**Exhibit 10.5**

 

FINAL

 

AMENDMENT NO. 2

TO THE

NORTHWEST AIRLINES CORPORATION

2007 STOCK INCENTIVE PLAN

(Effective as of April 14, 2008)

 

This AMENDMENTNO. 2 TO THE NORTHWEST AIRLINES CORPORATION 2007 STOCK INCENTIVE PLAN (the “Amendment”)is hereby adopted and approved by the Board of Directors of Northwest AirlinesCorporation (the “Company”) as of the date set forth above.

 

Pursuant tothe authority granted under Article 7 of the Northwest AirlinesCorporation 2007 Stock Incentive Plan (the “Plan”), the Board of Directors ofthe Company hereby amends the Plan as follows:

 

1.                             Amendmentof the Plan.  Section 13.2(a) ofthe Plan is hereby deleted in its entirety and replaced with the following:

 

“In the event of a Change of Control (other than a Change of Controloccurring by virtue of an event described in Section 2.1(e)(i) hereof),(i) any outstanding Awards then held by Participants which areunexercisable or otherwise unvested or subject to lapse restrictions shallautomatically be deemed, upon such Change of Control, exercisable or otherwisevested or no longer subject to lapse restrictions, and (ii) the Committeemay, but shall not be obligated to (A) cancel Awards for fair value (asdetermined in the sole discretion of the Committee) which, in the case of StockOptions and Stock Appreciation Rights, may equal the excess, if any, of valueof the consideration to be paid in the Change of Control transaction to holdersof the same number of Shares subject to such Stock Options or StockAppreciation Rights (or, if no consideration is paid in any such transaction,the Fair Market Value of the Shares subject to such Stock Options or StockAppreciation Rights) over the aggregate exercise price of such Stock Options orStock Appreciation Rights, (B) provide for the issuance of substituteAwards that will substantially preserve the otherwise applicable terms of anyaffected Awards previously granted hereunder as determined by the Committee inits sole discretion or (C) provide that for a period of at least 30 days priorto the Change of Control, such Stock Options or Stock Appreciation Rights shallbe exercisable as to all shares subject thereto and that upon the occurrence ofthe Change of Control, such Stock Options or Stock Appreciation Rights shallterminate and be of no further force and effect.”

 

2.                             Amendmentof the Plan. Section 13.2(b) of the Plan is hereby deleted in itsentirety and replaced with the following:

 

----

 

“Notwithstanding any provision to the contrary herein (including Section 6.1(b)),except as otherwise specified in an Award Agreement, if a Participant’semployment is terminated without Cause or if a Participant terminatesemployment for Good Reason, in each case, within two (2) years following aChange of Control, the Participant will have three (3) years following thedate of such termination of employment to exercise any portion of a StockOption or Stock Appreciation Right (to the extent such Stock Option or StockAppreciation Right is exercisable, and not previously exercised or cancelled)thereafter; provided, however, no Stock Option or Stock Appreciation Rightshall be exercisable later than ten (10) years after the date granted.  The term “Good Reason” means, on or after aChange of Control, “Good Reason” as defined in the Participant’s AwardAgreement, or, if not defined therein, “Good Reason” means any one or more ofthe following: (i) a material reduction in a Participant’s base salary ortarget bonus below the level of the Participant’s base salary or target bonusimmediately prior to the Change of Control, (ii) any material diminutionin a Participant’s duties or responsibilities, or (iii) the relocation ofthe Participant’s principal place of employment by more than 50 miles(excluding travel requirements relating to Participant’s duties), without theParticipant’s consent; provided, however, that the foregoingevents shall constitute Good Reason only if the Company fails to cure suchevent within thirty (30) days after receipt from the Participant of writtennotice of the event which constitutes Good Reason; and provided, further,that “Good Reason” shall cease to exist for an event on the 60th dayfollowing the later of its occurrence or the Participant’s knowledge thereof,unless the Participant has given the Company written notice thereof prior tosuch date.  The term “Cause” means “Cause”as defined in an Award Agreement or, if not defined therein, “Cause” shall meanthe occurrence of any one or more of the following: (A) an act or acts ofpersonal dishonesty by the Participant intended to result in substantialpersonal enrichment of the Participant at the expense of the Company or aSubsidiary, (B) an act or acts of personal dishonesty by the Participantintended to cause substantial injury to the Company or a Subsidiary, (C) materialbreach (other than as a result of a Disability) by the Participant of theParticipant’s obligations under the terms and conditions of the Participant’semployment, which action was (x) undertaken without a reasonable beliefthat the action was in the best interests of the Company or a Subsidiary and (y) notremedied within fifteen (15) days after receipt of written notice from theCompany or a Subsidiary specifying the alleged breach, or (D) theconviction of the Participant of a felony.”

 

3.                             Definitions.Except as otherwise defined in this Amendment, capitalized terms used but notdefined herein shall have the meanings given them in the Plan.

 

4.                             General.  References to the “Plan” contained in thePlan shall mean the Plan as amended by this Amendment.  Except as herein provided, the Plan shallremain unchanged and in full force and effect.

 

----

 

Adopted by the Board of Directors of Northwest Airlines Corporation on April 14,2008.

 

----