Document:

Exhibit 10.31

 

 

MANAGEMENT
COMPENSATION AGREEMENT

 

between

 

NORTHWEST
AIRLINES, INC.

 

and

 

BARRY P. SIMON

 

dated as of

 

December 3,
2004

 

 

MANAGEMENT
COMPENSATION AGREEMENT

 

MANAGEMENT
COMPENSATION AGREEMENT made as of the 3rd day of December, 2004
between Northwest Airlines, Inc., a Minnesota corporation (the “Company”)
and Barry P. Simon (the “Executive”).

 

PREAMBLE

 

The Company
and Executive hereby desire to enter into a Management Compensation Agreement
dated as of the date first above written.

 

1.  Terms of Employment.

 

1.1                                 Employment.  The Company agrees to employ Executive, and
Executive agrees to be employed by the Company, on the terms and conditions set
forth herein.

 

1.2                                 Position and Duties.  During the term of Executive’s employment
hereunder, Executive shall serve as Executive Vice President & General
Counsel of the Company and shall have such powers and duties as may from time
to time be prescribed by the Company.  Executive
shall devote substantially all his working time and effort to the business and
affairs of the Company and its affiliates.

 

2.  Compensation and Benefits.

 

2.1                                 Base Salary.  Executive’s Base Salary as of the Effective
Date shall be $425,000.  Executive’s Base
Salary in effect from time to time may only be reduced in connection with a
base wage reduction for salaried employees of the Company, by an amount not to
exceed $85,000.  Executive’s Base Salary
shall be payable in accordance with the Company’s payroll policies.

 

2.2                                 Incentive
Compensation Programs.  During the
term of Executive’s employment hereunder:

 

(a)  Executive shall be entitled to receive from
the Company, within ten (10) days after the date of this Agreement, a lump-sum
cash payment in the amount of $240,000, less all applicable withholding taxes
(the “Sign-on Bonus”); provided that, in the event Executive’s
employment with the Company terminates on or before the third (3rd)
anniversary of the Effective Date, Executive shall re-pay to the Company within
three (3) business days after the effective date of such termination a portion
of the Sign-on Bonus in an amount equal to $240,000 multiplied by the Proration
Fraction, and the Company shall have the right to offset any amount required to
be repaid by Executive pursuant to this Section 2.2(a) against any other
amounts payable to the Executive at the time of such termination of employment.

 

(b)  Executive shall be entitled to participate in
the Company’s Key Employee Annual Cash Incentive Plan (the “KEACIP”) or
any successor annual bonus plan beginning with the 2005 plan year, the terms
and conditions of which shall be established

 

 

from time to
time by the Compensation Committee.  For
the 2005 plan year, Executive’s target incentive percentage shall be 60% of
Executive’s Base Salary.

 

(c)  Executive shall be entitled to participate in
the Company’s Long-Term Cash Incentive Plan beginning with the two year
performance period commencing January 1, 2005, the terms and conditions of
which shall be established from time to time by the Compensation Committee.

 

(d)  Executive shall be entitled to receive a
restricted stock award for 75,000 shares of common stock of Northwest Airlines
Corporation, par value $.01 per share (the “Common Stock”), such
restricted stock to vest in six equal installments of 12,500 shares each on each
six month anniversary of the date of grant until fully vested on the third
anniversary of the date of grant so long as Executive remains an active
full-time employee of the Company on such dates, the terms and conditions of
which award shall be set forth in a written agreement or other documentation which
shall be provided to Executive by the Company’s Secretary.

 

2.3                                 Expenses.  During the term of Executive’s employment
hereunder, Executive shall be entitled to receive prompt reimbursements for all
reasonable business expenses incurred in performing services hereunder in
accordance with the Company’s business expense reimbursement policies in effect
from time to time.

 

2.4                                 Employee Benefit
Programs of the Company.  Except as
set forth below, Executive shall be entitled to participate while employed
hereunder in the Company’s employee benefit programs at levels in effect on the
Effective Date.  Exceptions to the
preceding sentence are:

 

(a)          Amounts payable to
Executive under the Company’s benefit programs may be reduced to reflect a
benefit reduction for salaried employees of the Company, in the same manner
that salaried employees are generally affected by such reduction.

 

(b)         Executive shall not
participate in any severance pay plan or annual bonus plan maintained by the
Company except to the extent necessary to receive any severance or bonus
payments specifically provided for hereunder.

