UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended December 31, 1997
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 1-5424
DELTA AIR LINES, INC.
State of Incorporation: Delaware
IRS Employer Identification No.: 58-0218548
Hartsfield Atlanta International Airport, Atlanta, Georgia 30320
Telephone: (404) 715-2600
Number of shares outstanding by each class of common stock, as of January 31, 1998:
Common Stock, $3.00 par value - 74,693,142 shares outstanding
PART I. FINANCIAL INFORMATION
DELTA AIR LINES, INC.
Consolidated Balance Sheets
(In Millions)
December 31 June 30
ASSETS 1997 1997
------------------------------------------------------------------------------------------------
(Unaudited)
CURRENT ASSETS:
Cash and cash equivalents $ 850 $ 662
Short-term investments 503 508
Accounts receivable, net of allowance for uncollectible accounts
of $53 at December 31, 1997 and $48 at June 30, 1997 758 943
Maintenance and operating supplies, at average cost 90 93
Deferred income taxes 456 413
Prepaid expenses and other 210 248
--------- -------
Total current assets 2,867 2,867
--------- -------
PROPERTY AND EQUIPMENT:
Flight equipment 10,283 9,619
Less: Accumulated depreciation 3,697 3,510
--------- -------
6,586 6,109
--------- -------
Flight equipment under capital leases 515 523
Less: Accumulated amortization 192 176
--------- -------
323 347
--------- -------
Ground property and equipment 3,178 3,032
Less: Accumulated depreciation 1,895 1,758
--------- -------
1,283 1,274
--------- -------
Advance payments for equipment 388 312
--------- -------
Total property and equipment 8,580 8,042
--------- -------
OTHER ASSETS:
Marketable equity securities 374 432
Deferred income taxes - 103
Investments in associated companies 326 317
Cost in excess of net assets acquired, net 252 257
Leasehold and operating rights, net 129 134
Other 609 589
--------- -------
Total other assets 1,690 1,832
--------- -------
Total assets $ 13,137 $12,741
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The accompanying notes are an integral part of these consolidated balance sheets.
DELTA AIR LINES, INC.
Consolidated Balance Sheets
(In Millions)
December 31 June 30
LIABILITIES AND SHAREHOLDERS' EQUITY 1997 1997
------------------------------------------------------------------------------------------------
(Unaudited)
CURRENT LIABILITIES:
Current maturities of long-term debt $ 292 $ 236
Current obligations under capital leases 61 62
Accounts payable and miscellaneous accrued liabilities 1,879 1,691
Air traffic liability 1,218 1,418
Accrued salaries and vacation pay 433 463
Accrued rent 222 213
-------- -------
Total current liabilities 4,105 4,083
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NONCURRENT LIABILITIES:
Long-term debt 1,408 1,475
Postretirement benefits 1,862 1,839
Accrued rent 614 602
Capital leases 284 322
Deferred income taxes 26 -
Other 474 406
-------- -------
Total noncurrent liabilities 4,668 4,644
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DEFERRED CREDITS:
Deferred gain on sale and leaseback transactions 720 746
Manufacturers' and other credits 60 105
-------- -------
Total deferred credits 780 851
-------- -------
COMMITMENTS AND CONTINGENCIES (Notes 3 and 4)
EMPLOYEE STOCK OWNERSHIP PLAN
PREFERRED STOCK:
Series B ESOP Convertible Preferred Stock (issued and outstanding
6,636,348 shares at December 31, 1997 and
and 6,668,248 shares at June 30, 1997) 477 480
Unearned compensation under
employee stock ownership plan (300) (324)
-------- -------
177 156
-------- -------
SHAREHOLDERS' EQUITY:
Common Stock at par (total shares issued: 86,386,342 shares at
December 31, 1997 and 83,645,047 shares at June 30, 1997) 259 251
Additional paid-in capital 2,851 2,645
Net unrealized gain on noncurrent marketable equity securities 67 101
Retained earnings 1,141 711
Treasury stock at cost, (11,867,526 shares at December 31, 1997
and 9,949,060 shares at June 30, 1997) (911) (701)
-------- -------
Total shareholders' equity 3,407 3,007
-------- -------
Total liabilities and shareholders' equity $ 13,137 $12,741
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The accompanying notes are an integral part of these consolidated balance sheets.
DELTA AIR LINES, INC.
Consolidated Statements of Operations
(Unaudited)
(In Millions, except Share Data)
Three Months Ended Six Months Ended
December 31 December 31
--------------------------- ---------------------------
1997 1996 1997 1996
----------- ----------- ----------- -----------
OPERATING REVENUES:
Passenger $ 3,126 $ 2,925 $ 6,386 $ 6,095
Cargo 160 145 302 269
Other, net 147 127 297 265
----------- ----------- ----------- -----------
Total operating revenues 3,433 3,197 6,985 6,629
----------- ----------- ----------- -----------
OPERATING EXPENSES:
Salaries and related costs 1,175 1,107 2,353 2,199
Aircraft fuel 409 466 818 882
Passenger commissions 235 237 501 515
Depreciation and amortization 211 174 409 340
Contracted services 210 182 416 381
Other selling expenses 170 149 334 328
Aircraft rent 137 137 274 274
Aircraft maintenance materials and outside repairs 126 103 250 211
Passenger service 105 94 216 199
Facilities and other rent 96 92 199 191
Landing fees 55 62 119 126
Other 172 167 333 318
----------- ----------- ----------- -----------
Total operating expenses 3,101 2,970 6,222 5,964
----------- ----------- ----------- -----------
OPERATING INCOME 332 227 763 665
----------- ----------- ----------- -----------
OTHER INCOME (EXPENSE):
Interest expense (49) (52) (99) (106)
Interest capitalized 10 8 18 16
Interest income 23 16 40 35
Miscellaneous income (expense), net (3) 6 8 (7)
----------- ----------- ----------- -----------
(19) (22) (33) (62)
----------- ----------- ----------- -----------
INCOME BEFORE INCOME TAXES 313 205 730 603
INCOME TAXES PROVIDED (123) (80) (287) (240)
----------- ----------- ----------- -----------
NET INCOME 190 125 443 363
PREFERRED STOCK DIVIDENDS (3) (2) (5) (4)
----------- ----------- ----------- -----------
NET INCOME AVAILABLE TO COMMON
SHAREHOLDERS $ 187 $ 123 $ 438 $ 359
=========== =========== =========== ===========
BASIC INCOME PER COMMON SHARE $ 2.52 $ 1.66 $ 5.92 $ 4.77
=========== =========== =========== ===========
DILUTED INCOME PER COMMON SHARE $ 2.40 $ 1.63 $ 5.67 $ 4.64
=========== =========== =========== ===========
WEIGHTED AVERAGE SHARES USED IN
PER SHARE COMPUTATION:
Basic 74,243,116 73,854,205 73,980,077 75,060,738
Diluted 78,592,684 76,078,233 77,848,795 77,748,372
DIVIDENDS PER COMMON SHARE $ 0.05 $ 0.05 $ 0.10 $ 0.10
=========== =========== =========== ===========
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The accompanying notes are an integral part of these consolidated statements.
DELTA AIR LINES, INC.
Statistical Summary
(Unaudited)
Three Months Ended Six Months Ended
December 31 December 31
--------------------------- ---------------------------
Statistical Summary: 1997 1996 1997 1996
----------- ----------- ----------- -----------
Revenue Passengers Enplaned (thousands) 25,487 24,647 51,993 49,907
Revenue Passenger Miles (millions) 24,144 23,404 50,729 48,799
Available Seat Miles (millions) 34,908 34,195 70,591 68,581
Operating Margin 9.7% 7.1% 10.9% 10.0%
Passenger Mile Yield 12.95c 12.50c 12.59c 12.49c
Operating Revenue Per Available Seat Mile 9.83c 9.35c 9.89c 9.67c
Operating Cost Per Available Seat Mile 8.88c 8.69c 8.81c 8.70c
Passenger Load Factor 69.16% 68.44% 71.86% 71.16%
Breakeven Passenger Load Factor 61.82% 63.14% 63.28% 63.39%
Revenue Ton Miles (millions) 2,883 2,747 5,956 5,620
Cargo Ton Miles (millions) 469 407 884 740
Cargo Ton Mile Yield 34.20c 35.60c 34.24c 36.31c
Fuel Gallons Consumed (millions) 660 649 1,342 1,307
Average Price Per Fuel Gallon 61.97c 71.78c 60.93c 67.47c
Number of Aircraft in Fleet at End of Period 559 544 559 544
Full-Time Equivalent Employees at End of Period 65,454 61,872 65,454 61,872
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DELTA AIR LINES, INC.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In Millions)
Six Months Ended
December 31
-------------------
1997 1996
------ ------
CASH PROVIDED BY OPERATING ACTIVITIES:
Net Income $ 443 $ 363
Adjustments to reconcile net income to cash
provided by operating activities, net 639 392
Changes in certain assets and liabilities, net 153 (12)
------ ------
Net cash provided by operating activities 1,235 743
------ ------
CASH FLOWS FROM INVESTING ACTIVITIES:
Property and equipment additions:
Flight equipment, including advance payments (842) (720)
Ground property and equipment (121) (128)
Decrease in short-term investments, net 10 5
Proceeds from sale of flight equipment - 4
------ ------
Net cash used in investing activities (953) (839)
------ ------
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock 187 2
Repurchase of common stock (209) (379)
Payments on long-term debt and capital lease obligations (51) (124)
Cash dividends (21) (22)
------ ------
Net cash used in financing activities (94) (523)
------ ------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 188 (619)
Cash and cash equivalents at beginning of period 662 1,145
------ ------
Cash and cash equivalents at end of period $ 850 $ 526
====== ======
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid during the period for:
Interest (net of amounts capitalized) $ 90 $ 103
Income taxes $ 153 $ 198
Non-cash activities:
Capital lease obligations incurred $ - $ 6
|
The accompanying notes are an integral part of these condensed consolidated statements.
DELTA AIR LINES, INC.
Notes to Consolidated Financial Statements
December 31, 1997
(Unaudited)
1. ACCOUNTING AND REPORTING POLICIES:
The Company's accounting and reporting policies are summarized in Note 1 (page 33) of the Notes to Consolidated Financial Statements in Delta's 1997 Annual Report to Shareholders. These interim financial statements should be read in conjunction with the financial statements and the notes thereto included in the Company's 1997 Annual Report to Shareholders. In the opinion of management, the accompanying unaudited financial statements reflect all adjustments, consisting of normal recurring accruals, necessary for a fair statement of results for the interim periods.
2. LONG-TERM DEBT:
The 1997 Bank Credit Agreement provides for unsecured borrowings by the Company of up to $1.25 billion on a revolving basis until May 1, 2002, subject to certain conditions. Up to $700 million of this facility may be used for the issuance of letters of credit. The interest rate under this facility is, at the Company's option, the LIBOR or the prime rate, in each case plus a margin which is subject to adjustment based on certain changes in the credit ratings of the Company's long-term senior unsecured debt. The Company also has the option to obtain loans through a competitive bid procedure. The 1997 Bank Credit Agreement contains certain negative covenants that limit the Company's ability to grant liens, incur or guarantee debt and enter into flight equipment leases. It also provides that if there is a change of control (as defined) of the Company, the banks' obligation to extend credit terminates, any amounts outstanding become immediately due and payable and the Company will immediately deposit cash collateral with the banks in an amount equal to all outstanding letters of credit. At December 31, 1997, no borrowings or letters of credit were outstanding under the 1997 Bank Credit Agreement.
The Company's credit agreement with ABN AMRO Bank, N.V. and a group of banks (Letter of Credit Facility) provides for the issuance of letters of credit for up to $500 million in stated amount to credit enhance the Delta Family-Care Savings Plan's Series C Guaranteed Serial ESOP Notes (Series C ESOP Notes), which are guaranteed by Delta. At December 31, 1997, the face amount of the letter of credit under the Letter of Credit Facility was $450 million, which covers $290 million outstanding principal amount of the Series C ESOP Notes, up to $128 million of Make Whole Premium Amount and approximately one year of interest on the Series C ESOP Notes. For additional information regarding Delta's long-term debt, including the Series C ESOP Notes, see Note 7 (page 38) of the Notes to Consolidated Financial Statements in Delta's 1997 Annual Report to Shareholders.
3. AIRCRAFT PURCHASE COMMITMENTS:
At December 31, 1997, the Company's aircraft fleet, purchase commitments, options (which have scheduled delivery slots), and rolling options (which replace options and are assigned delivery slots as options expire or are exercised) were:
Current Fleet
----------------------
Rolling
Aircraft Type Owned Leased Total Orders Options Options
------------------- ----- ------ ----- ------ ------- -------
B-727-200 118 13 131 - - -
B-737-200 1 53 54 - - -
B-737-300 - 13 13 - - -
B-737-600/700/800 - - - 70 60 280
B-757-200 50 41 91 9 20 90
B-767-200 15 - 15 - - -
B-767-300 2 24 26 2 - -
B-767-300ER 26 7 33 14 10 19
B-767-400 - - - 21 24 25
B-777-200 - - - 10 20 30
L-1011-1 23 - 23 - - -
L-1011-250 6 - 6 - - -
L-1011-500 17 - 17 - - -
MD-11 7 7 14 1 - -
MD-88 63 57 120 - - -
MD-90 16 - 16 - - -
---- ------ ----- ------ ------- -------
Total 344 215 559 127 134 444
==== ====== ===== ====== ======= =======
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During the December 1997 quarter, Delta took delivery of two new B-767-300ER aircraft and retired one L-1011-1 aircraft.
Also during the December 1997 quarter, Delta and Federal Express Corporation entered into an agreement which provides Delta with options to purchase an additional 36 shipsets of Stage 3 heavyweight hushkits and seven spare engine hushkits for B-727-200 aircraft by the end of calendar year 1999. The Company exercised options to purchase six shipsets of Stage 3 heavyweight hushkits for B-737-200 aircraft and nine shipsets of Stage 3 heavyweight hushkits for B-727-200 aircraft during the December 1997 quarter.
Subsequent to December 31, 1997, Delta purchased three B-727-200 aircraft which it had been previously operating under lease and took delivery of one new B-767-300 ER aircraft.
On October 21, 1997, Delta and The Boeing Company (Boeing) entered into definitive aircraft purchase agreements under which Delta placed orders to purchase, and obtained options and rolling options to purchase, certain aircraft. On November 28, 1997, Delta exercised options to purchase 10 B-777-200 and obtained 20 new options and 30 new rolling options for
B-777-200 aircraft. All orders in the above table are the result of the new Boeing agreements except for preexisting orders for four B-757-200, two B-767-300, four B-767-300ER and one MD-11 aircraft. All orders for MD-90 aircraft were canceled. All options and rolling options reflected in the above table are the result of the new Boeing agreements. These agreements provide that, subject to certain conditions, Delta may switch orders among these aircraft types and defer the delivery of aircraft. The agreements also provide that Boeing will be the sole supplier of new aircraft to Delta for 20 years, subject to certain exceptions, but this provision is not enforceable by Boeing until the European Commission permits such enforcement. Delta is continuing negotiations with the manufacturers of the engines for the aircraft covered by these agreements.
Future expenditures for aircraft, engines and engine hushkits on firm order at December 31, 1997 are estimated to be $5.9 billion, as follows:
Amounts
Years Ending June 30 (In Millions)
-------------------- -------------
Remainder of fiscal year 1998 $ 630
1999 1,090
2000 810
2001 1,600
2002 300
After 2002 1,490
-------
Total $ 5,920
=======
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4. CONTINGENCIES:
Delta is a defendant in certain legal actions relating to alleged employment discrimination practices, antitrust matters, environmental issues and other matters concerning Delta's business. Although the ultimate outcome of these matters cannot be predicted with certainty, management presently believes that the resolution of these actions is not likely to have a material adverse effect on Delta's consolidated financial condition or results of operations.
5. SHAREHOLDERS' EQUITY:
During the December 1997 quarter, the Company issued a total of 2,691,061 common shares, at an average price of $68.93 per share, under its broad-based employee stock option plans, 1989 Stock Incentive Plan, Dividend Reinvestment and Stock Purchase Plan and Non-Employee Directors' Stock Plan. In addition, the Company repurchased 1,907,700 common shares at an average price of $109.54 per share. For additional information regarding Delta's common stock repurchase authorization, see Note 15 (page 46) of the Notes to Consolidated Financial Statements in Delta's 1997 Annual Report to Shareholders.
At December 31, 1997, 22,069,463 common shares were reserved for issuance under the Company's broad-based employee stock option plans; 8,070,240 common shares were reserved for issuance under the 1989 Stock Incentive Plan; 5,692,659 common shares were
reserved for conversion of the Series B ESOP Convertible Preferred Stock; and 248,798 common shares were reserved for issuance under the Non-Employee Directors' Stock Plan.
6. INCOME TAXES:
Income taxes are provided at the estimated annual effective tax rate, which differs from the federal statutory rate of 35% primarily due to state income taxes and the effect of certain expenses that are not deductible for income tax purposes. Deferred income taxes reflect the net effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.
7. RESTRUCTURING AND OTHER NON-RECURRING CHARGES:
During fiscal years 1997 and 1996, Delta recorded pre-tax restructuring and other non-recurring charges of $52 million and $829 million, respectively (see Note 16 on page 46 of the Notes to Consolidated Financial Statements in the Company's 1997 Annual Report to Shareholders). The following table reflects the activity in the restructuring accruals during the three months ended December 31, 1997. All reductions in reserves represent payments of liabilities.
Balance at Balance at
September 30, 1997 Reductions December 31, 1997
------------------ ---------- -----------------
(In Millions)
Leadership 7.5
Workforce Reductions $ 4 $ - $ 4
Abandoned Facilities 37 1 36
Transatlantic and European
Realignment
Workforce Reductions 27 27 -
Abandoned Facilities 2 - 2
Other 4 3 1
----- ----- -----
Totals $ 74 $ 31 $ 43
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8. EARNINGS PER SHARE:
During the December 1997 quarter, Delta adopted Statement of Financial Accounting Standards No. 128, "Earnings per Share" (SFAS 128), which established new standards for computing and presenting income per share data. SFAS 128 is effective for periods ending after December 15, 1997 and requires restatement of all prior period income per share data presented. Application of SFAS 128 did not change income per share data previously presented for the three and six months ended December 31, 1996. The following table shows a reconciliation of the numerator (net income) and the denominator (average shares outstanding) used in computing basic and diluted income per share:
Three Months Ended Six Months Ended
December 31 December 31
------------------ ----------------
1997 1996 1997 1996
----- ------ ----- ------
(In Millions, except per share data)
BASIC:
Net income $ 190 $ 125 $ 443 $ 363
Preferred stock dividends (3) (2) (5) (4)
----- ------ ----- ----
Income available to common
shareholders $ 187 $ 123 $ 438 $ 359
Weighted average shares outstanding 74.2 73.9 74.0 75.1
Basic income per common share $2.52 $ 1.66 $5.92 $4.77
DILUTED:
Net income $ 190 $ 125 $ 443 $ 363
Adjustment to net income
assuming conversion of Series B ESOP
convertible preferred stock (1) (1) (2) (2)
----- ------ ----- -----
Income available to
common shareholders $ 189 $ 124 $ 441 $ 361
Weighted average shares outstanding 74.2 73.9 74.0 75.1
Additional shares assuming:
Conversion of Series C convertible
preferred stock - - - 0.5
Conversion of Series B ESOP
convertible preferred stock 2.1 1.9 2.1 1.9
Exercise of stock options 2.3 0.3 1.7 0.2
----- ------ ----- -----
Average shares outstanding as adjusted 78.6 76.1 77.8 77.7
Diluted income per common share $2.40 $ 1.63 $5.67 $4.64
|
FINANCIAL CONDITION
Cash and cash equivalents and short-term investments totaled $1.35 billion at December 31, 1997, compared to $1.17 billion at June 30, 1997. During the six months ended December 31, 1997, the principal sources of funds were $1.24 billion of cash from operations, which included $310 million received from the Company's frequent flyer partners for the prepayment of mileage credits, and $187 million from the issuance of 2,691,061 common shares primarily under the Company's broad-based employee stock option plans. During the six months ended December 31,1997, the Company invested $842 million in flight equipment and $121 million in ground property and equipment; paid $209 million to repurchase 1,907,700 common shares; made payments of $51 million on long-term debt and capital lease obligations; and paid $21 million in cash dividends. The Company may repurchase its long-term debt and common stock from time to time. For additional information regarding Delta's common stock repurchase authorization, see Note 15 (page 46) of the Notes to Consolidated Financial Statements in Delta's 1997 Annual Report to Shareholders.
As of December 31, 1997, the Company had negative working capital of $1.24 billion, compared to negative working capital of $1.22 billion at June 30, 1997. A negative working capital position is normal for Delta and does not indicate a lack of liquidity. The Company expects to meet its current obligations as they become due through available cash, short-term investments and internally generated funds, supplemented as necessary by debt or equity financing and proceeds from sale and leaseback transactions.
At December 31, 1997, long-term debt and capital lease obligations, including current maturities, totaled $2.05 billion, compared to $2.10 billion at June 30, 1997. Shareholders' equity was $3.41 billion at December 31, 1997 and $3.01 billion at June 30, 1997. The Company's debt-to-equity position, including current maturities, was 38% debt and 62% equity at December 31, 1997, compared to 41% debt and 59% equity at June 30, 1997.
At December 31, 1997, there was outstanding $290 million principal amount of the Delta Family-Care Savings Plan's Series C Guaranteed Serial ESOP Notes (Series C ESOP Notes), which are guaranteed by Delta. The Series C ESOP Notes currently have the benefit of a credit enhancement in the form of a letter of credit in the amount of $450 million under Delta's Credit Agreement with ABN AMRO Bank and a group of banks (Letter of Credit Facility). Delta is required to purchase the Series C ESOP Notes in certain circumstances. For additional information regarding the Series C ESOP Notes and the Letter of Credit Facility, see Note 7 (page 38) of the Notes to Consolidated Financial Statements in Delta's 1997 Annual Report to Shareholders.
At December 31, 1997, the Company had $1.25 billion of credit available on a revolving basis under its 1997 Bank Credit Agreement, subject to certain conditions. Up to $700 million of this facility may be used for the issuance of letters of credit. At December 31, 1997, no borrowings or letters of credit were outstanding under the 1997 Bank Credit Agreement. See Note 2 of the Notes to Consolidated Financial Statements in this Form 10-Q for additional information regarding the 1997 Bank Credit Agreement.
At its meeting on January 22, 1998, Delta's Board of Directors declared a cash dividend of five cents per common share, payable March 1, 1998, to shareholders of record on February 11, 1998.
RESULTS OF OPERATIONS
For the quarter ended December 31, 1997, Delta recorded unaudited operating income of $332 million and net income of $190 million. For the quarter ended December 31, 1996, Delta recorded operating income of $227 million and net income of $125 million. The Company's operating margin (operating income divided by operating revenue) for the quarter ended December 31, 1997 was 9.7%, compared to 7.1% for the quarter ended December 31, 1996.
Operating revenues in the December 1997 quarter totaled $3.43 billion, an increase of 7% from $3.20 billion in the December 1996 quarter. Passenger revenue increased 7% to $3.13 billion, the result of a 3% increase in revenue passenger miles and a 4% increase in passenger mile yield. The increase in revenue passenger miles is mainly due to a 2% increase in capacity, favorable economic conditions and improved asset utilization. The increase in passenger mile yield is largely due to a domestic fare increase implemented during the September 1997 quarter and reduced promotional sale activities during the December 1997 quarter.
Cargo revenue increased 11% to $160 million. Cargo ton miles increased 15%, while the cargo ton mile yield declined 4%. The increase in cargo ton miles is mainly due to increased European and Asian imports, an increase in the average stage length related to freight shipments, and the continued use of competitive pricing strategies. The decrease in cargo ton mile yield is largely due to an increase in the average stage length related to freight shipments. All other revenue, net, increased 16% to $147 million, largely due to improved results from joint marketing programs and code share arrangements, and increased administrative service charges.
Operating expenses for the December 1997 quarter totaled $3.10 billion, an increase of 4% from the December 1996 quarter, and operating capacity increased 2% to 34.91 billion available seat miles. Salaries and related costs increased 6% primarily the result of a 6% increase in full-time equivalent employees and compensation and benefit enhancements for non-contract domestic employees, which became effective July 1, 1997. Aircraft fuel expense decreased 12% as the average fuel price per gallon decreased 14% to 61.97 cents, partially offset by a 2% increase in fuel gallons consumed. Passenger commissions decreased less than 1% as reduced costs related to a new travel agent commission rate structure implemented during the September 1997 quarter, were mostly offset by higher commissions associated with increased passenger revenue. Depreciation and amortization expense rose 21% mainly due to the acquisition of 28 additional aircraft since the December 1996 quarter, including the purchase of 10 B-727-200 aircraft which the Company had previously been operating under leases, and increased amortization of software development costs. Contracted services expense increased 15% largely due to higher information technology costs, as well as increased building and equipment maintenance costs. Other selling expenses increased 14% primarily the result of reduced spending on advertising during the post Olympic period in the December 1996 quarter and higher credit card transaction fees in the December 1997 quarter. Aircraft maintenance materials and outside repairs increased 22% largely due to the timing of scheduled maintenance visits and other costs resulting from the maturation of
the fleet. Passenger service expense increased 12% due to increased passenger traffic and an enhanced transatlantic business class product. Landing fees decreased 11% due to landing fee credits received in the December 1997 quarter and the realignment of certain international routes. Other operating expenses increased 3%, primarily due to higher professional fees and increased usage of miscellaneous supplies, partially offset by a decrease in accrued insurance costs.
Nonoperating expense in the December 1997 quarter totaled $19 million, compared to nonoperating expense of $22 million in the December 1996 quarter. The reduction in nonoperating expense is due to an increase in interest income resulting from higher levels of short-term investments and reduced interest expense due to lower levels of debt outstanding, partially offset by higher miscellaneous expense, net.
Pretax income of $313 million for the December 1997 quarter resulted in an income tax provision of $123 million. After a $3 million provision for preferred stock dividends, net income available to common shareholders was $187 million.
For the six months ended December 31, 1997, Delta recorded unaudited operating income of $763 million and net income of $443 million. For the six months ended December 31, 1996, the Company recorded operating income of $665 million and net income of $363 million. The Company's operating margin for the six months ended December 31, 1997 was 10.9%, compared to 10.0% for the six months ended December 31, 1996.
Operating revenues for the six months ended December 31, 1997 totaled $6.99 billion, an increase of 5% from $6.63 billion for the six months ended December 31, 1996. Passenger revenue increased 5% to $6.39 billion, reflecting a 4% increase in revenue passenger miles and a less than 1% increase in passenger mile yield. The increase in revenue passenger miles is mainly due to a 3% increase in capacity, favorable economic conditions, and improved asset utilization. The increase in passenger mile yield reflects a domestic fare increase implemented during the September 1997 quarter and reduced promotional sale activities during the December 1997 quarter, which were largely offset by the positive yield impact of the 1996 Centennial Olympic Games and the temporary expiration of the U.S. transportation excise tax in the six months ended December 31, 1996.
Cargo revenue increased 12% to $302 million. Cargo ton miles increased 19%, while cargo ton mile yield decreased 6%, largely due to the Company's utilization of more competitive pricing strategies and an increase in the average stage length related to freight shipments. The increase in cargo ton miles is also partly due to increased European and Asian imports. All other revenue, net increased 12% to $297 million, mainly due to improved results of joint marketing programs and increased administrative service charges.
Operating expenses for the six months ended December 31, 1997 totaled $6.22 billion, an increase of 4% compared to the six months ended December 31, 1996, and operating capacity increased 3% to 70.59 billion available seat miles. Salaries and related costs increased 7% primarily due to a 6% increase in full-time equivalent employees and compensation and benefit enhancements for non-contract domestic employees which became effective July 1, 1997. Aircraft fuel expense decreased 7% as the average fuel price per gallon decreased 10% to 60.93 cents, partially offset by a 3% increase in fuel gallons consumed. Passenger commissions decreased 3% as reduced costs related to a new travel agent commission rate structure implemented during the September 1997 quarter, were partially offset by higher commissions associated with increased passenger revenue. Depreciation and amortization expense rose 20% largely due to the acquisition of additional flight equipment and increased amortization of software development costs. Contracted services expense rose 9% largely due to higher information technology costs as well as building and equipment maintenance costs. Other selling expenses increased 2% mainly the result of higher credit card transaction fees, partially offset by lower advertising and promotion costs. Aircraft maintenance materials and outside repairs increased 18% largely due to the timing of scheduled maintenance visits and other costs associated with the maturation of the fleet. Passenger service expense increased 9% primarily the result of increased passenger traffic and an enhanced transatlantic business class product. Landing fees decreased 6% due to landing fee credits and the realignment of certain international routes. Other operating expenses increased 5% largely the result of higher professional fees and increased usage of miscellaneous supplies, partially offset by a decrease in accrued insurance costs.
Nonoperating expense for the six months ended December 31, 1997 totaled $33 million, compared to nonoperating expense of $62 million for the six months ended December 31, 1996. The reduction in nonoperating expense is due to the inclusion in the six month period ended December 31, 1996 of a $20 million payment to settle certain class action antitrust lawsuits filed by travel agents and $8 million in losses related to the voluntary repurchase and retirement of certain long-term debt. Additionally, the reduction in nonoperating expense is also due to higher interest income and lower interest expense in the six months ended December 31, 1997.
Pretax income of $730 million for the six months ended December 1997 resulted in an income tax provision of $287 million. After a $5 million provision for preferred stock dividends, net income available to common shareholders was $438 million.
For information regarding the Company's exposure to certain market risks, see "Market Risks Associated With Financial Instruments", (page 25) in Management's Discussion and Analysis of Financial Condition and Results of Operations, and Note 4 (page 36) of the Notes to Consolidated Financial Statements in Delta's 1997 Annual Report to Shareholders.
ARTHUR ANDERSEN LLP
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Delta Air Lines, Inc.:
We have reviewed the accompanying consolidated balance sheet of DELTA AIR LINES, INC. (a Delaware Corporation) AND SUBSIDIARIES as of December 31, 1997 and the related consolidated statements of operations for the three-month and six-month periods ended December 31, 1997 and 1996 and the condensed consolidated statements of cash flows for the six-month periods ended December 31, 1997 and 1996. These financial statements are the responsibility of the Company's management.
We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should be made to the financial statements referred to above for them to be in conformity with generally accepted accounting principles.
Arthur Andersen LLP
Atlanta, Georgia
January 30, 1998
PART II. OTHER INFORMATION
Under the Delta Air Lines, Inc. Directors' Deferred Compensation Plan (Plan), members of the Company's Board of Directors may defer for a specified period all or any part of their cash compensation earned as a director. A participating director may choose an investment return on the deferred amount from among the 17 investment return choices available under the Delta Family-Care Savings Plan, a qualified defined contribution pension plan for eligible Delta personnel. One of the investment return choices under the Delta Family-Care Savings Plan is a fund invested primarily in Delta's Common Stock (Delta Common Stock Fund). During the quarter ended December 31, 1997, participants in the Plan deferred a total of $39,500 in the Delta Common Stock Fund investment return choice (equivalent to approximately 332 shares of Delta Common Stock at prevailing market prices). These transactions were not registered under the Securities Act of 1933, as amended, in reliance on Section 4(2) of such Act.
Effective December 1, 1997, Thomas J. Roeck, Jr., Delta's former Senior Vice President-Finance and Chief Financial Officer, retired from the Company. A search is currently in progress to identify and recruit a successor. Edward H. West, Vice President - Financial Planning and Analysis, is serving as Delta's acting Chief Financial Officer. Mr. West joined Delta in 1994.
On October 24, 1996, the Company's shareholders approved two plans providing for the issuance of non-qualified stock options to substantially all of Delta's non-officer personnel in their individual capacity to purchase a total of 24.7 million shares of Delta Common Stock. One plan is for eligible Delta personnel who are not pilots (Nonpilot Plan); the other plan covers the Company's pilots (Pilot Plan).
The Nonpilot and Pilot Plans involve non-qualified stock options to purchase 14.7 million and 10 million shares of Delta Common Stock, respectively. The Plans provide for grants in three equal annual installments at an exercise price equal to the opening price of the Common Stock on the New York Stock Exchange on the grant date. Stock options awarded under the Plans are generally exercisable beginning one year, and ending 10 years, after their grant dates, and are not transferable other than upon the death of the person granted the stock options. Under the terms of the Plans, Delta granted eligible personnel non-qualified stock options to purchase a total of (1) 8.2 million shares of Common Stock at an exercise price of $69 per share on October 30, 1996; and (2) 8.2 million shares of Common Stock at an exercise price of $98 per share on October 30, 1997. The third grant date under the Nonpilot and Pilot Plans is scheduled to occur on October 30, 1998. As of December 31, 1997, the Company had issued 2,630,537 shares of Common Stock as a result of the exercises of stock options which were granted on October 30, 1996 and became exercisable on October 30, 1997.
On October 21, 1997, Delta and The Boeing Company (Boeing) entered into definitive aircraft purchase agreements under which Delta placed orders to purchase, and obtained options and rolling options to purchase, certain aircraft. On November 28,1997, Delta exercised options to purchase 10 B-777-200 aircraft and obtained 20 new options and 30 new rolling options for B-777-200 aircraft. For additional information regarding these agreements, see Note 3.
Flight Superintendents. On November 18, 1997, the Company entered into a new collective bargaining agreement with the Professional Airline Flight Control Association, the collective bargaining representative of the Company's approximately 190 flight superintendents. The new contract, which becomes amendable on January 1, 1999, replaces the agreement that would have become amendable on January 1, 1998.
Fleet Service Employees. On December 9, 1997, the National Mediation Board (NMB) dismissed an application filed by the Transport Workers Union of America (TWU) to represent for collective bargaining purposes an asserted craft or class consisting of Delta's approximately 10,000 "Fleet Service" employees. The NMB ruled that the TWU failed to support its application with authorizations from the required 35% of employees in the asserted craft or class.
Pilots. On May 1, 1996, the Company and the Air Line Pilots Association, International (ALPA) entered into a new collective bargaining agreement covering the rates of pay, rules and working conditions of the Company's approximately 8,600 pilots. The contract, which becomes amendable on May 2, 2000, provides in part (1) that if the Company operates an aircraft type (New Equipment) for which the rates of pay, rules and working conditions (collectively, the Pay Rates) are not set forth in the collective bargaining agreement, the Company and ALPA will negotiate the Pay Rates applicable to such New Equipment; (2) that pilots will fly such New Equipment whether or not Pay Rates for such equipment have been agreed upon; but (3) that the pilots' obligation to fly such New Equipment will not continue if Pay Rates have not been agreed upon for a period of six months after the Company places such New Equipment in operation.
The Company has placed orders to purchase the following aircraft types, each of
which constitutes New Equipment under the collective bargaining agreement:
B-737-600/700/800 aircraft; B-767-400 aircraft; and B-777-200 aircraft. Delta
plans to place these aircraft types in service shortly after their delivery,
which is expected to begin in September 1998, May 2000 and August 1999,
respectively. Additionally, the Company is negotiating to lease nine B-737-300
aircraft from a third party; these aircraft, which would also constitute New
Equipment under the collective bargaining agreement, are presently scheduled to
be placed in service beginning in May 1998.
In October 1997, the Company and ALPA began discussions on the Pay Rates applicable to B-737-600/700/800 aircraft and the nine B-737-300 aircraft that Delta is planning to lease. ALPA has announced plans to request pilots not to fly these aircraft types subsequent to the six month period after they are initially placed in service unless and until Pay Rates for these aircraft types have been agreed upon. Additionally, the Company's pilots have voted to authorize ALPA to assess pilots 1% of their gross pay for up to nine months to finance a contingency fund for pilots
who would have flown these aircraft. Discussions between the Company and ALPA are continuing. The outcome of these matters cannot presently be determined.
Delta and its representatives may make forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 from time to time, either orally or in writing, about the Company and its business. These forward-looking statements involve significant risks and uncertainties that could cause the actual results to differ materially from the projected results. It is not possible to list all of the many factors that could cause the actual results to differ materially from the projected results. Such factors may include, but are not limited to, (1) the airline pricing environment; (2) competitive actions taken by other airlines (3) general economic conditions; (4) changes in jet fuel prices; (5) actions by the United States and foreign governments; (6) the willingness of customers to travel; and (7) fluctuations in foreign currency exchange rates.
(a) Exhibits
3.2 Delta's By-Laws.
10.1 Employment Agreement dated as of August 14, 1997 between Delta
Air Lines, Inc. and Leo F. Mullin.
10.2 Agreement and General Release dated as of December 24, 1997
between Delta Air Lines, Inc. and Thomas J. Roeck, Jr.
10.3 Purchase Agreement No. 2022 between The Boeing Company and
Delta Air Lines, Inc. relating to Boeing Model
737-632/-732/-832 Aircraft.*
10.4 Purchase Agreement No. 2025 between The Boeing Company and
Delta Air Lines, Inc. relating to Boeing Model 767-432ER
Aircraft.*
10.5 Letter Agreements related to Purchase Agreement No. 2022
and/or No. 2025 between The Boeing Company and Delta Air
Lines, Inc.*
10.6 Aircraft General Terms Agreement AGTA-DAL between The Boeing
Company and Delta Air Lines, Inc. *
11. Statement regarding computation of per share earnings.
12. Statement regarding computation of ratio of earnings to fixed
charges.
15. Letter from Arthur Andersen LLP regarding unaudited interim
financial information.
27. Financial Data Schedule (For SEC use only).
(b.) Reports on Form 8-K:
During the quarter ended December 31, 1997, Delta did not file any
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Current Reports on Form 8-K.
* Portions of this exhibit have been omitted and filed separately with the Commission pursuant to Delta's request for confidential treatment.
Pursuant to the requirements 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.
By: /s/ Edward H. West
-------------------------------------
Edward H. West
Chief Financial Officer (Acting)
February 12, 1998
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EXHIBIT 3.2
DELTA AIR LINES, INC.
BY-LAWS
AS AMENDED
THROUGH
JANUARY 22, 1998
INCORPORATED
UNDER THE LAWS OF
DELAWARE
TABLE OF CONTENTS
BY-LAWS
ARTICLE SECTION SUBJECT PAGE
------- ------- ------- ----
I NAME, INCORPORATION AND LOCATION OF OFFICES.. 3
1.1 Name and Incorporation....................... 3
1.2 Location of Registered Agent and Offices..... 3
II CAPITAL STOCK................................ 3
2.1 Amount and Class Authorized.................. 3
2.2 Stock Certificates........................... 3
2.3 Transfer Agents and Registrars............... 4
2.4 Transfers of Stock........................... 4
2.5 Lost or Destroyed Certificates............... 4
2.6 No Preemptive Rights......................... 5
III MEETINGS OF STOCKHOLDERS..................... 5
3.1 Annual Meeting............................... 5
3.2 Special Meetings............................. 6
3.3 Notices of Meetings.......................... 6
3.4 Record Date.................................. 6
3.5 Quorum and Adjournment....................... 6
3.6 Voting Rights and Proxies.................... 7
3.7 Presiding Officer............................ 7
3.8 List of Stockholders Entitled To Vote........ 7
IV BOARD OF DIRECTORS........................... 7
4.1 Power and Authority.......................... 7
4.2 Number, Nomination and Election of Directors. 8
4.2.1 Eligibility, Tenure and Vacancies............ 8
4.3 Regular Meetings of the Board of Directors... 9
4.4 Special Meetings............................. 10
4.5 Committees Appointed by the Board............ 10
4.6 Meetings of Committees Appointed by the Board 10
4.7 Quorum and Voting............................ 11
4.8 Meeting by Conference Telephone.............. 11
4.9 Action Without Meeting....................... 11
4.10 Compensation................................. 11
V OFFICERS..................................... 11
5.1 Election, Qualification, Tenure and
Compensation................................. 11
5.2 Chief Executive Officer...................... 12
5.3 Chairman of the Board........................ 12
5.4 President.................................... 12
5.5 Vice Chairman of the Board................... 13
5.6 Absence or Disability of Chairman and 13
President....................................
5.7 Secretary.................................... 13
5.8 Assistant Secretaries........................ 13
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ARTICLE SECTION SUBJECT PAGE
------- ------- ------- ----
5.9 Comptroller................................. 14
5.10 Treasurer................................... 14
5.11 Assistant Treasurers........................ 14
5.12 Bonds....................................... 14
VI 6.1 CORPORATE SEAL.............................. 14
VII 7.1 FISCAL YEAR................................. 15
VIII DIVIDENDS................................... 15
8.1 $3 Par Value Common Stock................... 15
8.2 Record Date for Payment of Dividends........ 15
IX FINANCIAL TRANSACTIONS AND EXECUTION OF
INSTRUMENTS IN WRITING...................... 15
9.1 Depositories................................ 15
9.2 Withdrawals and Payments.................... 15
9.3 Evidence of Indebtedness and Instruments
under 16
Seal........................................
X BOOKS AND RECORDS........................... 16
10.1 Location.................................... 16
10.2 Inspection.................................. 16
XI TRANSACTIONS WITH OFFICERS AND DIRECTORS.... 16
11.1 Validation.................................. 16
XII 12.1 AMENDMENT, REPEAL OR ALTERATION............. 17
EMERGENCY BY-LAWS............................................ 18
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BY-LAWS OF
DELTA AIR LINES, INC.
AS AMENDED
THROUGH
JANUARY 22, 1998
ARTICLE I.
NAME, INCORPORATION AND LOCATION OF OFFICES
SECTION 1.1 NAME AND INCORPORATION.
The name of this corporation is DELTA AIR LINES, INC. It is incorporated
under the laws of Delaware in perpetuity.
SECTION 1.2 LOCATION OF REGISTERED AGENT AND OFFICES.
The name of the registered agent of the corporation is the Corporation
Trust Co., and its address and the address of the corporation's principal office
in Delaware is No. 100 West 10th Street, Wilmington, Delaware 19801. Said
registered agent and office may be changed as provided by the General
Corporation law of Delaware, as now or hereafter in effect.
The corporation may also have an office in Atlanta, Georgia, and may have
offices at such other places as the business of the corporation may require.
ARTICLE II.
CAPITAL STOCK
SECTION 2.1 AMOUNT AND CLASS AUTHORIZED.
Until otherwise provided by amendment to its Certificate of Incorporation,
the authorized capital stock of the corporation shall consist of 170,000,000
shares, of which 150,000,000 shall be common stock of the par value of $3.00
per share and 20,000,000 shall be preferred stock of the par value of $1.00 per
share. Shares of such authorized $3.00 par value common stock, in addition to
the shares now outstanding, up to the authorized maximum of 150,000,000 shares,
may be issued at such times, and from time to time, and may be sold for such
considerations, not less than the par value thereof, as shall be fixed and
determined by the board of directors. Shares of such authorized preferred stock
up to the authorized maximum of 20,000,000 shares may be issued at such times,
and from time to time, in such series and with such rights, including voting
rights, preferences, and limitations, and may be sold for such considerations,
not less than the par value thereof, as shall be fixed and determined by the
board of directors.
SECTION 2.2 STOCK CERTIFICATES.
Certificates evidencing the stock of the corporation shall be in such
forms as shall be authorized and approved by the board of directors. Such
certificates shall be signed by the chairman of the board, the president or a
vice president and by the secretary or an assistant secretary of the
corporation, and the seal of the corporation shall be affixed thereto. The seal
of the corporation and any or
all the signatures on such certificate may be facsimile engraved, stamped or
printed.
If any officer, transfer agent or registrar who has signed, or whose
facsimile signature has been used on, a certificate has ceased to be an
officer, transfer agent or registrar or if any officer who has signed has had a
change in title before the certificate is delivered, such certificate may
nevertheless be issued and delivered by the corporation as though the officer,
transfer agent or registrar who signed or whose facsimile signature shall have
been used had not ceased to be such officer, transfer agent or registrar or
such officer had not had such change in title.
SECTION 2.3 TRANSFER AGENTS AND REGISTRARS.
The board of directors may appoint transfer agents and co-transfer agents
and registrars and co-registrars for the stock of the corporation and, if it so
elects, may appoint a single agency to serve as both transfer agent and
registrar, and may require all certificates evidencing stock to bear the
signature or signatures of any of them.
SECTION 2.4 TRANSFERS OF STOCK.
Transfers of stock of the corporation shall be made only on the books of
the corporation by the registered holder thereof in person or by attorney
thereunto duly authorized in writing. Powers of attorney to transfer stock of
the corporation shall be filed with the duly authorized transfer agent of the
corporation, when appointed, and the certificates evidencing the stock to be
transferred shall be surrendered to such transfer agent for cancellation, and
shall be cancelled by it at the time of transfer.
Until transfer shall have been made as provided above, possession of a
certificate evidencing stock of the corporation shall not vest any ownership of
such certificate, or of the stock evidenced thereby, in any person other than
the person in whose name said stock stands registered on the books of the
corporation and the corporation shall be entitled to treat the holder of record
of any share or shares of stock as the holder thereof in fact and shall not be
bound to recognize any equitable or other claim to or interest in any such
share or shares on the part of any other person, whether or not it shall have
express or other notice thereof. Notwithstanding the foregoing, the corporation
shall have the power and is authorized to effect through the duly authorized
transfer agent and registrar or otherwise transfers of stock of the corporation
to various states or appropriate state authorities when applicable state laws
of escheat or abandonment so require.
SECTION 2.5 LOST OR DESTROYED CERTIFICATES.
In case of the loss or destruction of an outstanding certificate of stock,
another certificate for a like number of shares may be issued in place of the
lost or destroyed certificate upon proof satisfactory to the board of directors
or its delegate, and upon payment of the expenses, if any, incident to the
issuance of such new certificate; provided, however, that the board of
directors or its delegate, if it sees fit, may require that such lost or
destroyed certificate be established as by the laws of Delaware in such cases
made and provided, and further provided that, any provision of law to the
contrary notwithstanding, the board of directors or its delegate may require
the owner of such lost or destroyed certificate, or the legal representative of
such owner, to give the corporation a bond sufficient, in the opinion of the
board of directors or its delegate, to indemnify the corporation against and
hold it harmless from any and all loss, damage, liability and claims (whether
or not such claims be meritorious) on account of and with respect to such lost
or destroyed certificate
and the stock evidenced thereby and the issuance or establishment of such new certificate.
SECTION 2.6 NO PREEMPTIVE RIGHTS.
No holder of any stock of the corporation which shall at any time be
outstanding shall have any preemptive rights to subscribe for or purchase
additional shares of stock of the corporation of any class which at any time
may be authorized or issued.
ARTICLE III.
MEETINGS OF STOCKHOLDERS
SECTION 3.1 ANNUAL MEETING.
The annual meeting of stockholders shall be held on the fourth Thursday in
October of each year or at such other time as the board of directors shall
specify, at such place, either within or without the State of Delaware, as may
be designated by the board of directors from time to time, for the purpose of
electing directors and for the transaction of only such other business as is
properly brought before the meeting in accordance with these By-Laws.
To be properly brought before the meeting, business must be either (a)
specified in the notice of meeting (or any supplement thereto) given by or at
the direction of the board, (b) otherwise properly brought before the meeting
by or at the direction of the board, or (c) otherwise properly brought before
the meeting by a stockholder. In addition to any other applicable requirements,
for business to be properly brought before an annual meeting by a stockholder,
the stockholder must have given timely notice thereof in writing to the
secretary of the corporation. To be timely, a stockholder's notice shall be
delivered to or mailed and received at the principal executive offices of the
corporation not less than 90 days nor more than 120 days prior to the
anniversary date of the immediately preceding annual meeting of stockholders;
provided that if the board calls the annual meeting for a date that is not
within 30 days before or after such anniversary date, notice by the stockholder
to be timely must be so delivered or mailed and received not later than the
close of business on the 10th business day following the day on which the board
gave such notice or made such public disclosure of the date of the annual
meeting, whichever first occurs. Such stockholder's notice to the secretary
shall set forth as to each matter the stockholder proposes to bring before the
annual meeting (i) a brief description of the business desired to be brought
before the annual meeting and the reasons for conducting such business at the
annual meeting, (ii) the name and record address of the stockholder proposing
such business, (iii) the class and number of shares of capital stock of the
corporation which are beneficially owned by the stockholder, and (iv) any
material interest of the stockholder in such business.
Notwithstanding anything in the By-Laws to the contrary, no business shall
be conducted at the annual meeting except in accordance with the procedures set
forth in this Article III, provided, that nothing in this Article III shall be
deemed to preclude discussion by any stockholder of any business properly
brought before the annual meeting.
If business is not properly brought before the meeting in accordance with
the provisions of this Article III, the Presiding Officer at an annual meeting
shall so declare to the meeting and any such business not properly brought
before the meeting shall not be transacted.
SECTION 3.2 SPECIAL MEETINGS.
Special meetings of the stockholders shall be held at such times, and at
such places, either within or without the State of Delaware, as shall be
designated in the notice of call of the meeting, and may be called by the
chairman of the board or the president at any time and must be called by the
chairman of the board or the president whenever requested in writing by a
majority of the board of directors.
SECTION 3.3 NOTICES OF MEETINGS.
Written or printed notices of every annual or special meeting of the
stockholders shall be mailed to each stockholder of record at the close of
business on the record date hereinafter provided for, at the address shown on
the stock book of the corporation or its transfer agents, not less than ten nor
more than sixty days prior to the date of such meeting. Notices of special
meetings shall briefly state or summarize the purpose or purposes of such
meetings, and no business except that specified in the notice shall be
transacted at any special meeting. It shall not be necessary that notices of
annual meetings specify the business to be transacted at such annual meetings,
and any business of the corporation may be transacted at any annual meeting of
the stockholders to the extent not prohibited by applicable law, the
Certificate of Incorporation or these By-Laws.
SECTION 3.4 RECORD DATE.
It shall not be necessary to close the stock transfer books of the
corporation for the purpose of determining the stockholders entitled to notice
of and to participate in and vote at any meeting of the stockholders. In lieu
of closing the stock transfer books of the corporation, and for all purposes
that might be served by closing the stock transfer books, the board of
directors may fix and declare a date not less than ten days nor more than sixty
days prior to the date of any annual or special meeting as the record date for
the determination of stockholders entitled to notice of and to participate in
and vote at such meeting of the stockholders and any adjournment thereof; and
the corporation and its transfer agents may continue to receive and record
transfers of stock after any record date as so provided. In any such case, such
stockholders, and only such stockholders as shall have been stockholders of
record at the close of business on the record date shall be entitled to notice
and to participate in and vote at any such meeting of the stockholders,
notwithstanding any transfers of stock which may have been made on the books of
the corporation or its transfer agents after such record date.
SECTION 3.5 QUORUM AND ADJOURNMENT.
Except as otherwise provided or required by law, by the Certificate of
Incorporation or by these By-Laws, a quorum at any meeting of the stockholders
shall consist of the holders of shares representing a majority of the number of
votes entitled to be cast by the holders of all shares of stock then
outstanding and entitled to vote, present in person or by proxy. If a quorum is
not present at any duly called meeting, the Presiding Officer or the holders of
a majority of the votes present may adjourn the meeting from day to day, or to
a fixed date, without notice other than announcement at the meeting, but no
other business may be transacted until a quorum is present; provided, however,
that any meeting at which directors are to be elected shall be adjourned only
from day to day until such directors have been elected, and further provided
that those who attend the second of such adjourned meetings, although less than
a quorum as fixed hereinabove, shall nevertheless constitute a quorum for the
purpose of electing directors.
The stockholders present at a duly organized meeting at which a quorum is
present at the outset may continue to do business until adjournment,
notwithstanding the withdrawal of enough stockholders to result in less than a
quorum or the refusal of any stockholder present to vote.
The Presiding Officer may in his discretion defer voting on any proposed
action and adjourn any meeting of the stockholders until a later date, provided
such actions are otherwise permitted by law and are not inconsistent with the
Certificate of Incorporation or other provisions of these By-Laws.
SECTION 3.6 VOTING RIGHTS AND PROXIES.
At all meetings of stockholders, whether annual or special, the holder of
each share of common stock which is then outstanding and entitled to vote shall
be entitled to one vote for each share held and the holder of each share of any
series of preferred stock which is then outstanding shall be entitled to such
voting rights, if any, and such number of votes, as shall be specified in the
resolution or resolutions of the board of directors providing for the issuance
of such series. Stockholders may vote at all such meetings in person or by
proxy duly authorized in writing. All proxies shall be filed with the secretary
of the meeting before the meeting is called to order. Except as otherwise
specifically provided by law, by the Certificate of Incorporation or by these
By-Laws, a majority of the valid votes present shall be necessary and
sufficient to decide any question which shall come before any meeting of the
stockholders. In case of any challenge of the right of a given stockholder to
vote in person or by proxy, the Presiding Officer hereinafter provided for
shall be authorized to make the appropriate determination, and his decision
shall be final.
SECTION 3.7 PRESIDING OFFICER.
All meetings of the stockholders shall be presided over by the chairman of
the board or, in the absence or disability of the chairman, by the president,
or in his absence or disability, by the vice chairman, if any, or, in his
absence or disability, by the senior director (in terms of length of service on
the board of directors) present.
SECTION 3.8 LIST OF STOCKHOLDERS ENTITLED TO VOTE.
A complete list of the stockholders entitled to vote, arranged in
alphabetical order and indicating the number of shares held by each, shall be
prepared by the secretary and shall be available at the place where any
stockholders' meeting is being held, and shall be open to the examination of
any stockholder for any proper purpose during the whole of such meeting.
ARTICLE IV.
BOARD OF DIRECTORS
SECTION 4.1 POWER AND AUTHORITY.
All of the corporate powers of this corporation shall be vested in and the
business, property and affairs of the corporation shall be managed by, or under
the direction of, the board of directors; and the board of directors shall be,
and hereby is, fully authorized and empowered to exercise all of the powers of
the corporation and to do, and to authorize, direct and regulate the doing of,
any and all things which the corporation has the lawful right to do which are
not by statute, the Certificate of Incorporation or these By-Laws expressly
directed or required to be exercised or done by the stockholders.
SECTION 4.2 NUMBER, NOMINATION AND ELECTION OF DIRECTORS.
The board of directors shall consist of not less than five nor more than
nineteen directors who shall be stockholders of the corporation. The members of
the board of directors shall be elected by the stockholders at the annual
meeting of stockholders, or at a duly convened adjournment thereof or at a
special meeting of stockholders duly called and convened for that purpose,
provided, however, that only persons who are nominated in accordance with the
following procedures shall be eligible for election as directors. Nominations of
persons for election to the board of the corporation at the annual meeting or a
duly convened adjournment thereof may be made by or at the direction of the
board of directors, by any nominating committee or person appointed by the
board, or by any stockholder of the corporation entitled to vote for the
election of directors at the meeting or a duly convened adjournment thereof who
complies with the notice procedures set forth in this Article IV. Such
nominations, other than those made by or at the direction of the board, or by
any nominating committee or person appointed by the board, shall be made
pursuant to timely notice in writing to the secretary of the corporation. To be
timely, a stockholder's notice shall be delivered to or mailed and received at
the principal executive offices of the corporation not less than 90 days nor
more than 120 days prior to the anniversary date of the immediately preceding
annual meeting of stockholders; provided that if the board calls the annual
meeting for a date that is not within 30 days before or after such anniversary
date, notice by the stockholder to be timely must be so delivered or mailed and
received not later than the close of business on the 10th business day following
the day on which the board gave such notice or made such public disclosure of
the date of the meeting, whichever first occurs. Such stockholder's notice to
the secretary shall set forth (a) as to each person whom the stockholder
proposes to nominate for election or re-election as a director, (i) the name,
age, business address and residence address of the person, (ii) the principal
occupation or employment of the person, (iii) the class and number of shares of
capital stock of the corporation which are beneficially owned by the person and
(iv) any other information relating to the person that is required to be
disclosed in solicitations for proxies for election of directors pursuant to
Rule 14a under the Securities Exchange Act of 1934, as amended; and (b) as to
the stockholder giving the notice, (i) the name and record address of the
stockholder and (ii) the class and number of shares of capital stock of the
corporation which are beneficially owned by the stockholder. The corporation may
require any proposed nominee to furnish such other information as may reasonably
be required by the corporation to determine the qualifications of such proposed
nominee to serve as director of the corporation. No person shall be eligible for
election as a director of the corporation unless nominated in accordance with
the procedures set forth herein.
If a nomination is made that is not in accordance with the foregoing
procedure, the Presiding Officer at an annual meeting shall so declare to the
meeting and the defective nomination shall be disregarded.
SECTION 4.2.1 ELIGIBILITY, TENURE AND VACANCIES.
A nomination to serve as a director shall be accepted and votes cast for a
nominee shall be counted only if the secretary has received, at least thirty
days before the annual or a special meeting of stockholders, a statement signed
by the nominee advising that he or she consents to being a nominee and, if
elected, intends to serve as a director, and further provided that:
(a) Directors who are full-time employees of the company shall resign from
the board coincident with their retirement from full-time employment.
(b) The age limit for directors not covered by subparagraph (a), above, or who, after resigning from the board upon retirement from full-time employment are re-elected to the board, shall be seventy-two, and such directors shall retire from the board as of the date and time of the annual meeting of stockholders which next follows their attainment of age seventy-two; provided, however, that such directors originally elected to the board after November 1, 1981, shall retire from the board as of the date and time of the annual meeting of stockholders which next follows their attainment of age seventy. (c) The board may extend the retirement date for one year for any director who is serving as chairman of a committee of the board who will have occupied such chairmanship less than two years at the time of his or her normal retirement date, but this subparagraph (c) shall be effective only through October 22, 1992 and no extension shall be valid beyond that date. Each member of the board of directors shall hold office from the time of his election and qualification until the next annual meeting of the stockholders and until his successor shall have been elected and qualified; provided, however, that any member of the board of directors may be removed from such office by the stockholders at any time, with or without cause, at any meeting of the stockholders, duly called for such purpose, in which event a successor may be elected by the stockholders at such meeting or at any subsequent meeting of the stockholders duly called for such purpose. The number of members of the board of directors may be increased or decreased at any time and from time to time to not less than five nor more than nineteen members by resolution adopted by the board of directors and in such event, and in the event any vacancy on the board of directors shall occur by death, resignation, retirement, disqualification or otherwise, additional or successor members of the board of directors may be elected by majority vote of the remaining members of the board of directors present in person at any duly convened meeting of said board. Any director may resign at any time upon written notice to the corporation.
SECTION 4.3 REGULAR MEETINGS OF THE BOARD OF DIRECTORS.
The first organizational meeting of each newly-elected board shall be held
at such time and place, either within or without the State of Delaware, as shall
be fixed by the outgoing board of directors at its last regular meeting
preceding the annual meeting of the stockholders, and no notice of such meeting
shall be necessary to the newly-elected directors in order to constitute the
meeting legally, provided that a majority of the whole board shall be present,
and further provided that such newly-elected board may meet at such other place
and time as shall be fixed by the consent in writing of all of the said
directors.
At such organizational meeting the board, by a vote of a majority of all
of the members thereof, shall elect a chairman from among its members. The
chairman shall preside over all meetings of the board of directors, if present,
and shall have such other powers and perform such other duties as may be
assigned to him by the board from time to time. In his capacity as chairman of
the board he shall not necessarily be an officer of the corporation but he
shall be eligible to serve, in addition, as an officer pursuant to Section 5.1
of these By-Laws.
All meetings of the directors shall be presided over by the chairman of
the board or, in his absence or disability, by the chief executive officer of
the corporation if he is a member of the Board or, in his absence or
disability, by the president if he is a member of the Board or, in his absence
or disability, by the vice chairman, if any, or, in his absence or disability,
by the senior director (in terms of length of service on the board of
directors) present.
Regular meetings of the board of directors shall be held during the months
of January, April and July, on such dates and at such places as the board by
resolution or, failing such resolution, as the chairman of the board or, during his absence or disability, the president or the secretary of the corporation may determine, and if not previously specified in a board resolution, each director shall be advised in writing of the date, place and time of each such meeting at least two days in advance, unless such notice be waived in writing.
SECTION 4.4 SPECIAL MEETINGS.
Special meetings of the board of directors shall be held at such time and
place, within or without the State of Delaware, as shall be designated in the
call and notice of the meeting; and may be called by the chairman of the board,
or in his absence or disability by the president or the secretary of the
company, at any time, and must be called by the chairman, or in his absence or
disability by the president or the secretary of the corporation, whenever so
requested in writing by three or more members of the board. Notices of special
meetings shall be given to each member of the board not less than twenty-four
hours before the time at which each such meeting is to convene. Such notices
may be given by telephone or by any other form of written or verbal
communication. It shall not be necessary that notices of special meetings state
the purposes or the objects of the meetings, and any business which may come
before any duly called and convened special meeting of the board may be
transacted at such meeting.
The members of the board of directors, before or after any meeting of the
board, may waive notice thereof and, if all members of the board be present in
person at any meeting or waive notice of the meeting, the fact that proper
notice of the meeting was not given shall not in any way affect the validity of
the meeting or the business transacted at the meeting.
SECTION 4.5 COMMITTEES APPOINTED BY THE BOARD.
A majority of the whole board may from time to time appoint (a) committees
of the board, the membership of which shall consist entirely of board members
and (b) other committees, the membership of which may be either a mixture of
board and non-board members or entirely non-members of the board. All
committees so appointed shall elect a chairman and keep regular minutes of
their meetings and transactions and such minutes shall be accessible to all
members of the board at all reasonable times.
No such committee shall have the power or authority to amend the
Certificate of Incorporation (except that a committee may, to the extent
authorized in a resolution of the board of directors providing for the issuance
of shares of stock, fix the designations and any of the preferences or rights
of such shares relating to dividends, redemption, dissolution, any distribution
of assets of the corporation or the conversion into, or the exchange of such
shares for, shares of any other class or classes or any other series of the
same or any other class or classes of stock of the corporation or fix the
number of shares of any series of stock or authorize the increase or decrease
of the shares of any series); to adopt an agreement of merger or consolidation;
to recommend to the stockholders the sale, lease or exchange of all or
substantially all of the corporation's property and assets; to recommend to the
stockholders a dissolution of the corporation or a revocation of a dissolution;
to amend the By-Laws of the corporation; or, unless a resolution of the board
of directors, the By-Laws or the Certificate of Incorporation expressly so
provides, to declare a dividend or authorize the issuance of stock.
SECTION 4.6 MEETINGS OF COMMITTEES APPOINTED BY THE BOARD.
Meetings of any committee appointed by the Board shall be called by the
secretary or any assistant secretary of the corporation (or, in the case of
committees appointed by the board whose membership does not consist
exclusively of board members, by such employee of the corporation as has been designated pursuant to By-Law 5.7 to record the votes and the minutes of such committee) upon the request of the chairman of the committee, the chairman of the Board, the chief executive officer of the corporation, or any two members of the committee. Notice of each such meeting shall be given in the same manner specified in Section 4.4 for special meetings of the board of directors.
SECTION 4.7 QUORUM AND VOTING.
A majority of the members of the board of directors or of any committee
appointed by the board shall be present at any meeting of the board or such
committee in order to constitute a quorum, and a majority of the members
present at any duly constituted meeting of the board or such committee may
decide any question which properly may come before the meeting, unless a
different vote is specifically required by these By-Laws, the Certificate of
Incorporation or applicable law.
SECTION 4.8 MEETING BY CONFERENCE TELEPHONE.
Members of the board of directors or any committee appointed by the board
may participate in a meeting by means of conference telephone or similar
communications equipment whereby all persons participating in the meeting can
hear each other, and participation in such meeting in such manner shall
constitute presence in person at such meeting.
Notwithstanding the notice provisions of Sections 4.3, 4.4 and 4.6 above,
participation in a meeting by means of conference telephone by a member of the
board of directors or a committee appointed by the board shall constitute
waiver of notice of the meeting by such director.
SECTION 4.9 ACTION WITHOUT MEETING.
Any action required or permitted to be taken at any meeting of the board of
directors or any committee appointed by the board may be taken without a
meeting if all of the directors or all of the members of such a committee, as
the case may be, consent thereto in writing and the writing or writings are
filed with the minutes of proceedings of the board of directors or of such
committee.
SECTION 4.10 COMPENSATION.
A director shall receive such reasonable compensation for his services as
a director or as a member of a committee appointed by the board of directors
(including service as chairman of the board or as chairman of a committee of
the board) as may be fixed from time to time by the board of directors and
shall be reimbursed for his reasonable expenses, if any, in attending any
meeting of the board of directors or such a committee. A director shall not be
barred from also serving the corporation in any other capacity and receiving
reasonable compensation therefor.
ARTICLE V.
OFFICERS
SECTION 5.1 ELECTION, QUALIFICATION, TENURE AND COMPENSATION.
The officers of the corporation shall be elected by the board of
directors and shall include a president, one or more vice presidents (one or
more of whom may be designated as an executive vice president or senior vice
president), a secretary, a comptroller, a treasurer and such other officers,
including a vice chairman, as from time to time the board of directors shall
deem necessary or desirable. At the discretion of the board, the chairman of
the board may also be elected under the same title as an officer of the
corporation.
The chairman of the board and president (and the vice chairman, if any)
shall be, and the other officers may be but need not be, members of the board
of directors and stockholders.
Unless otherwise provided by the board of directors, each officer shall
hold office from the time of his election until his successor shall have been
elected and qualified, provided, however (except as otherwise provided in a
contract duly authorized by the board of directors), any officer may be removed
from office by the board of directors at any time, with or without cause, and
any officer may resign at any time upon written notice to the corporation. Any
two offices may be united in any one person, provided that no person shall act
in more than one capacity in any one transaction.
The compensation of all officers shall be fixed and determined by the board
of directors or pursuant to its delegated authority.
From time to time the board of directors, or its delegates, may appoint
such other agents, for such terms and with such rights, powers and authorities,
on such conditions, subject to such limitations and restrictions and at such
compensation as shall seem right and proper to it or them, and any such agent
may be removed from office by the board of directors or its delegates at any
time, with or without cause.
SECTION 5.2 CHIEF EXECUTIVE OFFICER.
From time to time the board of directors shall designate by resolution
either the chairman of the board, if elected as an officer of the corporation,
or the president to act as the chief executive officer of the corporation. The
chief executive officer shall have responsibility for the active and general
management of the corporation and such authorities and duties as are usually
incident to the office of chief executive officer and as from time to time
shall be specified by the board of directors. He shall prescribe the duties of
all subordinate officers, agents and employees of the company to the extent not
otherwise prescribed by the Certificate of Incorporation, the By-Laws or the
board of directors. Such designation shall continue in full force and effect
until modified or rescinded by further resolution of the board.
SECTION 5.3 CHAIRMAN OF THE BOARD.
