**Exhibit 10.2**

 

**NORTHWEST AIRLINES CORPORATION**

**      STOCKINCENTIVE PLAN**

 

**Restricted Stock Award Agreement**

 

This RESTRICTED STOCK AWARD AGREEMENT (this “Agreement”), dated as ofthe      day of        ,    ,is entered into by and between NORTHWEST AIRLINES CORPORATION, a Delawarecorporation (the “Company”), and         ,an employee of the Company or a subsidiary of the Company (the “Grantee” and,together with the Company, the “Parties”).

 

**RECITALS**

 

WHEREAS, on        ,    (the “Date of Grant”), the Compensation Committee (or a subcommittee thereof)of the Board of Directors of the Company (the “Committee”) awarded the Grantee        shares of the Company’s Common Stock, par value $0.01 (“Common Stock”),pursuant to, and subject to the terms and provisions of the Company’s       Stock Incentive Plan, as amended (the “Plan”).

 

NOW, THEREFORE, in consideration of the Grantee’s services to theCompany and for other good and valuable consideration, the receipt andsufficiency of which are hereby acknowledged, the Parties hereto agree asfollows:

 

1.                                       Grantof Restricted Stock and Escrow of Restricted Stock.

 

a.                                       Grantof Restricted Stock.  The Grantee isentitled to          shares of CommonStock pursuant to the terms and conditions of this Agreement (the “RestrictedStock”).

 

b.                                      Escrowof Restricted Stock.  To insure theavailability for delivery of the Grantee’s Restricted Stock, the Grantee herebyappoints the Secretary of the Company, or any other person designated by theCompany as escrow agent, as its attorney-in-fact to assign and transfer untothe Company such Restricted Stock, if any, forfeited by the Grantee pursuant toSection 4 below and shall, upon execution of this Agreement, deliver anddeposit with the Secretary of the Company, or such other person designated bythe Company, the share certificates representing the Restricted Stock, togetherwith the stock assignment duly endorsed in blank, attached hereto as ExhibitA.  The Restricted Stock and stockassignment shall be held by the Secretary in escrow until the Restricted Period(as defined below) has lapsed with respect to the shares of Restricted Stock,or until such time as this Agreement no longer is in effect.

 

2.                                       Restrictionsand Restricted Period.

 

a.                                       Restrictions.  Shares of Restricted Stock granted hereundermay not be sold, assigned, transferred, pledged, hypothecated or otherwisedisposed of and 

 

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shall be subject to a risk of forfeiture as described in Section 4below until the lapse of the Restricted Period (as defined below).

 

b.                                      RestrictedPeriod.  Unless the Restricted Periodis previously terminated pursuant to Section 4 of this Agreement, therestrictions set forth above shall lapse and the shares of Restricted Stockshall become fully and freely transferable (provided, that such transfer isotherwise in accordance with federal and state securities laws) andnon-forfeitable as to       [*describe vesting schedule*]           ,beginning            ,     (the “Restricted Period”). Notwithstanding anything to the contrary, the release of the shares ofRestricted Stock hereunder shall be conditioned upon Grantee making adequateprovision for federal, state or other tax withholding obligations, if any,which arise upon the release of the shares from the Restricted Period (unless aSection 83(b) election has been filed), whether by withholding, direct paymentto the Company, or otherwise.

 

3.                                       Rightsof a Stockholder.  From and after theDate of Grant and for so long as the Restricted Stock is held by or for thebenefit of the Grantee, the Grantee shall have all the rights of a stockholderof the Company with respect to the Restricted Stock, including, but not limitedto, the right to receive dividends and the right to vote such shares.

 

4.                                       Terminationof Employment.

 

a.                                       Terminationof Employment; Forfeiture of Restricted Stock.  Except as otherwise provided in this Section4, in the event of the Grantee’s termination of employment during theRestricted Period, the shares of Restricted Stock and any and all accrued butunpaid dividends that are at that time subject to restrictions set forthherein, shall be forfeited to the Company without payment of any considerationby the Company, and neither the Grantee nor any of his successors, heirs,assigns, or personal representatives shall thereafter have any further rightsor interests in such shares of Restricted Stock or certificates.

 

b.                                      Deathor Disability.  In the event atermination of Grantee’s employment as a result of Grantee’s death orDisability (as defined below) occurs during the Restricted Period, theRestricted Period shall lapse with respect to              shares of Restricted Stock that is at that time subject to restrictions setforth herein.  The term “Disability”shall mean the Grantee’s physical or mental condition which prevents continuedperformance of Grantee’s duties and for which Grantee establishes by medicalevidence that such condition will be permanent and continuous during theremainder of Grantee’s life or is likely to be of at least three (3) years’duration.

