PAY is committed to reaching industry standard pay by the end of 2010, and continues to provide pay increases at regular intervals to reach this commitment. Next increase will occur on 1/1/09 of 3% to all steps on the scale. Top of scale hourly rate is $42.30 which is reached after 12 years. Starting 1/1/09, increases to $43.57. flight attendants do not have union dues. Additional Flight Leader pay per flight hour is $5.40 for Transoceanic A flights and $2.70 for Domestic, Latin American and Transoceanic B (or main cabin position). Contractual increases of 1% on 1/1/2009 and 1/1/2010, and 2% on 1/1/2011. The sum of these increases will not reach industry standard. Top of scale hourly rate is $39.76 which is reached after 15 years. Starting 1/1/09, increases to $40.16. Assuming a 75 hour month, union dues reduce this rate to $39.59 per hour effective 1/1/09. NW flight attendants pay an average of $43 monthly in union dues. Flight Leader pay is broken out between wide-body and narrow-body aircraft. NW main cabin coordinator position is unpaid on all flights. International Flight Leader pay per flight hour $5.13 for wide-body and $3.08 for narrow-body aircraft. Changing to $5.18 for wide-body and $3.11 for narrow-body on 1/1/09. Domestic Flight Leader pay per flight hour is $2.20 for wide-body and $1.69 for narrow-body aircraft. Changing to $2.23 for wide-body and $1.71 for narrow-body on 1/1/09. International override premium of $1.00 per flight hour. Starting 1/1/09, increases to $1.25 per flight hour. Language of Destination program (LOD) participants paid $1.35 per flight hour on each required language segment, even if LOD staffing requirement has been met. You do not have to hold the bid language position on the trip to receive the LOD premium. Per Diem pays $1.85 per hour for domestic and $2.40 per hour for international flights, including turns. CQ (recurrent) training paid at 2:45 per day. Other classroom training is paid at $12 per hour, and computer based training (CBT) paid at $10 per hour. Flight attendant receives $14.74 per hour for all ground holding time in excess of 1 hour with passengers, including the initial hour, prorated for each portion of an hour. No current international premium. Starting 1/1/09, increases to $1.25 per flight hour. No premium pay associated with LOD program. Per Diem pays $1.65 per hour for domestic and $1.85 per hour for international flights, excluding turns. Turns included starting 12/1/08. First 16 hours of government mandated training (i.e. recurrent training) are unpaid. Other classroom training is paid at 4:15 per day and computer based training (CBT) is paid at $5 per hour. Flight attendant receives $15 per hour for all Domestic ground holding time in excess of 1 hour with passengers. If international, flight attendant receives 50% pay and 50% credit for ground holding time in excess of 1 hour with passengers. Page 1 - Flight attendant Pay, Benefit & Work Rule Comparison, 11/20/2008 version 2
PROFIT SHARING 15% cash payout on profits of first $1.5 billion and 20% on profits over $1.5 billion. Starting 1/1/09, 20% profit sharing threshold will change to $2.5 billion of combined company profit. 10% cash payout if pretax margin is less than or equal to 10% and 15% payout on overage if greater than 10%. Profit sharing begins at first dollar of profit. Profit sharing begins after the first $1 million of profit. 2007 actual payout equaled 5.5% of pay. 2007 actual payout equaled 3.77% of pay. DL SHARED REWARDS AND NW PERFORMANCE INCENTIVES The program provides monthly incentive payouts based on performance in three operational areas. Goals can be achieved either through relative performance to the industry or by meeting or exceeding internal goals. The program provides quarterly incentive payouts. Goals can be achieved through operational performance relative to network carriers and internal divisional goals. Payout of $25 for meeting or exceeding one goal, $75 for two and $100 for three. Payout based on 0.5%, 1% or 1.25% of pay. Employees with higher salaries receive higher payouts. 2007 payout of $800 for flight attendants. 2007 payout averaged $403 for flight attendants. RETIREMENT 401(k) AND PENSION sponsors a Defined Benefit Pension Plan that was frozen during bankruptcy, but not terminated. This Plan will be unaffected by the merger. sponsors a Defined Benefit Pension Plan that was frozen during bankruptcy, but not terminated. This Plan will be unaffected by the merger. For on-going retirement benefits, sponsors a Defined Contribution Plan, to which contributes up to 7% of eligible earnings. contributes an amount equal to 2% of eligible earnings to your 401k account whether or not you contribute any money to the Plan. In addition, matches another 5% of your contributions dollar for dollar. For on-going retirement benefits, sponsors a Defined Contribution Plan, to which contributes between 3%-6% of eligible earnings based on combination of age and years of service, whether or not you contribute any money to the Plan. Investments are managed by employee at Fidelity, with a full range of investment options, in addition to Financial Engines investment advice services being added in January 2009. Investments are managed by employee at ING, with a set of core investment options and a brokerage account, in addition to Financial Engines investment advice services. Page 2 - Flight attendant Pay, Benefit & Work Rule Comparison, 11/20/2008 version 2
