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EXHIBIT 10.2
DELTA AIR LINES, INC.
NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN
[as amended and restated effective March 1, 2001]
SECTION 1. PURPOSE; DEFINITIONS.
The purpose of the "Delta Air Lines, Inc. Non-Employee Directors' Stock Option
Plan" (the "Plan") is to assist Delta Air Lines, Inc. (the "Company") in
attracting and retaining persons of outstanding ability to serve on the Board of
Directors, and to strengthen the alignment of interests between the Board and
the Company's shareowners.
For purposes of the Plan, the following terms shall be defined as set forth
below:
"Affiliate" and "Associate" have the respective meanings accorded to
such terms in Rule 12b-2 under the Exchange Act as in effect on October
22, 1998.
"Beneficial Ownership". A Person shall be deemed the "Beneficial Owner"
of, and shall be deemed to " beneficially own," securities pursuant to
Rule 13d-3 under the Exchange Act as in effect on October 22, 1998.
"Board" or "Board of Directors" means the Board of Directors of the
Company, and "Director" means a member of the Board.
"Change in Control" means, and shall be deemed to have occurred upon,
the first to occur of any of the following events:
(a) Any Person (other than an Excluded Person)
acquires, together with all Affiliates and Associates of such
Person, Beneficial Ownership of securities representing 20% or
more of the combined voting power of the Voting Stock then
outstanding, unless such Person acquires Beneficial Ownership
of 20% or more of the combined voting power of the Voting
Stock then outstanding solely as a result of an acquisition of
Voting Stock by the Company which, by reducing the Voting
Stock outstanding, increases the proportionate Voting Stock
beneficially owned by such Person (together with all
Affiliates and Associates of such Person) to 20% or more of
the combined voting power of the Voting Stock then
outstanding; provided, that if a Person shall become the
Beneficial Owner of 20% or more of the combined voting power
of the Voting Stock then outstanding by reason of such Voting
Stock acquisition by the Company and shall thereafter become
the Beneficial Owner of any additional Voting Stock which
causes the proportionate voting power of Voting Stock
beneficially owned by such Person to increase to 20% or more
of the combined voting power of the Voting Stock then
outstanding, such Person shall, upon becoming the Beneficial
Owner of such additional Voting Stock, be deemed to have
become the Beneficial Owner of 20% or more of the combined
voting power of the Voting Stock then outstanding other than
solely as a result of such Voting Stock acquisition by the
Company;
(b) During any period of two consecutive years (not
including any period prior to October 22, 1998), individuals
who at the beginning of such period constitute the Board
This document constitutes part of a prospectus regarding securities that are
registered under the Securities Act of 1933.
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(and any new Director, whose election by the Board or
nomination for election by the Company's shareowners was
approved by a vote of at least two-thirds of the Directors
then still in office who either were Directors at the
beginning of the period or whose election or nomination for
election was so approved), cease for any reason to constitute
a majority of Directors then constituting the Board;
(c) A reorganization, merger or consolidation of the
Company is consummated, in each case, unless, immediately
following such reorganization, merger or consolidation, (i)
more than 50% of, respectively, the then outstanding shares of
common stock of the corporation resulting from such
reorganization, merger or consolidation and the combined
voting power of the then outstanding voting securities of such
corporation entitled to vote generally in the election of
directors is then beneficially owned, directly or indirectly,
by all or substantially all of the individuals and entities
who were the beneficial owners of the Voting Stock outstanding
immediately prior to such reorganization, merger or
consolidation, (ii) no Person (but excluding for this purpose
any Excluded Person and any Person beneficially owning,
immediately prior to such reorganization, merger or
consolidation, directly or indirectly, 20% or more of the
voting power of the outstanding Voting Stock) beneficially
owns, directly or indirectly, 20% or more of, respectively,
the then outstanding shares of common stock of the corporation
resulting from such reorganization, merger or consolidation or
the combined voting power of the then outstanding voting
securities of such corporation entitled to vote generally in
the election of directors and (iii) at least a majority of the
members of the board of directors of the corporation resulting
from such reorganization, merger or consolidation were members
of the Board at the time of the execution of the initial
agreement providing for such reorganization, merger or
consolidation; or
(d) The shareowners of the Company approve (i) a
complete liquidation or dissolution of the Company or (ii) the
sale or other disposition of all or substantially all of the
assets of the Company, other than to any corporation with
respect to which, immediately following such sale or other
disposition, (A) more than 50% of, respectively, the then
outstanding shares of common stock of such corporation and the
combined voting power of the then outstanding voting
securities of such corporation entitled to vote generally in
the election of directors is then beneficially owned, directly
or indirectly, by all or substantially all of the individuals
and entities who were the beneficial owners of the Voting
Stock outstanding immediately prior to such sale or other
disposition of assets, (B) no Person (but excluding for this
purpose any Excluded Person and any Person beneficially
owning, immediately prior to such sale or other disposition,
directly or indirectly, 20% or more of the voting power of the
outstanding Voting Stock) beneficially owns, directly or
indirectly, 20% or more of, respectively, the then outstanding
shares of common stock of such corporation or the combined
voting power of the then outstanding voting securities of such
corporation entitled to vote generally in the election of
directors and (C) at least a majority of the members of the
board of directors of such corporation were members of the
Board at the time of the execution of the initial agreement or
action of the Board providing for such sale or other
disposition of assets of the Company.
