8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):  October 29, 2008

DELTA AIR LINES, INC.

(Exact name of registrant as specified in its charter)

Delaware	001-05424	58-0218548
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

P.O. Box 20706, Atlanta, Georgia  30320-6001

(Address of principal executive offices)

Registrant’s telephone number, including area code:  (404) 715-2600

Registrant’s Web site address:    www.delta.com

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.01 Completion of Acquisition or Disposition of Assets

On October 29, 2008, Nautilus Merger Corporation (“Merger Sub”), a wholly owned subsidiary of Delta Air Lines, Inc. (“Delta”), merged with and into Northwest Airlines Corporation (“Northwest”) (the “Merger”) in accordance with the Agreement and Plan of Merger, dated as of April 14, 2008, among Delta, Merger Sub and Northwest (the “Merger Agreement”).  As a result of the Merger, Northwest and Northwest Airlines, Inc. became wholly-owned subsidiaries of Delta.

Pursuant to the terms of the Merger Agreement, each outstanding share of Northwest common stock (including those shares issuable pursuant to Northwest’s plan of reorganization under Chapter 11) was converted into and became exchangeable for 1.25 shares of Delta common stock and cash in lieu of any fractional shares.  Delta issued approximately 339 million shares of Delta common stock either to former holders of Northwest common stock or to be held for issuance pursuant to Northwest’s plan of reorganization under Chapter 11.  Based on the closing price of $7.99 per share of Delta common stock on the New York Stock Exchange on October 29, 2008, the last trading day before the closing of the Merger, the aggregate value of the consideration paid in connection with the Merger to former holders of Northwest common stock or to be held for issuance pursuant to Northwest’s plan of reorganization under Chapter 11 was approximately $2.7 billion.

Upon the closing of the Merger, Northwest became a wholly owned subsidiary of Delta and the shares of Northwest common stock, which traded under the symbol “NWA”, have ceased trading on, and are being delisted from, the New York Stock Exchange.

The description of the Merger contained in this Item 2.01 does not purport to be complete and is qualified in its entirety by reference to the Merger Agreement, which is incorporated by reference as Exhibit 2.1 to this Current Report on Form 8-K and is incorporated herein by reference.

Item 5.02  Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

Board of Directors

Effective on the closing of the Merger, the Delta board of directors increased its size from 11 members to 13 members.  Also effective upon the closing of the Merger, Richard K. Goeltz, Victor L. Lund and Walter E. Massey resigned from the Delta board of directors; and Roy J. Bostock, John M. Engler, Mickey P. Foret, Rodney E. Slater, and Douglas M. Steenland, each of whom previously served as a director of Northwest, were elected to the board of directors of Delta.  Compensation paid by Northwest to these former Northwest directors is described in the filings of Northwest with the Securities and Exchange Commission.

All of these actions were taken pursuant to the terms of the Merger Agreement, which required that, upon the closing of the Merger, the board of directors of Delta be made up of thirteen members, consisting of (1) seven members of the Delta board of directors (including Daniel A. Carp, the current chairman of the board of directors of Delta, who will continue to serve as the non-executive chairman of the board of directors, and Richard H. Anderson, the current chief executive officer of Delta), (2) five members of the Northwest board of directors (including Mr. Bostock, who served as chairman of the Northwest board of directors prior to the closing of the Merger and who will serve as a non-executive vice chairman of the Delta board of directors, and Mr. Steenland, who served as chief executive officer of Northwest prior to the closing of the Merger) and (3) one representative designated by the Delta Master Executive Council, the governing body of the Delta unit of the Air Line Pilots Association, International.  The Delta MEC has designated Kenneth C. Rogers, a Delta pilot, to serve on the Delta board of directors.

Richard H. Anderson, Daniel S. Carp, John S. Brinzo, Eugene I. Davis, David R. Goode, Paula Rosput Reynolds, Kenneth C. Rogers, and Kenneth B. Woodrow will continue as members of the Delta board of directors.

The following directors will serve as members of the Audit Committee of the Delta board of directors:  John S. Brinzo, Chair; Roy J. Bostock; John M. Engler; Paula Rosput Reynolds; and Rodney E. Slater.

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The following directors will serve as members of the Corporate Governance Committee of the Delta board of directors: Daniel A. Carp, Chair; Roy J. Bostock; Eugene I. Davis; John M. Engler; Paula Rosput Reynolds; and Rodney E. Slater.

The following directors will serve as members of the Finance Committee of the Delta board of directors: Kenneth B. Woodrow, Chair; Eugene I. Davis; Mickey P. Foret; David R. Goode; Kenneth C. Rogers; and Douglas M. Steenland.

The following directors will serve as members of the Personnel & Compensation Committee of the Delta board of directors: David R. Goode, Chair; John S. Brinzo; Mickey P. Foret; and Kenneth B. Woodrow.

Appointment of Chief Operating Officer and Chief Financial Officer

On October 29, 2008, Delta’s board of directors elected Stephen E. Gorman as Delta’s Executive Vice President and Chief Operating Officer, and Hank Halter as Delta’s Senior Vice President and Chief Financial Officer, both effective on the closing of the Merger.  Edward H. Bastian, who has served as Delta’s President and Chief Financial Officer since August 2007, continues to serve as Delta’s President and has become Chief Executive Officer of its Northwest Airlines subsidiary.

Mr. Gorman joined Delta in December 2007 as Executive Vice President—Operations.  Prior to joining Delta, Mr. Gorman served as President and Chief Executive Officer of Greyhound Lines Inc. from June 2003 to October 2007.  Prior to that time, he served as President, North America and Executive Vice President Operations Support at Krispy Kreme Doughnuts, Inc. from August 2001 to June 2003.  Mr. Gorman also served as Executive Vice President, Technical Operations and Flight Operations of Northwest from February 2001 to August 2001, Senior Vice President, Technical Operations of Northwest from January 1999 to February 2001, and Vice President, Engine Maintenance Operations of Northwest from 1996 to January 1999.

Prior to be becoming Senior Vice President and Chief Financial Officer, Mr. Halter served as Delta’s Senior Vice President and Controller, a position he has held since May 2005.  Mr. Halter previously served as Delta’s Vice President and Controller from March 2005 to May 2005 and Vice President and Assistant Controller from January 2002 to March 2005  Mr. Halter joined Delta in 1998 as  Director-Financial Planning from American Airlines where he held various finance positions in corporate reporting, financial planning, and corporate real estate.  Prior to his tenure with American Airlines, Mr. Halter was a senior accountant in the Philadelphia office of Ernst & Young LLP.

Mr. Gorman will be paid an annual base salary of $450,000 and Mr. Halter will be paid an annual base salary of $360,000.  Both will continue to participate in Delta’s annual and long-term incentive plans for management employees.  Mr. Gorman and Mr. Halter will also continue to participate in Delta’s broad-based employee retirement and welfare plans, as well as perquisite programs available to senior executives.

Merger Equity Awards

As has been previously disclosed, Delta’s Board of Directors and stockholders have approved the issuance of equity to substantially all employees of the combined company in connection with the Merger.  Just under 10% of Delta’s outstanding equity capitalization on a fully-diluted basis will be delivered to substantially all of Delta’s and Northwest’s U.S. based employees in the form of unrestricted common stock, which can be held or sold immediately.  International employees will receive cash awards instead of stock due to the complexities associated with stock in many foreign jurisdictions.  Approximately 600 to 700 leaders of Delta will receive restricted shares of common stock and/or non-qualified stock options instead of the awards described above.  The leadership grants will take approximately three years to fully vest and, unlike the unrestricted stock provided to most employees, recipients of the leadership grants cannot realize immediate value from their awards. The determination of Delta’s outstanding equity capitalization on a fully-diluted basis gives effect to the shares of common stock issued to the stockholders of Northwest in the merger and to the equity grants made to employees as described above.

