Document:

Exhibit 10.15

 

Execution Copy

 

AMENDED AND RESTATED

 

MANAGEMENT COMPENSATION AGREEMENT

 

between

 

NORTHWEST AIRLINES, INC.

 

and

 

NEAL S. COHEN

 

dated as of

 

April 14, 2008

 

 

AMENDED AND RESTATED MANAGEMENT COMPENSATION
AGREEMENT

 

AMENDED AND RESTATED MANAGEMENT COMPENSATION
AGREEMENT made as of the 14th day of April, 2008 between Northwest
Airlines, Inc., a Minnesota corporation (the “Company”) and Neal S.
Cohen (the “Executive”).

 

PREAMBLE

 

WHEREAS, Executive and the Company are
parties to a Management Compensation Agreement dated as of May 2, 2005
(the “Prior Agreement”); and

 

WHEREAS, Executive and the Company desire to
amend and restate the Prior Agreement as provided herein.

 

NOW, THEREFORE, as of the date hereof, the
Company and Executive have agreed to terminate the Prior Agreement as of the
date hereof and replace the Prior Agreement with this Agreement, which shall
supersede the Prior Agreement in all respects.

 

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 an Executive Vice President 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, provided that Executive shall be permitted to serve
on the board of directors of one or more companies so long as such service does
not interfere with Executive’s obligations hereunder and is in accordance with
the Company’s policies.

 

2.             Compensation and
Benefits.

 

2.1           Base Salary.  Executive’s Base Salary as of the Effective
Date shall be $423,938.  Executive’s Base
Salary in effect from time to time may only be reduced in connection with a
base wage reduction generally applicable to salaried employees of the Company
in an amount not more than any such reduction incurred by other senior
executives of the Company after the Effective Date, calculated as a percentage
of base salary.  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 three cash payments of $100,000 each, less
all applicable withholding taxes (the “Cash Retention Payments”), on May 1
of 2008, 2009 and 2010, so long as Executive remains an active full-time
employee of the Company on the applicable payment date.

 

 

(b)  Executive shall be
entitled to participate in the Company’s Key Employee Annual Cash Incentive
Plan (the “KEACIP”) or any successor annual incentive plan, the terms
and conditions of which shall be established from time to time by the
Compensation Committee.

 

(c)  Executive shall be
entitled to participate in the Company’s Long-Term Cash Incentive Plan or any
successor annual incentive plan, to the extent such plan continues in effect,
the terms and conditions of which shall be established from time to time by the
Compensation Committee.

 

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 from
time to time for salaried employees at a level comparable to Executive,
provided that Executive shall not participate in any severance pay plan
maintained by the Company except to the extent necessary to receive any
severance 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.

 

2.6           Indemnification.  Executive shall be entitled to be indemnified
by the Company in accordance with the indemnification provision set forth in
the Company’s Articles of Incorporation or By-Laws (as either such document may
be modified, amended or replaced from time to time, collectively, the “Governing
Instruments”).

 

3.             Other Benefits.

 

3.1           Airline Pass.  In the event (A) Executive remains an
active full-time employee of the Company continuously from the Effective Date
through April 1, 2009 or (B) Executive’s employment with the Company
is terminated by the Company other than for Cause or by Executive for Good
Reason on or before April 1, 2009, then 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 non-revenue travel
pursuant to the Company’s pass policies (hereinafter, “Eligible Individuals”).  Such airline pass privileges (the “Airline
Pass”) shall entitle Executive and 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 F-1 or the equivalent
thereof for a period of ten (10) years from and after the date such
pass is issued and F-1R thereafter.  Executive shall be responsible 

 

2

 

for any personal income tax
liability arising from such pass travel. 
Notwithstanding the foregoing, all benefits under this Section 3.1
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 air carrier
that competes with the Company (or any of its affiliates).

 

3.2           Medical and Dental
Benefits.  In the event (A) Executive
remains an active full-time employee of the Company continuously from the
Effective Date through April 1, 2009 or (B) Executive’s employment
with the Company is terminated by the Company other than for Cause or by
Executive for Good Reason on or before April 1, 2009, then, following
Executive’s termination of employment and thereafter during the Executive’s
lifetime, Executive and his eligible dependents shall be entitled to
participate in the Company’s medical and dental plans generally applicable to
all management employees of the Company under the same terms and conditions as
shall apply to such management employees; provided, however, that coverage
under such plans shall be secondary to Medicare or any other government
insurance program in which Executive may be entitled to participate, and
provided further, if in the future Executive becomes employed by another
employer, such coverage shall become secondary to any coverage provided by such
employer for the period in which Executive is entitled to such coverage.  In addition, while employed by the Company
hereunder, Executive shall be entitled to participate in the Company’s Medical
Expense Reimbursement Program on the same terms and conditions generally
applicable to other executives of the Company.

