EXHIBIT 10.2
DELTA 2000 PERFORMANCE COMPENSATION PLAN
NON-QUALIFIED STOCK OPTION AWARD AGREEMENT
JANUARY 24, 2002
PARTICIPANT NAME
The Delta 2000 Performance Compensation Plan ("Plan") is an incentive
compensation plan for officers and key employees of Delta Air Lines, Inc.
("Delta") and its Subsidiaries. The Plan is administered by the Personnel &
Compensation Committee of Delta's Board of Directors ("Committee"). Words
beginning with a capital letter which are used but not otherwise defined in
this Agreement have the meaning set forth in the Plan.
The Committee has selected you to receive an award of Non-Qualified Stock
Options, as follows:
NUMBER OF STOCK OPTIONS XX,XXX Stock Options. Each Stock Option may
AWARDED: be exercised for one share of Delta common
stock as provided below.
AWARD DATE: January 24, 2002
OPTION EXERCISE PRICE: $32.02, which was the closing price of
Delta Common Stock on the New York Stock
Exchange on January 24, 2002.
EXERCISE PERIOD: General Rule. Subject to the terms and
conditions of the Plan and the Rules For
Non-Qualified Stock Options Granted On
January 24, 2002 ("Rules"),
(1) 50% of the number of Stock Options
granted pursuant to this Agreement
shall become exercisable on each
of January 24, 2003 and January
24, 2004; and
(2) your Stock Options shall remain
exercisable through and including
January 23, 2012.
Special Rules. The Rules contain the
Special Rules, which result in the
following upon the occurrence of specified
events:
(1) change in the period during which
your Stock Options may be
exercised; and/or
(2) forfeiture of your Stock Options.
In no event may any of your Stock Options
be exercised after January 23, 2012.
Also see the Prospectus and the Rules for other information about your award.
The Prospectus tells you how to access the Rules and the Plan on the Delta
intranet site and how to receive paper copies of these documents if you prefer.
The Rules tell you how and when your Stock Options may be exercised; the
process you will follow to exercise your Stock Options, including how to
contact the agent that administers certain exercises of Stock Options under the
Plan (currently the agent is Xxxxxxx Xxxxx Xxxxxx); and the methods available
to pay the Option Exercise Price and/or to satisfy tax withholding due
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This document constitutes part of a prospectus covering securities that have
been registered under the Securities Act of 1933.
at the time you exercise Stock Options. Delta may from time to time change the
process for exercising Stock Options, including changing the method(s) that you
may use to pay the Option Exercise Price and satisfy the tax withholding
requirements. If you do not comply with the applicable requirements, Delta and
the agent may refuse to process exercises of your Stock Options.
By signing this Agreement:
(a) you acknowledge that you have had a full and adequate
opportunity to read this Agreement and the Prospectus for
Non-Qualified Stock Options dated January 24, 2002 which was
delivered to you with this Agreement;
(b) you acknowledge that you have received and had a full and
adequate opportunity to read the Plan and the Rules;
(c) you agree -- for yourself and for any designated beneficiary
and for your heirs, executors, administrators and personal
representatives -- to all of the terms and conditions
contained in this Agreement, the Rules, and the Plan; and
(d) you consent to receive all material regarding any awards
under the Plan, including any prospectuses, electronically
with an e-mail notification to your work e-mail address.
Subject to any written executive retention protection agreement signed by you
and Delta, this Agreement, together with the Plan and the Rules (the terms of
which are made a part of this Agreement and are incorporated into this
Agreement by reference), constitute the entire agreement between you and Delta
with respect to the award of your Stock Options. The Plan, the Rules, this
Agreement and all determinations made and actions taken pursuant to any of them
shall be governed by the internal substantive laws, and not the choice of law
rules, of the State of Georgia and construed accordingly, to the extent not
superseded by applicable federal law. If there is any conflict between the Plan
and either or both of the Rules and this Agreement, the Plan shall control; if
there is any conflict between this Agreement and the Rules, the Rules shall
control. Delta may amend this Agreement or the Rules at any time; provided that
no amendment of this Agreement or Part I of the Rules, which impacts any
outstanding Stock Options in a manner adverse to you, shall be made without
your written consent.
