MANAGEMENT COMPENSATION AGREEMENT
between
NORTHWEST AIRLINES, INC.
and
XXXXXXX X. XXXXXXXXX
dated as of
September 1, 1996
MANAGEMENT COMPENSATION AGREEMENT
MANAGEMENT COMPENSATION AGREEMENT made as of the 1st day of September,
1996 between Northwest Airlines, Inc., a Delaware corporation (the "Company")
and Xxxxxxx X. Xxxxxxxxx (the "Executive").
PREAMBLE
The Company and Executive previously entered into a Management
Compensation Agreement dated as of December 1, 1994 (the "Prior Agreement").
As of the date hereof, the Company and Executive have agreed to replace the
Prior Agreement with this Agreement, which shall supersede the Prior
Agreement in all respects.
In consideration of the foregoing and of the respective covenants and
agreements herein contained, the Company and Executive have agreed as follows:
1. TERMS OF EMPLOYMENT.
1.1 EMPLOYMENT. The Company agrees to continue to employ Executive, and
Executive agrees to continue to serve the Company, on the terms and
conditions set forth herein.
1.2 POSITION AND DUTIES. Executive shall continue to have his powers and
duties as on the Effective Date and shall have such other powers and duties
as may from time to time be prescribed by the Board, provided that such
powers and duties are consistent with or represent a promotion from
Executive's duties as of the Effective Date, unless otherwise consented to in
writing by Executive; provided, however, as long as Executive retains a
substantial portion of his then current oversight responsibility, the Board
shall be permitted to transfer a portion of Executive's oversight
responsibility without the consent of Executive. Executive shall devote
substantially all his working time and efforts to the business and affairs of
the Company and its subsidiaries.
2. COMPENSATION.
2.1 BASE SALARY. Executive's Base Salary shall be his annual base salary
in effect on the Effective Date, as increased thereafter by the Company.
Executive's Base Salary in effect from time to time may only be reduced in
connection with a Company-wide base wage reduction, by an amount not to
exceed 20% of Base Salary in effect on the date of such Company-wide wage
reduction. For purposes of calculating any other payments or benefits
hereunder (except as specified in Section 2.4) any reductions in Base Salary
shall be disregarded. Executive's Base Salary shall be payable in accordance
with the Company's normal payroll policies.
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all pre-retirement death benefits payable to Executive's spouse under the
Company's qualified pension plan or a supplemental executive retirement plan.
3. OTHER BENEFITS.
3.1 AIRLINE PASS. Executive is entitled to receive a lifetime airline
pass for the personal use of such Executive and his spouse and children so
long as spouses and children of employees generally are eligible for
nonrevenue travel pursuant to the Company's pass policies (hereinafter,
"Eligible Individuals"). Such airline pass (the "Airline Pass") shall entitle
Executive and Eligible Individuals to travel on regularly scheduled Northwest
domestic and international flights, subject to charges then applicable to
senior executives of the Company and their dependents, with boarding priority
of (i) F-1 or the equivalent thereof for ten years from and after the date
such pass is issued, (ii) Y-1/F-2 or the equivalent thereof for the next
succeeding ten years and (iii) 2-R or the equivalent thereof after the
aggregate twenty-year period described in clauses (i) and (ii) above. Each
Executive shall be responsible for any personal income tax liability arising
from such pass travel. The Airline Pass shall be issued to Executive upon
Executive's termination of employment with the Company; provided, however,
that all benefits under this Section 3.1 shall immediately and permanently
cease in the event Executive is or becomes, at any time thereafter, an
employee of any of the top five airlines in the United States (other than the
Company) ranked by revenue passenger miles (the "Top Five Airlines").
3.2 OTHER MEDICAL BENEFITS. In the event Executive remains an employee
of the Company from the date of this Agreement to September 1, 1998,
Executive and his covered dependents (only as long as they shall remain
dependents) shall be entitled to medical coverage for the life of Executive
and his spouse; provided, however, if and for so long as Executive is
employed by another employer, medical coverage hereunder will become
secondary to any coverage provided by the new employer.
4. TERMINATION OF EMPLOYMENT
4.1 UPON DEATH. Executive's employment hereunder shall terminate upon
his death.
