Exhibit 10.63
NORTHWEST AIRLINES CORPORATION
Phantom Stock Unit Award Agreement
THIS AGREEMENT is made as of this 21st day of June, 1999, by and between
NORTHWEST AIRLINES CORPORATION, a Delaware corporation (the "Company"), and Xxxx
X. Xxxxxxx (the "Participant"), an employee of Northwest Airlines, Inc.
("Northwest"), a wholly-owned subsidiary of the Company.
WHEREAS, the Company granted to the Participant on April 22, 1999
(the "Award Date") a phantom stock unit award (the "Award") on the terms
and conditions set forth in this Agreement and notified the Participant of
the Award; and
WHEREAS, the Company and the Participant desire to enter into this
Agreement for the purpose of evidencing the terms and conditions of the
Award.
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 1. DEFINITIONS
For purposes of this Agreement, in addition to the definitions set forth
above and elsewhere in this Agreement, the following terms shall have the
meanings specified below:
1.1 "Administrator" shall mean the Chairman of the Compensation and Stock
Option Committee of the Board or any successor committee.
1.2 "Affiliate" shall mean (i) any entity that, directly or indirectly
through one or more intermediaries, is controlled by the Company, and (ii) any
entity in which the Company has a significant equity interest, in each case as
determined by the Board.
1.3 "Board" means the Board of Directors of the Company.
1.4 "Common Stock" shall mean the common stock, par value $.01 per share
of the Company.
1.5 "Fair Market Value" shall mean, with respect to a share of Common
Stock, the average closing sale price of the Common Stock as reported on the
NASDAQ National Market for the trading days that occur during the applicable
Valuation Period.
1.6 "Payment Date" shall mean, with respect to the Units that vest during
any Vesting Period pursuant to Section 2.2 (b) or (c) hereof, February 1 next
following the end of the applicable Vesting Period and, with respect to the
Units that vest on the Award Date pursuant to Section 2.2(a) hereof, any date on
or before ten (10) days following the Award Date.
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1.7 "Proration Fraction" shall mean a fraction, the numerator of which is
the number of days in any calendar year up to and including the date on which a
Termination of Employment occurs and the denominator of which is 365.
1.8 "Termination of Employment" shall mean the time when the
employee-employer relationship between the Participant and Northwest and any
Affiliate of the Company ceases for any reason whatsoever.
1.9 "Unit" shall mean a phantom stock unit which represents, when vested,
the right to receive a payment in cash on the applicable Payment Date equal to
the Fair Market Value of a share of Common Stock.
1.10 "Valuation Period" shall mean, with respect to the Units that vest
during any Vesting Period pursuant to Section 2.2 (b) or (c) hereof, the period
beginning on January 10 and ending on January 20 immediately preceding the
applicable Payment Date and, with respect to the Units that vest on the Award
Date pursuant to Section 2.2(a) hereof, the period beginning on January 11, 1999
and ending on the tenth (10th) trading day following January 11, 1999.
1.11 "Vesting Period" shall mean each of the three (3) calendar years
during the period commencing on January 1, 1999 and ending on December 31, 2001.
ARTICLE 2. THE UNIT AWARD
2.1 Number of Units. For good and valuable consideration, on the Award
Date the Company grants to the Participant an award of 80,000 Units upon the
terms and conditions set forth in this Agreement.
2.2 Vesting. The rights of the Participant with respect to the Units shall
remain forfeitable at all times prior to the date on which such Units become
vested in accordance with this Section 2.2. Subject to the terms and conditions
of this Agreement, the Units shall vest as follows:
(a) 20,000 Units shall vest on the Award Date.
(b) So long as no Termination of Employment has occurred, 20,000 Units
shall vest on the last day of each Vesting Period.
(c) If a Termination of Employment shall occur during any Vesting
Period, the number of Units which shall vest with respect to such
Vesting Period shall equal 20,000 multiplied by the Proration
Fraction. Any remaining Units that have not vested in accordance
with this Section 2.2 shall be canceled immediately upon any such
Termination of Employment and the Participant shall have
automatically forfeited any rights to such unvested Units as of the
date of such Termination of Employment.
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2.3 Payment of Units. On the applicable Payment Date, the Company shall
pay to the Participant an amount in cash equal to the Fair Market Value of all
Units which vest in accordance with Section 2.2 hereof.
