**Exhibit 10.1**

 

**NORTHWEST AIRLINES CORPORATION**

**     STOCK INCENTIVE PLAN**

 

**Deferred Stock Award Agreement**

 

THIS DEFERREDSTOCK 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 AirlinesCorporation      Stock Incentive Plan (as amended, the “Plan”).

 

WHEREAS, pursuant to the terms and conditions of the Plan and the termsand conditions****contained herein, the Company hasgranted the Grantee on the Grant Date (as defined herein) a Deferred Stockaward as an inducement for the Grantee to remain an employee of the Company orits subsidiary and to retain and motivate the Grantee during his employmentwith the Company and its subsidiaries.

 

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

 

**Section1.  Definitions**

 

Unlessotherwise defined in this Agreement, all capitalized terms used herein shallhave 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 Dateon 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 theCompany or a subsidiary of the Company: (a) an act or acts of personaldishonesty by the Grantee intended to result in substantial personal enrichmentof the Grantee at the expense of the Company or its subsidiary, (b) an act oracts of personal dishonesty by the Grantee intended to cause substantial injuryto the Company or its subsidiary, (c) material breach (other than as a resultof a Disability) by the Grantee of the Grantee’s obligations under the terms andconditions of the Grantee’s employment, which action was (i) undertaken withouta reasonable belief that the action was in the best interests of the Company orits subsidiary and (ii) not remedied within a reasonable period of time afterreceipt of written notice from the Company or its subsidiary specifying thealleged breach, or (d) the conviction of the Grantee of a felony.

 

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

 

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

 

1

----

 

any groupcomprised exclusively of Permitted Holders or their Related Parties, ofbeneficial ownership (within the meaning of Rule 13d-3 and 13d-5 promulgatedunder the Exchange Act, except that such person shall be deemed to have “beneficialownership” of all shares that any such Person has the right to acquire, whethersuch 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 isdefined in the Rights Agreement dated as of November 20, 1998 between NorthwestAirlines Corporation and Norwest Bank Minnesota, N.A.), 25% or more), of either(A) the then outstanding shares of Common Stock of the Company (or itssuccessor by merger, consolidation or purchase of all or substantially all ofits assets) (the “Outstanding Common Stock”) or (B) the combined voting powerof the then outstanding voting securities of the Company (or its successor bymerger, consolidation or purchase of all or substantially all of its assets)entitled to vote generally in the election of directors (the “OutstandingVoting Securities”), and (ii) the Permitted Holders or their Related Partiescollectively “beneficially own” (within the meaning of Rule 13d-3 promulgatedunder the Exchange Act) a lesser percentage of that which is described in eachof clause (A) and  (B) above and do nothave the right or ability by voting power, contract or otherwise to elect ordesignate for election a majority of the board of directors of the Company orsuch successor;

 

(b)                                 Individualswho, 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 majorityof such Board; *provided, however*, that anyindividual becoming a director subsequent to the date hereof, whose election,or nomination for election by the Company’s stockholders, was approved by avote of at least a majority of the directors then comprising the IncumbentBoard shall be considered as though such individual were a member of theIncumbent Board, but excluding, for this purpose, any such individual whoseinitial assumption of office occurs as a result of an actual or threatenedelection contest with respect to the election or removal of directors or otheractual or threatened solicitation of proxies or consents by or on behalf of aPerson other than the Board of Directors of the Company;

 

(c)                                  Consummationby the Company of a reorganization, merger or consolidation or sale or otherdisposition of all or substantially all of the assets of the Company (a “BusinessCombination”), in each case, unless, following such Business Combination, (i)all or substantially all of the individuals and entities who were thebeneficial owners, respectively, of the Outstanding Common Stock andOutstanding Voting Securities immediately prior to such Business Combinationbeneficially own, directly or indirectly, more than 50% of, respectively, thethen outstanding shares of common stock and the combined voting power of thethen outstanding voting securities entitled to vote generally in the electionof directors, as the case may be, of the corporation resulting from suchBusiness Combination (including, without limitation, a corporation which as aresult of such transaction owns the Company or all or substantially all of theCompany’s assets either directly or through one or more subsidiaries) insubstantially the same proportions as their ownership immediately prior to suchBusiness Combination of the Outstanding Common Stock and Outstanding VotingSecurities, as

