Exhibit 10.1
September 3, 1998
Xx. Xxxxx X. Xxxxxxxx
c/o Northwest Airlines, Inc.
0000 Xxxxxxxxx Xxxxx
Xx. Xxxx, XX 00000
Dear Xxx:
As we have discussed, you have stated your intention to resign from
Northwest Airlines, Inc. (the "Company") and its affiliates. The purpose of
this letter is to describe the various agreements that have been reached
between you and the Company regarding your resignation and to further
describe our respective obligations thereafter.
1. You are resigning from all your positions with the Company and its
affiliates, including but not limited to your positions as Executive Vice
President and Chief Financial Officer of the Company, effective on the date
hereof (the "Effective Date"), but you shall remain an employee (without any
obligation to render any services) of the Company, and receive your currently
applicable base salary and employee benefits, through October 14, 1998 (the
"Termination Date").
2. The Company shall pay you, as soon as practicable after the
Termination Date, all accrued and unpaid base salary and any bonus, to the
extent provided by Subsection (a)(i) through (iii) of the description of your
termination benefits contained in the letter from Xxxx Xxxxxxxxx to you dated
October 14, 1996 (the "Xxxxxxxxx Letter").
3. The Company agrees to pay you, on the sixteenth day following the
date hereof, a lump sum cash amount of $1,920,000.
4. For the period commencing on the Termination Date and ending on the
first anniversary thereof the Company agrees to:
a. continue to provide you, your spouse and your eligible children
with Company health insurance; your eligibility for COBRA benefits shall
commence on such first anniversary; PROVIDED, HOWEVER, that your health
insurance coverage shall cease if you obtain new employment; and
b. continue to provide you, your spouse and dependent children with
officer level - F1 boarding priority.
5. You shall be entitled to rights under Northwest's Executive Life
Insurance Plan (as described in Section 7 of the letter from Xxxxxxxxxxx X.
Xxxxxxx to you dated October 14, 1996 (the "Xxxxxxx Letter")), subject to the
terms and conditions thereof. The Company agrees to promptly assign to you
all rights and interest therein and thereunder.
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6. The Company agrees to pay you any payments or other rights or
benefits you may be otherwise entitled to receive pursuant to the terms of
any retirement, pension or other employee benefit or compensation plan (the
"Employee Plans") maintained by the Company at the time or times provided
therein. For purposes of the Employee Plans, as well as for purposes of the
noncompete provisions of the Xxxxxxxxx Letter, you shall be treated as
terminated by the Company other than for Cause.
7. As to the non-qualified stock options granted to you and referred to
in Sections 3 and 4 of the Xxxxxxx Letter, the parties agree as follows:
a. as to the option for 500,000 shares, 40% or 200,000 have vested
on or before the Termination Date, and you shall have a one (1) year
period from the Termination Date to exercise such vested options (this
clause is intended to, and shall, modify Section 3.2(d) of your 500,000
option Non-Qualified Stock Option Agreement dated October 14, 1996); and
b. as to the option for 94,118 shares, 100% have vested on or
before the Termination Date, and you shall have a two (2) year period
from the Termination Date to exercise such vested options.
8. If you move from your current primary residence to a location more
than 50 miles therefrom, prior to the second anniversary of the Termination
Date, the Company agrees to (i) reimburse you for your reasonable moving
and relocation costs (comparable to those under Section 9 of the Xxxxxxx
Letter) and (ii) pay you the actual amount of any loss, if any, on the sale
of such residence prior to such second anniversary. For purposes of this
Agreement, "loss" shall mean the excess of (i) your purchase price for such
primary residence plus $350,000 over (ii) the selling price of the residence.
9. Notwithstanding the provisions of the Xxxxxxx Letter, commencing on
the Termination Date, you shall be entitled to dispose of the Purchased
Common Stock (as defined in the Xxxxxxx Letter). You agree, however, that you
must continue to pay, pursuant to Section 4(b) and, if applicable, Section
4(c) of the Xxxxxxx Letter, $9,167 (or if applicable, your appropriate
pro-rata share thereof) on the last day of each month for so long as the
Stock Option Grant (as defined in the Xxxxxxx Letter) remains unexercised.
