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WSJ Article - DAL/NWA breakup fees. Steenlands' salary

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Max Powers

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COMPANIES
Dow Jones, Reuters
Northwest Airlines Corp. (NWA)

PRICE
CHANGE
9.69
0.20
4/18

Delta Air Lines Inc. (DAL)

PRICE
CHANGE
8.75
0.20
4/18

Northwest, Delta Disclose Breakup Fee

[FONT=times new roman,times,serif][FONT=times new roman,times,serif]By SUSAN CAREY
April 19, 2008; Page A7
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If Northwest Airlines Corp. or Delta Air Lines Inc. wanted to pull out of their merger agreement reached on Monday, one would have to pay the other a breakup fee of $165 million in certain circumstances, Northwest said in a Securities and Exchange Commission filing Friday.
HC-GI574_Steenl_20060824122845.gif
The 8-K document also disclosed that Doug Steenland, chief executive of Northwest, has waived his right to leave Northwest during the month of June and take $7.8 million in cash and benefits, including accelerated vesting of his supplemental pension. In return for staying on through the antitrust review of the proposed deal and potentially after that if the transaction is blocked by regulators, Mr. Steenland was awarded 375,000 restricted retention units, according to the filing.
If the deal closes, the units would immediately vest at the current market value of Northwest common stock, up to a cap of $22 a share. Based on Friday's closing stock price of $9.69, the units are valued at about $3.64 million. If the merger is terminated, Mr. Steenland would be eligible to receive the units over a four-year vesting schedule, so long as he remained employed at Northwest. If he left before then, he would forfeit the unvested units. The CEO also agreed to a one-year noncompete clause.
In order to retain its salaried employees during the antitrust review period, Northwest said it will pay them bonuses of 20% of their base salaries at the time of the closing. The SEC filing also said the company set aside up to $25 million to make additional retention payments to nonofficer employees its discretion during the review period.
Finally, the company amended some covenants of its existing cash incentive plan, its stock incentive plan and entered into updated management compensation agreements with four executives, two to reflect their earlier promotions.
 

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