Exhibit 10.19
NON QUALIFIED BENEFIT AGREEMENT
THIS NON QUALIFIED BENEFIT AGREEMENT ("Agreement") by and between DELTA AIR
LINES, INC. (hereinafter the "Company") and ______________ (hereinafter "Key
Employee") is made and entered into as of the 1st day of January, 2004. The
provisions hereof shall be effective for death, retirement, or other termination
of employment effective on or after the 1st day of January, 2004,
W I T N E S S E T H :
WHEREAS, the Company sponsors for its full time non pilot employees,
including Key Employee, the Delta Retirement Plan (the "Retirement Plan") and
the Delta Family-Care Disability and Survivorship Plan (the "Disability and
Survivorship Plan"), which are broad based tax favored employee benefit plans
that provide retirement, survivor, and disability benefits to plan participants
and beneficiaries; and
WHEREAS, even though all participants in the Retirement Plan and the
Disability and Survivorship Plan generally receive benefits determined under the
same compensation based formulas, various sections of the Internal Revenue Code
of 1986, as amended (the "Code"), including, but not limited to, Sections 79,
401(a)(4), 401(a)(17), 415, and 505(b) restrict either: (i) compensation that
may be taken into account in determining benefits under a qualified pension
plan; (ii) benefits that can be paid from a qualified pension plan; (iii)
compensation that may be taken into account in determining benefits for
participants in a Voluntary Employee Beneficiary Association ("VEBA") described
in Section 501(c)(9) of the Code; or (iv) benefits that can be paid from a VEBA
(such limitations collectively or individually hereinafter referred to as the
"Restrictions"); and
WHEREAS, the Company wishes to make up under non qualified benefit
plans and/or this Agreement any reduction in Key Employee's retirement income
benefit, disability or survivor benefits under either the Retirement Plan or the
Disability and Survivorship Plan which results from the Restrictions, or any
other applicable laws, statutes, or regulations which restrict in any way the
benefits that can be paid from a VEBA or qualified pension plan; and
WHEREAS, the Company has established the 2002 Delta Excess Benefit Plan
and the 2002 Delta Supplemental Excess Benefit Plan (such plans collectively
referred to as the "Plans") and entered into this Agreement in order to provide
for benefits that cannot be paid from the Retirement Plan and the Disability and
Survivorship Plan because of the Restrictions, as well as for other purposes;
and
WHEREAS, the Company and Key Employee previously executed an excess
benefit agreement dated March 15, 2002 (the "2002 excess benefit agreement") in
which the Company
agreed, among other things, to make certain contributions in 2002, 2003 and 2004
to an employee grantor trust established by Key Employee; and
WHEREAS, Key Employee and the Company have agreed that the 2002 excess
benefit agreement should be amended and restated in its entirety as this
Agreement, and have also agreed that the Company will not make any further
contributions to the employee grantor trust established by Key Employee,
including the contribution to be made in 2004 under the 2002 excess benefit
agreement; and
WHEREAS, in exchange for participation in the Plans and the benefits
provided under this Agreement, and on behalf of himself or herself, and his or
her beneficiaries and Eligible Family Members, by execution of this Agreement,
Key Employee agrees that this Agreement supersedes, terminates and cancels any
and all previous excess benefit agreements with the Company he or she may have
entered into (except as provided in Section 20);
NOW, THEREFORE, the parties hereby agree as follows:
1. Definitions. Unless specifically defined in this Agreement, or
indicated otherwise, capitalized terms used in this Agreement shall have the
meaning given those terms in the Retirement Plan or Disability and Survivorship
Plan. The following definitions shall apply herein:
Actuarial Equivalent. An amount is the Actuarial Equivalent of any
other amount if the actuarial reserve required to provide the same is equal to
the actuarial reserve required to provide such other amount. The parties
acknowledge that, in selecting appropriate factors to determine actuarial
equivalence, the immediate taxability of any amounts paid hereunder as well as
the demographics of the covered group must be taken into account; otherwise, Key
Employee will not receive the same value over time under this Agreement as he or
she would have had had the Restrictions not applied and all amounts payable to