The specific terms of the leadership grants are set forth in the Delta Air Lines, Inc. Merger Award Program (the “MAP”), which was adopted on October 29, 2008 by  the Personnel & Compensation Committee of the Delta board of directors.  The MAP is an equity-based long-term incentive program for leadership employees of Delta and its subsidiaries, including Northwest and its subsidiaries.  The MAP is intended to retain leadership employees following the Merger and to align their interests with Delta’s other employees and stakeholders.

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All awards made to officers under the MAP, will be in the form of restricted stock and stock options that will vest or become exercisable, as the case may be, over a three year period, though participants risk forfeiture of those awards under certain circumstances.  To the extent these awards are not forfeited, they will vest with respect to 20% of the shares on each of May 1, 2009, November 1, 2009 and May 1, 2010 and with respect to the remaining 40% of the shares on November 1, 2011.  All vesting and forfeiture provisions are detailed in the MAP.

The MAP was adopted under the Delta Air Lines, Inc. 2007 Performance Compensation Plan (the “2007 Performance Plan”) and is subject to the terms of the 2007 Performance Plan.  The 2007 Performance Plan was filed as Exhibit 10.1 to Delta’s Form 8-K filed on March 22, 2007.  A copy of the MAP is filed as Exhibit 10.1 hereto and the form of award agreement for officers is filed as Exhibit 10.2 hereto.

Item 8.01 Other Events.

On October 29, 2008, Delta issued a press release announcing the closing of the Merger.  A copy of the press release is attached hereto as Exhibit 99.1.

Item 9.01 Financial Statements and Exhibits.

(a) Financial Statements of Businesses Acquired

The audited consolidated balance sheets of Northwest as of December 31, 2007 and December 31, 2006 and the consolidated statements of operations, consolidated statements of cash flows and consolidated statements of common stockholders’ equity (deficit) of Northwest for each of the three years in the period ended December 31, 2007, and the notes related thereto, are incorporated by reference and attached as Exhibit 99.2 hereto.

The Report of Independent Registered Public Accounting Firm, issued by Ernst & Young LLP, dated February 28, 2008, relating to Northwest’s financial statements, is hereby incorporated by reference and attached as Exhibit 99.3 hereto.

The unaudited condensed consolidated balance sheets of Northwest as of September 30, 2008 and the condensed consolidated statements of operations and condensed consolidated statements of cash flows of Northwest for the period ended September 30, 2008, and the notes related thereto, are incorporated by reference and attached as Exhibit 99.4 hereto.

(b) Pro Forma Financial Information.

Delta intends to file pro forma financial information under cover of Form 8-K/A not later than 71 calendar days after the date that this Report is required to be filed.

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(d) Exhibits.

Exhibit 2.1	Agreement and Plan of Merger, dated as of April 14, 2008, among Delta Air Lines, Inc., Nautilus Merger Corporation and Northwest Airlines Corporation (incorporated by reference to Exhibit 2.1 to Delta's Current Report on Form 8-K filed on April 18, 2008)
Exhibit 10.1	Delta Air Lines, Inc. Merger Award Program

Exhibit 10.2 Form of Delta Air Lines, Inc. Merger Award Program Award Agreement (Officers)

Exhibit 23.1 Consent of Ernst & Young, Independent Registered Public Accounting Firm for Northwest Airlines Corporation

Exhibit 99.1 Press Release dated October 29, 2008 titled “Delta and Northwest Merge, Creating Premier Global Airline”

Exhibit 99.2 Audited consolidated balance sheets of Northwest Airlines Corporation as of December 31, 2007 and December 31, 2006 and the consolidated statements of operations, consolidated statements of cash flows and consolidated statements of common stockholders’ equity (deficit) of Northwest Airlines Corporation for each of the three years in the period ended December 31, 2007, and the notes related thereto

Exhibit 99.3 Report of Independent Registered Public Accounting Firm, issued by Ernst & Young LLP dated February 28, 2008, relating to the Northwest Airlines financial statements

Exhibit 99.4 Unaudited condensed consolidated balance sheets of Northwest Airlines Corporation as of September 30, 2008 and the condensed consolidated statements of operations and condensed consolidated statements of cash flows of Northwest Airlines Corporation of Northwest Airlines Corporation for the period ended September 30, 2008, and the notes related thereto

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SIGNATURES

          Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	DELTA AIR LINES, INC.
	By:  /s/ Edward H. Bastian
Date:  October 31, 2008	Edward H. Bastian         President

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EXHIBIT INDEX

Exhibit Number		Description
	Exhibit 2.1	Agreement and Plan of Merger, dated as of April 14, 2008, among Delta Air Lines, Inc., Nautilus Merger Corporation and Northwest Airlines Corporation (incorporated by reference to Exhibit 2.1 to Delta's Current Report on Form 8-K filed on April 18, 2008)
	Exhibit 10.1	Delta Air Lines, Inc. Merger Award Program
	Exhibit 10.2	Form of Delta Air Lines, Inc. Merger Award Program Award Agreement (Officers)
	Exhibit 23.1	Consent of Ernst & Young, Independent Registered Public Accounting Firm for Northwest Airlines Corporation
	Exhibit 99.1	Press Release dated October 29, 2008 titled “Delta and Northwest Merge, Creating Premier Global Airline”
	Exhibit 99.2	Audited consolidated balance sheets of Northwest Airlines Corporation as of December 31, 2007 and December 31, 2006 and the consolidated statements of operations, consolidated statements of cash flows and consolidated statements of common stockholders’ equity (deficit) of Northwest Airlines Corporation for each of the three years in the period ended December 31, 2007, and the notes related thereto
	Exhibit 99.3	Report of Independent Registered Public Accounting Firm, issued by Ernst & Young LLP dated February 28, 2008, relating to the Northwest Airlines financial statements
	Exhibit 99.4	Unaudited condensed consolidated balance sheets of Northwest Airlines Corporation as of September 30, 2008 and the condensed consolidated statements of operations and condensed consolidated statements of cash flows of Northwest Airlines Corporation of Northwest Airlines Corporation for the period ended September 30, 2008, and the notes related thereto

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EX-10.1

Exhibit 10.1

DELTA AIR LINES, INC. MERGER AWARD PROGRAM

1.           Purpose.The Merger Award Program (the “MAP”) is an equity-based long-term incentive program sponsored by Delta Air Lines, Inc. (“Delta” or the “Company”) for key employees of Delta, Northwest Airlines Corporation (“Northwest”) and their respective subsidiaries.  The MAP is intended (a) to retain key employees following the merger of a subsidiary of Delta with and into Northwest (the “Merger”); and (b) to align their interests with Delta’s and Northwest’s other employees and stakeholders.

The MAP is being adopted under the Delta Air Lines, Inc. 2007 Performance Compensation Plan (the “2007 Performance Plan”).  It is subject to the terms of the 2007 Performance Plan and a Participant’s MAP Award Agreement (“Award Agreement”).

