shall indemnify the Unions, their
controlling persons, and their respective directors, trustees, officers,
partners, affiliates, agents, representatives, advisors and employees (a
"Union Indemnified Person") against and hold each Union Indemnified Person
harmless from any and all liabilities, losses, claims, damages, actions,
proceedings, investigations or threats thereof (all of the foregoing, and
including expenses (including reasonable attorneys' fees, disbursements
and other charges) incurred in connection with the defense thereof, except
as set forth below, being referred to as "Liabilities") based upon, relating
to or arising out of the execution, delivery or performance of this Agreement
or the transactions contemplated hereby (including, without limitation,
the underwriting described in Section 1.11 hereof); provided, however,
that
the Indemnitor shall not be liable in any such case to the extent that
any such Liability arises out of any inaccurate information supplied by
any such Union Indemnified Person specifically for inclusion in the proxy
materials related to such transactions or any other filings made by the
Company or any Union Indemnified Person with any federal or state governmental
agency in connection therewith (including without limitation the prospectuses
relating to the underwriting described in Section 1.11 hereof) or if any
such Liability is finally judicially determined, not subject to further
appeal, to have resulted from bad faith, willful misconduct or negligence
on such Union Indemnified Person's part. Notwithstanding anything to the
contrary contained herein, "Liabilities" shall not include any losses,
claims, damages or expenses (including attorneys' fees, disbursements and
other charges) based upon, relating to or arising out of any action, claim,
proceeding, investigation or threat thereof (i) brought by a Union against
the other Union, (ii) brought by any employee of the Company or a subsidiary
of the Company, as such, represented by a Union or any member of a Union
(whether or not an employee of the Company or a subsidiary of the Company),
in his or her capacity as such, if, and only if, the underlying action,
claim, proceeding or threat is made against (1) his or her Union or (2)
against the other Union, (iii) brought by any Union or any Union Indemnified
Person against the Company or any controlling persons, directors, officers,
partners, agents, representatives, advisors or employees of the Company
(a "Company Related Person") or by the Company or any Company Related Person
against any Union or Union Indemnified Person or (iv) which arise primarily
as a result of acts by a Union Indemnified Person following the Effective
Time.
(f) In connection with the Indemnitor's obligation to indemnify for
expenses as set forth above in subsection (e) of this Section, the Indemnitor
further agrees to reimburse each Union Indemnified Person for all such
expenses (including reasonable attorneys' fees, disbursements and other
charges) as they are incurred by such Union Indemnified Person, provided,
however, that if a Union Indemnified Person is reimbursed hereunder for
any such expenses, such reimbursement of expenses shall be refunded to
the extent it is finally judicially determined, not subject to further
appeal, that the Union Indemnified Person is not entitled to indemnification
by reason of the proviso clause in the first sentence or the last sentence
of subsection (e) of this Section. The Company shall not be required to
reimburse any Union Indemnified Person for the reasonable attorney's
fees, disbursements or other charges of more than one counsel (plus local
counsel, if appropriate), or of more than one counsel (plus local counsel,
if appropriate) for any one Union (together with Union Indemnified Persons
who are controlling persons, directors, officers, partners, affiliates,
agents, representatives, advisors and employees of such Union) who can
be represented by common counsel so long as no conflict of interest or
different or additional colorable defenses are reasonably believed by such
Indemnified Persons to exist between or among them relative to the claims
asserted.
(g) Promptly after receipt by a Union Indemnified Person of notice of
any claim or the commencement of any action, proceeding or investigation
in respect of which indemnity or reimbursement may be sought as provided
in this Section, such Union Indemnified Person will notify the Indemnitor
in writing of the receipt or commencement thereof, but the failure to so
notify shall not relieve the Indemnitor from any obligation or liability
which it may have pursuant to this Section or otherwise except to the extent
that the Indemnitor is materially prejudiced thereby. In case any such
action, proceeding or investigation is brought or threatened against a
Union Indemnified Person, the Indemnitor will be entitled to participate
therein and, to the extent that it may wish, to assume the defense thereof,
with counsel selected by the Indemnitor and approved by the Union Indemnified
Person (such approval not to be unreasonably withheld). After notice from
the Indemnitor to such Union Indemnified Person of its election to assume
the defense thereof, the Indemnitor will not be liable to such Union Indemnified
Person for any legal expense subsequently incurred for services rendered
by any other counsel retained by such Union Indemnified Person in connection
with the defense unless such Union Indemnified Person, in the opinion of
its counsel, has colorable defenses which are different from or in addition
to defenses available to the Indemnitor or the Indemnitor has an interest
which conflicts with the interests of such Union Indemnified Person and
which makes separate representation advisable, in which event all legal
expenses of such Union Indemnified Person (subject to the last sentence
of subsection (f) above) shall continue to be paid by the Indemnitor. Notwithstanding.
Section 10.4(f), the indemnification provided for in this Section 10.4
shall include reimbursement for all expenses (including reasonable attorneys'
fees, disbursements and other charges) incurred by Union Indemnified Persons
to enforce their rights under this Section 10.4. The Indemnitor shall not
settle any action, claim, proceeding or investigation which is the subject
of this Section 10.4 without the prior written approval of the Union Indemnified
Person (such approval not to be unreasonably withheld), unless such settlement
involves solely the payment of money and the Indemnitor is not contesting
any right of a Union Indemnified Person to receive. indemnification hereunder.
References to Union Indemnified Persons shall in all cases include the
controlling persons, directors, officers, affiliates, agents, representatives,
advisors and employees of each Union Indemnified Person.
(h) If the indemnification provided for in this Section 10.4 is finally
judicially determined, not subject to further appeal, to be unavailable
to a Union Indemnified Person, then the Indemnitor shall, in lieu of indemnifying
such Union Indemnified Person, contribute to the amount paid or payable
in respect of any Liability by such Union Indemnified Person in such proportion
as shall be fair and equitable after taking into account the relative benefits
received by the parties, the relative fault of the parties and such other
equitable considerations as any court of competent jurisdiction shall determine.
For purposes of the preceding sentence, the benefits received by a Union
Indemnified Person that is an advisor shall not be deemed to exceed the
amount of fees payable to such Union Indemnified Person. The rights accorded
to the Indemnified Persons under this Section 10.4 shall be in addition
to any rights that any Union Indemnified Person may have at common law,
by separate agreement or otherwise.
(i) All rights to indemnification existing in favor of the present or
former directors, officers, employees, fiduciaries and agents of the Company
or any of its Subsidiaries (collectively, the "Company Indemnified Persons")
as provided in the Company's Certificate of Incorporation or By-laws or
other agreements or arrangements, or articles of incorporation or by-laws
(or similar documents) or other agreements or arrangements of any Subsidiary
as in effect as of the date hereof with respect to matters occurring at
or prior to the Effective Time shall survive the Effective Time and shall
continue in full force and effect. In addition, the Company shall provide,
for a period of not less than six years following the Effective Time, for
directors' and officers' liability insurance for the benefit of directors
and officers of the Company immediately prior to the Effective Time with
respect to matters occurring at or prior to the Effective Time by electing,
in its sole discretion, one of the two alternatives set forth below (which
election shall be reported to the Unions prior to the Effective Time):
(i) maintain for a period of not less than six years following the Effective
Time, the current policies of directors' and officers' liability insurance
with respect to matters occurring at or prior to the Effective Time, provided
that in satisfying its obligation under this clause (i), the Company shall
not be obligated to pay premiums in excess of 150% of the amount per annum
the Company paid for the policy year ending during calendar year 1994,
which amount has been disclosed to the Unions or (ii) purchase, prior to
the Effective Time, run-off coverage for the benefit of directors and officers
of the Company immediately prior to the Effective Time for matters occurring
at or prior to the Effective Time, which coverage shall provide for a separate
insurance pool for such directors and officers of at least $75 million
in coverage, provided, that in satisfying the obligations under this clause
(ii), the Company shall not pay in excess of an amount set forth in a letter
previously delivered by the Company to counsel to the Unions. The Company
shall also maintain for a period of not less than six years following the
Effective Time, the current fiduciaries' liability insurance with respect
to matters occurring at or prior to the Effective Time.
SECTION 10.5 Successors and Assigns. The
provisions of this Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and assigns; provided
that no party may assign, delegate or otherwise transfer any of its rights
or obligations under this Agreement without the written consent of the
other parties hereto. In the event the Company or any of its successors,
transferees or assigns (i) consolidates with or merges with or into any
other person and shall not be the continuing or surviving entity of such
consolidation or merger, (ii) transfers or conveys all or substantially
all of its properties or assets to any transferee or (iii) engages in any
similar transaction with any person, then, as a condition to the consummation
of such transaction, proper provision shall be made so the successor, transferee
or assignee of the Company pursuant to such transaction assumes the obligations
of the Company set forth in each of the Express Agreements.
SECTION 10.6 Governing Law. This
Agreement shall be construed in accordance with and governed by the law
of the State of Delaware, without regard to the conflicts of laws principles
thereof. The parties agree that this Agreement (including the Schedules
and other attachments hereto), other than Schedules 1.6(a)(i), 1.6(a)(ii),
1.6(a)(iii), 1.6(a)(iv), 5.8(i) and 5.8(ii) (to the extent
such Schedules relate to employees of the Company and its Subsidiaries
represented by the Unions), shall not be subject to the jurisdiction of
any System Board of Adjustment under the Railway Labor Act.
SECTION 10.7 Counterparts; Efectiveness.
This Agreement may be signed in any number of counterparts, each of
which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument. This Agreement shall become effective
when each party hereto shall have received counterparts hereof signed by
all of the other parties hereto.
SECTION 10.8 Parties in Interest. This
Agreement shall be binding upon and inure solely, other than the provisions
of Section 10.4, to the-benefit of the parties hereto, and, except for
the Express Agreements, nothing in the Agreement, express or implied, is
intended to confer upon any other person any rights, benefits or remedies.
With respect to the Express Agreements, the agreements set forth in the
following Sections are for the benefit of, and may be enforced by, the
following parties: Sections 1.2, 1.3, 1.5, 6.3 and 6.4: the holders
of New Shares; Section 1.7: holders of Options; Section 1.8: holders of
Company Convertible Securities; Sections 2.3 (other than the last sentence
thereof) and 5.11: officers and directors of the Company prior to the Effective
Time; the first sentence of Section 5.8(b): the ESOP Trustee; the first
sentence of Section 5.10: Gerald Greenwald; Section 10.4(c)-(h): Union
Indemnified Persons; and Section 10.4(i): Company Indemnified Persons.
SECTION 10.9 Specific Performance.
Prior to the Effective Time or the termination of this Agreement, the
parties agree that in the event a Willful Breach is established by a court
of competent jurisdiction, the other parties hereto shall be entitled to
specific performance of the terms hereof which were the subject of such
Willful Breach; provided, however, in no event shall such remedy
of specific performance in any way extend or modify the Outside Termination
Date. The parties acknowledge that in the event of a Willful Breach, irreparable
damage would occur, no adequate remedy at law would exist and damages would
be difficult to determine. No other remedy shall be available prior to
the Effective Time or the termination of this Agreement except that the
remedy of damages shall be available if such remedy (including the amount
of damages) would be available after termination pursuant to the terms
of Section 9.3 hereof.
SECTION 10.10 Entire Agreement. Except
as otherwise explicitly set forth in this Agreement, or in other writings
signed concurrently herewith, this Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof and supersedes
all other prior agreements and understandings, both written and oral, between
the parties with respect to the subject matter hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day
and year first above written.
By /S/ STEPHEN M. WOLF
Title: Chairman and Chief
Executive Officer
By /S/ ROGER D. HALL
Title: Chairman, UAL-MEC
INTERNATIONAL ASSOCIATION OF MACHINISTS AND AEROSPACE WORKERS
Name: Ken Thiede
Title: President and General Chairman, District Lodge 141
</TEXT>
</DOCUMENT>
<TYPE> EX-10.2
<TEXT>
<HTML>
SECOND AMENDMENT TO THE AGREEMENT
AND PLAN OF RECAPITALIZATION
Second Amendment (this "Amendment"), dated as of June 29,
1994, to the Agreement and Plan of Recapitalization (as amended,
the "Plan of Recapitalization"), dated as of March 25, 1994,
by
and among UAL Corporation, a Delaware corporation (the "Company"), Air
Line Pilots Association, International, pursuant to its authority as the
collective bargaining representative for the crafts or class of pilots
employed by United Air Lines, Inc., a Delaware corporation and a wholly-owned
subsidiary of the Company ("United"), and the International Association
of Machinists and Aerospace Workers, pursuant to its authority as the collective
bargaining representative for the crafts or classes of mechanics and related
employees, ramp and stores employees, food service employees, dispatchers
and security officers employed by United, as amended by the First Amendment
to the Plan of Recapitalization, dated as of June 2, 1994.
W I T N E S S ET H
WHEREAS, the parties hereto desire to amend the Plan of Recapitalization
and certain Schedules thereto; and
WHEREAS, Section 10.3 (a) of the Plan of Recapitalization permits amendments
to the Plan of Recapitalization and the Schedules thereto by written instrument
signed by all parties;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein, the parties hereto agree an follows:
1. Section 1.3 of the Plan of Recapitalization is hereby amended and
restated in its entirety in the form attached to this Amendment asExhibit
A.
2. Section 1.5(b) of the Plan of Recapitalization in hereby amended and restated in its entirety in the form attached to this Amendment as Exhibit B.
3. Section 1.11 of the Plan of Recapitalization is hereby amended and
restated in its entirety in the form attached to this Amendment as Exhibit
C.
4. Article FOURTH, Part I.D, Section 2.5 of the Restated Certificate
is hereby amended and restated in its entirety in the form attached to
this Amendment as Exhibit D.
Miscellaneous
A. Definitions. Capitalized terms used in this Amendment and
not defined herein shall have the meanings ascribed to them in the Plan
of Recapitalization or the Schedules or other attachments thereto.
B. Entire Plan of Recapitalization; Restatement. The Plan of
Recapitalization, as amended by this Amendment, is the entire agreement
of the parties with respect to the subject matter hereof and the parties
hereto hereby agree that the Plan of Recapitalization and all Schedules
thereto may be restated to reflect all amendments provided for in this
Amendment.
C. Governing Law. This Amendment shall be deemed to be made in
and in all respects shall be interpreted, governed by and construed in
accordance with the laws of the State of Delaware, without regard to the
conflicts of laws principles thereof.
D. Counterparts. This Amendment may be executed in counterparts,
each of which shall be an original and all of which shall together constitute
one and the same instrument.
Second Amendment to the Agreement
and Plan of Recapitalization
IN WITNESS WHEREOF, the parties hereto have caused
this Amendment to be executed by their respective officers thereunto duly
authorized on the date first above written.
By: /s/ Stephen M. Wolf
Name: Stephen M. Wolf
Title: Chairman and Chief
Executive Officer
AIR LINE PILOTS ASSOCIATION,
INTERNATIONAL
By: /s/ Roger D. Hall
Name: Roger D. Hall
Title: Chairman, UAL-MEC
INTERNATIONAL ASSOCIATION OF
MACHINISTS AND AEROSPACE WORKERS
By: /s/ Ken Thiede
Name: Ken Thiede
Title: President and
General Chairman,
District Lodge 141
EXHIBIT INDEX
SECTION 1.3 Redemption. Following the Effective Time, all
outstanding shares of Redeemable Preferred Stock shall, to the extent of
funds legally available therefor and subject to the provisions of the Restated
Certificate, be redeemed immediately after issuance according to the terms
thereof (the "Redemption"). Pursuant to the Redemption, the holders of
Redeemable Preferred Stock, if any, shall be entitled to receive, in respect
of each one one-thousandth of a share of Redeemable Preferred Stock, subject
to the terms thereof and Section 1. 5(f):
(iii) either (a) $15.55 principal amount of Series A Senior Unsecured Debentures due 2004 of United issued as provided below (the "Series A Debentures") or (b) if the Underwriting Alternative with respect to the Series A Debentures is consummated, a cash payment equal to the Series A Debenture Proceeds Amount (as defined in Section 1.11 below); and
(iv) either (a) $15.55 principal amount of Series B Senior Unsecured Debentures due 2014 of United issued as provided below (the "Series B Debentures" and, together with the Series A Debentures, collectively, the "Debentures") or (b) if the underwriting Alternative with respect to the Series B Debentures is consummated, a cash payment equal to
(ii) either (a) if the Underwriting Alternative with respect to Depositary
Shares representing interests in the Public Preferred Stock is not consummated,
for each Old Share formerly represented by such Old Certificate or Certificates
in respect of the Redemption, both (I) a cash payment equal to $12.20,
plus (II) a depositary receipt or receipts representing Depositary Shares
representing interests in a liquidation preference of Public Preferred
Stock equal to the excess of (xx) $31.10 over (yy) the product of $12.20
and a fraction (but in no event less than one) the numerator of which is
the Applicable Rate with respect to the Depositary Shares assuming that
the Underwriting Alternative with respect to the Depositary Shares is consummated,
and the denominator of which is 11.375%, or (b) if the Underwriting Alternative
with respect to the Depositary Shares is consummated, a cash payment equal
to the Depositary Share Proceeds Amount in respect of the Redemption;
(iii) either (a) $15.55 principal amount of Series A Debentures for each old Share formerly represented by such Old Certificate or Certificates in respect of the Redemption or (b) if the Underwriting Alternative with respect to the Series A Debentures is consummated, a cash payment equal to the Series A Debenture Proceeds Amount in respect of the Redemption;
(iv) either (a) $15.55 principal amount of Series B Debentures for each
Old Share formerly represented by such Old Certificate or Certificates
in respect of the Redemption or (b) if the Underwriting Alternative with
respect to the Series B Debentures is consummated, a cash payment equal
to the Series B Debenture Proceeds Amount in respect of the Redemption;
and
(v) a cash payment of $25.80 for each Old Share formerly represented
by such Old Certificate or Certificates in respect of the Redemption (the
cash and/or securities distributed pursuant to clauses (i) through (v),
collectively, the "Recapitalization Consideration").
Section 1.11 Underwriting Alternative
The Company has elected to pursue the underwriting of (a) a number of
Depositary Shares calculated as provided in the next sentence, (b) $382.5
million principal amount of Series A Debentures, subject to reduction as
described below, and (c) $382.5 principal amount of Series B Debentures,
subject to reduction as described below (referred to collectively herein
as the "Underwriting Alternative"), and the consummation of the underwritings
with respect to the Depositary Shares and the Debentures shall be in lieu
of issuing Depositary Shares and Debentures to holders of Old Shares pursuant
to Section 1.5 hereof, to holders of Options pursuant to Section 1.7 hereof
and to holders of Convertible Company Securities pursuant to Section 1.8
hereof. The number of Depositary Shares that shall be subject to the Underwriting
Alternative (which may be rounded up to produce an aggregate amount of
Depositary Shares that is consistent with customary aggregate underwriting
denominations) shall equal one twenty-fifth of the excess of (I)
the product of $765 million and a fraction (such fraction, which shall
in no event be greater than one, is referred to herein as the "Liquidation
Preference Fraction"), the numerator of which is 11.375%, and the denominator
of which is the Applicable Rate with respect to the Depositary Shares assuming
that the Underwriting Alternative with respect to the Depositary
Shares is consummated, over (II) $300 million. The Company shall use its
best efforts to accomplish such underwritings, including entering into
a firm commitment underwriting agreement or agreements, provided, however,
that the Company may elect to terminate the Underwriting Alternative at
any time prior to the Effective Time. The Unions will cooperate and use
their respective best efforts to facilitate the underwritings. The Underwriting
Alternative will be effected in accordance with customary underwriting
agreements which may reflect that, if the Company is advised by the managing
underwriter or managing underwriters that the Series A Debentures or Series
B Debentures would be priced in excess of the maximum price applicable
to such security (so that such security, if priced at the applicable Maximum
Pricing, could only be sold at less than par), and is further advised that
consistent with industry practice the Underwriting Alternative will be
facilitated by the sale of such securities at or closer to par, the Company
may reduce the amount of such securities to be sold and increase the interest
rate above the applicable Maximum Pricing so that such securities may be
sold at or closer to par, provided that (1) the yield to maturity
of the reduced par amount of Debentures will not exceed the yield to maturity
that would result if the unreduced par amount of such Debentures were priced
at a discount to par using the Maximum Pricing for the respective Debenture
and (2) the proceeds from the issuance of the reduced par amount of Debentures
will equal the proceeds that would result if the unreduced par amount of
such Debentures were priced at a discount to par using the Maximum Pricing
for the respective Debenture. If the Underwriting Alternative is consummated,
the amount of cash payable in respect of each Old Share shall equal the
sum of (i) $25.80 per share, (ii) the sum of $12.20 and the
gross proceeds (price to the public without deducting any underwriting
discount or other cost) received by the Company from the sale of the "Underwriting
Liquidation Preference" of Public Preferred Stock as represented by Depositary
Shares in the Underwriting Alternative (collectively, the "Depositary Share
Proceeds Amount"), (iii) the gross proceeds (price to the public without
deducting any underwriting discount or other costs) received by United
from the sale of each $15.55 principal amount of Series A Debentures in
the Underwriting Alternative (subject to adjustment as described in the
immediately preceding sentence, the "Series A Debenture Proceeds Amount")
and (iv) the gross proceeds (price to the public without deducting any
underwriting discount or other costs) received by United from the sale
of each $15.55 principal amount of Series B Debentures in the Underwriting
Alternative (subject to adjustment as described in the immediately preceding
sentence, the "Series B Debenture Proceeds Amount"). The "Underwriting
Liquidation Preference" shall equal the excess of (I) the product of $31.10
and the Liquidation Preference Fraction over (III) $12.20.
SERIES D REDEEMABLE PREFERRED STOCK]
$15.55 principal amount of Series B Debentures** and (iv) an additional $12.20 in cash and Depositary Shares representing interests in $ *** in liquidation preference of shares of Series B Preferred Stock, which Preferred Stock shall be issued in the name of the Depositary
pursuant to the Deposit Agreement and against which the Depositary shall issue Depositary Shares to the holder of the fraction of a share of the Series D Preferred Stock being redeemed, as provided in the Deposit Agreement,**** such Redemption Consideration to be distributed by the
Corporation in respect of each 1/1,OOOth of a share of Series D Preferred Stock to the holder thereof upon the redemption of such fraction of a share as provided in Section 6 hereof and as adjusted as provided in Section 6
hereof.
** If the Underwriting Alternative with respect to the Series B Debentures
is consummated, delete clause (iii), increase the cash payment in clause
(i) by the Series B Debenture Proceeds Amount and revise definitions as
appropriate.
*** Amount to be calculated in accordance with Plan of Recapitalization.
**** If the Underwriting Alternative with respect to the Depositary
Shares is consummated, delete clause (iv), increase the cash payment in
clause (i) by the Depositary Share Proceeds Amount and revise definitions
as appropriate.
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE> EX-10.4
<TEXT>
<HTML>
EMPLOYEE STOCK OWNERSHIP PLAN
(Effective as of July 12, 1994)
Table of Contents
|
Page
|
|
| PREAMBLE |
1
|
| SECTION 2 |
12
|
| 2.1 Eligibility for Participation |
12
|
| 2.2 Participation Not Guarantee of Employment |
12
|
| 2.3 Transferred Participants |
13
|
| SECTION 3 |
13
|
| 3.1 Employer Contributions |
13
|
| 3.2 Limitation on Contributions |
15
|
| 3.3 Timing of Contributions |
15
|
| 3.4 Participant Contributions |
15
|
| SECTION 4 |
15
|
| 4.1 Exclusive Benefit of Participants |
16
|
| 4.2 Investment in Company Stock |
16
|
| 4.3 Acquisition Loans |
16
|
| 4.4 Fiduciary Concerns |
16
|
| SECTION 5 |
17
|
| 5.1 Accounting for Allocations |
17
|
| 5.2 Allocation and Crediting of Participants' ESOPStock Accounts |
17
|
| 5.3 Allocation and Crediting of Participants' ESOPCash Accounts |
17
|
| 5.4 Allocation and Crediting of Employer Contributions |
18
|
| 5.5 Limitation on Allocations to Participants |
26
|
| 5.6 Valuations |
27
|
| SECTION 6 |
27
|
| SECTION 7 |
27
|
| 7.1 Pre-Retirement Diversification Rights |
27
|
| 7.2 Distributions on Account of Termination of Employment |
28
|
| 7.3 Manner and Form of Distributions |
28
|
| 7.4 Special Distribution Rules |
29
|
| 7.5 Direct Rollover |
30
|
| 7.6 Facility of Payment |
30
|
| 7.7 Interests Not Transferable |
31
|
| 7.8 Absence of Guaranty |
31
|
| 7.9 Designation of Beneficiary |
31
|
| 7.10 Missing Participants or Beneficiaries |
32
|
| 7.11 Qualified Domestic Relations Order |
32
|
| SECTION 8 |
32
|
| 8.1 Voting |
32
|
| 8.2 Control Transaction |
34
|
| 8.3 No Illegal Actions |
39
|
| SECTION 9 |
39
|
| 9.1 Right of First Refusal |
39
|
| 9.2 Put Option |
40
|
| 9.3 Share Legend |
40
|
| 9.4 Nonterminable Rights |
40
|
| SECTION 10 |
40
|
| 10.1 Class 1 Non-Voting Preferred Stock |
40
|
| 10.2 Other Dividends |
41
|
| 10.3 Special Allocated Share Rule |
42
|
| SECTION 11 |
42
|
| 11.1 General |
42
|
| 11.2 Membership and Authority |
42
|
| 11.3 Delegation by ESOP Committee |
46
|
| 11.4 Information To Be Furnished to ESOP Committee |
47
|
| 11.5 ESOP Committee's Decision Final |
47
|
| 11.6 Remuneration and Expenses |
47
|
| 11.7 Indemnification of the ESOP Committee |
47
|
| 11.8 Resignation or Removal of ESOP Committee Member |
48
|
| 11.9 Appointment of Successor ESOP Committee Members |
48
|
| 11.10 Interested ESOP Committee Member |
48
|
| 11.11 Compliance with Laws |
48
|
| 11.12 Expenses of the Plan and Trust |
48
|
| SECTION 12 |
49
|
| 12.1 Written Claim |
49
|
| 12.2 Notice of Denial |
49
|
| 12.3 Review Procedure |
49
|
| 12.4 Notices |
50
|
| SECTION 13 |
50
|
| 13.1 Amendment |
50
|
| 13.2 Termination |
51
|
| 13.3 Merger and Consolidation of Plan; Transferof Plan Assets |
51
|
| 13.4 Distribution on Termination |
52
|
| SECTION 14 |
52
|
| 14.1 Top-Heavy Provisions |
52
|
| 14.2 Amendments |
52
|
| 14.3 Super Top-Heavy Provisions |
53
|
| 14.4 Special Rule |
53
|
| SECTION 15 |
53
|
| 15.1 Qualification |
53
|
| 15.2 Reversions to Employer |
54
|
| 15.3 Governing Law |
54
|
| 15.4 Notices |
54
|
| 15.5 Evidence |
55
|
| 15.6 Action by Employer |
55
|
| 15.7 Execution |
55
|
| 15.8 Adjustments |
56
|
UAL CORPORATION
EMPLOYEE STOCK OWNERSHIP PLAN
(Effective as of July 12, 1994)
PREAMBLE
Nature of Plan
The Plan has been established to enable Eligible Employees of the Company and certain of its Affiliates to acquire stock ownership interests in the Company. The Plan is designed to invest exclusively in Company Stock (except for de minimis investments of cash pending investment in Company Stock or pending distribution to Participants) and, to the extent it is an employee stock ownership plan, primarily in "qualifying employer securities" (as defined in Code section 4975(e)(8)).
Subject to Section 13, the Plan is intended to be permanent and to benefit Eligible Employees of the Company and its participating Affiliates on the Effective Date, as well as the Eligible Employees entering employment thereafter.
The Plan consists of an employee stock ownership plan and a stock bonus plan. The employee stock ownership plan ("Part A" hereof) forms a part of the stock bonus plan, includes a money purchase pension plan and is intended to be qualified under Code sections 401(a) and 4975(e)(7). With respect to the portion of this Plan that is an employee stock ownership plan, as a single employee stock ownership plan: (i) the Initial Acquisition Loan and the Additional Acquisition Loans shall be a joint obligation of the component plans, (ii) the Plan shall not maintain separate Loan Suspense Accounts for the stock bonus and money purchase pension components, (111) dividends paid on Company Stock in either such component plan shall be used to repay the Initial Acquisition Loan and the Additional Acquisition Loans to the extent provided in the Plan, and (iv) separate Accounts shall not be maintained for Participants with respect to such component plans. The Trust holding the assets of the Trust Fund is intended to be exempt from taxation under Code section 501(a).
The Plan consists of two portions, a "leveraged" portion (Part A) that is intended to be an employee stock ownership plan and an "unleveraged" portion (Part B). Part A consists of both a stock bonus plan component and a money purchase pension plan component and Part B consists solely of a stock bonus plan component. Unless the context otherwise requires or unless specifically provided, all provisions of this Plan document shall apply to both Part A and Part B.
Transaction
The Plan is part of an overall program (which includes the Supplemental Plan) resulting in the acquisition by Eligible Employees of a majority ownership stake in the Company as contemplated by the Agreement and Plan of Recapitalization, among UAL Corporation and Air Line Pilots Association, International and International Association of Machinists and Aerospace Workers, as amended (the "Recapitalization Agreement"). Specifically, on the Effective Date, Eligible Employees will become entitled to receive 55% of the equity and voting power of the Company through the Trust and the Supplemental Trust. The overall program will be accomplished by the allocation to individual Participant accounts over the Wage Investment Period of shares of Class 1 Non-Voting Preferred Stock, Class 2 Non-Voting Preferred Stock and Voting Preferred Stock under the Trust and Supplemental Trust (or equivalent fictional book-entry shares under the Supplemental Plan), which shares shall, in the aggregate, be convertible into shares of Common Stock in an amount that represents 55% of the Company's equity and voting power measured as of the Effective Date. In addition, as described under the paragraph entitled "Additional Shares" below, depending on the market price per share of the Common Stock during the one-year period commencing on the Effective Date, up to an additional 8% of the Company's equity and voting power may be allocated to Participants' accounts under the Plan and the Supplemental Plan, bringing the total up to 63% of the equity and voting power of the Company.
Of the overall Employee stake, 46.23% of the underlying shares, including the Additional Shares, if any, will be reserved for allocation to the ALPA Employee Group, 37.13% of the underlying shares will be reserved for allocation to the IAM Employee Group and 16.64 % of the underlying shares will be reserved for allocation to the Management and Salaried Employee Group.
If there were no Code limitations on compensation and allocations, all shares to be acquired under the overall program would be delivered solely under Part A and such shares would be allocated to Participants of the respective Employee Groups over the Wage Investment Period in accordance with the percentages set forth in the preceding paragraph. Because such Code limitations will, in fact, operate to limit the annual benefits available under Part A, only a portion (expected to be approximately 78.15% of the underlying shares of Preferred Stock) will be acquired by the Trust from time to time on and after the Effective Date and allocated to Participants under Part A. To maximize certain employee stock ownership plan-related tax benefits, the Employee Groups may receive less than their overall equity ownership interest under Part A, with the balance to be received under Part B and the Supplemental Plan. Most of the shares allocable under Part B and the Supplemental Plan will be allocable to the ALPA Employee Group. (The preceding does not refer to Voting Preferred Stock; it will be contributed and allocated for all Employee Groups as described below under the paragraph entitled "Part B: Voting Preferred Stock.")
Shares not acquired under Part A will be allocated to appropriate Participant Accounts under Part B, subject to Code limitations, including Code sections 401(a)(4), 401(a)(17) and 415. To the extent that shares cannot be allocated under Part B by reason of those Code limitations, such shares will be allocated to accounts of appropriate Participants in accordance with the provisions of the Supplemental Plan.
The combined effect of the allocations under the overall program (Part A, Part B and the Supplemental Plan) will be to put each Participant, to the extent possible, in the position such Participant would have been had all shares, including the Additional Shares, if any, been delivered to and allocated under Part A.
Part A
With respect to Part A, it is intended that, on the Effective Date and from time to time thereafter, the Trustee will enter into the Initial Acquisition Loan and Additional Acquisition Loans on behalf of the Trust and use the proceeds thereof to purchase shares of Preferred Stock, representing approximately 42.9825% of the equity of the Company (subject to increase due to any Additional Shares issued). The Preferred Stock purchased will be Class 1 Non-Voting Preferred Stock. The shares of Class 1 Non-Voting Preferred Stock will be allocated ratably, over the Wage Investment Period, to the Employee Groups in accordance with the following percentages:
ALPA Employee Group - 31.759437%
IAM Employee Group - 47.511196%
Management and Salaried Employee Group - 20.729367%
Part B: Class 2 Non-Voting Preferred Stock
With respect to Part B, it is intended that the Company will contribute (or will cause the trustee of the Supplemental Trust to transfer), during the Wage Investment Period, shares of Class 2 Non-Voting Preferred Stock (including Additional Shares, if any) to the Plan. Subject to certain Code limitations, Such shares will be allocated to Participants who receive less than their full entitlement under the overall program under Part A. In general, the formula for determining the amount of allocations under Part B to make up for the shortfall of Company Stock delivered under Part A is set forth in Section 5.4(c).
Part B: Voting Preferred Stock
With respect to Part B, it is also intended that the Company will contribute, during the Wage Investment Period, shares of Voting Preferred Stock to the Plan. The Voting Preferred Stock contributed will be comprised of three classes. A separate class of Voting Preferred Stock, representing 25.4265% of the voting power of the Company, will be reserved for allocation to Participants who are members of the ALPA Employee Group ("Class P"); a separate class of Voting Preferred Stock, representing 20.4215% of the voting power of the Company, will be reserved for allocation to Participants who are members of the IAM Employee Group ("Class M"); and a separate class of Voting Preferred Stock, representing 9.152% of the voting power of the Company, will be reserved for allocation to Participants who are members of the Management and Salaried Employee Group ("Class S"). (The shares reserved above include shares reserved for allocation to the respective Employee Groups under the Supplemental Plan and Supplemental Trust.) Such percentages shall be appropriately adjusted in the event the initial Employee ownership percentage is increased (up to 63% in the aggregate) as provided below. It is intended that the number of shares of Voting Preferred Stock to be allocated to each Participant's Account on each Valuation Date will equal the number of shares of Preferred Stock allocated to that Participant under Part A and Part B on such Valuation Date (taking into account the special Effective Date contribution and allocation described below). The terms of each class of Voting Preferred Stock provide that the shares outstanding at any particular time (in combination with any shares of Common Stock held by the Trustee or trustee under the Supplemental Trust allocable or allocated to the relevant Employee Group) will command the aggregate voting power reserved for such Employee Group. Thus, for example, if there are 100 shares of Class P outstanding, each such share will command 1% of the voting power reserved for the ALPA Employee Group (25.4265%, assuming 55% ownership by Employees). As additional shares of Class P are issued. the per share voting power will decrease proportionately.
As a special Employer Contribution, one share of each of Class P, Class M and Class S will be contributed by the Company to Part B on the Effective Date. These three shares will be allocated, per capita, to the Accounts of the appropriate Participants under Part B on the Effective Date.
Supplemental Plan and Supplemental Trust
To the extent that, in any Plan Year during the Wage Investment Period. shares of Company Stock cannot be allocated to a Participant's Account by reason of any Code limitations, including Code section 401(a)(17), Code section 415 and Code section 401(a)(4), appropriate credits will be made to the accounts of the affected Participants under the Supplemental Plan (attached hereto as Exhibit A) in accordance with the terms thereof and shares of Voting Preferred Stock (and in certain circumstances, Class 2 Non-Voting Preferred Stock) used to satisfy the relevant credits will be held in the Supplemental Trust (attached hereto as Exhibit B) in accordance with the terms thereof for the benefit of the affected Participants.
Part B: Flowback
During and after the Wage Investment Period, to the extent that the allocation of shares of Company Stock under the Plan for any Participant was limited in a prior Plan Year by reason of the limitations of Code section 401(a)(17), Code section 415 or Code section 401(a)(4) (with the result that the Participant received corresponding credits under the Supplemental Plan), it is intended that the Company will contribute (or the Company will cause the trustee of the Supplemental Trust to transfer) to such Participant's Account shares of Class 2 Non-Voting Preferred Stock and shares of Voting Preferred Stock, as the case may be, in a subsequent Plan Year, and that such shares will be allocated under this Plan to the Accounts of the affected Participants in accordance with the terms hereof, subject to any applicable Code limitations as applied to the subsequent Plan Year (and corresponding debits will be made under the Supplemental Plan).
Additional Shares:
Depending on the fair market value per share of the Common Stock during the one-year period commencing on the Effective Date, a number of additional shares determined in accordance with Section 1.6 and Section 1.10 of the Recapitalization Agreement will be allocated to Participants' Accounts under the Plan and participants' accounts under the Supplemental Plan over the remainder of the Wage Investment Period. Such number of shares of Company Stock will be allocated to the Employee Groups in accordance with the percentages specified in the paragraph above entitled "Transaction. "
In general, 78.15% of the Additional Shares which are Preferred Stock will be Class 1 Non-Voting Preferred Stock; provided, however, that the portion of the Additional Shares attributable to Preferred Stock allocated as of December 31, 1994 will be Class 2 Non-Voting Preferred Stock contributed to Part B or allocated as credits under the Supplemental Plan as of December 31, 1994. Except as described in the foregoing proviso, it is intended that such Additional Shares of Class 1 Non-Voting Preferred Stock will increase, on a pro rata basis, the number of such shares acquired pursuant to each Additional Acquisition Loan. Unless the parties agree otherwise, these Class 1 shares will be allocated over the remainder of the Wage Investment Period in accordance with the percentages set forth under Part A above.
Any Additional Shares not sold to the Trustee pursuant to Part A will be contributed by the Company to Part B or credited to the Supplemental Plan during the remainder of the Wage Investment Period. Subject to certain Code limitations, such shares will be allocated to Participants who receive less than their full entitlement, giving effect to the allocation of the Additional Shares, of shares of Class 1 Non-Voting Preferred Stock under Part A. To the extent possible, the formula in Section 5.4(c) will be applied by assuming all Additional Shares (other than the shares of Voting Preferred Stock) had been sold to the Trust under Part A on the Effective Date and allocated ratably over the following 69 months.
SECTION 1
Definitions
In this Plan (including the preamble), whenever the context so indicates, the singular or plural number and the masculine or feminine gender shall be deemed to include the other, the terms "he," "his," and "him" shall refer to a Participant or Beneficiary, as the case may be, and, except as otherwise provided, or unless the context otherwise requires, the capitalized terms shall have the following meanings:
(b) "Acquisition Loan" means a loan (or other extension of credit, including an installment obligation to a party in interest (as defined in ERISA section 3(14))) incurred by the Trustee in connection with the purchase of Company Stock.
(c) "Additional Acquisition Loans" means the Acquisition Loans entered into from time to time after the Effective Date between the Trustee and the Company as contemplated by Section 1.6 of the Recapitalization Agreement.
(d) "Additional Shares" means the number of additional shares, if any, of Company Stock to be issued by the Company in accordance with Section 1.10 of the Recapitalization Agreement. Any reference herein to additional shares shall only be applicable when, if and to the extent that additional shares are determined to be issuable in accordance with Section 1.10 of the Recapitalization Agreement.
(e) "Affiliate" means any corporation, trade or business, which, at the time of reference, is together with the Company, a member of a controlled group of corporations, a group of trades or businesses (whether or not incorporated) under common control or an affiliated service group, as described in Code sections 414(b), 414(c) and 414(m), respectively, or any other organization treated as a single employer under Code section 414(o); provided, however, that, where the context so requires, the ten-n "Affiliate" shall be construed to give full effect to the provisions of Code sections 409(1)(4) and 415(h).
(f) "ALPA" means the Air Line Pilots Association, International.
(g) "ALPA Employee Group" means Eligible Employees in classifications represented by ALPA under the Railway Labor Act who are either listed on the Pilots' System Seniority List or Second Officer Eligibility Seniority List.
(h) "Beneficiary" means the person or persons to whom a deceased Participant's benefits are payable under the Plan all as provided in Section 7.9.
(i) "Board of Directors" means the board of directors of the Company.
(j) "Class 1 Non-Voting Preferred Stock" means the shares of Class 1 ESOP Convertible Preferred Stock issued by the Company and allocated under Part A.
(k) "Class 2 Non-Voting Preferred Stock" means the shares of Class 2 ESOP Convertible Preferred Stock issued by the Company and allocated under Part B. Any reference to such shares credited under the Supplemental Plan shall be deemed to be a reference to fictional book-entry shares of Class 2 Non-Voting Preferred Stock credited under the Supplemental Plan.
(l) "Code" means the provisions of the Internal Revenue Code of 1986, as amended, and all successor laws thereto. Where the Plan refers to a particular section of the Code, such reference shall also apply to any successor to that section.
(m) "Common Stock" means common stock issued by the Company that meets the requirements of Code section 409(1), which on the Effective Date includes the common stock that may be received upon the conversion of the Preferred Stock and Voting Preferred Stock.
(n) "Company" means UAL Corporation and any successor corporation or entity to the Company by merger, consolidation or otherwise.
(o) "Company Stock" means Voting Preferred Stock, Common Stock and/or Preferred Stock, as the context so requires.
(p) "Compensation" means (i) the total cash compensation paid to the Participant, for services while a Participant and an Eligible Employee, during the Plan Year for services rendered to his Employer, including bonuses and overtime pay, plus (ii) elective deferrals under a plan meeting the requirements of Code section 401(k) or Code section 125 for such Plan Year, but excluding reimbursement of moving expenses, relocation allowances, housing allowances, reimbursement of membership costs and dues, other expense reimbursement payments and allowances, severance pay or other special payments relating to termination of employment by retirement or otherwise and cash payments in respect of stock appreciation rights. With respect to the Management and Salaried Employee Group only, Compensation shall not include pay received for vacation time that was accrued but not actually taken as vacation before termination of employment by retirement or otherwise. A Participant's Compensation shall not exceed $150,000 (as adjusted pursuant to Code section 401(a)(17)); provided, however, that with respect to Part A, Compensation of a Participant who is a member of the ALPA Employee Group shall be limited to an amount equal to four times the dollar limitation under Code section 415(c)(1)(A) (as adjusted pursuant to Code section 415). Compensation for services performed prior to July 13, 1994 or after the end of the Wage Investment Period shall not be taken into account under the Plan, except for purposes of applying any Code limitations.
(q) "Control Transaction" means (a) any tender offer or exchange offer for Company Stock or any other opportunity or series of opportunities for the Plan to dispose of (or convert in connection with a sale, exchange or disposition) at least 3% of its Company Stock (other than conversions or dispositions to effectuate distributions or diversification elections under the Plan), and (b) any transaction or series of related transactions pursuant to which any person or group (as defined in Rule 13d-3 under the Exchange Act) acquires or seeks to acquire, directly or indirectly, "control" (as defined in the Exchange Act) of the Company or of all or a substantial portion of the tangible or intangible assets of the Company and its subsidiaries, whether by merger, consolidation, share exchange, tender offer, exchange offer, sale, lease, exchange, conversion, voting trust, proxy or otherwise. For purposes of Plan provisions relating to a "Control Transaction," "person" means an individual, corporation, association, partnership, joint venture, limited liability company, trust, estate, unincorporated organization, governmental authority, judicial entity or other entity.
(r) "Effective Date" means July 12, 1994.
(s) "Eligible Employee" means any Employee of an Employer (other than any employee who is not a member of an Employee Group and any "leased employee" (as defined in Code section 414(n))), subject to the following:
(i) if an Employee is included in a unit of Employees covered by a collective bargaining agreement, he shall not be an Eligible Employee unless the applicable collective bargaining agreement expressly provides that he shall be eligible to participate in this Plan. On the Effective Date, members of the ALPA Employee Group, the IAM Employee Group, and, if the Transport Workers Union collective bargaining agreement so provides, the meteorologist Employees who are members of a group represented by the Transport Workers Union (these meteorologists are members of the Management and Salaried Employee Group) are Eligible Employees;
|(ii) an Employee shall not be an Eligible Employee if he is a non-resident alien with no earned income from U.S. sources;
|(iii) an Employee shall not be an Eligible Employee as of the date his Compensation no longer reflects all of the wage concessions contemplated as part of the recapitalization of UAL effective July 12, 1994; and
|(iv) with respect to an Employee who is a member of the Management and Salaried Employee Group, the Employer may provide in a resolution of its board of directors, additional limitations for participation with the consent of the Board of Directors; provided, however, that any such limitation shall not have the effect of reducing the amount of Company Stock intended to be allocated to the Management and Salaried Employee Group under Part A or affect the method or pace of allocations of Company Stock in a manner that would adversely affect the Plan's projected ability to meet the requirements of Code section 415(c)(6).
(t) "Employee" means any person, including an officer or director, who is actually performing services for the Company or any of its Affiliates in a common-law, employer-employee relationship and treated as an employee on the payroll records and any "leased employee" (within the meaning of Code section 414(n)).
(u) "Employee Group" means each of the ALPA Employee Group, the IAM Employee Group and the Management and Salaried Employee Group.
(v) "Employer" means the Company or any of its Affiliates (or a division or business unit thereof) that has adopted the Plan with the consent of the Board of Directors.
(w) "Employer Contribution" means the amount contributed, whether in cash or in kind, by each Employer pursuant to the provisions of Section 3.1.
(x) "Entry Date" means, with respect to each Eligible Employee employed on the Effective Date, the Effective Date, and with respect to each Eligible Employee employed after the Effective Date, (i) in the case of members of the ALPA Employee Group, the employment commencement date (or reemployment commencement date), (ii) in the case of members of the IAM, the first day of the first payroll period coincident with or next following the date the Eligible Employee becomes a member of the IAM Employee Group, and (iii) in the case of members of the Management and Salaried Employee Group, the first day of the first payroll period coincident with or next following the anniversary date of the Eligible Employee's employment commencement date (or reemployment commencement date); provided, however, that if such Eligible Employee's employment with the Employers terminates before he becomes a Participant and such Eligible Employee returns to the employ of an Employer within one year of such termination, the Entry Date shall be the first day of the first payroll period coincident with or next following the later of (i) the reemployment commencement date or (ii) the anniversary date of such Eligible Employee's employment commencement date. Any Participant whose employment with the Employers terminates and who returns to the employ of an Employer as an Eligible Employee shall become a Participant immediately.
(y) "ERISA" means the provisions of the Employee Retirement Income Security Act of 1974, as amended, and all successor laws thereto. Where the Plan refers to a particular section of ERISA, such reference shall also apply to any successor to that section.
(z) "ESOP Cash Account" means the account established and maintained in the name of each Participant or Beneficiary to reflect his share of the Trust Fund, other than Company Stock.
(aa) "ESOP Committee" means the committee appointed to administer the Plan pursuant to Section 11.
(bb) "ESOP Stock Account" means the account established and maintained in the name of each Participant or Beneficiary to reflect his share of Company Stock.
(cc) "Exchange Act" means the Securities Exchange Act of 1934, as amended.
(bb) "Financed Shares" means shares of Company Stock acquired by the Trustee with the proceeds of an Acquisition Loan, which shall constitute "qualifying employer securities" under Code section 409(1) and any shares of Company Stock received upon conversion or exchange of such shares.
(cc) "IAM" means the International Association of Machinists and Aerospace Workers.
(dd) "IAM Employee Group" means non-probationary regular Employees (other than Employees employed on a temporary basis) who are both (i) classified by the Company as Mechanic and Related Employees, Ramp and Stores Employees, Food Services Employees, Security Officers, Dispatchers, or Communications Employees and (ii) members of a group of employees represented by the International Association of Machinists and Aerospace Workers, AFL-CIO.
(ee) "Initial Acquisition Loan" means the Acquisition Loan or Acquisition Loans entered into on the Effective Date between the Trustee and the Company pursuant to the Preferred Stock Purchase Agreement.
(ff) "Loan Suspense Account" means the suspense account in the Trust to which Financed Shares are initially credited prior to release for allocation to Participants' ESOP Stock Accounts. Subaccounts shall be maintained to reflect Financed Shares acquired with the Initial Acquisition Loan and each applicable Additional Acquisition Loan.
(gg) "Management and Salaried Employee Group"
means Eligible Employees who perform the functions performed by the salaried
and managerial Employees on the Effective Date (including any functions
that such Employees will perform in the future).
(ii) "Part A" means the portion of the Plan under which benefits are provided for Participants through the purchase of shares of Class 1 Non- Voting Preferred Stock acquired with the proceeds of the Initial Acquisition Loan and Additional Acquisition Loans.
(jj) "Part B" means the portion of the Plan under which benefits are provided for Participants through the contribution of shares of Class 2 Non-Voting Preferred Stock and Voting Preferred Stock by the Company or through the transfer of any such shares from the Supplemental Trust.
(kk) "Participant" means any Eligible Employee who has become a Participant in accordance with Section 2 or any other person with an Account balance under the Plan.
(ll) "Plan" means the UAL Corporation Employee Stock Ownership Plan, consisting of Part A and Part B, as amended from time to time. The Trust created in connection with the Plan shall be incorporated in, and form a part of, the Plan.
(mm) "Plan Year" means the calendar year; provided, however, that the initial Plan Year shall commence on the Effective Date and end on December 31, 1994.
(nn) "Preferred Stock" means the Class 1 Non-Voting Preferred Stock and the Class 2 Non-Voting Preferred Stock.
(oo) "Preferred Stock Purchase Agreement" means either (i) the stock purchase agreement, dated as of March 25, 1994, as amended, effective July 12, 1994, by and between the Company and the Trustee pursuant to which shares of Class 1 Non-Voting Preferred Stock will be purchased by the Trustee for allocation under Part A and/or (ii) the stock purchase agreements by and between the Company and the Trustee pursuant to which Additional Shares of Class 1 Non-Voting Preferred Stock will be purchased by the Trustee in connection with Additional Acquisition Loans for allocation under Part A, as the context so requires.
(pp) "Supplemental Plan" means the UAL Corporation Supplemental ESOP, effective July 12, 1994.
(qq) "Supplemental Trust" means the UAL Corporation Supplemental ESOP Trust, effective July 12, 1994.
(rr) "Total Disability" means that, in the opinion of a physician selected by the ESOP Committee, the Participant is permanently incapable of performing services for his Employer or any of its Affiliates due to a disability; provided, however, that for any, member of the ALPA Employee Group, "Total Disability" shall have the meaning ascribed thereto in the United Air Lines, Inc. Pilots' Fixed Benefit Retirement Income Plan.
(ss) "Trust" means the UAL Corporation Employee Stock Ownership Plan Trust created in connection with the establishment of the Plan.
(tt) "Trust Agreement" means the trust agreement establishing the Trust.
(uu) "Trust Fund" means the assets held in the Trust for the benefit of the Participants and their Beneficiaries.
(vv) "Trustee" means the trustee or trustees from time to time in office under the Trust Agreement.
(ww) "Valuation Date" means the last day of each Plan Year, April 12, 2000 (except for Participants in the IAM Employee Group) and July 12, 2000 for Participants in the IAM Employee Group and any other date selected by the ESOP Committee as necessary for the equitable operation of the Plan.
(xx) "Voting Preferred Stock" means the shares of each class of ESOP Voting Junior Preferred Stock issued by the Company. Such preferred stock consists of Class P, Class M and Class S.
(yy) "Wage Investment" means, for a member of the IAM Employee Group, the sum of:
(i) The product of (A) the number of hours for which the Participant is compensated during a Plan Year, multiplied by (B) the difference between the "book rate of pay" as in effect immediately prior to the Effective Date and the "actual rate of pay" as in effect on the Effective Date for services rendered during a Plan Year; plus
(ii) the sum of the following:
(A) the amount determined under item (i) times 7.6% (which represents the
Employers' portion of the FICA tax), (B) the amount determined under item
(i) times .46% (which represents the Employers' portion of the FUTA tax),
(C) the amount determined under item (i) times .05% (which represents the
Employers' contribution for long term disability coverage), and (D) the
amount determined under item (i) times .4% (which represents the Employers'
contribution for life insurance coverage); provided, however, that in the
case of each of the items (A) through (D) above, the members of the ESOP
Committee appointed by the IAM may require the substitution of an alternative
percentage which they deem appropriate and which is uniformly applicable
to each member of the IAM Employee Group; plus
meal) periods multiplied by the number of days services are rendered during a Plan Year.
Plan Participation
2.1 Eligibility for Participation. Subject to the conditions and limitations of the Plan, each Eligible Employee of an Employer shall become a Participant on the applicable Entry Date.
2.2 Participation Not Guarantee of Employment. Participation in the Plan does not constitute a guarantee or contract of employment and will not give any Employee the right to be retained in the employ of his Employer or any of its Affiliates nor any right or claim to any benefit under the terms of the Plan unless such right or claim has specifically accrued under the terms of the Plan.
2.3 Transferred Participants. If a Participant transfers from one Employee Group to another Employee Group, the ESOP Committee shall maintain separate Accounts for such Participant, such Accounts reflecting such Participant's participation in the Plan as a member of the respective Employee Groups.
SECTION 3
Contributions
3.1 Employer Contributions. Subject to the conditions and limitations of the Plan, for each Plan Year, the Employers shall contribute to the Trust cash equal to, or Company Stock having an aggregate fair market value equal to, such amount, if any, as the respective boards of directors of the Employers shall determine by resolution; provided, however, that:
(i) The Company shall contribute to Part A an amount in cash equal to the amount required to enable the Trustee (together with dividends used to repay the Initial Acquisition Loan and the Additional Acquisition Loans in accordance with Section 10) to pay any principal and interest on the Initial Acquisition Loan and the Additional Acquisition Loans payable during the Plan Year. Of the contribution amount required to enable the Trustee to discharge the aggregate principal and interest on such indebtedness, 60% shall be made to the money purchase pension plan component of Part A of the Plan. The balance of the required contribution amount shall be made to the stock bonus plan component of Part A of the Plan. The Trustee shall apply such money purchase pension plan component contributions to repay the principal on each of the respective Acquisition Loans in proportion to the excess of the principal due on such Acquisition Loan for the Plan Year over the dividends available to repay the principal on such Acquisition Loan.
|(ii) In lieu of the foregoing, the Company may forgive an amount of indebtedness equal to the required Employer Contribution (or any portion thereof).
|(iii) On the Effective Date, the Company shall contribute an amount in cash equal to the aggregate par value of the Company Stock to be acquired under the Initial Acquisition Loan. In addition, the Company shall contribute an amount in cash equal to the aggregate par value of the Company Stock, if any, to be acquired under each Additional Acquisition Loan. Such contributions shall first be divided, pro rata, among the Employee Groups in accordance with Section 5.4(a)(i)(A), and then shall be allocated to the ESOP Cash Accounts of Participants as follows: (A) in the case of the ALPA Employee Group and the Management and Salaried Employee Group, according to the Compensation paid to such Participants in such Employee Group for the Plan Year, and (B) in the case of the IAM Employee Group, according to Wage Investments of such Participants for the Plan Year. Such contribution shall be used by the Trustee as partial consideration for the purchase of shares of Class 1 Non-Voting Preferred Stock under the applicable Preferred Stock Purchase Agreement, and the ESOP Cash Accounts of the Participants shall be charged accordingly. Shares of Class 1 Non-Voting Preferred Stock equal in value (based on the prices per share paid by the Trustee under the applicable Preferred Stock Purchase Agreement) to the amount of such contribution shall be allocated, as of the last day of the applicable Plan Year, from the shares purchased under the applicable Preferred Stock Purchase Agreement to the ESOP Stock Accounts of the Participants, pro rata, according to the allocations of such contribution above.
(b) Part B.
(i) On the Effective Date, the Company shall contribute to Part B, as a special Employer Contribution, one share of each of Class P, Class M and Class S.
|(ii) As soon as practicable after the end of each Plan Year, the Company shall contribute (or shall cause the trustee of the Supplemental Trust to transfer) to Part B shares of Class 2 Non-Voting Preferred Stock and shares of Voting Preferred Stock in accordance with Section 5.4(c)(vii); provided, however, that any shares of Company Stock transferred by the trustee of the Supplemental Trust in respect of such obligation shall satisfy, to the extent of such transfer, the Company's obligation under this Section 3.1(b). Such contributions may not be used to repay Acquisition Loan indebtedness and shall be made to the stock bonus plan component of the Plan.
|(iii)
If cash dividends have been paid to the holders of Common Stock during
any Plan Year and if dividends are applied to repay the Initial Acquisition
Loan or any Additional Acquisition Loan pursuant to Section 10 during that
Plan Year, the Company shall make an additional Employer Contribution to
Part B in the amount, if any, set forth in the next sentence as soon as
practicable after the last day for that Plan Year (and for the purpose
of this clause (iii), "Plan Year" shall be defined to include only the
period from the Effective Date to 12/31/94, the five 12-month periods ending
12/31/95 through 12/31/99, and the three-month period ending 3/31/2000).
The amount of such contribution shall equal the excess of A plus B over
C; where A equals the least of:
(II) the Fixed Dividends that have been paid on the Class 1 Non-Voting Preferred Stock during that Plan Year; and
(III) the amount of the cash dividends used
to repay the Initial Acquisition Loan and the Additional Acquisition Loans
pursuant to Section 10.1(a) during such Plan Year;
C equals the amount of cash contributions previously made pursuant to this clause (iii) with respect to such Plan Year.
3.2 Limitation on Contributions. In no event may any Employer Contributions under Section 3.1 for any Plan Year exceed the maximum amount deductible as an expense for federal income tax purposes under Code section 404; provided, however, that if Employer Contributions are so limited, appropriate arrangements will be made in accordance with Section 1.6(1) of the Recapitalization Agreement to protect the substantive rights of each Employee Group (hereinafter "Appropriate Arrangements").
3.3 Timing of Contributions. For each Plan Year, Employer Contributions shall be due no later than the time prescribed for filing the Employer's federal income tax return for that Plan Year, including any extensions of time; provided, however, that Employer Contributions shall be made at such times as to enable the Trustee to meet its repayment obligations under the documents governing the Initial Acquisition Loan, the Additional Acquisition Loans or as otherwise required by the terms of the Plan.
3.4 Participant Contributions. Contributions by Participants are neither required nor permitted.
SECTION 4
Investment of Trust Fund
4.1 Exclusive Benefit of Participants. All Employer Contributions, Company Stock acquired with Employer Contributions and with proceeds of Acquisition Loans, and dividends and distributions thereon, shall become a part of the Trust Fund and shall be held and disbursed by the Trustee in accordance with the provisions of the Plan and Trust Agreement. No person shall have any Interest in or right to assets held in the Trust Fund except as provided in the Plan and Trust Agreement. The Trust Fund shall be held for the exclusive benefit of the Participants and their Beneficiaries, and shall be used solely to pay benefits to such persons. The Trust Fund shall not revert to the benefit of the Company or any of its Affiliates, except as provided in Section 15.2.
4.2 Investment in Company Stock. The Trust Fund shall be invested exclusively in shares of Company Stock, subject to the Trustee's power to hold cash pending investment in Company Stock or pending distribution to Participants, and, accordingly, the Trustee may invest and hold up to 100% of the Trust Fund in Company Stock.
4.3 Acquisition Loans. In respect of Part A, the Trustee may incur the Initial Acquisition Loan and the Additional Acquisition Loans. In addition, the Trustee, with the consent of the Company, may incur other Acquisition Loans from time to time to finance the acquisition of Company Stock for the Trust or to repay a prior Acquisition Loan. Each Acquisition Loan shall meet all applicable legal requirements, including those set forth under Code section 4975 and ERISA section 408. Financed Shares shall initially be credited to the Loan Suspense Account and shall be released for allocation to the ESOP Stock Accounts of Participants only as payments of principal and interest, or principal, on the Acquisition Loan are made by the Trustee. The number of Financed Shares to be released from the Loan Suspense Account (or subaccount attributable to that Acquisition Loan) for allocation to Participants' ESOP Stock Accounts for each Plan Yea., shall be based upon either: (x) the ratio that the payments of principal made on the Acquisition Loan for that Plan Year bear to the sum of principal payments during that Plan Year, plus the projected payments of principal during the remainder of the Acquisition Loan repayment period, provided that the special conditions set forth under Treasury Regulation section 54.4975-7(b)(8)(ii) are satisfied, or (y) the ratio that the payments of principal and interest on the Acquisition Loan for that Plan Year, bear to the sum of principal and interest payments during that Plan Year, plus the projected payments of principal and interest during the remainder of the Acquisition Loan repayment period. A separate ratio will be calculated for each Acquisition Loan. The applicable loan documents will specify whether clause (x) and/or clause (y) shall apply. Shares released from the Loan Suspense Account in connection with the Initial Acquisition Loan and the Additional Acquisition Loans shall be released in accordance with clause (x) above.
4.4 Fiduciary Concerns. With respect to the exercise of any fiduciary responsibility with respect to the Plan or Trust, including, without limitation, the voting, sale, exchange, other disposition or conversion of Company Stock, the relevant fiduciary may, to the extent permitted by law, take into consideration any relevant economic factors affecting the interests of current and future Participants (and Beneficiaries), including, but not limited to, the prospect for continued Employee enfranchisement through the voting power of Company Stock held in the Plan, the prospect for future benefits under the Plan as a result of the prospective release and allocation of Company Stock held in the Loan Suspense Account and the prospect for future employment with the Company and its Affiliates.
SECTION 5
Plan Accounting
5.1 Accounting for Allocations. The ESOP Committee shall establish the Accounts (and sub-accounts, if deemed necessary) for each Participant, and the accounting procedures for the purpose of making the allocations to the Participants' Accounts provided for in this Section 5. The ESOP Committee shall maintain adequate records of the cost basis of shares of Company Stock allocated to each Participant's ESOP Stock Account. The ESOP Committee also shall keep separate records of Financed Shares attributable to each Acquisition Loan and of Employer Contributions (and of any earnings thereon) made for the purpose of enabling the Trust to repay any Acquisition Loan. From time to time, the ESOP Committee may modify its accounting procedures for the purposes of achieving equitable and nondiscriminatory allocations among the Accounts of Participants, in accordance with the provisions of this Section 5 and the applicable requirements of the Code and ERISA. In accordance with Section 11, the ESOP Committee may delegate the responsibility for maintaining Accounts and records.
5.2 Allocation and Crediting of Participants' ESOP Stock Accounts. As of each Valuation Date, the ESOP Committee shall:
(b) Next, credit to each Participant's ESOP Stock Account the shares of Company Stock, if any, that have been purchased with amounts from his ESOP Cash Account since the last preceding Valuation Date, and adjust such ESOP Cash Account in accordance with the provisions of Section 5.3; and
(c) Finally, allocate and credit to each Participant's ESOP Stock Account the shares of Company Stock representing Employer Contributions made in the form of Company Stock and the number of Financed Shares released under Section 4.3 that are to be allocated and credited as of that date in accordance with the provisions of Section 5.4.
(b) Next, if Company Stock is purchased with assets from a Participant's ESOP Cash Account, such shares shall be credited to the ESOP Stock Account of such Participant, and the Participant's ESOP Cash Account shall be charged accordingly;
(c) Next, subject to the dividend provisions of Section 10, the ESOP Committee shall also credit to the ESOP Cash Account of each Participant any cash dividends paid to the Trustee on shares of Company Stock held in that Participant's ESOP Stock Account (as of the record date for such cash dividends) and dividends paid on shares of Company Stock held in the Loan Suspense Account that have not been used to repay any Acquisition Loan. Cash dividends and any earnings that have not been used to repay any Acquisition Loan and have been credited to a Participant's ESOP Cash Account shall be applied by the Trustee to the purchase of shares of Common Stock, which shares shall then be credited to the ESOP Stock Account of such Participant. The Participant's ESOP Cash Account shall then be charged by the amount of cash used to purchase such Common Stock or used to repay any Acquisition Loan. In addition, any earnings (i) on ESOP Cash Accounts will be allocated to Participants' ESOP Cash Accounts, pro rata, based on such ESOP Cash Account balances and (ii) on the Loan Suspense Account, other than dividends used to repay the Acquisition Loan, will be allocated to Participants' Accounts, pro rata, based on their Account balances in Part A;
(d) Next, allocate and credit the Employer Contributions made for the purpose of repaying any Acquisition Loan in accordance with Section 5.4. Such amount shall then be used to repay any Acquisition Loan and such Participant's ESOP Cash Account shall be charged accordingly; and
(e) Finally, allocate and credit the Employer Contributions (other than amounts contributed to repay an Acquisition Loan) that are made in cash for the Plan Year to the ESOP Cash Account of each Participant (including Participants whose employment with the Company and its Affiliates terminated for any reason during the Plan Year) in accordance with Section 5.4(b).
(i) First, the Employer Contributions
made in cash used to repay each Acquisition Loan (or treated as cash due
to forgiveness of such Acquisition Loan indebtedness) shall be allocated
among the Employee Groups as follows:
(B) There shall be calculated for each Participant an allocation of shares of Class 1 Non-Voting Preferred Stock on account of dividends paid during the Plan Year on such Preferred Stock previously allocated to such Participant's ESOP Stock Account and applied in accordance with Sections 10.1(a) and 10.3. The foregoing allocations for each Participant shall be made out of the Class 1 Non-Voting Preferred Stock allocated to that Participant's Employee Group under subclause (A) above.
(C) Employer Contributions to be allocated in
accordance with this clause (i)(C) shall be allocated to each Employee
Group in the proportion that (x) shares of Class 1 Non-Voting Preferred
Stock allocated to that respective Employee Group pursuant to subclause
(A) reduced by the shares allocated to members of that Employee Group pursuant
to subclause (B), bears to (y) all shares of Class 1 Non-Voting Preferred
Stock released for the Plan Year reduced by all shares allocated pursuant
to subclause (B).
(iii) Third, there shall be tentatively allocated to the Accounts of each Participant in each Employee Group that portion of the resulting Employer Contributions which such Participant's Compensation (or, in the case of the [AM Employee Group, such Participant's Wage Investments) for the Plan Year bears to the aggregate Compensation (or, in the case of the IAM Employee Group. Wage Investments) for all such Participants for such Plan Year; provided that such Employer Contributions shall not be allocated to any Participant's Account to such extent the allocation would exceed the limitation of Code section 415(c). The amount, if any, by which the allocation to any such Participant's Account shall be reduced under the foregoing proviso shall be, subject to the Code section 415(c) limitation, tentatively allocated (and, if necessary, reallocated) to the Accounts of all other Participants in his Employee Group (x) for the Management and Salaried Employee Group, in proportion to their Compensation, (y) in the case of the IAM Employee Group, Wage Investments, and (z) in the case of the ALPA Employee Group, first in proportion to (but not more than) the amount of Class 2 Non-Voting Preferred Stock otherwise scheduled for contribution and allocation to each Participant's Account under Part B for the current Plan Year (absent this clause (iii)) and otherwise in proportion to Compensation.
|(iv) Fourth, if the total Employer Contributions tentatively allocated to "highly compensated employees" (as defined in Code section 414(q)) under clause (iii) do not exceed one-third of the total Employer Contributions tentatively allocated to the Accounts of all Participants under clause (iii), the tentative allocations of Employer Contributions to Participants shall become final. The foregoing limitation shall be applied by aggregating all Participants in all Employee Groups.
(v) Fifth, if the one-third limitation described in clause (iv) is exceeded, the amount of Employer Contributions allocated to Accounts of Participants in the ALPA Employee Group who are highly compensated employees shall be reduced, pro rata, based on Compensation and reallocated to Participants in the ALPA Employee Group who are not highly compensated employees, to the extent necessary to meet the one-third limitation described in clause (iv), subject, however, to Code section 415(c). The foregoing reallocations to each non-highly compensated employee shall be allocated in proportion to (but not more than) the number of shares of Class 2 Non-Voting Preferred Stock otherwise scheduled for contribution and allocation to his Account under Part B for the current Plan Year (absent this clause (v)). If and to the extent appropriate arrangements are made between the Company and ALPA to protect the interests of the ALPA Employee Group (which arrangements shall be consistent with Section 13.1 and which the Company agrees to do upon reasonable request and which shall not require IAM consent), contributions for the highly compensated ALPA Employee Group members may be reduced, pro rat.T, to meet the one- third limitation described in clause (iv).
(vi) Sixth, if, after the reallocation of Employer Contributions described in clause (v), the one-third limitation described in clause (iv) is still exceeded, then the computations described in foregoing clauses (i) through (v) shall be disregarded. In lieu thereof the allocation shall be made in accordance with clauses (i) through (iii), but clause (ii) shall be disregarded. If such allocations do not result in a violation of Code section 415(c) for all members of any Employee Group, the tentative allocations shall become final.
(vii) Seventh, if the allocation of Employer Contributions described in clause (vi) results in a violation of Code section 415(c) for all members of any Employee Group (after reallocating any excess allocations owing to members of such Employee Group), then clause (vi) shall be disregarded. The computations described in foregoing clauses (i) through (v) (including clause (ii)) shall be repeated, but, after applying clause (v), the amount of Employer Contributions allocated to Accounts of Participants who are members of the Management and Salaried Employee Group who are highly compensated employees shall be reduced, pro rata, based on Compensation, and reallocated to Participants in the Management and Salaried Employee Group who are not highly compensated employees, pro rata, based on Compensation, to the extent necessary to meet the one- third limitation described in clause (iv), subject, however, to Code section 415(c). In making the foregoing reallocations, no non-highly compensated employee shall be allocated more shares under this clause (vii) than the number of shares of Class 2 Non-Voting Preferred Stock otherwise scheduled for contribution and allocation to his Account under Part B for the current Plan Year (absent this clause (vii)). If and to the extent appropriate arrangements are made by the Company to protect the interests of the Management and Salaried Employee Group (which arrangements shall be consistent with Section 13.1 and which shall not require IAM consent, but which shall require ALPA consent. which consent shall not be unreasonably withheld), contributions for the highly compensated Management and Salaried Employee Group members may be reduced, pro rata, to meet the one-third limitation described in clause (iv).
(viii) Eighth, all shares of Class 1 Non-Voting Preferred Stock released from the Loan Suspense Account as of the Valuation Date shall be allocated first in respect of dividends paid on previously allocated shares of Class 1 Non-Voting Stock in accordance with Sections 10.1(a)(i) and 10.3 and then allocated in proportion to the percentage of the Employer Contributions allocated to each Participant's Account under clauses (i) through (vii) above.
(b) Special Contributions to Part B.
(i) The special Employer Contribution made by the Company on the Effective Date pursuant to Section 3.1(b)(i) shall be allocated, per capita, to the appropriate Participants' ESOP Stock Accounts under Part B on the Effective Date.
|(ii) Employer Contributions made in cash for the Plan Year under Section 3.1(b)(iii) shall be allocated under Part B and credited to the ESOP Cash Accounts of the appropriate Participants to which those cash contributions relate, as follows: to the extent that the calculation of the amount of such contributions refers to shares of Class 1 Non-Voting Preferred Stock held in the Loan Suspense Account or Class 1 Non-Voting Preferred Stock contemplated for further sale, divide such cash contributions among the Employee Groups in accordance with Section 5.4(a)(i)(A); to the extent it refers to shares of Class 1 Non-Voting Preferred Stock allocated to the Participants' ESOP Stock Accounts, apportion those contributions to the relevant Employee Group; then, allocate to the appropriate Participants' Accounts, pro rata, in the case of (i) the ALPA Employee Group and the Management and Salaried Employee Group, according to the Compensation paid to such Participants for the Plan Year, and (ii) the IAM Employee Group, according to Wage Investments made by such Participants for the Plan Year; subject, however, in all cases to Code section 415(c).
(c) Regular Contributions to Part B. Shares of Class 2 Non-Voting Preferred Stock and Voting Preferred Stock contributed to the Plan pursuant to Section 3.1(b) shall be allocated among and credited to the ESOP Stock Accounts of Participants for that Plan Year as set forth below, provided, however, that no allocations (other than allocations under clauses (i) and (viii) below) shall be made to Accounts of Participants who are members of the IAM Employee Group:
(i) First, subject to the applicable Code limitations, one share of Voting Preferred Stock shall be allocated to the Participant's Account for each share of Class 1 Non-Voting Preferred Stock allocated to that Participant under Part A on that Valuation Date. The shares of Voting Preferred Stock shall be allocated under Part B and shall be of the appropriate class for each such Participant. The special allocation under Section 5.4(b)(i) shall be credited against the allocation required pursuant to this clause (i) on the first Valuation Date.
(ii) Second, for each Participant, a "hypothetical share number" shall be calculated for the Valuation Date. Such number shall equal the number of shares that would have been allocated to the Participant under Part A on such Valuation Date if (A) all the shares of Class 1 and Class 2 Non-Voting Preferred Stock to be issued pursuant to the Recapitalization Agreement (including, with respect to Valuation Dates occurring on or after December 31, 1995 and after the allocation in subsection (viii) be low, any Additional Shares issued or to be issued) had been (I) purchased by the Trust under a single loan on the Effective Date and held under the Loan Suspense Account pursuant to Part A, and (II) in the case of such Class 2 shares, considered Class 1 Non-Voting Preferred Stock under Part A having the same fair market value as the Class 1 Non-Voting Preferred Stock; provided, however, that such Class 2 shares shall not, except as provided in subclause (E), bear any dividend; (B) the shares of Class 1 and Class 2 Non-Voting Preferred Stock were released under Part A ratably over the 69 months starting on the Effective Date; (C) Section 5.4(a)(i)(A) were applied by allocating the Class 1 Non-Voting Preferred Stock and the Class 2 Non-Voting Preferred Stock among the Employee Groups as follows: ALPA Employee Group - 46.23%; IAM Employee Group - 37.13%; and Management and Salaried Employee Group - 16.64%; (D) allocations under Part A were made as if: (I) the limitations of Code sections 401(a)(4), 401(a)(17) and 415 did not apply; (II) Compensation was based on "compensation" as defined in the Supplemental Plan and (III) clauses (ii), (iv), (v), (vi) and (vii) of Section 5.4(a) did not apply; and (E) each share of Class 2 Non-Voting Preferred Stock that was in fact allocated on a prior Valuation Date to a Participant's account under the Supplemental Plan or under Part B shall, after the date of such allocation, be considered Class 1 Non-Voting Preferred Stock held by Part A (bearing the same Fixed Dividend as the Class 1 Non-Voting Preferred Stock that was allocated under Part A (but not bearing any other dividend)). By way of illustration, assume a member of the ALPA Employee Group has a total of 130 shares of Class 2 Non-Voting Preferred Stock allocated to his account under the Supplemental Plan and 70 shares of Class 2 Non-Voting Preferred Stock allocated to his Account under Part B. Assume further that each share of Class 1 Non-Voting Preferred Stock under Part A has a value of $100, pays an $8 Fixed Dividend, no dividends are paid on Common Stock and that each share of Class 2 Non-Voting Preferred Stock has a $75 value. For purposes of making the allocations under this subclause (E), such individual shall be treated as having received a dividend of $1600 with respect to the shares of Class 2 Non-Voting Preferred Stock allocated under the Supplemental Plan and under Part B. For purposes of calculating the hypothetical share number, that individual shall receive an allocation of 16 shares of Class 2 Non-Voting Preferred Stock to make up for such dividend, notwithstanding the fact that the value of the shares of Class 2 Non-Voting Preferred Stock is S75 per share.
(iii) Third, for each ESOP Participant, the "actual share number" for a Valuation Date shall be the actual number of shares of Class 1 Non-Voting Preferred Stock that are allocated to such Participant under Part A on that Valuation Date.
(iv) Fourth, for each ESOP Participant, the excess of the hypothetical share number over the actual share number shall be referred to herein as the respective "tentative allocation." If the sum of the tentative allocations (ignoring negative tentative allocations) for all Participants in an Employee Group exceeds the number of shares of Class 2 Non-Voting Preferred Stock released from the "phantom suspense account" to all such Participants' accounts for that Employee Group under Section 2.2 of the Supplemental Plan, each such tentative allocation for Participants of that Employee Group shall be proportionately reduced.
(v) Fifth, on each Valuation Date, the number of shares of each of the Class 2 Non-Voting Preferred Stock and Voting Preferred Stock, if any, to be allocated to a Participant under Part B (excluding Voting Preferred Stock described in Section 5.4(c)(i) and 5.4(c)(vi)) shall be the same and shall equal the least of the following numbers: (A) the maximum number of shares of each of the Class 2 Non-Voting Preferred Stock and the Voting Preferred Stock that can be allocated to the Participant for the Valuation Date under Part B without violating Code section 415 or Code section 401(a)(4) (if applicable), (B) the tentative allocation and (C) the excess of the hypothetical share number (calculated for this purpose only by applying the Code section 401(a)(17) limitation) over the actual share number. The hypothetical share number described in this subclause (C) shall be determined by recalculating the allocations made on the current and all prior Valuation Dates by assuming the Participant's Compensation for each Plan Year had been limited to the amount then allowed und7er Code section 401(a)(17). Accordingly, for purposes of calculating the hypothetical share number under this subclause (C), the Participants' Compensation in the current Plan Year shall be limited to the amount provided by Code section 401(a)(17) and the amount of dividends allocated to each Participant's Account during the Plan Year shall be calculated by assuming the allocations of shares made on earlier Valuation Dates were also based on Compensation, as limited by Code section 401(a)(17) limitation then in effect. The excess of the tentative allocations over the amount allocated under clause (v) shall not be allocated under Part B, but shall be allocated in accordance with the terms of the Supplemental Plan.
(vi) Sixth, on the last Valuation
Date of each Plan Year, in addition to the shares of Class 2 Non-Voting
Preferred Stock and Voting Preferred Stock transferred to Part B under
clause (v) above, shares credited under the Supplemental Plan, in a prior
Plan Year, due to the limitations under Code section 401(a)(4), 401(a)(17)
or Code section 415, shall be allocated to Participants' Accounts under
Part B, subject to applicable Code limitations in accordance with the following
priorities:
(B) second, by the maximum number of shares of Class 2 NonVoting Preferred Stock and Voting Preferred Stock (such numbers to be the same) that may be contributed by the Company (or transferred from the Supplemental Trust) to Part B without disqualifying the Plan or any other qualified plan; provided, however, that the number of shares transferred may include any shares that were not previously contributed or transferred to Part B because of the limitations of Code section 401(a)(17); and
(C) third, by the maximum number of shares of Common Stock that may be transferred from the Supplemental Trust to Part B without disqualifying the Plan or any other qualified plan; provided, however, that the number of shares may include any shares that were not previously contributed or transferred to Part B because of the limitations of Code section 401(a)(17).
(vii) Seventh, the Company shall contribute (or, to the extent applicable, the Company shall direct the trustee of the Supplemental Trust to transfer) a number of shares of Voting Preferred Stock and Class 2 Non-Voting Preferred Stock and Common Stock equal to the sum of the number of such respective shares calculated for each Participant under clauses (i), (v) and (vi) above to Part B. Such shares shall be transferred as soon as practicable after the applicable Valuation Date.
(viii) Eighth, Prior to the December 31, 1995 Valuation Date, the aggregate hypothetical share numbers for all Participants for the 1994 Plan Year shall be retroactively increased by an additional number equal to X multiplied by Y, where X is the total number of shares of Preferred Stock to be issued as Additional Shares and Y is the release fraction (as defined in the Supplemental Plan) for December 31, 1994. Such shares shall be divided among the Employee Groups (including the IAM Employee Group) in accordance with Section 5.4(c)(ii)(C) and allocated to Participants based upon 1994 data (that is, 1994 Compensation and Wage Investments, as applicable.) The excess of such new hypothetical share number (including such numbers for the IAM Employee Group) for the 1994 Plan Year over the hypothetical share number previously determined for 1994 shall be allocated hereunder or credited under the Supplemental Plan in accordance with clause (v) above, provided that the number in (v)(A) shall be calculated and credited as if the contributions were attributable to 1995, rather than 1994, unless the additional shares calculated in clause (v) to be contributed to ESOP (Part B) are in fact contributed to the ESOP no later than September 15, 1995. The calculations required by this clause (viii) shall be performed prior to calculating the regular allocations for the 1995 year. The additional shares of Class 2 Non-Voting Preferred Stock credited pursuant to this clause (viii) shall, for all purposes, including Section 5.4(c)(ii)(E), be allocated as of December 31, 1994.
(d) Purpose. The purpose of the foregoing contribution and allocation provisions is to place each Participant, to the extent possible, in the same position such Participant would have been if (i) Code sections 401(a)(4), 401(a)(17) and 415 did not apply, (ii) all of the shares of Preferred Stock to be sold to Part A during the Wage Investment Period had instead been sold on the Effective Date, (iii) all of the shares (excluding shares of the Voting Preferred Stock) contributed to Part B or credited under the Supplemental Plan during the Wage Investment Period had instead been purchased by the Trust on the Effective Date pursuant to Part A as Class 1 Non-Voting Preferred Stock and (iv) the Preferred Stock and Voting Preferred Stock had been allocated ratably (over the 69 months beginning at the Effective Date) to Participants in their respective Employee Groups in accordance with the overall program ownership percentages, that is, the ALPA Employee Group - 46.23%, the IAM Employee Group - 37.13% and the Management and Salaried Employee Group - 16.64%. To the extent any interpretative issues arise in calculating contributions and allocations, such issues shall be resolved, if possible, by effectuating such purpose. To the extent that any shares of Company Stock are converted into shares of Common Stock prior to the end of the Wage Investment Period, an appropriate number of shares of Common Stock will be contributed (if applicable) and allocated hereunder in lieu of the shares of the Company Stock that would have been contributed and/or allocated hereunder and, if appropriate, the number of Class 1 and/or Class 2 Non-Voting Preferred Stock shares set forth in various places in this Plan shall be revised; provided, except to the extent the shares of Voting Preferred Stock are converted into shares of Common Stock, the calculation of the number of shares of Voting Preferred Stock to be contributed and allocated shall continue as if no shares of Company Stock had been converted.
(e) Special Allocation Provision. For purposes of making allocations under Section 5.4, the period from January 1, 2000 through April 12, 2000 shall be treated as a Plan Year (for the ALPA Employee Group and the Management and Salaried Employee Group) and the period from January 1, 2000 through July 12, 2000 shall be treated as a Plan Year (for the IAM Employee Group).
(b) Code Section 415 Compensation. For purposes of this Section 5.5, Compensation shall be adjusted to reflect the general rule of Treasury Regulation section 1.415-2(d).
(c) Limitation Year. The "limitation year" (within the meaning of Code section 415) shall be the calendar year.
(d) Multiple Defined Contribution Plans. In any case where a Participant also participates in another defined contribution plan of the Company or its Affiliates, the appropriate committee of such other plan shall first reduce the after-tax contributions under any such plan, shall then reduce any elective deferrals under any such plan subject to Code section 401(k), shall then reduce all other contributions under any other such plan and, if necessary, shall then reduce contributions under this Plan (Part B to be reduced before Part A); provided, however, in the case of any Participant who is a member of the ALPA Employee Group, contributions (excluding after-tax contributions and elective deferrals) under the United Air Lines, Inc. Pilots' Directed Account Retirement Income Plan shall be reduced last.
(e) Combined Plan Limitations. To the extent necessary to comply with the requirements of Code section 415(e), the appropriate committee shall first reduce the annual benefit payable under any defined benefit plan in which the Participant participates and, if necessary, the ESOP Committee shall thereafter reduce the contributions under the defined contribution plans in which such Participant participates in accordance with Section 5.5(d).
(f) Excess Allocations. If, after applying the allocation provisions under Section 5.4, allocations under Section 5.4 would otherwise result in a violation of Code section 415, the ESOP Committee shall reduce Employer Contributions for the next limitation year for the affected Participant or shall hold excess amounts in a suspense account for allocation in a subsequent Plan Year in accordance with Reg. section 1.415-6(b)(6)(ii). Such suspense account, if permitted, will be created before any reallocation of contributions for the affected individual. If the limits of Code section 415 would cause total allocations to each Participant in an Employee Group to exceed the permitted amount, appropriate arrangements will be made to protect the interests of that Employee Group, consistent with the principles of Section 3.2.
SECTION 6
Vesting
A Participant's Account shall be fully vested (nonforfeitable) at all times, and will be distributed to him or, in the event of his death, to his Beneficiary, in accordance with the applicable provisions of Section 7.
SECTION 7
Distributions
7.1 Pre-Retirement Diversification Rights.
(b) Amount. In the case of a Qualified Participant who has made one or more elections during the period, the extent to which a subsequent election exceeds the amount to which any prior election applies shall be (i) in the case of the Qualified Participant's ESOP Cash Account, (A) 25 % or 50 %, as the case may be, of the sum of the balance of such Account as of the Valuation Date of the Plan Year with respect to which the subsequent election is made and the amounts diversified pursuant to prior elections, less (B) the amounts diversified pursuant to prior elections; and (ii) in the case of the Qualified Participant's ESOP Stock Account, (A) 25% or 50%, as the case may be, of the sum of the number of shares of Company Stock in the Qualified Participant's ESOP Stock Account as of the Valuation Date of the Plan Year with respect to which the subsequent election is made and the number of shares of Company Stock diversified pursuant to prior elections, less (B) the number of shares of Company Stock diversified pursuant to prior elections. For the purposes of this Section 7, fractional shares for which a Qualified Participant might be entitled to receive shall be rounded down to the nearest whole share. The diversification of a Participant's Account under this Section 7.1 shall only be effected within 90 days following the 90-day period in which the Qualified Participant makes his request. Notwithstanding the foregoing, if the fair market value of the Company Stock allocated to the ESOP Stock Accounts of a Qualified Participant is $500 or less as of the Valuation Date immediately preceding the first day of an Election Period, such Qualified Participant shall not be entitled to an election under this Section 7.1 for that Election Period.
(c) Method. A Participant's diversification election pursuant to this Section 7.1 shall only be effected by having the ESOP Committee cause the Trustee to transfer the portion of the Account to be diversified to the Company's Code section 401(k) plan applicable to such Participant. An equal number of shares of Voting Preferred Stock and Preferred Stock shall be diversified.
7.3 Manner and Form of Distributions.
(i) By payment in a lump sum; or
(ii) By payment in a series
of five substantially equal annual installments (to consist of equal numbers
of Voting Preferred Stock and Preferred Stock).
(i) a Participant whose employment with the Company and its Affiliates terminates by reason of attainment of his Normal Retirement Date, death or Total Disability must be eligible to receive a distribution of his Account balance no later than the end of the Plan Year following the Plan Year in which such termination occurs; provided, however, that this provision shall not apply to the shares of Company Stock held in the Participant's Account acquired with the proceeds of an Acquisition Loan until the close of the Plan Year in which such Acquisition Loan has been repaid in full;
(ii) unless a Participant otherwise elects under Section 7.4(b), a Participant whose employment with the Company and its Affiliates terminates must commence to receive a distribution of his Account no later than 60 days following the close of the Plan Year in which the latest of the following occurs; (A) a Participant reaches his Normal Retirement Date, (B) the Participant's employment with the Company and its Affiliates terminates and (C) the 10th anniversary of the year in which the Participant commenced participation in the Plan;
(iii) a Participant's Account balance must commence to be distributed no later than the April 1 of the calendar year next following the calendar year in which such Participant attains age 70-1/2. Any amount distributed pursuant to this clause (iii) shall, in the case of a Participant who is an Employee, be and be limited to the minimum amount required to be distributed pursuant to Code section 401(a)(9);
(iv) If a Participant's employment with the Company and its Affiliates terminates by reason of death, or if a Participant dies after his employment terminates but before a distribution commences from the Plan, then, unless the Participant's spouse is the Beneficiary, all of the Participant's interest in the Plan must be completely distributed within five years after the date of his death unless distributions begin within one year after the Participant's death; and
(v) to the extent permitted by law, Code section 40 1 (a)(9) and any related transitional rule are incorporated by reference into the terms of the Plan.
(b) Deferred Distributions. A Participant (or a spousal Beneficiary) may elect to defer the commencement of his distribution to any date on or prior to the April I of the calendar year next following the calendar year in which such Participant attains age 70-1/2.
7.6 Facility of Payment.
(b) Minors. In the event any amount is payable under the Plan to a minor, payment shall not be made to the minor, but instead shall be paid (i) to that person's then living parent(s) to act as custodian, (ii) if that person's parents are then divorced, and one parent is the sole custodial parent, to such custodial parent, or (iii) if no parent of that person is then living, to a custodian selected by the ESOP Committee to hold the funds for the minor under the Uniform Transfers or Gifts to Minors Act in effect in the jurisdiction in which the minor resides. If no parent is living and the ESOP Committee decides not to select another custodian to hold the funds for the minor, payment shall be made to the duly appointed and currently acting guardian of the estate for the minor or, if no guardian of the estate for the minor is duly appointed and currently acting within 60 days after the date the amount becomes payable, payment shall be deposited with the court having jurisdiction over the estate of the minor.
(c) Discharge. Any payment made under this Section 7.6 shall fully discharge, to such extent, the obligation of the Trustee to pay benefits under the Plan with respect to such Participant, Beneficiary or minor.
7.8 Absence of Guaranty. The Trustee, the ESOP Committee and the Employers in no way guarantee the Trust Fund from loss or depreciation. Moreover, the Employers do not guarantee any payment to any person. The liability of the Trust to make any payment is limited to the available Trust Fund.
7.9 Designation of Beneficiary. In the event of the death of a married Participant, the Participant's Account balance will be paid to his surviving spouse, except as otherwise provided below. Each Participant from time to time, by signing a form furnished by the ESOP Committee, may designate any legal or natural person or persons (who may be designated contingently or successively) to whom his benefits are to be paid if he dies before he receives all of his benefits; provided, however, that if a married Participant designates a Beneficiary other than his spouse, his spouse must consent in writing to such designation and acknowledge in writing the effect of such designation, and such consent and acknowledgement must be witnessed by a notary public. Any designation by an unmarried Participant shall be rendered ineffective by any subsequent marriage and any consent of a spouse shall be effective only as to that spouse.
A Beneficiary designation form will be effective only when the signed form is filed with the ESOP Committee while the Participant is alive and will cancel all Beneficiary designation forms signed earlier. If a deceased Participant fails to designate a Beneficiary as provided above (or if the designated Beneficiary dies before the Participant or before receiving complete payment of the Participant's benefits), the ESOP Committee shall direct the Trustee to pay the Participant's benefits as follows:
(b) second, to the children (including any adopted children) of the Participant, per stirpes; and
(c) third, if the Participant leaves no surviving spouse or has no descendants pursuant to paragraph (b) above, to the estate of the last to die of the Participant or his designated Beneficiary.
7.10 Missing Participants or Beneficiaries. Each Participant and each Beneficiary must file with the ESOP Committee from time to time in writing his post office address and each change of post office address. Any communication, statement or notice addressed to a Participant or Beneficiary at his last post office address filed with the ESOP Committee, or if no address is filed with the ESOP Committee, then, in the case of a Participant, at his last post office address as shown on his Employer's records, will be binding on the Participant and his Beneficiary for all purposes of the Plan. The Employers, the ESOP Committee and the Trustee will not be required to search for or locate a Participant or his Beneficiary. In the event that all, or any portion, of the distribution payable to a Participant or his Beneficiary hereunder shall, at the expiration of five years after it shall become payable, remain unpaid solely by reason of the inability of the ESOP Committee, after sending a communication, statement or notice to the last post office address filed with the ESOP Committee, to ascertain the whereabouts of such Participant or his Beneficiary, the amount so distributable shall be reallocated in the same manner as a Company Stock contribution would be allocated under the provisions of Section 5.4. In the event a Participant or his Beneficiary is located subsequent to his benefit being reallocated, such benefit shall be restored first from Trust (including the Supplemental Trust) earnings and second from an Employer Contribution made solely for restoration purposes. The allocation and restoration referred to above shall be effected by giving effect to the class of Company Stock reallocated.
7.11 Qualified Domestic Relations Order. In addition to payments made under Section 7 on account of a Participant's termination of employment, payments may also be made to an Alternate Payee (as defined below) prior to, coincident with, or after a Participant's termination of employment if made pursuant to a "qualified domestic relations order" (as defined in Code section 414(p)). The ESOP Committee shall establish reasonable procedures to determine the qualified status of domestic relations orders and to administer distributions under such qualified orders, including, in its sole discretion, the establishment of segregated accounts for Alternate Payees. The term "Alternate Payee" means any spouse, former spouse, child or other dependent of a Participant who is recognized by a Qualified Domestic Relations Order as having a right to receive all, or a portion of, the benefits payable under the Plan with respect to the Participant.
SECTION 8
Voting and Certain Dispositions of Company Stock
8.1 Voting.
(b) Unallocated and Uninstructed Shares.
(i) Part A. Each active Participant
(which shall be defined for purposes of Sections 8.1 and 8.2 to mean a
Participant who is an Employee) who directed the Trustee with respect to
shares allocated to his Account under Part A in accordance with Section
8.1(a) may, again as a named fiduciary, direct the Trustee with respect
to a portion of both the number of shares of Company Stock held in the
Loan Suspense Account and the number of such shares allocated to any Participant's
Account under Part A for which no instructions were timely, received by
the Trustee. Such portion shall be determined as follows:
(B) The number of shares of Company Stock determined
under clause (i)(A) shall be multiplied by a fraction, the numerator of
which is the number of shares of Company Stock allocable to Part A that
such Participant directed the Trustee in accordance with Section 8.1(a)
and the denominator of which is the aggregate number of shares allocable
to Part A that were directed by active Participants in the same Employee
Group in accordance with Section 8.1(a).
(ii) Part B. Each active Participant who directed the Trustee with respect to shares allocated to his Account under Part B in accordance with Section 8.1(a) may, again as a named fiduciary, direct the Trustee with respect to a portion of the number of such shares allocated to any Participant's Account under Part B for which no instructions were timely received by the Trustee. Such portion shall be determined as follows:
(B) The number of shares of Company Stock determined under clause (ii)(A) shall be multiplied by a fraction, the numerator of which is the number of shares of Company Stock allocable to Part B that such Participant directed the Trustee in accordance with Section 8.1(a) and the denominator of which is the aggregate number of shares allocable to Part B that were directed by active Participants in the same Employee Group in accordance with Section 8.1(a).
(C) Such Participant, as a named fiduciary,
shall be entitled to direct the Trustee, with respect to the number of
shares determined under clause (ii)(B).
(i) Allocated Shares. Each Participant (or Beneficiary) to whose ESOP Stock Account shares of Company Stock have been allocated may, as a named fiduciary within the meaning of ERISA section 403(a)(1), direct the Trustee with respect to the sale, exchange, transfer, conversion or other disposition of the shares of Company Stock allocated to his ESOP Stock Account, and the Trustee shall follow the directions of those Participants (and Beneficiaries) who provide timely instructions to the Trustee.
(ii) Unallocated and Uninstructed
Shares.
(II) The number of shares of Company Stock determined under clause (ii)(A)(I) shall be multiplied by a fraction, the numerator of which is the number of shares of Company Stock allocable to Part A that such Participant directed the Trustee in accordance with Section 8.2(a)(i) and the denominator of which is the aggregate number of shares allocable to Part A that were directed by active Participants in the same Employee Group in accordance with Section 8.2(a)(i).
(III) Such Participant, as a named fiduciary,
shall be entitled to direct the Trustee with respect to the number of shares
determined under clause (ii)(A)(11).
(II) The number of shares of Company Stock determined under clause (ii)(B)(1) shall be multiplied by a fraction, the numerator of which is the number of shares of Company Stock allocable to Part B that such Participant directed the Trustee in accordance with Section 8.2(a)(i) and the denominator of which is the aggregate number of shares allocable to Part B that were directed by active Participants in the same Employee Group in accordance with Section 8.2(a)(i).
(III) Such Participant, as a named fiduciary,
shall be entitled to direct the Trustee with respect to the number of shares
determined under clause (ii)(B)(II).
(c) Proceeds. For purposes of allocating the proceeds of any sale or exchange pursuant to a Control Transaction, the ESOP Committee or the independent record keeper, as the case may be, shall determine the portion, expressed as a percentage, of shares of each class tendered by the Trustee that were actually sold or exchanged (the "applicable percentage" for that class). For each class, the ESOP Committee or the independent record keeper, as the case may be, shall then treat as having been sold or exchanged from the portion of the Loan Suspense Account applicable to that Employee Group and each of the individual Accounts of Participants (and Beneficiaries) that number of shares (of that class) that is obtained by multiplying (i) the applicable percentage for that class, times (ii) the total number of shares in such Account of that class that were directed to be tendered, exchanged or sold in connection with the Control Transaction. The adjustments to individual Accounts shall be made by the ESOP Committee or the independent record keeper, as the case may be, on information supplied by the Company, the ESOP Committee or the Trustee.
(d) Actions To Be Taken Following a Control Transaction. Notwithstanding Section 4.2 or any other provision of this Plan or the Trust Agreement that requires that the Trust Fund be invested exclusively in shares of Company Stock, this Section 8.2(d) shall apply if a Control Transaction results in the sale or exchange or other disposition of any shares of Company Stock held in the Plan. If the consideration received by the Trust as a result of the Control Transaction consists solely of "appropriate securities" (as defined below), the terms of the Plan, all outstanding Acquisition Loans, and future sales under Additional Acquisition Loans, shall continue as if the Control Transaction had not occurred. If the consideration received includes cash, property or securities, other than appropriate securities, the Trustee shall invest the proceeds in appropriate securities to the extent possible; if the Trustee is able to reinvest all such proceeds in appropriate securities, the Plan, all outstanding Acquisition Loan and future sales under Additional Acquisition Loans, shall continue as if the Control Transaction had not occurred; if the Trustee is unable to reinvest all such proceeds in appropriate securities, then the Company shall make appropriate arrangements (which shall be reasonably satisfactory to ALPA and the IAM and shall take into account and recognize the position that ESOP Participants would have enjoyed had all of the shares of Class 1 Non-Voting Stock been sold to the ESOP on the Effective Date at a price per share equal to the purchase price with respect to the shares sold on the Effective Date) to protect the substantive interests of each Employee Group, provided, however, that it is not currently intended that such arrangements will consist of forgiveness of any portion of any Acquisition Loan. For purposes of this Section 8.2(d), "appropriate securities" shall mean stock (i) that is described in Code section 409(1), (ii) that is either common stock described in Code section 409 (1)(1) or preferred stock that converts into such common stock, and (iii) the issuer of which stock (A) has a Moody's senior long-term debt rating which is at least as good as the better of the Moody's senior long-term debt rating of the Company or United Airlines, Inc. at such time and (B) is a "public company" as defined in Article Fifth of the Articles of Incorporation of the Company.
(e) Special Funding Rules. (i) If (x) any person or persons commence (which, for purposes of this paragraph, shall mean-filing a tender offer statement on Schedule 14D-1 (or successor form) with the Securities and Exchange Commission or mailing appropriate solicitation materials to the shareholders) a bona fide tender offer or exchange offer for Company Stock which, if successful, would require the offeror (if a person other than the Company or any of its affiliates) to file a Form 13D (or successor form) with the Securities and Exchange Commission with respect thereto, or (y) the Board of Directors or shareholders approve a Control Transaction described in Section 1(q)(b), then all of the remaining shares of Class 1 Non-Voting Preferred Stock that are to be issued to the Plan pursuant to the Recapitalization Agreement shall be sold ("Top-Off Sale") by the Company to the Plan as soon as possible (and, in all circumstances, in adequate time to allow the Plan to respond to such event), pursuant to an Additional Acquisition Loan (conforming to the first sentence of Section 1.6(g) of the Recapitalization Agreement, provided that the consent of ALPA and the IAM required by that sentence shall not apply), unless and to the extent that ALPA and the IAM jointly request otherwise in writing. (All disputes between the Company and ALPA and the IAM as to whether any such tender offer or exchange offer is bona fide shall be made in accordance with the arbitration procedures described in Section 11.2(b)(ii)(G)-(J) hereof.) In the Company's sole discretion such Top-Off Sale may be made subject to a Condition that prevents, to the extent permitted by law, the consummation of such Top-Off Sale if the event in question does not result in the sale, exchange or other disposition of Company Stock, provided that such contingency does not materially interfere with the Plan's ability to so respond to the event in question. The purchase price of the shares of Class 1 Non-Voting Preferred Stock to be sold pursuant to this subsection (e) shall be the fair market value of such shares of Class 1 Non-Voting Preferred Stock.
(ii)(A) If a person or persons
make a bona fide offer to the Plan (not covered by paragraph (e)(i)) to
acquire, directly or indirectly, at least 5% of the Company Stock held
by the Plan (the "Offer"), such Offer shall be treated as if an event described
in (e)(i) and the resultant Top- Off Sale shall be effected in accordance
with (e)(i), subject, however, to the provisions of (e)(11)(B).
(C) Subject to the next sentence, the provisions
of (e)(ii)(B) shall not apply and the Top-Off Sale shall be made in accordance
with (e)(ii)(A) if following the (e)(ii)(B) procedures could reasonably
be expected to prevent a Top-Off Sale from being effected in adequate time
to allow the Plan to accept the Offer. Under the circumstances described
in this (e)(ii)(C), however, the Top-Off Sale shall be consummated immediately
before the consummation of the transaction contemplated by the Offer and
shall, to the extent legally permitted, be subject to the consummation
of the transaction contemplated by the Offer.
SECTION 9
Rights, Restrictions and Options on Company Stock
9.1 Right of First Refusal. If Company Stock distributed is not readily tradable on an established market (within the meaning of Code section 409(h)), any shares of Company Stock distributed by the Trustee shall be subject to a "Right of First Refusal." The Right of First Refusal shall provide that, prior to any subsequent transfer, such shares of Company Stock must first be offered in writing to the Trust and, if refused by the Trust, to the Company, at the greater of its independently appraised value as of the Valuation Date coinciding with or next preceding such offer, or the price stated in a bona fide written offer and on the same terms. The Trustee (on behalf of the Trust) and the Company, as the case may be, shall have a total of 14 days (from the date the Trust or the Company, as the case may be, receives the offer) to exercise the Right of First Refusal. The ESOP Committee shall determine whether a written offer from a prospective buyer has been made in good faith. A Participant (or Beneficiary) entitled to a distribution of Company Stock may be required to execute an appropriate stock transfer agreement (evidencing the Right of First Refusal) prior to receiving a certificate for Company Stock.
9.2 Put Option. If Company Stock distributed is not readily tradable on an established market (within the meaning of Code section 409(h)), the Company shall issue a "Put Option" to each Participant (or his Beneficiary) receiving a distribution of such Company Stock from the Plan. The Put Option shall permit the Participant (or his Beneficiary) to sell such Company Stock to the Company, at any time during two put option periods (described below), at the then fair market value, such fair market value to be determined at least annually as of the respective Valuation Date by an independent appraiser selected by the ESOP Committee. The first put option period shall be a period of at least 60 days beginning on the date of distribution of Company Stock to the Participant (or his Beneficiary). The second put option period shall be a period of at least 60 days beginning after the new determination of the fair market value of Company Stock is made by an independent appraiser (and notification is given to the Participant or his Beneficiary) in the next following Plan Year. The Company shall permit the Trustee, in its discretion, to purchase the Company Stock tendered to the Company under a Put Option. If the Company or the Trustee purchases Company Stock tendered under a Put Option and [he Company Stock was distributed to the Participant (or his Beneficiary) in the form of a lump sum, the payment, at the discretion of the Company or Trustee, may be made (a) in five substantially equal annual installments commencing not later than 30 days after the exercise of the Put Option- ' provided, however, that the purchaser provides adequate security and reasonable interest (as determined by the ESOP Committee) on unpaid installments, or (b) in a lump sum. If the Company or Trustee purchases Company Stock tendered under a Put Option and the Company Stock was distributed as part of an installment distribution, the payment, in the form of a lump sum, must be made not later than 30 days after the exercise of the Put Option. The Trustee. on behalf of the Trust, may offer to purchase any shares of Company Stock (which are not sold pursuant to a Put Option) from any former Participant or Beneficiary at any time in the future, at its then fair market value.
9.3 Share Legend. Shares of Company Stock held or distributed by the Trustee may include such legend restrictions on transferability as the Company may reasonably require in order to assure compliance with applicable federal and state securities laws. Except as otherwise provided in this Section 9, no shares of Company Stock held or distributed by the Trustee may be subject to a put, call or other option, or buy-sell or similar arrangement.
9.4 Nonterminable Rights. The provisions of this Section 9 shall continue to be applicable to Company Stock even if the Plan ceases to be an "employee stock ownership plan" (as defined under Code section 4975(e)(7)).
SECTION 10
Dividends
10.1 Class 1 Non-Voting Preferred Stock.
(i) Allocated Shares. Any cash dividends paid with respect to shares of Class 1 Non-Voting Preferred Stock allocated to the Participants' ESOP Stock Accounts which were acquired with the proceeds of a particular Acquisition Loan, but excluding dividends in excess of the Fixed Dividend paid on such Preferred Stock, shall be used by the Trustee to pay the principal balance of such Acquisition Loan.
(ii) Unallocated Shares. Any cash dividends paid with respect to shares of Class 1 Non-Voting Preferred Stock held in the Loan Suspense Account which were acquired with the proceeds of a particular Acquisition Loan, but excluding dividends in excess of the Fixed Dividend paid on such Preferred Stock, shall be used by the Trustee to pay the principal balance of such Acquisition Loan.
(iii) Any cash dividends described in clauses (i) or (ii) in excess of the principal balance of the Acquisition Loan which are attributable to prior fixed dividends that are not paid due to a lack of earnings and profits shall be used to pay interest on such Acquisition Loan if the Company made additional contributions to the Plan to make up for such unpaid fixed dividends.
(iv) Any cash dividends described in clauses (i) or (ii) above not used to repay the Acquisition Loan in accordance with clauses (i), (ii) or (iii) above shall be allocated pursuant to subsection (b) below as if they were dividends in excess of the Fixed Dividend.
(b) Application of Excess Dividend.
(i) Allocated Shares. Any cash dividends paid with respect to shares of Class 1 Non-Voting Preferred Stock allocated to the Participants' ESOP Stock Accounts in excess of the Fixed Dividend paid on such Preferred Stock shall be allocated to such Accounts, pro rata, according to the number of shares of such Preferred Stock held in such Accounts on the dividend record date; such amounts shall be used by the Trustee to purchase shares of Common Stock.
(ii) Unallocated Shares. Any cash dividends paid with respect to shares of Class 1 Non-Voting Preferred Stock held in the Loan Suspense Account in excess of the Fixed Dividend paid on such Preferred Stock shall be allocated among the Employee Groups in proportion to the allocation percentages set forth in Section 5.4(a)(i)(A). The amount allocated to each Employee Group shall then be allocated to the Participants from that Employee Group, pro rata, according to their Part A Account balances on the dividend record date; such amounts shall be used by the Trustee to purchase shares of Common Stock.
10.3 Special Allocated Share Rule. Any Financed Shares released from a Loan Suspense Account subaccount by reason of dividends paid with respect to Company Stock that was acquired with the proceeds of the Acquisition Loan applicable to that subaccount shall be allocated in the same manner as provided in Section 5.4(a) for Employer Contributions; provided, however, that prior to said allocation, Financed Shares so released from such subaccount with a fair market value (on the applicable dividend payment date) equal to the dividends allocated to Participants' ESOP Cash Accounts and applied to repay such particular Acquisition Loan as provided in Section 10.1 shall first be allocated among and credited to those ESOP Stock Accounts, pro rata, according to the amount of their dividends so applied. To the extent that the fair market value of the shares released from a subaccount is less than the dividends described in the foregoing proviso, Financed Shares released from other Loan Suspense Account subaccounts shall be used to make up the insufficiency (after first applying the foregoing proviso with respect to Financed Shares released from such other subaccount). Notwithstanding any provision of the Plan to the contrary, in any Plan Year the total dividends allocated to a Participant's ESOP Cash Account used to repay Acquisition Loan(s) shall not, to the extent required by law, exceed the fair market value of the Financed Shares released from the Loan Suspense Account and allocated to that Participant's Account.
SECTION 11
Administration
11.1 General. The Company shall be the administrator of the Plan and shall have the rights, duties and obligations of an "administrator" as that term is defined in ERISA section 3(16)(A) and of a "plan administrator" as that term is defined in Code section 414(g). Some administrative functions have been allocated to the ESOP Committee, which shall have the rights, duties and obligations set forth herein. The ESOP Committee shall be the "named fiduciary, " as described in ERISA section 402, with respect to its authority under the Plan, except to the extent provided in Section 8, for which each Participant (or Beneficiary) shall be the named fiduciary, and except with respect to the Initial Acquisition Loan and Additional Acquisition Loans and the use of the proceeds thereof to purchase Preferred Stock, for which the Trustee shall be the named fiduciary.
11.2 Membership and Authority.
(i) to adopt such rules of procedure and regulations for the proper and efficient administration of the Plan and as are consistent with the provisions of the Plan;
(ii) to enforce the Plan in accordance with its terms and with such applicable rules and regulations as may be adopted by the ESOP Committee-.
(iii) to determine all questions arising under the Plan, to resolve all ambiguities, to correct defects, to supply omissions, including the power to determine the rights or eligibility of Employees or Participants and their Beneficiaries and their respective benefits; provided, however, that the ESOP Committee will not have jurisdiction or power to add to or subtract from the Plan or any amendments thereto;
(iv) to give such directions to the Trustee with respect to the Trust Fund as may be provided in this Plan or in the Trust Agreement;
(v) to maintain and keep adequate books, records and other data as shall be necessary to administer the Plan, except those that are maintained by the Company or by the Trustee;
(vi) to direct all payments of benefits to Participants and Beneficiaries, consistent with the terms of the Plan and the Trust Agreement;
(vii) to establish an investment policy and objective for the Plan, except that it is understood that the Plan is designed to invest exclusively in Company Stock;
(viii) to elect a Chairman and to appoint a Secretary, who need not be a member of the ESOP Committee, who shall keep minutes of the proceedings and have custody of all records and documents pertaining to administration of the Plan;
(ix) to be agent for the service of legal process on behalf of the Plan;
(x) to authorize one or more of its members to execute any documents on behalf of the ESOP Committee, in which event the ESOP Committee shall notify the Trustee in writing of such action. The certificate of the Secretary or any authorized member of the ESOP Committee that the ESOP Committee has taken or authorized any action shall be conclusive in favor of any person relying on such certificate;
(xi) to obtain an independent appraisal of the fair market value of the Company Stock held by the Trust from an independent appraiser who meets the requirements of Code section 170(a)(1); and
(xii) perform any other acts, consistent with the Plan and Trust Agreement, necessary or appropriate to the administration of the Plan and the discharge of its duties.
(b) Special Provisions.
(i) If the ESOP Committee unanimously agrees that a matter affects members of only one Employee Group, the matter shall be considered by an ESOP Committee consisting solely of members who were appointed on behalf of such Employee Group, which appointees must act by a majority vote, and the provisions of this Section 11.2 shall be construed accordingly. If the ESOP Committee is unable to agree unanimously that the matter affects only members of one such Employee Group, the jurisdictional determination, that is, whether the matter affects only members of one such Employee Group, shall be made by a neutral arbitrator selected in accordance with clause (iii) below.
(ii) As set forth in Section
12.3, the ESOP Committee will have the exclusive power to hear and determine
all appeals of claims denied under Section 12.2 of the Plan pursuant to
the procedures hereinafter provided. With respect to such disputes, the
ESOP Committee will function as a System Board of Adjustment as provided
in Title 11 of the Railway Labor Act, as amended, and the following provisions
will govern:
(B) The ESOP Committee will establish rules of procedure for the conduct of appeals before it, which rules will not be inconsistent with the provisions of the Plan. Insofar as possible, such procedures will follow the procedure of the American Arbitration Association. The Chairman will promptly advise the Company, the IAM and ALPA of such rules of procedure.
(C) All appeals properly referred to the ESOP Committee for consideration will be addressed to the Chairman in the form of a submission as prescribed by the rules of procedure. Six copies of each submission, including all papers and exhibits in connection therewith, will be forwarded to the Chairman, who will promptly transmit one copy thereof to each member of the ESOP Committee. The submission in each dispute will include the question to be decided by the ESOP Committee, the provisions of the Plan involved in the dispute, the position of the petitioner and all asserted facts supporting such position.
(D) The submission will state the names of the parties to whom the petitioner sent copies of the submission. A copy of the submission will be served by the petitioner upon ALPA, the IAM and the Company.
(E) The submission will state whether or not the petitioner requests both a hearing on the facts and oral argument, or only oral argument. The answer of each party may request a hearing on the facts and oral argument or only oral argument. If neither the submission nor any answer requests a hearing, the ESOP Committee may waive a hearing and dispose of the dispute on the basis of the submission and answers.
(F) When a hearing has been requested in a dispute, the ESOP Committee will fix a date for such hearing as soon as reasonably possible after receipt of the submission. The date for the hearing will not be more than 60 days after receipt of the submission (unless circumstances require a longer period which can be no more than 60 days). If two or more members of the ESOP Committee consider the question involved in the dispute to be of sufficient urgency, the ESOP Committee may fix an earlier date, which will not be less than ten days after filing of the answer. If requested by the ESOP Committee or the Participant, a transcript of each proceeding will be made and retained in the files of the ESOP Committee. Such hearing will be heard at the Company's Executive Offices in Elk Grove Township, Illinois, unless the entire ESOP Committee, by a majority vote, otherwise determines.
(G) Appeals before the ESOP Committee shall be decided by a majority vote of the members of the ESOP Committee. However, a majority of the members of the ESOP Committee appointed on behalf of any Employee Group has the power to require that any submission (except for matters described in subsection (iv) below) be referred for decision to a neutral arbitrator. Furthermore, if the ESOP Committee deadlocks in the case of any vote, the matter shall be referred for decision to a neutral arbitrator. In any case in which a neutral arbitrator is to be appointed, the parties will, within 10 days after notice of the need to appoint a neutral arbitrator, agree upon a neutral arbitrator. If the parties fail to agree upon the selection of a mutually acceptable neutral arbitrator the parties will select an arbitrator by alternate striking from a panel of arbitrators supplied by the American Arbitration Association, preferably a panel with knowledge of employee stock ownership plans. When an neutral arbitrator is selected, the power to take further action with respect to the dispute shall rest with the neutral arbitrator until the final decision is made in the dispute,
(H) When a neutral arbitrator is selected, any party to a dispute may make a written request to the neutral arbitrator for a further hearing or oral argument provided it is made within 15 days after such selection. The neutral arbitrator will decide such requests. If no further hearing or argument is held, the neutral arbitrator will consider and review the prior record in the dispute. The decision of the neutral arbitrator will be rendered within 30 days after the close of any further hearing or argument. The neutral arbitrator shall decide the matter based upon the record before him and the terms of the Plan and shall not give weight to any previous votes of the ESOP Committee concerning the matter.
(I) The decision of the ESOP Committee, or neutral arbitrator, if any, will be final and binding upon the Company, ALPA, the [AM, a Participant or Beneficiary and any other person claiming under the Plan.
(J) Subject to Section 11.12, the expenses and
reasonable compensation of the neutral arbitrator selected as provided
herein shall be borne by the Company.
(iv) The ESOP Committee is the named fiduciary with respect to the management and disposition of assets held in the Trust Fund. The power of a majority of the members of the ESOP Committee appointed on behalf of any Employee Group to require that a matter be referred to a neutral arbitrator shall not apply to a matter if it concerns the exercise of authority respecting management or disposition of assets held in the Trust Fund. Notwithstanding the preceding sentence, the power of a majority of the members of the ESOP Committee appointed on behalf of any Employee Group to require that a matter be referred to a neutral arbitrator shall apply if (A) the matter does not involve a Control Transaction and (B) it is reasonably determined that the resolution of such matter might reasonably be expected to subject the Company to a material liability. Any dispute with respect to the application of this clause (iv) shall be resolved in accordance with the arbitration procedures described in Section 11.2(b)(ii)(G)-(J).
11.4 Information To Be Furnished to ESOP Committee. The Employers shall furnish the ESOP Committee such data and information as may be reasonably required to administer this Plan; provided, however, that the preceding phrase shall not in any case restrict the ability of ESOP Committee members to see individual Account data with respect to the Participants in the Employee Groups they represent and, provided, further, that individualized information shall be treated in a confidential manner. The ESOP Committee shall be entitled to rely on any information furnished by the Employers that is needed for calculation of benefits due under the Plan, or any matters relating to administration of the Plan. A Participant or Beneficiary entitled to benefits under the Plan must furnish to the ESOP Committee such evidence, data or information as the ESOP Committee considers desirable to carry out its obligations under the Plan. Any benefits under the Plan may be conditional upon the prompt submission of such information.
11.5 ESOP Committee's Decision Final. Except as otherwise provided herein, to the extent permitted by law, any interpretation of the Plan and any decision on any matter within the discretion of the ESOP Committee made by the ESOP Committee in good faith is binding on all persons. Except as provided in ERISA section 405, a dissenting member is not responsible for any action or failure to act if within a reasonable time he registers his dissent with the other members, the Company and the Trustee.
11.6 Remuneration and Expenses. No remuneration shall be paid to any ESOP Committee member who is an Employee of the Company or an Affiliate for services performed hereunder. However, subject to Section 11.12, the reasonable expenses of an ESOP Committee member incurred in the performance of an ESOP Committee function shall be reimbursed by the Employers. For purposes of the preceding sentence, flight pay loss and pay loss for each IAM member shall be treated as an expense.
11.7 Indemnification of the ESOP Committee. To the extent permitted by applicable law, the ESOP Committee and its members and any employee, director, or officer of the Company or its Affiliates, shall be indemnified by the Company against any and all liabilities, settlements, judgments, losses, costs, and expenses (including reasonable legal fees and expenses) of whatever kind and nature which may be imposed on, incurred by or asserted against them by reason of the performance or nonperformance of their duties in connection with the Plan if such action or inaction did not constitute gross negligence or willful misconduct. Furthermore, the Company agrees to indemnify any such persons against any liability imposed as a result of a claim asserted by any person or persons under federal or state law where such persons act in good faith or in reliance on a written direction or certification of the Company. The foregoing right of indemnification shall be in addition to other rights such persons may have by law or by reason of insurance coverage of any kind. The Company may, at its own expense, settle any claim asserted or proceeding brought against any such persons when such settlement appears to be in the best interests of the Company. If the Company obtains fiduciary liability insurance to protect the ESOP Committee or any of its members, the provisions of this Section 11.7 shall be applicable only to the extent that such insurance coverage is insufficient. The Company shall secure fidelity bonding for the fiduciaries of the Plan, as required by ERISA section 412 and shall secure insurance for ESOP Committee members coextensive with any ERISA insurance coverage provided to any member of the Board of Directors or, if more favorable, to any Employee.
11.8 Resignation or Removal of ESOP Committee Member. An ESOP Committee member may resign at any time by -delivering his written resignation to the Company. Each of the Company, ALPA and the IAM may remove its ESOP Committee members for any reason. In addition, the Company, at its discretion, may remove any ESOP Committee member for cause upon delivery of written notice to him. Except as provided in the preceding sentence, such resignation or removal, as the case may be, shall become effective only upon the appointment of a qualifying successor member being duly appointed in accordance with Section 11.9. For purposes hereof, "cause" shall be construed to mean an action permitting a member of the Board of Directors to be for cause.
11.9 Appointment of Successor ESOP Committee Members. ALPA, the IAM or the Company, as the case may be, shall, in accordance with the composition of the ESOP Committee described in Section 11.2, promptly fill any vacancy in the membership of the ESOP Committee and shall give prompt written notice thereof to the other ESOP Committee members, the Company and the Trustee.
11.10 Interested ESOP Committee Member. A member may not decide or determine a,ny matter or question concerning his own benefits under the Plan or as to how they are to be paid to him unless either such decision could be made by him under the Plan if he were not a member of the ESOP Committee, or such decision applies to all affected Participants similarly. If a member is disqualified to act, and the remaining members of the ESOP Committee cannot agree on a decision, ALPA, the IAM or the Company, as the case may be, may appoint a temporary member to exercise the powers of the interested member concerning the matter as to which he is disqualified.
11.11 Compliance with Laws. Notwithstanding anything in the Plan or the Trust Agreement to the contrary, every individual who is a fiduciary with respect to the Plan shall exercise his responsibilities with respect to the Plan in a manner consistent with ERISA and other applicable laws.
11.12 Expenses of the Plan and Trust. All reasonable expenses of administering the Plan and Trust shall be charged to and paid by the Employers; provided, however, that, in the case of a dispute between the Company and the Committee, the reasonableness of any expense shall be determined without regard to Sections 11.5 and 11.2(b)(ii)(1), and, provided, further, that in the event of any disagreement with respect to the reasonableness of an expense, neither a determination of the ESOP Committee that an expense is reasonable nor a determination by the Company that an expense is unreasonable shall be accorded any presumption of correctness. Unless the Company and ESOP Committee otherwise agree, such disagreement shall be resolved through the judicial process and the Company shall pay the reasonable expenses of litigation (and with regard to these expenses, the ESOP Committee's determination of reasonableness shall be conclusive). The reasonableness of any expense with respect to the Plan or Trust shall be determined by taking into account, inter alia, (a) the appropriateness and magnitude of the expense, (b) comparative reference to the types and amounts of expenses incurred by other very large employee stock ownership plans that own a significant portion of the employer's outstanding stock, (c) the complexity and size of this Plan and (d) the special purposes for which this Plan was established. Payment of expenses shall not be deemed to be Employer Contributions.
SECTION 12
Claims Procedure
12.1 Written Claim. The Company, which may delegate its authority, shall be the fiduciary for the initial decision on claims for benefits under the Plan. A Participant (or Beneficiary) may present a claim to the Company for any unpaid benefits. The Company shall establish procedures for action upon claims initially made and the communication of a decision to the claimant promptly and, in any event, not later than 90 days after the claim is received, unless special circumstances require an extension of time for processing the claim. If an extension is required, notice of the extension shall be furnished the claimant prior to the end of the initial 90-day period, which notice shall indicate the reasons for the extension and the expected decision date. The extension shall not exceed 90 days. The claim may be deemed by the claimant to have been denied for purposes of further review described below in the event a decision is not furnished to the claimant within the period described in the three preceding sentences. If the claim for benefits is wholly or partially denied, the Company shall notify the Participant (or Beneficiary) in writing of such denial of benefits within 90 days after the Company initially received the benefit claim. Such 90-day period may be extended for an additional 90 days if the Company provides written notice of the extension to the claimant prior to the termination of such 90-day period and the extension is based on special circumstances.
12.2 Notice of Denial. A notice of a denial of benefits shall advise the Participant (or Beneficiary) of:
(b) the specific provisions of the Plan on which the denial is based;
(c) any additional material or information necessary for the Participant (or Beneficiary) to perfect his claim and an explanation of why such material or information is necessary; and
(d) the steps which the Participant (or Beneficiary) must take to have his claim for benefits reviewed.
12.4 Notices. All notices denying a claim for benefits, and all decisions on requests for a review of the denial of a claim for benefits, shall be written in a manner calculated to be understood by the Participant (or Beneficiary) filing the claim or requesting the review.
SECTION 13
Amendment and Termination
13.1 Amendment.
(b) With respect to selected "intragroup matters," however, the Company may amend the Plan with respect to the Salaried and Management Group and shall amend the Plan as reasonably requested by ALPA and the IAM for their respective Employee Groups. An amendment relates to an "intra-group matter" only if it relates to eligibility, or allocation and does not relate to any other matter, including, without limitation, withdrawal, loan, voting, vesting or fiduciary provisions; provided, however, that no amendment may be made which shall disqualify the Plan or extend allocations hereunder beyond the year 2000 or affect the pace of allocations of Company Stock in a manner that would adversely affect the Plan's projected ability to meet the requirements of Code Section 415(c)(6) (which last requirement may be waived by ALPA). Notwithstanding the preceding sentence, with respect to an intragroup matter, the Company need not and cannot (without the required consent) adopt any amendment if it would entail an additional annual expense in excess of approximately $25,000 or if the Company reasonably believes the Company will be exposed to a material liability if the amendment is adopted and, provided, further, that disputes under this subsection (b) shall be resolved by the arbitration procedures of Section 11.2(b)(ii). Finally, the Company may not adopt with respect to Management and Salaried Employees and neither ALPA nor the IAM may require the Company to adopt more than three amendments under this Section 13.1(b) and, in the case of the ALPA Employee Group and the Management and Salaried Employee Group, no amendment may require that allocations be based on factors other then Compensation, Account balances, dividends, and dividend credits.
(c) ALPA and the IAM shall be accorded an adequate opportunity to review any submission referred to in the first sentence of Section 7(a) of the Preferred Stock Purchase Agreement, and they shall have the right to participate in the consideration of any amendment required by the second sentence of Section 7(a) of the Preferred Stock Purchase Agreement. If an amendment to the Plan or Trust is required to result in the issuance of a determination letter described in such Section 7(a), and if there is more than one form of amendment that would result in such issuance, the Company, ALPA, and the IAM shall agree on the form of such amendment; provided, that if the three persons cannot timely agree, an arbitrator shall be immediately selected pursuant to the procedures set forth in Section 11.2(b)(ii). Such arbitrator shall select the amendment that would result in such issuance and that best carries out the purposes of this Plan at a reasonable expense.
(d) Finally, the approval of ALPA and the IAM shall not be required with respect to an amendment if such amendment (w) is in connection with an extension of an Acquisition Loan in accordance with its terms, (x) extends the allocation period applicable to the Salaried and Management Group, (y) will not cause any extension in the allocation period applicable to the ALPA Employee Group or the IAM Employee Group, and (z) the failure to adopt the amendment would make it impossible to successfully complete the steps described in Section 5.4(a)(i) through (vii) without changing the percentages set forth in Section 5.4(a)(i)(A). The Company agrees that its authority to extend an Acquisition Loan shall be conditioned on enactment of an amendment accomplishing the goals of the prior sentence. ALPA and the IAM shall have the unilateral power to require the Company to extend an Acquisition Loan and adopt an amendment identical to that described in the preceding two sentences, so long as the protections described in the preceding two sentences are accorded to the Employee Groups for which the amendment is not required.
(e) An amendment under Subsection (b) or (d) shall not be effective unless advance notice of at least 10 days before adoption is given to ALPA, the IAM, and the Board of Directors. Such advance notice may be waived by the party to whom notice is otherwise due.
13.3 Merger and Consolidation of Plan; Transfer of Plan Assets. No merger or consolidation with, or transfer of assets to, any other plan may be effected without the consent of ALPA and the IAM. In the case of any merger or consolidation with, or transfer of assets and liabilities to, any other plan, provisions shall be made so that each Participant in the Plan on the date thereof, if the Plan was then terminated, would receive a benefit immediately after the merger, consolidation or transfer that is equal to or greater than the benefit he would have been entitled to receive immediately prior to the merger, consolidation or transfer, if the Plan had then terminated. Notwithstanding the preceding language, in the event of a merger, if the surviving corporation of the merger agrees to continue the Plan, no termination or partial termination will be deemed to have occurred. This Section 13.3 does not apply to transfers or rollovers described in Sections 7.1 and 7.5.
13.4 Distribution on Termination. If, on termination of the Plan, a Participant remains an Employee of his Employer or any of its Affiliates, the amount of the Participant's benefits may be retained in the Trust until after the Participant's termination of employment with his Employer and any of its Affiliates and shall be paid to such Participant or, in the event of the Participant's death, to his Beneficiary, in a lump sum. The benefits payable to a Participant whose employment with his Employer or any of its Affiliates is terminated coincident with the termination of the Plan shall be paid to the Participant or, in the event of the Participant's death, to his Beneficiary, in a lump sum. All appropriate accounting provisions of the Plan will continue to apply until the benefits of all affected persons have been distributed to them. Affected Participants will be notified of an amendment, termination or partial termination of the Plan, as required by law.
SECTION 14
Top-Heavy Provisions
14.1 Top-Heavy Provisions. If, as of the last day of the first Plan Year, or thereafter, if as of the day next preceding the beginning of any Plan Year (the "Determination Date"), the Plan is a "top-heavy plan" (determined in accordance with the provisions of Code section 416(g)) that is, the aggregate present value of the accrued benefits and account balances of all "Key Employees" (within the meaning of Code section 416(i) and for this purpose using the definition of Compensation, as modified under Section 5.5(b)) and their Beneficiaries exceeds 60% of the aggregate present value of the accrued benefits and account balances of all Participants and Beneficiaries, the amendments specified in this Section 14 will automatically become effective as of the first day of the Plan Year. For purposes of the above sentence, the aggregate present value of the accrued benefits and account balances of a Participant who has not performed any services for the Company or any of its Affiliates during the five year period ending on the Determination Date shall not be taken into account. This calculation shall be made in accordance with Code section 416(g), taking into consideration plans which are considered part of the Aggregation Group. The term "Aggregation Group" shall include each plan of the Company or any of its Affiliates that includes a Key Employee and each plan of the Company or any of its Affiliates that allows the Plan to meet the requirements of Code section 401(a)(4) or Code section 410 and may include any other plan of the Company or any of its Affiliates, if the Aggregation Group would continue to meet the requirements of Code sections 401(a)(4) and 410.
14.2 Amendments.
(i) three percent of his Compensation for the Plan Year; and
(ii) a percentage of his Compensation equal to the largest percentage obtained by dividing the sum of the amount credited to the Accounts of any Key Employee by that key Employee's Compensation; and
(b) Code section 415(e). Section 5.5 will be
amended to provide that the dollar limitations in the denominators of the
"defined benefit plan fraction" and "defined contribution plan fraction"
(as such terms are defined in Code section 415(e)) will be multiplied by
1.0 instead of 1.25. However, the above sentence shall not apply if "four
percent" is substituted for "three percent" in paragraph (a) above.
14.4 Special Rule. The provisions of this Section 14 shall not apply to Employees included in a unit of Employees covered by a collective bargaining agreement to the extent provided by Code section 416(i)(4).
SECTION 15
Miscellaneous
15.1 Qualification. The Plan is designed and intended to comply with the requirements of Code section 401(a) so that contributions and the income on assets in Participants' Accounts will be exempt from Federal income tax until distributed. Accordingly, the adoption of the Plan and the implementing Trust and contributions hereunder are contingent upon and subject to obtaining a written determination of the Internal Revenue Service that the Plan complies with the requirements of Code section 401(a) and that the Trust is exempt from taxation under Code section 501(a).
15.2 Reversions to Employer. All contributions hereunder are expressly conditioned on their deductibility under Code section 404 and the initial qualification of the Plan. Notwithstanding anything to the contrary contained in the Plan, or in any amendment hereto, if (a) any contribution has been made by an Employer by a mistake of fact, or (b) the initial qualification of the Plan under Code section 401(a) has been denied, or (c) any deduction for a contribution has been disallowed, the Trustee shall return the entire Trust assets if clause (a) applies or such contribution (or the value thereof if lower than the amount of such contribution) to the Company, but in no event shall any such return be made after the expiration of one year following (i) the payment thereof in the case of clause (a) above, (ii) the denial of qualification in case of clause (b) above, or (iii) the disallowance of the deduction in the case of clause (c) above; provided, however, that prior to any such return, Appropriate Arrangements shall be made with ALPA and the IAM to protect the substantive rights of each Employee Group under the Plan.
15.3 Governing Law. The Plan shall be construed and administered according to the laws of the State of Illinois to the extent that such laws are not preempted by the laws of the United States of America.
15.4 Notices. Any notice, communication or document required hereunder to be given to, or filed with, the ESOP Committee, any union, the Company or any other person shall be properly given or filed if it is in writing and delivered in person or by mail (including federal express, telex and facsimile transmission) addressed,
6400 Shafer Court
Suite 700
Rosemont, IL 60018
Telephone: (708) 292-1700
Telecopy: (708) 292-1760
Attention: Captain Roger D. Hall
If to IAM, to:
and Aerospace Workers
9000 Machinists Place
Upper Marlboro, MD 20772-2687
Telephone: (301) 967-4500
Telecopy: (301) 967-4591
Attention: William L. Scheri
IAM District Lodge 141
321 Allerton Avenue
South San Francisco, CA 94080
Telephone: (415) 873-0662
Telecopy: (415) 873-1676
Attention: Kenneth W. Thiede
If to the Company, to:
UAL Corporation
1200 E. Algonquin Road
Elk Grove Township, IL 60007
Telephone: (708) 956-2400
Telecopy: (708) 9524683
Attention: Chief Executive Officer and Chief Legal Officer
If to any other person, to:
such address or telecopy number as such person may hereafter specify for such purpose.
15.5 Evidence. Evidence required of anyone under the Plan may be by certificate, affidavit, document or other information which the person acting on it considers pertinent and reliable, and signed, made or presented by the proper party or parties.
15.6 Action by Employer. Any action required or permitted to be taken by an Employer under the Plan (including any power of the Company to amend or to terminate the Plan as provided herein) shall be by resolution of its board of directors or by a person or persons authorized by its board of directors.
15.7 Execution. To record the adoption of this Plan, the undersigned duly authorized officers of the Company have caused this document to be executed and to bear the corporate seal of the Company, all as of the Effective Date.
15.8 Adjustments. This Plan contains various references to Class 1 and/or Class 2 Non-Voting Preferred Stock. If and to the extent appropriate, an appropriate revision shall be made to such references if the outstanding number of shares of Class 1 and/or Class 2 Non-Voting Preferred Stock is changed into, or exchanged for, a different number or kind of shares or securities of the Company through a reorganization or merger, or through a combination, recapitalization, reclassification, stock consolidation or otherwise.
UAL CORPORATION
Dated: July 12, 1994 By: J.R. O'Gorman
Title: Executive Vice President
</HTML>
</TEXT>
</DOCUMENT>
<TYPE> EX-10.5
<TEXT>
<HTML>
Exhibit 10.5
FIRST AMENDMENT
OF
UAL CORPORATION
EMPLOYEE STOCK OWNERSHIP PLAN
(Effective as of July 12, 1994)
By virtue and in exercise of the amending power reserved to UAL Corporation (the "Company") under section 13.1(a) of the UAL Corporation Employee Stock Ownership Plan (Effective as of July 12, 1994) (the "Plan"), which amending power thereunder is subject to the approval of the Air Line Pilots and Association, International ("ALPA") and the International Association of Machinists and Aerospace Workers (the "IAM"), the Company hereby amends the Plan, as follows, effective July 12, 1994:
1. Section 1(g), defining "ALPA Employee Group" is amended to read as follows effective July 12, 1994:
(i) With respect to those members of the ALPA Employee Group who are paid in the month following the month in which their services are performed, Compensation has the meaning set forth in the preceding two sentences, with the following modifications: (x) with respect to the 1994 Plan Year, "Compensation" means Compensation paid during the period beginning August 1, 1994 and ending with the payment of the second regular paycheck of January, 1995 as such Compensation relates to services performed during the period beginning on July 13, 1994 and ending on December 31, 1994; (y) with respect to Plan Years 1995 through 1999, "Compensation" means Compensation paid during the period beginning on the day after the payment of the second regular paycheck during such Plan Year and ending with the payment of the second regular paycheck of the next Plan Year as such Compensation relates to services performed during the Plan Year; and (z) with respect to the Plan Year 2000, "Compensation" means Compensation paid during the period beginning with the day after the payment of the second regular paycheck in such year and ending with the payment of the second regular paycheck in May, 2000 as such Compensation relates to services performed during the period beginning on January 1, 2000 and ending on April 12, 2000.
(ii) With respect to the members of the Management and Salaried Group and with respect to those members of the ALPA Employee Group who are not paid in the month following the month in which their services are performed, Compensation for a particular Plan Year shall include Compensation paid in the first and second paychecks received in the next Plan Year to the extent such Compensation relates to services performed in the earlier Plan Year. For purposes of the foregoing, the Company shall determine the extent to which Compensation from the first and second paychecks received in a Plan Year relate to services performed in a particular Plan Year according to the Company's month-end time recording documents which are timely received (according to Company policies and procedures), and if such month-end time recording documents are not timely received, according to the reasonable assumptions adopted by the Company. Notwithstanding the previous two sentences, only Compensation from the first paycheck received in the next Plan Year shall count as Compensation for the earlier Plan Year if the base pay taken into account in such first paycheck solely relates to services performed in the Plan Year in which such paycheck was received.
(iii) Notwithstanding anything to the contrary herein, no payment shall be counted as Compensation in more than one Plan Year."
"In clarification of the foregoing provisions of Section 1(yy)(i)(A), the Wage Investment for a member of the IAM Employee Group shall exclude (i) from the Effective Date through October 29, 1994, each period in which the temporary reclassification as a salaried, managerial or non-union employee of a member of the IAM Employee Group is evidenced by Form UG-100 placed in the personnel record of such member by the Employer, including an actual change in the job code, but excluding any periods during which a temporary reclassification occurs on a limited basis and is only evidenced by a payroll certification, and (ii) effective October 30, 1994, each hour or fraction thereof when such member is reclassified and is treated, for payroll and other purposes, as a salaried, managerial or non-union employee.
"Notwithstanding the foregoing provisions of this Section 1(yy), only hours reflecting compensation received on the first paycheck received in the next Plan Year shall count towards calculation of the Wage Investment for an earlier Plan Year if the base pay taken into account in such first paycheck solely relates to services performed in the Plan Year in which such paycheck was received. Notwithstanding anything to the contrary herein, no hours shall be counted towards calculation of a Participant's Wage Investment in more than one Plan Year."
IN WITNESS WHEREOF, the Company has caused this First Amendment to be
executed on December 28, 1994.
UAL CORPORATION
/s/ Stuart I. Oran
Stuart I. Oran
Executive Vice President
Corporate Affairs and
General Counsel
Approved by:
AIR LINE PILOTS ASSOCIATION,
INTERNATIONAL ASSOCIATION
INTERNATIONAL
OF MACHINISTS AND AEROSPACE
WORKERS
/s/ Harlow B. Osteboe /s/Kenneth W. Thiede
</HTML>
</TEXT>
</DOCUMENT>
<TYPE> EX-10.6
<TEXT>
<HTML>
UAL CORPORATION
EMPLOYEE STOCK OWNERSHIP PLAN
(Effective as of July 12, 1994)
By virtue and in exercise of the amending power reserved to UAL Corporation (the "Company") under Section 13.1(a) of the UAL Corporation Employee Stock Ownership Plan (effective as of July 12, 1994) (the "Plan"), which amending power thereunder is subject to the approval of the Air Line Pilots Association International ("ALPA") and the International Association of Machinists and Aerospace Workers (the "IAM"), the Company hereby amends the Plan, subject to the approval of ALPA and the IAM, as follows, effective January 1, 1995. The amendments to Section 1(p) and 1(yy) as set forth below are intended to document the previously-existing interpretation of the Plan, rather than to accomplish a substantive change to the Plan.
1. The following is hereby inserted as a new paragraph at the end of the material labelled "Part A" which precedes Section 1:
ALPA Employee Group - 32.234549%
IAM Employee Group - 47.036084%
Management and Salaried Employee Group - 20.729367%"
"APPENDIX A
SPECIAL ANNUAL ALLOCATIONS
This Appendix A is part of the UAL Corporation Employee Stock Ownership Plan. The purpose of this Appendix A is to set forth the terms of the Special Annual Allocation referred to in Section 5.4(f) of the ESOP. This Appendix A may only be amended pursuant to Section 13.1 of the ESOP.
Special Annual Allocation for 1995. For the Plan Year beginning January 1, 1995, there shall be two Special Annual Allocations. The first Special Annual Allocation is described in subsection (a) below, and is intended to provide to the accounts of certain Participants who are members of the IAM Employee Group the shares of Class 1 Non-Voting Preferred Stock which would have been provided in 1994, but for the application of the limits of Code Section 415. The second Special Annual Allocation is described in subsection (b) below, shall be made to all individuals who were Participants in 1994, and is intended to adjust the Accounts of Participants to the levels which had originally been reported to Participants in the allocation of shares for 1994, but which were overstated because additional Compensation and Wage Investments were subsequently reported for 1994. The second Special Annual Allocation is also intended to adjust the Accounts of Participants whose accounts had not been overreported so that their allocations will be on a par with the allocations to the Participants described in the preceding sentence.
(a) Special Annual Allocation for IAM Employee Group. A portion of the Employer Contributions allocated to the IAM Employee Group for 1995 shall be allocated to the Accounts of those Participants who are members of the IAM Employee Group to whom Contributions were limited by the application of Code Section 415 for the 1994 Plan Year. For each such Participant, the shares which would have been allocated but for the application of the limits of Code Section 415 are referred to as the "1994 Shortfall Shares." For purposes of calculating the Special 1995 IAM Allocation, there shall be calculated the "1995 IAM Average Contribution," which shall be equal to the total Employer Contributions allocated to the IAM Employee Group for the 1995 Plan Year, divided by the total number of shares of Class 1 Non-Voting Preferred Stock allocated to the IAM Employee Group for the 1995 Plan Year, excluding, however, the shares allocated to the IAM Employee Group for the 1995 Plan Year on account of dividends paid on previously-allocated shares.
(1) Amount to be included in tentative allocation. The following amount shall be included in the tentative allocation under Section 5.4(a)(iii) as the Special Annual Allocation to each affected Participant: the lesser of (i) the sum of (xx) the 1995 IAM Average Contribution times the Participant's 1994 Shortfall Shares, plus (yy) $8.8872, times the Participant's 1994 Shortfall Shares, times a fraction the numerator of which is the 1995 IAM Average Contribution, and the denominator of which is the fair market value of a share of Class 1 Non-Voting Preferred Stock as of the end of the 1995 Plan Year, or (ii) the allocation permitted for 1995 pursuant to Code Section 415.
(2) Shares to be included in hypothetical share number and hypothetical allocation. The following number of shares is to be included in the hypothetical share number under Section 5.4(c)(ii) and Section 2.4(a) of the Supplemental Plan as the Special Annual Allocation for each affected Participant: the sum of (i) the 1994 Shortfall Shares, plus (ii) $8.8872 times the Participant's 1994 Shortfall Shares divided by the fair market value of a share of Class 1 Non-Voting Preferred Stock as of the end of the 1995 Plan Year.
(b) 1995 Special Annual Allocation for All Employee Groups. For each individual who was a Participant in 1994 (a "1994 Participant"), there shall be calculated a number of shares referred to as the "1995 Make-up Shares." The 1995 Make-up Shares for each 1994 Participant shall equal the difference between the number of shares actually allocated to the 1994 Participant for the 1994 Plan Year (using the final Compensation and Wage Investment data), and the number of shares which would have been allocated to the 1994 Participant for the 1994 Plan Year if the following facts had been correct for the 1994 Plan Year: (1) the total Compensation of Participants who were members of the ALPA Employee Group (without respect to the limitations of Code Section 401(a)(17) and the limitation contained in Section 1(p) of four times the dollar limit under Code Section 415(c)(1)(A)) was $415,308,677.81, (2) the total Compensation of Participants who were members of the ALPA Employee Group (limited by the limitation contained in Section 1(p) of four times the dollar limitation under Code Section 415(c)(1)(A)) was $375,772,138.78, (3) the total Compensation of ALPA Participants (without respect to the limitation contained in Section 1(p) of four times the dollar limit under Code Section 415(c)(1)(A), but limited by Code Section 401(a)(17)) was $407,265,547.88, (4) the total Wage Investments were $91,675,662.89, (5) the total Compensation of members of the Management and Salaried Employee Group (without respect to the limitation of Code Section 401(a)(17)) was $346,925,400.49, and (6) the total Compensation of members of the Management and Salaried Employee Group (limited by Code Section 401(a)(17)) was $345,997,953.17.