Key Employee been paid from a qualified plan. Therefore, it is not appropriate
to use an interest rate benchmark or mortality table that does not sufficiently
consider these factors. Unlike distributions from qualified plans, which can be
tax deferred, amounts paid hereunder are taxable in the year paid; therefore the
interest rate should reflect that immediate taxation. An accepted way of
recognizing this distinction is to use a post tax interest benchmark. With
respect to mortality, the parties acknowledge that the participants in the Plans
consist solely of white collar employees and are relatively small in number. In
such a case, it is appropriate to use a mortality table which reflects this
demographic. Therefore, the factors to use to determine actuarially equivalence
under this Agreement shall be: (a) interest: the rate equal to the then current
effective yield of the ▇▇▇▇▇▇▇ ▇▇▇▇▇ AAA Rated Municipal Revenue Bond Index,
▇▇▇▇▇▇▇ ▇▇▇▇▇ Ticker: URA1 (or the yield of a similar index determined by the
Committee), determined as of the date of retirement, termination of employment,
or death, as the case may be; provided, however, that if such date falls on a
day when the U.S. fixed income markets are closed or is a day on which the index
is being rebalanced, determined on the next following business day, in each case
with such rate reduced for any applicable state taxes; (b) mortality: the unisex
mortality rate using the RP-2000
- 2 -
Mortality Table, with white collar adjustment applied and reflecting mortality
improvements using Scale AA projected to the time the Actuarial Equivalent is
being determined; and (c) joint and survivor benefit factor: if a benefit is
payable in the form of a joint and 50% survivor annuity, use actual marital
status and age of Spouse; provided, for this purpose, a Domestic Partner shall
be treated as a Spouse. Other factors or assumptions, if any, necessary to
determine the Actuarial Equivalent of an amount shall be determined by the
Committee in its sole discretion.
Benefit Commencement Date. The day that the retirement income benefit,
disability benefit or survivor benefit, as the case may be, commences under the
Retirement Plan or Disability and Survivorship Plan with respect to Key Employee
or his or her Spouse, Domestic Partner, or Eligible Family Member(s).
Committee. The Personnel & Compensation Committee of the Company's
Board of Directors.
Company Approved Annuity Provider. An annuity provider who is, and
whose Excess Premium, if any, is approved by the Company in its sole discretion
from time to time. In determining whether to approve such provider and the
Excess Premium, if any, the Company shall consider, among other things, the
rates and discount factors proposed by the provider.
Deemed Earnings. An amount, compounded annually, using an annual
interest rate equal to the sum of (a) the prime rate as published in the Wall
Street Journal on the date the particular distribution or withdrawal was made
from Key Employee's Grantor Trust; and (b) 2%.
Deferred Vested Monthly Supplemental Retirement Income. The Actuarial
Equivalent (expressed as a monthly amount and determined at the time Key
Employee's employment terminates) of the amount equal to (a) minus (b) where:
(a) equals the monthly amount of Deferred Vested benefits payable
under the Retirement Plan which Key Employee would receive if
the Restrictions as reflected in the Retirement Plan and the
Code were not in effect and Key Employee had elected to begin
receiving his or her Deferred Vested benefit at age 52; and
(b) equals the monthly Deferred Vested benefit payable under the
Retirement Plan which Key Employee would receive under the
Retirement Plan had Key Employee elected to begin receiving
his Deferred Vested benefit at age 52 (assuming no changes in
the Restrictions between the date of termination and age 52).
If Key Employee has a Spouse or Domestic Partner at the time of termination of
employment, Key Employee shall elect at the time of such termination whether to
determine the Deferred Vested Monthly Supplemental Retirement Income as an
actuarially reduced joint and 50% survivor annuity or as an unreduced single
life annuity. This election shall not be binding with respect to amounts to be
received by Key Employee under the Retirement Plan.
- 3 -
For purposes of determining benefits under (a) and (b) above, any QDRO will be
taken into account, such that the total benefits payable under this Agreement
will be deemed to be (but will not exceed) those which would be payable absent
the QDRO.
