EXHIBIT 10.63
Name of Optionee: Number of Shares Subject
[ ] to the Option: [ ]
Grant Date: [ ]
NON-QUALIFIED STOCK OPTION AGREEMENT
THIS AGREEMENT is made by and between Northwest Airlines Corporation, a
Delaware corporation ("NAC"), and [ ], the optionee
named above (the "OPTIONEE"), and employee of NAC or a Subsidiary (as defined
below) of NAC.
WHEREAS, pursuant to, and subject to the terms and conditions of, the 0000
Xxxxxxxxx Xxxxxxxx Corporation Stock Incentive Plan (the "PLAN"), NAC granted
to the Optionee on [ ] (the "GRANT DATE") the nonqualified
option herein described (the "OPTION") and notified the Optionee of the grant
of the Option;
WHEREAS, the Plan provides that each option granted thereunder shall be
evidenced by a written option agreement; and
WHEREAS, NAC and the Optionee desire to enter into this Option Agreement for
the purpose of complying with the provisions of the Plan with respect to the
Option.
NOW, THEREFORE, in consideration of the mutual covenants herein contained and
other good and valuable consideration, receipt of which is hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
All capitalized terms used in this Agreement shall have the meaning
attributed to them in the Plan or as set forth below, unless the context
indicates otherwise.
SECTION 1.1 - CAUSE
"CAUSE" shall mean with respect to the termination of the Optionee's
employment with NAC or a Subsidiary (a) an act or acts of personal dishonesty
by the Optionee intended to result in substantial personal enrichment of the
Optionee at the expense of NAC, (b) an act or acts of personal dishonesty by
the Optionee intended to cause substantial injury to NAC, (c) material breath
(other than as a result of a Disability) by the Optionee of the Optionee's
obligations under the terms and conditions of Optionee's employment, which
actions was (i) undertaken without a reasonable belief that the action was in
the best interest of NAC and (ii) not remedied within a reasonable period of
time after receipt of written notice from NAC specifying the alleged breach,
or (d) the conviction of the Optionee of a felony.
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SECTION 1.2 - COMMITTEE
"COMMITTEE" shall mean the Compensation and Stock Option Committee of NAC's
Board of Directors, the Compensation Administration Subcommittee thereof, or
such other committee of the Board of Directors of NAC that shall be appointed
from time to time to administer the Plan.
SECTION 1.3 - DISABILITY
"DISABILITY" shall mean the Optionee's physical or mental condition which
prevents continued performance of his or her duties and for which the
Optionee establishes by medical evidence that such condition will be
permanent and continuous during the remainder of the Optionee's life or is
likely to be of at least three (3) years' duration.
SECTION 1.4 - EXPIRATION DATE
"EXPIRATION DATE" shall mean the date on which the Option shall expire
pursuant to Section 2.4, unless terminated earlier pursuant to Section 3.2.
SECTION 1.5 - PURCHASE PRICE
"PURCHASE PRICE" shall mean the price set forth in Section 2.3 of this
Agreement.
SECTION 1.6 - RETIREMENT
"RETIREMENT" shall mean separation from service with NAC or a Subsidiary on
or after attainment of age sixty-five (65) or, with the prior written consent
of the Committee that such separation will be treated as a Retirement,
separation from service with NAC or a Subsidiary prior to attainment of age
sixty-five (65).
SECTION 1.7 - SECRETARY
"SECRETARY" shall mean the Secretary of NAC.
SECTION 1.8 - SUBSIDIARY
"SUBSIDIARY" shall mean any corporation in an unbroken chain of corporations
beginning with NAC if each of the corporations other than the last
corporation in the unbroken chain then
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owns stock possessing fifty percent (50%) or more of the total combined
voting power of all classes of stock in one (1) of the other corporations in
such chain.
SECTION 1.9 - TERMINATION OF EMPLOYMENT
"TERMINATION OF EMPLOYMENT" shall mean the time when the employee-employer
relationship between the Optionee and NAC or any Subsidiary ceases for any
reason whatsoever.
ARTICLE II
THE OPTION
SECTION 2.1 - NUMBER OF SHARES
For good and valuable consideration, on the Grant Date, NAC irrevocably
grants to the Optionee on option to purchase all or any part of an aggregate
of [ ] shares of its Class A Common Stock, par value $.01 per share (the
"COMMON STOCK"), upon the terms and conditions set forth in this Agreement.