 

c.                                       Terminationof Employment in Connection with a Change in Control.  In the event Grantee is employed by theCompany and there is a Change in Control (as defined in Annex A attachedhereto), the Restricted Period shall lapse in accordance with the following:

 

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(i) If the Change in Control occurs pursuantto Section (a) of such definition, then, immediately upon termination ofGrantee’s employment either after the occurrence of the Change in Control orprior to such occurrence if such termination is in connection with such Changein Control, the Restricted Period shall lapse with respect to all of theRestricted Stock that is at that time subject to restrictions set forth herein.

 

(ii) If the Change in Control occurs pursuantto Section (b), (c) or (d) of such definition, then, immediately upon theeffective date of such Change in Control, the Restricted Period shall lapsewith respect to all of the Restricted Stock that is at that time subject torestrictions set forth herein.

 

5.                                       Certificates.  Restricted Stock granted herein may beevidence in such manner as the Committee shall determine.  If certificates representing Restricted Stockare registered in the name of the Grantee, then the Company shall retain physicalpossession of the certificate.

 

6.                                       Legends.All certificates representing any of the shares of Restricted Stock subject tothe provisions of this Agreement shall have endorsed thereon the followinglegend:

 

“THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAINRESTRICTIONS UPON TRANSFER AS SET FORTH IN AN AGREEMENT BETWEEN THE COMPANY ANDTHE HOLDER OF THE SHARES, A COPY OF WHICH IS ON FILE AT THE PRINCIPAL OFFICE OFTHE COMPANY.”

 

7.                                       Section83(b) Election.  The Grantee herebyacknowledges that he has been informed that, with respect to the grant ofRestricted Stock, an election may be filed by the Grantee with the InternalRevenue Service, within 30 days of the Date of Grant, electing pursuant toSection 83(b) of the Internal Revenue Code of 1986, as amended, to be taxedcurrently on the fair market value of the Restricted Stock on the Date ofGrant.

 

THE GRANTEE ACKNOWLEDGES THAT IT IS THE GRANTEE’S SOLE RESPONSIBILITYAND NOT THE COMPANY’S TO FILE TIMELY THE ELECTION UNDER SECTION 83(b) OF THECODE, EVEN IF THE GRANTEE REQUESTS THE COMPANY OR ITS REPRESENTATIVE TO MAKETHIS FILING ON THE GRANTEE’S BEHALF.

 

BY SIGNING THIS AGREEMENT, THE GRANTEE REPRESENTS THAT HE HAS REVIEWEDWITH HIS OWN TAX ADVISORS THE FEDERAL, STATE, LOCAL AND FOREIGN TAXCONSEQUENCES OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT AND THAT HE ISRELYING SOLELY ON SUCH ADVISORS AND NOT ON ANY STATEMENTS OR REPRESENTATIONS OFTHE COMPANY OR ANY OF ITS AGENTS.  THEGRANTEE UNDERSTANDS AND AGREES THAT HE (AND NOT THE

 

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COMPANY) SHALL BE RESPONSIBLE FOR ANY TAX LIABILITY THAT MAY ARISE AS ARESULT OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.

 

8.                                       Terminationof this Agreement.  Upon terminationof this Agreement, all rights of the Grantee hereunder shall cease.

 

9.                                       Miscellaneous.

 

a.                                       Notices.  Any notice required or permitted under thisAgreement shall be deemed given when delivered personally, or when deposited ina United States Post Office, postage prepaid, addressed, as appropriate, to theGrantee either at his address herein below set forth or such other address ashe may designate in writing to the Company, or to the Company to the attentionof the Secretary, at the Company’s address or such other address as the Companymay designate in writing to the Grantee.

 

b.                                      Failureto Enforce Not a Waiver.  The failureof the Company or the Grantee to enforce at any time any provision of thisAgreement shall in no way be construed to be a waiver of such provision or ofany other provision hereof.

 

c.                                       GoverningLaw.  This Agreement shall begoverned by and construed according to the laws of the State of Minnesotawithout giving effect to the choice of law principles thereof.

 

d.                                      Amendments.  This Agreement may be amended or modified atany time by an instrument in writing signed by the Parties.

 

e.                                       AgreementNot a Contract of Employment. Neither the grant of Restricted Stock, this Agreement nor any otheraction taken in connection herewith shall constitute or be evidence of anyagreement or understanding, express or implied, that the Grantee is an employeeof the Company or any subsidiary of the Company.

 

f.                                         EntireAgreement; Plan Controls.  ThisAgreement and the Plan contain the entire understanding and agreement of the Partiesconcerning the subject matter hereof, and supersede all earlier negotiationsand understandings, written or oral, between the Parties with respectthereto.  This Agreement is made underand subject to the provisions of the Plan, and all of the provisions of thePlan are hereby incorporated by reference into this Agreement.  In the event of any conflict between theprovisions of this Agreement and the provisions of the Plan, the provisions ofthe Plan shall govern.  By signing thisAgreement, the Grantee confirms that he has received a copy of the Plan and hashad an opportunity to review the contents thereof.