The chairman of the board shall preside over all meetings of the board of
directors and the stockholders of the corporation. He shall have such other
authorities and duties as are usually incident to the office of chairman of the
board and as from time to time shall be specifically directed by the board of
directors. Except where by law the signature of the president is required, the
chairman of the board shall possess the same power as the president to sign all
certificates, contracts and other instruments of the corporation which may be
authorized by the board of directors. During the absence or disability of the
president, if the chairman has been elected as an officer of the corporation he
shall exercise all of the powers and discharge all of the duties of the
president. If the chairman has not been elected as an officer of the
corporation, then the provisions of Section 5.6 shall apply.
SECTION 5.4 PRESIDENT.
Subject to the powers and duties hereinbefore delegated to the chairman of
the board, and to the powers and duties hereinbefore delegated to the chief
executive officer if the chairman of the board is designated by the board of
directors to act as chief executive officer, the president shall direct the
operations of the company. He shall have such other authorities and duties as are usually incident to the office of president and as, from time to time, shall be specifically directed by the board of directors. During the absence or disability of the chairman, the president shall exercise all of the powers and discharge all of the duties of the chairman.
SECTION 5.5 VICE CHAIRMAN OF THE BOARD.
The vice chairman of the board, if any, who shall be an officer of the
corporation, shall have such specific powers, duties and authority, and shall
perform such administrative and executive duties as, from time to time, may be
assigned by the board of directors, or the chief executive officer.
SECTION 5.6 ABSENCE OR DISABILITY OF CHAIRMAN AND PRESIDENT.
In the absence or disability of both the chairman of the board if
he has been elected an officer of the corporation, and the president, or in the
absence or disability of the president if the chairman has not been elected as
an officer of the corporation, the vice chairman, if any, or if there is no
vice chairman, an officer previously designated in writing by the chief
executive officer or, in the absence of such designation, an officer designated
by the board of directors, shall exercise all of the powers and discharge all
of the duties of the said officer or officers until one or both return to
active duty or until the board of directors authorizes another person or
persons to act in their capacities.
SECTION 5.7 SECRETARY.
The secretary or an assistant secretary shall record the votes and the
minutes, in books to be kept for that purpose, of all meetings of the
stockholders, of the board of directors, and of those committees of the board
of directors whose membership is confined to members of the board, provided,
however, that in the absence of the secretary and the assistant secretaries the
chairman of any such meeting may designate another officer of the company to
act as secretary of that meeting. Any employee of the corporation may be
designated by committees which are appointed by the board, but whose membership
is not confined to members of the board, to record the votes and minutes of the
proceedings of such committees in books to be kept for that purpose. The
secretary or an assistant secretary shall give or cause to be given, notice of
all meetings of the stockholders, the board of directors and committees of the
board of directors. The secretary and assistant secretaries shall keep in safe
custody the seal of the corporation and shall affix the same to any instrument
requiring it and, when required, it shall be attested by his signature or by
the signature of an assistant secretary. In the absence or disability of the
secretary and all assistant secretaries, the seal may be affixed and the
instrument attested by any vice president. The secretary also shall perform
such other duties as may be assigned to him by the board of directors, or the
chief executive officer.
SECTION 5.8 ASSISTANT SECRETARIES.
In the absence or disability of the secretary, an assistant secretary, if
specifically designated and directed by the chairman of the board or the
president, shall perform the prescribed duties and functions of the secretary.
The assistant secretaries also shall have such specific powers and authorities
and shall perform such other duties and functions as from time to time may be
assigned by the board of directors, or the chief executive officer.
SECTION 5.9 COMPTROLLER.
The comptroller shall cause to be kept full and accurate books and
accounts of all assets, liabilities and transactions of the corporation. The
comptroller shall establish and administer an adequate plan for the control of
operations, including systems and procedures required to properly maintain
internal controls on all financial transactions of the corporation. The
comptroller shall prepare, or cause to be prepared, statements of the financial
condition of the corporation and proper profit and loss statements covering the
operations of the corporation and such other and additional financial
statements, if any, as the chief executive officer or the board of directors
from time to time shall require. The comptroller also shall perform such other
duties as may be assigned to him by the board of directors, or the chief
executive officer.
SECTION 5.10 TREASURER.
The treasurer shall be responsible for the custody and care of all the
funds and securities of the corporation and shall cause to be kept full and
accurate books and records of account of all receipts and disbursements of the
corporation. The treasurer shall cause all money and other valuable effects of
the corporation to be deposited in the name and to the credit of the
corporation in such depositories as shall be designated from time to time by
the board of directors. He shall disburse the funds of the corporation as may
be ordered by the board of directors, or the chief executive officer. The
treasurer also shall perform such other duties as may be assigned to him by the
board of directors, or the chief executive officer.
SECTION 5.11 ASSISTANT TREASURERS.
In the absence or disability of the treasurer, an assistant treasurer, if
any, or any other officer of the corporation, if specifically designated and
directed by the chairman of the board or the president, shall perform the
prescribed duties and functions of the treasurer. Any such assistant treasurer
also shall have such specific powers and authorities and shall perform such
other duties and functions as from time to time shall be assigned by the board
of directors, or the chief executive officer of the corporation.
SECTION 5.12 BONDS.
Any officer or agent of the corporation shall furnish to the corporation
such bond or bonds, with security for the faithful performance of his duties,
as from time to time may be required by the board of directors.
ARTICLE VI.
CORPORATE SEAL
SECTION 6.1 CORPORATE SEAL.
The corporate seal shall have inscribed thereon the name of the
corporation, the word "SEAL" and the word "Delaware". Said seal may be used by
causing it or a facsimile thereof to be impressed or affixed or reproduced or
otherwise.
ARTICLE VII.
FISCAL YEAR
SECTION 7.1 FISCAL YEAR.
The fiscal year of the corporation shall commence on the first day of July
of each year and shall end on the thirtieth day of June of the next following
year.
ARTICLE VIII.
DIVIDENDS
SECTION 8.1 $3 PAR VALUE COMMON STOCK.
Dividends may be paid on the $3 par value common stock of the corporation
in such amounts and at such times as the board of directors shall
determine.
SECTION 8.2 RECORD DATE FOR PAYMENT OF DIVIDENDS.
It shall not be necessary to close the stock transfer books of the
corporation for the purpose of determining the stockholders entitled to receive
payment of any dividend on the stock of the corporation; but in lieu of closing
the stock transfer books, and for all purposes that might be served by closing
the stock transfer books, the board of directors, in declaring any dividend on
the common stock, shall fix either the date on which the dividend is declared
or a date between that date and the date on which the dividend is to be paid as
the record date for determining stockholders entitled to receive payment of
said dividend; and the corporation and its transfer agents may continue to
receive and record transfers of stock after the record date so fixed and
determined but, in any such case, such stockholders and only such stockholders
as shall have been stockholders of record at the close of business on the
record date so fixed and determined by the board of directors shall be entitled
to receive payment of said dividend, notwithstanding any transfer of any stock
which may have been made on the books of the corporation or its transfer agents
after said record date.
ARTICLE IX.
FINANCIAL TRANSACTIONS AND EXECUTION OF
INSTRUMENTS IN WRITING
SECTION 9.1 DEPOSITORIES.
The funds and securities of the corporation shall be deposited, in the
name of and to the credit of the corporation, in such banks, trust companies
and other financial institutions as shall from time to time be determined and
designated by the board of directors or its delegate.
SECTION 9.2 WITHDRAWALS AND PAYMENTS.
All checks and orders for the withdrawal or payment of funds of the
corporation, shall be signed in the name of the corporation in such manner and
form and by such officer, officers or other employees as from time to time may
be authorized and provided by the board of directors or its delegate. Facsimile
signatures may be used when authorized by the board or its delegate.
It shall be the duty of the secretary, an assistant secretary or the corporation's official in charge of internal auditing to certify to the designated depositories of the funds and securities of the corporation the names and signatures of the officers and other employees of the corporation who, from time to time, are authorized to sign checks, drafts or orders for the withdrawal of funds and/or securities. No check, drafts or order for the withdrawal or payment of funds of the corporation shall be signed in blank.
SECTION 9.3 EVIDENCE OF INDEBTEDNESS AND INSTRUMENTS UNDER SEAL.
Unless otherwise authorized by the board of directors, all notes,
bonds, and other evidences of indebtedness of the corporation, and all deeds,
indentures, contracts and other instruments in writing required to be executed
under the seal of the corporation, shall be signed in the name and on behalf of
the corporation by the chairman of the board, the president, the vice chairman,
if any, or a vice president of the corporation and shall be attested by the
secretary or an assistant secretary.
ARTICLE X.
BOOKS AND RECORDS
SECTION 10.1 LOCATION.
The books, accounts and records of the corporation, except as may be
otherwise required by the laws of the State of Delaware, may be kept outside of
the State of Delaware, at such place or places as the board of directors may
from time to time appoint.
SECTION 10.2 INSPECTION.
Except as otherwise required by law, the board of directors or its
delegate shall determine whether and to what extent the books, accounts and
records of the corporation, or any of them other than the stock books, shall be
open to the inspection of the stockholders.
ARTICLE XI.
TRANSACTIONS WITH OFFICERS AND DIRECTORS
SECTION 11.1 VALIDATION.
Contracts and all other transactions, including but not limited to
purchases and sales, by and between this corporation and one or more of its
officers or directors, or by and between this corporation and any firm,
partnership, association or corporation of which one or more of the officers or
directors of this corporation shall be members, partners, officers or directors
or in which one or more of the officers or directors of this corporation shall
be interested, shall be valid, binding and enforceable, and shall not be
voidable by this corporation or its stockholders notwithstanding the
participation of any such interested director in any meeting of the board of
directors of this corporation at which such contract or other transaction shall
be considered, acted upon or authorized, and notwithstanding the participation
of any such interested officer or director in the making or performance of such
contract or transaction, if the
material facts of such interest shall be disclosed to or be known by the members of the board of directors of this corporation who shall be present at the meeting of said board at which such contract or transaction, and such participation therein, shall be authorized or approved and if the board in good faith authorizes the contract or transaction by the affirmative votes of a majority of the disinterested directors, even though the disinterested directors be less than a quorum.
ARTICLE XII.
AMENDMENT, REPEAL OR ALTERATION
SECTION 12.1 AMENDMENT, REPEAL OR ALTERATION.
These By-Laws may be amended, repealed or altered, in whole or in part, by
a majority of the valid votes cast at any duly convened regular annual meeting
of the stockholders or at any duly convened special meeting of stockholders
when such object shall have been announced in the call and notice of the
meeting. These By-Laws also may be amended, repealed or altered by vote of a
majority of the whole board of directors at any duly convened meeting of the
board of directors; provided, however, that any such action of the board of
directors may be repealed by the stockholders. The repeal of any such action of
the board of directors by the stockholders, however, shall not invalidate or in
anywise affect the validity of any act or thing done in reliance upon said
action of the board of directors.
EMERGENCY BY-LAWS
ADOPTED OCTOBER 27, 1967
Subject to repeal or change by the stockholders, and notwithstanding any
different provision contained in the Delaware Corporation Law or in the
Certificate of Incorporation or By-Laws of this corporation, the following
emergency by-laws shall be operative in any emergency arising from an attack on
the United States or on a locality in which the corporation conducts its
business or customarily holds meetings of its board of directors or
stockholders, or during any atomic or nuclear disaster or during the existence
of any catastrophe or other similar emergency condition as a result of which a
quorum of the board of directors cannot readily be convened for action.
1. In the event of emergency or disaster as described above, an
emergency board of directors shall forthwith assume direction and control
of the affairs of the corporation.
2. Such emergency board of directors shall consist of all living
directors, and meetings of the emergency board may be called by the
chairman of the board, the president, the vice chairman or the secretary
or, in the event of the death or inability of any of the four to act, by
any surviving director with the capacity and ability to act.
3. To the extent possible, notice of emergency board meetings shall be
given in each instance to each known living member of the board at his
last known business address, either orally or in writing delivered
personally or by mail, telegraph, telephone or radio, or by publication;
provided however, that if notice by such means is impossible insofar as
specific individual directors are concerned, then the person calling the
meeting shall give such directors such notice as is reasonably possible
under the circumstances.
4. At any properly called meeting of the emergency board a quorum
shall not be necessary, and the acts of a majority of the members of the
emergency board present shall be and shall constitute the acts of the
emergency board.
5. During its existence, the emergency board shall have the following
powers: (a) To appoint officers and agents of the corporation and to
determine their compensation and duties; (b) To borrow money and to issue
bonds, notes or other obligations and evidence of indebtedness therefor;
(c) To determine questions of general policy with respect to the business
of the corporation; (d) To call stockholders' meetings; and (e) To take
all actions and to do all things necessary to preserve the corporation as
an operating entity, and to direct and control its affairs and operations,
until the regular board of directors has been reconstituted, either by the
passage of time, by action of the stockholders, or otherwise in accordance
with law.
6. No officer, director or employee acting in accordance with these
emergency by-laws shall be liable to the corporation or its stockholders
with respect to action taken under power granted herein except for willful
misconduct.
7. As soon as reasonably possible following the creation of an
emergency board of directors, if it appears clear that such action is
required because of the number of directors killed or indefinitely
incapacitated, the emergency board shall call a regular or special meeting
of the stockholders of the corporation for the election of a new board of
directors, or otherwise to reconstitute the board, and upon the election
and qualification or reconstitution of such board, the emergency board
established pursuant to these emergency by-laws shall cease and terminate
and the direction and control of the affairs of the corporation shall vest
in such new or reconstituted board of directors.
8. To the extent not inconsistent with these emergency by-laws, the
regular by-laws of the corporation shall remain in effect during the
emergency.
EXHIBIT 10.1
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT dated as of August 14, 1997 (the "Effective Date") by and between Delta Air Lines, Inc., a Delaware corporation (the "Company"), and Leo F. Mullin ("Executive").
WHEREAS, the Board of Directors of the Company (the "Board") desires to employ Executive as President and Chief Executive Officer of the Company, and Executive desires to accept such employment; and
WHEREAS, the Company and Executive desire to enter into an agreement (this "Agreement") embodying the terms of such employment;
NOW THEREFORE, in consideration of the mutual covenants and agreements of the parties set forth in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, agree as follows (certain capitalized terms used herein being defined in Article 9):
ARTICLE 1
TERM OF AGREEMENT
SECTION 1.01. Initial Term. The term of this Agreement shall commence on the Effective Date and shall expire on the fifth anniversary thereof (such term, together with any extension pursuant to Sections 1.02 or 1.03, referred to hereinafter as the "Agreement Term").
SECTION 1.02. Extensions. As of the fifth anniversary of the Effective Date (provided Executive's employment with the Company has not been previously terminated under Article 4), the Agreement Term shall automatically be extended unless, at least twelve months prior to such anniversary, the Company has provided Executive with written notice of the Company's intent that the Agreement Term not be so extended. If such notice has not been timely provided by the Company, the Agreement Term shall, as of such fifth anniversary, be extended until the expiration of twelve months from the date the Company shall have provided Executive with written notice of the Company's intent that the Agreement Term be terminated.
SECTION 1.03. Automatic Extension Upon Change in Control. In the event that a Change in Control occurs during the Agreement Term as then in effect, upon the effective date of such Change in Control the Agreement Term shall automatically be extended by such period, if any, such that after such extension the Agreement Term shall not be less than 36 months following the effective date of such Change in Control (such 36-month period referred to hereinafter as the "Change Period"). The 36-month extension described in this Section 1.03 shall take effect regardless of whether, before or after the effective date of a Change in Control, the Company has given written notice of intent not to extend the Agreement Term pursuant to Section 1.02, provided the Agreement Term has not yet expired as of such effective date.
ARTICLE 2
POSITION; DUTIES
SECTION 2.01. Position. Commencing as of the Effective Date, the Company shall employ Executive as President and Chief Executive Officer of the Company. In addition, the Company shall use its best efforts to ensure Executive's election as a member of the Board. Executive shall have such duties and authority as shall be determined from time to time by the Board; provided that such duties shall be consistent with the positions assigned to him pursuant to this Section 2.01.
SECTION 2.02. Performance of Duties. While Executive is employed by the Company hereunder, Executive shall devote substantially all of his business time and best efforts to the business and affairs of the Company and the performance of his duties under this Agreement. Subject to the foregoing, Executive shall not be precluded from (i) continuing to serve on such boards of directors of business corporations and/or charitable organizations as to which the Board shall have given its prior written consent, which consent shall not be withheld unreasonably; provided, however, that such consent shall not be necessary with respect to Executive's continued service on the board of directors of Inland Steel Industries, Inc.; (ii) engaging in community affairs or charitable activities (other than serving on the boards of directors of charitable organizations, as to which clause (i) shall control), and (iii) managing his personal investments and affairs.
ARTICLE 3
COMPENSATION
SECTION 3.01. Base Salary. While Executive is employed by the Company hereunder, the Company shall pay Executive a base salary (the "Base Salary") at the annual rate of not less than $650,000, payable in accordance with the usual payment practices of the Company. Executive's Base Salary shall be subject to review for increase annually and Executive shall be entitled to such increases in his Base Salary, if any, as may be determined from time to time in the sole discretion of the Personnel & Compensation Committee of the Board (the "Compensation Committee").
SECTION 3.02. Incentive Compensation Awards. (a) With respect to each Fiscal Year beginning with the Fiscal Year ending June 30, 1998 during which Executive is employed hereunder, Executive shall be eligible to receive in addition to his Base Salary an annual incentive compensation award (the "Annual Award") for services rendered during such Fiscal Year, subject to the terms and conditions of the Company's annual incentive compensation plan as in effect from time to time. Except as provided below, the amount of the Annual Award, if any, with respect to any Fiscal Year shall be based upon performance targets and award levels determined by the Compensation Committee in its sole discretion, in accordance with the Company's annual incentive compensation plan as in effect from time to time; provided that for each Fiscal Year the target award levels with respect to Executive shall be established in such a manner as to provide Executive with the opportunity to earn an award of at least 100% of his Base Salary for such Fiscal Year, assuming performance at the target level, with a maximum award opportunity of 125% of Base Salary for such Fiscal Year.
(b) Notwithstanding the foregoing, with respect to the Fiscal Year ending June 30, 1998, Executive shall receive an Annual Award of not less than $650,000 payable at the same date as annual awards are paid to the senior executives of the Company in accordance with the practices of the Company in effect for such Fiscal Year, unless Executive's employment hereunder shall have been terminated by the Company for Cause prior to such date; provided, that if Executive's employment terminates for any other reason prior to June 30, 1998, such minimum amount shall be reduced by multiplication by a fraction, the numerator of which is the number of days from August 14, 1997 through the date of termination of Executive's employment, and the denominator of which is the number of days from August 14, 1997 through June 30, 1998.
(c) In addition to the Annual Awards described above, Executive shall be eligible to receive such additional bonuses as may be awarded by the Compensation Committee in its sole discretion.
SECTION 3.03. Employee Benefits. While Executive is employed by the Company hereunder, Executive (and, to the extent applicable, his eligible family members, as defined in the applicable plan or policy) shall be entitled to participate (or to receive benefits equivalent to such participation), on terms no less favorable than the terms offered to other senior executives of the Company, in any group and/or executive life, hospitalization or disability insurance plan, health program, vacation policy, pension, profit sharing, ESOP, 401(k) and similar benefit plans (qualified, non-qualified and supplemental) and other fringe benefits of the Company, including free and reduced-rate travel, automobile allowance, club memberships and dues, and similar programs as in effect from time to time. The Company shall reimburse Executive for (A) the cost of premiums paid by him to obtain health insurance coverage from his former employer under COBRA during any applicable waiting period or preexisting condition limitation period under the Company's medical benefit plans, plus (B) an additional amount such that after payment by Executive of Executive's applicable Federal, state and local taxes imposed on such additional amount, Executive will retain an amount sufficient to pay the total of Executive's applicable Federal, state and local taxes arising due to the payments made pursuant to clause (A) above.
SECTION 3.04. Supplemental Pension Benefits. Executive shall be entitled to receive from the Company a supplemental retirement benefit (the "Supplemental Retirement Benefit") as described in Section 3 of the Senior Officer Excess Benefit Agreement (the "Excess Benefit Agreement") attached as Exhibit A to this Agreement, payable upon the terms and conditions set forth in such Excess Benefit Agreement. All benefits provided under the Excess Benefit Agreement shall be taken into account in determining the Company's compliance with the requirements of this Agreement.
SECTION 3.05. Relocation Benefits. The Company will pay all costs of relocation of Executive and his family to the Atlanta metropolitan area in accordance with the Company's relocation policy, supplemented as follows:
(a) The Company will reimburse Executive for reasonable temporary living expenses for Executive and his family in the Atlanta metropolitan area for a period not to exceed one year from the date hereof;
(b) At the election of Executive prior to August 14, 1998, the Company will purchase from Executive his primary residence as of the date hereof (the "Current Residence"). If Executive so elects, the purchase price will be equal to the average of the estimates of the fair market value of the Current Residence as determined, within thirty days of such election, by two reputable and independent professional real estate appraisers (one of which appraisers shall be selected by Executive, and one of which shall be selected by the Company);
(c) The Company will reimburse Executive for architectural fees incurred and paid to Konstant Architecture in connection with proposed improvements to the Current Residence; and
(d) The Company will pay Executive, in addition to all relocation payments otherwise required pursuant to this Section 3.05, an amount such that after payment by Executive of all of Executive's applicable Federal, state and local taxes on such additional amount, Executive will retain an amount sufficient to pay the total of Executive's applicable Federal, state and local taxes arising due to the payments under this Section 3.05.
SECTION 3.06. Business Expenses. The Company shall reimburse promptly such of Executive's travel, entertainment and other business expenses as are reasonably and necessarily incurred by Executive in the performance of his duties while employed hereunder, in accordance with the Company's policies as in effect from time to time.
SECTION 3.07. Stock Incentive Awards. In addition to the initial awards of stock options and restricted stock which are described in the respective award agreements attached hereto as Exhibits B and C, Executive shall be eligible to receive such additional equity-based incentive awards, including additional options and restricted stock awards, as may be granted by the Compensation Committee in its sole discretion.
ARTICLE 4
TERMINATION OF EMPLOYMENT
SECTION 4.01. Without Cause; For Good Reason. In the event that Executive's employment is terminated during the Agreement Term, other than by reason of death, (i) by the Company other than for Cause or Disability or (ii) by Executive with Good Reason, Executive shall be entitled to receive from the Company the benefits described in Paragraphs (a) through (f) below (the "Severance Benefits"):
(a) The Company shall pay Executive a lump sum, in cash, equal to Executive's earned but unpaid Base Salary and other earned but unpaid cash entitlements for the period through and including the date of termination of Executive's employment, including unused earned and accrued vacation pay and unreimbursed business expenses. In addition, with respect to the period through and including the date of termination of Executive's employment, Executive shall be entitled to any other benefits earned or accrued and payable under any other employee benefit plans and arrangements maintained by the Company, in accordance with the terms of such plans and arrangements, except as modified
herein (such amounts and benefits described in this Paragraph (a) referred to hereinafter as the "Accrued Benefits").
(b) The Company shall pay Executive a lump sum, in cash, equal to two times the sum of Executive's Reference Salary and Reference Incentive Compensation Award.
(c) The Company shall pay Executive a lump sum, in cash, equal to the amount of his Annual Award payable for the Fiscal Year in which occurs the termination of his employment, calculated assuming performance at the target level and prorated to reflect the portion of such Fiscal Year elapsed through the date of termination of his employment. The amount of the payment under this Paragraph (c) shall be reduced by the amount, if any, previously paid with respect to such Fiscal Year under 5.02(i).
(d) Executive (and, to the extent applicable, his eligible family members) shall continue to be eligible, for 24 months from the date of such termination of Executive's employment, to participate in the benefit plans and fringe benefits (other than any qualified or nonqualified retirement plans) in which Executive and his eligible family members were entitled to participate under Section 3.03 immediately prior to termination of Executive's employment. If such continued participation is not permitted under the terms of one or more of the applicable benefit plans and programs, the Company shall, in lieu of continued participation as to those benefits, pay Executive a lump sum, in cash, equal to the present value (as of the date of the termination of his employment) of such continued participation. In determining present value for this purpose, all terms applicable to Executive under such benefit plans and fringe benefits immediately prior to the date of termination of his employment (including the level of premiums, if any, payable by Executive) shall be taken into account.
(e) On and after the second anniversary of such termination of Executive's employment, he shall be treated as a retired senior executive of the Company for purposes of all benefit plans and arrangements of the Company (other than retirement plans) providing for retiree benefits. For purposes of determining any service-related premiums owed by Executive with respect to any such retiree benefits, all years of service with which Executive is credited for purposes of calculating the Supplemental Retirement Benefit shall be taken into account. If such participation is not permitted under the terms of one or more of the applicable benefit plans and programs, the Company shall, in lieu of such participation as to those benefits, pay Executive a lump sum, in cash, equal to the present value (as of the second anniversary of the termination of his employment) of such participation. In determining present value for this purpose, all terms
applicable to Executive under such retiree benefit plans (including the level of premiums, if any, payable by Executive) shall be taken into account.
(f) Executive's right to the Supplemental Retirement Benefit shall become fully vested as of the date of termination of his employment. In addition, Executive shall be credited with two additional years of service credit (beyond those otherwise required to be credited under the Excess Benefit Agreement) for purposes of calculating the Supplemental Retirement Benefit.
The Severance Benefits (other than those described in Paragraph (f) and the first sentence of each of Paragraphs (d) and (e) above) shall be paid or provided to Executive as soon as practicable following the date of termination of Executive's employment, but in no event later than 30 days from the date of such termination of employment.
SECTION 4.02. For Cause; Without Good Reason. In the event Executive's
employment shall be terminated by the Company for Cause or by Executive other
than for Good Reason, the Company shall have no further obligations to Executive
hereunder, other than (i) for Accrued Benefits and (ii) as set forth in Section
5.01. Notwithstanding any other provision of this Agreement to the contrary,
Executive shall not be liable to the Company for breach of this Agreement as a
result of termination of his employment other than for Good Reason, provided
Executive has furnished the Company at least 60 days prior written notice of
such termination.
SECTION 4.03. Death or Disability. In the event of Executive's death or termination by the Company for Disability during the Agreement Term, the Company shall have no further obligations to Executive or his legal representatives hereunder, other than (i) for Accrued Benefits and (ii) as set forth in Section 5.01.
SECTION 4.04. Return of Materials. Executive agrees that upon termination of his employment hereunder for any reason, he shall return to the Company immediately all memoranda, books, papers, plans, information, letters and other data, and all copies thereof or therefrom, in any way relating to the business of the Company or any of its affiliates, except that he may retain personal notes, notebooks and diaries. Executive further agrees that he shall not retain or use for his account at any time any trade name, trademark, service mark or other proprietary business designation used or owned in connection with the business of the Company or any of its affiliates.
ARTICLE 5
OBLIGATIONS OF COMPANY ON CHANGE IN CONTROL
SECTION 5.01. Deferred Compensation. (a) In the event that a Change in Control occurs during the Agreement Term, the Company shall promptly thereafter cause to be irrevocably deposited in trust for the benefit of Executive and his beneficiaries, on the terms set forth in Section 5.01(c), an amount equal to the balance as of the date of such deposit of Executive's accounts under the Deferred Compensation Plan. (Such trust is hereinafter referred to as the "Deferred Compensation Trust.") From and after the date of such Change in Control, the Company shall cause to be irrevocably deposited in the Deferred Compensation Trust any additional amounts that may be deferred from time to time by Executive under the Deferred Compensation Plan. Each such subsequent deposit shall be made on the date the applicable deferred amount would otherwise have been received by Executive, but for Executive's election to defer such receipt under the Deferred Compensation Plan.
(b) The trustee of the Deferred Compensation Trust shall be a bank that is organized under the laws of the United States of America, has assets exceeding $500,000,000, and may validly exercise trustee powers under Georgia state law. All trustee's fees and other expenses of administering the Deferred Compensation Trust shall be borne by the Company.
(c) The instrument governing the Deferred Compensation Trust (the "Trust Instrument") shall, to the extent reasonably necessary to assure that the Deferred Compensation Plan will continue to be treated as "unfunded" for purposes of ERISA and the Code, provide that upon insolvency of the Company the assets of the Trust will be subject to the claims of the Company's general creditors. The Trust Instrument shall provide that in all other respects the assets of the Deferred Compensation Trust will be maintained for the exclusive benefit of Executive and his beneficiaries, and will otherwise be subject to all fiduciary and other requirements of applicable state trust law. The Trust Instrument shall require that the trustee invest the assets of the Trust in a manner calculated to match as closely as the trustee deems reasonably possible the investment elections made from time to time by Executive under the Deferred Compensation Plan, and shall provide for payment of benefits in accordance with the terms of Executive's applicable payment elections as in effect from time to time under the Deferred Compensation Plan.
(d) After the date of a Change in Control, the Company shall not (other than pursuant to Section 5.04(e) hereof) take any steps to disturb or alter Executive's (or Executive's beneficiaries') rights to receive amounts deferred
under the Deferred Compensation Plan in accordance with such Executive's applicable payment elections as in effect from time to time. Nothing herein or in the Trust Instrument shall relieve the Company of its obligation to pay benefits under the Deferred Compensation Plan in accordance with the terms of such Plan, to the extent such benefits are not paid from the Deferred Compensation Trust.
SECTION 5.02. Payment of Performance-Based Awards. In the event that a Change in Control occurs during the Agreement Term and while Executive is employed by the Company, the Company shall promptly thereafter pay Executive the sum of (i) the Reference Incentive Compensation Award, prorated to reflect the portion of the Fiscal Year elapsed through the date of the Change in Control, and (ii) the Reference Long-Term Award, for each performance period that includes the date of the Change in Control under any long-term incentive plan maintained by the Company, prorated to reflect the portion of such performance period elapsed through the date of the Change in Control. The amounts referred to in clauses (i) and (ii) above shall be paid in the form of cash or shares of Company stock, in accordance with the terms of the applicable award agreements. The payment under this Section 5.02 shall discharge all liabilities of the Company to Executive under the Company's annual and long-term incentive plans and programs, and under this Agreement, with respect to performance-based incentive compensation (other than stock options and stock appreciation rights) for the periods referred to in clauses (i) and (ii) above.
SECTION 5.03. Stock Options, Stock Appreciation Rights and Non- Performance-Based Awards. In the event that a Change in Control occurs during the Agreement Term and while Executive is employed by the Company, all outstanding stock options, stock appreciation rights, restricted stock (if not performance-based), and other non-performance-based awards held by Executive pursuant to the provisions of the Stock Incentive Plan or any successor plan shall become immediately vested, nonforfeitable and exercisable as of the date of the Change in Control.
SECTION 5.04. Additional Severance Benefits. In the event Executive's
employment is terminated under circumstances described in clauses (i) or (ii) of
Section 4.01 either (I) during the Change Period; or (II) within one year prior
to, and in anticipation of, a Change in Control, then, as of the later of the
date of termination of Executive's employment and the Change in Control:
(a) Section 4.01(b) shall be applied by substituting the words "three times" for "two times." The payment under this Section 5.04(a) shall be reduced, if Executive's employment has been terminated in anticipation of a Change in Control as described in clause (II) above, by the total amount of payments (if any)
made to Executive under Section 4.01(b) between the date of termination of Executive's employment and the date of payment under this Section 5.04(a).
(b) In lieu of the benefits otherwise payable in accordance with the Excess Benefit Agreement, the Company shall pay Executive a lump sum, in cash, equal to the actuarial present value of the Supplemental Retirement Benefit (calculated crediting Executive with three additional years of service credit beyond those otherwise provided for under the Excess Benefit Agreement), assuming that retirement benefits will be payable to Executive and his spouse under the Qualified Pension Plan in the form of a monthly annuity commencing as of Executive's Earliest Retirement Date, calculated in accordance with the terms of such Plan, and that as of Executive's annuity starting date Executive will have a spouse who meets the requirements set forth in the Qualified Pension Plan for entitlement to automatic joint and survivor annuity benefits. For purposes of this Section 5.04(b), "actuarial present value" shall be calculated using the assumptions in effect, immediately prior to the events giving rise to the right to benefits under this Section 5.04(b), for purposes of calculating actuarial equivalence under the Qualified Pension Plan. The payment under this Section 5.04(b) shall be reduced, if Executive's employment has been terminated in anticipation of a Change in Control as described in clause (II) above, by the total amount of payments (if any) made to Executive and his spouse under the Excess Benefit Agreement between the date of termination of Executive's employment and the date of payment under this Section 5.04(b).
(c) Section 4.01(d) shall be applied: (i) substituting the words "36
months" for "24 months" and (ii) eliminating the reference to life insurance or
survivor benefits coverage and any free or reduced rate flight or other travel
benefits or privileges to which Executive would otherwise be entitled under
Section 4.01(d) (which are dealt with in paragraphs (d) and (f) below). For
purposes of computing amounts payable under Section 4.01(d) (as modified by the
foregoing sentence), the present value referred to in such Section shall be
determined by Northern Trust Retirement Consulting Inc. (the "Actuarial Firm")
on the basis of such assumptions as the Actuarial Firm determines to be
reasonable. In the event that the Actuarial Firm is serving as actuary for the
Person effecting the Change in Control or is otherwise unavailable, Executive
may appoint another nationally recognized actuarial firm to make the
determinations required hereunder (which actuarial firm shall then be referred
to as the Actuarial Firm hereunder). The Actuarial Firm shall provide its
determination and detailed supporting calculations to both the Company and
Executive within fifteen business days of the receipt of notice from Executive
that a termination, or (if later) a Change in Control, has occurred giving rise
to the right to benefits under this Section 5.04, or such earlier time as is
requested by the Company. All fees and expenses of the Actuarial Firm shall be
borne solely by
the Company. If Executive's employment has been terminated in anticipation of a Change in Control as described in clause (II) above, and the Company has paid Executive the cash present value of any coverage or benefits (other than life insurance or survivor benefits coverage, or free or reduced rate flight or other travel benefits or privileges) to which Executive or his eligible family members would otherwise have been entitled under Section 4.01(d), the payments otherwise due Executive under this Section 5.04(c) shall be reduced by the total amount of such cash present value so paid to Executive.
(d) The Company shall provide Executive with the more valuable (based on the present value of the premium cost therefor under commercially available policies) of (i) any life insurance or survivor benefits coverage to which Executive would otherwise be entitled under Section 4.01(d), or (ii) a fully paid-up term life insurance policy (with premiums pre-paid for the remainder of Executive's life) on Executive's life, providing Executive's beneficiaries with a death benefit of $50,000. In addition, if Executive is eligible for early or normal retirement benefits under the Qualified Pension Plan as of the date of termination of Executive's employment, the Company shall provide Executive a fully paid-up term life insurance policy (with premiums pre-paid for the remainder of Executive's life) on Executive's life providing Executive's beneficiaries with a death benefit of two times Executive's Reference Salary. For purposes of determining Executive's entitlement to the life insurance policy described in the preceding sentence, Executive shall be credited with three extra years of age and service. If Executive's employment has been terminated in anticipation of a Change in Control as described in clause (II) above and the Company has paid Executive the cash present value of any life insurance or survivor benefits coverage to which Executive or his eligible family members became entitled under Section 4.01(d), any payments otherwise due Executive under this Section 5.04(d) shall be reduced by the total amount of such cash present value so paid to Executive.
(e) The Company shall pay (or cause the Deferred Compensation Trust to pay) to Executive a lump sum, in cash, equal to the balance of Executive's accounts under the Deferred Compensation Plan.
(f) In lieu of any free or reduced rate flight or other travel
benefits or privileges to which Executive would otherwise be entitled under
Section 4.01(d), but without limitation upon any retiree flight privileges for
which Executive may otherwise qualify, Executive and Executive's spouse, for the
remainder of their respective lives, and Executive's dependent children, for so
long as they are under age 18 (or under age 23 if a full-time student), shall be
entitled to free system- wide flight privileges on Company flights to any
location which the Company serves. Such privileges shall entitle Executive,
Executive's spouse and Executive's dependent children to unlimited positive
space (or space available, at Executive's option) first-class tickets, but
Executive's dependent children shall
not be entitled to first-class privileges if under age 8; provided further that all of such flight privileges shall otherwise be subject to the same conditions and restrictions as pertain from time to time to the flight privileges generally provided by the Company to its retirees. If Executive's employment has been terminated in anticipation of a Change in Control as described in clause (II) above and the Company has paid Executive the cash present value of any free or reduced rate flight or other benefits or privileges to which Executive or his eligible family members became entitled under Section 4.01(d), any payments otherwise due Executive under this Section 5.04 shall be reduced by the total amount of such cash present value so paid to Executive.
(g) Section 4.01(e) shall be applied (i) substituting "third anniversary" for "second anniversary" and (ii) if Executive has earned at least ten years of continuous service under the Qualified Pension Plan as of the date of termination of employment (after crediting Executive with three additional years of service credit) the Company shall pay Executive a lump sum, in cash, equal to the present value (as of the date of the termination of employment) of any premium imposed solely because of early retirement.
(h) If Executive's employment has terminated in anticipation of a
Change in Control as described in clause (II), above, the Company shall pay
Executive the amount that would have been payable to him under Section 5.02 had
the Change in Control occurred as of the date of termination of his employment;
provided, however, that the payment under this Section 5.04(h) shall be reduced
by any payments previously made to Executive under the Company's annual and
long-term incentive plans and programs, and under this Agreement, with respect
to performance-based incentive compensation (other than stock options and stock
appreciation rights) for the periods referred to in clauses (i) and (ii) of
Section 5.02.
SECTION 5.05. Definition of Disability. After the occurrence of a Change in Control, the term "Disability," as used in Article 4, shall mean Long-Term Disability, as such term is defined in the Disability Plan.
ARTICLE 6
CERTAIN TAX PAYMENTS
SECTION 6.01. Gross-Up Payment. In the event Executive becomes entitled to benefits under Section 4.01 or Article 5 hereof, the Company shall pay
to Executive an additional lump sum payment (the "Gross-Up Payment"), in cash, equal to the sum of the amounts, if any, described in paragraphs A and B below:
A. Executive shall be entitled under this paragraph to the sum of (i) the present value of all of Executive's applicable Federal, state and local taxes arising due to payments or coverage provided under Sections 4.01(d) or 4.01(e), to the extent such payments or coverage are provided in respect of benefits or coverage which, if provided to Executive while employed by the Company, would not have been taxable to Executive, and (ii) an additional amount such that after payment by Executive of all of Executive's applicable Federal, state and local taxes on such additional amount, Executive will retain an amount sufficient to pay the total of Executive's applicable Federal, state and local taxes arising due to the payment required pursuant to clause (i) above. For purposes of clause (i) above, present value shall be determined using the appropriate "applicable federal rate" promulgated by the Treasury Department under Code Section 1274(d) for the month in which the Gross-Up Payment is made, assuming that all taxes will be paid on the due date therefor (without regard to extensions).
B. If any portion of the Severance Benefits or any other payment
under this Agreement, or under any other agreement with or plan of the Company,
including but not limited to stock options and other long-term incentives (in
the aggregate "Total Payments") would be subject to the excise tax imposed by
Section 4999 of the Code or any interest or penalties with respect to such
excise tax (such excise tax, together with any such interest and penalties, are
hereinafter collectively referred to as the "Excise Tax"), then Executive shall
be entitled under this paragraph to an additional amount such that after payment
by Executive of all of Executive's applicable Federal, state and local taxes,
including any Excise Tax, imposed upon such additional amount, Executive will
retain an amount sufficient to pay the Excise Tax imposed on the Total Payments.
The amounts payable under this Section 6.01 shall be paid by the Company as soon as practicable (but in no event more than 30 days) after the occurrence of the events giving rise to Executive's right to benefits under Section 4.01 or Article 5.
SECTION 6.02. Determinations. In the event of a Change in Control, all determinations required to be made under this Article 6, including the amount of the Gross-Up Payment, whether a payment is required under Paragraph B of Section 6.01, and the assumptions to be used in determining the Gross-Up Payment, shall be made by Arthur Andersen LLP (the "Accounting Firm") which shall provide detailed supporting calculations both to the Company and Executive within twenty business days of the receipt of notice from Executive that there has been an event giving rise to the right to benefits under Article 5, or such earlier
time as is requested by the Company. In the event that the Accounting Firm is serving as accountant or auditor for a Person effecting the Change in Control or is otherwise unavailable, Executive may appoint another nationally recognized accounting firm to make the determinations required hereunder (which accounting firm shall then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall be borne solely by the Company.
SECTION 6.03. Subsequent Redeterminations. Executive agrees (unless requested otherwise by the Company) to use reasonable efforts to contest in good faith any subsequent determination by the Internal Revenue Service that Executive owes an amount of Excise Tax greater than the amount previously determined under this Article 6; provided, that Executive shall be entitled to reimbursement by the Company of all fees and expenses reasonably incurred by Executive in contesting such determination. In the event the Internal Revenue Service or any court of competent jurisdiction determines that Executive owes an amount of Excise Tax that is either greater or less than the amount previously taken into account and paid under this Article 6, the Company shall promptly pay to Executive, or Executive shall promptly repay to the Company, as the case may be, the amount of such excess or shortfall. In the case of any payment that the Company is required to make to Executive pursuant to the preceding sentence (a "Later Payment"), the Company shall also pay to Executive an additional amount such that after payment by Executive of all of Executive's applicable Federal, state and local taxes on such additional amount, Executive will retain an amount sufficient to pay the total of Executive's applicable Federal, state and local taxes arising due to the Later Payment. In the case of any repayment of Excise Tax that Executive is required to make to the Company pursuant to the second sentence of this Section 6.03, Executive shall also repay to the Company the amount of any additional payment received by Executive from the Company in respect of applicable Federal, state and local taxes on such repaid Excise Tax, to the extent Executive is entitled to a refund of (or has not yet paid) such Federal, state or local taxes.
ARTICLE 7
SUCCESSORS AND ASSIGNMENTS
SECTION 7.01. Successors. The Company will require any successor (whether by reason of a Change in Control, direct or indirect, by purchase, merger, consolidation, or otherwise) to all or substantially all of the business and/or assets of the Company to expressly assume and agree to perform the obligations under this Agreement in the same manner and to the same extent that
the Company would be required to perform them if no such succession had taken place.
SECTION 7.02. Assignment by Executive. This Agreement shall inure to the benefit of and be enforceable by Executive's personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees, and legatees. If Executive should die while any amount is owed but unpaid to Executive hereunder, all such amounts, unless otherwise provided herein, shall be paid to Executive's devisee, legatee, or other designee, or if there is no such designee, to Executive's estate. Executive's rights hereunder shall not otherwise be assignable.
ARTICLE 8
MISCELLANEOUS
SECTION 8.01. Notices. Any notice required to be delivered hereunder shall be in writing and shall be addressed
if to the Company, to:
Delta Air Lines, Inc.
Hartsfield Atlanta International Airport
Post Office Box 20706
Atlanta, GA 30320-2534
Attn: General Counsel;
if to Executive, to Executive's last known address as reflected on the books and records of the Company, with a copy to:
Vedder, Price, Kaufman & Kammholz 222 North LaSalle Street, Suite 2600 Chicago, Illinois 60601 Attention: Robert J. Stucker
or such other address as such party may hereafter specify for the purpose by written notice to the other party hereto. Any such notice shall be deemed received on the date of receipt by the recipient thereof if received prior to 5 p.m. in the place of receipt and such day is a business day in the place of receipt. Otherwise,
any such notice shall be deemed not to have been received until the next succeeding business day in the place of receipt.
SECTION 8.02. Legal Fees and Expenses. The Company shall pay all legal
fees, costs of litigation, prejudgment interest, and other expenses which are
reasonably incurred by Executive in connection with the negotiation and
preparation of this Agreement or as a result of (i) the Company's refusal to
provide benefits or other amounts in accordance herewith, (ii) the Company's (or
any third party's) contesting the validity, enforceability, or interpretation of
the Agreement, (iii) any conflict between the parties pertaining to this
Agreement, (iv) Executive's contesting any determination by the Internal Revenue
Service pursuant to Section 6.03, or (v) Executive's pursuing any claim under
Section 8.18 hereof. Notwithstanding the foregoing, in the case of any such
fees, costs, interest or other expenses incurred prior to a Change in Control,
Executive shall be entitled to payment hereunder only if Executive is successful
to a material degree in the contest or dispute giving rise thereto.
SECTION 8.03. Calculation of Taxes. For purposes of any provision of this Agreement requiring the payment by the Company of Executive's applicable Federal, state and local taxes with respect to any benefit or payment provided for hereunder, such Federal, state and local taxes shall be computed at the maximum marginal rates, taking into account the effect of any loss of personal exemptions resulting from receipt by Executive of such benefit or payment.
SECTION 8.04. Arbitration. Executive and, unless a Change in Control shall have occurred, the Company shall have the right and option to elect (in lieu of litigation) to have any dispute or controversy arising under or in connection with this Agreement settled by arbitration, conducted before a panel of three arbitrators sitting in a location selected by Executive within 50 miles from the location of his job with the Company, in accordance with the rules of the American Arbitration Association then in effect. Executive's or the Company's election to arbitrate, as herein provided, and the decision of the arbitrators in that proceeding, shall be binding on the Company and Executive. Judgment may be entered on the award of the arbitrator in any court having jurisdiction. All expenses of such arbitration, including the fees and expenses reasonably incurred by Executive, shall be borne by the Company.
SECTION 8.05. Unfunded Agreement. Except to the extent otherwise provided in Article 5, the obligations of the Company under this Agreement represent an unsecured, unfunded promise to pay benefits to Executive and/or Executive's beneficiaries, and shall not entitle Executive or such beneficiaries to a preferential claim to any asset of the Company.
SECTION 8.06. Confidential Information. Executive shall hold in a fiduciary capacity for the benefit of the Company all secret or confidential information, knowledge or data relating to the Company, or any of its subsidiaries, affiliates and businesses, which shall have been obtained by Executive pursuant to his employment by the Company or any of its subsidiaries and affiliates and which shall not have become public knowledge (other than by acts by Executive or his representatives in violation of this Agreement). After termination of Executive's employment with the Company, Executive shall not, without the prior written consent of the Company, communicate or divulge any such information, knowledge or data to anyone other than the Company and those designated by it. After the occurrence of a Change in Control, in no event shall an asserted violation of the provisions of this Section 8.06 constitute a basis for deferring or withholding any amounts otherwise payable to Executive under this Agreement.
SECTION 8.07. Non-Exclusivity of Benefits. Unless specifically provided herein, neither the provisions of this Agreement nor the benefits provided hereunder shall reduce any amounts otherwise payable, or in any way diminish Executive's rights as an employee of the Company, whether existing now or hereafter, under any compensation and/or benefit plans (qualified or nonqualified), programs, policies, or practices provided by the Company, for which Executive may qualify. Vested benefits or other amounts which Executive is otherwise entitled to receive under any plan, policy, practice, or program of the Company (i.e., including, but not limited to, vested benefits under the Qualified Pension Plan), at or subsequent to the date of termination of Executive's employment shall be payable in accordance with such plan, policy, practice, or program except as expressly modified by this Agreement.
SECTION 8.08. Compensation Taken Into Account. Severance Benefits provided hereunder (other than, to the extent applicable, amounts payable pursuant to Sections 4.01(a), 4.01(c) and 5.02) shall not be considered for purposes of determining Executive's benefits under any other plan or program of the Company (including without limitation the Qualified Pension Plan and the Excess Benefit Agreement).
SECTION 8.09. Employment Status. Nothing herein contained shall interfere with the Company's right to terminate Executive's employment with the Company at any time, with or without Cause, subject to the Company's obligation to provide such Severance Benefits and other amounts as may be required hereunder.
SECTION 8.10. Mitigation. In no event shall Executive be obligated to seek other employment or take any other action by way of mitigation of the
amounts payable to Executive under any of the provisions of this Agreement, nor shall the amount of any payment hereunder be reduced by any compensation earned by Executive as a result of employment by another employer.
SECTION 8.11. No Set-Off. The Company's obligations to make all payments and honor all commitments under this Agreement shall be absolute and unconditional and shall not be affected by any circumstances including, without limitation, any set-off, counterclaim, recoupment, defense or other right which the Company may have against Executive, except that offsets for amounts previously paid shall be permitted to the extent expressly provided in Sections 4.01(c) and 5.04.
SECTION 8.12. Entire Agreement. This Agreement, together with the Exhibits hereto, represents the entire agreement between the parties with respect to Executive's employment and/or severance rights upon a Change in Control, and supersedes all prior discussions, negotiations, and agreements concerning such rights, including, but not limited to, any prior severance agreement made between Executive and the Company.
SECTION 8.13. Tax Withholding. Notwithstanding anything in this Agreement to the contrary, the Company shall withhold from any amounts payable under this Agreement all federal, state, city, or other taxes as are legally required to be withheld.
SECTION 8.14. Waiver of Rights. The waiver by either party of a breach of any provision of this Agreement shall not operate or be construed as a continuing waiver or as a consent to or waiver of any subsequent breach hereof.
SECTION 8.15. Severability. In the event any provision of this Agreement shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of this Agreement, and this Agreement shall be construed and enforced as if the illegal or invalid provision had not been included.
SECTION 8.16. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Georgia without reference to principles of conflict of laws.
SECTION 8.17. Counterparts. This Agreement may be signed in several counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were on the same instrument.
SECTION 8.18. Claim Review Procedure. If Executive is denied benefits under this Agreement, Executive may request, in writing, a review of the denial
by the Company or its designee within 60 days of receiving written notice of the denial. The Company shall respond in writing to a written request for review within 90 days of receipt of such request. Neither the claim procedure set forth in this Section 8.18 nor Executive's failure to adhere to such procedure shall derogate from Executive's right to enforce this Agreement through legal action, including arbitration as provided in Section 8.04.
SECTION 8.19. Indemnification. The Company shall indemnify Executive (and Executive's legal representatives or other successors) to the fullest extent permitted by the Certificate of Incorporation and By-Laws of the Company, as in effect at such time or on the Effective Date, or by the terms of any indemnification agreement between the Company and Executive, whichever affords or afforded greater protection to Executive, and Executive shall be entitled to the protection of any insurance policies the Company may elect to maintain generally for the benefit of its directors and officers (and to the extent the Company maintains such an insurance policy or policies, Executive shall be covered by such policy or policies, in accordance with its or their terms, to the maximum extent of the coverage available for any Company officer or director), against all costs, charges and expenses whatsoever incurred or sustained by Executive or Executive's legal representatives at the time such costs, charges and expenses are incurred or sustained, in connection with any action, suit or proceeding to which Executive (or Executive's legal representatives or other successors) may be made a party by reason of Executive's being or having been a director, officer or employee of the Company, or any Subsidiary or Executive's serving or having served any other enterprise as a director, officer, employee or fiduciary at the request of the Company.
ARTICLE 9
DEFINITIONS
For purposes of this Agreement, the following terms shall have the meanings set forth below.
"Accounting Firm" has the meaning accorded such term in Section 6.02.
"Accrued Benefits" has the meaning accorded such term in Section 4.01(a).
"Actuarial Firm" has the meaning accorded such term in Section 5.04(c).
"Affiliate" and "Associate" have the respective meanings accorded to such terms in Rule 12b-2 under the Exchange Act as in effect on the Effective Date.
"Agreement Term" has the meaning accorded such term in Section 1.01.
"Base Salary" means, at any time, the then-regular annual rate of pay which Executive is receiving as annual salary.
"Beneficial Ownership." A Person shall be deemed the "Beneficial Owner" of, and shall be deemed to "beneficially own," securities pursuant to Rule 13d-3 under the Exchange Act as in effect on the Effective Date.
"Board" has the meaning accorded such term in the first "Whereas" clause of this Agreement.
"Cause" means the occurrence of any one or more of the following:
(a) A demonstrably willful and deliberate act or failure to act by Executive (other than as a result of incapacity due to physical or mental illness) which is committed in bad faith, without reasonable belief that such action or inaction is in the best interests of the Company, and which act or inaction is not remedied within fifteen business days of written notice from the Company; or
(b) Executive's conviction for committing an act of fraud, embezzlement, theft, or any other act constituting a felony involving moral turpitude.
Notwithstanding the foregoing, Executive shall not be deemed to have been terminated for Cause unless and until there shall have been delivered to Executive a copy of a resolution duly adopted by the affirmative vote (which cannot be delegated) of not less than three-quarters of the entire membership of the Board at a meeting of the Board called and held for such purpose (after reasonable notice to Executive and an opportunity for Executive, together with Executive's counsel, to be heard before the Board), finding that, in the good faith opinion of the Board, Executive is guilty of conduct set forth above in clauses (a) or (b) of this definition and specifying the particulars thereof in detail.
"Change in Control" means, and shall be deemed to have occurred upon, the first to occur of any of the following events:
(a) Any Person (other than an Excluded Person) acquires, together with all Affiliates and Associates of such Person, Beneficial Ownership of
securities representing 20% or more of the combined voting power of the Voting Stock then outstanding, unless such Person acquires Beneficial Ownership of 20% or more of the combined voting power of the Voting Stock then outstanding solely as a result of an acquisition of Voting Stock by the Company which, by reducing the Voting Stock outstanding, increases the proportionate Voting Stock beneficially owned by such Person (together with all Affiliates and Associates of such Person) to 20% or more of the combined voting power of the Voting Stock then outstanding; provided, that if a Person shall become the Beneficial Owner of 20% or more of the combined voting power of the Voting Stock then outstanding by reason of such Voting Stock acquisition by the Company and shall thereafter become the Beneficial Owner of any additional Voting Stock which causes the proportionate voting power of Voting Stock beneficially owned by such Person to increase to 20% or more of the combined voting power of the Voting Stock then outstanding, such Person shall, upon becoming the Beneficial Owner of such additional Voting Stock, be deemed to have become the Beneficial Owner of 20% or more of the combined voting power of the Voting Stock then outstanding other than solely as a result of such Voting Stock acquisition by the Company;
(b) During any period of two consecutive years (not including any period prior to the Effective Date), individuals who at the beginning of such period constitute the Board (and any new Director, whose election by the Board or nomination for election by the Company's stockholders was approved by a vote of at least two-thirds of the Directors then still in office who either were Directors at the beginning of the period or whose election or nomination for election was so approved), cease for any reason to constitute a majority of Directors then constituting the Board;
(c) A reorganization, merger or consolidation of the Company is consummated, in each case, unless, immediately following such reorganization, merger or consolidation, (i) more than 50% of, respectively, the then outstanding shares of common stock of the corporation resulting from such reorganization, merger or consolidation and the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors is then beneficially owned, directly or indirectly, by all or substantially all of the individuals and entities who were the beneficial owners of the Voting Stock outstanding immediately prior to such reorganization, merger or consolidation, (ii) no Person (but excluding for this purpose any Excluded Person and any Person beneficially owning, immediately prior to such reorganization, merger or consolidation, directly or indirectly, 20% or more of the voting power of the outstanding Voting Stock) beneficially
owns, directly or indirectly, 20% or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such reorganization, merger or consolidation or the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors and (iii) at least a majority of the members of the board of directors of the corporation resulting from such reorganization, merger or consolidation were members of the Board at the time of the execution of the initial agreement providing for such reorganization, merger or consolidation; or
(d) The shareholders of the Company approve (i) a complete liquidation or dissolution of the Company or (ii) the sale or other disposition of all or substantially all of the assets of the Company, other than to any corporation with respect to which, immediately following such sale or other disposition, (A) more than 50% of, respectively, the then outstanding shares of common stock of such corporation and the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors is then beneficially owned, directly or indirectly, by all or substantially all of the individuals and entities who were the beneficial owners of the Voting Stock outstanding immediately prior to such sale or other disposition of assets, (B) no Person (but excluding for this purpose any Excluded Person and any Person beneficially owning, immediately prior to such sale or other disposition, directly or indirectly, 20% or more of the voting power of the outstanding Voting Stock) beneficially owns, directly or indirectly, 20% or more of, respectively, the then outstanding shares of common stock of such corporation or the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors and (C) at least a majority of the members of the board of directors of such corporation were members of the Board at the time of the execution of the initial agreement or action of the Board providing for such sale or other disposition of assets of the Company.
Notwithstanding the foregoing, in no event shall a "Change in Control" be deemed to have occurred (i) as a result of the formation of a Holding Company or (ii) with respect to Executive, if Executive is part of a "group," within the meaning of Section 13(d)(3) of the Exchange Act as in effect on the Effective Date, which consummates the Change in Control transaction. In addition, for purposes of the definition of "Change in Control" a Person engaged in business as an underwriter of securities shall not be deemed to be the "Beneficial Owner" of, or to "beneficially own," any securities acquired through such Person's participation in good faith in a firm commitment underwriting until the expiration of forty days after the date of such acquisition.
"Change Period" has the meaning accorded such term in Section 1.03.
"COBRA" means the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" has the meaning accorded such term in the introductory paragraph of this Agreement.
"Compensation Committee" has the meaning accorded such term in
Section 3.01.
"Deferred Compensation Plan" means the Company's Executive Deferred Compensation Plan (or any similar successor plan adopted by the Company), as in effect immediately prior to a Change in Control.
"Current Residence" has the meaning accorded such term in Section 3.05(b).
"Deferred Compensation Trust" has the meaning accorded such term in
Section 5.01(a).
"Disability" means, except to the extent modified pursuant to Section 5.05, Executive's inability due to physical or mental incapacity for a period of six consecutive months or for an aggregate of nine months in any 18 consecutive month period substantially to perform his duties hereunder.
"Disability Plan" means the Delta Family-Care Disability and Survivorship Plan (or any successor disability and/or survivorship plan adopted by the Company), as in effect immediately prior to a Change in Control (subject to changes in coverage levels applicable to all employees generally covered by such Plan).
"Earliest Retirement Date" means the earliest date, after the date of termination of Executive's employment, as of which Executive would be eligible to commence receiving retirement benefits under the Qualified Pension Plan.
"Effective Date" has the meaning accorded such term in the introductory paragraph of this Agreement.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended.
"Excess Benefit Agreement" has the meaning accorded such term in
Section 3.04.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Excise Tax" has the meaning accorded such term in Section 6.01.
"Excluded Person" means (i) the Company; (ii) any of the Company's Subsidiaries; (iii) any Holding Company; (iv) any employee benefit plan of the Company, any of its Subsidiaries or a Holding Company; or (v) any Person organized, appointed or established by the Company, any of its Subsidiaries or a Holding Company for or pursuant to the terms of any plan described in clause (iv).
"Executive" has the meaning accorded such term in the introductory paragraph of this Agreement.
"Fiscal Year" means a fiscal year of the Company.
"Good Reason" means the occurrence of any one or more of the following, unless (in the case of the events described in Paragraphs (a) through (e)) Executive has expressly consented in writing thereto:
(a) The assignment to Executive of duties inconsistent with Executive's authorities, duties, titles, responsibilities and status as an officer of the Company, or a reduction or alteration in the nature or status of Executive's authorities, duties, titles or responsibilities, from those in effect as of the Effective Date and described in Section 2.01; other than an insubstantial and inadvertent act that is remedied by the Company promptly after receipt of notice thereof given by Executive;
(b) The Company's requiring Executive to be based at a location in excess of 50 miles from Executive's principal job location or office on the later of (i) the Effective Date or (ii) immediately prior to the Reference Date; except for required travel on the Company's business to an extent consistent with Executive's business travel obligations on the later of (i) the Effective Date or (ii) immediately prior to the Reference Date;
(c) A reduction by the Company of Executive's Base Salary as in effect on the later of (i) the Effective Date or (ii) the Reference Date (other than pursuant to a reduction by a uniform percentage of the salary of all full-time domestic employees of the Company who are not subject to a collective bargaining agreement); or a reduction in Executive's short-term or long-term incentive compensation opportunities under the executive incentive compensation plans of the Company for which Executive is
eligible as in effect on the later of (i) the Effective Date or (ii) the Reference Date;
(d) The failure by the Company to keep in effect compensation,
retirement, health and welfare benefits, or perquisite programs under
which Executive receives benefits substantially similar, in the
aggregate, to the benefits under such programs as exist on the later of
(i) the Effective Date or (ii) immediately prior to the Reference Date
(other than pursuant to an equivalent reduction in such benefits of all
full-time domestic employees of the Company who are not subject to a
collective bargaining agreement); or the failure of the Company to meet
the funding requirements, if any, of any of such programs;
(e) Any material breach by the Company of its obligations under this Agreement or any failure of a successor of the Company to assume and agree to perform the Company's entire obligations under this Agreement, as required by Article 7 herein, provided that such successor has received at least ten days written notice from the Company or Executive of the requirements of Article 7;
(f) The expiration of the Agreement Term; or
(g) The termination by Executive of his employment with the Company during the sixty-day period commencing on the first anniversary of a Change in Control.
"Gross-Up Payment" has the meaning accorded such term in Section 6.01.
"Holding Company" means an entity that becomes a holding company for the Company or its businesses as a part of any reorganization, merger, consolidation or other transaction, provided that the outstanding shares of common stock of such entity and the combined voting power of the then outstanding voting securities of such entity entitled to vote generally in the election of directors is, immediately after such reorganization, merger, consolidation or other transaction, beneficially owned, directly or indirectly, by all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Voting Stock outstanding immediately prior to such reorganization, merger, consolidation or other transaction in substantially the same proportions as their ownership, immediately prior to such reorganization, merger, consolidation or other transaction, of such outstanding Voting Stock.
"Later Payment" has the meaning accorded such term in Section 6.03.
"Medical Plans" means the DeltaFlex and the Delta Family-Care Medical Plans (or any successor medical plans adopted by the Company), as in effect immediately prior to a Change in Control (subject to changes in coverage levels applicable to all employees generally covered by such Plans).
"Person" means an individual, corporation, partnership, association, trust or any other entity or organization.
"Qualified Pension Plan" means the Delta Family-Care Retirement Plan (or any successor qualified defined benefit retirement plan adopted by the Company).
"Reference Date" means the earlier to occur of (i) a Change in Control and (ii) the date 90 days prior to the termination of Executive's employment.
"Reference Incentive Compensation Award" means:
(a) for purposes of Section 5.02 hereof, the greater of the target annual incentive compensation award or bonus (A) for the Company's most recently completed Fiscal Year prior to the Change in Control and (B) for the Company's Fiscal Year that includes the Change in Control.
(b) for all other purposes hereunder, the greater of (A) the target annual incentive compensation award or bonus most recently established prior to the termination of Executive's employment and (B) the actual annual incentive compensation award or bonus for the Company's most recently completed Fiscal Year prior to the termination of employment.
For purposes of both parts (a) and (b) of this definition, the "target annual incentive compensation award or bonus" with respect to any Fiscal Year shall be determined by multiplying the target salary percentage applicable to Executive for such year by the Reference Salary.
"Reference Long-Term Award" means, for each performance period that includes the date of a Change in Control under a long-term incentive plan maintained by the Company, the greater of (i) the actual award payable to Executive for such performance period, calculated as if such performance period had ended on the date of the Change in Control and (ii) the target award payable to Executive for such performance period.
"Reference Salary" means Executive's annual rate of Base Salary as in effect upon the date of termination of Executive's employment or, in the event of
such a termination during the Change Period, immediately prior to the Change in Control, if higher.
"Severance Benefits" has the meaning accorded such term in
Section 4.01.
"Stock Incentive Plan" means the Company's 1989 Stock Incentive Plan.
"Subsidiary" of any Person means any other Person of which securities or other ownership interests having voting power to elect a majority of the board of directors or other Persons performing similar functions are at the time directly or indirectly owned by such Person.
"Supplemental Retirement Benefit" has the meaning accorded such term in
Section 3.04(a).
"Total Payments" has the meaning accorded such term in Section 6.01.
"Trust Instrument" has the meaning accorded such term in Section 5.01(c).
"Voting Stock" means securities of the Company entitled to vote generally in the election of members of the Board.
IN WITNESS WHEREOF, the Company and Executive have executed this Agreement, to be effective as of the day and year first written above.
EXECUTIVE Delta Air Lines, Inc.
/s/ Leo F. Mullin By: /s/ Gerald Grinstein
-------------------------- -------------------------
Leo F. Mullin Name: Gerald Grinstein
Title: Chairman of the Board
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EXHIBIT A
SENIOR OFFICER EXCESS BENEFIT AGREEMENT
THIS EXCESS BENEFIT AGREEMENT ("Agreement") is made and entered into as of the 14th day of August, 1997, by and between DELTA AIR LINES, INC. (hereinafter the "Company") and Leo F. Mullin (hereinafter "Key Employee"):
WITNESSETH:
WHEREAS, the Company has implemented the 1991 Delta Excess Benefit Plan, and the Delta Supplemental Excess Benefit Plan, both as amended (collectively referred to as the "Plans"), and has entered into an Employment Agreement with Key Employee (the "Employment Agreement"); and
WHEREAS, the Company believes it is in the best interest of the Company in seeking to assure itself of Key Employee's best efforts in the future to provide for the payment of full retirement and other benefits to the Key Employee; and
WHEREAS, the Company has agreed in the Employment Agreement to provide Key Employee with specified retirement benefits, as described herein; and
WHEREAS, various sections of the Internal Revenue Code of 1986 (the
"Code"), including, but not limited to, Sections 79, 401(a)(4), 401(a)(17), 415,
and 505(b) restrict either: (i) compensation that may be taken into account in
determining benefits under a qualified pension plan; (ii) benefits that can be
paid from qualified pension plans; (iii) compensation that may be taken into
account in determining benefits for participants in a Voluntary Employee
Beneficiary Association ("VEBA") described in-Section 501(c)(9) of the Code; or
(iv) restrict benefits that can be paid from a VEBA (such limitations
collectively or individually hereinafter referred to as the "Restrictions"); and
WHEREAS, the Company wishes to make up under this Agreement any reduction in Key Employee's disability or survivor benefits under the Delta Family-Care Disability and Survivorship Plan (the "Disability and Survivorship Plan") which results from the Restrictions, or any other applicable laws, statutes, or regulations which restrict in any way the benefits that can be paid from a VEBA; and
WHEREAS, the Board of Directors of the Company has authorized post-retirement life insurance benefits for senior officers in excess of the coverage provided to other employees of the Company through the Basic Lump Sum Death Benefit under the Disability and Survivorship Plan; and
WHEREAS, certain restrictions imposed by the Tax Equity and Fiscal Responsibility Act of 1982 ("TEFRA") prohibit the Company from providing post-retirement life insurance benefits to officers in excess of that provided to other employees of the Company; and
WHEREAS, the Company wishes to make up any such loss of group life insurance coverage for Key Employee which cannot be provided because of the TEFRA restrictions;
NOW, THEREFORE, the parties hereby agree as follows:
1. Certain Requirements Not Applicable. The parties specifically acknowledge that this Agreement is exempt from certain provisions of the Employee Retirement Income Security Act of 1974 ("ERISA") including, but not limited to, parts 2, 3 and 4 of Subtitle B of Title 1 of ERISA and is also subject to limited reporting and disclosure requirements of part 1 of Subtitle B of Title 1 of ERISA.
