<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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:
<TABLE>
<S> <C>
[ ] 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
</TABLE>
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)(1) 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
April 17, 1998
Dear Shareholder:
You are cordially invited to attend the 1998 Annual Meeting of
Shareholders of ASA Holdings, Inc. to be held at 11:00 a.m. on Thursday, May 21,
1998, in the Chambers Room of the Renaissance Waverly Hotel, 2450 Galleria
Parkway, Atlanta, Georgia.
The Notice of Annual Meeting of Shareholders and the Proxy Statement that
follow provide details of the business to be conducted at the Annual Meeting.
Whether or not you plan to attend the Annual Meeting, we hope that you
will have your shares represented by completing, signing, dating and returning
your proxy card in the enclosed envelope as soon as possible. Your stock will be
voted in accordance with the instructions you have given in your proxy.
I look forward to welcoming you at the Annual Meeting.
Sincerely,
George F. Pickett
Chairman and Chief Executive Officer
<PAGE> 3
ASA HOLDINGS, INC.
100 HARTSFIELD CENTRE PARKWAY
SUITE 800
ATLANTA, GEORGIA 30354
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 21, 1998
The Annual Meeting of Shareholders of ASA Holdings, Inc. will be held in
the Chambers Room of the Renaissance Waverly Hotel, 2450 Galleria Parkway,
Atlanta, Georgia, on Thursday, May 21, 1998, at 11:00 a.m. local time, for the
following purposes:
(1) To consider and vote on a resolution fixing the number of directors
of the Company at seven (7) and to elect seven (7) directors for the
ensuing year;
(2) To consider and vote upon a proposal to approve and adopt the ASA
Holdings, Inc. 1998 Nonqualified Stock Option Plan for Non-Employee
Directors; and
(3) To transact such other business as may properly come before the
Annual Meeting or any postponement or adjournment thereof.
The Board of Directors has fixed the close of business on April 3, 1998 as
the record date for the determination of shareholders entitled to notice of, and
to vote at, the Annual Meeting or any adjournment thereof. Please mark, sign and
date the enclosed proxy card and mail it promptly in the accompanying
postage-prepaid envelope.
By Order of the Board of Directors
John W. Beiser
Secretary
Atlanta, Georgia
April 17, 1998
IMPORTANT
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE AND
SIGN THE ENCLOSED PROXY CARD AND RETURN IT IN THE ENVELOPE WHICH HAS BEEN
PROVIDED. IN THE EVENT YOU ATTEND THE ANNUAL MEETING, YOU MAY REVOKE YOUR PROXY
AND VOTE YOUR SHARES IN PERSON.
<PAGE> 4
ASA HOLDINGS, INC.
--------------------------------------
PROXY STATEMENT
FOR THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 21, 1998
--------------------------------------
GENERAL
This proxy statement and the accompanying proxy card are furnished to the
shareholders of ASA Holdings, Inc. (the "Company") in connection with the
solicitation of proxies by the Board of Directors of the Company for use at the
Annual Meeting of Shareholders of the Company (the "Annual Meeting") to be held
at 11:00 a.m. local time, on Thursday, May 21, 1998, in the Chambers Room of the
Renaissance Waverly Hotel, 2450 Galleria Parkway, Atlanta, Georgia, and at any
postponements or adjournments thereof. All shareholders are encouraged to attend
the meeting. Your proxy is requested, however, whether or not you attend in
order to assure maximum participation.
This proxy statement and accompanying proxy card are first being mailed to
the Company's shareholders on or about April 17, 1998. A proxy delivered
pursuant to this solicitation is revocable at the option of the person giving
the same at any time before it is exercised. A proxy may be revoked, prior to
its exercise, by executing and delivering a later dated proxy card, by
delivering written notice of the revocation of the proxy to the Company prior to
the Annual Meeting, or by attending and voting at the Annual Meeting. Attendance
at the Annual Meeting, in and of itself, will not constitute a revocation of a
proxy. The Company's 1997 Annual Report to Shareholders, which should be read in
conjunction with the matters discussed in this proxy statement, is also
enclosed. The expenses incidental to the preparation and mailing of this proxy
material are being paid by the Company. The Company's regularly retained
investor relations firm, Corporate Communications, Inc., may also solicit
proxies by telephone and mail. The Company will bear the cost of this
solicitation, but will not pay Corporate Communications, Inc. a separate fee for
any such solicitations.
The principal executive offices of the Company are located at 100
Hartsfield Centre Parkway, Suite 800, Atlanta, Georgia 30354 and the telephone
number is (404) 766-1400.
RECORD DATE AND SHARE OWNERSHIP
The close of business on April 3, 1998 has been fixed as the record date
(the "Record Date") for the determination of shareholders of the Company
entitled to notice of and to vote at the Annual Meeting. The Company had
29,822,877 shares of its Common Stock, $.10 par value (the "Common Stock"),
outstanding and entitled to vote as of the Record Date. Each share of Common
Stock entitles the holder thereof to one vote on all matters properly coming
before the meeting.
<PAGE> 5
QUORUM AND VOTING REQUIREMENTS
At the Annual Meeting, shareholders will be requested to act upon the
matters set forth in this proxy statement. Shares of Common Stock for which
proxies are properly executed and returned (and not revoked) prior to the Annual
Meeting will be voted in accordance with the shareholder's directions on the
proxy or, in the absence of directions, will be voted "FOR" the resolution
fixing the number of directors at seven and the election of the seven director
nominees recommended by the Board of Directors, "FOR" approval of the ASA
Holdings, Inc. 1998 Nonqualified Stock Option Plan for Non-Employee Directors
(the "Plan"), and in accordance with the discretion of the named proxies on any
other matters which may be properly brought before the Annual Meeting. Any
notice revoking a proxy should be sent in writing to the attention of the
Secretary of the Company at the Company's principal executive offices.
The presence of a majority of shares of Common Stock entitled to vote,
whether present in person or by proxy, will constitute a quorum for purposes of
shareholder action. 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. Directors are elected by a plurality of votes cast by the holders of
Common Stock. Votes may be cast in favor of or withheld from each nominee;
abstentions and broker non-votes will be treated as not having been voted and
will have no effect on the outcome of the election of directors.
With respect to the proposal to fix the number of directors at seven,
votes may be cast for the resolution or against the matter (by striking a line
through one or more of the director nominees' names on the proxy card), or
shareholders may abstain from voting on the matter. Approval of such matter
requires the affirmative vote of a majority of the outstanding shares entitled
to vote. With respect to the proposal to approve the Plan, the affirmative vote
of a majority of shares represented at the Annual Meeting and entitled to vote
is required for approval of such proposal. Abstentions and broker non-votes will
have the effect of votes against the proposal to fix the number of directors at
seven and against approval of the Plan.
BACKGROUND -- THE REORGANIZATION
The Company is a holding company, the principal assets of which are the
shares of its wholly owned subsidiaries Atlantic Southeast Airlines, Inc., a
Georgia corporation ("ASA"), and ASA Investments, Inc., a Delaware corporation
("ASA Investments"). The Company became the parent holding company for ASA and
ASA Investments pursuant to a corporate reorganization that was effective after
the close of business on December 31, 1996 (the "Reorganization"). Prior to the
Reorganization, the Company had been a subsidiary of ASA, which was a
publicly-traded company. Pursuant to the Reorganization, ASA was merged with a
wholly owned subsidiary of the Company and each issued and outstanding share of
ASA's common stock (other than treasury shares, which were canceled) was
converted into one share of the Company's Common Stock.