For purposes of calculating the 1995 Special Annual Allocation, there shall be calculated (x) the "1995 ALPA Average Contribution," which shall be equal to the total Employer Contributions allocated to the ALPA Employee Group for the 1995 Plan Year, divided by the total number of shares of Class 1 Non-Voting Preferred Stock allocated to the ALPA Employee Group for the 1995 Plan Year, excluding, however, the shares allocated to the ALPA Employee Group for the 1995 Plan Year on account of dividends paid on previously-allocated shares, and (y) the "1995 M&S Average Contribution," which shall be equal to the total Employer Contributions allocated to the Management and Salaried Employee Group for the 1995 Plan Year, divided by the total number of shares of Class 1 Non-Voting Preferred Stock allocated to the Management and Salaried Employee Group for the 1995 Plan Year, excluding, however, the shares allocated to the Management and Salaried Employee Group for the 1995 Plan Year on account of dividends paid on previously-allocated shares. The 1995 IAM Average Contribution, calculated as set forth in subsection (a) above shall also be used in this subsection (b). For each 1994 Participant, the result of the above calculation which applies his Employee Group is the "Applicable Average Contribution."
(1) Amount to be included in tentative allocation. The following amount shall be included in the tentative allocation under Section 5.4(a)(iii) as the Special 1995 Allocation to each 1994 Participant: the lesser of (i) the sum of (xx) the Applicable Average Contribution, times the Participant's 1995 Make-up Shares, plus (yy) $8.8872, times the Participant's 1995 Make-up Shares, times a fraction the numerator of which is the Applicable Average Contribution, and the denominator of which is the fair market value of a share of Class 1 Non-Voting Preferred Stock as of the end of the 1995 Plan Year, or (ii) the allocation permitted for 1995 pursuant to Code Section 415.
(2) Shares to be included in hypothetical share number and hypothetical allocation. The following number of shares is to be included in the hypothetical share number under Section 5.4(c)(ii) and Section 2.4(a) of the Supplemental Plan as the Special Annual Allocation for each affected Participant: the sum of (i) the 1995 Make-up Shares, plus (ii) $8.8872 times the Participant's 1994 Make-up Shares divided by the fair market value of a share of Class 1 Non-Voting Preferred Stock as of the end of the 1995 Plan Year.
(c) In the case of any member of the IAM Employee Group who is subject to both subsections (a) and (b), the total 1995 Special Annual Allocation shall be the sum of the amounts determined for such Participant under both subsections.
IN WITNESS WHEREOF, the Company has caused this Second Amendment to be executed on August 17, 1995.
UAL CORPORATION
/s/ Stuart I. Oran
Executive Vice President-
Corporate Affairs and
General Counsel
APPROVED BY:
AIR LINE PILOTS ASSOCIATION,
INTERNATIONAL
/s/ Harlow B. Osteboe
/s/ J.Randolph Babbitt
INTERNATIONAL ASSOCIATION
OF MACHINISTS AND
AEROSPACE WORKERS
/s/ Kenneth W. Thiede
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</TEXT>
</DOCUMENT>
<TYPE> EX-10.15
<TEXT>
<HTML>
ELEVENTH AMENDMENT
UAL CORPORATION
EMPLOYEE STOCK OWNERSHIP PLAN
(Effective as of July 12, 1994)
By virtue and in exercise of the amending power reserved to UAL Corporation (the "Company") under Section 13.1(a) of the UAL Corporation Employee Stock Ownership Plan (effective as of July 12, 1994) (the "Plan"), which amending power thereunder is subject to the approval of the Air Line Pilots Association International ("ALPA") and the International Association of Machinists and Aerospace Workers (the "IAM"), the Company hereby amends the Plan, subject to the approval of ALPA and the IAM, as follows, effective January 1, 2000.
1. Section 5.5(d) is amended to read as follows, effective for allocations with respect to Plan Years commencing on or after January 1, 2000:
(i) ALPA and IAM Employee Groups. In any case where a Participant who is a member of the ALPA Employee Group or the IAM Employee Group also participates in another defined contribution plan of the Company or its Affiliates, the Committee and the appropriate committee of such other plan shall first reduce the after-tax contributions under any such other plan, shall then reduce the contributions under Section 5.4(c)(vi) of this Plan, shall then reduce any elective deferrals under any such other plan subject to Code section 401(k), shall then reduce contributions under this Plan (Part B to generally be reduced before Part A, but Part A shall be reduced prior to Part B to the extent set forth in the provisions of Section 5.4(a)(iii) which refer to Voting Preferred Stock), and, if necessary shall then reduce all other contributions under any such other plan.
(ii) Management and Salaried Employee Group. In any case where a Participant
who is a member of the Management and Salaried Employee Group also participates
in another defined contribution plan of the Company or its Affiliates,
the Committee and the appropriate committee of such other plan shall first
reduce the after-tax contributions under any such other plan, shall then
reduce any elective deferrals under any such other plan subject to Code
section 401(k), shall then reduce all other contributions under any such
other plan and, if necessary shall then reduce contributions under this
Plan (Part B to generally be reduced before Part A, but Part A shall be
reduced prior to Part B to the extent set forth in the provisions of Section
5.4(a)(iii) which refer to Voting Preferred Stock)."
UAL CORPORATION
/s/ Douglas A. Hacker
APPROVED BY:
AIR LINE PILOTS ASSOCIATION,
INTERNATIONAL
/s/ Duane Woerth
/s/ Fredrick C. Dubinsky
INTERNATIONAL ASSOCIATION
OF MACHINISTS AND
AEROSPACE WORKERS
/s/ Scotty Ford
/s/ S.R. Canael
</HTML>
</TEXT>
</DOCUMENT>
<TYPE> EX-10.16
<TEXT>
<HTML>
UAL CORPORATION
EMPLOYEE STOCK OWNERSHIP PLAN
TRUST AGREEMENT
Between
UAL CORPORATION
and
STATE STREET BANK AND TRUST COMPANY
TABLE OF CONTENTS
| RECITALS | 1 | |
| ARTICLE I | DEFINITIONS | 3 |
| ARTICLE II | ESTABLISHMENT OF THE TRUST | 4 |
| ARTICLE III | POWERS OF TRUSTEE | 5 |
| ARTICLE IV | ADMINISTRATION | 14 |
| ARTICLE V | PAYMENTS OF BENEFITS AND EXPENSES | 16 |
| ARTICLE VI | LIABILITY AND INDEMNIFICATION OF THE TRUSTEE | 17 |
| ARTICLE VII | ACCOUNTING OF THE TRUSTEE | 19 |
| ARTICLE VIII | REMOVAL AND RESIGNATION OF THE TRUSTEE | 21 |
| ARTICLE IX | AMENDMENT AND TERMINATION | 21 |
| ARTICLE X | LEVERAGED ACQUISITIONS OF QUALIFYING STOCK | 22 |
| ARTICLE XI | MISCELLANEOUS | 24 |
UAL CORPORATION
EMPLOYEE STOCK OWNERSHIP PLAN
TRUST AGREEMENT
THIS AGREEMENT
has been made as of the 12th day of July, 1994, between UAL CORPORATION,
a corporation organized under the laws of the State of Delaware with its
principal place of business in Elk Grove Township, Illinois (hereinafter
referred to as the "Company"), and STATE STREET BANK AND TRUST COMPANY,
a Massachusetts trust company with its principal place of business at 225
Franklin Street, Boston, Massachusetts (hereinafter referred to as the
"Trustee").
RECITALS
WHEREAS, the Company
has adopted the UAL Corporation Employee Stock Ownership Plan (the "Plan")
for the benefit of certain employees of the Company and its Affiliates;
and
WHEREAS, the Plan
consists of two portions, a "leveraged" portion (Part A) that is intended
to be an employee stock ownership plan and an "unleveraged" portion (Part
B); and
WHEREAS, Part
A consists of both a stock bonus plan component and a money purchase pension
plan component and Part B consists solely of a stock bonus component; and
WHEREAS, the Plan
provides for the establishment of a trust (the "Trust") to hold, invest
and administer amounts contributed under both Part A and Part B of the
Plan; and
WHEREAS, in order
to effectuate the Plan, the Company desires to establish a Trust, designed
to meet the applicable requirements of the Internal Revenue Code of 1986,
as amended (the "Code"), and the Employee Retirement Income Security Act
of 1974, as amended ("ERISA"); and
WHEREAS, Part
A and Part B are intended to qualify under Section 401 (a) of the Code
and Part A is intended to qualify under Section 4975(e)(7) of the Code
and to meet the requirements of Section 4975(d)(3) of the Code, and the
Trust is intended to be exempt from federal income taxation under Section
501(a) of the Code; and
WHEREAS, the authority
to manage and control the operation and administration of the Plan is vested
in the UAL Employee Stock Ownership Plan ESOP Committee, as named fiduciary
as provided in the Plan, which named fiduciary shall have such authorities
and shall be subject to such duties with respect to the Trust as are specified
in this Agreement and the Plan; and
WHEREAS, cash,
property and/or Company Stock (as hereinafter defined) will from time to
time be contributed to or purchased by the Trustee, which assets, as and
when received by the Trustee, will constitute a trust fund to be held for
the exclusive benefit of the participating employees under the Plan or
their beneficiaries and to defray reasonable expenses of administering
the Plan; and
WHEREAS, the Company
desires the Trustee to hold and administer such trust fund and the Trustee
is willing to hold and administer such trust fund pursuant to the terms
of this Agreement:
NOW, THEREFORE,
in consideration of the premises and of the mutual covenants herein contained,
and intending to be legally bound hereby, the Company and the Trustee do
hereby covenant and agree as follows:
DEFINITIONS
Definitions. All defined terms
used herein have the meaning assigned to them in the Plan, except as otherwise
provided herein, and unless the context otherwise requires or unless specifically
provided, all provisions of this Agreement shall apply to both Part A and
Part B. The following terms as used in this Agreement have the meaning
indicated unless the context requires otherwise:
1.1 "Affiliate" means any corporation,
trade or business, which, at the time of reference, is together with the
Company, a member of a controlled group of corporations, a group of trades
or businesses (whether or not incorporated) under common control or an
affiliated service group, as described in Code sections 415(b), 414 (c)
and 414(m), respectively, or any other organization treated as a single
employer under Code section 414(o); provided, however, that, where the
context so requires, the term "Affiliate" shall be construed to give full
effect to the provisions of Code sections 409(1)(4) and 415(h).
1.2 "Acquisition Loan" means a loan
(or other extension of credit, including an installment obligation to a
party in interest (as defined in ERISA Section 3(14)) incurred by the Trustee
in connection with the purchase of Qualifying Employer Securities.
1.3 "Beneficiary" means the person
or persons to whom a deceased Participant's benefits are payable under
the Plan.
1.4 "Board of Directors" means the
Board of Directors of the Company.
1.5 "Company" means UAL Corporation
and any successor thereto.
1.6 "Company Stock" means anystock
issued by the Company (or a corporation which is a member of the same controlled
group) which meet the requirements of Section 407 of ERISA or Section 409(1)
of the Code.
1.7 "Employee Group" means "Employee
Group" as defined in the Plan.
1.8 "ERISA" means the Employee Retirement
Income Security Act of 1974, as amended, and all successor laws thereto.
1.9 "ESOP Committee" means the committee
appointed to administer the Plan pursuant to Section 11 thereof.
1.10 "Fund" means the contributions
of cash or property reasonably acceptable to the Trustee, including, but
not limited to, Company Stock deposited with or purchased by the Trustee
and held under this Trust by the Trustee, any property into which the same
or any part thereof may from time to time be converted, and any appreciation
therein or income thereon less any depreciation therein, any losses thereon
and any distributions or payments therefrom.
1.11 "Participant" means an employee
of the Company or any Affiliate or any other person who has an account
balance under the Plan.
1.12 "Prohibited Transaction" means
a prohibited transaction under Sections 406 of ERISA and/or Section 4975(c)(1)
of the Code which is not exempt under Section 408 of ERISA or Sections
4975(c)(2) or 4975(d) of the Code, as the case may be.
1.13 "Qualifying Employer Securities"
means shares of stock, common or preferred, issued by the Company (or a
corporation which is a member of the same controlled group) which meets
the requirements of Section 409(1) of the Code.
ARTICLE II
ESTABLISHMENT OF THE TRUST
2.1 The Company hereby establishes
with the Trustee a trust for the purpose of holding and administering the
Fund in accordance with this Agreement.
2.2 Notwithstanding anything to the
contrary in this Agreement, or in any amendment thereto, except as otherwise
provided under ERISA, the Company, the ESOP Committee and the Trustee shall
discharge their respective duties with respect to the Fund for, and the
Fund shall be used solely for and not diverted from, the exclusive purposes
of providing benefits for Participants and their Beneficiaries and defraying
reasonable expenses of administering the Plan. Notwithstanding the preceding
sentence, however, contributions shall be returned by the Trustee to the
Company at the direction of the ESOP Committee if (i) the ESOP Committee
certifies in writing to the Trustee that one or more of the circumstances
listed below exist and (ii) prior to any such return of contributions,
appropriate arrangements shall have been made to protect the substantive
rights of each Employee Group under the Plan:
2.2.2. if the deduction of a contribution
is disallowed by the Internal Revenue Service, the contribution, or the
then current value thereof, if less, to the extent the deduction is disallowed
shall be returned to the Company without interest within one year after
the disallowance; and
2.2.3. if the initial qualification
of the Plan under Sections 401, 409 and 4975(e)(7) of the Code is denied,
the entire Fund or the then current value thereof, if less, shall be returned
to the Company without interest within one year after such qualification
has been denied.
ARTICLE III
POWERS OF TRUSTEE
3.1 The Trustee shall maintain books
of account and records with respect to the Fund. The Fund shall be held
by the Trustee in trust and dealt with in accordance with the provisions
of this Agreement. The Trustee shall take all action necessary to implement
any written directions received from the ESOP Committee and shall conform
to procedures established by the ESOP Committee for disbursement of funds
in accordance with the terms of the Plan.
3.2 It shall be the duty of the Trustee
(a) to hold, invest and reinvest the Fund in accordance with the provisions
of this Agreement, and (b) to pay moneys therefrom in accordance with the
written directions of the ESOP Committee.
3.3 Subject to Paragraphs 3.6, 3.7
and 3.8, at the direction of the ESOP Committee, the Trustee shall invest
the assets of the Fund exclusively in Company Stock (except for di minimis
investments in cash or cash equivalents pending investment in Company Stock
or pending distributions to Participants); provided, however, that the
portion of the Fund attributable to Part A of the Plan is intended to be
invested primarily in Qualifying Employer Securities. To the extent that
Company contributions are made in Company Stock, the Trustee shall retain
such Company Stock unless otherwise directed by the ESOP Committee. To
the extent Company contributions are made in cash and are not used to pay
principal or interest on an Acquisition Loan pursuant to Article X or to
pay expenses of the Fund, the Trustee shall, at the direction of the ESOP
Committee, acquire Company Stock. If at the time Company Stock is to be
purchased, the Company has outstanding more than one class of Company Stock,
the ESOP Committee shall direct the Trustee as to which class of Company
Stock shall be purchased. Subject to Paragraph 3.8, the Trustee may rely
in good faith without liability upon the valuation of Company Stock as
determined by the ESOP Committee. The Trustee may also, at the direction
of the ESOP Committee, invest the Fund in temporary investments other than
Company Stock, may hold such portion of the Fund in such investments as
may be required under the investment diversification provision of the Plan,
may hold such portion of the Fund uninvested as the ESOP Committee deems
advisable for making distributions under the Plan, may invest assets of
the Fund in short-term investments bearing a reasonable rate of interest,
including without limitation, deposits in, or short-term instruments of,
the Trustee, or in one or more short-term collective investment funds administered
by the Trustee as trustee thereof for the collective investment of assets
of employee pension or profit-sharing trusts, as long as each such collective
investment fund constitutes a qualified trust under the applicable provisions
of the Code (and while any portion of the Fund is so invested, such collective
investment funds shall constitute part of the Plan to the extent of such
investment, and the instrument creating such funds shall constitute part
of this Agreement).
3.4 The Trustee shall have no duty
hereunder to determine or inquire into whether any directions received
from the ESOP Committee in accordance with the terms of this Agreement
represent proper and lawful decisions or result in Prohibited Transactions.
The Trustee shall have no duty to review any investment to be acquired,
held or disposed of pursuant to such instructions from the ESOP Committee.
If the Trustee does not receive written directions with respect to any
part of the Fund subject to the ESOP Committee's direction (including,
without limitation, income, sale proceeds or contributions), the Trustee
shall, pending receipt of such directions, hold and invest such amount
in short-term securities as provided in Paragraph 3.3 hereof.
3.5 In addition to, and not in limitation
of, the powers now, or which may later become, vested in it, the Trustee
shall have the following powers; provided, however, that the Trustee's
exercise of such powers shall be consistent with and subject to all other
provisions of this Agreement, and provided further that, subject to the
provisions of Paragraph 3.6, 3.7, and 3.8, the powers set forth in Paragraphs
3.5.1, 3.5.2, 3.5.3, and 3.5.4 shall be exercised by the Trustee only to
the extent and in the manner directed by the ESOP Committee, a Participant
or a Beneficiary in accordance with the terms of this Agreement, except
as otherwise required by ERISA:
3.5.2 To exercise voting rights either
in person or by proxy, with respect to any securities or other property,
and generally to exercise with respect to the Fund all rights, powers and
privileges as may be lawfully exercised by any person owning similar property
in his own right;
3.5.3 To exercise any options, conversion
rights, put rights, or rights to subscribe for additional stocks, bonds
or other securities appurtenant to any securities or other property held
by it, and to make any necessary payments in connection with such exercise,
and to join in, dissent from, and oppose the reorganization, consolidation,
recapitalization, liquidation, merger or sale of corporate property with
respect to any corporations or property in which it may be interested as
Trustee;
3.5.4 To compromise, compound, and
settle any debt or obligation owing to or from it as Trustee, and to reduce
or increase the rate of interest on, extend or otherwise modify, foreclose
upon default, or otherwise enforce any such obligation;
3.5.5 To sue or defend suits or legal proceedings to enforce or protect any interest of the Trust, and to represent the Trust in all suits or legal proceedings in any court or before any other administrative agency, body or tribunal, provided that the Trustee is indemnified to the Trustee's satisfaction against liability and expenses;
3.5.6 To hold any property at any place, except that it shall not maintain the indicia of ownership of any assets of the Fund outside the jurisdiction of the district courts of the United States except as permitted by regulations issued by the Secretary of Labor of the United States under ERISA Section 404(b);
3.5.7 To make, execute, acknowledge and deliver assignments, agreements and other instruments;
3.5.8 To register any securities held by it hereunder in its own name or in the name of a nominee with or without the addition of words indicating that such securities are held in a fiduciary capacity, to permit securities or other property to be held by or in the name of others, to hold any securities in bearer form and to deposit any securities or other property in a depository, clearing corporation or similar corporation, either domestic or foreign; provided, however, that the records of the Trustee shall at all times show that any such property held or registered in the name of another is part of the Fund;
3.5.9 To employ legal counsel, brokers and other advisors, agents or employees to perform services for the Fund or to advise it with respect to its duties and obligations under this Agreement and in connection with the Trust, and to pay them reasonablecompensation from the Fund, to the extent not paid directly by the Company or an Affiliate;
3.5.10 In accordance with the applicable provisions of the Plan and subject to Paragraph 3.8, to obtain an Acquisition Loan in such amounts and upon such terms and conditions as shall be deemed advisable or proper to carry out the purposes of the Trust, and, in connection therewith, to issue its promissory note as Trustee, to pledge any securities or other property of the Fund for the repayment of such Acquisition Loan and to repay from time to time the principal and interest on, and to take any other action with respect to, such Acquisition Loan; provided that if such Acquisition Loan is from, or guaranteed by, a "party of interest" within the meaning of Section 3(14) of ERISA, the requirements of Article X shall be satisfied;
3.5.11 To open and make use of banking accounts including checking accounts, which accounts, if bearing a reasonable rate of interest or if checking accounts, may be with the Trustee.
(i) Part A. Each active Participant
(which shall be defined for purposes of Sections 3.6 and 3.7 to mean a
Participant who is an Employee) who directed the Trustee with respect to
the shares allocated to his Account under Part A in accordance with Section
3.6.1 may, again as a named fiduciary, direct the Trustee with respect
to a portion of both the number of shares of Company Stock held in the
Loan Suspense Account and the number of such shares allocated to any Participant's
Account under Part A for which no instructions were timely received by
the Trustee. Such portion shall be determined as follows:
(A) Such portion shall be limited
to the sum of: (I) the number of shares of Company Stock held in the Loan
Suspense Account reserved for allocation to such Participant's Employee
Group, plus (ii) the number of shares of Company Stock allocated to the
Accounts of Participants in such Participant's Employee Group under Part
A for which no instructions were timely received.
(B) The number of shares of Company
Stock determined under clause (i)(A) shall be multiplied by a fraction,
the numerator of which is the number of shares of Company Stock allocable
to Part A that such Participant directed the Trustee in accordance with
Section 3.6.1 and the denominator of which is the aggregate number of shares
allocable to Part A that were directed by active Participants in the same
Employee Group in accordance with Section 3.6.1.
(C) Such Participant, as a named fiduciary, shall be entitled to direct the Trustee with respect to the number of shares determined under clause (i)(B).
(ii) Part B. Each active Participant
who directed the Trustee with respect to shares allocated to his Account
under Part B in accordance with Section 3.6.1(a) may, again as a named
fiduciary, direct the Trustee with respect to a portion of the number of
such shares allocated to any Participant's Account under Part B for which
no instructions were timely received by the Trustee. Such portion
shall be determined as follows:
(A) Such portion shall be limited
to the number of shares of Company Stock allocated to the Accounts of Participants
in such Participant's Employee Group under Part B for which no instructions
were timely received.
(B) The number of shares of Company
Stock as determined under clause (ii)(A) shall be multiplied by a fraction,
the numerator of which is the number of shares of Common Stock allocable
to Part B that such Participant directed the Trustee in accordance with
Section
3.6.1 and the denominator of which is the aggregate number of shares allocable
to Part B that were directed by active Participants in the same Employee
Group in accordance with Section 3.6.1.
(C) Such Participant, as a named
fiduciary, shall be entitled to direct the Trustee with respect to the
number of shares determined under clause (ii)(B).
Notwithstanding any other provision
of this Agreement or the Plan, the Trustee shall not be obligated to follow
the direction of a named fiduciary unless such direction is in accordance
with the terms of the Plan and is proper within the meaning of Section
403 (a) of ERISA and is not contrary to ERISA.
3.7 _Control Transactions and
Certain Dispositions of Company Stock.
(II) The number of shares of Company
Stock determined under clause (ii)(a)(I) shall be multiplied by a fraction,
the numerator of which is the number of shares of Company Stock allocable
to Part A that such Participant directed the Trustee in accordance with
Section 3.7.1(i) and the denominator of which is the aggregate number of
shares allocable to Part A that were directed by active Participants in
the same Employee Group in accordance with Section 3.7.1(i).
(III) Such Participant, as a named
fiduciary, shall be entitled to direct the Trustee with respect to the
number of shares determined under clause
(ii)(A)(II).
(B) Part B. Each active Participant
who directed the Trustee with respect to shares allocated to his Account
under Part B in accordance with Section 3.7.1(i) may, again as a named
fiduciary, direct the Trustee with respect to a portion of the number of
such shares allocated to any Participant's Account under Part B for which
no instructions were timely received by the Trustee. Such portion shall
be determined as follows:
(II) The number of shares of Company
Stock determined under clause (ii)(B)(I) shall be multiplied by a fraction,
the numerator of which is the number of shares of Company Stock allocable
to Part B that such Participant directed the Trustee in accordance with
Section 3.7.1(a)(i) and the denominator of which is the aggregate number
of shares allocable to Part B that were directed by active Participants
in the same Employee Group in accordance with Section 3.7.1(a)(i).
(III) Such Participant, as a named fiduciary, shall be entitled to direct the Trustee with respect to the number of shares determined under clause (ii)(B)(II).
Notwithstanding any other provision
of this Agreement or the Plan, the Trustee shall not be obligated to follow
the direction of a named fiduciary unless such direction is in accordance
with the terms of the Plan and is proper within the meaning of Section
403(a) of ERISA and is not contrary to ERISA.
3.7.2 Records. Following any
Control Transaction that has resulted in the sale or exchange of any shares
of Company Stock held in the Plan, the record keeper shall continue to
maintain on a confidential basis the Accounts of Participants (and Beneficiaries)
to whose Accounts shares of Company Stock were allocated at any time during
such offer, until complete distribution of such Accounts or such earlier
time as the record keeper determines that the transfer of the record keeping
functions back to the ESOP Committee will not violate the confidentiality
of the directions given by the Participants (and Beneficiaries). In the
event that there is no sale or exchange of any shares of Company Stock
held in the Plan pursuant to the Control Transaction, the record keepershall
transfer back to the ESOP Committee the record keeping functions; provided,
however, that the record keeper shall keep confidential any instructions
which it may receive from Participants (and Beneficiaries) relating to
the Control Transaction.
3.7.3 Proceeds. For purposes
of allocating the proceeds of any sale or exchange pursuant to a Control
Transaction, the ESOP Committee or the independent record keeper, as the
case may be, shall determine the portion, expressed as a percentage, of
shares of each class tendered by the Trustee that were actually sold or
exchanged (the "applicable percentage" for that class). For each class,
the ESOP Committee or the independent record keeper, as the case may be,
shall then treat as having been sold or exchanged from the portion of the
Loan Suspense Account applicable to that Employee Group and each of the
individual Accounts of Participants (and Beneficiaries) that number of
shares (of that class) that is obtained by multiplying (i) the applicable
percentage for that class, times (ii) the total number of shares in such
Account of that class that were directed to be tendered or exchanged or
sold in connection with the Control Transaction. The adjustments to individual
Accounts shall be made by the ESOP Committee or the independent record
keeper, as the case may be, on information supplied by the Company, the
ESOP Committee or the Trustee.
3.8 Notwithstanding any other provisions
of this Agreement or the Plan, the purchase of Qualifying Employer Securities
pursuant to the ESOP Preferred Stock Purchase Agreement dated March 25,
1994, as amended, or pursuant to any Additional Acquisition Loans (including
loans to effect Section 8.2 (e) of the Plan and Section 1.6 (g) of the
Recapitalization Agreement) among the Trustee and the Company shall be
effected by the Trustee without direction from the ESOP Committee pursuant
to the Trustee's determination, in the exercise of its reasonable judgment
after consultation with such advisors as it reasonably deems necessary,
that such transaction is in the best interests of the Participants and
Beneficiaries and that the purchase transaction and the terms and conditions
of any Acquisition Loan entered into in connection with the above-described
Purchase Agreement are in compliance with all applicable provisions of
the Code and ERISA.
3.9 In addition to, and not in limitation
of, the powers vested and to be vested in it by law or enumerated in this
Article III, the Trustee shall have the power to take any action with respect
to the Fund as is appropriate and helpful in carrying out the purposes
of this Agreement, subject to any directions of the ESOP Committee or the
Participants (or Beneficiaries) as provided herein.
ARTICLE IV
ADMINISTRATION
4.1 The ESOP Committee shall represent
the Company in dealing with the Trustee under this Agreement. Until it
receives written notice that a person is no longer a member of the ESOP
Committee, the Trustee shall be fully protected in assuming that the person
is still a member of the ESOP Committee. The Company shall cause to be
delivered to the Trustee a specimen signature of each member as well as
that of any designee of the ESOP Committee appointed pursuant to Paragraph
4.2. The members of the ESOP Committee shall be "named fiduciaries"
within the meaning of ERISA Section 402(a) with respect to the Plan.
4.2 The Trustee may rely (and shall
be fully protected in relying) on any written communication signed by a
majority of the members of the ESOP Committee as being authorized by, and
reflecting the action of, the ESOP Committee. If the Trustee is advised
in writing by a majority of the members of the ESOP Committee that directives
to the Trustee will be signed by a person or persons designated by the
ESOP Committee, the Trustee may rely on communications signed by the person
or persons so named as a directive reflecting the action of the ESOP Committee.
4.3 The Trustee shall have only those
duties specified in this Agreement or specified in the Plan and expressly
incorporated herein by reference. In the event of any conflict between
the provisions of the Plan and this Agreement, the provisions of this Agreement
shall control. The Trustee shall have no responsibility to administer or
interpret the Plan, to enforce payment of any contributions to the Fund
or to see that the Fund is adequate to meet the liabilities of the Plan.
4.4 The Company or anyone acting
on its behalf may at any time employ the Trustee in its corporate capacity
as agent to perform any act or to keep any records in connection with the
administration of the Plan. Any such agency relationship shall be established
by a separate written agreement between the Company and the Trustee and
the existence of such arrangement shall not affect its responsibility or
liability as Trustee under this Agreement.
4.5 Notwithstanding any other provision
of the Plan or this Agreement, the Trustee shall not be obligated to follow
the direction of a named fiduciary unless such direction is in accordance
with the terms of the Plan or this Agreement and is proper under ERISA
Section 403(a)(2) and not contrary to Title I of ERISA.
4.6 With respect to the exercise
of any fiduciary responsibility with respect to the Plan or the Trust,
including, without limitation, the voting, sale, exchange, other disposition
or conversion of Company Stock, the Trustee and any other relevant fiduciary
may, to the extent permitted by law, take into consideration any relevant
economic factors affecting the interests of current and future Participants
(and Beneficiaries), including, but not limited to, the prospect
for continued Employee enfranchisement through the voting power of Company
Stock held in the Trust, the prospect for future benefits under the Plan
as a result of the prospective release and allocation of Qualifying Employer
Securities held in the Loan Suspense Account and the prospect for future
employment with the Company and its Affiliates.
ARTICLE V
PAYMENTS OF BENEFITS AND EXPENSES
5.1 Except as otherwise provided
in Paragraph 5.3, the Trustee shall pay benefits and administrative expenses
under the Plan only when it receives (and in accordance with) written instructions
from the ESOP Committee, indicating the amount of the payment and the name
and address of the recipient. The Trustee shall have no duty to inquire
into whether any payment the ESOP Committee instructs it to make is consistent
with the terms of the Plan or applicable law or otherwise proper. Any payment
made by the Trustee in accordance with such instructions shall be a complete
discharge and acquittance to the Trustee. If the ESOP Committee advises
the Trustee that benefits have become payable respecting a Participant's
interest in the Fund, but does not instruct the Trustee as to the manner
of payment, the Trustee shall hold the Participant's interest in the Trust
until it receives written instructions from the ESOP Committee as to the
manner of payment. The Trustee shall not pay benefits from the Fund without
such instructions, even though it may be informed from other sources, including,
without limitation, a Participant (or beneficiary), that benefits are payable
under the Plan. The Trustee shall have no responsibility to determine when,
to whom, or in what amounts benefits and expenses are payable under the
Plan.
5.2 The Trustee shall distribute
benefits in the manner described in the Plan and as directed by the ESOP
Committee.
5.3 The Trustee shall receive as
compensation for its services as Trustee such amounts as may, from time
to time, be agreed upon in writing between the Company and the Trustee.
Such compensation and, in accordance with the applicable provisions of
ERISA and the Code, all reasonable and proper expenses incurred by the
Trustee in the administration of the Trust, including reasonable legal
counsel fees, shall be paid by the Company.
5.4 The Company intends that the
Plan shall at all times qualify under Code Sections 401(a), 409 and, to
the extent applicable, 4975(e)(7) and that the Trust hereby established
shall at all times be tax exempt under Section 501(a) of the Code, or successor
provisions. However, any taxes that may be levied upon or in respect of
the Fund shall be paid from the Fund. The Trustee shall promptly notify
the ESOP Committee of any proposed taxes (other than stock transfer taxes)
of which it receives notice and may assume that any such taxes are lawfully
levied or assessed, unless the ESOP Committee advises it in writing to
the contrary within fifteen (15) days after receiving the above notice
from the Trustee. In such case, the Trustee, if requested by the ESOP Committee
in writing, shall contest the
validity of such taxes in any manner
deemed appropriate by the
ESOP Committee; the Company may
itself contest the validity of
any such taxes, in which case the
ESOP Committee shall so notify
the Trustee and the Trustee shall
have no responsibility or
liability respecting such contest.
If any party to this Agreement contests any such proposed levy, the other
party shall provide such information and cooperation as the party conductingthe
contest shall reasonably request.
ARTICLE VI
LIABILITY AND INDEMNIFICATION OF THE TRUSTEE
6.1 The Trustee shall not be responsible
for computing or collecting contributions due under the Plan.
6.2 The Trustee in its corporate
capacity shall not be liable for claims of any persons arising under the
Plan; such claims shall be limited to the Fund. The Trustee shall not be
liable to make distributions or payments of any kind unless sufficient
funds are available therefor in the Fund. The Trustee shall be responsible
only for such money and other property as are actually received by it as
Trustee under this Agreement.
6.3 The Trustee may consult with
legal counsel with respect to the meaning and construction of this Agreement
or its powers, obligations and conduct hereunder, and the written
opinion of such counsel will, to the extent permitted by law, be full and
complete protection in respect of any action taken or omitted by the Trustee
hereunder in good faith and in accordance with the opinion of such counsel.
6.4 The Trustee shall have no liability
other than as imposed by law and this Agreement.
6.5 The Trustee shall be fully protected
in acting upon any instrument, certificate, or paper delivered by the Company,
the ESOP Committee, any Participant, (or Beneficiary) acting as a named
fiduciary and believed by the Trustee to be genuine and to be signed or
presented by the proper person or persons, and the Trustee shall be under
no duty to make any investigation or inquiry as to any statement contained
in any such writing, but may accept the same as conclusive evidence of
the truth and accuracy of the statements therein contained.
6.6 To the extent permitted by applicable
law, the Trustee shall be indemnified by the Company and UAL against any
and all liabilities, settlements, judgments, losses, costs, and expenses
(including reasonable legal fees and expenses) of whatever kind and nature
which may be imposed on, incurred by or asserted against the Trustee by
reason of the performance or nonperformance of its trustee function under
this Agreement, except to the extent such action or inaction constituted
negligence, willful misconduct or failure to act in good faith on the part
of the Trustee.
6.7 All notices, requests, demands
and other communications hereunder or with respect hereto shall be in writing
and shall be deemed to have been fully given if telegraphed, telecopied
or telefaxed, mailed by registered or certified mail, or personally delivered
(or delivered by courier) as follows:
UAL Corporation
P.O. Box #66919
Chicago, IL 60666
Attention: Corporate Secretary
1200 Algonquin Road
Elk Grove Township, IL 60007
Attention: Corporate Secretary
If to the Trustee, to:
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
Attention: UAL ESOP Administration
6.8 Whenever the Trustee shall deem
it desirable for a matter to be proved or established before taking, permitting
or omitting any act, the matter (unless other evidence in respect thereof
is specifically prescribed in this Agreement) may be deemed to be conclusively
established by a certification signed by a majority of the members of the
ESOP Committee and delivered to the Trustee, and the Trustee shall be fully
protected in relying on such an instrument.
6.9 If a dispute arises as to the
payment of any funds or delivery of any assets by the Trustee, the Trustee
may withhold such payment or delivery until the dispute is determined by
a court of competent jurisdiction or finally settled in writing by the
parties concerned.
ARTICLE VII
ACCOUNTING OF THE TRUSTEE
7.1 The Trustee shall keep accurate
and detailed accounts of all its transactions (including receipts and disbursements)
under this Agreement. These records shall be open to inspection and audit
during regular business hours of the Trustee by the ESOP Committee or any
person or persons designated by the ESOP Committee or the Company in a
written instrument
filed with the Trustee. If mutually
agreed upon in a separate
writing by the ESOP Committee and
the Trustee, the Trustee shall
establish and maintain accountsfor
Participants which shall show
their respective interests, determined
in accordance with the
terms of the Plan, in the Fund;
provided, however, that to the
extent that such accounts are kept
by the Trustee on the basis of
information furnished or caused
to be furnished to it by the ESOP
Committee, the Trustee shall have
no responsibility for the
accuracy of any information so furnished.
All such accounts and
records shall be preserved (in original
form, or on microfilm,
magnetic tape or any other similar
process) for such period as
the Trustee may determine, but the
Trustee may destroy such
accounts and records only after
first notifying the ESOP
Committee and the Company in writing
at least ninety (90) days in
advance of its intention to do so
and transferring to the ESOP
Committee or the Company any such
accounts and records requested.
7.2 Within sixty (60) days after
the close of each fiscal year of the Plan, the Trustee's removal or resignation
as Trustee hereunder, or the termination of the Plan or this Agreement,
the Trustee shall file with the ESOP Committee an account setting forth
all its transactions (including all receipts and disbursements) under this
Agreement during such year, or during the period from the close of the
last preceding fiscal year of the Plan to the effective date of its removal
or resignation or the termination of the Plan or this Agreement, and showing
all property (including its costs and fair market value) held by it hereunder
at the end of such accounting period; provided, however, that in the event
shares of Company Stock are then held in the Trust and a final valuation
report, if necessary, with respect to such Company Stock for any such accounting
period is not received by the Trustee within thirty (30) days of the date
the Trustee is required to render an accounting under the foregoing provision,
then the Trustee shall not be required to render such account until thirty
(30) days from the date such valuation report is received by the Trustee.
The ESOP Committee and the Trustee may agree in writing that similar accounts
will be prepared by the Trustee and filed with the ESOP Committee at more
frequent intervals. No person or persons (including, without limitation,
the Company and the ESOP Committee) shall be entitled to any further or
different accounting by the Trustee, except as may be required by law.
7.3 Twenty-four (24) months after
the filing with the ESOP Committee of the annual accounts for the 1994
and 1995 fiscal years of the Trust and twelve (12) months after the filing
with the ESOP Committee of any other account under Paragraph 7.2, the Trustee
shall be forever released and discharged from any liability or accountability
to the Company and the ESOP Committee with respect to the transactions
shown or reflected on the account, except with respect to any acts or transactions
as to which the ESOP Committee, within the applicable period, files written
objections with the Trustee. The written approval of the ESOP Committee
of any account filed by the Trustee, or the ESOP Committee's failure to
file written objections within the applicable period, shall be a settlement
of such account as against the Company and the ESOP Committee, and shall
forever release and discharge the Trustee from any liability or accountability
to the Company and the ESOP Committee with respect to the transaction shown
or reflected on such account. If a statement of objection is filed by the
ESOP Committee and the ESOP Committee is satisfied that its objections
should be withdrawn or if the account is adjusted to its satisfaction,
the ESOP Committee shall indicate its approval of the account in a written
statement filed with the Trustee and the Trustee shall be forever released
and discharged from all liability and accountability to the Company and
the ESOP Committee in accordance with the immediately preceding sentence.
If an objection is not settled by the ESOP Committee and the Trustee, the
Trustee may commence a proceeding for a judicial settlement of the account
in any court of competent jurisdiction; the only parties that need be joined
in such a proceeding are the Trustee, the ESOP Committee, the Company and
such other parties whose participation is required by law.
ARTICLE VIII
REMOVAL AND RESIGNATION OF THE TRUSTEE
8.1 The Trustee may resign as Trustee
under this Agreement at any time by a written instrument delivered to the
Company giving notice of such resignation, which shall be effective sixty
(60) days after receipt or at such other time as is agreed by the Company
and the Trustee. The Trustee may be removed at any time by the Company
(with the consent of the Air Line Pilot Association, International
and the International Association of Machinists and Aerospaceworkers)
by an instrument in writing and delivered to the Trustee, which shall be
effective sixty (60) days after receipt or at such other time as is agreed
between the Company and the Trustee.
8.2 If a vacancy in the office of
trustee of the Trust occurs, the Company (with the consent of the Air Line
Pilot Association, International and the International Association of Machinists
and Aerospace Workers) shall appoint a successor trustee and shall deliver
to the Trustee copies of (a) a written; instrument executed by the Company
appointing such successor, and (b) a written instrument executed by the
successor in which it accepts such appointment. Such instruments shall
indicate their effective date.
8.3 If the Trustee resigns or is
removed, it shall deliver all assets of the Fund in its possession to a
successor trustee as soon as is reasonably practicable after the settlement
of its account or at such earlier time as shall be agreed on by the Company,
the Trustee and the successor trustee.
ARTICLE IX
AMENDMENT AND TERMINATION
9.1 This Agreement may be amended
at anytime and from time to time by the Company (with the consent of the
Air Line Pilot Association, International and the International Association
of Machinists and Aerospace Workers) by a written instrument duly
acknowledged and delivered to the Trustee setting forth the terms of the
amendment; provided that no amendment affecting rights, duties, responsibilities
or liability of the Trustee may be made without the Trustee's consent.
The instrument of amendment shall state to the Trustee that the amendment
does not permit any part of the Fund to be used for or diverted to purposes
other than the exclusive benefit of Participants and their beneficiaries
or the payment of reasonable expenses of administering the Plan and Trust,
as specified in Paragraph 2.2 hereof. The instrument of amendment shall
specify its effective date and amendments may, with the Trustee's consent,
if applicable, be made effective retroactively.
9.2 If the ESOP Committee certifies
to the Trustee that the Plan is or has been terminated, the Trustee shall
hold and/or dispose of the Fund in accordance with the ESOP Committee's
written instructions. The ESOP Committee shall certify in writing to the
Trustee that the disposition directed: (a) except as provided in Paragraph
2.2, does not result in any part of the Fund being used for or diverted
to purposes other than the exclusive benefit of Participants and their
Beneficiaries and the payment of reasonable expenses (including the repayment
of any outstanding Acquisition Loans) of administering the Plan and Trust,
(b) is in accordance with the applicable provisions of the Code, ERISA
and any other applicable laws, and (c) does not result in a Prohibited
Transaction. If the Plan is terminated with respect to a group of persons
under the Plan, the portion of the Trust attributable to such group shall
be held and disposed of in accordance with the written instructions of
the ESOP Committee which shall be given in conformity with the provisions
of the Plan, the Code and ERISA. The Trustee may, however, reserve such
reasonable sum of money as it deems advisable for payment for the settlement
of its accounts or for payment of taxes that may be assessed on or in respect
of the Fund or the income thereof. This Agreement shall terminate upon
the termination of the Plan as provided herein and the disposition of the
Fund as provided herein.
ARTICLE X
LEVERAGED ACQUISITIONS OF STOCK
10.1 It is specifically contemplated
that the Trust will operate pursuant to a leveraged employee stock
ownership plan with respect to Part A of the Plan and that the Trustee
will incur several Acquisition Loans in connection with the acquisition
of Qualifying Employer Securities. Any Acquisition Loan shall meet all
of the requirements necessary to constitute an "exempt loan" within the
meaning of Treasury Regulation Section 54.4975-7(b)(1)(iii) and shall be
used primarily for the benefit of the Participants and their Beneficiaries.
The proceeds of any Acquisition Loan shall be used, within a reasonable
time after the Acquisition Loan is obtained, only to purchase Qualifying
Employer Securities or to repay such Acquisition Loan or a prior Acquisition
Loan. Any Acquisition Loan shall provide for no more than a reasonable
rate of interest and must be without recourse against the Plan and Trust.
The number of years to maturity under the Acquisition Loan must be definitely
ascertainable at all times. The Acquisition Loan may not be payable at
the demand of any person, except in the case of a default. The only assets
of the Trust that may be given as collateral for an Acquisition Loan are
shares of Qualifying Employer Securities acquired with the Acquisition
Loan, shares of Qualifying Employer Securities that were used as collateral
on prior Acquisition Loans repaid with the proceeds of the current Acquisition
Loan and all Qualifying Employer Securities received as consideration pursuant
to a Control Transaction or acquired with proceeds received pursuant to
a Control Transaction. In the event that Qualifying Employer Securities
are used as collateral for an Acquisition Loan, such Qualifying Employer
Securities shall be released from such encumbrance in accordance with the
provisions of the Plan and applicable Treasury Regulations. No person entitled
to payment under an Acquisition Loan shall be entitled to payment from
the Trust other than from shares of Qualifying Employer Securities acquired
with the Acquisition Loan which are collateral for the Acquisition Loan,
Company contributions made under the Plan for the purpose of satisfying
an Acquisition Loan, earnings attributable to such Qualifying Employer
Securities and such Company contributions (other than contributions of
Qualifying Employer Securities), and such other assets, if any, as to which
recourse may be permitted under Section 4975 of the Code. Payments of principal
and interest on an Acquisition Loan shall be made by the Trustee only from
(1) Company contributions (other than contributions of Qualifying Employer
Securities) made under the Plan for the purpose of satisfying such Acquisition
Loan, earnings on such contributions and earnings on shares of Qualifying
Employer Securities acquired with the proceeds of such Acquisition Loan,
including, but not limited to, cash dividends received by the Trust with
respect to such shares of Qualifying Employer Securities, whether or not
allocated to the accounts of Participants (or Beneficiaries), (2) the proceeds
of a subsequent Acquisition Loan made to repay the prior Acquisition Loan,
and/or (3) unless otherwise agreed in the definitive documentation pertaining
to such Acquisition Loan, the proceeds of the sale of any collateralized
shares of Qualifying Employer Securities acquired with the proceeds of
such Acquisition Loan; provided, however, that the Trustee shall in no
event be required to apply such proceeds of sale to repay principal and
interest on an Acquisition Loan if, in the written opinion of counsel to
the Trustee, such action would constitute a Prohibited Transaction or a
breach of the Trustee's fiduciary duties under ERISA. In the event of a
default under an Acquisition Loan, the value of Trust assets transferred
to the lender shall not exceed the amount of the default, provided further
that if the lender is a "party in interest" within the meaning of
ERISA Section 3(14) or a "disqualified person" within the meaning of Section
4975(e)(2) of the Code, a transfer of Trust assets upon default shall be
made only if, and to the extent of, the Trust's failure to meet the Acquisition
Loan's payment schedule.
ARTICLE XI
MISCELLANEOUS
11.1 This Agreement shall be binding
upon, and the powers granted to the Company and the Trustee, respectively,
shall be exercisable by, the respective successors and assigns of the Company
and the Trustee. Any corporation which shall, by merger, consolidation,
purchase or otherwise, succeed to substantially all the trust business
of the Trustee shall, upon such succession and without any appointment
or other action by the Company, be and become successor trustee hereunder,
upon notification to the Company.
11.2 No right or claim in or to the
Fund or any assets thereof shall be subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance or charge,
and any attempt to so anticipate, alienate, sell, transfer, assign, pledge,
encumber or charge shall be void and shall not be recognized by the Trustee,
except to such extent as may be legally required (e.g., as otherwise provided
in the Plan with respect to qualified domestic relations orders). No such
right or claim shall be liable for or subject to the debts, contracts,
liabilities, engagements or torts of the person entitled thereto.
11.3 This Agreement shall be administered,
construed and enforced in accordance with ERISA, and to the extent not
governed by ERISA, in accordance with the laws of the Commonwealth of Massachusetts.
11.4 One or more of the Company's
Affiliates may, with the approval of the Board of Directors, by resolution
of its own board of directors adopt the Trust if such subsidiary shall
have adopted the Plan or any part thereof. Each such Affiliate which has
adopted this Trust shall be deemed a party to this Agreement and all references
herein to "Company" shall be deemed as to include such Related Company,
except as the context may otherwise require.
11.5 For all purposes of the Plan
and Trust, all valuations of Stock which is not readily tradable on an
established securities market will be made by an "independent appraiser"
within the meaning of Section 401(a)(28)(C) of the Code.
11.6 Headings of Articles are inserted
for convenience of reference. They are not part of this Agreement and shall
not be considered in construing it.
11.7 This Agreement may be executed
in any number of counterparts, each of which shall be considered an original
even through no others are produced.
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LEFT BLANK]
IN WITNESS WHEREOF, the Company and
the Trustee have caused this Agreement to be executed by their duly authorized
officers and their respective corporate seals to be hereunto affixed as
of the day and year first above written.
| Attest: | UAL CORPORATION |
| BY: /s/Francesca M. Maher | BY: /s/Joseph R. O'Gorman |
| TITLE: Vice President | TITLE: Executive Vice President |
| Attest: | STATE STREET BANK AND TRUST |
| COMPANY | |
| BY: /s/Denise R. Courcy | BY: Kelly Driscoll |
| TITLE: Assistant Vice President | TITLE: Vice President |
| and Associate Counsel |
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</TEXT>
</DOCUMENT>
<TYPE> EX-10.17
<TEXT>
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Exhibit 10.17
UAL CORPORATION
SUPPLEMENTAL ESOP
Effective as of July 12, 1994
Table of Contents
Page
ARTICLE 1 Scope of Plan and Definitions 1
ARTICLE 2 Participation and Allocations 4
ARTICLE 3 Payment of Benefits 12
ARTICLE 4 Administration of Plan 15
ARTICLE 5 Amendment and Termination 16
ARTICLE 6 Miscellaneous Provisions
16
UAL CORPORATION
SUPPLEMENTAL ESOP
Effective as of July 12, 1994
ARTICLE 1
Scope of Plan and Definitions
1.1 Purpose and Scope of Plan
1.2 Terms Defined in the ESOP. For all purposes of this Plan, capitalized terms, unless defined herein, shall have the meanings specified in the ESOP, unless a different meaning is plainly required by the context.
1.3 Definitions. As used in the Plan, the following capitalized terms have the meanings set forth below, unless a different meaning is plainly required by the context:
(a) "Account" means bookkeeping account (including a Share Subaccount and a Cash Subaccount) maintained by the Company to record a Participant's interest in the Plan (and to the extent applicable, the Supplemental Trust) that is credited with Convertible Shares, Voting Shares, Common Stock and other amounts as provided in Article Two.
(b) "Additional Shares" means the number of additional shares, if any, of ESOP Preferred Stock, Convertible Shares and Voting Shares to be issued or credited by the Company in accordance with Sections 1.6 and 1.10 of the Recapitalization Agreement. Any reference herein to Additional Shares shall only be applicable when, if and to the extent that Additional Shares are determined to be issuable in accordance with Sections 1.6 and 1.10 of the Recapitalization Agreement.
(c) "Beneficiary" means the beneficiary or beneficiaries designated by a Participant under the ESOP, unless the Participant selects a different Beneficiary in accordance with Section 3.4 hereunder.
(d) "Committee" means the ESOP Committee, excluding the members appointed by the IAM.
(e) "Common Stock" means the common stock of the Company, par value $.O1 per share or non-equity units that are treated as fictional book-entry shares of Common Stock if allocated hereunder.
(f) "Company" means UAL Corporation and any successor corporation or entity to the Company by merger, consolidation or otherwise.
(g) "Compensation" means compensation as defined in the ESOP modified by ignoring both (i) the limitations on compensation under Section 401(a)(17) of the Code and (ii) the ESOP rule that limits compensation to four times the dollar limit under Code Section 415(c)(1)(A).
(h) "Convertible Shares" means the Class 2 ESOP Convertible Preferred Stock of the Company or non-equity units that are treated as fictional book-entry Convertible Shares if allocated hereunder.
(i) "Effective Date" means July 12, 1994.
(j) "Eligible Employee" means an "eligible employee" as defined in ESOP, provided, that, except for purposes of Sections 2.3(a)(i) and 2.4(f), no member of the IAM Employee Group shall be an Eligible Employee.
(k) "ESOP" means the UAL Corporation Employee Stock Ownership Plan (together with its related trust), effective July 12, 1994, as such plan and trust may be amended from time to time.
(1) "ESOP Preferred Stock" means the Class 1 ESOP Convertible Preferred Stock of the Company.
(m) "ESOP Participant" means any participant under the ESOP.
(n) "Fair Market Value" means, for any date, the closing price of the Common Stock on that date on the New York Stock Exchange as reported on the Composite Tape and published in the Wall Street Journal for that date, or, if there is no trading of the Common Stock on the date in question, then the closing price of the Common Stock, so reported and published, on the next preceding date on which there was trading in the Common Stock.
(o) "Fixed Dividend" shall mean the fixed dividend as defined in Section 3.1 (b) of the ESOP.
(p) "Highly Compensated Participant" means each Participant whose Compensation for the Plan Year exceeds the limitation on compensation set forth in section 401(a)(17) of the Code for that Plan Year. Once a Participant becomes a Highly Compensated Participant, he shall remain a Highly Compensated Participant even if his Compensation in a subsequent Plan Year is less than the applicable section 401(a)(17) limit for that Plan Year.
(q) "Participant" means an ESOP Participant who has an Account under this Plan, provided, that, except for purposes of Sections 2.3(a)(i) and 2.4(f), no member of the IAM Employee Group shall be a Participant.
(r) "Phantom Suspense Account" means a single bookkeeping account maintained by the Company pursuant to the terms of this Plan and the ESOP (Part B) which operates in a similar fashion as the Loan Suspense Account.
(s) "Plan" means the UAL Corporation Supplemental ESOP as set forth herein, effective as of July 12, 1994, as amended from time to time.
(t) "Qualified Plans" means the ESOP and other tax-qualified plans maintained by the Company or one of its Affiliates in which any ESOP Participant participates.
(u) "Release Fraction" means for any Plan Year, the number of months (or fractions thereof) in that Plan Year divided by the number of months (including fractional months) from the beginning of the Plan Year until the end of the 69-month period commencing on the Effective Date. For this purpose, the last Plan Year shall end at the end of the 69-month period commencing on the Effective Date.
(v) "Supplemental Trust" means the UAL Corporation Supplemental ESOP Trust and the various trusts created thereby.
(w) "Tax Limitations" means (i) the limits on annual additions under section 415 of the Code, including the limitation set forth in section 415(c)(6) of the Code applicable to employee stock ownership plans and the combined limits set forth in section 415(e) of the Code, (ii) with respect to Highly Compensated Participants only, the limitation on compensation under section 401(a)(17) of the Code, and/or (iii) the limitations imposed by section 401(a)(4) of the Code.
(x) "Trustee" means the trustee or trustees from time to time in office under the Supplemental Trust.
(y) "Voting Shares" means (i) with respect to Participants who are members of the ALPA Employee Group, the Class P ESOP Voting Junior Preferred Stock of the Company ("Class P Voting Shares"), (ii) with respect to Participants who are members of the IAM Employee Group, the Class M Voting Junior Preferred Stock of the Company ("Class M Voting Shares"), and (iii) with respect to Participants who are members of the Management and Salaried Employee Group, the Class S ESOP Voting Junior Preferred Stock of the Company ("Class S Voting Shares").
(z) "Valuation Date" shall be defined in accordance with the ESOP, provided that the date of the Company's dissolution, liquidation or Insolvency (as defined in the Supplemental Trust) shall also be a Valuation Date for purposes of Article Three.
1.4 Other Provisions. The terms defined in Sections 1.2 and 1.3 of the Plan shall apply equally to both singular and plural. The masculine pronoun, whenever used, shall include the feminine. When used in the Plan, the words "hereof," "herein" and "hereunder" and words of similar import shall refer to the Plan as a whole and not to any particular provision of the Plan, unless otherwise specified.
1.5 Special Rules. The following provisions of the ESOP shall be hereby incorporated into the Plan, with such modifications as are appropriate, provided that such provisions shall be construed in a manner consistent with, and subject to limitation by, the purpose and scope of the Plan (as set forth in Section 1. l) and the Supplemental Trust:
(b) Section 3.4 of the ESOP;
(c) Section 4.1 of the ESOP (except as otherwise provided in the Plan and the Supplemental Trust);
(d) Section 4.2 of the ESOP;
(e) Section 4.4 of the ESOP; and
(f) Section 7.10 of the ESOP.
Participation and Allocations
2.1 Participation. An Eligible Employee shall become a Participant on the Valuation Date when an Account on his behalf is first credited with Voting Shares or Convertible Shares under this Plan. Notwithstanding any other provision of this Plan to the contrary, except for purposes of Sections 2.3(a)(i) and 2.4(f), no ESOP Participant who is a member of the IAM Employee Group shall become a Participant hereunder or receive any credits, allocations or benefits pursuant to this Plan.
2.2 Number of Voting Shares and Convertible Shares Released Each Valuation Date.
(a) The maximum number of Convertible Shares issued under this Plan and the ESOP (Part B) shall be 3,862,063 and the maximum number of Voting Shares issued under this Plan and the ESOP (Part B) shall be 17,675,345, consisting of 8,171,312 Class P Voting Shares, 6,562,856 Class M Voting Shares, and 2,941,177 Class S Voting Shares; provided that, on the December 31, 1995 Valuation Date (and after the allocations described in Section 2.4(f) are completed), the maximum number of Convertible Shares and Voting Shares shall be increased to reflect the number of Additional Shares (other than shares of ESOP Preferred Stock) determined in accordance with Section 1.10 of the Recapitalization Agreement. Said Voting Shares shall be contributed by the Company, from time to time, to the Supplemental Trust and ESOP (Part B).
(b) On the Effective Date, the Phantom Suspense Account shall be credited with the number of Voting Shares and Convertible Shares provided in subsection (a) above.
(c) As of the Valuation Date for each Plan Year, the total number of Voting Shares released from the Phantom Suspense Account shall equal the number of unreleased Voting Shares held in the Phantom Suspense Account immediately before such release multiplied by the Release Fraction for that Plan Year.
(d) As of the Valuation Date for each Plan Year, the total number of Convertible Shares released from the Phantom Suspense Account shall equal the number of unreleased Convertible Shares held in the Phantom Suspense Account immediately before such release multiplied by the Release Fraction for that Plan Year.
(e) As of the Valuation Date for each Plan Year, the total number of shares of Company Stock other than Voting Shares and Convertible Shares, (for example, shares of Common Stock received upon the conversion of Convertible Shares) released from the Phantom Suspense Account shall equal the number of unreleased shares of such Company Stock held in the Phantom Suspense Account immediately before such release multiplied by the Release Fraction for that Plan Year.
2.3 General Allocation Provisions.
a) As of each Valuation Date, after the allocations pursuant to Sections 2.5(c) and (d), allocations of Voting Shares and Convertible Shares and Common Stock released from the Phantom Suspense Account shall be made in the following order:
(ii) Second, each Participant shall receive an allocation of Voting Shares and Convertible Shares pursuant to Section 2.4; and
(iii) Third, Voting Shares, Convertible Shares and Common Stock allocated to each Participant's Account hereunder shall be reduced pursuant to Section 2.7.
(c) Each Convertible Share that is released from the Phantom Suspense Account shall be either (i) in accordance with the terms of ESOP (Part B), contributed by the Company (or transferred from the Supplemental Trust) to ESOP (Part B), or (ii) allocated to Participants' Accounts hereunder. Each Voting Share released from the Phantom Suspense Account shall be either (i) in accordance with the terms of ESOP (Part B), contributed by the Company directly to ESOP (Part B) or (ii) allocated to Participants' Accounts hereunder (in which case the Company shall contribute a Voting Share to the Supplemental Trust).
2.4 Allocation of Convertible Shares and Voting Shares to Individual Accounts. On each Valuation Date, after the allocations of Voting Shares described in Section 2.3(a)(i) have been made, the remaining Voting Shares and Convertible Shares released from the Phantom Suspense Account shall be allocated, on an Employee Group-by-Employee Group basis, as follows:
(a) For each ESOP Participant, a "Hypothetical Share Number" shall be calculated for the Valuation Date. This number shall equal the number of shares of ESOP Preferred Stock that would have been allocated to the ESOP Participant under ESOP (Part A) on such Valuation Date if:
(ii) the Convertible Shares referred to in the immediately preceding clause (i) were released under ESOP (Part A) ratably over the 69 months starting on the Effective Date;
(iii) Section 5.4(a)(i)(A) of the ESOP were applied by allocating the ESOP Preferred Stock (including the Convertible Shares described in clause (i) above) among the Employee Groups as follows: ALPA Employee Group--46.23 % , IAM Employee Group--37.13 % , and Management and Salaried Employee Group--16.64%;
(iv) allocations under the ESOP (Part A) were made (A) without regard to the Tax Limitations, (B) without regard to clauses (ii), (iv), (v), (vi) or (vii) of 5.4(a) of the ESOP and (C) were based on Compensation rather than the definition of compensation in the ESOP; and
(v) each Convertible Share which was in fact allocated on a prior Valuation Date to Participants' or Beneficiaries' Accounts hereunder or contributed to ESOP (Part B) and allocated to Participants' or Beneficiaries' accounts thereunder were, after the date of such allocation, ESOP Preferred Stock held by ESOP (Part A) bearing the same Fixed Dividend (but not any other dividends) as the ESOP Preferred Stock that was allocated under ESOP (Part A). By way of illustration, assume a member of the ALPA Employee Group has a total of 130 Convertible Shares allocated to his Accounts hereunder and 70 Convertible Shares allocated to his accounts under ESOP (Part B). Assume further that each share of ESOP Preferred Stock allocated under the ESOP (Part A) has a value of $100 and pays an $8 Fixed Dividend, no dividends are paid on the Common Stock, and that each Convertible Share has a $75 value. For purposes of making the allocations under this clause (v), such individual shall be treated as having received a dividend of $1600 with respect to the 200 Convertible Shares allocated hereunder and under Part B. For purposes of calculating the Hypothetical Share Number, that individual shall receive an allocation of 16 Convertible Shares to make up for such dividend, notwithstanding the fact that the value of the Convertible Shares is $75/share.
(c) For each ESOP Participant, the difference, if any, between the Hypothetical Share Number and the Actual Share Number shall be referred to as the Tentative Allocation; provided, however, that, except for purposes of subsection (f), the Tentative Allocation for any member of the IAM Employee Group shall be zero. If the sum of the Tentative Allocations (ignoring negative Tentative Allocations) for all Participants in an Employee Group exceeds the number of Convertible Shares released from the Phantom Suspense Account for the Valuation Date under Section 2.2 to all such Participants' Accounts (for that Employee Group), each Tentative Allocation for Participants of that Employee Group shall be proportionately reduced.
(d) For each ESOP Participant, the number of Convertible Shares and Voting Shares to be transferred from the Supplemental Trust or contributed by the Company to ESOP (Part B) pursuant to the terms of ESOP (Part B) (excluding the Voting Shares described in Section 2.3(a)(i) and Section 2.7) shall be the same and shall equal the least of the following:
(ii) the Tentative Allocation, if any; or
(iii) the excess of the Hypothetical Share Number (calculated for this purpose only by applying Section 401(x)(17) of the Code) over the Actual Share Number, if any. The Hypothetical Share Number described in this clause (iii) shall be determined by recalculating the allocations made on the current and all prior Valuation Dates by assuming the Participant's Compensation for each Plan Year had been limited to the amounts then allowed under Code Section 401(x)(17). Accordingly, for purposes of calculating the Hypothetical Share Number under this clause (iii), (A) the Participants' Compensation in the current Plan Year shall be limited to the amount provided by Code Section 401(x)(17) and (B) the amount of dividends allocated to each ESOP Participant's Account during the Plan Year shall be calculated by assuming the allocation of the ESOP Preferred Stock made on earlier Valuation Dates was also based on Compensation, as limited by the Code Section 401(x)(17) limit then in effect.
Such number shall be referred to as the "Part B Number."
(f) Prior to the December 31, 1995 Valuation Date, the aggregate Hypothetical Share Numbers for all Participants for the 1994 Plan Year shall be retroactively increased by an additional number equal to X multiplied by Y; where X is the total number of shares of Preferred Stock to be issued as Additional Shares and Y is the Release Fraction for December 31, 1994. Such shares shall be divided among the Employee Groups in accordance with Section 2.4(a)(iii) and allocated to Participants based upon 1994 data (that is, 1994 Compensation and Wage Investments, as applicable). The excess of such new Hypothetical Share Number for the 1994 Plan Year over the Hypothetical Share Number previously determined for 1994 shall be credited hereunder or allocated under ESOP (Part B) in accordance with subsections (d) and (e) above, provided that the number in (d)(i) shall be calculated and credited as if the contributions were attributable to 1995, rather than 1994, unless the additional aggregate Part B Number shares are contributed to the ESOP no later than September 15, 1995. The calculations required by this clause (f) shall be performed prior to calculating the regular allocations for the 1995 year. The additional Convertible Shares credited pursuant to this clause (f) shall, for all purposes, including Section 2.4(a)(v), be allocated as of December 31, 1994.
(g) To the extent any interpretive issues arise in calculating Tentative Allocations, such issues shall be resolved, to the extent possible, by effectuating the purpose of the Plan, as set forth in Section 1.1; provided, however, that no such resolution shall increase the number of Voting Shares or Convertible Shares that may be allocated under the Plan and the ESOP (Part B). It is also intended that, for each Convertible Share allocated to a Participant's Account under this Plan, a Voting Share shall also be allocated to the Participant's Account; for each Convertible Share or share of ESOP Preferred Stock allocated to an ESOP Participant under the ESOP (Part A and Part B), a Voting Share shall be contributed to the ESOP (Part B) and allocated to the ESOP Participant's account under ESOP (Part B). To the extent that any shares of Company Stock are converted into shares of Common Stock prior to the end of the Wage Investment Period, an appropriate number of shares of Common Stock will be contributed (if applicable) and allocated hereunder in lieu of the Company Stock that would have been contributed and/or allocated hereunder and, if appropriate, the number of Convertible Shares and/or ESOP Preferred Stock shares set forth in various places in this Plan shall be revised; provided, however, except to the extent Voting Shares are converted into shares of Common Stock, the calculation of the number of Voting Shares to be contributed and allocated shall continue as if no shares of Company Stock had been converted.
2.5 Accounts.
(a) Participants' Accounts. The Company shall establish Accounts for each Participant to record the interest of each Participant under the Plan and, with respect to Voting Shares (and in the circumstances described in Sections 6.1 (e) or 6.9(b) hereof, the Convertible Shares), under the Supplemental Trust. Subject to Section 2.7, Voting Shares allocated to Participants' Accounts under this Plan shall be contributed to and held in the Supplemental Trust.
(b) Voting Shares and Convertible Shares. Voting Shares and Convertible Shares shall be credited to each Participant's Share Subaccount under the Plan in accordance with Section 2.4.
(c) Cash Dividends and Other Cash Distributions.
(ii) In addition, if the Company pays a cash dividend or makes a cash distribution with respect to Convertible Shares, an amount, equal to the dividends or distribution that would have been paid on the number of Convertible Shares then held in the Phantom Suspense Account had such shares been previously issued, shall be credited to Participants' Accounts, pro rata, according to the sum of the number of the Convertible Shares allocated to each Participant's Account hereunder and to each ESOP Participant's account under ESOP (Part B) on the applicable record date.
(iii) Amounts credited under clauses (i) and (ii) above shall be deemed immediately invested in Common Stock. The aggregate number of shares of Common Stock deemed acquired under the Supplemental Plan with such dividends or distributions shall equal the aggregate deemed dividend or distribution under clauses (i) and (ii) divided by the Fair Market Value of the Common Stock on the applicable payment date. Such Common Stock shall be allocated to Participants' Share Subaccounts hereunder, pro rata, based on the dollar amounts credited under clauses (i) and (ii) above to the Participants' Accounts hereunder. The dollar amounts credited to Participants' Accounts under clauses (i) and (ii) above shall be debited accordingly.
(e) Statements. Each Participant shall receive a statement of the balance in his Account at least annually.
(f) Construction. References hereunder to the "issuance" of shares shall be understood, where appropriate, as references to the crediting of such shares on a book-entry basis even if not explicitly so stated. The book-entry accounts to be maintained under this Plan are intended to record (on a "deemed" basis) the economic equivalent of the benefits that Participants would have accumulated if the relevant shares of stock had been credited to actual accounts in a non-taxable trust for their benefit under a defined contribution plan (but without duplication of benefits provided through another mechanism). Accordingly, appropriate book-entries and adjustments shall be made to equitably record the receipt or distribution of securities, property or cash (to the extent not specifically addressed herein) that would have occurred had the actual shares been maintained in a trusteed account and ultimately distributed therefrom. This subsection (f) shall not be construed as authorizing the creation of other mechanisms for the provision of the benefits referred to in this subsection.
2.6 Vesting. Except as described in Section 2.7, each Participant shall be one hundred percent vested in the value of his Accounts at all times.
2.7 Flowback.
(a) Beginning in the Plan Year after an ESOP Participant becomes a Participant and continuing each Plan Year thereafter, the number of Voting Shares, Convertible Shares and Common Stock allocated to his Account shall be reduced in accordance with this Section 2.7. On the last Valuation Date of each such Plan Year, the Participant's Voting Shares, Convertible Shares and Common Stock Shares (including any such shares allocated in a prior Plan Year due to limitations under Code section 401(a)(17)) and Common Stock Shares shall be reduced:
(ii) Second, by the maximum number of Convertible Shares and Voting Shares (such numbers to be the same) that may be contributed by the Company (or transferred from the Supplemental Trust) to ESOP (Part B) without disqualifying the ESOP or any other Qualified Plan; provided, however, that the amount contributed or transferred may include any such shares that were not previously contributed or transferred to ESOP (Part B) because of the limitations of Code section 401(a)(17); and
(iii) Third, by the maximum number of shares of Common Stock that may be transferred from the Supplemental Trust or contributed by the Company to ESOP (Part B) without disqualifying the ESOP or any other Qualified Plan; provided, however, that the amount transferred or contributed may include any shares that were not previously contributed or transferred to ESOP (Part B) because of the limitations of Code section 401(a)(17).
(b) As soon as practicable after the end of the Plan Year (but before the time prescribed for filing the Employer's federal income tax return for that Plan Year), the Company shall direct the Trustee to transfer from the Supplemental Trust or contribute to the ESOP (Part B) that number of Voting Shares, Convertible Shares and Common Stock equal to the sum of the applicable reductions calculated for each Participant under this Section 2.7.
2.8 Voting Shares and Convertible Shares Contributed
or Transferred to the ESOP (Part B) or Supplemental Trust.
ARTICLE 3
Payment of Benefits
3.1 Commencement and Form of Payment.
(a) Notwithstanding any provision of this Plan to the contrary, no Participant shall receive a distribution of any Voting Shares or Convertible Shares. Prior to any distribution, all Voting Shares and Convertible Shares held in the Participant's Account to be distributed shall be deemed converted into Common Stock (and cash for any fractional share).
(b) Unless the Participant elects otherwise,
(ii) payments of a Participant's Account shall be trade in a lump sum in actual shares of Common Stock and cash. The number of shares of Common Stock distributed shall equal the number of shares of Common Stock credited to the Participant's Account (after converting the Convertible Shares and Voting Shares allocated to the Participant's Account). In addition, the Participant shall receive cash for any fractional share of Common Stock (after the above conversions and based on the Fair Market Value of the Common Stock on the last day of the month prior to the distribution) and the value of the Participant's Cash Subaccount credited to the Participant's Account as of the Valuation Date described in clause (i).
(ii) an election to receive payments in a series of five substantially equal annual installments (each such installment to be paid by converting the same proportion of Convertible Shares, Voting Shares and Common Stock then held in the Participant's Account);
(iii) an election to receive the entire distribution in shares of Common Stock (except for fractional shares), in which case the Company shall apply an amount equal to the Cash Subaccount (net of all costs involved in such purchase) to the purchase of Common Stock in the open market. The number of shares of Common Stock distributed shall equal (A) the number of shares described in Section 3.1(b)(ii) plus (B) the number of shares of Common Stock that can be so acquired with amounts described in the preceding sentence; and
(iv) an election to receive the entire distribution in cash, in which case the Company may sell the number of shares of Common Stock that would have been distributed to the Participant pursuant to Section 3.1(b)(ii) if no such election had been made. The distribution shall equal the value of the Cash Subaccount plus the proceeds (net of selling expenses) realized (or that would have been realized had the sale been made) from the sale of the shares of Common Stock described in the preceding sentence.
(v) Notwithstanding clauses (i)-(iv) above, any such election (or modification or revocation thereof) shall be void unless made at least one year prior to the Participant's termination of employment with the Employer (and its Affiliates) or prior to January 1, 1995.
3.2 No Loans, In-service Payments or Withdrawals. No Participant shall be allowed to borrow from the Plan. No withdrawal or payment of benefits shall be allowed before a Participant terminates employment with the Company and its Affiliates.
3.3 No Diversification Rights. A Participant may not direct the Trustee as to the investment of his Account, even if the Participant is permitted to diversify his account under the ESOP pursuant to Section 7.1 of the ESOP.
3.4 Beneficiary Designation.
(a) Unless a Participant designates a different Beneficiary, in accordance with the provisions of subsection (b), his Beneficiary shall be his beneficiary under the ESOP.
(b) In order to designate a Beneficiary other than the beneficiary designated under the ESOP, the Participant shall sign a form furnished by the Committee, designating any legal or natural person or persons (who may be designated contingently or successively) to whom his benefits are to be paid if he dies before he receives all of his benefits; provided, however, that if a married Participant designates a Beneficiary other than his spouse, his spouse must consent in writing to such designation and acknowledge in writing the effect of such designation, and such consent and acknowledgement must be witnessed by a notary public. Any designation by an unmarried Participant shall be rendered ineffective by any subsequent marriage and any consent of a spouse shall be effective only as to that spouse. A Beneficiary designation form will be effective only when the signed form is filed with the Committee while the Participant is alive and will cancel all Beneficiary designation forms signed earlier. If a deceased Participant fails to designate a Beneficiary as provided above (or if the designated Beneficiary dies before the Participant or before receiving complete payment of the Participant's benefits), the Company shall pay and, if applicable, the ESOP Committee shall direct the Trustee to pay the Participant's benefits as follows:
(ii) second, to the children (including any adopted children) of the Participant, per stirpes; and
(iii) third, if the Participant leaves no surviving spouse or has no descendants pursuant to paragraph (b) above, to the estate of the last to die of the Participant or his designated Beneficiary.
Upon the dissolution of marriage of a Participant, any designation of the Participant's former spouse as a Beneficiary shall be treated as though the Participant's former spouse had predeceased the Participant, unless (i) the Participant executes another Beneficiary designation that complies with this Section 3.4 and that clearly names such former spouse as a Beneficiary, or (ii) a court order presented to the Committee prior to distribution on behalf of the Participant explicitly requires the Participant to continue to maintain the former spouse as the Beneficiary. In any case in which the Participant's former spouse is treated under the Participant's Beneficiary designation as having predeceased the Participant, no heirs or other beneficiaries of the former spouse shall receive benefits from the Plan as a Beneficiary of the Participant except as provided otherwise in the Participant's Beneficiary designation.
(a) Subject to subsection (b), if, in the opinion of the Committee, a Participant or Beneficiary is under a legal disability or is in any way incapacitated so as to be unable to manage his financial affairs, until claim is made by a conservator or other person legally charged with the care of his person or of his estate, the Committee may (but shall not be required to) direct the Company to make payment to a relative or friend of such person for his benefit. Thereafter, any benefits under the Plan to which such Participant or Beneficiary is entitled shall be paid to such conservator or other person legally charged with the care of his person or his estate.
(b) In the event any amount is payable under the Plan to a minor, payment shall not be made to the minor, but instead shall be paid (i) to that person's then living parent(s) to act as custodian, (ii) if that person's parents are then divorced, and one parent is the sole custodial parent, to such custodial parent, or (iii) if no parent of that person is then living, to a custodian selected by the Committee to hold the funds for the minor under the Uniform Transfers or Gifts to Minors Act in effect in the jurisdiction in which the minor resides. If no parent is living and the Committee decides not to select another custodian to hold the funds for the minor, payment shall be made to the duly appointed and currently acting guardian of the estate for the minor or, if no guardian of the estate for the minor is duly appointed and currently acting within 60 days after the date the amount becomes payable, payment shall be deposited with the court having jurisdiction over the estate of the minor.
(c) Any payment under this Section 3.5 shall discharge, to that extent,
the obligation of the Company and the Employer to pay benefits under the
Plan with respect to such Participant, Beneficiary or minor.
ARTICLE 4
Administration of Plan
4.1 General. The Company shall be the administrator of the Plan. The Committee shall have the rights, duties and obligations set forth herein.
4.2 Incorporation of ESOP Provisions. Section 11 (excluding Section 11.1) and all of Section 12 of the ESOP are incorporated by reference, with such modifications as are appropriate; provided, however, that:
(a) The Committee shall consist of four members: three members appointed by ALPA and one member appointed by the Company.
(b) All references to the IAM Committee members appointed by the IAM or the IAM Employee Group shall be deleted.
(c) A quorum shall consist of at least three members, including the member appointed by the Company.
(d) The proviso to the first sentence of Section 11.3 shall not be incorporated by reference.
(e) The last sentence of Section 11.7 shall not be incorporated by reference; provided that the Company shall use its reasonable best efforts to cover the ALPA and, if applicable, IAM Committee members (if such members are employees) with liability insurance coverage for their activities as Committee members comparable to any insurance provided for the Salaried and Management Employee Group Committee member.
(f) All meetings of the Committee shall be held on the same day as a meeting of the ESOP Committee under the ESOP.
(g) No expenses or indemnities shall be incurred or paid hereunder which are duplicative of expenses or indemnities incurred or paid pursuant to the ESOP.
(h) Except with respect to matters solely relating to this Plan, the Committee will not employ any person or delegate any matter to any person who has not been employed by the ESOP Committee under the ESOP.
(i) Notwithstanding the above and the definition of "Committee", clauses (a), (b) and (c) shall be disregarded with respect to any issue involving Voting Shares allocated to the IAM Employee Group under this Plan if any Voting Shares are allocated to an Account of a Participant who is a member of the IAM Employee Group.
4.3 Decisions of Committee under ESOP. Notwithstanding
any provision of this Plan any matter (including any decision by the Committee
with respect to an appeal of a claim of a Participant (or Beneficiary))
under the ESOP shall be binding hereunder to the extent the matter (or
claim) is substantially the same as a matter (or claim made by the same
Participant (or Beneficiary)) to be decided hereunder.
ARTICLE 5
Amendment and Termination
5.1 Amendment. While the Company expects and intends to continue the Plan, the Company must necessarily reserve, and does hereby reserve, the right to amend the Plan at any time, except that no amendment may be adopted, without the approval of ALPA, provided, that. with respect to amendments adopted which are described in Section 13.1(b) or (d) of the ESOP (which subsections shall be treated as appropriately modified to the extent necessary to reflect the circumstances of this Plan) the need for joint approval shall be modified, and provided further that no amendment which would affect the allocation of the Class M Voting Shares shall be adopted without the approval of the IAM.
5.2 Termination. Subject to the approval of ALPA and IAM, the Plan will terminate as to all of the Employees on any date specified by the Board. Notwithstanding the preceding sentence, the approval of the IAM will only be required if Class M Voting Shares reserved for allocation have been transferred or contributed to the Supplemental Trust.
5.3 Effect of Amendment or Termination. Any
amendment, modification, or termination shall not reduce, alter, or impair
any rights under the Plan as to amounts credited to the Accounts of Participants
under the Plan as of the date of such amendment, modification or termination.
ARTICLE 6
Miscellaneous Provisions
6.1 Source of Payments.
(a) It is intended that this Plan and the benefits thereunder be unfunded and unsecured for tax purposes and for purposes of Title I of ERISA:
(b) Notwithstanding any other provisions of the Plan, the obligation under this Plan to a Participant or Beneficiary is a liability of the Company and the Participant's Employer, except to the extent paid from the Supplemental Trust. Liabilities of the Company and each Participant's Employer to any Participant or Beneficiary pursuant to the Plan shall be those of a debtor pursuant only to the contractual obligations created by the Plan; no such obligation of the Company and a Participant's Employer shall be deemed to be secured by any pledge or other encumbrance on any property of the Company, such Participant's Employer or otherwise. To the extent that any Participant or Beneficiary acquires a right to receive payment from the Company or a Participant's Employer under the Plan, such right shall be no greater than the right of an unsecured general creditor of the Company and Participant's Employer. No Employer or Affiliate shall, by virtue of any provisions of the Plan or by any action of any person, be deemed to be a trustee or other fiduciary of any property for any Participant or Beneficiary.
(c) (i) The creation and funding of the Supplemental Trust shall not create a security interest in the property of such trust in favor of Participants or Beneficiaries or otherwise cause a "funding" of the Plan or Trust inconsistent with Section 6.1 (a) hereof.
(iii) Except as provided in (e) below, it is intended that the Convertible Shares not be deposited in the Supplemental Trust.
(e) ALPA may at any time direct that, in addition to Voting Stock previously delivered to the Supplemental Trust, all other Company Stock credited under this Plan (including unreleased Company Stock credited to the Phantom Suspense Account) be delivered by the Company to the Trustee of the Supplemental Trust for retention and distribution in a manner corresponding to the treatment of Voting Shares hereunder. Such delivery shall be made as soon as possible following ALPA's request in accordance with Section 1(h) of the Supplemental Trust; the Company shall make any amendments to the Plan or Supplemental Trust agreement as ALFA may reasonably request to clarify further operation of the Plan and Trust to reflect delivery of such shares (in lieu of the book-entry system provided for herein) in the manner contemplated by Schedules 1.6(b)(iii) and 1.6(b)(iv), respectively, to the unamended Agreement and Plan of Recapitalization dated as of March 25, 1994 among the Company, ALPA and the IAM, but such delivery shall not await the making of those amendments.
6.2 Transfer Restrictions Provisions.
(a) This Plan and the issuance or transfer of shares of Common Stock (and/or the payment of money) pursuant thereto are subject to all applicable Federal and state laws, rules and regulations, to the rights, preferences, limitations, and restrictions set forth in the Company's Certificate of Incorporation and Bylaws, and to such approvals by any regulatory or governmental agency (including without limitation "no action" positions of the Securities and Exchange Commission) which may, in the opinion of counsel for the Company, be necessary or advisable in connection therewith. Without limiting the generality of the foregoing, no shares shall be issued by the Company, nor cash payments made by the Company, unless and until all legal requirements applicable to the issuance or payment have, in the opinion of counsel to the Company, been complied with. In connection with any stock issuance or transfer, the person acquiring the shares shall, if requested by the Company, give assurances satisfactory to counsel to the Company in respect to such matters as the Company may deem desirable to assure compliance with all applicable legal requirements and the Company's Certificate of Incorporation and Bylaws.
(b) The Company shall at all times maintain an effective registration statement under the Securities Act of 1933 and timely comply with the reporting requirements under the Securities Exchange Act of 1934 with respect to the shares of Common Stock. The Company shall obtain any other federal, state or local approvals as may be necessary from time to time to enable the Trustee to consummate any desired conversion or disposition of the shares of Company Stock. Notwithstanding the foregoing, there shall be no public sale or distribution of Common Stock without the consent of UAL during the seven days prior to or ninety days after any registration statement relating to an underwritten sale of securities of UAL has become effective.
6.3 Inalienability of Benefits. No benefit payable under, or interest in, the Plan shall be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, or charge, and any attempt to do so shall be void. Any such benefit or interest shall not in any manner be liable for or subject to garnishment, attachment, execution, or levy or liable for or subject to the debts, contracts, liabilities, engagements, or torts of any Participant or Beneficiary. If the Committee finds that any Participant or Beneficiary has become bankrupt or that any attempt has been made to anticipate, alienate, sell, transfer, assign, pledge, encumber, or charge any benefit payable under, or interest in, the Plan, the Committee shall hold or apply such benefit or interest or any part thereof to or for the benefit of such Participant or Beneficiary.
6.4 No Right of Employment. Nothing contained herein nor any action taken under the provisions hereof shall be construed as giving any Participant the right to be retained in the employ of any Employer or its Affiliates.
6.5 Withholding. The Company or the Trustee, - -as directed by the Company, shall withhold from any payment hereunder any required amount of income and other taxes. Notwithstanding the foregoing, if the Company, in its sole discretion, determines that the Participant is subject to income or other tax withholding prior to the payment of benefits hereunder, all such amounts shall be withheld from the compensation otherwise payable by the Employer to the Participant. The Committee will provide to the Company all information reasonably requested by the Company to calculate the appropriate withholding amount. In accordance with written instructions from the Company, the Trustee shall sell such number of shares of Common Stock (after converting the Voting Shares, if necessary) necessary to provide the required withholding with respect to benefits payable from the Supplemental Trust. The Trustee will remit any amounts so withheld as instructed by the Committee, including to the Company or the Employer if so instructed by the Committee. The withholding of any taxes hereunder shall not affect the determination of whether a Participant has received the benefits to which he is entitled to under the Plan.
6.6 Headings. The headings of the sections in the Plan are placed herein for convenience of
reference; in the case of any conflict, the text of the Plan, rather than such heading, shall control.
6.7 Construction. Except to the extent governed by federal law, the Plan shall be construed, regulated, and administered in accordance with the laws of the State of Illinois. If any provision shall be held by a court of competent jurisdiction to be invalid and unenforceable, the remaining provisions of this Plan shall continue to be fully effective. To the extent possible, each provision of the Plan shall be administered, interpreted and construed to carry out the intent of the Plan as set forth in Section 1.1 and Section 2.4(g); provided, that in no event shall the number of Voting Shares and Convertible Shares allocated or credited under this Plan and ESOP (Part B) exceed the maximum number set forth in Section 2.2(a) (including any Additional Shares). Any provision that cannot be administered, interpreted and construed to carry out the intent of the Plan set forth in Section 6.1(a) shall, to that extent, be disregarded.
6.8 Receipt and Release. Any payment to any Participant or Beneficiary in accordance with the provisions of this Plan shall, to the extent thereof, be in full satisfaction of all claims against the Company with respect to this Plan and the Committee tray require such Participant or Beneficiary, as a condition precedent to such payment, to execute a receipt and release to such effect. If any Participant or Beneficiary is determined by the Committee to be incompetent by reason of physical or mental disability (including minority) to give a valid receipt and release, the Committee may cause the payment or payments becoming due to such person to be made to another person for his benefit without responsibility on the part of the Committee or the Company to follow the application of such funds.
6.9 Voting; Control Transaction.
(a) The Committee shall instruct the Trustee how all shares of Company Stock held by the Supplemental Trust shall be voted. In the case of a Control Transaction with respect to the shares, the Committee shall instruct the Trustee whether to exchange or tender such shares or otherwise how to respond. In either case, the Committee shall consider the sentiments of the Participants, but shall not be required to take any particular action in response thereto. The Company and the Trustee agree to amend the Plan and Supplemental Trust to provide for pass-through voting and response rights for all Employee Groups in the manner set forth in the ESOP if directed to do so by ALPA in writing (which notice shall also constitute approval of ALPA).
(b) Notwithstanding any provision of the Plan or Supplemental Trust that requires exclusive investment in Company Stock, the following additional rules shall apply in the case of a Control Transaction: (i) if ALPA so requests in writing, all Convertible Shares credited under this Plan (including such shares credited to the Phantom Suspense Account) and all Voting Shares credited to the Phantom Suspense Account shall be delivered by the Company to the Supplemental Trust and the Plan and Supplemental Trust shall be amended, such delivery and amendments to be in accordance with Section 6.1(e) hereof, provided that at ALPA's request, such delivery may be subject to the same conditions for the sale of ESOP Preferred to the ESOP set forth in Section 8.2(e) of the ESOP; (ii) to the extent possible, all proceeds from any sale or exchange of Voting Shares and Convertible Shares shall be reinvested in "appropriate securities," as defined in Section 8.2(d) of the ESOP and the Plan shall continue; and (iii) if the Trustee is unable so to invest, the Company shall make appropriate arrangements reasonably satisfactory to ALPA, it being the present intention that those arrangements should parallel those established for the ESOP. In the case of a Control Transaction, if ALPA does not request that the Convertible Shares and Voting Shares be delivered to the Supplemental Trust, the Company shall make appropriate arrangements, reasonably satisfactory to ALPA, to protect the substantive economic interests of the affected Employee Groups, it being the present intention that these arrangements shall parallel those established for the ESOP.
6.10 Notices. Any notice or document required to be filed with the Committee under the Plan shall be provided in a manner consistent with Section 15.4 of the ESOP, which terms are hereby incorporated into this Plan to the extent consistent with the terms hereof.
6.11 Evidence. Evidence required of anyone under the Plan may be by certificate, affidavit, document or other information which the person acting on it considers pertinent and reliable, and signed, made or presented by the proper party or patties.
6.12 Action by Employer. Any action required or permitted to be taken by an Employer under the Plan shall be by resolution of its board of directors or by a person or persons authorized by its board of directors.
6.13 Execution. To record the adoption of this Plan, the undersigned duly authorized officers of the Company have caused this document to be executed and to bear the corporate seal of the Company, all as of the Effective Date.
6.14 Cooperation. At the request of ALPA, the Company agrees that it will (a) use reasonable efforts to submit and otherwise cooperate in obtaining an IRS ruling that the contemplated operation of the Plan and the Supplemental Trust will not result in current income tax taxation to any Participant or Beneficiary, and (b) adopt such amendments to this Plan and the Supplemental Trust as may be reasonably requested by ALPA for the purposes of further protection against such taxability, provided such amendments do not materially increase the costs of operating the Plan and Supplemental Trust. By accepting the Plan and any Supplemental Trust, the Trustee shall thereby have agreed to acknowledge and accept any such amendment.
6.15 Adjustments. This Plan contains various
references to ESOP Preferred Stock, Convertible Shares and to various numbers
of such shares. If and to the extent appropriate, an appropriate revision
shall be made to such references if the Preferred Stock and/or Convertible
Shares are changed into, or exchanged for, a different number or kind of
shares or securities of the Company through a reorganization or merger,
or through a combination, recapitalization, reclassification. stock consolidation
or otherwise.
IN WITNESS WHEREOF, the Company has caused this Plan to be executed
this 12th day of July 1994.
UAL CORPORATION
By: /s/ J.R. O'Gorman
</HTML>
</TEXT>
</DOCUMENT>
<TYPE> EX-10.18
<TEXT>
<HTML>
Exhibit 10.18
FIRST AMENDMENT
OF
UAL CORPORATION
SUPPLEMENTAL ESOP
(Effective as of July 12, 1994)
By virtue and in exercise of the amending power reserved to UAL Corporation (the "Company") under section 5.1 of the UAL Corporation Supplemental ESOP (Effective as of July 12, 1994) (the "Plan"), which amending power thereunder is subject to the approval of the Air Line Pilots and Association, International ("ALPA"), the Company hereby amends the Plan, as follows, effective January 1, 1995:
Section 3.1(c)(v) is amended by changing "January 1, 1995" to "February 24, 1995."
IN WITNESS WHEREOF, the Company has caused this First Amendment to be
executed on February 22, 1995.
UAL CORPORATION
/s/ Stuart I. Oran
Stuart I. Oran
Executive Vice President
Corporate Affairs and
General Counsel
Approved by:
AIR LINE PILOTS ASSOCIATION,
INTERNATIONAL
/s/ J. Randolph Babbitt
President
</HTML>
</TEXT>
</DOCUMENT>
<TYPE> EX-10.19
<TEXT>
<HTML>
SECOND AMENDMENT
OF
UAL CORPORATION
SUPPLEMENTAL ESOP
(Effective as of July 12, 1994)
By virtue and in exercise of the amending power reserved to UAL Corporation (the "Company") under section 5.1 of the UAL Corporation Supplemental ESOP (effective as of July 12, 1994) (the "Plan"), which amending power thereunder is subject to the approval of the Air Line Pilots Association, International ("ALPA"), the Company hereby amends the Plan, as follows, effective January 1, 1995:
1. Section 1.1(c) is amended by adding the following to the end of the section:
7. Section 2.4(a)(iv) shall be amended to read as follows:
IN WITNESS WHEREOF, the Company has caused this Second Amendment to be executed on August 17, 1995.
UAL CORPORATION
/s/ Stuart I. Oran
Executive Vice President-
Corporate Affairs and
General Counsel
Approved by:
AIR LINE PILOTS ASSOCIATION,
INTERNATIONAL
/s/ Harlow B. Osteboe
/s/ J. Randolph Babbitt
INTERNATIONAL ASSOCIATION OF
MACHINISTS AND AEROSPACE WORKERS
/s/ Kenneth W. Thiede
</HTML>
</TEXT>
</DOCUMENT>
<TYPE> EX-10.20
<TEXT>
<HTML>
THIRD AMENDMENT
OF
UAL CORPORATION
SUPPLEMENTAL ESOP
(Effective as of July 12, 1994)
By virtue and in exercise of the amending power reserved to UAL Corporation (the "Company") under section 5.1 of the UAL Corporation Supplemental ESOP (effective as of July 12, 1994) (the "Plan"), which amending power thereunder is subject to the approval of the Air Line Pilots Association, International ("ALPA") and the International Association of Machinists and Aerospace Workers (the "IAM"), the Company hereby amends the Plan, as follows, effective January 1, 1995:
1. The material added to the end of Section 1.1(c) by the Second Amendment is deleted and the following inserted in its place:
7. The first sentence of Section 2.4(c) is amended to read as follows:
10. Section 5.1 is amended to read as follows:
UAL CORPORATION
/s/ Douglas A. Hacker
Approved by:
AIR LINE PILOTS ASSOCIATION,
INTERNATIONAL
/s/ J. Randolph Babbitt
/s/ Harlow B. Osteboe
INTERNATIONAL ASSOCIATION OF
MACHINISTS AND AEROSPACE WORKERS
/s/ Kenneth W. Thiede
</HTML>
</TEXT>
</DOCUMENT>
<TYPE> EX-10.28
<TEXT>
<HTML>
UAL CORPORATION
SUPPLEMENTAL ESOP
TRUST AGREEMENT
Effective July 12, 1994
INDEX
| Section |
Page
|
|
| RECITALS: |
1
|
|
| Section 1. | Trust Fund |
1
|
| Section 2. | Payments to Trust Beneficiaries |
3
|
| Section 3. | Trustee Responsibility Regarding Payments to a Trust Beneficiary When the Company is Insolvent |
4
|
| Section 4 | Term and Payments to the Company |
5
|
| Section 5 | Powers of the Trustee |
5
|
| Section 6. | Accounting by the Trustee |
9
|
| Section 7 | Responsibilities and Powers of Trustee |
10
|
| Section 8 | Compensation and Expenses of the Trustee; Taxes |
11
|
| Section 9. | Replacement of the Trustee |
12
|
| Section 10. | Amendment |
12
|
| Section 11. | Severability and Alienation |
13
|
| Section 12 | Governing Law |
13
|
| Section 13 | Notices |
13
|
| Section 14 | Signature in Counterparts |
14
|
| Section 15 | Defined Terms |
14
|
i
RECITALS:
WHEREAS,
certain employees of the Company and its Affiliates are eligible to receive
certain benefits pursuant to the UAL Corporation Supplemental ESOP (the
"Plan"), a copy of which is attached hereto as Exhibit A and made a part
hereof; and
WHEREAS,
the Company wishes to establish five trusts, as set forth in Section 1(g),
(individually and collectively referred to as the "Trust") and to contribute
Voting Shares, to the Trust to be held therein, subject to the Company's
power to revoke the Trust to the extent provided below, in whole or in
part, at any time or from time to time, and subject to the claims of the
Company's creditors in the event of the Company's Insolvency, as hereinafter
defined, until distributed to the Participants and their beneficiaries
("Trust Beneficiaries") as benefits in such manner and at such times as
specified in the Plan;
WHEREAS,
it is the intention of the parties that this Trust shall constitute an
unfunded arrangement and shall not affect the status of the Plan as constituting
both (i) an unfunded plan maintained for the purpose of providing deferred
compensation for a select group of management or highly compensated employees
for purposes of Title I of the ERISA and (ii) an excess plan under Section
3(36) of ERISA.
NOW,
THEREFORE, the parties do hereby agree that the Trust shall be composed,
held and disposed of as follows:
(b) Subject to the provisions of Sections 3 and 4, the Company may not revoke the Trust.
(d) The principal of the Trust, and any earnings
thereon, shall be held separate and apart from other funds of Company and
shall be used exclusively for the uses and purposes of Trust Beneficiaries
and general creditors as herein set forth. Notwithstanding any other provision
of this Trust Agreement to the contrary, no Trust Beneficiary shall have
any preferred claim on, or any beneficial ownership interest in, any assets
of the Trust. Any rights created under the Plan and this Trust Agreement
shall be mere unsecured contractual rights of Trust Beneficiaries against
the Company and his Employer in accordance with the Plan. Any assets held
by the Trust will be subject to the claims of Company's general creditors
in the event of Insolvency, as defined in Section 3(a) herein. No rights
to a distribution under the Plan shall be created under this Trust Agreement
independently of any Trust Beneficiary's right to a distribution or payment
under the Plan. Neither the Company nor the Trustee shall have any power
to create a security interest in the assets of the Trust in favor of any
Trust Beneficiary, any person entitled to a Plan benefit by reason of the
death of any Trust Beneficiary or any creditor of the Company. Nothing
contained herein or in any provision of the Plan shall operate to create
a security interest in any part of the assets of the Trust on behalf of
any Trust Beneficiary or any person entitled to benefits upon the death
of any Trust Beneficiary.
(e) In accordance with the Plan, as directed by
the Company, the Trustee shall transfer certain Shares from the Trust to
the ESOP Trust.
(f) This Trust consists of five trusts, each of
which are set forth in this Trust Agreement. The trusts are: (i) a trust
holding the Class P Voting Shares allocated to the Accounts of Participants
under the Plan ("Trust 1 "); (ii) a trust holding the Class S Voting Shares
allocated to the Accounts of Participants under the Plan ("Trust-2"); (iii)
a trust holding the Class M Voting Shares, if any, allocated to the Accounts
of Participants under the Plan ("Trust-3"); (iv) a trust which holds the
Convertible Shares sold or contributed to such Trust, if any, as described
in Section 1(h) ("Trust-4"); and (v) a trust holding the Convertible Shares
sold or contributed to the Trust, if any, that have been allocated to the
Accounts of Participants under the Plan ("Trust-5"). For ease of reference,
all of such trusts shall be referred to as the "Trust;" such a reference
shall constitute a reference to each of the appropriate trusts. At such
times that any Participant receives an allocation of Convertible Shares
under the Plan, the Trustee shall transfer the appropriate number of Convertible
Shares from Trust-4 to Trust-5.
(g) Section 1.5 of the Plan is incorporated by reference (excluding Section
1.5(a), (b), and (f)), but with such modifications as are necessary in
light of the fact that this document creates a trust.
(h) As provided in Sections 6.1 (e) and 6.9 of
the Plan, at the written election of ALPA, the Company shall sell or contribute
Convertible Shares to the Trustee of Trust-4 and Trust-5. Such Convertible
Shares shall become the principal of Trust-4 and Trust 5 to be held, administered
and disposed of by the Trustee as provided in this Trust Agreement. In
the case of a sale of such Convertible Shares to the Trust, the Company
shall contribute to the Trust an amount of cash and/or accept the Trustee's
promissory note (to be immediately forgiven or repaid with additional cash
contributed by the Company to the Trust) sufficient to permit the Trustee
to consummate such purchase. The Company shall also cause to be delivered
to the Trust an appropriate number of shares of Common Stock to satisfy
the requirements of Sections 6.1(e) or 6.9 of the Plan.
(b) If at any time the number of Shares held in
the Trust is not sufficient to make any directed distribution of benefits,
in accordance with the Plan, to any Trust Beneficiary then entitled
to a distribution, the Trustee shall distribute the balance of the Shares
(and any other assets) held in the Trust (or return them to the Company
for distribution as provided above) to or on behalf of all the Trust Beneficiaries
then entitled to distributions in the following manner: the benefits to
be distributed to any Trust Beneficiary shall be equal to the balance of
Trust assets multiplied by a fraction the numerator of which is the amount
of benefits such Trust Beneficiary is entitled to distribution of at that
time and the denominator of which is the amount of benefits all Trust Beneficiaries
are entitled to distribution of at that time (the foregoing calculations
to be made on an Employee Group-by-Employee Group basis, for example,
assets held in Trust 1 shall be available for distribution only to members
of the ALPA Employee Group). No provision of this Trust Agreement shall
relieve the Company of its liabilities to pay benefits except to the extent
that the same have been paid from the Trust hereunder.
(c) The Trustee shall make provision for withholding
of any federal, state or local taxes that may be required in accordance
with Section 6.5 of the Plan.
(d) The Trustee shall provide the Company with
written confirmation of the fact and time of any commencement of payments
directly to a Trust Beneficiary hereunder within 30 business days after
any payments commence to a Trust Beneficiary. The Company shall notify
Trustee in the same manner of any payments an Employer commences to make
to a Trust Beneficiary pursuant to the Plan.
(b) At all times during the continuance of this
Trust, as provided in Section 1(d) hereof, the principal and income of
the Trust shall be subject to claims of general creditors of the Company,
but only as set forth below:
(b) It shall be the duty of the Trustee (i) to
hold, invest and reinvest the Fund in accordance with the provisions of
this Trust Agreement, and (ii) to pay moneys therefrom in accordance with
the written directions of the Committee.
(c) To the extent that Company contributions are
made in Company Stock, the Trustee shall retain such Company Stock. The
Trustee shall invest any other assets of the Trust exclusively in Company
Stock (except for de minimis investments of cash pending investment in
Company Stock or pending distribution to Participants). The Trustee shall,
at the direction of Committee, acquire Company Stock either from other
shareholders or directly from the Company. If at the time Company Stock
is to be purchased, the Company has outstanding more than one class of
Company Stock, the Committee shall direct the Trustee as to which class
of Company Stock shall be purchased. The Trustee may rely in good faith
without liability upon the valuation of Company Stock as determined by
the Committee. Subject to the preceding sentences of this Section 5(c),
the Trustee may also, at the direction of the Committee, invest the Fund
in temporary investments other than Company Stock, may hold such portion
of the Fund in such investments as may be required under the Plan, may
hold such portion of the Fund uninvested as the Committee deems advisable
for making distributions under the Plan, may invest assets of the Trust
in short-term investments bearing a reasonable rate of interest, including,
without limitation, deposits in, or short-term instruments of, the Trustee.
(d) The Trustee shall have no duty hereunder
to determine or inquire into whether any directions received from the Committee
in accordance with the terms of this Trust Agreement represent proper and
lawful decisions. The Trustee shall have no duty to review any investment
to be acquired, held or disposed of pursuant to such instructions from
the Committee. If the Trustee does not receive written directions with
respect to any part of the Fund subject to the Committee's direction (including,
without limitation, income, sale proceeds or contributions), the Trustee
shall, pending receipt of
such directions, hold and invest such amount in short-term securities
as provided in subsection (c) hereof.
(e) In addition to, and not in limitation of, the
powers now, or which may later become, vested in it, the Trustee shall
have the following powers; provided, however, that the Trustee's exercise
of such powers shall be consistent with and subject to all other provisions
of this Trust Agreement, and provided further that, subject to the provisions
of Section 7(g), the powers set forth in clauses (i)-(v) shall be exercised
by the Trustee only to the extent and in the manner directed by the Committee
in accordance with the terms of this Trust Agreement, except as otherwise
required by applicable law:
(ii) To exercise voting rights either in person or by proxy, with
respect to any securities or other property, and generally to exercise
with respect to the Fund all rights, powers and privileges as may be lawfully
exercised by any person owning similar property in his own right;
(iii) To exercise any options, conversion rights, put rights, or
rights to subscribe for additional stock, bonds or other securities appurtenant
to any securities or other property held by it, and to make any necessary
payments in connection with such exercise, and to join in, dissent from,
and oppose the reorganization, consolidation, recapitalization, liquidation,
merger or sale of corporate property with respect to any corporations or
property in which it may be interested as Trustee;
(iv) To compromise, compound, and settle any debt or obligation owing
to or from it as Trustee, and to reduce or increase the rate of interest
on, extend or otherwise modify, foreclose upon default, or otherwise enforce
any such obligation;
(v) To sue or defend suits or legal proceedings to enforce or protect
any interest of the Trust, and to represent the Trust in all suits or legal
proceedings in any court or before any other administrative agency, body
or tribunal, provided that the Trustee is indemnified to the Trustee's
satisfaction against liability and expenses;
(viii) To register any securities held by it hereunder in its own
name or in the name of a nominee with or without the addition of words
indicating that such securities are held in. a fiduciary capacity, to permit
securities or other property to be held by or in the name of others, to
hold any securities in bearer form and to deposit any securities or other
property in a depository, clearing corporation or similar corporation,
either domestic or foreign; provided, however, that the records of the
Trustee shall at all times show that any such property held or registered
in the name of another is part of the Fund;
(ix) To employ legal counsel, brokers and other advisors, agents
or employees to perform services for the Fund or to advise it with respect
to its duties and obligations under this Trust Agreement and in connection
with the Trust, and to pay them reasonable compensation from the Fund,
to the extent not paid directly by the Company or its Affiliates; and
(x) To open and make use of banking accounts including checking accounts,
which accounts, if bearing a reasonable rate of interest or if checking
accounts, may be with the Trustee.
(g) In addition to, and not in limitation of, the powers vested and to be vested in it by law or enumerated in this Section 5, the Trustee shall have the power to take any action with respect to the Fund as is appropriate and helpful in carrying out the purposes of this Trust Agreement, subject to any directions of the Committee as provided herein.
(b) Within sixty (60) days after the close
of each Plan Year, the Trustee's removal or resignation as Trustee hereunder,
or the termination of the Plan or this Trust Agreement, the Trustee shall
file with the Committee an account setting forth all its transactions (including
all investments, receipts and disbursements) under this Trust Agreement
during such year, or during the period from the close of the last preceding
Plan Year to the effective date of its removal or resignation or the termination
of the Plan or this Trust Agreement, setting forth all investments, receipts,
disbursements and other transactions effected by it, including a description
of all securities and investments purchased and sold with the cost or net
proceeds of such purchases or sales (accrued interest paid or receivable
being shown separately), and showing all cash, securities and other property
held in the Trust at the end of such year or as of the date of such removal
or resignation, as the case may be; provided, however, that in the event
shares of Company Stock are then held in the Trust and final valuation,
if necessary, with respect to such Company Stock for any such accounting
period is not received by the Trustee within thirty (30) days of the date
the Trustee is required to render an accounting under the foregoing provision,
then the Trustee shall not be required to render such account until thirty
(30) days from the date such valuation report is received by the Trustee.
The Committee and the Trustee may agree in writing that similar accounts
will be prepared by the Trustee and filed with the Committee at more frequent
intervals. No person or persons (including, without limitation, the Company
and the Committee) shall be entitled to any further or different accounting
by the Trustee, except as may be required by law.
(c) Twenty-four (24) months after the filing
with the Committee of the annual accounts for the 1994 and 1995 fiscal
years of the Trust and twelve (12) months after the filing of any other
account with the Committee under subsection (b), the Trustee shall be forever
released and discharged from any liability or accountability to the Company
and the Committee with respect to the transactions shown or reflected on
the account, except with respect to any acts or transactions as to which
the Committee, within the applicable period, files written objections with
the Trustee. The written approval of the Committee of any account filed
by the Trustee, or the Committee's failure to file written objections within
the applicable period, shall be a settlement of such accounts as against
the Company and the Committee, and shall forever release and discharge
the Trustee from any liability or accountability to the Company and the
Committee with respect to the transaction shown or reflected on such account.
If a statement of objection is filed by the Committee and the Committee
is satisfied that its objections should be withdrawn or if the account
is adjusted to its satisfaction, the Committee shall indicate its approval
of the account in a written statement filed with the Trustee and the Trustee
shall be forever released and discharged from all liability and accountability
to the Company and the Committee in accordance with the immediately preceding
sentence. If an objection is not settled by the Committee and the Trustee,
the Trustee may commence a proceeding for a judicial settlement of the
account in any court of competent jurisdiction; the only parties that need
be joined in such a proceeding are the Trustee, the Committee, the Company
and such other parties whose participation is required by law.
(b) Subject to the provisions of Section 3(b),
the Trustee shall have no duty to make an independent investigation as
to the occurrence of any event giving rise to a distribution hereunder
or under the Plan, and shall be entitled to rely conclusively on the determinations
of the Company, the Board of Directors, the Company's Chief Executive Officer,
or the Committee, as the case may be, as to the occurrence of any such
event, which determinations shall be binding upon the Trustee, the Company
and the Trust Beneficiaries. To the extent permitted by applicable law,
the Trustee shall be indemnified by the Company against any and all liabilities,
settlements, judgments, losses, costs, and expenses (including reasonable
legal fees and expenses) of whatever kind and nature which may be imposed
on, incurred by or asserted against the Trustee by reason of the performance
or nonperformance of its trustee function under this Trust Agreement, except
to the extent such action or inaction constituted negligence, willful misconduct
or failure to act in good faith on the part of the Trustee.
(c) The Trustee may hire agents, accountants and
attorneys (including the Company's attorneys) to assist with its responsibilities
under this Trust Agreement subject to the consent of the Company.
(d) The Trustee shall have, without exclusion,
all powers conferred on trustees by applicable law unless expressly provided
otherwise herein.
(e) The Committee or the Company shall direct the
Trustee in administering the Trust, as provided in this Trust Agreement.
(f) Any corporation into which the Trustee (or
any other corporation acting as Trustee) shall be merged or with which
it shall be consolidated, or any corporation resulting from any merger,
reorganization or consolidation to which it shall be a party, or any corporation
to which all or substantially all of its trust business shall be transferred,
shall be the successor of the Trustee (or of any other corporation acting
as Trustee) as Trustee under this Trust Agreement, without the execution
or filing of any instrument or the performance of any further act or the
order or judgment of any court and with the same powers, authorities and
discretions.
(g) Section 6.9 of the Plan is hereby incorporated
by reference.
(h) The Company shall provide the Trustee with
such information and assistance as the Trustee may reasonably request in
connection with any communication or distributions to Trust Beneficiaries.
(b) The Trustee shall not be personally liable
for any real and personal property taxes, transfer taxes, any income taxes
(imposed on the Trust) and other similar taxes of any kind levied or assessed
under the existing or future laws against the Fund. Such taxes shall be
paid by the Company.
(b) In the event of the appointment of a successor
trustee, such successor trustee will succeed to all the right, title and
estate of, and will be, the Trustee; and the retiring trustee will deliver
the Trust to the successor trustee together with all such instruments of
transfer, conveyance, assignment and further assurance as the successor
trustee may reasonably require.
(b) The Plan may be amended from time to time by
the Company in accordance with its terms without the consent or concurrence
of the Trustee and the Company will provide the Trustee with such amendments
in a timely manner. The Company shall provide the Trustee with a copy of
any amendment, certified by the Company's Secretary, Assistant Secretary
or such person's designee, within 90 days after its adoption. In the event
of any conflict between the Plan and this Agreement concerning the Trustee's
responsibilities, this Trust Agreement shall govern.
(c) If Shares allocable to members of the IAM Employee
Group are contributed to the Trust, the parties agree to amend the Trust
Agreement to provide for the holding of such Shares, to provide for notice
to, consent and approval of the IAM with respect to such Shares consistent
with the provisions in this Trust Agreement requiring notice to, or the
consent or approval of, ALPA. The amendment in this Section 10(c) does
not require the approval of ALPA.
(b) Subject to the provisions of Section 3 and
Section 6.3 of the Plan (which is hereby incorporated by reference), benefits
under this Trust Agreement may not be anticipated, assigned (either at
law or in equity), alienated or subject to attachment, garnishment, levy,
execution or other legal or equitable process.
(b) Communications to the Trustee shall be addressed
to it at 225 Franklin Street, Boston, Massachusetts 02110, Attention: UAL
ESOP Administration; provided, however, that upon the Trustee's written
request, such communications shall be sent to such other address as the
Trustee may specify.
(c) Communications to the Committee shall be addressed
to the Committee at such address as the Committee may specify.
(d) Communications to ALPA shall be addressed to
UAL MEC/ALPA at 6400 Shafer Court, Suite 700, Rosemont, Illinois 60018;
provided, however, that upon ALPA's written request, such communications
shall be sent to such other address as ALPA may specify.
(e) No communication shall be binding on the addressee
thereof prior to receipt thereof.
"Fund" means the contributions of cash or property reasonably acceptable
to the Trustee, including, but not limited to, Company Stock deposited
with or purchased by the Trustee and held under this Trust by the Trustee,
any property into which the same or any part thereof may from time to time
be converted, and any appreciation therein or income thereon less any depreciation
therein, any losses thereon and any distributions or payments therefrom.
"Shares" shall mean Voting Shares and, to the extent applicable,
Convertible Shares and/or Common Stock, as the context requires.
IN WITNESS WHEREOF, the Company and the Trustee have executed this Trust
Agreement as of the date first above written.
By: /s/ J. R. O'Gorman
Title: Executive Vice President
STATE STREET BANK AND TRUST
COMPANY
By:
By:
Title:
STATE STREET BANK AND TRUST
COMPANY
By: /s/ Kelly Q. Driscoll
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE> EX-10.29
<TEXT>
<HTML>
Exhibit 10.29
CLASS I JUNIOR PREFERRED STOCK SUBSCRIPTION AGREEMENT
This Agreement (the "Agreement")
has been made and entered into as of this 12th day of July, 1994, by and
among UAL Corporation, a Delaware corporation (the "Company"), the Air
Line Pilots Association, International ("ALPA"), pursuant to its authority
as the collective bargaining representative for the crafts or class of
pilots employed by United Airlines, Inc. ("United"), the International
Association of Machinists and Aerospace Workers ("IAM"), pursuant to its
authority as the collective bargaining representative for the crafts or
classes of mechanics and related employees, ramp and stores employees,
food service employees, dispatchers, and security officers employed by
United, and Duane D. Fitzgerald (the "Proposed Class I Preferred Stockholder").
WHEREAS, pursuant to the terms of
and schedules to
the Agreement and Plan of Recapitalization,
dated as of
March 25, 1994, by and among the
Company, ALPA and the IAM
(as amended, the "Recapitalization
Agreement"), including
the terms of the restated certificate
of incorporation of
the company to be effective as of
the Effective Time (as
defined in the Recapitalization
Agreement) (the "Restated
Certificate") and the restated By-Laws
of the Company to be
effective as of the Effective Time
(the "Restated By-Laws")
(the Recapitalization Agreement,
the Restated Certificate
and the Restated By-Laws, collectively,
the "Governance
Documents"), the board of directors
of the Company (the
"Board") will, until the Termination
Date (as defined in the
Restated Certificate) consist of
twelve (12) directors
(subject to adjustment in certain
circumstances), four (4)
of whom are to be independent directors
(the "Independent
Directors") nominated and elected
and/or appointed as
provided in the Governance Documents
and in the Class I
Preferred Stockholders' Agreement
made and entered into as
of July 12, 1994 by and among the
Company, ALPA, the IAM and
the Individual Parties (as defined
therein) (the "Class I
Preferred Stockholders' Agreement");
WHEREAS, the ALPA and the IAM have
entered into the Recapitalization Agreement based in part on the composition
and operation of the Board as provided in the Governance Documents and
each has a substantial interest in assuring that the terms thereof and
of this Agreement are carried out;
WHEREAS, the Governance Documents contemplate that at the Effective Time, the Company shall issue to each Independent Director, and each Independent Director shall be the registered holder of, one share of the Class I Junior Preferred Stock of the Company (the "Class I Preferred Stock"), each such share of Class I Preferred Stock having the relative rights, privileges and powers as set forth in the Restated Certificate (the holders of the Class I Preferred Stock from time to time are referred to individually herein as a "Class I Preferred Stockholder" and are collectively referred to herein as the "Class I Preferred Stockholders");
WHEREAS, the Governance Documents
contemplate that Class I Preferred Stock may be held only by Independent
Directors and that each Independent Director shall be a Class I Preferred
Stockholder during such time as such person serves as an Independent Director;
and
WHEREAS, the parties hereto have
entered into this Agreement in order to effectuate the terms and intent
of the Governance Documents regarding the Independent Directors and the
issuance of the Class I Preferred Stock;
NOW, THEREFORE, in consideration
of the foregoing premises, the mutual covenants herein contained and other
good and valuable consideration the receipt of which is hereby acknowledged,
the parties hereto hereby agree as
follows:
1. Issuance
of the Class I Preferred Stock Consideration. The Proposed Class I
Preferred Stockholder hereby agrees to purchase from the Company and the
Company hereby agrees to sell to the Proposed Class I Preferred Stockholder
one share of Class I Preferred Stock. The consideration to be paid for
such one share of Class I Preferred Stock shall be the par value thereof
as set forth in the Restated Certificate.
2. Conditions
to Issuance of the Class I Preferred Stock. Notwithstanding anything
in this Agreement to the contrary, no shares of Class I Preferred Stock
shall be issued to the Proposed Class I Preferred Stockholder (i) unless
such individual simultaneously therewith executes and delivers to each
of the other parties thereto the Class I Preferred Stockholders' Agreement
in the form of Exhibit A annexed hereto or an agreement pursuant to which
such individual shall agree to be bound by the terms of the Class I Preferred
Stockholders' Agreement or (ii) if such issuance otherwise would be in
contravention of the terms and conditions set forth in any of the Governance
Documents, the Class I Preferred Stockholders' Agreement or this Agreement,
including but not limited to the terms and conditions regarding the qualifications
for Independent Directors set forth in Article FIFTH, Section 2.4 of the
Restated Certificate.
3. Representations
of the Proposed Class I Preferred Stockholder. The Proposed Class I
Preferred Stockholder hereby represents and warrants to the Company, the
ALPA and the IAM that he or she has reviewed, understands and acknowledges
(i) the relative rights, privileges and powers of the Class I Preferred
Stock set forth in the Governance Documents, including Article FOURTH,
Part X of the Restated Certificate, and (ii) the limitations, including
but not limited to the limitations with respect to the transfer of the
Class I Preferred Stock, including the automatic redemption thereof, and
the limitations with respect to the voting of the Class I Preferred Stock,
which are imposed on each Class I Preferred Stockholder pursuant
to the terms of the Governance Documents and the Class I Preferred
Stockholders' Agreement.
4. Representations
of the Company. The Company hereby represents and warrants to the Proposed
Class I Preferred Stockholder that the share of Class I Preferred Stock
being issued hereunder shall be duly authorized and, upon the payment of
the consideration therefor to the Company, validly issued, fully paid and
non-assessable.
5. Legends on
Certificates. All certificates representing shares of Class I Preferred
Stock shall contain one or more restrictive legends setting forth the restrictions
imposed on the Class I Preferred Stock, including the restrictions with
respect to transfer, including the automatic redemption thereof, and the
restriction with respect to voting, pursuant to the Governance Documents
and the Class I Preferred Stockholders' Agreement.
6. Binding Effect.
The provisions of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns,
provided that no party may assign, delegate or otherwise transfer any of
its rights or obligations under this Agreement without the written consent
of the other parties hereto.
7. Governing
Law. This Agreement shall be construed in accordance with and governed
by the laws of the State of Delaware, without regard to the conflicts of
laws principles thereof.
8. Counterparts.
This Agreement may be signed in any number of counterparts, each of which
shall be an original, with the same effect as if the signature thereto
and hereto were upon the same instrument.
9. Specific
Performance. The parties hereto agree that if any of the provisions
of this Agreement were not performed in accordance with their specific
terms or were otherwise breached, irreparable damage would occur, no adequate
remedy of law would exist and damages would be difficult to determine,
and that the parties shall be entitled to specific performance of the terms
hereof, in addition to any other remedy at law or equity.
10. Amendments.
This Agreement may not be amended or modified unless such amendment or
modification is approved in writing by each of the parties hereto.
11. Entire Agreement.
This Agreement constitutes the entire agreement between the parties hereto
with respect to the subject matter hereof and, except as otherwise contemplated
hereby, supersedes all other prior agreements and understandings, both
written and oral, between the parties hereto with respect to the subject
matter hereof.
IN WITNESS WHEREOF, the parties hereto
have executed this Agreement as of the date first above written.
Name: James M. Guyette
Title: Executive Vice
President
INTERNATIONAL
Name:
Title:
MACHINISTS AND AEROSPACE WORKERS
By:______________________
Title:
Duane D. Fitzgerald
adequate remedy of law would exist
and damages would be difficult to determine, and that the parties shall
be entitled to specific performance of the terms hereof, in addition to
any other remedy at law or equity.
10. Amendments. This
Agreement may not be amended or modified unless such amendment or modification
is approved in writing by each of the parties hereto.
11. Entire Agreement.
This Agreement constitutes the entire agreement between the parties hereto
with respect to the subject matter hereof and, except as otherwise contemplated
hereby, supersedes all other prior agreements and understandings, both
written and oral, between the parties hereto with respect to the subject
matter hereof.
IN WITNESS WHEREOF, the parties hereto
have executed this Agreement as of the date first above written.
By:__________________
Title:
INTERNATIONAL
By: /s/ Roger D. Hall
Title:Chairman, UAL-MEC
MACHINISTS AND AEROSPACE WORKERS
By:___________________
____________________
Duane D. Fitzgerald
10. Amendments. This
Agreement may not be amended or modified unless such amendment or modification
is approved in writing by each of the parties hereto.
11. Entire Agreement.
This Agreement constitutes the entire agreement between the parties hereto
with respect to the subject matter hereof and, except as otherwise contemplated
hereby, supersedes all other prior agreements and understandings, both
written and oral, between the parties hereto with respect to the subject
matter hereof.
IN WITNESS WHEREOF, the parties hereto
have executed this Agreement as of the date first above written.
By:_____________________
Title:
INTERNATIONAL
By:______________________
Title:
MACHINISTS AND AEROSPACE WORKERS
By: /s/ Ken Thiede_______
Title: President & General Chairman
Duane D. Fitzgerald
were otherwise breached, irreparable
damage would occur, no adequate remedy of law would exist and damages would
be difficult to determine, and that the parties shall be entitled to specific
performance of the terms hereof, in addition to any other remedy at law
or equity.
10. Amendments. This
Agreement may not be amended or modified unless such amendment or modification
is approved in writing by each of the parties hereto.
11. Entire Agreement.
This Agreement constitutes the entire agreement between the parties hereto
with respect to the subject matter hereof and, except as otherwise contemplated
hereby, supersedes all other prior agreements and understandings, both
written and oral, between the parties hereto with respect to the subject
matter hereof.
IN WITNESS WHEREOF, the parties hereto
have executed this Agreement as of the date first above written.
UAL CORPORATION
By:________________________
Name:
Title:
AIR LINE PILOTS ASSOCIATION,
INTERNATIONAL
By:________________________
Name:
Title:
INTERNATIONAL ASSOCIATION OF
MACHINISTS AND AEROSPACE WORKERS
By:________________________
Name:
Title:
/s/ Duane D. Fitzgerald
Duane D. Fitzgerald
10. Amendments. This
Agreement may not be amended or modified unless such amendment or modification
is approved in writing by each of the parties hereto.
11. Entire Agreement.
This Agreement constitutes the entire agreement between the parties hereto
with respect to the subject matter hereof and, except as otherwise contemplated
hereby, supersedes all other prior agreements and understandings, both
written and oral, between the parties hereto with respect to the subject
matter hereof.
IN WITNESS WHEREOF, the parties hereto
have executed this Agreement as of the date first above written.
By:_______________________
Title:
INTERNATIONAL
By:_______________________
Title:
MACHINISTS AND AEROSPACE WORKERS
By:_______________________
Title:
Richard D. McCormick
10. Amendments. This
Agreement may not be amended or modified unless such amendment or modification
is approved in writing by each of the parties hereto.
11. Entire Agreement.
This Agreement constitutes the entire agreement between the parties hereto
with respect to the subject matter hereof and, except as otherwise contemplated
hereby, supersedes all other prior agreements and understandings, both
written and oral, between the parties hereto with respect to the subject
matter hereof.
IN WITNESS WHEREOF, the parties hereto
have executed this Agreement as of the date first above written.
By:_____________________
Title:
INTERNATIONAL
By:_____________________
Title:
MACHINISTS AND AEROSPACE WORKERS
By:_____________________
Title:
10. Amendments. This
Agreement may not be amended or modified unless such amendment or modification
is approved in writing by each of the parties hereto.
11. Entire Agreement.
This Agreement constitutes the entire agreement between the parties hereto
with respect to the subject matter hereof and, except as otherwise contemplated
hereby, supersedes all other prior agreements and understandings, both
written and oral, between the parties hereto with respect to the subject
matter hereof.
IN WITNESS WHEREOF, the parties hereto
have executed this Agreement as of the date first above written.
By:_____________________
Title:
INTERNATIONAL
By:_____________________
Title:
MACHINISTS AND AEROSPACE WORKERS
By:_____________________
Title:
/s/Paul A. Volcker
CLASS I PREFERRED
STOCKHOLDERS' AGREEMENT
In consideration of the receipt of
the one share of Class I Preferred Stock of the Company and other good
and valuable consideration the receipt of which is hereby acknowledged,
the undersigned hereby agrees to be bound by and perform each of the terms
of the Class I Preferred Stockholders' Agreement, made as of the
day of July, 1994, by and among the Company, ALPA, the IAM and certain
individuals who currently serve or heretofore have served as Independent
Directors of the Company (the "Agreement"), as if the undersigned were
an original Individual Party to the Agreement. Capitalized terms not defined
herein shall have the meanings ascribed to them in the Agreement and Plan
of Recapitalization, dated as of March 25, 1994, as amended from time to
time, by and among the Company, ALPA and the IAM.
IN WITNESS WHEREOF,
the
undersigned has executed this Agreement to be bound by the Class I Preferred
Stockholders' Agreement as of the date set forth below.
Dated: May 7, 1998
EXHIBIT A TO THE
CLASS I PREFERRED
STOCKHOLDERS' AGREEMENT
In consideration of the receipt of
the one share of Class I Preferred Stock of the Company and other good
and valuable consideration the receipt of which is hereby acknowledged,
the undersigned hereby agrees to be bound by and perform each of the terms
of the Class I Preferred Stockholders' Agreement, made as of the
day of July, 1994, by and among the Company, ALFA, the IAM and certain
individuals who currently serve or heretofore have served as Independent
Directors of the Company (the "Agreement"), as if the undersigned were
an original Individual Party to the Agreement. Capitalized terms not defined
herein shall have the meanings ascribed to them in the Agreement and Plan
of Recapitalization, dated as of March 25, 1994, as amended from time to
time, by and among the Company, ALPA and the IAM.
IN WITNESS WHEREOF, the undersigned
has executed this Agreement to be bound by the Class I Preferred Stockholders'
Agreement as of the date set forth below.
Dated: May 18, 1999
/s/ Hazel O'Leary
Hazel O'Leary
</HTML>
</TEXT>
</DOCUMENT>
<TYPE> EX-10.30
<TEXT>
<HTML>
Exhibit 10.30
Preferred Stock StockholdersAgreement
CLASS SAM PREFERRED STOCKHOLDERS' AGREEMENT
This Agreement (the
"Agreement") has been made and entered into as of this 12th day of July,
1994, by and among UAL Corporation, a Delaware corporation (the "Company"),
Joseph V. Vittoria (the "Designated Nominee") and Paul G. George (the "Designated
Stockholder").
WHEREAS, pursuant to
the terms of and schedules to the Agreement and Plan of Recapitalization,
dated as of March 25, 1994, by and among the Company, the Air Line Pilots
Association, International ("ALPA") and the International Association of
Machinists and Aerospace Workers ("IAM") (as amended, the "Recapitalization
Agreement"), including the terms of the restated certificate of incorporation
of the Company to be effective as of the Effective Time (as defined in
the Recapitalization Agreement) (the "Restated Certificate") and the restated
By-Laws of the Company to be effective as of the Effective Time (the "Restated
By-Laws") (the Recapitalization Agreement, the Restated Certificate
and the Restated By-Laws, collectively, the "Governance Documents"), the
board of directors of the Company (the "Board") shall, until the Termination
Date (as defined in the Restated Certificate), consist of twelve (12) directors
(subject to adjustment in certain circumstances), one (1) of whom shall
be the designated representative (the "Salaried/Management Director") of
the salaried and management employees of United Airlines, Inc. ("United"),
nominated and elected and/or appointed as provided in the Governance Documents
and in this Agreement;
WHEREAS, the Governance
Documents contemplate that at the Effective Time, the Company shall issue
to the Designated Nominee and the Designated Stockholder, and each of them
shall be the registered holder of, two shares and one share, respectively,
of the Class SAM Junior Preferred Stock, par value $.O1 per share, of the
Company (the "Class SAM Preferred Stock"), each such share of Class SAM
Preferred Stock having the relative rights, privileges and powers as set
forth in the Restated Certificate (the holders of the Class SAM Preferred
Stock from time to time are referred to individually herein as a "Class
SAM Preferred Stockholder" and are collectively referred to herein as the
"Class SAM Preferred Stockholders");
WHEREAS, the Governance
Documents contemplate that Class SAM Preferred Stock may be held only by
the Salaried/Management Employee Director and by a designated additional
shareholder, each of whom shall be a Class SAM Preferred Stockholder;
WHEREAS, pursuant to
the Class SAM Preferred Stock Subscription Agreement dated July 12, 1994,
by and among the Company, the Designated Nominee and the Designated Stockholder,
the Company is selling to the Designated Nominee and the Designated Stockholder,
and the Designated Nominee and the Designated Stockholder are each purchasing
from the Company, two shares and one share, respectively, of Class SAM
Preferred Stock; and
WHEREAS, the parties
hereto have entered into this Agreement in order to effectuate the terms
and intent of the Governance Documents regarding the issuance of the Class
SAM Preferred Stock.
NOW, THEREFORE, in
consideration of the foregoing premises, the mutual covenants herein contained
and other good and valuable consideration the receipt of which is hereby
acknowledged, the parties hereto hereby agree as follows:
1. Effective
Date; Term. This Agreement shall become effective simultaneous with
the Effective Time and shall remain in effect in accordance with the terms
hereof until the earlier of (i) the tenth anniversary of the Effective
Time or such later date to which the duration of this Agreement shall be
permitted under the General Corporation Law of the State of Delaware (the
"GCL"), as the same may hereafter from time to time be amended, it being
the express intention of the parties hereto that this Agreement shall remain
in effect (subject to clause (ii) of this Section 1) for more than ten
(10) years if permitted under, and for as long as permitted under, the
GCL, as amended from time to time, and (ii) the first to occur of the ALPA
Termination Date and the IAM Termination Date (each as defined in Article
FIFTH of the Restated Certificate).
2. Voting
for Election of the Salaried,/Management Employee Director; Filling of
Vacancies. At all elections for the Salaried/Management Employee Director,
whether at a meeting of shareholders or pursuant to action by written consent
without a meeting, each Class SAM Preferred Stockholder shall vote, or
act by written consent with respect to, each share of Class SAM Preferred
Stock held by such Class SAM Preferred Stockholder in favor of the candidate
for Salaried/Management Employee Director nominated pursuant to Section
8 of this Agreement. In the event of a vacancy of the seat of the Salaried/Management
Employee Director, other than upon the scheduled expiration of the term
on the Hoard of the Salaried/Management Employee Director, it is agreed
that such vacancy shall be filled with a candidate nominated pursuant to
Section 8 of this Agreement.
3. Grant of
Proxy. Each Class SAM Preferred Stockholder does hereby constitute
and appoint each of the other parties hereto (including the other class
SAM Preferred Stockholder), other than the Company, as his or her proxy
to vote and/or to act by written consent with respect to all of the shares
of Class SAM Preferred Stock owned by such Class SAM Preferred Stockholder
in accordance with the provisions of this Agreement in the event that
such Class SAM Preferred Stockholder shall fail to do so, to the same extent
and with the same effect as such Class SAM Preferred Stockholder could
do so. The proxy hereby granted by each Class SAM Preferred Stockholder
is given in consideration of the proxy hereby granted by each other Class
SAM Preferred Stockholder and in consideration of the other mutual covenants
herein contained, and as such the proxy granted hereby by each Class SAM
Preferred Stockholder is coupled with an interest and shall be irrevocable
for so long as such Class SAM Preferred Stockholder remains a holder of
Class SAM Preferred Stock.
4. Restrictions
on Transfer of the Class SAM Preferred Stock. Except as provided in
Sections 5 and 8(c) hereof, a Class SAM Preferred Stockholder may not sell,
transfer, pledge, assign, hypothecate or otherwise dispose of any interest
in (each, a "Disposition") any share of Class SAM Preferred Stock, including,
without limitation, by operation of law or otherwise. Any purported Disposition
of any share of Class SAM Preferred Stock in violation of this Section
4 shall be null and void and of no force and effect as to the proposed
transferee and, upon any such purported Disposition, such share of Class
SAM Preferred Stock shall be automatically redeemed by the Company as provided
in, and subject to, Article FOURTH, Part IX, Sections 1.2 and 9 of the
Restated Certificate (the "Automatic Redemption"). The certificates evidencing
the shares of Class SAM Preferred Stock shall bear a legend describing
the transfer and voting restrictions and Automatic Redemption set forth
in this Agreement, as well as any other restrictions imposed by the Restated
Certificate of the Restated By-Laws.
5. Return of the
Shares of Class SAM Preferred Stock; Resignation of any Non-Nominated Director.
Notwithstanding anything contained in Section 4 of this Agreement to the
contrary, the Designated Nominee, immediately upon (i) the expiration of
his or her term of office as the Salaried/Management Employee Director
(unless concurrently therewith such individual is reelected for an additional
term as the Salaried/Management Employee Director), (ii) his or her removal
as the Salaried/Management Employee Director pursuant to Article FIFTH,
Section 2.8 of the Restated Certificate or pursuant to the penultimate
sentence of this section 5, (iii) his or her resignation as the
Salaried/Management Employee Director, (iv) his or her ceasing to serve
as the Salaried/Management Employee Director for any reason whatsoever,
(v) his or her disqualification pursuant to Section 8(d) of this Agreement,
or (vi) his or her failure to be re-nominated to continue to serve as the
Salaried/Management Employee Director pursuant to Section 8 of this Agreement
(in any such case, the "Terminated Director"), shall deliver or cause to
be delivered, in exchange for the payment of the par value of each share
so delivered, the stock certificate representing such Class SAM Preferred
Stockholder's shares of Class SAM Preferred Stock, duly endorsed for transfer,
to (a) such individual's elected or appointed successor as the Salaried/Management
Employee Director, upon such successor executing and delivering an agreement
in the form of Exhibit B hereto, or (b) in the case where no such successor
Salaried/Management Employee Director has been elected or appointed concurrently
with such individual's removal, resignation, disqualification pursuant
to Section 8(d) of this Agreement or failure to be re-nominated or otherwise
ceasing to serve as the Salaried/Management Employee Director, to the Company,
to be held in escrow to be delivered to the successor of such Terminated
Director when such successor (x) is duly elected or appointed, as the case
may be, and (y) executes and delivers an agreement in the form of Exhibit
B hereto.
The Company shall
immediately effect an Automatic Redemption with respect to, or if such
Automatic Redemption is not applicable, the Terminated Director shall sell
and the Company, subject to legally available funds therefor, shall purchase,
all shares of Class SAM Preferred Stock of any Terminated Director who
fails to comply with the transfer requirements of this Section 5 and shall
(subject to the following sentence) transfer or re-issue such redeemed
or purchased shares to such Terminated Director's successor upon such successor
executing and delivering an agreement in the form of Exhibit B annexed
hereto. If such Terminated Director's successor is elected or appointed
and executes and delivers an agreement in the form of Exhibit B annexed
hereto prior to such Automatic Redemption or purchase by the Company, the
Company shall issue to such successor two shares of Class SAM Preferred
Stock upon the payment of the par value thereof. In addition, if the Designated
Nominee fails to be re-nominated as the salaried/Management Employee Director
pursuant to section 8 of this Agreement, such individual shall immediately
resign from the Board and if such individual fails to so immediately resign
from the Board, each of the Class SAM Preferred Stockholders (including
the Class SAM Preferred Stockholder who has failed to so immediately resign
from the Board) shall promptly vote (or act by written consent with respect
to) their shares of Class SAM Preferred Stock to immediately remove such
individual from the Board, without cause. A Terminated Director who resigns
from, is removed from or otherwise ceases to be a member of the Board and
otherwise complies with the provisions of this Section 5 shall no longer
be deemed to be a party to this Agreement.
6. Replacement
Salaried/Management Employee Director. Immediately upon the election
or appointment (as the case may be) of an individual to replace or succeed
any Terminated Director, such individual shall execute and deliver to the
Company and the remaining parties hereto an agreement (in the form of Exhibit
B annexed hereto) agreeing to be bound by each of the terms of this Agreement,
and from and after the execution and delivery of such agreement, such individual
shall be deemed to be a party to this Agreement. Should any individual
who has been elected or appointed, as the case may be, as the Salaried/Management
Employee Director fail either (i) to become a Class SAM Preferred Stockholder
or (ii) to execute and deliver an agreement in the form of Exhibit B annexed
hereto, each of the Class SAM Preferred
Stockholders shall
vote (or act by written consent with respect to) their shares of Class
SAM Preferred Stock to remove such person as the Salaried/Management Employee
Director, without cause.
7. Mandatory
Extensions. Not later than two years prior to the date, if any, on
which this Agreement would otherwise expire pursuant to clause (i) of Section
1 of this Agreement, the Company and the Class SAM Preferred Stockholders
shall execute and deliver to each other an extension of this Agreement
for a period of time equal to the longest period then permitted by law,
but in no event beyond the first to occur of the ALPA Termination Date
and the IAM Termination Date. Should any Class SAM Preferred Stockholder
fail to execute and deliver the extension of this Agreement required by
this Section 7 (a "Non-Extending Stockholder"), each Class SAM Preferred
Stockholder, including each Non-Extending Stockholder, shall vote (or act
by written consent with respect to) their shares of Class SAM Preferred
Stock to remove such Non-Extending Stockholder from the Board, without
cause, if such Non-Extending Stockholder is the Salaried/Management Employee
Director.
8. Nomination
and Election of the Salaried/Management Employee Director. (a)
The Designated Nominee named herein shall be the initial Designated Nominee
hereunder, and the Designated Stockholder named herein shall be the initial
Designated Stockholder hereunder, each of whom shall serve in such capacity
until a replacement is named pursuant to this Section 8.
(b) The Designated
Nominee shall be the initial candidate for election as the Salaried/Management
Employee Director and shall serve in such capacity until another candidate
is elected or appointed to be the replacement Designated Nominee (the "Replacement
Designated Nominee") in accordance with the procedures identified in Exhibit
A hereto. Upon such election or appointment, the Designated Nominee shall
transfer the share of Class SAM Preferred Stock held by him or her to the
Replacement Designated Nominee for a purchase price equal to the par value
thereof, and the Replacement Designated Nominee shall purchase such share
and shall execute and deliver a copy of an agreement in the form of Exhibit
B hereto, as provided elsewhere herein. Thereupon, the Replacement Designated
Nominee shall become the "Designated Nominee" hereunder for all purposes,
and the Designated Nominee
and the Designated
Stockholder, as Class SAM Preferred Stockholders, shall vote to elect such
Designated Nominee as the Salaried/Management Employee Director, as provided
elsewhere herein. In the case of a vacancy of the Board seat for the Salaried/Management
Employee Director, a candidate for election shall be identified in accordance
with the procedures in Exhibit A as the Salaried/ Management Employee Director,
and such person shall become the Replacement Designated Nominee hereunder.
(c)
The Designated Stockholder shall serve in such capacity until another candidate
is nominated to be the replacement Designated Stockholder (the "Replacement
Designated Stockholder") in accordance with the procedure identified
in Exhibit A hereto. Upon such nomination, the Designated Stockholder shall
transfer the share of Class SAM Preferred Stock held by him or her to the
Replacement Designated Stockholder for a purchase price equal to the par
value thereof, and the Replacement Designated Stockholder shall purchase
such share and shall execute and deliver a copy of an agreement in the
form of Exhibit B hereto, as provided elsewhere herein. Thereupon,
the Replacement Designated Stockholder shall become the "Designated Stockholder"
hereunder for all purposes. The Designated Stockholder agrees to sell and
the Company agrees to purchase (which may be by redemption) all shares
of Class SAM Preferred Stock of any Designated Stockholder who fails to
comply with the transfer requirements of this Section 8(c) by paying the
par value of each share being purchased to such Designated Stockholder
and shall (subject to the following sentence) transfer or re-issue such
purchased shares to the Replacement Designated Stockholder upon such Replacement
Designated Stockholder executing and delivering an agreement in the form
of Exhibit B annexed hereto. If such Replacement Designated Stockholder
executes and delivers an agreement in the form of Exhibit B annexed hereto
prior to such purchase by the Company, the Company shall issue to such
successor one share of Class SAM Preferred Stock upon the payment of the
par value thereof.
(d) Any person
who is otherwise not disqualified pursuant to the terms of this Agreement
shall be qualified to become the Designated Nominee or the Designated Stockholder
hereunder. Notwithstanding anything in the foregoing portion of this paragraph
(d) to the contrary, any person who, as a Class SAM Preferred Stockholder,
has failed to vote the share or shares of Class
SAM Preferred Stock
for the candidate for election as the Salaried/Management Employee Director
nominated by the System Roundtable shall be disqualified hereunder from
serving as either a Designated Nominee or a Designated Stockholder thereafter
unless such disqualification is thereafter lifted by the System Roundtable.
(e) The System
Roundtable shall communicate its actions by written notice (or communicated
orally and confirmed in writing), given in person, sent by facsimile transmission
or other electronic medium or sent by overnight express service to the
addresses that the parties hereto shall provide in writing to the System
Roundtable from time to time.
(f) The System
Roundtable is the intended third-party beneficiary of this Agreement, and
the parties hereto agree for the benefit of the System Roundtable, however
constituted, that they shall perform their respective agreements hereunder.
The System Roundtable and the members thereof shall not be liable to any
person on account of any action it or they may take pursuant to the terms
of this Agreement.
9. Waiver
of Claims. Except as provided in Section 13, each Class SAM Preferred
Stockholder hereby waives any and all claims, whether for damages or otherwise,
which such individual may otherwise have against any person or entity in
connection with such person or entity performing the terms of, or otherwise
acting in accordance with, this Agreement.
10. Binding
Effect. The provisions of this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors
and assigns (and, in the case of a deceased Class SAM Preferred Stockholder,
such individual's estate and heirs), provided that no party may assign,
delegate or otherwise transfer any of its rights or obligations under this
Agreement except as provided herein.
11. Governing
Law.This
Agreement shall be construed in accordance with and governed by the laws
of the State of Delaware, without regard to the conflicts of laws principles
thereof.
12. Counterparts.
This Agreement may be signed in any number of counterparts, each of which
shall be an original, with the same effect as if the signature thereto
and hereto were upon the same instrument.
13. Specific
Performance. The parties hereto agree that if any of the provisions
of this Agreement were not performed in accordance with their specific
terms or were otherwise breached, irreparable damage would occur, no adequate
remedy of law would exist and damages would be difficult to determine,
and that the parties shall be entitled to specific performance of the terms
hereof, in addition to any other remedy at law or equity.
14. Amendments.
This Agreement may not be amended or modified unless such amendment or
modification (i) is approved in writing by the Company and each then existing
Class SAM Preferred Stockholder and (ii) is consented to by the Independent
Directors and the Outside Public Directors (each as defined in the Restated
Certificate).
15. Entire
Agreement. This Agreement, together with the Class SAM Preferred Stock
Subscription Agreement, constitutes the entire agreement between
the parties hereto with respect to the subject matter hereof and, except
as otherwise contemplated hereby, supersedes all other prior agreements
and understandings, both written and oral, between the parties hereto with
respect to the subject matter hereof.
IN WITNESS WHEREOF,
the parties hereto have executed this Agreement as of the date first above
written.
By: /s/ Joseph R.O'Gorman
Title: Executive Vice President
Designated Nominee
Paul G. George
Designated Stockholder
By:
Name:
Title:
Joseph V. Vittoria
Designate Nominee
Paul G. George
Designated Stockholder
UAL CORPORATION
By:
Name:
Title:
Joseph V. Vittoria
Designated Nominee
/s/ Paul G. George
Paul G. George
Designated Stockholder
EXHIBIT A TO THE
CLASS SAM PREFERRED
STOCKHOLDERS' AGREEMENT
SALARIED/MANAGEMENT
EMPLOYEES
DIRECTOR AND DESIGNATED
STOCKHOLDER
SELECTION PROCESS
The Salaried/Management
EmployeesDirector shall be nominated by the System Roundtable.
The Designated Stockholder
shall be the senior executive of United who has primary responsibility
for human resources (the "Executive") unless and until the Company has
purchased (which may be by redemption) all shares of Class SAM Preferred
stock of any Designated Stockholder in accordance the fourth sentence of
Section 8(c) of the Agreement. In the event of such purchase, the Replacement
Designated Stockholder shall be as identified by the System Roundtable
until such Executive is no longer the senior executive of United who has
primary responsibility for human resources.
