Vice President-human Resources Employment Agreement

September 17, 1998


[Delta Letterhead]


Mr. Robert L. Colman 7535 Legends Lane Cincinnati, OH 45244


Dear Bob:


I am pleased to confirm my verbal offer of employment for the position of Executive Vice President - Human Resources for Delta Air Lines, Inc. (Delta or the Company). In this assignment, you will report directly to me. The date for commencement of your active employment will be as you and the Company agree, but in any event not later than October 14, 1998 (the commencement date being referred to as the Starting Date).


Your initial and minimum base salary will be $400,000 per annum, payable in accordance with the usual payment practices of the Company.


With respect to each fiscal year beginning with the fiscal year ending June 30, 1999 during which you are employed by the Company, you will be eligible to receive in addition to your base salary an annual incentive compensation award (Annual Award) for services rendered during such fiscal year, subject to the terms and conditions of the Company's annual incentive compensation plan as in effect from time to time. Except as provided in the immediately following paragraph, the amount of the Annual Award, if any, with respect to any fiscal year will be based upon performance targets and award levels determined by the Personnel & Compensation Committee of the Board of Directors (or any successor committee designated by the Board) in its sole discretion, in accordance with the Company's annual incentive compensation plan as in effect from time to time; provided that for each fiscal year beginning with the fiscal year ending June 30, 1999, your target award level shall be established in such a manner as to provide you with the opportunity to earn an award of at least 57.5% of your base salary for such fiscal year, assuming performance at the target level.


Notwithstanding the preceding paragraph, you will receive an Annual Award of not less than (1) $225,000 with respect to fiscal year 1999 and (2) $115,000 with respect to fiscal year 2000, unless your employment is terminated by the Company for Cause prior to June 30, 1999 or June 30, 2000, respectively; provided, that if your employment terminates for any reason other than Cause prior to June 30, 1999 or June 30, 2000, respectively, the applicable minimum amount shall be prorated by multiplication by a fraction determined as follows: (1) with respect to fiscal year 1999, the numerator of which is the number of days from the Starting Date through the date of termination of your employment, and the denominator of which is the number of days from the Starting Date through June 30, 1999 and (2) with respect to fiscal year 2000, the numerator of which is the number of days from July 1, 1999 through the date of termination of your employment, and the denominator of which is 365.


You will also be a participant in the 1989 Stock Incentive Plan in accordance with the terms of that Plan. You will be granted an initial award with non-qualified stock options on 150,000 shares of Delta common stock. The award date will be the Starting Date, and the exercise price will be the closing price of Delta common stock on the New York Stock Exchange on that date. These options will vest according to the following schedule: 78,000 of these options will vest immediately; 72,000 of these options will vest in 20% increments on each of the first five anniversaries of the award date, and all of the options will be exercisable in accordance with, and otherwise subject to, the terms and conditions set forth in the award agreement attached as Exhibit A. Future grants, if any, will be in accordance with the Plan.


To compensate you for benefits which you are forfeiting by resigning from GE to accept a position with the Company, (1) you will be granted 20,000 shares of restricted stock, which will vest in equal amounts (33 1/3% each year) on each of the first, second, and third anniversaries of the Starting Date; and (2) you will be paid a signing bonus in the amount of $718,885, payable promptly after the Starting Date, which signing bonus you will promptly refund to Delta if, within six (6) months after the Starting Date, your employment with Delta is terminated by the Company for Cause or by you other than for Good Reason; provided, however, that the amount of that signing bonus will not constitute earnings for purposes of determining your benefits under any employee benefit plan, program or policy of Delta. The


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restricted stock award is subject to the terms and conditions set forth in the award agreement attached as Exhibit B.


Delta will provide reimbursement for the reasonable cost of your legal counsel in connection with the negotiation and preparation of this agreement. While employed by the Company, you will be entitled to such fringe benefits as are provided to Executive Vice Presidents of the Company, including free and reduced-rate travel, automobile allowance, initiation fees and monthly dues for one country club membership, and similar programs as in effect from time to time.