ACTIVE MEDICAL Employees contribute 22% of the cost on average. The dollar amount of premiums has not increased for the past 4 years. Account based plan design with 4 coverage options. Most popular medical option includes a company-provided account that pays the first $500 of medical cost. Unused account funds are rolled over from year to year. Under all plans, in-network preventive care covered at 100% with no deductibles or copays. Employees contribute 25% of the cost, with a 7% annual cap on the dollar amount of premium increases. PPO Plan design with 1 choice for coverage. In-network preventive care is covered at 90% with no deductible or copays. Employee is responsible for the remaining 10% cost. All options administered by UnitedHealthcare. Administered by Blue Cross Blue Shield. RETIREE MEDICAL Active employees do not subsidize cost of retiree health coverage for current retirees. Company does not provide retiree health subsidy. Active employee premiums help subsidize the cost for health coverage for current retirees. In addition, Company provides 50% retiree health subsidy for employees who retire at age 55 and with minimum of 23 years of service. Account based plan design with 4 choices for coverage. PPO Plan design with 1 choice for coverage. Under all plans, in-network preventive care covered at 100% with no deductibles or copays. In-network preventive care is covered at 90% with no deductible or copays. Employee is responsible for 10% of cost. LIFE INSURANCE & GROUP ACCIDENT INSURANCE New hires after January 1, 2009 receive companyprovided Basic Life Insurance with a payout of the greater of $50,000 or 1x base pay up to $250,000 maximum. Employees can purchase additional coverage through Optional Life Insurance (up to $1.5M for employee, $250,000 for spouse, and $20,000 for children). Employees can purchase up to $750,000 in Group Accident (AD&D) Insurance for employee and family coverage. Company-provided Basic Life Insurance provides a flat payout of $35,000. Employees can purchase additional coverage through Optional Life Insurance (up to $250,000 for employee, $50,000 for spouse, and $20,000 for children). Employees can purchase up to $350,000 in Group Accident (AD&D) Insurance for employee and family coverage. Employees can purchase up to $300,000 in Private Pilots Accident Insurance. No Private Pilots Accident Insurance is offered. Page 3 - Flight attendant Pay, Benefit & Work Rule Comparison, 11/20/2008 version 2
PASS TRAVEL Stand-by boarding priority based on date of hire, regardless of job classification. Stand-by boarding priority based first on job classification and then date of hire. Contract employees board after active and retired management. All employees pay flat $50 annual activation fee. Employees are eligible to travel in all classes of service, and no separate charges are required for employee or retiree travel, except for international taxes and fees. Contract employees pay upgrade fee for first class travel and retired contract employees pay service fees for all travel. Active and retired management pay no charges, except for international taxes and fees. Eligible pass riders include spouse/domestic partner, travel companion, dependent children, non-dependent children and two parents (at this time). Eligible pass riders include spouse/domestic partner, travel companion, dependent children and four parents (natural and stepparents are both allowed). Same Sex Domestic Partners are eligible for pass travel. Opposite Sex Domestic Partners not eligible (at this time). Same Sex Domestic Partners are eligible for pass travel. Opposite Sex Domestic Partners are eligible for pass travel. Confirmed space travel at 20% discount off of available fares (at this time). Confirmed space travel at 20% discount of the lowest published fare available, and a deeper discount with additional restrictions on the lowest published fare available. Buddy pass travel allowed on an unaccompanied basis. Buddy pass travelers must be accompanied by the employee, with certain exceptions. For standby travel, retirees board after active employees based on date of hire and continue their eligibility for the same free travel, pass riders, and buddy passes. For standby travel, retired management boards before active and retired contract employees. Retired contract board after active contract employees and pay service fee in all classes. NW retirees not eligible for travel companions, parents or buddy pass travel. HOLIDAYS 5 premium holidays per year. Flight attendants receive an additional $20 per hour flown on New Years Day, Independence Day, Thanksgiving Day, Christmas Day and New Years Eve. Flight attendants who work from Tuesday-Friday of Thanksgiving period, December 23-26 and/or December 30 January 2 receive priority travel holiday passes for a pass rider to accompany them on the trip(s). Flight attendants receive an additional $100 per day worked on Thanksgiving Day, Christmas Day, and New Years Day. In addition, flight attendants are eligible for $50 per day with Perfect Attendance from November 25-30 and December 23 January 3. No special passes provided for holiday travel. Page 4 - Flight attendant Pay, Benefit & Work Rule Comparison, 11/20/2008 version 2