 

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.

 

4.5           Board/Committee Resignation.  Executive’s termination of employment for any
reason, shall constitute, as of the Date of 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
governing body Executive serves as the Company’s or such affiliate’s designee
or other representative.

 

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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 incentive payment under the Key Employee
Annual Cash Incentive Program, or any successor annual incentive plan, (the “Incentive
Payment”) 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 Payment Executive would otherwise have received with respect to the
year in which the Date of Termination occurs, payable at the time the Incentive
Payment would otherwise be payable to Executive; provided, however,
that 100% of the Incentive Payment 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 Payment 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 Payment
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),
the Company shall pay Executive, no later than thirty (30) days following the
Date of Termination, a lump sum cash payment (the “Severance Payment”)
equal to the product of two (2) times the sum of (i) Executive’s
annual Base Salary and (ii) the target Incentive Payment 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 Payment for the
immediately preceding year).

 

(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.

 

4

 

(d)  Notwithstanding anything else to
the contrary in this Agreement, the Company’s obligation regarding the payments
provided for in Section 5.2(b) hereof 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.

 

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

 

(a) 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.

 

(b) Executive acknowledges that his
services are of special, unique and extraordinary value to the Company.  Accordingly, so long as the Company has
complied with its obligations set forth in Section 5 hereof, 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 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.

 

(c) 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.

 

(d)  Executive agrees that, following
his termination of employment, he will refer all inquiries by third parties
regarding his employment with the Company to the Senior Vice 

 

5

 

President –
Human Resources of the Company, and the Company agrees that, following
Executive’s termination of employment, neither the Chief Executive Officer nor
the Senior Vice President – Human Resources of the Company shall make, in
response to any such inquiry, any untruthful or disparaging statements, written
or oral, about Executive’s conduct during his employment with the Company.

 

(e)  Both the Company and Executive agree
that any breach of the terms of this Section 6 by such party would result
in irreparable injury and damage to the other party for which there would be no
adequate remedy at law, and that, in the event of said breach or any threat of
breach by such party, the other party 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 such
party 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 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.  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 this Agreement.

 

(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 other communications provided for
herein shall be in writing (which shall include notice by facsimile
transmission) and shall be delivered or mailed (or if by graphic scanning or
other facsimile communications equipment of the sending party hereto, delivered
by such equipment), addressed as follows:

 

6

 

(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 a party may from time to time designate in writing in accordance
with this Section.  All notices and other
communications given to any party hereto in accordance with the provisions of
this Agreement shall be deemed to have been given when delivered if delivered
by hand, when transmission confirmation is received if delivered by facsimile,
three business days after mailing if mailed, and one business day after deposit
with an overnight courier service if delivered by overnight courier.  Notwithstanding the foregoing, if a notice or
other communication is actually received after 5:00 p.m. at the recipient’s
designated address, such notice or other communication shall be deemed to have
been given the later of (i) the next business day or (ii) the
business day on which such notice or other communication is deemed to have been
given pursuant to the immediately preceding sentence.

 

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.

 

11.           Certain Defined
Terms.

 

As used herein, the following terms have the
following meanings:

 

“Agreement” shall mean this Amended
and Restated 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 

 

7

 

turpitude or (v) a
material breach of (a) the Company’s Code of Business Conduct or (b) the
provisions of this Agreement.

 

  “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 the date
of this Agreement, as set forth above.

 

“Eligible Individuals” shall have the
meaning set forth in Section 3.1 hereof.

 

“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 incentive
payment under the KEACIP or any successor annual incentive plan (except as
permitted hereunder);

 

(b) any material change in Executive’s job  responsibilities, provided that as long
as Executive retains a substantial portion of his then current oversight
responsibilities, a transfer of a portion of such oversight responsibilities
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. Paul Metropolitan Area; or

 

(d) a material breach by the Company 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 addition, 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 circumstances constituting Good Reason hereunder.

 

8

 

“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.

 

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

 

“Severance Payment” shall have the meaning set forth in Section 5.2(b) 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.

 

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.  In the event the parties
cannot agree upon a single arbitrator, each party shall select an arbitrator
and the two arbitrators so chosen shall then select a single arbitrator.  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 

 

9

 

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 (subject to his reasonable availability) 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.

 

19.           Entire Agreement.

 

This Agreement, together with the Release 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.

 

20.           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.