Capitalized terms that are used but not defined in the MAP shall have the meaning ascribed to them in the 2007 Performance Plan.  For purposes of the MAP, the definitions of  “Change in Control,”“Good Reason,” and “Retirement”as set forth in the 2007 Performance Plan are hereby replaced or modified under Section 5 below, and shall apply as set forth in Section 5 in lieu of the definitions of these terms in the 2007 Performance Plan or as modified, as applicable.

The MAP shall become effective at the closing of the Merger.  Prior to such closing, no Awards may be granted under the MAP.

2.           Individual Award Agreements.  Any person offered an Award under the MAP may be required to sign an individual Award Agreement which includes the terms of the Award.  Execution by such person of his or her Award Agreement will be a prerequisite to the effectiveness of the Award under the MAP and to the person’s becoming a Participant in the MAP.

3.           Awards.

(a)           Restricted Stock.

(i)           Award Grant.  A Participant may receive Restricted Stock as specified in the Participant’s Award Agreement (the “Restricted Stock”).

(ii)         Grant Date. The Grant Date of the Restricted Stock will be determined by the Committee and set forth in a Participant’s Award Agreement.

(iii)        Restrictions.Until the restrictions imposed by this Section 3(a) (the “Restrictions”) have lapsed pursuant to Section 3(a)(iv) or (v) below, a Participant will not be permitted to sell, exchange, assign, transfer, pledge or otherwise dispose of the Restricted Stock and the Restricted Stock will be subject to forfeiture as set forth below.

(iv)        Lapse of Restrictions—Continued Employment. Subject to the terms of the 2007 Performance Plan and the MAP, the Restrictions shall lapse and be of no further force or effect at the following times with respect to the following percentages of Shares included in any Award of Restricted Stock under the MAP:

20% on May 1, 2009 (“First Installment Date”);

20% on November 1, 2009 (“Second Installment Date”);

20% on May 1, 2010 (“Third Installment Date”); and

40% on November 1, 2011 (“Fourth Installment Date”).1

(v)         Lapse of Restrictions/Forfeiture upon Termination of Employment.   The Restricted Stock and the Restrictions set forth in this Section 3(a) are subject to the following terms and conditions:

(A)          Without Cause or For Good Reason.  Upon a Participant’s Termination of Employment by the Company without Cause or by the Participant for Good Reason  (including the Termination of Employment of the Participant if he is employed by an Affiliate at the time the Company sells or otherwise divests itself of such Affiliate), the Restrictions shall immediately lapse and be of no further force or effect as of the date of such Termination of Employment.

(B)           Voluntary Resignation.  Upon a Participant’s Termination of Employment by reason of a voluntary resignation (other than for Good Reason or Retirement), any portion of the Restricted Stock subject to the Restrictions shall be immediately forfeited.

(C)           Retirement.  Subject to Section 3(a)(v)(F) below, upon a Participant’s Termination of Employment by reason of Retirement, with respect to any portion of the Restricted Stock subject to the Restrictions, the Restrictions shall immediately lapse on the Pro Rata RS Portion as of the date of such Termination of Employment.  Upon a Participant’s Termination of Employment by reason of Retirement, any Restricted Stock that remains subject to the Restrictions, other than the Pro Rata RS Portion, shall be immediately forfeited.

“Pro Rata RS Portion” means, with respect to any portion of the Restricted Stock that is subject to the Restrictions at the time of a Participant’s Termination of Employment by reason of Retirement, the number of Shares with respect to which the Restrictions would have lapsed on each respective future Installment Date multiplied by a fraction:

(i)   the numerator of which is the number of calendar months2 from the Grant Date to the date of such Termination of Employment, rounded up for any partial month; and

1  If this formula results in any fractional Share allocation to any Installment Date, the number of Shares with respect to which the Restrictions lapse on the earlier Installment Date(s) will be rounded up, and the number of shares with respect to which the Restrictions lapse on the later Installment Date(s) will be rounded down, to the nearest whole Share to the extent necessary so that only full Shares are covered by each Installment Date.  For example, if 1,222 Shares are included in an award of Restricted Stock, the Restrictions will lapse with respect to (a) 245 Shares on the First and Second Installment Dates; (b) 244 Shares on the Third Installment Date; and (c) 488 Shares on the Fourth Installment Date.

2 For purposes of the MAP, one calendar month is calculated from the date of measurement to the same or closest numerical date occurring during the following month.  For example, one calendar month from January 31, 2009 will elapse as of February 28, 2009, two months will elapse on March 31, 2009, and so on.

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(ii) the denominator of which is the number of calendar months from the Grant Date to each applicable Installment Date, rounded up for any partial month.3

(D)          Death or Disability.  Upon a Participant’s Termination of Employment due to death or Disability, the Restrictions shall immediately lapse and be of no further force or effect as of the date of such Termination of Employment.

(E)          For Cause.  Upon a Participant’s Termination of Employment by the Company for Cause, any portion of the Restricted Stock subject to the Restrictions shall be immediately forfeited.

(F)          Retirement-Eligible Participants Who Incur a Termination of Employment for Other Reasons.  If a Participant who is eligible for Retirement is, or would be, terminated by the Company without Cause, such Participant shall be considered to have been terminated by the Company without Cause for purposes of the MAP rather than having retired, but only if the Participant acknowledges that, absent Retirement, the Participant would have been terminated by the Company without Cause.  If, however, the employment of a Participant who is eligible for Retirement is terminated by the Company for Cause, then regardless of whether the Participant is considered as a retiree for purposes of any other program, plan or policy of the Company, for purposes of the MAP, the Participant’s employment shall be considered to have been terminated by the Company for Cause.

(vi)           Dividends.  In the event a cash dividend shall be paid in respect of Shares at a time the Restrictions on the Restricted Stock have not lapsed, the Participant shall receive the dividend.  The Restrictions shall not apply to any such dividend.

(b)           Stock Option.

(i)          Award Grant.  A Participant may receive a Non-Qualified Stock Option covering the number of Shares specified in the Participant’s Award Agreement (the “Option”).

(ii)         Grant Date. The Grant Date of the Option will be determined by the Committee and set forth in a Participant’s Award Agreement.

3For example, assume a Participant received 1,000 Shares of Restricted Stock on December 1, 2008and retires on April 15, 2009 (the “Retirement Date”).  In these circumstances, the number of calendar months from (a) the Grant Date to the Retirement Date is 5; and (b) the Grant Date to the First, Second, Third and Fourth Installment Dates is 5, 11, 17, and 35, respectively.  As a result, the Restrictions will lapse on the Participant’s Retirement Date as follows:

●  200 Shares × 5/5 = 200

●  200 Shares × 5/11 = 91

●  200 Shares × 5/17 = 59

●  400 Shares × 5/35 = 58

Total:   408 Shares

If this formula results in any fractional Share, the Pro Rata RS Portion will be rounded up to the nearest whole Share.  Accordingly, in this example, the Restrictions will lapse on 408 Shares on the Retirement Date.  The remaining 592 Shares will be forfeited on the Retirement Date.

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(iii)        Exercise Price. The exercise price of the Option is the closing price of a Share on the New York Stock Exchange on the Grant Date.

(iv)        Exercise Period. Subject to the terms of the 2007 Performance Plan and the MAP, the Option (a) shall become exercisable with respect to 20% of the Shares on each of the First, Second and Third Installment Dates and with respect to 40% of the Shares on the Fourth Installment Date,4 and (b) shall be exercisable through and including the day immediately preceding the tenth anniversary of the Grant Date (“Expiration Date”).