 

2.5                                 Retirement
Plans.  Executive shall be entitled
to participate in the Northwest Airlines Supplemental Executive Retirement Plan
(the “SERP”) on the terms and conditions set forth in an Ancillary
Agreement to be provided to Executive by the Company.

 

3.  Airline Pass.

 

In the event Executive remains an active
full-time employee of the Company from the Effective Date through the third (3rd)
anniversary thereof, Executive shall be entitled to receive, upon termination
of employment, lifetime airline pass privileges for the personal use of
Executive and his spouse or registered domestic partner and dependent children
so long as spouses, registered domestic partners and dependent children of
employees generally are eligible for nonrevenue travel pursuant to the Company’s
pass policies (hereinafter, “Eligible Individuals”).  Such airline pass privileges (the “Airline
Pass”) shall entitle Executive and

 

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Eligible
Individuals to travel on regularly scheduled domestic and international flights
operated by the Company, subject to all charges and fees then applicable to
active management employees of the Company and their dependents and pursuant to
the Company’s pass policies in effect from time to time, with boarding priority
of F1-R.  Executive shall be responsible
for any personal income tax liability arising from such pass travel.  Notwithstanding the foregoing, all benefits
under this Section 3 shall immediately and permanently cease in the event
Executive violates the Company’s pass policies in connection with such travel
and/or in the event that Executive is or becomes, at any time thereafter, an
employee of any of the top five (5) airlines in the United States (other than
the Company) ranked by revenue passenger miles.

 

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.  Any termination of Executive’s employment
hereunder (other than by death) shall be communicated by thirty (30) days’
advance written Notice of Termination by the terminating party to the other
party to this Agreement; provided that no advance Notice of Termination
of Executive for Cause by the Company is required.

 

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.  If Executive’s employment
hereunder is terminated by the Company for Cause, as a result of death or
Disability 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 vested or accrued and unpaid payments, rights or
benefits Executive may be otherwise entitled to receive pursuant to the terms
of any written retirement, pension or other employee benefit or compensation
plan maintained by the Company at the time or times provided therein.

 

5.2                                 Payments in the
Event of Any Other Termination of Employment.  If Executive’s employment hereunder is
terminated by the Company other than for Cause, or by Executive for Good
Reason:

 

(a)          subject to Section 2.2(a)
hereof, 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

 

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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 vested or accrued
and unpaid payments, rights or benefits Executive may be otherwise entitled to
receive pursuant to the terms of any written retirement, pension or other
employee benefit or compensation plan maintained by the Company at the time or
times provided therein.

 

(b)         subject to Section 2.2(a)
hereof, in addition to the compensation and benefits described in Section 5.2(a):

 

(i)                                     The
Company shall pay Executive, no later than thirty (30) days following Executive’s
termination of employment, a lump sum cash payment equal to $680,000.

 

(ii)                                  With
regard to group life insurance and group medical and dental 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 medical and dental insurance as if Executive were
still employed by the Company hereunder during such period.

 

(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’s obtaining new employment.

 

(d)         notwithstanding anything
else to the contrary in this Agreement, the Company’s obligation regarding the
payments and insurance continuation provided for in Sections 5.2(a)(iii)
and 5.2(b)(i) and (ii) is expressly conditioned upon the execution, delivery
and non-revocation of a general release in the form attached hereto as Attachment A.

 

5.3                                 Compliance
with Tax Regulations.  All payments
pursuant to this Section 5 shall be made in compliance with all applicable
laws, rules and regulations, including without limitation the provisions of the
American Jobs Creation Act of 2004 and all rules and regulations promulgated
thereunder.

 

5.4                                 Board/Committee
Resignation.  Executive’s termination of employment for any
reason, shall constitute, as of the date of such termination and to the extent
applicable, a resignation as an officer of the Company and a resignation from
the board of directors (and any committees thereof) of any of the Company’s
affiliates and from the board of directors or similar governing body of any
corporation, limited liability company or other entity in which the Company or
any affiliate holds an equity interest and with respect to which board or
similar

 

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governing body Executive serves as the
Company’s or such affiliate’s designee or other representative.  

