**Exhibit 10.4**

 

**NORTHWEST AIRLINES CORPORATION**

**E-COMMERCE INCENTIVE COMPENSATION PROGRAM**

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**(As Amended and Restated as of April 22, 2004)**

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# I                                       PURPOSE OF PROGRAM

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This NorthwestAirlines Corporation E-Commerce Incentive Compensation Program (the “Program”)is intended to provide a method for attracting, motivating, and retaining keyemployees to assist in the development and growth of the Company and itsSubsidiaries.

 

# II                                   DEFINITIONS AND CONSTRUCTION

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2.1.                    Definitions.  Where the following words and phrases are usedin the Program, they shall have the respective meanings set forth below, unlessthe context clearly indicates to the contrary:

 

### (a)                   “Act” means TheSecurities Exchange Act of 1934, as amended, or any successor thereto.

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### (b)                  “Award” meansthe award of one or more Points to a Participant in accordance with Article IV.

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### (c)                   “Award Notice”means a written notice issued by the Company to a Participant evidencing suchParticipant’s receipt of an Award and setting forth certain terms andconditions with respect thereto in accordance with Section 4.2.

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### (d)                  “Base Value”means, with respect to each Phantom Unit subject to an Award, an amount equalto (i) the sum of (A) the sum of the Investment Cost of each Investment towhich such Phantom Unit relates and (B) a fifteen percent compounded annualreturn on the Investment Cost of each such Investment, as determined in thesole discretion of the Committee, divided by (ii) the number of Phantom Unitsinto which such Investment or group of Investments is divided (with the resultrounded to the nearest cent). Notwithstanding the foregoing, at any time prior to a Change in Controlthe Committee may, in its sole discretion, determine at the time of the grantof any such Award that the Investment Cost component of the Base Value of sucha Phantom Unit shall be greater than the amount set forth in the precedingsentence, and the Committee shall make each such determination based on suchfactors and information as it deems relevant.

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### (e)                   “BeneficialOwner” means a “beneficial owner”, as such term is defined in Rule 13d-3under the Act (or any successor rule thereto).

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### (f)                     “Board” meansthe Board of Directors of the Company.

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### (g)                  “Cause” means “Cause”as defined in an employment agreement between the Participant and the Companyor a Subsidiary or if the Participant has not entered into an employmentagreement with the Company or a Subsidiary, the involuntary termination of suchParticipant’s employment by the Company (or, if applicable, a Subsidiary) based

 

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### upon adetermination by the Committee or an authorized officer of the Company (or suchSubsidiary) that such Participant has engaged in gross negligence or willfulmisconduct in the performance of, or such Participant has abused alcohol ordrugs rendering him or her unable to perform, the material duties and servicesrequired of him or her in his or her employment.

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### (h)                  “Change inControl” means any one of the following:

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#### (i)                            Theacquisition by any individual, entity or group (within the meaning of Section13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934 (the “Exchange Act”))(a “Person”), other than one or more Permitted Holders or their Related Partiesor any group comprised exclusively of Permitted Holders or their RelatedParties, of beneficial ownership (within the meaning of Rule 13d-3 and 13d-5promulgated under the Exchange Act, except that such person shall be deemed tohave “beneficial ownership” of all shares that any such Person has the right toacquire, whether such right is exercisable immediately or only after thepassage of time) of 20% or more (or, if such Person is an InstitutionalInvestor (as such term is defined in the Rights Agreement dated as of November20, 1998 between Northwest Airlines Corporation and Norwest Bank Minnesota,N.A.), 25% or more), of either (A) the then outstanding shares of common stockof the Company (or its successor by merger, consolidation or purchase of all orsubstantially all of its assets) (the “Outstanding Common Stock”) or (B) thecombined voting power of the then outstanding voting securities of the Company(or its successor by merger, consolidation or purchase of all or substantiallyall of its assets) entitled to vote generally in the election of directors (the“Outstanding Voting Securities”), and (ii) the Permitted Holders or theirRelated Parties collectively “beneficially own” (within the meaning of Rule13d-3 promulgated under the Exchange Act) a lesser percentage of that which isdescribed in each of clause (A) and  (B)above and do not have the right or ability by voting power, contract orotherwise to elect or designate for election a majority of the board ofdirectors of the Company or such successor;

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#### (ii)                        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 any individual becoming a director subsequent to the date hereof, whoseelection, or nomination for election by the Company’s stockholders, was approvedby a vote 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; or

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#### (iii)                     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

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#### 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 the case may be, and (ii) at least a majority of the members ofthe board of directors of the corporation resulting from such BusinessCombination were members of the Incumbent Board at the time of the execution ofthe initial agreement or of the action of such Board providing for suchBusiness Combination; or

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

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### (i)                      “Code” meansthe Internal Revenue Code of 1986, as amended.

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### (j)                      “Committee”means the Compensation Committee of the Board.

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### (k)                   “Company” meansNorthwest Airlines Corporation, a Delaware corporation.

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### (l)                      “Date ofGrant” means the effective date of the grant of an Award to a Participant.

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### (m)                “Disability”means, with respect to a Participant, such Participant’s disability entitlinghim or her to benefits under the Company’s group long-term disability plan;provided, however, that if such Participant is not eligible to participate insuch plan, then such Participant shall be considered to have incurred a “Disability”if and when the Committee determines in its discretion that such Participanthas become incapacitated for a period of at least 180 days by accident,sickness, or other circumstance which renders such Participant mentally orphysically incapable of performing the material duties and services required ofhim or her in his or her employment on a full-time basis during such period.

