<PAGE>
As filed with the Securities and Exchange Commission on November 20, 1996.
Registration No. 333-
- --------------------------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
DELTA AIR LINES, INC.
--------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 58-0218548
- ---------------------------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Hartsfield Atlanta International Airport
Atlanta, Georgia 30320
----------------------------------------------------
(Address, including zip code,
of registrant's principal executive offices)
DELTASHARE STOCK OPTION PLAN
PILOTS STOCK OPTION PLAN
------------------------
(Full title of the plans)
Robert S. Harkey, Esq.
Senior Vice President - General Counsel & Secretary
Delta Air Lines, Inc.
Hartsfield Atlanta International Airport
Atlanta, Georgia 30320
(404) 715-2387
-------------------------------------------------------------------------
(Name, address, including zip code, and telephone
number, including area code, of agent for service)
------------------------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Proposed
Title of maximum maximum
securities Amount offering aggregate Amount of
to be to be price per offering registration
registered registered (1) share(2) price(2) fee
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------
Common Stock 24,700,000 shares $75.69 $1,869,543,000 $566,528.18
Rights (3) -- -- -- --
- ---------------------------------------------------------------------------------
</TABLE>
(1) Pursuant to Rule 416(a) under the Securities Act, this registration
statement also covers an indeterminate number of shares of Common Stock
which may become issuable pursuant to the DeltaShare Stock Option Plan or
Pilots Stock Option Plan by reason of applicable anti-dilution provisions.
(2) Estimated solely for the purpose of computing the registration fee pursuant
to Rule 457(h) under the Securities Act of 1933, as amended ("Securities
Act"), on the basis of the high and low prices of Common Stock of Delta Air
Lines, Inc. on November 15, 1996.
(3) Each share of Common Stock includes one preferred stock purchase right
("Right") to be issued pursuant to the terms and conditions of the Rights
Agreement dated as of October 24, 1996, between Registrant and First
Chicago Trust Company of New York, as Rights Agent. Each Right, when
exercisable, would entitle its registered holder to purchase one one-
hundredth of a share of Series D Junior Participating Preferred Stock of
Registrant at an exercise price of $300, subject to adjustment in certain
circumstances. The Rights will expire at the close of business on November
4, 2006, unless earlier exchanged or redeemed by Registrant.
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The document(s) containing the information specified in Part I of Form
S-8 will be sent or given to participants in the DeltaShare Stock Option Plan
and the Pilots Stock Option Plan (the "Plans") as specified by Rule 428(b)(1)
under the Securities Act. These documents and the documents incorporated by
reference into this Registration Statement pursuant to Item 3 of Part II of this
Registration Statement, taken together, constitute prospectuses that meet the
requirements of Section 10(a) of the Securities Act.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The Annual Report of Delta Air Lines, Inc. (the "Company" or "Delta")
on Form 10-K for the fiscal year ended June 30, 1996, the Company's Quarterly
Report on Form 10-Q for the quarter ended September 30, 1996, the Company's
Current Report on Form 8-K dated October 28, 1996, and "Description of Capital
Stock" contained in the Company's Form S-3 Registration Statement (File No. 33-
62048), are hereby incorporated by reference into this Registration Statement.
All documents filed by the Company pursuant to Sections 13(a), 13(c),
14 or 15(d) of the Securities Exchange Act of 1934, as amended, subsequent to
the date hereof and prior to the termination of the offering of the securities
registered pursuant to this Registration Statement shall be deemed to be
incorporated by reference into this Registration Statement and to be a part
hereof from the date of filing of such documents. Any statement contained in a
document incorporated or deemed incorporated by reference herein shall be deemed
to be modified or superseded for purposes of this Registration Statement to the
extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES.
Not Applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
The legality of the shares of Common Stock and the Rights attached
thereto has been passed upon for Registrant by Robert S. Harkey, Esq.,
Hartsfield Atlanta International Airport, Atlanta, Georgia 30320, Senior Vice
President - General Counsel & Secretary of Registrant. At September 30, 1996,
Mr. Harkey beneficially owned 10,400 shares of Common Stock; had options to
purchase 90,200 shares of Common Stock under the Registrant's 1989 Stock
Incentive Plan; and beneficially owned 50 shares of Series B ESOP Convertible
Preferred Stock of Registrant.
-2-
<PAGE>
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 102 of the Delaware General Corporation Law ("DGCL") allows a
corporation to eliminate or limit the personal liability of directors of a
corporation to the corporation or to its stockholders for monetary damages for a
breach of fiduciary duty as a director, except (i) for breach of the director's
duty of loyalty, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) for certain unlawful
dividends and stock repurchases or (iv) for any transaction from which the
director derived an improper personal benefit. Article Eighteenth of the
Certificate of Incorporation of Delta provides that no director shall be
personally liable to Delta or its stockholders for monetary damages for any
breach of his fiduciary duty as a director, except as provided in Section 102 of
the DGCL.
Section 145 of the DGCL provides that in the case of any action other
than one by or in the right of the corporation, a corporation may indemnify any
person who was or is a party or is threatened to be made a party to any action,
suit or proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that such person is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the corporation
in such capacity on behalf of another corporation or enterprise, against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action if he acted in good faith and in a manner he reasonably believed to be in
or not opposed to the best interests of the corporation and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his conduct
was unlawful.
Section 145 of the DGCL provides that in the case of an action by or
in the right of a corporation to procure a judgment in its favor, a corporation
may indemnify any person who was or is a party or is threatened to be made a
party to any action or suit by reason of the fact that such person is or was a
director, officer, employee or agent of the corporation, or is or was serving at
the request of the corporation in such capacity on behalf of another corporation
or enterprise, against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection with the defense or settlement of such
action or suit if he acted under standards similar to those set forth in the
preceding paragraph, except that no indemnification may be made in respect of
any action or claim as to which such person shall have been adjudged to be
liable to the corporation unless a court determines that such person is fairly
and reasonably entitled to indemnification.
Article Tenth of Delta's Certificate of Incorporation provides that
Delta shall to the extent permitted by law indemnify any person for all
liabilities incurred by or imposed upon him as a result of any actual or
threatened action, suit or proceeding, whether civil, criminal, administrative
or investigative, in which he shall be involved by reason of that fact that he
is or was serving as a director, officer or employee of Delta, or, that, at the
request of Delta, he is or was serving another corporation or enterprise in any
capacity.
Delta has purchased and maintains at its expense, on behalf of
directors and officers, insurance, within certain limits, covering liabilities
that may be incurred by them in such capacities.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not Applicable.
-3-
<PAGE>
ITEM 8. EXHIBITS.
4.1 Delta's Certificate of Incorporation.
4.2 Delta's By-Laws (Filed as Exhibit 3 to Delta's
Current Report on Form 8-K dated November 17, 1993).*
4.3 Rights Agreement dated as of October 24, 1996, between
Delta and First Chicago Trust Company of New York, as Rights Agent
(Filed as Exhibit 1 to Delta's Form 8-A/A Registration Statement
dated November 4, 1996).*
4.4 DeltaShare Stock Option Plan.
4.5 Pilots Stock Option Plan.
5 Opinion of Robert S. Harkey, Esq., regarding legality of
shares being registered.
15 Arthur Andersen LLP letter re: unaudited financial information.
23(a) Consent of Robert S. Harkey, Esq. (included in Exhibit 5).
23(b) Consent of Arthur Andersen LLP.
24 Powers of Attorney.
- -------------------------
* Incorporated herein by reference.
ITEM 9. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(a) (1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply
if the registration statement is on Form S-8 and the information required to be
included in a post-effective amendment by those paragraphs is contained in
periodic reports filed by the registrant pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.
-4-
<PAGE>
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(b) That, for purposes of determining any liability under the Securities Act of
1933, each filing of the registrant's annual report pursuant to Section 13(a) or
Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable,
each filing of an employee benefit plan's annual report pursuant to Section
15(d) of the Securities Exchange Act of 1934) that is incorporated by reference
in the registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions referred to in Item 6 of this registration
statement, or otherwise, the registrant has been advised that in the opinion of
the Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
-5-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Atlanta, and State of Georgia, on the 20th day of
November, 1996.
DELTA AIR LINES, INC.
By: /s/ Ronald W. Allen
------------------------------------
Ronald W. Allen
Chairman of the Board, President
and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below on the 20th day of November, 1996,
by the following persons on behalf of the registrant and in the capacities
indicated.
SIGNATURE TITLE
- --------- -----
/s/ Ronald W. Allen Chairman of the Board, President
- -------------------------------- and Chief Executive Officer
Ronald W. Allen (Chief Executive Officer)
Edwin L. Artzt* Director
- --------------------------------
Edwin L. Artzt
Henry A. Biedenharn, III* Director
- --------------------------------
Henry A. Biedenharn, III
James L. Broadhead* Director
- --------------------------------
James L. Broadhead
Edward H. Budd* Director
- --------------------------------
Edward H. Budd
George D. Busbee* Director
- --------------------------------
George D. Busbee
-6-
<PAGE>
SIGNATURE TITLE
- --------- -----
R. Eugene Cartledge* Director
- -----------------------------------
R. Eugene Cartledge
Mary Johnston Evans* Director
- -----------------------------------
Mary Johnston Evans
Gerald Grinstein* Director
- -----------------------------------
Gerald Grinstein
Jesse Hill, Jr.* Director
- -----------------------------------
Jesse Hill, Jr.
Peter D. Sutherland* Director
- -----------------------------------
Peter D. Sutherland
Andrew J. Young* Director
- -----------------------------------
Andrew J. Young
/s/ Thomas J. Roeck, Jr.
- ----------------------------------- Senior Vice President - Finance and
Thomas J. Roeck, Jr. Chief Financial Officer (Principal
Financial Officer and Principal
Accounting Officer)
*By: /s/ Thomas J. Roeck, Jr. Attorney-In-Fact
-----------------------------
Thomas J. Roeck, Jr.
-7-
<PAGE>
EXHIBIT 4.1
CERTIFICATE OF INCORPORATION
OF
DELTA AIR LINES, INC.
First: The name of the corporation (which is hereinafter referred to as the
"Corporation") is Delta Air Lines, Inc.
Second: The principal office of the Corporation in the State of Delaware is
located at No. 100 West Tenth Street in the City of Wilmington, County of New-
castle. The name and address of its resident agent is The Corporation Trust
Company, No. 100 West Tenth Street, Wilmington, Delaware.
Third: The nature of the business and the objects and purposes to be trans-
acted, promoted or carried on by the Corporation are:
(1) To invent, make, manufacture, purchase or otherwise acquire, buy,
sell, hire, lease, import, export, deal in or with, operate or otherwise
use at any place or places within or without the United States, aircraft,
airplanes, airships, machines, rockets, spacecraft, flying apparatus and
other contrivances or devices for aerial or space operation or navigation
of any and every kind and description and any future improvements or de-
velopments of the same (all of the aforesaid contrivances or devices
hereinafter described as "aircraft").
(2) To manufacture, buy, sell, hire, lease, import, export, deal in or
with, operate or otherwise use motors, engines or other machinery or de-
vices, of every kind and description, for the generation of power for the
operation of said aircraft, and all machinery, appliances, tools, sup-
plies or other equipment or paraphernalia used or capable of being used
in the construction, maintenance, repair and operation of same.
(3) To operate, use or navigate for profit or otherwise any and all of
the said aircraft, machines and motors previously described for the car-
riage and transportation of persons, property, express, freight and mail
for all kinds of private, commercial or governmental purposes, at any
place within or without the United States.
(4) To apply for, obtain, register, purchase, lease or otherwise acquire,
and to hold, use, own and operate under, and to sell, assign and other-
wise deal in and dispose of, any trade-marks, trade-names, patents and
applications for patent, copyrights, licenses, improvements, processes
and secret formulae used in connection with, or secured under, letters
patent of the United States or of other jurisdictions or countries, and
whether or not in any way relating to any of the businesses aforesaid, to
use, exercise, grant licenses in respect of or otherwise turn to account
any such trade-marks, patents, copyrights, licenses, processes and the
like.
(5) To acquire, buy, purchase, lease, own, hold, sell, mortgage and en-
cumber improved and unimproved real estate wherever situate, and to con-
struct and erect thereon and to operate and carry on the business of fac-
tories, works, plants, stores, mills, hotels, houses and buildings.
(6) To purchase or otherwise acquire and to hold, sell, pledge or other-
wise dispose of all forms of securities, including stocks, bonds, deben-
1
<PAGE>
tures, notes, certificates of indebtedness, certificates of interest,
mortgages and other similar instruments and rights however issued or
created, and to deal in and with the same and to issue in exchange
therefor or in payment therefor its own stock, bonds or other obligations
or securities, and to exercise in respect thereof any and all rights,
powers and privileges of individual ownership or interest therein,
including the right to vote thereon and to consent or otherwise act with
respect thereto; to do any and all acts and things for the preservation,
protection, improvement and enhancement in value thereof, or designed to
accomplish any such purpose, and to aid by loan, subsidy, guaranty or in
any other manner those issuing, creating or responsible for any such
securities; to acquire or become interested in any such securities as
aforesaid by original subscription, underwriting, participation in
syndicates or otherwise, and to make payments thereon as called for and
to underwrite or subscribe for the same conditionally or otherwise and
either with a view to investment or for resale or for any other lawful
purpose.
(7) To purchase or otherwise acquire, sell or otherwise dispose of, real-
ize upon or otherwise turn to account, manage, liquidate or reorganize
the properties, assets, business undertakings, enterprises or ventures or
any part thereof of corporations, associations, firms, individuals, syn-
dicates and others; to act as financial, commercial or general agent or
representative of any corporation, association, firm, syndicate or indi-
vidual, and as such to develop, improve and extend the property, trade
and business interest thereof and to aid in any lawful enterprise in con-
nection therewith, and in connection with acting as agent or broker for
any principal to give any other aid or assistance.
(8) To borrow money and for monies borrowed or in payment for property
acquired, or for any other objects and purposes of the corporation or
otherwise in connection with the transaction of any part of its business,
to issue bonds, debentures, notes and other obligations secured or
unsecured and to mortgage, pledge or hypothecate any and all of its prop-
erties or assets as security therefore; to make, accept, endorse, guaran-
tee, execute and issue notes, bills of exchange and other obligations; to
mortgage, pledge or hypothecate any stocks, bonds, other evidences of in-
debtedness or securities and any other property held by it or in which it
may be interested, and to loan money with or without collateral or other
security; to guarantee the payment of dividends upon stocks or the prin-
cipal of and/or interest upon bonds, notes or other evidences of indebt-
edness or obligations or the performance of the contracts or other under-
takings of any corporation, partnership, syndicate or individual; to en-
ter into, make and perform, contracts of every kind and for any lawful
purpose with any person, firm, corporation or syndicate.
(9) To purchase or otherwise acquire all or any part of the business,
goodwill, rights, property and assets and to assume or otherwise provide
for all or any part of the liabilities of any corporation, association,
partnership or individual; to take over as a going concern and continue
any business so acquired; and to pay for any such business or properties
2
<PAGE>
in cash, stock, bonds, debentures or obligations of this corporation or
otherwise.
(10) To manufacture, buy or otherwise acquire and to sell or otherwise
dispose of, distribute, deal in and with, either as principal, agent,
dealer or broker, goods, wares and merchandise of every kind and descrip-
tion, including all materials or substances now known or hereafter to be
discovered or invented; to purchase or otherwise acquire and to sell or
otherwise dispose of, distribute, deal in and with, either as principal,
agent, dealer or broker, all kinds of personal property of every sort and
description wheresoever situate and all interest therein which this
corporation may deem necessary or convenient in connection with any part
of its business.
(11) To conduct any and all of its business in the State of Delaware and
any other states, the District of Columbia, the territories, colonies and
dependencies of the United States, and in foreign countries and places,
and to have one or more offices outside of the State of Delaware, and to
purchase or otherwise acquire, hold, mortgage, convey, transfer, or oth-
erwise dispose of, both within and without the State of Delaware, real
and personal property.
(12) To do all and everything necessary, suitable, convenient or proper
for the accomplishment of any of the purposes or the attainment of any or
all of the objects hereinbefore enumerated or incidental to the powers
herein named, or which shall at any time appear conducive to or expedient
for the protection or benefit of the corporation, either as holder of or
as interested in any property or otherwise; and to have all of the
rights, power and privileges now or hereafter conferred by the General
Corporation Laws of the State of Delaware.
The foregoing clauses shall be construed both as objects and powers, and it
is hereby expressly provided that the enumeration herein of specific objects
and powers shall not be held to limit or restrict in any manner the general
powers of this corporation, and all the powers and purposes herein before enu-
merated shall be exercised, carried on and enjoyed by this corporation within
and without the State of Delaware to such extent and in such manner as corpo-
rations organized under the General Corporation Laws of the State of Delaware
may properly and legally exercise, carry on and enjoy.
Fourth: A. The total number of shares of capital stock which the corporation
shall have authority to issue is One Hundred Seventy Million (170,000,000), of
which One Hundred Fifty Million (150,000,000) shall be common stock of the par
value of Three Dollars ($3.00) per share (hereinafter called the "common
stock") and Twenty Million (20,000,000) shall be preferred stock of the par
value of One Dollar ($1.00) per share (hereinafter called the "preferred
stock").
B. The preferred stock may be issued from time to time by the corporation in
one or more series, with such voting powers, full or limited, or no voting
powers, and such designations, preferences and relative, participating, op-
tional or other special rights, and qualifications, limitations or restric-
tions thereof, as shall be stated and expressed in the resolution or resolu-
tions providing for the issue of such stock adopted by the board of directors
of the
3
<PAGE>
corporation pursuant to authority to do so which is hereby vested in the board
of directors. Each such series of preferred stock shall be distinctly desig-
nated. Except in respect of the particulars fixed by the board of directors
for each series as permitted hereby, all shares of preferred stock shall be of
equal rank and shall be identical. All shares of any one series of preferred
stock so designated by the board of directors shall be alike in every particu-
lar, except that shares of any one series issued at different times may differ
as to the dates from which dividends thereon shall be cumulative. The voting
rights, if any, of each such series and the preferences and relative, partici-
pating, optional and other special rights of each such series and the qualifi-
cations, limitations and restrictions thereof, if any, may differ from those
of any and all other series at any time outstanding; and the board of direc-
tors of the corporation is hereby expressly granted authority to fix, by reso-
lutions duly adopted prior to the issuance of any shares of a particular se-
ries of preferred stock so designated by the board of directors, the voting
powers of stock of such series, if any, and the designations, preferences and
relative, participating, optional and other special rights and the qualifica-
tions, limitations and restrictions thereof, if any, for such series, includ-
ing without limitation the following:
(1) The distinctive designation of and the number of shares of pre-
ferred stock which shall constitute such series; provided that such num-
ber may be increased (except where otherwise provided by the board of di-
rectors) or decreased (but not below the number of shares thereof then
outstanding) from time to time by like action of the board of directors;
(2) The rate and time at which, and the terms and conditions upon
which, dividends, if any, on preferred stock of such series shall be
paid, the extent of the preference or relation, if any, of such dividends
to the dividends payable on any other series of preferred stock or any
other class of stock of the corporation and whether such dividends shall
be cumulative or non-cumulative;
(3) The right, if any, of the holders of preferred stock of such series
to convert the same into, or exchange the same for, shares of any other
class of stock or any series of any class of stock of the corporation and
the terms and conditions of such conversion or exchange;
(4) Whether or not preferred stock of such series shall be subject to
redemption, and the redemption price or prices and the time or times at
which, and the terms and conditions upon which, preferred stock of such
series may be redeemed;
(5) The rights, if any, of the holders of preferred stock of such se-
ries upon the voluntary or involuntary liquidation of the corporation;
(6) The terms of the sinking fund or redemption or purchase account, if
any, to be provided for the preferred stock of such series; and
(7) The voting powers, if any, of the holders of such series of pre-
ferred stock which may, without limiting the generality of the foregoing,
include the right, voting as a series by itself or together with any
other series of the preferred stock as a class, (i) to vote more or less
than one vote per share on any or all matters voted upon by the stock-
holders
4
<PAGE>
and (ii) to elect one or more directors of the corporation if there has
been a default in the payment of dividends on any one or more series of
the preferred stock or under such other circumstances and upon such other
conditions as the board of directors may fix.
C. Except as otherwise provided in this Certificate of Incorporation, and in
addition to the powers conferred on the board of directors by Article Thir-
teenth of this Certificate of Incorporation, the board of directors shall have
authority to authorize the issuance, from time to time, without any vote or
other action by the stockholders, of any or all shares of stock of the corpo-
ration of any class or series at any time authorized, and any securities con-
vertible into or exchangeable for any such shares, and any options, rights or
warrants to purchase or acquire any such shares, in each case to such persons
and on such terms (including as a dividend or distribution on or with respect
to, or in connection with a split or combination of, the outstanding shares of
stock of the same or any other class or series) as the board of directors from
time to time in its discretion lawfully may determine; provided, that the con-
sideration for the issuance of shares of stock of the corporation (unless is-
sued as such a dividend or distribution or in connection with such a split or
combination) shall not be less than the par value of such shares. Shares so
issued shall be fully paid stock, and the holders of such stock shall not be
liable to any further call or assessments thereon.
