Delta Airlines 2008 Annual Report Download - page 156

(iv) Definitions.
(A) "Airline Peer Group" means AMR Corporation, Continental Airlines, Inc., Southwest Airlines Co., UAL Corporation and US
Airways Group, Inc.
(B) The "Average Annual Pre-Tax Income Margin" for Delta and each member of the Airline Peer Group shall be calculated by using
the subject company's Pre-Tax Income and Total Operating Revenue for the applicable periods and the following formula: (A ÷ B ), where:
A = Pre-Tax Income for 2009 and 2010; and
B = Total Operating Revenue for 2009 and 2010.
(C) The "Conversion Formula" will apply to convert from cash to Shares the payout, if any, of a Performance Award to a person who is
an Executive Officer Participant at the time of such payout. First, the cash amount of the payout is calculated in the same manner as if the payout
is being made in cash. Next, the cash amount is converted into a number of Shares based on the following formula: A ÷ B, where:
A = the amount of the payout for the Performance Award if it is paid in cash; and
B = the closing price of a Share on the New York Stock Exchange on the date that the Committee approves the payouts, if any, of the
Performance Awards to the Executive Officer Participants following the Committee's determination of the achievement of the payout criteria
described in Section 3(b)(iii).
(D) The "Cumulative Revenue Growth" for Delta and each member of the Airline Peer Group shall be calculated by using the subject
company's Total Operating Revenue for the applicable periods and the following formula: (A + B ) ÷ C, where:
A = Total Operating Revenue for 2009 minus Total Operating Revenue for 2008;
B = Total Operating Revenue for 2010 minus Total Operating Revenue for 2009; and
C = Total Operating Revenue for 2008.
As a result of the merger (the "Merger") of a subsidiary of Delta with and into Northwest Airlines Corporation ("Northwest") on October 29,
2008, the Total Operating Revenue for Delta for 2008 will be the sum of the Total Operating Revenue for Delta and Northwest for that year, as
adjusted to eliminate intercompany transactions, classification differences and such other matters as the Committee deems in its discretion to be
necessary or advisable to prevent the enlargement or dilution of the benefits or potential benefits to be made available under Section 3(b).
(E) "GAAP" means accounting principles generally accepted in the United States of America.
(F) "Performance Period" means the period beginning on January 1, 2009 and ending on and including December 31, 2010.
(G) "Pre-Tax Income" means, subject to Section 3(c)(v)(B) below, the subject company's consolidated pre-tax income for the applicable
periods based on its regularly prepared and publicly available statements of operations prepared in accordance with GAAP, but excluding: (i) any
material asset write downs; (ii) expenses associated
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