(v)         Change in Exercisability and Exercise Period upon Termination of Employment.  The exercisability of the Option and the exercise period set forth in Section 3(b)(iv) above is subject to the following terms and conditions:

(A)          Without Cause or For Good Reason.  Upon a Participant’s Termination of Employment by the Company without Cause or by the Participant for Good Reason (including the Termination of Employment of the Participant if he is employed by an Affiliate at the time the Company sells or otherwise divests itself of such Affiliate), any portion of the Option that is not exercisable at the time of such Termination of Employment shall become exercisable, and the entire then exercisable portion of the Option shall be exercisable, during the period:  (i) beginning on the date of such Termination of Employment; and (ii) ending on the earlier of (x) the third anniversary of such termination date or (y) the Expiration Date.

(B)           Voluntary Resignation. Upon a Participant’s Termination of Employment by reason of a voluntary resignation (other than for Good Reason or Retirement):  (i) any portion of the Option that is not exercisable at the time of such Termination of Employment shall be immediately forfeited; and (ii) any portion of the Option that is exercisable at the time of such Termination of Employment shall remain exercisable until the earlier of (x) 90 days after such Termination of Employment or (y) the Expiration Date.

(C)           Retirement.  Subject to Section 3(b)(v)(F) below, upon a Participant’s Termination of Employment by reason of Retirement, the Pro Rata Option Portion of any portion of the Option that is not exercisable at the time of such Termination of Employment shall become exercisable, and the entire then exercisable portion of the Option shall be exercisable, during the period:  (i) beginning on the date of such Termination of Employment; and (ii) ending on the earlier of (x) the third anniversary of such termination date or (y) the Expiration Date.  Upon a Participant’s Termination of Employment by reason of Retirement, any portion of the Option that is not exercisable at the time of such Termination of Employment, other than the Pro Rata Option Portion, shall be immediately forfeited.

“Pro Rata Option Portion” means, with respect to any portion of the Option that is not exercisable at the time of a Participant’s Termination of Employment by reason of Retirement, the number of Shares that would have become exercisable on each respective future Installment Date multiplied by a fraction:

4  If this formula results in any fractional Share allocation to any Installment Date, the number of Shares that become exercisable will be adjusted in the same manner as described in footnote 1 above so that only full Shares are covered by each Installment Date.

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(i)  the numerator of which is the number of calendar months5 from the Grant Date to the date of such Termination of Employment, rounded up for any partial months, and

(ii) the denominator of which is the number of calendar months from the Grant Date to each applicable Installment Date, rounded up for any partial month.6

(D)           Death or Disability.  Upon a Participant’s Termination of Employment due to death or Disability, any portion of the Option that is not exercisable at the time of such Termination of Employment shall become exercisable, and the entire then exercisable portion of the Option shall be exercisable, during the period:  (i) beginning on the date of such Termination of Employment; and (ii) ending on the earlier of (x) the third anniversary of such termination date or (y) the Expiration Date.

(E)           For Cause.  Upon a Participant’s Termination of Employment by the Company for Cause, any unexercised portion of the Option shall be immediately forfeited, including any portion that was then exercisable.

(F)           Retirement-Eligible Participants Who Incur a Termination of Employment for Other Reasons.  If a Participant who is eligible for Retirement is, or would be, terminated by the Company without Cause, such Participant shall be considered to have been terminated by the Company without Cause for purposes of the MAP rather than having retired, but only if the Participant acknowledges that, absent Retirement, the Participant would have been terminated by the Company without Cause.  If, however, the employment of a Participant who is eligible for Retirement is terminated by the Company for Cause, then regardless of whether the Participant is considered as a retiree for purposes of any other program, plan or policy of the Company, for purposes of the MAP, the Participant’s employment shall be considered to have been terminated by the Company for Cause.

 

5 For purposes of the MAP, one calendar month is calculated as described in footnote 2 above.

6For example, assume a Participant received an Option exercisable for 1,000 Shares on December 1, 2008and retires on April 15, 2009 (the “Retirement Date”).  In these circumstances, the number of calendar months from (a) the Grant Date to the Retirement Date is 5; and (b) the Grant Date to the First, Second, Third and Fourth Installment Dates is 5, 11, 17, and 35, respectively.  As a result, the Option will become exercisable on the Participant’s Retirement Date as follows:

●  200 Shares × 5/5 = 200

●  200 Shares × 5/11 = 91

●  200 Shares × 5/17 = 59

●  400 Shares × 5/35 = 58

Total:   408 Shares

If this formula results in any fractional Share, the Pro Rata Option Portion will be rounded up to the nearest whole Share.   Accordingly, in this example, the Option will become exercisable with respect to 408 Shares on the Retirement Date.  The remaining portion of the Option (592 Shares) will be forfeited on the Retirement Date.

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4.            Gross-Up for Certain Taxes.

(a)           Gross-Up Payments.  In the event that a Participant becomes entitled to benefits under the MAP, the Company shall pay to the Participant an additional lump sum payment (the “Gross-Up Payment”), in cash, equal to the amounts, if any, described below:

(i)           Subject to sub-section (ii) below, if any portion of any payment under the MAP, when taken together with any payment under any other agreement with or plan of the Company (in the aggregate “Total Payments”) would be subject to the excise tax imposed by Section 4999 of the Code or any interest or penalties with respect to such excise tax (such excise tax, together with any such interest and penalties, are collectively referred to as the “Excise Tax”), then the Participant shall be entitled under this sub-section to an additional amount such that after payment by the Participant of all such Participant’s applicable federal, state and local taxes, including any Excise Tax, imposed upon such additional amount, the Participant will retain an amount sufficient to pay the Excise Tax imposed on the Total Payments (provided that the Gross-Up Payment to be made under this provision and any other similar gross up payment made under any  similar Excise Tax reimbursement provision included in any other agreement  with, or plan of, the Company shall not, when taken as an aggregate, exceed the Gross-Up Payment).

(ii)           Notwithstanding the provisions of sub-section (i) above, if it shall be determined that the Participant would be entitled to a Gross-Up Payment, but that the Total Payments would not be subject to the Excise Tax if the Total Payments were reduced by an amount that is less than 10% of the portion of the Total Payments that would be treated as “parachute payments” under Section 280G of the Code, then the amounts payable to the Participant shall be reduced (but not below zero) to the maximum amount that could be paid to Participant without giving rise to the Excise Tax (the “Safe Harbor Cap”), and no Gross-Up Payment shall be made to the Participant.  The reduction of the Total Payments due hereunder, if applicable, shall be made in such a manner as to maximize the economic present value of all payments actually made to the Participant, determined by the Accounting Firm (as defined in Section 4(b) below) as of the date of the Change in Control using the discount rate required by Section 280G(d)(4) of the Code.

The amounts payable under this Section 4(a) shall be paid by the Company within ten (10) business days after the receipt of the Accounting Firm’s determination, and in no event later than the end of the Participant’s tax year next following the year in which the Excise Tax and any related taxes are paid to the applicable taxing authority.

(b)           Determinations.  In the event of a Change in Control, all determinations required to be made under Section 4(a) above, including the amount of the Gross-Up Payment, whether a payment is required under Section 4(a) above, and the assumptions to be used in determining the Gross-Up Payment, shall be made by the nationally recognized accounting firm generally used by the Company as its financial auditor (the “Accounting Firm”) which shall provide detailed supporting calculations both to the Company and the Participant within twenty (20) business days of the receipt of notice from the Participant that there has been an event giving rise to the right to benefits under Section 4(a) above, or such earlier time as is requested by the Company.  In the event that the Accounting Firm is serving as accountant or auditor for a person effecting the Change in Control or is otherwise unavailable, the Participant may appoint another nationally recognized accounting firm to make the determinations required hereunder (which accounting firm shall then be referred to as the Accounting Firm hereunder).  All fees and expenses of the Accounting Firm shall be borne solely by the Company.

