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U.S. Trust suspends sale of DL ESOP common stock 11/19/04

U.S. Trust, the independent fiduciary investment manager for two components of Delta’s Family Care Savings Plan, has suspended the sale of Delta common stock held in the Employee Stock Ownership Plan (ESOP). U.S. Trust said the decision was made “in light of the developments that have taken place over the past few weeks and the favorable response the market has had to these developments.” These include the contract agreement with Delta pilots and the additional cash commitments from American Express and GE Commercial Finance.

U.S. Trust has directed Fidelity to invest most of the cash generated from the initial sale of the ESOP common stock, which began in September, into the Fidelity Retirement Money Market Portfolio (FRMMP), one of the investment options under the Plan. Fidelity has indicated that the transfer of funds from the ESOP and into the FRMMP will be completed during the week of Nov. 21, 2004. In accordance with the Plan, once a participant’s share of the excess cash in the ESOP is invested in the FRMMP, the participant will be able to move those funds to any other investment alternative in the Savings Plan.

 “While no action is required on the part of participants, they can decide whether to keep these funds in the Fidelity Retirement Money Market Portfolio or direct all or part of the funds to other investment options offered under the Savings Plan,” said Rob Kight, managing director-Global Benefits and Health Resources. Click here [LINK] for a list of questions and answers. For more information, contact Fidelity toll-free at 800-554-0262.

 Q&A – U.S. Trust suspends stock sale

Q1. Why has U.S. Trust suspended the sale of common stock in the ESOP?
A1. In a recent letter to Delta’s legal department, U. S. Trust stated that it had decided to take this action “in light of the developments that have taken place over the past few weeks and the favorable response the market has had to these developments.” The “developments” that US Trust referred to included the then-tentative agreement with the pilots and the additional cash commitments from American Express and GE Commercial Finance. 

Q2. How does this action by U.S. Trust affect me?  Delta?
A2. This action will not have a significant affect on you or Delta. The ESOP will continue to operate according to the terms of the Savings Plan. You will continue to hold interests in common stock in the ESOP as well as preferred stock and additional shares of common stock and preferred stock may be added to your account in connection with Delta’s contribution. 

Q3. What happened to the proceeds of the stock sale?
A3. The proceeds are currently being held in the ESOP in a money market account. Shortly, however, U.S. Trust has directed Fidelity to transfer a substantial portion of these proceeds to the Fidelity Retirement Money Market Portfolio, an investment option offered under the Delta Family Care Savings Plan. This transfer will be completed the week of Nov. 21, 2004.

Q4. Why won’t all of the proceeds be transferred to the Fidelity Retirement Money Market Portfolio?
A4. The ESOP is now “unitized” in the same manner as the Delta Stock Fund. Therefore, you hold units in the ESOP that are composed of common stock and cash. Because of this, a certain amount of the cash proceeds must be retained in the ESOP.

Q5. As an ESOP participant, what do I need to do with my share of the excess cash in the Fidelity Retirement Money Market Portfolio?
A5. You should evaluate whether you should retain these funds in the Fidelity Retirement Money Market Portfolio or whether you should direct all or part of those funds to other investment options offered under the Savings Plan.

Q6. How do I redirect the funds in the Fidelity Retirement Money Market Portfolio?
A6. You can redirect these funds in the same manner as you can redirect your investments in any of the investment alternatives offered under the Savings Plan.  If you need more information about this you can go to Fidelity online at www.fidelity.com, or call them toll-free at 800-554-0262.

Q7. Who can I call for more information about my ESOP account?
A7. If you have questions involving the investment management decisions made by U.S. Trust, you may e-mail your questions to delta_airlines@ustrust.com. Fidelity should be able to answer any other questions you have regarding your ESOP account.

Q8. Does this mean I can sell or diversify more of my ESOP account, including the rest of my common shares and my preferred shares?
A8. No. This does not have an effect on the general rules regarding distribution and diversification. The only time you can receive a disbursement from the ESOP is at the time your employment terminates. You may diversify a portion of your ESOP holdings into other Plan investment options only if you are 55 years old and have at least 10 years of service with Delta.  More details on this option can be found online at www.fidelity.com.

Q9. Can/will U.S. Trust again sell shares of common stock in the ESOP?
A9. U.S. Trust has the authority to recommence selling the shares of common stock in the ESOP. Only U.S. Trust can make this decision, and Delta does not know in advance whether they will.

Q10. Where can I get more information about Delta’s independent fiduciary?
A10. Information is posted on the Employee Connection under Benefits and Retirement/401(k).