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<PAGE> 6
ITEM 1 -- DIRECTORS: NUMBER AND ELECTION
NUMBER OF DIRECTORS
The Board of Directors of the Company has proposed increasing the size of
the Board from six to seven members and has nominated the following seven
individuals for election to the Board of Directors: John W. Beiser, George
Berry, Jean A. Mori, Parker H. Petit, George F. Pickett, Alan M. Voorhees and
Ralph W. Voorhees.
At the Annual Meeting, shareholders will elect the entire Board of
Directors for a term of one year and until their successors are elected and
qualified or until their earlier resignation or removal. The Bylaws of the
Company provide that there shall be not less than three nor more than nine
directors and that the exact number may be fixed from time to time by resolution
of the Company's shareholders. The Board of Directors expects that each of the
nominees will be available to stand for election and to serve as director.
However, in the event a vacancy among the original nominees occurs prior to the
meeting, the proxies will be voted for a substitute nominee or nominees named by
the Board and for the remaining nominees.
DESIGNATION OF DIRECTORS
Under the terms of a Stock Agreement dated as of March 17, 1997 (the
"Stock Agreement") among the Company, 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 the Company's Board of Directors so long
as Delta continues to beneficially own (directly or indirectly) at least 10% of
the Company's outstanding Common Stock. Julius P. Gwin, a Delta designated
member of ASA's Board of Directors, retired effective as of September 1, 1996
and 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 the Company's Board of Directors. Delta has not
designated any person for election as director at the Annual Meeting. As of
March 30, 1998, Delta (indirectly through its wholly owned subsidiary Delta Air
Lines Holdings, Inc.) beneficially owned approximately 26.8% of the outstanding
Common Stock of the Company. See "Security Ownership of Certain Beneficial
Holders" and "Certain Relationships and Related Transactions."
NOMINEES
The following is a brief description of the business experience of each
nominee for election as a director for at least the past five years.
JOHN W. BEISER. Mr. Beiser (age 57), is the Company's 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 the Company 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 served as the President of ASA Investments since
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<PAGE> 7
its inception. Mr. Beiser has been a member of the Board of Directors of ASA
since 1982 and of the Company since its inception.
GEORGE BERRY. Mr. Berry (age 60) has served for the past seven years as
Senior Vice President of Cousins Properties Incorporated, a publicly-held real
estate investment trust. Mr. Berry also serves as a director of Community Trust
Financial Services Corporation. From 1983 to 1990, he served as Commissioner of
Industry, Trade and Tourism for the State of Georgia. From 1962 to 1983, Mr.
Berry served in the administrations of four mayors of the City of Atlanta, and
was appointed as Chief Administrative Officer under two mayoral administrations.
His responsibilities with the Atlanta administration included an appointment as
Commissioner of Aviation, in which capacity he supervised a major expansion of
Hartsfield Atlanta International Airport.
JEAN A. MORI. Mr. Mori (age 61) has been a member of the Company's 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 27 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.
PARKER H. PETIT. Mr. Petit (age 58) has been a member of the Company's
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 served as Chairman of
the Board of Directors of Matria Healthcare, Inc. ("Matria"), an obstetrical
homecare services company, since March 1996. He was the founder of Healthdyne,
Inc. and acted as its Chairman of the Board and Chief Executive Officer from
1970 until Healthdyne and Tokos Medical Corporation (Delaware) merged with and
into Matria in March 1996. Mr. Petit also serves as a director of Healthdyne
Information Enterprises, Inc., Intelligent Systems, Inc., Respironics, Inc. and
Logility, Inc.
GEORGE F. PICKETT. Mr. Pickett (age 57) is the Company's 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 the Company 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 the Company, ASA and ASA Investments
since their respective inceptions.
ALAN M. VOORHEES. Mr. Voorhees (age 75) has been a member of the Company's
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.
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<PAGE> 8
RALPH W. VOORHEES. Mr. Voorhees (age 71) has been a member of the
Company's 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. Beiser is the brother-in-law of Ralph W. Voorhees, who is the brother
of Alan M. Voorhees.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RESOLUTION SETTING THE
NUMBER OF DIRECTORS CONSTITUTING THE BOARD OF DIRECTORS AT SEVEN AND "FOR" EACH
OF THE SEVEN NOMINEES SET FORTH ABOVE AS DIRECTORS OF THE COMPANY.
ADDITIONAL INFORMATION
MEETINGS OF THE BOARD OF DIRECTORS
During 1997, the Company's Board of Directors met five times. Each
incumbent director attended at least 75% of the aggregate of (1) the total
number of meetings of the Board and (2) the total number of meetings held by the
committees of the Board on which he served, during the period in which he served
as a member of the committee.
COMMITTEES OF THE BOARD OF DIRECTORS
The Company has two standing committees, an Audit Committee and a
Compensation Committee. The Company does not have a separate nominating
committee.
The Company's Audit Committee currently consists of Alan M. Voorhees and
Ralph W. Voorhees. During 1997, the Audit Committee met once. The Audit
Committee is empowered to (i) recommend to the Board of Directors (annually or
as required) the independent auditors for the 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 the Company's conflict of 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 the Company's
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 the Company's financial statements; and (ix)
direct and supervise (where appropriate) special investigations into any matters
that raise questions about the accuracy of the Company's financial statements or
the adequacy of the internal accounting controls.
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<PAGE> 9
The Company's Compensation Committee currently consists of Jean A. Mori
and Parker H. Petit. From January 1997 to April 1997, Alan M. Voorhees served on
the Compensation Committee. During 1997, the Compensation Committee met three
times. The Compensation Committee is empowered to (i) approve compensation
levels and increases for each executive officer who also serves as a member of
the Board of Directors and for any officer or employee having an annual base
salary greater than $90,000, (ii) approve all incentive payments in excess of
$5,000 per year and (iii) undertake the administration, at the direction of the
Board, of employee benefit plans.
COMPENSATION OF DIRECTORS
During 1997, the Company's directors who were employees of the Company and
its subsidiaries received no additional or special remuneration for serving as
members of the Board of Directors. The compensation for each member of the
Company's Board of Directors who was not also an officer or employee of the
Company or its subsidiaries 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 the Company's Board of
Directors were reimbursed for their expenses associated with attendance at
formal Board meetings during 1997.
If the shareholders of the Company approve the 1998 Nonqualified Stock
Option Plan for Non-Employee Directors at the Annual Meeting, non-employee
directors will be entitled to receive options to purchase Company Common Stock.
See "Item 2--Proposal to Approve the ASA Holdings, Inc. 1998 Nonqualified Stock
Option Plan for Non-Employee Directors."
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<PAGE> 10
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL HOLDERS
The following table sets forth certain information as to the Common Stock
of the Company beneficially owned as of March 30, 1998 by each person, other
than persons whose ownership is reflected under the caption "Security Ownership
of Management," who is known by the Company to own, directly or indirectly, more
than 5% of the outstanding shares of the Company's Common Stock, and reflects
information presented in each such person's Schedule 13D or Schedule 13G (and
amendments, if any, thereto) as filed with the Securities and Exchange
Commission and provided to the Company.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF PERCENT OF
NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP CLASS (1)
- ------------------------------------ -------------------- ---------
<S> <C> <C>
Delta Air Lines Holdings, Inc. (2) ........ 7,995,000 26.8%
1101 North Market Street
Suite 1300
Wilmington, DE 19801
FMR Corporation ............................ 2,351,600 7.9%
82 Devonshire Street
Boston, MA 02109
</TABLE>
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(1) Percent of Class is based on 29,822,877 shares of the Company's Common
Stock outstanding as of March 30, 1998 (excluding treasury shares).