2.4 Tax Withholding. The Company shall have the power and the right to
deduct or withhold an amount in cash sufficient to satisfy federal, state and
local taxes required by law to be withheld in connection with any payment made
hereunder.
2.5 No Payment of Dividends or Dividend Equivalents. The Participant shall
not be entitled to receive dividend or dividend equivalents with respect to the
Units.
2.6 Deferral of Payment. Subject to the consent of and the terms and
conditions imposed by the Company, the Participant may defer receipt of any
amount otherwise payable under this Agreement.
ARTICLE 3. MISCELLANEOUS
3.1 Equitable Adjustment. In the event of any merger, reorganization,
consolidation, recapitalization, separation, spin-off, liquidation, stock
dividend, split-up, share combination or other change in the corporate or
capital structure of the Company affecting its Common Stock, the number of Units
granted hereunder which remain unvested at the time of such event shall be
equitably adjusted to prevent dilution or enlargement of the Participant's
rights hereunder and, if necessary, provision shall be made for the substitution
for the Units of new phantom stock units related to the securities of a
successor employer corporation or an affiliate thereof, with appropriate
adjustments as to the number and kind of securities; provided that the total
number of Units granted hereunder shall always be a whole number.
3.2 Transferability. Units may not be sold, transferred, pledged, assigned
or otherwise alienated or hypothecated other than by will or by the laws of
descent and distribution and shall not be subject to execution, attachment or
similar process. Any attempted sale, transfer, pledge, assignment, hypothecation
or other disposition of the Units contrary to the provisions hereof, or the levy
of any execution, attachment or similar process upon the Units, shall be null
and void and without effect. No transfer by will or the applicable laws of
descent and distribution of any Units that have vested pursuant to this
Agreement as of the date of the Participant's death shall be effective to bind
the Company unless the Administrator shall have been furnished with written
notice of such transfer and a copy of the will or such other evidence as the
Administrator may deem necessary to establish the validity of the transfer.
3.3 Termination of Employment. For purposes of the Units, the
Administrator, 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 re-employment by the Company shall be
deemed to be simultaneous with termination.
3.4 Agreement Does Not Confer Employment or Stockholder Rights. Nothing in
this
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Agreement shall confer upon the Participant any right to continue in the employ
of Northwest or any Affiliate of the Company or interfere in any way with the
right of Northwest or any Affiliate to terminate the employment of the
Participant at any time. Neither the Participant nor any person entitled to
exercise the Participant's rights under this Agreement in the event of the
Participant's death shall have any of the rights of a stockholder of the Company
with respect to the Units.
3.5 Non-Exclusive. Nothing contained in this Agreement shall prevent the
Board from adopting other or additional compensation arrangements; and such
arrangements may be either generally applicable or applicable only in specific
cases.
3.6 Unfunded Status. The Award is intended to be an "unfunded"
compensation arrangement. With respect to any payments not yet made to the
Participant by the Company, nothing contained herein shall give the Participant
nor any person entitled to exercise the Participant's rights under this
Agreement in the event of the Participant's death any rights that are greater
than those of a general creditor of the Company.
3.7 Titles. Titles are provided herein for convenience only and are not to
serve as a basis for interpretation or construction of this Agreement.
3.8 Amendment. This Agreement may be amended only by a writing executed by
the parties hereto which specifically states that it is amending this Agreement.
3.9 Governing Law. The laws of the State of Minnesota 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.
3.10 Jurisdiction. Any suit, action or proceeding against the Participant
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
State of Minnesota, and the Participant hereby submits to the non-exclusive
jurisdiction of such courts for the purpose of any such suit, action, proceeding
or judgment.
3.11 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 the Company, to it at the following address:
Northwest Airlines Corporation
0000 Xxxxxxxxx Xxxxx
Xx. Xxxx, Xxxxxxxxx 00000-0000
Attn: Executive Vice President -
Alliances, General Counsel & Secretary
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(b) If to the Participant, 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.
3.12 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.
NORTHWEST AIRLINES CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxxxx
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Xxxxxxx X. Xxxxxxxxx
Executive Vice President - Alliances, General Counsel & Secretary
PARTICIPANT:
/s/ Xxxx X. Xxxxxxx
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Xxxx X. Xxxxxxx
Participant's Taxpayer Identification
Number:
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PARTICIPANT'S ADDRESS:
0 Xxxxxxxx Xxxx
Xxxxx, Xxxxxxxxx 00000
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