 

10

 

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

 

 

	
   

  	
  NORTHWEST AIRLINES CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
     /s/ Douglas M. Steenland

  
	
   

  	
   

  	
    Douglas M. Steenland

  
	
   

  	
   

  	
    Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  NORTHWEST AIRLINES, INC.

  

 

 

	
   

  	
  By: 

  	
     /s/ Douglas M. Steenland

  
	
   

  	
   

  	
    Douglas M. Steenland

  
	
   

  	
   

  	
    Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EXECUTIVE:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/
  Neal S. Cohen

  
	
   

  	
    Neal
  S. Cohen

  
	
   

  	
   

  
	
   

  	
   Executive’s
  Address:

  

 

11Exhibit 10.16

 

Execution Copy

 

MANAGEMENT COMPENSATION AGREEMENT

 

between

 

NORTHWEST AIRLINES, INC.

 

and

 

DAVID M. DAVIS

 

dated as of

 

April 14, 2008

 

 

MANAGEMENT COMPENSATION AGREEMENT

 

MANAGEMENT COMPENSATION AGREEMENT made as of
the 14th day of April, 2008 between Northwest Airlines, Inc., a
Minnesota corporation (the “Company”) and David M. Davis (the “Executive”).

 

WITNESSETH:

 

WHEREAS, Executive and the Company are
parties to a Management Compensation Agreement dated as of September 13,
2005 (the “Prior Agreement”);

 

WHEREAS, since the execution of the Prior
Agreement, Executive has been promoted to the position of Executive Vice
President and Chief Financial Officer of the Company;

 

WHEREAS, Executive and the Company desire to
enter into a new Management Compensation Agreement to reflect certain changes
applicable to Executive in his new position.

 

NOW, THEREFORE, as of the date hereof, the
Company and Executive have agreed to terminate the Prior Agreement as of the
date hereof and replace the Prior Agreement with this Agreement, which shall
supersede the Prior Agreement in all respects.

 

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 an Executive Vice
President 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.  During the term of Executive’s employment
hereunder, Executive shall receive the compensation and benefits set forth in
this Section 2.

 

2.1     Base
Salary.  Executive’s Base Salary
shall be his base salary in effect on the Effective Date, as may be increased
from time to time thereafter by the Company, provided that Executive’s Base
Salary may be reduced in connection with one or more base wage reductions generally
applicable to salaried employees of the Company.  Executive’s Base Salary shall be payable in
accordance with the Company’s payroll policies.

 

2.2     Incentive
Compensation.  Executive shall be
entitled to participate in the Company’s Key Employee Annual Cash Incentive
Plan (the “KEACIP”) and the Company’s Long-Term Cash Incentive Plan (“LTIP”), to
the extent such plans continue in effect, or any successor incentive
compensation plans on the terms and conditions to be established from time to
time by the Board of Directors or a committee thereof.

 

 

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.  Executive
shall be entitled to participate while employed hereunder in the Company’s
employee benefit programs at levels in effect from time to time for salaried
employees at a level comparable to Executive, provided that Executive shall not
participate in any severance pay plan maintained by the Company except to the
extent necessary to receive any severance payments specifically provided for
hereunder.

 

3.     Other Benefits.

 

3.1     Airline
Pass.  In the event (A) Executive
remains an active full-time employee of the Company continuously from the
Effective Date through August 16, 2009 or (B) Executive’s employment
with the Company is terminated by the Company other than for Cause or by
Executive for Good Reason on or before August 16, 2009, then 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
non-revenue travel pursuant to the Company’s pass policies (hereinafter, “Eligible
Individuals”).  Such airline pass
privileges (the “Airline Pass”) shall entitle Executive and 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 F-1 or the equivalent thereof for a period of ten (10) years from
and after the date such pass is issued and F-1R thereafter.  Executive shall be responsible for any
personal income tax liability arising from such pass travel.  Notwithstanding the foregoing, all benefits
under this Section 3.1 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 air carrier that competes with the Company (or any of its
affiliates).

 

3.2     Medical
and Dental Benefits.  In the event (A) Executive
remains an active full-time employee of the Company continuously from the
Effective Date through June 1, 2011 or (B) Executive’s employment
with the Company is terminated by the Company other than for Cause or by
Executive for Good Reason on or before June 1, 2011, then, following
Executive’s termination of employment and thereafter during the Executive’s
lifetime, Executive and his eligible dependents shall be entitled to
participate in the Company’s group medical and dental plans generally
applicable to salaried employees of the Company under the same terms and
conditions as shall apply to such salaried employees; provided, however, that
such coverage shall be secondary to Medicare or any other government insurance
program in which Executive may be entitled to participate, and provided
further, if Executive becomes employed by another employer, such coverage shall
become secondary to any coverage provided by such employer for the period in
which Executive is entitled to such coverage. 
In addition, while employed by the Company hereunder and so long as such
program continues in effect, Executive shall be entitled 

 

2

 

to participate in the Company’s
Medical Expense Reimbursement Program on the same terms and conditions
generally applicable to other executives of the Company.

