UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
(Amendment No. 1)
(Mark One)
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
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FOR THE FISCAL YEAR ENDED
DECEMBER 31, 2007
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TRANSITION REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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FOR THE TRANSITION PERIOD
FROM TO
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Commission file number 0-23642
NORTHWEST AIRLINES CORPORATION
(Exact name of registrant as specified in its charter)
Delaware
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41-1905580
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(State or other jurisdiction of incorporation or
organization)
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(I.R.S. Employer Identification No.)
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2700 Lone Oak Parkway, Eagan, Minnesota
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55121
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(Address of principal executive offices)
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(Zip Code)
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Registrants telephone number, including area code
(612) 726-2111
Securities registered pursuant to Section 12(b) of
the Act:
Title of each class
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Name of each exchange on which registered
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Common Stock, par value $.01 per share
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The New York Stock Exchange
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Preferred Stock Purchase Rights
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The New York Stock Exchange
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Securities registered pursuant to Section 12(g) of the
Act:
None
Indicate by check mark if
the registrant is a well-known seasoned issuer, as defined in Rule 405 of
the Securities Act. Yes
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No
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Indicate by check mark if
the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of
the Act. Yes
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No
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Indicate by check mark
whether the registrant (1) has filed all reports required to be filed by Section 13
or 15(d) of the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes
x
No
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Indicate by check mark if
disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not
contained herein, and will not be contained, to the best of registrants
knowledge, in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this Form 10-K.
x
Indicate
by checkmark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting company. See
the definitions of large accelerated filer, accelerated filer, and smaller
reporting company in Rule 12b-2 of the Act. (Check one):
Large
accelerated filer
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Accelerated
filer
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Non-accelerated
filer
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(Do not check if a smaller reporting company)
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Smaller
reporting company
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Indicate by check mark
whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act). Yes
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No
x
Indicate by check mark
whether the registrant has filed all documents and reports required to be filed
by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934
subsequent to the distribution of securities under a plan confirmed by a court.
Yes
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No
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The aggregate market value of the voting stock held
by non-affiliates of the registrant as of June 29, 2007 was $4.3 billion.
As of March 31, 2008, there
were 236,427,388 shares of the registrants Common Stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
EXPLANATORY NOTE
On February 29,
2008, Northwest Airlines Corporation (NWA Corp., and together with its
consolidated affiliates, the Company) filed its Annual Report on Form 10-K
for the fiscal year ended December 31, 2007. NWA Corp. hereby amends
its 2007 Form 10-K to provide the information called for in Part III of
the Report. No other amendments or changes are, or were, made to the 2007
Form 10-K.
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE
REGISTRANT
Information
Concerning Directors
NWA Corp. currently has
12 directors, each of whom was on the slate of directors approved by the
creditors of the Company in connection with the approval of the Companys Plan
of Reorganization, which was confirmed by the Bankruptcy Court on May 18,
2007.
Information
with respect to the business experience and affiliations of NWA Corp.s
directors is set forth below:
Roy J. Bostock
,
age 67, has
served as a director of NWA Corp. since April 2005. Since 2002, he has served as a principal of
Sealedge Investments, LLC (diversified private investment company), the Chairman
of the Partnership for a Drug-Free America (not-for-profit organization based
in New York City), and the Chairman of the Committee for Economic Development
(Washington, D.C.-based public policy group).
From 2000 to 2002, Mr. Bostock served as Chairman of B/Com3
(advertising), and from 1996 to 2000 he served as Chairman and Chief Executive
Officer of the McManus Group (communications services). Prior to 1996, Mr. Bostock served in a
variety of senior executive positions in the advertising agency business,
including Chairman and Chief Executive Officer of DArcy Masius Benton &
Bowles, Inc. from 1990 to 1996. Mr. Bostock
also serves as a director of Yahoo! Inc. and Morgan Stanley.
David A. Brandon
, age 55, has served as a director of NWA
Corp. since May 31, 2007. Since 1999, Mr. Brandon has served as
Chairman and Chief Executive Officer of Dominos Pizza, Inc. (worldwide
pizza chain). From 1989 to 1998, he served as President and Chief Executive
Officer of Valassis, Inc. (international marketing services and sales
promotion company), and Chairman of the Board of Directors of Valassis from
1997 to 1998. Prior to joining Valassis,
Mr. Brandon served in a variety of sales management positions at Procter &
Gamble. He also serves on the Board of Directors of the TJX Companies, Inc.,
Burger King Corporation and Kaydon Corporation.
Michael J. Durham
, age 57, has served as a director of NWA Corp.
since May 31, 2007. Since 2000, Mr. Durham has been founder,
President and Chief Executive Officer of Cognizant Associates, Inc.
(consulting firm). From October 1996
to October 1999, Mr. Durham served as a director, President and Chief
Executive Officer of Sabre, Inc. (computer reservation company). Prior to joining Sabre, he served as Senior
Vice President and Treasurer of AMR (airline holding company) and as Senior
Vice President of Finance and Chief Financial Officer of American Airlines
(airline). Mr. Durham serves as the
non-executive Chairman of the Board of Asbury Automotive Group and Acxiom
Corporation. He also serves on the Board
of Directors of AGL Resources, Inc. and Hertz Global Holdings, Inc.
John M. Engler,
age 59, has served as a director of NWA
Corp. since 2003. Since 2004, Mr. Engler has served as President &
Chief Executive Officer of the National Association of Manufacturers (trade
association). From 2003 to 2004, Mr. Engler
was President of State and Local Government and Vice President of Government
Solutions for North America for Electronic Data Systems Corporation
(information technology). Mr. Engler served as Michigans 46
th
governor for three terms from 1991 to 2003. He also serves on the Board of Directors
of Universal Forest Products Inc. and Munder Capital Management.
Mickey P. Foret
, age 62, has served as a director of NWA
Corp. since May 31, 2007. Since September 2002, Mr. Foret has
served as President of Aviation Consultants LLC (consulting firm). From September 1998
to September 2002, he served as Executive Vice President and Chief
Financial Officer of Northwest Airlines, Inc., NWA Corp.s principal
operating subsidiary (Northwest), and, from May 1999 to September 2002,
he also served as Chairman and Chief Executive Officer of Northwest Cargo. From
June 1996 to September 1997, Mr. Foret served as President and
Chief Operating Officer of Atlas Air, Inc. (cargo airline), and from 1993
to 1996 he served as Executive Vice President and Chief Financial Officer of
Northwest. Prior to 1993, Mr. Foret served in a variety of senior
executive positions at several companies including Continental Airlines, Inc.
and KLH Computers, Inc. He also serves on the Board of Directors of ADC
Telecommunications, Inc., Nash Finch Company and URS Corporation.
Robert L. Friedman,
age 65, has
served as a director of NWA Corp. since 2002. Since 1999, Mr. Friedman has
served as a Senior Managing Director of The Blackstone Group L.P. (private
investment firm). In February 2003, he also became Chief Administrative
Officer and Chief Legal Officer of Blackstone. Prior to 1999, he was a partner
of the law firm of Simpson Thacher & Bartlett LLP. He also serves on
the Board of Directors of Axis Capital Holdings Ltd. and TRW Automotive
Holdings Corp.
Doris Kearns Goodwin,
age 65, has
served as a director of NWA Corp. since 1997. Ms. Goodwin is a historian
and author and has received numerous awards including the Pulitzer Prize in
history in 1995 and the Lincoln Prize for history in 2006. She served as a
member of the Harvard University Board of Overseers for a six-year term ending
in 2005 and was a Professor of Government at Harvard University from 1969 to
1977.
Jeffrey G. Katz
,
age 52, has
served as a director of NWA Corp. since April 2005. Since June 2005, Mr. Katz has
served as President and Chief Executive Officer of LeapFrog Enterprises, Inc.
(manufacturer of electronic learning products).
From 2000 to 2004, he served as Chairman, President and Chief Executive
Officer of Orbitz Inc. (online travel distribution). Prior to joining Orbitz, Mr. Katz
was President and Chief Executive Officer of Swissair Groups Swissair (airline)
from 1997 until 2000. Prior to April 1997, Mr. Katz spent
17 years at American Airlines (airline) in a variety of executive roles
including President of the Global Distribution System Division of Sabre Inc.
(global travel distribution system).
James J. Postl
, age 62, has served as a director of NWA
Corp. since May 31, 2007. In 2002, Mr. Postl retired as President and
Chief Executive Officer of Pennzoil-Quaker State Company (automotive consumer
products), a position he held from 2000 to 2002. From 1998 to 2000, he served
as President and Chief Operating Officer of Pennzoil; from 1996 to 1998, he
served as President of Nabisco Biscuit Company (manufacturer of food products);
and from 1994 to 1996, he served as President of Nabisco International. Prior
to 1996, Mr. Postl spend 19 years at PepsiCo in a variety of management
roles. He also serves on the Board of Directors of Centex Corporation, Cooper
Industries and the American Balanced Fund.
Rodney E. Slater
, age
53, has served as a director of
NWA Corp. since May 31, 2007. Mr. Slater
serves as a partner in the law firm of Patton Boggs LLP (law firm), and
the head of the firms Public Policy and Transportation Practice Group. From 1997 to 2001, he served as U.S.
Secretary of Transportation. From 1993
to 1996, Mr. Slater served as Director of the U.S. Highway
Administration. He also serves on the
Board of Directors of ICX Technologies, Kansas City Southern and Southern
Development Bancorp.
Douglas M. Steenland,
age 56, has
served as a director of NWA Corp. since 2001 and as President and Chief
Executive Officer of NWA Corp. and Northwest since October 2004. Mr. Steenland has served in a number of
executive positions since joining Northwest in 1991, including President from April 2001
to October 2004, Executive Vice President and Chief Corporate Officer from
September 1999 to April 2001, Executive Vice PresidentAlliances,
General Counsel and Secretary from January 1999 to September 1999,
Executive Vice President, General Counsel and Secretary from June 1998 to January 1999,
and Senior Vice President, General Counsel and Secretary from 1994 to 1998.
Prior to joining Northwest, Mr. Steenland was a senior partner at the
Washington, D.C. law firm of Verner, Liipfert, Bernhard, McPherson and Hand.
William S. Zoller
, age
59
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has served as a
director of NWA Corp. since April 2006.
Captain Zoller has been a Northwest pilot for over 25 years, previously
served as an Executive Vice President of the Air Line Pilots Association,
International from 2000 to 2002, and served as Chairman of the Northwest
Airlines Master Executive Council of ALPA from 1996 to 2000. He also serves as
a member of the Industrial Relations Center Advisory Council for the Carlson
School of Management at the University of Minnesota.
Director Independence
Each year, the Corporate
Governance Committee reviews the relationships between each of our directors
and the Company. On the basis of its review, the Corporate Governance Committee
delivers a report to the full Board of Directors and the Board makes its
independence and audit committee financial expert determinations based upon
the report of the Corporate Governance Committee. As a result of this review,
the Board affirmatively determined that Messrs. Bostock, Brandon, Durham,
Engler, Friedman, Katz, Postl and Slater and Ms. Goodwin (constituting a
majority of the Board) qualify as independent directors, as currently defined
under the rules of the New York Stock Exchange; and that Messrs. Foret,
Steenland, and Zoller do not qualify as independent directors. Messrs. Steenland
and Zoller are not considered independent given that each of them is currently
an employee of Northwest and Mr. Foret is not considered independent given
that he served as a consultant to the Company during the period following his
resignation as Executive Vice President and Chief Financial Officer of NWA
Corp. and Northwest until September 2005 and received more than $100,000
per year for his services during this period.
In making its
independence determinations, the Board considered that in the ordinary course
of business transactions may occur between the Company and companies or other
entities at which some of our directors are or have been officers. In 2007, the Companys defined benefit
pension plans master trust made a $50 million investment in a Blackstone real
estate investment fund. Mr. Friedman is a principal of The Blackstone
Group L.P., which is an affiliate of the investment fund in which the master
trust made an investment. The Audit Committee approved the transaction pursuant
to the Companys policy regarding related party transactions and, upon review,
the Board re-affirmed Mr. Friedmans independence.
2
Information Concerning Executive Officers
The
information regarding executive officers of the Company is included in Part I
of this Annual Report on Form 10-K under the caption Executive Officers
of the Registrant.
Information
about Our Audit Committee
The current members of
the Audit Committee are Messrs. Durham (Chair), Engler and Katz. Our Board of Directors has determined that
each of the members of the Audit Committee is independent as defined by the rules of
the New York Stock Exchange. The Committee provides assistance to the Board of
Directors in fulfilling its responsibility to stockholders and the investment
community relating to corporate accounting, reporting practices of the Company,
and the quality and integrity of the financial reports of the Company. The
Committee met ten times during 2007. The Board of Directors also has determined
that Messrs. Durham and Katz qualify as audit committee financial experts
as defined by the rules of the SEC. The Companys Audit Committee charter
can be found under Governance in the Investor Relations section of our web
site at www.nwa.com, and we will furnish copies of the charter to interested
stockholders without charge, upon request. Written requests for such copies
should be addressed to:
Northwest Airlines Corporation
Attention: Corporate Secretary
2700 Lone Oak Parkway
Dept. A1180
Eagan, MN 55121
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of
the Securities Exchange Act of 1934 requires our directors, our executive
officers and holders of more than 10% of NWA Corp.s voting securities to file
reports of holdings and transactions in NWA Corp.s equity securities with the
SEC. Based on our records and other information, we believe that in 2007 our
directors, our executive officers and our beneficial holders who are subject to
Section 16(a) met all applicable SEC filing requirements.
Code of Ethics
Northwests Code of
Business Conduct can be found under Governance in the Investor Relations
section of our web site at www.nwa.com.
A copy of the Code of Business Conduct may also be obtained free of
charge from the Company upon a written request addressed as set forth above
under Information about Our Audit Committee. Northwests Code of Business
Conduct is applicable to members of the Board of Directors and all employees of
Northwest, including the Companys principal executive officer, principal
financial officer, principal accounting officer or controller, or persons
performing similar functions. If in the future the Company were to amend or
grant a waiver from the Code of Business Conduct, such information would be
posted on our website.
Item 11. EXECUTIVE COMPENSATION
Compensation
Discussion and Analysis
Overview
The Compensation
Committee of our Board of Directors, which is presently comprised of Messrs. Bostock
(Chairman), Brandon and Postl, administers Northwests executive compensation
programs. The role of the Committee is to oversee the Companys compensation
and benefit plans and policies, administer NWA Corp.s stock plans, and review
and approve all compensation decisions relating to executive officers of the
Company, including the President and Chief Executive Officer and the other
executive officers named in the Summary Compensation Table included below in
this Item 11 (the Named Executive Officers). The Committee also reviews from
time to time the Companys compensation and benefits programs applicable
generally to management employees of the Company. The Committees charter
reflects these responsibilities and is periodically reviewed by the Committee
and the Board. Our President and Chief Executive Officer, together with our
Senior Vice President Human Resources & Labor Relations, makes
recommendations to the Committee regarding compensation of the other executive
officers. The Committees charter can be found under Governance in the
Investor Relations section of our web site at www.nwa.com.
3
Company
Performance in 2007
The Company successfully
completed its Chapter 11 restructuring and emerged from bankruptcy on May 31,
2007. As a result of its restructuring efforts since the Company filed for
bankruptcy protection in September 2005, the Company has significantly
reduced its overall debt, reduced its annual aircraft ownership expenses and put
in place a debtor-in-possession and exit financing facility that has provided
significant interest expense savings for the Company. The Company also
right-sized and re-optimized its fleet and now operates the worlds largest
Airbus 330 fleet and the youngest international fleet of any U.S. carrier, has
affirmed its position as the North American launch carrier of the new Boeing
787 aircraft, and has begun taking deliveries of the 72 76-seat regional jets
ordered by the Company in 2006. The Company also achieved its cost savings
goals for both labor and non-labor costs.
As a result of executing
its restructuring plans, the Company achieved significant improvement in its
financial results for 2007. The Company reported a pre-tax profit of $764
million (excluding reorganization items), which represents a 154 percent
improvement over its pre-tax profit for 2006. 2007 represents the second
consecutive year of profitability for the Company since the U.S. network
carrier environment began to deteriorate in 2000, and the third highest annual
pre-tax profit in the Companys history. The Companys pre-tax margin for 2007
was 6.1 percent, the highest among all U.S. network carriers.
As a result of the
Companys strong financial performance during 2007, the Company has distributed
over $125 million in profit sharing, performance incentives and reliability
payments to union and salaried employees of Northwest at the manager level and
below. This was the highest employee incentive payout in Company history. A
more detailed analysis of our financial and operating performance in 2007 is
contained in the Managements Discussion and Analysis section of this Annual
Report on Form 10-K.
General
Compensation Philosophy
We believe that
compensation paid to executive officers should be closely aligned with the
Companys performance, and that such compensation should assist the Company in
attracting and retaining key executives critical to its long term success. We
also believe compensation should be structured to ensure that a significant
portion of compensation opportunity will be directly related to Company stock
performance and other factors that directly and indirectly influence
stockholder value.
The Companys executive
compensation programs are designed to achieve three principal objectives:
·
Attract, motivate and retain talent.
Northwest operates in an intensely
competitive environment and believes its success is closely related to the
retention of highly talented employees and a strong management team. Northwests employees are the key to
differentiating the airline in the marketplace.
A competitive executive compensation program is essential to creating a
business that produces sustainable profitability.
·
Link pay to performance.
A cornerstone of
Northwests compensation philosophy is the close linkage between executive pay
and the overall performance of Northwest.
At Northwest, individual performance and relative industry performance
based on key performance indicators are significant factors in determining executive
compensation.
·
Align managements interests with stockholder
interests.
In order to
properly align the interests of management with stockholders, Northwest has
historically delivered a portion of its executive compensation in the form of
long term equity-based compensation subject to vesting schedules that require
continued service with the Company.
Northwests
Executive Compensation Program
The principal elements of
Northwests executive compensation program are described below.
·
Base Salary.