10. You and the Company agree to abide to the following terms and
conditions for a two year period commencing on the Termination Date:
a. You will not directly or indirectly make any disparaging
statement, or release any information, or encourage others to make
any statement or release any information that is designed to
embarrass or criticize the Company, its affiliates, associates,
directors or shareholders, or its personnel policies and practices
to any of the Company's customers, competitors, employees, former
employees, or the press or other media in any country; PROVIDED that
it will not be a violation of this paragraph 10(a) for you to make
truthful statements when required to do so by a court of law, by
any governmental agency having supervisory authority over the business
of the
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Company or by any administrative or legislative body (including a
committee thereof) with the jurisdiction to order you to divulge,
disclose or make accessible such information. Similarly, the Company,
for itself and its affiliates and subsidiaries, agrees during such period
not to, directly or indirectly, make any disparaging statement, or
release any information, or encourage any others to make any statement
or release any information that is designed to embarrass or criticize you
or your performance of your duties and responsibilities while employed
with the Company.
b. You will not engage in any contact with the media with respect
to the Company, its affiliates, their employees, their shareholders or
their directors without the prior written consent of the Company,
except that the parties agree that the Company shall promptly issue the
attached press release.
11. You shall not be required to mitigate the amount of any payment
provided under this Agreement by seeking other employment or otherwise, and
no such payment shall be offset or reduced as a result of your obtaining new
employment.
12. All payments due under this Agreement shall be subject to
withholding taxes and any other applicable deductions as required by law and
may be reduced accordingly.
13. You and the Company agree that this Agreement shall be binding upon
and inure to the benefit of your heirs and representatives and the assigns
and successors of the Company, but neither this Agreement nor any rights or
obligations hereunder shall be assignable or otherwise subject to
hypothecation by you (except by will or by operation of the laws of intestate
succession) or by the Company, except that the Company may assign this
Agreement to any successor (whether by merger, purchase or otherwise) to all
or substantially all of the stock, assets or businesses of the Company and,
in such event, the Company shall require such successor to assume expressly
and agree to perform this Agreement in the same manner and to the same extent
that the Company would be required to perform it if no such succession had
taken place.
14. This Agreement shall contain the entire understanding between you
and the Company with respect to your employment and supersedes in all
respects any prior or other agreement or understanding between you and the
Company or any affiliate with respect to your employment.
15. You agree to execute a release substantially in the form attached
hereto as a condition to the receipt of any payment hereunder; the Company
agrees to execute such release as indicated thereon.
16. This Agreement will be construed and interpreted in accordance with
the laws of the State of Minnesota without regard to rules pertaining to
conflict of laws.
17. This Agreement may be executed in counterparts.
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18. Through December 31, 1998, the Company shall provide you with an
appropriate off-site office and a secretary (such secretary shall continue as
an employee of the Company during such period and shall continue to receive
his or her salary and benefits).
19. The Company shall continue to provide to you all indemnity and
related rights you presently have under the Company's and its Parent's
charter, by-laws, agreements or insurance; all such rights shall continue
after the Termination Date.
20. This Agreement may be executed in counterparts, each of which may
be deemed an original, but all of which together may be construed as one and
the same original.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first written above.
NORTHWEST AIRLINES, INC.
/s/ Xxxxxxx X. Xxxxxxxxx
---------------------------
By:
Title:
/s/ Xxxxx X. Xxxxxxxx
---------------------------
Xxxxx X. Xxxxxxxx
3 Sept. 98
GENERAL RELEASE
WHEREAS, Xx. Xxxxx X. Xxxxxxxx ("Executive") has been employed by
Northwest Airlines, Inc. ("Northwest"); and
WHEREAS, Executive's employment with Northwest has terminated; and
WHEREAS, Executive and Northwest have reached a full and final
compromise and settlement of all matters, disputes, causes of action, claims,
contentions and differences between them and Northwest's divisions, merged
entities and affiliates, subsidiaries, parents, branches, predecessors,
successors, assigns, officers, directors, trustees, employees, agents,
stockholders, administrators, representatives, attorneys, insurers or
fiduciaries, past, present or future (the "Releases Parties"), including but
not limited to any and all claims arising from or derivative of
Executive's employment with Northwest and his termination from employment
with Northwest;
WHEREAS, in return for Northwest performing its obligations as provided
for herein and as set forth in the two letter agreements by and between
Northwest and Executive dated as of October 14, 1996 and the two Option
Agreements defined below and the settlement letter agreement between the
Executive and Northwest dated the date hereof (collectively, the
"Agreement"), Executive will execute and comply fully with the terms of this
General Release (the "Release");
WHEREAS, Executive (i) understands that in executing the Release he is,
INTER ALIA, giving up rights and claims under the Age Discrimination in
Employment Act of 1967, as amended, 29 U.S.C. Section 621 ET SEQ. ("ADEA"),
and (ii) has been given a period of not less than twenty-one (21) days within
which to consider this Release;
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NOW THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, Executive and Northwest agree and covenant as follows:
1. By entering into this Release, the Released Parties do not admit,
and each specifically denies any liability, wrongdoing or violation of any
law, statute, regulations, agreement or policy.