Deferred Vested PRSB Monthly Supplemental Retirement Income. An amount
equal to fifty percent (50%) of Key Employee's Deferred Vested Monthly
Supplemental Retirement Income, determined as if Key Employee were single at his
or her death.
Deferred Vested PRSB Supplemental Lump Sum. The single sum Actuarial
Equivalent of the Deferred Vested PRSB Monthly Supplemental Retirement Income
determined as of the date of Key Employee's death; provided however, if Key
Employee previously established an employee grantor trust pursuant to an
agreement between the Company and Key Employee, the Deferred Vested PRSB
Supplemental Lump Sum shall be reduced by the Pre Tax Value of Key Employee's
Grantor Trust. If Key Employee has a Domestic Partner at death, the Deferred
Vested PRSB Supplemental Lump Sum shall be adjusted to reflect the fact that the
Domestic Partner is not eligible for pre retirement survivor benefits under the
Retirement Plan and that the monthly survivor income from the Disability and
Survivorship Plan is payable, if at all, for only up to 10 years following Key
Employee's death. The purpose of such adjustment is to make payments to the
Domestic Partner equivalent to the payment which would have been made to such
Domestic Partner had he or she qualified as a Spouse under the Retirement Plan,
taking into account payments to be made from the Disability and Survivorship
Plan, the Retirement Plan and this Agreement.
Deferred Vested Supplemental Retirement Income Lump Sum. The single sum
Actuarial Equivalent of the Deferred Vested Monthly Supplemental Retirement
Income determined as of the date of Key Employee's termination of employment;
provided however, if Key Employee previously established an employee grantor
trust pursuant to an agreement between the Company and Key Employee, the
Deferred Vested Supplemental Retirement Income Lump Sum shall be reduced by the
Pre Tax Value of Key Employee's Grantor Trust.
Domestic Partner. The person identified by Key Employee as his or her
domestic partner in an Affidavit of Domestic Partner filed with the Company, and
who at the time of Key Employee's death, retirement or other termination of
employment, as the case may be, continues to meet all requirements for a
domestic partner under the Company's then current domestic partner program. For
all purposes of this Agreement, a Domestic Partner shall be treated as a Spouse,
or Surviving Spouse, as the case may be, and the term "Spouse" or "Surviving
Spouse" as used herein shall include a Domestic Partner. The purpose of this
provision is that, taking into account the provisions of, and payments under the
Retirement Plan, Disability and Survivorship Plan and this Agreement, the Key
Employee and his or her Domestic Partner shall receive the same amounts (but no
more) payable, to the greatest extent possible, in the same form and at the same
time, and subject to the same reductions as those amounts payable under such
plans and this Agreement as if such Domestic Partner had been the legal Spouse
of Key Employee for purposes of the Retirement Plan. Provided however, any such
payment is not intended to duplicate monthly survivor benefits made under the
Disability and Survivorship Plan to such Domestic Partner and no benefit shall
be payable under this Agreement that is payable from the
- 4 -
Disability and Survivorship Plan, taking into account the Restrictions, such
that the Domestic Partner would receive greater benefits than would have
otherwise been payable had the Domestic Partner been a Spouse.
Excess Premium. The difference between (a) minus (b) where (a) is the
amount charged by the Company Approved Annuity Provider for the Post Tax
Supplemental Retirement Income Annuity for Key Employee and (b) is an amount
equal to the Supplemental Retirement Income Lump Sum, a Deferred Vested
Supplemental Retirement Income Lump Sum, a PRSB Supplemental Lump Sum, or the
Deferred Vested PRSB Supplemental Lump Sum, whichever is applicable to Key
Employee multiplied by one minus the Post Retirement Tax Rate.
