delta_8k-ex1001.htm


    Exhibit 10.1

     

     

    
      DELTA AIR LINES, INC. MERGER
AWARD PROGRAM

       

      


       

      1.           Purpose. The Merger Award Program
(the “MAP”) is an
equity-based long-term incentive program sponsored by Delta Air Lines, Inc.
(“Delta” or the “Company”) for key employees of
Delta, Northwest Airlines Corporation (“Northwest”) and their
respective subsidiaries.  The MAP is intended (a) to retain key
employees following the merger of a subsidiary of Delta with and into Northwest
(the “Merger”); and (b)
to align their interests with Delta’s and Northwest’s other employees and
stakeholders.

      


      The MAP
is being adopted under the Delta Air Lines, Inc. 2007 Performance Compensation
Plan (the “2007 Performance
Plan”).  It is subject to the terms of the 2007 Performance
Plan and a Participant’s MAP Award Agreement (“Award
Agreement”).

      


      Capitalized
terms that are used but not defined in the MAP shall have the meaning ascribed
to them in the 2007 Performance Plan.  For purposes of the MAP, the
definitions of  “Change in Control,” “Good Reason,” and “Retirement” as set forth in the 2007
Performance Plan are hereby replaced or modified under Section 5 below, and
shall apply as set forth in Section 5 in lieu of the definitions of these terms
in the 2007 Performance Plan or as modified, as applicable.

      


      The MAP
shall become effective at the closing of the Merger.  Prior to such
closing, no Awards may be granted under the MAP.

      


      2.           Individual Award
Agreements.  Any person offered an Award under the MAP may be
required to sign an individual Award Agreement which includes the terms of the
Award.  Execution by such person of his or her Award Agreement will be
a prerequisite to the effectiveness of the Award under the MAP and to the
person’s becoming a Participant in the MAP.

       

      3.           Awards.

       

      (a)           Restricted
Stock.

      


      (i)           Award
Grant.  A Participant
may receive Restricted Stock as specified in the Participant’s Award Agreement
(the “Restricted
Stock”).

      


      (ii)         Grant
Date.  The
Grant Date of the Restricted Stock will be determined by the Committee and set
forth in a Participant’s Award Agreement.

      


      (iii)        Restrictions. Until
the restrictions imposed by this Section 3(a) (the “Restrictions”) have lapsed
pursuant to Section 3(a)(iv) or (v) below, a Participant will not be permitted
to sell, exchange, assign, transfer, pledge or otherwise dispose of the
Restricted Stock and the Restricted Stock will be subject to forfeiture as set
forth below.

      


      (iv)        Lapse of
Restrictions—Continued Employment. 
Subject to the terms of the 2007 Performance Plan and the MAP, the Restrictions
shall lapse and be of no further force or effect at the following times with
respect to the following percentages of Shares included in any Award of
Restricted Stock under the MAP:

      

        
          
             


          

          
            
            

            
              

            

          

          
             


          

        



      20% on
May 1, 2009 (“First Installment
Date”);

      20% on
November 1, 2009 (“Second
Installment Date”);

      20% on
May 1, 2010 (“Third Installment
Date”); and

      40% on
November 1, 2011 (“Fourth
Installment Date”). 1

      


      (v)         Lapse of
Restrictions/Forfeiture upon Termination of Employment.   The
Restricted Stock and the Restrictions set forth in this Section 3(a) are subject
to the following terms and conditions:

      


      
        (A)         
Without Cause or For Good
Reason.  Upon a Participant’s Termination of Employment by the
Company without Cause or by the Participant for Good
Reason  (including the Termination of Employment of the Participant if
he is employed by an Affiliate at the time the Company sells or otherwise
divests itself of such Affiliate), the Restrictions shall immediately lapse and
be of no further force or effect as of the date of such Termination of
Employment.

      

       

      (B)           Voluntary
Resignation.  Upon a Participant’s Termination of Employment by
reason of a voluntary resignation (other than for Good Reason or Retirement),
any portion of the Restricted Stock subject to the Restrictions shall be
immediately forfeited.

       

      (C)           Retirement.  Subject
to Section 3(a)(v)(F) below, upon a Participant’s Termination of Employment by
reason of Retirement, with respect to any portion of the Restricted Stock
subject to the Restrictions, the Restrictions shall immediately lapse on the Pro
Rata RS Portion as of the date of such Termination of
Employment.  Upon a Participant’s Termination of Employment by reason
of Retirement, any Restricted Stock that remains subject to the Restrictions,
other than the Pro Rata RS Portion, shall be immediately forfeited.