(2) Delta Air Lines Holdings, Inc. is a wholly-owned subsidiary of Delta.
(3) Based upon the Schedule 13G filed on February 14, 1998 with the Securities
and Exchange Commission by FMR Corp. ("FMR"), Edward C. Johnson, III and
Abigail P. Johnson. Of the shares reported, (a) 2,060,200 shares are owned
beneficially by Fidelity Management & Research Company ("Fidelity"), a
wholly-owned subsidiary of FMR, (b) 1,835,000 shares are owned
beneficially by Fidelity Low-Priced Stock Fund (the "Fund"), a registered
investment company, (c) 291,300 shares are owned beneficially by Fidelity
Management Trust Company ("FMTC"), a wholly-owned subsidiary of FMR, and
(d) 100 shares are owned by Fidelity International Limited ("FIL"), an
affiliate of FMR. According to the Schedule 13G, (i) each of FMR,
Fidelity, Mr. Johnson and the Fund has the sole power to dispose of all
2,060,200 of the shares owned by the Fund, and (ii) the sole power to vote
the shares owned directly by the Fund resides with the Fund's Board of
Trustees. Each of Mr. Johnson and FMR, through its control of FMTC, has
sole dispositive power over 291,300 shares and sole power to vote or
direct the voting of 74,100 shares owned by the above beneficial owners.
FIL has sole voting and dispositive power with respect to all shares it
owns beneficially.
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<PAGE> 11
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth certain information as to the Common Stock
beneficially owned as of March 30, 1998 by each of the Company's directors,
nominees for director, each executive officer, and all directors and executive
officers as a group.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF PERCENT OF
NAME OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP CLASS (1)
- ------------------------ -------------------- ---------
<S> <C> <C>
George F. Pickett........................... 841,737 (2)(3) 2.8%
John W. Beiser.............................. 506,347 (3)(4) 1.7%
Ronald V. Sapp.............................. 75,289 (3) *
R. Mark Bole................................ 1,500 *
Jean A. Mori................................ 1,124 (5) *
Parker H. Petit............................. 5,000 *
Alan M. Voorhees............................ 288,477 (6) *
Ralph W. Voorhees........................... 47,594 (7) *
George Berry................................ 0 *
Edward J. Paquette.......................... 26,800 (3) *
All directors, nominees and executive
officers as a group (ten persons)........... 1,793,868 (8) 5.9%
</TABLE>
- ------------------
* Represents holdings of less than 1%.
(1) Information with respect to beneficial ownership is based upon information
furnished by each owner. Percent of Class is based on 29,822,877 shares of
the Company's Common Stock outstanding as of March 30, 1998 (excluding
treasury shares).
(2) Includes 118,650 shares held by the wife of George F. Pickett, as to which
shares Mr. Pickett disclaims any beneficial ownership interest.
(3) Includes shares of the Company's Common Stock that the individual has the
right to acquire, on or before May 29, 1998 (60 days from March 30, 1998),
through the exercise of options granted under the Nonqualified Stock
Option Plan (see "Stock Option/SAR Grants and Related Information") as
follows: George F. Pickett - 341,800 shares; John W. Beiser - 206,500
shares; Ronald V. Sapp - 65,400 shares; and Edward J. Paquette - 26,800
shares.
(4) Includes 140,000 shares held by the wife of John W. Beiser, as to which
shares Mr. Beiser disclaims any beneficial ownership interest.
(5) Includes 230 shares held by the wife of Jean A. Mori, as to which shares
Mr. Mori disclaims any beneficial ownership interest.
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<PAGE> 12
(6) Includes 263,477 shares held by irrevocable trusts created for the benefit
of the adult children of Alan M. Voorhees and 25,000 shares held by his
wife, as to which shares Mr. Voorhees disclaims any beneficial ownership
interest.
(7) Includes 25,165 shares held by the wife of Ralph W. Voorhees, as to which
shares Mr. Voorhees disclaims any beneficial ownership interest.
(8) Includes an aggregate of 640,500 shares which the directors and executive
officers as a group have the right to acquire as of May 29,1998 through
the exercise of options.
EXECUTIVE COMPENSATION AND OTHER INFORMATION
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Company's compensation policies applicable to its executive officers
are established and administered by the Compensation Committee (the "Committee")
of the Company's Board of Directors, the current members of which are
non-employee directors of the Company. The compensation policies adopted by the
Committee are designed to enhance the overall strength and financial performance
of the Company, both by aligning the financial interests of the Company's
executive officers with those of its shareholders and by retaining and rewarding
talented executives who are critical to the long-term success of the Company's
business. A significant portion of the executive compensation is directly
related to the financial results of the Company, although individual
contributions and accomplishments are also considered in the determination of
compensation.
The Company's executive compensation program as administered by the
Committee consists primarily of (i) annual cash compensation, the components of
which are base salary and an annual variable cash incentive ("bonus"), and (ii)
long-term equity-based incentive compensation, formerly consisting of stock
appreciation rights ("SARs") and now consisting of stock options. In addition, a
retirement program consisting of an investment savings plan, a deferred
executive compensation plan and a supplemental executive retirement plan is
provided.
Each of these compensation elements for the Company's executive officers
is discussed below, with the compensation of the Company's Chairman of the Board
and Chief Executive Officer, George F. Pickett, and the Company's President,
John W. Beiser (Messrs. Pickett and Beiser, collectively, the "Senior Executive
Officers"), set forth separately under the caption "Senior Executive Officer
Compensation."
For clarification purposes, references in the Compensation Committee
Report to executive compensation policies and practices of the Compensation
Committee and management shall mean ASA's Compensation Committee and management
prior to the Reorganization and the Company's Compensation Committee and
management thereafter.
Base Salaries. The base salaries of Company executives and proposed
changes in salaries are reviewed and approved annually by the Committee. In
determining base salaries, the Committee considers, among other factors, the
Company's financial performance in the prior
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<PAGE> 13
year, the individual's contributions toward the achievement of corporate goals
and objectives, the individual's job level and experience and current salary
compared to market rates. The Committee bases its decisions on management
recommendations for officers and key employees other than the Senior Executive
Officers.
Annual Incentive Compensation. A second major component of executive
compensation is annual incentive compensation which is paid in the form of cash
bonuses. Bonus payments to officers and employees of the Company other than the
Senior Executive Officers are based upon management's recommendations to the
Committee. Maximum bonus award levels are based on factors similar to those used
in determining base salary.
Long-Term Incentive Compensation. Equity-based incentives are designed to
link a portion of executive compensation to increases in shareholder value.
Prior to May 1997, the Company's long-term incentive compensation consisted of
SARs granted pursuant to the Company's Stock Appreciation Rights Plan (the "SAR
Plan"). The methodology and assumptions used by the Committee in calculating SAR
awards to officers and key employees in 1997 and in previous years were intended
to produce, upon the exercise of the SAR award one year from the date of its
grant, an amount equivalent to approximately 50% of the base pay for the Senior
Executive Officers and 35% of the base pay for other grantees. In May 1997, upon
recommendation by the Committee and adoption by the Board, the Company's
shareholders approved the ASA Holdings, Inc. 1997 Nonqualified Stock Option Plan
(the "Stock Option Plan") to replace the SAR Plan. See "Stock Option/SAR Grants
and Related Information" herein regarding the exchange of all outstanding SARs
for replacement options.
