Exhibit 10-1 2002 Excess Benefit Plan

EX-10.1 3 g76008ex10-1.txt EXHIBIT 10-1 2002 EXCESS BENEFIT PLAN EXHIBIT 10.1 2002 DELTA EXCESS BENEFIT PLAN SECTION 1 Introduction. Delta Air Lines, Inc. (the "Company") has established and maintained the Delta Family-Care Retirement Plan (the "Retirement Plan") as a qualified retirement plan under Section 401 of the Internal Revenue Code of 1986, as amended ("the Code"), for the purpose of providing retirement benefits to employees of the Company. Restrictions on qualified retirement plan contributions and benefits under Section 415 of the Code may prevent certain of the Company's officers and key employees (together "Key Employees") from receiving the retirement income to which they would otherwise be entitled under the Retirement Plan. To provide for the payment of such retirement benefits that may not be provided for Key Employees in the qualified plan, the Company implemented a non-qualified excess benefit plan to provide the shortfall, which has been referred to as the Delta Excess Benefit Plan (the "Excess Benefit Plan"). The Excess Benefit Plan was previously restated in 1986 and 1991, and hereby is restated as the 2002 Delta Excess Benefit Plan. The provisions hereof shall apply only to Employees whose employment terminates on or after February 1, 2002. The rights and benefits, if any, of a former Employee whose employment terminated before such date, and who is not reemployed after such date shall be determined solely in accordance with either the 1986 Delta Excess Benefit Plan or the 1991 Delta Excess Benefit Plan, as amended, as in effect on the date of his or her termination of employment. SECTION 2 Nature of Plan. The Plan is a non-qualified excess benefit plan covering only Key Employees who are affected by the limitations imposed under Section 415 of the Code. Accordingly, this Plan constitutes an "excess benefit plan" as that term is defined in Section 3(36) of the Employee Retirement Income Security Act of 1974 ("ERISA") and is intended to be exempt from coverage under ERISA pursuant to ERISA Sections 4(b)(5) and 4021. SECTION 3 Eligibility. The Personnel & Compensation Committee of the Board of Directors of Delta Air Lines, Inc. (the "Committee") has the sole authority to designate which of the Company's employees are Key Employees for purposes of this Plan; however, all employees who participate in the 2002 Delta Supplemental Excess Benefit Plan shall automatically be designated as Key Employees under this Plan without further action by the Committee. No Key Employee shall have rights under the Plan unless such Key Employee enters into an Excess Benefit Agreement, and such rights will be determined under that Agreement. Except as provided in Section 6, once an employee is a Key Employee, and has entered into an Excess Benefit Agreement, the employee will always remain a Key Employee for purposes of the Plan until all benefits provided under such Excess Benefit Agreement have been satisfied. SECTION 4 Incorporation of Retirement Plan. The terms of the Retirement Plan as of July 1, 2002 are hereby incorporated into this Plan by reference. The provisions of any future amendments to that plan shall also be incorporated automatically into this Plan by reference, except that changes in the Retirement Plan 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 - 2 - 415 (b) of the Code, whether such increases are the result of cost of living adjustments or statutory change) shall be incorporated as to any individual 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 his or her Excess Benefit Agreement to incorporate the reduction of benefit. The incorporation of the Retirement Plan into this Plan is not intended to modify any provision of this Plan or alter in any way any rights a Key Employee has under the Plan. The benefits provided under this Plan shall be governed only by the provisions hereof and the Excess Benefit Agreement. Unless indicated otherwise, capitalized terms in this Plan shall have the meaning given those terms in the Retirement Plan. SECTION 5 Excess Benefit Agreement. Each Key Employee shall be offered the opportunity to enter into an Excess Benefit Agreement for the purpose of providing to such employee the retirement benefit that would have been provided under the Retirement Plan but for limitations of Section 415 of the Code. The benefits payable to each Key Employee or his or her Spouse under this Plan shall be governed exclusively by the Excess Benefit Agreement entered into with such Key Employee. SECTION 6 Certain Restrictions. Unless waived by the Committee under circumstances it deems appropriate or deemed waived pursuant to an agreement between the Company and a Key Employee, if a 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 - 3 - management or executive services (whether as a consultant, advisor, officer or director) to any individual, corporation, partnership, association, trust or any other entity or organization which is in direct and substantial competition with the air transportation business of the Company or any of its subsidiaries, then (a) if benefits under this Plan shall have not yet commenced, no benefits shall be paid under