 

2

----

 

the case maybe, and (ii) at least a majority of the members of the board of directors ofthe corporation resulting from such Business Combination were members of theIncumbent Board at the time of the execution of the initial agreement or of theaction of such Board providing for such Business Combination; or

 

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

 

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

 

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

 

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

 

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

 

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

 

(a)  a material reduction in Grantee’scompensation or other benefits (other than as may be permitted in any agreementbetween 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 thencurrent oversight responsibility, a transfer of a portion of such oversightresponsibility of Grantee shall not in and of itself constitute a materialchange in Grantee’s job responsibilities; or

 

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

 

In order for a Termination ofEmployment to be considered for Good Reason, such termination must occur withinone (1) year after the event giving rise to such Good Reason.  Grantee’s continued employment shall notconstitute consent to, or a waiver of rights with respect to, any circumstanceconstituting Good Reason hereunder.

 

1.9                                 “GrantDate” shall mean            .

 

3

----

 

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

 

1.11                           “RelatedParties” with respect to any Permitted Holders means (i) any spouse orimmediate family member of such Permitted Holder, any trust created primarilyfor 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 majoritycontrolling interest of which consist of one or more of such Permitted Holders and/orsuch other Person referred to in the immediately preceding clause (i).

 

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

 

1.13                           “Terminationof Employment” shall mean the time when the employee-employer relationshipbetween the Grantee and the Company or its subsidiary ceases for any reasonwhatsoever. The Grantee’s employment shall not be deemed to have beenterminated because of absence from active employment on account of temporaryillness or during authorized vacation or during temporary leaves of absencefrom active employment granted by the Company or its subsidiary.

 

1.14                           “VestingDate(s)” shall mean                         .

 

1.15                           “VestingPeriod(s)” shall mean                         .

 

**Section2.  The Deferred Stock Award**

 

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

 

**Section3.  Vesting; Forfeiture**

 

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

 

3.2                               *Forfeiture; Termination of Employment. *Except as otherwise provided in thisSection 3.2 and subject to Section 3.3 hereof, if a Termination of Employmentoccurs prior to a Vesting Date, all or the portion of the Award that has notyet vested pursuant to Section 3.1 hereof shall be canceled immediately and theGrantee shall automatically forfeit all rights with respect to all or suchportion of the shares of Deferred Stock subject to the Award as of the date ofsuch Termination of Employment; provided however, that (i) in the event aTermination of Employment as a result of the Grantee’s death or Disabilityoccurs prior to any Vesting Date, the

 

4

----

 

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

 

3.3                                 *Change in Control*.  Notwithstanding any other provision of thisAgreement, in the event of a Change in Control, the Deferred Stock shall vestin accordance with the following:

 

(a)  If the Change in Controloccurs pursuant to Section 1.3(a) hereof, the Grantee shall become vested in fullin all shares of the Deferred Stock immediately upon termination of the Grantee’semployment by the Company other than for Cause or by the Grantee with GoodReason (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 inconnection with such Change in Control; and

 

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

 

**Section4.  Restrictions on Transfer**

 

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

 

**Section5.  Issuance of Certificate**

 

Except in theevent of a Termination of Employment described in clause (ii) of Section 3.2hereof, promptly upon vesting of the Deferred Stock in accordance with Section3 hereof, the Company shall cause to be issued a certificate or certificatesevidencing such vested shares and shall cause such certificate to be deliveredto the Grantee or the Grantee’s legal representatives, beneficiaries orheirs.  In the event of a Termination ofEmployment described in clause (ii) of Section 3.2 hereof (except for anyTermination of Employment that occurs in connection with a Change in Control),the Company shall not be obligated to issue and deliver such certificate orcertificates to the Grantee until the earlier of the applicable Vesting Date orthe date the Deferred Stock vests in accordance with Section 3.3 hereof.