Notwithstanding the foregoing, in no event shall a Change in Control be
deemed to have occurred (i) as a result of the formation of a Holding
Company, or (ii) with respect to a Participant, if Participant is part
of a "group," within the meaning of Section 13(d)(3) of the
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Exchange Act as in effect on October 22, 1998, which consummates the
Change in Control transaction. In addition, for purposes of the
definition of Change in Control a Person engaged in business as an
underwriter of securities shall not be deemed to be the Beneficial
Owner of, or to "beneficially own," any securities acquired through
such Person's participation in good faith in a firm commitment
underwriting until the expiration of forty days after the date of such
acquisition.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and any successor thereto.
"Committee" means the Committee referred to in Section 2 of the Plan.
The functions of the Committee specified in the Plan may be exercised
by the Board at any time.
"Disability" means a physical or mental condition that prevents the
Participant from performing his duties as a member of the Board for a
period expected to exceed six consecutive months.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, and any successor thereto.
"Excluded Person" means (i) the Company; (ii) any of the Company's
Subsidiaries; (iii) any Holding Company; (iv) any employee benefit plan
of the Company, any of its Subsidiaries or a Holding Company; or (v)
any Person organized, appointed or established by the Company, any of
its Subsidiaries or a Holding Company for or pursuant to the terms of
any plan described in clause (iv).
"Fair Market Value" means, as of any given date, the opening or closing
price, as determined by the Committee, of the Stock on the New York
Stock Exchange or, if no sale of Stock occurs on the New York Stock
Exchange on such date, the opening or closing price, as determined by
the Committee, of the Stock on said exchange on the last preceding day
on which such sale occurred.
"Family Member" means any child, stepchild, grandchild, stepgrandchild,
parent, stepparent, grandparent, stepgrandparent, spouse, sibling,
niece, nephew, mother-in-law, father-in-law, son-in-law,
daughter-in-law, brother-in-law, or sister-in-law, including adoptive
relationships, any person sharing the Director's household (other than
a tenant or employee), a trust in which these persons (or the Director)
have more than fifty percent of the beneficial interest, a foundation
in which these persons (or the Director) control the management of
assets, and any other entity in which these persons (or the Director)
own more than fifty percent of the voting interests.
"Holding Company" means an entity that becomes a holding company for
the Company or its businesses as a part of any reorganization, merger,
consolidation or other transaction, provided that the outstanding
shares of common stock of such entity and the combined voting power of
the then outstanding voting securities of such entity entitled to vote
generally in the election of directors is, immediately after such
reorganization, merger, consolidation or other transaction,
beneficially owned, directly or indirectly, by all or substantially all
of the individuals and entities who were the beneficial owners,
respectively, of the Voting Stock outstanding immediately prior to such
reorganization, merger, consolidation or other
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transaction in substantially the same proportions as their ownership,
immediately prior to such reorganization, merger, consolidation or
other transaction, of such outstanding Voting Stock.