Fifth: No holder of the capital stock of this corporation shall have any
preemptive or preferential right of subscription to any shares of stock of the
corporation now or hereafter authorized or issued.
Sixth: The names and places of residence of the incorporations are as fol-
lows:
<TABLE>
<CAPTION>
Name Place of Residence
<S> <C>
B. J. Consono Wilmington, Delaware
F. J. Obara, Jr. Wilmington, Delaware
A. D. Grier Wilmington, Delaware
</TABLE>
Seventh: The existence of the corporation is to be perpetual.
Eighth: The private property of the stockholders shall not be subject to the
payment of corporate debts to any extent whatever.
Ninth: The number of directors of the corporation shall be fixed from time
to time by, and in the manner provided in, its By-Laws and may be increased or
decreased as therein provided; but the number thereof shall consist of not
less than five nor more than nineteen directors who shall be stockholders of
the corporation.
The directors of the corporation shall be elected annually by the stockhold-
ers and shall hold office until the next annual meeting of stockholders and
until their respective successors are duly elected and qualified.
In the case of any increase in the number of directors of the corporation,
the additional directors shall be elected as shall be provided in said By-Laws
by the board of directors or by the holders of shares of stock of the corpora-
tion entitled to vote in respect thereof at an annual or special meeting of
said holders.
5
<PAGE>
In case of any vacancy in the board of directors, however occasioned, a suc-
cessor to fill the vacancy shall be elected in the manner provided in the By-
Laws of the corporation.
A majority of the whole board of directors may appoint from the directors an
executive committee; and to such extent as shall be provided in a resolution
of the said board or in the By-Laws, such committee shall have and may exer-
cise all or any of the powers of the board of directors, including power to
cause the seal of the corporation to be affixed to all the papers that may re-
quire it.
A majority of the whole board of directors may appoint a finance committee
and any other standing committees, and any such committee shall have and may
exercise such powers as shall be conferred or authorized by the By-Laws or by
the board of directors.
The By-Laws of the corporation shall designate the officers of the corpora-
tion, which shall include, but not necessarily be limited to, a president, a
secretary and a treasurer, to be elected by the directors or the stockholders,
and the manner in which the officers of the corporation shall be elected or
appointed.
Any officer elected by the board of directors may be removed at any time by
the board of directors. Any other officer or employee of the corporation may
be removed at any time by the board of directors, or by any committee or supe-
rior officer upon whom such power of removal may be conferred by the By-Laws
or by the board of directors.
The board of directors, irrespective of any personal interest of any members
of the board, shall have authority, by resolution passed by a majority of the
whole board, to establish reasonable compensation of directors for service to
the corporation as directors, officers or otherwise.
Tenth: The corporation shall to the full extent permitted by law indemnify,
reimburse, or pay any person (including such person's executor, administrator,
or other personal representatives) for all liabilities (including, but not
limited to, reasonable costs, expenses, attorneys' fees, and obligations for
payment in settlement and final judgment) incurred by or imposed upon him in
the preparation, conduct or compromise, or as a result, of any actual or
threatened action, suit, or proceeding, whether civil, criminal, administra-
tive, or investigative, including any appeals therefrom and any collateral
proceedings, in which he shall be involved by reason of the fact that he is or
was serving as a director, officer, or employee of the corporation, or, that
such director, officer, or employee, at the request of the corporation, is or
was serving any other corporation, partnership, joint venture, trust, employee
benefit plan, or other enterprise, in any capacity.
Eleventh: The board of directors may adopt By-Laws and, from time to time,
may amend or repeal any By-Laws; but any By-Law adopted or amended by the
board of directors may be amended or repealed by the stockholders at any an-
nual meeting or at any special meeting, provided that notice of such proposed
amendment or repeal be included in the notice of the meeting.
Twelfth: Meetings of the stockholders may be held outside the State of Dela-
ware if the By-Laws so provide. The books of the corporation may
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be kept (subject to any provision contained in the statutes) outside the State
of Delaware at such place or places as may be designated from time to time by
the board of directors or in the By-Laws of the corporation.
The board of directors from time to time shall determine whether and to what
extent, and at what times and places and under what conditions and regulations
the accounts and books of the corporation, or any of them shall be open to the
inspection of the stockholders, and no stockholders shall have the right to
inspect any account or book or document of the corporation except as conferred
by law or authorized by the board of directors or by the stockholders.
Thirteenth: The directors may from time to time declare and pay such divi-
dends as they shall deem advisable and proper, subject to such restrictions as
may be imposed by law.
The board of directors is hereby specifically empowered to authorize the is-
suance of and to issue in any lawful manner, without limitation and from time
to time within the total number of shares authorized by these Articles, shares
of its stock for such considerations, not less than the par value thereof, as
the board of directors may deem advisable.
The board of directors shall have power to issue bonds, debentures or other
obligations, whether nonconvertible or convertible into the corporation's
stock, upon such terms, in such manner and under such conditions in conformity
with law as may be fixed by the board of directors prior to the issuance of
such bonds, debentures or other obligations.
Fourteenth: The powers and authorities hereinbefore conferred upon the board
of directors are in furtherance of, and not in limitation of, those conferred
by the laws of the State of Delaware.
Fifteenth: The corporation reserves the right at any time and from time to
time to amend, alter, change or repeal any provision contained in this Certif-
icate of Incorporation in the manner now or hereafter prescribed by law; and
all rights, preferences and privileges of whatsoever nature conferred upon
stockholders, directors or any other persons whomsoever by and pursuant to
this Certificate of Incorporation in its present form or as hereafter amended
are granted subject to the rights reserved in this Article.
Sixteenth: The stockholders of the corporation may take action by written
consent only if such consent is unanimous. Notwithstanding anything contained
in this Certificate of Incorporation to the contrary, the affirmative vote of
the holders of at least 75% of the votes entitled to be cast by the holders of
all the then outstanding shares of the corporation entitled to vote generally
on the election of directors, voting together as a single class, shall be re-
quired to alter, amend or repeal this Article Sixteenth or to adopt any provi-
sion inconsistent herewith.
Seventeenth: A. Any "Business Combination" (as hereafter defined) with, or
proposed by or on behalf of, any "Related Person" (as hereafter defined) shall
require approval by the affirmative vote of both (i) not less than 75% of the
votes entitled to be cast by the holders of all the then outstanding shares of
"Voting Stock" (as hereafter defined), voting together as a single class, and
(ii) a majority of the votes entitled to be cast by the holders of all the
then outstanding shares of Voting Stock, voting together as a single class,
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<PAGE>
excluding Voting Stock that is beneficially owned by such Related Person. Such
affirmative vote shall be required in addition to any other vote that may be
required, and notwithstanding the fact that no vote may be required, or that a
lesser percentage or separate class vote may be specified, by law, this Cer-
tificate of Incorporation, the By-Laws of the corporation, or in any agreement
with any national securities exchange or otherwise. Notwithstanding the fore-
going, the voting requirements of this paragraph A shall not be applicable if:
1. The "Continuing Directors" (as hereafter defined) by a majority vote
shall have expressly approved the Business Combination; or
2. The Business Combination involves the payment of consideration to the
stockholders of the corporation, and all of the following conditions are met:
(a) The consideration to be received per share by holders of each class
or series of "Capital Stock" (as hereafter defined) shall be in the form
of "Fair Consideration" (as hereafter defined) and the aggregate amount
of the "Fair Market Value" (as hereafter defined), as of the date of the
consummation of the Business Combination, of such consideration to be re-
ceived per share shall be in an amount not less than the highest of:
(i) the Fair Market Value of the highest per share consideration
(with appropriate adjustments for recapitalizations, stock splits,
stock dividends and like distributions) paid by or on behalf of the
Related Person in acquiring beneficial ownership of any shares of
such class or series of Capital Stock during the two-year period
prior to the date of the first public announcement of the proposed
Business Combination (the "Announcement Date") or, if higher, in the
transaction in which it became a Related Person;
(ii) the "Market Price" (as hereafter defined) per share (with ap-
propriate adjustments for recapitalizations, stock splits, stock
dividends and like distributions) of such class or series of Capital
Stock on the Announcement Date or on the date on which the Related
Person became a Related Person, whichever is higher; and
(iii) if applicable, the highest preferential amount per share to
which the holders of shares of such class or series of Capital Stock
would be entitled in the event of any voluntary or involuntary liq-
uidation, dissolution or winding up of the affairs of the corpora-
tion, regardless of whether the proposed Business Combination con-
stitutes such an event.
(b) After the date on which the Related Person became a Related Person
and prior to the consummation of the proposed Business Combination, ex-
cept as approved by a majority of the Continuing Directors, there shall
not have been (i) any failure to declare and pay at the regular date
therefor any full quarterly dividends (whether or not cumulative) payable
in accordance with the terms of any outstanding Capital Stock; (ii) any
reduction in the annual rate of dividends paid on the common stock (ex-
cept as necessary to reflect any stock split, stock dividend or subdivi-
sion of the common stock); (iii) any failure to increase the annual
8
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rate of dividends paid on the common stock as necessary to reflect any
reclassification (including any reverse stock split), recapitalization,
reorganization or similar transaction that has the effect of reducing the
number of outstanding shares of common stock; or (iv) any increase in the
number of shares of any class or series of Capital Stock beneficially
owned by the Related Person except as part of the transaction that re-
sulted in such Related Person becoming a Related Person and except in a
transaction that, after giving effect thereto, would not result in any
increase in the Related Person's percentage beneficial ownership of any
class or series of Capital Stock.
(c) A proxy or information statement describing the proposed Business
Combination and complying with the requirements of the Securities Ex-
change Act of 1934 and the rules and regulations thereunder or any subse-
quent provisions replacing or amending such act, rules or regulations
(the "Act") shall be mailed to all stockholders of the corporation at
least 30 days prior to the consummation of such Business Combination
(whether or not such mailing is required pursuant to the Act). The proxy
or information statement shall contain on the first page thereof, in a
prominent place, any statement as to the advisability (or inadvisability)
of the Business Combination that the Continuing Directors, or any of them
may choose to make and, if deemed advisable by a majority of the Continu-
ing Directors, the opinion of an investment banking firm selected by a
majority of the Continuing Directors as to the fairness (or not) of the
terms of the Business Combination from a financial point of view to the
holders of the outstanding shares of Capital Stock other than the Related
Person, such investment banking firm to be paid a reasonable fee for its
services by the corporation.
(d) After the date on which the Related Person became a Related Person
and prior to the consummation of the proposed Business Combination, such
Related Person shall not have made or caused any major change in the cor-
poration's business or equity capital structure without the approval of a
majority of the Continuing Directors.
B. For the purpose of this Article SEVENTEENTH:
1. The term "Business Combination" shall mean:
(a) any merger or consolidation of the corporation or any "Subsidiary"
(as hereafter defined) with, into, or for the benefit of any Related Per-
son;
(b) any sale, lease, exchange, mortgage, pledge, transfer or other dis-
position or security arrangement, investment, loan, advance, guarantee,
agreement to purchase, agreement to pay, extension of credit, joint ven-
ture participation or other arrangement (in one transaction or a series
of transactions) involving the corporation or a Subsidiary which is with
or for the benefit of any Related Person and which involves a "Substan-
tial Part" (as hereafter defined) or all of the assets, securities or
commitments of the corporation, any Subsidiary or any Related Person;
(c) any recapitalization of the corporation or reclassification of its
securities (including any reverse stock split), or any merger or consoli-
9
<PAGE>
dation of the corporation with any Subsidiary, or any other transaction
(whether or not with or otherwise involving a Related Person) that would
have the effect of increasing the proportionate share of any class or se-
ries of Capital Stock, or any securities convertible into Capital Stock
or into equity securities of any Subsidiary, beneficially owned by any
Related Person;
(d) the adoption of any plan or proposal for the liquidation or disso-
lution of the corporation; and
(e) any agreement, contract or other arrangement providing for any of
the transactions described in the foregoing subparagraphs (a) to (d).
2. The term "Market Price" shall mean the closing sale price on the date in
question of a share of the class or series of stock in question on the Compos-
ite Tape for New York Stock Exchange--Listed Stocks, or, if such stock is not
quoted on the Composite Tape, on the New York Stock Exchange, or, if such
stock is not listed on such Exchange, on the principal United States securi-
ties exchange registered under the Act on which such stock is listed, or, if
such stock is not listed on any such exchange, the closing sale (or if sale
prices are not available, bid) quotation with respect to a share of such stock
on the National Association of Securities Dealers, Inc. Automated Quotations
System or any similar system then in use, or, if such quotation is not avail-
able, the fair market value on the date in question of a share of such stock
as determined in good faith by a majority of the Continuing Directors.
3. The term "Fair Market Value" shall mean (a) in the case of cash, the
amount of such cash, (b) in the case of stock, the Market Price thereof, and
(c) in the case of property other than cash or stock, the fair market value of
such property on the date in question as determined in good faith by a major-
ity of the Continuing Directors.
4. The term "person" shall mean any individual, firm, company or other enti-
ty.
5. The term "Related Person" shall mean and include any person which, by it-
self or together with any other person pursuant to any agreement, arrange-
ment or understanding, either directly or indirectly, and/or together with its
or their "Affiliates" or "Associates" (as defined in Rule 12b-2 under the Act
as such Rule is in effect on July 25, 1985), (a) is or has announced or pub-
licly disclosed a plan or intention to become the beneficial owner of, in the
aggregate, shares representing 10% or more of the votes entitled to be cast by
the holders of all the then outstanding shares of Voting Stock, or (b) is an
assignee of the beneficial ownership of any shares of Voting Stock of which a
person described in subparagraph (a) hereof was the beneficial owner at any
time within the two-year period immediately preceding the date a Business Com-
bination is proposed; and any Affiliate or Associate of any such Related Per-
son. The term "Related Person" shall not include the corporation or any Sub-
sidiary or any profit sharing, employee stock ownership or other employee ben-
efit plan of the corporation or any Subsidiary or any trustee or fiduciary
with respect to any such Plan when acting in such capacity. The date on which
any person or any Affiliate or Associate of such person became a Related Per-
son shall be deemed to be the earliest date
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<PAGE>
on which such person or any of its Affiliates or Associates became a Related
Person.
6. For purposes of this Article SEVENTEENTH, a person shall be deemed to
beneficially own any Capital Stock:
(a) which such person or any of its Affiliates or Associates benefi-
cially owns, directly or indirectly; or
(b) which such person or any of its Affiliates or Associates has, di-
rectly or indirectly, (i) the right to acquire (whether such right is ex-
ercisable immediately or only after the passage of time), pursuant to any
agreement, arrangement or understanding or upon the exercise of conver-
sion rights, exchange rights, warrants or options, or otherwise, or (ii)
the right, alone or together with any other person, to vote pursuant to
any agreement, arrangement or understanding; or
(c) which is beneficially owned, directly or indirectly, by any other
person with which such person or any of its Affiliates or Associates has
any agreement, arrangement or understanding for the purpose of acquiring,
holding, voting or disposing of any shares of Capital Stock.
For the purpose of determining whether a person is a Related Person, the
number of shares of Capital Stock deemed to be outstanding shall include
shares deemed beneficially owned by such person through application of this
paragraph 6, but shall not include any other shares of Capital Stock that may
be issuable pursuant to any agreement, arrangement or understanding, or upon
exercise of conversion rights, warrants or options, or otherwise.
Any person shall be deemed to have become the beneficial owner of shares of
Capital Stock on the date on which it or any of its Affiliates or Associates
became the beneficial owner of such shares of Capital Stock.
7. The term "Substantial Part" shall mean any aggregate of assets, securi-
ties and commitments having a Fair Market Value equal to or greater than the
lesser of (a) $15,000,000, or (b) (in the case of any transaction involving
assets, securities or commitments other than stock) 5% of the book value of
the total assets of the entity in question, or (c) (in the case of transac-
tions involving stock) 5% of the stockholders' equity of the entity in ques-
tion, in either case as of the end of the entity's most recent fiscal year
ending prior to the time the determination is being made.
8. The term "Fair Consideration" as applied to the consideration to be re-
ceived by holders of shares of a particular class or series of outstanding
Capital Stock means consideration in cash or in the same form as was paid by
or on behalf of the Related Person to acquire beneficial ownership of shares
of such class or series of Capital Stock within the two-year period ending on
and including the date on which the Related Person became a Related Person.
If, within such two-year period, the consideration so paid for shares of any
class or series of Capital Stock varied as to form, then Fair Consideration
shall mean either cash or the form of consideration used to acquire beneficial
ownership of the largest number of shares of such class or series of Capital
Stock acquired by or on behalf of the Related Person within such two-year
period.
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9. The term "Subsidiary" shall mean any company in which the corporation
owns shares of stock representing a majority of the voting power of shares en-
titled to vote generally on the election of directors.
10. The term "Capital Stock" shall mean the capital stock of the corporation
authorized to be issued from time to time under Article FOURTH of this Certif-
icate of Incorporation.
11. The term "Voting Stock" shall mean Capital Stock entitled to vote gener-
ally on the election of directors.
12. The term "Continuing Director" shall mean (a) a director who was a mem-
ber of the board of directors of the corporation either on July 25, 1985, or
immediately prior to the time that the Related Person became a Related Person,
and (b) any person becoming a director whose election, or nomination for elec-
tion by the corporation's stockholders, was approved by a vote of a majority
of the Continuing Directors referred to in subparagraph (a); provided, howev-
er, that in no event shall a Related Person involved in a Business Combination
or any of its representatives be deemed to be a Continuing Director.
C. For the purposes of this Article SEVENTEENTH, the Continuing Directors by
a majority vote shall have the power and the duty to make a good faith deter-
mination, on the basis of information known to them, of: (i) whether any per-
son is a Related Person; (ii) the number of shares of Capital Stock of which
any person is the beneficial owner; (iii) whether a person is an Affiliate or
Associate of another; (iv) whether the assets, securities or commitments that
are the subject of any Business Combination constitute a Substantial Part; (v)
whether any business transaction is a Business Combination with, or proposed
by or on behalf of, a Related Person; (vi) whether the cash or other consider-
ation to be received per share by holders of Capital Stock other than the Re-
lated Person in a Business Combination is an amount at least equal to the
highest price required to be paid under paragraph A of this Article SEVEN-
TEENTH and constitutes Fair Consideration; (vii) what is the Market Price or
Fair Market Value and whether a price is above the Market Price or Fair Market
Value; and (viii) any other matters with respect to which a determination is
required under this Article SEVENTEENTH. Any such determination made in good
faith shall be binding and conclusive on all parties.
D. Nothing contained in this Article SEVENTEENTH shall be construed to re-
lieve any Related Person from any fiduciary obligation imposed by law.
E. The fact that any proposed Business Combination complies with the provi-
sion of paragraph A of this Article SEVENTEENTH shall not be construed to im-
pose any fiduciary duty, obligation or responsibility on the board of direc-
tors or any member thereof to approve such Business Combination or recommend
its adoption or approval to the stockholders of the corporation, nor shall
such compliance limit, prohibit or otherwise restrict in any manner the board
of directors or any member thereof with respect to evaluations or actions and
responses taken with respect to such Business Combination.
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<PAGE>
F. Any other provision of this Certificate of Incorporation or the By-Laws
of the corporation notwithstanding, and notwithstanding the fact that a lesser
percentage or separate class vote may be specified by law, this Certificate of
Incorporation or the By-Laws of the corporation, any proposal to amend or re-
peal any provision of this Article SEVENTEENTH and any other proposal to amend
this Certificate of Incorporation which is inconsistent with any of the provi-
sions set forth in this Article SEVENTEENTH shall require approval by the af-
firmative vote of not less than 75% of the votes entitled to be cast by the
holders of all the then outstanding shares of Voting Stock, voting together as
a single class, and, if such proposal is made by or on behalf of a Related
Person, the affirmative vote of a majority of the votes entitled to be cast by
the holders of all the then outstanding shares of Voting Stock, voting to-
gether as a single class, excluding Voting Stock that is beneficially owned by
such Related Person; provided, however, that the vote referred to in this par-
agraph F shall not be required for any amendment, repeal or adoption unani-
mously recommended by the board of directors and, if such proposal is made by
or on behalf of a Related Person, such recommendation by the board of direc-
tors is made at a time when a majority of the directors are Continuing
Directors.
