<PAGE> 1
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
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months, and (2) has been subject to such filing requirements
for the past 90 days. Yes X No
--- ---
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
<PAGE> 2
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
- ----------------------------
DELTA AIR LINES, INC.
Consolidated Balance Sheets
(In Millions)
<TABLE>
<CAPTION>
December 31 June 30
ASSETS 1997 1997
- ------------------------------------------------------------------------------------------------
(Unaudited)
<S> <C> <C>
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
========= =======
</TABLE>
The accompanying notes are an integral part of these consolidated balance
sheets.
2
<PAGE> 3
DELTA AIR LINES, INC.
Consolidated Balance Sheets
(In Millions)
<TABLE>
<CAPTION>
December 31 June 30
LIABILITIES AND SHAREHOLDERS' EQUITY 1997 1997
- ------------------------------------------------------------------------------------------------
(Unaudited)
<S> <C> <C>
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
-------- -------
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
-------- -------
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
======== =======
</TABLE>
The accompanying notes are an integral part of these consolidated balance
sheets.
3
<PAGE> 4
DELTA AIR LINES, INC.
Consolidated Statements of Operations
(Unaudited)
(In Millions, except Share Data)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
December 31 December 31
--------------------------- ---------------------------
1997 1996 1997 1996
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
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
=========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these consolidated statements.
4
<PAGE> 5
DELTA AIR LINES, INC.
Statistical Summary
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
December 31 December 31
--------------------------- ---------------------------
Statistical Summary: 1997 1996 1997 1996
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
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
</TABLE>
5
<PAGE> 6
DELTA AIR LINES, INC.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In Millions)
<TABLE>
<CAPTION>
Six Months Ended
December 31
-------------------
1997 1996
------ ------
<S> <C> <C>
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
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
statements.
6
<PAGE> 7
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.
7
<PAGE> 8
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:
<TABLE>
<CAPTION>
Current Fleet
----------------------
Rolling
Aircraft Type Owned Leased Total Orders Options Options
------------------- ----- ------ ----- ------ ------- -------
<S> <C> <C> <C> <C> <C> <C>
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
==== ====== ===== ====== ======= =======
</TABLE>
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
8
<PAGE> 9
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:
<TABLE>
<CAPTION>
Amounts
Years Ending June 30 (In Millions)
-------------------- -------------
<S> <C>
Remainder of fiscal year 1998 $ 630
1999 1,090
2000 810
2001 1,600
2002 300
After 2002 1,490
-------
Total $ 5,920
=======
</TABLE>
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
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<PAGE> 10
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.
<TABLE>
<CAPTION>
Balance at Balance at
September 30, 1997 Reductions December 31, 1997
------------------ ---------- -----------------
(In Millions)
<S> <C> <C> <C>
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
===== ===== =====
</TABLE>
10
<PAGE> 11
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:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
December 31 December 31
------------------ ----------------
1997 1996 1997 1996
----- ------ ----- ------
(In Millions, except per share data)
<S> <C> <C> <C> <C>
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
</TABLE>
11
<PAGE> 12
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
- ------------------------------------------------------------------------
RESULTS OF OPERATIONS
---------------------
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.
12
<PAGE> 13
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
Three Months Ended December 31, 1997 and 1996
- ---------------------------------------------
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
13
<PAGE> 14
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.
14
<PAGE> 15
Six Months Ended December 31, 1997 and 1996
- -------------------------------------------
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.
15
<PAGE> 16
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.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
- -------------------------------------------------------------------
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.
16
<PAGE> 17
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
17
<PAGE> 18
PART II. OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES
- -----------------------------
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.
ITEM 5. OTHER INFORMATION
- -------------------------
MANAGEMENT
- ----------
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.
BROAD-BASED STOCK OPTION PLANS
- ------------------------------
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.
18
<PAGE> 19
BOEING AGREEMENT
- ----------------
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.
PERSONNEL MATTERS
- -----------------
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
19
<PAGE> 20
who would have flown these aircraft. Discussions between the Company and ALPA
are continuing. The outcome of these matters cannot presently be determined.
FORWARD-LOOKING INFORMATION
- ---------------------------
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.
20
<PAGE> 21
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
- -----------------------------------------
(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
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.
21
<PAGE> 22
SIGNATURE
---------
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.
Delta Air Lines, Inc.
----------------------------------------
(Registrant)
By: /s/ Edward H. West
-------------------------------------
Edward H. West
Chief Financial Officer (Acting)
February 12, 1998
22
<PAGE> 1
EXHIBIT 3.2
DELTA AIR LINES, INC.
BY-LAWS
AS AMENDED
THROUGH
JANUARY 22, 1998
INCORPORATED
UNDER THE LAWS OF
DELAWARE
<PAGE> 2
TABLE OF CONTENTS
BY-LAWS
<TABLE>
<CAPTION>
ARTICLE SECTION SUBJECT PAGE
- ------- ------- ------- ----
<S> <C> <C> <C>
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
</TABLE>
1
<PAGE> 3
<TABLE>
<CAPTION>
ARTICLE SECTION SUBJECT PAGE
- ------- ------- ------- ----
<S> <C> <C> <C>
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
</TABLE>
2
<PAGE> 4
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
3
<PAGE> 5
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
4
<PAGE> 6
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.
5
<PAGE> 7
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.
6
<PAGE> 8
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.
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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.
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(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
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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
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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
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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
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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.
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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.
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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.
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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
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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.
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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
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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.
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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.
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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.
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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.
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(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
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(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
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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
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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.
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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
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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)
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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
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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
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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
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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
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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
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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,
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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.
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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
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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
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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).
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"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
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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
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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.
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"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.
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"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
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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.
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"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
26
<PAGE> 27
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.
27
<PAGE> 28
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
28
<PAGE> 29
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
<PAGE> 30
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
2
<PAGE> 31
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
3
<PAGE> 32
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
4
<PAGE> 33
(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.
5
<PAGE> 34
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.
6
<PAGE> 35
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.
7
<PAGE> 36
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
8
<PAGE> 37
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
9
<PAGE> 38
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
10
<PAGE> 39
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.
By:
---------------------------------
Gerald Grinstein
Chairman of the Board
KEY EMPLOYEE
------------------------------------
Leo F. Mullin
11
<PAGE> 40
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.
<PAGE> 41
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:
<TABLE>
<CAPTION>
Number of Shares with
Respect to which Option
First Becomes Exercisable Date
------------------------- ----
<S> <C>
200,000 August 14, 1998
100,000 August 14, 1999
100,000 August 14, 2000
100,000 August 14, 2001
</TABLE>
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
2
<PAGE> 42
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.
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<PAGE> 43
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.
By
--------------------------------
Gerald Grinstein, Chairman
Personnel & Compensation Committee
EMPLOYEE
----------------------------
Leo F. Mullin
4
<PAGE> 44
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,
<PAGE> 45
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
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<PAGE> 46
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.
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<PAGE> 47
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.
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<PAGE> 48
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.
By:
-------------------------------
Gerald Grinstein, Chairman
Personnel & Compensation Committee
EMPLOYEE
----------------------------------
Leo F. Mullin
5
<PAGE> 1
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
<PAGE> 2
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
2
<PAGE> 3
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
3
<PAGE> 4
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
4
<PAGE> 5
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
5
<PAGE> 6
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,
6
<PAGE> 7
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.
7
<PAGE> 8
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
8
<PAGE> 9
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.
9
<PAGE> 10
(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
10
<PAGE> 11
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
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<PAGE> 12
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
12
<PAGE> 13
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
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<PAGE> 14
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.
14
<PAGE> 15
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
15
<PAGE> 16
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.
16
<PAGE> 17
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
17
<PAGE> 18
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
18
<PAGE> 1
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
<PAGE> 2
<TABLE>
<CAPTION>
TABLE OF CONTENTS
SA
ARTICLES NUMBER
- -------- ------
<S> <C>
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
</TABLE>
*This confidential information has been omitted and filed separately with the
Commission.
i
P.A. No. 2022
<PAGE> 3
<TABLE>
<CAPTION>
SA
LETTER AGREEMENTS NUMBER
----------------- ------
<S> <C>
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
</TABLE>
*This confidential information has been omitted and filed separately with the
Commission.
ii
P.A. No. 2022
<PAGE> 4
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
<PAGE> 5
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.
2
P.A. No. 2022
<PAGE> 6
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
------------------------- --------------------
3
P.A. No. 2022
<PAGE> 7
TABLE 1 TO AGTA AND
PURCHASE AGREEMENT NO. 2022
AIRCRAFT DELIVERY, DESCRIPTION, PRICE AND ADVANCE PAYMENTS
<TABLE>
<CAPTION>
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: *
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------
* * * *
- ------------------------------------------------------------------------------------------------------
DELIVERY O NUMBER OF * * * * * * *
- ------------------------------------------------------------------------------------------------------
DATE P AIRCRAFT * * * * * * *
- ------------------------------------------------------------------------------------------------------
1998
- ------------------------------------------------------------------------------------------------------
* * * * * * * * *
- ------------------------------------------------------------------------------------------------------
* * * * * * * * *
- ------------------------------------------------------------------------------------------------------
* * * * * * * * *
- ------------------------------------------------------------------------------------------------------
* * * * * * * * *
- ------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------
1999
- ------------------------------------------------------------------------------------------------------
* * * * * * * * *
- ------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------
2001
- ------------------------------------------------------------------------------------------------------
* * * * * * * * *
- ------------------------------------------------------------------------------------------------------
* * * * * * * * *
- ------------------------------------------------------------------------------------------------------
* * * * * * * * *
- ------------------------------------------------------------------------------------------------------
</TABLE>
*This confidential information has been omitted and filed separately with the
Commission.
Page 1
P.A. No. 2022
<PAGE> 8
TABLE 1 TO AGTA AND
PURCHASE AGREEMENT NO. 2022
AIRCRAFT DELIVERY, DESCRIPTION, PRICE AND ADVANCE PAYMENTS
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------
* * * *
- -----------------------------------------------------------------------------------------------------------------------
DELIVERY O NUMBER OF * * * * * * *
- -----------------------------------------------------------------------------------------------------------------------
DATE P AIRCRAFT * * * * * * *
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
2002
- -----------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- -----------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- -----------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- -----------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- -----------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- -----------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- -----------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- -----------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- -----------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- -----------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
2003
- -----------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- -----------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- -----------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- -----------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- -----------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- -----------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- -----------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
2004
- -----------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- -----------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
*This confidential information has been omitted and filed separately with the
Commission.
Page 2
P.A. No. 2022
<PAGE> 9
TABLE 1 TO AGTA AND
PURCHASE AGREEMENT NO. 2022
AIRCRAFT DELIVERY, DESCRIPTION, PRICE AND ADVANCE PAYMENTS
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------------
* * * *
- ---------------------------------------------------------------------------------------------------------------------------------
DELIVERY O NUMBER OF * * * * * * *
- ---------------------------------------------------------------------------------------------------------------------------------
DATE P AIRCRAFT * * * * * * *
- ---------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- ---------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- ---------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- ---------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- ---------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- ---------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- ---------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
2005
- ---------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- ---------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- ---------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- ---------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- ---------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- ---------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- ---------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
2006
- ---------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- ---------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- ---------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- ---------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- ---------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
*This confidential information has been omitted and filed separately with the
Commission.
