Document:

Exhibit 10.2

 

FINAL

 

AMENDMENT

TO THE

NORTHWEST AIRLINES CORPORATION

KEY EMPLOYEE ANNUAL CASH INCENTIVE PROGRAM

(Effective as of April 14, 2008)

 

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

 

WHEREAS, Northwest Airlines Corporation (the “Company”) currently
maintains the Northwest Airlines Corporation Key Employee Annual Cash Incentive
Program (the “KEACIP”);

 

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

 

1.                             Amendment
of the KEACIP. Section 2 of the KEACIP is hereby amended by adding
thereto the following definitions.

 

“Cause” means “Cause” as defined in a management compensation
agreement 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 the
occurrence of any one or more of the following: (a) an act or acts of
personal dishonesty by the Participant intended to result in substantial
personal enrichment of the Participant at the expense of the Company or a
Participating Employer, (b) an act or acts of personal dishonesty by the
Participant intended to cause substantial injury to the Company or a
Participating Employer, (c) material breach (other than as a result of a
Total and Permanent Disability) by the Participant of the Participant’s
obligations under the terms and conditions of the Participant’s employment,
which action was (i) undertaken without a reasonable belief that the
action was in the best interests of the Company or a Participating Employer and
(ii) not remedied within fifteen (15) days after receipt of written notice
from the Company or a Participating Employer specifying the alleged breach, or (d) the
conviction of the Participant of a felony.”

 

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

 

“Good Reason” means “Good Reason” as defined in a management
compensation 

 

 

agreement between a Participant and the Company or a Participating
Employer or, if not defined therein or if there is no such agreement, “Good
Reason” shall mean any one or more of the following: (i) a material
reduction in a Participant’s base salary or target bonus below the level of the
Participant’s base salary or target bonus immediately prior to the Change of
Control or (ii) the relocation of the Participant’s principal place of
employment by more than 50 miles (excluding travel requirements relating to the
Participant’s duties), without the Participant’s consent; 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 the
Participant 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 60th
day following the later of its occurrence or the Participant’s knowledge
thereof, unless the Participant has given the Company written notice thereof
prior to such date.

 

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

 

2.             Amendment
of the KEACIP. Section 6 of the KEACIP is hereby amended by adding
thereto the following.

 

“c).          Change of Control

 

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

 

d).           Termination
of Employment Following a Change of Control

 

Notwithstanding
any provision herein to the contrary (including Section 5(a) hereof),
in the event that following a Change of Control (A) a Qualifying
Termination occurs during the Program Year in which the Change of Control
occurs, then the Company shall pay such Participant, as soon as practicable
(but in no event later than ten (10) days) following Executive’s
termination of employment, a lump sum amount equal to a pro rata share (based
on days elapsed during the applicable year) of the Participant’s Target
Incentive Level under the Program or any successor incentive compensation plans
such Participant would otherwise have received with respect to the year (the “Pro-Rata
Bonus”); provided, however, the Committee
may, in its discretion, equitably increase (but 

 

 

not decrease)
the Pro-Rata Bonus payment (taking into consideration, without limitation, the
actual incentive level anticipated to be achieved, based on the established
performance measures for the applicable period); or (B) a Qualifying
Termination  occurs after a completion of
the Program Year in which the Change of Control occurred but prior to a Payment
Date for such Program Year, the Company shall pay such Participant on the
normally scheduled Payment Date for such Program Year, a lump sum amount equal
to the greater of (i) the Participant’s Target Incentive Level established
for the applicable period or (ii) the Participant’s actual incentive level
achieved, based on the established performance measures for the applicable
period; provided, however, that
such payments under (A) or (B) above shall not duplicate nor derogate
any payments in respect of a partial or full year bonus under the Program in
respect of the same periods under the terms of such Participant’s management
compensation agreement or other agreement with the Company or a Participating
Employer.”

 

3.             Amendment
of the KEACIP. Section 6(a) of the KEACIP is hereby deleted in
its entirety and replaced with the following.

 

“a)           Payment
Date

 

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

 

4.             Amendment
of the KEACIP. Section 7(a) of the KEACIP is hereby amended by
adding thereto the following.

 

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

 

5.             Amendment
of the KEACIP. Section 7 of the KEACIP is hereby amended by adding
thereto the following.

 

“f)           Adjustments Upon a Change of Control

 

In the event of a Change of Control, the Committee shall, in good
faith, make any adjustment it reasonably determines to be equitable to the
performance measures set forth in Section 4 of the Program to reflect any
change to the business of the Company or a Participating Employer (or any
successor to the Company or a Participating Employer) resulting from such
Change of Control.

 

 

g)            Successors

 

The Program shall constitute a binding obligation to 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 the
Program if no such succession had taken place. 
In any agreement providing for the sale of all or substantially all of the
Company’s assets, the Company shall cause the acquiring party to assume and
agree to perform the Company’s obligations under the Program.”

