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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
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CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) September 6, 1994
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DART GROUP CORPORATION
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(Exact name of registrant as specified in its charter)
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<S> <C> <C>
Delaware 0-1946 53-0242973
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
3300 75th Avenue, Landover, Maryland 20785
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(Address of principal executive offices) (Zip Code)
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Registrant's telephone number, including area code (301) 731-1200
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(Former name or former address, if changed since last report.)
The total number of sequentially numbered pages is 8.
The exhibit index appears on page 4.
Page 1 of 8
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Item 1. Changes in Control of Registrant.
The discussion under Item 5 of this Current Report on Form 8-K is
incorporated herein by reference.
Item 5. Other Events
On September 6, 1994, Ronald S. Haft tendered Dart Group Corporation
(DARTA) (the "Corporation") a letter:
(1) to exercise, effective immediately, options (the "Options") to
purchase, at an exercise price of $89.65 per share, 197,048
shares (the "Option Shares") of the Corporation's Class B
Common Stock pursuant to Article 4(a) of the Employment
Agreement (the "Employment Agreement") dated August 1, 1993
between Ronald S. Haft and the Corporation; and
(2) to exercise his right under the Employment Agreement,
effective immediately, to obtain a loan from the Corporation
in the amount of $17,665,353.20, for part of the exercise
price of the Options.
Together with that letter, Ronald S. Haft tendered to the Corporation:
a check payable to the Corporation in the amount of $197,048.00 as payment of
the par value of the Option Shares; and an executed unsecured promissory note
of Ronald S. Haft payable to the order of the Corporation in the amount of
$17,665,353.20, the balance of the exercise price for the Option Shares under
the Options.
The Corporation has neither accepted nor rejected the validity of
Ronald S. Haft's exercise of the Options or the adequacy of the promissory note
tendered in connection therewith. Issuance of the Option Shares has not been
recorded in the stock records of the Corporation, and the Corporation has not
issued any stock certificate to Ronald S. Haft for the Option Shares.
A pending shareholders' derivative lawsuit (Alan R. Kahn, et al. v.
Herbert H. Haft, et al., Del. Ch. No. 13154 (filed September 29, 1993), seeks a
judgment that would, inter alia, declare the Options to be null and void and
rescind their issuance. A special litigation committee of the Board of
Directors of the Corporation has been reviewing the allegations in the
complaint filed in the lawsuit.
Ronald S. Haft has filed a lawsuit against the Corporation (Ronald S.
Haft v. Dart Group Corporation, Del. Ch. 13736 (filed September 12, 1994))
seeking a court order that the Corporation issue the Option Shares to him and
grant him a loan of $17,665,353.20 to be used as part of the payment for the
Option Shares. On September 14, 1994, a Standstill Agreement agreed to on
behalf of the Corporation and Ronald S. Haft was ordered by the Court of
Chancery in this matter. The Standstill Agreement, which is included as an
exhibit to this report on Form 8-K and incorporated herein by reference,
restricts certain actions by the Corporation and its stockholders until further
order of the Court.
Item 7. Financial Statements and Exhibits
Exhibit 99(a): Letter dated September 6, 1994 from Ronald S. Haft to
Herbert H. Haft relating to the exercise of options
to purchase shares of Class B Common Stock of the
Corporation.
Page 2 of 8
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Exhibit 99(b): Standstill Agreement executed on behalf of the
Corporation and Ronald S. Haft and ordered on
September 14, 1994 by the Court in Ronald S. Haft v.
Dart Group Corporation, Del. Ch. 13736 (filed
September 12, 1994).
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
DART GROUP CORPORATION
By:
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Date: September 16, 1994
Page 3 of 8
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EXHIBIT INDEX
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Exhibit Sequential
No. Description Page Number
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99(a) Letter dated September 6, 1994 from 5
Ronald S. Haft to Herbert H. Haft
relating to the exercise of options to
purchase shares of Class B Common Stock
of the Corporation
99(b) Standstill Agreement executed on behalf 6
of the Corporation and Ronald S. Haft
and ordered on September 14, 1994 by the
Court in Ronald S. Haft v. Dart Group
Corporation, Del. Ch. 13736 (filed
September 12, 1994).
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Page 4 of 8
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Exhibit 99(a)
September 6, 1994
BY HAND AND BY REGISTERED MAIL
(RETURN RECEIPT REQUESTED)
Mr. Herbert H. Haft
Dart Group Corporation
3300 75th Avenue
Landover, Maryland 20785
Dear Mr. Haft:
Pursuant to Article 4(a) of my Employment Agreement with Dart Group
Corporation ("Dart"), I hereby exercise, effective immediately, in whole, the
options to purchase 197,048 shares of Class B common stock of Dart.