Page 3
P.A. No. 2022
<PAGE> 10
TABLE 1 TO AGTA AND
PURCHASE AGREEMENT NO. 2022
AIRCRAFT DELIVERY, DESCRIPTION, PRICE AND ADVANCE PAYMENTS
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------------------
* * * *
- ----------------------------------------------------------------------------------------------------------------------------------
DELIVERY O NUMBER OF * * * * * * *
- ----------------------------------------------------------------------------------------------------------------------------------
DATE P AIRCRAFT * * * * * * *
- ----------------------------------------------------------------------------------------------------------------------------------
ANNUAL
- ----------------------------------------------------------------------------------------------------------------------------------
1998 * * * * * * * *
- ----------------------------------------------------------------------------------------------------------------------------------
1999 * * * * * * * *
- ----------------------------------------------------------------------------------------------------------------------------------
2001 * * * * * * * *
- ----------------------------------------------------------------------------------------------------------------------------------
2002 * * * * * * * *
- ----------------------------------------------------------------------------------------------------------------------------------
2003 * * * * * * * *
- ----------------------------------------------------------------------------------------------------------------------------------
2004 * * * * * * * *
- ----------------------------------------------------------------------------------------------------------------------------------
2005 * * * * * * * *
- ----------------------------------------------------------------------------------------------------------------------------------
2006 * * * * * * * *
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
*This confidential information has been omitted and filed separately with the
Commission.
Page 4
P.A. No. 2022
<PAGE> 11
TABLE 2
TO
THE AGTA AND PURCHASE AGREEMENT NO. 2022
737-832 OPTION AIRCRAFT DELIVERY, DESCRIPTION, PRICE AND ADVANCE PAYMENTS
<TABLE>
<CAPTION>
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: *
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
* * * *
- -----------------------------------------------------------------------------------------------------------------------------------
DELIVERY NUMBER OF * * * * * * *
- -----------------------------------------------------------------------------------------------------------------------------------
DATE AIRCRAFT * * * * * * *
- -----------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- -----------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- -----------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- -----------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- -----------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- -----------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- -----------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- -----------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- -----------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- -----------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- -----------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- -----------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- -----------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
*This confidential information has been omitted and filed separately with the
Commission.
Page 1
P.A. No. 2022
<PAGE> 12
TABLE 2
TO
THE AGTA AND PURCHASE AGREEMENT NO. 2022
737-832 OPTION AIRCRAFT DELIVERY, DESCRIPTION, PRICE AND ADVANCE PAYMENTS
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
* * * *
- -----------------------------------------------------------------------------------------------------------------------------------
DELIVERY NUMBER OF * * * * * * *
- -----------------------------------------------------------------------------------------------------------------------------------
DATE AIRCRAFT * * * * * * *
- -----------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- -----------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- -----------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- -----------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- -----------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- -----------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- -----------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- -----------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- -----------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- -----------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- -----------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- -----------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- -----------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- -----------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- -----------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- -----------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- -----------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- -----------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- -----------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- -----------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- -----------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- -----------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- -----------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- -----------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- -----------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
*This confidential information has been omitted and filed separately with the
Commission.
Page 2
P.A. No. 2022
<PAGE> 13
TABLE 2
THE AGTA AND PURCHASE AGREEMENT NO. 2022
737-832 OPTION AIRCRAFT DELIVERY, DESCRIPTION, PRICE AND ADVANCE PAYMENTS
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------
* * * *
- ------------------------------------------------------------------------------------------------------------------------------
DELIVERY NUMBER OF * * * * * * *
- ------------------------------------------------------------------------------------------------------------------------------
DATE AIRCRAFT * * * * * * *
- ------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- ------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- ------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- ------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- ------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- ------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- ------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- ------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- ------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- ------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- ------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
*This confidential information has been omitted and filed separately with the
Commission.
Page 3
P.A. No. 2022
<PAGE> 14
TABLE 2
TO
THE AGTA AND PURCHASE AGREEMENT NO. 2022
737-632/-732/-832 ROLLLING OPTION AIRCRAFT DELIVERY
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------
2006 2007 2008 2009 2010 2011 2012
- ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
* * * * * * *
- ----------------------------------------------------------------------------------
* * * * * * *
- ----------------------------------------------------------------------------------
* * * * * * *
- ----------------------------------------------------------------------------------
* * * * * * *
- ----------------------------------------------------------------------------------
* * * * * * *
- ----------------------------------------------------------------------------------
* * * * * * *
- ----------------------------------------------------------------------------------
* * * * * *
- ----------------------------------------------------------------------------------
* * * * * *
- ----------------------------------------------------------------------------------
* * * * * *
- ----------------------------------------------------------------------------------
* * * * * *
- ----------------------------------------------------------------------------------
* * * * * *
- ----------------------------------------------------------------------------------
* * * * * *
- ----------------------------------------------------------------------------------
- ------------------------------------------------------
2013 2014 2015 2016 2017
- ------------------------------------------------------
* * * * *
- ------------------------------------------------------
* * * * *
- ------------------------------------------------------
* * * * *
- ------------------------------------------------------
* * * * *
- ------------------------------------------------------
* * * * *
- ------------------------------------------------------
* * * * *
- ------------------------------------------------------
* * * * *
- ------------------------------------------------------
* * * * *
- ------------------------------------------------------
* * * * *
- ------------------------------------------------------
* * * * *
- ------------------------------------------------------
* * * * *
- ------------------------------------------------------
* * * * *
- ------------------------------------------------------
</TABLE>
*This confidential information has been omitted and filed separately with the
Commission.
P.A. No. 2022
<PAGE> 15
TABLE 3
TO THE AGTA AND PURCHASE AGREEMENT NO. 2022
*
AIRCRAFT DELIVERY, DESCRIPTION, PRICE AND ADVANCE PAYMENTS
<TABLE>
<CAPTION>
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: *
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------------
* * * *
- -------------------------------------------------------------------------------------------------------------------------------
DELIVERY O NUMBER OF * * * * * * *
- -------------------------------------------------------------------------------------------------------------------------------
DATE P AIRCRAFT * * * * * * *
- -------------------------------------------------------------------------------------------------------------------------------
1998
- -------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- -------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- -------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- -------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
1999
- -------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
2001
- -------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- -------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- -------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
*This confidential information has been omitted and filed separately with the
Commission.
Page 1
P.A. No. 2022
<PAGE> 16
TABLE 3
TO THE AGTA AND PURCHASE AGREEMENT NO. 2022
*
AIRCRAFT DELIVERY, DESCRIPTION, PRICE AND ADVANCE PAYMENTS
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------------
* * * *
- ---------------------------------------------------------------------------------------------------------------------------------
DELIVERY O NUMBER OF * * * * * * *
- ---------------------------------------------------------------------------------------------------------------------------------
DATE P AIRCRAFT * * * * * * *
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
2002
- ---------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- ---------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- ---------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- ---------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- ---------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- ---------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- ---------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- ---------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- ---------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- ---------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
2003
- ---------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- ---------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- ---------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- ---------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- ---------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- ---------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- ---------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
2004
- ---------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- ---------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
*This confidential information has been omitted and filed separately with the
Commission.
Page 2
P.A. No. 2022
<PAGE> 17
TABLE 3
TO THE AGTA AND PURCHASE AGREEMENT NO. 2022
*
AIRCRAFT DELIVERY, DESCRIPTION, PRICE AND ADVANCE PAYMENTS
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------------
* * * *
- -------------------------------------------------------------------------------------------------------------------------------
DELIVERY O NUMBER OF * * * * * * *
- -------------------------------------------------------------------------------------------------------------------------------
DATE P AIRCRAFT * * * * * * *
- -------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- -------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- -------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- -------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- -------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- -------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- -------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
2005
- -------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- -------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- -------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- -------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- -------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- -------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- -------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
2006
- -------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- -------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- -------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- -------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- -------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * *
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
*This confidential information has been omitted and filed separately with the
Commission.
Page 3
P.A. No. 2022
<PAGE> 18
TABLE 3
TO THE AGTA AND PURCHASE AGREEMENT NO. 2022
*
AIRCRAFT DELIVERY, DESCRIPTION, PRICE AND ADVANCE PAYMENTS
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------------
* * * *
- ---------------------------------------------------------------------------------------------------------------------------------
DELIVERY O NUMBER OF * * * * * * *
- ---------------------------------------------------------------------------------------------------------------------------------
DATE P AIRCRAFT * * * * * * *
- ---------------------------------------------------------------------------------------------------------------------------------
ANNUAL
- ---------------------------------------------------------------------------------------------------------------------------------
1998 * * * * * * * *
- ---------------------------------------------------------------------------------------------------------------------------------
1999 * * * * * * * *
- ---------------------------------------------------------------------------------------------------------------------------------
2001 * * * * * * * *
- ---------------------------------------------------------------------------------------------------------------------------------
2002 * * * * * * * *
- ---------------------------------------------------------------------------------------------------------------------------------
2003 * * * * * * * *
- ---------------------------------------------------------------------------------------------------------------------------------
2004 * * * * * * * *
- ---------------------------------------------------------------------------------------------------------------------------------
2005 * * * * * * * *
- ---------------------------------------------------------------------------------------------------------------------------------
2006 * * * * * * * *
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
*This confidential information has been omitted and filed separately with the
Commission.
Page 4
P.A. No. 2022
<PAGE> 19
AIRCRAFT CONFIGURATION
between
THE BOEING COMPANY
and
DELTA AIR LINES, INC.
Exhibit A to Purchase Agreement Number 2022
A
P.A. No. 2022
<PAGE> 20
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.
A-1
P.A. No. 2022
<PAGE> 21
EXHIBIT A TO
PURCHASE AGREEMENT NO. 2022
PAGE 2
PRICE
PER A/P
DAL3801
CR / TITLE 70 APS 95$
================================================================== ==========
*This confidential information
has been omitted and filed
separately with the Commission.
A-2
P.A. No. 2022
<PAGE> 22
EXHIBIT A TO
PURCHASE AGREEMENT NO. 2022
PAGE 3
PRICE
PER A/P
DAL3801
CR / TITLE 70 APS 95$
================================================================== ==========
*This confidential information
has been omitted and filed
separately with the Commission.
A-3
P.A. No. 2022
<PAGE> 23
EXHIBIT A TO
PURCHASE AGREEMENT NO. 2022
PAGE 4
PRICE
PER A/P
DAL3801
CR / TITLE 70 APS 95$
================================================================== ==========
*This confidential information
has been omitted and filed
separately with the Commission.
A-4
P.A. No. 2022
<PAGE> 24
EXHIBIT A TO
PURCHASE AGREEMENT NO. 2022
PAGE 5
PRICE
PER A/P
DAL3801
CR / TITLE 70 APS 95$
================================================================== ==========
*This confidential information
has been omitted and filed
separately with the Commission.
A-5
P.A. No. 2022
<PAGE> 25
EXHIBIT A TO
PURCHASE AGREEMENT NO. 2022
PAGE 6
PRICE
PER A/P
DAL3801
CR / TITLE 70 APS 95$
================================================================== ==========
*This confidential information
has been omitted and filed
separately with the Commission.
A-6
P.A. No. 2022
<PAGE> 26
EXHIBIT A TO
PURCHASE AGREEMENT NO. 2022
PAGE 7
PRICE
PER A/P
DAL3801
CR / TITLE 70 APS 95$
================================================================== ==========
*This confidential information
has been omitted and filed
separately with the Commission.