Eighteenth. No director shall be personally liable to the corporation or its
stockholders for monetary damages for any breach of fiduciary duty by such di-
rector as a director, except (i) for breach of the director's duty of loyalty
to the corporation or its stockholders, (ii) for acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of law,
(iii) pursuant to Section 174 of the Delaware General Corporation Law, or (iv)
for any transaction from which the director derived an improper personal bene-
fit. No amendment to or repeal of this Article Eighteenth shall apply to or
have any effect on the liability or alleged liability of any director of the
Corporation for or with respect to any acts or omissions of such director oc-
curring prior to such amendment or repeal.
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CERTIFICATE OF DESIGNATIONS, PREFERENCES
AND RIGHTS OF SERIES B ESOP
CONVERTIBLE PREFERRED STOCK
OF
DELTA AIR LINES, INC.
Pursuant to Section 151 of the General Corporation
Law of the State of Delaware
We, Ronald W. Allen, Chairman of the Board and Chief Executive Officer, and
James W. Callison, Secretary, of Delta Air Lines, Inc., a corporation orga-
nized and existing under the General Corporation Law of the State of Delaware
(the "Corporation"), in accordance with the provisions of Section 103 thereof,
DO HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of Directors by the
Certificate of Incorporation of the said Corporation, the said Board of Direc-
tors on July 10, 1989, has adopted the following resolution creating a series
of 6,944,450 shares of Preferred Stock, par value $1.00 per share, designated
as Series B ESOP Convertible Preferred Stock:
RESOLVED, that pursuant to the authority expressly vested in the Board of
Directors of this Corporation in accordance with the provisions of its Certif-
icate of Incorporation, a series of Preferred Stock of the Corporation, par
value $1.00 per share, be and it hereby is, created and classified, and that
the designation and amount thereof and the voting powers, preferences and rel-
ative, participating, optional and other special rights of the shares of such
series, and the qualifications, limitations or restrictions thereof are as
follows:
SECTION 1. DESIGNATION, AMOUNT AND STATED VALUE; SPECIAL PURPOSE RESTRICTED
TRANSFER ISSUE.
(A) The shares of such series shall be designated as "Series B ESOP Convert-
ible Preferred Stock" (such series being hereinafter sometimes called the "Se-
ries B Preferred Stock"), the number of shares constituting such series shall
initially be 6,944,450 and the stated value of each share of Series B Pre-
ferred Stock shall be $72.00.
(B) Shares of Series B Preferred Stock shall be issued only to Harris Trust
and Savings Bank, as trustee, or any successor trustee (the "Trustee"), of the
Delta Family-Care Savings Plan of the Corporation, as amended from time to
time, or any successor or replacement plan (the "Plan"). In the event of any
transfer of shares of Series B Preferred Stock to any person other than the
Trustee, the shares of Series B Preferred Stock so transferred, upon such
transfer and without any further action by the Corporation or the holder
thereof, shall be automatically converted into shares of Common Stock (as de-
fined in paragraph (B) of Section 10 hereof) on the terms otherwise
14
<PAGE>
provided for the conversion of shares of Series B Preferred Stock into shares
of Common Stock pursuant to Section 5 hereof and no such transferee shall have
any of the voting powers, preferences and relative, participating, optional or
special rights ascribed to shares of Series B Preferred Stock hereunder but,
rather, only the powers and rights pertaining to the Common Stock into which
such shares of Series B Preferred Stock shall have been so converted. In the
event of such a conversion, the transferee of the shares of Series B Preferred
Stock shall be treated for all purposes as the record holder of the shares of
Common Stock into which such shares of Series B Preferred Stock have been au-
tomatically converted as of the date of such transfer. Certificates represent-
ing shares of Series B Preferred Stock shall bear a legend to reflect the
foregoing provisions. Notwithstanding the foregoing provisions of this para-
graph 1(B), shares of Series B Preferred Stock (i) may be converted into
shares of Common Stock as provided by Section 5 hereof and the shares of Com-
mon Stock issued upon such conversion may be transferred by the holder thereof
as permitted by law and (ii) shall be redeemable by the Corporation upon the
terms and conditions provided by Sections 6 and 7 hereof.
SECTION 2. DIVIDENDS AND DISTRIBUTIONS.
(A) Subject to the provisions for adjustment hereinafter set forth, the
holders of shares of Series B Preferred Stock shall be entitled to receive,
when, as and if declared by the Board of Directors out of funds legally avail-
able therefor, dividends payable in cash ("Preferred Dividends") at the rate per
share of 6% per annum of the stated value of such shares. Preferred Dividends
will be payable semi-annually on the 28th day of June and December in each year
(each a "Dividend Payment Date") commencing on December 28, 1989, to holders of
record on the tenth Business Day (as defined in paragraph (H) of Section 8
hereof) preceding such Dividend Payment Date (the "Dividend Record Date"). In
the event that any Dividend Payment Date shall fall on any day other than a
Business Day, the dividend payment due on such Dividend Payment Date shall be
paid on the Business Day immediately following such Dividend Payment Date.
Preferred Dividends shall begin to accrue on outstanding shares of Series B
Preferred Stock from the date of issuance of such shares of Series B Preferred
Stock. Preferred Dividends shall accrue on a daily basis whether or not during
such semi-annual period there shall be funds legally available therefor, but
Preferred Dividends accrued on the shares of Series B Preferred Stock for any
period less than a full semi-annual period between Dividend Payment Dates (or,
in the case of the first dividend payment, from the date of issuance of the
shares of Series B Preferred Stock through the first Dividend Payment Date)
shall be computed on the basis of a 360-day year of 30-day months. Accrued but
unpaid Preferred Dividends shall cumulate as of the Dividend Payment Date on
which they first become payable, but no interest shall accrue on accumulated but
unpaid Preferred Dividends. Dividends paid on the shares of Series B Preferred
Stock in an amount less than the total amount of such dividends at the time
accrued and payable on such
15
<PAGE>
shares shall be allocated pro rata on a share-by-share basis among all such
shares at the time outstanding.
(B) So long as any shares of Series B Preferred Stock shall be outstanding,
no dividend shall be declared or paid or set apart for payment on any other
series of stock ranking on a parity with the Series B Preferred Stock as to
dividends, unless there shall also be or have been declared and paid or set
apart for payment on the Series B Preferred Stock dividends for all dividend
payment periods of the Series B Preferred Stock ending on or before the divi-
dend payment date of such parity stock, ratably in proportion to the respec-
tive amounts of dividends accumulated and unpaid through such dividend period
on the Series B Preferred Stock and accumulated and unpaid on such parity
stock through the dividend payment period on such parity stock next preceding
such dividend payment date. In the event that full cumulative dividends on the
Series B Preferred Stock have not been declared and paid or set apart for pay-
ment when due, the Corporation shall not declare or pay or set apart for pay-
ment any dividends or make any other distributions on, or make any payment on
account of the purchase, redemption or other retirement of any other class of
stock or series thereof of the Corporation ranking, as to dividends or as to
distributions in the event of a liquidation, dissolution or winding up of the
Corporation, junior to the Series B Preferred Stock until full cumulative div-
idends on the Series B Preferred Stock shall have been paid or declared and
set apart for payment; provided, however, that the foregoing shall not apply
to (i) any dividend payable solely in any shares of any stock ranking, as to
dividends and as to distributions in the event of a liquidation, dissolution
or winding up of the Corporation, junior to the Series B Preferred Stock or
(ii) the acquisition of shares of any stock ranking, as to dividends or as to
distributions in the event of a liquidation, dissolution or winding up of the
Corporation, junior to the Series B Preferred Stock in exchange solely for
shares of any other stock ranking, as to dividends and as to distributions in
the event of a liquidation, dissolution or winding-up of the Corporation, ju-
nior to the Series B Preferred Stock.
SECTION 3. VOTING RIGHTS.
(A) The holders of shares of Series B Preferred Stock shall be entitled to
vote on all matters submitted to a vote of the stockholders of the Company,
voting together with the holders of Common Stock as one class. The holder of
each share of Series B Preferred Stock shall be entitled to one vote for each
share of Series B Preferred Stock held by such holder; provided, however, that
if such number of votes per share of Series B Preferred Stock would violate
applicable rules and regulations of the Securities and Exchange Commission
(the "SEC") or the New York Stock Exchange, Inc. (the "NYSE"), then the number
of votes per share of Series B Preferred Stock shall be the highest vote then
permitted by such rules and regulations; it being understood that whenever the
"Conversion Price" (as defined in Section 5 hereof) is adjusted as provided in
Section 8 hereof (other than an adjustment pursuant to paragraph 8(A)), the
number of votes per share of Series B Preferred Stock shall be adjusted in in-
verse proportion to the adjustment to the Conversion Price.
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<PAGE>
Notwithstanding the foregoing, no adjustment in the number of votes per share
of Series B Preferred Stock shall be made to the extent that such adjustment
would result in voting rights per share of Series B Preferred Stock which
would violate the applicable rules and regulations of the SEC or the NYSE.
(B) Except as otherwise required by law or set forth herein, holders of Se-
ries B Preferred Stock shall have no special voting rights and their consent
shall not be required (except to the extent they are entitled to vote with
holders of Common Stock as set forth herein) for the taking of any corporate
action; provided, however, that the vote of at least 66 2/3% of the outstand-
ing shares of Series B Preferred Stock, voting separately as a series, shall
be necessary to adopt any alteration, amendment or repeal of any provision of
the Certificate of Incorporation of the Corporation, as amended or this Reso-
lution (including any such alteration, amendment or repeal effected by any
merger or consolidation in which the Corporation is the surviving or resulting
corporation), if such amendment, alteration or repeal would alter or change
the powers, preferences, or special rights of the shares of Series B Preferred
Stock so as to affect them adversely.
SECTION 4. LIQUIDATION, DISSOLUTION OR WINDING UP.
(A) In the event of any liquidation, dissolution or winding up of the Corpo-
ration, voluntary or involuntary, the holders of Series B Preferred Stock
shall be entitled to receive out of assets of the Corporation which remain af-
ter satisfaction in full of all valid claims of creditors of the Corporation
and which are available for payment to stockholders, and subject to the rights
of the holders of any stock of the Corporation ranking senior to or on a par-
ity with the Series B Preferred Stock in respect of distributions upon liqui-
dation, dissolution or winding up of the Corporation, before any amount shall
be paid to or distributed among the holders of Common Stock or any other
shares ranking junior to the Series B Preferred Stock in respect of distribu-
tions upon liquidation, dissolution or winding up of the Corporation, liqui-
dating distributions in the amount of $72.00 per share, plus an amount equal
to all accrued and unpaid dividends thereon to the date fixed for distribu-
tion, and no more. If upon any liquidation, dissolution or winding up of the
Corporation, the amounts payable with respect to the Series B Preferred Stock
and any other stock ranking as to any such distribution on a parity with the
Series B Preferred Stock are not paid in full, the holders of Series B Pre-
ferred Stock and such other stock shall share ratably in any distribution of
assets in proportion to the full respective preferential amounts to which they
are entitled. After payment of the full amount to which they are entitled as
provided by the foregoing provisions of this paragraph 4(A), the holders of
Series B Preferred Stock shall not be entitled to any further right or claim
to any of the remaining assets of the Corporation.
(B) Neither the merger or consolidation of the Corporation with or into any
other corporation, nor the merger or consolidation of any other corporation
with or into the Corporation, nor the sale, lease, exchange or other transfer
of all or substantially all of the assets of the Corporation, shall be
17
<PAGE>
deemed to be a dissolution, liquidation or winding up of the affairs of the
Corporation for purposes of this Section 4, but the holders of Series B Pre-
ferred Stock shall nevertheless be entitled in the event of any such merger or
consolidation to the rights provided by Section 7 hereof.
(C) Written notice of any voluntary or involuntary liquidation, dissolution
or winding up of the Corporation, stating the payment date or dates when, and
the place or places where, the amounts distributable to holders of Series B
Preferred Stock in such circumstances shall be payable, shall be given by hand
delivery, by courier, by standard form of telecommunication or by first class
mail (postage prepaid), delivered, sent or mailed, as the case may be, not
less than twenty (20) days prior to any payment date stated therein, to the
holders of Series B Preferred Stock, at the address shown on the books of the
Corporation or any transfer agent for the Series B Preferred Stock.
SECTION 5. CONVERSION INTO COMMON STOCK.
(A) A holder of shares of Series B Preferred Stock shall be entitled, at any
time prior to the close of business on the date fixed for redemption of such
shares pursuant to Section 6 or 7 hereof, to cause any or all of such shares
to be converted into shares of Common Stock, initially at a conversion price
equal to $86.40 per share of Common Stock, and which price shall be adjusted
as provided in Section 8 hereof (and, as so adjusted, is hereinafter sometimes
referred to as the "Conversion Price"), with each share of Series B Preferred
Stock being valued at $72.00 for such purpose (that is, a conversion rate ini-
tially equivalent to 0.8333 shares of Common Stock for each share of Series B
Preferred Stock so converted, which is subject to adjustment (to the fourth
decimal place) as the Conversion Price is adjusted as provided in Section 8
hereof); provided, however, that in no event shall the Conversion Price be
lower than the par value, if any, of the Common Stock.
(B) Any holder of shares of Series B Preferred Stock desiring to convert
such shares into shares of Common Stock shall surrender the certificate or
certificates representing the shares of Series B Preferred Stock being con-
verted, duly assigned or endorsed for transfer to the Corporation (or accompa-
nied by duly executed stock powers relating thereto), at the principal execu-
tive office of the Corporation or the offices of the transfer agent for the
Series B Preferred Stock or such office or offices in the continental United
States of an agent for conversion as may from time to time be designated by
notice to the holders of the Series B Preferred Stock by the Corporation or
the transfer agent for the Series B Preferred Stock, accompanied by written
notice of conversion. Such notice of conversion shall specify (i) the number
of shares of Series B Preferred Stock to be converted and the name or names in
which such holder wishes the certificate or certificates for Common Stock and
for any shares of Series B Preferred Stock not to be so converted to be issued
and (ii) the address to which such holder wishes new certificates issued upon
such conversion to be delivered.
(C) Upon surrender of a certificate representing a share or shares of Series
B Preferred Stock for conversion, the Corporation shall issue and send
18
<PAGE>
by hand delivery, by courier or by first class mail (postage prepaid), to the
holder thereof or to such holder's designee, at the address designated by such
holder, a certificate or certificates for the number of shares of Common Stock
to which such holder shall be entitled upon conversion. In the event that
there shall have been surrendered a certificate or certificates representing
shares of Series B Preferred Stock, only part of which are to be converted,
the Corporation shall issue and send to such holder or such holder's designee,
in the manner set forth in the preceding sentence, a new certificate or cer-
tificates representing the number of shares of Series B Preferred Stock which
shall not have been converted.
(D) The issuance by the Corporation of shares of Common Stock upon a conver-
sion of shares of Series B Preferred Stock into shares of Common Stock made at
the option of the holder thereof shall be effective as of the earlier of (i)
the delivery to such holder or such holder's designee of the certificates rep-
resenting the shares of Common Stock issued upon conversion thereof or (ii)
the commencement of business on the second Business Day after the surrender of
the certificate or certificates for the shares of Series B Preferred Stock to
be converted, duly assigned or endorsed for transfer to the Corporation (or
accompanied by duly executed stock powers relating thereto) and accompanied by
all documentation required to effect the conversion, as herein provided. On
and after the effective date of conversion, the person or persons entitled to
receive the Common Stock issuable upon such conversion shall be treated for
all purposes as the record holder or holders of such shares of Common Stock,
but no allowance or adjustment shall be made in respect of dividends payable
to holders of record of Common Stock as of any period prior to such effective
date. The Corporation shall not be obligated to pay any dividends which shall
have been declared and shall be payable to holders of shares of Series B Pre-
ferred Stock on a Dividend Payment Date if the Dividend Record Date for such
dividend is subsequent to the effective date of conversion of such shares.
(E) The Corporation shall not be obligated to deliver to holders of Series B
Preferred Stock any fractional share or shares of Common Stock issuable upon
any conversion of such shares of Series B Preferred Stock, but in lieu thereof
may make a cash payment in respect thereof in any manner permitted by law.
(F) The Corporation shall at all times reserve and keep available out of its
authorized and unissued Common Stock, solely for issuance upon the conversion
of shares of Series B Preferred Stock as herein provided, free from any pre-
emptive rights, such number of shares of Common Stock as shall from time to
time be issuable upon the conversion of all the shares of Series B Preferred
Stock then outstanding. Nothing contained herein shall preclude the Corpora-
tion from issuing shares of Common Stock held in its treasury upon the conver-
sion of shares of Series B Preferred Stock into Common Stock pursuant to the
terms hereof. The Corporation shall prepare and shall use its best efforts to
obtain and keep in force such governmental or regulatory permits or other au-
thorizations as may be required by law, and shall comply with all requirements
as to registration or qualification of the Common Stock, in order to enable
the Corporation lawfully to issue and
19
<PAGE>
deliver to each holder of record of Series B Preferred Stock such number of
shares of its Common Stock as shall from time to time be sufficient to effect
the conversion of all shares of Series B Preferred Stock then outstanding and
convertible into shares of Common Stock.
SECTION 6. REDEMPTION AT THE OPTION OF THE CORPORATION.
(A) The Series B Preferred Stock shall be redeemable, (i) in whole or in
part, at the option of the Corporation at any time after July 10, 1992, or
(ii) at any time after the date of issuance as provided by paragraph (E) of
this Section 6, at the following redemption prices per share:
<TABLE>
<CAPTION>
DURING THE
TWELVE-MONTH PERIOD PRICE PER
BEGINNING JULY 10, SHARE
------------------- ---------
<S> <C>
1989................................................... $76.32
1990................................................... 75.89
1991................................................... 75.46
1992................................................... 75.02
1993................................................... 74.59
1994................................................... 74.16
1995................................................... 73.73
1996................................................... 73.30
1997................................................... 72.86
1998................................................... 72.43
</TABLE>
and thereafter at $72.00 per share, plus, in each case, an amount equal to all
accrued and unpaid dividends thereon to the date fixed for redemption. Payment
of the redemption price shall be made by the Corporation in cash or shares of
Common Stock, or a combination thereof, as permitted by paragraph (H) of this
Section 6. From and after the date fixed for redemption, dividends on shares
of Series B Preferred Stock called for redemption will cease to accrue, such
shares of Series B Preferred Stock will no longer be deemed to be outstanding
and all rights in respect of such shares of Series B Preferred Stock shall
cease, except the right to receive the redemption price. If less than all of
the outstanding shares of Series B Preferred Stock are to be redeemed, the
Corporation shall either redeem a portion of the shares of Series B Preferred
Stock of each holder determined pro rata based on the number of shares of Se-
ries B Preferred Stock held by each holder or shall select the shares of Se-
ries B Preferred Stock to be redeemed by lot, as may be determined by the
Board of Directors of the Corporation.
(B) In the event shares of Series B Preferred Stock are called for redemp-
tion as provided in this Section 6 (other than paragraph (G) of this Section
6), unless otherwise required by law, notice of redemption will be sent to the
holders of Series B Preferred Stock at the address shown on the books of the
Corporation or any transfer agent for the Series B Preferred Stock by hand de-
livery, by courier, by standard form of telecommunication or by first class
mail (postage prepaid) delivered, sent or mailed, as the case may be, not less
than fifteen (15) days nor more than sixty (60) days prior to the date fixed
for redemption. Each such notice shall state: (i) the date fixed
20
<PAGE>
for redemption; (ii) the total number of shares of Series B Preferred Stock to
be redeemed and, if fewer than all the shares held by such holder are to be
redeemed, the number of such shares of Series B Preferred Stock to be redeemed
from such holder; (iii) the redemption price; (iv) the place or places where
certificates for such shares of Series B Preferred Stock are to be surrendered
for payment of the redemption price; (v) that dividends on the shares of Se-
ries B Preferred Stock to be redeemed will cease to accrue on such date fixed
for redemption; and (vi) the conversion rights of the shares of Series B Pre-
ferred Stock to be redeemed, the period within which conversion rights may be
exercised, and the Conversion Price and number of shares of Common Stock issu-
able upon conversion of a share of Series B Preferred Stock at the time. Upon
surrender of a certificate for shares of Series B Preferred Stock so called
for redemption (or redeemed pursuant to paragraph (G) of this Section 6) and
not previously converted (properly endorsed or assigned for transfer, if the
Board of Directors of the Corporation shall so require and the notice shall so
state), such shares shall be redeemed by the Corporation at the date fixed for
redemption and at the applicable redemption price set forth in this Section 6.