2. Incorporation of the Retirement Plan and the Disability and Survivorship Plan. The terms of the Delta Family-Care Retirement Plan (the "Retirement Plan") and the Disability and Survivorship Plan are hereby incorporated into this Agreement by reference, except that changes in those plans which reduce benefits (except such changes as may be required by law) shall be incorporated as to Key Employee only if advance notice of such proposed reduction is given to the Key Employee and the Key Employee agrees to an amendment of this Agreement to incorporate the benefit reduction. The incorporation of the Retirement Plan and the Disability and Survivorship Plan is not intended to modify any provision of this Agreement, and the benefits provided hereunder shall be governed only by the provisions hereof. Unless indicated otherwise, capitalized terms used in this Agreement shall have the meaning given those terms in the Retirement Plan and Disability and Survivorship Plan.
3. Supplemental Retirement Income.
(a) Upon termination of his employment with the Company, in addition to retirement income which Key Employee might be eligible to receive through his participation in the Plans, and subject to the vesting provision in Section 3(c) below, Key Employee will be entitled to receive from the Company supplemental retirement income ("Supplemental Retirement Income") which will provide Key Employee
with an aggregate retirement benefit (taking into account the amounts offset as described in Section 3(b) below) in an annual amount (in the form of an unreduced joint and 50% survivor annuity) equal to the aggregate retirement benefits that would have accrued to the benefit of Key Employee under the Retirement Plan and the Plans (which shall provide benefits substantially equivalent to those described in the excerpt from the Company's 1996 Proxy Statement attached as Exhibit 1 hereto (disregarding references to plans maintained primarily for pilots), without regard to any changes after the date of such Proxy Statement), calculated crediting Key Employee with 22 years of service credit plus the number of years of service credit attributable to Key Employee's service with the Company after the date hereof, and calculated without regard to any waiting period which might otherwise apply with respect to the accrual of benefits under the Retirement Plan and the Plans.
(b) The amount of the Supplemental Retirement Income will be offset by (i) the benefits provided Key Employee under any qualified defined benefit retirement plans of the Company, including but not limited to the Retirement Plan; (ii) benefits provided Key Employee under any nonqualified defined benefit retirement plans of the Company, including but not limited to the Plans; and (iii) Social Security benefits and other amounts for which and to the extent offset is provided for under the Retirement Plan. In the event Key Employee commences receiving the Supplemental Retirement Income on or after his attainment of age 60, the Supplemental Retirement Income (prior to actuarial conversion to the form of benefit elected by Key Employee) will be paid without reduction for early commencement. In the event Key Employee commences receiving the Supplemental Retirement Income prior to his attainment of age 60, the Supplemental Retirement Income (prior to actuarial conversion to the form of benefit elected by Key Employee) will be subject to a reduction of 0.25% for each whole or partial month by which 60 years exceeds Key Employee's age as of such commencement of benefits.
(c) Except as otherwise expressly provided in the Employment Agreement, Key Employee's right to Supplemental Retirement Income will be wholly unvested until August 14, 2000, on which date, provided Key Employee remains employed by the Company until such date, such Income will become fully vested. Unless Key Employee's right to Supplemental Retirement Income shall have previously or thereupon become vested, Key Employee's rights thereto will be forfeited upon termination of his employment with the Company prior to August 14, 2000.
(d) If Key Employee dies after the date hereof but before Supplemental Retirement Income becomes payable, his spouse will receive a survivor annuity for her life equal to 50% of the aggregate annual benefit amount which would have been payable to Key Employee under this Section 3 if he had
terminated his employment for Good Reason (as defined in the Employment
Agreement) on the date immediately before his death (without regard to the
additional two or three years of credited service described in Sections 4.01(f)
and 5.04(b) of the Employment Agreement), but such survivor annuity will be
reduced by the amount of (i) any pre-retirement survivor benefit payable under
the Company's qualified and nonqualified defined benefit retirement plans
(including but not limited to the Retirement Plan and the Plans) and (ii)
survivor benefits under the Company's Disability and Survivorship Plan.
4. Supplemental Disability Income. Subject to Section 8, the Company agrees to pay Key Employee at the time set forth below a supplemental monthly disability income ("Supplemental Disability Income") equal to (a) minus (b), where
(a) equals the monthly disability benefit which the Key Employee would receive under the Disability and Survivorship Plan beginning on the Benefit Commencement Date (as defined below) if the Restrictions were not in effect and taking into account his or her elections under the Delta Air Lines, Inc. DELTAFLEX Plan; and
(b) equals the monthly disability benefit to which the Key Employee actually receives from the Disability and Survivorship Plan beginning on the Benefit Commencement Date, taking into account his or her elections under the Delta Air Lines, Inc. DELTAFLEX Plan.
The amount of Supplemental Disability Income paid under this Agreement will be adjusted as permitted under the Delta Air Lines, Inc. DELTAFLEX Plan, and if the amount in (b) above increases or decreases as a result of a change in the Restrictions.
5. Supplemental Monthly Survivor Income. Subject to Section 8, the Company agrees to pay to Eligible Family Member(s) (as defined in the Disability and Survivorship Plan) of Key Employee at Key Employee's death a supplemental monthly survivor income ("Supplemental Survivor Income") equal to (a) minus (b), where
(a) equals the monthly survivor benefit which the Eligible Family Member(s) of Key Employee would receive under the Disability and Survivorship Plan beginning on the Benefit Commencement Date (as defined below) without considering any Restrictions on any benefit plan; and
(b) equals the monthly survivor benefit which the Eligible Family Member(s) of Key Employee actually receives under the terms of the Disability and Survivorship Plan.
The amount of Supplemental Survivor Income paid under this Agreement will be adjusted as permitted under the Disability and Survivorship Plan and the Code to account for, inter alia, changes in the number of Eligible Family Members.
6. Benefit Commencement Date; Cessation of Benefits. Subject to Section 18 (Change in Control), the Company shall commence payment of the Supplemental Retirement Income as of the Benefit Commencement Date under the Retirement Plan and the Supplemental Disability or Survivor Income as of the Benefit Commencement Date under the Disability and Survivorship Plan. Subject to Section 18, Benefit Commencement Date under this Agreement shall mean the day that the retirement income benefit, disability benefit or survivor benefit, as the case may be, commences under the Retirement Plan or Disability and Survivorship Plan with respect to Key Employee or his Spouse, or Eligible Family Member(s); Supplemental Retirement Income will cease upon the death of the last to die of Key Employee or, if applicable, his Spouse, or if changes in the Restrictions permit the full benefit due under Section 3 hereof to be paid from the Retirement Plan and the Retirement Plan assumes such full payment, or if full payment of retirement benefits due hereunder have already been made. Supplemental Disability Income will cease if the full benefit due under the Disability and Survivorship Plan may be paid from that Plan and the Disability and Survivorship Plan assumes such full payment or when the Key Employee is no longer eligible for disability benefits under that Plan. Supplemental Survivor Income will cease if the full benefit due under the Disability and Survivorship Plan may be paid from that Plan, and the Disability and Survivorship Plan assumes full payment of the benefit amount or when there are no remaining Eligible Family Member(s) under that Plan. Subject to Section 18, all benefits (other than Supplemental Retirement Income benefits) payable hereunder may cease pursuant to Section 8 at any time.
7. Supplemental Lump Sum Death Benefit. Subject to Section 8, the Company
agrees to pay to the named beneficiary (as designated by Key Employee for the
Basic Life Benefit under the Disability and Survivorship Plan) of Key Employee
at Key Employee's death, a supplemental lump sum death benefit in the amount
necessary to provide a total lump sum death benefit of $50,000 when combined
with the Basic Life Benefit actually provided by the Disability and Survivorship
Plan. Such benefit shall be taken into account in determining the Company's
compliance with any provision of the Employment Agreement providing for the
payment of life insurance benefits, and the Company's obligations under this
Section 7 shall be treated as discharged upon the purchase by the Company of a
fully paid-up term life insurance policy on Key Employee's life pursuant to
Section 5.04 (d)(ii) of the Employment Agreement.
8. Certain Restrictions. Subject to Section 18, or unless waived by the Committee under circumstances the Committee deems appropriate, if Key Employee terminates active employment with the Company prior to his Normal Retirement Date and within two years of such termination directly or indirectly provides management or executive services (whether as a consultant, advisor, officer or director) to any Person (as defined in Section 18) who is in direct and substantial competition with the air transportation business of the Company or any of its subsidiaries, then (a) if Supplemental Monthly Survivor Income or Supplemental Lump Sum Death benefits under this Agreement shall have not yet commenced, no such benefits shall be paid under this Agreement to Key Employee, his Spouse, Eligible Family Member or beneficiary; and (b) if Supplemental Monthly Survivor Income or Supplemental Lump Sum Death benefits under this Agreement have commenced, no further such benefits shall be paid. Because of the broad and extensive scope of the Company's air transportation business, the restrictions contained in this provision are intended to extend to management or executive services which are directly related to the provision of air transportation services into, within or from the United States, as no smaller geographical restriction will adequately protect the legitimate business interest of the Company.
9. Funding of Benefit. Subject to Section 18 (Change in Control) the benefits provided by this Agreement shall be paid, as they become due, from the Company's general assets or by such other means as the Company deems advisable, including a trust or trusts established by the Company, provided however, if such trusts are established, benefits shall be payable from such trusts only as and to the extent provided therein. To the extent Key Employee acquires the right to receive payments from the Company under this Agreement, such right shall be no greater than that of a general creditor of the Company. The Company shall have complete discretion under this Agreement to account for and report, or to refrain from accounting for or reporting, its liabilities under this Agreement. In the event that the Company in its sole discretion establishes a reserve or bookkeeping account for the benefits payable under this Agreement, the Key Employee shall have no proprietary or security interest in any such reserve or account.
10. Nonassignability of Benefits. No benefit payable under this Agreement may be assigned, transferred, encumbered or subjected to legal process for the payment of any claim against Key Employee, his Spouse, Eligible Family Member, or beneficiary.
11. No Right to Continued Employment. Nothing in this Agreement shall be deemed to give Key Employee the right to be retained in the service of the Company or to deny the Company any right it may have to discharge Key Employee at any time, subject to the Company's obligation to provide benefits and amounts as may be required hereunder.
12. Arbitration. The parties acknowledge that any claim or controversy arising out of this Agreement is subject to arbitration in accordance with the Employment Agreement.
13. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Georgia without regard to its conflict of laws rules.
14. Successors and Assigns. This Agreement shall be binding upon the successors and assigns of the parties hereto.
15. Amendment. This writing and the Employment Agreement, including any terms or documents incorporated herein by reference, supersede any previous excess benefit agreement between Key Employee and the Company. This Agreement may not be modified orally, but only by writing signed by the parties hereto.
16. Notice. All notices, requests, demands and other communications under this Agreement, shall be in writing and shall be delivered personally (including by courier) or mailed by certified mail, return receipt requested. Refusal to acknowledge receipt of such notice shall constitute receipt of such notice upon the date it is returned to the sender. Any notice under this Agreement shall be sent to Key Employee, Spouse, his Eligible Family Member or beneficiary at the last known address of such person as reflected in the Company's records. Notice to the Company or the Committee shall be sent to:
Delta Air Lines, Inc.
Law Department
1030 Delta Boulevard
Atlanta, Georgia 30320
Attention: Robert S. Harkey, Senior Vice President - General Counsel
17. Form of Payment. If Key Employee becomes entitled to Supplemental Retirement Income under this Excess Benefit Agreement, such benefit shall automatically be paid in the identical form that benefits are payable under the Retirement Plan, subject to actuarial adjustment in accordance with the Retirement Plan, commencing with the date payments under the Retirement Plan begin.
18. Change in Control. Notwithstanding anything in this Agreement to the contrary, in the event a Change in Control (as defined below) occurs, the Company shall, if not previously established, establish a grantor trust (the "Trust") to provide benefits payable under this Agreement. Subject to the following paragraph, the Company shall promptly cause to be irrevocably deposited in such Trust for the benefit of Key Employee and his or her beneficiaries, on the terms set forth below, an amount equal to the balance as of the date of such deposit of Key Employee's accrued benefit under this Agreement, regardless of whether such benefit is vested. From and after the date of such Change in Control, the Company shall cause to be irrevocably deposited in the Trust any additional accruals under this Agreement, regardless of whether such benefit is vested.
The instrument governing the Trust shall, to the extent reasonably necessary to assure that this Agreement will continue to be treated as "unfunded" for purposes of ERISA and the Code, provide that upon insolvency of the Company, the assets of the trust will be subject to the claims of the Company's general creditors. The Trust instrument shall provide that in all other respects the assets of the Trust will be maintained for the exclusive benefit of Key Employee and his or her beneficiaries, and will otherwise be subject to all fiduciary and other requirements of applicable state trust law.
In addition, in the event Employee's employment terminates under
circumstances in which Section 5.04 of the Employment Agreement applies,
Section 8 of this Agreement shall be deemed waived. Further, the timing and
payments of any retirement benefits to be provided hereunder shall be governed
by, and subject to, the terms of the Employment Agreement to the extent such
Agreement provides for accelerated payments of retirement benefits otherwise
payable under this Agreement.
For purposes of this Agreement, "Change in Control" means, and shall be deemed to have occurred upon, the first to occur of any of the following events:
(a) Any Person (other than an Excluded Person) acquires, together with all Affiliates and Associates of such Person, Beneficial Ownership of securities representing 20% or more of the combined voting power of the Voting Stock then outstanding, unless such Person acquires Beneficial Ownership of 20% or more of the combined voting power of the Voting Stock then outstanding solely as a result of an acquisition of Voting Stock by the Company which, by reducing the Voting Stock outstanding, increases the proportionate Voting Stock beneficially owned by such Person (together with all Affiliates and Associates of such Person) to 20% or more of the combined voting power of the Voting Stock then
outstanding; provided, that if a Person shall become the Beneficial Owner of 20% or more of the combined voting power of the Voting Stock then outstanding by reason of such Voting Stock acquisition by the Company and shall thereafter become the Beneficial Owner of any additional Voting Stock which causes the proportionate voting power of Voting Stock beneficially owned by such Person to increase to 20% or more of the combined voting power of the Voting Stock then outstanding, such Person shall, upon becoming the Beneficial Owner of such additional Voting Stock, be deemed to have become the Beneficial Owner of 20% or more of the combined voting power of the Voting Stock then outstanding other than solely as a result of such Voting Stock acquisition by the Company;
(b) During any period of two consecutive years (not including any period prior to the Effective Date), individuals who at the beginning of such period constitute the Board (and any new Director, whose election by the Board or nomination for election by the Company's stockholders was approved by a vote of at least two-thirds of the Directors then still in office who either were Directors at the beginning of the period or whose election or nomination for election was so approved), cease for any reason to constitute a majority of Directors then constituting the Board;
(c) A reorganization, merger or consolidation of the Company is consummated, in each case, unless, immediately following such reorganization, merger or consolidation, (i) more than 50% of, respectively, the then outstanding shares of common stock of the corporation resulting from such reorganization, merger or consolidation and the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors is then beneficially owned, directly or indirectly, by all or substantially all OF the individuals and entities who were the beneficial owners of the Voting Stock outstanding immediately prior to such reorganization, merger or consolidation, (ii) no Person (but excluding for this purpose any Excluded Person and any Person beneficially owning, immediately prior to such reorganization, merger or consolidation, directly or indirectly, 20% or more of the voting power of the outstanding Voting Stock) beneficially owns, directly or indirectly, 20% or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such reorganization, merger or consolidation or the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors and (iii) at least a majority of the members of the board of directors of the corporation resulting from such reorganization, merger or consolidation were members
of the Board at the time of the execution of the initial agreement providing for such reorganization, merger or consolidation; or
(d) The shareholders of the Company approve (i) a complete liquidation or dissolution of the Company or (ii) the sale or other disposition of all or substantially all of the assets of the Company, other than to any corporation with respect to which, immediately following such sale or other disposition, (A) more than 50% of, respectively, the then outstanding shares of common stock of such corporation and the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors is then beneficially owned, directly or indirectly, by all or substantially all of the individuals and entities who were the beneficial owners of the Voting Stock outstanding immediately prior to such sale or other disposition of assets, (B) no Person (but excluding for this purpose any Excluded Person and any Person beneficially owning, immediately prior to such sale or other disposition, directly or indirectly, 20% or more of the voting power of the outstanding Voting Stock) beneficially owns, directly or indirectly, 20% or more of, respectively, the then outstanding shares of common stock of such corporation or the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors and (C) at least a majority of the members of the board of directors of such corporation were members of the Board at the time of the execution of the initial agreement or action of the Board providing for such sale or other disposition of assets of the Company.
Notwithstanding the foregoing, in no event shall a "Change in Control" be deemed to have occurred (i) as a result of the formation of a Holding Company, or (ii) with respect to Key Employee, if Key Employee is part of a "group," within the meaning of Section 13(d)(3) of the Exchange Act as in effect on the Effective Date, which consummates the Change in Control transaction. In addition, for purposes of the definition of "Change in Control" a Person engaged in business as an underwriter of securities shall not be deemed to be the "Beneficial Owner" of, or to "beneficially own," any securities acquired through such Person's participation in good faith in a firm commitment underwriting until the expiration of forty days after the date of such acquisition.
As used in the above definition, "Person" shall mean an individual, corporation, partnership, association, trust or any other entity or organization. "Excluded Person" means (i) the Company; (ii) any of the Company's Subsidiaries; (iii) any Holding Company; (iv) any employee benefit plan of the Company, any of its Subsidiaries or a Holding Company; or (v) any Person organized, appointed or established by the Company, any of its Subsidiaries or a
Holding Company for or pursuant to the terms of any plan described in clause
(iv). "Affiliate" and "Associate" have the respective meanings accorded to such
terms in Rule 12b-2 under the Exchange Act as in effect on the Effective Date. A
Person shall be deemed the "Beneficial Owner" of, and shall be deemed to
"beneficially own," securities pursuant to Rule 13d-3 under the Exchange Act as
in effect on the Effective Date. "Voting Stock" means securities of the Company
entitled to vote generally in the election of members of the Board. "Board"
means the Board of Directors of the Company. "Exchange Act" means the Securities
Exchange Act of 1934. "Holding Company" means an entity that becomes a holding
company for the Company or its businesses as a part of any reorganization,
merger, consolidation or other transaction, provided that the outstanding shares
of common stock of such entity and the combined voting power of the then
outstanding voting securities of such entity entitled to vote generally in the
election of directors is, immediately after such reorganization, merger,
consolidation or other transaction, beneficially owned, directly or indirectly,
by all or substantially all of the individuals and entities who were the
beneficial owners, respectively, of the Voting Stock outstanding immediately
prior to such reorganization, merger, consolidation or other transaction in
substantially the same proportions as their ownership, immediately prior to such
reorganization, merger, consolidation or other transaction, of such outstanding
Voting Stock.
IN WITNESS WHEREOF, the parties hereto have set their hands and seals on the date first set forth above.
DELTA AIR LINES, INC.
KEY EMPLOYEE
EXHIBIT B
NONQUALIFIED STOCK OPTION AWARD AGREEMENT
UNDER THE 1989 STOCK INCENTIVE PLAN
August 14, 1997
Leo F. Mullin
President & Chief Executive Officer
The 1989 Stock Incentive Plan of Delta Air Lines, Inc., as amended ("Plan"), is intended as an inducement for officers, executives and key employees of Delta Air Lines, Inc. (the "Company") to continue in the employment of the Company, and to provide a greater incentive to such employees to make material contributions to the Company's success by increasing their proprietary interest in the Company through increased direct stock ownership. The Plan, which provides for certain awards to eligible employees, is administered by the Personnel & Compensation Committee of the Board of Directors (the "Committee"). Pursuant to the Plan, the Committee selected you to receive an award of a Nonqualified Stock Option under the Plan, effective as of the close of business on August 14, 1997, and has instructed me, on behalf of the Company, to provide this Agreement to you.
In consideration of the mutual covenants herein contained and for other good and valuable consideration, the Company and you as an employee of the Company (hereinafter called "Employee"), do hereby agree as follows:
1. The Company hereby grants to Employee a Nonqualified Stock Option ("Stock Option") covering 500,000 shares of Stock, as defined in the Plan, a copy of which has been furnished to Employee. This award is in all respects made subject to the terms and conditions of the Plan and, by signing and returning a copy of this Agreement to the Secretary of the Company, Employee acknowledges that he has read this Agreement and the Plan and agrees to all of the terms and conditions thereof for himself, any designated beneficiary and his heirs, executors, administrators or personal representative. Terms used in this Agreement which are defined in the Plan shall have the meanings set forth in the Plan. In the event of any conflict between the Plan and this Agreement, the Plan shall control. Employee also acknowledges receipt of the Prospectus dated January 26, 1995, relating to the Plan.
2. The Option Price of the Stock Option covered by this award shall be $88.3125 per share, which price was the opening price of the Stock on the New York Stock Exchange (the "NYSE") on the date of this award.
3. Subject to the terms and conditions of the Plan and the other provisions of this Agreement, the Stock Option shall become exercisable in installments as follows, provided Employee continues to be employed by the Company on the dates indicated:
Number of Shares with
Respect to which Option
First Becomes Exercisable Date
------------------------- ----
200,000 August 14, 1998
100,000 August 14, 1999
100,000 August 14, 2000
100,000 August 14, 2001
|
In the event of the occurrence prior to August 14, 2001 of (i) a Change in Control or (ii) the termination of Employee's employment (A) by the Company without Cause, or (B) by Employee with Good Reason, the Stock Option shall immediately become fully exercisable. In the event of the termination of Employee's employment for any other reason prior to August 14, 2001, Employee shall forfeit that portion of the Stock Option attributable to Shares with respect to which the Stock Option has not previously become exercisable pursuant to this Paragraph 3. For purposes of this Agreement, the terms "Change in Control," "Cause" and "Good Reason" shall have the respective meanings assigned such terms for purposes of the Employment Agreement between Employee and the Company dated as of August 14, 1997.
4. Subject to the terms and conditions of the Plan and Paragraph 8 below, the Stock Option granted to Employee herein may be exercised during the period beginning as set forth in Paragraph 3 above and ending August 13, 2007, except as provided in Sections 5 and 10 of the Plan. In the event of termination of Employee's employment with the Company (i) by the Company without Cause, (ii) by Employee with Good Reason or (iii) on or after August 14, 2000 for any reason other than death or Disability (to the extent the Stock Option is otherwise exercisable pursuant to Paragraph 3 above), the termination of Employee's employment will be treated, for purposes of determining the terms of exercise of the Stock Option under Section 10(b) of the Plan, as having occurred because of Employee's Retirement. Subject to the terms and conditions of the Plan, Employee (or, if Employee is deceased, a party acting on his behalf pursuant to Section 10 of the Plan) may exercise the Stock Option granted herein in whole or, from time to time, in part by way of a written notice delivered to the Secretary of the Company which includes the following: (i) name, mailing address and social security number of Employee and the date, which shall be the actual date of the notice; (ii) the number of shares of Stock with respect to which the Stock
Option is being exercised; (iii) the date of grant and the Option Price with respect to the Stock Option being exercised; and (iv) the signature of Employee or a party acting on behalf of a deceased employee. Payment of the full purchase price of the shares of Stock covered by the exercise shall be made in the manner prescribed by the Committee from time to time. If the Committee, in its sole discretion, shall determine that it is appropriate to do so, such payment may be made in whole or in part by tender of shares of unrestricted Stock, as set forth in Section 5 of the Plan, subject to such requirements or procedures as the Committee may specify.
5. When the Stock Option is exercised, the Company shall make the appropriate calculations under the Plan and deliver to Employee, as soon as practicable, a certificate or certificates representing the net number of shares of Stock due to Employee pursuant to such exercise, calculated in accordance with this paragraph. Unless other tax withholding arrangements are made by Employee and the Company, the Company shall withhold from the shares of Stock issued to Employee a sufficient number of shares of Stock based on its fair market value on the date of exercise to cover any amounts which the Company is required to withhold to comply with withholding requirements of federal, state or local tax laws, rules or regulations. The fair market value for purposes of the second sentence of this paragraph shall be as reasonably determined by the Committee.
6. The Stock Option granted herein is not transferable otherwise than by will, by the laws of descent and distribution, or by a written designation referred to in Section 10(c) of the Plan, and is exercisable during Employee's lifetime only by Employee. In the event that the Stock Option is exercised pursuant to Section 10 of the Plan by any person other than Employee, such notice shall be accompanied by appropriate proof of the right of such person to exercise the Stock Option.
7. The Stock Option granted herein is subject to all terms of the Plan, including but not limited to Section 10(b), which provides for the forfeiture and repayment of certain benefits in certain circumstances in the event of Employee's Retirement prior to his normal retirement date.
8. Employee acknowledges that the federal securities laws and/or the Company's policies regarding trading in its securities may limit or restrict Employee's right to buy or sell shares of Stock, including, without limitation, sales of Stock to exercise the Stock Option or sales of Stock acquired pursuant to the exercise of the Stock Option. Employee agrees to comply with such federal securities law requirements and Company policies, as such laws and policies are amended from time to time.
This Agreement has been prepared in duplicate. Please note your acceptance in the space provided therefor and return the original for the Company's records.
IN WITNESS WHEREOF, the Company, acting through the Committee, has caused this Agreement to be duly executed, and Employee has hereunto set his hand, all as of the day and year first written above.
DELTA AIR LINES, INC.
EMPLOYEE
Exhibit C
RESTRICTED STOCK AWARD AGREEMENT
UNDER THE 1989 STOCK INCENTIVE PLAN
August 14, 1997
Leo F. Mullin
President & Chief Executive Officer
The 1989 Stock Incentive Plan of Delta Air Lines, Inc., as amended ("Plan"), is intended as an inducement for officers, executives and key employees of Delta Air Lines, Inc. (the "Company") to continue in the employment of the Company, and to provide a greater incentive to such employees to make material contributions to the Company's success by increasing their proprietary interest in the Company through increased direct common stock ownership. The Plan, which provides for certain awards to eligible employees, is administered by the Personnel & Compensation Committee of the Board of Directors (the "Committee"). Pursuant to the Plan, the Committee has selected you to receive an award of Restricted Stock (as defined in the Plan) effective as of the close of business on August 14, 1997, and has instructed me to direct this letter to you.
In consideration of the mutual covenants herein contained and for other good and valuable consideration, the Company and you as an employee of the Company (hereinafter called "Employee"), do hereby agree as follows:
1. Grant of Shares. Pursuant to action of the Committee, the Company has granted to Employee 6,000 shares of Restricted Stock (the "Shares"). This award is in all respects made subject to the terms and conditions of the Plan, a copy of which has been provided to Employee, and by signing and returning a copy of this Agreement to the Secretary of the Company, Employee acknowledges that he has read the Plan and agrees to all of the terms and conditions thereof for himself, any designated beneficiary and his heirs, executors, administrators or personal representative. Terms used in this Agreement which are defined in the Plan shall have the meanings set forth in the Plan. In the event of any conflict between the Plan and this Agreement, the Plan shall control. Employee also acknowledges receipt of the Prospectus dated January 26, 1995, relating to the Plan.
As soon as practicable following Employee's execution of this Agreement and the stock power described below in Section 6, a certificate or certificates representing the Shares and bearing the legend described below in Section 6 shall be issued to Employee. Upon issuance of the certificates representing the Shares,
Employee shall have all rights of a stockholder with respect to the Shares, including the right to vote and, subject to Section 10 of this Agreement, to receive all dividends or other distributions paid or made with respect to the Shares; provided, however, that the Shares (and any securities of the Company which may be issued with respect to the Shares by virtue of any dividend reinvestment, stock split, combination, stock dividend or recapitalization, which securities shall be deemed to the "Shares" hereunder) shall be subject to the terms and all of the restrictions set forth in this Agreement.
2. Restriction. Until the restriction imposed by this Section 2 (the "Restriction") has lapsed pursuant to Section 3 or 4 below, Employee shall not be permitted to sell, exchange, assign, transfer, pledge or otherwise dispose of the Shares and the Shares shall be subject to forfeiture as set forth in Section 5 below.
3. Lapse of Restriction by Passage of Time. The Restriction shall lapse and have no further force or effect with respect to 33-1/3% of the Shares (including 33-1/3% of any additional Shares which at the time have been purchased with dividends on the Shares) awarded hereunder on July 1 of each of 1998, 1999 and 2000, provided Employee remains employed by the Company on such dates. If Employee's employment is terminated because of Retirement prior to his Normal Retirement Date as determined under the qualified retirement or pension plan of the Company applicable to Employee, and within two years after any such early Retirement and without the Committee's approval Employee directly or indirectly provides management or executive services (whether as a consultant, advisor, officer or director) to any Person who is in direct and substantial competition with the air transportation business of the Company or its Subsidiaries, Employee shall be required to repay to the Company the cash value of any Shares and any cash which were vested at such early Retirement. The amount of such repayment shall be the closing price of the Company's common stock ("Common Stock") on the New York Stock Exchange ("NYSE") on the day that the Restriction on such Shares lapsed (or, in the event that no sale of the Common Stock takes place on the NYSE on such date, the closing price of the Common Stock on the NYSE on the immediately preceding date on which such a sale occurred) multiplied by the number of such Shares. Because of the broad and extensive scope of the Company's air transportation business, the restrictions contained in this provision are intended to extend to management or executive services which are directly related to the provision of air transportation services into, within, or from the United States, as no smaller geographical restriction will adequately protect the legitimate business interests of the Company.
4. Lapse of Restriction in Certain Cases. The Restriction shall lapse
and have no further force or effect with respect to all Shares hereunder upon
(a) the occurrence of a Change in Control or (b) termination of Employee's
employment (i) by the Company without Cause, (ii) by Employee with Good Reason or (iii) by reason of Employee's death or Disability (as defined in the Plan). For this purpose, the terms "Change in Control," "Cause" and "Good Reason" shall have the respective meanings assigned such terms for purposes of the Employment Agreement between Employee and the Company dated as of August 14, 1997. Employee may provide to the Company written designation naming a person or persons who shall receive the Shares in the event of Employee's death, and such designation must be in a form approved by counsel for the Company. If there is no such approved designation, Shares shall be distributed upon Employee's death pursuant to Employee's last will and testament or as provided by law.
5. Forfeiture of Shares. In the event of termination of Employee's
employment with the Company other than in the circumstances described in clauses
(i), (ii) or (iii) of Section 4(b) and prior to lapse of the Restriction under
Section 3, Employee shall immediately forfeit all right, title, and interest to
the Shares which are still subject to the Restriction, and such Shares shall be
canceled or transferred to the Company by Employee, without consideration to
Employee or his heirs, executors, administrators or personal representative.
6. Endorsement and Retention of Certificates. All certificates representing the Shares shall be endorsed on the face thereof with the following legend:
"The shares of stock represented by this certificate and the sale, transfer or other disposition of such shares are restricted by and subject to a Restricted Stock Award Agreement dated August 14, 1997 between Leo F. Mullin and the Company, a copy of which is on file with the Secretary of the Company."
All certificates for Shares shall be held by the Company until the restrictions thereon shall have lapsed, and as a condition to this award, Employee shall execute and deliver to the Company a stock power, endorsed in blank and approved by counsel for the Company, relating to the Shares, as set forth in the Plan.
Upon lapse of the Restriction pursuant to Section 3 or 4 of this Agreement without a prior forfeiture of the Shares, a certificate or certificates for an appropriate number of unrestricted Shares shall be delivered to Employee and the certificate with the legend indicated above shall be canceled.
7. Withholding Taxes. Upon lapse of the Restriction on the Shares pursuant to Section 3 or 4 above, unless other tax withholding arrangements are made by Employee and the Company, sufficient Shares shall be transferred to the Company to provide for the payment of any taxes required to be withheld by federal, state, or local law with respect to income resulting from such lapse. The value of the Shares so transferred shall be the closing price of the Common Stock on the NYSE on the date the Restriction lapses (or, in the event that no sale of the Common Stock takes place on the NYSE on such date, the closing price of the Common Stock on the NYSE on the immediately preceding date on which such a sale occurred).
8. Rights Not Enlarged. Nothing herein confers on Employee any right to continue in the employ of the Company or any of its subsidiaries.
9. Succession. This Agreement shall be binding upon and operate for the benefit of the Company and its successors and assigns, and Employee and his heirs, executors, administrators or personal representative.
10. Dividends. Any cash dividends which may become payable on the Shares shall be reinvested by the Company in shares of Common Stock, to the extent Shares are available under the Plan. If Shares are not so available, dividends shall be paid in cash and held by the Company for the account of Employee until the Restriction lapses. In such event the Company shall pay interest on the amount so held as determined by the Committee, and the accumulated amount of such dividends and interest shall be payable to Employee upon the lapse of the Restriction. Those Shares and any cash held for the account of the Employer shall be governed by the Restriction set forth in the Agreement; the Restriction with respect to such Shares and such cash shall lapse as provided in Sections 3 and 4 of this Agreement; and such Shares and such cash shall be forfeited pursuant to Section 5 to the extent that the Shares on which such dividends were paid shall be so forfeited.
11. Fractional Shares. Upon lapse of the Restriction, certificates for fractional Shares shall not be delivered to Employee, and the value of any fractional Shares which may result from the application of Section 3 or 4 of this Agreement shall be paid in cash to Employee, as determined in the last sentence of Section 7 above.
This Agreement has been prepared in duplicate. Please note your acceptance in the space provided below, and return the original for the Company's records.
IN WITNESS WHEREOF, the Company, acting through the Committee, has caused this Agreement to be duly executed and Employee has hereunto set his or her hand, all as of the day and year first written above.
DELTA AIR LINES, INC.
EMPLOYEE
EXHIBIT 10.2
AGREEMENT AND GENERAL RELEASE
THIS AGREEMENT AND GENERAL RELEASE ("Agreement") is made and
entered into by and between Delta Air Lines, Inc. (hereinafter
referred to as "Delta") and Thomas J. Roeck, Jr. (hereinafter
referred to as "Executive").
W I T N E S S E T H:
WHEREAS, Executive has decided to retire from employment with Delta; and
WHEREAS, Executive and Delta are entering into this Agreement to resolve all outstanding issues and matters of every type and description between Executive, on the one hand, and Delta and its officers, directors, fiduciaries, and employees, on the other.
NOW, THEREFORE, in consideration of the premises and mutual promises and agreements herein contained, IT IS AGREED AS FOLLOWS:
1. Effective December 1, 1997, Executive retired from employment with Delta and has resigned from all other positions with Delta's subsidiaries and affiliates.
2. Executive represents and agrees that he has had a full and adequate
opportunity to discuss and consider this Agreement and all claims and
contentions he has with respect to this matter. Further, Executive represents
and agrees that: (1) this Agreement is written in a manner that he understands;
(2) this Agreement and the promises made in this Agreement by Executive
are granted in exchange for consideration which is in addition to anything of value to which Executive is otherwise entitled; (3) Executive has been advised and has had an opportunity to consult with (and has consulted with) an attorney prior to deciding whether to enter into this Agreement; and (4) Executive has been given at least twenty-one (21) days within which to consider this Agreement.
3. Delta and Executive represent and acknowledge that in executing this Agreement, they did not rely upon and have not relied upon any written or oral representations or statements not expressly a part hereof that have been made by any party to this Agreement, or by the agents, representatives, or attorneys of any party with regard to the subject matter, basis, or effect of this Agreement. This document embodies the entire agreement of the parties with respect to the subject matter hereof. All statements and writings which pre-date the execution hereof are superseded hereby.
4. In exchange for the consideration provided by Delta pursuant to this Agreement, Executive further enters into the following release (hereinafter the "General Release"):
(a) Except for the rights and obligations expressly provided by or arising under this Agreement, or under or pursuant to Delta sponsored or established benefits and plans, Executive hereby releases, acquits, withdraws, retracts and forever discharges any and all claims, manner of actions, causes of
action, in law or in equity, suits, judgments, debts, liens, contracts, agreements, promises, liabilities, demands, damages, losses, costs, expenses or disputes, known or unknown, fixed or contingent, which he now has or may have hereafter, directly or indirectly, personally or in a representative capacity, against Delta, and its predecessors, successors, administrators, fiduciaries, officers, (including its Chairman of the Board, Chief Executive Officer, Chief Operating Officer, and all Executive and Senior Vice Presidents), directors, shareholders, representatives, agents, employees, and all persons acting through or in connection with Delta, by reason of any act, omission, matter, cause or thing whatsoever, from the beginning of time to, and including, the date of execution of this Agreement. This General Release includes, but is not limited to, all claims, manner of actions, causes of action in law or in equity, suits, judgments, debts, liens, contracts, agreements, promises, liabilities, demands, damages, losses, costs, expenses or disputes, known or unknown, fixed or contingent, which arise under Title VII of the Civil Rights Act of 1964, as amended; The Age Discrimination in Employment Act of 1967, as amended; The Americans with Disabilities Act; The Rehabilitation Act of 1973, as amended; The Family and Medical Leave Act; 42 U.S.C. Sections 1981 through 1988; any other federal, state or local statute, ordinance, and law respecting discriminatory hiring or employment practices or civil rights laws based on protected class status; common law claims for intentional or negligent infliction of
emotional distress, defamation, negligent hiring, breach of the covenant of
good faith and fair dealing, promissory estoppel, negligence, wrongful
termination of employment, interference with prospective economic advantage,
violation of civil rights and all other claims of every type or nature
including any claims for attorneys' fees (other than as set forth in Paragraph
5.f. of this Agreement). The parties intend that this release shall discharge
all claims against the released parties to the extent permitted by law.
5. Eight (8) days following Delta's receipt of a fully executed copy
of this Agreement and the passage of the seven (7) day waiting and rescission
period provided for by Paragraph 15 hereof, but no earlier than January 5, 1998
(the "Effective Date"), Delta will (so long as Executive has not exercised his
rescission rights hereunder) provide Executive with, or make arrangements for,
subject to withholding and other taxes and deductions as provided for by law,
the following:
a. A lump sum severance payment of One Million Two Hundred
Ninety-Four Thousand Five Hundred Ninety-Four Dollars and Ninety-Eight
Cents ($1,294,594.98), which shall not be included in "Earnings" under
any Delta sponsored benefit plan.
b. For purposes of calculating Executive's "Supplemental Retirement Income" payable under Section 3 of the Excess Benefit Agreement between Executive and Delta dated November 11, 1991 (the "Excess Benefit Agreement") and
for purposes of calculating the "Supplemental Monthly Survivor Income" under Section 5 of the Excess Benefit Agreement, Executive shall be credited with an additional five years of "Credited Service" as that term is defined in the Delta Family-Care Retirement Plan and the Delta Family- Care Disability and Survivorship Plan. In no event, however, shall any amount payable as the result of this additional service credit be paid from Delta's qualified plans. Further, Executive shall be credited with five (5) additional years of service for purposes of calculating any service related premium which may be payable under the Delta Family-Care Medical Plan or any successor plan, and any extra amount that may be payable to Executive as a result of such additional years of service may be paid from the Delta Supplemental Excess Benefit Plan.
c. For purposes of Delta's Officer Life Insurance Program, Executive shall be deemed to have retired at age 65 such that Executive shall receive continued group life insurance coverage until June 30, 1998 in the amount of $610,000, and effective July 1, 1998, Delta shall provide Executive with a paid up single premium life insurance policy with a face value death benefit of $610,000.
d. Executive's existing stock options covering a total of 151,800 shares of common stock of Delta, and his restricted stock award covering a total of approximately 2,417 shares, each as of November 30, 1997 under Delta's
1989 Stock Incentive Plan (as amended through October 23, 1997) (the "Stock Incentive Plan") and the award agreements issued to Executive thereunder, shall continue in accordance with their terms as applicable to Executive's retirement; provided, however, that for all purposes of the Stock Incentive Plan and the award agreements thereunder, Executive's retirement in accordance with this Agreement shall be deemed retirement at Executive's normal retirement date (as defined under the Stock Incentive Plan and the award agreements).
e. Provide first-class, positive space transportation privileges on Delta's system to Executive and his spouse during his lifetime, but only if within three (3) years from the date hereof (1) Delta adopts a program generally providing such privileges to Senior Vice Presidents who retire prior to age 65, or (2) Delta provides such privileges to any retired Senior Vice President or Executive Vice President who retires prior to age 65.
f. Payment of the reasonable attorneys fees and expenses not to exceed Ten Thousand Dollars ($10,000.00) to Executive's legal counsel, Arnall, Golden & Gregory, for its services in connection with the provision of advice to Executive and preparation of this Agreement.
g. Except as provided by Paragraphs (a) through (f) of this Paragraph 5, it is agreed that as of December 1, 1997, Executive shall be entitled to no other payment,
benefits or perquisites from Delta or any of its subsidiaries on account of his former employment by, or his retirement from, Delta and its subsidiaries, except as a retiree under Delta sponsored benefit programs or plans and except as set forth in the Excess Benefit Agreement as may be modified by this Agreement.
h. Delta represents that all approvals or other actions required by its Stock Incentive Plan and Awards Agreements to effectuate the provisions hereof have been or will be obtained prior to the Effective Date, and that the members of the Personnel & Compensation Committee of Delta's Board of Directors providing such approvals are not employees of Delta.
The monies and benefits received under this Agreement shall include all attorneys' fees and costs of every type and description. Executive agrees that such payments constitute full and adequate consideration for the agreements and obligations of Executive as set forth herein, and agrees that there are no additional sums owed to Executive by virtue of his employment with Delta, including but not limited to unreimbursed costs or expenses incurred by Executive on behalf of Delta. This Agreement shall supersede the Executive Retention Protection Agreement dated as of August 1, 1997 between Delta and Executive, which Executive Retention Protection Agreement shall have no further force or effect.
6. Executive acknowledges that Delta has separately bargained for and paid additional consideration for the restrictive covenants provided for herein, and that Delta will provide certain benefits to Executive hereunder in reliance upon such covenants, in view of the unique and essential nature of the services Executive has performed on behalf of Delta, the unique and strategically critical knowledge and information Executive has accumulated during his service to Delta, and the irreparable injury that would befall Delta should Executive breach such covenants. Executive's services have been of a special, unique and extraordinary character, and his position with Delta has placed him in a position of confidence and trust with employees of Delta and its subsidiaries and with Delta's other constituencies and has allowed him access to confidential and proprietary information concerning Delta and its subsidiaries. Moreover, the business of Delta has expanded into and now includes air transportation services to and from major markets throughout the world. All such markets are either now actively served by Delta or are under active and ongoing study with respect to possible expansion, an ongoing process of expansion in which Executive was involved. Accordingly, the types, periods and geographic scope of the restrictions imposed by the covenants in this Paragraph 6 are fair and reasonable in light of Executive's positions as recited above and the character of Executive's services, and such restrictions will not prevent Executive from earning a livelihood, especially in view of the
substantial compensation to be paid hereunder for these covenants.
(a) During the term of Executive's employment with Delta, Executive has also acquired knowledge of confidential and proprietary information regarding, among other things, Delta's present and future operations, its customers and suppliers, pricing strategies, its compensation and incentive programs for employees and the methods used by Delta and its employees. Executive hereby agrees that he will hold in a fiduciary capacity for the benefit of Delta, and shall not directly or indirectly use or disclose, any Trade Secret, as defined hereinafter, that Executive may have acquired during the term of his employment by Delta for so long as such information remains a Trade Secret. The term "Trade Secret" as used in this Agreement shall mean information including, but not limited to, technical or nontechnical data, a formula, a pattern, a compilation, a program, a device, a method, a technique, a drawing, a process, financial data, financial plans, product plans, or a list of actual or potential customers or suppliers which:
(1) derives economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; and
(2) is the subject of reasonable efforts by Delta to maintain its secrecy.
(b) Until December 1, 2000, Executive will hold in a fiduciary capacity for the benefit of Delta, and shall not directly or indirectly use or disclose, any Confidential or Proprietary Information, as defined hereinafter, that Executive may have acquired (whether or not developed or compiled by Executive and whether or not Executive was authorized to have access to such Information) during the term of, in the course of, or as a result of his employment by Delta. Subject to the provisions set forth below, the term "Confidential or Proprietary Information" as used in this Agreement means the following secret, confidential and proprietary information of Delta not otherwise included in the definition of "Trade Secret" above: all marketing and sales strategies, all pricing information, all financial and product development plans, all compensation and incentive programs for employees and all lists of actual or potential customers or suppliers maintained by Delta. The term "Confidential and Proprietary Information" does not include information that has become generally available to the public by the act of one who has the right to disclose such information.
(c) Until December 1, 1999, Executive shall not, directly or indirectly, provide management or executive services (whether as a consultant, adviser, officer or director) to any of the following companies or their majority-owned subsidiaries or affiliates (or any successor to the air transportation business thereof): AMR Corporation, Continental Airlines, Inc., Northwest Airlines Corporation, Southwest Airlines Co., Trans World
Airlines, Inc., UAL Corporation, AirTran Airlines, Inc., and US Airways Group, Inc.; it being understood that each of the foregoing companies or their majority-owned subsidiaries or affiliates participates in the air transportation business in direct and substantial competition with Delta; provided, however, that the provisions of this paragraph shall not prevent Executive from owning any debt securities of, or less than five percent (5%) of any class of equity security of, any such company if such security is registered under Section 12 of the Securities Exchange Act of 1934, as amended. The restrictions contained in this subsection shall replace and supersede the restrictions of Section 8 of the Excess Benefit Agreement.
(d) Until December 1, 1999, Executive shall not solicit or advise any person who is at the time an employee of Delta or any of its subsidiaries at the management or executive level to accept employment with or to provide his services to any other company or enterprise (including, without limitation, any non-profit or governmental enterprise or body).
(e) Executive agrees and acknowledges that, if a violation of any covenant contained in this Paragraph 6 occurs or is threatened, such violation or threatened violation will cause irreparable injury to Delta, that the remedy at law for any such violation or threatened violation will be inadequate and that Delta shall be entitled to appropriate equitable relief.
7. Executive agrees and covenants that he shall, to the extent requested in writing and reasonable under all
circumstances, cooperate with and serve in any capacity requested by Delta in any pending or future litigation in which Delta is a party, and regarding which Executive, by virtue of his employment with Delta, has knowledge or information relevant to said litigation, including, but not limited to, acting as the Delta representative, on behalf of Delta, in any said litigation.
8. Nothing in the within Agreement should be construed as a release by Executive of, or an agreement by Executive not to bring, a legal proceeding on any matter, cause, acts, conduct, claims, or events which may occur after the Effective Date of this Agreement.
9. (a) Executive agrees that the nature, terms, conditions, and
substance of this Agreement, including specifically but without limitation the
payments and consideration provided to Executive hereby, are strictly
confidential and shall be kept confidential by him and all of his agents,
representatives, employees, attorneys and spouses and shall not be disclosed at
any time to any other person or entity whomsoever without the prior written
consent of Delta, except to the extent Delta intentionally places the terms
hereof in the public domain or such information becomes public through no act
of Executive and except as to the amounts which may be disclosed by Executive:
(1) as necessary in the course of preparing and filing appropriate tax returns
or dealing with federal or state taxing or other governmental authorities; and
(2) in the
performance of personal or business financial planning. In addition, any term hereof may be disclosed during any lawsuit or other proceeding brought to enforce the terms of this Agreement or as required pursuant to legal subpoena or court order. It is expressly understood, however, that it is Delta's intent to strictly enforce the terms of this confidentiality provision and that it intends to exercise all of its rights to the extent provided by the law if there is a breach of this provision of this Agreement.
(b) Executive agrees that upon the receipt of a subpoena or other legal request for information contained in or regarding the nature, terms, conditions, or substance of this Agreement, Executive shall promptly notify Delta in writing of such request and shall give Delta the opportunity to object to the disclosure of such information before responding to any such request. Such written notification shall be sent to Delta as specified in Paragraph 15.
(c) In the event Executive violates the provisions set forth in this Section, Executive specifically agrees that Delta shall have no adequate remedy at law for a breach thereof and will be entitled to declaratory and injunctive relief against Executive to remedy any breach of the terms of this Section.
10. This Agreement may be amended or modified only by a written instrument, signed by Delta and Executive, that expressly sets forth the parties intention to amend or modify this
Agreement. No condition, term, or provision of this Agreement may be waived by any party except in a writing, signed by the party or its authorized representative, that expressly sets forth the party's intention to waive a condition, term or provision of this Agreement.
11. This Agreement shall not be used in any proceeding or for any other purpose, except to enforce provisions of the Agreement. All negotiations, proceedings and statements made in connection herewith shall be without prejudice to any person or party hereto, shall not be deemed or construed to be admissions by any party of any act, omission, matter or proposition, and shall not be used in any manner or for any purpose in any proceeding or for any other purpose. Delta and Executive further agree and acknowledge that this Agreement is the result of a compromise and shall never at any time for any purpose be construed as an admission by Delta of any liability. Delta specifically disclaims any liability to Executive or to any other person or entity.
12. The provisions of this Agreement shall not be severable, one from the other, except that the releases granted in Paragraph 4 shall be severable from all other provisions of this Agreement, and enforceable in accordance with their terms, notwithstanding the invalidity or unenforceability of any other provision of this Agreement.
13. Executive acknowledges, warrants and represents that this Agreement is executed by him knowingly and voluntarily, and that he has not been coerced in any way to execute this Agreement. Executive acknowledges, warrants and represents that his decision to execute this Agreement is not based upon any representations or statements of any kind by any person or party as to the merits, legal liability or value of the claims he may have or may have had. Executive also acknowledges, warrants and represents that no promise or inducement has been offered or made except as herein set forth.
14. This Agreement is executed with the full knowledge and understanding on the part of Executive that there may be issues, actions, claims, and matters which are not now known, and that any payment or benefits conferred herein to Executive in consideration of this Agreement are accepted as final. Executive further agrees and represents that it is within his contemplation that he may have claims against Delta and the other parties released hereby, or any of them, of which at the time of the execution of this Agreement, he has no knowledge or suspicion, but he agrees and represents that this Agreement extends to all claims in any way based upon, connected with or related to the matters released herein, whether or not known, claimed or suspected by him.
15. In order to comply with the provisions of the Older Workers' Benefit Protection Act, 29 U.S.C. Section 626(f), Executive
may, at any time for seven (7) days following the date of execution of this Agreement, revoke this Agreement by giving written notice as provided below. In such a case, this Agreement shall be deemed terminated, and of no force and effect. All notices to be given to Delta under this Agreement must be made in writing by certified or registered mail to: Delta Air Lines, Inc., General Office, 1030 Delta Boulevard, Atlanta, Georgia 30320, Attention: General Counsel; and to Executive at: 185 Inland Ridge Way, Atlanta, Georgia 30342.
16. This Agreement shall be construed in accordance with the laws of the State of Georgia, without giving effect to the principles, policies or provisions thereof concerning conflict or choice of laws.
17. As used in this Agreement, the masculine shall include the feminine or neuter gender, and the singular shall include the plural, whenever the context so indicates or requires.
18. This Agreement shall be binding upon and inure to the benefit of Executive and his heirs, administrators, representatives, executors, and assigns. This Agreement shall be binding upon and inure to the benefit of Delta and its successors, and past, current and future fiduciaries, officers, directors, shareholders, administrators, agents, employees, and assigns.
19. This Agreement sets forth the complete and exclusive statement of the terms of the agreement between the parties hereto and fully supersedes any and all prior agreements between the parties hereto (oral or in writing) or understandings between the parties hereto pertaining to the subject matter hereof except for the Excess Benefit Agreement which shall remain in effect, except as modified by this Agreement.
20. Except for the rights and obligations expressly provided by or arising under this Agreement, or under or pursuant to Delta sponsored or established benefits and plans, Delta hereby releases, acquits, withdraws, retracts and forever discharges any and all claims, manner of actions, causes of action, in law or in equity, suits, judgments, debts, liens, contracts, agreements, promises, liabilities, demands, damages, losses, costs, expenses or disputes, known or unknown, fixed or contingent, which it now has or may have hereafter, directly or indirectly, against Executive and his representatives and administrators, by reason of any act or omission of Executive known to Delta from the beginning of time to, and including, the date of execution of this Agreement. This release does not, however, include any facts, claims or matters unknown or undisclosed to Delta as of the Effective Date, but this release does include all known and disclosed claims, manner of actions, causes of action in law or in equity, suits, judgments, debts, liens, contracts, agreements, promises, liabilities, demands, damages, losses, costs, expenses or disputes, fixed or
contingent, which arise under Title VII of the Civil Rights Act of 1964, as amended; The Age Discrimination in Employment Act of 1967, as amended; The Americans with Disabilities Act; The Rehabilitation Act of 1973, as amended; The Family and Medical Leave Act; 42 U.S.C. Sections 1981 through 1988; any other federal, state or local statute, ordinance and law respecting discriminatory hiring or employment practices or civil rights laws based on protected class status; common law claims for intentional or negligent infliction of emotional distress, defamation, negligent hiring, breach of the covenant of good faith and fair dealing, promissory estoppel, negligence, wrongful termination of employment, interference with prospective economic advantage, violation of civil rights and all other claims of every type or nature including any claims for attorneys' fees. The parties intend that this release shall discharge all claims against the released parties to the extent permitted by law.
Executed at Atlanta, Georgia this 22nd day of December, 1997.
/s/ Jeffrey B. Stuart /s/ Thomas J. Roeck, Jr. --------------------------- ------------------------------------------ Witness Thomas J. Roeck, Jr. |
Executed at Atlanta, Georgia this 24th day of December, 1997.
Delta Air Lines, Inc.
/s/ Leslie P. Klemperer By: /s/ Leo F. Mullin -------------------------- ------------------------------------- Witness Its: President and Chief Executive Officer |
PURCHASE AGREEMENT NUMBER 2022
between
THE BOEING COMPANY
and
DELTA AIR LINES, INC.
Relating to Boeing Model 737-632/-732/-832 Aircraft
P.A. No. 2022
TABLE OF CONTENTS
SA
ARTICLES NUMBER
-------- ------
1. Quantity, Model and Description
2. Delivery Schedule
3. Price
4. Payment
5. Miscellaneous
TABLE
-----
1. Aircraft Information Table
2. Option Aircraft Information Table
3. *
EXHIBIT
-------
A. Aircraft Configuration
SUPPLEMENTAL EXHIBITS
---------------------
BFE/CDSPE/SPE/CSE. Buyer Furnished Equipment, Customer Directed Seller
Purchased Equipment, Seller Purchased Equipment and Cabin
Systems Equipment Variables
CS1. Customer Support Variables
EE1. Engine Escalation
*
SLP1. Service Life Policy Components
|
*This confidential information has been omitted and filed separately with the Commission.
P.A. No. 2022
SA
LETTER AGREEMENTS NUMBER
----------------- ------
6-1162-RLL-2147 Airframe Maintenance Cost Protection Program
6-1162-RLL-2191 Multiple Aircraft Operating Weights
6-1162-RLL-2198 Delivery Price Adjustment
6-1162-RLL-2233 Aircraft Performance Guarantees
6-1162-RLL-2234 Special Matters
6-1162-RLL-2240 *
6-1162-RLL-2241 Promotion Support
6-1162-RLL-2242 1997 and 1998 Escalation Sharing
6-1162-RLL-2243 *
6-1162-RLL-2244 Performance Retention Commitment
6-1162-RLL-2245 Certain Contractual Matters
6-1162-RLL-2247 *
6-1162-RLL-2251 Total Cost Team
6-1162-RLL-2400 Open Configuration Matters
6-1162-RLL-2424R1 Engine Matters SA1
|
*This confidential information has been omitted and filed separately with the Commission.
P.A. No. 2022
Purchase Agreement No. 2022
between
The Boeing Company
and
DELTA AIR LINES, INC.
This Purchase Agreement No. 2022 dated as of October 21, 1997 between The Boeing Company (Boeing) and DELTA AIR LINES, INC. (Customer) relating to the purchase and sale of Model 737-832 aircraft incorporates the terms and conditions of the Aircraft General Terms Agreement dated as of October 21, 1997 between the parties, identified as AGTA-DAL (AGTA).
Article 1. Quantity, Model and Description.
The aircraft to be delivered to Customer will be designated as Model 737-832 aircraft (the Aircraft). Boeing will manufacture and sell to Customer Seventy (70) Aircraft to conform to the configuration described in Exhibit A, which is part of this Purchase Agreement.
Article 2. Delivery Schedule.
The scheduled months of delivery of the Aircraft are listed in the attached Table 1, which is part of this Purchase Agreement.
Article 3. Price.
3.1 Aircraft Basic Price. The Aircraft Basic Price for each Aircraft is subject to escalation, as listed in Table 1.
3.2 Advance Payment Base Prices. The Advance Payment Base Price and the Advance Payment Schedule for each Aircraft is listed in Table 1.
Article 4. Payment.
Advance Payments and payments at Delivery by Customer will be in accordance with Article 2 of the AGTA.
P.A. No. 2022 1
Article 5. Miscellaneous.
5.1 Aircraft Information Table. Table 1 consolidates information contained in Articles 1, 2, 3 and 4 with respect to (i) quantity of Aircraft, (ii) applicable Detail Specification, (iii) month and year of scheduled deliveries, (iv) Aircraft Basic Price, (v) applicable escalation factors and (vi) Advance Payment Base Prices and advance payments and their schedules.
5.2 Buyer Furnished Equipment Variables. Supplemental Exhibit BFE/CDSPE/SPE/CSE contains vendor selection dates, on dock dates and other variables applicable to the Aircraft.
5.3 Customer Support Variables. Supplemental Exhibit CS1 contains the variable information applicable to information, training services and other things furnished by Boeing in support of the Aircraft.
5.4 Engine Escalation Variables. Supplemental Exhibit EE1 contains the applicable engine escalation formula, the engine warranty and the engine patent indemnity for the Aircraft.
5.5 *This confidential information has been omitted and filed separately with the Commission.
5.6 Service Life Policy Component Variables. Supplemental Exhibit SLP1 lists the airframe and landing gear components covered by the Service Life Policy for the Aircraft.
P.A. No. 2022
5.7 Negotiated Agreement; Entire Agreement. This Purchase Agreement, including the provisions of Article 11.2 of the AGTA relating to insurance, and Article 12 of Part 2 of Exhibit C of the AGTA relating to DISCLAIMER AND RELEASE and EXCLUSION OF CONSEQUENTIAL AND OTHER DAMAGES, has been the subject of discussion and negotiation and is understood by the parties; the Aircraft Price and other agreements of the parties stated in this Purchase Agreement were arrived at in consideration of such provisions. This Purchase Agreement, including the AGTA, contains the entire agreement between the parties and supersedes all previous proposals, understandings, commitments or representations whatsoever, oral or written, and may be changed only in writing signed by authorized representatives of the parties.
* * * * * * * * * * * * * * * *
DELTA AIR LINES, INC. THE BOEING COMPANY
By /s/ Leo F. Mullin By /s/ R.B. Woodard
------------------------- --------------------
Its President and CEO Its President
------------------------- --------------------
|
P.A. No. 2022
TABLE 1 TO AGTA AND
PURCHASE AGREEMENT NO. 2022
AIRCRAFT DELIVERY, DESCRIPTION, PRICE AND ADVANCE PAYMENTS
AIRFRAME MODEL/MTGW: 737-832 * DETAIL SPECIFICATION: D6-38808-G (4/29/97)
ENGINE MODEL/THRUST LEVEL: CFM56-7B24 * PRICE BASE YEAR: *
AIRFRAME PRICE: *
OPTIONAL FEATURES: *
AIRFRAME AND ENGINE ESCALATION DATA:
SUB-TOTAL OF AIRFRAME AND FEATURES: * BASE YEAR INDEX (ECI): *
ENGINE PRICE (PER AIRCRAFT): * BASE YEAR INDEX (ICI): *
BUYER FURNISHED EQUIPMENT (BFE) ESTIMATE: *
SELLER PURCHASED EQUIPMENT (SPE) ESTIMATE: *
AIRCRAFT BASIC PRICE (EXCLUDING BFE/SPE): *
REFUNDABLE DEPOSIT PER AIRCRAFT AT PROPOSAL ACCEPTANCE: *
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* * * *
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DELIVERY O NUMBER OF * * * * * * *
------------------------------------------------------------------------------------------------------
DATE P AIRCRAFT * * * * * * *
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1998
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* * * * * * * * *
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* * * * * * * * *
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* * * * * * * * *
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* * * * * * * * *
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1999
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* * * * * * * * *
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2001
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* * * * * * * * *
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* * * * * * * * *
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* * * * * * * * *
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*This confidential information has been omitted and filed separately with the Commission.
P.A. No. 2022
TABLE 1 TO AGTA AND
PURCHASE AGREEMENT NO. 2022
AIRCRAFT DELIVERY, DESCRIPTION, PRICE AND ADVANCE PAYMENTS
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* * * *
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DELIVERY O NUMBER OF * * * * * * *
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DATE P AIRCRAFT * * * * * * *
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2002
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*This confidential information has been omitted and filed separately with the Commission.
P.A. No. 2022
TABLE 1 TO AGTA AND
PURCHASE AGREEMENT NO. 2022
AIRCRAFT DELIVERY, DESCRIPTION, PRICE AND ADVANCE PAYMENTS
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*This confidential information has been omitted and filed separately with the Commission.
P.A. No. 2022
TABLE 1 TO AGTA AND
PURCHASE AGREEMENT NO. 2022
AIRCRAFT DELIVERY, DESCRIPTION, PRICE AND ADVANCE PAYMENTS
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* * * *
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DELIVERY O NUMBER OF * * * * * * *
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DATE P AIRCRAFT * * * * * * *
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ANNUAL
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*This confidential information has been omitted and filed separately with the Commission.
P.A. No. 2022
TABLE 2
TO
THE AGTA AND PURCHASE AGREEMENT NO. 2022
737-832 OPTION AIRCRAFT DELIVERY, DESCRIPTION, PRICE AND ADVANCE PAYMENTS
AIRFRAME MODEL/MTGW: 737-832 * DETAIL SPECIFICATION: D6-38808-G (4/29/97)
ENGINE MODEL/THRUST LEVEL: CFM56-7B24 * PRICE BASE YEAR: *
AIRFRAME BASE PRICE: *
OPTIONAL FEATURES: * AIRFRAME AND ENGINE ESCALATION DATA:
SUB-TOTAL OF AIRFRAME AND FEATURES: * BASE YEAR INDEX (ECI): *
ENGINE PRICE (PER AIRCRAFT): * BASE YEAR INDEX (ICI): *
BUYER FURNISHED EQUIPMENT (BFE) ESTIMATE: *
SELLER PURCHASED EQUIPMENT (SPE) ESTIMATE: *
AIRCRAFT BASIC PRICE (EXCLUDING BFE/SPE): *
NON-REFUNDABLE DEPOSIT PER AIRCRAFT AT DEFINITIVE AGREEMENT: *
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*This confidential information has been omitted and filed separately with the Commission.
P.A. No. 2022
TABLE 2
TO
THE AGTA AND PURCHASE AGREEMENT NO. 2022
737-832 OPTION AIRCRAFT DELIVERY, DESCRIPTION, PRICE AND ADVANCE PAYMENTS
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P.A. No. 2022
TABLE 2
THE AGTA AND PURCHASE AGREEMENT NO. 2022
737-832 OPTION AIRCRAFT DELIVERY, DESCRIPTION, PRICE AND ADVANCE PAYMENTS
------------------------------------------------------------------------------------------------------------------------------
* * * *
------------------------------------------------------------------------------------------------------------------------------
DELIVERY NUMBER OF * * * * * * *
------------------------------------------------------------------------------------------------------------------------------
DATE AIRCRAFT * * * * * * *
------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
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* * * * * * * * *
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* * * * * * * * *
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* * * * * * * * *
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* * * * * * * * *
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* * * * * * * * *
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* * * * * * * * *
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* * * * * * * * *
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* * * * * * * * *
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* * * * * * * * *
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* * * * * * * * *
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P.A. No. 2022
TABLE 2
TO
THE AGTA AND PURCHASE AGREEMENT NO. 2022
737-632/-732/-832 ROLLLING OPTION AIRCRAFT DELIVERY
----------------------------------------------------------------------------------
2006 2007 2008 2009 2010 2011 2012
----------------------------------------------------------------------------------
* * * * * * *
----------------------------------------------------------------------------------
* * * * * * *
----------------------------------------------------------------------------------
* * * * * * *
----------------------------------------------------------------------------------
* * * * * * *
----------------------------------------------------------------------------------
* * * * * * *
----------------------------------------------------------------------------------
* * * * * * *
----------------------------------------------------------------------------------
* * * * * *
----------------------------------------------------------------------------------
* * * * * *
----------------------------------------------------------------------------------
* * * * * *
----------------------------------------------------------------------------------
* * * * * *
----------------------------------------------------------------------------------
* * * * * *
----------------------------------------------------------------------------------
* * * * * *
----------------------------------------------------------------------------------
------------------------------------------------------
2013 2014 2015 2016 2017
------------------------------------------------------
* * * * *
------------------------------------------------------
* * * * *
------------------------------------------------------
* * * * *
------------------------------------------------------
* * * * *
------------------------------------------------------
* * * * *
------------------------------------------------------
* * * * *
------------------------------------------------------
* * * * *
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* * * * *
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* * * * *
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* * * * *
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* * * * *
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* * * * *
------------------------------------------------------
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*This confidential information has been omitted and filed separately with the Commission.
P.A. No. 2022
TABLE 3
TO THE AGTA AND PURCHASE AGREEMENT NO. 2022
*
AIRCRAFT DELIVERY, DESCRIPTION, PRICE AND ADVANCE PAYMENTS
AIRFRAME MODEL/MTGW: 737-832 * DETAIL SPECIFICATION: D6-38808-G (4/29/97)
ENGINE MODEL/THRUST LEVEL: CFM56-7B24 * PRICE BASE YEAR: *
AIRFRAME PRICE: *
OPTIONAL FEATURES: * AIRFRAME AND ENGINE ESCALATION DATA:
SUB-TOTAL OF AIRFRAME AND FEATURES: * BASE YEAR INDEX (ECI): *
ENGINE PRICE (PER AIRCRAFT): * BASE YEAR INDEX (ICI): *
BUYER FURNISHED EQUIPMENT (BFE) ESTIMATE: *
SELLER PURCHASED EQUIPMENT (SPE) ESTIMATE: *
AIRCRAFT BASIC PRICE (EXCLUDING BFE/SPE): *
REFUNDABLE DEPOSIT PER AIRCRAFT AT PROPOSAL ACCEPTANCE: *
-------------------------------------------------------------------------------------------------------------------------------
* * * *
-------------------------------------------------------------------------------------------------------------------------------
DELIVERY O NUMBER OF * * * * * * *
-------------------------------------------------------------------------------------------------------------------------------
DATE P AIRCRAFT * * * * * * *
-------------------------------------------------------------------------------------------------------------------------------
1998
-------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
-------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
-------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
-------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
-------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------
1999
-------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
-------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------
2001
-------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
-------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
-------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
-------------------------------------------------------------------------------------------------------------------------------
|
*This confidential information has been omitted and filed separately with the Commission.