Except as otherwise provided in this letter agreement, your employment with Delta will be subject to Delta's standard policies and will be governed by the terms and conditions of the Personnel Practices Manual, as may be amended from time to time hereafter. You will be provided with vacation, sick leave, and paid holidays in accordance with Delta's standard policy regarding these benefits for Executive Vice Presidents of the Company.


You will also be eligible to participate in Delta's standard benefit programs, as amended from time to time, including the following:


1. DeltaFlex, our flexible benefits plan, which provides you with a menu
of choices for medical, dental, life insurance, and disability
benefits.


2. The Officer Life Insurance program.


3. The Delta Family-Care Disability and Survivorship Plan, which provides
certain disability benefits to you and certain benefits in the event of
your death.


4. The Delta Family-Care Retirement Plan benefit will accrue from the date
you join Delta. In addition, Delta has a nonqualified plan which will
cover any excess benefits not payable by the Delta Family-Care
Retirement Plan (due to Section 415 or 401(a)(17) limitations). For
purposes of both vesting and benefit accrual under the nonqualified
plan, you will be deemed to have eighteen (18) additional years of
service with Delta, provided that you complete at least two (2) years
of actual service as an employee with Delta. In addition, if your


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employment is terminated by the Company without Cause or by you for
Good Reason before your earnings history for retirement benefit
purposes has been credited with your Annual Awards for both fiscal
years 1999 and 2000, your final average earnings for purposes of
determining your benefits under the nonqualified plan will be
calculated as if your employment had continued through fiscal year 2000
and you had received your minimum Annual Awards of $225,000 for fiscal
year 1999 and $115,000 for fiscal year 2000; provided, however, that if
your actual Annual Award for fiscal year 1999 exceeds $225,000, that
actual amount will be used instead of $225,000 in determining your
retirement benefits. However, the benefit under the nonqualified plan
will be reduced by the amount of any retirement benefits which you
receive under any qualified or nonqualified defined benefit retirement
plan of General Electric Company.


5. After one year of service, the Delta Family-Care Savings Plan, which
currently features pre-tax or post-tax employee contributions of up to
12% (up to the limits of the Internal Revenue Code), and a 50% match of
your contributions on the first 4% of salary, with Delta's maximum
contribution equal to 2% of your salary.


The Company will pay all costs of relocation of you and your family to the Atlanta metropolitan area in accordance with the Company's relocation policy supplemented as follows:


a) Reasonable temporary living expenses for you and your family
in the Atlanta metropolitan area for a period not to exceed
six months from the Starting Date;


b) If you so elect prior to the first anniversary of the Starting
Date, the Company will purchase from you your primary
residence as of the date hereof. The purchase price will be
equal to the average of the estimates of the fair market value
of the residence as determined, within 30 days of such
election, by two reputable and independent professional real
estate appraisers, one of which will be selected by you and
one of which will be selected by the Company;


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c) The weight limitation for movement of your household effects
will be waived;


d) The Company will pay up to two discount points with respect to
one mortgage financing of your initial new residence in the
Atlanta metropolitan area; and


e) The Company will absorb any income tax liability resulting
from relocation benefits provided on your behalf.


Your eligibility for severance benefits is summarized below:


Change in Control* - ------------------


Your eligibility for benefits in conjunction with a Change in Control will be governed by Delta's Retention Protection Agreement applicable to Executive Vice Presidents of the Company.


Termination for Cause or Without Good Reason - --------------------------------------------


No severance benefit provided, except as specifically provided below under the heading "Other Separation Compensation."


Termination Without Cause or For Good Reason* - ---------------------------------------------


If your employment is terminated prior to the third anniversary of the Starting Date (other than by reason of death or disability) by the Company without Cause or by you for Good Reason, you will receive: (1) the balance of your then current base salary and then current target incentive compensation Annual Award through the end of the month in which the third anniversary of the Starting Date occurs (subject to a minimum of


- -------- * In the event a Qualifying Event (as defined in your Retention Protection Agreement) occurs during the term of your Retention Protection Agreement, the Retention Protection Agreement shall apply instead of these provisions, it being understood that the Retention Protection Agreement will be appropriately amended to preserve the retirement benefits and "Other Separation Compensation" described in this letter agreement.


