Delta Pilot Stock Options

[bike100k]

Can someone tell me what the exercise dates are for the stock options received in this last contract side letter?

 

[ultrarunner]

What's the average number of options issued to each pilot?

What's the vesting date?

And most importantly, what is the strike price?

 

[snow-back]

Each pilot averages about 4000 options. The strike price for ALL options was market close on Nov. 11 which was $6.29. The exercise dates are Nov.11, 2005, 2006 & 2007 in 3 equal parcels. I think they expire on Nov.11, 2010.

 

[klhoard]

So. . . five years from now Delta stock goes back up to where it was at it's height and all of the pilots call in Rich. . . .

Do all of the furloughed pilots get the stock options also??

 

[ultrarunner]

If a pilot held the stock until it hit an all time high, it would have a yeild of about 300 grand,(you buy the 4000 shares for 6.28, then immediately flip them for 70 bucks) before taxes. It's taxed at a supplemental rate, so after taxes, in today's dollars, IF the stock makes it to an ALL TIME HIGH, prior to the options expriration date, a pilot might take home around 125 grand or so.

Then you also need to take into account that if exercised all at once, the large exercise with then place the pilot into the next highest income bracket, for which he will need to hold back additional cash from the exercies to pay the additional income tax, since the pilot has likey NOT increased his witholding for the next higher tax bracket.

Exercising options requires careful planning. I have done about 8 or 10 over the last couple of years. You need good couseling when doing this stuff.

 

[klhoard]

Well, it's better than a sharp stick in the eye. . .

 

[ultrarunner]

Agreed