Other Deferred Compensation Arrangements. The Company has the following
deferred compensation plans which are available to some or all of the Company's
named executive officers: an Investment Savings Plan (the "Savings Plan"), an
Executive Deferred Compensation Plan (the "Deferred Compensation Plan"), and a
Supplemental Executive Retirement Plan (the "SERP"). Both executive and
non-executive employees are eligible to participate in the Savings Plan, a
401(k) plan, subject to certain legal limitations on contributions or benefits
to highly compensated employees. Under the Deferred Compensation Plan, which
provides for tax deferred contributions by participating employers (the Company
and ASA) that exceed the contribution levels permitted under the Savings Plan,
the participating employers allocate to each participant's account a specified
percentage of his base salary for the year (15% for the Senior Executive
Officers and 10% for the other key executive employee participants). The amount
of the benefit for a participant other than the Senior Executive Officers is
equal to the participant's vested interest in the accrued benefit percentage of
the contributions and earnings allocated to his account. The Senior Executive
Officers have a 100% accrued benefit percentage under the Deferred Compensation
Plan. The SERP is a nonqualified plan which provides individually tailored
supplemental retirement income for key executive employees selected by the
Company. Currently the Senior Executive Officers are the only SERP participants.
As of the date of this proxy statement, the benefits payable to each of the
Senior Executive Officers would be $168,540 annually reduced by the applicable
amounts of their benefits under the Savings Plan, the Deferred Compensation Plan
and Social Security.
-10-
<PAGE> 14
Senior Executive Officer Compensation. The salary levels and cash
incentive bonuses for the Company's Senior Executive Officers are determined
annually by the Committee. Historically, salary increases for the Senior
Executive Officers have been commensurate with the percentage increase given to
the other officers and key employees. The 1997 base salaries of the Senior
Executive Officers represented a 4.5% increase over their 1996 base salaries.
For 1998, the Committee has approved a 4.0% increase over the 1997 base
salaries.
The Committee's bonus arrangements for the Senior Executive Officers for
1997 reflected a continuation of its policy of providing for an annual bonus to
each Senior Executive Officer of up to 50% of his base salary for the year, with
the exact amount of bonus earned to be determined at year end by the Committee.
The Committee approved 1997 bonuses for each of Messrs. Pickett and Beiser in
the amount of 40% of their respective base salaries. The Committee determines
the bonus earned based on the Company's satisfaction of specified
performance-based criteria, such as the Company's maintenance of certain levels
of completion factor and schedule reliability, non-fuel related ASM cost and
passenger/service satisfaction indicators, as well as the individual's
contributions with respect to developing and implementing long-term business
strategies and development of the Company's senior management structure. No
specific weight is assigned to the various bonus factors for purposes of
calculation of the bonus earned.
Deductibility of Executive Compensation. Section 162(m) of the Internal
Revenue Code of 1986, as amended (the "Code"), generally disallows a tax
deduction to public companies for compensation of more than $1 million paid in
any year (not including amounts deferred) to a corporation's chief executive
officer and the four other most highly compensated executive officers, unless
certain requirements are met. To the extent that compensation is
"performance-based," as defined by the Code, it is excluded from the calculation
of the amount of deductible compensation. The Company believes that the Stock
Option Plan qualifies as such a performance-based compensation plan that is not
subject to the Section 162(m) limitations, and that all compensation paid in
1997 will be deductible under Section 162(m). In the future, the Committee
intends to try to structure compensation plans to ensure deductibility while
still preserving the Company's ability to attract and retain qualified
executives.
COMPENSATION COMMITTEE
Parker H. Petit
Jean A. Mori
-11-
<PAGE> 15
STOCK PRICE PERFORMANCE GRAPH
The following graph compares the five-year cumulative total shareholder
return on ASA's and the Company's Common Stock with the comparable cumulative
total returns of the The Nasdaq Stock Market (U.S. and Foreign) Index and the
Media General Airline Index comprised of the companies listed below. The graph
assumes that the value of the investment in the Common Stock and each index was
$100 on December 31, 1992, and that all dividends were reinvested. The stock
price performance shown on the graph is not necessarily indicative of future
price performance.
The current composition of the Media General Airline index is as follows:
Air Canada (Class A); Air Methods CP; Airlease LTD; Airnet Systems, Inc.;
Airtran Holdings, Inc.; Alaska Air Group Inc.; America West Holdings CP; AMR
Corporation; Amtran Inc.; ASA Holdings, Inc.; Atlantic Coast Airlines; Baltic
International USA Inc.; British Airways PLC ADR; CCAir Inc.; CHC Helicopter CP
(Class A); China Eastern Airlines; China Southern Airlines Co.; Comair Holdings
Inc.; Continental Airlines (Class A & B); Delta Air Lines Inc.; Frontier
Airlines Inc.; Great Lakes Aviation LTD; Hawaiian Airlines Inc.; Japan Airlines
LTD; KLM Royal Dutch Airlines; Linea Aerea Nacional CH; Mesa Air Group Inc.
(NEV); Mesaba Holdings Inc.; Midwest Airlines; Midwest Express Holdings;
Northwest Airlines (Class A); Offshore Logistics Inc.; Pan Am Corp; Petroleum
Helicopter NV; Petroleum Helicopter VTG; PS Group Holdings Inc.; Reno Air Inc.;
Ryanair Holdings; and Skywest Inc.
COMPARISON OF TOTAL CUMULATIVE RETURN*
AMONG ASA/ASA HOLDINGS, INC.,
MEDIA GENERAL AIRLINE INDEX
AND NASDAQ STOCK MARKET INDEX
[GRAPHIC OMITTED]
* Assumes $100 investment in the common stock of ASA/ASA Holdings, Inc.,
Media General Airline and Nasdaq Stock Market indices on 12/31/92 with
dividend reinvestment.
-12-
<PAGE> 16
INDEXED RETURNS OF INITIAL $100 INVESTMENT
------------------------------------------
<TABLE>
<CAPTION>
12/31/92 12/31/93 12/31/94 12/31/95 12/31/96 12/31/97
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
ASA/ASA HOLDINGS COMMON STOCK $100.00 $158.01 $72.47 $102.00 $105.41 $139.11
Media General Airline Index $100.00 $122.93 $117.84 $151.79 $156.95 $193.57
Nasdaq Stock Market Index $100.00 $119.95 $125.94 $163.35 $202.99 $248.30
</TABLE>
COMPARATIVE ANNUAL RETURN PERCENTAGE
------------------------------------
<TABLE>
<CAPTION>
12/31/92 12/31/93 12/31/94 12/31/95 12/31/96 12/31/97
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
ASA/ASA HOLDINGS COMMON STOCK N/A 58.01% (54.14%) 40.75% 3.34% 31.97%
Media General Airline Index N/A 22.93% (4.14%) 28.81% 3.40% 23.33%
Nasdaq Stock Market Index N/A 19.95% 4.99% 29.70% 24.27% 22.32%
</TABLE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation Committee at the end of 1997 were Messrs.
