**Exhibit 10.3**

 

**NORTHWEST AIRLINES CORPORATION**

**              STOCKINCENTIVE PLAN**

** **

**Acknowledgment**

**of**

**Phantom Stock Unit Award**

 

                Northwest AirlinesCorporation (the “Company”) hereby acknowledges the grant to the participantnamed below (the “Participant”) pursuant to the Northwest Airlines Corporation                 StockIncentive Plan (the “Plan”) of a phantom stock unit award (the “Award”) for thenumber of phantom stock units (“Units”) set forth below. The Award is subjectto all of the provisions of the Plan and the terms and conditions set forth onthe other side of this Acknowledgment.

 
| **Participant Information:**                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
|-----------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
| Participant:                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
| Participant’s Address:                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
|                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
| Participant’s Employee No.:                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
| Participant’s SSN:                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
|                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
| **Phantom Stock Unit Award:**                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
|                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
| Date of Grant:                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
|                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
| Number of Phantom Stock Units Subject to the Award: |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
|                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
| Vesting Schedule:                                   | Units vest as follows:                                                           so long as the Participant remains an active full-time employee of Northwest Airlines,  Inc. (“Northwest”) on the applicable Vesting Dates. See paragraph 4 of the  Terms and Conditions set forth on the reverse side of this Acknowledgement. |

 

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

** **

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**NORTHWEST AIRLINES CORPORATION**

**            STOCKINCENTIVE PLAN**

**Terms and Conditions**

** **

1.               *Incorporation of the Plan*. The Phantom Stock Unit Award is granted pursuant to and subject to allof the provisions of the Northwest Airlines Corporation        Stock Incentive Plan (the “Plan”) which are incorporated herein byreference.  The Award is also subject tothe terms and conditions set forth herein and to all rules, regulations andinterpretations promulgated by the Company pursuant to the Plan.

 

2.               *Definitions*.

                      “Common Stock” means the common stock, par value $.01per share, of the Company.

 

                        “Disability” means a cessation ofemployment under circumstances where the Participant is eligible to receive amonthly disability benefit pursuant to the long-term group disability insuranceprogram sponsored by Northwest, or would be eligible to receive such a benefitif he/she was a participant in said program.

 

                        “Fair Market Value” means, with respectto a share of Common Stock, the average closing sale prices of the Common Stockas reported on the NASDAQ National Market during the ten (10) day periodpreceding the applicable Vesting Date.

 

                        “Payment Date” means, with respect toUnits that vest on any Vesting Date pursuant to the terms hereof, a datedetermined by the Company which shall be no later than ninety (90) daysfollowing the applicable Vesting Date.

 

                        “Unit” means a phantom stock unit, whichrepresents, when vested, the right to receive a payment in cash on theapplicable Payment Date equal to the Fair Market Value of a share of CommonStock.

 

                        “Vesting Date(s)” shall mean                                            .

 

3.               *Phantom Stock Unit Award*. Effective as of the date of grant shown on the front side of thisAcknowledgment (the “Grant Date”), the Company awarded to the Participant thenumber of Units set forth on the front side of this Acknowledgment upon theterms and conditions set forth herein.

 

4.               *Vesting*. The rights of the Participant with respect to the Units remainforfeitable at all times prior to the date(s) on which such Units become vestedin accordance with this paragraph 4. The Units will vest as follows:                                                                                               solong as the Participant remains an active full-time employee of Northwest onthe applicable Vesting Date(s).

 

                        If the Participant’s employmentterminates prior to any Vesting Date as a result of the Participant’s death or

                        Disability, the Participant will becomevested on the effective date of such termination in a pro rata number of Unitsdetermined by multiplying the number of Units that would otherwise have vestedon the next Vesting Date by a fraction, the numerator of which is the number ofdays in the current vesting period up to and including the effective date of suchtermination and the denominator of which is the total number of days in thecurrent vesting period. All remaining Units and all Units applicable to anyfuture vesting period will be canceled immediately upon such termination ofemployment and the Participant will automatically forfeit any rights to anyunvested Units as of the date of such termination.  If the Participant’s employment terminatesfor any reason other than as a result of the Participant’s death or Disability,all unvested Units will be canceled immediately and the Participant willforfeit any rights to such Units as of the date of such termination.

 

5.               *Payment of Units*. On each Payment Date, the Company will pay to the Participant an amountin cash equal to the Fair Market Value of all Units that have vested for theimmediately preceding vesting period in accordance with paragraph 4 above, lessthe total amount of any taxes or other deductions that Northwest may berequired to withhold by any federal, state or local government.

 

6.               *No Payment of Dividends orDividend Equivalents*.  The Participant will not beentitled to receive dividends or dividend equivalents with respect to theUnits.

 

7.               *Non-transferable**.*  Units may notbe sold, transferred, pledged, assigned or otherwise alienated or hypothecated(each a “Transfer”) other than by will or by the laws of descent anddistribution and shall not be subject to execution, attachment or similarprocess. Any attempted Transfer of Units contrary to the provisions hereofshall be null and void and without effect.

 

8.               *Termination of Employment*. The Company shall determine the effect of all matters and questionsrelating to terminations of employment, including without limitation allquestions of whether particular leaves of absence or alternative workarrangements involving a diminution of work hours constitute a termination ofemployment.

 

9.               *No Employment or StockholderRights*.  Nothing herein shall confer upon theParticipant any right to continue in the employ of Northwest or interfere inany way with the right of Northwest to terminate the employment of theParticipant at any time.  The Participantshall not have any rights of a stockholder of the Company with respect to theUnits.

 

10.         *Unfunded Status*. All payments under this Program are made from the general assets ofNorthwest.  All Awards under this Programare unfunded, unsecured, general contractual obligations of Northwest.  The Program does not create any lien on, orsecurity in, any property of Northwest or its subsidiaries.

 

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