(C) Within thirty (30) days after the later of (i) the effective date, (ii)
the enactment date or (iii) if the Corporation contests in good faith in a ju-
dicial or administrative proceeding the legality of the change referred to in
this paragraph 6(C), the date such matter is finally determined (the time for
appeal having expired and no appeal having been filed) against the Corpora-
tion, of a change in any statute, rule or regulation of the United States of
America which has the effect of limiting or making unavailable to the Corpora-
tion all or any of the tax deductions for amounts paid (including dividends)
on the shares of Series B Preferred Stock when such amounts are used as pro-
vided under Section 404(k)(2) of the Internal Revenue Code of 1986, as amended
(the "Code") and in effect on the date shares of Series B Preferred Stock are
initially issued, the Corporation may, in its sole discretion and notwith-
standing anything to the contrary in paragraph (A) of this Section 6, elect to
redeem any or all of such shares of Series B Preferred Stock for the amount
payable in respect of such shares upon liquidation of the Corporation pursuant
to Section 4 hereof.
(D) In the event that shares of Series B Preferred Stock are held by an em-
ployee benefit plan intended to qualify as an employee stock ownership plan
within the meaning of Section 4975 of the Internal Revenue Code of 1986, as
amended, and such plan does not so qualify, the Corporation may in its sole
discretion and notwithstanding anything to the contrary in paragraph (A) of
this Section 6, elect to redeem any or all of such shares of Series B Pre-
ferred Stock at a redemption price equal to the higher of (i) the amount pay-
able in respect of the shares of Series B Preferred Stock being redeemed upon
liquidation of the Corporation pursuant to Section 4 hereof and (ii) the Fair
Market Value (as defined in paragraph (H) of Section 8 hereof) of the shares
of Common Stock which would be issuable upon the conversion of the shares of
Series B Preferred Stock being redeemed, plus accrued and unpaid dividends on
such shares of Series B Preferred Stock (the "Consideration Price").
21
<PAGE>
(E) In the event that the Plan is terminated or the employee stock ownership
plan component of the Plan pursuant to which the shares of Series B Preferred
Stock are then held by the Trustee is eliminated from the Plan in accordance
with its terms and notwithstanding anything to the contrary in paragraph (A)
of this Section 6, the Corporation shall, as soon thereafter as practicable,
call for redemption on the terms and conditions set forth in paragraphs (A)
and (B) of this Section 6 all then outstanding shares of Series B Preferred
Stock.
(F) Notwithstanding anything to the contrary in paragraph (A) of this Sec-
tion 6, upon the termination of a Plan participant's employment with the Cor-
poration, the Corporation may elect to redeem any or all shares of Series B
Preferred Stock held for the account of such participant at a redemption price
equal to the higher of (i) the amount payable in respect of the shares of Se-
ries B Preferred Stock being redeemed upon liquidation of the Corporation pur-
suant to Section 4 hereof and (ii) the Consideration Price.
(G) At any time and from time to time upon notice to the Corporation given
not less than five (5) Business Days prior to the date fixed by the holder in
such notice for the redemption pursuant to this paragraph 6(G), upon certifi-
cation by such holder to the Corporation that the holder must provide for dis-
tributions to participants under, or must satisfy an investment election pro-
vided to participants in accordance with, the Plan, then shares of Series B
Preferred Stock shall be redeemed by the Corporation, to the extent necessary
for the holder to provide for such distributions or to satisfy such investment
elections, at a redemption price equal to the higher of (i) the amount payable
in respect of the Series B Preferred Stock being redeemed upon liquidation of
the Corporation pursuant to Section 4 hereof and (ii) the Consideration Price.
(H) The Corporation, at its option, may make payment of the redemption price
required upon redemption of shares of Series B Preferred Stock in cash or in
shares of Common Stock, or in a combination of such shares and cash, any such
shares of Common Stock to be valued for such purposes at their Fair Market
Value.
SECTION 7. CONSOLIDATION, MERGER, ETC.
(A) In the event that the Corporation shall consummate any consolidation or
merger or similar business combination, pursuant to which the outstanding
shares of Common Stock are by operation of law exchanged solely for or
changed, reclassified or converted solely into stock of any successor or re-
sulting corporation (including the Corporation) that constitutes "qualifying
employer securities" with respect to a holder of Series B Preferred Stock
within the meaning of Section 409(l) of the Code, and Section 407(d)(5) of the
Employee Retirement Income Security Act of 1974, as amended, or any successor
provisions of law, and, if applicable, for a cash payment in lieu of frac-
tional shares, if any, the shares of Series B Preferred Stock of such holder
shall, in connection with such consolidation, merger or similar business com-
bination, be assumed by and shall become preferred stock of such successor
22
<PAGE>
or resulting corporation, having in respect of such corporation, insofar as
possible, the same powers, preferences and relative, participating, optional
or other special rights (including the redemption rights provided by Sections
6 and 7 hereof), and the qualifications, limitations or restrictions thereon,
that the Series B Preferred Stock had immediately prior to such transaction,
except that after such transaction each share of Series B Preferred Stock
shall be convertible, otherwise on the terms and conditions provided by Sec-
tion 5 hereof, into the number and kind of qualifying employer securities so
receivable by a holder of the number of shares of Common Stock into which such
shares of Series B Preferred Stock could have been converted immediately prior
to such transaction; provided, however, that if by virtue of the structure of
such transaction, a holder of Common Stock is required to make an election
with respect to the nature and kind of consideration to be received in such
transaction, which election cannot practicably be made by the holder of the
shares of Series B Preferred Stock, then, unless by virtue of such transaction
a holder of Common Stock who failed to exercise any rights of election would
be entitled to receive only qualifying employer securities and a cash payment,
if applicable, in lieu of fractional shares, the shares of Series B Preferred
Stock shall, by virtue of such transaction and on the same terms as apply to
the holders of Common Stock, be converted into or exchanged for the aggregate
amount of stock, securities, cash or other property (payable in kind) receiv-
able by a holder of the number of shares of Common Stock into which such
shares of Series B Preferred Stock could have been converted immediately prior
to such transaction if such holder of Common Stock failed to exercise any
rights of election (however, if the kind or amount of qualifying employer se-
curities receivable upon such transaction is not the same for each non-elect-
ing share, then the kind and amount so receivable upon such transaction for
each non-electing share shall be the kind and amount so receivable per share
by the plurality of the non-electing shares); and provided further that in the
event the consideration receivable by such a holder of Common Stock into which
such shares of Series B Preferred Stock could have been converted immediately
prior to such transaction if such holder of Common Stock failed to exercise
any such rights of election consists solely of such qualifying employer secu-
rities and a cash payment, if applicable, in lieu of fractional shares, then
the shares of Series B Preferred Stock shall be assumed by and become pre-
ferred stock of the successor or resulting corporation and shall be convert-
ible after such transaction, all as provided in the portion of this paragraph
7(A) prior to the first proviso hereof. The rights of the Series B Preferred
Stock as preferred stock of such successor or resulting corporation shall suc-
cessively be subject to adjustments pursuant to Sections 3 and 8 hereof after
any such transaction as nearly equivalent as practicable to the adjustment
provided for by such sections prior to such transaction. The Corporation shall
not consummate any such merger, consolidation or similar transaction unless
all then outstanding shares of Series B Preferred Stock shall be assumed and
authorized by the successor or resulting corporation as aforesaid.
(B) In the event that the Corporation shall consummate any consolidation or
merger or similar business combination, pursuant to which the
23
<PAGE>
outstanding shares of Common Stock are by operation of law exchanged for or
changed, reclassified or converted into other stock or securities or cash or
any other property, or any combination thereof, other than any such considera-
tion which is constituted solely of "qualifying employer securities" (as re-
ferred to in paragraph (A) of this Section 7) and cash payments, if applica-
ble, in lieu of fractional shares, outstanding shares of Series B Preferred
Stock shall, without any action on the part of the Corporation or any holder
thereof (but subject to paragraph (C) of this Section 7), be automatically
converted by virtue of such merger, consolidation or similar transaction imme-
diately prior to such consummation into the number of shares of Common Stock
into which such shares of Series B Preferred Stock are convertible at such
time so that each share of Series B Preferred Stock shall by virtue of such
transaction and on the same terms as apply to the holders of Common Stock, be
converted into or exchanged for the aggregate amount of stock, securities,
cash or other property (payable in like kind) receivable by a holder of the
number of shares of Common Stock into which such shares of Series B Preferred
Stock are convertible immediately prior to such transaction; provided, howev-
er, that if by virtue of the structure of such transaction, a holder of Common
Stock is required to make an election with respect to the nature and kind of
consideration to be received in such transaction, which election cannot prac-
ticably be made by the holder of the shares of Series B Preferred Stock, then
the shares of Series B Preferred Stock shall, by virtue of such transaction
and on the same terms as apply to the holders of Common Stock, be converted
into or exchanged for the aggregate amount of stock, securities, cash or other
property (payable in kind) receivable by a holder of the number of shares of
Common Stock into which such shares of Series B Preferred Stock could have
been converted immediately prior to such transaction if such holder of Common
Stock failed to exercise any rights of election as to the kind or amount of
stock, securities, cash or other property receivable upon such transaction
(provided that, if the kind or amount of stock, securities, cash or other
property receivable upon such transaction is not the same for each non-elect-
ing share, then the kind and amount of stock, securities, cash or other prop-
erty receivable upon such transaction for each non-electing share shall be the
kind and amount so receivable per share by a plurality of the non-electing
shares).
(C) In the event the Corporation shall enter into any agreement providing
for any consolidation or merger or similar business combination described in
paragraph (B) of this Section 7, or described in the first proviso in para-
graph (A) of this Section 7 if by virtue of such transaction a holder of Com-
mon Stock who failed to exercise any rights of election would be entitled to
receive consideration consisting of other than qualifying employer securities
and a cash payment, if applicable in lieu of fractional shares, then the Cor-
poration shall as soon as practicable thereafter (and in any event at least
thirteen (13) Business Days before consummation of such transaction) give no-
tice of such agreement and the material terms thereof to each holder of shares
of Series B Preferred Stock and each such holder shall have the right to
elect, by written notice to the Corporation, to receive, upon consummation of
such transaction (if and when such transaction is
24
<PAGE>
consummated), from the Corporation or the successor of the Corporation, in re-
demption and retirement of such Series B Preferred Stock, a cash payment equal
to the higher of (i) the amount payable in respect of the shares of Series B
Preferred Stock being redeemed pursuant to paragraph (A) of Section 6 hereof
and (ii) the Consideration Price. No such notice of redemption shall be effec-
tive unless given to the Corporation prior to the close of business on the
fifth Business Day prior to consummation of such transaction, unless the Cor-
poration or the successor of the Corporation shall waive such prior notice,
but any notice of redemption so given prior to such time may be withdrawn by
notice of withdrawal given to the Corporation prior to the close of business
on the fifth Business Day prior to consummation of such transaction.
SECTION 8. INITIAL ADJUSTMENT; ANTI-DILUTION ADJUSTMENTS.
(A) If the average of the last reported sales prices, regular way, per share
of the Common Stock, as reported on the New York Stock Exchange Composite Tape
for the five (5) consecutive NYSE trading days commencing on July 11, 1989 and
ending on (and including) July 17, 1989 (the "Adjusted Price") is less than
$72.00 (the "Closing Price"), then the Conversion Price in effect on July 17,
1989 shall be adjusted by multiplying such Conversion Price by a fraction, the
numerator of which is the Adjusted Price and the denominator of which is the
Closing Price; provided, however, in no event shall the Adjusted Price be less
that $67. If the Conversion Price is otherwise adjusted prior to the adjust-
ment provided for by this paragraph 8(A), the amounts of the Closing Price and
$67 specified above shall also be adjusted immediately prior to calculating
any adjustment pursuant to this paragraph 8(A) by multiplying each such amount
by a fraction, the numerator of which is the Conversion Price as of the close
of business on July 17, 1989 (giving effect to such other adjustment(s)) and
the denominator of which is the Conversion Price prior to such other
adjustment(s).
(B) In the event the Corporation shall, at any time or from time to time
while any of the shares of Series B Preferred Stock are outstanding, (i) pay a
dividend or make a distribution in respect of the Common Stock in shares of
Common Stock, (ii) subdivide the outstanding shares of Common Stock, or (iii)
combine the outstanding shares of Common Stock into a smaller number of
shares, in each case whether by reclassification of shares, recapitalization
of the Corporation (including a recapitalization effected by a merger or con-
solidation to which Section 7 hereof does not apply) or otherwise, subject to
paragraphs (F) and (G) of this Section 8, the Conversion Price in effect imme-
diately prior to such action shall be adjusted by multiplying such Conversion
Price by a fraction, the numerator of which is the number of shares of Common
Stock outstanding immediately before such event, and the denominator of which
is the number of shares of Common Stock outstanding immediately after such
event. An adjustment made pursuant to this paragraph 8(B) shall be given ef-
fect, upon payment of such a dividend or distribution, as of the record date
for the determination of stockholders entitled to receive such dividend or
distribution (on a retroactive basis) and in the
25
<PAGE>
case of a subdivision or combination shall become effective immediately as of
the effective date thereof.
(C) In the event that the Corporation shall, at any time or from time to
time while any of the shares of Series B Preferred Stock are outstanding, is-
sue to holders of shares of Common Stock as a dividend or distribution, in-
cluding by way of a reclassification of shares or a recapitalization of the
Corporation, any right or warrant to purchase shares of Common Stock (but not
including as such a right or warrant any security convertible into or ex-
changeable for shares of Common Stock) at a purchase price per share less than
the Fair Market Value of a share of Common Stock on the date of issuance of
such right or warrant, then, subject to paragraphs (F) and (G) of this Section
8, the Conversion Price shall be adjusted by multiplying such Conversion Price
by a fraction, the numerator of which shall be the number of shares of Common
Stock outstanding immediately before such issuance of rights or warrants plus
the number of shares of Common Stock which could be purchased at the Fair Mar-
ket Value of a share of Common Stock at the time of such issuance for the max-
imum aggregate consideration payable upon exercise in full of all such rights
or warrants, and the denominator of which shall be the number of shares of
Common Stock outstanding immediately before such issuance of rights or war-
rants plus the maximum number of shares of Common Stock that could be acquired
upon exercise in full of all such rights and warrants.
(D) In the event the Corporation shall, at any time or from time to time
while any of the shares of Series B Preferred Stock are outstanding, issue,
sell or exchange shares of Common Stock (other than (i) pursuant to any right
or warrant to purchase or acquire shares of Common Stock (including as such a
right or warrant any security convertible into or exchangeable for shares of
Common Stock), (ii) any such issuance to holders of shares of Common Stock as
a dividend or distribution (including by way of a reclassification of shares
or a recapitalization of the Corporation), (iii) pursuant to any employee or
director incentive or benefit plan or arrangement, including any employment,
severance or consulting agreement, or stockholder dividend reinvestment or
stock purchase plan, of the Corporation or any subsidiary of the Corporation
heretofore or hereafter adopted or (iv) pursuant to an agreement to issue,
sell or exchange shares of Common Stock at a price per share at or above the
Fair Market Value per share of Common Stock on the date such agreement was ex-
ecuted) for a consideration having a Fair Market Value, on the date of such
issuance, sale or exchange, less than the Fair Market Value of such shares on
the date of issuance, sale or exchange, then, subject to paragraphs (F) and
(G) of this Section 8, the Conversion Price shall be adjusted by multiplying
such Conversion Price by a fraction, the numerator of which shall be the sum
of (a) the Fair Market Value of all the shares of Common Stock outstanding on
the day immediately preceding the first public announcement of such issuance,
sale or exchange plus (b) the Fair Market Value of the consideration received
by the Corporation in respect of such issuance, sale or exchange of shares of
Common Stock, and the denominator of which shall be the product of (x) the
Fair Market Value of a share of Common Stock on the day
26
<PAGE>
immediately preceding the first public announcement of such issuance, sale or
exchange multiplied by (y) the sum of the number of shares of Common Stock
outstanding on such day plus the number of shares of Common Stock so issued,
sold or exchanged by the Corporation. In the event the Corporation shall, at
any time or from time to time while any shares of Series B Preferred Stock are
outstanding, issue, sell or exchange any right or warrant to purchase or ac-
quire shares of Common Stock (including as such a right or warrant any secu-
rity issued after the date hereof which is convertible into or exchangeable
for shares of Common Stock), other than any such issuance to holders of shares
of Common Stock as a dividend or distribution (including by way of a reclassi-
fication of shares or a recapitalization of the Corporation), other than pur-
suant to any employee or director incentive or benefit plan or arrangement
(including any employment, severance or consulting agreement) or stockholder
dividend reinvestment or stock purchase plan of the Corporation or any subsid-
iary of the Corporation heretofore or hereafter adopted and other than an
agreement to issue, sell or exchange shares of Common Stock at a price per
share at or above the Fair Market Value per share of Common Stock on the date
such agreement was executed, for a consideration having a Fair Market Value,
on the date of such issuance, sale or exchange, less than the Non-Dilutive
Amount (as hereinafter defined), then, subject to paragraphs (F) and (G) of
this Section 8, the Conversion Price shall be adjusted by multiplying such
Conversion Price by a fraction the numerator of which shall be the sum of (I)
the Fair Market Value of all the shares of Common Stock outstanding on the day
immediately preceding the first public announcement of such issuance, sale or
exchange plus (II) the Fair Market Value of the consideration received by the
Corporation in respect of such issuance, sale or exchange of such right or
warrant plus (III) the Fair Market Value at the time of such issuance of the
consideration which the Corporation would receive upon exercise in full of all
such rights or warrants, and the denominator of which shall be the product of
(i) the Fair Market Value of a share of Common Stock on the day immediately
preceding the first public announcement of such issuance, sale or exchange
multiplied by (ii) the sum of the number of shares of Common Stock outstanding
on such day plus the maximum number of shares of Common Stock which could be
acquired pursuant to such right or warrant at the time of the issuance, sale
or exchange of such right or warrant (assuming shares of Common Stock could be
acquired pursuant to such right or warrant at such time).
(E) In the event the Corporation shall, at any time or from time to time
while any of the shares of Series B Preferred Stock are outstanding, make an
Extraordinary Distribution (as hereinafter defined) in respect of the Common
Stock, whether by dividend, distribution, reclassification of shares or recap-
italization of the Corporation (including a recapitalization or reclassifica-
tion effected by a merger or consolidation to which Section 7 hereof does not
apply) or effect a Pro Rata Repurchase (as hereinafter defined) of Common
Stock, the Conversion Price in effect immediately prior to such Extraordinary
Distribution or Pro Rata Repurchase shall, subject to paragraphs (F) and (G)
of this Section 8, be adjusted by
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multiplying such Conversion Price by the fraction the numerator of which is
the difference between (i) the product of (x) the number of shares of Common
Stock outstanding immediately before such Extraordinary Distribution or Pro
Rata Repurchase multiplied by (y) the Fair Market Value of a share of Common
Stock on the day before the ex-dividend date with respect to an Extraordinary
Distribution which is paid in cash and on the distribution date with respect
to an Extraordinary Distribution which is paid other than in cash, or the ear-
lier of the ex-dividend date and the distribution date in the event of an Ex-
traordinary Distribution, a portion of which is paid in cash and a portion of
which is paid other than in cash, or on the applicable expiration date (in-
cluding all extensions thereof) of any tender or exchange offer which is a Pro
Rata Repurchase, or on the date of purchase with respect to any Pro Rata Re-
purchase which is not a tender or exchange offer, as the case may be, and (ii)
the Fair Market Value of the Extraordinary Distribution or the aggregate pur-
chase price of the Pro Rata Repurchase, as the case may be, and the denomina-
tor of which shall be the product of (a) the number of shares of Common Stock
outstanding immediately before such Extraordinary Dividend or Pro Rata Repur-
chase minus, in the case of a Pro Rata Repurchase, the number of shares of
Common Stock repurchased by the Corporation multiplied by (b) the Fair Market
Value of a share of Common Stock on the day before the ex-dividend date with
respect to an Extraordinary Distribution which is paid in cash and on the
distribution date with respect to an Extraordinary Distribution which is paid
other than in cash, or the earlier of the ex-dividend date and the distribution
date in the event of an Extraordinary Distribution, a portion of which is paid
in cash and a portion of which is paid other than in cash, or on the applicable
expiration date (including all extensions thereof) of any tender offer which is
a Pro Rata Repurchase or on the date of purchase with respect to any Pro Rata
Repurchase which is not a tender offer, as the case may be. The Corporation
shall send each holder of Series B Preferred Stock (i) notice of its intent to
make any dividend or distribution and (ii) notice of any offer by the
Corporation to make a Pro Rata Repurchase, in each case at the same time as, or
as soon as practicable after, such offer is first communicated (including by
announcement of a record date in accordance with the rules of any stock exchange
on which the Common Stock is listed or admitted to trading) to holders of
Common Stock. Such notice shall indicate the intended record date and the
amount and nature of such dividend or distribution, or the number of shares
subject to such offer for a Pro Rata Repurchase and the purchase price payable
by the Corporation pursuant to such offer, as well as the Conversion Price and
the number of shares of Common Stock into which a share of Series B Preferred
Stock may be converted at such time.