A-7
P.A. No. 2022
<PAGE> 27
EXHIBIT A TO
PURCHASE AGREEMENT NO. 2022
PAGE 8
PRICE
PER A/P
DAL3801
CR / TITLE 70 APS 95$
================================================================== ==========
*This confidential information
has been omitted and filed
separately with the Commission.
A-8
P.A. No. 2022
<PAGE> 28
EXHIBIT A TO
PURCHASE AGREEMENT NO. 2022
PAGE 9
PRICE
PER A/P
DAL3801
CR / TITLE 70 APS 95$
================================================================== ==========
*This confidential information
has been omitted and filed
separately with the Commission.
A-9
P.A. No. 2022
<PAGE> 29
EXHIBIT A TO
PURCHASE AGREEMENT NO. 2022
PAGE 10
PRICE
PER A/P
DAL3801
CR / TITLE 70 APS 95$
================================================================== ==========
*This confidential information
has been omitted and filed
separately with the Commission.
A-10
P.A. No. 2022
<PAGE> 30
EXHIBIT A TO
PURCHASE AGREEMENT NO. 2022
PAGE 11
PRICE
PER A/P
DAL3801
CR / TITLE 70 APS 95$
================================================================== ==========
*This confidential information
has been omitted and filed
separately with the Commission.
A-11
P.A. No. 2022
<PAGE> 31
EXHIBIT A TO
PURCHASE AGREEMENT NO. 2022
PAGE 12
PRICE
PER A/P
DAL3801
CR / TITLE 70 APS 95$
================================================================== ==========
*This confidential information
has been omitted and filed
separately with the Commission.
A-12
P.A. No. 2022
<PAGE> 32
EXHIBIT A TO
PURCHASE AGREEMENT NO. 2022
PAGE 13
PRICE
PER A/P
DAL3801
CR / TITLE 70 APS 95$
================================================================== ==========
*This confidential information
has been omitted and filed
separately with the Commission.
A-13
P.A. No. 2022
<PAGE> 33
EXHIBIT A TO
PURCHASE AGREEMENT NO. 2022
PAGE 14
PRICE
PER A/P
DAL3801
CR / TITLE 70 APS 95$
================================================================== ==========
*This confidential information
has been omitted and filed
separately with the Commission.
A-14
P.A. No. 2022
<PAGE> 34
EXHIBIT A TO
PURCHASE AGREEMENT NO. 2022
PAGE 15
PRICE
PER A/P
DAL3801
CR / TITLE 70 APS 95$
================================================================== ==========
*This confidential information
has been omitted and filed
separately with the Commission.
A-15
P.A. No. 2022
<PAGE> 35
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
<PAGE> 36
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
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P.A. No. 2022
<PAGE> 37
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;
Page 2
P.A. No. 2022
<PAGE> 38
(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.
Page 3
P.A. No. 2022
<PAGE> 39
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.
Page 4
P.A. No. 2022
<PAGE> 40
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;
Page 5
P.A. No. 2022
<PAGE> 41
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.
Page 6
P.A. No. 2022
<PAGE> 42
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.
Page 7
P.A. No. 2022
<PAGE> 43
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
Page 8
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<PAGE> 44
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.
Page 9
P.A. No. 2022
<PAGE> 45
ATTACHMENT A
PRELIMINARY ON-DOCK DATES
<TABLE>
<CAPTION>
Items Preliminary On-Dock Dates
- ----- -------------------------
<S> <C> <C> <C>
* *
* *
Seats * *
Galleys * *
Electronics * *
Furnishings * *
Items *
* *
* *
Seats * *
Galleys * *
Electronics * *
Furnishings * *
Items *
* *
* *
Seats * *
Galleys * *
Electronics * *
Furnishings * *
</TABLE>
*This confidential information has been omitted and filed separately with the
Commission.
Page 1
P.A. No. 2022
<PAGE> 46
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.
Page 1
P.A. No. 2022
<PAGE> 47
*This confidential information has been omitted and filed separately with the
Commission.
Page 2
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<PAGE> 48
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:
Page 1
P.A. No. 2022
<PAGE> 49
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.
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<PAGE> 50
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.
<TABLE>
<CAPTION>
Critical
Required Decision Contingency
Event Due Date Date Plan
- ----- -------- -------- ----
<S> <C> <C> <C>
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
</TABLE>
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).
Page 1
P.A. No. 2022
<PAGE> 51
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
<PAGE> 52
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
<PAGE> 53
*This confidential information
has been omitted and filed
separately with the Commission.
CS1-2
P.A. No. 2022
<PAGE> 54
*This confidential information
has been omitted and filed
separately with the Commission.
CS1-3
P.A. No. 2022
<PAGE> 55
*This confidential information
has been omitted and filed
separately with the Commission.
CS1-4
P.A. No. 2022
<PAGE> 56
*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
<PAGE> 57
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
<PAGE> 58
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
<PAGE> 59
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
<PAGE> 60
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
<PAGE> 61
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
<PAGE> 62
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
<PAGE> 63
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
<PAGE> 64
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
<PAGE> 65
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
<PAGE> 66
*
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
<PAGE> 67
*
relating to
BOEING MODEL 737-632/-732/-832
*This confidential information
has been omitted and filed
separately with the Commission.
P.A. No. 2022
<PAGE> 1
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
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
SA
ARTICLES NUMBER
- -------- ------
<S> <C> <C>
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
</TABLE>
*This confidential information has been omitted and filed separately with the
Commission.
i
P.A. No. 2025
<PAGE> 3
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.
ii
P.A. No. 2025
<PAGE> 4
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.
1
P.A. No. 2025
<PAGE> 5
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.
2
P.A. No. 2025
<PAGE> 6
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
3
P.A. No. 2025
<PAGE> 7
TABLE 1 TO
PURCHASE AGREEMENT NO. 2025
AIRCRAFT DELIVERY, DESCRIPTION, PRICE AND ADVANCE PAYMENTS
<TABLE>
<CAPTION>
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: *
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------------
* * * * *
- ---------------------------------------------------------------------------------------------------------------------------------
DELIVERY O NUMBER OF * * * * * * * *
- ---------------------------------------------------------------------------------------------------------------------------------
DATE P AIRCRAFT * * * * * * * *
- ---------------------------------------------------------------------------------------------------------------------------------
2000
- ---------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * * *
- ---------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * * *
- ---------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * * *
- ---------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * * *
- ---------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * * *
- ---------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * * *
- ---------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * * *
- ---------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * * *
- ---------------------------------------------------------------------------------------------------------------------------------
*
- ---------------------------------------------------------------------------------------------------------------------------------
2001
- ---------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * * *
- ---------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * * *
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
*This confidential information has been omitted and filed separately with the
Commission.
Page 1
<PAGE> 8
TABLE 1 TO
PURCHASE AGREEMENT NO. 2025
AIRCRAFT DELIVERY, DESCRIPTION, PRICE AND ADVANCE PAYMENTS
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------------
* * * * *
- ---------------------------------------------------------------------------------------------------------------------------------
DELIVERY O NUMBER OF * * * * * * * *
- ---------------------------------------------------------------------------------------------------------------------------------
DATE P AIRCRAFT * * * * * * * *
- ---------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * * *
- ---------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * * *
- ---------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * * *
- ---------------------------------------------------------------------------------------------------------------------------------
ANNUAL
- ---------------------------------------------------------------------------------------------------------------------------------
2000 * * * * * * * * *
- ---------------------------------------------------------------------------------------------------------------------------------
2001 * * * * * * * * *
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
*This confidential information has been omitted and filed separately with the
Commission.
Page 2
<PAGE> 9
TABLE 2
TO
THE AGTA AND PURCHASE AGREEMENT NO. 2025
767-432ER OPTION AIRCRAFT DELIVERY, DESCRIPTION, PRICE AND ADVANCE PAYMENTS
<TABLE>
<CAPTION>
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: *
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------------
* * * * *
- -------------------------------------------------------------------------------------------------------------------------------
DELIVERY NUMBER OF * * * * * * * *
- -------------------------------------------------------------------------------------------------------------------------------
DATE AIRCRAFT * * * * * * * *
- -------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * * *
- -------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * * *
- -------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * * *
- -------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * * *
- -------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * * *
- -------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * * *
- -------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * * *
- -------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * * *
- -------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * * *
- -------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * * *
- -------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * * *
- -------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * * *
- -------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * * *
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
*This confidential information has been omitted and filed separately with the
Commission.
Page 1
P.A. No. 2025
<PAGE> 10
TABLE 2
TO
THE AGTA AND PURCHASE AGREEMENT NO. 2025
767-432ER OPTION AIRCRAFT DELIVERY, DESCRIPTION, PRICE AND ADVANCE PAYMENTS
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------------
* * * * *
- --------------------------------------------------------------------------------------------------------------------------------
DELIVERY NUMBER OF * * * * * * * *
- --------------------------------------------------------------------------------------------------------------------------------
DATE AIRCRAFT * * * * * * * *
- --------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * * *
- --------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * * *
- --------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * * *
- --------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * * *
- --------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * * *
- --------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * * *
- --------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * * *
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
*This confidential information has been omitted and filed separately with the
Commission.
Page 2
P.A. No. 2025
<PAGE> 11
TABLE 2
TO
THE AGTA AND PURCHASE AGREEMENT NO. 2025
767-432ER ROLLING OPTION AIRCRAFT DELIVERY
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
- ------------------------- ------------------------ ------------------------ ------------------------- ------------------------
2005 2006 2007 2008 2009
- ------------------------- ------------------------ ------------------------ ------------------------- ------------------------
* * * * *
- ------------------------- ------------------------ ------------------------ ------------------------- ------------------------
* * * * *
- ------------------------- ------------------------ ------------------------ ------------------------- ------------------------
- ------------------------- ------------------------ ------------------------ ------------------------- ------------------------
2010 2011 2012 2013 2014
- ------------------------- ------------------------ ------------------------ ------------------------- ------------------------
* * * * *
- ------------------------- ------------------------ ------------------------ ------------------------- ------------------------
* * * * *
- ------------------------- ------------------------ ------------------------ ------------------------- ------------------------
- ------------------------- ------------------------ ------------------------ ------------------------- ------------------------
2015 2016 2017
- ------------------------- ------------------------ ------------------------
* * *
- ------------------------- ------------------------ ------------------------
* *
- ------------------------- ------------------------ ------------------------
- ------------------------- ------------------------ ------------------------
</TABLE>
*This confidential
information has been omitted
and filed separately with
the Commission.
P.A. No. 2025
<PAGE> 12
TABLE 3
TO THE AGTA PURCHASE AGREEMENT NO. 2025
*
AIRCRAFT DELIVERY, DESCRIPTION, PRICE AND ADVANCE PAYMENTS
<TABLE>
<CAPTION>
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: *
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
* * * * *
- -----------------------------------------------------------------------------------------------------------------------------------
DELIVERY O NUMBER OF * * * * * * * *
- -----------------------------------------------------------------------------------------------------------------------------------
DATE P AIRCRAFT * * * * * * * *
- -----------------------------------------------------------------------------------------------------------------------------------
2000
- -----------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * * *
- -----------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * * *
- -----------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * * *
- -----------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * * *
- -----------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * * *
- -----------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * * *
- -----------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * * *
- -----------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * * *
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
2001
- -----------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * * *
- -----------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * * *
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
*This confidential information has been omitted and filed separately with the
Commission.