SECTION 2.2 - ADJUSTMENTS IN SHARES
If all or any portion of the Option is exercised subsequent to any stock
dividend, stock split, recapitalization, merger, consolidation, combination
or exchange of shares, separation, reorganization or liquidation as a result
of which shares of any class shall be issued in respect of outstanding shares
of Common Stock, or shares of Common Stock shall be changed into the same or
a different number of shares of the same or another class or classes, the
Optionee shall receive, upon exercise of the Option and for the aggregate
price paid upon such exercise of the Option, the aggregate number and class
of shares which, if shares of Common Stock (as authorized at the Grant Date)
had been purchased at the Grant Date for the same aggregate price (on the
basis of the Purchase Price per share set forth in Section 2.3 hereof) and
had not been disposed of, the Optionee would be holding, at the time of such
exercise, as a result of such purchase and any such stock dividend, stock
split, recapitalization, merger, consolidation, combination or exchange of
shares, separation, reorganization or liquidation; PROVIDED, HOWEVER, that no
fractional share shall be issued upon any such exercise, and the aggregate
price paid shall be appropriately reduced on account of any fractional share
not issued.
SECTION 2.3 - PURCHASE PRICE
The Purchase Price of the shares of Common Stock subject to the Option shall
be $[ ] per share without commission or other charge.
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SECTION 2.4 - OPTION TERM
The term of the Option shall be for a period of ten (10) years from the Grant
Date, subject to earlier termination as provided in Section 3.2 hereof.
ARTICLE III
EXERCISABILITY; TERMINATION
SECTION 3.1 - EXERCISABILITY
Subject to the provisions of Section 3.2 hereof, the Option, to the extent
not theretofore exercised, may be exercised at any time or from time to time,
as to any part or all of the shares subject to the Option in accordance with
the following schedule:
Date Option Becomes Percentage of Total Shares as
Exercisable to Which Option is Exercisable
------------------- ------------------------------
[
]
SECTION 3.2 - TERMINATION
(a) RETIREMENT. If a Termination of Employment shall occur by reason
of the Optionee's Retirement, any portion of the Option that was
exercisable as of the date of such Retirement and not theretofore
exercised, may be exercised by the Optionee at any time within one
(1) year after the date of such Retirement; PROVIDED, HOWEVER, that
if the Optionee dies or becomes Disabled within one (1) year after
such Retirement, then any portion of the Option that was exercisable
as of the date of the Optionee's Retirement and not theretofore
exercised shall not terminate pursuant to this Section 3.2 and may
be exercised during the remainder of the term of the Option by
the Optionee or by the estate of the Optionee or a person who shall
have acquired the right to exercise the Option by bequest or
inheritance. Any portion of the Option that was not exercisable as
of the date of such Retirement shall be cancelled immediately upon
such Retirement.
(b) DEATH OR DISABILITY. If a Termination of Employment shall occur by
reason of the Optionee's death or Disability, then any portion of the
Option that was exercisable as of the date of such death or
Disability and not theretofore exercised shall not terminate and may
be exercised during the remainder of the
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term of the Option by the Optionee or by the estate of the Optionee
or a person who shall have acquired the right to exercise the Option
by bequest or inheritance. Any portion of the Option that was not
exercisable as of the date of such death or Disability shall be
cancelled immediately upon such death or Disability.
(c) TERMINATION OF EMPLOYMENT FOR CAUSE. If the Optionee's employment
shall terminate for Cause, the Option, to the extent not theretofore
exercised, shall be cancelled immediately upon such Termination of
Employment.
(d) TERMINATION OF EMPLOYMENT OTHER THAN FOR CAUSE, DEATH, DISABILITY
OR RETIREMENT. If the employment of the Optionee shall be terminated
otherwise than by reason of Cause, death, Disability or Retirement,
any portion of the Option that was exercisable as of the date of such
Termination of Employment and not theretofore exercised may be
exercised by the Optionee at any time within ninety (90) days after
the date of such Termination of Employment. Any portion of the Option
that was not exercisable as of the date of such Termination of
Employment shall be cancelled immediately upon such Termination of
Employment.
ARTICLE IV
EXERCISE OF OPTION; ISSUANCE OF SHARES
SECTION 4.1 - TRANSFERABILITY
The Option may not be sold, transferred, pledged, assigned or otherwise
alienated or hypothecated and shall not be subject to execution, attachment
or similar process. Any attempted sale, transfer, pledge, assignment,
hypothecation or other disposition of the Option contrary to the provisions
hereof, or the levy of any execution, attachment or similar process upon the
Option, shall be null and void and without effect. In addition, the Option
may be exercised during the lifetime of the Optionee only by the Optionee.
Notwithstanding the foregoing, the designation of a beneficiary by the
Optionee does not constitute such transfer and, after the death of the
Optionee, any exercisable portion of the Option may be exercised by the
estate of the Optionee or by a person who shall have acquired the right to
exercise the Option by bequest or inheritance in accordance with the
provisions of Sections 3.2(a) and 3.2(b).