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(c)           Subsequent Redeterminations.  Unless requested otherwise by the Company, the Participant must use reasonable efforts to contest in good faith any subsequent determination by the Internal Revenue Service that the Participant owes an amount of Excise Tax greater than the amount previously determined under Section 4(a)(i); provided, however, that the Participant shall be entitled to reimbursement by the Company of all fees and expenses reasonably incurred by the Participant in contesting such determination.  Such reimbursement of expenses shall be made on a current basis, as incurred, and in no event later than the end of the Participant’s tax year next following the year in which the taxes that are the subject of the audit or proceeding are remitted to the applicable taxing authority, or where as a result of such audit or proceeding no taxes are remitted, the end of the Participant’s tax year next following the year in which the audit is completed or there is a final and nonappealable settlement or other resolution of the proceeding.  In the event the Internal Revenue Service or any court of competent jurisdiction determines that the Participant owes an amount of Excise Tax that is either greater or less than the amount previously taken into account and paid under Section 4(a), the Company shall promptly pay to the Participant, or the Participant shall promptly repay to the Company, as the case may be, the amount of such excess or shortfall.  In the case of any payment that the Company is required to make to the Participant pursuant to the preceding sentence (a “Later Payment”), the Company shall also pay to the Participant an additional amount such that after payment by the Participant of all the Participant’s applicable federal, state and local taxes on such additional amount, the Participant will retain an amount sufficient to pay the total of the Participant’s applicable federal, state and local taxes arising due to the Later Payment.  In the case of any repayment of Excise Tax that the Participant is required to make to the Company pursuant to the second sentence of this Section 4(c), the Participant shall also repay to the Company the amount of any additional payment received by the Participant from the Company in respect of applicable federal, state and local taxes on such repaid Excise Tax, to the extent the Participant is entitled to a refund of (or has not yet paid) such federal, state or local taxes. Any payments from one party to the other under this Section 4(c) shall be made promptly, but in no event later than December 31 of the year after the year in which the excess or shortfall is determined to exist.

5.           Definitions.   For purposes of the MAP, the following definitions are hereby modified as set forth below and will apply in lieu of the definitions set forth in the 2007 Performance Plan or as modified, as applicable.

(a) For purposes of the MAP, “Change in Control” shall have the meaning set forth in the 2007 Performance Plan except that the Merger will not be considered a Change in Control.

(b) For purposes of the MAP, “Good Reason” shall have the meaning set forth in the 2007 Performance Plan except:  (i) any Award made to a Participant under the MAP, (ii) any other equity-based awards or other incentive compensation awards made to a Participant by any of Delta (or any Affiliate) or Northwest (or any subsidiary) at or prior to the closing of the Merger and (iii) any retention payment or special travel benefits provided to a Participant as a result of his or her initial employment with Delta or any Affiliate, will be ignored for purposes of determining whether a Participant has suffered a reduction that constitutes Good Reason under the MAP.  Furthermore, with respect to any Participant who was employed by Northwest or any subsidiary thereof immediately prior to the closing of the Merger, all compensation and benefit programs provided to such Participant prior to the Merger by Northwest or any subsidiary thereof, including, without limitation, the Participant’s base salary, will be ignored for purposes of determining whether a Participant has suffered a reduction that constitutes Good Reason under the MAP.

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(c) For purposes of the MAP, “Retirement” means a Termination of Employment (other than for Cause or death) either:  (i) on or after a Participant’s 62nd birthday provided that such Participant has completed at least 5 years service with the Company (or an Affiliate) or Northwest (or a subsidiary); or (ii) on or after a Participant’s 52nd birthday provided that such Participant has completed at least 10 years service with the Company (or an Affiliate) or Northwest (or a subsidiary).

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EX-10.2

Exhibitt 10.2

DELTA AIR LINES, INC. MERGER AWARD PROGRAM

AWARD AGREEMENT

Date of this Agreement:  

Grant Date:  

[Name]

This Award Agreement (the “Agreement”) describes some of the terms of your award (the “Award”) under the Delta Air Lines, Inc. Merger Award Program (which is subject to the Delta Air Lines, Inc. 2007 Performance Compensation Plan) (the “MAP”).  Your Award is subject to the terms of the MAP and this Agreement.  Capitalized terms that are used but not otherwise defined in this Agreement have the meaning set forth in the MAP.  In order for this Award to remain effective, you must accept the Award in accordance with Section 9 on or before the date that is 30 calendar days after the date of this Agreement (the “Acceptance Date”).  If you do not accept the Award as required, the Award and this Agreement will become void and of no further effect as of 5:00 pm Eastern Time on the Acceptance Date.

1.            Summary of Award.  Your Award will include Restricted Stock and a Non-Qualified Stock Option (“Stock Option”) as described below.  Terms applicable to your Award, including the lapsing of the Restrictions on your Restricted Stock, the exercisability of your Stock Option and the forfeitability of your Award, are included in the MAP.

(a)           Restricted Stock.  You are hereby awarded, on the Grant Date above (the “Grant Date”),  Restricted Stock for [NUMBER] shares of Delta Common Stock, par value $0.0001 per share (“Common Stock”).

(b)           Non-Qualified Stock Option.  You are hereby awarded, on the Grant Date, a Stock Option exercisable for [NUMBER] shares of Common Stock.  The exercise price of the Stock Option will be the closing price of a share of Common Stock on the NYSE on the Grant Date.

2.            Restrictive Covenants.In exchange for the Award, you hereby agree as follows:

(a)           Trade Secrets.  You hereby acknowledge that during the term of your employment with Delta Air Lines, Inc., its subsidiaries and affiliates (“Delta”), you have acquired and will continue to acquire knowledge of secret, confidential and proprietary information regarding Delta and its business that fits within the definition of “trade secrets” under the law of the State of Georgia, including, without limitation, information regarding Delta’s present and future operations, its financial operations, marketing plans and strategies, alliance agreements and relationships, its compensation and incentive programs for employees, and the business methods used by Delta and its employees, and other information which derives economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use, and is the subject of efforts that are reasonable under the circumstances to maintain its secrecy (each, a “Trade Secret”).  You hereby agree that for so long as such information remains a Trade Secret as defined by Georgia law, you will hold in a fiduciary capacity for the benefit of Delta and shall not directly or indirectly make use of, on your own behalf or on behalf of others, any Trade Secret, or transmit, reveal or disclose any Trade Secret to any person, concern or entity.  Nothing in this Agreement is intended, or shall be construed, to limit the protections of any applicable law protecting trade secrets.