Page 1
<PAGE> 13
TABLE 3
TO THE AGTA PURCHASE AGREEMENT NO. 2025
*
AIRCRAFT DELIVERY, DESCRIPTION, PRICE AND ADVANCE PAYMENTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
* * * * *
- -----------------------------------------------------------------------------------------------------------------------------------
DELIVERY O NUMBER OF * * * * * * * *
- -----------------------------------------------------------------------------------------------------------------------------------
DATE P AIRCRAFT * * * * * * * *
- -----------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * * *
- -----------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * * *
- -----------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * * *
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
ANNUAL
- -----------------------------------------------------------------------------------------------------------------------------------
2000 * * * * * * * * *
- -----------------------------------------------------------------------------------------------------------------------------------
2001 * * * * * * * * *
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
*This confidential information has been omitted and filed separately with the
Commission.
Page 2
<PAGE> 14
AIRCRAFT CONFIGURATION
between
THE BOEING COMPANY
and
DELTA AIR LINES, INC.
Exhibit A to Purchase Agreement Number 2025
A
P.A. No. 2025
<PAGE> 15
Exhibit A to
Purchase Agreement No. 2025
Page 1
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.
A-1
P.A. No. 2025
<PAGE> 16
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
<PAGE> 17
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
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<PAGE> 18
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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P.A. No. 2025
<PAGE> 19
(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
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P.A. No. 2025
<PAGE> 20
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.
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<PAGE> 21
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
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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<PAGE> 22
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.
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<PAGE> 23
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
Page 7
P.A. No. 2025
<PAGE> 24
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
Page 8
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<PAGE> 25
imputed. This indemnity will not apply with respect to any nonconformance or
defect caused solely by Boeing's installation of the CSE.
Page 9
P.A. No. 2025
<PAGE> 26
ATTACHMENT A
PRELIMINARY ON-DOCK DATES
<TABLE>
<CAPTION>
Items Preliminary On-Dock Dates
- ----- -------------------------
<S> <C> <C>
* *
* *
* *
Seats * *
Galleys * *
Electronics * *
Furnishings * *
Items *
- -----
* *
* *
* *
Seats * *
Galleys * *
Electronics * *
Furnishings * *
</TABLE>
* 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.
Page 1
P.A. No. 2025
<PAGE> 27
ATTACHMENT A
PRELIMINARY ON-DOCK DATES
CONTINUED
<TABLE>
<CAPTION>
Items Preliminary On-Dock Dates
- ----- -------------------------
<S> <C> <C>
*
Seats *
Galleys *
Electronics *
Furnishings *
</TABLE>
*This confidential information has been omitted and filed separately with the
Commission.
Page 2
P.A. No. 2025
<PAGE> 28
ATTACHMENT B
GALLEY BIDDERS LIST
TBD
Page 1
P.A. No. 2025
<PAGE> 29
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
Page 1
P.A. No. 2025
<PAGE> 30
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:
Page 1
P.A. No. 2025
<PAGE> 31
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.
Page 2
P.A. No. 2025
<PAGE> 32
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.
<TABLE>
<CAPTION>
Critical
Required Decision Contingency
Event Due Date Date Plan
- ----- -------- ---- ----
<S> <C> <C> <C>
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
</TABLE>
Page 1
P.A. No. 2025
<PAGE> 33
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).
Page 2
P.A. No. 2025
<PAGE> 34
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
<PAGE> 35
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
<PAGE> 36
*This confidential information has been
omitted and filed separately with the
Commission.
CS1-2
P.A. No. 2025
<PAGE> 37
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
<PAGE> 38
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
<PAGE> 39
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
(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.
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%.
EE1-1
P.A. No. 2025
<PAGE> 40
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.
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
<PAGE> 41
*
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
<PAGE> 42
*
relating to
BOEING MODEL 767-432ER
*This confidential information has been
omitted and filed separately with the
Commission.
*
P.A. No. 2025
<PAGE> 43
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
<PAGE> 44
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
<PAGE> 45
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.
SLP1-2
P.A. No. 2025
<PAGE> 46
(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.
SLP1-3
P.A. No. 2025
<PAGE> 47
(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
<PAGE> 1
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).
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
<PAGE> 2
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
<PAGE> 3
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
<PAGE> 4
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
<PAGE> 5
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
<PAGE> 6
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
<PAGE> 7
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
<PAGE> 8
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
<PAGE> 9
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
<PAGE> 10
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
<PAGE> 11
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
<PAGE> 12
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
<PAGE> 13
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
<PAGE> 14
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
<PAGE> 15
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
<PAGE> 16
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
<PAGE> 17
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
<PAGE> 18
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
<PAGE> 19
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
<PAGE> 20
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
<PAGE> 21
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
<PAGE> 22
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
<PAGE> 23
[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
<PAGE> 24
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
<PAGE> 25
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
<PAGE> 26
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
<PAGE> 27
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
<PAGE> 28
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
<PAGE> 29
[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
<PAGE> 30
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
<PAGE> 31
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
<PAGE> 32
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
<PAGE> 33
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
<PAGE> 34
Table A
*This confidential information
has been omitted and filed
separately with the Commission.
Page 1
<PAGE> 35
Table A
*This confidential information
has been omitted and filed
separately with the Commission.
Page 2
<PAGE> 36
Table B
*This confidential information
has been omitted and filed
separately with the Commission.
Page 1
<PAGE> 37
Table B
*This confidential information
has been omitted and filed
separately with the Commission.
Page 2
<PAGE> 38
[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
<PAGE> 39
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
<PAGE> 40
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
<PAGE> 41
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
<PAGE> 42
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
<PAGE> 43
[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
<PAGE> 44
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
<PAGE> 45
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
<PAGE> 46
[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
<PAGE> 47
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
<PAGE> 48
[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
<PAGE> 49
[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
<PAGE> 50
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
<PAGE> 51
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
<PAGE> 52
[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
<PAGE> 53
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
<PAGE> 54
[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
<PAGE> 55
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
<PAGE> 56
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
<PAGE> 57
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
<PAGE> 58
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
<PAGE> 59
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
<PAGE> 60
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
<PAGE> 61
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
<PAGE> 62
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
<PAGE> 63
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
<PAGE> 64
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
<PAGE> 65
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
<PAGE> 66
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
<PAGE> 67
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
<PAGE> 68
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
<PAGE> 69
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.
Reporting Period No.
---------
Beginning date ending date
--------- ----------
Currency of the costs shown below:
------------
<TABLE>
<CAPTION>
Direct Direct Subcontracted
Actual Labor Material Maintenance
Maintenance Costs (total cost) (total cost) (total cost)
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Scheduled
Maintenance
- --------------------------------------------------------------------------------
Non-Scheduled Maintenance
- --------------------------------------------------------------------------------
Repair &
Overhaul
- --------------------------------------------------------------------------------
Modifications
(ref. para.
4.3 & 5.1)
- --------------------------------------------------------------------------------
Total
</TABLE>
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.
<TABLE>
<CAPTION>
Average per Average per Average Total per
manhour flight number of aircraft
Labor Rate Flight Time Covered Aircraft Flight Hours
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
</TABLE>
P.A. No. 2022
<PAGE> 70
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
<PAGE> 71
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.
Reporting Period No.
-------
Beginning date ending date
--------- ---------
Costs as reported by Customer /in foreign currency/:
<TABLE>
<CAPTION>
Actual Direct Direct Subcontracted
Maintenance Costs Labor Material Maintenance
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Scheduled
Maintenance
- --------------------------------------------------------------------------------
Non-Scheduled
Maintenance
- --------------------------------------------------------------------------------
Repair &
Overhaul
- --------------------------------------------------------------------------------
Modifications
</TABLE>
Customer's costs with adjusted Subcontracted Maintenance (per Attachment B of
the referenced Letter Agreement) in U.S. dollars.
<TABLE>
<CAPTION>
Actual Direct Direct Subcontracted Subcontracted
Maintenance Costs Labor Material Labor Material
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Scheduled
Maintenance
- --------------------------------------------------------------------------------
Non-Scheduled
Maintenance
- --------------------------------------------------------------------------------
Repair &
Overhaul
- --------------------------------------------------------------------------------
Modifications
- --------------------------------------------------------------------------------
Total
</TABLE>
P.A. No. 2022
<PAGE> 72
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/.
<TABLE>
<CAPTION>
Reporting Reporting Reporting Reporting Reporting
Period 1 Period 2 Period 3 Period 4 Period 5
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
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
</TABLE>
As of this Reporting Period, the Program is in compliance:
Yes [ ] No [ ]
Very truly yours,
THE BOEING COMPANY
Reported by
-------------------------
Its
-------------------------
Date
-------------------------
P.A. No. 2022
<PAGE> 73
[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
<PAGE> 74
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
<PAGE> 75
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
<PAGE> 76
[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
<PAGE> 77
Attachment A to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B22 Engines
Page 1
MODEL 737-632 PERFORMANCE GUARANTEES
<TABLE>
<CAPTION>
SECTION CONTENTS
<S> <C>
1 *
2 *
3 *
4 *
5 *
6 *
7 *
8 *
9 *
</TABLE>
*This confidential information has been
omitted and filed separately with the
Commission.
B-B111-M97-0632C
<PAGE> 78
Attachment A to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B22 Engines
Page 2
<TABLE>
<S> <C>
1 *
2 *
2.1 *
2.2 *
2.3 *
</TABLE>
*This confidential information has been
omitted and filed separately with the
Commission.
B-B111-M97-0632C
<PAGE> 79
Attachment A to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B22 Engines
Page 3
<TABLE>
<S> <C>
2.4 *
2.5 *
</TABLE>
*This confidential information has been
omitted and filed separately with the
Commission.
B-B111-M97-0632C
<PAGE> 80
Attachment A to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B22 Engines
Page 4
<TABLE>
<S> <C>
2.6 *
2.6.1 *
2.6.2 *
2.6.3 *
</TABLE>
*This confidential information has been
omitted and filed separately with the
Commission.
B-B111-M97-0632C
<PAGE> 81
Attachment A to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B22 Engines
Page 5
<TABLE>
<S> <C>
2.7 *
2.7.1 *
</TABLE>
*This confidential information has been
omitted and filed separately with the
Commission.
B-B111-M97-0632C
<PAGE> 82
Attachment A to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B22 Engines
Page 6
*This confidential information has been
omitted and filed separately with the
Commission.
B-B111-M97-0632C
<PAGE> 83
Attachment A to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B22 Engines
Page 7
*This confidential information has been
omitted and filed separately with the
Commission.
B-B111-M97-0632C
<PAGE> 84
Attachment A to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B22 Engines
Page 8
<TABLE>
<S> <C>
2.7.2 *This confidential information has been omitted and filed
separately with the Commission.
</TABLE>
B-B111-M97-0632C
<PAGE> 85
Attachment A to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B22 Engines
Page 9
<TABLE>
<S> <C>
2.7.3 *This confidential information has been omitted and filed
separately with the Commission.
</TABLE>
B-B111-M97-0632C
<PAGE> 86
Attachment A to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B22 Engines
Page 10
<TABLE>
<S> <C>
2.7.4 *This confidential information has been omitted and filed
separately with the Commission.