      


      “Pro Rata RS Portion” means,
with respect to any portion of the Restricted Stock that is subject to the
Restrictions at the time of a Participant’s Termination of Employment by reason
of Retirement, the number of Shares with respect to which the Restrictions would
have lapsed on each respective future Installment Date multiplied by a
fraction:

       

      
        
          	 	
                  (i)   

                	
                  the
      numerator of which is the number of calendar months2 from the Grant Date
      to the date of such Termination of Employment, rounded up for any partial
      month; and

                


        

      

       

      

        

      

      
        1  If
this formula results in any fractional Share allocation to any Installment Date,
the number of Shares with respect to which the Restrictions lapse on the earlier
Installment Date(s) will be rounded up, and the number of shares with respect to
which the Restrictions lapse on the later Installment Date(s) will be rounded
down, to the nearest whole Share to the extent necessary so that only full
Shares are covered by each Installment Date.  For example, if 1,222
Shares are included in an award of Restricted Stock, the Restrictions will lapse
with respect to (a) 245 Shares on the First and Second Installment Dates; (b)
244 Shares on the Third Installment Date; and (c) 488 Shares on the Fourth
Installment Date.

      

      
        


        2 For
purposes of the MAP, one calendar month is calculated from the date of
measurement to the same or closest numerical date occurring during the following
month.  For example, one calendar month from January 31, 2009 will
elapse as of February 28, 2009, two months will elapse on March 31, 2009, and so
on.

      


      
        
           


        

        
          2

          
            

          

        

        
           


        

      


      
        
          	
                	
                  (ii)

                	
                  the
      denominator of which is the number of calendar months from the Grant Date
      to each applicable Installment Date, rounded up for any partial
      month.3

                


        

      

       

      (D)         
Death or
Disability.  Upon a Participant’s Termination of Employment due
to death or Disability, the Restrictions shall immediately lapse and be of no
further force or effect as of the date of such Termination of
Employment.

      


      (E)         
For
Cause.  Upon a Participant’s Termination of Employment by the
Company for Cause, any portion of the Restricted Stock subject to the
Restrictions shall be immediately forfeited.

      


      (F)         
Retirement-Eligible
Participants Who Incur a Termination of Employment for Other
Reasons.  If a Participant who is eligible for Retirement is,
or would be, terminated by the Company without Cause, such Participant shall be
considered to have been terminated by the Company without Cause for purposes of
the MAP rather than having retired, but only if the Participant acknowledges
that, absent Retirement, the Participant would have been terminated by the
Company without Cause.  If, however, the employment of a Participant
who is eligible for Retirement is terminated by the Company for Cause, then
regardless of whether the Participant is considered as a retiree for purposes of
any other program, plan or policy of the Company, for purposes of the MAP, the
Participant’s employment shall be considered to have been terminated by the
Company for Cause.

      


       

      (vi)           Dividends.  In the event a
cash dividend shall be paid in respect of Shares at a time the Restrictions on
the Restricted Stock have not lapsed, the Participant shall receive the
dividend.  The Restrictions shall not apply to any such
dividend.

       

      (b)           Stock
Option.

      


      (i)         
Award
Grant.  A Participant
may receive a Non-Qualified Stock Option covering the number of Shares specified
in the Participant’s Award Agreement (the “Option”).

      


      (ii)         Grant
Date.  The
Grant Date of the Option will be determined by the Committee and set forth in a
Participant’s Award Agreement.

      


      

        

      

      
        3 For example, assume a
Participant received 1,000 Shares of Restricted Stock on December 1, 2008 and retires on April 15,
2009 (the “Retirement
Date”).  In these circumstances, the number of calendar months
from (a) the Grant Date to the Retirement Date is 5; and (b) the Grant Date to
the First, Second, Third and Fourth Installment Dates is 5, 11, 17, and 35,
respectively.  As a result, the Restrictions will lapse on the
Participant’s Retirement Date as follows:

         

        ●  200
Shares × 5/5 = 200

        ●  200
Shares × 5/11 = 91

        ●  200
Shares × 5/17 = 59

        ●  400
Shares × 5/35 = 58

        Total:   408
Shares

         

        If this
formula results in any fractional Share, the Pro Rata RS Portion will be rounded
up to the nearest whole Share.  Accordingly, in this example, the
Restrictions will lapse on 408 Shares on the Retirement Date.  The
remaining 592 Shares will be forfeited on the Retirement Date.

