<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
ASA HOLDINGS, INC.
- - --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- - --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
[LOGO]
ASA HOLDINGS, INC.
100 HARTSFIELD CENTRE PARKWAY
SUITE 800
ATLANTA, GEORGIA 30354-1356
(404) 766-1400
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To the Shareholders of ASA Holdings, Inc.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of ASA
Holdings, Inc. ("ASA HOLDINGS") will be held in Meeting Rooms 117-118 at the
Cobb Galleria Centre, Two Galleria Parkway, Atlanta, Georgia, on Wednesday, May
21, 1997, at 11:00 a.m. Eastern Daylight Savings Time, for the following
purposes:
(1) To consider and vote on a proposal to fix the number of Directors of
ASA Holdings at six (6) and to elect six (6) Directors for the
ensuing year; and
(2) To consider and vote upon a proposal to adopt and approve the ASA
Holdings, Inc. 1997 Nonqualified Stock Option Plan; and
(3) To transact such other business as may properly come before the
meeting.
These items and other matters relating to the Annual Meeting are more fully
discussed in the Proxy Statement accompanying this notice, which is hereby
incorporated herein.
Holders of record of ASA Holdings' common stock, $0.10 par value per
share, at the close of business on April 4, 1997, will be entitled to notice of
and to vote at the Annual Meeting. A list of shareholders entitled to vote at
the Annual Meeting will be maintained during the 10-day period before the
Annual Meeting at ASA Holdings' corporate offices.
Whether or not you expect to be present in person at the Annual Meeting,
please sign and date the accompanying proxy card and return it promptly in the
enclosed postage paid reply envelope. This will assist us in preparing for the
Annual Meeting. Returning your executed proxy card will not affect your right
to attend the Annual Meeting and vote your shares in person.
BY ORDER OF THE BOARD OF DIRECTORS
John W. Beiser
Secretary
April 16, 1997
Atlanta, Georgia
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<S> <C>
THE REORGANIZATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
THE 1997 ANNUAL MEETING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Solicitation of Proxies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Action to be Taken Under the Proxies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Voting Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
ELECTION OF DIRECTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Identification of Executive Officers, Directors and Nominees for Election as a Director . . . . . . . . . . . . . 5
Identification of Other Significant Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Committees of the Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Compensation Committee Interlocks and Additional Information with Respect to Compensation Decisions . . . . . . . 8
Meetings of the Board of Directors and Committees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Compensation of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
EXECUTIVE COMPENSATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Compensation Committee Report on Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Employment Contracts, Termination of Employment and Change-in-Control Arrangements . . . . . . . . . . . . . . . . 18
EXECUTIVE COMPENSATION SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Summary Compensation Table . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Option and SAR Grants Table . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Option and SAR Exercise Table . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Stock Price Performance Graph . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
PROPOSAL TO ADOPT AND APPROVE THE 1997 NONQUALIFIED STOCK OPTION PLAN . . . . . . . . . . . . . . . . . . . . . . . . 26
Reasons for Adopting the Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Purposes of the Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Plan Participants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Terms of Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Shares Available Under the 1997 Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Exchange of Stock Appreciation Rights for Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Reload Option Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Effect of Termination of Employment, Death or Disability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Exercise of Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Other Terms of the 1997 Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Federal Income Tax Effects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
New Plan Benefits Table . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Approval of the Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
RELATIONSHIP WITH INDEPENDENT AUDITORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
OTHER MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Shareholders' Proposals for 1998 Annual Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Action on Other Matters at the 1997 Annual Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 16(a) Beneficial Ownership Reporting Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Incorporation of Proxy Statement by Reference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
</TABLE>
<PAGE> 4
ASA HOLDINGS, INC.
100 HARTSFIELD CENTRE PARKWAY
SUITE 800
ATLANTA, GEORGIA 30354-1356
(404) 766-1400
------------------------
ANNUAL SHAREHOLDERS' MEETING
MAY 21, 1997
------------------------
This Proxy Statement is furnished in connection with the solicitation of
proxies on behalf of the Board of Directors of ASA Holdings, Inc. ("ASA
HOLDINGS") to be voted at ASA Holdings' Annual Meeting of Shareholders to be
held on May 21, 1997, and any postponements or adjournments thereof (the
"1997 ANNUAL MEETING"), for the purposes set forth in the accompanying Notice
of Annual Meeting of Shareholders, which is hereby incorporated herein. The
1997 Annual Meeting will be held in Meeting Rooms 117-118 at Cobb Galleria
Centre, Two Galleria Parkway, Atlanta, Georgia, on Wednesday, May 21, 1997, at
11:00 a.m., Eastern Daylight Savings Time. ASA Holdings is sending this Proxy
Statement and its Annual Report for the year ended December 31, 1996 (the
"1996 ANNUAL REPORT") to each shareholder of record (a "SHAREHOLDER" and
collectively, the "SHAREHOLDERS") as of the April 4, 1997 record date (the
"RECORD DATE"). ASA Holdings first sent or gave this Proxy Statement and
accompanying form of proxy (the "PROXY CARD") to the Shareholders on or about
April 16, 1997. The 1996 Annual Report, which contains financial and other
information regarding ASA Holdings and its subsidiaries, is not incorporated
in this Proxy Statement and is not deemed to be a part of the proxy
solicitation materials.
THE REORGANIZATION
ASA Holdings is a holding company the principal assets of which are the
shares of its wholly owned subsidiaries Atlantic Southeast Airlines, Inc.
("ASA") and ASA Investments, Inc. ("ASA INVESTMENTS"). ASA Holdings became the
parent holding company for ASA and ASA Investments pursuant to a corporate
reorganization (the "REORGANIZATION"), which was effective after the close of
business on December 31, 1996. In May 1996, ASA's Board of Directors approved
the Reorganization subject to the approval of ASA's shareholders. The
shareholders approved the Reorganization on December 23, 1996.
Pursuant to the Reorganization, ASA merged with a wholly owned subsidiary
of ASA Holdings. As part of the merger, each issued and outstanding share of
ASA's common stock (other than shares of treasury stock, which were canceled)
was converted into one share of ASA Holdings' common stock. Immediately after
the merger on December 31, 1996, ASA effected a dividend to ASA Holdings of all
of the capital stock of ASA Investments. As a result of the Reorganization,
ASA and ASA Investments became the wholly owned subsidiaries of ASA Holdings.
ASA Holdings' Board of Directors believes that the holding company
structure makes available to ASA Holdings and its subsidiaries a greater
selection of financing, acquisition and organizational alternatives than was
available to ASA prior to the Reorganization. The holding company structure
provides greater flexibility than was available to ASA primarily because (a)
any new subsidiaries formed by ASA Holdings will be insulated from the
liabilities of and risks associated with ASA's operation of a commercial
airline; (b) ASA will be better insulated from the liabilities of any risks
associated with the operation of businesses by other subsidiaries of ASA
Holdings; (c) ASA Holdings and its other subsidiaries will not be restricted by
credit
<PAGE> 5
agreements that have been or may be entered into by ASA that include
restrictive covenants; (d) ASA Holdings and its other subsidiaries will not be
constrained by the other contracts that, from time to time, are binding on ASA;
(e) ASA will not be constrained by the credit agreements or other contracts
entered into by ASA Holdings' other subsidiaries; (f) depending on the business
conducted, ASA Holdings and its subsidiaries may be free from certain direct
constraints on ASA imposed by regulatory requirements; and (g) the holding
company structure accommodates future acquisition opportunities, whether the
acquisition is inside or outside of ASA's current line of business, because ASA
Holdings can now acquire additional businesses directly, thereby permitting
these businesses to remain independent of ASA's operations.
THE 1997 ANNUAL MEETING
SOLICITATION OF PROXIES
ASA Holdings will solicit proxies for the 1997 Annual Meeting by mail. ASA
Holdings' directors, officers and regular employees may also solicit proxies
personally or by telephone, but such persons will not be specially compensated
for such services. ASA Holdings' regularly retained investor relations firm,
Corporate Communications, Inc., may also solicit proxies by telephone and mail.
ASA Holdings will bear the cost of this solicitation. ASA Holdings will not
pay Corporate Communications, Inc. a separate fee for any such solicitations.
ASA Holdings will reimburse banks, brokers, nominees and other custodians and
fiduciaries for their reasonable out-of-pocket expenses in forwarding
soliciting material to beneficial owners of ASA Holdings' common stock, $0.10
par value per share ("HOLDINGS COMMON STOCK"), as of the Record Date. ASA
Holdings will bear the expense of preparing, assembling, printing, mailing and
soliciting proxies.
ACTION TO BE TAKEN UNDER THE PROXIES
When a Shareholder properly executes and timely returns a proxy card in the
enclosed form, the shares of Holdings Common Stock represented by the proxy
card will be voted at the 1997 Annual Meeting in the manner specified on the
proxy card.
EXECUTION OF PROXY CARDS. If a Shareholder is a corporation or a
partnership, a duly authorized person should sign the accompanying proxy card
in the full corporate or partnership name. If shares are registered in more
than one name, each registered owner should sign the proxy card. If the person
executing the proxy card is doing so pursuant to a power of attorney or as an
executor, administrator, trustee or guardian, the person should include his or
her full title on the proxy card and should include a certificate or other
evidence of appointment with the proxy card when delivering it to ASA Holdings'
corporate Secretary.
ELECTION OF DIRECTORS. Unless instructed otherwise on the proxy card, one
or both of the persons named as proxies on the proxy cards will vote all
properly executed and timely received proxy cards at the 1997 Annual Meeting
"FOR" the proposal to fix the number of Directors at six (6) and to elect the
six (6) nominees for election as a Director named under the heading "ELECTION
OF DIRECTORS."
1997 NONQUALIFIED STOCK OPTION PLAN. Unless instructed otherwise on the
proxy card, one or both of the persons named as proxies on the proxy cards will
vote all properly executed and timely received proxy cards at the 1997 Annual
Meeting "FOR" the proposal to adopt and approve the ASA Holdings, Inc. 1997
Nonqualified Stock Option Plan (the "1997 PLAN") as described under the heading
"PROPOSAL TO ADOPT AND APPROVE THE 1997 NONQUALIFIED STOCK OPTION PLAN."
2
<PAGE> 6
OTHER MATTERS. ASA Holdings' management knows of no matter to be brought
before the 1997 Annual Meeting other than those mentioned herein. If, however,
any other matters properly come before the meeting, it is intended that one or
both of the persons named as proxies on the proxy cards will vote the properly
executed and timely received proxy cards in accordance with the judgment of
such persons. If a broker indicates on a proxy card that it does not have
discretionary authority with respect to certain shares of Holdings Common Stock
to vote on a particular matter (i.e., a broker non-vote), those shares will
not be voted on that matter.
REVOCATION OF PROXIES. Any Shareholder who timely delivers a properly
executed proxy card will revoke all prior proxies given by that Shareholder.
Any Shareholder who timely delivers a properly executed proxy card may revoke
it at any time prior to the exercise of that proxy. Any proxy card may be
revoked by the Shareholder executing the proxy card if the Shareholder attends
the 1997 Annual Meeting and gives oral notice of the Shareholder's election to
vote in person, without compliance with any other formalities. In addition,
any proxy card may be revoked prior to the 1997 Annual Meeting by the
Shareholder executing the proxy card if the Shareholder delivers an instrument
revoking it or a duly executed proxy card bearing a later date to ASA Holdings'
corporate Secretary.
VOTING RIGHTS
Holdings Common Stock is the only class of securities entitled to vote at
the 1997 Annual Meeting. The Board of Directors, pursuant to ASA Holdings'
Bylaws, has fixed April 4, 1997, at the close of business, as the Record Date
for the determination of holders of Holdings Common Stock entitled to notice of
and to vote at the 1997 Annual Meeting or at any postponements or adjournments
thereof. At April 4, 1997, there were 29,858,570 shares of Holdings Common
Stock outstanding and entitled to be voted at the 1997 Annual Meeting
(excluding any treasury shares).
Each share of Holdings Common Stock is entitled to one vote at the 1997
Annual Meeting.
QUORUM REQUIREMENTS. A majority of the outstanding shares of Holdings
Common Stock represented at the meeting, in person or by proxy, will constitute
a quorum. Abstentions and broker non-votes will be treated as shares that are
present and entitled to vote for purposes of determining if a quorum is
present.
FIX NUMBER OF DIRECTORS. If a quorum is present, the number of directors
to be elected for the ensuing year will be fixed at six (6) unless the votes
cast favoring a lesser number (as indicated by striking a line through one or
more nominees' names on the proxy card) exceed the votes cast favoring the
proposal to fix the number at six (6). Any shares not voted (whether by
abstention, broker non-vote or otherwise) will have no impact on the vote
because the shares will be treated as not having been voted.
ELECTION OF DIRECTORS. In connection with the election of Directors, if a
quorum is present the nominees receiving a plurality of the votes cast will be
elected as Directors. For such purposes, only shares that are voted (votes
cast for nominees and votes withheld) will be counted. Any shares not voted
(whether by abstention, broker non-vote or otherwise) will have no impact on
the vote because the shares will be treated as not having been voted.
PROPOSAL TO ADOPT AND APPROVE THE 1997 PLAN. With respect to the proposal
to adopt and approve the 1997 Plan, if a quorum is present the proposal will
pass if the votes cast favoring the action exceed the votes cast opposing the
action. Any shares not voted (whether by abstention, broker non-vote or
otherwise) will have no impact on the vote because the shares will be treated
as not having been voted.
3
<PAGE> 7
OTHER MATTERS. With respect to all other matters to be voted upon at the
1997 Annual Meeting, if a quorum is present a proposal will pass if the votes
cast favoring the action exceed the votes cast opposing the action. Any shares
not voted (whether by abstention, broker non-vote or otherwise) will have no
impact on the vote because the shares will be treated as not having been voted.
At this time, ASA Holdings' management does not know of any other matters to be
presented for action at the 1997 Annual Meeting
VOTE BY DIRECTORS AND EXECUTIVE OFFICERS. For purposes of any vote at
the 1997 Annual Meeting, as of the Record Date ASA Holdings' Directors and
Executive Officers as a group (8 persons) beneficially owned 1,518,764 shares
of Holdings Common Stock (approximately 5.1%). See "SECURITY OWNERSHIP OF
MANAGEMENT AND CERTAIN BENEFICIAL OWNERS."
ELECTION OF DIRECTORS
The Board of Directors has nominated the following individuals for
membership on ASA Holdings' Board of Directors: John W. Beiser, Jean A. Mori,
Parker H. Petit, George F. Pickett, Alan M. Voorhees, and Ralph W. Voorhees.
The Board of Directors recommends a vote "FOR" each of these nominees.
The entire Board of Directors of ASA Holdings, Inc. will be elected for a
term of one year and until their successors are elected and qualified or until
their earlier resignation or removal. ASA Holdings' Bylaws provide that there
shall be not less than three (3), nor more than nine (9), Directors and that
the exact number may be fixed from time to time by ASA Holdings' shareholders.
The Board of Directors recommends that the Shareholders vote "FOR" the proposal
to fix the number of Directors at six (6) and to elect the six (6) named
nominees for election as a Director for the ensuing year. It is the intention
of the persons named as proxies in the accompanying proxy card to vote "FOR"
setting the number of Directors at six (6) and "FOR" electing the six (6)
nominees identified above. If for any reason any such nominee is not a
candidate when the election occurs, which event is not anticipated, it is the
intention of the persons named as proxies in the accompanying proxy card to
vote "FOR" the remaining nominees named and to vote in accordance with their
best judgment if any substitute nominees are designated by the proxy holders or
by ASA Holdings' Board of Directors to fill the vacancy; provided, however, the
proxies will not be voted for a greater or lesser number of nominees than six
(6), unless the Shareholders vote to set the number of Directors at a number
more or less than six (6).
Except for Julius P. Gwin, who retired in September 1996, all of the
nominees for election as a Director of ASA Holdings are the same individuals
that were elected as directors by the shareholders of ASA at its Annual Meeting
of Shareholders in 1996. ASA Holdings' Board of Directors authorized the
election of all of ASA's directors who were in office immediately prior to the
effectiveness of the Reorganization to serve as members of ASA Holdings' Board
of Directors immediately after the Reorganization was effective.