In
2005 and 2006, base salaries for Northwest officers were reduced on average by
23.5% as a result of labor cost reductions associated with Northwests
bankruptcy restructuring efforts. Five
percent of the salary reductions were temporary reductions to continue in
effect during the Companys bankruptcy proceedings. In connection with the Companys emergence
from bankruptcy on May 31, 2007, the Company discontinued the five percent
temporary salary reductions for all Northwest officers, including the Named
Executive Officers. In addition, Mr. Davis base salary was increased from
$332,500 to $423,938 in connection with his promotion to Executive Vice
President and Chief Financial Officer in June 2007. None of the
other Named Executive Officers received base salary increases during 2007. In the future, changes in the base
salaries of executive officers of Northwest, including the Named Executive
Officers, will be considered annually by the Committee and in connection with a
promotion or other change in responsibilities. Base salaries are influenced by
individual performance, experience in the position and scope of
responsibilities, results achieved, future potential, internal equity and
salary levels for similar positions at comparable companies.
4
·
Annual Cash Incentive Plan.
Approximately 370 management employees of
Northwest, including the Named Executive Officers, participate in the Annual
Cash Incentive Plan. Compensation provided under the Annual Cash Incentive Plan
depends on the achievement of an income contribution target established by the
Committee at the beginning of each year based on the annual budget approved by
the Board of Directors, and an assessment of individual performance at the end
of the year in accordance with Northwests performance measurement system for
salaried employees. The Companys actual adjusted income contribution is
defined as the Companys operating income (excluding depreciation, amortization
and aircraft rental expense) adjusted to exclude the impact of any
extraordinary, unusual or special items and other items that are deemed to be
outside of managements control such as increases or decreases in operating
expense due to the price of fuel and foreign currency exchange. In addition, the Company must meet a minimum
profitability threshold for the year in order for there to be payouts in excess
of target payout amounts. Target payouts under the Annual Cash Incentive Plan
are established as a percentage of the participants base salary. Mr. Steenlands
target payout percentage is 100% of his annual salary and the target payout
percentage for the other Named Executive Officers is 60% of their annual
salary. The annual incentive payment for individual participants in the plan, including
the Named Executive Officers, may be increased or decreased based on individual
performance; however, the total pool available for annual incentive payments to
participants in any year is fixed based on the level of Company performance and
the total base salary amounts for all participants. At the end of each year,
the Compensation Committee reviews performance data with management and
determines the extent to which the Companys financial goals have been
achieved. An individuals potential payout may range from 0% to 200% of his or
her target payout amount depending on Company and individual performance.
For 2007, the Companys income contribution target was $2,306 million and
the minimum profitability threshold for the year was $1. The potential payouts
for 2007 under the Annual Cash Incentive Plan for the Named Executive Officers
are set forth below in the Grants of Plan-Based Awards in 2007 table. The
Companys actual adjusted income contribution performance for the year was
$2,318 million, which was 100.5% of the income contribution target. Based on
the Companys performance, the payout percentage for the financial performance
component for 2007 was 104.9% of such target. The 2007 Annual Cash Incentive
Plan payout amounts for
the Named Executive Officers are included in the
Summary Compensation Table under the Non-Equity Incentive Plan Compensation
column. In January 2008 the Committee approved an income contribution
target for 2008 based on the 2008 budget approved by the Board of Directors.
·
Long Term Cash Incentive Plan.
Officers of Northwest selected by the Compensation Committee to receive
an award are eligible to participate in the Long Term Cash Incentive Plan. This
plan provides for cash payments based on the relative adjusted operating margin
performance of Northwest during two-year performance periods measured against
five other major U.S. network airlines, including American, United, Delta,
Continental and US Airways. Adjusted operating margin for each airline is
defined as operating income as a percentage of revenue with operating income
adjusted to exclude the impact of fuel prices and any extraordinary,
unusual or special items. Mr. Steenlands target payout percentage
under the Long Term Cash Incentive Plan is 150% of his annual salary and the
target payout percentage for the other Named Executive Officers is 70% of their
annual salary.
Actual payout amounts under the Long Term Cash Incentive Plan are
approved by the Committee each year and may range between 0% and 200% of the target
payout level, based on the Companys adjusted operating margin performance
relative to the airline peer group during the performance period and the
Companys satisfaction of a net profitability threshold for each year during
the performance period, as shown below. Payouts are also conditioned on the
participant maintaining a minimum individual performance rating during the
applicable performance period.
50% Payout
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The Company ranks third among the airline peer group based on an
adjusted operating margin performance measure
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100% Payout
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The Company ranks second among the airline peer group based on an
adjusted operating margin performance measure
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150% Payout
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The Company ranks first among the airline peer group based on an
adjusted operating margin performance measure or the Company ranks second on
such measure and the Company achieves a net profitability threshold
established by the Committee for the years during the performance period
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200% Payout
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The Company ranks first among the airline peer group based on an
adjusted operating margin performance measure and achieves a net
profitability threshold established by the Committee for the years during the
performance period
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The Companys relative
operating margin performance during the two year performance period ended December 31,
2007 resulted in a payout of 200% of target payout levels. The net
profitability threshold established for 2006 and 2007 was $1.
5
The incentive payments for
the two year performance period ended December 31, 2007 earned by each of
the Named Executive Officers are included in the Summary Compensation Table
under the Non-Equity Incentive Plan Compensation column. In early 2007, each
of the Named Executive Officers was granted an award under the Long Term Cash
Incentive Plan for the two year performance period ending on December 31,
2008. These awards are set forth below in the Grants of Plan Based Awards in
2007 table.
·
E-Commerce Incentive Compensation Program.
In 2000, the
Board of Directors adopted the Northwest Airlines Corporation E-Commerce
Incentive Compensation Program (the E-Commerce Plan) as an incentive to
management to create, develop and maximize the value of specified equity
investments of Northwest and its affiliates.
The program has been highly successful for the Company. Management was
instrumental in developing a number of e-commerce or internet-based businesses,
including Orbitz, LLC and Hotwire, Inc. To date, as a result of the sale
of a number of these investments, Northwest has generated aggregate cash
proceeds of approximately $190 million and a return on the group of investments
of approximately 442%. The $190 million in cash investment proceeds is separate
and apart from any revenues generated by Northwests operations. Under the
E-Commerce Plan, 200 Points or 20% of the value of the investments in excess of
the sum of the cost of such investments plus a minimum compounded annual return
of 15% was set aside for awards to key employees of Northwest.
The
Company has disposed of all of the investments covered by the E-Commerce Plan;
however, in 2007 certain redemption amounts with respect to awards granted in
prior periods continued to be subject to vesting based on the participants
continued employment with the Company. 2007 earnings on redemption amounts
under outstanding awards that remain subject to vesting for each of the Named
Executive Officers are included in the Summary Compensation Table under the Non-Equity
Incentive Plan Compensation column. In addition, in November 2007, the
Committee granted to Mr. Cohen an award of 2 points out of the remaining
points available for allocation under the E-Commerce Plan in recognition of Mr. Cohens
leadership and contributions to the successful formation of Northwests
regional carrier group, including the commencement of revenue service in May 2007
by Northwests wholly-owned subsidiary, Compass Airlines, Inc., and
Northwests acquisition in April 2007 of Mesaba Aviation, Inc.
Vesting of the award was subject to Mr. Cohens continued employment until
April 1, 2008. The payout amount under Mr. Cohens award is included
in the Summary Compensation Table under the Non-Equity Incentive Plan
Compensation column and is also set forth below in the Grants of Plan Based
Awards in 2007 Table.
·
Equity Based Compensation.
Under the Companys Plan of Reorganization, all outstanding stock awards
previously granted under NWA Corp.s stock incentive plans were cancelled on May 31,
2007, the effective date of the Plan of Reorganization. In connection with the Companys emergence
from bankruptcy and after consultation with the official committee of unsecured
creditors appointed in the Companys bankruptcy case, the Board of Directors
approved the 2007 Stock Incentive Plan (the Stock Plan). The Bankruptcy Court
approved the Stock Plan in connection with its confirmation of the Companys
Plan of Reorganization and in doing so, complimented the Companys management
on its performance during the bankruptcy case. Under the Stock Plan, the
Committee has the authority to grant cash awards and/or equity-based awards
including stock options, stock appreciation rights, restricted stock,
restricted stock units and other stock-based awards, including performance-based
awards, to employees of the Company. A total of 21,333,248 shares of Common
Stock or approximately 8% of the total shares of Common Stock to be issued in
connection with the Companys emergence from bankruptcy were made available for
grant pursuant to the Stock Plan, as such number may be adjusted pursuant to
the provisions of the Stock Plan.
In connection with the Companys emergence from bankruptcy, the Committee
approved the grant of awards covering a total of approximately 13,597,834
shares of Common Stock in the form of stock options, stock appreciation rights
and restricted stock units to approximately 400 employees of Northwest and
certain subsidiaries of Northwest, including the Named Executive Officers. Approximately 60% of these awards were granted
in the form of restricted stock units and approximately 40% were granted in the
form of non-qualified stock options and stock appreciation rights. The stock
options, restricted stock units and stock appreciation rights will vest,
subject to the participants continued employment with Northwest or a
subsidiary
of Northwest, in
equal semi-annual installments over four years.
The Committee also approved the grant of restricted stock units covering
a total of approximately 1,618,583 shares of Common Stock to approximately
5,400 employees worldwide at the manager level and below. These awards will
vest in full one year after the date of grant.
Each of the Named Executive Officers was granted restricted stock units
and stock options as part of the emergence awards granted in connection with
the Companys emergence from bankruptcy. These awards are included below in the
Grants of Plan-Based Awards in 2007 table.
The Committee intended, and
the Stock Plan provides, that the individuals receiving emergence awards,
including the Named Executive Officers, would not receive any additional awards
under the Stock Plan
6
during the four
years following the effective date of the Plan of Reorganization, except in the
case of a promotion, a material increase in the employees job responsibilities
or in special circumstances determined by the Committee to be in the best
interests of the Company. In
determining the size of restricted stock unit and stock option awards to the
Named Executive Officers and other management employees, the Committee
considered the amount of equity-based awards held by individuals holding
similar positions at comparable companies, Company performance and achievement
of the Companys restructuring objectives, individual performance and
leadership potential, as well as the allocation of the total pool of shares
available for grant in connection with the emergence awards among the
individuals holding positions at various levels in the Company.
·
Retirement Benefits.
Northwest maintains the following
retirement plans, in which some or all of its Named Executive Officers
participate:
·
Retirement Savings Plan
for Salaried Employees.
The Retirement Savings Plan for Salaried Employees (the Retirement
Savings Plan) is a funded and tax-qualified 401(k) retirement plan that
is offered to all salaried employees of Northwest, including the Named
Executive Officers. The plan permits employees to contribute a portion of their
pay for the year to the plan on a pretax or after tax basis. Effective September 1,
2005, as a result of freezing pension benefit accruals under Northwests
defined benefit pension plans (see Frozen Defined Benefit Pension Plans
below), Northwest began making Company contributions to participants accounts
in the Retirement Savings Plan to replace benefit accruals under the defined
benefit plans for service on and after September 1, 2005. The Company
contributions are a percentage of pay (salary and cash incentive compensation)
that varies based on the participants age and years of service. The following
table shows the rates of Company contributions to the Retirement Savings Plan
in effect during 2007.
Age plus Vesting
Service
|
|
Company Contribution
(as a percent of pay)
|
|
Less than 30
|
|
5
|
%
|
|
|
|
|
30 through 39
|
|
6
|
%
|
|
|
|
|
40 through 49
|
|
7
|
%
|
|
|
|
|
50 through 59
|
|
9
|
%
|
|
|
|
|
60 through 69
|
|
10
|
%
|
|
|
|
|
70 through 79
|
|
12
|
%
|
|
|
|
|
80 and over
|
|
15
|
%
|
The amounts contributed by Northwest in 2007 to the
accounts of the Named Executive Officers under the Retirement Savings Plan are
shown below
in the All Other Compensation Table that follows the
Summary Compensation Table and included in the Summary Compensation Table.
Benefits under the plan are payable to participants upon retirement or termination
of employment.
·
Excess 401(k) cash
payments.
Contributions that cannot be made to the
Retirement Savings Plan due to limits on contributions under the Internal
Revenue Code of 1986, as amended (the Internal Revenue Code) are made to each
executive in cash on a semi-monthly basis. These cash payments are not entitled
to the deferred tax benefit associated with the Retirement Savings Plan.
Northwest provides this benefit so that executives and other employees who are
subject to the Internal Revenue Code limits obtain the same rate of Company
contributions, as a percentage of pay, as all other salaried employees. The
excess 401(k) cash payments made to the Named Executive Officers in 2007
are shown in the All Other Compensation Table that follows the Summary
Compensation Table and included in the Summary Compensation Table.
·
Frozen Defined Benefit
Pension Plans.
Historically, the Named Executive
Officers participated in three defined benefit pension plans the Northwest
Airlines Pension Plan for Salaried Employees (the Salaried Pension Plan) (a
qualified plan under which benefits are subject to Internal Revenue Code
limitations, the Northwest Airlines Excess Pension Plan for Salaried Employees
(the Excess Pension Plan) (a nonqualified, unfunded plan that provides
retirement benefits that would otherwise be provided under the Salaried Pension
Plan but for the Internal Revenue Code limitations), and the Supplemental
Executive Retirement Plan (the SERP), which is described below. Historically,
under these plans salaried employees hired on or before January 1, 2001
receive benefits based on the higher of a final average earnings formula and
a cash balance formula. Benefits for salaried employees hired after
7
January 1,
2001 are based solely on a cash balance formula, which provides a benefit
based on career pay rather than final average earnings. The formula used to
compute participant benefits under the final average earnings formula is 60% of
a participants final average earnings
less 15% of participants covered
compensation multiplied by actual service divided by 30 years. Final
average earnings are the highest consecutive 60 months of pay during the
participants employment. Under the cash balance formula, a percentage of a
participants pay was credited to a hypothetical account which grows with
interest. A participants pay credit under the cash balance formula was based
on the participants age plus vesting service and ranges from 6% to 18% of pay.
Interest is credited at 1% over the one-year Treasury bill rate with a floor
rate of 3.5%. Pension benefit accruals under both the Salaried Pension Plan and
the Excess Pension Plan were frozen effective August 31, 2005 and replaced
by an employer contribution to Northwests Retirement Savings Plan and related
excess cash payments. The present values of each Named Executive Officers
accumulated pension benefits as of December 31, 2007 under the Salaried
Pension Plan and the Excess Pension Plan are included in the 2007 Pension
Benefits table set forth below.
·
Supplemental Executive
Retirement Plan.
The SERP is a nonqualified, unfunded plan, under which Northwest provides
eligible executives, including Messrs. Steenland, Cohen, Griffin and Roberts,
supplemental pension benefits over and above the executives benefits under the
Salaried Pension Plan and the Excess Pension Plan. The SERP was designed to
attract mid-career senior executives by granting executives additional credited
years of service or additional pay credits during specified periods of time as
provided in individual agreements entered into with the particular executive.
The additional benefit accruals are earned by the executive over a period of
years if the executive remains employed by Northwest during such period, and,
in the case of Mr. Steenland, if his employment is terminated in specified
circumstances. In the case of Mr. Steenland, Northwest agreed to provide
up to six additional years of service credit to him over the six year period
commencing April 1, 2006, so long as he remains employed by Northwest
during such period. Under the SERP, participants final average compensation
for purposes of determining pension benefits under the final average earnings
formula is defined as the average of the executives monthly earnings for the
highest 36 months (whether or not consecutive) during the participants
employment. The present value of each Named Executive Officers accumulated
pension benefit under the SERP as of December 31, 2007 is included in the
2007 Pension Benefits table set forth below. Historically, benefit accruals
under the SERP were determined based on the final average earnings formula and
the cash balance formula used to determine benefit accruals under the Salaried
Pension Plan and the Excess Pension Plan. Consistent with the Salaried Pension
Plan and the Excess Pension Plan, benefits accumulated under the final average
earnings formula and the cash balance formula were frozen effective August 31,
2005. Benefit accruals under the SERP for service on and after September 1,
2005 are determined by a formula based on pay and interest credits, as provided
in the executives individual agreement entered into pursuant to the SERP.
Vested pension benefits under the SERP are payable as a lump sum upon the
participants termination of employment. All benefits under the SERP are
unfunded and are payable by Northwest from its general assets.
·
Perquisites.
We provide
our Named Executive Officers with other personal benefits that we believe are
reasonable, competitive and consistent with the Companys overall executive
compensation program.
In 2007 these benefits included reimbursement
payments for specified medical expenses; positive space airline pass travel
benefits on Northwest and other airlines for the personal use of each Named
Executive Officer, his eligible family members and other individuals designated
by the Named Executive Officer; excess liability insurance coverage;
reimbursement for the cost of specified club memberships; financial and tax
planning services; car allowances and an annual physical examination for each
Named Executive Officer. In addition, from time to time the Company makes
tickets to cultural and sporting events available to the Named Executive Officers
for business purposes. If not utilized for business purposes, they are made
available to the Named Executive Officers and other employees for personal use.
The incremental costs incurred by the Company in 2007 to provide these benefits
to the Named Executive Officers are shown in the All Other Compensation Table
that follows the Summary Compensation Table and included in the Summary
Compensation Table.
New Plans and Arrangements Adopted in Connection with
Potential Merger
On April 14, 2008, NWA Corp. and Delta Air Lines, Inc.
(Delta) entered into an Agreement and Plan of Merger (the Merger Agreement),
pursuant to which NWA Corp. and Delta will combine their businesses through a
merger (the Merger). In connection with
the execution of the Merger Agreement, in April 2008 the Committee and the
Board of Directors approved various amendments to existing compensation
plans and arrangements applicable to employees of Northwest, and some new
compensation plans and arrangements in which the Named Executive Officers will
participate. A description of these
amendments and the new plans and arrangements follows. As part of considering a
potential merger transaction with Delta, the Committee evaluated the
compensation and benefit arrangements in which Deltas senior management
participates and compared those arrangements to similar arrangements applicable
to the Companys senior management. The Committee also considered the retention
issues the Company is expected to face in light of the required regulatory review
period for the proposed Merger and the anticipated relocation of the combined
companies headquarters to Atlanta following the Merger. The Committee retained
Towers Perrin to assist it in reviewing the types of
8
arrangements implemented for senior management in
other change of control transactions and the range of costs associated with
such arrangements. The Committee evaluated the projected costs associated with
the plans and arrangements considered by the Committee under various
assumptions and compared those costs to the range of cost estimates associated
with the implementation of similar plans and arrangements by other companies in
similar change of control transactions. Following an extensive evaluation, the
Committee and the Board of Directors determined that the proposed plans and
arrangements were appropriate and necessary in the context of the Merger.