 

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

 

Adopted by the Compensation Committee of the Board of Directors of Northwest
Airlines Corporation on April 14, 2008.Exhibit 10.3

 

FINAL

 

AMENDMENT NO. 1

TO THE

NORTHWEST AIRLINES, INC.

2003 LONG TERM CASH INCENTIVE PLAN

(Effective as of April 14, 2008)

 

This AMENDMENT
NO. 1 TO THE NORTHWEST AIRLINES, INC. 2003 LONG TERM CASH INCENTIVE PLAN (the “Amendment”)
is hereby adopted and approved by the Compensation Committee of Board of
Directors of Northwest Airlines Corporation (the “Northwest Airlines Corp.”) as
of the date set forth above.

 

Pursuant to
the authority granted under Section 7(f) of the Northwest Airlines, Inc.
2003 Long Term Cash Incentive Plan (the “Plan”), the Compensation Committee of
the Board of Directors of Northwest Airlines Corp. hereby amends the Plan as
follows:

 

1.                             Amendment
of the Plan.  The definition of “Cause”
under the Plan is hereby deleted in its entirety and replaced with the
following:

 

““Cause” means “Cause” as defined in a management compensation
agreement between a Participant and the Company or a Subsidiary or, if not
defined therein or if there is no such agreement, “Cause” shall mean the
occurrence of any one or more of the following: (a) an act or acts of
personal dishonesty by the Participant intended to result in substantial
personal enrichment of the Participant at the expense of the Company or a
Subsidiary, (b) an act or acts of personal dishonesty by the Participant
intended to cause substantial injury to the Company or a Subsidiary, (c) material
breach (other than as a result of a “Disability” (as defined in an Award, or if
not defined therein, “Disability” within the meaning of Section 22(e)(3) of
the Internal Revenue Code of 1986, as amended from time to time, as determined
by the Committee)) by the Participant of the Participant’s obligations under
the terms and conditions of the Participant’s employment, which action was (i) undertaken
without a reasonable belief that the action was in the best interests of the
Company or a Subsidiary and (ii) not remedied within fifteen (15) days
after receipt of written notice from the Company or a Subsidiary specifying the
alleged breach, or (d) the conviction of the Participant of a felony.”

 

2.                             Amendment
of the Plan.  The clause (iii) of
the definition of “Good Reason” under the Plan is hereby deleted in its
entirety and replaced with the following:

 

“(iii)        the relocation of the
Participant’s principal place of employment by more than 50 miles (excluding
travel requirements relating to the Participant’s duties), without the
Participant’s consent;”

 

 

3.                             Amendment of the Plan.  The following is added to the definition of “Good
Reason” at the end thereof:

 

“provided, however, that the foregoing events in clause
(i), (ii) or (iii) shall constitute Good Reason only if the Company
fails to cure such event within thirty (30) days after receipt from the
Participant 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 60th
day following the later of its occurrence or the Participant’s knowledge
thereof, unless the Participant has given the Company written notice thereof
prior to such date.”

 

4.                             Amendment
of the Plan.  Section 3 of the
Plan is amended by adding thereto the following:

 

“Notwithstanding the foregoing, the Administrator may, in its
discretion, equitably increase (but not decrease) the payment under clause (A) above
(taking into consideration, without limitation, the actual incentive level
anticipated to be achieved, based on the established performance measures for
the applicable Performance Period).”

 

5.             Amendment of the
Plan.  Section 5 of the Plan is
amended by adding thereto the following:

 

“Notwithstanding the foregoing, in the event of a Change in Control,
the Administrator shall not be permitted to reduce any cash payment otherwise
payable under then outstanding Awards or terminate any then outstanding Awards
at any time prior to a Payment Date.  In
the event of a Change in Control, the Administrator shall, in good faith, make
any adjustment reasonably determined by it to be equitable to the performance
levels set forth in an Award with regard to the Performance Period in effect at
the time of the Change in Control to reflect any change to the business of the
Company (or any successor to the Company) resulting from such Change in
Control.”

 

6.                             Amendment
of the Plan. The following Section 9 is hereby added to the Plan:

 

“Section 9.             Successors.

 

The Plan shall constitute a binding obligation to 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 the
Plan if no such succession had taken place. 
In any agreement providing for the sale of all or substantially all of
the Company’s assets, the Company shall cause the acquiring party to assume and
agree to perform the Company’s obligations under the Plan.”

 

7.                             Definitions.
Except as otherwise defined in this Amendment, capitalized terms 

 

 

used but not
defined herein shall have the meanings given them in the Plan.

 

8.                             General.  References to the “Plan” contained in the
Plan shall mean the Plan as amended by this Amendment.  Except as herein provided, the Plan shall
remain unchanged and in full force and effect.

 

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

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