Common use of Continuous Improvement Adjustment Clause in Contracts

Continuous Improvement Adjustment. The Continuous Improvement Adjustment shall be an amount between 0 and 1 percent each year. The adjustment shall be determined jointly between the Company and the Union at the Headquarters Level, based on meeting or exceeding its targets for On-time Performance, Productivity, Safety and Cost reduction (0.25 percent increase for meeting each target). Targets for each continuous improvement metric shall be adjusted annually based on actual annual performance for that metric from the prior year, as well as current operational requirements. Notwithstanding the Annual Adjustment Factor referenced above, should it be deemed necessary in order to adjust to industry-standard, maintain competitiveness with other air carriers, or address recruitment/retention challenges on any aircraft type covered by this Agreement, Morningstar may vary the annual Extraordinary Adjustment (C) upward or downward as deemed necessary, in an amount no more than double the sum of the Annual Adjustment Factor (Base Adjustment (A) plus Continuous Improvement Adjustment (B)), subject to mutual agreement by the Union. Wages will be adjusted by a percentage equal to the sum of the Base Adjustment and the Continuous Improvement Adjustment plus or minus any Extraordinary Adjustment (see Table 1). Base Adjustment Continuous Improvement Adjustment Extraordinary Adjustment Total Annual Adjustment (A) (B) (C) (D) OTP Productivity Safety Cost Reduction Annual % change in CPI but not less than 2% annually 0 or 0.25 0 or 0.25 0 or 0.25 0 or 0.25 +/– % A = Annual % change in CPI in accordance with a) above B = 0.25% for meeting each target (OTP, Productivity, Safety, Cost Reduction) C = +/– an amount not to exceed A+B D = Total Annual Adjustment The adjustment shall commence in the first pay period following the Annual Adjustment Date, and on the applicable anniversary date thereafter. April 1 of each year shall be the Annual Adjustment Date.

Continuous Improvement Adjustment. The Continuous Improvement Adjustment shall be an amount between 0 and 1 percent each year. The adjustment shall be determined jointly between the Company and the Union at the Headquarters Level, based on meeting or exceeding its targets for On-time Performance, Productivity, Safety and Cost reduction (0.25 percent increase for meeting each target). Targets for each continuous improvement metric shall be adjusted annually based on actual annual performance for that metric from the prior year, as well as current operational requirements. Notwithstanding the Annual Adjustment Factor referenced above, should it be deemed necessary in order to adjust to industry-standard, maintain competitiveness with other air carriers, or address recruitment/retention challenges on any aircraft type covered by this Agreement, Morningstar may vary the annual Extraordinary Adjustment (C) upward or downward as deemed necessary, in an amount no more than double the sum of the Annual Adjustment Factor (Base Adjustment (A) plus Continuous Improvement Adjustment (B)), subject to mutual agreement by the Union. Wages will be adjusted by a percentage equal to the sum of the Base Adjustment and the Continuous Improvement Adjustment plus or minus any Extraordinary Adjustment (see Table 1). Base Adjustment Continuous Improvement Adjustment Extraordinary Adjustment Total Annual Adjustment Adjustment (A) (B) (C) (D) OTP Productivity Safety Cost Reduction Annual % change in 0.25 0.25 CPI but not less than 2% annually 0 or 0.25 0 or 0.25 0 or 0.25 0 or 0.25 +/– % A = Annual % change in CPI in accordance with a) above B = 0.25% for meeting each target (OTP, Productivity, Safety, Cost Reduction) C = +/– an amount not to exceed A+B D = Total Annual Adjustment The adjustment shall commence in the first pay period following the Annual Adjustment Date, and on the applicable anniversary date thereafter. April 1 of each year shall be the Annual Adjustment Date.annually