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): March
1, 2005
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DELTA
AIR LINES, INC. |
|
(Exact
name of registrant as specified in its
charter) |
|
Delaware |
001-05424 |
58-0218548 |
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(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
1.01. Entry into a Material
Definitive Agreement
Annual
Cash Incentive Program for 2005
Delta’s
annual cash incentive program (“Program”) links pay and performance by providing
a compensation opportunity to participants based on Delta’s achieving annual
performance goals that are consistent with its business plan and Delta’s
broad-based employee incentive programs. The Program is administered by the
Personnel & Compensation Committee (“Committee”) of Delta’s Board of
Directors.
On March
1, 2005, the Committee established the terms and conditions for the Program for
2005 under the Delta 2000 Performance Compensation Plan. All of Delta’s
executives participate in the Program other than Mr. Grinstein, who previously
decided that he would not participate in any incentive compensation
arrangement.
The
Committee patterned the Program for 2005 on two of the broad-based employee
incentive programs that Delta adopted during the December 2004 quarter in
connection with its out-of-court restructuring efforts. The broad-based programs
include (1) an annual profit sharing program under which eligible employees
(excluding officers and director level employees) in the United States and most
international countries will receive profit sharing payments when Delta’s
pre-tax income, as defined, exceeds $500 million in a given year; and (2) a
monthly incentive program (“Monthly Incentive Program”) under which eligible
employees (excluding officers and director level employees) will receive monthly
payments of up to $100 based on Delta’s on-time arrival performance, completion
factor and customer satisfaction ratings.
Target
award opportunities under the Program are based on a percentage of a
participant's base salary. As implemented for 2005, the Program consists of two
parts. Under the first part, if Delta’s pretax income, as defined, exceeds $500
million in 2005 (“$500 Million Trigger”), participants may receive an annual
incentive payment ranging from 0% to 150% of their target award opportunity. If
Delta meets the $500 Million Trigger, a participant’s actual payment, if any,
will be based on (1) Delta’s achieving specific safety and financial performance
goals in 2005; (2) Delta’s performance with respect to key initiatives (such as
the redesign of its Atlanta operation from a banked to a continuous hub; the
performance of Song, Delta’s low-fare service; and the results of its
SimpliFares initiative); and (3) the participant’s individual performance.
Because it continues to face significant challenges due to low passenger mile
yields, historically high fuel prices and other cost pressures related to
interest and pension and related expense, Delta believes, as previously
reported, it will record a substantial net loss in 2005. Accordingly, the
Committee believes Delta will not meet the $500 Million Trigger and, therefore,
that there will not be any payments under the first part of the
Program.
Under the
second part of the Program, participants may receive an annual incentive payment
ranging from 0% to 20% of their target award opportunity. This payment, if any,
will be based on (1) Delta’s on-time arrival performance, completion factor and
customer satisfaction ratings as determined under the Monthly Incentive Program;
and (2) the participant’s individual performance.
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.
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DELTA AIR LINES, INC. |
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By: |
/s/ Leslie P. Klemperer |
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Date:
March 4, 2005 |
Leslie P. Klemperer
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