4.2 BY THE COMPANY. The Company may terminate Executive's employment
hereunder at any time with or without Cause.
4.3 BY THE EXECUTIVE. Executive may terminate his employment hereunder
at any time for any reason.
4.4 NOTICE OF TERMINATION, PAYMENTS. Any termination of Executive's
employment hereunder (other than by death) shall be communicated by 30 days
advance written Notice of Termination
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by the terminating party to the other party of this Agreement; provided that
no advance Notice of Termination of Executive for Cause by the Company is
required. Unless otherwise provided in Section 5, any amounts owed by the
Company to Executive pursuant to Section 5 shall be paid on the Date of
Termination.
5. PAYMENTS IN THE EVENT OF TERMINATION OF EMPLOYMENT.
5.1 PAYMENTS IN THE EVENT OF TERMINATION BY THE COMPANY FOR CAUSE OR
VOLUNTARY TERMINATION BY EXECUTIVE. Except as provided in Section 5.3, if
Executive's employment hereunder is terminated by the Company for Cause or by
Executive other than for Good Reason, the Company shall pay Executive (a) his
accrued and unpaid Base Salary through the Date of Termination and (b) any
payments or other rights or benefits Executive may be otherwise entitled to
receive pursuant to the terms of (i) any retirement, pension or other
employee benefit or compensation plan maintained by the Company at the time
or times provided therein or (ii) Sections 2.6 and 3 hereof.
5.2 PAYMENTS IN THE EVENT OF ANY OTHER TERMINATION OF EMPLOYMENT. Except
as provided in Section 5.3, if Executive's employment hereunder is terminated
by the Company other than for Cause, as a result of death or Disability or by
Executive for Good Reason:
(a) The Company shall pay Executive (i) his accrued and unpaid Base
Salary through the Date of Termination, (ii) any bonus under the Key
Employee Cash Incentive Bonus Program, or any successor annual bonus
plan, (the "Incentive Bonus") for any calendar year ended before the
Date of Termination, (iii) a pro rata share (based on days employed
during the applicable year) of the Incentive Bonus Executive would
otherwise have received with respect to the year in which the Date of
Termination occurs, payable at the time the Incentive Bonus would
otherwise be payable to Executive; provided, however, that 100% of the
Incentive Bonus shall be determined solely with reference to the
financial performance of the Company for the year (based on the goals
previously established with respect thereto) (rather than a portion of
the Incentive Bonus determined on the basis of individual performance);
provided, further, in the event that Company's performance exceeds 100%
of the financial performance target for the year, that portion of the
Incentive Bonus that would have, but for this Section 5.2(a), related to
the achievement of the individual performance target shall be 100% and
(iv) any payments or other rights or benefits Executive may be otherwise
entitled to receive pursuant to the terms of (x) any retirement, pension
or other employee benefit or compensation plan maintained by the Company
at the time or times provided therein or (y) Sections 2.6 and 3 hereof.
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(b) In addition to the compensation and benefits described in
Section 5.2(a):
(i) The Company shall pay Executive a lump sum amount equal to
two times the sum of (i) Executive's Base Salary and (ii) the target
Incentive Bonus for Executive with respect to the year in which the
Date of Termination occurs (or if no target has been set for that
year, the target Incentive Bonus for the immediately preceding year).
(ii) Executive's pension shall vest with respect to his years of
employment with the Company and any subsidiary of the Company. In
addition, irrespective of Executive's actual full years of employment
from March 25, 1994 through his termination under this Section 5.2,
Executive shall be granted service credit as if he were an employee
of Company for the number of full years necessary to achieve the
maximum additional accruals under Section 2.6(a) herein and
Section 4.1.1(a)(iii) of the SERP; provided, however, that any SERP
benefit shall continue to be subject to Section 7 of the SERP. Any
such vested pension benefits which cannot be paid under the Company's
qualified pension plan shall be paid directly by the Company.
(iii) Executive and his covered dependents (only so long as
they shall remain dependents) shall be entitled to medical coverage
for the life of Executive and his spouse; provided, however, if
Executive is employed by another employer, medical coverage hereunder
will become secondary to any coverage provided by the new employer.