Under the terms of a Stock Agreement dated as of March 17, 1997 (the "STOCK
AGREEMENT") among ASA Holdings, ASA, Delta Air Lines, Inc. ("DELTA") and Delta
Air Lines Holdings, Inc., Delta's wholly-owned subsidiary, Delta has the right
to designate up to two members of ASA Holdings' Board of Directors so long as
Delta continues to beneficially own (directly or indirectly) at least 10% of
the outstanding Holdings Common Stock. Prior to the Reorganization, Delta had
substantially the same rights with respect to ASA's Board of Directors. Julius
P. Gwin, a Delta designated member of ASA's Board of Directors, retired
effective as of September 1, 1996. Edward H. West was designated by Delta to
fill the resulting vacancy. Mr. West resigned effective as of March 27, 1997,
when Delta decided to remove its designated members from ASA Holdings' Board of
Directors. As of February 15, 1997, Delta (indirectly through its wholly owned
subsidiary Delta Air Lines Holdings, Inc.) beneficially owned approximately
26.8% of the outstanding Holdings Common Stock.
4
<PAGE> 8
See "SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS." See also
"CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS."
IDENTIFICATION OF EXECUTIVE OFFICERS, DIRECTORS AND NOMINEES FOR ELECTION AS A
DIRECTOR
The following information is furnished with respect to each Director,
each nominee for election as a Director, and for each executive officer named in
the "SUMMARY COMPENSATION TABLE" under the caption "EXECUTIVE COMPENSATION
SUMMARY" (the "EXECUTIVE OFFICERS"):
<TABLE>
<CAPTION>
Director Executive
Executive Officers and Directors Age Since (1) Officer Since (1)
-------------------------------- --- --------- -----------------
<S> <C> <C> <C>
George F. Pickett, Director and Executive Officer 56 1979 1979
(Chairman of the Board and Chief Executive Officer)
John W. Beiser, Director and Executive Officer 56 1982 1979
(President and Secretary)
Ronald V. Sapp, Executive Officer 52 -- 1985
(Vice President and Chief Financial Officer)
R. Mark Bole, Executive Officer 38 -- 1997
(Assistant Vice President-Treasurer)
Jean A. Mori, Director 60 1994 --
Parker H. Petit, Director 57 1982 --
Alan M. Voorhees, Director 74 1979 --
Ralph W. Voorhees, Director 70 1979 --
</TABLE>
(1) If years prior to 1997 are indicated below, tenure in this position with
ASA prior to the Reorganization is included in lieu of tenure with ASA
Holdings, which was incorporated in September 1996.
John W. Beiser is the brother-in-law of Ralph W. Voorhees who is the
brother of Alan M. Voorhees. There are no other family relationships among any
of the Executive Officers, Directors and nominees for election as a Director
who are listed above.
George F. Pickett is ASA Holdings' and ASA's Chairman of the Board and
Chief Executive Officer and a member of the Board of Directors of both
companies. He has served as Chairman of the Board and Chief Executive Officer
of ASA since February 1994 and of ASA Holdings since its inception in September
1996. Since ASA's inception in 1979 and until February 1994, he served as ASA's
President and Chief Executive Officer. Mr. Pickett has been a member of the
Board of Directors of both ASA and ASA Holdings since their respective
inception.
John W. Beiser is ASA Holdings' and ASA's President and a member of the
Board of Directors of both companies. He has served as President of ASA since
February 1994 and of ASA Holdings since its inception in September 1996. He
has served as Secretary of both companies since their respective inception. In
addition, Mr. Beiser was ASA's Vice President from its inception until 1985 when
he was designated as ASA's Senior Vice President-Sales and Services. Mr. Beiser
has been a member of the Board of Directors of ASA since 1982 and of ASA
Holdings since its inception.
Ronald V. Sapp is ASA Holdings' and ASA's Vice President-Finance and Chief
Financial Officer. Mr. Sapp has been Vice President-Finance and Chief
Financial Officer for ASA since 1985 and for
5
<PAGE> 9
ASA Holdings since the Reorganization was effective. He served as ASA's
Treasurer from 1985 until February 1997 and as ASA Holdings' Treasurer between
September 1996 and February 1997. From 1983 to 1985, Mr. Sapp served as Vice
President-Finance and Treasurer of Air Atlanta, Inc., a scheduled passenger
airline. From 1979 to 1983, Mr. Sapp served as Vice President and Controller
of Air California, Inc., a scheduled passenger airline.
R. Mark Bole was named ASA Holdings' and ASA's Assistant Vice
President-Treasurer in February 1997. He was also designated as an executive
officer by ASA Holdings in 1997. He was ASA's Assistant Vice
President-Assistant Treasurer from February 1996 until February 1997 and held
the same positions with ASA Holdings from the effective date of the
Reorganization until February 1997. Mr. Bole served as a Vice President of
Wachovia Bank of Georgia, N.A., from May 1991 until February 1996.
Jean A. Mori has been a member of ASA Holdings' Board of Directors since
September 30, 1996, and was a member of ASA's Board of Directors from 1994
until December 31, 1996. Mr. Mori is Chairman of the Board and President of
Mori Luggage & Gifts, Inc., a retail chain of 26 stores throughout the
Southeast specializing in luggage, business cases, leather goods and gifts. He
has held this position since the founding of Mori Luggage & Gifts, Inc. in
1971. Mr. Mori served as the President of the National Luggage Dealers
Association from 1986 to 1988 and has served on its Board of Directors since
1980. Mr. Mori is a member of the Compensation Committee of ASA Holdings'
Board of Directors.
Parker H. Petit has been a member of ASA Holdings' Board of Directors since
September 30, 1996, and was a member of ASA's Board of Directors from 1982
until December 31, 1996. Mr. Petit has been Chairman of the Board and Chief
Executive Officer of Healthdyne, Inc., a diversified health care technology and
services company, since he participated in its founding in 1970. Mr. Petit has
also served as a director of Healthdyne Technologies since May 1995, Healthdyne
Information Enterprises since November 1995, Matria Healthcare since March
1996, and Inteligent Systems, Inc. since May 1996. Mr. Petit is a member of
the Compensation Committee of ASA Holdings' Board of Directors.
Alan M. Voorhees has been a member of ASA Holdings' Board of Directors
since September 30, 1996, and was a member of ASA's Board of Directors from 1979
until December 31, 1996. Mr. Voorhees was Chairman of the Board of ASA from
1979 until February 1994. Mr. Voorhees is Chairman of the Board of Summit
Enterprises, Inc. of Virginia, an investment management firm organized by Mr.
Voorhees in 1979. Mr. Voorhees has served as a director of Micros Systems,
Inc., an electronic cash register manufacturer for the hospitality industry,
since 1982. Mr. Voorhees is a member of the Audit Committee of ASA Holdings'
Board of Directors.
Ralph W. Voorhees has been a member of ASA Holdings' Board of Directors
since September 30, 1996, and was a member of ASA's Board of Directors from
1979 until December 31, 1996. Mr. Voorhees has been Senior Vice
President-Investments with PaineWebber Incorporated, an investment banking
firm, since 1973. Mr. Voorhees is a member of the Audit Committee of ASA
Holdings' Board of Directors.
The shares of Holdings Common Stock beneficially owned by each such
Director and nominee for election as a Director and by the Executive Officers
is shown under the heading "SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN
BENEFICIAL OWNERS."
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<PAGE> 10
IDENTIFICATION OF OTHER SIGNIFICANT EMPLOYEES
The following information is furnished with respect to other significant
employees of ASA Holdings and ASA:
<TABLE>
<CAPTION>
Other Significant Employees Age Employee Since (1)
--------------------------- --- ------------------
<S> <C> <C>
William H. Hinson (Vice President) 51 1987
Tilden M. Shanahan (Vice President) 64 1985
Renee H. Skinner (Asst. Vice President) 40 1986
Samuel J. Watts (Vice President) 49 1983
</TABLE>
(1) If years prior to 1997 are indicated below, tenure in this position with
ASA prior to the Reorganization is included in lieu of tenure with ASA
Holdings, which was incorporated in September 1996.
William H. Hinson has served as ASA's Vice President-Technical Services
since 1992. Mr. Hinson served as ASA's Director of Maintenance from 1987 until
1992.
Tilden M. Shanahan has been ASA's Vice President-Flight Operations since
1985. From 1984 to 1985, Mr. Shanahan served as Vice President of Flight
Operations for Jet Express, Inc., a charter airline. From 1960 to 1984, Mr.
Shanahan served as a pilot, check pilot and Vice President of Flying for
Republic Airlines, Inc., a major airline.
Renee H. Skinner is ASA Holdings' and ASA's Assistant Vice
President-Controller. She has held these positions with ASA since 1994 and
with ASA Holdings since the Reorganization was effective. Ms. Skinner served
as ASA's Manager of Accounting from 1986 through 1994.
Samuel J. Watts has been employed by ASA in customer service positions
since 1983. From 1985 to 1994, he was ASA's Vice President-Customer Services.
In 1994, he was elected as ASA's Vice President-Sales and Customer Services.
Mr. Watts was employed by Southeastern Airlines, a regional airline, from 1982
to 1983 as its Vice President-Marketing. From 1972 to 1982, Mr. Watts worked
for Eastern Airlines, Inc., a major airline, in various line and staff
positions. Mr. Watts' last position at Eastern was as Manager of Interline
Sales.
COMMITTEES OF THE BOARD OF DIRECTORS
ASA Holdings has two standing committees, an Audit Committee and a
Compensation Committee. ASA Holdings does not have a separate nominating
committee.
ASA Holdings' Audit Committee currently consists of Alan M. Voorhees and
Ralph W. Voorhees. Immediately prior to the Reorganization, ASA's Audit
Committee consisted of Jean A. Mori, Ralph Voorhees and Edward H. West.
Immediately after the Reorganization, ASA Holdings' Audit Committee consisted
of the same three individuals. Mr. West resigned as a member of the Audit
Committee and the Board of Directors effective as of March 27, 1997. Mr. Alan
Voorhees replaced Jean Mori on the Audit Committee in April 1997 when Mr. Mori
was appointed to serve on the Compensation Committee. ASA Holdings' Audit
Committee is empowered to: (i) recommend to the Board of Directors (annually or
as required) the independent auditors for company; (ii) review and approve the
scope and general procedures to be used by both the internal and independent
auditors during the conduct of their examination; (iii) discuss audit findings
and/or management letter recommendations with representatives of the
independent auditors; (iv) review ASA Holdings' conflict of
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<PAGE> 11
interest policy and insure that such policy is actively maintained; (v) review
professional services provided by the independent auditors after service is
performed, including audit and other fees; (vi) review the independence and
objectivity of the internal audit function and the historical and proposed
activities of the internal audit department, and approve the scope of such
plans; (vii) review with ASA Holdings' chief financial and accounting officer
and independent auditors their reports, if any, as to the scope and adequacy of
the internal accounting controls and compliance with the record keeping
provisions of the Foreign Corrupt Practices Act; (viii) review any actual or
proposed changes in accounting principles which will have a material impact on
ASA Holdings' financial statements; and (ix) direct and supervise (where
appropriate) special investigations into any matters that raise questions about
the accuracy of ASA Holdings' financial statements or the adequacy of the
internal accounting controls.
ASA Holdings' Compensation Committee consists currently of Jean A. Mori and
Parker H. Petit. From May 1996 until immediately prior to the Reorganization,
ASA's Compensation Committee consisted of Parker H. Petit and Alan M. Voorhees.
Immediately after the Reorganization, ASA Holdings' Compensation Committee
consisted of the same two individuals. Mr. Mori replaced Mr. Alan Voorhees on
the Compensation Committee in April 1997. From January 1996 to May 1996, Alan
M. Voorhees and Ralph W. Voorhees served as ASA's Compensation Committee. The
Compensation Committee is empowered as described below under the caption
"COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION."
COMPENSATION COMMITTEE INTERLOCKS AND ADDITIONAL INFORMATION WITH RESPECT TO
COMPENSATION DECISIONS
The members of ASA's Compensation Committee at the end of fiscal 1996 were
Messrs. Petit and Alan M. Voorhees. From January 1996 to May 1996, Alan M.
Voorhees and Ralph W. Voorhees served as ASA's Compensation Committee. No
member of the Compensation Committee was also an officer or employee of ASA
during fiscal 1996.
Mitchell Hutchins, a subsidiary of PaineWebber Incorporated,
("PAINEWEBBER") managed cash and short-term investments for ASA Investments
until February 1, 1997. Ralph W. Voorhees, a member of ASA Holdings' Board of
Directors and a member of its Audit Committee and Compensation Committee at
different times during 1996, is a Senior Vice President-Investments for
PaineWebber. Mitchell Hutchins' compensation for such services is based on the
amount of assets invested on behalf of ASA Investments. With respect to
services rendered during fiscal 1996, ASA incurred accrued fees payable to
Mitchell Hutchins of approximately $151,000.
During fiscal 1996, ASA entered into certain other transactions with
companies that have business relationships with certain of its Directors and
Executive Officers, which relationships and transactions are described above
under the caption "CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS."
MEETINGS OF THE BOARD OF DIRECTORS AND COMMITTEES
During fiscal 1996, ASA's Board of Directors met four times, its Audit
Committee met one time and its Compensation Committee formally met one time.
Each incumbent ASA Holdings Director attended at least 75% of the aggregate of
(1) the total number of meetings of ASA's Board of Directors during the period
in 1996 in which he served as a Director, and (2) the total number of meetings
held by the committees of ASA's Board of Directors (i.e., the Audit Committee
and the Compensation Committee) on which he served during the period in 1996 in
which he served as a member the committee.
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<PAGE> 12
COMPENSATION OF DIRECTORS
During fiscal 1996, ASA's Directors who were employees of ASA and its
subsidiary received no additional or special remuneration for serving as
members of the Board of Directors. During fiscal 1996, the compensation for
each member of ASA's Board of Directors who was not also an officer or employee
of ASA or its subsidiary was set at $2,500 per quarter plus $1,000 for each
meeting of the Board of Directors and $500 for each meeting of a committee of
the Board of Directors that he attended. All members of ASA's Board of
Directors were reimbursed for their expenses associated with attendance at
formal Board meetings during fiscal 1996. During fiscal 1996, Alan M. Voorhees
also received additional compensation of $24,000 per year for consulting
services rendered to ASA.
ASA Holdings' Board of Directors has authorized similar remuneration for
non-employee directors during fiscal 1997, other than the consulting
compensation to Alan Voorhees, which is not expected to be paid during fiscal
1997.
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<PAGE> 13
EXECUTIVE COMPENSATION
GENERAL
In order to generally improve shareholders' understanding of all forms of
compensation paid to executive officers, the criteria used to reach such
compensation decisions, and any relationship between executive compensation and
corporate performance, the Securities and Exchange Commission (the "SEC")
adopted rules regarding the form and substance of the textural and tabular
disclosure of executive compensation by publicly-held corporations to their
shareholders. ASA Holdings hopes that the following disclosure provides its
shareholders with an understanding of ASA's executive compensation structure
during fiscal 1996 and insight into ASA's policies that shaped such
compensation, which policies ASA Holdings intends to continue, unless
indicated otherwise, during fiscal 1997.
During fiscal 1996, ASA's Compensation Committee regularly reviewed and
approved decisions with respect to compensation of its executive employees.
ASA's Board of Directors provided that up to three of its independent,
non-employee members should serve on its Compensation Committee and empowered
the committee to:
- approve compensation levels and increases for: (a) each executive
officer who also serves as a member of the Board of Directors, and
(b) any officer or employee whose annual base salary is in excess of
$90,000;
- approve all incentive payments to executive officers and other
employees in excess of $5,000, paid in cash or property in any
calendar year; and
- undertake administration, upon specific direction of the Board of
Directors, of employee benefit plans.
ASA's full Board of Directors generally did not formally review its
Compensation Committee's decisions relating to executive compensation, except
in the event that such decisions required the adoption of documents relating to
employee benefit plans or programs or the delegation to the Compensation
Committee of administrative responsibilities with respect to such plans or
programs. Decisions about grants or awards under stock-based employee benefit
plans were made solely by ASA's Compensation Committee where Rule 16b-3 of the
Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"), or Section
162(m) of the Internal Revenue Code of 1986, as amended (the "CODE"), required
that such grants or awards be made by a "disinterested" committee or by a
committee of "outside directors."