 

**Section6.  Securities Law Requirements**

 

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

 

5

----

 

the Deferred Stock for the Grantee’sown account and without a view to resale or distribution in violation of theAct or any other securities law, and upon any such acquisition the Grantee willenter into such written representations, warranties and agreements as theCompany may reasonably request in order to comply with the terms of thisAgreement, the Act or any other securities law.

 

**Section7.  Adjustments**

 

In the eventof any merger, reorganization, consolidation, recapitalization, separation,spin-off, liquidation, stock dividend, split-up, share combination or otherchange in the corporate or capital structure of the Company affecting itsCommon Stock (each a “Recapitalization Event”), then for all purposesreferenced herein to the Common Stock or to Deferred Stock shall mean andinclude all securities or other property that holders of Common Stock areentitled to receive in respect of shares of Common Stock by reason of eachRecapitalization Event, which securities or other property shall be treated inthe same manner and shall be subject to the same restrictions as the underlyingDeferred Stock.

 

**Section8.  Tax Withholding**

 

The Companyshall have the right to (i) make deductions from the number of shares of CommonStock otherwise deliverable upon the vesting of the shares of Deferred Stock inaccordance with Section 3 hereof in an amount sufficient to satisfy withholdingof any federal, state or local taxes required by law, or (ii) take such otheraction as may be necessary or appropriate to satisfy any such tax withholdingobligations.

 

**Section9.  Award Does Not Confer Employmentor Stockholder Rights**

 

  Nothing in this Agreement shallconfer upon the Grantee any right to continue in the employ of the Company orits subsidiary or interfere in any way with the right of the Company or itssubsidiary to terminate the employment of the Grantee at any time.  The Grantee shall not have any of the rightsof a stockholder of the Company with respect to the shares of Deferred Stockexcept and to the extent that, and until, such shares of Deferred Stock vest inaccordance with Section 3 hereof. The Grantee shall not be entitled to receiveany dividends with respect to the Deferred Stock which become payable duringthe Vesting Period, nor shall the Grantee be entitled to vote the shares ofDeferred Stock during the Vesting Period.

 

**Section10.  General Provisions**

 

10.1                           ThisAgreement is made pursuant to the Plan and is subject to all of the terms andprovisions of the Plan as if the same were fully set forth herein. Byacceptance 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 acopy of the Plan.

 

6

----

 

10.2                           Forpurposes of the Award, the Committee in its reasonable discretion and subjectto the provisions hereof shall determine whether a Termination of Employment ofany type has occurred and such determination shall be conclusive anddeterminative.

 

10.3                           Theheadings of sections herein are included solely for convenience of referenceand shall not affect the meaning of any of the provisions of this Agreement.

 

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

 

10.5                           Thelaws of the State of Minnesota shall govern the interpretation, validity andperformance of the terms of this Agreement regardless of the law that might beapplied under principles of conflicts of laws.

 

10.6                           Anysuit, 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 broughtin any court of competent jurisdiction in the State of Minnesota, as theCompany may elect in its sole discretion, and the Grantee hereby submits to thenon-exclusive jurisdiction of such courts for the purpose of any such suit,action, proceeding or judgment.

 

10.7                           Inthe event that any provision of this Agreement shall be held by any court ofcompetent jurisdiction illegal, invalid or unenforceable for any reason, suchprovision shall be fully severable, but shall not affect the remainingprovisions of this Agreement and this Agreement shall be construed and enforcedas if the illegal, invalid or unenforceable provision had never been includedherein.

 

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

 

If to theCompany, to it at the following address:

 

NorthwestAirlines Corporation

2700 Lone OakParkway

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 suchother address as either party shall from time to time specify by notice inwriting to the other party.

 

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

 

7

----

 

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

 

NORTHWEST AIRLINES CORPORATION

 

 
| By:    |   |   |
|--------|--------|--------|
| Name:  |
| Title: |

 

 

GRANTEE:

 

 
|                          |   |   |
|-------------------------------|--------|--------|
| [insert  Grantee’s name] |

 

Grantee’sAddress:

 

 

 

8

----