The System Roundtable
shall establish a committee (the "Selection committee") of four employees
to select the nominee for Salaried/Management Employees Director and the
Replacement Designated Stockholder in accordance with the immediately preceding
paragraph, which selection must be approved by a majority of the System
Roundtable.
The Selection Committee
or the System Roundtable may engage executive search firms and other consultants
to assist in the selection of a nominee and may consult with legal counsel
and the Company's management in making the selections.
EXHIBIT B TO THE
CLASS SAM PREFERRED
STOCKHOLDERS' AGREEMENT
In consideration of
the receipt of the [one/two] share[s] of Class SAM Preferred Stock of the
Company and other good and valuable consideration the receipt of which
is hereby acknowledged, the undersigned hereby agrees to be bound by and
perform each of the terms of the Class SAM Preferred Stockholders' Agreement,
made as of the 12th day of July, 1994, by and among UAL Corporation
and certain individualswho were named to serve as the initial Designated
Nominee and the initial Designated Stockholder (the "Agreement"), as if
the undersigned were the original [Designated Stockholder/ Designated Nominee]
under the Agreement. Capitalized terms not defined herein shall have the
meanings ascribed to them in the Agreement and Plan of Recapitalization,
dated as of March 25, 1994, as amended from time to time, by and among
the Company, the ALPA and the IAM.
IN WITNESS WHEREOF,
the undersigned has executed this Agreement to be bound by the Class SAM
Preferred Stockholders' Agreement as of the date set forth below.
Dated:
EXHIBIT B TO THE
CLASS SAM PREFERRED
STOCKHOLDERS' AGREEMENT
In consideration of
the receipt of the [one) shares[s] of Class SAM Preferred Stock of the
Company and other good and valuable consideration the receipt of which
is hereby acknowledged, the undersigned hereby agrees to be bound by and
perform each of the terms of the Class SAM Preferred Stockholders' Agreement,
made as of the 12th day of July, 1994, by and among UAL Corporation and
certain individuals who were named to serve as the initial Designated Nominee
and the initial Designated Stockholder (the "Agreement"), as if the undersigned
were the original (Designated Stockholder] under the Agreement. Capitalized
terms not defined herein shall have the meanings ascribed to them in the
Agreement and Plan of Recapitalization, dated as of March 25, 1994, as
amended from time to time, by and among the Company, the ALFA and the IAM.
1N WITNESS WHEREOF,
the undersigned has executed this Agreement to be bound by the Class SAM
Prefered Stockholders' Agreement as of the date set forth below.
Dated: 3/4/97
/s/ William P. Hobgood
EXHIBIT B TO THE
CLASS SAM PREFERRED
STOCKHOLDERS' AGREEMENT
In consideration of the receipt of the [one] share(s] of Class SAM Preferred Stock of the Company and other good and valuable consideration the receipt of which is hereby acknowledged, the undersigned hereby agrees to be bound by and perform each of the terms of the Class SAM Preferred Stockholders' Agreement, made as of the 12th day of July, 1994, by and among UAL Corporation and certain individuals who were named to serve as the initial Designated Nominee and the initial Designated Stockholder (the "Agreement"), as if the undersigned were the original (Designated Stockholder) under the Agreement. Capitalized
terms not defined herein
shall have the meanings ascribed to them in the Agreement and Plan of Recapitalization,
dated as of March 25, 1994, as amended from time to time, by and among
the Company, the ALPA and the IAM.
IN WITNESS WHEREOF,
the undersigned has executed this Agreement to be bound by the Class SAM
Preferred Stockholders' Agreement as of the date set forth below.
Dated: 1/2/97
/s/ John Edwardson
</HTML>
</TEXT>
</DOCUMENT>
2000 Agreement
between
UNITED AIR LINES, INC.
and
THE AIR LINE PILOTS
in the service of
UNITED AIR LINES, INC.
represented by
THE AIR LINE PILOTS ASSOCIATION,
INTERNATIONAL
2000 Agreement
between
UNITED AIR LINES, INC.
and
THE AIR LINE PILOTS
in the service of
UNITED AIR LINES, INC.
represented by
THE AIR LINE PILOTS ASSOCIATION,
INTERNATIONAL
PREAMBLE
The pilots of United Airlines, as represented by the Air Line Pilots Association,
International and the Management of United Airlines share a mutual interest that
our Company continue to be the world's premier air carrier. To this end, the
United Pilots and Management recognize their joint role in promoting safety in
flight operations, providing a superior product to our customers, promoting career
security, creating growth in United's flight operations, and maintaining
industry-leading levels of pilot compensation, benefits and working conditions.
The United Pilots and Management, both as owners of the Company and as
participants in a traditional employee/management relationship, seek to build and
maintain open communications and mutual professional respect.
In support of this objective, United and the Association enter into this Industry
Leading Contract 2000.
THIS AGREEMENT is made and entered into in accordance with the provisions
of the Railway Labor Act, as amended, by and between UNITED AIRLINES,
INC., (hereinafter referred to as the "Company") and the AIRLINE PILOTS in the
service of UNITED AIRLINES, INC., as represented by the AIRLINE PILOTS
ASSOCIATION, INTERNATIONAL (hereinafter referred to as the "Association").
WITNESSETH:
It is hereby mutually agreed:
TABLE OF CONTENTS
SECTION PAGE
1 Recognition, Scope and Career Security 1
2 Definitions 31
3 Compensation 37
4 Expenses, Lodging and Transportation 57
5 Hours of Service 65
6 Seniority 93
7 Reduction in Personnel 97
8 Filling of Vacancies 101
9 Training 127
10 Moving Expenses 143
11 Vacations 151
12 Leave of Absence 161
13 Sick Leave 165
14 Physical Examinations 169
15 Workmen's Compensation Benefits 173
16 Missing Benefits 175
17 Grievances 179
18 System Board of Adjustment 187
19 Crew Complement 195
20 Allocation, Assignment and Scheduling of Flying 197
21 General 235
22 Duration 239
Letters Date Signed
83-3 ALPA-PAC 6/08/83
83-5 Voluntary Contributions - UAL Pilots
Charitable Foundation, Inc. 7/12/83
84-1 Age 60 3/01/84
85-11 Charter Operation 6/15/85
87-1 Resolution of Cockpit Conflicts 8/03/87
87-2 Unimatic Terminal 8/04/87
89-2 Pilot Instructors 11/20/89
90-1 Drug and Alcohol Testing 1/03/90
91-2 International Agreement 5/09/91
91-4 Pacific ETOPS 5/09/91
91-10 Medical/Dental Plan Meet and Discuss 5/09/91
91-13 Future Amendments to Pension Plans 5/09/91
91-15 CRAF 5/09/91
91-16 MAC 5/09/91
91-19 Cessation of Work 5/09/91
91-20 UP-PAC 5/09/91
91-23 CLR Seminar Training 5/09/91
91-27 Dues Check-Off 5/09/91
91-30 MEC Officer Displacement 5/09/91
91-32 Age 59 Bypass 5/09/91
91-33 Agency Shop 5/09/91
91-36 LAX B-737-300 and 757/767
Equipment Domicile 5/09/91
91-39 Company Personnel Policy 5/09/91
91-42 Notice of Pending Furlough 5/09/91
91-45 Definition of Activation Date 11/06/91
92-2 PAA Retiree Medical 5/20/92
92-5 Grievance Mediation 8/12/92
92-7 Reserve Standby Lines 9/21/92
93-2 Trip Trade w/Open Flying 4/29/93
93-4 Non-Disclosure Letter 8/23/93
94-1 Job Security Protection 7/12/94
94-9 Dispute Resolution and Hiring Standards 7/12/94
94-11 Shuttle Agreement 8/19/94
94-12 Data Recorders 11/01/94
94-17 Month End Absence Rule 11/22/94
94-18 Contributions to the DAP 12/15/94
94-19 ESOP Revisions 12/23/94
95-10 75 Hour FAR 7/24/95
96-1 Schedule Flexibility 2/12/96
96-10 International Training 7/31/96
97-4 Allocation of Flying Protocol 2/24/97
97-8 B-777 Crew Rest 5/2/97
97-9 Open Flying for Flight Management 5/16/97
97-13 FOQA Update 9/24/97
98-1 DENTK Contract Training 1/6/98
98-2 Standards Captain Job Share 1/23/98
98-3 Management Pilot Definition 1/23/98
98-6 Domicile Swap 2/2/98
98-8 Simulator Schedule Protocol 4/30/98
98-13 B-777 Crew Rest Facility 12/18/98
98-14 Honolulu Domicile 12/18/98
99-6 B-747-400 Currency 3/31/99
99-7 LCA Work Rules and Compensation 4/27/99
99-8 Widebody New Hire 4/27/99
99-9 Job Share S/C Guideline Change 6/30/99
99-10 Captain Development Course 8/16/99
99-11 Air Canada Letter 10/22/99
99-12 PWM Downtown Hotel 11/15/99
99-13 Crew Meal Expense Clarification 12/10/99
99-14 P.I. Compensation and Days Off 12/29/99
00-1 Natural Disaster Absence Policy 1/7/00
00-2 Pay for ORD DC-10 Freighter/HazMat Training 3/9/00
00-3 Re-award of 2000, 2001 Annual Vacation 3/27/00
00-4 Pre and Post Snap-Back 4/14/00
00-5 Separate Vacation Bidding for HNL B747-400 4/18/00
00-6 Professional Standards Letter 5/15/00
00-7 3 Month reduction of Freezes 5/31/00
00-8 Human Factors LAHSO Simulator Study 6/14/00
00-9 Contribution Lump Sum 7/13/00
00-10 Recapitalization Agreement 10/11/00
00-11 International Medical Study 10/26/00
00-12 PBS Study 10/26/00
00-13 New Equipment Formula 10/26/00
00-14 Labor Disputes 10/26/00
00-15 Cabotage 10/26/00
00-16 New Uniform 10/26/00
00-17 Life Event 10/26/00
00-18 Pension Modifications 10/26/00
00-19 Life, Medical and Dental Insurance Modifications 10/26/00
00-20 Scheduling Commitment 10/26/00
00-21 Flights Scheduled in Excess of 16 Hours 10/26/00
00-22 Short-Term Disability 10/26/00
00-23 570 Seniority Date 10/26/00
00-24 Year 2000 Training Commitments 10/26/00
00-25 Trip Trade and Secondary Lines Modification Test 10/26/00
00-26 Electronic Communication 10/26/00
00-27 New Hire OMC Eligibility 11/28/00
00-28 Anchorage Closing 11/28/00
00-29 Navigating Change Workshop 12/00
00-30 Modifications to the Flight Safety Awareness Program 12/14/00
00-31 Implementation of New Contract Provisions 12/15/00
01-1 777 Over 12-Hour Flights 1/5/01
01-2 Chicago Honolulu Augmentation 1/5/01
01-3 New Hire First Officer 1/12/01
01-4 Bump Notification and Training Notification Changes 1/17/01
01-5 Annual Vacation Bidding for Pilots Surplussed Out
of a Closing Domicile 1/17/01
Section 1-A Page 1
Section 1
Recognition, Scope and Career Security
1-A- Recognition
The Air Line Pilots Association, International (the
"Association"), has furnished the Company evidence that a
majority of the airline pilots employed by the Company have
designated the Association to represent them and in their
behalf negotiate and conclude an agreement with the
Company as to hours of labor, wages and other employment
conditions covering the pilots in the employ of the Company
in accordance with the provisions of Title II of the Railway
Labor Act, as amended and the certification issued by the
National Mediation Board in Case No. R-3463.
1-B- Scope
The pilots on the Pilots' System Seniority List and/or Second
Officer Eligibility Seniority List (the "United Pilots") shall have
the sole and exclusive right to perform and be trained to
perform Company Flying and operate Company Aircraft in
accordance with the terms and conditions of this agreement
or any other applicable agreement or agreements between
the Company and the Association (together, the
"Agreement").
1-B-1- Company Flying
Except as provided in paragraph 1-B-2, ''Company Flying''
includes without limitation all commercial flight operations of
any sort whatsoever, whether revenue, nonrevenue,
scheduled or unscheduled, conducted (i) by the Company or
a Company Affiliate, or (ii) by the Company or a Company
Affiliate for other air carriers, or (iii) by an Entity managed by
or under the Control of the Company or a Company Affiliate,
or (iv) by an Entity in which the Company or a Company
affiliate owns any Equity.
1-B-2- Exceptions to Company Flying
Company Flying does not include flight operations that are (i)
normally performed by the Company's engineering and test
pilots (other than ferry flights that are not diagnostic test
flights), or (ii) conducted by a Feeder Carrier pursuant to
Page 2 Section 1-B-3
paragraph 1-C-1 below, or (iii) conducted by a Domestic Air
Carrier pursuant to paragraph 1-C-2 below, or (iv) conducted
by a Foreign Air Carrier pursuant to paragraph 1-C-3 below
(including Foreign Air Carriers that are subject to paragraph
1-C-3-f below), or (v) conducted by an Air Carrier Purchaser
during the operations following a Successorship Transaction
but before an Operational Merger that are subject to
paragraph 1-F below, or (vi) conducted by any other air
carrier in accordance with an Industry Standard Interline
Agreement.
1-B-3- Pilot Training Center
1-B-3-a- Neither the Company nor a Company Affiliate shall
enter into any sale, lease, transfer or disposition of (i) the
Denver pilot training center or any successor training
facility (the "Pilot Training Center") or (ii) pilot training
equipment that prevents the Company from accomplishing
the Company's normal training requirements for United
pilots in the Pilot Training Center, provided that:
1-B-3-a-(1) The Company may enter into a sale-leaseback
transaction for financing purposes in which
the Company maintains operational control and
continues to utilize only employees of the Company or
the persons identified in paragraph 1-B-3-b-(1) and 1-
B-3-b-(2) below to conduct United Pilot training;
1-B-3-a-(2) The Company may sell, lease, transfer or
otherwise dispose of excess training center facilities to
the extent they are not reasonably necessary to
accomplish the Company's normal training
requirements for United Pilots within the Pilot Training
Center; and
1-B-3-a-(3) The Pilot Training Center may be sold to a
Successor in connection with a Successorship
Transaction (as defined in paragraph 1-D-1, below).
1-B-3-b- Neither the Company nor a Company Affiliate
shall enter into any agreement, or arrangement with any
person who is not employed by the Company to conduct or
supervise United pilot training or to utilize United training
facilities to train other pilots, including without limitation
all United pilot training historically performed at the Pilot
Training Center, except that the Company may continue to
1-B-3-b-(1) Use retired or disability retired United
pilots who perform the present duties of a flight
technical instructor in the Pilot Training Center as
Section 1-B-3-c Page 3
consultants to the Company while under the
Company's supervision; and
1-B-3-b-(2) Permit aircraft manufacturers or other
qualified organizations to conduct initial training of
United flight training personnel on new aircraft
equipment types.
1-B-3-c- If the Company is in compliance with paragraph
1-B-3-a above, then the Company may from time to time
utilize United training personnel to train United pilots at
training facilities other than the Pilot Training Center, and
may continue to permit employees of another air carrier to
utilize United training facilities to train pilots of that carrier.
1-B-4- Disposition of Aircraft or International Routes
1-B-4-a- Neither the Company nor a Company Affiliate
shall conclude a sale, lease, transfer or other disposition,
whether directly or indirectly, of Company Aircraft to an
Entity (the ''Purchaser'') that uses such aircraft to provide
or receive passenger feed to or from the Company
pursuant to an agreement or an arrangement with the
Company or a Company Affiliate other than (i) as provided
in paragraph 1-C-1 below, or (ii) pursuant to an Industry
Standard Interline Agreement.
1-B-4-b- Neither the Company nor a Company Affiliate
shall conclude a sale, lease, transfer or other disposition,
whether directly or indirectly, of international routes
owned by the Company or a Company Affiliate to an Entity
(other than a Company Affiliate) that uses such
international routes to provide or receive passenger feed
to or from the Company pursuant to an agreement or an
arrangement with the Company or a Company Affiliate
other than pursuant to an Industry Standard Interline
Agreement.
1-C- Permitted Code Sharing, Marketing, Ownership and
Other Arrangements
1-C-1- Feeder Flying
The Company or a Company Affiliate may enter into code
sharing with Feeder Carriers in conformance with the
provisions of this paragraph C-1. The Company or a
Company Affiliate may create, acquire, Control, manage,
take an Equity interest in, enter into code sharing
arrangements with, or sell, lease or transfer aircraft to
Feeder Carriers that comply with the provisions of this
Page 4 Section 1-C-1
paragraph C-1 below, without the flight operations of such air
carrier being considered Company Flying or the aircraft of
such air carrier being considered Company Aircraft.
1-C-1-a- Key Cities and Domicile Routes
1-C-1-a-(1) A Feeder Carrier shall not operate any
Feeder Flying Non-Stops between current or future
Company Key Cities without the prior written consent
of the Association.
1-C-1-a-(2) Without limiting paragraph a-(1), a Feeder
Carrier shall not operate Feeder Flying Round Trips
between current or future Company pilot domiciles or
between a current or future Company Key City and a
current or future Company pilot domicile unless the
Company demonstrates that a Company Round Trip
operating in that Market instead of the Feeder Carrier
Round Trip would not pass the Base Internal Rate of
Return Test ("BIRR Test").
1-C-1-a-(3) As an exception to the foregoing, Feeder
Carriers may operate in the IAD-LGA, IAD-EWR, and
IAD-JFK Markets provided that, in order to operate
Small Jets in such Markets, the Feeder Carriers do not
operate in excess of 38,200 actual block hours in those
Markets in any period of twelve consecutive months.
1-C-1-b- Connecting Operations
Feeder Carriers as a group shall schedule at least ninety
percent (90%) of their Feeder Flying Non-Stops into or out
of the following airports: IAD, DCA, MIA, LGA, EWR, JFK,
ORD, DEN, LAX, SFO, SEA, BOS, PDX, PHX, LAS, SJC,
SAN and any other airport that the parties later agree to
add to this list. Up to five percent (5%) of Feeder Flying
flights may be applied toward satisfying this requirement
even if such flights include multiple stops, as long as such
flights (i) originate or terminate at one of the foregoing
airports, (ii) maintain a single flight number on a single
aircraft for all the legs of such flight to or from such
airport, and (iii) operate with scheduled intermediate stops
of less than two (2) hours.
1-C-1-c- Feeder Flying Permitted Range
At least 80% of the Feeder Flying Non-Stops in any month
shall take place on routes of 850 nautical miles or less.
1-C-1-d- Feeder Carrier Ratio
In each calendar quarter Feeder Flying shall not exceed
the Feeder Carrier Ratio.
Section 1-C-1 Page 5
1-C-1-e- Feeder Flying on Company Routes
1-C-1-e-(1) A Feeder Carrier shall not initiate a new
scheduled Feeder Flying Round Trip in any Market
operated by the Company at any time in the preceding
twenty-four (24) months, unless the Company
demonstrates that a Company Round Trip that may be
initiated in the Market instead of the Feeder Flying
Round Trip would not pass the BIRR Test.
1-C-1-e-(2) The Company shall not remove a
scheduled Company Round Trip from any Market
served by Feeder Flying unless the Company
demonstrates that the Round Trip to be removed would
not pass the BIRR Test in the absence of a Feeder
Flying Round Trip scheduled to depart within thirty (30)
minutes of the Company Round Trip.
1-C-1-f- Number of Small Jets in Feeder Flying
1-C-1-f-(1) In order to permit the operation of up to
sixty-five (65) Small Jets in Feeder Flying, the
Company will maintain in its Active Fleet no fewer than
four hundred fifty-one (451) Large-Gauge Narrowbody
Aircraft. For increases over the number sixty-five (65),
the base numbers will be four hundred and fifty-one
(451) Large-Gauge Narrowbody Aircraft and one
hundred forty-one (141) Widebody Aircraft.
1-C-1-f-(2) When the Company permits the operation
of Small Jets in Feeder Flying over the base number of
sixty-five (65), it will, at its option, either:
1-C-1-f-(2)-(a) Where the Active Large-Gauge
Narrowbody Fleet is at least four hundred fifty-one
(451), add to the Active Fleet one (1) Small-Gauge
Narrowbody for each net addition of one (1) such
Small Jets; or
1-C-1-f-(2)-(b) Increase the base Active Large-Gauge
Narrowbody Fleet of four hundred fifty-one
(451) by one (1) Large-Gauge Narrowbody Aircraft
for each net addition of three (3) such Small Jets; or
1-C-1-f-(2)-(c) Increase the base Active Widebody
Fleet of one hundred forty-one (141) by one (1)
Widebody Aircraft for each net addition of five (5)
such Small Jets.
1-C-1-f-(3) In addition to the Small Jets provided for in
paragraph 1-C-1-f-(1) and paragraph 1-C-1-f-(2)
above, the Company may permit an increase in Small
Page 6 Section1-C-1
Jets operated in Feeder Flying, without increasing
Active Fleet numbers by:
1-C-1-f-(3)-(a) Permitting Feeder Carriers to replace
on a one for one basis up to one hundred and fifty
(150) Turbo/Prop Aircraft in Feeder Flying service
on [DOS] and that are thereafter retired from Feeder
Flying; or
1-C-1-f-(3)-(b) Permitting the replacement of BAe-146
aircraft as provided in subparagraph (4) below.
1-C-1-f-(4) In addition to the Small Jets provided for in
paragraphs 1-C-1-f-(1) through (3) above, Feeder
Carrier Air Wisconsin Airlines Corp. ("AWAC") may
operate up to eighteen (18) aircraft with seating
capacity in excess of fifty (50) seats (the "AWAC
Quota"). Currently, the AWAC Quota is filled by BAe-146
aircraft with the following tail numbers: N463AP,
N179US, N181US, N183US, N606AW, N607AW,
N608AW, N609AW, N610AW, N611AW, N612AW,
N614AW, N615AW, N616AW, N290UE, N291UE,
N292UE, and N156TR. As needed, AWAC may replace
any aircraft within the AWAC Quota with: (i) any other
BAe-146 or AVRO 85 aircraft each with no more
passenger seats than were carried in the actual
operation of the replaced aircraft, or (ii) any other
aircraft with a maximum certificated seating capacity in
the United States of eighty-five (85) seats and a
maximum certificated gross takeoff weight in the United
States of up to ninety thousand (90,000) pounds, or (iii)
up to two Small Jets.
1-C-1-f-(5) In order to satisfy the requirements set forth
in this paragraph 1-C-1-f, including sub-paragraphs 1-
C-1-f-(1) through (3) above, the Narrowbody and
Widebody Aircraft in the Company's Active Fleet must
maintain the Average Utilization Rate.
1-C-1-g- Numbers of Pilots
The absolute number of captains plus first officers
employed by the Company shall not be reduced below
9592 captains plus first officers employed on Date of
Signing as a result of Feeder Flying under the terms of
this Agreement.
1-C-1-h- Feeder Carriers Conducting Operations for
Themselves and Other Carriers
1-C-1-h-(1) An air carrier that is acting as a Feeder
Carrier (other than a Company Affiliate) may also
Section 1-C-2 Page 7
operate jet aircraft with a maximum certificated seating
capacity in the United States of up to seventy (70)
seats and a maximum certificated gross takeoff weight
in the United States of up to eighty thousand (80,000)
pounds on its own behalf or pursuant to agreements
with air carriers other than the Company or Company
Affiliate;
1-C-1-h-(2) An Affiliate of a Feeder Carrier (other than
a Company Affiliate) may operate any size and weight
aircraft on its own behalf and pursuant to agreements
with other carriers.
1-C-1-i- Feeder Carrier Branding
1-C-1-i-(1) Feeder Carriers may not conduct
commercial flight operations under the name United
Airlines, United Shuttle, or other names used by the
Company except as provided in subparagraph (2)
below.
1-C-1-i-(2) Aircraft operated in Feeder Flying may bear
the Company's logo or aircraft livery only if such
aircraft bear the name United Express or similar name
connoting a connection with United Airlines (other than
the names United Airlines, United Shuttle or other
name used by the Company).
1-C-2- Other Domestic Code Sharing Agreements
1-C-2-a- The Company may enter into or maintain code
sharing with Domestic Air Carriers ("Domestic Code
Sharing Agreements") that permit such carriers to apply
the Company's designator code to their operations as long
as:
1-C-2-a-(1) The number of quarterly block hours
scheduled to be operated by such carriers utilizing the
Company's designator code does not exceed one
percent (1%) of the Company's total scheduled block
hours for the same quarter within the United States and
Territories; and
1-C-2-a-(2) Domestic Code Sharing Agreements do not
take place in any operations between any current or
future Company Key Cities or Company gateway
airports.
1-C-2-a-(3) Except as provided in paragraphs C-2-a-(1)
and (2) above and C-2-b below, the Company will not
enter into schedule coordination agreements with other
Domestic Air Carriers for the purpose of creating
Page 8 Section 1-C-2-b
greater schedule connectivity. Notwithstanding the
foregoing, the Company shall not be prevented from
participating in IATA Scheduling or Slot Conferences
nor from engaging in slot exchanges with Domestic Air
Carriers.
1-C-2-b- The restrictions contained in paragraph C-2-a
above shall not apply to (i) Feeder Flying, (ii) code-share
flying operated by Aloha Airlines, Inc. in the Hawaiian
Islands under the current United-Aloha agreement and
renewals thereof or (iii) code share flying operated by a
Domestic Air Carrier that replaces Aloha Airlines under a
similar agreement limited to the Hawaiian Islands,
provided that the replacement air carrier and any major
Domestic Air Carrier Parent it may have maintain their
headquarters, executive offices, and offices for senior
flight operations personnel within the State of Hawaii.
1-C-3- International Code Sharing Agreements
The Company may enter into or maintain code sharing
agreements with Foreign Air Carriers (''International Code
Sharing Agreements'') that permit such carriers to utilize the
Company's designator code with the Company on such
carriers' flight operations between the United States and
Territories and foreign points or between two foreign points
("International Flying") under the following terms and
conditions:
1-C-3-a- Protection for Company International Flying
Unless the Company obtains the approval of the
Association, it must demonstrate that implementation of
all International Code Sharing Agreements and renewals
thereof, does not cause a reduction in the then-current
total number of block hours of International Flying
performed by the Company. Such block hours will be
measured at the conclusion of the calendar quarter
following implementation of the International Code
Sharing Agreement and renewals thereafter.
1-C-3-b- Minimum Company International Flying
The Company shall schedule at least the following block
hours of Company International Flying in the following
years: 2000: 511,538; 2001: 542,373; 2002: 559,515;
2003 and thereafter: 576,300.
1-C-3-b-(1) If, in any rolling twelve (12) month period,
the Company operates fewer than ninety-five percent
(95%) of the total number of block hours required by
Section 1-C-3 Page 9
paragraph 1-C-3-b above, (measured by the monthly
averages determined by the annual requirements),
then the Company shall not expand total number of
block hours operated by other carriers pursuant to
International Code Sharing Agreements until the
Company maintains ninety-five percent (95%) of the
required number of scheduled block hours (measured
by the monthly averages determined by the annual
requirements) for the twelve (12) month period prior to
any such expansion.
1-C-3-b-(2) If, in any rolling twelve-month period the
Company operates fewer than ninety-five percent
(95%) of the total number of block hours required by
paragraph 1-C-3-b above, (measured by the monthly
averages determined by the annual requirements),
then the Company will review the ASM growth of the
Company and its international code sharing partners in
each Joint International Non-Stop Market contained
within an International Code Sharing Agreement. If the
ASM growth of the international code sharing partner in
the Joint International Non-Stop Market since the later
of the inception of the International Code Sharing
Agreement or the [DOS] is two or more times greater
than the Company's ASM growth in the same Joint
International Non-Stop Market, the Company will
further evaluate the Joint International Non-Stop
Market to determine if the addition of one or more
Company Round Trips instead of an existing
international code share partner flight in such Joint
International Market would pass the BIRR Test. If the
evaluation determines that the addition of one or more
Company Round Trips passes the BIRR Test, the
Company will add such Round Trip(s) as soon as
practical. Notwithstanding this paragraph, the
Company is not required to add a Round Trip to a Joint
International Market that it is barred from adding
unilaterally by virtue of an agreement that satisfies
paragraph 1-C-3-d below.
1-C-3-c- Protection Against Reduction of Company
Flights
Except as provided in paragraph 1-C-3-d below, the
Company shall not remove a scheduled Company Non-Stop
from a Joint International Non-Stop Market unless
the Company demonstrates that the Company Non-Stop to
be removed does not pass the BIRR Test.
Page 10 Section 1-C-3-d
1-C-3-d- Revenue Sharing With Foreign Air Carriers
The Company may enter into and maintain agreements with
Foreign Air Carriers where the Company has antitrust
immunity with such carriers, providing for a sharing of profits
and losses, if the Company will maintain, throughout the
agreement, the ASM ratio no less favorable to the Company
than the one that exists among participating carriers at the
inception of the agreement, of scheduled ASMs generated by
Round Trips in Markets covered by the agreement in which
all participating carriers have rights to fly (the "Covered
Markets"). The ratio shall be the number of scheduled ASMs
generated by Company Round Trips in the Covered Markets
at the inception of the agreement divided by the total number
of scheduled ASMs generated by all Round Trips in the
Covered Markets operated by all parties to the agreement
(the "Company's ASM Share"). The manner in which the
Company Share is maintained shall be as follows:
1-C-3-d-(1) The Company's ASM Share at the
inception of the agreement shall be the base line ratio
(the "Base Line Ratio" or "BLR") for the duration of the
agreement. However, if the Company's ASM Share is
less than sixty-five percent (65%) divided by the
number of carriers in the agreement (the "Target BLR"),
it shall operate all new Round Trips in Covered Markets
until such time as the Company's Share equals or
exceeds the Target BLR.
1-C-3-d-(2) Annually, the Company will audit the total
number of scheduled ASMs generated by Round Trips
in Covered Markets.
1-C-3-d-(3) If, at the time of the annual audit, the
Company's ASM Share has fallen below the Target
BLR, it will take the necessary steps to return the
Company's Share to the Target BLR by the date of the
next annual audit.
1-C-3-d-(4) For determining all profits and losses
under the agreement:
1-C-3-d-(4)-(a) Total costs for all parties to the
agreement shall not include employment costs as
defined under DOT Form 41;
1-C-3-d-(4)-(b) Profits and losses that are subject to
sharing shall be those that are incremental to the
profits and losses prior to the applicable agreement.
On an annual basis, the Company's share of
incremental profits from flight operations under the
Section 1-C-3-d Page 11
agreement shall not exceed the Company's ASM
Share.
1-C-3-e- Prohibition on Cabotage
Regardless of any future modification in legal rules
governing cabotage, Foreign Air Carriers that are parties
to International Code Sharing Agreements may not
operate any flights where the Foreign Air Carrier picks up
for hire at any point in the United States and Territories
passengers, property or mail destined for any other point
in the United States and Territories ("U.S. Flight") if the
U.S. Flight operates under the designator code of the
Company or a Company Affiliate. Further, such Foreign
Air Carrier shall be prohibited from placing its code on
Company Aircraft in any domestic market where the
Foreign Air Carrier operates a U.S. Flight.
1-C-3-f- Acquisition of Equity of Foreign Air Carriers
The Company or a Company Affiliate may acquire (i) up to
twenty percent (20%) of the total Equity in the form of
Common Equity and (ii) up to twenty percent (20%) of the
total Equity in a form or forms which are not Common
Equity, in each case, of any Foreign Air Carrier that is a
member of the Star Alliance or any successor multi-airline
network (the "Network") or of any other Foreign Air Carrier
that, as a condition of such investment, commits within six
months of the investment to become a member of the
Network, without such investment by itself causing the
flight operations of such air carrier to be considered
Company Flying, the aircraft of such air carrier to be
considered Company Aircraft or such Entity to be
considered a Company Affiliate. However, the Company or
its Affiliate, as the case may be, shall sell its Equity in a
Foreign Air Carrier as soon as practicable if that Foreign
Air Carrier ceases to be a member of the Network, or fails
to become a member of the Network within eighteen
months of the commitment to do so. In the event the
Company or a Company Affiliate acquires any Equity
pursuant to clause (ii) above, it will ensure that under no
circumstances, except in connection with the sale or other
transfer of such Equity other than to a Company Affiliate,
shall such non-Common Equity be exchanged or
exercised for, or converted into Common Equity whether
at the election of the Company or such Company Affiliate
or otherwise, without the prior written consent of the
Association.
Page 12 Section 1-C-4
1-C-4- Code Sharing Agreements - General
1-C-4-a- Except as provided in paragraph 1-C-1, 1-C-2,
and 1-C-3 above, neither the Company nor a Company
Affiliate shall enter into any agreement or arrangement
that permits any other air carrier to conduct commercial
flight operations:
1-C-4-a-(1) Under any designator code currently or in
the future used by the Company or a Company Affiliate,
or
1-C-4-a-(2) In any aircraft which bear the name, trade
name, logo, aircraft livery, trademarks or service marks
("Brand") currently or in the future used by the
Company or a Company Affiliate other than (i) a Brand
of Star Alliance (which may include the Company's
Brand) placed in an inferior position to the Brand of the
operating carrier so as to indicate that the flying under
that Brand is not being performed by the Company, or
(iii) a Brand of United Express or similar Feeder Carrier
Brand; or
1-C-4-a-(3) That utilize the Brand used by the
Company in a manner that holds out to the public that
such carrier's flying is being conducted by the
Company.
1-C-4-b- The Company and Company Affiliates may
enter into and maintain marketing agreements, revenue
sharing agreements and schedule coordination
agreements with other air carriers that do not contravene
the provisions of this Section 1-C. Notwithstanding the
foregoing sentence, agreements that provide for sharing
of profits and/or of profits and losses may only be entered
into with air carriers pursuant to and in accordance with
paragraph 1-C-3-d.
1-C-4-c- Nothing herein shall prevent the Company from
entering into, maintaining or implementing International
Code Sharing Agreements covering a route or routes that
the Company is unable to operate due to the loss of
operating authority (including but not limited to slots)
provided that the Company has made a good-faith effort to
retain the lost operating authority or slots. Further, the
Company shall not be required to add a Round Trip that it
is unable to operate due to the lack of operating authority
(including but not limited to slots) provided that the
Company has made a good-faith effort to obtain the
applicable operating authority or slots.
Section 1-C-5 Page 13
1-C-5- Block Space
The Company may enter into block space arrangements with
other carriers (i.e., the advance purchase or reservation of
blocks of seats on other carriers for resale by the Company)
only
1-C-5-a- On flights which carry the Company's
designator code pursuant to paragraph 1-C-1, 1-C-2 and
1-C-3 above, provided that the Company may not enter
into a block space arrangement with a Foreign Air Carrier
for more than one hundred and seventy-five (175) seats
on any aircraft on which the space is blocked (seventy
(70) seats for operations to or from Mexico, Canada, the
Caribbean or Central America).
1-C-5-b- On a limited number of occasions where United
Vacations or Mileage Plus from time to time purchases
block seats in order to provide connecting service as part
of group vacation packages where such service or seats
on such service are not available from the Company; or
1-C-5-c- On other occasions, limited in number and
consistent with the Company's limited practices as of the
date of this Agreement, where the Company from time to
time purchases seats for connecting passengers over
routes on which the Company does not maintain operating
authority.
1-C-6- Cargo
When the Company ships cargo for hire, whether
independently or as part of a cooperative agreement with
other Entities, it shall endeavor to maximize the carriage of
such cargo on Company Aircraft as opposed to on other
carriers. Further, when shipped by air between two points
served by the Company on a Non-Stop basis, the cargo will
be scheduled to be shipped on Company Aircraft. Further,
the Company and its Affiliates shall not share profits from
shipment of cargo by other Domestic Air Carriers except
Feeder Carriers.
1-D- Successorship
1-D-1- Successorship Transactions
The Company and its Affiliates shall require any successor,
assign, assignee, transferee, administrator, executor and/or
trustee of the Company or of a Parent (a "Successor")
resulting from the transfer (in a single transaction or in multi-
Page 14 Section 1-D-1-a
step transactions) to the Successor of the ownership and/or
control of fifty (50%) percent or more of the Equity of the
Company or Parent or fifty percent (50%) of the value of the
assets of the Company (a "Successorship Transaction") to
employ or cause the Company to continue to employ the
United Pilots in accordance with the provisions of the
Agreement and to assume and be bound by the Agreement,
provided:
1-D-1-a- In order for a Successor to be required to
employ or to cause the Company to continue to employ
any of the United Pilots in accordance with the provisions
of the Agreement at any air carrier other than the
Company, the Successor must be engaged in the
operation of an air carrier; however, if the Successorship
Transaction is for less than all or substantially all of the
Equity of the Company or a Parent, or assets of the
Company, the sections of the Agreement providing for
minimum numbers of pilots, aircraft, and flying shall be
modified and/or prorated to correspond to the size of the
Company airline operations disposed of to the Successor,
and
1-D-1-b- A Successor shall not include an Entity that is
(a) an IRS-qualified employee benefit plan of the
Company or a Parent or a trustee or other fiduciary of
such plan acting in its capacity as such, provided that the
plan is one in which (i) all United Pilots who meet the
general service requirements applicable to all participants
are entitled to participate; (ii) stock of the Company or
Company Affiliate allocated to accounts of participants is
voted (subject to the ERISA obligations of the trustees) in
accordance with the instructions of the participants if any
are given; and (iii) the trustee voting unallocated stock is a
nationally recognized bank or financial institution or (b)
any similar plan or arrangement involving broad-based
participation by the Company's pilots. If stock in the plan
which is required to be voted in accordance with directions
of the participants is tendered to and purchased by an
Entity outside the plan (other than a plan that satisfies the
foregoing sentence), such stock shall be deemed to be no
longer owned by the plan for purposes of this exemption.
1-D-2- Successorship Agreements
The Company and its Affiliates shall not conclude any
agreement for a Successorship Transaction unless the
Successor agrees in writing, as an irrevocable condition of
the Successorship Transaction, to assume and be bound by
Section 1-D-3 Page 15
the Agreement, to recognize the Association as the
representative of the Successor's pilots, and to guarantee
that the pilots on the United Pilots' System Seniority List will
be employed by the Successor in accordance with the
provisions of the Agreement.
1-D-3- Air Carrier Successors
In the event of a Successorship Transaction in which the
Successor is an air carrier or Entity that Controls or is under
the Control of an air carrier, the Successor shall provide the
Company's pilots with the seniority integration rights
provided in Sections 2, 3, and 13 of the Labor Protective
Provisions specified by the Civil Aeronautics Merger Board in
the Allegheny-Mohawk merger ("Allegheny-Mohawk LPPs"),
except that the integration of the seniority lists of the
respective pilot groups shall be governed by Association
Merger Policy if both pre-transaction pilot groups are
represented by the Association.
1-E- Change of Control
1-E-1- Rights Agreement
In addition to all other rights, the Association shall be
provided protection as follows at the same time protection is
provided to shareholders pursuant to any shareholder
agreement adopted by UAL Corporation that is substantially
similar to the Rights Agreement dated December 11, 1986, as
amended, between UAL Corporation and Morgan
Shareholder Services Trust Company (any such agreement
as the same may be amended, supplemented or otherwise
modified from time to time, a "Rights Agreement"). The
Association shall have the right, during the period described
in this paragraph E-1, to serve a Section 6 notice to reopen
the Agreement. For purposes hereof, the Association's right
to serve a Section 6 notice under this provision shall be
effective only during the time period the registered holders of
then outstanding rights certificates issued pursuant to a
Rights Agreement may exercise rights to purchase shares of
stock of the Company or UAL Corporation pursuant to such
Rights Agreement.
1-E-2- Additional Rights
In the event of a Successorship Transaction, the Association
shall, in addition to all other rights, thereupon have the right
in its sole discretion, upon written notice to the Company
within 60 days of written notice following the closing of such
Page 16 Section 1-E-3
transaction, (a) to extend the duration of this Agreement for
one, two or three years at the Association's option, past its
amendable date with across-the-board wage increases of five
percent (5%) on the amendable date (i.e. September 1, 2004)
and each annual anniversary of the amendable date
thereafter (i.e., on September 1 as applicable); (b) to serve
notice under Section 6 of the Railway Labor Act, as
amended, to reopen the Agreement without regard to Section
22 (Duration) of the Agreement; or (c) to exercise any
combination of the rights specified in this paragraph.
1-E-3- Competing Proposal
In the event the Company or its Parent receives a proposal (a
''Proposal'') for a transaction which would result in a
Successor if completed, and the Company or its Parent
determines to pursue or facilitate the Proposal, the Company
or its Parent will in good faith seek to provide the Association
with the opportunity to make a competing Proposal at such
time and under such circumstances as the Board of Directors
of UAL or the Company reasonably determines to be
consistent with its or their fiduciary duties.
1-F- Operations Following Successorship Transaction
If the acquiring Entity in a Successorship Transaction is an
air carrier or Affiliate of an air carrier ("Air Carrier
Purchaser"):
1-F-1- The flight operations of the Company and Air Carrier
Purchaser shall remain separate until the implementation of
an integrated seniority list pursuant to paragraph 1-D-3
above and a single collective bargaining agreement (the
"Operational Merger Date"); and
1-F-2- All aircraft in the Company's Active Fleet and all
aircraft on firm order by the Company that are delivered to
the Company or the Air Carrier Purchaser shall be operated
by the United Pilots under the terms and conditions provided
in the Agreement until the Operational Merger Date; and
1-F-3- Until the Operational Merger Date, in each month
following the Successorship Transaction the ratio of block
hours of Company Flying to block hours of flying by the Air
Carrier Purchaser shall equal or exceed the same ratio
determined for the twelve calendar months prior to the
Successorship Transaction.
Section 1-G Page 17
1-G- Other Labor Protective Provisions
If the Company transfers to an Entity (the "Transferee") (by
sale, lease or other transaction) or disposes of aircraft or
route authority which produced fifteen percent (15%) or more
of the Company's operating revenues, block hours, or ASMs
during the twelve (12) months immediately prior to the date of
the agreement to transfer such aircraft or route authority (the
"Transaction Date"), net of revenues, block hours or ASMs
that are produced by aircraft or route authority that were
placed into service during the same period (any such
transfer, a ''Substantial Asset Sale''), then:
1-G-1- Offer of Employment to United Pilots
The Company shall require the Transferee to offer pilot
employment to eligible United Pilots. The eligibility criteria
shall be determined by agreement between the Company and
the Association and shall be reasonably related to the assets
transferred, the interests of the United Pilots and the
Company, and the nature and timing of the transaction
among other issues. If the Association and the Company are
unable to agree upon eligibility criteria that are consistent
with the foregoing considerations, the System Board of
Adjustment shall determine such eligibility criteria pursuant
to the expedited procedures set forth in paragraph 1-L-1
below (the ''Transferring Pilots''). The number of pilot
employment opportunities for Transferring Pilots shall be, as
measured in the twelve (12) months prior to the Transaction
Date, the sum of (i) the average monthly pilot staffing actually
utilized in the operation of the aircraft transferred to the
Transferee in connection with the Substantial Asset Sale plus
(ii) the average monthly pilot staffing actually utilized in the
operation of the route authority transferred to the Transferee
in connection with the Substantial Asset Sale to the extent
such pilot staffing is not included in the calculation of clause
(i) above. Offers of employment that are rejected by a United
Pilot shall in turn be offered to other United Pilots under the
eligibility criteria determined under the first sentence of this
subparagraph 1, until such opportunities have been
exhausted.
1-G-2- Seniority Integration
The Company shall require the Transferee to provide the
Transferring Pilots with the seniority integration rights
provided in Sections 2, 3, and 13 of the Allegheny-Mohawk
LPPs except that the integration of the Transferring Pilots
Page 18 Section 1-H
into the Transferee's seniority list shall be governed by
Association Merger Policy if both pre-transaction pilot groups
are represented by the Association. The Company shall
require each Transferee to agree, and such Transferee shall
agree, to provide the seniority integration rights specified in
the preceding sentence in connection with a Substantial
Asset Sale in a written document enforceable against the
Transferee by the Association and/or the Transferring Pilots.
1-H- General Furlough and Job Security Protection
1-H-1- Furlough Protection
United Pilots who have completed their probationary period
will not be furloughed. Regardless of any other provision of
the Agreement, the Company may require a United Pilot who
would have been furloughed but for this paragraph to utilize
his accrued unused vacation.
1-H-2- Active Status Protection
The total number of Captains, First Officers and Management
Pilots in active status under the Agreement (i.e., excluding
United Pilots on long-term sick leave or leave of absence) will
not be reduced below 9458.
1-H-3- Fleet Size Guarantee
The Active Fleet of Large-Gauge Narrowbody Aircraft and of
Widebody Aircraft shall be no fewer than the following as of
yearend for each of the following years: 2000: 571; 2001:
608; 2002: 625; 2003 and thereafter: 633.
1-H-4- Block Hours Guarantee
The Company shall schedule no fewer than the following
specified number of block hours of Company Flying in Large-Gauge
Narrowbody Aircraft and Widebody Aircraft in each of
the following calendar years: 2000: 2,188,166; 2001:
2,337,557; 2002: 2,418,125; 2003 and thereafter: 2,449,077.
1-H-5- Changed Circumstances
The following will govern the Company's obligations under
this Section 1-H in the event the Company experiences
changed economic circumstances beyond the Company's
control:
1-H-5-a- Substantial Economic Downturn
Section 1-H-5 Page 19
Although the Company is fully committed to maintaining the
Active Fleet and the minimum block hours guarantees
established in paragraph 1-H-3 (Fleet Size Guarantee) and 1-
H-4 (Block Hours Guarantee) above, the parties recognize
that a substantial economic downturn beyond the control of
the Company may require a reduction in its planned level of
flight operations as a matter of prudent business judgment in
order to avoid a substantial decline in profitability (a
"Reduction"). Accordingly, the Company shall be permitted to
reduce flight operations from the levels established in
paragraph 1-H-3 and 1-H-4 if it fully complies with each
element of the following review and approval process:
1-H-5-a-(1) The Company rationally projects, in an
exercise of the Company's rational business judgment
and customary forecasting practices, that the Company
will suffer a year-over-year reduction of at least thirty-three
and one-third percent (33 1/3%) in its reported
pre-tax earnings (excluding extraordinary debits and
credits in accordance with GAAP) over the next twelve
(12) months if it does not initiate a Reduction (such
projection being referred to as the "Downturn
Projection"). The factors that might warrant a
Reduction include without limitation:
1-H-5-a-(1)-(a) Significant declines in the
Company's advance bookings or current ticketing;
1-H-5-a-(1)-(b) Significant declines in current or
forecast Company or industry revenues;
1-H-5-a-(1)-(c) Significant increases in current or
forecast unit costs;
1-H-5-a-(1)-(d) Significant current or forecast
competitive capacity changes; or
1-H-5-a-(1)-(e) Any other factor or combination of
factors that in the Company's rational business
judgment justifies the substantial year-over-year
projected decline in profitability described above.
1-H-5-a-(2) The Company presents its Downturn
Projection and supporting information and
documentation to the Association as early as
practicable in the Company's planning process but at
least forty-five (45) days before a Reduction. The
Company will provide the Association with every
reasonable opportunity to review the Downturn
Projection and to suggest ways of avoiding a
substantial decrease in profitability without a
Reduction. The Association will provide any comments
Page 20 Section 1-H-5
it may have on the Company's Downturn Projection
within 10 business days of the date it receives the
Downturn Projection and supporting information and
documentation from the Company.
1-H-5-a-(3) The Board of Directors of the Company's
Parent (the "Board") determines, at least 30 days
before a Reduction and through a formal resolution
following full review and debate that the Company must
initiate a Reduction in order to avoid the substantial
decrease in profitability described above.
1-H-5-a-(4) The Company and the Association jointly
select and brief a recognized expert of national
standing (the "Neutral Professional") in connection with
the following review process:
1-H-5-a-(4)-(a) If the Association disputes that the
Downturn Projection is based upon a rational
business judgment, the Association shall so inform
the Company within two business days of the
Board's determination. In that event, the Company
and the Association will immediately submit their
dispute to the Neutral Professional.
1-H-5-a-(4)-(b) The Neutral Professional will
determine within three days of submission whether
the Company failed to base the Downturn Projection
on a rational business judgment and shall inform
both the Company and the Association of the basis
for any determination that the Company failed to
base the Downtown Projection on an rational
business judgment (a "Downturn Rejection
Decision").
1-H-5-a-(4)-(c) If the Neutral Professional makes a
Downturn Rejection Decision, the Company may not
initiate a Reduction until the Board reconsiders and
takes a new vote on whether, in light of the Neutral
Professional's report, the Company must initiate a
Reduction in order to avoid the substantial decrease
in profitability described above.
1-H-5-a-(5) - While a Reduction remains in effect:
1-H-5-a-(5)-(a) The Company will provide the
Association any financial and operational
information that the Association reasonably
requests to monitor the Company's performance
and projections;
1-H-5-a-(5)-(b) The Company will meet with the
Association on a monthly basis to review the
Section 1-H-5 Page 21
Company's operational results, financial
performance, business plans and future projections
in order to discuss whether the Company would
continue to experience the substantial decrease in
profitability described above in the absence of the
Reduction; and
1-H-5-a-(5)-(c) The Board will review and re-evaluate
the reduction resolution at least every six
months in light of the Company's then-current
operational and financial performance and
projections.
1-H-5-b- Reduction Limits
If the Company fully complies with the review and
approval process described in paragraph 1-H-5-a above, it
may initiate a Reduction in accordance with the following:
1-H-5-b-(1) The Company may initiate the Reduction to
the extent necessary to eliminate flight operations that,
according to the Company's reasonable projections,
produce negative cash flow for the Company over the
projected period of reduced flight operations. As a
general rule, the Company will project cash flow based
on the difference between (i) the net forgone revenues
for the applicable flight operations (including segment
and beyond revenues and after adjusting for revenue
recapture on other Company operations, the resale of
beyond seats, competitive capacity adjustments and
pricing adjustments) and (ii) the actual system-wide
(both segment and beyond) flight operating expenses,
traffic related expenses, aircraft ownership costs
(excluding depreciation), infrastructure and overhead
costs, and cost of capital that are reasonably allocated
to the applicable flight operations.
1-H-5-b-(2) It is the intent of the Company that a
Reduction will be temporary in nature. At the
conclusion of the Reduction, the Company will resume
the levels set forth in paragraph 1-H-3 and 1-H-4 above
as soon as circumstances warrant; and
1-H-5-b-(3) During a Reduction, the Company will not
permit Feeder Carriers to:
1-H-5-b-(3)-(a) Operate more Small Jets in Feeder
Carrier Operations than were operated in the period
sixty to ninety (60-90) days before the Reduction
except for replacement aircraft permitted by
paragraph 1-C-1-f-(3) above and a maximum of six
(6) Small Jets that (i) are subject to firm and binding
Page 22 Section 1-H-5
orders at the commencement of the Reduction and
(ii) are placed into active service within twelve (12)
months of the commencement of the Reduction;
1-H-5-b-(3)-(b) Initiate a scheduled Small Jet
Round Trips in any Market operated by the
Company at any time during the twenty-four (24)
months preceding the Reduction unless the
Company demonstrates that increased Round Trips
initiated in the Market instead of the Small Jet
Round Trip would not pass the BIRR Test; or
1-H-5-b-(3)-(c) Increase the number of Small Jet
frequencies, Small Jet block hours or Small Jet
ASMs on any Route operated by the Company at
any time in the twenty-four (24) months preceding
the Reduction, unless the Feeder Carrier provided
Feeder Carrier Small Jet service on the Route for at
least six (6) months immediately prior to the
Reduction and the Company did not serve the Route
during that six-month period.
1-H-5-c- Pilot Protection during a Reduction
Any pilot who is surplussed pursuant to Section 8-K of the
Agreement during a Pay Protection Period who lacks the
seniority to hold an assignment in the same or a higher-paying
pilot position (status and equipment) that he held
prior to the surplus notice, and who bumps into a lower-paying
pilot assignment pursuant to Section 8-K of the
Agreement, will continue to be paid at the hourly pay rate
applicable to his pre-surplus assignment for all work
performed each month in his post-surplus assignment
until the earlier of:
1-H-5-c-(1) The date he is activated in an assignment
with an equal or greater hourly pay rate than his pre-surplus
assignment;
1-H-5-c-(2) The date he passes up an opportunity to
bid for an available vacancy that his seniority would
permit him to be awarded with an hourly pay rate equal
to or greater than his pre-surplus assignment (in which
case pay protection will be discontinued on the first of
the month following the publication of the award which
caused him to lose his pay protection);
1-H-5-c-(3) The first of the month following the date he
retires, provided a pilot who reaches age sixty (60) and
bumps to a Second Officer Position will be pay
protected at the Second Officer rate; or
Section 1-H-5 Page 23
1-H-5-c-(4) Eighteen (18) months following the date he
is activated into a lower-paying pilot position in
connection with Section 8-K of the Agreement.
A Pay Protection Period means and includes any
period between (i) the first day of a month in which the
Company has failed to reach the minimum block hour
guarantee described in paragraph 1-H-4 and (ii) the
last day of the next occurring month by which the
Company has met the minimum block hour guarantee
described in paragraph 1-H-4 each month for the
preceding twelve (12) consecutive months.
1-H-5-d- Circumstances beyond the Company's
Control
In addition to the Company's ability to reduce flight
operations under the terms and conditions described in
paragraph 1-H-5-a (Substantial Economic Downturn) and
1-H-5-b (Reduction Limits) above, the commitments and
protections described in paragraph 1-H-1 (Furlough
Protection), 1-H-2 (Active Status Protection), 1-H-3 (Fleet
Size Guarantee), 1-H-4 (Block Hours Guarantee) and 1-H-5-
c (Pay Protection) above may be modified if and only to
the extent that the Company demonstrates that any such
modification is a direct result of a circumstance beyond
the Company's control. The phrase "circumstance beyond
the Company's control" means only a natural disaster, a
labor dispute within the Company involving a cessation of
work, the grounding of a substantial number of Company
Aircraft by a government agency, a reduction in flight
operations directly caused by a supplier's inability to
provide sufficient aircraft, fuel or other critical materials
for the Company's operations, revocation of the
Company's operating certificate(s), a declared or
undeclared war emergency that causes the Company to
cease conducting a substantial portion of its flight
operations, compulsion by a domestic or foreign
government agency, or court or legislative action. For
purposes of clarification, the phrase "circumstance
beyond the Company's control" does not include any
economic or financial considerations including, but not
limited to, the price of fuel, aircraft or other supplies, the
cost of labor, the level of revenues, the state of the
economy, the financial state of the Company, or the
relative profitability or unprofitability of the Company's
then-current operations in the absence of the
circumstances described in the preceding sentence.
Page 24 Section 1-I
1-I- Labor Disputes
1-I-1- The Agreement contains no contractual prohibition
whatsoever on the ability of ALPA and the United Pilots to
honor lawful picket lines.
1-I-2- ALPA and/or the United Pilots are not prohibited from:
1-I-2-a- Refusing to layover at a struck hotel or other
struck facility;
1-I-2-b- Refusing to deadhead on carriers whose
employees are engaged in a lawful strike, as long as
alternatives are reasonably available; and
1-I-2-c- Engaging in a concerted refusal, called by the
Association, to perform pilot work or services on flights
where the Company, pursuant to an agreement or
arrangement with another air carrier, is performing that air
carrier's flying in response to a labor dispute and that air
carrier's employees are engaged in a lawful strike.
1-J- Foreign Ownership and Domiciles
1-J-1- The Company shall continue to be a Domestic Air
Carrier subject to the Railway Labor Act, as amended.
1-J-2- The Company shall maintain its world headquarters,
executive offices, and offices for senior Flight Operations
personnel in the fifty United States.
1-J-3- Neither the Company nor any Affiliate (other than a
Feeder Carrier) shall open, establish or maintain any
additional pilot domicile other than a TDY domicile, outside
the fifty United States without the consent of the Association.
1-K- Review Committee
1-K-1- A standing committee, consisting of two (2)
Association representatives and two (2) Company
representatives (plus additional representatives if deemed
appropriate by the Association and the Company) (the
"Related Carrier Review Committee" or "RCRC") shall be
maintained by the parties. The RCRC may establish such
subcommittees as it deems appropriate. The RCRC and its
subcommittees will meet as often as they deem necessary,
but no less than quarterly, in order to implement and monitor
compliance with this Section 1.
Section 1-K-2 Page 25
1-K-2- The Company shall provide the RCRC, on a monthly
basis, all information necessary to monitor and enforce the
terms and conditions established in Section 1 of the
Agreement. When this information involves proprietary,
sensitive or confidential information concerning either the
Company or any other carrier, the RCRC will review such
information under a confidentiality agreement with the same
terms as the confidentiality agreement currently in effect
between the Company and the Association with such
modifications, if any, as are acceptable to the Association
and Company.
1-K-3- The RCRC shall review all new and modified
agreements concerning the Company's relationships with
other air carriers as governed by this Section 1 in order to
ensure compliance with the terms of this Section 1. In
reviewing agreements with Feeder Carriers, the RCRC shall
make such recommendations to the Company as the RCRC
deems appropriate for the purpose of strengthening the
Company's contractual relationships with Feeder Carriers
and protecting the Company's feed.
1-K-4- The parties will utilize appropriate aspects of the
NPDM procedures currently utilized by the System Schedule
Committee in connection with a review of the Feeder Carriers
aimed at ensuring that all Feeder Carriers maintain the
highest possible quality assurance and flight safety programs
and provide a product that meets the Company's high quality
standards.
1-L- Remedies
1-L-1- A grievance filed by the Association alleging a
violation of Section 1 of the Agreement, shall, at the request
of either party, bypass the initial steps of the grievance
process and shall be submitted and heard on an expedited
basis directly before the System Board of Adjustment sitting
with a neutral arbitrator. The dispute shall be heard by the
System Board of Adjustment no later than fifteen (15) days
following the submission of the grievance to the System
Board and decided no later than twenty-one (21) days after
such submission, unless the parties agree otherwise in
writing.
Page 26 Section 1-L-2
1-L-2- If the System Board decides that the Company has
violated any part of Section 1, the System Board will direct
the Company to comply with the Agreement and will fashion
an appropriate remedy for the harm caused by the
Company's failure to comply with the Agreement.
1-M- Definitions
The following definitions shall apply to the capitalized terms
in Section 1 of the Agreement:
1-M-1- "Active Fleet" means the Narrowbody and Widebody
aircraft owned or leased by the Company or its Parent (other
than aircraft carried on the Company's books as retired in
accordance with generally accepted accounting principles or
leased to a third party for more than thirty (30) days) and
reported as the Company's system fleet in the Company's
internal fleet planning documents, annual reports and public
filings under the securities laws. For purposes of clarification,
the Company's Active Fleet in any month will be limited to the
Company's in-schedule aircraft plus, in accordance with the
Company's normal and historical practice as of the Effective
Date, a reasonable number of spare aircraft, aircraft
undergoing maintenance, aircraft undergoing reconfiguration,
and aircraft out of service on a short-term basis.
1-M-2- " Affiliate" of Entity A means, any other Entity which
directly or indirectly Controls, is Controlled by or is under
common Control with Entity A.
1-M-3- "Average Utilization Rate" means on average ten
(10) block hours per each Active Fleet Aircraft per day.
1-M-4- "Base Internal Rate of Return" or "BIRR" means the
discount rate at which the net present value of the stream of
Cash Flows generated by the Capital Resources measured
by the Company's customary methods and time periods,
equals zero:
1-M-4-a- "Cash Flow" means the after-tax difference
between:
1-M-4-a-(1) The actual or reasonably projected
revenues generated by operating the applicable Round
Trip (including the point to point segment revenues and
all beyond revenues not otherwise carried by the
Company's flight operations); and
1-M-4-a-(2) The fully allocated expenses incurred to
produce those revenues (including the actual or
Section 1-M-4-b Page 27
reasonably projected cost of operating the Round Trip
and a reasonably allocated portion of the beyond
expenses attributable to the applicable Round Trip
including flight variable, overhead, ownership and
variable beyond traffic costs).
1-M-4-b- "Capital Resources" means the assets
necessary to operate the Round Trip consisting of the cost
of the aircraft and all supporting infrastructure such as
gates, slots, ground equipment, spare parts and spare
aircraft that are reasonably allocated to the Round Trip.
1-M-4-c- When measuring the rate of return of a Round
Trip, revenues and costs associated with connecting
traffic will be allocated to the Company Round Trip using
the established Company prorate method. Further, where
appropriate the revenues and costs for operating the
aircraft used in the Round Trip over the course of the
aircraft day or international flight cycle as applicable may
be utilized as part of determining the Cash Flow for that
Round Trip. This would include applying the BIRR Test to
a Non-Stop where no Round Trip exists for the operation
to be measured.
1-M-5- "Base Internal Rate of Return Test" or "BIRR Test"
means a comparison of the BIRR to the Hurdle Rate. If the
BIRR is less than the Hurdle Rate on the operation to be
measured, the BIRR Test is failed.
1-M-6- "Company" means United Air Lines, Inc.
1-M-7- "Company Aircraft" includes all aircraft owned or
leased by the Company or a Company Affiliate. Company
Aircraft do not include aircraft that have been sold, leased or
transferred in accordance with Section 1-B-4-a above.
1-M-8- "Control": Entity A shall be deemed to ''Control''
Entity B if Entity A, whether directly or indirectly,
1-M-8-a- owns securities that constitute, are exercisable
for or are exchangeable into thirty (30%) or more of (i)
Entity B's outstanding common stock or (ii) securities
entitled to vote on the election of directors of Entity B; or
otherwise owns thirty percent (30%) or more of the Equity
of Entity B; or
1-M-8-b- maintains the power, right, or authority--by
contract or otherwise--to direct, manage or direct the
management of all or substantially all of Entity B's
Page 28 Section 1-M-8-c
operations or provides all or substantially all of the
controlling management personnel of Entity B; or
1-M-8-c- maintains the power, right or authority to
appoint or prevent the appointment of a majority of Entity
B's Board of Directors or similar governing body; or
1-M-8-d- maintains the power, right or authority to
appoint a minority of Entity B's Board of Directors or
similar governing body, if such minority maintains the
power, right or authority to appoint or remove any of Entity
B's executive officers or any committee of Entity B's Board
of Directors or similar governing body, to approve a
material part of Entity B's business or operating plans or
to approve a substantial part of Entity B's debt or equity
offerings.
1-M-9- "Domestic Air Carrier" means an Air Carrier as
defined in 49 U.S.C. Section 40102(a)(2).
1-M-10- "Entity" means any business form of any kind
including without limitation any natural person, corporation,
company, unincorporated association, division, partnership,
group of Affiliated Entities acting in concert, trustee, trust,
receivership, debtor-in-possession, administrator or
executor.
1-M-11- "Equity" means: (i) common stock or other
securities that carry the right to vote for one or more
members of a board of directors or similar governing body, or
shares or interests in a partnership or limited partnership
which shares or interests have general voting rights (all of
the foregoing being collectively referred to as "Common
Equity") and (ii) securities that are then currently or in the
future exchangeable into, exercisable for, or convertible into
Common Equity.
1-M-12- "Feeder Carrier" means a Domestic Air Carrier that,
when engaged in code sharing with the Company:
1-M-12-a- Does not operate any aircraft that utilizes an
engine with an external propeller ("Turbo/Prop Aircraft")
other than Turbo/Prop Aircraft that are certificated for
seventy-eight (78) or fewer seats and have a maximum
permitted gross takeoff weight of less than seventy-five
thousand (75,000) pounds; and
1-M-12-b- Does not operate any aircraft that utilizes a
turbine-driven engine without an external propeller ("Jet
Aircraft"), other than Small Jets.
Section 1-M-13 Page 29
1-M-13- "Feeder Flying" means flight operations conducted
by a Feeder Carrier pursuant to paragraph 1-C-1 and flight
operations conducted by AWAC under paragraph 1-C-1-f-(4).
1-M-14- "Feeder Carrier Ratio" means a relationship in any
calendar quarter between ASMs scheduled in Feeder Flying
and ASMs scheduled in the Company's Large-Gauge
Narrowbody flying, equal to 7.7 + (.09 x (SJ-21)), expressed
as a percentage and rounded to the nearest one tenth of a
percent, where "SJ" is the average number of Small Jets
operated in Feeder Flying by Feeder Carriers as a group in
that calendar quarter.
1-M-15- "Foreign Air Carrier" means an air carrier that is not
a Domestic Air Carrier.
1-M-16- "Gateway" (used with or without capitalization)
means an airport in the United States from which the
Company engages in non-stop flights to and from foreign
points.
1-M-17- "Key City" means DCA, MIA, LGA, EWR, JFK, and
SEA and any other city that is identified as a hub (currently
IAD, ORD, DEN, SFO and LAX) in the Company's Annual
Report on Form 10-K.
1-M-18- "Hurdle Rate" means the internal rate of return
established by the Company for allocating capital resources
for airline related expenditures.
1-M-19- "Industry Standard Interline Agreement" means an
agreement or other arrangement between two carriers or
among three or more carriers, such as the International Air
Transport Association's "Multilateral Interline Traffic
Agreements," establishing rights and obligations relating to
the transportation of through passengers and/or through
shipments by the party carriers.
1-M-20- "Joint International Non-Stop Market" means a
Non-Stop Market in which parties to an International Code
Share Agreement may apply their respective designator
codes to each other's flight(s).
1-M-21- "Large-Gauge Narrowbody Aircraft" means solely
for the purposes of Section 1, the Company's B-737, A-319,
A-320, B-727 and B-757 aircraft plus any future aircraft with
single aisle configuration and a certificated seating capacity
in the United States of at least one hundred (100) seats.
1-M-22- "Market" means a pair of airports, e.g., ORD-MSP.
Page 30 Section 1-M-23
1-M-23- "Narrowbody Aircraft" means solely for the
purposes of Section 1 the Company's Small-Gauge and
Large-Gauge Narrowbody Aircraft.
1-M-24- "Non-Stop" means a flight in a Market that does not
include a scheduled intervening take off and landing.
1-M-25- ''Parent'' refers to UAL Corp. (''UAL'') or any other
Entity that has majority control of the Company, whether
directly or indirectly through the majority control of other
Entities that have majority control the Company.
1-M-26- "Round Trip" means a pair of flights to and from one
city in a Market to the other, e.g. ORD-STL-ORD.
1-M-27- "Small-Gauge Narrowbody" means solely for the
purpose of Section 1 aircraft with seventy (70) to ninety-nine
(99) seats.
1-M-28- "Small Jets" means Jet Aircraft that are certificated
in the United States of America for fifty (50) or fewer seats
and a maximum permitted gross takeoff weight of less than
sixty thousand (60,000) pounds. If an FAA-certificated small
jet aircraft type (e.g., an RJ-50-100) meets the requirements
of this definition when first placed into operation by a Feeder
Carrier but is subsequently certificated for operation in the
United States with a maximum seating capacity in excess of
50 seats, the Small Jet aircraft type may continue to be
operated by any Feeder Carrier as long as all Feeder
Carriers operate such aircraft type with no more than 50
seats at all times.
1-M-29- "United States" when referring to geographical
extent means only the States of the United States of America
and the District of Columbia.
1-M-30- "United States and Territories" means the United
States and its territories and possessions including but not
limited to the Commonwealth of Puerto Rico.
1-M-31- "Widebody Aircraft" means, solely for the purpose
of Section 1, the Company's B-767, DC-10, B-777, B-747 and
B-747-400 aircraft and any future aircraft with a multiple-aisle
seating configuration and with a maximum certificated gross
takeoff weight in the United States of no less than three
hundred twenty thousand pounds.
Section 2-A Page 31
Section 2
Definitions
2-A- Pilot
"Pilot" means Captain, First Officer, International Relief Pilot
and Second Officer on the United Air Lines Second Officer
Eligibility Seniority List, whether or not the pilot is assigned
to the Company's Shuttle operation, and including those
Second Officers unable to perform pilot duties under FAR 121
who will also be referred to as "pilot" for purpose of this
Agreement.
2-B- Captain
"Captain" means a pilot who is in command of the aircraft and
its crew members while on duty and who is responsible for
the manipulation of or who manipulates the controls of an
aircraft including take-off and landing of such aircraft, and
who is properly qualified to serve as and holds a currently
effective airman's certificate authorizing him to serve as such
pilot.
2-C- First Officer
"First Officer" means a pilot who is second in command and
any part of whose duty is to assist or relieve the Captain in
the manipulation of the controls of an aircraft including take-off
and landing of such aircraft, and who is properly qualified
to serve as and holds a currently effective airman's certificate
authorizing him to serve as such First Officer. On aircraft
operated with a Captain and First Officer only, the First
Officer shall inspect the aircraft before flight.
2-D- International Relief Pilot
An "International Relief Pilot" is a pilot who shall be qualified
to provide relief, on those flights on which he is required, at
the Captain, First Officer and Second Officer stations. Such
qualifications shall be established by the Company to permit
him to accomplish:
2-D-1- Pre-flight, post-flight and en route First Officer
duties, not including take-off or landing of the aircraft.
2-D-2- All Second Officer duties.
Page 32 Section 2-D-3
2-D-3- Any other duties assigned to him by the Company or
the pilot in command.
2-D-4- An International Relief Pilot will be third in command
on a flight on which he serves.
2-E- Second Officer
"Second Officer" means a pilot who is third in command (or
fourth in command in 4-man crew) whose duties as a member
of the flight crew are to assist the Captain, First Officer and
International Relief Pilot in the analysis, operation and
monitoring of the mechanical and electrical systems of the
aircraft, to relieve other flight crew members and to inspect
the aircraft before flight and who is properly qualified to serve
as and holds currently effective airman's certificates
authorizing him to serve as such Second Officer, including a
Commercial Pilot's License and Instrument Rating and Flight
Engineers certificate.
2-F- Lineholder
"Lineholder" means a Captain, First Officer, International
Relief Pilot or Second Officer who is assigned to a line of
flying (not including a secondary line) in his assigned status
and equipment type for the month as a result of the
"Schedule Selection Procedure."
2-G- Reserve
"Reserve" means a Captain, First Officer, International Relief
Pilot or Second Officer who is not a lineholder.
2-H- Line of Flying
"Line of Flying" means a planned pattern of trip sequences
and intervening days off constructed so as to not exceed
eighty-one (81) hours of credited flight time.
2-I- Secondary Line
A "Secondary Line" is composed of flying which is
unassigned after the assignment of lines of flying for a month
and which is then combined into a month's schedule for
assignment to reserve pilots.
Section 2-J Page 33
2-J- Allocation of Flying
"Allocation of Flying" means the establishment of hours of
flying in an equipment type at a domicile.
2-K- Assignment of Flying
'Assignment of Flying" means the designation of specific trips
to be flown in an equipment type from a domicile.
2-L- Pilot Status
"Status" means a pilot's assigned classification as either
Captain, First Officer, International Relief Pilot or Second
Officer.
2-M- Open Flying
"Open Flying" means trips and portions of trips which, after
the schedule selection process, remain unassigned or
become unassigned due to any pilot absence.
2-N- Flight Time
"Flight Time" (block-to-block) means the time from the
moment an aircraft moves from the blocks, under its own
power or under tow, for the purpose of flight until the time the
aircraft comes to rest at the unloading point at the next point
of landing.
2-O- Month
"Month" means that for pilot scheduling and pay purposes the
period from the first day of, to and including the last day of
each of twelve (12) 30 or 31 day periods.
Prior to December 31, 2000, the Company will publish the
schedule of calendar months which will remain in effect for
the term of the Agreement. In leap year, the Company may
modify one (1) 30 day month to a 31 day month.
2-P- Domicile
"Domicile" means a geographical location designated by the
Company where pilots are based.
Page 34 Section 2-Q
2-Q- Pilot's Schedule
"Pilot's Schedule" means a monthly work assignment and
associated trip information which is published by the
Company and assigned to a pilot.
2-R- Trip or Trip Sequence
"Trip or Trip Sequence" is a series of flight segments, starting
with the initial departure from the pilot's domicile and ending
with the final arrival at the pilot's domicile, which are
combined as a package for preparation of pilot schedules or
for assignment to a pilot.
2-S- Hours Flown
"Hours Flown" means the actual flight time from block-to-block
recorded cumulatively on a stop-to-stop basis.
2-T- Geographical Relocation of Assignments
"Geographical Relocation of Assignments" is that process
whereby pilot assignments at a domicile, associated with
flying which have been and can (based on available entries of
the equipment at the domicile) continue to be flown by pilots
at that domicile, are relocated to another domicile(s) from
which the flying can also be accomplished.
2-U-
"He", "Him", "His" - The masculine pronouns used herein
shall include the feminine unless specifically excluded.
2-V- Pilot Concurrence
In any assignment where the Agreement requires pilot
concurrence, pilot concurrence will be construed to mean
that the pilot will be advised his concurrence is required and
he will accept or reject any offered options prior to being
scheduled for such assignment. The Company may request a
pilot, and the pilot may concur, to waive only those specific
provisions of the Agreement which specify a waiver is
permissible.
2-W- Equipment Domicile
A domicile wherein pilots hold assignments in a designated
equipment type.
Section 2-X Page 35
2-X- Student Pilot
A "Student Pilot" is an individual who reports to United
Airlines for initial training as a United Airlines flight officer in
contemplation of continuing employment as a United Airlines
pilot. Student Pilots shall be employees and pilot seniority
shall commence as of the first day of training per Section 6 of
this Agreement.
2-Y- Only Reserve Available
A reserve pilot will be considered to be the only reserve
available if he falls within either of the following situations:
2-Y-1- Time-critical departure. A reserve can be assigned to
an open flight as the only reserve available if (1) that
assignment can be made within his applicable duty and flight
time limitations and (2) assigning another reserve would
cause the operation in question to be delayed, further
delayed or canceled.
2-Y-2- Planned coverage. A reserve can be assigned to an
open flight as only reserve available in order to avoid junior
manning.
2-Y-3- In the event that it becomes necessary to use an
inbound reserve to cover an open trip and there is more than
one reserve legal and available per a. above for coverage of
the open trip, the reserve whose arrival time is closest to the
report time but not less than thirty (30) minutes before the
departure of the open trip will be considered the only reserve
available for the assignment.
2-Z- Mainline
All of the Company's operations other than the Shuttle
operation as defined in Letter 00-XX.
Page 36 Section 2-Z
This Page Intentionally Left Blank
Section 3-A Page 37
Section 3
Compensation
3-A- Longevity For Pay Purposes
3-A-1- Longevity as a pilot with the Company shall Commencement
commence to accrue as of the date on which a pilot is first of Longevity
released from technical training at DENTK (excluding IOE
preparation or any similar training) and shall continue to
accrue except as otherwise provided in sub-paragraphs 2
and 3 of this Paragraph. Longevity increases will be paid on
the first of that month for longevity dates from the first
through the twentieth of the month, and on the first of the
following month for the longevity dates after the twentieth.
3-A-2- Pilots shall not accrue longevity as a pilot during any
period that seniority ceases to accrue. Once longevity
commences, as provided by 3-A-1, above, pilots shall accrue
longevity as a pilot during any period that seniority accrues,
except that longevity shall not accrue during any period of
furlough according to the provisions of Section 7-E.
3-A-3- Any pilot who resigns from the service of the
Company or is discharged for just cause or loses seniority as
provided in Paragraph 7-D of Section 7 shall forfeit all
longevity accrued to the date of such resignation or
discharge.
3-B- Hourly Rates
3-B-1- The hourly rates for Captains, First Officers, Hourly Rates
International Relief Pilots and Second Officers who are on
the Second Officers Seniority Eligibility List shall be as
follows. The hourly rates, overrides, and incentive pay
established in this Section 3 shall govern all aspects of pilot
compensation.
Page 38 Section 3-B-1-a
3-B-1-a-
CAPTAINS
B74- DC-10- 767/ A319/ B300/
400 B747 B777 F DC10 757 A320 B727 500 B737
1st yr 280.18 266.27 247.57 240.88 219.05 202.88 193.73 182.56 172.41 170.74
2nd yr 280.18 266.27 248.98 242.87 220.86 204.43 195.34 184.22 173.90 172.23
3rd yr 280.18 266.27 250.27 244.67 222.50 206.05 196.93 185.80 175.44 173.77
4th yr 280.18 266.27 251.64 246.61 224.26 207.69 198.56 187.39 177.09 175.43
5th yr 280.18 266.27 253.07 248.61 226.09 209.33 200.21 189.07 178.75 177.10
6th yr 280.18 266.27 254.36 250.42 227.73 210.88 201.75 190.60 180.34 178.69
7th yr 280.93 266.97 255.77 252.14 229.29 212.28 203.22 192.17 181.93 180.29
8th yr 281.74 267.73 257.47 254.24 231.20 214.07 204.93 193.77 183.55 181.90
9th yr 282.42 268.40 258.89 255.98 232.78 215.48 206.37 195.24 184.93 183.28
10th yr 283.27 269.21 261.00 258.62 235.19 217.70 208.58 197.44 187.22 185.58
11th yr 283.95 269.85 262.99 261.19 237.52 220.05 210.80 199.64 189.38 187.74
12th yr 285.97 270.60 265.36 263.78 239.88 222.11 212.99 201.82 191.64 190.00.
3-B-1-b- First Officers
3-B-1-b-(1)
The following First Officer rates will applyto individuals employed as a First Officer at any time
during the period April 13, 2000 up to, and including,
the date upon which this Agreement is signed (DOS).
These rates will apply for all retroactive pay
calculations, and a First Officer will continue to receive
pay after the DOS according to this table until he
receives his next longevity increase. (All First Officers
being paid according to the "12th yr" rates listed below
on DOS will continue to receive this hourly rate until
May 1, 2001). Upon reaching his next longevity date
after the DOS, the First Officer will be entitled to the
rates listed in 3-B-1-b-(2). If, however, the pilot's next
longevity date after DOS is on or after May 1, 2001, he
will receive pay according to the rates in effect as of
May 1, 2001. Additionally, if a pilot becomes eligible for
the rates listed in 3-B-1-b-(2), but such rate is less than
the rate he received prior to reaching his longevity
date, he will continue to be paid at the hourly rate he
received on the DOS:
Section 3-B-1-a Page 39
B74- DC-10- 767/ A319/ B300/
400 B747 B777 F DC10 757 A320 B727 500 B737
1st yr 61.11 58.13 58.00 54.78 54.78 52.23 49.19 45.58 45.58 45.58
2nd yr 117.39 111.56 110.42 109.30 99.40 91.98 87.89 82.91 78.25 77.49
3rd yr 141.91 134.88 133.06 132.11 120.14 111.25 106.34 100.34 94.72 93.82
4th yr 165.81 157.57 155.16 154.38 140.40 131.07 124.88 117.30 111.74 110.70
5th yr 169.83 161.40 158.87 158.12 143.81 134.17 127.90 120.24 114.56 113.50
6th yr 178.85 170.00 163.99 162.03 147.35 137.49 131.11 123.32 117.59 116.52
7th yr 182.91 173.83 168.17 166.41 151.34 141.16 134.70 126.82 121.00 119.91
8th yr 187.04 177.75 172.03 170.34 154.91 144.51 137.89 129.82 123.89 122.77
9th yr 191.12 181.65 174.31 172.04 156.45 145.87 139.24 131.20 125.21 124.10
10th yr 193.82 184.23 177.02 174.83 159.00 148.24 141.59 133.46 127.51 126.39
11th yr 196.54 186.80 179.15 176.83 160.82 150.00 143.32 135.17 129.17 128.05
12th yr 199.27 189.38 181.28 178.85 162.65 151.70 145.00 136.85 130.89 129.77
3-B-1-b-(2)
The following First Officer rates will applyto First Officers who first begin to accrue longevity as
pilot after the DOS and as provided in 3-B-1-b-(1)
above:
B74- DC-10- 767/ A319/ B300/
400 B747 B777 F DC10 757 A320 B727 500 B737
1yr 45.58 45.58 45.58 45.58 45.58 45.58 45.58 45.58 45.58 45.58
2yr 116.84 111.03 103.83 101.28 92.10 85.25 81.46 76.82 72.52 71.82
3yr 168.11 159.76 150.16 146.80 133.50 123.63 118.16 111.48 105.26 104.26
4yr 176.79 168.01 158.79 155.61 141.51 131.05 125.29 118.24 111.74 110.70
5yr 179.46 170.54 162.09 159.24 144.81 134.07 128.23 121.10 114.49 113.43
6yr 182.68 173.61 165.84 163.27 148.48 137.50 131.54 124.27 117.58 116.51
7yr 186.40 177.14 169.71 167.30 152.14 140.85 134.84 127.50 120.71 119.62
8yr 190.17 180.72 173.79 171.61 156.06 144.49 138.33 130.80 123.89 122.78
9yr 191.20 181.71 175.27 173.30 157.59 145.88 139.71 132.18 125.20 124.08
10yr 192.48 182.93 177.35 175.73 159.81 147.93 141.73 134.16 127.22 126.10
11yr 193.65 184.04 179.36 178.13 161.99 150.08 143.77 136.15 129.16 128.04
12yr 195.32 184.82 181.24 180.16 163.84 151.70 145.47 137.84 130.89 129.77.
Page 40 Section 3-B-1-d
3-B-1-c- Second Officers
B747 DC10-F DC10 B727
1yr 45.58 45.58 45.58 45.58
2yr 79.40 77.72 70.68 58.95
3yr 89.99 88.09 80.10 66.89
4yr 131.25 128.49 116.85 97.63
5yr 134.87 132.02 120.05 100.40
6yr 145.05 135.22 122.97 102.92
7yr 148.95 137.67 125.19 104.92
8yr 152.86 139.07 126.47 106.00
9yr 155.86 140.27 127.56 106.99
10yr 158.38 141.73 128.89 108.20
11yr 161.94 143.13 130.16 109.40
12yr 165.80 144.55 131.45 110.59
3-B-1-d- The following International Overrides will be
paid for actual flight hours flown in the international
operation and will be in addition to any other hourly and/or
incentive pay. First Officers who have been activated into
their assignments on or before date of signing (DOS) will
be paid the First Officer Monthly International Override or Incumbent First
the International Hourly Override for actual hours flown in Officer receives
the international operation, whichever is greater. A First greater of hourly
Officer who has been activated into his assignment on or or monthly
before the DOS will also continue to receive the greater of International
the First Officer Monthly International Override or the Override
International Hourly Override for actual hours flown in the
international operation if his next assignment after the
DOS is First Officer in the same equipment type at a
different domicile (lateral award). First Officers activated
into their assignments after DOS will be paid the
International Hourly Override for actual hours flown in the
international operation.
Section 3-B-2 Page 41
FIRST OFFICER MONTHLY INTERNATIONAL OVERRIDE
B-747-400 $376.16
B-747 $358.02
B-777 $463.69
DC-10 $500.57
B-767 $409.11
International Hourly Override
Captain $8.00/Hr.
First Officer $6.00/Hr.
Second Officer $4.00/Hr.
3-B-2-
Effective May 1, 2001 the hourly rates for Captains,First Officers, International Relief Pilots and Second Officers
who are on the Second Officers Seniority Eligibility List shall
be as follows:
CAPTAINS
B74- DC-10- 767/ A319/ B300/
400 B747 B777 F DC10 757 A320 B727 500 B737
1yr 295.91 279.04 258.71 251.72 228.91 212.01 202.45 190.77 180.17 178.43
2yr 295.91 279.04 260.19 253.80 230.80 213.63 204.13 192.51 181.73 179.98
3yr 295.91 279.04 261.53 255.68 232.52 215.32 205.79 194.16 183.33 181.59
4yr 295.91 279.04 262.97 257.71 234.36 217.03 207.49 195.83 185.06 183.33
5yr 295.91 279.04 264.46 259.80 236.26 218.75 209.22 197.58 186.80 185.07
6yr 295.91 279.04 265.81 261.69 237.98 220.37 210.83 199.18 188.45 186.73
7yr 296.72 279.78 267.28 263.49 239.61 221.83 212.37 200.82 190.12 188.41
8yr 297.56 280.58 269.06 265.68 241.61 223.70 214.16 202.49 191.81 190.08
9yr 298.28 281.28 270.54 267.49 243.26 225.17 215.65 204.03 193.25 191.53
10yr 299.18 282.13 272.74 270.26 245.77 227.50 217.97 206.33 195.65 193.93
11yr 299.90 282.80 274.83 272.94 248.21 229.95 220.29 208.62 197.90 196.19
12yr 302.03 283.58 277.30 275.65 250.67 232.11 222.57 210.90 200.26 198.55
Page 42 Section 3-B-2
FIRST OFFICERS
B74- DC-10- 767/ A319/ B300/
400 B747 B777 F DC10 757 A320 B727 500 B737
1yr 47.63 47.63 47.63 47.63 47.63 47.63 47.63 47.63 47.63 47.63
2yr 123.40 116.36 108.50 105.83 96.24 89.08 85.12 80.28 75.78 75.05
3yr 177.55 167.43 156.92 153.41 139.51 129.19 123.47 116.50 110.00 108.95
4yr 186.72 176.08 165.93 162.61 147.88 136.95 130.93 123.57 116.77 115.68
5yr 189.53 178.73 169.39 166.40 151.33 140.11 134.00 126.55 119.64 118.54
6yr 192.94 181.94 173.31 170.62 155.16 143.68 137.46 129.86 122.87 121.75
7yr 196.87 185.64 177.34 174.82 158.98 147.19 140.91 133.24 126.15 125.01
8yr 200.85 189.39 181.61 179.33 163.08 151.00 144.56 136.68 129.47 128.31
9yr 201.93 190.43 183.15 181.09 164.69 152.44 146.00 138.13 130.83 129.67
10yr 203.29 191.71 185.33 183.64 167.00 154.58 148.11 140.20 132.94 131.78
11yr 204.53 192.87 187.43 186.14 169.28 156.83 150.24 142.28 134.97 133.80
12yr 206.29 193.69 189.40 188.27 171.21 158.53 152.02 144.04 136.78 135.61
SECOND OFFICERS
B747 DC10-F DC10 B727
1yr 47.63 47.63 47.63 47.63
2yr 83.21 81.22 73.86 61.61
3yr 94.31 92.05 83.71 69.90
4yr 137.55 134.27 122.10 102.02
5yr 141.35 137.96 125.46 104.92
6yr 152.01 141.31 128.50 107.56
7yr 156.10 143.86 130.83 109.64
8yr 160.19 145.33 132.16 110.77
9yr 163.34 146.59 133.30 111.81
10yr 165.98 148.11 134.69 113.07
11yr 169.71 149.57 136.02 114.32
12yr 173.75 151.05 137.37 115.57
Effective May 1, 2002 the hourly rates for Captains, First
Officers, International Relief Pilots and Second Officers who
are on the Second Officers Seniority Eligibility List shall be
as follows:
Section 3-B-2 Page 43
CAPTAINS
B74- DC-10- 767/ A319/ B300/
400 B747 B777 F DC10 757 A320 B727 500 B737
1yr 312.53 292.44 270.35 263.05 239.21 221.55 211.56 199.36 188.28 186.46
2yr 312.53 292.44 271.89 265.22 241.18 223.24 213.31 201.17 189.90 188.08
3yr 312.53 292.44 273.30 267.19 242.98 225.01 215.05 202.90 191.58 189.76
4yr 312.53 292.44 274.80 269.30 244.90 226.80 216.83 204.64 193.39 191.58
5yr 312.53 292.44 276.36 271.49 246.89 228.59 218.63 206.47 195.20 193.40
6yr 312.53 292.44 277.77 273.46 248.68 230.29 220.32 208.14 196.93 195.13
7yr 313.40 293.22 279.31 275.34 250.39 231.82 221.92 209.85 198.68 196.89
8yr 314.27 294.05 281.17 277.64 252.49 233.77 223.79 211.60 200.44 198.64
9yr 315.03 294.79 282.71 279.53 254.20 235.31 225.36 213.21 201.94 200.15
10yr 315.98 295.67 285.02 282.42 256.83 237.74 227.77 215.61 204.45 202.66
11yr 316.74 296.38 287.19 285.22 259.38 240.30 230.20 218.01 206.81 205.02
12yr 318.99 297.20 289.78 288.05 261.95 242.55 232.59 220.39 209.28 207.49
FIRST OFFICERS
B74- DC-10- 767/ A319/ B300/
400 B747 B777 F DC10 757 A320 B727 500 B737
1yr 49.77 49.77 49.77 49.77 49.77 49.77 49.77 49.77 49.77 49.77
2yr 130.33 121.95 113.38 110.60 100.58 93.09 88.95 83.89 79.19 78.43
3yr 187.52 175.47 163.98 160.31 145.79 135.01 129.03 121.74 114.95 113.86
4yr 197.21 184.53 173.40 169.93 154.53 143.11 136.82 129.13 122.03 120.89
5yr 200.18 187.31 177.01 173.89 158.13 146.41 140.03 132.24 125.03 123.87
6yr 203.77 190.67 181.10 178.30 162.14 150.15 143.65 135.71 128.40 127.23
7yr 207.94 194.55 185.32 182.69 166.14 153.81 147.25 139.24 131.82 130.63
8yr 212.13 198.48 189.79 187.40 170.42 157.79 151.06 142.83 135.29 134.08
9yr 213.27 199.57 191.40 189.24 172.10 159.30 125.57 144.34 136.72 135.50
10yr 214.71 200.91 193.67 191.90 174.52 161.54 154.77 146.51 138.92 137.71
11yr 216.01 202.13 195.87 194.52 176.90 163.89 157.00 148.68 141.04 139.82
12yr 217.87 202.99 197.92 196.74 178.91 165.66 158.86 150.52 142.94 141.71
Page 44 Section 3-B-2
SECOND OFFICERS
B747 DC10-F DC10 B727
1yr 49.77 49.77 49.77 49.77
2yr 87.21 84.87 77.18 64.38
3yr 98.84 96.19 87.48 73.04
4yr 144.15 140.31 127.60 106.61
5yr 148.13 144.16 131.10 109.64
6yr 159.31 147.67 134.29 112.40
7yr 163.59 150.34 136.71 114.57
8yr 167.88 151.87 138.11 115.75
9yr 171.19 153.18 139.30 116.84
10yr 173.95 154.77 140.75 118.15
11yr 177.86 156.30 142.14 119.47
12yr 182.10 157.85 143.55 120.77
Effective May 1, 2003 the hourly rates for Captains, First
Officers, International Relief Pilots and Second Officers who
are on the Second Officers Seniority Eligibility List shall be
as follows:
CAPTAINS
B74- DC-10- 767/ A319/ B300/
400 B747 B777 F DC10 757 A320 B727 500 B737
1yr 330.08 306.49 282.51 274.88 249.98 231.52 221.08 208.33 196.75 194.85
2yr 330.08 306.49 284.13 277.15 252.04 233.29 222.91 210.23 198.45 196.54
3yr 330.08 306.49 285.60 279.21 253.91 235.13 224.73 212.03 200.20 198.30
4yr 330.08 306.49 287.17 281.42 255.92 237.01 226.59 213.85 202.09 200.20
5yr 330.08 306.49 288.80 283.71 258.00 238.88 228.47 215.76 203.99 202.10
6yr 330.08 306.49 290.27 285.77 259.87 240.65 230.23 217.51 205.80 203.92
7yr 331.01 307.30 291.88 287.74 216.66 242.25 231.91 219.30 207.62 205.75
8yr 331.92 308.18 293.82 290.13 263.85 244.29 233.86 221.13 209.46 207.58
9yr 332.72 308.95 295.43 292.11 265.64 245.89 235.50 222.80 211.03 209.16
10yr 333.72 309.88 297.84 295.13 268.39 248.44 238.02 225.31 213.65 211.78
11yr 334.52 310.62 300.12 298.06 271.05 251.11 240.56 227.82 216.11 214.24
12yr 336.90 311.48 302.82 301.01 273.74 253.46 243.06 230.30 218.69 216.82
Section 3-B-2 Page 45
FIRST OFFICERS
B74- DC-10- 767/ A319/ B300/
400 B747 B777 F DC10 757 A320 B727 500 B737
1yr 52.01 52.01 52.01 52.01 52.01 52.01 52.01 52.01 52.01 52.01
2yr 137.64 127.81 118.48 115.57 105.10 97.28 92.95 87.66 82.75 81.96
3yr 198.05 183.89 171.36 167.53 152.35 141.08 134.84 127.22 120.12 118.98
4yr 208.28 193.40 181.20 177.58 161.49 149.55 142.98 134.94 127.52 126.33
5yr 211.42 196.31 184.97 181.72 165.25 153.00 146.34 138.19 130.65 129.44
6yr 215.21 199.83 189.25 186.32 169.44 156.91 150.11 141.81 134.18 132.95
7yr 219.62 203.90 193.66 190.91 173.61 160.73 153.87 145.50 137.75 136.51
8yr 224.04 208.02 198.33 195.84 178.09 164.89 157.86 149.26 141.38 140.11
9yr 225.25 209.16 200.01 197.76 179.84 166.47 159.43 150.84 142.87 141.60
10yr 226.76 210.56 202.38 200.54 182.37 168.81 161.74 153.10 145.18 143.90
11yr 228.14 211.84 204.68 203.27 184.86 171.27 164.06 155.38 147.39 146.11
12yr 230.10 212.74 206.83 205.59 186.96 173.12 166.01 157.30 149.37 148.09
SECOND OFFICERS
B747 DC-10F DC-10 B727
1yr 52.01 52.01 52.01 52.01
2yr 91.40 88.69 80.65 67.28
3yr 103.59 100.52 91.41 76.33
4yr 151.08 146.63 133.34 111.41
5yr 155.25 150.65 137.00 114.57
6yr 166.97 154.31 140.33 117.45
7yr 171.45 157.10 142.87 119.73
8yr 175.95 158.70 144.32 120.96
9yr 179.41 160.07 145.57 122.10
10yr 182.31 161.74 147.08 123.47
11yr 186.41 163.34 148.54 124.84
12yr 190.84 164.95 150.01 126.20
Effective May 1, 2004 the hourly rates for Captains, First
Officers, International Relief Pilots and Second Officers who
are on the Second Officers Seniority Eligibility List shall be
as follows:
Page 46 Section 3-B-2
CAPTAINS
B74- DC-10- 767/ A319/ B300/
400 B747 B777 F DC10 757 A320 B727 500 B737
1yr 348.62 321.22 295.23 287.25 261.22 241.93 231.03 217.70 205.61 203.62
2yr 348.62 321.22 296.91 289.63 263.38 243.79 232.94 219.69 207.38 205.38
3yr 348.62 321.22 298.45 291.78 265.34 245.72 234.84 221.57 209.21 207.22
4yr 348.62 321.22 300.09 294.09 267.44 247.67 236.78 223.47 211.18 209.21
5yr 348.62 321.22 301.79 296.48 269.61 249.63 238.75 225.47 213.17 211.19
6yr 348.62 321.22 303.33 298.63 271.57 251.48 240.59 227.29 215.06 213.09
7yr 349.61 322.07 305.02 300.68 273.43 253.15 242.35 229.16 216.96 215.00
8yr 350.55 322.99 307.04 303.18 275.72 255.28 244.39 231.08 218.88 216.92
9yr 351.40 323.79 308.73 305.26 277.60 256.96 246.10 232.83 220.53 218.57
10yr 352.46 324.77 311.24 308.41 280.47 259.62 248.73 235.45 223.27 221.31
11yr 353.31 325.55 313.62 311.47 283.25 262.41 251.39 238.07 255.84 223.89
12yr 355.82 326.45 216.45 314.56 286.06 264.87 253.99 240.67 228.54 226.58
FIRST OFFICERS
B74- DC-10- 767/ A319/ B300/
400 B747 B777 F DC10 757 A320 B727 500 B737
1yr 54.35 54.35 54.35 54.35 54.35 54.35 54.35 54.35 54.35 54.35
2yr 145.37 133.95 123.81 120.77 109.83 101.66 97.14 91.61 86.48 85.65
3yr 209.17 192.73 179.07 175.07 159.20 147.43 140.90 132.94 125.53 124.33
4yr 219.98 202.69 189.36 185.57 168.75 156.28 149.41 141.01 133.26 132.01
5yr 223.29 205.74 193.30 189.89 172.69 159.89 152.92 144.41 136.53 135.27
6yr 227.30 209.44 197.77 194.71 177.06 163.97 156.87 148.20 140.22 138.94
7yr 231.97 213.70 202.38 199.50 181.43 167.96 160.80 152.05 143.95 142.66
8yr 236.62 218.02 207.25 204.65 186.11 172.31 164.96 155.98 147.75 146.42
9yr 237.90 219.21 209.01 206.66 187.93 173.96 166.61 157.63 149.30 147.97
10yr 239.50 220.68 211.49 209.56 190.58 176.41 169.02 159.99 151.71 150.38
11yr 240.96 222.02 213.89 212.42 193.17 178.98 171.45 162.37 154.02 152.69
12yr 243.03 222.96 216.13 214.84 195.38 180.91 173.48 164.38 156.09 154.75
Section 3-B-3 Page 47
SECOND OFFICERS
B747 DC10-F DC10 B727
1yr 54.35 54.35 54.35 54.35
2yr 95.79 92.68 84.28 70.30
3yr 108.57 105.04 95.53 79.76
4yr 158.34 153.23 139.34 116.42
5yr 162.71 157.43 143.17 119.73
6yr 174.99 161.26 146.64 122.74
7yr 179.69 164.17 149.30 125.12
8yr 184.40 165.84 150.82 126.41
9yr 188.03 167.28 152.12 127.59
10yr 191.07 169.01 153.70 129.03
11yr 195.36 170.69 155.22 130.46
12yr 200.02 172.38 156.76 131.88
3-B-3-
The rates stipulated in Section 3-B-1 and 3-B-2include the terrain pay differential heretofore paid by the
Company and as set forth in Decision 83 and such composite
rates shall be paid for all flying whether such flying is over
flat or mountainous terrain, on or off the Company's air
routes and recognizes the application of the traditional base,
hourly, mileage and gross weight pay factors.
3-B-4- Minimum Guarantee
3-B-4-a- Each pilot shall be paid for not less than Minimum
seventy-five (75) hours of pay credit each month (seventy-seven Guarantee 75
(77) hours in a flex month), unless he has an hours (77 in a flex
unpaid absence during that month. Further, any pay credit month) for all
which exceeds eighty-five (85) hours in any month shall pilots with a
not be paid, but shall be placed in a "bank", as provided in maximum of 85
3-I, below. hours pay per
month
3-B-4-b- A lineholder's salary each month shall be
determined as follows:
The Pay Credit Value of each pilot's assigned line shall be Determination of
determined as provided in Section 5-G-3, after taking into L/H's pay credit
consideration the effect of any carry-over trip from the value for the
prior month, including any reassignment accomplished month
under the provisions of Section 5-B-1-b. This pay credit
value may be increased and/or decreased due to (1)
Page 48 Section3-B-4-c
operational loss of flying, (2) reassignment, (3) voluntary
open flying and (4) credit produced by the Minimum
Schedule Provisions, Actual Credit Provisions or Actual
Flight Time Provisions of Section 5-G-3-e.
3-B-4-c- Lineholders assigned to a line of flying with a
flight time credit projection of less than seventy-five (75)
hours (seventy-seven (77) hours in a flex month) who trip
trade into a trip, or drop and subsequently pick up a trip,
the value of which is equal to or greater than the value of
the original trip shall not have his guarantee reduced
below seventy-five (75) hours (seventy-seven (77) hours
in a flex month).
3-B-4-d- Each reserve shall be paid for the greater of the
following:
3-B-4-d-(1) Seventy-five (75) pay credit hours, as
provided by "a" above, or
3-B-4-d-(2) The pay credit value of all trips flown in the Determination of
month as computed under the "Minimum Schedule reserve pay credit
Provisions, Actual Credit Provisions or Actual Flight value for the
Time Provisions'' of Section 5-G-3-e. Any pay credit month. Bank for
produced over eighty-five (85) hours shall not be paid reserves
in that month, but shall be placed in a ''bank'', as
described in ''3-I'', below.
3-B-4-d-(3) In a flex month, the seventy-five (75) pay Reserve minimum
credit hour minimum in Section 3-B-4-d-(1) above shall guarantee 77
be increased to seventy-seven (77) pay credit hours for hours in flex
all reserves in the fleet(s) that are designated for the month
flex month.
3-B-5- Monthly Line Guarantee
3-B-5-a- A lineholder shall be paid for the greater of the
following:
3-B-5-a-(1) Seventy-five (75) pay credit hours Lineholder
(seventy-seven (77) hours in a flex month), minimum
guarantee 77
3-B-5-a-(2) the Pay Credit Value of his schedule, as hours in flex
determined by 3-B-4 above, or month
3-B-5-a-(3) the Pay Credit Value of his schedule as Pay protection for
determined by 3-B-4 above, substituting the scheduled trips that depart
pay credit value of any trip pairing(s) in his line for on or after the
which he is available that is scheduled to depart on or 20th
Section 3-B-5-b Page 49
after the 20th day of the calendar month. This
projected line value is determined by adding the pay
credit already earned prior to the 20th day of the
calendar month to the scheduled Pay Credit Value of
the remaining trip pairing(s). The ''scheduled Pay
Credit Value'' of the remaining trip(s), for the purpose
of this provision is the Pay Credit Value of the trip(s) as
it existed prior to the 20th day of the calendar month.
3-B-5-b- In the event that a trip pairing is scheduled to
operate over the month end, the Pay Credit Value
protected under this provision is limited to that credit
which is scheduled to occur in the current month.
3-B-6- Any pay credit produced by the application of Section One hour pay for
3-J of the International Supplement shall be in addition to all fuel stops over
pay credit produced by the application of this Section 3-B. and above the
guarantee
3-B-7- Incentive Pay
In addition to the Monthly Pay Credit Value determined under
the provisions of this Section 3, each lineholder and reserve
will receive incentive pay over and above his Pay Credit
Value for the month under the following provisions:
3-B-7-a- Late Night Flying - Domestic trips that are
operated under the provisions of Section 5-G-1-f will
produce incentive pay in accordance with the following:
3-B-7-a-(1) Incentive pay for late night trips will be Pilots will receive
calculated based on the scheduled flight time of the trip incentive pay for
between the hours of 2300 and 0659 home domicile scheduled flight
time. time between
2300 and 0659
3-B-7-a-(2) Incentive pay will be credited to the pilot at actually flown
the time the trip departs on the initial segment of the
pairing. However, this incentive will not be paid if the
pilot subsequently removes himself from the trip prior
to departing on the Late Night Flight as defined in
Section 5-G-1-f-(1)-(b).
3-B-7-a-(3) The amount of incentive pay will be $15.00
for Captains, $10.00 for First Officers, and $5.00 for
Second Officers for each qualifying hour.
3-B-7-b- Operational Integrity
Page 50 Section 3-B-7-d
When a pilot reports for a trip under the provisions of If crew agrees to
Section 5-G-2-d, he shall receive five (5) hours of minimum rest at
incentive pay at his hourly rate, provided he reports for layover in order to
duty for the first segment following his rest period under make an on time
Section 5-G-2-d. In addition to this incentive pay, the pilot departure they will
shall receive pay and credit for the value of the original receive 5 hours of
scheduled ID or the pay and credit for the flying actually incentive pay
performed, whichever is greater.
3-B-7-c- Senior/Junior Man
A pilot who accepts an assignment under the provisions of
Section 20-H-14 shall receive incentive pay as follows:
3-B-7-c-(1) The pilot will be credited with incentive pay Pilot who accepts
equal to 50% of the pay credit value of the assigned assignment under
trip. However, the incentive pay will be reduced by the senior/junior man
difference in the value of the trip(s) dropped, if any, provision shall
compared to the value of the trip assigned. If incentive receive incentive
pay is reduced in accordance with the foregoing the pay up to 50% of
pilot's guarantee will be increased by the amount the the pay credit
incentive pay is reduced, not to exceed the pilot's flight value of the
pay credit projection before the assignment. assigned trip
3-B-7-c-(2) The flight pay credit projection of a pilot's
line of flying who accepts an assignment under Section
20-H-14 will be the value of his line immediately before
or immediately following the trip assignment and repair
of his line, if any, whichever is greater.
3-B-7-c-(3) The 50% incentive, adjusted for the
difference in trip value, if any, will be credited to the
pilot when he departs on the first segment of the trip
assigned to him under this provision.
3-B-7-d- Incentive pay will be separate and apart from
any other flight time credit and will not be subject to
reductions or offsets as provided for in any other section
of the Agreement.
3-B-7-e- Accrued incentive pay will be paid as a separate
line item on the pilot's monthly paycheck for the month in
which it is earned.
3-C- Unpaid absences
Unpaid absences shall reduce a pilot's salary as follows:
Section 3-C-1 Page 51
3-C-1- Lineholders
3-C-1-a- Pay credit hours which are reduced from those Unpaid absences
credited hours in excess of seventy-five (75) (seventy-seven for hours in
(77) hours in a flex month) shall be reduced on a excess of the
one-for-one basis; i.e., one (1) hour dropped shall reduce minimum
pay by one (1) hour. guarantee
reduced on an
hour for hour
basis
3-C-1-b- A pilot who is scheduled for fewer than seventy-five Formula for
(75) credit hours (seventy-seven (77) hours in a flex reduction of pay
month), whose pay is based on the seventy-five (75) hour for unpaid
guarantee (seventy-seven (77) hours in a flex month), absences for
shall have his pay reduced by the amount produced by hours less than
dividing the number of credit hours dropped by the number the minimum
of credit hours in the line before the drop and then guarantee
multiplying by his guarantee salary, e.g., a five (5) hour
drop from a seventy (70) hour line would reduce a
$5,000.00 salary by $357.00.
3-C-2- Reserves
Each standby day shall be worth four hours and ten minutes Reserve standby
(4:10) of pay credit, not to exceed seventy-five (75) hours day worth 4:10
(seventy-seven (77) hours in a flex month) in any one (1)
month.
3-C-3- Prorating Pay
When it is necessary to adjust salary due to a rate change in Mid-month hourly
mid-month, the value of each hour shall be determined as rate change
above and the pilot's salary shall be the composite produced
by the number of hours at each rate..
3-D-
Pilots who are permitted to trade trip sequences shall have
their salaries adjusted by recalculating each pilot's salary to
include the effect of the trade.
Page 52 Section 3-E
3-E-
3-E-1- A pilot who is permitted to drop a trip shall have his ANP salary
salary reduced as in 3-C above. If he subsequently picks up adjustment and
open flying, his salary will be restored on an hour for hour restoration
basis calculated on the same basis as the reduction. procedures
3-E-2- In addition to the pick-up of open time, a pilot may Restore ANP by
restore his salary by agreeing to stand by as a reserve on a standing reserve
day suggested by the Company. The number of days of
availability will be declared by the pilot at the time he accepts
the offer to standby and he shall be restored salary at the
rate of four hours and ten minutes (4:10) per standby day or
the number of credit hours actually performed, if greater.
Pilots under this provision will be placed on the reserve list
as number one.
3-F-
The monthly guarantee provided in this Section 3 shall not
apply to those pilots who are unable to fly because all or part
of the Company's airplanes are not available for flight for
reasons other than those normally encountered in regular
scheduled operations, for such time that the affected pilots
are unable to fly and the provisions of Section 3-C-1 and 3-C-2
shall apply.
3-G-
When in line operations a Captain, with his concurrence, is Captain flying As
assigned to serve as a First Officer, his monthly salary shall First Officer
continue to be paid at the rates applicable to his awarded
assignment.
3-H- Displacement
When Company officials whose names appear on the Pilot's Partial trip
System Seniority List or pilots acting in a supervisory displacement
capacity or any pilot not actually assigned to airline flying, fly requires 24-hour
any trip for which compensation is paid, the scheduled pilot notification
shall not have his salary reduced. Further, the Company may
displace a pilot for an entire trip. If the Company desires to
displace a pilot for a partial trip, the pilot must be given
twenty-four (24) hour notification of the intended
displacement. If the pilot is not given a twenty-four (24) hour
notification of the intended displacement he will not be
displaced without his concurrence. Additionally, an
augmenting First Officer who is displaced for any reason will
Section 3-I Page 53
not be assigned to another First Officer position on the trip
from which he was displaced without his concurrence.
3-I- Bank
If, in any given month, a pilot acquires pay credit in excess of Hours in excess
eight-five (85) pay credit hours, that excess shall be held in of 85 put in bank
his ''bank'' and administered according to the following for pilots
provisions (for the application of this paragraph, the value of
a "reserve availability day" shall be four hours and ten
minutes (4:10)):
3-I-1- The accounting for bank credits shall be in dollars. Bank balance
When entered into the bank, the hours and minutes earned maintained in
shall be converted to dollars and cents at the pilot's current dollars
rate of pay. Whenever bank credit is paid out or used for a
trip drop, the bank balance will be converted back to hours
and minutes at the pay rate applicable to the pilot at the time
of the pay out.
3-I-2- A pilot's bank balance will be updated once each
month, showing his balance as of the first day of the pilot
schedule month, after his pay for the prior month has been
finalized. That balance shall be used in the computation
required by 3-I-4, below, to determine eligibility for bank
drops.
3-I-3- At the end of each month, if a pilot's earned pay credit Available bank
in that month does not produce eighty-five (85) hours of pay, trip used to cap
any bank balance available as of the last day of that month pay to 85 hours
will be used to increase the pilot's pay up to eighty-five (85) for lineholders
hours. Bank time paid in this manner will not be used as an and reserves
offset for the monthly minimum guarantees.
3-I-4- Pilots will be required to reduce excess bank time Bank trip drop and
accumulation by dropping trips, or reserve availability days, reduction of
from their schedules. The pilot will receive pay for and reserve
accrued bank time will be reduced by the pay value of the trip availability day
or reserve availability day(s) dropped, not including any pay procedure
credit which would normally be credited to the following
month.
3-I-5- A pilot will be considered to be eligible for a bank drop Bank trip drop and
in any month in which his bank balance is high enough to reduction of
satisfy the following conditions: After month-end schedule reserve day
adjustments are completed for the transition from the current availability
month to the following month, the projected Pay Credit Value eligibility
of the pilots schedules in both months will be examined and
the amount of bank time necessary to provide the pilot with
Page 54 Section 3-I -6
eight-five (85) hours of pay in both months will be forecast.
Next, that bank time needed to increase the pilot's pay to
eighty-five (85) hours in both months will be subtracted from
the pilot's official bank balance as of the first of the current
month. If there is sufficient bank time left to cover the entire
Pay Credit Value of any complete trip pairing, or reserve
availability day, originating in the following month's schedule,
the pilot is eligible for a bank drop in that following month.
3-I-6- Once a trip, or reserve availability day, is dropped for
bank time, it will no longer be considered part of the pilot's
schedule (except as provided in 3-I-6-a and 3-I-6-b, below)
and the pay credit value of the dropped trip, or reserve
availability day, shall be removed from his bank balance.
3-I-6-a- For the purpose of qualifying the pilot for open
flying under 20-H-3 and 20-H-5, the scheduled flight time
of the dropped trip will remain in the pilot's projection for
the month in which the dropped trip originated.
3-I-6-b- For the application of Section 3-C-1, above, Pay
Credit Value of the dropped trip, or reserve availability
day, will be considered to remain in the pilot's line.
3-I-7- It is recognized that, due to the operational events
which may occur after a trip is dropped for bank time, a pilot
may not have sufficient time in his bank to provide a full
eighty-five (85) hours of pay in any month.
3-I-8- In any month in which a pilot is eligible for a bank Trip drops and
drop, he will be required to drop a trip, or reserve availability reduction of
day, unless the Company defers the drop due to manpower reserve day
considerations. The Company may defer bank drops for two availability may be
consecutive months. A bank drop may not be deferred and is deferred until the
required no later than the third consecutive month in which third month of
the pilot is eligible for a drop. If the Company defers the drop eligibility
in the first month that the pilot is eligible and the pilot is not
eligible for a drop in the following month, or if the drop is
deferred for two consecutive months and the pilot is not
eligible for a drop in the third month, then the next month in
which the pilot is eligible will be considered the ''first month''
in which he is eligible for the purposes of this deferral
process and the pilot is again subject to a Company deferral,
as above.
Section 3-I-9 Page 55
3-I-9- The Company shall determine which trip sequence, or Pilot may make
reserve availability day, will be dropped; however, in his desire for trip
anticipation of becoming eligible for a bank drop, a pilot may or reserve
request in advance the trip, or reserve availability day, which availability day
he wants to drop or the days off which he wants to acquire. drop known to
The pilot's request must be received by the Company within Company. Final
48 hours after the publication of lineholder schedules for the determination
month in which the drop is requested. (This procedure will be made by
similar to that used to protect specific days off from a PC Company
assignment.) The Company will accommodate the pilot's
request within the constraints of available manpower,
however the Company will make the final determination
regarding the selection of trip, or reserve availability day, to
be dropped.
3-I-10- Any remaining bank balance which a pilot has on the Bank balance
date his pay begins for another assignment (excluding paid out on
activations which change only the pilot's domicile) will be December 16 or
paid to the pilot within 45 days of his activation. Further, all when pilot
pilots' bank balances which exist as of the first of December changes status or
each year will be paid to the pilots on the 16th of December. equipment type
3-J- Call out
When a pilot at his home domicile is called to the airport to fly Pilot receives 2
a scheduled flight or to deadhead to protect a scheduled hours pay credit
flight, and he does not fly or the pay credit value of the added to his
assignment, as performed, is less than two (2) hours, he shall projection when
nonetheless be credited with 2 hours of pay credit. This sub- called to airport
paragraph does not apply to training or instruction flights, and he does not
familiarization and route qualifying flights. Further, it does not fly
apply to a pilot's completing his interrupted trip or to a pilot
who flies a trip scheduled within two (2) hours of the time
called for such flying. In the case of a reserve pilot, the two
(2) hours credit shall have the same pay application as two
(2) hours of actual flying time.
Page 56 Section 3-J
This Page Intentionally Left Blank
Section 4-A Page 57
Section 4
Expenses, Lodging, and Transportation
4-A- Expenses
4-A-1- Effective April 12, 2000, pilots when on duty or on Hourly Expense
flight assignment including qualifying flight duty shall receive Allowance
Two Dollars ($2.00) per hour, prorated from the time he is
scheduled to report for duty or actually reports for duty,
whichever is later and shall continue until termination of duty
or flight assignment upon return to his home domicile. This
$2.00 rate will be increased by ten (10) cents on May 1,
2001, May 1, 2002, May 1, 2003 and May 1, 2004.
4-A-2- It is understood that a meal will be boarded for each
crew member on all flight segments scheduled for over four
(4) hours non-stop or when any portion of the on duty period,
exclusive of report and debrief exceeds five (5) consecutive
hours with the scheduled time on the ground at any point,
one and one half (1-1/2) hours or less. A crew breakfast
always will be provided on the first scheduled segment
whenever the crew has a duty period scheduled to originate
between 0001 and 0800. A snack will be boarded in addition
to other required crew meals on any flight scheduled for five
(5) or more hours of flight time. Other than the crew meal
provided in this sub-paragraph, crew meals will not be
boarded on any flight unless requested by the System
Schedule Committee or Hotel Committee for all crews
assigned that trip sequence for the entire month.
When the Company boards meals at the request of the
System Schedule Committee or Hotel Committee, the
payment provided in sub-paragraph 1 above, will be reduced
by the cost of such meal to the Company. For the purpose of
this provision, the cost to the pilots when requesting a meal
shall be as follows:
Breakfast $2.00
Lunch $4.25
Dinner $4.25
Snack $3.50
Page 58 Section 4-A-3
4-A-3-
In addition to the standard allowances set forth insub-paragraph 4-A-1 above, a pilot deadheading on
Company business in the cabin will be provided with the
normal meal service aboard such aircraft.
4-A-4- The Company will provide a supply of "energy" food
to be available for the pilot at his request on all flights. The
type and location of this food will be reviewed with the
Association on a periodic basis.
4-B-
4-B-1-
4-B-1-a- Pilots when scheduled for layovers in excess of Hotel rooms
four (4) hours shall be furnished suitable single occupancy provided for
lodging in a quiet room in a suitable location. Rooms will layovers of 4
be located within fifteen (15) minutes normal driving time hours or more
from the airport and transportation will be provided within will be within 15
fifteen (15) minutes of the crew's scheduled or planned minutes driving
arrival time whichever is later. time
4-B-1-a-(1) Notwithstanding Paragraph B-1-a above, Hotel rooms may
whenever a pilot (including a reserve) is scheduled for be waived by the
any layover (block to block) in excess of four (4) hours, pilot for layovers
but no more than five (5) hours, the crew desk may between 4 and 5
contact the pilot prior to departure of the trip sequence hours
and request his waiver of the layover hotel room.
Lineholders may advise the crew desk of their
requirements on a monthly basis. If the room is not
available upon arrival for those pilots who have not
agreed to waive the room, the pilot may arrange for his
own room and be reimbursed as per Section 4-B-1-c-(
1) and 4-B-1-c-(2).
4-B-1-a-(2) Pilots when on layover of less than four (4)
hours shall be furnished suitable lounge facilities as
necessary to minimize fatigue. Such facilities shall be
reviewed periodically with the Association.
In the event the Company is unable to provide the Hotel room may
above lounge facilities at non-domicile airports, the be used in lieu of
Association may request and the Company will provide lounge at non-
mutually acceptable off airport facilities. domicile locations
4-B-1-b- A Hotel/Transportation Representative(s) of the
pilots shall meet quarterly with representatives of the
Company or more frequently, if needed, to review the
suitability of layover and training lodging accommodations
Section 4-B-1-b Page 59
and/or rest facilities and transportation for pilots. The
parties shall be guided by the current Hotel Protocol and
this Protocol may only be modified by the mutual
agreement of the Parties. It is the intent of the parties to
this Agreement that the Hotel/Transportation
representative shall be given the opportunity to consult
with and make recommendations to the Company on the
suitability of accommodations and/or transportation within
the following limitations:
4-B-1-b-(1) Guidelines for the selection of hotels/
motels shall be established by agreement between the
Company and the Association Representatives. The
agreed upon guidelines and evaluation form will be
used as a criteria for determining hotels or motels used
for layovers. If changes or modifications are desired by
either party, conferences will be held between the
Company and Association Representatives, for the
purpose of concluding what these changes or
modifications shall be. If changes or modifications in
the criteria or evaluation form are mutually agreed
upon, these changes will be put into effect. Copies of
the evaluation form will be retained by the Company
and Association as long as the hotel/motel is used as a
layover facility.
4-B-1-b-(2) If a change in hotel/motel facilities is Hotel change
requested, the Company and the Association request
Representative or their designees will within thirty (30)
days jointly inspect other available facilities before
making the change. Nothing herein would prevent prior
agreement on acceptable facilities or deleting from
such list at any time. Once a mutually acceptable
facility is located, the Company will change to that
facility within 60 days if the hotel is located within the
United States and within 90 days if the hotel is located
outside of the United States. If changes are made at
the request of the Association Representative, no
further changes from that hotel will be requested for a
minimum of one (1) year, except by mutual agreement.
4-B-1-b-(3) The selection by the Company of the hotel/ Hotel dispute
motel and/or the transportation used to and from such resolution
facility will be from the list of available facilities which
have been jointly approved. If no joint approval can be
reached, the Senior Vice President of Flight Operations
and the UAL-MEC Chairman shall meet to attempt to
reconcile such differences. If the Senior Vice President
Page 60 Section 4-B-1-c
of Flight Operations and the UAL-MEC Chairman
cannot reach agreement, the Company will make the
final determination.
4-B-1-b-(4) Prompt investigation will be made and
appropriate action taken by the Company to correct
any deterioration of service or facilities within thirty
(30) days of being reported by the Hotel/Motel
Transportation Representative.
4-B-1-b-(5) A Downtown Hotel shall be defined as a Definition of
hotel located within a city's core business district. The Downtown
Parties may choose to select a hotel outside a city's Location
core business district, but the Association reserves the
right to return to that city's core business district in
accordance with paragraph 4-B-1-b-(2) above
4-B-1-c-
4-B-1-c-(1) If the rooms provided by the Company are
not available, the pilot may obtain lodging and claim
reasonable actual lodging expense on the regular
Company expense account form supported by the hotel
receipt.
4-B-1-c-(2) Pilots when at other than their regular
layover station shall receive reasonable actual
expenses for lodging when supported by a receipt
unless suitable lodging as provided in Paragraph 4-B-1-
a of this Section is furnished by the Company.
4-B-2- Hotel workers on
strike
4-B-2-a- If an employee work stoppage is encountered at
any layover facility, the Company will consult with the
hotel/motel transportation representative and, if
requested, attempt to relocate layover crews at another
mutually acceptable facility.
4-C-
4-C-1- Standard allowances provided in Paragraph 4-A of
this Section will be allowed automatically and lodging, as
provided in Paragraph 4-B of this Section, will be allowed
when a pilot lays over at any layover point in connection with
flight duties other than qualifying flight duty. In applying this
Paragraph to reserve pilots, they shall be considered as
standing in the same place as the pilot in whose schedule the
trip appears.
Section 4-C-2 Page 61
4-C-2- When a pilot is required to layover away from his Qualifying
domicile in connection with qualifying flight duty, and the cost expenses
of the lodging and/or necessary transportation is not billed
directly to the Company, he will be entitled to claim
reasonable actual lodging and/or transportation expenses on
a regular Company expense account form.
4-D- Transportation
4-D-1- When transportation provided by the Company at a Layover
layover point does not leave within thirty (30) minutes after transportation
actual block arrival, pilots may use any other available means pick-up at airport
of ground transportation to their place of lodging and may
claim reimbursement for expenses for such transportation on
the regular Company expense account form and pilots shall
be reimbursed therefor.
4-D-2- Hotel pick up times will be arranged to have the pilots Hotel pick-up
arrive at the airport in sufficient time to report for duty at their times
assigned report time. Pick-up times will be adjusted with
regard to the time of day and day of week of planned travel
so that the pilot is not required to arrive excessively early for
his scheduled report time.
4-D-3- In the event a pilot's trip sequence originates at one Crosstown
airport and terminates at another airport at his home transportation
domicile, the pilot shall be furnished transportation one way
between one airport and the other at his option. A pilot
assigned to a schedule involving this type of operation shall
advise the Company prior to the start of the schedule, the
one direction he desires such transportation during the
period he is assigned to that schedule. When transportation
does not leave within (30) minutes of actual block arrival
such pilot may use any other available means of ground
transportation between one airport and the other and may
claim reimbursement for expenses for such transportation on
the regular Company expense account form and said pilot
shall be reimbursed therefor.
4-D-4- When a pilot is scheduled to originate and terminate Doubletown
a trip sequence at an airport serving his domicile other than mileage
the domicile airport, as defined in Section 5-G-1-a-(2), he allowance
shall receive for the actual performance of the scheduled trip
a mileage allowance of twenty-nine cents (29) per mile or
Company policy, whichever is greater, for the round trip
Page 62 Section 4-D-5
driving distance between the domicile airport and the airport
at which the trip originates and terminates. Further, he shall
receive Fifteen Dollars ($15.00) per hour and the meal
allowance set forth in Paragraph 4-A-1, prorated, based on
the applicable time listed in Section 5-G-1-b-(3).
4-D-5- If transportation provided by the Company is reported Unacceptable
to be unacceptable by the Hotel/Transportation Committee, layover
the Company and the Association representative or their transportation
designees will within thirty (30) days jointly inspect other
available transportation before making the change. Once a
mutually acceptable mode of transportation is located, the
Company will change to that mode at the earliest possible
time. Nothing herein would prevent prior agreement on
acceptable transportation. If no joint approval can be
reached, the Senior Vice President of Flight Operations and
the UAL-MEC Chairman shall meet to attempt to reconcile
such differences. If the Senior Vice President of Flight
Operations and the UAL-MEC Chairman cannot reach
agreement, the Company will make the final determination.
4-E- Miscellaneous Assignments
4-E-1- When a pilot is away from his home domicile at TDY per diem
Company request for temporary flight duty, he will receive the
standard allowances provided in Paragraph 4-A of this
Section from the time of the departure of the trip on which he
deadheads to begin the assignment until the time of the
arrival of the trip on which he returns to his home domicile at
the completion of the assignment, except that such expenses
will be discontinued during any period of days off during
which he returns to his home domicile or residence.
Additionally, the pilot will receive twenty-five dollars ($25.00)
per day for the entire duration of the TDY assignment. For
purposes of this paragraph, a TDY assignment begins one
day prior to the pilot's first required day on duty and ends one
day after the completion of his last duty period. The pilot will
be provided suitable single lodging accommodations paid for
by the Company or be reimbursed for reasonable actual hotel
expenses if he is required to secure his own
accommodations. The pilot shall also be furnished
transportation to and from his temporary domicile, plus
transportation between the lodgings and the airport or
expenses therefor if such transportation is not furnished by
the Company. Such expenses shall be claimed on a regular
Company expense account form and must be submitted
within ten (10) days after incurring the expenses. The
Company will allow actual and necessary laundry and
Section 4-E-2 Page 63
cleaning expenses when temporary duty is for more than five
(5) consecutive days.
4-E-2- When pilots are away from their home domicile on
special assignment for the Company other than those
provided for in Paragraph 4-E-1 above, reasonable actual
expenses will be allowed for meals, transportation, laundry
and lodging when not provided by the Company. All such
expenses will be claimed on regular Company expense
account forms and must be submitted within ten (10) days
after incurring the expenses. Upon application, a pilot will be
given an advance by the Company to cover such expense
while on special assignment and within five (5) days after
returning to his domicile or at the close of each week in the
event a pilot is away for a period longer than one (1) week,
he shall submit an expense account for such advance in
accordance with Company regulations and if he has returned
to his domicile, such expense account shall be accompanied
by the balance of any money advanced and not accounted for
on such expense accounts.
4-E-3- When pilots perform special assignments at their
domiciles not directly associated with their duties at the
Company's request, they shall receive reasonable actual
expenses for transportation and/or meals. Such expense
shall be claimed in accordance with Company regulations on
Company expense account forms within ten (10) days after
incurring the expenses.
4-F-
In those cases wherein pilots are entitled to claim actual
reasonable expenses for meals and/or transportation, they
may claim up to fifteen per cent (15%) of such expenses to
cover gratuities.
4-G-
Expenses for the Charter Operation will be as provided in this
Section, except that pilots assigned to the International
Charter Operation shall receive, in addition to the expenses
provided in this Section, Fifty Cents ($0.50) for each hour
away from home.
4-G-1- Should isolated cases of unusual expenses be
encountered by a pilot which the expense allowance will not
normally cover, the Company will reimburse the pilot for such
Page 64 Section 4-H
expenses upon receipt of a documented Company expense
form.
4-H-
Pilots shall be allowed actual reasonable cleaning expenses, Reimbursement of
when supported by a receipt from a commercial cleaner for cleaning
the cleaning of the following uniform items: jacket, vest, expenses
trousers, necktie, shirt and outer coat.
4-I-
4-I-1- In the event the Company makes a change to the pilot Replacement
uniform and requires pilots to wear such new uniform item(s) uniforms at
(and disallows the wearing of the old item(s), if a Company cost
replacement), the purchase cost of these new uniform item(s)
will be borne by the Company. This provision does not cover
the acquisition costs of routine replacements required by age
and wear.
4-I-2- The cost of a new hire pilot's standard initial uniform
issue will be borne by the Company. Contract Admin Home
Section 5-A Page 65
Section 5
Hours of Service
5-A-
This Agreement contemplates that pilots shall devote their
entire professional flying service to the Company provided
that nothing in this Agreement shall be construed to prevent
any pilot from affiliating or assuming duties with the military
services of the United States.
5-B- Flight Time Limitations and Flexible Months
The Company may, at its option, designate any month as a Company may
flexible month (flex month) for which the normal monthly designate four
schedule and actual limits stated in this Section 5-B, and flex months per
where referenced throughout this Agreement, may be year
increased for any fleet by up to two (2) hours. The Company
may designate such flex months in no more than four (4)
months in any calendar year. The Company will notify ALPA
and the pilots of its intention to increase the monthly
schedule and actual limits in any fleet prior to the SSC
meeting at which the affected month's schedules are to be
reviewed. The Company may not increase the normal
monthly schedule and actual limits under this Section 5-B
when any pilot is on furlough.
5-B-1- Scheduling Provisions
5-B-1-a- Schedules published for preferencing shall Monthly schedule
contain no more than eighty-one (81) flight credit hours. limit 81 credit
Should the last trip in a prior month require adjustment to hours. With
an awarded schedule, the adjusted schedule shall be monthly SSC
limited to eighty-one (81) actual flight hours. The Local concurrence lines
Schedule Committee, with the concurrence of the SSC may exceed
and the Company, may authorize the construction of lines schedule limit by
of flying in any equipment domicile to exceed the up to 30 minutes
applicable monthly schedule limit by up to thirty (30)
minutes, provided the extended monthly schedule limit
improves the quality of the affected lines.
5-B-1-b- If a pilot is scheduled to fly a trip sequence Month-end
originating in the prior month which is projected to conflict repair
interfere with or make him illegal for any part of his procedure
awarded schedule in the new month, he may be
reassigned by the Company to any flying for which he is
Page 66 Section 5-B-2
legal in the new month. Under this provision, he may be
assigned up to eighty-one (81) actual hours and up to the
same number of calendar days for which he was originally
scheduled. Assignment of the replacement trip(s) shall be
subject to the following:
5-B-1-b-(1) Every reasonable effort will be made to Pilot may
comply with a pilot's request to retain certain designate certain
designated days off, provided his request is received days holy from
within forty-eight (48) hours of the publication of month-end repair
lineholder schedules. Additionally, during this forty-eight
(48) hour period, a pilot may indicate a desire for
a repair in the current month if possible, rather than in
the following month. This assignment shall be made
prior to the beginning of the subject month.
5-B-1-b-(2) In making repairs under this Paragraph,
consideration will be given to minimizing disruption to
the pilot's line(s), consistent with schedule efficiencies.
5-B-1-b-(3) A trip may be inserted into a line under
these provisions only if it does not create another
illegality within that line.
5-B-1-b-(4) New trip(s) may be substituted for trip(s) in
the previous month's line, with pilot concurrence.
5-B-2- Actual Performance Limits
5-B-2-a- Eighty-one (81) actual flight hours shall Actual monthly
constitute the monthly maximum, including the value of flight limitations
any inbound time produced by the completion of a trip
sequence which originated in the prior month; unless the
pilot volunteers to eighty-three (83) flight hours as
provided by 5-B-3, below. When a pilot is projected to
exceed eighty-one (81) hours of actual flight time, a trip or
a portion of a trip will be removed from his schedule to
reduce his projected flight time to the actual monthly
maximum or less, or his projection prior to departing his
domicile, whichever is higher. The selection of the trip or
portion of a trip to be dropped will be subject to
concurrence between the pilot and the crew desk unless
concurrence cannot be reached, in which case a Flight
Manager will decide. Further, should the Local Schedule
Committee, with the concurrence of the SSC and the With SSC
Company, authorize the construction of lines of flying in concurrence
any equipment domicile to exceed the applicable monthly actual limit may
schedule limit by up to thirty (30) minutes, as provided in be exceeded by
above, the 81/83 hour maximums stated in this paragraph up to 30 minutes
shall be increased by an amount equal to the time which
Section 5-B-2-b Page 67
the scheduled lines of flying exceed the monthly schedule
limits.
5-B-2-b- A reserve shall be limited to seventy-five (75) Reserves limited
actual flight hours. A reserve may exceed the monthly to 75/81 actual
credit limit as long as his actual projection does not hours
exceed seventy-five (75) hours. However, a reserve may
fly up to eighty-one (81) actual flight hours provided his
flight pay credit does not exceed eighty-one (81) hours.
5-B-2-c- Notwithstanding the provisions of 5-B-2-a, Pilot will fly last
above, a lineholder may be required to continue to fly his trip of month even
schedule even if he becomes projected over 81 hours (or if projected over
83, if applicable), so long as he was projected at or below 81/83 as
81 hours (or 83, if applicable) before departing on his next applicable due to
to last trip of the month. Further during the performance of actual flying or
a pilot's last trip of the month, the limitations of 5-B-2-a reassignment
above (with respect to a lineholder) and 5-B-2-b above
(with respect to a reserve) shall not apply and he may be
required to complete his schedule. A reserve pilot Reserve may be
involved in a reassignment under this provision shall not reassigned over
be available to any greater extent than a lineholder and 75/77 hours if
may be assigned to exceed the limits in 5-B-2-b above given the same
only when given the same assignment as the other assignment as
members of the disrupted crew. other crew
members
5-B-3- Operational Flexibility
Notwithstanding the 81 hour actual monthly flight time Pilot may opt to
limitation of 5-B-1 and 5-B-2, above, a lineholder may fly up to 83 actual
elect to fly up to 83 actual flight hours. A pilot may make hours
this election at any time including during the line award
process, in which case any adjustment made necessary
by an inbound carry-over conflict can be repaired up to 83
actual flight hours.
5-B-3-a- A pilot who has not previously elected to fly over Pilot may concur
81 hours may, with his concurrence, be reassigned under to be reassigned
Section 20-F-1 and 20-F-2 to flying which exceeds 81 up to 83 actual
flight hours, but in no event more than 83 actual flight hours
hours, unless it is his last trip of the month.
5-B-3-b- A pilot who at any time agrees to fly above 81
actual hours shall be considered available up to 83 hours
for the remainder of the relevant month.
Page 68 Section 5-B-3-c
5-B-3-c- This 83 flight hour flexibility provision shall be Open time pick up
applicable to all monthly flight time limitations; except for limited to 81
the pick up of open flying under the provisions of Section actual hours
20-H-3 and 20-H-5, which are limited to 81 flight hours.
5-B-3-d- This flexibility provision shall not be available at
any time that any pilots are on furlough.
5-B-4- Reassignment Limitations
5-B-4-a- If a lineholder is assigned or reassigned under Reassignment
the provisions of Section 20-H or 20-I, he shall be limited, under 20-H and I
at the time of the assignment to eighty-one (81) actual are limited to a
flight hours or to his projection just prior to the pilot's projection
reassignment, if higher. Should an assignment be given or 81 actual hours
which, at the time of that assignment, projects a pilot which ever is
above the applicable limit, he shall have a trip or a portion greater. Any
of a trip removed from his schedule upon his return to his assignment
domicile at the completion of the assignment, in order to projecting pilot
reduce his projection to or below the applicable limit. The above these limits
selection of the trip or portion of a trip to be dropped will must have his
be subject to concurrence between the pilot and the crew projection
desk unless concurrence cannot be reached, in which reduced upon
case a Flight Manager will decide. returning home
5-B-5- A pilot on reserve part of the month and assigned to Reserves with
a line of flying under Section 20 for some portion of the partial line
month shall, if such assignment results in a projection higher assignment
than the actual monthly maximum at the time he starts flying limited to 75
the line of flying, have a trip(s) or portion of a trip deleted actual hours
from the line of flying to produce a projection equal to or less
than the actual monthly maximum. The monthly maximum for
this application shall be as provided in 5-B-2-b above.
5-B-6- Trips which originate in the current month and project
into the following month shall have only that time scheduled
prior to 2400 home domicile time of the last day of the month
credited to the current month.
5-B-7- When a pilot has been on duty aloft in excess of eight 8 in 24 requires at
(8) hours in any consecutive twenty-four (24) hours, he shall, least 12 hours
upon completion of his assigned flight or series of flights be rest
given at least twelve (12) hours for rest before being
assigned any further duty with the Company.
Section 5-B-8 Page 69
5-B-8- A pilot shall not be scheduled for duty aloft for more No 2 for 1 rest
than eight (8) hours during any duty period. At the completion application
of each duty period a pilot shall be scheduled for a rest
period of no less than the applicable minimum provided by
Section 5-G-1-c. In the actual operation, the minimum rest
requirement shall be no less than (a) the actual rest period
provided by Section 5-G-2-c below or (b) the rest period
prescribed by the applicable FAR, whichever is greater.
5-B-9- A pilot shall not be scheduled for duty aloft if his total 30 in 7
flight time will exceed thirty (30) hours in any seven (7)
consecutive twenty-four (24) hour period.
5-B-10- If a pilot is projected to become illegal, under the Procedure for
provisions of Paragraph 5-B-7, 5-B-8 and/or 5-B-9 above, he correcting 8 in 24
shall continue to fly his assigned trip until he is actually problems
illegal except as provided below:
5-B-10-a- If a pilot is scheduled for a layover at a non-equipment
domicile and is projected to be illegal to fly the
first leg of the next duty period, the Company may
designate any remaining portion of his trip sequence open
under Paragraph 20-H or 20-I and repair accordingly.
5-B-10-b- If a pilot is scheduled for a layover at a non-equipment
domicile and is projected to be illegal for some
portion of his remaining trip after the layover, and the
remaining portion of his trip does not pass through an
equipment domicile prior to the point at which he is
projected to become illegal, the Company may designate
any remaining portion of his trip sequence open under
Paragraph 20-H or 20-I and repair accordingly.
5-B-10-c- In addition to the repairs provided in 5-B-10-a
and 5-B-10-b above, a pilot projected to become illegal
under this provision may be removed from any portion of
his sequence; or he may be reassigned to another pilot's
pairing (or portion thereof) if that pilot can be assigned the
flying for which the subject pilot is illegal under the
provisions of Section 20-H or 20-I.
5-B-10-d- If a pilot becomes illegal, or is expected to No DHD between
become illegal, under the provisions of sub-paragraph 5- flight segments to
B-8 and/or 5-B-9 above to fly his entire scheduled trip satisfy 8 in 24
sequence, he will not be required to deadhead between legality
flight segments which he was scheduled to fly in one (1)
duty period. However, a pilot may be required to deadhead
Page 70 Section 5-B-11
on either the first or last flight segment(s) of any one (1)
duty period to become legal.
5-B-11- No pilot shall be assigned any duty with the Reserve released
Company during any rest period required by this Paragraph unless specifically
B. In the application of this sub-paragraph, a reserve pilot advised
upon completion of any assignment, will be specifically
advised if he is not released from duty and is not
commencing a rest period.
5-B-12- Duty aloft includes the entire period during which a
pilot is assigned as a member of an airplane crew during
flight time.
5-B-13- Scheduled for duty aloft means the assignment of a
pilot on the basis of the flight time established in the
applicable Domicile Schedule Letter rather than the actual
flight time.
5-B-14- Relief from all duty for not less than twenty-four (24)
consecutive hours shall be provided for and given to a pilot at
his home domicile at least once during any seven (7)
consecutive calendar days.
5-C- 8 in 24 Application
5-C-1- For qualifying purposes, a pilot shall not be required
to fly as a pilot or as an observer crew member a combined
total flight time of more than eight (8) hours in any twenty-four
(24) hour period.
5-C-2- When the combined total actual flight time of a pilot 8 in 24
as a pilot and as an observer crew member (deadhead time
as a passenger excluded) is more than eight (8) hours or is
scheduled for over eight (8) hours in any consecutive twenty-four
(24) hour period, such pilot for such combined total
actual flight time shall have a minimum rest period as
specified in Section 5-G-2-c.
5-D- Deadhead
5-D-1- Time spent as a passenger or as an Observer
Member of the Crew (OMC) shall not contribute to flight time
under the provisions of this Agreement.
Section 5-D-2 Page 71
5-D-2- When a pilot assigned a line of flying is displaced
from or is required to deadhead or ride as observer on a flight
because he has been displaced from the flight or a part
thereof to which he has previously been designated as a
member of the crew and he is unable to deadhead or ride as
observer member of the crew on the flight from which
displaced, he shall be permitted to deadhead or return as
observer member of the crew on any other flight in order that
he may return to his domicile as soon as possible. This
Paragraph shall not apply when a pilot is removed from his
assigned trip as a result of the operation of the pilot's
schedule selection procedure, equipment substitution,
cancellation due to weather or equipment, moving to another
trip, or being removed from a trip due to the application of
Section 20-F, 20-G, 20-H and 20-I.
5-D-3- Pilots when deadheading over the Company's First Class DHD if
domestic routes shall be on non-revenue positive space available at time
(NRPS) or OMC at the pilot's option unless OMC provides the of booking
only expedient method of transportation. Pilots will be
booked in first class if space is available at the time of
booking. If first class space is not available at the time of
booking, pilots will be booked in business class. If business
class space is not available at the time of booking, pilots will
be booked in economy class and assigned a seat according
to the following order of preference: aisle seat, window seat,
middle seat.
5-D-4- Offline deadheading shall be First Class when
available on all flights scheduled for three (3) hours or more.
5-E-
5-E-1-
5-E-1-a- When a pilot assigned to a line of flying is on Sick leave
sick leave, his total allowable monthly flight time shall be adjustment for
reduced by the number of actual flight hours which the lineholders
pilot missed as a result of sick leave.
5-E-1-b- When a reserve pilot is on sick leave, his total Sick leave
allowable monthly flight time shall be reduced by four adjustment for
hours and ten minutes (4:10) for each duty day he was on reserves
sick leave, except as provided in Section 20-H-3 of this
Agreement.
5-E-2-
Page 72 Section5-E-2-a
5-E-2-a- When a pilot assigned a line of flying is on Vacation
vacation, his total allowable monthly flight time shall be adjustment for
reduced by the number of actual flight hours which the lineholders
pilot missed as a result of his vacation.
5-E-2-b- When a pilot serving as reserve is on vacation, Vacation
his total allowable monthly flight time shall be reduced by adjustment for
four hours and ten minutes (4:10) for each duty day he is reserves
on vacation.
5-F-
A pilot shall not be required to keep the Company advised of
his whereabouts on his days off.
5-G- Duty Time
5-G-1- Preparation of Pilot's Schedule
The following on-duty provisions shall apply to the
preparation of pilot schedules and the preparation of initial
pilot, including reserve pilot, assignments (other than trip
pairings appearing in the Pilots' Schedules).
5-G-1-a-
5-G-1-a-(1) A pilot shall not be scheduled to be on duty
in excess of the following limitations, except that with
the concurrence of the System Schedule Committee,
duty periods up to fourteen (14) consecutive hours may
be scheduled:
5-G-1-a-(1)-(a)
For Duty Period
Starting Trip Preparation
0600-1329 13 hours
1330-2359 13 hours, reduced 1 min. for each 3 min.
beyond 1330
2400-0414 9 1/2 hours
0415-0559 9 1/2 hours, increased 2 min. for each 1
min. beyond 0415.
5-G-1-a-(1)-(b)
When a duty period is scheduled toend with a deadhead segment, the applicable duty
Section 5-G-1-b Page 73
limits shall be one (1) hour greater than the times
indicated above.
5-G-1-a-(1)-(c) A pilot shall not be scheduled to be Duty period limit
on duty for more than ten (10) hours in any duty after field layover
period following a layover scheduled for less than
ten (10) hours and forty-five (45) minutes free from
duty, except that if the duty period begins between
2301 and 0359, the on-duty period shall be
scheduled for not more than nine (9) hours.
5-G-1-a-(1)-(d) Determination of all on-duty periods
shall be based on home domicile time.
5-G-1-a-(1)-(e) When a pilot is scheduled into one Drive time for
airport and out of another airport serving the layover crosstown
point, the duty period will have the driving time layovers shall be
shown in Section 5-G-1-b-(3) included in the duty included in the
time. This provision will not apply to downtown duty time
layovers in New York City, downtown layovers
between IAD and DCA, all downtown layovers
between OAK and SFO when scheduled for a
downtown San Francisco hotel.
5-G-1-a-(2) The domicile airports are LAX, SFO, SEA, Domicile airports
DEN, ORD, MIA/FLL, JFK/LGA, IAD/DCA, ANC, and
HNL. In the event a trip sequence is scheduled to
originate and terminate at an airport serving the
domicile other than these domicile airports, the
provisions of Section 4-D-4 shall apply.