Amendments to Management
Compensation Agreements
.
The Company entered into amendments to the existing management
compensation agreements with its officers, including each of the Named
Executive Officers other than Mr. Steenland. Under the amendments, the definition of good
reason was modified to be more protective of certain elements of the officers
compensation and benefits following a change of control. In addition to the existing events that
constitute good reason, the definition of good reason was amended to
include, following a change of control: (1) a material reduction in the officers
short-term or long-term cash incentive compensation opportunities; (2) if
Northwest or its successor does not keep in effect compensation, incentive,
retirement, health and welfare benefits, or perquisite programs, under which
the officer receives benefits substantially comparable in the aggregate to
those in effect prior to the change of control (other than a reduction pursuant
to an equivalent reduction in such benefits for all full time domestic salaried
employees); and (3) the relocation of the officers principal place of
employment by more than 50 miles. In
addition, those Named Executive Officers whose previously granted
post-employment confirmed space pass travel privileges have not yet vested (Messrs. Cohen
and Davis) will become vested in those privileges on an accelerated basis in
the event their employment with Northwest is terminated without cause or by
the officer for good reason (each, as defined in the amended agreements)
within two years after a change of control.
In addition, under the amendments, certain officers (including the Named
Executive Officers) who would be retiree-eligible at the time of their
termination of employment will be entitled to receive tax gross-up payments for
the imputed income resulting from their use of such pass travel privileges
following termination of employment.
Following a change of control, the officer will be entitled to receive
from Northwest, any successor of Northwest and their affiliates post-employment
pass travel privileges on terms and conditions no less favorable than those to
which the officer was entitled immediately prior to the change of control. The amendments also provide for a gross-up
payment not to exceed $1,000,000 for excise taxes incurred by any officer under
Code Sections 280G and 4999, subject to specified limitations (including a
cutback (that is, no gross-up payment) if the amount of the payments subject to
the excise tax exceed the applicable safe harbor by less than 10% (within the
meaning of Code Sections 280G and 4999 and the applicable regulations
thereunder)).
Amendments
to Stock Incentive Plan and Outstanding Equity Awards.
The Company amended the Stock Plan and
the outstanding awards under the Stock Plan to provide, among other things, for
the automatic vesting of all outstanding awards that are unvested or subject to
lapse restrictions upon the occurrence of a change of control. In addition, the amendments provide that, if
a participants employment is terminated without cause or for good reason
(each, as defined in the Stock Plan) within two years after a change of
control, the participant will have up to three years following such termination
to exercise the option. In all cases,
however, the post-termination exercise period remains subject to the awards
original 10-year term.
Amendments to Existing Incentive
Compensation Plans
.
The Company amended the terms of the Annual
Cash Incentive Plan and the Long Term Incentive Plan in order to provide some
protections to participants in those plans (including the Named Executive
Officers) in the event of a change of control.
The amendments provide that, in the event of a change of control, the
administrator of the plans may not reduce any amounts otherwise payable under
the plan for any performance periods in which the change of control occurs or
terminate any outstanding incentive opportunity for such performance
periods. In addition, the amendments
provide that the administrator of each plan will, in good faith, make any adjustment
that it reasonably determines to be equitable to the performance measures for
the performance period in which a change of control occurs, to reflect any
change in the business of Northwest or its successor. The amendment to the Annual Cash Incentive
Plan also provides that in the event of a change of control, subject to the
participants continued employment with Northwest through the date the annual
incentive compensation becomes payable to such participant, Northwest will pay
to the participant the greater of his or her target incentive payment or the
amount of his or her incentive payment based on the Companys actual
performance for the performance period.
Retention
Agreement and Amendment to CEO Management Compensation Agreement
. The Company entered into a Retention
Agreement and Amendment to Mr. Steenlands Management Compensation
Agreement (the Retention Agreement).
Under Mr. Steenlands previously existing Management Compensation
Agreement (the Existing Agreement), which is described under Management
Compensation Agreements below, Mr. Steenland was entitled to resign for
any reason during the thirty day period commencing on May 31, 2008, which
is the first anniversary of the effective date of the Companys plan of
reorganization, and receive the severance payments and benefits set forth in
his Existing Agreement. Under the
Retention Agreement, Mr. Steenland waived his right to resign during this
period and receive such severance benefits in exchange for the grant to Mr. Steenland
of 375,000 restricted retention units, each of which represents the right to
receive, subject to the terms and conditions set forth in the Retention
Agreement, an amount in cash equal to
the fair market value of a share of common stock of the Company (not to
exceed $22.00 per share for this
9
purpose) multiplied by the number of vested units pursuant to the terms
of the Retention Agreement. The
restricted retention units will vest subject to Mr. Steenlands continued
employment as follows: (1) if the Merger Agreement is terminated without the
Merger having occurred, then the units will vest in installments of 25% each on
the first four anniversaries of the date of the termination of the Merger
Agreement, and (2) if Mr. Steenlands employment is terminated by Northwest
other than for cause or by Mr. Steenland for good reason (each as defined in
the Retention Agreement) or due to Mr. Steenlands death or disability, or if
the Merger is consummated, then the unvested portion of the units will become
immediately vested in full. If Mr.
Steenlands employment is terminated for any other reason, any unvested units
will be forfeited. The Retention
Agreement provides that Mr. Steenland will be obligated to re-pay to Northwest
a pro-rated portion of any payments received by him upon the vesting of any of
the restricted retention units in the event Mr. Steenland joins specified
competitors of Northwest within the one year period following his termination
of employment with Northwest, based upon the percentage of such one year period
that had not elapsed as of such date, and contains a provision prohibiting Mr.
Steenland from soliciting employees of Northwest for employment with another
entity during such period. The Retention
Agreement also provides that, in the event of a change of control, Mr.
Steenland will be entitled to receive from Northwest, any successor of
Northwest and their affiliates post-employment pass travel privileges on terms
and conditions no less favorable than those to which Mr. Steenland was entitled
to immediately prior to the change of control, and Mr. Steenlands
post-termination medical and dental benefits will be provided on an after-tax
basis with Mr. Steenland paying, until age 65, the same percentage of the
premium cost as that payable by active officers of Northwest from time to time,
but in any event not to exceed 25% of the premium cost for such coverage.
The Merger Agreement contemplates that the headquarters of the combined
company will be located in Atlanta and the Chief Executive Officer of the
combined company will be Richard H. Anderson, the current Chief Executive
Officer of Delta. In the event the Merger is consummated in 2008 and Mr.
Steenlands employment with Northwest is terminated on January 1, 2009, the
total estimated payments and benefits that Mr. Steenland would be entitled to
receive would be $18,309,865, which includes $6,212,347 of estimated pension
benefits and the value of outstanding restricted stock units based on the
closing sale price of a share of Common Stock on April 22, 2008 ($7.47).
Compensation Committee Report
The Compensation Committee has reviewed and discussed with management
the Compensation Discussion and Analysis included in this report and, based on
such review and discussions, we recommended to the Board of Directors that the
Compensation Discussion and Analysis be included in this Annual Report on Form
10-K for filing with the Securities and Exchange Commission.
Compensation Committee
Roy J. Bostock (Chair)
David A. Brandon
James J. Postl
Summary Compensation Table
The following table sets forth information regarding the compensation
of the Companys Named Executive Officers in 2007 and 2006:
10
Name and
Principal Position
|
|
Salary
|
|
Bonus
|
|
Stock Awards
(1)
|
|
Option
Awards(1)
|
|
Non-Equity
Incentive Plan
Compensation
(2)
|
|
Change in
Pension Value
and
Nonqualified
Deferred
Compensation
Earnings(3)
|
|
All Other
Compensation
(4)
|
|
Total
|
|
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
Douglas M. Steenland President & Chief
Executive Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2007
|
|
531,919
|
|
|
|
3,508,423
|
|
758,117
|
|
2,239,093
|
|
365,000
|
|
329,035
|
|
7,731,587
|
|
2006
|
|
516,384
|
|
|
|
|
|
333,514
|
|
994,146
|
|
516,000
|
|
297,353
|
|
2,657,397
|
|
Neal S. Cohen
Executive Vice PresidentStrategy & International; CEORegional
Airlines
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2007
|
|
413,706
|
|
100,000
|
(5)
|
1,709,802
|
|
431,394
|
|
1,161,640
|
|
130,000
|
|
129,601
|
|
4,076,143
|
|
2006
|
|
388,086
|
|
100,000
|
(5)
|
|
|
100,616
|
|
399,599
|
|
161,000
|
|
72,238
|
|
1,221,539
|
|
David M. Davis Executive Vice President &
Chief Financial Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2007
|
|
374,007
|
|
|
|
1,210,355
|
|
376,601
|
|
687,649
|
|
3,000
|
|
72,663
|
|
2,724,275
|
|
J. Timothy Griffin Executive Vice
PresidentMarketing & Distribution
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2007
|
|
413,706
|
|
|
|
1,474,622
|
|
333,432
|
|
857,224
|
|
493,000
|
|
199,496
|
|
3,771,480
|
|
2006
|
|
401,616
|
|
|
|
|
|
125,403
|
|
345,398
|
|
34,000
|
|
186,287
|
|
1,092,704
|
|
Andrew C. Roberts Executive Vice President
Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2007
|
|
413,706
|
|
|
|
1,608,821
|
|
437,248
|
|
884,134
|
|
100,000
|
|
121,493
|
|
3,565,402
|
|
2006
|
|
361,783
|
|
|
|
|
|
63,337
|
|
399,599
|
|
166,000
|
|
83,425
|
|
1,074,144
|
|
(1)
The amounts set forth in these columns do
not represent any amounts that the Named Executive Officers are entitled to
receive; rather they represent the compensation expense recognized by the
Company for financial statement reporting purposes with respect to 2007 for the
grant date fair value of the awards granted to each of the Named Executive
Officers in 2007 in accordance with Statement on Financial Accounting Standards
No. 123 (revised 2004), Share Based Payments. As stated in footnote (6) to
the Grants of Plan-Based Awards in 2007 Table, the value of the restricted
stock unit awards granted to the Named Executive Officers in 2007 based on the
closing sales price of a share of Common Stock on April 22, 2008 ($7.47)
is substantially lower than the grant date value of such awards and the
intrinsic value of the stock options granted to each of the Named Executive
Officers in 2007 based on the April 22, 2008 closing stock price would be
zero because the exercise price of each option was higher than the stock price
on such date. The restricted stock units and the stock options will vest,
subject to the executives continued employment with Northwest or a subsidiary
of Northwest, in equal semi-annual installments over four years. The stock
options were granted with an exercise price equal to the closing price of a
share of Common Stock on the date of grant and have a ten year term.
Pursuant to SEC
rules, the amounts shown under Option Awards reflect (A) a deduction of
the 2006 compensation expense recognized by the Company for outstanding stock
options previously held by the Named Executive Officers, which were cancelled
pursuant to the Companys Plan of Reorganization, and (B) exclude for both
years the impact of estimated forfeitures related to service-based vesting
conditions. See note 10 to NWA Corp.s consolidated financial statements for
the year ended December 31, 2007 for a discussion of the assumptions used
in the valuation of the stock option awards.
(2)
This column includes: (A) the
following amounts earned under the Annual Cash Incentive Plan for 2007: Mr. Steenland
($565,094), Mr. Cohen ($263,711), Mr. Davis ($263,711), Mr. Griffin
($263,711) and Mr. Roberts ($263,711); (B) the following amounts
earned pursuant to previously granted awards under the Long Term Cash Incentive
Plan for the two year performance period ending December 31, 2007: Mr. Steenland
($1,635,189), Mr. Cohen ($593,513), Mr. Davis ($423,938), Mr. Griffin
($593,513) and Mr. Roberts ($593,513); (C) the redemption value of an
award granted to Mr. Cohen in November 2007 under the E-Commerce Plan
of 2 points, which, when vested, equaled $277,506
;
and (D) 2007 earnings on outstanding unvested awards
previously granted under the E-Commerce Plan as follows: Mr. Steenland
($38,810), Mr. Cohen ($26,910) and Mr. Roberts ($26,910). See Northwests
Executive Compensation Program under the Compensation Discussion and Analysis
section above for a description of the incentive compensation plans referred to
in this footnote.
(3)
This column represents the increase in the
present value of accumulated pension benefits for each of the Named Executive
Officers under the Salaried Pension Plan, the Excess Pension Plan, and, for Messrs. Steenland,
Cohen, Griffin and Roberts, the SERP. See Northwests Executive Compensation
Program Retirement Benefits under the Compensation Discussion and Analysis
section above for a description of these plans. A description of the assumptions used to determine these amounts
is included below in footnote 2 to the 2007 Pension Benefits table.
(4)
See the table below under the caption All
Other Compensation Table for details regarding the amounts disclosed in the All
Other Compensation column.
(5)
The amounts shown for Mr. Cohen
reflect retention payments in the amount of $100,000 each paid to him in 2007
and 2006 pursuant to his Management Compensation Agreement. The agreement
entered into in connection with Mr. Cohens hiring provides that he will
receive annual retention payments equal to $100,000 each on May 1 of 2006,
2007, 2008, 2009 and 2010 so long as he is employed by Northwest on such dates.
11
All Other Compensation Table
The
following table describes each component of the All Other Compensation column
of the Summary Compensation Table.
Name
|
|
Tax
Reimbursement
Payments
|
|
Employer
Contributions
to 401(k) Plan
(1)
|
|
Excess 401(k)
Plan Cash
Payments
(2)
|
|
Life Insurance
Premiums
|
|
Incremental
Cost of
Perquisites or
Personal
Benefits
(3)
|
|
Total All
Other
Compensation
|
|
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
Douglas M. Steenland
|
|
58,552
|
|
27,000
|
|
135,974
|
|
40,000
|
|
67,509
|
|
329,035
|
|
Neal S. Cohen
|
|
16,766
|
|
20,250
|
|
57,069
|
|
|
|
35,516
|
|
129,601
|
|
David M. Davis
|
|
9,972
|
|
15,750
|
|
20,739
|
|
|
|
26,202
|
|
72,663
|
|
J. Timothy Griffin
|
|
43,626
|
|
22,500
|
|
58,338
|
|
44,000
|
|
31,032
|
|
199,496
|
|
Andrew C. Roberts
|
|
15,016
|
|
20,250
|
|
48,069
|
|
|
|
38,158
|
|
121,493
|
|
(1)
As discussed in footnote (3) to the
Summary Compensation Table, effective August 31, 2005, Northwest amended
the Salaried Pension Plan and the Excess Pension Plan to freeze future benefit
accruals under those plans and amended the Retirement Savings Plan to provide
for a Company contribution to participants accounts for service on and after September 1,
2005.
(2)
This column includes Company contributions
that would have been made for the benefit of the Named Executive Officers under
Northwests Retirement Savings Plan but are in excess of the limitations
imposed by the Internal Revenue Code. In connection with the amendments to the
Retirement Savings Plan discussed in footnote (1) above, beginning September 1,
2005, all Company contribution amounts to Northwests Retirement Savings Plan
that are in excess of the limitations under the Internal Revenue Code are
payable to employees in cash on a semi-monthly basis. See Northwests
Executive Compensation Program Retirement Benefits Excess 401(k) cash
payments under the Compensation Discussion and Analysis section above.
(3)
This column
represents the incremental cost incurred by the Company in providing
perquisites to the Named Executive Officers in 2007. These perquisites include
reimbursement payments for certain medical expenses, complimentary travel
benefits on Northwest and other airlines for the personal use of each Named
Executive Officer, his eligible family members and other individuals designated
by the Named Executive Officer, excess liability insurance coverage, club
memberships, financial and tax planning services, car allowances and an annual
physical examination for each Named Executive Officer. The incremental cost of
airline travel benefits provided for the personal use of the Named Executive
Officer and their eligible family members is based on the methodology
previously used by the Company to estimate, for financial reporting purposes
under an incremental cost approach, the cost of
carrying a passenger flying on
a frequent flyer mileage award, which is based on the average cost per
passenger for food and beverage, fuel, insurance, security, miscellaneous
claims and Northwests frequent flyer distribution and administration expenses.
The incremental cost of the airline travel benefits the Named Executive
Officers are entitled to make available for other individuals is based on the
lowest published fare for the particular Northwest flight plus an additional
fee for first or business class service. Many of our officers who are entitled
to such benefits choose to donate these benefits to charitable organizations.
The incremental cost of the airline travel benefits provided to Mr. Steenland
in 2007 was $25,736. See Northwests Executive Compensation Program
Perquisites under Compensation Discussion and Analysis above.
