Exhibit 10.1


 


NORTHWEST AIRLINES CORPORATION


     STOCK INCENTIVE PLAN


 


Deferred Stock Award Agreement


 


THIS DEFERRED
STOCK AWARD AGREEMENT (the “Agreement”) is entered into as of                  ,
by and between NORTHWEST AIRLINES CORPORATION, a Delaware corporation (the “Company”),
and                  
(the “Grantee”), an employee of the Company or a subsidiary of the Company,
pursuant to and subject to the terms and conditions of the Northwest Airlines
Corporation      Stock Incentive Plan (as amended, the “Plan”).


 


WHEREAS, pursuant to the terms and conditions of the Plan and the terms
and conditions contained herein, the Company has
granted the Grantee on the Grant Date (as defined herein) a Deferred Stock
award as an inducement for the Grantee to remain an employee of the Company or
its subsidiary and to retain and motivate the Grantee during his employment
with the Company and its subsidiaries.


 


NOW, THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, receipt of which is hereby
acknowledged, the Company and the Grantee hereby agree as follows:


 


Section
1.  Definitions


 


Unless
otherwise defined in this Agreement, all capitalized terms used herein shall
have the meanings attributed to them in the Plan.


 


1.1                                 “Award”
shall mean the Deferred Stock award granted to the Grantee as of the Grant Date
on the terms and conditions set forth in this Agreement.


 


1.2                                 “Cause”
shall mean with respect to the termination of the Grantee’s employment with the
Company or a subsidiary of the Company: (a) an act or acts of personal
dishonesty by the Grantee intended to result in substantial personal enrichment
of the Grantee at the expense of the Company or its subsidiary, (b) an act or
acts of personal dishonesty by the Grantee intended to cause substantial injury
to the Company or its subsidiary, (c) material breach (other than as a result
of a Disability) by the Grantee of the Grantee’s obligations under the terms and
conditions of the Grantee’s employment, which action was (i) undertaken without
a reasonable belief that the action was in the best interests of the Company or
its subsidiary and (ii) not remedied within a reasonable period of time after
receipt of written notice from the Company or its subsidiary specifying the
alleged breach, or (d) the conviction of the Grantee of a felony.


 


1.3                                 “Change
in Control” shall mean any one of the following:


 


(a)                                  (i)
The acquisition by any individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934 (the “Exchange
Act”)) (a “Person”), other than one or more Permitted Holders or their Related
Parties or


 


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any group
comprised exclusively of Permitted Holders or their Related Parties, of
beneficial ownership (within the meaning of Rule 13d-3 and 13d-5 promulgated
under the Exchange Act, except that such person shall be deemed to have “beneficial
ownership” of all shares that any such Person has the right to acquire, whether
such right is exercisable immediately or only after the passage of time) of 20%
or more (or, if such Person is an Institutional Investor (as such term is
defined in the Rights Agreement dated as of November 20, 1998 between Northwest
Airlines Corporation and Norwest Bank Minnesota, N.A.), 25% or more), of either
(A) the then outstanding shares of Common Stock of the Company (or its
successor by merger, consolidation or purchase of all or substantially all of
its assets) (the “Outstanding Common Stock”) or (B) the combined voting power
of the then outstanding voting securities of the Company (or its successor by
merger, consolidation or purchase of all or substantially all of its assets)
entitled to vote generally in the election of directors (the “Outstanding
Voting Securities”), and (ii) the Permitted Holders or their Related Parties
collectively “beneficially own” (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) a lesser percentage of that which is described in each
of clause (A) and  (B) above and do not
have the right or ability by voting power, contract or otherwise to elect or
designate for election a majority of the board of directors of the Company or
such successor;


 


(b)                                 Individuals
who, as of the date hereof, constitute the Board of Directors of the Company
(the “Incumbent Board”) cease for any reason to constitute at least a majority
of such Board; provided, however, that any
individual becoming a director subsequent to the date hereof, whose election,
or nomination for election by the Company’s stockholders, was approved by a
vote of at least a majority of the directors then comprising the Incumbent
Board shall be considered as though such individual were a member of the
Incumbent Board, but excluding, for this purpose, any such individual whose
initial assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of directors or other
actual or threatened solicitation of proxies or consents by or on behalf of a
Person other than the Board of Directors of the Company;


 