The SEC's rules addressing disclosure of executive compensation in proxy
statements generally, require ASA Holdings to include in this Proxy Statement a
report from the Compensation Committee addressing, with respect to the most
recently completed fiscal year (which for this Proxy Statement would be the
fiscal year ending December 31, 1996), (a) policies regarding executive
compensation generally, (b) the factors and criteria considered in setting the
compensation of the Chief Executive Officer, George F. Pickett, and (c) any
relationship between such compensation and the performance of ASA Holdings and
ASA, as appropriate.
Accordingly, set forth below, for inclusion in this Proxy Statement, is the
report submitted by Messrs. Jean A. Mori and Parker H. Petit in their capacity
as ASA Holdings' Compensation Committee. Messrs. Parker H. Petit and Alan M.
Voorhees served as ASA Holdings' Compensation Committee from December 31, 1996
through April 2, 1997. Messrs. Parker H. Petit and Alan M. Voorhees also
served as ASA's
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<PAGE> 14
Compensation Committee from May 1996 until the effectiveness of the
Reorganization on December 31, 1996, at which time ASA became ASA Holdings'
wholly owned subsidiary.
For clarification purposes, all references in the Compensation Committee
Report to executive compensation policies adopted and employed by the
Compensation Committee and management shall mean ASA's Compensation Committee
and management prior to the effectiveness of the Reorganization and ASA
Holdings' Compensation Committee and management thereafter, as appropriate.
References to common stock issuable pursuant to or with respect to any employee
benefit plan discussed in the Compensation Committee Report shall mean ASA
Common Stock prior to the effectiveness of the Reorganization and Holdings
Common Stock thereafter, as appropriate.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Executive Compensation Policies
The executive compensation policies employed by ASA's Compensation
Committee during fiscal 1996 were designed to provide a balanced compensation
program that would assist ASA to attract, motivate and retain talented executive
employees who ASA's Compensation Committee and senior management believed were
important to long-term financial performance. ASA sought to accomplish this
goal by providing a compensation program that, in the judgment of ASA's
Compensation Committee and senior management:
- was competitive with compensation programs offered by primary
competitors and by other comparably capitalized companies;
- integrated certain compensation elements with individual
contributions to the accomplishment of certain corporate and
operational goals; and
- linked certain compensation elements with an opportunity to own
common stock so that executive employees will have a personal
interest in the enhancement of share performance and, as a result,
have common interests with the shareholders.
The Compensation Committee believes that each of these factors is
integrally important to long-term financial performance. In designing and
implementing the individual components of the executive compensation program,
the Compensation Committee seeks a balance among these factors that varies
depending on the level of policy making and operational responsibility of the
executive employee. The Compensation Committee and senior management typically
review the structure of the executive compensation program annually to ensure
that these goals are being accomplished. The Compensation Committee also
periodically reevaluates the compensation program to determine if it is
competitive. This comparative analysis typically involves a review of
compensation programs offered by competitors and by other comparably capitalized
companies, to the extent such information is readily available to the
Compensation Committee. The Compensation Committee often includes in such a
review the compensation programs of comparably capitalized companies in the same
business (including companies in the Peer Group, as defined under the caption
"STOCK PRICE PERFORMANCE GRAPH" under the caption "EXECUTIVE COMPENSATION
SUMMARY").
During fiscal 1996, the components of ASA's executive compensation program
consisted of salary; cash incentive bonus awards; a retirement program
consisting of an investment savings plan, a deferred compensation plan and a
supplemental executive retirement plan; and long-term incentive bonus
arrangements in the form of stock appreciation rights (collectively "SARS" and
individually an "SAR"). The structure of the executive
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<PAGE> 15
compensation program for ASA's senior executives, Messrs. Pickett and Beiser
(the "SENIOR EXECUTIVE OFFICERS"), and certain aspects of the compensation
program for the other Executive Officers named in the "SUMMARY COMPENSATION
TABLE" and key executive employees was approved by ASA's Compensation Committee
and ratified by ASA's Board of Directors in 1990, except for the ASA Holdings,
Inc. Supplemental Executive Retirement Plan (the "SERP"), which was adopted in
1995. Cash incentive bonus awards for the Senior Executive Officers and awards
under the ASA Holdings, Inc. Stock Appreciation Rights Plan (the "SAR PLAN")
are designed to link compensation to various performance factors. Accordingly,
during fiscal 1996, ASA's Compensation Committee sought to grant a material
portion of the total compensation package for the Senior Executive Officers
through performance driven incentives. The same basic approach was taken with
respect to determining compensation levels for other Executive Officers and
executive employees.
ASA Holdings' and ASA's Executive Officers may participate in the Atlantic
Southeast Airlines, Inc. Investment Savings Plan (the "INVESTMENT SAVINGS
PLAN") on the same basic terms as ASA Holdings' and ASA's non-executive
employees, subject to certain legal limitations on contributions or benefits to
highly compensated employees. The Atlantic Southeast Airlines, Inc. Executive
Deferred Compensation Plan (the "EXECUTIVE DEFERRED COMPENSATION PLAN") was
established to provide tax deferred contributions that exceed the contribution
levels permitted under the Investment Savings Plan for highly compensated
employees. The SERP is intended to provide individually tailored supplemental
retirement income for certain key executive employees selected by the
Compensation Committee. The only participants in the SERP to date are the
Senior Executive Officers whose benefits under the SERP were designed to
provide them with a fixed minimum level of income after retirement. In order
to provide an incentive to the Senior Executive Officers to remain with ASA
Holdings and its subsidiaries at least until age 65, benefits under the SERP
will increase for every additional year, up to a maximum of ten years, that the
Senior Executive Officer remains with ASA Holdings and its subsidiaries past
age 55.
On December 20, 1995, the Internal Revenue Service and Department of
Treasury issued final regulations regarding compliance with Section 162(m) of
the Code which generally limits the corporate tax deduction for compensation to
$1 million for certain executive officers unless certain requirements are met.
The limitations apply to certain compensation paid to the chief executive
officer or any of the four highest paid officers of a publicly-held
corporation. To qualify for exemption from these limitations, the compensation
must be deemed to be "performance based" under Section 162(m). Such
"performance based" compensation must be paid solely on account of the
attainment of one or more pre-established, objective performance goals that are
established by a committee of "outside directors." In addition, the material
terms of these performance goals must be disclosed to and approved by the
corporation's shareholders and the committee of "outside directors" must
certify that the performance goals were attained. ASA Holdings' Compensation
Committee has determined that, while the $1 million compensation deduction cap
would be applicable to the Executive Officers, their compensation levels for
fiscal 1996 were substantially below the cap. Nevertheless, ASA Holdings
Compensation Committee intends to take Section 162(m) of the Code into
consideration when determining compensation levels and to consider appropriate
steps to mitigate any adverse impact this limitation may have on the
deductibility of executive compensation by ASA Holdings and its subsidiaries.
Salaries and Cash Incentive Bonus Awards
During fiscal 1996, ASA's Compensation Committee established the salaries
and bonus awards for the Senior Executive Officers and approved the salaries
and bonus awards for the other Executive Officers and key executive employees,
which were presented to ASA's Compensation Committee by the Senior Executive
Officers. In both cases, ASA's Compensation Committee established the salaries
and maximum bonus award levels based
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<PAGE> 16
on factors such as: compensation programs offered by the primary competitors
and by other comparably capitalized companies, annual inflation rates, ASA's
financial performance and individual performance of the executives. Annual
bonus awards to the Senior Executive Officers and other Executive Officers and
key executive employees, some of which are reflected in the "SUMMARY
COMPENSATION TABLE," are based on various subjective and objective performance
criteria. ASA's Compensation Committee established no specific mechanism by
which these specific subjective and objective factors were considered together
for purposes of establishing salaries and bonus awards, but rather considered
all of such factors in making a final determination of salary and bonus award
levels. ASA Holdings' Compensation Committee then evaluated these award
levels in fiscal 1997 to determine what percentage of the bonus award each
Senior Executive Officer earned based on the achievement of certain performance
criteria during fiscal 1996.
THE CHIEF EXECUTIVE OFFICER'S SALARY AND BONUS. Using the criteria
discussed above, at the beginning of fiscal 1996, ASA's Compensation Committee
set Mr. Pickett's fiscal 1996 base salary at $271,020, an increase of 3.2% from
fiscal 1995, and set his fiscal 1996 annual bonus award maximum at 50% of his
base salary during fiscal 1996. Increases in Mr. Pickett's base salary have an
impact on the amount of his annual bonus and the size of his award under the
SAR Plan. The bonus award was tied to ASA's Compensation Committee's
subjective determination of the achievement of certain objectives that were
established for fiscal 1996. The factors evaluated in fiscal 1996 included ASA
maintaining or improving certain specific performance criteria, including cost
control and customer service, and development of long-term strategies for ASA
and of ASA's senior management structure. After the end of fiscal 1996, ASA
Holdings' Board of Directors subjectively determined, in view of the performance
achieved, that Mr. Pickett earned 40% of his base salary during fiscal 1996.
At the end of fiscal 1995, ASA's Compensation Committee authorized ASA to pay
to Mr. Pickett annually additional salary to cover his Medicare tax liability
with respect to the vested portion of his interest in the SERP.
SENIOR EXECUTIVE OFFICER SALARY BONUS AWARDS. At the beginning of fiscal
1996, ASA's Compensation Committee set Mr. Beiser's fiscal 1996 base salary at
$264,600, an increase of 3.2% from fiscal 1995, and set his fiscal 1996
annual bonus award maximum at 50% of his base salary. Mr. Beiser's bonus award
was determined on the same basis as Mr. Pickett's bonus award. After the end
of fiscal 1996, ASA Holdings' Compensation Committee subjectively determined,
in view of the performance achieved, that Mr. Beiser earned 40% of his base
salary during fiscal 1996. At the end of fiscal 1995, ASA's Compensation
Committee authorized ASA to pay to Mr. Beiser annually additional salary to
cover his Medicare tax liability with respect to the vested portion of his
interest in the SERP.
OTHER EXECUTIVE OFFICER AND KEY EXECUTIVE EMPLOYEE SALARY AND BONUS AWARDS.
After the end of fiscal 1996, ASA Holdings' Compensation Committee, in
consultation with the Senior Executive Officers, approved the amount of the
cash bonus awards for the other Executive Officers and key executive employees
for the fiscal year just ended. While the criteria for such bonus awards was
not as specific as those for the Senior Executive Officers, the same basic
analysis was applied by the Senior Executive Officers in determining the amount
of the awards for the other Executive Officers and key executive employees that
the Senior Executive Officers recommended to ASA Holdings' Compensation
Committee.
Stock Appreciation Rights
The SAR Plan provides the Executive Officers employed by ASA and certain
other of ASA's key executive employees with the opportunity to benefit from
enhanced share performance. The SAR Plan, formerly known as the 1990 Stock
Appreciation Rights Plan of Atlantic Southeast Airlines, Inc., was approved by
ASA's Compensation Committee, adopted by ASA's Board of Directors and ratified
by ASA's shareholders during
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<PAGE> 17
fiscal 1990. ASA Holdings agreed to assume all of ASA's obligations under the
SAR Plan, to be a plan sponsor of the SAR Plan and to issue Holdings Common
Stock upon the exercise of SARs.
The SAR Plan is administered by the Compensation Committee which, in
accordance with the SAR Plan, has the authority to determine the persons who,
in their judgment, are key executive employees of ASA and are entitled to
receive SARs, the number of SARs to be granted to each, the grant price of each
SAR unit, the term within which the SARs may be exercised, and what portion of
the value of the SARs will be paid in common stock and what portion will be
paid in cash.
The grant price of the SARs is set by the Compensation Committee based on
the closing price of ASA Common Stock on The Nasdaq Stock Market's National
Market system (the "MARKET VALUE").
The SAR Plan provides for the issuance of up to 900,000 shares of Holdings
Common Stock in connection with the exercise of SARs. As of December 31, 1996,
472,997 shares of ASA's Common Stock had been issued under the SAR Plan and
790,400 SARs were outstanding under the SAR Plan. Assuming that all
exercisable outstanding SARs were exercised on December 31, 1996, 30,825
additional shares of ASA Common Stock would have been issued and 396,178 shares
of ASA Common Stock would have been available for subsequent issuance under the
SAR Plan.
The long-term incentive compensation sought to be awarded by the grant of
SARs is tied directly to the market performance of Holdings Common Stock. The
Compensation Committee determines the size of the SAR award so that it grants a
certain number of SARs which, if the underlying common stock actually
appreciates in accordance with a current market indicator, upon exercise of the
SARs one year from the date of grant would result in compensation approximately
equal to a certain percentage of the executive employee's base salary (50% for
Senior Executive Officers and 35% for other executive employees). ASA's
Compensation Committee applied these factors to determine the amount of the SAR
awards when the SAR Plan was initially implemented and applied the same factors
from that time through fiscal 1996.
The value of each SAR award at the time of exercise is equal to (a) the
market value of one share of Holdings Common Stock at the close of business on
the last trading date prior to the date of exercise, less (b) the grant price
of the SAR. To accomplish the Compensation Committee's intent to tie a SAR
Plan participant's awards to long term share performance, the SARs granted
through December 31, 1996, provide that upon the exercise of SARs, the
participant will receive 60% of the value of the SARs in the underlying common
stock and the balance in cash.
The SARs granted by the Compensation Committee through December 31, 1994,
were all exercisable generally during the period beginning six months after
the grant date and ending five years after the grant date (the longest possible
term). SARs granted in fiscal 1995 vest 50% on the first anniversary of the
grant date and 50% on the second anniversary of the grant date and are all
exercisable generally during the period beginning on the vesting date and
ending five years after the grant date. Each holder of exercisable SARs
granted to date may exercise the SARs as follows: (a) in the event of the
termination of the holder's employment (other than upon death), the holder may
exercise such SARs during a period ending at the earlier to occur of the end of
four months after the holder's termination date or the fifth anniversary of the
grant date of the SARs, or (b) in the event of the holder's death while
employed, the holder may exercise such SARs during a period ending on the
earlier to occur of the first anniversary of the date of the holder's death or
the fifth anniversary of the grant date of the SARs. SARs become void by their
terms if they are not exercised during the applicable period after termination
of employment or death either because the holder of the SARs elected not to
exercise or because the SARs were not exercisable during the period. The SARs
will be deemed to have been automatically exercised on the fifth
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<PAGE> 18
anniversary of the grant date, if they are not previously exercised or
terminated in the event of the holder's death or termination of employment.
Holders of SARs granted to date can only exercise such SARs during the "window
period" beginning on the third business day after the release by ASA Holdings
of its quarterly or annual earnings and ending on the twelfth business day
after the earnings release.
ASA Holdings receives no cash consideration upon the grant or exercise of
any SARs. Holders of SARs may not transfer the SARs, other than by will or by
the applicable laws of descent and distribution.
Deferred Compensation Plans
In order to provide compensation plans pursuant to which the Executive
Officers, certain key executive employees and other employees may defer income
for savings and retirement purposes, during fiscal 1996 ASA made the Investment
Savings Plan and the Executive Deferred Compensation Plan available to such
employees.
INVESTMENT SAVINGS PLAN. The Investment Savings Plan (formerly called the
Thrift Plan), adopted by ASA in 1984, is intended to qualify under Code Section
401(k). In connection with the Reorganization, ASA Holdings adopted the
Investment Savings Plan as a participating employer and agreed to be bound by
the terms and conditions of the Investment Savings Plan. Any employee who has
completed one year of employment with ASA Holdings or its subsidiaries is
generally eligible to participate in the Investment Savings Plan. Executive
employees are permitted to participate in the Investment Savings Plan on the
same basic terms as non-executive employees, subject to certain legal
limitations on contributions or benefits to highly compensated employees.