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### (n)                  “Disposition”means, with respect to each Investment, a transfer, sale, exchange or otherdisposition (other than pursuant to Section 6.1 hereof) of all or a portion ofsuch Investment by the Company or a Subsidiary, as applicable, to one or moreTransferees.  A Disposition shall includea Stockholder Disposition.  A Dispositionshall not include the exercise of a convertible security (including an optionor warrant), but such an exercise shall require an adjustment to related Awardspursuant to Section 4.6.  The Committeemay determine that a transaction involving an exchange of a security for otherconsideration is not a Disposition (1) to the extent such other considerationconsists of securities other than Publicly Traded securities that are Liquid,or (2) to the extent that such transaction is effected on a tax- free basis tothe Company or the applicable

 

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### Subsidiary(and, in connection with such determination, the Committee may make anyappropriate adjustments to related Awards pursuant to Section 4.6).  For purposes of determining Market Valueunder the Program, the net proceeds of a Disposition of an Investment shall beallocated to Phantom Units in accordance with the number of Phantom Units intowhich such Investment is divided.

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### (o)                  “Distribution”means, with respect to each Investment, a dividend or other distribution (otherthan a dividend or distribution that the Committee has determined should beincluded as a part of such Investment or with respect to which an adjustment ismade to an outstanding Award pursuant to Section 4.6) received with respect tosuch Investment by the Company or a Subsidiary, as applicable.

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### (p)                  “Effective Date”means December 7, 2000.

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### (q)                  “Eligible Employee”means any individual who is an officer or a highly compensated management levelemployee of the Company or any parent corporation or Subsidiary.

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### (r)                     “Follow-upAward” shall have the meaning assigned to such term in Section 4.5.

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### (s)                   “Follow-up Investment”means, with respect to a then-existing Investment, any other equity holdingthat is subsequently acquired by the Company or a Subsidiary based on thesatisfaction of performance targets, vesting provisions, or other terms andconditions set forth in one or more agreements (as the same may be amended fromtime to time) to which the Company or a Subsidiary is a party, whichagreement(s) were entered into in connection with such Investment.

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### (t)                     “Investment”means each equity holding of the Company or a Subsidiary in an e-commerce orinternet-based business that is subject to the Program, as determined by theCommittee.  The term “Investment” shallinclude a Follow-Up Investment, but each Follow-Up Investment shall beconsidered a new separate Investment. For purposes of Section 2.1(s) and this Section 2.1(t), an “equityholding” means any interest (including, without limitation, an option orwarrant) in an entity other than an instrument that is treated as indebtednessunder applicable local law and which has no substantial equity features.

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### (u)                  “Investment Cost”  means the actual out-of-pocket cost of anInvestment (as determined by the Committee) to the Company or a Subsidiary thatis paid to the issuer or seller of such Investment.

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### (v)                  “InvestmentPeriod” means (i) with respect to an Investment (other than a Follow-upInvestment), the 10-year period beginning on the first Date of Grant of anAward (or, with respect to an Investment added to an Award following the Dateof Grant, the date such Investment is added to an Award) to any individual withrespect to such Investment, and (ii) with respect to each Follow-up Investment,the 10-year period beginning on the first Date of Grant of an Award (or, withrespect to an Investment added to an Award following the Date of Grant, thedate such Investment is added to an Award) to any individual with respect tothe original Investment to which such Follow-up Investment relates.

 

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### (w)                “Liquid” means,with respect to each Investment, a determination by the Committee that (i) theCompany or a Subsidiary, as applicable, could sell all or substantially all ofsuch Investment under Rule 144 promulgated under the Securities Act of 1933,pursuant to an effective registration statement under the Securities Act of 1933(or under a similar procedure under foreign law), or otherwise without materialtransfer restrictions being imposed on a non-affiliate Transferee as a resultthereof, (ii) any such sale is not prohibited by law, regulation, court oradministrative order, rule of an exchange or market, contract, or otherwise,(iii) any such sale will not result in liability of the Company or anySubsidiary under Section 16(b) of the Securities Exchange Act of 1934, asamended (either because of transactions (including Award redemptions) alreadyeffected or because of prospective transactions (including Award redemptions)determined by the Committee to be reasonably probable), and (iv) there is anestablished public trading market for the securities comprising such Investmentwhich can be used to reasonably determine the Market Value of the Phantom Unitsrelating to such Investment.  Any otherInvestment may be considered Liquid if the Committee so determines in its solediscretion.

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### (x)                    “Market Value”means, the amount as of  a date (with theresult rounded to the nearest cent) determined by the Committee as follows:

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#### (i)                           If aDisposition (other than a Stockholder Disposition) has occurred with respect toall or a portion of the Investment or Investments to which such Phantom Unitrelates, then the Market Value as of the date of such Disposition shall equalthe sum of (A) the fair market value of the Distributions allocable to suchPhantom Unit that have been received by the Company or a Subsidiary withrespect to such Investment or Investments from the Date of Grant of theapplicable Award to the date of such Disposition (increased, in the case of anyDistribution received in cash, by 7% per annum from the date of receipt of suchDistribution by the Company or a Subsidiary to the date of such Disposition)and (B) the fair market value of the net proceeds to the Company or aSubsidiary with respect to such Disposition that are allocable to such PhantomUnit.  The fair market value determinationsrequired pursuant to the preceding sentence shall be made in good faith by theCommittee as of the date of such Disposition.

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#### (ii)                        If aDisposition of all or a portion of the Investment or Investments to which suchPhantom Unit relates has not occurred and if such Investment or Investments arePublicly Traded as of the date the Market Value is required to be determinedunder the Program, then the Market Value as of such date shall equal the sum of(A) the fair market value of the Distributions allocable to such Phantom Unitthat have been received by the Company or a Subsidiary with respect to suchInvestment or Investments from the Date of Grant of the applicable Award to thedate of such valuation (increased, in the case of any Distribution received incash, by 7% per annum from the date of receipt of such Distribution by theCompany or a Subsidiary to the date of such valuation) and (B) the fair marketvalue of such Investment based on the average of the high and low sales priceof the security that constitutes the Investment or Investments as of the dateof such valuation (or the immediately preceding Trading Day on which a saleoccurs if no sale occurs on such date) on the principal exchange for suchInvestment or Investments.  The fairmarket value determinations required

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#### pursuant tothe preceding sentence shall be made in good faith by the Committee as of thedate of such valuation.