(c)                                  Consummation
by the Company of a reorganization, merger or consolidation or sale or other
disposition of all or substantially all of the assets of the Company (a “Business
Combination”), in each case, unless, following such Business Combination, (i)
all or substantially all of the individuals and entities who were the
beneficial owners, respectively, of the Outstanding Common Stock and
Outstanding Voting Securities immediately prior to such Business Combination
beneficially own, directly or indirectly, more than 50% of, respectively, the
then outstanding shares of common stock and the combined voting power of the
then outstanding voting securities entitled to vote generally in the election
of directors, as the case may be, of the corporation resulting from such
Business Combination (including, without limitation, a corporation which as a
result of such transaction owns the Company or all or substantially all of the
Company’s assets either directly or through one or more subsidiaries) in
substantially the same proportions as their ownership immediately prior to such
Business Combination of the Outstanding Common Stock and Outstanding Voting
Securities, as


 


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the case may
be, and (ii) at least a majority of the members of the board of directors of
the corporation resulting from such Business Combination were members of the
Incumbent Board at the time of the execution of the initial agreement or of the
action of such Board providing for such Business Combination; or


 


(d)  Approval by the stockholders of the Company of a
complete liquidation or dissolution of the Company.


 


1.4                                 “Committee”
shall mean the Compensation Committee of the Company’s Board of Directors, or a
subcommittee thereof.


 


1.5                                 “Common
Stock” shall mean the common stock, par value $.01 per share, of the
Company or such other securities or property as may become subject to the Award
as a result of an adjustment made pursuant to Section 7 hereof.


 


1.6                                 “Deferred
Stock” shall mean the right to receive on the date set forth herein and
subject to the terms and conditions set forth in this Agreement the number of
shares of Common Stock specified in this Agreement.


 


1.7                                 “Disability”
shall mean the Grantee’s physical or mental condition which prevents continued
performance of his duties and for which the Grantee establishes by medical
evidence that such condition will be permanent and continuous during the
remainder of the Grantee’s life or is likely to be of at least three (3) years’
duration.


 


1.8                                 “Good
Reason” shall mean any one or more of the following:


 


(a)  a material reduction in Grantee’s
compensation or other benefits (other than as may be permitted in any agreement
between the Company or its subsidiary and the Grantee;


 


(b)  any material change in Grantee’s job responsibilities;
provided that, so long as Grantee retains a substantial part of Grantee’s then
current oversight responsibility, a transfer of a portion of such oversight
responsibility of Grantee shall not in and of itself constitute a material
change in Grantee’s job responsibilities; or


 


(c)  the relocation of the Company’s principal executive
offices to a location outside the Minneapolis-St. Paul Metropolitan Area.


 


In order for a Termination of
Employment to be considered for Good Reason, such termination must occur within
one (1) year after the event giving rise to such Good Reason.  Grantee’s continued employment shall not
constitute consent to, or a waiver of rights with respect to, any circumstance
constituting Good Reason hereunder.


 


1.9                                 “Grant
Date” shall mean            .


 


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1.10                           “Permitted
Holders” means each of Alfred A. Checchi, Gary L. Wilson, Frederic V. Malek
or Richard C. Blum and Richard C. Blum & Associates—NWA Partners, L.P., and
also includes the Company and any employee benefit plan (or related trust)
sponsored or maintained by the Company or any corporation controlled by the
Company.


 


1.11                           “Related
Parties” with respect to any Permitted Holders means (i) any spouse or
immediate family member of such Permitted Holder, any trust created primarily
for the benefit of any such individual or such individual’s estate, executor,
administrator, committee or other personal representatives or beneficiaries; or
(ii) any trust, corporation, partnership or other entity, the beneficiaries,
stockholders, partners, owners or Persons beneficially holding a majority

controlling interest of which consist of one or more of such Permitted Holders and/or
such other Person referred to in the immediately preceding clause (i).


 


1.12                           “Secretary”
shall mean the Secretary of the Company.


 


1.13                           “Termination
of Employment” shall mean the time when the employee-employer relationship
between the Grantee and the Company or its subsidiary ceases for any reason
whatsoever. The Grantee’s employment shall not be deemed to have been
terminated because of absence from active employment on account of temporary
illness or during authorized vacation or during temporary leaves of absence
from active employment granted by the Company or its subsidiary.


 


1.14                           “Vesting
Date(s)” shall mean                         .