"Non-employee Director" means a person who, as of any applicable date,
is a member of the Board of Directors and is not an officer or employee
of the Company or any of its Subsidiaries.
"Non-Qualified Stock Option" means a Stock Option granted under Section
5 below which is not intended to be an incentive stock option within
the meaning of Code Section 422.
"Option Price" means the price specified in Section 5 below.
"Participant" means the recipient of an award under the Plan.
"Person" means an individual, corporation, partnership, association,
trust or any other entity or organization.
"Retirement" means retirement from the Board of Directors in accordance
with the retirement policy then applicable to Board members, as
determined by the Board from time to time.
"Stock" means the Company's common stock, par value $1.50 per share,
except that, prior to the close of business on November 2, 1998, Stock
means the Company's common stock, par value $3.00 per share.
"Stock Option" or "Option" means any Non-Qualified Stock Option to
purchase shares of Stock granted pursuant to Section 5 below.
"Subsidiary" of any Person means any other Person of which securities
or other ownership interests having voting power to elect a majority of
the board of directors or other Persons performing similar functions
are at the time directly or indirectly owned by such Person.
"Voting Stock" means securities of the Company entitled to vote
generally in the election of members of the Board.
SECTION 2. ADMINISTRATION.
The Plan shall be administered by a Committee of the Board of Directors,
designated by the Board and to be comprised of not less than two members of the
Board. Each director, while serving as a member of the Committee, shall be
considered to be acting in his capacity as a director of the Company. Members of
the Committee shall be appointed from time to time for such terms as the Board
shall determine, and may be removed by the Board at any time with or without
cause. Subject to the provisions of the Plan, the Committee shall have sole and
complete authority to construe and interpret the Plan, to establish, amend and
rescind appropriate rules and regulations relating to the Plan, to determine the
persons to whom and the time or times at which to grant awards thereunder, to
administer the Plan, and to take all such steps and make all such determinations
in connection with the Plan and the awards granted thereunder as it may deem
necessary or advisable to carry out the provisions and intent of the Plan. All
determinations of the Committee shall be by a majority of its
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members, and its determinations shall be final and conclusive for all purposes
and upon all persons, including but without limitation, the Company, the
Committee, the directors of the Company, the Participants and their respective
successors in interest.
SECTION 3. STOCK SUBJECT TO PLAN.
The total number of shares of Stock reserved and available for distribution
under the Plan shall be 250,000, subject to adjustment as provided in this
Section. Stock distributed under the Plan shall be treasury shares.
If any shares of Stock subject to a Stock Option cease to be subject to such
Option for any reason other than the exercise of such Option, the shares of
Stock previously subject to such Option shall again be available for
distribution in connection with future awards under the Plan.
In the event of any merger, reorganization, consolidation, recapitalization,
Stock dividend, Stock split or other change in corporate structure affecting the
Stock, the Committee, in its sole discretion, shall make such modifications,
substitutions or adjustments as it deems necessary to reflect such change so as
to prevent the deletion or enlargement of rights, including but not limited to,
modifications, substitutions, or adjustments in the aggregate number of shares
reserved for distribution under the Plan, in the number and Option Price of
shares subject to outstanding Options granted under the Plan, and in any
limitation on the aggregate number of awards which may be granted under the
Plan, provided that the number of shares subject to any award shall always be a
whole number.
SECTION 4. ELIGIBILITY.
Only Non-employee Directors are eligible to be granted Stock Options under the
Plan.
SECTION 5. STOCK OPTIONS.
Grant
Subject to the provisions of the Plan, the Committee shall have sole and
complete authority to determine the persons to whom Stock Options may be
granted, the number of shares to be covered by each Stock Option and the
conditions and limitations, if any, in addition to those set forth in this
Section 5, applicable to such Stock Options. Each such award shall be confirmed
by an agreement executed by the Company and the Participant, which agreement
shall contain such provisions as the Committee determines to be necessary or
appropriate to carry out the intent of the Plan with respect to such award.
Option Price
The Committee shall establish the Option Price at the time each Stock Option is
granted, which price shall not be less than 100% of the Fair Market Value of the
Stock on the date of grant. The Option Price shall be the price payable by the
Participant for a share of Stock upon the exercise of a Stock Option. The Option
Price shall be subject to adjustment in accordance with the provisions of
Section 3 hereof.