 

6.  Confidentiality; Non-Compete;
Non-Solicitation; Non-disparagement.

 

While employed
by the Company and thereafter, Executive shall not disclose any Confidential
Information either directly or indirectly, to anyone (other than appropriate
Company 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.  For
purposes of this Agreement, “Confidential Information” shall mean all
non-public information respecting the Company’s business, including, but not
limited to, its services, pricing, scheduling, products, research and
development, processes, customer lists, marketing plans and strategies,
financing plans and the terms and provisions of this Agreement, but excluding
information that is, or becomes, available to the public (unless such
availability occurs through an unauthorized act on the part of the Executive).  Upon termination of this Agreement, Executive
shall promptly supply to the Company all property and any other tangible
product or document that 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, Executive
shall not, without the consent of the Company, at any time prior to the first
anniversary of the Date of Termination (i) become an employee, consultant,
officer, partner or director of any air carrier which competes (other than to an
insignificant extent) with the Company (or any of its affiliates) or (ii)
whether on Executive’s own behalf or on behalf of or in conjunction with any
person, company, business entity or other organization whatsoever, directly or
indirectly solicit or encourage any employee of the Company or its affiliates
to leave the employment of the Company or its affiliates.  Upon Executive’s termination of employment,
Executive may request that the Company consent to Executive’s serving in a
position that would otherwise be in violation of the foregoing sentence, and
the Company in its sole discretion may elect to provide its written consent to
any such service.

 

While employed
by the Company and thereafter, Executive agrees not to make any untruthful or
disparaging statements, written or oral, about the Company, its affiliates,
their predecessors or successors or any of their past and present officers,
directors, stockholders, partners, members, agents and employees or the Company’s
business practices, operations or personnel policies and practices to any of
the Company’s customers, clients, competitors, suppliers, investors, directors,
consultants, employees, former employees, or the press or other media in any
country.

 

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

 

5

 

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 the Company, 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.

 

(b)         This
Agreement shall not be assignable by Executive. 
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, distributes,
devises and legatees.

 

8.  Term.

 

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 fullest 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, to the
address set forth on the signature page hereto, and

 

(b)         if to the Company, c/o
Northwest Airlines, Inc., 2700 Lone Oak Parkway, Eagan, Minnesota 55121, Attention:  Secretary,

 

or, in each
case, to such other address as may have been furnished in writing.

 

10. Withholding.

 

All payments
required to be made by the Company hereunder shall be subject to the
withholding and/or deduction of such amounts as are required to be withheld or
deducted pursuant to any applicable law or regulation.  The Company shall have the right and is
hereby authorized to withhold or deduct from any compensation or other amount
owing to Executive, applicable withholding taxes and deductions and to take
such action as may be necessary in the opinion of the Company to satisfy all
obligations for the payment of such taxes or deductions.

 

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11. 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 in accordance herewith.

 

“Base
Salary” shall mean the annual base salary of the Executive in effect from
time to time under Section 2.1.

 

“Board”
shall mean the Board of Directors of the Company.

 

“Cause”
shall mean with respect to termination by the Company of Executive’s employment
hereunder (i) an act or acts of dishonesty by Executive resulting in, or
intended to result in, directly or indirectly, any personal enrichment of
Executive, (ii) an act or acts of 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 interests 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, (iv) Executive’s conviction of, or
plea of nolo contendere to, a crime constituting (a) a felony under the
laws of any country, the United States or any state thereof or (b) a
misdemeanor involving moral turpitude or (v) a material breach of
(a) the Company’s Code of Business Conduct or (b) the provisions of
this Agreement.

 

“Common
Stock” shall have the meaning set forth in Section 2.2(d) hereof.

 

“Compensation
Committee” shall mean the Compensation Committee of the Board of Directors
of the Company or any subcommittee thereof.

 

“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.

 

“Disability”
shall mean Executive’s physical or 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 (3) years
duration.

 

“Effective
Date” shall mean October 20, 2004.

 

“Good
Reason” shall mean with respect to an Executive, any one or more of the
following:

 

(a)                                  a reduction in
Executive’s Base Salary or level of target bonus under the KEACIP or any
successor bonus plan (except as permitted hereunder);

 

7

 

(b)                                 any substantial and
sustained diminution in Executive’s authority or responsibilities hereunder, provided
that as long as Executive retains a substantial portion of his current
oversight responsibilities (including all of his current responsibilities with
respect to the legal affairs of the Company), a transfer of a portion of
Executive’s oversight responsibilities shall not qualify as “Good Reason”;

 

(c)                                  the relocation of the
Company’s principal executive offices to a location outside the Minneapolis-St.
Paul Metropolitan Area; or

 

(d)                                 a failure by the
Company to comply with any provision of this Agreement;

 

provided,
however, that the foregoing events shall constitute Good Reason only if
the Company fails to cure such event within thirty (30) days after receipt from
Executive of written notice of the event which constitutes Good Reason; provided,
further, that “Good Reason” shall cease to exist for an event on the 60th
day following the later of its occurrence or Executive’s knowledge thereof,
unless Executive has given the Company written notice thereof prior to such
date.