Monthly Supplemental Retirement Income. An amount equal to (a) minus
(b) where:
(a) equals the monthly amount of the Early, Normal or Deferred
Retirement income benefit (whichever is appropriate) payable
in the form provided under the Retirement Plan (but ignoring
any election of the Level Income Option provided under the
Retirement Plan and considering a Domestic Partner as a
Spouse) which would be payable to Key Employee beginning on
the Benefit Commencement Date if the Restrictions as reflected
in the Retirement Plan and the Code were not in effect; and
(b) equals the monthly amount of the Early, Normal or Deferred
Retirement income benefit (whichever is appropriate) payable
in the form provided under the Retirement Plan (but ignoring
any election of the Level Income Option provided under the
Retirement Plan), which Key Employee will actually receive
under the Retirement Plan beginning on the Benefit
Commencement Date.
For purposes of determining benefits under (a) and (b) above, any QDRO will be
taken into account, such that the total benefits payable under this Agreement
will not exceed those which would be payable absent the QDRO.
Post Retirement Tax Rate. If sixty per cent (60%) of Key Employee's
Final Average Earnings at retirement or other termination of employment equals
or exceeds $311,950 for 2003 (for each year thereafter, such amount indexed in
the same manner as are the federal marginal individual income tax rates), the
Post Retirement Tax Rate shall be 40.35%; otherwise the Post Retirement
Inclusive Tax Rate shall be 38.47%; provided however, if Key Employee is a
resident of a state other than Georgia at the time the Post Retirement Tax Rate
is to be determined, then such rate shall be adjusted as appropriate to reflect
the difference between the Georgia state income tax rate of 6% and the highest
marginal state and local tax rate applicable to residents of the state in which
Key Employee resides. The Committee may appropriately revise such tax rates if
the applicable federal, state, or local or Medicare tax rates change.
Pre Tax Value of Key Employee's Grantor Trust. An amount, calculated as
of the date of payment of the Supplemental Retirement Income Lump Sum, equal to
(a) divided by (b) where:
- 5 -
(a) equals the actual balance in Key Employee's Employee Grantor
Trust established between the Company and Key Employee as of
such payment date; and
(b) equals 1 minus the applicable Post Retirement Tax Rate for Key
Employee.
For this purpose, the balance in Key Employee's Employee Grantor Trust shall be
the actual amount in such trust; provided however, if the amount in the trust is
reduced as the result of payment under a QDRO, or if Key Employee has at any
time made a withdrawal or received a distribution from such trust other than a
Tax Distribution Withdrawal, or a Special Distribution pursuant to Section 2.4
of Key Employee's Grantor Trust Agreement (a "Special Distribution"), then the
balance in Key Employee's Employee Grantor Trust shall be deemed to be the sum
of (x) the actual amount in such trust, (y) the amount of any withdrawal from
such trust, other than a Tax Distribution Withdrawal or a Special Distribution,
and (z) all Deemed Earnings with respect to any particular distribution or
withdrawal other than a Tax Distribution Withdrawal or Special Distribution. In
the event of a Tax Distribution Withdrawal, a Special Distribution or the
reduction of the Trust Balance (as defined in Key Employee's Grantor Trust
Agreement) as the result of payment of any Trustee fees, the balance in Key
Employee's Grantor Trust shall in no event be deemed to include the amount of
such distributions or payment.
PRSB Monthly Supplemental Retirement Income. An amount equal to (a)
minus (b) where:
(a) equals the monthly amount of the Surviving Spouse Benefit
payable under the Retirement Plan which the Spouse or Domestic
Partner would receive if the Restrictions as reflected in the
Retirement Plan and the Code were not in effect and as if a
Domestic Partner were treated as a Spouse; and
(b) equals the monthly amount of Surviving Spouse Benefit the
Spouse or Domestic Partner will actually receive under the
Retirement Plan.
PRSB Supplemental Lump Sum. The single sum Actuarial Equivalent of the
PRSB Monthly Supplemental Retirement Income determined as of the date of Key
Employee's death; provided however, if Key Employee previously established an
employee grantor trust pursuant to an agreement between the Company and Key
Employee, the PRSB Supplemental Lump Sum shall be reduced by the Pre Tax Value
of Key Employee's Grantor Trust. If Key Employee has a Domestic Partner at
death, the PRSB Supplemental Lump Sum shall be adjusted to reflect the fact that
the Domestic Partner is not eligible for pre retirement survivor benefits under
the Retirement Plan and that the monthly survivor income from the Disability and
Survivorship Plan is payable, if at all, for only up to 10 years following Key
Employee's death. The purpose of such adjustment is to make payments to the
Domestic Partner equivalent to the payment which would have been made to such
Domestic Partner had he or she qualified as a Spouse under the Retirement Plan,
taking into account payments to be made from the Disability and Survivorship
Plan, the Retirement Plan and this Agreement.