Employees participating in the Investment Savings Plan may contribute 1% or
more (in increments of 1%) of their compensation by way of salary reductions
not to exceed a maximum amount that varies annually in accordance with the Code
($9,500 in 1996 and in 1997). ASA and ASA Holdings contributed during fiscal
1996, and ASA Holdings and ASA expect to contribute annually, from earnings,
matching contributions of $.20 to $.50 (depending on the number of years of
participation) to the participant's account for every $1.00 of salary reduction
by that participant, provided that during fiscal 1996 ASA did not, and ASA
Holdings and ASA will not, make any matching contribution for salary reductions
in excess of 6% of a participant's compensation. Contributions to the accounts
of the persons listed in the "SUMMARY COMPENSATION TABLE" are included in the
column headed "All Other Compensation." Participants' interests in the
matching contributions allocated to their accounts vest over a period of seven
years.
Each Investment Savings Plan participant has the ability to invest his or
her account balance in a variety of funds, including the Holdings Common Stock
fund that gives the participant an opportunity to benefit from any enhancement
in the performance of Holdings Common Stock.
A participant's account is normally distributed when he or she retires,
dies or becomes disabled or otherwise terminates employment with ASA Holdings
or its subsidiaries. Benefits will be paid, at the participant's election, in
a lump sum or in not more than 10 annual installments. Distributions may be
made, at the participant's request, in Holdings Common Stock to the extent that
his or her account was invested in the Holdings Common Stock fund.
Participants may borrow limited amounts from certain accounts under the
Investment Savings Plan for any reason. A participant may have only one
outstanding loan at any time and such loan must be repaid within five years.
All plan loans carry a fixed rate of interest based on the prevailing
commercial interest rate, as determined from time to time by the plan's
administrative committee. All loans are repaid through automatic
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<PAGE> 19
payroll deduction. A participant who has an outstanding loan may also withdraw
his or her salary reductions in the event of a hardship (as defined in the
Investment Savings Plan).
EXECUTIVE DEFERRED COMPENSATION PLAN. The Executive Deferred Compensation
Plan, adopted by ASA in 1990, is a non-qualified plan that is intended to
provide supplemental retirement income for certain key executive employees
selected by the Compensation Committee. In connection with the Reorganization,
ASA Holdings adopted the Executive Deferred Compensation Plan as a
participating employer and agreed to be bound by the terms and conditions of
the Executive Deferred Compensation Plan. The Executive Deferred Compensation
Plan provides tax deferred contributions by the participating employers that
exceed the contribution levels permitted under the Investment Savings Plan due
to limits established in accordance with the Code with respect to highly
compensated employees. The Executive Deferred Compensation Plan is intended to
be an unfunded deferred compensation plan so that benefits thereunder will be
tax deferred. As a result, amounts deferred thereunder represent unsecured
liabilities of the participating employers (ASA Holdings and ASA) subject to
the claims of their respective creditors.
Under the Executive Deferred Compensation Plan, the participating employers
allocate to each participant's account a specified percentage of his or her
base salary for the year (15% for the Senior Executive Officers or 10% for
other key executive employee participants). Contributions to the accounts of
the persons listed in the "SUMMARY COMPENSATION TABLE" are included in the
column headed "ALL OTHER COMPENSATION."
The amount of a participant's benefit from the Executive Deferred
Compensation Plan will be equal to the participant's vested interest in the
accrued benefit percentage of the contributions and earnings allocated to his
or her account. A participant's vested interest accrues 25% after the
expiration of five years of service, 5% per year for years six through ten, and
10% per year for years eleven through fifteen. A participant's accrued benefit
percentage is equal to his or her years of service divided by the number of
years of service the participant would have had on his or her normal retirement
date under the plan (which date is the later of the participant's 65th birthday
or the completion of 15 years of service). The accrued benefit percentage
becomes 100% if the participant dies, becomes disabled or if the participant's
employment is terminated after a change in control (as defined in the plan).
Certain participants who are senior executive officers and who are designated
by the Compensation Committee will always have a 100% accrued benefit
percentage.
If a participant otherwise terminates his or her employment, he or she will
not receive benefits under the Executive Deferred Compensation Plan until the
participant reaches age 55. Benefits will be paid in a lump sum if less than
$10,000 or, at the participant's election, in the form of an annuity or in
installments over not less than 20 years. A participant's benefits are
normally distributed as a result of retirement, death, disability, a change in
control or other termination of employment.
Supplemental Executive Retirement Plan
The SERP, adopted by ASA in 1995, is a non-qualified plan that is intended
to provide individually tailored supplemental retirement income for those key
executive employees selected by the Compensation Committee ("SERP
PARTICIPANTS"). In connection with the Reorganization, ASA Holdings agreed to
assume all of ASA's obligations under the SERP (jointly and severally with ASA)
and to be a plan sponsor thereunder. Under the SERP, the amount of the
retirement income for each SERP participant is established by the Compensation
Committee and, therefore, the retirement income provided by the SERP may vary
for each SERP participant. The SERP is unfunded. Accordingly, benefits
thereunder will be taxable to the SERP participant upon their receipt (except
for Medicare and Social Security taxes that are payable annually prior to
receipt of benefits) and the participating employers (ASA Holdings and ASA)
will be entitled to an offsetting deduction for such expense during the period
in which the benefit was received. Because the SERP is unfunded,
16
<PAGE> 20
the benefits provided by the SERP represent unsecured liabilities of the
participating employers subject to the claims of their respective creditors.
Currently, the Senior Executive Officers are the only SERP participants.
The benefits for the Senior Executive Officers were designed to provide them
with a fixed minimum level of income after retirement which increases over a
10-year period to provide an incentive to continue to be employed by ASA
Holdings and its subsidiaries at least until age 65. Under the SERP, after
reaching age 55 and after retiring or terminating employment with ASA Holdings
and its subsidiaries, the Senior Executive Officers will be entitled to annual
benefits, paid on a monthly basis, of $150,000 offset by (i) 50% of the Senior
Executive Officer's annual Social Security benefits projected as of the last
day of the calendar month of the Senior Executive Officer's actual date of
retirement or termination of employment; (ii) the actuarial equivalent,
expressed as an annual benefit for the life of the Senior Executive Officer, of
100% of the vested amount in the Senior Executive Officer's Employer Matching
Account under the Investment Savings Plan as of the last day of the calendar
month containing the Senior Executive Officer's actual date of retirement or
termination; and (iii) the actuarial equivalent, expressed as an annual benefit
for the life of the Senior Executive Officer, of 100% of the Senior Executive
Officer's vested benefits under the Executive Deferred Compensation Plan as of
the last day of the calendar month containing the Senior Executive Officer's
actual date of retirement or termination of employment. For each year that the
Senior Executive Officer continues to be employed by ASA Holdings and its
subsidiaries after reaching age 55 and until the attainment of age 65, the
base amount of his benefits under the SERP is increased by an additional 6%.
As of the date of this Proxy Statement, the benefits payable to each of the
Senior Executive Officers would be $159,000 annually reduced by the applicable
amounts of their benefits under the Investment Savings Plan, the Executive
Deferred Compensation Plan and Social Security.
SUBMITTED BY THE COMPENSATION COMMITTEE
OF ASA HOLDINGS' BOARD OF DIRECTORS:
Jean A. Mori Parker H. Petit
17
<PAGE> 21
EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS
Except as described below, during fiscal 1996 none of the Executive
Officers had an employment contract with ASA Holdings, ASA or ASA Investments.
In 1990, ASA entered into Founding Officer Agreements with each of the Senior
Executive Officers pursuant to which severance compensation will be paid to
each such officer if his employment terminates within two (2) years after a
"change in control." In connection with the Reorganization, ASA Holdings
assumed ASA's obligations under the Founding Officer Agreements and the
agreements were amended to apply to a change in control with respect to ASA
Holdings. A "change in control" means ownership of more than 50% of ASA
Holdings' voting stock by any single entity or group. The severance
compensation will generally equal two times the officer's accrued compensation
for the preceding 12 months.
EXECUTIVE COMPENSATION SUMMARY
The disclosure in the tables and graphs included in this Section is set
forth in accordance with the SEC's rules regarding the disclosure of executive
compensation by publicly held corporations to their shareholders.
SUMMARY COMPENSATION TABLE
The following table summarizes the compensation paid by ASA to: (a) the
Chief Executive Officer and (b) to all of ASA's Executive Officers (other than
the CEO) whose total annual salary and bonus for the fiscal 1996 year equaled
or exceeded $100,000 and who were serving as executive officers during or at
the end of fiscal 1996. The table reflects all compensation received by each
such executive officer for services rendered in all capacities to ASA that was
paid or accrued during ASA's 1996, 1995, and 1994 fiscal years. ASA did not
offer any restricted stock, options or other Long Term Investment Plan (LTIP)
awards during fiscal 1996, 1995, or 1994, other than pursuant to the SAR Plan.
18
<PAGE> 22
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term
Compensation
----------------
Annual Compensation Awards
------------------------------------------------
Securities
Underlying All Other
Fiscal Salary Bonus SARs Compensation
Name and Principal Position Year ($) ($) (#) (1) ($)
- - ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
George F. Pickett 1996 $284,298 (2) $108,000 - $40,653(3)
Chairman of the Board and 1995 262,500 91,875 130,300 42,375
Chief Executive Officer 1994 251,200 125,600 78,600 42,303
- - ----------------------------------------------------------------------------------------------------------
John W. Beiser 1996 267,217 (2) 106,000 - 39,690(4)
President and Secretary 1995 268,646 (2) 89,710 127,200 41,448
1994 245,280 122,600 76,800 41,412
- - ----------------------------------------------------------------------------------------------------------
Ronald V. Sapp 1996 116,160 50,000 - 15,116(5)
Vice President-Finance 1995 111,720 35,000 38,800 14,172
1994 106,920 35,000 23,400 14,004
</TABLE>
(1) The data reflected in this column indicates the number of shares of
Holdings Common Stock underlying the SARs as of the date of this Proxy
Statement, which is equal to the actual number of SARs because the SARs
are valued on a one-to-one basis.
(2) At the end of fiscal 1995, ASA's Compensation Committee authorized ASA to
pay to each of Messrs. Pickett and Beiser annually additional salary to
cover his Medicare tax liability with respect to the vested portion of his
interest in the SERP. Mr. Beiser received such additional salary in both
1995 and 1996. Mr. Pickett received such additional salary in 1996.
(3) Consisting of $40,653 of contributions by ASA to the Executive Deferred
Compensation Plan.
(4) Consisting of $39,690 of contributions by ASA to the Executive Deferred
Compensation Plan.
(5) Consisting of $11,616 of contributions by ASA to the Executive Deferred
Compensation Plan and $3,500 of contributions by ASA to the Investment
Savings Plan.
19
<PAGE> 23
OPTION AND SAR GRANTS TABLE
With respect to each of the Executive Officers named in the "SUMMARY
COMPENSATION TABLE," during fiscal 1996 ASA made no individual grants of SARs
or stock options, separately or in tandem with SARs.
OPTION AND SAR EXERCISE TABLE
The following table sets forth with respect to each of the Executive
Officers named in the "SUMMARY COMPENSATION TABLE" (a) the number of shares
received upon the exercise of any SARs during the 1996 fiscal year, (b) the
aggregate dollar value realized upon the exercise of any SARs, (c) the total
number of shares of ASA Common Stock and any other securities underlying all
outstanding, unexercised SARs held at the end of the 1996 fiscal year,
separately identifying the exercisable and unexercisable SARs and (d) the
aggregate dollar value of all such unexercised SARs that are in-the-money
(i.e., when the fair market value of the underlying common stock exceeds the
grant price of any SARs) separately identifying the exercisable and
unexercisable SARs. There were no options in ASA's securities issued or
outstanding during fiscal 1996.
AGGREGATED SAR EXERCISES IN THE 1996 FISCAL YEAR
AND
FISCAL YEAR-END SAR VALUES
<TABLE>
<CAPTION>
Value of
Number of Securities Unexercised
Underlying Unexercised In-the-Money
Number of SARs at SARs at
Securities Fiscal Year-End Fiscal Year-End (1)
Underlying ----------------------------------------------
SARs Value Exercisable/ Exercisable/
Exercised Realized Unexercisable (2) Unexercisable (3)
Name (#) ($) (#) ($)
- - ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
George F. Pickett
Chairman of the Board and 210,350/ $359,412/
Chief Executive Officer - - 65,150 (4) $309,462 (5)
- - ------------------------------------------------------------------------------------------------------------
John W. Beiser 153,800/ $312,150/
President and Secretary - - 63,600 (6) $302,100 (7)
- - ------------------------------------------------------------------------------------------------------------
Ronald V. Sapp
Vice President-Finance 63,100/ $107,375/
- - 19,400 (8) $ 92,150 (9)
</TABLE>
(1) The fair market value of ASA Common Stock at the close of business on
December 31, 1996, was $21.875 per share based on the closing price per
share on The Nasdaq Stock Market's National Market system. Accordingly,
some of the SARs reported in this table as exercisable were not
in-the-money on that date and could not be exercised because the grant
price of $36.75 is greater than the assumed fair market value and,
accordingly, no appreciation would be realized. See footnotes (4), (6) and
(8).
(2) The data reflected in this column indicates the number of shares of ASA
Common Stock underlying the SARs, which is equal to the actual number of
SARs because the SARs are valued on a one-to-one basis. The value of such
shares is used to determine the overall value of the SARs on the exercise
date.
20
<PAGE> 24
(3) The data reflected in this column indicates the value of the SARs held at
fiscal year end, which is calculated by multiplying (a) the number of SAR
units by (b) the amount of appreciation in the market price of ASA Common
Stock as of the end of the last trading day of the fiscal year (as
compared to the SARs' grant price).
(4) Of the exercisable SARs, (a) 66,600 have a grant price of $21.125 and are
exercisable during the period from July 22, 1993, through January 22,
1998, (b) 78,600 have a grant price of $36.75 and are exercisable during
the period from August 2, 1994, through February 2, 1999, and (c) 65,150
have a grant price of $17.125 and are exercisable during the period from
February 2, 1996, through February 2, 2000. Of the unexercisable SARS,
65,150 have a grant price of $17.125 and are exercisable during the
period from February 2, 1997, through February 2, 2000.
(5) Consisting of the following: (a) exercisable - 9,858 shares of ASA Common
Stock and approximately $143,768 cash and (b) unexercisable - 8,488 shares
of ASA Common Stock and $123,787 cash.
(6) Of the exercisable SARs, (a) 13,400 have a grant price of $21.125 and are
exercisable during the period from July 22, 1993 through January 22, 1998,
and (b) 76,800 have a grant price of $36.75 and are exercisable during the
period from August 2, 1994, through February 2, 1999, and (c) 63,600 have
a grant price of $17.125 and are exercisable during the period from
February 2, 1996, through February 2, 2000. Of the unexercisable SARs,
63,600 have a grant price of $17.125 and are exercisable during the
period from February 2, 1997, through February 2, 2000.
(7) Consisting of the following: (a) exercisable - 8,561 shares of ASA Common
Stock and approximately $124,878 cash, and (b) unexercisable - 8,286
shares of ASA Common Stock and $120,844 cash.
(8) Of the exercisable SARs, (a) 20,300 have a grant price of $21.125 and are
exercisable during the period from July 22, 1993, through January 22,
1998, (b) 23,400 have a grant price of $36.75 and are exercisable during
the period from August 2, 1994, through February 2, 1999, and (c) 19,400
have a grant price of $17.125 and are exercisable during the period from
February 2, 1996, through February 2, 2000. Of the unexercisable SARs,
19,400 have a grant price of $17.125 and are exercisable during the
period from February 2, 1997, through February 2, 2000.
(9) Consisting of the following: (a) exercisable - 2,944 shares of ASA Common
Stock and approximately $42,975 cash, and (b) unexercisable - 2,527 shares
of ASA Common Stock and $36,872 cash.