Mori and Petit. Mr. Mori replaced Mr. Alan M. Voorhees as a member of the
Compensation Committee in April 1997. No member of the Compensation Committee
was also an officer or employee of the Company during fiscal 1997.
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<PAGE> 17
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table sets forth certain information concerning the
compensation of the Company's Chief Executive Officer and each of the three
other executive officers of the Company serving as of December 31, 1997 whose
total salary and bonus for 1997 exceeded $100,000 (these four individuals are
referred to collectively as the "named executive officers"). The table reflects
all compensation received by each such executive officer for services rendered
in all capacities to the Company and its subsidiaries that was paid or accrued
during the fiscal years ended December 31, 1997, 1996 and 1995.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
---------------------------------------------- -------------
SECURITIES
FISCAL OTHER ANNUAL UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) COMPENSATION(#) (1) OPTIONS/SARS(#) (2) COMPENSATION ($)
- --------------------------- ---- ---------- --------- ------------------- -------------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
George F. Pickett.............. 1997 $283,200 $113,000 $ 1,473 132,900 $42,480 (3)
Chairman of the Board and 1996 271,020 108,000 13,278 -- 40,653 (3)
Chief Executive Officer 1995 262,500 91,875 -- 130,300 42,375 (3)
John W. Beiser................. 1997 276,480 111,000 1,650 129,700 41,472 (4)
President and Secretary 1996 264,600 106,000 2,617 -- 39,690 (4)
1995 256,320 89,710 12,326 127,200 41,448 (4)
Ronald V. Sapp................. 1997 127,800 51,000 -- 42,000 17,230 (5)
Senior Vice 1996 116,160 50,000 -- -- 15,116 (5)
President--Finance and 1995 111,720 35,000 -- 38,800 14,172 (5)
Chief Financial Officer
Edward J. Paquette (6)......... 1997 155,000 62,000 -- 53,600 10,810 (7)
Senior Vice
President--Operations of
ASA
</TABLE>
- ------------------
(1) At the end of fiscal 1995, ASA's Compensation Committee authorized ASA to
pay to each of Messrs. Pickett and Beiser annually reimbursements to cover
Medicare tax liability with respect to the vested portion of his
respective interest in the SERP. Mr. Beiser received such reimbursements
in 1995, 1996 and 1997. Mr. Pickett received such reimbursements in 1996
and 1997. Such reimbursements were disclosed as additional salary in the
Summary Compensation Table in prior years.
(2) Reflects shares underlying SARs granted in the respective year, all of
which were canceled on May 21, 1997 and replaced on a one-for-one basis by
stock options with the same basic terms as the outstanding SARs. See
"Stock Option/SAR Grants and Related Information."
(3) Includes contributions by the Company of $42,480 to the Deferred
Compensation Plan in 1997; contributions by ASA of $40,653 to the Deferred
Compensation Plan in 1996; and contributions by ASA of $39,375 to the
Deferred Compensation Plan and $3,000 to the Savings Plan in 1995.
-14-
<PAGE> 18
(4) Includes contributions by the Company of $41,472 to the Deferred
Compensation Plan in 1997; contributions by ASA of $39,690 to the Deferred
Compensation Plan in 1996; and contributions by ASA of $38,448 to the
Deferred Compensation Plan and $3,000 to the Savings Plan in 1995.
(5) Includes contributions by the Company of $12,780 to the Deferred
Compensation Plan and $4,450 by ASA to the Savings Plan in 1997;
contributions by ASA of $11,616 to the Deferred Compensation Plan and
$3,500 to the Savings Plan in 1996; and contributions by ASA of $11,172 to
the Deferred Compensation Plan and $3,000 to the Savings Plan in 1995.
(6) Mr. Paquette was named as Senior Vice President--Operations of ASA on
April 21, 1997. The Company's Board of Directors designated Mr. Paquette
as an "executive officer" of the Company on May 21, 1997 because he
performs policy-making functions for the Company.
(7) Represents contributions by ASA to the Deferred Compensation Plan in 1997.
-15-
<PAGE> 19
STOCK OPTION/SAR GRANTS AND RELATED INFORMATION
At the Company's annual meeting held on May 21, 1997, the shareholders
approved and adopted the ASA Holdings, Inc. 1997 Nonqualified Stock Option Plan
(the "Stock Option Plan") to replace the Company's existing Stock Appreciation
Rights Plan (the "SAR Plan"). Under the Stock Option Plan, holders of SARs could
exchange their SARs for options, with each SAR being exchangeable on a
one-for-one basis for an option to purchase one share of the Company's Common
Stock. The exercise price of an option granted pursuant to such an exchange
would be the same as the grant price of the SAR, and the expiration date of such
an option would be the same date as the date five years after the SAR was
originally granted to the holder (i.e., the date on which the SAR would
otherwise be automatically exercised). Holders of all outstanding SARs exchanged
their SARs for options under the Stock Option Plan, and the SARs were canceled.
The Company granted SARs under the SAR Plan with respect to an aggregate
of 467,700 shares of Common Stock ("1997 SARs") in 1997, which grants were made
prior to the 1997 annual shareholders meeting. As indicated above, all of these
SARs, as well as all SARs granted prior to 1997 ("Previously Granted SARs"),
were exchanged by the holders thereof for replacement options on May 21, 1997.
The following table sets forth information concerning all options granted in
1997 to the named executive officers in replacement of their 1997 SARs.
Information with respect to options granted to the named executive officers in
respect of their Previously Granted SARs is included in footnote 1 to the table.
No other options were granted to the named executive officers in 1997.
<TABLE>
<CAPTION>
OPTION/SAR GRANTS IN 1997
INDIVIDUAL GRANTS
---------------------------------------------------------------
POTENTIAL REALIZABLE
NUMBER OF % OF VALUE AT ASSUMED ANNUAL
SECURITIES TOTAL RATES OF STOCK PRICE
UNDERLYING OPTIONS/SARS EXERCISE APPRECIATION FOR OPTION
OPTIONS/SARS GRANTED TO OR BASE TERM
GRANTED EMPLOYEES PRICE EXPIRATION -----------------------
NAME (#) (1) IN 1997 (2) ($/SH) (3) DATE (4) 5% 10%
- ---- ------------ ----------- ---------- ---------- -------- -----------
<S> <C> <C> <C> <C> <C> <C>
George F. Pickett..... 132,900 28.4% $22.375 1/29/02 $821,987 $1,816,079
John W. Beiser........ 129,700 27.7% $22.375 1/29/02 $802,195 $1,772,350
Ronald V. Sapp........ 42,000 9.0% $22.375 1/29/02 $259,770 $ 573,930
Edward J. Paquette.... 53,600 11.5% $ 21.25 4/21/02 $314,632 $ 695,192
</TABLE>
(1) Represents shares underlying options granted under the Stock Option Plan
in exchange for the cancellation of an equal number of the holder's 1997
SARs. In addition to replacement options for their 1997 SARs, the named
executive officers received replacement options under the Stock Option
Plan in respect of their Previously Granted SARs in the following amounts:
Mr. Pickett - 275,500 options; Mr. Beiser - 217,400 options; Mr. Sapp -
82,500 options; and Mr. Paquette - 0 options. Options granted in
replacement of Previously Granted SARs are not presented in the table. The
options granted to Messrs. Pickett, Beiser and Sapp are immediately
exercisable. The options granted to Mr. Paquette become exercisable in two
equal annual installments beginning on the first anniversary of the date
of grant. The exercisability of options may be accelerated upon the
optionee's retirement with consent of the Company, death or material
disability. The exercise price may be paid with the delivery of
already-owned shares or through a broker-assisted exercise.