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#### (iii)                     If aStockholder Disposition of the Investment or Investments to which such PhantomUnit relates has occurred at a time when such Investment or Investments arePublicly Traded, then the Market Value of such Phantom Unit as of the date ofsuch Stockholder Disposition shall be determined as provided in clause (ii)above (applied by substituting the date of such Stockholder Disposition for thedate of such valuation referred to in clause (ii)).

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#### (iv)                    If aDisposition of such Investment or Investments has not occurred and theInvestment or Investments to which such Phantom Unit relates is not PubliclyTraded as of the date the Market Value of such Phantom Unit is required to bemade under the Program, then the Market Value shall be determined by theCommittee.  The Committee’s determinationshall be made in good faith and shall be based on a valuation opinion preparedby a Valuation Expert who shall be selected by the Committee.  The Committee shall cause the opinion of theValuation Expert (who shall determine the fair market value of the Investmentto which such Phantom Unit relates) to be prepared no later than 60 days afterthe date as of which the Market Value is being determined.  The Market Value determined by the Committeebased on the opinion of the Valuation Expert shall be increased by theCommittee to reflect the fair market value (determined in good faith by theCommittee) of the Distributions allocable to such Phantom Unit that have beenreceived by the Company or a Subsidiary with respect to such Investment fromthe Date of Grant of the applicable Award to the date of such valuation(increased, in the case of any Distribution received in cash, by 7% per annumfrom the date of receipt of such Distribution by the Company or a Subsidiary tothe date of such valuation). All costs and expenses of the Valuation Expertshall be borne by the Company.

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### (y)                  “MeasurementDate” shall have the meaning assigned to such term in Section 6.3.

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### (z)                    “PAR” meansthe right to receive the excess, if any, of (i) the aggregate Market Valueattributable to all Investments relating to a Phantom Unit over (ii) the BaseValue of such Phantom Unit.

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### (aa)             “Participant” meansan Eligible Employee who has been granted an Award.

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### (bb)           “Permitted Holders”means each of Alfred A. Checchi, Gary L. Wilson, Frederic V. Malek or RichardC. Blum and Richard C. Blum & Associates — NWA Partners, L.P., and alsoincludes the Company and any employee benefit plan (or related trust) sponsoredor maintained by the Company or any corporation controlled by the Company.

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### (cc)             “Person” means a “person”,as such term is used for purposes of Section 13(d) or 14(d) of the Act (orany successor section thereto).

 

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### (dd)           “Phantom Unit” meansthe Committee’s determination of the unit by which to measure value, price, oramount with regard to an Investment or group of Investments.   At the time that the first Award is madewith respect to an Investment or group of Investments, the Committee shalldetermine in its sole discretion the number of Phantom Units into which suchInvestment or group of Investments shall be divided.  If the Committee does not designate the numberof Phantom Units into which a particular Investment or group of Investments isto be divided, then the Investment or group of Investments shall be dividedinto one thousand Phantom Units.  TheCommittee may, following the Date of Grant of an Award, add additionalInvestments, Follow-Up Investments or groups of Investments for purposes ofdetermining the value, price or amount of a Phantom Unit subject to such Award.

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### (ee)             “Point” means .1% ofthe Phantom Units relating to an Investment or group of Investments.

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### (ff)                 “Program” meansthis Northwest Airlines Corporation E-Commerce Incentive Compensation Program,as amended from time to time.

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### (gg)           “Publicly Traded”means, with respect to a particular Investment, that securities which are ofthe same class as the securities constituting all or substantially all of suchInvestment are either (i) registered under section 12 of the SecuritiesExchange Act of 1934, as amended, and listed on a U.S. national or regionalstock exchange or reported by the NASDAQ National Market System or (ii) listedfor trading on a national or regional stock exchange or market in a foreigncountry.  An Investment shall also beconsidered to be Publicly Traded if the Committee determines that the Companyor a Subsidiary could readily acquire by conversion, exchange, exercise orotherwise one or more securities described in the preceding sentence withrespect to all or substantially all of such Investment, and, under suchcircumstances, the Committee shall make appropriate and equitable adjustmentsto affected PARs and Awards (including, without limitation, adjustments to thedeterminations of the Base Value and Market Value applicable to related PhantomUnits) in connection with any redemption thereof under Article VI.

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### (hh)           “Redemption Amount”means, with respect to the vested portion of a PAR, the excess, as of aspecified date of (i) the sum of (A) the Market Value as of such date of all orany portion of Investments not subject to a Disposition and (B) the MarketValue of all or any portion of Investments subject to a Disposition (as of suchDisposition) over (ii) the sum of (A) the Base Value as of such date of suchPhantom Unit and (B) all allocations with respect to such Phantom Unitattributable to Investments subject to a Disposition or Redemption Election.

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### (ii)                   “RedemptionElection” shall have the meaning assigned to such term in Section 6.1.

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### (jj)                   “RedemptionElection Date” shall have the meaning assigned to such term inSection 6.1.

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### (kk)             “Related Parties”with respect to any Permitted Holders means (i) any spouse or immediate familymember of such Permitted Holder, any trust created primarily for the benefit ofany such individual or such individual’s estate, executor,

 

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### 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 majority controllinginterest of which consist of one or more of such Permitted Holders and/or suchother Person referred to in the immediately preceding clause (i).

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### (ll)                   “StockholderDisposition” means, with respect to each Investment, a distribution or otherdisposition of all or a portion of such Investment to the Company’sstockholders on a pro-rata basis.

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### (mm)       “Subsidiary” means anyentity with respect to which the Company, directly or indirectly through one ormore other entities, owns equity interests possessing 50 percent or more of thetotal combined voting power of all equity interests of such entity (excludingvoting power that arises only upon the occurrence of one or more specifiedevents).

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### (nn)           “Termination of Service”means the termination of a Participant’s employment with the Company and itsSubsidiaries.

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### (oo)           “Trading Day” means,with respect to any Investment, a day during which trading in securitiesgenerally occurs in the principal securities market on which such Investment istraded.