21
<PAGE> 25
STOCK PRICE PERFORMANCE GRAPH
Set forth below is a line graph comparing the cumulative total shareholder
return on ASA's Common Stock against the cumulative total return of The Nasdaq
Stock Market (U.S. and Foreign) Index and of the Media General Airline Index
for the five year period commencing December 31, 1991 and ending December 31,
1996. The graph and table set forth below assume that $100 cash was invested
on December 31, 1991 in ASA Common Stock, the companies in The Nasdaq Stock
Market (U.S. and Foreign) Index and the companies in the Media General Airline
Index and that all dividends were reinvested. The Media General Airline Index
is an established market index which consists of the following companies (the
"PEER GROUP"): Air Canada (Class A); Air Methods Corp.; Airlease, LTD.; Airnet
Systems, Inc.; Alaska Air Group, Inc.; America West Holdings Corp.; AMR Corp.;
Amtran, Inc.; Atlantic Coast Airlines; Atlantic Southeast Airlines, Inc.;
Baltic International USA, Inc.; British Airways PLC ADR; CCAir, Inc.; CHC
Helicopter Corp. (Class A); Comair Holdings, Inc.; Continental Airlines (Class
B); Delta Air Lines, Inc.; Frontier Airlines, Inc.; Great Lakes Aviation, LTD.;
Hawaiian Airlines, Inc.; Japan Airlines, LTD.; Kitty Hawk, Inc.; KLM Royal
Dutch Airlines; Mesa Air Group, Inc.; Mesaba Holdings, Inc.; Midwest Express
Holdings; Northwest Airlines (Class A); Offshore Logistics, Inc.; Pan Am Corp.;
Petroleum Helicopter, NV; PS Group Holdings, Inc.; Reno Air, Inc.; SkyWest,
Inc.; Southwest Airlines Co.; Tower Air, Inc.; Trans World Airlines; UAL
Corp.; US Airways Group, Inc.; ValuJet, Inc.; and Western Pacific Airlines,
Inc. Returns for The Nasdaq Stock Market (U.S. and Foreign) Index and the
Media General Airline Index have been market weighted annually, at the
beginning of the year, within the group to produce returns for the group. This
data was prepared for ASA Holdings by Media General Financial Services. The
composition of the Peer Group has changed since the date of the Proxy Statement
prepared in connection with the Annual Meeting of Shareholders of ASA held on
May 22, 1996, (the "1996 PROXY STATEMENT") solely as a result of a change in
the Media General Airline Index by Media General Financial Services. ASA had
no prior knowledge of this change in the index. The Nasdaq Stock Market (U.S.
and Foreign) Index is the same index used by ASA in the 1996 Proxy Statement.
Information regarding ASA Common Stock, The Nasdaq Stock Market (U.S. and
Foreign) Index and the Media General Index are based on a calendar year.
22
<PAGE> 26
COMPARATIVE RETURN TO SHAREHOLDERS
ASA HOLDINGS, INC.
(SUCCESSOR TO ATLANTIC SOUTHEAST AIRLINES, INC.)
[PERFORMANCE GRAPH]
INDEXED RETURNS OF INITIAL $100 INVESTMENT (1)
<TABLE>
<CAPTION>
December 31,
-------------------------------------------------------------
Company/Index 1991 1992 1993 1994 1995 1996
- - ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Atlantic Southeast Airlines, Inc. (2) $100 $155.95 $246.41 $113.02 $159.07 $164.38
Media General Airline Index $100 $ 75.95 $ 93.37 $ 89.50 $115.29 $119.20
The Nasdaq Stock Market
(U.S. & Foreign) Index $100 $100.98 $121.13 $127.17 $164.96 $204.98
</TABLE>
(1) Assumes $100 invested in ASA Common Stock and in the companies in the
Media General Airlines Index and the Nasdaq Stock Market (U.S. & Foreign)
Index, all at market close on December 31, 1991.
(2) Predecessor to ASA Holdings, Inc.
COMPARATIVE ANNUAL RETURN PERCENTAGE
<TABLE>
<CAPTION>
December 31,
--------------------------------------------------------------
Company/Index 1992 1993 1994 1995 1996
- - ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Atlantic Southeast Airlines, Inc. (1) 55.95% 58.01% -54.13% 40.75% 3.34%
Media General Airline Index -24.05% 22.94% -4.14% 28.82% 3.39%
The Nasdaq Stock Market
(U.S. & Foreign) Index 0.98% 19.95% 4.99% 29.72% 24.26%
</TABLE>
(1) Predecessor to ASA Holdings, Inc.
23
<PAGE> 27
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information with respect to the
Holdings Common Stock owned beneficially as of March 27, 1997 (unless otherwise
indicated), by each Director, by each nominee for election as a Director, by
each of the Executive Officers named in the "SUMMARY COMPENSATION TABLE," by
all other executive officers as of such date, by all Executive Officers and
Directors as a group and by each person known by ASA Holdings, Inc. to be a
beneficial owner of more than 5% of the outstanding Holdings Common Stock. The
information in this table is based on information furnished by such beneficial
owners. Except as otherwise indicated below, and subject to applicable
community property laws, each owner has sole voting and sole investment powers
with respect to the Holdings Common Stock listed.
<TABLE>
<CAPTION>
Percentage of
Number of Shares Holdings Common
Name of Beneficial Owner Owned Beneficially (1) Stock Outstanding (1)
- - ---------------------------------------------------------------------------------------------------
<S> <C> <C>
Delta Air Lines Holdings, Inc. (2) 7,995,000 26.8%
FMR Corporation (3) 3,578,400 12.0%
George F. Pickett 621,591(4)(5) 2.1%
John W. Beiser 439,082(5)(6) 1.5%
Ronald V. Sapp 16,355(5) *
R. Mark Bole 0 -
Jean A. Mori 1,060(7) *
Parker H. Petit 5,000 *
Alan M. Voorhees 433,177(8) 1.5%
Ralph W. Voorhees 49,704(9) *
All Executive Officers and Directors
as a group (8 persons) 1,565,969(4)(5)(6)(7)(8)(9) 5.2%
</TABLE>
_________________
*Less than 1%.
(1) Information with respect to beneficial ownership is based upon
information furnished by each owner. As of March 27, 1997, there were
29,868,570 shares of Holdings Common Stock outstanding (excluding any
treasury stock).
(2) The address of this beneficial owner is Suite 1300, 1105 North Market
Street, Wilmington, DE 19801. Delta Air Lines Holdings, Inc. is a wholly
owned subsidiary of Delta Air Lines, Inc.
(3) The address of this beneficial owner is 82 Devonshire Street, Boston, MA
02109-3614. FMR Corporation ("FMR") disclosed the information in this
footnote to ASA Holdings. FMR disclosed that shares owned beneficially
by it included the following shares of Holdings Common Stock: (a)
2,576,000 shares (approximately 8.6%) beneficially owned by Fidelity
Management and Research Company ("FMRC") as a result of FMRC serving as
investment adviser to various investment companies registered under
Section 8 of the Investment Company Act of 1940, and serving as investment
adviser to certain other funds which are generally offered to limited
groups of investors; (b) 994,400 shares (approximately 3.3%) beneficially
owned by Fidelity Management Trust Company ("FMTC"), as a result of FMTC
serving as trustee or managing agent for various private investment
accounts, primarily employee benefit plans, and serving as investment
adviser to certain other funds which are generally offered to limited
groups of investors; and (c) 8,000 shares (less than 1%) beneficially
owned by Fidelity International Limited ("FIL") as a result of FIL
serving as investment adviser to various non-U.S.
24
<PAGE> 28
investment companies. As of April 11, 1997, FMR disclosed that the
ownership of one investment company, Fidelity Low Priced Stock Fund
amounted to 2,030,100 shares of Holdings Common Stock. As of April 11,
1997, FMR disclosed that it had sole voting power with respect to 815,300
shares of Holdings Common Stock (approximately 3.0%) and sole dispositive
power with respect to 3,570,400 shares of Holdings Common Stock
(approximately 12.0%). As of April 11, 1997, FMR disclosed that FIL had
sole voting and dispositive power with respect to all the shares it
beneficially owns.
(4) Includes 118,650 shares (less than 1%) held by the wife of George F.
Pickett, with respect to which Mr. Pickett disclaims any beneficial
ownership interest.
(5) Includes shares of Holdings Common Stock that the individual named on the
table has the right to acquire, on or before May 26, 1997 (60-days from
March 27, 1997), through the exercise of SARs granted under the SAR Plan
(see "STOCK APPRECIATION RIGHTS") as follows: George F. Picket - 21,654
shares; John W. Beiser - 19,085 shares; Ronald V. Sapp - 6,466 shares; and
all Executive Officers and Directors as a group (8 persons) - 47,205
shares. For purposes of calculating the number of shares that would be
acquired if the individual named in the table exercised all of the SARs
that could be exercised on or before May 26, 1997, the closing price per
share for the Holdings Common Stock of $22.625 on March 27, 1997, is
assumed to be the closing price on the exercise date of all such SARs,
whether or not all such SARs were in-the-money on that date (i.e., whether
or not the fair market value of the underlying common stock was greater
than the grant price of the SARs). However, some of these SARs could not
be exercised because the grant price of $36.75 is greater than the assumed
fair market value and, accordingly, no appreciation would be realized.
See notes (4), (6) and (8) to the table entitled "AGGREGATED SAR
EXERCISES IN THE 1996 FISCAL YEAR AND FISCAL YEAR-END SAR VALUES."
(6) Includes 200,000 shares (less than 1%) held by the wife of John W. Beiser,
with respect to which Mr. Beiser disclaims any beneficial ownership
interest.
(7) Includes 230 shares (less than 1%) held by the wife of Jean A. Mori, with
respect to which Mr. Mori disclaims any beneficial ownership interest.
(8) Includes 405,377 shares (1.4%) held by irrevocable trusts created for the
benefit of the adult children of Alan M. Voorhees and 25,000 shares (less
than 1%) held by his wife, with respect to all of which Mr. Alan Voorhees
disclaims any beneficial ownership interest.
(9) Includes 25,165 shares (less than 1%) held by the wife of Ralph W.
Voorhees, with respect to which Mr. Ralph Voorhees disclaims any
beneficial ownership interest.
25
<PAGE> 29
PROPOSAL TO ADOPT AND APPROVE THE 1997 NONQUALIFIED STOCK OPTION PLAN
During April 1997, ASA Holdings' Board of Directors adopted the ASA
Holdings, Inc. 1997 Nonqualified Stock Option Plan. A copy of the 1997 Plan is
attached hereto as Appendix A. ASA Holdings' Board of Directors recommends
that the Shareholders vote "FOR" the proposal to adopt and approve the 1997
Plan.
REASONS FOR ADOPTING THE PLAN
ASA Holdings' Board of Directors has determined that adoption of a
nonqualified stock option plan to replace the SAR Plan is in the best interests
of ASA Holdings and its subsidiaries and shareholders. During April 1997, the
Board of Directors adopted the 1997 Plan. All of the holders of outstanding
SARs on the date of this Proxy Statement have agreed to cancel their SARs
subject to (a) the Shareholders' approval of the proposal to adopt and approve
the 1997 Plan and (b) the issuance of replacement options pursuant to the 1997
Plan. ASA Holdings has agreed with the SAR holders to issue such options under
the 1997 Plan, subject to the Shareholders' approval of the proposal to adopt
and approve the 1997 Plan. After the exchange of all the outstanding SARs for
options and the cancellation of all such SARs, ASA Holdings' Board of Directors
plans to terminate the SAR Plan. Management does not believe that the grant of
replacement options under the 1997 Plan for all of the outstanding SARs will
have a material adverse effect on ASA Holdings, its shareholders or
participants in the SAR Plan.
ASA Holdings' Board of Directors believes that the adoption of the 1997
Plan, in conjunction with the termination of the SAR Plan, will have the
following key benefits:
- - - Generally accepted accounting principals require that a charge to earnings
be recorded to reflect a net increase in the intrinsic value of those
stock plan grants for which the terms are not fixed at the date of grant.
Under the SAR Plan, the number of shares to be issued and the amount of
cash to be paid are not fixed on the grant date. These amounts cannot be
determined until the SARs are exercised. See "STOCK APPRECIATION RIGHTS"
herein. Accordingly, each quarter ASA and ASA Holdings, as appropriate,
have recorded in their respective financial statements the effect of
changes in the market price of the underlying common stock on the
intrinsic value of outstanding SARs when the market price exceeded the
grant price of the SARs (the intrinsic value of SARs being the market
price of the underlying Holdings Common Stock less the aggregate grant
price for the SARs). The terms of the 1997 Plan generally will be fixed
at the date of a stock option grant and, accordingly, generally accepted
accounting principles will not require adjustments to earnings as the
market price of Holdings Common Stock changes.
- - - Options do not have the cash compensation expense associated with SARs.
Upon the exercise of SARs, participants are entitled to receive 60% of the
value of the SARs in Holdings Common Stock and 40% in cash. See "STOCK
APPRECIATION RIGHTS" herein. Payment of the exercise price for options
under the 1997 Plan may, if paid in cash, provide cash inflow for ASA
Holdings.
- - - Option grants today are more widely utilized than SARs as
performance-based compensation that is tied to enhanced share
performance. An option plan will enhance the ability of ASA Holdings and
its subsidiaries to attract, retain and motivate officers and key
employees and to provide to such persons incentives and rewards for
superior performance.
EFFECT ON EARNINGS. Due to increases in the price of ASA Common Stock, in
1996, 1995, 1993, 1992 and 1991, SARs increased ASA's pre-tax expense by
$729,000, $2,416,000, $11,662,000, $4,041,000 and
26
<PAGE> 30
$4,532,000, respectively. In 1994, ASA reversed previously accrued expenses
associated with SARs (resulting in a credit to pre-tax expense of
approximately $4,198,000) due to a decline in the price of ASA Common Stock.
Such adjustments would not be required with respect to options issued under the
1997 Plan.
ELIMINATION OF CASH OUTFLOW. In connection with the exercise of all SARs
granted to date, in 1995, 1994, 1993, 1992 and 1991, ASA made cash payments of
approximately $434,000, $522,000, $3,607,000, $1,180,000, and $1,106,000,
respectively, and issued 22,963, 23,935, 160,014, 105,768 and 106,878 shares of
ASA Common Stock, respectively. Under the 1997 Plan, ASA Holdings would not be
required to make such cash payments. ASA Holdings will continue to receive a
tax deduction for the intrinsic value of options under the 1997 Plan on the
date of exercise, which deduction will be in the amount of the market price of
the shares underlying the option on the exercise date less the exercise price
of the option.
PERFORMANCE BASED COMPENSATION. ASA Holdings' Board believes that is
important to maintain for the benefit of its officers and key employees
performance based employee benefit plans that provide a stake in ASA Holdings'
financial performance. The Board approved the reservation of 2,500,000 shares
of Holdings Common Stock to be issued with respect to options to be granted
pursuant to the 1997 Plan.
ASA Holdings' management anticipates that options with respect to
1,194,500 of these shares will have to be issued to replace the 1,194,500 SARs
that are to be exchanged for options and canceled to effect the termination of
the SAR Plan. By issuing these options, ASA Holdings' cancellation of the SAR
Plan will not deprive the SAR holders of any future appreciation that would have
been available to them had they retained their SARs for all or a portion of the
remaining term of the SARs. The options to be issued in exchange for the SARs
will be exercisable at the same price and over the same period as the SARs that
they will replace.
The remaining shares available for issuance pursuant to options granted
under the 1997 Plan (approximately 1,305,500 shares) will be granted to
officers and key employees as new performance based compensation in future
years at an exercise price equal to the fair market value of Holdings Common
Stock on the grant date. If the 1997 Plan is adopted, when the SAR Plan is
canceled ASA Holdings will no longer have available to it the 427,003 shares of
Holdings Common Stock that are currently available under the SAR Plan for new
performance based compensation.
PURPOSES OF THE PLAN
The purposes of the 1997 Plan are to advance the interests of ASA Holdings
and its subsidiaries and to enhance the ability of ASA Holdings and its
subsidiaries to attract, retain and motivate officers and key employees and to
provide to such persons incentives and rewards for superior performance.
PLAN PARTICIPANTS
Options under the 1997 Plan may be granted only to officers or key
employees of ASA Holdings or any of its subsidiaries, or any person who has
agreed to commence serving in any such capacity within 90 days after the date
of grant of an option under the 1997 Plan.
