Common use of Incentive Compensation Programs Clause in Contracts

Incentive Compensation Programs. During the term of Executive’s employment hereunder: (a) Executive shall be entitled to receive from the Company, within ten (10) days after the date of this Agreement, a lump-sum cash payment in the amount of $240,000, less all applicable withholding taxes (the “Sign-on Bonus”); provided that, in the event Executive’s employment with the Company terminates on or before the third (3rd) anniversary of the Effective Date, Executive shall re-pay to the Company within three (3) business days after the effective date of such termination a portion of the Sign-on Bonus in an amount equal to $240,000 multiplied by the Proration Fraction, and the Company shall have the right to offset any amount required to be repaid by Executive pursuant to this Section 2.2(a) against any other amounts payable to the Executive at the time of such termination of employment. (b) Executive shall be entitled to participate in the Company’s Key Employee Annual Cash Incentive Plan (the “KEACIP”) or any successor annual bonus plan beginning with the 2005 plan year, the terms and conditions of which shall be established from time to time by the Compensation Committee. For the 2005 plan year, Executive’s target incentive percentage shall be 60% of Executive’s Base Salary. (c) Executive shall be entitled to participate in the Company’s Long-Term Cash Incentive Plan beginning with the two year performance period commencing January 1, 2005, the terms and conditions of which shall be established from time to time by the Compensation Committee. (d) Executive shall be entitled to receive a restricted stock award for 75,000 shares of common stock of Northwest Airlines Corporation, par value $.01 per share (the “Common Stock”), such restricted stock to vest in six equal installments of 12,500 shares each on each six month anniversary of the date of grant until fully vested on the third anniversary of the date of grant so long as Executive remains an active full-time employee of the Company on such dates, the terms and conditions of which award shall be set forth in a written agreement or other documentation which shall be provided to Executive by the Company’s Secretary.

Incentive Compensation Programs. During the term of Executive’s employment hereunder: (a) Executive shall be entitled to receive from the Company, within ten (10) days after the date of this Agreement, a lump-sum cash payment in the amount of $240,000200,000, less all applicable withholding taxes (the “Sign-on BonusInducement Payment”); provided that, in the event Executive’s employment with the Company terminates on or before the third first (3rd1st) anniversary of the Effective Date, other than a termination by the Company without Cause or by Executive for Good Reason, Executive shall re-pay the full amount of the Inducement Payment to the Company within three (3) business days after the effective date Date of such termination a portion of the Sign-on Bonus in an amount equal to $240,000 multiplied by the Proration FractionTermination, and the Company shall have the right to offset any amount required to be repaid by Executive pursuant to this Section 2.2(a) against any other amounts payable to the Executive at the time of such termination of employment. (b) Executive shall be entitled to receive from the Company five cash payments of $100,000 each, less all applicable withholding taxes (the “Cash Retention Payments”), on May 1 of 2006, 2007, 2008, 2009 and 2010, so long as Executive remains an active full-time employee of the Company on the applicable payment date. (c) Executive shall be entitled to participate in the Company’s Key Employee Annual Cash Incentive Plan (the “KEACIP”) or any successor annual bonus incentive plan beginning with the 2005 plan year, the terms and conditions of which shall be established from time to time by the Compensation Committee. For the 2005 plan year, Executive’s Executive shall receive a target incentive percentage shall be payment equal to 60% of Executive’s Base SalarySalary (without reduction for the portion of 2005 that occurs prior to the Effective Date)so long as Executive remains an active full-time employee of the Company on the date the 2005 KEACIP is paid; provided, however, that (i) at the election of the Compensation Committee, Executive’s KEACIP payments may be payable in the form of a stock or phantom stock award with a vesting period of not less than six (6) months; and (ii) any KEACIP payments payable to Executive shall be subject to the provisions of the Bridge Agreement dated as of November 22, 2004 between the Company and the Air Line Pilots Association, International (the “Pilot Bridge Agreement”). (cd) Executive shall be entitled to participate in the Company’s Long-Term Cash Incentive Plan beginning with the two year performance period commencing January 1, 2005, the terms and conditions of which shall be established from time to time by the Compensation Committee. Any payments under the Long-Term Cash Incentive Plan shall be subject to the provisions of the Pilot Bridge Agreement. (de) Executive shall be entitled to receive on the Effective Date pursuant to the Company’s 2001 Stock Incentive Plan a restricted non-qualified stock option award for 75,000 with respect to 150,000 shares of common stock of Northwest Airlines Corporation, par value $.01 per share (the “Common Stock”), such restricted stock option to vest have an exercise price equal to the fair market value of a share of Common Stock on the Effective Date and become exercisable in six four equal installments of 12,500 shares each on each six month anniversary the first, second, third and fourth anniversaries of the date of grant until fully vested on the third anniversary of the date of grant Effective Date so long as Executive remains an active full-time employee of the Company on such dates, the terms and conditions of which award shall be set forth in a written agreement or other documentation which shall be provided to Executive by the Company’s Secretary. (f) Executive shall be entitled to receive on the Effective Date pursuant to the Company’s 1999 Stock Incentive Plan (i) a phantom stock award with respect to 100,000 shares of Common Stock, which award shall vest in six (6) installments consisting of five (5) equal installments of 16,666 shares each on each of the first five (5) six-month anniversaries of the date of grant and one (1) installment of 16,670 on the third anniversary of the date of grant so long as Executive remains an active full-time employee of the Company on such dates, and (ii) a phantom stock award with respect to 75,000 shares of Common Stock, which award shall vest in full on the fifth anniversary of the Effective Date so long as Executive remains an active full-time employee of the Company on such date. The terms and conditions of each phantom stock unit award granted pursuant to this Section 2.2(f) shall be set forth in a written agreement or other documentation which shall be provided to Executive by the Company’s Secretary. (g) All shares of Common Stock issued to Executive pursuant to the awards set forth in this Section 2.2 shall be covered by an effective registration statement filed by the Company with the Securities and Exchange Commission, provided that at the time of such issuance the Company remains a reporting company under the Securities Exchange Act of 1934, as amended, and is otherwise eligible to register such shares on a registration statement on Form S-8 (or a successor form).