Delta Airlines 2015 Annual Report Download - page 166

Company’s actual performance results meet or exceed Threshold level with respect to Average Annual Operating Income
Margin, Customer Service Performance and/or Return on Invested Capital, as applicable and as described below. For
purposes of Average Annual Operating Income Margin, the Company’s performance is compared against the Composite
PerformanceoftheIndustryCompositeGroup.
(B)Committee’s Authority. In determining the Average Annual Operating Income Margin for Delta and each
member of the Industry Composite Group and the Return on Invested Capital for Delta, the Committee shall make such
adjustments with respect to any subject company as is necessary to ensure the results are comparable, including, without
limitation, differences in accounting policies, practices, guidelines, reclassifications or restatements (for example, fuel
hedging,purchaseaccountingadjustmentsassociatedwithmergers,acquisitionsordivestures,orfreshstartaccountingasa
resultof emergencefrom bankruptcy).Without limitingthe generalityof the forgoing,the Committeeshall (i)make such
determinationsbasedonfinancialdatafiledbythesubjectcompanywiththeU.S.DepartmentofTransportationorotherwise
and(ii)excludefromanycalculationanyitemofgain,loss,orexpensetobespecialorunusualinnatureorinfrequentin
occurrence.
(C)ImpactofCertainEvents.AcompanyshallbeautomaticallyremovedfromtheIndustryCompositeGroupin
the event that any of the following occur during or with respect to the Performance Period: (i) such company ceases to
maintainordoesnottimelypreparepubliclyavailablestatementsofoperationspreparedinaccordancewithGAAP;(ii)such
companyisnotthesurvivingentityinanymerger,consolidation,orothernon-bankruptcyreorganization(orsurvivesonlyas
asubsidiaryofanentityotherthanapreviouslywhollyownedsubsidiaryofsuchcompany);(iii)suchcompanysells,leases,
or exchanges all or substantially all of its assets to any other person or entity (other than a previously wholly owned
subsidiary of such company); (iv) such company is dissolved and liquidated; or (v) more than 20% of such company's
revenues(determinedonaconsolidatedbasisbasedontheregularlypreparedandpubliclyavailablestatementsofoperations
ofsuchcompanypreparedinaccordancewithGAAP)foranyfiscalyearofsuchcompanyareattributabletotheoperationof
businessesotherthansuchcompany'sairlinebusinessandsuchcompany does notprovide publicly availablestatements of
operationswithrespecttoitsairlinebusinessthatareseparatefromthestatementsofoperationsprovidedwithrespecttoits
otherbusinesses.
(D)TransactionsBetweenAirlines.Totheextentreasonablypracticable,intheeventofamerger,consolidation,or
similartransactionduringthePerformancePeriodbetweenDeltaandanyotherairline,includingamemberoftheIndustry
CompositeGroup,orbetweenanymemberoftheIndustryCompositeGroupandanyotherairline,includinganothermember
oftheIndustryCompositeGroup(an“AirlineMerger”),AverageAnnualOperatingIncomeMarginforanysuchcompany
involvedinanAirlineMergerwillbecalculatedonacombined basis as if theAirlineMergerhadoccurred on January1,
2016,removingtheeffectsofpurchaseaccounting-relatedadjustments.Furthermore,totheextentreasonablypracticable,in
the event of an acquisition or divestiture, or similar transaction during the Performance Period between Delta and any
regionalcarrieror betweenanymember of theIndustryComposite Group andanyregional carrier(a “RegionalCarrier
Transaction ”), Average Annual Operating Income Margin and, as applicable, Return on Invested Capital for any such
companyinvolvedinaRegionalCarrierTransactionwillbecalculatedtoremovetheimpactofanyreclassificationsofcosts
from (or to) such company’s presentation of contract carrier expense to (or from) the other expense line items on the
statementofoperations(determinedbasedontheregularlypreparedandpubliclyavailablestatementsofoperationsofsuch
companypreparedinaccordancewithGAAP).
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