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twelve (12) months of such salary and Annual Award), (2) immediate vesting of any unvested stock option and restricted stock awards which you have been granted on the Starting Date, and (3) immediate vesting of all accrued retirement plan benefits, including your eighteen (18) additional years of service credit, reduced by the above-referenced offset for GE retirement benefits. For purposes of this letter agreement, the terms "Cause" and "Good Reason" (and related terms) shall have the meanings set forth in Exhibit C accompanying this letter agreement.


Termination After Death or Disability* - --------------------------------------


If your employment is terminated due to death or disability prior to the third anniversary of the Starting Date, you will receive: (1) such death or disability benefits as shall then be maintained by the Company for which you or your survivors are eligible; (2) immediate vesting of any unvested stock option and restricted stock awards which you have been granted on the Starting Date, and (3) immediate vesting of all accrued retirement plan benefits, including your eighteen (18) additional years of service credit, reduced by the above-referenced offset for GE retirement benefits.


Other Separation Compensation* - ------------------------------


If your employment is terminated prior to June 1, 2005 by the Company without Cause or by you for Good Reason, or if your employment terminates for any reason after May 31, 2005, you will be treated as a retiree for purposes of Delta's Family-Care benefit plans and will receive (in addition to any other benefits which may be payable to you) a lump sum payment determined pursuant to the table set forth in Exhibit D accompanying this letter agreement.


- -------------- * In the event a Qualifying Event (as defined in your Retention Protection Agreement) occurs during the term of your Retention Protection Agreement, the Retention Protection Agreement shall apply instead of these provisions, it being understood that the Retention Protection Agreement will be appropriately amended to preserve the retirement benefits and "Other Separation Compensation" described in this letter agreement.


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In the event of any conflict between the terms of this letter agreement and the terms of any other agreement, award or arrangement contemplated hereby, the terms of this letter agreement shall control. This letter agreement supersedes all prior discussions and documentation concerning your compensation arrangements with the Company.


If the terms outlined above reflect your understanding of our offer and you accept employment based on these terms, please indicate your acceptance by signing the two original letters provided. Please keep one letter for your records and return the other to me.


Bob, we are extremely pleased to have you join the Delta team, and I look forward with great pleasure to our association with you in this important role at Delta. I anticipate benefiting from your expertise, and I believe you will help us establish a winning formula for success in the future.


Sincerely,


/s/ Leo F. Mullin


Leo F. Mullin


Agreed and accepted to this 17th day of
September, 1998


/s/ Robert L. Colman
---------------------------------------
Robert L. Colman


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Exhibit A
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NONQUALIFIED STOCK OPTION AWARD AGREEMENT
UNDER THE 1989 STOCK INCENTIVE PLAN


September 17, 1998


Robert L. Colman Executive Vice President - Human Resources


The 1989 Stock Incentive Plan of Delta Air Lines, Inc., as amended ("Plan"), is intended as an inducement for officers, executives and key employees of Delta Air Lines, Inc. (the "Company") to continue in the employment of the Company, and to provide a greater incentive to such employees to make material contributions to the Company's success by increasing their proprietary interest in the Company through increased direct stock ownership. The Plan, which provides for certain awards to eligible employees, is administered by the Personnel & Compensation Committee of the Board of Directors (the "Committee"). Pursuant to the Plan, the Committee selected you to receive an award of a Nonqualified Stock Option under the Plan, effective as of the close of business on the date you begin active employment with the Company (the "Starting Date"), which date will be mutually agreed upon by you and the Company, but which will be no later than October 14, 1998. The Committee has instructed me, on behalf of the Company, to provide this Agreement to you.


In consideration of the mutual covenants herein contained and for other good and valuable consideration, the Company and you as an employee of the Company (hereinafter called "Employee"), do hereby agree as follows:


1. The Company hereby grants to Employee a Nonqualified Stock Option ("Stock Option") covering 150,000 shares of Stock, as defined in the Plan, a copy of which has been furnished t ...