(b)           Confidential or Proprietary Information.  You further agree that you will hold in a fiduciary capacity for the benefit of Delta, and, during the term of your employment with Delta and for the two year period after such employment terminates, shall not directly or indirectly use or disclose, any Confidential or Proprietary Information, as defined hereinafter, that you acquire (whether or not developed or compiled by you and whether or not you were authorized to have access to such Confidential or Proprietary Information) during the term of, in the course of, or as a result of your employment by Delta.  Subject to the provisions set forth below, the term “Confidential or Proprietary Information” as used in this Agreement means the following secret, confidential and proprietary information of Delta not otherwise included in the definition of Trade Secret:  all marketing, alliance, advertising and sales plans and strategies; all pricing information; all financial, advertising and product development plans and strategies; all compensation and incentive programs for employees; all alliance agreements, plans and processes; all plans, strategies, and agreements related to the sale of assets; all third party provider agreements, relationships, and strategies; all business methods and processes used by Delta and its employees; all personally identifiable information regarding Delta employees, contractors, and applicants; and all lists of actual or potential customers or suppliers maintained by Delta.  The term “Confidential or Proprietary Information” does not include information that has become generally available to the public by the act of one who has the right to disclose such information.  Nothing in this Agreement is intended, or shall be construed, to limit the protections of any applicable law protecting confidential or proprietary information.

(c)           Employee Non-Solicitation Agreement.  During the term of your employment with Delta and during the one-year period following the termination of such employment, you will not directly or indirectly (on your own behalf or on behalf of any other person, company, partnership, corporation or other entity), employ or solicit for employment any individual who is a management or professionalemployee of Delta for employment with any entity or person other than Delta or solicit, encourage or induce any such person to terminate their employment with Delta.  The restrictions set forth in this Section shall be limited to those Delta management or professional employees who: (i) were employed by Delta during your employment in a supervisory or administrative job; and (ii) with whom you had material professional contact during your employment with Delta.

(d)           Non-Competition Agreement.  You acknowledge that Delta competes in a worldwide passenger air travel market, and Delta’s business plan is increasingly international in scope.  You also acknowledge that although Delta’s business plan focuses on international air travel as a critical component, Delta will continue to provide primarily domestic air travel service.  You acknowledge that the airlines listed below are particular competitors to Delta in the domestic or international market, and employment or consulting with any of the listed carriers would create more harm to Delta than relative to your possible employment or consulting with other air passenger carriers or air cargo carriers.  You agree that the restrictions placed on you under this paragraph will not prevent you from earning a livelihood, given the large number of worldwide and domestic passenger and cargo air carriers not included in the list below.  During the term of your employment with Delta and for the one-year period following the termination of such employment, you will not on your own behalf or on behalf of any person, firm, partnership, association, corporation or business organization, entity or enterprise, provide the same or substantially similar services, as an employee, consultant, partner, or in any other capacity, to any of the following entities, which you hereby acknowledge are all competitors of Delta:  AMR Corporation, American Airlines, Inc., Continental Airlines, Inc., Southwest Airlines Co., UAL Corporation, United Air Lines, Inc., US Airways Group, Inc., US Airways, Inc., JetBlue Airways Corporation, AirTran Holdings, Inc., or AirTran Airways, Inc. (individually and collectively, the “Competitor”).  This restriction shall only apply to the extent that you may not provide services to the Competitor:  (a) while working within a fifty (50) mile radius of the city limits of Atlanta, Georgia; or (b) while working out of or within a fifty (50) mile radius of the corporate headquarters or a major hub operation of the Competitor.

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(e)           Return of Property.  You hereby agree that all property belonging to Delta, including records, files, memoranda, reports, personnel information (including benefit files, training records, customer lists, operating procedure manuals, safety manuals, financial statements, price lists and the like), relating to the business of Delta, with which you come in contact in the course of your employment (hereinafter “Delta’s Materials”) shall, as between the parties hereto, remain the sole property of Delta.  You hereby warrant that you shall promptly return all originals and copies of Delta’s Materials to Delta at the time your employment terminates.

(f)           Cooperation.You hereby agree that you shall, both during and after your employment with Delta, to the extent requested in writing and reasonable under the circumstances, cooperate with and serve in any capacity requested by Delta in any pending or future litigation in which Delta has an interest, and regarding which you, by virtue of your employment with Delta, have knowledge or information relevant to the litigation.

3.           Dispute Resolution.

(a)           Arbitration.  You hereby agree that except as expressly set forth below, all disputes and any claims arising out of or under or relating to the Award or this Agreement, including without limitation any dispute or controversy as to the validity, interpretation, construction, application, performance, breach or enforcement of this Agreement, shall be submitted for, and settled by, mandatory, final and binding arbitration in accordance with the Commercial Arbitration Rules then prevailing of the American Arbitration Association.  Unless an alternative locale is otherwise agreed in writing by the parties to this Agreement, the arbitration shall be conducted in the City of Wilmington, Delaware.  The arbitrator will apply Delaware law to the merits of any dispute or claim without reference to rules of conflicts of law.  Any award rendered by the arbitrator shall provide the full remedies available to the parties under the applicable law and shall be final and binding on each of the parties hereto and their heirs, executors, administrators, successors and assigns and judgment may be entered thereon in any court having jurisdiction.  You hereby consent to the personal jurisdiction of the state and federal courts in the State of Delaware, with venue in Wilmington, for any action or proceeding arising from or relating to any arbitration under this Agreement.  The prevailing party in any such arbitration shall be entitled to an award by the arbitrator of all reasonable attorneys’ fees and expenses incurred in connection with the arbitration.  However, Delta will pay all fees associated with the American Arbitration Association and the arbitrator.  All parties must initial here for this Section 3 to be effective:

[NAME]

 Mike Campbell—Executive Vice President—HR, Labor & Communications Delta Air Lines, Inc.

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(b)           Injunctive Relief in Aid of Arbitration; Forum Selection.  You hereby acknowledge and agree that the provisions contained in Section 2 of this Agreement are reasonably necessary to protect the legitimate business interests of Delta, and that any breach of any of these provisions will result in immediate and irreparable injury to Delta for which monetary damages will not be an adequate remedy.  You further acknowledge that if any such provision is breached or threatened to be breached, Delta will be entitled to seek a temporary restraining order, preliminary injunction or other equitable relief in aid of arbitration in any court of competent jurisdiction without the necessity of posting a bond, restraining you from continuing to commit any violation of the covenants, and you hereby irrevocably consent to the jurisdiction of the state and federal courts of the State of Delaware, with venue in Wilmington, which shall have jurisdiction to hear and determine any claim for a temporary restraining order, preliminary injunction or other equitable relief brought against you by Delta in aid of arbitration.

(c)           Consequences of Breach.Furthermore, you acknowledge that, in partial consideration for the Award described in the MAP and this Agreement, Delta is requiring that you agree to and comply with the terms of Section 2 and you hereby agree that without limiting any of the foregoing, should you violate any of the covenants included in Section 2 above, you will not be entitled to and shall not receive any Awardsunder the MAP and this Agreement and any outstanding Awards will be forfeited.

           (d)           Tolling.  You further agree that in the event the enforceability of any of the restrictions as set forth in Section 2 of this Agreement are challenged and you are not preliminarily or otherwise enjoined from breaching such restriction(s) pending a final determination of the issues, then, if an arbitrator finds that the challenged restriction(s) is enforceable, the time period set forth in such Section shall be deemed tolled upon the filing of the arbitration or action seeking injunctive or other equitable relief in aid of arbitration, whichever is first in time, until the dispute is finally resolved and all periods of appeal have expired.

(e)          Governing Law.  Unless governed by federal law, this Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to principles of conflicts of laws of that State.