This Agreement has been executed in duplicate. Please note your acceptance by
signing below and returning one original to the Vice President - Global Rewards
& Recognition (Dept. 959-ATG) for Delta's records. You and Delta, each
intending to be bound legally, agree to the matters set forth above by signing
this Agreement, all as of January 24, 2002.
DELTA AIR LINES, INC. AWARD RECIPIENT
By: /s/ Xxx X. Xxxxxx By:
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Xxx X. Xxxxxx
Chairman of the Board and
Chief Executive Officer
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DELTA 2000 PERFORMANCE COMPENSATION PLAN
RULES FOR NON-QUALIFIED STOCK OPTIONS
GRANTED ON JANUARY 24, 2002
These Rules apply to all Non-Qualified Stock Options granted on January 24,
2002 under the Delta 2000 Performance Compensation Plan ("Plan"). These Rules
contain important information about those awards, and should be read in
conjunction with the Plan, your Non-Qualified Stock Option Award Agreement
dated January 24, 2002 ("your Award Agreement") and the Non-Qualified Stock
Option Prospectus dated January 24, 2002. Words beginning with a capital letter
and not otherwise defined in these Rules shall have the meaning set forth in
the Plan.
Delta may amend Part I and Part II of these Rules at any time; provided that no
amendment of Part I of these Rules which impacts your outstanding Stock Options
in a manner adverse to you shall be made without your written consent.
PART I. SUBSTANTIVE RULES
A. STOCK OPTION EXERCISE PERIOD - GENERAL RULE
The General Rule regarding the period during which you may exercise
your Stock Options is set forth in your Award Agreement ("General Rule"). The
General Rule is subject to the terms and conditions of the Plan and the Special
Rules in Paragraph I.B. below ("Special Rules").
B. STOCK OPTION EXERCISE PERIOD - SPECIAL RULES
As discussed below, the Special Rules in this Paragraph I.B. change
the period during which you may exercise your Stock Options, and/or result in
the forfeiture of your Stock Options, whether or not your Stock Options are
then exercisable under the General Rule. The Special Rules apply only to the
extent your Stock Options have not previously been exercised, forfeited or
revoked. Specifically, the General Rule is subject to the following terms and
conditions:
1. Definitions - Employment with Delta. For purposes of this
Paragraph I.B., (i) employment with Delta includes employment with any
Subsidiary of Delta; and (ii) termination of employment with Delta
means you are no longer an employee of Delta or any of its
Subsidiaries.
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This document constitutes part of a prospectus covering securities that have
been registered under the Securities Act of 1933.
2. Termination of Employment Before January 24, 2003 Because of
Retirement. If your employment with Delta terminates before January
24, 2003 due to Retirement, your Stock Options shall be forfeited at
the time of such termination of employment.
3. Termination of Employment On or After January 24, 2003
Because of Retirement. If your employment with Delta terminates on or
after January 24, 2003 due to Retirement, your Stock Options may be
exercised, in whole or in part, only during the period (i) beginning
on the date your employment with Delta terminates due to Retirement;
and (ii) ending on and including the earlier of (A) January 23, 2012
or (B) the third anniversary of the date your employment with Delta
terminates due to Retirement.
4. Termination of Employment Because of Disability. If your
employment with Delta terminates due to Disability, your Stock Options
may be exercised, in whole or in part, only during the period (i)
beginning on the later of (A) January 24, 2003 or (B) the date your
employment with Delta terminates due to Disability; and (ii) ending on
and including the earlier of (A) January 23, 2012 or (B) the third
anniversary of the date your employment with Delta terminates due to
Disability.
5. Termination of Employment Because of Death. If you die while
employed by Delta, your Stock Options may be exercised, in whole or in
part, only during the period (i) beginning on the date of your death;
and (ii) ending on and including the earlier of (A) January 23, 2012
or (B) the third anniversary of the date of your death.