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### (pp)           “Transferee” means anyperson, corporation, partnership, limited liability company or partnership,association, trust, or other entity or organization that is not the Company ora Subsidiary.

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### (qq)           “Valuation Expert”means, with respect to each Investment, a nationally recognized investmentbanking firm experienced in the valuation of property similar to suchInvestment.

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2.2.                    Number,Gender, Headings, and Periods of Time. Wherever appropriate herein, words used in the singular shall beconsidered to include the plural, and words used in the plural shall beconsidered to include the singular.  Themasculine gender, where appearing in the Program, shall be deemed to includethe feminine gender.  The Sectionheadings herein are included solely for convenience.  If there is any conflict between suchheadings and the text of the Program, the text shall control.  Any reference in the Program to a period ornumber of days, weeks, months, or years shall mean, respectively, calendardays, calendar weeks, calendar months, or calendar years unless expresslyprovided otherwise.

 

# III                               ADMINISTRATION

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3.1.                    Administrationby the Committee.  The Program shallbe administered by the Committee.  TheCommittee may delegate such administrative matters hereunder as it deemsappropriate to officers of the Company.

 

3.2.                    Powersof the Committee.  The Committeeshall supervise the administration and enforcement of the Program according tothe terms and provisions hereof and shall have the sole discretionary authorityand all of the powers necessary to accomplish these purposes.  The Committee shall have all of the powersspecified for it under the Program, including, without

 

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limitation, the power: (a) to select EligibleEmployees to receive Awards; (b) to determine all provisions, conditions, andterms relating to any Award, including, without limitation, determinations asto the Date of Grant, the Base Value, the Market Value, the number of PARssubject to an Award, and any adjustments thereto; (c) from time to time toestablish rules and procedures for the administration of the Program, which arenot inconsistent with the provisions of the Program, and any such rules andprocedures shall be effective as if included in the Program; (d) to construe inits discretion all terms, provisions, conditions, and limitations of theProgram, any Award, and any Award Notice; (e) to correct any defect or to supplyany omission or to reconcile any inconsistency that may appear in the Programor in any Award or Award Notice in such manner and to such extent as theCommittee shall deem appropriate; (f) to make determinations as to whether aDisposition of an Investment has occurred; (g) to make determinations as towhether an Investment is Publicly Traded and/or Liquid; (h) to makedeterminations as to whether an equity holding constitutes a Follow-upInvestment; (i) to make determinations that an equity holding is not anInvestment;  and (i) to make all otherdeterminations necessary or advisable for the administration of theProgram.  If the Committee determinesthat the cost of administration of the Program, or the cost to the Company orits Subsidiaries of administration or oversight of Investments, becomesmaterial, the Committee may take such costs into account in determining BaseValue relating to future Awards.

 

3.3.                    CommitteeDecisions Conclusive; Standard of Care. The Committee shall, in its sole discretion exercised in good faith(which, for purposes of this Section 3.3, shall mean the application ofreasonable business judgment), make all decisions and determinations and takeall actions necessary in connection with the administration of the Program.  All such decisions, determinations, andactions by the Committee shall be final, binding, and conclusive upon allpersons.  The Committee shall not beliable for any decision, determination, or action taken in good faith or uponreliance in good faith on the records of the Company or information presentedto the Committee by the Company’s officers, employees, or other persons(including the Valuation Experts and their employees and representatives) as tomatters the Committee reasonably believes are within such other person’sprofessional or expert competence.  If aParticipant disagrees with any decision, determination, or action made or takenby the Committee, then the dispute will be limited to whether the Committee hassatisfied its duty to make such decision or determination or take such actionin good faith.  To the full extentpermitted by law, no liability whatsoever shall attach to or be incurred by anyofficers or directors, as such, of the Company or any of its Subsidiaries,under or by reason of the Program or the administration thereof.

 

# IV                               PARTICIPATION, AWARDS AND AWARD NOTICES

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4.1.                    Participation.  Each Eligible Employee shall be eligible tobe selected to be a Participant.  Subjectto the provisions of Sections 4.3, 4.4, and 4.5, (a) the granting of Awards toEligible Employees shall be determinations made by and in the discretion of theCommittee and (b) Awards shall be granted by the Committee from time to time,and at such times, as the Committee in its sole discretion may determine.  The Committee may grant any number of Awardsto any one Eligible Employee without regard to the number of Awards granted toany other Eligible Employee.

 

4.2.                    AwardNotices.  The Company shall providean Award Notice to each individual who receives an Award relating to aparticular Investment.  Each Award Noticeevidencing an Award shall specify (a) the Date of Grant of such Award, (b) theInvestment or group of

 

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Investments to which such Award relates, (c) thenumber of Points subject to such Award, (d) the methodology for determining theBase Value of each Phantom Unit subject to such Points, (e) the vestingschedule and/or other requirements pursuant to which the Participant who holdssuch Award shall obtain a vested interest in the Investments subject to the Award(to the extent such schedule or requirements differ from the provisionscontained in Article V) and (f) such other terms and conditions as theCommittee may determine in its sole discretion.

 

4.3.                    Limitationson PARs.  The aggregate number ofPARs that may be subject to Awards granted with respect to a particularInvestment shall not exceed, in the aggregate, 20% of the number of PhantomUnits into which such Investment has been divided.

 

4.4.                    Allocationof PARs.  Up to the aggregate PARsavailable under Section 4.3 may be allocated among Participants by theCommittee based on a number of Points that in the aggregate represent 20% ofsuch Phantom Units, with each Point representing .1% of such PhantomUnits.  For example, an Award of 10Points would represent a grant of PARs on 1% of the total Phantom Units intowhich the Investment was divided (Such an Award would also represent 5% of thePARs available to be granted under the Program with respect to the Investmentor group of Investments).

