Delta Asks to Void 'Worthless' Employee Stock Options

March 21, 2006 ( - Bankrupt Delta Air Lines Inc. has asked a federal judge to allow it to void around 93 million stock options held by 70,000 current and former employees and directors.

Delta says it costs $305,000 a year to maintain, account for and administer the benefit, according to the Associated Press.   The company said the options, if exercised, would little to no real value to the option holders.

Unlike other proposals made by the airlines, the motion to void the options has the support of the Air Line Pilots Association (ALPA), members of which make up approximately one-third of the option holders, the AP reports.  Delta said the motion also has the support of the creditors committee.

According to the motion, the options have exercise prices between $2.97 and $62.63 a share.   “We didn’t oppose the motion to void the stock options because they were worthless once management forced the company into bankruptcy anyway,” ALPA executive committee chairman Lee Moak said in the news report.

Meanwhile, hearings continued before an arbitration panel that will decide whether to allow Delta to void its contract with its pilots so it can impose up to $325 million in long-term pay and benefit cuts (See  Delta Wants Union Contract Voided: Pilots Ask Judge to Step Down ). The panel’s decision is due by April 15, and the ALPA has promised to strike if its contract is rejected.