EXHIBIT 10.3
DELTA AIR LINES, INC.
FIRST AMENDMENT
TO
2000 PERFORMANCE COMPENSATION PLAN
THIS FIRST AMENDMENT ("Amendment") to the Delta Air Lines, Inc. 2000
Performance Compensation Plan (the "Plan") amends the Plan effective as of such
time as this Amendment is approved by the shareowners of Delta. Capitalized
terms not otherwise defined herein will have the meaning ascribed to such terms
in the Plan.
1. Section 4.2 of the Plan is amended and restated to read in its entirety
as follows:
"4.2 Counting Rules. Shares of Delta Common Stock issued, or
reserved for issuance, under the Plan pursuant to an Award granted on or
after October 25, 2000, shall be subtracted from the number of shares
available for issuance under the Plan. Shares of Delta Common Stock
obtained from the following sources shall be added to the total number of
shares available for issuance under the Plan:
a. shares tendered (actually or by attestation) in payment of the
Option Exercise Price upon exercise of a Stock Option or
otherwise to exercise an Award;
b. shares withheld or tendered (actually or by attestation) for
taxes upon exercise of a Stock Option, lapse of restrictions
on Restricted Stock, or otherwise in connection with an Award;
c. if all or part of an Award is settled in cash rather than in
shares of Delta Common Stock, then the number of shares that
had been subtracted but are not issued pursuant to such Award,
shall be added back; and
d. shares relating to an Award that is forfeited or becomes void,
including, without limitation, shares that were subject to a
Stock Option that is forfeited before it is exercised, or
Restricted Stock or an Other Equity-Based Award that is
forfeited, and shares subject to Stock Options that are
cancelled pursuant to the Stock Option Exchange Program (as
defined in Article 9 hereof).
The preceding sentence shall also apply to shares that on or after
October 25, 2000 are tendered, withheld, settled in cash or forfeited, or
cancelled pursuant to the Stock Option Exchange Program (as defined in
Article 9 hereof),
in respect of awards granted under the 1989 Stock Incentive Plan, which
are outstanding on October 25, 2000."
2. Section 6.3.2 of the Plan is amended and restated to read in its
entirety as follows:
"6.3.2 Shareowner Approval Required For Certain Amendments.
Shareowner approval will be required for any amendment of the Plan that
does any of the following:
a. permits the grant of any Stock Option with an Option Exercise
Price less than Fair Market Value on the date of grant;
b. reduces the Option Exercise Price of an outstanding Stock
Option, either by lowering the Option Exercise Price or by
canceling an outstanding Stock Option and granting a
replacement Stock Option with a lower Option Exercise Price;
or
c. extends the Regular Expiration Date for exercise of any Stock
Option;
provided, however, that shareowner approval shall not be required for the
Stock Option Exchange Program (as defined in Article 9 hereof)."
3. The Plan is amended to add the following Article 9 which reads in its
entirety as follows:
"ARTICLE 9. STOCK OPTION EXCHANGE PROGRAM
9.1 In General. At such time as the Committee determines advisable,
Delta will be permitted (but not required) to offer certain Employees, who
are not members of the Board of Directors of Delta and who shall otherwise
be designated by the Committee in its sole discretion ("Eligible
Participants"), who hold Eligible Options (as defined below), a one-time
opportunity to elect to surrender all or a portion, as specified below, of
their Eligible Options for cancellation ("Surrendered Options") in
exchange for the grant of replacement Non-Qualified Stock Options to be
granted under the Plan ("Replacement Options") on a date to be determined
by the Committee that is no less than six months and one day following the
cancellation of such Surrendered Options (such exchange, the "Stock Option
Exchange Program"). The Stock Option Exchange Program and the Replacement
Options shall have the terms and conditions set forth or provided for in
this Article 9. Except to the extent otherwise determined by the
Committee, the Stock Option Exchange Program will be structured so that
Delta avoids incurring financial accounting charges as a result thereof.
