MANAGEMENT COMPENSATION AGREEMENTExecutive Compensation Plan Agreement |
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Exhibit 10.30
MANAGEMENT COMPENSATION AGREEMENT
between
NORTHWEST AIRLINES, INC.
and
ANDREW C. ROBERTS
dated as of
April 17, 2002
MANAGEMENT COMPENSATION AGREEMENT
MANAGEMENT COMPENSATION AGREEMENT made as of the 17th day of April, 2002 between Northwest Airlines, Inc., a Minnesota corporation (the Company) and Andrew C. Roberts (the Executive).
PREAMBLE
The Company and Executive hereby desire to enter into a Management Compensation Agreement dated as of April 17, 2002.
1. Terms of Employment.
1.1 Employment. The Company agrees to continue to employ Executive, and Executive agrees to continue to serve the Company, on the terms and conditions set forth herein.
1.2 Position and Duties. During the term of Executives employment hereunder, Executive shall continue to have his title, powers and duties as on the Effective Date or such other powers and duties as may from time to time be prescribed by the Company, provided that such powers and duties are consistent with or represent a promotion from Executives powers and duties as of the Effective Date, unless otherwise consented to in writing by Executive; provided, however, that as long as Executive retains a substantial portion of his then current oversight responsibility, the Company shall be permitted to transfer a portion of Executives oversight responsibility without the consent of Executive. Executive shall devote substantially all his working time and effort to the business and affairs of the Company and its affiliates.
2. Compensation.
2.1 Base Salary. Executives Base Salary shall be his base salary in effect on the Effective Date, as increased thereafter by the Company. Executives 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 20% of Base Salary in effect on the date of such wage reduction. For purposes of calculating any other payments or benefits hereunder (except as specified in Section 2.4) any reductions in Base Salary shall be disregarded. Executives Base Salary shall be payable in accordance with the Companys payroll policies.
2.2 Bonus. Executive shall be entitled to participate in the Companys Key Employee Annual Cash Incentive Plan (the KEACIP) or any successor annual bonus plan, the terms and conditions of which shall be established by the Board from time to time.
2.3 Expenses. During the term of Executives employment hereunder, Executive shall be entitled to receive prompt reimbursements for all reasonable expenses incurred in performing services hereunder, provided that Executive properly accounts therefor in accordance with Company policy.
2.4 Compensation and Benefit Programs of the Company. Except as set forth below, Executive shall continue while employed hereunder to participate in the Companys
employee compensation and benefit programs (or any successor programs) at levels in effect on the Effective Date. Exceptions to the preceding sentence are:
(a) Amounts payable to Executive under the Companys 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.
3. Airline Pass.
Subject to Executives continued employment with the Company through September 30, 2005 or if Executives employment hereunder is terminated by the Company other than for Cause prior to such date, Executive shall be entitled to receive upon termination of employment lifetime airline pass privileges for the personal use of Executive and his or her 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 Companys pass policies (hereinafter, Eligible Individuals). Such airline pass privileges (the Airline Pass) shall entitle Executive and Eligible Individuals to travel on regularly scheduled Northwest domestic and international flights, subject to all charges and fees then applicable to active management employees of the Company and their dependents and pursuant to the Companys pass policies in effect from time to time, with boarding priority of (i) F-1 or the equivalent thereof for ten (10) years from and after the date such pass is issued, (ii) Y-1/F-2 or the equivalent thereof for the next succeeding ten (10) years, and (iii) 2-R or the equivalent thereof after the aggregate twenty-year period described in clauses (i) and (ii) above. 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 Companys 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 airlines in the United States (other than the Company) ranked by revenue passenger miles.
4. Termination of Employment.
4.1 Upon Death. Executives employment hereunder shall terminate upon his death.
4.2 By the Company. The Company may terminate Executives employment hereunder at any time with or without Cause.
4.3 By the Executive. Executive may terminate his employment hereunder at any time for any reason.
4.4 Notice of Termination, Payments. Any termination of Executives 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;
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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 Executives 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 Executives 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 bonus under the Key Employee Cash Incentive Bonus Program, or any successor annual bonus plan, (the Incentive Bonus) for any calendar year ended before the Date of Termination, (iii) a pro rata share (based on days employed during the applicable year) of the Incentive Bonus Executive would otherwise have received with respect to the year in which the Date of Termination occurs, payable at the time the Incentive Bonus would otherwise be payable to Executive; provided, however, that 100% of the Incentive Bonus shall be determined solely with reference to the financial performance of the Company for the year (based on the goals previously established with respect thereto) (rather than a portion of the Incentive Bonus determined on the basis of individual performance); provided, further, in the event that Companys 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) 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 Executives termination of employment, a lump sum amount equal to two (2) times the sum of (i) Executives annual Base Salary and (ii) the target Incentive Bonus for Executive with respect to the year in which the Date of Termination occurs (or if no target has been set for that year, the target Incentive Bonus for the immediately preceding year).
(ii) With regard to group life insurance and group medical and dental insurance, until the earlier of the fourth anniversary of Executives Date of
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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 obtaining new employment.
(d) Notwithstanding anything else to the contrary in this Agreement, the Companys 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 Board/Committee Resignation. Executives 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 Companys 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 Companys or such affiliates designee or other representative.