P.A. No. 2022
TABLE 3
TO THE AGTA AND PURCHASE AGREEMENT NO. 2022
*
AIRCRAFT DELIVERY, DESCRIPTION, PRICE AND ADVANCE PAYMENTS
---------------------------------------------------------------------------------------------------------------------------------
* * * *
---------------------------------------------------------------------------------------------------------------------------------
DELIVERY O NUMBER OF * * * * * * *
---------------------------------------------------------------------------------------------------------------------------------
DATE P AIRCRAFT * * * * * * *
---------------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------------
2002
---------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
---------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
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* * * * * * * * *
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* * * * * * * * *
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* * * * * * * * *
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* * * * * * * * *
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* * * * * * * * *
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* * * * * * * * *
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* * * * * * * * *
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* * * * * * * * *
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2003
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* * * * * * * * *
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* * * * * * * * *
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* * * * * * * * *
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* * * * * * * * *
---------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
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* * * * * * * * *
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* * * * * * * * *
---------------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------------
2004
---------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
---------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
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P.A. No. 2022
TABLE 3
TO THE AGTA AND PURCHASE AGREEMENT NO. 2022
*
AIRCRAFT DELIVERY, DESCRIPTION, PRICE AND ADVANCE PAYMENTS
-------------------------------------------------------------------------------------------------------------------------------
* * * *
-------------------------------------------------------------------------------------------------------------------------------
DELIVERY O NUMBER OF * * * * * * *
-------------------------------------------------------------------------------------------------------------------------------
DATE P AIRCRAFT * * * * * * *
-------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
-------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
-------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
-------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
-------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
-------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
-------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
-------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------
2005
-------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
-------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
-------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
-------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
-------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
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* * * * * * * * *
-------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
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2006
-------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
-------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
-------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
-------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
-------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
-------------------------------------------------------------------------------------------------------------------------------
|
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P.A. No. 2022
TABLE 3
TO THE AGTA AND PURCHASE AGREEMENT NO. 2022
*
AIRCRAFT DELIVERY, DESCRIPTION, PRICE AND ADVANCE PAYMENTS
---------------------------------------------------------------------------------------------------------------------------------
* * * *
---------------------------------------------------------------------------------------------------------------------------------
DELIVERY O NUMBER OF * * * * * * *
---------------------------------------------------------------------------------------------------------------------------------
DATE P AIRCRAFT * * * * * * *
---------------------------------------------------------------------------------------------------------------------------------
ANNUAL
---------------------------------------------------------------------------------------------------------------------------------
1998 * * * * * * * *
---------------------------------------------------------------------------------------------------------------------------------
1999 * * * * * * * *
---------------------------------------------------------------------------------------------------------------------------------
2001 * * * * * * * *
---------------------------------------------------------------------------------------------------------------------------------
2002 * * * * * * * *
---------------------------------------------------------------------------------------------------------------------------------
2003 * * * * * * * *
---------------------------------------------------------------------------------------------------------------------------------
2004 * * * * * * * *
---------------------------------------------------------------------------------------------------------------------------------
2005 * * * * * * * *
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2006 * * * * * * * *
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|
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P.A. No. 2022
AIRCRAFT CONFIGURATION
between
THE BOEING COMPANY
and
DELTA AIR LINES, INC.
Exhibit A to Purchase Agreement Number 2022
A
P.A. No. 2022
AIRCRAFT CONFIGURATION
Dated October 21, 1997
relating to
BOEING MODEL 737-832 AIRCRAFT
The Detail Specification is Boeing Document D6-38808-94, dated as of even date herewith. Such Detail Specification will be comprised of Configuration Specification D6-38808, September 7, 1993, revised by Revision G dated April 29, 1997, as amended to incorporate the Optional Features listed below, including the effects on Manufacturer's Empty Weight (MEW) and Operating Empty Weight (OEW). Such Optional Features are set forth in Boeing Document D6-39113. As soon as practicable, Boeing will furnish to Buyer copies of the Detail Specification, which copies will reflect such Optional Features. The Aircraft Basic Price reflects and includes all effects of such Optional Features, except such Aircraft Basic Price does not include the price effects of any Buyer Furnished Equipment or Seller Purchased Equipment.
P.A. No. 2022
EXHIBIT A TO
PURCHASE AGREEMENT NO. 2022
PRICE
PER A/P
DAL3801
CR / TITLE 70 APS 95$
================================================================== ==========
|
*This confidential information has been omitted and filed separately with the Commission.
P.A. No. 2022
EXHIBIT A TO
PURCHASE AGREEMENT NO. 2022
PRICE
PER A/P
DAL3801
CR / TITLE 70 APS 95$
================================================================== ==========
|
*This confidential information has been omitted and filed separately with the Commission.
P.A. No. 2022
EXHIBIT A TO
PURCHASE AGREEMENT NO. 2022
PRICE
PER A/P
DAL3801
CR / TITLE 70 APS 95$
================================================================== ==========
|
*This confidential information has been omitted and filed separately with the Commission.
P.A. No. 2022
EXHIBIT A TO
PURCHASE AGREEMENT NO. 2022
PRICE
PER A/P
DAL3801
CR / TITLE 70 APS 95$
================================================================== ==========
|
*This confidential information has been omitted and filed separately with the Commission.
P.A. No. 2022
EXHIBIT A TO
PURCHASE AGREEMENT NO. 2022
PRICE
PER A/P
DAL3801
CR / TITLE 70 APS 95$
================================================================== ==========
|
*This confidential information has been omitted and filed separately with the Commission.
P.A. No. 2022
EXHIBIT A TO
PURCHASE AGREEMENT NO. 2022
PRICE
PER A/P
DAL3801
CR / TITLE 70 APS 95$
================================================================== ==========
|
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P.A. No. 2022
EXHIBIT A TO
PURCHASE AGREEMENT NO. 2022
PRICE
PER A/P
DAL3801
CR / TITLE 70 APS 95$
================================================================== ==========
|
*This confidential information has been omitted and filed separately with the Commission.
P.A. No. 2022
EXHIBIT A TO
PURCHASE AGREEMENT NO. 2022
PRICE
PER A/P
DAL3801
CR / TITLE 70 APS 95$
================================================================== ==========
|
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P.A. No. 2022
EXHIBIT A TO
PURCHASE AGREEMENT NO. 2022
PRICE
PER A/P
DAL3801
CR / TITLE 70 APS 95$
================================================================== ==========
|
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P.A. No. 2022
EXHIBIT A TO
PURCHASE AGREEMENT NO. 2022
PRICE
PER A/P
DAL3801
CR / TITLE 70 APS 95$
================================================================== ==========
|
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P.A. No. 2022
EXHIBIT A TO
PURCHASE AGREEMENT NO. 2022
PRICE
PER A/P
DAL3801
CR / TITLE 70 APS 95$
================================================================== ==========
|
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P.A. No. 2022
EXHIBIT A TO
PURCHASE AGREEMENT NO. 2022
PRICE
PER A/P
DAL3801
CR / TITLE 70 APS 95$
================================================================== ==========
|
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P.A. No. 2022
EXHIBIT A TO
PURCHASE AGREEMENT NO. 2022
PRICE
PER A/P
DAL3801
CR / TITLE 70 APS 95$
================================================================== ==========
|
*This confidential information has been omitted and filed separately with the Commission.
P.A. No. 2022
EXHIBIT A TO
PURCHASE AGREEMENT NO. 2022
PRICE
PER A/P
DAL3801
CR / TITLE 70 APS 95$
================================================================== ==========
|
*This confidential information has been omitted and filed separately with the Commission.
P.A. No. 2022
BUYER FURNISHED EQUIPMENT, CUSTOMER DIRECTED SELLER
PURCHASED EQUIPMENT, SELLER PURCHASED EQUIPMENT AND
CABIN SYSTEMS EQUIPMENT VARIABLES
relating to
BOEING MODEL 737-632/-732/-832 AIRCRAFT
between
THE BOEING COMPANY
and
DELTA AIR LINES, INC.
Supplemental Exhibit BFE/CDSPE/SPE/CSE
to
Purchase Agreement Number 2022
P.A. No. 2022
This Supplemental Exhibit BFE/CDSPE/SPE/CSE contains supplier selection dates, on-dock dates and terms and conditions for Buyer Furnished Equipment, Customer Directed Seller Purchased Equipment, Seller Purchased Equipment, Cabin Systems Equipment and other variables applicable to the Aircraft.
1. Definition of Terms:
Buyer Furnished Equipment (BFE) is defined as equipment purchased and provided by Customer, which Boeing will receive, inspect, store and install in the Aircraft before Delivery in accordance with this Supplemental Exhibit BFE/CDSPE/SPE/CSE.
Seller Purchased Equipment (SPE) is Buyer Furnished Equipment (BFE) that Boeing purchases for Customer.
Customer Directed Seller Purchased Equipment (CDSPE) is SPE for which Customer is to solicit proposals from suppliers, select the supplier, and negotiate commercial terms.
References to SPE in this letter will be inclusive of CDSPE unless otherwise specified.
Developmental Buyer Furnished Equipment (DBFE) is BFE not previously certified for installation on the same model aircraft.
This Exhibit does not include developmental avionics.
Inflight entertainment, cabin communications systems and cabin management systems (IFE/CCS/CMS) are collectively referred to as Cabin Systems Equipment (CSE).
2. BFE Variables:
2.1. Supplier Selection for BFE.
Customer will:
2.1.1 Select and notify Boeing of the suppliers of the following BFE items by the following dates:
Seats (passenger) Weber - Selected on July 2, 1997
P.A. No. 2022
2.2 On-dock Dates for BFE.
On or before November 30, 1997, Boeing will provide to Customer a BFE Requirements On-Dock/Inventory Document (BFE Document) or an electronically transmitted BFE Report which may be periodically revised, setting forth the items, quantities, on-dock dates and shipping instructions relating to the in-sequence installation of BFE. For planning purposes, a preliminary BFE on-dock schedule is set forth in Attachment A.
3.0 SPE Variables:
3.1 Customer has requested that Boeing purchase as SPE the BFE which has been changed to SPE by Optional Feature Number 0253CH3114. Accordingly, Articles 3.2, 3.3, 3.4, 3.5, 3.6, 3.7 and 4.8 below are applicable to SPE. *This confidential information has been omitted and filed separately with the Commission.
3.2. Price Effect of SPE on Aircraft Price and Advance Payments.
3.2.1 Advance Payments. An estimated SPE price will be included in the Advance Payment Base Price for the purpose of establishing the advance payments for the Aircraft. The estimated price of this SPE for each of the Aircraft is:
737-632 - *This confidential information has been omitted and filed separately with the Commission.
737-732 - *This confidential information has been omitted and filed separately with the Commission.
737-832 - *This confidential information has been omitted and filed separately with the Commission.
3.2.2 Aircraft Price. The Aircraft Price will be adjusted to reflect
(i) the actual costs charged Boeing by the SPE suppliers, and (ii)
transportation charges.
3.3. Responsibilities for SPE.
3.3.1 Customer is responsible for:
(i) selecting the supplier in accordance with paragraph 3.4 below;
(ii) selecting a FAA certifiable part;
P.A. No. 2022
(iii) providing to Boeing the SPE part specification/Customer requirements;
(iv) providing notice to CDSPE supplier that the Boeing purchase order terms and conditions will apply;
(v) advising CDSPE suppliers to provide part number pricing, as agreed to between Supplier and Customer to Boeing in a timely manner to support lead times and purchase order placement by Boeing;
(vi) obtaining the supplier's warranty and agreement to provide customer support commitments for the CDSPE in accordance with paragraphs 3.5 of Exhibit A of the AGTA. CDSPE is deemed BFE for the purposes of Exhibit B and C of the AGTA; and
(vii) advising Boeing which commodities will be SPE and which will be CDSPE on or before June 20, 1997, which was not done for some commodities, therefore, such commodities will be CDSPE.
3.3.2. Boeing is responsible for:
(i) placing and managing the purchase order with the supplier;
(ii) coordinating with the suppliers on technical issues;
(iii) ensuring that the delivered SPE complies with the part specification;
(iv) obtaining certification of the Aircraft with the SPE installed; and
(v) for SPE other than CDSPE, obtaining for Customer the supplier's standard warranty for the SPE. SPE is deemed to be BFE for purposes of Exhibit B and C of the AGTA.
P.A. No. 2022
3.4 Supplier/Equipment Selection for SPE.
3.4.1 In addition to those responsibilities described above, for galleys and seats the following provisions apply with respect to Customer's selection of suppliers:
Galley Requirements. Customer will provide Boeing the definitive galley configuration requirements for the CDSPE galley by August 22, 1997.
3.4.2 Boeing shall retain the right to approve Customer's selected supplier's and/or part numbers, for each item of SPE.
3.5 Changes to SPE.
After the Purchase Agreement is signed, changes to SPE may only be made by and between Boeing and the suppliers. Customer's contacts with SPE suppliers relating to design (including selection of materials and colors), weights, prices or schedules are for informational purposes only. If Customer wants any changes made, requests must be made directly to Boeing for coordination with the supplier.
3.6 Proprietary Rights for SPE.
Boeing's obligation to purchase SPE will not impose upon Boeing any obligation to compensate Customer or any supplier for any proprietary rights Customer may have in the design of the SPE.
3.7 Remedies for SPE.
If Customer does not comply with the obligations above, Boeing may:
(i) delay delivery of the Aircraft;
(ii) deliver the Aircraft without installing the SPE;
(iii) substitute a comparable part and invoice Customer for the cost;
(iv) increase the Aircraft Price by the amount of Boeing's additional costs attributable to such noncompliance.
P.A. No. 2022
4.0 CSE Variables:
4.1 Customer has requested that Boeing install in the Aircraft the CSE described in Attachment C to this Exhibit. Change Request 0253CH3115 converts SPE to CSE and has been accepted by Customer. Accordingly, Articles 4.0, 4.1, 4.2, 4.3, 4.5, 4.6, 4.7 and 4.8 below are applicable to CSE.
Because of the complexity of the CSE, special attention and additional resources will be required during the development, integration, certification, and manufacture of the Aircraft to achieve proper operation of the CSE at the time of delivery of the Aircraft. To assist Customer, Boeing will perform the functions of project manager (the Project Manager) as set forth in Attachment D and according to the requirements of Exhibit C to the AGTA.
4.2 Responsibilities for CSE.
4.2.1 Customer will:
4.2.1.1 Provide Customer's CSE system requirements to Boeing;
4.2.1.2 Select the CSE suppliers (Suppliers) from among those suppliers identified in the Change Requests listed in Attachment C to this Exhibit, on or before July 25, 1997. Such selections were completed by Customer on July 25, 1997.
4.2.1.3 Promptly after selecting Suppliers, participate with Boeing in meetings with Suppliers to ensure that Supplier's functional system specifications meet Customer's and Boeing's respective requirements;
4.2.1.4 Select Supplier part numbers and provide to Boeing by July 25, 1997.
4.2.1.5 Negotiate and obtain agreements on product assurance, product support following Aircraft delivery (including spares support), supplier's pricing and any other special business arrangements directly with Suppliers;
4.2.1.6 Provide pricing information for part numbers selected above to Boeing by July 25, 1997.
4.2.1.7 Negotiate and obtain agreements with any required service providers;
P.A. No. 2022
4.2.1.8 Include in Customer's contract with any seat supplier a condition obligating such seat supplier to enter into and comply with a Boeing approved bonded stores agreement. This bonded stores agreement will set forth the procedures concerning the use, handling and storage for the Boeing owned CSE equipment during the time such equipment is under the seat supplier's control.
4.2.1.9 Authorize Boeing to obtain production CSE spares for test and or rejection replacement as follows: 5% overage for in-seat LCD monitors, in-seat cables, handsets, cord reels, and remote jacks; 15% overage for seat boxes; and, one each of the head-end equipment. Unused parts will be returned to the Customer with the aircraft delivery and any parts returned to the supplier for repair will be returned to the Customer, at no further cost, after aircraft delivery.
4.2.2 Boeing will:
4.2.2.1 Perform the Project Manager functions stated in Attachment D;
4.2.2.2 Provide Aircraft interface requirements to Suppliers as specified in Boeing Document D6-36440, Standard Cabin Systems Requirements Document (SCSRD) and as specified in Attachment B, paragraph 3 A Seat integration.
4.2.2.3 Assist Suppliers in the development of their CSE system specifications and approve such specifications;
4.2.2.4 Negotiate terms and conditions (except for price, product assurance, product support following Aircraft delivery and any other special business arrangements) and enter into contracts with Suppliers and manage such contracts for the CSE;
4.2.2.5 Coordinate the resolution of technical issues with Suppliers;
4.2.2.6 Ensure that at time of Aircraft delivery the CSE configuration and functionality meets the requirements of the Change Requests contained in Attachment C to this Exhibit as such Attachment C may be amended from time to time; and
4.2.2.7 Obtain FAA certification of the Aircraft with the CSE installed therein.
P.A. No. 2022
4.3 Software for CSE.
CSE systems may contain software of the following two types.
4.3.1 Systems Software. The software required to operate and certify the CSE systems on the Aircraft is the Systems Software and is part of the CSE.
4.3.2 Customer's Software. The software accessible to the Aircraft passengers which controls Customer's specified optional features is Customer's Software and is not part of the CSE.
4.3.2.1 Customer is solely responsible for specifying Customer's Software functional and performance requirements and ensuring that Customer's Software meets such requirements. Customer and Customer's Software supplier will have total responsibility for the writing, certification, modification, revision, or correction of any of Customer's Software. Boeing will not perform the functions and obligations described in paragraph 11.2 above, nor the Project Manager's functions described in Attachment D, for Customer's Software.
4.3.2.2 The omission of any Customer's Software or the lack of any functionality of Customer's Software will not be a valid condition for Customer's rejection of the Aircraft at the time of Aircraft delivery.
4.3.2.3 Boeing has no obligation to approve any documentation to support Customer's Software certification. Boeing will only review and operate Customer's Software if in Boeing's reasonable opinion such review and operation is necessary to certify the CSE system on the Aircraft.
4.3.2.4 Boeing will not be responsible for obtaining FAA certification for Customer's Software.
4.4. Changes to CSE.
4.4.1 After Boeing and Supplier have entered into a contract for the purchase of the CSE, changes to such contract may only be made by Boeing. Any Customer request for changes to the CSE specification after the Boeing/Supplier contract has been signed must be made in writing directly to Boeing. Boeing shall respond to such request by Customer in a timely manner. If such change is technically feasible and Boeing has the resources and time to incorporate such change, then Boeing shall negotiate with the Supplier to incorporate such change into the contract for the CSE. Any Supplier price increase resulting from such a change will be negotiated between Customer and Supplier.
P.A. No. 2022
4.4.2 Boeing and Customer recognize that the developmental nature of
the CSE may require changes to the CSE or the Aircraft in order to ensure (i)
compatibility of the CSE with the Aircraft and all other Aircraft systems, and
(ii) FAA certification of the Aircraft with the CSE installed therein. In such
event Boeing will notify Customer and recommend to Customer the most practical
means for incorporating any such change. If within 15 days after such
notification Customer and Boeing through negotiations cannot mutually agree on
the incorporation of any such change or alternate course of action, then the
remedies available to Boeing in Article 15 shall apply.
4.4.3 The incorporation into the Aircraft of any mutually agreed change to the CSE may result in Boeing adjusting the price of the Change Request contained in Attachment C to this Letter Agreement.
4.4.4 Boeing's obligation to obtain FAA certification of the Aircraft with the CSE installed is limited to the CSE as described in Attachment C, as Attachment C may be amended from time to time.
4.4.5 Boeing shall notify Customer in a timely manner in the event of a default by a Supplier under the Supplier's contract with Boeing. Within 15 days of Customer's receipt of such notification, Boeing and Customer shall agree through negotiations on an alternative Supplier or other course of action. If Boeing and Customer are unable to agree on an alternative Supplier or course of action within such time, the remedies available to Boeing in Article 15 shall apply. In the event of a BFE/SPE Seat Supplier default, Boeing and Customer mutually agree to the contingency plan as described in Exhibit C to the AGTA.
4.5 Exhibits B and C to the AGTA for CSE.
CSE is deemed to be BFE for the purposes of Exhibit B, Customer Support Document, and Exhibit C, the Product Assurance Document, of the AGTA.
4.6 Boeing's Remedies for CSE.
If Customer does not comply with any of its obligations set forth herein, Boeing may:
4.6.1 delay delivery of the Aircraft pursuant to the provisions of Article 7, Excusable Delay, of the AGTA; or
4.6.2 deliver the Aircraft without part or all of the CSE installed, or with part or all of the CSE inoperative; or
P.A. No. 2022
4.6.3 increase the Aircraft Price by the amount of Boeing's additional costs attributable to such noncompliance.
4.7 Price Effect of CSE on Aircraft Price and Advance Payments.
4.7.1 Advance Payments. An estimated CSE price will be included in the Aircraft Advance Payment Base Price for the purpose of establishing the advance payments for the Aircraft. The estimated price for the Boeing purchased CSE installed on each Aircraft by Change Requests identified in Attachment C is One Million Dollars expressed in 1995 dollars.
4.7.2 Aircraft Price. The Aircraft Price will include the actual CSE prices and any associated transportation costs charged Boeing by Suppliers.
4.8 Customer's Indemnification of Boeing for SPE and CSE.
Customer will indemnify and hold harmless Boeing from and against all claims and liabilities, including costs and expenses (including attorneys' fees) incident thereto or incident to successfully establishing the right to indemnification, for injury to or death of any person or persons, including employees of Customer but not employees of Boeing, or for loss of or damage to any property, including Aircraft, arising out of or in any way connected with any nonconformance or defect in any SPE and CSE or in the installation thereof or in the provision of services hereunder, and whether or not arising in tort or occasioned in whole or in part by the negligence of Boeing. This indemnity will not apply with respect to any nonconformance or defect caused solely by Boeing's installation of the SPE and CSE.
P.A. No. 2022
ATTACHMENT A
PRELIMINARY ON-DOCK DATES
Items Preliminary On-Dock Dates
----- -------------------------
* *
* *
Seats * *
Galleys * *
Electronics * *
Furnishings * *
Items *
* *
* *
Seats * *
Galleys * *
Electronics * *
Furnishings * *
Items *
* *
* *
Seats * *
Galleys * *
Electronics * *
Furnishings * *
|
*This confidential information has been omitted and filed separately with the Commission.
P.A. No. 2022
ATTACHMENT B
CABIN SYSTEMS EQUIPMENT
The following Optional Features describe the items of equipment that under the terms and conditions of this Letter Agreement are considered to be CSE. Each such Optional Feature is fully described in the Optional Feature Document.
Optional Feature Number and Title
*This confidential information has been omitted and filed separately with the Commission.
P.A. No. 2022
*This confidential information has been omitted and filed separately with the Commission.
P.A. No. 2022
ATTACHMENT C
PROJECT MANAGER
This Attachment D describes the functions that Boeing will perform as Project Manager to support (i) the development and integration of the CSE and (ii) the FAA certification of the CSE when installed on the Aircraft.
1. Project Management
Boeing will perform the following functions for the CSE. Boeing will have authority to make day-to-day management decisions, and decisions on technical details which in Boeing's reasonable opinion do not significantly affect form, fit, function, cost or aesthetics. Boeing will be responsible for:
A. Managing the development of all program schedules;
B. Evaluating and approving Supplier's program management and developmental plans;
C. Defining program metrics and status requirements;
D. Scheduling and conducting program status reviews;
E. Scheduling and conducting design and schedule reviews with Customer and Suppliers;
F. Monitoring compliance with schedules;
G. Evaluating and approving any recovery plans or plan revisions which may be required of either Suppliers or Customer;
H. Leading the development of a joint CSE project management plan (the Program Plan); and
I. Managing the joint development of the System Specification
2. System Integration
Boeing's performance as Project Manager will include the functions of systems integrator (Systems Integrator). As Systems Integrator Boeing will perform the following functions:
P.A. No. 2022
A. As required, assist Suppliers in defining their system specifications for the CSE, approve such specifications and develop an overall system functional specification;
B. Coordinate Boeing, Customer and Supplier teams to ensure sufficient Supplier and Supplier sub system testing and an overall cabin system acceptance test are included in the Program Plan; and
C. Organize and conduct technical coordination meetings with Customer and Suppliers to review responsibilities, functionality, Aircraft installation requirements and overall program schedule, direction and progress.
3. Seat Integration
A. Boeing will coordinate the interface requirements between seat suppliers and Suppliers. Interface requirements are defined in Boeing Document Nos. D6-36230, "Passenger Seat Design and Installation"; D6-36238, "Passenger Seat Structural Design and Interface Criteria"; D222W232, "Seat Wiring and Control Requirements"; and D222W013-4, "Seat Assembly Functional Test Plan".
B. The Suppliers will be required to coordinate integration testing and provide seat assembly functional test procedures for seat electronic parts to seat suppliers and Boeing, as determined by Boeing.
C. The Suppliers will assist the seat suppliers in the preparation of seat assembly functional test plans.
P.A. No. 2022
ATTACHMENT D
737-632/-732/-832
CRITICAL PATH EVENTS
The contingency plan is the alternate course of action which will be implemented if the critical decision date is not met or other course of action is not agreed to by Boeing and Customer. The critical impact events listed below are milestones which must be met by the BFE/SPE and CSE Suppliers to achieve the in-sequence installation of the CSE. The Required Due Dates in such tables are the dates on which Boeing begins to incur disruption costs. The Critical Decision Dates are the dates after which the critical impact event cannot be accomplished to maintain the delivery schedule and/or full system functionality. A meeting to discuss a recovery plan cost impact and/or an alternate course of action will be held within one week of knowledge of delinquency or impending delinquency.
Critical
Required Decision Contingency
Event Due Date Date Plan
----- -------- -------- ----
CSE Test Hardware On- 8/15/97 9/2/97 CSE inoperative
Dock at Seat Supplier at Delivery
CSE Production 2/16/98 2/16/98 Assess
Hardware On-Dock at additional out-
Seat Supplier of sequence
charges for the
consequent late
seats
Seats-On-Dock 6/23/98 6/23/98 Assess
(Complete and In-Seat additional
CSE Hardware Functionality out-of-Sequence
Tested) at Boeing charges
Zone CSE Production 3/25/98 4/30/98 CSE inoperative
Hardware On-Dock at at Delivery
Boeing
Head End CSE Production 6/4/98 6/22/98 CSE inoperative
Hardware On-Dock at at Delivery
Boeing
|
Further Development of the contingency plan, including additional events, based upon customer's final selected configuration is required. This Exhibit will be amended as required when the contingency plans are finalized at the Initial Technical Coordination Meeting (ITCM).
P.A. No. 2022
CUSTOMER SUPPORT VARIABLES
between
THE BOEING COMPANY
and
DELTA AIR LINES, INC.
Supplemental Exhibit CS1 to Purchase Agreement Number 2022
CS1
P.A. No. 2022
CUSTOMER SUPPORT VARIABLES
relating to
BOEING MODEL 737-632/-732/-832 AIRCRAFT
Customer and Boeing will conduct planning conferences approximately 12 months before delivery of the first Aircraft, or as otherwise agreed, to develop and schedule a customized Customer Support Program to be furnished by Boeing in support of the Aircraft.
*This confidential information has been omitted and filed separately with the Commission.
CS1-1
P.A. No. 2022
*This confidential information has been omitted and filed separately with the Commission.
CS1-2 P.A. No. 2022
*This confidential information has been omitted and filed separately with the Commission.
CS1-3
P.A. No. 2022
*This confidential information has been omitted and filed separately with the Commission.
CS1-4
P.A. No. 2022
*This confidential information has been omitted and filed separately with the Commission.
9: Technical Data, Documents and Manuals.
9.1. Manuals.
Boeing will provide to Customer manuals as identified below ninety (90) days prior to delivery of first Aircraft, except for the following manuals which will be provided at delivery of each Aircraft.
Airplane Flight Manual Weight and Balance Manual (chapters 1 and 2) Operations Manual and Quick Reference Handbook Fault Reporting Manual
Manuals are subject to revision based upon engineering and manufacturing changes not available at the time of delivery of Customer's first Aircraft.
Boeing will provide manuals to Customer electronically as technology makes manuals accessible, and manuals are incorporated into Boeing Online Data System (BOLD).
9.2. Flight Operations.
Airplane Flight Manual
Operations Manual
Quick Reference Handbook
Weight and Balance Manual
Dispatch Deviation Procedures Guide
Flight Crew Training Manual
Baggage/Cargo Loading Manual
Performance Engineer's Manual
Jet Transport Performance Methods
FMC Supplemental Data Document
Operational Performance Software
9.3. Maintenance.
Aircraft Maintenance Manual
Wiring Diagram Manual
Systems Schematics Manual
Connector Part Number Options Document
Structural Repair Manual
CS1-5
P.A. No. 2022
Overhaul/Component Maintenance Manual
Standard Overhaul Practices Manual
Standard Wiring Practices Manual
Non-Destructive Test Manual
Service Bulletins and Index
Corrosion Prevention Manual
Fault Isolation Manual
Fuel Measuring Stick Calibration Document
Power Plant Buildup Manual
Built-In Test Equipment (BITE) Manual
Central Maintenance Computer System Reporting Table
In Service Activity Report
All Operator Letters
Service Letters
Structural Item Interim Advisory
Maintenance Tips
Combined Index
9.4. Maintenance Planning.
Maintenance Planning Data Document
Maintenance Planning Data Tasks Masterfile
Maintenance Task Cards and Index
Maintenance Inspection Intervals Report
9.5. Spares.
Illustrated Parts Catalog
Standards Books
9.6. Facilities and Equipment Planning.
Facilities and Equipment Planning Document
Special Tool and Ground Handling Equipment Drawings and Index
Supplementary Tooling Documentation
System Test Equipment Document
Illustrated Tool and Equipment List/Manual
Aircraft Recovery Document
Airplane Characteristics for Airport Planning Document
Airplane Rescue and Fire Fighting Document
Engine Handling Document
CS1-6
P.A. No. 2022
9.7. Computer Software Index.
9.8. Supplier Technical Data.
Service Bulletins
Ground Support Equipment Data
Provisioning Information
Component Maintenance/Overhaul Manuals and Index
Publications Index
Product Support Supplier Directory
9.9. Third Party Maintenance Services.
Boeing will include Customer in the Boeing document "Contract Maintenance Service Availability for Commercial Aircraft." This document is provided upon request to airline operators pursuing third party maintenance.
CS1-7 P.A. No. 2022
At Customer's request, the engine warranty portion of this Supplemental Exhibit EE1 has been deleted because Customer intends to enter into a warranty agreement with CFM International Inc.
ENGINE ESCALATION
between
THE BOEING COMPANY
and
DELTA AIR LINES, INC.
Supplemental Exhibit EE1 to Purchase Agreement Number 2022
EE1
P.A. No. 2022
ENGINE ESCALATION,
relating to
BOEING MODEL 737-632/-732/-832 AIRCRAFT
1. ENGINE ESCALATION. No separate engine escalation methodology is defined for the 737-632/-732/-832 Aircraft. Pursuant to the AGTA, the engine prices for these Aircraft are included in and will be escalated in the same manner as the Airframe.
EE1-2 P.A. No. 2022
SERVICE LIFE POLICY COMPONENTS
between
THE BOEING COMPANY
and
DELTA AIR LINES, INC.
Supplemental Exhibit SLP1 to Purchase Agreement Number 2022
SLP1
P.A. No. 2022
SERVICE LIFE POLICY COMPONENTS
relating to
BOEING MODEL 737 AIRCRAFT
This is the listing of SLP Components for the Aircraft which relate to Part 3, Boeing Service Life Policy of Exhibit C, Product Assurance Document to the AGTA and is a part of Purchase Agreement No. 2022.
1. Wing.
(a) Upper and lower skins and stiffeners between the forward and rear wing spars.
(b) Wing spar webs, chords and stiffeners.
(c) Inspar wing ribs.
(d) Inspar splice plates and fittings.
(e) Main landing gear support structure.
(f) Wing center section floor beams, lower beams and spanwise beams, but not the seat tracks attached to floor beams.
(g) Engine strut support fittings attached directly to wing primary structure.
(h) Wing-to-body structural attachments.
(i) Support structure in the wing for spoilers and spoiler actuators; for aileron hinges and reaction links; and for leading edge devices and trailing edge flaps.
(j) Trailing edge flap tracks and carriages.
(k) Aileron, leading edge device and trailing edge flap internal, fixed attachment and actuator support structure.
SLP1-1
P.A. No. 2022
2. Body.
(a) External surface skins and doublers, longitudinal stiffeners, longerons and circumferential rings and frames between the forward pressure bulkhead and the vertical stabilizer rear spar bulkhead and structural support and enclosure for the APU but excluding all system components and related installation and connecting devices, insulation, lining, and decorative panels and related installation and connecting devices.
(b) Window and windshield structure but excluding the windows and windshields.
(c) Fixed attachment structure of the passenger doors, cargo doors and emergency exits, excluding door mechanisms and movable hinge components. Sills and frames around the body openings for the passenger doors, cargo doors and emergency exits, excluding scuff plates and pressure seals.
(d) Nose wheel well structure, including the wheel well walls, pressure deck, bulkheads, and gear support structure.
(e) Main gear wheel well structure including pressure deck and landing gear beam support structure.
(f) Floor beams and support posts in the control cab and passenger cabin area, but excluding seat tracks.
(g) Forward and aft pressure bulkheads.
(h) Keel structure between the wing front spar bulkhead and the main gear wheel well aft bulkhead including splices.
(i) Wing front and rear spar support bulkheads, and vertical and horizontal stabilizer front and rear spar support bulkheads including terminal fittings but excluding all system components and related installation and connecting devices, insulation, lining, decorative panels and related installation and connecting devices.
(j) Support structure in the body for the stabilizer pivot and stabilizer screw.
SLP1-2
P.A. No. 2022
3. Vertical Stabilizer.
(a) External skins between front and rear spars.
(b) Front, rear and auxiliary spar chords, webs and stiffeners and attachment fittings.
(c) Inspar ribs.
(d) Rudder hinges and supporting ribs, excluding bearings.
(e) Support structure in the vertical stabilizer for rudder hinges, reaction links and actuators.
(f) Rudder internal, fixed attachment and actuator support structure.
4. Horizontal Stabilizer.
(a) External skins between front and rear spars.
(b) Front and rear spar chords, webs and stiffeners.
(c) Inspar ribs.
(d) Stabilizer center section including hinge and screw support structure.
(e) Support structure in the horizontal stabilizer for the elevator hinges, reaction links and actuators.
(f) Elevator internal, fixed attachment and actuator support structure.
5. Engine Strut.
(a) Strut external surface skin and doublers and stiffeners.
(b) Internal strut chords, frames and bulkheads.
(c) Strut to wing fittings and diagonal brace.
(d) Engine mount support fittings attached directly to strut structure and including the engine-mounted support fittings.
SLP1-3
P.A. No. 2022
6. Main Landing Gear.
(a) Outer cylinder.
(b) Inner cylinder, including axles.
(c) Upper and lower side struts, including spindles, universals and reaction links.
(d) Drag strut.
(e) Bell crank.
(f) Orifice support tube.
(g) Trunnion link.
(h) Downlock links including spindles and universals.
(i) Torsion links.
(j) Actuator beam, support link and beam arm.
7. Nose Landing Gear.
(a) Outer cylinder.
(b) Inner cylinder, including axles.
(c) Orifice support tube.
(d) Upper and lower drag strut, including lock links.
(e) Steering plates and steering collars.
(f) Torsion links.
NOTE: The Service Life Policy does not cover any bearings, bolts, bushings, clamps, brackets, actuating mechanisms or latching mechanisms used in or on the Covered Components.
SLP1-4
P.A. No. 2022
*
between
THE BOEING COMPANY
and
DELTA AIR LINES, INC.
Supplemental Exhibit * to Purchase Agreement Number 2022
*This confidential information has been omitted and filed separately with the Commission.
P.A. No. 2022
*
relating to
BOEING MODEL 737-632/-732/-832
*This confidential information
has been omitted and filed
separately with the Commission.
P.A. No. 2022
EXHIBIT 10.4
PURCHASE AGREEMENT NUMBER 2025
between
THE BOEING COMPANY
and
DELTA AIR LINES, INC.
Relating to Boeing Model 767-432ER Aircraft
P.A. No. 2025
TABLE OF CONTENTS
SA
ARTICLES NUMBER
-------- ------
1. Quantity, Model and Description
2. Delivery Schedule
3. Price
4. Payment
5. Miscellaneous
TABLE
-----
1. Aircraft Information Table
2. Option Aircraft Information Table
3. *
EXHIBIT
-------
A. Aircraft Configuration
SUPPLEMENTAL EXHIBITS
---------------------
BFE/CDSPE/SPE/CSE. Buyer Furnished Equipment, Customer Directed Seller
Purchased Equipment, Seller Purchased Equipment and Cabin
Systems Equipment Variables
CS1. Customer Support Variables
EE1. Engine Escalation
*
SLP1. Service Life Policy Components
|
*This confidential information has been omitted and filed separately with the Commission.
P.A. No. 2025
LETTER AGREEMENTS
6-1162-RLL-2198 Delivery Price Adjustment 6-1162-RLL-2234 Special Matters 6-1162-RLL-2241 Promotion Support 6-1162-RLL-2242 1997&1998 Escalation Sharing 6-1162-RLL-2243 * 6-1162-RLL-2244 Performance Retention Commitment 6-1162-RLL-2245 Certain Contractual Matters 6-1162-RLL-2247 * 6-1162-RLL-2251 Total Cost Team 6-1162-RLL-2275 Multiple Aircraft Operating Weights 6-1162-RLL-2281 Aircraft Performance Guarantees 6-1162-RLL-2284 Open Configuration Matters 6-1162-RLL-2287 Certification Flight Test Aircraft 6-1162-RLL-2289 * 6-1162-RLL-2290 * 6-1162-RLL-2292 * 6-1162-RLL-2420 767-400ER Pilot Type Rating 6-1162-RLL-2424R1 Engine Matters |
*This confidential information has been omitted and filed separately with the Commission.
P.A. No. 2025
Purchase Agreement No. 2025
between
The Boeing Company
and
DELTA AIR LINES, INC.
This Purchase Agreement No. 2025 dated as of October 21, 1997 between The Boeing Company (Boeing) and DELTA AIR LINES, INC. (Customer) relating to the purchase and sale of Model 767-432ER aircraft incorporates the terms and conditions of the Aircraft General Terms Agreement dated as of October 21, 1997 between the parties, identified as AGTA-DAL (AGTA).
Article 1. Quantity, Model and Description.
The aircraft to be delivered to Customer will be designated as Model 767-432ER aircraft (the Aircraft). Boeing will manufacture and sell to Customer Twenty-One (21) Aircraft to conform to the configuration described in Exhibit A, which is part of this Purchase Agreement.
Article 2. Delivery Schedule.
The scheduled months of delivery of the Aircraft are listed in the attached Table 1, which is part of this Purchase Agreement.
Article 3. Price.
3.1 Aircraft Basic Price. The Aircraft Basic Price for each Aircraft is subject to escalation, as listed in Table 1.
3.2 Advance Payment Base Prices. The Advance Payment Base Price and the Advance Payment Schedule for each Aircraft is listed in Table 1.
Article 4. Payment.
Advance Payments and payments at Delivery by Customer will be in accordance with Article 2 of the AGTA.
P.A. No. 2025
Article 5. Miscellaneous.
5.1 Aircraft Information Table. Table 1 consolidates information contained in Articles 1, 2, 3 and 4 with respect to (i) quantity of Aircraft, (ii) applicable Detail Specification, (iii) month and year of scheduled deliveries, (iv) Aircraft Basic Price, (v) applicable escalation factors and (vi) Advance Payment Base Prices and advance payments and their schedules.
5.2 Buyer Furnished Equipment Variables. Supplemental Exhibit BFE/CDSPE/SPE/CSE contains vendor selection dates, on dock dates and other variables applicable to the Aircraft.
5.3 Customer Support Variables. Supplemental Exhibit CS1 contains the variable information applicable to information, training services and other things furnished by Boeing in support of the Aircraft.
5.4 Engine Escalation Variables. Supplemental Exhibit EE1 contains the applicable engine escalation formula.
5.5 *This confidential information has been omitted and filed separately with the Commission.
5.6 Service Life Policy Component Variables. Supplemental Exhibit SLP1 lists the airframe and landing gear components covered by the Service Life Policy for the Aircraft.
P.A. No. 2025
5.7 Negotiated Agreement; Entire Agreement. This Purchase Agreement, including the provisions of Article 11.2 of the AGTA relating to insurance, and Article 12 of Part 2 of Exhibit C of the AGTA relating to DISCLAIMER AND RELEASE and EXCLUSION OF CONSEQUENTIAL AND OTHER DAMAGES, has been the subject of discussion and negotiation and is understood by the parties; the Aircraft Price and other agreements of the parties stated in this Purchase Agreement were arrived at in consideration of such provisions. This Purchase Agreement, including the AGTA, contains the entire agreement between the parties and supersedes all previous proposals, understandings, commitments or representations whatsoever, oral or written, and may be changed only in writing signed by authorized representatives of the parties.
* * * * * * * * * * * * * * * *
DATED AS OF October 21, 1997
DELTA AIR LINES, INC. THE BOEING COMPANY
By /s/ Leo F. Mullin By /s/ R.B. Woodard
------------------ ----------------
Its President and CEO Its President
|
P.A. No. 2025
TABLE 1 TO
PURCHASE AGREEMENT NO. 2025
AIRCRAFT DELIVERY, DESCRIPTION, PRICE AND ADVANCE PAYMENTS
AIRFRAME MODEL/MTGW: 767-432ER * DETAIL SPECIFICATION: D019T001-A(2/7/97)
ENGINE MODEL/THRUST LEVEL: CF6-80C2B7F * PRICE BASE YEAR: *
AIRFRAME BASE PRICE: *
OPTIONAL FEATURES: * AIRFRAME ESCALATION DATA:
-------------------------
SUB-TOTAL OF AIRFRAME AND FEATURES: * BASE YEAR INDEX (ECI): *
ENGINE PRICE (PER AIRCRAFT): * BASE YEAR INDEX (ICI): *
BUYER FURNISHED EQUIPMENT (BFE) ESTIMATE: *
SELLER PURCHASED EQUIPMENT (SPE) ESTIMATE: * ENGINE ESCALATION DATA:
-----------------------
AIRCRAFT BASIC PRICE (EXCLUDING BFE/SPE): * BASE YEAR INDEX (CPI): *
REFUNDABLE DEPOSIT PER AIRCRAFT AT PROPOSAL ACCEPTANCE: *
---------------------------------------------------------------------------------------------------------------------------------
* * * * *
---------------------------------------------------------------------------------------------------------------------------------
DELIVERY O NUMBER OF * * * * * * * *
---------------------------------------------------------------------------------------------------------------------------------
DATE P AIRCRAFT * * * * * * * *
---------------------------------------------------------------------------------------------------------------------------------
2000
---------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * * *
---------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * * *
---------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * * *
---------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * * *
---------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * * *
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* * * * * * * * * *
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* * * * * * * * * *
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* * * * * * * * * *
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*
---------------------------------------------------------------------------------------------------------------------------------
2001
---------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * * *
---------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * * *
---------------------------------------------------------------------------------------------------------------------------------
|
*This confidential information has been omitted and filed separately with the Commission.
TABLE 1 TO
PURCHASE AGREEMENT NO. 2025
AIRCRAFT DELIVERY, DESCRIPTION, PRICE AND ADVANCE PAYMENTS
---------------------------------------------------------------------------------------------------------------------------------
* * * * *
---------------------------------------------------------------------------------------------------------------------------------
DELIVERY O NUMBER OF * * * * * * * *
---------------------------------------------------------------------------------------------------------------------------------
DATE P AIRCRAFT * * * * * * * *
---------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * * *
---------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * * *
---------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * * *
---------------------------------------------------------------------------------------------------------------------------------
ANNUAL
---------------------------------------------------------------------------------------------------------------------------------
2000 * * * * * * * * *
---------------------------------------------------------------------------------------------------------------------------------
2001 * * * * * * * * *
---------------------------------------------------------------------------------------------------------------------------------
|
*This confidential information has been omitted and filed separately with the Commission.
TABLE 2
TO
THE AGTA AND PURCHASE AGREEMENT NO. 2025
767-432ER OPTION AIRCRAFT DELIVERY, DESCRIPTION, PRICE AND ADVANCE PAYMENTS
AIRFRAME MODEL/MTGW: 767-432ER * DETAIL SPECIFICATION: D019T001-A(2/7/97)
ENGINE MODEL/THRUST LEVEL: CF6-80C2B7F * PRICE BASE YEAR: *
AIRFRAME PRICE: *
OPTIONAL FEATURES: * AIRFRAME ESCALATION DATA:
-------------------------
SUB-TOTAL OF AIRFRAME AND FEATURES: * BASE YEAR INDEX (ECI): *
ENGINE PRICE (PER AIRCRAFT): * BASE YEAR INDEX (ICI): *
BUYER FURNISHED EQUIPMENT (BFE) ESTIMATE: *
SELLER PURCHASED EQUIPMENT (SPE) ESTIMATE: * ENGINE ESCALATION DATA:
-----------------------
AIRCRAFT BASIC PRICE (EXCLUDING BFE/SPE): * BASE YEAR INDEX (CPI): *
NON-REFUNDABLE DEPOSIT PER AIRCRAFT AT DEFINITIVE AGREEMENT: *
-------------------------------------------------------------------------------------------------------------------------------
* * * * *
-------------------------------------------------------------------------------------------------------------------------------
DELIVERY NUMBER OF * * * * * * * *
-------------------------------------------------------------------------------------------------------------------------------
DATE AIRCRAFT * * * * * * * *
-------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * * *
-------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * * *
-------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * * *
-------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * * *
-------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * * *
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* * * * * * * * * *
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* * * * * * * * * *
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* * * * * * * * * *
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* * * * * * * * * *
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* * * * * * * * * *
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* * * * * * * * * *
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* * * * * * * * * *
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*This confidential information has been omitted and filed separately with the Commission.
P.A. No. 2025
TABLE 2
TO
THE AGTA AND PURCHASE AGREEMENT NO. 2025
767-432ER OPTION AIRCRAFT DELIVERY, DESCRIPTION, PRICE AND ADVANCE PAYMENTS
--------------------------------------------------------------------------------------------------------------------------------
* * * * *
--------------------------------------------------------------------------------------------------------------------------------
DELIVERY NUMBER OF * * * * * * * *
--------------------------------------------------------------------------------------------------------------------------------
DATE AIRCRAFT * * * * * * * *
--------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * * *
--------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * * *
--------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * * *
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* * * * * * * * * *
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* * * * * * * * * *
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* * * * * * * * * *
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* * * * * * * * * *
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*This confidential information has been omitted and filed separately with the Commission.
P.A. No. 2025
TABLE 2
TO
THE AGTA AND PURCHASE AGREEMENT NO. 2025
767-432ER ROLLING OPTION AIRCRAFT DELIVERY
------------------------- ------------------------ ------------------------ ------------------------- ------------------------
2005 2006 2007 2008 2009
------------------------- ------------------------ ------------------------ ------------------------- ------------------------
* * * * *
------------------------- ------------------------ ------------------------ ------------------------- ------------------------
* * * * *
------------------------- ------------------------ ------------------------ ------------------------- ------------------------
------------------------- ------------------------ ------------------------ ------------------------- ------------------------
2010 2011 2012 2013 2014
------------------------- ------------------------ ------------------------ ------------------------- ------------------------
* * * * *
------------------------- ------------------------ ------------------------ ------------------------- ------------------------
* * * * *
------------------------- ------------------------ ------------------------ ------------------------- ------------------------
------------------------- ------------------------ ------------------------ ------------------------- ------------------------
2015 2016 2017
------------------------- ------------------------ ------------------------
* * *
------------------------- ------------------------ ------------------------
* *
------------------------- ------------------------ ------------------------
------------------------- ------------------------ ------------------------
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*This confidential information has been omitted and filed separately with the Commission.
P.A. No. 2025
TABLE 3
TO THE AGTA PURCHASE AGREEMENT NO. 2025
*
AIRCRAFT DELIVERY, DESCRIPTION, PRICE AND ADVANCE PAYMENTS
AIRFRAME MODEL/MTGW: 767-432ER * DETAIL SPECIFICATION: D019T001-A(2/7/97)
ENGINE MODEL/THRUST LEVEL: CF6-80C2B7F * PRICE BASE YEAR: *
AIRFRAME PRICE: *
OPTIONAL FEATURES: * AIRFRAME ESCALATION DATA:
------------------------
SUB-TOTAL OF AIRFRAME AND FEATURES: * BASE YEAR INDEX (ECI): *
ENGINE PRICE (PER AIRCRAFT): * BASE YEAR INDEX (ICI): *
BUYER FURNISHED EQUIPMENT (BFE) ESTIMATE: *
SELLER PURCHASED EQUIPMENT (SPE) ESTIMATE: * ENGINE ESCALATION DATA:
----------------------
AIRCRAFT BASIC PRICE (EXCLUDING BFE/SPE): * BASE YEAR INDEX (CPI): *
REFUNDABLE DEPOSIT PER AIRCRAFT AT PROPOSAL ACCEPTANCE: *
-----------------------------------------------------------------------------------------------------------------------------------
* * * * *
-----------------------------------------------------------------------------------------------------------------------------------
DELIVERY O NUMBER OF * * * * * * * *
-----------------------------------------------------------------------------------------------------------------------------------
DATE P AIRCRAFT * * * * * * * *
-----------------------------------------------------------------------------------------------------------------------------------
2000
-----------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * * *
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* * * * * * * * * *
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* * * * * * * * * *
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* * * * * * * * * *
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* * * * * * * * * *
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* * * * * * * * * *
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* * * * * * * * * *
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* * * * * * * * * *
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2001
-----------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * * *
-----------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * * *
-----------------------------------------------------------------------------------------------------------------------------------
|
*This confidential information has been omitted and filed separately with the Commission.
TABLE 3
TO THE AGTA PURCHASE AGREEMENT NO. 2025
*
AIRCRAFT DELIVERY, DESCRIPTION, PRICE AND ADVANCE PAYMENTS
-----------------------------------------------------------------------------------------------------------------------------------
* * * * *
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DELIVERY O NUMBER OF * * * * * * * *
-----------------------------------------------------------------------------------------------------------------------------------
DATE P AIRCRAFT * * * * * * * *
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* * * * * * * * * *
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* * * * * * * * * *
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ANNUAL
-----------------------------------------------------------------------------------------------------------------------------------
2000 * * * * * * * * *
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2001 * * * * * * * * *
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|
*This confidential information has been omitted and filed separately with the Commission.
AIRCRAFT CONFIGURATION
between
THE BOEING COMPANY
and
DELTA AIR LINES, INC.
Exhibit A to Purchase Agreement Number 2025
A
P.A. No. 2025
Exhibit A to
Purchase Agreement No. 2025
AIRCRAFT CONFIGURATION
Dated October 21,1997
relating to
BOEING MODEL 767-432ER AIRCRAFT
The Detail Specification is Boeing Document D019T001DAL64P-1, dated as of even date herewith. Such Detail Specification will be comprised of Configuration Specification D019T001, dated February 7, 1997, revised to Revision A, dated June 6, 1997, as amended to incorporate the Optional Features selected in accordance with Letter Agreement No. 6-1162-RLL-2284, including the effects on Manufacturer's Empty Weight (MEW) and Operating Empty Weight (OEW). Such Optional Features are set forth in Boeing Document D019TCR1DAL64P-1. Following completion of the configuration, Boeing will furnish to Customer copies of the Detail Specification, which copies will reflect such Optional Features. The Aircraft Basic Price reflects and includes an estimate of such Optional Features, except such Aircraft Basic Price does not include the price effects of any Buyer Furnished Equipment or Seller Purchased Equipment.
P.A. No. 2025
BUYER FURNISHED EQUIPMENT, CUSTOMER DIRECTED SELLER
PURCHASED EQUIPMENT, SELLER PURCHASED EQUIPMENT AND CABIN
SYSTEMS EQUIPMENT VARIABLES
relating to
BOEING MODEL 767-432ER AIRCRAFT
between
THE BOEING COMPANY
and
DELTA AIR LINES, INC.
Supplemental Exhibit BFE/CDSPE/SPE/CSE
to
Purchase Agreement Number 2025
P.A. No. 2025
This Supplemental Exhibit BFE/CDSPE/SPE/CSE contains supplier selection dates, on-dock dates and terms and conditions for Buyer Furnished Equipment, Customer Directed Seller Purchased Equipment, Seller Purchased Equipment and Cabin Systems Equipment and other variables applicable to the Aircraft.
1. Definition of Terms:
Buyer Furnished Equipment (BFE) is defined as equipment purchased and provided by Customer, which Boeing will receive, inspect, store and install in the Aircraft before Delivery in accordance with this Supplemental Exhibit BFE/CDSPE/SPE/CSE.
Seller Purchased Equipment (SPE) is Buyer Furnished Equipment (BFE) that Boeing purchases for Customer.
Customer Directed Seller Purchased Equipment (CDSPE) is SPE for which Customer is to solicit proposals from suppliers, select the supplier, and negotiate commercial terms.
Developmental Buyer Furnished Equipment (DBFE) is BFE not previously certified for installation on the same model aircraft.
References to SPE in this letter will be inclusive of CDSPE unless otherwise specified.
This Exhibit does not include developmental avionics.
Inflight entertainment, cabin communications systems and cabin management systems (IFE/CCS/CMS) are collectively referred to as Cabin Systems Equipment (CSE).
2. BFE Variables:
2.1 Supplier Selection.
Customer will:
2.1.1 Select and notify Boeing of the suppliers of the following BFE items by the following dates:
Galley System June 2, 1998 Seats (passenger) February 2, 1998 IFE/CMS February 2, 1998 |
P.A. No. 2025
2.2 On-dock Dates.
On or before August 31, 1999, Boeing will provide to Customer a BFE Requirements On-Dock/Inventory Document (BFE Document) or an electronically transmitted BFE Report which may be periodically revised, setting forth the items, quantities, on-dock dates and shipping instructions relating to the in-sequence installation of BFE. For planning purposes, a preliminary BFE on-dock schedule is set forth in Attachment A.
3.0 SPE Variables:
3.1 Customer has requested that Boeing purchase as SPE the BFE which has been changed to SPE by Optional Feature Number TBD. Accordingly, Articles 3.2, 3.3, 3.4, 3.5, 3.6, 3.7, and 4.8 below are applicable to SPE. *This confidential information has been omitted and filed separately with the Commission.
3.2 Price Effect of SPE on Aircraft Price and Advance Payments.
3.2.1 Advance Payments. Upon completion of the conversion from BFE to SPE, the Advance Payment Base Prices in Tables 1 and 3 will be updated to reflect the conversion from BFE to SPE. For Customer's planning purposes the estimated price of this SPE for each of the Aircraft is *This confidential information has been omitted and filed separately with the Commission.
3.2.2 Aircraft Price. The Aircraft Price will be adjusted to reflect
(i) the actual costs charged Boeing by the SPE suppliers, and (ii)
transportation charges.
3.3 Responsibilities for SPE.
3.3.1 Customer is responsible for:
(i) selecting the supplier on or before:
for galleys - June 2, 1998
(ii) selecting a FAA certifiable part; and
(iii) providing to Boeing the SPE part specification/Customer requirements.
(iv) providing notice to CDSPE supplier that the Boeing purchase order terms and conditions will apply.
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(v) advising CDSPE suppliers to provide part number pricing, as agreed to between supplier and Customer to Boeing in a timely manner to support lead times and purchase order placement by Boeing.
(vi) obtaining the supplier's warranty and agreement to provide customer support commitments for the CDSPE in accordance with paragraph 3.5 of Exhibit A of the AGTA. CDSPE is deemed BFE for the purposes of Exhibit B and C of the AGTA.
(vii) advising Boeing which commodities will be SPE and which will be CDSPE on or before TBD.
3.3.2 Boeing is responsible for:
(i) placing and managing the purchase order with the supplier;
(ii) coordinating with the suppliers on technical issues;
(iii) ensuring that the delivered SPE complies with the part specification;
(iv) obtaining certification of the Aircraft with the SPE installed; and
(v) for SPE other than CDSPE, obtaining for Customer the supplier's standard warranty for the SPE. SPE is deemed to be BFE for purposes of Exhibit B and C of the AGTA.
3.4 Supplier/Equipment Selection for SPE.
3.4.1 In addition to those responsibilities described above, for galleys the following provisions apply with respect to Customer's selection of suppliers:
Galley Requirements. Customer will provide Boeing the definitive galley configuration requirements not later than March 2, 1998.
Bidder's List. Suppliers for galleys are listed in Attachment B. Not later than sixty (60) days prior to the selection date shown above, Boeing will submit to Customer a list of offerable suppliers.
Selection. If Customer does not make supplier selections by the dates specified in Article 3.3, paragraph 3.3.1 (i), or if Customer selects a galley supplier that is not on the
P.A. No. 2025
Boeing Bidder's list, such galley will become BFE and the provisions of Exhibit A, Buyer Furnished Equipment Provisions Document, of the AGTA will apply.
3.4.2 Boeing shall retain the right to approve Customer's selected supplier's and/or part numbers, for each item of SPE.
3.5 Changes to SPE.
After the Purchase Agreement is signed, changes to SPE may only be made by and between Boeing and the suppliers. Customer's contacts with SPE suppliers relating to design (including selection of materials and colors), weights, prices or schedules are for informational purposes only. If Customer wants any changes made, requests must be made directly to Boeing for coordination with the supplier.
3.6 Proprietary Rights for SPE.
Boeing's obligation to purchase SPE will not impose upon Boeing any obligation to compensate Customer or any supplier for any proprietary rights Customer may have in the design of the SPE.
3.7 Remedies for SPE.
If Customer does not comply with the obligations above, Boeing may:
(i) delay delivery of the Aircraft;
(ii) deliver the Aircraft without installing the SPE;
(iii) substitute a comparable part and invoice Customer for the cost;
(iv) increase the Aircraft Price by the amount of Boeing's additional costs attributable to such noncompliance.
4.0 CSE Variables.
Customer has requested that Boeing install in the Aircraft the CSE described in Attachment C to this Exhibit. Accordingly, Articles 4.0, 4.1, 4.2, 4.3, 4.4, 4.5, 4.6, 4.7 and 4.8 below are applicable to CSE.
Because of the complexity of the IFE/CCS, special attention and additional resources will be required during the development, integration, certification, and manufacture of the Aircraft to achieve proper operation of the IFE/CCS at the time of delivery of the Aircraft. To assist Customer, Boeing will perform the functions of project manager (the Project Manager) as set forth in Attachment D and according to the requirements of Exhibit C to the AGTA.
P.A. No. 2025
4.1 Responsibilities for CSE.
4.2.1 Customer will:
4.2.1.1 Provide Customer's CSE system requirements to Boeing;
4.2.1.2 Select the CSE suppliers (Suppliers) from among those
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suppliers identified in the Change Requests listed in Attachment C to this Exhibit, on or before February 2, 1998.
4.2.1.3 Promptly after selecting Suppliers, participate with Boeing in meetings with Suppliers to ensure that Supplier's functional system specifications meet Customer's and Boeing's respective requirements;
4.2.1.4 Select Supplier part numbers and provide to Boeing by February 2, 1998.
4.2.1.5 Negotiate and obtain agreements on product assurance, product support following Aircraft delivery (including spares support), supplier's pricing and any other special business arrangements directly with Suppliers;
4.2.1.6 Provide pricing information for part numbers selected above to Boeing by March 13, 1998.
4.2.1.7 Negotiate and obtain agreements with any required service providers.
4.2.1.8 Include in Customer's contract with any seat supplier a condition obligating such seat supplier to enter into and comply with a Boeing approved bonded stores agreement. This bonded stores agreement will set forth the procedures concerning the use, handling and storage for the Boeing owned CSE equipment during the time such equipment is under the seat supplier's control.
4.2.1.9 Authorize Boeing to obtain production CSE spares for test and or rejection replacement as follows: 5% overage for in-seat LCD monitors, in-seat cables, handsets, cord reels, and remote jacks; 15% overage for seat boxes; and, one each of the head-end equipment. Unused parts will be returned to the Customer with the aircraft delivery and any parts returned to the supplier for repair will be returned to the Customer, at no further cost, after aircraft delivery.
4.2.2 Boeing will:
4.2.2.1 Perform the Project Manager functions stated in Attachment D;
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4.2.2.2 Provide Aircraft interface requirements to Suppliers as specified in Boeing Document D6-36440, Standard Cabin Systems Requirements Document (SCSRD) and as specified in Attachment B, paragraph 3 A Seat integration.
4.2.2.3 Assist Suppliers in the development of their CSE system specifications and approve such specifications;
4.2.2.4 Negotiate terms and conditions (except for price, product assurance, product support following Aircraft delivery and any other special business arrangements) and enter into contracts with Suppliers and manage such contracts for the CSE;
4.2.2.5 Coordinate the resolution of technical issues with Suppliers;
4.2.2.6 Ensure that at time of Aircraft delivery the CSE configuration and functionality meets the requirements of the Change Requests contained in Attachment C to this Exhibit as such Attachment C may be amended from time to time; and
4.2.2.7 Obtain FAA certification of the Aircraft with the IFE/CCS installed therein.
4.3 Software for CSE.
CSE systems may contain software of the following two types.
4.3.1 Systems Software. The software required to operate and certify the CSE systems on the Aircraft is the Systems Software and is part of the CSE.
4.3.2 Customer's Software. The software accessible to the Aircraft passengers which controls Customer's specified optional features is Customer's Software and is not part of the CSE.
4.3.2.1 Customer is solely responsible for specifying Customer's Software functional and performance requirements and ensuring that Customer's Software meets such requirements. Customer and Customer's Software supplier will have total responsibility for the writing, certification, modification, revision, or correction of any of Customer's Software. Boeing will not perform the functions and obligations described in paragraph 4.2.2 above, nor the Project Manager's functions described in Attachment D, for Customer's Software.
P.A. No. 2025
4.3.2.2 The omission of any Customer's Software or the lack of any functionality of Customer's Software will not be a valid condition for Customer's rejection of the Aircraft at the time of Aircraft delivery.
4.3.2.3 Boeing has no obligation to approve any documentation to support Customer's Software certification. Boeing will only review and operate Customer's Software if in Boeing's reasonable opinion such review and operation is necessary to certify the CSE system on the Aircraft.
4.3.2.4 Boeing will not be responsible for obtaining FAA certification for Customer's Software.
4.4 Changes to CSE.
4.4.1 After Boeing and Supplier have entered into a contract for the purchase of the CSE, changes to such contract may only be made by Boeing. Any Customer request for changes to the CSE specification after the Boeing/Supplier contract has been signed must be made in writing directly to Boeing. Boeing shall respond to such request by Customer in a timely manner. If such change is technically feasible and Boeing has the resources and time to incorporate such change, then Boeing shall negotiate with the Supplier to incorporate such change into the contract for the CSE. Any Supplier price increase resulting from such a change will be negotiated between Customer and Supplier.
4.4.2 Boeing and Customer recognize that the developmental nature of the
CSE may require changes to the CSE or the Aircraft in order to ensure (i)
compatibility of the CSE with the Aircraft and all other Aircraft systems, and
(ii) FAA certification of the Aircraft with the CSE installed therein. In such
event Boeing will notify Customer and recommend to Customer the most practical
means for incorporating any such change. If within 15 days after such
notification Customer and Boeing through negotiations cannot mutually agree on
the incorporation of any such change or alternate course of action, then the
remedies available to Boeing in Article 15 shall apply.
4.4.3 The incorporation into the Aircraft of any mutually agreed change to the CSE may result in Boeing adjusting the price of the Change Request contained in Attachment C to this Letter Agreement.
4.4.4 Boeing's obligation to obtain FAA certification of the Aircraft with the CSE installed is limited to the CSE as described in Attachment C, as Attachment C may be amended from time to time.
4.4.5 Boeing shall notify Customer in a timely manner in the event of a default by a Supplier under the Supplier's contract with Boeing. Within 15 days of Customer's receipt of such notification, Boeing and Customer shall agree through negotiations on an alternative Supplier or other course of action. If Boeing and Customer
P.A. No. 2025
are unable to agree on an alternative Supplier or course of action within such time, the remedies available to Boeing in Article 4.6 shall apply. In the event of a BFE/SPE Seat Supplier default, Boeing and Customer mutually agree to the contingency plan described in Exhibit C.
4.5 Exhibits B and C to the AGTA for CSE.
CSE is deemed to be BFE for the purposes of Exhibit B, Customer Support Document, and Exhibit C, the Product Assurance Document, of the AGTA.
4.6 Boeing's Remedies for CSE.
If Customer does not comply with any of its obligations set forth herein, Boeing may:
4.6.1 delay delivery of the Aircraft pursuant to the provisions of Article 10, Excusable Delay, of the AGTA;
4.6.2 deliver the Aircraft without part or all of the CSE installed, or with part or all of the CSE inoperative; or
4.6.3 increase the Aircraft Price by the amount of Boeing's additional costs attributable to such noncompliance.
4.7 Price Effect of CSE on Aircraft Price and Advance Payments.
4.7.1 Advance Payments. An estimated CSE price will be included in the Aircraft Advance Payment Base Price for the purpose of establishing the advance payments for the Aircraft. The estimated price for the Boeing purchased CSE installed on each Aircraft by Change Requests identified in Attachment C is TBD Dollars expressed in 1995 dollars.
4.7.2 Aircraft Price. The Aircraft Price will include the actual CSE prices and any associated transportation costs charged Boeing by Suppliers.
4.8 Customer's Indemnification of Boeing for SPE and CSE.
Customer will indemnify and hold harmless Boeing from and against all claims and liabilities, including costs and expenses (including attorneys' fees) incident thereto or incident to successfully establishing the right to indemnification, for injury to or death of any person or persons, including employees of Customer but not employees of Boeing, or for loss of or damage to any property, including Aircraft, arising out of or in any way connected with any nonconformance or defect in any SPE, CSE, or in the installation thereof or in the provision of services hereunder, and whether or not arising in tort or occasioned in whole or in part by the negligence of Boeing, whether active, passive or
P.A. No. 2025
imputed. This indemnity will not apply with respect to any nonconformance or defect caused solely by Boeing's installation of the CSE.