6. Death After Termination of Employment Because of Disability.
If you die after your employment with Delta terminates due to
Disability, your Stock Options may be exercised, in whole or in part,
only during the period (i) beginning on the date of your death; and
(ii) ending on and including the earlier of (A) January 23, 2012 or
(B) the third anniversary of the date your employment with Delta
terminates due to Disability.
7. Termination of Employment for Reasons Other Than Retirement,
Disability or Death. If your employment with Delta terminates for any
reason other than Retirement, Disability or death, your Stock Options
shall be forfeited at the time of such termination of employment.
8. Non-Competition Agreement - Termination of Employment On or
After January 24, 2003 Because of Early Retirement. If (i) your
employment with Delta terminates on or after January 24, 2003 due to
Retirement prior to age 65, if you are not then on the pilot seniority
list of Delta or any of its Subsidiaries, or age 60, if you are then
on such a seniority list, and (ii) within two years after such
Retirement and without the Committee's approval, you directly or
indirectly provide management or executive services (whether as a
consultant, advisor, officer or director) to any person or entity in
direct and substantial competition with the air transportation
business of Delta or its Subsidiaries, then your Stock Options shall
be forfeited at the time you first provide such management or
executive services. Because of the broad and extensive scope of
Delta's air transportation business, you acknowledge that the
restrictions in this Paragraph I.B.8.
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are intended to extend to management or executive services which are
directly related to the provision of air transportation services into,
within or from the United States, as no smaller geographical
restriction will adequately protect the legitimate business interests
of Delta.
9. Demotion. If, prior to January 24, 2004, you voluntarily
suggest and then accept a demotion, or are involuntarily demoted, to a
position with Delta or any of its Subsidiaries involving lesser
responsibilities than those of the job held by you on January 24,
2002, the Committee may in its sole discretion, not later than six
months from the date of the demotion, modify or revoke your Stock
Options in any manner it deems appropriate under the circumstances.
The Committee will determine in its sole discretion what constitutes a
demotion to a job involving lesser responsibilities under this
Paragraph I.B.9.
10. Change In Control. If a Change In Control (as defined in the
Plan) occurs, your outstanding Stock Options shall become immediately
exercisable, vested and nonforfeitable.
PART II. ADMINISTRATIVE RULES
A. OVERVIEW
The process for exercising Stock Options varies depending on the
manner in which you pay the Option Exercise Price and make certain other
required payments. As discussed below, there are currently three ways to
exercise your Stock Options: the Cash Purchase Method; the Cashless Exercise
Method; and the Share Tender Method. Delta has retained Xxxxxxx Xxxxx Barney
Inc. ("SSB") to process Stock Option exercise requests under the Cash Purchase
Method and the Cashless Exercise Method; Delta processes Stock Option exercise
requests under the Share Tender Method.
B. REQUIRED PAYMENTS
To exercise your Stock Options, you are required to make the following
payments:
- Option Exercise Price. You must pay the Option Exercise Price
for each Stock Option you exercise.
- Withholding Taxes. You must pay required withholding taxes.
When you exercise Stock Options, you realize ordinary
compensation income equal to the excess of the fair market
value of the Delta common stock acquired on the date of
exercise over the Option Exercise Price. Delta is required to
comply with applicable income tax withholding requirements
with respect to that amount.
- Other Costs. If you use the Cashless Exercise Method, you
must pay SSB a brokerage commission for selling shares of
Delta common stock on your behalf
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and certain administrative charges. There are no such charges
under the Cash Purchase Method or the Share Tender Method.
C. STOCK OPTION EXERCISE METHODS
You may exercise your Stock Options using any of the following three
methods:
1. Cash Purchase Method. Under the Cash Purchase Method, you pay
SSB the Option Exercise Price and required withholding taxes from your
own funds before you exercise your Stock Options. The payment must be
made by a check payable to Xxxxxxx Xxxxx Xxxxxx Inc. or by electronic
funds transfer. It must be received by SSB before your Stock Option
exercise request will be processed. SSB will credit your SSB brokerage
account with the shares of Delta common stock you received from your
Stock Option exercise.