(F) Notwithstanding any other provisions of this Section 8, the Corporation
shall not be required to make any adjustment to the Conversion Price unless such
adjustment would require an increase or decrease of at least one percent (1%) in
the Conversion Price. Any lesser adjustment shall be carried forward and shall
be made no later than the time of, and together with, the
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next subsequent adjustment which, together with any adjustment or adjustments
so carried forward, shall amount to an increase or decrease of at least one
percent (1%) in the Conversion Price.
(G) If the Corporation shall make any dividend or distribution on the Common
Stock or issue any Common Stock, other capital stock or other security of the
Corporation or any rights or warrants to purchase or acquire any such securi-
ty, which transaction does not result in an adjustment to the Conversion Price
pursuant to the foregoing provisions of this Section 8, the Board of Directors
of the Corporation may consider whether such action is of such a nature that
an adjustment to the Conversion Price should equitably be made in respect of
such transaction. If the Board of Directors of the Corporation determines that
an adjustment to the Conversion Price should be made, an adjustment shall be
made effective as of such date, as determined by the Board of Directors of the
Corporation. The determination of the Board of Directors of the Corporation as
to whether an adjustment to the Conversion Price should be made pursuant to
the foregoing provisions of this paragraph 8(G), and, if so, as to what ad-
justment should be made and when, shall be final and binding on the Corpora-
tion and all stockholders of the Corporation. The Corporation shall be enti-
tled to make such additional adjustments in the Conversion Price, in addition
to those required by the foregoing provisions of this Section 8, as shall be
necessary in order that any dividend or distribution in shares of capital
stock of the Corporation, subdivision, reclassification or combination of
shares of stock of the Corporation or any recapitalization of the Corporation
shall not be taxable to the holders of the Common Stock.
(H) For purposes of this Resolution, the following definitions shall apply:
"Adjustment Period" shall mean the period of five (5) consecutive trad-
ing days preceding the date as of which the Fair Market Value of a secu-
rity is to be determined.
"Business Day" shall mean each day that is not a Saturday, Sunday or a
day on which state or federally chartered banking institutions in New
York, New York are not required to be open.
"Current Market Price" of publicly traded shares of Common Stock or any
other class of capital stock or other security of the Corporation or any
other issuer for any day shall mean the last reported sales price, regu-
lar way on such day, or, in the event that no sale takes place on such
day, the average of the reported closing bid and asked prices on such
day, regular way, in either case as reported on the New York Stock Ex-
change Composite Tape or, if such security is not listed or admitted to
trading on the NYSE, on the principal national securities exchange on
which such security is listed or admitted to trading or, if not listed or
admitted to trading on any national securities exchange, on the National
Market System of the National Association of Securities Dealers, Inc. Au-
tomated Quotations System ("NASDAQ") or, if such security is not quoted
on such National Market System, the average of the closing bid and asked
prices on such day in the over-the-counter market as reported by NASDAQ
or, if bid and asked prices for such security
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on such day shall not have been reported through NASDAQ, the average of
the bid and asked prices on such day as furnished by any NYSE member firm
regularly making a market in such security selected for such purpose by
the Board of Directors of the Corporation or a committee thereof.
"Extraordinary Distribution" shall mean any dividend or other distribu-
tion to holders of Common Stock (effected while any of the shares of the
Series B Preferred Stock are outstanding) (i) of cash (other than a regu-
larly scheduled quarterly dividend not exceeding 125% of the average
quarterly dividend for the preceding period of 12 months), where the ag-
gregate amount of such cash dividend or distribution together with the
amount of all cash dividends and distributions made during the preceding
period of 12 months (other than regularly scheduled quarterly dividends
not exceeding 125% of the aggregate quarterly dividends for the preceding
period of 12 months), when combined with the aggregate amount of all Pro
Rata Repurchases (for this purpose, including only that portion of the
aggregate purchase price of such Pro Rata Repurchase which is in excess
of the Fair Market Value of the Common Stock repurchased as determined on
the applicable expiration date (including all extensions thereof) of any
tender offer or exchange offer which is a Pro Rata Repurchase, or the
date of purchase with respect to any other Pro Rata Repurchase which is
not a tender offer or exchange offer made during such period), exceeds
nine percent (9%) of the aggregate Fair Market Value of all shares of
Common Stock outstanding on the day before the ex-dividend date with re-
spect to such Extraordinary Distribution which is paid in cash and on the
distribution date with respect to an Extraordinary Distribution which is
paid other than in cash, and the earlier of the ex-dividend date and the
distribution date in the event of an Extraordinary Distribution, a por-
tion of which is paid in cash and a portion of which is paid other than
in cash, and (ii) of any shares of capital stock of the Corporation
(other than shares of Common Stock), other securities of the Corporation
(other than securities of the type referred to in paragraph (C) or (D) of
this Section 8), evidences of indebtedness of the Corporation or any
other person or any other property (including shares of any subsidiary of
the Corporation) or any combination thereof. The Fair Market Value of an
Extraordinary Distribution for purposes of paragraph (E) of this Section
8 shall be equal to the sum of the Fair Market Value of such Extraordi-
nary Distribution plus the amount of any cash dividends (other than regu-
larly scheduled quarterly dividends not exceeding 125% of the aggregate
quarterly dividends for the preceding period of 12 months) which are not
Extraordinary Distributions made during such 12-month period and not pre-
viously included in the calculation of an adjustment pursuant to para-
graph (E) of this Section 8.
"Fair Market Value" shall mean, as to shares of Common Stock or any
other class of capital stock or securities of the Corporation or any
other issuer which are publicly traded, (i) for purposes of Section 6
hereof, the Current Market Price on the date as of which the Fair
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<PAGE>
Market Value is to be determined, and (ii) for all other purposes hereof,
the average of the Current Market Prices of such shares or securities for
each day of the Adjustment Period. The Fair Market Value of any security
which is not publicly traded (other than the Series B Preferred Stock) or
of any other property shall mean the fair value thereof as determined by
an independent investment banking or appraisal firm experienced in the
valuation of such securities or property selected in good faith by the
Board of Directors of the Corporation or a committee thereof, or, if no
such investment banking or appraisal firm is in the good faith judgment
of the Board of Directors or such committee available to make such deter-
mination, as determined in good faith by the Board of Directors of the
Corporation or such committee.
"Non-Dilutive Amount" in respect of an issuance, sale or exchange by
the Corporation of any right or warrant to purchase or acquire shares of
Common Stock (including any security convertible into or exchangeable for
shares of Common Stock) shall mean the difference between (i) the product
of the Fair Market Value of a share of Common Stock on the day preceding
the first public announcement of such issuance, sale or exchange multi-
plied by the maximum number of shares of Common Stock which could be ac-
quired on such date upon the exercise in full of such right or warrant
(including upon the conversion or exchange of any such convertible or ex-
changeable security), whether or not exercisable (or convertible or exchange-
able) at such date, and (ii) the aggregate amount payable pursuant to
such right or warrant to purchase or acquire such maximum number of
shares of Common Stock; provided, however, that in no event shall the
Non-Dilutive Amount be less than zero. For purposes of the foregoing sen-
tence, in the case of a security convertible into or exchangeable for
shares of Common Stock, the amount payable pursuant to a right or warrant
to purchase or acquire shares of Common Stock shall be the Fair Market
Value of such security on the date of the issuance, sale or exchange of
such security by the Corporation.
"Pro Rata Repurchase" shall mean any purchase of shares of Common Stock
by the Corporation or any subsidiary thereof, whether for cash, shares of
capital stock of the Corporation, other securities of the Corporation,
evidences of indebtedness of the Corporation or any other person or any
other property (including shares of a subsidiary of the Corporation), or
any combination thereof, effected while any of the shares of Series B
Preferred Stock are outstanding, pursuant to any tender offer or exchange
offer subject to Section 13(e) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), or any successor provision of law, or pur-
suant to any other offer available to substantially all holders of Common
Stock; provided, however, that no purchase of shares by the Corporation
or any subsidiary thereof made in open market transactions shall be
deemed a Pro Rata Repurchase. For purposes of this paragraph 8 (H) shares
shall be deemed to have been purchased by the Corporation or any subsidi-
ary thereof "in open
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<PAGE>
market transactions" only if they have been purchased substantially in
accordance with the requirements of Rule 10b-18 as in effect under the
Exchange Act, on the date shares of Series B Preferred Stock are ini-
tially issued by the Corporation or on such other terms and conditions as
the Board of Directors of the Corporation or a committee thereof shall
have determined are reasonably designed to prevent such purchases from
having a material effect on the trading market for the Common Stock.
(I) Whenever an adjustment to the Conversion Price and the voting rights of
the Series B Preferred Stock is required hereby, the Corporation shall forth-
with place on file with the transfer agent for the Common Stock and the Series
B Preferred Stock, and with the Secretary of the Corporation, a statement
signed by two officers of the Corporation stating the adjusted Conversion
Price determined as provided herein and the resulting conversion ratio, and
the adjusted voting rights determined as provided herein, of the Series B Pre-
ferred Stock. Such statement shall set forth in reasonable detail such facts
as shall be necessary to show the reason and the manner of computing such ad-
justment, including any determination of Fair Market Value involved in such
computation. Promptly after each adjustment to the Conversion Price and the
voting rights of the shares of the Series B Preferred Stock, the Corporation
shall mail a notice thereof and of the then prevailing conversion ratio to
each holder of shares of Series B Preferred Stock.
SECTION 9. RANKING; ATTRIBUTABLE CAPITAL AND ADEQUACY OF SURPLUS; RETIREMENT
OF SHARES.
(A) the Series B Preferred Stock shall rank senior to the Common Stock as to
the payment of dividends and the distribution of assets on liquidation, disso-
lution and winding up of the Corporation and, unless otherwise provided in the
Certificate of Incorporation of the Corporation, as the same may be amended,
or a Certificate of Designation relating to a subsequent series of Preferred
Stock of the Corporation, the Series B Preferred Stock shall rank senior to
all series of the Corporation's Preferred Stock as to the payment of dividends
and the distribution of assets on liquidation, dissolution or winding up.
(B) In addition to any vote of stockholders required by law, the vote of the
holders of a majority of the outstanding shares of Series B Preferred Stock,
voting as a single class, shall be required to increase the par value of the
Common Stock or otherwise increase the capital of the Corporation allocable to
the Common Stock for the purpose of the Delaware General Corporation Law
("DGCL") if, as a result thereof, the surplus of the Corporation for purposes
of the DGCL would be less than the amount of Preferred Dividends that would
accrue on the then outstanding shares of Series B Preferred Stock during the
following three years.
(C) Any shares of Series B Preferred Stock acquired by the Corporation by
reason of the conversion or redemption of such shares as herein provided, or
otherwise so acquired, shall be retired as shares of Series B Preferred Stock
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and restored to the status of authorized but unissued shares of Preferred
Stock of the Corporation, undesignated as to series, and may thereafter be re-
issued as part of a new series of such Preferred Stock as permitted by law.
SECTION 10. MISCELLANEOUS.
(A) All notices referred to herein shall be in writing, and all notices
hereunder shall be deemed to have been given upon the earlier of delivery
thereof if by hand delivery, by courier or by standard form of telecommunica-
tion or three (3) Business Days after the mailing thereof if sent by regis-
tered mail (unless first class mail shall be specifically permitted for such
notice under the terms hereof) with postage prepaid, addressed: (i) if to the
Corporation, to its office at 1030 Delta Boulevard, Hartsfield Atlanta Inter-
national Airport, Atlanta, Georgia 30320 (Attention: Secretary) or to the
transfer agent for the Series B Preferred Stock, or other agent of the Corpo-
ration designated as permitted hereby or (ii) if to any holder of the Series B
Preferred Stock or Common Stock, as the case may be, to such holder at the ad-
dress of such holder as listed in the stock record books of the Corporation
(which may include the records of any transfer agent for the Series B Pre-
ferred Stock or Common Stock, as the case may be) or (iii) to such other ad-
dress as the Corporation or any such holder, as the case may be, shall have
designated by notice similarly given.
(B) The term "Common Stock" as used in this Resolution means the Corpora-
tion's Common Stock, par value $3.00 per share, as the same exists at the date
of filing of a Certificate of Designation relating to the Series B Preferred
Stock or any other class of stock resulting from successive changes or reclas-
sifications of such Common Stock consisting solely of changes in par value, or
from par value to no par value, or from no par value to par value. In the
event that, at any time as a result of an adjustment made pursuant to Section
8 hereof, the holder of any share of Series B Preferred Stock upon thereafter
surrendering such shares for conversion, shall become entitled to receive any
shares or other securities of the Corporation other than shares of Common
Stock, the Conversion Price in respect of such other shares or securities so
receivable upon conversion of Series B Preferred Stock shall thereafter be ad-
justed, and shall be subject to further adjustment from time to time, in a
manner and on terms as nearly equivalent as practicable to the provisions with
respect to Common Stock contained in Section 8 hereof, and the provisions of
Sections 1 through 7, 9 and 10 hereof with respect to the Common Stock shall
apply on like or similar terms to any such other shares or securities.
(C) The Corporation shall pay any and all stock transfer and documentary
stamp taxes that may be payable in respect of any issuance or delivery of
shares of Series B Preferred Stock or shares of Common Stock or other securi-
ties issued on account of Series B Preferred Stock pursuant hereto or certifi-
cates representing such shares or securities. The Corporation shall not, how-
ever, be required to pay any such tax which may be payable in respect of any
transfer involved in the issuance or delivery of shares of Series B Preferred
Stock or Common Stock or other securities in a name other than
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that in which the shares of Series B Preferred Stock with respect to which
such shares or other securities are issued or delivered were registered, or in
respect of any payment to any person with respect to any such shares or secu-
rities other than a payment, to the registered holder thereof, and shall not
be required to make any such issuance, delivery or payment unless and until
the person otherwise entitled to such issuance, delivery or payment has paid
to the Corporation the amount of any such tax or has established, to the sat-
isfaction of the Corporation, that such tax has been paid or is not payable.
(D) In the event that a holder of shares of Series B Preferred Stock shall
not by written notice designate the name in which shares of Common Stock to be
issued upon conversion of such shares should be registered or to whom payment
upon redemption of shares of Series B Preferred Stock should be made or the
address to which the certificate or certificates representing such shares, or
such payment, should be sent, the Corporation shall be entitled to register
such shares, and make such payment, in the name of the holder of such Series B
Preferred Stock as shown on the records of the Corporation and to send the
certificate or certificates representing such shares, or such payment, to the
address of such holder shown on the records of the Corporation.
(E) Unless otherwise provided in the Certificate of Incorporation, as the
same may be amended, of the Corporation, all payments in the form of divi-
dends, distributions on voluntary or involuntary dissolution, liquidation or
winding up or otherwise made upon the Series B Preferred Stock and any other
stock ranking on a parity with the Series B Preferred Stock with respect to
such dividend or distribution shall be pro rata, so that amounts paid per
share of Series B Preferred Stock and such other stock shall in all cases bear
to each other the same ratio that the required dividends, distributions or
payments, as the case may be, then payable per share on the Series B Preferred
Stock and such other stock bear to each other.
(F) Any determination required or permitted to be made by the Corporation's
Board of Directors hereunder may be made by a committee appointed by the Cor-
poration's Board of Directors which need not include members of the Corpora-
tion's Board of Directors.
(G) The Corporation may appoint, and from time to time discharge and change,
a transfer agent for the Series B Preferred Stock. Upon any such appointment or
discharge of a transfer agent, the Corporation shall send notice thereof by
hand delivery, by courier, by standard form of telecommunication or by first
class mail, (postage prepaid), to each holder of record of Series B Preferred
Stock.
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IN WITNESS WHEREOF, this certificate has been executed and attested by the
undersigned this 10th day of July, 1989.
/s/ Ronald W. Allen
---------------------------------------
Name: Ronald W. Allen
Title: Chairman of the Board and
Chief Executive Officer
Attest:
/s/ James W. Callison
- ---------------------------------------
Name: James W. Callison
Title: Secretary
35
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CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RIGHTS
OF SERIES D JUNIOR PARTICIPATING PREFERRED STOCK
OF
DELTA AIR LINES, INC.
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
We, Ronald W. Allen, Chairman of the Board, President and Chief Executive
Officer, and Robert S. Harkey, Corporate Secretary, of Delta Air Lines, Inc., a
corporation organized and existing under the General Corporation Law of the
State of Delaware, in accordance with the provisions thereof, DO HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of Directors by the
Certificate of Incorporation of the Company, the Board of Directors on October
24, 1996, adopted the following resolution creating a series of 1,500,000 shares
of Preferred Stock designated as Series D Junior Participating Preferred Stock:
RESOLVED, that pursuant to the authority vested in the Board of Directors
of this Company in accordance with the provisions of its Certificate of
Incorporation (the "Charter"), a series of Preferred Stock of the Company be,
and it hereby is, created and classified, and that the designation and amount
thereof and the voting powers, preferences and relative, participating, optional
and other special rights of the shares of such series, and the qualifications,
limitations or restrictions thereof are as follows:
Section 1. Designation and Number of Shares. The shares of such series
shall be designated as "Series D Junior Participating Preferred Stock" (the
"Series D Preferred Stock"), and the number of shares constituting such series
shall be 1,500,000. Such number of shares of the Series D Preferred Stock may
be increased or decreased by resolution of the Board of Directors; provided that
no decrease shall reduce the number of shares of Series D Preferred Stock to a
number less than the number of shares then outstanding plus the number of shares
issuable upon exercise or conversion of outstanding rights, options or other
securities issued by the Company.
Section 2. Dividends and Distributions.
(A) The holders of shares of Series D Preferred Stock shall be entitled to
receive, when, as and if declared by the Board of Directors out of funds legally
available for the purpose, quarterly dividends payable on the first day of
March, June, September and December of each year (each such date being referred
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<PAGE>
to herein as a "Quarterly Dividend Payment Date"), commencing on the first
Quarterly Dividend Payment Date after the first issuance of any share or
fraction of a share of Series D Preferred Stock, in an amount per share (rounded
to the nearest cent) equal to the greater of (a) $1.00 and (b) subject to the
provision for adjustment hereinafter set forth, 100 times the aggregate per
share amount of all cash dividends or other cash distributions and 100 times the
aggregate per share amount of all non-cash dividends or other non-cash
distributions (other than (i) a dividend payable in shares of Common Stock, par
value $3.00 per share, of the Company (the "Common Stock") or (ii) a subdivision
of the outstanding shares of Common Stock (by reclassification or otherwise)),
declared on the Common Stock since the immediately preceding Quarterly Dividend
Payment Date, or, with respect to the first Quarterly Dividend Payment Date,
since the first issuance of any share or fraction of a share of Series D
Preferred Stock. If the Company shall at any time after November 4, 1996 (the
"Rights Declaration Date") pay any dividend on Common Stock payable in shares of
Common Stock or effect a subdivision or combination of the outstanding shares of
Common Stock (by reclassification or otherwise) into a greater or lesser number
of shares of Common Stock, then in each such case the amount to which holders of
shares of Series D Preferred Stock were entitled immediately prior to such event
under clause (b) of the preceding sentence shall be adjusted by multiplying such
amount by a fraction the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding immediately prior to
such event.
(B) The Company shall declare a dividend or distribution on the Series D
Preferred Stock as provided in paragraph (A) above immediately after it declares
a dividend or distribution on the Common Stock (other than as described in
clauses (i) and (ii) of the first sentence of paragraph (A)); provided that if
no dividend or distribution shall have been declared on the Common Stock during
the period between any Quarterly Dividend Payment Date and the next subsequent
Quarterly Dividend Payment Date (or, with respect to the first Quarterly
Dividend Payment Date, the period between the first issuance of any share or
fraction of a share of Series D Preferred Stock and such first Quarterly
Dividend Payment Date), a dividend of $1.00 per share on the Series D Preferred
Stock shall nevertheless be payable on such subsequent Quarterly Dividend
Payment Date.
(C) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series D Preferred Stock from the Quarterly Dividend Payment Date next
preceding the date of issue of such shares of Series D Preferred Stock, unless
the date of issue of such shares is on or before the record date for the first
Quarterly Dividend Payment Date, in which case dividends on such shares shall
begin to accrue and be cumulative from the date of issue of such shares, or
unless the date of issue is a date after the record date for the determination
of holders of shares of Series D Preferred Stock entitled to receive a quarterly
dividend and on or before such Quarterly Dividend Payment Date, in which case
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dividends shall begin to accrue and be cumulative from such Quarterly Dividend
Payment Date. Accrued but unpaid dividends shall not bear interest. Dividends
paid on shares of Series D Preferred Stock in an amount less than the total
amount of such dividends at the time accrued and payable on such shares shall be
allocated pro rata on a share-by-share basis among all such shares at the time
outstanding. The Board of Directors may fix a record date for the determination
of holders of shares of Series D Preferred Stock entitled to receive payment of
a dividend or distribution declared thereon, which record date shall not be more
than 60 days prior to the date fixed for the payment thereof.