 

4.5.                    SpecialProvisions Concerning Awards with respect to Follow-up Investments.  If (a) a Participant has received an Awardwith respect to an existing Investment or group of Investments prior to thedate a Follow up Investment with respect to such existing Investment or groupof Investments is acquired by the Company or a Subsidiary, (b) such Participantis either an Eligible Employee or, in the case of a Follow-up Investment madeafter a Change in Control, has a vested interest in such Award as of the dateof such acquisition and (c) such Award has not been canceled pursuant toSection 5.3, then such Participant shall receive an Award with respect to suchFollow-up Investment (a “Follow-up Award”) as of the date the Follow-upInvestment is acquired by the Company or a Subsidiary.  In the case of a Participant who is anEligible Employee at the time such Follow-up Award is made, (i) suchParticipant’s vested interest in such Follow-up Award shall at all times beequal to his or her vested interest in his or her Award relating to theexisting Investment or group of Investments and (ii) the number of PARs subjectto such Follow-up Award shall be no less than an amount that bears the sameratio to the number of Phantom Units into which such Follow-up Investment hasbeen divided as the number of PARs subject to such Participant’s Award relatingto the existing Investment or group of Investments bears to the number ofPhantom Units into which the existing Investment or group of Investments wasdivided.  In the case of a Participantwho is not an Eligible Employee at the time such Follow-up Award is made, suchParticipant shall have no interest in the Follow-up Award; provided that ifsuch Follow-up Award was made after a Change in Control, (A) the Participant’svested interest in such Follow-up Award shall at all times be equal to 100% and(B) the number of PARs subject to such Follow-up Award shall equal (1) suchParticipant’s vested interest in his or her Award relating to the existingInvestment multiplied by (2) an amount that bears the same ratio to the numberof Phantom Units into which such Follow-up Investment has been divided as thenumber of PARs subject to such Participant’s Award relating to the existingInvestment or group of Investments bears to the number of Phantom Units intowhich the existing Investment or group of Investments was divided.  The provisions of this Section 4.5 shallapply separately to each Award held by a Participant with respect to suchexisting Investment or group of Investments.

 

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4.6.                    Adjustmentsto Outstanding Awards.  In the eventof (a) any recapitalization, reorganization, merger, consolidation,combination, split-up, split-off, spin-off, exchange, or other relevant changein capitalization of any company or other entity issuing securitiesconstituting an Investment occurring after the date of the grant of any Awardrelating to such Investment, (b) a capital contribution by the Company or aSubsidiary to any company or entity issuing securities constituting anInvestment occurring after the date of the grant of any Award relating to suchInvestment, (c) the exercise by the Company or a Subsidiary of an option,warrant, or other purchase right constituting an Investment after the date ofthe grant of any Award relating to such Investment, or (d) the occurrence ofany other event which, in the judgment and sole discretion of the Committee,should cause a change in the rights of the Participants with respect to theirAwards under the Program, then the Committee shall make such adjustments underthe Program and to any outstanding Awards with respect to the number of PARssubject to such Awards, the Base Value of the Phantom Units subject to suchPARs, the number of Phantom Units relating to such Investment or any other termor condition applicable to such PARs or Awards (including, without limitation,dividing an Award into two or more Awards) as, in the sole discretion of theCommittee, shall (i) be equitable and appropriate under the circumstances, (ii)be consistent with the intent of the Program, and (iii) preclude an increase inthe compensation payable to a Participant with respect to an Award beyond thatwhich was intended under the Program. Subject to the principles set forth in clauses (i), (ii), and (iii) ofthe preceding sentence, Awards may also be adjusted by the Committee asprovided in other provisions of the Program. Any adjustments made by the Committee pursuant to this Section shall befinal, binding, and conclusive on all parties.

 

# V                                   VESTING OF AWARDS

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5.1.                    Determinationof Vested Interest.  Subject to theprovisions of Section 4.5, a Participant shall become vested in an Investmentsubject to an Award at the rate of 25% for each full one-year period(commencing on the Date of Grant of such Award or, with respect to an Investmentadded to an Award following the Date of Grant, the date such Investment isadded to the Award) that the Participant remains continuously employed by theCompany or a Subsidiary, up to 100%. Further, if a Participant incurs a Termination of Service by reason ofdeath or Disability, then such Participant shall obtain on the date of suchtermination a 100% vested interest in all the Investments then subject tooutstanding Awards held by such Participants. Notwithstanding the preceding provisions of this Section, the Committeemay, in its sole discretion, provide in an Award Notice or in an employmentagreement a different vesting schedule or vesting provisions pursuant to whicha Participant shall become vested in the Investment or Investments subject to hisor her Award(s).

 

5.2.                    Terminationof Service other than for Cause and not by reason of death or Disability.  Except as provided in Section 5.4 and unlessotherwise provided in an Award Notice or a Participant’s employment agreement,as of the date a Participant incurs a Termination of Service other than forCause (and not by reason of death or Disability), (a) such Participant’s vestedinterest in all Investments subject to Awards shall be frozen, (b) the vestedinterest of such Participant in the Investment or Investments subject to his orher Awards shall not increase after such date, and (c) the nonvested PARs(determined as of such date) subject to such Awards shall be surrendered to theCompany and canceled.  Notwithstandingthe preceding provisions of this Section, the Committee may, in its solediscretion, provide in an Award Notice or in an employment agreement adifferent vesting schedule or vesting provisions pursuant to which aParticipant shall become vested in his or her Award(s).

 

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5.3.                    Terminationof Service for Cause.  Upon adetermination by the Committee that a Participant has incurred a Termination ofService for Cause, (a) all outstanding Awards (including the vested PARs andnonvested PARs subject thereto) shall be canceled, effective as of the date ofsuch Termination of Service, (b) no outstanding PARs under Awards held by suchParticipant shall be redeemable, and (c) no amount, including, withoutlimitation, any amount payable under Article VI, shall be paid under theProgram to such Participant from and after the date of such Termination ofService.  Such Participant shallsurrender all outstanding Awards to the Company, and all Awards of suchParticipant shall be canceled.