</TABLE>
B-B111-M97-0632C
<PAGE> 87
Attachment A to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B22 Engines
Page 11
<TABLE>
<S> <C>
2.7.5 *This confidential information has been omitted and filed
separately with the Commission.
</TABLE>
B-B111-M97-0632C
<PAGE> 88
Attachment A to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B22 Engines
Page 12
<TABLE>
<S> <C>
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.
</TABLE>
B-B111-M97-0632C
<PAGE> 89
Attachment A to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B22 Engines
Page 13
<TABLE>
<S> <C>
2.7.8 *This confidential information has been omitted and filed
separately with the Commission.
</TABLE>
B-B111-M97-0632C
<PAGE> 90
Attachment A to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B22 Engines
Page 14
<TABLE>
<S> <C>
2.7.9 *This confidential information has been omitted and filed
separately with the Commission.
</TABLE>
B-B111-M97-0632C
<PAGE> 91
Attachment A to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B22 Engines
Page 15
<TABLE>
<S> <C>
3 *
4 *
4.1 *
4.2 *
4.2.1 *
4.2.2 *
</TABLE>
*This confidential information has been omitted and filed
separately with the Commission.
B-B111-M97-0632C
<PAGE> 92
Attachment A to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B22 Engines
Page 16
<TABLE>
<S> <C>
4.2.3 *This confidential information has been omitted and filed
separately with the Commission.
</TABLE>
B-B111-M97-0632C
<PAGE> 93
Attachment A to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B22 Engines
Page 17
<TABLE>
<S> <C>
4.3 *This confidential information has been omitted and filed
separately with the Commission.
</TABLE>
B-B111-M97-0632C
<PAGE> 94
Attachment A to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B22 Engines
Page 18
<TABLE>
<S> <C>
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.
</TABLE>
B-B111-M97-0632C
<PAGE> 95
Attachment A to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B22 Engines
Page 19
<TABLE>
<S> <C>
5 *
6 *
6.1 *
6.2 *
</TABLE>
*This confidential information has been omitted and filed
separately with the Commission.
B-B111-M97-0632C
<PAGE> 96
Attachment A to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B22 Engines
Page 20
<TABLE>
<S> <C>
7 *
7.1 *
7.2 *
7.3 *
7.4 *
</TABLE>
*This confidential information has been omitted and filed
separately with the Commission.
B-B111-M97-0632C
<PAGE> 97
Attachment A to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B22 Engines
Page 21
<TABLE>
<S> <C>
7.5 *
7.6 *
7.7 *
7.8 *
</TABLE>
*This confidential information has been omitted and filed
separately with the Commission.
B-B111-M97-0632C
<PAGE> 98
Attachment A to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B22 Engines
Page 22
<TABLE>
<S> <C>
7.9 *
7.10 *
7.11 *
</TABLE>
*This confidential information has been omitted and filed
separately with the Commission.
B-B111-M97-0632C
<PAGE> 99
Attachment A to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B22 Engines
Page 23
<TABLE>
<S> <C>
7.12 *
8 *
8.1 *
8.2 *
8.3 *
8.4 *
8.5 *
</TABLE>
*This confidential information has been omitted and filed
separately with the Commission.
B-B111-M97-0632C
<PAGE> 100
Attachment A to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B22 Engines
Page 24
<TABLE>
<S> <C>
8.6 *
8.7 *
8.7.1 *
8.7.2 *
8.7.3 *
8.7.4 *
</TABLE>
*This confidential information has been omitted and filed
separately with the Commission.
B-B111-M97-0632C
<PAGE> 101
Attachment A to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B22 Engines
Page 25
<TABLE>
<S> <C>
8.7.5 *
8.8 *
8.9 *
</TABLE>
*This confidential information has been omitted and filed
separately with the Commission.
B-B111-M97-0632C
<PAGE> 102
Attachment A to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B22 Engines
Page 26
<TABLE>
<S> <C>
8.10 *
8.11 *
9 *
</TABLE>
*This confidential information has been omitted and filed
separately with the Commission.
B-B111-M97-0632C
<PAGE> 103
Attachment B to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B24 Engines
Page 1
MODEL 737-632 PERFORMANCE GUARANTEES
<TABLE>
<CAPTION>
SECTION CONTENTS
<S> <C>
1 *
2 *
3 *
4 *
5 *
6 *
7 *
8 *
9 *
</TABLE>
*This confidential information has been
omitted and filed separately with the
Commission.
B-B111-M97-0633C
<PAGE> 104
Attachment B to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B24 Engines
Page 2
<TABLE>
<S> <C>
1 *
2 *
2.1 *
2.2 *
2.3 *
</TABLE>
*This confidential information has been
omitted and filed separately with the
Commission.
B-B111-M97-0633C
<PAGE> 105
Attachment B to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B24 Engines
Page 3
<TABLE>
<S> <C>
2.4 *
2.5 *
</TABLE>
*This confidential information has been
omitted and filed separately with the
Commission.
B-B111-M97-0633C
<PAGE> 106
Attachment B to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B24 Engines
Page 4
<TABLE>
<S> <C>
2.6 *
2.6.1 *
2.6.2 *
2.6.3 *
</TABLE>
*This confidential information has been
omitted and filed separately with the
Commission.
B-B111-M97-0633C
<PAGE> 107
Attachment B to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B24 Engines
Page 5
<TABLE>
<S> <C>
2.7 *
2.7.1 *
</TABLE>
*This confidential information has been
omitted and filed separately with the
Commission.
B-B111-M97-0633C
<PAGE> 108
Attachment B to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B24 Engines
Page 6
*This confidential information has been
omitted and filed separately with the
Commission.
B-B111-M97-0633C
<PAGE> 109
Attachment B to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B24 Engines
Page 7
*This confidential information has been
omitted and filed separately with the
Commission.
B-B111-M97-0633C
<PAGE> 110
Attachment B to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B24 Engines
Page 8
<TABLE>
<S> <C>
2.7.2 *This confidential information has been omitted and filed
separately with the Commission.
</TABLE>
B-B111-M97-0633C
<PAGE> 111
Attachment B to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B24 Engines
Page 9
<TABLE>
<S> <C>
2.7.3 *This confidential information has been omitted and filed
separately with the Commission.
</TABLE>
B-B111-M97-0633C
<PAGE> 112
Attachment B to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B24 Engines
Page 10
<TABLE>
<S> <C>
2.7.4 *This confidential information has been omitted and filed
separately with the Commission.
</TABLE>
B-B111-M97-0633C
<PAGE> 113
Attachment B to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B24 Engines
Page 11
<TABLE>
<S> <C>
2.7.5 *This confidential information has been omitted and filed
separately with the Commission.
</TABLE>
B-B111-M97-0633C
<PAGE> 114
Attachment B to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B24 Engines
Page 12
<TABLE>
<S> <C>
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.
</TABLE>
B-B111-M97-0633C
<PAGE> 115
Attachment B to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B24 Engines
Page 13
<TABLE>
<S> <C>
2.7.8 *This confidential information has been omitted and filed
separately with the Commission.
</TABLE>
B-B111-M97-0633C
<PAGE> 116
Attachment B to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B24 Engines
Page 14
<TABLE>
<S> <C>
2.7.9 *This confidential information has been omitted and filed
separately with the Commission.
</TABLE>
B-B111-M97-0633C
<PAGE> 117
Attachment B to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B24 Engines
Page 15
<TABLE>
<S> <C>
3 *
4 *
4.1 *
4.2 *
4.2.1 *
4.2.2 *
</TABLE>
*This confidential information has been omitted and filed
separately with the Commission.
B-B111-M97-0633C
<PAGE> 118
Attachment B to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B24 Engines
Page 16
<TABLE>
<S> <C>
4.2.3 *This confidential information has been omitted and filed
separately with the Commission.
</TABLE>
B-B111-M97-0633C
<PAGE> 119
Attachment B to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B24 Engines
Page 17
<TABLE>
<S> <C>
4.3 *This confidential information has been omitted and filed
separately with the Commission.
</TABLE>
B-B111-M97-0633C
<PAGE> 120
Attachment B to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B24 Engines
Page 18
<TABLE>
<S> <C>
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.
</TABLE>
B-B111-M97-0633C
<PAGE> 121
Attachment B to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B24 Engines
Page 19
<TABLE>
<S> <C>
5 *
6 *
6.1 *
6.2 *
</TABLE>
*This confidential information has been omitted and filed
separately with the Commission.
B-B111-M97-0633C
<PAGE> 122
Attachment B to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B24 Engines
Page 20
<TABLE>
<S> <C>
7 *
7.1 *
7.2 *
7.3 *
7.4 *
</TABLE>
*This confidential information has been omitted and filed
separately with the Commission.
B-B111-M97-0633C
<PAGE> 123
Attachment B to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B24 Engines
Page 21
<TABLE>
<S> <C>
7.5 *
7.6 *
7.7 *
7.8 *
</TABLE>
*This confidential information has been omitted and filed
separately with the Commission.
B-B111-M97-0633C
<PAGE> 124
Attachment B to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B24 Engines
Page 22
<TABLE>
<S> <C>
7.9 *
7.10 *
7.11 *
</TABLE>
*This confidential information has been omitted and filed
separately with the Commission.
B-B111-M97-0633C
<PAGE> 125
Attachment B to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B24 Engines
Page 23
<TABLE>
<S> <C>
7.12 *
8 *
8.1 *
8.2 *
8.3 *
8.4 *
8.5 *
</TABLE>
*This confidential information has been omitted and filed
separately with the Commission.
B-B111-M97-0633C
<PAGE> 126
Attachment B to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B24 Engines
Page 24
<TABLE>
<S> <C>
8.6 *
8.7 *
8.7.1 *
8.7.2 *
8.7.3 *
8.7.4 *
</TABLE>
*This confidential information has been omitted and filed
separately with the Commission.
B-B111-M97-0633C
<PAGE> 127
Attachment B to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B24 Engines
Page 25
<TABLE>
<S> <C>
8.7.5 *
8.8 *
8.9 *
</TABLE>
*This confidential information has been omitted and filed
separately with the Commission.
B-B111-M97-0633C
<PAGE> 128
Attachment B to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B24 Engines
Page 26
<TABLE>
<S> <C>
8.10 *
8.11 *
9 *
</TABLE>
*This confidential information has been omitted and filed
separately with the Commission.
B-B111-M97-0633C
<PAGE> 129
Attachment C to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B26 Engines
Page 1
MODEL 737-832 PERFORMANCE GUARANTEES
<TABLE>
<CAPTION>
SECTION CONTENTS
<S> <C>
1 *
2 *
3 *
4 *
5 *
6 *
7 *
8 *
9 *
</TABLE>
*This confidential information has been
omitted and filed separately with the
Commission.
B-B111-M97-0634D
<PAGE> 130
Attachment C to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B26 Engines
Page 2
<TABLE>
<S> <C>
1 *
2 *
2.1 *
2.2 *
2.3 *
</TABLE>
*This confidential information has been
omitted and filed separately with the
Commission.
B-B111-M97-0634D
<PAGE> 131
Attachment C to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B26 Engines
Page 3
<TABLE>
<S> <C>
2.4 *
2.5 *
</TABLE>
*This confidential information has been
omitted and filed separately with the
Commission.