SECTION 4.2 - MANNER OF EXERCISE
Subject to the terms and conditions of this Agreement, the Option, or any
portion thereof, may be exercised by delivery of written notice of such
exercise to NAC at its principal office at 0000 Xxxxxxxxx Xxxxx, Xx. Xxxx,
Xxxxxxxxx 00000-0000, attention of the Secretary. Such notice shall state the
election to exercise the Option and the number of shares in respect of
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which it is being exercised and shall be signed by the person or persons so
exercising the Option. Such notice shall be accompanied by payment of the
full Purchase Price of such shares in the following manner:
(a) By cash (in United States dollars) or by check, bank draft or money
order payable to the order of NAC;
(b) through the delivery of shares of Common Stock with an aggregate
fair market value on the date the Option is exercised equal to the
full Purchase Price of such shares (the fair market value of such
shares shall be determined by the average of the high and low sale
price of a share of Common Stock on the NASDAQ National Market
System on such date);
(c) to the extent authorized by the Committee in its sole discretion, by
delivery of irrecovable instructions to a financial institution to
deliver promptly to NAC a portion of the proceeds obtained from the
sale of the shares of Common Stock issuable upon exercise of the
Option, which proceeds shall equal the full Purchase Price of such
shares; or
(d) by any other means which the Committee shall approve.
Such notice shall also be accompanied by payment of all amounts which NAC is
required under federal, state or local law to withhold upon the exercise of
the Option. In the event that the Option shall be exercised, pursuant to
Sections 3.2(a) and 3.2(b) hereof, by any person or persons other than the
Optionee, such notice shall be accompanied by appropriate proof of the right
to such person or persons to exercise the Option.
SECTION 4.3 - ISSUANCE OF SHARES OF COMMON STOCK
The certificate or certificates for the shares as to which the Option shall
have been exercised in the manner set forth in Section 4.2 hereof shall be
registered in the name of the person or persons so exercising the Option and
shall be delivered after payment of the full Purchase Price and any
applicable withholding taxes to or upon the written order of the person or
persons exercising the Option. All shares that shall be purchased upon the
exercise of the Option shall be fully paid and nonassessable. Anything in
this Agreement to the contrary notwithstanding, the obligation of NAC to sell
and deliver shares of Common Stock upon exercise of the Option shall be
subject to (i) all applicable laws, rules and regulations and such approvals
by any governmental agencies as may be required, including, without
limitation, the effectiveness of a registration statement under the
Securities Act of 1933, as amended, as deemed necessary or appropriate by
counsel for NAC and (ii) such shares having been approved for trading on the
NASDAQ National Market System.
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ARTICLE V
MISCELLANEOUS
SECTION 6.1 - ADMINISTRATION
The Committee shall have the power to interpret the Plan and this Agreement
and to adopt such rules for the administration, interpretation and
application of the Plan as are consistent therewith and to interpret or
revoke any such rules. All actions taken and all interpretations and
determinations made by the Committee shall be final and binding upon the
Optionee, NAC and all other interested persons. No member of the Committee
shall be personally liable for any action, determination or interpretation
made in good faith with respect to the Plan or the Option. In its absolute
discretion, the Board of Directors of NAC may at any time and from time to
time exercise any and all rights and duties of the Committee under the Plan
and this Agreement.
SECTION 6.2 - TERMINATION OF EMPLOYMENT
For purposes of this Option, the Committee, in its absolute discretion, shall
determine the effect of all matters and questions relating to Termination of
Employment, including, without limitation, all questions of whether
particular leaves of absence constitute Terminations of Employment and
whether any reemployment by NAC shall be deemed to be simultaneous with
termination.
SECTION 6.3 - PLAN DOES NOT CONFER EMPLOYMENT OR STOCKHOLDER RIGHTS
Nothing in this Agreement shall confer upon the Optionee any right to
continue in the employ of NAC or any Subsidiary or interfere in any way with
the right of NAC or any Subsidiary to terminate the employment of the
Optionee at any time. Neither the Optionee nor any person entitled to
exercise the Optionee's rights in the event of the Optionee's death shall
have any of the rights of a stockholder of NAC with respect to the shares
subject to the Option except and to the extent that, and until, such shares
shall have been issued by NAC upon the exercise of the Option.
SECTION 6.4 - SHARES TO BE RESERVED
NAC shall at all times during the term of the Option reserve and keep
available such number of shares of Common Stock as will be sufficient to
satisfy the requirements of this Agreement.
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SECTION 6.5 - TITLES
Titles are provided herein for convenience only and are not to serve as a
basis for interpretation or construction of this Agreement.
SECTION 6.6 - AMENDMENT
This Agreement may be amended only by a writing executed by the parties
hereto which specifically states that it is amending this Agreement.
SECTION 6.7 - GOVERNING LAW
The laws of the State of Delaware 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.
SECTION 6.8 - JURISDICTION
Any suit, action or proceeding against the Optionee 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 States of
Delaware, Minnesota or New York, as NAC may elect in its sole discretion, and
the Optionee hereby submits to the non-exclusive jurisdiction of such courts
for the purpose of any such suit, action, proceeding or judgment.