VACATION Maximum of 35 vacation days per year for flight attendants hired prior to March 31, 1988. For others, maximum of 28 vacation days per year after 11 years of service. Maximum of 25 vacation days per year for flight attendants after 25 years of service. Incremental increases to maximum of 32 vacation days after 25 years of service in August 2010. Paid at 2:45 per day. Paid at 3:00 per day. No rollover or banking of vacation. Unused vacation is paid out at year end. No rollover or banking of vacation. Unused vacation is paid out at year end. Vacation accrued in current year becomes earned and gets used in the following year (get all your vacation at one time). Vacation accrued in current year becomes earned and gets used in the following year (get all your vacation at one time). DL PAID PERSONAL TIME & CERTIFIED TIME AND NW SICK TIME Maximum of 42 hours of Paid Personal Time per year. Maximum of 36 hours of sick time per year. Flight attendants have the flexibility to use PPT for any reason, not just personal illness. Can only be used for personal illness. Flight attendants can choose to receive a cash payout of unused PPT. In 2008, the average PPT payout was $650 per employee. In addition, employees receive a cash payout of unused time when you leave the company. Employees do not receive a cash payout of unused time. As an alternative to cash pay out, flight attendants can choose to rollover unused PPT up to 84 hrs maximum. Once that maximum is reached, flight attendants can then choose to rollover unused PPT hours to build Certified Time banks up to 1200 hours for 100% pay protection on full-time absences lasting over 7 calendar days when certified as disabled. Average Certified Time balance for flight attendants is 354 hrs. 1200 hrs maximum allowed in sick bank, with some grandfathered flight attendants with more time. Average sick time balance for flight attendants is 191 hrs. Certified Time benefit is paid based on average earnings over 12 month period. Sick time is paid based on incentive (base) rate of pay. While on approved leave, employees continue their While on paid sick status, employees continue their Page 5 - Flight attendant Pay, Benefit & Work Rule Comparison, 11/20/2008 version 2
OJI PAY Once PPT and Certified Time is exhausted, employees receive 66.67% OJI Pay on a tax free basis. Benefit is paid primarily through workers compensation, with additional benefits provided if employee would not otherwise receive at least 66.67% of pay on leave due to state worker s compensation rules. Can use sick time for pay protection and receive combination of Workers Compensation and/or sick leave. Any sick leave benefits are taxable. Company-provided OJI Pay continues for up to 26 weeks per injury with no limit on the number of occurrences. If flight attendant does not have sick time, employee only receives state workers compensation pay which may provide less than 66.67% depending on state maximum. While on approved leave, employees continue their Treated as COBRA event as soon as employee exhausts paid sick time. COBRA rates based on 102% of the cost or roughly 4 times higher than the active flight attendant contribution of 25% of cost. FAMILY MEDICAL LEAVE (FMLA) Minimum of 540 hrs to qualify for Company-provided FML. Minimum of 568 hrs to qualify for Company-provided FML. SHORT TERM DISABILITY (STD) 60% plan available for employee purchase. STD Benefits are paid tax-free, based on average earnings over 12 month period. Not Available. Employees who do not have banked time have no pay protection during their absence. Provides benefits for work related and non-work related claims. STD benefit not available for any claims. While on approved leave, employees continue their Treated as COBRA event as soon as employee exhausts sick time. COBRA rates based on 102% of the cost or roughly 4 times higher than the active flight attendant contribution of 25% of cost. Page 6 - Flight attendant Pay, Benefit & Work Rule Comparison, 11/20/2008 version 2