B-B111-M97-0634D
<PAGE> 132
Attachment C to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B26 Engines
Page 4
<TABLE>
<S> <C>
2.6 *
2.6.1 *
2.6.2 *
2.6.3 *
</TABLE>
*This confidential information has been
omitted and filed separately with the
Commission.
B-B111-M97-0634D
<PAGE> 133
Attachment C to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B26 Engines
Page 5
<TABLE>
<S> <C>
2.7 *
2.7.1 *
</TABLE>
*This confidential information has been
omitted and filed separately with the
Commission.
B-B111-M97-0634D
<PAGE> 134
Attachment C to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B26 Engines
Page 6
*This confidential information has been
omitted and filed separately with the
Commission.
B-B111-M97-0634D
<PAGE> 135
Attachment C to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B26 Engines
Page 7
*This confidential information has been
omitted and filed separately with the
Commission.
B-B111-M97-0634D
<PAGE> 136
Attachment C to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B26 Engines
Page 8
<TABLE>
<S> <C>
2.7.2 *This confidential information has been omitted and filed
separately with the Commission.
</TABLE>
B-B111-M97-0634D
<PAGE> 137
Attachment C to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B26 Engines
Page 9
<TABLE>
<S> <C>
2.7.3 *This confidential information has been omitted and filed
separately with the Commission.
</TABLE>
B-B111-M97-0634D
<PAGE> 138
Attachment C to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B26 Engines
Page 10
<TABLE>
<S> <C>
2.7.4 *This confidential information has been omitted and filed
separately with the Commission.
</TABLE>
B-B111-M97-0634D
<PAGE> 139
Attachment C to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B26 Engines
Page 11
<TABLE>
<S> <C>
2.7.5 *This confidential information has been omitted and filed
separately with the Commission.
</TABLE>
B-B111-M97-0634D
<PAGE> 140
Attachment C to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B26 Engines
Page 12
<TABLE>
<S> <C>
2.7.6 *This confidential information has been omitted and filed
separately with the Commission.
</TABLE>
B-B111-M97-0634D
<PAGE> 141
Attachment C to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B26 Engines
Page 13
<TABLE>
<S> <C>
2.7.7 *This confidential information has been omitted and filed
separately with the Commission.
</TABLE>
B-B111-M97-0634D
<PAGE> 142
Attachment C to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B26 Engines
Page 14
<TABLE>
<S> <C>
2.7.8 *This confidential information has been omitted and filed
separately with the Commission.
</TABLE>
B-B111-M97-0634D
<PAGE> 143
Attachment C to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B26 Engines
Page 15
<TABLE>
<S> <C>
2.7.9 *
2.7.10 *
</TABLE>
*This confidential information has been omitted and filed
separately with the Commission.
B-B111-M97-0634D
<PAGE> 144
Attachment C to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B26 Engines
Page 16
<TABLE>
<S> <C>
2.7.11 *This confidential information has been omitted and filed
separately with the Commission.
</TABLE>
B-B111-M97-0634D
<PAGE> 145
Attachment C to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B26 Engines
Page 17
<TABLE>
<S> <C>
2.7.12 *This confidential information has been omitted and filed
separately with the Commission.
</TABLE>
B-B111-M97-0634D
<PAGE> 146
Attachment C to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B26 Engines
Page 18
<TABLE>
<S> <C>
3 *
4 *
4.1 *
4.2 *
4.2.1 *
4.2.2 *
</TABLE>
*This confidential information has been omitted and filed
separately with the Commission.
B-B111-M97-0634D
<PAGE> 147
Attachment C to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B26 Engines
Page 19
<TABLE>
<S> <C>
4.2.3 *This confidential information has been omitted and filed
separately with the Commission.
</TABLE>
B-B111-M97-0634D
<PAGE> 148
Attachment C to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B26 Engines
Page 20
<TABLE>
<S> <C>
4.3 *This confidential information has been omitted and filed
separately with the Commission.
</TABLE>
B-B111-M97-0634D
<PAGE> 149
Attachment C to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B26 Engines
Page 21
<TABLE>
<S> <C>
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.
</TABLE>
B-B111-M97-0634D
<PAGE> 150
Attachment C to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B26 Engines
Page 22
<TABLE>
<S> <C>
5 *
6 *
6.1 *
6.2 *
</TABLE>
*This confidential information has been omitted and filed
separately with the Commission.
B-B111-M97-0634D
<PAGE> 151
Attachment C to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B26 Engines
Page 23
<TABLE>
<S> <C>
7 *
7.1 *
7.2 *
7.3 *
7.4 *
</TABLE>
*This confidential information has been omitted and filed
separately with the Commission.
B-B111-M97-0634D
<PAGE> 152
Attachment C to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B26 Engines
Page 24
<TABLE>
<S> <C>
7.5 *
7.6 *
7.7 *
7.8 *
</TABLE>
*This confidential information has been omitted and filed
separately with the Commission.
B-B111-M97-0634D
<PAGE> 153
Attachment C to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B26 Engines
Page 25
<TABLE>
<S> <C>
7.9 *
7.10 *
7.11 *
</TABLE>
*This confidential information has been omitted and filed
separately with the Commission.
B-B111-M97-0634D
<PAGE> 154
Attachment C to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B26 Engines
Page 26
<TABLE>
<S> <C>
7.12 *
8 *
8.1 *
8.2 *
8.3 *
8.4 *
8.5 *
</TABLE>
*This confidential information has been omitted and filed
separately with the Commission.
B-B111-M97-0634D
<PAGE> 155
Attachment C to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B26 Engines
Page 27
<TABLE>
<S> <C>
8.6 *
8.7 *
8.7.1 *
8.7.2 *
8.7.3 *
8.7.4 *
</TABLE>
*This confidential information has been omitted and filed
separately with the Commission.
B-B111-M97-0634D
<PAGE> 156
Attachment C to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B26 Engines
Page 28
<TABLE>
<S> <C>
8.7.5 *
8.8 *
8.9 *
</TABLE>
*This confidential information has been omitted and filed
separately with the Commission.
B-B111-M97-0634D
<PAGE> 157
Attachment C to Letter Agreement
No. 6-1162-RLL-2233
CFM56-7B26 Engines
Page 29
<TABLE>
<S> <C>
8.10 *
8.11 *
9 *
</TABLE>
*This confidential information has been omitted and filed
separately with the Commission.
B-B111-M97-0634D
<PAGE> 158
[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
<PAGE> 159
*This confidential information
has been omitted and filed
separately with the Commission.
*
<PAGE> 160
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
Number
------
<S> <C> <C>
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
</TABLE>
*This confidential information
has been omitted and filed
separately with the Commission.
(i)
*
<PAGE> 161
*This confidential information
has been omitted and filed
separately with the Commission.
(ii)
*
<PAGE> 162
Article 1. *This confidential information has been omitted and filed separately
with the Commission.
1-1
*
<PAGE> 163
Article 2. *This confidential information has been omitted and filed separately
with the Commission.
2-1
*
<PAGE> 164
Article 3. *This confidential information has been omitted and filed separately
with the Commission.
3-1
*
<PAGE> 165
Article 4. *This confidential information has been omitted and filed separately
with the Commission.
4-1
*
<PAGE> 166
Article 5. *This confidential information has been omitted and filed separately
with the Commission.
5-1
*
<PAGE> 167
*This confidential information has been omitted and filed separately with the
Commission.
5-2
*
<PAGE> 168
*This confidential information has been omitted and filed separately with the
Commission.
5-3
*
<PAGE> 169
*This confidential information has been omitted and filed separately with the
Commission.
5-4
*
<PAGE> 170
Article 6. *This confidential information has been omitted and filed separately
with the Commission.
6-1
*
<PAGE> 171
Article 7. *This confidential information has been omitted and filed separately
with the Commission.
7-1
*
<PAGE> 172
*This confidential information has been omitted and filed separately with the
Commission.
7-2
*
<PAGE> 173
Article 8. *This confidential information has been omitted and filed separately
with the Commission.
8-1
*
<PAGE> 174
Article 9. *This confidential information has been omitted and filed separately
with the Commission.
9-1
*
<PAGE> 175
Article 10. *This confidential information has been omitted and filed separately
with the Commission.
10-1
*
<PAGE> 176
Article 11. *This confidential information has been omitted and filed separately
with the Commission.
11-1
*
<PAGE> 177
Article 12. *This confidential information has been omitted and filed separately
with the Commission.
12-1
*
<PAGE> 178
Article 13. *This confidential information has been omitted and filed separately
with the Commission.
13-1
*
<PAGE> 179
Article 14. *This confidential information has been omitted and filed separately
with the Commission.
14-1
*
<PAGE> 180
Article 15. *This confidential information has been omitted and filed separately
with the Commission.
15-1
*
<PAGE> 181
Exhibit A to
*
*This confidential information
has been omitted and filed
separately with the Commission.
A-1
*
<PAGE> 182
Exhibit A to
*
*This confidential information
has been omitted and filed
separately with the Commission.
A-2
*
<PAGE> 183
Exhibit B to
*
*This confidential information
has been omitted and filed
separately with the Commission.
B-1
*
<PAGE> 184
Attachment 1 to
Exhibit B to
*
*This confidential information
has been omitted and filed
separately with the Commission.
B-1-1
*
<PAGE> 185
Attachment 2 to
Exhibit B to
*
*This confidential information
has been omitted and filed
separately with the Commission.
B-2-1
*
<PAGE> 186
Attachment 2 to
Exhibit B to
*
*This confidential information
has been omitted and filed
separately with the Commission.
B-2-2
*
<PAGE> 187
Exhibit C to
*
*This confidential information
has been omitted and filed
separately with the Commission.
C-1
*
<PAGE> 188
Exhibit D to
*
*This confidential information
has been omitted and filed
separately with the Commission.
D-1
*
<PAGE> 189
Exhibit D to
*
*This confidential information
has been omitted and filed
separately with the Commission.
D-2
*
<PAGE> 190
Exhibit D to
*
*This confidential information
has been omitted and filed
separately with the Commission.
D-3
*
<PAGE> 191
[BOEING LETTERHEAD]
6-1162-RLL-2400
Delta Air Lines, Inc.
Hartsfield Atlanta International Airport
Atlanta, Georgia 30320
<TABLE>
<S> <C>
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)
</TABLE>
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
<PAGE> 192
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:
<TABLE>
<S> <C> <C>
Model 737-632 737-732
Airframe Price * *
Estimated Optional Features Price * *
Aircraft Basic Price * *
BFE Estimate * *
</TABLE>
The Aircraft Basic Price for the 737-632 and 737-732 with the maximum MTOW and
thrust is:
<TABLE>
<S> <C> <C>
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 * *
</TABLE>
*This confidential information has been omitted and filed separately with the
Commission.
P.A. No. 2022
<PAGE> 193
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
<PAGE> 194
[BOEING LETTERHEAD]
6-1162-RLL-2289
Delta Air Lines, Inc.
Hartsfield Atlanta International Airport
Atlanta, Georgia 30320
<TABLE>
<S> <C>
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).
</TABLE>
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
<PAGE> 195
*This confidential information
has been omitted and filed
separately with the Commission.
*
<PAGE> 196
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
Number
------
<S> <C> <C>
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
</TABLE>
*This confidential information
has been omitted and filed
separately with the Commission.
(i)
*
<PAGE> 197
*This confidential information
has been omitted and filed
separately with the Commission.
(ii)
*
<PAGE> 198
Article 1. *This confidential information has been omitted and filed separately
with the Commission.