5-G-1-b-
5-G-1-b-(1) Duty time on a scheduled basis shall Report and
include scheduled flight and ground time and a pilot debrief times
shall be considered to be on duty for one (1) hour
before the scheduled departure of his trip until fifteen
(15) minutes after the scheduled termination of the trip. Debrief increased
If the required reporting time exceeds one (1) hour, to 30 minutes if
such additional time shall be considered as duty time. crew must clear
If, due to their arrival from an international city, a crew customs
is required to clear customs at the completion of a trip
sequence, the 15 minute debriefing time shall be
increased to 30 minutes. This sub-paragraph shall not
apply in the application of Section 5-G-1-b-(3).
5-G-1-b-(2) Notwithstanding sub-paragraph 5-G-1-b-(
1) above, a pilot scheduled to fly a cargoliner shall be
considered to be on duty until thirty (30) minutes after
the scheduled termination of the trip. This cargoliner
Page 74 Section 5-G-1-c
debrief time shall remain 30 minutes unless the SSC
and the Company agree an increased time is
necessary at a particular airport. If the SSC and the
Company are unable to reach agreement, the issue will
be referred to the UAL-MEC Master Chairman and the
Senior Vice President of Flight Operations for
resolution.
5-G-1-b-(3) When a pilot's scheduled trip sequence Crosstown duty
originates out of one airport and terminates at another period extension
airport serving his domicile, the following times will be added to either
used to increase either the first or last duty period, first or last duty
depending on whether the time is provided at the period
beginning or end of the trip. Such times shall be
considered as scheduled deadhead time at one-half (1/
2) flight time credit for the application of Section 5-G-3-f.
LGA-JFK :45 LAX-ONT 2:15
EWR-LGA 1:30 LAX-PMD 2:30
JFK-EWR 2:00 SFO-OAK 1:00
MDW-ORD 2:00 SEA-BFI :45
DCA-IAD 1:10 MIA-FLL 1:45
DCA-BWI 1:10 PBI-MIA 2:00
IAD-BWI 1:45 SJC-SFO 1:00
LAX-BUR 1:15 PBI-FLL 1:00
When a pilot is scheduled in accordance with Section
4-D-4 of this Agreement, the above times will be used
with the following exceptions: JFK/LGA-EWR 1:30;
MDW-ORD 1:45; MIA-FLL/PBI 2:00.
5-G-1-c- For the purpose of determining scheduled duty
time, a pilot's on-duty period cannot be broken by an off
duty period of less than:
5-G-1-c-(1) Nine (9) hours and thirty (30) minutes- in 1 hour scheduled
case of relief from flight duty at a point where sleeping report may be
accommodations are provided within fifteen (15) reduced to :30 at
minutes normal driving time from the airport and non domiciles
transportation is provided within fifteen (15) minutes of
the scheduled arrival time of the trip. At non-domicile
locations, the Company may, on a monthly basis with
SSC concurrence, reduce the one (1) hour report time
.
Section 5-G-1-d Page 75
specified in Section 5-G-1-b-(1) to thirty (30) minutes in
order to provide the required period free of duty. Such
action, however, will not dilute the application or any of
the provisions of this Paragraph. Specifically, it will be
assumed that the pilot reported for duty one (1) hour
before departure.
5-G-1-c-(2) Twelve (12) hours and forty-five (45)
minutes - in case of relief from flight duty at a point
where sleeping accommodations are not provided as
specified in sub-paragraph (1) above.
5-G-1-c-(3) Twelve (12) hours and forty-five (45) Pilot will be
minutes - in case of relief from flight duty at the scheduled for
conclusion of a trip sequence at a scheduled or reserve 12:45 rest at his
pilot's home domicile regardless of whether sleeping home domicile
accommodations are or are not available at the airport.
5-G-1-c-(4) Thirteen (13) hours and forty-five (45) Pilot will be
minutes - in case of relief from flight duty at the scheduled for
conclusion of a trip sequence at a scheduled or reserve 13:45 rest at his
pilot's home domicile when the pilot is scheduled out of home domicile for
one airport and into another serving his home domicile scheduled
if not covered in sub-paragraph 5-G-1-b-(3) above. crosstown
5-G-1-c-(5) Fourteen (14) hours - in case of relief from Pilots scheduled
flight duty at the first rest following a duty period in to exceed 7:30
which the pilot is scheduled to exceed seven (7) hours flight time will
and thirty (30) minutes flight time in twenty-four (24) have 14 hours
consecutive hours. rest
5-G-1-c-(6) Notwithstanding the minimum free of duty Company and
times required in 5-G-1-c-(3) above, the Company and SSC may
Association System Schedule Committee may select schedule back to
specific trip pairings which, on a scheduled basis, may back trip pairings
be combined into lines of flying while providing thirty in lines with 30
(30) minutes less time between trips than required minutes less rest
above.
5-G-1-c-(7) The above off-duty periods may be Schedule
reduced by one (1) hour under this sub-paragraph c preparation time
when such off duty period extends to or beyond 0200 change
Standard Time on the designated day when the change
is made from Standard Time to Daylight Time.
5-G-1-d-
Page 76 Section 5-G-1-e
5-G-1-d-(1) Each schedule line for a full month that is Lines will have a
submitted for the schedule selection procedure, as minimum of 12
provided in Section 20-B and 20-C shall contain a days off in a 30
minimum of twelve (12) calendar days free of all duty at day month, 13
the home domicile in a thirty (30) day Month and days off in a 31
thirteen (13) calendar days free of all duty at the home day month and 14
domicile in a thirty-one (31) day Month [fourteen (14) days off for all
calendar days in all months for Shuttle pilots]. A months for shuttle
lineholder may voluntarily reduce the number of days
off in a thirty-one (31) day Month to not less than
twelve (12) calendar days free of all duty at the home L/H may be
domicile [thirteen (13) calendar days in all Months for a scheduled to be
Shuttle lineholder] to legally fly an inbound. For the released by 0100
purpose of this subparagraph d-(1) only, a day shall be and that day is
a "day free of all duty", if the lineholder is scheduled to still considered a
be released from duty before 0100 home domicile time. day off
5-G-1-d-(2) Shuttle lines of flying must average no less
than sixteen (16) days off per month for each status on
a systemwide basis.
5-G-1-e-
5-G-1-e-(1) Pilots functioning as reserves shall be Reserve lines will
scheduled for a minimum of twelve (12) calendar days have a minimum
free of duty in a thirty (30) day Month and for a of 12 days off in a
minimum of thirteen (13) calendar days free from duty 30 day month, 13
in a thirty-one (31) day Month [fourteen (14) calendar days off in a 31
days free of duty in all months for Shuttle pilots] with day month and 14
the Company each month in patterns consisting of a days off in all
maximum of four (4) periods of not less than two (2) months for shuttle
days off. Reserve lines posted for preferencing shall
include all of those lines which will be awarded,
however, the actual lines awarded may not include all Construction and
of those posted. Additionally, the same line may be awarding of
awarded to more that one (1) pilot. The schedules posted reserve
posted for preferencing will include a variety of lines lines
sufficient to insure that the following specific day-off
patterns are awarded, depending upon the actual
number of pilots awarded reserve lines, to the extent
they are preferenced.
If 7 reserve lines, 1 line with weekends off.
If 14 reserve lines, 2 lines with weekends off.
If 21 reserve lines, 3 lines with weekends off.
Section 5-G-1-e Page 77
If more than 21 reserve lines, one additional line with
weekends off for each additional 7 reserve lines;
except that these additional weekend off lines (above
the first 3 weekends off lines) shall have only three
weekends off whenever any part of the fourth weekend
falls within either the first four days or the last four
days of the schedule month.
If 10 reserve lines, 1 line with the first four days off. For
each additional 10 reserve lines, 1 additional line with
the first four days off.
If 10 reserve lines, 1 line with the last four days off. For
each additional 10 reserve lines, 1 additional line with
the last four days off.
These additional reserve lines will not be provided
when any part of a weekend falls on both the first four
days and last four days of the month.
5-G-1-e-(2) A pilot functioning as a reserve will not be
scheduled into a day(s) off.
5-G-1-e-(3) If as a result of the pilot's schedule
selection procedure a reserve has not been provided
with one (1) day off in a seven (7) day period, one (1)
day of other than a two (2) day off period may be used
to provide the required one (1) day off in a seven (7)
day period.
5-G-1-e-(4) The Company may assign a reserve an Additional day off
additional day off to insure legality of the transition into for reserves
the next month's schedule with the concurrence of the
reserve pilot.
5-G-1-e-(5) Reserve pilots may be permitted to Trade reserve
mutually trade day(s) off periods, consistent with the days off
needs of the service so long as such trade does not
result in either pilot being scheduled for less than one
(1) day off in a seven (7) day period. Additionally, a
reserve pilot's scheduled days off may be rescheduled
with pilot concurrence.
5-G-1-e-(6)
5-G-1-e-(6)-(a) A pilot on reserve shall not be Reserve early
required to report for duty to fly or deadhead on a release and early
trip which is scheduled to depart from his home report
domicile prior to 0700 local domicile time on the day
following his day(s) off, provided that the Company
may release a reserve from being available for
assignment at or before 1500 local domicile time on
Page 78 Section 5-G-1-e
the day preceding his scheduled day(s) off, and if so
released, the reserve pilot may be required to report
for duty to fly or deadhead on a trip which is
scheduled to depart from his home domicile at or
after 0600 local domicile time on the day following
his day(s) off. With pilot concurrence, the Company
may also assign a reserve pilot who is not released
from duty before 1500 local domicile time to a trip
scheduled to depart at or after 0600 local domicile
time on the day following his day(s) off.
5-G-1-e-(6)-(b) A reserve on call will be released
from duty at 1500 for purposes of this subparagraph
(6) if he has not been notified of an assignment or
notified to remain on duty by 1500 local domicile
time.
5-G-1-e-(6)-(c) A reserve on a designated rest
period extending beyond 1500 on a day prior to a
reserve day(s) off, if not previously given an
assignment following the designated rest period,
will automatically be released from duty nine (9)
hours prior to the completion of the designated rest
period.
5-G-1-e-(7) If a reserve pilot is assigned to a line of Restoration of
flying he shall receive the days off in such scheduled minimum days off
line for the period assigned in lieu of the days off for reserve
shown in his reserve line for the same period. In no assigned to line
event shall a reserve pilot assigned to a line of flying
for less than a full month be scheduled for less than
twelve/thirteen (12/13) calendar days off [fourteen (14)
calendar days off for Shuttle pilots]. Whenever a
reserve pilot is scheduled for less than the minimum of
twelve/thirteen (12/13) days off [fourteen (14) days off
for Shuttle pilots] when assigned to a line of flying for
less than a month, a trip(s) may be deleted or replaced
in the line of flying under the provisions of Section 20-F-
1, to provide the required days off. It is understood
that, on a voluntary basis, a Shuttle reserve pilot
assigned to a partial line of flying may require only
twelve (12) days off in the line of flying.
Section 5-G-1-e Page 79
5-G-1-e-(8) In the application of Section 5-G-1-c-(3) Reserve
and 5-G-1-c-(4) to the scheduling of reserve pilots, the scheduled for
twelve (12) hours and forty-five (45) minutes or thirteen 12:45 rest at
(13) hours and forty-five (45) minutes, as applicable, home---13:45
will be added to the end of the last duty period of the after crosstown
trip sequence at the time of the initial assignment. The operations
time so established is considered to be the time at
which the reserve is scheduled to be legal for his next Rest will be
reserve assignment. However, the provisions of reduced only by
Section 5-G-2-c will apply if the trip sequence is not the amount of
flown as scheduled, but the required rest (12:45 or time the reserve
13:45) will be reduced only by the amount of time the arrived later than
reserve arrived later than his scheduled arrival at his scheduled
home. The provisions of 5-G-2-c will also apply if the arrival at home
next assignment is made under the provisions of
Section 20-G-8. In no case will a reserve pilot receive
less rest than provided in Section 5-G-2-c.
5-G-1-f- Late Night and All Night Flying
5-G-1-f-(1) Definitions
5-G-1-f-(1)-(a) Window of Circadian Low ("WOCL") Late night and all
means 0100 through 0459 home domicile time night flying
scheduling
5-G-1-f-(1)-(b) Late Night Flight ("LNF") means a restrictions
flight any portion of which is scheduled to operate
between 0045 and 0600 (inclusive) home domicile
time.
5-G-1-f-(1)-(c) All Night Flight ("ANF") means a LNF
any portion of which is scheduled to operate during
the hours of 0230 and 0329 home domicile time.
5-G-1-f-(2) No pilot may be scheduled for duty in
consecutive WOCL periods.
5-G-1-f-(3) Within a pairing, a pilot shall have a
minimum of sixteen (16) hours and forty-five (45)
minutes free from duty prior to a duty period that
contains an ANF.
5-G-1-f-(4) After an ANF a duty break must be
scheduled before the pilot's next scheduled flight
segment.
5-G-1-f-(5) Any duty period that contains an ANF shall
meet the following requirements:
5-G-1-f-(5)-(a) A maximum of two (2) flight
segments, except no more than one (1) segment if
the ANF departs from an equipment domicile, and
Page 80 Section 5-G-2
5-G-1-f-(5)-(b) A maximum duty period of Nine (9)
hours and forty-five (45) minutes unless further
restricted by Section 5-G-1-a-(1)-(a) above, and
5-G-1-f-(5)-(c) If the duty period contains two (2)
flight segments, no more than one (1) hour and
forty-five (45) minutes ground time between flight
segments.
5-G-1-f-(6) Central and South American trip pairings Above night flying
that are specifically addressed by the current "doctors rules not
letter" are exempt from the provisions of this Section 5- applicable to
G-1-f. Central and South
America
5-G-2- Actual On-Duty Provisions
The following on-duty provisions shall apply to scheduled
pilots and reserve pilots in the actual performance of their
duties, including any reassignments made after the pilot has
reported for duty for his initially assigned trip sequence.
5-G-2-a- A pilot shall not be required to be on duty in
excess of the following limitations, except by agreement
between the pilot and a Flight Manager.
5-G-2-a-(1) As a result of a reassignment, a duty Actual duty time
period may not be planned to exceed the applicable limits including
schedule maximum in 5-G-1-a-(1) above, by more than reassignment
one (1) hour, without pilot concurrence.
(a) Additionally, a pilot shall not be reassigned to be on Actual duty time
duty for more than eleven (11) hours in any duty period limits for
following a layover scheduled for less than ten (10) reassignments
hours and forty-five (45) minutes free from duty. following a field
Between 2301 and 0359, the on-duty period shall not layover
be scheduled to exceed ten (10) hours.
(b) Should a pilot become involved in a reassignment Pilot reassigned
which produces a layover that, had it been scheduled, into a short field
would have subjected him to the provisions of 5-G-1-a-(1)-c, layover shall have
above; such pilot shall be treated in the actual the more
operation as if he had been scheduled under 5-G-1-a-(1)-(c). restrictive duty
Conversely, a pilot scheduled under 5-G-1-a-(1)-(c) limits following
who is reassigned so as to actually receive a the layover, and if
longer layover not subject to 5-G-1-a-(1)-(c) that pilot reassigned into a
shall not be limited to the shorter duty period. longer layover
those duty period
restrictions shall
not apply
Section 5-G-2-b Page 81
5-G-2-a-(2) In the actual operation, a duty period may Actual duty limits
not exceed the applicable schedule limits as provided 11/2 hour greater
in 5-G-1-a-(1) above by more than one and one-half than scheduled
(11/2) hours (or fourteen (14) hours total if less) with 14 hours max
without pilot concurrence.
5-G-2-a-(3) In the event a pilot is reassigned to
deadhead to a layover point or to his home domicile,
the actual limitations shall apply.
5-G-2-a-(4) Determination of all on-duty periods shall
be based on home domicile time.
5-G-2-b-
5-G-2-b-(1) Duty time on an actual basis shall include
actual flight and ground time and a pilot shall be
considered to be on duty for one (1) hour before the
scheduled departure of his trip until fifteen (15)
minutes after the termination of the trip. If the required
reporting time exceeds one (1) hour, such additional
time shall be considered as duty time. This
subparagraph shall not apply in the application of
Section 5-G-1-b-(3).
5-G-2-b-(2) Notwithstanding sub-paragraph 5-G-2-b-(
1) above, a pilot who flies a cargoliner at the
conclusion of a trip sequence shall be considered to be
on duty until thirty (30) minutes after the termination of
the trip. This cargoliner debrief time shall remain 30
minutes unless the SSC and the Company agree an
increased time is necessary at a particular airport. If
the SSC and the Company are unable to reach
agreement, the issue will be referred to the UAL-MEC
Master Chairman and the Senior Vice President of
Flight Operations for resolution.
5-G-2-b-(3) Notwithstanding the provisions of sub-paragraph
5-G-2-b-(1) above, the one (1) hour
reporting time may be reduced to not less than thirty
(30) minutes before departure of a trip on a daily basis
by request of the crew and with the concurrence of a
Flight Manager. This waiver applies only to reporting
time of one (1) hour which has not previously been
resolved under the provisions of Section 5-G-1-c-(1).
Such action, however, will not dilute the application of
any of the provisions of this Paragraph. Specifically, it
will be assumed that the pilot reported for duty one (1)
hour before departure.
Page 82 Section 5-G-2-c
5-G-2-b-(4) When a pilot's return trip terminates at an
airport serving his domicile other than the airport at
which his return trip was scheduled to terminate, the
pilot's on-duty period shall be extended in accordance
with Section 5-G-1-b-(3), based on the actual
termination airport or the scheduled termination airport,
whichever is greater, provided, that if in the actual
operation a pilot returns to the airport from which he
was scheduled to originate, the provisions of this
Paragraph shall not apply.
5-G-2-b-(5) When a pilot is scheduled into one airport
and out of another airport serving the layover point, the
duty period will have the driving time shown in Section
5-G-1-b-(3) included.
5-G-2-c- For the purpose of determining actual duty time,
a pilot's on-duty period cannot be broken by an actual off-duty
period of less than:
5-G-2-c-(1) Nine (9) hours and fifteen (15) minutes -
in case of relief from flight duty at a point where
sleeping accommodations are provided within fifteen
(15) minutes normal driving time from the airport and
transportation is provided within fifteen (15) minutes of
the crews planned arrival time if later than the
scheduled arrival time. At non-domicile locations, the
Company may reduce the one (1) hour report time
specified in Section 5-G-1-b-(1) to thirty (30) minutes in
order to provide the required period free of duty. Such
action, however, will not dilute the application or any of
the provisions of this Paragraph. Specifically, it will be
assumed that the pilot reported for duty one (1) hour
before departure.
5-G-2-c-(2) Ten (10) hours and forty-five (45) minutes -In
case of relief from flight duty at a point where
sleeping accommodations are not provided as
specified in sub-paragraph 5-G-2-c-(1) above. At non-domicile
locations the Company may, with pilot
concurrence, reduce the one (1) hour report time
specified in Section 5-G-1-b-(1) to thirty (30) minutes in
order to provide the required period free of duty. Such
action, however, will not dilute the application or any of
the provisions of this Paragraph. Specifically, it will be
assumed that the pilot reported for duty one (1) hour
before departure.
5-G-2-c-(3) Ten (10) hours and forty-five (45) minutes-
Section 5-G-2-c Page 83
5-G-2-c-(3)-(a) In case of relief from flight duty at
the conclusion of an assigned trip sequence at a
scheduled pilot's home domicile regardless of
whether sleeping accommodations are or are not
available at the airport or when a pilot departs from
one airport and arrives at another airport serving his
domicile at the conclusion of an assigned trip
sequence.
5-G-2-c-(3)-(b) In case of relief from flight duty at
the conclusion of an assigned trip sequence at a
reserve pilot's home domicile regardless of whether
sleeping accommodations are or are not available at
the airport.
5-G-2-c-(3)-(c) In case of relief from flight duty
under the provisions of Section 20-F-1-a-(2) and
Section 20-F-1-b-(3) and 20-F-1-b-(4).
5-G-2-c-(4) Twelve (12) hours - in case of relief from 12 hours rest after
flight duty at the first rest following a duty period in 8 hours actual in
which the pilot exceeds eight (8) hours flight time in 24
any consecutive twenty-four (24) hours.
5-G-2-c-(5) Notwithstanding the provisions of sub-paragraph Minimum rest of 9
5-G-1-c-(1) and 5-G-1-c-(2) above, an on-duty hours at hotel
period cannot be broken by less than nine (9)
hours at the place where sleeping accommodations are
provided.
5-G-2-c-(6) The off duty periods required by 5-G-2-c- Time change
(1)-5-G-2-c-(2)-5-G-2-c-(3) above, may be reduced by
one (1) hour, but in no case less than the amount of
time necessary to provide eight (8) hours and thirty
(30) minutes at the place where sleeping
accommodations are provided, under this sub-paragraph
c when such off duty periods extend to or
beyond 0200 Standard Time on the designated day
when the change is made from Standard Time to
Daylight Time. This exception does not apply to the
required rest period for a reserve at his home domicile
as provided in Section 5-G-2-c-(3)-(b).
Page 84 Section 5-G-2-c
5-G-2-c-(7) Pairings which have been scheduled under Actual rest
the provisions of Paragraph 5-G-1-c-(6), shall require provisions
thirty (30) minutes less time free of duty in the actual reduced by :30
operation than the times provided in Paragraph 5-G-2- when Company
c-(3) above. and SSC agree to
schedule back to
back pairing in lines.
5-G-2-d- Operational Integrity
The Company may initiate the following procedures Company may
whenever it is anticipated that a flight crew will be unable request pilot to
to depart on-time following a scheduled layover. These waive contractual
procedures only apply to a layover at a non-domicile rest at non-
location where timely replacement of the crew is not domicile location
possible: for an ontime
departure
5-G-2-d-(1) Notwithstanding the provisions of Section Minimum rest
5-G-2-c above and with pilot concurrence, the minimum
rest will be the greater of eight (8) hours or the rest
required by the FAR. Provided, however, that:
5-G-2-d-(1)-(a) Each pilot is notified prior to, or
immediately upon arrival at the layover station of
the Company's request to implement this provision,
and
5-G-2-d-(1)-(b) The layover hotel meets the field Field layover
layover requirements of Section 5-G-2-c-(1) above, required
and
5-G-2-d-(1)-(c) Transportation to the layover hotel Immediate
is immediately available upon arrival. If the transportation
transportation is not immediately available, the pilot required
may, at his option and after notifying the Company
upon his arrival at the hotel, revert to the actual
minimum layover under Section 5-G-2-c-(1) above.
5-G-2-d-(2) Prior to agreeing to rest under this Section
5-G-2-d, the pilot will be informed of the anticipated
duty following the rest period.
5-G-2-d-(3) Following any rest period under this Limitations on
Section 5-G-2-d, a pilot may fly up to four (4) duty period
scheduled flight hours and shall be relieved from duty following reduced
upon the earliest of: rest
5-G-2-d-(3)-(a) The first arrival at a domicile
location for his equipment type, or
Section 5-G-3 Page 85
5-G-2-d-(3)-(b) Completion of two (2) flight
segments, or
5-G-2-d-(3)-(c) Completion of six (6) hours on duty
5-G-2-d-(4) When a pilot is relieved from duty following After completion
a rest period under this Section 5-G-2-d, the pilot will of the duty period
be either: following reduced
rest pilot will be
5-G-2-d-(4)-(a) Released from the balance of the released or given
trip, or a minimum 14
;hours rest
5-G-2-d-(4)-(b) Given a rest period extending
through 0459 home domicile time following release
from duty, and in no case shall this rest period be
less than fourteen (14) hours.
5-G-2-d-(5) If the pilot is given a rest under Section 5-
G-2-d-(4)-(b) above, after completing this rest and
provided he is notified prior to 1700 on the day
following the rest, the pilot may be:
5-G-2-d-(5)-(a) Assigned to join the balance of his If notified by 1700
original trip, or following a 14
hour minimum
5-G-2-d-(5)-(b) Reassigned other flying under rest a pilot may be
Section 20-F for which the pilot is legal, except that assigned the
such other flying shall be scheduled to return the balance of his
pilot to his home domicile no later than two (2) original trip,
hours after the scheduled arrival time of his original reassigned other
trip, or flying under 20-F,
or released from
5-G-2-d-(5)-(c) Released from further duty, except further duty.
deadhead if necessary to return to his home
domicile.
5-G-2-d-(6) Following any rest period under this
subparagraph d, a reserve will not be available for any
assignment until he receives the required rest under
Section 5-G-2-d-(4)-(b) above.
5-G-2-d-(7) A pilot shall receive incentive pay in 5 hour incentive
accordance with Section 3-B-7-b of the Agreement. pay
5-G-3- Minimum Scheduling and Actual Credit
Provisions
The following schedule and actual credit provisions shall Flight time credit
apply to the construction of schedules for preferencing and in provisions for
the actual operation and wherever this Agreement refers to schedule and
"credit hours" or "pay credit." All duty assignments involving actual operations
line flying duty will be considered as having the minimum
Page 86 Section 5-G-3-a
flight time credit applications set forth in this sub-paragraph
G-3.
5-G-3-a- Schedules shall contain a minimum of one (1)
hour's flight time credit for each two (2) hours of duty time
scheduled between 0600 and 2159 and a minimum of one
(1) hour's flight time credit for each one and three-quarter
(1-3/4) hours of duty time scheduled between 2200 and
0559, prorated on a schedule or actual basis whichever is
greater.
5-G-3-b-
5-G-3-b-(1) For Mainline pilots, schedules shall contain M5H average
a minimum of five (5) hours of flight time credit,
averaged, for each on-duty period in multiple duty
period trip sequences or five (5) hours for one (1) duty
period trip sequences. In computing the five (5) hour
minimum, there shall not be included any on-duty
periods which do not involve line flying, and this
provision does not apply to publicity and courtesy
flights. The five (5) hour minimum shall not apply to
any duty period composed solely of deadheading.
5-G-3-b-(2) For Shuttle pilots, schedules shall contain Shuttle M5 1/2H
a minimum of five and one-half (5 1/2) hours of flight average
time credit, averaged, for each on-duty period in
multiple duty period trip sequences or five and one-half
(5 1/2) hours for one (1) duty period trip sequence. In
computing the five and one-half (5 1/2) hour minimum,
there shall not be included any on-duty periods which
do not involve line flying, and this provision does not
apply to publicity and courtesy flights. The five and
one-half (5 1/2) hour minimum shall not apply to any
duty period composed solely of deadheading.
5-G-3-c- Schedules shall contain a minimum of one (1) Trip Rig 1 for 31/2
hour's flight time credit for each three and one-half (3 1/2)
hours elapsed time away from his domicile, prorated on a
schedule or actual basis whichever is greater.
5-G-3-d- When a trip pairing does not provide the
minimum credit provided by sub-paragraph 5-G-3-a, 5-G-3-
b and 5-G-3-c above, the following shall apply:
5-G-3-d-(1) Credit time accrued as a result of the
application of the one (1) for two (2) and/or the one (1)
for one and three-quarters (1-3/4) on-duty formula
when applicable, shall for purposes of credit be added
Section 5-G-3-f Page 87
to the end of the last flight in the on-duty period in
which such credit was accumulated.
5-G-3-d-(2) Credit time accrued as a result of the
application of the one (1) for three and one-half (3 1/2)
hours away-from-domicile formula and/or the minimum
five (5) hours average per duty period {five and one-half
(5 1/2) hours average per duty period for Shuttle
pilots}, shall, for purposes of credit, be added to the
end of the last flight in the away-from-domicile period
in which such credit was accumulated.
5-G-3-e- Minimum Schedule Provisions, Minimum
Actual Credit Provisions or Actual Flight Time
At the completion of each trip pairing, the pay credit value At the completion
of the pairing shall be considered to be the pay credit of the ID the pilot
value of the pairing as computed above, the pay credit will be paid the
value of the credit provisions applied in the actual greater of the
performance of the trip pairing, or the accumulated total credit value in the
flight time performed in that pairing, whichever is greater. schedule or the
A pilot will be entitled to accrue "actual flight time" once value of the duty
the flight has left the blocks for the purpose of flight, rigs applied in the
regardless of whether the segment is cancelled or actual operation
otherwise terminates at a location other than the or the actual flight
scheduled destination. The pilot will be entitled to the time performed
actual flight time accrual on the basis of his actual block to
block time.
5-G-3-f- On a schedule or actual basis, whichever is
greater, deadheading shall provide full flight time credit
and shall be used to offset the minimum credit and actual
provisions provided above.
5-G-3-g- Trip sequences may be scheduled with up to 4 duty period
four (4) duty periods. sequences
5-G-4- When a pilot assigned to a line of flying is reassigned Junior manned or
or junior manned, and the assignment interferes with his reassigned
minimum calendar days off, as provided in sub-paragraph 5- restoration of
G-1-d above, he shall be given additional calendar days free minimum days off
of duty to restore him to his minimum calendar days free of
all duty at his domicile. Should a trip drop provide more than
the required number of days off to restore the minimum to the
pilot, he may be given a Section 20-F standby or flight
assignment on those "extra" days off. The day(s) on which
the pilot will be given such assignment will be by mutual
agreement; unless agreement cannot be reached, in which
Page 88 Section 5-G-5
case a Flight Manager shall make the determination. A
lineholder pilot who picks up open flying under Section 20-H
shall not reduce scheduled days off below twelve (12) for the
month. If he flies into a day off as a result of an irregular
operation, he is not subject to the provisions of this sub-paragraph.
Trips dropped under this provision will not affect
the pilot's minimum guarantee.
5-G-5- Reserve On Standby Status
5-G-5-a- When a pilot on reserve is called to the airport Reserve airport
on a standby basis without a specified flight assignment, standby
his duty time shall begin at the time he is scheduled to
report or actually reports, whichever is later. The time on
standby duty plus the scheduled time of the assigned
flight cannot exceed the schedule maximum set forth in
Paragraph 5-G-1-a.
5-G-5-b- A pilot on standby duty will receive five hours Flight time credit
(5:00) pay credit and have his total allowable monthly for reserve
flight time reduced by five hours (5:00) for each standby standby
assignment which does not result in a flight assignment. assignment
5-G-5-c- A pilot shall not be held on standby duty at the Time limits on
airport in excess of four (4) hours and any assigned flight standby
must be scheduled to depart no later than five (5) hours of assignment
his report time. If a pilot is released from standby duty
without a flight assignment, he shall be entitled to legal
rest and may, at his option, revert to the bottom of the
FIFO list.
5-H-
The following provisions shall apply to trip pairings in which Hawaii Special
at least two (2) segments involve flying to or from Hawaii: Provisions
5-H-1- Flying to and from Hawaii may be assigned to any
domicile, provided no trip pairing exceeds four (4) duty
periods.
5-H-2- The provisions of Section 5-G-1-a-(1)-(a) and 5-G-2-
a-(1) shall apply to all duty periods except to duty periods
scheduled under sub-paragraph 3 below. When a pilot is
scheduled for duty aloft in excess of eight (8) hours as
provided by sub-paragraph 3, the duty period will not be
scheduled for more than fourteen (14) hours, nor will a pilot
so scheduled be required to remain on duty over sixteen (16)
hours without his concurrence.
Section 5-H-3 Page 89
5-H-3- Notwithstanding Section 5-B-8, non-stop flights may
be scheduled which exceed eight (8) hours flight time, but no
more than twelve (12) hours, provided that such flight is the
only flight segment in that duty period.
5-H-4- Notwithstanding Section 5-B-8, 5-G-1-c and 5-G-2-c,
trip pairings scheduled under this provision shall provide ten
hours and forty-five minutes (10:45) free from duty after duty
periods which contain eight (8) or fewer hours of flight time.
For duty periods which contain more than eight (8) hours of
flight time, the pilot shall have sixteen (16) hours free from
duty following such period.
5-H-5- Notwithstanding Section 5-B-8, Mainland-Hawaii-Mainland West Coast pilots
or Hawaii-Mainland-Hawaii flights may be only may be
scheduled in one (1) duty period only if the first segment is scheduled for
scheduled to depart between 0759 and 1301 domicile time of turn-arounds in a
the pilot so assigned. Trip pairings scheduled under this sub-paragraph single duty period
may be assigned only to the LAX, SFO, SEA and
HNL domiciles; except coverage may be provided from any
domicile under the provisions of Paragraph 8-L-6.
5-H-6- For flying from Hawaii to the Mainland when the first
scheduled Mainland landing is between 0259 and 1159 local
time, only one (1) landing will be scheduled in that duty
period.
5-H-7- Notwithstanding the provisions of Section 5-B-9, a
pilot involved in flying to or from the Mainland and Hawaii
may be scheduled to exceed thirty (30) hours in seven (7)
days provided that the segment that exceeds thirty (30) hours
in seven (7) days is an overwater segment.
Page 90 Section 5-H-7
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Section 6-A Page 91
Section 6
Seniority
6-A- General
6-A-1- Pilot seniority shall accrue from the date of hire as a Establishment of
student pilot with the Company, as defined by Section 2-X of pilot seniority date
this Agreement, or with other companies whose operations
have been taken over by the Company prior to signing of this
Agreement. Seniority shall continue to accrue from such date
and shall not cease to accrue or be lost except as provided in
this Section and Section 7 and 12 of this Agreement. The
accrual of Pilot seniority is contingent upon the successful
completion of initial training as a student pilot.
6-A-2- Seniority shall govern all pilots in the case of
promotion and demotion, their retention in case of reduction
in force, their assignment or reassignment due to expansion
or reduction in schedules, their reemployment after release
due to reduction in force and their choice of vacancies,
provided that the pilot's qualifications are sufficient for the
conduct of the operation. In the event that a pilot is
considered by the Company not to be sufficiently qualified,
the Company shall immediately furnish such pilot written
reasons therefor. This Section shall apply unless otherwise
specifically excepted by some other provision of this
Agreement.
6-B- Seniority Lists
Two official Flight Officer Seniority Lists shall be published Company will
annually. One shall be called the Pilot Eligibility Seniority List publish annually 2
and shall contain the names of all flight officers who are official lists. S/O
eligible to be awarded Captain, First Officer and International Eligibility List and
Relief Pilot assignments. The second list shall be called the the Pilot Eligibility
Second Officer Eligibility Seniority List and shall contain the Seniority List
names of all flight officers who are eligible to be awarded
Second Officer assignments. The Second Officers Eligibility
Seniority List shall recognize the special rights of those who
have been designated "Career Second Officers" under the
Letter of Agreement, dated June 11, 1963. Copies of the
United Air Lines Pilot Eligibility Seniority List and the Second
Officer Eligibility Seniority List will be brought up to date as of
July 1 of each year and shall be posted and considered the
official list. Each pilot shall be allowed a maximum period of
Page 92 Section 6-C
sixty (60) days after the date of distribution by the Company
of each list in which to protest any alleged omission or
incorrect listing affecting his seniority. A pilot who does not
protest such alleged omission or incorrect listing within sixty
(60) days after the date of distribution by the Company of the
list in which the alleged omission or incorrect listing initially
appears, shall thereafter be precluded from protesting the
same except that when a pilot is on vacation, leave of
absence or sick leave, he shall protest any alleged omission
or incorrect listing within sixty (60) days after returning to
duty. All seniority protests arising from such revised lists
shall be handled in accordance with the procedures outlined
in Section 17 of this Agreement, and, when so handled, the
result forthcoming therefrom shall be final and binding.
6-C- Period of Probation
Pilots shall be on probation for the twelve (12) months of Probation is 12
service as a pilot employee of the Company (measured from month and 165
the pilot's Pilot Longevity Date) and having performed 165 days of work
days of work for the Company. "Work" in this context, will
include pilot duty, reserve availability, training, instruction,
special assignment and all other flight duties for which
compensation is paid. Nothing in this Agreement shall be
construed to prevent the Company from releasing a pilot
during his period of probation regardless of his position on
the System Seniority List.
6-D- Loss of Seniority
Any pilot who resigns from the service of the Company as a
pilot or is discharged as a pilot for just cause shall forfeit all
pilot seniority accrued to the date of such resignation or
discharge.
6-E- Transfer to Non-Flying, Supervisory Duty or Special
Assignment
6-E-1- A pilot transferred to non-flying, supervisory duties or
special assignment shall retain and continue to accrue
seniority.
6-E-2- When a pilot is transferred to non-flying, supervisory
duty or special assignment on account of any physical
incapacity, or becomes sick or injured while on such non-flying,
supervisory duty or special assignment, he shall retain
and continue to accrue seniority during such period of
sickness or injury regardless of whether or not he is able to
Section 6-E-3 Page 93
maintain his airline pilot's certificate or certificates required
for his pilot's status, until he is able to return to flying duty or
is found to be unfit for such duty for a continuous period of
seven (7) years, provided, however, that such period will be
extended to ten (10) years if in the opinion of the Company's
Medical Director, the medical possibility exists for the pilot's
ability to obtain his airline pilot's certificate or certificates
required for his pilot's status within such extended period.
Any pilot who is not granted an extension to ten (10) years
may, at his option, have a review of such determination under
the provisions of Paragraph 14-B, 14-C and 14-D of Section
14.
6-E-3- When a pilot engaged in non-flying, supervisory duty
or special assignments returns to flying duty, he shall assume
his former assignment or, in the event he has bid another
assignment while on such duty, assume such new
assignment.
6-E-4- Any dispute arising hereunder concerning the
physical fitness of such pilot shall be settled in accordance
with Section 14.
6-F-
A pilot, while assigned to supervisory or management duty, shall Management
perform as Captain in line operations only if he holds a Captain bid and pilots flying
shall perform as a First Officer in line operations only if he holds a
Captain, First Officer, or IRP bid. Management pilots shall serve in line
operations on an equipment type assigned by the Company.
Page 94 Section 6-F
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Section 7-A Page 95
Section 7
Reduction In Personnel
7-A-
7-A-1- Any reduction in pilot personnel shall be in the
reverse order of system seniority, except as provided in the
Letter of Agreement between the Company and the
Association, signed June 11, 1963. When it becomes
necessary to furlough pilots covered by this Agreement, at
least thirty (30) days, but not more than one hundred and
twenty (120) days, notice of such furlough shall be given all
pilots affected; provided, however, that when there is no work
because of an Act of God, labor dispute, or other
circumstances over which the Company has no control, pilots
covered by this Agreement may be furloughed without
advance notice. Such pilots furloughed due to reduction in
force shall be reemployed in the order of their seniority at the
time of furlough.
7-A-2- Pilots returning to active service from furlough shall Recalled pilots
be assigned, in accordance with their seniority and will receive travel
preference, to advertised but unfilled assignment vacancies time
on the system as provided in Section 8-F-3-c. If the recalled
pilot is assigned to a domicile other than that from which he
was furloughed, he shall be allowed moving expenses and
travel time in accordance with Section 10 from his former
domicile to the domicile to which recalled. Additionally, pilots
returning from furlough to the domicile from which they were
furloughed will be allowed travel time from their residence
during furlough to their domicile as per Section 10-A-2.
7-B-
When a probationary pilot is furloughed, he shall be
furloughed in accordance with the provisions of this Section.
7-C-
A pilot who has been furloughed due to reduction in force
shall file his address in writing with the Personnel
Department of the Company and shall thereafter promptly
advise the Personnel Department in writing of any change in
address.
Page 96 Section 7-D
7-D-
A pilot shall not be entitled to recall as provided in Paragraph
7-A of this Section and shall forfeit all seniority if he does not
comply with the requirements of Paragraph 7-C of this
Section or if he does not return to the service of the Company
on or before the date specified in the notice offering re-employment,
which date shall be not less than thirty (30)
days, or if such pilot is outside the continental limits of the
United States forty-five (45) days, after notice to return is
sent by registered mail, return receipt requested, or by
telegram to the last address filed with the Personnel
Department. Notice of intent to accept offer of recall from
furlough must be furnished to the Company by telegram or
registered letter within fourteen (14) days from the date of
receipt of recall notice.
7-D-1- Notwithstanding Paragraph D above, a pilot who
accepts employment while on furlough which requires a
contractual commitment for a period not to exceed two (2)
years, shall be allowed to fulfill such obligation and shall be
considered to be on personal leave of absence commencing
with the date of recall until fulfillment of such employment
obligation, provided such pilot has received Company
concurrence prior to such contractual commitment.
7-E-
A pilot furloughed due to reduction in force who returns to Recall from
duty as provided in Paragraph 7-D of this Section shall be furlough
allowed, for seniority purposes, all time accrued prior to such
furlough as well as all time within the period of furlough. All
furloughs shall expire at the end of seven (7) years from the
effective date of such furloughs and any accrued seniority
shall be forfeited; provided, however, that there shall be no
change in the relative seniority position on the System
Seniority List as the result of any furloughs unless the pilot
fails to exercise the privilege provided for in Paragraph 7-D of
this Section. Reinstatement shall be subject to the furloughed
pilot's passing a satisfactory physical examination and to his
possessing the airman's certificate or certificates required for
his pilot status at the time of reinstatement. After
reinstatement, pilots shall be required to serve any unexpired
portion of their probationary period.
Section 7-F Page 97
7-F-
7-F-1- A pilot who has one (1) or more years of service as a
pilot and who is furloughed shall receive furlough pay
equivalent to the minimum monthly flight pay guarantee
based on the type of equipment flown his last full month prior
to furlough for the period of time specified below, except that
no furlough shall be paid where furloughs are caused by an
Act of God, labor dispute or other circumstances over which
the Company has no control.
If pilot has completed: Furlough Pay
1 yr of service 1/2 month furlough pay
2 yrs of service 1 month furlough pay
3 yrs of service 1 1/2 months furlough pay
4 yrs of service 2 months furlough pay
5 yrs of service 2 1/2 months furlough pay
6 yrs of service 3 months furlough pay
7 yrs of service 3 1/2 months furlough pay
8 yrs of service 4 months furlough pay
9 yrs of service 4 1/2 months furlough pay
7-F-2-
A pilot eligible for furlough pay shall receive such paystarting at the time of furlough and such payments shall be at
regular pay periods and continue until all furlough pay credit
is exhausted, except that in no event shall any such payment
be due after his effective date of recall by the Company.
7-F-3- A pilot recalled by the Company who is later Pay for multiple
furloughed shall again be entitled to furlough pay as provided furlough
in Paragraph 7-F-1 of this Section.
7-F-4- The Company may offer furloughed pilots other jobs
in the Company on a voluntary basis. If a pilot volunteers to
accept such job, he will only be eligible for that portion of his
monthly furlough payment which exceeds the amount of his
monthly salary in the volunteer assignment..
7-G-
The Accident-Sickness-Dental Insurance of a pilot (and of his Accident /
eligible dependents) who is furloughed due to a reduction in sickness / dental
force will be continued while he is on furlough for a period of - 90 days
ninety (90) days from the date of his furlough.
Page 98 Section 7-H
7-H-
A pilot who has received notice of furlough shall be exempt from Pilot with furlough
the provisions of Section 8-F-3-a and 8-F-3-b and Section 8-K. notice cannot be
Pilots who are declared surplus while other junior pilots in the bumped
same domicile, status and equipment are exempted under this
provision shall be pay protected on a one-for-one basis for the
period of this exemption. During this period those pilots
qualifying for pay protection shall continue to receive the salary
of the equipment from which displaced.
Section 8-A Page 99
Section 8
Filling Of Vacancies
8-A- Classification of Assignments
8-A-1- Pilot assignments at a domicile shall be classified in Assignments
the status of Captain, First Officer, International Relief Pilot classified
and Second Officer, as applicable, in each of the following
equipment types: B-747-400, B-747, B-777, DC-10, B-767/B-757,
A-320/A-319, B-727, B-737-300/400/500, B-737 and all
Shuttle equipment.
8-A-2- The Company shall each month post on computer, in
Unimatic and in the Pilots' Bulletin Book at all domiciles an
up-to-date list of all pilot assignments.
8-B- Manpower Requirements
The number of Captain, First Officer, International Relief Pilot Minimum
and Second Officer assignments in each equipment type, manpower
requirements
Page 100 Section 8-B-1
when required, shall be determined by the following
procedure:
8-B-1- Scheduled hours
(including MAC) plus flight
time credit
81:00 = pilots8-B-2-
Reserve -17% of item #1 (Captains)
15% of item #1 (First
Officers)
15% of item #1 (second
Officers)
12% of all Shuttle scheduled
hours and flight time credit = pilots
8-B-3-
Charter & extra lifthours 65:00= pilots
8-B-4-
Sick leave manmonths = pilots
8-B-5-
Vacation man months = pilots8-B-6-
Training man months(including PC/PT) = pilots
TOTAL SYSTEM PILOT REQUIREMENTS
FOR 60 DAYS = pilots
Nothing herein shall prevent the Company from bidding or
maintaining additional assignments for reserve coverage by
equipment type in excess of the percentage set forth above.
8-C- Advertising of Vacancies
8-C-1-
8-C-1-a- Vacancies in Captain, First Officer, International Advertise within
Relief Pilot and Second Officer assignments shall exist 30 days after
when, in accordance with Section 8-B, there is a need for vacancy exists
additional assignment for an anticipated period of sixty
(60) days or more. Vacancies shall be advertised at all
domiciles as far in advance as possible but not later than
thirty (30) days after such vacancy exists.
8-C-1-b- Vacancies which were not expected to exist
more than sixty (60) days, if existing at the end of sixty
(60) days, shall be reviewed with the System Schedule
Committee. Such vacancies shall be advertised within five
Section 8-C-2 Page 101
(5) days after such review unless it is mutually agreed that
the vacancies will cease to exist within a reasonable
period.
8-C-2- All such vacancies shall be open to bid by the pilots
eligible to bid under the provisions of Section 8-D. Vacancy
bulletins shall state the number and status of primary
vacancies to be filled; the anticipated effective date of the
assignment; the anticipated dates training is to start; the
equipment type involved; and the domicile at which the
vacancy exists. All vacancies posted together shall share a
common closing date and a common effective date, except
that DC-10 and B-727 Second Officer vacancies which are
posted at the same time as other vacancies, shall share the
same closing date, but may have an earlier advertised
effective date. If, as a result of this special Second Officer
provision, a pilot has an opportunity to bid a vacancy which
has an earlier effective date than an assignment previously
bid, he shall be eligible for such assignment, notwithstanding
any prior freeze. Vacancy bulletins shall be posted not later
than noon local time on the date of the bulletin and shall
close not sooner than noon local time on the tenth (10th) day
following the date of the bulletin.
8-C-3- Bidding on Vacancies
8-C-3-a- During the time when primary vacancies are
posted for bid, bids will be accepted from eligible pilots for
pilot assignments in all domiciles, status and equipment
types active on the airline. A pilot desiring a change in
domicile, status and/or equipment type should submit bids
for all assignments which he desires, in preference order,
at any time any vacancies are advertised.
8-C-3-b- In addition to the process described in a above, Pilot may submit
pilots who desire to have their bids remain on file and maintain a
indefinitely for consideration in filling future vacancies permanent bid on
may submit "permanent bids." Permanent bids may file
require direct entry by the pilot into the Company's
computer system. A pilot may revise his permanent bid file
at any time, however, the bid on file at the close of each
bidding period shall be the pilot's official bid for those
vacancies.
8-C-3-c- The Company will implement within twelve (12) Conditional
months of the date of the signing of the Agreement, Bidding
conditional bidding for all new equipment domiciles or for
Page 102 Section8-C-3-d
the splitting of an existing domicile (e.g. conversion from
Mainline to Shuttle).
8-C-3-d- Permanent bids as described above shall be Procedure for
considered as cancelled by one of the following: cancellation of
permanent bid
8-C-3-d-(1) Submission of a request to cancel the
permanent bid.
8-C-3-d-(2) Submission of a vacancy bid on any posted
primary vacancies.
8-C-3-d-(3) Being awarded a vacancy as a result of a Including both
bid. permanent and
alternate
passover bids
8-C-4- Awarding of Vacancies
Upon closing of a vacancy bulletin, pilots shall be awarded
the number of assignments needed in each of the advertised
vacancies. At the same time, pilots shall be awarded
assignments, if needed, in domicile, status and equipment
types which have become available due to the assignment of
pilots to fill the advertised primary vacancies. Further, awards
may be made to fill the vacancies resulting from all
subsequent awards. These secondary vacancies will not
have been advertised, but will share the same effective date
as the primary vacancies.
8-C-5-
8-C-5-a- The most senior pilot bidding on an assignment
vacancy, unless excepted by Section 8-C-5-b below, shall
be awarded such assignment. The filling of all vacancies
shall be subject to Paragraph 6-A-2 of Section 6 and
Paragraph 8-D of this Section, provided that, for the
purpose of this Paragraph, the phrase "sufficiently
qualified" appearing in Paragraph 6-A-2 of Section 6
means the pilot's qualifications as an airline pilot,
exclusive of route and equipment qualification, provided
that if the pilot has been given the opportunity to so
qualify and has failed, he may be denied the assignment.
8-C-5-b- When a vacancy or vacancies occur in a status,
equipment type and domicile from which pilot(s) has been
displaced, under the provisions of Section 8-F and 8-K,
the displaced pilot(s) shall for a period of one hundred and
twenty (120) days beyond the effective date of their
displacement be offered in order of seniority the
assignment(s) prior to the awarding of that assignment(s)
Section 8-C-6 Page 103
under the provisions of 8-C. This 120 day period is
measured from the effective date of the surplus to the
bulletin date of the vacancy.
8-C-6-
All vacancies will be advertised for bid and awards made not 6 months
more than six (6) months prior to the effective date of the advertised to
vacancy, except the Company may exceed this time limit if effective date
necessary to meet training requirements after review with the
System Schedule Committee.
8-D- Eligibility To Be Awarded Vacancies
In addition to the provisions stated in 8-C above, a pilot's Bidding
eligibility to vacancies shall be subject to the following restrictions
conditions:
8-D-1- A pilot occupying a Second Officer assignment and
any pilot in his first year of service is eligible to be awarded
any other assignment.
8-D-2- A pilot occupying an International Relief Pilot
assignment is eligible to be awarded any other International
Relief Pilot assignment and any First Officer and any Captain
assignment.
8-D-3- A pilot occupying a First Officer assignment is
eligible to be awarded any other First Officer assignment and
any Captain assignment.
8-D-4- A pilot occupying a Captain assignment is eligible to
be awarded any other Captain assignment.
8-D-5- In addition to the provisions of sub-paragraph 8-D-1, Downbid in status
8-D-2, 8-D-3 and 8-D-4 above, a pilot holding an assignment
as a A-320/319, B-727, B-737-300/400/500, B-737 or Shuttle
B-737-300/400/500 Captain may bid and be awarded a
vacancy in a B-747-400, B-747 or a B777 First Officer
assignment and a pilot holding an assignment as a B-767/
757, A-320/319, B-727, B-737-300/400/500, B-737 or Shuttle
First Officer may bid and be awarded a vacancy in a B-747 or
DC-10 Second Officer assignment or an International Relief
Pilot (IRP) assignment. A pilot awarded an assignment under
the provisions of this sub-paragraph may be required to fill
such assignment for a period of twenty-four (24) months
following the date on which he is activated in the assignment.
Further, a Captain who is awarded a First Officer assignment
Page 104 Section 8-D-6
under the provisions of this sub-paragraph shall be ineligible
to bid and be awarded any Shuttle, B-737, B-737-300/400/
500, B-727, A-320/319, or B-767/757 Captain assignment
during that twenty-four (24) month bid restriction,
notwithstanding the provisions of 8-D-6-c, below.
8-D-6-
8-D-6-a- Notwithstanding the eligibility provisions of Bidding freezes
Section 8, Paragraph 8-D-1, 8-D-2, 8-D-3 and 8-D-4, when
a pilot is awarded an assignment through bidding, he may
be ineligible to bid and be awarded any other vacancy with
an effective date earlier than fourteen (14) months
(twenty-four (24) months, if scheduled training includes
more than twelve (12) days which contain training duty)
after the first day of the month following the month he was
awarded his bid. In determining the number of scheduled
training days for this application only, INS, overwater and/
or any other specialized training shall not be counted
when such qualification(s) is not required of all pilots
assigned to that equipment type and status.
8-D-6-b- The above bid restriction shall also apply to a Freeze
pilot who requires training upon being hired as a pilot or restrictions for
upon being recalled from furlough; except that the period recallees and new
of restriction shall begin upon the date the pilot is hires
assigned to training.
8-D-6-c- The above provision shall not restrict a pilot
from bidding up in status (i.e., Second Officer to
International Relief Pilot to First Officer to Captain) at any
time; however, a pilot who vacates an awarded
assignment by bidding up in status, may be ineligible to
bid and be awarded any other vacancy with an effective
date earlier than the fourteen (14) (twenty-four (24))
months provided above, plus the amount remaining
unfulfilled from his prior assignment. Notwithstanding the
above bidding restriction, a pilot who is awarded a
vacancy and subsequently receives another award to a
higher status prior to beginning training for the initial
vacancy award shall not incur any bidding restriction as a
result of the initial vacancy award.
Section 8-D-6-d Page 105
8-D-6-d- A pilot who is not within a bid restriction period Pilot who is not
as provided by this sub-paragraph D-6 and who is serving a freeze
awarded a vacancy in his present status and equipment may be awarded a
type at another domicile will be entitled to reimbursement lateral with no
of moving expenses as provided in Section 8-E-2-b and freeze if he elects
may incur a fourteen (14) month bid restriction as not to take the
provided in Section 8-D-6-a. Such a bid restriction, paid move
however, will not be imposed until the pilot incurs an
expense associated with exercising his paid move
entitlement. Conversely, if the pilot does not seek
reimbursement from the Company for expenses
associated with his relocation, a bid restriction period will
not be imposed. In the event a bid restriction is imposed,
the period of the bid restriction will run fourteen (14)
months from the first day of the schedule month following
the posting of the tentative award, regardless of when the
expense was first incurred. For the purpose of this
provision, the phrase "incurs an expense" shall not
include the moving provisions contained in Section 10-A-2-
a, and 10-A-2-c and the use of the applicable
authorized travel for the purposes of house-hunting.
8-D-7- A pilot who is ineligible to be awarded a vacancy in Pilot serving a
his present status and equipment type at another domicile freeze may be
because of the bid restrictions of 8-D-6 above, may awarded unlimited
nonetheless be awarded such vacancy under the following laterals with no
conditions: additional freeze
or paid moves
8-D-7-a- If awarded, he shall receive no new paid move
nor travel time entitlement as a result of his new
assignments.
8-D-7-b- He shall continue to serve out the period of his
bid restriction associated with the assignment held prior to
the lateral award, but shall incur no additional bid
restriction.
8-D-7-c- This provision shall be available to a pilot on an
unlimited basis.
8-D-8- .Only pilots who have met the basic prerequisite
piloting requirements for Air Line Transport Pilot Certificate,
including successful completion of the written examination
and notification to the Company of this completion, and who
have completed twelve (12) months of service as a United
First Officer shall be eligible to bid or bump to Captain
vacancies.
Page 106 Section 8-D-9
8-D-9- Only those pilots who are either active Second
Officers or have completed the FAA Flight Engineer turbo-jet
written exam and have so notified the Company, shall be
eligible to bid or bump an International Relief Pilot vacancy.
8-D-10- Only those pilots who have successfully completed
the FAA Flight Engineer turbo-jet written exam or who
possess a valid Flight Engineer's certificate and have so
notified the Company may bid or bump to a Second Officer
vacancy.
8-E- Awarding of Vacancies
8-E-1- A successful bidder on a vacancy at his domicile
shall take over his new assignment on the date that the flying
supporting such assignment actually begins or when training
is completed for such assignment, whichever is later. If the
new assignment is planned to be activated prior to the first
day of the pilot schedule month, he may exercise his seniority
in his awarded assignment under Section 20-D. If, however,
the new assignment is activated at a time which precludes his
exercising his seniority in his awarded assignment under the
Section 20-D, he will be assigned as a reserve in his awarded
status and equipment type until the commencement of the
next schedule for which he exercises his seniority under the
schedule selection procedure.
8-E-2-
8-E-2-a- A successful bidder on a vacancy which
required a change in domicile shall take over his new
assignment on the date that the flying supporting such
assignment actually begins or when training is completed
for such assignment, whichever is later. If the new
assignment is planned to be activated at a time which
permits his exercise of seniority in his awarded
assignment under Section 20-D, he shall be afforded such
opportunity. If, however, the new assignment is activated
at a time which precludes his exercising his seniority in his
awarded assignment under Section 20-D, he will be
assigned as a reserve in his awarded status and
equipment type under the commencement of the next
schedule for which he exercises his seniority until the
schedule selection procedure.
8-E-2-b- A pilot who is awarded a vacancy at another Paid move
domicile shall be entitled to moving expenses upon application
Section 8-E-2-c Page 107
activation of that vacancy, under the provisions of Section
10.
8-E-2-c- Should a pilot be activated into his new Salary proration
assignment during a schedule month, his salary shall be
prorated as provided in Section 3-C.
8-E-3- A pilot shall not be prevented by the Company from
taking over his awarded assignment in excess of ninety-two
(92) days after the awarded assignment is activated. If a pilot
is prevented by the Company from taking over his new
assignment after it has been activated, he shall be
compensated as follows until he is released by the Company
to take over his new assignment:
8-E-3-a- He shall receive for the period involved a Salary proration
monthly salary based on the status and equipment type of
his awarded assignment, or what he actually earned,
whichever is greater; prorated, as provided by Section 3-C,
if the change is mid-month.
8-E-3-b- Further, if the successful bidder has been Expenses
prevented by the Company from taking over his new allowance for
assignment as specified in sub-paragraph 8-E-2 above, or delayed activation
after the awarded vacancy is activated, whichever is later,
in excess of forty-five (45) days, he shall receive an
expense allowance in accordance with Section 4-E-1 of
this Agreement until his awarded assignment is activated.
8-E-3-c- An awarded vacancy shall be considered to
have been activated at the domicile, for the application of
this sub-paragraph E-3, on a man-for-man basis if:
8-E-3-c-(1) A more junior pilot who was awarded such Man-for-man
assignment on the same vacancy bulletin as the application
affected pilot is activated into the same assignment; or
a pilot who was awarded such assignment on a
vacancy bulletin subsequent to the bulletin awarded
the affected pilot is activated into the same
assignment; or
8-E-3-c-(2) Subsequent to the advised effective date of
the assignment, temporary duty pilots are assigned to
the domicile in the status and equipment type of the
affected pilot's awarded assignment.
Note: Intent of "man-for-man" in this application:
In the event two assignments are to be activated, if 2nd
and 4th are activated then #2 triggers pay for #1 and
#4 triggers pay for #3.
Page 108 Section8-E-4
8-E-4- A successful bidder who has been prevented by the
Company from taking over his new assignment under the
provisions of sub-paragraph 8-E-3 and is then released to
take over such assignment at a time which precludes his
exercising his seniority in his awarded vacancy under the
schedule selection procedures (Section 20-B), will be
assigned as a reserve in his awarded status and equipment
type until the first of the month following his release; or, if a
schedule selection procedure occurs as a result of a
schedule change during the month, until the effective date of
such schedule change.
8-F- Insufficient Bidders
8-F-1- In the event there are insufficient bids received on a Assignment
Captain vacancy, the Company may fill such vacancy by insufficient
assigning the junior pilot at the domicile at which the vacancy Captain bidders
exists who meets the requirements specified in Paragraph 8-
D-8 of this Section. If no junior pilot at the domicile meets
these requirements then the Company may assign the junior
pilot on the system who meets these requirements. Pilots
transferred from one domicile to another under the provisions
of this sub-paragraph shall be transferred in accordance with
Section 8 and receive moving expenses in accordance with
Section 10 and shall be given as much advance notice as
possible but not less than thirty (30) days to assume such
vacancy.
8-F-2- In the event there are insufficient bids received on a Assignment
First Officer vacancy, the Company may, with not less than insufficient First
thirty (30) days notice: Officer bidders
8-F-2-a- Fill such vacancy by assigning the junior pilot at
the domicile, or
8-F-2-b- Fill such vacancy by assigning any surplus
pilots who desire to move in order of seniority from the
domicile at which a surplus exists. If no pilots desire to
move, the Company may then move pilots from that
domicile to fill the unfilled vacancy in reverse order of
seniority. Pilots transferred from one domicile to another
under the provisions of this sub-paragraph shall be
transferred in accordance with Section 8 and receive
moving expenses in accordance with Section 10.
8-F-3- In the event there are insufficient bids received on an Assignment
International Relief Pilot vacancy, the Company may, with not insufficient IRP
less than thirty (30) days notice: bidders
Section 8-F-3-a Page 109
8-F-3-a- Fill such vacancy by assigning the junior eligible
Second Officer at that domicile.
8-F-3-b- Fill such vacancy by assigning any surplus
eligible Second Officer who desires to move in order of
seniority from the domicile at which a surplus exists. If no
eligible Second Officer desires to move, the Company
may then move any eligible Second Officer from that
domicile to fill the unfilled vacancy in reverse order of
seniority. Second Officers transferred from one domicile to
an-other under provisions of this sub-paragraph shall be
transferred in accordance with Section 8 and receive
moving expenses in accordance with Section 10.
8-F-4- In the event there are insufficient bids received on a Assignment
Second Officer vacancy, the Company may, with not less than insufficient
thirty (30) days notice: Second Officer
bidders
8-F-4-a- Fill such vacancy by assigning the most junior Exemption for
pilot at the domicile who is not exempted by the provisions pilots with
of Section 7-H. furlough notice
8-F-4-b- Fill such vacancy by the following procedure:
Implement the provisions of Section 8-K-1 to surplus
Second Officers in a domicile(s) and equipment type who
are not exempted by the provisions of Section 7-H. At the
same time, the Company may issue a conditional 8-K-1
surplus letter to an equivalent number of pilots, in each
domicile and equipment type, who are junior to the
originally surplused Second Officers and who may become
surplus as a result of their bumps. The Company will then
process all bumps which are necessary to relocate the
junior pilots into assignments where they will no longer be
surplus, according to their seniority and preferences. All
pilots who received conditional surplus notice will be
advised of his bump assignment or that he is not surplus
and his conditional notice is cancelled.
8-F-4-c- Fill such vacancy by assigning pilots being
recalled from furlough.
8-F-5- In the event a vacancy is not filled within three (3) Cancellation of
months of the date of the award bulletin, the vacancy shall be unfilled vacancies
cancelled.
Page 110 Section 8-F-6
8-F-6- A surplus of pilots will be considered to exist at a
domicile when pilots who have been displaced from their
assignment have not exercised a bump or do not have
sufficient seniority to revert to another assignment at their
domicile.
8-F-7- Notwithstanding the provisions of sub-paragraph 8-F-2,
8-F-3 and 8-F-4 of this Paragraph and Paragraph 8-C-1 of
Section 8, bulletined but unfilled Second Officer, IRP, and
First Officer vacancies and secondary vacancies in Second
Officer, IRP, and First Officer assignments may be used by
the Company for the assignment of newly hired but
unassigned pilots. This paragraph shall not be applicable
while pilots are on furlough.
8-G- Cancellation or Delay In Activation Of Assignment
8-G-1- In the event an awarded assignment is cancelled Bumping rights
prior to the effective date specified in the bulletin awarding after cancellation
the vacancy, the pilot awarded such assignment shall retain of awarded
his present assignment and, if any pilot junior to him has assignment prior
been awarded a vacancy which, he could have bid and been to effective date
awarded, had he not been restricted by the provisions of
Section 8-D-5 at the time his cancelled assignment was
awarded or during the period he held such assignment, he
may within twenty (20) days of notification of such
cancellation bump into the assignment status and equipment
type which the junior pilot was awarded. The pilot exercising
such bump will be considered as though he had bid and been
awarded the vacancy awarded the pilot junior to him.
8-G-2- If the unactivated assignment is cancelled, on or Bumping rights
after the advertised effective date, the pilot shall have after cancellation
bumping rights as established in Paragraph 8-K-2, 8-K-4, 8-K- of awarded
5, 8-K-6, 8-K-7 and 8-K-8 of this Section, and shall assignment after
exercise any bump within twenty (20) days of the date he is effective date
notified of the cancellation of his awarded assignment. For
the purposes of Paragraph 8-K-4, the date of displacement
shall be the date that the pilot notifies the Company of his
intent to bump. In the event the assignment is cancelled and
the pilot exercises a bump, he shall continue to receive pay
for the cancelled assignment, in accordance with Paragraph
8-E-3-a of this Section until he is activated in the assignment
into which he has bumped.
Section 8-G-3 Page 111
8-G-3- If a pilot is awarded an assignment and such
assignment is not activated by the Company within sixty-two
(62) days (or two (2) schedule months, if earlier), including
the effective date specified in the bulletin advertising the
vacancy, and the assignment has not been cancelled, the
pilot shall be paid the greater salary of his current or awarded
assignment until such time that the assignment is either
activated or cancelled. If the pilot exercises a bump, he shall
continue to receive pay for the cancelled assignment, in
accordance with Paragraph 8-E-3-a of this Section until he is
activated in the assignment into which he has bumped.
8-G-4- If at the end of ninety-two (92) days or (three (3) Bumping rights
schedule months, if earlier), including the effective date after 92 days
specified in the bulletin advertising the vacancy, such
assignment has not been cancelled or activated, a pilot may
at his option exercise bumping rights in accordance with
Paragraph 8-K-2, 8-K-4, 8-K-5, 8-K-6, 8-K-7 and 8-K-8 of this
Section or be eligible to bid any vacancy or continue to
receive compensation as provided in sub-paragraph 3 above.
Should the pilot bid or bump to another assignment under this
provision, he shall continue to receive any delayed activation
pay for which he has previously qualified until his activation
into the new assignment.
8-H- Failure To Qualify For Awarded Assignment
In the event a pilot bids or bumps into a new assignment and
fails to satisfactorily complete the training required to qualify
him for such assignment, or fails to qualify on his new
assignment after completing the training required, he shall be
considered as not having vacated his previous assignment,
and if his previous assignment no longer exists, he shall have
bumping rights in accordance with Section 8-K unless action
has been taken by the Company under Section 6-A-2.
8-I- Order of Activation of Assignments
8-I-1- The order of activation of awarded assignments in a
status and equipment type at a domicile shall be in
chronological order of the award bulletins for such
assignments, notwithstanding the respective bulletined
effective dates of such vacancies or the relative seniority of
the pilots awarded such assignments.
Page 112 Section 8-I -2
8-I-2- When awarded assignments are cancelled prior to
their activation, the order of cancellation of such assignments
in a particular status and equipment type at a domicile shall
be in reverse chronological order of the award bulletins for
such assignments, notwithstanding the respective bulletined
effective dates of such vacancies or the relative seniority of
the pilots awarded such assignments.
8-I-3- The date of acquiring an assignment shall be
considered that date which appears on the publication of the
award bulletin. The date for pay purposes shall be
considered that date on which the pilot physically assumes
the duties of his new assignment; or, if prevented by the
Company from assuming his new duties, the date on which
he would have assumed the duties of his new assignment
had the Company not prevented him from doing so.
8-J- Reduction in Assignments
In the event there is a reduction in Captain assignments, the
procedures specified in Section 20-A-2-c of the Agreement
shall be followed to determine at which domicile the
assignments shall be reduced. The number of Captain
assignments for each domicile in the affected equipment
shall be determined by the number of Captains assigned to
lines of flying for the full month at the time of publication of
the pilots' schedules.
8-K- Displacement Rights
8-K-1- If the Company determines that an excess of Surplus
Captain, First Officer, International Relief Pilot or Second notification
Officer assignments exists in an equipment type at a
domicile, the Company may give notice to the pilots affected
that they are surplus in their assignment, status and Time limits for
equipment type and will be displaced from their assignment bumping
on a specified date. Such notice shall be given not less than
thirty (30) days nor more than one hundred twenty-five (125)
days prior to the date of displacement. (Date of displacement
is also known as "surplus" date.) Displacement of pilots will
be made in inverse order of seniority, unless exempted by the
application of Section 7-H. Any pilot who has been notified of
the impending discontinuance of his assignment, must
exercise bumping rights as established in sub-paragraph 8-K-2
of this Paragraph and shall have until twenty (20) days after
notification of specified date of the discontinuance to
exercise such bumping rights. Official notice will be conveyed
through the pilot's Company mail box. If, however, a pilot's
Section 8-K-1-a Page 113
schedule shows that he does not have any duty scheduled
within seven (7) days following the initiation of the notice, the
Company will make an effort to contact him by telephone. If
this attempt is unsuccessful, a letter will be sent by U.S. Mail
to his home of record. A pilot exercising bumping rights shall
be maintained in his present assignment until he assumes his
new assignment, except as provided for in sub-paragraph 8-
K-4 of this Paragraph.
8-K-1-a- A pilot notified of his displacement under the Surplus
provisions of this Paragraph may have that displacement cancellation
cancelled should the surplus be reduced or cease to exist.
Such cancellations will be in seniority order.
8-K-1-b- If a surplus is declared by the Company, any Pilot who bids out
pilot who bids out of the surplus situation shall be entitled of surplus
to a paid move and shall not receive any freeze. The situation paid
surplus will be reduced by the number of pilots who bid move no freeze
out of the surplus situation.
8-K-2-
8-K-2-a- A pilot who has bumping rights under the Pilots with
provisions of this Paragraph may bump into any status on bumping rights
any equipment at any domicile where a pilot junior to him cannot bump
(excluding pilots who remain surplus after the application pilots with
of Section 8-K-3 below or pilots exempt from surplus furlough notice
under the provisions of Section 7-H) holds an assignment,
including an assignment awaiting activation, in such
status and equipment type. A pilot will exercise any of the
bumps provided for in this Paragraph by notice in writing
to the Company and shall begin his new assignment on
the effective date of his displacement or when training is
completed for such assignment, whichever is later;
however, the Company may utilize the provisions of
Paragraph 8-K-11 below when activating such pilot. If the
new assignment is planned to be activated prior to the first
of the pilot schedule month, he may exercise his seniority
in his new assignment under Section 20-D. If, however,
the new assignment is activated at a time which precludes
his exercising his seniority in his new assignment under
Section 20-D, he will be assigned as a reserve in his new
status and equipment type until the commencement of the
next schedule for which he exercises his seniority under
the schedule selection procedure. If the new assignment
is at other than his present domicile, he shall be granted
time, to be taken at his option, allowed by the Company
Regulations, for traveling from his old domicile to his new
Page 114 Section 8-K-2-b
domicile. The pilot's applicable monthly salary will not be
reduced for such period of absence from duty.
8-K-2-b- Notwithstanding sub-paragraph 8-K-2-a above
and 8-K-4 and 8-K-8 below, when a surplus of pilots is
expected to exist for more than sixty (60) days, such
surplus may be temporarily assigned to another
equipment type in their current status and at their domicile
for a period not to exceed one hundred and eighty-two
(182) days. Such assignments will be made on an "offer
and accept" basis of the qualified pilots and such pilots
shall be pay protected as provided in Paragraph 8-E-3 of
this Section until they are returned to their permanent
equipment or have been declared surplus as provided in
8-K-1 of this Paragraph.
8-K-3- Notwithstanding the provisions of 8-K-1 and 8-K-2 Voluntary surplus
above, any pilot holding an assignment in the same domicile,
status and equipment type as a pilot who has been given
surplus notice may, on a man-for-man basis, volunteer to
accept the surplus for a more junior surplus pilot. When
surplus notices are given, the Company will advertise for
volunteers, indicating the seniority range which will
determine the bumping rights of any volunteer(s). A volunteer
shall submit his request indicating the domicile(s), status(s)
and equipment type(s) to which he wishes to bump and he
shall be accepted as a volunteer only if his bump can be
granted, based upon the seniority of the pilot he replaced on
the surplus notice. Volunteers will be accepted in seniority
order up to the number of the declared surplus notice as
adjusted by the provisions of Section 8-K-9 Such volunteers
will be entitled to a paid move under the provisions of Section
10-C. The number of pilots to be involuntarily surplused shall
be reduced by one for each volunteer accepted.
8-K-4- If as a result of exercising bumping rights training is Salary application
required, a pilot will remain in the status and equipment type for bumping pilot
of his former assignment until such time as training is
completed or until he reports to his new assignment,
whichever is later. If training for the new assignment has not
begun within thirty (30) days prior to the pilot's displacement
date, as established in Paragraph 8-K-1 above, he shall be
paid, on his displacement date, his current salary or the
salary of the assignment to which he bumped, whichever is TDY or 8-L-6
greater. The pilot will not receive such pay, however, if the assignment up to
delay in training resulted from vacation, sick leave or a leave 60 days
of absence. If the equipment type from which displaced is no
Section 8-K-5 Page 115
longer being flown by that domicile, the displaced pilot will be
available for either TDY or 8-L-6 assignments, at his option,
until he begins training for his new assignment or for sixty
(60) days, whichever is less. The pilot may choose either
option on a monthly basis.
8-K-5- If a pilot bumps into an assignment awaiting
activation and he cannot be utilized in his old assignment, he
may be required to function in the highest status in any
equipment type for which he has been trained and which he
can be utilized at his present domicile until his new
assignment is activated. If he cannot be utilized at his
present domicile he may, notwithstanding Section 8-L-3, be
assigned to temporary duty in the status and equipment type
from which being displaced until his new assignment is
activated. During such temporary duty assignment, he will be
provided with NRPS and OMC (Priority F) transportation to
and from his present domicile on his scheduled days off.
8-K-6- A pilot who bumps into an assignment awaiting
activation shall for the application of Section 8-1, be
considered as though he had bid and been awarded the
vacancy awarded the pilot junior to him.
8-K-7- A pilot exercising bumping rights under this Paid move for all
Paragraph which involve a change in domiciles shall be bumps
allowed moving expenses in accordance with Section 10.
8-K-8- If a pilot is a successful bidder or has exercised
bumping rights as specified in Section 8-K, he shall be given
the opportunity to begin transition training in such equipment
as soon as practicable but in no case later than six (6)
months from the date such pilot qualified under Section 8-E-3.
8-K-9- The number of pilots declared surplus in a domicile, Surplus
status and equipment type shall be reduced by the number of reductions with
pilots awarded vacancies during the twenty (20) day period volunteers
after the notification of displacement.
While functioning in either of the above types of assignment,
such pilot shall be paid at the rates applicable to the
assignment from which he was displaced or the rates
applicable to the assignment in which he is functioning,
whichever is greater.
8-K-6- A pilot who bumps into an assignment awaiting
activation shall for the application of Section 8-I, be
considered as though he had bid and been awarded the
vacancy awarded the pilot junior to him.
Paid move for all
bumps
8-K-7- A pilot exercising bumping rights under this
Paragraph which involve a change in domiciles shall be
allowed moving expenses in accordance with Section 10.
8-K-8- If a pilot is a successful bidder or has exercised
bumping rights as specified in Section 8-K, he shall be given
the opportunity to begin transition training in such equipment
as soon as practicable but in no case later than six (6)
months from the date such pilot qualified under Section 8-E-3.
Surplus
reductions with
volunteers
8-K-9- The number of pilots declared surplus in a domicile,
status and equipment type shall be reduced by the number of
pilots awarded vacancies during the twenty (20) day period
after the notification of displacement.
Page 116 Section 8-K-10
Grandfather rights
8-K-10- Should pilots be declared surplus while junior pilots remain in the same domicile, status and equipment type because of the exemption provided under Section 7-H and should the anticipated furlough subsequently be cancelled, the pilots declared surplus shall be protected as follows:
8-K-10-a- All pilots previously exempted under Section 7-H shall be immediately declared surplus, or
8-K-10-b- Those pilots who had involuntarily bumped to
another assignment shall be immediately given the
opportunity in seniority order to return to their prior
assignment, provided further that the number of pilots
exercising this option shall not exceed the number of
pilots previously exempted under Section 7-H at that
domicile, status and equipment type. If the pilot has
moved under the provisions of Section 10 as the result of
his bump assignment and elected to return to his prior
assignment as the result of this sub-paragraph, he shall
again be entitled to a paid move under the provisions of
Section 10 back to the domicile of the prior assignment.
Bump activation
and restrictions
8-K-11- Notwithstanding the provisions of this Paragraph K,
the Company may activate a pilot in a bump assignment
earlier or later than specified above provided that:
8-K-11-a- No pilot will be activated into his bump
assignment more than fifteen (15) days prior to his date of displacement nor less than thirty (30) days after date of displacement as established in 8-K-1 above.
8-K-11-a-(1) When the activation is early into a higher paying assignment the pilot shall receive pay for his new assignment upon activation.
8-K-11-a-(2) When the activation is early into a lower paying assignment the pilot so activated shall continue to receive pay at his former rate until the date of his displacement under 8-K-1 above.
8-K-11-b- When the activation is delayed into a higher
paying assignment, the pilot so delayed shall begin
receiving pay at the higher rate, if on the effective date of his surplus he is trained for his bump assignment.
8-K-11-c- Within a given status, domicile and equipment type, when the activation is delayed into a lower paying assignment, the most senior pilot with the same surplus date who is already activated into a lower paying assignment, shall continue to receive pay at his former rate so long as the junior pilot does, unless the junior pilot.
Page 117 Section 8-L
is not trained due to vacation, sick leave or a leave of
absence. This application shall be on a man-for-man
basis.
8-L- Temporary Duty Assignments
Definition of TDY
and hotel
availability
8-L-1- The Company will provide a hotel room to any pilot
assigned TDY for the entire duration of the TDY assignment.
For purposes of this paragraph, a TDY assignment begins
one (1) day before the pilot's first required day on duty and
ends one day after completion of his last duty period. Should
the pilot return to his home domicile or residence during any
period of days off, the Company may ask the pilot whether
the hotel room should be canceled. However, the Company
may only cancel the hotel room at the TDY location with pilot
concurrence.
TDY assignments
pilots may bid
TDY
8-L-2- Selection of pilots for involuntary temporary duty
assignments shall be from pilots functioning as reserves in
the status and equipment type needed for the temporary duty
assignment. Temporary duty assignments shall not reduce
reserve coverage at a domicile below required levels in any
status or equipment type. Assignment of eligible reserves for
temporary duty shall be in inverse order of their seniority at
the domicile regardless of the reserve days off schedule,
except pilots may volunteer and be assigned temporary duty
in order of their seniority. Any pilot may volunteer for TDY at
any domicile(s) as part of the monthly schedule preferencing
procedure as follows:
Voluntary TDY
8-L-2-a- Pilots volunteering for TDY will preference and
be awarded local schedules, as provided by Section 20. In
addition, they will indicate to which domiciles they desire
to be sent and which reserve days off they prefer.
Voluntary TDY
8-L-2-b- To the extent that TDY is needed from the
domicile, the volunteers who are available for the full
month will be assigned in seniority order to the domiciles
they requested. Volunteer TDY assignments will be made
as early as practical and contact will be attempted at least
three (3) days before the beginning of the TDY
assignment. When possible a volunteer for the full month
shall be assigned to the TDY domicile prior to
preferencing in order to allow the volunteer to exercise his
seniority at the TDY domicile. However, all pilots who
have volunteered for TDY must contact the Company on
the next to the last day of the month prior to the month of.
Page 118 Section 8-L-2-c
TDY (if not contacted earlier) to determine if he has
received a TDY assignment. Such pilots must be available
to begin TDY on the first of the following month, if there is
no conflict with his prior month's schedule.
Voluntary TDY
days off
8-L-2-c- Volunteer pilots assigned TDY will be assigned
reserve day off lines at the TDY domicile, taking into
consideration any day off request he may have submitted.
Reserve day off requests will be granted so long as the
pilot receives twelve (12) days off in a thirty (30) day
month (13 days off in a 31 day month) or fourteen (14)
days off for Shuttle pilots in the month and reserve
coverage at the TDY domicile is not adversely affected.
Time permitting, such volunteer pilots may also be
assigned any open lines which their seniority would entitle
them to under the provisions of Section 20. These
assignments will be made in seniority order. Reserve
pilots shall not be required to deadhead to or from the
TDY assignment on days off.
Reserve mov-up
to cover line
vacated by
volunteer TDY
and cancellation
of TDY 8-L-2-d- Lines of flying which are opened because the
pilots awarded such lines have been sent TDY, will be
covered by moving up a reserve under the provisions of
Section 20-D-5, however, no further move-ups will be
incurred.
No move-up will be performed if the TDY volunteer is a
reserve at his domicile. Should a TDY assignment be
terminated early, the volunteer shall return to his awarded
line at his domicile.
Partial month TDY 8-L-2-e- TDY assignments required for partial months or
after the beginning of the month shall be given to reserves
only. Such assignments shall be made to reserves who
have volunteered, to the extent available.
Assignment of
TDY 8-L-3- Temporary duty assignments shall be governed by
the following criteria:
Travel days count
as TDY 8-L-3-a- The length of a temporary duty assignment shall
be measured by the number of full calendar days so
assigned, including days spent in traveling to and from the
temporary duty domicile but exclusive of days required for
any necessary qualification.
8-L-3-b- A reserve pilot who has accumulated a total of
thirty (30) days of temporary duty during the previous
twelve (12) month period shall not be required to remain
on temporary duty without his consent until all qualified
pilots on reserve duty at his domicile in his status and
Page 119 Section 8-L-3-c
equipment type have each accumulated thirty (30) days of
temporary duty during the previous twelve (12) months,
provided that said pilot shall not be assigned more than a
total of forty-five (45) days of temporary duty in such
twelve (12) month period without his consent.
8-L-3-c- A pilot may not be required to be on temporary
duty for more than fifteen (15) consecutive days for any
one such assignment, except that a pilot may volunteer to
remain on temporary duty; provided that if a pilot is the
only reserve pilot in his status, equipment type and
domicile who will not have accumulated thirty (30) days of
temporary duty at the conclusion of fifteen (15) day
assignment, he may be required to remain on temporary
duty in excess of thirty (30) days.
Assignment of
TDY 8-L-3-d- In the event a reserve pilot is to be assigned on
temporary duty for a period of ten (10) days or more, he
shall be given notice of such assignment as far in advance
as possible but in no case less than three (3) calendar
days (seven (7) if such assignment commences
subsequent to the tenth (10th) of the month) prior to the
time he is required to depart from his home domicile for
the temporary duty assignment. Such assignment shall be
preferenced if time permits.
8-L-4- The term "reserve" as applied to pilots in this
Paragraph will mean a pilot who is not assigned to a
schedule at his home domicile. However, a reserve pilot who
is given a temporary assignment under the provisions of this
Paragraph may be required to complete such temporary
assignment regardless of any change in his status at his
home domicile.
8-L-5-
TDY 1 in 7 8-L-5-a- Pilots assigned to temporary duty, if functioning
as a reserve while assigned to temporary duty for fifteen
(15) days or less, shall be provided with one (1) day off in
each seven (7) days during the period of temporary duty.
11 to 15 day
assign 1 in 7 not
deducted from 12/
13
8-L-5-b- A pilot assigned to temporary duty for a period
of eleven (11) to fifteen (15) days shall have his days off
while on temporary duty scheduled so as to provide one
period of two (2) consecutive days off. If necessary, one
(1) additional day off will be granted for this purpose;
however, such additional day off, above the requirement
for one (1) day off in seven (7), will be subtracted from the.
Page 120 Section 8-L-5-c
days off owed to the pilot and will not be restored as
provided below.
Restoration of
days off
8-L-5-c- Those days off lost by the pilot while on
temporary duty will be restored to the pilot either
immediately before or immediately after the period of
temporary duty, at the option of the Company;
notwithstanding the possibility that such days off may be
restored in the month following the month in which the
temporary duty assignment took place.
Restoration of
days off for pilot
who is lineholder
in next month
No offset for 1 in
7
8-L-5-d- In the event that it is necessary to restore days
off to a pilot during a month when he is a lineholder such
days off will be restored on the first available days of
scheduled duty; provided that trip sequences will not be
split apart as a result of this application. Restoration of
days off will in all cases be deferred if such restoration
would conflict with or cause rescheduling of training. If
restoration of all lost days off cannot be completed within
one month following the month in which the temporary
duty was assigned, the remaining day off owed will be
added to the pilot's vacation. The day(s) off granted to
fulfill the one (1) day off in seven (7) requirement during
the period of temporary duty will not be used to offset the
number of scheduled days off lost during the temporary
duty assignment.
Involuntary TDY
pilot maintain
schedule day off.
Reschedule with
concurrence
8-L-5-e- If involuntarily assigned to temporary duty for
more than fifteen (15) days, the pilot shall retain the days
off schedule assigned to him at his domicile and he shall
not be required to deadhead to or from the temporary duty
assignment on his days off. However, with pilot
concurrence, the pilot's days off may be rescheduled.
8-L-6-
Duty period
limitation for --
6 assignment up
to 5 duty periods
8-L-6-a- To avoid junior manning for a specific trip, a pilot
available under the provisions of Section 20-F, or a
reserve pilot, may be assigned to cover such open one
way or round trip sequence originating at another point
provided it does not result in junior manning at his home
domicile and such assignment will not be considered as
temporary duty. Initial assignments under this provision
shall not be scheduled to exceed five (5) duty periods,
except for international trip assignments.
8-L-6-b- Notwithstanding Section 8-L-6-a above, a
lineholder signed up for open flying under Section 20-H-3
and 20-H-5 at the domicile designated by the Company to.
Page 121 Section 8-M
cover the Section 8-L-6 assignment, may at the
Company's option be offered the opportunity to cover such
open flying. Pilots so assigned shall be governed by all of
the provisions of sub-paragraph 8-L-6-a above.
8-M- Geographical Relocation of Assignments
In the event that the Company desires to geographically
relocate flying from a domicile and to the extent that the
number of assignments are relocated, the Company will offer
to the pilots in the status and equipment type affected at the
domicile in the order of seniority, the opportunity to be
transferred to the new domicile(s). Such pilots shall be
allowed moving expenses in accordance with Section 10 of
this Agreement. The relocated assignments shall be
identified with and flown from the new domicile(s) and the
assignments involved shall not be open for award unless the
number of pilots desiring to transfer provides less than the
total assignments required at the new domicile under the
provisions of Section 8-B. If an insufficient number of pilots
elects to transfer, the balance of the assignments required at
the new domicile in accordance with Section 8-B shall be
awarded systemized. To the extent that the number of
assignments are relocated a like number of assignments
shall be reduced at the old domicile.
8-N- Phase-Out of Equipment Type
When the Company desires to completely phaseout an
equipment type at a domicile, other than as covered in
Section 8-M, the provisions of Section 8-K shall be utilized
for the displacement of the affected pilots; except that the
opportunity for displacement shall be offered to the affected
pilots in seniority order during each reduction in assignments
associated with the complete phase-out of equipment type. If
insufficient pilots voluntarily accept the displacement, the
remainder of the displacements shall be accomplished under
Section 8-K in inverse order of seniority.
8-O- Closing Of A Domicile
8-O-1- In the event the Company desires to close a
domicile, the procedure set forth below shall be followed:
8-O-1-a- The Master Executive Council Chairman will be
so advised by the Company and will be afforded the
opportunity to consult with and make recommendations to.
Page 122 Section 8-O-1-b
the Company regarding the relocation of the affected
pilots.
8-O-1-b- At least ninety (90) days notice must be given to
the pilots affected by the move outlining the procedures to
be followed to accomplish the move and indicating the
domicile(s) to which the flying will be moved.
8-O-1-c- Pilot vacancies equal to the number of
assignments existing at the old domicile will be
established at the domicile(s) to which the flying is
transferred. During the ninety (90) day period specified in
paragraph b above, the pilots so affected will be given an
opportunity to indicate to which of the designated
domiciles they desire to be transferred or to bid on
vacancies which may be bulletined on the system,
notwithstanding any freezes that otherwise may be
applicable.
8-O-1-d- The Company will transfer the pilots to the new
domicile(s) in order of their seniority preference by status
and equipment type.
8-O-1-e- The pilots affected shall retain the status and
equipment type held by them at the time of transfer and
such flying shall be identified with and flown from the new
domicile(s) and shall not be open for bidding.
8-O-1-f- Each pilot who is subject to the provisions of this
sub-paragraph (O) shall be allowed NRPS transportation
between his former domicile and his new domicile until
such time that he moves his home to the new location
under Section 10, not to exceed one (1) year after the
effective date of the domicile closing. In addition, if such
pilot has not moved his home to the new location within
one (1) year, he shall be allowed NRSA transportation
until he moves, not to exceed an additional one (1) year.
8-P- Vacating Assignments
8-P-1- A pilot may vacate an assignment only as provided
by this Section 8, or Section 6-E of this Agreement..
Page 123 Section 8-P-2
8-P-2- When a pilot desires to vacate a present or future
assignment, his request to vacate shall be considered jointly
by the Company and the Association and in accordance with
their mutual agreement a decision may be rendered
permitting such pilot to vacate his assignment to take up a
different assignment at his domicile, to take up a like
assignment at a different domicile or to revert to his former
assignment, and moving expenses shall not be allowed.
8-P-3- A pilot activated early in an awarded assignment
under the provisions of Paragraph P-2 above shall not trigger
pay under Section 8-E for other pilots awarded a like
assignment.
8-Q- New Equipment Domicile
Opening a new
equipment
domicile
In the event the Company desires to open a new equipment
domicile(s), the procedure set forth below shall be followed:
8-Q-1- The Master Executive Council Chairman will be so
advised by the Company and will be afforded the opportunity
to consult with and make recommendations to the Company
regarding the staffing of the new equipment domicile(s).
Vacancy at new
equipment
domicile bid
systemwide
8-Q-2- All vacancies with advertised effective dates during
the first six (6) months after the first revenue trip has been
flown shall be bid system wide unless the parties agree to an
alternate method of staffing the new equipment domicile(s).
Pilots serving
freezes will be
eligible to bid
vacancies at new
equipment
domiciles
8-Q-3- Notwithstanding the fourteen/twenty-four (14/24)
month bidding restrictions of Paragraph 8-D-5 and 8-D-6, all pilots will be eligible to bid on all vacancies with advertised effective dates within six (6) months of the advertised effective date of the first vacancies bid at that new equipment domicile .
TDY or 8-L-6
assignment up to
60 days
8-Q-4- A pilot who has completed training and is awaiting
activation into a new equipment domicile will be available for either TDY or 8-L-6 assignments, at his option, for a period of up to 60 days or until revenue flying begins in the new equipment domicile whichever is less. The pilot may choose either option on a monthly basis.
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Agreement Table of Contents
Interpretations Table of Contents.
Page 124 Section 8-Q-4
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Page 125 Section 9-A
Section 9
Training
9-A- Classifications
The provisions of this Section shall apply to all training in
which pilots are required to participate, by the Company, on a
scheduled basis. This shall include but is not limited to initial,
upgrading and transition training, proficiency training,
proficiency checks, overwater training, navigation training,
requalification training and all training associated with
differences of an aircraft conducted at a local domicile, not
included in transition training. It does not include special or
miscellaneous training such as maintenance of currency on
equipment, audio visual package reviews, airport
qualification films, route qualifying not in connection with
transition training or transfer to another domicile, Company
meetings, seminars, etc. or training requested by the pilot on
a voluntary basis.
9-B- Assignment
9-B-1- All training assignments will be made by the
Company in accordance with the following:
Notification
Transi t i on
Training
9-B-1-a- All pilots shall be notified as far in advance as
possible but in no case less than fourteen (14) days prior
to being scheduled to receive transition or extended
training of five (5) days or more. However, if a pilot is
returning to work from an absence and he needs
requalification or transition training, this fourteen (14) day
minimum notification may be reduced to seven (7) days.
These minimum notification requirements may be further
reduced only with pilot concurrence. Official notice of
training assignments will be conveyed through the pilot's
Company mail box and by electronic notification. If,
however, a pilot's schedule shows that he does not have
any duty following the initiation of the notice, or that the
pilot has not checked the electronic notification, the
Company will make an effort to contact him by telephone
within seven (7) days of the original notification. If this
attempt is unsuccessful, a letter will be sent by U.S. Mail
to his home of record. If a pilot volunteers for training with
less than fourteen (14) days notice of a training
assignment of this type and does not have a scheduled.
Page 126 Section 9-B-1-b
calendar day off between the time of notification and the
time he is required to depart his domicile, he will be
provided with a calendar day off within seven (7) days
from departing his domicile.
9-B-1-b-
Notification of PC/
CQP/PT training
9-B-1-b-(1) Proficiency Checks, Continuing
Qualification Programs and Proficiency Training (PC/
CQP/PT), or training for periods of less than five (5)
days will be assigned after the posting of the pilot's
schedule preference awards but no later than nine (9)
days after the posting of the pilot's schedule at the
local domicile. This nine (9) day requirement excludes
secondary and floater lines. Domicile continuity shall
be maintained when assigning PC/CQP/PT's whenever
practicable. A pilot will be electronically notified at
least fifteen (15) days prior to the date he is scheduled
for a PC/CQP/PT assignment except under the
circumstances covered in Paragraph 9-G-3 below.
Within 48 hours after the monthly bid awards are
posted for the affected month, a pilot eligible for a PC/
CQP/PT may designate a period of seven (7)
consecutive holy days that he will not be available for a
PC/CQP/PT. In addition, a pilot may not be asked to
deadhead to or from any training during these seven
(7) consecutive holy days. WHQCM may deny this holy
day request if granting the request would result in the
pilot losing his qualification.
Minimum 21 day
notice of early
month PC/CQP/
PT
9-B-1-b-(2) The Company will not assign a pilot to a
PC/CQP/PT in an early month with less than twenty-one
(21) days notice of the PC/CQP/PT without the
pilot's concurrence.
Bidding
Procedure for PC/
CQP/PT
9-B-1-b-(3) The Parties are agreeable to develop a
process for bidding PC/CQP/PT slots under the
following conditions:
9-B-1-b-(3)-(a) Monthly requests for PC/CQP/PT
slots will close at the end of the 48 hour holy day
window.
9-B-1-b-(3)-(b) Bidding requests will be honored in
seniority order.
9-B-1-b-(3)-(c) The Company will award PC/CQP/
PT slots consistent with available manpower needs
(i.e., awards can not result in manpower surpluses
or deficits in any given domicile, fleet and seat).
Page 127 Section 9-B-1-c
Pilot subject to
Section 2--1
assignment if
training
assignment is
cancelled
9-B-1-c- When the Company cancels or terminates a
training assignment earlier than planned, the affected
lineholder pilot may be given a flying or standby
assignment under the provisions of Section 20-F-1 on
those days on which he had trips published in his awarded
schedule. Provided the pilot is not responsible for the
training cancellation, he will be paid for the value of the
trips in his original line or what he actually flies, whichever
is greater. However, the Company will drop duty days as
necessary in order for the pilot to receive his minimum
days off per Section 5-G-1-d.
9-C- Compensation and Flight Time Considerations
9-C-1- Training Assignments Of Five (5) Days or More
9-C-1-a- When a pilot assigned to a line of flying is
assigned by the Company to training in accordance with
Paragraph 9-B-1-a above, he shall receive his monthly
pay and his total allowable monthly flight time shall be
reduced by the number of actual flight hours which the
pilot missed as a result of this training.
9-C-1-b- When a pilot assigned as a reserve is assigned
by the Company to training in accordance with Paragraph
9-B-1-a, he shall receive his monthly guarantee and his
total allowable monthly flight time shall be reduced by four
hours and ten minutes (4:10) for each duty day missed as
shown in his assigned reserve line.
9-C-2- Training Assignments Of Less Than Five (5) Days
9-C-2-a- A pilot assigned to training in accordance with
Paragraph 9-B-1-b above, shall be paid his monthly pay or
guarantee as applicable as provided in Section 3 in
accordance with the following:
9-C-2-a-(1) When a pilot assigned a line of flying
attends training, his total allowable monthly flight time
shall be reduced by the number of actual flight hours
missed as a result of this training.
Reserve training
credit
9-C-2-a-(2) When a pilot functioning as a reserve
attends training, he shall have his total allowable
monthly flight time reduced by four hours and ten
minutes (4:10) for each duty day missed as shown in
his assigned reserve line.
Page 128 Section 9-C-2-b
Lineholder
minimum days off
9-C-2-b- When a pilot assigned a line of flying attends
training as specified in Paragraph 9-B-1-b above and such
assignment results in such pilot being scheduled for less
than the required minimum calendar days free of duty at
his home domicile for the month, said pilot shall be given
another day or days off, as the case may be, in lieu of the
scheduled day or days off in which he attended training in
order to bring his scheduled days off to the required
minimum calendar days free of duty at his home domicile
for the month, as provided in Section 5-G-1-d-(1).
9-C-2-b-(1) Whenever said pilot must drop a trip or
trips from his schedule to receive a day or days as
provided in sub-paragraph b above, his total allowable
monthly flight time shall be reduced by the number of
actual flight hours in the trip. Should he be required to
stand by on "extra" days as provided in Section 5-G-4,
the reduction above will only be the actual flight hours
in the trip on the days he did not stand by or fly under
Section 20-F.
Training credit
days for training
less than 5 days
9-C-2-c- When a pilot assigned a line of flying attends
training of less than five (5) days including PC/CQP/PT's
on days that he was not scheduled to fly other than
compensated for in Paragraph 9-C-2-b above, said pilot
shall receive a training credit day in accordance with the
following:
9-C-2-c-(1) For purposes of this sub-paragraph c, a
training credit day shall consist of any of the following:
(a) Any portion of a calendar day deadheading to or
from training;
(b) Any portion of a calendar day spent in any of the
applicable required types of training under this sub-paragraph
C-2;
(c) Any portion of a calendar day the pilot is available
for the applicable required types of training listed in
Paragraph 9-A above, but he is unable to complete
such training because of inoperative equipment or
because of the cancellation of any portion of the
scheduled training period.
9-C-2-c-(2) A pilot shall not receive a training credit
day for any day on which he was scheduled to fly nor
shall a pilot receive more than one (1) training credit
day for any calendar day in which a pilot deadheaded
to or from training on the same day he was scheduled
for training..Section 9-C-2-d Page 129
9-C-2-c-(3) Provided further, in the event that a pilot's
training assignment results in his gaining a day or days
off by reason of having to drop a portion of a round trip
on a day that he was not scheduled for training, such
gained day or days off will be deducted from any
training credit day(s) in the computation of the net
training credit days occasioned by such assignment.
9-C-2-c-(4) Provided further, in the event that a pilot
fails the training and requires additional days of
training, such additional days shall not be subject to
the provisions of this sub-paragraph.
9-C-2-d- Training days credit accumulated by a pilot in
accordance with sub-paragraph c above during the period
from December 1 to December 1 of each year will be
added to the scheduled vacation due said pilot in
accordance with Section 11, as shown in the Example:
Example:
Schedule vacation days due under
Section 11- 16 days
Training days' credit due- 4 days
Adjusted vacation- 20 days.
9-D- Transportation
9-D-1-
A pilot assigned to training shall be furnishedCompany non-revenue positive space (NRPS) or OMC
(Priority E) transportation at the option of the pilot, for all
authorized travel to and from his point of residence, duty or
assignment and the training location. OMC may be assigned
only with pilot concurrence. Authorized travel shall be travel
in connection with the beginning, relocation or termination of
a training assignment, travel at Company request, and such
other travel that may from time to time be authorized.
Transportation to /
from training
9-D-2- Non-revenue positive space (NRPS) or OMC (Priority
E) at the option of the pilot will be issued by the Training
Facility Administrative Office for travel to and from his point
of residence, duty or assignment on a pilot's scheduled days
off. It is the responsibility of the pilot to be available for
scheduled training periods.
Page 130 Section 9-E
9-E- Expenses
9-E-1- The Company shall furnish suitable, single lodging
accommodations when required and standard allowances, as
provided in Section 4-A-1, from time of departure of the trip
on which he deadheads to the training assignment until the
time of arrival of the trip on which he returns to his domicile.
In the event the Company cannot furnish lodging, reasonable
actual expenses supported by receipts plus standard
allowances will be paid. Transportation shall be furnished
between the lodgings and the training facility or expenses,
therefore, if such transportation is not furnished by the
Company. Such expenses shall be claimed on a regular
Company expense account form and must be submitted
within fourteen (14) days after incurring the expenses. The
Company will allow actual and necessary personal laundry
and cleaning expenses, when training away from the home
domicile is for more than five (5) consecutive days.
9-E-2- A pilot assigned to training at his home domicile or a
pilot who elects to live at his home while in training shall be
paid at the rates set forth in Section 4-A-1 from the time he
reports to the Training Center for training until he is released
from the Training Center. This will not apply to a pilot from
the time he is released for days off during the training period,
until reporting for training following a day off period.
Expenses for
training at home
domicile
9-E-3- Pilots in Transition or Requalification Training at their
home domicile may, at their option and in lieu of the lodging
provisions herein, receive an allowance for transportation of
fifteen Dollars ($15.00) per day for each day the pilot is
required to report for training. Such allowance shall be
claimed on a regular expense form and must be submitted
within fourteen (14) days after incurring the expenses.
9-F- Training Schedules
9-F-1- To the extent known and projected by DENTK
Planning and Scheduling Section, the training schedule will
be posted for the entire transition period, from the beginning
through completion.
9-F-2- A pilot assigned to training shall not be on duty in
excess of the following limitations:
Duty period
restriction for
training
9-F-2-a- A pilot shall not be on duty for more than eight
(8) hours exclusive of a one (1) hour lunch break, in any
one (1) calendar day during Initial, Upgrading, Transition
Training, Proficiency Training and Checks, in the simulator
Page 131 Section 9-F-2-b
or aircraft or combination thereof. In addition, a pilot shall
not be scheduled to exceed thirteen and one-half (13 1/2)
hours on duty in a combination of training and
deadheading to or from Denver and will not be required to
exceed fourteen and one-half (14 1/2) hours; except in the
case of a delay in training, he may be required to exceed
fourteen and one-half (14 1/2) hours to deadhead home in
order to be legal for his next scheduled trip.
Duty periods for
training
9-F-2-b- Formal classroom and crew training sessions
(excluding crew training sessions designed as briefings
immediately prior to simulator or cockpit procedure trainer
periods) shall begin no earlier than 0700 and terminate no
later than 2200.
Simulator training
hours
9-F-2-c- The training periods in the flight simulator or
cockpit procedures trainer, exclusive of brief and debrief,
will be conducted between the hours of 0600 and 2400
local time. These limits may be exceeded with pilot's
concurrence to make up for lost time due to mechanical
failures. Additionally, the above 2400 time may be
extended to 0200 when the scheduled training
requirements in a particular equipment type exceed the
capabilities at DENTK. The Company may only schedule a
pilot for training during the 2400 to 0200 time period
without his concurrence if no other time slots are legally
available. No checking will be done during this extended
training time.
9-F-2-d- The training periods in the flight simulator or
cockpit procedures trainer, exclusive of briefing and
debriefings, will be conducted between the hours of 0600
and 2400 local time, provided that with the pilot's
concurrence these limits may be exceeded to make up for
lost time due to mechanical failures. Additionally, the
above 2400 time limits may be extended to 0200 when the
scheduled training requirements in a particular equipment
type exceed the capabilities at DENTK. No checking will
be done during this extended training time.
9-F-2-e- Training periods for airplane flight training and
simulator flight training, or any combination thereof, shall
not be scheduled to exceed four (4) hours of actual
aircraft and/or simulator time per day. A pilot scheduled in
the simulator for a period in excess of two hours and thirty
minutes (2:30) shall be permitted a short break for
physiological needs
Page 132 Section9-F-2-f
9-F-2-f- A pilot will not be scheduled for more than six (6)
hours of instruction in classroom, crew training sessions,
system procedures trainer or cockpit procedures trainer in
any one day.
9-F-2-g- Five (5) training days in any seven (7)
consecutive days shall be the maximum scheduled. With
pilot concurrence, this training may be extended, due to
unexpected circumstances, to six (6) consecutive days to
provide continuity in a particular training assignment. A
pilot will be scheduled for at least one two (2) consecutive
days off period every two (2) weeks.
9-F-2-h- On rating or proficiency checks at DENTK, the
initial take-off or the final landing, with all engines normal,
may be accomplished in hours of darkness. When rating
rides or proficiency checks are conducted away from
DENTK, such flights may, by mutual agreement between
the pilot and check airman, be conducted during night
hours.
9-F-2-i- When a pilot has been assigned by the Company
to observe as a member of the crew in conjunction with
transition training, such period of time will be considered
an extension of his transition training period.
No simulator
checking prior to
0700 home
domicile time
9-F-2-j- The Company will not schedule a pilot for
simulator checking prior to 0700 pilot's home domicile
time. However, during Daylight Savings Time, the
Company may schedule Honolulu based pilots for
simulator checking beginning at 0600 pilot's home
domicile time.
9-F-3- Rest Provisions
9-F-3-a-
9-F-3-a-(1) The minimum rest period between any two
training duty assignments shall be twelve (12) hours off
duty.
9-F-3-a-(2) The minimum rest between any line
assignment and any training assignment (including
deadheading to or from training, if required) shall be
eighteen (18) hours free of all duty at the home
domicile.
Pilot scheduled
for 1 in 7 during
training of less
than 5 days
9-F-3-b- A pilot scheduled for training of less than five
(5) days shall be scheduled for not less than one (1)
calendar day off in each seven (7) days; except that, if
such seven (7) days contains a combination of line flying.
Page 133 Section 9-F-3-c
and training, he may be scheduled for and perform seven
(7) consecutive days of such combined duty, if the seventh
(7th) day of duty is necessary to complete an assignment
in progress.
Days off after
training
9-F-3-c- Upon completion of scheduled training of more
than seven (7) days, a pilot will be given not less than
three (3) calendar days free of all duty at his home
domicile, provided he is not scheduled for such time off in
his line of flying or as a reserve. Such three (3) days off
may be provided immediately upon completion of formal
training at DENTK or upon completion of IOE, at the pilot's
option. The pilot shall indicate his desire as to the
placement of such three (3) days off within forty-eight (48)
hours of receiving his training schedule. If the pilot makes
no choice, the placement of the days off with respect to
the IOE will be determined by the company.
Scheduling of
pilot for IOE
9-F-3-d- Notwithstanding the four (4) duty period
restriction for scheduling of domestic trip sequences
provided in Section 5-G-3-g, the Company may assign a
pilot to a series of flights exceeding the four (4) duty
period limit to accomplish his Initial Operating Experience
(I.O.E.). This assignment shall be accomplished as a part
of his training assignment under the provisions of Section
9, but I.O.E. shall not be subject to the provisions of 9-F-2
(duty limits while in training) or 9-F-3-a (rest requirements
while in training at DENTK and deadheading to and from
DENTK). Additionally, notwithstanding the limitation of
seventy-five (75) actual flight hours per month for
reserves in Section 5-B-2-b, the Company may assign
additional flying for the purpose of completing I.O.E. up to
eighty-one (81) actual hours in a month (eighty-three (83)
actual hours in a flex month) in the domestic operation
and up to eighty-five (85) actual hours in a month in the
international operation. In this event, the pilot's pay shall
include the amount due him for training, as provided by
the application of Section 9-C-1, plus the value of his
performance thereafter.
9-F-3-e- A pilot will not be assigned to training or to
deadhead on December 25th or January 1st.
9-G- General
9-G-1-
Training
Committee
9-G-1-a- The Company shall establish such training
policies as are necessary to insure compliance with this.
Page 134 Section 9-G-1-b
Agreement and to accomplish the necessary training
requirements of the Company. A Training Committee
composed of representatives of the Company and
representatives of the pilots shall be established. The
Training Committee shall meet quarterly unless the parties
agree to meet less frequently, or at any other time the
parties mutually agree. It is the intent of the parties to this
Agreement that this Training Committee shall provide the
pilots with the opportunity to consult with and make
recommendations to the Company on training policies or
changes, training programs or changes, or any other
matters affecting pilot training. In the event that the
Training Committee and the Company are unable to
resolve issues of training, these issues will be referred to
the Vice President of Training, the Senior Vice President
of Flight Operations and the Master Chairman for
resolution.
ALPA observer on
check ride
9-G-1-b- The parties agree that it is in the best interest of
the Company, the Association and the pilot in training for
the ALPA Training Committee to be notified any time an
individual pilot is having training difficulties or is
scheduled for other than a routine check by DENTK. If
requested by the pilot, a UAL pilot representative of ALPA
may be present in the cockpit as an observer on any
check other than a routine check.
Additionally, the Company agrees to handle pilots who
continue to experience training difficulties as per past
practice.
9-G-2- The Company will make every reasonable effort to
provide Pilot Instructor continuity throughout simulator and
airplane training. In unusual circumstances, special
consideration shall be given when a pilot requests a specific
Pilot Instructor.
PC/PT fil-in time
credit and duty
restrictions
9-G-3- If a pilot is assigned to a flight simulator period as a
fill-in crew member and such assignment is in addition to his
regularly assigned PC/CQP/PT periods, the Company will not
require that he participate in the oral portion of the
examination. If his performance requires additional training,
such training will be provided to a satisfactory level of
proficiency and no checking events will be scheduled. If the
fill-in crewmember is a reserve, he shall have his total
allowable monthly flight time reduced by four hours and ten
minutes (4:10) for each day assigned as a fill-in. A pilot so
assigned shall not be scheduled to be on duty, including.
Page 135 Section 9-G-3-a
deadheading to and from the training location, in excess of
thirteen and one-half (13 1/2) hours; and shall not be
required to remain on duty in excess of fourteen and one-half
(14 1/2) hours without his concurrence except in the case of
a delay in a PC/CQP/PT, he may be required to exceed
fourteen and one-half (14 1/2) hours to deadhead home in
order to be legal for his next scheduled trip.
Selection of PC/
CQP/PT fill-in
9-G-3-a- Once the Company has determined that a pilot
is needed as a "fill-in" in order to provide a complete crew
for a PC/CQP/PT, the Company may select a reserve for
the fill-in assignment, according to the provisions of
Section 20-J-1-b-(5); or, at its option, the Company may
elect to make the fill-in assignment available to a
lineholder who is signed up for "open flying".
Procedure for
lineholder pickup
of PC/CQP/PT fill-in
assignments
9-G-3-b- If the Company makes the assignment available
to lineholders, the following will be the domicile
preference order, regardless of each lineholder's own
pick-up priority under Section 20-H:
9-G-3-b-(1) Lineholders based at DEN.
9-G-3-b-(2) Lineholders based at the same domicile as
either the Captain or the First Officer assigned the PC/
CQP/PT.
9-G-3-b-(3) Lineholders based at any other domicile on
the system, at the Company's option.
9-G-3-c- Within each domicile, lineholders signed up for
open flying will compete among themselves for fill-in
assignments according to the usual 20-H priority rules.
5 hours per duty
period for fill-in
assignments
9-G-3-d- A lineholder who performs a fill-in assignment
will receive five (5) hours for each duty day that he
performs fill-in duties (not including periods consisting
entirely of deadhead) which will be added to both his
actual monthly projection and to the pay credit value of his
assigned line. The pilot's actual monthly projection
remains limited to the actual monthly limit established by
the Agreement. All pay credit in excess of 85 hours will be
administered in accordance with Section 3-I.
9-G-4- A fully qualified crew complement of Captain, First
Officer and Second Officer, where required, whose name
appears on the United Air Lines Pilots Seniority List and/or
Second Officer Seniority Eligibility List shall be utilized in
accordance with United Air Lines' Standard Operating
Procedures during flight simulator proficiency checks. No
pilot will be assigned as a Captain fill-in unless that pilot.
Page 136 Section 9-G-5
holds an ATP for that aircraft and has accumulated at least
100 hours of experience in that aircraft since IOE. On those
equipment types where augmentation is required, the use of
two (2) ATP rated First Officers shall fulfill the requirement of
a fully qualified crew complement.
9-G-5- No pilot will be required to take a proficiency check in
a simulator that is not functioning so as to simulate the flight
and operating characteristics of the represented aircraft.
Adequate time for a pilot to adapt himself to the particular
flying characteristics of the flight simulator shall be given
before the proficiency check is given in the flight simulator.
9-G-6- If a pilot's performance on a proficiency check in the
flight simulator is considered to be unsatisfactory, he shall
always have the opportunity to take a proficiency check,
without prejudice in an aircraft in which he is currently
qualified.
9-G-7- No pilot will be evaluated on a maneuver during a
proficiency check that is not prescribed in the United Air
Lines proficiency check as approved by the FAA.
9-G-8- Proficiency checks in the flight simulator shall be
given as nearly as possible as an extension of flight simulator
training and shall not be given prior to such training.
9-G-9- United Air Lines pilots will normally take precedence
over any outside contract training for the most desirable
training periods. For this purpose, the consideration for
assignments will be in the following order:
1st 0800 to 1800
2nd 1801 to 2400
3rd 0001 to 0759
9-G-10- Training time shall not be considered as flight time
for daily, weekly, monthly, quarterly or annual flight time
limitations.
No record kept for
voluntary training
9-G-11- Voluntary use of synthetic training devices such as
cockpit procedures trainers and simulators is not included in
the pro-visions of this Section. No record of a pilot's
performance will be maintained by the Company for voluntary
training nor will the log books and records of simulator
utilization indicate the pilot by name..
Page 137 Section 9-G-12
Requalification
training available
to pilot at his
option
9-G-12- A pilot awarded an assignment who has completed
transition training as a Captain in an equipment type other
than a type which he has been flying as a First Officer and is
required by the Company to return to his previous status or
equipment type before being activated in his new assignment
may at his option receive the training he deems necessary,
including a requalification course to requalify in the previous
equipment and/or the new equipment.
9-G-13- When training and/or checking is conducted in an
aircraft in flight, such training and checking will be subject to
the following additional restrictions:
9-G-13-a- Maneuvers requiring a visual horizon:
9-G-13-a-(1) Emergency descent.
9-G-13-a-(2) Simulated engine failure on take off.
9-G-13-a-(3) Approaches conducted at 50% or less
power available.
9-G-13-a-(4) Maneuver to land (circling approach).
9-G-13-a-(5) Zero degree flap approach.
9-G-13-a-(6) Approach to stall.
9-G-13-a-(7) Intentional Dutch Roll.
Route or
equipment
qualifying is an
extension of
training
9-G-14- When a pilot is route or equipment qualifying in
conjunction with transition training or as a result of bidding or
bumping such qualifying shall be considered an extension of
training and the provisions of Section 9-F-3-c shall apply.
9-G-15- Initial Operating Experience (IOE)
IOE Check
Airman
compensation
9-G-15-a- Initial Operating Experience (IOE) for Captains
and First Officers may be conducted by designated line
Captain Check Airmen functioning on their assigned trips.
In any month that the Check Airman is utilized in this
capacity, he shall receive his normal salary plus a Four
Hundred Dollar ($400.00) override to cover up to three (3)
duty periods in which he so functions. For each
subsequent duty period in such capacity, he shall receive
an additional One Hundred Dollars ($100.00) override. In
no case will his pay as an LCA be less than nine percent
(9%) of his hourly pay for the monthly hours performed as
an LCA.
Override for
Second Officer
Check Airman
9-G-15-b- Initial Operating Experience (IOE) for Second
Officers may be conducted by designated line Second
Officer Check Airmen functioning on their assigned trips..
Page 138 Section 9-G-15-c
In any month that the Check Airman is utilized in this
capacity, he shall receive his normal salary plus a Three
Hundred Dollar ($300.00) override to cover up to three (3)
duty periods in which he so functions. For each
subsequent duty period in such capacity, he shall receive
an additional Seventy-five ($75.00) override. In no case
will his pay as an LCA be less than nine percent (9%) of
his hourly pay for the monthly hours performed as an LCA.
Enroute check
provisions
9-G-15-c- Captains and Second Officers who have been
designated as line check airmen under this provision may
also perform en route checks as follows:
9-G-15-c-(1) The following conditions will apply to the
pilot being checked.
(a) He shall be checked on his own trip unless with
pilot concurrence other arrangements are made.
(b) In no event will he be scheduled for more duty
periods than were in his original schedule, without his
concurrence.
(c) His monthly pay shall not be affected by any
changes made to accommodate an en route check.
(d) If a lineholder, he shall not be requested to per-form
as a reserve or to accept standby assignments as
a result of changes made to accommodate an en route
check.
(e) All Section 5 limitations shall apply to his
assignment.
9-G-15-c-(2) Further, the following conditions will apply
to check airmen:
(a) He shall receive hard hour credit for all hours flown
in conjunction with an en route check.
(b) He shall not exceed the number of originally
scheduled duty periods without his concurrence.
(c) All Section 5 limitations shall apply.
9-G-16- Route qualifying required prior to assignment to
duty as a Captain shall be as specified in the applicable
portion of Flight Regulations-Operational, Series 25-2 and no
other qualifying trips will be required..
Page 139 Section 9-G-17
9-G-17- When changes or additions are made to the
applicable portion of Flight Regulations-Operational, Series
25-2, as specified in sub-paragraph 9-G-16 above to which
the Association objects, a hearing will be granted by the
Senior Vice President-Flight Operations within thirty (30)
days at the request of the Association for the purpose of
determining whether such changes or additions should be
continued.
FANS Training
9-G-18- The Company will provide three (3) hours of pay to
lineholder pilots who participate in the FANS training when
that training is conducted as "stand alone" training at the
pilot's home domicile. This pay will not be banked, but will
instead be paid in addition to the compensation that
otherwise would be paid in the subject month, even when the
pilot's total pay exceeds the normal monthly pay maximum.
Reserve pilots will be assigned FANS training only on reserve
work days and will receive no additional compensation since
reserve work days are already compensated.
Home Study
Program
9-G-19- Should the Company implement a Home Study
program to replace the first part of transition training now
conducted at DENTK, the program shall be administered as
follows:
9-G-19-a- The Company may offer a pilot the Home
Study program, however, his participation will be
voluntary.
9-G-19-b- Pilots receiving assignments, through bidding
or bumping, in equipment types included in the Home
Study program must indicate their desire to participate in
the program within ten (10) days of receiving such award.
Those pilots who participate will continue in line
operations until commencing their training assignment at
DENTK. Participants will receive 4:10 of pay for each
reduction of one (1) day of training, at their current rate,
over and above their line guarantees or line value,
whichever is greater.
9-G-19-c- The pilot must demonstrate satisfactory
completion of the Home Study course by a specified date
to receive this additional pay.
9-G-19-d- The Home Study course materials will be sent
to the pilot upon his notifying the Company of his desire to
participate in the program. The same course materials will
be available at each domicile..
Page 140 Section 9-G-19-e
9-G-19-e- Pilots not participating will receive the full
ground school training as traditionally performed at
DENTK.
9-G-19-f- The Home Study program will continue on a
test basis for a period of six (6) months from the
implementation date of the program. The results and
quality will be monitored by the Company and the UAL/
MEC Training Committee to determine its effectiveness,
need for modifications and/or acceptability. If determined
effective the program may be continued by mutual
agreement.
9-H-
Nothing herein shall restrict deviation from the rules by
mutual agreement between the pilot and the Company where
such deviation will aid or benefit the pilot in completing any
training requirement.
9-I-
All pilots assigned to equipment domiciles with DSL
scheduled overwater flying shall, at their option, be overwater
and INS qualified within six (6) months. Initial and recurrent
training shall be accomplished under the provisions of this
Section.
9-J-
Second Officer
PAC time
In order to continue the mutual objective of providing a pilot
qualified crew concept, each Second Officer transition
training which requires a certification will include at least two
(2) hours of pilot-at-control time in the aircraft or in an FAA
approved simulator with visual projection.
9-K-
New Training
Should a new training requirement be instituted which will initially require more than four hours of training and which has a specific, required completion date, the parties will meet to discuss and agree upon (1) whether pilots who participate should be compensated and, if so (2) what form compensation should take. This commitment to negotiate on compensation under these conditions does not constitute a waiver of the Company's rights to require pilots to participate in such
training under the present provisions of the Agreement prior to reaching agreement on the issue of compensation..
Page 141 Section 10-A
Section 10
Moving Expenses
10-A-
Company paid moves, related personal transportation and
travel time, when provided by this Agreement, shall be
subject to the conditions of this Section 10.
O-line
transportation to
relocate pilot's
residence due to
domicile transfer
10-A-1- Any pilot whose domicile has changed as a result of
the application of this Agreement (with or without a related
Company paid move) and who does actually relocate his
primary residence as a result of that domicile transfer, shall
be furnished on-line air transportation from his old residence
to his new residence (or between the nearest on-line cities)
for himself and his immediate family, to the extent permitted
by law. Such transportation shall be available for the purpose
of locating the pilot and his family at his new residence. This
transportation shall also be available (1) to a pilot newly hired
in order to locate at his first assigned domicile and (2) to a
pilot upon recall from furlough to locate at the domicile to
which he is being returned, regardless of whether he is or is
not returned to the domicile from which he was furloughed.
Travel time for
domicile transfer
when not moving
household goods
10-A-2- Any pilot whose domicile has changed as a result of
either a lateral or transition vacancy award and who chooses
not to move his household goods will be entitled to the
following:
10-A-2-a- Three (3) transfer days to be used after the
posting of the final bid award, but no later than ninety (90)
days after activation. However, if the pilot chooses to drive
one (1) automobile, he will receive the greater of three (3)
transfer days or the number of travel days equal to the
distance between the pilot's old domicile and his new
domicile divided by 400. Remainders over 100 will provide
an extra travel day.
Enroute driving
expenses
10-A-2-b- Reimbursement of reasonable enroute driving
expenses for mileage, meals (not to exceed $30 per day),
hotel and laundry. With the exception of meals, these
expenses must be supported by receipts. Receipts for
enroute expenses must coincide with the travel days the
pilot has requested from the Company. Mileage will be.
Page 142 Section 10-A-2-c
reimbursed at the rate of twenty-nine cents ($0.29) per
mile or Company policy, whichever is greater.
Shipment of
automobile
10-A-2-c- For the pilot who does not choose to drive an
automobile, the Company will ship one (1) automobile to
the pilot's new domicile location from his primary
residence or old domicile location. Shipment of an
automobile will not be available if the mileage between the
pilot's old domicile and his new domicile is less than 500
miles.
Freezes for
training of 12
days or more
10-A-2-d- Paragraph 10-A-2-a, 10-A-2-b and 10-A-2-c
will not trigger a fourteen (14) month bidding freeze.
However, if a pilot requires training of more than twelve
(12) days as a result of his vacancy award, the
appropriate freeze will be imposed.
Notification of
travel time
10-A-2-e- As long as the pilot complies with the time limit
stated in Paragraph 10-A-2-a above, the pilot may take
travel or transfer days ("travel time") at his option
provided he informs the Company at least seven (7) days
prior to when he intends to take the time. Notwithstanding
the pilot option provided above, if the travel time desired
results in a trip(s) drop on New Year's Day, Memorial Day,
Easter, Fourth of July, Labor Day, Thanksgiving Day or
Christmas or the day on either side, Company
concurrence is required. Entitlement to travel time will be
based solely upon a change in domiciles. The pilot's
monthly salary will not be reduced for such period of
absence from duty.
Use of travel time
to cover I.D.'s
10-A-2-f- A pilot using travel time will not be required to
use vacation days if the number of travel/transfer days is
insufficient to totally cover all flying being dropped. If the
Company could reasonably deadhead the pilot to work a
portion of a trip I.D. not covered by travel/transfer days,
he may request the use of vacation days and opt out of
working this partial trip I.D.
Travel time for
new hire pilots
10-A-2-g- New Hire pilots and any pilot returning from
furlough shall be entitled to three (3) travel/transfer days if
they are initially assigned to the Denver domicile or five
(5) travel/transfer days if initially assigned to either
Anchorage or Honolulu. If assigned to a domicile other
than Denver, Anchorage or Honolulu, the travel time
entitlement will continue to be determined based on the
distance between DENTK and the domicile to which the
pilot is assigned..
Page 143 Section 10-A-3
Travel time for
domicile transfer
when moving
household goods
10-A-3- A pilot who is eligible for a paid move and chooses
to move household goods from his old primary residence will
be entitled to the following:
10-A-3-a- Three (3) transfer days or, if the pilot chooses
to drive an automobile, he will receive the greater of three
(3) transfer days or the number of travel days equal to the
distance between the pilot's old domicile and his new
domicile divided by 400. Remainders over 100 will provide
an extra travel day.
Enroute driving
expenses
10-A-3-b- Reimbursement of reasonable enroute driving
expenses (mileage, meals, hotels and laundry) for one
enroute trip. With the exception of meals (reimbursed up
to $30 per day), these expenses must be supported by
receipts. Receipts for enroute expenses must coincide
with the travel days the pilot has requested from the
Company. Mileage will be reimbursed at the rate of
twenty-nine cents ($0.29) per mile or Company policy,
whichever is greater, for up to two (2) automobiles.
Shipment of
second
automobile
10-A-3-c- The option of driving one (1) automobile from
his old primary residence or old domicile location to a new
residence or his new domicile location and shipping a
second automobile from his old primary residence or his
old domicile location to a new residence or new domicile
location.
Shipment of two
automobiles
10-A-3-d- In lieu of enroute expenses and travel days,
the pilot has the option of shipping two (2) automobiles
from his old primary residence or old domicile location to
his new residence or he may ship one (1) automobile to
his new residence and another to his new domicile
location. If the pilot ships two (2) automobiles, he is still
entitled to three (3) transfer days.
Notification of
travel time
10-A-3-e- The pilot may take travel or transfer days
("travel time") provided for in 10-A-3-a above at his option
so long as he informs the Company at least seven (7)
days prior to when he intends to take the time.
Notwithstanding the pilot option provided above, if the
travel time desired results in a trip(s) drop on New Year's
Day, Memorial Day, Easter, Fourth of July, Labor Day,
Thanksgiving Day or Christmas or the day on either side,
Company concurrence is required. Entitlement to travel
time will be based solely upon a change in domiciles. The
pilot's monthly salary will not be reduced for such period
of absence from duty..
Page 144
;Section10-A-3-fUse of travel time
to cover I.D.'s
10-A-3-f- A pilot using travel time will not be required to
use vacation days if the number of travel/transfer days is
insufficient to totally cover all flying being dropped. If the
Company could reasonably deadhead the pilot to work a
portion of a trip I.D. not covered by travel/transfer days,
he may, with his concurrence, request the use of vacation
days and opt out of working this partial trip I.D.
Triggering events
for paid move
entitlement and
freeze purposes
10-A-3-g- When a pilot exercises his paid move
entitlement, he will incur the appropriate freeze. The
phrase "exercises his paid move entitlement" includes the
use of NRPS/NRSA commuting tickets, making
arrangements with a mover, requesting reimbursement for
mortgage maintenance costs, lease termination costs,
temporary living expenses or other covered miscellaneous
expenses associated with the move. The phrase does not
include the use of the applicable authorized travel for the
purpose of house-hunting.
10-A-3-h- Pilots transferring from any mainland domicile
or Honolulu domicile to Anchorage or from Anchorage to
any mainland or Honolulu domicile will be entitled to five
(5) travel days.
10-B-
Moving expenses when provided by this Agreement, shall be
available only:
Procedure for
authorization of
moving expenses
10-B-1- After the pilot has received notice of his activation
in the assignment which entitled him to the paid move; unless
he has requested and received advance permission to move
earlier; and
10-B-2- After the pilot has informed the Company of the
location from which his household goods will be picked up by
completing Company Form UFO 4324. This location must be
the pilot's primary residence, and the pilot is required to
coordinate his move arrangements through the United
Purchasing Department. The Company will not provide
reimbursement for expenses incurred with a mover with
whom the pilot has made his own arrangements; and
Minimum
requirement for
paid move 50
miles
10-B-3- If the distance of the move (the distance between
the pilot's old primary residence and his new primary
residence) is at least fifty (50) miles..
Page 145 Section 10-C
10-C-
Company paid
move policy
10-C-1-
10-C-1-a- Company paid moves, when provided by this
Agreement, shall be subject to Company policy regarding
non-management moves as outlined in the Pilot Transfer
and Moving Handbook dated April 12, 2000. In case of
conflicts between the Pilot Transfer and Moving Handbook
and the Pilot Agreement, the Pilot Agreement shall
govern. No revisions to this booklet will be made without
agreement with ALPA. (Future editions of the pilot move
booklet will be dated for reference.)
10-C-1-b- Moves paid under this provision shall be based
upon an entitlement computed on the distance between
the domicile at which the pilot was based, when he
received the assignment which provided him with a paid
move entitlement and the domicile associated with that
new assignment.
Paid move
normally
completed within
12 months unless
extenuating
circumstances
10-C-1-c- A pilot should complete his paid move within
twelve (12) months of his activation. If the pilot is unable
to complete his move within this twelve (12) month period,
he will inform the Company of his need for an extension
and provide a reason for this request.
Auto mileage
allowance
10-C-1-d- The Company shall calculate mileage
reimbursement based on the most direct AAA mileage
from point of origin at former domicile, to point of
destination at the new domicile, or to point of destination
at the new residence location, if less, plus garage storage
expenses while in transit. A pilot is eligible for mileage
reimbursement as provided in Section 10-A-2 and 10-A-3
only if he owned the automobile(s) on the date of
activation at the new domicile and he actually drives the
automobile(s) to the new domicile or residence location.
10-C-1-e- While waiting for their car(s) to arrive, the
Company will reimburse the cost of a rental car for pilots
who ship their car(s) to or from either Anchorage or
Honolulu.
10-C-1-f- A paid move from Alaska to any point in the 48
contiguous states will be available to any pilot who (1)
retires (including early and medical retirement) while
based in Anchorage and (2) who has an established
residence in Alaska. Notwithstanding the provisions of.
Page 146 Section 10-C-2
Section 10-C-3 of the Agreement, this move entitlement
shall apply only to a move from Alaska to the mainland.
10-C-2- Should a pilot receive a second paid move
entitlement prior to his using an earlier entitlement, he shall
be entitled only to one (1) Company paid move; however, the
paid mileage available for the transportation of automobile(s)
and household goods will be added during the period wherein
the two entitlements overlap.
Offset paid move
10-C-3- In the application of this paid move provision, the
locations of the old and new residences shall not affect the
entitlement, except that the pilot shall bear the added
expense incurred should the actual distance moved exceed
the mileage to which he is entitled. In determining the amount
to be paid by the pilot, the line haul allowance for moving
household goods will be computed by multiplying the "line
haul weight rate" for the move initially acquired by the weight
of the move actually accomplished.
Pilot forfeits
unused paid move
if he is awarded a
subsequent
vacancy in his
original domicile
10-C-4- Notwithstanding the provisions of 10-C-2 and 10-C-3
above, should a pilot receive another assignment which is
located at the domicile from which his first entitlement
originated, prior to using the entitlement associated with that
first reassignment, he shall receive no new paid move
entitlement and shall also forfeit the first entitlement.
Example: A pilot who has an unused entitlement between
ORD and DEN as a result of a bid to DEN which was
activated within the paid move entitlement period would lose
that entitlement and would receive no new entitlement if he
bid back to ORD and was activated before the expiration of
the paid move entitlement period associated with the original
ORD-DEN entitlement.
10-C-5- In the event a pilot incurs and is reimbursed for
expenses associated with house hunting and he
subsequently does not take his paid move entitlement, he
shall not be required to repay the Company for any expense
money received.
10-D-
Household effects
may be shipped
NRSA freight
Pilots entitled to transfer expenses under Paragraph 10-A-2
and 10-A-3 of this Section shall be allowed to ship household
effects via NRSA freight. Shipping items via NRSA freight will
not result in a freeze as stated in 10-A-3-g above..
Page 147 Section 10-E
10-E-
New hire pilots may ship up to 2000 pounds via NRSA freight.
10-F-
NRPS/NRSA
transportation
A pilot shall be allowed NRPS transportation between his
former domicile or on-line residence and his new domicile
until such time that he moves his home to the new location,
not to exceed six (6) months after the effective date of his
new assignment. In addition, if such pilot has not moved his
home to the new location within six (6) months, he shall be
allowed NRSA transportation until he moves, not to exceed
an additional six (6) months. If a pilot has used this NRPS/
NRSA travel entitlement, and he subsequently receives
another assignment which is located at the domicile from
which his first move entitlement originated, the Company will
continue to provide NRPS/NRSA transportation until the pilot
is activated into his subsequent assignment.
10-G- Miscellaneous Allowance
Miscellaneous
moving expenses
In order to reimburse employees, who are eligible for a
Company paid move, for miscellaneous expenses not
otherwise covered by the provisions of this Section, an
allowance of up to Three Thousand Dollars ($3,000.00) will
be available, subject to submission of evidence of actual
expenditure.
10-G-1- The types of expenses the Company would include
as being reimbursable are as follows:
10-G-1-a- Installation of telephone equipment
comparable to old residence.
10-G-1-b- Unexpired portion of auto registration fees.
10-G-1-c- Driver's license fees (for all family members).
10-G-1-d- Single payment of non-recurring sales, use,
excise or title tax on automobile(s) brought into a State
imposing such taxes.
10-G-1-e- Baby sitting, when expenses are necessitated by the move.
10-G-1-f- Alteration and/or installation of drapes and
carpeting to fit the new residence if the drapes or
carpeting were the ones used in the old residence and
they were not included in the Fair Market Value (FMV) of the house..
Page 148 Section 10-G-1-g
10-G-1-g- Retuning of a piano.
10-G-1-h- Commercial shipment of an automobile if
United Air Freight is not available and shipment has been approved by employee's Division (arrange shipment through EXOJF).
10-G-1-i- Installation of TV antenna if employee moved it from old residence.
This list is for example purposes only and it is not intended to
exclude other reasonable expenses which an employee might
incur solely as a result of the move.
10-H- Federal Income Tax Liability
The Company will provide a federal income tax liability
reimbursement as a result of the Company paid transfer and
moving expense.
At the end of each year, the employee will be provided a
facsimile of Federal Form #4782 listing all transfer and
moving expenses paid to or on the employee's behalf. In
addition, EXOPZ will provide an IBM listing of the breakdown
between deductible and non-deductible expenses, showing
the calculation of the tax override on the non-deductible
portion..
Page 149 Section 11-A
Section 11
Vacations
11-A-
Newly employed pilots will accrue one and one-sixth (1 1/6)
days of vacation for each full calendar month of continuous
employment with the Company during the remainder of the
vacation year after date of their initial employment, provided
that the first vacation for pilots initially employed on or after
May 1 of any year will not be due or payable except between
May 1 and April 30 of the next succeeding vacation year.
11-B-
Yearly vacation
accrual
11-B-1-
11-B-1-a- After the provisions of Paragraph 11-A of this
Section have been complied with, pilots shall receive
sixteen (16) days vacation each year provided
employment has been continuous. Commencing in the
vacation year following the completion of continuous
service shown below, pilots will receive vacation in the
following schedule:
Years of Service Vacation Days Each Year
Five (5) Twenty-Three (23)
Twelve (12) Thirty (30)
Twenty (20) Thirty-Seven (37)
Twenty-Five (25) Forty-Four (44).
11-B-1-b-
Pilots on a leave of absence or leaves ofabsence in excess of thirty (30) calendar days except in
the case of sickness or injury on the job shall have their
vacation reduced by one-twelfth (1/12) for each full month
that they are on leave of absence in excess of thirty (30)
days.
11-B-2-
2 splits for 16
days vacation
11-B-2-a- A pilot entitled to sixteen (16) calendar days or
more vacation in a vacation year, (including vacation
credit days applied under the provisions of Section 9-C-2-
d may elect, under Section 11-D or Section 11-E-1, to split
Page 150 Section 11-B-2-b
his vacation into not more that two (2) periods during a
vacation year, provided that one period is not less than
ten (10) days.
3 splits for 30
days vacation
11-B-2-b- A pilot entitled to thirty (30) calendar days or
more vacation in a vacation year, (including vacation
credit days applied under the provisions of Section 9-C-2-
d may elect, under Section 11-D or Section 11-E-1, to split
his vacation into not more than three (3) periods during a
vacation year, provided that no period is less than ten (10)
days.
For the purpose of awarding vacations, all pilots, in each
status and equipment type at each domicile, shall be afforded
the opportunity to be awarded their primary and secondary
preferences of vacation periods before tertiary vacations are
awarded to those pilots who preference for tertiary vacations.
Moving vacation
to fly trip
11-B-3- Scheduled days off immediately preceding or
following the scheduled vacation may be taken as part of the
vacation if a pilot so desires, however, where a pilot is
entitled to an adjusted vacation due to training days' credit,
this sub-paragraph shall apply after the training days' credit
earned are added to the scheduled vacation as specified in
Paragraph 11-B-1 and 11-B-2 of this Section. It is further
agreed that where a pilot's regular or adjusted vacation starts or ends between a scheduled outbound and return trip said pilot may, at his option, move the period of his vacation either forward or backward in order to fly a said scheduled round trip, provided that in no case shall a MAC pilot move his vacation period to extend into the following month.
11-C-
Vacation pay
11-C-1- A pilot assigned to a line of flying shall receive
during his vacation period, his salary, as provided by Section
3. In addition, he shall be considered on vacation for a
scheduled outbound preceding or a scheduled return
following his vacation period.
11-C-2- A reserve pilot shall receive during his vacation
period his salary as provided by Section 3.
11-D- Vacation Year Preferencing and Assignment of
Vacations
Annual vacation
allocation
percentages
11-D-1- Based on pilot assignments shown on the January 1
Domicile Roster and in sufficient time to permit the
preferencing and awarding of vacations prior to February 1.
Page 151 Section 11-D-2
for the prospective vacation year, the Company will post the
planned vacation allocation by status, equipment type and
domicile for each month of the vacation year. Such allocation
shall provide not less than seven per cent (7%) per month of
the total vacation liability for the vacation year in each status,
equipment type and domicile for nine (9) months of the
vacation year and not less than six percent (6%) per month of
the total vacation liability for the vacation year in each status,
equipment type and domicile for the remaining three (3)
months of the vacation year.
Split vacation
designation
11-D-2- All pilots will be eligible to preference the above
allocated vacation periods based on their status, equipment
type and domicile assignment as shown on the January 1
Domicile Roster. Notwithstanding this provision, pilots who
are surplussed as a result of an equipment domicile closing
who are awarded a bump but are not on the domicile roster at
their new assignment as of January 1, will be permitted to bid
their annual vacation during the annual vacation bidding
period at their bump assignment.
Pilots who elect to split their vacation will designate their
preference as being for a primary, secondary or tertiary
assignment. Not less than the minimum percent per month of
the total vacation liability for the vacation year in each status
and equipment type at each domicile shall, as of February 1,
be awarded in order of seniority based on the pilot's
preference.
11-D-3- Pilots awarded vacation periods in accordance with
sub-paragraph 11-D-1 and 11-D-2 above shall be notified of
their vacation assignment not later than February 1
preceding the vacation year in which the vacation is
assigned.
11-D-4- A pilot assigned a vacation period under the
procedures of this Paragraph D shall take such vacation as
assigned unless changed in accordance with the following:
11-D-4-a- A pilot preferences and is awarded a different
vacation period in accordance with the vacation
preferencing procedures of Paragraph 11-E-1 below,
which is prior to the vacation period he was awarded
under the procedures of this Paragraph D.
11-D-4-b- Prior to taking his assigned vacation period, he
is activated in a different status, equipment type or
domicile than that to which he was assigned on January 1.
Under these circumstances, the Company may cancel the.
Page 152 Section 11-E
vacation assigned to him under this Paragraph D and
reassign him to a different vacation period in accordance
with Paragraph 11-E below.
11-E- Monthly Preferencing and Assignment of Vacations
11-E-1- Voluntary Assignments
Monthly vacation
11-E-1-a- Vacation periods allocated in each month shall
become firm sixty (60) days prior to the first (1st) of each
month.
11-E-1-b- Eligibility of pilots to preference a vacation
period in a given status and equipment type for the month,
shall be based on their status and equipment type
assignment as shown in the Domicile Roster published for
the month preceding.
Seniority controls
vacation
assignments
11-E-1-c- Preference of vacation periods for the month in
which eligible pilots shall take their vacation shall be
granted in order of seniority in each status and equipment
type at each domicile. Pilots who elect to split their
vacation will designate their preference as being for a
primary, secondary or tertiary assignment.
Pilots desiring to take their entire vacation as one
continuous assignment shall be awarded such vacation
even though the last part of one month and the first part of
the following month are involved, provided unassigned
vacations are allocated in both months, and the pilot is
eligible to be assigned a vacation in both months and the
pilot's seniority entitles him to be assigned a vacation in
the month his vacation starts.
11-E-1-d- Each pilot assigned a vacation in accordance
with his preference shall be notified of the date of his
vacation assignment not less than sixty (60) days before
the first (1st) day of the month in which his vacation period
falls. The pilot shall not be required to take his vacation
unless such notice is given. Once a pilot has been
assigned and notified of a vacation period in accordance
with this Paragraph, such vacation assignment shall not
be changed without said pilot's concurrence except when
such pilot changes status, equipment type and/or
domicile, under Section 8, prior to or coincidental with his
assigned vacation period.
11-E-1-e- Any vacation periods created and available
within sixty (60) days of the vacation period shall be
offered to eligible pilots in the status and equipment type.
Page 153 Section 11-E-2
in order of their seniority and may be assigned with the
pilots' concurrence with less than sixty (60) days notice
required in sub-paragraph d above.
11-E-2- Involuntary Assignments
Involuntary
vacation
assignments
10 days minimum
11-E-2-a- In the event there are insufficient preferences
submitted for posted vacation periods in a status and
equipment type at a domicile, the Company may assign
pilots to such vacation periods in reverse order of
seniority of the eligible pilots in each status and
equipment type. Involuntarily assigned vacation periods
shall be for ten (10) calendar days or the amount specified
by the pilot unless (1) the balance of a pilot's vacation is
less than ten (10) days, or (2) this period is the final split
available to him under the provisions of Section 11-B-2; in
which cases the balance of his vacation will be assigned.
In no event shall a pilot receive more vacation periods
than available to him under the provisions of Section 11-B-
2. Vacation periods assigned to pilots involuntarily shall
be considered to carry the lowest vacation priority which
the affected pilot has remaining unused in the current
vacation year.
Eligibility for
involuntary
vacations
Pilot in last year
will not be given
involuntary
vacation
11-E-2-b-
11-E-2-b-(1) Eligibility of pilots to be involuntarily
assigned a vacation period in a given status and
equipment type at a domicile in a given month shall be
based on their status and equipment type assigned at
the domicile as shown in the Domicile Roster published
for the month preceding the month in which the
involuntary assignment is to be made. A pilot who has
a vacation (voluntary or involuntary) will be ineligible
for involuntary assignment to a vacation in the same
calendar month. A pilot who has a vacation (voluntary
or involuntary) will be ineligible for involuntary
assignment to a vacation in an adjoining calendar
month unless there are no other pilots eligible for
assignment. These restrictions shall not be applicable
in the last two (2) months of the vacation year. A pilot
will be ineligible for assignment under Section 11-E-2-a
in a given vacation year if his retirement date falls
within that vacation year..
Page 154 Section11-E-2-c
Written notice of
intent to retire
prevents
involuntary
vacation
11-E-2-b-(2) A pilot who plans to retire on a date that is
not within the vacation year in which he will each
normal retirement age (age 60) may make himself
ineligible for involuntary vacation assignments during
the vacation year in which he plans to retire by giving
the Company written notice of his planned retirement
date. Such notice must be provided to the Company on
or before December 1 of the year which is prior to the
beginning of the vacation year in which he plans to
retire. (e.g. if the pilot plans to retire in the vacation
year that runs from May 1, 2001 through April 30, 2002;
then his notice must be submitted to the Company not
later than December 1, 2000.) In the event the pilot
rescinds his intent to retire, he will do so by notifying
the Company in writing and his unassigned vacation
will be assigned at the discretion of the Company
Notification of
involuntary
vacation
11-E-2-c- Each pilot involuntarily assigned a vacation
shall be notified of the date of his vacation assignment not
less than sixty (60) days before the first of the month in
which the vacation falls, except that any vacation periods
created and available within sixty (60) days of a vacation
period which are not voluntarily accepted by pilots under
the provisions of sub-paragraph 11-E-1-e above, may be
assigned to eligible pilots in inverse order of seniority in
the status and equipment type, provided they are given
not less than forty-five (45) days notice prior to the start of
their vacation periods and provided further that no such
notice shall be provided after schedule preferencing has
closed for the month in which the vacation falls. Once a
pilot has been assigned and notified of a vacation period
in accordance with this Paragraph, such vacation
assignment shall not be changed without said pilot's
concurrence, provided that when a pilot who has been
awarded a vacation assignment changes status,
equipment type and/or domicile, under Section 8, prior to
or coincidental with his assigned vacation period, the
Company may require the pilot to forfeit that vacation
assignment.