-16-
<PAGE> 20
(2) Represents the percentage of options granted in replacement of 1997 SARs.
Does not reflect options issued in replacement of Previously Granted SARs.
(3) The exercise price of the replacement options is the same as the grant
price of the 1997 SARs.
(4) The expiration date of the replacement options is the same date on which
the 1997 SARs would have been automatically exercised.
The following table sets forth information with respect to the named
executive officers concerning the exercise of options during the last fiscal
year and unexercised options held as of the end of the fiscal year.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED IN-THE-
OPTIONS/SARS AT MONEY OPTIONS/SARS
FISCAL YEAR-END (#) AT FISCAL YEAR-END ($) (1)
SHARES ACQUIRED VALUE ------------------- --------------------------
NAME ON EXERCISE (#) REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- --------------- ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
George F. Pickett..... 66,600 581,156 341,800 -- 2,279,725 --
John W. Beiser ....... 13,400 126,475 333,700 -- 2,225,256 --
Ronald V. Sapp........ 20,300 178,487 104,200 -- 693,550 --
Edward J. Paquette... -- -- -- 53,600 -- 385,250
</TABLE>
- ------------------
(1) The fair market value of the Common Stock at the close of business on
December 31, 1997, was $28.4375 per share based on the closing price per
share as quoted on the Nasdaq National Market.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
The Company maintains a Supplemental Executive Retirement Plan ("SERP") to
provide certain of its key executives with supplemental retirement income.
Currently, Messrs. Pickett and Beiser are the only SERP participants. Under the
SERP, after reaching age 55 and after retiring or terminating employment with
the Company and its subsidiaries, participants will be entitled to annual
benefits, paid on a monthly basis, of $150,000 offset by (i) 50% of the
participant's annual Social Security benefits projected as of the last day of
the calendar month of the participant's actual date of retirement or termination
of employment; (ii) the actuarial equivalent, expressed as an annual benefit for
the life of the participant, of 100% of the vested amount in the participant's
Employer Matching Account under the Savings Plan as of the last day of the
calendar month containing the participant's actual date of retirement or
termination; and (iii) the actuarial equivalent, expressed as an annual benefit
for the life of the participant, of 100% of the participant's vested benefits
under the Deferred Compensation Plan as of the last day of the calendar month
containing the participant's actual date of retirement or termination of
employment. For each year that the participant continues to be employed by the
Company 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
-17-
<PAGE> 21
statement, the benefits payable to each of Messrs. Pickett and Beiser would be
$168,540 annually, reduced by the applicable amounts of their benefits under the
Savings Plan, the Deferred Compensation Plan and Social Security.
EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS
Except as described below, during 1997 none of the named executive
officers had an employment contract with the Company, ASA or ASA Investments. In
1990, ASA entered into Founding Officer Agreements with each of Messrs. Pickett
and Beiser, 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, the Company assumed ASA's
obligations under the Founding Officer Agreements and the agreements were
amended to apply to a change in control with respect to the Company. A "change
in control" means ownership of more than 50% of the Company's 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.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Since 1984, ASA has operated from the Atlanta and Dallas/Fort Worth hubs
as a "Delta Connection" carrier pursuant to a marketing agreement with Delta.
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 1997 fiscal year were approximately $11,686,000. In
addition, at December 31, 1997, Delta owed ASA approximately $205,000 for
various services performed by ASA for Delta and ASA owed Delta approximately
$1,725,000 for various services performed by Delta for ASA, as described above.
During 1997, approximately 84% of ASA's passengers connected with or from Delta
flights at ASA's Atlanta, Georgia and Dallas/Fort Worth, Texas hubs. Edward H.
West, the Controller of Delta, served as a Delta designee on the Company's Board
of Directors and as a member of the Audit Committee until March 27, 1997. See
"Designation of Directors." As of March 30, 1998, Delta (through its wholly
owned subsidiary Delta Air Lines Holdings, Inc.) beneficially owned
approximately 26.8% of the Company's outstanding Common Stock. See "Security
Ownership of Certain Beneficial Holders."
-18-
<PAGE> 22
ITEM 2 -- PROPOSAL TO APPROVE THE ASA HOLDINGS, INC.
1998 NONQUALIFIED STOCK OPTION PLAN
FOR NON-EMPLOYEE DIRECTORS
On February 11, 1998, the Board of Directors of the Company adopted and
approved, subject to shareholder approval, the 1998 Nonqualified Stock Option
Plan for Non-Employee Directors (the "Plan"). The Plan provides for the grant to
certain directors of options to purchase shares of Common Stock, which options
shall be nonqualified stock options ("NQSOs"). An aggregate of 250,000 shares of
Common Stock may be issued upon exercise of options granted to eligible
directors under the Plan, which number is subject to adjustment as provided in
the Plan.
At the Annual Meeting, shareholders of the Company are being requested to
consider and approve the adoption of the Plan. The essential features of the
Plan are outlined below. The following summary is qualified in its entirety by
reference to the specific provisions of the Plan, the full text of which is
attached hereto as Appendix A.
PURPOSE OF THE PLAN
The purpose of the Plan is to provide the Company with the means to
continue to attract and retain the services of experienced and knowledgeable
individuals to serve as independent members of the Board of Directors, to
provide additional performance incentives to such individuals while serving as
directors and to encourage their continued service on the Board.
MAJOR PROVISIONS OF THE PLAN
The major provisions of the Plan are as follows:
Eligibility. Options may be granted only to directors of the Company who
are not employees of the Company or its affiliates and who have not been
employed by the Company and its affiliates for the preceding 12 month period
("Outside Directors"). As of March 30, 1998, four of the Company's directors
qualified as Outside Directors.
Administration. The Plan is administered by the Board of Directors of the
Company. Pursuant to the Plan, members of the Board of Directors will be
indemnified by the Company against expenses incurred in connection with
defending or settling any claims or actions against them as a result of their
activities in administering the Plan.
Option Grants. The Board of Directors may grant options on a discretionary
basis to any person who is an Outside Director. In addition, each member of the
Board of Directors who qualifies as an Outside Director on December 31 of any
year will receive an option to purchase 2,500 shares of the Company's Common
Stock. The maximum number of shares of Common Stock subject to options under the
Plan for each participant in any one year is 5,000 shares.
Term and Conditions of Options. Each option granted pursuant to the Plan
will be evidenced by an option agreement executed by the Company and the
optionee. The exercise
-19-
<PAGE> 23
price per share of options granted under the Plan shall be the fair market value
of the Common Stock (which is defined in the Plan as the closing price of the
Company's Common Stock on the Nasdaq National Market) on the date of the option
grant. Each option is immediately exercisable and will expire on the tenth
anniversary of the date of the option grant. The closing price of the Common
Stock on the Nasdaq National Market on March 30, 1998 was $35.875.
Exercise and Payment. Options granted under the Plan may be exercised by
filing a written notice with the Company accompanied by (i) payment of cash,
optionee's check acceptable to the Company or other immediately available funds,
(ii) Company Common Stock already owned by the optionee for a period of not less
than six months with an aggregate fair market value equal to the exercise price,
(iii) a broker-assisted exercise in accordance with procedures established by
the Board, or (iv) a combination of the foregoing methods of payment. The
Company may not loan funds to any participant in the Plan for the purchase of
shares pursuant to an exercise of options under the Plan.
