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EXHIBIT 3
AMENDMENT NO. 1 TO RIGHTS AGREEMENT
AMENDMENT NO. 1 dated as of July __, 1999 to the Rights Agreement
dated as of October 24, 1996 (the "RIGHTS AGREEMENT") between Delta Air Lines,
Inc., a Delaware corporation (the "COMPANY"), and First Chicago Trust Company
of New York, as Rights Agent (the "RIGHTS AGENT").
W I T N E S S E T H
WHEREAS, the parties hereto desire to amend the Rights Agreement in
certain respects;
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. Defined Terms; References. (a) Unless otherwise
specifically defined herein, each term used herein which is defined in the
Rights Agreement has the meaning assigned to such term in the Rights Agreement.
Each reference to "hereof", "hereunder", "herein" and "hereby" and each other
similar reference and each reference to "this Agreement" and each other similar
reference contained in the Rights Agreement shall, after this Amendment becomes
effective, refer to the Rights Agreement as amended hereby.
(b) Section 1 of the Rights Agreement is hereby amended by restating
in its entirety the definition of "Acquiring Person" to read in full as
follows:
"ACQUIRING PERSON" means any Person who, together with all Affiliates
and Associates of such Person, shall be the Beneficial Owner of 15% or more of
the shares of Common Stock then outstanding, but shall not include an Exempt
Person; provided that (a) if the Board of Directors of the Company determines
(whether prior to or after the date that in the absence of such determination
would be a Distribution Date) in good faith that a Person who would otherwise
be an "Acquiring Person" became such inadvertently (including, without
limitation, because (i) such Person was unaware that it beneficially owned a
percentage of Common Stock that would otherwise cause such Person to be an
"Acquiring Person" or (ii) such Person was aware of the extent of its
Beneficial Ownership of Common Stock but had no actual knowledge of the
consequences of such Beneficial Ownership under this Agreement) and without any
intention of changing or influencing control of the Company, and if such Person
as promptly as practicable (as determined, in good faith, by the Board of
Directors of the Company) divested or divests itself of Beneficial Ownership of
a sufficient number of shares of Common Stock so that such Person would no
longer be an "Acquiring Person", then such Person shall not be deemed to be or
to have become an "Acquiring Person" for any purposes of this Agreement; and
(b) no Person shall become an "Acquiring Person" solely as the result of an
acquisition of shares of Common Stock by the Company which, by reducing the
number of shares outstanding, increases the proportionate number of shares of
Common Stock beneficially owned by such Person to 15% or more of the shares of
Common Stock then outstanding; provided that if a Person shall become
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the Beneficial Owner of 15% or more of the shares of Common Stock then
outstanding by reason of such share acquisition by the Company and shall
thereafter become the Beneficial Owner of any additional shares of Common Stock
(other than pursuant to a dividend or distribution paid or made by the Company
on the outstanding Common Stock or pursuant to a split or subdivision of the
outstanding Common Stock), then such Person shall be deemed to be an "Acquiring
Person" unless upon becoming the Beneficial Owner of such additional shares of
Common Stock such Person does not beneficially own 15% or more of the shares of
Common Stock then outstanding.
(c) Section 1 of the Rights Agreement is hereby amended by restating
in its entirety the definition of "Beneficial Owner" to read in full as
follows:
A Person shall be deemed the "BENEFICIAL OWNER" of, and shall be
deemed to have "Beneficial Ownership" of and to "beneficially own", any
securities:
(a) which such Person or any of its Affiliates or Associates,
directly or indirectly, beneficially owns (as determined pursuant to
Rule 13d-3 under the Exchange Act as in effect on the date hereof);
(b) which such Person or any of its Affiliates or Associates,
directly or indirectly, has
(i) the right to acquire (whether such right is
exercisable immediately or only upon the occurrence of
certain events or the passage of time or both) pursuant to
any agreement, arrangement or understanding (whether or not
in writing) or otherwise; provided that a Person shall not be
deemed the Beneficial Owner of, or to beneficially own, (A)
securities tendered pursuant to a tender or exchange offer
made by or on behalf of such Person or any of such Person's
Affiliates or Associates until such tendered securities are
accepted for purchase, (B) securities which such Person has a
right to acquire upon the exercise of Rights at any time
prior to the time that any Person becomes an Acquiring Person
or (C) securities issuable upon the exercise of Rights from
and after the time that any Person becomes an Acquiring
Person if such Rights were acquired by such Person or any of
such Person's Affiliates or Associates prior to the
Distribution Date or pursuant to Section 3(a) or Section 22
hereof ("ORIGINAL RIGHTS") or pursuant to Section 11(i) or
Section 11(p) with respect to an adjustment to Original
Rights; or
(ii) the right to vote (whether such right is
exercisable immediately or only upon the occurrence of
certain events or the passage of time or both) pursuant to
any agreement, arrangement or understanding (whether or not
in writing) or otherwise; provided that a Person shall not be
deemed the "Beneficial Owner" of or to "beneficially own" any
security under this clause (ii) as a result of an agreement,
arrangement or understanding to vote such security if such
agreement, arrangement or understanding (A) arises solely
from a revocable proxy or consent given in response to a
public proxy or consent solicitation made pursuant to, and in
accordance with, the applicable rules and regulations under
the
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Exchange Act and (B) is not also then reportable by such
Person on Schedule 13D under the Exchange Act (or any
comparable or successor report); or
(c) which are beneficially owned, directly or indirectly, by
any other Person (or any Affiliate or Associate thereof) and with
respect to which such Person or any of its Affiliates or Associates
has any agreement, arrangement or understanding for the purpose of
acquiring, holding, voting (except pursuant to a revocable proxy or
consent as described in subparagraph (b)(ii) immediately above) or
disposing of any such securities;
provided that (x) nothing in paragraphs (a), (b) or (c) of this definition
shall cause a Person engaged in business as an underwriter of securities or as
a member of a selling group 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 and (y) no Person who is an officer,
director or employee of an Exempt Person shall be deemed, solely by reason of
such Person's status or authority as such, to be the "Beneficial Owner" of, to
have "Beneficial Ownership" of or to "beneficially own" any securities that are
"beneficially owned", including, without limitation, in a fiduciary capacity,
by an Exempt Person or by any other such officer, director or employee of an
Exempt Person.