11-E-3-
Vacation conflicts
with transition
training
11-E-3-a- Notwithstanding the provisions of Paragraph
11-D and 11-E of this Section, a pilot awarded a voluntary
or involuntary vacation that conflicts with required
transition training associated with an awarded
assignment, may have the vacation cancelled and
rescheduled in order to attend such training..
Page 155 Section 11-E-3-b
Pilot may agree to
defer vacation
into next year if
his activation is in
last 3 months of
vacation year
11-E-3-b- In the event that a pilot is planned to be
activated into a new assignment during the last three (3)
months of the vacation year, with pilot concurrence, the
Company may defer any awarded vacation scheduled to
occur after his activation, until the following vacation year.
11-E-3-c-
Pilot ineligible for
vacation for two
months following
training
11-E-3-c-(1) A pilot who is scheduled to be trained as a
result of an awarded assignment will not be awarded
nor assigned to a monthly vacation that would be
scheduled to begin during either of the next two
schedule months following the month in which the pilot
is scheduled to complete his training at DENTK.
11-E-3-c-(2) Should the application of the provisions of
the above paragraph result in the Company being
unable to assign all of a pilot's current year's vacation
within that current vacation year, any unassigned
vacation will be deferred to the following vacation year
and thereafter will be administered under the
provisions of Section 11-F.
11-F- Vacation Deferral
Pilot may defer
vacation from last
two quarters into
next vacation year
at Company
request
11-F-1- In addition to the preference and assignment
provisions in 11-D and 11-E, above, during the monthly
preferencing for vacations in the last quarter of the vacation
year, a pilot may indicate a preference to defer his remaining
assigned and/or unassigned vacation into the following
vacation year. Deferred vacation must qualify as a full
vacation "split" in the current vacation year. The Company
will determine the domiciles, equipment types and statuses
and the amount (if any) in which deferrals are required.
Successful volunteers will be notified of their deferral at the
time vacations are published for each month of the quarter. In
the event deferrals become available after the vacations are
awarded, volunteers may be offered those deferrals when
they become available.
11-F-2- Vacations deferred into the following vacation year
under any of the provisions of this Section 11 shall become
part of the pilot's total vacation due in the following vacation
year and will be preferenced and assigned as regular monthly
vacations. Further, if ten (10) or more days of vacation have
been deferred from any single vacation year, the pilot shall.
Page 156 Section 11-G
be eligible to be awarded one (1) or more additional vacation
periods ("splits") in the new vacation year, in addition to the
periods already available to him under the provisions of
Section 11-B-2 in the year into which vacation has been
deferred, as follows:
Additional split for
deferred vacation
for next year
In order to be eligible to be awarded additional vacation
periods during the year into which vacation has been
deferred, the deferred vacation alone must be able to qualify
as one (1) or more legal vacation periods, under either or 11-B-2-b, whichever provision is applicable to the pilot in
question. In order for deferred vacation to qualify for
additional splits, the pilot must have unused vacation that
entitles him to a split opportunity for which he was entitled in
the year from which vacation is being deferred. Additionally,
the deferred vacation must total enough days to comply with
the minimum length requirement for each vacation period.
Due to the advance notice requirements for awarded
vacations, it is recognized that deferred vacation time may
not be available to be preferenced in the first months of the
new vacation year.
11-G-
Company may
offer deferral of
vacation from 1st
and 2nd quarter to
the remaining
months of
vacation year
Notwithstanding the provisions of this Section 11, the
Company may offer and individual pilots may accept, on a
voluntary basis, the deferral of assigned vacations in the first
(1st) and second (2nd) vacation quarters to the remaining
months of the vacation year. The acceptance of the Company
offer to the pilots will be recognized in seniority order from
among the pilots affected. Pilots accepting deferral of their
assigned vacation shall be assigned their remaining vacation
entitlement in accordance with their seniority and the
provisions of Section 11-E during the remaining months of
the vacation year.
11-H-
Any pilot who leaves the service of the Company shall be
paid for all accrued but unused vacation credit for the
preceding vacation year in addition to any other
compensation due him at the date of termination of
employment. In addition, any pilot having a full year or more
of service with the Company at the time of leaving the
Company's service will be paid for all accrued vacation credit
in the current vacation year up to the end of the month
preceding the separation, if:.
Page 157 Section 11-H-1
11-H-1- He gives the Company at least ten (10) calendar
days notice of intent to resign, and
11-H-2- He is not discharged for just cause.
11-I-
Pilots who are furloughed in a reduction in force will be
granted vacation pay for all vacation time accrued to the end
of the month preceding their furlough.
11-J- Vacation Trip Drop
The Company may also liquidate vacation as follows:
Vacation trip drop
Procedures
11-J-1- At the discretion of the Company, based upon its
evaluation of available manpower, a pilot may be allowed to
drop a trip(s) with pay and reduce his available vacation from
his next year's accrual. Next year's accrual is that vacation
earned in the current year to be taken in the following year;
except that trips dropped between December 1 and May 1
shall be reduced from vacation earned in the following
vacation year.
11-J-2- Such trip drop will be requested in the same manner
as ANP is currently administered (see Paragraph 11-J-4 of
this Agreement). The decision to use vacation days for the
trip drop must be made by the pilot at the time the request is
granted.
11-J-3- Vacation days used will correspond to trip days
dropped, not to duty periods dropped.
11-J-4- Requests will be considered, on a first-come-first-served basis; however, it is recognized that, because of
better ability to forecast on a short-range basis, as well as
changing requirements, later requests may be granted after
earlier requests were denied.
11-J-5- A vacation drop(s) may be allowed which exceed the
pilot's vacation accrual as of the time of the drop; however,
should the pilot later leave the Company before earning
enough vacation to cover this drop(s), the value of the
drop(s) will be deducted from his last paycheck and/or from
other monies owed the pilot by the Company..
Page 158 Section 11-J-5
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Page 159 Section 12-A
Section 12
Leave of Absence
12-A-
Maximum LOA 3
Years
When the requirements of the service will permit, a pilot may
be granted a leave of absence up to a maximum of three (3)
years for any reason deemed adequate by the Company.
When such leave(s) are granted, the pilot shall retain and
continue to accrue seniority during such leave(s), provided,
however, that he shall not accrue any greater seniority nor
shall his relative seniority position be different than it would
have been had he not been granted such leave; and,
provided, further, that the pilot maintains his airline pilot's
certificate or certificates. If, during such leave(s), a pilot shall
permit his certificate or certificates to lapse, his seniority
shall accrue only to the date of lapse. A pilot returning from
an authorized leave or extension thereof shall be permitted to
resume his assignment at the domicile to which he was
based immediately prior to the beginning of such leave or, in
the event his assignment has been moved, to follow the
assignment or, if a pilot while on leave has successfully
exercised bidding rights, he shall assume the new duties
resulting from such award and periods of absence shall not
apply to the time limits prescribed in Section 8-E.
12-B-
When leaves are granted on account of sickness or injury, a
pilot shall retain and continue to accrue seniority and
longevity, irrespective of whether or not he is able to maintain
his airline pilot's certificate or certificates, until he is able to
return to flight duty or is found to be unfit for such duty for a
continuous period of seven (7) years (ten (10) years, if
extended as provided in Paragraph 6-E-2 of Section 6). A
pilot shall retain full bidding rights while on such leave.
12-C-
A pilot returning from leave occasioned by sickness or injury
shall be permitted to resume his assignment at the domicile
at which he was based immediately prior to the beginning of
such leave or, in the event his assignment has been moved,
to follow the assignment or, if such pilot while on leave has.
Page 160 Section 12-D
successfully exercised bidding rights, he shall assume the
new duties resulting from such award.
12-D-
Leaves for active
military duty
A pilot ordered to enter active military duty during a period of
national emergency or pursuant to law or a pilot classified as
1-A under the Selective Service Act who is unable to obtain a
deferment and chooses to enlist for military duty in the Armed
Forces, shall retain and continue to accrue seniority,
provided, however, that pilots so ordered to enter military
service shall continue to accrue seniority only during the
period in which they are on Armed Forces duty plus ninety
(90) days and in no case will any such pilot accrue seniority
for a period exceeding five (5) years plus ninety (90) days,
unless otherwise provided by law; provided, further that any
such pilot shall not accrue any greater seniority nor shall his
relative seniority position be different than it would have been
had he not entered such military duty.
12-E-
Any dispute arising hereunder concerning the physical fitness
of a pilot shall be settled in accordance with Section 14.
12-F-
4 year leave for
ALPA position
A pilot shall be granted a leave of absence for a period not to
exceed four (4) years to accept a position with the
Association or to perform any duties relating to council
activities and will continue to accrue seniority while on leave
of absence, provided that during such period the pilot
maintains his airline pilot's certificate or certificates and
provided, further, that the Company shall not be obligated to
grant such leave to more than two (2) pilots concurrently.
12-G-
A pilot shall be granted a leave of absence to accept a
salaried position as an officer with the Association and will
continue to accrue seniority while on such leave of absence,
provided that during such period, the pilot maintains his
airline pilot's certificate or certificates and, provided further,
that the Company shall not be obligated to grant such leave
to more than two (2) pilots concurrently..
Page 161 Section 12-H
12-H-
Movement of
vacation under
FMLA policy for
birth or adoption
12-H-1- When a pilot takes parental leave pursuant to the
terms of the Pilot Family Medical Leave Policy for the Birth or
Adoption of a Child, the pilot will have the ability to choose
current year's vacation or next year's vacation to cover the
absence. Should the pilot chose to move a current year
vacation, he will be allowed to move this vacation from a
month when he ca fly to a period associated with the
upcoming required absence, and the vacation must then be
liquidated during that period. He must notify his Flight Office
in writing at least 45 days prior to the month in which the
vacation is scheduled or the month in which he desires to
take the vacation, whichever is earlier. If the planned
absence unexpectedly becomes unnecessary or otherwise
terminates prior to the liquidation of the deferred vacation,
the remaining deferred vacation will be liquidated per the
Agreement. Vacation as described herein can be deferred
into a subsequent vacation year provided the planned
absence is projected into that period.
Returning home
to begin parental
leave
12-H-2- If a pilot is working a trip and it becomes necessary
for him to return home to begin the planned parental leave,
he will be provided NRPS travel to his home.
Contract Admin Home
Instruction Page
Agreement Table of Contents
Interpretations Table of Contents.
Page 162 Section 12-H-2
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Page 163 Section 13-A
Section 13
Sick Leave
13-A-
No-occupational
sick leave accrual
1,250 hours
13-A-1- Pilots will be credited, for non-occupational sick
leave purposes, with six (6) hours of sick leave credit for
each month of employment which entitles him to the accrual
of longevity as a pilot up to a maximum of one thousand two
hundred fifty (1,250) hours.
13-A-2-
Negative sick
leave bank for 1st
year pilot
13-A-2-a- During a pilot's first year of service he may be
paid no more than sixty (60) hours from a negative sick
leave bank. These hours will be debited against sick hours
accrued as stated in paragraph A.1 above.
Sick leave
restoration for 1st
year pilot
13-A-2-b- During a pilot's first year of service, if he
makes up the days missed, if on reserve, or picks up and
performs open flying equivalent to the actual flight hours
lost, if a lineholder, his sick leave account will be restored
by the number of credit hours flown.
13-A-3- Sick leave with pay in case of actual sickness will
be granted up to the number of hours of sick leave credited to
the pilot at the time, as follows:
Sick leave
account reduced
by actual hours
for lineholders
13-A-3-a- The accumulated sick leave credit of a pilot
assigned to a line of flying will be charged with the number
of actual flight hours which he missed due to sick leave.
Sick leave
reduction for
reserves
13-A-3-b- The accumulated sick leave credit of a pilot on
reserve will be charged with four hours and ten minutes
(4:10) for each duty day missed due to sick leave; not to
exceed seventy-five (75) hours in any single month. A
reserve pilot will not be charged for the day he calls off
sick leave provided he calls off before twelve (12 noon)
local domicile time. If the reserve is required to obtain
medical clearance and is unable to call off sick prior to 12
noon, he will not be charged for that day..
Page 164 Section 13-A-4
Reduced sick
leave for full
month
13-A-4- A pilot who is granted sick leave with pay for the
entire month, may request payment of 2/3rds salary in lieu of
the amount specified in sub-paragraph 3-a and b above.
Such pilot's accumulated sick leave credit would be reduced
by fifty (50) hours for that month. To exercise this option, a
pilot must notify the Company in writing within one (1) day
after the end of the month in which he was granted the full
month sick leave with pay.
Reaccrual of sick
Leave
13-A-5- A pilot who has two hundred and fifty (250) or more
hours in his sick leave account as of the date of illness, will
reaccrue, at the rate of seven (7) hours per month until such
time as his sick leave account is restored to the level prior to
the illness.
13-A-6- Sick leave with pay will be granted only in cases of
actual sickness. The Company may require a doctor's
certificate before paying such sick leave. Dental and doctor
appointments will not be considered as a basis for paid sick
leave unless it can be shown that the dentist or doctor in
question does not maintain office hours outside the pilot's
scheduled work time or on his days off. Sick leave with pay
will not be granted while a pilot is on a leave of absence.
13-B- Occupational Illness or Injury Leave
Occupational 500
Hours
No-
Occupational may
be used if needed
13-B-1- Pilots with one or more years of active service shall
be credited with sixty (60) hours of occupational illness or
injury leave credit. Thereafter, pilots shall accrue six (6)
hours of occupational illness or injury for each month of
active service to a maximum of five hundred (500) hours.
This accrual will be in addition to non-occupational sick leave
and may be used for absence resulting from occupational
illness or injury only. After exhausting this occupational
illness or injury leave, the pilot may use his non-occupational
sick leave credits. He may not, however, use occupational
illness or injury leave for non-occupational illness or injury
under any circumstances. When a pilot on occupational
illness or injury exhausts his occupational leave and uses
non-occupational leave, his ensuing accrual of occupational
injury leave shall be credited to his non-occupational sick
leave until such time as he has replaced all non-occupational
sick leave which was used for his occupational illness or
injury..
Page 165 Section 13-B-2
Reaccrual of sick
Leave
13-B-2- A pilot who has two hundred and fifty (250) or more
hours in his occupational sick leave account as of the date of
illness, will reaccrue, at the rate of seven (7) hours per month
until such time as his sick leave account is restored to the
level prior to the illness.
13-B-3- When it is necessary for a pilot to be absent from
work because of occupational injury or illness, he must
request payment for occupational illness or injury leave in
writing not later than the pay period following his return to
service on a form provided by the Company. A doctor's
certificate may be required before granting pay for this
purpose. In the event he receives Workmen's Compensation
because of such absence, he shall turn over such
compensation to the Company and shall have his sick leave
or occupational illness or injury credit used in connection with
such injury or illness restored to the extent that the
compensation offsets the pay granted. Credits will be
restored only in units of one (1) hour.
13-C-
Procedure for
receiving
occupational
injury/illness
payments
All credit for non-occupational sick leave and for occupational
illness or injury leave will be cancelled if employment ceases
for any purpose, and no payment for any such accumulated
credit will be made at any time. Non-occupational sick leave
and occupational illness or injury leave will not accrue while a
pilot is on leave of absence.
13-D-
Each pilot's current accrual of occupational and non-
occupational sick leave will be computed and included with
one paycheck each month.
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Page 166 Section 13-D
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Page 167 Section 14-A
Section 14
Physical Examinations
14-A-
Reimbursement of
FAA physical
expenses under
the traditional
medical plan
14-A-1- A pilot shall be notified in writing as to his failure to
pass such physical examination required by the Company.
The pilot shall, at his request, be furnished with copies of all
medical tests, x-rays and any other documentation or
information which was utilized to determine the pilot's
inability to pass the Company physical examination. The
above shall be provided at no cost to the pilot. Additionally,
two (2) FAA physicals per year for Captains and International
First Officers and one (1) FAA physical per year for all other
pilots will be covered expenses under the Medical Plan.
These FAA physical expenses will be reimbursed at 80% up
to a maximum medical plan reimbursement of $100 per
physical after the pilot has met the medical plan deductible.
Availability of
medical records
14-A-2- All information contained in or related to a pilot's
medical file shall be kept confidential and not released to
anyone except by the pilot's specific written consent. When
required by a court order or other legal requirement to
release information, the pilot will be notified of such action.
Should action be taken under 14-B below, all medical records
pertinent to the case will be made available to the doctors
involved.
14-B-
Any pilot hereunder who fails to pass a Company physical
may, at his option, have a review of his case in the following
manner:
Second opinion
and neutral
evaluation of
medical problems
14-B-1- He may employ a qualified medical examiner of his
own choosing, at his own expense, for the purpose of
conducting a physical examination for the same purpose as
the physical examination made by the medical examiner
employed by the Company, provided that he communicate, in
writing, to his Flight Manager the name of the medical
examiner he has chosen..
Page 168 Section 14-B-2
14-B-2- A copy of the findings of the medical examiner
chosen by the pilot, recorded on a pertinent form furnished by
the Company with such supplementary attachments as the
medical examiner may deem pertinent to a true evaluation of
the examinee's physical fitness and qualification for flying
duty, shall be furnished to the Company. In the event that
such findings verify the findings of the medical examiner
employed by the Company, no further medical review of the
case shall be afforded.
14-B-3- In the event that the findings of the medical
examiner chosen by the pilot shall disagree with the findings
of the medical examiner employed by the Company, the
Company will, at the written request of the pilot, ask for the
two medical examiners to agree upon and appoint a third
qualified and disinterested medical examiner, preferably a
specialist in Aviation Medicine, for the purpose of making a
further physical examination of the employee.
14-B-4- Such three (3) doctors, one representing the
Company, one representing the pilot affected and one the
disinterested doctor approved by the Company doctor and
the pilot's doctor, shall constitute a board of three (3), the
majority opinion of which shall decide whether the pilot is
physically qualified for flying duty.
14-B-5- The expenses of the employment of the third
medical examiner shall be borne one-half (1/2) by the pilot
and one-half (1/2) by the Company. Copies of the board's
report shall be furnished to the Company and to the pilot.
Return of sick
leave improperly
charged
14-B-6- In the event a third medical examiner is utilized who
finds the pilot physically qualified for flying duty, he shall be
returned to flying status in the position he left or have the
option of bumping to any position his seniority would have
allowed him to be awarded on any bid that was posted and
awarded subsequent to his failure to pass a Company
physical examination and shall be paid for time lost in an
amount which he would ordinarily have earned had he been
continued in service. Any sick leave reduced from the pilot's
account due to his failure to pass a Company physical shall
be returned to his account if he is returned to flying duty.
Procedure for
pilot initiated
medical
evaluation
14-B-7- This same procedure may be used should there be
disagreement between a pilot and the Company wherein the
pilot believes himself permanently unfit for flight duty and the
Medical Department of the Company does not agree.
Page 169 Section 14-B-8
14-B-8- A pilot who has exhausted his non-occupational sick
leave bank and who initiates medical arbitration will be paid
until the arbitration is concluded. The pilot will receive a
monthly salary equal to the monthly lineholder guarantee for
the position (status and equipment type) he holds, provided
this compensation will be refunded if the Company prevails in
the medical arbitration.
14-C-
In the event a pilot fails to pass a Company physical
examination but is able to pass an FAA 1st class physical
examination, the procedures set forth in Paragraph 14-B may
be initiated by said pilot.
14-D-
In the event a pilot cannot pass an FAA 1st class physical
examination, but can pass an FAA 2nd class physical
examination and reasonable medical judgment indicated that
he may obtain an FAA 1st class medical certificate in the
future, the Company shall utilize the pilot in the highest
position to which he elects to bid or bump and for which he is
medically qualified to fly. The procedures of Paragraph 14-B
may be initiated by a pilot in the event of any dispute under
this Paragraph D.
14-E-
Pilot physicals at
any UAL medical
facility
A pilot may take his Company physical at other than his home
domicile, provided he gives his domicile Medical Department
sufficient notice to have his medical records transferred to
the domicile conducting the Company physical. Any pilot
required to travel out of domicile to take a Company physical,
due to lack of Company medical facilities (or designated
alternate) at his location, will be provided expenses in
accordance with Section 4-A-1 and hotel accommodations, if
necessary. Should the United Corporate Medical Department
permanently cease operations, each United pilot shall be
entitled to up to $50.00 annually for a FAA required EKG.
14-F-
PSA test When taken in conjunction with a Company physical, the Company will offer any pilot age 50 or over an optional PSA test at no charge to the pilot. Should the pilot choose not to request a PSA test as part of his annual company physical,
an annual PSA test for men age 50 and over will be a.
Page 170 Section 14-G
covered expense under the medical plan. This expense will
be reimbursed at 80% regardless of whether the pilot has met
the deductible.
14-G-
PAP t est An annual cervical cytology screening will be a covered expense under the medical plan. This expense will be
reimbursed at 80%, up to a maximum medical plan
reimbursement of $150, regardless of whether the pilot has
met the deductible.
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Page 171 Section 15-A
Section 15
15-A-
Pilots should
apply for
additional sick
leave to qualify
for workman's
comp
If a pilot has complied with the provisions of Section 13-B
and it has been determined by the Company, or by the
governing legal requirements, that the pilot is entitled to
Worker's Compensation Benefits, the Company shall provide
such benefits as follows: Without prejudice to any alternative
rights to file a claim which may accrue in another jurisdiction,
the Company and Association have agreed that the Company
will consider all pilots to be eligible to file for Workmen's
Compensation Benefits in the State of Illinois, due to the
Company's headquarters, which is the pilots' base of
employment, being located in Illinois. This provision shall
apply to all pilots, whether scheduled in domestic or
international operations.
15-B-
The monetary benefits so paid shall be in addition to any
monetary benefits paid pursuant to the provisions of
Paragraph 16-A of Section 16 and will be paid to the
beneficiaries prescribed by the applicable law as herein
provided.
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Page 172 Section 15-B
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Page 173 Section 16-A
Section 16
Missing Benefits
16-A-
Pay while missing
Seniority while
Missing
When any pilot in the service of the Company becomes
missing or kidnapped while engaged in operations for the
Company, he shall be allowed compensation as set forth in
Section 3-B for a period of one (1) year after the date of
either of the above or until the date that death is established,
whichever first occurs. If, upon expiration of such one (1)
year period, any such pilot is still missing or if prior to that
time death is established, the Company shall pay or cause to
be paid the death benefits provided for in Paragraph 15-A-1
and 2 of Section 15, whichever is applicable. Pilots shall
maintain and continue to accrue seniority and longevity for
pay purposes during the period they are missing.
16-B-
The monthly compensation allowable under Paragraph 16-A
of this Section to a pilot who is missing or kidnapped shall be
credited to such pilot on the books of the Company and shall
be disbursed by the Company in accordance with written
directions from him. The Company shall require each pilot
hereafter employed by the Company to execute and deliver to
the Company prior to such employment a written direction in
the form set forth herein. The Company shall, within thirty
(30) days after the signing of this Agreement, notify all pilots
of the provisions of this Section of the contract and furnish all
pilots a copy of the form hereinafter set forth to be completed
by the pilot and filed with the Company. Any payments due to
any pilot under this Section which are not covered by a
written direction as herein provided shall be held by the
Company for such pilot and, in the event of his death, shall
be paid to the legal representatives of his estate. The
direction referred to shall be in substantially the following
form:
"To United Air Lines, Inc.
Date:__________________________" "You are herein
directed to pay all monthly compensation allowable to me
under Paragraph A of Section 16 of that certain Agreement
between United Air Lines, Inc., and the Air Line Pilots in the.
Page 174 Section 16-C
service of United Air Lines, Inc., as represented by the Air
Line Pilots Association, International, dated as follows:
$________________per month
to_______________________________________________
_________________________________________________
(address)
as long as living, and thereafter to
_________________________________________________
(name)
_________________________________________________
(address)
as long as living."
"The balance, if any, and any amounts accruing after the
death of all persons named in the above designations shall
be held for me, or in the event of my death before receipt
thereof, shall be paid to the legal representatives of my
estate."
"The foregoing direction may be modified from time to time by
letter signed by the undersigned and any such modification
shall become effective upon receipt of such letter by you."
"Payments made by the Company pursuant to this direction
shall fully release the Company from the obligation of making
any further payment with respect thereto."
_________________________________________________
(pilot's signature)
16-C-
A pilot who is imprisoned in a foreign country for an action
that is related to his duties for the Company shall be eligible
for the compensation set forth in Section 16-A above. In the
event a pilot is kidnapped or wrongfully imprisoned while
engaged in the service of the Company, the Company, in
conjunction with the Association, will diligently work to enlist
the active assistance of governments and governmental
agencies in an effort to gain the release of the pilot(s).
If a pilot is not returned home within one year, both the
Company and Association agree to meet and review the.
Page 175 Section 16-D
individual circumstances of the case and review applicable
benefits to the pilot's family..
Page 176 Section 16-D
This Page Intentionally Left Blank.
Page 177 Section 17-A
Section 17
Grievances
17-A- Non-Disciplinary Grievances
180 day limit for
filling no-
discipline
grievance
Any pilot or group of pilots, including probationary pilots,
covered by this Agreement who have a grievance concerning
any action of the Company affecting them, except matters
involving discipline or discharge, shall have such grievance
considered in accordance with the following procedures
provided such grievance is filed within one hundred and
eighty (180) days after the pilot(s) reasonably would have
had knowledge of the facts upon which the grievance is
based. This does not preclude claims for adjustment arising
out of bookkeeping errors beyond one hundred and eighty
(180) days.
17-A-1- A written request for a hearing setting forth a
detailed statement of the known facts out of which the
grievance arose and a request for relief shall be filed with his
or their Manager/Director of Flight Operations.
17-A-2- A hearing shall be held within not less than ten (10)
days nor more than twenty (20) calendar days after receipt of
such written request by the Manager/Director of Flight
Operations or his designee and within fifteen (15) calendar
days after the close of the hearing of the Manager/Director of
Flight Operations or his designee shall announce his decision
in writing. All notices of hearings and decisions reached
therein shall be in writing to the signator of the grievance,
with copies to the grievant(s), to the Legal Department of the
Association (staff attorney), the Local Executive Council
Chairman, Local Grievance Chairman, MEC Grievance
Chairman and the MEC Chairman.
17-A-3- If an appeal is desired such appeal shall be made in
writing to the Senior Vice President-Flight Operations, with a
copy to the Manager/Director of Flight Operations provided
such appeal is filed within thirty (30) calendar days after the
date the decision was received by the grievant(s).
17-A-4- Such appeal hearing shall be held within fifteen (15)
calendar days after the receipt of the written appeal by the
Senior Vice President-Flight Operations. Within fifteen (15)
calendar days after the close of such appeal hearing, the
Senior Vice President-Flight Operations or his designee shall.
Page 178 Section 17-A-5
announce his decision in writing to the grievant(s) and furnish
a copy to the Legal Department of the Association (staff
attorney), the Local Executive Council Chairman, Local
Grievance Chairman, MEC Grievance Chairman and the MEC
Chairman.
17-A-5- Further appeal, if made, shall be to the "United Air
Lines Pilots' System Board of Adjustment" as provided for in
Section 18 of this Agreement, provided such appeal is made
within sixty (60) calendar days from the date of receipt by the
Legal Department of the Association (staff attorney) of the
decision of the Senior Vice President-Flight Operations or his
designee, except as provided in 17-A-6 below.
Extension of 60
day time limit for
submission of
no-disciplinary
grievance to
System Board to
allow U-MEC
review panel to
review grievance
17-A-6- The sixty (60) day time period for the submission of
non-disciplinary grievances to the Pilots' System Board of
Adjustment, pursuant to Section 17-A-5 and 18 of the
collective bargaining agreement, will be extended for any
grievance under review by the UAL-MEC Grievance Review
Panel until thirty (30) days after a determination by such
panel on submission of such grievance to the System Board
or until sixty (60) days after entry of a final judgment
(including appeals) in any legal proceedings resulting from a
determination not to submit any such grievance to the
System Board, whichever occurs later.
The Association will advise the Company of a grievance
pending before the UAL-MEC Grievance Review Panel within
the sixty (60) day time period established under Section 17-
A-5 of the agreement and will advise the Company of any
legal proceedings within sixty (60) days after
commencement. Should the disposition of the case result in a
judgment which includes recognition of an accrued liability by
the Company, such liability shall not continue to accrue
during the period from the date the notice of review was filed
until the date the appeal was filed. Furthermore, the
members of the System Board of Adjustment (including the
neutral in five member Board proceedings) shall not be
advised that any such grievance was considered by the UAL-MEC
Grievance Review Panel or of any determination by
such panel or of subsequent legal proceedings and shall not
consider any such matters in hearing and deciding any such
grievance.
Page 179 Section 17-A-7
17-A-7- Grievances Filed By The MEC Chairman
Right to request
hearing
MEC Chairman
may file for future
relief
The MEC Chairman or his designee may by written request
ask for a review by the Senior Vice President-Flight
Operations of any alleged misapplication or misinterpretation
of this Agreement which is not at the time the subject of a
grievance. The relief sought shall be limited to a change in
future application or interpretation of the Agreement. The
Senior Vice President-Flight Operations/designee shall have
twenty (20) days after receipt of the request for review in
which to investigate and issue a decision; unless a hearing is
requested by either party, in which case the decision shall be
due fifteen (15) days after the hearing. If the decision is not
satisfactory, further appeal may be made in writing by the
President of the Association to the "United Air Lines Pilots'
System Board of Adjustment" as provided for in Section 18 of
the Agreement, provided such appeal is made within thirty
(30) calendar days from the receipt by the Legal Department
of the Association (staff attorney) of the decision of the
Senior Vice President-Flight Operations. It is understood
such right under this sub-paragraph shall not apply to
hypothetical cases or situations.
17-B- Discipline and Discharge
17-B-1-
Copy of letter of
charge sent to the
Association
17-B-1-a- Before a pilot is disciplined or discharged,
such pilot shall be notified in writing by the Company of
the precise charge or charges against him. The Letter of
Charge shall include the following statement: "A copy of
this letter has been sent to the Association. If you desire
Association representation, you must contact your local
Association representative."
Such pilot shall be given at least ten (10) days to secure
the presence of witnesses and gather evidence and shall
have the right to be represented by counsel, an employee
of the Company or his duly accredited Association
representative(s). A hearing shall be held by the Manager/
Director of Flight Operations or his designee within fifteen
(15) calendar days after the issuance of the charge;
unless the pilot, through no fault of his own, did not
receive the charge in time to have had the ten (10) days
required above; in which case the hearing will be
rescheduled, if requested, to provide the required ten (10)
days.
Page 180 Section 17-B-1-b
17-B-1-b- Within fifteen (15) calendar days after the
close of the hearing, a decision shall be announced in
writing and a copy shall be furnished to the Legal
Department of the Association (staff attorney), the Local
Executive Council Chairman, Local Grievance Chairman,
MEC Grievance Chairman and the MEC Chairman, unless
the grievant specifically requests that such copies not be
sent.
17-B-1-c- During the course of the investigation
conducted in accordance with Paragraph 17-B-1 above,
the Company may hold the pilot out of service. While held
out of service, the pilot shall continue to receive pay until
the effective date of the written decision determining the
action to be taken.
Any extension of time limits granted at the request of the
pilot shall be on a without pay basis for the period of the
extension. The pilot shall continue to receive full pay and
benefits during any extension granted at the request of the
Company.
Automatic appeal
of termination to
S.V.P. Flight
Operations
17-B-2- If the pilot is dissatisfied with any discipline
(excluding termination of employment) and desires to appeal,
he shall within thirty (30) calendar days after receiving such
decision make a written appeal to the Senior Vice President-Flight
Operations. If the discipline imposed includes
termination of employment, that discipline will be considered
to be appealed to the Senior Vice President-Flight
Operations, as above, without specific appeal action being
required; unless the affected pilot specifically requests that
such appeal not be made.
17-B-3- The Senior Vice President-Flight Operations or his
designee shall hear such appeal within fifteen (15) calendar
days after receipt of the pilot's written request therefor.
Decision to
terminate shall be
copied to System
Board and case
will be docketed
for appeal
17-B-4- Within fifteen (15) calendar days after hearing such
appeal, the Senior Vice President-Flight Operations or his
designee shall announce his decision in writing to the pilot
and, unless otherwise requested, furnish a copy to the Legal
Department of the Association (staff attorney), the Local
Executive Council Chairman, Local Grievance Chairman,
MEC Grievance Chairman and the MEC Chairman. If such
decision involves termination of employment, that decision
shall be copied to the Pilot System Board of Adjustment and
shall be considered by the Board as a request to docket the
case, on appeal; unless the affected pilot specifically
requests that such appeal not be filed.
Page 181 Section 17-B-5
17-B-5- Further appeal by the grievant(s), if made, shall be
to the "United Air Lines Pilots' System Board of Adjustment"
as provided for in Section 18 of this Agreement, provided
such appeal is made within sixty (60) days from the date of
receipt by the grievant(s) of the decision of the Senior Vice
President-Flight Operations or his designee. If the case
involved termination of employment, appeal will be
automatic, as described in B-4 above.
17-B-6- Nothing in this Section shall be construed as
extending the rights of this Paragraph B to a pilot during his
probationary period.
17-C- General
17-C-1- The time limits set forth in Paragraph 17-A and 17-B
of this Section may be extended by mutual agreement of the
Company and the grievant or the Association.
17-C-2- If any decision of the Company under the provisions
of this Section is not appealed by the grievant(s) within the
time limits prescribed herein for such appeal or any extension
mutually agreed upon, the decision of the Company shall be
final and binding. If any hearing or decision required of the
Company under the provisions of this Section is not provided
within the time limits herein, or any extension mutually
agreed upon, the grievant(s) shall consider the request
denied and may appeal it to the next step of the grievance
procedure.
Any grievance appealed to the Senior Vice President-Flight
Operations may not be remanded to the preceding step
without the concurrence of the grievant.
17-C-3- Nothing in this Section shall be construed to prevent
the Company from holding a pilot out of service pending an
investigation and hearing and appeal therefrom.
17-C-4-
17-C-4-a- If, as a result of any hearing or appeals
therefrom, a pilot is exonerated, he shall be made whole
for any and all pay and benefits and shall, if he has been
held out of service, be reinstated without loss of seniority.
17-C-4-b- If, as a result of any hearing or appeals
therefrom, a pilot is exonerated, all personnel records
shall be cleared of the charges.
Page 182 Section 17-C-5
17-C-5- When it is mutually agreed that a stenographic
report is to be taken of a hearing in whole or in part, the cost
will be borne equally by both parties to the dispute. When it is
not mutually agreed that a stenographic report of the
proceedings be taken and such stenographic record of the
hearing is made by either of the parties to the dispute, a copy
shall be furnished to the other party to the dispute upon
request, provided that the cost of such written record so
requested shall be borne equally by both parties to the
dispute.
Time limit
determined by
date of postmark
17-C-6- The filing of all grievances, decisions and appeals
thereof and notification in writing shall be accomplished by
personal delivery or by depositing such notice in the U. S.
Mail, postage prepaid, Certified Mail, addressed to the last
known address of the party to whom the notice is being given
and shall be deemed as being "filed" on the date of personal
delivery or the date of postmark.
17-C-7- Grievants, witnesses and representatives who are
employees of the Company shall receive free transportation
over the lines of the Company from the point of residence,
duty or assignment to the point of hearing and return to the
extent permitted by law.
Also, grievants, witnesses and their representatives who are
employees may be granted a leave of absence, subject to the
needs of the service, and the necessary transportation
(NRPS) on the Company line for the purpose of investigating
and gathering evidence associated with the grievance to the
extent permitted by law.
17-C-8- When a pilot is chosen to act as representative of or
a witness for another pilot, such pilot shall be given leave of
absence for a time sufficient to permit him to appear as such
representative or witness.
17-C-9- If more than one (1) management representative is
present (including the Flight Manager) at an investigation
hearing or conference with a pilot concerning a matter which
may result in disciplinary action, such pilot will be advised by
the Company of his right to have a representative of his
choice present, provided such representative will be
available within a reasonable period of time not to exceed
twenty-four (24) hours. Further, when a pilot is requested to
appear at such investigation hearing or conference, he shall
be advised of the nature of the subject to be discussed..
Page 183 Section 17-C-10
Clearing record (2
years) (3 years)
17-C-10- The Company shall consider any disciplinary
action taken against a pilot as cleared from the pilot's record
after a two (2) year period of active service (three (3) years in
the case of discipline resulting from flying proficiency) from
the date of issuance if no further discipline has been imposed
during that period. The pilot's record may be cleared earlier,
when, in the judgment of the Company, his performance
warrants such action.
Copy of material
placed in file
17-C-11- A pilot will be furnished a copy of any information
which is placed in his personnel file that may be used in the
evaluation of his performance and/or employment
relationship.
Access to material
17-C-12- A pilot or his authorized representative shall have
access to all relevant grievance related material at such time
as there is an active grievance on file that could result in
discipline or discharge.
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Agreement Table of Contents
Interpretations Table of Contents.
Page 184 Section 17-C-12
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Page 185 Section 18-A
Section 18
System Board Of Adjustment
18-A-
In compliance with Section 204, Title II, of the Railway Labor
Act, as amended, there is hereby established a System
Board of Adjustment, and shall be known as the "United Air
Lines Pilots System Board of Adjustment" hereinafter
referred to as the "Board."
The Board's purpose shall be to adjust and decide disputes
which may arise under the terms of the Pilots Agreement
when such disputes have been properly submitted to the
Board.
18-B- Composition of the Board
Composition of
Board
3 alternates
18-B-1- The Board shall consist of four (4) members, two (2)
of whom shall be selected and appointed by the Association
and two (2) of whom shall be selected and appointed by the
Company, and such appointees shall be known as "Board
Members." In addition, the Association and the Company
shall each designate three (3) alternates, and in the event of
the unavailability of a Board Member, the respective party
shall designate the alternate to act as a Board Member in
place of the absent Board Member.
18-B-2- The two (2) Board Members appointed by the
Company, and the two (2) Board Members appointed by the
Association and their alternates shall serve for one year from
the date of their appointment, and, thereafter, until their
successors have been duly appointed. Vacancies shall be
filled in the same manner as is provided herein for the
selection and appointment of the original Board Members and
the original alternates.
18-B-3- The Board Members shall select a Chairman and a
Vice Chairman, both of whom shall be members of the Board.
The term of office of Chairman and Vice Chairman shall be
one (1) year. Thereafter, from year to year, the Board shall
designate one of its members to act as Chairman and one to
act as Vice Chairman for one (1) year terms.
Page 186 Section 18-B-4
18-B-4- The office of Chairman shall be filled and held
alternately by the Board Member appointed by the
Association and by a Board Member appointed by the
Company. When a Board Member appointed by the
Association is Chairman, a Board Member appointed by the
Company shall be Vice Chairman, and vice versa. Subject to
the provisions of Paragraph 18-F, the aforesaid Chairman, or,
in his absence the Vice Chairman, shall preside at meetings
of the Board and at hearings. Both shall have a vote in
connection with all actions taken by the Board.
2 monthly
meetings
18-B-5- The Board shall meet twice monthly in the city
where the general offices of the Company are maintained,
(unless a different place of meeting is agreed upon by the
Company and the Association) provided that at such times
there are cases filed with the Board for their consideration.
18-C- Jurisdiction of the Board
18-C-1- The Board shall have jurisdiction over disputes
between any employee covered by the Pilots Agreement and
the Company growing out of grievances or out of
interpretation or application of any of the terms of the Pilots
Agreement. The jurisdiction of the Board shall not extend to
proposed changes in hours of employment, rates of
compensation or working conditions covered by existing
agreements between the parties hereto, or as subsequently
executed.
18-C-2- The Board shall consider any dispute properly
submitted to it by the President of the Association or by the
Senior Vice President-Flight Operations, when such dispute
has not been previously settled in accordance with the terms
provided for in Section 17.
18-D- Proceedings Before The Board
18-D-1- All disputes properly submitted to the Board for
consideration shall be addressed to the Members of the
Board, including all papers and exhibits in connection
therewith. Each case submitted shall show:
18-D-1-a- Question or questions at issue.
18-D-1-b- Statement of facts.
18-D-1-c- Position of employee or employees.
When desired, joint submissions may be made, but either
party may submit the dispute and its position to the Board.
Page 187 Section 18-D-2
No matter shall be considered by the Board which has not
first been handled in accordance with the provisions of
Section 17 including the rendering of a decision thereon
by the Senior Vice President-Flight Operations.
18-D-2- Upon receipt of notice of the submission of a
dispute, the Chairman shall set a date for hearing, which
shall be at the time of the next regular meeting of the Board,
as provided in Paragraph 18-B-5 of this Section, or, if at least
two (2) Board Members consider the matter of sufficient
urgency and importance, then at such earlier date and at
such place as the Chairman and Vice Chairman shall agree
upon, but not more than fifteen (15) days after such request
for meeting is made by at least two (2) of said Board
Members, and the Chairman shall give the necessary notices
in writing of such meeting to the Board Members and to the
parties to the dispute.
18-D-3- Employees covered by this Agreement may be
represented at Board hearings by such person or persons as
they may choose and designate, and the Company may be
represented by such person or persons as it may choose and
designate. Evidence may be presented either orally, or in
writing, or both.
18-D-4- On request of any individual Board Member, the
Board may, by majority vote, or shall, at the request of the
two (2) Board Members appointed either by the Company or
the Association, summon any witnesses who are employed
by the Company, and who may be deemed necessary by the
parties to the dispute, or by either party, or by the Board
itself, or by the two (2) Board Members appointed either by
the Company or the Association.
18-D-5- The number of witnesses summoned at any one
time shall not be greater than the number which can be
spared from the operation without extreme interference with
the services of the Company.
18-D-6- Unless and until the provisions of Paragraph 18-F of
this Section become applicable, the Board, composed of two
(2) Board Members appointed by the Company and two (2)
Board Members appointed by the Association, or their
respective alternates, shall be competent to hear the
disputes properly submitted to it and to decide said disputes.
Page 188 Section 18-E
properly submitted to it and to decide said disputes by
majority vote. Decisions of the Board so composed shall be
final and binding upon the parties hereto and shall be
rendered no later than forty-five (45) days after the close of
the hearing.
18-E- The Panel of Referees
15 referees
18-E-1- The Company and the Association shall, by mutual
agreement, establish a panel of potential neutral referees
who will serve individually as the neutral and presiding
member of the Board when a referee is either required or
requested under the provisions of Paragraph 18-F of this
Section. The scheduling of these referees shall be by the
mutual agreement of the parties.
18-E-2- At as early a date as practicable after the selection
of the panel of referees referred to above, and upon the
request of either party, the first named referee shall meet
with representatives of the Company and representatives of
the Association for the purpose of reviewing and streamlining
the System Board procedures which are not contained within
this Agreement but have been developed by the Board. The
basis for such review and modification shall be simplicity,
expedition and fairness. The referee shall be em-powered to
make the final decision in such review and modification.
In any event, when a referee sits as a member of the Board
pursuant to Paragraph 18-F of this Section, he shall have the
right to modify such procedures for the purpose of that
hearing.
18-E-3- Either the Company or the Association by four (4)
month's written notice to the other may, without cause,
remove any of the named referees. In such event, the referee
so removed shall complete matters, if any, pending before
him pursuant to Paragraph 18-F of this Section, and the
remaining referee or referees shall serve in the relative order
as originally designated. When a referee is removed,
pursuant to this Paragraph, the parties shall meet to select a
replacement as soon thereafter as practicable.
18-F- Procedure in Event of Deadlock
18-F-1- Within ten (10) days after the submission of a
dispute to the Board pursuant to Paragraph 18-D-1 of this
Section, either the Association or the Company may by
written notice to the other, state its desire that the dispute be.
Page 189 Section 18-F-2
heard by a five (5) member Board consisting of the two (2)
Board Members appointed by the Association and two (2)
Board Members appointed by the Company, or their
respective alternates, and a member of the panel of potential
referees established pursuant to Paragraph E of this Section.
In such case, the referee shall be selected in accordance
with Paragraph 18-E of this Section.
18-F-2- Where the hearing in a dispute properly submitted to
the Board has commenced before the Board, and where the
Board is then composed solely of the two (2) Board Members
appointed by the Company and the two (2) Board Members
appointed by the Association, or their respective alternates,
and where the Board is unable by majority vote to decide an
issue before it relative to the dispute being heard, the Board
shall declare itself deadlocked and it shall select a referee
from the panel established pursuant to the subject in the
order specified in Paragraph E of this Section. In the event
the Board has failed to decide such issue or declare itself
deadlocked within forty-five (45) days after the issue has
been heard by the Board, then the Board shall be deemed to
be deadlocked for the purpose of this Paragraph and shall
select a referee as herein provided. The referee so selected
shall thereupon join the Board as a member and as the
Chairman thereof in the subsequent consideration and
disposition of the matter over which the Company and
Association Board Members deadlocked and in the
subsequent hearing, consideration and disposition of the
dispute then being heard.
18-F-3- When composed of five (5) members as a result of
the procedures set forth in Paragraph 18-F-1 or 18-F-2, the
Board shall be competent to hear the dispute properly
submitted to it and to decide said dispute by majority vote.
Decisions of the Board so composed shall be final and
binding on the parties and shall be rendered no later than
forty-five (45) days after the close of the hearing.
18-F-4- Where the hearing in a dispute properly submitted to
the Board has concluded, and where the Board is then
composed solely of the two (2) Board Members appointed by
the Company and two (2) Board Members appointed by the
Association, or their respective alternates, and where the
Board is unable by majority vote to decide the dispute, the
Board shall declare itself deadlocked and it shall select a
referee from the panel established pursuant to Paragraph 18-
E of this Section. In the event the Board has failed to render
a decision or declare itself deadlocked within the forty-five.
Page 190 Section 18-F-5
(45) day period provided in Paragraph 18-D of this Section,
then the Board shall be deemed to be deadlocked for the
purpose of this Paragraph and shall select a referee as
herein provided. The referee so selected shall thereupon join
the Board as a Board Member and as the Chairman thereof in
the sub-sequent consideration and disposition of the dispute.
18-F-5- Within forty-five (45) days after the selection of the
referee as provided in the preceding Paragraph, the five (5)
member Board shall consider and review the prior record in
the dispute, and it may call such witnesses and receive such
evidence as it may deem necessary. Either party may make
written request to the Board for the privilege of presenting
witnesses or documentary evidence, and the Board may in its
discretion permit such presentation.
18-F-6- When composed of five (5) members as a result of
the procedure set forth in Paragraph 18-F-4 above, the Board
shall be competent to decide said dispute by majority vote.
Decisions of the Board so composed shall be final and
binding on the parties and shall be rendered no later than
forty-five (45) days after the Board has considered and
reviewed the prior record in the dispute and/or has received
such additional evidence as deemed necessary, whichever is
later.
18-G-
In the event the Board is unable to comply with the time limits
specified in Paragraph 18-D and 18-F above, the Chairman of
the Board shall prior to the expiration of forty-five (45) days
notify both parties in writing of the reasons the Board is
unable to comply with the time limits, and give a date as to
when a decision will be rendered.
18-H- General
18-H-1- The expenses and reasonable compensation of the
referees selected as provided herein shall be borne equally
by the Company and the Association.
18-H-2- The time limits specified in this Section may be
extended by mutual agreement of the Company and
Association..
Page 191 Section 18-H-3
18-H-3- Nothing herein shall be construed to limit, restrict or
abridge the rights or privileges accorded either to the
employees or to the employer, or to their duly accredited
representatives, under the provisions of the Railway Labor
Act, as amended.
18-H-4- The Board shall for a minimum period of five (5)
years maintain a complete record of all matters submitted to
it for its consideration and of all their findings and decisions.
18-H-5- The Company and the Association will assume the
compensation, travel expense and other expenses of the
Board Members selected by them.
18-H-6- Each of the parties hereto will assume the
compensation, travel expense and other expenses of the
witnesses called or summoned by it. Grievants, witnesses
and representatives who are employees of the Company
shall receive free transportation (NRPS) over the lines of the
Company from the point of residence, duty or assignment to
the point at which they must appear as witnesses and return,
to the extent permitted by law.
18-H-7- The Chairman and the Vice Chairman designated
pursuant to Paragraph 18-B-4, acting jointly, shall have the
authority to incur such other expenses as in their judgment
may be deemed necessary for the proper conduct of the
business of the Board and such expenses shall be borne
one-half by each of the parties hereto. Board Members who
are employees of the Company shall be granted necessary
leaves of absence for the performance of their duties as
Board Members. So far as space is available, Board
Members shall be furnished free transportation over the lines
of the Company, for purpose of attending meetings of the
Board, to the extent permitted by law.
18-H-8- It is understood and agreed that each and every
Board Member shall be free to discharge his duty in an
independent manner, without fear that his individual relation
with the Company or with the employees may be affected in
any manner by any action taken by him in good faith in his
capacity as a Board Member.
18-H-9- The Board shall have the authority for the
administration and interpretation of this Section of the
Agreement. In the event the Board cannot agree on the
administration or interpretation of this Section, they shall
refer the matter to the first named referee or his designee..
Page 192 Section 18-H-10
18-H-10- In the event a member of the panel of referees is
more than thirty (30) days overdue beyond the time limits
specified in Paragraph 18-D and 18-F above in the rendering
of a decision, he shall not be considered eligible for
assignment of additional cases until such decision is
rendered (except by mutual agreement between the
Company and the Association).
Page 193 Section 19-A
Section 19
Crew Complement
19-A-
The Company agrees that no United Air Lines B-747, DC-10
and B-727 aircraft shall be operated in scheduled commercial
operations, including courtesy, publicity, charter or ferry
flights, unless the minimum crew on such aircraft consists of
three (3) pilots from the Pilots' System Seniority List. The
Second Officer shall possess a currently effective commercial
license and instrument rating and shall have completed the
course of training consistent with the Flight Operations
Administration policy in effect August 22, 1970.
19-B-
Two (2) pilot crew
on specific aircraft
The Company agrees that no United Airlines B-747-400, B-777, B-767/757, A-320/319, B737-300/400/500, or B-737
shall be operated in scheduled commercial operation,
including courtesy, publicity, charter, or ferry flights, unless
the minimum crew on such aircraft consists of two (2) pilots
from the Pilot's System Seniority List.
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Page 194 Section 19-B
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Page 195 Section 20-A
Section 20
Allocation, Assignment and Scheduling of Flying
20-A-
20-A-1-
Flight Crew Resources shall be responsible forallocation of hours, assignment to allocation, construction of
trip pairings, duty period assignment, assignment to
domicile(s) of all trips (including charters) and lines of flying
and all known open flying in accordance with the provisions
of this Agreement.
20-A-1-a- No revision of such pairings, duty period
assignment or assignment to domicile(s) of trip(s) may be
made unless approved by Flight Crew Resources and
discussed with the System Schedule Committee.
20-A-1-b- No revision of the manpower requirement
levels established in the lines of flying may be made
unless approved by Flight Crew Resources and discussed
with the System Schedule Committee.
20-A-2- System Scheduling Committee
System Schedule
Committee
Composition
SSC duties
Equipment to
seniority and
allocation of flying
A System Schedule Committee (SSC) shall be composed of
four (4) pilot representatives, inclusive of one (1) Shuttle
representative, one of which will be designated as Chairman.
These pilots may also be Local Schedule Representatives.
Each month the System Schedule Committee members shall
meet with the designated Company representatives in order
to provide the pilots the opportunity to review and make
recommendations to the Company regarding the DSL's, the
allocation and assignment of flying and the construction of
lines of flying. In addition, a minimum of one (1) scheduling
representative from each domicile will be given the
opportunity to review the construction of lines of flying and to
select the Operating Experience ("OE") lines for that domicile
in accordance with the provisions of Section 20-E of the
Agreement. Each month, the Company shall propose meeting
dates which coincide with the period in the construction of
schedules at which time the pilot recommendations can be
best considered. Meetings may be on different dates for
some or all fleets. Additional meetings may be held by mutual
agreement. It is the intent of the parties of this Agreement
that this System Scheduling Committee shall provide pilots.
Page 196 Section 20-A-2-a
with the opportunity to consult with and make
recommendations to the Company on the allocation of flying,
assignment and reduction of flying to pilot domiciles in
accordance with the ''equipment to seniority'' concept as
outlined below. ''Equipment to seniority'' shall mean that
within the limits of flying hours available to a domicile by
equipment type, the more senior pilots shall be given the
opportunity to fly equipment in the following order: B-747-
400, B-747, B-777, DC-10, B-767/757, A-320/319, B-727, B-737-300/400/500 and B-737, so long as efficient utilization of
pilots and stability of pilot employment at the domiciles are
achieved and economy of operations and working conditions
are not unreasonably affected.
20-A-2-a- Pilot Domiciles. The geographical location of a
pilot domicile(s) and designation of equipment type to be
flown from each domicile(s) shall be determined by the
Company after discussions with the System Schedule
Committee.
20-A-2-b- Allocation of Flying. The "equipment to
seniority" concept shall be used considering the seniority
of those pilots not holding an assignment in the equipment
group as specified in Paragraph 20-A-2 above for which
flying is being allocated, or an assignment in a higher
paying equipment. The seniority of Captains who could
have held an assignment at their domicile in the
equipment group as specified in Paragraph 20-A-2 above
shall not be considered in the allocation.
20-A-2-c- Reduction of Flying. The "equipment to
seniority" concept shall be used considering those
Captains in the equipment type in which the flying is being
reduced independently of other equipment types.
20-A-2-d- Assignment or Reassignment of Lines of
Flying to Domicile. The "equipment to seniority" concept
shall be used considering the available Captains
necessary to cover the lines of flying, vacations and a
minimum of seventeen per cent (17%) reserve coverage in
support of those lines of flying in each equipment type
independently of other equipment types.
20-A-2-e- In the event unforeseen circumstances arise
which would necessitate discussions with the SSC in
compliance with the provisions of this Section, the
Company will communicate with the SSC via conference
call prior to taking any actions..
Page 197 Section 20-A-2-f
Sharing of
Information
20-A-2-f- All information pertinent to the allocation,
assignment, and scheduling of flying shall be provided to
the System Schedule Committee on a timely basis. It is
understood by the parties that some information may be
identified by the Company as "privileged". The SSC and
the MEC Officers agree to keep this information
confidential until informed otherwise by the Company.
SSC and
computer lines of
flying
20-A-2-g- The Company and the System Schedule
Committee shall continue efforts to develop and improve
computer programs to provide for more efficient
scheduling of pilots. It is agreed and understood that
mutual agreement between the Company and the System
Schedule Committee must be reached prior to the
implementation of any such program.
SSC trip drops
20-A-2-h- When System Schedule Committee Meetings
are held, pilot trip drops required will be on a
displacement basis.
20-A-2-i- In the event unresolved scheduling problems
arise, the System Schedule Committee may appeal the
matter to the Senior Vice President-Flight Operations.
20-B- Publication of Schedules
20-B-1- Pilots schedules shall be posted for preferencing as
follows:
Posting of
monthly
schedules
20-B-1-a- Unless agreed to otherwise by the Company
and the System Schedule Committee lines of flying will be
posted for preferencing for a minimum of seven (7) days.
20-B-1-b- Typical reserve lines, showing patterns of days
off which comply with Section 5, will be posted for the
same period. No reserve lines will be awarded which have
not been posted, except for floater reserves, as provided
below.
20-B-1-c- Preferencing will close not later than the 18th
of the month prior to the subject month, unless a later date
is established by mutual agreement with the System
Schedule Committee. Lineholder awards will be published
by the 20th or the end of the 2nd day after closing,
whichever is later, and secondary lines and reserve lines
will be published by the 24th, or the end of the 6th day
after closing, whichever is later.
20-B-1-d- All monthly pilot schedules shall be posted for
preferencing and awarded by this process, except that.
Page 198 Section 20-B-1-e
modification to the process may be made in exceptional
cases by mutual agreement with the System Schedule
Committee.
Pilot failing to
preference will be
considered for
mov-ups
20-B-1-e- Unless otherwise agreed to locally, a pilot who
fails to express a preference for assignment under the
"schedule selection procedure" shall be assigned to the
numerically lowest number schedule line (i.e., one is less
than six) or reserve day off line, as applicable, which
remains unassigned in his status and equipment type after
all pilots senior to him have been assigned.
20-B-1-f- After completion of the pilot's schedule
selection procedure, pilots shall be assigned to a
schedule within their status and equipment type in
accordance with their seniority subject to Paragraph 6-A
of Section 6 of this Agreement. Any pilot may preference a
secondary line or reserve assignment for the month.
SSC will be
consulted for
recommendation
in handling
changes to
planned flying too
late for inclusion
in pilot's
schedules
20-B-1-g- In the event changes to the airline's planned
flying occur too late to be included in the pilots' schedules
and such changes result in the need to modify a pilot's
assigned line(s); the Company shall offer the System
Schedule Committee the opportunity to consult with and
make recommendations regarding the appropriate manner
to accomplish the necessary modifications.
20-C-
20-C-1- Lines of Flying
Line construction
Parameters
Scheduled lines of flying will consist of a trip pairing repeated
in sequence unless efficient pilot utilization requires mixing of
pairings within a line according to the following guidelines.
The line descriptions listed in sub-paragraphs a through d
below, are intended to be in order of desirability. It is
recognized that it is desirable to build the maximum number
of lines in each consecutive step.
20-C-1-a- Pure lines (same ID).
20-C-1-b- Pure with 1 or 2 fillers of like departure and
layovers.
20-C-1-c- Pure with 1 or 2 fillers of unlike departure and
layovers.
20-C-1-d- Homogenization.
20-C-1-d-(1) Like departure and layovers.
20-C-1-d-(2) Like departure with different layovers.
Page 199 Section 20-C-1-e
20-C-1-d-(3) Like departure with similar routing and
direction.
20-C-1-d-(4) Like departure with any routing or
direction.
20-C-1-d-(5) Departure within 6 hours.
20-C-1-d-(6) Departure within 8 hours.
20-C-1-d-(7) Departure within 10 hours.
20-C-1-d-(8) Departure over 10 hours.
Homogenization
20-C-1-e- It is recognized that a planned schedule
change during a schedule month will result in increased
mixing of pairings in order to maintain a relatively even
distribution of flying in each line for the entire month.
20-C-1-f- Lines of flying submitted for preferencing shall
provide reasonable expectancy of schedule reliability and
shall comply with FARs and the provisions of this
Agreement and shall be scheduled for not more than
eighty-one (81) pay credit hours (up to eighty-three (83)
pay credit hours in a flex month). Lines of flying will not
reflect hours after 2400 on the last day of the month, for a
trip operating over month end nor the return trips on the
first of a month.
20-C-1-g- If an individual trip pairing repeated in
sequence will not provide the minimum calendar days off
specified in Section 5-G-1-d, an additional trip or trips may
be substituted in the line to provide such minimum
calendar days off.
20-C-1-h- All night flying will be built into a minimum
number of lines even if this results in some lines being
built under guarantee. Pairings with ANF's will not be used
to fill non all-night primary lines.
20-C-2- Secondary Lines
Flying which remains open after the awarding of the lines of
flying, due to the planned absence of the lineholder and/or
flying which was not awarded as part of a line, may be
combined into secondary lines. Secondary line construction
shall take into consideration the schedule criteria
preferences submitted by those pilots awarded secondary
lines.
Page 200 Section 20-C-3
20-C-3- Reserve Lines
Reserve lines with
days off patterns
will be available
for preferencing
The approximate number of reserve lines needed in each
status, fleet and domicile will be posted for preferencing.
Available reserve lines shall consist of a pattern of available
days on and days off, as specified in Section 5-G-1-e. For
Mainline reserve pilots, these lines will be constructed with a
minimum of twelve (12) days off in a thirty (30) day month
and thirteen (13) days off in a thirty-one (31) day month. For
Shuttle reserve pilots, these lines will be constructed with a
minimum of fourteen (14) days off.
20-C-4- Floater Reserve Lines
Floater reserve
line may be
preferenced, day
off will be
determined
Floater reserve lines will have no posted day off pattern, but
will have the minimum of twelve (12) days off in a thirty (30)
day month and thirteen (13) days off in a thirty-one (31) day
month (fourteen (14) days off for Shuttle pilots) determined
by the Company after awarding the lines and evaluating their
coverage requirements. Floater reserve lines will not be
posted, but may be preferenced and awarded, as provided in
Section 20-D-3.
20-D- Preferencing and Awarding
Monthly bid
Awards
20-D-1- During monthly schedule preferencing, a pilot will
have the opportunity to indicate to the Company which lines
of flying, including secondary lines, and/or reserve lines he
desires. He may also indicate his desire to be awarded a
floater reserve line. A line of flying or reserve line which is
open for a full schedule month due to the planned absence of
the initially assigned pilot, will be assigned to the next
eligible pilot(s) so preferencing who is available for the full
month, as part of the line awarding process. If a pilot
preferences secondary lines, he may also indicate which of
the schedule characteristics he considers most desirable. A
pilot will not be awarded a secondary line if he is not planned
to be available for the full month. "Available for the full
month" as used herein means a pilot who, at the time monthly
line awards are made, is not planned to be absent for any
reason except (1) training of under five (5) days; (2) ALPA
duty; (3) no more than one weekend (or equivalent) military
absence or (4) Company requested absence. Lines of flying
open for the month which are not filled by preferencing may
be filled in inverse order of seniority by assignment of regular
reserve pilots in the status and equipment type involved. A
reserve pilot shall not be eligible to be assigned in inverse.
Page 201 Section 20-D-2
seniority order unless he is available for the full month, as
defined above.
20-D-2- Preferencing for secondary lines will be
accomplished as follows:
Awarding
secondary lines
20-D-2-a- Advertised secondary lines shall be
preferenced by specific line number. The seniority of the
pilot awarded a secondary line shall determine the order
of accommodation in the assignment of specific trips to
such line. The Company will initiate a test of posting and
bidding or PBS selection of secondary lines with the B737-200 fleet. The results of this test will be jointly evaluated
to be used in the development of a process to more
efficiently conduct the bidding and awarding of secondary
lines.
Preferencing
unadvertised
secondary lines
20-D-2-b- Should the amount of open flying available for
secondary lines be sufficient to build more secondary lines
than were available for preferencing, such added
secondary lines will be awarded to pilots who preferenced
unadvertised secondary lines. The "999" preference shall
be used only to indicate a desire to be awarded an
unadvertised secondary line. A "999" preference must be
used along with preferences by number for all advertised
secondary lines in order for a pilot to be eligible for
assignment to all secondary lines. If an insufficient
number of pilots preference these unadvertised
secondaries, those pairings will revert to open flying and
no pilot will be involuntarily assigned to such added
secondary lines.
Secondary line
criteria
SSC participation
20-D-2-c- Each pilot who preferences a secondary line
will be required to submit a list of schedule characteristics
which he considers desirable. Secondary lines will be
constructed for each pilot awarded a secondary line taking
into consideration his prior schedule and the criteria he
has submitted. Lines will be constructed and awarded in
seniority order. The secondary line bidding and awarding
process will be administered with the direct participation
of The System Schedule Committee. In the event the
parties agree that additional pilots are required to assist in
the process, ALPA and the Company will agree to the
number of pilots required and the trip drops which will be
allowed. Additionally, the Company will maintain
administrative control of the process including the
allocation of Crew Management Resources.
Page 202 Section 20-D-2-d
20-D-2-d- A pilot will not be awarded a secondary line if
he is not planned to be available for the full month, as
defined above.
20-D-2-e- Prior to releasing the content of a secondary
line to the pilot awarded that line, any assignment
revision, necessary to resolve conflicts with his prior
month's flying, will be accomplished.
Preference floater
reserve lines
20-D-3- Floater reserve lines will be available for
preferencing and may be awarded up to a maximum of twenty
percent (20%) (or six (6) lines, whichever is less) of the
reserves in each domicile, equipment and status.
Notwithstanding the 20% above, in no case will the Company
have less than one (1) floater reserve line in each domicile
equipment and status. Those pilots awarded floater reserve
lines will have the opportunity to request a day off pattern
from the crew desk and where possible their request will be
honored. A pilot initially awarded or assigned to a floater line
shall not be eligible to be moved up to any other line. A pilot
initially assigned to a floater reserve line during the line
award process will be ineligible to be involuntarily assigned
(junior manned) to another open line unless all of the
following conditions are met:
20-D-3-a- The open line is a basic line of flying.
20-D-3-b- The pilot is available for the entire month, and
20-D-3-c- There is an available replacement pilot for the
vacated floater line. Such available replacement must also
be available for the full month.
20-D-4- Those pilots not having an awarded line at the
completion of the awarding process will be awarded the
highest numbered reserve line or lines as necessary in
inverse order of seniority.
Reserve mov-up
to full lines
20-D-5- Full lines which become available after the
completion of the monthly line awarding process may be
assigned to reserve pilots according to their monthly
preferences and seniority; except that any reserve who
desires to remain a reserve may, within forty-eight (48) hours
after the completion of the initial awards, advise the
Company that he desires to keep his reserve assignment; in
which case he shall not be moved up under this provision. To
be eligible to be moved up, a pilot must be available for a full
month, as defined above.
Page 203 Section 20-D-6
Reserve mov-up
to partial lines
20-D-6- If, at any time, a partial line becomes available,
such partial line may be offered to reserve pilots who are
available for all of the flying, in seniority order. Trips
remaining unassigned after following the above procedure
will be assigned in accordance with Section 20-H.
Reassignment as
a result of
schedule error
20-D-7- Should a pilot's schedule be published which
contains an error which results in a pilot losing flying, he may
be given, when the error is discovered, an assignment under
Section 20-F-1. The pilot's scheduled pay credit will be the
greater of his original line of flying or his new line of flying
assigned under this provision.
20-D-8-
20-D-8-a- If a pilot is awarded a line of flying which
requires overwater or INS qualifications and he is not so
qualified, he will be assigned the appropriate training so
as to be qualified whenever possible, in sufficient time to
allow him to fly his first trip sequence which requires such
qualification.
Reserve will
receive necessary
training to be
qualifier for
overwater and
INS.
20-D-8-b- A pilot assigned a reserve line in an equipment
type and status and in an equipment domicile which has
trip sequences that require overwater or INS
qualifications, and he is not so qualified, he will be
assigned the appropriate training so as to be qualified
whenever possible.
Maintaining
special
qualification
20-D-8-c- Once a pilot is qualified, he shall be required
to maintain his qualification while holding an assignment
in an equipment domicile in which there are schedules
which require such qualification. Should the pilot be
assigned to an equipment domicile in which there is no
scheduled flying which requires such qualifications, he
may be required to maintain his overwater qualification.
Any pilot who is already qualified may, at his option, retain
his qualification even if the Company does not require it.
20-D-9- A pilot's schedule assignment is an individual
assignment. Each pilot will fly his assigned trip sequence
unless deviation is permitted or required by the Company or
the application of this Agreement.
20-D-10- Trip segments, round trips or series of trips shall
not be split apart from the configuration shown in the
Domicile Schedule Letter if so doing increases the manpower
requirement unless, the Company deems it necessary to
accomplish coverage.
Page 204 Section 20-E
20-E- Operational Experience Lines
Notwithstanding the provisions of Section 6-A-2 and Section
20-B-1-f, initial Captains and initial First Officers will be
assigned designated Operating Experience ("OE") lines upon
completion of DENTK training. The Local Schedule
Committee(s) at the domicile(s) where such lines of flying will
be assigned will select these designated "OE" lines each
month as part of the schedule preparation process. The "OE"
lines may include Initial Operating Experience (IOE) and
continue for the balance of the month in which training is
completed and for the subsequent month. Such designated
"OE" lines for this subsequent month will be assigned in
Seniority order. Lineholders preferencing such "OE" Lines will
be restricted as follows:
LSC Designates
"OE" lines
20-E-1- The designated ''OE'' lines will be appropriately
identified by the Local Schedule Committee as to Captain or
First Officer ''OE'' lines at the time of posting or preferencing.
Original lineholder
reverts to reserve
when trips are
taken for OE
20-E-2- A pilot awarded a designated ''OE'' line of a like
status will revert to reserve only on the days he would have
flown in that line, not including shaded days, and will not be
available for involuntary TDY. The original lineholder may be
required to fly such portion of the line not required for OE
training. Such pilots will be given as much notice of their
reserve assignments as practical, with the understanding that
early notice is preferable to strict FIFO compliance. Upon
arriving from a trip or returning from days off, the pilot may, at
his request, be placed at the top of the FIFO list. Additionally,
the following provisions shall apply to those equipment
domiciles that have international lines of flying:
20-E-2-a- In equipment domiciles that have only
international trips, pilots originally assigned to OE lines
will be subject to the international rules for reserve
assignments.
20-E-2-b- In equipment domiciles which have both
international and domestic trips, 50% of the OE lines in
each pilot status will be identified and advertised as lines
in which the originally assigned pilot will not be subject to
assignments that are scheduled into his days off per
domestic reserve rules. Those pilots originally assigned to
the remaining 50% of the OE lines may be subject to
assignments as reserves into their schedule days off, as
provided under the international reserve rules. The.
Page 205 Section 20-E-2-c
Company will designate the lines at the time of
preferencing. If an odd number of OE lines exist, the odd
line will be identified as a domestic reserve line for days
off consideration. If only one OE line is available for
preferencing, it will be identified as international for
assignment purposes.
Original lineholder
may designate 6/7
HDO's
20-E-2-c- A pilot who is subject to assignment as a
reserve into his scheduled days off (International rules)
may designate any block of RDO's in this scheduled line
as holy days off (HDO's). This block may be up to a total
of six (6) consecutive days off (seven (7) consecutive
days off in a 31 day month). If the selected block does not
contain six/seven (6/7) HDO's, the pilot may move days
from any other block of RDO's in order to bring the total in
the designated block to six/seven (6/7). The RDO's moved
must come from the front or back of selected block(s) of
RDO's
20-E-2-d- A pilot who is subject to assignment as a
reserve into scheduled days off (International rules) but
who may be removed from only part of the OE line, will
still designate a block of six/seven (6/7) days as HDO's as
though he would be on reserve for the entire month. This
designation must be made prior to the beginning of the OE
month. The pilot will fly the published line trips unless
removed, at which point he will pick up the remaining days
off sequence in the line.
20-E-2-e- The Company will not assign an international
trip assignment to an OE reserve that disrupts his RDO
unless he is the only reserve available for the assignment.
20-E-2-f- If an OE reserve is worked into one or more of
his RDO's, he shall have the days off restored in
accordance with Section 3-E-7 of the International
Supplement.
20-E-3- At the time of preferencing, a pilot preferencing an
"OE" line shall have the opportunity to indicate whether he
prefers to fly the line (as opposed to being removed from the
line under this provision). Such preference will be taken into
consideration in seniority order when "OE" lines are assigned
to newly transitioned pilots.
Page 206 Section20-E-4
Pay for giving up
of line
20-E-4- A Pilot awarded an "OE" line who is removed from
all or part of the line will be paid his line value including legal
inbounds plus three (3) hours override or eighty-four (84)
hours (up to eighty-six (86) hours in a flex month), whichever
is greater, for relinquishing his line. In the event of a full line
move-up only the pilot inconvenienced as per paragraph 20-
E-2 above will receive the pay provisions of this paragraph.
Must have 100
hours to be
awarded OE line
20-E-5- First Officers preferencing a Captain "OE" line and
Captains preferencing a First Officer "OE" line must have
completed a minimum of one hundred (100) hours in that
assignment to be eligible to be awarded such "OE" lines.
20-E-6-
20-E-6-a- If a Captain is senior enough to be awarded a
primary line of flying through preferencing upon his
activation into his initial Captain assignment, and if he
does preference and is awarded such a line, that line shall
become his "OE" line.
20-E-6-b- If a First Officer is senior enough to be
awarded a primary line of flying through preferencing upon
his activation into his initial First Officer assignment, and if
he does preference and is awarded such a line, that line
shall become his "OE" line providing that the Captain
holding the line has completed a minimum of 100 hours in
that assignment.
20-E-7- A pilot who has completed any transition training
may, with his concurrence, for the remainder of the month
and the next full calendar month, be assigned out of reserve
FIFO order open trips with a Captain or First Officer, as
appropriate, who has a minimum of one hundred (100) hours
in type.
20-E-8- Whenever a pilot, who has been removed from his
line, is available without disruption to an assignment(s)
already given, the Company will attempt to return the pilot to
the trip(s) in his original line if the trip(s) is not needed for
"OE".
Pick-up of flying
by displaced OE
lineholder
20-E-9- When a pilot is removed from all or part of his line
under this paragraph, the Company will make available to the
pilot, until 28 hours prior to the first day of each reserve
period, known open flying which is available on those days
the pilot converts to reserve status and also flying which
becomes open during the pilot's reserve available days. The
pilot may pick up such open flying as follows:.
Page 207 Section 20-E-9-a
20-E-9-a- If the pilot desires to pick up open flying which
would be scheduled during this current period of work
days, or if he is on days off at the time of the transaction
and desires to pick up open flying scheduled during his
next period of work days, he will be allowed to pick up:
20-E-9-a-(1) Any trip that begins on the first day of
availability after scheduled days off, or
20-E-9-a-(2) Any trip or combination of trips that
completely fills all available work days in that period of
availability, or
20-E-9-a-(3) Any trip that ends on the last day of
availability (except that a pilot qualified and available
to be assigned under international reserve rules must
have OPBCM concurrence), or
20-E-9-a-(4) With OPBCM concurrence, a combination
of trips, one beginning on the first day of availability
and another ending on the last day which together do
not fill all available work days.
This provision shall not prevent the Company from assigning the pilot a reserve assignment(s) pursuant to paragraph 2 above, on all remaining unassigned reserve work days.
20-E-9-b- If the pilot is picking up open flying to place in
a period of available work days that are in the future,
beyond the periods described above, he may fill those
blocks of available work days in any order; however, he
must pick up enough open flying to fill all available work
days in a selected block.
Displaced pilot
OE reserve
assignments over
month-end
20-E-10- The following rules will apply to reserve
assignments over month end whenever an OE reserve pilot is
involved.
20-E-10-a- Such assignments will first be given to regular
reserves.
20-E-10-b- Such assignment will next be given to eligible
OE reserve pilots for whom the assignment will not cause
a repair in the subsequent month. (It will remain the pilot's
option to exceed the allowable scheduling cap.)
20-E-10-c- Such assignments will lastly be given to
eligible OE reserve pilots for whom a repair is required in
the subsequent month. The assignment in this case may
extend into the subsequent month only for a number of
days no greater than the original days of carry over of the
last trip scheduled in the original OE line of flying.
Page 208 Section 20-E-11
Trip trading by
pilots on OE lines
20-E-11- The following rules will apply to pilots assigned OE
lines when trip trading with open flying.
20-E-11-a- A newly qualified pilot who is assigned an OE
line for consolidation of training will not be permitted by
OPBCM to trade, pick-up or drop trips in that line.
20-E-11-b- The pilot assigned to the "companion" line;
i.e. the assigned Captain on a First Officer OE line or the
assigned First Officer on a Captain OE line, will not be
subject to any special restrictions on their trading,
dropping or picking up trips.
20-E-11-c- If a pilot awarded an OE line is not removed
from his awarded line prior to the beginning of the OE
month, he will be permitted to trade, pick up or drop trips
only if the changes do not affect the line after the date on
which he is planned to be removed from that line. For this
purpose, the pilot will be advised by OPBCM of the date
that he is planned to be removed from the awarded line,
upon his inquiry.
20-E-12- If, due to unforeseen circumstances, the
designated "OE" lines for a month are insufficient for all pilots
requiring "OE", those pilots not assigned an "OE" line may be
assigned out of reserve FIFO order open trips with a Captain
or First Officer, as appropriate, who has a minimum of one
hundred (100) hours in type. Each initial assignment made to
reserves under this paragraph will either be (1) a complete
published sequence or (2) a portion of a single published
sequence or (3) any sequence to which a complete crew is
assigned as a unit.
20-E-13- A pilot who has completed transition training and
is not senior enough to be awarded a line of flying under
paragraph 20-E-6 above, need not be assigned to an "OE"
line if he has a known absence and/or the pilot has not
completed his IOE on or before the 15th of the month. In
either circumstance, the pilot may be assigned trips as
described in Paragraph 20-E-10, above.
20-F- Assignment or Reassignment
Assignment limitations contained in this Paragraph are
waivable with pilot concurrence.
20-F-1- At Home Domicile
When a pilot assigned to a line of flying, loses at his home
domicile a trip sequence or originating portion thereof which.
Page 209 Section 20-F-1-a
appeared in his assigned line of flying due to illegality, being
out of position, cancellation, consolidation or equipment
substitution, he may be assigned or reassigned by the
Company as follows:
Loss of
assignment prior
to report at home
domicile
suspension of
UAL operation
20-F-1-a- If he is advised of the loss of his assigned
flying prior to reporting to the airport for such flying, the
Company shall at that time exercise one of the following;
except that if the loss of his assigned flying is due to the
suspension of United's operations at the domicile the
Company shall exercise one of the following within two (2)
hours after operations are resumed:
20-F-1-a-(1) He may be required to deadhead to any
point to connect with the remainder of his scheduled
assignment.
Telephone
available 4 hours
prior to original
departure
20-F-1-a-(2) Require him to be telephone available for
a period not to exceed four (4) hours for a potential
flight assignment; such four (4) hour period shall be
subsequent to the legal rest and within the period of
the trip sequence which he lost, except that the period
may start up to four (4) hours prior to the scheduled
departure of the trip lost.
20-F-1-a-(3) Give him a flight assignment (possibly
including deadheading to accomplish the balance of his
assigned trip) which falls within the limitations
specified in Section 5-G-1-a-(1); including assignment
under Section 8-L-6.
Reassignment
cannot depart
prior to 1800 or 3
hours earlier than
original departure
time
20-F-1-a-(4) Any flight assignment given under this
Paragraph F-1 including deadheading, cannot be
scheduled to depart prior to 1800 or three (3) hours
before the pilot's originally scheduled departure,
whichever is earlier.
20-F-1-a-(5) Require him to report to the airport for a
four (4) hour standby assignment and potential flight
assignment; such four (4) hour standby assignment to
commence at the scheduled departure time of the trip
sequence he has lost. Any flight assignment given the
pilot during this four (4) hour standby period must fall
within the limitations specified in sub-paragraph 20-F-1-
c below, based on his duty time for the standby
assignment.
20-F-1-a-(6) Relieve him from responsibility for
assignment under the provisions of this Paragraph F.
Page 210 Section 20-F-1-b
Loss of
assignment after
report to home
domicile
20-F-1-b- If he is advised of the loss of his assigned
flying after reporting to the airport, the Company shall
exercise one of the following within two (2) hours of the
time he was advised of the loss of his assigned flying;
except that if the loss of his assigned flying is due to the
suspension of United's operations at the domicile, the pilot
may be released from duty and the Company shall
exercise one of the following within two (2) hours after
operations are resumed.
20-F-1-b-(1) He may be required to deadhead to any
point to connect the remainder of his scheduled
assignment.
20-F-1-b-(2) He may be reassigned other flying within
that duty period which falls within the limitations
specified in sub-paragraph 1-c below (including
deadheading to accomplish the balance of his assigned
trip).
20-F-1-b-(3) He may be reassigned other flying which
falls within the limitations specified in Section 5-G-1-a-(
1) after being given a legal rest; including assignment
under Section 8-L-6.
20-F-1-b-(4) Require him to be telephone available for
a period not to exceed four (4) hours for a potential
flight assignment; such four (4) hour period shall not
commence prior to his receiving a legal rest
subsequent to being released from duty.
20-F-1-b-(5) Relieve him from responsibility for
assignment under the provisions of this Paragraph F.
20-F-1-c- Any reassignment given a pilot under the
provisions of sub-paragraph 20-F-1-a or 20-F-1-b above
must comply with all of the following limitations:
20-F-1-c-(1) The pilot's total scheduled on duty period
must comply with reassignment provisions of Section
5-G-2-a-(1).
20-F-1-c-(2) Any reassignment cannot be scheduled to
interfere with the next scheduled calendar day off
appearing in the pilot's assigned line of flying.
Optional hotel
when
reassignment is 2
turnarounds vs.
mult-duty period
assignment
20-F-1-c-(3) If a reassignment produces an additional
"layover(s)" at the pilot's domicile during the period of
his original assignment, the pilot shall, upon request,
be provided a local hotel room.
20-F-1-c-(4) If the reassignment given is scheduled to
interfere with the outbound portion of the next trip.
Page 211 Section 20-F-1-d
sequence appearing in the pilot's assigned line of
flying, the loss of such next trip sequence shall not
subject him to reassignment under this Paragraph F,
except that the pilot may be positioned to fly a portion
of his scheduled trip.
20-F-1-c-(5) If the reassignment given was not
scheduled to interfere with the outbound portion of his
next trip sequence, but if the actual operation does
interfere, the loss of such trip sequence shall not
subject him to reassignment under this Paragraph F,
except that the pilot may be positioned to fly a portion
of his scheduled trip.
20-F-1-d-
20-F-1-d-(1) If a pilot is assigned a telephone
availability or standby period and no assignment is
made, the pilot is relieved of responsibility under this
Paragraph F-1.
20-F-1-d-(2) Once a pilot is reassigned flying as
provided in this Paragraph F-1 a subsequent loss of
that flying will not subject him to further assignment
under this Paragraph 20-F-1, except that the pilot may
be required to complete a portion of his original
scheduled trip sequence which is operating and for
which he is legal.
20-F-2- Away From Home Domicile
Loss of
assignment after
leaving home
domicile and
reassignment
provisions
Return home
within 16 hours / 8
hours into day off
Complete original
Schedule
When a pilot assigned to a line of flying or a reserve assigned
a trip pairing loses any portion of an assigned trip pairing
beyond the originating segment, he may be reassigned to
other known open flying, including deadheading to such
flying, provided such trip or trips is scheduled to return him to
his home domicile within sixteen (16) hours of his originally
scheduled arrival at his home domicile and provided further
such assignment does not extend more than eight (8) hours
into a pilot's calendar day off. A pilot reassigned other known
open flying due to the loss of a portion of his scheduled flying
may subsequently be required to complete a portion of his
original scheduled trip sequence which is operating and for
which he is legal.
Reassignment
away from home
due to weather
20-F-2-a- In the event, that due to weather, a pilot cannot
return to his domicile at the end of the last scheduled duty
period of a trip sequence and is, therefore, required to
layover at an airport other than an airport serving his
domicile as listed in Section 5-G-1-b-(3); he may.
Page 212 Section 20-F-2-b
subsequently be assigned to any known open flying which
will expediently return him to his domicile, notwithstanding
the sixteen (16) and eight (8) hour time limits contained in
Section 20-F-2 above. In no case, however, will such pilot
be reassigned flying which would return him to his
domicile more than eighteen (18) hours later than his
scheduled return, without his concurrence.
20-F-2-b- A pilot who is required to remain at a non-crew
domicile location to protect equipment that is
unserviceable for mechanical reasons will be assigned to
fly the equipment to the location where it is to be utilized.
Under this provision, return of the pilot to his domicile
must not exceed by more than twenty-four (24) hours the
time which his assignment when he left his home domicile
was scheduled to return him to his home domicile.
Cessation of UAL
operations and
reassignment to
expedite return
home
20-F-2-c- Notwithstanding sub-paragraph 2-b above, a
pilot who has lost all or portion of a trip(s) he was
scheduled to fly and is unable to return to his domicile as
a result of the cessation of United operations, either at his
domicile or at the airport at which he lost his scheduled
flying, may, when operations are resumed, be reassigned
to other known open flying which will expediently return
him to his domicile, otherwise, he may be assigned to
deadhead to his domicile.
Charter and ferry
Reassignment
20-F-2-d- Any pilot assigned a charter or ferry trip
sequence that requires a subsequent revision may be
required to complete the revised itinerary to an on-line
station where relief can be provided. Any such revised
assignment must be scheduled in accordance with the
provisions of Section 5 and must return the pilot to his
home domicile within sixteen (16) hours of his originally
scheduled arrival time and provided further such
assignment does not extend more than eight (8) hours into
a pilot's calendar day off.
20-F-2-e- If the reassignment given above interferes with
the pilot's next scheduled trip sequence, the loss of such
next scheduled trip sequence shall not subject him to
reassignment under Paragraph 20-F-1-a or 20-F-1-b,
except that the pilot may be positioned to fly a portion of
his scheduled trip.
20-F-3- Trip pairings which are scheduled to operate over a
month-end from "Month A" into "Month B" may be revised at
any time prior to the closing of schedule preferencing for
"Month B".
Page 213 Section 20-F-4
Notice for trips
over mont-end
Complete information on these revisions will be made public
and will be available at all domiciles so that pilots may
consider the effect of the changes when preferencing
schedules for the following month. Any month-end pairing
revisions which are not available at each domicile prior to
1200 noon (local time) on the day before schedules close
must be made under the provisions of Section 20-F-1. (In the
event that a month-end pairing becomes involved in a change
under Section 20-F-4 below, that change shall not be subject
to the provisions of this sub-paragraph, but shall be subject
only to the provisions of Section 20-F-4).
Schedule changes
after posting
20-F-4- Notwithstanding the provisions of 20-F-1, 20-F-2,
and 20-F-3 above, when a trip sequence(s) is (are) cancelled
or modified as a result of a change made to the applicable
airline system schedule after pilot schedules are posted for
preferencing, the schedules may be awarded as posted and
the affected pilots may be assigned other flying as follows:
Changes to
minimum number
of lines
20-F-4-a- The changes to lines of flying will be limited to
the fewest number of lines consistent with efficient
scheduling and those affected pilots will be notified as
soon as possible after the changes are made.
Same days
20-F-4-b- The primary effort will be to assign the revised
pairing on the same day(s) the pilot(s) was scheduled to
fly. No revised lines may exceed the applicable monthly
flight time cap provided in Section 5.
Pilot hotel option
at home domicile
20-F-4-c- If a reassignment produces an additional
"layovers" at the pilot's domicile during the period of his
original assignment, the pilot shall, upon request, be
provided a local hotel room.
Telephone
Availability
Assigned on work
days not
previously
reassigned
20-F-4-d- A pilot who is assigned a line with fewer duty
periods than were contained in his original line may, at the
time of initial notification of the revision, be given Section
20-F-1-a-(2) assignments on days he was originally
scheduled to fly. The Company will make such
assignments available as far in advance as possible.
Lineholder
reassigned to
reserve
20-F-4-e- Should the schedule change result in a
reduction of flying at the domicile equivalent to one line of
flying or more, any pilot who loses all of his flying may be
assigned a reserve line which will retain the days off he
had in his original line. Such reserve shall be put on the
FIFO list ahead of all other reserves after each day off and.
Page 214 Section 20-F-4-f
shall be available for assignment during the first
assignment period each day.
SSC consultation
20-F-4-f- The System Schedule Committee shall be
afforded the opportunity to consult with and make
recommendations on schedule revisions made under the
provisions of this Paragraph 20-F-4.
More than 5% of
the lines changed
20-F-4-g- No more than five percent (5%) of pilot
schedules will be subject to reassignment under this
provision in any one month. Should an occasion arise
which requires revision to more than five percent (5%) of
schedules, all reassignments must be made under the
provisions of Section 20-F-1.
SSC consultation
20-F-4-h- Notwithstanding the five percent (5%) limit
above, in the event of a major disruption to service
outside of the Company's control (such as that created by
the 1981 Air Traffic Controller's strike), the Company may
revise schedules to the extent necessary to maintain the
highest level of service possible. In such event, the
Company will work closely with the pilot members of the
System Schedule Committee to insure that passenger
schedule integrity is maintained without imposing
unnecessary disruption on pilots' schedules.
20-G- Open Flying
20-G-1- Pilots who desire open flying shall advise the
Company. The following information will be furnished by the
pilot: his status and equipment type, priority rating, days
available for open trip(s), as well as the amount of flight time
desired. A pilot shall request the Company to remove his
name when he no longer desires open flying.
20-G-2- Open flying being covered will be described by the
system crew scheduler at the time of assignment. If such
assignment is revised at any time prior to initial scheduled
departure of that assignment, the crew scheduler will notify
the pilot involved as soon as possible.
May combine
open trips
assignment
20-G-3- In the assignment of open flying, trips may be
combined with other open trips at any location at the time of
original assignment..
Page 215 Section 20-G-4
Open trips
assignment up to
28 hours
Early assignment
20-G-4- An open trip shall be considered to be still open
until twenty-eight (28) hours before scheduled departure, or
until assigned to a pilot, whichever is later; except that an
open trip may be assigned to a PI at any time. An open trip
may be assigned at any time during the twenty-eight (28)
hour period preceding scheduled departure time, however, it
shall be considered desirable to assign such trips as soon as
practicable. When there is an open trip scheduled to depart,
or be assigned during normal rest hours (in general from
2100-0600 local time), the pilot who will be assigned the trip
shall be assigned twelve (12) hours or more prior to its
scheduled departure, when possible.
20-G-4-a- If, because of irregular operations, an
assigned pilot, when away from his home domicile is in
position to fly his regularly scheduled trip after it has been
assigned as an open trip, he will be entitled to return to
that trip, unless he is involved with a conflicting
assignment and such assignment cannot be covered by
the pilot assigned his scheduled trip.
Lineholder must
advise crew desk
14 hours prior to
trip departure in
returning from
sick leave
20-G-4-b- Notwithstanding the twenty-eight (28) hour
provision of this sub-paragraph G-4, a pilot assigned to fly
a schedule who has been on sick leave shall be entitled to
fly his scheduled trip only if he advises the crew desk
fourteen (14) or more hours prior to the scheduled
departure of the trip that he has obtained or plans to
obtain his return to work medical release.
20-G-5- If it becomes apparent that an inbound crew cannot
make their connection with time to provide for adequate
preparation, a crew may be called for protection of the trip.
20-G-5-a- Once a crew has been called for such
protection, such crew will fly the protected trip if sufficient
time, as outlined below, does not exist. In the event a
sufficient time interval has developed to allow the original
crew to make their connection, it will be the prerogative of
the original crew to fly their scheduled trip, unless a
legality problem has been created.
20-G-5-b- Every effort will be made to advise the inbound
crew of the plan regarding protection. (Note: "Sufficient
time" as outlined herein shall mean not less than thirty
(30) minutes.).
Page 216 Section 20-G-6
20-G-6- Assignment of pilots to trips will be made based on
the scheduled or planned departure times of the trips at the
time of the assignment. Subsequent changes in departure
time of trips will not change assignments unless additional
irregularities in crew assignments will result.
20-G-7- A pilot who is deadheaded to another station to fly a
particular trip, included under Section 8-L-6-a of the Pilots'
Agreement, will be assigned that trip at the time of leaving
his home domicile. A pilot assigned a trip under Section 8-L-6-
b shall be considered assigned upon notification of the
assignment.
Minimum rest at
home prior to
junior manning
Specific release
from duty to
commence rest
20-G-8- A pilot may not be given an assignment as junior
man available or as the only reserve available with less than
ten hours and forty-five minutes (10:45) free from duty at his
home domicile; except, a pilot may be given an assignment
as junior man available or as the only reserve available as
part of a previously scheduled duty period, provided such
assignment can be made within the limitations of the
previously scheduled duty period. A pilot who is given an
assignment as the only reserve available as part of a
previously scheduled duty period will not be given a
subsequent assignment under the provisions of this sub-paragraph, without his concurrence, and must be given legal
rest at his home domicile following the assignment. In the
application of this sub-paragraph, a pilot, upon completion of
an assignment, will be specifically advised if he is not
released from duty and is not commencing a rest period.
20-G-9- When a trip terminates at other than the scheduled
airport serving a metropolitan area (i.e., JFK/EWR/LGA, BWI/
IAD/ DCA, ORD/MDW, SEA/BFI, SFO/SJC/OAK, LAX/ONT/
BUR, MIA/PBI/FLL) and:
20-G-9-a- Movement of the equipment to the scheduled
airport is expected within three (3) hours of arrival at the
alternate or positioning of the equipment at the alternate
airport is desired after unloading, the inbound crew will be
assigned to accomplish such movement or positioning
unless the crew scheduler, knowing that such assignment
will cause the inbound crew to be illegal for their turn trip,
or illegal for their next assigned trip, can specifically
release the inbound crew. Duty time limitations specified
in Section 5-G-2-a-(1) shall not be exceeded.
20-G-9-b- Movement of the equipment to the scheduled
airport is expected beyond three (3) hours of arrival at the
alternate airport, the inbound crew will be released as.
Page 217 Section 20-G-10
soon as possible after any necessary equipment
positioning at the alternate airport and protection for
moving the airplane to the scheduled airport will be
accomplished in accordance with open trip coverage at
the domicile.
20-G-10- Charter Flying
20-G-10-a- Notwithstanding the provisions of Section 20-
H, a particular pilot(s) may, on a voluntary basis, be
assigned by the Company to a charter in order to comply
with the needs and desires of the charterer.
Restoration of
days off
20-G-10-b- If a pilot assigned a charter under sub-paragraph 20-G-10-a above is a lineholder, and if the
charter assignment results in a loss of days off below the
minimum days off, the number of days needed to restore
the minimum days off will be provided in the current
month, if possible, or if not possible, in the following
month.
20-H- Open Trip Coverage At Domiciles
All open trips occurring at or assigned to a pilot domicile will
be covered in the following order:
20-H-1- Open flying may be assigned to a pilot who has lost
his scheduled flying in accordance with Paragraph 20-F of
this Section.
Mak-up of ALPA
flight pay loss
20-H-2- Open flying will be offered to those pilots who have dropped flying to attend an MEC meeting or a meeting scheduled with the Company which was later cancelled or rescheduled. This provision shall be used to offset billings to the Association for the dropped trip(s) when the pilot is not returned to the trip originally dropped for ALPA business.
Mak-up for ANP
20-H-3- Open flying will be offered to home assigned pilots
in the status and equipment type involved who have
voluntarily dropped trips for personal reasons or are picking
up time for the application of Section 13-A-2, in the following
manner:
20-H-3-a- The flying will be offered in seniority order to
the pilots who request it.
20-H-3-b- Such flying will not be offered to a pilot if it will
disrupt his assigned schedule for the current or
succeeding month or project him over eighty-one (81)
actual hours (over to eighty-three (83) actual hours in a.
Page 218 Section20-H-4
flex month) in either month or reduce him below twelve
(12) days off in a thirty (30) day month or thirteen (13)
days off in a thirty-one (31) day month, (fourteen (14) days
off for Shuttle) in either month.
20-H-4-
Mak-up for
ALPA flight pay
Loss
20-H-4-a- Open flying will be offered to those pilots who
have dropped flying for ALPA duties. Such open flying
picked up shall be used to offset billings to the
Association.
PI open flying
20-H-4-b- Open flying may be offered to Pilot Instructors
picking up open flying under the provisions of Letter of
Agreement 89-2.
20-H-4-c- Open flying will be offered in seniority order to
pilots requesting it under this subparagraph.
20-H-5-
Pic-up of
additional monthly
flying
Open flying may be offered to home assigned lineholder
pilots in the status and equipment type involved who have
indicated a desire to volunteer for open flying in order to
increase their pay projection. Flying shall be offered in
seniority order among those requesting it. Assignment under
this provisions shall not project the pilot over eighty-one (81)
actual flight hours (over to eighty-three (83) actual flight
hours in a flex month) in the current or succeeding month nor
reduce him below twelve (12) days off in a thirty (30) day
month or thirteen (13) days off in a thirty-one (31) day month,
(fourteen (14) days off for Shuttle) in either month.
20-H-6- Open flying may be offered to flight management
personnel who are on the Pilots' System Seniority List.
Management flying under this provision shall not be on a
displacement basis.
20-H-7- Open flying may be assigned to a reserve who is on
standby basis in accordance with Section 5-G-5 of this
Agreement.
--6
reassignment to
prevent double
deadhead
20-H-8- Open flying may be assigned to a visiting reserve
pilot, in the status and equipment type involved, who is not
assigned to fly a return trip and the assignment is scheduled
to return the pilot to his home domicile without exceeding the
limitations specified in Paragraph 20-F of this Section. Pilots
assigned under Section 8-L-6 may be reassigned under this
priority to prevent a double deadhead.
Page 219 Section 20-H-9
Misconnecting of
inbound crew
reassignment
Return home
within 16 hours or
8 hours into day
off
20-H-9- If the open trip is created because an inbound crew
will not connect to their assigned sequence because of
delays, illegality or cancellation, coverage of their trip may be
provided by assigning it to another crew for whose flying the
misconnecting crew is legal. The assignment must also
return him to his home domicile within sixteen (16) hours of
his originally scheduled arrival time and must not extend
more than eight (8) hours into his day off, except with pilot
concurrence or as otherwise provided in Paragraph 20-F-2 of
this Section.
Misconnected
trade rules
Following is the order of consideration under this Paragraph:
20-H-9-a- Trade with any crew who can accomplish the
flying without impact on their remaining scheduled trip
sequences.
20-H-9-b- Trade with any crew to avoid a delay or further
delay in the departure of the open trip, provided reserve
coverage would cause a greater delay.
Home reserve
Assignment
20-H-10- Open flying will be assigned to home reserve pilots
in the status and equipment type involved.
Open flying may
be assigned to
reserves under -
-6
20-H-11- Open flying may be assigned to a reserve pilot in
equipment type and status from another domicile under the
provisions of Section 8-L-6.
20-H-12- Open flying may be assigned to home reserve
pilots in the status and equipment type involved who have
previously been assigned, if the planned departure time of
the open flying being covered is earlier than the planned
departure time of the originally assigned trip. In the
application of this Paragraph, the reserve pilot who is legal
and who is assigned to the latest departure will be moved up
and assigned to the unanticipated earlier departure.
20-H-13- Open flying will be assigned to visiting reserve
pilots in the status and equipment type involved who are not
assigned to fly a return trip.
Senior/Junior
Manning
20-H-14-
20-H-14-a- Open flying may be assigned in the following
order to pilots at the domicile in the status and equipment
type involved who are available and qualified. No pilot will
be obligated to accept any flying offered under this
provision.
Page 220 Section 20-H-14-b
20-H-14-a-(1) Trips will be offered in seniority order to
pilots who have indicated to OPBCM that they desire to
be notified of open flying and:
20-H-14-a-(1)-(a) Whose schedules will be legal
after the trip is assigned, or
Senior manning
schedule
adjustment
Limitation of duty
period plus 1 for
trip drop
20-H-14-a-(1)-(b) Whose schedules can be made
legal after the trip is assigned with a trip drop(s)
where the total number of duty periods dropped
does not exceed the number of duty periods added
by more than one. If there is a choice of trips with
an equal number of duty periods that can be
dropped to make the line legal, the trip(s) to be
dropped will be mutually agreed upon by the pilot
and the crew scheduler. If agreement cannot be
reached, the offer of open flying will be withdrawn.
Junior manning
schedule
adjustment
20-H-14-a-(2) Trips will be offered, in inverse order of
seniority, to pilots whose schedules are legal, or can be
made legal, in accordance with the provisions of sub-paragraphs
(1)-(a) and (b) above.
Mutual agreement
for senior
manning drop
No limitation on
duty period for trip
drop
20-H-14-a-(3) Notwithstanding the provisions of sub-paragraphs
(1)-(a) and (b) above, trips will be offered
in seniority order to pilots who have indicated to
OPBCM that they desire to be notified of open flying
and whose schedules can be made legal after the trip
is assigned. If there is a choice of trips that can be
dropped to make the line legal, the trip(s) to be
dropped will be mutually agreed upon by the pilot and
the crew scheduler. If agreement cannot be reached,
the offer of open flying will be withdrawn.
20-H-14-a-(4) Notwithstanding the provisions of sub-paragraph
20-H-14-a-(1)-(a) and 20-H-14-a-(1)-(b)
above, trips will be offered in inverse order of seniority
to pilots whose schedules can be made legal after the
trip is assigned.
Sr/Jr manning pay
credit
20-H-14-b- The flight pay credit projection of a pilot's line
of flying who accepts a trip under this provision will be the
value of his line immediately before or immediately
following the trip assignment and repair of his line, if any,
whichever is greater. Additionally, the pilot's actual
projection will be adjusted to reflect the value of his actual
hours flown.
Page 221 Section 20-H-14-c
Incentive Pay
20-H-14-c- A pilot who accepts and actually departs on
an assignment under this provision will receive incentive
pay in accordance with Section 3-B-7-c of the Agreement.
20-H-14-d- A pilot who is assigned a trip with a planned
departure time within nine (9) hours of the planned
departure time of the trip to be covered shall not be
considered to be available under this provision. If no pilots
are available in this category, the assignment will be made
to the most junior pilot in the status and equipment type
involved regardless of the planned departure time of his
next scheduled trip.
NOTE: A pilot is not available if his monthly projection
cannot be reduced below eighty-one (81) actual hours
(below eighty-three (83) actual hours in a flex month) (or
his projection, if higher) or his monthly minimum days off
cannot be restored. Additionally, a Shuttle pilot is not
available if his schedule cannot be restored to at least 14
days off.
20-H-15- With pilot concurrence, open flying may be
assigned to a pilot who is legal, qualified and in position, or
who can be positioned, to accomplish the desired operation
in a timely manner.
20-H-16- Should a lineholder be required to take sick leave
for a trip which he has been assigned under the provisions of
this Section 20-H, he shall be eligible for paid sick leave for
that trip under the same provisions and conditions as if the
trip were part of his scheduled line at the time it was
awarded.
20-I- Open Trip Coverage At Non-Domiciles
All open trips at non-domiciles will be covered in the following
order:
20-I-1- Open flying may be assigned to a pilot who has lost
his scheduled or assigned flight(s), providing such
assignment will position him to continue his assigned
scheduled sequence of trips or return him to his home
domicile within the limitations of Paragraph 20-F-2 of this
Section.
Page 222 Section 20-I-2
20-I-2- Open flying may be assigned to a pilot at that
location or at some other location who was not assigned to fly
a return trip, if the assignment is scheduled to return the pilot
to his home domicile without exceeding the limitations of
Paragraph 20-F-2 of this Section. Home domicile for a
Section 8-L-6 assigned pilot is his actual domicile and not the
domicile from which the trip sequence was scheduled to
originate.
Open trip
coverage at no-
domicile
20-I-3- If the open trip is created because an inbound crew
will not connect their assigned sequence because of delays,
illegality or cancellation, coverage of their trip may be
provided by assigning it to another crew, for whose flying the
misconnecting crew is legal. Any assignment under this
provision must not interfere with either crew's next scheduled
sequence of trips out of their home domicile and must return
the pilots involved to their home domicile within sixteen (16)
hours of their originally scheduled arrival time and must not
extend more than eight (8) hours into a scheduled day off
except as provided in Paragraph 20-F-2 of this Section.
Following is the order of consideration under this Paragraph:
20-I-3-a- Trade with a crew from the same domicile as
the misconnecting crew.
20-I-3-b- Trade with a crew from some other domicile.
20-I-4- If time permits deadheading on-line, assign the open
trip to a domicile for coverage.
20-I-5- Assign the open flying to a pilot who can accomplish
the operation without any disruption of his assigned flying
sequence other than deadheading or rest periods.
Only man
qualified at no-
domiciles
20-I-6- Open flying may be assigned to a pilot who is the
only man legal, qualified and in position, or who can be
positioned, to accomplish the desired operation. Without pilot
concurrence, assignment under this sub-paragraph 6 must
not delay the pilot's return to his home domicile more than
sixteen (16) hours beyond the time his assignment when he
left his home domicile would normally return him to his home
domicile or more than eight (8) hours into his next scheduled
day off except as provided in Paragraph 20-F-2 of this
Section.
20-J- Scheduling of Reserve Crews
20-J-1- General.
Page 223 Section 20-J-1-b
20-J-1-a- Standby Lists
20-J-1-a-(1) Reserves shall be placed on a one (1) day,
two (2) day, three (3) day, or four (4) or more day
availability list in accordance with the number of days
available for reserve assignment remaining before their
next scheduled unavailable days.
Legal rest for
reserve who
reports but does
not fly
Option to remain
at top or bottom of
list
20-J-1-a-(2) A reserve who reports for an assignment
but does not fly and is released will be entitled to a
legal rest and may at his option remain at the top or
revert to the bottom of the appropriate list.
20-J-1-b-
20-J-1-b-(1) Reserve crew members will be assigned
open flying or standby on a first-in first-out rotation with
other reserves in their status and equipment type in the
following manner:
Duty Period Periods Available
1 2 3 4 or more
1 X O O O
2 X X O O
3 X X X O
4 or more X X X X
Position a reserve
to fly his line
20-J-1-b-(2) If reserve coverage is available, reserve
rotation will be modified to permit a pilot currently
assigned as a reserve to be in position to legally fly the
initial trip in his awarded line, unless such positioning
will cause interruption of a lineholder's schedule or a
reserve's time off pattern.
Reserve route
check and FIFO
modification
20-J-1-b-(3) Provided the pilot receives at least forty-eight (48) hours notice, reserve rotation may be
modified to enable a reserve pilot to accomplish an en
route check by a check airman. With pilot concurrence,
the forty-eight (48) hour notice requirement may be
waived.
Reserve on TDY
may request top
of FIFO list
20-J-1-b-(4) Reserve rotation may be modified to allow
a reserve pilot assigned under Section 8-L-5 to
voluntarily be placed at the top of the appropriate FIFO
list upon reporting for his temporary duty assignment
and upon returning from any flight assignment during
the temporary duty period.
Page 224 Section 20-J-1-c
Procedure for
assigning reserve
as PC fil-ins
20-J-1-b-(5) Notwithstanding the provisions of
Paragraph 20-J-1-b-(1) above, when a line reserve fill-in for PC/PT's is required, such fill-in will be selected
as follows:
20-J-1-b-(5)-(a) A reserve will be sent from the
same domicile as the rest of the crew, if available,
without jeopardizing other coverage. Otherwise, a
reserve will be sent from any other domicile where
adequate coverage is available, giving
consideration to maintaining an equitable
distribution among domiciles.
20-J-1-b-(5)-(b) No reserve will be assigned to
more than one (1) fill-in during any single month,
unless all other available reserves at that domicile
have already received one or more such
assignments.
20-J-1-b-(5)-(c) No reserve will be given more than
three (3) fill-in assignments during any consecutive
six (6) month period, if the reserve advises the
Company of this fact at the time of assignment;
unless no other reserve with fewer assignments is
available on the system.
20-J-1-c- In the event that a reserve pilot deadheads to
his home domicile on a trip being flown by another reserve
pilot of the same domicile who has the same number of
days available, the deadheading pilot shall take his
position on the first-in, first-out list ahead of the pilot flying
the trip.
20-J-1-c-(1) When a pilot returns to reserve
assignment from a schedule assignment, he shall, for
the purpose of determining his first-in, first-out
position, be considered to have arrived exactly at
midnight beginning the day when the reserve
assignment began and will be available for duty. In the
event more than one pilot becomes available for
reserve at the same time, their relative position on the
first-in, first-out list shall be determined by their arrival
time at home after their last flying assignment. In any
case, a pilot beginning a reserve assignment will take a
position on the appropriate first-in, first-out list behind
any continuing reserve who is already positioned.
Page 225 Section 20-J-1-d
0600 departure
following
vacation, leave or
training
Return from sick
leave training of 4
days or less
20-J-1-c-(2) A pilot on reserve shall not be required to
report for duty to fly or deadhead on a trip which is
scheduled to depart from his home domicile prior to
0600 local domicile time on the day following his
vacation, leave or training of five (5) days or more. A
reserve returning from sick leave will resume his
reserve assignment upon release for duty by the
Medical Department. A reserve involved in training
assignments of four (4) days or less will be available
after any required rest periods.
20-J-1-d- A reserve will progress normally through the
first-in, first-out rotation until he reaches first-up on the
appropriate list, at which point he will remain until he
reports for a flying assignment or a standby protection
assignment or goes on a days-off period. A reserve pilot
returning from a days-off, sick leave, training or vacation
or a reserve returning from a line assignment or
Association business, will enter the appropriate list behind
other available reserves already on that list.
20-J-1-e- A reserve pilot who has been assigned a trip
may be removed at any time prior to three (3) hours before
the scheduled departure of the trip for the assignment of a
pilot under the provisions of Paragraph 20-F-1.
20-J-1-f- A reserve pilot may maintain his position on the
first-in, first-out list, or at his option, revert to the bottom
of the first-in, first-out list when:
20-J-1-f-(1) He is displaced.
20-J-1-f-(2) He is a reserve covered by Section 5-G-5-
c
20-J-2- Reserve System Options:
The following options will be available to a pilot while on
reserve status:
Traditional - FIFO
20-J-2-a- Traditional Option: A reserve who does not
contact OPBCM to elect one of the other options available
under this Paragraph 2 will be a Traditional reserve. A
Traditional reserve will progress normally through the first-in, first-out list until he receives an assignment in
accordance with the provisions of sub-paragraph 20-J-1-d
above.
20-J-2-b- Active Option
Page 226 Section 20-J-2-c
Active - top of list
20-J-2-b-(1) A reserve may volunteer to go to the top
of the FIFO list. A reserve who elects this option will be
given an assignment just as though he had progressed
through the FIFO list in accordance with Paragraph 20-J-1-d above.
20-J-2-b-(2) A reserve's position on the FIFO list under
this option will be determined by the time the reserve
blocked in from his last assignment, i.e., a reserve who
blocked in at 1700 will go ahead of a reserve who
blocked in at 1800 regardless of when the individual
pilots volunteer to go to the top of the FIFO list. This
block in time rule (block in time of last flight
assignment) also applies to a reserve coming off days
off.
20-J-2-b-(3) A reserve who volunteers to go to the top
of the FIFO list under this provision and who
subsequently does not receive an assignment by 2359
of the day before his last day of availability shall revert
to the position on the FIFO list he would have been if
he had not volunteered to go to the top of the list.
Aggressive -
pick-up
20-J-2-c- Aggressive Option: A reserve may volunteer for
an assignment on a first-come first-served basis pursuant
to the following provisions:
28/24 window
20-J-2-c-(1) All flying that is known to be open more
than twenty-eight (28) hours before the scheduled
departure time of the trip will be available for pick-up
between twenty-eight (28) hours and twenty-four (24)
hours before the scheduled departure time of the trip.
28 and 12 - 4 hour
window
20-J-2-c-(2) Flying that becomes open between
twenty-eight (28) hours and twelve (12) hours before
the scheduled departure time of the trip will be
available for pick-up for a period of four (4) hours after
the trip opened up or until twelve (12) hours before
scheduled departure time, whichever is earlier.
Pick-up resulting
from sick leave
between 14 and
12 hours
20-J-2-c-(3) Trips that become open as a result of
short term sick leave will be available for pick-up as
follows:
20-J-2-c-(3)-(a) The initial trip for which a lineholder
places himself on sick leave will be available for
pick-up for a period of up to four (4) hours beginning
at the time the trip becomes open but ending not
later than twelve (12) hours before the scheduled.
Page 227 Section 20-J-2-c
departure time of the trip.
20-J-2-c-(3)-(b) Any subsequent trip(s) for which
the lineholder remains on sick leave will be
available for pick-up not earlier than fourteen (14)
hours and not later than twelve (12) hours before
the scheduled departure time of the trip.
Silo concept
20-J-2-c-(4) A reserve may pick up a trip that has the
same number of days, or the same number minus one,
as the number of days of availability before his next
scheduled unavailable days (Silo concept - length of
assigned ID must be not less than days of availability
minus one). With OPBCM concurrence, a reserve may
pick up a trip that is not within his silo.
Subsequent
illegal projection
20-J-2-c-(5) A reserve may pick up a trip for which he
is projected to be legal while he is flying a current
assignment. If he subsequently is projected to become
illegal for the trip that he picked up, the trip will be
placed back in open flying and will be picked up by or
assigned to another pilot in accordance with the
provisions of this Paragraph J-2.
20-J-2-c-(6) A reserve may, with OPBCM concurrence,
move an RDO(s) to pick up a trip.
20-J-2-d- Voluntary Short Call Out Option
Short call for trips
within 5 hours
20-J-2-d-(1) A reserve may volunteer to go on a Short
Call Out List, on a duty period by duty period basis, for
assignment to trips that become open five (5) hours or
less before the scheduled departure time of the trip.
20-J-2-d-(2) Notwithstanding their relative positions on
the FIFO list, a reserve on the Voluntary Short Call Out
list will be assigned to a trip that opens up five (5)
hours or less before the scheduled departure time of
the trip ahead of pilots who have elected the Active or
Traditional options.
Remain on short
call list until
midnight or end of
rest period
Reversion to
traditional option
20-J-2-d-(3) A reserve who volunteers to be on the
Short Call Out list will remain on that list until midnight
of the day on which he volunteered or at the end of his
designated rest period, whichever is earlier, at which
time he will revert to the Traditional option.
20-J-2-d-(4) A reserve will remain in his original
position on the FIFO list during the time he is a Short.
Page 228 Section 20-J-3
Call Out reserve and after he falls off the Short Call
Out list unless he has elected the Active option.
Short call reserve
remains on
traditional FIFO
for trips grater
than 5 hours out
20-J-2-d-(5) Notwithstanding the provisions of this sub-paragraph J-2-d, the Company may assign a trip to a
Short Call Out reserve more than five (5) hours before
the scheduled departure time of the trip in accordance
with the provisions of sub-paragraph 20-J-1-d above.
20-J-3- Reserve Rest
Designated rest periods will be determined as follows:
Base rest period
20-J-3-a- The company may designate up to four (4)
base rest periods per day in each fleet/seat/domicile for
monthly preferencing. Reserves will be awarded a base
rest period which will continue on a day by day basis
unless changed as a result of the application of the
provisions of sub-paragraph 20-J-3-b, paragraph 20-J-3-d
and paragraph 20-J-3-e below.
20-J-3-b- A reserve shall return to his original base rest
period following an assignment, RDOs and other known
absences except sick leave where the following provisions
shall apply:
20-J-3-b-(1) Returning from sick leave not requiring a
medical clearance - the nine (9) hours immediately
preceding the time the reserve calls off sick leave shall
be considered to be his designated rest period. If the
reserve is not assigned to an ID that day with a
scheduled departure time prior to the start of his base
rest period then he will return to his base rest period.
20-J-3-b-(2) Returning from sick leave requiring a
medical clearance - the reserve shall have a default
designated rest period from 1800 of the day he
received his medical clearance until 0300 of the
following day.
20-J-3-c- A reserve shall also return to his original base
rest period following an assignment unless he receives a
subsequent assignment that has a check in time before
the beginning of his base rest period. Notwithstanding
this provision, however, a pilot may pick up a trip under
the provisions of Section 20-J-2-c that has a check in time
after the beginning of his base rest period.
Page 229 Section 20-J-3-d
Last 9 hours prior
to checking in is
designated rest
20-J-3-d- When given a flight assignment the last nine
(9) hours in the period following the receipt of the
assignment prior to check in time will be the reserve's
designated rest period.
Last 9 hours of
contractual rest
will be designated
rest
20-J-3-e- A reserve returning from an assignment may,
within four (4) hours after his scheduled arrival time,
designate the last nine (9) hours of his contractual rest to
be his FAA required rest period for the purpose of being a
voluntary short call-out reserve under Section 20-J-2-d
following his rest period.
20-J-4- Reserve Assignments
Reserves shall be assigned known open flying in accordance
with the following:
Note: As contained herein, "Available for assignment" is that
time following the Aggressive Pick-up window under
Paragraph 20-J-2-c-(1), Paragraph 20-J-2-c-(2), and
Paragraph 20-J-2-c-(3) above.
0700- 2300
20-J-4-a- Trips that becomes available for assignment
between the hours of 0700 and 2300:
20-J-4-a-(1) A trip that becomes available for
assignment twenty-four (24) hours before the
scheduled departure time of the trip will be assigned at
that time.
20-J-4-a-(2) A trip that becomes available for
assignment between twenty-four (24) hours and twelve
(12) hours before the scheduled departure time of the
trip will be assigned as soon as it is available.
20-J-4-a-(3) A trip that becomes open less than twelve
(12) hours before the scheduled departure time of the
trip will be assigned as soon as it is known to be open.
2301 - 0659
20-J-4-b- Trips that becomes available for assignment
between the hours of 2301 and 0659:
20-J-4-b-(1) A trip that becomes available for
assignment twenty-four (24) hours before the
scheduled departure time of the trip will be assigned at
that time but the reserve will not be notified of the
assignment until 0700.
20-J-4-b-(2) A trip that becomes available for
assignment between twenty-four (24) hours and twelve
(12) hours before the scheduled departure time of the
trip will be assigned twelve (12) hours before the.
Page 230 Section 20-J-4-c
scheduled departure time of the trip or at 0700,
whichever is earlier.
20-J-4-b-(3) A trip that becomes open less than twelve
(12) hours before the scheduled departure time of the
trip will be assigned so as to provide the reserve with a
reasonable amount of time to report for the trip or at
0700, whichever is earlier, unless waiting to make the
assignment would cause an otherwise available
reserve to become illegal for the assignment
20-J-4-c- In the application of sub-paragraph 20-J-4-a
and paragraph 20-J-4-b above the following shall apply:
20-J-4-c-(1) Assignments will be made to the first
reserve, in first-in, first-out order, who is legal for the
assignment notwithstanding the fact that waiting to
make the assignment would result in assigning the trip
to a reserve who is closer to the top of the list.
If no reserves are
available,
Company may
wait to assign
20-J-4-c-(2) If no reserves are legal for an assignment
at the time a trip becomes open or available for
assignment (including those reserves on required rest)
the Company may wait to make the assignment to a
reserve who subsequently will become legal for the
assignment.
Company call
during designated
rest period
20-J-5- The Company will not call a reserve during his
designated rest period unless no other reserves are available
for the assignment. A reserve will not be required to answer
his phone or accept any assignment offered during his
designated rest period.
Non-augmented
international
flying under
domestic rules
treated as
domestic
20-J-6- All non-augmented international flying operated
under domestic contract rules, except that flying conducted
under Section 5-H of the Agreement, will, for the purposes of
the required rest rule, be treated as domestic flying.
Conversion of
reserve to
international
standby
20-J-7- In those domicile/fleets that operate both domestic
and augmented international flights, the Company may
convert a reserve to a twenty-four (24) hour international
standby if that reserve is the only reserve available to cover
an anticipated open international trip in his domicile. In this
case the reserve will not be assigned to any domestic trips. If
an international assignment is not made, and he is no longer
the only reserve available, he will be returned to his normal
designated rest period.
Page 231 Section 20-J-8
20-J-8-
No double all-nighter
without
pilot concurrence
20-J-8-a- A reserve returning on a trip which contains a
last segment that is scheduled to arrive at his home
domicile between the hours of 0045 and 0600 will not be
assigned to another trip the last segment of which is
scheduled to arrive between the hours of 0045 and 0600
the following day, without his concurrence.
20-J-8-b- Should a pilot be assigned an all nighter (a
segment within the first duty period of a trip pairing that
arrives between 0200 and 0600 local domicile time) and
said pilot does not receive his original awarded rest period
between the time the trip pairing is assigned and check-in
of the trip; this pilot will immediately return to his original
awarded rest period upon completion of the trip pairing.
20-J-9- The Company will make known reserves' base and
designated rest periods in UNIMATIC and on the VRU. Any
change to a reserve's designated rest period will be
communicated to the reserve by OPBCM by telephone.
Contract Admin Home
Instruction Page
Agreement Table of Contents
Interpretations Table of Contents.
Page 232 Section 20-J-9
This Page Intentionally Left Blank.
Page 233 Section 21-A
Section 21
General
21-A-
A pilot shall not be required to pay for the use of any
Company equipment used in personnel training required by
the Company.
21-B-
A single master personnel file shall be maintained on each
pilot in the employ of the Company in his Flight Manager's
office and shall contain all progress reports, all written orders
issued to him affecting a change of station or status, copies
of all reports and orders issued concerning his pilot status, all
summary records of practice, training and flight checks, and
any other supervisory reports involving said pilot. A single
training file may be maintained on each pilot at the Denver
Training Center and shall contain all records associated with
training and flight checks, including grades received on all
examinations and instructor evaluations involving said pilot.
All orders to pilots assigning them to special duties or to
different stations shall be in writing. A pilot's personnel file
and training file shall be open on request for inspection by
said pilot. Nothing herein shall prevent the Company from
maintaining duplicate files.
21-C-
Any change or alteration to the pilot uniform must be with the
concurrence of the Uniform Committee.
21-D-
Publishing of the
Contract
A convenient booklet containing this Agreement and all
associated documents including Letters of Agreement will be
furnished to the pilots by the Company no later than ninety
(90) days after the signing of this Agreement. Copies of all
additional supplemental amendments or agreements, on the
same paper size and format as the Basic Agreement, will be
furnished to all pilots within forty-five (45) days after signing.
The revisions and additions will be numbered and dated for
record keeping.
Page 234 Section 21-E
21-E-
Maintaining
present pass
policy
Additional pass
privileges
extended to other
employees, pilots
also obtain
21-E-1- It is agreed that the pass transportation regulations
as established by Company policy, in effect as of April 12,
2000, will apply to pilots and will not be changed or
discontinued during the term of this Agreement without first
advising the Association the reason therefor and affording
the Association an opportunity to confer with the Company. It
is further understood that any additional pass entitlements
extended to other employees during the term of this
Agreement will also be extended to pilots, widows and/or
their dependents.
21-E-2- A pilot who has ten (10) years of service with the
Company prior to being permanently grounded will be
considered as a retired employee for pass travel privileges.
21-F-
If requested by the pilot, a UAL pilot representative of ALPA
may be present in the cockpit as an observer on any check
other than a routine check.
21-G-
With adequate notice, the Company shall honor all requests
from the President's Department of the Association for
release of MEC members and MEC standing committee
members. Other pilots, with adequate notice, will be released
for Association business consistent with the needs of the
service.
21-H-
There shall be no discrimination between employees covered
by the Agreement because of race, creed, color, sex or
national origin.
21-I-
Parking at no-
pilot domiciles
21-I-1- In the event parking facilities are not available for
employees at the airport location, the Company will assume
the monthly parking charges up to a maximum of thirty-five
Dollars ($35.00) per month. This provision does not apply to
original or replacement charges for employees for parking
decals, stickers, gate keys or similar items. It is understood
that a pilot may park his car at either his domicile or some
other Company station location, if parking space is available,
Page 235 Section 21-I-2
in which case the Company shall be obligated to assume only
the expense of one location.
21-I-2- If a pilot is scheduled to fly or deadhead from an
airport serving his domicile and parking is not provided for his
automobile, public facilities may be used and charges will be
paid by the Company. Such charges shall be submitted within
ten (10) days on the Company expense forms and will be
supported by a receipt.
21-J-
The Company shall indemnify a pilot or his estate and
provide defense against any claims, whether by third parties
or by fellow employees, arising out of such pilot's
performance of his duties with the Company as a pilot unless
such claims arise from the willful misconduct of the pilot.
21-K-
Cockpit jumpseat
21-K-1- The parties agree that the Company will maintain
the new cockpit jumpseat policy established June 15, 1989
which provides that the United cockpit jumpseat may be
granted to other Part 121 air carrier pilots where a reciprocal
cockpit jumpseat agreement is in effect. The Company has
sole discretion in establishing reasonable procedures to
administer this policy.
21-K-2- The Company will install a second jumpseat on B-737-300/500 and B-757 aircraft when the aircraft go through
heavy maintenance.
21-K-3- Provided seats are available in the cabin, a United
Airlines pilot may travel on OMC authority even if the cockpit
jumpseat(s) are occupied. The pilot will be boarded in the
cabin on OMC authority only after all other stand-by
passengers (revenue and non-revenue) have been boarded.
In the event the Company implements a policy of service-charge-waived employee pass travel, this provision will
expire.
Weight restricted
Flight
21-K-4- A United Airlines pilot will be allowed to travel on
OMC authority and occupy the cockpit jumpseat(s) on a
weight restricted flight.
21-L- Mailing of Paychecks
21-L-1- The Company will mail paychecks in accordance
with the following procedures:
Page 236 Section 21-L-1-a
21-L-1-a- The paychecks will be mailed the day before
their due date.
21-L-1-b- The paychecks will be mailed to the pilot's UG-100 address.
21-L-1-c- Each pilot may elect four times a year, during a
designated sign-up period, to have his paycheck sent to
his UG-100 address. Once having selected the mailing
option, the service will continue until the pilot requests
that it be terminated. If a pilot fails to select paycheck
mailing, his check will be sent to his domicile office for
pick-up. A pilot may discontinue this check-mailing service
at any time by having his Manager notify EXOPZ.
21-L-1-d- The Company shall charge a fee of $6.00 per
year to cover the cost of this service. The service year
shall run from April 1 to March 31.
21-L-2- In the event the Company incurs additional
administrative costs due to increased requests for stop
payments, incorrect addresses, etc., the Company may
terminate this procedure, after discussion with the
Association.
Contract Admin Home
Instruction Page
Agreement Table of Contents
Interpretations Table of Contents.
Page 237 Section 22-A
Section 22
Duration
22-A-
22-A-1-
This Agreement shall cancel all Agreements,Supplemental Agreements, Amendments, Letters of
Understanding and similar related documents executed
between the Company and the Air Line Pilots Association
prior to the signing of this Agreement with the exception of
those listed in sub-paragraph 2 below and:
Letter Number Date Signed
Letter of Understanding (including
Appendix A attached) establishing and
implementing the official integrated
seniority list 11/13/62
Letter of Agreement 6/11/63
Letter from Mr. C.M. Mason to Mr. C.H. Ruby
on the Use of the Jump Seat 3/21/68
Letter from Mr. P.A. Wood to Mr. C.H. Ruby 8/22/70
Letter from Mr. C.E. Luther to Mr.
J.J. O'Donnell relating to Airborne
Information System 12/01/72
90-2 Company Date of Birth 12/20/90
91-21 570 5/09/99
91-29 Panel of Arbitration Referees 5/09/91
91-54 Labor Protective Provisions 11/11/91
91-55 "Class of '85" 12/06/91
92-4 PAA-Latin America 6/30/92
Clarification of Section 1-C-3-c 10/26/00
22-A-2- The following listed Agreements, Supplemental
Agreements, Amendments, Letters of Understanding and
similar related documents executed between the Company
and the Air Line Pilots Association shall remain in effect for
the duration of this Agreement as specified in Paragraph D
below.
Letters Date Signed
83-3 ALPA-PAC 6/08/83
83-5 Voluntary Contributions - UAL Pilots
Charitable Foundation, Inc. 7/12/83
84-1 Age 60 3/01/84
Page 238 Section 22-A-2
85-11 Charter Operation 6/15/85
87-1 Resolution of Cockpit Conflicts 8/03/87
87-2 Unimatic Terminal 8/04/87
89-2 Pilot Instructors 11/20/89
90-1 Drug and Alcohol Testing 1/03/90
91-2 International Agreement 5/09/91
91-4 Pacific ETOPS 5/09/91
91-10 Medical/Dental Plan Meet and Discuss 5/09/91
91-13 Future Amendments to Pension Plans 5/09/91
91-15 CRAF 5/09/91
91-16 MAC 5/09/91
91-19 Cessation of Work 5/09/91
91-20 UP-PAC 5/09/91
91-23 CLR Seminar Training 5/09/91
91-27 Dues Check-Off 5/09/91
91-30 MEC Officer Displacement 5/09/91
91-32 Age 59 Bypass 5/09/91
91-33 Agency Shop 5/09/91
91-36 LAX B-737-300 and 757/767 Equipment
Page 239
|
97-9 |
Open Flying for Flight Management |
5/16/97 |
|
97-13 |
FOQA Update |
9/24/97 |
|
98-1 |
DENTK Contract Training |
1/6/98 |
|
98-2 |
Standards Captain Job Share |
1/23/98 |
|
98-3 |
Management Pilot Definition |
1/23/98 |
|
98-6 |
Domicile Swap |
2/2/98 |
|
98-8 |
Simulator Schedule Protocol |
4/30/98 |
|
98-13 |
B-777 Crew Rest Facility |
12/18/98 |
|
98-14 |
Honolulu Domicile |
12/18/98 |
|
99-6 |
B-747-400 Currency |
3/31/99 |
|
99-7 |
LCA Work Rules and Compensation |
4/27/99 |
|
99-8 |
Widebody New Hire |
4/27/99 |
|
99-9 |
Job Share S/C Guideline Change |
6/30/99 |
|
99-10 |
Captain Development Course |
8/16/99 |
|
99-11 |
Air Canada Letter |
10/22/99 |
|
99-12 |
PWM Downtown Hotel |
11/15/99 |
|
99-13 |
Crew Mean Expense Clarification |
12/10/99 |
|
99-14 |
P.I. Compensation and Days off |
12/29/99 |
|
00-1 |
Natural Disaster Absence Policy |
1/7/00 |
|
00-2 |
Pay for ORD DC-10 Freighter/HazMat Training |
3/9/00 |
|
00-3 |
Re-award of 2000 Annual Vacation |
3/27/00 |
|
00-4 |
Pre and Post Snap-Back |
4/14/00 |
|
00-5 |
Separate Vacation Bidding for HNL B747-400 |
4/18/00 |
|
00-6 |
Professional Standards Letter |
5/15/00 |
|
00-7 |
3 Month reduction of Freezes |
5/31/00 |
|
00-8 |
Human Factors LAHSO Simulator Study |
6/14/00 |
|
00-9 |
Contribution Lump Sum |
7/13/00 |
|
00-10 |
Recapitalization Agreement |
10/11/00 |
|
00-11 |
International Medical Study |
10/26/00 |
|
00-12 |
PBS Study |
10/26/00 |
|
00-13 |
New Equipment Formula |
10/26/00 |
|
00-14 |
Labor Disputes |
10/26/00 |
|
00-15 |
Cabotage |
10/26/00 |
|
00-16 |
New Uniform |
10/26/00 |
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00-17 |
Life Event |
10/26/00 |
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00-18 |
Pension Modification |
10/26/00 |
|
00-19 |
Life, Medical and Dental Insurance Modifications |
10/26/00 |
|
00-20 |
Scheduling Commitment |
10/26/00 |
|
00-21 |
Flights Scheduled in Excess of 16 Hours |
10/26/00 |
|
00-22 |
Short-Term Disability |
10/26/00 |
Page 240
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00-23 |
570 Seniority Date |
10/26/00 |
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00-24 |
Year 2000 Training Commitments |
10/26/00 |
|
00-25 |
Trip Trade and Secondary Lines Modification Test |
10/26/00 |
|
00-26 |
Electronic Communication |
10/26/00 |
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00-27 |
New Hire OMC Eligibility |
11/28/00 |
|
00-28 |
Anchorage Closing |
11/28/00 |
|
00-29 |
Navigating Change Workshop |
12/00 |
|
00-30 |
Modifications to the Flight Safety Awareness Program |
12/14/00 |
|
00-31 |
Implementation of New Contract Provisions |
12/15/00 |
|
01-1 |
777 Over 12-Hour Flights |
1/5/01 |
|
01-2 |
Chicago Honolulu Augmentations |
1/5/01 |
|
01-3 |
New Hire First Officer |
1/12/01 |
|
01-4 |
Bump Notification and Training Notification Charges |
1/17/01 |
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01-5 |
Annual Vacation Bidding for Pilots Surplussed Out of a Closing Domicile |
1/17/01 |
22-B-
Notwithstanding Paragraph A above, the followingLetters of Agreement, which address retirement and insurance
issues, remain in effect to the extent that each is not modified by
one or more of the subsequent Letters listed herein or by the
2000 Pilot Agreement:
Letters Date Signed
|
81-3 |
AS & D Supplemental |
8/14/81 |
|
83-5 |
Preexisting Conditions Restrictions |
5/27/82 |
|
82-8 |
Pension Plan |
06/24/82 |
|
83-1 |
Pension Plan Program Modifications |
02/24/83 |
|
83-6 |
Pension Plan Program Modifications |
07/12/83 |
|
83-7 |
Pension Plan Modifications |
08/01/83 |
|
84-2 |
S & P 500 Index |
09/10/84 |
|
85-10 |
Pension Program Modifications |
06/15/85 |
|
86-2 |
Pension Agreement |
10/16/86 |
|
89-1 |
A & B Plan Amendments per Settlement of Civil Action Nos. 84C5013 and 85C3755 Letter of Agreement to Revise Certain Aspects of the Pilots' Directed Account |
05/23/89 |
|
|
Retirement Income Plan |
06/02/88 |
Page 241
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|
Letter of Agreement to Revise Certain Aspects of the Pilots' Directed Account Retirement Income Plan |
02/08/90 |
|
91-1 |
Adoption of the 5th and 6th Amendment To DAP |
02/12/91 |
|
91-9 |
Relating to Medical, Dental and Flexible Spending Account |
05/09/91 |
|
91-11 |
Relating to Pension Program Modifications |
05/09/91 |
|
91-12 |
Relating to Maximum Qualified Plan Eligible Compensation |
05/09/91 |
|
92-8 |
Relating to the Pilot Disability Income Plan |
12/21/92 revised 12/17/97 |
|
93-1 |
Relating to Partial Periodic Distribution From the DAP |
03/01/93 revised 03/11/93 |
|
94-4 |
Benefit Calculations The Employee Stock Ownership Plan ("ESOP") And Related ESOP Documentation Adopted in Connection with the 1994 ESOP Transaction United Air Lines, Inc. Pilots' Fixed Benefit Retirement Plan as amended through the 20th Amendment Relating to Student Pilot Benefits |
7/12/94
12/21/95 05/02/97 |
|
97-13 |
Definition of Earnings for Permanently Grounded Pilots Relating to Retiree Medical Mediation Settlement |
08/12/97
10/31/97 |
|
99-1 |
Relating to Medical Coverage for Permanently Grounded Pilots and Eligible Dependents |
01/22/99 |
|
99-2 |
Relating to Medical Coverage for Deceased Pilots' Surviving Eligible Dependents |
01/22/99 revised, 05/07/99 |
|
|
United Air Lines, Inc. Pilots' Directed Account Retirement Income Plan as amended and restated effective as of September 1, 1982, as amended through The 14th Amendment thereto The Administrative Employee Waiver |
9/22/99 10/28/99 |
Page 242
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|
The Payment of ESOP Divided and Dividend Equivalents |
10/29/99 |
|
|
UAL Corporation Supplemental ESOP as amended through the 9th Amendment |
10/29/99 |
|
|
UAL Corporation ESOP as amended through the 10th Amendment |
4/28/00 |
|
|
Relating to Domestic Partner Benefits |
xx/xx/xx |
22-C- The Agreement shall become effective as of April 12,
2000, except as provided in Letter 00-XX (Implementation
Schedule).
22-D- This Agreement shall continue in full force and effect
until September 1, 2004 and shall renew itself without change
each succeeding September 1 thereafter, unless written notice
of intended change is served in accordance with Section 6, Title
I, of the Railway Labor Act, as amended (the "Act"), by either
party at least two hundred seventy (270) days prior to
September 1, 2004 or any year thereafter upon written notice of
either party thereto. In the event a new tentative collective
bargaining agreement has not been concluded by June 1, 2004
(or June 1 of any year thereafter if applicable), and the services
of the National Mediation Board (the "Board") have not
previously been invoked, the parties will no later than June 1,
2004 (or June 1 of any year thereafter if applicable) jointly
invoke the services of the Board under Section 5 of the Act and
jointly request that the Board release the parties no later than
September 1, 2004 (or September 1 of any year thereafter if
applicable).
IN WITNESS WHEREOF, the parties have signed this Agreement this
26th day of October, 2000.
Page 243
WITNESS: FOR UNITED AIR LINES, INC.
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/s/ Ed Del Genio |
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/s/ Charles H. Vanderheiden |
/s/ William P. Hobgood William P. Hobgood Senior Vice President |
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/s/ Peter R. Davis |
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|
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/s/ Robert C. Sannwald |
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/s/ Thomas M. Sullivan |
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WITNESS: |
FOR THE AIR LINE PILOTS IN THE SERVICE OF UNITED AIR LINES, INC. |
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/S/ J. Stephen Smith |
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/s/ Larry D. Schulte |
/s/ Duane E. Woerth Duane E. Woerth, President Air Line Pilots Association, International |
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/s/ Steven L. Senegal |
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/s/ Hal E. Stepinsky |
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/s/ F.C. Dubinsky F.C. Dubinsky, Chairman UAL-MEC |
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/s/ Wendy J. Morse |
Page 244
This Page Intentionally Left Blank.
Page 54
ALPA-PAC
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AGREEMENT |
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between |
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UNITED AIR LINES, INC. |
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and |
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THE AIR LINE PILOTS |
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in the service of |
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UNITED AIR LINES, INC. |
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as represented by |
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THE AIR LINE PILOTS ASSOCIATION, INTERNATIONAL |
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THIS AGREEMENT is made and entered into in accordance with the provisions
of the Railway Labor Act, as amended, by and between UNITED AIR LINES,INC.
(hereinafter referred to as the "Company") and the AIR LINE PILOTS
ASSOCIATION, INTERNATIONAL (hereinafter referred to as the "Association").
W I T N E S S E T H:
It is mutually agreed:
A. The Company agrees to deduct a monthly contribution to the Air Line Pilots
Association Political Action Committee (referred to herein as "ALPA-PAC") from
the pay of each pilot who voluntarily authorizes such contributions on the forms
provided for that purpose by ALPA-PAC (referred to herein as "Check-Off
Forms").
B. The language of those forms shall be as follows:
TO: United Air Lines, Inc.
I hereby authorize and direct the Company named above to deduct
$_______________of my gross earnings per month and to remit that amount to
the Air Line Pilots Association Political Action Committee (ALPA-PAC).
This authorization is voluntarily made based on my specific understanding that:
The signing of this authorization card and the making of these voluntary
contributions are not conditions of membership in the Union or of employment by
my employer;
Any guideline amount suggested by ALPA-PAC or its representatives is only a
suggestion and I may contribute more or less and will not be favored or
disadvantaged by the Union for doing so;
I may refuse to contribute without reprisal; and
Page 55
ALPA-PAC, which is connected with the Air Line Pilots Association, International,
Use the money it receives solely for making contributions to and expenditures for
candidates for federal elected offices.
This authorization shall remain in full force and effect until revoked in writing by
me, pursuant to the provisions of the Agreement between United Air Lines, Inc.
and the Air Line Pilots Association, International.
I further certify that I am either a United States citizen or a foreign national
lawfully admitted to the United States for permanent residence as defined by
section 101(s) (20) of the Immigration and Nationality Act (8 U.S.C. 1101(s) (20)).
Name __________________________
File Number _____________________
Signature _______________________
Date____________________________
C. All Check-Off Forms will be submitted through the Chairman of the Master
Executive Council of the Association who will forward the original signed copy to
the Payroll Accounting Manager, Executive Offices, Chicago, Illinois. A properly
executed Check-Off Form, filed before the 15th of any month, will become
effective the 1st of the month following its receipt by the Payroll Section of the
Accounting Department, Chicago, Illinois. Illegible or improperly executed forms
will be returned to the Chairman of the Master Executive Council of the
Association.
D. Any notice of revocation as set forth in the Check-Off Form must be in writing,
signed by the employee and delivered by certified mail, addressed to the Payroll
Accounting Manager, United Air Lines, Inc., P.O. Box 66100, Chicago, Illinois
60666, with a copy to the Chairman of the Master Executive Council as soon as
processed through Company payroll procedures. Check-Off Form and notices so
received by the Company will be stamp-dated on the date received and will
constitute notice to the Company of the date received and not when mailed.
E. Deduction of a pilot's contribution shall be made each month provided there is
a sufficient balance due the pilot at the time after all other deductions authorized
by the pilot or required by law (including money claims of the Company and the
Credit Union) have been satisfied. Within a reasonable time after the second
regular paycheck issued each month, the Company will remit to ALPA-PAC a
check in payment of all contributions collected for that month pursuant to
outstanding and unrevoked Check-Off Forms, together with a list of the names of
those pilots for whom contributions were deducted and the amount deducted for
each such pilot.
Page 56
F. A pilot who has executed a Check-Off Form and (1) who resigns from the
Company; (2) who is laid off; or is (3) otherwise terminated from the employ of
the Company shall be deemed to have automatically revoked his assignment as
of the date of such action and if he (1) is rehired; (2) is recalled; or (3)
reemployed, further deductions of ALPA-PAC contributions will be made only
upon execution and receipt of another Check-Off Form.
G. It will be the Association's responsibility to verify apparent errors in deduction
of ALPA-PAC contributions before contacting the Company Payroll Accounting
Manager.
H. United Air Lines, Inc. shall be held harmless and indemnified by the
Association for any claims which may be made by the pilot or pilots by virtue of
the wrongful application and misapplication of any of the terms of this Section.
I. The Association shall pay the Company the reasonable costs incurred in
implementing and maintaining this Section.
J. The Association hereby certifies to the Company that:
J-1- No assignment and authorization will be transmitted to the Company
hereunder which was obtained by the Association under the twice-yearly
solicitation provisions of Section 441b.(b)(4)(B) of Title 2 of the United States
Code;
J-2- All funds transmitted to the League hereunder shall be used solely in
connection with federal elections.
IN WITNESS WHEREOF, the parties have signed this Agreement this 8th day of
June, 1983.
|
FOR UNITED AIR LINES, INC. |
|
|
WITNESS: /s/ C.W. Thomson |
/s/ D. L. Pringle David L. Pringle Vice President Industrial Relations |
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WITNESS: |
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/s/ R.D. Hall |
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/s/ J.R. Brace |
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/s/ W.C. Brashear |
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/s/ D.A. Clark |
FOR THE AIR LINE PILOTS IN THE SERVICE OF UNITED AIR LINES, INC. |
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/s/ H.E. Stepinsky /s/ John P. Ferg |
/s/ Henry A. Duffy Henry A. Duffy, President Air Line Pilots Association, International |
Page 57
Voluntary Contributions UAL Pilots Charitable Foundation, Inc.
AGREEMENT
between
UNITED AIR LINES, INC.
and
THE AIR LINE PILOTS
in the service of
UNITED AIR LINES, INC.
as represented by
THE AIR LINE PILOTS ASSOCIATION,
INTERNATIONAL
THIS AGREEMENT is made and entered into in accordance with the provisions
of the Railway Labor Act, as amended, by and between UNITED AIR LINES,
INC. (hereinafter referred to as the "Company") and the AIR LINE PILOTS
ASSOCIATION, INTERNATIONAL (hereinafter referred to as the "Association").
W I T N E S S E T H:
It is mutually agreed:
During the life of this Pilot Agreement, the Company will deduct from the pay
of each pilot the dollar amount authorized by the pilot and such deduction shall
constitute a contribution to the United Airlines Pilot's Charitable Foundation, Inc.
provided that such pilot voluntarily executes the following agreed upon form
which will be prepared and furnished by the Association and will be known as the
United Airlines Pilots' Charitable Foundation "Check-Off Form":
ASSIGNMENT AND AUTHORIZATION FOR VOLUNTARY CONTRIBUTIONS
TO THE UNITED AIR LINES PILOTS' CHARITABLE FOUNDATION, INC.
I, ________________________________, hereby authorize and direct United Air
Lines, Inc. to deduct $________per month of my gross earnings as a contribution
To the United Airlines Pilots' Charitable Foundation, Inc. Such amount so
deducted is hereby assigned to the United Airlines Pilots' Charitable Foundation,
Inc. This assignment and authorization may be revoked by me in writing at any
time. A copy of any such revocation will be sent to the Chairman of the Master
Executive Council.
Signature of Employee _______________________________________
Street Address _____________________________________________
Page 58
City ______________________________________________________
File Number ________________________________________________
Organization (Domicile)_______________________________________
B. All Check-Off Forms will be submitted through the Chairman of the Master
Executive Council who will forward the original signed copy to the Payroll
Accounting Manager, Executive Offices, Chicago, Illinois. A properly executed
Check-Off Form, filed before the 15th of the month, will become effective the 1st
of the month following its receipt by the Payroll Section of the Accounting
Department, Chicago, Illinois. Illegible or improperly executed forms will be
returned to the Chairman of the Master Executive Council of the Association.