The committee that administers the 1997 Plan (the "COMMITTEE") at the
direction of the Board of Directors will determine the officers and key
employees who are to receive options under the 1997 Plan (collectively
"OPTIONEES" and individually an "OPTIONEE"). As of the date of this Proxy
Statement, it is anticipated that the Compensation Committee will administer
the 1997 Plan.
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<PAGE> 31
TERMS OF OPTIONS
The 1997 Plan Committee, in its sole discretion (subject to the terms of
the 1997 Plan), will determine the number of shares of Holdings Common Stock
that are subject to each option to be granted under the 1997 Plan (collectively
"OPTIONS" and individually an "OPTION") and the exercise price (the "EXERCISE
PRICE") for each share of Holdings Common Stock to be issued upon the exercise
of each Option. Each Optionee will enter into an option agreement with ASA
Holdings specifying the terms of his or her Option (an "OPTION AGREEMENT").
Each Option may be exercised for all or a part of the shares of Holdings
Common Stock that are subject to the Option ("OPTION SHARES"). The Committee
will determine, in its discretion (subject to the terms of the 1997 Plan), (a)
the dates on which the Options (i) will be granted (the "GRANT DATE"), (ii)
will be exercisable, either in whole or in part (the "EXERCISE DATE"), and
(iii) will cease to be exercisable (the "EXPIRATION DATE"), and (b) other
conditions to which the Options will be subject. Such dates and conditions
will be set forth in each Option Agreement. The 1997 Plan provides the
Expiration Date shall be no later than 10 years after the Grant Date. If any
part of the Option has not been exercised before the Expiration Date, the
unexercised portion will immediately become null and void and no longer of any
force and effect. No Option will be granted under the 1997 Plan until the 1997
Plan is approved and adopted by the Shareholders at the 1997 Annual Meeting.
Shareholder approval is required pursuant to the corporate governance criteria
of The Nasdaq Stock Market.
The Exercise Price will be set forth in each Option Agreement. With the
sole exception of an exchange of SARs held under the SAR Plan for an Option
under the 1997 Plan pursuant to the 1997 Plan, in no event shall the Exercise
Price be less than the Fair Market Value (as defined below) of the Holdings
Common Stock on the Grant Date. For purposes of the 1997 Plan, "FAIR MARKET
VALUE" of a share of Holdings Common Stock on a given date means the closing
price of a share of Holdings Common Stock on the given date (or the most recent
trading date if the given date is not a trading date) on The Nasdaq Stock
Market's National Market, or such national exchange, if any, as may be
designated by ASA Holdings' Board of Directors.
SHARES AVAILABLE UNDER THE 1997 PLAN
The maximum number of shares of Holdings Common Stock that may be issued
upon the exercise of Options granted under the Plan is 2,500,000, subject to
adjustment as described below. Such shares may be shares of original issuance
or treasury shares or any combination of the foregoing.
As of March 27, 1997, no options to purchase shares had been granted under
the 1997 Plan.
Any shares of Holdings Common Stock which are subject to Options that
expire or that have been surrendered, canceled or terminated without being
exercised in full shall again be available for issuance under the 1997 Plan.
Any shares of Holdings Common Stock surrendered to ASA Holdings by an Optionee
as payment of the Exercise Price upon the exercise of an Option may not be the
subject of a subsequent Option. For purposes of calculating the maximum number
of shares of Holdings Common Stock that may be issued under the 1997 Plan: (a)
all the shares issued will be counted when cash, immediately available funds or
a check is used as full payment for shares issued upon exercise of an Option;
and (b) only the net shares issued will be counted when shares of Holdings
Common Stock are used as full or partial payment for shares issued upon
exercise of an Option.
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<PAGE> 32
The maximum number of Option Shares that are subject to Options which may
be granted to any Optionee in any one year is the sum of (i) 200,000 shares,
plus (ii) a number of shares of Holdings Common Stock which are the subject of
Options that are exchanged for stock appreciation rights pursuant to the 1997
Plan during such year. The terms and conditions of the grant of Options under
the Plan need not be the same or identical with respect to each Optionee or
with respect to each Option, but shall comply with certain specified terms and
conditions in the 1997 Plan.
The Committee may make or provide for such adjustments (a) in the maximum
number of shares of Holdings Common Stock specified in the 1997 Plan, (b) in
the number of shares of Holdings Common Stock covered by outstanding Options
granted under the 1997 Plan, or (c) in the Exercise Price applicable to such
Options as the Committee, in its sole discretion, may determine is equitably
required to prevent dilution or enlargement of the rights of Optionees that
otherwise would result from any stock dividend, stock split, combination of
shares, recapitalization or other change in the capital structure of ASA
Holdings, or from any merger, consolidation, spin-off, reorganization, partial
or complete liquidation, issuance of rights or warrants to purchase securities
or any other corporate transaction or other event having an effect similar to
any of the foregoing.
EXCHANGE OF STOCK APPRECIATION RIGHTS FOR OPTIONS
The 1997 Plan provides that any holder of SARs under the SAR Plan (an "SAR
HOLDER") may exchange such SARs for an Option under the 1997 Plan in accordance
with the procedures outlined in the 1997 Plan and such other conditions and
procedures as may be required by the Committee. Each SAR will be exchanged on
a one-for-one basis for an Option to purchase one share of Holdings Common
Stock under the 1997 Plan. The Expiration Date of an Option granted pursuant
to an exchange of SARs will be the same date as the date that is five years
after the date the exchanged SARs were originally granted pursuant to the
applicable Agreement (which date is the date on which the SARs would otherwise
be automatically exercised). The Exercise Price of an Option issued in
exchange for an SAR will be the same as the grant price of the exchanged SAR.
RELOAD OPTION RIGHTS
The Committee will have the authority, in its discretion, to award reload
option rights ("RELOAD OPTION RIGHTS") in conjunction with the grant of
Options. Reload Option Rights must be awarded at the time an Option is
granted. Reload Option Rights awarded with respect to an Option entitle the
Optionee exercising the Option, upon exercise of the Option in whole or in part
through delivery of shares of Holdings Common Stock, automatically to be
granted on the date of such exercise an additional Option (a "RELOAD OPTION")
(a) for that number of shares of Holdings Common Stock equal to the number of
shares used by the Optionee to exercise the underlying Option, (b) having an
Exercise Price not less than 100% of the Fair Market Value of the Holdings
Common Stock covered by the Reload Option on the Grant Date of such Reload
Option, (c) having an Expiration Date not later than the Expiration Date of the
Option being exercised and (d) otherwise having terms permissible for the grant
of an Option under the 1997 Plan. The grant of a Reload Option will be
effected only upon the exercise of underlying Options through the use of shares
of Holdings Common Stock held by the Optionee for at least six (6) months. In
addition, each Reload Option will be fully exercisable six months from the
Grant Date of the Reload Option. Reload Options Rights and Reload Options will
have such additional terms and be subject to such additional restrictions and
conditions, if any, as shall be determined, in its discretion, by the
Committee. No Reload Option may provide for the grant, when exercised, of
subsequent Reload Options. Each Option Agreement will state whether the
Committee has authorized Reload Options with respect to the underlying Options.
For all purposes of this Proxy Statement, references to "Options" shall include
Reload Options.
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<PAGE> 33
EFFECT OF TERMINATION OF EMPLOYMENT, DEATH OR DISABILITY
If an Optionee ceases to be employed by ASA Holdings or its subsidiaries
for any reason other than his or her death, a material disability or retirement
with the consent of the Optionee's employer, all unexercised Options will
terminate and become null and void and no longer of any force or effect four
(4) months following such termination, except that no Option will be
exercisable after the Expiration Date.
If the termination is due to a material disability or retirement with the
consent of the Optionee's employer, such disabled or retiring Optionee will
have the right to exercise his or her unexercised Options at any time within
twelve (12) months after such termination, except that no Option shall be
exercisable after the Expiration Date.
If an Optionee shall die while employed by ASA Holdings or its subsidiaries
or within a period of three months after the termination of his or her
employment as a result of a material disability or retirement with the consent
of the employer, all as determined pursuant to the 1997 Plan, the Optionee's
Options may be exercised in whole or in part at any time within twelve (12)
months after the Optionee's death, by the executor or administrators of the
Optionee's estate or by any person or persons who shall have acquired the
Options directly from the Optionee by bequest or inheritance, except that no
Option shall be exercisable after the Expiration Date.
If the Committee reasonably believes that an Optionee has committed an "act
of misconduct," the Committee may suspend the Optionee's rights to exercise any
option pending a determination by the Committee. For such purposes an "act of
misconduct" means (a) the commission of an act of embezzlement, fraud,
dishonesty, (b) nonpayment of any obligation owed to the Optionee's employer,
(c) breach of fiduciary duty or deliberate disregard of an Optionee's
employer's rules resulting in loss, damage or injury to ASA Holdings or its
subsidiaries, (d) unauthorized disclosure of any trade secret or confidential
information, or (e) engaging in any conduct constituting unfair competition.
If the Committee determines that an Optionee has committed an "act of
misconduct," neither the Optionee nor his or her estate or heirs shall be
entitled to exercise any Option whatsoever. In making such determination, the
Committee shall give the Optionee an opportunity to appear and present evidence
on his or her behalf at a hearing before the Committee.
Unless otherwise determined by the Committee, in its discretion, in
connection with the issuance of the underlying Option, Reload Option Rights
shall entitle the Optionee to be granted Reload Options only if the underlying
Option to which they relate is exercised by the Optionee during employment with
ASA Holdings or any of its subsidiaries.
EXERCISE OF OPTIONS
An Option or any portion thereof may be exercised by the Optionee by paying
the Exercise Price in cash or other immediately available funds or by check
acceptable to ASA Holdings and by (a) giving written notice of the exercise to
ASA Holdings and (b) making such other representations and agreements as may be
required by ASA Holdings to comply with applicable securities laws. ASA
Holdings shall have the right to require any individual entitled to receive
Option Shares to remit to ASA Holdings, prior to the delivery of any
certificates evidencing such Option Shares, any amount sufficient to satisfy
any federal, state, or local tax withholding requirements. Each Option
Agreement may also provide, at the discretion of the Committee, that the
Exercise Price may be payable (i) by the delivery or deemed delivery (based on
an attestation to the ownership thereof) to ASA Holdings of shares of Holdings
Common Stock already owned by the Optionee that have been owned for a period of
not less than six (6) months and that have an aggregate Fair Market Value on
the date of exercise equal to the aggregate Exercise Price, (ii) by a
broker-assisted exercise pursuant to procedures the Committee
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<PAGE> 34
may, in its sole discretion, establish from time to time, or (iii) by a
combination of some or all of such methods of payment. The 1997 Plan provides
that ASA Holdings shall not lend any monies to any Optionee for the purchase of
any Option Shares.
OTHER TERMS OF THE 1997 PLAN
ASA Holdings' Board of Directors may alter, amend, suspend or terminate the
1997 Plan in whole or in part; provided, however, that amendments shall be
subject to (a) the approval of a majority of the shares of ASA Holdings' voting
common stock entitled to vote if the Committee determines that such approval is
necessary in order for ASA Holdings' to rely on the exemptive relief provided
under Rule 16b-3 or Code Section 162(m) and (b) all other approvals which are
required by law, whether regulatory, stockholder or otherwise. No amendment or
termination or modification of the 1997 Plan shall in any manner affect any
Option granted prior to the date of the amendment without the consent of the
Optionee, except that the Committee may amend or modify the 1997 Plan in a
manner that (a) does affect Options granted prior to the date of the amendment
if the Committee determines that such amendment or modification is necessary to
retain the benefits of Rule 16b-3 or Code Section 162(m), or (b) does not
adversely affect the rights of the Optionee holding the Option.
No rights granted under the 1997 Plan are transferrable by an Optionee in
any manner other than by will or the intestacy laws of descent and
distribution. Options shall be exercisable during an Optionee's lifetime only
by the Optionee, or, in the event of the Optionee's death or material
disability, only by the Optionee or the Optionee's heirs or legal
representative.
It is anticipated that the shares of Holdings Common Stock to be delivered
to an Optionee upon the exercise of an Option will be issued by ASA Holdings
from authorized but unissued shares. However, ASA Holdings may deliver
treasury shares to an Optionee. Any treasury shares to be issued to an
Optionee will most likely have been purchased on the open market. In the case
of any purchase not made on the open market, no fee, commission or other charge
will be payable. The proceeds received by ASA Holdings from the issuance of
Holdings Common Stock pursuant to an Option will be used for general corporate
purposes.
The 1997 Plan is not subject to any provisions of the Employee Retirement
Income Security Act of 1974, as amended, and is not qualified under Section 401
of the Code. It is intended that the 1997 Plan shall not constitute an
incentive stock option plan within the meaning of Section 422 of the Code;
rather, the 1997 Plan is intended to constitute a nonqualified stock option
plan.
The Committee is granted certain authority pursuant to the 1997 Plan to act
on behalf of ASA Holdings to administer grants of Options and the exercise of
Options outstanding under the 1997 Plan and related matters. The Committee,
with respect to their administration of the Option Agreement, will act as
managers and not as trustees.
FEDERAL INCOME TAX EFFECTS
The following summary generally describes the principal federal income tax
consequences of participating in the 1997 Plan. The summary is general in
nature and is not intended to cover all tax consequences that may apply to any
particular Optionee or to ASA Holdings or any of its subsidiaries. The Code,
treasury regulations promulgated thereunder and current administrative rulings
and court decisions relating to these matters are complicated and their impact
in any one case may depend upon the particular circumstances. This summary is
based on the Code, existing and proposed treasury regulations thereunder and
current administrative rulings and court decisions as in effect on the date of
this Proxy Statement, all of which are subject to change and any such
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<PAGE> 35
change could affect the continuing validity of the following paragraphs. This
summary does not address any state, local or foreign tax laws. Each
participant in the 1997 Plan has been advised to consult his or her own
accountant, legal counsel or other tax advisor regarding the specific tax
consequences of participation in the 1997 Plan by that participant, including
the application and effect of state, local and foreign tax laws.
An Optionee will recognize taxable income upon the exercise of an Option to
the extent that the Fair Market Value of the Option Shares on the date of
exercise exceeds the Exercise Price. The Optionee will recognize income
taxable at ordinary income tax rates to the extent the value of the Holdings
Common Stock on the Exercise Date exceeds the Exercise Price, and ASA Holdings
or a subsidiary, as appropriate, will receive a corresponding deduction. If
the shares of Holdings Common Stock are subsequently sold, any additional gain
or loss realized on the sale (the difference between the sale price and the
value of the Holdings Common Stock on the date of exercise) will be capital
gain or loss if the shares are capital assets in the hands of the Optionee, and
will be long-term capital gain or loss if such shares were held by the Optionee
for more than one year. In general, the federal income tax rates applicable to
long-term capital gains and ordinary income (including short-term capital
gains) of taxpayers who are individuals may differ, while for corporations
capital gains and ordinary income are generally taxed at the same rate. The
deductibility of capital losses is subject to limitations for both individuals
and corporations.
NEW PLAN BENEFITS TABLE
The SEC's rules addressing disclosure of proposals to adopt new employee
benefit plans in proxy statements generally require ASA Holdings to include in
this Proxy Statement information regarding grants that have been made under the
plan that are subject to shareholder approval of the plan. No options had been
granted under the 1997 Plan as of March 27, 1997, and none will be granted
until after the 1997 Annual Meeting. However, all of the holders of
outstanding SARs have agreed to cancel their SARs subject to (a) the
Shareholders' approval of the proposal to adopt and approve the 1997 Plan and
(b) the issuance of replacement Options pursuant to the 1997 Plan in exchange
for SARs to be canceled. ASA Holdings has agreed to issue such options under
the 1997 Plan, subject to the Shareholders' approval of the proposal to adopt
and approve the 1997 Plan. After the cancellation of all the outstanding SARs,
ASA Holdings' Board of Directors plans to terminate the SAR Plan.