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Exercise
The Committee shall determine when a Stock Option shall become exerciseable, and
may provide that a Stock Option is exerciseable in installments, provided that
no Stock Option shall be exerciseable earlier than one (1) year or later than
ten (10) years after the date of grant, except that the one (1) year limitation
shall not apply: (a) if a Participant dies prior to one (1) year after the date
of grant; (b) if the Participant's membership on the Board of Directors
terminates for reasons other than death and the Committee decides in its sole
discretion to waive the one (1) year limitation; or (c) if there occurs a Change
in Control.
The Option Price of each share as to which an Option is exercised shall be paid
in full at or before the time of settlement of such exercise. Such payment shall
be made in cash, or, subject to the consent of the Committee and to such
limitations as the Committee may impose, by tender of shares of unrestricted
Stock valued at Fair Market Value as of the date of exercise, or by a
combination of cash and shares of unrestricted Stock.
Transfer Provisions
Any Stock Option granted under the Plan may be transferred in accordance with
this paragraph. Transfers are permitted in the following circumstances (and not
in any other circumstances unless otherwise provided by the Committee):
(1) by a Director by gift to any Family Member,
(2) upon death of a Director or, if the Stock Option has been transferred,
upon the death of the transferee, to the person or persons named in a
written designation by the Participant or transferee and delivered to
the Committee prior to his or her death; or, if there is no such
designation, to the executor or administrator of the Participant's or
transferee's estate or such other personal representative, legatee or
devisee, as may be designated in the Participant's or transferee's last
will and testament; provided that all transfers pursuant to this clause
(2) shall be subject to appropriate documentation.
SECTION 6. CHANGE IN CONTROL.
Upon the occurrence of a Change in Control, all outstanding Stock Options shall
become immediately vested, exerciseable and nonforfeitable, and shall remain
vested, exerciseable and nonforfeitable during their remaining terms.
SECTION 7. SPECIAL RULES REGARDING STOCK OPTION EXERCISE PERIOD.
Unless otherwise determined by the Committee, the following shall apply to
awards under Section 5 of the Plan:
(a) Termination of Board Membership Because of Retirement or Disability. If a
Participant's membership on the Board of Directors terminates because of
Retirement or Disability, any Stock Option held by the Participant (whether or
not exerciseable immediately prior to such termination of Board membership) may
be exercised, in whole or in part, to the extent not previously exercised,
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only during the period (i) beginning on the later of (A) one year after the date
of grant of such Stock Option or (B) the date of termination of Board membership
due to Retirement or Disability; and (ii) ending on and including the earlier of
(A) the last day of the original exercise period remaining under the applicable
award agreement or (B) the third anniversary of the date of termination of Board
membership due to Retirement or Disability.
(b) Termination of Board Membership Because of Death. If a Participant's
membership on the Board of Directors terminates because of death, any Stock
Option held by the Participant (whether or not exerciseable immediately prior to
such termination of Board membership) may be exercised, in whole or in part, to
the extent not previously exercised, only during the period (i) beginning on the
date of death; and (ii) ending on and including the earlier of (A) the last day
of the original exercise period remaining under the applicable award agreement
or (B) the third anniversary of the date of death.
(c) Death After Termination of Board Membership Because of Retirement or
Disability. If a Participant dies after the Participant's membership on the
Board of Directors has terminated because of Retirement or Disability, any Stock
Option held by the Participant (whether or not then exerciseable under Section
7(a) of the Plan) may be exercised, in whole or in part, to the extent not
previously exercised, only during the period (i) beginning on the date of death;
and (ii) ending on and including the earlier of (A) the last day of the original
exercise period remaining under the applicable award agreement or (B) the third
anniversary of the date of termination of Board membership due to Retirement or
Disability.
(d) Termination of Board Membership for Reasons Other than Retirement,
Disability, Death or a Change in Control. If a Participant's membership on the
Board of Directors terminates for any reason other than Retirement, Disability,
death or a Change in Control, the Stock Options held by such Participant, to the
extent not previously exercised, shall be forfeited at the time of such
termination of Board membership.
SECTION 8. AMENDMENTS AND TERMINATION.