 

In order for
Executive’s termination of his employment to be considered for Good Reason,
such termination must occur within one (1) 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.

 

“KEACIP”
shall have the meaning set forth in Section 2.2(b) hereof.

 

“Notice of
Termination” shall mean a notice specifying the Date of Termination.

 

“Proration Fraction” shall mean a
fraction, the numerator of which is the number of days during the period
commencing on the date Executive’s employment with the Company hereunder is
terminated and ending on October 1, 2007and the denominator of which is
1,095.

 

“SERP” shall have the meaning set
forth in Section 2.5 hereof.

 

“Sign-on Bonus” shall have the meaning
set forth in Section 2.2(a) hereof.

 

12. Executive
Representation.

 

Executive
hereby represents to the Company that the execution and delivery of this
Agreement by Executive and the Company and the performance by Executive of
Executive’s duties hereunder shall not constitute a breach of, or otherwise
contravene, the terms of any employment agreement or other agreement or policy
to which Executive is a party or otherwise bound.

 

13. Amendment.

 

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 an
authorized officer of the Company.

 

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14. Governing
Law.

 

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.

 

15. 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.

 

16. Arbitration.

 

Except as
otherwise provided in Section 17 of this Agreement, all disputes and
controversies arising from or in conjunction with Executive’s employment with,
or any termination from, the Company and all disputes and controversies arising
under or in connection with this Agreement (except claims for vested benefits
brought under ERISA) shall be settled by mandatory arbitration conducted before
one arbitrator having knowledge of employment law in accordance with the rules
for expedited resolution of employment disputes of the American Arbitration Association
then in effect.  The arbitration shall be
held in the Minneapolis/St. Paul metropolitan area at a location selected by
the Company.  The determination of the
arbitrator shall be made within thirty (30) days following the close of
the hearing on any dispute or controversy and shall be final and binding on the
parties.  The parties hereby waive their
right to a trial of any and all claims arising out of this Agreement or breach
of this Agreement.  All costs and
expenses incurred in connection with any arbitration including, without
limitation, arbitrator and attorney’s fees, shall be paid by the non-prevailing
party in the arbitration unless the arbitrator determines that such expenses
must be otherwise allocated under applicable law to maintain the validity of
this Section 16.

 

17. Specific
Performance.

 

Notwithstanding
Section 16 of this Agreement, if Executive breaches or threatens to commit
a breach of Section 6 of this Agreement, the Company shall have the right
to specific performance (i.e., the right and remedy to have the terms and
conditions of Section 6 specifically enforced by any court of competent
jurisdiction), it being agreed that any breach or threatened breach of Section 6
would cause irreparable injury and that money damages may not provide an
adequate remedy.

 

18. Cooperation.  

 

Executive
shall provide his reasonable cooperation in connection with any investigation,
action or proceeding (or any appeal from any action or proceeding) which
relates to events occurring during Executive’s employment hereunder.  This provision shall survive any termination
of this Agreement.

 

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19. Compensation Limitation.  

 

Notwithstanding
the foregoing, Executive and the Company agree that (i) to the extent permitted
by the Air Transportation Safety and System Stabilization Act (the “Act”) any
payments or benefits payable to Executive under this Agreement (including,
without limitation, payments under Sections 2 and 5 hereof) or pursuant to
any other compensation or benefit plan of the Company or other arrangement
between the Company and Executive that do not comply with the Act shall be
deferred until such payments or benefits may be paid under the Act, and (ii) to
the extent the Act does not permit the deferral of any such payments or
benefits, the maximum compensation and/or severance Executive may receive from
the Company under this Agreement or any other compensation or benefit plan of
the Company or other arrangement between the Company and Executive will not
exceed the amount allowed under the Act.

 

20. Entire
Agreement.

 

This
Agreement, together with the Release, any award agreement between the Company
and Executive entered into pursuant to the Company’s stock incentive plans, and
the Company’s employee benefit plans in which Executive will participate as
provided in this Agreement, contain the entire understanding between the
Company and Executive with respect to Executive’s employment with the Company
and supersedes in all respects any prior or other agreement or understanding
between the Company or any affiliate of the Company and Executive with respect
to Executive’s employment.