(f)           Waiver of Jury Trial.  TO THE MAXIMUM EXTENT PERMITTED BY LAW, YOU HEREBY KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVE THE RIGHT TO A TRIAL BY JURY IN CONNECTION WITH ANY MATTER ARISING OUT OF, UNDER, IN CONNECTION WITH, OR IN ANY WAY RELATED TO THIS AGREEMENT.  THIS INCLUDES, WITHOUT LIMITATION, ANY DISPUTE CONCERNING ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENT (WHETHER VERBAL OR WRITTEN), OR ACTION OF DELTA OR YOU, OR ANY EXERCISE BY DELTA OR YOU OF OUR RESPECTIVE RIGHTS UNDER THIS AGREEMENT OR IN ANY WAY RELATING TO THIS AGREEMENT.  YOU FURTHER ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL INDUCEMENT FOR DELTA TO ISSUE AND ACCEPT THIS AGREEMENT.

4.           Validity; Severability.  In the event that one or more of the provisions contained in this Agreement shall for any reason be held invalid, illegal, or unenforceable in any respect, such holding shall not affect any other provisions in this Agreement, but this Agreement shall be construed as if such invalid, illegal, or unenforceable provisions had never been contained herein.  The invalidity, illegality or unenforceability of any provision or provisions of this Agreement will not affect the validity or enforceability of any other provision of this Agreement, which will remain in full force and effect.

5.           Authority of the Committee.  You acknowledge and agree that the Committee has the sole and complete authority and discretion to construe and interpret the terms of the MAP and this Agreement.  All determinations of the Committee shall be final and binding for all purposes and upon all persons, including, without limitation, you and Delta, and your heirs and successors.  The Committee shall be under no obligation to construe this Agreement or treat the Award in a manner consistent with the treatment provided with respect to other Awards or Participants.

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6.           Amendment. This Agreement may not be amended or modified except by written agreement signed by you and Delta.

7.           Acknowledgement.  By signing this Agreement:  (a) you acknowledge that you have had a full and adequate opportunity to read this Agreement and you agree with every term and provision herein, including without limitation, the terms of Sections 2, 3, 4, and 5; (b) you acknowledge that you have received and had a full and adequate opportunity to read the MAP; (c) you agree, on behalf of yourself and on behalf of any designated beneficiary and your heirs, executors, administrators and personal representatives, to all of the terms and conditions contained in this Agreement and the MAP; and (d) you consent to receive all material regarding any awards under the MAP, including any prospectuses, electronically with an e-mail notification to your work e-mail address.

8.           Entire Agreement.  This Agreement, together with the MAP (the terms of which are made a part of this Agreement and are incorporated into this Agreement by reference), constitute the entire agreement between you and Delta with respect to the Award.

9.           Acceptance of this Award.  If you agree to all of the terms of this Agreement and would like to accept this Award, you must sign and date the Agreement where indicated below and return an original signed version of this Agreement to Mary Steele, either by hand or by mail to Department 936, P.O. Box 20706, Atlanta, Georgia 30320, as set forth on page 1 of this Agreement.  If you have any questions regarding how to accept your Award, please contact Ms. Steele at (404) 715-6333.  Delta hereby acknowledges and agrees that its legal obligation to make the Award to you shall become effective when you sign this Agreement.

You and Delta, each intending to be bound legally, agree to the matters set forth above by signing this Agreement, all as of the date set forth below.

DELTA AIR LINES, INC.
By:
	Name: Title:

PARTICIPANT

[NAME]

Date:

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EX-23.1

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

We consent to the use in this Form 8-K of Delta Air Lines, Inc. and to incorporation by reference in Delta Air Lines, Inc.’s Registration Statement Nos. 333-142424, 333-149308, and 333-154818 on Forms S-8 of our report dated February 28, 2008, with respect to the consolidated financial statements of Northwest Airlines Corporation included in this Current Report on Form 8-K, filed with the Securities and Exchange Commission on October 31, 2008.

/s/ Ernst & Young LLP

Minneapolis, Minnesota

October 29, 2008

EX-99.1

Exhibit 99.1

 

FOR IMMEDIATE DISTRIBUTION

CONTACT: Corporate Communications 404-715-2554

Delta and Northwest Merge, Creating Premier Global Airline

Customers can expect ‘business as usual’ with no immediate changes in operations

ATLANTA, Oct. 29, 2008 – Delta Air Lines, Inc. (NYSE: DAL) and Northwest Airlines, Inc. today merged, creating a premier global airline with service to nearly all of the world’s major travel markets.

The new airline, called Delta and headquartered in Atlanta, will begin its first day as a combined company with a commitment to delivering excellent service to customers in 66 countries and more than 375 worldwide cities – more than any other airline; with a dedicated base of approximately 75,000 worldwide employees; and with a best-in-class cost structure and strong liquidity balance that better positions the company to adapt to the weakening global economy.

“The airline industry faces a very difficult economic environment around the world and this merger gives Delta increased flexibility to adapt to the economic challenges ahead,” said Delta CEO Richard Anderson.  “With much of the work to bring our airlines together well under way, the new Delta will be at the front of the pack in achieving the benefits of consolidation and is well positioned to navigate the tough waters ahead in a difficult economy.”

With the completion of the merger, Northwest Airlines is now a wholly owned subsidiary of Delta.  Customers should continue to check-in and do business directly with the airline operating their flight just as they did before the merger. Delta will continue operation of the airlines’ separate Web sites, www.delta.com and www.nwa.com, as well as the two airlines’ reservations systems and loyalty programs.

The companies will be integrated through a thoughtful process with customer benefits rolled out over the next 12-24 months, including:

·   The addition of Delta’s code to nearly all of the Northwest system by the end of 2008, creating thousands of additional connecting opportunities.

·   Immediate complimentary upgrade reciprocity for elite members of both airlines’ loyalty programs, with airport lounge reciprocity continuing as usual.

·   The launch of a fully consolidated worldwide flight schedule in advance of summer 2009;

·   The introduction of elements of Delta’s brand throughout the Northwest system beginning in spring 2009, including Delta’s popular Richard Tyler designer uniforms, Delta’s livery, “signature cocktails,” enhanced in-flight entertainment and other onboard amenities.

·   The consolidation of the Delta and Northwest loyalty programs, ultimately including the ability to combine miles from SkyMiles and WorldPerks accounts at a one-to-one ratio.

·   The full integration of Delta and Northwest Web sites, kiosks, and customer-facing technology to ensure a consistent worldwide travel experience.

Delta has already invested significant resources to ensure a seamless transition for customers, including receiving clearance from the Federal Aviation Administration (FAA) of the airline’s plan to achieve a Single Operating Certificate over the next 14-16 months; adding extra staffing and technology at check-in counters and kiosks to provide added customer assistance beginning today; and posting complete merger information at www.delta.com and www.nwa.com to provide customers added assistance.

Employees share in success of combined company with equity stake, platform for future growth

As a result of the merger, employees will share in the success of the new company through an expanded ownership share in the combined company.  In the coming days, Delta will distribute an equity stake to substantially all U.S.-based employees with international employees participating through cash payments in lieu of stock.

"Ensuring our employees are able to share in the benefits of the merger from the beginning is a prime example of the Delta Difference," Anderson said. "By sharing ownership with Delta’s people, we are not only recognizing the critical role employees will play in successfully integrating two customer-focused companies, we are also making good on a longstanding commitment that our employees will share in the success of the company."

Delta also has completed other key steps to ensure that employees benefit from the merger and are protected as the two companies’ workforces are combined.  Specifically, Delta:

·   Completed an unprecedented agreement with the Delta and Northwest units of the Air Line Pilots Association, Intl. (ALPA) on a joint contract that unifies both pilot groups under one pilot working agreement effective tomorrow.  Additionally, the two pilot groups have agreed to a collaborative process that will achieve a combined seniority list;

·   Committed that no frontline employees will be involuntarily furloughed as a result of the merger and that no hubs will be closed; and

·   Implemented a seniority protection policy that ensures that frontline employees of both airlines will be provided seniority protection through a fair-and-equitable process.