LONG TERM DISABILITY (LTD) 50% benefit (up to 60% with Buy-up). 70% benefit. Employees eligible for coverage at date of hire. Employees eligible for coverage after 12 months of employment. Company pays 100% of the premium cost. In addition, employees can decide to enroll in additional coverage to receive 60% pay protection. Employee pays 50% of the premium cost and enrollment is mandatory. Disability pay is based on average earnings over 12 month period. Disability pay is based on incentive (base) rate of pay. Provides benefits for work related and non-work related claims. 6 months own occupation definition to continue qualifying for benefits. Provides benefits for non-work related claims only. 24 months own occupation definition to continue qualifying for benefits. Employee uses PPT, Certified Time and STD for coverage until LTD begins after 180 day elimination period. Employee uses sick time for coverage until LTD begins after 90 day elimination period. While on approved leave, employees continue their COBRA event occurs as soon as employee reaches the earlier sick time exhaustion or LTD start date. COBRA rates based on 102% of the cost or roughly 4 times higher than the active flight attendant contribution of 25% of cost. Page 7 - Flight attendant Pay, Benefit & Work Rule Comparison, 11/20/2008 version 2
ADDITIONAL WORK RULES Flight attendants use PBS bidding system. Flight attendants use PBS bidding system. 45 hr monthly minimum bid, but no minimum after drops and swaps. Must have 540 hours annually to maintain company subsidy for active benefits (based on average of 45 hours per month). 70 hr monthly minimum bid that can vary each month. Can drop to 52 hr minimum with most trades, and to 0 hrs with drops and one way trades with another flight attendant. Jetway Trades (i.e. Partial Trip Trade) are allowed. Jetway Trades (i.e. Partial Trip Trade) are allowed. Maximum scheduled duty day limitation is 14 hours. Maximum scheduled duty day limitation is 13 hours. Increases to 14 hours for High Density Turns - single duty period that begins and ends in base greater than 8 block hours. Maximum rescheduled duty day limitation is 14 hours. Maximum increases to 16 hrs if minimum +1 staffing, or if DH segment begins or ends duty period and the working segments do not exceed 14 hrs. Flight attendant Option Off point begins at 16:01 hrs. Maximum rescheduled duty day limitation is 14 hours. Maximum increases to 15 hrs for High Density Turns. Flight attendant Option Off point begins at 15:01 hrs. Maximum scheduled international duty day limitation is 16 hours. Maximum increases to 20 hours for trips with greater than 12 block hrs. Maximum scheduled international duty day limitation is 13 hours. Maximum increases 14 hours for International High Density turns and to 20 hrs for nonstop trips greater than 11 block hrs. Maximum rescheduled international duty day limitation is 16 hours. For trips with greater than 12 block hours - the projected or actual maximum duty period allowable is the scheduled duty period plus 3 additional hours. Flight attendant Option Off point begins at scheduled duty plus 3:01 hrs. Maximum rescheduled international duty day limitation is 15 hours. For non-stops greater than 11 hours, limitation is the greater of duty plus 3 hours or 18 hours. Flight attendant Option Off point begins at 18:01 hrs or scheduled duty plus 3:00. For minutes under pay and rules, flight attendants receive greater of scheduled flight time or actual flight time by flight segment. For minutes under pay and rules, flight attendants currently receive greater of scheduled flight time or actual flight time by flight segment. NW has the right to offset based on actual flight segment, but has not done so to date. Commuters can use Managed Time Out (MTO) program when FA anticipates missing a scheduled trip due to problematic circumstances that occur within 24 hours of scheduled report. Flight attendant may pick up additional time if they do not want to use PPT. If the problem is commuter flight trouble, the expectation is that a primary and a backup flight with available seats have been tried. Commuters expected to check passenger loads 24-48 hours in advance, exhaust all other means, and call to report inability to commute at least 2 hours prior to scheduled departure. Unpaid. Flight attendant will be removed without pay or credit, but may pick up additional time. Page 8 - Flight attendant Pay, Benefit & Work Rule Comparison, 11/20/2008 version 2
Duty Rig - 1 for 2:00 Duty Rig - 1 for 2:00 (1 for 1:45 2200 0559) Trip Rig - 1 for 3:30 Trip Rig - 1 for 3:36 4:45 Average Duty Period 4:15 Duty Period (no average) No restrictions on swaps and pick-ups with other flight attendants, with the exception of not being to swap out of base. One-way trades can go down to zero, but cannot go over maximum by 10 hours. Swaps can t go below 52 or 10 hours over maximum. Swaps can occur out of base Flight attendant can pick up open time in another base. Flight attendant cannot pick up open time in another base. A-Days (reserve days) are awarded in reverse seniority order by base until the monthly operational requirement is met. If operationally required, flight attendants hired prior to January 2008 have 3 A-Days and those hired after January 2008 have 6 A-Days. Exception: A-Day block duration may be amended to ensure operational coverage due to atypical trips. For example: The HLS AFP only has 1 day trips therefore only needing 1 day blocks. NYC has an 8 day trip requiring one 8 day A-Day block per day. Flight attendant bid defaults reserve by seniority (full month reserve). Page 9 - Flight attendant Pay, Benefit & Work Rule Comparison, 11/20/2008 version 2