12
Grants of Plan-Based Awards in 2007
The following table provides information about awards granted to our
Named Executive Officers during 2007 under the Annual Cash Incentive Plan, the
Long Term Cash Incentive Plan, the E-Commerce Plan and the Stock Plan. These
incentive compensation plans are described in the Compensation Discussion and
Analysis section under Northwests Executive Compensation Programs.
|
|
|
|
Estimated
Future Payouts Under
|
|
Estimated
Future Payouts
|
|
|
|
All
Other
|
|
|
|
|
|
|
|
|
|
Non-Equity Incentive Plan Awards
|
|
Under
Equity Incentive Plan
|
|
All
Other
|
|
Option
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Awards
|
|
Stock
|
|
Awards:
|
|
|
|
|
|
Name
|
|
Grant Date
|
|
Threshold
|
|
Target
|
|
Maximum
|
|
Threshold
|
|
Target
|
|
Maxi-
mum
|
|
Awards:
Number of Shares of Stock or Units (4)
|
|
Number
of Securities Underlying
Options
(5)
|
|
Exercise
or Base
Price of
Option
Awards
|
|
Grant
Date
Fair Value
of Stock and
Option
Awards (6)
|
|
|
|
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
(#)
|
|
(#)
|
|
($/sh)
|
|
($)
|
|
Douglas M. Steenland
|
|
1/25/2007
|
(2)
|
0
|
|
545,063
|
|
1,090,126
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/25/2007
|
(3)
|
0
|
|
817,595
|
|
1,635,189
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5/31/07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
715,821
|
|
|
|
|
|
18,002,898
|
|
|
|
6/14/07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
159,071
|
|
22.68
|
|
2,050,950
|
|
|
|
6/28/07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
159,071
|
|
22.26
|
|
2,006,713
|
|
|
|
7/13/07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
159,072
|
|
21.07
|
|
1,899,447
|
|
Neal S. Cohen
|
|
1/25/2007
|
(2)
|
127,181
|
|
254,363
|
|
508,726
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/25/2007
|
(3)
|
148,378
|
|
296,757
|
|
593,513
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5/31/07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
348,850
|
|
|
|
|
|
8,773,578
|
|
|
|
6/14/07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
77,522
|
|
22.68
|
|
999,515
|
|
|
|
6/28/07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
77,522
|
|
22.26
|
|
977,955
|
|
|
|
7/13/07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
77,523
|
|
21.07
|
|
925,687
|
|
|
|
11/29/2007
|
(7)
|
|
(7)
|
277,506
|
|
|
(7)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David M. Davis
|
|
1/25/2007
|
(2)
|
127,181
|
|
254,363
|
|
508,726
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/25/2007
|
(3)
|
148,378
|
|
296,757
|
|
593,513
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5/31/07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
246,947
|
|
|
|
|
|
6,210,717
|
|
|
|
6/14/07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
54,877
|
|
22.68
|
|
707,546
|
|
|
|
6/28/07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
54,877
|
|
22.26
|
|
692,284
|
|
|
|
7/13/07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
54,877
|
|
21.07
|
|
655,275
|
|
J. Timothy Griffin
|
|
1/25/2007
|
(2)
|
127,181
|
|
254,363
|
|
508,726
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/25/2007
|
(3)
|
148,378
|
|
296,757
|
|
593,513
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5/31/07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
300,866
|
|
|
|
|
|
7,566,780
|
|
|
|
6/14/07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
66,859
|
|
22.68
|
|
862,033
|
|
|
|
6/28/07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
66,859
|
|
22.26
|
|
843,440
|
|
|
|
7/13/07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
66,859
|
|
21.07
|
|
798,350
|
|
Andrew C. Roberts
|
|
1/25/2007
|
(2)
|
127,181
|
|
254,363
|
|
508,726
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/25/2007
|
(3)
|
148,378
|
|
296,757
|
|
593,513
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5/31/07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
328,247
|
|
|
|
|
|
8,255,412
|
|
|
|
6/14/07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
72,944
|
|
22.68
|
|
940,489
|
|
|
|
6/28/07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
72,944
|
|
22.26
|
|
920,203
|
|
|
|
7/13/07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
72,943
|
|
21.07
|
|
870,998
|
|
(1)
These columns show the potential value of
the payout for each Named Executive Officer with respect to awards granted
under the Annual Cash Incentive Plan, the Long Term Cash Incentive Plan and the
E-Commerce Plan if the threshold, target or maximum goals under each plan are
achieved. The potential payouts under the Annual Cash Incentive Plan and the
Long Term Cash Incentive Plan are performance-driven and therefore at risk.
These incentive plans are described above in the Compensation Discussion and
Analysis section under Northwests Executive Compensation Programs.
(2)
These awards were granted for 2007 under
the Annual Cash Incentive Plan. The plan provides for different payout amounts
based on the Companys achievement of an income contribution target established
by the Compensation Committee at the beginning of the year and an assessment of
individual performance during the year, as well as achievement of a net
profitability threshold for payouts in excess of target payout amounts. Target
payout amounts are established as a percentage of the participants annual
salary. The amounts shown are based on the executives current annual salary
levels; however, actual payouts will be based on the executives annual
salaries in effect at the time of the payout.
(3)
These awards were granted pursuant to the
Long Term Cash Incentive Plan for the two year performance period beginning January 1,
2007. The plan provides for different payout amounts based on Northwests rank
among the companies in its industry peer group in average operating margin
during the two years included in the performance period and Northwests
achievement of a net profitability threshold in each year included in the
performance period. The payouts are also contingent upon the participant
maintaining a minimum individual performance rating during the performance
period. The amounts shown are based on the executives current annual salary
levels; however, actual payouts will be based on the executives annual
salaries in effect at the time of the payout.
(4)
Amounts in this column represent
restricted stock unit awards granted under the Stock Plan on May 31, 2007
in connection with the Companys emergence from bankruptcy. The FAS123R grant
date value of these awards is $25.15 per share.
(5)
Amounts in this column represent stock
options granted under the Stock Plan to the Named Executive Officers in 2007 in
connection with the Companys emergence from bankruptcy. The FAS123R grant date
fair value of the stock option awards granted on June 14, 2007, June 28,
2007 and July 13, 2007 is $12.89 per share, $12.62 per share and $11.94
per share, respectively.
(6)
The amounts shown in the table represent
the grant date fair value of the awards granted to the Named Executive
Officers. Based on the closing sales price of a share of Common Stock on April 22,
2008 ($7.47), the intrinsic value of the stock options granted to each of the
Named Executive Officers in 2007 would be zero because the
13
exercise price of each option was higher than
such stock price and the value of the restricted stock unit awards granted to
each of the Named Executive Officers in 2007 would be as follows: Mr. Steenland
($5,347,183), Mr. Cohen ($2,605,910), Mr. Davis ($1,844,694), Mr. Griffin
($2,247,469), and Mr. Roberts ($2,452,005).
(7)
In November 2007, the Company granted
an award to Mr. Cohen pursuant to the E-Commerce Plan relating to equity
investments by Northwest in a number of e-commerce or internet-based
businesses. Each Point represents, when vested, the right to receive a payment
equal to 0.1% of the market value attributable to the group of investments for
which the Points were awarded. The Points subject to the award vested on April 1,
2008. The amount shown represents the potential aggregate payout amount
attributable to the disposition of Northwests investment in Orbitz, one of the
e-commerce businesses covered by the award. In November 2004, Northwest
sold its shares of common stock of Orbitz to an indirect wholly owned
subsidiary of Cendant Corporation in connection with a tender offer to purchase
all of the outstanding shares of class A and class B common stock of Orbitz.
Management
Compensation Agreements
Northwest has entered into management compensation
agreements with each of the Named Executive Officers. The agreements have no
set terms and the executives employment under his agreement is terminable by
either party for any reason upon 30 days written notice. The following
description of these agreements does not include the modifications that were
adopted in April 2008 in connection with the Companys execution of the
Merger Agreement with Delta. These modifications are described in the Compensation
Discussion and Analysis section under the caption New Plans and Arrangements
Adopted in Connection with Potential Merger.
The agreement with Mr. Steenland, which was
entered into on September 14, 2005, provides that Mr. Steenland will
receive a base salary and will participate in Northwests compensation and
benefit plans. He is also entitled to lifetime positive space travel benefits
on Northwests flights for the personal use of Mr. Steenland, his spouse,
dependent children and other individuals designated by Mr. Steenland,
specified life insurance benefits, coverage under Northwests medical and
dental plans for the remainder of his and his spouses lifetimes, and
reimbursement for medical expenses not covered under Northwests medical plans.
In addition, as stated above, Northwest has agreed to provide Mr. Steenland
under the SERP up to six additional years of service credit over the six year
period commencing April 1, 2006, so long as he remains employed by
Northwest during such period or if his employment is terminated in specified
circumstances.
On April 14, 2008, Northwest entered into new
management compensation agreements with Messrs. Cohen, Davis and Roberts. In general, the prior management compensation
agreements entered into with these executives were updated to conform them to
similar agreements entered into with other senior officers and, in the case of
Messrs. Davis and Roberts, to reflect their promotions to executive vice
president positions. In the case of Messrs. Cohen and Davis, their agreements
were also updated to delete certain provisions that relate to benefits each
executive received when he joined Northwest and therefore are no longer
applicable.
The agreements with Messrs. Cohen, Davis, Griffin and Roberts
entitle each executive to receive a base salary and to participate in Northwests
compensation and benefit plans. Each of these executives is entitled, for the
remainder of their lifetimes, to positive space travel benefits on Northwests
flights and coverage under Northwests medical and dental plans following
termination of employment, subject, in the case of Messrs. Cohen and
Davis, to the executive remaining employed by Northwest through a specified
date or if the executives employment is terminated prior to such date without
cause or for good reason. In addition, in connection with his joining Northwest
in May 2005, Northwest agreed to pay Mr. Cohen annual retention
payments of $100,000 each on May 1 of each of five years beginning in 2006
so long as he continues to be employed by Northwest on those dates.
Under the Management Compensation Agreements entered into with each of
the Named Executive Officers, Northwest has agreed to provide each executive
with specified severance payments and benefits in the event the executives
employment is terminated under various circumstances. A description of the
potential payments and benefits that each of the Named Executive Officers would
be entitled to receive in these circumstances is included below under the
caption Potential Payments upon Termination or Change in Control.
Outstanding Equity Awards at 2007 Fiscal
Year-End
The following table
summarizes the unexercised option awards and unvested stock awards to our Named
Executive Officers that were outstanding as of December 31, 2007.
14
|
|
Option
Awards(1)
|
|
Stock
Awards(2)
|
|
Name
|
|
Number
of
Securities
Underlying
Unexercised
Options
(#)
Exercisable
|
|
Number
of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable
(1)
|
|
Equity
Incentive
Plan
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
(#)
|
|
Option
Exercise
Price
($)
|
|
Option
Expiration
Date
|
|
Number
of
Shares or
Units of
Stock That
Have Not
Vested
(#)
|
|
Market
Value of
Shares or
Units of
Stock That
Have Not
Vested
($)
|
|
Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares,
Units or
Other Rights
That Have
Not Vested
(#)
|
|
Equity
Incentive
Plan Awards:
Market or Payout
Value of
Unearned Shares,
Units or Other
Rights That Have
Not Vested
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Douglas M. Steenland
|
|
35,346
|
|
123,725
|
|
|
|
22.68
|
|
6/13/17
|
|
556,765
|
|
8,078,660
|
|
|
|
|
|
|
|
35,346
|
|
123,725
|
|
|
|
22.26
|
|
6/27/17
|
|
|
|
|
|
|
|
|
|
|
|
35,346
|
|
123,726
|
|
|
|
21.07
|
|
7/12/17
|
|
|
|
|
|
|
|
|
|
Neal S. Cohen
|
|
17,226
|
|
60,296
|
|
|
|
22.68
|
|
6/13/17
|
|
271,336
|
|
3,937,085
|
|
|
|
|
|
|
|
17,226
|
|
60,296
|
|
|
|
22.26
|
|
6/27/17
|
|
|
|
|
|
|
|
|
|
|
|
17,226
|
|
60,297
|
|
|
|
21.07
|
|
7/12/17
|
|
|
|
|
|
|
|
|
|
David M. Davis
|
|
12,194
|
|
42,683
|
|
|
|
22.68
|
|
6/13/17
|
|
192,075
|
|
2,787,008
|
|
|
|
|
|
|
|
12,194
|
|
42,683
|
|
|
|
22.26
|
|
6/27/17
|
|
|
|
|
|
|
|
|
|
|
|
12,194
|
|
42,683
|
|
|
|
21.07
|
|
7/12/17
|
|
|
|
|
|
|
|
|
|
J. Timothy Griffin
|
|
14,856
|
|
52,003
|
|
|
|
22.68
|
|
6/13/17
|
|
234,014
|
|
3,395,543
|
|
|
|
|
|
|
|
14,856
|
|
52,003
|
|
|
|
22.26
|
|
6/27/17
|
|
|
|
|
|
|
|
|
|
|
|
14,856
|
|
52,003
|
|
|
|
21.07
|
|
7/12/17
|
|
|
|
|
|
|
|
|
|
Andrew C. Roberts
|
|
16,208
|
|
56,736
|
|
|
|
22.68
|
|
6/13/17
|
|
255,311
|
|
3,704,563
|
|
|
|
|
|
|
|
16,208
|
|
56,736
|
|
|
|
22.26
|
|
6/27/17
|
|
|
|
|
|
|
|
|
|
|
|
16,208
|
|
56,735
|
|
|
|
21.07
|
|
7/12/17
|
|
|
|
|
|
|
|
|
|
(1)
The stock options become exercisable in
nine equal installments commencing on the grant date of each option (June 14,
2007, June 28, 2007 and July 13, 2007, respectively) and on each six
month anniversary thereof.
(2)
The restricted stock unit awards vest in
nine equal installments commencing on the grant date of the awards (May 31,
2007) and on each six month anniversary thereof.
Option Exercises and Stock Vested
The following table
sets forth information regarding the value realized by the Named Executive
Officers in connection with the exercise of stock options and the vesting of
restricted stock units during 2007.
|
|
Option Awards
|
|
Stock Awards
|
|
Name
|
|
Number of
Shares Acquired
on Exercise (#)
|
|
Value Realized on
Exercise ($)
|
|
Number of
Shares Acquired
on Vesting (#)(1)
|
|
Value Realized on
Vesting ($)(1)
|
|
|
|
|
|
|
|
|
|
|
|
Douglas M. Steenland
|
|
|
|
|
|
159,056
|
|
3,445,948
|
(2)
|
Neal S. Cohen
|
|
|
|
|
|
77,514
|
|
1,679,341
|
|
David M. Davis
|
|
|
|
|
|
54,872
|
|
1,188,802
|
|
J. Timothy Griffin
|
|
|
|
|
|
66,852
|
|
1,448,349
|
|
Andrew C. Roberts
|
|
|
|
|
|
72,936
|
|
1,580,158
|
|
(1)
These columns show the number and value of
restricted stock units that vested on May 31, 2007 and November 30,
2007 at a value of $25.15 and $18.18 per share, respectively, which represent
the closing sale price of a share of Common Stock on each vesting date.
(2) The
amount for Mr. Steenland does not represent any cash payments to Mr. Steenland.
Mr. Steenland has elected to hold the shares of Common Stock issued to him
upon the vesting of his restricted stock award. As of April 22, 2008,
these shares had a value of $1,188,148 based on the closing sales price of a
share of Common Stock on such date ($7.47).
2007 Pension Benefits
The following table shows the present value of accumulated benefits at December 31,
2007 for the Named Executive Officers under the Salaried Pension Plan, the
Excess Pension Plan and the SERP based on the assumptions described in note (2) below.
These retirement plans are described in the Compensation Discussion and
Analysis section under Northwests Executive Compensation Program Retirement
Plans. All benefits under the Excess Pension Plan and the SERP are unfunded
and are payable by Northwest from its general assets.
15
Name
|
|
Plan Name
|
|
Number of Years
Credited Service
(#)
(1)
|
|
Present Value of
Accumulated Benefit
($)
(2)
|
|
Payments During
Last Fiscal Year
($)
|
|
Douglas M. Steenland
|
|
Pension Plan for Salaried Employees
|
|
14.1667
|
|
487,000
|
|
|
|
|
|
Excess Pension Plan for Salaried Employees
|
|
14.1667
|
|
1,266,000
|
|
|
|
|
|
Supplemental Executive Retirement Plan
|
|
30.9167
|
|
2,736,000
|
|
|
|
Neal S. Cohen
|
|
Pension Plan for Salaried Employees
|
|
9.25
|
|
140,000
|
|
|
|
|
|
Excess Pension Plan for Salaried Employees
|
|
9.25
|
|
115,000
|
|
|
|
|
|
Supplemental Executive Retirement Plan
|
|
14.5833
|
|
487,000
|
|
|
|
David M. Davis
|
|
Pension Plan for Salaried Employees
|
|
5.2500
|
|
28,000
|
|
|
|
|
|
Excess Pension Plan for Salaried Employees
|
|
|
|
|
|
|
|
|
|
Supplemental Executive Retirement Plan
|
|
|
|
|
|
|
|
J. Timothy Griffin
|
|
Pension Plan for Salaried Employees
|
|
12.2500
|
|
427,000
|
|
|
|
|
|
Excess Pension Plan for Salaried Employees
|
|
12.2500
|
|
822,000
|
|
|
|
|
|
Supplemental Executive Retirement Plan
|
|
22.2500
|
|
1,025,000
|
|
|
|
Andrew C. Roberts
|
|
Pension Plan for Salaried Employees
|
|
8.0000
|
|
160,000
|
|
|
|
|
|
Excess Pension Plan for Salaried Employees
|
|
8.0000
|
|
172,000
|
|
|
|
|
|
Supplemental Executive Retirement Plan
|
|
18.0000
|
|
502,000
|
|
|
|
(1)
For
salaried employees hired by Northwest on or before January 1, 2001 and for
rehired employees who were previously employed by Northwest on or before January 1,
2001, which includes all of the Named Executive Officers, the accumulated
benefits under the Salaried Pension Plan are the greater of the benefits
calculated under the final average earnings formula and those calculated under
the cash balance formula. An employee may retire at the normal retirement age
of 65 regardless of years of service with Northwest, or may retire as early as
age 55 with 10 years of service.
The years of service credited
under the Salaried Pension Plan and the Excess Pension Plan for each of the
Named Executive Officers shown in the table above represent actual service with
Northwest through August 31, 2005, the date on which future benefit
accruals under the Salaried Pension Plan and the Excess Pension Plan were
frozen. As of December 31, 2007, each of the Named Executive Officers who
participate in the SERP was credited under the SERP with continuing service
plus the additional number of years of service shown in the table below. The
present value of the benefit attributable to the additional years of service
granted to each Named Executive Officer in the SERP is also shown in the table
below.
Name
|
|
Number of
Additional Credited Years of
Service
(#)
|
|
Present Value of
Accumulated Benefit
($)
|
|
Douglas M. Steenland
|
|
16.75
|
|
2,502,000
|
|
Neal S. Cohen
|
|
5.33
|
|
487,000
|
|
J. Timothy Griffin
|
|
10
|
|
870,000
|
|
Andrew C. Roberts
|
|
10
|
|
448,000
|
|
(2)
As discussed in the Compensation Discussion
and Analysis section under Northwests Executive Compensation Retirement
Benefits Frozen Defined Benefit Pension Plans, effective August 31,
2005, Northwest amended the Salaried Pension Plan and the Excess Pension Plan
to freeze future benefit accruals under those plans and amended the Retirement
Savings Plan to provide for a Company contribution to participants accounts
for service on and after September 1, 2005. Contributions to the
Retirement Savings Plan for each of the Named Executive Officers in 2007 are
included in the All Other Compensation column of the Summary Compensation
Table.