C. Any notice of revocation as set forth in the Check-Off Form must be in writing,
signed by the employee, and delivered by certified mail, addressed to the Payroll
Accounting Manager, United Air Lines, Inc., P. O. Box 66100, Chicago, Illinois
60666, with a copy to the Chairman of the Master Executive Council as soon as
processed through Company payroll procedures. Check-Off Form and notices so
received by the Company will be stamp-dated on the date received and will
constitute notice to the Company of the date received and not when mailed.
D. Deduction of the contributions shall be made from all paychecks issued each
Month provided there is a sufficient balance due the employee at the time after
all other deductions authorized by the employee or required by law (including
money claims of the Company and the Credit Union) have been satisfied. Within
a reasonable time after the second regular paycheck issued each month, the
Company will remit to the United Airlines Pilots' Charitable Foundation, Inc. a
check in payment of contributions collected for that month pursuant to
outstanding and unrevoked Check-Off Forms.
E. An employee who has executed a Check-Off Form and who has been (1)
transferred or promoted to a job not covered by the Agreement; (2) who resigns
from the Company; (3) who is laid off; or is (4) otherwise terminated from the
employ of the Company shall be deemed to have automatically revoked his
assignment as of the date of such action and if he (1) transfers back or returns to
a job covered by the Agreement; (2) is rehired; (3) is recalled; or (4) reemployed,
further deductions of Association dues will be made only upon execution and
receipt of another Check-Off Form.
F. United Air Lines, Inc. shall be held harmless and indemnified by the
Association for any claims which may be made by the employee or employees by
virtue of the wrongful application and misapplication of any of the terms of this
Agreement.
G. This Agreement shall become effective as of the date of signing and shall be
subject to changes in the same manner as specified in Section 22 of the Pilots'
Employment Agreement.
Page 59
IN WITNESS WHEREOF, the parties have signed this Agreement this 12th day
of July, 1983.
WITNESS:
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/s/ Charles W. Thomson |
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/s/ D.L. Seay |
FOR UNITED AIR LINES, INC. |
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/s/Joseph A. Hertrich |
/s/ David L. Pringle David L. Pringle Vice President Industrial Relations |
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/s/ G.L. Andrews |
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/s/ M.L. Gerkin |
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WITNESS: |
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/s/ R.D. Hall |
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/s/ J. R. Brace |
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/s/ W.C. Brashear |
FOR THE AIR LINE PILOTS IN THE SERVICE OF UNITED AIR LINES, INC. |
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/s/ D.A. Clark |
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/s/ H.E. Stepinsky |
/ s/ Henry A. DuffyHenry A. Duffy, President Air Line Pilots Association, International |
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/s/ J.P. Ferg |
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Page 60
Age 60
AGREEMENT
between
UNITED AIR LINES, INC.
and
THE AIR LINE PILOTS
in the service of
UNITED AIR LINES, INC.
as represented by
THE AIR LINE PILOTS ASSOCIATION,
INTERNATIONAL
THIS LETTER OF AGREEMENT is made and entered into in accordance with
the provisions of the Railway Labor Act, as amended, by and between UNITED
AIR LINES, INC. (hereinafter referred to as the "Company") and the AIR LINE
PILOTS ASSOCIATION, INTERNATIONAL (hereinafter referred to as the
"Association").
W I T N E S S E T H:
It is mutually agreed:
In accordance with the provisions of the Letter of Agreement, dated June 27,
1979, which appears on pages 157-158 of the 1981 Pilot Agreement, and as
directed by order of the United States District Court, dated May 31, 1983, the
parties have met and have agreed upon the following modifications to the
Agreement. This Agreement replaced the Letter of Agreement, dated January
19, 1983.
A-1- Second Officers shall be permitted to work beyond age 60.
A-2- Any Captain or First Officer or International Relief Pilot shall be eligible
to bump, in accordance with his seniority, a Second Officer assignment which
he intends to assume upon reaching age 60. This bump must be made not
less than ninety (90) days prior to his 60th birthday.
A-3- Captains or First Officers or International Relief Pilots exercising a bump
in accordance with Paragraph A-2 above, must first provide the Company with
evidence that he possesses a valid Flight Engineer's certificate or that he has
satisfactorily passed the written portion of the FAA Flight Engineer Turbojet
Exam prior to or at the time he exercises his bump.
A-4- Pilots who bump into an assignment under the provisions of Paragraph
A-2 above, shall not be activated into a Second Officer's assignment prior to
reaching age 60.
Page 61
A-5- One (1) year prior to age 60, all active pilots shall be required to sign a
statement of intent to inform the Company of his retirement or non-retirement
plan upon reaching the normal retirement age. Any pilot who fails to submit a
statement of intent will be treated as if he intends to continue working beyond
age 60. Such pilot shall be eligible for involuntary vacation assignments under
the provisions of Section 11-E-1 of the Agreement. A pilot who has indicated the
intention of retiring at age 60 and who, within the year prior to reaching age 60,
changes his mind, shall have any accrued vacation due in the current vacation
year liquidated under the provisions of Section 11 of the Agreement to the extent
possible in that vacation year. Such pilot shall be eligible for the application of
this provision of Section 11-E-3 of the Agreement even if it increases the amount
of unliquidated vacation. Any vacation not liquidated shall be paid to him at his
current rates at the end of that vacation year. Once a pilot reaches age 60, he
shall no longer be entitled to defer liquidation of accrued vacation.
A-6- Any flight officer utilizing the provisions of this Letter of Agreement shall be
paid at the rate of pay associated with the assignment held at age 60 until the
first of the scheduled month following his 60th birthday, or upon activation of a
Second Officer assignment whichever occurs first. Thereafter, he shall be paid
at the appropriate Second Officer rate as specified in Section of the Agreement.
A-6-a- Any Captain who is receiving B-747 or DC-10 Captain pay under the
provisions of the Letter of Agreement, dated August 14, 1981, which appears
on page 167-169 of the 1981 Pilot Agreement, shall become ineligible for such
pay upon being activated into an assignment awarded under the provisions of
Paragraph A-2 (effective 9/23/89 B-747-400 added to this paragraph).
A-6-b- Any pilot receiving B-737 Captain pay under the provisions of the TCA
Letter of Agreement, dated June 23, 1982, shall lose such pay should he
become ineligible to hold a Captain or First Officer assignment.
A-7- Should a reduction in force become necessary, any flight officer who is
surplusage under the provisions of Section 8 of the Agreement who cannot
qualify for another assignment under the provisions of Section 8-K-2-a shall be
furloughed, notwithstanding the provisions of Section 7 of the Agreement.
A-8- Two official Flight Officer Seniority Lists shall be published annually. One
shall be called the Pilot Eligibility Seniority List and shall contain the names of all
flight officers who are eligible to be awarded Captain and First Officer
assignments. The second list shall be called the Second Officer Eligibility
Seniority List and shall contain the names of all flight officers who are eligible to
be awarded Second Officer assignments.
Page 62
The Second Officer Eligibility Seniority List shall recognize the special rights of
those who have been designated "Career Second Officers" under the Letter of Agreement, dated June 11, 1963.
A-9- The provisions of this Letter of Agreement were implemented by
Agreement on June 10, 1983 and shall, thereafter, run concurrently with the 1981
Pilot Agreement; however, should the FAA establish a retirement age
requirement for Second Officers or should the jury decision in the Age 60 suit be
reversed upon appeal, the provisions of this Letter of Agreement shall terminate
and the parties shall meet immediately to determine the appropriate
action.
A-10- Should any government action alter the age requirements for continued
employment as a flight deck crew member, the parties will meet promptly to
modify the Agreement to conform to said action.
IN WITNESS WHEREOF, the parties have signed this Letter of Agreement this
1st day of March, 1984.
|
|
FOR UNITED AIR LINES, INC. |
|
WITNESS: |
/s/ David L. Pringle David L. Pringle Vice President Industrial Relations |
|
/s/ Charles W. Thomson |
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WITNESS: |
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|
/s/ W.C. Brashear |
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/s/ J.R. Brace |
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/s/ D.A. Clark |
FOR THE AIR LINE PILOTS IN THE SERVICE OF UNITED AIR LINES, INC. |
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/s/ W. H. Nelson |
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/s/ H.E. Stepinsky |
/s/ Henry A. Duffy Henry A. Duffy, President Air Line Pilots Association, International |
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/s/ R.D. Hall |
|
Revised as of this 36th day of October, 2000.
/s/ William P. Hobgood
William P. Hobgood
Senior Vice President
People
/s/ F.C. Dubinsky
Captain F.C. Dubinsky
Chairman
UAL/ALPA Master Executive Council
Page 63
Charter Operation
CHARTER
SUPPLEMENTAL AGREEMENT
between
UNITED AIR LINES, INC.
and
THE AIR LINE PILOTS
in the service of
UNITED AIR LINES, INC.
as represented by
THE AIR LINE PILOTS ASSOCIATION,
INTERNATIONAL
THIS SUPPLEMENTAL AGREEMENT is made and entered into in accordance
With the provisions of Title II of the Railway Labor Act, as amended, by and
between UNITED AIR LINES, INC. (hereinafter referred to as the "Company") and the AIR LINE PILOTS in the service of UNITED AIR LINES, INC. as
represented by the AIR LINE PILOTS ASSOCIATION, INTERNATIONAL
(hereinafter referred to as the "Association").
W I T N E S S E T H:
WHEREAS, the Company and the Association desire to supplement their Pilots'
Employment Agreement, June 15, 1985 (hereinafter referred to as the
"Agreement") by providing certain rates of compensation, rules and working
conditions with respect to the Company's Charter Operation.
NOW, THEREFORE, is understood and agreed that:
Domestic Charters
Due to operational and pilot scheduling problems associated with domestic
charters, pilots involved in the domestic charter operation shall be scheduled in
accordance with the provisions of Section 5 of the Agreement with the exception
of Section 5-G-1- a, 5-G-2-a and 5-H-5.
A-1- For scheduling purposes, an on-duty period of thirteen hours and thirty
minutes (13:30) will be the maximum.
A-2- Pilots in the actual performance of their assignment will have a
maximum on-duty period of fifteen (15) hours, which may be exceeded with
pilot concurrence.
Page 64
A-3- The provisions of Paragraphs A-1 and A-2 above shall apply only to
those duty periods which contain a domestic charter segment. A duty period
which contains both a domestic charter segment and a regularly scheduled
line segment shall be scheduled under the provisions of the Agreement.
A-4- Notwithstanding Paragraph A-1 above, the provisions of Section 5-G-1-
a-(1)-(b) of the Agreement are applicable to any duty period scheduled under
this Supplemental Agreement when such application will provide a greater
duty time.
A-5- Notwithstanding Paragraph 5-B-3 of the Agreement, Mainland-Hawaii-
Mainland or Hawaii-Mainland-Hawaii charter flights may be scheduled in one
duty period.
International Charters
Notwithstanding the provisions of Section 5-B-2, 5-B-3, 5-B-4 and 5-B-8, 5-G-1-a
and 5-G-2-a and 20-J, operations which involve an international charter segment
may be conducted under the following provisions.
B-1- Trip sequences which include an international charter segment(s) may
Be scheduled under the provisions of Paragraph A above at Company option.
B-2- Duty periods which include an international charter segment(s) shall not
be scheduled to exceed fourteen (14) hours on duty, and in the actual
operation, may not exceed sixteen (16) hours without pilot concurrence.
B-3- Duty periods which include an international flight segment(s) may be
scheduled with up to twelve (12) hours of flight time, as follows:
B-3-a- One (1) flight segment may be scheduled up to twelve (12) flight
hours.
B-3-b- Two (2) flight segments may be scheduled up to a total of eleven
(11) hours.
B-3-c- Three (3) flight segments may be scheduled up to a total of ten (10)
hours.
B-4- Duty periods composed of deadhead and/or ferry segments only,
which immediately precede or follow a duty period containing an
international charter segment(s) may be scheduled in accordance with
Paragraphs B-2 and B-3 above.
Page 65
B-5- Notwithstanding Paragraph B-2 above, the provisions of Section 5-G-1-
a-(1)-(b) of the Agreement are applicable to any duty period scheduled under
this Supplemental Agreement when such application will provide a greater
duty time.
B-6- A pilot shall be considered to be on duty from one (1) hour before the
scheduled departure of his trip until fifteen (15) minutes after the actual
termination of his trip unless a customs check is involved at the end of the duty
period, in which case he shall be on duty until thirty (30) minutes after the
actual termination of the last flight segment in that duty period. If the required
reporting time exceeds one (1) hour, such time shall be considered as duty
time. This Paragraph shall not apply in the application of Paragraph 5-G-1-b-
of the Agreement.
B-7- Duty periods scheduled under Paragraph B of this Supplemental
Agreement and which contain eight (8) or fewer hours of flight time shall
provide rest breaks in accordance with Section 5-G-1-c and 5-G-2-c of the
Agreement.
B-8- Duty periods scheduled under Paragraph B of this Supplemental
Agreement and which contain more than eight (8) hours of flight time shall
provide a minimum of twelve hours and forty-five minutes (12:45) free from
duty.
B-9- Notwithstanding Paragraphs 7 and 8 above, a pilot who has flown
twenty (20) or more hours during any consecutive forty-eight (48) hours or
twenty-four (24) or more hours during any seventy-two (72) consecutive hours
will be provided eighteen (18) hours free from duty.
B-10- Notwithstanding Paragraphs B-2, B-3 and B-4 above, if a duty period
contains a regularly scheduled line segment, then Section 5 of the Agreement
shall apply to that duty period.
B-11- The Company may designate certain equipment domiciles to which it
expects to assign international charter flying. Pilots at these domiciles will be
advised of the potential existence of charter assignments and may indicate
their availability for such assignments. Those pilots who have volunteered and
who are on reserve will be required to maintain current passports, other
documents and inoculations as required by the Company. The Company will
not limit the number of volunteers in a designated equipment domicile,
however, should insufficient pilots volunteer, the Company may designate
additional pilots, as required, in inverse seniority order.
Page 66
B-12- Open international charter pairings may be assigned to qualified
reserve pilots as follows:
B-12-a- Assign to first (1st) available reserve in FIFO, without interference
with day(s) off.
B-12-b- Offer to available reserves who would require a day off change, in
seniority order.
B-12-c- Assign to an available reserve who requires the fewest number of
days off changed, in inverse seniority order. In the application of this
provision, days off will be restored in the current month, if possible, but may
be restored in a following month, if necessary. Such day off restoration will
not be deferred beyond the first month in which it is possible to restore the
day(s) off.
C. Non-Critical MAC Operations
Non-critical MAC may be flown under the applicable section of this Supplement
Agreement or under the provisions of the Agreement if they can be so scheduled.
D. Charter Line of Flying
D-1- Pairings containing Domestic Charter flying and/or Domestic Non-
Critical MAC flying which are subject to the provisions of the Supplemental
Agreement, may be placed in lines of flying when sufficient flying time exists to
construct lines.
D-1-a- Such lines of flying will be constructed to the monthly maximum of
credited time in effect for the equipment type for that schedule month.
D-1-b- One scheduled DSL pairing may be inserted into such line of flying
for the purpose of maximizing the time within the line.
D-1-c- Lines of flying constructed under this paragraph shall comply with
all applicable provisions of Section 20 of the Agreement.
D-2- Pairings containing International Charter flying and/or International Non-
Critical MAC flying will be placed in lines of flying when sufficient flying time
Exists to construct lines under the provisions of Section 20 of the Agreement.
D-2-a- Such lines of flying will be constructed to the monthly maximum of
credited time in effect for the equipment type for that schedule month.
Page 67
D-2-b- One Domestic Charter pairing or one scheduled DSL pairing may
be inserted in this line(s) for the purpose of maximizing the time within the
line.
D-2-c- Lines of flying constructed under the provisions of this paragraph D-
2 may contain "buffer" days, in addition to the trip pairings and days off.
Such buffer days shall be used to protect the charter assignment, as
described below.
D-2-c-(1)-
Buffer days may be scheduled between trip days and days off for thepurpose of allowing the trip pairing scheduled within that period to depart or
arrive earlier or later than originally shown without impacting upon the assigned
flight officer's obligation to fly the trip.
D-2-c-(2)-
Lines will be constructed to the monthly maximum of creditedtime in effect for that schedule month in the assigned equipment type.
D-3- Lines of flying constructed under this provision shall be clearly identified
and made available for preferencing in accordance with Paragraph 20-D of the
Agreement at the same time as other lines of flying for the equipment type and
domicile involved.
D-4- Line(s) of flying constructed under these provisions shall be awarded in
accordance with Section 20-D of the Agreement, except that the flying contained
in a line which is not awarded during the initial award process shall revert to open
flying.
D-5- A pilot awarded a line of Domestic Charter and/or Domestic Non-Critical
MAC flying shall be treated as a lineholder in accordance with the applicable
paragraphs of Section 20 of the Agreement.
D-6- A pilot awarded a line of International Charter and/or International Non-
Critical MAC flying will be treated as a lineholder during the assigned schedule
month with the following exceptions:
D-6-a- Any change in departure or arrival times of the trip segments in the
assigned pairings which changes the day(s) on which the pairing operates
shall not affect the pilot's responsibility to fly the pairings, provided the change
does not extend the trip into the pilot's day-off pattern.
D-6-b- If a pilot is relieved of responsibility for a pairing that was in his
assigned line of flying as a result of a cancellation, or a change which now
projects the trip into the pilot's day-off pattern, or a consolidation of two or
more changed pairings, the pilot may be assigned to open flying or reserve
duty during the period of days between the day-off periods associated with the
cancelled pairing in the following order:
Page 68
D-6-b-(1)-
An International Charter and/or International Non-Critical MACpairing.
D-6-b-(2)-
A Domestic Charter and/or Domestic Non-Critical MAC pairing.D-6-b-(3)- A regular scheduled pairing.
D-6-b-(4)- Reserve standby.
D-6-c- To insure pilot notification of any changes to his scheduled flying, the
lineholders awarded this International line(s) of flying will be required to be
telephone available between 1800 and 2000 CST (CDT) on the evening of the
last day off prior to each assignment period. The pilot will also be responsible
for keeping System Crew Scheduling advised of his whereabouts during the
days between his day-off pattern when he is not scheduled to fly.
D-6-d- If a pilot is assigned training of less than five (5) days on days-off, or
on buffer days, he will be governed by the provisions of Paragraph 9-C of the
Agreement.
E. Should unusual circumstances require, charter assignments which comply
only with the appropriate FARs, may be made to pilots who volunteer for the
specific assignment. When any such assignments are contemplated, the MEC
Chairman will be advised.
F. Qualified lineholder pilots may be assigned domestic charter or international
charter pairings under the provisions of Section 20-G-10 and Section 20-H of the
Agreement.
G. It is understood that, at the Company's option, the provisions of this
Supplemental Agreement may be used to schedule pilots for any domestic or
international charter operations, notwithstanding the provisions of the Basic
Agreement, the International Supplement and the U2 Supplement. In the event
an international operation scheduled under the provisions of this Supplement
produces a "Sunrise Service" schedule, the provisions of the Settlement Letter
for SB 93-9, dated July 30, 1993 shall be implemented.
Page 69
IN WITNESS WHEREOF, the parties have signed this Supplemental Agreement
this 15th day of June, 1985.
WITNESS:
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/s/ C.W. Thomson |
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/s/ J.R. Samolis |
FOR UNITED AIR LINES, INC. |
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/s/ R. Gangwal /s/ G.L. Andrews |
/s/ D.L. Pringle David L. Pringle Vice President Employee Relations |
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/s/ D. F. Rensvold |
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WITNESS: |
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/s/ W.C. Brashear |
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/s/ J.R. Brace |
FOR THE AIR LINE PILOTS IN THE SERVICE OF UNITED AIR LINES, INC. |
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/s/ D.A. Clark |
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/s/ W.A. Nelson |
/s/ H.A. Duffy Henry A. Duffy President Air Line Pilots Association, International |
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/s/ H.E. Stepinsky |
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/s/ R.D. Hall |
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Revised as of July 12, 1994.
/s/ John R. Samolis
John R. Samolis
Vice President Employee Relations
/s/ Roger D. Hall
Roger D. Hall, Chairman
UAL/ALPA Master Executive Council
Page 70
Resolution of Cockpit Conflicts
UNITED AIRLINES
LETTER OF AGREEMENT
Dear Fellow Pilots:
In the interest of providing the highest standards of professionalism and safety
among the pilots of United Airlines...and to insure that all pilots are treated fairly,
consistently and effectively...the Company and the Association have agreed to
the following procedure for the resolution of cockpit conflicts. United Airlines
traditional authority and responsibilities regarding proficiency and air safety shall not in any way be altered by the terms of this letter.
1. When a professional standards problem arises, whatever the source, which
precipitates a cockpit conflict, and is brought to the attention of the Association
by a pilot, the Association will act as follows:
1-a- The individuals involved will be encouraged to discuss the matter
privately in a forthright and reasoned manner, in an attempt to settle their
dispute.
1-b- Failing this, the local Professional Standards Committee members will
elicit both sides of the story, generally by telephone, and counsel both parties at
a peer level; (e.g.) a Captain committee member will call a Captain involved, a
First Officer committee member will call a First Officer involved, and a Second
Officer member will call a Second Officer involved. Again, agreement to resolve
the dispute will be sought.
1-c- Should this fail, the pilots involved will be invited to a Local Professional
Standards Committee meeting. After each pilot has had the opportunity to
present his or her view of the matter, the committee will seek a commitment from
the parties to end the conflict and work together in the future constructively and
without dissension.
1-d- Should one of the pilots refuse to participate the Association will advise
the Company of the conflict and request the Company to encourage all involved
parties to attend the Professional Standards Committee meeting.
2. When a Professional Standards problem (as defined above) is brought to the
attention of the Company in the first instance, at management's discretion, the
Company will refer that issue and the parties involved to the Local Professional
Standards Committee. Each pilot will be encouraged to attend the committee's
meeting to settle their dispute in a reasoned, no-fault manner.
Page 71
Successful resolution of a problem will produce a committee report to the
Company that states the matter is resolved. Lack of successful resolution will
produce a report to the Company that the Local Professional Standards
Committee is unable to be of assistance. Complete confidentiality regarding the
committee's meeting will be maintained and further, the Company agrees not to
cite a pilot's involvement with the Professional Standards Committee in any
subsequent disciplinary proceeding.
Should successful resolution of a problem not be attained within 30-day time
period, the Company will then be free to take whatever action it deems
necessary to resolve the issue within the framework of the agreement.
Either party to this agreement reserves the right to cancel it upon giving a 30
Days written notice. Accepted and agreed to this 3rd day of August, 1987.
/s/ L. W. Barry /s/ F.C. Dubinsky
Lloyd W. Barry F.C. Dubinsky, Chairman
Senior Vice President Master Executive Council
Flight Operations Air Line Pilots Association
United Airlines, Inc.
Page 72
Unimatic Terminal
UNITED AIRLINES
August 4, 1987
Captain F. C. Dubinsky, Chairman
UAL/ALPA Master Executive Council
Air Line Pilots Association, International
10700 W. Higgins Road, Suite 200
Rosemont, IL 60018
Dear Captain Dubinsky:
Recent discussion between the parties have resulted in the following
understanding:
United will install a Unimatic terminal with an associated printer in the MEC
office for the use of MEC representatives and staff. This terminal will be
authorized Mode 41 access and will be used in the same manner and for the
same purpose as the "public" pilot sets located at each domicile.
This terminal is being provided to the UAL-MEC by the Company in
recognition of the mutual benefits which it can provide; however it may be
removed if the Company concludes that the presence of an Unimatic terminal in
the MEC office may compromise United's computer and/or Corporate security or
for any other reason may no longer be mutually beneficial.
The direct cost of operating this terminal will be borne by the Association,
however the Company will retain ownership and perform all required
maintenance of the equipment.
It is understood that this agreement shall establish no precedent and will not
be cited in the future for any purpose. If this accurately reflects our
understanding, please sign and return two (2) copies of this letter for our files.
Very truly yours,
/s/ S. E. Tallent
Stephen E. Tallent
Special Labor Counsel
Accepted and agreed to this
4th day of August, 1987.
/s/ F. C. Dubinsky
F. C. Dubinsky, Chairman
UAL/ALPA Master Executive Council
Page 73
Pilot Instructors
LETTER OF AGREEMENT
between
UNITED AIR LINES, INC.
and
THE AIR LINE PILOTS
in the service of
UNITED AIR LINES, INC.
as represented by
THE AIR LINE PILOTS ASSOCIATION,
INTERNATIONAL
THIS LETTER OF AGREEMENT is made and entered into in accordance with
the provisions of Title II of the Railway Labor Act, as amended, by and between
UNITED AIR LINES, INC. (hereinafter referred to as the "Company") and the AIR
LINE PILOTS in the service of UNITED AIR LINES, INC. as represented by the
AIR LINE PILOTS ASSOCIATION, INTERNATIONAL (hereinafter referred to as
the "Association").
W I T N E S S E T H:
WHEREAS, for the purpose of improving the training environment and the
efficiency of operation while maintaining the highest quality training, the training
staff organization will be revised and the training related responsibilities will be
assigned to the new management position of Standards Captain and the new
non-management position of Pilot Instructor, and
WHEREAS, it is the intent of the parties that the position of Training Check
Airman (TCA) be phased out and those duties will be assumed by the new
positions of Standards Captains and Pilot Instructors, and
WHEREAS, the Association represents the interest of the line pilots who will
Function as Pilot Instructors,
THEREFORE BE IT RESOLVED, it is mutually agreed:
The Pilot Instructors will be pilots represented by the Association with line
seniority numbers.
1-a- Pilots selected must have the highest qualifications.
1-b- The Association will be advised of and have an opportunity to make
recommendations concerning the required qualifications and the selection
process.
Page 74
1-c- A pilot selected to be a Pilot Instructor will be required to complete the
following minimum actual line experience which may consist of either First
Officer or Second Officer flying, as appropriate:
1-c-1- Initial PI (new hire pilot):
The pilot will be required to have 3 months line experience on the airplane
on which he will instruct, prior to serving as a PI.
1-c-2- Initial PI (current line pilot):
A-3-b-(1)- If the pilot will be a PI on the same airplane on which he is
serving on the line, no additional line experience is required prior to his
serving as a PI.
A-3-b-(2)- If the pilot will be a PI on an airplane different from the
airplane on which he is serving on the line, he will be required to have 75
hours (including IOE) on the airplane on which he will instruct, prior to
serving as a PI.
1-c-3- Current or former PI:
A-3-c-(1)- If the equipment change for the PI is from a 3-pilot airplane to
a 2-pilot glass cockpit airplane and the PI has no previous glass cockpit
experience, he will be required to have 75 hours (including IOE) on the
airplane on which he will be instructing, prior to serving as a PI on that
airplane.
A-3-c-(2)- If the equipment change for the PI is from a 3-pilot airplane to
a 2-pilot non-glass cockpit and the Pi has no previous 2-pilot crew
experience, he will be required to have 50 hours (including IOE) on the
airplane on which he will be instructing, prior to serving as a PI on that
airplane.
A-3-c-(3)- If the equipment change for the PI is from a non-international
airplane to an international airplane and the PI has no previous
international experience, he will be required to have 75 hours (including
IOE) on the airplane on which he will be instructing, prior to serving as a
PI on that airplane.
This line of flying under sub-paragraph (1), (2), and (3) above will be in the
aircraft in which the individual will be initially instructing. Such flying shall
be performed as a reserve (at the Pilot Instructor's request, he may
remain number one (1) on the FIFO list) or, should the Company desire
the individual to fly specific trips during this three (3) month period, such
flying shall be on a displacement basis.
Page 75
2.
2-a- The Pilot Instructor will perform the following duties and assignments:
2-a-1- Conduct instruction in the simulator for Captains, First Officers,
Second Officers and International Relief Pilots. This instruction will include
transition training, Proficiency Check warm-up and requalification training.
2-a-2- Conduct First Officer certification checks.
2-a-3- Conduct Second Officer certification checks.
2-a-4- Conduct BIRC instruction.
2-b- Additionally, a Pilot Instructor may perform the following duties and
assignments in his assigned equipment:
2-b-1- Serve as a fill-in crew member for transition training.
2-b-2- Serve as a fill-in crew member for Proficiency Check warm-up (2nd
day).
2-b-3- Serve as a fill-in crew member for Proficiency checks when he is the
only pilot available.
2-b-4- Serve as a Second Officer in the aircraft under the following
conditions:
B-2-d-(1)- Only Pilot Instructors who volunteer for such assignments will
be eligible to be assigned to line Second Officer flying.
B-2-d-(2)- Prior to performing the assignment, the Pilot Instructor will
receive whatever refresher training he deems necessary.
B-2-d-(3)- Such line flying as a Second Officer will not replace nor offset
the line flying required under the terms of this Agreement.
B-2-d-(4)- No action will be taken against a Pilot Instructor who declines
a Second Officer flight assignment.
2-b-5- Perform Ground School instruction as assigned.
2-b-6- Be assigned special projects as needed.
3. Pilot Instructors will be required to bid and hold a line assignment in addition to
their TK assignment.
4.
4-a- Pilot Instructors will maintain line familiarity in the equipment to which
they are assigned as a P.I. through annual open flying on the line as a First
Officer for a minimum of 24 duty periods and up to 36 duty periods. Open
flying will be offered to Pilot Instructors who request it under Section .
Additionally, Pilot Instructors may trade into and pick up open Shuttle and
Mainline trips immediately after all pilots are accommodated as the result of
the trip trade monthly rundown. They may not be assigned or pick up
additional flying until 1200 on the day prior to departure. Pilot Instructors who
Page 76
request additional flying beyond the open flying maximum, above, may on their
scheduled days off be scheduled for unlimited line flying on a displacement
basis.
4-b- To effect an efficient policy for Pilot Instructor pick up of open flying that
provides for a wide range of experience by flying from various domiciles and
minimizes the overuse of the Denver domicile assigned open flying, the
following guidelines have been established:
4-b-1- P.I.'s in conjunction with Crew Management (CM) will to the extent
possible be assigned open flying from all domiciles.
4-b-2- On P.I. work days open flying in Denver may be picked up by P.I.'s
on a pro-rata basis as the assigned Denver flying relates to system flying in
the fleet. Notwithstanding the above limitation, if there is no Denver pilot in
that particular fleet and seat requesting 20-H-3 12 hours or less prior to
scheduled departure of an I.D., a P.I. may pick up this open flying as an
exception to the proportional limitation.
4-b-3- P.I. deadheading to and from a domicile will not be considered a
duty period as defined by the 36 duty period annual limitation.
4-b-4- Duty periods which consist entirely of deadheading will not count
toward satisfying the minimum 24 duty period requirement.
4-b-5- Any combination of P.I. duties and flying duties performed within a
single duty period must conform to the Section 5-G duty period time
limitations. For scheduling purposes, this requirement is not waivable.
5. The rate of pay for pilot instructors shall be determined as follows:
5-a- The rate of pay for a pilot in years 1 through 5 of pilot longevity who is
permanently assigned as a pilot instructor shall be not less than the 81 hour
salary for the line assignment which he holds, plus 15%; but not more than the
81 hour salary for B-747 First Officer at the 6th year of longevity. The
Company may determine that the override percentage for all pilot instructors in
years 1 through 5 will be greater than 15%, but in no case will it produce
greater earnings than the 81 hour salary for B-747 First Officer at the 6th year
of longevity.
A pilot instructor beyond the 5th year of pilot longevity shall be paid the 81
hour salary for his line assignment or the 81 hour salary for 747 First Officer at
the 6th year, whichever is less.
Page 77
5-b-
Pilot Instructors shall begin receiving PI pay in accordance with thefollowing:
5-b-1- Pilots who will be instructing as PIs in the equipment type for which
they are currently trained will begin receiving Pilot Instructor pay upon
reporting to the Flight Center.
5-b-2- Pilots who require transition training for the equipment in which they
will be instructing will begin receiving PI pay upon beginning their IOE after
completing the required transition training, or 45 days after reporting to
DENTK, whichever is earlier, provided they successfully complete the
training necessary to become a PIlot Instructor.
5-c- When a Pilot Instructor leaves the Flight Center to return to his line of
flying assignment his Pilot Instructor pay shall continue until he begins IOE for
his line assignment, at which time he shall be paid at the rate associated with
his line assignment.
6. Pilot Instructor schedules shall have a minimum of twelve (12) calendar days
free of duty per month. For trainee/instructor continuity, Pilot Instructors shall be
allowed, at their option, to trade their days off; however, in no event shall a Pilot
Instructor receive less than twelve (12) actual calendar days free of duty during
the month.
7. Pilot Instructors will accrue, preference and liquidate vacations as per Section
11 of the Agreement.
8. When a pilot transfers from and to his Pilot Instructor assignment he will be
entitled to a pilot paid move, in accordance with the provisions of Section 10 of
the Agreement, except when the line assignment is DENFO.
9. The provisions of Section 1, 2, 4, 6, 7, 8, 11, 12, 13, 14, 15, 16, 17, 18, 19, 21
and 22 of the Agreement shall apply to Pilot Instructors. The provisions of
Section 9 shall apply when the Pilot Instructor is functioning as a trainee. The
provisions of Section 5 and 20 shall apply during any line flying. All pilot benefits
shall apply to Pilot Instructors.
Page 78
10. Vacations
Vacations for PI's will be bid and awarded according to Section 11 of the
Agreement between ALPA and United Airlines. The vacation year PI's is from
May 1 to April 30. Newly employed PI's accrue one day of vacation for each full
calendar month of continuous employment with the Company during the
remainder of the vacation year after the date of their initial employment, provided
that the first vacation for PI's initially employed on or after May 1 of any year will
not be due or payable except between May 1 and April 30 of the succeeding
vacation year. After these provisions have been complied with, a PI will receive
sixteen vacation days each year, provided his/her employment has been
continuous. Beginning in the vacation year following the year in which a PI
completes the continuous service shown below, s/he will be entitled
to the following number of vacation days:
______________________
Years of Vacation
Service Days
_______________________
5 23
12 30
20 37
25 44
_______________________
In order to insure that a PI receives a total number of days off in a given month
that approximates what a line pilot could expect, the following maximum number
of regular days off (RDO's) can be scheduled as part of a vacation period:
Page 79
__________________________________________________________
|
|
|
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Days________________________________________________________________
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1 |
0 |
16 |
3 |
|
2 |
0 |
17 |
5 |
|
3 |
0 |
18 |
5 |
|
4 |
0 |
19 |
6 |
|
5 |
0 |
20 |
6 |
|
6 |
0 |
21 |
6 |
|
7 |
0 |
22 |
6 |
|
8 |
1 |
23 |
6 |
|
9 |
1 |
24 |
6 |
|
10 |
2 |
25 |
7 |
|
11 |
2 |
26 |
8 |
|
12 |
3 |
27 |
9 |
|
13 |
3 |
28 |
10 |
|
14 |
3 |
29 |
11 |
|
15 |
3 |
30 |
12 |
This maximum number of RDO's which can be assigned to a PI's vacation period
applies to all vacation awards, including annual awards, monthly awards, and
involuntary assignments.
In addition, a PI may request specific days off prior to or following a vacation
period, up to and including the full allocation of monthly RDO's remaining. The
DENTK Scheduling Office will honor that request if at all possible. PI requests
will be honored based on line pilot seniority.
Annual Preferencing: Vacation bid books are located in the Scheduling Office
and are arranged in order of seniority. Vacations are awarded in order of
seniority within each fleet based on the PI's preference.
All PI's will be eligible to preference the allocated vacation periods for the
following year based on their equipment type as of January 1. If you're entitled to
16 calendar says or more of vacation, you may elect to split your vacation into
not more than two periods during the vacation year, provided that no period is
less than 10 days. if you elect to split your vacation, you'll need to designate your
preference as being for a primary, secondary, or tertiary assignment. You'll be
afforded the opportunity to be awarded your primary and secondary vacation
periods before and tertiary vacations are awarded.
Page 80
Monthly Preferencing: PI's may elect to bid for vacation periods on a monthly
basis. Vacations are awarded in seniority order within each Fleet. PI's awarded
a vacation will be notified of the award not less than 60 days before the first day
of the month in which the vacation period falls. If you don't receive this notice,
you won't be required to take this vacation award. Any vacation periods created
and available within 60 days of the vacation period will be offered in order of
seniority and may be assigned with your concurrence with less than 60 days
notice.
Involuntary Assignments: In the event that there are insufficient preferences
submitted for posted vacation periods, involuntary vacations may be assigned in
reverse order of seniority. Involuntary assignment vacations shall be for a
minimum of ten days or the balance of your vacation credit (if less than ten days).
You must be notified of the date of the involuntary assignment at least 60 days
before the first day of the month in which the vacation period falls, except that
any vacation periods created and available within 60 days of a vacation periods
which are not voluntarily accepted may be assigned in reverse order of seniority
(provided you're given at least 45 days notice prior to the start of the vacation
period).
11. Pilot Instructors will receive expense reimbursement according to the
provisions of Section 4-E-1 of the Agreement when conducting training
assignments at any location other than Denver.
12. The parties will be guided by the terms of the PI guidelines, and these
guidelines will be changed only by mutual agreement of the parties.
13. This Letter of Agreement shall be effective upon signing and shall run
concurrently with the current Basic Pilot Agreement.
Page 81
IN WITNESS WHEREOF, the parties have signed this Letter of Agreement this
20th day of November, 1989.
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FOR UNITED AIR LINES, INC. |
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WITNESS: /s/ G.L. Andrews /s/ T.A. McClone |
/s/ J.R. Samolis John R. Samolis Vice President Employee Relations |
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WITNESS: |
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/s/ T.P. Austin /s/ C.A. Rine |
FOR THE AIR LINE PILOTS IN THE SERVICE OF UNITED AIR LINES, INC. |
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/s/ L.J. Balestra /s/ H.E. Stepinsky |
/s/ Henry A. Duffy Henry A. Duffy, President Air Line Pilots Association, International |
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Revised as of July 12, 1994. |
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/s/ John R. Samolis John R. Samolis Vice President Employee Relations |
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/s/ Roger D. Hall Roger D. Hall, Chairman UAL/ALPA Master Executive Council |
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Further revised as of this 26th day of October, 2000. |
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/s/ William P. Hobgood |
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William P. Hobgood Senior Vice President People |
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/s/ F.C. Dubinsky |
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Captain F.C. Dubinsky |
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Chairman |
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UAL/ALPA Master Executive Council |
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Page 82
Drug and Alcohol Testing
UNITED AIRLINES
January 3, 1990
Captain F. C. Dubinsky, Chairman
UA/ALPA MAster Executive Council
Air Line Pilots Association, International
10700 West Higgins Road, Suite 200
Rosemont, Illinois 60018
Dear Captain Dubinsky:
As the result of discussions between the parties, it has been agreed that:
When a pilot is required to provide a urine or breath specimen at the conclusion
of his assigned trip sequence in order to comply with the Federally mandated
random drug testing program, his duty period just completed shall be extended
by 15 minutes beyond the duty time provided by the application of Section 5-G of
the Agreement or of Section 3-N of the International Supplement, whichever is
applicable.
Such duty time credit shall be included in the computation of each pilot's pay
credit for that trip sequence; however, this 15 minutes credit shall not preclude a
pilot from being tested.
It is understood that the 15 minutes of duty time credit provided above shall
Constitute full compensation for participation in the drug testing program
regardless of variations in the actual amount of time spent by each pilot in
accomplishing this procedure.
Sincerely,
/s/ J. R. Samolis
John R. Samolis
Vice President Employee Relations
Accepted and agreed to this
3rd day of January, 1990.
/s/ F. C. Dubinsky
Captain F. C. Dubinsky, Chairman
UA/ALPA Master Executive Council
Page 83
Revised as of this 26th day of October, 2000.
/s/ William P. Hobgood
William P. Hobgood
Senior Vice President
People
/s/ F.C. Dubinsky
Captain F.C. Dubinsky
Chairman
UAL/ALPA Master Executive Council
Page 84
International
PREAMBLE
WHEREAS, the Company and the Association desire to supplement their Pilots'
Employment Agreement, signed October 26, 2000 (hereinafter referred to as the
''Agreement'') by providing certain rules and working conditions with respect to
the Company's international flying to and within the Pacific Basin, Europe and the
British Isles, Central and South America and India.
NOW, THEREFORE, it is mutually agreed and understood by and between the
Parties to this Supplemental Agreement that the rules and working conditions
stipulated herein shall be in full force and effect on the Company's international
flying to and within the Pacific Basin, Europe, and the British Isles, Mexico,
Central and South America and India provided that all provisions of the
Agreement, except as specifically modified or excepted by this Supplemental
Agreement, shall be applicable also to this flying.
SECTION 1- DEFINITIONS
A. International Flight Segments
A-1- International Atlantic flight segment for the purpose of this Supplemental
Agreement means (1) any flight segment which is operated between any point
In the United States or Canada on the one hand and any point in Europe or
the British Isles on the other hand, and (2) any flight segment which is
operated between points within Europe and/or the British Isles.
A-2- International Pacific flight segment for the purpose of this Supplemental
Agreement means (1) any flight segment which is operated between any point
In the United States or Canada on the one hand and any point in the Pacific
Basin on the other hand, and (2) any flight segment which is operated between
points within the Pacific Basin.
A-3- International Central and South American flight segments for the
purpose of this Supplemental Agreement means (1) any flight segment which
is operated between any point in the United States or Canada on the one hand
and any point in Central America, Mexico and South America on the other
hand, and (2) any flight segment which is operated between points within
Central America, Mexico and South America.
B. An international trip pairing is any trip pairing which contains an international
segment.
Basic Crew
C-1- Three Pilot Aircraft:
Page 85
A ''Basic Crew'' on a three (3) pilot aircraft shall consist of a Captain, a First
Officer, and a Second Officer.
C-2- Two Pilot Aircraft:
A ''Basic Crew'' on a two (2) pilot aircraft shall consist of a Captain and a First
Officer.
D. Augmented Crew
D-1- Three Pilot Aircraft
An ''Augmented Crew'' shall consist of a Captain, a First Officer with an ATP
and type rating in the aircraft, a Second Officer, and an International relief
Pilot.
D-2- Two Pilot Aircraft
An ''Augmented Crew'' shall consist of a Captain, and (2) First Officers with
AT's and type ratings in the aircraft.
E. Double Augmented Crew
Two Pilot Aircraft
A ''Double Augmented Crew'' shall consist of a Captain and three (3) First
Officers with ATP's and type ratings in the aircraft.
F. Augmented Trip
An ''Augmented Trip'' shall mean any trip sequence which includes at least one
duty period scheduled with an augmented or double augmented crew.
G. International Relief Pilot (IRP)
An International relief Pilot shall be qualified to provide relief, on those flights on
which he is required, at the Captain, First Officer and Second Officer stations.
Such qualifications shall be established by the Company to permit him to
accomplish:
G-1- Pre-flight, post-flight and enroute First Officer duties, not including take-
off or landing of the aircraft.
G-2- All Second Officer duties.
G-3- Any other duties assigned to him by the Company or the pilot in
command.
Page 86
H. Flight Deck Duty
''Flight Deck Duty'' shall mean the flight time spent at an FAA required or
contractually required operating station in the cockpit, which does not include any
time spent in a cockpit observer seat(s) below FL 180.
I. Pacific Crossing
A "Pacific Crossing" is any flight segment across the Pacific Ocean that exceeds
Eight (8) hours scheduled flight time.
J. Atlantic Crossing
An ''Atlantic Crossing'' is any international flight segment operated across the North Atlantic to or from Europe or the British Isles. Additionally, any flight
segment to or from Anchorage into the Pacific Basin is considered an Atlantic
Crossing.
K. Pacific Basin
All current and future route authority, including all of the PAA acquisition, used or
unused, served by United Airlines in the Pacific; not to include route authority
between mainland United States and Hawaii.
SECTION 2- EXPENSES AND TRANSPORTATION
A. Expenses for International flying will be as provided in Section 4-A of the
Agreement, except that pilots assigned to International flying shall receive, in
addition to the expenses provided for in Section 4-A, fifty cents ($0.50) for each
hour away from home.
B.
B-1- Transportation of pilots on United Airlines will be booked in First Class, if
available. If First Class is unavailable, Business Class will be booked. If both
First and Business Class are unavailable, coach may be booked. Regardless
of class of service reserved, pilots may be upgraded to First Class, if available
at departure time.
B-2- All NRPS pilot reservations will be booked as non-smoking. Upon check-
in a pilot who requests smoking will be accommodated in the smoking section
on the same basis as revenue passengers.
Page 87
B-3- Transportation of pilots on any airline other than United Airlines will be
booked in Business Class, if available. If Business Class is unavailable, First
Class will be booked. If both First and Business Class are unavailable, coach
may be booked for any single segment which is scheduled for three (3) hours
or more, non-stop. All other offline transportation shall be Coach.
B-4- Upon request, the parties will meet to consider information and
recommendations which ALPA may have regarding the suitability of a foreign
carrier for deadheading crews.
B-5- The Company will provide ground transportation to layover hotels at all
international layover locations. Transportation to and from the hotel will be
provided in a full sized air-conditioned vehicle exclusively for cabin and cockpit
crew use. Additionally, if the cockpit crew is at the pickup location,
transportation will leave no later than thirty (30) minutes after actual arrival of
the trip unless a later departure is agreed to. Hotel pickup times will be
arranged to have the pilots arrive at the airport in sufficient time to report for
duty at their assigned report time. Upon request, the parties will meet to
consider information and recommendations which ALPA may have regarding
the suitability of ground transportation at specific international layover
locations.
B-6- If a room at the scheduled layover hotel is not available within thirty (30)
minutes of scheduled check-in time, the affected pilots may seek other
accommodations and will be reimbursed by the Company.
C. Should isolated cases of unusual expenses be encountered by a pilot which
the expense allowance will not normally cover, the Company will reimburse the
pilot for such expenses upon receipt of a documented Company expense
form.
SECTION 3- HOURS OF SERVICE
Notwithstanding the provisions of Section 5-B-7, 5-B-8, 5-B-9 and 5-B-10, 5-D-4,
5-G-1-a, 5-G-1-b-(1) and 5-G-1-b-(2), 5-G-1-c-(1), 5-G-1-c-(2), 5-G-1-c-(3), 5-G-
1-c-(4) and 5-G-1-c-(5), 5-G-2-a, 5-G-2-b-(1), 5-G-2-b-(2) and 5-G-2-b-(3), 5-G-2-
c-(1), 5-G-2-c-(2) and ) of the Agreement, the following shall apply to
international trip pairings:
Page 88
A. Pacific Operations
A-1- Two Pilot Aircraft, Basic Crew
A-1-a- Duty time limits of Section 5-G-1-a-(1)-(a) and 5-G-1-a-(1)-(b), 5-G-
1-b-(3), 5-G-2-a-(1), 5-G-2-a-(2) and 5-G-2-a-(3) shall apply to all duty
periods that do not contain a Pacific crossing.
A-1-b- Maximum flight time shall not exceed eight (8) hours of scheduled
flight time in any single duty period.
A-2- Two Pilot Aircraft, Augmented Crew, Single Segment
A-2-a- Maximum scheduled duty time shall not exceed thirteen and one
half (13 1/2) hours. Actual duty time shall not exceed fifteen and one half
(15 1/2) hours.
A-2-b- Maximum flight time shall not exceed twelve (12) hours of
scheduled flight time in any single duty period and no pilot will be required
to exceed eight (8) hours flight deck duty in any single duty period.
A-3- Two Pilot Aircraft, Double Augmented Crew Single Segment
A-3-a- Maximum scheduled duty time shall be seventeen and one half (17
1/2) hours. Actual duty time shall not exceed nineteen and one half (19 1/2)
hours.
A-3-b- Maximum flight time shall not exceed sixteen (16) hours of
scheduled flight time in any single duty period and no pilot will be required to
exceed eight (8) hours flight deck duty in any single duty period.
A-4- Two Pilot Aircraft, Double Augmented Crew, Two (2) Segments
A-4-a- Maximum scheduled duty time shall be fifteen and one half (15 1/2)
hours. Actual duty time shall not exceed seventeen and one half (17 1/2)
hours.
A-4-b - Maximum flight time shall not exceed twelve and one-half (12 1/2)
hours of scheduled flight time in any two (2) flight segment duty periods and
no pilot will be required to exceed eight (8) hours flight deck duty in any
single duty period.
A-4-c- In the application of 3-A-4-a and 3-A-4-b above, the first segment
must be scheduled to depart between 0800 and 1500 per 3-A-8 below. In
the event the Company desires to schedule departures outside this 0800-
1500 window, Association concurrence will be required.
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A-5- Three Pilot Aircraft, Basic Crew
A-5-a- Duty limits of Section 5-G-1-a-(1)-(a) and 5-G-1-a-(1)-(b), 5-G-1-b-
(3),5-G-2-a-(1), 5-G-2-a-(2) and 5-G-2-a-(3) shall apply to all duty periods
that do not contain a Pacific Crossing.
A-5-b- Maximum flight time shall not exceed eight (8) hours of scheduled
flight time in any single duty period.
A-6- Three Pilot Aircraft, Basic Crew, Single Segment, Pacific Crossing:
A-6-a- Maximum scheduled duty time shall be twelve (12) hours. Actual
duty time shall not exceed fourteen (14) hours.
A-6-b- Maximum Flight Time
A single flight segment of up to ten and one-half (10 1/2) hours may be
scheduled.
A-6-c- Notwithstanding the limits of sub-paragraphs a and b above, if a
Single flight segment consisting of a Pacific crossing of up to twelve (12)
Hours maximum flight time is scheduled in a duty period, that duty period
may be scheduled for one and one-half (1 1/2) hours more than the
scheduled actual flight time of the segment, but will not be scheduled to
exceed thirteen and one-half (13 1/2) hours. The actual duty time limits in
these instances will be two (2) hours more than the scheduled duty time.
A-6-d- Notwithstanding the crew complement requirements above, if a
segment in a pairing is scheduled to depart after 1500 and before 0800, as
defined in paragraph 3-A-8 below, and contains more than 10 hours of flight
time, an augmenting crew member will be required and the operation will
become subject to the provisions of 3-A-7 below. Further, no augmenting
crew member will be required on the last Pacific crossing in a pairing as a
result of the application of this sub-paragraph.
A-7- Three Pilot Aircraft, Augmented Crew, Pacific Crossing, Single Segment
A-7-a- Maximum scheduled duty time shall not exceed sixteen (16) hours.
A-7-b- Maximum actual duty time shall not exceed eighteen (18) hours.
A-7-c- Notwithstanding the limits of sub-paragraphs a & b above, if a single
flight segment consisting of a Pacific Crossing of up to sixteen (16) hours
maximum flight time is scheduled in a duty period that duty period may be
scheduled for one and one-half (1 1/2) hours more than the scheduled
actual flight time of the segment, but will not be scheduled to exceed
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seventeen and.one-half (17 1/2) hours. The actual duty time in these
instances will be two (2) hours more than the scheduled limit.
A-7-d- Notwithstanding the single segment limitation above, two (2) flight
segments may be scheduled in excess of eight (8) hours and up to twelve
and one-half (12 1/2) flight hours. In the event the Company intends to
schedule flying under this provision which exceeds eight (8) hours,
Association concurrence will be required.
A-8- The first two (2) duty periods in an international Pacific trip pairing which
include international flying shall be based on the pilot's home domicile time.
Subsequent duty periods in an International trip pairing shall be based on
the local time which is in effect at the point of origin of the duty period.
Applicability of duty period length and on-duty credit provisions shall be
based on the time which is in effect at the point of origin of the duty period
as defined above.
B. Atlantic Operations
B-1- Two Pilot Aircraft, Basic Crew
B-1-a- Maximum duty time
Duty time limits of Section 5-G-1-a-(1)-(a) and
5-G-1-a-(1)-(b), 5-G-1-b-(3), 5-G- 2-a-(1), 5-G-2-a-(2) and 5-G-2-a-(3) shall
apply to all duty periods that do not contain an Atlantic crossing.
B-1-b- Maximum flight time
Eight (8) hours of scheduled flight time shall be the maximum scheduled in
any single duty period.
B-2- Two Pilot Aircraft, Augmented Crew, Single Segment Atlantic Crossing:
B-2-a- Maximum scheduled duty time shall not exceed thirteen and one
Half (13 1/2) hours. Actual duty time shall not exceed fifteen and one half
(15 1/2) hours.
B-2-b- Maximum flight time shall not exceed twelve (12) hours of
Scheduled flight time in any single duty period and no pilot will be required
to exceed eight (8) hours flight deck duty in any single duty period.
B-2-c- A pilot may be scheduled, in the final duty period of a trip pairing, to
operate a one (1) stop westbound flight scheduled to depart at or after 0800
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local time from points in Europe and scheduled to arrive by 1700 local time
at a point in North America.
B-2-d- Notwithstanding the single segment limitation above, a pilot may be
scheduled to fly one additional segment in a duty period after an Eastbound
Atlantic crossing which is scheduled to depart from his domicile after 0800,
provided the scheduled arrival time of that second segment is not later than
2100 home domicile time.
B-3- Two Pilot Aircraft, Double Augmented Crew, Single Segment, Atlantic
Crossing.
B-3-a- Maximum duty time
Fifteen (15) hours scheduled, seventeen (17) hours actual.
B-3-b- Maximum flight time
Thirteen and one-half (13 1/2) hours scheduled and no pilot will be required
to exceed eight (8) hours of flight deck duty in any single duty period.
B-4- Three Pilot Aircraft, Basic Crew
B-4-a- Duty time limits of Section 5-G-1-a-(1)-(a) and 5-G-1-a-(1)-(b), 5-G
-1-b-(3), 5-G-2-a-(1), 5-G-2-a-(2) and 5-G-2-a-(3) shall apply to all duty
periods that do not contain an Atlantic Crossing.
B-4-b- Maximum flight time shall not exceed eight (8) hours of scheduled
Flight time in any single duty period.
B-5- Three Pilot Aircraft, Basic Crew, Single Segment, Atlantic Crossing:
B-5-a- Maximum scheduled duty time shall be twelve and one half (12 1/2)
hours, actual duty time shall not exceed fourteen and one half (14 1/2)
hours.
B-5-b- Maximum Flight Time: A single flight segment of up to eleven (11)
Hours may be scheduled.
B-5-c- Notwithstanding the limits of Paragraphs 3-B-5-a and 3-A-5-b
above, if a single flight segment of more than eleven (11) hours and up to
twelve (12) hours is scheduled in a duty period, that duty period may be
scheduled for one and one-half (1 1/2) hours more than the scheduled
actual flight time of the segment, but will not be scheduled to exceed
thirteen and one-half (13 1/2) hours. The actual duty time in these instances
will be two (2) hours more than the scheduled duty time.
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B-5-d- Notwithstanding the crew complement requirements above, if a
segment in a pairing is scheduled to depart after 1500 and before 0800, as
defined in paragraph 3-B-11 below, and contains more than ten (10) hours
of flight time, an augmenting crew member will be required and the
operation will become subject to the provisions of 3-B-6 below. Further, no
augmenting crew member will be required on the last Atlantic crossing in a
pairing as a result of the application of this sub-paragraph.
B-6- Three Pilot Aircraft, Augmented Crew, Single Segment, Atlantic
Crossing:
B-6-a- Maximum scheduled duty time shall be fourteen and one half (14
1/2) hours, actual duty time shall not exceed sixteen and one half (16 1/2)
hours.
B-6-b- Maximum Flight Time: A single flight segment of up to twelve (12)
Hours may be scheduled.
B-6-c- Notwithstanding the limits of Paragraphs 3-B-6-a and 3-B-6-b
above, if a single flight segment consisting of an Atlantic Crossing is
scheduled in a duty period that duty period may be scheduled for one and
one-half (1 1/2) hours more than the scheduled actual flight time of the
segment, but will not be scheduled to exceed fifteen and one-half (15 1/2)
hours. The actual duty time in these instances will be two (2) hours more
than the scheduled duty time.
B-7- Three Pilot Aircraft, Augmented Crew, Atlantic Crossing, Two Segments:
B-7-a- Maximum scheduled duty time shall be thirteen and one half (13
1/2) hours, actual duty time shall not exceed fifteen and one half (15 1/2)
hours.
B-7-b- Maximum flight time shall not exceed twelve (12) hours of
Scheduled flight time in any single duty period.
B-7-c- A pilot may be scheduled, in the final trip pairing, to operate a one
(1) stop westbound flight scheduled to depart at or after 0800 local time
from points in Europe and scheduled to arrive by 1700 local time at a point
in North America.
B-7-d- A pilot may be scheduled to fly one additional segment in a duty
Period after an Eastbound Atlantic crossing which is scheduled to depart
from his domicile after 0800, provided the scheduled arrival time of that
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second segment is not later than 2100 home domicile time.
B-8- For the purpose of schedule preparation no other flying will be
scheduled in a duty period which contains an Atlantic crossing except as
provided in Section 3-B-2-c, and 3-B-2-d, and 3-B-7-c and 3-B-7-d, above.
Notwithstanding the segment limitations above, an additional segment may
be assigned in the actual operation as a result of diversions due to fuel,
mechanical, or weather as long as the assignment conforms to the flight
time and duty time limits of the original assignment.
B-9- A pilot shall not be scheduled to fly an Atlantic crossing scheduled in
Excess of eight (8) hours, in either direction, within sixteen (16) hours of
completing such a crossing.
B-10- International Atlantic trip pairings shall not be scheduled in excess of
Six (6) duty periods nor include more than four (4) Atlantic crossings.
B-11- The first two (2) duty periods in an international Atlantic trip pairing
Which include international flying shall be based on the pilot's home domicile
time. Subsequent duty periods in an international trip pairing shall be based
on the local time which is in effect at the point of origin of the duty period.
Applicability of duty period length and on-duty credit provisions shall be based
on the time which is in effect at the point of origin of the duty period as defined
above.
C. Central and South America
C-1- Service to and from Central and South America will be scheduled and
Flown under the provisions of this International Supplemental Agreement
whenever the trip pairing contains any segment which exceeds eight hour
flight time and/or any segment which operates south of 15 degrees south
latitude. All other flying will be done under the basic agreement. Further, all
operations conducted to or within Central and/or South America in all series of
B-737, B-727, A319/A320 and B-757 aircraft will be conducted exclusively
under the terms of the ''basic'' Agreement.
C-2- When operated under this International Supplement, the flight and duty
time limitations contained in Section 3-B (ATLANTIC OPERATIONS) of the
International Supplement shall be considered applicable to Central and South
American. operations and all other provisions of the International Supplement
Currently applicable to Atlantic (or European) operations shall also be
considered applicable to Central and South America. No pairing shall operate
between cities outside of North, Central and South America; including the
Caribbean Islands.
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C-3- The term ''Atlantic Crossing'' when applied to South American service as
described above, shall be understood to mean any flight segment over eight
hours operated between the North American and the South American
continents. Further, ''eastbound'' and ''westbound'' shall be understood to
mean ''away from the U.S.'' and ''returning toward the U.S.'', respectively.
Other references, if any, intended to differentiate between the U.S. and Europe
in the International Supplement shall be understood to mean the U.S. and
South America in the same context.
C-4- In addition to the provisions of Section 3-K-6 of this International
Supplement, upon completion of a trip sequence which includes more than
four (4) duty periods, but which does not also include a South American
crossing (''an Atlantic Crossing'', as described above), a pilot shall receive a
rest at his home domicile of not less than 36 hours. Further, whenever the last
segment in a trip sequence is scheduled to originate in one of the following
listed cities in South America and terminate at any point in the United States,
the pilot will be scheduled to receive no less than twenty (20) hours free from
duty upon completion of the sequence: Rio de Janeiro, Brazil; Sao Paulo,
Brazil; Montevideo, Uruguay; Buenos Aires, Argentina; Santiago, Chile. With
SSC concurrence on a monthly basis, this scheduled twenty (20) hour
minimum may be reduced to eighteen (18) hours. (18 hours is to be
considered the actual minimum.)
C-5- Notwithstanding the provisions of Section 5-G-1-e-(8), 5-G-2-c-(2) and
20-G-8, upon completion of any trip sequence which operates through Central
or South America, all pilots will be scheduled for not less than 14 hours and 45
minutes free from duty. With SSC concurrence on a monthly basis, this
scheduled 14 hours and 45 minutes minimum may be reduced to 12 hours and
45 minutes. (12 hours 45 minutes is to be considered the actual minimum.)
D. Other Regions
For new routes or flying to new markets, the crew make-up and duty limits shall
be the same as for existing international flying of comparable flight segments. At least ninety (90) days prior to initiating such new flying, representatives of the
Company and the Association will meet to resolve operational issues. If the
representatives are unable to reach agreement on any operational issue (s), the
issue (s) will be referred to the Senior Vice-President of Flight Operations and the
MEC Chairman for resolution.
E. Reserve Coverage
The reserve provisions of Section 5 and 20 of the Agreement apply to
International reserve assignments unless excepted in this International
PAGE 95
Supplement. Section 5-G-1- e-(1) and Section 5-G-1-e-(2) are specifically
excepted. The following international reserve system options will be available to
a pilot on reserve status:
E-1- Traditional Option
A reserve who does not contact OPBCM to elect one of the other options
Available under this Paragraph 1 will be a Traditional reserve. A Traditional
reserve will progress normally through the first-in first-out list ("FIFO") until
he receives an assignment in accordance with the provisions of sub-
paragraph 1-a or 1-b below.
E-1-a- Assign to first available reserve on FIFO who can perform the
assignment as scheduled without interference with any scheduled days off.
E-1-b- If unable to make the assignment under "a" above, assign to the
First available reserve on FIFO who requires the fewest number of days off
changed. In the application of this provision, assignments may not begin on a scheduled day off.
E-2- Active Option
E-2-a- A reserve may volunteer to go to the top of the FIFO list. A reserve
Who elects this option will be given an assignment just as though he had
Progressed through the FIFO list in accordance with paragraph 3-E-1-a and
3-E-1-b above.
E-2-b- A reserve's position on the FIFO list under this option will be
determined by the time the reserve blocked in from his last assignment, i.e.,
a reserve who blocked in at 1700 will go ahead of a reserve who blocked in
at 1800 regardless of when the individual pilots volunteer to go to the top of
the FIFO list. This block in time rule (block in time of last flight assignment)
also applies to a reserve coming off days off.
E-2-c- A reserve who volunteers to go to the top of the FIFO list under this
provision and who subsequently does not receive an assignment by 2359 of
the day before his last day of availability shall revert to the position on the
FIFO list he would have been if he had not volunteered to go to the top of
the list.
E-3- Aggressive Option: A reserve may volunteer for an assignment on a
first-come first-served basis pursuant to the following provisions:
E-3-a- All flying that is known to be open more than forty-eight (48) hours
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before the scheduled departure time of the trip will be available for pick-up
between forty-eight (48) hours and forty-four (44) hours before the
scheduled departure time of the trip.
E-3-b- Flying that becomes open between forty-eight (48) hours and twelve
(12) hours before the scheduled departure time of the trip will be available
for pick-up for a period of four (4) hours after the trip opened up or until
twelve (12) hours before scheduled departure time, whichever is earlier.
E-3-c- Trips that become open as a result of short term sick leave will be
available for pick-up as follows:
E-3-c-(1)- The initial trip for which a lineholder places himself on sick leave
will be available for pick-up for a period of up to four (4) hours beginning at
the time the trip becomes open but ending not later than twelve (12) hours
before the scheduled departure time of the trip.
E-3-c-(2)- Any subsequent trip(s) for which the lineholder remains on sick
leave will be available for pick-up not earlier than fourteen (14) hours and
not later than twelve (12) hours before the scheduled departure time of the
trip.
E-3-d- A reserve may pick up a trip equal to or less than his number of
days of availability including Non-Holy Days off before his next scheduled
unavailable days. However, the length of the assigned ID must be not less
than his total days of availability minus one unless he receives OPBCM
concurrence.
E-3-e- A reserve may pick up a trip for which he is projected to be legal
While he is flying a current assignment. If he subsequently is projected to
Become illegal for the trip that he picked up, the trip will be placed back in
open flying and will be picked up by or assigned to another pilot in
accordance with the provisions of this Paragraph E.
E-4- Voluntary Short Call Out Option
E-4-a- A reserve may volunteer to go on a Short Call Out List, on a duty
Period by duty period basis, for assignment to trips that become open five
(5) hours or less before the scheduled departure time of the trip.
E-4-b- Notwithstanding their relative positions on the FIFO list, a reserve
On the Voluntary Short Call Out list will be assigned to a trip that opens up
five (5) hours or less before the scheduled departure time of the trip ahead
of pilots who have elected the Active or Traditional options.
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E-4-c- A reserve who volunteers to be on the Short Call Out list will remain
On that list until midnight of the day on which he volunteered at which time
he will revert to the Traditional option.
E-4-d- A reserve will remain in his original position on the FIFO list during
The time he is a Short Call Out reserve and after he falls off the Short Call
Out list unless he has elected the Active option.
E-4-e- Notwithstanding the provisions of this sub-paragraph E-4, the
Company may assign a trip to a Short Call Out reserve more than five (5)
hours before the scheduled departure time of the trip in accordance with the
provisions of sub-paragraph 3-E-1 above.
E-5- Reserve Assignments
Reserves shall be assigned known open flying in accordance with the
following with the understanding that the term "available for assignment" is
that time following the aggressive pick-up window under paragraph 3-E-3.
E-5-a- Trips that become available for assignment between the hours of
0700 and 2300:
E-5-a-(1)- A trip that becomes available for assignment forty-four (44)
Hours before the scheduled departure time of the trip will be assigned at
that time.
E-5-a-(2)- A trip that becomes available for assignment between forty-four
(44) and twelve (12) hours before the scheduled departure time of the trip
will be assigned as soon as it is available.
E-5-a-(3)- A trip that becomes open less than twelve (12) hours before the
scheduled departure time of the trip will be assigned as soon as it is known
to be open.
E-5-b- Trips that become available for assignment between the hours of
2301 and 0659:
E-5-b-(1)- A trip that becomes available for assignment forty-four (44)
Hours before the scheduled departure time of the trip will be assigned at
that time but the reserve will not be notified of the assignment until 0700.
E-5-b-(2)- A trip that becomes available for assignment between forty-four
(44) hours and twelve (12) hours before the scheduled departure time of the
trip will be assigned twelve (12) hours before the scheduled departure time
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of the trip or at 0700, whichever is earlier.
E-5-b-(3)- A trip that becomes open less than twelve (12) hours before the
scheduled departure time of the trip will be assigned so as to provide the
reserve with a reasonable amount of time to report for the trip or at 0700,
whichever is earlier, unless waiting to make the assignment would cause an
otherwise available reserve to become illegal for the assignment.
E-5-c- In the application of sub-paragraphs 3-E-5-a and 3-E-5-b above the
following shall apply:
E-5-c-(1)-
Assignments will be made to the first reserve, in first-in, first-out order,who is legal for the assignment notwithstanding the fact that waiting to make the
assignment would result in assigning the trip to a reserve who is closer to the top of
the list.
E-5-c-(2)-
If no reserves are legal for an assignment at the time a tripbecomes open or available for assignment, the Company may wait to make
the assignment to a reserve who subsequently will become legal for the
assignment.
E-6- All non-augmented international flying operated under domestic contract
rules of the Agreement, will, for the purposes of the required rest rule, be
treated as domestic flying.
E-7- Reserve Days Off
At equipment domiciles where scheduled international flying is assigned, all
international reserve lines available for monthly preferencing shall include
one period of six (6) consecutive days off in a 30 day month and seven (7)
consecutive days off in a 31 day month which may not be disrupted without
pilot concurrence by an assignment made under the provisions of sub-
paragraph 3-E-1 above. If in the actual operation, a pilot is worked into one
or more of these day(s), such day(s) shall be restored to the pilot in
conjunction with the remaining days off and will not be disrupted without his
concurrence. In addition to this period of six (6) or seven (7) days off, these
international reserve lines will contain either two (2) periods of three (3)
days off or three (3) periods of two (2) days off. Except for the one six (6)
or seven (7) day off period, all other day off periods may be disrupted only
by an international assignment under sub-paragraph 3-E-1 above, or to
correct a month-end legality problem. When such disruption occurs, the
days off lost will be restored in the current month, if possible, but may be
restored in the following month, if necessary. Restoration of days off will not
be deferred beyond the following month unless further deferral is required
due to a conflict with (1) scheduled vacation, (2) training, (3) other schedule
PAGE 99
unavailability or (4) the inability to restore the days off owed without splitting
scheduled trip sequences. Days off will be in minimum groups of two days
provided the Company owes the pilot two or more days off. Single days off
may be restored or added to the pilot's vacation with his concurrence.
E-8- At domiciles where no international flying is assigned, a reserve will not
Be assigned an involuntary 8-L-6 assignment to perform international flying
at another domicile. When a new international domicile is established, the
parties will meet to determine the scheduling process necessary to insure
that the pilots who are assigned international flying meet the required
qualifications and necessary experience levels.
E-9- In the event the scheduled pilot becomes available after a reserve is
assigned and the reserve is no longer needed, the reserve assignment may
be canceled. When assigned to cover for a pilot on sick leave, reserves
shall call OPBCM within eight (8) hours of departure to verify the
assignment.
E-10- When released from duty upon completion of an international
assignment, a reserve will receive a minimum of twenty-four (24) hours free
from duty unless a greater rest is required by other provisions of this
Agreement.
E-11- In those international equipment domiciles that have both scheduled
Pacific and Atlantic DSL flying no reserve pilot will be assigned a trip pairing
containing an international Pacific flight segment within forty-eight (48)
hours of completion of a trip pairing containing an international Atlantic flight
segment. No reserve pilot will be assigned a trip pairing containing an
international Atlantic flight segment within sixty (60) hours of completion of a
trip pairing containing an international Pacific flight segment. No reserve will
be assigned or reassigned to fly in the European and Pacific operation in
any single trip pairing.
F. The Company will not construct lines of flying which contain both one or more
international Atlantic flight segments and one or more international Pacific flight
segments except where full lines of flying cannot be constructed using
exclusively Atlantic or Pacific flying. In the event that both Atlantic and Pacific
flying is scheduled in the same line of flying the time between pairings will not be
less than sixty (60) hours between a pairing containing an international Atlantic
flight segment and a pairing containing an international Pacific flight segment,
and seventy-two (72) hours between a pairing containing an international Pacific
flight segment and a pairing containing an international Atlantic flight segment.
PAGE 100
G. The actual duty time limits of Paragraph A & B above may be extended with
Pilot concurrence.
H. On Basic and Augmented Crews, a Captain may be assigned as a First
Officer subject to the provisions of paragraph of the Agreement.
I. If an augmenting crew member is required on any flight segment in a duty
period, he shall be required on all flight segments in that duty period. If the
scheduled flight time between any two (2) stations is such as to require
augmentation in one direction, then augmentation at the same level shall be
required on that segment when flown in the opposite direction. Notwithstanding, if
a flight requires augmentation due only to the application of 3-A-6-d, or 3-B-5-d,
the augmenting pilot shall be initially assigned to fly a comparable return flight,
but may be reassigned if required by the operation. The augmenting First Officer
who is displaced for any reason will not be assigned to another First officer
position on the trip from which he was displaced, or any other trip, without his
concurrence.
J. Fuel Stops
A fuel stop required for operational reasons on any international trip segment,
Even though pre-planned on a recurring basis, shall not be considered as a
scheduled stop for any reason.
Should a fuel stop occur on any international segment, all pilots assigned to fly
That segment will receive an additional one (1) hour pay in addition to all other
compensation provided upon completion of fueling the crew continues flying
toward their original destination. Fuel stops will not be planned for less than forty
(40) minutes block-to-block. Further, when Dispatch forecasts a fuel stop on any
unaugmented Pacific crossing which was initially scheduled in excess of ten and
one-half (10 1/2) hours flight time, an augmenting crew member will be assigned
provided OPBCM receives at least six (6) hours notice.
K. All flight time, duty time and segment limitations which are applicable to flying
under this Supplemental Agreement shall also apply to deadheading on the
same basis as if it were flying. In the actual operation, assignments which include
a duty period which consists solely of deadheading shall contain no more than
three (3) deadhead segments in that deadhead duty period.
L. International lines of flying may be constructed which contain up to eighty-five
(85) credit hours. Additionally, no pilot will be scheduled or reassigned to perform
more than 4 Pacific or Atlantic crossings in a single trip pairing, or more than 2
Pacific or Atlantic crossings of more than 10 hours in a single trip pairing. The
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Local Schedule Committee, with the concurrence of the SSC and the Company,
may authorize the construction of lines of flying in any equipment domicile to
exceed the applicable monthly schedule limit by up to one (1) hour, provided the extended monthly schedule limit improves the quality of the affected lines.
(Should the monthly schedule limits be increased the actual performance limits
will be increased by an equal amount).
M. Legal Rest Minimums.
M-1- Duty periods which contain eight (8) or fewer hours of flight time shall
provide rest breaks in accordance with Section 5-G-1-c and 5-G-2-c of the
Agreement. Further, in the application of this provision, the occurrence of rest
breaks of 11:30 or less immediately following duty periods in excess of 12:00 will
be limited to one per pairing.
M-2- Duty periods which contain more than eight (8) hours but twelve (12) hours
or less of scheduled flight time shall provide at least eighteen (18) hours free
from duty. With SSC concurrence on a monthly basis, this scheduled eighteen
(18) hour minimum may be reduced to sixteen (16) hours. (16:00 is to be
considered an actual minimum).
M-3- Duty periods which contain more than twelve (12) hours of scheduled flight
time shall provide at least twenty (20) hours free from duty. With SSC
concurrence on a monthly basis, this scheduled twenty (20) hour minimum may
be reduced to eighteen (18) hours. (18:00 is to be considered an actual
minimum).
M-4- If a trip pairing includes duty periods which are scheduled to contain more
than eight (8) hours of actual flight time for a basic crew or more than twelve (12)
hours of actual flight time for an augmented crew, there must be scheduled within
the pairing a crew layover of at least twenty-four (24) hours, block-to-block, at or
before the end of each second long duty period as defined herein.
M-5- In addition to the above, at least sixteen (16) hours free from duty will be
scheduled prior to any duty period which is scheduled to contain more than eight
(8) hours of flight time or deadhead. With SSC concurrence on a monthly basis,
this scheduled sixteen (16) hour minimum may reduced to fourteen (14) hours.
(14:00 is to be considered an actual minimum).
M-6- Upon completion of a trip pairing containing an Atlantic crossing(s) a pilot
shall receive a rest at home scheduled for no less than 24 hours (22 hours shall
be considered an actual minimum which may be further decreased to 21 hours
with pilot concurrence) which shall increase to 36 hours if the trip pairing contains
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more than two duty periods. Further, after completing a pairing containing a
Pacific crossing, a pilot will receive a rest at home of no less than 48 hours,
which shall be extended to 72 hours after a trip pairing containing more than 6
duty periods. Additionally, upon completion of a Pacific trip sequence which
originates and terminates on the mainland and which includes four (4) or more
duty periods, but which does not include a ''Pacific Crossing'', a pilot shall
receive a rest at his home domicile of no less than 48 hours, which shall be
extended to 72 hours after a trip pairing containing more than six (6) duty
periods.
M-7- Pilots flying international trip pairings shall be scheduled for one (1)
twenty-four (24) hour period off in each seven (7) twenty-four (24) hour period
on duty. This time off, if given at an away from domicile point, shall not count
toward minimum days off.
N. Report and Debrief Times
N-1- In order to assist in giving longer notice to reserves and to improve
Schedule integrity, each scheduled pilot shall be required to verify his intention
to fly his next scheduled trip by: (1) following the trip verification procedure in
CMS, which is accessible through Unimatic terminals and may be available
through private PCs via MODEM; or (2) by calling OPBCM on a toll free
number provided by the Company. One of these two actions must be
accomplished not later than 24 hours before the scheduled departure of each
international trip, or upon termination of the pilot's prior trip, if later.
N-2- When the originating segment of a trip sequence is known to be
delayed, the Company will advise the scheduled crew prior to their check in. If
such contact is attempted four (4) or more hours before the original scheduled
departure (or before the last planned departure time of which the pilot(s) was
aware), the pilots on-duty period will not begin until one and one half (1 1/2)
hour before the revised departure. Further, if a delay develops within four (4)
hours of scheduled departure and the pilot(s) is advised of the planned delay
prior to his checking in at the airport, the start of his on duty period may also
be adjusted as above. In the application of this provision, OPBCM will
maintain alternate phone numbers and will follow all reasonable instructions
provided by the pilot to facilitate reaching him.
N-3- Duty time, on a scheduled or actual basis, shall include flight and ground
time. A pilot shall be considered to be on duty one and one-half (1 1/2) hour
before the scheduled departure of his trip until thirty (30) minutes after the
scheduled or actual termination of his trip, whichever is later. If the required
reporting time exceeds one and one-half (1 1/2) hours, such time shall be
considered as duty time. This paragraph shall not apply in the application of
Paragraph 5-G-1-b-(3) of the Agreement. If in the actual operation at certain
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airport locations the thirty (30) minutes debrief time is continually less than
required, the parties agree to meet to discuss increasing the thirty (30) minutes
to a more reasonable amount of time. The schedule and actual duty limits
specified in 3-A, 3-B, 3-C and 3-D above may be increased up to thirty (30)
minutes to accommodate the increased report time under this sub-paragraph
when necessary to accommodate the scheduled flight time of the trip in that
duty period.
O. Minimum Scheduling Provisions and Actual Credit Provisions
Pilots flying international trip pairings shall be covered by the flight time credit
provisions and actual credit provisions of Section 5-G-3 of the Agreement.
Section 5- G-3-g of the Agreement shall not apply.
P. Construction of International Lines & Pairings
P-1- An international trip pairing ID may contain a domestic segment(s).
P-2- An international line of flying may contain no more than two (2) domestic
trip pairings. However, if the total time in the domestic pairings exceeds that of
the international pairings, the total line value will be limited to the applicable
domestic maximum line value. A domestic line of flying may contain
international trip pairings.
P-3- For the purpose of this agreement, the international domicile airports
are: SFO, LAX, IAD, JFK, ORD, HNL, MIA, ANC and SEA. If in the future, DSL
scheduled international flying is assigned to domestic domicile airports other
than listed here, those domiciles shall also be considered international
domicile airports for the purposes of this paragraph 3-P-3. In the event a pilot
is assigned an international pairing which originates at an airport listed in )
which is not also an international domicile airport listed in this sub-paragraph
3, the Company shall provide round trip transportation at the pilot's option
between the international domicile airport and the airport at which the
assignment originates.
SECTION 4- INTERNATIONAL RELIEF PILOT
A. For the purpose of staffing the Pacific operation, IRP's shall be assigned as
follows:
A-1- The position of IRP shall be established as a fourth pilot status on a
three (3) pilot aircraft and shall be bid according to the provisions of Section 8
of the Agreement.
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A-2- Eligibility to be Awarded Vacancies
Notwithstanding Section 8-D of the Agreement, the following requirements must be met for a pilot to be awarded an IRP vacancy.
A-2-a- He must hold a valid flight engineer's certificate and a valid
commercial pilot's license which he is qualified to use under FAR 121.
A-2-b- He must hold an activated Second Officer assignment.
A-2-c- The provisions of Section 8-B-5 shall apply to any Second Officer
who bids and is awarded an IRP vacancy, except for a Second Officer who
is currently assigned to the same equipment type as the IRP assignment. In
this situation, the Second Officer will carry over any remaining freeze to the
IRP assignment.
A-2-d- Notwithstanding Paragraph A-2-b above, a pilot who holds an
Activated assignment as a B-767/757, B-727, B-737, or B-737-300/400/500
First Officer shall also be eligible to be awarded an IRP assignment.
Further, a pilot holding an activated assignment as a DC-10 First Officer or
DC-10 IRP shall be eligible to be awarded a B-747 IRP assignment. A First
Officer awarded an IRP vacancy or a DC-10 IRP awarded a B-747 IRP
vacancy may be required to fill such assignment for a period of twenty-four
(24) months from the first day of the month following the month he was
awarded his bid.
A-3- Lines of flying available for preference and awarded to IRP's shall be
constructed solely of IRP flying.
A-4- IRP's assigned to reserve shall be available for assignment to either IRP
flying or Second Officer positions.
A-5- The IRP's monthly salary will be equal to the basic Second Officer's
salary for the equipment and year of longevity plus twenty-five percent (25%)
of the difference between the First Officer's salary and the Second Officer's
salary for that equipment at twelfth (12th) year rates.
A-6- At B-747 domiciles where no flying is assigned which requires IRP
augmentation, the Company may offer training to Second Officers who
volunteer for the training as IRP's. These IRP-trained B-747 Second Officers
will be used to augment B-747 crews in irregular operations or whenever
occasional, unscheduled IRP coverage is required. When an IRP qualified
Second Officer is assigned to augment a B-747 crew, he shall perform as an
IRP and receive IRP pay for that assignment unless the scheduled Second
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Officer is both senior and IRP qualified. In this case, the scheduled Second
Officer shall have his choice of functioning as an IRP or as a Second Officer.
SECTION 5- FIRST OFFICER ON AUGMENTED CREWS
A. First Officers in equipment domiciles where flying is scheduled which requires
staffing with First Officers who require an ATP and type rating under the
provisions of this Supplemental Agreement and First Officers at all B-747 and B-
747-400 domiciles shall be required to have an ATP rating in the equipment to
which assigned and will be provided training by the Company as follows:
A-1- Incumbent First Officers shall be provided the training normally required
to obtain an ATP rating including, if necessary the training associated with the
written portion.
A-2- In a domicile that becomes an International equipment domicile, all First
Officers who meet the FAR requirements for an ATP will be provided the
required training to fly international trips.
A-3- Notwithstanding the provisions of paragraphs A-1 and 2 above, a pilot
will not be denied a B-767 First Officer bid at a domicile where such flying
exists because he has insufficient flight time to qualify for an ATP and type
rating. Further, during the first eighteen (18) months after the start of
international flying requiring an augmented crew at that equipment domicile, a
non-rated internationally qualified B-767 First Officer may serve as augmenting
pilot until he accumulates sufficient flight time to qualify for an ATP and type
rating.
During any month in which a First Officer flies a trip with an augmented or
double augmented crew, he shall receive, in addition to his regular salary, the
appropriate First Officer Override or International Override in Section 3 of the
Agreement, whichever is greater.
SECTION 6- FOREIGN TEMPORARY DUTY ASSIGNMENTS
A. The Company may designate TDY assignments at Tokyo, Osaka, Sydney,
Auckland, Frankfurt, Paris, London, and Dublin. Prior to the Company
Implementing any temporary duty assignments in the above locations or at any
other mutually agreed to location, the parties will meet to discuss any problems
associated with the filling of the vacancies required for the TDY domicile,
adequate lodging, expenses, and any other relevant issues.
B. Temporary duty assignments will be filled by a preferencing procedure at the
domicile(s) designated by the Company. The number of TDY assignments available
Page 106
from each domestic domicile shall be posted prior to preferencing. Volunteers
from any domicile may be considered, should insufficient pilots preference at the
designated domicile(s).
C. Temporary duty assignments will be posted, preferenced and awarded prior to
the posting of monthly lines of flying for domestic domiciles. All pilots assigned to
a temporary duty domicile shall preference monthly schedules for that temporary
domicile.
D. Should there be insufficient bidders for the TDY assignment, pilots will be
assigned in inverse order of seniority from those pilots at the designated domicile
who have spent the fewest number of months in TDY assignments in the last
twelve (12) months. Under this provision, no pilot will be involuntarily assigned to
a TDY assignment more than two (2) months in any twelve (12) consecutive
months, nor will a pilot be involuntarily assigned to a TDY assignment in
consecutive months without his concurrence.
E. Pilots who have been awarded or involuntarily assigned a temporary duty
assignment will have the option to remain at the TDY assignment for an
additional one (1) or two (2) months if the assignment is still available.
F. Pilots who indicate a desire to remain at the assignment for two (2) months or
more will be entitled to:
F-1- Have his spouse and dependents accompany him to the assignment.
Dependents eligible for pass travel under this provision will be those
Dependents eligible for any pass travel as defined under Company policy
regulation Series 15-9. Dependents of college age who have limited pass
travel eligibility will be eligible for pass travel under this Section.
F-2- Positive space transportation to and from the assignment for his spouse
and dependents.
F-3- When the pilot remains at a TDY assignment in excess of two (2)
months as defined in Section 2-O, the Company will provide one (1) additional
BP-3 transportation for a pilot's spouse and eligible dependents.
G. Pilots who have been awarded a TDY assignment will receive expenses as
provided in Section 4-E of the Agreement and Section 2-A of this Supplemental
Agreement.
H. A pilot will be provided suitable hotel accommodations as specified in the
Agreement. Additionally, if a pilot qualifies for a spouse and/or dependents to be
at the TDY location and he does transport two (2) or more members of his family
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to the TDY location, he shall be provided, at a cost to him not to exceed the rate
paid by the Company, an additional bedroom.
I. The following provisions will be applicable to pilots assigned to temporary duty
(TDY):
I-1- Pilots volunteering for and being awarded a full month or months of TDY
must position themselves to fly the first trip or to be available for the first
reserve availability day in their TDY line.
I-2- To accomplish this, lineholders may have to travel to and from the TDY
assignment outside of their TDY month on days that have previously been
scheduled as vacation days and/or regular days off and Reserves may have to
travel on their vacation days. Further, if a lineholder has a trip in the month prior
to the initial TDY month that would prevent him from positioning himself for his
first scheduled assignment in his TDY line, he shall have his prior month's line
repaired in order to provide the necessary time. In that event, he will be "pay
protected" in that month if the repair would otherwise reduce his pay in that
month. A Reserve who has days off in the prior month that would prevent him
from traveling to and from the TDY assignment to be in position for his first TDY
assignment will have his days off moved so that the necessary travel day(s) will
be reserve work (available) days instead of days off, unless he volunteers to
travel on his days off, in which case he shall have all such lost days off restored
under the provisions of I-4, below. Every reasonable effort will be made to
comply with the reserve pilot's request regarding the rescheduling of his reserve
days off.
I-3- The pilot's travel to and from the TDY assignment shall be subject to the
following:
I-3-a- In order to travel to an initial month's TDY assignment, if the time is
Not already available in the pilot's schedule, he shall be provided enough time so
that he has the opportunity to schedule himself for (1) rest between any duty at
his domestic domicile and the departure time of his flight from his domicile to
the TDY assignment equal to that required by Section 3-M-1 of this International
Supplement, (2) online transportation from his domicile to the TDY assignment
and (3) at least 18 hours off between his scheduled arrival at the TDY
assignment and his first duty. In satisfying the requirements of this sub
paragraph "a" and sub paragraph "b", below, the pilot may be required to travel
on a continuous multi-segment itinerary so long as the en route time of these
flights is not scheduled to exceed eighteen and one-half (18-1/2) hours. If the
pilot schedules himself to arrive at the TDY assignment on a flight that would
provide at least 18 hours off; then, in the actual operation, 16 hours off will be
the applicable minimum.
I-3-b- If the time is not already available in the pilot's schedule to travel to
His home domicile from the final month of the TDY assignment, he shall have his
following month's schedule modified under the month-end conflict provisions of
PAGE 108
Section 5 of the Agreement in order to have enough time to schedule himself
for (1) rest between his last TDY flight assignment and the start of his travel to
his home domicile equal to that required by Section 3-M-1 of this International
Supplement, (2) online transportation to his domicile from the TDY assignment
and (3) at least 36 hours off between his scheduled arrival at his domicile and
his first duty at his domicile. If the pilot has scheduled himself to arrive at his.
domicile on a flight that is scheduled to provide him with at least thirty-six (36)
hours off, 24 hours off shall be the minimum requirement in the actual
operation prior to any assignment at his home domicile.
I-3-c- It is understood that the provisions of "I-3-a" and "I-3-b", above, when
applied in conjunction with the Company's current passenger timetable, will
produce a schedule of rest periods and fight itineraries which may not reflect
the actual arrangements that the pilot elects to use; nonetheless these rests
and flight itineraries will be used (1) to determine what, if any, adjustments are
required to the pilot's line or reserve days off in the months adjoining his TDY
assignment and (2) to determine how many, if any, vacation days or regular
days off need to be restored under paragraph I-4, below. In determining the
number of days lost due to positioning, the departure time of the flight
established in "I-3-a", above, and the arrival time of the flight established in
"I-3-b", above, shall be used to define which days have been lost.
I-3-d- It is further understood that each pilot is required to make his own
travel arrangements and is free to travel during any time that is available to
him without impacting his schedule, after any adjustments that are required
above. If the pilot chooses to travel from or return to a US point other than his
domicile, he will be responsible for his own domestic transportation to and
from the gateway city.
I-3-e- The pilot shall be entitled to expense reimbursement for the period of
TDY under the provisions of Section 4-E-1 of the Agreement and Section 2-A
of this International Supplement, and for the travel time necessary between the
pilots domicile and the TDY assignment and any required en route stopover
during positioning travel between his domicile and the TDY assignment.
Further, if the pilot actually arrives at the TDY assignment early, the Company
will reimburse expenses for up to two (2) calendar days prior to his first flight
assignment or from the first day of the TDY month, whichever is earlier.
I-4- Restoration of days off and vacation days lost due to positioning will be
subject to the following:
I-4-a- Should the pilot lose a vacation day or days outside his TDY period as
a result of positioning himself, the Company will restore the lost vacation
day(s) to the pilot.
Page 109
I-4-b- If a lineholder pilot loses no more than one day off outside the TDY
month due to outbound positioning and/or one day off outside the TDY month
due to return positioning, there will be no restoration of that (those) lost day(s)
off. Any additional days off lost due to positioning will be restored to the pilot,
as described below.
I-4-c- Lost vacation and regular days off will be added to either the pilot's
vacation in the following year or to any remaining subsequent vacation in the
current year, at the pilot's option.
I-4-d- Any restoration of vacation days or regular days off will not entitle the
pilot to any additional vacation splits beyond what the pilot was originally
entitled to under the provisions of Section and 11-G-2-b of the
agreement.
I-4-e- If a pilot volunteers for the TDY assignment for two or more
Consecutive months, restoration of any lost vacation days or regular days off
will be provided only for those days necessarily lost as a result of positioning
immediately prior to the first month of the TDY period and immediately
subsequent to the last month of the TDY period.
I-4-f- The pilot will be required to advise the Company within 48 hours of the
publication of any schedule which generates days owed if he has a preference
regarding when those days owed will be restored.
I-5- Pilots who are involuntarily assigned to a TDY assignment will not be
required to position themselves on either regular days off or on vacation days
outside of the month of the TDY, but may do so voluntarily. If they lose vacation
days or days off as a result of volunteering, they will be entitled to schedule
adjustments and/or to restoration of lost days as provided above for volunteers.
SECTION 7- DELHI PROVISIONS
The following provisions will apply when operating to and from Delhi, India:
A. These provisions shall apply only to operations conducted in B-747-400, B-
777 and B-767 aircraft. Prior to implementing operations in another equipment
type, or to any cities in India except Delhi, the parties will meet to review the
experience gained in the operation and reach agreement on any changes, if
necessary, to initiate such flying.
B. Section 3-B above (Atlantic Operations) shall apply to non-stop London-Delhi
operations, except for paragraph 3-B-2-c and 3-B-2-d. "Atlantic Crossing", as it
applies to operations conducted under this Section, will mean any operation
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between London and Delhi. Section 3-D above will apply to all non-stop
operations between ORD, JFK, and IAD and Delhi.
C. Pilots assigned to a DEL pairing shall receive a period free from duty at the
end of each trip pairing consisting of not less than two nights (2300 to 0700) rest
at their domicile before being assigned other flying.
D. Operations between DEL and HKG are already permitted under the provisions
of Section 3-A above (Pacific Operations), which shall continue to apply to the
operation of the HKG-LHR and HKG-DEL segments.
E. No pilot scheduled into DEL will be scheduled or reassigned to fly or
deadhead multiple segments in excess of eleven and one half (11 1/2) time
zones away from his home domicile, without his concurrence. (A TDY domicile is
considered the pilot's home domicile for the purposes of this paragraph).
F. Trip pairings involving operations to DEL scheduled under the provisions of
Section 3-B above will be limited to a maximum of 4 duty periods unless the
pilot(s) involved agree to an exception.
G. No pilot will be scheduled or required to fly or deadhead from or through DEL
in a direction away from his domicile, without his concurrence. (A TDY domicile is
considered the pilot's domicile for the purposes of this paragraph).
H. B767 aircraft scheduled between LHR and DEL will provide a pilot rest seat
consisting of a single International First Class seat in the non-smoking section of
the First Class cabin.
I. When a pilot is required to deadhead (either on or off line) to or from DEL, the
pilot will be seated in First Class or Business Class if First Class is not available.
In no case will the pilot be required to deadhead in Coach Class. The
Association will provide the Company with a list of acceptable airlines for the
scheduled deadheading of UAL pilots.
J. The layover hotel in Delhi will be selected by the Association from the Hyatt
Regency or the Welcomgroup Maurya Sheraton. The Company will not change
hotels as a result of a rate increase without providing the Association 60 days
notice prior to the change. The parties will begin the process of obtaining
another mutually acceptable hotel(s) to serve as an available backup, in the
event the current hotel becomes unavailable. A crew lounge will be provided by
the hotel for use by United crews. If technologically feasible, a Unimatic terminal
will be provided at the hotel within a reasonable period of time and made
available to United crews.
Page111
J-1- If a room at the scheduled layover hotel is not available within 15
minutes of scheduled check-in time, the affected pilot may seek other
accommodations and claim reasonable actual lodgings expense on the regular
Company expense account form supported by the hotel receipt as provided in
Section 4-B-1-c-(1) of the Agreement.
J-2- In addition to the provisions of Section 2-B-5, transportation to and from
the Hotel will be provided by full size air conditioned private vehicle
(exclusively for crews) with normal safety equipment and qualified driver. The
size of the vehicle will be commensurate with the needs of an International
flight crew with luggage.
K. The Company will explore the possibility of obtaining a corporate membership
at a travelers or expatriate club which specializes in English-speaking
membership in Delhi for the purpose of providing pilots on layover with
membership services. The Company is committed to providing this service if
such services are available and can be acquired at a cost no greater than that
paid by other international airlines that provide their crews with such services in
Delhi.
L. European or North American bottled drinking water meeting U.S. Health
Department standards for purity will be made available at the layover hotel to
layover crew members in India. Bottled water will also be made available to pilots
on flight segments operating to and from DEL.
M. Aircraft used on flights to, from, or within India will have a priority lavatory lock
system (similar to the 747-400 system) installed within a reasonable period of
time.
N. Agreement will be reached between UAL Flight Operations management and
the MEC Chairman on operational issues associated with India service, including
depressurization escape routes and aircraft routings.
SECTION 8- GENERAL
A. Reassignment under Section 20-F-2 and 20-I must return the pilot to his home
domicile for a legal rest within thirty-six (36) hours of his originally scheduled
arrival at his home domicile if reassigned while in the Atlantic operation and
within forty-eight (48) hours of his originally scheduled arrival at his home
domicile if reassigned while in the Pacific operation. If, however, the pilot's duties
in his reassignment commence within the last forty-eight (48) hours in an Atlantic
assignment or sixty (60) hours in a Pacific assignment prior to his originally
scheduled arrival at his domicile, the reassignment as given will not delay his
return to domicile for more than forty-eight (48) hours of his originally scheduled
Page 112
arrival at his home domicile if reassigned while in the Atlantic operation and for
more than sixty (60) hours of his originally scheduled arrival at his home domicile
if reassigned while in the Pacific operation. In the event a pilot is reassigned and
his arrival at his domicile will be later than originally scheduled, upon his request,
the Company shall notify the pilot's residence or contact number of the delay and
expected arrival time.
B. The Association will be consulted and their recommendations will be given full
consideration whenever a new aircraft type is ordered which requires on-board
rest facilities as a result of this agreement or the FAR. The present B-747-400
rest facility is considered to be optimally suited for aircraft operating within the
range of the B-747-400.
C. Should a situation arise, either in the country or city served, that could present
a concern for the continued safety of the crew or aircraft, then representatives of
the Association and the Company will meet immediately to determine the most
appropriate action and/or modifications required, including the possibility that
additional insurance may be appropriate. In no event will a pilot assigned to
United's international operations suffer any reduction to his Company insurance
benefits. Additionally, the Company agrees to protect a pilot from any reduction
in his personal life insurance benefits which may result from his assignment to
international operations at the time of his death up to a maximum of one million
dollars of total personal coverage.
D. Notwithstanding the provisions of Section 13 and 20 of the Agreement, any
lineholder who does not fly a scheduled international trip due to a sick leave
absence, is subject to the following:
D-1- Such pilot shall be eligible to restore all or part of his accrued sick leave
used for the illness absence on an actual hour for actual hour basis.
D-2- Restoration of sick leave accrual shall be accomplished by picking up
open time under the provisions of Section 20-H-5 of the Agreement.
D-3- Pick up under this provision shall be limited to the month in which the
absence occurs.
E. Lost Luggage
If a crew member's luggage is lost by the Company while he is assigned an
international trip pairing or assigned to an international TDY domicile, then he
shall be subject to the policy regarding lost luggage applicable to revenue
passengers. An advance of Two Hundred and Fifty Dollars ($250.00) will be
made available to a pilot under these circumstances. Such Two Hundred and
Page 113
Fifty Dollars ($250.00) will be returned to the Company if his luggage is
recovered.
F. While on layover at a foreign location, crew members shall advise the local
United Station Operations of their whereabouts, if not residing at the scheduled
hotel.
G. Should a pilot incur any foreign income tax liability as a result of an involuntary
TDY assignment, that liability will be assumed by the Company.
H. Line preferencing information will be made available at one or more locations
where crews layover who are flying trip pairings of five (5) or more days duration.
Schedule preferences will be accepted by telemeter from all such crews who will
not return to their domicile before close of preferencing.
I. Should government action modify any existing United Airlines route, the parties
will meet to discuss the possible need to make modifications to this
Supplemental Agreement.
J. The Company will consult with the Association Hotel Committee prior to
changing any currently approved international layover facility. Whenever changes
are contemplated, at the request of the ALPA Hotel Committee Chairman, a
representative of Flight Operations will inspect the proposed facility prior to the
change taking place.
K. The Company will provide the names of English speaking doctors and medical
facilities which are available 24 hours. A priority will be placed on finding doctors
and facilities which are convenient to the layover hotel and with whom
arrangements can be made which will eliminate the possibility that the pilot will
be required to provide immediate payment for treatment; including arrangements
which would require the pilot to later reimburse the Company for advancing
payment on his behalf.
L. The Company and the Association will conduct a second joint medical study
regarding crew rest. The Company commits that scheduling practices and
philosophies no less favorable to the pilots than those in effect January 15, 1991
shall remain in effect pending the results of this second crew rest study.
M. Should international scheduling problems occur, the parties will meet to
attempt to resolve the problems. Additionally, should the Federal Aviation
Administration modify the current FAR's, the parties will meet for the purpose of
determining what changes, if any, should be made to this International
Supplemental Letter of Agreement to conform with the new regulations.
Page 114
N. Whenever a new aircraft type is ordered which requires an on-board rest
facility as a result of this Agreement or the FAR, a joint committee comprised of
ALPA and Company representatives will study and review all possible rest
facilities currently in use or in development to determine what best meets the
needs of United and the pilots. The joint committee will make their
recommendation to the MEC Chairman and the Chief Operating Officer for a final
resolution.
SECTION 9- DURATION
This Supplemental Agreement shall become effective upon signing and run
concurrently with Section 22 of the 2000 Pilot Agreement.
IN WITNESS WHEREOF, the parties have signed this Supplemental Agreement
this 9th day of May, 1991.
|
WITNESS: |
FOR UNITED AIR LINES, INC. |
|
|
|
|
/s/ G.L. Andrews |
/s/ John R. Samolis |
|
/s/ T.A. McClone /s/ R. W. Rosinia |
John R. Samolis Vice President Employee Relations |
|
WITNES: /s/ T.P. Austin |
FOR THE AIR LINE PILOTS IN THE SERVICE OF UNITED AIR LINES, INC. |
|
/s/ C.A. Rine /s/ L.J. Balestra /s/ H.E. Stepinsky |
/s/ J. Randolph Babbit J. Randolph Babbit, President Air Line Pilots Association, International |
Revised as of July 12, 1994.
/s/ John R. Samolis
John R. Samolis
Vice President
Employee Relations
/s/ Roger D. Hall
Roger D. Hall, Chairman
UAL/ALPA Master Executive Council
Revised as of this 26th day of October, 2000.
Page 115
/s/ Williams P. Hobgood
William P. Hobgood
Senior Vice President
People
/s/ F.C. Dubinsky
Captain F.C. Dubinsky
Chairman
UAL/ALPA Master Executive Council
Page 116
Pacific ETOPS
UNITED AIRLINES
May 9, 1991
Captain J. R. Babbitt, President
Air Line Pilots Association
1625 Massachusetts Ave., N.W.
Washington, D.C. 20036
Dear Captain Babbitt:
This will confirm that in the negotiations leading to the 1991 Pilot Agreement, the
Company and the United Airlines' Master Executive Council Negotiating
Committee agreed that prior to implementing any twin engine ETOPS operations
in the Pacific Basin, the parties will meet to review the ETOPS experience gained
in the Atlantic Operation and reach agreement on any changes in the
International Supplemental Agreement necessary to initiate such flying.
It was further agreed that should the Company receive any new European route
authority during the term of the 1991 agreement which could not be operated
under the Atlantic provisions of the International Supplemental Agreement the
parties will promptly meet and agree on such changes in the agreement
necessary to implement such new service. (Such changes could include, but not
be limited to, additional crew augmentation).
Sincerely,
/s/ John R. Samolis
John R. Samolis
Vice President
Employee Relations
Page 117
Meet and discuss medical /dental plan
UNITED AIRLINES
May 9, 1991
Captain Thomas P. Austin Chairman
UAL-MEC Negotiating Committee
Air Line Pilots Association
6400 Shafer Court, Suite 700
Rosemont, Illinois 60018
Dear Pat:
This letter will confirm the commitments made between the parties during the
1991 negotiations.
The parties agreed to meet on a quarterly basis to discuss, and make a good
faith effort to resolve, any and all problems relative to the medical/dental plan.
Such discussion could include, but not be limited to, problems with managed
health care, and individual claim issues.
Sincerely,
/s/ John R. Samolis
John R. Samolis
Vice President
Employee Relations
Page 118
Future Pension Amendments
LETTER OF AGREEMENT
between
UNITED AIR LINE PILOTS
in the service of
UNITED AIR LINES, INC.
as represented by
THE AIR LINE PILOTS ASSOCIATION,
INTERNATIONAL
THIS LETTER OF AGREEMENT is made and entered into in accordance with
the provisions of the Railway Labor Act, as amended, by and between UNITED
AIR LINES, INC. (hereafter referred to as the "Company") and the AIR LINE
PILOTS in the service of UNITED AIR LINES, INC., as represented by the AIR
LINE PILOTS ASSOCIATION INTERNATIONAL (hereinafter referred to as the
"Association").
W I T N E S S E T H:
WHEREAS, the Company and the Association desire to clarify their respective
rights with respect to future amendments to the United Air Lines, Inc. Pilots Fixed
Benefit Retirement Income Plan (Fixed Plan), the United Air Lines, Inc. Pilots'
Directed Account Retirement Income Plan (Directed Account Plan) and the
Welfare Benefit Plans (any of the above may be referred to herein as a "Plan").
NOW THEREFORE, it is mutually agreed:
1. The Company will provide the Association an opportunity to discuss and
comment on all proposed amendments to any provision of the Fixed Plan,
Directed Account Plan, or a Welfare Benefit Plan at least thirty (30) days prior to
implementation. The Company will consider any such comments in good faith. If,
after proper notice by the Company, the Association objects to a proposed Plan
amendment, the parties retain all their present rights and arguments under the
Agreement and Plans concerning the Company's ability to implement such an
amendment without approval of the Association.
2. Notwithstanding the provisions of 1, above, the Company shall not amend any
provision of the Fixed Plan, the Directed Account Plan, or the Welfare Benefit
Plans which changes negotiated benefits without the prior written consent of the
Association. This provision is without prejudice to any other rights of the
Association concerning other amendments to a Plan.
Page 119
3. The Association may submit any dispute concerning any proposed Plan
amendment, directly to the System Board or Pension Board, as applicable, within
seven (7) days from the date the dispute is known to exist and will be decided
within 60 days of submission.
IN WITNESS WHEREOF, the parties have executed this Letter of Agreement
this 9th day of May, 1991.
|
WITNESS: |
FOR UNITED AIR LINES, INC. |
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/s/ G.L. Andrews /s/ T.A. McClone /s/ R.W. Rosinia |
/s/ John R. Samolis John R. Samolis Vice President Employee Reoations |
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WITNESS: |
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/s/ T.P. Austin |
FOR THE AIR LINE PILOTS IN THE SERVICE OF UNITED AIR LINES, INC. |
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/s/ C.A. Rine /s/ L.J. Balestra /s/ H. E. Stepinsky |
/s/ J. Randolph Babbitt J. Randolph Babbitt, President Air Line Pilots Association, International |
Page 120
CRAF
SUPPLEMENTAL AGREEMENT
between
UNITED AIR LINES, INC.
and
THE AIR LINE PILOTS
in the service of
UNITED AIR LINES, INC.
as represented by
THE AIR LINE PILOTS ASSOCIATION,
INTERNATIONAL
THIS SUPPLEMENTAL AGREEMENT, is made and entered into in accordance
with the provisions of Title II of the Railway Labor Act, as amended, by and
between UNITED AIR LINES, INC. (hereinafter referred to as the "Company") and THE AIR LINE PILOTS in the service of UNITED AIR LINES, INC., as
represented by the AIR LINE PILOTS ASSOCIATION, INTERNATIONAL
(hereinafter referred to as the "Association").
W I T N E S S E T H:
WHEREAS, the Company and the Association desire to supplement their Pilots'
Employment Agreement signed May 9, 1991, (hereinafter referred to as the
"Agreement") by providing certain rates of compensation, rules and working
conditions with respect to the Company's CRAF Operation (Civil Reserve Air
Fleet).
NOW, THEREFORE, it is mutually agreed and understood by and between the
parties of this Supplemental Agreement that the rates of compensation, rules and
working conditions stipulated herein shall be in full force and effect on the
Company's Civil Reserve Air Fleet Operation; provided that all provisions of the
Agreement, as herein defined, except as specifically modified or excepted by this
Supplemental Agreement, shall be applicable also to the Company's Civil
Reserve Air Fleet Operation.
SECTION 1
DEFINITIONS
A. The word "Agreement" when used in this Supplemental Agreement means the
Agreement between United Air Lines, Inc. and the Air Line Pilots in the service of
Page 121
United Air Lines, Inc., as represented by the Air Line Pilots Association,
International, signed August 14, 1981, or as it may be amended or modified.
B. The term "CRAF Operation" for the purpose of this Supplemental Agreement
means all flight operations conducted in accordance with the agreement between
United Air Lines and the Department of Defense but shall not include the
Company's certificated service or commercial charter service or any other
government operation.
SECTION 2
COMPENSATION
Rates of Pay
A-1- Pilots while assigned to the CRAF Operation shall be paid in accordance
with the applicable rates of pay for the type of equipment flown as provided in
Section 3 of the Agreement.
A-2- In addition to the compensation specified in Paragraph A-1 above, pilots
shall be paid the rate of Twelve Dollars and Fifty Cents ($12.50) for each hour
flown.
Hourly Pay Computation
Actual time block-to-block shall be used in computing the override pay as
specified in Paragraph A-2 above for flying performed on the CRAF Operation.
SECTION 3
EXPENSES
A. Pilots when on a CRAF Operation shall be entitled to expense reimbursement
under the provisions of Section 4 of the Agreement. Accommodations provided
by the Company, where available, will conform to the minimum standards set
forth in Section 4 of the Agreement. In addition to the hourly expenses provided
by Section 4-A-1 of the Agreement, pilots in a CRAF operation shall receive an
additional $.50 an hour.
B. Travel expenses en route for the pilot while commuting to and from the
Operation shall be allowed in accordance with this Supplemental Agreement.
Page 122
SECTION 4
MOVING EXPENSES
No pilot shall be required to move to the location of the CRAF assignment,
unless required by the government. No moving expenses shall be paid until a
pilot has completed ninety (90) days from the date of the CRAF vacancy. All
moving shall be in accordance with Section 10 of the Agreement.
SECTION 5
FILLING OF VACANCIES
In anticipation of the emergency nature of the CRAF Operation, the Company
shall keep on file a currently effective Preference List which shall include, in order
of seniority, all pilots desiring to fly the CRAF Operation. Each pilot on the CRAF
Preference List shall indicate whether he is preferencing a Captain vacancy, a
First Officer vacancy or a Second Officer vacancy, and equipment type. This List
shall be kept up to date by repreferencing on June 1st of every year. Any pilot
preferencing a CRAF assignment must be currently status (Captain, First Officer
or Second Officer) and equipment type qualified. If the Company commits an
entire fleet to the CRAF Agreement, then any vacancies posted for that fleet will
be considered as CRAF vacancies also. Any pilot awarded an assignment under
these circumstances will be considered as having also been awarded a CRAF
assignment. A pilot may remove his name from the CRAF Preference List at any
time by giving thirty (30) days written notification to his Flight Manager, except
when such pilot holds an assignment in an equipment type which has been
totally committed to the CRAF Operation.
A. All pilot vacancies on the Company's CRAF Operation shall be filled in
Accordance with system seniority provided such pilot is status and equipment
qualified. In the event there are insufficient bidders, the Company will assign the
most junior status and equipment qualified pilot on the system.
B. All CRAF vacancies shall be bulletined on a systemwide basis.
C. A pilot while assigned to the Company's CRAF Operation shall be permitted to
bid on any vacancies. Every reasonable effort shall be made to advise all CRAF
pilots of all bulletined vacancies.
D. In the event that there is a reduction in the number of personnel on the CRAF
Operation, the reduction shall be in the reverse order of seniority in the status
Page 123
and equipment affected at the domicile where the reduction occurs, unless a
more senior pilot at such domicile in the status and equipment affected
volunteers to return to line flying duty for United Air Lines, Inc. All pilots referred
to in this Paragraph shall have the rights specified in Paragraph F below.
E. Notwithstanding Paragraph 8-C of Section 8 of the Agreement, a pilot's
assignment on the domestic operation shall not be considered as vacated and
such assignment shall not be bid or filled for a period of ninety (90) days
following the date of the award of his CRAF vacancy. In the event a pilot is
relieved of his CRAF assignment during this ninety (90) day period, such pilot
shall resume his last previously held domestic assignment.
F. A pilot returning to line flying duties on the domestic operation shall have the
rights specified in the applicable provisions of Paragraph 8-D, 8-E, 8-G, 8-H, 8-I
and 8-K-2 of Section 8 of the Agreement, but shall not be entitled to a Company
paid move unless the move is required by the government. In addition, pilots
reduced in accordance with Paragraph D above may bump the most junior pilot
in any status or equipment at any CRAF domicile provided the pilot so bumping
is status and equipment qualified.
G. A pilot's initial assignment to the CRAF Operation shall be in accordance with
system seniority of those pilots on the Preference List. A pilot's assignment to the
Company's CRAF Operation will be effective on the date which appears on the
award of such vacancy. Assignment to the CRAF Operation will be made on the
basis of the chronological order of the award dates.
H. Any pilot assigned or awarded a bid on the CRAF Operation must take up
such assignment or bid on the date specified by the Company.
I. Notwithstanding the provisions of Paragraph 8-K-2 of Section 8 of the
Agreement, a pilot on the domestic operation may not displace a pilot holding a
CRAF assignment.
J. During the period in which a pilot has been released from his CRAF
assignment and pending the exercise of his bumping rights as provided in this
Supplemental Agreement, he shall, notwithstanding the provisions of Paragraph
8-K-1 and 8-K-3 of Section 8, take up duties of Captain, First Officer or Second
Officer at the United Air Lines, Inc. domicile having his equipment type nearest to
his CRAF assignment domicile or his residence.
K. A pilot's release from assignment to the Company's CRAF Operation will be
effective from the date he is assigned to the domestic operation, which shall be
after a reasonable rest period after his last trip of not less than two (2) calendar
days. Such rest period shall be exclusive of travel time required to return to the
pilot's domicile.
Page 124
SECTION 6
VACATIONS
A. Notwithstanding the provisions of Section 11 of the Agreement, a pilot
assigned to the Company's CRAF Operation shall receive three and two-thirds
(3-2/3) days vacation credit for each calendar month of service on such operation
which shall be cumulative and carried over to the Company's domestic operation
and made a part of the regular annual vacation credit due such pilot. In
computing vacation accrual, a pilot who was assigned to the Company's CRAF
Operation for one-half (1/2) or more of a calendar month will be credited with
three and two-thirds (3-2/3) days vacation for that month. In determining the
vacation credit of a pilot who was assigned to the CRAF Operation, such days
shall be in addition to the prorated vacation credit earned in accordance with
Section 11 of the Agreement.
B. Vacation periods will be assigned by the Company taking the pilot's
preference and seniority into consideration consistent with the needs of the
CRAF Operation.
SECTION 7
RETIREMENT BENEFITS
A pilot assigned to the Company's CRAF Operation will be eligible for continued
participation in the United Air Lines, Inc. Pension Plan for pilots. Contributions on
behalf of a participant shall be based on his earnings while assigned to the
Company's CRAF Operation.
SECTION 8
DEATH BENEFITS
In the event of the death of any pilot while assigned to the CRAF Operation or in
the event of death of any pilot resulting from injury or disease received while
assigned to the CRAF Operation, the Company shall pay or cause to be paid,
subject to the conditions of Section 14 of this Supplemental Agreement,
$150,000.00 to the beneficiary or beneficiaries in the order and manner named in
the last Group Life Insurance certificate issued for such pilot as a Company
employee. Such death benefit shall be paid either in a lump sum or in
installments, as the respective pilot's may in writing direct. Such benefits shall be
in addition to the benefits prescribed in the Company's Group Life Insurance and
Group Accident-Sickness Insurance Program as per the Basic Agreement.
Page 125
SECTION 9
SICKNESS AND INJURY BENEFITS
A. A pilot assigned to the Company's CRAF Operation shall receive sickness and
injury benefits in the same manner as any pilot as outlined in Section 13 of the
Agreement.
B. A pilot assigned to the Company's CRAF Operation will be eligible for
continued participation and coverage in the Company's Accident and Sickness
Program as provided in the Basic Agreement.
SECTION 10
PERMANENT TOTAL DISABILITY
In lieu of death benefits described in Section 8, in the event of the permanent
total disability of a pilot resulting from injury or disease received while assigned to
the CRAF Operation, the Company shall pay or cause to be paid, subject to the
conditions of Section 14 of this Supplemental Agreement, compensation in the
sum of $150,000.00. Such compensation shall be paid either in a lump sum or in
installments, as the respective pilots may in writing direct. The loss of, or the
loss of use of, both hands, or both arms, or both feet, or both legs, or both eyes,
or any two thereof, shall constitute permanent total disability for the purpose of
this Section. In all other cases under this Section, permanent total disability shall
be determined in accordance with the facts. Such benefit shall be in addition to
the benefits prescribed in the Company's Group Life Insurance and Cooperative
Group Life and Group Accident-Sickness Insurance Program as per the Basic
Agreement.
Page 126
SECTION 11
INSURANCE AND WELFARE BENEFITS
A. Any pilot assigned to fly a CRAF flight shall continue to receive full benefits as
provided in each applicable Plan. Further, the war limitation will be waived and
benefits will be payable in the event of claims arising out of a declared or
undeclared war. Benefits under all plans shall be paid on a per capita basis with
no tartrate per accident limit.
A-1- Life Insurance
A-1-a- Company Paid Life - $80,000
A-1-b- Supplemental Life up to $330,000 (Pilot Contributor)
A-1-c- CRAF Life - $150,000
A-2- Accidental Death and Dismemberment (AD&D)
A-2-a- Company Paid - $4,000
A-2-b- Company Paid (Pilot) - $35,000
A-2-c- Supplemental (24 Hour High Limit Contributory) - Up to $300,000.
A-3- CRAF Death and Dismemberment - $150,000
A-4- Special Hazards Benefits - $100,000
A-5- Invalidated Life Benefit - $50,000
A-6- Personal Life Insurance Protection - Up to $1,000,000
A-7- Pilots Disability Income Benefit - 55% of Considered Compensation.
A-8- To the extent they are present in the Company's insurance programs, all
exclusions and limitations in coverage, such as for job-related injury and
criminal acts, are waived for pilots while participating in any operation
conducted under the provisions of this Letter. The limitation for self inflicted
injury will remain in effect.
A-9- The Company will protect a pilot from any reduction in his personal life
insurance benefits which may result from his assignment to international
CRAF operations at the time of his death up to a maximum of one million
dollars of total personal coverage.
Page 127
SECTION 12
WORKMEN'S COMPENSATION BENEFITS
The Workmen's Compensation Benefits provided for pilots by Section 15 of the
Agreement shall be provided for all pilots assigned to the Company's CRAF
Operation and all amounts paid under such Section shall be in addition to any
amounts paid under Section 8 and 10 of this Supplemental Agreement.
SECTION 13
MISSING, INTERNMENT, PRISONER OF WAR - BENEFITS
A. Captains, First Officers and Second Officers who while engaged in the CRAF
Operation are interned or taken prisoner of war by a foreign government shall be
entitled to compensation at the salary as specified in Section 2 of this
Supplemental Agreement for the periods during which they are interned or held
prisoner of war; provided, however, that in the absence of knowledge on the part
of the Company as to whether a pilot is alive or dead, compensation in such
amounts will be allowed for a period of twelve (12) months after such Captain,
First Officer of Second Officer was last known to the Company to have been
interned or held prisoner of war.
B. When after such twelve (12) month period it has still not been established
whether
such pilots are alive or dead, Captains, First Officers and Second Officers shall
be allowed compensation at the salary as specified in Section 2 of this
Supplemental Agreement from and after such twelve (12) month period until
death is established or until there is a sufficient presumption of death to permit
payment of the death benefit provided in Section 8.
C. In the event such Captain, First Officer or Second Officer is later found to be
alive, he shall receive retroactively the difference in pay between the total
compensation (including death benefit) paid by the Company under this Section
and the monthly amounts which would have been paid under Paragraph A of this
Section and such monthly pay shall then be resumed for the duration of
internment or imprisonment.
D. Captains, First Officers and Second Officers who while engaged in the CRAF
Operation become missing and whose whereabouts become unknown shall be
allowed compensation at the salary as specified in Section 2 of this
Supplemental Agreement for a period of twelve (12) months after disappearance
or until such date as death is established, whichever first occurs. If upon the
expiration of the twelve (12) month period, any such Captain, First Officer or
Page 128
Second Officer is still missing and his whereabouts is unknown, or if prior to that
time his death is established, the Company shall pay the death benefit provided
for in Section 8.
E. The monthly compensation allowable under this Section to pilots interned,
held prisoner of war, or missing shall be credited to such pilot on the books of the
Company and shall be disbursed by the Company in accordance with written
directions from such pilots. The Company shall cause each pilot hereafter
employed in or assigned to its CRAF Operation to execute and deliver to the
Company prior to such employment or assignment a written direction in the form
set forth in Section 16 of the Agreement.
F. Any payments due to any pilots under this Section which are not covered by a
written direction as above required shall be held by the Company for such pilot
and in the event of his death shall be paid to the legal representative of his
estate.
G. The monthly compensation allowable under this Section shall be in lieu of all
compensation provided for by any law in respect to persons interned, held
prisoner of war or missing and shall also be in lieu of all salary, expenses and
subsistence during the period in which a pilot is interned, held prisoner of war or
missing.
H. Pilots shall maintain and continue to accrue seniority and longevity for pay
purposes during periods in which they are interned, held prisoner of war or
missing.
SECTION 14
GENERAL CONDITIONS
A. The provisions for death benefits in Section 8 and for disability benefits in
Section 10 and 11 are intended to apply to Captains, First Officers and Second
Officers while assigned to the CRAF Operation, as follows:
A-1- When outside the continental United States in connection with or as a
result of said operations irrespective of whether they are actually engaged in
active duty at the time of death or injury.
A-2- When within the continental United States only if they are actually
engaged in the course of employment at the time of death or injury, except that
when not actually engaged in the course of employment at the time of death or
injury, Captains, First Officers and Second Officers receive the group
insurance benefits as per the Basic Agreement.
Page 129
B. The obligation of the Company to make any payment provided for in Section
11 and 12 hereof is subject to the condition that the injury or disease resulting in
the permanent total or partial disability shall not have been occasioned solely by
his attempted suicide.
SECTION 15
MISCELLANEOUS PROVISIONS
A. Rules governing hours of service during the first thirty (30) days of the CRAF
Operation shall be those specified in the applicable FAR's. At the termination of
the initial thirty (30) day period or as soon as feasible, the hours of service as
specified in the Basic Agreement or Supplemental Agreements as applicable.
B. Other than as specifically provided in this Supplemental Agreement, the
provisions of the Basic Agreement shall apply.
C. The assignment of all pilots to this Operation will be in writing to the pilot.
D. Pilots will continue to fly any CRAF flight deemed essential to the national
defense provided such flights are solely military in nature and carry cargo
composed entirely of military requirements even if at the time such military flights
are necessary the pilots have withdrawn their air line service for any
reason.
D-1- To assure the movement of a particular flight under such circumstances,
the Association will require certification by an appropriate Company official
designated by the Company that such flight is in accordance with the
specifications set forth in Paragraph D above. This certification shall be
provided prior to movement of the flight where feasible or, where not feasible,
promptly thereafter.
D-2- Pilots who fly such military traffic will not lose any benefits accruing to
other pilots which they would otherwise have received upon settlement of an
unresolved labor dispute.
Page 130
SECTION 16
DURATION
This Supplemental Agreement shall become effective on the date of signing and
shall remain in full force and effect and shall run concurrently with the Agreement
signed August 14, 1981.
IN WITNESS WHEREOF, the parties have signed this Supplemental Agreement this 9th day of May, 1991.
|
WITNESS: |
FOR UNITED AIR LINES, INC. |
|
|
|
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/s/ G.L. Andrews /s/ T.A. McClone /s/ R.W. Rosinia |
/s/ J.R. Samolis John R. Samolis Vice President Employee Relations |
|
WITNESS : |
FOR THE AIR LINE PILOTS IN THE SERVICE OF UNITED AIR LINES, INC |
|
/s/ T.P. Austin |
/s/ J. Randolph Babbit J. Randolph Babbitt, President Air Line Pilots Association, International |
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/s/ C.A. Rine /s/ L.J. Balestra /s/ H.E. Stepinsky |
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Page 131
MAC
MAC SUPPLEMENTAL AGREEMENT
between
UNITED AIR LINES, INC.
and
THE AIR LINE PILOTS
in the service of
UNITED AIR LINES, INC.
as represented by
THE AIR LINE PILOTS ASSOCIATION,
INTERNATIONAL
THIS SUPPLEMENTAL AGREEMENT is made and entered into in accordance
with the provisions of Title II of the Railway Labor Act, as amended, by and
between UNITED AIR LINES, INC. (hereinafter referred to as the "Company")
and the AIR LINE PILOTS in the service of UNITED AIR LINES, INC. as
represented by the AIR LINE PILOTS ASSOCIATION, INTERNATIONAL
(hereinafter referred to as the "Association").
W I T N E S S E T H:
WHEREAS, the Company and the Association desire to supplement their Pilots'
Employment Agreement, signed May 9, 1991, (hereinafter referred to as the
"Agreement") by providing certain rates of compensation, rules and working
conditions with respect to the Company's "MAC Operation" (Military Airlift
Command).
NOW, THEREFORE, it is mutually agreed and understood by and between the
parties of this Supplemental Agreement that the rates of compensation, rules and
working conditions stipulated herein shall be in full force and effect on the
Company's Military Airlift Command Operation provided that all provisions of the
Agreement, as herein defined, except as specifically modified or excepted by this
Supplemental Agreement shall be applicable also to the Company's Military Airlift
Command Operation.
SECTION 1
DEFINITIONS
A. The word "Agreement" when used in this Supplemental Agreement means the
Agreement between United Air Lines, Inc. and the Air Line Pilots in the service
Page 132
of United Air Lines, Inc., as represented by the Air Line Pilots Association,
International, signed June 15, 1985 or as it is amended or modified.
B. The term "MAC Operation" for the purpose of this Supplemental Agreement
Means any flights all or part of which are conducted in accordance with any
contract made between United Air Lines, Inc. and the Military Airlift Command
into a non-conflict area.
The term "Critical MAC Operation" for the purpose of this Supplemental
Agreement means any flights, regardless of the nature of payload transported, all
or part of which are conducted in accordance with any contract made between
United Air Lines, Inc. and the Military Airlift Command into an area of the world
where an armed conflict is occurring or has occurred within the prior thirty (30)
days.
D. "MAC Operation Base" is the domicile or geographical location to which
responsibility is assigned and pilot vacancies are bid for the conduct of the
Critical MAC Operations when the level of critical MAC flying is planned to be
nine hundred and seventy-five (975) hours or more per month and is planned to
exist for sixty (60) days or more.
SECTION 2
MAC FLYING
A. Critical MAC flying into non-conflict areas will be done by a domicile where
Pilots are currently assigned to the equipment used.
A-1- MAC flying of a non-critical nature will be assigned under the applicable
provisions of Section 20 of the Pilots Agreement and/or the Charter
Supplemental Agreement.
A-2- MAC flying which is defined as "Critical MAC Operations" will be
assigned to volunteer pilots from among the pilots assigned a reserve line.
Should insufficient pilots volunteer, reserve pilots may be assigned in inverse
order of seniority.
Critical MAC flying, if planned for nine hundred and seventy-five (975) hours
Per month or more, and if planned to exist for sixty (60) days or more will be
flown by a MAC Operation Base as defined in Paragraph 1-D above, provided at
least ninety (90) days notice is available to the Company.
Page 133
SECTION 3
FILLING OF VACANCIES
A. Bidding Of Critical MAC Vacancies
A-1- All pilot vacancies on the Company's Critical MAC Operation shall be
bulletined at all domiciles as far in advance as possible but not later than thirty
(30) days after such vacancy exists. If at the time of advertising a critical MAC
vacancy, the Company plans to advertise a domestic vacancy in the same status
and equipment type as the critical MAC vacancy and with an advertised effective
date the same as or prior to the critical MAC vacancy, the domestic vacancy will
be advertised and awarded prior to the awarding of the critical MAC vacancy.
A-2- Vacancy bulletins for critical MAC assignments shall state the number
and status of vacancies to be filled; the anticipated effective date of the
assignment; the equipment type involved; the Critical MAC Operation Base; the
anticipated general area of operation; and a reasonable deadline date, not less
than ten (10) days, after which bids will not be considered.
A-3- All critical MAC vacancies shall be filled in accordance with system
Seniority from among eligible bidders as stipulated in Paragraph F of this
Section.
B. Eligibility To Be Awarded Critical MAC Vacancies
A pilot's eligibility to be awarded a critical MAC vacancy shall be subject to the
following conditions:
B-1- He must be currently flying in the status and equipment type of the
Critical MAC assignment at the time of the closing of the critical MAC vacancy
bulletin, or
B-2- He must have been awarded a domestic vacancy in the status and
equipment type of the critical MAC vacancy which had an advertised effective
date the same as or prior to the advertised effective date of the critical MAC
assignment.
C. Any pilot assigned to the Critical MAC Operation may bid and be awarded a
domestic vacancy under the provisions of the Agreement and shall be
considered to have vacated his former domestic assignment at the time the flying
for such awarded assignment commences. Such pilot shall not be required to
occupy his new domestic assignment until he vacates his critical MAC assignment, unless such new assignment involves a change in status or
equipment type in which case he shall be required to occupy such new domicile
assignment.
Page 134
D. Whenever a pilot for any reason vacates his critical MAC assignment, he shall
return to his current domestic assignment.
E. Section 8-K of the Agreement shall not apply to pilots in the Critical MAC
Operation in the event of a reduction in the number of assignments on critical
MAC. In the event of a reduction of domestic assignments affecting a critical
MAC pilot's domestic assignment, Section 8-K shall apply. Notwithstanding
Section 8-K, a domestic pilot who loses his assignment shall not be permitted to
bump into the Critical MAC Operation.
F.
F-1- A pilot may vacate an assignment on the Critical MAC Operation by
Giving notice in writing to the Company of his desire to return to his domestic
assignment. The Company shall release such pilot as soon as possible but in
any event he shall be returned to his domestic assignment on the first day of the
calendar month following the completion of sixty (60) days from the date of
receipt by the Company of the pilot's request for release.
F-2- A pilot who has vacated his critical MAC assignment under the
provisions of sub-paragraph 1 above may not be awarded a critical MAC
assignment for a period of six (6) months following the date of his release from
such critical MAC assignment, except that a pilot who has vacated his critical
MAC assignment to take up a new domestic assignment involving a change in
status, as provided in Section 3-C of this Supplemental Agreement, who is
subsequently reduced from such assignment and bumps into critical MAC
equipment type shall, notwithstanding said six (6) months restriction, be eligible
to bid a critical MAC vacancy.
G. When at the request of a pilot the Company adjudges that unusual conditions
Exist concerning his assignment to the Critical MAC Operation, such pilot shall
be allowed to return to his domestic assignment within thirty (30) days of the
acknowledgement of the unusual condition.
H. Standby Assignments To Critical MAC Operation
H-1- In addition to the number of pilot assignments provided for under the
provisions of Paragraph A and B above, the Company shall advertise and award
critical MAC standby assignments in each pilot status to the extent necessary to
provide adequate coverage of increases in the monthly level of flying on the
Critical MAC Operation.
Page 135
H-2- A pilot who holds a standby assignment shall acquire the necessary
over water and immunization qualification in order to be available for short notice
assignment to the Critical MAC Operation. A pilot holding said standby
assignment shall continue to serve in his normal assignment in the domestic
operation until such time as he is moved into the Critical MAC Operation to
alleviate a temporary need contemplated to exist for less than sixty (60) days in
the pilot status in which he holds a standby assignment.
H-3- Pilots holding a standby assignment, when needed to fill a temporary
requirement shall be assigned to the Critical MAC Operation in order of seniority
among those pilots holding standby assignments in each pilot status. Upon
termination of the temporary need on the Critical MAC Operation, pilots holding
standby assignments shall be released from the Critical MAC Operation in
reverse order of seniority and will return to their normal domestic assignment and
critical MAC standby assignment.
H-4- Pilots holding a standby assignment who are assigned to the Critical
MAC Operation for all or part of the month shall be required to state their
preference under the provisions of Section 20-D of the Agreement in their
domestic assignment for the following month. If more than one (1) standby pilot is
assigned to the Critical MAC Operation for a portion of a given month, such
standby pilots shall be assigned available lines of flying in accordance with their
seniority and preference after all pilots holding regular critical MAC assignments
have been awarded their schedule preference.
H-5- A standby pilot assigned to fly a Critical MAC Operation trip shall, upon
completion of his assignment and return to his domicile, be entitled to not less
than. two (2) calendar days off if his domestic schedule does not provide such
calendar days off. If providing such two (2) calendar days off does not provide
him with a minimum twelve (12) calendar days off for the month, the additional
calendar days off to provide such minimum will be added to the two (2) calendar
days off period.
H-5-a- A critical MAC standby pilot will be considered unavailable for
assignment to the Critical MAC Operation trip if such assignment occurs at a
time which precludes providing him with the above required minimum twelve
(12) days off in the month involved.
H-6- A critical MAC standby pilot may vacate such assignment in the same
manner as provided in Section 3-C and 3-G of this Supplemental Agreement.
H-7- A critical MAC standby pilot will vacate such assignment whenever he is
activated in a domestic assignment involving a different status or equipment type
than that of his critical MAC standby assignment.
Page 136
I. It is mutually agreed that regular and standby vacancies for critical MAC
Captains, First Officers and Second Officers shall be posted for bid and award at
the Critical MAC Operation Base(s) as designated by the Company. Such
bidding and awarding, including the determination of the level of regular critical
MAC vacancies, shall be in accordance with the provisions of this Section 3. It is
understood that critical MAC standby vacancies may be bid prior to the time that
regular vacancies are required to be bid in accordance with Section 3 and that a
pilot may hold more than one Critical MAC Operation Base standby vacancy at
the same time.
J. In the event there is a reduction in the number of critical MAC assignments,
The Company shall give not less than thirty (30) days notice to the affected pilots
and they shall return to their domestic assignment, in inverse order of seniority.
SECTION 4
COMPENSATION
In addition to the compensation as provided in Section 3 of the Basic
Agreement, any pilot who flies a critical MAC trip will be paid an override of
Twelve Dollars and Fifty Cents ($12.50) for each hour flown.
SECTION 5
HOURS OF SERVICE
Due to the operational problems associated with the MAC Operation, such
Flights shall be operated in accordance with the applicable provisions of the
Charter Supplemental Agreement.
SECTION 6
EXPENSES
Pilots performing an international MAC assignment will be paid expenses
according to Section 4-A of the Agreement, plus an additional $.50 per hour.
In addition to the expenses provided in A above, pilots on a MAC assignment
shall be provided necessary lodging and related ground transportation; or, when
not furnished by the Company, will be reimbursed for reasonable, actual
expenses incurred for lodging and ground transportation.
Page 137
C.
C-1- Transportation to and from a pilot's home domicile to the point of
departure of the MAC trip shall be furnished by the Company. Transportation
over the Company's routes shall be as NRPS or OMC at the pilot's option.
C-2- Transportation of the pilot on any airline other than United will be by First
Class accommodations if domestic or Business Class accommodations if
international, when available.
D. Should isolated cases of unusual expenses be encountered by a pilot which
The expense allowance will not normally cover and which were not contemplated
by the provisions of this Supplemental Agreement, the Company will reimburse
the pilot for such expenses upon receipt of a documented Company expense
form.
E. In the event a Critical MAC Operation Base is established, travel expenses en
route for the pilot while commuting to and from the operation shall be allowed.
SECTION 7
DEATH BENEFITS
In the event of the death of any pilot while assigned to the MAC Operation or in
the event of death of any pilot resulting from injury or disease received while
assigned to the MAC Operation, the Company shall pay or cause to be paid,
subject to the conditions of Section 10 of this Supplemental Agreement,
$150,000 to the beneficiary or beneficiaries in the order and manner named in
the last Group Life Insurance certificate issued for such pilot as a Company
employee. Such death benefit shall be paid either in a lump sum or in
installments, as the respective pilots' may in writing direct. Such benefits shall be
in addition to the benefits prescribed in the Company's Group Life Insurance and
Group Accident-Sickness Insurance Program.
SECTION 8
INSURANCE AND WELFARE BENEFITS
A. Any pilot assigned to fly a MAC flight shall continue to receive full benefits as
provided in each applicable Plan. Further, the war limitation will be waived
and. benefits will be payable in the event of claims arising out of a declared or
undeclared war. Benefits under all plans shall be paid on a per capita basis with
no aggregate per accident limit.
Page 138
A-1- Life Insurance
A-1-a- Company Paid Life - $80,000
A-1-b- Supplemental Life up to $330,000 (Pilot Contributor)
A-1-c- MAC Life - $150,000
A-2- Accidental Death and Dismemberment (AD&D)
A-2-a- Company Paid - $4,000
A-2-b- Company Paid (Pilot) - $35,000
A-2-c- Supplemental (24 Hour High Limit Contributory) - Up to $300,000
A-3- MAC Death and Dismemberment - $150,000
A-4- Special Hazards Benefits - $100,000
A-5- Invalidated Life Benefit - $50,000
A-6- Personal Life Insurance Protection - Up to $1,000,000
A-7- Pilots Disability Income Benefit - 55% of Considered Compensation
A-8- To the extent they are present in the Company's insurance programs, all
exclusions and limitations in coverage, such as for job-related injury and criminal
acts, are waived for pilots while participating in any operation conducted under
the provisions of this Letter. the limitation for self inflicted injury will remain in
effect.
A-9- The Company will protect a pilot from any reduction in his personal life
insurance benefits which may result from his assignment to international MAC
operations at the time of his death up to a maximum of one million dollars of total
personal coverage.
B. In lieu of death benefits described in Section 7 of this Supplemental
Agreement, in the event of the permanent total disability of a pilot resulting from
injury or disease received while assigned to the MAC Operation, the Company
shall pay or cause to be paid, subject to the conditions of Section 10 of this
Supplemental Agreement, compensation in the sum of $150,000. Such
compensation shall be paid either in a lump sum or in installments, as the
Page 139
respective pilots may in writing direct. The loss of, or the loss of use of, both
hands, or both arms, or both feet, or both legs, or both eyes, or any two thereof,
shall constitute permanent total disability for the purpose of this Section. In all
other cases under this Section, permanent total disability shall be determined in
accordance with the facts. Such benefit shall be in addition to the benefits
prescribed in the Company's Group Life Insurance and Cooperative Group
Life and Group Accident-Sickness Insurance Program.
SECTION 9
MISSING, INTERNMENT, PRISONER OF WAR - BENEFITS
A. Captains, First Officers and Second Officers who while engaged in the MAC
Operation are interned or taken prisoner of war by a foreign government shall
receive compensation at the salary specified in the Basic Agreement for the
periods during which they are interned or held prisoner of war; provided,
however, that in the absence of knowledge on the part of the Company as to
whether a pilot is alive or dead, compensation in such amounts will be allowed
for a period of twelve (12) months after such Captain, First Officer or Second
Officer was last known to the Company to have been interned or held prisoner of
war.
When after such twelve (12) month period it has still not been established
whether such pilots are alive or dead, Captains, First Officers and Second
Officers shall be allowed compensation at the salary specified in the Basic
Agreement from and after such twelve (12) month period until death is
established or until there is a sufficient presumption of death to permit payment
of the death benefit provided in Section 7 of this Supplemental Agreement.
In the event such Captain, First Officer or Second Officer is later found to be
alive, he shall receive retroactively the difference in pay between the total
compensation (including death benefit) paid by the Company under this Section
and the monthly amounts which would have been paid under Paragraph A of this
Section and such monthly pay shall then be resumed for the duration of
internment or imprisonment.
D. Captains, First Officers and Second Officers who while engaged in the MAC
Operation become missing and whose whereabouts become unknown shall be
allowed compensation at the salary specified in the Basic Agreement for a period
of twelve (12) months after disappearance or until such date as death is
established, whichever first occurs. If upon the expiration of the twelve (12)
month period any such Captain, First Officer or Second Officer is still missing and
his whereabouts are unknown, or if prior to that time his death is established, the
Page 140
Company shall pay the death benefit provided for in Section 7 of this
Supplemental Agreement.
The monthly compensation allowable under this Section to pilots interned,
held prisoner of war or missing shall be credited to such pilot on the books of the
Company and shall be disbursed by the Company in accordance with written
directions from such pilots.
F. Any payments due to any pilot under this Section which are not covered by a
written direction as above required shall be held by the Company for such pilot
and in the event of his death shall be paid to the legal representative of his
estate.
G. The monthly compensation allowable under this Section shall be in lieu of all
compensation provided for by any law in respect to persons interned, held
prisoner of war or missing and shall also be in lieu of all salary, expenses and
subsistence during the period in which a pilot is interned, held prisoner of war or
missing.
H. Pilots shall maintain and continue to accrue seniority and longevity for pay
purposes during periods in which they are interned, held prisoner of war or
missing.
SECTION 10
GENERAL CONDITIONS
The provisions for death benefits in Section 7 and for disability benefits in
Section 8 are intended to apply to Captains, First Officers and Second Officers
while assigned to the MAC Operation, as follows:
A-1- When outside the continental United States, in connection with or as a
result of said operations irrespective of whether they are actually engaged in
active duty at the time of death or injury.
A-2- When within the continental United States, only if they are actually
engaged in the course of employment at the time of death or injury, except that when not actually engaged in the course of employment at the time of death or
injury, Captains, First Officers and Second Officers shall receive the group
insurance benefits normally in effect under the Agreement.
Page 141
The obligation of the Company to make any payment is subject to the
condition that the injury or disease resulting in the permanent total or partial
disability shall not have been occasioned solely by his attempted suicide.
SECTION 11
MISCELLANEOUS PROVISIONS
All provisions of the 1985 Pilot Agreement not specifically amended or
excepted by this Supplemental Agreement shall remain in full force and effect
and applicable to the Company's MAC Operation.
B. In the event the MAC Operation requires passports and inoculations for pilots,
any actual necessary expenses shall be borne by the Company. Inoculations will
be given at Company designated places.
C. Pilots will continue to fly any MAC flight deemed necessary to the national
defense provided such flights are solely military in nature and carry cargo
composed entirely of military requirements even if at the time such military flights
are necessary the pilots have withdrawn their airline service.
C-1- To assure the movement of a particular flight under such circumstances,
the Association will require certification by an appropriate Company official
designated by the Company that such flight is in accordance with specifications
set forth above. This certification shall be provided prior to movement of the flight
where feasible or, where not feasible, promptly thereafter.
C-2- Pilots who fly such military traffic will not lose any benefits accruing to
other pilots which they would otherwise have received upon settlement of an
unresolved labor dispute.
D. No pilot shall be required to move to the location of a critical MAC assignment,
unless required by the government. Moving expenses will not be authorized until
ninety (90) days after the date of the MAC vacancy. All moving shall be in
accordance with Section 10 of the Basic Agreement.
E. This MAC Supplemental Agreement shall become effective June 15, 1985 and
shall run concurrently with the 1985 Pilot Agreement.
IN WITNESS WHEREOF, the parties have signed this Supplemental Agreement
this 9th day of May, 1991.
Page 142
|
WITNESS: |
FOR UNITED AIR LINES, INC. |
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/s/ G.L. Andrews /s/ T.A. McClone /s/ R.W. Rosinia |
/s/ J.R. Samolis John R. Samolis Vice President Employee Relations |
|
WITNESS : |
FOR THE AIR LINE PILOTS IN THE SERVICE OF UNITED AIR LINES, INC. |
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/s/ T.P. Austin |
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/s/ C.A. Rine /s/ L.J. Balestra /s/ H.E. Stepinsky |
/s/ J. Randolph Babbit J. Randolph Babbitt, President Air Line Pilots Association, International |
Cessation of work
LETTER OF AGREEMENT
between
UNITED AIR LINES, INC.
and THE AIR LINE PILOTS
in the service of
UNITED AIR LINES, INC.
as represented by
THE AIR LINE PILOTS ASSOCIATION,
INTERNATIONAL
THIS LETTER OF AGREEMENT is made and entered into in accordance with
the provisions of Title II of the Railway Labor Act, as amended, by and between
UNITED AIR LINES, INC. (hereinafter referred to as the "Company") and the AIR
LINE PILOTS in the service of UNITED AIR LINES, INC. as represented by the
AIR LINE PILOTS ASSOCIATION, INTERNATIONAL (hereinafter referred to as
the "Association").
W I T N E S S E T H:
WHEREAS, there are occasions when the Company is confronted with the
cessation of work by other Company employees of indefinite duration, and
WHEREAS, it is to the mutual interest of the parties to discuss and review the
alternatives available and problems generated by such cessation of work.
NOW, THEREFORE, it is mutually agreed that:
Page 143
The Association will be advised as events develop that could lead to a
cessation of work by other employees of the Company.
The Association will be apprised of the Company's plan of action as it affects
pilots in the event of such cessation of work.
The Company will afford the Association the opportunity to consult with and
make recommendations as to any pilot problems associated with such cessation
of work, other than those specifically agreed to in the attached Notice.
This Letter of Agreement shall be effective as of the date of signing and shall
Run concurrently with the duration of the 1991 Pilot Agreement.