 

5.4.                    SpecialChange in Control Vesting Provisions. Notwithstanding any other provision of the Plan, in the event of aChange in Control, Investments subject to outstanding Awards shall vest inaccordance with the following:

 

### (a)                             Ifthe Change in Control occurs pursuant to Section 2.1(h)(i) hereof, theParticipant shall become 100% vested in all Investments subject to thenoutstanding Awards held by such Participant immediately upon termination of theParticipant’s employment by the Company other than for Cause or by theParticipant with Good Reason (i) at any time after the occurrence of the Changein Control or (ii) before the occurrence of the Change in Control if suchtermination is in connection with such Change in Control; and

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### (b)                            If theChange in Control occurs pursuant to Section 2.1(h)(ii), (iii) or (iv) hereof,the Participant shall become 100% vested in all Investments subject to thenoutstanding Awards held by such Participant immediately upon the effective dateof such Change in Control.

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5.5.                    AcceleratedVesting.  At any time, and from timeto time, the Committee may in its sole discretion accelerate the vesting of anInvestment subject to an Award such that the Participant who holds such Awardwill have a greater vested interest than such Participant would have otherwisehad pursuant to the preceding provisions of this Article V or the vestingschedule set forth in the Award Notice evidencing such Award or suchParticipant’s employment agreement. Actions by the Committee pursuant to this Section may vary amongParticipants and may vary among the Awards held by an individual Participant.

 

# VI                               AWARD REDEMPTIONS

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## 6.1.                    RedemptionsElected by a Participant.  AParticipant may elect (a “Redemption Election”) by irrevocable written noticeto the Company to cause the Company to redeem as of the date of such notice(the “Redemption Election Date”) all or any portion of such Participant’sunredeemed vested PARs that relate to an Investment that as of the time of theRedemption Election has been determined by the Committee to be Liquid; providedthat, unless otherwise determined by the Committee, a Participant shall not beentitled to make a Redemption Election with respect to an Award prior to thethird anniversary of the Date of Grant of such Award.  Any Redemption Election must specify theAward and the Investment(s) to which such election relates and the number ofsuch Participant’s unredeemed vested PARs under such Award to which suchelection shall apply.  If a Participantmakes a Redemption Election with respect to vested PARs granted pursuant to anAward, then the Company shall allocate to each such vested PAR an amount equal to the excess, if any, of (i) thesum of (A) the Market Value (as of the applicable Redemption Election Date) ofthe Investment subject to such Redemption Election

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## and (B) the Market Value of Investmentssubject to Dispositions or Redemption Elections prior to such date over (ii)the sum of (A) the Base Value (as of such date) of such Award and (B) amountspreviously allocated to such Award as a result of prior Dispositions or RedemptionElections.  For purposes of this Section6.1, the Market Value of the Investment subject to the Redemption Electionshall be determined under (A) Section 2.1(x)(i) if the Company or a Subsidiary,as applicable, makes a Disposition corresponding to a Participant’s RedemptionElection or (B) Section 2.1(x)(ii) if no such Disposition is made.  The amount allocated under this Section 6.1to the vested PARs subject to the Redemption Election shall be paid to theParticipant as soon as administratively practicable, but not later than 30 daysafter the applicable Redemption Election Date, and, in the sole discretion ofthe Company, in either (i) a single lump sum cash payment or (ii) securities ofthe Investment subject to the Redemption Election under this Section 6.1 (basedon the Market Value of such Investment on the Redemption Election Date).  Upon such redemption, the portion of the PARsand of the corresponding Points applicable to such Investment so redeemed shallbe surrendered to the Company, and such redeemed portions shall be canceled,provided that the portion of such PARS and Points applicable to any remainingInvestments shall not be surrendered or cancelled.  If a Participant makes a Redemption Electionwith respect to an Award and the Investment subject to the Redemption Electionhas not been determined by the Committee to be Liquid as of the applicableRedemption Election Date, then such Redemption Election shall be void and of noeffect.

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## 6.2.                    RedemptionUpon Disposition of All or a Portion of an Investment.

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### (a)                             Assoon as administratively feasible after the date of a Disposition, theCommittee shall determine, with respect to each outstanding Award relating tothe Investment subject to such Disposition, the number of PARS (other than PARSto which a Redemption Election is outstanding), if any, outstanding and shallallocate to each such PAR the amount equal to the excess, if any, of (i) thesum of (A) the Market Value (as of the Disposition) of the Investment subjectto such Disposition and (B) the Market Value of Investments subject toDispositions and Redemption Elections prior to such date over (ii) the sum of(A) the Base Value (as of such date) of such Award and (B) amounts previouslyallocated to such Award as a result of prior Dispositions and RedemptionElections.

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### (b)                            Assoon as practicable after such allocation, the Participant shall receive theamount allocated to any of his or her vested PARs; provided, however, that,unless otherwise determined by the Committee, no allocation shall be paid to aParticipant prior to the third anniversary of the Date of Grant.  Unless otherwise provided by the Committee,the remainder of the allocated amount shall be paid out within 30 days afterthe later of (i) the third anniversary of the Date of Grant of the Award and(ii) each date on which the unvested Investments subject to PARs become vested,together with 7% interest (compounded annually) on such additional payment forthe period beginning on the date of the payment pursuant to the preceding sentenceand ending on the date of payment of such additional payment.  Upon payment by the Company with respect to aPAR as provided above, the portion of the PAR and the corresponding Points soredeemed shall be surrendered to the Company and canceled.  All payments under this Section 6.2(b) shallbe made, in the sole discretion of the Company, in either (i) a lump sum cashpayment or (ii) publicly traded securities of the Investment subject to suchDisposition (based on the Market Value of the Investment).

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(c)                             RedemptionUpon Expiration of Investment Period. As soon as administratively feasible after the last day of theInvestment Period relating to an Investment or group of Investments, theCompany shall redeem the outstanding PARs (other than PARS to which aRedemption Election is outstanding) relating to such Investment or group ofInvestments under such Award.  The amountpaid by the Company to a Participant who is entitled to a redemption paymentpursuant to this Section 6.2(c) shall be the Redemption Amount applicable tosuch PARs, determined as of the end of the Investment Period.  A redemption payment provided for in thisSection 6.2(c) shall be paid to the Participant as soon as administrativelypracticable, but not later than 60 days, after the last day of the applicableInvestment Period, in the sole discretion of the Company, in either (i) asingle lump sum cash payment or (ii) publicly traded securities of theInvestment (based on the Market Value on the last day of the Investment Period)subject to such redemption under this Section 6.2(c).