The Committee or the Board may amend, alter, or discontinue the Plan at any
time, but no amendment, alteration, or discontinuation shall be made which would
impair the rights of a Participant under a Stock Option theretofore granted,
without the Participant's consent, or which would cause the Plan not to continue
to comply with Rule 16b-3 under the Exchange Act, or any successor to such Rule.
Subject to the above provisions, the Board shall have broad authority to amend
the Plan to take into account changes in applicable securities and tax laws and
accounting rules, as well as other developments.
SECTION 9. GENERAL PROVISIONS.
(a) The Committee may require each person purchasing shares pursuant to a Stock
Option to represent to and agree with the Company in writing that such person is
acquiring the shares without a view to distribution thereof. The certificates
for such shares may include any legend which the Committee deems appropriate to
reflect any restrictions on transfer.
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All certificates for shares of Stock or other securities delivered under the
Plan shall be subject to such stock-transfer orders and other restrictions as
the Committee may deem advisable under the rules, regulations, and other
requirements of the Securities and Exchange Commission, any stock exchange upon
which the Stock is then listed, and any applicable Federal or state securities
law, and the Committee may cause a legend or legends to be put on any such
certificates to make appropriate references to such restrictions. Except as
otherwise provided in the Plan, Participants shall have no rights as shareowners
of Stock covered by a Stock Option prior to the issuance of a Stock certificate
to such Participant.
(b) Nothing contained in this Plan shall prevent the Board from adopting other
or additional compensation arrangements, subject to shareowner approval if such
approval is required; and such arrangements may be either generally applicable
or applicable only in specific cases.
(c) The adoption of the Plan shall not confer any right on any person to
continue as a director of the Company, or interfere in any way with the right of
shareowners of the Company to elect or remove directors.
(d) No later than the date as of which an amount first becomes includible in the
gross income of the Participant for Federal income tax purposes with respect to
a Stock Option award under the Plan, the Participant shall pay to the Company,
or make arrangements satisfactory to the Company regarding the payment of, any
Federal, state, local or foreign taxes of any kind required by law to be
withheld with respect to such amount. Subject to the consent of the Committee
and to such limitations as the Committee may impose, withholding obligations may
be settled with Stock, including Stock that is part of the award that gives rise
to the withholding requirement. The obligations of the Company under the Plan
shall be conditioned on such payment or arrangements and the Company shall, to
the extent permitted by law, have the right to deduct any such taxes from any
payment of any kind otherwise due to the Participant.
Should the Director transfer the Stock Option and should tax withholding apply,
then the Director or the Director's estate shall remain liable for any
withholding tax which may be imposed by any federal, state or local tax
authority; and the issuance of Stock upon exercise of such Stock Option shall be
conditioned on the payment of such withholding tax. The Committee may, in its
sole discretion, delay the transfer of a Stock Option or delay the exercise of
any transferred Stock Option unless and until the Director makes arrangements
satisfactory to the Committee for the payment of any such withholding tax.
(e) Agreements with respect to awards pursuant to the Plan may contain, in
addition to terms and conditions prescribed in the Plan, such other terms and
conditions as the Committee may deem appropriate provided such terms and
conditions are not inconsistent with the provisions of the Plan.
(f) It is the Company's intent that the Plan comply in all respects with Rule
16b-3 under the Exchange Act, and any successor rule thereto.
(g) In the event any provision of the Plan shall be held illegal or invalid for
any reason, the illegality or invalidity shall not affect the remaining parts of
the Plan, and the Plan shall be construed and enforced as if the illegal or
invalid provision had not been included.
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(h) The Plan and all awards made and actions taken thereunder shall be governed
by the laws of the State of Georgia, without regard to the conflict of law
provisions of any state, and shall be construed accordingly.
SECTION 10. EFFECTIVE DATE AND TERM OF PLAN.
The Plan was originally adopted by the Board of Directors of the Company, and
became effective as of October 22, 1998 ("Initial Effective Date"). It was
amended and restated in its present form effective March 1, 2001.
No Stock Option shall be granted pursuant to the Plan on or after the tenth
anniversary of the Initial Effective Date of the Plan, but awards granted prior
to such tenth anniversary may extend beyond that date.
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