IN WITNESS WHEREOF, the parties have signed this Letter of Agreement this
9th day of May, 1991.
|
WITNESS: |
FOR UNITED AIR LINES, INC. |
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/s/ G.L. Andrews /s/ T.A. McClone /s/ R.W. Rosinia |
/s/ J.R. Samolis John R. Samolis Vice President Employee Relations |
|
WITNESS : |
FOR THE AIR LINE PILOTS IN THE SERVICE OF UNITED AIR LINES, INC. |
|
/s/ T.P. Austin |
|
|
/s/ C.A. Rine /s/ L.J. Balestra /s/ H.E. Stepinsky |
/s/ J. Randolph Babbit J. Randolph Babbitt, President Air Line Pilots Association, International |
Page 144
TO: ALL FLIGHT OFFICERS AFFECTED BY TEMPORARY CESSATION OF
WORK
The purpose of this notice is to outline your status with regard to compensation
and benefits during this period of work cessation. You will be returned to service
as soon as possible after our services have been restored and work becomes
available.
If the____________________________strikes, you will be continued on pay
status through the___________day after the cessation of work. This period of
pay status may be extended if, after discussion with the Association, it is
determined that a longer period is operationally necessary. Pilots will be returned
to their home domicile or UA station nearest their home at no expense to
themselves. Pilots may be required to fly crew ferries to accomplish this
requirement. It is understood that a pilot who is not returned to his domicile will
continue to be on pay status until he is actually returned to his domicile or on the
basis of planned arrival time at this domicile, if the pilot requests to remain at an
outer station for personal reasons.
1. Address and Telephone Number
You should be sure your Flight Office has your present address and telephone
number and you should keep them advised of any change during this period.
2. Company and Classification Seniority
Your Company seniority, pilot seniority and pilot longevity will continue to accrue.
3. Compensation
Each pilot will be paid the portion of his salary based on the application of
Section 3-C-1 and 3-C-2 of the Agreement.
4. Bids and Preferencing
Although the strike may require changes in the planned activations, activations
Will continue for pilots who are qualified to assume their new assignment and
who possess a notice of activation which has not been cancelled. All other pilots
will be retained in their equipment, status and domicile assignment as of the date
of the cessation of work. For the purpose of line assignment upon resumption of
service, the Company shall continue to post schedules, comprised of the
Company's planned operation, for pilot preferencing during the period of the
strike. Pilots will not be required to cross a picket line in order to preference
Page 145
schedules.
5. Vacation Status
All pilots who were on vacation status at the commencement of the strike will
remain on that status through the duration of the scheduled vacation period.
Pilots scheduled for a vacation during the work stoppage, will be certified for
vacation pay as scheduled. Vacations may not be deferred.
6. Sick Leave
Our sick leave pay policy is to compensate employees for potential lost earnings
due to illness during their normal working hours. If you are ill during the cessation
of work, you are not entitled to either occupational or non-occupational sick leave
pay. However, pilots exhausting sick leave prior to permanent grounding will
continue to receive the remainder of their accrued sick leave during the cessation
of work. Also, continuation of occupational or non-occupational sick leave pay for
hardship cases will be considered jointly by the Company and the Association on
an individual basis.
7. Insurance
7-a- United realizes that your Group Insurance protection will afford you
considerable peace of mind during this emergency. Consequently, your Basic
Group Life Insurance, Supplemental Contributory Life Insurance, Accidental
Death and Dismemberment Insurance, the Accident-Sickness and Dental Plan
and the Health Maintenance Organization Plan will remain in effect until:
7-a-1- Notice of termination of insurance is mailed to you at your last
known address.
7-a-2- You resign or begin permanent active employment with a company
other than United.
7-b- The contribution you would have been required to pay to maintain the
Supplemental Contributory Life Insurance and 24-Hour Personal Accident
Insurance protection will be deducted from your pay following your resumption of
active employment.
7-c- Accident-Sickness-Dental Insurance claims can be filed in the normal
manner during this emergency.
7-d- In the event you do not wish to have your insurance continued, contact
your Flight Office for the form letter which you must complete, sign and return to
EXOIN within ten (10) days following the date of the work stoppage.
Page 146
8. Retirement Income Plan
Participation and contributions are discontinued during any period in which no
pay is received. Any monthly earnings, at less than full compensation due to the
strike, will be excluded from consideration in final earnings for pension or
disability benefits under the Fixed Plan. In determining the annual average of the
participant's earnings, the denominator shall not include those months for which
earnings have been disregarded in accordance with this provision.
9. Unemployment Compensation
You are eligible to apply for unemployment compensation. Eligibility for benefits
Is determined by the particular State Unemployment Compensation Bureau.
10. Credit Union
10-a- Existing Loans
Employees are expected to continue making loan repayments, unless the
Credit Union declares a general suspension of loan repayments. Hardship
cases are reviewable on an individual basis.
10-b- Savings
Withdrawal by mail will be permitted.
10-c- New Loans
New loans will be considered on an emergency basis only.
11. All time periods set forth in Section 6-C, 8, 17 and 18 of the Pilot Agreement
will be extended to reflect the period of cessation of work, except as specified in
Paragraph 5 above.
12. Return To Service
When the cessation of work is over and work again becomes available, your
Flight Office or OPBCM will get in touch with you as quickly as possible. All pilots
will return to service simultaneously on a date determined by the Company.
We hope for an early resumption of service.
Page 147
/s/ John R. Samolis
John R. Samolis
Vice President
Employee Relations
Accepted and agreed to this
9th day of May, 1991.
/s/ F. C. Dubinsky
F. C. Dubinsky, Chairman.
UA/ALPA Master Executive Council.
UP-PAC
LETTER OF AGREEMENT
between
UNITED AIRLINES, INC.
and THE AIR LINE PILOTS
in the service of
UNITED AIR LINES, INC.
as represented by
THE AIR LINE PILOTS ASSOCIATION,
INTERNATIONAL
THIS LETTER OF AGREEMENT is made and entered into in accordance with
the provisions of the Railway Labor Act, as amended, by and between UNITED
AIR LINES, INC. (hereinafter referred to as the "Company") and the AIR LINE
PILOTS in the service of UNITED AIR LINES, INC. as represented by the AIR
LINE PILOTS ASSOCIATION, INTERNATIONAL (hereinafter referred to as the
"Association").
W I T N E S S E T H:
It is mutually agreed:
The Company agrees to deduct a monthly contribution to the United Pilots
Political Action Committee (referred to herein as "UP-PAC") from the pay of each
pilot who voluntarily authorizes such contributions on the forms provided for that
purpose by UP-PAC (referred to herein as "Check-Off Forms").
B. The language of those forms shall be as follows:
TO: United Air Lines, Inc.
Page 148
I hereby authorize and direct the Company named above to deduct
$__________ of my gross earnings per month and to remit that amount to the
United Pilots Political Action Committee, Air Line Pilots Association (UP-PAC,
ALPA).
This authorization is made based on my specific understanding that:
The signing of this authorization card and the making of these voluntary
contributions are not conditions of membership in the Union or of my
employment by my employer;
Any guideline amount suggest by UP-PAC, ALPA or its representatives is only
a suggestion and I may contribute more or less and will not be favored or
disadvantaged by the Union for doing so; I may refuse to contribute without
reprisal; and. UP-PAC, ALPA, which is connected with the United Pilots
Master Executive Council of the Air Line Pilots Association, International, and
which is affiliated with the Air Line Pilots Association Political Action
Committee, may use the money it receives solely for making contributions to
and expenditure for candidates for elected offices and for other political
activities at the federal, state, and/or local level consistent with applicable laws
relating to such activities.
This authorization shall remain in full force and effect
until revoked in writing by me, pursuant to the provisions of the Agreement
between United Air Lines, Inc. and the Air Line Pilots Association,
International.
I further certify that I am either a United States citizen or a foreign national
Lawfully admitted to the United States for permanent residence as defined by
section 101(s) (20) of the Immigration and Nationality Act (8 U.S.C. 1101(s)
(20)).
Name:__________________________________________________
File Number:_____________________________________________
Residence:______________________________________________
Address:________________________________________________
Signature:_______________________________________________
Date:___________________________________________________
Page 149
Authorized by the United Pilots Master Executive Council of the Air Line Pilots
Association, International on behalf of a fundraising effort for United Pilots
Political Action Committee.
C. All Check-Off Forms will be submitted through the Chairman of the Master
Executive Council of the Association who will forward the original signed copy to
the Payroll Accounting Manager, Executive Offices, Chicago, Illinois. A properly
executed Check-Off Form, filed before the 15th of any month, will become
effective the 1st of the month following its receipt by the Payroll Section of the
Accounting Department, Chicago, Illinois. Illegible or improperly executed forms
will be returned to the Chairman of the Master Executive Council of the
Association.
D. Any notice of revocation as set forth in the Check-Off Form must be in writing,
signed by the employee, and delivered by certified mail, addressed to the Payroll
Accounting Manager, United Air Lines, Inc., P. O. Box 66100, Chicago, Illinois
60666, with a copy to the Chairman of the Master Executive Council as soon as
processed through Company payroll procedures. Check-Off Form and notices so
received by the Company will be stamp-dated on the date received and will
constitute notice to the Company of the date received and not when
mailed.
E. Deduction of a pilot's contributions shall be made each month provided there
is a sufficient balance due the pilot at the time after all other deductions
authorized by the pilot or required by law (including money claims of the
Company and the Credit Union) have been satisfied. Within a reasonable time
after the second regular paycheck issued each month, the Company will remit to
the UP-PAC a check in payment of contributions collected for that month
pursuant to outstanding and unrevoked Check-Off Forms, together with a list of
the names of those pilots for whom contributions were deducted and the amount
deducted for each such pilot.
A pilot who has executed a Check-Off Form and (1) who resigns from the
Company; (2) who is laid off; or is (3) otherwise terminated from the employ of
the Company shall be deemed to have automatically revoked his assignment as
of the date of such action and if he (1) is rehired; (2) is recalled; or (3)
reemployed, further deductions of UP-PAC contributions will be made only upon
execution and receipt of another Check-Off Form.
It will be the Association's responsibility to verify apparent errors in deduction
of UP-PAC contributions before contacting the Company Payroll Accounting
Manager.
United Air Lines, Inc. shall be held harmless and indemnified by the
Page 150
Association for any claims which may be made by the pilot or pilots by virtue of
the wrongful application and misapplication of any of the terms of this Section.
The Company shall also be held harmless and indemnified by the Association for
any claims, expenses, and judgements (including reasonable attorney fees)
which may arise out of the use of the Company's payroll deduction process for
funds transmitted to UP-PAC for making contributions to and expenditures for
candidates for state and local offices.
The Association shall pay the Company the reasonable costs incurred in
implementing and maintaining this Section.
J. The Association hereby certifies to the Company that:
J-1- No assignment and authorization will be transmitted to the Company
hereunder which was obtained by the Association under the twice-yearly
solicitation provisions of Section 441b.(b) (4) (B) of Title 2 of the United States
Code;
J-2- All funds transmitted to the UP-PAC hereunder shall be used solely in
connection with federal, state and local elections.
IN WITNESS WHEREOF, the parties have signed this Agreement this 9th day of
May, 1991.
|
WITNESS: |
FOR UNITED AIR LINES, INC. |
|
|
|
|
/s/ G.L. Andrews /s/ T.A. McClone /s/ R.W. Rosinia |
/s/ J.R. Samolis John R. Samolis Vice President Employee Relations |
|
WITNESS : |
FOR THE AIR LINE PILOTS IN THE SERVICE OF UNITED AIR LINES, INC. |
|
/s/ T.P. Austin |
|
|
/s/ C.A. Rine /s/ L.J. Balestra /s/ H.E. Stepinsky |
/s/ J. Randolph Babbit J. Randolph Babbitt, President Air Line Pilots Association, International |
Page 151
CLR
UNITED AIRLINES
May 9, 1991
Captain F. C. Dubinsky, Chairman
UA/ALPA Master Executive Council
Air Line Pilots Association, International
10700 W. Higgins Road, Suite 200
Rosemont, IL 60018
Dear Captain Dubinsky:
Because the Command/Leadership/Resource Management Seminar Training
Program is a new concept in the airline industry, it is necessary to have an
understanding of the application of some provisions of the Agreement. This
Letter of Understanding outlines these provisions and other stipulations as they
apply to pilots involved in C/L/ R seminar training.
1. Compensation - Compensation will be paid in accordance with Section 9 of the
Agreement.
2. Expenses - Meal expense in accordance with Section 4-A-1 of the Agreement
will be paid, minus the actual expense incurred by the Company for meals
provided during the training session. Reasonable actual ground transportation
expenses will be paid between the airport and the location of the C/L/R seminar
training. Lodging will be provided by the Company.
3. Duty Day - In order for training to be effective, long duty days are a basic
requirement for the C/L/R seminar program. The normal contractual training
schedule requirements of the Basic and Supplemental Agreements will not apply.
In any event, no duty day shall exceed 14:15 hours except by consent of the
participants.
4. Assignment to Training - Notification and assignment to seminar training will
be prior to pilot schedule preferencing whenever practical, but in no case less
than seven (7) days prior to commencement of Command/Leadership/Resource
Management Seminar Training. Short notice scheduling will be limited to cases
where a previously scheduled pilot has had to cancel his/her training for any
reason.
Page 152
5. Completion of Training - Upon completion of C/L/R seminar training, a pilot will
be given not less than one (1) calendar day free of all duty at his home domicile,
provided he is not scheduled for such time off in his line of flying or as a reserve.
The pilot will be given pay and flight time credit for any trip(s) he must drop to
provide such calendar day off.
6. Alternates for Seminars - Alternates will be scheduled for each seminar. Pilots
who are designated as alternates will be scheduled for two seminars,
approximately two weeks apart. Designated alternates will stand by for the first of
these seminars, and if they are released to return to their domicile, will attend
and participate as a scheduled attendee in the second seminar approximately
two weeks later. Alternates will be given pay and flight time credit for any trip(s)
they must drop for their regularly scheduled seminar and for the preceding
seminar for which they are designated as an alternate. Pilots who are scheduled
but do not attend, and are replaced by an alternate, will be scheduled
approximately two weeks later in the seminar for which the alternate was
scheduled as a regular participant
7. Modifications to C/L/R Seminar Training - to retain ALPA support for the
program, the Company and ALPA must agree on any subsequent modifications.
8. Disciplinary Action - No information resulting from a pilot's participation in a
C/L/R seminar may be used in any disciplinary action nor may be used in any
way to the detriment of any United pilot.
9. Record Keeping - No records of pilot performance during C/L/R seminar
training will be kept by anyone inside or outside the Company.
10. Additional Phases of C/L/R Training - Development of any additional phases
of C/L/R training will be with full participation by ALPA representatives and will
not be implemented without review by the United MEC, or its Officers.
Sincerely,
/s/ H. A. Langer
Hart A. Langer
Senior Vice President
Flight Operations
Accepted and agreed to this
9th day of May, 1991.
/s/ F. C. Dubinsky
F. C. Dubinsky, Chairman
UA/ALPA Master Executive Council
Page 153
Dues Check-Off
AGREEMENT
between
UNITED AIR LINES, INC.
and
THE AIR LINE PILOTS
in the service of
UNITED AIR LINES, INC.
as represented by
THE AIR LINE PILOTS ASSOCIATION,
INTERNATIONAL
THIS AGREEMENT is made and entered into in accordance with the provisions
of the Railway Labor Act, as amended, by and between UNITED AIR LINES,
INC. (hereinafter referred to as the "Company") and the AIR LINE PILOTS
ASSOCIATION, INTERNATIONAL (hereinafter referred to as the "Association").
W I T N E S S E T H:
It is mutually agreed:
During the life of the 1991 Pilot Agreement, the Company will deduct from the
pay of the members of the Association the appropriate amounts described in
sub-paragraph A-1 and A-2 below provided such member of the Association
voluntarily executes one of the following agreed upon forms which will be
prepared and furnished by the Association as a "Check-Off Form."
A-1- ASSIGNMENT AND AUTHORIZATION FOR VOLUNTARY CHECK-
OFF OF ASSOCIATION DUES
I, _____________________________, hereby authorize and direct United Air
Lines, Inc. to deduct 1.35% of my gross earnings as standard membership
dues (or such standard monthly membership dues as may hereafter be
established by the Association). Such amount so deducted is hereby assigned
to the AIR LINE PILOTS ASSOCIATION, INTERNATIONAL, subject to all the
terms and provisions of the applicable collective bargaining agreement. This
assignment and authorization may be revoked by me in writing after the
expiration of one (1) year from the date hereof, or the time this is signed,
whichever occurs sooner. A copy of any such revocation will be sent to the
Chairman of the Master Executive Council.
Page 154
Signature of Employees _____________________________________
Street Address ____________________________________________
City _____________________________________________________
File Number_________________
Domicile________________________
A-2- ASSIGNMENT AND AUTHORIZATION FOR VOLUNTARY CHECK-
OFF OF PAST ASSOCIATION DUES OBLIGATIONS
I,______________________________, hereby authorize and direct United Air
Lines, Inc. to deduct $_________ of my monthly gross earnings up to a total
dollar amount of $_______, to pay for back dues owed to the Association.
Such amount so deducted is hereby assigned to the AIR LINE PILOTS
ASSOCIATION, INTERNATIONAL, subject to all the terms and conditions of
the Railway Labor Act, as amended, and the provisions of the applicable
collective bargaining agreement. This assignment and authorization may be
revoked by me in writing after the expiration of one (1) year from the date
hereof, or upon the renewable date of the Pilots' Agreement in effect at the
time this is signed, whichever occurs sooner. A copy of any such revocation
will be sent to the Chairman of the Master Executive Council.
Signature of Employees _____________________________________
Street Address ____________________________________________
City _____________________________________________________
File Number_________________ Domicile_______________________
B. All Check-Off Forms will be submitted through the Chairman of the Master
Executive Council who will forward the original signed copy to the Payroll
Accounting Manager, Executive Offices, Chicago, Illinois. A properly executed
Check-Off Form, filed before the 15th of any month, will become effective the 1st
of the month following its receipt by the Payroll Section of the Accounting
Department, Chicago, Illinois. Illegible or improperly executed forms will be
returned to the Chairman of the Master Executive Council of the Association.
C. Any notice of revocation as set forth in the Check-Off Form must be in writing,
signed by the employee and delivered by certified mail, addressed to the Payroll
Accounting Manager, United Air Lines, Inc., P. O. Box 66100, Chicago, Illinois
60666, with a copy to the Chairman of the Master Executive Council as soon as
processed through Company payroll procedures. Check-Off Form and notices so
received by the Company will be stamp-dated on the date received and will
constitute notice to the Company of the date received and not when mailed.
Page 155
D. Deduction of total members' total obligations shall be made from all
paychecks issued each month provided there is a sufficient balance due the
employee at the time after all other deductions authorized by the employee or
required by law (including money claims of the Company and the Credit Union)
have been satisfied. Within a reasonable time after the second regular paycheck
issued each month, the Company will remit to the Association a check in
payment of all dues collected for that month pursuant to outstanding and
unrevoked Check-Off Forms.
E. An employee who has executed a Check-Off Form and who has been (1)
transferred or promoted to a job outside of the Flight Operations Division; (2) who
resigns from the Company; (3) who is laid off; or is (4) otherwise terminated from
the employ of the Company shall be deemed to have automatically revoked his
assignment as of the date of such action and if he (1) transfers back or returns to
a job covered by the Agreement; (2) is rehired; (3) is recalled; or (4) reemployed,
further deductions of Association dues will be made only upon execution and
receipt of another Check-Off Form.
F. It will be the Association's responsibility to verify apparent errors or back dues
owed by an individual Association member before contacting the Company
Payroll Accounting Manager or payroll deduction of such missed collections.
G. In cases where a deduction is made which duplicates a payment already
made to the Association by an employee and where a deduction is not in
conformity with the provisions of the Association Constitution and Bylaws,
refunds to the employee will be made by the Association.
H. United Air Lines, Inc. shall be held harmless and indemnified by the
Association for any claims which may be made by the employee or employees by
virtue of the wrongful application and misapplication of any of the terms of this
Agreement.
I. This Agreement shall become effective as of the date of signing and shall be
subject to changes in the same manner as specified in Section 22 of the 1991
Pilots' Employment Agreement.
J. The terms of this Letter of Agreement 91-27 do not provide for the automatic
revocation of the pilot's assignment under such circumstances. The Company
will therefore make the appropriate changes to the payroll process that recognize
the revocation of the pilot's dues check-off assignment only under the
circumstances expressly stated in Letter of Agreement 91-27 Section A-1,
Section A-2 and Section E.
Page 156
IN WITNESS WHEREOF, the parties have signed this Agreement this 9th day of
May, 1991.
|
WITNESS: |
FOR UNITED AIR LINES, INC. |
|
|
|
|
/s/ G.L. Andrews /s/ T.A. McClone /s/ R.W. Rosinia |
/s/ J.R. Samolis John R. Samolis Vice President Employee Relations |
|
WITNESS : |
FOR THE AIR LINE PILOTS IN THE SERVICE OF UNITED AIR LINES, INC. |
|
/s/ T.P. Austin |
|
|
/s/ C.A. Rine /s/ L.J. Balestra /s/ H.E. Stepinsky |
/s/ J. Randolph Babbit J. Randolph Babbitt, President Air Line Pilots Association, International |
Revised as of this 26th day of October, 2000.
/s/ William P. Hobgood
William P. Hobgood
Senior Vice President
People
/s/ F.C. Dubinsky
Captain F.C. Dubinsky
Chairman
UAL/ALPA Master Executive Council.
MEC Officer displacement
LETTER OF AGREEMENT
between
UNITED AIRLINES, INC.
and
THE AIR LINE PILOTS
in the service of
UNITED AIRLINES, INC.
as represented by
THE AIR LINE PILOTS ASSOCIATION,
INTERNATIONAL
Page 157
THIS LETTER OF AGREEMENT is made and entered into in accordance with
the provisions of the Railway Labor Act, as amended, by and between UNITED
AIRLINES, INC. (hereinafter referred to as the "Company") and the AIR LINE
PILOTS in the service of UNITED AIRLINES, INC., as represented by the AIR
LINE PILOTS ASSOCIATION, INTERNATIONAL (hereinafter referred to as the
"Association").
W I T N E S S E T H:
NOW, THEREFORE, it is mutually agreed:
1. The MEC Officers shall be paid, at the appropriate hourly pay rates, for eighty-
one (81) hours, or eighty-five (85) hours if holding an international assignment,
plus the value of any legal inbound each month during their terms. During such
term of office, the Company will not assign specific vacation periods to the
Officers with the understanding that it is the responsibility of each MEC Officer to
arrange for the vacation time off which he is due. At the beginning of each
vacation year, Officers will be provided written notification of their responsibilities
under this provision. Upon returning to line flying at the end of his term of office,
all vacation due to each Officer in the current and prior vacation years will be
considered to have been assigned and taken. Full time National Officers also
shall be subject to this vacation procedure.
2. The pilot members of the ALPA Negotiating Committee shall be displaced from
their scheduled trips when meeting with the Company during the term of this
Agreement. During Section 6 negotiations, or during other negotiations that are
anticipated to cover a monthly bid period, the pilot members of the Negotiating
Committee shall be paid, at the appropriate hourly pay rates, for eighty-one (81)
hours, or eighty-five (85) hours if holding an international assignment, plus the
value of any legal inbound for the duration of those negotiations.
3. When required to attend formal meetings with the Company in their capacity
as MEC Committee Members, the pilot members of the System Schedule
Committee, the Central Air Safety Committee, the Retirement and Insurance
Committee, the Hotel Committee (not including hotel inspections) and the
Employee Assistance Committee shall be displaced from their schedules in order
to attend such meetings.
4. Notwithstanding the provisions of Section 20-H, any LEC Officer shall be
permitted to trade a trip from his line of flying for any other trip which is in "open
flying" in order to make himself available to conduct ALPA business.
Page 158
5. Any LEC Officer may request to be displaced from his trip(s) for the purpose of
conducting Association business. His Flight Manager will determine if such
displacement(s) is possible, based upon the availability of management pilots
who have a need to perform such flying. Trips which are not covered by
management pilots on a displacement basis are subject to the existing procedure
covering dropped trips for Association business.
6. When pilots are removed from schedule at ALPA request, except when
displacement is provided by this Letter of Agreement, the Company shall pay
each such pilot as if he had performed his scheduled duties and will then bill
ALPA for the amount of flight pay associated with those dropped trips, including
the actual cost of fringe benefits.
7. When a special MEC meeting is held for the purpose of conducting business
at the Company's request, the Company will pay all flight pay loss incurred as a
result of that meeting.
IN WITNESS WHEREOF, the parties have signed this Letter of Agreement this
9th day of May, 1991.
|
WITNESS: |
FOR UNITED AIR LINES, INC. |
|
|
|
|
/s/ G.L. Andrews /s/ T.A. McClone /s/ R.W. Rosinia |
/s/ J.R. Samolis John R. Samolis Vice President Employee Relations |
|
WITNESS : |
FOR THE AIR LINE PILOTS IN THE SERVICE OF UNITED AIR LINES, INC. |
|
/s/ T.P. Austin |
|
|
/s/ C.A. Rine /s/ L.J. Balestra /s/ H.E. Stepinsky |
/s/ J. Randolph Babbit J. Randolph Babbitt, President Air Line Pilots Association, International |
Page 159
Revised as of this 26th day of October, 2000.
/s/ William P. Hobgood
William P. Hobgood
Senior Vice President
People
/s/ F.C. Dubinsky
Captain F.C. Dubinsky
Chairman
UAL/ALPA Master Executive Council.
Age 59 By Pass
SUPPLEMENTAL
LETTER OF AGREEMENT
between
UNITED AIR LINES, INC.
and
THE AIR LINE PILOTS
in the service of
UNITED AIR LINES, INC.
as represented by
THE AIR LINE PILOTS ASSOCIATION,
INTERNATIONAL
THIS SUPPLEMENTAL LETTER OF AGREEMENT is made and entered into in
accordance with the provisions of Title II of the Railway Labor Act, as amended,
by and between UNITED AIR LINES, INC. (hereinafter referred to as the
"Company") and the AIR LINE PILOTS in the service of UNITED AIR LINES,
INC. as represented by the AIR LINE PILOTS ASSOCIATION, INTERNATIONAL
(hereinafter referred to as the "Association").
W I T N E S S E T H:
WHEREAS, the Company and the Association desire to supplement the 1991
Pilot Agreement, dated May 9, 1991, as it relates to the B-747-400, B-747, B777
and DC-10 Captain vacancies;
NOW, THEREFORE, it is mutually agreed and understood as follows:
Page 160
A. Notwithstanding the provisions of Section 8-D, any pilot who is awarded a B-
747- 400, B-747. B-777 or DC-10 Captain vacancy shall not be assigned to B-
747-400, B-747, B-777 or DC-10 transition training (training which, if performed
as scheduled, would produce a twenty-four (24) month freeze), if the planned
activation date of the vacancy is within one (1) year prior to his normal retirement
date.
A-1- Such pilot shall be paid based on B-747-400, B-747, B-777 or DC-10
Captain rates of pay, as applicable, from the date he would have assumed the
awarded vacancy on a "man-for-man" systemwide seniority basis, until his
actual retirement, provided he continues to remain qualified in his regular
assignment.
A-2- The period of entitlement for "man-for-man passover" pay to the
applicable pilot shall be determined on the awarding of each affected vacancy.
Age at Planned
For Example Activation Date Entitlement
Captain A 59 yrs. 10 mos. 2 months
Captain B 59 yrs. 6 mos. 4 months
Captain C 59 yrs. 2 mos. 4 months
Captain D 58 yrs. 1 mo. Trained
B.
A pilot receiving Captain pay under the provisions of Paragraph A-1 above,may not bid and be awarded a higher paying Captain vacancy under this
provision which has an advertised effective date prior to twelve (12) months
following the date he commenced receiving passover pay.
C. The fact that a pilot is receiving DC-10, B-747 or B-747-400 pay under the
provisions of Paragraph A above, does not prevent him from exercising bidding
rights under Section 8-D to other than DC-10, B-747 or B-747-400 assignments.
D. It shall be the responsibility of a pilot who receives an "alternate" vacancy
under the provisions of Paragraph A-1 and A-2 above to keep his BIDREQ
updated if he wants to be considered for the awarding of subsequent pay-only
vacancies.
E. Notwithstanding any bid restriction ("freeze") which a pilot may have incurred
by the application of paragraph 8-D-6-a resulting from his bidding and being
awarded a vacancy that is not subject to the provisions of this letter, the pilot
shall not be restricted from bidding and being awarded an assignment for which
Page 161
he will receive by-pass pay under the terms of this Letter.
F. This Supplemental Letter of Agreement shall continue in full force and effect
concurrently with Section 22-C of the Pilot Agreement.
IN WITNESS WHEREOF, the parties have signed this Supplemental Letter of
Agreement this 9th day of May, 1991.
|
WITNESS: |
FOR UNITED AIR LINES, INC. |
|
|
|
|
/s/ G.L. Andrews /s/ T.A. McClone /s/ R.W. Rosinia |
/s/ J.R. Samolis John R. Samolis Vice President Employee Relations |
|
WITNESS : |
FOR THE AIR LINE PILOTS IN THE SERVICE OF UNITED AIR LINES, INC. |
|
/s/ T.P. Austin |
|
|
/s/ C.A. Rine /s/ L.J. Balestra /s/ H.E. Stepinsky |
/s/ J. Randolph Babbit J. Randolph Babbitt, President Air Line Pilots Association, International |
Revised as of July 12, 1994.
/s/ John R. Samolis
John R. Samolis
Vice President
Employee Relations
/s/ Roger D. Hall
Roger D. Hall, Chairman
UAL/ALPA Master Executive Council
Revised as of this 26th day of October, 2000.
/s/ William P. Hobgood
William P. Hobgood
Senior Vice President
People
Page 162
/s/ F.C. Dubinsky
Captain F.C. Dubinsky
Chairman
UAL/ALPA Master Executive Council
Agency Shop
SUPPLEMENTAL AGREEMENT
between
UNITED AIR LINES, INC.
and
THE AIR LINE PILOTS
in the service of
UNITED AIR LINES, INC.
as represented by
THE AIR LINE PILOTS ASSOCIATION,
INTERNATIONAL
THIS SUPPLEMENTAL AGREEMENT is made and entered into in accordance
with the Railway Labor Act, as amended, by and between UNITED AIR LINES,
INC. (hereinafter referred to as the "Company") and the AIR LINE PILOTS in the
service of UNITED AIR LINES, INC. as represented by the AIR LINE PILOTS
ASSOCIATION, INTERNATIONAL (hereinafter referred to as the "Association").
W I T N E S S E T H:
It is hereby mutually agreed:
A. Each pilot of the Company on the United Air Lines Pilots' System Seniority List
or the Second Officer Eligibility Seniority List shall be required, as a condition of
employment, beginning sixty (60) days after the completion of his probationary
period: (1) to be or become a member of the Association; or (2) to pay to the
Association a monthly service charge for the administration of this Agreement
and representation of the pilot. Such monthly service charge shall be equal to the
Association's regular monthly dues, initiation fee and periodic assessments,
including MEC assessments, which would be required to be paid by such pilot if
a member; provided that neither membership nor the payment of a service
charge shall be required in respect to any such pilot: (a) for whom membership is
not available upon the same terms and conditions generally applicable to any
other member; or (b) as to whom membership was denied or terminated for any
reason other than the failure to tender periodic dues, initiation fees and
assessments uniformly required by the Association or the United
Air Lines MEC as a condition of acquiring or retaining membership. The
Page 163
Association shall treat members and non-members alike in calculating the
amounts due, in establishing the due date of payments and in determining
whether a pilot's account is delinquent.
B. If any pilot of the Company on the United Air Lines Pilots' System Seniority
List or the Second Officer Eligibility Seniority List who is required under this
Agreement to make payment of a service charge, [and/or membership dues,
and/or initiation fees, and/or periodic assessments (as defined in Paragraph A)]
becomes delinquent in accordance with the Association's Constitution and By-
Laws in the making of such payments, the Association shall notify such pilot by
Registered Mail, Return Receipt Requested, copy to the Senior Vice President-
Human Resources of the Company, his successor or designee, that he is
delinquent in the payments specified above, and the total amount of money due
and the period for which he is delinquent and that he is subject to discharge as
an employee of the Company. Such letter shall also notify the pilot that he must
remit the required payment within a period of fifteen (15) days or be
discharged. The notice of delinquency required under this Paragraph shall be
deemed to be received by the pilot, whether or not it is personally received by
him, when mailed by the Treasurer of the Association by Registered Mail, Return
Receipt Requested, postage prepaid to the pilot's last known address or to any
other address which has been designated by the pilot. It shall be the duty of
every pilot covered by this Agreement to notify the Association's Membership
Services Department of every change in his home address or of an address
where the notice required by this paragraph can be sent and received by the
pilot, if the pilot's home address is at any time unacceptable for this purpose.
C. .If, upon the expiration of the fifteen (15) day period provided in Paragraph B
above, the pilot still remains delinquent, the Association shall certify in writing to
the Senior Vice President - Human Resources of the Company, his successor or
designee, copy to the pilot, both by Registered Mail, Return Receipt Requested,
that the pilot has failed to make payment within the grace period allowed and is,
therefore, to be discharged. The Senior Vice President - Human Resources, his
successor or designee, shall thereupon take proper steps to discharge such pilot
from the service of the Company as soon as possible and in any event within
twenty-one (21) days after receipt of the notice provided for herein, shall advise
the pilot of his termination.
D. A protest by a pilot who is to be discharged as the result of an interpretation or
application of the provisions of this Agreement shall be subject to the following
procedures:
D-1- A pilot who believes that the said provisions have not been properly
interpreted or applied as they pertain to him, may submit his request for review
in writing within ten (10) days after receipt of the notification from the Senior
Page 164
Vice President - Human Resources, as provided in Paragraph C above. The
request must be sent by Registered Mail, Return Receipt Requested, to the
Senior Vice President - Human Resources or his designee, who will review the
protest and render a decision in writing, not later than ten (10) days following
receipt of the protest.
D-2- The Senior Vice President - Human Resources or his designee shall
forward his decision to the pilot, with a copy to the Association, both by
Registered Mail, Return Receipt Requested. Said decision shall be final and
binding on all interested parties, unless appealed as hereinafter provided. If
the decision is not satisfactory to either the pilot or the Association, then either
may appeal within ten (10) days from the receipt of the decision, by filing a
notice of appeal. Such notice shall be sent to the other party and to the
Company, by Registered Mail, Return Receipt Requested. Appeal shall be
directed to a Neutral Referee who shall be agreed upon by the pilot and the
Association within ten (10) days after receipt of the notice of appeal. In the
event the parties fail to agree upon a Neutral Referee within the specified
period, either the pilot or the Association may request the National Mediation
Board to name such Neutral Referee. The hearing before the Neutral Referee
shall be held as soon as possible and the decision of the Neutral
Referee shall be requested within thirty (30) days after the hearing. The
decision of the Neutral Referee shall be final and binding on all parties to the
dispute. The fees and charges of such Neutral Referee shall be borne equally
by the pilot and the Association.
E. During the period a protest is being handled, as herein provided, and until final
decision is rendered by the Senior Vice President - Human Resources, his
designee or the Neutral Referee, the pilot shall not be discharged from the
Company nor lose any seniority rights because of non-compliance with the terms
and provisions herein.
F. A pilot discharged by the Company under the provisions herein shall be
deemed to have been "discharged for cause" within the meaning of the terms
and provisions of the Pilot Employment Agreement.
G. The Company shall be held harmless and indemnified by the Association for
any and all claims, awards or judgments, including court costs, which may result
from action by any pilot or pilots by virtue of the wrongful application or
misinterpretation of any of the terms of this Agreement.
H. It is understood that the requirements of Paragraph A above shall not apply to
any pilot during periods of time he holds a management position.
I. This Supplemental Agreement shall become effective as of the date of signing
Page 165
and shall be subject to changes in the same manner as specified in Section 22 of
the Pilots Employment Agreement.
IN WITNESS WHEREOF, the parties have signed this Supplemental Agreement
this 9th day of May, 1991.
|
WITNESS: |
FOR UNITED AIR LINES, INC. |
|
|
|
|
/s/ G.L. Andrews /s/ T.A. McClone /s/ R.W. Rosinia |
/s/ J.R. Samolis John R. Samolis Vice President Employee Relations |
|
WITNESS : |
FOR THE AIR LINE PILOTS IN THE SERVICE OF UNITED AIR LINES, INC. |
|
/s/ T.P. Austin |
|
|
/s/ C.A. Rine /s/ L.J. Balestra /s/ H.E. Stepinsky |
/s/ J. Randolph Babbit J. Randolph Babbitt, President Air Line Pilots Association, International |
LAX 737-300 and 757/767 domicile
UNITED AIRLINES
May 9, 1991
Captain F. C. Dubinsky, Chairman
UA/ALPA Master Executive Council
Air Line Pilots Association, International
6400 Shafer Court, Suite 700
Rosemont, IL 60018
Dear Captain Dubinsky:
During the current negotiations pursuant to Section 6 of the Railway Labor Act,
the parties agreed to execute this Agreement and immediately implement the
following provisions in conjunction with the Company announced opening of a
new B-737-300 equipment domicile at LAX.
Page 166
Effective upon the opening of the LAX B-737-300 equipment domicile the SNA
and LGB airports shall be considered "airports serving" the LAX domicile only for
LAX B-737- 300 pilots. The following stations and times are to be considered as
added to Section 5-G-1-b-(3) of the Agreement and shall only be applicable in
the scheduling of LAX B-737-300 pilots:
LAX - SNA 2:00
LAX - LGB
1:00BUR - SNA
2:15BUR - LGB
1:30ONT - SNA
2:00ONT - LGB
2:00LGB - SNA
1:00It is further agreed that the provisions of Section 4-D-3 of the Agreement shall
apply to LAX B-737-300 pilots scheduled in and out of LGB or SNA.
Additionally, for the scheduling of LAX based B-757/767 pilots the SNA airport
shall be considered as an airport "serving" the LAX B-757/767 equipment
domicile. The following station and time are to be considered as added to Section
5-G-1-b-(3) of the Agreement and shall be applicable in the scheduling of LAX B-
757/767 pilots:
LAX - SNA
2:00LAX - LGB
1:00BUR - SNA
2:15BUR - LGB
1:30ONT - SNA
2:00ONT - LGB
2:00LGB - SNA
1:00
Page 167
The provisions of Section 4-D-3 of the Agreement shall apply to LAX B-757/767
pilots scheduled into and out of SNA. B-757/767 pilots assigned to domiciles
other than LAX shall not be scheduled to cross-town between SNA and L.A.
basin airports.
Sincerely,
/s/ J. R. Samolis
John R. Samolis
Vice President
Employee Relations
Accepted and agreed to this
9th day of May, 1991.
/s/ F. C. Dubinsky
Captain F. C. Dubinsky, Chairman
UAL/ALPA Master Executive Council
Revised as of this 26th day of October, 2000.
/s/ William P. Hobgood
William P. Hobgood
Senior Vice President
People
/s/ F.C. Dubinsky
Captain F.C. Dubinsky
Chairman
UAL/ALPA Master Executive Council
Page 168
Company Personnel Policies
UNITED AIRLINES
May 9, 1991
Captain T. P. Austin, Chairman
UA/ALPA Negotiating Committee
Air Line Pilots Association, Int'l.
6400 Shafer Court, Suite 700
Rosemont, IL 60018
Dear Captain Austin:
During the negotiations leading to the 1991 Agreement, the Company committed
that company personnel policy which affect pilots would not be changed without
giving advance notice to the Association and affording them the opportunity to
comment.
Further, no change will be made to any Company personnel policy
which is contrary to any of the terms of the collective bargaining agreement
between the parties.
Sincerely,
/s/ J. R. Samolis
John R. Samolis
Vice President
Employee Relations
Notice of Pending Furlough
SUPPLEMENTAL
LETTER OF AGREEMENT
between
UNITED AIRLINES, INC.
and
THE AIR LINE PILOTS
in the service of
UNITED AIR LINES, INC.
as represented by
THE AIR LINE PILOTS ASSOCIATION,
INTERNATIONAL
Page 169
THIS SUPPLEMENTAL LETTER OF AGREEMENT is made and entered into in
accordance with the provisions of Title II of the Railway Labor Act, as amended,
by and between UNITED AIR LINES, INC. (hereinafter referred to as the
"Company") and the AIR LINE PILOTS in the service of UNITED AIR LINES,
INC. as represented by the AIR LINE PILOTS ASSOCIATION,
INTERNATIONAL.
W I T N E S S E T H:
WHEREAS, there are occasions when the Company may find it necessary to
implement the provisions of Section 7, Reduction in Personnel, of the
Agreement, and
WHEREAS, it is mutually beneficial to discuss creative and mutually
advantageous solutions to meet the above circumstances.
NOW, THEREFORE, it is mutually agreed:
1. The Association will be advised of a pending furlough.
2. The parties will attempt to achieve solutions consistent with the Company's
needs and the interest of the pilot group.
3. Should these efforts fail to produce results, the provisions of the Agreement
shall prevail.
IN WITNESS WHEREOF, the parties have signed this Supplemental Letter of
Agreement this 9th day of May, 1991.
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WITNESS: |
FOR UNITED AIR LINES, INC. |
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/s/ G.L. Andrews /s/ T.A. McClone /s/ R.W. Rosinia |
/s/ J.R. Samolis John R. Samolis Vice President Employee Relations |
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WITNESS : |
FOR THE AIR LINE PILOTS IN THE SERVICE OF UNITED AIR LINES, INC. |
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/s/ T.P. Austin |
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/s/ C.A. Rine /s/ L.J. Balestra /s/ H.E. Stepinsky |
/s/ J. Randolph Babbit J. Randolph Babbitt, President Air Line Pilots Association, International |
Page 170
Definition of Activation Date
UNITED AIRLINES
October 8, 1991
Captain F.C. Dubinsky, Chairman
UAL-ALPA Master Executive Council
Air Line Pilots Association, International
6400 Shafer Court, Suite 700
Rosemont, IL 60018
Dear Rick:
As a result of a recent grievance, the parties were made aware that it would be
useful to have a mutually agreed-to definition of the activation date of a pilot who
changes equipment and/or status. In discussions between the ALPA and
Company Negotiating Committees, it has been agreed that, for all purposes
related to the administration of the Collective Bargaining Agreement, a pilot shall
be considered activated in his new assignment at the beginning of the first
segment of his IOE. It is recognized that the pilot's pay may be changed prior to
activation as the result of the application of other provisions of the Agreement.
If the pilot's activation is delayed and he becomes entitled to a bump, his
Entitlement to bump shall expire if his bump is not received by the Company prior
to his first segment of IOE. In the event the pilot does not successfully complete
his IOE, his activation shall be cancelled; however any expired bump entitlement
will not be reinstated.
Sincerely,
/s/ G. L. Andrews
Gerald L. Andrews
Director of
Employee Relations - Flight
Accepted and agreed to this
6th day of November, 1991.
/s/ F. C. Dubinsky
F. C. Dubinsky, Chairman
UAL/ALPA Master Executive Council
Page 171
PAA Retiree Medical
UNITED AIRLINES
May 14, 1992
Mr. Roger D. Hall
UAL/MEC Chairman
Air Line Pilots Association
6400 Shafer Court, Suite 700
Rosemont, IL 60018
Dear Roger:
This is to confirm the agreement reached between United Airlines, Inc. ("United")
and the Air Line Pilots Association, International (the "Association") regarding
post-retirement medical insurance for former Pan American World Airways ("Pan
Am") pilots hired in connection with the Pacific and London route acquisitions,
Including such pilots who have already retired (the "Former Pan Am Pilots").
In lieu of any contrary provisions in the purchase agreements between United
and Pan Am or in other agreements between United and the Association, the
following rules shall apply to the Former Pan Am Pilots effective as of date of
signing.
1. Former Pan Am Pilots who have or had ten or more years of active service
with United at the time of actual retirement shall be eligible for retiree medical
insurance coverage in the same manner as all other United pilots who have
also satisfied the normal ten year service requirement, provided that, for the
sole purpose of determining the percentage of annual cost to be paid by the
retiree, as set forth in Letter 91-1 at paragraph A-2-I, such Former Pan Am
Pilots will be deemed to have length of service equal to their combined Pan
Am and United active service.
2. Former Pan Am Pilots who have or had less than ten years of active service
with United at the time of actual retirement shall be eligible to purchase retiree
medical insurance coverage at the actual cost of the insurance, as determined by
United's average cost of providing the same benefit to other pilots who have
satisfied the service requirement.
Page 172
Kindly indicate your agreement with the foregoing by signing in the space
Provided below.
Sincerely,
/s/ J. R. Samolis
John R. Samolis
Vice President
Employee Relations
Accepted and agreed to this
20th day of May, 1992.
/s/ R. D. Hall
Roger D. Hall, Chairman
UA/ALPA Master Executive Council
REVISED MIAMI "GRANDFATHER" FLIGHT OFFICERS
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SEN |
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# |
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|
CLS |
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|
CAP |
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COD |
|
FUTURE |
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T |
SPN |
NAME |
FILE# |
E |
CURRENT ASGN |
ASGN |
|
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|
|
|
|
|
RETIRE 3/31/ |
|
95 |
228 |
CARTER, JK |
89705 |
MD |
ORD B727 CAP |
92 |
|
|
116 |
SMITH,JJ |
61360 |
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MIA B727CAP (AGE 60) |
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JFK747S/O |
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SFO747S/ |
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|
|
ORD B727CAP (AGE 60 2/ |
O (ACT 7/ |
|
122 |
267 |
WHEELER, EF |
89796 |
|
6/92) |
92) |
|
|
198 |
GROSJEA N, JW |
89640 |
IL |
MIA B727 CAP(AGE 60) |
|
|
|
221 |
VANKLEEF,J |
89694 |
|
MIA B727 CAP (AGE 60) |
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|
234 |
BAKLEY, CJ |
89716 |
MD |
MIA B727 CAP (AGE 60) |
|
|
|
|
|
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|
RETIRE 9/30/ |
|
150 |
310 |
FOSS,RG |
89827 |
|
DCA B727 CAP(400P) |
92 |
|
290 |
459 |
LIVINGWAY,PA |
89885 |
|
ORD DC10 CAP |
|
|
312 |
481 |
LLEWLLYNTE |
02194 |
MD |
|
|
|
409 |
578 |
PALMER JT |
14666 |
|
JFK B747 CAP |
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|
628 |
802 |
MCCRAY,WF |
19611 |
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ORD B727 CAP |
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|
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|
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|
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|
RETIRE |
|
705 |
881 |
LADD,JR |
20403 |
SL |
DCA B727 CAP |
92 |
|
851 |
1034 |
GOOD- NIGHT, CA |
21569 |
|
JFK B747 CAP |
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|
108 |
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0 |
1270 |
WILEY,RW |
24267 |
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DCA B767 CAP |
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SFO 747 |
|
108 |
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CAP |
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8 |
1278 |
PETROVICH, EA |
25523 |
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ORD DC10 CAP |
(ACT 7/92) |
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109 |
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2 |
1282 |
LEWIS,TA |
24744 |
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DCA B767 CAP |
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130 |
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1 |
1496 |
YON,TP |
64089 |
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DCA B767 CAP |
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|
137 |
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1 |
1568 |
HUBBS, DW |
31016 |
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DCA B767 CAP |
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140 |
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9 |
1606 |
MOYES,JM |
61051 |
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DCA B767 CAP |
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141 |
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7 |
1614 |
HITT,RA |
31020 |
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DCA B767 CAP |
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142 |
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9 |
1626 |
PEARSON,DA |
31400 |
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ORD DC10 CAP |
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Page 174
REVISED MIAMI "GRANDFATHER" FLIGHT OFFICERS
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SEN |
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CLS |
CURRENT |
FUTURE |
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CAPT |
SPN |
NAME |
FILE # |
CODE |
ASGN |
ASGN |
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23 |
1106 |
SPRINGER, WA |
22370 |
MD |
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OFF LIST 4/30/ |
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559 |
1772 |
LONG,RS |
33917 |
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ORD B727 CAP |
92 |
|
933 |
2167 |
DUNNE,PA |
32907 |
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ORD B727 |
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F/O JFK 767 |
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CAP (ACT 6/ |
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474 |
2716 |
HEIN,RN |
51820 |
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JFK B747 F/O |
92) |
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031 |
3274 |
OSTRANDER, JH |
64017 |
MD |
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215 |
3458 |
BURLEIGH,RK |
03877 |
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ORD B727 CAP |
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461 |
3704 |
EKHOLM, RA |
05119 |
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LAX B400 F/O |
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695 |
3938 |
LANGEVIN, RE |
19049 |
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ORD B727 CAP |
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748 |
3993 |
WALLACE, JD |
28242 |
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DCA B737 CAP |
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843 |
4088 |
VOGT, DL |
35560 |
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DCA B737 CAP |
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|
930 |
4175 |
KURT, DL |
36272 |
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ORD B727 CAP |
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|
997 |
4242 |
FARMER, RC |
49618 |
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DCA B300 CAP |
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194 |
4439 |
RODRIGUEZ, RM |
22091 |
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JFK B747 F/O |
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405 |
4650 |
HAGAN, JO |
60576 |
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ORD B727 F/O |
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463 |
4708 |
KLUKOFSKY, HE |
21639 |
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JFK B747 F/O |
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464 |
4709 |
MANY,JF |
21669 |
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SFO B400 F/O |
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PAGE 175
REVISED MIAMI "GRANDFATHER" FLIGHT OFFICERS
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SEN* |
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CLS |
CURRENT |
FUTURE |
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CAPT |
SPN |
NAME |
FILE # |
CODE |
ASGN |
ASGN |
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122 |
3365 |
MARRON, RH |
74707 |
MD |
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OFFLIST 3/1/92 |
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568 |
3811 |
STEELE, EH |
05526 |
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JFK B747 IRP |
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630 |
3873 |
PAULSON, DL |
18816 |
|
DCA B727 F/O |
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549 |
4794 |
POULIN, AR |
21915 |
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JFK B747 F/O |
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571 |
4816 |
WOODS,PA |
20771 |
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DCA B727 F/O |
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JFK747 F/O |
|
640 |
4887 |
WYATT,WW |
19637 |
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DEN B727 F/O |
(ACT 8/92 |
|
664 |
4911 |
BOKLAN, WA |
19800 |
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LAX DC10 F/O |
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|
913 |
5160 |
HUTCHINS,WT |
53095 |
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JFK B747 S/O |
|
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235 |
5482 |
WARDE,MA |
40791 |
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ORD B727 F/O |
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526 |
5781 |
PERERA, NB |
79997 |
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DCA B300 F/O |
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661 |
5916 |
RATHGEB, PM |
99940 |
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JFK B767 F/O |
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674 |
5929 |
MUSSER, DJ |
99959 |
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JFK B767 F/O |
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DCA 767 |
|
724 |
5979 |
RAMDIAL, PA |
10826 |
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JFK B727 F/O |
F/O |
|
857 |
6112 |
BAHR, WR |
77158 |
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ORD B727 F/O |
(ACT 8/92) |
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Failedtrng. |
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functioning |
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As ORD 727 |
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984 |
6239 |
FIGUEROA, CH |
83195 |
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ORD B727 F/O |
S/O |
|
154 |
6409 |
WEITHERS, CO |
104606 |
|
DCA B767 F/O |
JFK 767 F/O |
|
186 |
6441 |
DIAZ, WR |
104623 |
|
JFK B767 F/O |
FAILED TRNG JFK 727 S/O |
|
187 |
6442 |
LAVORE, JM |
104634 |
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DCA B767 F/O |
|
|
219 |
6474 |
REGELMANN, K |
104644 |
|
ORD B727 F/O |
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341 |
6596 |
HARRISON,SW |
106492 |
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DCA B737 F/O |
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Page 176
Grievance Mediation
LETTER OF AGREEMENT
between
UNITED AIR LINES, INC.
and
THE AIR LINE PILOTS
Letter 92-5 Page 70
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Letter 92-5
Grievance Mediation
LETTER OF AGREEMENT
Between
UNITED AIR LINES, IN
And
THE AIR LINE PILOTS
in the service of
UNITED AIR LINES, INC
as represented by
THE AIR LINE PILOTS ASSOCIATION,
INTERNATIONAL
THIS LETTER OF AGREEMENT is made and entered into in accordance with
the provisions of Title II of the Railway Labor Act, as amended, by and between
UNITED AIRLINES, INC. (hereinafter referred to as the "Company") and the AIR
LINE PILOTS in the service of UNITED AIRLINES, INC., as represented by the
AIR LINE PILOTS ASSOCIATION, INTERNATIONAL (hereinafter referred to as
the "Association").
W I T N E S S E T H:
WHEREAS, there currently exists a substantial backlog of grievances pending a
hearing before the Five Member System Board of Adjustment, pursuant to
Section 18 of the current Basic Pilot Agreement, and;
WHEREAS, the Association and the Company are desirous of implementing an
alternate method of dispute resolution which will afford the parties an opportunity
to more expeditiously and efficiently resolve pending grievances;
NOW THEREFORE, it is mutually agreed that voluntary grievance mediation, as
An alternate method of dispute resolution, will be established on the following
basis:
1. The grievance mediation process, hereinafter referred to as the "Mediation
Conference" will be scheduled by mutual agreement of parties. The "Mediation
Conference" will be scheduled for three consecutive days of a single week.
2. The Association of the Company agree that only grievances which have been
submitted to the System Board of Adjustment in accordance with Section 18 of
the Basic Pilot Agreement, will be scheduled for a Mediation Conference.
Grievances will be selected for mediation only on a voluntary and mutual basis between the representatives of both parties.
Page 71 Letter 92-5
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3.
The grievant shall have the right to be present at the Mediation Conference.Attendance at the Mediation Conference will be limited to those people actually
involved in the Mediation Conference.
4. The Company and the Association shall each appoint a principal
spokesperson, who may be an attorney, for the Mediation Conference.
5. The representative of the parties will, no later than five days prior to the
scheduled date of Mediation Conference, present the mediator with a brief
written statement of the facts, the issue, and the arguments in support of their
position. If such a statement is not presented in written form, it may be
presented orally at the beginning of the Mediation Conference. However, such
oral statements will be limited to twenty (20) minutes in duration.
6. Proceeding before the mediator will be informal in nature and the rules of
evidence will not apply. The presentation of evidence will not be limited to that
which was presented at the prior stages of the grievance procedure.
7. No record of the Mediation Conference will be made. Any written material that
is presented to the mediator will be returned to the party presenting that material
at the termination of the Mediation Conference.
8. The mediator will have the authority to meet separately with either the
Association or the Company in the Mediation Conference, but will not have the
authority to compel the resolution of the grievance.
9. If no settlement is reached during the Mediation Conference, the mediator will
provide the parties with an immediate oral advisory decision, unless the
Association and the Company mutually agree that no decision will be provided.
When rendering an oral advisory decision, the mediator will state the grounds for
such decision.
10. Grievances settled during a Mediation Conference will not constitute a
precedent, unless the Association and the Company otherwise mutually agree;
in which case the parties will document the precedents understanding.
11. If no settlement is reached during the Mediation Conference, the grievance
may be heard by the System Board of Adjustment pursuant to Section 18 of the
Basic Pilot Agreement and in the normal course of the System Board's schedule.
12. In the event a grievance which has been the subject of a Mediation
Conference, is subsequently heard before the System Board of Adjustment, no
Letter 92-5 Page 72
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mediator may serve as the arbitrator. During the System Board proceeding on
such a grievance, no reference will be made to the fact that the grievance was
the subject of a Mediation Conference; nor will there be any reference to
statements made, documents provided, or actions taken by either the mediator
or the participants during the course of a Mediation Conference, unless the party
offering such statements, documents or actions would have had access or
entitlement to them outside of the Mediation Conference.
13. The Association and the Company agree to schedule no more than three
grievances for Mediation Conference per day. The mediation day will commence
at 9:30 a.m. and it is anticipated that each mediation conference will last no
more than two and one-half hours.
14. The selection of the mediator will be by mutual agreement between parties.
The fee and expenses for the mediator and conference facilities will be shared
equally by the Association and the Company.
15. This Letter of Agreement will become effective as of the date of signing and
will remain in full force and effect and shall run concurrently with the Agreement
signed May 9, 1991.
IN WITNESSETH WHEREOF, the parties have signed this Letter of Agreement
this 12th day of August, 1992.
WITNESS: FOR UNITED AIR LINES, INC.
/s/ G. L. Andrews /s/ J. R. Samolis
/s/ Richard Rosinia John R. Samolis
/s/ Peter R. Davis Vice President
Employee Relations
WITNESS: FOR THE AIR LINE PILOTS IN THE
/S/ C. R. Waxlax SERVICE OF UNITED AIR LINES, INC.
/s/ J. S. Smith
/s/ R. D. Hall /s/ J. R. Babbitt
/s/ Hal Stepinsky J. Randolph Babbitt, President
Air Line Pilots Association, International.
Page 73 Letter 92-7
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Reserve Standby Lines
UNITED AIRLINES
Captain Roger D. Hall
UAL-MEC Chairman
Air Line Pilots Association
6400 Shafer Court, Suite 700
Rosemont, IL 60018
Dear Roger,
The Company and the Association engaged in a cooperative experiment to find a
way to assign field standby assignments more often to the reserve pilots who
desired such assignments. The parties have now successfully concluded that
experiment and herein agree to the following provisions to formalize the process.
1. Reserve standby lines will be identified and posted at the regular preferencing
time, showing day on / day off patterns (minimum 12 days off). The number of
standby lines will be determined by the Company and may be between zero and
a maximum of three for each status, equipment and domicile. The standby lines
will not be counted as part of the number of reserve lines referred to in 5-G-1-e.
2. Awards to standby lines will be strictly voluntary and will occur after all other
preferencing activity. Reserves who are available for the full month will have
priority, by seniority, for standby lines. Volunteer reserve pilots with absences
will be awarded an unfilled standby reserve line for the period of the month for
which they are available. The portion of the standby reserve line for which the
reserve is unavailable due to his absence will remain unassigned.
3. A scheduled standby assignment will be subject to the provisions of 5-G-5 and
shall be treated as a scheduled reserve day for the purpose of absence
accounting; specifically:
3-a- Five hours actual time and pay credit will be credited, if no trip is assigned.
3-b- If a standby pilot is assigned a trip, the actual flight time of the completed
trip will be credited.
3-c- Four hours ten minutes (4:10) will be reduced from the pilot's available
monthly maximum flight time for each scheduled standby day for which the pilot
is absent (sick, vacation, military, etc.)
Page 75 Letter 92-7
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4.
Standby times following a day off will start at 16:00 local time. Standby timesfor the day preceding a scheduled day off will be at 07:00, except if legalities
require a later start time. If the pilot cannot start before 12:00, he will be free from
duty for that last day.
5. Standby reserves can be "converted" to regular reserves if no other reserve is
available for an assignment. The Company can make a trip assignment which
begins prior to a field standby period with pilot concurrence. The Company has the right to make an assignment which begins later than the scheduled field standby period, if the pilot is contacted prior to reporting for the standby period.
6. Fourteen hours will be scheduled between standby assignments. A twelve
hour minimum from block in to standby report time will be provided in the actual
operation. If one flight assignment makes a pilot illegal for the next scheduled
field standby assignment, that next standby time can be delayed to provide a
legal rest.
7. Up to five days of open flying can be added to each standby line
after preferencing on scheduled standby days only. Such assignments will be
offered in seniority order, taking into consideration each pilot's available standby
days. Preassigned open flying under this paragraph will normally be conducted
during the first period of available days in the month and no standby pilot will be
required to perform a preassinged trip which departs prior to 16:00 on his first
scheduled available day of the month.
8. The assignment of open flying under 7, above, and the publication of the field
standby times will be completed by the 28th of the prior month. The CMS
"DSPREC" display will not indicate times for field standbys until the 28th of the
prior month.
9. A standby reserve assignment can be converted into an additional day off,
provided the Company provides notice to the pilot at or prior to the end of the
immediately preceding assignment. At the end of each assignment, each pilot
will be obligated to check his "CALREC" display to determine if he has been
released from his next standby assignment.
10. Regular reserves can continue to be called out at any time for standby
assignments, as provided by the Agreement.
11. If this letter is ratified prior to November 1, 1992, it is anticipated that this
system can be implemented as part of the regular preferencing system by
January, 1993, for the schedule month of February, 1993.
Letter 92-7 Page 76
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If this accurately reflects our understanding, please sign and return 2 copies for our files.
Sincerely,
/s/ J. R. Samolis
John R. Samolis
Vice President
Employee Relations
Accepted and agreed to this
21st day of September, 1992.
/s/ R. D. Hall
Roger D. Hall, Chairman.
Page 77 Letter 92-7
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UAL-ALPA Master Executive Council.
Letter 93-2 Page 78
|
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Trip Trade with Open Flying
UNITED AIRLINES
Captain Roger D. Hall
UAL-MEC Chairman
Air Line Pilots Association
6400 Shafer Court, Suite 700
Rosemont, IL 60018
Dear Roger,
As a result of discussions between the ALPA and Company Negotiating
Committees, it has been agreed that a pilot will be permitted to trade trips from
his awarded schedule with trips which are in "open flying", as follows:
1. A pilot will be permitted to trade a trip(s), for which he is available in his
awarded schedule, with a trip(s) from open flying once per month. That single
trade transaction can include a single trip or multiple trip pairings from his
line, so long as they are contiguous (i.e., include no intervening days off). He
may trade that trip or series of "back-to-back" trips from his line with open
flying for a single trip or multiple trips.
2. A pilot will not be permitted to trade for a trip which would create an illegality in
his remaining scheduled line in any month for which the schedule has been
awarded. Further, a trade will not be permitted if it projects a pilot above
81/83/85 actual flight hours (whichever is applicable to him under the
Agreement) or above 85 pay credit hours, unless he is already projected above
85 pay credit hours due to the month-end operation of a legal inbound trip from
the prior month. If the pilot is projected for more than 85 pay credit hours, he
may make a trade which will also project him to that established higher value.
3. Automated trades can be processed through any Unimatic terminal or through
Unimatic access by home computers. Automated trades will be accepted only for
transactions which are outside of the "current period", i.e., for trips which are
scheduled to depart more than 28 hours in the future.
4. Automated trades will be accepted or rejected by the CMS system at the time
the request is made and, if accepted, the pilot will be considered to be on notice
that his schedule has been changed and he has accepted responsibility for his
revised schedule.
Page 78 Letter 93-2
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5.
A pilot will not be permitted to trade out of any trip in his awarded line (1) whichis scheduled to depart within the first five days of the schedule month or, (2)
which is scheduled to operate during any of the holidays recognized by the
Agreement or, (3) which is scheduled to operate during any of the other days
which may be "embargoed" by the Company. Embargoes may be declared by
the Company for specific days by status, domicile and equipment type and
notice of such embargoes will be noted on designated CMS "Display Pages". As
coverage availability changes during theoperating month, embargo changes
may also be made by the Company - both to impose additional embargoes and
to lift existing embargoes. None of the restrictions in this paragraph 5 will limit
which trips, scheduled on an embargoed day, a pilot will be permitted to trade
into.
6. A pilot will not be permitted to trade out of any trip in his OE line, nor out of any
trip on which he is scheduled for an en route check or for any training.
7. A "first come, first served" trip trade process, described in Paragraph 3 & 4
above will be implemented no later than September 1, 1993. This "first come,
first served" system will cease when the "Seniority Concept" trip trade system is
implemented.
The Company will, immediately upon MEC ratification of this
Agreement, begin the computer programming necessary to implement the ALPA
"Seniority Concept". This seniority based trip trade process, described in
alternate paragraphs paragraph 3 & 4 below, will be implemented no later than
February 1, 1994 (at which time paragraph 3 and 4 above, will cease).
3. Trade requests will be processed through any Unimatic terminal or through
Unimatic access by home computers. Trades will be accepted only for
Transactions which affect trips that are scheduled to depart more than 48 hours
after the next daily "rundown" is conducted. A pilot will not be permitted to trade
out of a trip which is scheduled to depart less than 48 hours after the next daily
"rundown" is conducted.
4.a. A "rundown" is the daily process during which trip trades on file are
programmatically processed. A "rundown" of trade requests will be conducted
daily at a fixed time; currently planned to be 1300 Central Time. All trade
requests not awarded will remain in the computer until awarded or removed by
the pilot.
Letter 93-2 Page 79
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4.b.
Trade requests must include the specific I.D.(s) and date(s) the pilotwishes to trade out of. Requests may include any of the following criteria for
I.D.(s) the pilot wishes to trade into:
"Any" available I.D. on a specific date.
A specified I.D. on a specific date.
Any legal I.D. on any date.
4.c. Pilots must use "VERID" within 23 hours after the "rundown" time to confirm
knowledge of the trade and to "lock" it in. If a pilot fails to "VERID", the trade will
be canceled and that pilot's single trade transaction will be considered used for
that month. When a pilot transmits "VERID" the I.D. he is trading out of will.
immediately be listed in "OPNID". Each pilot who requests a trade will bear full
responsibility for knowing his/her schedule.
8. This letter shall become effective for the schedule month of September, 1993. It will remain in effect for the duration of the 1991 Agreement. This letter may be suspended or cancelled with 30 days notice by either party.If this accurately reflects our understanding, please sign and return 2 copies for our files.
Sincerely,
/s/ John R. Samolis
John R. Samolis
Vice President
Employee Relations
Accepted and agreed to this
29th day of April, 1993.
/s/ R. D. Hall
R. D. Hall, Chairman
UAL/ALPA Master Executive Council.
Letter 93-2 Page 80
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Non-Disclosure Letter
UNITED AIRLINES
August 23, 1993
Captain Roger D. Hall
UAL-MEC Chairman
Air Line Pilots Association
6400 Shafer Court, Suite 700
Rosemont, IL 60018
Re: Non-Disclosure Letter
Dear Roger:
By this letter ("Non-Disclosure Letter"), United and ALPA hereby agree that any
information provided to ALPA ("Confidential Insider Information"), pursuant to
Paragraph 4 (a) of Letter 91-14, shall be treated, for all purposes and at all times,
asconfidential, and shall not be disclosed or communicated except in accordance
with the terms hereof. Said Confidential Insider Information includes, but shall
not be limited to, all information regarding plans, schedules, and decisions
concerning flying by United or United Express carriers on particular routes, and
all economic data or other data which explains, reveals, describes or
substantiates any and all such plans, schedules, and decisions.
As a precondition to receiving Confidential Information pursuant to Paragraph 4
of Letter 91-14, a pilot designed by ALPA in accordance with Paragraph 4 (a)
of Letter 91-14 (a "Designated Pilot"), shall sign a confidentiality statement in
the form attached hereto. A designated Pilot may disclose the Confidential
Insider Information only to the elected officers and members of the United
Airlines-ALPA Master Executive Council and to legal and financial advisors
who need to know the Confidential Insider Information for purposes of
providing professional advise to ALPA with respect to the subject of the
Confidential Insider Information ("Recipients"); prior to such disclosure, the
Recipients shall also be required to sign the confidentiality statement
attached hereto. ALPA shall not be required to treat as confidential any
information or data which (i) is or becomes generally available to the public
other than as a result of disclosure by ALPA or its representatives in
violation of this Non-Disclosure Letter, or (ii) was available to ALPA or any of
its representatives on a non-confidential basis prior to its disclosure to them
by United, or (iii) is or becomes known or available to ALPA or its representatives
on a non-confidential basis from a source (other than United) who, insofar as is
Letter 93-4 Page 81
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known to ALPA or its representatives after due inquiry (including to the Senior
Vice President - Human Resources at United), is not prohibited from transmitting
the information to ALPA or its representatives by a contractual, legal or fiduciary
duty.
If ALPA, a Designated Pilot, or any Recipient is served with a subpoena or other
process requiring the production or disclosure of Confidential Insider Information,
before complying with such subpoena or other process, ALPA, the Designated
Pilot, or the Recipient shall immediately notify United of same in writing and
permit United a reasonable period of time to intervene and contest disclosure or
production. The duration of this Non-Disclosure Letter shall run concurrently
with the 1994 United-ALPA collective bargaining agreement.
Please indicate your agreement with each and every term of this letter by signing in the space provided below.
Sincerely,
/s/ J. R. Samolis
John R. Samolis
Vice President Employee Relations
Accepted and agreed to this
23th day of August, 1993.
/s/ R. D. Hall
Roger D. Hall,
UAL-MEC Chairman
Air Line Pilots Association, International.
Letter 94-1 Page 82
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CONFIDENTIALITY STATEMENT
1.I have read and am familiar with the terms of the Non-Disclosure Letter
between United and the Air Line Pilots Association, International ("ALPA"), a
copy of which is attached hereto and incorporated herein by reference.
2.I agreed to be bound by and to comply with all provisions contained in such
Non-Disclosure
Letter.
3. In particular, without limiting the generality of the foregoing, I agree that I shall
not disclose Confidential Insider Information to anyone who is not authorized to
receive such information by the terms of the Non-Disclosure Letter and who has
not himself/herself signed a Confidential Statement
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Letter 94-1 Page 83
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Job Security Protection
UAL CORP.
UNITED AIRLINES
July 12, 1994
J. Randolph Babbitt, President
Air Line Pilots Association
1625 Massachusetts Avenue, N.W.
Washington, D. C. 20036
Re: Job Security Protection
Dear Captain Babbitt:
We write to confirm the following agreement made between the Air Line Pilots
Association, International ("ALPA") and the UAL Corporation ("UAL") and
Between ALPA and United Air Lines, Inc. ("United") in the negotiations leading to
the 1994 ALPA-United collective bargaining agreement (the "Agreement").
Unless otherwise specified, all capitalized terms in this letter are defined in
Section 1 of the Agreement.
UAL agrees that it is an Affiliate of United and that it is bound by Section 1 of the
Agreement in the same manner as United so that every reference to the
"Company" in Section 1 expressly refers to and binds UAL. United and UAL further agree that they will not conclude, facilitate or permit any agreement or arrangement that establishes any Affiliate, other than a Feeder Carrier, that is, Controls or is under the Control of an air carrier unless the Affiliate agrees in writing to be bound by Section 1 of the Agreement in the same manner as UAL and United.
Any disputes among ALPA, United and/or UAL that arise out of grievances or that concern the interpretation or application of this letter or Section 1 of the
Page 84 Letter 94-1
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Agreement will be determined through final and binding arbitration before the
ALPA-United System Board of Adjustment pursuant to Section 1-K of the
Agreement. UAL expressly agrees to be subject to Section 1-K in all respects.
Very truly yours,
UAL CORP.
/s/ P. G. George
Paul G. George
Senior Vice President
Human Resources
UNITED AIR LINES, INC.
/s/ J. R. Samolis
John P. Samolis
Vice President
Employee Relations
Accepted and agreed to this
12th day of July, 1994.
/s/ J. R. Babbitt
J. Randolph Babbitt, President
Air Line Pilots Association, International
/s/ R. D. Hall
Roger D. Hall, Chairman
UAL/ALPA Master Executive Council
Revised as of this 26th day of October, 2000.
/s/ William P. Hobgood
William P. Hobgood
Senior Vice President
People
/s/ F.C. Dubinsky
Captain F.C. Dubinsky
Chairman
UAL/ALPA Master Executive Council
Page 85 Letter 94-9
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Dispute Resolution and Hiring Standards
UNITED AIRLINES
July 12, 1994
J. Randolph Babbitt, President
Air Line Pilots Association
1625 Massachusetts Avenue, N. W.
Washington, D. C. 20036
Dear Captain Babbitt:
I write to confirm the following agreement made between the Air Line Pilots
Association, International ("ALPA") and United Air Lines, Inc. ("United") in the
negotiations leading to the 1994 ALPA-United collective bargaining agreement
(the "Agreement"). Unless otherwise specified, all capitalized terms in this letter are defined in Section 1 of the Agreement.
1. Subject to the corporate governance provisions established in the Company's
Charter and By-Laws, a process or means will be established that will permit
ALPA and the new management to resolve issues creating disharmony between
pilots and management on a basis that will not reduce the value of the pilot
investment in the 1994 Employee Stock Ownership Transaction.
2. Subject to other legal obligations, the Company will make reasonable efforts to
fill pilot vacancies with the individuals who satisfy United's hiring standards, who
have, previously worked for carriers represented by ALPA, and who are no
longer working for those carriers for economic reasons such as lay-offs or the
shutdown of that carrier.
Very truly yours,
UNITED AIR LINES, INC.
/s/ J. R. Samolis
John R. Samolis
Vice President
Employee Relations
Accepted and agreed to this
12th day of July, 1994.
/s/ J. R. Babbitt
J. Randolph Babbitt, President
Air Line Pilots Association, International.
Page 86 Letter 94-11
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Shuttle
LETTER OF AGREEMENT
between
UNITED AIR LINES, INC.
and
THE AIR LINE PILOTS
in the service of
UNITED AIR LINES, INC.
as represented by
THE AIR LINE PILOTS ASSOCIATION ,
INTERNATIONAL
THIS LETTER OF AGREEMENT is made and entered into in accordance with
the provisions of Title II of the Railway Labor Act, as amended, by and between
UNITED AIR LINES, INC. (hereinafter referred to as the ''Company'') and the
AIR LINE PILOTS in the service of UNITED AIR LINES, INC. as represented by
the AIR LINE PILOTS ASSOCIATION, INTERNATIONAL (hereinafter referred to
as the ''Association'').
W I T N E S SE T H:
NOW, THEREFORE, it is mutually agreed that the Company may conduct a
separate Shuttle-type operation subject to the following terms and conditions:
The Company is authorized to establish the Shuttle Operation, and it may, at
the Company's option, operate Shuttle as a distinct corporate division of
United Airlines provided that the Company, including both the Shuttle
Operation and the Company's other (''Mainline'') operations, remains a single
carrier for all purposes of both the Federal Aviation Act and the Railway
Labor Act.
2. All pilots who perform services in the Shuttle Operation will be United pilot
employees pursuant to Section 2-A or 2-X of the Agreement and will be
represented by the Association as part of a single craft or class of United flight
crew members that includes all United pilots.
3. All pilots in the employ of the Company, including pilots in the Shuttle
Operation, shall be included on the Pilots' Eligibility Seniority List and/or the
Second Officer Eligibility Seniority List pursuant to the applicable seniority
provisions of the Agreement.
Page 87 Letter 94-11
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4.
All pilots who hold or are awarded Shuttle assignments pursuant to Section 8of the Agreement will receive the same benefits as pilots in the Mainline
Operation (including without limitation the same retirement (A-Plan and PDAP),
medical/dental, insurance, long-term disability, sick leave, vacation accrual,
workers compensation and other welfare benefits) and will be governed by the
Agreement in all respects except as the Agreement is specifically modified in
this Shuttle Supplement.
5. The Company may operate the aircraft identified in Paragraph 11 below in
both shuttle and non-shuttle-type operations.
5-a- Those aircraft utilized in a shuttle-type operation will be operated in a SWA
type style, which may include but is not limited to quick turns, high frequency,
highaircraft utilization, few crew changes, minimal aircraft changes, and pairings
that keep the pilots and flight attendants together.
5-b- The operation of all other aircraft not utilized in a shuttle-type operation
shall be referred to herein as Mainline.
6. The monthly schedule and actual caps for shuttle pilots shall be the same as
the Mainline caps.
7. Mainline bank concepts shall apply to the shuttle fleet(s).
8. There will be separate bid positions for Captains and First Officers in the
shuttle operation. All pilots holding shuttle bids will receive enculturization
training in the shuttle-type operation prior to operating on the shuttle.
9. The shuttle and Mainline minimum guarantee will be the same.
10. Work rules for the shuttle operation shall be as follows:
10-a- Schedules shall contain a minimum of five and one-half (1/2) hours of
flight time credit, averaged, for each on-duty period in multiple duty period trip
sequences or five and one-half (51/2) hours for one (1) duty period.
10-b- Each schedule line for a full month that is submitted for the schedule
selection procedure, as provided in Section 20-B and 20-C shall contain a
minimum of fourteen (14) days free of all duty at the home domicile.
Page 89 Letter 94-11
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10-c-
Pilots functioning as reserves shall be scheduled for a minimum offourteen (14) calendar days free of duty with the Company each month.
10-d- Reserve pilots who are awarded shuttle bid positions may be assigned to
fly trips in Mainline operations and vice-versa. Mainline reserves may be
assigned to fly shuttle trips only if there are no shuttle reserves available and
they have received the appropriate enculturization training. If a Shuttle trip would
be canceled because there is no reserve available who has received
enculturization training, the reserve will receive an interim enculturization briefing
prior to departure.
11. Rules for determining shuttle DSL quality are as follows:
11-a- The pairings will be ranked on a scale of 1 to 4 as described below. Not
more than 30% of the pairings at any shuttle domicile, weighted on a duty period/
month basis, can be ranked as 3 or 4. Not more than 25% of the pairings on the
shuttle system, weighted on a duty period/month basis, can be ranked as 3 or 4.
Not more than 10% of the pairings at any shuttle domicile, weighted on a duty
period/month basis, can be ranked 4.
11-b- At least 30% of the system pairings, on an occurrence/month basis will be
composed of 1 and 2 duty periods, unless this obligation prevents compliance
with this paragraph 11 and/or Paragraph 12 below.
11-c- Pairings will be ranked from 1 - 4 based on the following:
A pairing having no deficiencies will be ranked a 1,
A pairing having 1 deficiency will be ranked a 2,
A pairing having 2 deficiencies will be ranked a 3, and
A pairing having 3 or more deficiencies will be ranked a 4.
11-d- The deficiencies will be cumulative and each occurrence will count as a
deficiency.
11-e- The following items are deficiencies for the purpose of ranking the
pairings.
11-e-1- Cross-town (Arriving at an airport different from the departure airport
at the end of a pairing or following a layover).
Page 90 Letter 94-11
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11-e-2-
Deadhead.11-e-3- A layover of more than 22 hours.
11-e-4- Any break of more than 2 hours, or more than one break of more than
1 hour in a single duty period.
11-e-5- An aircraft change during a duty period
11-e-6- A field layover before or after a duty period of 7:00 actual or greater.
11-e-7- A duty period in excess of 12:00 on duty.
12. Rules for shuttle line construction.
The following rules shall govern the construction of the monthly lines of flying for
shuttle pilots.
12-a- All lines will be constructed on a 7 day pattern, i.e. the base pairing will
originate on the same day(s) of the week. The lines will have the same days off
each week to the extent possible.
12-b- Filler pairings will be tacked to the base pairing. The filler pairings should
be arranged to make a 5 day work pattern to the maximum extent possible.
13. Shuttle lines will not be published for preferencing in any domicile if they are not in compliance with the provisions of Paragraph 11 and Paragraph 12 above.
14. The Company will construct secondary lines in the shuttle operation to the
extent possible.
15. Trip Trade With Open Flying on the Shuttle will be conducted under the same
rules as Trip Trade With Open Flying on the Mainline. Notwithstanding the
foregoing, on a domicile basis, three (3) additional trades each day Monday
through Thursday and one (1) additional trade each day Friday through Sunday
will be allowed.
16. The Company is authorized to utilize A-320 "family" aircraft or smaller in the
shuttle operation. The Company may operate such aircraft as a separate shuttle
fleet(s) or as part of the Mainline fleet. Any fleet operated in the shuttle will be a
separate bid position. No aircraft will be operated in shuttle unless at least ten
Page 91 Letter 94-11
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(10) such aircraft are so utilized. Prior to the Company initiating use of a new
fleet in shuttle operations, the parties will agree upon procedures for transition
staffing.
17. Shuttle IOE
Shuttle IOE will be conducted in accordance with the following provisions:
17-a- OE lines will not be designated in the Shuttle operation. The following
rules for initial pilots will apply:
17-a-1- A pilot can bid and be awarded a line of flying using his own
seniority.A F/O may have a potential line denied if it is already held by an
initial or transition captain.
17-a-2- An initial or transition pilot will be prevented from trading into flying
that is already assigned to another initial or transition pilot.
17-a-3- An initial pilot who is not senior enough to hold a line will be
assigned trips as a reserve and always be placed at the top of the FIFO list
after returning from a trip or days off. Such pilot shall receive 15 hours free
of duty after each assignment, unless the pilot is the only reserve available,
in which case the normal provisions of the Agreement shall apply. If
multiple initial pilots are on reserve, they will return to the top of the FIFO
list in FIFO order. A pilot may be passed over on the FIFO list to avoid an
assignment with another initial or transition crew member.
17-b- A pilot holding a Captain or a First Officer Shuttle bid will initially be
assigned to a Mainline trip(s) in order to accomplish the majority of his
IOE; however, in no case will a Shuttle pilot receive less than 7 Shuttle
landings during his IOE. A pilot holding a Captain or a First Officer Mainline
bid will never be assigned to a Shuttle trip(s) for IOE.
17-c- A Shuttle pilot's IOE shall consist of no less than twenty-five (25)
hard hours except for transitioning B737-200 pilots who will require a
minimum of segments.
17-d- When a Shuttle pilot's IOE is completed prior to the conclusion of a
multi-day duty period trip, the pilot may be removed from the I.D. only at
the end of a duty period.
Page 92 Letter 94-11
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17-e-
A pilot who is qualified as a B737-300/500 or A320/319 LCA mayperform IOE for Shuttle pilots on both the Mainline and Shuttle.
17-f- In order to provide maximum continuity for a Shuttle pilot during his IOE,
the Company will make every reasonable effort to keep the same LCA with the
pilot during his entire IOE, including both the Mainline and Shuttle portions of
the IOE. It is recognized that it may become necessary to substitute LCA's
during an IOE, but in no case will a Shuttle pilot have more than two LCA's for
the duration of an IOE, without the concurrence of the ALPA Training
Committee.
17-g- Shuttle IOE will be performed by LCA's no less qualified than current
LCA's providing IOE for Mainline pilots. Additionally, Shuttle IOE will be
performed predominately by line LCA's.
17-h- The Company will solicit LCAs in an effort to maintain a balance
between Shuttle and Mainline LCAs consistent with the forecast activations in
each category on a semi annual basis. Shuttle LCAs will be permitted to
perform Mainline IOE if no Mainline LCA is available, up to a maximum of one
Mainline IOE per month per Shuttle LCA.
18. The Company will conduct a new analysis of the value of a Shuttle vacation
day. The value determined by this analysis will be applied to the Preferential
Bidding System.
19. The Company may operate all other aircraft types on markets served by
shuttle.
20. The Company will maintain a Shuttle specific crew desk.
21. The Company and ALPA will maintain and update the Shuttle play book.
22. Except as otherwise provided, Mainline contract provisions apply to Shuttle
operations.
IN WITNESS WHEREOF, the parties have signed this Letter of Agreement this
19th day of August, 1994.
Page 92 Letter 94-11
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FOR UNITED AIR LINES, INC.
WITNESS
: /s/ J.R. Samolis/s/ G.L. Andrews John R. Samolis
/s/ Joyce A. Craven Vice President
WITNESS:
/s/ Joyce A. Craven
FOR THE AIR LINE PILOTS IN THE SERVICE
WITNESS:
Stephen Smith
OF UNITED AIR LINES, INC.WITNESS:
/S/ J.R. BabbittJ. Randolph Babbitt, President
Air Line Pilots Association, International.
/s/ M.J. Severson
/s/ Larry D. Schulte
/s/ W.J. Arscott
/s/ H.E. Stepinsky
/s/ Harlow B. Osteboe
Revised as of this 26th day of October, 2000
/s/ William P. Hobgood
William P. Hobgood
Senior Vice President
People
/s/ F.C. Dubinsky
Captain F.C. Dubinsky
Chairman
UAL/ALPA Master Executive Council
Letter 94-12 Page 92
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Flight/Data Recorders
LETTER OF AGREEMENT
between
UNITED AIR LINES, INC.
and
THE AIR LINE PILOTS
in the service of
UNITED AIR LINES, INC.
as represented by
THE AIR LINE PILOTS ASSOCIATION, INTERNATIONAL
THIS LETTER OF AGREEMENT is made and entered into in accordance wit the
provisions of Title II of the Railway Labor Act, as amended, by and betweet
UNITED AIR LINES, INC. (hereinafter referred to as "the Company" or "United"
and the AIR LINE PILOTS in the service of UNITED AIR LINES, INC. a
represented by the AIR LINE PILOTS ASSOCIATION, INTERNATIONAL
(hereinafter referred to as "the Association" or "ALPA").
WITNESSETH:
WHEREAS technological advancements in the aircraft data collection systems
present new problems and concerns for both ALPA and the Company,
NOW, THEREFORE, it is mutually agreed that the 1994 AGREEMENT between
UNITED AIR LINES, INC. and THE AIR LINE PILOTS in the service of UNITED
AIR LINES, INC. as represented by the AIR LINE PILOTS ASSOCIATION,
INTERNATIONAL is amended as follows:
DEFINITIONS:
A. "Flight data recorder" shall include any device, equipment or system which
transmits and/or records and/or collects inflight data, whether installed to monitor
pilot, aircraft component, or aircraft performance.
B. "Cockpit voice recorder" shall include any device, equipment or system which
monitors or records a pilot's voice while he is on an aircraft.
C. "Information" shall include any data transmitted, recorded or collected by using
a flight data recorder, cockpit voice recorder or any other recording device. The
term "information" shall further include tapes, transcripts, reports, papers,
memos, statements, studies, charts, graphs or any other description, analysis or
compilation of data collected by a cockpit voice recorder or flight data recorder.
Page 93 Letter 94-12
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II. COCKPIT VOICE RECORDERS
A.
Cockpit voice recorder information will not be used for any purpose exceptaccident/incident investigation and only in those instances where the legal criteria
of an NTSB definable accident/incident have been met.
B. No later than twenty-four hours after removal, the Company will notify the
flight crew involved or, if unable, an MEC officer that the voice recorder was
removed for analysis by the Company, a government agency or other third party.
C. The pilot shall be allowed to review a cockpit voice recording removed from
his trip which is in the possession of the Company after a formal request has
been filed with the Director of Safety and Security.
D. Voice recordings which have been removed from the aircraft and
transcriptions thereof shall not be retained in an identifiable form for more than
seven days unless (1) required by statute, (2) by mutual consent of the parties or
(3) an active safety investigation is in progress.
E. Only the Senior Vice President Flight Operations, Vice President of Flight
Standards and Training, Director of Flight Domicile Operations or, if a pilot, the
Director of Corporate Safety and Security may authorize the removal and/or
review of the cockpit voice recorder.
F. The Company will not provide copies of transcripts or actual cockpit recorder
Audio recordings to the Association, its members or any third parties, except as
required by law or by mutual consent of (1) the Director of Corporate Safety and
Security (if a pilot) or the Senior Vice President of Flight Operations, (2) the MEC
Chairman and (3) all pilots directly involved in the incident.
III. DIGITAL FLIGHT DATA RECORDERS
A. Operational data recorded or transmitted during flight operations shall be used
strictly (1) for engineering analysis, (2) in conjunction with an accident or incident
investigation or (3) as authorized by the Flight Operations Quality Assurance
Agreement.
B. Digital flight data recorder information may only be collected at the direction of
the Senior Vice President of Flight Operations, the Vice President of Flight
Standards and Training, the Director of Flight Domicile Operations, the Director
Page 94 Letter 94-12
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of Corporate Safety and Security (if a pilot), or for engineering analysis at the
direction of a Vice President of Maintenance or General Manager of Engineering.
The authority to authorize the collection of data shall not be delegated.
C. The Company will notify the Captain involved or, if he is unavailable, an MEC
officer within forty-eight hours, if flight data recorder information has been
retrieved from his flight for any reason diner man routine engineering analysis or
as part of a Flight Operations Quality Assurance Program.
D. A pilot, and/or his representative, if desired, shall be allowed to review data
retrieved by the Company from his flight unless restricted by statute. The
Company shall provide a Flight Safety staff member with appropriate expertise to
explain the meaning of the recorded data.
E. Flight data information retrieved will not be used in favor of or against a pilot in
the grievance process or a system board hearing if the pilot has filed a detailed
Flight Safety Awareness Report of the incident within twenty-four hours after the
completion of the pilot's ID in which the event occurred and the event was not the
result of a deliberate violation of FAR or negligent disregard of Standard
Operating Procedure.
F. All flight data information retrieved for engineering analysis or investigation will be de-identified or destroyed within seven days unless prohibited by statute, mutual agreement of the parties, or part of a current safety investigation.
IV. GENERAL
A. The Company shall notify the Association within 90 days of the signing of this
letter of all known data acquisition and recording devices presently known to be
installed in their aircraft and no later than 90 days prior to any future installations.
B. Except as required by foreign, federal or state government regulation, neither
the Company nor the Association shall release any information derived from flight
data or cockpit voice acquisition units to a third party without the express written
consent of the other party.
C. Information obtained from a flight data recorder or cockpit voice recorder shall not be used for individual Pilot Enroute Checks.
D. All protective provisions of this agreement shall apply to all data collection devices installed in Flight Simulators.
Page 95 Letter 94-12
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E.
This letter shall become effective and will be applicable to all United aircraft upon tentative agreement by the parties to adopt a mutually agreeable "Flight Operations Quality Assurance Program" developed by the Air Line Pilots Association and the Company. Upon implementation, this letter will run concurrent with the 1994Agreement.
Page 96 Letter 94-12
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IN WITNESS WHEREOF, the parties have signed this Agreement this 1st day of
November, 1994.
/s/ G. L. Andrews /s/ John R. Samolis
/s/ Richard Rosinia John R. Samolis
/s/ Joyce Craven Vice President Labor Relations
FOR THE AIR LINE PILOTS IN THE
SERVICE OF UNITED AIR LINES, INC.
WITNESS:
/s/ J. Stephen Smith
/s/ H. E. Stepinsky /s/ J. R. Babbitt
/s/ Harlow B. Ostebboe J. Randolph Babbitt, President
Air Line Pilots Association, International
Revised as of this 26th day of October, 2000
William P. Hobgood
Senior Vice President
People
/s/ F.C. Dubinsky
Captain F.C. Dubinsky
Chairman
UAL/ALPA Master Executive Council
WITNESS:
Letter 94-12 Page 97
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Month End Absence Rule
UNITED AIRLINES
Hal Stepinsky
Contract Administrator
UAL/MEC
Air Line Pilots Association
6400 Shafer Court - Suite 700
Rosemont, Illinois 60018
Dear Hal,
Attached is a document that the parties have agreed accurately explains the
November 22, 1994 Letter of Agreement regarding the "Month-End Absence
Rule."
In accordance with our mutual commitment to give wide distribution to
this information, it will be included with the Letters of Agreement to be published
as an addendum to the current Collective Bargaining Agreement booklet.
Sincerely,
/s/ G. L. Andrews
Gerald L. Andrews
Director of
Flight Contract Administration
Month-End Absence Rule
Since the 1981 Agreement, the Company has had the right to unilaterally adjust
pilot schedules in order to make them legal from month to month. Once this
month end adjustment is made, any absence over the month end that develops
thereafter is paid on the basis of the adjusted, legal schedules, as they occur in
both months. Shortly after this provision became effective with the 1981
Agreement, ALPA and the Company agreed to an interpretation of this provision
Intended to deal with concerns both parties had about schedule repairs that
might be made under the new provision when the affected pilot was planned to
be absent (vacation, training, etc.) at the beginning of a month. In order to avoid
having changes occur to an absent pilot's schedule that he couldn't control and
might not even have an opportunity to know about (e.g.; in the case of long term
sick leave), it was decided that for most planned absences in a pilot's schedule
that spanned a month-end or began on the first of a month, the pay for both the
old month (month "A") and new month (month "B") would be based entirely
Page 98 Letter 94-12
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on what the pilot's published schedule included in these two months, as
awarded, without giving any consideration to the usual effect of month-end
carry overs or conflicts - if and when any conflicts existed. This means that the
pay forany carry-over trip from month "A" to month "B" is cut off at midnight at
month end; however, all trips at the beginning of month "B" are paid, even if the carry-over trip normally would have been in conflict.
The basic rule is: If, at the time the Company reconciles month-end schedule
conflicts created by carryover trips from the current month (month "A"), a pilot
has a known absence either over the upcoming month end or beginning on the
first day of the following month (month "B', then the Company will not repair that
pilot's month end schedule conflict, if one exists. In this case, the pilot's pay for
both months will be based on the pay value of the trips or portions of trips which
appear in his awarded schedules as published for both months. All that is
necessary for this rule to apply is for there to be a qualifying absence when
month-end conflicts are being worked on; when there is, this process always will
be followed and the pay will be split at midnight
at month end, whether or not the two months' schedules would have been in
conflict. Some special cases:
a. This above general rule also applies when the absence in month "B" does not
begin on the very first day of the month, provided the carry-over trip from month "A" projects into the absence.
b. It is possible, though rare, for a very long trip at the end of month "A" to satisfy
the circumstances described in "a", above, and also to entirely transcend a
shorter trip at the beginning of month "B" that does not touch the absence. (E.g.,
an 8 day trip beginning on the 31st of month "A", a 4 day trip beginning on the
1st of month "B" and a vacation beginning on the 6th of month "B".) In this case,
this month-end pay rule continues to apply, however the pilot would be legal, in
position and expected to fly the 4 day trip on the 1st.
c. Another variation on "a.", above that bears mentioning is created when the
carryover trip from month "A" does not project into the absence, but the carryover
trip conflicts with a trip at the beginning of month "B" that does project into the
absence. (E.g., a 3 day trip beginning on the 31st of month "A", a 4 day trip
beginning on the 2nd of month "B" and a vacation beginning on the 5th of month
"B".) This is not really a special case; since, in this situation, there is no
application of this month-end absence rule because neither of the required
conditions is met: There is no absence beginning on the first of month "B" nor
does the carry-over trip project into the vacation period. In this case, the
carryover trip and the first trip in the pilots line for month "B" require regular
month-end repair since the pilot will fly the carryover trip and cannot also get
Letter 94-17 Page 99
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paid for the conflicting trip in month "B"- even though he would not have flown the
trip in month "B" because it projects into the absence.
d. In the event a pilot is on sick leave at the beginning of an outbound trip at the
end of month "A" that qualified him for the application of this "month-end absence
rule" due to having a vacation beginning early in month "B" the pay for the
outbound portion of any carryover trip that appears in month "A" that projects into
the vacation shall be paid as vacation instead of sick leave.
e. This "month-end absence" rule will not be applied to pilots whose planned
absences are due to an ALPA drop (such as attendance at a System Schedule
Committee meeting) or to a Company business drop (such as a special
assignment). For those two types of planned absences only, month-end conflict
resolution will take place as if the pilot were expected to perform the month-end
flying.
3. The Association will co-sponsor the distribution of the above rules, acknowledging ALPA's agreement with this month-end application and, thereafter, both ALPA and the Company will continue to publicize these rules so that pilots with month-end absences
will have accurate information about how to preference schedules when they have such absences. The Company will include a reminder with each month's schedule preferencing package to alert pilots to these special month end absence rules.
Page 100 Letter 94-12
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EXAMPLES
"Month-End Absence Rule"
The following illustrations are intended to provide additional examples of the
situations cited in the attached Settlement Letter. The first two examples below
illustrate the "normal" application of the "Month-End Absence Rule". Thereafter, the small letters "a" through "e", correspond to the letters which identify each "special case" situation. For some of these situations, more than one example is provided, as noted. (For further reference, all examples in this document are numbered consecutively.)
Example #1 (Normal application)
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Month "A"-------------><---------------Month "B" ----------------- |
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28 |
29 |
30 |
31 |
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
|
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ID X |
>>>> |
>>>> ID Y |
>>>> >>>> |
>>>> |
ID Y |
>>>> |
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<------------vacation---------------------------------------------- |
In the above case, the pilot is paid for the value of ID "X' only for the 30th and 31st of Month "A" (not for the carry-over value in Month "B") and for all of ID on the 1st, 2nd and 3rd of Month "B".
Example #2 (Normal application)
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Month "A"-------------><---------------Month "B" ----------------- |
|
28 |
29 |
30 |
31 |
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
|
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ID X |
>>>> |
>>>> |
>>>> |
|
ID Y |
>>>> |
>>>> |
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<---------------VACATION----------------------------------- |
Even though the above pilot could have legally flown all of ID "X" on the 30th, 31st, 1st and 2nd (were he not on vacation), the pay works the same as in Example 1; i.e., the "Month-End Absence rule still applies. Specifically, the pilot is paid for the value of ID "X" only for the 30th and 31st of Month "At, (not the carry-over value) and for all of ID "Y" on the 4th, 5th and 6th of Month "B".
Letter 94-12 Page 101
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Example #3 (Special Case "a".)
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Month "A"-------------><---------------Month "B" ----------------- |
|
28 |
29 |
30 |
31 |
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
|
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ID X |
>>>> |
>>>> |
>>>> |
|
ID Y |
>>>> |
>>>> |
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<------------vacation------------------------------------ |
Here, again, the "Month-End Absence Rule" applies because the carry-over pairing projects into the absence, even though the absence does not begin on the 1st of Month "B".
Example #4 (Variation on Special Case "a.")
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Month "A"-------------><---------------Month "B" ----------------- |
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28 |
29 |
30 |
31 |
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
|
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ID X |
>>>> |
>>>> |
>>>> |
|
ID Y |
>>>> |
>>>> |
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<--------vacation----------------------------- |
In the above case, the "Month-End Absence Rule" does not apply because the carry-over trip does not protect into the absence. The pilot would fly and be paid for ID "X" since it does not project into his vacation. ID "Y" would be dropped because of a normal month-end conflict with ID "X'. (ID "Y" would not be paid as overlap because, even in a vacation, a pilot cannot be paid for a trip that his schedule shows he wouldn't have been legal to fly.)
Example #5 (Special Case "b.")
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Month "A"-------------><---------------Month "B" ----------------- |
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28 |
29 |
30 |
31 |
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
|
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ID X |
>>>> |
>>>> |
>>>> |
|
ID Y |
>>>> |
>>>> |
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<-------vacation--------------------- |
Letter 94-12 Page 102
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In the above case, the carryover trip projects into the vacation, which makes it subject to the "Month-End Absence Rule"; that is, ID "X" is paid only for the 30th and 31st of Month "A". Also, in this case, the pilot is legal and in position to fly ID "Y" on the 1st of Month "B"
Example #6 (Special Case "b.")
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Month "A"-------------><---------------Month "B" ----------------- |
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28 |
29 |
30 |
31 |
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
|
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ID X |
>>>> |
>>>> ID Y |
>>>> >>>> |
>>>> >>>> |
>>>> |
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<---------vacation---------------------------- |
The difference between Example #6 and Example #5 is that, in Example #6, both ID "X" and ID "Y" project into the vacation. In this situation, the "Month-End Absence Rule" applies to I D "X' so that it is paid only for the 30th and 31st of Month "A", however ID "Y" is dropped for vacation overlap and is paid as vacation.
Example #7 (Special Case "c.")
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Month "A"-------------><---------------Month "B" ----------------- |
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28 |
29 |
30 |
31 |
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
|
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ID X |
>>>> |
>>>> ID Y |
>>>> >>>> |
>>>> |
>>>> |
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<------vacation------------------- |
In the above case, there is no application of-the "Month-End Absence Rule" because
there is no month-end absence nor is there a carry-over trip that protects into an
absence. In this situation, a regular month-end conflict exists and is subject to normal
repair. The pilot would fly ID "X" and drop ID "Y" due: to the conflict.
Page 103 Letter 94-18
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Example #8 (Special Case "d.")
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Month "A"-------------><---------------Month "B" ----------------- |
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28 |
29 |
30 |
31 |
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
|
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ID X |
>>>> |
>>>> ID Y |
>>>> >>>> |
>>>> |
>>>> |
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Long Term Sick Leave---- --><-------------------vacation----------------------------------------- |
The above is another variation on Example #1, showing the effect of two "end-to-end", absences. There is no difference from Example #1 in the amount of pay. here is, however, a difference in accounting, since in this case the pilot's pay for ID "X" on the 30th and 31st of Month "A" is paid as vacation time and is not charged as sick leave. This is an example of the only new application, which is being implemented as a result of this settlement.
Example #9 (Special Case "e.")
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Month "A"-------------><---------------Month "B" ----------------- |
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28 |
29 |
30 |
31 |
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
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ID X |
>>>> |
>>>> ID Y |
>>>> >>>> |
>>>> |
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<SSC Meeting-------> |
In the above situation, although there is a month-end absence, this is one of the
exceptions to which wPPe have agreed the "Month-End Absence Rule" does not apply. In this case, the lines would be repaired just as if the pilot were expected to fly all trips in both months.
Page Letter 94-18
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Contribut ions to DAP
LETTER OF AGREEMENT
between
UNITED AIR LINES, INC.
and
THE AIR LINE PILOTS
in the service of
UNITED AIR LINES, INC.
as represented by
THE AIR LINE PILOTS ASSOCIATION, INTERNATIONAL
THIS LETTER OF AGREEMENT is made and entered into in accordance with
the provisions of Title II of the Railway Labor Act, as amended, by and between
UNITED AIR LINES, INC. (hereinafter referred to as the "Company") and the
AIR LINE PILOTS in the service of UNITED AIR LINES, INC., as represented by
the AIR LINE PILOTS ASSOCIATION, INTERNATIONAL (hereinafter referred to
as the "Association")
WITNESSETH:
WHEREAS, the Internal Revenue Code places limits on the amounts which may
be contributed annually to the qualified defined contribution plans maintained by
the Company on behalf of the pilots; and WHEREAS, these limits apply to the
sum of the Company's contributions to the UAL Corporation Employee Stock
Ownership Plan (hereinafter referred to as the "ESOP"), the Company's
contributions to the United Air Lines, Inc. Pilots' Directed Account Retirement
Income Plan (hereinafter referred to as the "DAP"), and the pilots' pre-tax
and after-tax contributions to the DAP; and
WHEREAS, the Company's consultants have advised the Company that, due to
these limits, in 1995 it is likely that most pilots will be allowed to make pre-tax
contributions up to the federal limit of $9,240); and
WHEREAS, after the additional ESOP tranche purchase to be made in July of
each year during the Wage Investment Period, the Company's consultants will
be able to make a more precise projection of the pilots/ability to make pre-tax
and aftertax contributions during that year; and
WHEREAS, the Company and the Association wish to state the agreement they
have reached regarding the ability of pilots to make pre- tax and after-tax
contributions to the DAP during the Wage Investment Period of the ESOP;
Letter 94-18
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NOW, THEREFORE, it is mutually agreed as follows:
1. The ability of participants in the DAP to make after-tax contributions to the
DAP during 1995 is suspended effective January 1, 1995. (The ability of
participants in the DAP to make pre-tax contributions to the DAP during 1995
is not affected as of January 1, 1995, but will be reviewed, as provided in
paragraph 2 below, in August 1995.)
2. After the ESOP tranche purchase occurring in July 1995, the Company will
obtain the advice of its consultants regarding the DAP participants' ability to
make both pre-tax and after-tax contributions to the DAP during 1995, up to the
limits permitted under the Internal Revenue Code. The Company will provide the
Association with a report covering the advice received from its consultants. The
Company and the Association will meet during August 1995 to determine jointly,
based on the consultants' advice; (a) whether or not to revoke the suspension of
after-tax contributions effective January 1, 1995 in whole or in part, for the
remainder of 1995, with respect to some or all of the participants in the DAP;
and (b) whether or not to refund, in whole or in part, pre-tax contributions already
made in 1995, and earnings thereon as required by law; and (c) whether to
suspend pre-tax contributions in whole or in part for the remainder of 1995.
Based upon the consultants' advice, any such actions may apply to some or all
participants. If the Company and the Association are unable to make such a joint
determination, then the Company shall take such action consistent with the
terms of the DAP and applicable law as the Company determines in good faith is
necessary to maintain the tax-qualified status of the DAP and to avoid
penalties imposed upon the Company.
3. By November of each year after 1994 during the Wage Investment Period, the
Company will obtain the advice of its consultants regarding the DAP participants'
ability to make both pre-tax and after-tax contributions to the DAP in the following
year, up to the limits permitted under the Internal Revenue Code. The Company will provide the Association with a report covering the advice received from its
consultants. The Company and the Association will meet during each such
November to determine jointly, based on the consultants' advice, whether or no
to impose a suspension of the DAP participants' ability to make pre-tax and/or
after-tax contributions to the DAP to be effective January 1 of the following year.
Based on the consultants/advice, any such suspension may be partial or total,
and may apply to some or all participants. If the Company and the Association
are unable to make such a joint determination, then the Company shall take
such action consistent with the terms of the DAP and applicable law as the
Company determines in good faith is necessary to maintain the tax-qualified
status of the DAP and to avoid penalties (including loss of tax deductions) which
Letter 94-18
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might otherwise be imposed upon the Company.
4. After the ESOP tranche purchase occurring in July of each year during the
Wage Investment Period after 1995, the Company will obtain the advice of its
consultants regarding the contributions to the DAP during that year, up to the
limits permitted under the Internal Revenue Code. The Company will provide the
Association with a report covering the advice received from its consultants. The
Company and the Association will meet during August of each such year to
determine jointly, based on the consultants' advice; (a) whether or not to modify
or revoke their decision (of the. previous November) regarding the DAP
participants' ability to make pre-tax and/or after-tax contributions during that
year, and (b) whether or not to refund contributions already made during such
year, and earnings thereon, as required by law. Based on the consultants"
advice, any such modification or revocation may be partial or total, and may
apply to some or all participants. If the Company and the Association are unable
to make such a joint determination, then the Company shall take such action
consistent with the terms of the DAP and applicable law as the Company
etermines in good faith is necessary to maintain the tax- qualified status of the
DAP and to avoid penalties (including loss of tax deductions) which might
otherwise be imposed upon the Company.
5. Unless otherwise explicitly modified in this Letter of Agreement, the agreement
between the Company and the Association regarding the pilots' ability to make
pretax and after-tax contributions to the DAP remains unchanged.
IN WITNESS WHEREOF, the parties have signed this Letter of Agreement this 15th day of December 1994.
WITNESS: FOR UNITED AIRLINES, INC.
/s/ G. L. Andrews /s/ John R. Samolis
/s/ J. A. Craven John R. Samolis
Vice President
Labor Relations
WITNESS: FOR THE AIR LINE PILOTS IN THE
SERVICE OF UNITED AIR LINES, INC.
/s/ J. Stephen Smith
/s/ M. J. Severson /s/ J. R. Babbitt
/s /W. J. Arscott J. Randolph Babbitt, President
/s/ Larry D. Schulte Air Line Pilots Association, International.
/s/ H. E. Stepinsky
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ESOP Revisions
UNITED AIRLINES
December 22, 1994
Captain Harlow B. Osteboe, Chairman
UAL-MEC Air Line Pilots Association
6400 Shafer Court, Suite 700
Rosemont, IL 60018
Dear Captain Osteboe:
It is agreed that United will cause UAL Corporation to amend the ESOP and
Supplemental ESOP in accordance with our discussions, including the following
revisions:
1. Notwithstanding the fact that ALPA does not represent student flight officers, those students will be included in the ALPA Employee Group under these plans.
2. Compensation included in a participants first and second regular January (or May, 2000) paychecks which relates to services performed in the prior year will be included in ESOP compensation for the prior year.
If the terms of this settlement are acceptable, please sign and date the original and return for our files.
Sincerely,
/s/ John R. Samolis
John R. Samolis
Vice President
Labor Relations
Accepted and agreed to this
23rd day of December, 1994.
/s/ Harlow B. Osteboe
Captain Harlow B. Osteboe, Chairman
UAL-MEC Air Line Pilots Association.
Page 107 Letter 9-10
Letter 9-10
75 Hour FAR
UNITED AIRLINES
Captain Harlow Osteboe, Chairman
UAL-MEC Air Line Pilots Association
6400 Shafer Court, Suite 700
Rosemont, IL 60018
Dear Harlow,
The parties have mutually agreed to the following provisions as an addition to Section 20-E of the Agreement in order to accommodate the effect of the new FAR that imposes new limitations on crew composition involving Captains and First Officers who have less than seventy-five (75) flight hours of PIC or SIC time in that equipment type after completing transition training. The fallowing provisions apply only to Captains and First Officers who are not "initial" Captains and First Officers; the provisions of Section 20-E continue to apply to "operating experience" for initial Captains and First Officers.
Notwithstanding the provisions of Section 6-A-2 and Section 20-B-1-f, Captains and First Officers shall be subject to the following schedule and reserve assignment provisions if, at the time the line or trip assignment is made, the Captain or First Officer has not yet performed seventy-five (75) hours of flying as Pilot in Command or as Second in Command in his current aircraft type.
1.
1-a- If a Captain is senior enough to be awarded a primary line of flying through
preferencing upon his activation into his new Captain assignment, and if he does
preference and is awarded such a line, that line shall become his "OE" line.
1-b- If a First Officer is senior enough to be awarded a primary line of flying
through preferencing upon his activation into a new First Officer assignment, and if he does preference and is awarded such a line, that line shall become his "OE" line providing that the Captain holding the same line has completed seventy-five (75) hours as PIC or SIC in that equipment type at the time the monthly schedule assignment is being made. In the event the First Officers preference would normally result in his being awarded a line with a Captain who has not fulfilled the above seventy five (75) hour requirement, the First Officer will be awarded the next available line, according to his preference, to which the assigned Captain has satisfied the seventy five (75) hour requirement.
2. Lineholder Captains and First Officers who have not accumulated seventy-five (75) hours in their current assignment shall not be eligible to trip trade into an assignment which dines not comply with the above requirement, nor into an assignment in which the other pilot position is "open".
Letter 9-10 Page 108
3. If the newly transitioned Captain or First Officer does not have sufficient seniority to be awarded a line of flying under "1.", above, the Captain or First Officer will be awarded the reserve line to which his seniority entitles him.
4. Newly transitioned Captains and First Officers who have not accumulated seventy-five (75) hours as PIC or SIC in their current type at the time the assignment is made will not be eligible to be awarded secondary lines.
5. A newly transitioned Captain or First Officer who is a reserve and who has not
accumulated seventy-five (75) hours in his current equipment type may be bypassed in the FIFO assignment rotation in order to be assigned flying which does not violate the seventy-five (75) hour requirement. Further, such Captain or First Officer may, at his request, be placed at the top of the FIFO list until he has acquired seventy-five (75) hours in his current assignment. Each pilot who requests to be placed at the top of the list will be placed just below all other pilots who previously requested such placement.
6. Newly transitioned Captains and First Officers who have not accumulated seventy-five (75) hours in their current equipment type and who do not have a line or reserve assignment for the current month at the time they complete JOE, may be assigned to reserve or to an existing partial line or to a partial line created for them from open flying that does not violate the seventy-five (75) hour requirement. All trip pairings assigned to pilots who have not completed the seventy-five (75) hour requirement must, at the time of assignment, fall into one of the following groups: (1) a complete DSL published sequence, (2) a portion of a single published sequence or (3) any sequence to which a complete crew is assigned as a unit.
If this accurately reflects our understanding, please sign and return 2 copies our files.
Sincerely,
/s/ John R. Samolis
John R. Samolis
Vice President
Labor Relations
Accepted and agreed to this
24th day of July, 1995.
/s/ Harlow B. Osteboe
Harlow Osteboe, Chairman
UAL-MEC Air Line Pilots Association.
Page 109 Letter 9-1
Letter 9-1
Schedule Flexibility
UNITED AIRLINES
Captain Michael H. Glawe
UAL-MEC Chairman
Air Line Pilots Association
6400 Shafer Court Suite 700
Rosemont, IL 60018
Dear Mike,
As a result of the recommendations that were compiled by the Dependability Task Team, the parties have agreed to consider modifying the Agreement to allow pilots to have greater control over their schedules. Since most of the following modifications require considerable computer support in order to be administered reliably and some of the concepts are untried and intended to be experimental, this Letter of Agreement constitutes a mutual commitment to pursue development of the necessary processes and computer support in order to initiate trials of the concepts listed below and then to implement each provision when the panics agree that appropriate computer support is in place. Once implemented, any or all of these provisions can be discontinued by notice being given to the other party at least 90 days prior to the month in which the provision is to be discontinued.
1. Unlimited Trip Trading with Open Flying
Automated trip trading with open flying will include the following concepts:
1-a- The automated open flying trip trade system will use (1) a single monthly "run down", prior to the beginning of the subject month, during which trades will be awarded based on relative seniority and (2) an ongoing "first come, first served" system; both similar to the current Shuttle system.
1-b- No pilot will be permitted to drop a trip if it reduces the projected value of his line below fifty (50) credit hours, without Company concurrence.
1-c- Rules for establishing blackout and embargo days will be published and
available to pilots. It is intended that these two identifiers will be applied and
removed on a dynamic basis as coverage circumstances change; as such, it is
important that each pilot be aware of the factors that may cause his trading/
dropping opportunities to change as time passes.
1-d- New mutually agreed upon rules will be established and published to clearly define the opportunities regarding a trade that touches an embargo day or that departs on a blackout day. These rules will provide greater access than provided by the current Trip Trade Letter (93-2).
Letter 9-1 Page 110
1-e- Depending upon the size of the domicile, up to 3% of the credit time in any
equipment, status and domicile may be left as open time to facilitate trip trading
with open flying.
1-f- A pilot will be permitted to trip trade with or pick up open flying which results
in his projection exceeding the applicable actual flight time limit by up to two (2)
hours, if the trade involves flying on a blackout or embargo day. Once a pilot
becomes projected above the normal monthly flight time limit as a result of this
provision, he will not be required to drop a trip or portion of a trip if he later
becomes further over projected for any reason, unless he becomes projected more than one hour above the projection he had just prior to the assignment that
produced the additional hour.
1-g- A pilot may trip trade with another pilot as long as the resulting trade is legal under the provisions of Section 5.
2. Overprojection Protection
The provisions of Section 5-B-2-a, 5-B-3 and the related provisions of the
International Supplement shall be modified as follows:
2-a- If a pilot initially becomes projected over the actual limit applicable to him under Section 5-B-2-a (and related provisions of the International Supplement) and such overprojection is entirely (1) the result of flying a carryover trip from the prior month or (2) the result of his flying trips that did not project him to exceed the applicable limit at the time the assignment was made (including trips assigned under the provisions of Section Section 20-H or 20-I); then such pilot may, at his discretion, fly the remainder of his schedule without being required to drop any flying in order to comply with the 5-B-2-a limits.
2-b- A pilot may indicate his willingness to fly his complete schedule under this provision even if his projection should exceed the allowable actual monthly flight time due to month-end carry overs or operational increases in flight time. A mainline pilot may make this election at any time including during the line award process, in which case any adjustment made necessary by an inbound carry-over conflict can be repaired up to 83 actual flight hours (85 actual hours for international lines). A pilot may contact OPBCM via phone or computer during the operating month to rescind his willingness to further exceed his actual projection. The Company will then be required to make the appropriate adjustment to prevent the pilot's actual projection from exceeding by more than one hour his actual projection at the time he contacted OPBCM.
2-c- If a pilot initially acquired a high flight time projection under the provisions of "2-a." above, he shall not be required to drop a trip due to funkier overprojection, except under the conditions described in "1-f", above,
3. Make Up of Sick Leave
The provisions of Section 7-D of the International Supplement (voluntary makeup of sick leave) shall apply to all pilots, including Shuttle pilots as follows:.
Page 111 Letter 9-1
3-a- Such pilot shall be eligible to restore all or part of his accrued sick leave used for the illness absence on an actual hour for actual hour basis.
3-b- Restoration of sick leave accrual shall be accomplished by picking up open time under the provisions of Section 20-H-5 of the Agreement.
3-c- Pick up under this provision shall be limited to the month in which the
absence occurs.
4. Language Conflicts
It is understood that, should there be language within the Agreement that appeal to be in conflict with the provisions of this Letter, this Letter shall prevail. If this accurately reflects our understanding, please sign and return 2 copies for our files.
Sincerely,
/s/ John R. Samolis
John R. Samolis
Vice President Labor
Relations
Accepted and agreed to this
12th day of February, 1996.
/s/ Michael H. Glawe
Michael H. Glawe, Chairman
UAL-ALPA Master Executive Council
Revised as of this 26th day of October, 2000.
/s/ William P. Hobgood
William P. Hobgood
Senior Vice President
People
/s/ F.C. Dubinsky
Captain F.C. Dubinsky
Chairman
UAL/ALPA Master Executive Council.
Letter 96-10 Page 112
Letter 96-10
International Training
UNITED AIRLINES
Captain Michael Glawe, Chairman
UAL-MEC Air Line Pilots Association
6400 Shafer Court, Suite 700
Rosemont, IL 60018-7180
Dear Michael,
As a result of the new requirement that some newly trained Captains on equipment that performs international flying be assigned only domestic flying before receiving additional international training, the parties have agreed to the following:
1. Any pilot who is awaiting international training and/or who requires domestic flying due to the application of the "International Training Matrix" will be paid the value of his awarded line or the value of the flying he actually performs, whichever is greater.
2. In those domiciles where both international and domestic flying are available, a
pilot awaiting international training who is awarded a line with international flying in the line will be removed from those international trips and be available to be assigned to domestic flying on the days he was originally scheduled to fly. He will be considered to be at the top of the FIFO list for this provision.
3. In those domiciles where no or insufficient domestic flying is scheduled, a pilot
requiring domestic flying may, at his option, choose to be sent TDY, if TDY is
available at a domestic domicile. Such TDY assignments will be made in seniority order from those pilots who volunteer for TDY. Otherwise, these pilots will be eligible to be assigned individual domestic trip pairing originating from domestic domiciles. Such assignments will be constructed by incorporating legal deadhead segments at the start and end of the pairings; however, these pairings are not subject to the provisions of Section 8-L-6. Pilots eligible for single trip domestic assignments will be considered to be at the top of the FIFO list for this purpose.
If this accurately reflects our understanding, please sign and return 2 copies for our files.
Sincerely,
/s/ John R. Samolis
John R. Samolis
Vice President
Labor Relations
Accepted and agreed to this
31st day of July, 1996.
Page 113 Letter 96-10
/s/ Michael H. Glawe
Captain Michael Glawe, Chairman
UAL-MEC Air Line Pilots Association.
Letter 97-4 Page 114
Letter 97-4
Allocation of Flying Protocol
UAL-ALPA
AGREEMENT ON A PROTOCOL
FOR A CONSULTATIVE PROCESS
FOR ALLOCATION OF FLYING ISSUES
BACKGROUND
The 1963 Pilot Agreement was the first to contain the provision which subsequently caused more System Board disputes between the Company and ALPA than any other provision of the contract. The provision appears in Section 20, titled allocation, assignment and scheduling of flying, and reads:
It is the intent of the parties to this Agreement that this System Scheduling
Committee shall provide pilots with the opportunity to consult with and make
recommendations to the Company on the allocation of flying, assignment and
reduction of flying to pilot domiciles in accordance with the "equipment to seniority" concept:
"Equipment to seniority" shall mean that within the limits of flying hours available to a domicile by equipment type, the more senior pilots shall be given the opportunity to fly equipment in the following order:...
The System Board heard grievances submitted by ALPA alleging the Company was not complying with these provisions in 1967, 1970, 1971, 1973, 1984 and 1993. Each System Board decision, in addition to determining the contractual rights of the parties, stands for the proposition that the Company and ALPA have had significant difficulty determining how to effectively implement ALPA's opportunity to consult with and make recommendations to the Company on the allocation of flying, assignment and reduction of flying to pilot domiciles in accordance with the equipment to seniority concept.
Each System Board decision permitted the Company to make the final decision on allocation of flying issues. In these disputes, ALPA consistently maintained the Company failed to provide a meaningful opportunity to consult or that the Company failed to comply with the equipment to seniority concept. In making decisions on allocating, assigning and scheduling of flying, the Company maintained that it could modify a literal application of seniority due to various factors, such as:
HUMAN/CONTRACTUAL FACTORS
- Relative seniority of the equipment domicile
- Current equipment domicile size
- Other equipment types at the domicile
- Number of pilots with future bids
- Domicile stability.
Page 115 Letter 97-4
- Impact of additional commuters
ECONOMIC FACTORS
- Best flown flight time credit
- FTC with and w/o domicile
- Impact on other domiciles
- Efficient line construction
- Varied ID's EOM conflicts
- Stability
- Future of equipment type
- Training impact - retaining vs. closing base
- Adequate reserve utilization
- Administrative costs
Pursuant to the ESOP established in 1994, the parties adopted a Statement of
Principles which defined the basic ESOP expectations of the Company and ALPA. Two of those principles are:
It shall be our goal to encourage and embrace employee input into the decision making process in order to stimulate a feeling of personal ownership.
and
We will recognize and respect the managerial and representational roles and responsibilities of each organization.
The parties have noted that the allocation of flying provision of the contract and these two Statements of Principle are remarkably consistent with each other. The parties also recognize their recent experience with the DC10 equipment domicile closing demonstrates continuing difficulties with implementing the provisions of Section 20-A-2
Therefore, the parties desire to establish a protocol which recognizes, respects and implements both the Contract and the Statement of Principles regarding this most vital element of the Company - Pilot relationship, that is, the allocation of flying, assignment and reduction of flying in accordance with the equipment to seniority concept.
To that end, the Company must recognize its responsibility to give ALPA the
opportunity to provide meaningful input to the allocation and assignment of flying
process and ALPA must be confident that it has been given a legitimate opportunity to be consulted and to make recommendations before Company decisions are made on allocation of flying issues. The parties believe that ALPA's seat on the Board of Directors, its Officers' regularly scheduled monthly meetings with the CEO and President, and the SSC's participation in the Company's strategic planning process significantly enhance this level of confidence. Accordingly, the following protocol,
Letter 97-4 Page 116
which is intended to assist the Director of Flight Crew Resources and the System
Scheduling Committee, establishes the rights and obligations of each party whenever the Company must extend to ALPA the right to be consulted and to make recommendations on allocation and assignment of flying issues.
PROTOCOL FOR CONSULTATIVE PROCESS
1. The Parties agree that the following subject matters are within the concept of
allocation, assignment and scheduling of flying as described in Section 20 of the Pilot Agreement:
1-a- opening new or closing existing domiciles,
1-b- opening new equipment domiciles or closing equipment domiciles,
1-c- changing the size of domiciles in accordance with standards to be agreed upon.
2. When the need for a decision on an above referenced subject is identified, the Director of Flight Crew Resources (the Director) has the responsibility to give ALPA notice that it will be given the opportunity to be consulted and to make recommendations prior to the time the Company makes its decision. The Director will give this notice by issuing to the System Scheduling Committee (SSC) a Notice of Proposed Decision Making (NPDM). The Director has a good faith responsibility to issue the NPDM as soon as possible after the need arises to allow ALPA as much time as possible to respond.
3. The NPDM shall contain:
3-a- a statement of the issue the Company needs to decide,
3-b- an estimate of the time frame within which the Company must make a
decision,
3-c- specific information, if any, the Company may require from ALPA, and
3-d- the date by which ALPA's recommendations are required to be submitted to the Director.
4. The NPDM shall be delivered to the System Schedule Committee members by US Mail or by a more expeditious method, such as hand delivered or by FAX, except that it shall also be sent certified mail to the ALPA Master Chairman.
5. The SSC will respond to the NPDM by certified mail as quickly as possible given the time frame within which a decision must be made. The response to the Director shall indicate the following:
5-a- whether the SSC wishes to be consulted and given the opportunity to make a recommendation on the issue, and if it does, its initial impression about how and when it wants to address the issue, such as by conference call, at an immediate meeting or at the next SSC meeting,
Page 117 Letter 97-4
5-b- any preliminary information it desires for its preparation and evaluation of the issue prior to discussions with the Company,
5-c- an initial estimate of the time period the SSC believes will be required before it can make recommendations.
6. The Director will provide all requested pertinent information in accordance with
Section 20-A-2-f of the Pilot Agreement. If the Director is unable to provide the
requested information, the Director will inform ALPA of the reasons therefore.
7. When the parties discuss the issue, they will endeavor to identify the options
available to them at each stage of the decision making process and whether additional information or time is required to evaluate the options. The parties will consider, evaluate and apply the human, contractual and economic factors applicable to allocation of flying issues as appropriate to each stage of the decision making process. When the SSC is satisfied that the parties have fully explored their reasonable options, the SSC will advise the Director when the SSC will be able to make its recommendations to the Company. The SSC acknowledges that its recommendations must be submitted within the Company's time frame for decision.
8. ALPA's internal protocol will identify the process by which the SSC will develop its recommendations before they are submitted to the Company.
9. The SSC will submit its recommendation(s) in writing to the Director within the time limits specified in the NPDM, unless the parties have mutually agreed to a different deadline.
10. If the SSC is unable to comply with the time limits, it may request additional time from the Director. The Director will advise the SSC whether additional time can be granted, and if not, the reasons therefore. If additional time cannot be granted, the Director will advise the SSC when the decision will be made and when it will be announced.
11. Before making his decision, the Director will consider and evaluate the
recommendations made by the SSC, if any, and will communicate in writing to the SSC the reasons for accepting or rejecting their recommendations.
12. The SSC and the Director will provide feedback to each other on how well the
consultative process worked on each issue covered by a NPDM and the
improvements, if any, which they believe should be made to the process before the next NPDM is issued.
The parties agree this 24th day of February, 1997.
/s/ Michael H. Glawe
Captain Michael H. Glawe, Chairman
UAL-MEC Air Line Pilots Association
/s/ Hart A. Langer
Hart A. Langer, Senior Vice President
Flight Operations, United Airlines.
Letter 97-8 Page 118
Letter
97-8
777 Crew Rest
UNITED AIRLINES
Captain Michael H. Glawe, Chairman
UAL-MEC Air Line Pilots Association
6400 Shafer Court, Suite 700
Rosemont, IL 60018
Dear Michael,
All B-777 aircraft serving international destinations will be re-equipped with the
"Genesis" first class seat system. On all B-777 international flights of twelve (12)
hours scheduled flight time or less, one such seat will be reserved as a dedicated pilot rest facility. Until the "Genesis" seat installation process is completed, however, ALPA and Company negotiating committees have agreed to the following changes in the B-777 crew rest policy.
1. Seat 1E is the exclusive crew rest seat on all B-777 aircraft, and Seat 1F is to be assigned or occupied only if it is the last available seat in the first class cabin.
2. Both Seat 1E and Seat 1F shall be marked with appropriate seat coverings which identify the seats as reserved for crew rest. Additionally, a Customer Service Representative must advise the Captain of the status of Seat 1F at the time of departure and hand the Captain the seat cover if it was necessary to assign Seat 1F.
3. A Customer Service Representative will under no circumstances solicit the Captain or other crew members to relinquish Seat 1E.
4. Provisions 1 through 3 above shall be incorporated into the Flight Attendant
Handbook and the Flight Operations Manual.
5. A letter from John Edwardson which discusses provisions 1 through 3 above shall be sent to all Customer Service Representatives.
6. The Company agrees it will discuss with the Association all future planned changes to the "Genesis" first class seating configuration prior to their implementation.
If this accurately reflects our understanding, please sign and return 2 copies for our files.
Sincerely,
/s/ Chuck Vanderheiden
Chuck Vanderheiden
Director - Labor Relations
Flight Employees
Accepted and agreed to this.
Page 119 Letter 97-8
2nd day of May, 1997.
/s/ Michael H. Glawe
Captain Michael Glawe, Chairman
UAL-MEC Air Line Pilots Association.
Letter 97-9 Page 120
Letter 97-9
Open Flying for Flight Management
UNITED AIRLINES
Captain Michael H. Glawe
UAL-MEC Air Line Pilots Association
6400 Shafer Court, Suite 700
Rosemont, IL 60018-7180
Dear Michael,
As a result of changes made to the open flying pick-up procedures for line pilots by the "trip-trade with open flying" Letter of Agreement, the parties have agreed to add the following companion changes to the pick up process for flight-qualified
management:
Flight qualified managers may use the "zero trade" provision of the trip trade with
open flying process to pick up open flying, with the following limitations:
The availability of trips which are eligible for pick up by a manager will be limited to those trips that have been placed into open flying as a result of a line pilot having already performed a trade with open flying; except that a manager may pick up any trip that has been listed in open flying and available for pick up for at least 6 hours, or after 12 noon, local domicile time, whichever is later.
If this accurately reflects our understanding, please sign and return 2 copies for our files.
Sincerely,
/s/ Chuck Vanderheiden
Chuck Vanderheiden
Director - Labor Relations
Flight Employees
Accepted and agreed to this
16th day of May, 1997.
/s/ Michael H. Glawe
Michael H. Glawe, Chairman
UAL-MEC Air Line Pilots Association.
Page 121 Letter 9-13
Letter 9-13
FOQA Update
LETTER OF AGREEMENT
between
UNITED AIR LINES, INC.
and
THE AIR LINE PILOTS
in the service of
UNITED AIR LINES
as represented by
THE AIR LINE PILOTS ASSOCIATION,
INTERNATIONAL
THIS LETTER OF AGREEMENT is made and entered into in accordance with the provisions of Title 11 of the Railway Labor Act, as amended, by and between UNITED AIR LINES, INC. (hereinafter referred to as "the Company" or "United") and the AIR LINE PILOTS in the service of UNITED AIRLINES, INC. as represented by the AIR LINE PILOTS ASSOCIATION, INTERNATIONAL (hereinafter referred to as "the Association" or "ALPA").
W I T N E S S E T H:
WHEREAS, it is the intent of the parties to implement a Flight Operations Quality
Assurance Program (FOQA) to analyze data for the sole purpose of enhancing safety and efficiency of flight operations,
WHEREAS, a Flight Operations Quality Assurance Program (FOQA) requires specific pilot protective provisions which are not currently included in the FAR's, and the Company and ALPA agree that the implementation of any Flight Operations Quality Assurance Program (FOQA) will be held in abeyance until the required FAR protective provisions are effective or a waiver to United Air Lines is granted from the FM providing these protective provisions,
WHEREAS, the parties have successfully implemented a FOQA program per the
Letter of Agreement dated November 10, 1994,
WHEREAS, the Letter of Agreement was subsequently modified by an amendment.
Now, therefore, it is mutually agreed that this FOQA Letter of Agreement,
incorporating the changes per the Amendment, replace the FOQA Letter of Agreement dated November 10, 1994 contained within the 1994 Agreement between United Air Lines, Inc. and the Air Line Pilots in the service of United Air Lines, Inc. as represented by the Air Line Pilots Association, International is amended as follows:
A. DEFINITIONS:.
Letter 9-13 Page 122
A-1- "FOQA Program" - A program designed to enhance flight safety through
controlled analysis of recorded flight date information.
A-2- "Identifying Data" is any data or combination of data which allows collected data to be associated with a specific crew member.
A-3- "Identified Data" is any collected data prior to removal of all identifying data.
A-4- "Flight Data Recorder" is any device, equipment or system which collects, transmits or records in-flight data, whether installed to monitor pilot, aircraft component, or aircraft performance, or as consequence of performance of some other function.
A-5- "Cockpit voice recorder" is any device, equipment or system which monitors or records a pilot's voice while he or she is on an aircraft.
A-6- "Information," is any data transmitted, recorded or collected by use of a flight data recorder, cockpit voice recorder or any other recording device. The term "Information" shall further include tapes, transcripts, reports, papers, memos, statements, studies, charts, graphs or any other description, analysis or compilation of data collected by any such equipment.
A-7- "FOQA Monitoring Team" - A committee of three management pilots
appointed by the company: one from Safety, one from Domicile Operation and one from the Flight Center and three ALPA pilots selected by the MEC.
A-8- "Operational Excedence Event"- An event described by recorded data values indicating the aircraft was outside the normal operation envelope.
A-9- "Operational Routine Event"- An event in routine operation of statistical
interest such as time into operation when flaps are retracted.
A-10- "Designated Excedence Guidance Team Member" - a designated member of the ALPA Excedence Guidance Team who is conducting a specific event resolution and has the capability, if required, to identify the crew or crew members associated with collected data. This ALPA Excedence Guidance Team member will be the only person capable of identifying the flight crew associated with this collected data.
A-11- "ALPA Excedence Guidance Team" - MEC appointed pilots, designated to analyze operational events, and if necessary, identify, interview, exchange information with and provide guidance to the pilots involved. The Excedence Guidance Team members are the only persons capable of identifying a crew associated with the event.
B. FOQA PROGRAM:
B-1- The design, implementation, and operation of a FOQA program shall be by mutual agreement between the Company and the Air Line Pilots' Association. Any variation from the agreed upon FOQA program shall require the mutual agreement of the parties prior to implementation.
Page 123 Letter 9-13
B-2- The FOQA Monitoring Team shall oversee the day to day operations of the FOQA Program and establish necessary policies and procedures to ensure compliance with the provisions of this agreement.
B-3- The design of the FOQA program shall ensure the initial confidentiality and ultimate anonymity of individual crew members
B-4- Flight data collected from any recording device installed on a Flight simulator will be an integral part of the FOQA program and be administered by the FOQA program personnel. This data will be considered FOQA data and comply with all the provisions of the FOQA Agreement.
B-5- The letter of Agreement dated 11/11/94, regarding aircraft data collection systems, is incorporated herein by reference.
B-6- Any violation of the requirements of this agreed-upon FOQA program, or the terms herein, shall cause the FOQA program to be held in abeyance until the infraction is resolved to the mutual satisfaction of both parties.
C. SCOPE:
C-1- Sufficient de-identified data shall be maintained to fulfill the requirements of the agreed-upon FOQA program. All de-identified data, and analyses of such data, shall be made available to the parties.
C-2- There shall be continual evaluation of excedence values by the parties.
C-3- Any special studies or evaluations require mutual agreement by Company and Association members of the FOQA Monitoring Team.
C-4- Government agencies may be given access to de-identified data on
Company property with approval of the FOQA Monitoring ream.
D. DATA RETENTION:
D-1- Identifying data shall be removed from identified data as soon as possible, but no later than seven (7) days from the date of acquisition of the data by the Company.
D-2- Any employee/agent who has contact with any identified data used in a
FOQA program shall be prohibited from divulging any identifying data to any
individual other than an ALPA FOQA Monitoring Team member representative except as prescribed by statute or regulation.
E. DATA USE:
E-1- The sole contact with any flight crew member associated with a specific
excedence event shall be the "ALPA Excedence Guidance ream." (See diagram attached)
E-2- Only the specific designated FOQA Excedence Guidance Team member shall be able to identify the individual crew members associated with any specific data. (See amended diagram attached).
Letter 9-13 Page 124
E-3- Any notes, memoranda, or other documents used by the designated "ALPA Excedence Guidance Team" in any contact with any flight crew member concerning a specific FOQA event shall be considered "identified data" for purposes of this agreement and shall be "de-identified" in accordance with paragraph D-1 above.
E-4- At a minimum, the FOQA program may be used for evaluation of the
following areas:
Aircraft performance
Aircraft system performance
Crew performance
Company procedures
Training programs
Training effectiveness
Aircraft design
ATC system
Airport issues
Meteorological issues
Any additional areas of evaluation which the parties may desire to include in the FOQA program must be mutually agreed upon by the Company and the
Association prior to implementation.
F. DATA USE FOR TRAINING;
F-1- Collected FOQA data may be used to enhance individual training when the Technological capabilities are available. The FOQA Monitoring Team must approve procedures and use of FOQA data for this purpose.
F-2- Collected data may be used by an instructor, Standards Captain or Line
Check Airman to enhance the training.
F-3- Collected data used for individualized training must be reviewed at the
completion of the training period, either simulator or aircraft, and destroyed after such review.
F-4- Collected data cannot be used to evaluate the individual performance of the Pilot, the Instructor, the Line Check Airman or the Standards Captain.
F-5- Provisions must be incorporated assuring that aircraft or simulator data used to enhance training is incorporated in the de-identified FOQA trend data.
G. The pilot representatives involved in the Flight Operations Quality Assurance
(FOQA) Program shall be displaced from all or a portion of their scheduled trips in a cost effective manner while functioning in this capacity.
Page 125 Letter 9-13
IN WITNESS WHEREOF, the parties have signed this Agreement this 24th day of September, 1997.
WITNESS:
FOR UNITED AIR LINES, INC.
/s/ E.L. Soliday
E. L. Soliday, Vice President
Corporate Safety & Security
WITNESS:
FOR THE AIR LINE PILOTS IN THE SERVICE OF UNITED AIR LINES, INC.
/s/ J. R. Babbitt
J. Randolph Babbitt, President
Air Line Pilots Association, International
FOR THE UNITED AIRLINES MASTER EXECUTIVE COUNCIL
/s/ Michael H. Glawe
Michael H. Glawe, Chairman UAL-MEC
Ratified by the UAL -MEC 10/17/97.
Revised as of this 26th day of October, 2000.
/s/ William P. Hobgood
William P. Hobgood
Senior Vice President
People
/s/ F.C. Dubinsky
Captain F.C. Dubinsky
Chairman
UAL/ALPA Master Executive Council
Letter 9-1 Page 126
Letter
9-1
DENTK Contract Training
UNITED AIRLINES
January 6, 1998
Captain Michael Glawe, Chairman
UAL-MEC Air Line Pilots Association
6400 Shafer Court, Suite 700
Rosemont, IL 60018
Dear Mike:
The purpose of this letter is to inform you of how the Company will address some
specific issues relative to how contract training is conducted and to the use of revenue sharing simulators.
1. Contract Training
There are seven key areas that need to be properly managed: instruction, programs, simulator maintenance, facilities, scheduling, customer service and sales an marketing. The responsibility of each of these areas falls on either Flight Operations, UAL Services (Flight Training Services), or both as set forth below:
Instruction is the responsibility of Flight Operations "Wet" contract training for aircraft types United operates will be accomplished by Pilot Instructors on the UAL Pilot Seniority List in accordance with the Pilot Instructor Letter of Agreement (89-2) and under virtually identical working conditions.
Necessary training will be provided to Pilot Instructors when required to conduct non-UAL syllabus programs.
Program development is the responsibility of Flight Operations with coordination
support provided by FTS.
Simulator maintenance is the responsibility of Flight Operations.
Facilities provision and maintenance is the responsibility of Flight Operations.
Scheduling is the responsibility of Flight Operations. FTS has responsibility for
scheduling of contract customers and to demonstrate "operational control" in
accordance with FAR Part 142 certification.
Customer Service is the primary responsibility of FTS, but is also the responsibility of all United personnel who support contract training. FTS must coordinate each customer's entire training experience including: travel, hotel, scheduling, contracts, payment, and changes to training, while accommodating cultural differences and any other special circumstances that may arise.
Page 127 Letter 9-1
Sales and marketing is the responsibility of FTS. It is the responsibility of FTS to sell excess simulator and training capacity for United Airlines.
2. Revenue Share Simulators/Flight Training Devices
The Company is very supportive of the revenue share concept to the extent that it improves our flexibility to provide United pilot training and can generate revenues and profits for United Airlines when excess training capacity is available or sale by United. Therefore, we would like to see its successful implementation by the following:
2-a- Revenue Share simulators and flight training devices will be configured to meet existing UAL standards and maintained to those standards.
2-b- The contract agreement with the revenue share partner states, among other things, that United Airlines can purchase the device at any time from the
commencement of the contract and has first right to purchase if the partner elects to remove the simulator
2-c- United Airlines will purchase a revenue share device when it can be justified in accordance with corporate capital budgeting processes.
2-d- In the event that United's pilot training needs exceed existing United owned or leased simulator capacity, United's pilot group will be given first priority when planning training times in the revenue share simulators.
Recognizing that this is a new concept, the Company will maintain a collaborative
relationship with ALPA in further developing these opportunities.
Sincerely,
/s/ Hart A. Langer
Hart Langer
Senior Vice President
Flight Operations
/s/ Stephan G. Regulinski
Stephan G. Regulinski
President
Services.
Letter 9-2 Page 128
Letter 9-2
Standards Captain Job Share
U NITED AIRLINES
Captain Michael Glawe, Chairman
UAL-MEC Air Line Pilots Association
6400 Shafer Court, Suite 700
Rosemont, IL 60018
Dear Mike:
The parties have agreed to the establishment of a voluntary Standards Captain Job Share program in which two pilots who hold a Captain bid on the same equipment, in the same domicile, will share the duties of a Standards Captain and a line pilot. ALPA and the Company have jointly defined the procedures to administer this program as described in a letter to Captain Michael Glawe dated January 20, 1998. Additionally, the following provisions will apply to volunteers while participating in this program:
1. During the months in which the pilot is functioning in his line assignment, he may volunteer to perform LCA duties if he so desires. There is no implied obligation. if the pilot does volunteer, he will be governed by the provisions of Section 9.
2. For the month in which he will be functioning as a line pilot, the Job Share Special Assignment (JS) pilot will participate in the preferencing and awarding process at his domicile in order to have a line and/or reserve assignment.
3. ESOP contributions and the allocation of ESOP stock will be governed by the
appropriate ESOP documents.
4. Month End Conflicts
4-a- Pilots shall have the option to fly their inbound during the first days of special assignment at DENTK. The Company may request the pilot be removed from any portion of the inbound in order to be in position to begin his Standard Captain's duties and he will be pay protected for the portion of the trip in the outbound month. All contractual rest provisions will be applied prior to the pilot beginning his Standard Captain's duties at DENTK.
4-b- Pilots shall have the option to continue the DENTK duties of the JS pilot into the following month, the "line month". The Company may request the pilot be removed from any portion of his initial trip in the following month, if necessary, in order to continue Standard Captain's duties and he will be pay protected for the portion of the trip in the following month. If, as a result of performing Standard Captain activities in the following month, "the line month", the pilot has less days off than originally scheduled in his awarded line, these lost days will be restored to him in a following month in which he is assigned to DENTK or given to him as vacation credit days with his concurrence. All contractual rest provisions will be applied prior to the pilot beginning his line and/or reserve assignment.
Page 129 Letter 9-2
5. Vacation
5-a- Each volunteer pilot functioning as a Job Share Standards Captain will
maintain any annual vacation awarded to him for the 1998/99 vacation year. If the awarded vacation split is scheduled for a month in which the pilot is on special assignment as a Job Share Standards Captain to the Fleet at DENTK, the appropriate vacation day adjustment described in the Letter to Captain Michael Glawe dated January 20, 1998, will be applied. Remaining unawarded vacation may be taken by the Job Share Standards Captain either while functioning on the line or DENTK depending on where he is assigned for the particular month. This monthly vacation will be awarded under Section 11-E of the Pilot Agreement or UAL Series 15 policy as appropriate. The above procedures will apply prospectively to any pilot who enters the Standards Captains Job Share program after the awarding of the annual vacation.
5-b- Beginning with the next full vacation year (1999/2000), volunteer pilots on special assignment functioning as Job Share Standards Captains, will have half of their accrued vacation allocated to be taken while flying their line assignment and the remaining half adjusted, per the Letter to Captain Glawe dated January 20, 1998, to be taken while performing as a Job Share Standards Captain at DENTK. The appropriate previsions of Section 11 of the Pilot Agreement will apply for the bidding and awarding of annual and monthly vacation while the pilot is flying his line assignment at the domicile and UAL. Series 15 policy will apply to the bidding and awarding of both annual and monthly vacation while the pilot is on special assignment as a volunteer Standards Captain at DENTK.
If this properly represents our understanding, please sign and return (2) copies of this letter for our files.
Sincerely,
/s/ Charles H. Vanderheiden
Charles H. Vanderheiden
Director Labor Relations, Flight Employees
Accepted and agreed to this
23rd day of January 1998.
/s/ Michael H. Glawe
Captain Michael Glawe, Chairman
UAL-MEC Air Line Pilots Association.
