Delta Air Lines, Inc. · NYSE:DAL
Delta Air Lines — Shareholder Meeting (April 2003)
10 slides from Delta Air Lines's shareholder meeting presentation, Apr 7, 2003
Slide 1: Summary of the Stock Option Exchange Program
Summary of the Stock Option Exchange Program _________ Under Proposed Amendments to 2000 Performance Compensation Plan and SkyShares - the DeltaShare Stock Option Plan and Pilots Stock Option Plan ___________ Proxy Statement Proposal 3
Slide 2: Introduction
Introduction At the April 25 shareowners meeting, shareowners will be asked to approve amendments to the SkyShares plans and the management equity compensation plan. If shareowners approve the amendments, Delta could conduct a stock option exchange program for eligible option holders in the SkyShare
Slide 3: Why is Delta proposing an option exchange?
Why is Delta proposing an option exchange? Stock options provide incentives to retain and motivate employees and align their interests with shareowners. All SkyShares (37.4 million shares) and management options (21.1 million shares) are underwater (i.e., options have an exercise price greater than
Slide 4: Two approaches to a stock option exchange
Two approaches to a stock option exchange: 1. Cancel current options and grant replacement options on the same day. Requires variable accounting and therefore a compensation expense charge to Delta's earnings (FAS 123) 2. Cancel current options and grant replacement options at least 6 months and 1 d
Slide 5: Exchange Format, Eligible Options, Exercise Price
Option Exchange Design Elements Exchange Format During an offering period of no less than 20 business days, eligible employees can elect to cancel outstanding options in exchange for a grant of a lesser number of replacement options at least 6 months and 1 day after cancellation of outstanding optio
Slide 6: Option Term and Exercisability
Option Term Each replacement option will have a term equal to the remaining term of the associated canceled option. For example, if a canceled option had a term of 3 years and 4 months remaining at cancellation, then the associated replacement option would have a term of 3 years and 4 months from th
Slide 7: Exchange Ratios
Exchange Ratios This is a "value-for-value" exchange, i.e., at the time of the Annual Meeting, the aggregate value of options eligible for cancellation is intended to be approximately equivalent to the aggregate value of the replacement options that would be associated with the eligible options. Mer
Slide 8: Exchange Ratios
Exchange Ratios The exchange of canceled options for replacement options will be based on the following ratios: Tier Grant Date Exchange Ratio 1 1995 - 1999 get 1 replacement option by giving up 3 current options 2 2000 - 2001 get 1 replacement option by giving up 2 current options 3 2002 get 1 repl
Slide 9: Eligible Participants
Eligible Participants Eligibility to participate in the exchange program will be generally limited to "eligible employees" of Delta and its wholly-owned subsidiaries who hold eligible options -- active employees and those on military and short-term leaves defined by the Personnel & Compensation Comm
Slide 10: Provisions Applicable Only to Replacement Stock Options Granted to Executive Officers
Provisions Applicable Only to Replacement Stock Options Granted to Mr. Reid, Ms. Burns, Ms. Escarra and Mr. Colman ("Executive Officers") Executive Officers who participate in the exchange program will: receive only 90% of the replacement stock options to which he or she would be entitled under the