- 6 -
Post Tax Supplemental Retirement Income Annuity. An annuity contract
that pays a monthly post tax amount equal to the Monthly Supplemental Retirement
Income, Deferred Vested Monthly Supplemental Retirement Income, PRSB Monthly
Supplemental Retirement Income, or Deferred Vested PRSB Monthly Supplemental
Retirement Income, as applicable, multiplied by 1 minus the Post Retirement Tax
Rate.
QDRO. A Qualified Domestic Relations Order.
Supplemental Retirement Income Lump Sum. The single sum Actuarial
Equivalent of Key Employee's Monthly Supplemental Retirement Income determined
as of his or her retirement date and considering a Domestic Partner as a Spouse.
Provided however, if Key Employee will receive his or her Retirement Plan
benefit in the form of a joint and 50% survivor benefit, the Supplemental
Retirement Income Lump Sum shall also include the value of that part of the
survivor benefit that cannot be paid from the Retirement Plan because of the
Restrictions. In addition, if Key Employee previously established an employee
grantor trust pursuant to an agreement between the Company and Key Employee, the
Supplemental Retirement Income Lump Sum shall be reduced by the Pre Tax Value of
Key Employee's Grantor Trust.
Tax Distribution Withdrawal. A distribution or withdrawal from Key
Employee's Grantor Trust made for purposes of paying applicable taxes resulting
from either contributions to such Trust or earnings on such contributions.
2. Certain ERISA Requirements Not Applicable. The parties
acknowledge that this Agreement is unfunded and that Key Employee's
participation in this Agreement and the 2002 Delta Supplemental Excess Benefit
Plan is exempt from certain provisions of the Employee Retirement Income
Security Act of 1974 ("ERISA") including, but not limited to, parts 2, 3 and 4
of Subtitle B of Title 1 of ERISA, and subject to limited reporting and
disclosure requirements of part 1 of Subtitle B of Title 1 of ERISA. The parties
further acknowledge that the 2002 Delta Excess Benefit Plan is an "excess
benefit plan" as defined in section 3(36) of ERISA; and is unfunded and
therefore not subject to any provision of ERISA.
3. No Additional Contributions to Employee Grantor Trust. The
parties acknowledge that no additional contributions will be made by the Company
to the ________Grantor Trust, specifically including any contribution scheduled
to be made in 2004 pursuant to the 2002 excess benefit agreement between Company
and Key Employee. In exchange for the benefits provided under this Agreement,
Key Employee specifically waives any right that he or she may have had under
Section 10 of the 2002 excess benefit agreement to any contributions to such
Trust to be made in 2004.
4. Incorporation of the Retirement Plan and the Disability and
Survivorship Plan. The terms of the Retirement Plan and the Disability and
Survivorship Plan (both as in effect on January 1, 2004) are hereby incorporated
into this Agreement by reference, except that changes in those plans which
reduce benefits (other than changes as may be required by law and the reduction
or elimination of the right, if any, to receive post retirement benefit
increases from the Retirement Plan solely as the result of increases in the
qualified plan payment limit under Section 415(b) of the Code, whether such
increases are the result of cost of living adjustments or
- 7 -
statutory change) shall be incorporated as to Key Employee only if advance
notice of such proposed reduction is given to the Key Employee and the Key
Employee agrees to an amendment of this Agreement to incorporate the benefit
reduction. The incorporation of the Retirement Plan and the Disability and
Survivorship Plan is not intended to affect the right of Key Employee or his or
her surviving Spouse or Domestic Partner to receive a Deferred Vested
Supplemental Retirement Income Lump Sum or a Deferred Vested PRSB Supplemental
Lump Sum, as the case may be, or to modify any provision of this Agreement, and
the benefits provided hereunder shall be governed only by the provisions hereof
and the Plans.