 

6.3.                    Limitationswith respect to Redemption Payments. Notwithstanding any provision herein to the contrary, (a) except asexpressly provided in this Article VI, a Participant shall not have any rightto any payment under the Program and (b) in no event shall a payment be madewith respect to the portion of an Award in which a Participant does not have avested interest.

 

# VII                           TERMINATION, AND AMENDMENT OF PROGRAM

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7.1.                    Inception,Termination and Amendment.  TheProgram shall commence on the Effective Date. The Committee may amend the Program at any time and from time to time,and the Committee may at any time terminate the Program; provided, however,that the Program may not be amended or terminated in a manner that would impair(a) the rights of a Participant with respect to an outstanding Award or (b) theright of a Participant with respect to an existing Investment or group ofInvestments as of the date of such amendment or termination to receive (or the BaseValue of) an Award with respect to a related Follow-up Investment pursuant toSection 4.5, without, in each such case, the consent of such Participant.  The Committee shall remain in existence afterthe termination of the Program for the period determined necessary by theCommittee to facilitate the termination of the Program, and all provisions ofthe Program that are necessary, in the opinion of the Committee, for equitableoperation of the Program during such period shall remain in force.

 

# VIII                       MISCELLANEOUS PROVISIONS

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8.1.                    NoEffect on Employment Relationship or any Employee Benefit Plan.  Nothing in the adoption of the Program, thegrant of Awards, or the payment of amounts under the Program shall confer onany person the right to continued employment by the Company or any Subsidiaryor affect in any way the right of the Company (or a Subsidiary, if applicable)to terminate such employment at any time. Unless otherwise provided in a written employment agreement, theemployment of each Participant shall be on an at-will basis, and the employmentrelationship may be terminated at any time by either the Participant or theParticipant’s employer for any reason whatsoever, with or without cause.  Any amount paid with respect to any Awardconstitutes a cash bonus paid under a long term incentive plan or programadopted by Company and shall be excluded from such Participant’s compensationfor purposes of calculating benefits payable under any employee benefit plan ofthe Company, its Subsidiaries and affiliates.

 

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8.2.                    ProhibitionAgainst Assignment or Encumbrance. No Award, PAR, or other right, title, interest, or benefit hereundershall be assignable or transferable, or liable for, or charged with any of thetorts or obligations of a Participant or any person claiming under aParticipant, or be subject to seizure by any creditor of a Participant or anyperson claiming under a Participant.  NoParticipant or any person claiming under a Participant shall have the power toanticipate or dispose of any Award, PAR, or other right, title, interest, orbenefit hereunder in any manner until the same shall have actually beendistributed free and clear of the terms of the Program.  Payments with respect to an Award shall be payableonly to the Participant (or (a) in the event of a Disability, his or her dulyappointed legal representative and (b) in the event of the death, his or herestate).  The provisions of the Programshall be binding on all successors and assigns of a Participant, includingwithout limitation the estate of such Participant and the executor,administrator or trustee of such estate, or any receiver or trustee inbankruptcy or representative of the Participant’s creditors.

 

8.3.                    Unfunded,Unsecured Program.  The Program shallconstitute an unfunded, unsecured obligation of the Company to make payments ofincentive compensation to certain individuals from its general assets inaccordance with the Program.  Each Awardand PAR granted under the Program merely constitutes a mechanism for measuringsuch incentive compensation and does not constitute a property right orinterest in the Company, any Subsidiary, or any of their assets (including,without limitation, any Investment or any Distribution with respect to anyInvestment).  Neither the establishmentof the Program, the granting of Awards, nor any other action taken inconnection with the Program shall be deemed to (a) create any interest in anInvestment (nor to constitute the direct or indirect sale, transfer,assignment, pledge or other disposition thereof (or of any part thereof) or ofany interest therein), (b) create an escrow or trust fund of any kind, (c)create any fiduciary relationship of the Company or any Subsidiary, or of anyofficer, director, employee or agent thereof, with respect to any Investment orany Participant, or (d) restrict or affect in any way the acquisition, holding,voting, disposition or the taking of any action with respect to any Investmentby the Company or any Subsidiary.

 

8.4.                    TaxWithholding. The Company and the Subsidiaries may withhold, from aParticipant’s payment under the Program, or from any other payment to suchParticipant, an amount necessary to satisfy any and all tax withholdingobligations arising under applicable local, state, federal, or foreign lawsassociated with such payment, including, without limitation, having securitiesotherwise deliverable to a Participant withheld by the Company with a fairmarket value equal to the minimum statutory withholding rate.  The Company and the Subsidiaries may take anyother action as may in their opinion be necessary to satisfy all obligationsfor the payment and withholding of such taxes.

 

8.5.                    GoverningLaw.  The Program shall be construed,enforced, and administered according to the laws of the State of Minnesota,excluding any conflict-of-law rule or principle thereof.

 

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**NORTHWESTAIRLINES CORPORATIONE-COMMERCE INCENTIVE COMPENSATION PROGRAM**

 

**FORM OFAWARD AGREEMENT**

 
| *Participant:* | *Date of Grant:* |
|----------------|------------------|

 

# 1.                        Grant of the Award.  TheCompany hereby grants to the Participant, on the terms and conditionshereinafter set forth, an award of                  (     ) Points (the “Award”).  Each Point represents a PAR on .1% of thePhantom Units relating to the Investments, subject to adjustment as provided inthe Program, listed on Exhibit A.  EachPAR represents the right to receive the excess, if any, of (i) theaggregate Market Value attributable to the Investments relating to a PhantomUnit over (ii) the Base Value of such Phantom Unit.  The Base Value of each Phantom Unit that isthe subject of this Award is                            Dollars ($          ).  This grant is made pursuant to the terms ofthe Northwest Airlines Corporation E-Commerce Incentive Compensation Program(as amended and restated, the “Program”), which Program, as amended from timeto time, is incorporated herein by reference and made a part of thisAgreement.  The Participant acknowledgeshaving received a copy of the Program as so amended and restated with thisAward Notice.  Capitalized terms nototherwise defined herein shall have the same meanings as in the Program.