Section 3. Voting Rights. In addition to any other voting rights required
by law, the holders of shares of Series D Preferred Stock shall have the
following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth, each
share of Series D Preferred Stock shall entitle the holder thereof to 100 votes
on all matters submitted to a vote of stockholders of the Company. If the
Company shall at any time after the Rights Declaration Date pay any dividend on
Common Stock payable in shares of Common Stock or effect a subdivision or
combination of the outstanding shares of Common Stock (by reclassification or
otherwise) into a greater or lesser number of shares of Common Stock, then in
each such case the number of votes per share to which holders of shares of
Series D Preferred Stock were entitled immediately prior to such event shall be
adjusted by multiplying such number by a fraction the numerator of which is the
number of shares of Common Stock outstanding immediately after such event and
the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(B) Except as otherwise provided herein or by law, the holders of shares
of Series D Preferred Stock and the holders of shares of Common Stock shall vote
together as a single class on all matters submitted to a vote of stockholders of
the Company.
(C) (i) If at any time dividends on any Series D Preferred Stock shall be
in arrears in an amount equal to six quarterly dividends thereon, the occurrence
of such contingency shall mark the beginning of a period (herein called a
"default period") which shall extend until such time when all accrued and unpaid
dividends for all previous quarterly dividend periods and for the current
quarterly dividend period on all shares of Series D Preferred Stock then
outstanding shall have been declared and paid or set apart for payment. During
each default period, all holders of Preferred Stock (including holders of the
Series D Preferred Stock) with dividends in arrears in an amount equal to six
quarterly dividends thereon, voting together as a single class, irrespective of
series, shall have the right to elect two Directors and, to the extent necessary
to permit the election of such Directors, the number of Directors constituting
the Board of Directors of the Company shall be increased to the maximum number
of Directors then permitted by the Company's Charter. In the event that such
increase does not result in a sufficient number of vacancies to allow the
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<PAGE>
election of two Directors by the holders of the Series D Preferred Stock, then,
at the next annual meeting, the Board of Directors of the Company shall take
such action as is necessary to allow such holders to elect a number of Directors
so that the number of Directors elected by such holders at all times equals two.
(ii) During any default period, such voting right of the holders of Series
D Preferred Stock may be exercised initially at a special meeting called
pursuant to subparagraph (iii) of this Section 3(C) or at any annual meeting of
stockholders, and thereafter at annual meetings of stockholders, provided that
neither such voting right nor the right of the holders of any other series of
Preferred Stock, if any, to increase, in certain cases, the authorized number of
Directors shall be exercised unless the holders of 10% in number of shares of
Preferred Stock outstanding shall be present in person or by proxy. The absence
of a quorum of holders of Common Stock shall not affect the exercise by holders
of Preferred Stock of such voting right. At any meeting at which holders of
Preferred Stock shall exercise such voting right initially during an existing
default period, they shall have the right, voting as a class, to elect Directors
to fill such vacancies, if any, in the Board of Directors as may then exist up
to two Directors or, if such right is exercised at an annual meeting, to elect
two Directors. If the number which may be so elected at any special meeting
does not equal two, the holders of the Preferred Stock shall have the right at
the next annual meeting to elect a number of Directors as shall be necessary to
permit the election by them of two Directors. After the holders of the
Preferred Stock shall have exercised their right to elect Directors in any
default period and during the continuance of such period, the number of
Directors shall not be increased or decreased except by vote of the holders of
Preferred Stock as herein provided or pursuant to the rights of any equity
securities ranking senior to or pari passu with the Series D Preferred Stock.
(iii) Unless the holders of Preferred Stock shall, during an existing
default period, have previously exercised their right to elect Directors, the
Board of Directors may order, or any stockholder or stockholders owning in the
aggregate not less than 10% of the total number of shares of Preferred Stock
outstanding, irrespective of series, may request, the calling of special meeting
of holders of Preferred Stock, which meeting shall thereupon be called by the
President, a Vice President or the Secretary of the Company. Notice of such
meeting and of any annual meeting at which holders of Preferred Stock are
entitled to vote pursuant to this paragraph (C) (iii) shall be given to each
holder of record of Preferred Stock by mailing a copy of such notice to him at
his last address as the same appears on the books of the Company. Such meeting
shall be called for a time not earlier than 20 days and not later than 60 days
after such order or request or in default of the calling of such meeting within
60 days after such order or request, such meeting may be called on similar
notice by any stockholder or stockholders owning in the aggregate not less than
10% of the total number of shares of Preferred Stock outstanding, irrespective
of series. Notwithstanding the provisions of this paragraph (C) (iii), no such
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special meeting shall be called during the period within 60 days immediately
preceding the date fixed for the next annual meeting of stockholders.
(iv) In any default period, the holders of Common Stock, and other classes
of stock of the Company if applicable, shall continue to be entitled to elect
the whole number of Directors until the holders of Preferred Stock shall have
exercised their right to elect two Directors voting as a class, after the
exercise of which right (x) the Directors so elected by the holders of Preferred
Stock shall continue in office until their successors shall have been elected by
such holders or until the expiration of the default period, and (y) any vacancy
in the Board of Directors may (except as provided in paragraph (C) (ii) of this
Section 3) be filled by vote of a majority of the remaining Directors
theretofore elected by the holders of the class of stock which elected the
Director whose office shall have become vacant. References in this paragraph (C)
to Directors elected by the holders of a particular class of stock shall include
Directors elected by such Directors to fill vacancies as provided in clause (y)
of the foregoing sentence.
(v) Immediately upon the expiration of a default period, (x) the right of
the holders of Preferred Stock as a class to elect Directors shall cease, (y)
the term of any Directors elected by the holders of Preferred Stock as a class
shall terminate, and (z) the number of Directors shall be such number as may be
provided for in the Charter or bylaws irrespective of any increase made pursuant
to the provisions of paragraph (C) (ii) of this Section 3 (such number being
subject, however, to change thereafter in any manner provided by law or in the
Charter or bylaws). Any vacancies in the Board of Directors effected by the
provisions of classes (y) and (z) in the preceding sentence may be filled by a
majority of the remaining Directors.
(D) The Charter of the Company shall not be amended in any manner (whether
by merger or otherwise) so as to adversely affect the powers, preferences or
special rights of the Series D Preferred Stock without the affirmative vote of
the holders of a majority of the outstanding shares of Series D Preferred Stock,
voting separately as a class.
(E) Except as otherwise provided herein, holders of Series D Preferred
Stock shall have no special voting rights, and their consent shall not be
required for taking any corporate action. As used in this Section 3, "Preferred
Stock" shall not include or be construed to encompass any other class or series
of preferred stock of the Company unless the certificate of designations,
preferences and rights of such other class or series expressly so states.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or distributions
payable on the Series D Preferred Stock as provided in Section 2 are in arrears,
thereafter and until all accrued and unpaid dividends and distributions, whether
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or not declared, on outstanding shares of Series D Preferred Stock shall have
been paid in full, the Company shall not:
(i) declare or pay dividends on, or make any other distributions on,
any shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series D Preferred Stock;
(ii) declare or pay dividends on, or make any other distributions on,
any shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series D Preferred Stock,
except dividends paid ratably on the Series D Preferred Stock and all such
other parity stock on which dividends are payable or in arrears in
proportion to the total amounts to which the holders of all such shares are
then entitled;
(iii) redeem, purchase or otherwise acquire for value any shares of
stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series D Preferred Stock; provided that
the Company may at any time redeem, purchase or otherwise acquire shares of
any such junior stock in exchange for shares of stock of the Company
ranking junior (as to dividends and upon dissolution, liquidation or
winding up) to the Series D Preferred Stock; or
(iv) redeem, purchase or otherwise acquire for value any shares of
Series D Preferred Stock, or any shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or winding up)
with the Series D Preferred Stock, except in accordance with a purchase
offer made in writing or by publication (as determined by the Board of
Directors) to all holders of Series D Preferred Stock and all such other
parity stock upon such terms as the Board of Directors, after consideration
of the respective annual dividend rates and other relative rights and
preferences of the respective series and classes, shall determine in good
faith will result in fair and equitable treatment among the respective
series or classes.
(B) The Company shall not permit any subsidiary of the Company to purchase
or otherwise acquire for value any shares of stock of the Company unless the
Company could, under paragraph (A) of this Section 4, purchase or otherwise
acquire such shares at such time and in such manner.
Section 5. Reacquired Shares. Any shares of Series D Preferred Stock
redeemed, purchased or otherwise acquired by the Company in any manner
whatsoever shall be retired and canceled promptly after the acquisition thereof.
All such shares shall upon their cancellation become authorized but unissued
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shares of Preferred Stock without designation as to series and may be reissued
as part of a new series of Preferred Stock to be created by resolution or
resolutions of the Board of Directors as permitted by the Charter or as
otherwise permitted under the General Corporation Law of the State of Delaware.
Section 6. Liquidation, Dissolution or Winding Up. Upon any liquidation,
dissolution or winding up of the Company, no distribution shall be made (1) to
the holders of shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series D Preferred Stock unless,
prior thereto, the holders of shares of Series D Preferred Stock shall have
received $1.00 per share, plus an amount equal to accrued and unpaid dividends
and distributions thereon, whether or not declared, to the date of such payment;
provided that the holders of shares of Series D Preferred Stock shall be
entitled to receive an aggregate amount per share, subject to the provision for
adjustment hereinafter set forth, equal to 100 times the aggregate amount to be
distributed per share to holders of Common Stock, or (2) to the holders of stock
ranking on a parity (either as to dividends or upon liquidation, dissolution or
winding up) with the Series D Preferred Stock, except distributions made ratably
on the Series D Preferred Stock and all such other parity stock in proportion to
the total amounts to which the holders of all such shares are entitled upon such
liquidation, dissolution or winding up. If the Company shall at any time after
the Rights Declaration Date pay any dividend on Common Stock payable in shares
of Common Stock or effect a subdivision or combination of the outstanding shares
of Common Stock (by reclassification or otherwise) into a greater or lesser
number of shares of Common Stock, then in each such case the aggregate amount to
which holders of shares of Series D Preferred Stock were entitled immediately
prior to such event under the proviso in clause (1) of the preceding sentence
shall be adjusted by multiplying such amount by a fraction the numerator of
which is the number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.
Section 7. Consolidation, Merger, etc. If the Company shall enter into
any consolidation, merger, combination or other transaction in which the shares
of Common Stock are exchanged for or changed into other stock or securities,
cash or any other property, then in any such case the shares of Series D
Preferred Stock shall at the same time be similarly exchanged for or changed
into an amount per share, subject to the provision for adjustment hereinafter
set forth, equal to 100 times the aggregate amount of stock, securities, cash or
any other property, as the case may be, into which or for which each share of
Common Stock is changed or exchanged. If the Company shall at any time after
the Rights Declaration Date pay any dividend on Common Stock payable in shares
of Common Stock or effect a subdivision or combination of the outstanding shares
of Common Stock (by reclassification or otherwise) into a greater or lesser
number of shares of Common Stock, then in each such case the amount set forth in
the preceding sentence with respect to the exchange or change of shares of
Series D Preferred Stock shall be adjusted by multiplying such amount by a
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fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.
Section 8. No Redemption. The Series D Preferred Stock shall not be
redeemable.
Section 9. Rank. The Series D Preferred Stock shall rank junior (as to
dividends and upon liquidation, dissolution and winding up) to all other series
of the Company's Preferred Stock except any series that specifically provides
that such series shall rank pari passu with or junior to the Series D Preferred
Stock.
Section 10. Fractional Shares. Series D Preferred Stock may be issued in
fractions of a share which shall entitle the holder, in proportion to such
holder's fractional shares, to exercise voting rights, receive dividends,
participate in distributions and to have the benefit of all other rights of
holders of Series D Preferred Stock.
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IN WITNESS WHEREOF, we have executed and attested this Certificate this
24th day of October, 1996.
DELTA AIR LINES, INC.
/s/ Ronald W. Allen
-------------------------------------
Ronald W. Allen
Chairman of the Board, President and
Chief Executive Officer
Attest:
/s/ Robert S. Harkey
- -----------------------
Robert S. Harkey
Corporate Secretary
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EXHIBIT 4.4
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DELTA AIR LINES, INC.
DELTASHARE STOCK OPTION PLAN
Article 1. Establishment
Delta Air Lines, Inc., a Delaware corporation (the "Company"), hereby
establishes the DeltaShare Stock Option Plan as set forth herein. The purpose
of the Plan is to promote the interests of the Company by providing eligible
personnel with a greater incentive to make material contributions to the
Company's success by increasing their proprietary interest in the Company
through increased direct stock ownership, all to the benefit of the Company and
its stockholders. The Plan shall become effective as of the date specified in
Article 10 hereof.
The description of the Plan which follows shall be qualified in its entirety
by such rules, procedures and operating guidelines as may be adopted from time
to time by the Committee (as defined below) pursuant to Article 8 hereof with
respect to Company personnel who are employed outside the United States.
Article 2. Definitions
For purposes of the Plan, the following terms shall be defined as set forth
below and, when the defined meaning is intended, the term is capitalized:
2.1 "Annual Base Salary" means, unless otherwise defined by the Committee
in its sole discretion, a Participant's annual base earnings paid to him
for services rendered to the Company as an employee during the twelve-month
period ending on a specific Grant Determination Date, which amount includes
longevity pay, license premium and flight pay, and excludes overtime pay,
shift differential, displacement allowance, incentive compensation,
bonuses, supplemental salary payments, expense reimbursements, expense
allowances, imputed income, amounts paid in lieu of earned and accrued
vacation, foreign duty allowance, termination allowances (severance pay),
sick leave bank payouts for former employees of Western Air Lines, Inc.,
payments under any qualified or non-qualified employee benefit plans
sponsored by the Company, profit sharing awards or any other annual
incentive compensation programs sponsored by the Company.
2.2 "Board" or "Board of Directors" means the Board of Directors of the
Company.
2.3 "Committee" means the Committee referred to in Article 3 of the Plan.
If at any time no Committee shall be designated, then the functions of the
Committee specified in the Plan shall be exercised by the Board.
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2.4 "Company" means Delta Air Lines, Inc., a corporation organized under
the laws of the State of Delaware, or any successor corporation.
2.5 "Disability", "Short-Term Disability" and "Long-Term Disability" mean
disability as determined under a short-term or long-term disability plan of
the Company, as applicable to the Participant.
2.6 "Exercise Period" means the period of time between the date a Stock
Option becomes excercisable and the tenth anniversary of that Stock
Option's Grant Date, when the Stock Option expires.
2.7 "Fair Market Value" means, as of any given date, the opening price 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 price of the Stock on
the New York Stock Exchange on the last preceding day on which such sale
occurred.
2.8 "Furlough" means removal from the Company's service due to a reduction
in force.
2.9 "Grant Date" means the date on which each installment of Stock Options
is awarded under the Plan. The initial Grant Date shall be determined by
the Committee. The second Grant Date shall be the first anniversary of the
initial Grant Date. The third Grant Date shall be the second anniversary
of the initial Grant Date.
2.10 "Grant Determination Date" means the September 30th prior to each
Grant Date, or such other date as may be established by the Committee.
2.11 "Leave of Absence" means Company approved absence from the Company's
service without pay for personal reasons.
2.12 "Option Price" means the price at which a share of Stock covered by a
Stock Option may be purchased, as specified in Article 6.3 below.
2.13 "Participant" means the recipient of an award of a Stock Option under
the Plan.
2.14 "Plan" means the DeltaShare Stock Option Plan, as amended from time
to time.
2.15 "Retirement" or "Retired" means retirement from active employment
with the Company pursuant to the Company's written policies governing
retirement from the Company.
2.16 "Stock" means the Common Stock, U.S. $3.00 par value, of the Company.
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2.17 "Stock Option" means the option to purchase shares of Stock granted
pursuant to Article 6 below. All Stock Options granted pursuant to the
Plan shall be deemed "non-qualified" for purposes of Section 422 of the
U.S. Internal Revenue Code of 1986, as amended from time to time, and any
successor thereto.
Article 3. Administration
3.1 The Administrator. The Plan shall be administered by the Personnel,
Compensation & Nominating Committee of the Board of Directors, or such other
committee of the Board as may be designated by the Board from time to time.
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.
3.2 The Committee's Authority. The Committee shall have full authority to
construe and interpret the Plan, to establish, amend and rescind appropriate
rules and regulations relating to the Plan, to administer the Plan, to determine
the persons to whom and the time or times at which to grant awards thereunder,
and to take all such steps and make all such determinations in connection with
the Plan and the Stock Options granted thereunder as it may deem necessary or
advisable to carry out the provisions and intent of the Plan, provided that any
decision, determination or action of the Committee with respect to the Plan
shall be consistent with the terms of the Plan. All determinations of the
Committee shall be by a majority of its members, and the Committee's
determinations if consistent with the terms of the Plan shall be final and
conclusive for all purposes and upon all persons. The Committee may delegate
its authority hereunder.
Article 4. Stock Subject to Plan
4.1 Stock Reserved. The total number of shares of Stock reserved and
available for distribution under the Plan shall be 14,700,000, subject to
adjustment as provided in Article 4.2. Stock issued under the Plan may be
either authorized and unissued shares or treasury shares.
4.2 Certain Changes in Corporate Structure. 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 adjustments as it deems necessary to reflect
such change so as to prevent the diminution or enlargement of a Participant's
rights, including but not limited to, adjustments in the aggregate number of
shares of Stock reserved for issuance under the Plan, and adjustments in the
Option Price, provided that the number of shares of Stock subject to any award
shall always be a whole number. If any of the foregoing events occur affecting
the Stock and there is an adjustment to the then outstanding non-qualified stock
options under the last paragraph of Section 3 of the Company's 1989 Stock
Incentive Plan (or the corresponding provision of any successor plan) for
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officers and key employees, the Stock Options under the Plan shall be adjusted
in a manner no less favorable to the Participant than the adjustment for the
then outstanding non-qualified stock options under the last paragraph of Section
3 of the Company's 1989 Stock Incentive Plan (or the corresponding provision of
any successor plan).
Article 5. Eligibility
5.1 Eligible Personnel. The Committee shall have sole discretion to
determine personnel who are eligible to participate in the Plan. Unless
otherwise determined by the Committee, (a) all domestic nonpilot, U.S. dollar
paid personnel of the Company in permanent positions (including those based in
Puerto Rico and the U.S. Virgin Islands) who have completed at least one year of
employment with the Company on the applicable Grant Date and are on active pay
status, Short-Term Disability or temporary Leaves of Absence (i.e., less than
six months) on the applicable Grant Determination Date, and (b) all
international personnel of the Company in permanent positions who are not
subject to a collective bargaining agreement, have completed at least one year
of employment with the Company on the applicable Grant Date and are on active
pay status, Short-Term Disability or temporary Leaves of Absence (i.e., less
than six months) on the applicable Grant Determination Date, are eligible to be
granted awards under the Plan on the applicable Grant Date.
5.2 Ineligible Personnel. Unless otherwise determined by the Committee,
personnel who are in the following categories on the applicable Grant
Determination Date shall not be eligible to be granted awards under the Plan on
the applicable Grant Date: associates; pilots (flight line or management);
international personnel who are subject to a collective bargaining agreement,
including but not limited to such personnel in Austria, Brazil, Germany, Greece,
Italy, India and Mexico; personnel employed by a subsidiary, partnership,
limited partnership, joint venture or similar entity involving the Company;
seasonal, intern, co-op, college programs, ready reserve, and retiree reserve
personnel; personnel on long-term Leaves of Absence, Long-Term Disability,
Furlough, Quality Time Out, military leave, or Retirement status; and officers,
directors and participants in other Company-sponsored stock option programs.
5.3 Eligible Personnel Who Become Ineligible Between Grant Determination Date
and the Grant Date. Personnel who on a Grant Determination Date are eligible to
be granted awards under the Plan on the applicable Grant Date shall not be
granted such awards on such Grant Date if they become ineligible for any reason
prior to or on such Grant Date.
Article 6. Stock Options
6.1 Grant. On the initial Grant Date, the Company shall award Stock Options
covering 4,900,000 shares of Stock to the Participants, as specified in Article
5. On each of the second and third Grant Dates, the Company shall award Stock
Options covering 4,900,000 shares of Stock to the Participants as specified in
Article 5, subject to increase as provided in Article 7.1. A Participant's
Stock Option will entitle him to purchase from the Company a specified number of
shares of Stock, at the Option Price. Unless the Committee directs otherwise,
the number of shares of Stock subject to a Stock Option awarded to a Participant
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on a Grant Date shall be equal to the Annual Base Salary of the Participant as
of the applicable Grant Determination Date divided by the total Annual Base
Salary as of the applicable Grant Determination Date for all Participants
eligible to receive an award of Stock Options on the applicable Grant Date, and
multiplying that result by the total number of shares of Stock subject to Stock
Options available for award on that Grant Date. Awards shall be rounded down to
the nearest whole share of Stock subject to a Stock Option.