2. Executive's employment with Northwest shall terminate effective
October 14, 1998.
3. In consideration of the obligations of Executive as set forth in
this Release and the settlement letter agreement dated the date hereof, and
in full settlement and final satisfaction of any and all claims, contractual
or otherwise, which Executive had, has or may have against Northwest or the
Release Parties with respect to his employment, termination from employment
with Northwest, or otherwise arising on or prior to the date of execution of
this Release, Northwest shall pay to Executive the payments and benefits to
which Executive is entitled under the Agreement upon termination of
Executive's employment. This Release shall not pertain to any claim alleging
that Northwest has failed to comply with any obligations created by the
Release or that Northwest has failed to pay to Executive the payments and
benefits to which Executive is entitled under the Agreement upon termination
of Executive's employment.
4. (a) Executive, for and in consideration of the payments as set forth
in the Agreement and for other good and valuable consideration, hereby
releases and forever discharges, and by this release does release and forever
discharge, the Released Parties of and from all debts, obligations, promises,
covenants, collective bargaining obligations, agreements, contracts,
endorsements, bonds, controversies, suits or causes of action known or
unknown,
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suspected or unsuspected, of every kind and nature whatsoever, which may
heretofore have existed or which may now exist, including but not limited to
those arising under the ADEA, Title VII of the Civil Rights Act of 1964, as
amended, 42 U.S.C. Section 2000e ET SEQ., the Employee Retirement Income
Security Act of 1974, as amended, 29 U.S.C. Section 1001 ET SEQ., the
Americans With Disabilities Act, as amended, 42 U.S.C. Section 12101 ET SEQ.,
the Reconstruction Era Civil Rights Act, as amended, 42 U.S.C. Section 1981
ET SEQ., the Rehabilitation Act of 1973, as amended, 29 U.S.C. Section 701 ET
SEQ., the Family and Medical Leave Act of 1992, 29 U.S.C. Section 2601 ET
SEQ., the Minnesota Human Rights Act, Minn. Stat. Section 363.01 ET SEQ., and
any and all state or local laws regarding employment discrimination and/or
federal, state or local laws of any type or description regarding employment
as well as any claim for breach of contract, wrongful discharge, breach of
any express or implied promise, misrepresentation, fraud, retaliation,
violation of public policy, infliction of emotional distress, defamation,
promissory estoppel, invasion of privacy or any other theory or claim,
whether legal or equitable, including but not limited to any claims arising
from or derivative of Executive's employment with Northwest and Executive's
termination of employment with Northwest or otherwise. Executive acknowledges
that he has not been discriminated against on the basis of age, sex,
handicap, race, ethnicity, religion or any other protected class status.
(b) This Release shall not affect any present or future
indemnification obligations that Northwest and the Released Parties may have
to Executive pursuant to any charter, by-law, agreement or policy of
insurance. The Company agrees to continue to provide all such existing
indemnification rights and insurance coverage to and for the Executive to the
maximum extent permitted by law.
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(c) Pursuant to the two Non-Qualified Stock Option Agreements between
Executive and Northwest Airlines Corporation each dated October 14, 1996 (the
"Option Agreements"), Executive has a vested right to acquire 294,118 shares
of the Class A Common Stock of Northwest (the "Vested Options"). This Release
shall not affect Executive's rights under the Option Agreements with respect
to such Vested Options or to any shares of stock previously purchased
pursuant to such Vested Options, which rights shall continue to be governed
by the Option Agreements, as amended by the settlement letter agreement dated
the date hereof.
5. Executive covenants and agrees not to sue nor authorize any other
party, either governmental or otherwise, to file any grievances, arbitration
or commence any other proceeding, administrative or judicial, against the
Released Parties in any court of law or equity, or before any administrative
agency, with respect to any matter relating to this Agreement or to matters
occurring during Executive's employment with Northwest.
6. The Released Parties and Executive understand and agree that the
terms of this Release and the Agreement are confidential.