5. Retirement Benefits
(a) If Key Employee retires on his Early, Normal or
Deferred Retirement Date, the Company agrees to pay
Key Employee his or her Supplemental Retirement
Income Lump Sum no later than thirty (30) days after
(i) such retirement date, or (ii) if later, the date
Key Employee elects to begin receiving his retirement
benefit under the Retirement Plan.
(b) If Key Employee terminates employment for any reason
other than death at any time prior to his Early,
Normal, or Deferred Retirement Date, the Company
agrees to pay to Key Employee his or her Deferred
Vested Supplemental Retirement Income Lump Sum no
later than thirty (30) days after such termination
date.
(c) If Key Employee dies after age 52, but before
retirement or other termination of employment, and
has a Spouse who is eligible for a Surviving Spouse
Benefit under the Retirement Plan or a Domestic
Partner, the Company shall pay to such Spouse or
Domestic Partner the PRSB Supplemental Lump Sum no
later than thirty (30) days after Key Employee's
death.
(d) If Key Employee dies while employed, but prior to his
or her 52nd birthday, and has a Spouse who is
eligible for a Surviving Spouse Benefit under the
Retirement Plan or a Domestic Partner, the Company
shall pay to such Spouse or Domestic Partner the
Deferred Vested PRSB Supplemental Lump Sum no later
than thirty (30) days after Key Employee's death.
(e) If within 30 days of receipt of a Supplemental
Retirement Income Lump Sum, a Deferred Vested
Supplemental Retirement Income Lump Sum, a PRSB
Supplemental Lump Sum, or a Deferred Vested PRSB
Supplemental Lump Sum, as the case may be, Key
Employee (or if applicable, his or her Surviving
Spouse or Domestic Partner) advises the Company in
writing of his or her decision to purchase an
immediately payable Post Tax Supplemental Retirement
Income Annuity from a Company Approved Annuity
Provider, upon proof of payment of the
- 8 -
amount of the applicable lump sum to such Company
Approved Annuity Provider, the Company shall pay such
Company Approved Annuity Provider the Excess Premium.
Key Employee shall be responsible for all taxes
incurred by Key Employee as the result of the
Company's payment of the Excess Premium. Key Employee
agrees that the Company shall have no fiduciary or
any other duty to Key Employee in selecting the
Company Approved Annuity Provider. Company shall in
no event be responsible or liable to Key Employee or
any other person for any failure of the Company
Approved Annuity Provider to pay to Key Employee or
his or her Spouse or Domestic Partner any amount due
under any Post Tax Supplemental Retirement Income
Annuity for any reason, including insolvency of the
Company Approved Annuity Provider.
6. Supplemental Disability Income. Subject to Section 10, the
Company agrees to pay Key Employee at the time set forth below
a supplemental monthly disability income ("Supplemental
Disability Income") equal to (a) minus (b), where
(a) equals the monthly short term disability benefit
which the Key Employee would receive under the
Disability and Survivorship Plan beginning on the
Benefit Commencement Date as if the Restrictions were
not in effect; and
(b) equals the monthly short term disability benefit
payable to Key Employee from the Disability and
Survivorship Plan beginning on the Benefit
Commencement Date taking the Restrictions into
account.
The amount of Supplemental Disability Income paid under this Agreement
will be adjusted as permitted under the Plan and if the amount in (b) above
increases or decreases as a result of a change in the Restrictions.
7. Supplemental Monthly Survivor Income. Subject to Section 10,
the Company agrees to pay to Eligible Family Member(s) (as defined in the
Disability and Survivorship Plan) of Key Employee at Key Employee's death a
supplemental monthly survivor income ("Supplemental Survivor Income") equal to
(a) minus (b), where
(a) equals the monthly survivor benefit which the
Eligible Family Member(s) of Key Employee would
receive under the Disability and Survivorship Plan
beginning on the Benefit Commencement Date (as
defined below) as if the Restrictions were not in
effect; and
(b) equals the monthly survivor benefit payable to
Eligible Family Member(s) of Key Employee under the
terms of the Disability and Survivorship Plan
beginning on the Benefit Commencement Date taking the
Restrictions into account.