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# 2.                        Vesting.

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## (a)                   Subjectto the Participant’s continued employment with the Company and itsSubsidiaries, each Investment subject to the Award shall vest as follows

 

 

## (b)                  Ifthe Participant’s employment with the Company and its Subsidiaries terminatesfor any reason, the Award, to the extent not then vested, shall be canceledwithout consideration; provided, however, that if the Participant’semployment is terminated due to death or Disability, the Investments subject tothe Award shall become 100% vested on the date of such termination.  If the Participant’s employment with theCompany and its Subsidiaries terminates for any reason, the Participant’svested interest in all Investments subject to the Award shall be frozen; provided,however, that if the Participant’s employment is terminated by theCompany for Cause, the Participant’s vested interest in all Investments subjectto the Award shall be canceled without consideration.

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## (c)                   Notwithstandingthe foregoing, (i) in the event of a Change in Control pursuant toSection 2.1(h)(i) of the Program, the Investments subject to the Awardshall become 100% vested immediately upon the termination of the Participant’semployment by the Company other than for Cause or by the Participant for GoodReason (A) at any time after the occurrence of the Change in Control or(B) before the occurrence of the Change in Control if such termination isin connection with such Change in Control and (ii) in the event of aChange in Control pursuant to Section 2.1(h)(ii), (iii) or (iv) of theProgram, the Investments subject to the Award shall become 100% vestedimmediately upon the effective date of such Change in Control.

 

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3.                        AwardRedemptions.                 [NotwithstandingSections 6.1 and 6.2 of the Program, the Committee determined in connectionwith the grant of this Award that (i) a Participant may receive, in accordancewith the provisions of the Program, the amount allocated to any of his or hervested PARs related to this Award at the time of such allocation, even if suchallocation occurs prior to the third anniversary of the Date of Grant of thisAward, and (ii) a Participant shall be entitled, in accordance with theprovisions of the Program, to a Redemption Notice with respect to this Awardprior to the third anniversary of the Date of Grant of this Award.]  All Award redemptions with respect to thisAward and any prior Awards granted to the Participant shall be paid to theParticipant, at the option of the Company, in accordance with the provisions ofSections 6.1, 6.2(b) or 6.2(c), as applicable.

 

# 4.                     No Right to Continued Employment.  Neitherthe Program nor this Agreement shall be construed as giving the Participant theright to be retained in the employ of the Company or any Subsidiary.  Further, the Company or an Subsidiary may atany time dismiss the Participant free from any liability or any claim under theProgram or this Agreement, except as otherwise expressly provided herein.

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# 5.                     Transferability.  Payments with respect to theAward shall be payable only to the Participant during the Participant’slifetime and may not be assigned, alienated, pledged, attached, sold orotherwise transferred or encumbered by the Participant otherwise than by willor by the laws of descent and distribution, and any such purported assignment,alienation, pledge, attachment, sale, transfer or encumbrance shall be void andunenforceable against the Company or any Subsidiary.

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# 6.                     Unfunded, Unsecured Award.  The Awardshall constitute an unfunded, unsecured obligation of the Company to makepayments of incentive compensation to the Participant from its general assetsin accordance with the Program.  TheAward merely constitutes a mechanism for measuring such incentive compensationand does not constitute a property right or interest in the Company, anySubsidiary, or any of their assets (including, without limitation, anyInvestment or any Distribution with respect to any Investment).

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# 7.                        Withholding.  The Company and the Subsidiariesmay withhold, from a Participant’s payment under the Award, or from any otherpayment to such Participant, an amount necessary to satisfy any and all taxwithholding obligations arising under applicable local, state, federal, orforeign laws associated with such payment. The Company and the Subsidiaries may take any other action as may intheir opinion be necessary to satisfy all obligations for the payment andwithholding of such taxes.

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# 8.                         Notices.  Any notice necessary under this Agreementshall be addressed to the Company in care of its Secretary at:

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# Northwest Airlines Corporation

# 2700 Lone Oak Parkway

# Eagan, Minnesota  55121-1534

# Attn: Secretary

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and to theParticipant at the address appearing in the personnel records of the Companyfor the Participant or to either party at such other address as either partyhereto may hereafter designate

 

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in writing tothe other.  Any such notice shall bedeemed effective upon receipt thereof by the addressee.

 

# 9.                         Choice of Law.  **THE INTERPRETATION, PERFORMANCE AND ENFORCEMENT OF THIS AGREEMENT SHALLBE GOVERNED BY THE LAWS OF THE STATE OF MINNESOTA, EXCLUDING ANYCONFLICT-OF-LAW RULE OR PRINCIPLE THEREOF.**

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# 10.                   Award Subject to Program.  Byentering into this Agreement, the Participant agrees and acknowledges that theParticipant has received and read a copy of the Program.  The Award is subject to the Program.  In the event of a conflict between any termor provision contained herein and a term or provision of the Program, theapplicable terms and provisions of the Program will govern and prevail.

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# 11.                   Signature in Counterparts.  ThisAgreement may be signed in counterparts, each of which shall be an original,with the same effect as if the signatures thereto and hereto were upon the sameinstrument.

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IN WITNESS WHEREOF, the parties hereto have executedthis Agreement.

 
|   | NORTHWEST AIRLINES CORPORATION |
|--------|--------------------------------|
|   |                           |
|   | By:                            |   |   |
|   | Name:                          |
|   | Title:                         |
|   |                           |
|   | PARTICIPANT                    |
|   |                           |
|   | By:                            |   |   |

 

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