7. Executive agrees not to make any untruthful or disparaging
statements, written or oral, about Northwest, the Released Parties or
Northwest's personnel policies and practices to any of Northwest's customers,
competitors, suppliers, employees, former employees, or the press or other
media. Except as herein contemplated, Executive also agrees that he will not
voluntarily participate in any proceeding of any kind brought against the
Released Parties relating to this Agreement or to matters occurring during
Executive's employment with Northwest.
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8. (a) The parties agree that this Release should not be construed in
accordance with the laws of the State of Minnesota, exclusive of Minnesota
choice of law provisions.
(b) The parties agree that any and all further legal proceedings
between Executive and the Released Parties, whether arising under statute,
constitutions, contract, common law or otherwise, including the issue of
arbitrability, will be submitted for resolution exclusively pursuant to
arbitration under the rules of the American Arbitration Association and that
such arbitration will take place in Minneapolis, Minnesota. The parties
hereby waive their right to a trial of any and all claims arising out of this
Release or breach of this Release.
(c) Should any provision of this Release be found to be in violation
of any law, or ineffective or barred for any reason whatsoever, the remainder
of this Release shall be in full force and effect to the maximum extent
permitted by law.
9. Northwest and Executive agree to execute such other documents and to
take such other actions as maybe reasonably necessary to further the purposes
of this Release.
10. (a) Executive acknowledges and agrees that, in deciding to execute
this Release, he has had the opportunity to consult with legal, financial and
other personal advisors of his own choosing as he deems appropriate, in
assessing whether to execute this Release and that he has consulted legal
counsel. Executive represents and acknowledges that no representations,
statement, promise, inducement, threat or suggestion has been made by
Northwest or the released Parties to influence him to sign this Release
except such statements as are expressly set forth herein. Executive agrees
that he has been given a minimum of twenty-one (21) days within which to
consider the terms and effects of this Release insofar as
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it relates to settlement and release of potential claims under the ADEA, and
to consult with, and to ask any questions that he may have of anyone,
including legal counsel and other personal advisors of his own choosing, and
that he has executed this Release voluntarily and with full understanding of
its terms and effects.
(b) Executive has been informed of the right to rescind this release
as far as it extends to potential claims under Minn. Stat. Ch. 363
(prohibiting discrimination in employment) by written notice to the Company
within 15 calendar days following the execution of this Release. Executive
has also been informed of his right to revoke this Release as far as it
extends to potential claims under the Age Discrimination in Employment Act,
29 U.S.C. Section 621 ET SEQ., by informing the Company of his intent to
revoke this Release within seven calendar days following the execution of
this Release. To be effective, notice of rescission or revocation must be in
writing and must be delivered either by hand or by mail to Xxxxxxx Xxxxxxxxx,
Xx. Vice President, General Counsel and Secretary, Xxxxxxxxx Xxxxxxxx, Xxx.,
Xxxxxxxxxx X0000, 0000 Xxxxxxxxx Xxxxx, Xx. Xxxx, Xxxxxxxxx, 00000-0000,
within the 15-day period. If a notice of rescission or revocation is
delivered by mail, it must be: (i) postmarked with the 15 or 7 day period,
respectively, (ii) properly addressed to Xx. Xxxxxxxxx as set forth above,
and (iii) sent by certified mail return receipt requested. This Release shall
not become effective or enforceable until the 15 or 7 day periods described
above have expired. No payment shall be due, owing or paid by Northwest
unless and until this Release becomes effective.
11. This Release may not be changed or modified, except by a written
instrument signed by Executive and Northwest.
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/s/ Xxxxx X. Xxxxxxxx
------------------------------
(Employee's Name)
Address 0000 X. Xxxx Xxxxxxx Xxx.
Xxxxxxxxxxx, XX 00000
Date 3 Sept. 98
STATE OF MINNESOTA )
)ss
COUNTY OF DAKOTA )
On Sept. 3, 1998, between me personally came Xxxxx X. Xxxxxxxx to me
known and known to me to be the individual described in, and who executed,
the foregoing General Release, and duly acknowledged to me that he executed
the same
XXXXXXX X. XXXXX /s/ Xxxxxxx X. Xxxxx
NOTARY PUBLIC-MINNESOTA --------------------------------
DAKOTA COUNTY Notary Public
My Comm. Expires Jan 31, 2000
NORTHWEST AIRLINES, INC.
By /s/ Xxxxxxx X. Xxxxxxxxx
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Address
Date