- 9 -
The amount of Supplemental Survivor Income paid under this Agreement
will be adjusted as permitted under the Plan and the Code to account for, inter
alia, changes in the number of Eligible Family Members.
If Key Employee's death occurs prior to retirement, the amount of any
Supplemental Survivor Income payment will be reduced each month by the PRSB
Monthly Supplemental Income or the Deferred Vested PRSB Monthly Supplemental
Income, as applicable, as of the date of payment. If Key Employee's death occurs
after retirement, the Supplemental Monthly Survivor Income will be reduced by
50% of the Monthly Supplemental Retirement Income.
8. Cessation of Benefits. Subject to Section 5 the Company shall
commence payment of retirement benefits under this Agreement as of the Benefit
Commencement Date under the Retirement Plan and payment of the Supplemental
Disability or Survivor Income as of the Benefit Commencement Date under the
Disability and Survivorship Plan.
Supplemental Disability Income will cease if the full benefit due under
the Disability and Survivorship Plan is paid from that plan or when the Key
Employee is no longer eligible for short term disability benefits under that
plan.
Supplemental Survivor Income will cease if the full benefit due under
the Disability and Survivorship Plan is paid from that plan or when there are no
remaining Eligible Family Member(s) under that plan. All benefits payable
hereunder may cease pursuant to Section 10 at any time.
9. Supplemental Lump Sum Death Benefit. Subject to Section 10,
the Company agrees to pay to the named beneficiary (as designated by Key
Employee for the Basic Life Benefit under the Disability and Survivorship Plan)
of Key Employee at Key Employee's death following retirement, a supplemental
lump sum death benefit in the amount necessary to provide a total lump sum death
benefit of $50,000 when combined with the Basic Life Benefit actually provided
by the Disability and Survivorship Plan.
10. Covenant Not to Compete. Unless waived by the Committee under
circumstances the Committee deems appropriate in its sole discretion, if Key
Employee terminates active employment with the Company prior to his or her
Normal Retirement Date and within two years of such termination directly or
indirectly provides management or executive services (whether as a consultant,
advisor, officer or director) to any entity who is in direct and substantial
competition with the air transportation business of the Company or any of its
subsidiaries, then Key Employee shall within thirty days of such employment
repay the Company in cash an amount equal to the Supplemental Retirement Income
Lump Sum or the Deferred Vested Supplemental Retirement Income Lump Sum, as the
case may be. For this purpose, the amount of the Supplemental Retirement Income
Lump Sum and the Deferred Vested Supplemental Retirement Income Lump Sum shall
be determined before any reduction for the balance in any Grantor Trust
established by Key Employee.
Because of the broad and extensive scope of the Company's air
transportation business, the restrictions contained in this provision are
intended to extend to management or executive
- 10 -
services which are directly related to the provision of air transportation
services into, within or from the United States, as no smaller geographical
restriction will adequately protect the legitimate business interest of the
Company.
Key Employee acknowledges and agrees that the above provision is both
fair and reasonable with respect to both parties to this Agreement and not in
the nature of a penalty.
11. Funding of Benefit. Subject to the reductions to Key
Employee's benefits described in this Agreement of amounts, if any, in Key
Employee's Employee Grantor Trust, the benefits provided by this Agreement shall
be paid, to the extent they become due, from the Company's general assets or by
such other means as the Company deems advisable. To the extent Key Employee
acquires the right to receive payments from the Company under this Agreement,
such right shall be no greater than that of a general creditor of the Company.
In the event that the Company in its sole discretion establishes a reserve or
bookkeeping account for the benefits payable under this Agreement, the Key
Employee shall have no proprietary or security interest in any such reserve or
account.
12. Nonassignability of Benefits. No benefit payable under this
Agreement may be assigned, transferred, encumbered or subjected to legal process
for the payment of any claim against Key Employee, his or her Spouse, Domestic
Partner, Eligible Family Member, or beneficiary.