2. Cashless Exercise Method. The Cashless Exercise Method allows
you to exercise your Stock Options without paying out any cash of your
own. That is why it is called "cashless." In effect, you pay the
Option Exercise Price, required withholding taxes and other costs by
using your "gain" -- the excess of the fair market value of the Delta
common stock acquired on the date of exercise over the Option Exercise
Price.
There are two types of Cashless Exercises: Exercise and Sell;
and Sell-to-Cover.
- Under the Exercise and Sell Method, you instruct SSB
to sell all shares of Delta common stock acquired
from the exercise of your Stock Options. The
proceeds of this sale will be used to pay the Option
Exercise Price, required withholding taxes and other
applicable costs. SSB will send you a check for the
net proceeds.
- Under the Sell-to-Cover Method, SSB will (1)
estimate the number of shares of Delta common stock
that needs to be sold to pay the Option Exercise
Price, required withholding taxes and other costs;
(2) sell on your behalf that estimated number of
shares from the Delta common stock you are acquiring
pursuant to the Stock Option exercise; and (3) use
the proceeds from that sale to make the required
payments. SSB will credit your brokerage account
with the remaining shares of Delta common stock, and
any remaining cash proceeds.
3. Share Tender Method. Under the Share Tender Method, you pay
the Option Exercise Price by using unrestricted shares of Delta common
stock (i) that you have owned for at least six months; and (ii) that
have a Fair Market Value on the date of your Stock Option exercise
equal to the Option Exercise Price. Under this method, you do not make
a physical delivery of your previously owned shares of Delta common
stock, but instead use a process called "attestation." Attestation
does not involve any physical movement of stock certificates. Rather,
you provide to Delta on the appropriate form the stock certificate
number for the attested shares if you hold the shares in your own
name,
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or the name and number of your account if your broker or bank holds
the attested shares on your behalf. This information allows
verification (i) that you own the shares being attested; (ii) that the
shares are unrestricted; and (iii) that you have owned the shares for
at least six months. Providing incorrect information may result in
disqualification of the Stock Option exercise and/or disciplinary
action.
Under the Share Tender Method, Delta will deduct from the shares you
acquired from your Stock Option exercise the number of (i) attested
shares used to pay the Option Exercise Price; and (ii) the shares
necessary to satisfy tax withholding requirements. You will receive
the net number of shares.
Please note that you may not exercise your Stock Options by attesting
shares that you have attested during the previous six months.
D. STOCK OPTION EXERCISE PROCEDURES
1. Cash Purchase Method or Cashless Exercise Method. To exercise
your Stock Options using the Cash Purchase or Cashless Exercise
Method, you must first open a brokerage account with SSB and then
submit a Stock Option exercise request to SSB in accordance with its
procedures. You may contact SSB as follows:
Xxxxxxx Xxxxx Barney Inc.
Attention Stock Plan Services
X.X. Xxx 0000
Xxx Xxxx, XX 00000
Telephone: 000 000-0000 (in the U.S.)
212 503-1809 (outside the U.S.)
Voice Response Information: 000 000-0000
Internet Information: xxxx://xxx.xxxxxxxxxxxxx.xxx
2. Share Tender Method. To exercise your Stock Options using the
Share Tender Method, please contact Delta as follows:
Xxxxx Xxxxxxx
Specialist - Executive Rewards
0000 Xxxxx Xxxxxxxxx, Xxxxxxxxxx 000
Xxxxxxx, Xxxxxxx 00000-0000
Telephone: 000 000-0000
Fax: 000 000-0000
email: xxxxx.xxxxxxx@xxxxx.xxx
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E. TRANSFERABILITY OF STOCK OPTIONS
Your Stock Options are not transferable otherwise than by will, by the
laws of descent and distribution, or by a written designation referred to in
Section 8.5 of the Plan, and are exercisable during your lifetime only by you.
In the event that your Stock Options are to be exercised by any person other
than you, such person shall provide appropriate proof of his or her right to
exercise your Stock Options.
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