Delta Airlines 2008 Annual Report Download - page 129
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Table of Contents
Index to Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The weighted average fair value of options was determined based on the following assumptions:
Year Ended
December 31,
2008
Eight Months
Ended
December 31,
2007
Risk-free interest rate 2.6-3.4% 3.6-4.9%
Expected life of stock options (in years) 5.6-6.0 6.0
Expected volatility of common stock 63-79% 55-60%
The following table summarizes stock option activity for the year ended December 31, 2008:
Shares
(000)
Weighted
Average
Exercise
Price
Weighted
Average
Remaining
Contractual
Life (in years)
Aggregate
Intrinsic
Value (in
millions)
Outstanding at January 1, 2008 3,946 $ 18.87
Granted 12,397 8.06
Assumed in the Merger 7,271 17.22
Exercised (52) 8.40
Forfeited or expired (18) 18.47
Outstanding at December 31, 2008 23,544 $ 12.69 8.9 $ 42.5
Vested or expected to vest 23,544 $ 12.69 8.9 $ 42.5
Exercisable at December 31, 2008 11,458 $ 17.50 7.9 $ 1.3
The weighted-average grant-date fair value of options granted during the year ended December 31, 2008 and the eight months ended December 31,
2007 was $4.86 and $10.82, respectively. The total intrinsic value of options exercised during the year ended December 31, 2008 was $0.1 million and Delta
received $0.4 million in cash from the exercise of those options. No options were exercised during the eight months ended December 31, 2007.
Performance Shares. Performance shares are long-term incentive opportunities which are payable in common stock and are generally contingent upon
our achieving certain financial goals. During 2008 and 2007, we granted performance shares with an aggregate target payout opportunity covering
approximately two million shares of common stock. The closing of the Merger caused the vesting at target of substantially all previously unvested
performance shares.
F-59