With regard to group life insurance and group disability insurance,
until the earlier of the second anniversary of Executive's Date of
Termination or the date Executive is employed by a new employer,
Executive, his dependents, beneficiaries and estate shall be entitled
to all benefits under such group life insurance and group disability
insurance as if Executive were still employed by the Company hereunder
during such period. If any such benefits cannot be provided to
Executive for any reason, the Company shall pay to Executive, or pay
Executive the cost of obtaining, such benefits.
(c) Executive shall not be required to mitigate the amount of any
payment provided for in this Section 5.2 by seeking other employment or
otherwise, and no such payment shall be offset or reduced as a result of
Executive obtaining new employment.
(d) Notwithstanding anything else to the contrary in this
Agreement, the Company's obligation to make the payments provided for in
Sections 5.2(a)(iii) and 5.2(b)(i),
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(ii) and (iii) is expressly conditioned upon the execution and delivery of a
release in the form attached hereto as Appendix A.
5.3 PAYMENTS FOR CERTAIN TERMINATIONS OF EMPLOYMENT AFTER A CHANGE IN
CONTROL. If Executive elects to terminate his employment for any reason
during the six month period commencing on the second anniversary of the
Change in Control, or in the event of termination by the Company other than
for Cause or termination by Executive for Good Reason within two years after a
Change in Control, Executive shall receive all of the payments, and shall be
accorded all of the rights, set forth in Section 5.2. All other terminations of
Executive's employment shall be governed by Sections 4 and 5 of this Agreement
irrespective of a Change in Control.
5.4 EXERCISE TAX.
(a) If any payment or distribution by the Company to or for the benefit
of Executive (whether paid or payable pursuant to this Agreement or
otherwise, but determined without regard to any additional payments required
under this Section 5.4 (a "Payment")) is subject to the excise tax imposed by
Section 4999 of the Code or any interest or penalties thereon (together the
"Excise Tax") then Executive shall be entitled to an additional payment (a
"Gross-Up Payment") in an amount such that after payment by Executive of all
taxes including, without limitation, any income taxes (together with any
interest or penalties thereon, the "Additional Income tax") or any Excise Tax,
imposed upon the Gross-Up Payment Executive retains an amount of the Gross-up
Payment equal to the Excise Tax imposed upon the Payments.
(b) Subject to Section 5.4(c), all determinations required to be made
under this Section 5.4, including whether a Gross-Up Payment is required and
the amount of such Gross-Up Payment, shall be made by the firm of independent
public accountants selected by the Company to audit its financial statements
(the "Accounting Firm") which shall provide detailed supporting calculations
both to the Company and executive within fifteen (15) business days after the
receipt of notice from Executive that there has been a Payment, or such
earlier time as is requested by the Company. All fees and expenses of the
Accounting Firm shall be borne solely by the Company. Any Gross-Up Payment,
as determined pursuant to this Section 5.4, shall be paid to Executive within
five (5) business days after the receipt of the Accounting Firm's
determination. Any determination by the Accounting Firm shall be binding upon
the Company and Executive. As a result of the uncertainty in the application of
Section 4999 of the Code at the lime of the initial determination by the
Accounting Firm hereunder, it is possible that additional Gross-Up payments
should have been made by the Company (an "Underpayment"). If the Company
exhausts its remedies pursuant to Section 5.4(c) and Executive thereafter is
required to make a payment of any Excise Tax, the accounting Firm shall
determine the amount of the Underpayment that has occurred and any such
Underpayment shall be promptly paid by the Company to or for the benefit of
Executive.