 


1.15                           “Vesting
Period(s)” shall mean                         .


 


Section
2.  The Deferred Stock Award


 


For good and
valuable consideration, on the Grant Date the Company granted to the Grantee
pursuant to the Plan an Award of Deferred Stock with respect to               
(          ) shares of Common
Stock (which shares may be adjusted pursuant to Section 7 below) subject to the
terms and conditions set forth in this Agreement.


 


Section
3.  Vesting; Forfeiture


 


3.1                               Vesting. 
Subject to the terms and conditions of this Agreement, the shares of
Deferred Stock shall vest as follows:           [describe vesting schedule]             .


 


3.2                               Forfeiture; Termination of Employment.  Except as otherwise provided in this
Section 3.2 and subject to Section 3.3 hereof, if a Termination of Employment
occurs prior to a Vesting Date, all or the portion of the Award that has not
yet vested pursuant to Section 3.1 hereof shall be canceled immediately and the
Grantee shall automatically forfeit all rights with respect to all or such
portion of the shares of Deferred Stock subject to the Award as of the date of
such Termination of Employment; provided however, that (i) in the event a
Termination of Employment as a result of the Grantee’s death or Disability
occurs prior to any Vesting Date, the


 


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Grantee shall become vested on
the effective date of such Termination of Employment in                         ;
and (ii) in the event a Termination of Employment (other than in connection
with a Change in Control) by the Company other than for Cause or by the Grantee
for Good Reason occurs prior to any Vesting Date, the Grantee shall become
vested on the effective date of such Termination of Employment in                                        .


 


3.3                                 Change in Control.  Notwithstanding any other provision of this
Agreement, in the event of a Change in Control, the Deferred Stock shall vest
in accordance with the following:


 


(a)  If the Change in Control
occurs pursuant to Section 1.3(a) hereof, the Grantee shall become vested in full
in all shares of the Deferred Stock immediately upon termination of the Grantee’s
employment by the Company other than for Cause or by the Grantee with Good
Reason (i) at any time after the occurrence of the Change in Control or (ii)
before the occurrence of the Change in Control if such termination is in
connection with such Change in Control; and


 


(b)  If the Change in Control
occurs pursuant to Section 1.3(b), (c) or (d) hereof, the Grantee shall become
vested in full in all shares of the Deferred Stock immediately upon the
effective date of such Change in Control.


 


Section
4.  Restrictions on Transfer


 


Prior to
vesting of the Deferred Stock in accordance with Section 3 hereof, the Deferred
Stock is not transferable and may not be assigned, pledged or hypothecated and
shall not be subject to execution, attachment or similar process. No right or
benefit hereunder shall in any manner be liable for or subject to any debts,
contracts, liabilities or other obligations of the Grantee.


 


Section
5.  Issuance of Certificate


 


Except in the
event of a Termination of Employment described in clause (ii) of Section 3.2
hereof, promptly upon vesting of the Deferred Stock in accordance with Section
3 hereof, the Company shall cause to be issued a certificate or certificates
evidencing such vested shares and shall cause such certificate to be delivered
to the Grantee or the Grantee’s legal representatives, beneficiaries or
heirs.  In the event of a Termination of
Employment described in clause (ii) of Section 3.2 hereof (except for any
Termination of Employment that occurs in connection with a Change in Control),
the Company shall not be obligated to issue and deliver such certificate or
certificates to the Grantee until the earlier of the applicable Vesting Date or
the date the Deferred Stock vests in accordance with Section 3.3 hereof.


 


Section
6.  Securities Law Requirements


 


By accepting
the Award, the Grantee agrees that if at the time of delivery of certificates
for the Deferred Stock issued hereunder any sale of Common Stock is not covered
by an effective registration statement filed under the Securities Act of 1933
(the “Act”), the Grantee will acquire


 


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the Deferred Stock for the Grantee’s
own account and without a view to resale or distribution in violation of the
Act or any other securities law, and upon any such acquisition the Grantee will
enter into such written representations, warranties and agreements as the
Company may reasonably request in order to comply with the terms of this
Agreement, the Act or any other securities law.