An
actuarial present value of the benefits is calculated by estimating expected
future payments starting at an assumed retirement age, weighting the estimated
payments by the estimated probability of surviving to each post-retirement age,
and discounting the weighted payments at an assumed discount rate to reflect
the time value of money. The actuarial present value represents an estimate of
the amount which, if invested as of December 31, 2007 at the assumed
discount rate, would be sufficient on an average basis to provide estimated
future payments based on the current accumulated benefit. Estimated future
payments are assumed to be in the form of a single lump-sum payment at
retirement determined using interest rate and mortality table assumptions
applicable under current Internal Revenue Service regulations for qualified
pension plans. The assumed retirement age for each executive is the earliest
age at which the executive could retire without any benefit reduction due to
age. Actual benefit present values will vary from these estimates depending on
many factors, including an executives actual retirement age, final service,
future compensation levels, interest rate movements and regulatory changes. The
assumptions on which the present values of accumulated benefits shown in the
2007 Pension Benefits Table above are based are those used in determining our
annual pension benefit obligation in the Companys consolidated financial
statements and are summarized in the table below. These assumptions were also
used to determine the change in pension value included in the Summary
Compensation Table.
Pension Plan Assumptions
Assumptions
as of
|
|
12/31/07
|
|
12/31/06
|
|
Discount Rate:
|
|
|
|
|
|
- Salaried Pension Plan
|
|
6.21
|
%
|
5.93
|
%
|
- Excess Pension Plan
|
|
6.15
|
%
|
5.93
|
%
|
- SERP
|
|
5.80
|
%
|
5.93
|
%
|
Cash balance
interest crediting rate
|
|
5
|
%
|
6
|
%
|
Basis for
conversion of final average earnings annuities to lump sum amounts
|
|
5%, PPA Mortality
|
|
6%, 1994 GAR
Unisex
|
|
Assumed
Retirement Date:
|
|
|
|
|
|
- Salaried Pension Plan
|
|
Age 65 or age 62,
whichever produces highest
present value
|
|
- Excess Pension Plan
|
|
Age 65 or age 62,
whichever produces highest
present value
|
|
- SERP
|
|
Age 65
|
|
16
Potential
Payments upon Termination or Change in Control
We have entered into
Management Compensation Agreements with each of the Named Executive Officers,
the terms of which are described above under the caption Management Compensation Agreements.
Under the terms of these agreements, Northwest has agreed to provide each of
the Named Executive Officers with specified payments and benefits in connection
with particular events involving a termination of the executives employment
with Northwest or a change in control. The terms cause and good reason as
used in the tables below were defined in the Management Compensation Agreements
with each of the Named Executive Officers. Generally, cause meant (1) an
act or acts of personal dishonesty by the executive intended to result in
substantial personal enrichment of the executive at the expense of the Company,
(2) an act or acts of personal dishonesty by the executive intended to
cause substantial injury to the Company, (3) material breach (other than
as a result of a disability) by the executive of the executives obligations
under the executives Management Compensation Agreement, which action was (A) undertaken
without a reasonable belief that the action was in the best interest 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, or (4) the
conviction of the executive of a felony. Generally, good reason meant (1) a
material reduction in the executives compensation or other benefits, (2) any
change in the executives title or any material change in the executives job
responsibilities, (3) without the executives prior consent, the
relocation of the Companys principal executive offices to a location outside
the Minneapolis-St. Paul metropolitan area, or (4) a failure by the
Company to comply with any provision of the executives Management Compensation
Agreement which has not been cured within ten days after the Company knows or
has notice of such noncompliance, provided that in order for the executives
termination of employment to be considered for good reason, the termination
must occur within one year after the event giving rise to the good reason. The
definitions for these terms were subsequently modified in April 2008 in
connection with the Companys execution of the Merger Agreement with
Delta. These modifications are described
in the Compensation Discussion and Analysis section under the caption New
Plans and Arrangements Adopted in Connection with Potential Merger.
Douglas
M. Steenland
.
Under the Management Compensation Agreement entered into with Mr. Steenland,
in the event of a termination of his employment by Northwest other than for cause,
by Mr. Steenland for good reason or due to death or disability, Mr. Steenland
will receive a severance payment equal to three times his annual base salary
and target incentive payment under the Annual Cash Incentive Plan and a
pro-rated portion of his target incentive payments under the Annual Cash
Incentive Plan and the LTIP for the periods in which his employment terminates,
specified supplemental pension benefits and reimbursement of relocation
expenses. Mr. Steenland also will continue to receive coverage under
Northwests life insurance and disability plans for a specified period of time.
In addition, if Mr. Steenlands employment is terminated by Northwest for
any reason other than cause within one year after a change in control or if Mr. Steenland
resigns at any time during the six months commencing on the first anniversary
of the change in control, Mr. Steenland will be entitled to all payments
and benefits otherwise due for termination. Under the terms of outstanding
incentive awards under the Long Term Cash Incentive Plan and the Stock Plan,
all or a portion of the outstanding award will vest upon specified events
involving a termination of Mr. Steenlands employment. In addition, if the
payments Mr. Steenland were to receive in the event of a change in control
are subject to the excise tax imposed by Section 4999 of the Internal
Revenue Code, then Mr. Steenland will be entitled to a full tax gross-up
payment. In the event Mr. Steenland dies while employed by Northwest,
Northwest has agreed to pay his surviving spouse an annual death benefit equal
to 50 percent of Mr. Steenlands base salary for ten years or, if earlier,
until Mr. Steenland would have attained age 65.
The following table shows
the potential payments and benefits that Mr. Steenland would have been
entitled to receive under then-existing plans and arrangements in the event his
employment with Northwest had terminated on December 31, 2007 in
connection with or by reason of the events listed in the table, given his
compensation and service levels as of December 31, 2007. These benefits
are in addition to benefits available generally to salaried employees of
Northwest and, with respect to a termination of employment other than a
voluntary termination or a termination by the Company for cause, are in
addition to the incentive plan payments for periods ending on December 31,
2007 that are included in the Non-Equity Incentive Plan Compensation column of
the Summary Compensation Table. The table does not include potential payments
and benefits under the plans and arrangements that were adopted in April 2008
in connection with the Companys execution of the Merger Agreement with Delta,
which are described in the Compensation Discussion and Analysis section under
the caption New Plans and Arrangements Adopted in Connection with Potential
Merger. As discussed above in the Compensation Discussion and Analysis section
under the caption New Plans and Arrangements Adopted in Connection with
Potential Merger, however, in the event the Merger is consummated in 2008 and
Mr. Steenlands employment with Northwest is terminated on January 1, 2009, the
total estimated payments and benefits that Mr. Steenland would be entitled to
receive, including the potential payments and benefits under the new
arrangements, would be $18,309,865, which includes $6,212,347 of estimated
pension benefits and the value of outstanding restricted stock units based on
the closing sale price of a share of Common Stock on April 22, 2008 ($7.47).
17
Type of Payment or Benefit
|
|
Voluntary
Termination or
Termination For
Cause
($)
|
|
Involuntary
Termination
($)
|
|
Death
($)
|
|
Disability
($)
|
|
Voluntary
Termination
During Window
after Change in
Control or
Bankruptcy
Emergence Date
($) (1)
|
|
Cash Severance Payment
|
|
|
|
3,270,378
|
|
3,270,378
|
|
3,270,378
|
|
3,270,378
|
|
Long Term Cash
Incentive Compensation (2)
|
|
|
|
408,797
|
|
408,797
|
|
408,797
|
|
817,595
|
|
Restricted Stock Units (3)
|
|
|
|
4,039,330
|
|
192,364
|
|
192,364
|
|
8,078,660
|
|
Stock Options (4)
|
|
|
|
|
|
|
|
|
|
|
|
Restricted Retention Units (5)
|
|
|
|
|
|
|
|
|
|
|
|
Pension Benefits (6)
|
|
4,494,000
|
|
4,494,000
|
|
4,494,000
|
|
4,494,000
|
|
4,494,000
|
|
Pension Enhancement (7)
|
|
|
|
1,495,000
|
|
1,495,000
|
|
1,495,000
|
|
1,495,000
|
|
Pre-Retirement
Spousal Death Benefit
|
|
|
|
|
|
272,532
|
|
|
|
|
|
Medical and
Dental Coverage Continuation (8)
|
|
340,000
|
|
340,000
|
|
167,000
|
|
340,000
|
|
340,000
|
|
Life Insurance Premiums
|
|
40,000
|
|
40,000
|
|
|
|
40,000
|
|
|
|
Group Life
Insurance and Group Disability Coverage Continuation (9)
|
|
|
|
7,224
|
|
|
|
7,224
|
|
7,224
|
|
Airline Travel
Benefit Continuation (10)
|
|
398,947
|
|
398,947
|
|
|
|
398,947
|
|
398,947
|
|
Excise Tax Gross-Up Payment(11)
|
|
|
|
|
|
|
|
|
|
3,138,608
|
|
Total
|
|
5,272,947
|
|
14,493,676
|
|
10,300,071
|
|
10,646,710
|
|
22,080,412
|
|
(1)
As discussed above in the Compensation Discussion and Analysis section
under the caption New Plans and Arrangements Adopted in Connection with
Potential Merger, in the event the Merger is consummated in 2008 and Mr. Steenlands
employment with Northwest is terminated on January 1, 2009, the total estimated payments and benefits that
Mr. Steenland would be entitled to receive would be $18,309,865, which
includes $6,212,347 of estimated pension benefits and the value of outstanding restricted
stock units based on the closing sale price of a share of Common Stock on April
22, 2008 ($7.47).
(2)
These amounts represent the payout of outstanding LTIP awards for the
two year performance periods ending December 31, 2008 and December 31,
2009. A prorated payout would be paid in the event the executive died or became
disabled and 100% payout would be paid if the executives employment were
terminated without cause or for good reason within two years after a change of
control.
(3)
These awards would become vested in connection with those events for
which an amount is shown in the table. The amount shown is the value of the
outstanding awards based on the closing sale price of a share of Common Stock
on December 31, 2007 ($14.51). As of April 22, 2008, the value of the
outstanding restricted stock units held by Mr. Steenland was $4,159,035
based on the closing sale price of a share of Common Stock on such date
($7.47). 50% of the outstanding restricted stock units would vest upon a
termination of employment without cause or for good reason; a prorated portion
of the restricted stock units that would otherwise vest on the next vesting
date would vest upon death or disability; and 100% of the outstanding
restricted stock units would vest if the executives employment were terminated
without cause or for good reason within six months after a change of control.
(4)
The intrinsic value of the unexercisable options is $0 because the
exercise price of each option is higher than the closing sale price of a share
of Common Stock on December 31, 2007.
(5)
As discussed above in the Compensation Discussion and Analysis section
under the caption New Plans and Arrangements Adopted in Connection with
Potential Merger, pursuant to the Retention Agreement entered into between the
Company and Mr. Steenland in April 2008, Mr. Steenland was
granted 375,000 restricted
retention units, each of which represents the right to receive, subject to the
terms and conditions set forth in the Retention Agreement, an amount in cash equal to the fair market value of a
share of common stock of the Company (not to exceed $22.00 per share for this
purpose) multiplied by the number of vested units pursuant to the terms of the
Retention Agreement.
(6)
This amount represents the payout of accumulated benefits under the
Salaried Pension Plan, the Excess Pension Plan and the SERP.
(7)
This amount represents the present value of additional years of cash
balance accruals under the SERP.
(8)
This amount represents the present value of continued coverage under
Northwests medical and dental plans to which Mr. Steenland, his spouse
and dependent children would be entitled for the life of Mr. Steenland and
his spouse.
(9)
This amount represents the present value of continued coverage under
Northwests group life insurance and group disability insurance for three years
following termination of employment.
(10)
This amount represents the present value of confirmed space airline pass
travel benefits for the personal use of Mr. Steenland, his spouse,
dependent children and other individuals designated by Mr. Steenland
during the remainder of his lifetime, including a tax gross-up for the imputed
income.
(11)
The estimated tax gross up is based on a 20% excise tax, grossed up for
taxes, on the amount of severance and other benefits in excess of the executives
average five year W-2 earnings times 2.99.
Other
Named Executive Officers.
Under the Management Compensation Agreements entered into with each of
the Named Executive Officers other than Mr. Steenland, in the event of a
termination of the executives employment by Northwest other than for cause
or by the executive for good reason, the executive will receive a severance
payment equal to two times the executives annual base salary and target
incentive payment under the Annual Cash Incentive Plan and a pro-rated portion
of the executives target annual incentive payment under the Annual Cash
Incentive Plan for the year in which the executives employment terminates. In
addition,
18
under the terms of
outstanding awards under the Long Term Cash Incentive Plan, the E-Commerce Plan
and the Stock Plan, the vesting of these awards will accelerate in whole or in
part upon certain events involving a termination of the executives employment.
The following tables show
the potential payments and benefits that each of the Named Executive Officers
other than Mr. Steenland would have been entitled to receive under
then-existing plans and arrangements in the event the executives employment
with Northwest had terminated on December 31, 2007 in connection with or
by reason of the events listed in the table, given the executives compensation
and service levels as of December 31, 2007. These benefits are in addition
to benefits available generally to salaried employees of Northwest and, with
respect to a termination of employment other than a voluntary termination or a
termination by the Company for cause, are in addition to the incentive plan
payments for periods ending on December 31, 2007 that are included in the
Non-Equity Incentive Plan Compensation column of the Summary Compensation
Table. The table does not include potential payments and benefits under the
plans and arrangements adopted in April 2008 in connection with the
Companys execution of the Merger Agreement with Delta, which are described in
the Compensation Discussion and Analysis section under the caption New Plans
and Arrangements Adopted in Connection with Potential Merger, and do not
reflect the terms of the new management compensation agreements entered into
with Messrs. Cohen, Davis and Roberts in April 2008, which are described above
under the caption Management Compensation Agreements.
Neal S.
Cohen:
Type of Payment or Benefit
|
|
Voluntary
Termination or
Termination For
Cause
($)
|
|
Involuntary
Termination
($)
|
|
Death
($)
|
|
Disability
($)
|
|
Involuntary
Termination
after Change in
Control
($)
|
|
Cash Severance
Payment
|
|
|
|
1,356,602
|
|
|
|
|
|
1,356,602
|
|
Long Term Cash
Incentive Compensation (1)
|
|
|
|
|
|
148,378
|
|
148,378
|
|
296,757
|
|
E-Commerce
Incentive Compensation (2)
|
|
|
|
|
|
503,690
|
|
503,690
|
|
503,690
|
|
Restricted Stock
Units (3)
|
|
|
|
1,968,543
|
|
93,746
|
|
93,746
|
|
3,937,085
|
|
Stock Options (4)
|
|
|
|
|
|
|
|
|
|
|
|
Pension Benefits
(5)
|
|
795,000
|
|
795,000
|
|
795,000
|
|
795,000
|
|
795,000
|
|
Medical and
Dental Coverage Continuation (6)
|
|
|
|
|
|
|
|
|
|
243,000
|
|
Airline Travel
Benefit Continuation (7)
|
|
20,883
|
|
20,883
|
|
|
|
20,883
|
|
20,883
|
|
Total
|
|
815,883
|
|
4,141,028
|
|
1,540,814
|
|
1,561,697
|
|
7,153,017
|
|
(1)
This amount represents the payout of the outstanding LTIP award for the
two year performance period ending December 31, 2008. A prorated payout
would be paid in the event the executive died or became disabled and 100%
payout would be paid if the executives employment were terminated without
cause or for good reason within two years after a change of control.
(2)
This amount represents the payout of the executives outstanding awards
granted under the E-Commerce Incentive Compensation Program. The outstanding
awards would have vested in full if the executive would have died or become
disabled or if the executives employment were terminated in connection with a
change of control prior to the vesting of such awards.
(3)
These awards would become vested and the amount shown is the value based
on the closing sale price of a share of Common Stock on December 31, 2007
($14.51). 50% of the outstanding restricted stock units would vest upon a
termination of employment without cause or for good reason; a prorated portion
of the restricted stock units that would otherwise vest on the next vesting
date would vest upon death or disability; and 100% of the outstanding
restricted stock units would vest if the executives employment were terminated
without cause or for good reason within six months after a change of control.
(4)
The intrinsic value of the unexercisable options as of December 31,
2007 was $0 because the exercise price of each option was higher than the stock
price on that date.
(5)
This amount represents the payout of accumulated benefits under the
Salaried Pension Plan, the Excess Pension Plan and the SERP.
(6)
This amount represents the present value of continued coverage under
Northwests medical and dental plans. If Mr. Cohen remains an active
full-time employee of Northwest through April 1, 2009 or a change in
control of Northwest occurs prior to April 1, 2009 and Mr. Cohens
employment with Northwest is terminated within six months after the change in
control, Mr. Cohen, his spouse and dependent children will receive
continued coverage under Northwests medical and dental plans generally
applicable to salaried employees of Northwest during the remainder of Mr. Cohens
lifetime.
(7)
This amount represents the present value of confirmed space airline pass
travel benefits for the personal use of the executive, his spouse and dependent
children during the remainder of executives lifetime, to which Mr. Cohen
will be entitled if he remains an active full-time employee of Northwest
through April 1, 2009 or a change in control of Northwest occurs prior to April 1,
2009 and his employment with Northwest is terminated within six months after
the change in control.
David
M. Davis:
Type of Payment or Benefit
|
|
Voluntary
Termination or
Termination For
Cause
($)
|
|
Involuntary
Termination
($)
|
|
Death
($)
|
|
Disability
($)
|
|
Involuntary Termination after Change in Control
($)
|
|
Cash Severance
Payment
|
|
|
|
1,356,602
|
|
|
|
|
|
1,356,602
|
|
Long Term Cash
Incentive Compensation (1)
|
|
|
|
|
|
148,378
|
|
148,378
|
|
296,757
|
|
Restricted Stock
Units (2)
|
|
|
|
1,393,504
|
|
66,363
|
|
66,363
|
|
2,787,008
|
|
Stock Options (3)
|
|
|
|
|
|
|
|
|
|
|
|
Pension Benefits
(4)
|
|
28,000
|
|
28,000
|
|
28,000
|
|
28,000
|
|
28,000
|
|
Medical and
Dental Coverage Continuation (5)
|
|
|
|
32,000
|
|
|
|
|
|
32,000
|
|
Group Life
Insurance Coverage Continuation (6)
|
|
|
|
4,014
|
|
|
|
|
|
4,014
|
|
Total
|
|
28,000
|
|
2,814,120
|
|
242,741
|
|
242,741
|
|
4,504,381
|
|
19
(1)
This amount represents the payout of the outstanding LTIP award for the
two year performance period ending December 31, 2008. A prorated payout
would be paid in the event the executive died or became disabled and 100%
payout would be paid if the executives employment were terminated without
cause or for good reason within two years after a change of control.