 

IN WITNESS
WHEREOF, the Company and Executive have executed this Agreement as of the day
and year first above written.

 

 

	
   

  	
  NORTHWEST AIRLINES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Douglas M. Steenland

  	
   

  
	
   

  	
   

  	
  Douglas M. Steenland

  
	
   

  	
   

  	
  Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EXECUTIVE:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Barry P. Simon

  	
   

  
	
   

  	
   

  	
  Barry P. Simon

  
	
   

  	
   

  	
  Executive Vice President & General

  Counsel

  
							

 

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Attachment A

 

 

GENERAL RELEASE

 

 

WHEREAS,                                  
(the “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 “Released 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 Management
Compensation Agreement dated as of                          ,
       , by and between Northwest and
Executive (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;

 

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 be terminated effective                         ,
      .

 

3.                                       In consideration
of the obligations of Executive as set forth in this Release and the Agreement,
and in full settlement and final satisfaction of any and all claims,
contractual or otherwise, which Executive had, has or may have against
Northwest and/or the Released 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.  This Release shall not pertain to any claim
alleging that Northwest has failed to comply with any obligations created by
this Release or that Northwest has failed to pay to Executive the payments and

 

11

 

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
covenants not to sue, 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 actions known or unknown, 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., Executive Order 11246, 30
Fed. Reg. 12319; 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 Federal Equal Pay Act, 29 U.S.C. Section 2061, 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 all state or local constitutions and/or laws
regarding employment discrimination and/or federal, state or local
constitutions and/or 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, whistle-blowing,
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, disability, race, ethnicity,
religion or any other protected class status.

 

(b)                                 Without
in any way limiting the foregoing, 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.

 

(c)                                  This
Release shall not affect Executive’s rights under one or more Non-Qualified
Stock Option Agreements, Deferred Stock Award Agreement or Phantom Stock Unit
Award Agreement between Northwest and the Executive governing the terms of any
stock option grant or other stock award outstanding on the date hereof, which
rights shall continue to be governed by the terms of the agreement applicable
to such stock option or other stock award.

 

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.

 

12

 

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.

 

8.                                       (a)                                  The
parties agree that this Release should 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 the arbitration provision
contained in the Agreement.  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 to take such other actions as
may be 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.  Executive represents and
acknowledges that no representations, statement, promise, inducement, threat or
suggestion has been made by Northwest or the Released Parties to influence
Executive 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 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 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 Northwest
within 15 calendars days following the execution of this Release.  Executive also has the 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 Northwest of his intent to revoke this Release within seven calendar
days following the execution of this Release. 
To be effective, notice, rescission or revocation must be in writing and
must be delivered either by hand or by mail to the Secretary of Northwest at
the following address:  Northwest
Airlines, Inc., Department A1180, 2700 Lone Oak Parkway, Dept. A1180, Eagan,
MN  55121, Attention:  Secretary, within the specified period.  If a notice of rescission or

 

13

 

revocation is delivered by mail, it must
be:  (i) postmarked within the 15 or 7
day period, respectively, (ii) properly addressed to the Secretary of Northwest
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 payments shall be due, owing
or paid by Northwest unless and until this Release becomes effective.

 

This Release may not be changed or modified, except by a written
instrument signed by Executive and Northwest.

 

 

	
  NORTHWEST AIRLINES, INC.

  	
  EXECUTIVE:

  
	
   

  	
   

  
	
   

  	
   

  
	
  By: 

  	
   

  	
   

  	
   

  
	
  Name: 

  	
   

  	
   

  	
   

  
	
  Title: 

  	
   

  	
   

  	
   

  
					

 

14Exhibit 10.35

 

ANCILLARY AGREEMENT

under

 

NORTHWEST AIRLINES

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

(2001 Restatement)

 

THIS AGREEMENT, Made and entered into by and
between Northwest Airlines, Inc., a Minnesota corporation, (the “Employer”)
and  Andrew C. Roberts (the “Participant”).

