Form 8-K
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): September
22, 2005
DELTA
AIR LINES, INC.
|
(Exact
name of registrant as specified in its
charter)
|
Delaware
|
001-05424
|
58-0218548
|
(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 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
In
connection with the expansion of its transformation plan, Delta Air Lines,
Inc.
(“Delta”) announced pay reductions for its domestic non-pilot employees,
including its executive officers, effective November 1, 2005. The expanded
transformation plan and the overall employment cost reductions, including
the
pay reductions for executive officers, are summarized below.
On
September 22, 2005, Delta announced that it is expanding its transformation
plan
to target the delivery of an additional $3 billion in annual benefits by
the end
of 2007. This $3 billion target is on top of the $5 billion in annual benefits
Delta is on track to deliver by the end of 2006, as compared to 2002. Delta’s
expanded transformation plan is intended to combine savings achieved through
the
Chapter 11 restructuring process with planned revenue and network productivity
improvements and more competitive employment costs. The expanded transformation
plan is described in more detail in the press release dated September 22,
2005,
which is attached hereto as exhibit 99.1.
The
expanded transformation plan targets $930 million of benefits to be realized
annually through reduced employment costs. These reductions are planned to
result from changes to pay and benefits for Delta employees, as well as employee
productivity improvements and overhead reductions. The total targeted benefit
is
made up of annual savings of $325 million from Delta pilots and $605 million
from Delta’s domestic, non-pilot workforce - including management. Components of
employment changes include:
· |
Eliminating
7,000-9,000 jobs systemwide by the end of 2007. Delta plans to
achieve
these reductions in part through previously announced changes to
strengthen its network and right-size its Cincinnati hub. The final
number
of positions eliminated will depend upon changes to Delta’s
fleet.
|
· |
Reducing
pay at all levels of management. This includes a 25 percent pay
reduction
for Gerald Grinstein, Delta’s Chief Executive Officer; a 15 percent
reduction for other officers, including executive officers; and
a 9
percent reduction for supervisory and other administrative personnel.
|
· |
Reducing
pay scales by 7 to 10 percent for most front-line employees, excluding
those earning less than $25,000
annually.
|
· |
Enhancing
profit-sharing to allow all Delta employees to share in future
success
from the first dollar of profitability.
|
As
a
result of the 25 percent pay reduction for Mr. Grinstein and the 15 percent
pay
reductions for each of the other executive officers, effective November 1,
2005,
the annual base salaries for Delta’s executive officers will be as
follows:
Name
and Title
|
Annual
Salary
|
Gerald
Grinstein, Chief Executive Officer
|
$337,500
|
James
M. Whitehurst, Chief Operating Officer
|
$382,500
|
Edward
H. Bastian, Executive Vice President and Chief Financial
Officer
|
$382,500
|
Glen
W. Hauenstein, Executive Vice President and Chief of Network
and
Revenue Management
|
$344,250
|
Joseph
C. Kolshak, Executive Vice President and Chief of
Operations
|
$344,250
|
Lee
A. Macenczak, Executive Vice President and Chief of Customer
Service
|
$344,250
|
Paul
G. Matsen, Executive Vice President and Chief Marketing
Officer
|
$344,250
|
In
addition, Delta announced that no bonuses will be paid to senior officers,
including executive officers, under the annual cash incentive program with
respect to calendar year 2005, even if applicable operational and
customer service performance goals are met. The terms of the Annual Cash
Incentive Program for 2005 were described in Delta’s Current Report on Form 8-K
filed on March 4, 2005. All of Delta’s executive officers were eligible to
participate in the program other than Gerald Grinstein, who decided prior
to the
establishment of the terms of the program for 2005 that he would not participate
in any incentive compensation arrangement.
Item
8.01 Other
Events
On
September 22, 2005, Delta issued a press release discussing the company’s
expanded transformation plan. A copy of the press release is attached hereto
as
exhibit 99.1.
On
September 22, 2005, Delta also issued two memoranda to employees. The first
memorandum, from Gerald Grinstein, Delta’s Chief Executive Officer, discusses
Delta’s expanded transformation plan. The second memorandum, from Beth Johnston,
Delta’s Senior Vice President - Human Resources, discusses changes in pay
and benefits for Delta's domestic, non-contract employees. Copies of these
memoranda are attached hereto as exhibits 99.2 and 99.3,
respectively.
Exhibit
99.1
|
Press
Release dated September 22, 2005 titled “Delta Air Lines Steps Up
Transformation Plan to Accelerate Path to
Profitability”
|
|
|
Exhibit
99.2
|
Memorandum
dated September 22, 2005 titled “Delta’s Transformation Continues - Our
Progress, Our Plan, Our People”
|
|
|
Exhibit
99.3
|
Memorandum
dated September 22, 2005 titled “Changes Required to Help Delta Survive
and Compete”
|
-2-
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.
|
DELTA
AIR LINES, INC.
|
|
|
|
By:
/s/
Leslie P.
Klemperer
|
Date:
September 27, 2005
|
Leslie P. Klemperer
Secretary
|
-3-
Exhibit
Number
|
Description
|
|
|
Exhibit
99.1
|
Press
Release dated September 22, 2005 titled “Delta Air Lines Steps Up
Transformation Plan to Accelerate Path to
Profitability”
|
|
|
Exhibit
99.2
|
Memorandum
dated September 22, 2005 titled “Delta’s Transformation Continues - Our
Progress, Our Plan, Our People”
|
|
|
Exhibit
99.3
|
Memorandum
dated September 22, 2005 titled “Changes Required to Help Delta Survive
and Compete”
|
-4-