Termination of Director Status. If an optionee ceases to be a director
(other than as a result of disability, death, agreed retirement or removal for
cause), he or she may exercise his or her then outstanding options for a period
of four months following termination, subject to the condition that no option is
exercisable after the expiration date of the option. If an optionee is unable to
continue his or her service as a director as a result of retirement with the
consent of the Company or a material disability, or if the optionee dies while a
director or within three months after ceasing to be a director after agreed
retirement or material disability, he or she (or his or her personal
representative) may exercise any outstanding options for a period of twelve
months following such termination or death, subject to the condition that no
option is exercisable after the expiration date of the option. If an optionee is
removed from the Board for cause, any outstanding options must be exercised
prior to the date such person is formally removed.
Transferability of Options. No option shall be transferable by an optionee
other than by operation of law, by will or by the laws of descent or
distribution.
Amendment or Termination of the Plan. The Board of Directors may amend,
suspend or terminate the Plan, subject to any shareholder approvals necessary
for purposes of Rule 16b-3 under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and other approvals required by law; however no amendment,
suspension or termination of the Plan shall alter or impair any rights or
obligations under any option previously granted under the Plan without the
optionee's consent.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
A director will generally recognize no taxable income as the result of the
grant of a NQSO. Upon exercise of a NQSO, an optionee will normally recognize
ordinary compensation income for federal tax purposes equal to the excess, if
any, of the then fair market value of the shares over the exercise price. The
optionee will be required to satisfy any tax withholding requirements applicable
to such income.
-20-
<PAGE> 24
The Company will generally be entitled to a tax deduction to the extent
and in the year that ordinary income is recognized by the exercising optionee.
Upon the sale of shares acquired pursuant to the exercise of a NQSO, any
difference between the sale price and the fair market value of the shares on the
date of exercise will be treated as capital gain or loss (long-term or
short-term, depending on the length of time the shares have been held).
NEW PLAN BENEFITS
If the Plan is adopted by the Company's shareholders, each of the
qualified Outside Directors (currently Messrs. Mori, Petit, A. Voorhees and R.
Voorhees) will receive a grant of options to purchase 2,500 shares of Common
Stock as of the date of shareholder approval of the Plan. In addition, the Board
of Directors may, in its discretion, grant additional options to qualified
Outside Directors, subject to the number limitations set forth in the Plan. Mr.
Berry will not be eligible for option grants under the Plan in 1998. Messrs.
Pickett and Beiser are not Outside Directors and accordingly are not eligible to
participate in the Plan. Except for the non-discretionary grants discussed
above, future grants under the Plan are not determinable at this time.
If a quorum is present, approval of the Plan requires the affirmative vote
of a majority of shares represented at the meeting and entitled to vote. THE
BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" THE APPROVAL AND
ADOPTION OF THE ASA HOLDINGS, INC. 1998 NONQUALIFIED STOCK OPTION PLAN FOR
NON-EMPLOYEE DIRECTORS.
OTHER MATTERS
The Board of Directors does not know of any other matters to be presented
for action at the Annual Meeting. If any other business should properly come
before the meeting, the persons named in the accompanying form of proxy intend
to vote thereon in accordance with their best judgment.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's directors and
executive officers and persons who own more than ten percent of a registered
class of the Company's equity securities to file reports with the Securities and
Exchange Commission regarding beneficial ownership of Common Stock and other
equity securities of the Company. To the Company's knowledge, based solely on a
review of copies of such reports furnished to the Company and written
representations that no other reports were required, during the fiscal year
ended December 31, 1997, all officers, directors and greater than ten percent
beneficial owners complied with the Section 16(a) filing requirements of the
Exchange Act.
INDEPENDENT AUDITORS
Ernst & Young LLP, which audited the Company's accounts for the last
fiscal year, has been selected to continue as the Company's independent auditors
for the current year.
-21-
<PAGE> 25
Representatives of Ernst & Young LLP are expected to be present at the Annual
Meeting and will have the opportunity to make a statement if they so desire and
to respond to appropriate questions from shareholders.
SHAREHOLDER PROPOSALS
Any shareholder proposal intended to be presented at the 1999 Annual
Meeting and to be included in the Company's proxy statement and proxy card for
the 1999 Annual Meeting must be received by the Secretary of the Company by
December 18, 1998. Any such proposal must comply in all respects with the rules
and regulations of the Securities and Exchange Commission.
ANNUAL REPORT ON FORM 10-K
The Company's Annual Report to the Securities and Exchange Commission on
Form 10-K for the year ended December 31, 1997 (including the consolidated
financial statements and schedules thereto but excluding exhibits) will be
provided without charge to each shareholder so requesting in writing. Each
request must set forth a good faith representation that, as of April 3, 1998,
the Record Date for the Annual Meeting, the person making the request
beneficially owned shares of Common Stock of the Company. The written request
should be directed to: ASA Holdings, Inc., 100 Hartsfield Centre Parkway, Suite
800, Atlanta, Georgia 30354, Attention: Ronald V. Sapp.
YOUR VOTE IS IMPORTANT
You are encouraged to let us know your preference by marking the
appropriate boxes on the enclosed proxy card.
-22-
<PAGE> 26
APPENDIX A
ASA HOLDINGS, INC.
1998 NONQUALIFIED STOCK OPTION PLAN
FOR NON-EMPLOYEE DIRECTORS
1. Purpose. The purpose of the ASA Holdings, Inc. 1998 Nonqualified
Stock Option Plan for Non-Employee Directors (the "PLAN") is to (i) attract and
retain the services of experienced and knowledgeable independent directors of
ASA Holdings, Inc., a Georgia corporation, for the benefit of ASA Holdings and
its shareholders; and (ii) provide an additional incentive for such directors to
continue to work for the best interests of ASA Holdings and its shareholders
through continuing ownership of its common stock. The stock options granted
pursuant to this Plan are non-qualified stock options and shall not be incentive
stock options, as defined in Section 422 of the Internal Revenue Code of 1986,
as amended.
2. Definitions: As used in the Plan, the following terms have the
following meanings:
(a) "ASA HOLDINGS" means ASA Holdings, Inc., a Georgia
corporation.
(b) "AGREEMENT" shall have the meaning set forth in Paragraph
5 of the Plan.
(c) "AWARD" means the grant of an Option.
(d) "BOARD" means the Board of Directors of ASA Holdings.
(e) "COMMON STOCK" means shares of Common Stock, $.10 par
value per share, of ASA Holdings.
(f) "DIRECTOR" shall mean a member of the Board.
(g) "DATE OF GRANT" means (i) with respect to discretionary
Options granted in accordance with Section 5(a), the date specified by the Board
as the date on which an Award shall become effective, which date shall be (A)
the Effective Date, with respect to Options granted before the Effective Date,
and (B) thereafter, the date concurrently with or a date following the date of
the Board action approving the Award, and (ii) with respect to non-discretionary
Options granted in accordance with Section 5(b), (A) the Effective Date, with
respect to Options granted before the Effective Date, and (B) thereafter,
January 15 (or the most recent business day prior thereto if such date is not a
business day) of the year in which an Award shall become effective in accordance
with Section 5 of the Plan.
<PAGE> 27
(h) "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.