Pursuant to Article 4(b) of my Employment Agreement with Dart, I hereby
exercise my right, effective immediately, to obtain a loan from Dart for the
exercise price of the options to purchase the 197,048 shares of Class B common
stock of Dart. Enclosed is a check for $197,048, representing the par value of
the stock, and an executed term note for $17,665,353.20, representing the full
exercise price of the stock. The form of the note is the same as that used most
recently by Dart in connection with the exercise of options.
I demand delivery of the shares and the appropriate recording of this
transaction on Dart's books and records, including in Dart's stock ledger, by
the close of business today, September 6, 1994.
Very truly yours,
/s/ Ronald S. Haft
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Ronald S. Haft
Enclosures: check for $197,048
term note for $17,665,353.20
cc (without enclosures):
Mr. Elliot Arditti
Mr. Ronald Marshall
Page 5 of 8
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EXHIBIT 99(b)
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
RONALD S. HAFT, :
:
Plaintiff, : C.A. No. 13736
:
v. :
:
DART GROUP CORPORATION, :
a Delaware corporation, :
:
Defendant. :
STANDSTILL AGREEMENT
WHEREAS, Ronald S. Haft ("RSH") sent a letter dated September 6, 1994
to Herbert H. Haft ("HHH") and Dart Group Corporation ("Dart") regarding
Article 4(a) of an employment agreement dated August 1, 1993 between RSH and
Dart (the "Employment Agreement");
WHEREAS, Article 4 of the Employment Agreement is now subject to
litigation in the Delaware Court of Chancery in the case captioned Ronald S.
Haft v. Dart Group Corporation, C.A. No. 13736 (the "Litigation"); and
WHEREAS, the executive committee of Dart believes that it is in the
best interest of the corporation not to allow disputed corporate actions to
occur;
NOW, THEREFORE, in consideration of RSH agreeing to modify his
request for expedited proceedings, and for other good and valuable
consideration the receipt of which is hereby acknowledged, Dart and RSH agree
as follows:
1. Until further order is entered by the Delaware Court of Chancery
in the Litigation, Dart will not recognize any stockholder action seeking to
change the Certificate of Incorporation or By-laws;
2. Until further order is entered by the Delaware Court of Chancery
in the Litigation, Dart will not recognize any stockholder action seeking to
change the composition of the current Board of Directors of Dart or any of its
subsidiaries;
Page 6 of 8
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3. Until further order is entered by the Delaware Court of Chancery
in the Litigation, Dart will not recognize any stockholder action seeking to
change the current Haft family officers of Dart or any of its subsidiaries;
4. Until further order is entered by the Delaware Court of
Chancery in the Litigation, Dart will not change the Certificate of
Incorporation or By-laws;
5. Until further order is entered by the Delaware Court of Chancery
in the Litigation, Dart will not change the composition of the current Board of
Directors of Dart or any of its subsidiaries;
6. Until further order is entered by the Delaware Court of Chancery
in the Litigation, Dart will not change the current Haft family officers of
Dart or any of its subsidiaries;
7. Until further order is entered by the Delaware Court of Chancery
in the Litigation, Dart will not issue any additional securities in Dart or any
of its subsidiaries;
8. Until further order is entered by the Delaware Court of Chancery
in the Litigation, Dart will not take any extraordinary actions that will: (a)
liquidate Dart or any of its subsidiaries; (b) sell any major subsidiary of
Dart; or (c) through any debt transaction disadvantage any Class B stockholder.
This paragraph shall not be construed to affect Dart's ability to take any
position it chooses in the Litigation or to run the business of Dart on a
day-to-day basis; and
9. This Standstill Agreement shall continue in effect until further
order of the Delaware Court of Chancery in the Litigation.
/s/ ARTHUR G. CONNOLLY, JR.
OF COUNSEL: ---------------------------
Stephen J. Brogan Arthur G. Connolly, Jr.
JONES DAY REAVIS & POGUE CONNOLLY BOVE LODGE & HUTZ
1450 G Street, N.W. 1220 Market Building
Washington, D.C. 20005 Wilmington, Delaware 19801
Attorneys for Dart Group
Corporation
Page 7 of 8
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/s/ STUART M. GRANT
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Stuart M. Grant
SKADDEN, ARPS, SLATE,
MEAGHER & FLOM
One Rodney Square
Wilmington, Delaware 19901
Attornerys for Ronald S. Haft
SO ORDERED THIS 14 DAY
OF SEPTEMBER 1994
/s/ WILLIAM T. ALLEN
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Chancellor
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