(d) Section 1 of the Rights Agreement is hereby amended by deleting
the definition of "Continuing Director" contained therein.
(e) Section 1 of the Rights Agreement is hereby amended by deleting
from the definition of "Distribution Date" the first instance of the words "(or
such later day as may be designated by action of a majority of the Continuing
Directors)" and replacing the second instance of such words with "(or such
later day as may be designated prior to the occurrence of a Section 11(a)(ii)
Event by action of the Board of Directors of the Company)".
(f) Section 1 of the Rights Agreement is hereby amended by inserting
in the appropriate alphabetical position the following new definition:
"EXEMPT PERSON" shall mean the Company or any Subsidiary of the
Company, or any employee benefit plan of the Company or of any Subsidiary of
the Company, or any Person organized, appointed or established by the Company
or any of its Subsidiaries for or pursuant to the terms of any such plan.
SECTION 2. Common Stock Certificate Legend. Section 3(d) of the Rights
Agreement is hereby amended by adding ", as amended from time to time"
immediately after "October 24, 1996" in the first sentence of the legend set
forth therein.
SECTION 3. Exercise of Rights; Expiration Date of Rights. Section 7(d)
of the Rights Agreement is hereby amended by deleting the words "a majority of
the Continuing Directors have determined" from the first sentence thereof.
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SECTION 4. Adjustment of Purchase Price, Number and Kind of Shares or
Number of Rights. Section 11 of the Rights Agreement is hereby amended by:
(a) replacing the words "a majority of the Continuing Directors has
determined to be" in the first sentence of subsection (a)(iii) thereof with the
word "are";
(b) replacing each instance of the words "(as determined by a majority
of the Continuing Directors based upon the advice of a nationally recognized
investment banking firm selected by a majority of the Continuing Directors)" in
the first sentence of subsection (a)(iii) thereof with the words "(based upon
the advice of a nationally recognized investment banking firm)";
(c) deleting the words "the later of" and the words "and the first
date that the right to redeem the Rights pursuant to Section 23 shall expire"
in the proviso to the first sentence of subsection (a)(iii) thereof;
(d) deleting the second sentence of subsection (a)(iii) thereof;
(e) deleting the third sentence of subsection (a)(iii) thereof and
replacing it in with the following:
"To the extent that the Company determines that some action
is to be taken pursuant to the preceding sentence, the
Company (X) shall provide, subject to Section 7(d), that such
action shall apply uniformly to all outstanding Rights and
(Y) may suspend the exercisability of the Rights until the
expiration of the 30-day period set forth above in order to
seek any authorization of additional shares and/or to decide
the appropriate form and value of any consideration to be
delivered as referred to in such preceding sentence.";
(f) deleting the words "the later of" from the last sentence of
subsection (a)(iii) thereof;
(g) deleting the words "and the first date that the right to redeem
the Rights pursuant to Section 23 shall expire" from the last sentence of
subsection (a)(iii) thereof;
(h) deleting the words ", or, if at the time of such selection there
is an Acquiring Person, by a majority of the Continuing Directors" from the
second sentence of subsection (d)(i) thereof;
(i) replacing the words "majority of the Continuing Directors" in the
third sentence of subsection (d)(i) thereof with the words "nationally
recognized investment banking firm";
(j) deleting the words "by a majority of the Continuing Directors, or,
if there are no Continuing Directors," from the fourth sentence of subsection
(d)(i) thereof;
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(k) deleting the words "selected by the Board of Directors" from the
fourth sentence of subsection (d)(i) thereof;
(l) deleting the words "by a majority of the Continuing Directors then
in office, or, if there are no Continuing Directors," from subsection (d)(iii)
thereof; and
(m) deleting the words "selected by the Board of Directors" from
subsection (d)(iii) thereof.