(c) Executive shall notify the Company in writing of any claim by the
Internal Revenue Service that, if successful, would require the payment by
the Company of the Gross-Up Payment. Such notice shall be given as soon as
practicable but no later than ten (10) business days after Executive knows of
such claim and shall appraise the Company of the nature and date of requested
payment of such claim. Executive shall not pay such claim before the earlier of
(x) the date thirty (30) days after Executive's notice to the Company or (y) the
date on which payment of taxes with respect to such claim is due. If the Company
notifies Executive in writing prior to the expiration of such period that it
desires to contest such claim, Executive shall:
(i) give the Company any reasonable requested information relating
to such claim;
(ii) take such action in connection with contesting such claim as
the Company shall reasonably request in writing from time to time,
including, without limitation, accepting legal representation with respect
to such claim by an attorney reasonably selected by the Company;
(iii) cooperate with the Company in good faith in order to
effectively contest such claim; and
(iv) permit the Company to participate in any proceedings relating
so such claim; provided, however that the Company shall bear and pay
directly all costs and expenses (including additional interest and
penalties) incurred in connection with such contest and shall indemnify
and hold such Executive harmless, on an after-tax basis, for any Excise Tax
or additional Income Tax imposed as a result of such representation and
payment of costs and expenses. Without limiting this Section 5.4(c), the
Company shall control all proceedings taken in connection with such contest
and, at its sole option, may (1) pursue or forgo any and all
administrative appeals, proceedings, hearings and conferences with the
taxing authority in respect of such claim and (2) either direct Executive
to pay the tax claimed and xxx for a refund or contest the claim in any
permissible manner. Executive agrees to prosecute such contest to a
determination before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as the Company shall
determine; provided, however, that if the Company directs such Executive to
pay such claim and xxx for a refund, the Company shall advance the amount
of such payment to Executive, on an interest-free basis, and shall
indemnify and hold Executive harmless, on an after-tax basis, from any
Excise Tax or Income Tax imposed with
respect to such advance; and further provided that any extension of the
statute of limitations for the taxable year of Executive with respect to
which such contested amount is claimed to be due is limited to issues with
respect to which a Gross-Up Payment would be payable hereunder and
Executive shall be entitled to settle or contest any other issue raised by
the Internal Revenue Service or any other taxing authority.
(d) If, after the receipt by Executive of any amount advanced by the
Company pursuant to Section 5.4(c), Executive becomes entitled to receive
any refund with respect to such claim, executive shall (subject to the
Company's complying with the requirements of Section 5.4 (c)) promptly pay
to the Company the amount of such refund (together with any interest paid
or credited thereon after taxes applicable thereto). If, after the receipt
by Executive of an amount advanced by the Company pursuant to
Section 5.4(c), a determination is made that such Executive shall not be
entitled to any refund with respect to such claim and the Company does not
notify Executive in writing of its intent to contest such denial of refund
prior to the expiration of thirty days after such determination, then such
advance shall be forgiven and shall not be required to be repaid and the
amount of such advance shall offset, to the extent thereof, the amount of
any Gross-Up Payment required to be paid.
6. CONFIDENTIALITY; NON-COMPETE.
While employed by the Company and thereafter, Executive shall not
disclose any confidential information either directly or indirectly, to
anyone (other than the Company, its employees and advisors), or use such
information for his own account, or for the account of any other person or
entity, without the prior written consent of the Company or except as
required by law. This confidentiality covenant has no temporal or
geographical restriction. Upon termination of this Agreement, Executive shall
promptly supply to the Company all property and any other tangible product or
document which has been produced by, received by or otherwise submitted to
Executive during or prior to his term of employment, and shall not retain any
copies thereof.
Executive acknowledges that his services are of special, unique and
extraordinary value to the Company. Accordingly, in the event Executive
resigns without Good Reason or is terminated for Cause during the term
hereof, Executive shall not at any time prior to the first anniversary of the
Date of Termination become an employee, consultant, officer, partner or
director of any air carrier which competes with the Company (or any of its
affiliates) or have any significant interest (I.E., 10% or more of the voting
stock) in any such air carrier.
Executive agrees that any breach of the terms of this Section 6 would
result in irreparable injury and damage for which there would be no adequate
remedy at law, and that, in the event of said breach or any threat of breach,
the Company shall be entitled to an immediate injunction and restraining
order to prevent such breach or threatened breach, without having to prove
damages, in addition to any other remedies to which the Company may be
entitled at law or in equity. Executive further agrees that the provisions of
the covenant not to compete are reasonable. Should a court determine,
however, that any provision of the covenant not to compete is unreasonable,
either in period of time, geographical area, or otherwise, the parties hereto
agree that the covenant should be interpreted and enforced to the maximum
extent which such court deems reasonable. The provisions of this Section 6
shall survive any termination of this Agreement and Executive's term of
employment. The existence of any claim or cause of action or otherwise, shall
not constitute a defense to the enforcement of the covenants and agreements
of this Section 6.