To participate in the Stock Option Exchange Program and receive a
grant of Replacement Options, an Eligible Participant who surrenders for
cancellation any Eligible Options (i) having a date of grant in the period
beginning January 1,
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1995 through and including December 31, 1999, must surrender all his or
her Eligible Options having dates of grant in that period, (ii) having a
date of grant in the period beginning January 1, 2000 through and
including December 31, 2001, must surrender all his or her Eligible
Options having dates of grant in that period and (iii) having a date of
grant in the period beginning January 1, 2002 through and including
December 31, 2002, must surrender all his or her Eligible Options having a
date of grant in that period.
To participate in the Stock Option Exchange Program and receive any
grant of Replacement Options, an Employee must be an Eligible Participant
on each of the following dates: (i) the date the Stock Option Exchange
Program commences, (ii) the date the period during which Surrendered
Options may be surrendered for cancellation pursuant to the Stock Option
Exchange Program expires and (iii) the date of grant of the Replacement
Options.
9.2 Eligible Options. For purposes of the Stock Option Exchange
Program, the term "Eligible Option" shall mean an outstanding
Non-Qualified Stock Option granted under the Plan or a non-qualified stock
option granted under Delta's 1989 Stock Incentive Plan on or after January
1, 1995 that has, in either case, an Option Exercise Price or an exercise
price, as the case may be, equal to or in excess of $25.00 per share.
9.3 Exchange Ratio. The number of Replacement Options that will be
granted in exchange for Surrendered Options to Eligible Participants who
are not named executive officers of Delta designated in the Summary
Compensation Table of Delta's 2003 Proxy Statement ("NEOs") shall be
determined in accordance with the following table, which sets forth the
number of Surrendered Options that must be exchanged for a Replacement
Option, based on the grant date of the Surrendered Option, subject to any
adjustments for transactions or events as specified in Sections 4.3 or 4.4
of the Plan:
GRANT DATE EXCHANGE RATIO
---------- --------------
January 1, 1995-December 31, 1999 3-for-1
January 1, 2000-December 31, 2001 2-for-1
January 1-December 31, 2002 1.5-for-1
The number of Replacement Options that will be granted in exchange
for Surrendered Options to Eligible Participants who are NEOs shall be
equal to 90% of the number of Replacement Options they would otherwise
receive by application of the applicable exchange ratio set forth in the
table above.
Notwithstanding the foregoing, if the number of Replacement Options
as determined in accordance with the foregoing is a fractional number,
such fractional number will be rounded up to the nearest whole number for
the purpose of determining the number of such Replacement Options.
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Subject to the second paragraph of this Section 9.3, determining the
number of Replacement Options to be granted in exchange for Surrendered
Options, the applicable exchange ratio set forth in the table above shall
be applied separately to Surrendered Options having the same date of grant
and the resulting number of Replacement Options shall then be rounded in
accordance with the foregoing.
9.4 Terms of Replacement Options. Notwithstanding any other
provision of the Plan, Replacement Options shall have the following terms:
9.4.1. Exercise Price. The price at which a share of Stock
covered by a Replacement Option may be purchased shall be the closing
price of the Stock on the New York Stock Exchange on the date of grant, if
the date is a trading day, and, if not, on the previous trading day.
9.4.2. Option Exercise Period and Term. Except as provided in
the following sentence with respect to surrendered Options originally
granted in 1995 and in rules or conditions applicable to the Stock Option
Exchange Program and Replacement Options prescribed or established by the
Committee, Replacement Options granted to an Eligible Participant who is
not an NEO shall become exercisable with respect to 50% of such
Replacement Options, rounded up to the nearest number of whole shares, on
the first anniversary of the date of grant and with respect to all
remaining Replacement Options on the second anniversary of the date of
grant. All Replacement Options granted to an Eligible Participant who is
not an NEO in exchange for Surrendered Options originally granted in 1995
shall become exercisable on the first anniversary of the date of grant.
