LETTER 35
Subject: Conditions and Covenants
Reference: Section 32 - Amendment of Agreement
LETTER OF AGREEMENT
between
NORTHWEST AIRLINES, INC.
and
FLIGHT ATTENDANTS
in the service of
NORTHWEST AIRLINES, INC.
as represented by
ASSOCIATION OF FLIGHT ATTENDANTS - CWA, AFL-CIO
THIS AGREEMENT is entered into by and between Northwest Airlines, Inc. a Minnesota
Corporation (the "Company") and the Flight Attendants in the service of Northwest Airlines,
Inc. as represented by the Association of Flight Attendants - CWA, AFL-CIO (the
"Union").
1. Conditions
Notwithstanding any provision to the contrary in this Agreement, the terms of the
new Flight Attendant Agreement ("2007 Flight Attendant Agreement")
contemplated by the AFA Restructuring Agreement shall become effective only
upon the occurrence of the following:
A. The Company implementing, through binding agreement, or legal unilateral
authority, revisions to (i) the labor contracts of the Company's other
unionized employees and (ii) the wages, benefits and working conditions of
the Company's non-union employees so that the aggregate revisions in (i)
and (ii) are reasonably projected to produce $1,126 million in average
annual savings in labor costs from January 1, 2006 through December 31,
2010 (excluding any implementation, severance, or separation program
costs). The aggregate savings shall exclude any net savings attributable to
pension plans but shall include the following: savings achieved as a result of
the current 1113/1114 restructuring negotiations; savings under the pilot
Bridge Agreement dated November 22, 2004; savings, net of outsourcing
costs, realized through imposition of terms imposed on AMFA represented
employees on August 19, 2005; savings from costs reductions imposed on
the Company's non-union employees;
B. Ratification of the 2007 Flight Attendant Agreement by the AFA
membership in accordance with the AFA Constitution and execution of the
2007 Flight Attendant Agreement by AFA;
C. Approval of the 2007 Flight Attendant Agreement by the Company's Board
of Directors, if required; and
D. Approval of the 2007 Flight Attendant Agreement by the Bankruptcy Court
and entry of an order of the Court in a form acceptable to the Company
authorizing the entry into this Agreement.
AFA may, at its discretion, waive the conditions in subparagraphs 1.A. and 1.B.,
above, but may not waive the conditions in subparagraphs 1.C. and 1.D., above.
2. Covenants
A. The Company agrees that it will not provide or agree to, without offering a
comparable arrangement to the AFA, (i) any profit sharing program, incentive
program, stock option plan, or any other form of financial return for any
unionized employees which, in the aggregate, net of any offsetting labor cost
savings, materially diminishes the value of the $1,126 million in average annual
savings in labor costs set forth in Paragraph 1 above, or (ii) any pension or
retirement plan benefits for any union employees which, in the aggregate, net
of any offsetting labor cost savings, materially diminish the value of the $1,126
million in average annual savings in labor costs set forth in Paragraph 1 above,
and which are materially more favorable than (i) the replacement plan provided
to Flight Attendants under this Letter of Agreement, and (ii) other Defined
Contribution Plans provided at other network carriers to the equivalent class or
craft of employees whose plan is being challenged as providing a materially
more favorable benefit. Should the Company's defined benefit plans terminate,
any savings in pension contribution costs generated by such termination shall
not be used to offset or refund the labor cost reductions causing any union to
fall below the required applicable labor cost reductions. Costs related to
severance or early separation programs will not be considered to diminish the
value of average annual labor costs savings. The Company shall provide
sufficient relevant information necessary to perform an audit of the terms
referred to herein. Disputes over any violation of this provision shall be resolved
pursuant to the Expedited Board of Adjustment Procedures contained in Section
1 of the AFA Agreement.
B. If in connection with the Company's labor cost restructuring process in Chapter
11, the Company concludes any agreement with the IAM, ALPA or AMFA on
matters related to equity compensation (other than the rights regarding
administrative or general unsecured claims agreed to by the parties) to be paid
to employees represented by any of those unions that is more favorable to
those unions than the agreement reached with AFA, those more favorable
terms shall be automatically applied (on a proportionate basis) to AFA
represented employees subject to AFA's agreement to concessions which are
comparable to those agreed to by such other union as part of the Company's
labor cost restructuring process in Chapter 11 and which occasioned the
Company's grant of equity compensation.
Agreed to on this 30th day of May, 2007
FOR NORTHWEST AIRLINES, INC. FOR THE ASSOCIATION OF FLIGHT
ATTENDANTS - CWA, AFL-CIO
/s/ Julie Hagen Showers /s/ Patricia A. Friend
Vice President Labor Relations International President, AFA-CWA
/s/ Jay Hong
MEC President, AFA-CWA
/s/ Lovey Offerle
Negotiations Committee, AFA-CWA
/s/ James Yung
Negotiations Committee, AFA-CWA
/s/ David Barrow West
Negotiations Committee, AFA-CWA
/s/ Bruce Retrum
Negotiations Committee, AFA-CWA
/s/ Mark L. Littleton
Senior Staff Negotiator, AFA-CWA