Delta Airlines 2015 Annual Report Download - page 165

measured from the last calendar quarter preceding the Performance Period, using the following formula,
(A+B),where:
A=AdjustedBookValueofEquity;and
B=AdjustedNetDebt.
(4) “Adjusted Book Value of Equity” for Delta shall be calculated quarterly based on its regularly prepared
internalfinancialstatements(i)withaninitialstartingvalueforthequarterendingDecember31,2015(the“
InitialValue”)equaltothebookvalueofequitydeterminedinaccordancewithGAAPasofDecember31,
2015,butexcludingtheimpactofgainsorlossesasofDecember31,2015associatedwith(1)thecumulative
pension and other post-employment retirement benefits net balance recorded in AOCI; (2) the derivative
contracts and associated items net balance recorded in AOCI; and (3) the deferred tax asset valuation
allowance balance and (ii) using the following formula for each subsequent quarter thereafter, (A+B+C),
where:
A=TheInitialValue;
B =  The cumulative amount starting as of January 1, 2016  and ending as of the last day of the
applicablecalendarquarteroftheCompany’spre-taxincomedeterminedinaccordancewithGAAP,but(i)
excluding: (1)items presentin theline item“restructuring andother items”or suchsimilar lineitem; (2)
mark-to-marketadjustmentsforfuelhedgesrecordedinperiodsotherthanthesettlementperiod;and(3)other
special,unusual,ornonrecurringitemswhicharedisclosedinpubliclyavailablefilingswiththeSECand(ii)
includingexpensesduetoamortizationofpost-employmentbenefitlossesinAOCIthathaveoccurredduring
thePerformancePeriod;and
C=intheeventthattheCompanypaysadividendorissuesorrepurchasesadditionalCommonStock
forcashduringthePerformancePeriod(butexcludingtheexerciseofanyemployeestockoptionforcashor
anyotherissuanceofCommonStocktoemployees),(i)thegrosscashproceedsoftheequityissuanceor(ii)
thegrosscashpaymentsfortheequityrepurchaseordividends,beforeadjustmentforanyapplicablefeesor
chargesassociatedtherewith.
(5) “AdjustedNetDebt”forDeltashallbecalculatedquarterlybasedonitsregularlypreparedinternalfinancial
statementsusingthefollowingformula(A+B-C),subjecttoSection4(b)(v)(B),where:
A= Total grosslongterm debtand capitalleases(including currentmaturities)that reflect Delta’s
actualobligationstolendersorlessors,includinganyadjustmentsfromthebookvaluetoreflectpremiumsor
discountsthatmaybeamortizing;
B=Annualaircraftrentexpensemultipliedbyseven;and
C=Unrestrictedcash,cashequivalentsandshort-terminvestments.
(v)Vesting.
(A)General.Subjecttothetermsofthe2007PerformancePlan,the2016LTIP,andallotherconditionsincluded
inanyapplicableAwardAgreement,thePerformanceAwardshallvest,asdescribedinthisSection4(b)(v),asoftheendof
thePerformancePeriodtotheextentthatthe
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