1-1
*
<PAGE> 199
Article 2. *This confidential information has been omitted and filed separately
with the Commission.
2-1
*
<PAGE> 200
Article 3. *This confidential information has been omitted and filed separately
with the Commission.
3-1
*
<PAGE> 201
Article 4. *This confidential information has been omitted and filed separately
with the Commission.
4-1
*
<PAGE> 202
Article 5. *This confidential information has been omitted and filed separately
with the Commission.
5-1
*
<PAGE> 203
*This confidential information has been omitted and filed separately with the
Commission.
5-2
*
<PAGE> 204
*This confidential information has been omitted and filed separately with the
Commission.
5-3
*
<PAGE> 205
*This confidential information has been omitted and filed separately with the
Commission.
5-4
*
<PAGE> 206
Article 6. *This confidential information has been omitted and filed separately
with the Commission.
6-1
*
<PAGE> 207
Article 7. *This confidential information has been omitted and filed separately
with the Commission.
7-1
*
<PAGE> 208
*This confidential information has been omitted and filed separately with the
Commission.
7-2
*
<PAGE> 209
Article 8. *This confidential information has been omitted and filed separately
with the Commission.
8-1
*
<PAGE> 210
Article 9. *This confidential information has been omitted and filed separately
with the Commission.
9-1
*
<PAGE> 211
Article 10. *This confidential information has been omitted and filed separately
with the Commission.
10-1
*
<PAGE> 212
Article 11. *This confidential information has been omitted and filed separately
with the Commission.
11-1
*
<PAGE> 213
Article 12. *This confidential information has been omitted and filed separately
with the Commission.
12-1
*
<PAGE> 214
Article 13. *This confidential information has been omitted and filed separately
with the Commission.
13-1
*
<PAGE> 215
Article 14. *This confidential information has been omitted and filed separately
with the Commission.
14-1
*
<PAGE> 216
Article 15. *This confidential information has been omitted and filed separately
with the Commission.
15-1
*
<PAGE> 217
Exhibit A to
*
*This confidential information
has been omitted and filed
separately with the Commission.
A-1
*
<PAGE> 218
Exhibit A to
*
*This confidential information
has been omitted and filed
separately with the Commission.
A-2
*
<PAGE> 219
Exhibit B to
*
*This confidential information
has been omitted and filed
separately with the Commission.
B-1
*
<PAGE> 220
Attachment 1 to
Exhibit B to
*
*This confidential information
has been omitted and filed
separately with the Commission.
B-1-1
*
<PAGE> 221
Attachment 2 to
Exhibit B to
*
*This confidential information
has been omitted and filed
separately with the Commission.
B-2-1
*
<PAGE> 222
Attachment 2 to
Exhibit B to
*
*This confidential information
has been omitted and filed
separately with the Commission.
B-2-2
*
<PAGE> 223
Exhibit C to
*
*This confidential information
has been omitted and filed
separately with the Commission.
C-1
*
<PAGE> 224
Exhibit D to
*
*This confidential information
has been omitted and filed
separately with the Commission.
D-1
*
<PAGE> 225
Exhibit D to
*
*This confidential information
has been omitted and filed
separately with the Commission.
D-2
*
<PAGE> 226
Exhibit D to
*
*This confidential information
has been omitted and filed
separately with the Commission.
D-3
*
<PAGE> 227
[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
<PAGE> 228
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
<PAGE> 229
*This confidential information
has been omitted and filed
separately with the Commission.
*
<PAGE> 230
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
Number
------
<S> <C> <C>
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
</TABLE>
*This confidential information
has been omitted and filed
separately with the Commission.
(i)
*
<PAGE> 231
*This confidential information
has been omitted and filed
separately with the Commission.
(ii)
*
<PAGE> 232
Article 1. *This confidential information has been omitted and filed separately
with the Commission.
1-1
*
<PAGE> 233
Article 2. *This confidential information has been omitted and filed separately
with the Commission.
2-1
*
<PAGE> 234
Article 3. *This confidential information has been omitted and filed separately
with the Commission.
3-1
*
<PAGE> 235
Article 4. *This confidential information has been omitted and filed separately
with the Commission.
4-1
*
<PAGE> 236
Article 5. *This confidential information has been omitted and filed separately
with the Commission.
5-1
*
<PAGE> 237
Article 6. *This confidential information has been omitted and filed separately
with the Commission.
6-1
*
<PAGE> 238
Article 7. *This confidential information has been omitted and filed separately
with the Commission.
7-1
*
<PAGE> 239
Article 8. *This confidential information has been omitted and filed separately
with the Commission.
8-1
*
<PAGE> 240
Article 9. *This confidential information has been omitted and filed separately
with the Commission.
9-1
*
<PAGE> 241
Article 10. *This confidential information has been omitted and filed separately
with the Commission.
10-1
*
<PAGE> 242
Article 11. *This confidential information has been omitted and filed separately
with the Commission.
11-1
*
<PAGE> 243
Article 12. *This confidential information has been omitted and filed separately
with the Commission.
12-1
*
<PAGE> 244
Article 13. *This confidential information has been omitted and filed separately
with the Commission.
13-1
*
<PAGE> 245
Article 14. *This confidential information has been omitted and filed separately
with the Commission.
14-1
*
<PAGE> 246
Article 15. *This confidential information has been omitted and filed separately
with the Commission.
15-1
*
<PAGE> 247
Exhibit A to
*
*This confidential information
has been omitted and filed
separately with the Commission.
A-1
*
<PAGE> 248
Exhibit A to
*
*This confidential information
has been omitted and filed
separately with the Commission.
A-2
*
<PAGE> 249
Exhibit B to
*
*This confidential information
has been omitted and filed
separately with the Commission.
B-1
*
<PAGE> 250
Attachment 1 to
Exhibit B to
*
*This confidential information
has been omitted and filed
separately with the Commission.
B-1-1
*
<PAGE> 251
Attachment 2 to
Exhibit B to
*
*This confidential information
has been omitted and filed
separately with the Commission.
B-2-1
*
<PAGE> 252
Attachment 2 to
Exhibit B to
*
*This confidential information
has been omitted and filed
separately with the Commission.
B-2-2
*
<PAGE> 253
Exhibit C to
*
*This confidential information
has been omitted and filed
separately with the Commission.
C-1
*
<PAGE> 254
Exhibit D to
*
*This confidential information
has been omitted and filed
separately with the Commission.
D-1
*
<PAGE> 255
Exhibit D to
*
*This confidential information
has been omitted and filed
separately with the Commission.
D-2
*
<PAGE> 256
Exhibit D to
*
*This confidential information
has been omitted and filed
separately with the Commission.
D-3
*
<PAGE> 257
[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
<PAGE> 258
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
<PAGE> 259
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
<PAGE> 260
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
<PAGE> 261
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
<PAGE> 262
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
<PAGE> 263
[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
<PAGE> 264
Attachment to Letter Agreement
No. 6-1162-RLL-2281
CF6-80C2B7F Engines
Page 1
MODEL 767-432ER PERFORMANCE GUARANTEES
<TABLE>
<CAPTION>
SECTION CONTENTS
<S> <C>
1 *
2 *
3 *
4 *
5 *
6 *
7 *
8 *
9 *
</TABLE>
*This confidential information has been
omitted and filed separately with the
Commission.
B-B111-M97-0637C
<PAGE> 265
Attachment to Letter Agreement
No. 6-1162-RLL-2281
CF6-80C2B7F Engines
Page 2
<TABLE>
<S> <C>
1 *
2 *
2.1 *
2.2 *
2.3 *
2.3.1 *
</TABLE>
*This confidential information has been
omitted and filed separately with the
Commission.
B-B111-M97-0637C
<PAGE> 266
Attachment to Letter Agreement
No. 6-1162-RLL-2281
CF6-80C2B7F Engines
Page 3
<TABLE>
<S> <C>
2.3.2 *This confidential information has been omitted and filed
separately with the Commission.
</TABLE>
B-B111-M97-0637C
<PAGE> 267
Attachment to Letter Agreement
No. 6-1162-RLL-2281
CF6-80C2B7F Engines
Page 4
<TABLE>
<S> <C>
2.3.3 *This confidential information has been omitted and filed
separately with the Commission.
</TABLE>
B-B111-M97-0637C
<PAGE> 268
Attachment to Letter Agreement
No. 6-1162-RLL-2281
CF6-80C2B7F Engines
Page 5
<TABLE>
<S> <C>
2.4 *
2.5 *
</TABLE>
*This confidential information has been
omitted and filed separately with the
Commission.
B-B111-M97-0637C
<PAGE> 269
Attachment to Letter Agreement
No. 6-1162-RLL-2281
CF6-80C2B7F Engines
Page 6
<TABLE>
<S> <C>
2.6 *
2.6.1 *
2.6.2 *
2.6.3 *
</TABLE>
*This confidential information has been
omitted and filed separately with the
Commission.
B-B111-M97-0637C
<PAGE> 270
Attachment to Letter Agreement
No. 6-1162-RLL-2281
CF6-80C2B7F Engines
Page 7
<TABLE>
<S> <C>
2.7 *
2.7.1 *
</TABLE>
*This confidential information has been
omitted and filed separately with the
Commission.
B-B111-M97-0637C
<PAGE> 271
Attachment to Letter Agreement
No. 6-1162-RLL-2281
CF6-80C2B7F Engines
Page 8
*This confidential information has been
omitted and filed separately with the
Commission.
B-B111-M97-0637C
<PAGE> 272
Attachment to Letter Agreement
No. 6-1162-RLL-2281
CF6-80C2B7F Engines
Page 9
*This confidential information has been
omitted and filed separately with the
Commission.
B-B111-M97-0637C
<PAGE> 273
Attachment to Letter Agreement
No. 6-1162-RLL-2281
CF6-80C2B7F Engines
Page 10
<TABLE>
<S> <C>
2.7.2 *This confidential information has been omitted and filed
separately with the Commission.
</TABLE>
B-B111-M97-0637C
<PAGE> 274
Attachment to Letter Agreement
No. 6-1162-RLL-2281
CF6-80C2B7F Engines
Page 11
<TABLE>
<S> <C>
2.7.3 *This confidential information has been omitted and filed
separately with the Commission.
</TABLE>
B-B111-M97-0637C
<PAGE> 275
Attachment to Letter Agreement
No. 6-1162-RLL-2281
CF6-80C2B7F Engines
Page 12
<TABLE>
<S> <C>
2.7.4 *This confidential information has been omitted and filed
separately with the Commission.
</TABLE>
B-B111-M97-0637C
<PAGE> 276
Attachment to Letter Agreement
No. 6-1162-RLL-2281
CF6-80C2B7F Engines
Page 13
<TABLE>
<S> <C>
2.7.5 *This confidential information has been omitted and filed
separately with the Commission.
</TABLE>
B-B111-M97-0637C
<PAGE> 277
Attachment to Letter Agreement
No. 6-1162-RLL-2281
CF6-80C2B7F Engines
Page 14
<TABLE>
<S> <C>
2.7.6 *This confidential information has been omitted and filed
separately with the Commission.
</TABLE>
B-B111-M97-0637C
<PAGE> 278
Attachment to Letter Agreement
No. 6-1162-RLL-2281
CF6-80C2B7F Engines
Page 15
<TABLE>
<S> <C>
2.7.7 *This confidential information has been omitted and filed
separately with the Commission.