Because ASA Holdings is committed to issue Options under the 1997 Plan if
the Shareholders' approve the proposal to adopt and approve the 1997 Plan, the
Options reflected in the table set forth below are the Options that are
anticipated to be issued to the SAR holders to replace canceled SARs upon the
proposed termination of the SAR Plan. For purposes of estimating the dollar
value of these Options, the fair market value of Holdings Common Stock on March
27, 1997, $22.625 per share, was assumed to be the Fair Market Value on the
proposed Grant Date of the Options. In the instances where the SARs that the
Options are intended to replace were not in-the-money (i.e., when the fair
market value of the underlying common stock is less than the grant price of the
SARs) on March 27, 1997, there would be no intrinsic value in the Options on
the Grant Date because the Options would be granted at a price that is greater
than the Fair Market Value of Holdings Common Stock. The table set forth below
summarizes, as of March 27, 1997, for each of the following individuals and
groups of individuals, the number of shares of Holdings Common Stock underlying
such proposed Options and the dollar value thereof: (a) ASA Holdings' Chief
Executive Officer, (b) the other Executive Officers named in the "SUMMARY
COMPENSATION TABLE," (c) all current Executive Officers of ASA Holdings as a
group (4 persons), (d) all current directors who are not Executive Officers as
a group (4 persons), (e) each other person who received or is to receive 5% of
such options (0 persons), and (f) all employees, including all current
officers, who are not Executive Officers, as a group (approximately 2,452
persons).
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<PAGE> 36
NEW PLAN BENEFITS
ASA HOLDINGS, INC. 1997 NONQUALIFIED STOCK OPTION PLAN
<TABLE>
<CAPTION>
- - --------------------------------------------------------------------------------------------------------------
Estimated Number Estimated
Grant Price of Units Dollar Value
Name and Position or Group ($) (#) ($)(1)
- - --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
George F. Pickett, Chairman of the Board and $21.125 66,600 $ 99,900
Chief Executive Officer $36.750 78,600 $ 0
$17.125 130,300 $ 716,650
$22.375 132,900 $ 33,225
- - --------------------------------------------------------------------------------------------------------------
John W. Beiser, President and Secretary $21.125 13,400 $ 20,100
$36.750 76,800 $ 0
$17.125 127,200 $ 699,600
$22.375 129,700 $ 32,425
- - --------------------------------------------------------------------------------------------------------------
Ronald V. Sapp, Vice President-Finance $21.125 20,300 $ 30,450
and Chief Financial Officer $36.750 23,400 $ 0
$17.125 38,800 $ 213,400
$22.375 42,000 $ 10,500
- - --------------------------------------------------------------------------------------------------------------
R. Mark Bole, Assistant Vice President-Treasurer $22.375 24,100 $ 6,025
- - --------------------------------------------------------------------------------------------------------------
William H. Hinson, Vice President-Technical Services $36.750 17,800 $ 0
$17.125 29,600 $ 162,800
$22.375 14,700 $ 3,675
- - --------------------------------------------------------------------------------------------------------------
Tilden M. Shanahan, Vice President-Flight Operations $36.750 19,900 $ 0
$17.125 33,000 $ 181,500
$22.375 34,000 $ 8,500
- - --------------------------------------------------------------------------------------------------------------
Renee H. Skinner, Assistant Vice President-Controller $17.125 20,300 $ 111,650
$22.375 20,900 $ 5,225
- - --------------------------------------------------------------------------------------------------------------
Samuel J. Watts, Vice President-Customer Services $21.125 33,400 $ 50,100
$36.750 19,200 $ 0
$17.125 31,800 $ 174,900
$22.375 15,800 $ 3,950
- - --------------------------------------------------------------------------------------------------------------
Executive Officer Group (4 persons) 904,100 $1,862,275
- - --------------------------------------------------------------------------------------------------------------
Non-Executive Director Group (4 persons) - (1) -
- - --------------------------------------------------------------------------------------------------------------
Other Persons Receiving 5% of the Options - (1) -
- - --------------------------------------------------------------------------------------------------------------
Non-Executive Officer Employee Group (approximately
2,452 persons) 290,400 (2) $ 702,300
- - --------------------------------------------------------------------------------------------------------------
</TABLE>
(1) No options will be granted to this group under the 1997 Plan to replace
SARs.
(2) Options will be granted to only four persons in this group to replace SARs.
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<PAGE> 37
APPROVAL OF THE PLAN
With respect to the proposal to adopt and approve the 1997 Plan, if a
quorum is present, a proposal will pass if the votes cast favoring the action
exceed the votes cast opposing the action. For purposes of this vote, as of
the Record Date ASA Holdings' Directors and Executive Officers as a group (8
persons) beneficially owned 1,518,764 shares of Holdings Common Stock
(approximately 5.1%). See "SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN
BENEFICIAL OWNERS."
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
ASA leases reservation equipment and certain terminal facilities from
Delta and Delta provides certain services to ASA, including reservation and
ground handling services at certain stations. Expenses paid under the joint
marketing agreement during the 1996 fiscal year were approximately $11,833,000.
In addition, at December 31, 1996, Delta owed ASA approximately $121,000 for
various services performed by ASA for Delta, and ASA owed Delta approximately
$1,747,000 for various services performed by Delta for ASA, as described above.
During 1996, approximately 80% of ASA's passengers connected with or from Delta
flights at ASA's Atlanta, Georgia and Dallas/Fort Worth, Texas hubs. Edward H.
West, a member of ASA Holdings' Board of Directors and a member of its Audit
Committee until March 27, 1997, is Delta's Controller. Mr. West served on
ASA's Board during fiscal 1996 as a designated nominee of Delta. See "ELECTION
OF DIRECTORS," As of March 27, 1997, Delta (through its wholly owned subsidiary
Delta Air Lines Holdings, Inc.) beneficially owned approximately 26.8% of the
outstanding Holdings Common Stock. See "SECURITY OWNERSHIP OF MANAGEMENT AND
CERTAIN BENEFICIAL OWNERS,"
During fiscal 1996, ASA entered into certain other transactions with
companies that have business relationships with certain of its Directors and
Executive Officers, which relationships and transactions are described above
under the caption "COMPENSATION COMMITTEE INTERLOCKS AND ADDITIONAL INFORMATION
WITH RESPECT TO COMPENSATION DECISIONS."
RELATIONSHIP WITH INDEPENDENT AUDITORS
ASA Holdings' Board of Directors has selected Ernst & Young LLP as the
independent auditors for ASA Holdings and its subsidiaries for the fiscal year
ending December 31, 1997. Ernst & Young LLP served as the independent auditors
for ASA and its subsidiary from 1984 until the consummation of the
Reorganization. Representatives of Ernst & Young LLP are expected to be
present at the 1997 Annual Meeting with the opportunity to make a statement if
they desire to do so and to respond to appropriate questions.
OTHER MATTERS
SHAREHOLDERS' PROPOSALS FOR 1998 ANNUAL MEETING
ASA Holdings plans to hold its 1998 Annual Meeting of Shareholders during
the month of May. Any proposal of a shareholder intended to be presented at
the 1998 Annual Meeting of Shareholders must be received by the corporate
Secretary of ASA Holdings for inclusion in the Proxy Statement and proxy card
for that meeting no later than December 18, 1997. Such proposals must be
received by ASA Holdings' corporate Secretary at ASA Holdings' principal
executive office, the address of which is set forth on page 1 of this Proxy
Statement, and must meet the requirements of the regulations promulgated by
the SEC to be eligible for inclusion in ASA Holdings' 1998 proxy materials.
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<PAGE> 38
ACTION ON OTHER MATTERS AT THE 1997 ANNUAL MEETING
At this time, ASA Holdings does not know of any other matters to be
presented for action at the 1997 Annual Meeting other than those mentioned in
the Notice of Annual Meeting of Shareholders and referred to in this Proxy
Statement. If any other matter comes before the 1997 Annual Meeting, it is
intended that the proxies will be voted in respect thereof in accordance with
the judgment of the persons voting the proxies.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Pursuant to Section 16(a) of the Securities Exchange Act of 1934, as
amended (the "EXCHANGE ACT"), ASA Holdings is required to identify any person
who, at any time during fiscal 1996, was a director of ASA, an executive
officer of ASA or its subsidiary or a beneficial owner of more than 10% of ASA
Common Stock or any other person who was subject to Section 16 of the Exchange
Act with respect to ASA ("REPORTING PERSONS") that during fiscal 1996 failed to
file on a timely basis with the SEC any report required by Section 16(a) of the
Exchange Act, which are Form 3 (an initial report of beneficial ownership of
ASA Common Stock) or on Form 4 or Form 5 (relating to changes in beneficial
ownership of ASA Common Stock). Based solely on a review of such Forms 3, 4
and 5, and amendments thereto furnished to ASA Holdings and ASA by the
Reporting Persons known to it, as required by Rule 16a-3(e), except as set
forth below, no Reporting Person that was required during fiscal 1996 to comply
with Section 16(a) of the Exchange Act failed to comply with such requirements.
A Form 4 report filed by Alan M. Voorhees with respect to three transactions
that were effected during one day in November 1996 was inadvertently filed
after its due date. A Form 5 report filed by Ralph W. Voorhees with respect to
two gift transactions that were effected during one day in December 1996 was
inadvertently filed after its due date.
INCORPORATION OF PROXY STATEMENT BY REFERENCE
Notwithstanding anything to the contrary set forth in any reports,
statements or other filings made by ASA or ASA Holdings with the SEC under the
Securities Act of 1933, as amended, or the Exchange Act or any related
prospectus, that incorporate by reference, in whole or in part, subsequent
filings with the SEC, including, without limitation, this Proxy Statement, the
Compensation Committee Report set forth on pages 11 through 17 of this Proxy
Statement and the "STOCK PRICE PERFORMANCE GRAPH" and related data set forth on
pages 22 and 23 of this Proxy Statement, shall not be deemed to be incorporated
by reference into any such filings.
SHAREHOLDERS ARE URGED TO DATE, SIGN AND RETURN PROMPTLY THE ENCLOSED PROXY
CARD IN THE ACCOMPANYING ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE
UNITED STATES. YOUR COOPERATION WILL BE APPRECIATED. YOUR PROXY WILL BE
VOTED, WITH RESPECT TO THE MATTERS IDENTIFIED ON THE PROXY CARD, IN ACCORDANCE
WITH ANY SPECIFICATIONS ON THE PROXY CARD.
BY ORDER OF THE BOARD OF DIRECTORS,
JOHN W. BEISER
Secretary
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<PAGE> 39
APPENDIX A
ASA HOLDINGS, INC.
1997 NONQUALIFIED STOCK OPTION PLAN
Attached hereto is the ASA Holdings, Inc. 1997 Nonqualified Stock Option Plan
(pages A-2 through A-8).
A-1
<PAGE> 40
ASA HOLDINGS, INC.
1997 NONQUALIFIED STOCK OPTION PLAN
1. Purpose. The purpose of the ASA Holdings, Inc. 1997 Nonqualified
Stock Option Plan (the "PLAN") is to (i) advance the interests of ASA Holdings,
Inc. a Georgia corporation ("ASA HOLDINGS"), and its Subsidiaries, and (ii)
enhance the Company's ability to attract, retain and motivate officers and key
employees of the Company by providing to such persons incentives and rewards
for performance. The stock options granted pursuant to this Plan are
non-qualified stock options and shall not be incentive stock options, as
defined in Code Section 422.
2. Definitions: As used in the Plan, the following terms have the
following meanings:
(a) "AGREEMENT" shall have the meaning set forth in Paragraph 5 of the
Plan.
(b) "AWARD" means an Option.
(c) "BOARD" means the Board of Directors of ASA Holdings.
(d) "CODE" means the Internal Revenue Code of 1986, as amended.
(e) "COMMITTEE" means a committee of the Board consisting of at least
two directors selected by the Board and meeting the requirements of Paragraph
3(a) of the Plan.
(f) "COMMON STOCK" means shares of Common Stock, $.10 par value per
share, of ASA Holdings.
(g) "COMPANY" means ASA Holdings and its Subsidiaries.
(h) "DATE OF GRANT" means the date specified by the Committee on which
an Award shall become effective, which date shall be the date concurrently with
or a date following the date of the Committee action approving the Option
grant.
(i) "EFFECTIVE DATE" means the date of the approval of the Plan by the
affirmative vote of the holders of a majority of the outstanding shares of the
Common Stock present, in person or by proxy at a meeting of the shareholders of
ASA Holdings.
(j) "EXERCISE PRICE" means the purchase price per share of Common Stock
payable on exercise of an Option, as set forth in the applicable Agreement.
(k) "EXPIRATION DATE" means the date established by the Committee and
set forth in an Agreement as the date after which the Options described in the
Agreement that have not previously been exercised shall terminate, become null
and void and no longer be of any force and effect.
(l) "FAIR MARKET VALUE" of a share of Common Stock on a given date
means the closing price of a share of Common Stock on such date (or the most
recent trading date prior thereto if such date is not
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a trading date) on the Nasdaq/National Market of The Nasdaq Stock Market, or
such national exchange, if any, as may be designated by the Board.
(m) "OPTION" means the right to purchase one or more shares of Common
Stock upon exercise of a nonqualified stock option granted pursuant to the
Plan. Except as otherwise specifically provided herein or required by the
context, the term Option as used in this Plan shall include Reload Options
granted hereunder.
(n) "OPTION SHARES" means the shares of Common Stock purchased pursuant
to the exercise of Options.
(o) "PARTICIPANT" means a person to whom an Award has been made by the
Committee.
(p) "RELOAD OPTION RIGHTS" and "RELOAD OPTIONS" shall have the meaning
set forth in Paragraph 7 of the Plan.
(q) "RULE 16B-3" means Rule 16b-3 under the Securities Exchange Act of
1934, as amended, and the rules and regulations thereunder.
(r) "SAR PLAN" means the ASA Holdings, Inc. Stock Appreciation Rights
Plan. The terms "AWARD AGREEMENT" and "GRANT PRICE" shall have the meanings
ascribed to such terms in the SAR Plan.
(s) "SUBSIDIARY" means any corporation (other than ASA Holdings) in an
unbroken chain of corporations beginning with ASA Holdings where each of the
corporations in the unbroken chain other than the last corporation owns stock
possessing fifty percent (50%) or more of the total combined voting power of
all classes of stock in one of the other corporations in such chain.
(t) "TERM OF THE PLAN" means the period from the Effective Date
through and including the 31st day of March, 2007, except that Reload Options
may be granted pursuant to Reload Option Rights then outstanding.
(u) "TERM OF THE OPTION" means the period commencing with the Date of
Grant through the date which is one day prior to the Expiration Date.
3. Administration of the Plan.
(a) The Plan shall be administered, and Awards shall be granted
hereunder, by the Committee. Each member of the Committee shall be a member of
the Board who satisfies the requirements of Rule 16b-3 and of Section 162(m) of
the Code. A majority of the Committee shall constitute a quorum, and the
actions of the members of the Committee present at any meeting at which a
quorum is present, or acts unanimously approved in writing, shall be the acts
of the Committee. In the event that the Committee consists of two directors, a
"majority" shall mean two.
(b) The interpretation and construction by the Committee of any
provision of the Plan or of any Agreement, and any determination by the
Committee pursuant to any provision of the Plan or of any Agreement shall be
final and conclusive. No member of the Committee shall be liable for any such
action or determination made in good faith.
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4. Shares Available Under the Plan. The maximum number of shares of
Common Stock which may be issued upon the exercise of Options granted under the
Plan is 2,500,000. ASA Holdings shall reserve 2,500,000 shares of Common
Stock for Options granted under the Plan, subject to adjustment as provided in
Paragraph 9. Such shares may be shares of original issuance or treasury shares
or any combination of the foregoing. Any shares of Common Stock which are
subject to Options which expire or which have been surrendered, canceled or
terminated without being exercised in full shall again be available for
issuance under this Plan. Any shares of Common Stock surrendered to ASA
Holdings by the Participant as payment of the Exercise Price upon the exercise
of an Option may not be the subject of a subsequent Option. For purposes of
calculating the maximum number of shares of Common Stock which may be issued
under the Plan: (a) all the shares issued shall be counted when cash,
immediately available funds or a check is used as full payment for shares
issued upon exercise of an Option; and (b) only the net shares issued shall be
counted when shares of Common Stock are used as full or partial payment for
shares issued upon exercise of an Option.