 

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 by Executive (other than by death or Disability)
shall be communicated by thirty (30) days’ advance written notice of termination
to the Company.

 

4.5     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 (and any committees thereof) and 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 governing body Executive serves as the Company’s or such affiliate’s
designee or other representative.

 

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)   The Company shall pay Executive (i) his accrued
and unpaid Base Salary through the Date of Termination, (ii) any incentive
payment under the Key Employee Annual Cash Incentive Program, or any successor
annual incentive plan, (the “Incentive Payment”) 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 Payment Executive
would otherwise have received with respect to the year in which the Date of 

 

3

 

Termination occurs, payable at the time the Incentive Payment would
otherwise be payable to Executive; provided, however, that 100%
of the Incentive Payment 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 Payment 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 Payment
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)   In addition to the compensation and benefits
described in Section 5.2(a), the Company shall pay Executive, no later
than thirty (30) days following the Date of Termination, a lump sum amount equal
to the product of two (2) times the sum of (i) Executive’s annual
Base Salary and (ii) the target Incentive Payment 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 Payment for the immediately
preceding year).

 

(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 benefits continuation
provided for in this Section 5.2 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 the Provisions of Code Section 409A.  Notwithstanding anything in this Agreement to
the contrary, any payment under this Agreement to Executive shall be deferred,
if necessary, until the first date that such payment could be made without
subjecting Executive to taxes imposed by reason of Code Section 409A.

 

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

 

(a)  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, 

 

4

 

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.

 

(b)  Executive acknowledges that his
services are of special, unique and extraordinary value to the Company.  Accordingly, Executive shall not 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 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.

 

(c)  While employed by the Company and
thereafter, Executive agrees not to directly or indirectly make any disparaging
communication, or release any information or encourage others to make any
communication or release any information, that is designed to embarrass or
disparage the Company, its affiliates, their predecessors or successors or any
of their past or present officers, directors, stockholders, partners, members,
agents or employees or the Company’s business practices, operations or
personnel policies or 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.

 

(d)  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 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.

 

5

 

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 other communications provided for
in this Agreement shall be in writing (which shall include notice by facsimile
transmission) and shall be delivered or mailed, addressed as follows:

 

(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, Dept. A1180, Eagan, Minnesota 55121, Attention:  General Counsel,

 

or, in each case, to such other
address as a party may from time to time designate in writing in accordance with
this Section 9.  All notices and
other communications given to any party hereto in accordance with the
provisions of this Agreement shall be deemed to have been given when delivered
if delivered by hand, when transmission confirmation is received if delivered
by facsimile, three business days after mailing if mailed, and one business day
after deposit with an overnight courier service if delivered by overnight
courier.  Notwithstanding the foregoing,
if a notice or other communication is actually received after 5:00 p.m. at
the recipient’s designated address, such notice or other communication shall be
deemed to have been given the later of (i) the next business day or (ii) the
business day on which such notice or other communication is deemed to have been
given pursuant to the immediately preceding sentence.

 

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.

 

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 salary
of the Executive in effect from time to time under Section 2.1.

 

6

 

“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.

 

“Date of Termination” shall mean, with
respect to Executive, the date of termination of Executive’s employment
hereunder in accordance with the terms of this Agreement.

 

“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 the date
of this Agreement, as set forth above.

 

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

 

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

 

(b)           any
substantial and sustained diminution in Executive’s authority or
responsibilities hereunder, provided that the Company shall be permitted
from time to time to transfer a portion of Executive’s oversight
responsibilities without the consent of Executive as long as Executive retains
a substantial portion of his then current oversight responsibilities;

 

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

 

(d)           a
material breach by the Company 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 

 

7

 

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 addition, 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.

 

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.

 

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 

 

8

 

and expenses
incurred in connection with any arbitration including, without limitation,
arbitrator and attorney’s fees, shall be paid by the nonprevailing 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.

 

19.   Entire Agreement.

 

This Agreement, together with the Release,
and the Company’s employee benefit plans in which Executive will continue to
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.

 

9

 

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

  
	
   

  	
   

  	
    President & Chief
  Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EXECUTIVE:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
      /s/ David M. Davis

  
	
   

  	
  David M. Davis

  
	
   

  	
   

  
	
   

  	
  Executive’s Address:

  

 

10

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