</TABLE>
B-B111-M97-0637C
<PAGE> 279
Attachment to Letter Agreement
No. 6-1162-RLL-2281
CF6-80C2B7F Engines
Page 16
<TABLE>
<S> <C>
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.
</TABLE>
B-B111-M97-0637C
<PAGE> 280
Attachment to Letter Agreement
No. 6-1162-RLL-2281
CF6-80C2B7F Engines
Page 17
<TABLE>
<S> <C>
2.7.10 *This confidential information has been omitted and filed
separately with the Commission.
</TABLE>
B-B111-M97-0637C
<PAGE> 281
Attachment to Letter Agreement
No. 6-1162-RLL-2281
CF6-80C2B7F Engines
Page 18
<TABLE>
<S> <C>
2.7.11 *This confidential information has been omitted and filed
separately with the Commission.
</TABLE>
B-B111-M97-0637C
<PAGE> 282
Attachment to Letter Agreement
No. 6-1162-RLL-2281
CF6-80C2B7F Engines
Page 19
<TABLE>
<S> <C>
3 *
4 *
4.1 *
4.2 *
</TABLE>
*This confidential information has been omitted and filed
separately with the Commission.
B-B111-M97-0637C
<PAGE> 283
Attachment to Letter Agreement
No. 6-1162-RLL-2281
CF6-80C2B7F Engines
Page 20
<TABLE>
<S> <C>
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.
</TABLE>
B-B111-M97-0637C
<PAGE> 284
Attachment to Letter Agreement
No. 6-1162-RLL-2281
CF6-80C2B7F Engines
Page 21
5 *This confidential information has been omitted and filed
separately with the Commission.
B-B111-M97-0637C
<PAGE> 285
Attachment to Letter Agreement
No. 6-1162-RLL-2281
CF6-80C2B7F Engines
Page 22
<TABLE>
<S> <C>
6 *
6.1 *
6.2 *
7 *
7.1 *
7.2 *
</TABLE>
*This confidential information has been omitted and filed
separately with the Commission.
B-B111-M97-0637C
<PAGE> 286
Attachment to Letter Agreement
No. 6-1162-RLL-2281
CF6-80C2B7F Engines
Page 23
<TABLE>
<S> <C>
7.3 *
7.4 *
7.5 *
7.6 *
</TABLE>
*This confidential information has been omitted and filed
separately with the Commission.
B-B111-M97-0637C
<PAGE> 287
Attachment to Letter Agreement
No. 6-1162-RLL-2281
CF6-80C2B7F Engines
Page 24
<TABLE>
<S> <C>
7.7 *
7.8 *
7.9 *
7.10 *
7.11 *
</TABLE>
*This confidential information has been omitted and filed
separately with the Commission.
B-B111-M97-0637C
<PAGE> 288
Attachment to Letter Agreement
No. 6-1162-RLL-2281
CF6-80C2B7F Engines
Page 25
<TABLE>
<S> <C>
7.12 *
8 *
8.1 *
8.2 *
</TABLE>
*This confidential information has been omitted and filed
separately with the Commission.
B-B111-M97-0637C
<PAGE> 289
Attachment to Letter Agreement
No. 6-1162-RLL-2281
CF6-80C2B7F Engines
Page 26
<TABLE>
<S> <C>
8.3 *
8.4 *
8.5 *
8.6 *
8.7 *
8.8 *
</TABLE>
*This confidential information has been omitted and filed
separately with the Commission.
B-B111-M97-0637C
<PAGE> 290
[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
<PAGE> 291
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
<PAGE> 292
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
<PAGE> 293
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
<PAGE> 294
[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
<PAGE> 295
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
<PAGE> 296
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
<PAGE> 297
[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.
<PAGE> 298
*This confidential
information has been
omitted and filed
separately with the
Commission.
Sincerely,
/s/ John B. Hayhurst
<PAGE> 299
Attachment A
*This confidential
information has been
omitted and filed
separately with the
Commission.
Rev-C 1
<PAGE> 300
Attachment A
*This confidential
information has been
omitted and filed
separately with the
Commission.
Rev-C 2
<PAGE> 301
Attachment B
*This confidential
information has been
omitted and filed
separately with the
Commission.
Rev.-B 1
<PAGE> 302
Attachment B
*This confidential
information has been
omitted and filed
separately with the
Commission.
Rev.- B 2
<PAGE> 303
*This confidential
information has been
omitted and filed
separately with the
Commission.
<PAGE> 304
[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
<PAGE> 305
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
<PAGE> 306
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
<PAGE> 307
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
<PAGE> 308
[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
<PAGE> 309
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
<PAGE> 1
EXHIBIT 10.6
AIRCRAFT GENERAL TERMS AGREEMENT
AGTA-DAL
BETWEEN
THE BOEING COMPANY
AND
DELTA AIR LINES, INC.
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page Number
ARTICLES
<S> <C> <C>
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.
</TABLE>
AGTA-DAL
i
<PAGE> 3
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).
1
AGTA-DAL
<PAGE> 4
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.
2
AGTA-DAL
<PAGE> 5
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%
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%
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
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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<PAGE> 17
*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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<PAGE> 19
*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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<PAGE> 20
*This confidential information
has been omitted and filed
separately with the Commission.
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<PAGE> 21
*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
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
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.
DATED AS OF October 21, 1997
-----------------
DELTA AIR LINES, INC.
By /s/ Leo F. Mullin
-------------------------------------
Its President and Chief Executive Officer
-------------------------------------
THE BOEING COMPANY
By /s/ R. B. Woodard
-------------------------------------
Its President
-------------------------------------
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<PAGE> 36
EXHIBIT A
TO
AIRCRAFT GENERAL TERMS AGREEMENT
AGTA-DAL
BETWEEN
THE BOEING COMPANY
AND
DELTA AIR LINES, INC.
BUYER FURNISHED EQUIPMENT PROVISIONS DOCUMENT
A
AGTA-DAL i
<PAGE> 37
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.
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.
A-4
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<PAGE> 41
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
i
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<PAGE> 42
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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<PAGE> 46
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
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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:
P = CT
---
144
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.
C-4-1
AGTA-DAL
<PAGE> 73
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.
C-5-1
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<PAGE> 74
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.
C-5-2
AGTA-DAL
<PAGE> 75
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.
C-6-1
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<PAGE> 76
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.
C-6-2
AGTA-DAL
<PAGE> 77
EXHIBIT D
TO
AIRCRAFT GENERAL TERMS AGREEMENT
AGTA-DAL
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
i
AGTA-DAL
<PAGE> 78
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
D-1
AGTA-DAL
<PAGE> 79
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
D-2
AGTA-DAL
<PAGE> 80
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.
D-3
AGTA-DAL
<PAGE> 81
EXHIBIT E
TO
AIRCRAFT GENERAL TERMS AGREEMENT
AGTA-DAL
BETWEEN
THE BOEING COMPANY
AND
DELTA AIR LINES, INC.
AIRCRAFT DELIVERY REQUIREMENTS AND RESPONSIBILITIES
i
AGTA-DAL
<PAGE> 82
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.
E-1
AGTA-DAL
<PAGE> 83
(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.
<TABLE>
<CAPTION>
AIRCRAFT MODEL FUEL PROVIDED
-------------- -------------
<S> <C>
737 1,000
747 4,000
757 1,600
767 2,000
777 3,000
</TABLE>
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.
E-2
AGTA-DAL
<PAGE> 84
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.
E-3
AGTA-DAL
<PAGE> 85
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
i
AGTA-DAL
<PAGE> 86
*This confidential information
has been omitted and filed
separately with the Commission.
F-1
AGTA-DAL
<PAGE> 87
*This confidential information
has been omitted and filed
separately with the Commission.
F-2
AGTA-DAL
<PAGE> 88
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:
<TABLE>
<CAPTION>
INSURER POLICY NO. PARTICIPATION
- ------- ---------- -------------
<S> <C> <C>
</TABLE>
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
<PAGE> 89
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).
<TABLE>
<S> <C> <C>
(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) *
</TABLE>
(In regard to all other models and/or derivatives, to be specified by Boeing).
App. 1
2
AGTA-DAL
<PAGE> 90
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
3
AGTA-DAL
<PAGE> 91
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
4
AGTA-DAL
<PAGE> 92
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
1
AGTA-DAL
<PAGE> 93
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
2
AGTA-DAL
<PAGE> 94
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
3
AGTA-DAL
<PAGE> 95
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
4
AGTA-DAL
<PAGE> 96
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
5
AGTA-DAL
<PAGE> 97
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
6
AGTA-DAL
<PAGE> 98
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
1
AGTA-DAL
<PAGE> 99
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
By
-------------------------------
Its
------------------------------
Dated
----------------------------
Aircraft Manufacturer's Serial Number
-------------------
App. 3
2
AGTA-DAL
<PAGE> 100
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
1
AGTA-DAL
<PAGE> 101
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
By
------------------------------
Its
------------------------------
Dated
----------------------------
Aircraft Manufacturer's Serial Number
-------------
App. 4
2
AGTA-DAL
<PAGE> 102
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
1
AGTA-DAL
<PAGE> 103
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
2
AGTA-DAL
<PAGE> 104
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
1
AGTA-DAL
<PAGE> 105
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.
By
-------------------------------
Its
------------------------------
Dated
----------------------------
App. 6
2
AGTA-DAL
<PAGE> 106
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
By
-------------------------------
Its
------------------------------
Dated
----------------------------
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
By
-------------------------------
Its
------------------------------
Dated
----------------------------
Aircraft Manufacturer's Serial Number
-------------
App. 6
3
AGTA-DAL
<PAGE> 107
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
1
AGTA-DAL
<PAGE> 108
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
2
AGTA-DAL
<PAGE> 109
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
3
AGTA-DAL
<PAGE> 110
SAMPLE
Notice of Option Exercise
===============================================================================
DELTA AIR LINES INC. LETTERHEAD
===============================================================================
[ 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:
<TABLE>
<CAPTION>
Scheduled Delivery Aircraft Quantity
------------------ -----------------
<S> <C>
</TABLE>
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
1
AGTA-DAL
<PAGE> 111
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
2
AGTA-DAL
<PAGE> 112
SAMPLE
*This confidential information
has been omitted and filed
separately with the Commission.
App. 9
1
AGTA-DAL
<PAGE> 113
SAMPLE
*This confidential information
has been omitted and filed
separately with the Commission.
App. 9
2
AGTA-DAL
<PAGE> 1
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)
<TABLE>
<CAPTION>
1997 1996
------- -------
<S> <C> <C>
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
======= =======
</TABLE>
<PAGE> 2
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)
<TABLE>
<CAPTION>
1997 1996
------- -------
<S> <C> <C>
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
======= =======
</TABLE>
<PAGE> 1
EXHIBIT 12
DELTA AIR LINES, INC.
STATEMENT REGARDING COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(In Millions, except ratios)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
Six Months Six Months
Ended Ended
December 31, December 31,
1997 1996
------------ ------------
<S> <C> <C>
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
- -----
</TABLE>
<PAGE> 1
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.
Arthur Andersen LLP
- ------------------------------------
Atlanta, Georgia
January 30, 1998
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
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.
</LEGEND>
<MULTIPLIER> 1,000,000
<S> <C>
<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
0
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
</TABLE>