P.A. No. 2025
ATTACHMENT A
PRELIMINARY ON-DOCK DATES
Items Preliminary On-Dock Dates
----- -------------------------
* *
* *
* *
Seats * *
Galleys * *
Electronics * *
Furnishings * *
Items *
-----
* *
* *
* *
Seats * *
Galleys * *
Electronics * *
Furnishings * *
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* Early on dock dates are required to support instrumental flight test. Developmental Avionics will be determined at ITCM (Initial Technical Coordination Meeting).
** On dock date for those items required to support flight test.
*THIS CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION.
P.A. No. 2025
ATTACHMENT A
PRELIMINARY ON-DOCK DATES
CONTINUED
Items Preliminary On-Dock Dates
----- -------------------------
*
Seats *
Galleys *
Electronics *
Furnishings *
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*This confidential information has been omitted and filed separately with the Commission.
P.A. No. 2025
ATTACHMENT B
GALLEY BIDDERS LIST
TBD
P.A. No. 2025
ATTACHMENT C
CABIN SYSTEMS EQUIPMENT
The following Change Requests describe the items of equipment that under the terms and conditions of this Letter Agreement are considered to be CSE. Each such Change Request is fully described in the Change Request Document.
Change Request Number and Title
TBD
P.A. No. 2025
ATTACHMENT D
PROJECT MANAGER
This Attachment D describes the functions that Boeing will perform as Project Manager to support (i) the development and integration of the CSE and (ii) the FAA certification of the CSE when installed on the Aircraft.
1. Project Management
Boeing will perform the following functions for the CSE. Boeing will have authority to make day-to-day management decisions, and decisions on technical details which in Boeing's reasonable opinion do not significantly affect form, fit, function, cost or aesthetics. Boeing will be responsible for:
A. Managing the development of all program schedules;
B. Evaluating and approving Supplier's program management and developmental plans;
C. Defining program metrics and status requirements;
D. Scheduling and conducting program status reviews;
E. Scheduling and conducting design and schedule reviews with Customer and Suppliers;
F. Monitoring compliance with schedules;
G. Evaluating and approving any recovery plans or plan revisions which may be required of either Suppliers or Customer;
H. Leading the development of a joint CSE project management plan (the Program Plan) and;
I. Managing the joint development of the System Specification
2. System Integration
Boeing's performance as Project Manager will include the functions of systems integrator (Systems Integrator). As Systems Integrator Boeing will perform the following functions:
P.A. No. 2025
A. As required, assist Suppliers in defining their system specifications for the CSE, approve such specifications and develop an overall system functional specification;
B. Coordinate Boeing, Customer and Supplier teams to ensure sufficient Supplier and Supplier sub system testing and an overall cabin system acceptance test are included in the Program Plan; and
C. Organize and conduct technical coordination meetings with Customer and Suppliers to review responsibilities, functionality, Aircraft installation requirements and overall program schedule, direction and progress.
3. Seat Integration
A. Boeing will coordinate the interface requirements between seat suppliers and Suppliers. Interface requirements are defined in Boeing Document Nos. D6-36230, "Passenger Seat Design and Installation"; D6-36238, "Passenger Seat Structural Design and Interface Criteria"; D222W232, "Seat Wiring and Control Requirements"; and D222W013-4, "Seat Assembly Functional Test Plan".
B. The Suppliers will be required to coordinate integration testing and provide seat assembly functional test procedures for seat electronic parts to seat suppliers and Boeing, as determined by Boeing.
C. The Suppliers will assist the seat suppliers in the preparation of seat assembly functional test plans.
P.A. No. 2025
ATTACHMENT E
767-432ER
CRITICAL PATH EVENTS
The contingency plan is the alternate course of action which will be implemented if the critical decision date is not met or other course of action is not agreed to by Boeing and Customer. The critical impact events listed below are milestones which must be met by the BFE/SPE and CSE Suppliers to achieve the in-sequence installation of the CSE. The Required Due Dates in such tables are the dates on which Boeing begins to incur disruption costs. The Critical Decision Dates are the dates after which the critical impact event cannot be accomplished to maintain the delivery schedule and/or full system functionality. A meeting to discuss a recovery plan cost impact and/or an alternate course of action will be held within one week of knowledge of delinquency or impending delinquency.
Critical
Required Decision Contingency
Event Due Date Date Plan
----- -------- ---- ----
Approvable Seat-Abuse TBD TBD CSE inoperative Load
Test Plan Submittal at Delivery
CSE Test Hardware On- TBD TBD CSE inoperative
Dock at Seat Supplier at Delivery
Seat-Abuse Load TBD TBD CSE inoperative
test conduct at Delivery
Seat-Abuse Load Test TBD TBD CSE inoperative Report
Submittal at Delivery
CSE Production TBD TBD Assess additional out-
Hardware On-Dock at of-sequence charges
Seat Supplier for the consequent late
seats
Seats-On-Dock TBD TBD Assess additional
(Complete and In-Seat out-of-sequence charges
CSE Hardware Functionality
Tested) at Boeing
Zone CSE Production TBD TBD CSE inoperative
Hardware On-Dock at Boeing at Delivery
Head End CSE Production TBD TBD CSE inoperative
Hardware On-Dock at at Delivery
Boeing
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P.A. No. 2025
Further Development of the contingency plan, including additional events, based upon customer's final selected configuration is required. The TBD schedules in this Exhibit will be added within two weeks of the Initial Technical Coordination Meeting (ITCM).
P.A. No. 2025
CUSTOMER SUPPORT VARIABLES
between
THE BOEING COMPANY
and
DELTA AIR LINES, INC.
Supplemental Exhibit CS1 to Purchase Agreement Number 2025
CS1
P.A. No. 2025
CUSTOMER SUPPORT VARIABLES
relating to
BOEING MODEL 767-432ER AIRCRAFT
Customer and Boeing will conduct planning conferences approximately 12 months prior to delivery of the first Aircraft, or as mutually agreed, in order to develop and schedule a customized Customer Support Program to be furnished by Boeing in support of the Aircraft.
*This confidential information has been omitted and filed separately with the Commission.
CS1-1
P.A. No. 2025
*This confidential information has been omitted and filed separately with the Commission.
CS1-2
P.A. No. 2025
7. Technical Data, Documents and Manuals.
7.1 Revisions.
Boeing will revise, as applicable, technical data and documents provided with previously delivered aircraft.
7.2 Manuals.
Boeing will provide to Customer manuals as identified below , ninety (90) days prior to delivery of first Aircraft, except for the following manuals which will be provided at delivery of each Aircraft.
Airplane Flight Manual Weight and Balance Manual (chapters 1 and 2) Operations Manual and Quick Reference Handbook Fault Reporting Manual
Manuals are subject to revision based upon engineering and manufacturing changes not available at the time of delivery of Customer's first Aircraft.
Boeing will provide manuals to Customer electronically as technology makes manuals accessible, and manuals are incorporated into Boeing Online Data System (BOLD).
CS1-3
P.A. No. 2025
At Customer's request, the engine warranty portion of this Supplemental Exhibit EE1 has been deleted because the Customer intends to enter into a warranty agreement with GE.
ENGINE ESCALATION
between
THE BOEING COMPANY
and
DELTA AIR LINES, INC.
Supplemental Exhibit EE1 to Purchase Agreement Number 2025
EE1
P.A. No. 2025
ENGINE ESCALATION
relating to
BOEING MODEL 767-432ER AIRCRAFT
1. ENGINE ESCALATION.
(a) The Aircraft Basic Price of each Aircraft set forth in Table 1 of the Purchase Agreement includes an aggregate price for CF6-80C2 engines and all accessories, equipment and parts provided by the engine manufacturer. The adjustment in Engine price applicable to each Aircraft (Engine Price Adjustment) will be determined at the time of Aircraft delivery in accordance with the following formula:
Pe = (Pb x CPI ) - Pb
CPIb where CPIb is the Base Year Index
as set forth in Table 1 of the
Purchase Agreement
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(b) The following definitions will apply herein:
Pe = Engine Price Adjustment
Pb = Engine Base Price (per Aircraft), as set forth in
Table 1 of the Purchase Agreement.
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CPI is the Composite Price Index, a value determined using the Bureau of Labor Statistics, U.S. Department of Labor actual data in accordance with the formula below. The Index values utilized in the formula will be the numbers shown in the actual data for the ninth month prior to the month of scheduled Aircraft delivery or the ninth month prior to the Base Year Dollars month set forth in Table 1.
CPI = L +C + M + E
L = The Labor Index will be equal to the
quotient of the value associated with the
Aircraft Delivery Month divided by the
value associated with the Base Year Dollar
month in "Hourly Earnings of Aircraft
Engines and Engine Parts Production
Workers" SIC 3724, multiplied by 100 and
then by 30%.
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EE1-1
P.A. No. 2025
C = The Industrial Commodities Index will be
equal to 30% of the Producer Price Index
for "all commodities other than Farm and
Foods," Code 3-15 associated with the
scheduled Aircraft delivery month.
M = The Metals and Metal Products Index will
be equal to 30% of the Producer Price Index
for "Metals and Metal Products," Code 10
associated with the scheduled Aircraft
delivery month.
E = The Fuel Index will be equal to 10% of
the Producer Price Index for "Fuel and
Related Products and Power," Code 5
associated with the scheduled Aircraft
delivery month.
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The Engine Price Adjustment will not be made if it would result in a decrease in the Engine Base Price.
(c) The values of the Average Hourly Earnings and Producer Price Indices used will be those published as of a date 30 days prior to the scheduled Aircraft delivery to Customer. Such values will be considered final and no Engine Price Adjustment will be made after Aircraft delivery for any subsequent changes in published Index values.
(d) In the event the Engine price escalation provisions are made non-enforceable or otherwise rendered null and void by any agency of the United States Government, or if the U.S. Department of Labor, Bureau of Labor Statistics (i) substantially revises the methodology (in contrast to benchmark adjustments or other corrections of previously published data) or (ii) discontinues publication of any of the data referred to above, General Electric Company (GE) agrees to meet jointly with Boeing and Customer, (to the extent such parties may lawfully do so,) to jointly select a substitute for the revised or discontinued data; such substitute data to lead in application to the same adjustment result, insofar as possible, as would have been achieved by continuing the use of the original data as it may have fluctuated had it not been revised or discontinued. If such Engine price escalation provisions, methodology or data publication are subsequently reinstated, Boeing will make adjustments consistent with the agreements defined in this Supplemental Exhibit EE1.
NOTE: The factor (CPI divided by the base year index) by which the Engine Base Price is to be multiplied will be expressed as a decimal and rounded to the nearest thousandth. Any rounding of a number, as required under this Supplemental Exhibit EE1 with respect to escalation of the Engine price, will be accomplished as follows: if the first digit of the portion to be dropped from the number to be rounded is five or greater, the preceding digit will be raised to the next higher number.
EE1-2
P.A. No. 2025
*
between
THE BOEING COMPANY
and
DELTA AIR LINES, INC.
Supplemental Exhibit * to Purchase Agreement Number 2025
*This confidential information has been omitted and filed separately with the Commission.
*
P.A. No. 2025
*
relating to
BOEING MODEL 767-432ER
*This confidential information has been
omitted and filed separately with the
Commission.
*
P.A. No. 2025
SERVICE LIFE POLICY COMPONENTS
between
THE BOEING COMPANY
and
DELTA AIR LINES, INC.
Supplemental Exhibit SLP1 to Purchase Agreement Number 2025
SLP1
P.A. No. 2025
COVERED SERVICE LIFE COMPONENTS
relating to
BOEING MODEL 767 AIRCRAFT
This is the listing of Covered Components for the Aircraft which relate to Part 3, Boeing Service Life Policy of Exhibit C, Product Assurance Document to the AGTA and is a part of Purchase Agreement No. 2025.
1. Wing.
(a) Upper and lower wing skins and stiffeners between the forward and rear wing spars.
(b) Wing spar webs, chords and stiffeners.
(c) Inspar wing ribs.
(d) Inspar splice plates and fittings.
(e) Main landing gear support structure.
(f) Wing center section lower beams, spanwise beams and floor beams, but not the seat tracks attached to the beams.
(g) Wing-to-body structural attachments.
(h) Engine strut support fittings attached directly to wing primary structure.
(i) Support structure in the wing for spoilers and spoiler actuators; for aileron hinges and reaction links; and for leading edge devices and trailing edge flaps.
(j) Leading edge device and trailing edge flap support system.
(k) Aileron, leading edge device and trailing edge flap internal, fixed attachment and actuator support structure.
2. Body.
(a) External surface skins and doublers, longitudinal stiffeners, longerons and circumferential rings and frames between the forward
SLP1-1
P.A. No. 2025
pressure bulkhead and the vertical stabilizer rear spar bulkhead, and structural support and enclosure for the APU but excluding all system components and related installation and connecting devices, insulation, lining, and decorative panels and related installation and connecting devices.
(b) Window and windshield structure but excluding the windows and windshields.
(c) Fixed attachment structure of the passenger doors, cargo doors and emergency exits excluding door mechanisms and movable hinge components. Sills and frames around the body openings for the passenger doors, cargo doors and emergency exits, excluding scuff plates and pressure seals.
(d) Nose wheel well structure, including the wheel well walls, pressure deck, forward and aft bulkheads, and the gear support structure.
(e) Main gear wheel well structure including pressure deck, bulkheads and landing gear beam support structure.
(f) Floor beams and support posts in the control cab and passenger cabin area, but excluding seat tracks.
(g) Forward and aft pressure bulkheads.
(h) Keel structure between the wing front spar bulkhead and the main gear wheel well aft bulkhead, including splices.
(i) Wing front and rear spar support bulkheads, and vertical and horizontal stabilizer front and rear spar support bulkheads including terminal fittings but excluding all system components and related installation and connecting devices, insulation, lining, and decorative panels and related installation and connecting devices.
(j) Support structure in the body for the stabilizer pivot and stabilizer screw.
3. Vertical Stabilizer.
(a) External skins between front and rear spars including splices.
(b) Front, rear and auxiliary spar chords, webs and stiffeners, and attachment fittings between vertical stabilizer and body.
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P.A. No. 2025
(c) Inspar ribs.
(d) Support structure in the vertical stabilizer for rudder hinges, reaction links and actuators.
(e) Rudder internal, fixed attachment and actuator support structure.
(f) Rudder hinges and supporting ribs, excluding bearings.
4. Horizontal Stabilizer.
(a) External skins between front and rear spars.
(b) Front, rear and auxiliary spar chords, webs and stiffeners.
(c) Inspar ribs.
(d) Stabilizer center section and fittings splicing to outboard stabilizer including pivot and screw support structure.
(e) Support structure in the horizontal stabilizer for the elevator hinges, reaction links and actuators.
(f) Elevator internal, fixed attachment and actuator support structure.
5. Engine Strut.
(a) Strut external surface skin and doublers and stiffeners.
(b) Internal strut chords, frames and bulkheads.
(c) Strut to wing fittings and diagonal brace.
(d) Engine mount support fittings attached directly to strut structure.
(e) For Aircraft equipped with General Electric or Pratt & Whitney engines only, the engine mounted support fittings.
6. Main Landing Gear.
(a) Outer cylinder.
(b) Inner cylinder.
(c) Upper and lower side strut, including spindles and universals.
(d) Upper and lower drag strut, including spindles and universals.
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P.A. No. 2025
(e) Orifice support tube.
(f) Downlock links, including spindles and universals
(g) Torsion links.
(h) Bogie beam.
(i) Axles.
7. Nose Landing Gear.
(a) Outer cylinder.
(b) Inner cylinder, including axles.
(c) Orifice support tube.
(d) Upper and lower drag strut, including lock links.
(e) Steering plates and steering collar.
(f) Torsion links.
(g) Actuator support beam and hanger.
NOTE: The Service Life Policy does not cover any bearings, bolts, bushings, clamps, brackets, actuating mechanisms or latching mechanisms used in or on the Covered Components.
SLP1-4
P.A. No. 2025
EXHIBIT 10.5
[BOEING LETTERHEAD]
6-1162-RLL-2234
Delta Air Lines, Inc.
Hartsfield Atlanta International Airport
Atlanta, Georgia 30320
Subject: Special Matters
Reference: Purchase Agreement Nos. 2022, 2023, 2024, 2025 and 2026 (the
Purchase Agreement) between The Boeing Company (Boeing) and Delta
Air Lines, Inc. (Customer) relating to 737-632/-732/-832, 757-232,
767-332ER/-332, 767-432ER and 777-232IGW aircraft (the Aircraft).
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This Letter Agreement amends and supplements the Purchase Agreement. All terms used but not defined in this Letter Agreement have the same meaning as in the AGTA and the Purchase Agreements.
A. MODEL 737-632/-732/-832 AIRCRAFT (P. A. 2022)
1. *This confidential information has been omitted and filed separately with the Commission.
P.A. No.'s 2022, 2023, 2024, 2025 and 2026 737-632/-732/-832
Delta Air Lines, Inc.
6-1162-RLL-2234 Page 2
2. *This confidential information has been omitted and filed separately with the Commission.
3. *This confidential information has been omitted and filed separately with the Commission.
4. *This confidential information has been omitted and filed separately with the Commission.
5. *This confidential information has been omitted and filed separately with the Commission.
P.A. No.'s 2022, 2023, 2024, 2025 and 2026 737-632/-732/-832
Delta Air Lines, Inc.
6-1162-RLL-2234 Page 3
*This confidential information has been omitted and filed separately with the Commission.
6. *This confidential information has been omitted and filed separately with the Commission.
P.A. No.'s 2022, 2023, 2024, 2025 and 2026 737-632/-732/-832
Delta Air Lines, Inc.
6-1162-RLL-2234 Page 4
*This confidential information
has been omitted and filed
separately with the Commission.
|
P.A. No.'s 2022, 2023, 2024, 2025 and 2026 737-632/-732/-832
Delta Air Lines, Inc.
6-1162-RLL-2234 Page 5
7. *This confidential information has been omitted and filed separately with the Commission.
8. *This confidential information has been omitted and filed separately with the Commission.
P.A. No.'s 2022, 2023, 2024, 2025 and 2026 737-632/-732/-832
Delta Air Lines, Inc.
6-1162-RLL-2234 Page 6
*This confidential information has been omitted and filed separately with the Commission.
9. *This confidential information has been omitted and filed separately with the Commission.
P.A. No.'s 2022, 2023, 2024, 2025 and 2026 757-232
Delta Air Lines, Inc.
6-1162-RLL-2234 Page 7
B. MODEL 757-232 AIRCRAFT (P. A. 2023)
1. *This confidential information has been omitted and filed separately with the Commission.
2. *This confidential information has been omitted and filed separately with the Commission.
3. *This confidential information has been omitted and filed separately with the Commission.
4. *This confidential information has been omitted and filed separately with the Commission.
P.A. No.'s 2022, 2023, 2024, 2025 and 2026 757-232
Delta Air Lines, Inc.
6-1162-RLL-2234 Page 8
5. *This confidential information has been omitted and filed separately with the Commission.
6. *This confidential information has been omitted and filed separately with the Commission.
P.A. No.'s 2022, 2023, 2024, 2025 and 2026 767-332ER/-332
Delta Air Lines, Inc.
6-1162-RLL-2234 Page 9
C. MODEL 767-332ER/-332 AIRCRAFT (P. A. 2024)
1. *This confidential information has been omitted and filed separately with the Commission.
P.A. No.'s 2022, 2023, 2024, 2025 and 2026 767-332ER/-332
Delta Air Lines, Inc.
6-1162-RLL-2234 Page 10
2. *This confidential information has been omitted and filed separately with the Commission.
3. *This confidential information has been omitted and filed separately with the Commission.
4. *This confidential information has been omitted and filed separately with the Commission.
5. *This confidential information has been omitted and filed separately with the Commission.
P.A. No.'s 2022, 2023, 2024, 2025 and 2026 767-332ER/-332
Delta Air Lines, Inc.
6-1162-RLL-2234 Page 11
6. *This confidential information has been omitted and filed separately with the Commission.
7. *This confidential information has been omitted and filed separately with the Commission.
P.A. No.'s 2022, 2023, 2024, 2025 and 2026 767-332ER/-332
Delta Air Lines, Inc.
6-1162-RLL-2234 Page 12
*This confidential information has been omitted and filed separately with the Commission.
8. *This confidential information has been omitted and filed separately with the Commission.
9. *This confidential information has been omitted and filed separately with the Commission.
P.A. No.'s 2022, 2023, 2024, 2025 and 2026 767-332ER/-332
Delta Air Lines, Inc.
6-1162-RLL-2234 Page 13
D. MODEL 767-432ER AIRCRAFT (P. A. 2025)
1. *This confidential information has been omitted and filed separately with the Commission.
2. *This confidential information has been omitted and filed separately with the Commission.
3. *This confidential information has been omitted and filed separately with the Commission.
P.A. No.'s 2022, 2023, 2024, 2025 and 2026 767-432ER
Delta Air Lines, Inc.
6-1162-RLL-2234 Page 14
*This confidential information has been omitted and filed separately with the Commission.
4. *This confidential information has been omitted and filed separately with the Commission.
5. *This confidential information has been omitted and filed separately with the Commission.
6. *This confidential information has been omitted and filed separately with the Commission.
7. *This confidential information has been omitted and filed separately with the Commission.
8. *This confidential information has been omitted and filed separately with the Commission.
P.A. No.'s 2022, 2023, 2024, 2025 and 2026 767-432ER
Delta Air Lines, Inc.
6-1162-RLL-2234 Page 15
*This confidential information has been omitted and filed separately with the Commission.
10. *This confidential information has been omitted and filed separately with the Commission.
11. *This confidential information has been omitted and filed separately with the Commission.
P.A. No.'s 2022, 2023, 2024, 2025 and 2026 767-432ER
Delta Air Lines, Inc.
6-1162-RLL-2234 Page 16
*This confidential information
has been omitted and filed
separately with the Commission.
|
P.A. No.'s 2022, 2023, 2024, 2025 and 2026 767-432ER
Delta Air Lines, Inc.
6-1162-RLL-2234 Page 17
12. *This confidential information has been omitted and filed separately with the Commission.
13. *This confidential information has been omitted and filed separately with the Commission.
P.A. No.'s 2022, 2023, 2024, 2025 and 2026 767-432ER
Delta Air Lines, Inc.
6-1162-RLL-2234 Page 18
E. MODEL 777 AIRCRAFT (P. A. 2026)
The following Special Matters are provided in consideration of Customer's exercise of its right to purchase Model 777-232IGW Aircraft per Purchase Agreement No. 2026. Boeing will grant Customer certain Option and Rolling Option Aircraft delivery positions at that time.
1. *This confidential information has been omitted and filed separately with the Commission.
2. *This confidential information has been omitted and filed separately with the Commission.
3. *This confidential information has been omitted and filed separately with the Commission.
P.A. No.'s 2022, 2023, 2024, 2025 and 2026 777-232IGW
Delta Air Lines, Inc.
6-1162-RLL-2234 Page 19
*This confidential information has been omitted and filed separately with the Commission.
4. *This confidential information has been omitted and filed separately with the Commission.
5. *This confidential information has been omitted and filed separately with the Commission.
6. *This confidential information has been omitted and filed separately with the Commission.
P.A. No.'s 2022, 2023, 2024, 2025 and 2026 777-232IGW
Delta Air Lines, Inc.
6-1162-RLL-2234 Page 20
7. *This confidential information has been omitted and filed separately with the Commission.
8. *This confidential information has been omitted and filed separately with the Commission.
P.A. No.'s 2022, 2023, 2024, 2025 and 2026 777-232IGW
Delta Air Lines, Inc.
6-1162-RLL-2234 Page 21
F. CUSTOMER SUPPORT TRAINING INVOICE
Boeing will maintain an accounting of all traditional and Customer unique
flight and maintenance training used in the aggregate by Customer in
accordance with the CS1 Supplemental Exhibits to Purchase Agreements
2022, 2023, 2024, 2025 and 2026 from the Execution Date to November 15,
2001. Any flight and/or maintenance training requested and used by
Customer that is not identified in the CS1 Supplemental Exhibits will
also be included in the accounting of all flight and maintenance
training. The invoice amount that Customer will pay Boeing will be the
difference between the dollar value of the Customer unique flight and
maintenance training used by Customer and the dollar value of any
traditional flight and maintenance training not used by Customer.
Customer will be responsible for paying the invoice amount within thirty
(30) days of receipt of such invoice from Boeing.
P.A. No.'s 2022, 2023, 2024, 2025 and 2026
Delta Air Lines, Inc.
6-1162-RLL-2234 Page 22
Very truly yours,
THE BOEING COMPANY
By /s/ R.B. Woodard
---------------------------------------
Its President
---------------------------------------
ACCEPTED AND AGREED TO:
Date: October 21, 1997
------------------------------------
|
DELTA AIR LINES, INC.
By /s/ Leo F. Mullin
---------------------------------------
Its President and Chief Executive Officer
--------------------------------------
|
P.A. No.'s 2022, 2023, 2024, 2025 and 2026
[BOEING LETTERHEAD]
6-1162-RLL-2245
Delta Air Lines Inc.
Hartsfield Atlanta International Airport
Atlanta, Georgia 30320
Subject: Certain Contractual Matters
Reference: Purchase Agreement Nos. 2022, 2023, 2024, 2025, 2026
(the Purchase Agreements) between The Boeing Company
(Boeing) and Delta Air Lines Inc. (Customer) relating to
Model 737-632/-732/-832, 757-232, 767-332ER/-332,
767-432ER, 777-232IGW aircraft
|
This Letter Agreement is entered into on the date below, and amends and supplements the AGTA and Purchase Agreements. All terms used but not defined in this Letter Agreement have the same meaning as in the AGTA and the Purchase Agreements.
*This confidential information has been omitted and filed separately with the Commission.
P.A. Nos. 2022, 2023, 2024, 2025, 2026
Delta Air Lines, Inc.
6-1162-RLL-2245 Page 2
*This confidential information
has been omitted and filed
separately with the Commission.
|
P.A. Nos. 2022, 2023, 2024, 2025, 2026
Delta Air Lines, Inc.
6-1162-RLL-2245 Page 3
*This confidential information
has been omitted and filed
separately with the Commission.
|
P.A. Nos. 2022, 2023, 2024, 2025, 2026
Delta Air Lines, Inc.
6-1162-RLL-2245 Page 4
*This confidential information
has been omitted and filed
separately with the Commission.
|
P.A. Nos. 2022, 2023, 2024, 2025, 2026
Delta Air Lines, Inc.
6-1162-RLL-2245 Page 5
*This confidential information
has been omitted and filed
separately with the Commission.
|
P.A. Nos. 2022, 2023, 2024, 2025, 2026
Delta Air Lines, Inc.
6-1162-RLL-2245 Page 6
Very truly yours,
THE BOEING COMPANY
By /s/R.B. Woodard
---------------------------------------
Its President
---------------------------------------
ACCEPTED AND AGREED TO:
Date: October 21, 1997
------------------------------------
|
DELTA AIR LINES, INC.
By /s/ Leo F. Mullin
-------------------------------------
Its President and Chief Executive Officer
-------------------------------------
|
P.A. Nos. 2022, 2023, 2024, 2025, 2026
[BOEING LETTERHEAD]
6-1162-RLL-2198
Delta Air Lines, Inc.
Hartsfield Atlanta International Airport
Atlanta, Georgia 30320
Subject: *This confidential information has been omitted and filed separately with the Commission.
Reference: Purchase Agreement Nos. 2022, 2023, 2024, 2025, 2026 (the
Agreements) between The Boeing Company (Boeing) and Delta Air
Lines, Inc. (Customer) relating to Model 737-632/-732/-832,
757-232, 767-332ER/-332, 767-432ER, and 777-232IGW Aircraft (the
Aircraft).
|
*This confidential information has been omitted and filed separately with the Commission.
P.A. Nos. 2022, 2023, 2024, 2025, 2026
Delta Air Lines, Inc.
6-1162-RLL-2198 Page 2
*This confidential information has been omitted and filed separately with the Commission.
P.A. Nos. 2022, 2023, 2024, 2025, 2026
Delta Air Lines, Inc.
6-1162-RLL-2198 Page 3
*This confidential information has been omitted and filed separately with the Commission.
P.A. Nos. 2022, 2023, 2024, 2025, 2026
Delta Air Lines, Inc.
6-1162-RLL-2198 Page 4
*This confidential information has been omitted and filed separately with the Commission.
P.A. Nos. 2022, 2023, 2024, 2025, 2026
Delta Air Lines, Inc.
6-1162-RLL-2198 Page 5
*This confidential information has been omitted and filed separately with the Commission.
Very truly yours,
THE BOEING COMPANY
By /s/ R.B. Woodard
-------------------------------------
Its President
-------------------------------------
ACCEPTED AND AGREED TO:
Date: October 21 , 1997
------------------------------------
|
DELTA AIR LINES, INC.
By /s/ Leo F. Mullin
-------------------------------------
Its President and Chief Executive Officer
-------------------------------------
|
P.A. Nos. 2022, 2023, 2024, 2025, 2026
Table A
*This confidential information
has been omitted and filed
separately with the Commission.
Table A
*This confidential information
has been omitted and filed
separately with the Commission.
Table B
*This confidential information
has been omitted and filed
separately with the Commission.
Table B
*This confidential information
has been omitted and filed
separately with the Commission.
[BOEING LETTERHEAD]
6-1162-RLL-2242
Delta Air Lines, Inc.
Hartsfield Atlanta International Airport
Atlanta, Georgia 30320
Subject: 1997 and 1998 Escalation Sharing
Reference: Purchase Agreement Nos. 2022, 2023, 2024 and 2025 (the Purchase
Agreements) between The Boeing Company (Boeing) and Delta Air
Lines, Inc. (Customer) relating to Model 737-632/-732/-832,
757-232, 767-332/332ER, and 767-432ER aircraft (the Aircraft)
|
This Letter Agreement amends and supplements the Purchase Agreement. All terms used but not defined in this Letter Agreement have the same meaning as in the AGTA and the Purchase Agreement.
1. Escalation Sharing Commitment.
Boeing agrees to share one-half of the escalation up to a maximum of three (3) percent per year in each of the calendar years 1997 and 1998 (the Sharing Credit), as set forth in paragraph 2 below, for any of the Aircraft scheduled to be delivered after December 31, 1996. For the purpose of this Letter Agreement such Aircraft are referred to as "Eligible Aircraft".
All escalation calculations under this Letter Agreement will be made in accordance with Exhibit D to the AGTA entitled "Escalation Adjustment Airframe and Optional Features" (Exhibit D), using actual escalation indices published for the applicable period. The Sharing Credit, if applicable, will be provided as a credit memorandum taken against the Aircraft Price on the invoice at time of delivery of such Aircraft.
2. Escalation Credit Memo.
2.1 Aircraft Scheduled to be Delivered prior to 1997.
No escalation sharing credit memorandum is provided for Aircraft scheduled to be delivered prior to January 1, 1997.
P.A. Nos. 2022, 2023, 2024 and 2025
Delta Air Lines, Inc.
6-1162-RLL-2242 Page 2
2.2 Eligible Aircraft Scheduled to be Delivered in 1997.
At the time of delivery of each Eligible Aircraft scheduled to be delivered in 1997, Boeing will issue to Customer a credit memorandum (the 1997 Sharing Credit) equal to one-half of the difference between the airframe and optional features escalation amount calculated for an assumed December 1996 delivery month (the 1996 Base Month) and the escalation amount calculated for the actual month in 1997 the Aircraft is scheduled to be delivered. The total credit percentage will be limited to a maximum of three (3) percent.
The 1997 Sharing Credit will be determined as follows, utilizing the provisions of Exhibit D to establish the required escalation factors, including the provisions related to the rounding of the calculated factors to four decimal places:
(a) Determine the escalation factor for the 1996 Base Month and define such factor as "A".
(b) Determine the escalation factor for the actual month in 1997 that the Aircraft is scheduled to be delivered (the 1997 Actual Factor) and divide such 1997 Actual Factor by "A". If the resultant (i) is equal to or less than 1.0600, subtract 1.0000, divide by 2.0000 and add 1.0000 or (ii) is greater than 1.0600, subtract .0300. Define the resultant factor from either (i) or (ii) as "B".
(c) Determine the adjusted escalation factor for the month in 1997 the Aircraft is scheduled to be delivered by multiplying "A" times "B" (the 1997 Adjusted Factor). The 1997 Sharing Credit is determined by multiplying the Airframe Price and Optional Features Price times the difference between the 1997 Adjusted Factor and the 1997 Actual Factor.
2.3 Eligible Aircraft Scheduled to be Delivered in 1998.
At the time of delivery of each Eligible Aircraft scheduled to be delivered in 1998, Boeing will issue to Customer a credit memorandum (the 1998 Sharing Credit) equal to (i) an amount calculated pursuant to paragraph 2.2 above as if the actual month in 1997 the Aircraft is scheduled to deliver is December 1997 plus (ii) one-half of the difference between the airframe and optional features escalation amount calculated for such assumed December 1997 delivery month (the 1997 Base Month) and the amount calculated for the actual month in 1998 the Aircraft is scheduled to be delivered. The total credit percentage will be limited to a maximum of three (3) percent.
The 1998 Sharing Credit will be determined as follows, utilizing the provisions of Exhibit D to establish the required escalation factors, including the provisions related to the rounding of the calculated factors to four decimal places:
P.A. Nos. 2022, 2023, 2024 and 2025
Delta Air Lines, Inc.
6-1162-RLL-2242 Page 3
(a) Determine the escalation factor for both the 1996 Base Month (the 1996 Base Factor) and the 1997 Base Month (the 1997 Base Factor) and divide such 1997 Base Factor by such 1996 Base Factor. If the resultant (i) is equal to or less than 1.0600, subtract 1.0000, divide by 2.0000 and add 1.0000 or (ii) is greater than 1.0600, subtract .0300. Define the resultant factor from either (i) or (ii) as "B".
(b) Determine the escalation factor for the actual month in 1998 that the Aircraft is scheduled to be delivered (the 1998 Actual Factor) and divide such factor by the 1997 Base Factor. If the resultant (i) is equal to or less than 1.0600, subtract 1.0000, divide by 2.0000 and add 1.0000 or (ii) is greater than 1.0600, subtract .0300. Define the resultant factor from either (i) or (ii) as "C".
(c) Determine the adjusted escalation factor for the actual month in 1998 the Aircraft is scheduled to be delivered by multiplying "A" times "B" times "C" (the 1998 Adjusted Factor). The 1998 Sharing Credit is determined by multiplying the airframe and optional features escalation amount times the difference between the 1998 Adjusted Factor and the 1998 Actual Factor.
2.4 Eligible Aircraft Scheduled to be Delivered after 1998.
At the time of delivery of each Eligible Aircraft scheduled to be delivered after calendar year 1998, Boeing will issue to Customer a credit memorandum (the Post-1998 Sharing Credit) equal to an amount calculated pursuant to paragraph 2.3 above as if the actual month in 1998 the Aircraft is scheduled to be delivered is December 1998, plus (ii) the airframe and optional features escalation amount calculated for such assumed December 1998 delivery month (the 1998 Base Month) and the amount calculated for the actual month the Aircraft is scheduled to be delivered.
The Post-1998 Sharing Credit will be determined as follows, utilizing the provisions of Exhibit D to establish the required escalation factors, including the provisions related to the rounding of the calculated factors to four decimal places:
(a) Determine the escalation factor for both the 1996 Base Month (the 1996 Base Factor) and the 1997 Base Month (the 1997 Base Factor) and divide such 1997 Base Factor by such 1996 Base Factor. If the resultant (i) is equal to or less than 1.0600, subtract 1.0000, divide by 2.0000 and add 1.0000 or (ii) is greater than 1.0600, subtract .0300. Define the resultant factor from either (i) or (ii) as "B".
(b) Determine the escalation factor for the 1998 Base Month (the 1998 Base Factor) and divide such 1998 Base Factor by the 1997 Base Factor. If the
P.A. Nos. 2022, 2023, 2024 and 2025
Delta Air Lines, Inc.
6-1162-RLL-2242 Page 4
resultant (i) is equal to or less than 1.0600, do not adjust the factor or (ii) is greater than 1.0600, subtract .0300. Define the resultant factor from either (i) or (ii) as "C".
(c) Determine the escalation factor for the actual month after 1998 that the Aircraft is scheduled to be delivered (the Post-1998 Actual Factor) and divide such factor by the 1998 Base Factor. Define the resultant factor as "D".
(d) Determine the adjusted escalation factor for the actual month after 1998 the Aircraft is scheduled to be delivered by multiplying "A" times "B" times "C" times "D" (the Post-1998 Adjusted Factor). The Post-1998 Sharing Credit is determined by multiplying the Airframe Price and Optional Features Price times the difference between the Post-1998 Adjusted Factor and the Post-1998 Actual Factor.
3. Revision of Advance Payment Base Price.
The Advance Payment Base Prices set forth in Table 1 for each Eligible Aircraft reflect the above escalation sharing formulation.
P.A. Nos. 2022, 2023, 2024 and 2025
Delta Air Lines, Inc.
6-1162-RLL-2242 Page 5
4. Credits Expressed as a Percentage.
It is agreed that any credit memoranda specified in Letter Agreements Numbers, 6-1162-RLL-2234 which is expressed as a percentage or subject to escalation per the provisions of Exhibit D, will be based on the Airframe Price escalated per the escalation provisions set forth in Exhibit D as adjusted by utilizing the escalation sharing calculations set forth in this Letter Agreement.
Very truly yours,
THE BOEING COMPANY
By /s/ R.B. Woodard
-------------------------------------
Its President
-------------------------------------
ACCEPTED AND AGREED TO:
Date: October 21 , 1997
-----------------------
|
DELTA AIR LINES, INC.
By /s/ Leo F. Mullin
-------------------------------------
Its President and Chief Executive Officer
-------------------------------------
|
P.A. Nos. 2022, 2023, 2024 and 2025
[BOEING LETTERHEAD]
6-1162-RLL-2243
Delta Air Lines, Inc.
Hartsfield Atlanta International Airport
Atlanta, Georgia 30320
Subject: *This confidential information has been omitted and filed separately with the Commission.
Reference: Purchase Agreement Nos. 2022, 2023, 2024, 2025, and 2026 (the
Purchase Agreements) between The Boeing Company (Boeing) and
Delta Air Lines Inc. (Customer) relating to Model
737-632/-732/-832, (737 Aircraft), 757-232, (757 Aircraft),
767-332(767-332 Aircraft), 767-332ER (767-332ER Aircraft),
767-432ER, (767-432ER Aircraft) and 777-232IGW aircraft (777
Aircraft)
|
This Letter Agreement amends and supplements the Purchase Agreements. All terms used but not defined in this Letter Agreement have the same meaning as in the AGTA and the Purchase Agreements.
*This confidential information has been omitted and filed separately with the Commission.
P.A. Nos. 2022, 2023, 2024, 2025 and 2026
Delta Air Lines, Inc.
6-1162-RLL-2243 Page 2
*This confidential information
has been omitted and filed
separately with the Commission.
|
P.A. Nos. 2022, 2023, 2024, 2025 and 2026
Delta Air Lines, Inc.
6-1162-RLL-2243 Page 3
*This confidential information
has been omitted and filed
separately with the Commission.
|
Very truly yours,
THE BOEING COMPANY
By /s/ R. B. Woodard
---------------------------------------------
Its President
------------------------------------------
ACCEPTED AND AGREED TO:
Date: October 21 , 1997
----------------------
|
DELTA AIR LINES, INC.
By /s/ Leo F. Mullin
---------------------------------------------
Its President and Chief Executive Officer
---------------------------------------
|
P.A. Nos. 2022, 2023, 2024, 2025 and 2026
[BOEING LETTERHEAD]
6-1162-RLL-2241
Delta Air Lines, Inc.
Hartsfield Atlanta International Airport
Atlanta, Georgia 30320
Subject: *This confidential information has been omitted and filed separately with the Commission.
Reference: Purchase Agreement Nos. 2022, 2024, 2025 and 2026 (the Purchase Agreements) between The Boeing Company (Boeing) and Delta Air Lines, Inc. (Customer) relating to Model 737-632/-732/-832, 767-332ER/332, 767-432ER and 777-232IGW aircraft (the Aircraft)
This Letter Agreement amends and supplements the Purchase Agreements. All terms used but not defined in this Letter Agreement have the same meaning as in the AGTA and the Purchase Agreements.
*This confidential information has been omitted and filed separately with the Commission.
P.A. Nos. 2022, 2024, 2025 and 2026
Delta Air Lines, Inc.
6-1162-RLL-2241 Page 2
*This confidential information
has been omitted and filed
separately with the Commission.
|
Very truly yours,
THE BOEING COMPANY
By /s/ R. B. Woodard
-------------------------------------------------------
Its President
--------------------------------------------------------
ACCEPTED AND AGREED TO:
Date: October 21 , 1997
-------------------------------
DELTA AIR LINES, INC.
By /s/ Leo F. Mullin
---------------------------------------------------------
Its President and Chief Executive Officer
-------------------------------------------------------
|
P.A. Nos. 2022, 2024, 2025 and 2026
[BOEING LETTERHEAD]
6-1162-RLL-2244
Delta Air Lines, Inc.
Hartsfield Atlanta International Airport
Atlanta, Georgia 30320
Subject: *This confidential information has been omitted and filed separately with the Commission.
Reference: Purchase Agreement Nos. 2022, 2024 and 2025, (the Agreements) between The Boeing Company (Boeing) and Delta Air Lines, Inc. (Customer) relating to Model 737-632/-732/-832, 767-332ER/-332 and 767-432ER
(the Aircraft)
This Letter Agreement amends and supplements the Agreements. All terms used but not defined in this Letter Agreement have the same meaning as in the AGTA and the Purchase Agreements.
1. *This confidential information has been omitted and filed separately with the Commission.
Very truly yours,
THE BOEING COMPANY
By /s/ R. B. Woodard
-----------------------------------------------
Its President
----------------------------------------------
ACCEPTED AND AGREED TO:
Date: October 21 , 1997
-------------------------------
DELTA AIR LINES, INC.
By /s/ Leo F. Mullin
-----------------------------------------------
Its President and Chief Executive Officer
----------------------------------------------
|
P.A. Nos. 2022, 2024,and 2025
[BOEING LETTERHEAD]
6-1162-RLL-2247
Delta Air Lines, Inc.
Hartsfield Atlanta International Airport
Atlanta, Georgia 30320
Subject: *This confidential information has been omitted and filed separately with the Commission.
Reference: Purchase Agreement No. 2022, 2023, 2024, 2025,and 2026 (the Purchase Agreements) between The Boeing Company (Boeing) and Delta Air Lines, Inc. (Customer) relating to Model 737-632/-732/-832, 757-232, 767-332/-332ER, 767-432ER and 777-232IGW aircraft (the Aircraft)
This Letter Agreement amends and supplements the Purchase Agreements. All terms used but not defined in this Letter Agreement have the same meaning as in the AGTA and the Purchase Agreements.
*This confidential information has been omitted and filed separately with the Commission.
P.A. Nos. 2022, 2023, 2024, 2025 and 2026
Delta Air Lines, Inc.
6-1162-RLL-2247 Page 2
*This confidential information
has been omitted and filed
separately with the Commission.
|
P.A. Nos. 2022, 2023, 2024, 2025 and 2026
Delta Air Lines, Inc.
6-1162-RLL-2247 Page 3
*This confidential information
has been omitted and filed
separately with the Commission.
|
Very truly yours,
THE BOEING COMPANY
By /s/ R. B. Woodard
-----------------------------------------------
Its President
--------------------------------------------
ACCEPTED AND AGREED TO:
Date: October 21 , 1997
-------------------------------
DELTA AIR LINES, INC.
By /s/ Leo F. Mullin
---------------------------------------------
Its President and Chief Executive Officer
--------------------------------------------
|
P.A. Nos. 2022, 2023, 2024, 2025 and 2026
[BOEING LETTERHEAD]
6-1162-RLL-2251
Delta Air Lines, Inc.
Hartsfield Atlanta International Airport
Atlanta, Georgia 30320
Subject: *This confidential information has been omitted and filed
separately with the Commission.
Reference: Purchase Agreement Nos. 2022, 2023, 2024, 2025, 2026 (the
Purchase Agreements) between The Boeing Company (Boeing) and
Delta Air Lines, Inc. (Customer) relating to Model
737-632/-732/-832, 757-232, 767-332ER/-332, 767-432ER,
777-232IGW aircraft (the Aircraft)
|
This Letter Agreement amends and supplements the Purchase Agreements. All terms used but not defined in this Letter Agreement have the same meaning as in the AGTA and the Purchase Agreements
*This confidential information has been omitted and filed separately with the Commission.
P.A. Nos. 2022, 2023, 2024, 2025 and 2026
Delta Air Lines, Inc.
6-1162-RLL-2251 Page 2
*This confidential information
has been omitted and filed
separately with the Commission.
|
Very truly yours,
THE BOEING COMPANY
By /s/ R. B. Woodard
---------------------------------------
Its President
--------------------------------------
ACCEPTED AND AGREED TO:
Date: October 21 , 1997
---------------------------
|
DELTA AIR LINES, INC.
By /s/ Leo F. Mullin
---------------------------------------
Its President and Chief Executive Officer
--------------------------------------
|
P.A. Nos. 2022, 2023, 2024, 2025 and 2026
[BOEING LETTERHEAD]
6-1162-RLL-2147
Delta Air Lines, Inc.
Hartsfield Atlanta International Airport
Atlanta, Georgia 30320
Subject: *This confidential information has been omitted and filed
separately with the Commission.
Reference: Purchase Agreement No. 2022 (the Purchase Agreement) between
The Boeing Company (Boeing) and Delta Air Lines, Inc.
(Customer) relating to Model 737-632/-732/-832 aircraft (the
Aircraft)
|
This Letter Agreement amends the Purchase Agreement and Exhibit C of the AGTA. All terms used but not defined in this Letter Agreement have the same meaning as in the Purchase Agreement and AGTA.
*This confidential information has been omitted and filed separately with the Commission.
P.A. No. 2022
Delta Air Lines, Inc.
6-1162-RLL-2147 Page 2
*This confidential information
has been omitted and filed
separately with the Commission.
|
P.A. No. 2022
Delta Air Lines, Inc.
6-1162-RLL-2147 Page 3
*This confidential information
has been omitted and filed
separately with the Commission.
|
P.A. No. 2022
Delta Air Lines, Inc.
6-1162-RLL-2147 Page 4
*This confidential information
has been omitted and filed
separately with the Commission.
|
P.A. No. 2022
Delta Air Lines, Inc.
6-1162-RLL-2147 Page 5
*This confidential information
has been omitted and filed
separately with the Commission.
|
P.A. No. 2022
Delta Air Lines, Inc.
6-1162-RLL-2147 Page 6
*This confidential information
has been omitted and filed
separately with the Commission.
|
P.A. No. 2022
Delta Air Lines, Inc.
6-1162-RLL-2147 Page 7
4.1.2 If the Program is determined to be non-compliant, Customer will, upon request, submit to Boeing sufficient information reasonably required by Boeing to allow Boeing:
(a) To verify cost elements of the Actual Maintenance Cost as defined in paragraph 3.4,
(b) To verify the Fleet, Fleet Hours, and the Actual Average Flight Time per flight,
(c) To analyze the problems causing such non-compliance,
(d) To develop, when required, appropriate remedial action.
4.1.3 All reports submitted to Boeing will be addressed to the attention of:
Director - Product Assurance Contracts
Boeing Commercial Airplane Group
P.O. Box 3707 Mail Stop 76-02
Fax: 206-237-1706
Seattle, Washington 98124-2207
4.2 Boeing's Obligation under the Program.
4.2.1 Boeing will report to Customer within 30 days after receiving Customer's report for each Reporting Period, the following data for that Reporting Period (see Attachment C):
(a) Target Maintenance Cost,
(b) Cumulative Average Target Maintenance Cost,
(c) Actual Maintenance Cost (as adjusted for the amount of
Subcontracted Maintenance),
(d) Cumulative Average Actual Maintenance Cost,
(e) Material price inflation factor,
4.2.2 At Customer's request, Boeing will provide Customer sufficient information to verify the data described in paragraph 4.2.1 and the calculations used to produce that data.
P.A. No. 2022
Delta Air Lines, Inc.
6-1162-RLL-2147 Page 8
4.2.3 All reports submitted to Customer will be addressed to the attention of:
Delta Air Lines, Inc.
Technical Operations Division Controller
Department 217
P.O. Box 20706
Atlanta, GA 30320
4.3 Corrective Action.
If the Program is non-compliant under paragraph 3.5 and Customer provides its reports to Boeing pursuant to paragraph 4.1, then Boeing will:
4.3.1. Facilitate a meeting with the Customer to determine the exact problem(s) causing the increase in cost and
4.3.2. Within forty-five (45) days from the date of the meeting, produce a plan to investigate and resolve the possible causes of noncompliance determined in the meeting with the intent to minimize the time required to implement the corrective action.
4.3.3. Provide technical assistance to Customer in the form of analysis and recommendations of a kind and nature which Boeing determines to be best suited for reducing Actual Maintenance Cost.
4.3.4. If necessary, initiate a design review of the systems, accessories, equipment or parts determined by Boeing and Customer to be the primary cause of the non compliance and, when in Boeing's judgment a redesign is indicated as a technically and economically practicable means of attaining Program compliance, Boeing will, with Customer's concurrence, redesign or cause the redesign of such items, and
4.3.5. If such redesign results in retrofit kits being offered by Boeing or Boeing's suppliers, Boeing will provide such kits or cause such kits to be provided at no charge to Customer. Such retrofit kits will be provided as soon as practical, considering reasonable design and manufacturing lead times. Boeing will also reimburse, at Boeing's then existing Warranty labor rate, Customer's reasonable direct labor costs for incorporation of any such kit manufactured to Boeing's, or Boeing's supplier's, detailed design. Such reimbursement will be provided pursuant to Exhibit C, Product Assurance Document, of the AGTA.
P.A. No. 2022
Delta Air Lines, Inc.
6-1162-RLL-2147 Page 9
4.3.6. *This confidential information has been omitted and filed separately with the Commission.
5. Corrective Action Conditions and Limitations.
5.1 If, with the intent of reducing Covered Maintenance Costs, Boeing or any supplier issues service bulletins, service letters or other written instructions or offers no-charge retrofit kits ("Correction"), Customer will comply with such instructions or install such kits within a period of 240 days after issuance of such instructions or receipt of such kits, at Customer's facility, or such longer period as may be mutually agreed by the parties. If Customer is otherwise required to complete the Correction and does not do so in accordance with requirements of this paragraph, all airframe maintenance costs which Boeing reasonably determines would have been eliminated if such Correction had been incorporated, will be subtracted from the Actual Maintenance Costs reported after expiration of such requirements.
5.2 Customer will promptly notify Boeing in writing of any variations in its maintenance cost accounting system or procedures which would have a materiel affect on Customer's reported Actual Maintenance Costs. Boeing will have the right to make adjustments to the Cumulative Average Target Maintenance Cost to reflect the effect of any such variations.
5.3 Upon reasonable notice to Customer, Boeing will have the right to audit all Actual Maintenance Costs reported by Customer, as well as the maintenance practices and procedures related thereto during the Program Term. Boeing will also have the right to disapprove costs it deems improperly reported. Boeing will provide Customer written notification of its disapproval of any such costs, and if Customer does not provide proof that such costs are properly chargeable within 60 days after such notification, Boeing's disapproval will be deemed final and conclusive and Boeing may deduct such costs from the computation of Actual Maintenance Costs.
P.A. No. 2022
Delta Air Lines, Inc.
6-1162-RLL-2147 Page 10
5.4 Upon reasonable notice to Customer, Boeing may inspect Customer's maintenance facilities, programs and procedures. If Boeing recommends in writing reasonable changes to Customer's maintenance programs and procedures which would reduce Actual Maintenance Costs and Customer does not implement such changes or Customer delays implementing such changes beyond the period set forth in paragraph 5.1, Boeing will have the right to adjust the Actual Maintenance Costs that have been reported to deduct the increased maintenance costs which Boeing estimates resulted from Customer's failure or delay in implementing such changes.
5.5 The Actual Maintenance Cost will not include the following:
(a) Costs arising from loss of, or damage to, any Covered Aircraft, or any system, accessory, equipment or part thereof.
(b) Any taxes, duties, tariffs, surcharges, transportation, insurance interest or overhead.
(c) The cost of initial or sustaining spare parts or the depreciation of such spare parts; costs resulting from any modification to the Covered Aircraft or any system, equipment, accessory or part thereof other than modifications described under paragraphs 4.3.5 and 5.1 herein.
(d) Costs resulting from the negligent acts or omissions of Customer.
(e) Costs resulting from the failure to comply with Boeing's or Boeing's suppliers' applicable written instructions for the operation, service, maintenance or overhaul of any Covered Aircraft, or any system, accessory, equipment or part thereof.
(f) Costs attributable to loss of use, revenue or profit.
(g) Costs of consumable fluids, including fuel.
(h) Costs due to acts of God, war, armed hostilities, riots, fires, floods, earthquakes or serious accidents, Governmental acts or failure to act affecting materials, facilities or Aircraft needed for the maintenance of Covered Aircraft.
P.A. No. 2022
Delta Air Lines, Inc.
6-1162-RLL-2147 Page 11
(i) Costs due to strikes or labor troubles causing
cessation, slowdown or interruption of work related
to the maintenance of Covered Aircraft.
(j) Costs resulting from failure of or delay in
transportation or inability, after due and timely
diligence, to procure materials, systems,
accessories, equipment or parts needed for the
maintenance of Covered Aircraft.
(k) Amounts for any part provided by Boeing or Boeing's
suppliers to Customer at no charge.
(l) Amounts equal to the difference between the reported
price for any part and the reduced price for such
part as provided by Boeing or Boeing's suppliers to
Customer.
(m) Amounts related to any warranty, maintenance cost
guarantee, or similar agreement, for which there is a
credit memorandum or other payment scheme,
established in Customer's favor, and issued by Boeing
or Boeing's suppliers to Customer.
|
5.6 The program will be suspended if during any Period the average utilization for the Covered Aircraft is less than 2,000 flight hours. The Program will resume on the first day of any subsequent Reporting Period during which the average utilization for the Covered Aircraft exceeds that set forth above. The Cumulative Average Reporting Cost as of any Reporting Period during the Program Term will exclude all Actual Maintenance Cost and Fleet Hours accumulated during any Reporting Period in which the program was suspended as provided above. The program will not be extended to reflect any period wherein it was suspended.
5.7 At Boeing's request, Customer will assign to Boeing, any of Customer's rights against the manufacturer of any equipment, accessory or part installed in the Covered Aircraft as Boeing may reasonably require to fulfill its obligations with respect to any corrective action provided by Boeing hereunder.
5.8 THIS LETTER AGREEMENT AND THE RIGHTS AND REMEDIES OF CUSTOMER AND OBLIGATIONS OF BOEING HEREIN ARE SUBJECT TO THE DISCLAIMER AND RELEASE, AND EXCLUSION OF CONSEQUENTIAL AND OTHER DAMAGES PROVISIONS OF EXHIBIT C, PRODUCT ASSURANCE DOCUMENT, OF THE AGTA.
P.A. No. 2022
Delta Air Lines, Inc.
6-1162-RLL-2147 Page 12
If the foregoing correctly sets forth your understanding of our agreement with respect to the matters treated above, please indicate your acceptance and approval below.
Very truly yours,
THE BOEING COMPANY
By /s/ R. B. Woodard
-----------------------------------
Its President
-----------------------------------
ACCEPTED AND AGREED TO:
Date: October 21 , 1997
-------------------------
|
DELTA AIR LINES, INC.
By /s/ Leo F. Mullin --------------------------------------------- Its President and Chief Executive Officer ----------------------------------------- |
Attachments
P.A. No. 2022
Delta Air Lines, Inc.
Attachment A to
6-1162-RLL-2147 Page 1
Attachment A - Adjustments
|
For each reporting period, Boeing will calculate Target Maintenance Costs by revising the Projected Target Maintenance Cost to reflect actual data for the following parameters:
Material Price Inflation
Material prices will be adjusted using Producer Price Indexes as defined below. The Target Material Cost for a Reporting Period will be calculated by multiplying the projected target material cost by the ratio of the average index for the Reporting Period to the index related to the projected target material cost.
The measure of material price inflation will be the Producer Price Index for "Aircraft Parts and Auxiliary Equipment, n.e.c." (Standard Industrial Classification Code 3728). This index will be obtained from the publication "Producer Prices and Price Indexes" published by the U.S. Department of Labor, Bureau of Labor Statistics or any comparable successor publication published by the U.S. Department of Labor, Bureau of Labor Statistics or any comparable successor agency.
Labor Cost
The projected target labor cost will be adjusted to reflect Customer's actual Labor Cost. The Target Labor Cost will be calculated by multiplying the Projected Target Labor Cost by the ratio of Customer's then-current Labor Rate to the Labor Rate used to calculate the projected target labor cost for that Reporting Period.
Airframe Maintenance Performed by Others (Subcontracted Maintenance)
The Projected Target Material Cost and Projected Target Labor Cost assume that Subcontracted Maintenance will be no more than the Cumulative Average Reported Cost as of any reporting period. If Subcontracted Maintenance amounts to more than the Cumulative Average Actual Maintenance Cost as of any reporting period, Boeing reserves the right to revise the Target Material Cost and Target Labor Cost for that Reporting Period accordingly.
To adjust Subcontracted Maintenance to Customer's equivalent direct labor and direct material costs, Subcontracted Maintenance will be reduced by TBD percent before it is distributed to Direct Labor and Direct Material.
P.A. No. 2022
Delta Air Lines, Inc.
Attachment A to
6-1162-RLL-2147 Page 2
Covered Aircraft
The Projected Target Maintenance Costs are based on the number of Covered Aircraft. If the number of Covered Aircraft changes during any Reporting Period, Boeing reserves the right to incorporate such change when calculating the Target Maintenance Costs for that Reporting Period.
Delivery Schedule
The Projected Target Maintenance Costs are based on the delivery schedule of Covered Aircraft as described in Article 2 of the Purchase Agreement. If the delivery schedule for the Covered Aircraft changes during any Reporting Period, Boeing reserves the right to incorporate such change when calculating the Target Maintenance Costs for that Reporting Period.
Average Flight Time
If the Actual Average Flight Time (AAFT) for any Reporting Period differs from the Projected Average Flight Time (PAFT) of * hours, the Target Material Cost (TMC) and Target Labor Cost (TLC) for that reporting period will be adjusted as follows:
.65 +
TMC for AAFT = TMC for PAFT X AAFT .35
----------
.65 +
PAFT .35
.54 +
TLC for AAFT = TLC for PAFT X AAFT .46
----------
.54 +
PAFT .46
|
Note: The adjustment formula set forth above is obtained from the publication "Airframe Maintenance Analysis of IATA PPM (Production Performance Measurements) Maintenance Cost Data".
Utilization
*This confidential information as been omitted and filed separately with the Commission.
P.A. No. 2022
Delta Air Lines, Inc.
Attachment A to
6-1162-RLL-2147 Page 3
Covered Aircraft Configuration
The Target Maintenance Cost set forth in this Program is based on the configuration for the Covered Aircraft as set forth in Exhibit A to the Purchase Agreement. Such Target Maintenance Cost may be adjusted by Boeing to appropriately reflect any changes to the actual configuration of the Covered Aircraft at the time of delivery thereof to Customer. Adjustments to such Target Maintenance Cost may also be made at any time during the Program Term to reflect any additional changes in the configuration of the Covered Aircraft.
P.A. No. 2022
Delta Air Lines, Inc.
Attachment B to
6-1162-RLL-2147 Page 1
To: Director - Product Assurance Contracts
Boeing Commercial Airplane Group
P.O. Box 3707 Mail Stop 76-02
Fax: 206-237-1706
Seattle, Washington 98124-2207
Subject: Letter Agreement No. 6-1162-RLL-2147 to Purchase Agreement No. 2022
Airframe Maintenance Cost Protection Program
|
Reported herein are certain data required under paragraph 4.1.1 of the referenced Letter Agreement.
Direct Direct Subcontracted
Actual Labor Material Maintenance
Maintenance Costs (total cost) (total cost) (total cost)
--------------------------------------------------------------------------------
Scheduled
Maintenance
--------------------------------------------------------------------------------
Non-Scheduled Maintenance
--------------------------------------------------------------------------------
Repair &
Overhaul
--------------------------------------------------------------------------------
Modifications
(ref. para.
4.3 & 5.1)
--------------------------------------------------------------------------------
Total
|
The above labor costs are exclusive of time consumed by employees while waiting for work, traveling to or from work, training, vacation, sick leave, or in any other similar absences from the actual maintenance work. The above material costs exclude all costs described in paragraph 5 of the referenced Letter Agreement.
Average per Average per Average Total per manhour flight number of aircraft Labor Rate Flight Time Covered Aircraft Flight Hours -------------------------------------------------------------------------------- |
P.A. No. 2022
Delta Air Lines, Inc.
Attachment B to
6-1162-RLL-2147 Page 2
The above labor rate excludes all fringe benefits, premium time allowances, social charges, business taxes and the like.
DELTA AIR LINES, INC.
By Date
---------------------------- --------------------------
Its
----------------------------
|
P.A. No. 2022
Delta Air Lines, Inc.
Attachment C to
6-1162-RLL-2147 Page 1
To: DELTA AIR LINES, INC.
Subject: Letter Agreement No. 6-1162-RLL-2147 to Purchase Agreement No. 2022
Airframe Maintenance Cost Protection Program
|
Reported herein are certain data required under paragraph 4.2.1 of the referenced Letter Agreement.
Costs as reported by Customer /in foreign currency/:
Actual Direct Direct Subcontracted
Maintenance Costs Labor Material Maintenance
--------------------------------------------------------------------------------
Scheduled
Maintenance
--------------------------------------------------------------------------------
Non-Scheduled
Maintenance
--------------------------------------------------------------------------------
Repair &
Overhaul
--------------------------------------------------------------------------------
Modifications
|
Customer's costs with adjusted Subcontracted Maintenance (per Attachment B of the referenced Letter Agreement) in U.S. dollars.
Actual Direct Direct Subcontracted Subcontracted
Maintenance Costs Labor Material Labor Material
--------------------------------------------------------------------------------
Scheduled
Maintenance
--------------------------------------------------------------------------------
Non-Scheduled
Maintenance
--------------------------------------------------------------------------------
Repair &
Overhaul
--------------------------------------------------------------------------------
Modifications
--------------------------------------------------------------------------------
Total
|
P.A. No. 2022
Delta Air Lines, Inc.
Attachment A to
6-1162-RLL-2147 Page 2
Actual Costs and Target Costs (per Attachment B of the referenced Letter Agreement) /in U.S. dollars/.
Reporting Reporting Reporting Reporting Reporting
Period 1 Period 2 Period 3 Period 4 Period 5
-----------------------------------------------------------------------------------------------------------
Year dollars
-----------------------------------------------------------------------------------------------------------
Actual Labor
-----------------------------------------------------------------------------------------------------------
Actual Material
-----------------------------------------------------------------------------------------------------------
Actual Maintenance Cost
-----------------------------------------------------------------------------------------------------------
Fleet Hours
-----------------------------------------------------------------------------------------------------------
Cumulative Actual
Maintenance Cost
-----------------------------------------------------------------------------------------------------------
Number of Covered Aircraft
-----------------------------------------------------------------------------------------------------------
Currency Exchange factor
-----------------------------------------------------------------------------------------------------------
Per man-hour Labor Rate
-----------------------------------------------------------------------------------------------------------
Material Inflation factor
-----------------------------------------------------------------------------------------------------------
Average Flight Time
-----------------------------------------------------------------------------------------------------------
Target Labor Cost
-----------------------------------------------------------------------------------------------------------
Target Material Cost
-----------------------------------------------------------------------------------------------------------
Target Maintenance Cost
-----------------------------------------------------------------------------------------------------------
Cumulative Target
Maintenance Cost
|
As of this Reporting Period, the Program is in compliance:
Yes [ ] No [ ]
Very truly yours,
THE BOEING COMPANY
P.A. No. 2022
[BOEING LETTERHEAD]
6-1162-RLL-2191
Delta Air Lines, Inc.
Hartsfield Atlanta International Airport
Atlanta, Georgia 30320
Subject: Multiple Aircraft Operating Weights
Reference: Purchase Agreement No. 2022 (the Purchase Agreement) between
The Boeing Company (Boeing) and Delta Air Lines, Inc.
(Customer) relating to Model 737-632/-732/-832 aircraft (the
Aircraft)
|
This Letter Agreement amends and supplements the Purchase Agreement. All terms used but not defined in this Letter Agreement have the same meaning as in the AGTA and the Purchase Agreement.
In this Letter Agreement, the term "Aircraft" means all Model 737-632 or 737-732 or 737-832 aircraft purchased by Customer under the Purchase Agreement .
*This confidential information has been omitted and filed separately with the Commission.
P.A. No. 2022
Delta Air Lines, Inc.
6-1162-RLL-2191 Page 2
*This confidential information has been omitted and filed separately with the Commission.
P.A. No. 2022
Delta Air Lines, Inc.
6-1162-RLL-2191 Page 3
*This confidential information has been omitted and filed separately with the Commission.
Very truly yours,
THE BOEING COMPANY
By /s/ R. B. Woodard
---------------------------------------
Its President
---------------------------------------
ACCEPTED AND AGREED TO:
Date: October 21 , 1997
-------------------------------
|
DELTA AIR LINES, INC.
By /s/ Leo F. Mullin --------------------------------------- Its President and Chief Executive Officer --------------------------------------- |
P.A. No. 2022
[BOEING LETTERHEAD]
6-1162-RLL-2233
Delta Air Lines, Inc.
Hartsfield Atlanta International Airport
Atlanta, Georgia 30320
Subject: Aircraft Performance Guarantees
Reference: Purchase Agreement No. 2022 (the Purchase Agreement) between
The Boeing Company (Boeing) and Delta Air Lines, Inc.
(Customer) relating to Model 737-632/-732/-832 aircraft (the
Aircraft)
|
This Letter Agreement amends and supplements the Purchase Agreement. All terms used but not defined in this Letter Agreement have the same meaning as in the AGTA and the Purchase Agreement.
Boeing agrees to provide Customer with the Performance Guarantees in Attachments A, B and C to this Letter Agreement. These guarantees are exclusive and expire upon Delivery of the Aircraft to Customer. Customer's remedies survive Delivery of the Aircraft.
Very truly yours,
THE BOEING COMPANY
By /s/ R. B. Woodard
---------------------------------------
Its President
---------------------------------------
ACCEPTED AND AGREED TO:
Date: October 21 , 1997
-------------------------------
|
DELTA AIR LINES, INC.