5. Grant, Terms and Conditions of Options. The terms and conditions of
the grant of each Option shall be embodied in a written agreement (the
"AGREEMENT"), in a form approved by the Committee which shall contain terms and
conditions not inconsistent with the Plan, and which shall incorporate the Plan
by reference. Options may be granted at any time and from time to time during
the Term of the Plan to a person who at the time of the Award is an officer or
key employee of the Company, or has agreed to commence serving in such capacity
within ninety (90) days after the Date of Grant. The maximum number of shares
of Common Stock which are the subject of Options which may be granted to any
Participant in any one year is the sum of (i) 200,000 shares, plus (ii) a
number of shares of Common Stock which are the subject of Options that are
exchanged for stock appreciation rights pursuant to Paragraph 6 of the Plan
during such year. The terms and conditions of the grant of Options under the
Plan need not be the same or identical with respect to each optionee or with
respect to each Option, but shall comply with the following terms and
conditions:
(a) Each Agreement shall specify the number of shares of Common Stock
for which Options have been granted.
(b) Each Agreement shall specify the Exercise Price. With the sole
exception of an exchange of stock appreciation rights held under the SAR Plan
for an Option under the Plan pursuant to Paragraph 6 of the Plan, in no event
shall the Exercise Price be less than the Fair Market Value of the Common Stock
on the Date of Grant.
(c) Each Agreement shall specify that the Exercise Price shall be
payable in cash or other immediately available funds or by check acceptable to
the Company. Each Agreement may also provide, at the discretion of the
Committee, that the Exercise Price may be payable (i) by the delivery or deemed
delivery (based on an attestation to the ownership thereof) to ASA Holdings of
shares of Common Stock already owned by the Participant that have been owned
for a period of not less than six (6) months and that have an aggregate Fair
Market Value on the date of exercise equal to the aggregate Exercise Price,
(ii) by a broker-assisted exercise pursuant to procedures the Committee may, in
its sole discretion, establish from time to time, or (iii) by a combination of
some or all of such methods of payment. The Company shall not loan any monies
to any Participant for the purchase of any Option Shares.
(d) The Committee shall also have the authority, in its discretion, to
award reload option rights ("RELOAD OPTION RIGHTS") in conjunction with the
grant of Options with the effect described in Paragraph 7. Reload Option
Rights must be awarded at the time an Option is granted.
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(e) Successive grants may be made to the same Participant whether or
not any Options previously granted to such Participant remain unexercised.
(f) Each Option shall be exercisable in such manner and at such times,
including, if applicable, the specification of a vesting schedule, as the
Committee shall determine. Each Agreement shall specify an Expiration Date
which shall be not later than ten (10) years after the Date of Grant.
(g) In the event that a Participant shall cease to be employed by the
Company for any reason other than his death, a material disability or
retirement with the consent of the Company, all Options held by him pursuant to
the Plan and not previously exercised at the date of such termination shall
terminate and become null and void and no longer of any force or effect four
(4) months following such termination, subject to the condition that no Option
shall be exercisable after the Expiration Date.
(h) If the termination is due to a material disability or retirement
with the consent of the Company, such disabled or retiring Participant shall
have the right to exercise his or her Options which have not previously been
exercised at the date of such termination of employment at any time within
twelve (12) months after such termination, subject to the condition that no
Option shall be exercisable after the Expiration Date. Whether termination of
employment is due to a material disability or is to be considered a retirement
with the consent of the Company shall be determined by the Committee. Any
disability to be considered "material" must result in a permanent and total
disability of an employee as defined in Code Section 22(e)(3), as amended, or
if such Section is no longer of any force or effect, the Participant shall be
deemed to be permanently and totally disabled if he is unable to engage in any
substantial gainful employment by reason of any medically determinable physical
or mental impairment which can be expected to result in death or which has
lasted or can be expected to last for a continuous period of not less than
twelve (12) months.
(i) If the Participant shall die while in the employ of the Company or
within a period of three (3) months after the termination of his employment as
a result of a material disability or retirement with the consent of the Company
as determined in subparagraph (g) above, such Participant's Options may be
exercised in whole or in part at any time within twelve (12) months after the
Participant's death, by the executor or administrators of the Participant's
estate or by any person or persons who shall have acquired the Options directly
from the Participant by bequest or inheritance, subject to the condition that
no Option shall be exercisable after the Expiration Date.
(j) No Option shall be transferable by a Participant other than by
will or the intestacy laws of descent and distribution. Options shall be
exercisable during the Participant's lifetime only by the Participant or, in
the event of the death or material disability of a Participant, by the
Participant's legal representative or heir of the Participant.
(k) Each Option granted under the Plan shall be subject to such
additional terms and conditions, not inconsistent with the Plan, which are
prescribed by the Committee and set forth in the applicable Agreement.
(l) If the Committee reasonably believes that a Participant has
committed an act of misconduct as described in this subparagraph, the Committee
may suspend the Participant's rights to exercise any option pending a
determination by the Committee.
If the Committee determines a Participant has committed an act of
embezzlement, fraud, dishonesty, nonpayment of any obligation owed to the
Company, breach of fiduciary duty or deliberate disregard
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of the Company's rules resulting in loss, damage or injury to the Company, or
if a Participant makes an unauthorized disclosure of any Company trade secret
or confidential information, or engages in any conduct constituting unfair
competition, neither the Participant nor his or her estate or heirs shall be
entitled to exercise any option whatsoever. In making such determination, the
Committee shall give the Participant an opportunity to appear and present
evidence on his or her behalf at a hearing before the Committee.
6. Exchange of Stock Appreciation Rights for Options. Any holder (the
"SAR HOLDER") of stock appreciation rights under the SAR Plan may exchange such
stock appreciation rights granted pursuant to the SAR Plan for an Option under
the Plan in accordance with the procedures outlined below and such other
conditions and procedures required by the Committee:
(a) The SAR Holder shall notify the Company not less than seven (7)
days prior to the desired exchange date of the number of stock appreciation
rights the SAR Holder desires to exchange for Options.
(b) Each stock appreciation right shall be exchanged on a one-for-one
basis for an Option to purchase one share of Common Stock under the Plan.
(c) The Expiration Date of an Option granted pursuant to an exchange of
a stock appreciation right shall be the same date as the date that is five
years after the date the exchanged stock appreciation right was originally
granted pursuant to the applicable Award Agreement.
(d) The Exercise Price of an Option granted pursuant to an exchange of
a stock appreciation right shall be the same as the Grant Price of such
exchanged stock appreciation right.
(e) If an exchange shall occur under this Paragraph 6, the Award
Agreement entered into between the SAR Holder and the Company concerning the
exchanged stock appreciation rights shall, along with the exchanged stock
appreciation rights, be surrendered by the SAR Holder and canceled by the
Company concurrently with the execution of an Agreement for the grant of
Options for the exchanged stock appreciation rights.
7. Reload Option Rights. Reload Option Rights if awarded with respect to
an Option shall entitle the Participant exercising the Option (and unless
otherwise determined by the Committee, in its discretion, only such original
Participant), upon exercise of the Option or any portion thereof through
delivery of shares of Common Stock, automatically to be granted on the date of
such an exercise an additional Option (a "RELOAD OPTION") (i) for that number
of shares of Common Stock equal to the number of shares used by the Participant
to exercise the underlying Option, (ii) having an option price not less than
100% of the Fair Market Value of the Common Stock covered by the Reload Option
on the Date of Grant of such Reload Option, (iii) having an Expiration Date not
later than the Expiration Date of the original Option so exercised and (iv)
otherwise having terms permissible for the grant of an Option under the Plan.
The grant of a Reload Option will be effected only upon the exercise of
underlying Options through the use of shares of Common Stock held by the
Participant for at least six (6) months. Each Reload Option shall be fully
exercisable six months from the effective date of grant. Subject to the
preceding sentences of this Paragraph and the other provisions of the Plan,
Reload Options Rights and Reload Options shall have such terms and be subject
to such restrictions and conditions, if any, as shall be determined, in its
discretion, by the Committee. Unless otherwise determined by the Committee, in
its discretion, in connection with the grant of the underlying Options, Reload
Option Rights shall entitle the Participant to be granted Reload Options only
if the underlying Option to which they relate is exercised by the Participant
during employment with the Company or any of its subsidiaries.
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<PAGE> 45
Each Agreement shall state whether the Committee has authorized Reload
Options with respect to the underlying Options. Upon the exercise of an
underlying Option, the Reload Option will be evidenced by an amendment to the
underlying Agreement. No Reload Option may provide for the grant, when
exercised, of subsequent Reload Options.
8. Issuance of Certificates. Subject to Paragraph 11 below, as soon as
practicable following the exercise of any Options, a certificate evidencing the
number of shares of Common Stock to be issued in connection with such exercise
shall be issued in the name of the Participant.
9. Adjustments. The Committee may make or provide for such adjustments
(a) in the maximum number of shares of Common Stock specified in Paragraph 4,
(b) in the number of shares of Common Stock covered by outstanding Options
granted hereunder, or (c) in the Exercise Price applicable to such Options as
the Committee in its sole discretion, may determine is equitably required to
prevent dilution or enlargement of the rights of Participants that otherwise
would result from any stock dividend, stock split, combination of shares,
recapitalization or other change in the capital structure of ASA Holdings, or
from any merger, consolidation, spin-off, reorganization, partial or complete
liquidation, issuance of rights or warrants to purchase securities or any other
corporate transaction or other event having an effect similar to any of the
foregoing.
10. Fractional Shares. ASA Holdings shall not be required to issue any
fractional shares of Common Stock pursuant to the Plan. The Committee may
provide for the elimination of fractional shares or for the settlement of
fractional shares in cash.
11. Withholding Taxes. The Company shall have the right to require any
individual entitled to receive Option Shares to remit to the Company, prior to
the delivery of any certificates evidencing such Option Shares, any amount
sufficient to satisfy any federal, state, or local tax withholding
requirements.
12. Registration Restrictions. No Option shall be exercisable unless
and until (i) a registration statement under the Securities Act of 1933, as
amended, has been duly filed and declared effective pertaining to such Option
Shares, such Option Shares shall have been qualified under applicable state
"blue sky" laws and all regulations of any securities exchange on which the
Common Stock may be listed (including, without limitation for such purposes,
The Nasdaq Stock Market) shall have been fully complied with and satisfied, or
(ii) the Committee in its sole discretion determines that such registration,
qualification and compliance are not required as a result of the availability
of an exemption from such registration, qualification, or compliance under such
laws.
13. Stockholder Rights. A Participant shall have no rights as a
stockholder with respect to any shares of Common Stock issuable upon exercise
of an Option until a certificate or certificates evidencing such shares shall
have been issued to such Participant, and no adjustment shall be made for
dividends or distributions or other rights in respect of any share of capital
stock of the Company for which the record date is prior to the date upon which
the Participant shall become the holder of record thereof.
14. Indemnification of Committee. In addition to such other rights of
indemnification as they may have as directors or members of the Committee, the
members of the Committee shall be indemnified by the Company against the
reasonable expenses, including attorneys' fees actually and necessarily
incurred in connection with the defense of any proceeding, or in connection
with any appeal therein, to which they or any of them may be a party by reason
of any action taken or failure to act under or in connection with the Plan or
any Option granted thereunder, and against all amounts paid by them in
settlement thereof (provided such settlement is approved by independent legal
counsel selected by the Company) or paid by them in satisfaction of a judgment
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<PAGE> 46
in any such proceeding, except in relation to matters as to which it shall be
adjudged in such action, suit or proceeding that such Committee member is
liable for gross negligence or misconduct in the performance of his or her
duties; provided that within sixty (60) days after institution of any such
action, suit or proceeding, a Committee member shall in writing offer the
Company the opportunity at its own expense, to handle and defend the same.
15. Amendments; Termination; Limitation in Participants Rights.
(a) The Board may, at any time and from time to time, alter, amend,
suspend or terminate the Plan in whole or in part; provided, however, that
amendments shall be subject to (x) the approval of a majority of the shares of
the Company's voting common stock entitled to vote if the Committee determines
that such approval is necessary in order for the Company to rely on the
exemptive relief provided under Rule 16b-3 or Code Section 162(m) and (y) all
other approvals which are required by law, whether regulatory, stockholder or
otherwise. No amendment or termination or modification of the Plan shall in
any manner affect any Option granted prior to the date of the amendment without
the consent of the Participant holding the Option, except that the Committee
may amend or modify the Plan in a manner that (a) does affect Options granted
prior to the date of the amendment if the Committee determines that such
amendment or modification is necessary to retain the benefits of Rule 16b-3 or
Code Section 162(m), or (b) does not adversely affect the rights of the
Participant holding the Option.
(b) The Plan shall not confer upon any Participant any right with
respect to continuance of employment or other service with the Company, nor
will it interfere in any way with any right the Company would otherwise have to
terminate such Participant's employment or other service at any time.
16. Governing Law. The Plan and all rights hereunder shall be construed
in accordance with and governed by the laws of the State of Georgia.
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APPENDIX A
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR ANNUAL MEETING OF SHAREHOLDERS TO BE HELD MAY 21, 1997
ASA HOLDINGS, INC.
The undersigned hereby appoints John W. Beiser and George F. Pickett, or
either of them, as Proxies, for and on behalf of the undersigned, with full
power of substitution, each with the power to appoint his substitute, and
hereby authorizes them to represent and to vote, as designated below, all the
shares of common stock of ASA Holdings, Inc. that the undersigned would be
entitled to vote, with all the powers that the undersigned would possess if
personally present, at the Annual Meeting of the Shareholders to be held on
Wednesday, May 21, 1997, at 11:00 a.m., Atlanta, Georgia time, at the Cobb
Galleria Centre, Meeting Rooms 117-118, Two Galleria Parkway, Atlanta, Georgia
or any adjournments or postponements thereof.
1. PROPOSAL TO FIX THE NUMBER OF DIRECTORS AT SIX AND TO ELECT SIX
DIRECTORS
(INSTRUCTION: TO FIX THE NUMBER OF DIRECTORS AT A NUMBER LESS THAN SIX, OR
TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
STRIKE A LINE THROUGH THE NOMINEE'S NAME IN THE LIST BELOW.
FAILURE TO STRIKE THROUGH ANY NOMINEE'S NAME OR TO CHECK THE
BOX BELOW TO WITHHOLD AUTHORITY FOR ALL NOMINEES WILL BE
DEEMED TO GRANT AUTHORITY TO FIX THE NUMBER OF DIRECTORS AT
SIX AND TO VOTE FOR ALL NOMINEES.)
<TABLE>
<S> <C> <C>
[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY [ ] ABSTAIN
(except as marked to the contrary below) for all nominees listed below
</TABLE>
John W. Beiser, Jean A. Mori, Parker H. Petit, George F.
Pickett, Alan M. Voorhees, Ralph W. Voorhees
2. PROPOSAL TO ADOPT AND APPROVE THE ASA HOLDINGS, INC. 1997 NONQUALIFIED
STOCK OPTION PLAN:
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSAL 1 AND ALL NOMINEES
NAMED THEREIN AND "FOR" PROPOSAL 2. THIS PROXY, DULY EXECUTED, WILL BE VOTED AS
SPECIFIED. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED "FOR" THE PROPOSAL
TO FIX THE NUMBER OF DIRECTORS AT SIX AND TO ELECT ALL SIX NOMINEES LISTED IN
PROPOSAL 1 AND "FOR" PROPOSAL 2. THIS PROXY, IF PROPERLY EXECUTED AND
DELIVERED, WILL REVOKE ALL PRIOR PROXIES.)
The undersigned hereby acknowledges receipt of the Proxy Statement and
Notice of Annual Meeting to be held May 21, 1997.
Dated: , 1997
--------------------------
---------------------------------------
(Seal)
---------------------------------------
(Seal)
(Please sign exactly as your name appears hereon.
If shares are registered in more than one name,
each registered holder should sign. When signing as
an attorney, administrator, executor, guardian,
conservator, receiver or trustee, please give your
full title as such. If executed by a corporation or
partnership, the proxy should be signed by a duly
authorized officer or agent in the full name of the
entity.)
PLEASE SIGN, DATE AND PROMPTLY RETURN THIS PROXY CARD IN THE ENCLOSED ENVELOPE.
NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.
[ ] I PLAN TO ATTEND