6.2 Nontransferability. A Stock Option granted pursuant to the Plan shall
not be transferable by the Participant otherwise than by will, by the laws of
descent and distribution, or by a written designation referred to in Article 7.3
below, and is exercisable during the Participant's lifetime only by such
Participant.
6.3 Option Price. The Option Price for the first installment of Stock
Options shall be the Fair Market Value of the Stock on the initial Grant Date.
The Option Price for the second and third installments of Stock Options shall be
the Fair Market Value of the Stock on the second and third Grant Dates,
respectively. 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 Article 4.2
hereof.
6.4 Option Exercise Dates and Term. Subject to Article 7 hereof, a Stock
Option granted to a Participant shall become exercisable on the first
anniversary of its Grant Date, and the Stock Option shall expire on, and no
shares of Stock may be purchased thereunder on or after, the tenth anniversary
of its Grant Date.
6.5 Exercising Stock Options. To exercise a Stock Option, the holder thereof
shall give irrevocable notice of the exercise to the Company or one or more
third parties designated by the Committee, identifying a whole number of shares
of Stock with respect to which such Stock Option is being exercised. The Option
Price for the Stock Options being exercised shall be paid in full prior to
issuance of the Stock. The Committee may, from time to time, in its sole
discretion, establish administrative procedures relating to the exercise of
Stock Options, provided that such procedures are consistent with the terms of
the Plan.
6.6 Withholding Taxes. The Participant shall be required to pay to the
Company, or make arrangements satisfactory to the Company regarding the payment
of, the amount of any foreign, federal (including FICA), state, or local taxes
of any kind required by law to be withheld with respect to the exercise of a
Stock Option. Unless otherwise determined by the Committee, the Company shall
withhold from the shares of Stock issued to a Participant upon exercise of a
Stock Option a sufficient number of whole shares of Stock based on the Fair
Market Value of such Stock on the exercise date to cover amounts which the
Company is required by law to withhold with respect to the exercise of a Stock
Option.
6.7 Payment. Payment of the Option Price and tax withholding obligation
shall be made by cashier's check, through electronic funds transfer or through a
broker-assisted Stock Option exercise pursuant to procedures the Committee may,
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in its sole discretion, establish from time to time. No shares of Stock shall
be delivered to the Participant until such amounts have been paid. The
Participant shall be responsible for all brokerage commissions, interest and
other expenses, if any, in a broker-assisted Stock Option exercise.
Article 7. Termination of Employment, Retirement, Death, Disability,
Leave of Absence or Furlough
7.1 Termination or Resignation. If a Participant's employment shall be
terminated by the Company for reasons other than Retirement, Death, Disability,
Leave of Absence or Furlough, or if a Participant resigns from employment with
the Company, any unexercised Stock Option held by such Participant shall be
immediately forfeited. Such forfeited Stock Options shall be allocated to
Participants on the next ensuing Grant Date, if any.
7.2 Retirement, Disability, Leave of Absence or Furlough. A Participant who
is Retired, or is on Disability, Leave of Absence or Furlough, shall be entitled
to exercise any Stock Option awarded to him to the same extent as a Participant
who remains in active employment with the Company, except that the exercise
period for a Participant who is placed on Furlough shall be the earlier of the
remainder of the Exercise Period or the date he terminates from Delta and
forfeits his recall rights.
7.3 Death. In the event of the death of a Participant while employed by the
Company, such Participant's Stock Options may be exercised on his behalf, to the
same extent as a Participant who remains in active employment with the Company,
by the person or persons named in a written designation by the Participant
delivered to a party designated by the Committee or, if there is no such
designation, by the executor or administrator of the Participant's estate or
such other personal representative, legatee or devisee as may be designated in
the Participant's last will and testament; provided, that such exercise must
otherwise comply with the Plan and the applicable Stock Option award.
Article 8. Amendments and Termination
The Board or the Committee may amend, alter, or discontinue the Plan, at any
time at its sole discretion, 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.
The Board and the Committee shall each have complete discretion to determine
whether or not to make awards of Stock Options to Company personnel who are
employed outside the United States or to make awards on terms and conditions
different from those specified in the Plan, and to amend the Plan or any
procedures adopted by the Committee under the Plan as the Board or the Committee
may deem necessary or advisable.
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Article 9. Miscellaneous
9.1 Governing Law. The Plan, and all awards and agreements made hereunder,
shall be governed by and construed in accordance with the laws of the State of
Georgia without giving effect to the principles of conflicts of laws thereof.
9.2 Gender and Number. Except where otherwise indicated by the context, any
masculine term used herein also shall include the feminine; the plural shall
include the singular; and the singular shall include the plural.
9.3 No Right to Employment. The adoption of the Plan shall not confer upon
any employee of the Company any right to continued employment with the Company,
nor shall it interfere in any way with the right of the Company to terminate the
employment of any of its employees at any time.
9.4 Rights of Participants. Nothing in the Plan or in any Stock Option
granted under the Plan shall confer upon any Participant or his executors,
administrators or legal representatives any of the rights of a stockholder of
the Company with respect to the shares of Stock subject to a Stock Option until
certificates for such shares shall have been issued upon the exercise of such
Stock Option.
9.5 Severability. 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.
9.6 Purchase for Investment and Legality. The Participant, by acceptance of
any Stock Option granted under the Plan, shall represent and warrant to the
Company that the purchase or receipt of shares of Stock upon the exercise
thereof shall be for investment and not with a view to distribution, provided
that such representation and warranty shall be inoperative if, in the opinion of
counsel to the Company, a proposed sale or distribution of such shares of Stock
is pursuant to an applicable effective registration statement under the
Securities Act of 1933 or is, without such representation and warranty, exempt
from registration under such Act. The Company shall file a Registration
Statement on Form S-8 pursuant to the Securities Act of 1933, as amended,
covering the Stock to be offered pursuant to the Plan and will use its best
efforts to maintain such registration at all times necessary to permit holders
of Stock Options to exercise them.
The obligation of the Company to issue shares of Stock upon the exercise of a
Stock Option shall also be subject as conditions precedent to compliance with
applicable provisions of the Securities Act of 1933, the Securities Exchange Act
of 1934, state and foreign securities laws, rules and regulations under any of
the foregoing, and applicable requirements of any securities exchange upon which
the Company's securities shall be listed.
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The Company may endorse an appropriate legend referring to the foregoing
restrictions upon the certificate or certificates representing any shares of
Stock issued or transferred to a Participant upon the exercise of any Stock
Option granted under the Plan.
Article 10. Effective Date of Plan
The Plan shall be effective when it and the Pilots Stock Option Plan are
approved as a single proposal at the Company's 1996 Annual Meeting of
Stockholders, or any adjournments thereof, by a majority of the votes entitled
to be cast by the holders of all shares of Stock and the Company's Series B ESOP
Convertible Preferred Stock, voting together as a single class, that are
represented at the meeting and entitled to vote, provided that the total votes
cast on such proposal must represent over 50% in interest of all securities
entitled to vote on such proposal.
Article 11. Change in Control
In the event of a Change in Control of the Company, all Stock Options not yet
granted on the date of such Change in Control will be granted, pursuant to
Articles 5 and 6 hereof, on the date of such Change in Control at an Option
Price equal to the Fair Market Value of the Stock on such date. "Change in
Control" for this purpose shall have the meaning ascribed to it in Article 8.7
of the Pilots Stock Option Plan for pilot personnel of the Company as in effect
on the date specified in Article 10 hereof.
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EXHIBIT 4.5
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DELTA AIR LINES, INC.
PILOTS STOCK OPTION PLAN
ARTICLE 1. ESTABLISHMENT
Delta Air Lines, Inc., a Delaware corporation (the "Company"), and the Air
Line Pilots Association, International, as representative of the Pilots of Delta
Air Lines, Inc. (the "Association"), hereby establish the "Pilots Stock Option
Plan" (the "Plan"), as set forth herein. The Plan provides for the grant of
Stock Options to purchase a total of 10 million shares of Stock. The Stock
Options will be granted in three separate installments of equal size. The Plan
shall be part of the Delta Pilots Agreement, shall become effective as of the
Effective Date of such Agreement and shall run concurrently with the Duration
Clause of such Agreement and subject to any status quo period thereafter.
ARTICLE 2. DEFINITIONS
For the purposes of the Plan, the following terms shall be defined as set
forth below and, when the defined meaning is intended, the term is capitalized.
2.1 "ASSOCIATION" means the Air Line Pilots Association, International.
2.2 "BOARD" OR "BOARD OF DIRECTORS" means the Board of Directors of the
Company.
2.3 "COMMITTEE" means the Committee referred to in Article 3 of the Plan. If
at any time no Committee shall be designated, then the functions of the
Committee specified in the Plan shall be exercised by the Board.
2.4 "COMPANY" means Delta Air Lines, Inc., a corporation organized under the
laws of the State of Delaware, or any successor corporation.
2.5 "DELTA PILOTS AGREEMENT" means the basic collective bargaining agreement
together with all effective amendments, supplemental agreements, letters of
agreement and letters of understanding between the Company and the Association,
in existence on the effective date of the Plan and as may be modified or
supplemented after this date.
2.6 "DISABILITY" means disability as determined under the Delta Pilots
Disability and Survivorship Plan.
2.7 "EXERCISE PERIOD" means the period of time between the date a Stock
Option becomes exercisable and the tenth anniversary of that Stock Option's
Grant Date, when the Stock Option expires.
2.8 "FAIR MARKET VALUE" means, as of any given date, the opening price 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 price of the Stock on the New York
Stock Exchange on the last preceding day on which such sale occurred.
1
<PAGE>
2.9 "FURLOUGH" means removal from the Company's service due to a reduction in
force.
2.10 "GRANT DATE" means the date on which each installment of Stock Options is
awarded under the Plan. The initial Grant Date shall be the date agreed upon by
the Company and Association, which date shall be within 30 days after the later
of (a) the date the new Delta Pilots Agreement becomes effective following its
ratification and signing; (b) the date the Plan is approved by the Board of
Directors and, if required, the stockholders of the Company; or (c) the date of
determination of each Participant, and the number of shares of Stock subject to
Stock Options each Participant will receive, on the initial Grant Date under the
Plan. The second Grant Date shall be the first anniversary of the initial Grant
Date. The third Grant Date shall be the second anniversary of the initial Grant
Date.
2.11 "LEAVE OF ABSENCE" means Company approved absence from the Company's
service without pay for personal reasons.
2.12 "OPTION PRICE" means the price at which a share of Stock covered by a
Stock Option may be purchased, as specified in Article 6 below.
2.13 "PARTICIPANT" means a Pilot who is a recipient of an award of a Stock
Option under the Plan.
2.14 "PILOT" means an employee of the Company whose name appears on the Delta
Air Lines Pilots' System Seniority List on the initial Grant Date or any Grant
Date thereafter.
2.15 "PLAN" means the Pilots Stock Option Plan.
2.16 "RETIREMENT" means that a Pilot has left the Company's service and is
eligible for a benefit under the Delta Pilots Retirement Plan (or any successor
thereto) other than a Termination Benefit (as that term is defined under the
Delta Pilots Retirement Plan or any successor thereto).
2.17 "STOCK" means the Common Stock, $3.00 par value, of the Company.
2.18 "STOCK OPTION" means the option to purchase shares of Stock granted
pursuant to Article 6 below. All Stock Options granted pursuant to the Plan
shall be deemed "non-qualified" for purposes of Section 422 of the Internal
Revenue Code of 1986, as amended from time to time, and any successor thereto.
2
<PAGE>
ARTICLE 3. ADMINISTRATION
3.1 THE ADMINISTRATOR. The Plan shall be administered by the Personnel,
Compensation & Nominating Committee of the Board of Directors, or such other
committee of the Board as may be designated by the Board from time to time.
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.
3.2 THE COMMITTEE'S AUTHORITY. The Committee shall have full authority to
construe and interpret the Plan, to establish, amend and rescind appropriate
rules and regulations relating to the Plan, to administer the Plan, and to take
all such steps and make all such determinations in connection with the Plan and
the Stock Options granted thereunder as it may deem necessary or advisable to
carry out the provisions and intent of the Plan, provided that any decision,
determination or action of the Committee with respect to the Plan shall be
consistent with the terms of the Plan. All determinations of the Committee
shall be by a majority of its members and, subject to Article 3.3, the
Committee's determinations if consistent with the terms of the Plan shall be
final and conclusive for all purposes and upon all persons. The Committee may
delegate its authority hereunder.
3.3 DISPUTE RESOLUTION. Disputes arising out of decisions, determinations or
other actions of the Committee with respect to the interpretation,
administration or application of the Plan shall be subject to the grievance and
System Board procedures of the Delta Pilots Agreement.
ARTICLE 4. STOCK SUBJECT TO PLAN
4.1 STOCK RESERVED. The total number of shares of Stock reserved and
available for distribution under the Plan shall be 10 million, subject to
adjustment as provided in Article 4.2. Stock issued under the Plan may be
either authorized and unissued shares or treasury shares.
4.2 CERTAIN CHANGES IN CORPORATE STRUCTURE. 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 adjustments as it deems necessary to reflect
such change so as to prevent the diminution or enlargement of a Participant's
rights, including but not limited to, adjustments in the aggregate number of
shares of Stock reserved for issuance under the Plan, and adjustments in the
Option Price, provided that the number of shares of Stock subject to any award
shall always be a whole number. If any of the foregoing events occur affecting
the Stock and there is an adjustment to the then outstanding non-qualified stock
options under the last paragraph of Section 3 of the Company's 1989 Stock
Incentive Plan (or the corresponding provision of any successor plan) for
officers and key employees, the Stock Options under the Plan shall be adjusted
in a manner no less favorable to the Participant than the adjustment for the
3
<PAGE>
then outstanding non-qualified stock options under the last paragraph of Section
3 of the Company's 1989 Stock Incentive Plan (or the corresponding provision of
any successor plan).
ARTICLE 5. ELIGIBILITY
Subject to the approval of the Company, the Association will determine the
Participants and the number of whole shares of Stock subject to Stock Options to
be awarded to each Participant on each Grant Date.
ARTICLE 6. STOCK OPTIONS
6.1 GRANT. On the initial Grant Date, the Company shall award Stock Options
covering 3,333,334 shares of Stock to the Participants, as specified in Article
5. On each of the second and third Grant Dates, the Company shall award Stock
Options covering 3,333,333 shares of Stock to the Participants as specified in
Article 5. A Participant's Stock Option will entitle him to purchase from the
Company a specified number of shares of Stock, at the Option Price.
6.2 NONTRANSFERABILITY. A Stock Option granted pursuant to the Plan shall
not be transferable by the Participant otherwise than by will, by the laws of
descent and distribution, or by a written designation referred to in Article 7.3
below, and is exercisable during the Participant's lifetime only by such
Participant.
6.3 OPTION PRICE. The Option Price for the first installment of Stock
Options shall be the Fair Market Value of the Stock on the initial Grant Date.
The Option Price for the second and third installments of Stock Options shall be
the Fair Market Value of the Stock on the second and third Grant Dates,
respectively. 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 Article 4.2
hereof.
6.4 OPTION EXERCISE DATES AND TERM. Subject to Article 7 hereof, a Stock
Option granted to a Participant shall become exercisable on the first
anniversary of its Grant Date, and the Stock Option shall expire on, and no
shares of Stock may be purchased thereunder on or after, the tenth anniversary
of its Grant Date.
6.5 EXERCISING STOCK OPTIONS. To exercise a Stock Option, the holder thereof
shall give irrevocable notice of the exercise to the Company or one or more
third parties designated by the Committee, identifying a whole number of shares
of Stock (which shall not be less than the lesser of (a) 50 shares of Stock or
(b) the number of shares of Stock subject to such Participant's then exercisable
Stock Option) with respect to which such Stock Option is being exercised. The
Option Price for the Stock Options being exercised shall be paid in full prior
to issuance of the Stock. The Committee may, from time to time, in its sole
discretion, and after consultation with the Association, establish
administrative procedures relating to the exercise of Stock Options, provided
that such procedures are consistent with the terms of the Plan.
4
<PAGE>
6.6 WITHHOLDING TAXES. The Participant shall be required to pay to the
Company, or make arrangements satisfactory to the Company regarding the payment
of, the amount of any foreign, federal (including FICA), state, or local taxes
of any kind required by law to be withheld with respect to the exercise of a
Stock Option.
6.7 PAYMENT. Payment of the Option Price and tax withholding obligation
shall be made by cashier's check, through electronic funds transfer or through a
broker-assisted Stock Option exercise pursuant to procedures the Committee may,
in its sole discretion, establish from time to time. No shares of Stock shall
be delivered to the Participant until all such amounts have been paid. The
Participant shall be responsible for all brokerage commissions, interest and
other expenses, if any, in a broker-assisted Stock Option exercise.
ARTICLE 7. TERMINATION OF EMPLOYMENT, RETIREMENT, DEATH, DISABILITY AND LEAVE
OF ABSENCE
7.1 TERMINATION OR RESIGNATION. If a Participant's employment shall be
terminated by the Company, or if a Participant resigns from employment with the
Company, any unexercised Stock Option held by such Participant shall be
immediately forfeited. Such forfeited Stock Options shall be allocated to
Participants on the next ensuing Grant Date, if any.
7.2 RETIREMENT, DISABILITY, LEAVE OF ABSENCE OR FURLOUGH. A Participant who
is Retired, or is on Disability, Leave of Absence or Furlough, shall be entitled
to exercise any Stock Option awarded to him to the same extent as a Participant
who remains in active employment with the Company.
7.3 DEATH. In the event of the death of a Participant while employed by the
Company, the estate of such Participant, or other person designated by the
Participant, shall be entitled to exercise any Stock Option awarded to the
Participant to the same extent as a Participant who remains in active employment
with the Company.
ARTICLE 8. MISCELLANEOUS
8.1 GOVERNING LAW. The Plan, and all awards and agreements made hereunder,
shall be governed by and construed in accordance with the Railway Labor Act, and
of the laws of the State of Georgia without giving effect to the principles of
conflicts of laws thereof.
8.2 GENDER AND NUMBER. Except where otherwise indicated by the context, any
masculine term used herein also shall include the feminine; the plural shall
include the singular; and the singular shall include the plural.
8.3 NO RIGHT TO EMPLOYMENT. The adoption of the Plan shall not confer upon
any employee of the Company any right to continued employment with the Company,
nor shall it interfere in any way with the right of the Company to terminate the
employment of any of its employees at any time.
5
<PAGE>
8.4 RIGHTS OF PARTICIPANTS. Nothing in the Plan or in any Stock Option
granted under the Plan shall confer upon any Participant or his executors,
administrators or legal representatives any of the rights of a stockholder of
the Company with respect to the shares of Stock subject to a Stock Option until
certificates for such shares shall have been issued upon the exercise of such
Stock Option.
8.5 SEVERABILITY. 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.
8.6 PURCHASE FOR INVESTMENT AND LEGALITY. The Participant, by acceptance of
any Stock Option granted under the Plan, shall represent and warrant to the
Company that the purchase or receipt of shares of Stock upon the exercise
thereof shall be for investment and not with a view to distribution, provided
that such representation and warranty shall be inoperative if, in the opinion of
counsel to the Company, a proposed sale or distribution of such shares of Stock
is pursuant to an applicable effective registration statement under the
Securities Act of 1933 or is, without such representation and warranty, exempt
from registration under such Act. The Company shall file a Registration
Statement on Form S-8 pursuant to the Securities Act of 1933, as amended,
covering the Stock to be offered pursuant to the Plan and will use its best
efforts to maintain such registration at all times necessary to permit holders
of Stock Options to exercise them.
The obligation of the Company to issue shares of Stock upon the exercise of a
Stock Option shall also be subject as conditions precedent to compliance with
applicable provisions of the Securities Act of 1933, the Securities Exchange Act
of 1934, state securities laws, rules and regulations under any of the foregoing
and applicable requirements of any securities exchange upon which the Company's
securities shall be listed. The Company shall use its reasonable best efforts
to take all actions necessary and appropriate to satisfy each of the foregoing
conditions.
The Company may endorse an appropriate legend referring to the foregoing
restrictions upon the certificate or certificates representing any shares of
Stock issued or transferred to a Participant upon the exercise of any Stock
Option granted under the Plan.
8.7 CHANGE IN CONTROL PROVISIONS. In the event of a Change in Control of the
Company (as described in Section 1.B.5. and G.1., 2., and 3. of the Delta Pilots
Agreement) all Stock Options not yet granted on the date of such Change in
Control will be granted, pursuant to Article 5, on the date of such Change in
Control at an Option Price equal to the Fair Market Value of the Stock on such
date.