         

      


      
        
           


        

        
          3

          
            

          

        

        
           


        

      


      (iii)        Exercise
Price.  The
exercise price of the Option is the closing price of a Share on the New York
Stock Exchange on the Grant Date.

      


      (iv)        Exercise
Period. 
Subject to the terms of the 2007 Performance Plan and the MAP, the Option (a)
shall become exercisable with respect to 20% of the Shares on each of the First,
Second and Third Installment Dates and with respect to 40% of the Shares on the
Fourth Installment Date,4 and (b) shall be
exercisable through and including the day immediately preceding the tenth
anniversary of the Grant Date (“Expiration
Date”).

      


      (v)         Change
in Exercisability and Exercise Period upon Termination of Employment.  The
exercisability of the Option and the exercise period set forth in Section
3(b)(iv) above is subject to the following terms and conditions:

      


      
        (A)         
Without Cause or For Good
Reason.  Upon a Participant’s Termination of Employment by the
Company without Cause or by the Participant for Good Reason (including the
Termination of Employment of the Participant if he is employed by an Affiliate
at the time the Company sells or otherwise divests itself of such Affiliate),
any portion of the Option that is not exercisable at the time of such
Termination of Employment shall become exercisable, and the entire then
exercisable portion of the Option shall be exercisable, during the
period:  (i) beginning on the date of such Termination of Employment;
and (ii) ending on the earlier of (x) the third anniversary of such termination
date or (y) the Expiration Date.

      

       

      (B)           Voluntary Resignation. Upon a
Participant’s Termination of Employment by reason of a voluntary resignation
(other than for Good Reason or Retirement):  (i) any portion of the
Option that is not exercisable at the time of such Termination of Employment
shall be immediately forfeited; and (ii) any portion of the Option that is
exercisable at the time of such Termination of Employment shall remain
exercisable until the earlier of (x) 90 days after such Termination of
Employment or (y) the Expiration Date.

       

      (C)           Retirement.  Subject
to Section 3(b)(v)(F) below, upon a Participant’s Termination of Employment by
reason of Retirement, the Pro Rata Option Portion of any portion of the Option
that is not exercisable at the time of such Termination of Employment shall
become exercisable, and the entire then exercisable portion of the Option shall
be exercisable, during the period:  (i) beginning on the date of such
Termination of Employment; and (ii) ending on the earlier of (x) the third
anniversary of such termination date or (y) the Expiration Date.  Upon
a Participant’s Termination of Employment by reason of Retirement, any portion
of the Option that is not exercisable at the time of such Termination of
Employment, other than the Pro Rata Option Portion, shall be immediately
forfeited.

      


       “Pro Rata Option Portion”
means, with respect to any portion of the Option that is not exercisable at the
time of a Participant’s Termination of Employment by reason of Retirement, the
number of Shares that would have become exercisable on each respective future
Installment Date multiplied by a fraction:

       

      

        

      

      
        4  If this formula results in any
fractional Share allocation to any Installment Date, the number of Shares that
become exercisable will be adjusted in the same manner as described in footnote
1 above so that only full Shares are covered by each Installment
Date.

         

      


      
        
           


        

        
          4

          
            

          

        

        
           


        

      


      (i)  the
numerator of which is the number of calendar months5 from the Grant Date to
the date of such Termination of Employment, rounded up for any partial months,
and

       

      (ii) the
denominator of which is the number of calendar months from the Grant Date to
each applicable Installment Date, rounded up for any partial month.6

      


      (D)           Death or
Disability.  Upon a Participant’s Termination of Employment due
to death or Disability, any portion of the Option that is not exercisable at the
time of such Termination of Employment shall become exercisable, and the entire
then exercisable portion of the Option shall be exercisable, during the
period:  (i) beginning on the date of such Termination of Employment;
and (ii) ending on the earlier of (x) the third anniversary of such termination
date or (y) the Expiration Date.

      


      (E)           For Cause.  Upon a
Participant’s Termination of Employment by the Company for Cause, any
unexercised portion of the Option shall be immediately forfeited, including any
portion that was then exercisable.

       

      (F)           Retirement-Eligible Participants Who
Incur a Termination of Employment for Other Reasons.  If a
Participant who is eligible for Retirement is, or would be, terminated by the
Company without Cause, such Participant shall be considered to have been
terminated by the Company without Cause for purposes of the MAP rather than
having retired, but only if the Participant acknowledges that, absent
Retirement, the Participant would have been terminated by the Company without
Cause.  If, however, the employment of a Participant who is eligible
for Retirement is terminated by the Company for Cause, then regardless of
whether the Participant is considered as a retiree for purposes of any other
program, plan or policy of the Company, for purposes of the MAP, the
Participant’s employment shall be considered to have been terminated by the
Company for Cause.