 

WHEREAS, Employer has established a nonqualified plan of deferred
compensation for the benefit of a select group of management or highly
compensated employees currently set forth in a document entitled “Northwest
Airlines Supplemental Executive Retirement Plan (2001 Restatement)”
(hereinafter the “2001 SERP Restatement”); and

 

WHEREAS, The Plan maintained pursuant to the 2001 SERP Restatement
(sometimes referred to as the “SERP”) contemplates that certain terms and
provisions may be varied pursuant to a separate written agreement by and
between Employer and Participant known as an “Ancillary Agreement”; and

 

WHEREAS, The Employer and the Participant agree that upon executing
this Ancillary Agreement, Participant’s SERP benefit will be computed under and
governed solely by Part B of the 2001 SERP Restatement and not Part A of the
2001 SERP Restatement.

 

NOW THEREFORE, IT IS HEREBY AGREED, By and
between Employer and Participant as follows:

 

1)              DATE OF PARTICIPATION.  Participant’s effective date for the
commencement of SERP participation is December 1, 2002.

 

2)              SPECIAL ARRANGEMENTS.  For the purpose of computing Participant’s
benefits under the SERP, the following special rules shall apply.

 

a)              FAE Formula.  For the purposes of computing Participant’s
Final Average Earnings Annuity pursuant to Section 4.1.1(a)(1)(iii) of the
2001 SERP Restatement, Participant’s actual Benefit Service shall be increased
annually by two (2) additional deemed years of Benefit Service for each actual
year of employment completed by the Participant after the Participant’s
effective date for the commencement of SERP participation (not to exceed ten
additional deemed years over and above the actual Benefit Service).

 

b)             CB Increased Pay Credit
Percentage.  For the purpose
of determining Participant’s applicable pay credit percentage pursuant to Section 4.1.1(b)(1)(iii)
of the 2001 SERP Restatement the Participant shall receive (during the period
from December 1, 2002 through November 30, 2007) three times the pay
credit that the Participant would otherwise be entitled to receive (i.e., the “actual”
plus two “deemed”).  Therefore, the
Participant’s applicable pay credit percentage during the following periods
shall be as follows:

 

1

 

	
  With respect to Participant’s Earnings

  attributable to the following periods:

  	
   

  	
  Participant’s applicable pay

  credit percentage shall be:

  
	
   

  	
   

  	
   

  
	
  December 1, 2002 to October 31, 2003

  	
   

  	
   

  	
  24%

  
	
  November 1, 2003 to November 30, 2003

  	
   

  	
   

  	
  30%

  
	
   

  	
   

  	
   

  	
   

  
	
  December 1, 2003 to November 30, 2004

  	
   

  	
   

  	
  30%

  
	
   

  	
   

  	
   

  	
   

  
	
  December 1, 2004 to November 30, 2005

  	
   

  	
   

  	
  30%

  
	
   

  	
   

  	
   

  	
   

  
	
  December 1, 2005 to July 31, 2006

  	
   

  	
   

  	
  30%

  
	
  August 1, 2006 to November 30, 2006

  	
   

  	
   

  	
  36%

  
	
   

  	
   

  	
   

  	
   

  
	
  December 1, 2006 to November 30, 2007

  	
   

  	
   

  	
  36%

  

 

c)              CB Generally Applicable
Pay Credit Percentage.  For
the purpose of determining Participant’s applicable pay credit percentage
pursuant to Section 4.1.1(b)(1)(iii) of the 2001 SERP Restatement during
periods subsequent to November 30, 2007, Participant’s applicable pay credit
percentage shall be determined under the generally applicable rules of the
Pension Plan; provided, however, that in applying those rules, Participant’s
actual Benefit Service shall be increased by all additional deemed years of
Benefit Service.

 

3)              INTEGRATION.  This agreement is intended to be and is an
Ancillary Agreement as that term is used in the SERP.  Insofar as this Ancillary Agreement relates
to Participant’s entitlement under the SERP, this Ancillary Agreement
represents the entire agreement of Participant and Employer and supercedes all
prior agreements and understandings, written or otherwise.  In no event shall this Ancillary Agreement
and any other agreement be construed or interpreted to provide duplicate
benefits.

 

IN WITNESS WHEREOF, Employer and Participant have executed this
Ancillary Agreement as of November 7, 2002.

 

 

	
  NORTHWEST AIRLINES, INC.

  	
  PARTICIPANT

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Richard H. Anderson

  	
   

  	
  /s/ Andrew C. Roberts

  	
   

  
	
  Richard H. Anderson,

  	
  Andrew C. Roberts

  
	
  Chief Executive Officer

  	
   

  
				

 

2

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