 


Section
7.  Adjustments


 


In the event
of any merger, reorganization, consolidation, recapitalization, separation,
spin-off, liquidation, stock dividend, split-up, share combination or other
change in the corporate or capital structure of the Company affecting its
Common Stock (each a “Recapitalization Event”), then for all purposes
referenced herein to the Common Stock or to Deferred Stock shall mean and
include all securities or other property that holders of Common Stock are
entitled to receive in respect of shares of Common Stock by reason of each
Recapitalization Event, which securities or other property shall be treated in
the same manner and shall be subject to the same restrictions as the underlying
Deferred Stock.


 


Section
8.  Tax Withholding


 


The Company
shall have the right to (i) make deductions from the number of shares of Common
Stock otherwise deliverable upon the vesting of the shares of Deferred Stock in
accordance with Section 3 hereof in an amount sufficient to satisfy withholding
of any federal, state or local taxes required by law, or (ii) take such other
action as may be necessary or appropriate to satisfy any such tax withholding
obligations.


 


Section
9.  Award Does Not Confer Employment
or Stockholder Rights


 


  Nothing in this Agreement shall
confer upon the Grantee any right to continue in the employ of the Company or
its subsidiary or interfere in any way with the right of the Company or its
subsidiary to terminate the employment of the Grantee at any time.  The Grantee shall not have any of the rights
of a stockholder of the Company with respect to the shares of Deferred Stock
except and to the extent that, and until, such shares of Deferred Stock vest in
accordance with Section 3 hereof. The Grantee shall not be entitled to receive
any dividends with respect to the Deferred Stock which become payable during
the Vesting Period, nor shall the Grantee be entitled to vote the shares of
Deferred Stock during the Vesting Period.


 


Section
10.  General Provisions


 


10.1                           This
Agreement is made pursuant to the Plan and is subject to all of the terms and
provisions of the Plan as if the same were fully set forth herein. By
acceptance of the Award, the Grantee agrees to be bound by all of the terms,
provisions, conditions and limitations of the Plan and this Agreement.  The Grantee hereby acknowledges receipt of a
copy of the Plan.


 


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10.2                           For
purposes of the Award, the Committee in its reasonable discretion and subject
to the provisions hereof shall determine whether a Termination of Employment of
any type has occurred and such determination shall be conclusive and
determinative.


 


10.3                           The
headings of sections herein are included solely for convenience of reference
and shall not affect the meaning of any of the provisions of this Agreement.


 


10.4                           This
Agreement may be amended only by a writing executed by the parties hereto which
specifically states that it is amending this Agreement.


 


10.5                           The
laws of the State of Minnesota shall govern the interpretation, validity and
performance of the terms of this Agreement regardless of the law that might be
applied under principles of conflicts of laws.


 


10.6                           Any
suit, action or proceeding against the Grantee with respect to this Agreement,
or any judgment entered by any court in respect of any thereof, may be brought
in any court of competent jurisdiction in the State of Minnesota, as the
Company may elect in its sole discretion, and the Grantee hereby submits to the
non-exclusive jurisdiction of such courts for the purpose of any such suit,
action, proceeding or judgment.


 


10.7                           In
the event that any provision of this Agreement shall be held by any court of
competent jurisdiction illegal, invalid or unenforceable for any reason, such
provision shall be fully severable, but shall not affect the remaining
provisions of this Agreement and this Agreement shall be construed and enforced
as if the illegal, invalid or unenforceable provision had never been included
herein.


 


10.8                         All
notices and other communications provided for herein shall be in writing and
shall be deemed to have been duly given if delivered by hand (whether by
overnight courier or otherwise) or sent by registered or certified mail, return
receipt requested, postage prepaid, to the party to whom it is directed:


 


If to the
Company, to it at the following address:


 


Northwest
Airlines Corporation


2700 Lone Oak
Parkway


Dept. A1180


Eagan, MN  55121


Attn:  Secretary


 


If to the Grantee,
to him at the address set forth below under the Grantee’s signature; or at such
other address as either party shall from time to time specify by notice in
writing to the other party.


 


10.9                         This
Agreement may be executed in two or more counterparts, but all such
counterparts shall constitute but one and the same instrument.


 


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IN WITNESS
WHEREOF, this Agreement has been executed and delivered by the parties hereto.


 


NORTHWEST AIRLINES CORPORATION


 


 


	
  By:

  	
   

  	
   

  
	
  Name:

  
	
  Title:

  



 


 


GRANTEE:


 


 


	
   

  	
   

  	
   

  
	
  [insert
  Grantee’s name]

  



 


Grantee’s
Address:


 


 


 


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