Delta Airlines 2003 Annual Report Download - page 102

Table of Contents
thereafter, we have not either provided additional collateral to GECC in the form of cash or aircraft or caused a reduction in the Aggregate Obligations such
that the Collateral Value Test is satisfied.
Unless the GECC letters of credit are extended in a timely manner, we will be required to purchase the Bonds on May 15, 2008, five days prior to the
expiration of the letters of credit. In this circumstance, we could seek, but there is no assurance that we would be able, to (1) sell the Bonds without credit
enhancement at then-prevailing fixed interest rates or (2) replace the expiring letters of credit with new letters of credit from an alternate credit provider and
remarket the Bonds.
We may terminate the GECC letters of credit, and repay any outstanding obligations under the Reimbursement Agreement, at our election prior to maturity,
subject to certain prepayment fees if such action occurs before May 20, 2005.
Convertible Senior Notes (8.00% Notes)
In June 2003, we issued $350 million principal amount of 8.00% Notes due 2023. Holders may convert their 8.00% Notes into shares of our common stock at
a conversion rate of 35.7143 shares of common stock per $1,000 principal amount of 8.00% Notes, subject to adjustment in certain circumstances, which is
equivalent to a conversion price of approximately $28.00 per share of common stock, if:
• during any calendar quarter after June 30, 2003, the last reported sale price of our common stock for at least 20 trading days during the period of 30
consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the
conversion price per share of our common stock;
• the trading price of the 8.00% Notes falls below a specified threshold;
• we call the 8.00% Notes for redemption; or
• specified corporate transactions occur.
We may redeem all or some of the 8.00% Notes for cash at any time after June 5, 2008, at a redemption price equal to the principal amount of the 8.00%
Notes to be redeemed plus any accrued and unpaid interest.
Holders may require us to repurchase their 8.00% Notes for cash on June 3, 2008, 2013 and 2018, or in other specified circumstances involving the exchange,
conversion or acquisition of all or substantially all of our common stock, at a purchase price equal to the principal amount of the 8.00% Notes to be purchased
plus any accrued and unpaid interest. At December 31, 2003, 12,500,005 shares of common stock were reserved for issuance for the conversion of the 8.00%
Notes.
ESOP Notes
We guarantee the ESOP Notes issued by the Delta Family-Care Savings Plan. During 2002, we terminated the letter of credit used to make required payments
of principal, interest and make-whole premium on the ESOP Notes. As a result of this action, each holder of ESOP Notes had
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