this Plan to such Key Employee, his or her Spouse, Eligible Family Member or beneficiary; (b) if benefits under this Plan have commenced, no further benefits shall be paid; (c) if benefits under this Plan shall have not yet commenced, and if the Key Employee has established an Employee Grantor Trust (as defined in Section 7), within 30 days after the Committee makes a determination hereunder, the Key Employee, or his or her Spouse, shall repay the Company in cash an amount equal to the Liquidated Damages (as defined below); and (d) if benefits under this Plan have commenced, and if the Key Employee has established an Employee Grantor Trust, within 30 days after the Committee makes a determination hereunder, the Key Employee, or his or her Spouse, shall repay the Company in cash an amount equal to the Liquidated Damages less the present value as of the date of repayment of the benefits already paid under this Plan. For purposes of this Section 6, "Liquidated Damages" shall mean the sum of: - 4 - (A) the sum of (x) all contributions (if any) made by the Company to such trust, and (y) all related amounts with respect to such contributions withheld by the Company for the purpose of satisfying tax withholding requirements; and (B) the amount that would have been earned with respect to such contributions had such amounts been invested in an interest-bearing account, compounded annually, using an interest rate equal to the sum of (i) the prime rate as published in the Wall Street Journal on the date such contribution was made to the trust and (ii) 2%. 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 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. SECTION 7 Funding of Benefit. The benefits provided by this Plan shall be paid, as they become due, from the Company's general assets or by such other means as the Company deems advisable. To the extent Key Employees acquire the right to receive payments from the Company under this Plan, 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 benefits payable under this Plan, the Key Employees shall have no proprietary or security interest in any such reserve or account. The Company may create a trust or trusts in order to fund the benefits - 5 - created hereunder. Benefits shall be payable from such trusts only as and to the extent provided therein. Any benefit payable under the terms of this Plan shall be subject to offset and reduction as provided in a Key Employee's Excess Benefit Agreement by amounts in, or deemed to be in, any Employee Grantor Trust established by such Key Employee in accordance with such Agreement. SECTION 8 Nonassignability of Benefits. No benefit payable under this Plan may be assigned, transferred, encumbered or subjected to any legal process for the payment of any claim against any Key Employee or his or her Spouse. SECTION 9 No Right to Continued Employment. Nothing in this Plan shall be deemed to give any Key Employee the right to be retained in the service of the Company. SECTION 10 Administration of Plan. The Committee shall have full power and authority to administer this Plan. The Committee and its agents shall not be liable to any person for any action taken or omitted in connection with the administration of this Plan. If any Key Employee who is denied benefits under this Plan believes he is entitled to benefits hereunder, he may request in writing, a review of the denial by the Committee or its designee within 60 days of receiving written notice of the denial. If no request for review is received by the Committee within 60 days of the receipt of the written denial, the denial shall be final and binding upon the Company and the Key Employee. - 6 - The Committee shall respond in writing to a written request for review within 60 days of receipt of such request. Any controversy or claim arising out of, or relating to this Plan, any Excess Benefit Agreement entered between the Company and a Key Employee, or any trust established under Section 7, which is not settled by agreement between the Company and the affected Key Employee, shall be settled by a single arbitrator to be named by agreement between the Company and such Key Employee or, if the parties cannot agree within thirty (30) days of a request for arbitration, by an arbitrator appointed by the American Arbitration Association at the request of either party. Such arbitration shall be conducted in Atlanta, Georgia, in accordance with the Federal Arbitration Act and the Rules of the American Arbitration Association. The Company, the Key Employee, and his or her Spouse, if any, and the trustee of any trust established under Section 7 shall be bound by the award rendered in such arbitration, and judgment under the award may be entered in any court having jurisdiction. All reasonable expenses (including, without limitation, legal fees and expenses) incurred by the Key Employee in connection with, or in prosecuting or defending, any claim or controversy arising out of or relating to this Plan shall be paid by the Company, unless the Key Employee fails to recover any benefits in such claim or controversy and the Company receives a written opinion of independent legal counsel, selected by the Board