7. SUCCESSORS AND ASSIGNS.
(a) This Agreement shall bind any successor to Significant Assets,
whether by purchase, merger, consolidation or otherwise, in the same manner
and to the same extent that the Company would be obligated under this
Agreement if no such succession had taken place. Notwithstanding that a
successor to Significant Assets becomes bound to this Agreement, the Company
shall continue to be liable for the obligations hereunder as a guarantor. In
any agreement providing for succession to Significant Assets, the Company
shall cause each and every successor expressly and unconditionally to assume
and agree to perform the Company's obligations under this Agreement.
(b) In the event that another air carrier directly or indirectly
acquires Significant Assets, the Company shall cause such airline to provide
Executive and Eligible Individuals with pass privileges equivalent to those
provided under the Airline Pass described in Section 3.1.
(c) This Agreement and all rights of Executive hereunder shall inure to
the benefit of and be enforceable by, Executive's personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devises and legatees.
8. TERMS.
The term of this Agreement shall commence on the Effective Date and end
upon the Executive's termination of employment. The rights and obligations of
the Company and Executive shall survive the termination of this Agreement to
the extent necessary to give effect to the terms hereof.
9. NOTICES.
Notices and all other communications provided for in this Agreement
shall be in writing and shall be deemed to have been duly given when
delivered to and mailed by United States mail, addressed; (a) if to
Executive, Xxxxxxx X. Xxxxxxxxx, 0000 Xxxxxxx Xxxxxx Xxxxx, Xxxxxxxxxxx,
Xxxxxxxxx 00000, and
(b) if to the Company, c/o Northwest Airlines, Inc., 0000 Xxxxxxxxx
Xxxxx, Xx. Xxxx, Xxxxxxxxx 00000-0000, Attention: General Counsel, or to such
other address as may have been furnished in writing.
10. COUNSEL FEES AND INDEMNIFICATION.
(a) The Company shall pay, or promptly reimburse on an as-incurred basis
to Executive, the reasonable fees and expenses of Executive's legal counsel
for its services rendered in connection with, Executive's enforcement of this
Agreement provided, however, that if Executive institutes any proceeding to
enforce this Agreement and the judge, arbitrator or other individual
presiding over the proceeding affirmatively finds that Executive instituted
the proceeding in bad faith, Executive shall pay all costs and expenses,
including attorney's fees, of Executive and the Company.
(b) The Company shall indemnify and hold Executive harmless, to the
maximum extent permitted by law, against judgments, fines, amounts paid in
settlement and reasonable expenses, including attorneys' fees incurred by
Executive, in connection with any action or proceeding (or any appeal from
any action or proceeding) with respect to the Company or activities engaged
in by Executive in the course of employment with the Company in which
Executive is made, or is threatened to be made, a party or a witness.
11. WITHHOLDING.
All payments required to be made by the Company hereunder shall be
subject to the withholding of such amounts as are required to be withheld
pursuant to any applicable law or regulation.
12. CERTAIN DEFINED TERMS.
As used herein, the following terms have the following meanings:
"AGREEMENT" shall mean this Management Compensation Agreement, as the
same may be amended, supplemented or otherwise modified from time to time.
"Base Salary" shall mean the annual salary of the Executive in effect
from time to time under Section 2.1.
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"BOARD" shall mean the Board of Directors of the Company.
"CAUSE" shall mean with respect to termination of Executive's
employment hereunder (i) an act or acts of personal dishonesty by Executive
intended to result in substantial personal enrichment of Executive at the
expense of the Company, (ii) an act or acts of personal dishonesty by
Executive intended to cause substantial injury to the Company, (iii) material
breach (other than as a result of a Disability) by Executive of Executive's
obligations under this Agreement which action was (a) undertaken without a
reasonable belief that the action was in the best interest of the Company and
(b) not remedied within a reasonable period of time after receipt of written
notice from the Company specifying the alleged breach either, or (iv) the
conviction of Executive of a felony.
