DAL » Topics » Merger

This excerpt taken from the DAL 8-K filed Oct 31, 2008.
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 “
This excerpt taken from the DAL 10-Q filed Oct 16, 2008.

Merger

On April 14, 2008, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Northwest Airlines Corporation (“Northwest”) whereby Northwest will become a wholly owned subsidiary of Delta. The merger has been approved by the Board of Directors and stockholders of each company.

Under 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) will be exchanged for 1.25 shares of Delta common stock. Northwest stock options and other equity awards will generally convert upon completion of the merger into stock options and equity awards with respect to Delta common stock, after giving effect to the exchange ratio. In connection with the closing of the merger, we expect to grant equity to substantially all employees of the combined company as follows: (1) common stock equal to 3.5% and 2.38% of our outstanding equity capitalization on a fully–diluted basis to eligible Delta and Northwest pilots, respectively; (2) common stock equal to 4.0% of our outstanding equity capitalization on a fully-diluted basis to U.S. based non-pilot, non-management employees of the combined company; and (3) restricted shares of our common stock and non-qualified stock options, which will take approximately three years to fully vest, equal to approximately 3.5% of our outstanding equity capitalization on a fully–diluted basis to approximately 600 to 700 management employees of the combined company. The determination of our outstanding equity capitalization on a fully-diluted basis gives effect to the shares of common stock to be issued to the stockholders of Northwest in the merger and to the equity grants made to employees as described above.

 

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Completion of the merger is subject to customary conditions, including regulatory clearance under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. The Merger Agreement contains certain termination rights for both Delta and Northwest. The Merger Agreement further provides that, upon termination of the Merger Agreement under specified circumstances, Northwest may be required to pay to Delta, or Delta may be required to pay to Northwest, a termination fee of $165 million. We expect the merger will close by the end of 2008.

Certain contracts and employee benefit arrangements of Delta and Northwest contain change in control provisions that will be triggered by the merger, resulting in changes to the terms or settlement amounts of the contracts and arrangements.

We have also reached a combined collective bargaining agreement that will cover Delta’s pilots and Northwest’s pilots upon the closing of the merger. The combined agreement will become amendable on December 31, 2012. The Delta Master Executive Council, the governing body of the Delta unit of the Air Line Pilots Association, International (“ALPA”), the Northwest Master Executive Council, the governing body of the Northwest Airlines, Inc. unit of ALPA, and ALPA have also adopted a Process Agreement relating to the determination of an integrated seniority list, which will become effective upon or shortly after the closing of the merger, for the combined Delta and Northwest pilot groups. The parties to the Process Agreement may not revise, waive any material right under, or terminate the Process Agreement without our consent.

This excerpt taken from the DAL 10-Q filed Jul 17, 2008.

Merger

On April 14, 2008, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Northwest Airlines Corporation (“Northwest”) whereby Northwest will become a wholly owned subsidiary of Delta. The merger better positions us to manage through economic cycles and volatile fuel prices, to invest in our fleet and to improve services for customers. We believe the merger will generate approximately $2 billion in annual revenue and cost synergies by 2012 from more effective aircraft utilization, a more comprehensive and diversified route system and cost synergies from reduced overhead and improved operational efficiency. The merger has been approved by the Board of Directors of each company.

Under 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) will be exchanged for 1.25 shares of Delta common stock. Northwest stock options and other equity awards will generally convert upon completion of the merger into stock options and equity awards with respect to Delta common stock, after giving effect to the exchange ratio. In addition, we have agreed to issue common stock equal to 3.5% of our fully-diluted outstanding shares for Delta pilots and 2.38% of our fully-diluted outstanding shares for Northwest pilots (after giving effect to the shares issued in connection with the merger), effective on the closing of the merger and subject to ratification by Delta and Northwest pilots of the tentative combined collective bargaining agreement, described below, and approval by Delta stockholders of the amendment to the Delta 2007 Performance Compensation Plan to increase the number of shares of Delta common stock issuable under that plan. We have also announced our intention to issue to U.S. based non-pilot employees of Delta and Northwest shares of our common stock equal to 4% of our fully-diluted shares (after giving effect to the shares issued in connection with the merger), effective on the closing of the merger and subject to stockholder approval of the amendment to the Delta 2007 Performance Compensation Plan to increase the number of shares of Delta common stock issuable under that plan.