(2)
These awards would become vested and the amount shown is the value based
on the closing sale price of a share of Common Stock on December 31, 2007
($14.51). 50% of the outstanding restricted stock units would vest upon a
termination of employment without cause or for good reason; a prorated portion
of the restricted stock units that would otherwise vest on the next vesting
date would vest upon death or disability; and 100% of the outstanding
restricted stock units would vest if the executives employment were terminated
without cause or for good reason within six months after a change of control.
(3)
The intrinsic value of the unexercisable options as of December 31,
2007 was $0 because the exercise price of each option was higher than the stock
price on that date.
(4)
This amount represents the payout of accumulated benefits under the
Salaried Pension Plan, the Excess Pension Plan and the SERP.
(5)
This amount represents the present value of continued coverage under
Northwests medical and dental plans for a period of four years following a
termination of the executives employment without cause or for good reason.
(6)
This amount represents the present value of continued coverage under
Northwests group life insurance plan for four years following termination of
employment.
J.
Timothy Griffin:
Type of Payment or Benefit
|
|
Voluntary
Termination or
Termination For
Cause
($)
|
|
Involuntary
Termination
($)
|
|
Death
($)
|
|
Disability
($)
|
|
Involuntary
Termination
after Change in
Control
($)
|
|
Cash Severance Payment
|
|
|
|
1,356,602
|
|
|
|
|
|
1,356,602
|
|
Long Term Cash
Incentive Compensation (1)
|
|
|
|
|
|
148,378
|
|
148,378
|
|
296,757
|
|
Restricted Stock Units (2)
|
|
|
|
1,697,772
|
|
80,851
|
|
80,851
|
|
3,395,543
|
|
Stock Options (3)
|
|
|
|
|
|
|
|
|
|
|
|
Pension Benefits (4)
|
|
2,389,000
|
|
2,389,000
|
|
2,389,000
|
|
2,389,000
|
|
2,389,000
|
|
Medical and
Dental Coverage Continuation (5)
|
|
206,000
|
|
206,000
|
|
|
|
206,000
|
|
206,000
|
|
Group Life Insurance
Coverage Continuation (6)
|
|
|
|
4,014
|
|
|
|
|
|
4,014
|
|
Airline Travel
Benefit Continuation (7)
|
|
52,883
|
|
52,883
|
|
|
|
52,883
|
|
52,883
|
|
Total
|
|
2,647,883
|
|
5,706,271
|
|
2,618,229
|
|
2,877,112
|
|
7,700,799
|
|
(1)
This amount represents the payout of the outstanding LTIP award for the
two year performance period ending December 31, 2008. A prorated payout
would be paid in the event the executive died or became disabled and 100%
payout would be paid if the executives employment were terminated without
cause or for good reason within two years after a change of control.
(2)
These awards would become vested and the amount shown is the value based
on the closing sale price of a share of Common Stock on December 31, 2007
($14.51). 50% of the outstanding restricted stock units would vest upon a
termination of employment without cause or for good reason; a prorated portion
of the restricted stock units that would otherwise vest on the next vesting
date would vest upon death or disability; and 100% of the outstanding restricted
stock units would vest if the executives employment were terminated without
cause or for good reason within six months after a change of control.
(3)
The intrinsic value of the unexercisable options as of December 31,
2007 was $0 because the exercise price of each option was higher than the stock
price on that date.
(4)
This amount represents the payout of accumulated benefits under the
Salaried Pension Plan, the Excess Pension Plan and the SERP.
(5)
This amount represents the present value of continued coverage under
Northwests medical and dental plans, to which Mr. Griffin, his spouse and
dependent children would be entitled during the remainder of Mr. Griffins
lifetime.
(6)
This amount represents the present value of continued coverage under Northwests
group life insurance plan for four years following termination of employment.
(7)
This amount represents the present value of confirmed space airline pass
travel benefits for the personal use of the executive, his spouse and dependent
children during the remainder of executives lifetime following his termination
of employment.
Andrew
C. Roberts:
Type of Payment or Benefit
|
|
Voluntary
Termination or
Termination For
Cause
($)
|
|
Involuntary
Termination
($)
|
|
Death
($)
|
|
Disability
($)
|
|
Involuntary Termination after Change in Control
($)
|
|
Cash Severance
Payment
|
|
|
|
1,356,602
|
|
|
|
|
|
1,356,602
|
|
Long Term Cash
Incentive Compensation (1)
|
|
|
|
|
|
148,378
|
|
148,378
|
|
296,757
|
|
E-Commerce
Incentive Compensation (2)
|
|
|
|
|
|
226,184
|
|
226,184
|
|
226,184
|
|
Restricted Stock
Units (3)
|
|
|
|
1,852,281
|
|
88,209
|
|
88,209
|
|
3,704,563
|
|
Stock Options (4)
|
|
|
|
|
|
|
|
|
|
|
|
Pension Benefits
(5)
|
|
889,000
|
|
889,000
|
|
889,000
|
|
889,000
|
|
889,000
|
|
Medical and
Dental Coverage Continuation (6)
|
|
|
|
35,000
|
|
|
|
|
|
35,000
|
|
Group Life
Insurance Coverage Continuation (7)
|
|
|
|
4,014
|
|
|
|
|
|
4,014
|
|
Airline Travel
Benefit Continuation (8)
|
|
69,649
|
|
69,649
|
|
|
|
69,649
|
|
69,649
|
|
Total
|
|
958,649
|
|
4,206,546
|
|
1,351,771
|
|
1,421,420
|
|
6,581,769
|
|
20
(1)
This amount represents the payout of the outstanding LTIP award for the
two year performance period ending December 31, 2008. A prorated payout
would be paid in the event the executive died or became disabled and 100%
payout would be paid if the executives employment were terminated without
cause or for good reason within two years after a change of control.
(2)
This amount represents the payout of the executives outstanding award
granted under the E-Commerce Incentive Compensation Program. The outstanding
award would have vested in full if the executive would have died or become
disabled or if the executives employment were terminated in connection with a
change of control prior to the vesting of such award.
(3)
These awards would become vested and the amount shown is the value based
on the closing sale price of a share of Common Stock on December 31, 2007
($14.51). 50% of the outstanding restricted stock units would vest upon a
termination of employment without cause or for good reason; a prorated portion
of the restricted stock units that would otherwise vest on the next vesting
date would vest upon death or disability; and 100% of the outstanding
restricted stock units would vest if the executives employment were terminated
without cause or for good reason within six months after a change of control.
(4)
The intrinsic value of the unexercisable options as of December 31,
2007 was $0 because the exercise price of each option was higher than the stock
price on that date.
(5)
This amount represents the payout of accumulated benefits under the
Salaried Pension Plan, the Excess Pension Plan and the SERP.
(6)
This amount represents the present value of continued coverage under
Northwests medical and dental plans for a period of four years following a
termination of the executives employment without cause or for good reason.
(7)
This amount represents the present value of continued coverage under
Northwests group life insurance plan for four years following termination of
employment.
(8)
This amount represents the present value of confirmed space airline pass
travel benefits for the personal use of the executive, his spouse and dependent
children during the remainder of executives lifetime following his termination
of employment.
Assumptions
used for Calculating Other Potential Post-Employment Payments and Benefits
.
The Company used a number of assumptions
for purposes of quantifying some of the potential post-employment payments and
benefits that are estimated in the foregoing tables. The value of health and
welfare benefits that the Named Executive Officers would be entitled to receive
following a termination of employment was determined based on assumptions used
for financial statement reporting purposes under Statement of Financial
Accounting Standards No. 106, Employers Accounting for Postretirement
Benefits other than Pensions. See note
15 to NWA Corp.s consolidated financial statements for the year ended December 31,
2007 for a discussion of these assumptions. The value of life and disability
insurance coverage that would continue for the Named Executive Officers for
specified periods following a termination of employment is based on the current
premiums that the Company pays for such insurance. The value of travel benefits
that would be provided to certain of the Named Executive Officers following a
termination of employment was determined based on the following: (1) the
executive and the executives eligible dependents utilize the travel benefits
for a period of 20 years, (2) the level of usage for each year following
the executives termination of employment is 150% of the actual usage during
2007, (3) the incremental cost to the Company for providing the travel
benefits for each year is the same as the actual incremental cost incurred by
the Company for providing such benefits in 2007, and (4) the present value
of the travel benefits and, in the case of Mr. Steenland, the tax gross-up
for such travel benefits, was determined using a discount rate of 6.31%.
Director
Compensation in 2007
Prior to the Companys
emergence from bankruptcy, non-employee directors of NWA Corp., which included
all directors other than Messrs. Wilson, Steenland and Zoller, were
entitled to receive an annual retainer fee of $25,000 and an attendance fee of
$1,000 for each Board meeting and each Board committee meeting attended. The
chairpersons of the standing Board committees were paid an additional annual
fee of $5,000.
Following the Companys
emergence from bankruptcy, the Board of Directors retained Towers Perrin to assess
the competitiveness of NWA Corp.s director compensation program. Based on
information regarding director compensation at other companies, both within and
outside the airline industry, the Board approved changes to NWA Corp.s
compensation program for non-employee directors, which became effective on May 31,
2007. Under these changes, non-employee directors of NWA Corp., which includes
all directors other than Messrs. Steenland and Zoller, are entitled to
receive (1) an annual Board retainer fee of $50,000, (2) a $5,000
annual fee for service on a committee of the Board, (3) an annual
chairperson fee of $100,000 for the Chairman of the Board, $25,000 for the
chairperson of the Audit Committee and $15,000 for the chairperson of each of
the other Board committees, and (4) a $1,500 fee for attendance at each
Board meeting. In addition, subject to the approval by stockholders of NWA
Corp. of an amendment to the Stock Plan that would allow non-employee directors
to participate in the Stock Plan, the Board approved the grant to each
non-employee director of a restricted stock unit award covering 10,975 shares
of Common Stock and a non-qualified stock option award covering 7,317 shares of
Common Stock (collectively, the Director Stock Awards) under the terms of the
Stock Plan. Subject to stockholder
21
approval of the proposed
amendment to the Stock Plan, the Director Stock Awards will vest in
installments over four years so long as the director continues to serve on the
Board.
In addition to the cash
and equity compensation provided to our non-employee directors described above,
all directors and their spouses and dependent children are eligible for
positive space airline pass travel benefits on Northwest and certain other
airlines and each director will receive lifetime positive space pass travel benefits
on Northwest and certain other airlines after serving as a director of NWA
Corp. for five years. In April 2008 at the time the plans and arrangements
were adopted in connection with the Companys execution of the Merger Agreement
with Delta, the Board of Directors approved a modification to the Companys
policy regarding pass travel benefits for its directors under which each of the
current directors will be entitled to positive space pass travel benefits on
Northwest and any successor to Northwest during his or her lifetime, regardless
of the number of years of service on the Companys Board of Directors. In
addition, during the period in which they serve on the Board, all directors are
entitled to $25,000 per year of airline travel benefits on Northwest that may
be extended to other individuals and are reimbursed by NWA Corp. for income
taxes resulting from use of the directors airline travel benefits on
Northwest. All directors also are reimbursed for ordinary expenses incurred in
connection with their attendance at Board and Board committee meetings. We
indemnify our directors and officers to the fullest extent permitted by law so
that they will be free from undue concern about personal liability in
connection with their service to NWA Corp. This is required under our By-laws,
and we also have entered into agreements with our directors contractually
obligating us to provide this indemnification to them.
In connection with the
execution of the Merger Agreement with Delta, the Board of Directors approved
certain changes to the Companys director compensation program. First, the Board approved an extension to the
post-termination exercise period for outstanding stock options previously
granted to non-employee directors of the Company, which remain subject to
approval of the Companys stockholders, so that, if a director does not
continue as, or is not appointed as, a member of the Board of Directors of the
parent entity of the surviving corporation in any change of control transaction
or is otherwise removed as, or not elected to be a, member of such Board (other
than for cause) during the two year period following a change of control, the
director would have three years to exercise his or her outstanding
options. In all cases, however, the
post-termination exercise period remains subject to the awards original
10-year term. In addition, the Board
approved an amendment to the terms of outstanding stock options and restricted
stock units held by non-employee directors of the Company to provide for the automatic
vesting of all outstanding awards that are unvested or subject to lapse
restrictions upon the occurrence of a change of control. Finally, the Board
approved a change to the Companys pass travel policy to provide, in the event
of a change of control transaction, positive space pass travel privileges on
Northwest, any successor to Northwest and their affiliates to all current Board
members.
2007 Director Compensation Table
The
following table shows the compensation provided to our directors in 2007. Mr. Steenlands
compensation is set forth above in the Summary Compensation Table.
Name
|
|
Fees Earned
or Paid in
Cash
(1)
($)
|
|
Stock
Awards
(2)
($)
|
|
Option
Awards
(2)
($)
|
|
Non-Equity
Incentive Plan
Compensation
($)
|
|
Change in
Pension Value
and
Nonqualified
Deferred
Compensation
Earnings
($)
|
|
All Other
Compensation
(3)
($)
|
|
Total
($)
|
|
Current
Directors:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Roy J. Bostock
|
|
90,548
|
|
|
|
|
|
|
|
|
|
27,908
|
|
118,456
|
|
David A. Brandon
|
|
27,596
|
|
|
|
|
|
|
|
|
|
11,577
|
|
39,173
|
|
Michael J.
Durham
|
|
30,750
|
|
|
|
|
|
|
|
|
|
1,448
|
|
32,198
|
|
John M. Engler
|
|
63,706
|
|
|
|
|
|
|
|
|
|
27,820
|
|
91,526
|
|
Mickey P. Foret
|
|
30,422
|
|
|
|
|
|
|
|
|
|
27,680
|
|
58,102
|
|
Robert L.
Friedman
|
|
77,449
|
|
|
|
|
|
|
|
|
|
28,373
|
|
105,822
|
|
Doris Kearns Goodwin
|
|
63,206
|
|
|
|
|
|
|
|
|
|
25,094
|
|
88,300
|
|
Jeffrey G. Katz
|
|
83,491
|
|
|
|
|
|
|
|
|
|
20,083
|
|
103,574
|
|
James J. Postl
|
|
37,120
|
|
|
|
|
|
|
|
|
|
|
|
37,120
|
|
Rodney E. Slater
|
|
62,230
|
|
|
|
|
|
|
|
|
|
21,098
|
|
83,328
|
|
William S.
Zoller (4)
|
|
|
|
|
|
|
|
|
|
93,000
|
|
299,104
|
|
392,104
|
|
Former
Directors:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ray W.
Benning, Jr.
|
|
40,107
|
|
|
|
|
|
|
|
|
|
17,243
|
|
57,350
|
|
Dennis F.
Hightower
|
|
31,860
|
|
|
|
|
|
|
|
|
|
39,112
|
|
70,972
|
|
George J.
Kourpias
|
|
34,932
|
|
|
|
|
|
|
|
|
|
22,337
|
|
57,269
|
|
Frederic V.
Malek
|
|
24,610
|
|
|
|
|
|
|
|
|
|
21,955
|
|
46,565
|
|
Leo M. van Wijk
|
|
23,610
|
|
|
|
|
|
|
|
|
|
2,517
|
|
26,127
|
|
Gary L. Wilson
(4)
|
|
|
|
|
|
|
|
|
|
3,000
|
|
153,315
|
|
156,315
|
|
22
(1)
Only
non-employee directors of NWA Corp. are entitled to receive Board retainer fees
and meeting fees.
(2)
As stated above, on June 28, 2007,
the Board approved the grant to each non-employee director of a restricted
stock unit award covering 10,975 shares of Common Stock and a non-qualified
stock option award covering 7,317 shares of Common Stock (collectively, the Director
Stock Awards) under the terms of the Stock Plan, subject to the approval by
stockholders of NWA Corp. of an amendment (the Stock Plan Amendment) to the
Stock Plan that would allow non-employee directors to participate in the plan.
Subject to stockholder approval of the Stock Plan Amendment, the Director Stock
Awards will vest in installments over four years so long as the director
continues to serve on the Board. Since the Director Stock Awards are subject to
and conditioned upon stockholder approval of the Stock Plan Amendment, the
Company did not recognize any compensation expense under FAS 123R in 2007 for
these awards.
(3)
See the Director All Other Compensation
Table below for details regarding the amounts disclosed in this column.
(4)
During 2007, Messrs. Wilson and
Zoller were employees of Northwest and therefore did not receive Board retainer
fees or meeting fees. The amounts shown in the Change in Pension Value column
and portions of the All Other Compensation column for Messrs. Wilson and
Zoller represent compensation for services as employees of Northwest.
Director
All Other Compensation Table
The
amounts in the All Other Compensation column of the 2007 Director
Compensation Table consist of the following items:
Name
|
|
Tax
Reimbursement
Payments (1)
($)
|
|
Employee
Compensation
($)
|
|
Incremental
Cost of
Perquisites or
Personal
Benefits (2)
($)
|
|
Bankruptcy
Claim
Proceeds
($)
|
|
Employer
Contributions
to 401(k)
Plan
($)
|
|
Excess
401(k)
Plan Cash
Payments
(3)
($)
|
|
Total All
Other
Compensation
($)
|
|
Current Directors:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Roy J. Bostock
|
|
74
|
|
|
|
27,833
|
|
|
|
|
|
|
|
27,908
|
|
David A. Brandon
|
|
|
|
|
|
11,577
|
|
|
|
|
|
|
|
11,577
|
|
Michael J. Durham
|
|
|
|
|
|
1,448
|
|
|
|
|
|
|
|
1,448
|
|
John M. Engler
|
|
4,532
|
|
|
|
23,288
|
|
|
|
|
|
|
|
27,820
|
|
Mickey P. Foret
|
|
|
|
|
|
27,680
|
|
|
|
|
|
|
|
27,680
|
|
Robert L.
Friedman
|
|
|
|
|
|
28,373
|
|
|
|
|
|
|
|
28,373
|
|
Doris Kearns
Goodwin
|
|
688
|
|
|
|
24,406
|
|
|
|
|
|
|
|
25,094
|
|
Jeffrey G. Katz
|
|
2,036
|
|
|
|
18,047
|
|
|
|
|
|
|
|
20,083
|
|
James J. Postl
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rodney E. Slater
|
|
4,917
|
|
|
|
16,181
|
|
|
|
|
|
|
|
21,098
|
|
William S. Zoller
(4)
|
|
|
|
200,241
|
|
7,382
|
|
82,619
|
|
2,920
|
|
5,942
|
|
299,104
|
|
Former Directors:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ray W.