"CHANGE IN CONTROL" means any one of the following:
(a) The acquisition by any individual, entity or group (within the
meaning of Section 13 (d)(3) or 14 (d)(2) or the Securities Exchange Act
of 1934 (the "Exchange Act")) (a "Person") of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of
50% or more of either (i) the then outstanding shares of Common Stock of
Parent (the "Outstanding Parent Common Stock") or (ii) the combined
voting power of the then outstanding voting securities of Parent
entitled to vote generally in the election of directors (the
"Outstanding Parent Voting Securities"); provided, however, this
subsection (a) shall not apply to the Investor Stockholders party to the
Second Amended and Restated Stockholders' Agreement dated as of December
23, 1993; or
(b) Individuals who, as of June 1, 1994, constitute the Board of
Directors of Parent (the "Incumbent Board") cease for any reason to
constitute as least a majority of such Board; provided, however, that
any individual becoming a director subsequent to June 1, 1994, whose
election, or nomination for election by Parent's shareholders,
was approved by a vote of at least a majority of the directors then
comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs
as a result of an actual or threatened election contest with respect to
the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other
than the Board of Directors of Parent; or
(c) Approval by the shareholders of Parent of a reorganization,
merger or consolidation (a "Business Combination"), in each case,
unless, following such Business Combination, (i) all or substantially
all of the individuals
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and entities who were the beneficial owners, respectively, of the
Outstanding Parent Common Stock and Outstanding Parent Voting Securities
immediately prior to such Business Combination beneficially own, directly
or indirectly, more than 50% of, respectively, the then outstanding
shares of common stock and the combined voting power of the then
outstanding voting securities entitled to vote generally in the election
of directors, as the case may be, of the corporation resulting from such
Business Combination (including, without limitation, a corporation which
as a result of such transaction owns Parent through one or more
subsidiaries) in substantially the same proportions as their ownership
immediately prior to such Business Combination of the Outstanding Parent
Stock and Outstanding Parent Voting Securities, as the case may be and
(ii) at least a majority of the members of the board of directors of the
corporation resulting from such Business Combination were members of the
Incumbent Board at the time of the execution of the initial agreement or
of the action of such Board, providing for such Business Combination; or
(d) Approval by the shareholders of Parent (i) a complete
liquidation or dissolution of Parent or (ii) the sale or other
disposition of all or substantially all of the assets of Parent, other
than to a corporation with respect to which the following such sale or
other disposition, (X) more than 50% of, respectively, the then
outstanding shares of common stock of such corporation and the combined
voting power of the then outstanding voting securities of such
corporation entitled to vote generally in the election of directors is
then beneficially owned, directly or indirectly, by all or substantially
all of the individuals and entities who were the beneficial owners
respectively, of the Outstanding Parent Common Stock and Outstanding
Parent Voting Securities immediately prior to such sale or other disposition
in substantially the same proportion as their ownership immediately prior to
such sale or other disposition of the Outstanding Parent Common Stock and
Outstanding Parent Voting Securities, as the case may be and (Y) at least a
majority of the members of the board of directors of such corporation were
members of the Incumbent Board at the time of the execution of the initial
agreement, or other action of such Board, providing for such sale or other
disposition of assets of Parent or were elected, appointed or nominated by
the Incumbent Board.
"COMMON STOCK" shall mean all issued and outstanding common stock,
of all classes, of the Parent, including any outstanding securities
convertible into such common stock.
"DATE OF TERMINATION" shall mean, with respect to Executive, the
date of termination of Executive's employment hereunder after the notice
period provided by Section 4.4.
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"DISABILITY" shall mean Executive's physical and mental condition
which prevents continued performance of his duties hereunder, if
Executive establishes by medical evidence that such condition will be
permanent and continuous during the remainder of Executive's life or is
likely to be of at least three years' duration.
"EFFECTIVE DATE" shall mean September 1, 1996.
"GOOD REASON" shall mean with respect to an Executive, any one or
more of the following:
(a) a material reduction in Executive's compensation or other
benefits (except as permitted hereunder);
(b) any material change in Executive's job responsibilities;
provided that, so long as Executive retains a substantial part of his
then current oversight responsibility, a transfer of a portion of such
oversight responsibility of Executive shall not in and of itself constitute
a material change in Executive's job responsibilities;
(c) the relocation of the Company's principal executive offices
to a location outside the Minneapolis - St. Xxxx Metropolitan Area;
(d) a failure by the Company to comply with any material
provision of this Agreement which has not been cured within ten (10)
days after the Company knows or has notice of such noncompliance.