      

        

      

       

        5 For purposes of the MAP, one calendar
month is calculated as described in footnote 2 above.

      

      
         

        6 For example, assume a
Participant received an Option exercisable for 1,000 Shares on December 1,
2008 and retires on
April 15, 2009 (the “Retirement
Date”).  In these circumstances, the number of calendar months
from (a) the Grant Date to the Retirement Date is 5; and (b) the Grant Date to
the First, Second, Third and Fourth Installment Dates is 5, 11, 17, and 35,
respectively.  As a result, the Option will become exercisable on the
Participant’s Retirement Date as follows:

         

        ●  200
Shares × 5/5 = 200

        ●  200
Shares × 5/11 = 91

        ●  200
Shares × 5/17 = 59

        ●  400
Shares × 5/35 = 58

        Total:   408
Shares

         

        If this
formula results in any fractional Share, the Pro Rata Option Portion will be
rounded up to the nearest whole Share.   Accordingly, in this
example, the Option will become exercisable with respect to 408 Shares on the
Retirement Date.  The remaining portion of the Option (592 Shares)
will be forfeited on the Retirement Date.

        

          
            
               


            

            
              5

              
                

              

            

            
               


            

          



      

      4.           
Gross-Up for Certain Taxes.

      


      (a)           Gross-Up
Payments.  In the event
that a Participant becomes entitled to benefits under the MAP, the Company shall
pay to the Participant an additional lump sum payment (the “Gross-Up Payment”), in cash,
equal to the amounts, if any, described below:

      


      (i)           Subject
to sub-section (ii) below, if any portion of any payment under the MAP, when
taken together with any payment under any other agreement with or plan of the
Company (in the aggregate “Total Payments”) would be
subject to the excise tax imposed by Section 4999 of the Code or any interest or
penalties with respect to such excise tax (such excise tax, together with any
such interest and penalties, are collectively referred to as the “Excise Tax”), then the
Participant shall be entitled under this sub-section to an additional amount
such that after payment by the Participant of all such Participant’s applicable
federal, state and local taxes, including any Excise Tax, imposed upon such
additional amount, the Participant will retain an amount sufficient to pay the
Excise Tax imposed on the Total Payments (provided that the Gross-Up Payment to
be made under this provision and any other similar gross up payment made under
any  similar Excise Tax reimbursement provision included in any other
agreement  with, or plan of, the Company shall not, when taken as an
aggregate, exceed the Gross-Up Payment).

      


      (ii)           Notwithstanding
the provisions of sub-section (i) above, if it shall be determined that the
Participant would be entitled to a Gross-Up Payment, but that the Total Payments
would not be subject to the Excise Tax if the Total Payments were reduced by an
amount that is less than 10% of the portion of the Total Payments that would be
treated as “parachute payments” under Section 280G of the Code, then the amounts
payable to the Participant shall be reduced (but not below zero) to the maximum
amount that could be paid to Participant without giving rise to the Excise Tax
(the “Safe Harbor Cap”),
and no Gross-Up Payment shall be made to the Participant.  The
reduction of the Total Payments due hereunder, if applicable, shall be made in
such a manner as to maximize the economic present value of all payments actually
made to the Participant, determined by the Accounting Firm (as defined in
Section 4(b) below) as of the date of the Change in Control using the discount
rate required by Section 280G(d)(4) of the Code.

      


      The
amounts payable under this Section 4(a) shall be paid by the Company within ten
(10) business days after the receipt of the Accounting Firm’s determination, and
in no event later than the end of the Participant’s tax year next following the
year in which the Excise Tax and any related taxes are paid to the applicable
taxing authority.

      


      (b)           Determinations.  In the event of
a Change in Control, all determinations required to be made under Section 4(a)
above, including the amount of the Gross-Up Payment, whether a payment is
required under Section 4(a) above, and the assumptions to be used in determining
the Gross-Up Payment, shall be made by the nationally recognized accounting firm
generally used by the Company as its financial auditor (the “Accounting Firm”) which shall
provide detailed supporting calculations both to the Company and the Participant
within twenty (20) business days of the receipt of notice from the Participant
that there has been an event giving rise to the right to benefits under Section
4(a) above, or such earlier time as is requested by the Company.  In
the event that the Accounting Firm is serving as accountant or auditor for a
person effecting the Change in Control or is otherwise unavailable, the
Participant may appoint another nationally recognized accounting firm to make
the determinations required hereunder (which accounting firm shall then be
referred to as the Accounting Firm hereunder).  All fees and expenses
of the Accounting Firm shall be borne solely by the Company.

