The company’s Web site statement said the grant – which will exclude officers and directors – will be options to purchase a total of 63 million shares of common stock, subject to New York Stock Exchange (NYSE) approval.
According to the company, the exercise price of the stock options would be equal to the closing price of the common stock on the NYSE on the date of the grant. The options would become exercisable in three equal installments on the first, second and third anniversaries of the grant date, and unexercised stock options would expire at the close of business on the sixth anniversary of the grant date, the company said.
Monday’s announcement of the non-qual options program comes shortly after the company and its pilot union reached an agreement that will provide the company with $1 billion in annual cost savings.
The agreement includes:
- a 32.5% pay cut on December 1, 2004
- benefit changes such as a 16%-reduction in vacation pay, increased cost sharing for active pilot and retiree medical benefits, the amendment of the defined benefit pension plan to stop service accrual as of December 31, 2004, and the establishment of a defined contribution pension plan as of January 1, 2005.