13. No Right to Continued Employment. Nothing in this Agreement
shall be deemed to give Key Employee the right to be retained in the service of
the Company or to deny the Company any right it may have to discharge Key
Employee at any time, subject to the Company's obligation to provide benefits
and amounts as may be required hereunder.
14. Arbitration. The parties acknowledge that any claims or
controversy arising out of this Agreement are subject to arbitration in
accordance with the Plans.
15 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Georgia without regard to
its conflict of laws rules.
16. Successors and Assigns. This Agreement shall be binding upon
the successors and assigns of the parties hereto.
17. Amendment. This writing, including any terms or documents
incorporated herein by reference, supersedes and cancels any previous excess
benefit agreement between Key Employee and the Company. This Agreement may not
be modified orally, but only by writing signed by the parties hereto.
18. Notice. All notices, requests, demands and other
communications under this Agreement, shall be in writing and shall be delivered
personally (including by courier) or mailed by certified mail, return receipt
requested. Refusal to acknowledge receipt of such notice shall constitute
receipt of such notice upon the date it is returned to the sender. Any notice
under this Agreement shall be sent, as the case may be, to Key Employee, his or
her Spouse, Domestic
- 11 -
Partner, Eligible Family Member or beneficiary at the last known address of such
person as reflected in the Company's records. Notice to the Company or the
Committee shall be sent to:
Delta Air Lines, Inc.
Law Department
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Senior Vice President - General Counsel
19. Waiver of Certain Increases in Restrictions. In exchange for
the right to receive the Supplemental Retirement Income Lump Sum or the Deferred
Vested Supplemental Retirement Income Lump Sum, as the case may be, Key
Employee, on behalf of himself or herself, and his or her Spouse or Domestic
Partner, hereby waives any and all rights, if any, to any increase in benefits
following the later of January 1, 2004 or Key Employee's retirement that would
otherwise be payable from the Retirement Plan as the result of any changes in
the limits contained in Section 415(b) of the Code, which section contains
limits on the benefits that can be paid from tax-qualified defined benefit
plans, whether such increases occur as the result of cost-of-living adjustments
or statutory changes. Key Employee acknowledges that unless such rights, if any,
are waived, he or she will be overpaid and receive a windfall from the
Retirement Plan since the Supplemental Retirement Income Lump Sum and the
Deferred Vested Supplemental Retirement Income Lump Sum will be determined based
on the Section 415(b) limits in effect at the time of payment of the
Supplemental Retirement Income Lump Sum or the Deferred Vested Supplemental
Retirement Income Lump Sum, without any allowance for increase in such limits.
Section 12 hereof notwithstanding, if for any reason this waiver is held to be
invalid, Key Employee agrees to pay to the Company an amount equal to any such
increase in benefits under the Retirement Plan to recover this overpayment.
20. Disqualified Payment. To the extent that Key Employee is
determined by the Committee to be an "Executive Officer" under the agreement
between the Company and the United States of America dated May 6, 2003 (the
Government Contract") entered into pursuant to the Emergency Wartime
Supplemental Appropriations Act of 2003, this Agreement shall be effective with
respect to any payment under Section 5 provided hereunder only if, after giving
affect to this Agreement, such payment would qualify, as determined by the
Committee, as a payment made pursuant to "preexisting contracts governing
retirement" included in the definition of "Excluded Compensation" under the
Government Contract to the extent that the provisions of the Government Contract
are then applicable. In the event that pursuant to the preceding sentence this
Agreement shall not be effective with respect to any payment hereunder, then
with respect to such payment, (but only with respect to such payment), this
Agreement shall be void ab initio, and the terms of the Excess Benefit Agreement
dated March 15, 2002 shall apply with respect to such payment.
- 12 -
IN WITNESS WHEREOF, the parties hereto have set their hands and seals
on the date(s) shown below.
DELTA AIR LINES, INC.
By: ____________________________
▇▇▇ ▇. ▇▇▇▇▇▇
Chairman of the Board and
Chief Executive Officer
Date:______________________________
______________________________
KEY EMPLOYEE
Date: ______________________________
- 13 -