(i) "EXERCISE PRICE" means the purchase price per share of
Common Stock payable on exercise of an Option, as set forth in the applicable
Agreement.
(j) "EXPIRATION DATE" means the date that is the tenth (10th)
anniversary of the Date of Grant, which is the date after which the Options
described in an Agreement that have not previously been exercised shall
terminate, become null and void and no longer be of any force and effect.
(k) "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 a trading date) on
the National Market of The Nasdaq Stock Market, or such national exchange, if
any, as may be designated by the Board.
(l) "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.
(m) "OPTION SHARES" means the shares of Common Stock purchased
pursuant to the exercise of an Option.
(n) "PARTICIPANT" means a person to whom an Award has been
made pursuant to the Plan.
(o) "RULE 16B-3" means Rule 16b-3 under the Securities
Exchange Act of 1934, as amended, and the rules and regulations thereunder.
(p) "TERM OF THE PLAN" means the period from the Effective
Date through and including the 31st day of March, 2008.
(q) "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. The Plan shall be administered, and
Awards shall be granted hereunder, by the Board. The interpretation and
construction by the Board of any provision of the Plan or of any Agreement, and
any determination by the Board pursuant to any provision of the Plan or of any
Agreement, shall be final and conclusive. No member of the Board shall be liable
for any such action or determination made in good faith.
4. Shares Available Under the Plan. The maximum number of shares of
Common Stock that may be issued upon the exercise of Options granted under the
Plan is
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<PAGE> 28
250,000. ASA Holdings shall reserve 250,000 shares of Common Stock for Options
granted under the Plan, subject to adjustment as provided in Paragraph 7. Such
shares may be shares of original issuance or treasury shares or any combination
of the foregoing. Any shares of Common Stock that 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 a 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 that 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 Board which shall contain terms and
conditions not inconsistent with the Plan and which shall incorporate the Plan
by reference.
(a) Grant of Discretionary Options. The Board may grant
Options to any person who is a Director and is not, and has not during the
immediately preceding 12-month period been, an employee of ASA Holdings or any
subsidiary thereof.
(b) Grant of Non-Discretionary Options. Each person who is a
Director and is not, and has not during the immediately preceding 12-month
period been, an employee of ASA Holdings or any subsidiary thereof,
automatically shall be a Participant. Each Participant who is a Director on
December 31st of any year beginning December 31, 1997, shall on the immediately
succeeding Date of Grant automatically be granted an Option to acquire 2,500
Option Shares under the Plan.
(c) Maximum Annual Grant. The maximum number of shares of
Common Stock that are the subject of Options that may be granted to any
Participant in any one fiscal year of ASA Holdings is 5,000 shares.
(d) Terms and Conditions. The terms and conditions of the
grant of Options under the Plan shall comply with the following terms and
conditions:
i. Each Agreement shall specify the number of
shares of Common Stock for which Options
have been granted.
ii. Each Agreement shall specify the Exercise
Price, which shall be the Fair Market Value
of the Common Stock on the Date of Grant.
iii. Each Agreement shall specify that the
Exercise Price shall be payable (i) in cash
or other immediately available funds
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<PAGE> 29
or by check acceptable to ASA Holdings, (ii)
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, (iii) by a
broker-assisted exercise pursuant to
procedures the Board may, in its sole
discretion, establish from time to time, or
(iv) by a combination of some or all of such
methods of payment. ASA Holdings shall not
loan any monies to any Participant for the
purchase of any Option Shares.
iv. Successive grants may be made to the same
Participant whether or not any Options
previously granted to such Participant
remain unexercised.
v. Each Option shall be immediately
exercisable. Each Agreement shall specify
the Expiration Date.
vi. In the event that a Participant shall cease
to be a Director for any reason other than
the Participant's death, a material
disability, retirement with the consent of
ASA Holdings or removal from office for
cause, all Options held by the Participant
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.
vii. If a Participant ceases to be a Director due
to a material disability or retirement with
the consent of ASA Holdings, such disabled
or retiring Participant shall have the right
to exercise Options which have not
previously been exercised at the date such
Participant ceases to be a Director 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 a Participant
ceases to be a Director due to a material
disability or is considered to have retired
with the consent of ASA Holdings shall be
determined by the Board.
viii. If the Participant shall die while a
Director or within a period of three (3)
months after the Participant ceases to be a
Director as a result of a material
disability or retirement
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<PAGE> 30
with the consent of ASA Holdings as
determined in subparagraph (vii) 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.
ix. If a Participant is removed from the Board
for cause as determined by the shareholders
or the Board, the options granted to such
Participant must be exercised prior to the
date the Participant is formally removed.
x. 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.
6. Issuance of Certificates. Subject to Paragraph 9 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.
7. Adjustments. The Board 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 Board,
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.
8. Fractional Shares. ASA Holdings shall not be required to issue any
fractional shares of Common Stock pursuant to the Plan. The Board may provide
for the elimination of fractional shares or for the settlement of fractional
shares in cash.
9. Withholding Taxes. 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.
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<PAGE> 31
10. 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 Board 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.
11. 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 ASA
Holdings for which the record date is prior to the date upon which the
Participant shall become the holder of record thereof.
12. Indemnification of Board. In addition to such other rights of
indemnification as they may have as Directors, members of the Board shall be
indemnified by ASA Holdings 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 ASA Holdings) or paid by them in
satisfaction of a judgment in any such proceeding, except in relation to matters
as to which it shall be adjudged in such action, suit or proceeding that such
Board 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 Board member shall in writing offer ASA
Holdings the opportunity at its own expense, to handle and defend the same.
13. 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 ASA Holdings' voting common stock entitled to vote if the Board determines
that such approval is necessary in order for ASA Holdings to rely on the
exemptive relief provided under Rule 16b-3; 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 Board may amend or modify the
Plan in a manner that (a) does affect Options granted prior to the date of the
amendment if the Board determines that such amendment or modification is
necessary to retain the benefits
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<PAGE> 32
of Rule 16b-3, 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 ASA Holdings,
nor will it interfere in any way with any right ASA Holdings would otherwise
have to terminate such Participant's employment or other service at any time.
14. 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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<PAGE> 33
APPENDIX B
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR ANNUAL MEETING OF SHAREHOLDERS TO BE HELD MAY 21, 1998
ASA HOLDINGS, INC.
The undersigned hereby appoints JOHN W. BEISER and GEORGE F. PICKETT, and
each of them, as Proxies, for and on behalf of the undersigned, with full power
of substitution, 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 Thursday, May 21, 1998, at 11:00 a.m., Atlanta, Georgia time, at
the Renaissance Waverly Hotel, The Chambers Room, 2450 Galleria Parkway,
Atlanta, Georgia or any adjournments or postponements thereof.
1. PROPOSAL TO FIX THE NUMBER OF DIRECTORS AT SEVEN AND TO ELECT SEVEN
DIRECTORS.
(INSTRUCTION: TO FIX THE NUMBER OF DIRECTORS AT A NUMBER LESS THAN SEVEN, 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 SEVEN AND TO VOTE FOR
ALL NOMINEES.)
[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY [ ] ABSTAIN
(except as marked to the for all nominees
contrary below) listed below
John W. Beiser, George J. Berry, 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. 1998 NONQUALIFIED
STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS:
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
<PAGE> 34
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 SEVEN AND TO ELECT ALL SEVEN 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, 1998.
Dated_______________________________________, 1998
__________________________________________________
(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