SECTION 6.9 - NOTICES
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:
(a) If to NAC, to it at the following address:
Northwest Airlines Corporation
0000 Xxxxxxxxx Xxxxx
Xx. Xxxx, Xxxxxxxxx 00000-0000
Attn: Senior Vice President, General Counsel and Secretary
(b) If to the Optionee, to him at the address set forth below under his
signature;
or at such other address as either party shall from time to time specify by
notice in writing to the other.
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SECTION 6.10 - COUNTERPARTS
This Agreement may be executed in two or more counterparts.
IN WITNESS WHEREOF, this Agreement has been executed and delivered by the
parties hereto.
Dated as of ___________________, _________
NORTHWEST AIRLINES CORPORATION
By: ______________________________________
Its: SVP-General Counsel & Secretary
OPTIONEE
__________________________________________
Optionee's Taxpayer Identification
Number_________________________
OPTIONEE'S ADDRESS:
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Xxxxxxxxx Airlines, Inc. 000 000-0000
Department A1180 000 000-0000 Fax
0000 Xxxxxxxxx Xxxxx
Xx. Xxxx XX 00000-0000
[ ]
To: [ ]
Dear [ ]:
You presently are party to [ ] Non-Qualified Stock Option Agreement[s]
with the Company dated [ ] in which portions
of the options granted to you are not yet exercisable.
By this letter, each of these Agreements is hereby amended to add a new
Section 3.3:
SECTION 3.3 - ACCELERATION
Notwithstanding the provisions in Section 3.1 above, any portion of the
Option that is not yet exercisable and has not otherwise been canceled
pursuant to Section 3.2 above shall otherwise become exercisable as
follows:
(a) Upon the occurrence of a Change of Control (as defined below), all
shares subject to the Option not theretofore exercised or canceled
shall become exercisable; or
(b) In the event of a merger between NAC and any U.S. passenger airline
conducting jet operations using aircraft with 100 or more seats,
which merger does not constitute a Change in Control of NAC for
purposes of this Agreement, but would constitute a Change in
Control of the other air
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carrier if the definition of Change in Control in this Agreement were to be
applied to such air carrier, all shares subject to the Option not theretofore
exercised or canceled shall become exercisable in the event that, after such
a merger, (i) the Optionee's employment is terminated by the Company other
than for Cause or (ii) the Optionee terminates his or her employment for Good
Reason, (as the term "Good Reason" is defined in that certain Management
Compensation Agreement between Optionee and Northwest Airlines, Inc.).
(c) The term "Change of Control" shall mean any one of the following:
(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") of
beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 50% of more of either
(i) the then outstanding shares of Common Stock of NAC (the
"Outstanding Parent Common Stock") or (ii) the combined voting
power of the then outstanding voting securities of NAC
entitled to vote generally in the election of directors (the
"Outstanding Parent Voting Securities") provided, however,
that this subsection (a) shall not apply to the Investor
Stockholders party to the Second Amended and Restated
Stockholders' Agreement dated as of December 23, 1993; or
(ii) Individuals who, as of June 1, 1994, constitute the Board of
Directors of NAC (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
June 1, 1994, whose election, or nomination for election by
NAC'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
NAC; or
(iii) Approval by the stockholders of NAC of a reorganization,
merger or consolidation (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
Parent Common Stock and
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Outstanding Parent 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 NAC through one or
more subsidiaries) in substantially the same proportions as
their ownership immediately prior to such Business
Combination of the Outstanding Parent Stock and Outstanding
Parent Voting Securities, as 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
(iv) Approval by the stockholders of NAC of (i) a complete
liquidation or dissolution of NAC or (ii) the sale or other
disposition of all or substantially all of the assets of NAC,
other than to a corporation with respect to which following
such sale or other disposition, (X) more than 50% of,
respectively, the then outstanding shares of common stock of
such corporation and the combined voting power of the then
outstanding voting securities of such corporation entitled to
vote generally in the election of directors is then
beneficially owned, directly or indirectly, by all or
substantially all of the individuals and entities who were
the beneficial owners respectively, of the Outstanding Parent
Common Stock and Outstanding Parent Voting Securities
immediately prior to such sale or other disposition in
substantially the same proportion as their ownership
immediately prior to such sale or other disposition of the
Outstanding Parent Common Stock and Outstanding Parent Voting
Securities, as the case may be, and (Y) at least a majority
of the members of the board of directors of such corporation
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 sale or other disposition of assets
of NAC or were elected, appointed or nominated by the
Incumbent Board.
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If this amendment is acceptable to you, please sign where indicated below.
Sincerely yours,
Xxxxxxx X. Xxxxxxxxx
Accepted and Agreed
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[ ]