In order for an Executive's termination of his employment to be
considered for Good Reason, such termination must occur within one year
after the event giving rise to such Good Reason. Executive's continued
employment shall not constitute consent to, or a waiver of rights with
respect to, any circumstance constituting Good Reason hereunder.
"NOTICE OF TERMINATION" shall mean a notice specifying the Date of
Termination, which notice shall (i) indicate the specific termination
provision (if any) in this Agreement applicable to the termination, and
(ii) set forth in reasonable detail the facts and circumstances claimed
to provide a basis for termination of Executive's employment under the
provision so indicated.
"PARENT" shall mean Northwest Airlines Corporation.
"PERSON" shall mean an individual, a corporation, a company, a
voluntary association, a partnership, a trust, an unincorporated
organization or a government or any agency, instrumentally or political
subdivision thereof.
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"SIGNIFICANT ASSETS" shall mean (i) all or substantially all of
the assets and/or business or outstanding voting securities, of the
Company (ii) all or substantially all of Northwest's routes between the
United States and Japan.
"SUBSIDIARY" of a Person shall mean any corporation, partnership
(limited or general), trust or other entity of which a majority of the
stock (or equivalent ownership or controlling interest) having voting
power to elect a majority of the board of directors (if a corporation)
or to select the trustee or equivalent controlling interest, shall at
the time such reference becomes operative, be directly or indirectly
owned or controlled by such Person or one or more of the other
subsidiaries of such Person or any combination thereof.
"2-R" shall mean space available travel in first, business or
coach class, with boarding priority (i) ahead of the categories specified
below category "2-R" on Exhibit A attached hereto and (ii) within
category "2-R," based on seniority with the Company.
"F-1" shall mean confirmed seating in first class or business
class if first class is not offered, with boarding priority (i) ahead of
the categories specified below category "F-I" on Exhibit A attached
hereto and (ii) within category "F-I," based on seniority with the
Company.
"Y-1/F-2" shall mean confirmed seating travel in coach class and
space available travel in first or business class, with boarding
priority (i) ahead of the categories specified below category "Y-a/F-2"
in Exhibit A attached hereto, and (ii) within category "Y-1/F-2," based
on seniority with the Company.
13. MISCELLANEOUS.
No provision of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in
writing signed by Executive and such officer as may be specifically
designated by the Board. No agreements or representations, oral or
otherwise, express or implied, with respect to the subject matter hereof
have been made by either party which are not set forth expressly in this
Agreement. There shall be no right of set-off or counterclaim, in
respect of any claim, debt or obligation, against any payments to
Executive, his dependents, beneficiaries or estate provided for in this
Agreement. The validity, interpretation, construction and performance of
this Agreement shall be governed by the laws of the State of Minnesota,
without regard to principles of conflicts of laws.
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14. VALIDITY.
The invalidity or unenforceability of any provision or provisions
of this Agreement shall not affect the validity or enforceability of any
other provision of this Agreement which shall remain in full force and effect.
15. DISPUTES; REMEDIES.
If either the Company, on the one hand, or Executive, on the
other hand, breaches or threatens to commit a breach of the terms and
conditions hereof, the other party shall have the following rights and
remedies:
(a) Specific performance (I.E., the right and remedy to have
the terms and conditions hereof specifically enforced by any court of
competent jurisdiction), it being agreed that any breach or threatened
breach of the terms and conditions hereof would cause irreparable injury
and that money damages may not provide an adequate remedy; and
(b) Damages (I.E., the right to receive from any violator of
the terms and conditions hereof, any and all damages, costs and expenses
incurred by the injured party as a result of the breach of the terms and
conditions hereof).
16. PARENT UNDERTAKING.
Northwest Airlines Corporation, as parent corporation to the
Company, hereby agrees to cause the Company to perform all of its
obligations hereunder and Executive shall be deemed to have entered into
this Agreement in reliance upon the undertaking set forth herein.
NORTHWEST AIRLINES, INC.
by: /s/ Xxxxxxxxxxx X. Xxxxxxx
---------------------------
NORTHWEST AIRLINES CORPORATION
by: /s/ Xxxxxxxxxxx X. Xxxxxxx
---------------------------
/s/ Xxxxxxx X. Xxxxxxxxx
------------------------------
Xxxxxxx X. Xxxxxxxxx