Letter 9-3 Page 130
Letter 9-3
Management Pilot Definition
UNITED AIRLINES
Captain Michael Glawe, Chairman
UAL-MEC Air Line Pilots Association
6400 Shafer Court, Suite 700
Rosemont, II 60018
Re: Standards Captain Job Share Special Assignment Agreement
Dear Mike:
This letter will confirm our agreement that during any period when a pilot is in fact
functioning for United as a Standards Captain under the terms of Letter of Agreement 9-2, he is, insofar as pay, working conditions, performance of his actual job duties and the responsibilities relating thereto, a management employee. Accordingly, ALPA shall have no representational rights or obligations to any such pilot with respect to any issue relating to that pilot's employment as a Standards Captain. ALPA will continue, of course, to represent any such pilot as to other matters governed by the terms of the Agreement and for all purposes during those periods when the pilot is functioning as a line pilot.
If this properly represents our understanding, please sign and return (2) copies of this letter for our files.
Sincerely,
/s/ Hart A. Langer Captain
Hart A. Langer
Senior Vice President
Flight Operations
Accepted and agreed to this
23rd day of January 1998.
/s/ Michael H. Glawe
Captain Michael Glawe, Chairman
UAL-MEC Air Line Pilots Association.
Page 131 Letter 9-6
Letter 9-6
Domicile Swap Enhancement
UNITED AIRLINES
Captain Michael Glawe, Chairman
UAL-MEC Air Line Pilots Association
6400 Shafer Court, Suite 700
Rosemont, IL 60018-7180
Dear Michael,
As it is not the intent of the Company or the Association to limit a pilot to one domicile trade in his probationary year, the parties agree that this letter shall amend and replace Letter of Agreement 91-22.
Effective February I, 1998, any pilot in his probationary year, while occupying the
assignment which he received upon initial employment as a pilot, shall be eligible to enter into voluntary domicile trades, as follows:
1. Any pilot desiring to change domiciles under this provision must locate another
eligible pilot at the desired domicile with whom to trade. To be eligible to enter into a domicile trade, both pilots must hold assignments in the same status and equipment that they were initially trained for at DENTK as described above.
2. Both pilots involved must approve the trade. All pilots on the Pilot Eligibility
Seniority List whose seniority falls between these two pilots have thirty (30) days from posting of the notice to object to such trade. The Association will collect and maintain the necessary records of approvals.
3. Upon written notification to the Company by the Association that a trade has been agreed upon, without objection as provided under 2 above, the mutual transfer will be made effective on the first day of the next month for which schedules have not been posted for preferencing.
4. Pilots who make domicile changes under this provision will not receive Company paid moves nor be covered by any of the other provisions of Section 10. Such pilots will also accomplish necessary travel on their own time and will not receive Company paid time off for "travel days".
5. Bidding restrictions ("freezes") already in place will be unaffected by a domicile
trade. A trade will not generate a new freeze nor add to an existing one.
6. Any awarded vacation will be unaffected by a domicile trade.
7. There will not be a limit on the number of domicile trades, as long as the pilots
involved meet all of the requirements of this Letter. If this accurately reflects our
understanding, please sign and return 2 copies for our files.
Letter 9-6 Page 132
Sincerely,
/s/ Charles H. Vanderheiden
Charles H. Vanderheiden
Director Labor Relations - Flight
Employees
Accepted and agreed to this
2nd day of February 1998.
/s/ Michael H. Glawe
Captain Michael Glawe, Chairman
UAL-MEC Air Line Pilots Association.
Letter 9-8 Page 403
Letter 9-8
Simulator Scheduling Protocol
UNITED AIRLINES
April 30, 1998
United Airlines DENTK Simulator Scheduling Protocol
The attached Scheduling Protocol document has been developed in a cooperative spirit by representatives of ALPA, Flight Operations, and UAL Services (Flight Training Services). The purpose of this document is to provide a protocol to all trainees (United Airlines and Contract), instructors (United Airlines and Contract), management employees, and customers as to the use and prioritization of assets at the Flight Center.
It is the intent of all responsible parties to provide a quality training environment for all trainees who come to the Flight Center. To that end, the Scheduling Protocol document contains language which addresses the scheduling of simulators (and other flight training devices), classrooms, and instructors. The document also addresses the use of Revenue Sharing simulators, sale of guarantee simulator times, and prioritization of assets during operational changes.
This document is intended to be a living document which will be reviewed and
modified by mutual agreement to reflect the needs of all trainees who come to the Flight Center. By signing this document each party gives their support to abide by and support the implementation of the scheduling protocols.
/s/ Michael H. Glawe
Michael H. Glawe
Chairman, UAL-MEC Air
Line Pilots Association
/s/ Hart A. Langer
Hart A. Langer
Sr. Vice-President Flight
Operations
/s/ Andy Studdert
Andrew R Studdert
Sr. Vice-President Fleet.
Page 404 Letter 9-8
DENTK SIMULATOR SCHEDULING PROTOCOL
Prologue: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Chapter 1: Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Chapter 2: Sale of Guaranteed Simulator Time . . . . . . . . . . . . . . . 4
Chapter 3: Revenue Sharing Simulator Access & Scheduling . . . . . 4
Chapter 4: Long-range Planning and Scheduling Phase . . . . . . . . . 5
Chapter 5: Daily Planning and Scheduling Phase . . . . . . . . . . . . . . 6
Chapter 6: General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Chapter 7: Some examples . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Prologue
The purpose of accurate planning/scheduling for Flight Center activities is to ensure adequate resources are available to accomplish UAL training on the scheduled day as planned. There are three timelines in scheduling training events: Long-range Sale of Guaranteed Simulator Time, Long-range Planning and Scheduling Phase, and the Daily Planning and Scheduling Phase. This Protocol only applies to the current UAL Fleets.
Chapter 1: Definitions
1. C.B.A.: Collective Bargaining Agreement between United Airlines and the Air line Pilots Association.
2. Daily Planning and Scheduling Phase: from the 16th of the month prior to the Operational Month throughout the Operational Day.
3. Dry Contract Training: Contract Training that is sold only with a Simulator (or
FBS).
4. FBS: A Fixed Base Simulator which has no motion or visual capability. Also
referred to as FMAST or CPT.
5. Fleet Captain: Fleet Captain or his designee.
6. FTS: Flight Training Services, a business unit of UAL Services which is charged with the sale and marketing of Wet and Dry Contract Training.
7. Guaranteed Simulator Time: Simulator (or FBS) time that is sold to an FTS
customer (Wet or Dry) that cannot be canceled or changed without incurring a
financial cancellation penalty for United Airlines. This guarantee implies day of week or time of day.
8. Long-range Planning and Scheduling Phase: any time period prior to the 16th of the month prior to the Operational Month.
9. MRI Team: Mutual Resolutions of Issues Team consisting of FTS, UAL Flight
Operations, and ALPA participants.
Letter 9-8 Page 405
10. Nonguaranteed Simulator Time: Simulator (or FBS) time that is sold to an FTS customer (Wet or Dry) that can be canceled or moved any time (except as listed in this Protocol).
11. Off Campus Training: Simulator Training that is performed at a non-United
Airlines Facility.
12. Operational Month: (as defined in Section 2-O of C.B.A.) The Scheduling Month (for example, the Operational Month of February is defined as the 31st January through 1 March).
13. Operational Day: For Simulator periods starting at 06:00 on the date till 05:59 Local Time the next day (for example, the Operational Day of the 2nd of March runs from 06:00 the 2nd until 05:59 of the 3rd).
14. Overflow Training: All planned training that exceeds available UAL simulator time (approximately 80% of the Planned Capacity) in an Operational Month, in a given Fleet.
15. Planned Capacity: Total Simulator Time available for use from 06:00 to 02:00.
16. Reserve Buffer: a block of Simulator (or FSS) time in a given Fleet that is
allocated in the Long-range Planning and Scheduling Phase to be used during
unplanned events.
17. Reserve "M" Buffer: Maintenance time from 02:00 to 06:00 that can potentially be used, with Simulator Services, Fleet Captain, Instructor, and FTS crew concurrence, as a Reserve Buffer for FTS activities.
18. Revenue Sharing Simulator: a Simulator owned by a Simulator Manufacturer and used at DENTK for increased flexibility, Overflow Training, and additional revenue.
19. Simulator Services: A Flight Operations division which performs maintenance for Simulators and FBS's.
20. Sold Simulator Time: Simulator (or FBS) time in a given Fleet that has been sold to a FTS customer (Wet or Dry) for the purpose of a planned (new) activity, as compared to recouping lost Simulator time due to maintenance problems, UAL higher priority requirements, and/or FTS crew additional training requirements.
21. Surplus Capacity: All Simulator time leftover for sale, after UAL Flight
Operations, Maintenance needs, and Reserve Buffers are planned for in the Long-range Planning and Scheduling Phase.
22. UAL Simulator: a Simulator owned or leased by UAL Flight Operations.
23. Wet Contract Training: Contract Training that is sold with a Simulator (or FBS) and a United Airlines instructor.
Page 406 Letter 9-8
Chapter 2: Sale of Guaranteed Simulator Time
1. FTS may guarantee Surplus Capacity simulator time on a day specific basis, with exceptions only to be approved by the Fleet Captain, with the following restrictions:
1-a- Based upon the latest Training Plan supplied by WHQ, historical data,
DENTK Scheduling, Fleet planning, arid Simulator Services, the Fleet Captain will determine the total amount of Surplus Capacity in his Fleet. The Fleet Captain, with input from FTS, will determine the amount of simulator time, in that Fleet, that can be sold as Guaranteed Simulator Time.
1-b- In a Fleet with a Revenue Sharing Simulator, the Fleet Captain and FTS, in a collaborative fashion, will determine the amount of simulator time that can be sold as Guaranteed Simulator Time.
2. Guaranteed Simulator time can be sold no further out than 90 days from the
Operational Day, with the exception to be approved by the Fleet Captain and the MRI Team.
3. AFTER UAL scheduling needs in a particular Fleet are met, FTS can schedule
Guaranteed Simulator Time for a specific time of day after approximately the 1st of the month prior to the Operational Month. For example: the 1st of March for the Operational Month of April.
4. In NO case will the sale of Guaranteed Simulator Time generate the need for UAL pilots in training to go Off Campus for flight training.
5. In NO case will the sale of Guaranteed Simulator Time impact the ability for
Simulator Services to be able to perform routine and non- routing Simulator
Maintenance.
Chapter 3: Revenue Sharing Simulator Access & Scheduling
1. TRIGGER 1: The Revenue Sharing Simulators will be utilized when Overflow
Training, in a given Fleet, is projected during an Operational Month. UAI Flight
Operations will have first priority in scheduling this Overflow Training into the
Revenue Sharing Simulator.
2. TRIGGER 2: During the Long-range Planning and Scheduling Phase, if UAL Flight Operations needs are projected to use 25% or more of the 24:00 to 02:00 time slot in an Operational Month in a given Fleet, those incremental UAL crews will then be scheduled into the Revenue Sharing Simulator. Every effort will he made to sell enough simulator time to make this a cost neutral transaction.
3. During the Daily Planning and Scheduling Phase, if a Scheduling Disruption occurs, the Revenue Sharing Simulators should be used to accommodate crews according to Chapter 5: Daily Planning and Scheduling Phase of this Protocol
4. In NO case will the sale of Revenue Sharing Simulator Time by FTS, generate the need for UAL pilots in training to go Off Campus for flight training.
Letter 9-8 Page 407
5. United Airlines will purchase all Simulator Time scheduled in a Revenue Sharing Simulator at the agreed upon rate.
Chapter 4: Long-range Planning and Scheduling Phase
The purpose of accurate planning is to ensure that United Airlines personnel are given first choice to meet their training and maintenance requirements in accordance with the C.B.A. The Long-range Planning Phase has many key events which require coordination between the Fleets, Simulator Services, Scheduling, and Flight Training Services.
1. Priority of scheduling resources (Simulators, flight training devices, classrooms, Learning Center, etc.) for training and Simulator maintenance will be given to all UAL Flight Operations requirements. Classes will be built for all known UAL training requirements including:
1-a- Proficiency Checks
1-b- Initial, Transition, Upgrade, Requalification courses, and other Specialty
courses
1-c- Instructor/Evaluator training courses
1-d- Fleet development projects (as determined by the Fleet Captain)
2. Simulator maintenance will be scheduled in a manner which best accommodates the needs of the Fleet and Simulator Services, as determined by the Fleet Captain. This need can also include FTS. For example: in order to sell a particular FTS Contract, a simulator might require a modification or update.
3. Adequate Reserve Buffers (for UAL Flight Operations, Wet and Dry Contract
Training) will be established to provide reasonable unplanned capacity to
accommodate schedule disruptions which occur after the Long-range Planning Phase, including the following parameters:
3-a- Unplanned Simulator Maintenance
3-b- Additional training requirements
3-c- Rechecks
3-d- Any other subjective buffers deemed prudent (i.e. weather, holiday etc.) as determined by the Fleet Captain.
4. The scheduling for UAL pilots in training for the most desirable time will be as
provided in the C.B.A. Section 9-G-9.
5. After completion of the Long-range Planning process (UAL Flight Operations
training and Maintenance requirements and all Reserve Buffers have been planned) all remaining Surplus Capacity can be released for sale by FTS.
6. NO Reserve Buffer time will be sold by FTS without Fleet Captain approval, and then only on a "non-guaranteed" basis.
Page 408 Letter 9-8
7. NO Reserve "M" Buffer will be sold by FTS without Fleet Captain and Simulator Services approval, and then only on a "non-guaranteed" basis.
8. Surplus Capacity that has been released to FTS, but has not been sold, may be reclaimed by Flight Operations, if needed, as determined by the Fleet Captain
Chapter 5: Daily Planning and Scheduling Phase
The purpose of Daily Planning and Scheduling is to administer the Long-range Plan and make adjustments as necessary to minimize disruptions and establish a priority system when disruptions occur.
1. Reserve Buffers will be allocated on a priority basis, as needed. The scheduling for UAL pilots in training for the most desirable time will be as provided in the C.B.A. Section 9-G-9.
2. NO Reserve Buffer time will be sold by FTS without Fleet Captain approval, and then only on a "non-guaranteed" basis.
3. NO Reserve "M" Buffer will be sold by FTS without Fleet Captain and Simulator Services approval, and then only on a "nonguaranteed" basis.
4. Once ANY actual Simulator/FBS training session has started (not including the
briefing), the training session shall not be canceled and/or delayed substantially
without permission from the Instructor involved unless the Fleet Captain, with
appropriate coordination, authorizes the interruption (the session will still have to end at its regular scheduled time period, as per priority 7 below).
5. In the event that a UAL crew's training period is disrupted and in the judgment of the Instructor involved that training is negatively impacted, then the training event will be rescheduled in its entirety and the period that was disrupted will not count toward the completion of that course.
6. If the Reserve "M" Buffer is needed in the Daily Planning and Scheduling Phase, and Simulator Services approval is given, the following priority will be adhered to:
6-a- All priority will be given to moving Dry Contract Training in that time slot.
6-b- If no Dry Contract Training can be moved into the Reserve "M" Buffer, and extra simulator time is still needed, FTS will attempt to delay the Wet Contract Class to the next possible slot, probably the next day.
6-c- If no other alternatives are viable, Wet Contract Training can be moved into the Reserve "M" Buffer, with Instructor and Crew concurrence. The rest and duty requirements for the Pl's associated with these assignments are addressed separately by the Company and ALPA in the Pl Guidelines.
Letter 9-8 Page 409
7. For the Operational Day during a disruption with no sufficient Reserve Buffers
available, the following priority list indicates the highest to the lowest priority. Events A, B, C, and D are expected to complete their full scheduled event, all other events should reduce their Simulator time to get back on schedule. When a training event needs to be canceled or moved, the priority list will be applied in reverse order:
7-a- Any UAL Operational Currency event (i.e. Landing Currency)
7-b- UAL PC's & CQP Day 1, 2, & 3 (Annual Training Events)
7-c- UAL and FTS (Wet or Dry) Transition course check rides, LOE's, and
Validations
7-d- UAL Transition training periods within two periods of a Check or LOE, and within one period of a Validation event
7-e- Any UAL Scheduled Training
7-f- Fleet Projects, as determined by the Fleet Captain
7-g- Any Guaranteed FTS Scheduled Events
7-h- Any nonguaranteed FTS previously Scheduled Events
7-i- FTS Events (i.e. sold Reserve Buffer time)
7-j- All other events
8. If a UAL and FTS event fall within the same priority category, UAL events will take priority over FTS events.
9. The Daily Scheduler must manage the schedule disruptions so as to minimize the effects of that disruption on as few crews as is possible. In the event of a mechanical disruption and/or a Simulator period running over its normally scheduled time, the next scheduled period will normally absorb the overage, as determined by the priority list above, unless the Daily Scheduler, in conjunction with the Fleet Captain, and if possible, the involved Instructors, determines an alternative plan would be more advantageous.
Chapter 6: General
1. Because of the unique nature of the Simulator Scheduling Protocol, the MRI Team will on a monthly basis review, monitor, report, and if necessary, make
recommendations and changes in the following areas:
1-a- The sale of Guaranteed Simulator Time.
1-b- The use of the Revenue Sharing Simulators. A periodic study will be
performed on the entire Revenue Sharing Simulator concept, including the
potential purchase.
1-c- The concept of Reserve Buffers, utilizing such measures as:
1-c-1- All Planned versus Actually used Reserve Buffer time slots in the
previous month.
Page 410 Letter 9-8
1-c-2- What kind of activity was scheduled and who used the Reserve Buffers
1-d- A Simulator (or FBS) usage report of the Reserve "M" Buffers. A study will be performed anytime the usage of the Reserve "M" Buffer exceeds 5% per month in a given fleet. The report of this study will include the following:
1-d-1- Reasons for the high Reserve "M" Buffer usage
1-d-2- If this is just an anomaly or whether this is an upward trend
1-d-3- Necessary Reserve Buffer adjustments
1-d-4- Additional simulator capacity justification
1-d-5- Other relevant facts, as determined by the MRI Team
1-e- Long-range and Daily Planning and Scheduling Phase.
1-f- Other relevant facts, as determined by the MRI Team.
2. In either case, approximately 6 months after the start of the full implementation of the Simulator Scheduling Protocol, all appropriate parties involved will perform a thorough review and publish a report.
3. In case of a dispute over access to any UAL Simulator or Device, the Fleet Captain will make the final determination.
4. In case of dispute over access to a Revenue Sharing Simulator, the Fleet Captain and FTS, in a collaborative fashion, will make the final determination. In the event no satisfactory resolution can be reached in a timely fashion, the Fleet Captain will make the final determination.
5. In keeping with the spirit of cooperation between the Company and ALPA, all
current and future matters regarding the DENTK Simulator Scheduling Protocol topic will be resolved in a collaborative fashion.
Chapter 7: Some examples
Example (A):
The Long-range Schedule reflects the following in Simulator 1:
- FTS Transition Check ride from 06:00 to 10:00
- UAL PC Day 3 from 10:00 to 14:00
- UAL PC Day 2 from 14:00 to 18:00
- UAL Transition Period 3 from 18:00 to 22:00
- FTS "Dry" Transition Period 8 from 22:00 to 02:00
The Simulator is running 1 hour late due to mechanical problems. The Schedule will now reflect the minimizing of scheduling disruptions, with no Reserve Buffers
available, on the Operational Day:
- FTS Transition Check ride from 07:00 to 11:00
- UAL PC Day 3 from 11:00 to 15:00
- UAL PC Day 2 from 15:00 to 19:00.
Letter 9-8 Page 411
- UAL Transition Period 3 from 19:00 to 22:00 (this crew "eats" it) **
- FTS "Dry" Transition Period 8 from 22:00 to 02:00
* *unless the Daily Scheduler determines it would be more feasible for the UAL crew to continue
Example (B):
The Long-range Schedule reflects the following in Simulator 1:
- FTS Transition Check ride from 06:00 to 10:00
- UAL PC Day 3 from 10:00 to 14:00
- UAL Transition Period 6 from 14:00 to 18:00
- Reserve Buffer from 18:00 to 20:00
- UAL Transition Period 3 from 20:00 to 00:00
The Simulator is running 1 hour late due to mechanical problems. The Schedule will now reflect the minimizing of scheduling disruptions, with Reserve Buffers available, on the Operational Day:
- FTS Transition Check ride from 07:00 to 11:00
- UAL PC Day 3 from 11:00 to 15:00
- UAL Transition Period 6 from 15:00 to 19:00 (this crew does not have to eat
it)
- Reserve Buffer from 19:00 to 20:00
- UAL Transition Period 3 from 20:00 to 00:00
Example (C):
The Long-range Schedule reflects the following in Simulator 1:
- FTS Guaranteed Dry Transition Period 6 from 06:00 to 10:00
- UAL PC Day 3 from 10:00 to 14:00
- UAL PC Day 2 from 14:00 to 18:00
- UAL Transition Period 7 from 18:00 to 22:00
- FTS Nonguaranteed Transition Period 3 from 22:00 to 02:00
UAL needs one additional simulator period for a Check ride, and no Reserve Buffer is
available:
- FTS Guaranteed Dry Transition Period 6 from 06:00 to 07:00 **
- UAL Transition Check ride from 07:00 to 10:00
- UAL PC Day 3 from 10:00 to 14:00
- UAL PC Day 2 from 14:00 to 18:00
- UAL Transition Period 7 from 18:00 to 22:00.
Page 412 Letter 9-8
- FTS Nonguaranteed Transition Period 3 from 22:00 to 02:00
** If Reserve "M" Buffer available, this FTS simulator period could possibly move up earlier
Example (D):
The Long-range Schedule reflects the following in Simulator 1:
- UAL Transition Period 3 from 06:00 to 10:00
- UAL Transition Period 8 from 10:00 to 14:00
- FTS Transition Period 8 from14:00 to 18:00
- UAL PC Day 1 from 18:00 to 20:00
- FTS Transition Period 3 from 20:00 to 00:00
- Maintenance upgrade from 00:00 to 06:00
UAL Transition Period 8 experiences a mechanical problem and is now 2 hours late. The Schedule will now reflect the minimizing of scheduling disruptions on the Operational Day:
- UAL Transition Period 3 from 06:00 to 10:00
- UAL Transition Period 8 from 10:00 to 16:00 FTS
- Transition Period 8 from 16:00 to 18:00 (this crew "eats" it)
- UAL PC Day 1 from 18:00 to 20:00 FTS
- Transition Period 3 from 20:00 to 00:00
- Maintenance upgrade from 00:00 to 06.00.
Letter 98-13 Page 413
Letter 98-13
777 Crew Rest
UNITED AIRLINES
Captain Michael H. Glawe, Chairman
UAL-MEC Air Line Pilots Association
6400 Shafer Court, Suite 700
Rosemont, IL 60018
Dear Mike:
The Company has indicated a desire to introduce the B777 model aircraft into the Pacific operation. This strategy will likely prevent market fragmentation and sustain the efficient operation of current routes that no longer support the use of the B747- 400. Additionally, the introduction of the B777-B model aircraft on such routes will provide long-term growth opportunities including increased B747-400 operations into the Pacific. Therefore, to facilitate the Company's operation of Pacific ETOPS flight segments with B777 model aircraft, the parties have agreed to install an ALPA approved rest facility as follows:
1. The Company will equip all current and future B777-B model aircraft with a crew bunk facility similar to the B747-400 aircraft. Until the crew bunk facility is installed on B777-B model aircraft, the Genesis seat will serve as the pilot crew rest facility. The Company will retrofit all current B777-B model aircraft with a crew bunk according to the agreed upon schedule, provided all of the variables pertaining to the retrofit occur as planned.
2. The Company will retrofit all three class B777-B and B777-A model aircraft with a Genesis seat. The Company will complete the installation of Genesis seats on all B777-B and B777-A model aircraft according to the agreed upon schedules, provided all of the variables pertaining to this retrofit occur as planned. The Company, however, is not obligated to equip B777 model aircraft dedicated to the domestic operation with crew bunks or Genesis seats and these aircraft will not be scheduled nor substituted into the international operation.
3. A joint committee comprised of Company and ALPA representatives will monitor the development and installation of the crew bunk facility and the Genesis seat to ensure compliance with this agreement.
4. Prior to the installation of the crew bunks on the B777-B model aircraft, the
Company may only schedule Pacific ETOPS flight segments with aircraft equipped with the Genesis seat. The Company may, however, substitute a B777 model aircraft equipped without Genesis seats to avoid a cancellation. This substitution provision will remain in effect until March 1, 2000, or until 12 B777 model aircraft are equipped with the Genesis seat, whichever occurs first. Additionally, the Company will provide the Association with documentation indicating the flight segments on which any.
Page 414 Letter 98-13
substitution was necessary and the reasons for the substitution. Completion of the installation of crew bunks and Genesis seats as set forth above resolves the crew rest issue on the B777 model aircraft utilized in the international operation and, thereafter, the Company may continue to operate such aircraft in accordance with the terms of the Agreement.
5. The Company will not operate augmented B767 flying in the Pacific until such
aircraft are fitted with an ALPA approved crew rest facility.
If this accurately reflects our understanding, please sign and return 2 copies for our files.
Sincerely,
/s/ William P. Hobgood
William P. Hobgood
Sr. Vice President- People
Accepted and agreed to this
18th day of December, 1998.
/s/ Michael H. Glawe
Captain Michael H. Glawe, Chairman
UAL-MEC Air Line Pilots Association.
Letter 98-14 Page 415
Letter 98-14
HNL Domicile
UNITED AIRLINES
LETTER OF AGREEMENT
Between
UNITED AIRLINES, INC.
And
THE AIR LINE PILOTS
in the service of
UNITED AIRLINES, INC.
as represented by
THE AIR LINE PILOTS ASSOCIATION,
INTERNATIONAL
THIS LETTER OF AGREEMENT is made and entered into in accordance with the provisions of Title II of the Railway Labor Act by and between UNITED AIRLINES, INC. (hereinafter referred to as "United" or the "Company"), and the AIR LINE PILOTS in the service of UNITED AIRLINES, INC. as represented by the AIR LINE PILOTS ASSOCIATION, INTERNATIONAL (hereinafter referred to as "ALPA" or the "Association").
W I T N E S S E T H:
It is hereby mutually agreed:
1. The current Honolulu domicile established during the term of the 1991 Agreement will be limited to the B-747 except that short range equipment such as the B-737 and/or B-727 may also be introduced for inter-island service only. Such inter-island equipment domicile may be established as either a permanent or TDY domicile. The Company will consult with the Association prior to establishing such inter-island Honolulu domicile. Additionally, the Company agrees to use Letter of Agreement 97-4 (Allocation of Flying Protocol) prior to the introduction of any other equipment in the Honolulu domicile.
2. As long as the B-747 flying supporting the Honolulu domicile is sufficient to
maintain a minimum line level, the domicile will remain open. As the system-wide B-747 flying is reduced due to the phasing out of the equipment, the reduction will be accomplished under the provisions of Section 8 of the Agreement. The Company and the SSC shall monitor the B-747 flying on a monthly basis to assure compliance with this provision.
Page 416 Letter 98-14
3. In construction of DSL pairings for the Honolulu B-747 equipment domicile, the Company will observe the scheduling philosophies required by Letter 91-7
(Scheduling Practices Letter). All Section 20 scheduling dispute resolution procedures will be available to address any problems associated with these parings, up to and including a review by the Senior Vice-President, Flight Operations.
4. A paid move from the Hawaiian Islands to any point in the contiguous 48 states will be available to any pilot who (1) retires (including early or medical retirement) while based in Honolulu and (2) who has an established residence in Hawaii. Notwithstanding the provisions of Section 10-C-3 of the Agreement, this move entitlement shall apply only to a move from the Hawaiian Islands to the Mainland.
5. Bid but unfilled vacancies in Honolulu shall not be subject to involuntary
assignment under the provisions of Section 8-F of the Agreement, except the
Honolulu assignments may be given as initial assignments to newly hired pilots. In the event the Company is unable to fill vacancies at Honolulu, required manpower may be filled through the use of temporary duty under the provisions of Section 8-L of the Agreement. For this purpose and notwithstanding the provisions of Section 8-L-3-b, a pilot may be involuntarily assigned up to 60 days of TDY per year, in addition to any voluntary TDY which he also may have performed. Further, notwithstanding the provisions of Section 8-L-3-c, the normal minimum TDY assignment on Honolulu will be for a full schedule month.
6. This Letter of Agreement shall become effective upon signing and run concurrently with Section 22 of the 1994 Pilot Agreement. The parties have signed this Letter of Agreement this 18th day of December, 1998.
FOR THE AIR LINE PILOTS
IN THE SERVICE OF
UNITED AIRLINES, INC. FOR UNITED AIRLINES, INC.
/s/ Michael H. Glawe, Chairman /s/ William P. Hobgood
UAL-MEC Air Line Pilots Association Senior Vice President
People Division
Letter 99-6 Page 417
B747-400 Currency
UNITED AIRLINES
Captain Michael H. Glawe, Chairman
UAL-MEC Air Line Pilots Association
6400 Shafer Court, Suite 700
Rosemont, IL 60018
Dear Captain Glawe:
The Association and the Company have jointly agreed to review the staffing and the currency requirements for augmented flying. This review has been separated into two distinct parts. One discusses temporary modifications to address currency requirements. The other studies various methods of staffing augmented flights. The following procedures will apply until the staffing study is completed:
The B747-400 crews will, in addition to the PC/CQP, be scheduled for a PT as follows:
The PT will be scheduled in the same manner as a PC/CQP, using a base six (6)
months from the PC/CQP base month. The PT will comply with the PC/CQP scheduling rules of the Agreement. Travel to and from a PT will be the same as the PC/CQP.
In addition to the present landing currency requirements, all B747-400 first officers will be required to accomplish one (1) landing and take off in the aircraft within 180 consecutive days.
A new training opportunity will be implemented, an Operating Experience Refresher ("OER"). The OER will consist of at least two (2) segments in the aircraft. A minimum of one (1) segment will be flown with the pilot receiving the OER as the pilot flying ("PF"). A check airman will conduct the OER. The check airman may extend the OER beyond the minimum two (2) legs if
necessary. The Company may assign an OER to a pilot during his last 30 calendar days of availability prior to the expiration of the 180-day landing/takeoff currency limit. During any time other than this last 30 calendar day period, the Company may assign an OER only with pilot concurrence.
Page 418 Letter 99-6
Lineholders who are subject to an OER as described in the above paragraph may be assigned up to the actual domestic limits of FAR 121.471. With pilot concurrence, The OER may be scheduled on days off in conjunction with
vacation. If the pilot refuses an OER on his vacation days off, any flying lost due to not qualified status ("NQ") will be pay protected to the 78-hour guarantee.
A first officer requiring an OER may be assigned an open flying ID or displace a
first officer in a flying ID.
Letter 91-28 will apply to OER's for reserve pilots in the same manner as IOE's.
Over-projection protection contained within Letter of Agreement 9-1 will apply to OER assignments. Consistent with 3-B-4-c-2, the pilot will be paid his line value or his line value after the OER modification, whichever is greater.
The following modifications will be implemented for the B747-400 schedules.
Commencing with the March 1999 schedule, lines of flying will be constructed to
include a combination of flying and non-flying ID's when possible. Specifically, one (1) flying ID will be traded for a non-flying ID provided it has the same schedule legs and pay value. First officer ID's with all domestic flying may be redistributed to relief pilot lines' whenever possible.
First officers who have repeated two (2) training/checking events within twenty-four (24) months, or first officers with less than 75 hours in the aircraft, will not be
permitted to bid a line or be assigned an ID with a captain who has repeated two
(2) training/checking events within twenty-four (24) months or a captain with less
than 75 hours in the aircraft. If a first officer is paired with a captain who has not fulfilled the initial requirement of ten (10) landings, OPBCM may provide other flying that would maintain the first officer's landing currency. This modification will require the first officer's concurrence. If the replacement flying is of a lesser value, the first officer will be pay protected for the greater. With his concurrence, a flight officer that could lapse landing currency may be removed from an ID and assigned other flying to maintain his currency. If the replacement flying is of a lesser value, the flight officer will be pay protected for the greater.
Letter 99-6 Page 419
Pilots will be prohibited from trading out of a flying ID when they have exceeded
120 days without an actual landing and take off in the aircraft by freezing the ID.
Once a pilot has been assigned an OER, all flying ID's will no longer be frozen.
OPBCM may effect the trade, providing the pilot is attempting to trade into another flying ID and allowing the trade will not negatively influence the outcome of the pilot's currency.
The following flight assignment restrictions will apply to the B747-400: A first officer who is not landing/take off current (180 day currency) in the aircraft
can only be given an OER assignment to regain currency. OPBCM may alter FIFO order to make a flying ID assignment to a captain or first officer who is within 30 days of lapsing currency. The parties encourage pilots to assist in maintaining currency requirements by exchanging roles within an ID whenever possible.
A "Safety Awareness" program will be scheduled and all pilots will be required to
attend a presentation of this program or revert to NQ, non-pay status. This program will be approximately one (1) hour long. The pilot will receive one (1) hour of pay for attending in addition to all other pay for the month. A schedule will be posted of the viewing times available at each domicile and DENTK for the entire presentation period. A pilot may view the Safety Awareness program at any location.
The provisions contained within this Letter will initially apply to the B747-400 fleet but may be expanded to other augmented fleets. The parties agree to monitor the results of the above provisions and will immediately meet to address any necessary modifications. The provisions of this Letter will remain in effect until the completion and implementation of the Augmentation Study or December 1, 1999, whichever occurs first, unless both parties agree to an extension.
This Letter of understanding reflects the changes necessary to comply with the FAA requirements in place for the time period required to complete the Augmentation Study. Provisions contained within this Letter are non-precedent setting and will not be cited by either party in any manner.
If this accurately reflects our understanding, please sign and return two (2) copies for our files.
Sincerely,
/s/ Hart A. Langer.
Captain Hart A. Langer
Senior Vice President
Flight Operations
Page 420 Letter 99-6
Accepted and agreed to this 31st day of March, 1999.
/s/ Michael H. Glawe
Captain Michael H. Glawe, Chairman
UAL-MEC Air Line Pilots Association.
Letter 99-7 Page 421
LCA Work Rules and Compensation
Captain Michael H. Glawe, Chairman
UAL-MEC Air Line Pilots Association
6400 Shafer Court, Suite 700
Rosemont, IL 60018
Dear Mike,
The parties have agreed to the following work rules and compensation for those line pilots functioning as Line Check Airmen:
1. Line Check Airmen (LCAs) will be limited to no more than ten (10) duty periods per month, unless more periods are necessary to complete an OE. In no event will an LCA exceed 83 hours actual (75/81 hours actual for reserves in accordance with Section 5-B-2-b) projected domestically, or 85 hours actual (75/81 hours actual for reserves in accordance with Section 5-B-2-b) projected internationally. Paragraph 2 (Overprojection Protection) of Letter of Agreement 9-1 will apply to these monthly limitations.
2. When a pilot's ID is utilized to Accommodate an OE construction, the following priorities shall be preferred for displacement:
a) Complete ID's.
b) Turn arounds at the beginning or end of an ID.
c) Segments as necessary within an ID.
3. An LCA who holds a higher paying bid may be retained by the Company in his current equipment for up to 180 days after his pay is triggered in the new assignment with the LCA's concurrence.
4. Initial Operating Experience (IOE) for Captains and First Officers may be conducted by designated Captain Line Check Airmen functioning on their assigned trips. In any month that the Check Airman is utilized in this capacity, he shall receive his normal salary plus a Four Hundred Dollar ($400.00) override to cover up to three (3) duty periods in which he so functions. For each subsequent duty period in such capacity, he shall receive an additional One Hundred Dollars ($100.00) override. In no case will his pay as an LCA be less than nine percent (9%) of his hourly pay for the monthly hours performed as an LCA..
Page 422 Letter 99-7
5. Initial Operating Experience (IOE) for Second Officers may be conducted by
designated Second Officer Check Airmen functioning on their assigned trips. In any month that the Check Airman is utilized in this capacity, he shall receive his normal salary plus a Three Hundred Dollar ($300.00) override to cover up to three (3) duty periods in which he so functions. For each subsequent duty period in such capacity, he shall receive an additional Seventy-five ($75.00) override. In no case will his pay as an LCA be less than nine percent (9%) of his hourly pay for the monthly hours performed as an LCA.
6. An LCA will be paid for his highest projection for the month, unless a lower
projection results from loss of flying due to operational irregularities or the LCA's
actions.
7. All the required forms necessary for a line pilot to apply for the position of Line Check Airman (LCA) along with the agreed to LCA Guidelines will be available in the Flight Office at each domicile.
8. This agreement shall become effective May 1, 1999. Until automation is completed, computation and payment of the nine percent (9%) as set forth in paragraph 4 and 5 above will be made on a retroactive basis. If this accurately reflects our understanding, please sign and return two (2) copies for our files.
Sincerely,
/s/ Hart A. Langer
Captain Hart A. Langer
Senior Vice President
Flight Operations
Accepted and agreed to this 27th day of April, 1999.
/s/ Michael H. Glawe
Captain Michael H. Glawe, Chairman
UAL-MEC Air Line Pilots Association
Revised as of this 26th day of October, 2000.
/s/ William P. Hobgood
William P. Hobgood
Senior Vice President
People
/s/ F.C. Dubinsky.
Letter 99-7 Page 423
Captain F.C. Dubinsky
Chairman
UAL/ALPA Master Executive Council.
Page 424 Letter 99-8
Wide-Body New-Hire
UNITED AIRLINES
Captain Michael H. Glawe, Chairman
UAL-MEC Air Line Pilots Association
6400 Shafer Court, Suite 700
Rosemont, IL 60018
Dear Captain Glawe:
On March 29, 1999, we discussed our previously unwritten agreement of not
assigning new-hire pilots for their initial assignment to wide-body First Officer
positions in an international operation. Flight Operations agrees this is a wise
approach in helping maintain the highest safety standards in our international
operation.
To this end, I am reaffirming my direction to Flight Crew Resources and to the Denver Flight Center to continue this policy and ensure that all new-hire pilots receiving their initial assignment not be assigned to any wide-body First Officer position in an international operation. If this accurately reflects our discussion and our agreement, please sign and return two (2) copies to me for our files.
Sincerely,
/s/ Hart A. Langer
Captain Hart A. Langer
Senior Vice President
Flight Operations
Accepted and agreed to this 27th day of April, 1999.
/s/ Michael H. Glawe
Captain Michael H. Glawe, Chairman
UAL-MEC Air Line Pilots Association.
Letter 99-9 Job Share Standards Captain Guideline Change Page 425
UNITED AIRLINES
June 30, 1999
Captain Michael Glawe, Chairman
UAL-MEC Air Line Pilots Association
6400 Shafer Court. Suite 700
Rosemont, II. 60018-7180
Dear Mike,
This letter is to inform you of a change to the Job Share Standards Captain
guidelines. Based on the recommendations of a team studying the issue, effective July 1, 1999, the Company will alter the manner in which it pays Job Share Standards Captains. The following provision will replace the pay paragraph in the original letter of January 20, 1999, as well as the addendum dated March 19, 1999:
PAY. During a month in which the pilot is assigned to DENTK, the Company will
pay the pilot at the individual's current rate for the greater of 81 hours or the
individual's awarded line value. In addition to this monthly rate, the Company will pay the pilot $100 for each day the individual performs Standards Captain duties at DENTK.
Please advise if the Association has any questions regarding this process change.
Sincerely,
/s/ Steve
Captain Steve Forte.
Captain Development Course
Page 426 Letter 99-10
UNITED AIRLINES
July 28, 1999
Captain Michael H. Glawe, Chairman
UAL-MEC Air Line Pilots Association
6400 Shafer Court, Suite 700
Rosemont, IL 60018-7180
Dear Michael,
As a result of discussions between the ALPA and Company Negotiating Committees, the parties have agreed that the following provisions will apply to the recently developed Captain Development Course (CDC):
1. Attendance - CDC training is mandatory.
2. Compensation - Compensation will be paid in accordance with Section 9 of the Agreement.
3. Expenses - Meals, lodging, and ground transportation will be provided by the
Company during all CDC seminars. Any other expenses incurred by a pilot will be reimbursed on a reasonable and actual basis.
4. Scheduled Classroom Time - In order to enhance the quality of training and to maximize the benefits to the pilot, and notwithstanding the provisions of Section 9-F-2-f of the Agreement, a pilot may be scheduled up to a maximum of eight (8) hours of classroom instruction per day.
5. Notification and Assignment to Training - Notification and assignment to seminar training will be made after pilot schedule preferencing but in no case less than fifteen (15) days prior to the start of the CDC seminar training without pilot concurrence. Pilots eligible for assignment to a CDC seminar may request "holy days" in accordance with Section 9-B-1-b of the Agreement (For the purposes of this provision the phrase "...cause him to lose his qualification" shall mean "...cause him to lose the opportunity to be scheduled within the scheduling windows contained in Paragraph 6 of this Letter").
6. Scheduling Windows - Scheduling windows for CDC seminars will be as follows:
- Flying the Line Seminar is required prior to initial Captain technical training at DENTK. Before 1/1/00 exceptions to this provision will require approval from the Vice President - Flight Standards and Training. After 1/1/00 exceptions will not be permitted. The Company will make every effort to schedule pilots for Flying the Line as soon as practicable after their final bid awards.
Letter 99-10 Page 427
- Command Seminar will be conducted ASAP after "consolidation" as Captain (i.e.100 hours) but not later than the end of the fourth month after completion of initial Captain OE.
- Home Base will be conducted not earlier than the beginning of the fifth month and not later than the end of the eighth month after completion of initial Captain OE.
7. Initial Captain OE - Report time for initial Captains on the first day of the first OE ID will be two (2) hours prior to scheduled trip departure instead of the normal one (1) hour report time. The scheduled duty time for the first day of the published ID to be used for the initial Captain's first OE ID shall be limited to the Section 5-G-1-a-(1) limitations less one (1) hour.
8. Pilot Performance and Conduct - Pilot performance and conduct during attendance at any CDC seminar will not be used as a basis for evaluating or grading the attendee during, or at any time following, the event. Additionally, no information resulting from a pilot's curriculum participation in a CDC seminar may be used in any disciplinary action nor may be used in any way to the detriment of any United pilot.
9. Record Keeping - No records of pilot performance during CDC seminar training will be kept by anyone inside or outside the Company.
10. Modifications to CDC Seminar Training - To retain ALPA support for the program, the Company and ALPA must agree on any subsequent modifications.
11. Additional Phases of CDC Training - Development of any additional phases of CDC training will be with full participation by ALPA representatives and will not be implemented without approval by the United MEC, or its officers .
If the above accurately reflects our understanding, please sign and return three (3) copies for our files.
Sincerely,
/s/ Stephen A. Forte
Captain Stephen A. Forte
Senior Vice President
Flight Operations
Accepted and agreed to this 16th day of August, 1999
/s/ Michael H. Glawe
Captain Michael H. Glawe, Chairman
UAL-MEC Air Line Pilots Association.
Page 428 Letter 99-11
Protection of Strategic Interests in Canada
UNITED AIRLINES
LETTER OF AGREEMENT
Between
UNITED AIR LINES, INC.,
UAL CORPORATION
And
THE AIR LINE PILOTS
in the Service of
UNITED AIR LINES, INC.
as Represented by
THE AIR LINE PILOTS ASSOCIATION,
INTERNATIONAL
THIS LETTER OF AGREEMENT is entered in accordance with the Railway Labor Act by and between UNITED AIR LINES, INC., UAL CORPORATION (together ''United'' or the "Company'') and the AIR LINE PILOTS in the service of UNITED AIR LINES, INC. as represented by the AIR LINE PILOTS ASSOCIATION, INTERNATIONAL ("ALPA" or the "Association").
WITNESSETH:
WHEREAS the Company is a member of an international alliance, the Star
Alliance, which includes significant Canadian code-share relationships that provide important marketing benefits to the Company, and
WHEREAS the Company has advised the Association that its strategic interests in these Canadian code sharing alliance relationships have been threatened by international financial developments, and
WHEREAS the Company has advised the Association that in response to these developments it is considering a proposed transaction (the "Transaction") in which a limited partnership formed pursuant to a partnership agreement (the ''Partnership Agreement'') between the Company and Deutsche Lufthansa AG, a corporation organized under the laws of Germany ("L") with L as a general partner (the "Joint Venture"), would purchase preferred stock of Air Canada, Inc. ("C"), that is convertible into nonvoting common stock of C (the "Preferred Stock''), and.
Letter 99-11 Page 429
WHEREAS, the Partnership Agreement provides that the purposes of the Joint Venture are to acquire, hold, convert and exchange the Preferred Stock and securities issuable upon conversion thereof and to engage in certain activities related thereto;
WHEREAS, the Company has further advised the Association that (1) according to the terms of the Partnership Agreement, the Company would have a 40 percent interest in the Joint Venture, which itself would conduct no flight operations of any sort whatsoever; (2) as it relates to the issue of whether the Joint Venture is an ''Affiliate'', in the Partnership Agreement the Company would expressly disavow the right or power to conduct those activities that are set forth in the pilot collective bargaining agreement (the ''Agreement'') as constituting ''Control''; (3) as part of the Transaction, the Company would also acquire interests as a lessor or equity holder in an aircraft sale-leaseback and as the provider of a guarantee of certain indebtedness of C; however, the sale/leaseback lease will contain a provision which prohibits C from using such aircraft to provide or receive passenger feed from the Company pursuant to an agreement or an arrangement with the Company or an Affiliate other than an
industry standard interline agreement; and (4) the Transaction may provide that each investor in the Joint Venture will have the right at any time after December 31, 2001 to require the Joint Venture to (i) make a distribution to such investor of Preferred Stock or (ii) sell Preferred Stock on behalf of such investor and to distribute the proceeds from such sale to such investor, subject to certain limitations, but in such event the Company will agree in such Transaction to exercise the right under clause (i), above, only with the consent of the Association or if such exercise is no longer prohibited by the Agreement, and
WHEREAS, while the Association believes that the potential Transaction could violate Section 1-B and related sections of the Agreement, the Company has advised the Association that it believes that the proposed Transaction would not violate the Agreement and is not seeking the Association's approval, and
WHEREAS the Association has determined, in light of the strategic importance of the Canadian aviation relationship, that it does not wish to object at this time to the Transaction as it presently understands the Company's plans, and
WHEREAS the Company has advised the Association that it is developing plans for additional Company flying to the Canadian market and will brief the Association on such plans no later than the regularly scheduled January 2000 UAL-MEC meeting, and
WHEREAS, the Company acknowledges the Association's desire to reserve its rights under the Agreement while the Company proceeds with the potential
transaction,
Page 430 Letter 99-11
NOW, THEREFORE, the Company and the Association hereby agree as follows:
1. Reservation of Rights. The Association hereby advises the Company that it does not intend to object to the proposed Transaction at this time based on its present understanding of the Transaction. Nonetheless, the Association reserves the right to object to the Transaction in the future under Section 1-B or any other relevant provision of the Agreement. Nothing in this letter shall constitute or be construed as an endorsement or approval of the Transaction by the Association.
2. Tolling Agreement and Time Limits. A grievance under Section 1-J of the
Agreement objecting to the Transaction will be considered timely if filed by the
Association within one year following the date of the initial public announcement of the Transaction (the "Public Announcement''). Commencing six months following the Public Announcement, if the Association becomes aware of material facts regarding the Transaction (i) that were not previously known by it and (ii) of which it could not reasonably have had knowledge, a grievance under Section 1-J of the Agreement objecting to the Transaction based on these material facts will be timely if filed by the Association within the contractual time limits established in Section 17 of the Agreement.
3. Non-prejudice. Except as limited by Paragraph 2, above, neither this Letter of Agreement, nor any decision by the Association not to object to the Transaction, will act in any way to prejudice the right of the Association to object to the Transaction or to any other future action by the Company with respect to investment in aviation. The Association agrees that neither this Letter of Agreement nor the Company's decision to pursue the Transaction as described, to pursue it in another form, or to withdraw from pursuing it, will act in any way to prejudice the Company's rights with respect to this or other such transactions.
4. Duration. This Letter of Agreement will take effect upon its execution by the parties and will remain in effect concurrent with the Agreement.
Letter 99-11 Page 431
IN WITNESS WHEREOF, the parties have signed this Letter of Agreement this 22nd day October, 1999.
FOR UNITED AIR LINES, INC.
/s/ William P. Hobgood
William P. Hobgood
Senior Vice President, People
FOR UAL CORPORATION
/s/ William P. Hobgood
William P. Hobgood
Senior Vice President
FOR THE AIR LINE PILOTS
ASSOCIATION, INTERNATIONAL
/s/ Duane E. Woerth
Duane E. Woerth, President
Air Line Pilots Association, International
/s/ Michael H. Glawe
Michael H. Glawe, Chairman
UAL-ALPA Master Executive Council.
Page 432 Letter 99-12
PWM Downtown Hotel
UNITED AIRLINES
October 21, 1999
Captain Michael H. Glawe, Chairman
UAI,-MEC Air Line Pilots Association
6400 Shafer Court, Suite 700
Rosemont, IL 60018-7180
Re: ALPA Case No.: 98-U-MEC-38R/99-4
Dear Mike:
As it is the parties intent to address the lack of a downtown layover hotel in Portland, Maine, the above captioned grievance is settled on the following terms which will be effective upon signing.
1. At Company expense, pilots on layovers in Portland, Maine, may secure a taxicab ride to downtown Portland and back to the layover hotel. One such cab ride is approved per pilot per calendar day of the layover.
2. The Company will contract with an approved Cab company to provide the above transportation on a voucher system. Vouchers for crew members will be available from the taxi driver.
3. This agreement will remain in effect until a suitable Portland downtown layover
hotel is secured. Acceptance of this agreement does not prejudice the Association's position with respect to downtown layover hotels. The parties will continue effort to secure a downtown hotel in Portland, Maine.
4. This agreement arises from the unique circumstances identified in the grievance. This agreement is non-precedental and will not be cited by either party other than to enforce the terms herein. If this accurately reflects our understanding, please sign and return original for our files.
Sincerely,
/s/ Ed Del Genio
Ed Del Genio
Director People Services.
Flight Operations
Letter 99-12 Page 433
Accepted and agreed to this 15th day of November, 1999.
/s/ Michael H. Glawe
Michael H. Glawe, Chairman
UAL-MEC Air Line Pilots Association.
Page 434 Letter 99-13
Crew Meal Expense Clarification
Captain Michael Glawe, Chairman
UAL-MEC Air Line Pilot's Association
6400 Shafer Court, Suite 700
Rosemont, IL 60018
Dear Captain Glawe:
The parties agree to modify the November 10, 1999 letter regarding the treatment of meal expenses incurred by pilots in line operations as follows:
1. If an on board crew meal is unavailable, reimbursement of reasonable actual
expenses associated with obtaining a meal will be paid to the pilot upon submission of a company expense form and receipt.
2. If the unavailable crew meal was ALPA requested, the reimbursement will be offset by the meal cost specified in Section 4-A-2 of the Agreement, which will be charged to the pilot. If the pilot obtains no meal, or requests no reimbursement, the meal cost specified in Section 4-A-2 will not be charged to the pilot.
3. A meal is "unavailable" if it is not on board the aircraft, incomplete, or spoiled.
4. "Unavailable" does not include meals that meet the SPCMEL request but are
deemed not appetizing or tasty.
5. If this Letter of Understanding accurately reflects our agreement, please sign and return two (2) copies for our files.
Sincerely,
/s/ Stephen A. Forte
Captain Stephen A. Forte
Senior Vice President
Flight Operations
Accepted and agreed to this 10th day of December, 1999.
/s/ Michael H. Glawe
Captain Michael Glawe, Chairman
.Letter 99-13 Page 435
UA/ALPA Master Executive Council.
Page 436 Letter 99-14
P.I. Compensation and Days Off
United Airlines
Captain Michael H. Glawe
UAL-MEC System Schedule Committee
6400 Shafer Court, Suite 700
Rosemont, IL 60018-7180
Dear Mike,
As a result of discussions between the ALPA and Company Negotiating Committees, the parties have agreed to make the following adjustments to the Pilot Instructor Letter of Agreement (89-2):
1. Modify Paragraph 5 of Letter of Agreement 89-2 to read as follows:
"The rate of pay for a pilot who is permanently assigned as a Pilot Instructor shall be not less than the 81 hour salary for the line assignment which he holds plus 15%. However, the monthly Pilot Instructor rate of pay shall not exceed the 85 hour salary for a B747-400 First Officer at the sixth year longevity plus 7%."
2. Modify Paragraph 6 of Letter 89-2 to read as follows: "Pilot Instructor schedules shall have a minimum of twelve (12) calendar days free of duty per month. For trainee/instructor continuity, Pilot Instructors shall be allowed, at
their option, to trade their days off. Additionally, Pilot Instructor's may volunteer to
work up to two (2) additional days per month. The Pilot Instructor will make his
willingness to volunteer known prior to the closing date for instructor "days off"
requests. Pilot Instructors will be selected in seniority order within each fleet to work additional days. The pay for the additional days of work will be over and above all other monthly compensation (not limited to the monthly cap) and will be calculated by dividing the Pilot Instructor's monthly salary by eighteen (18) to determine the daily value."
3. The modifications of Letter of Agreement 89-2 in paragraphs 1 and 2 above shall take effect on November 1, 1999, and shall remain in effect for a period of twelve (12) months. During this twelve month period, a committee of management and ALPA representatives will jointly develop a comprehensive proposal setting forth a plan for the permanent restructuring of the instructor workforce at DENTK with a time line for implementation. If the parties are successful in developing a restructuring plan, the twelve (12) month period referenced above may be extended for up to an additional six (6) months to complete the transition of instructors at DENTK.
Letter 99-14 Page 437
If this accurately reflects our understanding, please sign and return two copies for our files.
Sincerely,
/s/ Ed Del Genio
Ed Del Genio
Director-Labor Relations
Flight Employees
ACCEPTED and AGREED to this 29th day of December, 1999.
/s/ Michael H. Glawe
Michael H. Glawe, Chairman
UAL-MEC Air Line Pilots Association.
Page 438 Letter -1
Natural Disaster Absence Policy
UNITED AIRLINES
January 7, 2000
Captain F.C. Dubinsky
UAL MEC Chairman
AIR LINE PILOTS ASSOCIATION
6400 Shafer Court, Suite 700
Rosemont, IL 60018
Dear Rick,
The following policy will apply to pilots who are unable to report to work due to a
"natural disaster", i.e., weather or other event as determined by the Chief Pilot or
Flight Manager.
- Pilots will be placed on a "without pay" (ANP) status for the pairing(s) missed, according to the normal UAL "no work, no pay" policy.
- Pilots holding a line and placed on "without pay" status may make up lost
credit time through the trip trade system or requesting to be placed on the 20-H-3 list for assignment to open time.
- For reserve pilots, Chief Pilots or Flight Managers may, with the concurrence of the pilot, move remaining RDO's to cover the absence.
- If there is insufficient time remaining in the month to make up lost credit time or if the pilot so chooses, the pilot may request that his/her Chief Pilot or Flight Manager restore pay up to the original value of the pilot's line from any unassigned future or current vacation due to the pilot, without splitting any covered pairings. Note that using future or current vacation to cover the missed pairing(s) may result in reducing the number of "splits" available to the pilot in that vacation year. In the event the "natural disaster" prevents a significant number of United employees from reporting to work, the COO will determine whether that time will be treated as paid time off.
Best regards,
/s/ Rick Maloney
Captain Rick Maloney
Senior Vice President
Flight Operations.
Letter 00-2 Page 439
Pay for ORD DC-10 Freighter/HazMat Training
United Airlines
Captain F.C. Dubinsky, Chairman
UAL-MEC
6400 Shafer Court, Suite 700
Rosemont, Illinois 60018
Dear Captain Dubinsky,
This is to confirm that due to unique circumstances the parties have agreed that the Company will provide (1) training credit day to all ORD baed DC10 Captains and First Officers who attend the combined DC10 Freighter and Hazardous Material training. The training is specific to ORD DC10 pilots who had not received it in transition training but completed the training between November 1, 1999 and February 29, 2000. Pilots who receive this training after those dates will be compensated as follows:
- lineholders will be assigned on a day off and will receive (1) training credit day as compensation;
- reserves will be assigned on a reserve day of availability and his allowable monthly flight time will be reduced by four hours and twenty minutes (4:20) for the day missed as shown in his assigned reserve line. This compensation will be provided for this specific training even though the requirement of a four-hour training program referenced in Letter of Agreement 91-37 is not fulfilled. The parties agree that the provisions of this letter are non-precedent setting and will not be cited by either party.
If this accurately reflects our understanding, please sign and return two (2) copies for our files.
Sincerely,
/s/ Stephen A. Forte
Captain Stephen A. Forte
Senior Vice President
Flight Operations
Accepted and agreed to this 9th day of March, 2000.
Page 440 Letter 00-2
/s/ F.C. Dubinsky
Captain F.C. Dubinsky, Chairman
UAL-MEC Air Line Pilots Association.
Letter 00-3 Page 441
Re-award of 2000, 2001 Annual Vacation
UNITED AIRLINES
Captain F.C. Dubinsky, Chairman
UAL Master Executive Council
Air Line Pilots Association
6400 Shafer Court, Suite 700
Rosemont IL. 60018
Dear Rick,
During discussions between ALPA and the Company, the parties have agreed that the following is full and final resolution to the 2000-2001 annual vacation award issue:
The company will re-award the 2000-2001 Annual vacations for pilots domiciled in Anchorage. Those affected Anchorage pilots will be given the option of retaining their original award or accepting the new award. For all other domiciles, the award of the minimum vacation allocation for the 2000 - 2001 annual vacation process will be examined to determine the number of vacation days that were bid but unassigned. In the months where the 2000 - 2001 annual vacation days were bid but unassigned, the company will allocate a minimum of those bid but unassigned annual vacation days in the respective 60-day monthly vacation
process.
The minimum monthly allocation will be awarded in each status for all future annual vacation preferencing.
If this accurately reflects our understanding, please sign and return two copies for our files.
Sincerely,
/s/ Stephen A. Forte
Captain Stephen A. Forte
Senior Vice President
Flight Operations
Accepted and agreed to this 27 day of March, 2000.
/s/ F.C. Dubinsky
Captain F.C. Dubinsky, Chairman
UAL-MEC Air Line Pilots Association.
Page 442 Letter 00-4
Pre and Post Snap-Back
UNITED AIRLINES
LETTER OF AGREEMENT
Between
UNITED AIR LINES, INC.
And
THE AIR LINE PILOTS
In the service of
UNITED AIR LINES, INC.
As represented by
THE AIR LINE PILOTS ASSOCIATION, INTERNATIONAL
THIS LETTER OF AGREEMENT is made and entered into in accordance with the provisions of Title II of the Railway Labor Act, as amended, by and between UNITED AIR LINES, INC. (hereinafter referred to as the "Company") and the AIR LINE PILOTS ASSOCIATION, INTERNATIONAL (hereinafter referred to as "ALPA" or "the Association").
W I T N E S S E T H:
It is mutually agreed that the 1994 AGREEMENT between UNITED AIR LINES,
INC. and THE AIR LINE PILOTS ASSOCIATION, INTERNATIONAL is amended as follows:
A. Pay for April 2000 flying (paid in May 2000) will be paid at a rate that reflects
63.333% of the post-ESOP pay increase. This is an 11/30 reduction in the post-ESOP increase for the month of April 2000.
B. After the May 2000 paychecks have been processed, ISD will, to the extent the information is available in the Payroll system, begin to calculate the differential pay for Pilots who should receive additional pay for post-ESOP actual flying, as follows:
B-1- Lineholders shall be entitled to be paid at ESOP rates for the amount of actual flying performed on or prior to April 11, 2000, and at post-ESOP rates for the flying thereafter, unless the amount provided in "A", above, provides a higher amount.
B-2- Reserves shall be entitled to be paid for their ESOP activity either (1) for four hours and twenty minutes at ESOP rates for each reserve available day performed
Letter 00-4 Page 443
on or prior to April 11, 2000; or (2) if greater, for actual hours flown on or prior to April 11,2000. Reserves will be paid at post-ESOP rates for the remainder of April (not to exceed 78 hours of pay, unless the reserve is entitled to additional pay due to having exceeded 78 flight hours or due to normal application of the deadhead credit rule.) Reserves will be entitled to be paid according to this computation unless the amount provided in "A", above, provides a higher amount.
B-3- This pay verification process will begin not more than 30 days after the
second paycheck is issued in May 2000. In the event the Company is unable to accurately recreate ESOP earnings from Payroll data or if any pilot disagrees with the Company's calculation of his ESOP pay for any reason, the pilot may submit his CMS record for April 2000 and the Company will, if necessary, recalculate his pay and make any corrections.
C. ESOP Earnings from May 1 and May 16, 2000 paychecks will be based upon
38.405% of the gross pay for the month. This is 12/30 of the month.
D. The increase in the PDAP contribution from 1% to 9% will be handled as follows:
D-1- 11 days of April 2000 are at 1% and 19 days of April 2000 are at 9%, which results in the average percentage for the month being 6.202%. This percentage will be used for line pilots on both the May 1 and May 16, 2000 paychecks and will be subject to the same adjustment, if any under "B" above.
D-2- For the Pilot Instructors for the first half of the month of April 2000 the first 11 days are at 1% and the next 4 days of the month are at 9%, which results in the average percentage for the Friday, April 14, 2000 paycheck being 3.250%.
E. Pilot pension ("A Plan") earnings for April 2000 flying will be based upon the book rates of pay.
F. The Pilot Bank will not be paid out. Pilot Bank payouts after May 2000 will receive the 9% PDAP payment.
IN WITNESS WHEREOF, the parties have signed this Agreement this 14th day of April, 2000.
FOR UNITED AIR LINES, INC.
/s/ William P. Hobgood
William P. Hobgood
Senior Vice President
People
FOR THE AIR LINE PILOTS IN THE.
Page 444 Letter 00-4
SERVICE OF UNITED AIR LINES, INC.
/s/ Duane E. Woerth
Duane E. Woerth, President
Air Line Pilots Association
International
/s/ F.C. Dubinsky
Frederick C. Dubinsky,
Chairman United Airlines
Pilots Master Executive Council.
Letter 00-5 Page 445
Separate Vacation Bidding for HNL B747-400
United Airlines
January 21, 2000
Captain F.C. Dubinsky, Chairman
UAL-MEC
6400 Shafer Court, Suite 700
Rosemont, Illinois 60018
Dear Rick,
As a result of discussions between representatives of the ALPA and Company, the parties have agreed to the following:
Due to circumstances unique to the opening of a B-747-400 domicile in HNL, the
company will conduct a separate vacation bid process for all B-747-200 pilots on the HNL domicile roster as of May 1, 2000. This exception to the vacation bidding process relative to a new domicile opening is non-precedent setting and will not be cited by either party.
If this accurately reflects our understanding, please sign and return two (2) copies for our files.
Sincerely,
/s/ Stephen A. Forte
Captain Stephen A. Forte
Senior Vice President
Flight Operations
Accepted and agreed to this 18 day of April, 2000.
/s/ F.C. Dubinsky
Captain F.C. Dubinsky, Chairman
UAL-MEC Air Line Pilots Association.
Page 446 Letter 00-6
Professional Standards Letter
UNITED AIRLINES
Captain Frederick C. Dubinsky
UAL-MEC
Air Line Pilots Association
6400 Shafer Court, Suite 700
Rosemont, IL 60018
Dear Rick,
1. The Association through its Professional Standards Committee has undertaken training of its designated representatives, and is committed to ensuring that all designated Professional Standards representatives are trained to competently assist any pilot who asks for help in resolving workplace-related problems with other pilots based on gender and/or minority issues. As with all issues undertaken by Professional Standards, voluntary participation of the affected pilots will be essential to that process. Since the key to their success is rooted in the fact that Professional Standards' efforts are confidential, any pilot who becomes aware of a gender or minority complaint as a result of his or her official role in Professional Standards activities will not be required to report that event to the Company. The goal of Professional Standards in handling these complaints will be to achieve behavior and attitude changes that will eliminate recurrence of the reported problems. No changes will be made to the present Professional Standards operating rules in order to accommodate this new activity.
2. When the Company receives a complaint, Flight Operations managers will have the option of initiating an investigation as specified in the Company's harassment/discrimination policy or of offering the pilot who makes a report the option of first attempting to achieve resolution by taking the matter to ALPA Professional Standards. When offered, the decision to use or not use Professional Standards will be made entirely by the complaining pilot. In no case will the manager make a recommendation to the pilot about which option to choose; however the manager will be free to answer all questions and to explain both processes, to the best of his or her understanding. If the complaining pilot chooses to use Professional Standards, the responding pilot's concurrence will be required before the matter is referred to Professional Standards for resolution. If the complaining pilot chooses not to use Professional Standards, the Company will immediately take action as specified in its harassment/discrimination policy. If a pilot chooses to use Professional Standards, he/she nonetheless may, at any time, report to the Company that he/she is not satisfied with the Professional.
Letter 00-6 Page 447
Standards progress and the Company will immediately initiate an investigation. In the event the pilots decide to use Professional Standards, the referral by the Company will be subject to all of the provisions of Letter of Agreement 87-1. If the Company receives notice that Professional Standards is unable to reach a solution satisfactory to the complaining pilot, the Company will be responsible for taking any and all steps specified in its harassment and discrimination policy in an effort to resolve the problem.
3. If, after reporting to the Company a complaint based on gender or minority issues, a pilot then chooses to use Professional Standards, he/she will be required to sign a document saying that he/she received and read this Letter of Agreement, which contains information relevant to his/her decision.
4. This agreement shall not be construed to limit, expand or otherwise modify the previous existing statutory responsibilities of either party. The activities that the Association will engage in under the provisions of this Letter are activities that it will conduct on its own behalf and at its discretion, with neither influence nor control by the Company. In no respect will the Association function or serve as an agent of the Company in the handling of these matters.
5. The Agreement may be terminated by either party with 30 days advance notice.
Sincerely,
/s/ Stephen A. Forte
Captain Stephen A. Forte
Senior Vice President
Flight Operations
Accepted and agreed to this 15th day of May, 2000
/s/ F.C. Dubinsky
Captain Frederick C. Dubinsky, Chairman
UAL-MEC Air Line Pilots Association.
Page 448 Letter 00-7
3 Month Reduction of Freezes
UNITED AIRLINES
Captain F.C. Dubinsky, Chairman
UAL-MEC Air Line Pilots Association
6400 Shafer Court, Suite 700
Rosemont, IL 60018
Dear Rick,
The parties have discussed and agreed to the following one-time exception regarding bid restriction periods:
- All bid restriction dates on file as of May 2000 will be permanently reduced by a maximum of 3 months. If current bid restriction period remaining is less than 3 months the bid restriction period will be reduced to zero.
- The pilot bid restriction dates shown on Unimatic page PSN2 will be updated
in June 2000 prior to the awarding of vacancy bids with an effective date of
December 2000.
- Awards resulting from this and future vacancies will carry the normal
contractual bid restriction periods as specified in the Agreement.
If this accurately reflects our understanding, please sign and return 2 copies for our files.
Sincerely,
/s/ Stephen A. Forte
Captain Stephen A. Forte
Senior Vice President
Flight Operations
Accepted and agreed to this 31st Day of May, 2000
/s/ F.C. Dubinsky
Captain F. C. Dubinsky, Chairman
UAL-MEC Air Line Pilots Association.
Letter 00-8 Page 449
Human Factors LAHSO Simulator Study
UNITED AIRLINES
June 12, 2000
Captain Frederick C. Dubinsky, Chairman
UAL-MEC Air Line Pilots Association
6400 Shafer Court - Suite 700
Rosemont, IL 60018
Re: Memorandum of Understanding - Human Factors Land and Hold Short Operations Simulator Study (LAHSO Study)
Dear Rick,
Pursuant to our June 7 and 8, 2000 discussions, regarding the above-referenced
LAHSO study, the terms and conditions under which pilots will participate in the
program are as follows:
- The LAHSO Study will be conducted for the sole purpose of data collection.
Therefore, no records, documents or notes produced during or as a result of the LAHSO Study will be placed in any pilot's personnel training record. Any
records, documents or notes produced during or as a result of the LAHSO Study will be de-identified. Moreover, no participating pilot (line holders and/or
reserve) will be subject to any instruction, checking, discipline, discharge or
enforcement action by the company during or as a result of their participation in the LAHSO Study.
- It is agreed that the pilot briefing statement contained on page 19 of the FAA
Test Plan, dated June 6, 2000, will suffice as a statement from the FAA that no participating pilot (line holders and/or reserve) will be subject to any instruction, checking, discipline, enforcement action or certificate action by the FAA.
- Participating line pilots will be paid and credited for the full value of any
missed trips.
- Available lineholders can be used and if a lineholder volunteers on a day off,
he will receive a vacation day for each day of participation.
- Participating reserve pilots will receive a reserve day of pay, presently four (4) hours and ten (10) minutes.
Page 450 Letter 00-8
- All participating pilots will be compensated for any and all expenses, lodging
and transportation as provided for in Section 4 of the Collective Bargaining
Agreement.
- Any and all pertinent company personnel must be appraised of and comply
with the provisions of this Memorandum.
- Duty day limits will be in accordance with Section 9 of the pilot agreement.
If this Memorandum accurately and adequately reflects our discussions and
agreement then please sign and return two copies to me for our files.
Sincerely,
/s/ Stephen A. Forte
Captain Stephen A. Forte
Senior Vice President
Flight Operations
Accepted and agreed to this 14th day of June, 2000
/s/ F.C. Dubinsky
Captain Frederick C. Dubinsky
Chairman - UALMEC.
Letter 00-9 Page 451
Contribution Account Lump Sum
UNITED AIRLINES
June 15, 2000
Captain Frederick C. Dubinsky, Chairman
UAL-MEC Air Line Pilots Association
6400 Shafer Court, Suite 700
Rosemont, IL 60018
Dear Rick,
As a result of discussions between ALPA and Company Negotiations Committees, the parties have agreed to amend the Pilot's Fixed Benefit Retirement Income Plan ("plan") as follows:
Effective as soon as practicable, but no earlier than August 1, 2000, a pilot will be
permitted to withdraw his or her Contribution Account Lump Sum Amount on or before his or her Annuity Start Date.
If this accurately reflects our understanding, please sign and return two (2) copies for our files.
Sincerely,
Stephen A. Forte
Senior Vice President
Flight Operations
Accepted and agreed to this 13th day of July, 2000
F.C. Dubinsky
Captain F.C. Dubinsky, Chairman
UAL-MEC Air Line Pilots Association.
Page 452 Letter 00-10
Recapitalizat ion Agreement
Air Line Pilots Association, International
October 11, 2000.
James Godwin, CEO
UAL Corporation
1200 East Algonquin Road
Elk Grove Village, IL 60007
DearMr. Goodwin:
By this letter, the Air Line Pilots Association, International ("ALPA") waives further compliance by UAL Corporation ("UAL") with the provisions of Section 5.8(b) and Schedule 5.8(iii) of that certain Recapitalization Agreement dated as of March 25, 1994, as amended, among ALPA, UAL and the International Association of Machinists and Aerospace Workers (the "Recapitalization Agreement"). As a result, United Airlines, Inc. ("United") and UAL shall have no further obligations to ALPA regarding compensation, benefits and work rules for salaried and Management Employees (as defined in Section 5.8(b) of the Recapitalization Agreement) of United or UAL hired on or after February 1, 1994. ALPA further agrees, if requested by UAL, to enter into an amendment to the Recapitalization Agreement to the effect of the foregoing.
This letter shall take effect upon the execution following ratification of the 2000
collective bargaining agreement between ALPA and United.
Sincerely,
/s/ Duane E. Woerth
Duane E. Woerth
President
Air Line Pilots Association, International
/s/ F.C. Dubinsky
F.C. Dubinsky
Chairman
UA/ALPA Master Executive Council.
Letter 00-11 Page 453
International Medical Study
UNITED AIRLINES
Captain F. C. Dubinsky, Chairman
UAL-MEC
Air Line Pilots Association
6400 Shafer Court, Suite 700
Rosemont, IL 60018
Dear Captain Dubinsky:
This is to confirm that during the negotiations which led up to the 2000 Agreement, the Company and the Association agreed to establish a team of doctors composed of a representative of United, ALPA, and a third independent doctor highly qualified in the field of crew rest and fatigue. This team shall be tasked to review and evaluate United's international scheduling practices and to develop recommendations of scheduling principles which recognize and address crew rest and fatigue.
The parties are committed, upon receipt of the final recommendations of the team of doctors, to meet forthwith to negotiate any and all changes in scheduling practices which, in light of the doctors' recommendations and other relevant factors, the parties agree are appropriate.
If this accurately reflects our understanding, please sign and return two (2) copies for our files.
Sincerely,
/s/ William P. Hobgood
William P. Hobgood
Senior Vice President
People
Accepted and agreed to this 26th day of October, 2000
/s/ F.C. Dubinsky
Captain F. C. Dubinsky, Chairman
UAL-MEC Air Line Pilots Association.
Page 454 Letter 00-12
PBS Study
UNITED AIRLINES
Captain F. C. Dubinsky, Chairman
UAL-MEC Air Line Pilots Association
6400 Shafer Court, Suite 700
Rosemont, IL 60018
Dear Captain Dubinsky:
This is to confirm that during the negotiations which led to the 2000 Agreement, the Company and the Association agreed to establish a joint task team, including such expert assistants as required, to develop, evaluate, test and make recommendations for a Mainline Preferential Bid System of potential usefulness and applicability to United pilots.
The parties are committed, upon receipt of the final recommendations of the joint task team, to meet forthwith to negotiate any and all changes in bidding, scheduling, or other practices which, in light of the task team recommendations and other relevant factors, the parties agree are appropriate.
If this accurately reflects our understanding, please sign and return two (2) copies for our files.
Sincerely,
/s/ William P. Hobgood
William P. Hobgood
Senior Vice President
People
Accepted and agreed to this 26th day of October, 2000
/s/ F.C. Dubinsky
Captain F. C. Dubinsky, Chairman
UAL-MEC Air Line Pilots Association.
Letter 00-13 Page 455
New Equipment formula
UNITED AIRLINES
Captain F.C. Dubinsky, Chairman
UAL-MEC Air Line Pilots Association
6400 Shafer Court, Suite 700
Rosemont, IL 60018
Dear Captain Dubinsky:
During the negotiations which led to the 2000 Agreement, the parties agreed to the following provisions pertaining to the introduction of new equipment:
1. The provisions of the Agreement apply only to the aircraft types and aircraft series which are currently operated by United or on order by United, which include:
B-747-400 B-757-200
B-747-200 A-320
B-777-200 A-319
DC-10 B-727-200
DC-10F B-737-500
B-767-300 B-737-300
B-767-200 B-737-200.
2. In the event United intends to operate any equipment type or series with a speed of .95M or below, and with a UAL certificated maximum takeoff weight (MTW) of less than one million pounds which is not included above, the Association and the Company will begin negotiating rates of pay and working conditions for such new equipment as soon as orders have been placed and delivery dates have been established, or earlier by mutual agreement.
Page 456 Letter 00-13
3. During these new equipment negotiations, United will be free to bid vacancies, train pilots and prepare, in accordance with the terms of the Agreement, for orderly introduction of the new equipment into service. If the parties are not successful in reaching an agreement by the date United plans to introduce the new equipment, the new equipment will be flown in revenue service under Section 5 of the Agreement or under Section 3 of the International Supplement, whichever is applicable.
4. Until final agreement is reached, pilots will fly the new equipment under the
following interim hourly rates. The new equipment pay rates will be established as follows:
4-a- If the maximum takeoff weight (MTW) of the new equipment is less than
590,000 pounds, the hourly rate for captains and first officers will be:
(P1 - P0) (MTW-117) / 473 + P0. Where MTW is the maximum takeoff weight (MTW) of the new equipment, P0 is the B-737-200 hourly rate corresponding to the pilot's position and year of longevity, and P1 is the B-777 hourly rate for the pilot's position and year of longevity; provided, however, no pilot who flies a B-737 aircraft not listed above will maintain an hourly rate less than the hourly rate established by the Agreement for B-737-200 aircraft.
4-b- If the MTW of the new equipment is 590,000 pounds or greater, the hourly rate for captains and first officers will be: (P2 - P1) (MTW-590) / 285 + P1. Where MTW is the maximum takeoff weight (MTW) of the new equipment, P1 is the B-777 hourly rate for the pilot's position and year of longevity, and P2 is the B-747-400 hourly rate for the pilot's position and year of longevity.
4-c- If the new equipment requires a minimum crew of 3 pilots, the hourly new equipment rate for any second officer on that equipment will be equal to the following: 1st year equals 1st year first officer rate for that equipment.
Thereafter the second officer rate will be equal to a percentage of the rate for
captains on that equipment according to the following:
2nd year = 32.0 percent of 2nd year captain rate
3rd year = 42.1 percent of 3rd year captain rate
4th year = 52.1 percent of 4th year captain rate
5th year = 53.1 percent of 5th year captain rate
6th year = 54.0 percent of 6th year captain rate
7th year = 54.6 percent of 7th year captain rate
8th year = 54.7 percent of 8th year captain rate
9th year = 54.8 percent of 9th year captain rate
10th year = 54.8 percent of 10th year captain rate
11th year = 54.8 percent of 11th year captain rate
12th year = 54.8 percent of 12th year captain rate.
Letter 00-13 Page 457
5. In the event, any Company aircraft listed above is re-certified resulting in an
increased MTW of 10,000 pounds or more, the appropriate new equipment formula above will be applied to establish new hourly rates for that aircraft. The new rates will become effective the first of the month following the re-certification of the MTW.
If this accurately reflects our understanding, please sign and return two (2) copies for our files.
Sincerely,
/s/ William P. Hobgood
William P. Hobgood
Senior Vice President
People
Accepted and agreed to this 26th day of October, 2000
/s/ F.C. Dubinsky
Captain F. C. Dubinsky, Chairman
UAL-MEC Air Line Pilots Association
Page 458 Letter 00-14
Labor Disputes
LETTER OF AGREEMENT
Between
UNITED AIR LINES, INC.
And
THE AIR LINE PILOTS
in the service of
UNITED AIR LINES, INC.
as represented by
THE AIR LINE PILOTS ASSOCIATION, INTERNATIONAL
THIS LETTER OF AGREEMENT is made and entered into in accordance with the provision of the Railway Labor Act, as amended, by and between UNITED AIR LINES, INC. (hereinafter referred to as the "Company") and the AIR LINE PILOTS in the service of UNITED AIR LINES, INC. as represented by the AIR LINE PILOTS ASSOCIATION, INTERNATIONAL (hereinafter referred to as "Association").
W I T N E S S E T H:
The Company and Association agree as follows:
1. During a lawful strike by the pilots on the United Pilots' System Seniority List
("United Pilots"), the Company will not conduct commercial flight operations or train United Pilots or pilots for any air carrier.
2. This Letter of Agreement shall become effective on the date of signing of the 2000 Agreement between the Company and Association and shall continue in full force and effect through the effective date of the first general collective bargaining agreement between the Association and Company that immediately succeeds the 2000 Agreement whether or not the parties have previously served notices of intended change under Section 6 of the Railway Labor Act, as amended. The parties waive any claim that this Letter of Agreement does not remain in full force and effect as provided herein.
IN WITNESS WHEREOF, the parties have signed this Letter of Agreement this 26th day of October, 2000.
Letter 00-14 Page 459
WITNESS:
/s/ Ed Del Genio
/s/ Charles H. Vanderheiden
/s/ Peter R. Davis
/s/ Robert C. Sannwald
/s/ Thomas M. Sullivan
FOR UNITED AIR LINES, INC.
/s/ William P. Hobgood
William P. Hobgood
Senior Vice President- People
WITNESS:
/s/ J. Stephen Smith
/s/ Larry D. Schulte
/s/ Steven L. Senegal
/s/ Hal E. Stepinsky
/s/ Wendy J. Morse
FOR THE AIR LINE PILOTS IN THE SERVICE
OF UNITED AIR LINES, INC.
/s/ Duane E. Woerth
Duane E. Woerth, President
Air Line Pilots Association, International
/s/ F.C. Dubinsky
F.C. Dubinsky, Chairman
UAL-MEC.
Page 460 Letter 00-15
Cabotage
UNITED AIRLINES
Duane Woerth, President
Air Line Pilots Association, International
1625 Massachusetts Avenue, N.W.
Washington, D.C. 20036
Re: Cabotage
Dear Captain Woerth:
I write to confirm the following agreement made between the Air Line Pilots
Association, International ("ALPA") and United Airlines, Inc. ("United") in the
negotiations leading to the 2000 ALPA-United collective bargaining agreement (the "Agreement").
The parties agree that a change in U.S. law to permit foreign air carriers to engage in cabotage would be contrary to the long term commercial interests of the Company and the career security interests of the United pilots. The parties will work together cooperatively to oppose strongly any such change in the law and inform members of Congress, the U.S. Administration, applicable foreign governments and international trade bodies, and other U.S. and foreign air carriers of such opposition. The parties further agree that if there is such a change in the law, despite their efforts, they will meet to develop measures to protect against negative results to the Company and pilots' commercial and career interests.
Very truly yours,
UNITED AIRLINES, INC.
/s/ William P. Hobgood
William P. Hobgood
Senior Vice-President-People
Accepted and Agreed to this 26th day of October, 2000.
/s/ Duane Woerth
Duane Woerth, President
Air Line Pilots Association, International
/s/ Rick Dubinsky
Rick Dubinsky, UAL-MEC
Letter 00-16 Page 461
New Uniform
UNITED AIRLINES
October 26, 2000
Captain F. C. Dubinsky, Chairman
UAL-MEC Air Line Pilots Association
6400 Shafer Court Suite 700
Rosemont, IL. 60018
Dear Rick,
This letter will confirm my commitment to provide a new uniform to all United Airlines pilots. The process of coordinating this change in uniform will begin as soon as the vendor is prepared to deliver the new product (approximately 6 months from the date of this letter). Details of this change will be communicated to our pilots as information becomes available.
Sincerely,
/s/ Stephen A. Forte
Stephen A. Forte
Senior Vice-President
Flight Operations.
Page 462 Letter 00-17
Life Event
UNITED AIRLINES
October 26, 2000
Captain F.C. Dubinsky, Chairman
UAL-MEC Air Line Pilots Association
6400 Shafer Court Suite 700
Rosemont, IL 60018
Dear Rick,
This shall confirm our commitment to address a pilot's infrequent need to be relieved from flight duty in order to attend what we have termed a "life event" when he cannot secure relief using other provisions of the Agreement or Company Policy.
Understanding that we anticipate this procedure to be used for significant personal obligations such as a pilot's own wedding, the wedding of his child, religious right of passage of his child, his child's graduation or other qualitatively similar events, and further understanding that we do not intend it to include his child's ball game, little league pictures, driving his child to camp and other qualitatively similar events, we venture into this agreement knowing ahead of time we will be mutually obliged to exercise reasonable judgement. The foregoing being our best effort to describe our intent, it is agreed that a pilot who
1) gives the company notice of a life event prior to bidding, 2) tries to bid around it, but is unsuccessful and 3) tries to trade around it but is unsuccessful will be relieved of no more than one trip that conflicts with such life event barring the most extraordinary circumstances.
A pilot whose request is honored will make-up the trip during the current month. If the pilot can demonstrate that making-up the trip is not possible during the month, he may take Authorized No Pay (ANP) or use his unassigned current vacation or his next year's vacation to provide pay for the absence.
A pilot whose request is denied due to extraordinary circumstances shall be entitled to reconsideration of his request by his chief pilot within 48 hours of its denial. If the application of this letter should result in any unforeseen situations which could produce a potential disruption in service, the parties agree to immediately seek to reach a mutual resolution of the problem prior to the Company taking any unilateral action.
Sincerely,
/s/ Stephen A. Forte.
Letter 00-17 Page 463
Stephen A. Forte
Senior Vice President
Flight Operations.
Page 464 Letter 00-18
Pension Modifications
LETTER OF AGREEMENT
between
UNITED AIRLINES, INC.
and
THE AIR LINE PILOTS
in the service of
UNITED AIRLINES, INC.
as represented by
THE AIR LINE PILOTS ASSOCIATION,
INTERNATIONAL
THIS LETTER OF AGREEMENT is made and entered into in accordance with the provisions of Title II of the Railway Labor Act, as amended, by and between UNITED AIR LINES, INC. (hereinafter referred to as the "Company") and the AIR LINE PILOTS in the service of UNITED AIR LINES, INC. as represented by the AIR LINE PILOTS ASSOCIATION, INTERNATIONAL (hereinafter referred to as "ALPA" or the "Association")
WITNESSETH:
WHEREAS, the Company and the Association wish to state the Agreement they have reached with respect to the Pilots' Pension Program and the Employee Stock Ownership Plan,
THEREFORE, it is mutually agreed that: The following changes to the Pilots' Pension Program and the Employee Stock Ownership Plan will apply to an employee employed by the Company as a pilot on April 12, 2000, who is either receiving pay as a pilot in active service, or is receiving sick pay as a pilot, or is on medical leave of absence, or is disabled per the Pilots' Disability Income Plan.
A. Pilots' Defined Benefit Pension Plan (the "Fixed Plan")
A-1- The following modifications to the Fixed Plan will take effect on April 12,
2000.
A-2- The multiplier used to determine the accrued benefit will be 1.50%.
Letter 00-18 Page 465
A-3- Earnings in the Fixed Plan will be computed using book rates for work
performed through April 11, 2000, and actual monthly earnings thereafter.
A-4- The benefit adjustment on account of early retirement will be 3% per year for any retirement before age 60. Such benefit adjustment will be prorated for partial years.
A-5- A pilot will be credited with a month of participation for each calendar month the pilot is on a Company approved unpaid maternity, paternity or adoption leave of absence (including such leaves occurring before or after April 12, 2000), provided the pilot returns to work from such leave of absence. Leaves of absence must be granted pursuant to and in accordance with uniform rules applicable to all similarly situated employees of the Company. No earnings will be deemed for such months. In no event will a pilot receive more participation credit than the pilot would have received if the pilot had not been on such leave.
A-6- A pilot will be credited with a month of participation for each calendar month the pilot is on furlough (including all furloughs before or after the effective date of the Agreement). In no event will a pilot receive more participation credit than the pilot would have received if the pilot had not been furloughed.
A-7- If the annuity starting date of a pilot who has terminated employment occurs after his normal retirement date, the pilot's accrued benefit will be actuarially increased from the later of the pilot's normal retirement date or the date the pilot terminated employment to the pilot's annuity starting date.
A-8- The amount of the annual pre-retirement survivor benefit payable to a pilot's Eligible Spouse or Eligible Children will be modified to be equal to 25% of the pilot's Final Average Earnings or, if greater, 50% of the pilot's vested accrued benefit with years of participation projected to the pilot's age 60 or, if later, the pilot's date of death.
B. Pilots' Directed Account Retirement Income Plan (the "PDAP").
B-1- The following modifications to the PDAP will take effect April 12, 2000.
B-2- The Company's contribution to the PDAP will be 11% of actual earnings. Earnings for the month of April, 2000 will be calculated as set out in the Letter of Agreement 00-4 signed April 14, 2000.
B-3- The one year of service eligibility requirement is eliminated and pilots will be eligible for the Company contribution to the PDAP effective on the later of April 12, 2000 or the pilot's date of employment as a pilot with the Company.
C. Employee Stock Ownership Plan (ESOP) and Pilots' Directed Account Plan (PDAP)
C-1- The following modification to the ESOP will take effect January 1, 2000.
Page 466 Letter 00-18
C-2- For purposes of Internal Revenue Code Section 415(c), any pilot after-tax contributions to the PDAP shall be the first adjustment followed by contributions to the ESOP due to flow back, pilot salary deferral contributions to the 401(k) portion of the PDAP, Company contributions to the ESOP, and finally Company contributions to the PDAP.
D. Miscellaneous. The parties are committed to maintain current practices encouraging open access to information and ALPA input on a regular and timely basis with respect to retirement plan issues.
IN WITNESS WHEREOF, the parties have signed this Letter of Agreement this 26th day of October, 2000.
WITNESS:
/s/ Ed Del Genio
/s/ Charles H. Vanderheiden
/s/ Peter R. Davis
/s/ Robert C. Sannwald
/s/ Thomas M. Sullivan
FOR UNITED AIR LINES, INC.
/s/ William P. Hobgood
William P. Hobgood
Senior Vice President- People
WITNESS:
/s/ J. Stephen Smith
/s/ Larry D. Schulte
/s/ Steven L. Senegal
/s/ Hal E. Stepinsky
/s/ Wendy J. Morse
FOR THE AIR LINE PILOTS IN THE SERVICE
OF UNITED AIR LINES, INC.
/s/ Duane E. Woerth
Duane E. Woerth, President
Air Line Pilots Association, International
/s/ F.C. Dubinsky
F.C. Dubinsky, Chairman
UAL-MEC.
Letter 00-19 Page 54
Life, Medical and Dental Insurance Modifications
LETTER OF AGREEMENT
between
UNITED AIRLINES, INC.
and
THE AIR LINE PILOTS
in the service of
UNITED AIRLINES, INC.
as represented by
THE AIR LINE PILOTS ASSOCIATION,
INTERNATIONAL
THIS LETTER OF AGREEMENT is made and entered into in accordance with the provisions of Title II of the Railway Labor Act, as amended, by and between UNITED AIR LINES, INC. (hereinafter referred to as the "Company") and the AIR LINE PILOTS in the service of UNITED AIR LINES, INC. as represented by the AIR LINE PILOTS ASSOCIATION, INTERNATIONAL (hereinafter referred to as "ALPA" or the "Association")
WITNESSETH:
WHEREAS, the Company and the Association wish to state the Agreement they have reached with respect to the Welfare Benefit Plan,
THEREFORE, it is mutually agreed that: The following changes to the Pilots' Welfare Benefit Plan will take effect upon ratification for an employee employed by the Company as a pilot who is either receiving pay as a pilot in active service, or is receiving sick pay as a pilot, or is on medical leave of absence, or is disabled per the Pilots' Disability Income Plan.
Medical and Dental Plan
A. Traditional Medical Option
A-1- The Copayment Limit will be $1,500 per person with a family limit of $3,000.
A-2- Effective 60 days following the Date of Ratification of the 2000 Agreement a wellness program as described in Attachment A to this Letter of Agreement will be a covered expense under the Traditional Medical Option and the expenses will be payable at 80% after the deductible is satisfied..
Page 55 Letter 00-19
A-3- Hearing examinations, hearing aids and batteries for hearing aids will be covered expenses under the Plan and will be reimbursed at 80% after the
deductible has been satisfied up to a maximum payment of $5,000 per person per lifetime.
A-4- An annual cervical cytology screening (which includes a pelvic examination, the collection and preparation of pap smear, and the associated lab and diagnostic services) will be a covered expense under the Plan, reimbursed at 80% up to a maximum payment of $150 per year and the expense will be reimbursed regardless of whether the covered person has met the deductible.
A-5- An annual PSA test for men age 50 and over will be a covered expense
under the Plan, reimbursed at 80%, and the expense will be reimbursed regardless of whether the covered person has met the deductible.
A-6- The copayment for the Mail Order Prescription Drug Program shall be as follows:
A-6-a- $10 per 90 day supply of generic drugs
A-6-b- $20 per 90 day supply of brand name drugs
A-7- A right to reimbursement provision will be added to the Plan as follows:
"The Traditional Medical Option will have a right of reimbursement when the Plan has paid the medical expenses of a Plan participant, and the Participant later receives an award or settlement from a third party who caused the medical expenses. Reimbursement is limited to (a) minus (b) where (a) is the amount specified in the award or settlement for the Participant's medical expenses paid by the Plan, and (b) is the amount determined under (a) multiplied by a fraction. The fraction is equal to the Participant's total attorney's fees, costs and other expenses incurred in obtaining the award or settlement divided by the total award or settlement."
B. Retiree Medical. The service requirement for eligibility for retiree medical shall be 5 years of continuous service. All other eligibility requirements shall remain the same.
C. Traditional Dental Option
C-1- The non-orthodontia annual maximum benefit is $2,000 per person per
calendar year.
C-2- The orthodontia maximum benefit is $2,000 per person per lifetime.
D. Company Paid Life Insurance Benefit
D-1- The amount of Company Paid Life Insurance will be the greatest of the
following:
D-1-a- $80,000,
D-1-b- One times the pilot's actual prior calendar year pay, rounded to the nearest $1,000, or.
Letter 00-19 Page 56
D-1-c- One times the pilot's monthly guarantee in effect on May 1 times 12, rounded to the nearest $1,000. The amount of Company Paid Life Insurance shall be adjusted effective November 1, 2000 based on the greatest of a or b above or the pilot's monthly guarantee in effect on November 1, 2000. Effective each March 1 thereafter, the life insurance benefit shall be based on the greatest of a and b above or the pilot's monthly guarantee in effect on the preceding January 1. The amount of
Company Paid Life Insurance payable with respect to a pilot shall be the
amount determined as of the adjustment date immediately preceding the date of the pilot's death, or if the death occurs on the adjustment date the amount determined as of that adjustment date.
D-2- The amount of Company Paid Life Insurance provided to a grounded pilot who has attained age 60 shall be recalculated based on the appropriate second officer rates of pay then in effect on the date of recalculation and each year thereafter.
D-3- Earnings for Life Insurance will be computed using book rates for work
performed through April 11, 2000, and actual monthly earnings thereafter.
E. Pilot Disability Income Plan (PDI)
E-1- If a pilot is permanently grounded after reaching age 55 but prior to reaching age 60, the pilot's PDI benefit will be adjusted at age 60. The Company will determine the second officer assignment that the pilot could hold based upon the pilot's seniority, and the PDI benefit will be adjusted based upon the appropriate second officer rate of pay. Additionally, if a pilot is permanently grounded after age 60, the PDI benefit will be based on the greater of either the pilot's current rate of pay or any higher second officer rate of pay the pilot received in the preceding five (5) years. The formula presently used to calculate PDI benefits will remain the same. This provision is effective the date of signing of this Agreement, but, it will not apply to any pilot then currently receiving PDI benefits or to any pilot then currently on long-term sick leave leading toward approval for PDI benefits.
E-2- Earnings for PDI will be computed using book rates for work performed
through April 11, 2000, and actual monthly earnings thereafter.
F. Miscellaneous. The parties are committed to maintain current practices encouraging open access to information and ALPA input on a regular and timely basis with respect to Welfare Benefit Plan issues.
IN WITNESS WHEREOF, the parties have signed this Letter of Agreement this 26th day of October, 2000.
Page 57 Letter 00-19
WITNESS:
/s/ Ed Del Genio
/s/ Charles H. Vanderheiden
/s/ Peter R. Davis
/s/ Robert C. Sannwald
/s/ Thomas M. Sullivan
FOR UNITED AIR LINES, INC.
/s/ William P. Hobgood
William P. Hobgood
Senior Vice President- People
WITNESS:
/s/ J. Stephen Smith
/s/ Larry D. Schulte
/s/ Steven L. Senegal
/s/ Hal E. Stepinsky
/s/ Wendy J. Morse
FOR THE AIR LINE PILOTS IN THE SERVICE
OF UNITED AIR LINES, INC.
/s/ Duane E. Woerth
Duane E. Woerth, President
Air Line Pilots Association, International
/s/ F.C. Dubinsky
F.C. Dubinsky, Chairman
UAL-MEC.
Letter 00-19 Page 58
ATTACHMENT A
Preventive Health Care and Immunization Guide for Children Birth - 18 Years
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Schedule of Office Preventive Visits |
- Within first 2 weeks - 2 months - 4 months - Between 6-9 months |
- 15 months - 2 years - Once between 3-4 years |
- 5 years - Once between 7-9 years - 12 years |
- Once between 13 - 18 years |
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Components of Preventive Visits |
- Physical & medical history - Height & weight - Head circumference - Ocular prophylaxis (typic - Hemoglobin blood test - Preventive health counseling and education - Dental health - Subjective assessment of vision and hearing - Developmental screening - injury prevention |
- Physical & medical history - Height & weight - Preventive health Counseling and education - Dental health - Vision screen 3-4 years - Subjective assessment of hearing - Developmental screening - Blood pressure - Injury prevention |
- Physical & medical history - Height & weight - Preventive health counseling and education - Dental health - Vision screen - Hearing screen - Blood pressure - Injury prevention |
- Physical & medical history - Height & weight - Preventive health counseling and education - Dental health - Blood pressure - Injury prevention. |
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Page 59 Letter00-19
ATTACHMENT A
Preventive Health Care and Immunization Guide for Children Birth - 18 Years
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DtaP (Diphtheria, Tetanus,Ac ellular Pertussis) |
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X |
X |
X |
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X |
X |
Adult Td (Tetanus, Diphtheria) |
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OPV (OralPolio Vaccine) |
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X |
X |
6-15 months |
X |
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Hib (Haemophl Usinfluenza b) |
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X |
X |
X |
12-15 months |
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MMR (Measles, Mumps, Rubella) |
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12-15 months |
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Booster Between 11th - 12th year |
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Varicella (Chicken Pox) |
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12-18 months |
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Booster Between 11th - 12th year |
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HV (Hepatitis B) |
X |
2-4 months |
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6-18 months |
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X |
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Letter 00-19 Page 60
Preventive Health Care Guide for Adults
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Adult Physical Examination |
Every 5 years |
Every 5 years |
Every 2 years |
Every 2 years |
1 per calendar year |
1 per calendar year |
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Blood Pressure Check |
Every 2 years |
Every 2 years |
1 per calendar year |
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Blood cholesterol (Total and HDL) |
Every 5 years |
Every 2years |
1 per calendar year |
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Hemoccult |
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Every year beginning at age 50 |
Every year |
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Flexible siClientoidoscopy or colonoscopy |
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Every year beginning at age 50 |
Every 5 years |
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Vision Screening |
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Every 1-2 years beginning at age 75 |
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Tetanus-diptheria (Td) vaccine |
Every 10 years |
Every 10 years |
Every 10 years |
Every 10 years |
Every 10 years |
Every 10 years |
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Influenza vaccine |
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1 per calendar year |
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Pneumococcal vaccine |
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Once after age 65 |
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Rubella |
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Once in lifetime |
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Once in lifetime. |
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Page 61 Letter 00-20
Scheduling Commitment
UNITED AIRLINES
Captain F.C. Dubinsky, Chairman
UA/ALPA Master Executive Council
Air Line Pilots Association
6400 Shafer Court, Suite 700
Rosemont, IL 60018
Re: UAL Pilot Scheduling Philosophy: Continual Improvement
Dear Captain Dubinsky:
This will confirm that, in section 6 negotiations leading up to the 2000 Contract, United and ALPA have committed to the following:
An explicit "UAL Pilot scheduling philosophy"
System Quality of Work Life (QWL) standards for domestic mainline pilot schedules
Enforceable plan for continued improvements in schedules and QWL Standards.
UAL Pilot Scheduling Philosophy - United and ALPA will strive to continually create less fatiguing, more reliable and more productive days of flying. In immediate support of this philosophy, within 60 days of ratification of the 2000 contract. United will implement the following:
- Build night flying to specific standards to address fatigue and quality issues
- Minimize excessive short or long layovers which cause reliability, quality and human factor issues
- Build lines of flying with improved pairing purity and improved days on/off
patterns. Demonstrated improvement in days off will be incorporated in these
enhancements. These lines recognize seniority with an emphasis on
concentrating high quality flying to the maximum number of senior lines.
Letter 00-20 Page 62
System Quality of Work Life Standards - The following standards will apply after
ratification unless different standards are agreed upon by both the Company and
ALPA. These standards are contingent upon the elimination of the two for one rest provisions of the pilot working agreement, and based upon the daily 7 day domestic schedule:
- No more than 55% of turns 1 in the same aircraft (System Average)
- No more than 55% of the lines of flying will have 270 or more hours Time Away From Base, unless both the SSC and the Company determine this limit has an adverse impact on purity and quality.
Provide contractual trip and duty RIGs in the actual operation so as to create
an economic incentive for the Company to minimize Time Away from base as
well as providing an economic benefit to the pilot when Time Away From
Base becomes higher than scheduled. Schedules that do not meet these standards will not be published without agreement with ALPA. The techniques used to achieve these standards will be applied across all domestic mainline fleets consistently unless excepted by agreement with the SSC or by external events such as major ATC system disruption, government action affecting
a fleet type, concerted labor activity, or a long term disruption of service due to a
natural disaster.
Plan for Continual Improvement - The Company and ALPA will sponsor a Joint
Committee to monitor and evaluate how well the above standards serve both the pilots and the Company. Additionally, the Joint Committee will continue to explore methods to improve pilot schedules and quality of work life.
The Joint Committee will convene immediately and will, within two (2) weeks, submit a working plan and schedule to the MEC Chairman and UAL's Chief Operating Officer for their approval. United will assign a full time analyst to this project for a period of at least six (6) months. The subcommittee will explore additional computer programming and other opportunities to implement changes to modify, improve and maintain schedule quality consistent with a changing airline. Reduction in Time Away from Home
will be a high priority of the Committee's study. It will submit written progress
System Average
aa. System average (excluding charters) = Domestic B777, B767, A320,
B727, B300 and B737.
Standard
-
Sits b > 2:00b. Sits = Any ground time that is contained between flights within a duty
period
4.0% Maximum
-
Duty Periods >12:00
6.0% Maximum
1.Turn = Any aircraft turn contained within a duty period.
Page 63 Letter 00-20
reports to the MEC Chairman and UAL's Chief Operating Officer at least once
per month. No less than two weeks prior to the end of the six (6) month period, the subcommittee will submit written recommendations to the MEC Chairman and UAL's Chief Operating Officer for implementation of any such agreed to scheduling improvements and modifications. Upon approval by the MEC Chairman and UAL's Chief operating Officer, the recommendations will be implemented.
To the extent that the subcommittee is unable to reach agreement on any or all recommendations, the MEC Chairman or his designee and UAL's Chief
Operating Officer or his designee will convene a face-to-face meeting with the
subcommittee to resolve any and all remaining issues.
If this accurately reflects our understanding, please sign and return two (2) copies for our files.
Sincerely,
/s/ Andy Studdert
Andy Studdert
Chief Operating Officer
United Airlines
Accepted and agreed to this 26th day of October, 2000.
/s/ F.C. Dubinsky
Captain F.C. Dubinsky
UAL-MEC Air Line Pilots Association.
Letter 00-21 Page 64
Flights Scheduled in Excess of 16 Hours
UNITED AIRLINES
Captain F.C. Dubinsky, Chairman
UAL-MEC Air Line Pilots Association
6400 Shafer Court, Suite 700
Rosemont, Illinois 60018
Dear Captain Dubinsky,
This is to confirm that during the negotiations leading to the 2000 Agreement the
parties agreed that the Company would be allowed to schedule non-stop flights in excess of sixteen (16) hours in two pilot aircraft under the following conditions:
1. The maximum scheduled duty time shall be two (2) hours more than the
scheduled flight time. Actual duty time shall not exceed the scheduled duty time by more than two (2) hours.
2. The crew complement on flights scheduled in excess of sixteen (16) flight hours will be agreed upon by the parties with due consideration given to the
recommendations of the "Joint Augmentation Study Committee''.
These rules will apply to non-stop flights in excess of sixteen (16) hours scheduled to geographic regions not specifically addressed in the current International Supplemental Agreement and new markets to geographic regions already addressed. At least ninety (90) days prior to initiating such new flying, representatives of the Company and the Association will meet to resolve operational issues relevant to the flying. If the representatives are unable to reach agreement on any operational issue(s), the unresolved issue(s) will be referred to the Senior Vice President of Flight Operations and the Master Chairman for resolution.
lf this accurately reflects our agreement. please sign and return two (2) copies for our files.
Sincerely,
/s/ William P. Hobgood
William P. Hobgood
Sr. Vice President- People
Accepted and Agreed to this 26th day of October, 2000
/s/ F.C. Dubinsky
Captain F. C. Dubinsky
UAL-MEC Chairman - Air Line Pilots Association.
Page 65 Letter 00-22
Short-term Disability
LETTER OF AGREEMENT
between
UNITED AIRLINES, INC.
and
THE AIR LINE PILOTS
in the service of
UNITED AIRLINES, INC.
as represented by
THE AIR LINE PILOTS ASSOCIATION,
INTERNATIONAL
THIS LETTER OF AGREEMENT is made and entered into in accordance with the provisions of Title II of the Railway Labor Act, as amended, by and between UNITED AIR LINES, INC. (hereinafter referred to as the "Company") and the AIR LINE PILOTS in the service of UNITED AIR LINES, INC. as represented by the AIR LINE PILOTS ASSOCIATION, INTERNATIONAL (hereinafter referred to as "ALPA" or the "Association")
WITNESSETH:
WHEREAS, the Company and the Association wish to state the Agreement they have reached with respect to Short Term Disability
THEREFORE, it is mutually agreed that the following provisions shall apply in the administration of a Short Term Disability policy: A pilot who is disabled due to illness, non-occupational injury or pregnancy, but whose disability does not qualify the pilot to receive Pilot Disability Income Benefits, will be eligible for Short Term Disability ("STD") benefits subject to the following:
a. A pilot is eligible for STD from date of hire.
b. Upon exhaustion of the pilot's non-occupational sick leave bank the company will pay the pilot an amount equal to 55% of pay based upon the minimum monthly guarantee for up to a maximum of 90 days. Partial months will be prorated on a calendar day basis (number of days disabled divided by the number of days in the bid month). Such benefit will be considered earnings for the Fixed Benefit Plan but will not be considered earnings for the purpose of any other employee benefit plan including, but not limited to, PDAP and Pilot Disability Benefits.
c. To qualify for the benefit, the pilot must be under a doctor's care for treatment of the condition and the pilot must be medically unable to work. In the case of pregnancy, a pilot who requests STD will be considered medically unable to work. during the period of pregnancy and for a period of up to 90 days following the date of delivery.
Letter 00-22 Page 66
d. If there are questions regarding the extent to which the pilot is disabled, the Company's Regional Medical Offices will be responsible for reviewing the medical documentation, requesting any additional information deemed appropriate, and approving the request. If there is disagreement between the Company physician and the pilot's physician, the pilot may request Medical Arbitration by a disinterested third party. If the pilot requests medical arbitration, the Company's doctor and the pilot's doctor will mutually agree upon a third physician to examine the pilot. The Medical Department will arrange for the consultation, and the decision of the majority will be binding on the Company and the pilot. The pilot and the Company will each be responsible for one half the fee of the mutually agreed upon examiner. A pilot who initiates medical arbitration will be provided with compensation pursuant to STD. This compensation will be refunded to the Company if the Company prevails in medical arbitration.
e. This benefit is not payable (i) for any illness or injury arising out of or in the course of employment with UA for which the pilot is receiving Worker's
Compensation benefits, (ii) after termination of the pilot's employment with United, and (iii) for any disability that begins while a pilot is on an unpaid leave of absence.
f. The STD benefit will be restored upon return to active employment as a line pilot for a period of 12 months which need not be consecutive (active employment is any month in which the pilot receives at least fifty (50) credit hours flight time credit and/or vacation credit).
IN WITNESS WHEREOF, the parties have signed this Letter of Agreement this 26th day of October, 2000.
/s/ William P. Hobgood
William P. Hobgood
Senior Vice President
People
/s/ F.C. Dubinsky
Captain F. C. Dubinsky, Chairman
UA/ALPA Master Executive Council.
Page 67 Letter 00-23
"570" Seniori ty Dates
UNITED AIRLINES
September 27, 2000
Captain Frederick C. Dubinsky, Chairman
UAL-MEC Air Line Pilots Association
6400 Shafer Court, Suite 700
Rosemont, IL 60018
Re: Pilot Seniority Dates for ''the 570'' Pilot Group
Dear Captain Dubinsky,
This will confirm the parties agreement to change both the pilot and second officer seniority dates (the classification dates) and the company hire dates for the group of pilots commonly known as ''the 570'' from the date of May 17, 1985 to the date upon which each of these pilots actually commenced training. Those dates occurred during the period commencing on December l 1, 1984 and continuing through May 16, 1985.
This change will bring these dates of this group into conformity with the rest of
United's pilots. Attached hereto as Exhibit A is a list reflecting the date upon which members of the 570 commenced training, which date will become the new pilot and second officer seniority date and company hire date for each such pilot. The only exception to this is if the pilot's company hire date is earlier than the date displayed, in which case the earlier date will be retained.
The parties further agree that these new dates will affect the contractual rights and benefits of those pilots on a prospective basis only.
If this letter accurately reflects our agreement, please sign and return three (3) copies for our files.
Sincerely,
/s/ Stephen A. Forte
Captain Stephen A. Forte
Senior Vice President/Flight Operations
Accepted and agreed to this 26 day of October, 2000.
/s/ F.C. Dubinsky
Captain F.C. Dubinsky, Chairman
UAL-MEC Air Line Pilots Association.
Letter 00-24 Page 68
Year 2000 Training Commitments
October 26, 2000
Captain F. C. Dubinsky, Chairman
UAL-MEC Airline Pilots Association
6400 Shafer Court, Suite 700
Rosemont, IL 60018-7180
Dear Rick,
During the negotiations leading to the 2000 Agreement, the parties agreed to the
following:
- The parties have jointly developed a display page to provide the means for a pilot to request a particular Pilot Instructor or Standards Captain prior to reporting to DENTK. The Company will honor such requests when doing so will not disrupt a Pilot Instructor's or Standards Captain's previously arranged schedule.
- PI's acting as fill-in crew members will participate in PC/CQP/PT's to the same extent as that required of normal line pilots. Additionally, the Company will publish PC/CQP/PT fill-in guidelines in relevant Fleet and Flight Center documents. These fill-in guidelines will be distributed to each PI prior to serving as a fill-in on a checking assignment.
- The parties have jointly developed a handout for type rated First Officers acting as Captains during training and PC/CQP/PT's. These handouts will be distributed to type rated First Officers prior to acting as a Captain during training and PC/CQP/PT's.
- Probationary pilots taking their nine month PC/CQP will not be graded to different standards than those required to successfully complete the initial transition course.
- With respect to Flight Operations Policy regarding home study prior to DENTK transition study, all transition course curricula are established independent of any home study considerations and, therefore, home study is not required prior to reporting to DENTK. All pilots will be treated fairly and consistently under this policy.
- The parties will jointly develop a display page to provide the means for a pilot to request a hotel room for the night before reporting to DENTK for a PC/CQP. When requested, the Company will provide a hotel room the night before a PC/CQP.
This letter is intended to memorialize the above agreements.
Sincerely,
/s/ Stephen A. Forte.
Page 69 Letter 00-24
Captain Stephen A. Forte
Senior Vice President
Flight Operations
Letter 00-25 Page 70
Trip Trade and Secondary Lines Modif icat ion Test
October 26, 2000
Captain F. C. Dubinsky, Chairman
UAL-MEC Airline Pilots Association
6400 Shafer Court, Suite 700
Rosemont, IL 60018-7180
Dear Rick,
During the negotiations leading to the 2000 Agreement, the parties agreed to the
following:
- The Company will initiate a test to determine the feasibility of completing the "Big Pick" after the awarding and repairs of primary lines. Based upon the results of this test, the appropriate modifications, if any, will be made to Letter of Agreement 9-1.
- The Company will initiate a test to determine the feasibility of posting and awarding or PBS selection of secondary lines.
- Unlimited (first come, first served) active trip trading will open at noon local domicile time. If, after one hundred and twenty (120) days, the SSC reports continued difficulty accessing trip trading then unlimited trip trading will be opened on separate days or additional access to UNIMATIC will be provided.
This letter is intended to memorialize the above agreements.
Sincerely,
/s/ Stephen A. Forte
Captain Stephen A. Forte
Senior Vice President
Flight Operations.
Page 71 Letter 00-26
Electronic Communication
October 26, 2000
Captain F. C. Dubinsky, Chairman
UAL-MEC Airline Pilots Association
6400 Shafer Court, Suite 700
Rosemont, IL 60018-7180
Dear Rick,
During the negotiations leading up to the 2000 Agreement, the parties agreed that the Company will consult with ALPA in the development of a system and procedures for communicating electronically with pilots.
This letter is intended to memorialize that agreement.
Sincerely,
/s/ Stephen A. Forte
Captain Stephen A. Forte
Senior Vice President
Flight Operations.
Letter 00-27 Page 72
New Hire OMC Eligibilit y
November 28, 2000
Captain F.C. Dubinsky, Chairman
UAL-MEC AIr LIne PIlots Association
6400 Shafer Court, Suite 700
Rosemont, Illinois 60018
Dear Rick,
This letter is to confirm our recent conversation in which we agreed that upon report to DENTK for initial training a new hire pilot will be eligible to travel OMC as outlined in the Flight Operations Manual. This eligibility remains throughout his/her probationary period and is only discontinued if the pilot's employment is terminated from United Airlines.
/s/ Stephen A. Forte
Stephen A. Forte
Senior Vice President
Flight Operations.
Page 73 Letter 00-28
Anchorage Closing
United Airlines
December 15, 2000
Captain F.C. Dubinsky, Chairman
UAL-MEC AIr LIne PIlots Association
6400 Shafer Court, Suite 700
Rosemont, Illinois 60018
Dear Rick:
Due to the closing of the Anchorage domicile, and recognizing the unique geographic circumstances associated with this domicile, a pilot who holds an Anchorage bid and exercises a bump under Section 8-O of the 2000 Agreement ("the Agreement") will be eligible for the following provisions:
1. A pilot will be entitled to a paid move under the provisions of Section 10 of the Agreement. However, if the pilot is moving his primary residence from Alaska, the pilot will have up to thirty-six (36) months from the date of activation in his new assignment to complete his household move.
2. If a pilot who holds an Anchorage bid never exercised his paid move entitlement as stated in Section 10-A-3-g of the Agreement, the Company will pay to move his household goods from Alaska, even if he bumps back to the domicile at which he was based prior to receiving his Anchorage bid. However, the Company will only pay to move household goods after the pilot has first exhausted the 1000-pound NRSA COMAT limits.
3. The three (3) transfer days addressed in Section 10-A-2-a and 10-A-3 of the Agreement will be increased to five (5) days.
4. A pilot will be eligible for up to four (4) house hunting days to be used
consecutively; with the understanding that the Company will only reimburse house hunting expenses for up to four (4) days and three (3) nights.
Letter 00-28 Page 74
5. An Anchorage pilot covered by this letter, and who maintains his primary residence in Alaska, shall be provided BP-3 NRPS transport between Anchorage and his domicile for each scheduled trip pairing or for each consecutive series of reserve days until the day the pilot completes his household move from Alaska or December 23, 2002, whichever occurs earlier. Provided the pilot has not relocated his primary residence from Alaska prior to December 23, 2002, he will be eligible for BP-7 NRSA transportation between Anchorage and his domicile for each scheduled trip pairing or for each consecutive series of reserve days until the day the pilot completes his
household move from Alaska or December 23, 2002, whichever occurs earlier.
6. A pilot and his eligible dependents will be entitled to a one-way BP-3 NRPS ticket from Anchorage for the purpose of relocating to a new primary residence.
7. If a pilot exercised a paid move entitlement after receiving his Anchorage bid and moved more than 25,000 pounds to Alaska (as reflected in Company records), the pilot will, as a result of exercising his bump, be eligible to move up to the same amount of household goods from his Alaska primary residence to his new residence.
8. Should a pilot choose to drive a vehicle from Alaska to his new domicile/residence, the pilot will be eligible for a number of travel days equal to the distance between Anchorage and and the pilots new domicile divided by 400. These travel days must be used consecutively, and the pilot must furnish receipts (e.g. gas, meals, lodging, etc.) to document that he did drive during the travel day period.
9. A pilot who maintains his primary residence in Alaska will retain parking privileges at Anchorage International Airport until he completes his household move.
10. Until November 22, 2001, a pilot who maintains his primary residence in
Anchorage and who travels from Anchorage to Denver for a PC/CQP/PT will be eligible for a travel day immediately prior to and immediately following the training event.
11. A pilot will not be scheduled for training over the 2000 Christmas holiday.
12. The Company will make every effort to allow a pilot to move a training date for the purpose of avoiding a planned vacation, unless such an action results in a lost training slot or adversely impacts the needs of the operation.
13. As a clarification, the provisions of Section 11-E-3 will apply to a pilot's vacation assignments.
14. The Company will continue to provide support for ANCFO until the Anchorage domicile is closed.
Page 75 Letter 00-28
15. Any pilot who bumps from Anchorage as a result of the domicile closing will be entitled to "grandfather" rights back to Anchorage should the Company reopen an Anchorage domicile prior to November 22, 2005. A pilot returning to the Anchorage domicile under this provision will be entitled to activation into the assignment that he has seniority to hold systemwide. A pilot's "grandfather" rights will expire on November 22, 2005, or on the date the Company offers the pilot an Anchorage domicile assignment, if earlier, regardless of whether the pilot accepts or rejects the assignment.
16. Except as specifically modified by this letter, the provisions of Section 8 and Section 10 of the Agreement will apply to the Anchorage domicile closing.
17. The Company and the Association agree that this letter of agreement
encompasses the complete and final entitlement available to pilots bumping from Anchorage as a result of the domicile closing.
18. The parties agree that this letter of agreement is entered into on a no precedent basis and will not be used by either party in any similar future situation.
If this accurately reflects our understanding, please sign and return two copies of this letter for our files.
Sincerely,
/s/ Stephen A. Forte
Captain Stephen A. Forte
Senior Vice President
Flight Operations
Accepted and agreed to this 28th day of November, 2000.
/s/ F.C. Dubinsky
Captain F.C. Dubinsky, Chairman
UAL-MEC Air Line Pilots Association.
Letter 00-29 Page 76
Navigating Change Workshop
United Airlines/ALPA
December 2000
To all United Pilots,
You may have heard that a committee of four ALPA and four Company appointees has been working for many months on an educational project about minority and gender issues that are relevant to our United pilot group. A letter of Agreement signed by the Association and the Company directed this project. As a result of this joint initiative, some permanent changes will be made, most notably to our instructor training and to our new-hire curriculum.
The initial activity is a seminar called the "Navigating Change Workshop." This workshop is directed to pilots who are in leadership positions: primarily LCA's, DENTK personnel, ALPA officials and Flight Operations management. The purpose of the workshop is to give these leaders enough understanding of diversity related issues to provide relevant and guidance to fellow pilots who have had problems or difficulties working with pilots of a different race, gender
or other minority status.
We believe this goal has been achieved. The workshop will provide useful information and techniques to recognize and avoid participating in inappropriate behavior and also to constructively respond to inappropriate behavior should it occur, either as an individual or with ALPA and Company support. It is far more comprehensive than previous efforts to address this subject.
Many of you will not be required to attend the workshop; however, you may be affected by it. We want you to have factual information about what it is. These workshop issues are an easy "lightening rod" for criticism, usually not based on program content, but rather on the point of view of the observer. The joint development committee has succeeded in developing a program based entirely on common sense and maturity -- and it requires only these two values be used
when viewing or commenting on its content. We believe this program will prove to be of great value to all of our pilots.
/s/ Steve
Steve Forte
Senior Vice President
Flight Operations
/s/ Rick
Rick Dubinsky
Chairman
UAL-MEC.
Page 77 Letter 00-30
Modifications to the Flight Safety Awareness Program
United Airlines
Captain F.C. Dubinsky, Chairman
UAL-MEC AIr LIne PIlots Association
6400 Shafer Court, Suite 700
Rosemont, Illinois 60018
Dear Rick:
This letter confirms our agreement concerning the following ancillary issues related to the administration of the Flight Safety Awareness Program (FSAP):
1. The ALPA representative on the Event Review Committee (ERC) shall be
compensated by United Airlines for all flight pay loss, including all applicable
overrides, resulting form the time lost for duties performed for the ERC.
2. Any pilot participating in the FSAP who is removed from a schedule shall be compensated by United Airlines for all flight pay loss, provided the pilot continues to participate in the program
3. In the event that United Airlines fails to satisfy its obligation under the FSAP to prepare and file a NASA report for an incident reported by a pilot to the FSAP, and a resulting FAA enforcement action over that incident results in the pilot suffering a loss of income, United shall make the pilot whole for all loss of income.
4. The steering committee for the FSAP and the Flight Operations Quality Assurance (FOQA) program shall be composed of the same individuals.
If this letter accurately reflects our understanding on the above four points, please sign and return two copies of this letter.
Best regards,
/s/ Stephen A. Forte
Captain Stephen A. Forte
Senior Vice President
Flight Operations
Accepted and agreed to this 14 day of December, 2000.
Letter 00-30 Page 78
/s/ F.C. Dubinsky
Captain F.C. Dubinsky, Chairman
UAL-MEC Air Line Pilots Association.
Page 79 Letter 00-31
Implementation of New Contract Provisions
United Airlines
December 15, 2000
Captain F.C. Dubinsky, Chairman
UAL-MEC
6400 Shafer Court, Suite 700
Rosemont, Illinois 60018
Dear Rick:
We have concluded our evaluation and analysis regarding the timing of the implementation of the new provisions of the Pilot Agreement. After extensive discussion by the Company and ALPA negotiating committees, we have agreed to the following:
1. The 78 hour guarantee will remain in effect for the month of January.
2. The 75 hour guarantee will become effective with February schedules provided the following provisions are implemented:
2-a- The Aggressive and Active reserve provisions will be effective February 1, 2001. However, the procedure for short calls for reserves will be effective 4/1/01.
2-b- Pay protection on the 20th of the month will be effective on November 1, 2000 and paid for the months of November and December as soon as possible. For January through March, any pay resulting from this provision will be paid on the 15th of the month following the month in which a pilot would normally receive his actual performance pay. This provision will be programmed no later than April 1, 2001.
2-c- The Senior/Junior manning concept will be programmed no later than May 1, 2001. In the interim period, the provision of the 1994 Pilot Agreement will remain in effect (Junior manning).
2-d- All of the additional provisions of Sections 5 and 20 will be effective and implemented with the January 2001 schedules, except as follows:
2-d-1- 5.B.2.b - Reserve Cap - will be effective 2/1/01
2-d-2- 5.G.1.e and 5.G.2.b.5 - Crosstown Duty Time - will be effective 3/1/01.
If this accurately reflects our understanding, please sign and return three (3) copies for our files.
Sincerely,
/s/ Ed Del Genio
Ed Del Denio
Director, People Services - Flight
Letter 00-31 Page 80
United Airlines 2000 ALPA
Accepted and agreed to this 12 day of December, 2000.
/s/ F.C. Dubinsky
Captain F.C. Dubinsky, Chairman
UAL/ALPA Master Executive Council.
Page 81 Letter 01-1
777 over 12-hour Flights
United Airlines
Captain F.C. Dubinsky
UAL-MEC Air Line Pilots Association
6400 Shafer Court, Suite 700
Rosemont, IL 60018
Dear Rick,
As a result of discussions between the parties, it has been agreed that the Company may operate B777 two (2) pilot aircraft on a single segment consisting of a Pacific Crossing of more than twelve (12) and less than sixteen (16) hours.
The crew complement will consist of a Captain and three (3) First Officers who hold an ATP certificate with a type rating in the operating aircraft.
The duty time limitations of Section 3-A-7 and Section 3-N-3 and the legal rest
minimums of Section 3-M of the International Agreement shall apply. The designated pilot rest facility will be as follows:
B777 (with First class Suite) 2 First Class Suites (3A and 3J)
B777 (with the cockpit crew bunk and no First Class Suite)
Crew Bunk Facility and 2 Business class seats (Left bulkhead window
and aisle)
The Company may not substitute any other B777 aircraft to accomplish this flying which does not have the required rest facility outlined above. The new overhead bunk facility once available from Boeing will be installed during each aircraft's heavy maintenance visit.
Flight Operations will work with the Onboard Division to seek opportunities to
minimize flight attendant activity in the area of door 1L during periods of pilot crew rest. Should these arrangements prove unsatisfactory, either ALPA or the Company may terminate this agreement with sixty (60) days notice prior to the awarding of pilot monthly schedules in the B777 domicile in which the scheduled flying described above is assigned.
If this accurately reflects our understanding, please sign and return two copies for our files.
Sincerely,
/s/ Stephen A. Forte
Letter 01-1 Page 82
Captain Stephen A. Forte
Senior Vice President
Flight Operations
Accepted and agreed to this 5th day of January, 2001.
F.C. Dubinsky
F.C. Dubinsky, Chairman
UAL-ALPA MAster Executive Council.
Page 83 Letter 01-2
Chicago Honolulu Augmentation
United Airlines
Captain F.C. Dubinsky
UAL-MEC Air Line Pilots Association
6400 Shafer Court, Suite 700
Rosemont, IL 60018
Dear Rick,
As a result of discussions between the parties, it has been agreed that the Company may operate on a scheduled or substituted basis B747-400 and/or B777 two (2) pilot aircraft on a single segment scheduled for more than eight (8) hours in the Chicago Honolulu Market.
The crew complement will consist of a Captain and two (2) First Officers who hold an ATP certificate with a type rating in the operating aircraft. The flight will be the only segment scheduled in the duty period. The duty period will not be scheduled for more than 13 1/2 hours and the pilot will not be required to
remain on duty in excess of 15 1/2 hours. With his concurrence, he may remain on duty up to a maximum of sixteen (16) hours. The pilots shall have at least 18 hours scheduled free from duty with sixteen (16) hours considered to be actual minimum. With the concurrence of the SSC, the scheduled eighteen (18) hour minimum may be reduced to sixteen (16) hours.
The designated pilot rest facility will be as follows:
B747-400 Crew Bunk Facility
B777 (with the First Class Suite) 1 First Class Suite (3A or 3J)
B777 (with the cockpit crew bunk and no First Class Suite)
Crew Bunk Facility and 1 Business Class Seat (Left Bulkhead aisle)
The Business Class Seat will be for the exclusive use of the crew and
the seat next to this seat will be assigned or occupied only if it is the
last available seat in the Business class cabin.
The Company may not substitute an aircraft to accomplish this flying
that does not have the required rest facilities outlined above.
Flight Operations will work with the Onboard Division to seek opportunities to
minimize flight attendant activity in the area of door 1L during periods of pilot crew rest. Should these arrangements prove unsatisfactory, either ALPA or the Company
Letter 01-2 Page 84
may terminate this agreement with 60 days notice prior to the awarding of pilot
monthly schedules in the equipment domicile in which the scheduled flying described above is assigned.
If this accurately reflects our understanding, please sign and return two copies for our files.
Sincerely,
/s/ Stephen A. Forte
Captain Stephen A. Forte
Senior Vice President
Flight Operations
Accepted and agreed to this 5th day of January, 2001.
F.C. Dubinsky
F.C. Dubinsky, Chairman
UAL-ALPA MAster Executive Council
Page 85 Letter 01-3
New Hire First Officer
United Airlines
January 12, 2001
Captain F.C. Dubinsky, Chairman
UAL-MEC
6400 Shafer Court, Suite 700
Rosemont, Illinois 60018
Dear Captain Dubinsky,
On March 29, 1995, the parties agreed to not assign new-hire pilots for their initial assignment to wide-body First Officer positions in an international operation. After discussions with ALPA regarding this agreement, the parties have agreed to modify this restriction in Letter 99-8 (Wide-Body First Officer) to the following extent to allow a new hire to be initially assigned to a B-757/767 First Officer position under the following conditions:
1. The new-hire pilot will be assigned to domestic flying until he has performed a minimum of 250 actual hours of flying.
2. The new-hire pilot will not be awarded a lateral to another international B-757/767 domicile until he has completed the required 250 actual hours of domestic flying.
If this adequately reflects our discussion and our agreement, please sign and return two (2) copies to me for our files.
Sincerely,
/s/ Stephen A. Forte
Captain Stephen A. Forte
Senior Vice President
Flight Operations
Accepted and agreed to this 21st day of January, 2001.
/s/ F.C. Dubinsky
Captain F.C. Dubinsky, Chairman
UAL-MEC Air Line Pilots Association
Letter 01-4 Page 86
Bump Notification and Training Notification Changes
United Airlines
Captain F. C. Dubinsky, Chairman
UAL-MEC Air Line Pilots Association
6400 Shafer court, Suite 700
Rosemont, IL 60018
Dear Rick,
The parties have agreed to amend the 2000 pilot Agreement as follows:
1. Revise the second sentence in Section 8-K-1 to read: "Such notice shall be given not less than thirty (30) days nor more than one hundred twenty-five (125) days prior to the date of displacement."
2. Revise Section 9-B-1-a to read: "All pilots shall be notified as far in advance as possible but in no case less than fourteen (14) days prior to being scheduled to receive transition or extended training of five (5) days or more. However, if a pilot is returning to work from an absence and he needs requalification or transition training, this fourteen (14) day minimum notification may be reduced to seven (7) days. These minimum notification requirements may be further reduced only with pilot concurrence. Official notice of training assignments will be conveyed through the pilot's Company mail box and by electronic notification. If, however, a pilot's schedule shows that he does not have any duty following the initiation of the notice, or that the pilot has not checked the electronic notification, the company will make an effort to contact him by telephone within seven (7) days of the original
notification. If this attempt is unsuccessful, a letter will be sent by U.S. mail to his home of record. If a pilot volunteers for training with less than fourteen (14) days notice of a training assignment of this type and does not have a scheduled calendar day off between the time of notification and the time he is required to depart his domicile, he will be provided with a calendar day off within seven (7) days from departing his domicile."
Since these changes were agreed to prior to the publication of the 2000 pilot
Agreement, these amendments will be incorporated into the body of the Agreement and this letter will be referenced in Section 22.
Page 87 Letter 01-4
If this accurately reflects our understanding, please sign and return two copies of this letter for our files.
Sincerely,
/s/ Stephen A. Forte
Captain Stephen A. Forte
Senior Vice President
Flight Operations
Accepted and agreed to this 17th day of January, 2001
/s/ F.C. Dubinsky
Captain F. C. Dubinsky, Chairman
UAL-MEC Air Line Pilots Association
Letter 01-5 Page 88
Annual Vacat ion Bidding for Pilots Surplussed out of a Closing Domicile
Captain F. C. Dubinsky, Chairman
UAL-MEC Air Line Pilots Association
6400 Shafer Court, Suite 700
Rosemont, IL 60018
Dear Rick,
Notwithstanding the provisions of Section 11-D of the Agreement, the parties have agreed that pilots surplussed as a result of an equipment domicile closing who are awarded a bump but are not on the domicile roster at their new assignment as of January 1, will be permitted to bid their annual vacation during the annual vacation bidding period at their bump assignment.
Since this change was agreed to prior to the publication of the 2000 pilot Agreement, this amendment will be incorporated into the body of the Agreement and this letter will be referenced in Section 22.
If this accurately reflects our understanding, please sign and return two copies of this letter for our files.
Sincerely,
/s/ Stephen A. Forte
Captain Stephen A. Forte
Senior Vice President
Flight Operations
Accepted and agreed to this 17th day of January, 2001
/s/ F.C. Dubinsky
Captain F. C. Dubinsky, Chairman
UAL-MEC Air Line Pilots Association
<TYPE> EX-12
<TEXT>
<HTML>
UAL Corporation and Subsidiary Companies
Computation of Ratio of Earnings to Fixed Charges
|
|
|||||
|
|
|
|
|
|
|
| Earnings: |
|
||||
| Earnings before income taxes, extraordinary | |||||
| item and cumulative effect |
$ 431
|
$ 1,942
|
$ 1,256
|
$ 1,524
|
$ 970
|
| Undistributed (earnings) losses of affiliates |
13
|
(20)
|
(62)
|
(16)
|
(49)
|
| Fixed charges, from below |
1,046
|
993
|
986
|
991
|
1,112
|
| Interest capitalized |
(77)
|
(75)
|
(105)
|
(104)
|
(77)
|
| Earnings |
$ 1,413
|
$ 2,840
|
$ 2,075
|
$ 2,395
|
$ 1,956
|
|
=====
|
=====
|
=====
|
=====
|
=====
|
|
| Fixed charges: | |||||
| Interest expense |
$ 402
|
$ 362
|
$ 355
|
$ 286
|
$ 295
|
| Portion of rental expense representative | |||||
| of the interest factor |
644
|
631
|
631
|
705
|
817
|
| Fixed charges |
$ 1,046
|
$ 993
|
$ 986
|
$ 991
|
$ 1,112
|
|
=====
|
=====
|
=====
|
=====
|
=====
|
|
| Ratio of earnings to fixed charges |
1.35
|
2.86
|
2.10
|
2.42
|
1.76
|
|
=====
|
=====
|
=====
|
=====
|
=====
|
|
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE> EX-12.1
<TEXT>
<HTML>
UAL Corporation and Subsidiary Companies
Computation of Ratio of Earnings to Fixed Charges
and Preferred Stock Dividend Requirements
|
|
|
|
|
|
|
| Earnings: | |||||
| Earnings before income taxes, extraordinary | |||||
| item and cumulative effect |
$ 431
|
$ 1,942
|
$ 1,256
|
$ 1,524
|
$ 970
|
| Undistributed (earnings) losses of affiliates |
13
|
(20)
|
(62)
|
(16)
|
(49)
|
| Fixed charges and preferred stock | |||||
| dividend requirements, from below |
1,119
|
1,195
|
1,150
|
1,116
|
1,209
|
| Interest capitalized |
(77)
|
(75)
|
(105)
|
(104)
|
(77)
|
| Earnings |
$ 1,486
|
$ 3,042
|
$ 2,239
|
$ 2,520
|
$ 2,053
|
|
=====
|
=====
|
=====
|
=====
|
=====
|
|
| Fixed charges: | |||||
| Interest expense |
$ 402
|
$ 362
|
$ 355
|
$ 286
|
$ 295
|
| Preferred stock dividend requirements |
73
|
202
|
164
|
125
|
97
|
| Portion of rental expense representative | |||||
| of the interest factor |
644
|
631
|
631
|
705
|
817
|
| Fixed charges |
$ 1,119
|
$ 1,195
|
$ 1,150
|
$ 1,116
|
$ 1,209
|
|
=====
|
=====
|
=====
|
=====
|
=====
|
|
| Ratio of earnings to fixed charges |
1.33
|
2.55
|
1.95
|
2.26
|
1.70
|
|
=====
|
=====
|
=====
|
=====
|
=====
|
|
</HTML>
</TEXT>
</DOCUMENT>
<TYPE> EX-21
<TEXT>
<HTML>
Exhibit 21
12/21/00
| UAL Corporation
1200 East Algonquin Road Elk Grove Township. IL 60007 |
||
| Jurisdiction of Incorporation | Federal/Country
Taxpayer I.D. |
|
| UAL Corporation
(Wholly-owned subsidiaries): |
Delaware | 36-2675207 |
| Air Wis Services, Inc. | Wisconsin | 39-1435586 |
| Four Star Insurance Company, Ltd. | Bermuda | None |
| Four Star Leasing, Inc. | Delaware | 36-4292248 |
| UAL Benefits Management, Inc. | Delaware | 36-4011347 |
| United Air Lines, Inc. | Delaware | 36-2675206 |
| United NewVentures, Inc. | Delaware | 36-4401481 |
| Yellow Jacket Acquisition Corp. | Delaware | 36-4402945 |
| United Air Lines, Inc.
1200 East Algonquin Road Elk Grove Township, IL 60047 |
||
| United Air Lines, Inc.
(Wholly-owned subsidiaries): |
||
| Covia LLC | Delaware | 36-2675206 |
| Kion de Mexico, S.A. de C.V. | Mexico | UAI-770831-AYI |
| Kion Leasing, Inc. | Delaware | 36-2946443 |
| Mileage Plus Holdings, Inc. | Delaware | 36-4156229 |
| Premier Meeting and Travel Services, Inc. | Delaware | 36-4207846 |
| United Aviation Fuels Corporation | Delaware | 36-3235783 |
| United Cogen, Inc. | Delaware | 36-3333841 |
| United GHS Inc. | Delaware | 36-3555070 |
| United Servicios de Reservaciones de Mexico, S.A. de C.V. | Mexico | |
| United Vacations, Inc. | Delaware | 36-3324931 |
| United Worldwide Corporation | Guam | 66-0454431 |
| Air Wis Services, Inc.
(Wholly-owned subsidiaries): |
||
| Air Wisconsin, Inc. | Wisconsin | 39-1042730 |
| Air Wis Services, Inc. (999 shares)
and United Air Lines, Inc. (1 share)
(Subsidiary): |
||
| Domicile Management Services, Inc. | Delaware | 36-4097942 |
| Mileage Plus Holdings, Inc.
(Wholly-owned subsidiaries): |
||
| Mileage Plus, Inc. | Delaware | 36-3189467 |
| Mileage Plus Marketing, Inc. | Delaware | 36-4120103 |
Covia LLC currently owns a 15.19% equity interest in Galileo International,
Inc., a Delaware Corporation, and a 50% equity interest in the Galileo
Japan Partnership, a Delaware General Partnership.
</HTML>
</TEXT>
</DOCUMENT>
<TYPE> EX-23
<TEXT>
<HTML>
Consent of Independent Public Accountants
As independent public accountants, we hereby consent to the incorporation
of our report included in the UAL Corporation Form 10-K for the year ended
December 31, 2000, into the Company's previously filed Post-Effective Amendment
No. 1 to Form S-8 (File No. 2-67368), Post-Effective Amendment No. 2 to
Form S-8 (File No. 33-37613), Post-Effective Amendment No. 1 to Form S-8
(File No. 33-38613), Form S-8 (File No. 333-63185), Post-Effective Amendment
No. 1 to Form S-8 (File No. 33-44552), Form S-8 (File No. 33-57331), Form
S-8 (File No. 333-03041), Form S-8 (File No. 333-63181), Post-Effective
Amendment No. 1 to Form S-8 (File No. 33-44553), Form S-8 (File No. 33-62749),
Form S-8 (File No. 333-52249), Form S-8 (File No. 333-63179), Post-Effective
Amendment No. 1 to Form S-8 (File No. 33-59950), Form S-8 (File No. 333-03039),
Form S-8 (File No. 333-47444), Form S-8 and Post-Effective Amendment No.
1 to Form S-8 (File No. 33-60675), and Form S-8 (File No. 333-52276).
/s/ Arthur Andersen LLP
Arthur Andersen LLP
Chicago, Illinois
March 15, 2001
(date)
</HTML>
</TEXT>
</DOCUMENT>
<TYPE> EX-99
<TEXT>
<HTML>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
FORM 11-K
ANNUAL REPORT
Pursuant to Section 15(d) of the
Securities Exchange Act of 1934
For the Fiscal Year Ended December 31, 2000
Employees' Stock Purchase Plan of UAL Corporation
(Full title of the Plan)
UAL Corporation
(Employer sponsoring the Plan, issuer of the
participations in the Plan and issuer of
the shares held pursuant to the Plan)
1200 Algonquin Road, Elk Grove Township, Illinois
Mailing Address:
UAL Corporation, P.O. Box 66919, Chicago, Illinois 60666
(Address of principal executive offices)
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To UAL Corporation:
We have audited the accompanying statements of financial position of
the Employees' Stock Purchase Plan of UAL Corporation (the "Plan") as of
December 31, 2000 and 1999 and the related statements of changes in participants'
equity for each of the three years in the period ended December 31, 2000.
These financial statements are the responsibility of the Plan's administrator.
Our responsibility is to express an opinion on these financial statements
based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing
the accounting principles used and significant estimates made by the Plan's
administrator, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of the Plan as of December
31, 2000 and 1999 and the changes in its participants' equity for each
of the three years in the period ended December 31, 2000, in conformity
with accounting principles generally accepted in the United States.
/s/ Arthur Andersen LLP
Arthur Andersen LLP
Chicago, Illinois
March 15, 2001
Signature
Pursuant to the requirements of the Securities Exchange Act of 1934,
the sponsor and issuer of the participants of the Plan, UAL Corporation
has duly caused this Annual Report to be signed on its behalf by the undersigned
thereunto duly authorized.
UAL Corporation Administrator
Dated March 15, 2001 By /s/ Douglas A. Hacker
Douglas A. Hacker
Executive Vice President and
Chief Financial Officer
EMPLOYEES' STOCK PURCHASE PLAN
OF UAL CORPORATION
STATEMENTS OF FINANCIAL POSITION
(In thousands, except number of shares)
|
|
||
| ASSETS |
|
|
| Participants' payroll deductions | ||
| receivable from UAL Corporation |
$ 239
|
$ 145
|
| Investment in common stock of | ||
| UAL Corporation, at quoted market value | ||
| (2000 - 610,277 shares, cost $27,507; | ||
| 1999 - 549,617 shares, cost $24,350) |
23,763
|
42,630
|
|
$ 24,002
|
$ 42,775
|
|
|
======
|
======
|
|
| LIABILITIES AND PARTICIPANTS' EQUITY | ||
| Participants' equity |
$ 24,002
|
$ 42,775
|
|
$ 24,002
|
$ 42,775
|
|
|
======
|
======
|
|
See accompanying notes to financial statements.
EMPLOYEES' STOCK PURCHASE PLAN
OF UAL CORPORATION
STATEMENTS OF CHANGES IN PARTICIPANTS' EQUITY
(In thousands)
|
|
|||
|
|
|
|
|
| Balance at beginning of year |
$ 42,775
|
$ 31,523
|
$ 47,563
|
| Increase (decrease) during year: | |||
| Participants' payroll deductions |
5,128
|
5,660
|
5,810
|
| Realized gain on stock distributed to participants |
551
|
1,749
|
150
|
| Unrealized appreciation (depreciation) in | |||
| value of investment |
(22,024)
|
7,966
|
(19,298)
|
| Stock and cash for fractional shares distributed or | |||
| amounts payable to participants, at market value |
(2,428)
|
(4,123)
|
(2,702)
|
|
(18,773)
|
11,252
|
(16,040)
|
|
| Balance at end of year |
$ 24,002
|
$ 42,775
|
$ 31,523
|
|
======
|
======
|
======
|
|
See accompanying notes to financial statements.
EMPLOYEES' STOCK PURCHASE PLAN
OF UAL CORPORATION
NOTES TO FINANCIAL STATEMENTS
(1) The Plan
The Employees' Stock
Purchase Plan of UAL Corporation (the "Plan") is sponsored by UAL Corporation
("UAL"). UAL offers participation in the Plan to eligible employees
of UAL and its subsidiaries.
(2) Purchase and Distribution of Stock
Purchases are made
by the Plan monthly, and the shares purchased are credited to the accounts
of each participant on the basis of the ratio of the participant's contribution
to total participants' contributions for the month. The cost of common
stock purchased for the Plan includes all brokerage charges involved in
the purchase.
When shares of stock
are distributed to the individual participants pursuant to the terms of
the Plan, the market value of such shares is removed from the investment
account of the Plan.
Terminating participants
receive a certificate for the full number of shares, plus cash for the
fractional shares, held for their accounts. Partially withdrawing
participants receive certificates for the full number of shares withdrawn.
There are no forfeiture provisions under the Plan with respect to participants'
contributions.
(3) Investment in Common Stock of UAL
The investment in common
stock of UAL is valued at year-end published market prices as reported
by the New York Stock Exchange.
(4) Realized Gain on Stock Distributed to Participants
Gains on stock distributed
to participants are realized to the extent of the difference between the
weighted average cost of shares distributed and the market value at the
date of distribution.
(5) Unrealized Appreciation (Depreciation) in Value of Investment
The unrealized appreciation
(depreciation) in the value of investment is the change from the prior
year-end to the current year-end in the difference between the market value
and the cost of the investment. The following is a summary of unrealized
appreciation (depreciation):
|
|
|
|
|
| Balance at beginning of year |
$ 18,280
|
$ 10,314
|
$ 29,612
|
| Increase (decrease) during the year |
(22,024)
|
7,996
|
(19,298)
|
| Balance at end of year |
$ (3,744)
|
$ 18,280
|
$ 10,314
|
|
=====
|
=====
|
=====
|
(6) Administrative Expenses of the Plan
All administrative
expenses of the Plan are paid by UAL.
(7) Federal Income Tax
Under existing federal
income tax laws, the Plan is not subject to federal income tax. Any
dividend income is taxable to the participants upon distribution and receipt.
When any shares of stock or rights acquired under the Plan are sold by
or for a participant, any gain or loss must be recognized by that participant.
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