of Directors of the Company, to the effect that such expenses were not incurred by the Key Employee in good faith. Pending any such determination, such expenses shall be paid by the Company on a monthly basis upon submission of invoices for such expenses and upon an undertaking by the Key Employee to repay to the Company amounts so advanced if the Key Employee is not awarded any benefits in any such claim or controversy and it is also determined - 7 - by such independent legal counsel that the expenses were not incurred by the Key Employee in good faith. If a Key Employee is not alive, the right and obligations to arbitrate any and all claims or controversies arising out of this Plan, or any Excess Benefit Agreement or trust described above, shall pass to the surviving Spouse affected by such claim or controversy who shall be bound by the requirements stated herein. The Company hereby stipulates that this Plan evidences a transaction involving commerce and that arbitration is the exclusive remedy for any dispute arising out of this Plan, any Excess Benefit Agreement entered into between the Company and a Key Employee, or any trust established under Section 7. SECTION 11 Governing Law. This Plan shall be governed by and construed in accordance with the laws of the State of Georgia without regard to its conflict of laws rules. SECTION 12 Successors. This Plan shall be binding upon the successors of the Company. SECTION 13 Notice. All notices, requests, demands and other communications under this Plan, 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 Plan shall be sent to Key Employee, Spouse, his 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: - 8 - Delta Air Lines, Inc. Law Department 1030 Delta Boulevard Atlanta, Georgia 30320 Attention: Senior Vice President-General Counsel SECTION 14 Amendment and Termination. This Plan may be terminated or amended by resolution of the Company's Board of Directors, but no such termination or amendment shall affect benefits under an Excess Benefit Agreement entered into by the Company under this Plan without the written consent of the Key Employee that is a party to such Agreement. SECTION 15 Change In Control. In the event of a Change In Control, as defined below, a Key Employee's rights shall be determined under his or her Excess Benefit Agreement. For purposes of this Plan, a Change In Control means, and shall be deemed to have occurred upon, the first to occur of any of the following events: (a) Any Person (other than an Excluded Person) acquires, together with all Affiliates and Associates of such Person, Beneficial Ownership of securities representing 20% or more of the combined voting power of the Voting Stock then outstanding, unless such Person acquires Beneficial Ownership of 20% or more of the combined voting power of the Voting Stock then outstanding solely as a result of an acquisition of Voting Stock by the Company which, by reducing the Voting Stock outstanding, increases the proportionate Voting Stock beneficially owned by - 9 - such Person (together with all Affiliates and Associates of such Person) to 20% or more of the combined voting power of the Voting Stock then outstanding; provided, that if a Person shall become the Beneficial Owner of 20% or more of the combined voting power of the Voting Stock then outstanding by reason of such Voting Stock acquisition by the Company and shall thereafter become the Beneficial Owner of any additional Voting Stock which causes the proportionate voting power of Voting Stock beneficially owned by such Person to increase to 20% or more of the combined voting power of the Voting Stock then outstanding, such Person shall, upon becoming the Beneficial Owner of such additional Voting Stock, be deemed to have become the Beneficial Owner of 20% or more of the combined voting power of the Voting Stock then outstanding other than solely as a result of such Voting Stock acquisition by the Company; (b) During any period of two consecutive years (not including any period prior to January 1, 2002), individuals who at the beginning of such period constitute the Board (and any new Director, whose election by the Board or nomination for election by the Company's stockholders was approved by a vote of at least two-thirds of the Directors then still in office who either were Directors at the beginning of the period or whose election or nomination for election was so approved), cease for any reason to constitute a majority of Directors then constituting the Board; (c) A reorganization, merger or consolidation of the Company is consummated, in each case, unless, immediately following such reorganization, - 10 - merger or consolidation, (i) more than 50% of, respectively, the then outstanding shares of common stock of the corporation resulting from such reorganization, merger or consolidation and the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors is then beneficially owned, directly or indirectly, by all or substantially all of the individuals and entities who were the beneficial owners of the Voting Stock outstanding immediately prior to such reorganization, merger or consolidation, (ii) no Person (but excluding for this purpose any Excluded