 

g.                                      Captions.  The captions and headings of the sections andsubsections of this Agreement are included for convenience only and are not tobe considered in construing or interpreting this Agreement.

 

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h.                                      Counterparts.  This Agreement may be executed incounterparts, each of which when signed by the Company or the Grantee will bedeemed an original and all of which together will be deemed the same agreement.

 

i.                                          Assignment.  The Company may assign its rights anddelegate its duties under this Agreement. If any such assignment or delegationrequires consent of any state securities authorities, the parties agree tocooperate in requesting such consent. This Agreement shall inure to the benefitof the successors and assigns of the Company and, subject to the restrictionson transfer herein set forth, be binding upon the Grantee, his heirs,executors, administrators, successors and assigns.

 

j.                                          Severability.  This Agreement will be severable, and theinvalidity or unenforceability of any term or provision hereof will not affectthe validity or enforceability of this Agreement or of any other term or provisionhereof.  Furthermore, in lieu of anyinvalid or unenforceable term or provision, the Parties intend that there beadded as a part of this Agreement a valid and enforceable provision as similarin terms to such invalid or unenforceable provision as may be possible.

 

IN WITNESS WHEREOF, the Parties have executed this Agreement on the dayand year first above written.

 

NORTHWEST AIRLINES CORPORATION

 

 
| By     |    |   |
|--------|---------|--------|
|   | [Name]  |
|   | [Title] |

 

The undersigned hereby accepts and agrees to all the terms andprovisions of the foregoing Agreement.

 

 

 

 

 

Number of Shares

 

 

 

 

Address

 

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ANNEX A

 

Definition of Change in Control

 

The term “Change in Control” shall mean any one of thefollowing:

 

(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 any group comprised exclusively of Permitted Holders or theirRelated Parties, of beneficial ownership (within the meaning of Rule 13d-3 and13d-5 promulgated under the Exchange Act, except that such person shall bedeemed to have “beneficial ownership” of all shares that any such Person hasthe right to acquire, whether such right is exercisable immediately or onlyafter the passage of time) of 20% or more (or, if such Person is anInstitutional Investor (as such term is defined in the Rights Agreement datedas of November 20, 1998 between Northwest Airlines Corporation and Norwest BankMinnesota, N.A.), 25% or more), of either (A) the then outstanding shares ofCommon Stock of the Company (or its successor by merger, consolidation orpurchase of all or substantially all of its assets) (the “Outstanding CommonStock”) or (B) the combined voting power of the then outstanding votingsecurities of the Company (or its successor by merger, consolidation orpurchase of all or substantially all of its assets) entitled to vote generallyin 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 lesserpercentage of that which is described in each of clause (A) and  (B) above and do not have the right orability by voting power, contract or otherwise to elect or designate forelection a majority of the board of directors of the Company or such 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, ornomination for election by the Company’s stockholders, was approved by a voteof at least a majority of the directors then comprising the Incumbent Boardshall be considered as though such individual were a member of the IncumbentBoard, but excluding, for this purpose, any such individual whose initialassumption of office occurs as a result of an actual or threatened electioncontest with respect to the election or removal of directors or other actual orthreatened solicitation of proxies or consents by or on behalf of a Personother 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,

 

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directly or indirectly, more than 50% of, respectively, the thenoutstanding shares of common stock and the combined voting power of the thenoutstanding voting securities entitled to vote generally in the election ofdirectors, as the case may be, of the corporation resulting from such BusinessCombination (including, without limitation, a corporation which as a result ofsuch transaction owns the Company or all or substantially all of the Company’sassets either directly or through one or more subsidiaries) in substantiallythe same proportions as their ownership immediately prior to such BusinessCombination of the Outstanding Common Stock and Outstanding Voting Securities,as the case may be, and (ii) at least a majority of the members of the board ofdirectors of the corporation resulting from such Business Combination weremembers of the Incumbent Board at the time of the execution of the initial agreementor of the action of such Board providing for such Business Combination; or

 

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

 

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EXHIBIT A

 

ASSIGNMENT SEPARATE FROM CERTIFICATE

 

FOR VALUE RECEIVED, [                 ](the “Grantee”) hereby assigns and transfers unto NORTHWEST AIRLINESCORPORATION, a Delaware corporation (the “Company”), (           )shares of Company’s common stock, par value $0.01 per share (the “Common Stock”),standing in his name on the books of said corporation represented byCertificate No.      herewith and does hereby irrevocablyconstitute and appoint                               to transfer the said stock on the books of the within named corporation withfull power of substitution in the premises.

 

This Assignment Separate from Certificate may be used only inaccordance with the Restricted Stock Agreement (the “Agreement”) of the Companyand the undersigned dated             ,     .

 
| Dated: |   | , |   |   | Signature: |   |   |
|--------|--------|---|--------|--------|------------|--------|--------|

 

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