Benning, Jr.
|
|
433
|
|
|
|
16,810
|
|
|
|
|
|
|
|
17,243
|
|
Dennis F.
Hightower
|
|
1,598
|
|
|
|
37,514
|
|
|
|
|
|
|
|
39,112
|
|
George J.
Kourpias
|
|
1,018
|
|
|
|
21,319
|
|
|
|
|
|
|
|
22,337
|
|
Frederic V. Malek
|
|
180
|
|
|
|
21,775
|
|
|
|
|
|
|
|
21,955
|
|
Leo M. van Wijk
|
|
|
|
|
|
2,517
|
|
|
|
|
|
|
|
2,517
|
|
Gary L. Wilson
(5)
|
|
|
|
4,199
|
|
148,434
|
|
|
|
682
|
|
|
|
153,315
|
|
23
(1) The amounts shown are reimbursement payments
for income taxes resulting from use of the directors airline pass travel
benefits.
(2) The amounts shown represent the incremental
cost to the Company of perquisites provided to the directors in 2007, which
include (A) positive space airline pass travel benefits on Northwest and
certain other airlines for the personal use of the director, his or her
eligible family members and other individuals designated by the director, and (B) the
following benefits received by Messrs. Foret and Wilson pursuant to
agreements entered into with each director in 2007 (see Item 13. Certain
Relationships, Related Transactions and Director Independence): medical
expense reimbursement payments to Messrs. Foret ($5,062) and Wilson
($16,014), coverage under Northwests medical and dental plans for Messrs. Foret
($11,813) and Wilson ($11,357) and their eligible family members, and the cost
of providing dedicated secretarial support and office equipment and supplies
for Mr. Wilson pursuant to his agreement with the Company ($73,164). For a
description of the methodology used to determine the incremental cost to the
Company of positive space airline travel benefits provided to the directors, see
footnote (3) to the All Other Compensation Table that follows the Summary
Compensation Table.
(3) The amounts shown represent non-qualified
retirement benefits earned under Northwests defined contribution plans in
excess of the limitations imposed by the Internal Revenue Code. All employer contribution amounts under
Northwests Retirement Savings Plan that are in excess of the limitations under
the Internal Revenue Code are payable to employees in cash on a semi-monthly
basis. See Northwests Executive Compensation Program Retirement Benefits
Excess 401(k) Cash Payments under the Compensation Discussion and
Analysis section above.
(4) Mr. Zoller is a 747-400 Captain for
Northwest and, as such, is entitled to receive compensation applicable to his
position in accordance with the collective bargaining agreement between
Northwest and ALPA. In addition, in connection with the Companys emergence
from bankruptcy, Mr. Zoller received a cash payment in the amount of
$82,619 representing his allocated portion of the proceeds of an allowed
general unsecured claim awarded to ALPA in respect of reductions in wages and
benefits for pilots of Northwest under the collective bargaining agreement
entered into during the Companys bankruptcy. As an employee of Northwest, Mr. Zoller
was eligible to participate in the health and welfare benefits offered to
employees of Northwest and received an employer contribution to his account
under the Retirement Savings Plan based on the amount of his qualified earnings
during the year.
(5) Mr. Wilson was an employee of Northwest
until his retirement on May 31, 2007. At the time of his retirement, his
annual salary was $8,840. As an employee of Northwest, Mr. Wilson was
eligible to participate in the health and welfare benefits offered to employees
of Northwest and received an employer contribution to his account under the
Retirement Savings Plan based on the amount of his qualified earnings during
the year.
24
Item
12. SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The
following table sets forth the holdings, as of March 31, 2008, of NWA
Corp.s capital stock of each director of NWA Corp., each executive officer
named in the Summary Compensation Table, all directors and executive officers
of the Company as a group, and each person known to the Company to beneficially
own more than five percent of any class of NWA Corp.s voting securities.
Unless otherwise indicated, each named beneficial owner has sole voting and
investment power with respect to the shares listed.
Name of Beneficial Owner
|
|
Class of Security
|
|
Number of
Shares(1)
|
|
Percent of
Class
|
|
Directors/Nominees
for Director:
|
|
|
|
|
|
|
|
Roy J. Bostock
|
|
Common Stock
|
|
2,200
|
|
*
|
|
David A. Brandon
|
|
Common Stock
|
|
|
|
|
|
Michael J.
Durham
|
|
Common Stock
|
|
|
|
|
|
John M. Engler
|
|
Common Stock
|
|
|
|
|
|
Mickey P. Foret
|
|
Common Stock
|
|
|
|
|
|
Robert L.
Friedman
|
|
Common Stock
|
|
|
|
|
|
Doris Kearns
Goodwin
|
|
Common Stock
|
|
|
|
|
|
Jeffrey G. Katz
|
|
Common Stock
|
|
|
|
|
|
James J. Postl
|
|
Common Stock
|
|
|
|
|
|
Rodney E. Slater
|
|
Common Stock
|
|
|
|
|
|
Douglas M.
Steenland
|
|
Common Stock
|
|
151,607
|
|
*
|
|
William S.
Zoller
|
|
Common Stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Named
Executive Officers:
|
|
|
|
|
|
|
|
Neal S. Cohen
|
|
Common Stock
|
|
63,885
|
|
*
|
|
David M. Davis
|
|
Common Stock
|
|
43,197
|
|
*
|
|
J. Timothy
Griffin
|
|
Common Stock
|
|
53,721
|
|
*
|
|
Andrew C.
Roberts
|
|
Common Stock
|
|
59,520
|
|
*
|
|
All directors
and executive officers as a group (16 persons)
|
|
Common Stock
|
|
374,130
|
|
*
|
|
|
|
|
|
|
|
|
|
Other 5%
Holders:
|
|
|
|
|
|
|
|
Wellington
Management Company, LLP(2)
75 State Street
Boston, MA 02109
|
|
Common Stock
|
|
29,080,996
|
|
12.3
|
|
FMR LLC (3)
82 Devonshire Street
Boston, MA 02109
|
|
Common Stock
|
|
24,330,232
|
|
10.3
|
|
Wayzata
Investment Partners LLC (4)
701 East Lake Street, Suite 300
Wayzata, MN 55391
|
|
Common Stock
|
|
15,578,000
|
|
6.6
|
|
Harbert
Management Corporation (5)
One Riverchase Parkway South
Birmingham, Alabama 35244
|
|
Common Stock
|
|
12,572,767
|
|
5.3
|
|
Vanguard Windsor
Fund (6)
100 Vanguard Blvd.
Malvern, PA 19355
|
|
Common Stock
|
|
12,456,100
|
|
5.3
|
|
*
Less than 1%
(1)
The SEC deems a person to have beneficial
ownership of all shares that such person has the right to acquire within
60 days. The figures shown include the following shares subject to stock
options granted under the Stock Plan, which the individual or group has the
right to acquire within 60 days of February 29, 2008:
Steenland106,038 shares; Cohen51,678 shares; Davis36,582 shares;
Griffin44,568 shares; Roberts48,624 shares; and all directors and executive
officers as a group287,490 shares.
(2)
Based on a Schedule 13G filed with
the SEC on behalf of Wellington Management Company, LLP indicating that, at December 31,
2007, the firm, in its capacity as investment advisor, had shared voting power
over 10,872,086 shares of such shares and shared power to dispose of all such
shares.
(3)
Based on a Schedule 13G filed with the SEC
on behalf of FMR LLC indicating that, at February 29, 2008, the firm, in
its capacity as investment advisor, had sole power to vote 880,993 of such
shares and sole power to dispose of all such shares.
(4)
Based on a Schedule 13G filed with the SEC
on behalf of Wayzata Investment Partners LLC indicating that, at December 31,
2007, the firm, in its capacity as an investment advisor, had sole voting power
and sole dispositive power over such shares.
(5)
Based on a Schedule 13G filed with the SEC
on behalf of Harbert Management Corporation (HMC) and affiliated persons
indicating that, at December 31, 2007, 9,744,493 of such shares were held
in the Harbinger Capital Partners Master Fund I, Ltd. (the Master Fund), and
2,828,274 of such shares were held in
25
the
Harbinger Capital Partners Special Situations Fund, L.P. (the Special
Situations Fund). Each fund has shared
voting and shared dispositive power over the shares held in such fund.
(6)
Based on a Schedule 13G filed with the SEC
on behalf of Vanguard Windsor Funds indicating that, at December 31, 2007,
the funds, in their capacity as investment advisors, had sole voting power over
such shares.
Equity Compensation Plan Information
The table below provides
information relating to our equity compensation plans as of December 31,
2007:
Plan category
|
|
Number of securities to be issued
upon exercise of outstanding
options, warrants and rights
(a)
|
|
Weighted-average exercise price of
outstanding options, warrants and
rights
(b)
|
|
Number of securities
remaining available for
future issuance under
equity compensation plans
(excluding securities
reflected in column (a))
(c)
|
|
Equity
compensation plans approved by NWA Corp.s stockholders
|
|
14,144,499
|
|
21.63
|
(1)
|
5,987,683
|
|
|
|
|
|
|
|
|
|
Equity
compensation plans not approved by NWA Corp.s stockholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
14,144,499
|
|
21.63
|
(1)
|
5,987,683
|
|
(1)
Excludes restricted stock units, which by their nature do not have an exercise
price.
See Item 8. Consolidated
Financial Statements and Supplementary Data, Note 11 Stock-Based Compensation
for additional information regarding NWA Corp.s equity compensation plans.
Item 13. CERTAIN RELATIONSHIPS,
RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
Prior to the Companys
emergence from bankruptcy, the Audit Committee adopted a written policy
regarding the review of related person transactions. In January 2008, the
Board designated the Corporate Governance Committee as the committee
responsible for considering and approving or ratifying Related Person
Transactions in accordance with the policy previously adopted by the Audit
Committee. The policy requires the Companys executive officers, directors and
nominees for director to promptly notify the Legal Department in writing of any
transaction in which (i) the amount exceeds $120,000, (ii) the
Company is, was or is proposed to be a participant and (iii) such person
or such persons immediate family members (Related Persons) has, had or may
have a direct or indirect interest (a Related Person Transaction). Subject to
certain exceptions delineated in the policy, Related Person Transactions must
be brought to the attention of the Corporate Governance Committee or another
committee designated by the Board of Directors that is comprised solely of
independent directors for an assessment of whether the transaction or proposed
transaction should be permitted to proceed. In deciding whether to approve or
ratify the Related Person Transaction, the Committee is required to consider
all relevant facts and circumstances, including without limitation the Related
Persons relationship to the Company and interest in the Related Person
Transaction, the aggregate value of the Related Person Transaction, the
benefits of the Related Person Transaction to the Company, the impact of the
Related Person Transaction on the Related Persons independence, the
availability of other sources for comparable products or services, and whether
the Related Person Transaction is on terms that are comparable to the terms
available to an unrelated third party or to employees generally. If the
Committee determines that the Related Person has a direct or indirect interest
in any such transaction, the Committee must review and approve, ratify or
disapprove the Related Person Transaction.
In connection with the
departure of Gary L. Wilson from his position as Chairman of the Board of
Directors of NWA Corp. upon the Companys emergence from bankruptcy, a position
which he held since April 1997, the Company entered into an agreement with
Mr. Wilson that provides for (i) the retention of Mr. Wilson as
a consultant to the Company for a period commencing on June 1, 2007 and
ending on December 31, 2008 for a consulting fee of $200,000 payable in
three installments, (ii) participation by Mr. Wilson, his spouse and
eligible dependents in Northwests group medical and dental plans for the life
of Mr. Wilson, provided that such coverage shall be secondary to any
Medicare benefits to which Mr. Wilson, his spouse and eligible dependents
may be entitled and, if Mr. Wilson becomes employed by another employer,
such coverage will become secondary to any coverage provided by such employer,
26
(iii) positive
space airline pass travel benefits on regularly scheduled flights of Northwest
during the remainder of Mr. Wilsons lifetime for the personal use of Mr. Wilson,
his spouse and dependent children, up to $30,000 per year for 2008, 2009 and
2010 and up to $25,000 for each year thereafter until Mr. Wilsons death
of positive pass travel benefits on Northwest that Mr. Wilson may extend
to other individuals, and an annual tax gross-up payment for income taxes
incurred by Mr. Wilson on such travel benefits, and (iv) secretarial
support for ten years and reimbursement for reasonable expenses incurred for a
home office for Mr. Wilson. In addition, the Company agreed, subject to
approval by the Bankruptcy Court, to make a $2 million charitable contribution
to a charity selected by Mr. Wilson. Under the agreement, Mr. Wilson
agreed that, during the period ending December 31, 2008, he will not
become an employee, consultant, officer,
partner or director of any air carrier that competes with Northwest and will
not directly or indirectly solicit or encourage any employee of Northwest or
its affiliates to leave the employment of Northwest or its affiliates. The
agreement with Mr. Wilson was approved by the Board of Directors of the
Company.
In April 2008, Northwest also entered into an agreement with
Mickey P. Foret, a director of NWA Corp., in connection with the settlement of
a claim filed on his behalf in the Companys bankruptcy case in respect of
outstanding consulting fees payable by Northwest pursuant to a consulting
agreement entered into by Northwest with Aviation Consultants, LLC, of which Mr. Foret
is the sole member, in January 2005, as well as post-employment benefits
that Northwest had agreed to provide to Mr. Foret in connection with the
termination of his employment in October 2001. The agreement provides that
Mr. Foret will be entitled to (i) a general allowed unsecured claim
in the amount of $1,020,000 in the Companys bankruptcy case, which, under the
terms of the Plan of Reorganization, will entitle Mr. Foret to receive, as
of the April 1, 2008 quarterly distribution date, 26,835 shares of Common
Stock of NWA Corp., (ii) participation by Mr. Foret, his spouse and
dependent children in Northwests group medical and dental plans for the
duration of Mr. Forets and his spouses lifetimes, provided that such
coverage shall be secondary to any Medicare benefits to which Mr. Foret,
his spouse and eligible dependents may be entitled and, if Mr. Foret
becomes employed by another employer, such coverage will become secondary to
any coverage provided by such employer, (iii) reimbursement under
Northwests medical expense reimbursement plan for out-of-pocket medical
expenses incurred by Mr. Foret, his spouse and eligible dependents during
the remainder of Mr. Forets lifetime, (iv) positive space pass
travel benefits on regularly scheduled flights of Northwest during the
remainder of Mr. Forets lifetime for the personal use of Mr. Foret,
his spouse and dependent children, and (v) an annual tax gross-up payment
for income taxes incurred by Mr. Foret on the value of such medical,
dental and travel benefits. The agreement with Mr. Foret was reviewed and
approved by the Audit Committee pursuant to the Related Person Transaction
policy.
Item 14. Principal
Accountant Fees and Services
Audit
Fees
The aggregate fees billed
to the Company by Ernst & Young for services rendered during 2007 and
2006 were as follows:
Audit
Fees.
Fees for audit services totaled approximately
$4,433,590 in 2007 and approximately $3,386,266 in 2006, including fees
associated with the annual audit of the financial statements, audit of internal
controls over financial reporting, the reviews of the Companys quarterly
reports on Form 10-Q, and services in connection with regulatory filings.
Audit-Related
Fees.
Fees for audit-related services totaled
approximately $514,102 in 2007 and approximately $573,296 in 2006.
Audit-related services principally include accounting consultations, audits of
the Companys employee benefit plans, and other audits required by regulation
or contract.
Tax
Fees.
Fees for tax services, including tax
compliance, tax advice and tax planning including expatriate tax services,
totaled approximately $236,025 in 2007 and approximately $115,809 in 2006.
All
Other Fees.
The Company did not incur fees except as
indicated in the above categories.
Audit
Committee Pre-Approval Policy
Consistent with SEC
policies regarding auditor independence, the Audit Committee of the Board of
Directors has responsibility for appointing, setting compensation for and
overseeing the work of the independent auditor. In recognition of this
responsibility, the Audit Committee has established a policy to pre-approve all
audit and permissible non-audit services provided by the independent auditor.
Prior to engagement of
the independent auditor for each years audit, management will submit to the
Audit Committee for approval an aggregate of services expected to be rendered
during that year for each of four categories of services.
27
1.
Audit
services include audit work performed in
the preparation of financial statements, as well as work that generally only
the independent auditor can reasonably be expected to provide, including
comfort letters, statutory audits and attest services. Such services also include an audit of
internal control over financial reporting as required by Section 404 of
the Sarbanes-Oxley Act of 2002.
2.
Audit-Related
services are for assurance and related
services that are traditionally performed by the independent auditor, including
employee benefit plan audits, special procedures required to meet certain
regulatory requirements, and consultation regarding financial accounting and/or
reporting standards.
3.
Tax
services include all services performed
by the independent auditors tax personnel except those services specifically
related to the audit of the financial statements, and includes fees in the
areas of tax compliance and tax advice.
4.
Other
Fees
are
those associated with services not included in the other categories. The
Company generally does not request such services from the independent auditor.
Prior to engagement, the
Audit Committee pre-approves these services. The fees are budgeted and the
Audit Committee requires the independent auditor and management to report
actual fees versus the budget periodically throughout the year by category of
service. During the year, circumstances may arise when it may become necessary
to engage the independent auditor for additional services that are permitted under
the SEC auditor independence rules but are not contemplated in the
original pre-approval. These services most often fall into one of two
categories: due diligence (e.g., in relation to acquisitions or divestitures)
reported as a component of audit-related services, and tax planning reported as
a component of tax services. In those instances, the Audit Committee requires
specific pre-approval before engaging the independent auditor.
The Audit Committee may
delegate pre-approval authority to one or more of its members. The member to
whom such authority is delegated must report, for informational purposes only,
any pre-approval decisions to the Audit Committee at its next scheduled
meeting.