By /s/ Leo F. Mullin --------------------------------------- Its President and Chief Executive Officer --------------------------------------- |
Attachment
P.A. No. 2022
Attachment A to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B22 Engines
MODEL 737-632 PERFORMANCE GUARANTEES
SECTION CONTENTS 1 * 2 * 3 * 4 * 5 * 6 * 7 * 8 * 9 * |
*This confidential information has been omitted and filed separately with the Commission.
B-B111-M97-0632C
Attachment A to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B22 Engines
1 * 2 * 2.1 * 2.2 * 2.3 * |
*This confidential information has been omitted and filed separately with the Commission.
B-B111-M97-0632C
Attachment A to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B22 Engines
2.4 * 2.5 * |
*This confidential information has been omitted and filed separately with the Commission.
B-B111-M97-0632C
Attachment A to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B22 Engines
2.6 * 2.6.1 * 2.6.2 * 2.6.3 * |
*This confidential information has been omitted and filed separately with the Commission.
B-B111-M97-0632C
Attachment A to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B22 Engines
2.7 * 2.7.1 * |
*This confidential information has been omitted and filed separately with the Commission.
B-B111-M97-0632C
Attachment A to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B22 Engines
*This confidential information has been
omitted and filed separately with the
Commission.
B-B111-M97-0632C
Attachment A to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B22 Engines
*This confidential information has been
omitted and filed separately with the
Commission.
B-B111-M97-0632C
Attachment A to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B22 Engines
2.7.2 *This confidential information has been omitted and filed
separately with the Commission.
|
B-B111-M97-0632C
Attachment A to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B22 Engines
2.7.3 *This confidential information has been omitted and filed
separately with the Commission.
|
B-B111-M97-0632C
Attachment A to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B22 Engines
2.7.4 *This confidential information has been omitted and filed
separately with the Commission.
|
B-B111-M97-0632C
Attachment A to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B22 Engines
2.7.5 *This confidential information has been omitted and filed
separately with the Commission.
|
B-B111-M97-0632C
Attachment A to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B22 Engines
2.7.6 *This confidential information has been omitted and filed
separately with the Commission.
2.7.7 *This confidential information has been omitted and filed
separately with the Commission.
|
B-B111-M97-0632C
Attachment A to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B22 Engines
2.7.8 *This confidential information has been omitted and filed
separately with the Commission.
|
B-B111-M97-0632C
Attachment A to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B22 Engines
2.7.9 *This confidential information has been omitted and filed
separately with the Commission.
|
B-B111-M97-0632C
Attachment A to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B22 Engines
3 * 4 * 4.1 * 4.2 * 4.2.1 * 4.2.2 * |
*This confidential information has been omitted and filed separately with the Commission.
B-B111-M97-0632C
Attachment A to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B22 Engines
4.2.3 *This confidential information has been omitted and filed
separately with the Commission.
|
B-B111-M97-0632C
Attachment A to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B22 Engines
4.3 *This confidential information has been omitted and filed
separately with the Commission.
|
B-B111-M97-0632C
Attachment A to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B22 Engines
4.4 *This confidential information has been omitted and filed
separately with the Commission.
4.5 *This confidential information has been omitted and filed
separately with the Commission.
|
B-B111-M97-0632C
Attachment A to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B22 Engines
5 * 6 * 6.1 * 6.2 * |
*This confidential information has been omitted and filed separately with the Commission.
B-B111-M97-0632C
Attachment A to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B22 Engines
7 * 7.1 * 7.2 * 7.3 * 7.4 * |
*This confidential information has been omitted and filed separately with the Commission.
B-B111-M97-0632C
Attachment A to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B22 Engines
7.5 * 7.6 * 7.7 * 7.8 * |
*This confidential information has been omitted and filed separately with the Commission.
B-B111-M97-0632C
Attachment A to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B22 Engines
7.9 * 7.10 * 7.11 * |
*This confidential information has been omitted and filed separately with the Commission.
B-B111-M97-0632C
Attachment A to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B22 Engines
7.12 * 8 * 8.1 * 8.2 * 8.3 * 8.4 * 8.5 * |
*This confidential information has been omitted and filed separately with the Commission.
B-B111-M97-0632C
Attachment A to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B22 Engines
8.6 * 8.7 * 8.7.1 * 8.7.2 * 8.7.3 * 8.7.4 * |
*This confidential information has been omitted and filed separately with the Commission.
B-B111-M97-0632C
Attachment A to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B22 Engines
8.7.5 * 8.8 * 8.9 * |
*This confidential information has been omitted and filed separately with the Commission.
B-B111-M97-0632C
Attachment A to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B22 Engines
8.10 * 8.11 * 9 * |
*This confidential information has been omitted and filed separately with the Commission.
B-B111-M97-0632C
Attachment B to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B24 Engines
MODEL 737-632 PERFORMANCE GUARANTEES
SECTION CONTENTS
1 *
2 *
3 *
4 *
5 *
6 *
7 *
8 *
9 *
|
*This confidential information has been omitted and filed separately with the Commission.
B-B111-M97-0633C
Attachment B to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B24 Engines
1 * 2 * 2.1 * 2.2 * 2.3 * |
*This confidential information has been omitted and filed separately with the Commission.
B-B111-M97-0633C
Attachment B to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B24 Engines
2.4 * 2.5 * |
*This confidential information has been omitted and filed separately with the Commission.
B-B111-M97-0633C
Attachment B to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B24 Engines
2.6 * 2.6.1 * 2.6.2 * 2.6.3 * |
*This confidential information has been omitted and filed separately with the Commission.
B-B111-M97-0633C
Attachment B to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B24 Engines
2.7 * 2.7.1 * |
*This confidential information has been omitted and filed separately with the Commission.
B-B111-M97-0633C
Attachment B to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B24 Engines
*This confidential information has been
omitted and filed separately with the
Commission.
B-B111-M97-0633C
Attachment B to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B24 Engines
*This confidential information has been
omitted and filed separately with the
Commission.
B-B111-M97-0633C
Attachment B to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B24 Engines
2.7.2 *This confidential information has been omitted and filed
separately with the Commission.
|
B-B111-M97-0633C
Attachment B to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B24 Engines
2.7.3 *This confidential information has been omitted and filed
separately with the Commission.
|
B-B111-M97-0633C
Attachment B to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B24 Engines
2.7.4 *This confidential information has been omitted and filed
separately with the Commission.
|
B-B111-M97-0633C
Attachment B to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B24 Engines
2.7.5 *This confidential information has been omitted and filed
separately with the Commission.
|
B-B111-M97-0633C
Attachment B to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B24 Engines
2.7.6 *This confidential information has been omitted and filed
separately with the Commission.
2.7.7 *This confidential information has been omitted and filed
separately with the Commission.
|
B-B111-M97-0633C
Attachment B to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B24 Engines
2.7.8 *This confidential information has been omitted and filed
separately with the Commission.
|
B-B111-M97-0633C
Attachment B to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B24 Engines
2.7.9 *This confidential information has been omitted and filed
separately with the Commission.
|
B-B111-M97-0633C
Attachment B to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B24 Engines
3 * 4 * 4.1 * 4.2 * 4.2.1 * 4.2.2 * |
*This confidential information has been omitted and filed separately with the Commission.
B-B111-M97-0633C
Attachment B to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B24 Engines
4.2.3 *This confidential information has been omitted and filed
separately with the Commission.
|
B-B111-M97-0633C
Attachment B to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B24 Engines
4.3 *This confidential information has been omitted and filed
separately with the Commission.
|
B-B111-M97-0633C
Attachment B to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B24 Engines
4.4 *This confidential information has been omitted and filed
separately with the Commission.
4.5 *This confidential information has been omitted and filed
separately with the Commission.
|
B-B111-M97-0633C
Attachment B to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B24 Engines
5 * 6 * 6.1 * 6.2 * |
*This confidential information has been omitted and filed separately with the Commission.
B-B111-M97-0633C
Attachment B to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B24 Engines
7 * 7.1 * 7.2 * 7.3 * 7.4 * |
*This confidential information has been omitted and filed separately with the Commission.
B-B111-M97-0633C
Attachment B to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B24 Engines
7.5 * 7.6 * 7.7 * 7.8 * |
*This confidential information has been omitted and filed separately with the Commission.
B-B111-M97-0633C
Attachment B to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B24 Engines
7.9 * 7.10 * 7.11 * |
*This confidential information has been omitted and filed separately with the Commission.
B-B111-M97-0633C
Attachment B to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B24 Engines
7.12 * 8 * 8.1 * 8.2 * 8.3 * 8.4 * 8.5 * |
*This confidential information has been omitted and filed separately with the Commission.
B-B111-M97-0633C
Attachment B to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B24 Engines
8.6 * 8.7 * 8.7.1 * 8.7.2 * 8.7.3 * 8.7.4 * |
*This confidential information has been omitted and filed separately with the Commission.
B-B111-M97-0633C
Attachment B to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B24 Engines
8.7.5 * 8.8 * 8.9 * |
*This confidential information has been omitted and filed separately with the Commission.
B-B111-M97-0633C
Attachment B to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B24 Engines
8.10 * 8.11 * 9 * |
*This confidential information has been omitted and filed separately with the Commission.
B-B111-M97-0633C
Attachment C to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B26 Engines
MODEL 737-832 PERFORMANCE GUARANTEES
SECTION CONTENTS
1 *
2 *
3 *
4 *
5 *
6 *
7 *
8 *
9 *
|
*This confidential information has been omitted and filed separately with the Commission.
B-B111-M97-0634D
Attachment C to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B26 Engines
1 * 2 * 2.1 * 2.2 * 2.3 * |
*This confidential information has been omitted and filed separately with the Commission.
B-B111-M97-0634D
Attachment C to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B26 Engines
2.4 * 2.5 * |
*This confidential information has been omitted and filed separately with the Commission.
B-B111-M97-0634D
Attachment C to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B26 Engines
2.6 * 2.6.1 * 2.6.2 * 2.6.3 * |
*This confidential information has been omitted and filed separately with the Commission.
B-B111-M97-0634D
Attachment C to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B26 Engines
2.7 * 2.7.1 * |
*This confidential information has been omitted and filed separately with the Commission.
B-B111-M97-0634D
Attachment C to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B26 Engines
*This confidential information has been
omitted and filed separately with the
Commission.
B-B111-M97-0634D
Attachment C to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B26 Engines
*This confidential information has been
omitted and filed separately with the
Commission.
B-B111-M97-0634D
Attachment C to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B26 Engines
2.7.2 *This confidential information has been omitted and filed
separately with the Commission.
|
B-B111-M97-0634D
Attachment C to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B26 Engines
2.7.3 *This confidential information has been omitted and filed
separately with the Commission.
|
B-B111-M97-0634D
Attachment C to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B26 Engines
2.7.4 *This confidential information has been omitted and filed
separately with the Commission.
|
B-B111-M97-0634D
Attachment C to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B26 Engines
2.7.5 *This confidential information has been omitted and filed
separately with the Commission.
|
B-B111-M97-0634D
Attachment C to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B26 Engines
2.7.6 *This confidential information has been omitted and filed
separately with the Commission.
|
B-B111-M97-0634D
Attachment C to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B26 Engines
2.7.7 *This confidential information has been omitted and filed
separately with the Commission.
|
B-B111-M97-0634D
Attachment C to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B26 Engines
2.7.8 *This confidential information has been omitted and filed
separately with the Commission.
|
B-B111-M97-0634D
Attachment C to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B26 Engines
2.7.9 * 2.7.10 * |
*This confidential information has been omitted and filed separately with the Commission.
B-B111-M97-0634D
Attachment C to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B26 Engines
2.7.11 *This confidential information has been omitted and filed
separately with the Commission.
|
B-B111-M97-0634D
Attachment C to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B26 Engines
2.7.12 *This confidential information has been omitted and filed
separately with the Commission.
|
B-B111-M97-0634D
Attachment C to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B26 Engines
3 * 4 * 4.1 * 4.2 * 4.2.1 * 4.2.2 * |
*This confidential information has been omitted and filed separately with the Commission.
B-B111-M97-0634D
Attachment C to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B26 Engines
4.2.3 *This confidential information has been omitted and filed
separately with the Commission.
|
B-B111-M97-0634D
Attachment C to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B26 Engines
4.3 *This confidential information has been omitted and filed
separately with the Commission.
|
B-B111-M97-0634D
Attachment C to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B26 Engines
4.4 *This confidential information has been omitted and filed
separately with the Commission.
4.5 *This confidential information has been omitted and filed
separately with the Commission.
|
B-B111-M97-0634D
Attachment C to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B26 Engines
5 * 6 * 6.1 * 6.2 * |
*This confidential information has been omitted and filed separately with the Commission.
B-B111-M97-0634D
Attachment C to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B26 Engines
7 * 7.1 * 7.2 * 7.3 * 7.4 * |
*This confidential information has been omitted and filed separately with the Commission.
B-B111-M97-0634D
Attachment C to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B26 Engines
7.5 * 7.6 * 7.7 * 7.8 * |
*This confidential information has been omitted and filed separately with the Commission.
B-B111-M97-0634D
Attachment C to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B26 Engines
7.9 * 7.10 * 7.11 * |
*This confidential information has been omitted and filed separately with the Commission.
B-B111-M97-0634D
Attachment C to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B26 Engines
7.12 * 8 * 8.1 * 8.2 * 8.3 * 8.4 * 8.5 * |
*This confidential information has been omitted and filed separately with the Commission.
B-B111-M97-0634D
Attachment C to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B26 Engines
8.6 * 8.7 * 8.7.1 * 8.7.2 * 8.7.3 * 8.7.4 * |
*This confidential information has been omitted and filed separately with the Commission.
B-B111-M97-0634D
Attachment C to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B26 Engines
8.7.5 * 8.8 * 8.9 * |
*This confidential information has been omitted and filed separately with the Commission.
B-B111-M97-0634D
Attachment C to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B26 Engines
8.10 * 8.11 * 9 * |
*This confidential information has been omitted and filed separately with the Commission.
B-B111-M97-0634D
[BOEING LETTERHEAD]
6-1162-RLL-2240
Delta Air Lines, Inc.
Hartsfield Atlanta International Airport
Atlanta, Georgia 30320
Subject: *This confidential information has been omitted and filed
separately with the Commission.
Reference: Purchase Agreement No. 2022 (the Purchase Agreement) between The
Boeing Company (Boeing) and Delta Air Lines, Inc. (Customer)
relating to Model 737-632/-732/-832 aircraft (the Aircraft)
|
This Letter Agreement amends and supplements the Purchase Agreement. All terms used but not defined in this Letter Agreement have the same meaning as in AGTA and the Purchase Agreement.
*This confidential information has been omitted and filed separately with the Commission.
Very truly yours,
THE BOEING COMPANY
By /s/ R. B. Woodard
-------------------------------------------------
Its President
-------------------------------------------------
ACCEPTED AND AGREED TO:
Date: October 21 , 1997
--------------------------------
|
DELTA AIR LINES, INC.
By /s/ Leo F. .Mullin
-------------------------------------------------
Its President and Chief Executive Officer
-------------------------------------------------
Attachment
|
*This confidential information has been omitted and filed separately with the Commission.
*
TABLE OF CONTENTS
Page
Number
------
Article 1. * 1-1
Article 2. * 2-1
Article 3. * 3-1
Article 4. * 4-1
Article 5. * 5-1
Article 6. * 6-1
Article 7. * 7-1
Article 8. * 8-1
Article 9. * 9-1
Article 10. * 10-1
Article 11. * 11-1
Article 12. * 12-1
Article 13. * 13-1
Article 14. * 14-1
Article 15. * 16-1
Article A * A-1
Article B * B-1
Article C * C-1
Article D * D-1
|
*This confidential information has been omitted and filed separately with the Commission.
*
*This confidential information has been omitted and filed separately with the Commission.
*
Article 1. *This confidential information has been omitted and filed separately with the Commission.
1-1
*
Article 2. *This confidential information has been omitted and filed separately with the Commission.
2-1
*
Article 3. *This confidential information has been omitted and filed separately with the Commission.
3-1
*
Article 4. *This confidential information has been omitted and filed separately with the Commission.
4-1
*
Article 5. *This confidential information has been omitted and filed separately with the Commission.
5-1
*
*This confidential information has been omitted and filed separately with the Commission.
5-2
*
*This confidential information has been omitted and filed separately with the Commission.
5-3
*
*This confidential information has been omitted and filed separately with the Commission.
5-4
*
Article 6. *This confidential information has been omitted and filed separately with the Commission.
6-1
*
Article 7. *This confidential information has been omitted and filed separately with the Commission.
7-1
*
*This confidential information has been omitted and filed separately with the Commission.
7-2
*
Article 8. *This confidential information has been omitted and filed separately with the Commission.
8-1
*
Article 9. *This confidential information has been omitted and filed separately with the Commission.
9-1
*
Article 10. *This confidential information has been omitted and filed separately with the Commission.
10-1
*
Article 11. *This confidential information has been omitted and filed separately with the Commission.
11-1
*
Article 12. *This confidential information has been omitted and filed separately with the Commission.
12-1
*
Article 13. *This confidential information has been omitted and filed separately with the Commission.
13-1
*
Article 14. *This confidential information has been omitted and filed separately with the Commission.
14-1
*
Article 15. *This confidential information has been omitted and filed separately with the Commission.
15-1
*
Exhibit A to
*
*This confidential information has been omitted and filed separately with the Commission.
*
Exhibit A to
*
*This confidential information has been omitted and filed separately with the Commission.
*
Exhibit B to
*
*This confidential information has been omitted and filed separately with the Commission.
*
Attachment 1 to
Exhibit B to
*
*This confidential information has been omitted and filed separately with the Commission.
B-1-1
*
Attachment 2 to
Exhibit B to
*
*This confidential information has been omitted and filed separately with the Commission.
B-2-1
*
Attachment 2 to
Exhibit B to
*
*This confidential information has been omitted and filed separately with the Commission.
B-2-2
*
Exhibit C to
*
*This confidential information has been omitted and filed separately with the Commission.
*
Exhibit D to
*
*This confidential information has been omitted and filed separately with the Commission.
*
Exhibit D to
*
*This confidential information has been omitted and filed separately with the Commission.
*
Exhibit D to
*
*This confidential information has been omitted and filed separately with the Commission.
*
[BOEING LETTERHEAD]
6-1162-RLL-2400
Delta Air Lines, Inc.
Hartsfield Atlanta International Airport
Atlanta, Georgia 30320
Subject: Open Configuration Matters for the 737-632 and 737-732 Aircraft
Reference: Purchase Agreement No. 2022 (the Purchase Agreement) between The Boeing
Company (Boeing) and Delta Air Lines, Inc. relating to Model 737-632/-732
aircraft (the Aircraft)
|
This Letter Agreement amends the Purchase Agreement. All terms used but not defined in this Letter Agreement have the same meaning as in the AGTA and the Purchase Agreement.
1. Configuration Discussions
1.1 Configuration Schedule. In accordance with Article 4.2.2 of the AGTA Customer will advise Boeing 15 months prior to delivery of the first undefined, uncertified 737-632/-732 Aircraft. Following the 15 month notification by Customer, Boeing and Customer agree to establish a mutually agreeable schedule that will result in the completion of the final configuration of either a 737-632 or 737-732 on the fifteenth Business Day of the twelfth month prior to delivery of either a 737-632 or 737-732. In the discussions to establish the schedule, Customer and Boeing will develop a plan for identification, definition and selection by Customer of the Optional Features to be incorporated in Customer's Aircraft.
1.2 Customer's Detail Specification.
The 737-632 and 737-732 Aircraft descriptions are as follows:
737-632 - Basic MTOW and thrust - Boeing 737-632 Configuration Specification D6-38808 revision F dated March 8, 1996, plus installation of CFM56-7B* engines with a MTOW of * pounds and thrust of * pounds.
737-632 - Maximum MTOW and thrust - Boeing 737-632 Configuration Specification D6-38808 revision F dated March 8, 1996, plus installation of CFM56-7B* engines with a MTOW of * pounds and thrust of * pounds.
737-732 - Basic MTOW and thrust - Boeing 737-732 Configuration Specification D6-38808 revision F dated March 8, 1996, plus installation of CFM56-7B* engines with a MTOW of * pounds and thrust of * pounds.
*This confidential information has been omitted and filed separately with the Commission.
P.A. No. 2022
Delta Air Lines, Inc.
6-1162-RLL-2400 Page 2
737-732 - Maximum MTOW and thrust - Boeing 737-732 Configuration Specification D6-38808 revision F dated March 8, 1996, plus installation of CFM56-7B* engines with a MTOW of * pounds and thrust of * pounds.
After Customer's selection of the Optional Features, Boeing will provide to Customer a Customer-unique configuration specification (Detail Specification). The Detail Specification will be comprised of the most recent version of the 737-600/-700 Configuration Specification developed by Boeing and the Optional Features agreed to be incorporated in the Aircraft by Boeing and Customer.
2. Price
The Aircraft Basic Price for the 737-632 and 737-732 with the basic MTOW and thrust is:
Model 737-632 737-732 Airframe Price * * Estimated Optional Features Price * * Aircraft Basic Price * * BFE Estimate * * |
The Aircraft Basic Price for the 737-632 and 737-732 with the maximum MTOW and thrust is:
Model 737-632 737-732 Airframe Price * * Estimated Optional Features * * Price MTOW Portion of * * Optional Features Price Thrust Portion of * * Optional Features Price Aircraft Basic Price * * BFE Estimate * * |
*This confidential information has been omitted and filed separately with the Commission.
P.A. No. 2022
Delta Air Lines, Inc.
6-1162-RLL-2400 Page 3
3. Effect on Purchase Agreement.
3.1 Exhibit A. Upon completion of the configuration discussions referred to in Article 1.1 above, Boeing will provide to Customer an Exhibit A-1 for the 737-632 and an Exhibit A-2 for the 737-732 defining the configuration of the 737-632 and 737-732 Aircraft.
3.2 Tables . Tables 1, 2 and 3 to the Purchase Agreement will be provided to Customer reflecting acceptance of the Change Requests for the 737-632 and 737-732 Aircraft. Specifically, the Aircraft Basic Price and the Advance Payment Base Price of the Aircraft and the component parts of the Aircraft Basic Price and the Advance Payment Base Price will be included in such new Tables.
3.3 Performance Guarantees. The aircraft performance guarantees in Letter Agreement No. 6-1162-RLL-2233 are based on an estimate of the effect of Optional Features. Customer acknowledges that such performance guarantees will be revised by Boeing to incorporate the effect of Customer's final selection of Optional Features.
4. Purchase Agreement Amendment.
Within 30 days after reaching agreement as to the final Aircraft Configuration, Boeing will provide Customer an amendment to the Purchase Agreement reflecting the effects of the configuration changes agreed to by the parties.
Very truly yours,
THE BOEING COMPANY
By /s/ R. B. Woodard
-----------------------------------------
Its President
----------------------------------------
ACCEPTED AND AGREED TO:
Date: October 21 , 1997
-------------------------------
|
DELTA AIR LINES, INC.
By /s/ Leo F. Mullin ----------------------------------------- Its President and Chief Executive Officer ---------------------------------------- |
P.A. No. 2022
[BOEING LETTERHEAD]
6-1162-RLL-2289
Delta Air Lines, Inc.
Hartsfield Atlanta International Airport
Atlanta, Georgia 30320
Subject: *This confidential information has been omitted and filed separately with the
Commission.
Reference: Purchase Agreement Nos. 2024 and 2025 (the Purchase Agreement) between The
Boeing Company (Boeing) and Delta Air Lines, Inc. (Customer) relating to
Model 767-332ER/-332 and 767-432ER aircraft (the Aircraft).
|
This Letter Agreement amends and supplements the Purchase Agreements. All terms used but not defined in this Letter Agreement have the same meaning as in the AGTA and the Purchase Agreements.
*This confidential information has been omitted and filed separately with the Commission.
Very truly yours,
THE BOEING COMPANY
By /s/ R. B. Woodard
--------------------------------------------
Its President
-------------------------------------------
ACCEPTED AND AGREED TO:
Date: October 21 , 1997
----------------------------------
|
DELTA AIR LINES, INC.
By /s/ Leo F. Mullin -------------------------------------------- Its President and Chief Executive Officer ------------------------------------------- |
Attachment
P.A. Nos. 2024 and 2025
*This confidential information has been omitted and filed separately with the Commission.
*
TABLE OF CONTENTS
Page
Number
------
Article 1. * 1-1
Article 2. * 2-1
Article 3. * 3-1
Article 4. * 4-1
Article 5. * 5-1
Article 6. * 6-1
Article 7. * 7-1
Article 8. * 8-1
Article 9. * 9-1
Article 10. * 10-1
Article 11. * 11-1
Article 12. * 12-1
Article 13. * 13-1
Article 14. * 14-1
Article 15. * 16-1
Article A * A-1
Article B * B-1
Article C * C-1
Article D * D-1
|
*This confidential information has been omitted and filed separately with the Commission.
*
*This confidential information has been omitted and filed separately with the Commission.
*
Article 1. *This confidential information has been omitted and filed separately with the Commission.
1-1
*
Article 2. *This confidential information has been omitted and filed separately with the Commission.
2-1
*
Article 3. *This confidential information has been omitted and filed separately with the Commission.
3-1
*
Article 4. *This confidential information has been omitted and filed separately with the Commission.
4-1
*
Article 5. *This confidential information has been omitted and filed separately with the Commission.
5-1
*
*This confidential information has been omitted and filed separately with the Commission.
5-2
*
*This confidential information has been omitted and filed separately with the Commission.
5-3
*
*This confidential information has been omitted and filed separately with the Commission.
5-4
*
Article 6. *This confidential information has been omitted and filed separately with the Commission.
6-1
*
Article 7. *This confidential information has been omitted and filed separately with the Commission.
7-1
*
*This confidential information has been omitted and filed separately with the Commission.
7-2
*
Article 8. *This confidential information has been omitted and filed separately with the Commission.
8-1
*
Article 9. *This confidential information has been omitted and filed separately with the Commission.
9-1
*
Article 10. *This confidential information has been omitted and filed separately with the Commission.
10-1
*
Article 11. *This confidential information has been omitted and filed separately with the Commission.
11-1
*
Article 12. *This confidential information has been omitted and filed separately with the Commission.
12-1
*
Article 13. *This confidential information has been omitted and filed separately with the Commission.
13-1
*
Article 14. *This confidential information has been omitted and filed separately with the Commission.
14-1
*
Article 15. *This confidential information has been omitted and filed separately with the Commission.
15-1
*
Exhibit A to
*
*This confidential information has been omitted and filed separately with the Commission.
*
Exhibit A to
*
*This confidential information has been omitted and filed separately with the Commission.
*
Exhibit B to
*
*This confidential information has been omitted and filed separately with the Commission.
*
Attachment 1 to
Exhibit B to
*
*This confidential information has been omitted and filed separately with the Commission.
B-1-1
*
Attachment 2 to
Exhibit B to
*
*This confidential information has been omitted and filed separately with the Commission.
B-2-1
*
Attachment 2 to
Exhibit B to
*
*This confidential information has been omitted and filed separately with the Commission.
B-2-2
*
Exhibit C to
*
*This confidential information has been omitted and filed separately with the Commission.
*
Exhibit D to
*
*This confidential information has been omitted and filed separately with the Commission.
*
Exhibit D to
*
*This confidential information has been omitted and filed separately with the Commission.
*
Exhibit D to
*
*This confidential information has been omitted and filed separately with the Commission.
*
[BOEING LETTERHEAD]
6-1162-RLL-2292
Delta Air Lines, Inc.
Hartsfield Atlanta International Airport
Atlanta, Georgia 30320
Subject: *This confidential information has been omitted and filed separately with the Commission.
Reference: Purchase Agreement No. 2025 (the Purchase Agreement) between
The Boeing Company (Boeing) and Delta Air Lines, Inc.
(Customer) relating to Model 767-432 aircraft (the Aircraft)
|
This Letter Agreement amends and supplements the Purchase Agreement. All terms used but not defined in this Letter Agreement have the same meaning as in the AGTA and the Purchase Agreement.
1. *This confidential information has been omitted and filed separately with the Commission.
P.A. No. 2025
Delta Air Lines, Inc.
6-1162-RLL-2292 Page 2
*This confidential information has been omitted and filed separately with the Commission.
Very truly yours,
THE BOEING COMPANY
By /s/ R. B. Woodard
--------------------------------------------
Its President
-----------------------------------------
ACCEPTED AND AGREED TO:
Date: October 21 , 1997
------------------
|
DELTA AIR LINES, INC.
By /s/ Leo F. Mullin
--------------------------------------------
Its President and Chief Executive Officer
---------------------------------------
|
Attachment
P.A. No. 2025
*This confidential information has been omitted and filed separately with the Commission.
*
TABLE OF CONTENTS
Page
Number
------
Article 1. * 1-1
Article 2. * 2-1
Article 3. * 3-1
Article 4. * 4-1
Article 5. * 5-1
Article 6. * 6-1
Article 7. * 7-1
Article 8. * 8-1
Article 9. * 9-1
Article 10. * 10-1
Article 11. * 11-1
Article 12. * 12-1
Article 13. * 13-1
Article 14. * 14-1
Article 15. * 16-1
Article A * A-1
Article B * B-1
Article C * C-1
Article D * D-1
|
*This confidential information has been omitted and filed separately with the Commission.
*
*This confidential information has been omitted and filed separately with the Commission.
*
Article 1. *This confidential information has been omitted and filed separately with the Commission.
1-1
*
Article 2. *This confidential information has been omitted and filed separately with the Commission.
2-1
*
Article 3. *This confidential information has been omitted and filed separately with the Commission.
3-1
*
Article 4. *This confidential information has been omitted and filed separately with the Commission.
4-1
*
Article 5. *This confidential information has been omitted and filed separately with the Commission.
5-1
*
Article 6. *This confidential information has been omitted and filed separately with the Commission.
6-1
*
Article 7. *This confidential information has been omitted and filed separately with the Commission.
7-1
*
Article 8. *This confidential information has been omitted and filed separately with the Commission.
8-1
*
Article 9. *This confidential information has been omitted and filed separately with the Commission.
9-1
*
Article 10. *This confidential information has been omitted and filed separately with the Commission.
10-1
*
Article 11. *This confidential information has been omitted and filed separately with the Commission.
11-1
*
Article 12. *This confidential information has been omitted and filed separately with the Commission.
12-1
*
Article 13. *This confidential information has been omitted and filed separately with the Commission.
13-1
*
Article 14. *This confidential information has been omitted and filed separately with the Commission.
14-1
*
Article 15. *This confidential information has been omitted and filed separately with the Commission.
15-1
*
Exhibit A to
*
*This confidential information has been omitted and filed separately with the Commission.
*
Exhibit A to
*
*This confidential information has been omitted and filed separately with the Commission.
*
Exhibit B to
*
*This confidential information has been omitted and filed separately with the Commission.
*
Attachment 1 to
Exhibit B to
*
*This confidential information has been omitted and filed separately with the Commission.
B-1-1
*
Attachment 2 to
Exhibit B to
*
*This confidential information has been omitted and filed separately with the Commission.
B-2-1
*
Attachment 2 to
Exhibit B to
*
*This confidential information has been omitted and filed separately with the Commission.
B-2-2
*
Exhibit C to
*
*This confidential information has been omitted and filed separately with the Commission.
*
Exhibit D to
*
*This confidential information has been omitted and filed separately with the Commission.
*
Exhibit D to
*
*This confidential information has been omitted and filed separately with the Commission.
*
Exhibit D to
*
*This confidential information has been omitted and filed separately with the Commission.
*
[BOEING LETTERHEAD]
6-1162-RLL-2275
Delta Air Lines, Inc.
Hartsfield Atlanta International Airport
Atlanta, Georgia 30320
Subject: Multiple Aircraft Operating Weights
Reference: Purchase Agreement No. 2025 (the Purchase Agreement) between
The Boeing Company (Boeing) and Delta Air Lines, Inc.
(Customer) relating to Model 767-432ER aircraft (the Aircraft)
|
This Letter Agreement amends and supplements the Purchase Agreement. All terms used but not defined in this Letter Agreement have the same meaning as in the AGTA and the Purchase Agreement.
In this Letter Agreement, the term "Aircraft" means the Model 767-432ER aircraft purchased by Customer under the Purchase Agreement.
*This confidential information has been omitted and filed separately with the Commission.
P.A. No. 2025
Delta Air Lines, Inc.
6-1162-RLL-2275 Page 2
*This confidential information
has been omitted and filed
separately with the Commission.
P.A. No. 2025
|
Delta Air Lines, Inc.
6-1162-RLL-2275 Page 3
*This confidential information
has been omitted and filed
separately with the Commission.
|
It is understood that a minimum of 60 days will be required for Boeing to make the change to the FAA approved Airplane Flight Manual elected by Customer. If the Customer requires the Airplane Flight Manual to be prepared in a different format required by the cognizant aviation authority of the proposed third party purchaser or lessee, prior coordination with Boeing will be required to determine price and offerability.
Very truly yours,
THE BOEING COMPANY
By /s/ R. B. Woodard
----------------------------------------
Its President
--------------------------------------
ACCEPTED AND AGREED TO:
Date: October 21 , 1997
-------------------------------
|
DELTA AIR LINES, INC.
By /s/ Leo F. Mullin
----------------------------------------
Its President and Chief Executive Officer
--------------------------------------
|
Attachment
P.A. No. 2025
Attachment to
Delta Air Lines, Inc.
6-1162-RLL-2275 Page 1
*This confidential information has been omitted and filed separately with the Commission.
P.A. No. 2025
Attachment to
Delta Air Lines, Inc.
6-1162-RLL-2275 Page 2
*This confidential information has been omitted and filed separately with the Commission.
P.A. No. 2025
Attachment to
Delta Air Lines, Inc.
6-1162-RLL-2275 Page 3
*This confidential information has been omitted and filed separately with the Commission.
P.A. No. 2025
[BOEING LETTERHEAD]
6-1162-RLL-2281
Delta Air Lines, Inc.
Hartsfield Atlanta International Airport
Atlanta, Georgia 30320
Subject: Aircraft Performance Guarantees
Reference: Purchase Agreement No. 2025 (the Purchase Agreement) between
The Boeing Company (Boeing) and Delta Air Lines, Inc.
(Customer) relating to Model 767-432ER aircraft (the Aircraft)
|
This Letter Agreement amends and supplements the Purchase Agreement. All terms used but not defined in this Letter Agreement have the same meaning as in the AGTA and the Purchase Agreement.
Boeing agrees to provide Customer with the Performance Guarantees in the Attachment to this Letter Agreement. These guarantees are exclusive and expire upon Delivery of the Aircraft to Customer. Customer's remedies survive delivery of the Aircraft.
The Performance Guarantees in the Purchase Agreement do not include any effect of the boltless turbine.
Very truly yours,
THE BOEING COMPANY
By /s/ R. B. Woodard
------------------------------------------
Its President
------------------------------------------
ACCEPTED AND AGREED TO:
Date: October 21 , 1997
-------------------------------
|
DELTA AIR LINES, INC.
By /s/ Leo. F. Mullin ------------------------------------------ Its President and Chief Executive Officer ------------------------------------------ |
Attachment
P.A. No. 2025
Attachment to Letter Agreement
No. 6-1162-RLL-2281
CF6-80C2B7F Engines
MODEL 767-432ER PERFORMANCE GUARANTEES
SECTION CONTENTS 1 * 2 * 3 * 4 * 5 * 6 * 7 * 8 * 9 * |
*This confidential information has been omitted and filed separately with the Commission.
B-B111-M97-0637C
Attachment to Letter Agreement
No. 6-1162-RLL-2281
CF6-80C2B7F Engines
1 * 2 * 2.1 * 2.2 * 2.3 * 2.3.1 * |
*This confidential information has been omitted and filed separately with the Commission.
B-B111-M97-0637C
Attachment to Letter Agreement
No. 6-1162-RLL-2281
CF6-80C2B7F Engines
2.3.2 *This confidential information has been omitted and filed
separately with the Commission.
|
B-B111-M97-0637C
Attachment to Letter Agreement
No. 6-1162-RLL-2281
CF6-80C2B7F Engines
2.3.3 *This confidential information has been omitted and filed
separately with the Commission.
|
B-B111-M97-0637C
Attachment to Letter Agreement
No. 6-1162-RLL-2281
CF6-80C2B7F Engines
2.4 * 2.5 * |
*This confidential information has been omitted and filed separately with the Commission.
B-B111-M97-0637C
Attachment to Letter Agreement
No. 6-1162-RLL-2281
CF6-80C2B7F Engines
2.6 * 2.6.1 * 2.6.2 * 2.6.3 * |
*This confidential information has been omitted and filed separately with the Commission.
B-B111-M97-0637C
Attachment to Letter Agreement
No. 6-1162-RLL-2281
CF6-80C2B7F Engines
2.7 * 2.7.1 * |
*This confidential information has been omitted and filed separately with the Commission.
B-B111-M97-0637C
Attachment to Letter Agreement
No. 6-1162-RLL-2281
CF6-80C2B7F Engines
*This confidential information has been
omitted and filed separately with the
Commission.
B-B111-M97-0637C
Attachment to Letter Agreement
No. 6-1162-RLL-2281
CF6-80C2B7F Engines
*This confidential information has been
omitted and filed separately with the
Commission.
B-B111-M97-0637C
Attachment to Letter Agreement
No. 6-1162-RLL-2281
CF6-80C2B7F Engines
2.7.2 *This confidential information has been omitted and filed
separately with the Commission.
|
B-B111-M97-0637C
Attachment to Letter Agreement
No. 6-1162-RLL-2281
CF6-80C2B7F Engines
2.7.3 *This confidential information has been omitted and filed
separately with the Commission.
|
B-B111-M97-0637C
Attachment to Letter Agreement
No. 6-1162-RLL-2281
CF6-80C2B7F Engines
2.7.4 *This confidential information has been omitted and filed
separately with the Commission.
|
B-B111-M97-0637C
Attachment to Letter Agreement
No. 6-1162-RLL-2281
CF6-80C2B7F Engines
2.7.5 *This confidential information has been omitted and filed
separately with the Commission.
|
B-B111-M97-0637C
Attachment to Letter Agreement
No. 6-1162-RLL-2281
CF6-80C2B7F Engines
2.7.6 *This confidential information has been omitted and filed
separately with the Commission.
|
B-B111-M97-0637C
Attachment to Letter Agreement
No. 6-1162-RLL-2281
CF6-80C2B7F Engines
2.7.7 *This confidential information has been omitted and filed
separately with the Commission.
|
B-B111-M97-0637C
Attachment to Letter Agreement
No. 6-1162-RLL-2281
CF6-80C2B7F Engines
2.7.8 *This confidential information has been omitted and filed
separately with the Commission.
2.7.9 *This confidential information has been omitted and filed
separately with the Commission.
|
B-B111-M97-0637C
Attachment to Letter Agreement
No. 6-1162-RLL-2281
CF6-80C2B7F Engines
2.7.10 *This confidential information has been omitted and filed
separately with the Commission.
|
B-B111-M97-0637C
Attachment to Letter Agreement
No. 6-1162-RLL-2281
CF6-80C2B7F Engines
2.7.11 *This confidential information has been omitted and filed
separately with the Commission.
|
B-B111-M97-0637C
Attachment to Letter Agreement
No. 6-1162-RLL-2281
CF6-80C2B7F Engines
3 * 4 * 4.1 * 4.2 * |
*This confidential information has been omitted and filed separately with the Commission.
B-B111-M97-0637C
Attachment to Letter Agreement
No. 6-1162-RLL-2281
CF6-80C2B7F Engines
4.3 *This confidential information has been omitted and filed
separately with the Commission.
4.4 *This confidential information has been omitted and filed
separately with the Commission.
|
B-B111-M97-0637C
Attachment to Letter Agreement
No. 6-1162-RLL-2281
CF6-80C2B7F Engines
5 *This confidential information has been omitted and filed separately with the Commission.
B-B111-M97-0637C
Attachment to Letter Agreement
No. 6-1162-RLL-2281
CF6-80C2B7F Engines
6 * 6.1 * 6.2 * 7 * 7.1 * 7.2 * |
*This confidential information has been omitted and filed separately with the Commission.
B-B111-M97-0637C
Attachment to Letter Agreement
No. 6-1162-RLL-2281
CF6-80C2B7F Engines
7.3 * 7.4 * 7.5 * 7.6 * |
*This confidential information has been omitted and filed separately with the Commission.
B-B111-M97-0637C
Attachment to Letter Agreement
No. 6-1162-RLL-2281
CF6-80C2B7F Engines
7.7 * 7.8 * 7.9 * 7.10 * 7.11 * |
*This confidential information has been omitted and filed separately with the Commission.
B-B111-M97-0637C
Attachment to Letter Agreement
No. 6-1162-RLL-2281
CF6-80C2B7F Engines
7.12 * 8 * 8.1 * 8.2 * |
*This confidential information has been omitted and filed separately with the Commission.
B-B111-M97-0637C
Attachment to Letter Agreement
No. 6-1162-RLL-2281
CF6-80C2B7F Engines
8.3 * 8.4 * 8.5 * 8.6 * 8.7 * 8.8 * |
*This confidential information has been omitted and filed separately with the Commission.
B-B111-M97-0637C
[BOEING LETTERHEAD]
6-1162-RLL-2284
Delta Air Lines, Inc.
Hartsfield Atlanta International Airport
Atlanta, Georgia 30320
Subject: Open Configuration Matters
Reference: Purchase Agreement No. 2025 (the Purchase Agreement) between The
Boeing Company (Boeing) and Delta Air Lines, Inc. (Customer)
relating to Model 767-432ER aircraft (the Aircraft)
|
This Letter Agreement amends the Purchase Agreement. All terms used but not defined in this Letter Agreement have the same meaning as in the AGTA and the Purchase Agreement.
1. Final Configuration Discussions.
1.1 Final Configuration Schedule. Boeing and Customer agree to establish a schedule that will result in the completion of configuration of the Aircraft by May 1, 1998. In the discussions to establish the schedule, Customer and Boeing will identify and define the Optional Features to be incorporated into Customer's Aircraft.
1.2 Customer's Detail Specification. After Customer's selection of the Optional Features and engine model, Boeing will provide to Customer a Customer-unique configuration specification (Detail Specification). The Detail Specification will be comprised of the most recent version of the Configuration Specification developed by Boeing for a Model 767 Aircraft and the Appendix to that Configuration Specification which further defines the -400 model 767, and the Optional Features agreed to be incorporated in the Aircraft by Boeing and Customer. A reconciliation will be provided to Customer that identifies any differences between the Configuration Specification referenced in Exhibit A of the Purchase Agreement and the Configuration Specification initially used to develop the Detail Specification.
2. Price.
*This confidential information has been omitted and filed separately with the Commission.
P.A. No. 2025
Delta Air Lines, Inc.
6-1162-RLL-2284 Page 2
*This confidential information has been omitted and filed separately with the Commission.
P.A. No. 2025
Delta Air Lines, Inc.
6-1162-RLL-2284 Page 3
*This confidential information has been omitted and filed separately with the Commission.
3. Effect on Purchase Agreement.
3.1 Exhibit A. Revisions to the 767-400 Configuration Specification developed by Boeing for a Model 767 Aircraft and the Appendix to that Configuration Specification (Revision A, dated June 6, 1997) which further defines the -400 model 767 developed by Boeing subsequent to the Execution Date will be provided to Customer in the form of an updated Configuration Specification and Appendix. The effects of all Optional Features which are mutually agreed upon between Boeing and Customer for incorporation into the Detail Specification for the Aircraft will be incorporated into Exhibit A of the Purchase Agreement by written amendment.
3.2 Tables. Tables 1, 2 and 3 to the Purchase Agreement will be revised to reflect revisions made to Exhibit A to the Purchase Agreement . Specifically, the Aircraft Basic Price and the Advance Payment Base Price of the Aircraft and the component parts of the Aircraft Basic Price and the Advance Payment Base Price will be included in such new Tables 1, 2 and 3.
3.3 Performance Guarantees. The aircraft performance guarantees in Letter Agreement No. 6-1162-RLL-2281 are based on an estimate of the effect of optional features. Customer acknowledges that such performance guarantees will be revised by Boeing to incorporate the effect of Customer's final selection of optional features.
4. Purchase Agreement Amendment.
Within 30 days after reaching agreement as to the final Aircraft Configuration, Boeing and Customer will amend the Purchase Agreement to reflect the effects of the configuration changes agreed to by the parties.
P.A. No. 2025
Delta Air Lines, Inc.
6-1162-RLL-2284 Page 4
Very truly yours,
THE BOEING COMPANY
By /s/ R. B. Woodard
--------------------------------------------------
Its President
--------------------------------------------------
ACCEPTED AND AGREED TO:
Date: October 21 , 1997
-------------------------------
|
DELTA AIR LINES, INC.
By /s/ Leo F. Mullin
--------------------------------------------------
Its President and Chief Executive Officer
--------------------------------------------------
|
P.A. No. 2025
[BOEING LETTERHEAD]
6-1162-RLL-2290
Delta Air Lines, Inc.
Hartsfield Atlanta International Airport
Atlanta, Georgia 30320
Subject: *This confidential information has been omitted and filed
separately with the Commission.
Reference: Purchase Agreement No. 2025 (the Purchase Agreement) between The
Boeing Company (Boeing) and Delta Air Lines, Inc. (Customer)
relating to Model 767-432ER aircraft (the Aircraft)
|
This Letter Agreement amends and supplements the Purchase Agreement. All terms used but not defined in this Letter Agreement have the same meaning as in the AGTA and the Purchase Agreement.
*This confidential information has been omitted and filed separately with the Commission.
P.A. No. 2025
Delta Air Lines, Inc.
6-1162-RLL-2290 Page 2
*This confidential information has been omitted and filed separately with the Commission.
P.A. No. 2025
Delta Air Lines, Inc.
6-1162-RLL-2290 Page 3
Very truly yours,
THE BOEING COMPANY
By /s/ R. B. Woodard
------------------------------------------------
Its President
------------------------------------------------
ACCEPTED AND AGREED TO:
Date: October 21 , 1997
-----------------------------------
|
DELTA AIR LINES, INC.
By /s/ Leo F. Mullin
------------------------------------------------
Its President and Chief Executive Officer
------------------------------------------------
|
Attachment
P.A. No. 2025
[BOEING LETTERHEAD]
September 15, 1997
VIA FAX: (404) 715-5494
Captain H.G. Alger
Executive Vice President Operations
Delta Air Lines, Inc.
Hartsfield Atlanta International Airport
Atlanta, Georgia 30320
Dear Harry:
*This confidential information has been omitted and filed separately with the Commission.
*This confidential information has been omitted and filed separately with the Commission.
Sincerely,
/s/ John B. Hayhurst |
Attachment A
*This confidential
information has been
omitted and filed
separately with the
Commission.
Rev-C 1
Attachment A
*This confidential
information has been
omitted and filed
separately with the
Commission.
Rev-C 2
Attachment B
*This confidential
information has been
omitted and filed
separately with the
Commission.
Rev.-B 1
Attachment B
*This confidential
information has been
omitted and filed
separately with the
Commission.
Rev.- B 2
*This confidential information has been omitted and filed separately with the Commission.
[BOEING LETTERHEAD]
6-1162-RLL-2287
Delta Air Lines, Inc.
Hartsfield Atlanta International Airport
Atlanta, Georgia 30320
Subject: Certification Flight Test Aircraft
Reference: Purchase Agreement No. 2025 (the Purchase Agreement) between The
Boeing Company (Boeing) and Delta Air Lines (Customer) relating to
Model 767-432ER aircraft (the Aircraft)
|
This Letter Agreement amends and supplements the Purchase Agreement. All terms used but not defined in this Letter Agreement have the same meaning as in the AGTA and the Purchase Agreement.
It is understood that three (3) of Customer's Model 767-432ER Aircraft (Test Aircraft) will be used by Boeing in its certification flight test program, for obtaining the FAA Type and Airworthiness Certificates required under Article 6 of the AGTA, prior to delivery to Customer. Boeing will not use the Test Aircraft for more than eight hundred (800) flight test hours without the prior written consent of Customer. Customer agrees to accept delivery of each of the Test Aircraft without any reduction in the Aircraft Price on account of the depreciation and wear and tear resulting from such testing, subject to the terms and conditions set forth below.
1. Aircraft Refurbishment.
Boeing shall refurbish each Test Aircraft prior to delivery to Customer to ensure such Test Aircraft complies with the Detail Specification. Reasonable wear and tear shall be permissible in all areas of the Test Aircraft except interior areas exposed to passenger view. Such interior areas shall be in a condition, at time of delivery to Customer, comparable to the same areas of other Model 767-432ER non test Aircraft delivered to Customer in the same time period as the Test Aircraft.
2. Production Record Revision and Service Bulletin Incorporation.
During the refurbishment of each Test Aircraft, Boeing will incorporate therein all applicable Production Record Revisions (PRR's) and Service Bulletins which are released by Boeing for production incorporation in other Model 767-432ER Aircraft scheduled for delivery to Customer prior to scheduled delivery of
P.A. No. 2025
Delta Air Lines, Inc.
6-1162-RLL-2287 Page 2
the Test Aircraft, except for any such PRR's and/or Service Bulletins which Boeing determines, and Customer agrees, are impracticable to retrofit on the Test Aircraft. Customer's agreement shall not be unreasonably withheld. Any reasonable delay in the delivery of any of the Test Aircraft resulting from the incorporation of such PRR's and/or Service Bulletins shall be an Excusable Delay within the meaning of Article 10 of the AGTA . Boeing will review its plans for incorporation of such PRR's and Service Bulletins with Customer prior to the refurbishment of the Test Aircraft and if the reason for not incorporating any such PRR or Service Bulletin is the unavailability of retrofit kits to Customer, Boeing will furnish such retrofit kits to Customer at no charge as soon as they can reasonably be made available and Boeing shall reimburse Customer for its direct labor to install such kits at the then current Warranty Labor Rate.
3. Warranty.
The Boeing warranty for airframe and components of each Test Aircraft shall run full term from delivery of each Test Aircraft. If any Boeing supplier, except engine manufacturer, refuses to honor any Customer valid warranty claim solely on the basis of use or time expiration relating to flight test or refurbishment, Boeing shall assume responsibility for such claim using the supplier warranty terms and conditions as though the warranty period began with delivery of the Test Aircraft.
4. Wheels, Tires and Brakes.
Boeing shall install new tires, wheels and brakes on each Test Aircraft, after such flight test and prior to delivery of each Test Aircraft.
5. Accomplishment of "C" Check.
Boeing will accomplish a Boeing-recommended "C" Check or equivalent on each Test Aircraft prior to delivery thereof.
6. List of Greases, Oils and Other Fluids.
Boeing will provide Buyer in a timely manner a list of part and/or specification numbers and suppliers of the greases, oils and other fluids used to service the Test Aircraft during the flight test program.
P.A. No. 2025
Delta Air Lines, Inc.
6-1162-RLL-2287 Page 3
*This confidential information has been omitted and filed separately with the Commission.
9. Other Terms and Conditions.
All terms and conditions relating to the manufacture, purchase and sale of the Test Aircraft as set forth in the Purchase Agreement shall remain in full force and effect except as amended by the provisions herein.
P.A. No. 2025
Delta Air Lines, Inc.
6-1162-RLL-2287 Page 4
10. Flight Test Standby Spares.
If applicable, in accordance with the provisions of Supplemental Exhibit BFE/CDSPE/SPE/CSE to the Purchase Agreement, Customer and/or Boeing shall provide BFE/CDSPE/SPE/CSE Standby Spares for Test Aircraft in the flight test program in accordance with requirements mutually agreed to by Boeing and Customer. The identification and scheduled requirement dates for such BFE/CDSPE/SPE/CSE Standby Spares will be identified by Boeing in the BFE Document referenced in Supplemental Exhibit BFE/CDSPE/SPE/CSE to the Purchase Agreement.
Upon completion of the flight test program, any BFE standby spares provisioned for flight test shall be allocated to fulfill open production requirements for Customer's Aircraft, or returned to Customer, at Customer's option.
Very truly yours,
THE BOEING COMPANY
By /s/ R. B. Woodard
--------------------------------------
Its President
--------------------------------------
ACCEPTED AND AGREED TO:
Date: October 21 , 1997
---------------------------
|
DELTA AIR LINES, INC.
By /s/ Leo F. Mullin -------------------------------------- Its President and Chief Executive Officer -------------------------------------- |
P.A. No. 2025
[BOEING LETTERHEAD]
6-1162-RLL-2420
Delta Air Lines, Inc.
Hartsfield Atlanta International Airport
Atlanta, Georgia 30320
Subject: *This confidential information has been omitted and filed separately with the Commission.
Reference: Purchase Agreement No. 2025 (the Purchase Agreement) between The Boeing Company (Boeing) and Delta Air Lines (Customer) relating to Model 767-432ER aircraft (the Aircraft)
This Letter Agreement amends and supplements the Purchase Agreement. All terms used but not defined in this Letter Agreement have the same meaning as in the AGTA and the Purchase Agreement.
1. Model 767-400ER Pilot Type Rating.
Boeing has established that the same pilot type rating for the 767-400ER and the current 767-300ER aircraft is a major program objective. Boeing is confident that the foregoing objective is attainable and Boeing will use its best reasonable efforts to achieve the objective.
*This confidential information has been omitted and filed separately with the Commission.
P.A. No. 2025
Delta Air Lines, Inc.
6-1162-RLL-2420 Page 2
Very truly yours,
THE BOEING COMPANY
By /s/ R. B. Woodard
-------------------------------------
Its President
-------------------------------------
ACCEPTED AND AGREED TO:
Date: October 21 , 1997
-----------------------------
|
DELTA AIR LINES, INC.
By /s/ Leo F. Mullin
---------------------------------------
Its President and Chief Executive Officer
-------------------------------------
|
P.A. No. 2025
EXHIBIT 10.6
AIRCRAFT GENERAL TERMS AGREEMENT
AGTA-DAL
BETWEEN
THE BOEING COMPANY
AND
DELTA AIR LINES, INC.
TABLE OF CONTENTS
Page Number
ARTICLES
1. Definitions, Subject Matter of Sale and
Annual Fleet Plan Review 2
2. Price, Payment and Taxes 6
3. Option Aircraft 11
4. * 13
5. * 17
6. Regulatory Requirements and Certificates 19
7. Detail Specification; Changes 21
8. Representatives, Inspection, Demonstration Flights, Test
Data and Performance Guarantee Compliance 22
9. Delivery 23
10. Excusable Delay 24
11. Risk Allocation/Insurance 26
12. Assignment, Resale or Lease 27
13. Termination for Certain Events 29
14. Notices 31
15. Confidentiality 31
16. Miscellaneous 32
EXHIBITS
A Buyer Furnished Equipment Provisions Document
B Customer Support Document
C Product Assurance Document
D Escalation Adjustment
E Aircraft Delivery Requirements and Responsibilities Document
F *
APPENDICES
1 Sample Insurance Certificate
2 Sample Purchase Agreement Assignment
3 Post-Delivery Sale Notice
4 Post-Delivery Lease Notice
5 Purchaser's/Lessee's Agreement
6 Owner Appointment of Agent - Warranties
7 Contractor Confidentiality Agreement
8 Notice of Option Exercise
9 *
*This confidential information has been omitted and filed separately with the Commission.
|
AGTA-DAL
AIRCRAFT GENERAL TERMS AGREEMENT NUMBER AGTA-DAL
BETWEEN
THE BOEING COMPANY
AND
DELTA AIR LINES, INC.
RELATING TO
BOEING AIRCRAFT
This Aircraft General Terms Agreement Number AGTA-DAL (AGTA) dated as of October 21, 1997, is entered into between The Boeing Company (Boeing) and Delta Air Lines, Inc. (Customer).
AGTA-DAL
Article 1. Definitions, Subject Matter of Sale and Annual Fleet Plan Review.
1.1 Definitions. As used in this AGTA, the following terms have the following meanings:
Additional Aircraft means all aircraft other than Firm Aircraft, Option Aircraft and Rolling Option Aircraft that, pursuant to a written commitment entered into during the Term, Customer agrees to purchase, or is granted an option to purchase.
Advance Payment is defined as an advance payment against the Aircraft Price for an Aircraft.
Advance Payment Base Price is defined as the estimated price of an Aircraft, as of the Execution Date of a Purchase Agreement, for the Scheduled Delivery Month of such Aircraft using commercial forecasts of the Escalation Adjustment.
Advance Payment Schedule means, for any Aircraft, a Standard Advance Payment Schedule or Alternate Advance Payment Schedule.
Aircraft is defined as all aircraft manufactured by Boeing to be delivered to Customer under the applicable Purchase Agreement, including (i) Firm Aircraft, (ii) Option Aircraft that became Firm Aircraft, and (iii) Rolling Option Aircraft that became Firm Aircraft.
Aircraft Basic Price is defined as the sum of (i) the Airframe Price, (ii) the Optional Features Prices, and (iii) the Engine Price (except 737 model Aircraft for which the Engine Price is included in the Airframe Price).
Aircraft Price is defined as the sum of (i) the Aircraft Basic Price, (ii) the Escalation Adjustment and other price adjustments made pursuant to the applicable Purchase Agreement.
Airframe Price is defined as the price of the airframe for a model of Aircraft set forth in Table 1 to the applicable Purchase Agreement (for models 737-600, 737-700 and 737-800, the Airframe Price includes the Engine Price).
Alternate Advance Payment Schedule is defined as the Advance Payment schedule set forth in Table 3 to the applicable Purchase Agreement.
Boeing is defined as The Boeing Company, a Delaware corporation.
Boeing Excusable Delay is defined in Article 10.1.
AGTA-DAL
Boeing Non-Excusable Delay is defined in Article 10.2.
Business Day is defined as any day other than a Saturday, Sunday or other day on which banking institutions in New York, New York, Atlanta, Georgia or the State of Washington are authorized or required by law to close.
Buyer Furnished Equipment (BFE) is defined as equipment purchased and provided by Customer, which Boeing will receive, inspect, store and install in an Aircraft before Delivery in accordance with Supplemental Exhibit BFE/CDSPE/SPE/CSE to the applicable Purchase Agreement.
*This confidential information has been omitted and filed separately with the Commission.
Customer is defined as Delta Air Lines, Inc., a Delaware corporation.
Delivery is defined as the following events performed in accordance with the delivery procedure described in Article 9: (a) tender of an Aircraft that conforms to the applicable Detail Specification; (b) acceptance of the Aircraft by Customer; (c) payment by Customer of monies due upon sale of the Aircraft; (d) sale of such Aircraft by Boeing; and (e) Customer's receipt of the bill of sale as described in Article 9.3.
Delivery Date is defined as the actual date of delivery for an Aircraft.
Detail Specification is defined as the Boeing document that describes the configuration of each Aircraft purchased by Customer.
Engine Price is defined as the price set by the engine manufacturer for a specific engine model to be installed on the model of Aircraft set forth in the Tables to the applicable Purchase Agreement (not applicable to models 737-600, 737-700, and 737-800).
Escalation Adjustment is defined as the price adjustment to the Airframe and Optional Features Prices (and the Engine Price for models 737-600, 737-700 and 737-800) resulting from the calculation using the economic price formula contained in Exhibit D to this AGTA.
*This confidential information has been omitted and filed separately with the Commission.
Execution Date is defined as the date upon which this AGTA and the Purchase Agreements are executed.
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FAA means the United States Federal Aviation Administration or any successor agency of the United States.
Firm Aircraft is defined as those Aircraft listed in Table 1 to the applicable Purchase Agreement, and are initially: (a) 70 model 737-632/-732/-832 Aircraft; (b) 9 model 757-232 Aircraft; (c) 10 model 767-332/-332ER Aircraft; and (d) 21 model 767-432ER Aircraft.
Invoice Price is defined as the Aircraft Price, net of Credits, Advance Payments and other price adjustments made pursuant to the applicable Purchase Agreement.
Letter Agreement is defined as a letter agreement which, by its terms, relates to the subject matter of this AGTA and the Purchase Agreements.
Manufacturer Change is defined as any change to an Aircraft, data relating to an Aircraft, or testing of an Aircraft required by the FAA to obtain a Standard Airworthiness Certificate.
Notice of Option Exercise is defined as Customer's notification to Boeing of the exercise of an Option in the form presented in Appendix 8 to this AGTA.
Operator Change is defined as a change in equipment that is required by Federal Aviation Regulations (i) which is generally applicable to transport category aircraft to be used in United States certified air carriage and (ii) for which the required compliance date is on or before the Scheduled Delivery Month of the Aircraft.
Option is defined as a right granted to Customer to purchase an Aircraft of a designated model in a previously agreed-to delivery position, exercisable in accordance with the terms and conditions of Article 3 to this AGTA.
Option Aircraft is defined as those Option Aircraft listed in Table 2 to the applicable Purchase Agreement and are initially: (i) 60 model 737-632/-732/-832 Aircraft; (ii) 20 model 757-232 Aircraft; (iii) 10 model 767-332/-332ER Aircraft; (iv) 24 model 767-432ER Aircraft; and (v) 10 model 777-232IGW Aircraft.
Option Exercise Date is defined as that date on which Customer exercises an Option by providing Boeing with a Notice of Option Exercise.
Optional Feature is defined as an alternative addition or deletion to a basic feature.
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Optional Features Price is defined as the price for optional features selected by Customer for a specific model of Aircraft described in Exhibit A to the applicable Purchase Agreements.
Performance Guarantees are defined as the written guarantees in a Purchase Agreement or Letter Agreement regarding the operational performance of an Aircraft.
Purchase Agreement means a purchase agreement for each of the
model (a) 737-632/-732/-832, (b) 757-232, (c) 767-332ER/-332, (d) 767-432ER, and
(e) 777-2321GW Aircraft.
Rolling Option is defined as a right granted to Customer to purchase an Aircraft of a designated model with an estimated delivery position from a pool of such Aircraft, exercisable in accordance with the terms and conditions of Article 3 to this AGTA.
Rolling Option Aircraft is defined as those Aircraft listed in
Table 2 to the applicable Purchase Agreement and are initially: (i) 280 model
737 Aircraft; (ii) 90 model 757 Aircraft; (iii) 19 model 767-300 Aircraft; and
(iv) 25 model 767-400 Aircraft.
Scheduled Delivery Month is defined as the scheduled month of delivery for an Aircraft.
Standard Advance Payment Schedule is defined as the schedule of Advance Payments as set forth in Table 1 to the applicable Purchase Agreement.
Taxes are defined as all taxes, fees, charges, or duties and any interest thereon, including, but not limited to sales, use, customs, value added taxes, excise, transfer and similar taxes imposed by any domestic or foreign taxing authority, arising out of or in connection with the performance of the applicable Purchase Agreement or the sale, delivery, transfer or storage of any Aircraft, BFE, or other things furnished under the applicable Purchase Agreement.
Term is defined as the period from the Execution Date through December 31, 2017.
1.2 Aircraft. Boeing will manufacture and sell to Customer and Customer will purchase from Boeing Firm Aircraft under Purchase Agreements that incorporate the terms and conditions of this AGTA.
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1.3 Annual Fleet Plan Review. Customer and Boeing agree to meet annually (commencing on a date to be established by mutual agreement) to review Customer's projected fleet requirements and Boeing's projected production plans.
Article 2. Price, Payment and Taxes.
2.1. Price.
2.1.1 Price of Aircraft. At Delivery, Customer agrees to pay the Invoice Price for each Aircraft. The Invoice Price is determined as follows:
(i) Calculate the Aircraft Basic Price.
(ii) Calculate the Aircraft Price.
(iii) *This confidential information has
been omitted and filed separately with the Commission.
2.1.2 Airframe Price. *This confidential information has been omitted and filed separately with the Commission.
2.2 Price for Additional Aircraft. *This confidential information has been omitted and filed separately with the Commission.
2.3 *This confidential information has been omitted and filed separately with the Commission.
2.4. Advance Payments.
2.4.1 Calculation of Advance Payments. *This confidential information has been omitted and filed separately with the Commission.
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*This confidential information has been omitted and filed separately with the Commission.
2.4.3 Standard Advance Payment Schedule.
2.4.3.1 All Aircraft except 777-232IGW:
At Execution Date 1%
24 months before delivery 4%
21 months before delivery 5%
18 months before delivery 5%
12 months before delivery 5%
9 months before delivery 5%
6 months before delivery 5%
Total 30%
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2.4.3.2 777-232IGW:
At Execution Date 1%
24 months before delivery 4%
21 months before delivery 5%
18 months before delivery 5%
15 months before delivery 5%
12 months before delivery 5%
9 months before delivery 5%
6 months before delivery 5%
Total 35%
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2.4.4 *This confidential information has been omitted and filed separately with the Commission.
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*This confidential information has been omitted and filed separately with the Commission.
2.4.5 *This confidential information has been omitted and filed separately with the Commission.
2.4.6 *This confidential information has been omitted and filed separately with the Commission.
2.4.7 *This confidential information has been omitted and filed separately with the Commission.
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2.4.8 *This confidential information has been omitted and filed separately with the Commission.
2.4.9 *This confidential information has been omitted and filed separately with the Commission.
2.5 *This confidential information has been omitted and filed separately with the Commission.
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*This confidential information has been omitted and filed separately with the Commission.
2.6 Payment at Delivery. *This confidential information has been omitted and filed separately with the Commission.
2.7 Form of Payment. Customer will make all payments to Boeing by deposit of United States Dollars in immediately available funds in a bank account in the United States designated by Boeing.
2.8 Taxes.
2.8.1 Taxes. Customer agrees to pay, and to defend, indemnify and hold Boeing harmless from all Taxes imposed on Boeing or on Customer by any government except to the extent that any such Tax is measured by the net or gross income or excess profits, receipts, capital, franchise, net worth or business privilege Taxes of Boeing. If Boeing has reason to believe that any such tax is applicable, Boeing shall separately state the amount of such tax on its invoice. Such Taxes shall exclude any and all penalties, fines, similar fees or other assessments imposed by a country or governing body as a result of any violation of competition or antitrust law.
2.8.2 Contests. If a claim is made against any party for Taxes with respect to which the other party is liable for a payment or indemnity hereunder, the party making such claim will promptly give the other notice in writing within 15 days of receipt of such claim; provided however, that failure to give notice will not relieve any party of its obligations thereunder. Either party may, in good faith, with due diligence and at its expense, contest (or permit the other party to contest in the name of such party) the validity, applicability, or amount of such Taxes. If either party receives any refund on account of any suit or action for a Tax for which the other party has provided funds hereunder, such party shall promptly, but in any event within thirty (30) days of receipt of such refund, remit such refund to the other party, together with any interest refunded on such amount.
2.8.3 Reimbursement of Boeing. Customer will promptly reimburse Boeing on demand, net of additional Taxes thereon, for any Taxes that are imposed on and paid by Boeing or for which Boeing is responsible for collecting.
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Article 3. Option Aircraft.
