Delta Airlines 2003 Annual Report Download - page 262

agreed, among other things, to make certain contributions in 2002, 2003 and 2004
to an employee grantor trust established by Key Employee; and
WHEREAS, Key Employee and the Company have agreed that the 2002 excess
benefit agreement should be amended and restated in its entirety as this
Agreement, and have also agreed that the Company will not make any further
contributions to the employee grantor trust established by Key Employee,
including the contribution to be made in 2004 under the 2002 excess benefit
agreement; and
WHEREAS, in exchange for participation in the Plans and the benefits
provided under this Agreement, and on behalf of himself or herself, and his or
her beneficiaries and Eligible Family Members, by execution of this Agreement,
Key Employee agrees that this Agreement supersedes, terminates and cancels any
and all previous excess benefit agreements with the Company he or she may have
entered into (except as provided in Section 20);
NOW, THEREFORE, the parties hereby agree as follows:
1. Definitions. Unless specifically defined in this Agreement, or
indicated otherwise, capitalized terms used in this Agreement shall have the
meaning given those terms in the Retirement Plan or Disability and Survivorship
Plan. The following definitions shall apply herein:
Actuarial Equivalent. An amount is the Actuarial Equivalent of any
other amount if the actuarial reserve required to provide the same is equal to
the actuarial reserve required to provide such other amount. The parties
acknowledge that, in selecting appropriate factors to determine actuarial
equivalence, the immediate taxability of any amounts paid hereunder as well as
the demographics of the covered group must be taken into account; otherwise, Key
Employee will not receive the same value over time under this Agreement as he or
she would have had had the Restrictions not applied and all amounts payable to
Key Employee been paid from a qualified plan. Therefore, it is not appropriate
to use an interest rate benchmark or mortality table that does not sufficiently
consider these factors. Unlike distributions from qualified plans, which can be
tax deferred, amounts paid hereunder are taxable in the year paid; therefore the
interest rate should reflect that immediate taxation. An accepted way of
recognizing this distinction is to use a post tax interest benchmark. With
respect to mortality, the parties acknowledge that the participants in the Plans
consist solely of white collar employees and are relatively small in number. In
such a case, it is appropriate to use a mortality table which reflects this
demographic. Therefore, the factors to use to determine actuarially equivalence
under this Agreement shall be: (a) interest: the rate equal to the then current
effective yield of the Merrill Lynch AAA Rated Municipal Revenue Bond Index,
Merrill Lynch Ticker: URA1 (or the yield of a similar index determined by the
Committee), determined as of the date of retirement, termination of employment,
or death, as the case may be; provided, however, that if such date falls on a
day when the U.S. fixed income markets are closed or is a day on which the index
is being rebalanced, determined on the next following business day, in each case
with such rate reduced for any applicable state taxes; (b) mortality: the unisex
mortality rate using the RP-2000
- 2 -