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Delta Air Lines Inc. 8-K 2008 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): February 8,
2008
DELTA AIR LINES,
INC.
(Exact
name of registrant as specified in its charter)
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):
(e) On
February 7, 2008, the Personnel & Compensation Committee of the Board of
Directors (the “P&C Committee”) of Delta Air Lines, Inc. (the “Company” or
“Delta”) adopted the Delta Air Lines, Inc. 2008 Management Incentive Plan (the
“2008 MIP”) and the Delta Air Lines, Inc. 2008 Long Term Incentive Program (the
“2008 LTIP”). Both the 2008 MIP and the 2008 LTIP were adopted under
the Delta Air Lines, Inc. 2007 Performance Compensation Plan (the “2007
Performance Plan”) and are 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. Copies of the 2008 MIP and 2008
LTIP are filed herewith.
The
Delta Air Lines, Inc. 2008 Management Incentive Program
The 2008
MIP is an annual cash incentive plan similar to the plan that was in place in
2007. It once again closely links pay and performance by providing
management employees with a compensation opportunity based on Delta’s achieving
key business plan goals in 2008. The 2008 MIP also closely aligns the
interests of Delta management and other employees because the 2008 MIP goals are
the same ones that drive payouts under Delta’s broad-based employee profit
sharing program (under which Delta pays at least 15% of its annual pre-tax
income, as defined in the program, to eligible employees) (the “Profit Sharing
Program”) and shared rewards program (under which eligible employees may receive
payments of up to $100 per month based on Delta’s baggage handling, completion
factor and on-time arrival performance) (the “Shared Rewards
Program”).
For
officers at or above the senior vice president level, the annual incentive
opportunity will be based (1) 50% on Delta’s financial performance; and (2) 50%
on its operational performance. The financial performance measure is
Delta’s 2008 pre-tax income, which is the same measure used in the Profit
Sharing Program. The operational performance measures are the number
of times in 2008 that Delta meets its monthly (1) Shared Rewards Program goals
(which has a 37.5% weighting) and (2) completion factor and on-time performance
Delta Connection goals (which has a 12.5% weighting). Payouts under
the 2008 MIP may range from 0% to 200% of target based on Delta’s performance in
relation to the financial and operational performance measures. The
target MIP award for each officer was determined by the P&C Committee and
expressed as a percentage of the officer’s annual base salary.
Even if
Delta meets or exceeds its financial and operational performance targets,
however, no payment will be made under the 2008 MIP to any participant under
those measures unless there is a payment for 2008 under the Profit Sharing
Program.
Certain
forfeiture provisions and certain accelerated vesting provisions will apply
under circumstances detailed in the 2008 MIP.
The
Delta Air Lines, Inc. 2008 Long Term Incentive Program
The 2008
LTIP initiates a long term incentive plan for Delta. It closely links
pay and performance by providing management employees with a compensation
opportunity based on the value of Delta’s common stock and the achievement of
key financial objectives over a three-year performance
period. Therefore, the 2008 LTIP closely aligns the interests of
Delta management with the Company’s other stakeholders.
Officers
at or above the senior vice president level will receive equity-based
compensation in the form of non-qualified stock options, restricted stock and
performance shares. The stock options and restricted stock will vest
in equal annual installments on each of the first, second, and third
anniversaries of the date of grant, subject to the participant’s continued
employment with the Company. All unexercised stock options will
expire 10 years after the date of grant.
Each
award of performance shares represents a long term incentive compensation
opportunity. Payment of performance shares, if any, will be based on
the Company’s cumulative revenue growth and average annual pre-tax income margin
over the three-year performance period ending December 31, 2010 relative to the
performance of six other airlines in the Company’s peer group, subject to the
participant’s continued employment with the Company. Each such
measure is weighted equally. The payout of performance shares may
range from 0% to 200% of the number of shares covered by the target performance
share award. Any performance shares earned under the 2008 LTIP will
be settled in shares of Company common stock after the end of the three-year
performance period. Even if Delta meets or surpasses the target
rankings, however, no payment of performance shares will be made under the 2008
LTIP to any participant until there is a payment under the Profit Sharing
Program.
Certain
forfeiture and accelerated vesting provisions will apply under circumstances
detailed in the 2008 LTIP.
(d) Exhibits.
Exhibit
99.1 The
Delta Air Lines, Inc. 2008 Long Term Incentive Program
Exhibit
99.2 Model
Award Agreement for the Delta Air Lines, Inc. 2008 Long Term Incentive
Program
Exhibit
99.3 The
Delta Air Lines, Inc. 2008 Management Incentive Program
2
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.
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EXHIBIT
INDEX
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