6
<PAGE>
EXHIBIT 5
---------
November 20, 1996
Delta Air Lines, Inc.
Hartsfield Atlanta International Airport
Atlanta, Georgia 30320
Re: Delta Air Lines, Inc. --
Form S-8 Registration Statement
-------------------------------
Dear Sirs:
I am Senior Vice President - General Counsel of Delta Air Lines, Inc.,
a Delaware corporation (the "Company"), and as such am familiar with the actions
taken by the Company in connection with the preparation and filing with the
Securities and Exchange Commission pursuant to the Securities Act of 1933, as
amended, of a Registration Statement on Form S-8 (the "Registration Statement")
relating to (i) an additional 14,700,000 shares and 10,000,000 shares (the
"Shares") of the Company's Common Stock, par value $3.00 per share (the "Common
Stock"), to be offered pursuant to the DeltaShare Stock Option Plan and the
Pilots Stock Option Plan, respectively, of the Company (the "Plans"), and (ii)
rights (the "Rights") to be issued with and attached to the Shares pursuant to
the Rights Agreement dated as of October 24, 1996, (the "Rights Agreement"),
between the Company and First Chicago Trust Company of New York, as Rights
Agent. Upon the terms and subject to the conditions set forth in the Plans, the
Company may issue, subject to certain adjustments, an aggregate of 24,700,000
shares of Common Stock.
In this connection, I or counsel under my supervision have examined
originals or copies, certified or otherwise identified to our satisfaction, of
(i) the Plans, (ii) the Company's Certificate of Incorporation and By-Laws,
(iii) the Rights Agreement, (iv) resolutions adopted by the Company's Board of
Directors, and (v) such other documents as I have deemed necessary or
appropriate as a basis for the opinion set forth herein.
Based upon the foregoing, I am of the opinion that the Shares and,
assuming that the Rights Agreement has been duly authorized, executed and
delivered by the Rights Agent (as such term is defined in the Rights Agreement),
the Rights attached thereto, when issued under the Plans are duly authorized
and, when certificates for the Shares are duly executed and delivered pursuant
to the Plans, and in each case upon payment to the Company of any price for such
Shares provided for in the Plans (which price is assumed herein to be in no
event less than the par value of the Shares being issued upon such payment), the
Shares and the Rights attached thereto will be validly issued, fully paid and
nonassessable.
<PAGE>
Delta Air Lines, Inc.
November 20, 1996
Page 2
In connection with the foregoing opinion, I note that the question
whether the Board of Directors of the Company might be required to redeem the
Rights at some future time will depend upon the facts and circumstances existing
at that time and, accordingly, is beyond the scope of such opinion.
I am qualified to practice law in the State of Georgia and I do not
purport to be an expert on, or to express any opinion herein concerning, any
laws other than the laws of the State of Georgia, the corporate laws of the
State of Delaware and the federal laws of the United States.
I hereby consent to the filing of this opinion as an Exhibit to the
Registration Statement. In giving such consent, I do not admit I am in the
category of persons whose consent is required under Section 7 of the Securities
Act of 1933, as amended.
Very truly yours,
/s/ Robert S. Harkey
---------------------------------------
Senior Vice President - General Counsel
& Secretary
<PAGE>
EXHIBIT 15
----------
ARTHUR ANDERSEN LLP
To the Stockholders and
the Board of Directors of
Delta Air Lines, Inc.:
We are aware that Delta Air Lines, Inc. has incorporated by reference in this
Registration Statement on Form S-8 (relating to the DeltaShare Stock Option Plan
and the Pilots Stock Option Plan) its Form 10-Q for the quarter ended September
30, 1996, which includes our report dated November 1, 1996 covering the
unaudited interim financial information contained therein. Pursuant to
Regulation C of the Securities Act of 1933 (the "Act"), that report is not
considered a part of the Registration Statement prepared or certified by our
firm or a report prepared or certified by our firm within the meaning of
Sections 7 and 11 of the Act.
/s/ ARTHUR ANDERSEN LLP
Atlanta, Georgia
November 20, 1996
<PAGE>
EXHIBIT 23(b)
-------------
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
- -----------------------------------------
As independent public accountants, we hereby consent to the incorporation by
reference in this Registration Statement on Form S-8 (relating to the DeltaShare
Stock Option Plan and the Pilots Stock Option Plan) of our reports dated August
16, 1996 included or incorporated by reference in Delta Air Lines, Inc.'s Annual
Report on Form 10-K for the fiscal year ended June 30, 1996 and to all
references to our firm included in this Registration Statement.
/s/ ARTHUR ANDERSEN LLP
Atlanta, Georgia
November 20, 1996
<PAGE>
EXHIBIT 24.A
------------
POWER OF ATTORNEY
I hereby constitute and appoint Ronald W. Allen, Thomas J. Roeck, Jr.,
and Robert S. Harkey, and each of them separately, as my true and lawful
attorneys-in-fact and agents, with full power of substitution, for me and in my
name, in any and all capacities, to sign on my behalf (1) one or more
registration statements to be filed by Delta Air Lines, Inc. ("Delta") on Form
S-8 or other appropriate form, or any amendment or supplement thereto, for the
registration under the Securities Act of 1933, as amended, of (a) an additional
14,700,000 shares of Common Stock, par value $3.00 per share, of Delta ("Common
Stock") in connection with the DeltaShare Stock Option Plan of Delta, and (b) an
additional 10,000,000 shares of Common Stock in connection with the Pilots Stock
Option Plan of Delta; (2) any application for registration or qualification (or
exemption therefrom) of such securities under the Blue Sky or other federal or
state securities laws and regulations; and (3) any other document or instrument
deemed necessary or appropriate by any of them in connection with such
application for registration or qualification (or exemption therefrom); and to
file any such registration statement, amendment, supplement, application, or
other document or instrument with the Securities and Exchange Commission or
other appropriate agency pursuant to applicable federal and state securities
laws and regulations.
IN WITNESS WHEREOF, I have hereunto set my hand this 24th day of
October, 1996.
/s/ Edwin L. Artzt
-----------------------------
Edwin L. Artzt
Director
Delta Air Lines, Inc.
<PAGE>
EXHIBIT 24.B
------------
POWER OF ATTORNEY
I hereby constitute and appoint Ronald W. Allen, Thomas J. Roeck, Jr.,
and Robert S. Harkey, and each of them separately, as my true and lawful
attorneys-in-fact and agents, with full power of substitution, for me and in my
name, in any and all capacities, to sign on my behalf (1) one or more
registration statements to be filed by Delta Air Lines, Inc. ("Delta") on Form
S-8 or other appropriate form, or any amendment or supplement thereto, for the
registration under the Securities Act of 1933, as amended, of (a) an additional
14,700,000 shares of Common Stock, par value $3.00 per share, of Delta ("Common
Stock") in connection with the DeltaShare Stock Option Plan of Delta, and (b) an
additional 10,000,000 shares of Common Stock in connection with the Pilots Stock
Option Plan of Delta; (2) any application for registration or qualification (or
exemption therefrom) of such securities under the Blue Sky or other federal or
state securities laws and regulations; and (3) any other document or instrument
deemed necessary or appropriate by any of them in connection with such
application for registration or qualification (or exemption therefrom); and to
file any such registration statement, amendment, supplement, application, or
other document or instrument with the Securities and Exchange Commission or
other appropriate agency pursuant to applicable federal and state securities
laws and regulations.
IN WITNESS WHEREOF, I have hereunto set my hand this 24th day of
October, 1996.
/s/ Henry A. Biedenharn, III
----------------------------
Henry A. Biedenharn, III
Director
Delta Air Lines, Inc.
<PAGE>
EXHIBIT 24.C
------------
POWER OF ATTORNEY
I hereby constitute and appoint Ronald W. Allen, Thomas J. Roeck, Jr.,
and Robert S. Harkey, and each of them separately, as my true and lawful
attorneys-in-fact and agents, with full power of substitution, for me and in my
name, in any and all capacities, to sign on my behalf (1) one or more
registration statements to be filed by Delta Air Lines, Inc. ("Delta") on Form
S-8 or other appropriate form, or any amendment or supplement thereto, for the
registration under the Securities Act of 1933, as amended, of (a) an additional
14,700,000 shares of Common Stock, par value $3.00 per share, of Delta ("Common
Stock") in connection with the DeltaShare Stock Option Plan of Delta, and (b) an
additional 10,000,000 shares of Common Stock in connection with the Pilots Stock
Option Plan of Delta; (2) any application for registration or qualification (or
exemption therefrom) of such securities under the Blue Sky or other federal or
state securities laws and regulations; and (3) any other document or instrument
deemed necessary or appropriate by any of them in connection with such
application for registration or qualification (or exemption therefrom); and to
file any such registration statement, amendment, supplement, application, or
other document or instrument with the Securities and Exchange Commission or
other appropriate agency pursuant to applicable federal and state securities
laws and regulations.
IN WITNESS WHEREOF, I have hereunto set my hand this 24th day of
October, 1996.
/s/ James L. Broadhead
--------------------------
James L. Broadhead
Director
Delta Air Lines, Inc.
<PAGE>
EXHIBIT 24.D
------------
POWER OF ATTORNEY
I hereby constitute and appoint Ronald W. Allen, Thomas J. Roeck, Jr.,
and Robert S. Harkey, and each of them separately, as my true and lawful
attorneys-in-fact and agents, with full power of substitution, for me and in my
name, in any and all capacities, to sign on my behalf (1) one or more
registration statements to be filed by Delta Air Lines, Inc. ("Delta") on Form
S-8 or other appropriate form, or any amendment or supplement thereto, for the
registration under the Securities Act of 1933, as amended, of (a) an additional
14,700,000 shares of Common Stock, par value $3.00 per share, of Delta ("Common
Stock") in connection with the DeltaShare Stock Option Plan of Delta, and (b) an
additional 10,000,000 shares of Common Stock in connection with the Pilots Stock
Option Plan of Delta; (2) any application for registration or qualification (or
exemption therefrom) of such securities under the Blue Sky or other federal or
state securities laws and regulations; and (3) any other document or instrument
deemed necessary or appropriate by any of them in connection with such
application for registration or qualification (or exemption therefrom); and to
file any such registration statement, amendment, supplement, application, or
other document or instrument with the Securities and Exchange Commission or
other appropriate agency pursuant to applicable federal and state securities
laws and regulations.
IN WITNESS WHEREOF, I have hereunto set my hand this 16th day of
October, 1996.
/s/ Edward H. Budd
----------------------
Edward H. Budd
Director
Delta Air Lines, Inc.
<PAGE>
EXHIBIT 24.E
------------
POWER OF ATTORNEY
I hereby constitute and appoint Ronald W. Allen, Thomas J. Roeck, Jr.,
and Robert S. Harkey, and each of them separately, as my true and lawful
attorneys-in-fact and agents, with full power of substitution, for me and in my
name, in any and all capacities, to sign on my behalf (1) one or more
registration statements to be filed by Delta Air Lines, Inc. ("Delta") on Form
S-8 or other appropriate form, or any amendment or supplement thereto, for the
registration under the Securities Act of 1933, as amended, of (a) an additional
14,700,000 shares of Common Stock, par value $3.00 per share, of Delta ("Common
Stock") in connection with the DeltaShare Stock Option Plan of Delta, and (b) an
additional 10,000,000 shares of Common Stock in connection with the Pilots Stock
Option Plan of Delta; (2) any application for registration or qualification (or
exemption therefrom) of such securities under the Blue Sky or other federal or
state securities laws and regulations; and (3) any other document or instrument
deemed necessary or appropriate by any of them in connection with such
application for registration or qualification (or exemption therefrom); and to
file any such registration statement, amendment, supplement, application, or
other document or instrument with the Securities and Exchange Commission or
other appropriate agency pursuant to applicable federal and state securities
laws and regulations.
IN WITNESS WHEREOF, I have hereunto set my hand this 16th day of
October, 1996.
/s/ George D. Busbee
-----------------------
George D. Busbee
Director
Delta Air Lines, Inc.
<PAGE>
EXHIBIT 24.F
------------
POWER OF ATTORNEY
I hereby constitute and appoint Ronald W. Allen, Thomas J. Roeck, Jr.,
and Robert S. Harkey, and each of them separately, as my true and lawful
attorneys-in-fact and agents, with full power of substitution, for me and in my
name, in any and all capacities, to sign on my behalf (1) one or more
registration statements to be filed by Delta Air Lines, Inc. ("Delta") on Form
S-8 or other appropriate form, or any amendment or supplement thereto, for the
registration under the Securities Act of 1933, as amended, of (a) an additional
14,700,000 shares of Common Stock, par value $3.00 per share, of Delta ("Common
Stock") in connection with the DeltaShare Stock Option Plan of Delta, and (b) an
additional 10,000,000 shares of Common Stock in connection with the Pilots Stock
Option Plan of Delta; (2) any application for registration or qualification (or
exemption therefrom) of such securities under the Blue Sky or other federal or
state securities laws and regulations; and (3) any other document or instrument
deemed necessary or appropriate by any of them in connection with such
application for registration or qualification (or exemption therefrom); and to
file any such registration statement, amendment, supplement, application, or
other document or instrument with the Securities and Exchange Commission or
other appropriate agency pursuant to applicable federal and state securities
laws and regulations.
IN WITNESS WHEREOF, I have hereunto set my hand this 17th day of
October, 1996.
/s/ R. Eugene Cartledge
-----------------------
R. Eugene Cartledge
Director
Delta Air Lines, Inc.
<PAGE>
EXHIBIT 24.G
------------
POWER OF ATTORNEY
I hereby constitute and appoint Ronald W. Allen, Thomas J. Roeck, Jr.,
and Robert S. Harkey, and each of them separately, as my true and lawful
attorneys-in-fact and agents, with full power of substitution, for me and in my
name, in any and all capacities, to sign on my behalf (1) one or more
registration statements to be filed by Delta Air Lines, Inc. ("Delta") on Form
S-8 or other appropriate form, or any amendment or supplement thereto, for the
registration under the Securities Act of 1933, as amended, of (a) an additional
14,700,000 shares of Common Stock, par value $3.00 per share, of Delta ("Common
Stock") in connection with the DeltaShare Stock Option Plan of Delta, and (b) an
additional 10,000,000 shares of Common Stock in connection with the Pilots Stock
Option Plan of Delta; (2) any application for registration or qualification (or
exemption therefrom) of such securities under the Blue Sky or other federal or
state securities laws and regulations; and (3) any other document or instrument
deemed necessary or appropriate by any of them in connection with such
application for registration or qualification (or exemption therefrom); and to
file any such registration statement, amendment, supplement, application, or
other document or instrument with the Securities and Exchange Commission or
other appropriate agency pursuant to applicable federal and state securities
laws and regulations.
IN WITNESS WHEREOF, I have hereunto set my hand this 16th day of
October, 1996.
/s/ Mary Johnston Evans
-----------------------
Mary Johnston Evans
Director
Delta Air Lines, Inc.
<PAGE>
EXHIBIT 24.H
------------
POWER OF ATTORNEY
I hereby constitute and appoint Ronald W. Allen, Thomas J. Roeck, Jr.,
and Robert S. Harkey, and each of them separately, as my true and lawful
attorneys-in-fact and agents, with full power of substitution, for me and in my
name, in any and all capacities, to sign on my behalf (1) one or more
registration statements to be filed by Delta Air Lines, Inc. ("Delta") on Form
S-8 or other appropriate form, or any amendment or supplement thereto, for the
registration under the Securities Act of 1933, as amended, of (a) an additional
14,700,000 shares of Common Stock, par value $3.00 per share, of Delta ("Common
Stock") in connection with the DeltaShare Stock Option Plan of Delta, and (b) an
additional 10,000,000 shares of Common Stock in connection with the Pilots Stock
Option Plan of Delta; (2) any application for registration or qualification (or
exemption therefrom) of such securities under the Blue Sky or other federal or
state securities laws and regulations; and (3) any other document or instrument
deemed necessary or appropriate by any of them in connection with such
application for registration or qualification (or exemption therefrom); and to
file any such registration statement, amendment, supplement, application, or
other document or instrument with the Securities and Exchange Commission or
other appropriate agency pursuant to applicable federal and state securities
laws and regulations.
IN WITNESS WHEREOF, I have hereunto set my hand this 16th day of
October, 1996.
/s/ Gerald Grinstein
-----------------------
Gerald Grinstein
Director
Delta Air Lines, Inc.
<PAGE>
EXHIBIT 24.I
------------
POWER OF ATTORNEY
I hereby constitute and appoint Ronald W. Allen, Thomas J. Roeck, Jr.,
and Robert S. Harkey, and each of them separately, as my true and lawful
attorneys-in-fact and agents, with full power of substitution, for me and in my
name, in any and all capacities, to sign on my behalf (1) one or more
registration statements to be filed by Delta Air Lines, Inc. ("Delta") on Form
S-8 or other appropriate form, or any amendment or supplement thereto, for the
registration under the Securities Act of 1933, as amended, of (a) an additional
14,700,000 shares of Common Stock, par value $3.00 per share, of Delta ("Common
Stock") in connection with the DeltaShare Stock Option Plan of Delta, and (b) an
additional 10,000,000 shares of Common Stock in connection with the Pilots Stock
Option Plan of Delta; (2) any application for registration or qualification (or
exemption therefrom) of such securities under the Blue Sky or other federal or
state securities laws and regulations; and (3) any other document or instrument
deemed necessary or appropriate by any of them in connection with such
application for registration or qualification (or exemption therefrom); and to
file any such registration statement, amendment, supplement, application, or
other document or instrument with the Securities and Exchange Commission or
other appropriate agency pursuant to applicable federal and state securities
laws and regulations.
IN WITNESS WHEREOF, I have hereunto set my hand this 22nd day of
October, 1996.
/s/ Jesse Hill, Jr.
----------------------
Jesse Hill, Jr.
Director
Delta Air Lines, Inc.
<PAGE>
EXHIBIT 24.J
------------
POWER OF ATTORNEY
I hereby constitute and appoint Ronald W. Allen, Thomas J. Roeck, Jr.,
and Robert S. Harkey, and each of them separately, as my true and lawful
attorneys-in-fact and agents, with full power of substitution, for me and in my
name, in any and all capacities, to sign on my behalf (1) one or more
registration statements to be filed by Delta Air Lines, Inc. ("Delta") on Form
S-8 or other appropriate form, or any amendment or supplement thereto, for the
registration under the Securities Act of 1933, as amended, of (a) an additional
14,700,000 shares of Common Stock, par value $3.00 per share, of Delta ("Common
Stock") in connection with the DeltaShare Stock Option Plan of Delta, and (b) an
additional 10,000,000 shares of Common Stock in connection with the Pilots Stock
Option Plan of Delta; (2) any application for registration or qualification (or
exemption therefrom) of such securities under the Blue Sky or other federal or
state securities laws and regulations; and (3) any other document or instrument
deemed necessary or appropriate by any of them in connection with such
application for registration or qualification (or exemption therefrom); and to
file any such registration statement, amendment, supplement, application, or
other document or instrument with the Securities and Exchange Commission or
other appropriate agency pursuant to applicable federal and state securities
laws and regulations.
IN WITNESS WHEREOF, I have hereunto set my hand this 17th day of
October, 1996.
/s/ Peter D. Sutherland
-----------------------
Peter D. Sutherland
Director
Delta Air Lines, Inc.
<PAGE>
EXHIBIT 24.K
------------
POWER OF ATTORNEY
I hereby constitute and appoint Ronald W. Allen, Thomas J. Roeck, Jr.,
and Robert S. Harkey, and each of them separately, as my true and lawful
attorneys-in-fact and agents, with full power of substitution, for me and in my
name, in any and all capacities, to sign on my behalf (1) one or more
registration statements to be filed by Delta Air Lines, Inc. ("Delta") on Form
S-8 or other appropriate form, or any amendment or supplement thereto, for the
registration under the Securities Act of 1933, as amended, of (a) an additional
14,700,000 shares of Common Stock, par value $3.00 per share, of Delta ("Common
Stock") in connection with the DeltaShare Stock Option Plan of Delta, and (b) an
additional 10,000,000 shares of Common Stock in connection with the Pilots Stock
Option Plan of Delta; (2) any application for registration or qualification (or
exemption therefrom) of such securities under the Blue Sky or other federal or
state securities laws and regulations; and (3) any other document or instrument
deemed necessary or appropriate by any of them in connection with such
application for registration or qualification (or exemption therefrom); and to
file any such registration statement, amendment, supplement, application, or
other document or instrument with the Securities and Exchange Commission or
other appropriate agency pursuant to applicable federal and state securities
laws and regulations.
IN WITNESS WHEREOF, I have hereunto set my hand this 19th day of
October, 1996.
/s/ Andrew J. Young
----------------------
Andrew J. Young
Director
Delta Air Lines, Inc.