Person and any Person beneficially owning, immediately prior to such reorganization, merger or consolidation, directly or indirectly, 20% or more of the voting power of the outstanding Voting Stock) beneficially owns, directly or indirectly, 20% or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such reorganization, merger or consolidation or the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors and (iii) at least a majority of the members of the board of directors of the corporation resulting from such reorganization, merger or consolidation were members of the Board at the time of the execution of the initial agreement providing for such reorganization, merger or consolidation; or (d) The shareholders of the Company approve (i) a complete liquidation or dissolution of the Company or (ii) the sale or other disposition of all or substantially all of the assets of the Company, other than to any corporation with - 11 - respect to which, immediately following such sale or other disposition, (A) more than 50% of, respectively, the then outstanding shares of common stock of such corporation and the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors is then beneficially owned, directly or indirectly, by all or substantially all of the individuals and entities who were the beneficial owners of the Voting Stock outstanding immediately prior to such sale or other disposition of assets, (B) no Person (but excluding for this purpose any Excluded Person and any Person beneficially owning, immediately prior to such sale or other disposition, directly or indirectly, 20% or more of the voting power of the outstanding Voting Stock) beneficially owns, directly or indirectly, 20% or more of, respectively, the then outstanding shares of common stock of such corporation or the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors and (C) at least a majority of the members of the board of directors of such corporation were members of the Board at the time of the execution of the initial agreement or action of the Board providing for such sale or other disposition of assets of the Company. Notwithstanding the foregoing, in no event shall a "Change In Control" be deemed to have occurred (i) as a result of the formation of a Holding Company, or (ii) with respect to Key Employee, if Key Employee is part of a "group," within the meaning of Section 13(d)(3) of the Exchange Act as in effect on August 1, 1997, which consummates the Change In Control transaction. In addition, for purposes of the definition of "Change In Control" a Person engaged - 12 - in business as an underwriter of securities shall not be deemed to be the "Beneficial Owner" of, or to "beneficially own," any securities acquired through such Person's participation in good faith in a firm commitment underwriting until the expiration of forty days after the date of such acquisition. As used in the above definition, "Person" shall mean an individual, corporation, partnership, association, trust or any other entity or organization. "Excluded Person" means (i) the Company; (ii) any of the Company's Subsidiaries; (iii) any Holding Company; (iv) any employee benefit plan of the Company, any of its Subsidiaries or a Holding Company; or (v) any Person organized, appointed or established by the Company, any of its Subsidiaries or a Holding Company for or pursuant to the terms of any plan described in clause (iv). "Affiliate" and "Associate" have the respective meanings accorded to such terms in Rule 12b-2 under the Exchange Act as in effect on August 1, 1997. A Person shall be deemed the "Beneficial Owner" of, and shall be deemed to "beneficially own," securities pursuant to Rule 13d-3 under the Exchange Act as in effect on August 1, 1997. "Voting Stock" means securities of the Company entitled to vote generally in the election of members of the Board. "Board" means the Board of Directors of the Company. "Exchange Act" means the Securities Exchange Act of 1934, as amended. "Holding Company" means an entity that becomes a holding company for the Company or its businesses as a part of any reorganization, merger, consolidation or other transaction, provided that the outstanding shares of common stock of such entity and the combined voting power of the then outstanding voting securities of such entity entitled to vote generally in the election of directors is, immediately after such reorganization, merger, consolidation or other transaction, beneficially owned, directly or indirectly, by all or substantially - 13 - all of the individuals and entities who were the beneficial owners, respectively, of the Voting Stock outstanding immediately prior to such reorganization, merger, consolidation or other transaction in substantially the same proportions as their ownership, immediately prior to such reorganization, merger, consolidation or other transaction, of such outstanding Voting Stock. This Plan is hereby executed as of the date shown below, pursuant to authorization by the Board of Directors of the Company. DELTA AIR LINES, INC. By: -------------------------------------- Leo F. Mullin Chairman of the Board and Chief Executive Officer Date --------------------------------------- - 14 -