**Exhibit 10.2**

 

FINAL

 

AMENDMENT

TO THE

NORTHWEST AIRLINES CORPORATION

KEY EMPLOYEE ANNUAL CASH INCENTIVE PROGRAM

(Effective as of April 14, 2008)

 

This AMENDMENTTO THE NORTHWEST AIRLINES CORPORATION KEY EMPLOYEE ANNUAL CASH INCENTIVE PROGRAM(the “Amendment”) is hereby adopted and approved by the Compensation Committeeof the Board of Directors of Northwest Airlines Corporation as of the date setforth above.

 

WHEREAS, Northwest Airlines Corporation (the “Company”) currentlymaintains the Northwest Airlines Corporation Key Employee Annual Cash IncentiveProgram (the “KEACIP”);

 

WHEREAS, pursuant to its authority under Section 7(a) of theKEACIP, the Compensation Committee of the Board of Directors of NorthwestAirlines Corporation desires to amend the KEACIP as follows:

 

1.                             Amendmentof the KEACIP. Section 2 of the KEACIP is hereby amended by addingthereto the following definitions.

 

“Cause” means “Cause” as defined in a management compensationagreement between a Participant and the Company or a Participating Employer or,if not defined therein or if there is no such agreement, “Cause” shall mean theoccurrence of any one or more of the following: (a) an act or acts ofpersonal dishonesty by the Participant intended to result in substantialpersonal enrichment of the Participant at the expense of the Company or aParticipating Employer, (b) an act or acts of personal dishonesty by theParticipant intended to cause substantial injury to the Company or aParticipating Employer, (c) material breach (other than as a result of aTotal and Permanent Disability) by the Participant of the Participant’sobligations under the terms and conditions of the Participant’s employment,which action was (i) undertaken without a reasonable belief that theaction was in the best interests of the Company or a Participating Employer and(ii) not remedied within fifteen (15) days after receipt of written noticefrom the Company or a Participating Employer specifying the alleged breach, or (d) theconviction of the Participant of a felony.”

 

“Change of Control” means “Change of Control” as defined in NorthwestAirlines Corporation 2007 Stock Incentive Plan, as of the date hereof.

 

“Good Reason” means “Good Reason” as defined in a managementcompensation 

 

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agreement between a Participant and the Company or a ParticipatingEmployer or, if not defined therein or if there is no such agreement, “GoodReason” shall mean any one or more of the following: (i) a materialreduction in a Participant’s base salary or target bonus below the level of theParticipant’s base salary or target bonus immediately prior to the Change ofControl or (ii) the relocation of the Participant’s principal place ofemployment by more than 50 miles (excluding travel requirements relating to theParticipant’s duties), without the Participant’s consent; provided, however,that the foregoing events shall constitute Good Reason only if the Companyfails to cure such event within thirty (30) days after receipt from theParticipant of written notice of the event which constitutes Good Reason; and provided,further, that “Good Reason” shall cease to exist for an event on the 60thday following the later of its occurrence or the Participant’s knowledgethereof, unless the Participant has given the Company written notice thereofprior to such date.

 

“Qualifying Termination” means a Participant’s termination ofemployment by the Company or a Participating Employer without Cause or aParticipant’s resignation for Good Reason.

 

2.             Amendmentof the KEACIP. Section 6 of the KEACIP is hereby amended by addingthereto the following.

 

“***c).          Change of Control***

 

Notwithstanding any provision herein to the contrary, in the event of aChange of Control (and subject to the Participant’s continued employment withthe Company or a Participating Employer through the Payment Date (definedbelow)), for the performance period in which the Change of Control occurs, theCompany shall pay each Participant, at the time the annual incentivecompensation becomes payable to such Participant hereunder (the “Payment Date”),the greater of (i) the Participant’s Target Incentive Level establishedfor the applicable period or (ii) the Participant’s actual incentive levelachieved, based on the established performance measures for the applicableperiod.

 

***d).           Terminationof Employment Following a Change of Control***

 

Notwithstandingany provision herein to the contrary (including Section 5(a) hereof),in the event that following a Change of Control (A) a QualifyingTermination occurs during the Program Year in which the Change of Controloccurs, then the Company shall pay such Participant, as soon as practicable(but in no event later than ten (10) days) following Executive’stermination of employment, a lump sum amount equal to a pro rata share (basedon days elapsed during the applicable year) of the Participant’s TargetIncentive Level under the Program or any successor incentive compensation planssuch Participant would otherwise have received with respect to the year (the “Pro-RataBonus”); *provided, however,*the Committeemay, in its discretion, equitably increase (but 

 

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not decrease)the Pro-Rata Bonus payment (taking into consideration, without limitation, theactual incentive level anticipated to be achieved, based on the establishedperformance measures for the applicable period); or (B) a QualifyingTermination  occurs after a completion ofthe Program Year in which the Change of Control occurred but prior to a PaymentDate for such Program Year, the Company shall pay such Participant on thenormally scheduled Payment Date for such Program Year, a lump sum amount equalto the greater of (i) the Participant’s Target Incentive Level establishedfor the applicable period or (ii) the Participant’s actual incentive levelachieved, based on the established performance measures for the applicableperiod; *provided, however,* thatsuch payments under (A) or (B) above shall not duplicate nor derogateany payments in respect of a partial or full year bonus under the Program inrespect of the same periods under the terms of such Participant’s managementcompensation agreement or other agreement with the Company or a ParticipatingEmployer.”

 

3.             Amendmentof the KEACIP. Section 6(a) of the KEACIP is hereby deleted inits entirety and replaced with the following.

 

“**a)           PaymentDate**

 

After awards have been calculated for the Program Year and thecalculations have been approved by the Committee or the President &CEO of Northwest Airlines, Participating Employers shall pay cash awards toeligible Participants; *provided, however,*thatall payments in respect of such awards shall be made no later than two andone-half (2.5) months after the end of the Program Year to which the awardsrelate.”

 

4.             Amendmentof the KEACIP. Section 7(a) of the KEACIP is hereby amended byadding thereto the following.

 

“Notwithstanding the foregoing, no such amendment or termination shallimpair the rights of a Participant under Sections 6(c) or 6(d) hereof,without such Participant’s consent, further, after a Change of Control, theCompany shall not terminate the Program during the Program Year in which theChange of Control occurs.”

 

5.             Amendmentof the KEACIP. Section 7 of the KEACIP is hereby amended by addingthereto the following.

 

“***f)***           ***Adjustments Upon a Change of Control***

 

In the event of a Change of Control, the Committee shall, in goodfaith, make any adjustment it reasonably determines to be equitable to theperformance measures set forth in Section 4 of the Program to reflect anychange to the business of the Company or a Participating Employer (or anysuccessor to the Company or a Participating Employer) resulting from suchChange of Control.

 

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***g)******            Successors***

 

The Program shall constitute a binding obligation to any successor to theCompany, whether by purchase, merger, consolidation or otherwise, in the samemanner and to the same extent that the Company would be obligated under theProgram if no such succession had taken place. In any agreement providing for the sale of all or substantially all of theCompany’s assets, the Company shall cause the acquiring party to assume andagree to perform the Company’s obligations under the Program.”

 

6.                             General.  References to the “Program” contained in theKEACIP shall mean the “Program” as amended by this Amendment.  Except as herein provided, the KEACIP shallremain unchanged and in full force and effect.

 

Adopted by the Compensation Committee of the Board of Directors of NorthwestAirlines Corporation on April 14, 2008.

 

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