 

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Completion of the merger is subject to customary conditions, including approval by holders of common stock of Northwest and Delta and regulatory clearance under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and the applicable merger control laws of the European Commission. The Merger Agreement contains certain termination rights for both Delta and Northwest. The Merger Agreement further provides that, upon termination of the Merger Agreement under specified circumstances, Northwest may be required to pay to Delta, or Delta may be required to pay to Northwest, a termination fee of $165 million. We currently target the merger to close by the end of 2008.

This excerpt taken from the DAL 10-Q filed Apr 25, 2008.

Merger

On April 14, 2008, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Northwest Airlines Corporation (“Northwest”) whereby Northwest will become a wholly owned subsidiary of Delta. The merger better positions us to manage through economic cycles and volatile fuel prices, to invest in our fleet and to improve services for customers. The merger is expected to generate more than $1 billion in annual revenue and cost synergies by 2012 from more effective aircraft utilization, a more comprehensive and diversified route system and cost synergies from reduced overhead and improved operational efficiency. The merger has been approved by the Board of Directors of each company.

Under the terms of the Merger Agreement, each outstanding share of Northwest common stock (including those shares held in the reserve established pursuant to Northwest’s plan of reorganization under Chapter 11) will be exchanged for 1.25 shares of Delta common stock. Northwest stock options and other equity awards will generally convert upon completion of the merger into stock options and equity awards with respect to Delta common stock, after giving effect to the exchange ratio. In addition, we have agreed to issue to Delta pilots shares of our common stock equal to 3.5% of our fully-diluted outstanding shares (after giving effect to the shares issued in connection with the merger), effective on the closing of the merger and subject to ratification by Delta pilots of amendments to their collective bargaining agreement, described below, and shareowner approval of the issuance. We have also announced our intention to issue to U.S. based non-pilot employees of Delta and Northwest shares of our common stock equal to 4% of our fully-diluted shares (after giving effect to the shares issued in connection with the merger) effective on the closing of the merger and subject to shareholder approval of the issuance.

The Merger Agreement provides that upon consummation of the merger, the Board of Directors of the combined company will consist of 13 members, consisting of (1) seven members of the Delta Board of Directors (which will include Daniel A. Carp, the current Chairman of the Board of Delta who will continue as non-executive Chairman of the Board of the combined company, and Richard H. Anderson, the current Chief Executive Officer of Delta who will continue as Chief Executive Officer of the combined company ) and (2) five

 

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members of the Northwest Board of Directors (which will include Roy J. Bostock, the current Chairman of the Northwest Board of Directors, who will serve as non-executive Vice Chairman of the Board of the combined company, and Douglas M. Steenland, the current Chief Executive Officer of Northwest, and three members of the current Northwest Board of Directors) and (3) one representative designated by the Delta Master Executive Council (the “Delta MEC”), the governing body of the Delta unit of the Air Line Pilots Association, International (“ALPA”) (who will be Kenneth C. Rogers, currently a member of the Delta Board of Directors, or a qualified Delta pilot). Edward H. Bastian will serve as President and Chief Financial Officer of the combined company.

Completion of the merger is subject to customary conditions, including approval by holders of common stock of Northwest and Delta and regulatory clearance under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and the applicable merger control laws of the European Commission. The Merger Agreement contains certain termination rights for both Delta and Northwest. The Merger Agreement further provides that, upon termination of the Merger Agreement under specified circumstances, Northwest may be required to pay to Delta, or Delta may be required to pay to Northwest, a termination fee of $165 million. We currently expect the merger to close by the end of 2008.

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