28
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.
|
NORTHWEST AIRLINES CORPORATION
|
|
|
Dated: April 29,
2008
|
By:
|
/s/ ANNA M. SCHAEFER
|
|
|
Anna M. Schaefer
|
|
|
Vice President - Finance and Chief Accounting
Officer (principal accounting officer)
|
|
|
|
|
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below on the 29
th
day of April, 2008 by
the following persons on behalf of the registrant and in the capacities
indicated.
|
/s/ Douglas M. Steenland
|
|
*
|
|
Douglas M. Steenland
|
|
Mickey P. Foret
|
|
President and Chief Executive Officer
|
|
Director
|
|
(principal executive officer) and
|
|
|
|
Director
|
|
|
|
|
|
|
|
/s/ David M. Davis
|
|
*
|
|
David M. Davis
|
|
Robert L. Friedman
|
|
Executive Vice President & Chief Financial
|
|
Director
|
|
Officer (principal financial officer)
|
|
|
|
|
|
|
|
/s/ Anna M. Schaefer
|
|
*
|
|
Anna M. Schaefer
|
|
Doris Kearns Goodwin
|
|
Vice President Finance and Chief
|
|
Director
|
|
Accounting Officer
|
|
|
|
(principal accounting officer)
|
|
|
|
|
|
|
|
*
|
|
*
|
|
Roy J. Bostock
|
|
Jeffrey G. Katz
|
|
Chairman of the Board of Directors
|
|
Director
|
|
|
|
|
|
*
|
|
*
|
|
David A. Brandon
|
|
James J. Postl
|
|
Director
|
|
Director
|
|
|
|
|
|
*
|
|
*
|
|
Michael J. Durham
|
|
Rodney E. Slater
|
|
Director
|
|
Director
|
|
|
|
|
|
*
|
|
*
|
|
John M. Engler
|
|
William S. Zoller
|
|
Director
|
|
Director
|
|
|
|
|
|
|
|
|
*
|
/s/ Anna M. Schaefer
|
|
|
By:
|
Anna M. Schaefer
|
|
|
|
Attorney-in-fact
|
|
|
29
EXHIBIT INDEX
3.1
|
|
Amended and Restated
Certificate of Incorporation of Northwest Airlines Corporation (filed as
Exhibit 3.1 to NWA Corp.s Registration Statement on Form S-8 filed
on May 30, 2007 and incorporated herein by reference).
|
|
|
|
3.2
|
|
Amended and Restated
Bylaws of Northwest Airlines Corporation (filed as Exhibit 3.2 to NWA
Corp.s Registration Statement on Form S-8 filed on May 30, 2007
and incorporated herein by reference).
|
|
|
|
3.3
|
|
Restated Certificate of
Incorporation of Northwest Airlines, Inc. (filed as Exhibit 3.3 to
Northwests Registration Statement on Form S-3, File No. 33-74772,
and incorporated herein by reference).
|
|
|
|
3.4
|
|
Amended and Restated
Bylaws of Northwest Airlines, Inc. (filed as Exhibit 3.4 to NWA
Corp.s Annual Report on Form 10-K for the year ended December 31,
2004 and incorporated herein by reference).
|
|
|
|
4.1
|
|
Rights Agreement dated
as of May 25, 2007 by and between NWA Corp. and Computershare Trust
Company, N.A., as Rights Agent (filed as Exhibit 1 to NWA Corp.s
Registration Statement on Form 8-A filed on May 30, 2007 and
incorporated herein by reference).
|
|
|
|
4.2
|
|
The registrant hereby
agrees to furnish to the Commission, upon request, copies of certain
instruments defining the rights of holders of long-term debt of the kind
described in Item 601 (b) (4) of Regulation S-K.
|
|
|
|
10.1
|
|
Standstill Agreement
dated as of November 15, 2000 among Continental Airlines, Inc.,
Northwest Airlines Corporation, Northwest Airlines Holdings Corporation and
Northwest Airlines, Inc. (filed as Exhibit 10.1 to NWA Corp.s
Annual Report on Form 10-K for the year ended December 31, 2004 and
incorporated herein by reference).
|
|
|
|
10.2
|
|
Amended and Restated
Standstill Agreement dated May 1, 1998 between Koninklijke Luchtvaart
Maatschappij N.V. and Northwest Airlines Corporation (filed as
Exhibit 10.2 to NWA Corp.s Annual Report on Form 10-K for the year
ended December 31, 2003 and incorporated herein by reference).
|
|
|
|
10.3
|
|
Airport Use and Lease
Agreement dated as of June 1, 2005 between Wayne County Airport
Authority and Northwest Airlines, Inc. (filed as Exhibit 10.3 to
NWA Corp.s Annual Report on Form 10-K for the year ended
December 31, 2005 and incorporated herein by reference).
|
|
|
|
10.4
|
|
Airline Operating
Agreement and Terminal Building Lease Minneapolis-St. Paul International
Airport dated as of January 1, 1999 between the Metropolitan Airports
Commission and Northwest Airlines, Inc. (filed as Exhibit 10.4 to
NWA Corp.s Annual Report on Form 10-K for the year ended
December 31, 2005 and incorporated herein by reference).
|
|
|
|
10.5
|
|
Amendment to Airline
Operating Agreement and Terminal Building Lease Minneapolis-St. Paul
International Airport dated as of March 29, 2002 between the Metropolitan
Airports Commission and Northwest Airlines, Inc.
|
|
|
|
10.6
|
|
Second Amendment to
Airline Operating Agreement and Terminal Building Lease Minneapolis-St. Paul
International Airport dated as of November 15, 2004 between the
Metropolitan Airports Commission and Northwest Airlines, Inc.
|
|
|
|
10.7
|
|
Third Amendment to
Airline Operating Agreement and Terminal Building Lease Minneapolis-St. Paul
International Airport dated as of May 9, 2007 by and between the
Metropolitan Airports Commission and Northwest Airlines, Inc.
|
|
|
|
10.8
|
|
A330 Financing Letter
Agreement No. 1 dated as of December 21, 2000 between Northwest
Airlines, Inc. and AVSA S.A.R.L. (filed as Exhibit 10.19 to NWA
Corp.s Annual Report on Form 10-K for the year ended December 31,
2004 and incorporated herein by reference; the Commission has granted
confidential treatment for certain portions of this document).
|
|
|
|
10.9
|
|
Amendment No. 1 to
the A330 Financing Letter Agreement No. 1 dated as of December 20,
2002 between Northwest Airlines, Inc. and AVSA S.A.R.L. (filed as
Exhibit 10.20 to NWA Corp.s Annual Report on Form 10-K for the
year ended December 31, 2004 and incorporated herein by reference; the
Commission has granted confidential treatment for certain portions of this
document).
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30
10.10
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Amendment No. 2 to
the A330 Financing Letter Agreement No. 1 dated May 26, 2004,
between Northwest Airlines, Inc. and AVSA S.A.R.L. (filed as
Exhibit 10.21 to NWA Corp.s Annual Report on Form 10-K for the year
ended December 31, 2004 and incorporated herein by reference; the
Commission has granted confidential treatment for certain portions of this
document).
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10.11
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New A330 Financing
Letter Agreement No. 1 dated as of January 21, 2005 between
Northwest Airlines, Inc. and AVSA S.A.R.L. (filed as Exhibit 10.22
to NWA Corp.s Annual Report on Form 10-K for the year ended
December 31, 2004 and incorporated herein by reference; the Commission
has granted confidential treatment for certain portions of this document).
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10.12
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Form of Credit
Agreement to be entered into pursuant to Exhibits 10.10 and 10.13 (filed as
Exhibit 10.23 to NWA Corp.s Annual Report on Form 10-K for the
year ended December 31, 2004 and incorporated herein by reference; the
Commission has granted confidential treatment for certain portions of this
document).
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10.13
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Form of Mortgage
to be entered into pursuant to Exhibits 10.10 and 10.13 (filed as
Exhibit 10.24 to NWA Corp.s Annual Report on Form 10-K for the
year ended December 31, 2004 and incorporated herein by reference; the
Commission has granted confidential treatment for certain portions of this
document).
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10.14
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A330 Financing Letter
Agreement dated as of January 24, 2006 between Northwest
Airlines, Inc. and AVSA, S.A.R.L. (filed as Exhibit 10.3 to NWA
Corp.s Quarterly Report on Form 10-Q for the quarter ended
March 31, 2006 and incorporated herein by reference; the Commission has
granted confidential treatment for certain portions of this document).
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10.15
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Form of Credit
Agreement to be entered into pursuant to Exhibit 10.16 by Northwest
Airlines, Inc. and Airbus Financial Services (filed as Exhibit 10.4
to NWA Corp.s Quarterly Report on Form 10-Q for the quarter ended
March 31, 2006 and incorporated herein by reference; the Commission has
granted confidential treatment for certain portions of this document).
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10.16
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Purchase Agreement
No. 2924 dated May 5, 2005 between The Boeing Company and Northwest
Airlines, Inc. (filed as Exhibit 10.1 to NWA Corp.s Quarterly
Report on Form 10-Q for the quarter ended June 30, 2005 and
incorporated herein by reference; NWA Corp. has filed a request with the
Commission for confidential treatment as to certain portions of this
document).
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10.17
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Super Priority Debtor
in Possession and Exit Credit and Guarantee Agreement dated as of
August 21, 2006 among Northwest Airlines Corporation, Northwest Airlines
Holdings Corporation, NWA Inc., Northwest Airlines, Inc. and various
lenders and agents (filed as Exhibit 10.1 to NWA Corp.s Quarterly
Report on Form 10-Q for the quarter ended September 30, 2006 and
incorporated herein by reference).
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10.18
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First Amendment dated
as of March 9, 2007 to the Super Priority Debtor in Possession and Exit
Credit and Guarantee Agreement dated as of August 21, 2006 among
Northwest Airlines Corporation, Northwest Airlines Holdings Corporation, NWA
Inc., Northwest Airlines, Inc. and various lenders and agents (filed as
Exhibit 10.1 to NWA Corp.s Quarterly Report on Form 10-Q for the
quarter ended March 31, 2007 and incorporated herein by reference).
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10.19
|
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Route Security
Agreement dated as of August 21, 2006 between Northwest
Airlines, Inc. and Citicorp USA, Inc., as Collateral Agent (filed
as Exhibit 10.2 to NWA Corp.s Quarterly Report on Form 10-Q for
the quarter ended September 30, 2006 and incorporated herein by
reference).
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10.20
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Equity Commitment
Agreement dated as of February 12, 2007 among Northwest Airlines
Corporation, Northwest Airlines, Inc. and J.P. Morgan Securities Inc. (filed
as Exhibit 10.2 to NWA Corp.s Quarterly Report on Form 10-Q for
the quarter ended September 30, 2007 and incorporated herein by
reference).
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*10.21
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Description
of Compensation for Non-Employee Directors of Northwest Airlines
Corporation (filed as Exhibit 10.1 to NWA Corp.s Quarterly Report on
Form 10-Q for the quarter ended June 30, 2007 and incorporated
herein by reference).
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*10.22
|
|
Form of Indemnity
Agreement entered into by NWA Corp. with each member of the Board of
Directors of NWA Corp.
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31
*10.23
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Management Compensation
Agreement dated as of September 14, 2005 between Northwest
Airlines, Inc. and Douglas M. Steenland (filed as Exhibit 10.1 to
NWA Corp.s Quarterly Report on Form 10-Q for the quarter ended
September 30, 2005 and incorporated herein by reference).
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*10.24
|
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Management Compensation
Agreement dated as of January 14, 2002 between Northwest
Airlines, Inc. and J. Timothy Griffin (filed as Exhibit 10.23 to
NWA Corp.s Annual Report on Form 10-K for the year ended
December 31, 2006 and incorporated herein by reference).
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*10.25
|
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Management Compensation
Agreement dated as of May 2, 2005 between Northwest Airlines, Inc.
and Neal S. Cohen (filed as Exhibit 10.3 to NWA Corp.s Quarterly Report
on Form 10-Q for the quarter ended June 30, 2005 and incorporated
herein by reference).
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*10.26
|
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Management Compensation
Agreement dated as of April 17, 2002 between Northwest
Airlines, Inc. and Andrew C. Roberts (filed as Exhibit 10.30 to NWA
Corp.s Annual Report on Form 10-K for the year ended December 31,
2004 and incorporated herein by reference).
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*10.27
|
|
Northwest
Airlines, Inc. Key Employee Annual Cash Incentive Program (filed as
Exhibit 10.42 to the registration statement on Form S-1, File
No. 33-74210, and incorporated herein by reference).
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*10.28
|
|
Northwest
Airlines, Inc. Excess Pension Plan for Salaried Employees (2001
Restatement) (filed as Exhibit 10.28 to NWA Corp.s Annual Report on
Form 10-K for the year ended December 31, 2006 and incorporated
herein by reference).
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*10.29
|
|
First Amendment of
Northwest Airlines Excess Pension Plan for Salaried Employees (2001
Restatement) (filed as Exhibit 10.3 to NWA Corp.s Quarterly Report on
Form 10-Q for the quarter ended September 30, 2004 and incorporated
herein by reference).
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*10.30
|
|
Northwest
Airlines, Inc. Supplemental Executive Retirement Plan (2001 Restatement)
(filed as Exhibit 10.30 to NWA Corp.s Annual Report on Form 10-K
for the year ended December 31, 2006 and incorporated herein by
reference).
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*10.31
|
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First Amendment of
Northwest Airlines Supplemental Executive Retirement Plan (2001 Restatement)
(filed as Exhibit 10.31 to NWA Corp.s Annual Report on Form 10-K
for the year ended December 31, 2006 and incorporated herein by
reference).
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*10.32
|
|
Second Amendment of
Northwest Airlines Supplemental Executive Retirement Plan (2001 Restatement)
(filed as Exhibit 10.32 to NWA Corp.s Annual Report on Form 10-K
for the year ended December 31, 2006 and incorporated herein by
reference).
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*10.33
|
|
Ancillary Agreement to
the Northwest Airlines, Inc. Supplemental Executive Retirement Plan
dated as of November 7, 2002 between Northwest Airlines, Inc. and
Andrew C. Roberts (filed as Exhibit 10.35 to NWA Corp.s Annual Report
on Form 10-K for the year ended December 31, 2004 and incorporated
herein by reference).
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*10.34
|
|
Northwest Airlines
Excess 401(k) Cash Payments Program (filed as Exhibit 10.1 to
Amendment No. 2 to NWA Corp.s Annual Report on Form 10-K for the
year ended December 31, 2006 and incorporated herein by reference).
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*10.35
|
|
Northwest Airlines
Corporation E-Commerce Incentive Compensation Program (as amended and
restated), including form of Award Agreement (filed as Exhibit 10.4 to
NWA Corp.s Quarterly Report on Form 10-Q for the quarter ended
September 30, 2004 and incorporated herein by reference).
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*10.36
|
|
Northwest
Airlines, Inc. 2003 Long-Term Cash Incentive Plan, including form of
Award Agreement (filed as Exhibit 10.41 to NWA Corp.s Annual Report on
Form 10-K for the year ended December 31, 2003 and incorporated
herein by reference).
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*10.37
|
|
Ancillary Agreement to
the Northwest Airlines, Inc. Supplemental Executive Retirement Plan
dated as of April 29, 2005 between Northwest Airlines, Inc. and
Neal S. Cohen (filed as Exhibit 10.48 to NWA Corp.s Annual Report on
Form 10-K for the year ended December 31, 2005 and incorporated
herein by reference).
|
32
*10.38
|
|
2007 Stock Incentive
Plan (filed as Exhibit 99.2 to NWA Corp.s Current Report on
Form 8-K filed on May 29, 2007 and incorporated herein by
reference).
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*10.39
|
|
Form of Award
Agreement for Restricted Stock Units (Settled in Stock) Granted to
Employees under the Northwest Airlines Corporation 2007 Stock Incentive Plan
(filed as Exhibit 99.3 to NWA Corp.s Current Report on Form 8-K
filed on May 29, 2007 and incorporated herein by reference).
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*10.40
|
|
Form of Award
Agreement for Restricted Stock Units (Settled in Cash) Granted to
Employees under the Northwest Airlines Corporation 2007 Stock Incentive Plan
(filed as Exhibit 99.4 to NWA Corp.s Current Report on Form 8-K
filed on May 29, 2007 and incorporated herein by reference).
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*10.41
|
|
Form of Award
Agreement for Non-Qualified Stock Options Granted to Employees under the
Northwest Airlines Corporation 2007 Stock Incentive Plan (filed as
Exhibit 99.5 to NWA Corp.s Current Report on Form 8-K filed on
May 29, 2007 and incorporated herein by reference).
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*10.42
|
|
Form of Award
Agreement for Stock Appreciation Rights Granted to Employees under the
Northwest Airlines Corporation 2007 Stock Incentive Plan (filed as
Exhibit 99.6 to NWA Corp.s Current Report on Form 8-K filed on
May 29, 2007 and incorporated herein by reference).
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*10.43
|
|
Amendment No. 1 to
the Northwest Airlines Corporation 2007 Stock Incentive Plan (filed as
Exhibit 10.2 to NWA Corp.s Quarterly Report on Form 10-Q for the
quarter ended June 30, 2007 and incorporated herein by reference).
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*10.44
|
|
Form of Award
Agreement for Restricted Stock Units Granted to Directors under the
Northwest Airlines Corporation 2007 Stock Incentive Plan (filed as
Exhibit 10.3 to NWA Corp.s Quarterly Report on Form 10-Q for the
quarter ended June 30, 2007 and incorporated herein by reference).
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*10.45
|
|
Form of Award
Agreement for Non-Qualified Stock Options Granted to Directors under the
Northwest Airlines Corporation 2007 Stock Incentive Plan (filed as
Exhibit 10.4 to NWA Corp.s Quarterly Report on Form 10-Q for the
quarter ended June 30, 2007 and incorporated herein by reference).
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12.1
|
|
Computation of Ratio of
Earnings to Fixed Charges.
|
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12.2
|
|
Computation of Ratio of
Earnings to Fixed Charges and Preferred Stock Requirements.
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21.1
|
|
List of Subsidiaries.
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|
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23.1
|
|
Consent of
Ernst & Young LLP.
|
|
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|
24.1
|
|
Powers of Attorney
(included in signature page).
|
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31.1
|
|
Certification of Chief
Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.
|
|
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31.2
|
|
Certification of Chief
Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.
|
|
|
|
32.1
|
|
Section 1350
Certification of Chief Executive Officer.
|
|
|
|
32.2
|
|
Section 1350
Certification of Chief Financial Officer.
|
Previously filed
* Compensatory plans or arrangements in which the Companys
directors or executive officers participate.
33
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