Financial footing strengthened, providing increased flexibility to adapt to challenging global economic conditions

The closing of the Delta-Northwest merger brings together two of the industry’s most financially secure airlines to produce a best-in-class cost structure and an industry-leading balance sheet.  The transaction is expected to generate $2 billion or more in annual revenue and cost synergies from more effective aircraft utilization, a more comprehensive and diversified route system, and cost synergies from reduced overhead and improved operational efficiency. The company expects to incur one-time cash costs not exceeding $600 million to integrate the two airlines.

As approved by both companies’ stockholders earlier this year, Northwest stockholders will receive 1.25 Delta shares for each Northwest share they own.  Based on Delta’s closing stock price on Oct. 29, 2008, this exchange ratio is the equivalent of $9.99 per Northwest common share.

“In today’s economic climate, this merger makes even more sense because we can capture $2 billion in annual synergies and build the foundation for profitable growth through improved revenues, a best-in-class cost structure and a strong liquidity position,” said Edward Bastian, Delta’s president and chief financial officer, and the new CEO and president of NWA. “As we have proven, this is a different type of merger for the industry thanks to the complementary nature of the two airlines and the caliber of the people who will make this the most successful merger in airline history,” Bastian continued.

Delta closed the merger after receiving notice from the United States Department of Justice (DOJ) that it would not challenge the merger after reviewing its competitive impact. Earlier this year, the merger also received clearance from the European Commission.

Delta today also announced the members of its new Board of Directors, effective immediately.  Delta Chairman of the Board Daniel Carp remains chairman while Northwest Chairman Roy Bostock becomes vice chairman.  Other directors will include seven from Delta’s Board – Richard Anderson, John S. Brinzo, Eugene I. Davis, David R. Goode, Paula Rosput Reynolds, Kenneth C. Rogers, and Kenneth B. Woodrow, and four from Northwest’s Board – John M. Engler, Mickey P. Foret, Rodney E. Slater and former Northwest CEO Douglas Steenland.  Delta had previously announced the structure of its new Board during the merger announcement last spring.

About Delta Air Lines

With its acquisition of Northwest Airlines, Delta Air Lines is now the world’s largest airline.  From its hubs in Atlanta, Cincinnati, Detroit, Memphis, Minneapolis-St. Paul, New York-JFK, Salt Lake City and Tokyo-Narita, Delta and its Northwest subsidiary offer service to more than 375 destinations worldwide in 66 countries and serve more than 170 million passengers each year.  Delta’s marketing alliances allow customers to earn and redeem either SkyMiles or WorldPerks on more than 16,000 daily flights offered by SkyTeam and other partners. Delta and its 75,000 worldwide employees are reshaping the aviation industry as the only U.S. airline to offer a full global network.  More information about the new Delta is available online at news.delta.com.

B-Roll Information and Satellite Coordinates

B-roll footage with sound bites from Richard Anderson and Ed Bastian and Delta and Northwest operations will be available via satellite. To access the B-roll feed via satellite, use the coordinates below.

Wednesday, Oct. 29, 2008

Feed time: 6-8 p.m. EDT

Coordinates:

DownLink:  11886.5000 V

Satellite/TR: HORIZONS 2 15K 74.05 degrees West

Symbol Rate: 6.1113

FEC: 3/4

Digital Info: 8.45

Thursday, Oct. 30, 2008

Feed time: 6-7 a.m. EDT

Coordinates:

DownLink:  11886.5000 V

Satellite/TR: HORIZONS 2 15K 74.05 degrees West

Symbol Rate: 6.1113

FEC: 3/4

Digital Info: 8.45

Forward-looking statements

Statements in this news release that are not historical facts, including statements regarding our estimates, expectations, beliefs, intentions, projections or strategies for the future, may be “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995.  All forward-looking statements involve a number of risks and uncertainties that could cause actual results to differ materially from the estimates, expectations, beliefs, intentions, projections and strategies reflected in or suggested by the forward-looking statements.  These risks and uncertainties include, but are not limited to, the cost of aircraft fuel; the impact that our indebtedness will have on our financial and operating activities and our ability to incur additional debt; the restrictions that financial covenants in our financing agreements will have on our financial and business operations; labor issues; interruptions or disruptions in service at one of our hub airports; our increasing dependence on technology in our operations; our ability to retain management and key employees; the ability of our credit card processors to take significant holdbacks in certain circumstances; the effects of terrorist attacks; competitive conditions in the airline industry; and our ability to achieve expected synergies from our merger with Northwest.

Additional information concerning risks and uncertainties that could cause differences between actual results and forward-looking statements is contained in Delta’s Securities and Exchange Commission filings, including its Annual Report on Form 10-K for the fiscal year ended December 31, 2007 and Form 10-Q for the quarterly period ended September 30, 2008. Caution should be taken not to place undue reliance on Delta’s forward-looking statements, which represent Delta’s views only as of October 29, 2008, and which Delta has no current intention to update.

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EX-99.2

  
    delta_8k-ex9902.htm




    
    

EX-99.3

Exhibit 99.3

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders

Northwest Airlines Corporation

We have audited the accompanying consolidated balance sheets of Northwest Airlines Corporation (the Company) as of December 31, 2007 (Successor) and as of December 31, 2006 (Predecessor), and the related consolidated statements of operations, common stockholders’ equity (deficit), and cash flows for the seven months ended December 31, 2007 (Successor), and for the five months ended May 31, 2007 (Predecessor), and for each of the two years in the period ended December 31, 2006 (Predecessor). These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Northwest Airlines Corporation as of December 31, 2007 (Successor) and 2006 (Predecessor), and the consolidated results of its operations and its cash flows for the seven-month period ended December 31, 2007 (Successor), five-month period ended May 31, 2007 (Predecessor), and each of the two years in the period ended December 31, 2006 (Predecessor), in conformity with U.S. generally accepted accounting principles.

As discussed in Note 1 to the consolidated financial statements, on May 18, 2007, the Bankruptcy Court entered an order confirming the plan of reorganization which became effective on May 31, 2007. Accordingly, the accompanying consolidated financial statements have been prepared in conformity with AICPA Statement of Position 90-7, Financial Reporting by Entities in Reorganization Under the Bankruptcy Code, for the Successor Company as a new entity with assets, liabilities, and a capital structure having carrying values not comparable with prior periods as described in Note 1.

As discussed in Notes 3, 4, 11, 13, and 16 to the consolidated financial statements, the Company adopted the provisions of the Financial Accounting Standards Board (FASB) Statement of Financial Accounting Standards (SFAS) No. 123 (revised 2004), Share-Based Payment, and SFAS No. 158, Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans — an amendment of FASB Statements No. 87, 88, 106, and 132(R), in 2006 and adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes — an interpretation of FASB Statement No. 109, and SFAS No. 157, Fair Value Measurements, in 2007.

As discussed in Note 5 to the financial statements, in 2005 the Company changed its method of recognizing certain pension plan administrative expenses associated with the Company’s defined benefit pension plans.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Northwest Airlines Corporation’s internal control over financial reporting as of December 31, 2007, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 28, 2008, expressed an unqualified opinion thereon.

February 28, 2008

EX-99.4