SECTION 5. Fractional Rights and Fractional Shares. Section 14(a) of
the Rights Agreement is hereby amended by:
(a) deleting the words ", or, if at the time of such selection there
is an Acquiring Person, by a majority of the Continuing Directors" from the
fourth sentence thereof; and
(b) replacing the words "majority of the Continuing Directors" in the
fifth sentence thereof with the words "nationally recognized investment banking
firm".
SECTION 6. Redemption. Section 23(a) of the Rights Agreement is hereby
amended by:
(a) replacing the words "close of business on the tenth Business Day
after the Stock Acquisition Date (or such later date as a majority of the
Continuing Directors may designate prior to such time as the Rights are no
longer redeemable)" in the first sentence thereof with the words "occurrence of
a Section 11(a)(ii) Event";
(b) deleting the proviso from the first sentence thereof and the
semicolon immediately preceding such proviso; and
(c) deleting the second sentence thereof.
SECTION 7. Exchange. (a) Section 24(a) of the Rights Agreement is
hereby amended by replacing the words "any Person becomes an Acquiring Person,
a majority of the Continuing Directors may, at their" in the first sentence
thereof with the words "the occurrence of a Section 11(a)(ii) Event, the Board
of Directors of the Company may, at its".
(b) Section 24(b) of the Rights Agreement is hereby amended by
replacing the word "Continuing" in the first sentence thereof with the words
"Board of".
SECTION 8. Supplements and Amendments. Section 27 of the Rights
Agreement is hereby amended in its entirety to read in full as follows:
For so long as the Rights are redeemable, the Company may, and the
Rights Agent shall, if the Company so directs, supplement or amend any
provision of this Agreement in any respect without the approval of any holders
of certificates representing shares of Common Stock. At any time when the
Rights are no longer redeemable, the Company may, and the Rights Agent shall if
the Company so directs, supplement or amend this Agreement without the approval
of any holders of Rights; provided that no such supplement or amendment may (a)
adversely affect the
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interests of the holders of Rights as such (other than an Acquiring Person or
an Affiliate or Associate of an Acquiring Person), (b) cause this Agreement
again to become amendable other than in accordance with this sentence, or (c)
cause the Rights again to become redeemable. Upon the delivery of a certificate
from an appropriate officer of the Company which states that the proposed
supplement or amendment is in compliance with the terms of this Section, the
Rights Agent shall execute such supplement or amendment.
SECTION 9. Determination and Actions by the Board of Directors, Etc .
Section 29 of the Rights Agreement is hereby amended by:
(a) deleting the first parenthetical clause from the second sentence
thereof; and
(b) deleting the second parenthetical clause and the words "or the
Continuing Directors" from the last sentence thereof.
SECTION 10. Severability. Section 31 of the Rights Agreement is hereby
amended by deleting the parenthetical clause and the words "or Continuing
Directors" contained therein.
SECTION 11. Form of Right Certificate. Exhibit B to the Rights
Agreement is hereby amended by:
(a) deleting the words "(or, with respect to paragraph b below, the
Continuing Directors)" from the seventh paragraph thereof; and
(b) replacing the words "close of business on the tenth Business Day
after the Stock Acquisition Date (or such later date as a majority of the
Continuing Directors may designate prior to such time as the Rights are no
longer redeemable)" in subparagraph (a) of the seventh paragraph thereof with
the words "occurrence of a Section 11(a)(ii) Event".
SECTION 12. Summary of Terms. Exhibit C to the Rights Agreement is
hereby amended by:
(a) replacing the last sentence of footnote 1 thereof with the
following sentence:
In the case of clause (2), prior to a person becoming the
beneficial owner of 15% or more of the Company's Common
Stock, the ten business day period is subject to extension by
the Board of Directors.
(b) replacing the words "a majority of the Continuing Directors" under
the heading "Exchange" with the words "the Board of Directors";
(c) deleting footnote 3 thereof in its entirety;
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(d) restating the language under the heading "Redemption" in its
entirety to read in full as follows:
The Board of Directors may redeem all of the Rights at a
price of $.01 per Right at any time prior to the time that
any person becomes an Acquiring Person.
(e) restating the language under the heading "Amendments" in its
entirety to read in full as follows:
For so long as the Rights are redeemable, the Rights
Agreement may be amended in any respect. At any time after
the Rights are no longer redeemable, the Rights Agreement may
be amended by the Board of Directors in any respect that does
not (i) adversely affect the Rights holders (other than any
Acquiring Person and certain affiliated persons), (ii) cause
the Rights Agreement again to become amendable other than in
accordance with this paragraph or (iii) cause the Rights
again to become redeemable.
SECTION 13. Governing Law. This Amendment shall be governed by and
construed in accordance with the laws of the State of Delaware without regard
to any applicable conflicts of law rule, except that the rights and obligations
of the Rights Agent shall be governed by the law of the State of New York.
SECTION 14. Counterparts. This Amendment may be signed in any number
of counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.
SECTION 15. Effectiveness. This Amendment shall become effective upon
execution by each of the parties hereto of a counterpart hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed as of the date first above written.
DELTA AIR LINES, INC.
By:
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Name: Xxx X. Xxxxxx
Title: President and Chief Executive Officer
FIRST CHICAGO TRUST COMPANY OF NEW YORK
By:
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Name:
Title:
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