3.1 Options.
3.1.1 Grant of Options. Boeing hereby grants to Customer Options for the Option Aircraft.
3.1.2 Exercise of Option. Customer may exercise an Option by providing Boeing with a Notice of Option Exercise no later than * prior to the first day of the Scheduled Delivery Month for the Aircraft. Each date on which Customer provides Boeing with a notice of option exercise is an Option Exercise Date, which is in the form of Appendix 8 of the AGTA. For the exercise of each 737-632/-732/-832 Option, the Notice of Option Exercise shall indicate Customer's selection of minor model.
3.1.3 Effect of Exercise. On each Option Exercise
Date:
(i) the Option Aircraft is converted to a Firm
Aircraft;
(ii) the Aircraft Basic Price for the Aircraft
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will be revised in accordance with Article 3.3 below and updated Tables 1, 2 and 3 to the applicable Purchase Agreement will be furnished to Customer;
(iii) the Aircraft is subject to all of the terms and conditions of this AGTA and the Purchase Agreements that apply to Firm Aircraft except for any Credits that are specifically set forth for Option Aircraft; and
*This confidential information has been omitted and filed separately with the Commission.
3.1.4 *This confidential information has been omitted and filed separately with the Commission.
3.1.5 Scheduled Delivery Month for Option Aircraft. As of the Execution Date, the Scheduled Delivery Months for Option Aircraft are set forth in Table 2 to the applicable Purchase Agreement. *
*This confidential information has been omitted and filed separately with the Commission.
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3.1.6 Tables. The Delivery Month, the Advance Payment Base Price and the Advance Payment Schedule for the Option Aircraft are listed in Table 2 to the applicable Purchase Agreement.
3.1.7 Differentiation of Option Aircraft from Firm Aircraft. When an Option is exercised and becomes a Firm Aircraft, such Aircraft will be denoted with an asterisk (*) in a column entitled "O/P" between the "Delivery Date Column" and the "Number of Aircraft Column" in Table 1 to the applicable Purchase Agreement.
3.1.8 *This confidential information has been omitted and filed separately with the Commission.
3.2. Rolling Options.
3.2.1 Grant of Options. Boeing hereby grants to Customer the right to convert Rolling Options to Options at the times and in the manner set forth in Articles 3.1.3 and 3.1.4.
3.2.2 Conversion of Rolling Options to Options. *This confidential information has been omitted and filed separately with the Commission.
3.2.3 Advance Payment Base Price. *This confidential information has been omitted and filed separately with the Commission.
3.3 Price.
3.3.1 Airframe Price. *This confidential information has been omitted and filed separately with the Commission.
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3.3.2 Optional Features. The Airframe Price for Option Aircraft will be adjusted to include the follow-on price for any applicable Optional Features previously selected by Customer that have been incorporated into the baseline Aircraft configuration. In addition, prices for newly selected Optional Features for Option Aircraft will be those in effect as of the Option Exercise Date.
3.3.3 Escalation Adjustments. The Airframe and Optional Features Prices for Option Aircraft are escalated on the same basis as the Firm Aircraft.
3.3.4 Engine Price Adjustments. Except for model 737 Aircraft, the Engine Price for the Option Aircraft will be adjusted to the engine manufacturer's then-current prices as of the Option Exercise Date. In addition, the engine escalation provisions listed in Exhibit EE1 to the applicable Purchase Agreement (except for model 737 Aircraft) will be revised if amended by the engine manufacturer prior to the Option Exercise Date.
3.4 Payment. *This confidential information has been omitted and filed separately with the Commission.
3.5 Amendments to Tables. From time to time Boeing and Customer agree to update affected tables and attachments to reflect, among other things, (i) delivery of Firm Aircraft, (ii) exercise and lapse of Options, (iii) conversion of Rolling Options, and (iv) re-assignment of Scheduled Delivery Months under Articles 4 and 5; provided, however that failure to enter into such amendments shall not affect any of Customer's and Boeing's rights and obligations under this Agreement or the Purchase Agreements.
3.6 Aircraft Configuration. The Option Aircraft will be configured to the latest Detail Specification in effect for the Firm Aircraft on the Option Exercise Date.
3.7 Performance Guarantees. Upon notification of Option Exercise, Boeing will, if necessary, update the Performance Guarantees to reflect changes in configuration in accordance with Articles 6 and 7 of the AGTA.
Article 4. *This confidential information has been omitted and filed separately with the Commission.
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*This confidential information has been omitted and filed separately with the Commission.
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*This confidential information has been omitted and filed separately with the Commission.
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*This confidential information has been omitted and filed separately with the Commission.
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*This confidential information has been omitted and filed separately with the Commission.
Article 5. *This confidential information has been omitted and filed separately with the Commission.
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*This confidential information has been omitted and filed separately with the Commission.
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*This confidential information has been omitted and filed separately with the Commission.
Article 6. Regulatory Requirements and Certificates.
6.1 Certificates. Boeing will manufacture each Aircraft to conform to the appropriate Type Certificate issued by the United States Federal Aviation Administration (FAA) for the specific model of Aircraft and will obtain from the FAA and furnish to Customer at Delivery of each Aircraft a Standard Airworthiness Certificate issued pursuant to Part 21 of the Federal Aviation Regulations. Boeing will assist Customer prior to Delivery in obtaining other certificates required by Customer to operate the Aircraft; however, Boeing shall not be obligated to obtain any other certificates or approvals for the Aircraft.
6.2 FAA or Applicable Regulatory Authority Manufacturer Changes.
*This confidential information has been omitted and filed separately with the Commission.
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*This confidential information has been omitted and filed separately with the Commission.
6.3 FAA Operator Changes. Boeing will deliver each Aircraft
with Operator Changes incorporated or, at Boeing's option, with suitable
provisions for the incorporation of such Operator Changes. Customer will pay
Boeing for each Operator Change incorporated in each Aircraft as set forth in
(a) and (b) below:
*This confidential information has been omitted and filed separately with the Commission.
6.4 Delay and Change Order. If Delivery of any Aircraft is delayed by the incorporation in such Aircraft of any Change required to be made under Articles 6.2 or 6.3 such delay shall be an Excusable Delay within the meaning of Article 10. Boeing shall issue and Customer shall accept a Change Order reflecting any Change required to be made under Article 6.2 or 6.3, which Change Order shall set forth in detail the particular Changes to be made therein and the effect, if any, of such changes on design, performance, weight, balance, time of Delivery and the Aircraft Basic Price of the affected Aircraft. Notwithstanding the provisions of Article 7 of this AGTA, any Change Orders issued pursuant to this Article 6.4 need not be signed by Customer and shall be deemed to be accepted by Customer and effective upon the date of Boeing's transmittal of such Change Order.
6.5 Discontinuance. If the use of either of the Certificates identified in Article 6.1 is discontinued during the performance of this Agreement, thereafter reference to such discontinued Certificate shall be deemed a reference to any other certificate or instrument issued by the FAA which corresponds to such Certificate or, if there should not be any such other certificate or instrument, then Boeing shall be deemed to have obtained such discontinued Certificate or Certificates upon demonstrating that each Aircraft complies substantially with the performance guarantees set forth in the Detail Specification.
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Article 7. Detail Specification; Changes.
7.1 Change Order. The Detail Specification for an applicable Aircraft model may, by mutual agreement, be amended from time to time by Change Order or other written agreement, which shall set forth in detail the particular changes to be made therein, and the effect, if any, of such changes on design, performance, weight, balance, time of Delivery and basic price of the Aircraft. Such Change Orders and other written agreements shall be signed on behalf of Customer and Boeing by their respective duly authorized representatives.
7.2 Detail Specification Changes. All changes which revise the Detail Specification shall be made in accordance with the procedures hereinafter set forth.
7.2.1 Master Change/Other Changes. The Detail Specification may be revised by mutual agreement of the parties by Master Change (MC), Production Record Revisions (PRR), Rapid Revisions (RR), or other change processes (which are acceptable to the FAA) which may be requested by Customer or initiated by Boeing, as appropriate. Each change shall be proposed to Customer by Boeing and shall describe the change to be accomplished, establish the Aircraft effectivity, and the effect, if any, on weight, and the Aircraft Basic Price . When signed by duly authorized representatives of both parties, such changes shall be binding on both parties and may be released immediately by Boeing to production. After acceptance of the change by Customer, Boeing will provide Specification Revision Inserts (SRI) as addendum sheets to maintain the currency of the Detail Specification. Periodically, such agreed changes shall be accumulated in formal Change Orders. A complete revision to the Detail Specification will be issued concurrently with the Change Order. The revision will incorporate the SRIs. As the Detail Specification revisions are predicated on incorporating accepted changes, formal release of the revised Detail Specification shall be independent of formal acceptance of the Change Order.
7.2.2 Development Change. Development Changes are those deemed necessary to correct defects, improve the Aircraft, prevent delay, or insure compliance with this Agreement but which have no materially adverse effect on the design, replaceability, interchangeability, weight, balance or functional characteristics of the Aircraft. The Detail Specification may be revised by Boeing without Customer's consent to incorporate Development Changes (DC's) where such changes do not adversely affect price, Delivery, guaranteed weight or guaranteed performance of the Aircraft or interchangeability, or replaceability or functional characteristics of Spare Parts; *This confidential information has been omitted and filed separately with the Commission.
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*This confidential information has been omitted and filed separately with the Commission.
Article 8. Representatives, Inspection, Demonstration Flights, Test Data, and Performance Guarantee Compliance.
8.1 Office Space. Commencing with the date of this AGTA and continuing until the last Delivery of an Aircraft, Boeing shall furnish, without additional charge, suitable office space and equipment in or conveniently located with respect to its plant for the accommodation of up to five (5) personnel of Customer.
8.2 Inspection. Boeing's manufacture of the Aircraft, and all components obtained by Boeing therefor, shall at all reasonable times be open to inspection by any duly authorized representatives of Customer. However, if access to any part of Boeing's plant where manufacture is in progress or components are stored is restricted by the United States Government, Boeing shall be allowed a reasonable time to make the items available for inspection elsewhere than in the restricted area. All inspections by Customer's representatives shall be performed in such manner as not to unduly delay or hinder manufacture or performance by Boeing.
8.3 Demonstration Flights. Each Aircraft shall be test flown by Boeing for such periods as may be required to demonstrate to Customer the functioning of the Aircraft and its equipment. Customer shall be permitted to have a reasonable number of representatives participate in such flights as observers.
8.4 Test Data; Performance Guarantee Compliance. Boeing shall furnish to Customer, as soon as practicable, flight test data, obtained on an aircraft of the type purchased hereunder, certified as correct by Boeing, to evidence compliance with any performance guarantees set forth in the applicable Purchase Agreement. Any performance guarantee shall be deemed to be met if reasonable engineering interpretations and calculations based on such flight test data establish that the Aircraft would, if actually flown, comply with such guarantee.
8.5 Special Aircraft Test Requirements. Subject to Customer's prior consent, Boeing may use the Aircraft for flight and ground tests prior to Delivery if such tests are deemed necessary by Boeing.
(a) to obtain the certificates required under Article 6.1, and
(i) other aircraft of the type purchased hereunder are not available for such tests, or
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(ii) special features incorporated in the Aircraft (but not incorporated in other aircraft of the type purchased hereunder) necessitate such tests, or
(iii) the Engines (as defined in Exhibit D to this AGTA) to be installed on the Aircraft are of different manufacture or type from those installed on other aircraft of the type purchased hereunder; or
(b) to evaluate actual or contemplated changes for the improvement of aircraft of the type purchased hereunder which may be requested for incorporation by Customer, in production or by retrofit, in any Aircraft.
Customer shall accept Delivery of any Aircraft used for such flight and ground tests without any reduction in price for depreciation or wear and tear resulting therefrom.
Article 9. Delivery.
9.1 Notices of Delivery Dates. Boeing will notify Customer of the approximate delivery date of each Aircraft at least sixty (60) days before the approximate delivery date and again at least twenty-one (21) days before the scheduled delivery date.
9.2 Place of Delivery. Each Aircraft shall be delivered at an airport in the State of Washington selected by Boeing or at such alternate site as may be mutually agreed upon in writing. If Delivery is made at an alternate site, at Customer's request, Customer shall promptly reimburse Boeing for any increased costs incurred by Boeing as a result thereof.
9.3 Documents of Title. Upon Delivery of and payment for each Aircraft, Boeing shall deliver to Customer a bill of sale duly conveying to Customer good title to such Aircraft free and clear of all liens, claims, charges and encumbrances of every kind whatsoever, and such other appropriate documents of title as Customer may reasonably request.
9.4 Delay. *This confidential information has been omitted and filed separately with the Commission.
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Article 10. Excusable Delay.
10.1 Boeing Excusable Delay. Boeing will not be liable for any delay beyond the Scheduled Delivery Month of an Aircraft or other performance under a Purchase Agreement caused by (i) acts of God; (ii) war or armed hostilities; (iii) government acts or priorities; (iv) fires, floods or earthquakes; (v) strikes or labor troubles causing cessation, slowdown or interruption of work; or (vi) any other cause to the extent such cause is beyond Boeing's control and not occasioned by Boeing's fault or negligence. A delay resulting from any such cause is defined as a Boeing Excusable Delay.
10.2 *This confidential information has been omitted and filed separately with the Commission.
*This confidential information has been omitted and filed separately with the Commission.
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*This confidential information has been omitted and filed separately with the Commission.
10.6 Aircraft Damaged Beyond Repair. If an Aircraft is destroyed or damaged beyond repair for any reason before Delivery, Boeing will give written notice to Customer specifying the earliest month possible, consistent with Boeing's other contractual commitments and production capabilities in which Boeing can deliver a replacement. Customer will have thirty (30) days from receipt of such notice to elect to have Boeing manufacture a replacement aircraft under the same terms and conditions of purchase, except that the calculation of the Escalation Adjustment will be based upon the Scheduled Delivery Month in effect immediately prior to the date of such notice, or, failing such election, the applicable Purchase Agreement will terminate with respect to such Aircraft. Boeing will not be obligated to manufacture a replacement aircraft if reactivation of the production line for the specific model of aircraft would be required.
10.7 Consequences of Termination. Termination of a Purchase Agreement with respect to an Aircraft under this Article will discharge all obligations and liabilities of Customer with respect to such Aircraft. If Customer terminates a Purchase Agreement with respect to an Aircraft under this Article, Boeing may elect,
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by written notice to Customer within thirty (30) days of such termination, to purchase from Customer any BFE related to the Aircraft covered by such Purchase Agreement at the invoice prices paid, or contracted to be paid, by Customer.
*This confidential information has been omitted and filed separately with the Commission.
Article 11. Risk Allocation/Insurance.
11.1 Title and Risk with Boeing.
11.1.1 Boeing's Indemnification of Customer. Until transfer of title to an Aircraft to Customer, Boeing will indemnify and hold harmless Customer and Customer's observers from and against all claims and liabilities, including all expenses and attorneys' fees incident thereto or incident to establishing the right to indemnification, for injury to or death of any person(s), including employees of Boeing but not employees of Customer, or for loss of or damage to any property, including an aircraft, arising out of or in any way related to the operation of an Aircraft during all demonstration and test flights conducted under the provisions of the applicable Purchase Agreement, whether or not arising in tort or occasioned by the negligence of Customer or any of Customer's observers.
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11.1.2 Definition of Customer. For the purposes of this Article, Customer is defined as Delta Air Lines, Inc., its divisions, subsidiaries, affiliates, the assignees of each, and their respective directors, officers, employees, and agents.
11.2 Insurance.
11.2.1 Insurance Requirements. Customer will purchase and maintain insurance acceptable to Boeing and will provide a certificate of such insurance that names Boeing as an additional insured for any and all claims and liabilities for injury to or death of any person or persons, including employees of Customer but not employees of Boeing, or for loss of or damage to any property, including any aircraft, arising out of or in any way relating to Materials, training, services, or other things provided under Exhibit B of this AGTA, which will be incorporated by reference into the applicable Purchase Agreement, whether or not arising in tort or occasioned by the negligence of Boeing, except with respect to legal liability to persons or parties other than Customer or Customer's assignees arising out of an accident caused solely by a product defect in an Aircraft. Customer will provide such certificate of insurance at least thirty (30) days prior to the scheduled delivery of the first Aircraft under a Purchase Agreement. The insurance certificate will reference each Aircraft delivered to Customer pursuant to each applicable Purchase Agreement. Annual renewal certificates will be submitted to Boeing before the expiration of the policy periods. The form of the insurance certificate, attached as Appendix 1, states the terms, limits, provisions, and coverages required by this Article 11.2.1. The failure of Boeing to demand compliance with this 11.2.1 in any year will not in any way relieve Customer of its obligations hereunder nor constitute a waiver by Boeing of these obligations.
11.2.2 Noncompliance with Insurance Requirements. If Customer fails to comply with any of the insurance requirements of Article 11.2.1 or if any of the insurers fails to pay a claim covered by the insurance or otherwise fails to meet any of insurer's obligations required by Appendix 1, Customer will provide the same protection to Boeing as that required by Article 11.2.1 above.
11.2.3 Definition of Boeing. For purposes of this article, Boeing is defined as The Boeing Company, its divisions, subsidiaries, affiliates, assignees of each, and their respective directors, officers, employees, and agents.
Article 12. Assignment, Resale or Lease.
12.1 Assignment. This AGTA and each applicable Purchase Agreement are for the benefit of the parties and their respective successors and assigns. No rights or duties of either party may be assigned or delegated, or contracted to be assigned or delegated, without the prior written consent of the other party, except:
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12.1.1 Either party may assign its interest to a corporation that (i) results from any merger, reorganization or acquisition of such party and (ii) acquires substantially all the assets of such party;
12.1.2 Boeing may assign its rights to receive
money; and
12.1.3 Boeing may assign any of its rights and
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duties to any wholly-owned subsidiary of Boeing.
12.1.4 Boeing may assign any of its rights and duties with respect to Part 1, Articles 1, 2, 4 and 5 of Exhibit B, Customer Support Document to the AGTA, to FlightSafety Boeing Training International L.L.C.
12.2 Transfer by Customer at Delivery. Boeing will take any requested action reasonably required for the purpose of causing an Aircraft, at time of Delivery, to be subject to an equipment trust, conditional sale, lien, or other arrangement for Customer to finance the Aircraft. However, no such action will require Boeing to divest itself of title to or possession of the Aircraft until Delivery of and payment for the Aircraft. A sample form of assignment acceptable to Boeing is attached as Appendix 2.
12.3 Sale or Lease by Customer After Delivery. If, following Delivery of an Aircraft, Customer sells or leases the Aircraft (including any sale and lease-back for financing purposes), all of Customer's rights with respect to the Aircraft under the applicable Purchase Agreement will inure to the benefit of the purchaser or lessee of such Aircraft, effective upon Boeing's receipt of the written agreement of the purchaser or lessee, in a form satisfactory to Boeing, to comply with all applicable terms and conditions of the applicable Purchase Agreement. Sample forms of agreement acceptable to Boeing are attached as Appendices 3 and 4.
12.4 Notice of Sale or Lease After Delivery. Customer will give notice to Boeing as soon as practicable of the sale or lease of an Aircraft including in the notice the name of the entity or entities with title and/or possession of such Aircraft.
12.5 Exculpatory Clause in Post-Delivery Sale or Lease. If, following the Delivery of an Aircraft, Customer sells or leases such Aircraft and obtains from the transferee any form of exculpatory clause protecting Customer from liability for loss of or damage to the Aircraft, and/or related incidental or consequential damages, including without limitation loss of use, revenue, or profit, Customer shall obtain for Boeing the purchaser's or lessee's written agreement to be bound by terms and conditions substantially as set forth in Appendix 5. This Article 12.5 applies only if purchaser or lessee has not provided to Boeing the written agreement described in Article 12.3 above.
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12.6 Appointment of Agent - Warranty Claims. If, following Delivery of an Aircraft, Customer appoints an agent to act directly with Boeing for the administration of claims relating to the warranties under the applicable Purchase Agreement, Boeing will deal with the agent for that purpose, effective upon Boeing's receipt of the agent's written agreement, in a form satisfactory to Boeing, to comply with all applicable terms and conditions of the applicable Purchase Agreement. A sample form of agreement acceptable to Boeing is attached as Appendix 6.
12.7 No Increase in Boeing Liability. No action taken by Customer or Boeing relating to the resale or lease of an Aircraft or the assignment of Customer's rights under the applicable Purchase Agreement will subject Boeing to any liability beyond that in the applicable Purchase Agreement or modify in any way Boeing's obligations under the applicable Purchase Agreement.
Article 13. Termination for Certain Events.
13.1 Reciprocal Termination Rights. Upon the occurrence of any of the following, a party may terminate, by giving written notice to the other party, any Purchase Agreement with respect to any undelivered Aircraft covered by such Purchase Agreement:
(i) The other party ceases doing business as a going concern, suspends all or substantially all of its business operations, makes an assignment for the benefit of creditors, generally does not pay its debts as they become due or admits in writing its inability to pay its debts; or
(ii) The other party petitions for or acquiesces in the appointment of any receiver, trustee or similar officer to liquidate or conserve its business or any substantial part of its assets; commences any legal proceeding such as bankruptcy, reorganization, readjustment of debt, dissolution or liquidation available for the relief of financially distressed debtors; or becomes the object of any such proceeding, unless the proceeding is dismissed or stayed within a reasonable period, not to exceed sixty (60) days.
13.2 *This confidential information has been omitted and filed separately with the Commission.
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*This confidential information has been omitted and filed separately with the Commission.
13.3 *This confidential information has been omitted and filed separately with the Commission.
13.4 *This confidential information has been omitted and filed separately with the Commission.
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Article 14. Notices.
All notices required by any applicable Purchase Agreement will be in English, will be effective on the date of receipt and may be transmitted by any customary means of written communication addressed as follows:
Customer: Delta Air Lines, Inc.
Hartsfield Atlanta International Airport
1030 Delta Blvd.
Atlanta, Georgia 30320
Attention: General Manager
with a copy to: Purchasing
Delta Air Lines, Inc.
Hartsfield Atlanta International Airport
1030 Delta Blvd.
Atlanta, Georgia 30320
Attention: General Counsel
Boeing: Boeing Commercial Airplane Group
P.O. Box 3707
Seattle, Washington 98124-2207
U.S.A.
Attention: Vice President - Contracts
Mail Stop 75-38
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With prior written notice, either party may revise its address.
Article 15. Confidentiality.
15.1 The AGTA and the Purchase Agreements contain confidential commercial and financial information. The parties agree to treat the AGTA and the Purchase Agreements as confidential and will not, without the prior written consent of the other party, disclose the AGTA or any Purchase Agreement or any information contained therein to any other party or entity. Notwithstanding the foregoing, either party may disclose the AGTA and any Purchase Agreement to the extent required by any government regulatory agency or court having jurisdiction over the disclosing
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party. In such event, the disclosing party shall, immediately upon receipt of the request or demand, notify the other party of such request or demand.
15.2 Customer is, or may be, required, pursuant to this AGTA or a Purchase Agreement, to provide documents, drawings, and other materials to Boeing which contain, convey, or embody proprietary, confidential, or trade secret information (Customer Proprietary Information) belonging to Customer (Customer Proprietary Materials). Boeing will treat all Customer Proprietary Materials and all Customer Proprietary Information in confidence and use and disclose the same only as specifically authorized in this AGTA or in accordance with other specific authorization from Customer. All Customer Proprietary Materials and Customer Proprietary Information will remain the property of Customer.
Article 16. Miscellaneous.
16.1 Government Approval. Boeing and Customer will assist each other in obtaining any governmental consents or approvals required to effect certification and sale of Aircraft under the applicable Purchase Agreement.
16.2 Headings. Article and paragraph headings used in this AGTA and in any Purchase Agreement are for convenient reference only and are not intended to affect the interpretation of this AGTA or any Purchase Agreement.
16.3 Dispute Resolution. If any dispute arises between Boeing and Customer in respect to this AGTA or the Purchase Agreements, Boeing and Customer hereby agree (except as provided in paragraph 1 of Exhibit F) to resolve such disputes in the manner set forth in Exhibit F hereto.
16.4 GOVERNING LAW. THIS AGTA AND ANY PURCHASE AGREEMENT WILL BE GOVERNED BY THE LAW OF THE STATE OF WASHINGTON, U.S.A., EXCLUSIVE OF WASHINGTON'S CONFLICTS OF LAWS PRINCIPLES.
16.5 Waiver/Severability. Failure by either party to enforce any provision of this AGTA or any Purchase Agreement will not be construed as a waiver. If any provision of this AGTA or any provision of any Purchase Agreement are held unlawful or otherwise ineffective by a court of competent jurisdiction, the remainder of the AGTA or the applicable Purchase Agreement will remain in effect.
16.6 Survival of Obligations. The Articles and Exhibits of this AGTA including but not limited to those relating to insurance, DISCLAIMER AND RELEASE and the EXCLUSION OF CONSEQUENTIAL AND OTHER DAMAGES will survive termination or cancellation of any Purchase Agreement or part thereof.
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16.7 *This confidential information has been omitted and filed separately with the Commission.
DELTA AIR LINES, INC.
By /s/ Leo F. Mullin
-------------------------------------
Its President and Chief Executive Officer
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THE BOEING COMPANY
By /s/ R. B. Woodard
-------------------------------------
Its President
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AGTA-DAL
EXHIBIT A
TO
AIRCRAFT GENERAL TERMS AGREEMENT
AGTA-DAL
BETWEEN
THE BOEING COMPANY
AND
DELTA AIR LINES, INC.
BUYER FURNISHED EQUIPMENT PROVISIONS DOCUMENT
A
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BUYER FURNISHED EQUIPMENT PROVISIONS DOCUMENT
1. General.
Certain equipment to be installed in the Aircraft is furnished to Boeing by Customer at Customer's expense. This equipment is designated "Buyer Furnished Equipment" (BFE) and is listed in the Detail Specification. Boeing will provide to Customer a BFE Requirements On-Dock/Inventory Document (BFE Document) or an electronically transmitted BFE Report which may be periodically revised, setting forth the items, quantities, on-dock dates and shipping instructions relating to the in sequence installation of BFE as described in the applicable Supplemental Exhibit BFE/CDSPE/SPE/CSE to this Exhibit A in the applicable Purchase Agreement
2. Supplier Selection.
Customer will:
2.1 Select and notify Boeing of the suppliers of BFE items by those dates appearing in Supplemental Exhibit BFE/CDSPE/SPE/CSE to the applicable Purchase Agreement.
2.2 Meet with Boeing and such selected BFE suppliers promptly after such selection to:
2.2.1 complete BFE configuration design
requirements for such BFE; and
2.2.2 confirm technical data submittal dates for
BFE certification.
|
3. Customer's Obligations.
3.1 Customer agrees to comply with and cause the supplier to comply with the provisions of the BFE Document or BFE Report including but not limited to;
3.1.1 delivery of technical data (in English) to Boeing as required to support installation and FAA certification in accordance with the schedule provided by Boeing or as mutually agreed upon during the BFE meeting referred to above;
3.1.2 delivery of BFE including production and/or flight training spares to Boeing in accordance with the quantities and schedule provided therein;
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3.1.3 assuring that all BFE Aircraft Software is delivered in compliance with D6-55562-8, BCAG Standards for Loadable Systems; and
3.1.4 delivery of appropriate quality assurance documentation to Boeing as required with each BFE part (D6-56586, "BFE Product Acceptance Requirements");
3.2 Customer agrees to authorize Boeing to discuss all details of the BFE directly with the BFE suppliers so long as Boeing's actions does not affect the design (including selection of materials) weight, or price of the BFE/CDSPE/SPE/CSE. Any changes to on-dock dates as a result of changes to Boeing's aircraft production schedule will not be communicated to BFE suppliers without Customer's prior consent.
3.3 Customer agrees to authorize Boeing to conduct or delegate to the supplier quality source inspection and supplier hardware acceptance of BFE at the supplier location and;
3.3.1 require supplier's contractual compliance to Boeing defined source inspection and supplier delegation programs, including availability of adequate facilities for Boeing resident personnel; and
3.3.2 assure that Boeing identified supplier's quality systems be approved to Boeing document D1-9000.
3.4 Customer agrees to obtain from supplier a non-exclusive,
perpetual, royalty-free, irrevocable license for Boeing to copy BFE Aircraft
Software. The license is needed to enable Boeing to load the software copies in
(i) the aircraft's mass storage device (MSD), (ii) media (e.g., diskettes,
CD-ROMs, etc.), (iii) the BFE hardware and/or (iv) an intermediate device or
other media to facilitate copying of the BFE Aircraft Software into the
aircraft's MSD, BFE hardware and/or media, including media as Boeing may deliver
to Customer with the aircraft.
3.5 Customer agrees to grant Boeing a license, extending the same rights set forth in paragraph 3.4 above, to copy: a) BFE Aircraft Software and data Customer has modified and/or b) other software and data Customer has added to the BFE Aircraft Software.
3.6 Customer agrees to provide necessary field service representation reasonably required at Boeing's facilities to support Boeing on all issues related to the installation and certification of BFE.
3.7 Customer agrees to deal directly with all BFE suppliers to obtain overhaul data, provisioning data, related product support documentation and any warranty provisions applicable to the BFE.
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3.8 Customer agrees to work closely with Boeing and the BFE suppliers to resolve any difficulties, including defective equipment, that arise.
3.9 Customer agrees to be responsible for modifying, adjusting and/or calibrating BFE as required for FAA approval and for all reasonable related expenses.
3.10 Customer agrees to warrant that the BFE will meet the requirements of the Detail Specification.
3.11 Customer agrees to be responsible for ensuring that all BFE provided pursuant to this Exhibit A is FAA certifiable at time of Aircraft delivery, or for obtaining waivers from the applicable regulatory agency for non-FAA certifiable equipment.
4. Boeing's Obligations.
Other than as set forth below and without charge to Customer, Boeing will provide for the installation of and install the BFE and obtain certification of the Aircraft with the BFE installed.
5. Nonperformance by Customer.
If Customer's nonperformance of obligations in this Exhibit or in the BFE/CDSPE/SPE/CSE Document causes a delay in the delivery of the Aircraft or causes Boeing to perform out-of-sequence or additional work, Customer will reimburse Boeing for all reasonable expenses associated with such out-of-sequence or additional work and be deemed to have agreed to any such delay in Aircraft delivery. Boeing shall provide reasonable substantiation of such claim to Customer at Customer's request. In addition Boeing will have the right to:
5.1 provide and install specified equipment or suitable alternate equipment and increase the price of the Aircraft accordingly; and/or
5.2 deliver the Aircraft to Customer without the BFE
installed.
5.3 Customer Excusable Delay.
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Customer shall not be responsible for nor be deemed to be in default under the provisions of this Exhibit A on account of any delay or failure in delivery of any item of BFE, technical data or other information required to be furnished by Customer herein due to any of the causes referred to in Article 10 of the AGTA, or due to any other cause to the extent it is beyond Customer's control or not occasioned by Customer's fault or negligence. In the event of any such delay or failure in delivery, said failure or delay shall, to the extent it delays performance of any act to be performed by Boeing under the Purchase Agreements, extend the date by which such act is to be performed.
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6. Return of Equipment.
Any of the BFE delivered by Customer to Boeing for the Aircraft and not incorporated in an Aircraft shall be redelivered to Customer by Boeing (in accordance with Customer's instruction) at Seattle, Washington, upon or after delivery of the last Aircraft to be delivered hereunder, in as good condition as when delivered by Customer to Boeing, reasonable wear and tear excepted.
7. Title and Risk of Loss.
Title to BFE will at all times remain with Customer or other owner. Boeing will have only such liability for BFE, including risk of loss, as a bailee for mutual benefit would have, but will not be liable for loss of use.
8. Indemnification of Boeing.
Customer hereby indemnifies and holds harmless Boeing from and against all claims and liabilities, including costs and expenses (including attorneys' fees) incident thereto or incident to successfully establishing the right to indemnification, for injury to or death of any person or persons, including employees of Customer but not employees of Boeing, or for loss of or damage to any property, including any Aircraft, arising out of or in any way connected with any nonconformance or defect in any BFE and whether or not arising in tort or occasioned by the negligence of Boeing. This indemnity will not apply with respect to any nonconformance or defect caused solely by Boeing's installation of the BFE.
9. Patent Indemnity.
Customer hereby indemnifies and holds harmless Boeing from and against all claims, suits, actions, liabilities, damages and costs arising out of any actual or alleged infringement of any patent or other intellectual property rights by BFE or arising out of the installation, sale or use of BFE by Boeing.
10. Definitions.
For the purposes of the above indemnities, the term "Boeing" includes The Boeing Company, its divisions, subsidiaries and affiliates, the assignees of each, and their directors, officers, employees and agents.
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EXHIBIT B
TO
AIRCRAFT GENERAL TERMS AGREEMENT
AGTA-DAL
BETWEEN
THE BOEING COMPANY
AND
DELTA AIR LINES, INC.
CUSTOMER SUPPORT DOCUMENT
This document contains:
Part 1: Maintenance and Flight Training Programs;
Operations Engineering Support
Part 2: Field Services and Engineering Support
Services
Part 3: Technical Information and Materials
Part 4: Alleviation or Cessation of Performance
Part 5: Protection of Proprietary Information and
Proprietary Materials
B
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GENERAL STATEMENT REGARDING
CUSTOMER SUPPORT
Any and all services, support and Materials provided by Boeing to Customer pursuant to this AGTA, Purchase Agreements, or Letter Agreements shall be governed by the terms and conditions of this AGTA. To the extent the terms and conditions of a Customer Services General Terms Agreement ("CSGTA") agreed between Boeing and Customer conflict with the terms and conditions of this AGTA, the terms of this AGTA shall control.
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CUSTOMER SUPPORT DOCUMENT
PART 1: BOEING MAINTENANCE AND FLIGHT TRAINING
PROGRAMS; OPERATIONS ENGINEERING SUPPORT
1. Boeing Training Programs.
1.1 Boeing will provide, at no charge to Customer, maintenance training and flight training programs ("Training") to support the introduction of a specific model of aircraft into service. The training programs will consist of general and specialized courses and are more specifically described in a Supplemental Exhibit to the applicable purchase agreement.
1.2 Boeing will conduct all training at Boeing's training facility in the Seattle area unless otherwise agreed.
1.3 All Training will be presented in the English language. If translation is required, Customer will provide interpreters.
1.4 Customer will be responsible for all living expenses of Customer's personnel. Boeing will transport Customer's personnel between their local lodging and Boeing's training facility.
1.5 If requested by Customer, Boeing will conduct the classroom portions of the maintenance and flight training (except for the Performance Engineer training courses) at a mutually acceptable alternate training site, subject to the following conditions:
1.5.1 Customer will provide acceptable classroom space, simulators (as necessary for flight training) and training equipment required to present the courses;
1.5.2 Customer will pay Boeing's then-current per diem charge for each Boeing instructor for each day, or fraction thereof, that the instructor is away from the Seattle area, including travel time;
1.5.3 Customer will reimburse Boeing for the actual costs of round-trip transportation for Boeing's instructors and the shipping costs of training Materials between the Seattle area and the alternate training site. At Customer's option, Customer may provide such transportation;
1.5.4 Customer will be responsible for all taxes, fees, duties, licenses, permits and similar expenses incurred by Boeing and its employees as a result of Boeing's providing training at the alternate site or incurred as a result of Boeing providing revenue service training; and
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1.5.5 Those portions of training that require the use of training devices not available at the alternate site will be conducted at Boeing's facility or at the alternate site.
2. Training Planning Conferences.
Customer and Boeing will conduct planning conferences approximately 12 months before the scheduled delivery month of the first aircraft of a model to define and schedule the Training. Boeing shall not charge Customer to conduct or participate in such planning conferences.
3. Operations Engineering Support.
3.1 As long as an aircraft purchased by Customer from Boeing is operated by Customer, Boeing will provide at no charge to Customer operations engineering support which shall include:
3.1.1 assistance with the analysis and preparation of performance data to be used in establishing operating practices and policies for Customer's operation of aircraft;
3.1.2 assistance with interpretation of the Minimum Equipment List ("MEL"), the definition of the Configuration Deviation List ("CDL") and the analysis of individual aircraft performance;
3.1.3 assistance with solving operational problems associated with delivery and route-proving flights;
3.1.4 information regarding significant service items relating to aircraft performance or flight operations; and
3.1.5 if requested by Customer, operations engineering support during an aircraft ferry flight.
4. General Terms and Conditions.
4.1 Boeing flight instructor personnel will not be required to work more than 5 days per week, or more than 8 hours in any one 24-hour period, of which not more than 5 hours per 8-hour workday will be spent in actual flying. These foregoing restrictions will not apply to ferry assistance or revenue service training services, which will be governed by FAA rules and regulations.
4.2 Normal Line Maintenance is defined as line maintenance that Boeing might reasonably be expected to furnish for flight crew training at Boeing's facility, and will include ground support and aircraft storage in the open, but will not include
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provision of spare parts. Boeing will provide Normal Line Maintenance services for any aircraft while the aircraft is used for flight crew training based at Boeing's facility (see article 4.3 below). Customer will provide such services if flight crew training is conducted elsewhere. Regardless of the location of such training, Customer will be responsible for providing all maintenance items (other than those included in Normal Line Maintenance) required during the training, including, but not limited to, fuel, oil, landing fees and spare parts.
4.3 If the flight training is based at Boeing's facility, several airports in the states of Washington, Montana and Oregon, as well as the services of the fixed base operator at Grant County Airport at Moses Lake, Washington, may be used. Unless otherwise agreed in the flight training planning conference, it will be Customer's and Boeing's joint responsibility to make arrangements for the use of such airports.
4.4 If Boeing agrees to make arrangements on behalf of Customer for the use of airports for flight training, Boeing will pay on Customer's behalf any landing fees charged by any airport used in conjunction with the flight training. At least 30 days before flight training, Customer will provide Boeing an open purchase order against which Boeing will invoice Customer for any landing fees Boeing paid on Customer's behalf. The invoice will be submitted to Customer approximately 60 days after flight training is completed, when all landing fee charges have been received and verified. Customer will pay the amount of such invoice to Boeing within 30 days of the date of the invoice.
4.5 If requested by Boeing, and agreed by Customer, in order to provide the flight training or ferry flight assistance, Customer will make available to Boeing an aircraft after delivery to familiarize Boeing instructor or ferry flight crew personnel with such aircraft. If flight of the aircraft is required for any Boeing instructor or ferry flight crew member to maintain an FAA license for flight proficiency or landing currency, Boeing will be responsible for the costs of fuel, oil, landing fees and spare parts attributable to that portion of the flight.
4.6 Unless mutually agreed by Boeing and Customer, if any part of the training described in Article 1.1 of this Exhibit is not used by Customer within 48 months after Delivery of the first Aircraft under the relevant Purchase Agreement, Boeing will not be obligated to provide such training.
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CUSTOMER SUPPORT DOCUMENT
PART 2: FIELD AND ENGINEERING SUPPORT SERVICES
1. General
Unless otherwise noted the support services described in this Part 2 shall be provided at no charge to Customer. Except with respect to field service representation, as defined in paragraph 2 below, the support services defined in this Part 2 shall be provided by Boeing effective with the Execution Date of this AGTA and continuing so long as at least one (1) Aircraft is regularly operated by Customer in commercial air transport service.
2. Field Service Representation.
Boeing will furnish field service representation to advise Customer with respect to the maintenance and operation of an aircraft (Field Service Representatives).
2.1 Field Service Representatives will be available at a facility designated by Customer beginning before the scheduled delivery month of the first aircraft and ending 12 months after delivery of the last aircraft covered by a specific purchase agreement. The field service period may be extended by mutual agreement of the parties which may be established by a written agreement or by Boeing's continued provision of field services.
2.2 Customer will provide, at no charge to Boeing, suitable furnished office space and office equipment at the location where Boeing is providing Field Service Representatives. As required, Customer will assist each Field Service Representative with visas, work permits, customs, mail handling, identification passes and formal introduction to local airport authorities.
2.3 Boeing Field Service Representatives are assigned to various airports around the world. Whenever Customer's aircraft are operating through any such airport, the services of Boeing's Field Service Representatives are available to Customer.
3. Engineering Support Services.
Boeing will, if requested by Customer, provide technical advisory
assistance for any aircraft and Boeing Product (as defined in Part I of Exhibit
C). Technical advisory assistance, provided from the Seattle area or at a base
designated by Customer as appropriate, will include:
3.1 Operational Problem Support. If Customer experiences operational problems with an aircraft, Boeing will analyze the information provided by Customer to determine the probable nature and cause of the problem and to suggest possible solutions.
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3.2 Schedule Reliability Support. If Customer is not satisfied with the schedule reliability of a specific model of aircraft, Boeing will analyze information provided by Customer to determine the nature and cause of the problem and to suggest remedial solutions.
3.3 Maintenance Cost Reduction Support. If Customer is concerned that actual maintenance costs of a specific model of aircraft are excessive, Boeing will analyze information provided by Customer to determine the nature and cause of the problem and to suggest possible solutions.
3.4 Aircraft Structural Repair Support. If Customer is designing structural repairs and desires Boeing's support, Boeing will analyze and as soon as reasonable practical take such actions as Customer may reasonably request for the purpose of obtaining FAA approval for structural repairs not covered by Boeing's Structural Repair Manual.
3.5 Aircraft Modification Support. If Customer is designing aircraft modifications and requests Boeing's support, Boeing will analyze and as soon as reasonable practical take such actions as Customer may reasonably request for the purpose of obtaining FAA approval for changes in, or replacement of, systems, parts, accessories or equipment manufactured to Boeing's detailed design. Boeing will not analyze any major structural change unless Customer's request for such analysis and comment includes complete detailed drawings, substantiating information (including any information required by applicable government agencies), all stress or other appropriate analyses, and a specific statement from Customer of the substance of the review and the response requested.
3.6 Facilities, Ground Equipment and Maintenance Planning Support. Boeing will, at Customer's request, evaluate Customer's technical facilities, tools and equipment for servicing and maintaining aircraft, to recommend changes where necessary and to assist in the formulation of an overall maintenance plan.
3.7 Post-Delivery Service Support. Boeing will, at Customer's request, perform work on an aircraft after delivery but prior to the initial departure flight or upon the return of the aircraft to Boeing's facility prior to completion of that flight. In that event the following provisions will apply.
3.7.1 Boeing may rely upon the commitment authority of the Customer's personnel requesting the work.
3.7.2 As title and risk of loss has passed to Customer, the insurance provisions of Article 11.2 of the AGTA apply.
3.7.3 The provisions of the Boeing Warranty in Part 2 of Exhibit C of this AGTA apply.
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3.7.4 Customer will pay Boeing for requested work not covered by the Boeing Warranty, if any.
3.7.5 The DISCLAIMER AND RELEASE and EXCLUSION OF CONSEQUENTIAL AND OTHER DAMAGES provisions in Article 12 of Part 2 of Exhibit C of this AGTA apply.
3.8 Additional Services. Boeing may, at Customer's request, provide additional services for an aircraft after delivery, which may include retrofit kit changes (kits and/or information), training, maintenance and repair of aircraft. Such additional services will be subject to a mutually acceptable price, schedule and scope of work. The DISCLAIMER AND RELEASE and the EXCLUSION OF CONSEQUENTIAL AND OTHER DAMAGES provisions in Article 12 of Part 2 of Exhibit C of this AGTA and the insurance provisions in Article 8.2 of this AGTA will apply to any such work. Title to and risk of loss of any such aircraft will always remain with Customer.
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CUSTOMER SUPPORT DOCUMENT
PART 3: TECHNICAL INFORMATION AND MATERIALS
1. General.
Materials are defined as any and all items that are created by Boeing or a third party, which are provided directly or indirectly from Boeing and serve primarily to contain, convey or embody information. Materials may include either tangible embodiments (for example, documents or drawings), or intangible embodiments (for example, software and other electronic forms) of information but excludes Aircraft Software. Aircraft Software is defined as software that is installed on and used in the operation of the aircraft.
Boeing will furnish to Customer certain Materials to support the maintenance and operation of the aircraft at no additional charge to Customer, except as otherwise provided herein. Such Materials will, if applicable, be prepared generally in accordance with Air Transport Association of America (ATA) Specification No. 100, entitled "Specification for Manufacturers' Technical Data". Materials will be in English and in the units of measure used by Boeing to manufacture an aircraft.
Digitally-produced Materials will, if applicable, be prepared generally in accordance with ATA Specification No. 2100, dated January 1994, "Digital Data Standards for Aircraft Support."
2. Materials Planning Conferences.
Customer and Boeing will conduct planning conferences approximately 12 months before the scheduled delivery month of the first aircraft of a model in order to mutually determine the proper format and quantity of Materials to be furnished to Customer in support of the aircraft.
When available, Customer may select Boeing standard digital format as the delivery medium or, alternatively, Customer may select a reasonable quantity of printed and 16mm microfilm formats. When Boeing standard digital format is selected, Customer may also select up to 5 copies of printed or microfilm format copies, with the exception of the Illustrated Parts Catalog, which will be provided in one selected format only.
3. Information and Materials - Incremental Increase.
Until one year after the month of delivery of the last aircraft covered by a specific purchase agreement, Customer may annually request in writing a reasonable increase in
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the quantity of Materials as agreed in the planning conference. Boeing will provide the additional quantity at no additional charge beginning with the next normal revision cycle. Customer may request a decrease in revision quantities at any time.
4. Advance Representative Copies.
All advance representative copies of Materials will be selected by Boeing from available sources. Such advance copies will be for advance planning purposes only.
5. Customized Materials.
All customized Materials will reflect the configuration of each aircraft as delivered.
6. Revisions.
6.1 Revision Service. Boeing will provide revisions free of charge to those Materials identified and selected by Customer and agreed to by Boeing in the planning conference conducted for a specific model of aircraft, reflecting changes developed by Boeing, as long as Customer operates an aircraft of that model.
6.2 Revisions Based on Boeing Service Bulletin Incorporation. If Boeing receives written notice that Customer intends to incorporate, or has incorporated, any Boeing service bulletin in an aircraft, Boeing will at no charge issue revisions to Materials with revision service reflecting the effects of such incorporation into such aircraft.
7. Computer Software Documentation for Boeing Manufactured Airborne Components and Equipment.
Boeing will provide to Customer a Computer Software Index containing a listing of (i) all programmed airborne avionics components and equipment manufactured by Boeing or a Boeing subsidiary, designed and developed in accordance with Radio Technical Commission for Aeronautics Document No. RTCA/DO-178 dated January 1982, No. RTCA/DO-178A dated March 1985, or later as available, and installed by Boeing in aircraft covered by the applicable purchase agreement and (ii) specific software documents (SOFTWARE DOCUMENTATION) available to Customer from Boeing for the listed components and equipment.
Two copies of the Computer Software Index will be furnished to Customer with the first aircraft of a model. Revisions to the Computer Software Index applicable to such model of aircraft will be issued to Customer as revisions are developed by Boeing for so long as Customer operates the aircraft.
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Software Documentation will be provided to Customer upon written request. The charge to Customer for Software Documentation will be Boeing's price to reproduce the Software Documentation requested. Software Documentation will be prepared generally in accordance with ATA Specification No. 102 revised April 20, 1983, "Specification for Computer Software Manual" but Software Documentation will not include, and Boeing will not be obligated to provide, any code (including, but not limited to, original source code, assembled source code, or object code) on computer sensible media.
8. Supplier Technical Data.
8.1 For supplier-manufactured programmed airborne avionics components and equipment classified as Seller Furnished Equipment (SFE) or Seller Purchased Equipment (SPE) which contain computer software designed and developed in accordance with Radio Technical Commission for Aeronautics Document No. RTCA/DO-178 dated January 1982, No. RTCA/DO-178A dated March 1985, or later as available, Boeing will request that each supplier of the components and equipment make software documentation available to Customer in a manner similar to that described in Article 7 above.
8.2 The provisions of this Article will not be applicable to items of BFE.
8.3 Boeing will furnish to Customer a document identifying the terms and conditions of the product support agreements between Boeing and its suppliers requiring the suppliers to fulfill Customer's requirements for information and services in support of the specific model of aircraft.
9. Buyer Furnished Equipment Data.
Boeing will incorporate BFE information into the customized Materials providing Customer makes the information available to Boeing at least nine months prior to the scheduled delivery month of Customer's first aircraft of a specific model. If the BFE information is received by Boeing subsequent to nine months prior to delivery of Customers first Aircraft then Boeing will incorporate such BFE information at the earliest possible revision cycle. Customer agrees to furnish the information in Boeing standard digital format if Materials are to be delivered in Boeing standard digital format.
10. Materials Shipping Charges.
Boeing will pay the reasonable transportation costs of the Materials. Customer is responsible for any customs clearance charges, duties, and taxes.
11. Customer's Shipping Address.
The Materials furnished to Customer hereunder are to be sent to a single address to be specified. Customer will promptly notify Boeing of any change to the address.
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CUSTOMER SUPPORT DOCUMENT
PART 4: ALLEVIATION OR CESSATION OF PERFORMANCE
Boeing will not be required to provide any Materials, services, Training or other things at a facility designated by Customer if any of the following conditions exist:
1. a labor stoppage or dispute in progress involving Customer;
2. wars or warlike operations, riots or insurrections in the country where the facility is located;
3. any condition at the facility which, in the opinion of Boeing, is detrimental to the general health, welfare or safety of its personnel or their families;
4. the United States Government refuses permission to Boeing personnel or their families to enter into the country where the facility is located, or recommends that Boeing personnel or their families leave the country; or
5. the United States Government refuses permission to Boeing to deliver Materials, services, Training or other things to the country where the facility is located.
After the location of Boeing personnel at the facility, Boeing further reserves the right, upon the occurrence of any of such events, to immediately and without prior notice to Customer relocate its personnel and their families.
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CUSTOMER SUPPORT DOCUMENT
PART 5: PROTECTION OF PROPRIETARY INFORMATION AND
PROPRIETARY MATERIALS
1. General.
All Materials provided by Boeing to Customer pursuant to this AGTA, Purchase Agreements or related Letter Agreements and not covered by a Boeing CSGTA or other agreement between Boeing and Customer defining Customer's right to use and disclose the Materials and included information will be covered by, and subject to the terms of this AGTA. Title to all Materials containing, conveying or embodying confidential, proprietary or trade secret information (Proprietary Information) belonging to Boeing or a third party (Proprietary Materials), will at all times remain with Boeing or such third party. Customer will treat all Proprietary Materials and all Proprietary Information in confidence and use and disclose the same only as specifically authorized in this AGTA.
2. License Grant.
Boeing grants to Customer a worldwide, non-exclusive, non-transferable license to use and disclose Proprietary Materials in accordance with the terms and conditions of this AGTA. Customer is authorized to make copies of Materials and all copies of Proprietary Materials will belong to Boeing and be treated as Proprietary Materials under this AGTA. Customer will preserve all proprietary legends, and all copyright notices on all Materials and insure the inclusion of those legends and notices on all copies.
3. Use of Proprietary Materials and Proprietary Information.
Customer is authorized to use Proprietary Materials and Proprietary Information for the purpose of: (a) operation, maintenance, repair, or modification of Customer's aircraft for which the Proprietary Materials and Proprietary Information have been specified by Boeing and (b) development and manufacture of training devices for use by Customer.
4. Providing of Proprietary Materials to Contractors.
Customer is authorized to provide Proprietary Materials to Customer's contractors for the sole purpose of maintenance, repair, or modification of Customer's aircraft for which the Proprietary Materials have been specified by Boeing. In addition, Customer may provide Proprietary Materials to Customer's contractors for the sole purpose of developing and manufacturing training devices for Customer's use. Before providing Proprietary Materials to its contractor, Customer will first obtain a written agreement from the contractor by which the contractor agrees (a) to use the Proprietary Materials
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only on behalf of Customer, (b) to be bound by all of the restrictions and limitations of this Part 5, and (c) that Boeing is a third party beneficiary under the written agreement. Customer agrees to provide copies of all such written agreements to Boeing upon request and be liable to Boeing for any breach of those agreements by a contractor. A sample agreement acceptable to Boeing is attached as Appendix VII.
5. Providing of Proprietary Materials and Proprietary Information to Regulatory Agencies.
When and to the extent required by a government regulatory agency or judicial authority having jurisdiction over Customer or an aircraft ("Authority"), Customer is authorized to provide Proprietary Materials and to disclose Proprietary Information to the Authority. In such event Customer shall as soon as reasonably practical notify and coordinate with Boeing the response. Customer agrees to notify Boeing immediately upon learning of any (a) distribution, disclosure, or additional use by the Authority, (b) request to the Authority for distribution, disclosure, or additional use, or (c) intention on the part of the Authority to distribute, disclose, or make additional use of Proprietary Materials or Proprietary Information.
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EXHIBIT C
TO
AIRCRAFT GENERAL TERMS AGREEMENT
AGTA-DAL
BETWEEN
THE BOEING COMPANY
AND
DELTA AIR LINES, INC.
PRODUCT ASSURANCE DOCUMENT
This document contains:
Part 1: Exhibit C Definitions
Part 2: Boeing Warranty
Part 3: Boeing Service Life Policy
Part 4: Supplier Warranty Commitment
Part 5: Boeing Interface Commitment
Part 6: Boeing Indemnities against Patent and Copyright Infringement
C
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PRODUCT ASSURANCE DOCUMENT
PART 1: EXHIBIT C DEFINITIONS
Authorized Agent - Agent appointed by Customer to perform corrections and to administer warranties (see Appendix VI to the AGTA for a form acceptable to Boeing).
Average Direct Hourly Labor Rate - is the average hourly rate (excluding all fringe benefits, premium-time allowances, social charges, business taxes and the like) paid by Customer to its Direct Labor employees.
Boeing Product - any system, accessory, equipment, part or Aircraft Software that is manufactured or created by Boeing or manufactured or created to Boeing's detailed design with Boeing's authorization.
Correct - to repair, modify, provide modification kits or replace with a new product.
Correction - a repair, a modification, a modification kit or a new product.
Corrected Boeing Product - a Boeing Product which is free of defect as a result of a Correction.
Direct Labor - Labor spent by direct labor employees to remove, disassemble, modify, repair, inspect and bench test a defective Boeing Product, and to reassemble, final inspection and reinstall a Corrected Boeing Product.
Direct Materials - Items such as parts, gaskets, grease, sealant and adhesives, installed or consumed in performing a Correction, excluding allowances for administration, overhead, taxes, customs duties and the like.
Materials - are as defined in Exhibit B to the AGTA.
Source Control Drawing (SCD) - a Boeing document defining specifications for certain Supplier Products.
Supplier - the manufacturer of a Supplier Product.
Supplier Product - any system, accessory, equipment, part or Aircraft Software that is not manufactured to Boeing's detailed design. This includes but is not limited to parts manufactured to a SCD, all standards, and other parts obtained from non-Boeing sources.
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Warranty Inspections - inspections of Boeing Products performed during the warranty period that are recommended by a service bulletin or service letter.
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PRODUCT ASSURANCE DOCUMENT
PART 2: BOEING WARRANTY
1. Warranty Applicability.
This warranty applies to all Boeing Products. Warranties applicable to Supplier Products are in Part 4. Warranties applicable to engines will be provided either by Supplemental Exhibits to individual purchase agreements or pursuant to separate agreement between Customer and the engine manufacturer, but not both.
2. Warranty.
2.1 Coverage. Boeing warrants that at the time of Aircraft delivery:
(i) the Aircraft will conform to the then current revision of the Detail Specification applicable to the Aircraft delivered, except for portions stated to be estimates, approximations or design objectives;
(ii) all Boeing Products in the Aircraft will be free from defects in material and workmanship, including process of manufacture;
(iii) all Boeing Products in the Aircraft will be free from defects in design, including selection of materials and the process of manufacture, in view of the state of the art at the time of design, and
(iv) the workmanship utilized to install Supplier Products, engines and BFE will be free from defects.
2.2 Exceptions. The following conditions do not constitute a defect under this warranty:
(i) conditions resulting from normal and reasonable wear and tear in Customer's operations;
(ii) conditions resulting from Customer's misuse, abuse or neglect; and
(iii) conditions resulting from failure to properly service and maintain the Aircraft.
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3. Warranty Periods.
3.1 Warranty. The warranty period begins on the date of Aircraft delivery and ends: (i) after 48 months for Boeing aircraft models 777-200, -300 or 737-600, -700, -800, or new aircraft models designed and manufactured with similar, new technology; or, (ii) after 36 months for any other Boeing aircraft model.
*This confidential information has been omitted and filed separately with the Commission.
3.2 Warranty on Corrected Boeing Products. The warranty period applicable to a Corrected Boeing Product, including the workmanship to Correct and install, resulting from a defect in material or workmanship is the remainder of the warranty period for the defective Boeing Product it replaced. The warranty period for a Corrected Boeing Product resulting from a defect in design is either 24 months for Aircraft with a basic warranty of 48 months, 18 months for Aircraft with a basic warranty of 36 months or the remainder of the initial warranty period, whichever is longer. The above warranty period for Corrected Boeing Products begins on the date of delivery of the Corrected Boeing Product or date of delivery of the kit or kits furnished to Correct the Boeing Product.
3.3 *This confidential information has been omitted and filed separately with the Commission.
4. Remedies.
4.1 Defect Correction. At Customer's option, Boeing will either Correct or reimburse Customer to Correct defects in Boeing Products discovered during the warranty period.
4.2 Warranty Inspections. In addition to the remedies to Correct defects in Boeing Products, Boeing will reimburse Customer for cost of Direct Labor to perform certain inspections of the Aircraft to determine the existence of a covered defect in a Boeing Product, provided:
4.2.1 the inspections for the covered defect are mandated by the FAA or other governmental authority having jurisdiction over the Customer's operation or are recommended by a Boeing service bulletin or service letter issued by Boeing during the warranty period; and
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4.2.2 *This confidential information has been omitted and filed separately with the Commission.
4.3 Credit Memorandum Reimbursement. Boeing will make all reimbursements by credit memoranda which may be applied toward the purchase of Boeing goods and services.
4.4 Maximum Reimbursement. Unless previously agreed, the maximum reimbursement for Direct Labor and Direct Materials used to Correct a defective Boeing Product will not exceed 65% of Boeing's then-current sales price for a new replacement Boeing Product. If the estimate to Correct a defective Boeing Product exceeds 65% of the price of a new part, Boeing will either provide a credit to Customer at 65% of the replacement price of a new part or a new replacement part, at Customer's' option.
4.5 Year 2000 Compliance.
4.5.1 Customer has requested certain commitments from Boeing regarding the year 2000 Compliance. Year 2000 Compliance Software is software which will accommodate the change from year 1999 to and beyond year 2000. In response to this request, Boeing warrants to Customer the following:
4.5.2 Boeing has designed its software system to preclude any interruption in its operation due to the anomalies resulting from the value for current date.
4.5.3 Boeing has designed its software system to produce desired results for all valid date values within the application domain and in combination with other products, prior to, through and beyond the year 2000.
4.5.4 Boeing's software systems use of date elements in interfaces will permit specifying the century to eliminate date ambiguity without human intervention, including leap year calculations.
4.5.5 Boeing's software systems will, where any date element is represented without a century, provide that the correct century shall be unambiguous for all manipulations involving that element.
In the event such software does not meet the requirements in 4.5.2 through 4.5.5 above at the time of Aircraft delivery to Customer, or in the case of software furnished to Customer, pursuant to Exhibit B, Part 3 of the AGTA such
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software, Boeing will, at its election, either modify such software to be Year 2000 Compliant, replace such non-compliant software with software that is Year 2000 Compliant or provide a reasonable workaround to allow continued use of such software until final correction to the software can be accomplished. Customer's remedies under this paragraph are sole and exclusive and are limited to no-charge modification, replacement or workaround of the non-compliant software and will be accomplished either prior to Aircraft delivery or, following Aircraft delivery, as soon as practicable after discovery of noncompliance.
5. Discovery and Notice.
5.1 For a claim to be considered for reimbursement:
(i) the defect must be discovered during the warranty period. For the purposes of this Section 5.1. (i) the warranty period is extended for the periods described in paragraph 3 and Supplemental Exhibits to the Purchase Agreements.
(ii) Boeing Product Assurance Contracts must receive written notice of the discovery no later than 90 days after expiration of the warranty period.
5.2 Receipt of Customer's notice of the discovery of a defect secures Customer's rights to remedies under this Exhibit C, whether or not Customer has performed the Correction at the time of the notice.
5.3 Boeing may release service bulletins or service letters advising Customer of the availability of certain warranty remedies. When such advice is provided, Customer will be deemed to have fulfilled the requirements for discovery of the defect and submittal of notice under this Exhibit C as of the date specified in the service bulletin or service letter.
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6. Filing a Claim.
6.1 Authority to File. Claims may be filed by Customer or the Authorized Agent that Customer appoints to act on Customer's behalf. Such appointment will only be effective upon Boeing's receipt of the Authorized Agent's express written agreement, in a form satisfactory to Boeing, to be bound by and to comply with all applicable terms and conditions of this Aircraft General Terms Agreement.
6.2 Claim Information.
6.2.1 Claims filed under this Exhibit C shall contain the following information:
(i) identity of claimant;
(ii) serial or block number of the Aircraft on which the defective Boeing Product was delivered;
(iii) part number of defective Boeing Product;
(iv) purchase order number and date of delivery of a spare part
(v) description and substantiation of defect; and
(vi) date the defect was discovered.
(vii) date the Correction was completed.
6.2.2 Boeing may request additional information from Customer based on the nature of the defect and the remedies requested and Customer shall reasonably cooperate to comply with such request.
6.3 Boeing Claim Processing.
6.3.1 All claims must be signed and submitted in writing directly by Customer or its Authorized Agent to Boeing Product Assurance Contracts.
6.3.2 Boeing will promptly review the claim and will give notification of claim approval or rejection. If the claim is rejected, Boeing will provide a written explanation, including the basis for such rejection.
6.3.3 If Boeing implements a change in its database which includes the ability for electronic filing of warranty claims and Customer does not
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have the software required to submit claims electronically, Boeing will provide the software at no charge to Customer.
6.3.4 *This confidential information has been omitted and filed separately with the Commission.
7. Limited Warranty for Certain Materials.
7.1 Boeing warrants that, at the time of delivery, all Materials created by Boeing will be free from errors and defects in media. In the case where such Materials are provided by on-line electronic access, media is the digital format transmitted from Boeing.
7.2 Warranty Periods and Claims. The warranty period with respect to an error or a defect in any Materials created by Boeing begins at delivery of the Materials in which the error or defect is discovered and ends 36 or 48 months after delivery of the Materials, based on the warranty periods, by aircraft model, in Para. 3.1 of this Exhibit C. The claimed error or defect must become apparent to Customer within the applicable warranty period, and the Boeing Product Assurance Regional Manager must receive written notice of such error or defect at the earliest practicable time after the error or defect becomes apparent to Customer, but in no event later than 90 days after expiration of the applicable warranty period.
7.3 Remedy. Customer's remedy for an error or a defect in media is replacement of the erroneous or defective Materials created by Boeing with Materials free from such error or defect.
8. Corrections Performed by Customer.
8.1 Facilities Requirements. Customer may at its option Correct defective Boeing Products at its facilities or may subcontract Corrections to a third party contractor or an Authorized Agent.
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8.2 Technical Requirements. All Corrections done by Customer, a third party contractor or Customer's Authorized Agent must be performed in accordance with Boeing's applicable service manuals, bulletins or other written instructions, using parts and materials furnished or approved by Boeing.
8.3 Reimbursement.
8.3.1 Boeing will reimburse for costs of Direct Materials and Direct Labor (excluding time expended for normal overhaul) at Customer's Warranty Labor Rate to Correct a defective Boeing Product or Corrected Boeing Product. Claims for reimbursement will contain a report of Customer's Direct Labor hours expended and Direct Materials consumed to Correct the defective Boeing Product. Boeing may request that Customer, the third party contractor, or Customer's Authorized Agent produce invoices for Direct Materials.
8.3.2 *This confidential information has been omitted and filed separately with the Commission.
8.3.3 Boeing will reimburse Customer for freight charges associated with Corrections performed by a third party contractor or Customer's Authorized Agent.
8.3.4 Boeing will provide Customer reimbursement for MRO material at the percentage of labor expenditures Customer is actually experiencing. Following analysis of data from Customer which establishes the actual percentage, Boeing will set the percentage at the level supported by the data.
8.4 Disposition of Defective Boeing Products Beyond Economical Repair.
8.4.1 Defective Boeing Products or Corrected Boeing Products that are found to be beyond economical repair will be retained for a period of 60 days from the date Boeing receives Customer's claim. Boeing may request return of such Boeing Products or corrected Boeing Products during the 60 day period for inspection and confirmation of a defect.
8.4.2 A defective Boeing Product or Corrected Boeing Product with a Boeing Spare Parts Price Catalog value of U.S. $2,000.00 or less may be
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scrapped without notification to Boeing. If such Product has a value greater than U.S. $2,000.00, Customer must obtain confirmation of unrepairability by Boeing's on-site Customer Services Representative prior to scrapping. Confirmation may be in the form of the Representative's signature on Customer's claim or through direct communication between the Representative and Boeing Product Assurance Contracts. *This confidential information has been omitted and filed separately with the Commission.
8.5 Warranty Labor Rate. If Customer or its Authorized Agent Corrects a defective Boeing Product, reimbursement to Customer for Direct Labor Hours will be provided at Customer's established Warranty Labor Rate. Customer's established Warranty Labor Rate will be the greater of the standard labor rate or 150% of Customer's Average Direct Hourly Rate. The standard labor rate paid by Boeing to its customers is established and published annually. Prior to or concurrently with submittal of Customer's first claim for Direct Labor reimbursement, Customer will notify Boeing of Customer's then-current average direct hourly labor rate, and thereafter notify Boeing of any material change in such rate. Boeing will require information from Customer to substantiate such rates.
9. Corrections Performed by Boeing.
9.1 Freight Charges. Customer will pay shipping charges to return a defective Boeing Product or defective Corrected Boeing Product to Boeing. Boeing will reimburse Customer for the charge for any item determined to be defective under this Aircraft General Terms Agreement. Boeing will pay shipping charges to return the Corrected Boeing Product.
9.2 Customer Instructions. The documentation shipped with the returned defective Boeing Product or defective Corrected Boeing Product shall include specific technical instructions for work to be performed on the Boeing Product.
9.3 Correction Time Objectives.
9.3.1 Boeing's will make Corrections to defective Boeing Products or defective Corrected Boeing Products within 10 working days for avionics and electronic Boeing Products, 30 working days for Corrections of other Boeing Products performed at Boeing's facilities, and 40 working days for Corrections of other Boeing Products performed at a Boeing subcontractor's facilities ("Turn Time"). The Turn Time is measured from the date Boeing receives the defective Boeing Product and a valid claim to the date Boeing ships the Corrected Boeing product to Customer.