      



      
        
           


        

        
          6

          
            

          

        

        
           


        

      


      (c)           Subsequent
Redeterminations.  Unless requested
otherwise by the Company, the Participant must use reasonable efforts to contest
in good faith any subsequent determination by the Internal Revenue Service that
the Participant owes an amount of Excise Tax greater than the amount previously
determined under Section 4(a)(i); provided,
however, that the Participant shall be entitled to reimbursement by the
Company of all fees and expenses reasonably incurred by the Participant in
contesting such determination.  Such reimbursement of expenses shall
be made on a current basis, as incurred, and in no event later than the end of
the Participant’s tax year next following the year in which the taxes that are
the subject of the audit or proceeding are remitted to the applicable taxing
authority, or where as a result of such audit or proceeding no taxes are
remitted, the end of the Participant’s tax year next following the year in which
the audit is completed or there is a final and nonappealable settlement or other
resolution of the proceeding.  In the event the Internal Revenue
Service or any court of competent jurisdiction determines that the Participant
owes an amount of Excise Tax that is either greater or less than the amount
previously taken into account and paid under Section 4(a), the Company shall
promptly pay to the Participant, or the Participant shall promptly repay to the
Company, as the case may be, the amount of such excess or
shortfall.  In the case of any payment that the Company is required to
make to the Participant pursuant to the preceding sentence (a “Later Payment”), the Company
shall also pay to the Participant an additional amount such that after payment
by the Participant of all the Participant’s applicable federal, state and local
taxes on such additional amount, the Participant will retain an amount
sufficient to pay the total of the Participant’s applicable federal, state and
local taxes arising due to the Later Payment.  In the case of any
repayment of Excise Tax that the Participant is required to make to the Company
pursuant to the second sentence of this Section 4(c), the Participant shall also
repay to the Company the amount of any additional payment received by the
Participant from the Company in respect of applicable federal, state and local
taxes on such repaid Excise Tax, to the extent the Participant is entitled to a
refund of (or has not yet paid) such federal, state or local taxes. Any payments
from one party to the other under this Section 4(c) shall be made promptly, but
in no event later than December 31 of the year after the year in which the
excess or shortfall is determined to exist.

       

      5.           Definitions.   For
purposes of the MAP, the following definitions are hereby modified as set forth
below and will apply in lieu of the definitions set forth in the 2007
Performance Plan or as modified, as applicable.

       

      
        	
                 
      

              	
                (a)

              	
                For
      purposes of the MAP, “Change in Control” shall
      have the meaning set forth in the 2007 Performance Plan except that the
      Merger will not be considered a Change in
  Control.

              


      

       

      
        	
                 
      

              	
                (b)

              	
                For
      purposes of the MAP, “Good Reason” shall have
      the meaning set forth in the 2007 Performance Plan except:  (i)
      any Award made to a Participant under the MAP, (ii) any other equity-based
      awards or other incentive compensation awards made to a Participant by any
      of Delta (or any Affiliate) or Northwest (or any subsidiary) at or prior
      to the closing of the Merger and (iii) any retention payment or special
      travel benefits provided to a Participant as a result of his or her
      initial employment with Delta or any Affiliate, will be ignored for
      purposes of determining whether a Participant has suffered a reduction
      that constitutes Good Reason under the MAP.  Furthermore, with
      respect to any Participant who was employed by Northwest or any subsidiary
      thereof immediately prior to the closing of the Merger, all compensation
      and benefit programs provided to such Participant prior to the Merger by
      Northwest or any subsidiary thereof, including, without limitation, the
      Participant’s base salary, will be ignored for purposes of determining
      whether a Participant has suffered a reduction that constitutes Good
      Reason under the MAP.

              


      

       


      
        
           


        

        
          7

          
            

          

        

        
           


        

      


      
        	
                 
      

              	
                (c)

              	
                For
      purposes of the MAP, “Retirement” means a
      Termination of Employment (other than for Cause or death)
      either:  (i) on or after a Participant’s 62nd birthday provided
      that such Participant has completed at least 5 years service with the
      Company (or an Affiliate) or Northwest (or a subsidiary); or (ii) on or
      after a Participant’s 52nd birthday provided that such Participant has
      completed at least 10 years service with the Company (or an Affiliate) or
      Northwest (or a subsidiary). 

              


      

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

      8