Replacement Options granted to NEOs shall become exercisable with respect
to 25% of such Replacement Options on each of the first, second and third
anniversaries of the date of grant, in each case rounded up to the nearest
number of whole shares, and with respect to all remaining Replacement
Options on the fourth anniversary of the date of grant. Subject to the
terms and conditions of the Plan and rules prescribed by the Committee
applicable to the Replacement Options, each Replacement Option, once it
becomes exercisable, will be exercisable through and including the
remaining term of the Surrendered Options in exchange for which it is
granted and for an additional period of time beyond such remaining term
equal to the period of time from the date of cancellation of such
Surrendered Options through and including the date of grant of such
Replacement Options. Following the period for which a Replacement Option
is exercisable, such Replacement Option shall expire and no shares of
Delta Common Stock may be purchased.
9.4.3 Other Terms and Conditions. Shares of Delta Common Stock
acquired by NEOs upon exercise of their Replacement Options may not be
sold for one year following such acquisition, except that this restriction
shall not apply to such shares of Delta Common Stock sold in connection
with the payment
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of the Option Exercise Price or minimum required tax withholding
obligations in accordance with the terms of the Plan or sold to pay
related brokerage commissions. In addition, this restriction shall
terminate and be of no further force or effect upon a Change in Control
and, with respect to replacement options held by an NEO, upon such NEO's
death, Retirement at age 62 or later or termination in the case of
Disability. All of the terms and conditions of the Replacement Options not
set forth herein will be determined by the Committee in accordance with
the provisions hereof.
9.4.4. Non-Qualified Options. All Replacement Options shall be
deemed "non-qualified" for purposes of the Internal Revenue Code of 1986,
as amended from time to time, and any successor thereto.
9.5 Administration. In addition to the authority of the Committee
set forth in Section 3.2 of the Plan, which authority the Committee shall
have with respect to the Stock Option Exchange Program and the Replacement
Options, the Committee shall have full discretionary authority to
establish rules, terms and conditions for the commencement, continuation
and/or consummation of the Stock Option Exchange Program, to determine the
extent to which the Stock Option Exchange Program will result in Delta
incurring financial accounting charges and to adopt such further rules,
terms and conditions relating to the Stock Option Exchange Program and the
Replacement Options that are consistent with the provisions set forth in
this Article 9, including, without limitation, provisions specifying
and/or limiting the Eligible Participants. The Committee will have total
and exclusive responsibility to control, operate, manage and administer
the Stock Option Exchange Program in accordance with its terms and
conditions and all the authority that may be necessary or helpful to
enable it to discharge its responsibilities with respect to the Stock
Option Exchange Program. Without limiting the generality of the preceding
sentences, the Committee will have the exclusive right to interpret the
Stock Option Exchange Program, decide all questions concerning eligibility
for and the terms of the exchange pursuant to the Stock Option Exchange
Program, construe any ambiguous provision of the Stock Option Exchange
Program, correct any default, supply any omission, reconcile any
inconsistency, and decide all questions arising in the administration,
interpretation and application of the Stock Option Exchange Program. The
Committee will have full discretionary authority in all matters related to
the discharge of its responsibilities and the exercise of its authority
under the Program, including, without limitation, its construction of the
terms of the Stock Option Exchange Program. It is the intent of the Stock
Option Exchange Program that the decisions of the Committee and its
actions with respect to the Stock Option Exchange Program will be final
and binding upon all persons having or claiming to have any right or
interest in or under the Stock Option Exchange Program.
Without limiting the generality of the foregoing, the Committee
shall have the right in its sole discretion to provide for such
modifications and additional
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terms and conditions ("special terms") to the Stock Option Exchange
Program as the Committee may consider necessary or appropriate to
accommodate differences in local law, policy or custom, or to facilitate
administration of the Stock Option Exchange Program. The Committee may
adopt or approve sub-plans, appendices or supplements to, or amendments,
restatements, or alternative versions of, the Stock Option Exchange
Program as it may consider necessary or appropriate for purposes of
implementing any special terms, without thereby affecting the terms of the
Stock Option Exchange Program."
4. This Amendment does not supersede the terms and conditions of the Plan,
except to the extent expressly described herein, and the Plan, as amended
hereby, shall remain in full force and effect as so amended. Unless the context
otherwise requires, all references in the Plan and this Amendment to the "Plan"
shall be deemed to be references to the Plan as amended herein.
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