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9.3.2 If Customer has a critical parts shortage because Boeing has exceeded a Turn Time and Customer has procured spare Boeing Products for the defective Boeing Product in quantities based on Customer's operating experience, then Boeing will either expedite performance of the Correction or provide a substitute Boeing Product on a no charge loan or lease basis until the Corrected Boeing Product is returned.
9.4 *This confidential information has been omitted and filed separately with the Commission.
9.5 *This confidential information has been omitted and filed separately with the Commission.
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*This confidential information has been omitted and filed separately with the Commission.
9.6 *This confidential information has been omitted and filed separately with the Commission.
10. Returning an Aircraft.
10.1 Conditions. An Aircraft may be returned to Boeing's facilities for Correction only if:
(i) Boeing and Customer agree a defect exists;
(ii) Customer lacks access to adequate facilities, equipment or qualified personnel to perform the Correction; and
(iii) it is not practical, in Boeing's estimation, to dispatch Boeing personnel to perform the Correction at a remote site.
10.2 Correction Costs. Boeing will perform the Correction at no charge to Customer. Subject to the conditions of Article 10.1, Boeing will reimburse Customer for the costs of fuel, oil and landing fees incurred in ferrying the Aircraft to Boeing and back to Customer's facilities. Customer will minimize the length of both flights.
10.3 Separate Agreement. Boeing and Customer will enter into a separate agreement covering return of the Aircraft and performance of the Correction. Boeing must obtain Customer's prior authorization for Boeing to perform additional work that is not part of the Correction.. Such additional work shall be performed in accordance with the terms and conditions of Customer's Customer Services General Terms Agreement.
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11. Insurance.
The provisions of Article 8.2 "Insurance", of the AGTA, will apply to any work performed by Boeing in accordance with Customer's specific technical instructions, to the extent any legal liability of Boeing is based upon the content of such instructions.
12. Disclaimer and Release; Exclusion of Liabilities.
12.1 DISCLAIMER AND RELEASE. THE WARRANTIES, OBLIGATIONS AND LIABILITIES OF BOEING AND THE REMEDIES OF CUSTOMER IN THIS EXHIBIT C OR OTHERWISE PROVIDED IN THIS AGTA, THE PURCHASE AGREEMENTS AND LETTER AGREEMENTS ARE EXCLUSIVE AND IN SUBSTITUTION FOR, AND CUSTOMER HEREBY WAIVES, RELEASES AND RENOUNCES, ALL OTHER WARRANTIES, OBLIGATIONS AND LIABILITIES OF BOEING AND ALL OTHER RIGHTS, CLAIMS AND REMEDIES OF CUSTOMER AGAINST BOEING, EXPRESS OR IMPLIED, ARISING BY LAW OR OTHERWISE, WITH RESPECT TO ANY NONCONFORMANCE OR DEFECT IN ANY AIRCRAFT, BOEING PRODUCT, MATERIALS, TRAINING, SERVICES OR OTHER THING PROVIDED UNDER THIS AGTA AND THE APPLICABLE PURCHASE AGREEMENT, INCLUDING, BUT NOT LIMITED TO:
(A) ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS;
(B) ANY IMPLIED WARRANTY ARISING FROM COURSE OF
PERFORMANCE, COURSE OF DEALING OR USAGE OF TRADE;
(C) ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY IN TORT, WHETHER OR NOT ARISING FROM THE NEGLIGENCE OF BOEING; AND
(D) ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY FOR
LOSS OF OR DAMAGE TO ANY AIRCRAFT.
12.2 EXCLUSION OF CONSEQUENTIAL AND OTHER DAMAGES. BOEING WILL HAVE NO OBLIGATION OR LIABILITY, WHETHER ARISING IN CONTRACT (INCLUDING WARRANTY), TORT, WHETHER OR NOT ARISING FROM THE NEGLIGENCE OF BOEING, OR OTHERWISE, FOR LOSS OF USE, REVENUE OR PROFIT, OR FOR ANY OTHER INCIDENTAL OR CONSEQUENTIAL DAMAGES WITH RESPECT TO ANY
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NONCONFORMANCE OR DEFECT IN ANY AIRCRAFT, BOEING PRODUCT, MATERIALS, TRAINING, SERVICES OR OTHER THING PROVIDED UNDER THIS AGTA AND THE APPLICABLE PURCHASE AGREEMENT.
12.3 Definitions. For the purpose of this Article, "BOEING" or "Boeing" is defined as The Boeing Company, its divisions, subsidiaries, affiliates, the assignees of each, and their respective directors, officers, employees and agents.
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PRODUCT ASSURANCE DOCUMENT
PART 3: BOEING SERVICE LIFE POLICY
1. Definitions.
SLP Component - any of the primary structural elements (excluding industry standard parts, such as Military Standard ("MS") and National Aerospace Standard ("NAS") of the landing gear, wing, fuselage, vertical or horizontal stabilizer listed in the applicable Purchase Agreement for a specific model of aircraft that is installed in the Aircraft at time of delivery or is purchased from Boeing by Customer as a spare part. The detailed SLP Component listing will be in Supplemental Exhibit SLP1 to each Purchase Agreement.
2. Service Life Policy.
2.1 SLP Commitment. If a failure or defect is discovered in a SLP Component within the time periods specified in Article 2.2 below, Boeing will, at a price calculated pursuant to Article 3 below, Correct the SLP Component.
2.2 SLP Policy Periods.
2.2.1 The policy period for SLP Components initially installed on an Aircraft is 12 years after the date of delivery of the Aircraft.
2.2.2 The policy period for SLP Components purchased from Boeing by Customer as spare parts is 12.5 years from delivery of such SLP Component.
3. Price.
The price that Customer will pay for the Correction of a defective or failed SLP Component will be calculated pursuant to the following formula:
where:
P = price to Customer
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C = SLP Component Boeing Spare Parts Price Catalog sales price at time of Correction (less any applicable discounts then available to Customer. If any such discount is applied to the invoiced price, this formula will include the discounted price in lieu of the Spare Parts Catalog price.)
T = total age in months of the defective or failed SLP Component from the date of delivery to Customer to the date of discovery of such condition.
4. Conditions.
Boeing's obligations under this Policy are conditioned upon the following:
4.1 Customer must notify Boeing in writing of the defect or failure within three months after it becomes apparent.
4.2 Customer shall provide reasonable evidence that the claimed defect or failure is covered by this Policy The following conditions do not constitute a defect under this Policy:
(i) conditions resulting from normal and reasonable wear
and tear in Customer's operations;
ii) conditions resulting from Customer's misuse, abuse or
neglect; and
(iii) conditions resulting from failure to properly service
and maintain the Aircraft.
4.3 If return of a defective or failed SLP Component is practicable and requested by Boeing, Customer will return such SLP Component to Boeing at Boeing's expense.
4.4 Customer's rights and remedies under this Policy are limited to the receipt of a Correction at prices calculated pursuant to Article 3 above.
5. Disclaimer and Release; Exclusion of Liabilities.
This Part 3 and the rights and remedies of Customer and the obligations of Boeing are subject to the DISCLAIMER AND RELEASE and EXCLUSION OF CONSEQUENTIAL AND OTHER DAMAGES provisions of Article 12 of Part 2 of this Exhibit C.
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PRODUCT ASSURANCE DOCUMENT
PART 4: SUPPLIER WARRANTY COMMITMENT
1. Supplier Warranties and Supplier Patent Indemnities.
Boeing will use diligent efforts to obtain warranties and indemnities against patent infringement enforceable by Customer from Suppliers of Supplier Products (except for engines) installed on the Aircraft at the time of delivery that were selected and purchased by Boeing, but not manufactured to Boeing's detailed design. Boeing will furnish copies of the warranties and patent indemnities to Customer in Boeing Document D6-56115, Product Support and Product Assurance Supplier Defined Equipment Information, not less than three (3) months prior to the scheduled delivery month of the first Aircraft under each Purchase Agreement covered by this AGTA.
2. Boeing Assistance in Administration of Supplier Warranties.
Customer will be responsible for submitting warranty claims directly to Suppliers; however, if Customer experiences problems enforcing any Supplier warranty obtained by Boeing for Customer, Boeing will conduct an investigation of the problem and assist Customer in the resolution of those claims.
3. Boeing Support in Event of Supplier Default.
3.1 If the Supplier defaults in the performance of a material obligation under its warranty, and Customer provides evidence to Boeing that a default has occurred, then Boeing will furnish the equivalent warranty terms as provided by the defaulting Supplier.
3.2 At Boeing's request, Customer will assign to Boeing, and Boeing will be subrogated to, its rights against the Supplier provided by the Supplier warranty.
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PRODUCT ASSURANCE DOCUMENT
PART 5: BOEING INTERFACE COMMITMENT
1. Interface Problems.
An Interface Problem is defined as a technical problem in the operation of an Aircraft or its systems experienced by Customer, the cause of which is not readily identifiable by Customer but which Customer believes to be attributable to the design characteristics of the Aircraft or its systems. In the event Customer experiences an Interface Problem, Boeing will, in consultation with the Customer, and without charge to Customer, promptly conduct an investigation and analysis to determine the cause or causes of the Interface Problem. Boeing will promptly advise Customer at the conclusion of its investigation of Boeing's opinion as to the causes of the Interface Problem and Boeing's recommendation as to corrective action.
2. Boeing Responsibility.
If Boeing determines that the Interface Problem is primarily attributable to the design of any Boeing Product, Boeing will Correct the design to the extent of any then-existing obligations of Boeing under the provisions of the applicable Boeing Warranty or Boeing Service Life Policy.
3. Supplier Responsibility.
If Boeing determines that the Interface Problem is primarily attributable to the design of a Supplier Product, Boeing will assist Customer in processing a warranty claim against the Supplier.
4. Joint Responsibility.
If Boeing determines that the Interface Problem is partially attributable to the design of a Boeing Product and partially to the design of a Supplier Product, Boeing will seek a solution to the Interface Problem through the cooperative efforts of Boeing and the Supplier and will promptly advise Customer of the resulting corrective actions and recommendations.
5. General.
So long as the Interface problem is corrected to Customer's satisfaction or Customer is otherwise satisfied with the remedial action proposed by Boeing to correct the Interface Problem, Customer will, if requested by Boeing, assign to Boeing any of its rights against any supplier as Boeing may require to fulfill its obligations hereunder.
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6. Disclaimer and Release; Exclusion of Liabilities.
This Part 5 and the rights and remedies of Customer and the obligations of Boeing herein are subject to the DISCLAIMER AND RELEASE and EXCLUSION OF CONSEQUENTIAL AND OTHER DAMAGES provisions of Article 12 of Part 2 of this Exhibit C.
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PRODUCT ASSURANCE DOCUMENT
PART 6: BOEING INDEMNITIES AGAINST PATENT, COPYRIGHT AND
TRADE SECRET INFRINGEMENT
1. Indemnity Against Patent Infringement.
Boeing will defend and indemnify Customer with respect to all claims, suits and liabilities arising out of any actual or alleged patent infringement through Customer's use, lease or resale of any Aircraft or any Boeing Product installed on an Aircraft at delivery.
2. Indemnity Against Copyright Infringement.
Boeing will defend and indemnify Customer with respect to all claims, suits and liabilities arising out of any actual or alleged copyright infringement through Customer's use, lease or resale of any Boeing created Aircraft Software installed on an Aircraft at delivery.
3. Indemnity Against Trade Secret Infringement
Boeing will defend and indemnify Customer with respect to all claims, suits and liabilities arising out of any actual or alleged trade secret infringement by Boeing which interferes with Customer's use, lease or resale of any Aircraft or any Boeing Product installed on an Aircraft at delivery.
4. Exceptions, Limitations and Conditions.
4.1 Boeing's obligation to indemnify Customer for copyright infringement is limited to infringements in countries which, at the time of the infringement, are members of The Berne Union and recognize computer software as a "work" under The Berne Convention.
4.2 The indemnities provided under this Part 6 will not apply to any
(i) BFE, (ii) engines, (iii) Supplier Product (iv) Boeing Product used other
than for its intended purpose, or (v) Aircraft Software not created by Boeing.
4.3 Boeing's obligation to indemnify Customer for trade secret infringement is limited to infringement arising out of wrongful use or disclosure of trade secrets by Boeing without any knowledge or involvement on the part of Customer.
4.4 Customer must deliver written notice to Boeing (i) within 10 days after Customer first receives notice of any suit or other formal action against Customer and (ii) within 30 days after Customer first receives any other allegation or written claim of infringement covered by this Part 6.
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4.5 At any time, but without cost or prejudice to Customer, Boeing will have the right at its option and expense to: (i) negotiate with any party claiming infringement, (ii) assume or control the defense of any infringement allegation, claim, suit or formal action, (iii) intervene in any infringement suit or formal action, and/or (iv) attempt to resolve any claim of infringement by replacing an allegedly infringing Boeing Product or Aircraft Software with a noninfringing equivalent.
4.6 Customer will furnish to Boeing all information, records and assistance within Customer's possession or control which Boeing reasonably considers relevant or material to any alleged infringement covered by this Part 6.
4.7 Except as required by a final judgment entered against Customer by a court of competent jurisdiction from which no appeals can be or have been filed, either Boeing or Customer will obtain the other's written approval prior to paying, committing to pay, assuming any obligation or making any material concession relative to any infringement covered by these indemnities.
4.8 *This confidential information has been omitted and filed separately with the Commission.
4.9 BOEING WILL HAVE NO OBLIGATION OR LIABILITY UNDER THIS PART 6 FOR LOSS OF USE, REVENUE OR PROFIT, OR FOR ANY OTHER INCIDENTAL OR CONSEQUENTIAL DAMAGES. THE OBLIGATIONS OF BOEING AND REMEDIES OF CUSTOMER IN THIS PART 6 ARE EXCLUSIVE AND IN SUBSTITUTION FOR, AND CUSTOMER HEREBY WAIVES, RELEASES AND RENOUNCES ALL OTHER INDEMNITIES, OBLIGATIONS AND LIABILITIES OF BOEING AND ALL OTHER RIGHTS, CLAIMS AND REMEDIES OF CUSTOMER AGAINST BOEING, EXPRESS OR IMPLIED, ARISING BY LAW OR OTHERWISE, WITH RESPECT TO ANY ACTUAL OR ALLEGED PATENT, COPYRIGHT, TRADE SECRET OR OTHER INTELLECTUAL PROPERTY INFRINGEMENT OR THE LIKE BY ANY AIRCRAFT, BOEING PRODUCT, AIRCRAFT SOFTWARE, MATERIALS, TRAINING, SERVICES OR OTHER THING PROVIDED UNDER THIS AGTA AND THE APPLICABLE PURCHASE AGREEMENT.
4.10 For the purposes of this Part 6, "BOEING or Boeing" is defined as The Boeing Company, its divisions, subsidiaries, affiliates, the assignees of each and their respective directors, officers, employees and agents.
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EXHIBIT D
TO
AIRCRAFT GENERAL TERMS AGREEMENT
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BETWEEN
THE BOEING COMPANY
AND
DELTA AIR LINES, INC.
ESCALATION ADJUSTMENT
AIRFRAME AND OPTIONAL FEATURES
(FOR MODEL 737-600, 737-700 AND 737-800, AIRFRAME
PRICE INCLUDES THE ENGINE PRICE)
D
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ESCALATION ADJUSTMENT
1. Formula.
Airframe and Optional Features price adjustments (Airframe Price Adjustment); are used to allow prices to be stated in current year dollars at the signing of the applicable purchase agreement and to adjust the amount to be paid by Customer at delivery for the effects of economic fluctuation. The Airframe Price Adjustment will be determined at the time of aircraft delivery in accordance with the following formula:
P(a) = (P)(L + M - 1)
Where:
P(a) = Airframe Price Adjustment. (For Model 737-600,
737-700 and 737-800, the Airframe Price includes
the Engine Price.)
L = .65 x ECI
---
base year index (as set forth in Table 1 of
the applicable purchase agreement)
M = .35 x ICI
---
base year index (as set forth in Table 1 of
the applicable purchase agreement)
|
P = Airframe Price plus Optional Features Price (as set forth in the applicable purchase agreement).
ECI is a value determined using the U.S. Department of Labor, Bureau of Labor Statistics "Employment Cost Index for workers in aerospace manufacturing" (ECI code 3721), calculated by establishing a three-month arithmetic average value (expressed as a decimal and rounded to the nearest tenth) using the values for the fifth, sixth and seventh months prior to the month of scheduled delivery of the applicable aircraft. As the Employment Cost Index values are only released on a quarterly basis, the value released for the month of March will be used for the months of January and February; the value for June used for April and May; the value for September used for July and August; and the value for December used for October and November.
ICI is a value determined using the U.S. Department of Labor, Bureau of Labor Statistics "Producer Prices and Price Index - Industrial Commodities Index", calculated as a 3-month arithmetic average of the released monthly values (expressed as a decimal and rounded to the
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nearest tenth) using the values for the 5th, 6th and 7th months prior to the month of scheduled delivery of the applicable aircraft.
As an example, for an aircraft scheduled to be delivered in the month of January, the months June, July and August of the preceding year will be utilized in determining the value of ECI and ICI.
Note: i. In determining the values of L and M, all calculations and resulting values will be expressed as a decimal rounded to the nearest ten-thousandth.
ii. .65 is the numeric ratio attributed to labor in the Airframe Price Adjustment formula.
iii. .35 is the numeric ratio attributed to materials in the Airframe Price Adjustment formula.
iv. The denominators (base year indices) are the actual average values reported by the U.S. Department of Labor, Bureau of Labor Statistics (base year June 1989 = 100). The applicable base year and corresponding denominator will be provided by Boeing in the applicable purchase agreement.
2. Values to be Utilized in the Event of Unavailability.
2.1 If the Bureau of Labor Statistics substantially revises the methodology used for the determination of the values to be used to determine the ECI and ICI values (in contrast to benchmark adjustments or other corrections of previously released values), or for any reason has not released values needed to determine the applicable Airframe Price Adjustment, the parties will, prior to the delivery of any such aircraft, select a substitute from other Bureau of Labor Statistics data or similar data reported by non-governmental organizations. Such substitute will result in the same adjustment, insofar as possible, as would have been calculated utilizing the original values adjusted for fluctuation during the applicable time period. However, if within 24 months after delivery of the aircraft, the Bureau of Labor Statistics should resume releasing values for the months needed to determine the Airframe Price Adjustment, such values will be used to determine any increase or decrease in the Airframe Price Adjustment for the aircraft from that determined at the time of delivery of the aircraft.
2.2 Notwithstanding Article 2.1 above, if prior to the scheduled delivery month of an aircraft the Bureau of Labor Statistics changes the base year for determination of the ECI and ICI values as defined above, such re-based values will be incorporated in the Airframe Price Adjustment calculation.
2.3 In the event escalation provisions are made non-enforceable or otherwise rendered void by any agency of the United States Government, the parties agree, to the extent they may lawfully do so, to equitably adjust the Purchase Price of any affected aircraft to reflect an allowance for increases or decreases in labor compensation
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and material costs occurring since February, 1995, which is consistent with the applicable provisions of paragraph 1 of this Exhibit D.
Note: i. The values released by the Bureau of Labor Statistics and available to Boeing 30 days prior to the scheduled delivery month of an aircraft will be used to determine the ECI and ICI values for the applicable months (including those noted as preliminary by the Bureau of Labor Statistics) to calculate the Airframe Price Adjustment for the aircraft invoice at the time of delivery. The values will be considered final and no Aircraft Price Adjustments will be made after Aircraft delivery for any subsequent changes in published Index values.
ii. The maximum number of digits utilized in any part of the Airframe Price Adjustment equation will be 4, where rounding of the fourth digit will be increased to the next highest digit when the 5th digit is equal to 5 or greater.
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EXHIBIT E
TO
AIRCRAFT GENERAL TERMS AGREEMENT
AGTA-DAL
BETWEEN
THE BOEING COMPANY
AND
DELTA AIR LINES, INC.
AIRCRAFT DELIVERY REQUIREMENTS AND RESPONSIBILITIES
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AIRCRAFT DELIVERY REQUIREMENTS AND RESPONSIBILITIES
This Exhibit E documents the delivery activities and documentation required to facilitate delivery of the aircraft covered under this AGTA.
1. Government Documentation Requirements.
1.1 Airworthiness and Registration Documents.
On or about 6 months prior to delivery of each Aircraft, Customer will notify Boeing of the registration number assigned to the Aircraft. In addition, and on or about 3 months prior to delivery of each Aircraft, Customer will, by letter to the regulatory authority having jurisdiction, authorize the temporary use of such registration numbers by Boeing during the pre-delivery testing of the Aircraft.
Customer is responsible for furnishing any Temporary or Permanent Registration Certificates required by any governmental authority having jurisdiction to be displayed aboard the Aircraft after delivery.
1.2 Certificate of Sanitary Construction.
Prior to delivery of each Aircraft, Boeing will obtain from the United States Public Health Service and provide to Customer at delivery, a United States Certificate of Sanitary Construction for the aircraft to be delivered.
2. Insurance Certificate.
Unless provided earlier, Customer will provide to Boeing on or about 30 days prior to delivery of the Aircraft, a copy of the requisite annual insurance certificate in accordance with the requirements of Article 11 of the AGTA.
3. Notice of Flyaway.
On or about 20 days prior to delivery of the Aircraft, Customer will provide to Boeing a letter stating the requested ferry flight information:
(i) the name of the company which is to furnish fuel for the ferry flight and any scheduled post-delivery flight training, if required, the method of payment for such fuel, and the fuel load for the ferry flight.
(ii) the cargo to be loaded prior to flyaway and where it is to be stowed on board the Aircraft.
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(iii) any BFE equipment to be removed prior to flyaway and returned to Boeing BFE stores for installation on Customer's subsequent Aircraft.
(iv) a preliminary list of names and citizenship of each crew member and passenger who will be aboard the Aircraft during the ferry flight; and
(v) a complete ferry flight itinerary.
4. Delivery Actions by Boeing.
In addition to Boeing's obligation contained in Article 6 of the AGTA, Boeing shall also do the following:
4.1 Schedule of Inspections. All FAA, Boeing, Customer and, if required, U.S. Customs Bureau inspections will be scheduled by Boeing for completion prior to delivery or departure of the Aircraft. Customer will be informed of such schedules.
4.2 Schedule of Demonstration Flights. All FAA and Customer demonstration flights will be scheduled by Boeing for completion prior to delivery of the Aircraft and shall be performed in accordance with the provisions of Article 5.3 of the AGTA.
4.3 Schedule for Customer's Flight Crew. Boeing will inform Customer of the date that a flight crew is required for acceptance routines associated with delivery of the Aircraft.
4.4 Fuel Provided by Boeing. Boeing will provide to Customer, without charge, the amount of fuel shown in U.S. gallons in the table below for the model of Aircraft being delivered and full capacity of engine oil at the time of delivery or prior to the ferry flight of the Aircraft.
AIRCRAFT MODEL FUEL PROVIDED
-------------- -------------
737 1,000
747 4,000
757 1,600
767 2,000
777 3,000
|
4.5 Flight Crew and Passenger Consumables. Boeing will provide food, coat hangers, towels, toilet tissue, drinking cups and soap for the first segment of the ferry flight for the Aircraft.
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4.6 Delivery Papers, Documents and Data. Boeing will have available at the time of delivery of the Aircraft certain delivery papers, documents and data for execution and delivery. If title for the Aircraft will be transferred to Customer through a Boeing sales subsidiary and if the Aircraft will be registered with the FAA, Boeing will pre-position in Oklahoma City, Oklahoma, for filing with the FAA at the time of delivery of the Aircraft an executed original Form 8050-2, Aircraft Bill of Sale, indicating transfer of title to the Aircraft from Boeing's sales subsidiary to Customer.
4.7 Delegation of Authority. If specifically requested in advance by Customer, Boeing will present a certified copy of a Resolution of Boeing's Board of Directors, designating and authorizing certain persons to act on its behalf in connection with delivery of the Aircraft.
5. Delivery Actions by Customer.
5.1 Aircraft Radio Station License. At delivery Customer will provide its Aircraft Radio Station License to be placed on board the Aircraft following delivery.
5.2. Aircraft Flight Log. At delivery Customer will provide the Aircraft Flight Log for the Aircraft.
5.3 Delegation of Authority. If requested in advance by Boeing, Customer will present to Boeing at delivery of the Aircraft, a copy of Customer's Delegation of Authority designating and authorizing certain persons to act on its behalf in connection with delivery of the specified Aircraft.
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EXHIBIT F
TO
AIRCRAFT GENERAL TERMS AGREEMENT
AGTA-DAL
BETWEEN
THE BOEING COMPANY
AND
DELTA AIR LINES, INC.
*This confidential information
has been omitted and filed
separately with the Commission.
F
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*This confidential information has been omitted and filed separately with the Commission.
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*This confidential information has been omitted and filed separately with the Commission.
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SAMPLE
INSURANCE CERTIFICATE
[ date ]
Certificate of Insurance
ISSUED TO: The Boeing Company
Post Office Box 3707
Mail Stop 13-57
Seattle, Washington 98124
Attn: Manager - Aviation Insurance for
Vice President - Employee Benefits,
Insurance and Taxes
CC: Boeing Commercial Airplane Group
P.O. Box 3707
Mail Stop 75-38
Seattle, Washington 98124-2207
U.S.A.
Attn: Vice President - Contracts
NAMED INSURED: DELTA AIR LINES INC.
|
We hereby certify that in our capacity as Brokers to the Named Insured, the following described insurance is in force on this date:
INSURER POLICY NO. PARTICIPATION ------- ---------- ------------- |
POLICY PERIOD: From [date and time of inception of the Policy(ies)] to
[date and time of expiration].
GEOGRAPHICAL LIMITS: Worldwide
App. 1
1
|
AGTA-DAL
SAMPLE
INSURANCE CERTIFICATE
AIRCRAFT INSURED: All Boeing manufactured aircraft owned or operated
by the Named Insured which are the subject of the following
purchase agreement(s), entered into between The Boeing
Company and _________________ (hereinafter "Aircraft"):
Purchase Agreement No. ____ dated ______
Purchase Agreement No. ____ dated ______
|
COVERAGES:
1. AIRCRAFT "ALL RISKS" HULL (GROUND AND FLIGHT)
2. AIRCRAFT HULL WAR AND ALLIED PERILS (AS PER LSW 555, OR ITS SUCCESSOR
WORDING)
3. AIRLINE LIABILITY
Including, but not limited to, Bodily Injury, Property Damage, Aircraft Liability, Passenger Legal Liability, Premises/Operations Liability, Completed Operations/Products Liability, Baggage Legal Liability (checked and unchecked), Cargo Legal Liability, Contractual Liability and Personal Injury.
LIMITS OF LIABILITY:
To the fullest extent of the Policy limits that the Named Insured carries from the time of delivery of the first Aircraft under the first Purchase Agreement listed under "Aircraft Insured" and thereafter at the inception of each policy period, but in any event no less than the following:
Combined Single Limit Bodily Injury and Property Damage: any one occurrence each Aircraft (with aggregates as applicable).
(737-500/600) * (737-300/700) * (737-400) * (737-800) * (757-200) * *This confidential information (757-300) * has been omitted and filed (767-200) * separately with the Commission. (767-300) * (767-400ER) * (777-200/300) * (747-400) * |
(In regard to all other models and/or derivatives, to be specified by Boeing).
App. 1
AGTA-DAL
SAMPLE
INSURANCE CERTIFICATE
(In regard to Personal Injury coverage, limits are * any one offense/aggregate.)
SPECIAL PROVISIONS APPLICABLE TO BOEING:
It is certified that the lead Insurer is aware of the terms and conditions of the Aircraft General Terms Agreement AGTA/(________) and the following purchase agreements:
PA ______ dated _______ PA ______ dated _______ PA ______ dated _______
Each Aircraft manufactured by Boeing which is delivered to the Insured pursuant to the applicable purchase agreement during the period of effectivity of the policies represented by this Certificate will be covered to the extent specified herein.
Insurers have agreed to the following:
A. In regard to Aircraft "all risks" Hull Insurance, Insurers have agreed to waive all rights of subrogation or recourse against Boeing to the extent Delta has waived its rights in the Aircraft General Terms Agreement AGTA/(_____) which was incorporated by reference into the applicable purchase agreement.
B. In regard to Airline Liability Insurance, Insurers have agreed:
(1) To include Boeing as an additional insured in accordance with Customer's undertaking in Article 8.2.1 of the AGTA/(____) which was incorporated by reference into the applicable purchase agreement;
(2) To provide that such insurance will be primary and not contributory or excess with respect to any other insurance available for the protection of Boeing;
(3) To provide that with respect to the interests of Boeing, such insurance shall not be invalidated or minimized by any action or inaction, omission or misrepresentation by the Insured or any other person or party (other than Boeing) regardless of any breach or violation of any warranty, declaration or condition contained in such policies; and
(4) To provide that all provisions of the insurance coverages referenced above, except the limits of liability, will operate to give each insured or additional insured the same protection as if there were a separate Policy issued to each.
*This confidential information has been omitted and filed separately with the Commission.
App. 1
AGTA-DAL
SAMPLE
INSURANCE CERTIFICATE
C. In regard to all of the above referenced policies:
(1) Boeing will not be responsible for payment, set-off or assessment of any kind or any premiums in connection with the policies, endorsements or coverages described herein;
(2) If a policy is canceled for any reason whatsoever, if any substantial change is made in the coverage which affects the interests of Boeing or if a policy is allowed to lapse for nonpayment of premium, such cancellation, change or lapse shall not be effective as to Boeing for thirty (30) days after receipt by Boeing of written notice from the Insurers, its authorized representative or Broker of such cancellation, change or lapse; and
(3) For the purposes of the Certificate, "Boeing" is defined as The Boeing Company, its divisions, subsidiaries, affiliates, the assignees of each and their respective directors, officers, employees and agents.
SUBJECT TO THE TERMS, CONDITIONS, LIMITATIONS AND EXCLUSIONS OF THE RELATIVE POLICIES.
(signature)
(typed name)
(title)
App. 1
AGTA-DAL
SAMPLE
PURCHASE AGREEMENT ASSIGNMENT
THIS PURCHASE AGREEMENT ASSIGNMENT (Assignment) dated as of ________ 19__ between Delta Air Lines Inc., a company organized under the laws of ________________ (Assignor) and ________________________, a company organized under the laws of ________________ (Assignee). Capitalized terms used herein without definition will have the same meaning as in the Boeing Purchase Agreement.
Assignor and The Boeing Company, a Delaware corporation (Boeing), are parties to the Boeing Purchase Agreement, providing, among other things, for the sale by Boeing to Assignor of certain aircraft, engines and related equipment, including the Aircraft.
Assignee desires to acquire the Aircraft and certain rights and interests under the Boeing Purchase Agreement and Assignor on the following terms and conditions, desires to assign to Assignee certain of Assignor's rights and interests under the Boeing Purchase Agreement and Assignee desires to accept such assignment.
Assignor and Assignee agree as follows:
1. In this Assignment, the following terms have the following meanings:
Aircraft -- one Boeing Model ______ aircraft, bearing manufacturer's serial number _______, together with all engines and parts installed on such aircraft on the Delivery Date.
Boeing -- Boeing shall include Boeing Sales Corporation (a wholly-owned subsidiary of Boeing), a Guam corporation, and its successors and assigns.
Boeing Purchase Agreement -- Purchase Agreement No. ________ dated as of ____________ between Boeing and Assignor, as amended, but excluding ______________; providing, among other things, for the sale by Boeing to Assignor of the Aircraft, as said agreement may be further amended to the extent permitted by its terms. The Purchase Agreement incorporated by reference Aircraft General Terms Agreement AGTA/____ (AGTA).
Delivery Date -- the date on which the Aircraft is delivered by Boeing to Assignee pursuant to and subject to the terms and conditions of the Boeing Purchase Agreement and this Assignment.
2. Assignor does hereby assign to Assignee all of its rights and interests in and to the Boeing Purchase Agreement, as and to the extent that the same relate to the Aircraft and the purchase and operation thereof (except as and to the extent expressly reserved below), including, without limitation: [TO BE COMPLETED BY THE PARTIES.]
App. 2
AGTA-DAL
SAMPLE
PURCHASE AGREEMENT ASSIGNMENT
{EXAMPLES
(a) the right upon valid tender to purchase the Aircraft pursuant to the Boeing Purchase Agreement subject to the terms and conditions thereof, the right to take title to the Aircraft and the right to be named the "Buyer" in the bill of sale for the Aircraft;
(b) the right to accept delivery of the Aircraft;
(c) all claims for damages arising as a result of any default under the Boeing Purchase Agreement in respect of the Aircraft;
(d) all warranty and indemnity provisions contained in the Boeing Purchase Agreement, and all claims arising thereunder, in respect of the Aircraft; and
(e) any and all rights of Assignor to compel performance of the terms of the Boeing Purchase Agreement in respect of the Aircraft.}
However, Assignor exclusively reserves:
{EXAMPLES
(i) all Assignor's rights and interests in and to the Boeing Purchase Agreement as and to the extent the same relates to aircraft other than the Aircraft, or to any other matters not directly pertaining to the Aircraft;
(ii) all Assignor's rights and interests in or arising out of any advance or other payments or deposits made by Assignor in respect of the Aircraft under the Boeing Purchase Agreement and any amounts credited or to be credited or paid or to be paid by Boeing in respect of the Aircraft;
(iii) the right to obtain services, training, information and demonstration and test flights pursuant to the Boeing Purchase Agreement; and
(iv) the right to maintain plant representatives at Boeing's plant pursuant to the Boeing Purchase Agreement.}
Assignee hereby accepts such assignment.
3. Notwithstanding the foregoing, so long as no event of default or termination under [specify document] has occurred and is continuing, Assignee hereby authorizes Assignor, to the exclusion of Assignee, to exercise in Assignor's name all rights and powers of Customer under the Boeing Purchase Agreement in respect of the Aircraft.
App. 2
AGTA-DAL
SAMPLE
PURCHASE AGREEMENT ASSIGNMENT
4. For all purposes of this Assignment, Boeing will not be deemed to have knowledge of or need to recognize the occurrence, continuance or discontinuance of any event of default or termination under [specify document] unless and until Boeing receives from Assignee written notice thereof, addressed to its Vice President - Contracts, Boeing Commercial Airplane Group at P.O. Box 3707, Seattle, Washington 98124, if by mail, or to 32-9430 Answerback BOEINGREN RNTN, if by telex. Until such notice has been given, Boeing will be entitled to deal solely and exclusively with Assignor. Thereafter, until Assignee has provided Boeing written notice that any such events no longer continue, Boeing will be entitled to deal solely and exclusively with Assignee. Boeing may conclusively rely on any such notice.
5. Notwithstanding anything herein contained to the contrary, it is expressly agreed that: (a) prior to the Delivery Date Assignor will perform its obligations with respect to the Aircraft to be performed by it on or before such delivery, (b) Assignor will at all times remain liable to Boeing under the Boeing Purchase Agreement to perform all obligations of Customer thereunder to the same extent as if this Assignment had not been executed, and (c) the exercise by Assignee of any of the assigned rights will not release Assignor from any of its obligations to Boeing under the Boeing Purchase Agreement, except to the extent that such exercise constitutes performance of such obligations.
6. Notwithstanding anything herein to the contrary (but without in any way releasing Assignor from any of its obligations under the Boeing Purchase Agreement), Assignee confirms for the benefit of Boeing that, insofar as the provisions of the Boeing Purchase Agreement relate to the Aircraft, in exercising any rights under the Boeing Purchase Agreement, or in making any claim with respect to the Aircraft or other things (including, without limitation, Material, training and services) delivered or to be delivered pursuant to the Boeing Purchase Agreement, the terms and conditions of the Boeing Purchase Agreement, including, without limitation, the DISCLAIMER AND RELEASE and EXCLUSION OF CONSEQUENTIAL AND OTHER DAMAGES in Article 12 of Part 2 of Exhibit C to the Aircraft General Terms Agreement which were incorporated by reference into the Boeing Purchase Agreement and the insurance provisions in Article 8.2 of the Aircraft General Terms Agreement which were incorporated by reference into the Boeing Purchase Agreement, will apply to and be binding on Assignee to the same extent as if Assignee had been the original "Customer" thereunder. Assignee further agrees, expressly for the benefit of Boeing, upon written request of Boeing, promptly to execute and deliver such further assurances and documents and take such further action as Boeing may reasonably request in order to obtain the full benefits of Assignee's agreements in this paragraph.
7. Nothing contained herein will subject Boeing to any liability to which it would not otherwise be subject under the Boeing Purchase Agreement, modify in any respect the contract rights of Boeing thereunder or require Boeing to divest itself of title to or possession of the Aircraft or other things until delivery thereof and payment therefor as provided therein.
App. 2
AGTA-DAL
SAMPLE
PURCHASE AGREEMENT ASSIGNMENT
8. Notwithstanding anything herein to the contrary, after receipt of notice of any event of default or termination under [specify document], Boeing will continue to owe Assignor moneys in payment of claims made or obligations arising before such notice, which moneys may be subject to rights of set-off available to Boeing under applicable law. Similarly, after receipt of notice that such event of default or termination no longer continues, Boeing will continue to owe Assignee moneys in payment of claims made or obligations arising before such notice, which moneys may be subject to rights of set-off available to Boeing under applicable law.
9. Effective at any time after an event of default has occurred, and for so long as such event of default is continuing, Assignor does hereby constitute Assignee as Assignor's true and lawful attorney, irrevocably, with full power (in the name of Assignor or otherwise) to ask, require, demand, receive and give acquittance for any and all moneys and claims for moneys due and to become due under or arising out of the Boeing Purchase Agreement in respect of the Aircraft, to the extent assigned by this Assignment.
10. Assignee agrees expressly for the benefit of Boeing and Assignor
that it will not disclose, directly or indirectly, any terms of the Boeing
Purchase Agreement; provided, that Assignee may disclose any such information
(a) to its special counsel and public accountants, (b) as required by applicable
law to be disclosed or to the extent that Assignee may have received a subpoena
or other written demand under color of legal right for such information, but it
will first, as soon as practicable upon receipt of such requirement or demand,
furnish an explanation of the basis thereof to Boeing, and will afford Boeing
reasonable opportunity to obtain a protective order or other reasonably
satisfactory assurance of confidential treatment for the information required to
be disclosed, and (c) to any bona fide potential purchaser or lessee of the
Aircraft. Any disclosure pursuant to (a) and (c) above will be subject to
execution of a confidentiality agreement substantially similar to this paragraph
10.
11. This Assignment may be executed by the parties in separate counterparts, each of which when so executed and delivered will be an original, but all such counterparts will together constitute but one and the same instrument.
App. 2
AGTA-DAL
SAMPLE
PURCHASE AGREEMENT ASSIGNMENT
12. This Assignment will be governed by, and construed in accordance with, the laws of [_________________].
-------------------------- -------------------------- as Assignor as Assignee By _______________________ By _______________________ Name: Name: |
Title: Title:
[If the Assignment is further assigned by Assignee in connection with a financing, the following language needs to be included.]
Attest:
The undersigned, as [Indenture Trustee/Agent for the benefit of the Loan Participants/Mortgagee] and as assignee of, and holder of a security interest in, the estate, right and interest of the Assignee in and to the foregoing Purchase Agreement Assignment and the Purchase Agreement pursuant to the terms of a certain [Trust Indenture/Mortgage] dated as of _____________, agrees to the terms of the foregoing Purchase Agreement Assignment and agrees that its rights and remedies under such [Trust Indenture/Mortgage] shall be subject to the terms and conditions of the foregoing Purchase Agreement Assignment, including, without limitation, paragraph 6.
[Name of Entity],
as Indenture Trustee/Agent
By:____________________________
Name:
Title:
App. 2
AGTA-DAL
SAMPLE
PURCHASE AGREEMENT ASSIGNMENT
CONSENT AND AGREEMENT OF
THE BOEING COMPANY
THE BOEING COMPANY, a Delaware corporation (Boeing), hereby acknowledges notice of and consents to the foregoing Purchase Agreement Assignment (Assignment). Boeing confirms to Assignee that: all representations, warranties, indemnities and agreements of Boeing under the Boeing Purchase Agreement with respect to the Aircraft will, subject to the terms and conditions thereof and of the Assignment, inure to the benefit of Assignee to the same extent as if Assignee were originally named "Customer" therein.
This Consent and Agreement will be governed by, and construed in accordance with, the law of the State of Washington, excluding the conflict of laws principles thereof.
Dated as of ____________________, 199___.
THE BOEING COMPANY
By ________________________
Name:
Title: Attorney-in-Fact
Aircraft Manufacturer's Serial Number(s) ____________
App. 2
AGTA-DAL
SAMPLE
POST-DELIVERY SALE NOTICE
Boeing Commercial Airplane Group
P.O. Box 3707
Seattle, Washington 98124-2207
Attention: Vice President - Contracts Mail Stop 75-38
Ladies and Gentlemen:
In connection with the sale by Delta Air Lines Inc. (Seller) to ________________ (Purchaser) of the aircraft identified below, reference is made to Purchase Agreement No. _____ dated as of ___________, 19__, between The Boeing Company (Boeing) and Seller (the Purchase Agreement) under which Seller purchased certain Boeing Model ________ aircraft, including the aircraft bearing Manufacturer's Serial No.(s) ______________________ (the Aircraft). The Purchase Agreement incorporated by reference Aircraft General Terms Agreement AGTA/Delta Air Lines Inc. (AGTA).
Capitalized terms used herein without definition will have the same meaning as in the Purchase Agreement.
Seller has sold the Aircraft, including in that sale the transfer to Purchaser of all remaining rights related to the Aircraft under the Purchase Agreement. To accomplish this transfer of rights, as authorized by the provisions of the Purchase Agreement:
(1) Purchaser acknowledges it has reviewed the Purchase Agreement and agrees to be bound by and comply with all applicable terms and conditions of the Purchase Agreement, including, without limitation, the DISCLAIMER AND RELEASE and EXCLUSION OF CONSEQUENTIAL AND OTHER DAMAGES in Article 12 of Part 2 of Exhibit C to the AGTA and the insurance provisions in Article 8.2 of the AGTA. Purchaser further agrees, upon the written request of Boeing, promptly to execute and deliver such further assurances and documents and take such further action as Boeing may reasonably request in order to obtain the full benefits of Purchaser's agreements in this paragraph; and
(2) Seller will remain responsible for any payments due Boeing as a result of obligations relating to the Aircraft incurred by Seller to Boeing prior to the effective date of this letter.
App. 3
AGTA-DAL
SAMPLE
POST-DELIVERY SALE NOTICE
We request that Boeing acknowledge receipt of this letter and confirm the transfer of rights set forth above by signing the acknowledgment and forwarding one copy of this letter containing its acknowledgment to each of the undersigned.
Very truly yours,
Seller Purchaser
By By
------------------------------- --------------------------
Its Its
------------------------------ -------------------------
Dated Dated
------------------------------ -------------------------
|
Receipt of the above letter is acknowledged and transfer of rights under the Purchase Agreement with respect to the Aircraft is confirmed, effective as of this date.
THE BOEING COMPANY
App. 3
AGTA-DAL
SAMPLE
POST-DELIVERY LEASE NOTICE
Boeing Commercial Airplane Group
P.O. Box 3707
Seattle, Washington 98124-2207
Attention: Vice President - Contracts Mail Stop 75-38
Ladies and Gentlemen:
In connection with the lease by Delta Air Lines Inc. (Lessor) to ___________ (Lessee) of the aircraft identified below, reference is made to Purchase Agreement No. ____ dated as of ________, 19__, between The Boeing Company (Boeing) and Lessor (the Purchase Agreement) under which Lessor purchased certain Boeing Model _______ aircraft, including the aircraft bearing Manufacturer's Serial No.(s) ___________________ (the Aircraft). The Purchase Agreement incorporated by reference Aircraft General Terms Agreement AGTA-DAL (AGTA).
Capitalized terms used herein without definition will have the same meaning as in the Purchase Agreement.
Lessor has leased the Aircraft, including in that lease the transfer to Lessee of all remaining possessory rights related to the Aircraft under the Purchase Agreement. To accomplish this transfer of possessory rights, as authorized by the provisions of the Purchase Agreement:
(1) Lessor authorizes Lessee to exercise, to the exclusion of Lessor, all rights and powers of Lessor with respect to the remaining possessory rights related to the Aircraft under the Purchase Agreement. This authorization will continue until Boeing receives written notice from Lessor to the contrary, addressed to Vice President - Contracts, Mail Stop 75-38, Boeing Commercial Airplane Group, P.O. Box 3707, Seattle, Washington 98124-2207. Until Boeing receives such notice, Boeing is entitled to deal exclusively with Lessee with respect to the Aircraft under the Purchase Agreement. With respect to the rights and obligations of Lessor under the Purchase Agreement, all actions taken or agreements entered into by Lessee during the period prior to Boeing's receipt of this notice are final and binding on Lessor. Further, any payments made by Boeing as a result of claims made by Lessee will be made to the credit of Lessee.
(2) Lessee accepts the authorization above, acknowledges it has reviewed the Purchase Agreement and agrees to be bound by and comply with all applicable terms and conditions of the Purchase Agreement including, without limitation, the DISCLAIMER AND RELEASE and EXCLUSION OF CONSEQUENTIAL AND OTHER DAMAGES in Article 12 of Part 2 of Exhibit C AGTA and the insurance provisions in Article 8.2 of the AGTA. Lessee further agrees, upon the written request of Boeing, promptly to
App. 4
AGTA-DAL
SAMPLE
POST-DELIVERY LEASE NOTICE
execute and deliver such further assurances and documents and take such further action as Boeing may reasonably request in order to obtain the full benefits of Lessee's agreements in this paragraph.
(3) Lessor will remain responsible for any payments due Boeing as a result of obligations relating to the Aircraft incurred by Lessor to Boeing prior to the effective date of this Notice.
We request that Boeing acknowledge receipt of this letter and confirm the transfer of rights set forth above by signing the acknowledgment and forwarding one copy of this letter containing its acknowledgment to each of the undersigned.
Very truly yours,
Lessor Lessee
By By
------------------------------- --------------------------
Its Its
------------------------------ -------------------------
Dated Dated
---------------------------- ----------------------
|
Receipt of the above letter is acknowledged and transfer of rights under the Purchase Agreement with respect to the Aircraft is confirmed, effective as of this date.
THE BOEING COMPANY
App. 4
AGTA-DAL
SAMPLE
PURCHASER'S/LESSEE'S AGREEMENT
Boeing Commercial Airplane Group
P. O. Box 3707
Seattle, Washington 98124-2207
Attention Vice President - Contracts Mail Stop 75-38
Ladies and Gentlemen:
In connection with the sale/lease by Delta Air Lines Inc. (Seller/Lessor) to _______________________ (Purchaser/Lessee) of the aircraft identified below, reference is made to the following documents:
(i) Purchase Agreement No. _____ dated as of ___________, 19__, between The Boeing Company (Boeing) and Seller/Lessor (the Purchase Agreement) under which Seller/Lessor purchased certain Boeing Model ________ aircraft, including the aircraft bearing Manufacturer's Serial No.(s) ______________________ (the Aircraft); and
(ii) Aircraft Sale/Lease Agreement dated as of ___________, 19__, between Seller/Lessor and Purchaser/Lessee (the Aircraft Agreement) under which Seller/Lessor is selling/leasing the Aircraft.
Capitalized terms used herein without definition will have the same meaning as in the Aircraft Agreement.
1. Seller/Lessor has sold/leased the Aircraft under the Aircraft Agreement, including therein a form of exculpatory clause protecting Seller/Lessor from liability for loss of or damage to the aircraft, and/or related incidental or consequential damages, including without limitation loss of use, revenue or profit.
2. Disclaimer and Release; Exclusion of Liabilities
2.1 In accordance with Seller/Lessor's obligation under Article 9.5 of AGTA-DAL which was incorporated by reference into the Purchase Agreement, Purchaser/Lessee hereby agrees that:
2.2 DISCLAIMER AND RELEASE. IN CONSIDERATION OF THE SALE/LEASE OF THE AIRCRAFT, PURCHASER/LESSEE HEREBY WAIVES, RELEASES AND RENOUNCES ALL WARRANTIES, OBLIGATIONS AND LIABILITIES OF BOEING AND ALL OTHER RIGHTS, CLAIMS AND REMEDIES OF PURCHASER/LESSEE AGAINST BOEING, EXPRESS OR IMPLIED, ARISING BY LAW OR OTHERWISE, WITH RESPECT TO ANY NONCONFORMANCE OR DEFECT IN ANY AIRCRAFT, BOEING PRODUCT, MATERIALS, TRAINING,
App. 5
AGTA-DAL
SAMPLE
PURCHASER'S/LESSEE'S AGREEMENT
SERVICES OR OTHER THING PROVIDED UNDER THE AIRCRAFT AGREEMENT, INCLUDING, BUT NOT LIMITED TO:
(A) ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS;
(B) ANY IMPLIED WARRANTY ARISING FROM COURSE OF
PERFORMANCE, COURSE OF DEALING OR USAGE OF TRADE;
(C) ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY IN TORT, WHETHER OR NOT ARISING FROM THE NEGLIGENCE OF BOEING; AND
(D) ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY FOR
LOSS OF OR DAMAGE TO ANY AIRCRAFT.
2.3 EXCLUSION OF CONSEQUENTIAL AND OTHER DAMAGES. BOEING WILL HAVE NO OBLIGATION OR LIABILITY, WHETHER ARISING IN CONTRACT (INCLUDING WARRANTY), TORT, WHETHER OR NOT ARISING FROM THE NEGLIGENCE OF BOEING, OR OTHERWISE, FOR LOSS OF USE, REVENUE OR PROFIT, OR FOR ANY OTHER INCIDENTAL OR CONSEQUENTIAL DAMAGES WITH RESPECT TO ANY NONCONFORMANCE OR DEFECT IN ANY AIRCRAFT, MATERIALS, TRAINING, SERVICES OR OTHER THING PROVIDED UNDER THE AIRCRAFT AGREEMENT.
2.4 Definitions. For the purpose of this paragraph 2, "BOEING" or "Boeing" is defined as The Boeing Company, its divisions, subsidiaries, affiliates, the assignees of each, and their respective directors, officers, employees and agents.
Seller/Lessor Purchaser/Lessee
By By
------------------------------- -----------------------------
Its Its
------------------------------ -----------------------------
Dated Dated
---------------------------- --------------------------
|
App. 5
AGTA-DAL
SAMPLE
OWNER APPOINTMENT OF AGENT - WARRANTIES
Boeing Commercial Airplane Group
P.O. Box 3707
Seattle, Washington 98124-2207
Attention: Vice President - Contracts Mail Stop 75-38
Ladies and Gentlemen:
1. Reference is made to Purchase Agreement No. ____ dated as of __________, 19__, between The Boeing Company (Boeing) and Delta Air Lines Inc. (Customer) (the Purchase Agreement), under which Customer purchased certain Boeing Model ________ aircraft including the aircraft bearing Manufacturer's Serial No.(s) _____________ (the Aircraft). The Purchase Agreement incorporated by reference Aircraft General Terms Agreement AGTA-DAL (AGTA).
Capitalized terms used herein without definition will have the same meaning as in the Purchase Agreement.
To accomplish the appointment of an agent, Customer confirms:
A. Customer has appointed ____________________ as agent (Agent) to act directly with Boeing with respect to the remaining warranties under the Purchase Agreement and requests Boeing to treat Agent as Customer for the administration of claims with respect to such warranties; provided, however, Customer remains liable to Boeing to perform the obligations of Customer under the Purchase Agreement.
B. Boeing may continue to deal exclusively with Agent concerning the matters described herein unless and until Boeing receives written notice from Customer to the contrary, addressed to Vice President - Contracts, Mail Stop 75-38, Boeing Commercial Airplane Group, P.O. Box 3707, Seattle, Washington 98124-2207, U.S.A. With respect to the rights and obligations of Customer under the Purchase Agreement, all actions taken by Agent or agreements entered into by Agent during the period prior to Boeing's receipt of such notice are final and binding on Customer. Further, any payments made by Boeing as a result of claims made by Agent will be made to the credit of Agent unless otherwise specified when each claim is submitted.
C. Customer will remain responsible for any payments due Boeing as a result of obligations relating to the Aircraft incurred by Customer to Boeing prior to the effective date of this Notice.
App. 6
AGTA-DAL
SAMPLE
OWNER APPOINTMENT OF AGENT - WARRANTIES
Customer requests that Boeing acknowledge receipt of this letter and confirm the appointment of Agent as stated above by signing the acknowledgment and confirmation and forwarding one copy of this letter to Customer and another copy to Agent.
Very truly yours,
Delta Air Lines Inc.
App. 6
AGTA-DAL
SAMPLE
OWNER APPOINTMENT OF AGENT - WARRANTIES
AGENT'S AGREEMENT
Agent accepts the appointment as stated above, acknowledges it has reviewed the Purchase Agreement and agrees that, in exercising any rights or making any claims thereunder, Agent will be bound by and comply with all applicable terms and conditions of the Purchase Agreement including, without limitation, the DISCLAIMER AND RELEASE and EXCLUSION OF CONSEQUENTIAL AND OTHER DAMAGES in Article 12 of Part 2 of Exhibit C to the AGTA. Agent further agrees, upon the written request of Boeing, promptly to execute and deliver such further assurances and documents and take such further action as Boeing may reasonably request in order to obtain the full benefits of the warranties under the Purchase Agreement.
Very truly yours,
Agent
Receipt of the above letter is acknowledged and the appointment of Agent with respect to the above-described rights under the Purchase Agreement is confirmed, effective as of this date.
THE BOEING COMPANY
App. 6
AGTA-DAL
SAMPLE
CONTRACTOR CONFIDENTIALITY AGREEMENT
Boeing Commercial Airplane Group
P.O. Box 3707
Seattle, Washington 98124-2207
Attention: Vice President - Contracts Mail Stop 75-38
Ladies and Gentlemen:
This Agreement is entered into between ____________________ (Contractor) and Delta Air Lines Inc. (Customer) and will be effective as of the date stated below.
In connection with Customer's provision to Contractor of certain Materials, Proprietary Materials and Proprietary Information, reference is made to Purchase Agreement No. _____ dated as of _______ , 19___ between The Boeing Company (Boeing) and Customer.
Capitalized terms used herein without definition will have the same meaning as in the Purchase Agreement.
Boeing has agreed to permit Customer to make certain Materials, Proprietary Materials and Proprietary Information relating to Customer's Boeing Model ________ aircraft, Manufacturer's Serial Number ______, Registration No. ________ (the Aircraft) available to Contractor in connection with Customer's contract with Contractor (the Contract) to maintain/repair/modify the Aircraft. As a condition of receiving the Proprietary Materials and Proprietary Information, Contractor agrees as follows:
1. For purposes of this Agreement:
"AIRCRAFT SOFTWARE" means software that is installed and used in the operation of an Aircraft.
"MATERIALS" are defined as any and all items created by Boeing or a Third Party, and provided directly or indirectly from Boeing and serve primarily to contain, convey or embody information. Materials may include either tangible embodiments (for example, documents or drawings), or intangible embodiments (for example, software and other electronic forms) of information but do not include Aircraft Software.
"PROPRIETARY INFORMATION" means any and all proprietary, confidential and/or trade secret information owned by Boeing or a Third Party which is contained, conveyed or embodied in Proprietary Materials.
"PROPRIETARY MATERIALS" means Materials that contain, convey or embody Proprietary Information.
App. 7
AGTA-DAL
SAMPLE
CONTRACTOR CONFIDENTIALITY AGREEMENT
"THIRD PARTY" means anyone other than Boeing, Customer or Contractor.
2. Boeing has authorized Customer to grant to Contractor a worldwide, non-exclusive, personal and nontransferable license to use Proprietary Materials and Proprietary Information owned by Boeing, internally in connection with performance of the Contract or as may otherwise be authorized by Boeing in writing. Contractor will keep confidential and protect from disclosure to any person, entity or government agency, including any person or entity affiliated with Contractor, all Proprietary Materials and Proprietary Information. Individual copies of all Materials are provided to Contractor subject to copyrights therein, and all such copyrights are retained by Boeing or, in some cases, by Third Parties. Contractor is authorized to make copies of Materials (except for Materials bearing the copyright legend of a Third Party); provided, however, Contractor preserves the restrictive legends and proprietary notices on all copies. All copies of Proprietary Materials will belong to Boeing and be treated as Proprietary Materials under this Agreement.
3. Contractor specifically agrees not to use Proprietary Materials or Proprietary Information in connection with the manufacture or sale of any part or design. Unless otherwise agreed with Boeing in writing, Proprietary Materials and Proprietary Information may be used by Contractor only for work on the Aircraft for which such Proprietary Materials have been specified by Boeing. Customer and Contractor recognize and agree that they are responsible for ascertaining and ensuring that all Materials are appropriate for the use to which they are put.
4. Contractor will not attempt to gain access to information by reverse engineering, decompiling or disassembling any portion of any software provided to Contractor pursuant to this Agreement.
5. Upon Boeing's request at any time, Contractor will promptly return to Boeing (or, at Boeing's option, destroy) all Proprietary Materials, together with all copies thereof and will certify to Boeing that all such Proprietary Materials and copies have been so returned (or destroyed).
6. To the extent required by a government regulatory agency having jurisdiction over Contractor, Customer or the Aircraft, Contractor is authorized to provide Proprietary Materials and disclose Proprietary Information to the agency for the agency's use in connection with Contractor's authorized use of such Proprietary Materials and/or Proprietary Information for Contractor's maintenance, repair or modification of the Aircraft. Contractor agrees to take reasonable steps to prevent such agency from making any distribution, disclosure or additional use of the Proprietary Materials and Proprietary Information so provided or disclosed. Contractor further agrees promptly to notify Boeing upon learning of any (i) distribution, disclosure or additional use by such agency, (ii) request to such agency for distribution, disclosure or additional use, or (iii) intention
App. 7
AGTA-DAL
SAMPLE
CONTRACTOR CONFIDENTIALITY AGREEMENT
on the part of such agency to distribute, disclose, or make additional use of the Proprietary Materials or Proprietary Information.
7. Boeing is a third-party beneficiary under this Agreement, and Boeing may enforce any and all of the provisions of the Agreement directly against Contractor. Contractor hereby submits to the jurisdiction of the Washington state courts and the United States District Court for the Western District of Washington with regard to any claims Boeing may make under this Agreement. It is agreed that Washington law (excluding Washington's conflict-of-law principles) governs this Agreement.
8. No disclosure or physical transfer by Boeing or Customer to Contractor of any Proprietary Materials or Proprietary Information covered by this Agreement will be construed as granting a license, other than as expressly set forth in this Agreement, or any ownership right in any patent, patent application, copyright or proprietary information.
9. The provisions of this Agreement will apply notwithstanding any markings or legends, or the absence thereof, on any Proprietary Materials.
10. This Agreement is the entire agreement of the parties regarding the ownership and treatment of Proprietary Materials and Proprietary Information, and no modification of this Agreement will be effective as against Boeing unless in writing signed by authorized representatives of Contractor, Customer and Boeing.
11. Failure by either party to enforce any of the provisions of this Agreement will not be construed as a waiver of such provisions. If any of the provisions of this Agreement is held unlawful or otherwise ineffective by a court of competent jurisdiction, the remainder of this Agreement will remain in full force.
ACCEPTED AND AGREED TO this
Date: _____________________, 19___
CONTRACTOR CUSTOMER ------------------------------ ------------------------------ By: __________________________ By: __________________________ Its: _________________________ Its: _________________________ |
App. 7
AGTA-DAL
SAMPLE
Notice of Option Exercise
[ date ]
Notice Of Option Exercise
Mrs./Ms./Mr.
Regional Director - Aircraft Contracts
Boeing Commercial Airplane Group
Seattle, Washington 98124
Fax Number 206-237-1706
Subject: Exercise of Option for Boeing Model XXX-XXX
Reference: Purchase Agreement No. XXXX
In accordance with the terms of XXXXXXXXXXXXX of Purchase Agreement XXXX, Delta Air Lines hereby notifies Boeing that it exercises its option to purchase XXXX (Qty) model XXX-XXX Option Aircraft for delivery as follows:
Scheduled Delivery Aircraft Quantity ------------------ ----------------- |
Delta Air Lines has selected the Advance Payment Schedule as described in XXXXXX of the AGTA, which was incorporated by reference into the Purchase Agreement, and, concurrently with this notification has wire transferred $X,XXX,XXX in advance payments for the Option Aircraft due Boeing.
App. 8
AGTA-DAL
SAMPLE
Notice of Option Exercise
Within 30 days of Boeing's receipt of Delta Air Line's notification of its exercise of such option, Boeing will provide to Delta Air Lines a revised Table 1 to Purchase Agreement No. XXXX, revised Performance Guarantees (if applicable), and an accounting of any refund of any Advance Payments due Delta Air Lines or additional Advance Payments due Boeing as a result of a change in the Advance Payment Base Price. If any refund is due to Delta Air Lines, the refund will be sent by Boeing to Delta Air Lines concurrently with the revised Table 1. If additional advance payments are due Boeing, Delta Air Lines will wire transfer such additional advance payments within 5 days of receipt of the revised Table 1 to Purchase Agreement No. XXXX.
(signature)
(typed name)
(title of Delta Air Lines Officer)
App. 8
AGTA-DAL
SAMPLE
*This confidential information
has been omitted and filed
separately with the Commission.
App. 9
AGTA-DAL
SAMPLE
*This confidential information
has been omitted and filed
separately with the Commission.
App. 9
AGTA-DAL
EXHIBIT 11
DELTA AIR LINES
STATEMENT REGARDING COMPUTATION OF PER SHARE EARNINGS
FOR THE THREE MONTHS ENDED DECEMBER 31, 1997 AND 1996
(In Millions, except per share data)
1997 1996
------- -------
BASIC:
Net income $ 190 $ 125
Preferred stock dividends (3) (2)
------- -------
Income available to common
shareholders $ 187 $ 123
======= =======
Weighted average shares outstanding 74.2 73.9
======= =======
Basic income per common share $ 2.52 $ 1.66
======= =======
DILUTED:
Net income $ 190 $ 125
Adjustment to net income
assuming conversion of Series B ESOP
convertible preferred stock (1) (1)
------- -------
Income available to
common shareholders $ 189 $ 124
Weighted average shares outstanding 74.2 73.9
Additional shares assuming:
Conversion of Series B ESOP
convertible preferred stock 2.1 1.9
Exercise of stock options 2.3 0.3
------- -------
Average shares outstanding as adjusted 78.6 76.1
======= =======
Diluted income per common share $ 2.40 $ 1.63
======= =======
|
DELTA AIR LINES
STATEMENT REGARDING COMPUTATION OF PER SHARE EARNINGS
FOR THE SIX MONTHS ENDED DECEMBER 31, 1997 AND 1996
(In Millions, except per share data)
1997 1996
------- -------
BASIC:
Net income $ 443 $ 363
Preferred stock dividends (5) (4)
------- -------
Income available to common
shareholders $ 438 $ 359
======= =======
Weighted average shares outstanding 74.0 75.1
======= =======
Basic income per common share $ 5.92 $ 4.77
======= =======
DILUTED:
Net income $ 443 $ 363
Adjustment to net income
assuming conversion of Series B ESOP
convertible preferred stock (2) (2)
------- -------
Income available to
common shareholders $ 441 $ 361
======= =======
Weighted average shares outstanding 74.0 75.1
Additional shares assuming:
Conversion of Series C convertible
preferred stock -- 0.5
Conversion of Series B ESOP
convertible preferred stock 2.1 1.9
Exercise of stock options 1.7 0.2
------- -------
Average shares outstanding as adjusted 77.8 77.7
======= =======
Diluted income per common share $ 5.67 $ 4.64
======= =======
|
EXHIBIT 12
DELTA AIR LINES, INC.
STATEMENT REGARDING COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(In Millions, except ratios)
-------------------------------------------------------------------------------------------------------------------
Six Months Six Months
Ended Ended
December 31, December 31,
1997 1996
------------ ------------
Earnings :
Earnings before income taxes $ 730 $ 603
Add (deduct):
Fixed charges 335 261
Interest capitalized (18) (16)
------- -----
Earnings as adjusted $ 1,047 $ 848
======= =====
Fixed charges:
Interest expense $ 99 $ 106
Portion of rental expense representative
of the interest factor 236 155
------- -----
Total fixed charges $ 335 $ 261
======= =====
Ratio of earnings to fixed charges 3.13 3.25
-----
|
ARTHUR ANDERSEN LLP
EXHIBIT 15
To Delta Air Lines, Inc.:
We are aware that Delta Air Lines, Inc. has incorporated by reference in its Registration Statement Nos. 2-94541, 33-30454, 33-50175, 33-52045, 33-65391 and 333-16471 its Form 10-Q for the quarter ended December 31, 1997, which includes our report dated January 30, 1998 covering the unaudited interim financial information contained therein. Pursuant to Regulation C of the Securities Act of 1933 (the "Act"), that report is not considered a part of the Registration Statements prepared or certified by our firm or a report prepared or certified by our firm within the meaning of Sections 7 and 11 of the Act.
Atlanta, Georgia
January 30, 1998
| ARTICLE 5 |
| THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM DELTA AIR LINES, INC. FORM 10-Q FOR THE QUARTER ENDED DECEMBER 31, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE RELATED FINANCIAL STATEMENTS. |
| MULTIPLIER: 1,000,000 |
| PERIOD TYPE | 6 MOS |
| FISCAL YEAR END | JUN 30 1998 |
| PERIOD START | JUL 01 1997 |
| PERIOD END | DEC 31 1997 |
| CASH | 850 |
| SECURITIES | 503 |
| RECEIVABLES | 811 |
| ALLOWANCES | 53 |
| INVENTORY | 90 |
| CURRENT ASSETS | 2,867 |
| PP&E | 14,364 |
| DEPRECIATION | 5,784 |
| TOTAL ASSETS | 13,137 |
| CURRENT LIABILITIES | 4,105 |
| BONDS | 2,045 |
| PREFERRED MANDATORY | 0 |
| PREFERRED | 0 |
| COMMON | 259 |
| OTHER SE | 3,148 |
| TOTAL LIABILITY AND EQUITY | 13,137 |
| SALES | 0 |
| TOTAL REVENUES | 6,985 |
| CGS | 0 |
| TOTAL COSTS | 6,222 |
| OTHER EXPENSES | (66) |
| LOSS PROVISION | 11 |
| INTEREST EXPENSE | 99 |
| INCOME PRETAX | 730 |
| INCOME TAX | 287 |
| INCOME CONTINUING | 443 |
| DISCONTINUED | 0 |
| EXTRAORDINARY | 0 |
| CHANGES | 0 |
| NET INCOME | 443 |
| EPS PRIMARY | 5.92 |
| EPS DILUTED | 5.67 |